Concord Drugs Ltd Management Discussions

1. Global Overview (CY 2025)

Global real GDP growth is forecast at 3.0% for 2025, with a slight uptick to 3.1% projected for 2026 reflecting an IMF revision from the April forecast amid easing trade tensions, improved financial conditions, and front-loading of global trade activity. Headline inflation is expected to decline to 4.2% in 2025 and further to 3.6% in 2026, driven primarily by cooling energy prices and demand pressures. Despite these improvements, downside risks remain potent. Persisting geopolitical tensions, renewed trade disruptions, or a resurgence of inflation could derail the current outlook.

2 . Global Pharmaceutical Sector (CY 2025)

Global medicine spending is estimated to reach approximately USD 1.6 trillion by 2025, with a compound annual growth rate (CAGR) of 3 6% through the decade, excluding COVID-19 vaccine spending. Biotechnology continues to rebound following drag in 2023, accelerated by innovations such as GLP-1 therapies and heightened M&A activity Evaluate.

3. Indian Economic and Pharmaceutical Overview (FY 2024 25) Indian Economic Overview

Real GDP Growth: India remains the fastest-growing major economy, with IMF projecting 6.4% growth for both 2025 and 2026.

Nominal GDP: Estimated at approximately USD 4.187 trillion.

Consumer Inflation (CPI): Maintained at 3.34% in March 2025, indicating macroeconomic stability. Indian Pharmaceutical Sector

The Indian domestic pharmaceutical market is valued at around USD 50 billion in FY 2023 24, with expectations to double to between USD 120 130 billion by 2030.

Some estimates place the 2025 market size at USD 53.3 billion, projecting a CAGR of 11.6% through 2030.

In April 2025, the sector recorded strong year-on-year growth of 7.8%, with monthly sales of INR 19,711 crore, reflecting resilience in pricing and demand.

Government reforms such as new GST policies are expected to reduce drug prices and improve working capital, though API tax disparities present challenges for manufacturers.

Regulatory efficiency is improving: the CDSCO is adopting AI and expediting drug approvals, with test license processing cut to 45 days and export certifications in under seven days.

Export diversification efforts are underway. India recorded USD 10.5 billion in pharma exports to the U.S. in FY 2025 and is pivoting towards markets like Russia, Brazil, the Netherlands, and UK to reduce reliance on the U.S.

Sector confidence remains strong amid global uncertainties, buoyed by robust domestic demand, innovation, and expansion into semi-regulated markets.

4. Outlook (2025 & Ahead)

Global Outlook: Growth is expected to hover at 3%, but remains fragile. Geopolitical shocks, trade policy volatility, and inflation missteps could weigh heavily on projections.

Indian Outlook: A projected 6.4% GDP growth, controlled inflation, and accelerating pharma sector trajectory reinforce Indias growth momentum. This positions the business well in terms of both domestic consumption and global market expansion.

5. Risks & Concerns

Global Risks: Elevated downside risks from trade conflicts, geopolitical unrest, and inflation spikes could hinder global and Indian growth.

Domestic Risks: Challenges include regulatory changes, API tax discrepancies, patent cliffs, aggressive pricing pressures, and complexity in navigating emerging export markets.

Internal Risks: Monitor supply chain fragility, foreign exchange volatility, and possible interest rate tightening.

6. Internal Control Systems

Our internal control framework remains robust and appropriate for our scale and business nature. No material deviations from Accounting Standards have occurred. Internal and statutory audit mechanisms continue to function effectively, with periodical reviews by the Audit Committee ensuring compliance and strengthening governance.

7. Human Resources / Industrial Relations

In FY 2024 25, the company continued its strategic HR initiatives:

Launched training programs and talent development initiatives.

Conducted root-cause analysis to curb attrition.

Recruited experienced leadership and filled critical roles to support business scaling. (Insert actual employee numbers and specific HR outcomes here, if available.)

8. Key Financial Ratios

9. Disclosure of Accounting Treatment

We have adhered strictly to prescribed Accounting Standards in FY 2024 25, with no deviations in treatment or reporting methodology from prior years.

10. Cautionary Statement

Certain statements in this MD&A are forward-looking and subject to risks and uncertainties such as changes in economic policies, geopolitical developments, regulatory shifts, and macroeconomic conditions. Actual results may vary. The company undertakes no obligation to update these statements publicly.

For Concord Drugs Limited