Bajaj Healthcare Ltd Management Discussions

Global economic growth

The global economy started 2024 with the confidence that inflation was largely beaten and that major economies would likely avoid recession. But as the year drew to a close, a nagging worry crept in: inflation proved to be much stickier than wed hoped. While the US economy powered ahead, many other developed nations struggled to keep pace. On top of that, many countries saw their currencies lose value, a situation that could become especially tricky for developing economies.

Stepping in 2025, the global economic activity is expected to maintain modest momentum in 2025 owing to the likely shift in policy following numerous elections around the world. New policies could lead to new trajectories for inflation, borrowing costs, and currency values, as well as trade flows, capital flows, and costs of production. According to the IMF, the global economy is expected to grow at 3.3% both in 2025 and 2026, primarily on account of an upward revision in the United States offsetting downward revisions in other major economies. Global headline inflation is expected to decline to 4.2% in 2025 and to 3.5% in 2026, converging back to target earlier in advanced economies than in emerging market and developing economies.

Global inflation is projected to ease from 4.5% in 2024 to 3.5% in 2025, though still above pre-pandemic levels. Advanced economies are expected to manage inflation more effectively than emerging markets, but factors like wage pressures, protectionism, and geopolitical tensions could create uneven outcomes.

The U.S. economy remains strong, with 2025 growth revised upward to 2.7% due to resilient consumer demand, a robust job market, and favorable financial conditions. Growth is expected to moderate by2026. In contrast, the euro area faces slower recovery, with 2025 growth revised down to 1.0% amid geopolitical tensions and weak manufacturing, though it may rise to 1.4% by 2026 as conditions improve.

Emerging markets are expected to maintain stable growth. Chinas 2025 outlook is slightly upgraded to 4.6% due to fiscal support, while India is set to grow steadily at 6.5% through 2025 and 2026, in line with long-term trends.

Regional prospects vary: the Middle East and Central Asia face tempered growth due to oil production cuts, Latin America will see modest improvement, sub-Saharan Africa is set for stronger growth, and emerging Europe may experience a slowdown.

Outlook

According to the IMF, factoring in recent market trends and the impact of rising trade policy uncertainty, the uncertainty surrounding the global economy is expected to persist throughout 2025. However, potential policy changes are still being discussed.

In 2025, energy commodity prices are expected to decline by 2.6%, largely due to weaker oil demand from China and increased supply from non-OPEC+ countries (which includes Russia), though rising gas prices - caused by colder weather, supply disruptions, and ongoing conflicts in the Middle East - partly offset the decline. Meanwhile, non-fuel commodity prices are projected to rise by 2.5%, mainly driven by higher food and beverage costs due to adverse weather affecting major producers. On the monetary front, major central banks are expected to continue lowering interest rates, though at different speeds, depending on their respective economic growth and inflation outlooks. Fiscal policies in advanced economies, including the U.S., are expected to tighten in 2025-26, with a lesser degree of tightening in emerging and developing markets.

Indian economy overview

Even in FY25, the Indian economy continued to emerge as of the fastest growing economies in the world, but at a sluggish pace compared to the previous years. Slower growth in the first half of the fiscal (6%) led the RBI to bring down the annual projection to 6.6% (down from an earlier projection of 7%). However, according to the first advance estimates, Indias real GDP is expected to grow at 6.4% in FY25.

Some of the key factors which helped drive the growth of the Indian economy include, rural consumption has remained robust, supported by strong agricultural performance, while the services sector continues to be a key driver of growth. Manufacturing exports, particularly in high-value-added components (such as electronics, semiconductors, and pharmaceuticals), have displayed strength, underscoring Indias growing role in global value chains.

Indias current account deficit (CAD) stood at $11.5 billion (1.1% of GDP) in Q3 FY25, unchanged as a percentage of GDP but down from $16.7 billion in Q2. A surplus of $4-6 billion is expected in Q4, supported by stronger exports and services. For FY25, CAD is projected at around 0.8% of GDP. Foreign exchange reserves reached a five-month high of $676.3 billion as of April 4, 2025, making India the fourth-largest holder globally. This growth highlights the countrys economic resilience and provides a strong buffer against global volatility.

Indias real GVA is projected to grow by 6.4% in FY25, driven by agriculture (3.8%), industry (6.2%), and services (7.2%). However, manufacturing exports remain under pressure due to weak global demand and protectionist trade policies.

The IMF revised Indias GDP growth forecast for FY25 to 6.5% (down 0.5 pp), citing a sharp 12.3% contraction in government capex, which has slowed investment growth. Still, net exports are expected to contribute positively due to lower crude prices. Net direct tax collections grew 13.57% to 22.26 lakh crore in FY25, surpassing budget estimates and maintaining strong tax buoyancy at 1.57, reflecting sustained economic momentum.

Indian MSME sector

The MSME sector is a backbone of Indias economy, driving manufacturing, exports, and employment, particularly in semiurban and rural regions. With 5.93 crore registered units employing over 25 crore people, MSMEs contribute nearly half of Indias exports and play a pivotal role in fostering innovation and inclusive growth. Exports from MSMEs have risen sharply, from 3.95 lakh crore in 2020-21 to 12.39 lakh crore in 2024-25, while the number of exporting units has more than tripled to 1.73 lakh in the same period. Their growing share in Indias exports, now at 45.79%, highlights their increasing global integration and the governments focus on enhancing competitiveness, innovation, and resource access to strengthen their role as engines of economic progress.

Key Budget takeaways for the Indian MSME Sector

The government has introduced several measures to boost MSMEs and startups. Classification thresholds have been revised upward (investment by 2.5x and turnover by 2x) to widen growth opportunities. Credit support has been enhanced with guarantee cover doubled, 10 crore for MSMEs and 20 crore for startups, unlocking 1.5 lakh crore in additional credit, alongside reduced fees in priority sectors. A new Credit Card facility will extend 5 lakh credit to micro enterprises, with 10 lakh cards to be issued in the first year.

Startups and first-time entrepreneurs will benefit from a proposed 10,000 crore Fund of Funds and targeted term loans of up to 2 crore for 5 lakh women, SC, and ST entrepreneurs, fostering inclusivity and innovation. Sector-specific initiatives include support for footwear, leather, toys, and food processing, expected to generate jobs, boost turnover, and establish India as a global hub.

Additionally, a National Manufacturing Mission under Make in India will provide policy roadmaps, with a strong push for clean tech manufacturing in solar PV cells, EV batteries, wind turbines, and high-voltage transmission equipment.

Export scenario

Despite the prevailing geopolitical tensions, the Indian goods and services exports is expected to cross $800 billion by the end of the current fiscal, signalling a robust economy and continued growth across sectors. This would be higher than the earlier record of $776.68 billion in the overall exports in FY24.

As demand for Indian products in the global market surges across categories, the countrys total exports reached about $778 billion in FY 2023-24, compared to $466 billion in FY 2013-14 - a whopping 67% growth. In 2023-24, merchandise exports stood at USD 437.10 billion, while services exports contributed USD 341.11 billion, demonstrating a well-balanced expansion. Key sectors like electronics, pharmaceuticals, engineering goods, iron ore, and textiles played a vital role in this surge. Strengthened by strategic policy measures, enhanced competitiveness, and broader market access, Indias export ecosystem is now more resilient and deeply integrated into the global economy.

The momentum has continued into FY 2024-25, with cumulative exports during April-December 2024 estimated at USD 602.64 billion, a 6.03% increase from USD 568.36 billion in the same period of 2023. Strengthened by strategic policy measures, enhanced competitiveness, and broader market access, Indias export ecosystem is now more resilient and deeply integrated into the global economy.

Outlook

Looking ahead, India is expected to maintain its potential real GDP growth of 6.5% YoY from FY26 to FY28, positioning itself as the worlds third-largest consumer market by 2026 and the third- largest economy by 2027, trailing only the United States and China. The countrys nominal GDP is projected to rise from USD 4 trillion in FY25E to over USD 6 trillion by FY30*.

Indias growth momentum is expected to be driven by a resilient manufacturing sector, stable inflation levels, supportive tax policies, and robust urban consumption. Ongoing infrastructure development and structural economic reforms further strengthen the countrys capacity to weather global uncertainties. However, key challenges remain, including the need to generate meaningful employment for a growing workforce, navigate a more challenging global trade landscape, and manage the implications of automation on jobs.

[*Expected]

Global pharmaceutical industry

The global pharmaceutical market is on track to touch $2.3 trillion by 2028, growing steadily at a CAGR of 5 - 8%. This momentum is being shaped by an aging population, the rising burden of chronic diseases, and continued investments in breakthrough therapies. Among the most dynamic growth areas are GLP-1 treatments for diabetes and obesity, alongside advances in oncology and immunology, which are redefining the therapeutic landscape.

Specialty medicines now account for over half of global drug spending in 2024, reflecting their increasing role in addressing complex health needs. At the same time, the industry is being transformed by digital health, AI-enabled drug discovery, and telemedicine, which are opening new frontiers in care delivery. Yet, even as innovation accelerates, the challenges of affordability, accessibility, and regulatory oversight remain at the forefront of global healthcare discussions.

Further, the growth of the global pharma industry is expected to be driven by remarkable progress in biologics, personalized medicine, and RNAi-based therapies, which are transforming treatment outcomes and redefining standards of care. Supportive regulatory frameworks, coupled with a rising demand for patient-centric solutions, are further accelerating this momentum. At the same time, innovations in drug delivery technologies and broader access to healthcare in emerging economies are opening new avenues for expansion.

A key force behind this growth is the industrys unwavering commitment to research and development. Substantial R&D investments continue to fuel the discovery of breakthrough therapies in critical areas such as oncology, immunology, and rare diseases. These advancements are not only enhancing competitiveness but also reshaping patient care worldwide. As both healthcare providers and patients increasingly recognize the value of modern medicines, the demand for innovative therapies that deliver superior outcomes with fewer side effects continues to rise, cementing the pharmaceutical sectors role as a driver of global health progress.

Regional outlook

United States: On a net price basis, U.S. pharmaceutical spending is expected to grow at a more moderate pace of 2-6% CAGR over the next five years, compared to 5.3% CAGR in the previous five years. This slowdown is largely driven by upcoming price negotiations and cost-containment initiatives under the Inflation Reduction Act.

Europe: Europes healthcare and pharmaceutical spending is projected to rise by nearly $70 billion by 2028, fuelled largely by the continued introduction of innovative branded therapies. Yet, this momentum will be tempered by the growing adoption of generics and biosimilars, particularly in markets where stringent cost-control measures are in place.

Japan: Growth in Japan is projected to remain modest, with spending expected to fluctuate between -1% and 2% CAGR through 2028. Although the adoption of new brands is steadily increasing, these gains are likely to be offset by recurring annual price reductions and the sustained shift toward generics.

China: Pharmaceutical spending in China is expected to moderate further. While innovative new therapies are adding positive momentum, this growth is being tempered by continued pricing pressures on off-patent and generic drugs, especially under the governments centralised procurement policies.

Latin America: After the surge in demand during the pandemic, growth in Latin America moderated in 2024. However, the outlook remains promising, with the industry projected to rebound at a healthy 7-10% CAGR through 2028. This recovery will be fuelled largely by Brazil, Mexico, Argentina, and Colombia, where rising access to healthcare and strong demand for affordable generic medicines are set to drive momentum.

Key factors to drive growth of the Global pharma industry

Chronic conditions: The growing incidence of chronic conditions like cancer and diabetes is placing more people in need of care within the healthcare system.

Further, the growth of the global pharma industry is expected to be driven by remarkable progress in biologics, personalized medicine, and RNAi-based therapies, which are transforming treatment outcomes and redefining standards of care. Supportive regulatory frameworks, coupled with a rising demand for patient-centric solutions, are further accelerating this momentum. At the same time, innovations in drug delivery technologies and broader access to healthcare in emerging economies are opening new avenues for expansion.

A key force behind this growth is the industrys unwavering commitment to research and development. Substantial R&D investments continue to fuel the discovery of breakthrough therapies in critical areas such as oncology, immunology, and rare diseases. These advancements are not only enhancing competitiveness but also reshaping patient care worldwide. As both healthcare providers and patients increasingly recognize the value of modern medicines, the demand for innovative therapies that deliver superior outcomes with fewer side effects continues to rise, cementing the pharmaceutical sectors role as a driver of global health progress.

Regional outlook

United States: On a net price basis, U.S. pharmaceutical spending is expected to grow at a more moderate pace of 2-6% CAGR over the next five years, compared to 5.3% CAGR in the previous five years. This slowdown is largely driven by upcoming price negotiations and cost-containment initiatives under the Inflation Reduction Act.

Europe: Europes healthcare and pharmaceutical spending is projected to rise by nearly $70 billion by 2028, fuelled largely by the continued introduction of innovative branded therapies. Yet, this momentum will be tempered by the growing adoption of generics and biosimilars, particularly in markets where stringent cost-control measures are in place.

Japan: Growth in Japan is projected to remain modest, with spending expected to fluctuate between -1% and 2% CAGR through 2028. Although the adoption of new brands is steadily increasing, these gains are likely to be offset by recurring annual price reductions and the sustained shift toward generics.

China: Pharmaceutical spending in China is expected to moderate further. While innovative new therapies are adding positive momentum, this growth is being tempered by continued pricing pressures on off-patent and generic drugs, especially under the governments centralised procurement policies.

Latin America: After the surge in demand during the pandemic, growth in Latin America moderated in 2024. However, the outlook remains promising, with the industry projected to rebound at a healthy 7-10% CAGR through 2028. This recovery will be fuelled largely by Brazil, Mexico, Argentina, and Colombia, where rising access to healthcare and strong demand for affordable generic medicines are set to drive momentum.

Key factors to drive growth of the Global pharma industry

Chronic conditions: The growing incidence of chronic conditions like cancer and diabetes is placing more people in need of care within the healthcare system.

Ageing population: Almost four out of five adults over the age of 65 live with at least one chronic health condition. As the worlds population continues to age, age-related illnesses, such as rheumatoid arthritis, cardiovascular diseases, and other disorders, are becoming increasingly common. Rising life expectancy reflects this shift: from an average of 70 years in 2008, it climbed to 72 years by 2022 and is projected to keep improving in the years ahead. According to the World Health Organization, the number of people aged 60 and above is expected to more than double, reaching 2.1 billion by 2050, underscoring the profound impact of global ageing on healthcare and society.

Rapid urbanisation: This trend is also fuelling growth in pharmaceutical markets. Today, more than half of the worlds population, around 56%, lives in cities, and by 2050 this figure is projected to rise to nearly 70%. Urban living brings with it greater access to reliable infrastructure, timely medical care, and essential medicines, making cities the focal point of healthcare demand and delivery.

Consumer healthcare: This fast-growing segment is gaining strong momentum, fuelled by innovative marketing efforts that are boosting consumer awareness and accessibility. The result has been a surge in demand for over-the-counter medicines, particularly everyday essentials such as cough and cold remedies, pain relievers, and nutritional supplements.

Specialty pharmaceuticals: With a strong focus on advanced treatments such as biologics and oncology therapies, these high-value segments are poised for accelerated growth in the decade ahead.

Novel drug therapies: The growing adoption of new therapies for chronic diseases, along with the rising demand for GLP-1 obesity drugs, particularly in developed markets, is set to accelerate prescription drug sales in the near future. As innovation reshapes the pharmaceutical landscape, the next decade is likely to witness a significant shift, with many traditional chemotherapies giving way to advanced treatments such as antibody-drug conjugates. These breakthrough technologies are designed to deliver cancer-fighting agents directly into tumour cells, minimising harm to healthy tissue and offering patients safer, more effective care.

Emerging markets: Developed markets remain the key drivers of growth in the global pharmaceutical industry. At the same time, emerging regions are opening up new possibilities, driven by the limited access to medicines and modern healthcare technologies. These regions represent vast untapped potential for expanding reach and impact.

E-commerce and online pharmacies: By making medicines and healthcare services just a click away, e-commerce and online pharmacies are transforming access with seamless digital prescription management and swift doorstep delivery. The global online pharmacy market has seen steady momentum, expanding from USD 65.83 billion in 2024 to USD 75.26 billion in 2025. With growing digital adoption and rising consumer trust in e-health solutions, the sector is projected to sustain this pace, advancing at a CAGR of 13.79% to nearly USD 143 billion by 2030.

Key areas of global medicine spending

By 2028, biotech medicines are projected to represent nearly 40% of global healthcare spending. This growth will be fuelled by both breakthrough modalities, such as cell and gene therapies, and the expanding biosimilar market, which is making high-cost biologics more accessible. Key areas driving this momentum include advances in oncology, immunology, diabetes, and obesity treatments, complemented by a robust and promising pipeline in neurology.

Specialty medicines, often complex and high-cost therapies designed for chronic, rare, or severe conditions, are projected to account for 43% of global pharmaceutical spending by 2028, with developed markets driving the majority of this outlay. These advanced treatments are increasingly redefining care standards, particularly in oncology, immunology, and rare diseases, shaping the future of modern healthcare.

By 2028, global spending on pharmaceuticals is expected to be shaped by a few key therapeutic areas:

Oncology is set to remain the fastest-growing segment, expanding at a 14 - 17% CAGR, fuelled by the steady pipeline of novel targeted therapies and breakthroughs in immuno-oncology.

Immunology is projected to grow at a 2 - 5% CAGR, with biosimilar adoption easing the pace of spending growth, even as new treatments continue to enter the market.

Diabetes is anticipated to become the third-largest therapy area worldwide, with spending projected to reach USD 184 billion by 2028. Growth at 3 - 6% CAGR will be supported by both established therapies and the rising use of innovative GLP-1-based treatments.

Cardiovascular and Neurology are also poised for steady expansion, underpinned by advancements in heart failure and stroke prevention, along with emerging therapies for migraine, depression, and rare neurological disorders.

Obesity treatment has rapidly risen to the forefront of global healthcare priorities. Spending in this area surged to $24 billion in 2023, a sharp increase from just $3.2 billion in 2020, driven largely by the widespread adoption of GLP-1 receptor agonists. While these drugs were originally designed for diabetes management, their proven effectiveness in promoting significant weight loss has made them a breakthrough alternative to surgical interventions. Their clinical success has not only transformed treatment approaches but also sparked a wave of obesity-focused trials, paving the way for sustained investment and innovation in metabolic health.

Latest trends transforming the market

Since the pandemic, the pharmaceutical industry has been undergoing a profound transformation, driven by automation, digitalisation, and a renewed commitment to R&D. The integration of artificial intelligence (AI) is reshaping the sector, particularly in areas like clinical trials and drug development, where Al-powered tools are revolutionising processes, enhancing speed, accuracy, and efficiency.

The rise of decentralised clinical trials and advanced automation is accelerating the discovery of novel drugs and therapies, while digital technologies are becoming indispensable in drug development and precision medicine. AI, supported by machine learning, deep learning, and neural networks, is redefining how drugs are designed, targets are identified, and clinical outcomes are predicted. It is helping researchers uncover new therapeutic pathways, refine chemical structures, and even predict complex protein formations. Generative AI is pushing these boundaries further, enabling the rapid design and re-engineering of medicinal molecules to address both widespread health challenges and rare diseases.

The adoption of digital technologies in healthcare has accelerated significantly in the post-pandemic era, transforming how care is accessed, delivered, and managed. Telemedicine, e-prescriptions, and remote monitoring have become integral to patient care, while health data platforms and electronic health records are strengthening continuity and coordination across the healthcare ecosystem. In India, the Ayushman Bharat Digital Mission is building a unified national digital health framework that supports universal health coverage through interoperable health records, digital IDs, and robust e-health infrastructure. Globally, digital health ecosystems are driving the shift towards value-based procurement, predictive analytics, and personalised care pathways, enabling better patient outcomes and greater cost efficiency.

Pharma 4.0, the next leap from Industry 4.0, is revolutionising pharmaceutical manufacturing through AI, IoT, data analytics, and cyber-physical systems. Built on four pillars, Resources, Information Systems, Organisation & Processes, and Culture, it enables real-time monitoring, predictive maintenance, smarter decision-making, and automated production with stronger compliance. With AR, VR, ML, cloud computing, and IIoT driving efficiency and connectivity, Pharma 4.0 is paving the way for a smarter, more resilient, and self- optimising pharmaceutical ecosystem.

Global API market overview

Active Pharmaceutical Ingredients (APIs) form the backbone of the pharmaceutical value chain. Driven by rising global demand for medicines and continuous advancements in process innovation, the global API market touched nearly USD 255 billion in 2024. This growth reflects not only higher production volumes but also improved operational efficiency. Breakthroughs in synthetic methodologies have further streamlined processes, helping manufacturers meet stringent regulatory standards while simultaneously reducing production costs.

The API industry witnessed strong growth in both volume and value, and is projected to expand at a CAGR of nearly 6% between 2025 and 2030. In 2024, the synthetic API segment dominated the market with over 70% revenue share, fuelled largely by the consistent global demand for affordable generic medicines.

Factors to drive growth of the API industry

Growing number of patent expiries: The upcoming 2030 patent cliff is set to unlock significant opportunities for generic formulations and innovative reformulations. With close to 200 originator molecules losing exclusivity, the industry is witnessing a surge in both investment and demand for APIs. This shift is particularly pronounced in oncology, where more than 60 high-value molecules are expected to come under generic competition, paving the way for wider accessibility and new growth avenues.

Growing focus on outsourcing: The pharmaceutical industry is increasingly turning to Contract Development and Manufacturing Organisations (CDMOs) for API production, enabling companies to concentrate on their core strengths. Today, outsourced APIs already represent about half of global API demand, and this share is poised to expand further. Between 2023 and 2030, outsourced production is projected to grow at a robust 7% CAGR, outpacing the 4% growth expected from captive, in-house production.

Indian pharma industry

The Indian pharmaceutical industry stands as a global powerhouse, ranked third in the world by volume, eleventh in terms of medicine spending, and fourteenth by overall value. Renowned as the worlds largest supplier of generic medicines, India has earned recognition for delivering affordable, high-quality pharmaceuticals that meet global healthcare needs. The country also leads in USFDA-approved pharmaceutical manufacturing facilities, the highest anywhere in the world. These facilities span a wide spectrum of offerings, from generic drugs and OTC medications to APIs, vaccines, biosimilars, biologics, and contract research and manufacturing services (CRAMS), making India a critical link in the global healthcare supply chain.

The Indian pharmaceutical market is projected to reach USD 130 billion by 2030 and further expand to USD 450 billion by 2047. This remarkable growth will be fuelled by factors such as greater affordability and accessibility of medicines, rising lifestyle-related health challenges, cost-efficient manufacturing strengths, and enabling government policies. Additionally, medicine spending in India is expected to grow at a CAGR of 7-10% through 2028, supported by an ageing population, wider healthcare access, and an increasing prevalence of chronic conditions. Together, these trends reinforce Indias position as not only a hub for pharmaceutical manufacturing but also as a driver of global healthcare transformation.

M Indian Pharmaceutical Market (in USD billion)

Indias pharmaceutical industry is steadily strengthening its position as a global leader, particularly in the fields of generic medicines and API production. What sets India apart is its ability to provide comprehensive, end-to-end solutions, combining scale, expertise, and cost efficiency, to meet the needs of international clients. In FY 2024-25, the sector recorded robust growth, fuelled by Indias cost-competitive manufacturing, expanding R&D capabilities, and supportive government policies that continue to reinforce its global standing.

Indias pharmaceutical sector continues to demonstrate strong momentum, with the domestic market recording steady growth and rising exports significantly boosting overall industry revenues.

As per the Department of Pharmaceuticals (DoP), the Indian Pharmaceutical Market (IPM) touched Rs. 4,17,345 crore (over US$50 billion) in FY2024, reflecting a healthy growth rate of over 10% during the past five years. Looking ahead, the domestic market is expected to more than double, reaching US$130 billion by 2030, which would enhance Indias global share from the present 3% to nearly 5%. By 2047, the industry is projected to advance further, nearing a remarkable US$450 billion, underscoring Indias growing stature as a global pharmaceutical powerhouse.

Growing pharma exports from India

In FY2025, Indias pharmaceutical exports touched ~US$30 billion, reflecting a growth of over 9% compared to the previous years ~US$27 billion. These exports play a vital role in global healthcare, meeting nearly 40% of the generic drug demand in the US and supplying around 25% of prescriptions in the UK, a testament to Indias position as a leading global manufacturing hub.

Indian generics today account for 20% of the worlds supply by volume, making them an indispensable lifeline for affordable healthcare worldwide. A significant contributor to this leadership is the export of Active Pharmaceutical Ingredients (APIs), which form the backbone of vertical integration across the industry. Indias API exports, currently valued at nearly US$5 billion (2023), are expected to more than double to US$12 billion by 2030, growing at a CAGR of 14%. Looking further ahead, API exports are projected to surge to US$80-90 billion between 2030 and 2047, expanding at a 12% CAGR, and placing India on track to match Chinas scale of penetration by 2047.

Today, the Indian pharmaceutical industry stands as a well- established and vibrant domestic sector, home to around 3,000 drug companies and over 10,000 custom manufacturing units. 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. Complementing this industrial strength, India is also supported by a robust network of pharmaceutical research and educational institutions, fostering innovation and expertise across the sector.

Key policy initiatives

To boost domestic pharmaceutical production and strengthen Indias healthcare ecosystem, the Government has introduced a series of forward-looking policy measures. These initiatives focus on making healthcare more affordable, accessible, and innovative, while gradually reducing reliance on imports.

Key steps include:

Centres of Excellence to drive pharmaceutical research and foster innovation.

Regulation of essential drug prices to ensure medicines remain within reach for all.

Expansion of the Jan Aushadhi scheme to around 25,000 outlets, providing cost-effective medicines to millions.

Launch of umbrella schemes designed to support the overall growth of the pharmaceutical sector.

These measures build on earlier programs such as the Production Linked Incentive (PLI) schemes (PLI 1.0 and 2.0) and the Bulk Drug Parks initiative, creating a cohesive strategy. Together, they aim to position India as a self-reliant, globally competitive hub for pharmaceutical manufacturing.

Key growth drivers of the Indian pharmaceutical industry

Improving average lifespan: Rising life expectancy, from 69.3 years in FY2019 to 70.6 years in FY2024, reflects a healthier, longer- living population. This shift is not just a societal milestone; it is also shaping the healthcare landscape, driving increased demand for pharmaceutical products and services that support wellbeing across every stage of life.

Ageing population and changing health trends in India:

Indias demographic profile is gradually shifting towards an older population, bringing new health challenges to the forefront. Chronic ailments have become increasingly common among the elderly, with over 30% of older women and 28% of older men living with at least one chronic condition. Moreover, nearly one in four seniors faces the burden of multiple health issues, highlighting the growing need for targeted healthcare solutions and support systems.

Growing instances of chronic diseases: Rapid urbanisation, increasing health awareness, and wider access to medical services have contributed to a rise in chronic diseases across India. In 2021, cardiovascular diseases accounted for 28% of all deaths in the country. Meanwhile, a recent study shows that around 101 million people, approximately 11.4% of Indias population, are living with diabetes, underscoring the urgent need for proactive healthcare solutions.

Rising instances of lifestyle diseases: Unhealthy eating patterns and rising stress are contributing to the earlier onset of various health issues. Meanwhile, hectic daily routines often leave little room for regular exercise, making it harder to maintain overall wellbeing.

Growing penetration of health insurance in India: Health insurance in India is witnessing remarkable growth, with coverage expanding from 288 million people in FY2015 to around 550 million in FY2023. Despite this progress, penetration remains modest at 39% in FY2023, highlighting significant room for expansion. Rising awareness about healthcare, coupled with government-backed initiatives, is driving this growth. As a result, health insurance penetration in India is projected to reach approximately 46% by FY2025, reflecting a steadily strengthening sector.

Rising penetration of e-commerce in India: The e-commerce boom in India has significantly fuelled the growth of online pharmacies. Their market size has surged from 3,800 crore in 2019 to 6,000 crore in 2023 and is projected to quadruple to 24,000 crore by 2030. At present, these platforms primarily serve metro and tier-1 cities, leaving a vast opportunity to expand access and reach customers in rural and underserved regions.

Outlook

The Indian pharmaceutical industry is set for strong growth, driven by upcoming patent expiries of high-revenue drugs, enabling Indian firms to offer affordable alternatives. Between 2023 and 2029, patents for 100+ critical drugs, covering cancer, diabetes, cardiovascular, and autoimmune treatments, will lapse, representing over US$300 billion in global sales.

Company overview

Bajaj Healthcare Limited (BHL), founded in 1993, is a pioneering Indian pharmaceutical company committed to making quality healthcare accessible worldwide. Over the years, BHL has grown remarkably, building a diverse portfolio of more than 250 products, spanning both Active Pharmaceutical Ingredients (APIs) and Finished Dosage Formulations. Recognized for its innovative manufacturing processes and operational excellence, BHL has earned a strong reputation as a reliable bulk manufacturer of APIs and formulations.

Operating through fifteen state-of-the-art manufacturing facilities and supported by robust research and development capabilities, BHL serves markets in over 60 countries. This global reach has positioned the company as a trusted partner for leading pharmaceutical brands and generics companies, with exports contributing over 24% to its revenue.

In recent years, BHL has embraced a value-driven growth strategy, emphasizing research and development to strengthen its presence across APIs, formulations, nutraceuticals, and intermediates. The companys unwavering focus on quality is reflected in its extensive accreditations, including US FDA, EU-GMP, KFDA, ISO 9001:2015, and WHO-GMP, which reinforce its competitive advantage in regulated markets. Complementing this, BHL has expanded its international footprint by developing and launching a range of generic products of varying complexities, showcasing agility and responsiveness in bringing new offerings to the market.

Key business strengths

Diverse product portfolio: BHL offers a wide range of over 100 products, including APIs, Finished Dosage Formulations, nutraceuticals, and intermediates, catering to multiple therapeutic segments.	Strong manufacturing capabilities: With 15 state- of-the-art manufacturing facilities, BHL ensures high-quality production, operational efficiency, and scalability to meet global	Robust research & development (R&D): The Companys strong R&D focus enables innovation, development of complex formulations, and rapid introduction of new products, supporting longterm growth. J	Global presence & export competency: BHL exports its product to over 60 countries, with exports contributing more than 22% of revenue, making it a preferred partner for international pharmaceutical brands and generics companies.
Regulatory compliance & quality assurance: BHLs multiple accreditations, such as US FDA, EU-GMP, KFDA, ISO 9001:2015, and WHO- GMP, demonstrate its commitment to quality and give it a competitive edge in regulated markets	Innovation & process excellence: Renowned for innovative manufacturing processes and streamlined operations, BHL maintains high efficiency, cost- effectiveness, and reliability ""	Agility in product launches: BHL has demonstrated the ability to quickly develop and launch generic products of varying complexities, adapting efficiently to "	Strong brand reputation: Years of consistent performance, quality focus, and global partnerships have established BHL as a trusted and respected "

Business overview Value chain

API & Intermediates	824 MT Per month Installed capacity
Finished dosage formulations (FDF)	100 million pieces per month Installed capacity

Segment I

Active Pharmaceutical Ingredients (APIs)

BHL stands as one of the leading API manufacturers in India, operating state-of-the-art facilities accredited by international regulatory agencies. APIs form the backbone of the Companys business, accounting for over 83% of total revenue, with a significant portion serving captive consumption. In addition, BHL is a key player in the domestic nutraceuticals market, producing high- quality Ascorbic Acid IP, Sodium Ascorbate, and Ferrous Ascorbate.

With a strong global footprint, the company exports APIs to over 60 countries and is supported by a robust in-house product registration team. Its manufacturing capacity of 726 MT per month underpins its ability to meet growing demand efficiently. Committed to innovation and sustainable growth, BHL actively invests in research and development, including a dedicated inhouse R&D centre, comprehensive training programs, and strategic acquisitions, strengthening its product portfolio and ensuring continued success in both domestic and international markets.

Segment II

Finished Dosage Formulations (FDFs)

Since venturing into the formulations business in 2008, BHL has positioned itself at the premium end of the pharmaceutical value chain, leveraging a state-of-the-art formulation manufacturing facility compliant with USFDA, TGA (Australia), and MHRA (UK) standards. The journey began with an installed capacity of 92 million pieces per month, and today, finished dosage formulations (FDF) contribute 17% of the Companys total revenues.

Situated in Vadodara, Gujarat, BHLs FDF facility combines advanced automation, robust infrastructure, and stringent quality systems, ensuring efficient and reliable production. The Company proudly manufactures a wide spectrum of FDFs, including tablets, caplets, capsules, and oral powders, all available in bulk to meet diverse customer needs.

Segment III Intermediates

BHL distinguishes itself as one of the few manufacturers specializing in key intermediates such as Calcium Phosphoryl Choline Chloride (CPCC) and Chlorhexidine (CH Base). With an annual intermediate production capacity of 94 MT, the company has established a strong, sustainable edge, driving both economies of scale and cost efficiency. Beyond supporting BHLs API manufacturing, this intermediates business plays a critical role by being exclusively integrated into its Finished Dosage Form (FDF) operations, reinforcing the companys end-to-end value chain.

Quality and compliance

At BHL, quality is at the heart of everything we do. Our steadfast commitment to excellence not only ensures that our products meet the most stringent international standards but also cultivates a safe, thriving workplace where our employees can flourish. This success is rooted in the careful implementation of robust quality systems, nurturing a culture of excellence, and providing ongoing training to our dedicated teams. Looking forward, we aim to make product quality a key differentiator, which is why we continue to invest in digitalization initiatives that enhance our core quality systems.

Over the years, our journey to strengthen the quality function has seen remarkable milestones. Strategic investments in state-of- the-art laboratories have equipped us with advanced analytical capabilities and technologies. These sustainable enhancements, spanning infrastructure, skilled workforce, and cutting-edge laboratory instruments, reflect our enduring commitment to delivering the highest standards of quality at every step.

Financial overview

Analysis of profit & loss statement

(Rs. in lakhs)

Particulars	FY24	FY25
Revenue from Operations	47,341.79	54,260.24
EBIDTA	8,495.19	10,182.99
PBT	(1,667.55)	4,600.77
PAT	(1,432.66)	4,292.88
EPS (Basic)	(30.36)	13.29
EPS (Diluted)	(30.36)	13.12

Analysis of the profit and loss statement

Revenue: Revenue from operations reported a 14.6% growth from 47,341.79 lakhs in 2023-24 to reach 54,260.24 lakhs in 2024-25. Other income of the Company accounted for only 1.83% share of the Companys revenues, reflecting the Companys focus on its core business operations..

Expenses: Total expenses of the Company increased by 15.9% from 39,715.23 lakhs in 2023-24 to 46,017.69 lakhs in FY25. Raw material and direct costs (56.6% of the Companys revenue from operations) increased 16.1% from 26,442.76 lakhs in 2023-24 to 30,710.90 lakhs in 2024-25. Employee expenses, accounting for 10.5% share of revenues, increased by 1,321.29 lakhs (30.1%) from 4,384.54 lakhs in 2023-24 to 5,705.83 lakhs in 2024-25.

Profitability: Companys EBITDA stood at 10,182.99 lakhs in 202425 compared to 8,495.19 lakhs in 2023-24. Net profit for the year stood at 4,292.88 lakhs compared to net loss of 1,432.66 lakhs in the previous year. PAT increased by 361.4% during the year largely owing to enhanced operational efficiency. The previous financial years performance was adversely impacted by one of write-off. Operating profit margin for the year stood at 18.1% compared to 17.6% in the previous year, whereas net profit margin stood at 7.0% in 2024-25 as against (17.4%) in 2023-24.

Analysis of the Balance Sheet

Summary of Balance Sheet

Particulars	FY24	FY25
Equity and liabilities
Equity share capital	1,379.92	1,579.16
Other equity	26,456.17	45,037.26
Non-current liabilities	8,465.87	9,461.57
Current liabilities	40,210.81	27,226.63
Total	76,512.77	83,304.62
Assets
Non-current assets	36,058.51	34,764.32
Current assets	40,454.26	48,540.30
Total	76,512.77	83,304.62

Sources of funds

The net worth of the Company increased by 67.5% from Rs.27,836.09 lakhs as on 31^st March 2024 to Rs.46,616.42 lakhs as on 31^st March 2025 owing to share infusion by infusing share capital and share warrants and profit for the current year.

The capital employed by the Company stood at Rs.44,856.54 lakhs as of March 31, 2025 as compared to Rs.25,469.10 lakhs as on March 31, 2024. Long-term debt of the Company increased by 67.6% to Rs.6,466.5 lakhs as on March 31,2025 owing to the availing of a term loan facility amounting to Rs.4,500.00 lakhs. The long-term debt- equity ratio of the Company stood at 0.48 in 2024-25 compared to 1.20 in 2023-24. Finance cost decreased by 6.0% from Rs.2,967.98 lakhs in 2023-24 to Rs.2,790.44 lakhs in 2024-25 primarily on account of decrease in levels of cash credits, working capital loans, etc. The interest coverage ratio in 2024-25 stood at 1.93 compared to 2.65 in the previous year.

Applications of funds

Non-current assets of the Company decreased by 3.6% from Rs.36,058.51 lakhs as on March 31, 2024 to Rs.34,764.32 lakhs as on March 31,2025.

Working capital management

Current assets of the Company increased by 20.0% from Rs.40,454.26 lakhs as of 31^st March 2024 to Rs.48,540.30 lakhs as of 31^st March 2025. The current and quick ratios of the Company stood at 1.78 and 0.94 respectively in 2024-25 compared to 1.01 and 0.46, respectively in 2023-24. Trade receivables as of March 31, 2025 stood at Rs.25,167.42 lakhs, representing 169 days of sales compared with 139 days as of 31^st March 2024. The entire receivables are considered good and secure. Cash and cash equivalents amounted to Rs.260.38 lakhs as on 31^st March 2025. The EBITDA margin for the FY25 stood at 18.1% as compared to 17.6% in FY24.

Particulars	UOM	FY24	FY25	% Variance	Remarks
Trade Receivables Turnover Ratio	Times	2.53	2.51	(0.65%)	Marginal decline; variance not material
Interest coverage ratio	Times	1.93	2.65	27.07%	Increase in EBIT & reduction in debt
Inventory Turnover Ratio	Times	1.44	1.87	29.67%	Higher inventory maintained with increase in to support growth.
Current Ratio	Times	1.01	1.78	77.21%	increase in Trade Receivables & decrease in Borrowings.
Debt Equity Ratio	Times	1.19	0.48	59.97%	Reduction in working capital loans and current maturities of term loans
Operating profit margin (%)	Times	17.60	18.10	0.50%	Improved operational leverage and cost efficiencies
Net Profit margin (%)	%	(3.03)	7.91	10.94%	Increase in profits & absence of exceptional write-offs (made in FY24)

Enterprise Risk Management

At BHL, risk management is a cornerstone of our operations. We adopt an enterprise-wide approach, focusing on identifying and managing key operational and strategic risks, supported by a dynamic business continuity plan. Our aim is to unlock opportunities that enhance organisational value while proactively mitigating risks that could impact future performance.

Our approach includes:

An integrated process for risk identification, assessment, and reporting.

Decentralised management of specific risks and opportunities at operational levels.

Corporate-level aggregation and oversight by the Risk Management and Sustainability Committee, with overall guidance and control from the Board.

The Company continuously pursues initiatives to assess, minimise, or avoid risks, while maintaining a strong focus on cost control and operational efficiency across all functions. Our risk management framework involves prioritising risks, continuously monitoring them, implementing appropriate controls, and periodically reviewing and redesigning these mechanisms to ensure their effectiveness in a dynamic business environment.

Regulatory and compliance risk

Operating in a highly regulated markets, BHL remains under constant scrutiny from global health authorities. The Company addresses these challenges through robust investments in quality systems, rigorous internal audits, and a strong regulatory affairs framework. Our ongoing remediation efforts across facilities underscore BHLs steadfast commitment to compliance, continuous improvement, and long-term excellence in quality.

Market and competition risk

The generics sector continues to face pressure from price erosion, technological disruption, and intense competition. BHL navigates these challenges by diversifying its portfolio, strengthening backward integration, and focusing on high-value segments. In addition, the Company actively seeks opportunities to expand its presence in differentiated and high-growth markets, reinforcing its long-term resilience and strategic edge.

Supply chain and operational risk

BHL strengthens its supply chain resilience by maintaining a diversified network of vendors, building adequate raw material buffers, and investing in automation and digital solutions. Complementing this, the Companys robust intermediaries manufacturing capabilities enhance operational stability and ensure consistent supply reliability.

Cybersecurity risk

Over the years, the Company has strengthened its cybersecurity framework, enhancing firewalls, intrusion detection systems, monitoring tools, and employee training programs. Complementing these measures, a robust response and recovery plan ensures that critical operations and sensitive data remain protected, at all times.

Financial risk

BHL takes a proactive approach to managing foreign exchange, liquidity, and interest rate risks, leveraging effective hedging strategies and robust financial controls. With stronger revenues and a significant reduction in net debt during FY 2024-25, the Company has enhanced its financial flexibility, positioning itself for sustained growth and strategic opportunities.

Human capital risk

Understanding that talent is the backbone of its success, BHL continues to invest in skill development, leadership growth, and employee retention. By strengthening its R&D teams and building a robust leadership pipeline, the company is equipping itself to stay resilient and future-ready.

Human Capital

Our people have been at the heart of BHLs journey, shaping the company into the success it is today—and will continue to drive its future growth. Their exceptional talent, dedication, and sense of ownership form the bedrock of our achievements. Even in an unprecedented year, their proactive approach and seamless teamwork enabled us to honor our commitments, strengthen the trust of our customers, and advance toward our organizational goals despite challenging business conditions.

We hold our employees contributions in the highest regard, placing their trust, well-being, and safety at the forefront of everything we do. It is thanks to their unwavering efforts that we have been able to deliver life-saving medicines to those who need them most, even under the toughest circumstances. Providing a secure, healthy, and supportive work environment for our team remains our utmost priority.

Employee composition of the Company Total number of employees
898	953
March 31, 2025	March 31, 2024
Average age of employees (in years)
35	35
March 31, 2025	March 31, 2024
Male to Female ratio
92:8	93:7
March 31, 2025	March 31, 2024

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, authorisations 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.