Bajaj Healthcare Ltd Management Discussions

Global economic overview

The global economic growth remained stagnant at 3.5% in 2024 and 2025, as the effects of the war in the Middle East were largely offset by accelerated demand-driven momentum in the global technology cycle, powered by advances in artificial intelligence (AI) and its adoption. The impact has varied widely across countries — energy exporters outside the conflict zone benefited from favourable terms of trade, while economies integrated into the technology value chain saw stronger activity even where they were energy importers, whereas energy importers with limited participation in the technology upturn, a group that includes many low-income countries, experienced weaker activity.

Advanced economies witnessed a marginal increase in growth, remaining broadly stable at 1.9% in both 2024 and 2025, while emerging market and developing economies also held steady at 4.5% in 2025 compared to 4.5% in 2024.

Global inflation moderated sharply in

2025, declining to an estimated 4.1% from 5.8% in 2024, continuing the multi-year disinflation trend that had been in place since the beginning of 2024.

Outlook

Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook Update assumes that the reopening of the Strait of Hormuz begins in mid-July 2026, with conditions broadly returning to the prewar state of affairs by March 2027, consistent with commodity price assumptions based on market pricing as of June 10, 2026.

Under this outlook, global growth is projected at 3.0% in 2026, before recovering to 3.4% in 2027. Global inflation is expected to rise to 4.7% in 2026, as the disinflation trend since 2024 stalls, before easing to 3.9% in 2027.

(Source: IMF World Economic Outlook Update — July 2026, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan)

Indian economic overview

The Indian economys real GDP grew at 7.7% in FY 2025-26, compared to 71% in FY 2024-25. This growth was driven by strong consumption and increasing investments, reaffirming Indias position as the fastest-growing major economy.

Indias Real GDP at Constant Prices was estimated at H323.12 Lakh Cr in FY 2025-26, compared with H299.89 Lakh Cr in FY 2024-25.

Growth of the Indian economy

	FY23	FY24	FY25	FY26
Real GDP growth (%)	7.0*	7.2	7.1	7.7

* The FY23 figure (7.0%) is from the old base year series (2011-12) as the new series back-data for FY23 will only be available after December 2026.

Growth of the Indian economy quarter by quarter, FY 2025-26

	Q1FY26	Q2FY26	Q3FY26	Q4FY26
Real GDP growth (%)	6.7	8.4	7.8	7.8

Note: Q2 revised upward from 8.2% and Q3 from 7.35% under the new base year 2022-23 series released February 27, 2026. Q4 remains an estimate. (Source: MoSPI)

Inflation, policy and currency dynamics

Inflation remained benign through much of FY 2025-26, with full-year CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment.

However, macro stability was accompanied by currency volatility The Indian rupee depreciated sharply by 9.88% during FY 2025-26 — its steepest fall since FY 2011-12 — touching H94.83 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Capital flows and market behaviour

Foreign portfolio investors remained risk-averse, withdrawing a record H1.8 trillion during FY 2025-26 - the largest outflow in 36 years. However, strong domestic institutional inflows of H8.50 trillion provided a crucial counterbalance, highlighting the growing maturity and depth of Indias domestic capital markets.

Indias market capitalization declined 8% year on year in FY 2025-26 to USD 4.5 trillion from USD 4.83 trillion in FY 2024-25, marking the sharpest drop since FY 2022-23. The BSE Sensex declined 7% or 5,467 points in FY 2025-26, against a gain of 5.1% or 3,763 points, in FY 2024-25. Similarly, the Nifty 50 fell 5%, or 1,188 points, in FY 2025-26, compared to a gain of 5.3% or 1,192 points, in FY 2024-25. against a gain of 5.34%, or 1,192 points, in the corresponding period. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures under Donald Trump, which weighed on global investor sentiment.

Gold prices surged 64.1% during FY 2025-26 reflecting global risk aversion and safe-haven demand.

Indias net direct tax collections rose 5.12% y-o-y to H23.40 Lakh Cr in FY 2025-26, though this fell short of the Revised Estimate of H24.21 Lakh Cr by approximately H80,000 Cr. Corporate tax collections came in at H10.99 Lakh Cr against a target of H11.09 Lakh Cr, while personal income tax (including STT) stood at H12.41 Lakh Cr against a target of H13.12 Lakh Cr — the larger of the two misses, partly reflecting the income tax relief extended to the middle class in the Union Budget 2025-26

Indias growth story

Real Gross Value Added (GVA), which measures economic output excluding taxes and subsidies, grew 79% in FY 2025-26, compared with 7.3% in FY 2024-25. At current prices, nominal GVA rose 9.1% to H314.87 Lakh Cr from H288.54 Lakh Cr a year earlier.

The tertiary services sector remained a key growth driver, expanding by 9.0% in FY 2025-26 and increasing its share in nominal gross value added to 54.3% from 52.8% in FY 2024-25, supported by broad-based momentum across segments.

During FY 2025-26, financial, real estate, IT and professional services grew by 9.9%, while trade, hotels, transport, communication and broadcasting recorded a strong 10.1% growth, and public administration and other services expanded by 5.8%.

The secondary sector grew 9.1%, accelerating from 8.0% in the previous year, driven by manufacturing alongside construction growth of 71%. This combination of services-led scale and manufacturing acceleration is shaping a more balanced and resilient economic structure.

Consumption and investment

During FY 2025-26, Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) maintained above-7% growth, reflecting a well-balanced demand composition across household spending and investment activity.

Growth catalysts

Policy-led consumption boost:

The Union Budget FY27s tax relief measures—particularly income tax exemptions up to H12 Lakh—are expected to stimulate discretionary spending and reinforce consumption-led growth.

Anticipatory Pay Commission impact: The 8^th Pay Commission, though expected to be implemented from FY 2027-28, is already shaping consumer sentiment, creating a forward consumption impulse.

Monetary stability: The Reserve Bank of Indias calibrated stance, with the repo rate at 5.25%, balances inflation risks with growth support, ensuring macroeconomic stability

Credit expansion: Improved banking health and liquidity conditions are expected to sustain strong credit growth across MSMEs, housing, and retail segments.

Fiscal prudence with growth focus:

The Union Budget maintains fiscal discipline while prioritising infrastructure, MSME support, skilling, and innovation— key levers for long-term productivity

Outlook

The year under review underscores a defining divergence: a world grappling with uncertainty, and an India navigating it with confidence.

In a global environment marked by fragmentation and caution, India stands out as a rare convergence of stability scale and structural opportunity. The World Bank has revised its FY 2026-27 growth estimate upward to approximately 6.6%, reflecting resilient domestic momentum even as growth moderates from the previous year. India is expected to retain its position as the fastest- growing major economy.

Growth will be shaped by a combination of strong domestic demand and resilient private consumption, supported by low inflation and GST rationalization, alongside stable export performance with improved access to key markets.

This momentum is further reinforced by sustained policy support, ongoing economic reforms, and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending, and uncertainty in global demand, Indias macroeconomic fundamentals remain strong.

Over the medium term, sustained consumption, gradual investment recovery, and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth.

(Source: Upstox, Economic Times, India Today,

5paisa, Livemint, The Logical Indian)

Global pharmaceutical industry

The global pharmaceutical market continues to demonstrate resilient growth, with global medicine spending - the amount spent purchasing medicines from manufacturers before off-invoice discounts and rebates - expected to exceed USD 2.6 trillion by 2030, expanding at a CAGR of 5-8%. While growth is expected to moderate following the pandemic-driven disruptions and subsequent acceleration witnessed between 2020 and 2023, the long-term outlook remains robust, supported by demographic shifts, the rising prevalence of chronic diseases, and sustained investments in innovative therapies.

Among the most dynamic growth areas are GLP-1 treatments for diabetes and obesity, alongside advances in oncology and immunology, which continue to redefine the therapeutic landscape. Specialty medicines remain a key growth engine, reflecting the industrys increasing focus on addressing complex health conditions with advanced therapies.

The industrys growth trajectory is further supported by a strong pipeline of new products, while patent expiries and the expanding adoption of biosimilars are reshaping competitive dynamics and improving access to treatment. At the same time, digital health, AI enabled drug discovery, and telemedicine are transforming healthcare delivery and accelerating innovation across the pharmaceutical value chain.

Even as the industry enters a new phase of growth, affordability, accessibility, and evolving regulatory expectations remain central to global healthcare discussions.

Fifteen countries with GDP per capita exceeding USD 50,000 are projected to contribute significantly to global pharmaceutical spending, with the United States and 14 other high- income markets collectively accounting for nearly 76% of incremental global growth through 2030. At the same time, Pharmerging markets, characterized by GDP per capita below USD 50,000 and pharmaceutical spending growth exceeding USD 2 Bn, are expected to add approximately USD 121 Bn in incremental spending by 2030, slightly surpassing the growth recorded over the previous five years.

Oncology, immunology, diabetes, and obesity therapies are expected to remain the primary drivers of global pharmaceutical growth over the next five years. Sustained innovation, supported by a strong pipeline of novel therapies, will continue to expand treatment options and fuel market growth, although the impact of patent expiries and loss of exclusivity for several established drugs will partially offset these gains.

While most therapeutic segments are projected to witness relatively slower growth compared to the previous five-year period, demand for innovative medicines remains robust. Notably, the lipid regulators segment is poised for a revival after years of decline, driven by increasing volumes of established generic medicines and the growing adoption of next-generation PCSK9-targeted therapies for patients requiring advanced cholesterol management. These trends underscore the industrys continued shift towards high value, innovation-led treatments while broadening access to established therapies.

Developed pharmaceutical markets are expected to remain key contributors to global medicine spending through 2030. Excluding the United States, 14 high- income growth markets are projected to generate approximately USD 155.1 Bn in incremental spending, with the top eight countries accounting for nearly 83% of this increase. Growth across these markets will be driven primarily by the rapid adoption of novel therapies, as most new global drug launches are introduced within a year of approval.

Pharmerging markets are expected to contribute an additional USD 120.8 Bn in medicine spending by 2030, with the top eight countries likewise accounting for around 83% of total growth within this segment. Expanding healthcare access, rising disease awareness, and increasing affordability of treatments continue to strengthen pharmaceutical demand across these fast-growing economies, reinforcing their strategic importance in the global healthcare landscape.

Key factors driving growth of the global pharma industry

Chronic disease burden and specialty medicine shift : Specialty medicines, advanced therapies for complex or rare conditions including biologics, targeted therapies, and personalized medicines, are projected to account for roughly 50% of global pharmaceutical spending by 2025, and as much as 60% in developed markets.

Oncology and obesity now the two dominant growth engines: Obesity has rapidly entered the top five global therapy areas, surpassing immunology to become the second-largest contributor to growth, with oncology, immunology, diabetes, and obesity together generating roughly 89% of growth across the top ten therapy areas in 2025. In the U.S. specifically, more than 100 new oncology drug launches and label expansions are expected through 2029, with oncology spending alone projected at USD 165 Bn over that period, while it is forecasted that obesity drug spending could reach USD 60 Bn by 2029.

R&D investment and innovation pipeline: Biopharmaceutical R&D remained resilient through 2025, with investment and dealmaking increasingly concentrated in high-value science, emerging biopharma, and China-linked activity, though growing scientific complexity, longer development timelines, and regional disparities in trial access and drug availability are pressuring R&D productivity, raising the importance of internal efficiency measures and regulatory reform.

Regulatory frameworks and patientcentric demand: The U.S. Inflation Reduction Act, which for the first time empowers Medicare to negotiate prices on certain high-cost drugs starting in 2026, has prompted many companies to reassess revenue forecasts, R&D budgets, and pricing strategies.

(Source: IQVIA, Intuitionlabs)

Global API market overview

Active Pharmaceutical Ingredients (APIs) continue to form the backbone of the pharmaceutical value chain. Estimates of the global API market for 2025 is it at USD 270.53 Bn in 2025, growing to USD 419 Bn by 2033 at a 5.55% CAGR from 2026.

By segment, synthetic APIs held the largest revenue share at 70.99% in 2025, consistent with sustained global demand for affordable generics. Captive (inhouse)

North America remains the largest regional market, holding a 47.22% share in 2025, though Asia Pacific is expected to register the highest CAGR of any region through the forecast period.

Factors driving growth of the API industry

Growing number of patent expiries: Between 2025 and 2030, more than USD 300 Bn in prescription drug revenues will lose patent exclusivity — roughly one- sixth of the industrys annual revenue — with nearly 200 drugs affected, including about 70 blockbusters each generating over USD 1 Bn in annual sales. This is roughly three times the size of the 2016 patent cliff, which eroded about USD 100 Bn in brand-name sales.

Growing focus on outsourcing: CDMO capacity has become a genuine bottleneck rather than just a trend line. Total disclosed investment in CDMO capacity reached USD 24.86 Bn in 2025, with 74% (USD 18.48 Bn) flowing to the United States, partly because companies migrating away from Chinese CDMOs due to BIOSECURE Act compliance are now competing with generic and biosimilar manufacturers for the same Western CDMO capacity ahead of the patent-cliff wave.

(Source: Grand View Research, DrugPatentWatch)

Indian pharmaceutical industry

The Indian pharmaceutical industry stands as a global powerhouse, ranked third in the world by volume,11^th in terms of value. Renowned as the worlds largest supplier of generic medicines, India provides 20% of the worldwide generic medicine supply by volume, with roughly eight of the worlds top 20 generic companies being Indian. India also hosts the highest number of USFDA-approved manufacturing plants outside the United States, with industry estimates putting the count at over 600 USFDA-inspected facilities, and more than 2,000 facilities holding WHO-GMP certification.

These facilities span a wide spectrum of offerings - generic drugs, OTC medicines, bulk drugs, vaccines, contract research and manufacturing, biosimilars and biologics - with India also hosting over 500 active pharmaceutical ingredient producers, accounting for approximately 8% of the global API market, and supplying roughly 55-60% of UNICEFs vaccines and meeting 99% of WHOs DPT vaccine demand.

The Indian pharmaceutical industry was valued at H5.41 Lakh Cr (USD 60 Bn) in 2025 and is estimated to reach H1173 Lakh Cr (USD 130 Bn) by 2030. Beyond 2030, the industry is working toward a USD 450 Bn market by 2047. Growth is driven by a balanced contribution from exports and domestic consumption, rising life expectancy, growing prevalence of non-communicable diseases such as diabetes and cardiovascular disorders, and improved healthcare access.

Indias pharmaceutical exports stood at H2.71 Lakh Cr (USD 30.47 Bn) in FY 2024-25, up 9.4% over the previous year, supported by recovery in regulated markets, easing pricing pressures, and higher approvals for complex generics. Imports stood at USD 8.9 Bn, giving a positive trade balance of USD 21.5 Bn, and over 55% of exports go to highly regulated markets.

As per the Department of Pharmaceuticals (DoP), citing the Economic Survey 2025-26, the pharmaceutical sectors annual turnover reached H4.72 Lakh Cr in FY 2024-25, with exports growing at a CAGR of 7% over the last decade (FY15 to FY 2024-25). India remains the largest global supplier of generic medicines, accounting for around 20% of global supply and manufacturing about 60,000 generic brands across 60 therapeutic categories. Separately, on a domestic- market-value basis (distinct from total sector turnover, which includes exports), the domestic pharmaceutical market is valued at USD 60 Bn and is projected to reach USD 130 Bn by 2030

The Indian pharmaceutical industry stands as a well-established and vibrant domestic sector, home to more than 3,000 companies and 10,500 manufacturing units, supplying over 60,000 generic brands across 60 therapeutic areas. The country offers a complete ecosystem for pharmaceutical development and production, featuring state-of-the-art manufacturing facilities and a skilled yet cost-efficient workforce — Indias scientific talent pool is the second-largest English-speaking group worldwide after the US, supporting easier access to skilled manpower for both plant operations and R&D setups.

(Source: DD News)

Key policy initiatives Biopharma SHAKTI initiative:

Announced in the Union Budget 2026-27, this flagship scheme carries a H10,000 Cr outlay over five years to build Indias biologics and biosimilars manufacturing base. It includes the establishment of 3 new NIPERs and upgradation of 7 existing ones to drive pharmaceutical research and innovation, alongside development of over 1,000 clinical trial sites — effectively the Centre of Excellence push for research infrastructure.

Regulation of essential drug prices:

Continues under the National List of Essential Medicines (NLEM) framework via the National Pharmaceutical Pricing Authority, ensuring medicines remain within reach for all.

Expansion of the Jan Aushadhi scheme: The network has scaled well past earlier milestones — as of June 30, 2026, over 20,149 Jan Aushadhi Kendras (JAKs) are operational nationwide (up from just 84 in 2014), with the governments target remaining 25,000 Kendras by March 2027. The product basket now spans 2,110 medicines and 315 surgical/medical devices across 29 therapeutic categories, and prices typically run 50-80% lower than equivalent branded medicines. Cumulatively, the scheme has generated an estimated H40000+ Cr in citizen savings.

Umbrella schemes for sector-wide growth: These continue under the Department of Pharmaceuticals broader promotion framework, encompassing PLI schemes, Bulk Drug Parks, and Medical Device Parks.

Key growth drivers of the Indian pharmaceutical industry Improving average lifespan: Life expectancy at birth stands at around 72.5 years for females and 68.5 years for males per the SRS-based Abridged Life Tables (2019-2023) — a national average of roughly 70.5 years, broadly in line with your original FY2024 figure. Worth noting: Indias life expectancy had risen steadily from 49.7 years in the early 1970s to 70 years by 2016-20, before dipping to 69.8 years in 2017-21 due to COVID-19- related excess mortality — the first such reversal recorded in nearly five decades. This dip has since been recovering, and the broader upward trend supporting sustained pharma demand remains intact.

Growing instances of chronic diseases: The diabetes prevalence at 11.4% (101 Mn individuals), with prediabetes at 15.3% (136 Mn), generalized obesity at 28.6%, and abdominal obesity at 39.5%. Hypertension affects an estimated 315 Mn individuals.

Growing penetration of health insurance: This one needs a structural correction. Health insurance became the largest segment within Indias nonlife insurance market in FY 2024-25, accounting for 41% of gross domestic premium and overtaking motor insurance — a genuinely new and citable data point for your narrative.

Rising penetration of e-commerce (online pharmacies): The Indian e-pharmacy market at USD 3.71 Bn in 2025, projected to reach USD 14.08 Bn by 2034 at a 15.98% CAGR, with OTC products currently dominating at a 56% market share.

Outlook

The Indian pharmaceutical industry is set for strong growth, driven by an unprecedented wave of upcoming patent expires on high-revenue drugs, enabling Indian firms to offer affordable generic and biosimilar alternatives at scale. Between 2025 and 2030, prescription drug revenues losing patent exclusivity are estimated at USD 200-236 Bn globally, spanning oncology, diabetes, immunology, and cardiovascular therapeutics, with some broader estimates, depending on methodology, running as high as USD 300 Bn when a wider drug basket is included.

For India specifically, the opportunity is more targeted but meaningful. It is estimated that a USD 3-5 Bn revenue opportunity for Indian drugmakers from patent expiries on drugs worth USD 142 Bn by 2030, with over 60% of these being large-molecule biologics, a notable shift from the small-molecule generics cycles that defined Indias earlier growth phase. This signals a structural transition in Indias competitive positioning, from being purely a low-cost small-molecule generics hub toward building genuine biosimilar manufacturing capability.

(Source: Credevo, New Kerala)

Company overview

Established in 1993, Bajaj Healthcare Limited (BHL) has evolved into one of Indias leading pharmaceutical companies, driven by a steadfast commitment to making quality healthcare accessible across the globe. Over the years, the Company has built a diversified portfolio of more than 250 products, spanning Active Pharmaceutical Ingredients (APIs) and finished dosage formulations. Backed by advanced manufacturing capabilities, process innovation, and operational excellence, BHL has established itself as a trusted manufacturer of high quality APIs and formulations for global pharmaceutical companies.

Its commitment to quality is reinforced by globally recognized certifications and approvals, including US FDA, EU GMP, KFDA, ISO 9001:2015, and WHO GMP enabling it to compete effectively in highly regulated markets. By combining scientific expertise with manufacturing excellence and regulatory compliance, BHL continues to deepen customer relationships, expand its global reach, and reinforce its position as a trusted partner in the global pharmaceutical value chain.

Key business strengths Diverse product portfolio: BHL has built a diversified portfolio of more than 250 products spanning Active Pharmaceutical

Ingredients (APIs), finished dosage formulations, nutraceuticals, and intermediates. This broad offering enables the Company to address multiple therapeutic segments while catering to the evolving requirements of global healthcare markets.

Integrated manufacturing excellence:

The Company operates 20 state of the art manufacturing facilities equipped with advanced technologies and stringent quality systems. This robust manufacturing network ensures operational efficiency, consistent product quality, and the scalability required to meet growing domestic and international demand.

Research driven innovation: A strong focus on research and development enables BHL to continuously enhance its product portfolio, develop complex formulations, optimize manufacturing processes, and accelerate the commercialization of new products. This innovation-led approach strengthens the Companys long term growth prospects.

Global reach: BHL has established a strong international presence, exporting its products to more than 60 countries across regulated and emerging markets. With exports contributing over 30% of revenue, the Company has emerged as a trusted partner for leading global pharmaceutical and generic drug manufacturers.

Strong regulatory and quality credentials: Quality remains central to BHLs operations. The Company adheres to globally accepted manufacturing standards and holds prestigious certifications and approvals, including US FDA, EU GMP KFDA, ISO 9001:2015, and WHO GMP These accreditations reinforce customer confidence and strengthen the Companys competitiveness in regulated markets.

Trusted industry partner: With more than three decades of experience, a strong quality culture, and enduring customer relationships, BHL has earned a reputation as a reliable and trusted pharmaceutical company. Its consistent execution, regulatory expertise, and customer-centric approach continue to strengthen its standing in the global pharmaceutical industry.

Active Pharmaceutical Ingredients (APIs)

BHL is among Indias leading manufacturers of Active Pharmaceutical Ingredients (APIs), supported by state-of-the-art manufacturing facilities accredited by leading international regulatory agencies. APIs remain the cornerstone of the Companys business, contributing over 83% of total revenues, with a significant share utilized for captive consumption.

The Company is also a prominent player in Indias nutraceutical market, manufacturing high-quality products such as Ascorbic Acid IP, Chlorhexidine base, Magnesium-L-Threonate, Sodium Ascorbate, and Ferrous Ascorbate. Backed by a strong global presence, BHL exports APIs to more than 60 countries, supported by an experienced in-house product registration team that facilitates seamless access to regulated and emerging markets.

With a manufacturing capacity of 726 MT per month, the Company is well positioned to address growing customer demand while maintaining operational efficiency. Continuous investments in research and development, a dedicated in-house R&D centre, employee capability building, and strategic acquisitions continue to strengthen BHLs product portfolio and reinforce its long term growth across domestic and international markets.

Finished Dosage Formulations (FDFs)

Since entering the formulations business in 2008, BHL has steadily moved up the pharmaceutical value chain, establishing a strong presence in Finished Dosage Formulations (FDFs). Today, the segment contributes approximately 17% of the Companys total revenues.

The Companys state-of-the-art manufacturing facility is in Vadodara, Gujarat. From an initial installed capacity of 92 Mn units per month, the facility has evolved into a technologically advanced manufacturing hub, integrating automation, robust infrastructure, and rigorous quality systems to ensure reliable and efficient production.

BHL manufactures a comprehensive portfolio of finished dosage formulations, including tablets, caplets, capsules, and oral powders, catering to a diverse global customer base through bulk supplies.

Intermediates

BHL is among the select manufacturers producing critical pharmaceutical intermediates such as Calcium

Phosphoryl Choline Chloride (CPCC) and Chlorhexidine (CH Base). With an annual production capacity of 94 MT, the intermediates business provides the Company with significant economies of scale and cost efficiencies.

Quality and compliance

Quality remains the foundation of BHLs operations and a defining element of its long-term competitiveness. The Companys unwavering commitment to excellence ensures that every product consistently meets stringent international quality and regulatory standards while fostering a safe, compliant, and empowering workplace for its employees.

This commitment is supported by robust quality management systems, a culture of continuous improvement, and regular capability enhancement through structured training programmes. Looking ahead, BHL aims to position quality as a key differentiator by accelerating digitalization initiatives that strengthen quality systems, improve process reliability, and enhance compliance across operations.

Over the years, the Company has significantly strengthened its quality infrastructure through sustained investments in state-of-the-art laboratories equipped with advanced analytical technologies. These investments, spanning modern infrastructure, skilled talent, and cutting- edge laboratory capabilities, underscore BHLs enduring commitment to delivering products of the highest quality while maintaining global regulatory excellence.

Financial overview

Analysis of profit & loss statement

Particulars	FY25	FY26
Revenue from Operations	54,260.24	61,103.14
EBIDTA	10,182.99	11,195.17
PBT	4,600.77	2,892.30
PAT	4,292.88	2,131.04
EPS (Basic)	13.29	4.98
EPS (Diluted)	13.12	4.97

Revenue: Revenue from operations reported a 12.6% growth from H54,260.24 Lakh in FY 2024-25 to H61,10314 Lakh in FY 2025-26. Other income accounted for 1.17% of the Companys revenue from operations, reflecting the Companys focus on its core business operations.

Expenses: Total expenses of the Company increased by 10.0% from H46,01769 Lakh in FY 2024-25 to H50,621.36 Lakh in FY 2025-26. Raw material and direct costs (50.1% of the Companys revenue from operations) decreased 0.3% from H30,710.90 Lakh in 2024-25 to H30,619.95 Lakh in FY 202526. Employee expenses, accounting for 10.3% of revenue from operations, increased by H569.43 Lakh (10.0%) from H5,705.83 Lakh in FY 2024-25 to H6,275.26 Lakh in FY 2025-26.

Profitability: The Companys EBITDA stood at H11,195.17 Lakh in FY 202526 compared to H10,182.99 Lakh in FY 2024-25, registering an increase of 9.9%, primarily reflecting improvement in operating performance. The net profit for the year stood at H2,131.04 Lakh as compared to H4,292.88 Lakh in the previous year, representing a decrease of 50.4%. The decline in PAT was largely attributable to a one-time exceptional loss of H3,324.66 Lakh recognized during the year. The operating profit margin for the year stood at 18.3% compared to 18.8% in the previous year, whereas net profit margin stood at 3.5% in FY 2025-26 as against 7.9% in FY 2024-25.

Analysis of the Balance Sheet

Particulars	FY25	FY26
Equity and Liabilities
Equity share capital	1,579.16	1,683.13
Other equity	45,037.26	51,617.10
Non-current liabilities	9,461.57	7,065.25
Current liabilities	27,226.63	31,956.24
Total	83,304.62	92,321.72
Assets
Non-current assets	34,478.47	35,413.50
Current assets	48,826.15	56,908.22
Total	83,304.62	92,321.72

Sources of funds

The net worth of the Company increased by 14.3% from H46,616.42 Lakh as at 31^st March 2025 to H53,300.23 Lakh as at 31^st March 2026 primarily due to the conversion of equity warrants into equity shares during the year and the profit earned during the year.

The capital employed by the Company stood at H52,13704 Lakh as of 31^st March 2026 as compared to H44,586.54 Lakh as on 31^st March 2025. Long-term debt of the Company decreased by 28.7% to H7,377.95 Lakh as on 31^st March 2026 primarily due to repayment of long-term borrowings during the year. The debt- equity ratio of the Company stood at 0.47 in 2025-26 compared to 0.51 in 2024-25. Finance cost decreased by 20.3% from H2,790.44 Lakh in 2024-25 to H2,223.37 Lakh in FY 2025-26 primarily on account of decrease in levels of cash credit, working capital loans, etc. The interest coverage ratio improved to 3.80 in 2025-26 from 2.65 in the previous year.

Applications of funds

Non-current assets of the Company increased by 2.7% from H34,478.47 Lakh as on 31^st March 2025, to H35,413.50 Lakh as on 31^st March 2026.

Working Capital Management

Current assets of the Company increased by 16.6% from H48,826.15 Lakh as of

31^st March 2025 to H56,908.22 Lakh as of 31^st March 2026. The current and quick ratios of the Company stood at 1.84 and 0.85 respectively in 2025-26 as compared to 1.79 and 0.95 respectively in 2024-25. Trade receivables as of 31^st March 2026 stood at H23,385.38 Lakh, representing 140 days of sales compared with 169 days as of 31^st March 2025. The entire receivables are considered good and secure. Cash and cash equivalents amounted to H3,723.54 Lakh as at 31^st March 2026. The EBITDA margin for FY 2025-26 stood at 18.3% as compared to 18.8% in FY 2024-25.

Risk management

Regulatory and compliance risk	Mitigation
Operating in highly regulated global pharmaceutical markets exposes BHL to evolving regulatory requirements, inspections, and compliance obligations across multiple jurisdictions.	The Company continues to strengthen its quality management systems through rigorous internal audits, robust regulatory affairs capabilities, sustained investments in quality infrastructure and employee training on quality and compliance. Ongoing remediation initiatives and continuous process improvements reinforce compliance and uphold global quality standards.
Market and competition risk	Mitigation
The pharmaceutical generics industry faces persistent pricing pressure, rapid technological advancements, and intense competition, impacting profitability and market share.	BHL mitigates these challenges by diversifying its product portfolio, strengthening backward integration, and focusing on high value and differentiated products. The Company also continues to expand its presence across high growth and regulated markets to enhance long-term competitiveness.
Supply chain and operational risk	Mitigation
Disruptions in the supply chain, raw material availability, or manufacturing operations can affect business continuity and customer commitments.	The Company maintains a diversified supplier base, builds strategic inventories of critical raw materials, and leverages automation and digital technologies to improve operational resilience. Its integrated intermediates manufacturing capabilities further strengthen supply reliability and operational continuity.
Financial risk	Mitigation
Exposure to foreign exchange fluctuations, interest rate volatility, and liquidity risks can impact financial performance and cash flows.	The Company manages these risks through prudent treasury practices, effective hedging strategies, and strong financial controls. Improved revenues and maintains adequate liquidity ratios to ensure low liquidity risk.
Human capital risk	Mitigation
Attracting, developing, and retaining skilled talent remains critical to sustaining innovation, operational excellence, and long-term growth.	BHL continues to invest in employee development through structured learning programmes, leadership development initiatives, and talent retention strategies. Strengthening R&D capabilities and building a robust leadership pipeline ensure the organization remains agile, innovative, and future ready.

Human Capital

At BHL, our people remain the driving force behind our growth and long term success. Their expertise, commitment, and collaborative spirit have enabled the Company to consistently deliver value to customers while navigating an increasingly dynamic business environment.

We are committed to fostering a workplace that prioritizes employee well-being, safety, and professional growth. Through continuous learning opportunities, leadership development, and an inclusive work culture, we empower our people to realize their full potential while contributing meaningfully to the Companys strategic objectives.

The dedication of our workforce has been instrumental in ensuring the uninterrupted delivery of life-saving medicines to patients worldwide. As we continue to grow, we remain focused on providing a safe, healthy, and supportive work environment that enables our employees to thrive and drive sustainable value creation. As on 31^st March 2026, the Company had a workforce of 1,019 personnel.

Employee composition of the Company

Internal Control Systems and Adequacy

A robust internal control mechanism is a prerequisite to ensure that an organization functions ethically, complies with all legal and regulatory requirements, and observes the generally accepted principles of good corporate governance. It extends the overall corporate risk management framework, as well as is an integral part of the accounting and financial reporting process.

BHLs internal control systems are commensurate with the nature of its business and the size and complexity of its operations. The control mechanism provides for well-documented policies/ guidelines, authorizations and approval procedures to ensure the orderly and efficient conduct of its business. This includes adherence to Companys policies, safeguarding of its assets, the prevention and detection of frauds and errors, ensuring the accuracy and completeness of the accounting records and the timely preparation and presentation of reliable financial information. The Company believes that its experienced and qualified employees play a key role in fostering an environment in which controls, assurance, accountability and ethical behaviour are accorded high importance.

Cautionary Statements

The Management of BHL India Limited has prepared and is responsible for the financial statements that appear in this report. These statements conform to the accounting principles accepted in India and include amounts based on informed judgments and estimates.

BHL projections, estimates, and expectations described in this report should be interpreted as forward-looking statements that can be impacted by various internal and external risks.

Risks associated with market, strategy, technology, operations and stakeholders can significantly affect the business and the actual results may differ substantially or materially from those expressed or implied.