Evoq Remedies Ltd Management Discussions

A. Overview of the Indian Economy:

Overall, the outlook for the Indian economy remains positive. The Reserve Bank of India has projected Indias real GDP growth for FY 2025-26 at 6.5%, with macroeconomic fundamentals stable and risks broadly balanced.

A recovery in agricultural output following favourable monsoon projections, sustained momentum in services, and a revival in manufacturing activity are expected to support economic activity in FY 2025-26. Government capex continues to play a pivotal role in stimulating demand, with increased capital outlay being accommodated within the existing fiscal space through reprioritisation rather than an expansion in overall expenditure. The governments focus on inclusive growth targeting key segments such as women, youth, farmers, and the poor has been maintained alongside its fiscal consolidation efforts, with the Fiscal Deficit estimated to decline to 4.4% of GDP for FY 2025-26.

The global economic environment remained subdued during FY 2024-25, particularly affecting Indias major trade partners, leading to weaker demand for merchandise exports. At the same time, falling international commodity prices brought down import values, resulting in a narrower merchandise trade deficit. This trend, coupled with robust remittance inflows, helped contain the Current Account Deficit at 1.5% of GDP, indicating external sector stability.

On the demand side, household consumption is projected to gain momentum, aided by improving rural incomes, moderation in inflation, and enhanced consumer confidence. Prospects for fixed investment remain encouraging, supported by rising private sector capex, stronger corporate balance sheets, and continued public sector investment. The rebound in global trade and greater participation in global value chains are also expected to boost external demand, adding to the growth momentum.

Inflationary pressures, particularly food inflation, showed signs of easing toward the end of FY 2024-25. The Reserve Bank of India, in its April 2025 monetary policy statement, projected headline inflation to remain around 4.0% for 2025-26, with quarterly estimates ranging from 3.6% in Q1 to 4.4% in Q4. This revision was driven by declining core inflation, record wheat and pulse output, and stabilisation in food prices. The policy repo rate was reduced by 25 basis points to 6.0%, marking a shift towards a more accommodative stance to support growth amid global volatility. Additionally, the Cash Reserve Ratio remains at 4%, continuing to ensure liquidity support in the system.

However, several headwinds warrant attention. Geopolitical tensions, including volatility in the Middle East and supply chain disruptions, remain a risk to trade flows and energy prices. Persistent inflation in developed markets, fluctuation in global financial markets, and the potential for further geo-economic fragmentation could introduce external shocks. Nevertheless, Indias robust macroeconomic framework, improved financial sector resilience.

B. Industry structure and development:

The Indian pharmaceutical sector is a major contributor to the countrys economy, recognized globally for its extensive production capabilities and robust market presence. Valued at approximately USD 55 billion, as of 2025, it is one of the largest pharmaceutical markets worldwide. The sector is predominantly driven by the production of generic drugs, which India supplies extensively to international markets, including the United States, Europe, Africa, and Asia. Additionally, India is a leading producer of Active Pharmaceutical Ingredients (APIs), essential for both domestic and global pharmaceutical needs.

In recent years, the sector has experienced significant growth, bolstered by increased investment in research and development, and a strategic shift towards biopharmaceuticals and advanced therapies. Government policies have supported this growth through favorable regulations, tax incentives, and initiatives aimed at boosting innovation. Indian pharmaceutical companies are also forging international collaborations and adhering to global regulatory standards, enhancing their competitive edge and expanding their market reach.

Despite its successes, the sector faces challenges such as intense pricing pressures, regulatory hurdles, and issues related to counterfeit drugs. These challenges impact profit margins and regulatory compliance but are being addressed through stricter quality controls and technological advancements. Looking ahead, the Indian pharmaceutical industry is well-positioned for continued growth, supported by its strong domestic market, rising healthcare needs, and ongoing investments in innovation and technology. Overall, the sector remains a vital and influential component of Indias economic landscape.

C. Opportunities and Threats:

Opportunities:

?€? Domestic Market Growth: Increasing demand driven by a growing population, rising income levels, and a higher prevalence of chronic diseases.

?€? Global Expansion: Strong presence in generics provides opportunities for further market penetration and international partnerships.

?€? Biopharmaceuticals: Growing focus on biosimilars and advanced therapies offers potential for innovation and new product development.

?€? Research and Development: Investment in R&D and digital health technologies can lead to breakthroughs in drug discovery and faster time-to-market.

?€? Manufacturing and Exports: Robust manufacturing capabilities and favorable government policies support increased production and global export opportunities.

Threats:

?€? Regulatory Challenges: Navigating complex and evolving global regulatory requirements can be difficult and costly.

?€? Pricing Pressure: Intense competition and pricing pressures, particularly in the generics market, can erode profit margins.

?€? Counterfeit Drugs: The prevalence of counterfeit and substandard drugs poses risks to public health and damages industry reputation.

?€? Intellectual Property Issues: Patent disputes and intellectual property challenges can hinder innovation and market access.

?€? Economic and Political Instability: Fluctuations in economic conditions and political instability can impact market stability and investment.

D. Segment-wise or Product-wise performance:

The Company is primarily engaged in single segment i.e., Pharmaceutical Trading.

The Turnover of the Company for the Financial Year 2024-25 is mentioned in the Board Report.

E. Future Outlook:

In 2025-26, Evoq Remedies Limited is poised for growth due to rising demand in pharmaceuticals and biotechnology. Success will hinge on effective R&D investments, regulatory compliance, and navigating market competition. Economic fluctuations are a consideration, but strategic management can drive continued expansion.

F. Internal control systems and their adequacy:

Being a pharma company and ISO Certified the process parameters are fully documented and are in place. The role and responsibilities of various people are fully defined in all the functional level. There is continuous flow of information at all level and effective internal audit and internal checks are done at regular interval to ensure their adequacy and efficiency.

Additionally, the following measures are taken to ensure proper control:

?€? Budgets are prepared for all the operational levels.

?€? Any material variance from budget has to be approved by the Commercial director.

?€? Any major policy change is approved by the managing director.

?€? Any deficiency in not achieving target is reviewed at management meetings.

G. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2024-25 is described in the Directors Report of the Company.

H. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

I. Caution Statement:

Statements made in the Management Discussion and Analysis describing the various parts may be "forward looking statement" within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Govt. Regulations and amendments in tax laws and other internal and external factors.

Registered Office: A-1106, Empire Business Hub Near AUDA Water Tank, Science City Road, Sola Ahmedabad, Gujarat - 380 060	By the Order of the Board of Evoq Remedies Limited
	Sd/- Narendrakumar Patel	Sd/- Bhumishth Patel
Place: Ahmedabad Date: 26 th August, 2025	Director DIN:07017438	Managing Director DIN:02516641