Biofil Chemicals & Pharmaceuticals Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian pharmaceutical industry continues to be a key pillar of the healthcare ecosystem, driven by strong domestic demand, expanding global reach, and a supportive policy environment. During FY 2025-26, the sector benefited from ongoing government initiatives aimed at promoting self-reliance in pharmaceutical manufacturing, strengthening supply chains, and enhancing healthcare accessibility.

India remains a global leader in generic medicines and vaccines, supported by a robust manufacturing base, skilled talent pool, and cost-efficient production capabilities. The industry comprises diverse segments including formulations, active pharmaceutical ingredients (APIs), biologics, biosimilars, vaccines, and contract manufacturing services, catering to both domestic and international markets.

Growing healthcare awareness, increasing incidence of chronic diseases, rising healthcare expenditure, and continuous investments in innovation and quality systems are expected to support the sectors long-term growth. With its strong global presence and commitment to affordable healthcare, the Indian pharmaceutical industry remains well positioned to reinforce its status as the “Pharmacy of the World.”

The pharmaceutical sector stands at the nexus of innovation, public health, and economic growth, playing a pivotal role in advancing healthcare outcomes globally. As with any industry, it faces a range of opportunities 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:

- Rising Global Demand for Healthcare

- Technological Advancements

- Government Initiatives and Supportive Policies

- Globalization and Market Expansion

- Patient-Centric Care

- Price Pressures and Healthcare Economics

- Market Competition

- Supply Chain Vulnerabilities

- War effect

- Increase in tariff charges

To Sum up, the Indian pharma sector has some opportunities and challenges that make its journey interesting. Despite hurdles like global issues, and price controls, the industry strives to soar high. The story of the Indian pharmaceutical industry is about more than overcoming challenges but making a healthier future. With the help of research and innovation, it can become a vital source of innovative and affordable medicines for the world.

Your Company is major manufacturer and Traders of Ferrous Sulphate in its Crystal, Exsiccated & Granular form, Microcrystalline Cellulose Powder (MCCP) Cellulose Powder (CP), Potassium Chloride, Calcium Carbonate and Sodium Chloride.

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, the Company has obtained the approval of its shareholders through a Postal Ballot by passing special resolution on 13th September, 2025 for the sale, transfer, or other disposal of the leasehold rights in respect of the vacant portion of the industrial land admeasuring approximately 80,156 square metres, situated at Plot No. 8, Sector-3, Kheda Industrial Estate, Pithampur, District Dhar, Madhya Pradesh. The Company has not yet received the requisite approval from the Madhya Pradesh Industrial Development Corporation (MPIDC) for the proposed transaction and the approval is currently under process. The proposed disposal relates only to the leasehold rights over the vacant portion of the land. The Company is taking the necessary steps to complete the transaction in accordance with the applicable laws, regulations, and the terms and conditions of the approvals granted.

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 2024-25 revenue generated from Pharma Unit was INR 2666.03 Lacs and in the year 2025-26 the same unit generated revenue of INR 189.63 Lacs.

Chemicals Unit

In the financial year 2024-25 revenue generated from Chemical Division was INR 674.18 Lacs and in the year 2025- 26 the same unit generated revenue of INR 943.19 Lacs.

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 2026-2027 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 2026-27 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.

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.

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.

During the financial year your company has achieved the turnover of INR 2839.52 lacs in comparison to previous years turnover of INR 3370.74 lacs and net profit of the company is INR 278.29 lacs in comparison to previous net profit of INR 57.87 lacs. Details about financial performance stated in board report.

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, 2026, Company had 24 employees.

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:

There is Change of 76.00% in Return of Net Worth as compared to previous Financial Year Due to increase 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.