Biofil Chemicals & Pharmaceuticals Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENT

A healthy pharma sector produces positive outcomes for both patients and investors. In the year 2024-2025, various programs and initiatives were implemented in the Department of Pharmaceuticals. Apart from this, the department also laid special emphasis on promoting domestic manufacturing of medical equipment and strengthening the pharmaceutical industry.

India is the largest provider of generic drugs globally and is known for its affordable vaccines and generic medications. The Indian Pharmaceutical industry is currently ranked third in pharmaceutical production by volume after evolving over time into a thriving industry growing at a CAGR of 9.43% since the past nine years. The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. Major segments of Indian Pharmaceutical Industry include bulk drugs, vaccines, contract research & manufacturing, biosimilars and biologics. India is a global leader in the supply of DPT, BCG, and Measles vaccines. India is one of the biggest suppliers of low-cost vaccines in the world. India accounts for 60% of global vaccine production. There are 500 API manufacturers contributing about 8% in the global API Industry. It manufactures about 60,000 different generic brands across 60 therapeutic categories and accounts for 20% of the global supply of generics. Access to affordable HIV treatment from India is one of the greatest success stories in medicine. Because of the low price and high quality, Indian medicines are preferred worldwide, making it "pharmacy of the world".

OPPORTUNITIES AND THREATS

and threats that shape its trajectory and impact stakeholders across the healthcare chain.

Following are some of the opportunities & threats that the industry is likely to experience in the coming year:

• Opportunities
• Rising Global Demand for Healthcare
• Technological Advancements
• Government Initiatives and Supportive Policies
• Globalization and Market Expansion
• Patient-Centric Care
• Threats
• Price Pressures and Healthcare Economics
• Market Competition
• Supply Chain Vulnerabilities

Expansion of Companys Business

Now, BCPL plan to produce hormonal preparation and direct compression grade granules for tablet manufacturing and also renovating and modernizing the operational unit at Plot No. 8, Sector-3, Kheda Industrial Estate, Pithampur, Dist. Dhar (M.P.);

BCPLs Board strategically decided to consolidate operations into one location rather than pursue uncertain bank financing. During the year 2024-25 company has Sale, transfer or otherwise dispose of plant & machineries, furniture, fixtures, scraps, structure, tools, manufacturing equipment and other assets except leasehold land and building situated at 11/12, sector E, Sanwer Road Industrial Area, Indore M.P. to Cyano Pharma Private Limited

and Sale, transfer or otherwise dispose of only leasehold land right & building situated at 11/12, sector E, Sanwer Road Industrial Area, Indore M.P. to Formo Plast Private Limited. This decision aims to optimize resources, mitigate financial risks, and enhance operational efficiency while ensuring regulatory compliance without extensive borrowing.

Further it is also proposed to sell, transfer or otherwise dispose of only leasehold rights in respect of vacant portion of industrial land about 80156 square meter situated at plot no. 8, Sector-3, Kheda Industrial Estate, Pithampur, Dist. Dhar (M.P.) subject to approval of Madhya Pradesh Development corporation and subject to approval of the members for which notice of postal ballot already been sent to shareholders.

SEGMENT WISE PERFORMANCE

Your Company is multi segment Company as it deals in Pharmaceuticals and Chemicals products. During the year under review the performances in terms of revenue of the segments were as follows:-

Pharma Unit

In the financial year 2023-24 revenue generated from Pharma Unit was INR 2786.79 Lacs and in the year 2024- 25 the same unit generated revenue of INR 2666.03 Lacs.

Chemicals Unit

In the financial year 2023-24 revenue generated from Chemical Division was INR 1216.74 Lacs and in the year 2024-25 the same unit generated revenue of INR 674.18 Lacs.

OUTLOOK

The pharmaceutical sector has seen improvement in the recent quarters due to several factors, such as improved performance in the US generics market, robust performance in branded markets, moderation in raw material costs, and market share gains in recently launched products. All these factors have recently contributed to the strong earnings of domestic pharma companies.

As we advance, many domestic-focused companies are expected to generate mid-teen growth in Current Year 2025-2026 amid a focus on new product launches, pick-up in volume growth and improved demand for generics and branded products.

The pharma industry has sought fiscal incentives to promote research and development (R&D) in the sector, as it is likely to reach $ 400-450 billion market size by 2047. In a statement, Indian Pharmaceutical Alliance Secretary General said there is a high risk, long gestation period and low success rate in research, and therefore, there is a need for continuous investments. The Indian pharma sector aims to achieve $ 120-130 billion by 2030 and $ 400-450 billion by 2047. To achieve this vision, the Union Budget 2025-26 should accelerate the pace of innovation and R&D," he added. The announcement of the Promotion of Research & Innovation Program (PRIP) Scheme in 2023 was a positive step to spur innovation, he stated.

RISKS AND CONCERN

The pharmaceutical sector is poised for dynamic growth driven by technological advancements, expanding market opportunities in emerging economies, and collaborative innovation. To capitalize on these opportunities and navigate challenges effectively, pharmaceutical companies must embrace innovation, strategic partnerships, and a patient-centric approach to healthcare delivery. By leveraging these trends, the sector can contribute significantly to improving global health outcomes and addressing unmet medical needs in the years ahead.

INTERNAL CONTROL SYSTEM

The Company has a reasonable system of internal control comprising authority levels and powers, supervision, checks and balances, policies and procedures so as to ensure orderly and efficient conduct of business, safeguard the assets of the business, prevent and detect fraud, ensure the completeness and accuracy of accounting records, to ensure the timely preparation of financial information. Further, the system is reviewed and updated on an on-going basis on recommendations as and when made by the Statutory Auditors, Internal Auditors and Independent Audit Committee of the Board of Directors.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year your company has achieved the turnover of INR 3370.74 lacs in comparison to previous years turnover of INR 4052.50 lacs and net profit of the company is INR 57.87 lacs in comparison to previous net profit of INR 90.13 lacs. Details about financial performance stated in board report.

HUMAN RESOURCES

At Biofil we believe that "company grows when its people grow" and hence we continuously strives to emphasize creation of a conducive work environment and development of a robust and consistent approach towards talent management & leadership development. As on 31st March, 2025, Company had 26 employees.

DETAILS OF SIGNIFICANT CHANGES IN THE KEY RATIOS

As per the amendment made under Schedule V to the Listing Regulations read with Regulation 34(3) of the Listing Regulations, details key financial ratios and any changes in return on net worth of the Company are given below:

Particulars	2024-25	2023-24	Change	Reason for change of 25% or more in Financial Ratios
Debtors turnover	0.94	1.50	-37.40%	Decrease in average trade receivables as compared to previous year.
Inventory turnover	10.47	19.93	-47.47%	Increase in Cost of Goods Sold due to higher purchase of goods
Interest coverage ratio	24.14	22.82	5.78%	No Major Variance
Current ratio	1.34	1.35	-0.77%	No Major Variance
Debt-Equity ratio	0.03	0.02	4.07%	No Major Variance
Operating profit margin (%)	2.61%	2.25%	15.55%	No Major Variance
Net profit margin (%) or sector-specific equivalent ratio as applicable	1.91%	1.82%	4.92%	No Major Variance

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

There is Change of -61.00% in Return of Net Worth as compared to previous Financial Year Due to a drop in PAT while net worth increased.

CAVEAT:

Some of the Statements in Management Discussion and Analysis describing companys objective may be "forward looking statement" within the meaning of applicable Securities Law and Regulations. Actual results may differ substantially or materially from those expressed or implied. Important factors that could influence companies operation include various global and domestic economic factors.