Ind-Swift Laboratories Ltd Management Discussions

ECONOMIC OVERVIEW

A TOUR OF THE

GLOBAL ECONOMY

OVERVIEW

The global economy is projected to grow 3.0% in 2025 and 3.1% in 2026 (IMF), with emerging markets outpacing advanced economies at 4.1% growth. East Asia remains the primary growth driver, while Latin America and Europe see slower momentum. Persistent headwinds—trade tensions, high debt, and demographic shifts—continue to weigh on prospects. MENAs growth is supported by strong energy revenues, and technology-driven transformation, especially AI and green investments, is emerging as a key lever for sustainable recovery.

UNITED KINGDOM

Modest Recovery Amid Structural Headwinds: KPMG forecasts a gradual rebound in the UK economy, with GDP growth expected to improve to 1.2% in 2025, stabilising near 1.1% in 2026. Despite easing global trade tensions and potential new trade agreements, broader uncertainty continues to temper the recovery.

Infiation, Interest Rates & Consumption Dynamics: Headline inflation is projected to remain slightly elevated, averaging 3.4% in 2025 before subsiding to around 2.3% in 2026, inching closer to the Bank of Englands 2% target . In response, base interest rates are expected to fall gradually, from 4.75% in 2024 to 3.75% in 2025, and further to 3.25% by the end of 2026. As financial conditions ease, consumer spending is projected to gain traction, rising by 1.1% in 2025, followed by 1.4% in 2026.

ASIA PACIFIC

The Asia-Pacific region (excluding China and Japan) remains a key global growth engine, led by economies like India, Indonesia, Vietnam, and the Philippines. According to the IMFs World Economic Outlook (April 2025), emerging and developing Asia (excluding China) is projected to grow at 5.2% in 2025, outpacing the global average of 3.3%. Vietnam is expected to expand by 6.3%, while Indonesia is projected to grow at an average annual rate of 4.9% between 2025 and 2027, supported by domestic consumption and strong commodity exports. The region is also benefiting from supply chain diversification, with increased FDI flows into Southeast Asia amid global realignment.

Digital infrastructure expansion, urbanisation, and middle-class consumption are driving structural growth. However, the region faces external risks from geopolitical tensions and high global interest rates, which could affect capital flows and currency stability. However, the region is facing headwinds.

Weak global trade recovery.

Higher borrowing costs for frontier economies. Climate vulnerabilities impacting agriculture and infrastructure.

Still, resilience is evident in strong domestic demand and demographic advantages.

LATAM REGION

The International Monetary Fund (IMF) now projects growth of 2.0% for Latin America and the Caribbean in 2025, down from earlier forecasts of 2.5% driven largely by a sharp contraction in Mexicos economy. Mexico is expected to shrink by 0.3%, while Brazil, the regions largest economy, is projected to grow at 2.0%. Argentina is set to rebound strongly at 5.5%. The UNs ECLAC similarly forecasts a 2.0% regional growth, with South America at 2.5%, Central America and Mexico at 1.0%, and the Caribbean at 1.8%.

Infiation & Monetary Trends

Infiation remains stubborn in several economies, keeping central banks cautious. Argentina continues to grapple with elevated inflation, while Chile and Colombia face stickier pressures. Regional inflation outlooks are still trending downward, but not at a pace that would necessitate forceful easing.

MENA REGION

The MENA regions economic recovery continues to advance, albeit cautiously. Real GDP growth is expected to rise moderately from 1.9% in 2024 to 2.6% in 2025, with a further uptick to 3.7% in 2026, according to the World Banks latest Middle East and North Africa Economic Update. Gradual increases in oil production are bolstering growth among GCC countries, while oil-importing economies are benefiting from stronger private consumption, easing inflation, and a recovery in agriculture.

Looking slightly ahead, broader forecasts suggest that the MENA region could see growth strengthen to 2.7% in 2025 and rise to an average of 3.9% in 2026–27, driven primarily by oil sector expansion and improved activity in conflict-affected areas.

GCC Outlook: Growth Stabilising on Smart Spending

According to the World Bank, the economies of the Gulf Cooperation Council (GCC) are poised to grow by 3.2% in 2025, recovering from the subdued performance of the previous year. The easing of OPEC+ production cuts and a continued surge in non-oil sectors such as tourism, real estate, and financial services primarily drive the rebound. Growth is expected to accelerate further to 4.5% in 2026, signalling steady momentum in the medium. A defining aspect of this recovery is the shift towards smart fiscal spending.

Governments are increasingly prioritising investment in productivity-enhancing sectors such as education, digital infrastructure, and renewable energy over short-term fiscal stimulus. For instance, Kuwait is forecasted to rebound with 2.2% GDP growth in 2025, largely supported by prudent budgeting and public sector reform.

This strategic approach to public finance is expected to enhance economic resilience, reduce oil dependency, and support inclusive growth across the GCC in the coming years.

However, these projections are accompanied by increased uncertainty. The outlook remains vulnerable to geopolitical shocks, volatile global oil markets, and a historically weak private sector, which faces structural limitations. To transform economic aspirations into sustainable performance, the region must catalyse private-sector-led investment, enhance resilience to external shocks, and make progress on long-overdue structural reforms.

INDIAN ECONOMY: A PILLAR OF PROGRESS

Indias economic runway is clear, and pharma is in the pilots seat. With strong domestic fundamentals, export momentum, and policy reinforcement, India remains not only the "Pharmacy of the World," but also a dependable engine of global health and growth.

Resilient Growth Amid Global Uncertainty

India has remained one of the worlds fastest-growing major economies in FY25, demonstrating resilience amid global headwinds. According to the Ministry of Finance and the IMF estimates, Indias GDP is projected to grow by 6.8% in FY25, driven by strong domestic demand, a vibrant services sector, and an expanding industrial base. The manufacturing sector, including pharmaceuticals, continues to benefit from policy incentives, rising healthcare demand, and a favourable investment climate.

With a GDP of USD 4.19 thousand billion, India is now the fifth-largest economy globally and poised to become the third-largest by 2027. Urbanisation, rising disposable income, and government-led reforms are enhancing consumption and making India an attractive destination for both domestic and foreign investors.

THE PHARMA SECTOR

1) Global Pharma Sector

The global drug formulation market is estimated at around USD 1.85 trillion in 2024, and is projected to expand to approximately USD 3.32 trillion by 2034, with a compound annual growth rate (CAGR) of 6.05% over the period. This robust expansion is being propelled by chronic disease prevalence, an ageing global population, rapid innovation in biologics, personalised delivery systems, and advanced drug technologies.

Oral formulation systems are anticipated to account for 43.2% of the global market share in 2025, leading the dosage form segment. Further depth is provided by the advanced drug delivery segment, valued at USD 43.85 billion in 2022 and projected to surpass USD 137.33 billion by 2030, expanding at a robust CAGR of 13.4%.

ASIA PACIFIC

The broader Asia-Pacific pharmaceutical manufacturing market, which encompasses formulation activities, was valued at approximately USD 97.1 billion in 2023 and is projected to more than double to USD 207.2 billion by 2030, reflecting a robust CAGR of 11.4%. Growth is being driven by rising demand for biologics and biosimilars, which are expected to post the fastest gains. At the same time, small-molecule drugs continue to account for the largest share of revenues.

Within this landscape, the Contract Development and Manufacturing Organisation (CDMO) segment recorded revenues of USD 55.0 billion in 2023 and is forecast to reach USD 93.0 billion by 2030, expanding at a healthy 7.8% CAGR.

Overall, the Asia-Pacific pharmaceutical market is expected to grow from USD 354.0 billion in 2024 to USD 662.9 billion by 2033, achieving a CAGR of 7.2%. This expansion reflects a combination of demographic trends, increasing healthcare access, strategic government initiatives, and the regions rising prominence in global pharmaceutical supply chains.

UNITED KINGDOM

The United Kingdom remains a mature yet strategically significant player in the global pharmaceutical value chain, with a strong focus on formulation development, contract manufacturing, and the production of high-quality finished dosage forms.

In the formulation development outsourcing space, covering services such as pre-formulation, oral solid, injectable, and specialised dosage forms, the market was valued at approximately USD 346.5 million in 2023. This segment is projected to reach USD 1.10 billion by 2035, reflecting a robust 10.1% CAGR, driven by increased demand for complex formulations, advanced drug delivery systems, and regulatory-compliant outsourcing partners. From a manufacturing output perspective, the UKs pharmaceutical preparations manufacturing sector (finished dosage forms) generated approximately ?25.5 billion in revenue in 2024. However, between 2019 and 2024, the sector recorded a marginal contraction at –5.1% CAGR, reflecting pressures from global competition, cost restructuring, and evolving therapeutic priorities.

LATAM REGION

The Latin American pharmaceutical formulation sector is undergoing steady expansion, supported by increasing healthcare access, a growing chronic disease burden, and the rising prominence of generic drug manufacturing. In formulation development outsourcing, the South American market is estimated at USD 1.2 billion in 2024 and is projected to reach USD 2.36 billion by 2035, registering a CAGR of 6.34%. Brazil remains the dominant contributor, with its share expected to increase from USD 475.8 million in 2024 to USD 936.9 million by 2035, while other South American markets are also expected to deliver meaningful growth.

MENA REGION

The MENA pharmaceutical formulation sector continues to expand steadily, driven by demographic growth, rising healthcare expenditure, and strategic investments in local manufacturing to reduce dependency on imports. The broader pharmaceutical contract manufacturing and research services market in the region generated USD 11.01 billion in 2023 and is projected to reach USD 15.41 billion by 2030, reflecting a CAGR of 4.9%. Manufacturing remains the largest revenue contributor, supported by government-led incentives to localise production and meet national healthcare security goals. Meanwhile, research services are emerging as the fastest-growing segment, benefiting from a growing base of R&D partnerships with global pharmaceutical companies.

Overall, pharmaceutical manufacturing revenue for the wider MENA region—including finished dosage forms—was approximately USD 8.97 billion in 2023 and is projected to reach USD 15.17 billion by 2030, at a robust 7.8% CAGR. This growth is being accelerated by national healthcare localisation policies, increased adoption of technology-enabled production processes, and rising regional demand for chronic disease and speciality formulations.

INDIAN FORMULATION SECTOR

Market Size & Growth Outlook

Indias pharmaceutical manufacturing industry—home to one of the worlds most diverse formulation portfolios—was valued at USD 17.82 billion in 2023 and is projected to surpass USD 48.54 billion by 2033, reflecting a strong 10.54% CAGR over the decade. A key characteristic of this growth is the dominance of outsourced manufacturing, with contract manufacturing accounting for 54% of the total market in 2023. This share underscores the sectors shift towards flexible, scalable production models that cater to both domestic and international demand.

Domestic vs Export: A Balanced Growth Equation

Indias pharmaceutical industry, valued at over USD 65 billion, is well-balanced between domestic formulations demand and robust exports. The domestic market contributes approximately 30% of this value and is expected to grow at 10–12% CAGR through FY30, driven by increased healthcare access, chronic disease management, and expansion of insurance coverage.

Exports account for the remaining 70%, with India supplying over 200 countries. The US, UK, Africa, and Southeast Asia remain key markets for generic formulations. The country continues to maintain its global leadership in volume terms, exporting 20% of the worlds generic drugs by volume, according to Pharmexcil data.

Contract Manufacturing (CDMO/CMO) Momentum

The broader Contract Manufacturing Organisation (CMO) market in India is projected to nearly double from USD 19.63 billion in 2023 to USD 38.92 billion by 2028, at a rapid 14.7% CAGR.

This expansion is driven by:

Competitive manufacturing costs compared to Western markets.

Strong regulatory compliance, with facilities approved by the USFDA, EMA, MHRA, and other global agencies. There is a growing demand from global generics players for large-scale, quality-assured production.

Within this, the generic pharmaceuticals contract manufacturing segment alone was worth USD 3.21 billion in 2024 and is forecast to reach USD 6.05 billion by 2030 (11.3% CAGR), fuelled by Indias position as the worlds largest supplier of generics.

Specialised Formulation Segments

Topical Formulations (CDMO) – Valued at USD 1.72 billion in 2024, expected to reach USD 3.45 billion by 2030 (12.4% CAGR). Demand is being driven by dermatology, ophthalmology, and transdermal drug delivery products, where Indian manufacturers are expanding semi-solid and liquid topical capabilities. Fill–Finish Manufacturing – A critical segment for injectable and parenteral drugs, valued at USD 688.1 million in 2024, is expected to almost double to USD 1.32 billion by 2030 (11.4% CAGR). The growth is powered by biologics, vaccines, and biosimilars, alongside a global push for sterile manufacturing capacity.

Formulation Development Outsourcing (FDO)

Indias FDO market—covering pre-clinical to late-stage development—was estimated at USD 499.5 million in 2024, with projections of USD 1.22 billion by 2035 (8.4% CAGR).

Key drivers include:

Rising demand for complex dosage forms (modified-release tablets, nano-formulations, liposomal drugs). Partnerships with global pharma companies seeking cost-e ective, high-quality R&D support.

Increasing investment in analytical and bioequivalence studies, enabling faster time-to-market.

Policy Support and Flagship Schemes

Government initiatives are playing a catalytic role in strengthening Indias pharmaceutical footprint: Production Linked Incentive (PLI) Scheme: Launched with a financial outlay of C15,000 crore, the scheme incentivises the domestic manufacturing of key drug intermediates and high-value formulations, encouraging self-reliance and reducing import dependency. Jan Aushadhi Scheme: The government has expanded the reach of affordable generic medicines through over 10,000 Jan Aushadhi Kendras across the country, ensuring accessibility to essential drugs and increasing awareness around generics.

Heal in India and Pharma MedTech Expo Initiatives: These programmes promote medical tourism and position India as a global hub for pharmaceutical manufacturing, R&D, and healthcare services.

Evolving Regulatory and Compliance Landscape

Indias pharmaceutical regulatory ecosystem is undergoing transformational changes to enhance transparency, quality, and global alignment: The Central Drugs Standard Control Organisation (CDSCO) and Drug Controller General of India (DCGI) continue to implement stricter GMP norms, digitalisation of approvals, and real-time compliance monitoring.

The Revised Schedule M guidelines aim to align Indian GMP practices with WHO standards, enhancing export credibility and patient safety.

The introduction of QR codes on API packs, centralised regulatory filings, and real-time batch tracking is boosting traceability and improving overall quality compliance. These evolving frameworks aim to strengthen Indias reputation as a responsible and reliable supplier of quality pharmaceuticals on the global stage.

OPERATIONS REVIEW

STRENGTHENING YEAR AFTER YEAR,

CREATING A VALUE-DRIVEN FRAMEWORK

Ind-Swift operate on a flexible business model designed to address diverse global pharmaceutical needs through multiple growth avenues. The Companys approach is built around:

Contract Development & Manufacturing	Contract Manufacturing
Out-Licensing of Proprietary Products	Contract Research & Development
Distribution & Marketing Alliances

STEP BY STEP...BUILDING A GLOBAL FOOTPRINT

We have a marketing footprint across 70+ countries, backed by strong product quality, ethical branding and reliable delivery with a 97% DIFOT (Delivered in Full, On Time) performance. We currently have 500 under registration and plan to apply for an additional 400 in the coming year. This presence is a testament to our commitment to high-quality products, regulatory compliance and dependable delivery. By combining strategic regional operations with strong alliances, we continue to build a sustainable and expanding global business.

WE PRIMARILY OPERATE IN FIVE KEY MARKETS.

1. EUROPE AND REGULATED MARKETS

Europe and other regulated markets remain core to our global operations, contributing the largest share of revenues. We maintain a strong presence across the UK, Europe, Canada, Australia and South Africa, backed by approvals from the UK MHRA, TGA, Health Canada and the WHO-GMP.

Our day-one launch of Atorva-Ezetimibe in Europe, in partnership with leading generic players, marked a major milestone. During the year, we completed validation batches and submissions for two originator products at our newly commissioned facility—laying the groundwork for incremental growth.

Long-standing partnerships with global leaders, including Wockhardt, Chanelle, Mylan, Strides and Viatris, continue to reinforce our position through co-development, out-licensing and contract manufacturing

2. MIDDLE EAST AND CIS

The Middle East and CIS remain key growth regions for us. Weve established direct operations in Dubai, Baku and Dushanbe, supported by technical offices driving pharmacovigilance and regulatory excellence. Strong partnerships in Saudi Arabia and Iraq have boosted revenues, with further expansion anticipated as new product approvals are secured.

Recent launches in Tajikistan and Azerbaijan have delivered promising results, with triple-digit growth targeted. We also secured registrations in Georgia and Armenia, with commercial operations set to begin in the next financial period—reinforcing our commitment to regional diversification and long-term value creation.

3. AFRICA

Africa remains one of our most dynamic markets, offering scale and strategic opportunity. Weve built a strong presence in Abidjan, Dar Es Salaam, Kampala and Nairobi, with active marketing and regulatory teams driving local relevance. In the year ahead, well extend our reach to

Rwanda, Zambia, Zimbabwe and Togo, while forging partnerships with leading Tender Authorities to accelerate access to emergency medicines. With deep roots in Francophone and East Africa, were well-positioned to expand healthcare access across the continent.

4. ASIA-PACIFIC

Asia-Pacific remains a key growth engine for us, with Southeast Asia showing particularly strong traction. Weve built a solid presence in Malaysia, Singapore, Hong Kong, Thailand and the Philippines, where our products are well-established across both private markets and local

Tender Authorities. Consistent demand and repeat orders have ensured stable volumes, reinforcing our position as a trusted partner in the region.

5. CENTRAL AND SOUTH AMERICA

We are steadily growing our footprint in Latin America through new alliances and product registrations. Chile, Colombia and Peru have been added to our global presence and with fresh registrations secured, we plan to establish a dedicated branding team in Peru next year. These initiatives will enhance our ability to deliver broader, more tailored product offerings across the region.

OPERATIONAL STRENGTHS

Through ethical branding and strong local teams, weve achieved top-five brand rankings across key geographies. Exports contribute nearly 75% of our revenues, driven by a balanced mix of contract development, manufacturing and proprietary product filings. Our GBU facility meet the highest global standards, with approvals from leading international regulatory bodies. We consistently maintain a 97% Delivered in Full, On Time (DIFOT) rate, minimising stockouts and ensuring reliable supply for partners and patients worldwide.

OUTLOOK

Looking ahead, were focused on deepening our presence in regulated markets while accelerating expansion across high-growth regions like Africa, Latin America and the CIS. Our strategy centres on advancing product registrations, strengthening global alliances and leveraging R&D to deliver differentiated therapies. With a solid operational base, trusted partnerships and a growing international footprint, were well-positioned to drive the next wave of growth and fulfil our mission of delivering quality healthcare worldwide.

DOMESTIC PRESENCE

Domestically we operate across multiple business verticals, each designed to address diverse market needs and customer segments. This multi-pronged approach ensures strong revenue streams while leveraging expertise in both traditional and modern medicine.

Core Growth Drivers

ETHICAL

During the year, the Ethical Division achieved significant milestones in strengthening its presence and profitability. A dedicated marketing and brand management office was established in New Delhi with the vision of positioning the Company among the top 80 pharmaceutical establishments in India as recognised by IQVIA.

Within just a few months of commencing operations, the division successfully launched Matravi, its first new brand in nearly five years. Re ecting strong acceptance, Matravi achieved sales worth C9 crore within six months of launch (Ref. IQVIA MAT May 2025).

Aligned with the Companys vision of being a prescription-driven organisation, the Ethical Division also introduced Anin PFS—a pre-filled syringe of a gestational hormone—launched nationally from the ISAR Lucknow forum in February 2025. This marked the first introduction of such a product in India, underscoring Ind-Swift Laboratories commitment to advanced therapeutics and innovation in womens healthcare. The division reported a 15% revenue growth over the previous year, driven by strong performance across flagship brands such as Anin Injection 500, Suprox SR, Anin Tablet, and Netazox (Ref. IQVIA MAT

May 2025). Looking ahead, the division is expanding into peninsular India and preparing to enter high-potential therapeutic areas including cardiovascular, diabetology, and anti-infectives, ensuring long-term growth and stronger market positioning.

GENERICS

Ind-Swift Laboratories is among the pioneer companies in launching branded generics in India and has remained a leading player in this segment for nearly three decades. With a robust portfolio of more than 700 products covering a wide spectrum of therapeutic segments, the division has built a strong reputation for delivering quality medicines at scale.

To sustain leadership and unlock fresh growth, the Company has recently restructured its business model, adopting a Direct-to-Stockist (DTS) approach through CFA networks across India. This transition is expected to deliver higher business volumes and stronger penetration for the existing Healthcare Division (HCD).

In addition, the Company launched the Agile Division, a new generics vertical with a specialty-focused portfolio of ~150 products distributed through a separate channel. Building on this momentum, another generics division with ~150 additional products—including newly introduced pharmaceutical molecules in India—will be rolled out in FY2026–27.

These initiatives are expected to significantly strengthen Ind-Swifts generics portfolio, enhance market presence, and reafirm its longstanding leadership in the branded generics space.

Supporting Verticals

NOVA

The Nova division offers a diverse portfolio of multi-specialty pharmaceutical products. These products are manufactured strictly as per customer requirements and are supplied against advance payment arrangements, ensuring robust cash flow management and minimised credit risk.

P2P (PEER-TO-PEER / CONTRACT MANUFACTURING)

The P2P division is engaged in loan licensing and contract manufacturing for some of the most reputed names in the global pharmaceutical industry. Key clients include Dr. Reddys Laboratories, Sun Pharma (Ranbaxy), Micro Systopic, Abbott, Sandoz, Novartis, Lupin, Cipla and Unichem. This division allows the Company to leverage its world-class manufacturing capabilities while deepening strategic partnerships with leading pharma players.