Deccan Health Care Ltd Management Discussions

Industry Structure and Developments:

The nutraceuticals market is poised for substantial growth, driven by an aging population, increasing health consciousness, and ongoing advancements in nutritional science. Companies that leverage innovation, adapt to regulatory changes, and align with evolving consumer preferences will be well-positioned to thrive in this dynamic sector. The nutraceuticals market includes dietary supplements, functional foods, medicinal foods, and pharmaceuticals. Though classified as food products, nutraceuticals also serve significant medical purposes. These specially designed products, derived from various food sources, are rich in bioactive compounds, providing notable nutritional, health, and medicinal benefits. Nutraceuticals are intended to complement a regular diet, supplying additional nutrients that enhance overall health and well-being. They are instrumental in improving health, preventing chronic diseases, extending life expectancy, and supporting both physical and mental wellness. Scientific studies affirm their positive effects on conditions such as cardiovascular disease, hypertension, diabetes, inflammation, and cancer.

Key Categories of Nutraceuticals:

Vitamins and Minerals: Essential for daily bodily functions, these nutrients are often added to foods to enhance nutritional value and boost immunity. Sources can be plant-based, animal-based, or microbial. Probiotics: Beneficial microorganisms that support digestive health and overall immune function. Proteins and Peptides: Important for muscle repair, immune support, and overall bodily functions. Omega Fatty Acids: Crucial for cardiovascular health and cognitive function. Others: Includes various other beneficial compounds such as antioxidants and herbal extracts.

Product Forms and Applications: Nutraceuticals are available in several forms, including capsules, tablets, soft gels, powders, liquids, and gummies. They find applications in: Functional Foods: Products designed to offer health benefits beyond basic nutrition.

Functional Beverages: Drinks fortified with nutrients for added health benefits. Dietary Supplements: Concentrated sources of nutrients or bioactive compounds. Personal Care Products: Items that enhance health and beauty.

There is a growing preference for transparency in ingredient sourcing and product efficacy. Consumers are increasingly seeking out products with clear, scientifically backed benefits and ethical sourcing practices. This trend is driving brands to focus on high-quality ingredients and sustainable production methods.

Global Nutraceutical Market Stats

The global nutraceuticals market was valued at approximately USD 636.2 billion in 2025 and is estimated to reach USD 683.8 billion in 2026. The market is projected to grow to approximately USD 1,151.5 billion by 2033, registering a CAGR of 7.7% during the period from 2026 to 2033. The industry is also witnessing increasing demand for products focused on immunity, digestive and gut health, weight management, cognitive health, healthy ageing and overall wellness. Growing adoption of personalized nutrition, clean-label products and functional food and beverage offerings is expected to further influence the evolution of the global nutraceutical market. The market is witnessing significant activity across North America, Europe and Asia-Pacific, with Asia-Pacific accounting for the largest share of the global nutraceutical market in 2025, while Europe is expected to register strong growth over the forecast period. Key product categories include vitamins, probiotics, botanicals and herbal supplements, functional foods, and functional beverages.The industry is also seeing a surge in online retail channels and innovations in product formulations and delivery methods.

Indian Nutraceutical Market Stats

The Indian nutraceutical market is witnessing robust growth, driven by increasing consumer awareness of health and wellness, a growing focus on preventive healthcare, rising disposable incomes and changing lifestyle patterns. The increasing prevalence of lifestyle-related health concerns is also contributing to demand for products that support overall wellness, immunity, nutrition and other specific health needs. Market Size: The India nutraceuticals market was estimated at approximately USD

38.77 billion in 2025 and is projected to reach USD 84.99 billion by 2033. Growth Rate: The market is projected to grow at a CAGR of 10.3% during 2026 2033. Key Product Segments: The industry comprises dietary supplements, functional foods and functional beverages. Functional foods and beverages accounted for the largest share of the market in 2025, reflecting increasing consumer preference for products offering health benefits beyond basic nutrition. Consumer Trends: Growth is being supported by rising health consciousness, increasing adoption of preventive healthcare practices, urbanisation, changing lifestyles and growing demand for products supporting immunity, weight management, digestive health and overall wellness. Consumers are also showing an increasing preference for natural, plant-based, clean-label and Ayurveda-inspired products. Popular Categories: Key categories include vitamins and minerals, protein and nutritional supplements, probiotics, botanicals and herbal supplements, and functional food and beverage products. Distribution Channels: The market is served through pharmacies, supermarkets and hypermarkets, specialty stores and online platforms. The increasing penetration of e-commerce and digital health and wellness platforms is expanding product accessibility and consumer reach. Regulatory Framework: In India, health supplements and nutraceuticals are regulated by the Food Safety and Standards Authority of India (FSSAI) under the Food Safety and Standards (Health Supplements, Nutraceuticals, Food for Special Dietary Use, Food for Special Medical Purpose, Functional Food, and Novel Food) Regulations, 2016. The framework covers categories including health supplements, nutraceuticals, probiotic foods, prebiotic foods and novel foods. The Indian nutraceutical market has been experiencing significant growth, reflecting a rising The markets expansion is fueled by a growing middle class, increasing urbanization, and heightened focus on preventive healthcare.

Rise of Preventive Healthcare:

Preventive healthcare continues to gain prominence as consumers increasingly adopt a proactive approach towards maintaining overall health and well-being. Growing awareness of nutrition, immunity and healthy lifestyles is driving demand for nutraceuticals, dietary supplements and functional foods, particularly products supporting immunity, digestive health, healthy ageing and overall wellness. This shift towards preventive and nutrition-based healthcare is expected to continue supporting the growth of the nutraceutical sector.

Current Trends and Future Outlook:

The Indian nutraceutical industry continues to evolve, driven by growing health consciousness, increasing adoption of preventive healthcare and rising demand for functional foods, dietary supplements and wellness products. Key emerging trends include personalised nutrition, clean-label and natural products, Ayurveda-inspired formulations, probiotics and gut health solutions, and innovative product formats. The rapid expansion of e-commerce and digital channels is also improving product accessibility and enabling greater consumer engagement. Going forward, continued focus on product quality, scientific validation, transparent labelling and regulatory compliance is expected to support sustainable growth and innovation in the sector.

Measure to Attract Investors & Entrepreneurs:

The continued growth of Indias nutraceutical sector presents significant opportunities for investment and entrepreneurship. A supportive ecosystem comprising innovation-led policies, efficient regulatory processes, robust research and manufacturing infrastructure, access to funding and greater consumer awareness can further strengthen the sector. Key measures that may support its development include:

Support for Research and Innovation: Encouraging investment in research and development, product innovation and scientific validation can facilitate the development of differentiated and high-quality nutraceutical products. Efficient Regulatory Framework: Streamlined and transparent regulatory processes, while maintaining appropriate standards for product safety, quality and labelling, can help facilitate innovation and market entry. Strengthening Infrastructure: Continued development of research facilities, testing laboratories, quality-control systems and advanced manufacturing capabilities can enhance the competitiveness of the sector. Public Private Collaboration: Greater collaboration among government bodies, research institutions, industry participants and academic institutions can promote innovation, knowledge sharing and product development. Consumer Awareness: Increased awareness regarding nutrition, preventive healthcare and responsible consumption can support informed consumer choices and contribute to sustainable market growth. Export and Global Market Opportunities: Strengthening manufacturing capabilities, quality standards and international market access can create opportunities for Indian nutraceutical companies to expand their global footprint.

Support for Start-ups and Entrepreneurs: Improved access to funding, incubation, mentorship and innovation platforms can encourage entrepreneurs to develop new products and technologies within the health and wellness ecosystem.

Alignment with International Standards: Continued focus on globally recognised quality, safety and manufacturing standards can improve consumer confidence and enhance the competitiveness of Indian products in international markets. Overall, the increasing focus on preventive healthcare, wellness, personalised nutrition, natural products and digital commerce is expected to create a favourable environment for innovation and investment. A combination of supportive policies, strong regulatory standards, scientific research and expanding consumer demand is likely to support the long-term growth and development of Indias nutraceutical industry.

Initiatives, Business Developments and Outlook

During FY 2025 26, Deccan Health Care Limited ("DHCL" or "the Company") continued to strengthen its position as an innovation-led healthcare and wellness company, with a strategic focus on nutraceuticals, functional foods, preventive nutrition, consumer wellness and emerging lifestyle categories. The Company remained focused on product innovation, market development, strengthening consumer access and building capabilities to support sustainable growth across domestic and international markets.

Digital and Online Expansion

The Company continued to leverage the growth of e-commerce and digital consumer engagement to expand the reach and accessibility of its products. Digital channels have provided the Company with opportunities to enhance product visibility, engage directly with consumers and respond to evolving consumer preferences in the health and wellness segment.

During the year, the Company continued to strengthen its online presence alongside its traditional distribution channels, with an emphasis on consumer convenience, wider market access and improved product discoverability.

Diversification into Emerging Health and Wellness Categories

During FY 2025 26, the Company continued to diversify its portfolio beyond its traditional nutraceutical offerings into adjacent health and wellness categories.

The Company expanded its focus across nutraceuticals, functional foods, personal care, self-care, weight wellness, lifestyle nutrition and other consumer health categories. This diversification reflects the Companys strategy of responding to evolving consumer preferences and the increasing relevance of preventive, convenient and science-led wellness solutions.

The launch and market development of the Weight Wellness and Lifestyle portfolio in December 2025 represented an important step in this direction. The category gained market traction during the year and formed part of the Companys expanding wellness portfolio.

The Company intends to continue developing this segment through product innovation, consumer engagement and market expansion, subject to prevailing market conditions and commercial viability.

Product Innovation and Research-led Development

Innovation continued to remain an important component of the Companys growth strategy. During FY 2025 26, the Company continued to develop, reformulate and commercialise products across multiple dosage forms and wellness categories, including functional foods, fruit bars, gummies, powders, tablets, capsules and other consumer-friendly formats.

The Companys product development approach focuses on combining nutritional and ingredient expertise with consumer convenience, taste, quality, safety and differentiated delivery formats.

The Company also continued to strengthen its product development pipeline across areas including weight wellness, functional nutrition, hydration and active-lifestyle nutrition.

The Company remains committed to responsible product development and to ensuring that product claims and communications are supported by appropriate scientific, technical and regulatory substantiation.

Expansion of Retail and Consumer Access

As part of its strategy to strengthen consumer engagement and physical market presence, the Company initiated the development of its exclusive Wellness Mart retail network.

The Company established Wellness Marts, creating an additional channel for consumer engagement and providing a platform for showcasing the Companys expanding wellness portfolio.

The initiative is intended to complement the Companys existing distribution and digital channels and to strengthen its presence across selected markets.

The Company proposes to further develop this retail network during FY 2026 27, subject to market conditions, consumer response and commercial viability.

Expansion into Hydration and Sports Nutrition

During FY 2025 26, the Company initiated its expansion into the Hydration and Sports Nutrition categories as part of its broader wellness strategy.

The Company commenced development of a dedicated hydration product pipeline focused on convenient nutrition and hydration solutions for everyday activity and active lifestyles. The Company also initiated its entry into sports nutrition to address the requirements of consumers seeking products supporting active and performance-oriented lifestyles.

The products are being developed with emphasis on consumer convenience, appropriate formulation, ease of consumption and suitability for relevant usage occasions.

The Company is also evaluating opportunities for strategic partnerships and market development in these emerging categories. The timing and scale of commercialization will depend on product development, regulatory requirements, market conditions and consumer response.

Expansion into New Geographies and International Markets

The Company continued to pursue opportunities to expand its presence across domestic and international markets during FY 2025 26.

During the year, the Company progressed its international expansion strategy through regulatory registrations and market-development initiatives. The UAE product registration process was successfully completed during the year, representing an important milestone in the Companys internationalization programme.

The Company is progressing towards commencement of its first export consignment during FY 2026 27, subject to completion of applicable regulatory, commercial, logistical and other requirements.

The Company continues to evaluate opportunities in the GCC and other international markets, while strengthening its regulatory, product registration, distribution and market-entry capabilities.

Key Business and Strategic Highlights of FY 2025 26

Advancing Food-based Nutrition Solutions

Food-based nutrition continued to form an important part of the Companys product innovation strategy.

The Companys Natural Iron Fruit Bar initiative represents its efforts to develop a convenient food-based format intended to support iron intake, particularly among population groups vulnerable to nutritional deficiencies. The initiative has been pursued through collaborations with community organisations, institutional partners and other stakeholders and is aligned with the broader objective of improving nutritional awareness and supporting efforts to address iron deficiency.

The Company continues to explore opportunities to integrate food-based nutrition solutions into appropriate community, institutional, CSR and public-health-oriented programmes.

The Natural Iron Fruit Bar has also been the subject of formal clinical research. An AIIMS New Delhi research project titled "A cluster-randomized, double-blind study to evaluate the efficacy of the Natural Iron Fruit Bar for anemia prophylaxis in school-going adolescents in North India" is listed among completed AIIMS research projects.

The Company will continue to build upon the scientific evidence generated through research and field initiatives, while maintaining appropriate scientific, regulatory and compliance standards in relation to product development and communication.

Collaborative Support and Community Impact

The Companys nutrition and community-oriented initiatives have been supported through collaborations with NGOs, CSR partners, community organisations, institutional stakeholders and other participants.

The Company believes that sustainable nutrition and wellness solutions can benefit from collaboration across the private, public and social sectors. Such partnerships can support product deployment, community outreach, awareness, distribution and monitoring.

The Companys food-based nutrition initiatives are aligned with the broader national focus on improving nutritional outcomes and addressing micronutrient deficiencies, including the objectives of the Government of Indias Anemia Mukt Bharat programme.

The Company intends to continue exploring responsible collaborations that can support nutrition awareness and access to appropriate food-based nutrition solutions across schools, communities, institutions and other relevant channels.

Weight Wellness and Lifestyle Nutrition

A significant development during FY 2025 26 was the Companys increased focus on Weight Wellness and Lifestyle Nutrition.

The portfolio, launched in December 2025, was developed in response to increasing consumer interest in healthy weight management and everyday wellness. The category gained market traction during the year and formed part of the Companys broader strategy to build a diversified wellness portfolio.

The Company intends to further develop this portfolio through continued product innovation, consumer education and expansion across selected domestic markets, subject to market conditions and commercial viability.

Building a Broader Health and Wellness Portfolio

During FY 2025 26, the Company continued its transition towards a more diversified health, nutrition and wellness platform.

The Companys expanding portfolio encompasses:

Nutraceuticals and dietary supplements; Functional foods; Fruit bars and other nutrition formats; Consumer-friendly delivery formats; Weight wellness and lifestyle nutrition; Personal care and self-care; Hydration solutions; and Sports and active-lifestyle nutrition.

This diversification is intended to create a broader platform for growth while enabling the Company to respond to evolving consumer requirements across different health and lifestyle needs.

Strengthening Manufacturing, Product Development and Market Readiness

Alongside product and market expansion, the Company continued to focus on strengthening its manufacturing, product development, regulatory and packaging capabilities.

The Companys objective is to develop scalable capabilities that can support domestic market requirements and future international business, while maintaining appropriate quality, safety and regulatory standards.

The Companys international expansion programme is also being supported through product registrations and market-specific regulatory preparation, thereby establishing the necessary foundation for future export opportunities.

Outlook

The Company enters FY 2026 27 with a broader product portfolio, expanding consumer channels and an increasingly diversified health and wellness strategy.

The Companys priorities for the year ahead include:

Further developing and scaling the Wellness Mart retail network, subject to market conditions and commercial viability; Strengthening the Weight Wellness and Lifestyle portfolio through continued product development and market expansion; Progressing the Hydration and Sports Nutrition portfolio towards commercialisation; Expanding domestic distribution and market presence across selected channels and geographies; Progressing international market-entry initiatives and export opportunities, subject to applicable regulatory, commercial and logistical requirements;

Continuing investment in product innovation, research and development and regulatory capabilities; and Exploring strategic partnerships that may support market access, product development and consumer reach.

The Companys ability to achieve these objectives will depend on, among other factors, prevailing economic and market conditions, consumer demand, competitive dynamics, regulatory developments, availability and cost of raw materials, supply-chain conditions and the successful execution of its business strategy.

Deccan Health Care remains committed to creating sustainable long-term value through innovation, disciplined execution, consumer-centric product development and responsible expansion. The Company will continue to leverage its capabilities in nutraceuticals, nutrition and wellness to build a diversified portfolio that responds to evolving consumer needs across India and selected international markets.

Forward-Looking Statements

This Management Discussion and Analysis may contain certain statements relating to the Companys future business plans, strategies, objectives, expectations and prospects that are forward-looking in nature. Such statements are based on the Companys current expectations, assumptions, estimates and available information and are subject to various risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements.

These factors may include, among others, changes in economic and market conditions, consumer demand, competition, regulatory and policy developments, availability and cost of raw materials, supply-chain conditions, technological developments, foreign exchange movements, market acceptance of products, the Companys ability to execute its business plans, and other risks and uncertainties applicable to the Companys business and the markets in which it operates.

The Company assumes no obligation to publicly update, revise or modify any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws and regulations. Accordingly, readers are advised not to place undue reliance on such forward-looking statements.

Financial Performance of the Company:

The summarized financial highlights of the Company for the year ended 31 March 2025 vis-a-vis the previous year are as follows: Rs. (in Lakhs)

	Standalone		Consolidated
Particulars	FY 2025-26	FY 2024-25	FY 2025-26	FY 2024-25
Revenue from Operations	8917.10	7513.19	8190.48	7505.79
Other Income	0.87	0.57	0.87	0.57
Total Revenue	8917.97	7513.76	8191.35	7506.36
Cost of Material Consumed	6292.45	4096.37	5265.76	4088.97
Changes in Inventories of Finished	(227.54)	660.78	(227.54)	660.78
Goods and Work-in-Progress
Employee Benefit Expenses	524.53	434.82	533.77	444.21
Other Expenses	1839.98	2002.22	2109.80	1996.70
Finance Cost	36.61	7.39	36.63	7.42
Depreciation and Amortization	146.36	145.26	146.36	145.26
Expenses
Total Expenses	8612.39	7346.84	7864.78	7343.34
Profit / (Loss) Before Tax	305.58	166.92	326.57	163.02
Tax Expenses:
Provision for Income Tax	88.54	57.01	89.81	57.01
Less: MAT Credit Entitlement	-	-	-	-
Deferred Tax	(12.00)	(9.88)	(12.00)	(9.86)
Profit / (Loss) after Tax	229.04	119.79	248.76	115.87
Earnings Per Share:
Basic	0.93	0.56	1.01	0.54
Diluted	0.93	0.47	1.01	0.45

Note:

1. Previous year figures have been regrouped / re-arranged wherever necessary.

2. These audited standalone & consolidated financial results for the year ended 31 March 2026 is the first annual Audited standalone & consolidated financial results after adoption of Indian Accounting Standards ("Ind AS"). Consequently, the standalone & consolidated financial results for all the periods presented have been prepared in accordance with the recognition and measurement principles as stated therein.

Discussion on Financial Performance with respect to the Operational Performance:

On a Standalone basis, Revenue has grown by approximately 18.69% for the year ended 31^st March 2026, standing at 8,917.10 Lakhs compared to 7,513.19 Lakhs in the corresponding period last year

The Company delivered a strong improvement in profitability during the period, with Profit After Tax (PAT) increasing by 91.21% to 229.05 Lakhs, compared to 119.79 Lakhs in the corresponding period of the previous year. Basic Earnings Per Share (EPS) also increased by 66.01%, from 0.56 to 0.93, reflecting improved earnings performance.

On a Consolidated basis, Revenue from Operations has grown by approximately 9.12% for the year ended 31st March 2026, standing at 8,190.48 Lakhs compared to 7,505.79 Lakhs in the corresponding period last year.

Profit After Tax reflects a growth of approximately 114.69%, increasing to 248.76 Lakhs from

Threats and key challenges faced by Nutraceutical segment in India:

The Indian nutraceutical industry continues to offer significant growth opportunities; however, it also faces certain challenges that may impact the pace and sustainability of market development. Key challenges include: Regulatory Compliance: The nutraceutical sector operates within a detailed regulatory framework administered by FSSAI. Ensuring compliance with evolving requirements relating to product composition, claims, labelling, safety and quality remains an important consideration for industry participants. Product Quality and Consumer Trust: Maintaining consistent quality, safety and efficacy of products is critical for building consumer confidence. The presence of substandard, mislabelled or counterfeit products in the market can adversely affect consumer trust and the reputation of legitimate manufacturers. Affordability and Accessibility: The relatively higher cost of certain nutraceutical products and specialised formulations may limit their accessibility across different consumer segments. Balancing product quality and innovation with competitive pricing remains an important challenge. Consumer Awareness: Despite increasing health consciousness, awareness regarding the appropriate use, benefits and limitations of nutraceutical products remains uneven. Greater consumer education and transparent communication are important for promoting informed and responsible consumption. Quality of Raw Materials: Consistent availability and quality of raw materials, including botanical ingredients, vitamins, minerals and other specialised ingredients, are essential for maintaining product quality. Variations in availability, quality and input costs may affect manufacturing and margins.

Market Competition and Fragmentation: The industry comprises established companies as well as numerous emerging and regional players, resulting in an increasingly competitive marketplace. Differentiation through product quality, innovation, scientific research, brand credibility and distribution reach is therefore becoming increasingly important. Supply Chain and Operational Risks: Dependence on specialised ingredients, changing input costs, logistics and supply-chain disruptions may affect production schedules, inventory management and product availability. Geopolitical and Supply Chain Risks: The ongoing geopolitical tensions and disruption may have an indirect impact on the nutraceutical industry through higher freight, energy and raw-material costs, as well as potential delays in international supply chains. The sectors dependence on certain imported ingredients, specialised raw materials and packaging materials may expose manufacturers to higher procurement costs and extended lead times. Rising energy and logistics costs may also increase manufacturing and distribution expenses. Prolonged disruption could therefore place pressure on margins and inventory planning, although the extent of the impact would depend on the Companys sourcing mix, inventory levels and ability to diversify suppliers and logistics routes. Similar supply-chain and cost pressures are already being reported across Indias healthcare and pharmaceutical sectors. Overall, sustained growth of the nutraceutical sector will depend on continued emphasis on regulatory compliance, scientific research, quality assurance, consumer education, innovation and efficient supply-chain management. Companies with strong quality systems, established sourcing capabilities, differentiated products and a consumer-centric approach are better positioned to navigate these challenges and participate in the sectors long-term growth.

Outlook and Future Trends:

The Indian nutraceutical industry continues to demonstrate strong growth potential, driven by increasing health consciousness, rising awareness of preventive healthcare and a growing preference for nutrition-based wellness solutions. Consumers are increasingly seeking dietary supplements, functional foods and beverages, herbal and plant-based products, and other health-oriented offerings that support overall well-being.

The industry is also witnessing evolving consumer preferences towards clean-label products, personalised nutrition, immunity and gut-health solutions, healthy ageing and innovative delivery formats. The expansion of e-commerce and digital platforms is further improving product accessibility and enabling companies to reach a wider consumer base.Going forward, continued emphasis on scientific research, product innovation, quality assurance and regulatory compliance is expected to support the sustainable growth of the sector. With the growing acceptance of the philosophy that prevention and wellness are integral to long-term health, the Indian nutraceutical industry is well positioned to strengthen its presence within the broader global health and wellness ecosystem.

Factors Driving the Growth of the Nutraceutical Industry in India

Changing Lifestyles and Rising Health Awareness

Changing lifestyles, increasing health consciousness and greater awareness of the importance of nutrition and overall well-being are driving demand for nutraceutical products in India. Consumers are increasingly adopting a proactive approach towards health and are seeking products that support immunity, fitness, digestive health, healthy ageing and overall wellness. The growing preference for preventive healthcare and nutrition-based solutions continues to support the expansion of the sector.

Supportive Regulatory Framework

The regulatory framework for nutraceuticals in India, administered by the Food Safety and Standards Authority of India (FSSAI), provides standards relating to the safety, quality, labelling and manufacture of health supplements and nutraceutical products. Continued emphasis on regulatory compliance and quality standards is expected to enhance consumer confidence and support the sustainable development of the industry.

Research, Innovation and Product Development

Advancements in scientific research and technology are contributing to the development of innovative nutraceutical formulations and delivery formats. Companies are increasingly focusing on research and development to introduce products with improved convenience, functionality and consumer appeal. Innovation across areas such as probiotics, plant-based ingredients, herbal formulations and specialised nutritional solutions is expected to create new growth opportunities.

Personalised Nutrition and Consumer-Centric Products

Personalised nutrition is emerging as an important trend as consumers increasingly seek products tailored to their specific health and wellness requirements. Growing awareness of individual nutritional needs, combined with advancements in technology and data-driven consumer insights, is encouraging the development of more targeted and customised nutritional solutions.

Growth of Digital and E-commerce Channels

The rapid expansion of e-commerce and digital platforms has improved access to nutraceutical products and enabled companies to reach a wider consumer base. Digital channels are also playing an increasingly important role in consumer education, product discovery and direct engagement, contributing to the continued growth of the nutraceutical market.

Future prospects of the nutraceutical industry in India

Growing Demand from an Ageing Population

Indias evolving demographic profile and increasing focus on healthy ageing are expected to create opportunities for nutraceutical products catering to specific wellness needs. Demand is likely to grow for products supporting bone and joint health, cognitive wellness, immunity, heart health and overall healthy ageing. Product Innovation and Diversification

The industry is expected to witness continued innovation and diversification across product categories and delivery formats. Growing consumer preference for natural, plant-based, clean-label and scientifically supported products is likely to encourage the development of differentiated formulations. Emerging formats such as gummies, powders, functional beverages and convenient nutrition solutions are also expected to gain wider acceptance.

Integration of Traditional Knowledge and Modern Science

Indias strong heritage in Ayurveda and traditional wellness practices provides opportunities for the development of innovative nutraceutical products incorporating botanical and herbal ingredients. The integration of traditional knowledge with modern research, scientific validation and quality standards may support the development of products that are relevant to both domestic and international consumers.

Global Market Opportunities

Indian nutraceutical manufacturers have significant opportunities to expand their presence in international markets, supported by the countrys manufacturing capabilities and expertise in pharmaceuticals, herbal products and nutritional formulations. Increasing focus on quality, regulatory compliance and internationally recognised manufacturing standards will be important in strengthening Indias competitiveness in the global nutraceutical market.

Risks and Concerns

While the nutraceutical industry offers significant growth opportunities, it is also exposed to risks relating to regulatory compliance, product quality, competition, changing consumer preferences, raw-material availability and costs, and supply-chain disruptions. The Company seeks to manage such risks through an established risk management framework involving the identification, assessment and monitoring of key risks, along with the implementation of appropriate mitigation measures and internal controls. While risks cannot be eliminated entirely, continuous monitoring and timely mitigation efforts are undertaken to minimise their potential impact on the Companys operations and performance.

Internal Control Systems and Their Adequacy

The Company has established adequate internal control systems commensurate with the nature, size and complexity of its business operations. These systems are designed to provide reasonable assurance regarding the orderly and efficient conduct of business, safeguarding of assets, reliability of financial and operational information, compliance with applicable laws and regulations, and adherence to established policies and procedures.

The Company also has an appropriate internal audit mechanism to periodically review the adequacy and effectiveness of internal controls and processes. The internal audit function evaluates key operational and financial areas, identifies potential gaps and recommends suitable corrective measures, wherever required.

The Companys operations and financial performance may be influenced by various internal and external factors, including the availability and cost of raw materials and traded goods, competitive market conditions, efficiency of distribution channels, brand reputation, changes in interest rates, economic and demographic conditions, and evolving regulatory requirements.

The Company remains committed to continuously strengthening its internal control and risk management framework. Regular monitoring, review and improvement of internal processes are undertaken to support effective risk mitigation, operational efficiency and the achievement of the Companys strategic and business objectives.

Material Development in Human Resources/Industrial Relations:

The Company considers its employees to be its most valuable assets and an integral part of its continued growth and success. The commitment, capabilities and dedication of its people remain important contributors to the Companys performance and long-term objectives.

The Company continues to focus on learning, development and capability building, with initiatives aimed at enhancing the knowledge, skills and competencies of employees and enabling them to perform effectively in their respective roles.

The Company follows a philosophy of continuous improvement in its people practices and processes, taking into consideration employee feedback, stakeholder inputs, past experiences and evolving industry practices. The Company continues to strengthen its systems and processes across key areas including recruitment and selection, employee engagement, leave and attendance management and other employee-related practices, with the objective of creating a positive and productive work environment.

The Company is committed to fostering a diverse, inclusive and merit-based workplace, providing equal opportunities for growth and development while attracting and retaining talent aligned with the Companys values and business objectives. The Company will continue to invest in its people and create an environment that encourages collaboration, learning, innovation and sustained performance.

Significant changes (i.e. change of 25% or more as compared to the immediately previous financial years) in Key Financial Ratios, along with explanation are as under:

Ratios	FY 25-26	FY 24-25	Reason for variance More than 25 %
Inventory turnover ratio	1.59	1.17	The Inventory Turnover Ratio improved from 1.17 times to 1.59 times owing to higher cost of goods sold while average inventory remained largely stable.
Current ratio	4.26	7.24	The Current Ratio declined from 7.24 times to 4.26 times primarily due to a higher increase in current liabilities as compared to current assets.
Operating Profit Margin (%)	4.49	2.55	The Operating Profit Margin improved from 2.55% to 4.49% due to growth in operating profit at a higher rate than revenue from operations.
Net Profit Margin (%)	2.57	1.59	The Net Profit Ratio improved from 1.59% to 2.57% as net profit grew at a higher rate than revenue from operations.
Return on Net worth (%)	2.08	1.12	The Return on Net Worth increased from 1.12% to 2.08% primarily on account of higher growth in profit after tax compared to the increase in net worth.
Debt Equity Ratio	0.04	0.01	The Debt-Equity Ratio increased from 0.01 times to 0.04 times on account of higher borrowings during the year, despite an increase in shareholders equity.

 

Return on Capital Employed

3.03

1.18

The Return on Capital Employed increased from 1.18% to 3.03% driven by a significant improvement in EBIT relative to the increase in capital employed

Cautionary Statement:

Statements in this Management Discussion and Analysis contains "Forward Looking Statements" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Companys future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, several risks, uncertainties, and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. The Company undertakes no obligation to publicly revise any forward- looking statements to reflect future/ likely events or circumstances.

References:

www.biovoicenews.com

https://timesofindia.indiatimes.com/

https://www.foodprocessingindia.gov.in/newsletter/emailer/two

https://www.grandviewresearch.com/industry-analysis/nutraceuticals-market www.chatgpt.com