Gujarat Themis Biosyn Ltd Management Discussions

Cautionary Statement:

The statements in the Management Discussion and Analysis Report describe the Companys objectives, projections, estimates and expectations which may be forward-looking statements within the meaning of the applicable laws and regulations. The actual results could differ materially from those expressed or implied, depending upon the economic and climatic conditions, government policies, taxation and other laws and other incidental factors.

Financial Overview:

The financial performance of the Company for the financial year ended 31 (st) March, 2026, is as follows:

Total revenue from operations stood at Rs. 165.82 Crores for the year ended 31(st) March, 2026 as against Rs. 150.80 Crores for the corresponding previous financial year.

The total cost of raw materials incurred (including changes in inventory) for the financial year ended 31(st)March, 2026 was Rs. 21.40 Crores as against Rs. 24.50 Crores for the corresponding previous period.

The EBITDA was Rs. 75.53 Crore for the year ended 31st March, 2026, as against Rs. 68.84 Crore for the corresponding previous period, a gain of 9.71%.

The finance costforthefinancialyearended31 st March, 2026 was Rs. 2.95 Crore as against Rs. 0.36 Crore for the corresponding previous period.

The PAT (profit after tax) was Rs. 46.68 Crores for the year ended 31 st March, 2026, as against Rs. 48.87 Crores for the corresponding previous period.

Resources and Liquidity:

The Company has maintained adequate liquidity during FY26. The debt-to-equity ratio stands at approximately 0.56 as of

31st March 2026, as compared to 0.12 as on 31st March, 2025, reflecting the capex-driven debt build-up. Operating cash flows remain healthy and the Companys internal accruals are expected to service repayment obligations comfortably over the near term.

Business Category Wise Performance:

GTBL operates in one key segment i.e. pharmaceuticals intermediaries and APIs. The Company is presently manufacturing Rifamycin S, which is an intermediate for manufacturing the drug Rifampicin (an antibiotic used for the treatment of several types of bacterial infections, including tuberculosis, Mycobacterium avium complex, leprosy, and Legionnaires disease); and Rifamycin O, which is an intermediate for manufacturing the drug Rifaximin (an antibiotic used for treatment of travellers diarrhea, irritable bowel syndrome, and hepatic encephalopathy).

Some key milestones during FY26 were the commissioning of new fermentation unit, and commencement of production (validation batches) at the Companys new, multi-purpose API manufacturing plant at Vapi, Gujarat. With a total capital investment exceeding Rs. 200 Crores, the Vapi facility is designed to produce a diversified range of synthetic and fermentation-based APIs, positioning the Company as a broader API player.

Source: https://www.gtbl.in

Source: https://www.bseindia.com/stock-share-price/gujarat-themis-biosyn-ltd/GUJTHEM/506879/corp-announcements/

Risks & Concerns:

The business of the Company is exposed to some risks.

Unfavourable Policy Changes

Drug pricing and other policies and laws are subject to changes by the Government. Any potentially adverse changes in government policies with respect to essential medicines and pricing with respect to the products may impact the revenue and/or margins of the Company.

Credit Risk

The Company follows a process for payments from clients as per schedule. GTBL has suitably streamlined the process to develop a focused and aggressive receivables management system to ensure timely collections. The Company continues to monitor this metric to be able to maintain healthy working capital.

Competition Risk

The Company operates in a competitive space, with the presence of domestic as well as Chinese peers. GTBL has key differentiators in terms of R&D, execution, quality and delivery which make it resilient to competition. The Company continues to invest in R&D and its talent pool to maintain a competitive edge. Stable and long-standing client relationships further help maintain a strong order book and insulate the Company from this risk. GTBL also mitigates this risk with its robust infrastructure and specialized fermentation-based methodologies, coupled with prudent financial and human resources management and tight control over costs.

Input Cost Risk impacted by changes in the prices of raw materials, power and Ourprofitability other input/utility costs. Thisisoffsetbystringentefficiency measures and power saving initiatives. The Company is also building hybrid renewable energy options to further reduce its power cost burden over the medium term.

Opportunities & Threats

Opportunities

Growth in Pharma Sector

Growth in the pharmaceutical sector continues to be driven by rising lifestyle diseases, an ageing population, increased focus on holistic health, and the growing consumerisation of healthcare. According to Bain & Co., the Indian pharmaceutical market stood at Rs. 4,71,295 Crores (US$ 55 billion) in 2025 and is expected to grow to Rs. 10,28,280 11,13,970 Crores (US$ 120 130 billion) by 2030. India allows 100% FDI under automatic approval for greenfield investments and up to 74% for brownfield investments, making it a prime destination for global investors seeking growth in the healthcare and life sciences domain.

Source: https://www.ibef.org/industry/pharmaceutical-india

Outsourced Manufacturing in Global Pharma Sector

There is an increasing trend of outsourcing manufacturing for various drugs and pharma products across the world.

Pharmaceutical research firms are increasingly looking to focus on R&D and outsource the manufacturing to companies that have requisite manufacturing expertise. Such trends present new opportunities for companies that can leverage their production capacities. The Contract Research and Manufacturing Service (CRAMS) segment is experiencing rapid growth which will augur well for the Company. The CRDMO industry is expected to double to Rs. 1,21,282 Crores (US$ 14 billion) by 2028, reinforcing Indias role in global supply chains.

Source: https://www.ibef.org/industry/indian-pharmaceuticals-industry-analysis-presentation

Government Support

Production Linked Incentive (PLI) Scheme: The PLI scheme for pharmaceuticals is being implemented with a total outlay of Rs. 15,000 Crores (US$ 2.04 billion) spanning 2020-21 to 2028-29 to boost Indias manufacturing capacity and diversify product offerings. In the first three years, pharma sales under PLI crossed Rs. 2.66 lakh Crores including exports of Rs. 1.70 lakh Crores. India transitioned from a net importer to a net exporter of bulk drugs with a surplus of Rs. 2,280 Crore in FY25.

Union Budget 2025-26 Pharma Allocation: The Union Budget 2025-26 allocated Rs. 5,268 Crores (US$ 602 million) for the Department of Pharmaceuticals, up 28.8% over the previous years budget estimate, reflecting the Governments sustained commitment to strengthening the sector.

Customs Duty Exemptions: The Union Budget 2025-26 proposed adding 36 life-saving drugs and medicines, including treatments for cancer and rare diseases, to the list of items fully exempted from Basic Customs Duty. This measure aims to improve the affordability and accessibility of essential medications.

Jan Aushadhi Kendras: 16,912 Jan Aushadhi Kendras are operational as of June 2025, with a target of 25,000 by March 2027, offering 2,110 medicines and 315 devices/consumables to promote affordable generic healthcare.

PRIP Scheme: The Scheme for Promotion of Research and Innovation in Pharma (PRIP) provides funding of Rs. 720.97 Crores to Centres of Excellence at NIPER and private-sector milestone-based research, advancing pharmaceutical innovation.

Source: https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=155082&ModuleId=3®=3&lang=2 Source: https://www.ibef.org/industry/pharmaceutical-india

Threats

Threat from Global Competitors

Indian pharma companies face competition from bigger, global pharma companies, backed by larger financial strength, as well as from China-based players. The dominance of Chinese API manufacturers in several key molecules continues to exert pricing pressure on Indian producers.

Threat from US Market Headwinds

While certain sub-segments of the pharmaceutical industry are presently not impacted by US tariffs, any uncertainty on tariffs on other pharmaceutical sub-segments could potentially impact global supply chains and Indian exporters.

Source: https://www.ibef.org/news/indian-pharmaceutical-sector-to-log-7-9-growth-in-fy26-despite-united-states-us-headwinds-icra

Threat from Generics

Generic drugs offer cost-effective alternatives significantsavings to customers. Increasing innovator drugs and adoption of such alternatives could impact market share of innovation-based drug developers, thereby indirectly affecting intermediate and API demand.

Internal Control System and Adequacy:

The Company ensures the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding 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, as required under the Companies Act, 2013.

The Statutory Auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit Committee of the Board. Other statutory requirements especially in respect of pharmaceutical business are also vigorously followed in order to have better internal controls over the affairs of the Company.

Industry Structure and Developments:

Global Leadership and Market Growth

Indias pharmaceutical sector benefits from cost advantages due to lower labour costs, economies of scale, and efficient manufacturing processes. This enables Indian firms to offer competitively priced products globally. According to ICRAs FY26 outlook, Indias pharmaceutical sector is projected to post revenue growth of 7 9% in FY26, supported by strong domestic demand and steady gains in Europe. The domestic market is expected to expand by 8 10%, driven by sales force expansion, wider rural reach, and new product launches. The pharmaceutical industrys total turnover stood at Rs. 2,25,000 Crores (US$ 26.26 billion) in FY25.

Source: https://www.ibef.org/news/indian-pharmaceutical-sector-to-log-7-9-growth-in-fy26-despite-united-states-us-headwinds-icra

Government Initiatives for the Pharmaceutical Industry

The Union Budget 2025-26 reflects a forward-looking and inclusive vision for the healthcare and pharmaceutical sectors, emphasising affordability, innovation, and self-reliance. Key policy highlights relevant to the pharmaceutical sector include: A significant 28.8% increase in budget allocation for the Department reinforcing the Governments commitment to the sector.

Customs duty exemptions on critical life-saving medicines including cancer drugs,reducing the financial burden on patients.

Strengthened emphasis on intellectual property rights (IPR) to encourage domestic pharmaceutical innovation and new drug development.

Strategic initiatives under the Make in India program to boost local API manufacturing, reducing import dependence and ensuring supply chain resilience for essential medicines.

Regulatory reforms to streamline approval processes for new drugs and medical devices, ensuring faster market access and better patient outcomes.

Public-private partnerships to foster pharmaceutical innovation, accelerate drug development, and improve healthcare delivery.

Source: https://www.expresspharma.in/union-budget-2024-25-reflects-a-forward-looking-and-inclusive-approach/ Source: https://www.ibef.org/industry/pharmaceutical-india

Companys Strategy:

GTBL is focusing on both organic and inorganic growth initiatives to capitalise on the rising opportunities in the pharmaceutical intermediates and API space.

One of the most transformative strategic development during FY26 was the commencement of production (validation batches) at the Companys new multi-purpose API manufacturing facility at Vapi, Gujarat, in May 2025. The facility is designed to manufacture a diversifiedrange of synthetic and fermentation-based APIs, enabling meaningful product and revenue diversification over the medium term.

The Company is also expanding its growth avenues through the capex programme aimed at enhancing its product portfolio and strengthening its positioning across the pharmaceutical value chain. During the year, the Company expanded its fermentation capacity and continued investments in R&D, new product development and forward integration into the API segment. Through these initiatives, GTBL aims to broaden its portfolio with additional fermentation-based molecules and a wider suite of APIs. Further, the Company is developing a hybrid renewable energy project aimed at reducing power costs and improving overall energy efficiency and sustainability.

These organic growth initiatives are complemented with the Companys inorganic growth strategy.

In April 2026, the Company entered into an agreement with Sanofi, the French-holding company of the Sanofi group, for the proposed acquisition of a portfolio comprising 13 established brands in the anti-TB and anti-infective segment. The portfolio has a commercial presence across more than 55 countries spanning Europe, Middle East and Africa markets and reported revenues of approximately EURO 62 million in FY25. The proposed acquisition is expected to strengthen the Companys forward integration strategy across intermediates, APIs and finished dosage formulations, while enhancing its global market presence and distribution capabilities.

Additionally, the Company incorporated a wholly owned subsidiary, Themis Biosyn Japan Limited, in Japan. Through this, the

Company is acquiring Japan-based Micro Biopharm Japan Co. Ltd. The acquired Company specializes in precision fermentation, and various other technologies and therapy areas. The acquisition will diversify and strengthen GTBLs portfolio of therapy areas across immunosuppressants, oncology and anti-infectives. The move will also add technical capabilities such as peptides, plasmids, ADCs and enzyme engineering, to GTBL. This acquisition includes 3 manufacturing units and access to new geographies across Asia and Europe. Overall, this aligns with the Companys aim to become a global CDMO player.

Source: https://www.bseindia.com/xml-data/corpfiling/AttachHis/fd6da361-2bce-497d-936b-de6a8697c8fb.pdf https://www.bseindia.com/xml-data/corpfiling/AttachHis/859126d4-79fe-47fb-80fe-9f8cb2fac6b9.pdf https://www.bseindia.com/xml-data/corpfiling/AttachHis/2230b114-c615-4129-b7c9-accef92a84e5.pdf

Discussion on Operational Performance:

The operational performance during the year under review improved sequentially. Q1 FY26 witnessed a temporary contraction associated with inrevenuesandprofitabilityreflecting the Vapi plant. From Q2 FY26 onwards, the Company achieved a meaningful recovery, with revenues climbing to Rs. 42 Crores in Q2 FY26 (highest quarterly revenue at that point) and further to Rs. 43 Crores in Q3 FY26. The Company has maintained optimal utilisation of its existing fermentation capacities and demand for both Rifamycin-based products has remained healthy.

The total revenue for the year stood at Rs. 165.82 Crores, compared to Rs. 150.80 Crores in the previous year. The Company continues to generate profit during the year under review. Operating profit margins have remained industry-leading at approximately 45% in FY26.

Source: https://www.bseindia.com/xml-data/corpfiling/AttachHis/4ca23e6a-1504-4cce-965a-0fe8dc1c1352.pdf

Source:https://www.marketsmojo.com/news/result-analysis/gujarat-themis-biosyn-q3-fy26-margin-pressures-test-premium-valuation-despite-sales-recovery-3823003

Material Developments in Human Resources / Industrial Relations Front, Including Number of People Employed:

The core of the Human Resource philosophy at Gujarat Themis Biosyn Ltd. is empowering human resources towards achievement of company aspirations. Your Company has a diverse mix of youth and experience which nurtures the business. The Company has invested in expanding its technical and operational workforce to support the operations at the new facilities in Vapi. As on 31st March 2026, the total employee strength was approximately 228 persons, reflecting operational stability across existing functions while capabilities in the new Vapi unit are being built up. in/profile/ Source: http://www.gtbl.

Outlook: part of the nations foreign trade and offers lucrative potential for The pharmaceutical industry in India is a significant investors. Millions of people around the world receive affordable and inexpensive generic medications from India, which also runs a sizable number of plants that adhere to Good Manufacturing Practices (GMP) standards set by the World Health Organization (WHO) and the United States Food and Drug Administration (USFDA).

India has long held a prominent position among nations that produce pharmaceuticals. The Indian pharmaceutical market is projected to grow from Rs. 4,71,295 Crores (US$ 55 billion) in 2025 to Rs. 10,28,280 11,13,970 Crores (US$ 120 130 billion) by 2030, according to Bain & Co. Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards therapies such as cardiovascular, anti-diabetes, anti-depressants, and anti-cancers for chronic diseases, which are on the rise.

The Indian Government has taken many steps to reduce costs and bring down healthcare expenses. The National Health Protection Scheme, which aims to offer universal healthcare, the ageing population, the rise in chronic diseases, and other government programmes including the expansion of Jan Aushadhi Kendras offering inexpensive generic medications should all contribute to boosting the Indian pharmaceutical industry.

For GTBL, the new API manufacturing facility and the expanded fermentation unit, are significant strategic developments in the Companys strategy. As the plant ramps up and new products receive regulatory approvals and customer qualifications, the revenue base is expected to grow meaningfully over the next two to three years. The Company has been investing in: R&D for new product development across fermentation-based and synthetic API molecules; Expanding fermentation capacities at the Vapi plant; and Forward integration into a broader API portfolio through the multi-purpose Vapi facility.

This capex is now operational, and the new facilities have been built to comply with global manufacturing standards. To complement these initiatives, the Companys inorganic growth strategy made headway recently. Two key developments in this area were the acquisition of Sanofi Frances portfolio of 13 brands, and the acquisition of Japan-based MicroBiopharm Japan Co. Ltd. The acquisition pertaining to Sanofi covers anti-TB and anti-infective therapies, and gives the Company access to distribution channels across over 55 countries.

The Japan-based acquisition, strengthens GTBLs fermentation capabilities, widens the therapy areas, and broadens the geographical market for the Company. Through this move, GTBL adds technical capabilities such as peptides, plasmids,

ADCs and enzyme engineering to its technical-know-how, as well as gains new therapy areas such as immunosuppressants, oncology and anti-infectives. The 3 plants which are part of this acquisition would boost GTBLs manufacturing muscle, and give access to new markets in Asia and Europe.

With such initiatives, GTBL is well positioned to capitalise on the significant growth opportunities in this sector going forward in both domestic and global markets, and transition towards becoming a Global CDMO player.

Source: https://www.ibef.org/industry/pharmaceutical-india Source: https://www.ibef.org/economy/economic-survey-2025-26 Source: https://www.screener.in/company/506879/