Genpharmasec Ltd Management Discussions

- Introduction:

Healthcare has become one of Indias largest sectors, both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services, and increasing expenditure by public as well as private players. Indias healthcare delivery system is categorised into two major components - public and private. The government, i.e., the public healthcare system, comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of Primary Healthcare Centers (PHCs) in rural areas. The private sector provides most secondary, tertiary, and quaternary care institutions with a major concentration in metros, tier-I, and tier-II cities

- Market Size:

The Indian healthcare sector, valued at Rs. 9,42,590 crore

The Indian healthcare market was valued at US$ 110 billion in 2016 and Rs. 31,87,668 crore (US$ 372 billion) in 2023, and is projected to reach Rs. 54,67,022 crore (US$ 638 billion) by 2025, growing at a robust 17.5–22.5% CAGR.

Healthcare spending accounted for 3.3% of Indias GDP in 2022 and is expected to rise to 5% by 2030, reflecting the sectors increasing role in the economy. India continues to expand its healthcare infrastructure. As of February 2026, the country has 13,88,185 registered allopathic doctors and 7,51,768 AYUSH practitioners, supported by a growing workforce of 39.40 lakh nursing personnel.

The Government continues to prioritise healthcare infrastructure through initiatives such as the Ayushman Bharat Health Infrastructure Mission, aimed at strengthening capacity and access across the country. In Union Budget FY26, the government allocated Rs. 95,957.87 crore (US$ 10.86 billion) to the healthcare sector, marking a 9.46% increase over previous allocations. This follows an allocation of US$ 13.84 billion in FY25, up from Rs. 1,09,007 crore (US$ 12.72 billion) in FY24. In July 2025, standalone health insurers premiums rose 10.4% to reach US$ 422.7 million, reflecting growing adoption and demand for coverage.

- Forward Looking Statement:

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend modify or revise forward looking statements on the basis of any subsequent developments information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include changes in government regulations tax laws economic developments within the country and such other factors globally.

The financial statements are prepared under historical cost convention on accrual basis of accounting and in accordance with the provisions of the Companies Act 2013 (the Act) and comply with the Accounting Standards notified under Section 211(3C) of the Act read with the Companies (Accounting Standards) Rules 2006. The management of Genpharmasec Limited has used estimates and judgments relating to the financial statements on a prudent and reasonable basis in order that the financial statements reflect in a true and fair manner the state of affairs and profit for the year. The following discussions on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the annual report.

- Overview:

The Company has obtained distribution rights from Abbott Point of Care, USA for distribution of their i-STAT Analysers and its Cartridges all over India since 2019. Our Company has tied up with Abbott Point of Care Corporation INC, USA for distribution of their niche diagnostic equipment namely, i-STAT 1 Analyzer which is a hand-held blood analyzer exclusively used in ICUs and ICCUs of hospitals for immediate test results. i-STAT 1 Analyzer is lightweight, portable and easy to use. It operates with the advanced technology of i-STAT test cartridges. Together they create the i- STAT system – a point-of-care-testing platform that provides healthcare professionals with diagnostic information when and where it is needed. Our Company supplies i-STAT 1 blood Analyzers to various distributors spread all over the country. These distributors supply the same to various government as well as private hospitals in their territory.

Similarly, the Company also entered into a non-exclusive Supper Stockist Agreement with Amneal Pharmaceuticals, Inc. (AHPL) to sell to wholesale pharmacist and/or retail pharmacist the products which are manufactured by AHPL and its third-party contact manufacture or third-party licensors.

The Directors of the Company are consistently making efforts to expand the business activities as depending exclusively one Company would result in stagnation of sales in the coming years. The Board of Directors from time to time has always considered the proposals for diversification into the areas which would be profitable for the Company.

We have formed a wholly-owned subsidiary namely, M/s. Clinigenome India Private Limited which will engage in establishing clinical laboratories in various major cities to capture ever-expanding and lucrative diagnostic segment.

We have also established our subsidiary in Dubai, UAE in which your Company holds 52% shareholding. This subsidiary will help us tap Middle East market for formulations manufactured in DHPL. We have obtained license from FSSAI to enable us to import food products through our subsidiary in Dubai.

Also we have acquired a 70% stake in Derren Healthcare Private Limited on 25th July, 2025, through Share Purchase Agreement (SPA) with one of the promoters of M/s. Derren Healthcare Private Limited (DHPL) and Share Subscription Cum Shareholders Agreement [SSSA]. Pursuant to which Darren Healthcare Private Limited became a subsidiary of the Company. DHPL is Company based in Ahmedabad with state-of-the-art manufacturing Injectables unit which holds WHO-GMP certificate and is in the process of applying for approvals of EU as well as US FDA. The production of injectables is going on in full swing in DHPL and is likely to achieve 90% capacity shortly which will boost our Revenue and consequently, profitability.

The Company is looking for obtaining distribution rights of various pharma products and diagnostic equipment manufactured by other MNCs to improve its bottom-line.

- Company Performance:

The Company is in Distribution of Diagnostic Equipments. The Company doing quite well in Diagnostic Equipment segments. The Company has shown much improved performance in this Segment and has earned profits before tax of Rs. 643.69 lakhs.

- Financial Performance:

Standalone:

During the financial year ended 31st March, 2026, the Company has recorded, on standalone basis, revenue of Rs. 13,134.94 lakhs as compared to the Revenue of Rs 3,296.07 lakhs in the previous year. The Profit before Tax for the FY 2025-26 is Rs. 643.69 lakhs as compared to Profit of Rs. 377.81 lakhs in the previous year. The Profit after Tax for the FY 2025-26 is Rs. 544.96 lakhs as compared to Profit of Rs. 280.04 lakhs in the previous year.

Consolidated:

On consolidated basis, the Company has recorded revenue of Rs. 13,993.77 lakhs as compared to the Revenue of Rs 3,372.18 lakhs in the previous year. The Profit before Tax for the FY 2025-26 is Rs. 97.07 lakhs as compared to Profit of Rs. 221.18 lakhs in the previous year. The Profit after Tax for the FY 2025-26 is Rs. 56.01 lakhs as compared to Profit of Rs. 156.28 lakhs in the previous year.

- Opportunities And Threats:

The over reliance on Companies namely, Abbott Point of Care, USA & Amneal Healthcare private limited (US Based) is not desirable. Therefore, the Company is trying to rope in other companies in order to strengthen its bottom-line and also to diversify in other sectors of Pharma business.

- Outlook:

The Company has gained lot of strength due to substitution of the Management and exploring opportunities in newer field of work thereby increasing its leverage and making it profitable venture. The expertise of the well experienced management will boost the Companys utilization of resources and is considered the greatest strength in making.

- Key Risks And Concerns:

The Company is now into distribution of Diagnostic pharma Equipments. The Company holds rights for distribution of such equipments namely, i-STAT Analyzers and its Cartridges manufactured by Abbott Point of Care, USA all over India. Similarly, the Company also holds rights to sell to wholesale pharmacist and/or retail pharmacist the products which are manufactured by Amneal Healthcare private limited (US Based) and its third-party contact manufacture or third-party licensors. The Company is taking efforts to obtain distribution rights from other established and well-known companies as well in order to mitigate risks which are usually associated with such line of businesses.

- Internal Control System and their Adequacy:

For the purposes of effective internal financial control, the Company has adopted various policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to companys policies the safe- guarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

There has not been any significant change in such control systems. The control systems are reviewed by the management regularly. The same are also reviewed by the Statutory Auditors and Internal Auditors from time to time. The Company has also adopted various policies and procedures to safeguard the interest of the Company. These policies and procedures are reviewed from time to time. There has also been proper reporting mechanism implemented in the organization for reporting any deviation from the policies and procedures. Compliance audit is also conducted from time to time by external agencies on various areas of operations.

- Human Resources Vis-?-Vis Industrial Relations:

The company recognizes the importance of human value and ensures that proper encouragement both moral and financial is extended to employees to motivate them. The human resources received commensurate attention during the year considering the growth of the organization and the need arising there from.

- Cautionary Statement:

The statements in the "Management Discussion and Analysis Report" section describe an optimistic approach of the management regarding the Companys visions strategies objectives projections estimates expectations and predictions. These may be "forward looking statements" within the meaning of legal framework. However, the annual performance can differ significantly from those expressed or implied depending upon the market conditions economic and climatic conditions Government policies and other incidental factors.