Cipla Ltd Management Discussions

Ciplas 90-year commitment to advancing healthcare has significantly impacted patients worldwide. Guided by its purpose, Caring for Life, Cipla excels in multiple therapeutic areas, especially respiratory care in India and emerging markets. The Company has transformed its business models, expanded its global footprint and reinforced its competitive edge.

Globally, Ciplas teams work to meet patient expectations, strengthen core operations, and identify emerging opportunities to deliver superior returns to shareholders. The Company has exceeded stakeholder expectations with rigorous portfolio execution and financial discipline, driving higher profitability and improved cash flow. Cipla focuses on fortifying its core franchises while exploring new y areas like complex generics, biosimilars, new therapies, inhalation devices, diagnostic solutions, advanced technology platforms and digitised business models. The consumer business has shown steady growth, addressing unmet needs in categories such as pain relief, cold and cough, smoking cessation, gut health, skincare and feminine hygiene.

Compound Annual Growth Rate (CAGR) throug 028, driven by the continued launch of novel cancer treatments. Diabetes is projected to become the third-largest therapy area globally, reaching nearly USD 184 billion, with an estimated growth of 3-6% over the next five years. Seasonal respiratory infections, including cough, cold and flu along with flu vaccines are expected to grow at 5% throug 028. Mental health spending is forecasted to rise by 9-12%, fueled by innovations in anxiety and depression treatments, while obesity-related therapies are anticipated to grow at 24-27% as highly effective treatments gain wider adoption across multiple countries.

Evolving framework across key regulated markets

In 2024, the approval of novel drugs, first generics, biologics and biosimilars progressed steadily across nations, ensuring seamless availability of essential chronic treatments for patients globally. Meanwhile, the global pharmaceutical sector is witnessing major influences from evolving regulatory policies, the adoption of advanced digital health solutions, therapeutic advancement and the growing emphasis on sustainable practices. These elements are collectively driving innovation and shaping the industrys future.

National List of Essential Medicines (NLEM), 2022 - Indian Pharmaceutical Market

In a bid to make drugs affordable, Ministry of Health and Family Welfare revisits and revises National List of Essential Medicine (NLEM) every five years. NLEM 2022 was released by the Ministry in September 2022, a revision to the previous NLEM 2015 (delayed by around two years due to pandemic). Pricing of several antibiotics, vaccines, anti-cancer drugs and many other important drugs have become more affordable effective from 11^th November,

2022. The NLEM focuses on aspects such as safety,

training, frameworks, and ecosystem-while specialised teams identify key integration areas to optimise processes and drive innovation. AI training programs are being introduced and partnerships with leading research institutions and tech firms will ensure we stay ahead of advancements. By continuously monitoring AIs impact, refining strategies, and fostering a culture of learning, we aim to maximise its value. In FY 2024-25, we will scale these initiatives, enhance innovation in healthcare technology and maintain transparency to build stakeholder trust.

Key Financial highlights

Please refer to Financial Capital on page no. 128 of this report for key financial highlights and financial performance of the Company in FY 2024-25.

Business performance and Outlook One-India

Ciplas One-India business comprises of branded business, trade generics (through Cipla Pharma and Life Sciences Limited) and consumer health business (through Cipla Health Limited). Ciplas One India Business posted a healthy growth of 7% for the financial year, propelled by traction in branded prescription, trade generics and consumer health business. The business continues to witness strong growth across core therapies.

The focus for FY 2025-26 will be towards maintaining market beating growth, increasing the share of chronic therapies, traction in big brands, industry leading medical representatives productivity and enhancing patient experience with digital analytics and data science.

Branded prescription business

Ciplas branded prescription business has maintained strong momentum in FY 2024-25. Chronic therapies have been a key growth drive for us, with faster than market growth in our focus therapies of respiratory, cardiac and urology.

The contribution of chronic therapy sales has increased to 61.5%, driven by strong growth in chronic therapies and the strategic addition of anti-epilepsy brands from Sanofi. Our brand, Foracort, has consistently held the No. 1 position in the Indian Pharma Monthly (IPM) throughout the year and continues to maintain its top ranking, recently crossing 00 crores in sales for the first time in MAT Marc 025. Furthermore, our top brands continue to outperform the market across key focus therapies. In the Cardiac segment, the Dytor franchise has entered the IPM Top 50, while in Urology, the Urimax franchise has joined the 00 crores club, with its flagship brand, Urimax D, securing a spot in the IPM Top 100. Additionally, our anti-AR brand, Montair

LC, has entered the 00 crores club, further strengthening our presence in the market.

Therapy	Market rank	Market Share	Cipla Growth	Market Growth
Overall	3	5.5%	7.4%	8.0%
Chronic	2	8.6%	7.6%	9.8%
Acute	8	3.5%	7.2%	6.9%
Respiratory	1	25.3%	6.1%	3.4%
Urology	2	12.4%	18.9%	13.6%
Anti-infectives	4	6.9%	7.2%	5.1%
Cardiac	7	5.0%	12.6%	11.7%
Gastro-Intestinal	10	2.8%	11.5%	9.7%
Anti-diabetics	10	3.4%	8.5%	8.2%

Roche in oncology and with Sanofi in Anti-Epilepsy. In FY 2024-25, we entered into a partnership with Orchid Pharma Limited for their Antimicrobial Resistance (AMR) portfolio. This partnership aligns with our strategy to build a robust portfolio in the AMR space. Our partnership with MannKind Corporation, USA for inhaled insulin will provide patients in India with access to this device for the first time, further expanding our portfolio of anti-diabetes medicines. To further strengthening our ophthalmology portfolio, we have signed our first multi-regional licensing deal with Formosa Pharmaceuticals Inc., to bring an innovative treatment - clobetasol propionate ophthalmic suspension.

Trade Generics business

In FY 2024-25, the generics business unit at Cipla Pharma and Lifesciences Limited, subsidiary of the Company, transitioned to a new distribution model and optimised operations to enhance profitability and sustainability.

The implementation of the newly structured distribution framework led to a temporary business impact during the first two quarters of the year. However, the business continued to thrive in a dynamic and challenging market environment, demonstrating resilience and adaptability in the face of challenges. The business continued to strengthen its leadership position in the generics market industry via brand building initiatives and improving reach via deep distribution.

The retail vertical of the business has expanded across India, enabling productive engagements at over 1.5 lakh retail and pharmacy stores. This expansion is enhancing the reach and demand for generic products, ensuring accessibility down to the last mile. Additionally, the business continues to invest in innovative digital capabilities, broadening its audience and fostering new ways to engage with customers. To meet evolving patient needs, new products have been introduced, further strengthening the portfolio. Moreover, consumerisation initiatives are being expanded to bring products closer to users, enhancing accessibility and overall impact.

Outlook for FY 2025-26

The business unit aims to continue the growth momentum and is committed to enhancing its core business through strategic measures such as simplified commercials, concentrated emphasis on big brands, launching new products, increasing field presence across geographies & therapies, implementing market shaping initiatives and driving a mass market portfolio.

At the same time, focus will be on building new business by strengthening presence in emerging therapies and consumer segments, leveraging innovative digital tools for improved engagement with channel partners and launch of patient centric initiatives. The business remains committed and focused to delivering value to all stakeholders and building to improve access to patients.

Consumer business

In India, Ciplas consumer health business is housed under its wholly owned subsidiary, Cipla Health Limited (CHL).

In FY 2024-25, the business continued to drive "illness to wellness" theme led by brand building initiatives, deep distribution and category innovations.

The business delivered strong growth with healthy profit margins led by healthy traction in both core and emerging brands driven by high consumer awareness through robust media campaigns and in-depth consumer insights conducted throughout the year. The business has five core 00 crores+ brands and is well positioned for growth across brands.

In FY 2024-25, CHL also completed the acquisition of Ivia Beaute Private Limited to further strengthen its position in the fast-growing beauty and personal care sector catering to the aspirational consumer of India. CHL has an omni channel sales distribution with presence across Chemists, Grocers, Cosmetic Stores, Modern Trade, E-Commerce, Quick Commerce as well as D2C channels.

Top brands like Nicotex, Omnigel, Cofsils, Prolyte, Cipladine, Endura Mass and Maxirich continue to build a strong connect with their consumers through an "Always On Media" approach.

Note: Market share as per latest market estimates

*IQVIA estimates as on Marc 025 I ** AC Nielsen Estimates as on Marc 025 : *** AC Nielsen Estimates as of Marc 025

Outlook for FY 2025-26

CHL will continue the growth momentum by making big brands bigger, strengthening current portfolio position in the market, and build a formidable franchise to improve consumers lives every day.

v CHL will focus on brand-building of existing brands while also exploring inorganic opportunities and strengthening its play in digital channels of growth.

North America

Ciplas North America business delivered its highest-ever annual revenue, reaching USD 934 million, driven by strong momentum in our differentiated product portfolio. This growth was fueled by the successful launch of complex generics such as Lanreotide ANDA and continued value maximisation from our base portfolio. During the financial year, Cipla marked a significant milestone-completing 10 years of direct market presence in the United States. Since the launch of Albuterol five years ago, we have cumulatively shipped over 50 million inhalers to customers across the United States. Our market share in Albuterol segment has increased from 13% at the end of FY24 to 18%³ at the end of FY25.

During the year, we successfully launched two complex peptide injections in the U.S. market. Additionally, we introduced three injectable products with Competitive Generic Therapy (CGT) exclusivity, further strengthening our specialty portfolio. Our 505(b)(2) development pathway progressed with the FDA approval of Nilotinib capsules in February 2025, with a planned launch in FY 2025-26. We continued to enhance our respiratory capabilities in the U.S. through strategic investments in our Long Island and Fall River facilities. Notably, we filed Abbreviated New Drug Applications (ANDAs) for a generic version of Symbicort and another inhaled product over the past 12 months. Furthermore, our Goa manufacturing facility received Voluntary Action Indicated (VAI) status from the U.S. FDA, paving the way for future product launches from this site.

Our commitment to community well-being is reflected in our active participation in initiatives such as the Lung Force Walk through the COPD Foundation, as well as our continued support and funding for the American Cancer Society. These efforts are a testament to our enduring purpose and vision: Caring for Life.

Market Segment	TRx Overall Market Rank	TRx Overall Market Share
Albuterol HFA*	2	18.7%
Budesonide Solution	3	18.0%
Sertraline Tablets	2	22.7%
Esomeprazole Granules	1	44.3%
Ipratropium + Albuterol solution	3	18.8%

Growth during the years (in USD mn)

Outlook FY 2025-26

Our strategic investments in inhalation therapies, complex generics, peptide-based injectables and emerging areas such as oligonucleotides and differentiated 505(b)(2) products are positioning us for sustained growth over the medium to long term. The unlocking of capacity at our China respules facility, along with our Metered Dose Inhaler (MDI) and Dry Powder Inhaler (DPI) manufacturing sites in the U.S., is expected to contribute significantly to revenue in FY2025-26 and FY2026-27.

New product launches played a pivotal role in this success, with fresh offerings contributing significantly to the strong growth witnessed in FY2024-25.

Private Market - OTC and Rx

Ciplas private market business outperformed industry trends, delivering a strong secondary revenue growth of 6.7%—approximately 1.3 times the overall market growth. Cipla now ranks second in the prescription (Rx) market and stands out one of the companies with a business exceeding ZAR 3 billion in value. In the over-the-counter (OTC) segment, Cipla holds third position, with OTC segment growing faster than the market. Actor Pharma (Pty) Ltd continues to be a key growth driver in the OTC space, with a strategic focus on womens health, anti-infectives and paediatric care.

Both Ciplas OTC and Rx businesses have grown ahead of the market, resulting in increased market share compared to the previous year.

Market Segment	Market Rank	Market Share	Cipla Growth	Market Growth
OTC & OTC SEP	3	8.5%	6.3%	4.4%
Rx	2	8.7%	6.9%	5.8%
Total	3	8.7%	6.7%	5.3%

Source - IQVIA MAT Marc 025 Private Market - Therapy View

At a therapy level, Cipla has increased its market shares across key therapies including Respiratory, Nervous System, Musculo-skeletal system Anti-Infectives, Cardiovascular and G.U. System + Sex Hormones.

Note:* UA- Under Approval, TA- Tentative approval, FA- Final approval

One Africa (South Africa, Sub-Saharan Africa, North Africa and Cipla Global Access)

FY 2024-25 delivered strong performance across multiple parameters in One Africa region. Despite an intensive competitive environment, One Africa landed at a revenue of ,827 crores with growth of 14% in H terms (Ex- QCIL divestment)

South Africa

Cipla South Africa continued its strong performance, delivering robust core revenue growth and accelerated profitability. The business recorded a 15% year-on-year increase in revenue in local currency terms, reaching ZAR 6.3 billion. This growth was driven by outstanding performance across both the private and tender segments. The private market contributed 77% of the total revenue, with the remaining 23% coming from the tender business.

Therapy	Market Rank	Market Share	Cipla Growth	Market Growth
Systemic Anti- infectives	1	12.3%	8.4%	0.8%
G.U.System+ sex hormones	3	11.8%	22.6%	6.1%
Respiratory system	2	15.1%	3.3%	2.8%
Nervous system	3	11.5%	6.3%	4.9%
Cardiovascular system	3	8.4%	9.2%	3.6%
Alimentary Tr+metabolism	4	5.9%	10.1%	12.6%
Musculo-skeletal system	4	7.4%	8.2%	3.9%
Antineoplast+ immunomodul	8	6.1%	-11.2%	2.4%

Tender

Ciplas tender business delivered outstanding growth in FY 2024-25, elevating our position to the second-largest player in South Africas tender market. This performance is underpinned by our strong presence in antiretrovirals (ARVs), vaccines, respiratory therapies, and oral solid dosage (OSD) forms. Through our current tender engagements, we are proud to support the treatment of over three million patients annually.

Outlook for FY 2025-26

The outlook for Cipla South Africa remains highly positive. Building on the momentum of FY 2024-25, we are well-positioned to capitalise on strategic opportunities with a continued focus on profitability. Our growth strategy will center on strengthening market leadership through organic product launches, as well as strategic partnerships and collaborations.

We anticipate sustained expansion and deeper market penetration in the coming year.

Sub Saharan Africa (SSA1

Ciplas Sub Saharan Africa business has demonstrated strong double-digit growth of 18% YoY in FY 2024-25 in USD terms, bolstered by exceptional growth in Ghana in West Africa and Mauritius and Madagascar in the Oceanic cluster. We are strengthening our market leadership in Kenya, delivering growth that outpaces the market by 16% points. Cipla holds a leading position in respiratory therapies and commands over 10% market share in key therapeutic areas including gastrointestinal, pain management and respiratory care.

Outlook for FY 2025-26

The Sub-Saharan business remains deeply committed to delivering innovative treatment solutions to patients across the region. By leveraging digital innovation in asthma and Chronic Obstructive Pulmonary Disease (COPD1 diagnosis, we aim to enhance early detection and access to care for respiratory diseases— further reinforcing our strong market position in the respiratory segment. In parallel, we are focused on building a robust portfolio in cardiovascular and diabetes therapies to address the growing burden of non-communicable diseases. We will continue to strengthen our market leadership in East Africa while accelerating growth in Southern and West Africa, with a particular emphasis on Ghana.

North Africa (NA1

In FY 2024-25, our North Africa operations delivered exceptional results, achieving 22% year-on-year growth and exceeding both revenue and profit targets, despite facing substantial challenges. Operating primarily in Morocco and Algeria, we strengthened our leadership in key therapeutic areas, ranking first in CNS and second in Respiratory in Morocco, and securing fifth in Respiratory, and second in MDIs in Algeria. Our strategic partnership model also enabled us to extend our reach into French West Africa, significantly improving patient access to critical treatments.

Outlook for FY 2025-26

Looking to 2026, we are preparing for a transformative year as we expand into Oncology, with the launch of treatments for myeloma and myelodysplastic syndromes and breast cancer. We will also continue to build on our strength in respiratory in Morocco and Algeria. We are well-positioned to leverage our strong foundation, strategic vision and leadership to drive continued growth and reinforce our competitive position in the region.

Cipla Global Access (CGA)

Ciplas revolutionary efforts and established long term alliances with funding organisations globally, have been at the forefront of extending the reach of affordable care for HIV/AIDS and malaria patients since 2001. TLD (Tenofovir/Lamivudine/Dolutegravir 300/300/50 mg) is the most widely taken drug in the 1^st line Anti-retro viral(ARV) treatment currently and has reached millions of patients through various Institutional agencies.

In FY 2024-25, we catered to the needs of around 1.5 million + patients in 64 countries and also launched the Paediatric Abacavir/Lamivudine/ Dolutegravir (pALD). This was complemented with strong strides made in the availability and supply of Anti Malaria and Reproductive Health medicines as well.

Outlook for FY 2025-26

Cipla Global Access remains steadfast in its mission to deliver life-saving, affordable medicines across multiple countries, primarily in low- and middle- income countries (LMICs). In FY2025-26, we aim to expand our impact by launching new products and entering additional therapeutic areas, including reproductive health, oncology and anti-tuberculosis treatments—broadening patient access to essential, low-cost medications. Our focus will remain on scaling capacity, enhancing operational efficiency and onboarding new customers to strengthen our global footprint and ensure sustainable growth.

Emerging Markets and Europe (EMEU)

Ciplas EMEU region delivered a strong turnaround in FY2024-25, achieving revenue of USD 390 million- reflecting a robust 15% year-on-year growth in USD terms, despite ongoing market volatility. This performance was driven by our deep market strategy and the successful execution of our "Energise, Build & Win" theme, which laid a solid foundation for sustainable growth while maintaining healthy margins.

Portfolio Update:

Our focus is to build future pipeline of differentiated products, both in-house and through licensing route, to drive growth in our deep markets. In FY 2024-25, we filed 100+ products across markets.

Key Launches during FY 2024-25 across EMEU

Molecules	Therapy	Geography
Beclometasone + Formoterol MDI	Respiratory	Germany, Spain, Norway, EU
Fluticasone MDI	Respiratory	France, Saudi Arabia
Fluticasone Salmeterol DPI	Respiratory	Australia, Italy, Saudi Arabia
Dymista NS	Respiratory	China
Esomeprazole	Gastroenterology	China
Dapagliflozin	Antidiabetic	China

25, Cipla made 266 DMF filings in various countries. The Company has a robust portfolio of over 158 APIs across regulated markets in various stages of development.

Manufacturing Capability

Cipla operates four API manufacturing sites that are fully compliant with current Good Manufacturing Practices (cGMP) and approved by leading international regulatory authorities, including the U.S. Food and Drug Administration (US FDA), European Directorate for the Quality of Medicines and Healthcare (EDQM), Pharmaceuticals and Medical Devices Agency, Japan (PMDA), World Health Organisation (WHO), Therapeutic Goods Administration, Australia (TGA), and Korea Food and Drug Administration (KFDA).

These facilities include dedicated units for the production of oncology, hormone and corticosteroid active pharmaceutical ingredients (APIs), with a total API manufacturing capacity exceeding 850 metric tons. Cipla also brings advanced capabilities in handling a wide range of batch sizes and offers specialised expertise in particle engineering and micronisation-critical for achieving the desired particle sizes in respiratory APIs.

The Companys infrastructure includes three API Research & Development (R&D) centres, two pilot plants and three safety screening laboratories. All manufacturing sites are equipped with zero liquid discharge systems and comprehensive wastewater treatment facilities, including Effluent Treatment Plants (ETP) with MultiEffect Evaporators (MEE), Agitated Thin Film Dryers (ATFD), Vertical Thin Film Dryers (VTFD) and Reverse Osmosis (RO) units. Notably, all of Ciplas India-based manufacturing sites have been certified as Zero Waste to Landfill, underscoring the Companys commitment to sustainable and environmentally responsible operations.

Business Performance

In FY 2024-25, the API Business had multiple headwinds like geopolitical issues, global supply chain interruptions, high inflation rates and pressure on margins for commercialised molecules. Geopolitical issues majorly impacted the prices of Key Starting Materials and Intermediates thereby increasing the API prices. However, the Company was not only agile with regular supplies but also ensured timely supplies to support customers with their critical launches and lock-in with multiple customers.

API Business revenue witnessed a marginal dip as compared to the previous financial year. The FY 202425 revenue stood at USD 67 million. The revenue by geography and by therapy is reflected in the graph below. The API business delivered strong performance, driven by a successful mix of differentiated products, enhanced traction in market seeding and effective customer lock-ins.

Cipla continues to strengthen its global footprint by partnering with leading generic companies and innovators to support the launch of new products across key markets, including Europe, Japan, Korea and Brazil. Our strong relationships with some of the worlds largest generic pharmaceutical companies have enabled us to enhance value delivery and improve commercial outcomes for our partners. Looking ahead, Cipla aims to increase the number of seeding and lock-in opportunities for new molecules under development-laying the foundation for sustainable and long-term growth. To support this ambition, the company plans to expand its API R&D and manufacturing capacities. A continued focus on productivity and operational excellence has also led to significant cost optimisation, driven by ongoing improvements in process efficiency and yield.

Outlook for FY 2025-26

We remain aligned with Ciplas core purpose of "Caring for Life", striving to improve health outcomes globally. In FY2025-26, the business will continue to execute its reimagined strategy-focusing on critical and high-demand APIs to ensure reliable and uninterrupted supply to customers.

Key priorities for FY 2025-26 include maintaining a strong market position in the Top 10 APIs, onboarding new business through an expanded pipeline of molecules, and enhancing market presence through organic launches. We will also deepen its global footprint by partnering with innovators and expanding into untapped markets, reinforcing Ciplas commitment to sustainable and inclusive growth.

Human Resource Management and Industrial Relations

For details on Ciplas approach towards Human Resources, refer to Human Capital on page no. 78 of this report.

Adherence to accounting standards

The Company continues to adhere to standard accounting policies under the Indian Accounting Standards (Ind AS), applicable since 1^st April, 2016. IND AS 116 pertaining to Leases was the sole addition under Section 133 of the Companies Act, 2013. These policies are to be read along with the relevant applicable rules and accounting principles. Changes in policies, if any, are approved by the Audit Committee.

Opportunities

Please refer page no. 48 for opportunities on material topics for the Company in the "Double Materiality Assessment" section.

Threats, risks and concerns

Threats such as geopolitical instability, trade protectionism, rise of popularity of anti-obesity medications, government imposed pricing and market competition can impact the Companys financial stability and hamper its business performance.

The Cipla Enterprise Risk Management (ERM) program covers its key risks across all its business areas. The Investment and Risk Management Committee of the Board reviews and discusses the risk updates on a quarterly basis.

Please refer Page no. 54 for Enterprise Risk Management framework and overview of key risks and the mitigation measures.

Internal control and its adequacy

Cipla has an adequate system of internal controls commensurate with the nature of its business and the