Bilcare Ltd Management Discussions

Industry Outlook

The Indian pharmaceutical industry continued to demonstrate resilience during FY 2025–26, supported by strong domestic demand, increasing healthcare expenditure, growing pharmaceutical exports and continued investments in research, manufacturing and innovation. India continues to be one of the worlds leading pharmaceutical manufacturing hubs and remains a major supplier of affordable generic medicines to global markets. The Indian pharmaceutical sector is expected to maintain its growth momentum, supported by increasing demand for chronic therapies, complex medicines, biosimilars, specialty products and healthcare services.

The Indian pharmaceutical sector is also witnessing increasing adoption of technology and digital solutions across research, drug development, manufacturing and supply-chain management. Growing investments in biotechnology, clinical research, advanced manufacturing and artificial intelligence are expected to create further opportunities across the pharmaceutical value chain. Government initiatives aimed at strengthening domestic pharmaceutical capabilities and reducing import dependence are also expected to support the industrys long-term growth.

Indias pharmaceutical exports remained resilient during FY 2025–26 despite global pricing pressures, regulatory challenges and geopolitical uncertainties. Indias pharmaceutical exports exceeded US$31 billion during FY 2025–26, reflecting continued demand for Indian pharmaceutical products across developed and emerging markets.

The clinical trial supplies industry is expected to continue its growth trajectory, supported by increasing clinical research activity, rising R&D expenditure, increasing complexity of clinical trials, expansion of trials across geographies and growing adoption of decentralized and patient-centric trial models. Market research estimates indicate that the global clinical trial supplies market could grow from approximately US$5.34 billion in 2025 to US$8.18 billion by 2030, representing a CAGR of approximately 8.9%. The market is being supported by increasing clinical-trial volumes, higher R&D investments, complex trial designs, personalized medicine and stringent regulatory requirements.

Comparator sourcing, clinical trial packaging, labelling, storage, logistics and related supply-chain services are expected to remain important components of the clinical trial ecosystem. The increasing geographical spread of clinical trials and the need for timely availability of investigational medicinal products and comparator medicines create opportunities for integrated service providers with capabilities across procurement, packaging, storage, distribution, returns and destruction.

The clinical trial industry is also embracing digital transformation, including the use of AI, data analytics, electronic systems and technology-enabled supply-chain solutions. These developments are expected to improve supply-chain visibility, operational efficiency, traceability and regulatory compliance.

Pharmaceutical packaging continues to play an important role in product protection, patient safety, supply-chain integrity and regulatory compliance. Demand for packaging solutions incorporating tamper evidence, serialization, traceability, anti-counterfeit features and improved barrier properties is expected to remain strong. At the same time, pharmaceutical companies are increasingly seeking packaging solutions that reduce material consumption and environmental impact while maintaining product protection and regulatory requirements.

Bilcare Group, through its subsidiary, with its established expertise in PVC and PVDC films, continues to be positioned to serve the requirements of domestic and international pharmaceutical customers. Its manufacturing capabilities, R&D expertise and quality systems provide a platform to address evolving customer requirements and international compliance standards.

Opportunities, Threats & Outlook

Opportunities

- Increasing Number and Complexity of Clinical Trials: The global clinical trial supplies market is expected to benefit from the increasing number and complexity of clinical trials across therapeutic areas, including oncology, rare diseases, biologics and specialty therapies.

- Rising R&D Spending: Continued investment by pharmaceutical and biotechnology companies in research and development is expected to drive demand for clinical trial supplies, comparator sourcing, packaging, labelling and logistics services.

- Globalization of Clinical Trials: As clinical trials become increasingly global, sponsors require reliable supply-chain partners capable of managing procurement, storage, distribution, returns and destruction across multiple countries and regulatory jurisdictions.

- Growth in Comparator Sourcing: Comparator sourcing represents an important and growing component of clinical trial supply services. The increasing use of standard-of-care medicines as comparators, particularly in oncology and other therapeutic areas, is expected to create opportunities for companies with established sourcing networks and quality systems.

- Growth of Biologics and Specialty Therapies: The increasing development of biologics, biosimilars, personalized medicines and specialty therapies is creating demand for specialized clinical-trial supply-chain capabilities, including controlled-temperature storage and distribution.

- Technology and Digital Transformation: Adoption of AI, digital supply-chain systems, data analytics, electronic documentation and technology-enabled trial management can improve efficiency, transparency, traceability and compliance.

- Indias Growing Pharmaceutical Ecosystem: Indias expanding pharmaceutical manufacturing, R&D and export ecosystem provides opportunities for companies operating across pharmaceutical packaging and clinical trial supply services. Indias pharmaceutical exports exceeded US$31 billion in FY 2025–26, demonstrating the continued strength of the countrys global pharmaceutical position.

- Pharmaceutical Packaging: Growth in pharmaceutical manufacturing and exports is expected to support demand for high-quality primary and secondary packaging solutions. Sustainability, barrier performance, traceability and material efficiency are expected to remain key areas of innovation.

- Sustainable Packaging Solutions: Increasing emphasis on environmental sustainability provides opportunities to develop recyclable materials, mono-material structures, solvent-free coating processes and lightweight packaging solutions without compromising barrier properties and product protection.

Threats

- Cost Pressures: Rising costs associated with raw materials, logistics, energy, specialized storage and temperature-controlled supply chains may impact margins.

- Regulatory Hurdles: Clinical trials and pharmaceutical supply chains are subject to stringent regulatory requirements across different jurisdictions. Changes in regulatory requirements can increase compliance costs and operational complexity.

- Geopolitical and Supply-Chain Risks: Geopolitical tensions, trade restrictions, freight disruptions and changes in international trade policies may affect sourcing, transportation costs and delivery timelines.

- Pricing Pressure: Competition in pharmaceutical services, packaging and clinical trial supply markets may result in pricing pressure and require continuous improvement in operational efficiency.

- Technology and Compliance Requirements: Increasing adoption of digital technologies and evolving data-integrity and regulatory requirements require continued investment in systems, processes and employee capabilities.

Business Performance for the Year 2025–2026

During FY 2025–26, Bilcare continued to focus on providing integrated solutions across clinical trial supplies. The Companys capabilities include development, manufacturing, primary and secondary packaging, innovative blinding techniques, IWRS, storage at ambient and controlled temperatures including narcotics and psychotropic medicinal products and global distribution through depots and sites with capabilities to manage storage, distribution, returns and destruction.

Services relating to Investigational Medicinal Products (IMPs) include:

- Comparator Procurement

- Development, Manufacturing, Primary and Secondary Packaging

- Storage at Ambient and Controlled Temperatures

- Logistics within India and globally

- Returns & Destruction

- Analytical & Regulatory Services

- IWRS

The Company continues to focus on serving pharmaceutical companies and Contract Research Organizations (CROs) by providing integrated clinical trial supply end to end solutions. Its established processes and quality systems support the management of clinical trial materials in accordance with applicable customer and regulatory requirements.

Comparator sourcing continues to represent an important opportunity within the clinical trial supply-chain market. Bilcares sourcing capabilities and quality systems provide a foundation to participate in this growing segment and to support customers requiring reliable procurement and supply of comparator medicines and related products.

The Company has established Standard Operating Procedures (SOPs) and internal checks and controls to ensure adherence to defined quality and operational standards. The Company remains focused on strengthening its capabilities, expanding its service offerings and improving operational efficiency in order to enhance its competitiveness in the clinical trial supplies market.

For pharmaceutical packaging, the Group continues to focus on packaging solutions that provide appropriate barrier protection, product integrity and regulatory compliance. Sustainability and material efficiency remain important areas of development, with opportunities to adopt recyclable structures, solvent-free coating technologies and optimized barrier solutions.

Internal Control System and Adequacy

Bilcare has implemented an effective Internal Financial Control system designed to ensure that transactions are appropriately authorized, accurately recorded and reported in accordance with the Companys policies, procedures and Standard Operating Procedures.

The internal control framework is supported by periodic review and evaluation by the Internal Auditors. Significant observations, if any, are reported to the appropriate management levels and the Audit Committee for review and corrective action. The Statutory Auditors have also made recommendations which are being taken cognizance of.

The Company continues to focus on strengthening its internal controls, risk-management processes and compliance framework in line with the scale and complexity of its operations.

Financial Performance

Bilcare Ltd. currently has only one reportable segment.

During FY 2025–26, on a standalone basis, the Company reported a Profit Before Exceptional Items and Tax of Rs371.62 lakhs, as compared with Rs544.48 lakhs in FY 2024–25 (restated).

Revenue from operations during FY 2025–26 stood at Rs685.06 lakhs, compared with Rs1,511.74 lakhs in the previous year. Decline in Revenue during the year was mainly on account of delay in starting of Clinical Studies and increased pricing pressure in the market. We expect improvement in Revenue in upcoming financial year by way of handling more studies at competitive pricing. Other income increased to Rs1,952.75 lakhs from Rs1,784.62 lakhs in FY 2024–25. Consequently, total income stood at Rs2,637.81 lakhs, compared with Rs3,296.36 lakhs in the previous year.

Total expenses decreased to Rs2,266.19 lakhs during FY 2025–26 from Rs2,751.88 lakhs in FY 2024–25. The reduction in expenses was supported by lower employee benefit expenses and a significant reduction in finance costs.

During FY 2025–26, the Company incurred an exceptional loss of Rs215.88 lakhs, resulting in Profit Before Tax of Rs155.74 lakhs, compared with Rs544.48 lakhs in FY 2024–25.

After considering deferred tax expense of Rs56.63 lakhs, the Company reported a Profit After Tax of Rs99.11 lakhs for FY 2025–26, compared with Rs398.88 lakhs in FY 2024–25.

The financial performance reflects continued profitability at the operating level before exceptional items, although the lower revenue from operations and exceptional loss impacted the overall profitability for the year. The Company remains focused on improving operating performance, increasing the share of value-added business, optimizing costs and strengthening its financial resilience.

Key Financial Ratio Changes

On a standalone basis, the Companys net profit ratio (after Tax), calculated with reference to revenue from operations, was approximately 14.47% in FY 2025–26, compared with approximately 26.39% in FY 2024–25.

The reduction in the net profit ratio primarily reflects the lower profit after tax during the year, together with the lower revenue from operations. The Companys Profit Before Exceptional Items and Tax stood at Rs371.62 lakhs during FY 2025–26, compared with Rs544.48 lakhs in the previous year.

Ratio	Current year	Previous year	% Variance	Remarks for variance more than 25%
Debtors turnover ratio (in times)	2.51	3.64	-31.06	Due to efficient collection
Inventory turnover ratio (in times)	24.21	33.83	-28.46	Reduction in inventory level
Debt service coverage ratio (in times)	6.56	2.65	148.01	Lower interest cost due to Repayment of Public Fixed Deposits in previous year
Current ratio (in times)	0.22	1.15	-80.62	Due to effective payments
Operating Profit Margin (%)	102.67	80.51	27.52	Primarily driven by a favorable product mix, and higher Other Income during the year.
Net profit ratio (%)	14.47	26.39	-45.17	Decrease in Net profit
Return on capital employed (%)	0.00	0.02	-77.02	Decrease in Net profit and Borrowings during the year.

Risks and Concerns

The Company is exposed to various business and financial risks, including currency fluctuation, credit risk, liquidity risk, regulatory risk, supply-chain disruption and changes in market conditions.

The Companys foreign currency exposure arising from exports is naturally hedged to an extent through its operating activities. Credit risk is managed through customer assessment, defined credit terms and regular monitoring of receivables. Liquidity risk is monitored through cash-flow management and rolling forecasts to ensure that the Company maintains adequate liquidity for its operational requirements.

The Company also remains exposed to changes in global economic conditions and geopolitical developments. Management continues to monitor these risks and take appropriate measures to mitigate their potential impact.

Cautionary Statement

The Management Discussion and Analysis contains forward-looking statements concerning the Companys objectives, projections, estimates, expectations and future business prospects. These statements are based on current expectations and assumptions and are subject to various risks and uncertainties.

Actual results may differ materially from those expressed or implied in such forward-looking statements due to factors including changes in political and economic conditions, regulatory and legal developments, litigation, labour relations, exchange-rate fluctuations, changes in market conditions, supply-chain disruptions, competition and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of future events or otherwise.