Everest Organics Ltd Management Discussions

The information is required in compliance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forms a part of the Boards Report for the year ended March 31, 2026 and has to be read in conjunction with the Companys financial statements, which follows this Section. The management of the Company is presenting herein the overview, opportunities and threats, initiatives by the Company and overall strategy of the Company and its outlook for the future. This outlook is based on managements own assessment and it may vary due to future economic and other future developments in the country.

India continues to be regarded as one of the most dynamic and resilient economies globally, with its growth anchored in strong domestic demand, robust policy support, and a steady revival of investment activity. Rising disposable incomes and expanding consumption patterns have enabled the country to withstand global economic headwinds and maintain confidence across industries. This resilience underscores the structural strengths of the Indian economy, which is increasingly being recognized as a reliable engine of global growth.

As per the Provisional Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI), Indias real GDP grew by approximately 7.7% in FY 2025-26, higher than the 7.1% growth recorded in FY 2024-25, led by strong momentum in manufacturing (10.7%) and services, particularly trade, transport and communication-related activities. Nominal GDP growth for the year stood at around 8.9%. This continued acceleration reaffirms Indias position as the fastest-growing major economy in the world.

The positive momentum can also be observed in the consistent rise of indirect tax collections, particularly through the Goods and Services Tax framework, which reflects the expanding formalization of the economy and the strengthening of its fiscal position. Alongside this, business sentiment continues to remain optimistic, supported by healthy corporate performance, access to credit, and a supportive policy environment. The governments initiatives in areas such as banking sector reforms, improved taxation systems, and the emphasis on both physical and digital infrastructure are creating a more conducive environment for investment and entrepreneurship.

While the major metropolitan centers continue to retain their strategic importance, Indias growth story is steadily becoming more geographically diversified, with a new wave of development being witnessed across tier 2 and tier 3 cities. Infrastructure development remains at the core of this transformation, with significant progress in expanding highways, expressways, ports, airports, and railway networks, strengthening supply chains and enabling businesses to reach wider markets.

Indias demographic advantage, with a young and aspirational population, continues to drive consumption, innovation, and productivity. Looking ahead, Indias economic prospects remain firmly positive, with strong domestic demand, policy continuity, and an expanding role in global trade and investment flows expected to consolidate its place as a leading player in the world economy.

The Indian pharmaceutical industry continues to hold the 3rd largest position in the world by volume. Domestic formulations account for nearly 50% of the Indian Pharmaceutical Industry.

India remains the largest provider of generic drugs globally and is well known for its affordable vaccines and generic medications. The industry has evolved into a thriving sector and has been growing at a CAGR of over 10% in recent years. Key segments of the Indian pharma industry include generic drugs, over-the-counter medications, bulk drugs, vaccines, contract research & manufacturing, biosimilars, and biologics. India also has the highest number of pharmaceutical manufacturing facilities compliant with the US Food and Drug Administration (USFDA) and manufactures over 500 different APIs, accounting for a significant share of the global API market.

The pharmaceutical sector in India ranks third in the world in terms of production volume, contributing meaningfully to the nations GDP. Having transformed into a vibrant and resilient industry, it continues to play a vital role in ensuring affordable healthcare globally.

During FY 2025-26, the Indian economy remained the fastest-growing major economy globally, recording a real GDP growth of approximately 7.7% (Provisional Estimates, MoSPI), driven by robust manufacturing and services sector performance and strong domestic demand. Rising disposable income and higher healthcare awareness continue to fuel growth in the pharmaceutical sector, further insulating the economy from global headwinds.

Indias pharmaceutical exports crossed US31billioninFY2025-26,upfromapproximatelyUS31billioninFY2025-26,upfromapproximatelyUS 30.5 billion in FY 2024-25 (Economic Survey 2025-26; Department of Commerce), and the Indian pharmaceutical market is projected to grow at a CAGR of over 10% to touch US$ 130 billion by 2030, supported by innovation and the growing demand for new-age therapies.

Your Company continues to operate in the chemical industry, primarily engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs) and intermediates. FY 2025-26 was a year of strong recovery for the Company, with revenue growth of over 23% and a return to net profitability after recording a net loss in the previous year. The Board has, from time to time, evaluated opportunities for diversification into new areas that may offer profitable growth. Going forward, your Directors expect improved industrial development and growth prospects in the coming years.

The Indian pharmaceutical industry continued to demonstrate strong growth and resilience during FY 2025-26, reaffirming its vital role in the global healthcare ecosystem. The industry, currently valued at approximately US55-60billion,isprojectedtoreachnearlyUS55-60billion,isprojectedtoreachnearlyUS 130 billion by 2030, consolidating Indias leadership in affordable medicine supply. Exports crossed US31billioninFY2025-26(upfromUS31billioninFY2025-26(upfromUS 30.5 billion in FY 2024-25), meeting a significant share of global generic demand and positioning India as the largest supplier of cost-effective, high-quality generics.

India has also emerged as a leading biotechnology hub, ranking among the worlds top biotechnology destinations. With diverse segments spanning biopharmaceuticals, bio-services, bio-agriculture, bioindustry, and bioinformatics, biotechnology has become a critical driver of innovation in new therapies, vaccines, and sustainable solutions.

The biosimilars market continues to witness rapid expansion, supported by cost-efficient manufacturing, strong scientific talent, and regulatory alignment with global standards. The medical devices sector is another high-growth area, targeted to expand from approximately Rs. 1,02,564 crore (US12billion)inFY2023-24toaroundRs.4,27,350crore(US12billion)inFY2023-24toaroundRs.4,27,350crore(US 50 billion) by 2030, supported by rising healthcare infrastructure, government initiatives like "Make in India," and wider technology adoption.

India also maintains a strong presence in regulated international markets such as the US and Europe, hosting the largest number of USFDA-approved manufacturing plants outside the US. On the domestic front, the pharmaceutical market is expected to expand further to approximately US$ 120-130 billion by 2030, supported by rising healthcare spending, insurance penetration, higher disposable incomes, an ageing population, and increased prevalence of chronic diseases.

Looking ahead, the industry is expected to grow at 10-12% annually in the medium term, driven by domestic demand, strong export potential, growing biosimilars adoption, rising R&D investments, and innovation in value-added services. Government support, including the Production-Linked Incentive (PLI) scheme, the recently announced Biopharma SHAKTI initiative, and healthcare infrastructure initiatives, will further accelerate sectoral growth.

The global Active Pharmaceutical Ingredient (API) sector continued to expand steadily in FY 2025-26, reaffirming its role as the foundation of the pharmaceutical industry. The global API market is projected to grow at a CAGR of approximately 5.6% between 2023 and 2028, highlighting the rising reliance on APIs across therapeutic areas and structural changes in manufacturing and supply chains.

API manufacturing typically occurs in two key stages - first, raw materials are converted into APIs through chemical synthesis or biotechnological processes; second, these APIs are combined with excipients to produce dosage forms such as tablets, capsules, injectables, or solutions. APIs are either sold in the merchant market to other pharma companies or used internally for captive consumption.

The competitive landscape of the API market is both broad and fragmented, with multinational firms, mid-sized companies, and specialized producers competing on cost, compliance, and therapeutic focus. Over the years, API production has shifted from North America and Europe towards Asia, particularly India and China, owing to cost advantages, skilled manpower, and supportive regulatory regimes.

Demand for APIs remains robust and diversified, driven by patent expiries on blockbuster drugs, growth of biological drugs and biosimilars, an ageing global population, and rising lifestyle-related diseases such as obesity, diabetes, and hypertension. Large multinational drugmakers are increasingly outsourcing API production to specialized players in India and China to lower costs and enhance efficiency.

Looking forward, technological advancements, such as continuous manufacturing, green chemistry, process intensification, and biotechnological innovations, are expected to make production more sustainable, efficient, and cost-competitive. In summary, the outlook for the global API industry remains highly positive, though manufacturers must continue to navigate compliance requirements, environmental considerations, and competitive intensity.

Up to 100% FDI is allowed through the automatic route for Greenfield pharmaceuticals projects. For Brownfield pharmaceuticals projects, FDI allowed is up to 74% through the automatic route and beyond that through government approval. The Drugs & Pharmaceuticals sector received cumulative FDI equity inflow of approximately Rs. 2,10,940 crore (US24.62billion)duringtheperiodApril2000toJune2025(source:IBEF/DPIIT).IndiasoverallFDIequityinflowsreachedapproximatelyUS24.62billion)duringtheperiodApril2000toJune2025(source:IBEF/DPIIT).IndiasoverallFDIequityinflowsreachedapproximatelyUS 58.85 billion in FY 2025-26, an increase of about 18% over FY 2024-25, with rising investments in manufacturing-oriented sectors including automobiles and pharmaceuticals reflecting growing investor confidence in Indias industrial and supply-chain capabilities (source: DPIIT, June 2026). Indias pharmaceutical exports crossed US31billioninFY2025-26(provisionallyaroundUS31billioninFY2025-26(provisionallyaroundUS 31.11 billion, equivalent to approximately 2,75,078 crore), registering growth of about 2.1% over FY 2024-25 (US30.5billion),reaffirmingIndiaspositionasaglobalsupplierofaffordablemedicines,notwithstandingaslowdowninexportsduringthefinalquarteroftheyear(sources:EconomicSurvey2025-26;DepartmentofCommerceAnnualReport2025-26;Pharmexcil).TheMedicalDeviceindustryistargetedtoreachUS30.5billion),reaffirmingIndiaspositionasaglobalsupplierofaffordablemedicines,notwithstandingaslowdowninexportsduringthefinalquarteroftheyear(sources:EconomicSurvey2025-26;DepartmentofCommerceAnnualReport2025-26;Pharmexcil).TheMedicalDeviceindustryistargetedtoreachUS 50 billion by 2030, up from approximately US$ 12 billion in FY 2023-24. The Department of Pharmaceuticals rolled out the Biopharma SHAKTI initiative (outlay of Rs. 10,000 crore) in February 2026 to boost domestic biopharma capabilities, reduce import dependence and enhance R&D efficiency. Indian pharmaceutical companies are increasingly adopting AI in R&D to lower costs and shorten drug development timelines, strengthening productivity and global competitiveness.

As per the Union Budget 2025-26, the Department of Pharmaceuticals was allocated approximately Rs. 5,268 crore (US$ 602 million), an increase of about 28.8% over the previous years budget estimates, reflecting the Governments continued commitment to research-driven healthcare and affordable medicine access, modernisation of health infrastructure, and facilitation of large-scale digital health adoption.

Stronger emphasis continues to be placed on promoting domestic manufacturing of bulk drugs and critical APIs under the Production Linked Incentive (PLI) schemes, aimed at reducing Indias import dependency and achieving self-reliance in essential medicines. The Department of Pharmaceuticals has also approved the Scheme for Promotion of Research and Innovation in Pharma MedTech Sector (PRIP), running from 2023-24 to 2027-28, to strengthen academia-industry collaboration and incentivise R&D investment.

In February 2026, the Government announced the Biopharma SHAKTI initiative with an outlay of Rs. 10,000 crore to boost domestic biologics and biopharma manufacturing capabilities, reduce import dependence, and enhance R&D and clinical infrastructure, positioning India as a global innovation hub for pharmaceuticals and biotechnology.

Under the Ayushman Bharat Digital Mission (ABDM), coverage and adoption of ABHA (Ayushman Bharat Health Account) IDs has continued to accelerate, with significant integration across hospitals, diagnostics centres and pharmacies, aimed at establishing longitudinal electronic health records across the ecosystem.

The Department of Pharmaceuticals continues to strengthen the Umbrella Scheme for Development of the Pharma Industry, comprising assistance to Bulk Drug and Medical Device industries for Common Facilitation Centres, the Pharmaceutical Promotion and Development Scheme (PPDS), and the Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS).

The pharmaceutical industry in India continues to be a vital component of the countrys economic and social framework, contributing significantly to foreign trade while ensuring that millions worldwide have access to affordable generic medicines. Going forward, the outlook remains highly positive, with growth in domestic sales expected to be driven by companies ability to align portfolios with the rising demand for therapies targeting chronic diseases, and the governments continued thrust on universal healthcare, rural health programmes, preventive vaccines, and faster generic drug introductions.

The SWOT analysis of the industry reveals the position of the Indian pharmaceutical industry in respect of its internal and external environment for FY 2025-26.

Well-developed chemistry, R&D and manufacturing infrastructure with proven track record in advanced chemistry capabilities, design of high-tech manufacturing facilities and strong global regulatory compliance. Strong technical, finance and administrative expertise in the pharma industry along with a deep marketing and distribution network, enabling scale in both domestic and international markets. Higher GDP growth, rising middle class, and increasing urbanisation continue to support higher disposable income and positive attitude towards healthcare spending. Low-cost, highly skilled and English-speaking labour force with proven capabilities in process development and design of high-technology manufacturing devices. Healthy domestic market demand supported by rising per capita healthcare expenditure and growing demand for preventive and chronic therapies. Strong focus by the Government through initiatives like PLI schemes, digital health infrastructure, and the Ayushman Bharat Mission.

• Stringent price control and regulatory interventions under DPCO impacting profitability of pharma companies.
• Limited ability to compete with global MNCs for new drug discovery, clinical research and worldwide commercialisation of new molecules due to resource constraints.
• Infrastructure gaps, particularly in logistics, cold chain and power availability, remain a challenge in certain regions.
• Fragmented industry landscape with significant presence of unorganized players, leading to price competition and pressure on margins for organized players.

• Global demand for generics, biosimilars, and affordable vaccines continues to rise, creating significant export opportunities for Indian players.
• Growth of OTC and chronic therapy markets, with rising burden of non-communicable diseases (cardiac, diabetes, oncology, CNS).
• Increased penetration into Tier-II and Tier-III cities, supported by expanding healthcare infrastructure.
• India continues to be a preferred global outsourcing hub for formulations, APIs, clinical research and contract manufacturing.

• Intensified global competition and narrowing profit margins in generics and APIs, alongside increasing stringency of global quality audits and compliance requirements from USFDA, EMA and other regulators.
• Rising wage inflation, skill shortage in specialised areas and increasing cost of compliance.
• Competition from other low-cost manufacturing countries impacting outsourcing demand for Indian pharmaceutical exports.
• Entry of foreign players with advanced technology-driven products and biologics posing a challenge to domestic manufacturers.

The Company is seriously contemplating both forward and backward integration. The Company is actively pursuing assets that will add immediate value for forward integration in palletization in the near future, while also working towards backward integration into intermediates through strategic partnerships or greenfield projects.

The Company continues to maintain an adequate and effective system of internal controls during FY 2025-26, comprising well-defined authorization levels, supervision, checks and balances, and documented policy guidelines and manuals. These provide assurance that all transactions are properly authorized, accurately recorded, and correctly reported, while also ensuring compliance with internal policies, applicable laws, and statutory requirements.

Operational managers exercise control over critical business processes through robust operational systems, detailed procedural manuals, and financial limits of authority manuals, which are reviewed and updated periodically in line with evolving business requirements, industry best practices, and regulatory changes.

The Company places prime importance on a strong and effective internal audit framework. The Internal Control System is adequately supplemented by an independent internal audit function, periodic management reviews, and well-documented policies and procedures. The top management, along with the Audit Committee of the Board, regularly reviews the findings and recommendations of the Internal Auditor, and corrective and preventive actions are taken promptly to address identified risks and strengthen controls.

The pharmaceutical industry continues to face multi-dimensional challenges in FY 2025-26, particularly in safeguarding intellectual property, maintaining brand reputation, and meeting increasingly stringent compliance and regulatory requirements across global markets. Environmental impact remains a significant area of concern, as pharmaceutical products are highly valuable and extremely sensitive to environmental interactions.

Active Pharmaceutical Ingredients (APIs) continue to attract public and regulatory scrutiny due to the risk of their residues entering the natural environment during manufacturing, usage, or disposal. On the operational side, variable raw material costs and fluctuations in formulator inventory cycles continue to exert pressure on sales volumes of APIs, creating volatility in revenue generation for API-focused businesses.

Additionally, challenges such as global pricing pressures, tightening quality and regulatory requirements, fluctuations in foreign exchange rates, and increasing competition from low-cost manufacturing countries continue to add to the risk landscape of the pharmaceutical sector. The Company remains vigilant in monitoring these evolving risks and is consistently working towards mitigating their impact through strategic sourcing, diversification of suppliers, process efficiency measures, and enhanced compliance frameworks.

Everest Organics Limited has been engaged in the business of manufacturing Active Pharmaceutical Ingredients (APIs) and Intermediaries for nearly three decades, and during FY 2025-26 the Company continued to strengthen its operations and market presence.

The Company is currently operating at a capacity utilization level exceeding 80% to 90% for its existing product portfolio.

During FY 2025-26, the Company undertook capital expenditure of approximately 1.20 crore as against capex of about 3.70 crore in FY 2024-25, aimed at completing the new production block and further enhancing manufacturing capabilities.

Based on the audited revenue break-up for FY 2025-26, export sales (net of the IND AS 115 sales-return adjustment) of approximately 30.82 crore constituted around 15.7% of the Companys total revenue from operations of 196.10 crore for the year.

The Companys current client base and geographic footprint span 85 clients across 48 countries, with a target of 120 clients across 60+ countries within the next three years.

During the year under review, the Company achieved a turnover (Revenue from Operations) of 19,615.77 lakh as against 15,947.90 lakh in the previous year, representing a growth of approximately 23%.

During the year, the Company earned a Net Profit of 554.65 lakh as against a Net Loss of 129.03 lakh in the previous year. During the year, the Company has transferred an amount of 554.65 lakh to the General Reserve.

The Earnings per Share (EPS) of the Company as on March 31, 2026 was 5.70 (Basic and Diluted) as against 2.97 in the previous year.

In accordance with the amendments notified in Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 on May 09, 2018, the details of significant changes in the key financial ratios as compared to the immediately previous Financial Year are reported hereunder:

Note: Ratios above 25% variance year-on-year have been treated as "significant changes" and explained accordingly; other ratios showing a variance of less than 25% have been marked as no significant change.

• Update on the regulatory filing status below with the current position as on the date of this report:
• Posaconazole & Bilastine - filing status for the European market.
• Bempedoic Acid - filing status for the US market.
• DMF approval status for Oseltamivir, Rivaroxaban, Pantoprazole and Fenofibrate in the European market.
• USDMF approval status for Omeprazole, Esomeprazole and Pantoprazole.

The focus of the Company continues to be on capability development, performance management and employee engagement, aimed at improving cost competitiveness through enhanced levels of employee participation, commitment and involvement across all functions.

The Company recognizes its human resources as its biggest strength, which has consistently contributed to its progress and growth. In line with this philosophy, the Company continues to provide employee development opportunities through structured training programs, workshops and skill-building sessions designed to equip employees with upgraded skills and competencies.

The total number of employees as on March 31, 2026 stood at 316.

Statement in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements and are based on certain assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic demand-supply conditions, finished goods prices, raw material cost and availability, changes in government regulations and tax structure, economic developments within India and the countries with which the Company has business contracts, and other factors such as litigation and industrial relations.

The Company assumes no responsibility in respect of forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information and events