Bliss GVS Pharma Ltd Management Discussions

Economic Overview

Global Economy¹

The global economy has demonstrated remarkable resilience in the face of ongoing geopolitical conflicts, evolving trade dynamics and shifts in monetary policies, sustaining a growth rate of 3.3%. The International Monetary Fund (IMF) reports a notable decrease in inflation from an annual average of 6.6% in CY 2023 to 5.7% in CY 2024. This decline can be attributed to a combination of tighter monetary policies by central banks and increased energy production, which helped ease price pressures. The economic landscape reflects a growing sense of stability, supported by strategic policy adjustments and a robust recovery in key sectors.

In CY 2024, emerging markets and developing economies outperformed advanced economies with a growth rate of 4.3%, while advanced economies lagged behind at 1.8%. This strong performance was driven by a surge in domestic consumption, as well as rising foreign investments that bolstered economic activity.

Outlook

Going forward the global economy is expected to grow gradually, though potential risks continue to loom. The anticipated shift towards more accommodative monetary policies is likely to neglect an environment conducive to sustained economic growth. However, several challenges, including ongoing geopolitical tensions and structural constraints in economies such as China, could present obstacles. Despite these, continued government support along with a medium-term fiscal consolidation, will be crucial in maintaining stability.

Indian Economy²

In FY 2025, the Indian economy grew at a steady pace of 6.5%, despite facing uncertainties such as geopolitical instability, supply chain disruptions and trade fluctuations.³ This resilience was largely fuelled by the strong performance of the services sector, which continued to drive economic activity. Key to this progress was the development of Indias digital infrastructure, which not only improved financial inclusion but also enabled wider access to credit for both businesses and individuals.

Indias manufacturing sector has gained momentum, particularly in high-value industries such as pharmaceuticals, which have strengthened the countrys position in global value chains. The growth of domestic manufacturing has been underpinned by initiatives such as the ‘China+1 strategy, which encourages economies to diversify supply sources and the ‘Make in India campaign, which strengthens both traditional and emerging industries.

Indias economic growth has been significantly boosted by the governments continued efforts create a more business-friendly environment, especially through a rise in foreign direct investment (FDI). This influx of capital was largely directed towards the manufacturing and retail sectors.

Outlook

Indias economic outlook remains optimistic, fuelled by strategic government measures such as infrastructure development and encouraging private sector involvement. As sectors like retail are continue to flourish, supported by rising consumer demand and improved connectivity, the economy is expected to sustain its growth momentum.

Industry Overview

Global Pharmaceutical Industry⁴

The global pharmaceutical industry is poised for strong growth in CY 2024-25, driven by advancements in drug innovation, increased healthcare investments, and expanding access to medicines worldwide. Breakthroughs in biotechnology, personalized medicine, and AI-driven drug discovery are accelerating the development of new treatments, improving patient outcomes, and enhancing operational efficiency. Government is also playing a crucial role in streamlining approval processes and supporting research initiatives, encouraging an environment that encourages innovation. Additionally, the rising demand for vaccines, biologics, and specialty medicines is fuelling market expansion, particularly in emerging economies where healthcare infrastructure continues to improve.

Moreover, strategic partnerships, mergers, and collaborations between pharmaceutical firms, research institutions, and technology providers are paving the way for more efficient drug development and distribution. With these positive trends, the global pharmaceutical sector is set to experience a dynamic and productive year, bringing life-changing medicines to more people across the world.

Key Highlights:

Personalised medicine

Leveraging patient genomic information, healthcare is shifting towards personalised treatment that enhance effectiveness and minimise side effects, supported by digital technologies and precision medicine for targeted care and improved patient outcomes.

China+1 strategy

The ‘China+1 strategy is pushing companies to diversify, with India emerging as a strong alternative for manufacturing active pharmaceutical ingredients (APIs) as well as contract development.

AI-powered Drug discovery

Pharmaceutical Companies are using AI to accelerate drug discovery, identify new therapeutic targets and streamline clinical trials.

Spending and growth by regions

Emerging markets dominate growth

Countries such as India, China and Brazil are set to drive the growth of pharmaceutical spending. The focus will be on affordable and generic medications to meet the rising healthcare demand from their large populations.

Europe

The industry will grow steadily, fuelled by personalised medicine, faster drug development, regulatory improvements and the rise of digital healthcare technologies.

Asia Pacific (India, China, Japan)

Growth will be driven by increasing healthcare spending, large populations and government initiatives for domestic pharmaceutical manufacturing, with India emerging as a major hub for affordable generic drugs.

Latin America

The market is growing with rising disposable income, but challenges related to healthcare infrastructure and access could limit progress.

Indian Pharmaceutical Industry⁵

Indias pharmaceutical industry continues to play a major role in healthcare, both at home and around the world. The Union Budget 2025 gave it a boost with several supportive measures. The government increased the total healthcare budget by nearly 10%, bringing it to around H 98,311 crore. This shows a clear push to strengthen the countrys healthcare system.

For the pharma sector, the customs duty on medicines for rare diseases and cancer has been removed, and Patient Assistance Programmes (PAPs) have been expanded. These steps helped more people access critical, often expensive, treatments. The government is also working on improving medical infrastructure, with plans to set up 200 Day Care Cancer Centres and create 10,000 new medical seats to train more healthcare professionals.

Programs like ‘Heal in India and a push for medical tourism show the countrys goal of becoming a global healthcare destination. Overall, the budget lays down a solid path for growth, but continued support — especially for R&D and local manufacturing — will be key to reaching the sectors full potential.

Government Initiatives

The Government of India has implemented several schemes and initiatives to support the pharmaceutical industry—

Improvement of Healthcare Infrastructure

The Government of India is placing a strong emphasis on improving the countrys healthcare infrastructure by increasing the funding for the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission. As part of this effort, it plans to establish day-care centres for cancer treatment at all district hospitals aiming to set up around 200 centres by FY 2025-26.

Strengthening of the PM-JAY

Launched in 2018, the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) offers an annual health coverage of INR 5 lakhs per family for secondary and tertiary care. With a wide network of private and public hospitals, it ensures accessible and quality healthcare for millions, focussing on economically vulnerable families.

Customs Duty Exemption

The government has removed Basic Customs Duty (BCD) on thirty-six lifesaving medications for cancer, rare diseases and chronic conditions, along with their raw materials. This move aims to make life-saving drugs more affordable and accessible to those in need.

Strengthening the Pharmaceuticals and Medical devices sectors

The government is expected to further allocate funds to the PLI scheme to boost the production of key bulk drugs and advanced therapies, aiming to strengthen domestic manufacturing and exports. It is also promoting R&D in the pharmaceuticals and medical devices sector through initiatives such as the Promotion of Research and Innovation in Pharma MedTech sector (PRIP) scheme.

Trends and Innovations⁶

Expansion of Generic Drug manufacturing

India continues to solidify its position as the worlds leading provider of generic medicines, supplying 20% of global generics by volume. With over 650 U.S. FDA-approved manufacturing facilities, Indian pharmaceutical companies are major suppliers to markets like the U.S. and the UK.

Government initiatives to promote affordable medicines

The Indian government is actively promoting the use of generic medicines through initiatives like the Pradhan Mantri Bharatiya Janaushadhi Pariyojana (PMBJP). This program has established over 9,000 dedicated stores across the country, offering medicines at lower prices, thereby enhancing accessibility for low-income households.

Also, the Production Linked Incentive (PLI) Scheme for Pharmaceuticals aims to boost domestic manufacturing and innovation with incentives to support the development of complex and high-tech products.

Advancements in personalized medicine

The pharmaceutical industry is witnessing a shift towards personalized medicine, facilitated by advancements in AI technologies. AI is being utilized for personalized sequential decision-making, enabling customized treatment plans based on individual patient data.

Regulatory reforms to streamline Pharmaceutical processes

Indias drug regulatory authority is implementing reforms to simplify the export process for unapproved drugs and streamline manufacturing licensing. By adopting a more efficient export clearance system based on a companys past export history, the regulator aims to reduce the number of no-objection certificates issued, thereby easing the workload on its limited workforce. These changes are part of broader efforts to enhance the efficiency and responsiveness of Indias pharmaceutical regulatory framework.

Growth opportunities

Domestic market expansion

Growing chronic disease rates in India are expected to drive demand for advanced medications within the domestic market.

US generics market

India is boosting exports of affordable generic drugs, leveraging its cost- effective manufacturing to meet the US market demand.

Innovation in drug delivery systems

Innovations in drug delivery systems, particularly through nanotechnology, are transforming healthcare by enhancing treatment efficiency and addressing the critical challenge of patient compliance. Patient compliance refers to how consistently and correctly patients follow prescribed treatment regimens, including dosage schedules and administration methods.

Healthcare digitalisation

The pharmaceutical industry is rapidly adopting AI, machine learning and big data to advance drug discovery, clinical trials and patient care.

Challenges⁷

Supply chain resilience

The US Biosecure Acts restriction on Chinese biotech boosts Indias cost-effective manufacturing and skilled workforce. Indian API manufacturers are gaining US-FDA preference, leading to increased pharma investments, driven by strong R&D and a growing portfolio.

Growing regulatory initiatives

Global regulatory initiatives like AMRH, US-FDAs Project Orbis and EMAs centralised procedure are streamlining drug approvals, reducing duplication and enhancing Indias access to global markets.

Rise of Digitalisation and Generative AI

Industry 4.0 and digitalisation are improving pharma efficiency, reducing errors and optimising supply chains. Generative AI accelerates drug discovery, clinical documentation and regulatory processes while AI-driven automation streamlines R&D, manufacturing, sales and compliance.

African Pharmaceutical Industry⁸

The pharmaceutical sector in the Middle East and Africa, is expected to grow from $30.07 billion in CY 2024 to $42.42 billion by CY 2030, at a compound annual growth rate (CAGR) of 6.10%. This expansion is driven by factors such as growing population, rising prevalence of chronic diseases and higher healthcare expenditure.

The growing population and rising chronic diseases such as diabetes, cardiovascular diseases and cancer are increasing demand for advanced treatment options. Additionally, higher healthcare investments and government initiatives to enhance infrastructure and accessibility are supporting market growth. Technological advancements, the shift towards personalised medicine and broader healthcare coverage are also opening new avenues for pharmaceutical companies to innovate and address the regions evolving healthcare needs.

Key Trends and Growth Opportunities

Growing Need for Affordable Medicines

Africas fast-growing population and many health problems are creating a big demand for low-cost, good-quality medicines. This gives pharmaceutical companies a great chance to grow in Africa and help more people get the healthcare they need.

Personalised Medicine is on the Rise

The progress in genetic testing and biotech, Africa is starting to use personalised medicine—treatments designed for a persons unique genes. Countries like South Africa and Nigeria are leading this change, helping people get better and more accurate treatments.

Digital Technology is Changing Healthcare

Digital tools like mobile health apps, telemedicine (online doctor visits), and electronic health records are making healthcare better in Africa. They help manage medicine supplies, keep patients informed, and collect health data quickly, which makes healthcare faster and more effective.

More Focus on Research and Clinical Trials

Africa is becoming an important place for medical research and testing new treatments. Because of its diverse population and wide range of diseases, both local and international drug companies are investing in research labs, vaccine trials, and innovation centres to meet health needs in Africa and around the world. distribution networks. This will improve access to healthcare and contribute to building a sustainable healthcare system across the continent.

Investment in R&D and Innovation

Africa is grappling with health challenges, including infectious diseases such as malaria and tuberculosis and growing chronic conditions such as diabetes and hypertension. Indian pharmaceutical companies have an opportunity to invest in R&D for tailored treatments. Partnering with African research institutes can accelerate drug development, innovation and facilitate the transfer of cutting-edge medical technologies.

Affordable and high-quality healthcare solutions

Indias pharmaceutical industry is known for its ability to produce high-quality medicines at competitive prices. As Indiancompanies,ventureintoAfrica,theyhavethepotential to help reduce costs and improve healthcare accessibility.

Company Overview

Bliss GVS, founded in 1984, is a prominent pharmaceutical Company with over four decades of expertise. The Company specialises in the manufacturing, marketing and export of over 150 branded formulations in various dosage forms. With a strong international footprint, especially in Sub-Saharan Africa, Bliss GVS is recognised for its flagship anti-malarial brand, Lonart, which is WHO-endorsed.

Bliss GVS is a global leader in Suppositories and Pessaries dosage forms. Their facilities comply with European GMP standards and are accredited with certifications, including EU GMP, US FDA, WHO GMP, OHSAS-18001:2007 and ISO-14001:2004. Notably, Bliss VS is recognised as Indias first EU-GMP certified suppository manufacturer.

The Companys dedication to diversifying its product portfolio has led its foray into dermatology and herbal treatments, addressing the changing needs of the market and striving to surpass customer expectations.

Human Resource Management

Bliss GVS Pharma Limited recognizes its workforce as a key asset and is committed to nurturing a safe, inclusive, and engaging work environment. The Company ensures employees are well-informed of their rights, responsibilities, and workplace policies through comprehensive employee handbooks, a strong Code of Conduct. Emphasis is placed on safety, guided by a robust Environmental, Health, and Safety (EHS) policy and adherence to certified industrial hygiene standards. To promote alignment with its vision, mission, and strategic goals, Bliss GVS regularly communicates these across the organization and integrates them into performance management systems, including goal-setting, evaluations, and incentive programs. Cross-functional collaboration is encouraged to foster a shared sense of purpose, and regular performance reviews and check-ins ensure ongoing alignment. Employee motivation and growth are further supported through various skill development workshops and engagement initiatives, reinforcing the Companys commitment to holistic workforce development.

Research and Development

Bliss GVSs Research & Development Centre strictly complies with Good Laboratory Practices (GLP) guidelines. The facility is equipped with advanced instruments, including a particle size analyser, gas chromatograph, high-performance liquid chromatograph, dissolution testers, stability chambers, and lab-scale manufacturing systems.

Recognised by the Department of Scientific and Industrial Research (DSIR), Government of India, the R&D team plays a key role in fostering a culture of innovation across the organization. With a team of skilled professionals specializing in formulation and analytical development, the Company is committed to creating safe, effective, and regulatory-compliant medications that address the changing needs of patients.

Quality assurance

Bliss GVS Pharma, produces high-quality products by seamlessly integrating advanced technology with rigorous operational procedures and safety practices. Its manufacturing facilities are certified as cGMP compliant by both local and international standards, including EU GMP, US FDA, WHO GMP, OHSAS 18001:2007 and ISO 14001:2004, ensuring the highest level of quality and regulatory compliance. Notably, Bliss GVS is recognised as Indias first EU-GMP certified suppository manufacturer.

Through pursuit of excellence extends beyond these certifications, as it strives to instil a culture of quality and regulatory compliance across all production teams. This ensures sustainability and continuity in its operations. Also, the product development approach is cantered around embedding quality into both products and processes. The company achieve this by deeply understanding the desired quality attributes, identifying key parameters, and constructing a control strategy to maintain product integrity consistently.

To deliver quality at affordable prices, it operates with maximum efficiency. Planning, production, and logistics teams work in harmony, utilizing Just-In-Time techniques to optimize inventory levels and costs throughout the manufacturing lifecycle. Additionally, it integrates all business processes, including quality systems, into a robust ERP solution powered by SAP, which enhances process efficiency significantly. This comprehensive approach allows to consistently meet the evolving needs of its customers while maintaining the highest standards of quality and safety.

Risk and concerns

Type of risk	Risk particulars	Mitigation strategy
	Fluctuations in demand, pricing pressures, currency exchange rates can negatively impact consumer trust, further affecting its overall performance.	The Company diversifies market presence across geographies to reduce dependency on any single region The Company employs dynamic pricing models and regularly review pricing strategies to remain competitive.
		The Company implements a robust hedging policy for foreign exchange risk management.
Market volatility		The Company continuously monitors market trends and customer preferences through data analytics to proactively adjust business strategies.
Non-compliance	Failure to comply with the laws, regulations and guidelines set by pharmaceutical regulatory authorities could result in legal consequences, fines or reputational damage.	The Company builds long-term customer relationships and brand loyalty through consistent quality and service. The Company has a dedicated team of experts who manage regulatory requirements and ensure adherence to all applicable guidelines and regulations.
	Transportation challenges, geopolitical instability, or supply disruptions can delay the delivery of raw materials, components or finished products, leading to production delays and shortages of essential medications.	The Company diversifies its suppliers and maintains a reserve of essential materials to safeguard against potential disruptions.
Supply chain volatility	The company operates in international markets, so fluctuations in exchange rates could impact its profitability.	The Company employs a hedging strategy by using forward contracts to lock in exchange rates for future transactions, minimizing exposure to currency fluctuations.
		The Company regularly monitors currency markets and alignment of hedging decisions with expected cash flows.
Foreign exchange risks		The Company do natural hedging by balancing inflows and outflows in the same currency wherever feasible.
		The Company periodically review of the hedging policy to align with changing market dynamics and business needs.

Financial Performance

Standalone (Rs in Lakh)

Particulars	FY 2024-2025	FY 2023-2024	Change Y-O-Y
Revenue	66,720.46	60,545.97	10%
EBITDA	9,158.56	10,716.87	(15)%
PBT before Exceptional Items	9,417.11	11,134.38	(15)%
PBT	9,417.11	7,025.77	34%
PAT	6,896.87	5,064.49	36%

Consolidated (Rs in Lakh)

Particulars	FY 2024-2025	FY 2023-2024	Change Y-O-Y
Revenue	80,972.62	77,024.49	5%
EBITDA	12,668.33	15,062.26	(16)%
PBT before Exceptional Items	12,563.92	14,606.81	(14)%
PBT	12,563.92	11,687.20	8%
PAT	9,025.53	8,157.79	11%

Key Financial Ratios (Standalone)

Particulars	FY 2024-2025	FY 2023-2024	Change	Comments
1 Current Ratio	6.16	6.59	(6)%	It has reduced due to an increase in trade payables and capital creditors, which raised current liabilities disproportionately compared to current assets.
2 Debt-Equity Ratio	0.05	0.07	(27)%	Improved due to profits, leading to higher equity. Additionally, there was a reduction in net debt levels, thereby decreasing the total debt-to-equity proportion.
3 Interest Coverage Ratio	15.30	23.50	(35)%	-
4 Debt Service Coverage Ratio	2.80	2.86	(2)%	It has declined primarily due to an increase in principal repayments during the year, despite an improvement in operating performance.
5 Return on Equity Ratio	0.07	0.05	28%	It has increased primarily due to a higher profitability during the year. Although shareholder equity also increased, the increase in profit outpaced the equity growth, resulting in improved returns for shareholders.
6 Inventory Turnover Ratio	16.98	14.59	16%	It has increased primarily due to a significant rise in cost of goods sold during the year, while the average inventory levels remained relatively stable.
7 Trade Receivables Turnover Ratio	1.61	1.52	6%	It has improved mainly due to an increase in revenue from operations and relatively stable trade receivables. This indicates improved collection efficiency and better credit management during the year.
8 Trade Payable Turnover Ratio	5.90	4.83	22%	It has improved primarily due to a higher volume of purchases during the year and a reduction in the average trade payables.
9 Net Working Capital Turnover Ratio	1.40	1.24	13%	It has improved primarily driven by an increase in net sales and a slight reduction in net working capital.
10 Operating Profit %	48%	51%	(6)%	-
11 Net Profit %	10%	8%	25%	The net profit margin increase is mainly attributable to one-time exceptional item in previous year.

Outlook

At Bliss GVS, our strategic focus for the future is centered on building enduring capabilities that will propel us toward long-term growth, innovation, and resilience. In FY 2025, we made meaningful progress across several fronts that strengthen our foundation and position us for the next phase of our journey.

The successful commissioning of an additional 3 MW solar capacity in Q4 FY 2025 reflects our commitment to sustainability and operational efficiency. By further reducing our carbon footprint and energy costs, we are building energy resilience and aligning with global ESG expectations.

We also advanced our global manufacturing capabilities, securing EU-GMP certifications for two of our production facilities. These approvals not only validate our adherence to world-class quality standards but also enhance our credibility in regulated markets, opening doors to new growth avenues.

The launch of our state-of-the-art semi-solid plant during the year is a key milestone in expanding our dermatology and topical product offerings. This facility represents a significant step forward in our capability-building efforts, allowing us to meet evolving market needs with greater speed and scale.

Our commercial capabilities were further strengthened through strategic agreements with clients in the US, Canada, and Europe, reinforcing our global reach and creating a robust platform for long-term growth in highly regulated markets.

As we move forward, we remain focused on investing in product innovation, infrastructure, talent, and digitalization. By building these capabilities today, we are ensuring that Bliss GVS is well-equipped to navigate industry challenges, capture new opportunities, and create lasting value for all stakeholders.

Internal Control Systems and their adequacy

To ensure accurate recording of financial and operational information and compliance with various internal controls, statutory requirement and other regulatory compliances, the Company has a strong internal financial control system proportionate to the size, scale and complexity of its operations.

No significant or important observation regarding the effectiveness or appropriateness of such controls was made by the Companys internal auditors throughout the assessment period. The finance department closely monitors and assesses the effectiveness and sufficiency of the Companys internal control system, as well as its compliance with operational systems, accounting procedures and internal regulations at all of the Companys locations.

The effectiveness of the internal financial control system in the Company has been assessed and monitored by M/s. Kalyaniwalla & Mistry LLP, Chartered Accountants and Statutory Auditors of the Company. It complies with the Companys operating system, accounting practices and standards at all of its sites.

Corrective measures are performed in the relevant areas and controls are improved following the results of the Internal Audit functions report. The Audit Committee of the Board is given a presentation outlining any major audit observations, recommendations and recommended corrective action. In order to correctly manage the books of account and publish financial statements, the Company complies with all applicable Indian Accounting Standards.

Cautionary statement

The Management Discussion and Analysis (MDA) section may contain forward-looking statements regarding potential future developments. These statements involve known and unknown risks and uncertainties that could materially affect final results. In addition to macro-environmental changes, a worldwide pandemic could introduce unforeseen, unprecedented and continuously evolving risks to the Company and its operating environment. The facts and figures in the report are derived from assumptions based on available internal and external data, making them susceptible to change as underlying variables are dynamic. Any forward-looking statement made in this context reflects the Companys current intentions, beliefs or assumptions as of the date it was made. The Company does not undertake to update or revise any forward-looking statements, whether due to new data, unexpected developments or other factors.