Granules India Ltd Management Discussions

Global Economic Review

In 2023, the global economy showed resilience despite significant challenges. The year began with supply-chain disruptions due to lingering post-pandemic effects, followed by surging inflation and a global energy and food crisis triggered by geopolitical tensions between Russia and Ukraine. Additionally, attacks on commercial shipping in the Red Sea caused a temporary rise in global transportation costs. Despite these challenges, global GDP grew by an estimated 3.2%, supported by robust employment growth, government spending and resilient household consumption. Though headline inflation peaked at 8.7% in 2022, causing economic concerns, it moderated to an average of 6.8% in 2023 due to synchronized monetary policy tightening by central banks. World Bank predicts high interest rates in 2024 and 2025 due to higher and stable commodity prices, geopolitical concerns and possibility of higher rates for longer in the US.

Despite geopolitical tensions and lingering economic headwinds, the outlook for the global economy is improving. The May 2024 Chief Economists Outlook from the World Economic Forum found that only 17% of economists surveyed expect conditions to worsen, a significant improvement compared to the 56% recorded in January 2024. This indicates a tempering down of the negative sentiment.

Indian Economy

In FY 2023-24, the Indian economy exhibited robust growth, with a GDP expansion of 8.2%. Various factors supported this growth, including strong private consumption, a government push for capital expenditure, and overall positive sentiment. Key sectors like manufacturing performed well, contributing to the overall economic expansion. Indias external sector remained resilient, with healthy merchandise exports and strong foreign investment inflows. Government support through increased capital expenditure and agricultural activities also played a crucial role in boosting economic grow. A strong corporate profitability and improved bank balance sheets facilitated increased credit flow across sectors, boosting economic activity. Inflation trend in FY 2023-24 showed a gradual decrease, with the inflation rate dropping to 4.85% in March 2024, the lowest in four months.

Looking ahead to FY 2024-25, the outlook is promising. The IMF projects a growth rate of 6.8% for India, while the Reserve Bank of India forecasts a growth rate of 7.2%. The governments support in the form of increased capital expenditure outlay for FY 2024-25, will be a key growth driver. Private consumption and public investment will likely fuel growth, while inflation moderation will likely support consumption trends.

Global Pharma Outlook

The global pharmaceutical industry experienced a significant surge in spending in 2023, driven by shifting usage trends across geographies. This growth spurt has led to a substantial increase in the outlook for medicine spending, with a

projected compound annual growth rate (CAGR) of 5-8% through 2028. Global spending on medicines at list prices is expected to reach $2.3 trillion by then.

The growth will be driven primarily by rapid expansion in emerging markets such as China, India, and other Asian regions, In contrast, North America, Western Europe, and Japan are expected to exhibit slower growth due to their already higher per capita use of medicines. Immunology, endocrinology, and oncology therapies have been driving medicine usage, with immunology treatments witnessing a 12% rise in utilization since 2018. GLP-1 agonist medicines have also been rapid uptake since 2021 in both diabetes and obesity, predominantly in the U.S. and other developed markets

The global pharmaceutical industry is poised for continued growth and innovation, driven by emerging markets, therapeutic advancements, and evolving healthcare needs. Despite challenges, the industry remains resilient and adaptable, ensuring it remains at the forefront of improving global health outcomes and accessibility to essential medicines.

Exhibit 2

Global Pharmaceutical Market Size and Growth Forecast (2024 to 2028) ($ bn)

Regions	2023	2019-2023 CAGR	2028	2024-2028 CAGR
Developed Markets	1,276	7.2%	1,775-1,805	5-8%
Pharmerging Markets	304	7.8%	400-430	10-13%
Other Markets	28	5.6%	33-37	3-6%
Global Pharmaceutical Market	1,607	7.3%	2,225-2,255	6-9%

Source : IQVIA Report titled, Global Use of Medicines 2024, Outlook to 2028

Global Generics Market

The growing use of generic drugs in developed and developing countries reflects the global shift towards more affordable healthcare. Generics have enhanced global health by improving access to treatment and saving costs for both healthcare systems and patients without compromising efficacy.

The growth trajectory of generics in various markets worldwide has been on a consistent upward trend. Presently, generic medicines occupy a significant 60%-80% share of all pharmaceutical volume sales in major markets around the world. This shift towards generics has been spurred partially by the expiration of patents on several branded and

blockbuster drugs. Ultimately, the main driving factor is the dramatic rise in healthcare expenditures around the world. As the ageing population increases with a corresponding increase in the prevalence of chronic diseases, many countries, have witnessed health spending outpace gross domestic product (GDP) growth.

The global generic market size grew to $319 at a CAGR of 4% between 2017 to 2022. Across the leading ten developed markets, the impact of brand losses of exclusivity in the next five years will likely increase by $111 bn to $192 bn, with $133 bn from small molecules and $59 bn from biologies, thus driving the growth in generics volume.

US Market

Overall spending growth in the US medicine market slowed to 2.5% in 2023, reaching $446 bn at net price level, reflecting a sharp decline in COVID-19 vaccines and therapeutics. Excluding COVID-19 vaccines and therapeutics, spending growth accelerated to 9.9%, driven by innovation in oncology, immunology, diabetes, and obesity.

The US medicine market will likely grow at a 2-5% CAGR over the next five years, reaching $537 bn in 2028. The key growth driver will likely be the increased usage of existing protected branded products, which will contribute substantially to overall spending over the next five years. However, the growth is expected to be impacted by the Inflation Reduction Act, which will result in spending estimates being 37% lower than invoice levels in 2023.

US Generics Market

Generic drugs are crucial in the US healthcare system, accounting for over 90% of prescriptions. The US generics market has witnessed a transformation since 1984, post implementation of the Hatch Waxman Act. Indian pharmaceutical companies supply a substantial proportion of drugs to US residents, with four out often of all prescriptions filled in the US in 2022 supplied by Indian companies. Indian companies supplied 47% of all generic prescriptions filed in the US and 15% of the volume of biosimilars.

Patent expiries over decades for products used by millions of patients have contributed to overall generic share of adjusted prescriptions reaching 92% ? including branded generics but contributes to only 13% of invoice-level expenditure. Over the past five years, generic share of invoice-level spending has dropped from 18.6% to 12.9% while the share of prescriptions has remained unchanged.

Price Erosion in the US Generics Market

The US generic pharma industry has been grappling with pricing pressure, supply chain issues, and cost inflation, severely impacting the margins of the players. The price erosion is attributed to several factors such as customer consolidation, intensified competition, and the US governments measures to reduce drug prices for customers. Generic prices have been deflating for several years, driven by an increase in the number of generic approvals. However, in 2023 these were offset by volume growth and resulted in a $1 bn contribution to market growth on a net basis. We anticipate that the resultant pricing pressure will lead

to the consolidation of the industry towards the stronger players who have better control over the supply chain and are capable of backward integration through innovative manufacturing technology.

Outlook for Patent Expiry and Loss of Exclusivity in US

Losses of exclusivity in the US will likely amount to $145.5 bn with significant impact on spending for both small molecules and biologies. Small molecule expiries are expected to reduce brand spending by $106 bn through 2028, more than double the impact of the last five years, including the impact of high- profile products in the anticoagulant therapy area, including rivaroxaban (Xarelto).

European Market

The European market is expected to increase by $70 bn over the next five years, from $226 bn in 2023 to $296 bn in 2028, driven by new brands and generics, including biosimilars. The impact of losses of exclusivity (LOEs) in the five largest

European markets is expected to more than double over the next five years to $32 bn, with over half of the impact attributed to biologies. The pace of economic and COVID-19 recovery, broader inflation concerns, and the effect of fuel commodity costs related to the Ukraine conflict will influence market dynamics and payer actions.

European Generics Market

Generics, including biosimilars, are expected to add $18 bn in growth over the next five years, about the same as in the past five years, despite a larger impact of LoEs as volume gains will be offset by price deflation.

The effect of LoEs in the five largest European markets (Germany, France, Italy, Spain, and the UK), are expected to more than triple over the next five years and more than half of the impact is expected to be biologies with $17.6 bn of the $32.2 bn total impact. Small molecule LoE is expected to double in terms of impact on brands in the next five years from $8.5 bn in previous 5 years to $14.5 bn in the next five years.

Japan

Japan medicine spending is forecast to remain nearly unchanged over 5 years as innovation is offset by shift to annual price cuts. Despite robust brand growth, the presence of generics and biosimilars will likely balance this increase. Generic share of spending is also expected to rise, supported by policies largely effective over the entire period, encouraging doctors to substitute available generics with a combination of incentives and penalties.

Pharmerging Markets

The growth trajectory of pharmerging markets is expected to be more influenced by volume rather than the adoption of expensive therapies. These markets typically rely on generics or non-original branded products, resulting in lower shares of spending on originator products compared to developed markets.

China is one of the largest markets in Pharmerging markets. Medicine spending in China has risen from $103 bn in 2014 to $163 bn in 2023. By 2028, China will likely exceed $197 bn, an increase of more than $30 bn in the next five years.

Over the Counter (OTC) Drugs Market

Over-the-counter (OTC) drugs are considered safe to buy without a prescription and are used to treat common symptoms of cold, body pain, allergy, flu, heartburn, acne, and other basic health problems.

Data Bridge Market Research shows the OTC Drugs market, is likely to grow up to USD 246 bn by 2030 with a CAGR

of 6.60%. Due to increasing self-medication practices, cold, cough, and flu products dominate the product type segment of the OTC drugs market.

Emergence of COVID-19 outbreak has considerably influenced the sales of OTC drugs with increased focus on personal health during the pandemic. This trend has augmented the intake of cold and flu products besides vitamins. Increasing availability and manufacturing of OTC drugs for a broad range of common disease conditions will significantly drive the over-the-counter drugs market revenue in the impending years. The frequent occurrence of the common flu and cold increases the need for treatments. Awareness on and demand for vitamin supplements and weight loss products will majorly contribute to the industry value during the forecast period. Cost-benefits, positive results and broader accessibility are projected to highly fuel demand for over-the-counter drugs.

Indian Pharmaceutical Industry

The Indian Pharmaceutical industry holds a significant position in the global market, with Indian companies playing a crucial role across the pharmaceutical value chain from producing active pharmaceutical ingredients (APIs) to the finished dosage formulations. India has emerged as a major player in the pharmaceutical sector, both in manufacturing and export. Indian Pharmaceutical Industry is the largest provider of generic medicines globally, with a 20% share in the global supply by volume and is also the leading vaccine manufacturer.

The Indian pharmaceutical sector encompasses various segments, including generic drugs, over-the-counter medications, bulk drugs, vaccines, contract research and manufacturing, biosimilars, biologies and active pharmaceutical ingredients (APIs).

The Indian pharmaceutical market (IPM) is poised for substantial growth, with medicine spending expected to reach $38-42 bn by 2028, reflecting a robust CAGR of 7-10% between 2024 and 2028. The countrys growing population, demographic and lifestyle changes, expertise in low-cost manufacturing, affordability, and access to modern medicines are critical growth drivers.

The countrys drugs and pharmaceutical exports increased 9.7% YoYto USD 27.9 bn in 2023-24, compared to USD 25.4 bn in 2022-23. The sectors top five export markets during the last fiscal year were the US, the UK, the Netherlands, South Africa, and Brazil.

The Indian pharmaceutical industry is poised for exponential growth, with market projections estimating a value of US$ 65 bn by 2024 and US$ 130 bn by 2030. With favorable government policies, increasing demand for innovative therapies, and a burgeoning global market, Indias pharmaceutical sector will likely scale new heights, solidifying its position as a worldwide leader in healthcare innovation and accessibility.

The Indian governments Production Linked Incentive (PLI) scheme is also crucial in bolstering the pharmaceutical industry, creating a conducive business environment that attracts potential investors to explore opportunities in the Indian market.

Company Overview

Granules India Limited (GIL) is a leading pharmaceutical manufacturing company recognized for its commitment to producing high-quality products and driving innovation. We operate as a fully integrated pharma manufacturer with a widespread global presence. Our success is attributed to our focus on manufacturing excellence and cost leadership centred around our core molecules. We have established ourselves as leaders in key molecules, attaining critical scale in the industry. While our growth was primarily driven by the US market, we are now expanding our footprint in Europe and other geographies, making significant progress in this region as well.

Throughout our journey, we have consistently maintained a solid track record in delivering superior quality, adhering to compliance standards, and prioritizing sustainability and ESG.

Strategy Roadmap

Granules is embarking on an exciting new phase, driven by our vision to take our business to new heights as a science and innovation-driven organization. Our strategic roadmap revolves around the continuous pursuit of manufacturing excellence, embracing innovation, and technology platforms in chemistry, with a strong focus on fostering sustainability.

We are committed to revolutionizing manufacturing by implementing sustainable practices such as bio-catalysis, process innovation, eco conscious product development, increasing use of renewable energy and renewable energy enabled green molecules as key ingredients into our products. By prioritizing sustainability as a central theme in our business approach, we aim to improve efficiency and reduce our environmental footprint. This comprehensive strategy positions us to achieve significant advancements and create a positive impact in the industry.

Our strategy focuses on three strategic levers led by our core capabilities, innovation and R&D and sustainability.

The first one is strengthening the core by building on our efforts around efficiency and cost leadership mitigating supply chain risks, growing market share, and moving up in the value chain across select markets.

The second strategic lever is Innovation and R&D across our entire value chain from finished formulations, API, and going all the way back to chemical intermediates by reimagining chemistry through innovative technology platforms that we are building.

The third part is to create a strategic leverthrough Sustainability play, we have committed to achieving Net Zero by 2050 and aligned to SBTis 1.5? pathway. We have conducted one of the most comprehensive assessments of our Scope 3 emissions in the pharma industry. We have finalized our net zero roadmap and initiated action plans on efficiency measures, adopting biofuels and renewable energy, supplier sustainability programs, and the green molecule platform through our subsidiary CZRO. The initiative aims to achieve the twin goals of healthy people and a healthy planet by using green energy, green energy enabled industrial feedstocks and creating circular economy around our products.

R&D Initiatives

In recent years, we have prioritized investments in building R&D capability and product pipeline. Our R&D investments reached Rs. 1,986 Mn in FY 24, representing 4.4% of our revenues, a significant uptick from previous years. These investments will help us broaden our capabilities, leading to increased focus on quality of our portfolio and higher number of regulatory filings in the future. We have exciting product pipelines in oncology, anti-diabetic segment, large-volume molecules, and select non OSD dosage forms.

Our R&D infrastructure includes Integrated Product Development Centre at Genome Valley, Hyderabad, formulations R&D at our subsidiary GPI, and two centers of excellence (COE) at Pragathi Nagar, Hyderabad?one dedicated to controlled substance APIs/KSMs and the other a bio lab for biocatalysis and fermentation capabilities.

Our R&D facility located at Genome Valley (MN Park) for integrated product development is functioning with over 170 scientists across the API and formulations divisions.

We have established the Pragathi Nagar R&D at Hyderabad as a center of excellence (CoE) for developing CM APIs and

KSMs/intermediates for our select APIs. This will strengthen our presence in controlled substances as we leverage Pragathi Nagars research and development capabilities in conjunction with the FD R&D of our subsidiary, Granules Pharma Inc (GPI).

The bio lab at Pragathi Nagar brings capabilities in fermentation and biocatalysis, along with a lab and pilot-scale manufacturing platform for enzyme-led projects.

We have completed the lab validation for two such products, and we are gearing up to establish commercial-scale manufacturing capacity at Unit V for their APIs and advanced intermediates. We have the ANDA approvals for the finished dosage, and with their backward integration enabled by differentiated technology platform, we are aiming to reach the leadership position in these molecules. strategic backward integration, supported by a dedicated team, enables us to consistently meet dynamic customer needs with precision and excellence.

API: FY23-24 Highlights

In FY23-24, our API business contributed 22% to our total revenues. We strengthened our API segment through strategic investments in research and development, overcoming challenges in Para API sales volumes and pricing dynamics. These initiatives bolstered our global market position, reaffirming our commitment to delivering high-quality active pharmaceutical ingredients. Our sustained focus on innovation and operational excellence ensured resilience amidst industry fluctuations, setting the stage for continued growth and leadership in the API market.

Revenues

Global Operations

Granules India Limited is a vertically integrated pharmaceutical company headquartered in Hyderabad, with operations in India, the US, and the UK. With over 300 customers in 80+ countries, we are a preferred supplier of high- quality pharmaceutical products. Our company has grown significantly over the years, driven by our commitment to product quality, operational excellence, and customer service.

Our Strengths

Our best-in-class manufacturing facilities, unwavering commitment to product quality, and culture of operational excellence have enabled us to maintain our position as a leading pharmaceutical company. We have a strong track record of delivering high-quality products to our customers on time and at competitive prices. Our vertical integration, scale, and manufacturing excellence have been source of competitive advantage that has enabled us to reduce costs and improve our profitability.

Business Segments

We operate in three primary business segments: active pharmaceutical ingredients (APIs), pharmaceutical formulation intermediates (PFI), and finished dosages (FD). Our API segment is one of the most cost-effective and efficient manufacturers of APIs, with a focus on improving our manufacturing capability to add new products to our portfolio. Our PFI segment has emerged as one of Indias largest PFI manufacturers, with sixtons of batch processing capacity. Our FD segment has sustainably grown, and currently contribute over 65% of our revenue. We have equipped our state-of- the-art manufacturing facility at Gagillapur with automated processes and superior-quality systems.

Active Pharmaceutical Ingredients (API)

We are recognized for our cost-effective and efficient manufacturing of APIs, positioning us as a leading supplier of paracetamol, metformin, guaifenesin, and methocarbamol. Our continuous efforts to enhance API manufacturing capabilities drive the expansion of our product portfolio. Most of our new PFI and FD products benefit from vertical integration with our APIs, ensuring seamless production and quality control. Emphasizing advanced technology and

mn)

FY 21-22 FY 22-23	FY 23-24
APIs 9,751 13,414	9,866

Pharmaceutical Formulation Intermediates (PFI)

We have established ourselves as one of Indias largest PFI manufacturers, boasting six tons of batch processing capacity. Our operations focus on achieving economies of scale and cost-efficiency, driving breakthroughs in the PFI sector. Our PFIs are designed for direct transfer from drums to hoppers, positioning us as a preferred supplier for leading global pharmaceutical companies.

PFI: FY23-24 Highlights

The PFI segment contributed 14% to our revenues in FY23- 24 and witnessed significant diversification in FY23-24, particularly in North America and Europe. Strategic product launches and regulatory approvals underscored our capability to expand our market presence and address evolving healthcare needs. Enhanced manufacturing capacities and streamlined operations strengthened our competitive edge, positioning us globally as a preferred partner in pharmaceutical formulations and intermediates.

	FY 21-22	FY 22-23	FY 23-24
PFIs	8,456	9,021	6,107

Finished Dosages (FD) Segment

Over the years, we have significantly expanded our FD capabilities, constituting more than 64% of our revenues. Our current portfolio includes caplets, tablets, and press- fit capsules available in bulk, blister packs, and bottles. Our facility also manufactures bilayered tablets, rapid release tablets, and extended release (ER) tablets. We leverage and optimize our unique manufacturing platform across India (GIL) and the US (GPI, GPAK) to achieve market leadership in the US finished dosage segments.

FD: FY23-24 Highlights

The FD segment contributed 64% to our total revenue in FY24. Our FD segment emerged as a pivotal driver of revenue growth in FY24, driven by robust sales of GPI-manufactured

products and expanded market penetration in key regions such as North America and Europe. The successful commissioning of our Genome Valley facility in March 24 significantly augmented our production capabilities, going forward, supporting increased demand and reinforcing our leadership in finished dosage formulations. This expansion underscores our commitment to meeting global healthcare demands with quality and efficiency.

Revenue

(Rs.mn)

	FY 21-22	FY 22-23	FY 23-24
FDs	19,442	22,684	29,090

Despite competitive pressures, we achieved robust growth in North America, driven by strategic expansions in market share across key molecules. Revenue in this region contributed significantly to our overall performance, reflecting our strong position and continued focus on high-value segments. For the GPI-marketed products, seven of our products rank #1 (MAT March 2024), contributing 70% to our GPI revenues. We also have growing OTC business through partnership with brand owners and leading retailers in the US. We have market leadership for two of these products.

Sustainability Initiatives

At Granules, we are steadfast in our commitment to achieving net-zero emissions by 2050, aligning with the Science Based Targets initiatives (SBTi) 1.5?C pathway. We have conducted one of the most comprehensive assessments of Scope 3 emissions. We have finalized a detailed net-zero roadmap and initiated action plans that focus on efficiency measures, biofuel adoption, and renewable energy integration. The launch of our Green Pharma initiative (CZRO) underscores our dedication to sustainable backward integration for critical products such as paracetamol and metformin. Furthermore, the commencement of operations at a pilot plant for DCDA in Vizag marks a significant step towards larger commercial facilities promoting green chemistry. Supplier sustainability programs and developing a green molecules platform bolster our ongoing efforts to improve environmental performance.

Enterprise Risk Management at Granules

Granules has a holistic enterprise risk management (ERM) program that facilitates identifying, assessing, and prioritizing enterprise risks across our sites and functions. We have developed risk repositories for each site and function, based on which enterprise risks are identified and prioritized for effective and timely risk mitigation. The objective of our ERM program is to minimize and mitigate potential internal and external risks to achieve strategic objectives and explore opportunities in a risk-informed manner to protect and enhance value.

Read our detailed Enterprise Risk Management on Page 28

Financial Review

Consolidated abridged Profit & Loss Statement

(Rs. in millions)

Particulars	FY24	FY23
Revenue	45,063.67	45,119.17
EBITDA	8,559.80	9,138.19
PAT	4,053.10	5,165.97
EPS	16.73	21.05

Revenue from Operations

Revenue for FY24 remained almost flat compared to FY23. This stability in revenue was achieved despite challenges such as a cyber-attack and declining Paracetamol API sales. The companys strategic focus on formulations and the introduction of new products contributed to sustaining the turnover year-on-year.

EBITDA

EBITDA for FY24 was Rs. 8,560 million, as compared to Rs. 9,138 million in FY23. The decline is primarily attributed to increased R&D spending. However, the value-added percentage of sales increased, driven by higher finished dosage (FD) sales and lower material costs. Despite the decline, the Company maintained a healthy EBITDA margin of 19.0%.

Consolidated Balance Sheet

Assets

Total assets increased to Rs. 55,209.82 million as of March 31, 2024, up from Rs. 49,045.64 million in the previous year, driven by investments in tangible and intangible assets, reflecting ongoing capacity expansions and technological advancements.

Equity and Liabilities

Total equity increased from Rs. 28,349.09 million as of March 31, 2023, to Rs. 32,255.44 Mn as of March 31, 2024, primarily due to profit generated during FY24.

in millions)

Particulars	As on March 31, 2024	As on March 31, 2023
ASSETS
Tangible and Intangible Assets	23,673.16	21,503.03
Non-Current Assets other than	2,486.18	1,801.13
above
Current Assets	29,050.48	25,741.48
Total Assets	55,209.82	49,045.64
EQUITY AND LIABILITIES
Total equity	32,255.44	28,349.09
Non-Current liabilities	2,131.45	2,561.54
Current liabilities	20,822.93	18,135.01
Total Equity and Liabilities	55,209.82	49,045.64

Debt position

Total debt stood at Rs. 12,232.26 million, up from Rs. 10,586.22 million in FY23, reflecting increased short-term borrowings to support operational needs

(Rs. in millions)

Particulars	As on March 31, 2024	As on March 31, Change 2023
Long-term debt (Current portion)	1,000.15	990.96 9.19
Long-term debt (non-current portion)	689.71	1,486.44 (796.73)
Short-term borrowings	10,542.40	8,108.82 2,433.58
Total Debt	12,232.26	10,586.22 1,646.04

Cash flow

Cash Flow from Operations

Cash flow from operations for FY24 was Rs. 4,394 million, down from Rs. 7,387 million in FY23. This decrease was primarily due to lower EBITDA and an increase in inventory holding days.

Capital expenditures (Capex)

Capex during FY24 totalled Rs. 3,788 million, primarily invested in Granules Life Sciences and Granules CZRO, supporting strategic growth initiatives and operational expansions.

in millions)

Particulars	For the year ended March 31,2024	For the year ended March 31,2023
Opening Cash and Cash equivalents	2,915.57	1,847.14
Cash flow from Operating activities	4,394.14	7,387.49
Cash flow from Investing activities	(3,601.6)	(1,913.63)
Cash flow from Financing activities	76.64	(4402.9)
Effect of exchange rate changes	26.25	(2.53)
Closing cash and cash equivalents	3,811.00	2,915.57

Financial Ratios

Key Ratios	As on March 31, 2024	As on March 31, 2023	% Variance	Reason for Variance (if more than 25%)
Debtors Turnover	4.66	4.82	(3%)
Inventory Turnover	3.68	4.24	(13%)
Interest Coverage Ratio	6.17	13.29	(54%)	Rise in finance cost is attributed to the increase in the SOFR rate.
Current Ratio	1.40	1.42	(2%)
Debt Equity Ratio	0.38	0.37	2%
EBITDA Operating Profit Margin (%)	19%	20%	(6%)
Net Profit Margin (%)	9%	11%	(21%)
Return on Net Worth (%)	14%	21%	(33%)	Decrease in profit during current year is due to cyber incident and decline in Para API Volume.

Internal Control Systems and Adequacy

Commensurate with the size and nature of operations, the Company maintains adequate systems of internal control and procedures covering all financial and operating functions. It believes that a strong internal control framework is one of the most indispensable factors of Corporate Governance. Continuous efforts are being made to enhance the systems responsiveness to unauthorized use or losses. The audit committee oversees all aspects of internal functioning and advises on corrective actions as and when required.

Cautionary Statements

Certain statements in the Management Discussion and Analysis describing the Companys objectives and predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties, including the effects of economic and political conditions in India.