Everest Organics Ltd Management Discussions

The information is required in compliance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forming a part of the Boards Report for the year ended March 31, 2025 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.

INDIAN ECONOMIC OVERVIEW

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.

The positive momentum can 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. The digital revolution, especially the rapid adoption of digital payments, e-governance, and fintech solutions, has further enhanced transparency, efficiency, and inclusivity across the economy.

While the major metropolitan centers continue to retain their strategic importance, Indias growth story is steadily becoming more geographically diversified. A new wave of development is being witnessed across tier 2 and tier 3 cities, which are emerging as vibrant growth centers. Targeted government investments in industrial corridors, smart cities, and regional infrastructure are unlocking opportunities in these areas, generating employment, and encouraging business expansion. This shift is also helping to ensure a more equitable distribution of growth, spreading economic benefits beyond the traditional hubs to previously underserved regions.

Infrastructure development remains at the core of this transformation. Significant progress is being made in expanding highways, expressways, ports, airports, and railway networks. These connectivity enhancements are facilitating faster and more efficient movement of goods and people, strengthening supply chains, and enabling businesses to reach wider markets. Importantly, these projects are not restricted to urban areas alone but extend to semi-urban and rural geographies, thereby catalyzing localized growth and creating opportunities in regions that were once on the periphery of economic activity. The integration of physical infrastructure with digital platforms is also improving logistics and trade facilitation, making the Indian economy more competitive and future-ready.

The financial system continues to demonstrate resilience and stability, supported by stronger balance sheets, improved credit flow, and a deepening of capital markets. The banking sector has seen improvements in asset quality, and there is greater access to funding for enterprises of all sizes. Parallelly, Indias emphasis on sectors such as manufacturing, renewable energy, pharmaceuticals, and technology-driven innovation is reshaping its economic profile. Start-ups and entrepreneurial ventures, backed by strong investor interest and policy support, are contributing significantly to job creation, innovation, and the countrys global positioning as a hub for new-age enterprises.

Indias demographic advantage, with a young and aspirational population, continues to drive consumption, innovation, and productivity. This, combined with policy reforms and a strengthening institutional framework, is expected to sustain momentum in the years to come. At the same time, there is a clear emphasis on inclusive development-ensuring that the benefits of growth reach deeper into rural and semi-urban regions through improved connectivity, financial inclusion, healthcare, education, and skill development initiatives. This balanced approach is positioning India as not only a rapidly growing economy but also a more equitable one.

Looking ahead, Indias economic prospects remain firmly positive. With strong domestic demand, policy continuity, and an expanding role in global trade and investment flows, the country is poised to consolidate its place as a leading player in the world economy. Its trajectory reflects a unique blend of resilience, reform, and opportunity. By combining sustained growth with regional diversification and rising global influence, India is steadily emerging as one of the most important contributors to the global economic landscape in the coming decade.

INDUSTRY STRUCTURE & DEVELOPMENTS:

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 9.43% over the last decade. 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 around 500 API producers, accounting for nearly 8% of the global API market.

The Indian pharmaceutical sector supplies over 50% of global demand for vaccines, 40% of generic demand in the US, and 25% of all medicine in the UK. The domestic pharmaceutical industry is supported by a strong network of ~3,000 drug companies and ~10,500 manufacturing units. With a vast pool of skilled scientists and engineers, India continues to maintain a strong competitive edge in the global market. Presently, more than 80% of the antiretroviral drugs used worldwide to combat AIDS are supplied by Indian pharmaceutical companies. This has rightfully earned India the title of the "pharmacy of the world" for its low-cost yet high-quality medicines.

The pharmaceutical sector in India ranks third in the world in terms of production volume and 14th in terms of value, contributing around 1.72% 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 2024-25, the Indian economy remained one of the fastest-growing major economies, recording a GDP growth of 8.2%, driven by robust domestic demand and strong macroeconomic fundamentals. Rising disposable income and higher healthcare awareness continue to fuel growth in the pharmaceutical sector, further insulating the economy from global headwinds.

According to the latest EY-FICCI report, the Indian pharmaceutical market is projected to touch US$ 130 billion by 2030, supported by innovation and the growing demand for new-age therapies. Meanwhile, the global pharmaceutical market size is expected to surpass US$ 1 trillion in 2024.

Your Company continues to operate in the chemical industry, primarily engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs) and intermediates. FY 2024-25 was a year of steady and sustainable performance. 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.

MARKETING & MARKET SIZE:

The Indian pharmaceutical industry continued to demonstrate strong growth and resilience during FY 2024-25, reaffirming its vital role in the global healthcare ecosystem. The industry, currently valued at about US$ 50 billion, is projected to reach US$ 65 billion in 2024 and nearly US$ 130 billion by 2030, consolidating Indias leadership in affordable medicine supply. Exports contribute over US$ 25 billion, meeting nearly 20% of global generic demand, and positioning India as the largest supplier of cost-effective, high-quality generics. This robust export base has strengthened foreign exchange earnings and reinforced Indias global role in ensuring access to medicines.

India has also emerged as a leading biotechnology hub, ranking among the worlds top 12 and third in the Asia-Pacific. The sector, valued at US$ 80 billion in 2023, grew 14% over the previous year and is expected to reach US$ 150 billion by 2025. With diverse segments spanning biopharmaceuticals, bio-services, bio-agriculture, bio-industry, and bioinformatics, biotechnology has become a critical driver of innovation in new therapies, vaccines, and sustainable solutions. Supportive policies and private investment are expected to accelerate Indias advancement in this domain.

The biosimilars market is witnessing rapid expansion, projected to grow at nearly 22% CAGR to reach US$ 12 billion by 2025, accounting for almost 20% of the domestic pharmaceutical market. Cost-efficient manufacturing, strong scientific talent, and regulatory alignment with global standards continue to fuel this growth.

The medical devices sector is another high-growth area. Valued at US$ 11 billion and contributing about 1.5% to the global market, it is projected to reach US$ 50 billion by 2025 at a CAGR of ~37%. This growth, supported by rising healthcare infrastructure, government initiatives like "Make in India," and wider technology adoption, is expected to reduce import dependence and create export opportunities in diagnostics and surgical equipment.

India also maintains a strong presence in regulated international markets such as the US and Europe. It hosts the largest number of USFDA-approved manufacturing plants outside the US, reflecting its regulatory strength and quality standards. This enables Indian firms to consistently cater to global demand and sustain a competitive export edge.

On the domestic front, the pharmaceutical market, valued at US$ 42 billion in 2021, is expected to reach US$ 65 billion in 2024 and expand further to US$ 120 130 billion by 2030. Growth is supported by rising healthcare spending, insurance penetration, higher disposable incomes, an ageing population, and increased prevalence of chronic diseases, along with accelerated digital healthcare adoption.

Globally, India contributes nearly 20% of generic exports and 60% of vaccine demand, earning it the title of the "pharmacy of the world." Its role in maintaining healthcare supply chains, especially during global crises, highlights its reliability as a trusted supplier.

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 and healthcare infrastructure initiatives, will further accelerate sectoral growth. Together, these factors provide a strong foundation for the long-term sustainability of Indias pharmaceutical and biotechnology industry.

OUTLOOK: Global API Sector

The global Active Pharmaceutical Ingredient (API) sector continued to expand steadily in FY 2024-25, reaffirming its role as the foundation of the pharmaceutical industry. As per recent estimates, the global API market stood at around US$ 222.9 billion in 2022 and is projected to reach US$ 303.9 billion by 2028, at a

CAGR of 5.6% during 2023 2028. This sustained growth highlights the rising reliance on APIs across therapeutic areas and reflects structural changes in manufacturing and supply chains.

APIs represent the biologically active components of drugs, while other ingredients, known as excipients, serve as inactive carriers that aid stability and absorption. Depending on the therapy, formulations may contain a single API or multiple APIs in combination therapies. The dosage, patient-specific response, and manufacturing quality determine therapeutic effectiveness, making stringent quality control essential in API production.

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. Today, these two nations dominate the bulk drug and intermediate supply chain worldwide.

Demand for APIs remains robust and diversified. A key driver is the expiry of patents on blockbuster drugs, creating opportunities for cost-effective generic APIs, especially in oncology, cardiovascular, diabetes, and central nervous system therapies. Simultaneously, the growth of biological drugs and biosimilars has triggered strong demand for complex APIs. Biological APIs, derived from living organisms, are gaining prominence due to their potency and ability to address diseases that small molecules cannot, making them one of the fastest-growing segments globally.

Several demographic and structural factors further support demand. The ageing global population is increasing the need for medicines targeting chronic and degenerative conditions. Rising lifestyle-related diseases such as obesity, diabetes, and hypertension are also driving prescription volumes. Additionally, higher healthcare spending and improved access to medicines in emerging economies have broadened the demand base.

Large multinational drugmakers are increasingly outsourcing API production to specialized players in India and China to lower costs and enhance efficiency. This outsourcing model enables global pharma innovators to focus on R&D and commercialization, while leveraging the manufacturing expertise and cost competitiveness of Asian producers.

The regulatory framework is another defining factor for industry growth. Authorities such as the USFDA, EMA, and WHO emphasize stringent compliance and traceability in API production. While this raises entry barriers, it benefits established players, particularly Indian firms with a large number of USFDA-approved facilities, thereby reinforcing Indias global credibility as a trusted API supplier.

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. Increasing adoption of digital tools and Industry 4.0 practices will also enhance transparency, efficiency, and quality across supply chains.

In summary, the outlook for the global API industry in FY 2024-25 is highly positive. Demand will be driven by patent expiries, rising generics and biosimilars, demographic trends, and healthcare expansion. With India and China consolidating their leadership, the sector is set to remain a cornerstone of the global pharmaceutical ecosystem. However, manufacturers must continue to navigate compliance requirements, environmental considerations, and competitive intensity. Companies that invest in scale, quality, and innovation will be best positioned to capture the sectors growth potential in the coming years.

INVESTMENTS & RECENT DEVELOPMENTS:

The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. India ranks third worldwide for production by volume and 14th by value.

In this regard, the sector has seen a lot of investments and developments in the recent past.

Up to 100% FDI has been allowed through automatic route for Greenfield pharmaceuticals projects. For Brownfield pharmaceuticals projects, FDI allowed is up to 74% through automatic route and beyond that through government approval.

The cumulative FDI equity inflow in the Drugs and Pharmaceuticals industry stood at around US$ 21.5 billion as of March 2025, contributing about 3.4% of the total FDI inflows into India.

The foreign direct investment (FDI) inflows in the Indian drugs and pharmaceuticals sector reached about US$ 1.6 billion during FY 2024 25.

The Indian pharmaceutical industry generated a trade surplus of around US$ 16 billion in FY 2024 25.

Pharmaceutical exports crossed US$ 27 billion in FY 2024 25, reaffirming Indias position as the largest supplier of generic medicines globally.

Medical Device industry is expected to reach US$ 50 billion by 2030, growing at a CAGR of 15%.

The National Digital Health Blueprint has the potential to generate nearly US$ 200 billion in added economic value for Indias healthcare industry over the next 10 years.

Glenmark Pharmaceuticals became the first company in India to launch Teneligliptin + Dapagliflozin Fixed Dose Combination.

Entod Pharmaceuticals launched its new ocular aesthetic range focused on improving eye comfort and enhancing eye aesthetics.

BDR Pharmaceutical launched the first generic apalutamide (brand name Apatide) in India to treat both metastatic castration-sensitive prostate cancer as well as non-metastatic castration-resistant prostate cancer.

Anglo French Drugs & Industries Limited (AFDIL), a 99-year-old organization in the pharmaceutical sector, entered into the fertility space with the launch of the LYBER range.

ICPA Health Products Ltd. (ICPA), a leading pharma company in the oral healthcare segment, launched its latest product Heximetro.

Sun Pharmaceutical Industries Limited, through one of its wholly owned subsidiaries, launched Bempedoic Acid under the brand name Brillo in India for reducing low-density lipoprotein (LDL) cholesterol.

Dr. Reddys Laboratories entered into an exclusive partnership with HK inno.N Corporation to commercialise novel molecule Tegoprazan in India & select emerging markets.

Dr. Reddys Laboratories also advanced its medical cannabis program in Germany through a pact with MediCane Health.

Lupin signed an agreement to acquire two inhalation brands from Sunovion Pharmaceuticals Inc.

Notable recent past developments (still relevant for FY 2024 25):

v Cipla partnered with Drugs for Neglected Diseases initiative (DNDi) to announce the launch of a 4-in-1 antiretroviral treatment for children living with HIV in South Africa. (relevant as Cipla continues focus on global access & HIV therapies) v Glenmark became the first pharmaceutical company to launch Indacaterol + Mometasone fixed-dose combination drug for Asthma in India. (respiratory therapies remain a priority area in FY 2024 25)

v Themis Medicare Ltd. (Themis) announced the approval of its antiviral drug VIRALEX by the Drug Controller General of India (DCGI). (relevant as India expands antiviral & infectious disease portfolio)

v Eli Lilly introduced Ramiven in India for certain high-risk early breast cancer patients in November 2022. (oncology remains a leading therapeutic focus in FY 2024 25)

v Sun Pharma and SPARC entered into a license agreement for commercialization of phenobarbital for injection in the US in November 2022. (aligns with Sun Pharmas continuing global specialty portfolio strategy)

v AstraZeneca India launched a Clinical Data and Insights (CDI) division in 2021 to further strengthen its global presence and manage data-related aspects of its clinical trials. (still relevant as India scales digital healthcare & clinical data capabilities)

GOVERNMENT INITIATIVES:

The Government has introduced several measures to foster growth and innovation in the Indian pharmaceutical sector, such as:

v As per the Union Budget 2024 25:

O The Government has reinforced its commitment to research-driven healthcare and affordable medicine access. A higher allocation has been made to the Ministry of Health and Family Welfare, with enhanced focus on modernising health infrastructure, supporting R&D in pharmaceuticals and biotechnology, and facilitating large-scale digital health adoption.

O Building on the sickle cell anaemia elimination mission announced in FY 2023 24, the Government has rolled out accelerated implementation in FY 2024 25, with mass screening, counselling, and treatment across tribal belts, while expanding the coverage to additional high-risk districts.

O Stronger emphasis has been 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.

O In line with the Governments vision of positioning India as a global innovation hub, dedicated centres of excellence for pharmaceutical research and innovation are being operationalised in FY

2024 25, with a strong push for academia industry collaboration and incentivised R&D investments.

v Ayushman Bharat Digital Mission (ABDM):

O Under ABDM, the coverage and adoption of ABHA (Ayushman Bharat Health Account) IDs has accelerated in FY 2024 25, with significant integration across hospitals, diagnostics centres and pharmacies. The aim is to establish longitudinal electronic health records across the ecosystem.

O The Mission has expanded from Union Territories to nationwide implementation. With digital health records now being seamlessly shared across public and private healthcare systems, patient convenience and clinical decision-making are seeing significant improvement.

O Building upon the earlier pilots (2021 22), the National Health Authority (NHA) has scaled up integration with more than 1,200 partner solutions, enabling wider interoperability and standardisation of digital health infrastructure.

v Scheme for Development of Pharma Industry Umbrella Scheme:

O The Department of Pharmaceuticals continues to strengthen the Umbrella Scheme comprising:

Assistance to Bulk Drug Industry for Common Facilitation Centres

Assistance to Medical Device Industry for Common Facilitation Centres

Assistance to Pharmaceutical Industry (CDP PS)

Pharmaceutical Promotion and Development Scheme (PPDS)

Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)

O In FY 2024 25, greater budgetary support has been earmarked to accelerate cluster development, technology adoption, and global competitiveness for pharma MSMEs.

v Union Budget (2023 24 - Past Initiative):

O A mission to eliminate sickle cell anaemia by 2047 was launched, focusing on awareness, screening of 7 crore individuals in tribal regions (ages 0 40), and counselling through coordinated interventions.

O For innovation in pharmaceuticals, a new initiative to encourage R&D through centres of excellence was introduced, with the government urging private sector participation in selected priority fields.

O At the grassroots level, 157 new nursing colleges were announced to be established in co-location with government medical colleges.

v Other Notable Government Steps (2021 23 Past Developments):

O In March 2022, the Strengthening of Pharmaceutical Industry (SPI) Scheme was launched with an outlay of Rs. 500 crore (US$ 665.5 million) for FY22 26.

O In November 2021, India resumed supplying COVID-19 vaccines to COVAX, marking an important step in global health diplomacy.

O In November 2021, PM Shri Narendra Modi inaugurated the first Global Innovation Summit of the pharmaceutical sector, focusing on regulatory reforms, funding, innovation infrastructure, and academia industry partnerships.

The pharmaceutical industry in India continues to be a vital component of the countrys economic and social framework. It contributes significantly to foreign trade while ensuring that millions worldwide have access to affordable generic medicines. India also maintains one of the worlds largest bases of USFDA and WHO GMP compliant plants. Medicine spending in India is projected to grow at 9 12% over the next five years, positioning the country among the global top 10 in terms of expenditure.

Going forward, the outlook for FY 2024 25 is highly positive. Growth in domestic sales will depend on companies ability to align portfolios with the rising demand for therapies targeting chronic diseases such as cardiovascular ailments, diabetes, depression, and cancer. Additionally, the governments continued thrust on universal healthcare (Ayushman Bharat), rural health programmes, preventive vaccines, and faster generic drug introductions are expected to drive strong momentum in the Indian pharmaceutical industry.

OPPORTUNITIES & THREATS:

The SWOT analysis of the industry reveals the position of the Indian pharmaceutical industry in respect to its internal and external environment for FY 2024 25.

a) Strengths

i. 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.

ii. Strong technical, finance and administrative expertise in pharma industries along with a deep marketing and distribution network, enabling scale in both domestic and international markets.

iii. Higher GDP growth, rising middle class, and increasing urbanisation continue to support higher disposable income in the hands of the general public and their positive attitude towards healthcare spending.

iv. Low-cost, highly skilled and English-speaking labour force with proven capabilities in process development and design of high-technology manufacturing devices.

v. Healthy domestic market demand supported by rising per capita healthcare expenditure, growing demand for preventive and chronic therapies, and low cost of innovation, manufacturing and operations.

vi. Strong focus by the Government through initiatives like PLI schemes, digital health infrastructure, and Ayushman Bharat Mission.

vii. Adherence to global standards, high quality documentation and robust process understanding add to industry credibility.

viii. Expanding penetration of health insurance coverage increasing affordability of treatments.

b) Weaknesses

i. Stringent price control and regulatory interventions under DPCO impacting profitability of pharma companies.

ii. Limited ability to compete with global MNCs for new drug discovery, clinical research and worldwide commercialisation of new molecules due to resource constraints.

iii. Infrastructure gaps, particularly in logistics, cold chain and power availability, remain a major challenge in certain regions.

iv. Low investments in innovative and breakthrough R&D compared to developed markets, with higher dependence on generics and APIs.

v. Fragmented industry landscape with significant presence of unorganized players, leading to stiff price competition and pressure on margins for organized players.

c) Opportunities

i. Global demand for generics, biosimilars, and affordable vaccines continues to rise, creating significant export opportunities for Indian players.

ii. Growth of OTC and chronic therapy markets, with rising burden of non-communicable diseases (cardiac, diabetes, oncology, CNS).

iii. Increased penetration into Tier-II and Tier-III cities and non-metro markets, supported by expanding healthcare infrastructure.

iv. Large demand for advanced diagnostic services, personalized medicine and biotechnology-driven solutions.

v. Increasing foreign direct investment and significant strategic alliances with MNCs in the Indian market.

vi. Public-Private Partnerships to strengthen health infrastructure, digital healthcare, and research collaborations.

vii. Opening up of health insurance sector, coupled with increase in per capita income and government health schemes, remains a major growth driver for the pharmaceutical industry.

viii. India continues to be a preferred global outsourcing hub for formulations, APIs, clinical research and contract manufacturing due to low cost of skilled labour and proven quality standards.

d) Threats

i. Intensified global competition and narrowing profit margins in generics and APIs.

Increasing stringency of global quality audits and compliance requirements from USFDA, EMA and other regulators.

ii. More demanding CGMP regulatory requirements leading to continuous need for capacity expansion and compliance investments.

iii. Rising wage inflation, skill shortage in specialised areas and increasing cost of compliance.

Expansion of Drugs Price Control Order (DPCO) coverage affecting profitability across several therapeutic segments.

iv. Competition from other low-cost manufacturing countries such as China, Israel and emerging markets impacting outsourcing demand for Indian pharmaceutical exports.

v. 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.

INTERNAL CONTROL SYSTEM & THEIR ADEQUACY:

The Company continues to maintain an adequate and effective system of internal controls during FY 2024 25, 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. These are reviewed and updated periodically in line with evolving business requirements, industry best practices, and regulatory changes, thereby continuously improving systems, processes, and overall operational efficiency.

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 Internal Audit Department monitors the entire spectrum of operations and services, providing assurance on process adherence and effectiveness.

The top management, along with the Audit Committee of the Board, regularly reviews the findings and recommendations of the Internal Auditor. Corrective and preventive actions are taken promptly to address identified risks and strengthen controls. This structured oversight ensures that the Companys internal control framework remains robust, efficient, and aligned with its strategic objectives, while also fostering a culture of transparency, accountability, and continuous improvement.

RISKS & CONCERN:

The pharmaceutical industry continues to face multi-dimensional challenges in FY 2024 25, 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. Ensuring that drugs are handled, stored, and transported safely is critical, not only to preserve their efficacy but also to mitigate risks of contamination or deterioration.

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. Concerns around potential adverse environmental impacts are growing steadily, which could translate into stricter norms in the future, thereby impacting costs and processes for the industry.

On the operational side, post-COVID surplus stocking of APIs by formulators, combined with variable raw material costs, has continued to exert pressure on sales volumes of APIs. This trend has impacted demand cycles in the short term, creating volatility in revenue generation for API-focused businesses. At the same time, shortages and supply chain disruptions of key raw materials are also being viewed as a future risk factor that could adversely affect API sales and manufacturing schedules.

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.

SEGMENT-WISE PERFORMANCE:

Everest Organics Limited has been engaged in the business of manufacturing Active Pharmaceutical Ingredients (APIs) and Intermediaries for nearly three decades, and during FY 2024 25 the Company continued to strengthen its operations and market presence. At present, the Company is operating at a healthy capacity utilization level of around 80 90% for the existing product portfolio. During FY 2024 25, the Company undertook significant capital expenditure initiatives, with an envisaged investment of about 1 Rs.15 crores, aimed at completing the new production block and further enhancing manufacturing capabilities. This follows the capex of about Rs.3.23 crores made in FY 2023 24, reflecting the Companys commitment to continuous capacity expansion and technological upgradation.

In terms of exports, during FY 2024 25, the Company achieved a strong global footprint, with approximately 27 28% of the total sales being exported to various geographies worldwide. The year also witnessed an expansion in the client base, with Everest Organics now catering to nearly 85 clients spread across 48 countries. Looking ahead, the Company has set a target to expand its presence to 120 clients in over 60 countries within the next three years, thereby consolidating its position as a trusted global API supplier.

On the regulatory front, the Company continues to make steady progress. Presently, regulatory approvals have been secured for three (3) products, while six (6) additional products are in advanced stages of approval. Furthermore, during FY 2024 25, two (2) products are under registration in China, two (2) products are under registration in the Korea market, and five (5) products are undergoing the registration process for the Russia market. These ongoing efforts in regulatory filings reflect the Companys strategy to penetrate deeper into key international markets and diversify its global product portfolio.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year under review, the Company achieved a turnover of Rs. 15,947.90 lakh as against Rs. 19,724.13 lakh in the previous year.

During the year, the Company incurred a Net Loss of Rs. 129.03 lakh as against a Net Profit of Rs. 13.92 lakh in the previous year. During the year, the Company has transferred an amount of Rs. 2,428.95 lakhs to the General Reserve.

The Earnings per Share (EPS) of the Company as on March 31, 2025 was (2.97) as against 0.17 in the previous year.

KEY FINANCIAL RATIOS:

In accordance with the amendments notified in the 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:

Particulars	As at March 31, 2025	As at March 31, 2024	Reason for change
Debtors Turnover	1.69	2.27	Trade receivables turnover ratio decreased due to increase in credit sales during the year as compared to the previous year.
Inventory Turnover	2.21	2.74	Note(a)
Interest Coverage Ratio (Times)	2.67	1.11	The improvement in the ratio is a result of increased operating profitability coupled with a reduction in interest costs in the current year compared to the previous year.
Current Ratio (Times)	1.06	0.93	Note(a)
Debt-Equity Ratio (Times)	0.68	1.26	The Debt-equity ratio has decreased on account of increase as issue of equity share capital and decrease in the borrowings.
Operating Profit Margin (%)	1.22%	3.08%	The decrease in the ratio is mainly due to unfavorable changes in the cost structure and a lower contribution from sales margins in the current year compared to the previous year.
Net Profit Margin (%)	(0.81) %	0.07 %	Decrease in the Net Profit ratio mainly on account of the decrease in Revenue and Profit during the year as compared to the previous year.
Return on Net Worth (%)	(1.84) %	0.30%

Notes: (a). In respect of the aforesaid mentioned ratio, there is no significant change (25% or More) in the Financial Year 2024-25 in compared to Financial Year 2023-24.

INDUSTRIAL RELATIONS & HUMAN RESOURCE DEVELOPMENT:

The focus of the Company continues to be on capability development, performance management and employee engagement. This approach is 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. This recognition has further reinforced the Companys image as the right destination where the growth of the organization is closely aligned with the value addition and career progression of individual employees.

In line with this philosophy, the Company continues to provide employee development opportunities through structured training programs, workshops and skill-building sessions. These initiatives are designed to equip employees with upgraded skills and competencies, enabling them to adapt effectively to contemporary technological advancements and evolving business requirements. The total number of employees as on March 31, 2025 stood at 355.

CAUTIONARY STATEMENT:

Statement in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, exceptions or predictions may be forward looking statements and are based on certain assumptions and exception of future events. Actual result could however differ materially from those express or implied. Important factors that could make a difference to the Companys operations including global and domestic demand-supply condition, finished goods process, raw material cost and availability, changes in government regulations and tax structure, economic development 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 statement herein which may undergo changes in future on the basis of subsequent developments, information and events.