Fredun Pharmaceuticals Ltd Management Discussions

ANNEXURE TO DIRECTORS REPORT

ANNEXURE V

Overview Management Discussion & Analysis – Overview

FY2025-26 was a landmark year for Fredun

Pharmaceuticals Limited, marked by strong operational execution, strategic diversification and record financial performance. Building on a legacy of over three decades in pharmaceuticals, Fredun continued its transformation into a diversified healthcare platform with a growing presence across Pharmaceuticals, Pet Healthcare, Nutraceuticals, Cosmeceuticals, Mobility & Rehabilitation, Healthcare Retail, Premium Wellness and Specialty Therapeutics.

Driven by a clear vision of participating across the evolving healthcare value chain, the Company expanded beyond traditional pharmaceuticals into high-growth and future-focused healthcare segments. Strategic initiatives across Freossi, Fredun Nutrition, BeautyFred, Wagr Retail, DAULC?L and Hormone Health Products have strengthened Freduns position in some of the most attractive and rapidly expanding healthcare categories.

FY2025-26 also witnessed significant investments in future-ready infrastructure. The acquisition of a 76,000 sq. ft. industrial plot, development of a new 40,000 sq. ft. manufacturing facility and an additional 12,000 sq. ft. expansion underscore managements confidence in the Companys long-term growth trajectory and commitment to building scalable manufacturing capabilities.

Financially, the Company delivered its strongest performance to date, achieving record revenue, EBITDA and profitability, supported by improved product mix, operating leverage and growing contributions from higher-margin businesses. Further validating its strengthening financial profile, Infomerics upgraded Freduns credit rating to IVR BBB+ (Stable Outlook) during the year.

Today, Fredun stands at a unique inflection point, combining the stability of an established pharmaceutical franchise with the growth potential of innovation-led healthcare and wellness businesses. With a diversified portfolio, expanding manufacturing footprint, growing global presence and multiple growth engines, the Company is well positioned to capitalise on long-term healthcare trends and create sustainable value for shareholders.

As Fredun enters its next phase of growth, management remains focused on scaling high-potential businesses, strengthening brand equity, expanding global reach and delivering consistent, profitable and sustainable growth while building a future-ready healthcare enterprise.

1. MACROECONOMIC ENVIRONMENT

Global Economy

The global economy demonstrated resilience during FY2025-26 despite geopolitical tensions, supply-chain realignments, inflationary pressures and evolving monetary policies across major economies. While growth across developed markets remained moderate, emerging economies continued to drive global economic expansion, supported by favourable demographics, urbanisation and rising consumer demand.

The healthcare sector remained one of the most resilient and attractive industries globally, driven by ageing populations, increasing prevalence of chronic diseases, rising healthcare awareness and growing adoption of preventive healthcare and wellness solutions. Demand for affordable and quality generic medicines continued to expand across Africa, the Middle East, CIS countries, Southeast Asia and Latin America, creating significant opportunities for established pharmaceutical manufacturers with strong regulatory capabilities and international reach.

India further strengthened its position as the "Pharmacy of the World," supplying over 20% of global generic medicines by volume and continuing to play a critical role in global healthcare accessibility. These structural industry trends provide a favourable long-term growth environment for Fredun, particularly given its established export presence, diversified healthcare portfolio and increasing focus on branded, specialty and consumer healthcare segments.

Indian Economy

India continued to be one of the fastest-growing major economies globally, supported by strong domestic consumption, resilient services-sector growth, expanding manufacturing activity and sustained government investment in infrastructure and healthcare. Rising disposable incomes, increasing healthcare awareness, expanding insurance penetration and favourable demographics continue to strengthen the long-term outlook for the healthcare industry.

Government initiatives such as Ayushman Bharat, the Production Linked Incentive (PLI) Scheme and the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) continue to enhance healthcare accessibility, strengthen domestic manufacturing capabilities and support the growth of the pharmaceutical sector.

The Indian healthcare market is also witnessing a structural shift towards preventive healthcare, wellness, specialised therapeutics, pet healthcare, rehabilitation solutions and digitally enabled healthcare services. These evolving consumer and healthcare trends are creating new opportunities beyond traditional pharmaceuticals and expanding the addressable market across multiple healthcare categories.

For Fredun, these favourable macroeconomic and industry dynamics provide a strong foundation for growth. With a diversified presence across Pharmaceuticals, Pet Healthcare, Nutraceuticals, Cosmeceuticals, Mobility & Rehabilitation, Healthcare Retail, Premium Wellness and Specialty Therapeutics, the Company is well positioned to capitalise on emerging opportunities, strengthen its market presence and create sustainable long-term value for shareholders.

2. INDUSTRY LANDSCAPE AND TRENDS 2.1 Pharmaceutical Industry

The global pharmaceutical industry continues to expand steadily, driven by increasing life expectancy, rising prevalence of chronic diseases, expanding healthcare access and ongoing innovation in therapeutics and drug delivery systems. The global pharmaceutical market is projected to grow from approximately USD 1.75 trillion in 2024 to nearly USD 2.38 trillion by 2029.

India remains one of the most important pharmaceutical manufacturing hubs globally and continues to strengthen its leadership position in generic medicines. The Indian pharmaceutical industry, currently valued at approximately USD 50 billion, is expected to reach USD

Indias Real GDP Growth Outlook

Year	GDP Growth (%)
FY24	6.5%
FY25 (Projected)	6.2%
FY26 (Projected)	6.3%
FY30 (Projected)	6.5%

Source: IMF World Economic Outlook and RBI Estimates.

Key growth drivers include:

• Rising burden of chronic and lifestyle diseases;

• Expansion of healthcare infrastructure and insurance coverage;

• Government support through PLI and healthcare initiatives;

• Growing export opportunities in regulated and semi-regulated markets;

• Increasing demand for affordable branded generics and specialty products.

Fredun Pharmaceuticals remains well positioned to capitalise on these opportunities through its diversified product portfolio, established export network, strong manufacturing capabilities and growing branded generic franchise under Fredun Gx.

65 billion by 2025 and approximately USD 130 billion by 2030.

2.2 Pet Healthcare and Specialty Retail

The pet healthcare industry continues to emerge as one of the fastest-growing segments within the broader healthcare ecosystem. Rising pet ownership, increasing disposable incomes, urbanisation and the growing humanisation of companion animals are driving demand across veterinary therapeutics, diagnostics, nutrition, grooming and preventive healthcare services.

The Indian pet care market is projected to grow at a CAGR of approximately 17.1% over the coming years, significantly outpacing broader consumer healthcare categories. Demand is increasingly shifting toward premium nutrition products, specialised veterinary services and integrated healthcare solutions.

Through its Freossi platform, One Pet Stop retail network and dedicated pet-health initiatives, Fredun is building an integrated pet-care ecosystem encompassing therapeutics, diagnostics, functional foods, ambulance services, grooming, retail and wellness solutions. The launch of Indias first 24x7 pet diagnostic centre, expansion into international markets and investments in dedicated pet-food manufacturing infrastructure position the Company to benefit from long-term sector growth.

In addition, the Companys investment in Wagr Retail Private Limited represents a strategic extension of its consumer-facing healthcare and specialty retail ecosystem. Wagr is focused on building organised retail and digital commerce capabilities across health, wellness, lifestyle in pet-care categories. As consumer purchasing behaviour increasingly shifts toward omnichannel platforms, Wagr is expected to enhance customer engagement, strengthen brand visibility and create scalable distribution opportunities across Freduns growing portfolio of healthcare and wellness brands.

Management believes that the combination of Freossi, One Pet Stop and Wagr Retail creates a unique ecosystem that integrates products, services and customer touchpoints, positioning the Company favourably within a rapidly formalising market.

2.3 Nutraceuticals and Wellness

Consumer preferences continue to shift toward preventive healthcare and wellness, driving strong growth across nutraceutical categories. Increasing health awareness, changing lifestyles and growing acceptance of science-backed nutritional products have accelerated demand across immunity, womens health, mens wellness, fertility, gut health and healthy ageing segments.

The Indian nutraceutical market is expected to grow at a CAGR of approximately 13.5% through 2030, supported by favourable demographic and consumption trends. Fredun Nutrition continues to strengthen its presence through brands such as Mamalait and Fredmax, leveraging the Companys pharmaceutical expertise, manufacturing capabilities and quality-focused approach to build trusted wellness brands. The Company remains focused on expanding its portfolio and strengthening its presence across modern trade, digital commerce and healthcare practitioner channels.

2.4 Cosmeceuticals and Personal Care

The convergence of healthcare, beauty and wellness continues to drive rapid growth in the cosmeceutical segment. Consumers increasingly prefer products that combine aesthetic benefits with clinically supported ingredients and therapeutic e_icacy.

Indias beauty and personal care e-commerce market is projected to grow at approximately 25% CAGR over the next several years, supported by rising digital adoption, social commerce and increasing consumer awareness regarding ingredient-based formulations.

Through BeautyFred and its expanding portfolio of over 200 products, the Company continues to build a differentiated position within the evolving cosmeceutical market. The business benefits from Freduns pharmaceutical heritage, product development expertise and commitment to quality-led innovation.

2.5 Mobility, Rehabilitation and Home Healthcare

The mobility and home healthcare market continues to benefit from demographic changes, increasing incidence of orthopaedic conditions and growing preference for home-based healthcare solutions. Rising healthcare awareness and expanding access to rehabilitation products are further accelerating category growth. Freduns mobility platform, comprising brands such as Chuu Balm, BraceOn, NebOn and DigiOn, offers a portfolio of over 190 SKUs across orthopaedic supports, mobility aids, nebulisation devices, pain-management products and home monitoring equipment.

The Companys growing institutional presence and expanding retail distribution network position this segment as an important future growth driver. The Company continues to transform from a traditional pharmaceutical manufacturer into a diversified healthcare platform with multiple growth engines across pharmaceuticals, pet healthcare, nutraceuticals, consumer wellness, specialty retail and home healthcare. Management believes this diversified approach enhances resilience, broadens addressable markets and creates a strong foundation for sustainable long-term value creation for shareholders.

3. OPERATIONAL HIGHLIGHTS & BUSINESS SEGMENT REVIEW

FY26 marked another year of strategic progress for Fredun Pharmaceuticals Limited as the Company continued its transformation from a traditional pharmaceutical manufacturer into a diversified healthcare platform. With established operations across Pharmaceuticals, Pet Healthcare, Nutraceuticals, Cosmeceuticals, Mobility & Rehabilitation, Healthcare Retail, Premium Wellness and Specialty Therapeutics, Fredun is building multiple growth engines designed to create sustainable long-term value for shareholders. The Companys strategy is anchored on leveraging its nearly four decades of pharmaceutical expertise while expanding into high-growth healthcare, wellness and consumer-health categories. During the year, Fredunstrengthened manufacturing capabilities, expanded product portfolios, enhanced its international footprint and invested in building scalable healthcare brands with significant long-term growth potential.

3.1 Capacity Expansion & Infrastructure Development

To support growing domestic and international demand, the Company continued to make strategic investments in manufacturing infrastructure and operational capabilities during FY26.

As part of its long-term capacity expansion strategy, Fredun acquired a strategically located industrial plot measuring approximately 76,000 sq. ft. in Palghar, Maharashtra, creating a strong foundation for future manufacturing growth and business expansion.

The Company also announced the development of its fifth manufacturing facility, comprising an initial 40,000 sq. ft. built-up area, which is expected to become operational in October 2026. The facility has been specifically designed to support the Companys expanding portfolio across veterinary healthcare products, nutraceuticals, specialty pharmaceutical formulations, wellness products and export-oriented manufacturing.

Further strengthening its manufacturing ecosystem, the Company has undertaken an additional 12,000 sq. ft. facility expansion, enhancing production flexibility and supporting future capacity requirements.

Collectively, these investments significantly strengthen Freduns manufacturing footprint and create a scalable platform to support the next phase of growth. The expanded infrastructure is expected to enhance production capacity, improve operating e_iciencies, strengthen supply-chain resilience and accelerate the commercialisation of new products across multiple healthcare verticals.

The Companys ongoing investments underscore managements conviction in the long-term growth potential of the healthcare industry and are aimed at strengthening its manufacturing capabilities to meet growing market demand. At present, the Company operates a single integrated manufacturing facility serving diverse product segments with shared production infrastructure. With the successful execution of the planned capacity expansion, the Company is expected to emerge as one of Indias largest single-location healthcare manufacturing facilities by FY28, providing a strong platform for sustainable growth, enhanced competitiveness, and increased market penetration across domestic and international markets.

3.2 Business Overview

(a) Pharmaceuticals, Generics & International Business (Fredun Gx)

The Generics business continued to be the Companys largest revenue contributor and remains the foundation of Freduns healthcare ecosystem.

During FY26, the segment delivered steady growth across exports, institutional supplies and OEM operations. Export revenues remained the largest contributor, supported by strong demand across semi-regulated and emerging markets. Approximately 65% of export revenues were generated through the Companys proprietary Fredun Gx branded portfolio, while the balance was contributed through strategic OEM partnerships.

The legacy generics franchise benefits from nearly four decades of operating heritage, deep distributor relationships across 52 countries and a registration portfolio built through sustained regulatory investments. The Company currently maintains over 813 product registrations globally and continues to expand its pipeline with more than 1,426 additional registrations under development.

Key achievements during the year included:

• Successful execution of the TNMSC institutional tender programme; • Expansion of branded generic exports across international markets; • Ongoing engagement with government healthcare agencies across the MENA region; • Continued strengthening of product registrations and regulatory approvals.

A key differentiator of Freduns export model is its strategy of owning or co-owning product registrations, creating long-term intellectual property value while strengthening customer retention and market access. The increasing contribution of branded formulations under Fredun Gx continues to support margin resilience and earnings visibility.

Management expects the Generics business to maintain healthy growth momentum over the medium term and remain the primary cash-generating engine supporting investments across emerging healthcare verticals.

(b) Pet Healthcare & Veterinary Ecosystem (Freossi)

Pet Healthcare emerged as one of the most strategically important growth platforms for the Company during FY26.

Through Freossi, Fredun is building one of Indias most comprehensive and integrated pet-health ecosystems encompassing veterinary therapeutics, diagnostics, functional foods, emergency services, grooming solutions, retail and preventive wellness.

Several transformative milestones were achieved during the year, including:

• Acquisition and integration of One Pet Stop;

• Launch of Indias first 24?7 pet diagnostic centre;

• Expansion of dedicated pet ambulance services;

• Commissioning of a specialised functional foods manufacturing facility;

• International launch of Freossi in Sri Lanka;

• Expansion of product registrations across international markets.

The Companys strategy extends beyond traditional veterinary healthcare. Each initiative addresses a critical touchpoint in the pet-owner journey, creating a connected ecosystem that strengthens customer engagement, recurring revenue opportunities and long-term brand loyalty.

The combination of therapeutics, diagnostics, retail, nutrition and healthcare services creates significant competitive differentiation and establishes a platform that few participants currently offer in the Indian market.

Management views Pet Healthcare as a long-duration value creation opportunity and expects the segment to emerge as one of the most significant contributors to future growth over the next seven years.

(c) Nutraceuticals & Preventive Healthcare (Fredun Nutrition)

The Nutraceuticals division continued to strengthen its position within Indias rapidly expanding preventive healthcare market.

Growth during FY26 was led by flagship brands including Mamalait and Fredmax, supported by continued portfolio expansion across high-growth wellness categories such as womens health, mens wellness, immunity support, fertility care, liver health, gut health, joint and bone care and preventive wellness solutions.

The Companys pharmaceutical heritage provides a meaningful competitive advantage through formulation expertise, quality systems and healthcare practitioner engagement.

Unlike commodity supplement brands, Fredun Nutrition focuses on clinically positioned and science-backed formulations designed to address specific health concerns. This approach continues to strengthen both consumer trust and medical practitioner acceptance.

The division also benefits from distribution synergies through the Companys pharmaceutical network while simultaneously expanding its reach through modern trade, healthcare practitioners and digital commerce platforms.

Management believes the increasing consumer focus on preventive healthcare and wellness will continue to support strong growth prospects for this business over the next five to six years.

(d) Cosmeceuticals & Personal Care (BeautyFred)

The Cosmeceutical business continued to gain momentum through the BeautyFred and Bird n Beauty platforms.

The portfolio crossed 200 SKUs during FY26 and offers a diversified range of skincare, wellness and personal-care products developed using pharmaceutical-grade formulation expertise.

A key differentiator remains the Companys pioneering use of Emu Oil and other scientifically supported active ingredients, enabling products that combine therapeutic e_icacy with consumer appeal.

The segment benefits from several structural growth drivers:

• Rising demand for ingredient-led skincare products;

• Rapid expansion of beauty e-commerce channels;

• Growing consumer preference for preventive skincare solutions;

• Increasing overlap between healthcare, wellness and beauty categories.

The Companys dedicated manufacturing facility continued to scale operations successfully, producing over one million bottles and supporting increasing market demand.

BeautyFred also benefits from natural synergies with Fredun Nutrition, allowing the Company to address wellness and personal-care needs across a broader consumer lifecycle while increasing share-of-wallet opportunities.

Management believes the convergence of healthcare, beauty and wellness presents a significant long-term opportunity for creating scalable consumer brands.

(e) Mobility, Rehabilitation & Home Healthcare

The Mobility and Rehabilitation division continued to strengthen its position within Indias rapidly growing home healthcare market.

The Companys portfolio now comprises more than 190 products marketed under brands including Chuu Balm, BraceOn, NebOn and DigiOn. The product range addresses multiple healthcare needs including orthopaedic support, rehabilitation, respiratory care, pain management and home health monitoring.

The business witnessed strong traction across Tier-II and Tier-III markets while continuing to secure institutional opportunities through organisations such as MMRDA and multiple state government programmes.

The segment benefits from several favourable long-term trends:

• Indias ageing population;

• Increasing prevalence of musculoskeletal conditions;

• Growing preference for home healthcare solutions;

• Expanding healthcare penetration in smaller cities and towns.

Chuu Balm has emerged as a recognisable consumer brand in the pain-management category, while BraceOn, NebOn and DigiOn continue to expand their presence within mobility and rehabilitation solutions.

The Company is also expanding into physiotherapy-focused products and developing specialised solutions under the proposed Mobilytics platform aimed at rehabilitation professionals and healthcare institutions.

Among Freduns emerging businesses, Mobility represents one of the shortest pathways to scale, with management expecting meaningful growth over the next three years.

(f) Healthcare Retail & Omnichannel Distribution (Wagr Retail)

During FY26, the Company further strengthened its consumer-facing healthcare ecosystem through Wagr Retail Private Limited.

Wagr has been established as a scalable omnichannel

platform focused on healthcare, wellness, pet care and lifestyle products, enabling deeper consumer engagement across Freduns growing portfolio of brands.

The platform is expected to play a strategic role in enhancing direct consumer access, strengthening digital commerce capabilities, improving brand visibility, supporting cross-selling opportunities and building a unified consumer healthcare ecosystem.

As healthcare consumption increasingly shifts toward digital and omnichannel models, Wagr is expected to become a critical enabler of future growth by connecting products, services and consumers through a single integrated platform.

(g) DAULC?L – Premium Wellness & Longevity Platform

During FY26, the Company expanded its presence in the rapidly evolving wellness and preventive healthcare segment through the launch of DAULC?L, a premium wellness brand focused on longevity, cellular vitality and healthy ageing.

Positioned at the intersection of science-led innovation and consumer wellness, DAULC?L is designed to address the growing demand for wellness optimisation, recovery-focused healthcare and long-term healthy living. The launch represents Freduns strategic entry into emerging high-growth wellness categories and reinforces the Companys commitment to building a diversified and future-ready healthcare platform.

A key milestone during the year was the introduction of Indias first NAD+ based wellness offerings, aimed at supporting cellular wellness, vitality and healthy ageing. Leveraging Freduns formulation expertise, healthcare heritage and quality-focused approach, DAULC?L seeks to establish a differentiated presence within the premium wellness market.

Management believes that rising consumer awareness around preventive healthcare, longevity and wellness optimisation presents a significant long-term opportunity. DAULC?L complements the Companys existing pharmaceutical, nutraceutical and consumer healthcare businesses while creating a new growth platform within premium wellness and longevity-focused healthcare categories.

(h) Hormone Health & Specialty Therapeutics

During FY26, the Company further expanded its specialty healthcare portfolio through the launch of its Hormone Range Products, a premium therapeutics platform focused on longevity, hormone health, recovery science and human performance solutions.

The initiative marks Freduns strategic entry into a rapidly expanding, high-value healthcare segment driven by increasing demand for preventive healthcare, healthy ageing, metabolic wellness and performance-oriented therapeutics. Built on a doctor-led, ethical and evidence-based pharmaceutical model, the platform combines clinical expertise with patient-centric engagement to deliver outcome-focused healthcare solutions.

The Hormone Range Products platform is designed to address the growing shift from traditional disease management towards healthy lifespan optimisation, preventive care and advanced performance therapeutics. The portfolio complements Freduns nutrition and wellness ecosystem and enables the Company to offer a more comprehensive approach towards preventive healthcare, vitality, recovery and performance optimization.

Key strategic highlights include:

• Expansion into high-growth longevity and specialty hormone therapeutics

• Doctor-led and evidence-backed approach focused on clinical outcomes

• Premium positioning in hormone health, recovery science and performance care

• Focus on differentiated, precision-driven and high-value therapeutic categories

• Strengthening Freduns innovation-led specialty pharmaceutical portfolio

• Leveraging existing formulation, manufacturing and distribution capabilities

Management believes that increasing awareness around hormone health, longevity, metabolic wellness and preventive healthcare presents a significant long-term growth opportunity. The initiative further reinforces Freduns vision of building a diversified and future-ready healthcare platform spanning pharmaceuticals, wellness, consumer healthcare and advanced specialty therapeutics.

(i) Fredun Mobilytics

The launch of Fredun Mobilytics marks another strategic milestone in the Companys journey of building an integrated healthcare platform. Focused on rehabilitation, physiotherapy, and preventive healthcare, the business addresses a large and underpenetrated market supported by favorable demographic and healthcare trends.

Backed by the Companys established market presence, distribution reach, and product development capabilities, Fredun Mobilytics is positioned to capture emerging opportunities across rehabilitation and wellness categories. Management views this business as a scalable growth vertical with significant potential to drive revenue diversification, expand market presence, and create enduring shareholder value over the long term.

Segment Outlook

Fredun today is significantly more than a pharmaceutical company. The Company has evolved into a diversified healthcare platform operating across Pharmaceuticals, Pet Healthcare, Nutraceuticals, Cosmeceuticals, Mobility & Rehabilitation, Healthcare Retail, Premium Wellness and Specialty Therapeutics.

While the Generics business continues to provide stability, cash generation and international market access, the Companys emerging verticals—including Freossi, Fredun Nutrition, BeautyFred, Wagr Retail, DAULC?L and Hormone Range Products—are creating multiple avenues for growth across some of the fastest-growing segments of the healthcare industry.

With expanding manufacturing infrastructure, growing consumer brands, increasing international presence and a diversified healthcare ecosystem, Fredun is well positioned to capitalise on evolving healthcare trends and create sustainable long-term value for shareholders.

Management remains focused on operational excellence, innovation, brand building, strategic capital allocation and disciplined execution as it continues its journey towards becoming a globally recognised and diversified healthcare enterprise.

4. FINANCIAL PERFORMANCE REVIEW

FY26 was a defining year in Fredun Pharmaceuticals Limiteds growth journey, marked by record financial performance, meaningful margin expansion and continued progress in building a diversified healthcare platform. The Companys strong execution across established and emerging businesses enabled it to deliver robust growth while simultaneously strengthening profitability, financial resilience and long-term growth visibility.

The year demonstrated the effectiveness of Freduns strategy of combining a stable pharmaceutical foundation with high-growth healthcare and wellness verticals. As a result, the Company delivered its highest-ever revenue, EBITDA and profit performance, reinforcing managements confidence in the scalability of its business model and the sustainability of its growth trajectory.

Record Financial Performance

FY26 witnessed strong momentum across key financial

Particulars (_ Crore)	FY26	FY25	Growth (%)
Total Income	639.12	456.27	40.08%
EBITDA	94.79	55.10	72.05%
EBITDA Margin (%)	14.83%	12.08%	+276 Bps
Profit After Tax	33.21	20.81	59.59%
PAT Margin (%)	5.20%	4.56%	+64 Bps

parameters, reflecting healthy demand conditions, operational excellence and increasing contributions from diversified business segments.

The Companys performance underscores its ability to deliver profitable growth while steadily improving the quality of earnings and strengthening shareholder value creation.

Revenue Growth Driven by Diversification

Total Income increased by 40.08% to _639.12 crore during FY26, reflecting broad-based growth across the Companys healthcare ecosystem. Growth was supported by continued expansion of exports, increasing contribution from branded generics, institutional business wins and growing traction across Pet Healthcare, Nutraceuticals, Cosmeceuticals, Mobility Solutions and Wellness initiatives.

Importantly, the Companys growth is becoming increasingly diversified, reducing dependence on any single product category or market while creating multiple avenues for future expansion. This diversified model provides greater resilience, enhanced scalability and stronger earnings visibility.

Margin Expansion Reflects Improving Business Quality

One of the most encouraging aspects of FY26 performance was the significant improvement in profitability metrics.

EBITDA increased by 72.05% to _94.79 crore, substantially outpacing revenue growth and demonstrating the operating leverage embedded within the business model. EBITDA Margin expanded by 276 basis points to 14.83%, reflecting a favourable product mix, growing contribution from branded and differentiated products, manufacturing e_iciencies and disciplined cost management.

The Companys ability to deliver margin expansion while simultaneously investing in future growth platforms highlights the strength of its operating framework and execution capabilities.

Strong Bottom-Line Growth

Profit After Tax increased by 59.59% to _33.21 crore, significantly outperforming topline growth and reflecting improved operational e_iciency across the organisation.

PAT Margin improved to 5.20%, further demonstrating the Companys focus on profitable growth and value creation.

The acceleration in earnings growth relative to revenue growth is a key indicator of improving business quality and validates managements strategy of increasing the contribution of higher-value products and differentiated healthcare platforms.

Building a Higher-Value Healthcare Portfolio

Over the past several years, Fredun has progressively evolved from a conventional pharmaceutical exporter into a diversified healthcare enterprise spanning pharmaceuticals, pet healthcare, nutraceuticals, cosmeceuticals, mobility solutions, healthcare retail, premium wellness and specialty therapeutics.

This evolution is strategically important as several of the Companys newer verticals operate in structurally attractive markets characterised by:

• Higher growth potential;

• Strong consumer engagement;

• Premium product positioning;

• Brand-building opportunities;

• Improved margin profiles;

• Long-term scalability.

As these businesses continue to mature, management expects them to become increasingly meaningful contributors to both revenue and profitability.

Financial Strength and Capital Discipline

The Companys improved operating performance translated into stronger cash-flow generation and enhanced financial flexibility during FY26. Continued focus on working capital e_iciency, prudent capital allocation and disciplined execution enabled the Company to strengthen its balance sheet while simultaneously investing for future growth.

Reflecting this progress, Infomerics upgraded Freduns credit rating to IVR BBB+ (Stable) from IVR BBB (Stable). The upgrade reinforces the Companys growing institutional credibility and provides a stronger platform for supporting future expansion initiatives.

Commitment to Shareholder Value Creation

The Board of Directors recommended a dividend of _0.70 per equity share and a bonus issue in the ratio of 2:1, reflecting confidence in the Companys future prospects and commitment to rewarding shareholders.

These initiatives are aligned with managements philosophy of balancing growth investments with consistent value creation for shareholders.

Outlook

Fredun enters FY27 with stronger fundamentals than at any point in its history. The Company is supported by an expanding manufacturing base, improving profitability profile, strengthened financial position and multiple growth drivers across its diversified healthcare ecosystem.

With established leadership in Generics and increasing momentum across Freossi, Fredun Nutrition, BeautyFred, Wagr Retail, DAULC?L and Specialty Therapeutics, management believes the Company is uniquely positioned to participate in some of the fastest-growing segments of the healthcare industry.

As Fredun continues to transition towards a branded, innovation-led and consumer-focused healthcare platform, the Company remains committed to delivering sustainable growth, enhancing profitability and creating long-term value for all stakeholders.

The foundations built over the last several years, combined with strategic investments made during FY26, provide management with confidence that the Company is entering its next phase of growth from a position of strength, scale and opportunity.

5. RISK MANAGEMENT

Fredun operates in a highly regulated and dynamic healthcare environment and has implemented a comprehensive risk management framework to identify, assess and mitigate key business risks. The Companys primary risk areas include regulatory compliance, product quality, supply-chain continuity, foreign exchange exposure and the execution of emerging growth businesses. Through strong quality systems, regulatory oversight, diversified sourcing, prudent financial management and disciplined capital allocation, the Company seeks to minimise risk while maintaining operational resilience. Management continuously monitors the evolving business environment and believes that Freduns diversified healthcare platform, expanding manufacturing infrastructure and established international presence position it well to manage potential challenges and capitalise on long-term growth opportunities.

6. Cautionary Statement

The statements contained in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or outlook may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors including economic conditions, regulatory changes, market dynamics, competitive pressures, foreign exchange fluctuations and other risks and uncertainties.

The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are advised to consider these statements in conjunction with the risks and uncertainties discussed elsewhere in this Annual Report.