Chandra Bhagat Pharma Ltd Management Discussions

INTRODUCTION:

Our Company was incorporated as Chandra Bhagat Pharma Private Limited at Mumbai on March 10 th , 2003, under the provisions of the Companies Act, 1956 vide Certificate of Incorporation issued by Assistant Registrar of Companies, Maharashtra, Mumbai. Consequent upon the conversion of our Company from Private Limited to Public Limited, the name of our Company was changed to Chandra Bhagat Pharma Limited and fresh Certificate of Incorporation consequent upon the conversion from Private Limited to Public Limited dated March 20 th , 2019 was issued by the Registrar of Companies, ROC – Mumbai.

INDUSTRY STRUCTURE:

Being a pharmaceutical company, we operate in an industry which is highly regulated and controlled. There are stringent and restrictive norms in relation to quality standards. Further, entry barriers in regulated markets in which we currently operate and seek to expand are very high and have extensive regulations pertaining to research, testing, manufacturing, selling and marketing of pharmaceutical products. In most regulated markets, pharmaceutical products must be registered after being tested for safety, efficacy and environmental impact and the regulations differ from country to country Some of our customers operate in such highly regulated markets and liaise / do business with our Company based on our Company being the approved source of supply.

Our Core business as follows:

Ethical marketing of Pharmaceutical formulation & products in Domestic and International market through our own distribution network and Sales force under our own brand. Major focus in Injection – IV (Intravenous) & IM (Intramuscular), tablets and capsules supply to Hospital and Health care Centre for critical diseases. Getting our approved formulations manufactured through Contract Manufacturers, Source & Supply of Generic and branded Pharma formulations and medicines to healthcare institution, Government, NGOs, Hospitals & Distributors.

Specialty Chemicals, Intermediates & Active Pharmaceuticals Ingredients (API) –We source, deal in Import, indenting and Supply in API & its intermediates. We are engaged in the business of marketing pharmaceutical critical care & health care products. For which we have obtained necessary approvals from FDA for getting the formulations manufactured from contract manufacturers on Loan license or on principle to principle basis. We also take the necessary Trademark approvals & registrations wherever required.

At present, we have a wide range of product portfolio of pharmaceutical formulation including IV & IM range Injections, few tablets to cater the Domestic & Export Market. We have established presence in major therapeutic categories for formulations such as Anti-cancer (Oncology), Antibiotics, Anesthesia, Hormones, Orthopedic, Cardiac, Cardiovascular, Anti-fungal, Antiviral, Pediatrics, Cardiology, Nephrology, Neurology etc. We are also engaged in promoting and marketing of Active Pharmaceuticals Ingredients (APIs) in India.

FINANCIAL PERFORMANCE:

Particulars	Year ended 31.03.2025	Year ended 31.03.2024
	(In Lacs)	(In Lacs)
Revenue from Operation	8671.61	22,137.19
EBITDA	406.45	429.09
Profit Before Tax	116.54	226.19
Profit After Tax	85.78	153.03
Equity Capital	754.51	754.51
Reserves & Surplus	2,242.40	2146.39

FUTURE OUTLOOK:

Considering the experience of promoters in Pharmaceutical Formulations and their growth in Pharma Industry, Management has proposed a plan to expand in the Pharma Industry in following stages and areas.

Enter in a MOU and identify Dedicated Manufacturing Plant near Mumbai & Ahmedabad with high tech fully automated machines duly approved by FDA and WHO to manufacture Pharmaceutical Formulations.

Setup Warehousing and distribution center at additional locations to cater the Indian Market Introduce Vaccines – Hepatitis A (Hep A) and few more formulations.

Develop new Pharma formulations and medicine in Domestic and Export market Develop the brand and confidence of Doctors for Pharma formulations.

Develop new sales and distribution network in Pan India and for export

Management has plans to focus in Pharma formulations and generic medicines. The future plans are as follows: Launch the Formulation in Vaccines & few other chronic disease treatment range. Expand the secondary sales team for Ethical Marketing and sales.

Expand and have Presence in more states with more deep penetration Organize and participate in Medical Association Programs and Conferences. Invest in R & D for formulations.

Expand the warehousing and distribution channels.

Business Plan

Considering the growth prospects in Pharma Industry and the experience of promoters, Management has plans to launch in phase manner the formulation in Vaccines range where growth potential is high due to Government Health Incentive Program and Awareness for preventive diseases by Paediatric doctors and NGOs.

Categories

Hepatitis A Vaccine (Hep A) Inactivated Polio Vaccine (IPV) Pneumococcal Vaccine Varicella Vaccine

Management plans to launch the Hepatitis A and Inactivated Polio Vaccine in first phase and remaining formulations will be in phase wise manner within 3-4 years.

OPPORTUNITIES AND THREATS :

Company is in new geographies with increasing economy and industrial growth augur well for the companys products in the near short-term.

Global trade wars can pose a challenge to international trade impacting the company. Competition from new players within the country poses a threat.

SEGMENT WISE PERFORMANCE :

The business activities of the Company comprise in one business segment i.e. Pharmaceutical Formulations and API Products.

RISKS AND CONCERNS:

The company makes responsible approaches towards Risk Management on an integrated basis to cover all aspects of operations to diminish each or a combination of known risks that could affect its business. The company has a comprehensive insurance coverage and breakdown coverage for all its electronic equipments to protect all its assets from such damages. Apart from the above, the Company has a well documented Risk Management System. The Company does identify a few risks, which are purely routine in nature and none of any significant impact. There is a mitigation system in place which addresses these risks.

INDUSTRY STRUCTURE AND DEVELOPMENT OPPORTUNITIES, THREATS, RISKS, CONCERNS AND OUTLOOK:

The pharmaceutical industry is responsible for the development, production and marketing of medications. Thus, its immense importance as a global sector is

inarguable. In 2014, total pharmaceutical revenues worldwide had exceeded one trillion U.S. dollars for the first time. North America is responsible for the largest portion of these revenues, due to the leading role of the U.S. pharmaceutical industry. However, as in many other industries, the Chinese pharmaceutical sector has shown the highest growth rates over previous years.

Still, the leading pharmaceutical companies come from the United States and Europe. Based on prescription sales, NYC-based Pfizer is the worlds largest pharmaceutical company. In 2018, the company generated some 53.6 billion U.S. dollars in pure pharmaceutical sales. Other top global players from the United States include Johnson & Johnson, Merck & Co., and AbbVie. Novartis and Roche from Switzerland, GlaxoSmithKline and AstraZeneca from the United Kingdom, and French Sanofi are the European big five.

Branded, patented medicines by far make up the largest share of pharmaceutical revenues. Humira, an anti- inflammatory drug, generated some 20 billion U.S. dollars of revenue worldwide in 2018. Oncologics continue to be the leading therapeutic class based on revenue. In 2018, cancer drugs made nearly 100 billion U.S. dollars of revenue globally. Other major therapy classes were respiratory drugs and antidiabetics.

More than any other industry, the pharmaceutical sector is highly dependent on its research and development segment. Some pharmaceutical companies invest 20 percent and more of their revenues in R&D measures. This share can be significantly higher at small, research-specialized companies. The United States is a traditional stronghold of pharmaceutical innovation. The origin of most new substances introduced to the market can be traced back to the United States. Because of the steady loss of patent protection, the invention of new drugs is of vital importance for the pharmaceutical industry. Revenue losses due to patent expiry often are very significant, as can be seen with Pfizers Lipitor from 2012 onwards.

The Management has prepared growth plans for the future as follows:-

Identify and enter in a MOU on long term basis as dedicated State of the Art manufacturing facility for vaccination, Injection, other dosage forms with approval from WHO,GMP and upgrade up to PICS and MHRA.

Create a contract manufacturing and development of FDF (Finished Dosage Formulations) vertical for giving single point solution to customers from Raw materials to compression to bulk packing.

Create CRAMS (Contract Research and Manufacturing Services) for offering end to end solution for Formulation development & commercial mfg. for clients at competitive costs.

Expand our Sales footprint in the Pharma formulations and medicines in the domestic and export markets.

Focus on Pharma formulations and generic medicines through launch of new products in the Chronic diseases& Anti-allergic treatments.

Increase our Field force for Ethical marketing of Generics drugs and medicines. Create new Warehousing & distribution facility for our Pharma & API-Chemical business to service our customers. Services offered will be Bulk repacking for retail customers with customized requirements.

Opportunities:

Vaccines and certain formulations are under approval having huge market demand in India.

In various global markets, governments are focusing on speedy introduction of generic drugs into the market Growing acceptance by consumers of new and innovative formulation and awareness

Rising in the demand for products in emerging areas and export

Development of specialized products suitable for Pharma and API has huge demand

Threats:

Changes in government policies Fluctuations in raw material prices Change of behavior of consumer demand Increase in Input cost can cause upward pricing Too many players entering and exiting the market

FINANCIAL REVIEW: Revenue from Operations:

During the year 2024-25, the total revenue of our company has decreased from Rs. 9,220.48 Lacs as against Rs. 23,270.49 Lacs in year 2023-24. Main revenue earned from sales of Pharmaceutical formulation in key therapeutic areas for the domestic markets such as Antibiotics, Anesthesia, Hormones, Orthopedic, Anti- cancer (Oncology), Cardiovascular, Anti-fungal, Antiviral, Pediatrics, Cardiology, nephrology, Neurology etc and API chemicals.

Total Expenses:

The operating cost consists of Material used & consumed, direct expenses to manufacture the products, Employee Benefit Expenses, Finance cost, Depreciation and Administration, Rent & Selling Expenses. The materials consumed were decreased to Rs. 9,103.94 Lacs from Rs. 23,044.29 Lacs as compared to year 2023-24.

Employee expenses:

Expenses incurred on staff and executives and its welfare during the financial year 2024-25 was Rs. 250.88 Lacs as against Rs. 266.18 Lacs in year 2023-24 had been kept as direct expenses towards Employee. This reduction in employee costs was achieved through better resource allocation and targeted incentive structures, which enhanced efficiency without proportionately increasing overall expenditure.

Finance and Interest cost:

Expenses incurred on finance and interest cost during the financial year 2024-25 increased to Rs. 194.77 Lacs from Rs. 138.72 Lacs in fiscal year 2023-24. This expenditure has increased.

Depreciation and amortization expense:

During the year 2024-25, depreciation and amortization expense of our company has increased to Rs. 95.14 Lacs as against Rs. 64.18 Lacs in year 2023-24.

Administrative & Selling Expenses:

Administrative & Selling expenses for the year 2024-25 have decreased to Rs. 1235.05 Lacs from Rs. 1771.55 Lacs in F.Y. 2023-24.

Profit/(loss) After Tax:

The PAT for Financial Year 2024-25 is Rs. 85.78 Lacs as compared to Rs. 153.03 Lacs in Financial Year 2023-24.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Management of our Company has put in place adequate Internal Controls that are commensurate with the size and nature of its Business. The Internal financial controls placed also ensures that executed transactions are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles.

Internal Audit Department along with the help of external professional agencies continuously monitors the effectiveness of the internal controls with an objective to provide to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the internal control. Based on their assessment, Management believes that your Company maintained effective internal control over financial reporting.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Your Companys industrial relations continued to be harmonious during the year under review.

CAUTIONARY STATEMENT:

The Management Discussions and Analysis Statement made above are on the basis of available data as well as certain assumptions as to the economic conditions, various factors affecting raw material prices, selling prices, trend and consumer demand and preference, governing and applicable laws and other economic and political factors. The Management cannot guarantee the accuracy of the assumptions and projected performance of the Company in future. It is therefore, cautioned that the actual results may differ from those expressed and implied therein.

For and on behalf of

CHANDRA BHAGAT PHARMA LIMITED

HEMANT C BHAGAT	PRANAV HEMANT BHAGAT
MANAGING DIRECTOR	WHOLETIME DIRECTOR
(DIN: 00233530)	(DIN: 00156362)
PLACE: MUMBAI
DATE: 29.05.2025