Infinium Pharmachem Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENT:

India continues to be a global leader in chemical manufacturing, ranking 6th globally and 3rd in Asia, contributing approximately 7% to the national GDP. The country maintains a strong presence in global chemical trade, ranking 14th in exports and 8th in imports (excluding pharmaceuticals). The Indian chemical industry is currently valued at US$ 250 billion, with projections to reach US$ 300 billion by 2025, reflecting a CAGR of 9-11 %.

Cumulative FDI equity inflows into the chemical sector have reached US$ 23.2 billion from April 2000 to FY 2024-25, signalling sustained investor confidence.

Trade Dynamics and Infiniums Contribution

Indias chemical trade balance (Chapters 28 to 38, excluding 37) showed significant improvement, with the deficit narrowing from US$ 15 billion in FY 2022-23 to US$ 2 billion in FY 2023-24.

This was driven by a 15% reduction in import volumes (from US$ 74 billion to US$ 63 billion) and a modest increase in exports (from US$ 60 billion to US$ 61 billion).

Infinium Pharmachem Ltd, headquartered in Gujarat, has played a pivotal role in this export momentum. In FY 2024-25, Infinium recorded exports to 63 global partners, including China, Italy, Bangladesh, and Korea, with key products such as iodobenzene diacetate, methyl iodide, and N-iodosuccinimide.

Pharma Chemicals and Operational Performance

India is rapidly emerging as a global manufacturing hub for pharma chemicals, driven by cost- effective production, skilled manpower, and robust infrastructure. Infiniums specialization in iodine derivatives and organo-inorganic compounds aligns with this national trend.

FINANCIAL PERFORMANCE:

During the financial year 2024-25, the Company reported the following results:

# Total Turnover stood at ? 1,369,163.82 thousand.

# Profit Before Tax (PBT) amounted to ? 116,056.60 thousand.

In comparison, during FY 2023-24:

# Total Turnover was ? 1,223,577.25 thousand.

# Profit Before Tax (PBT) was ? 148,603.12 thousand.

While revenues have shown year-on-year growth, profitability has moderated due to factors such as input cost fluctuations, global market dynamics, and pricing pressures.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS:

Like all enterprises operating in the chemical and pharmaceutical domain, the Company faces:

# Opportunities:

O Rising global demand for pharma intermediates and APIs.

O Increasing preference for India as an alternative manufacturing hub.

O Expansion into new geographies and strengthening partnerships.

# Threats / Risks:

O Competition from multinational corporations and large-scale imports.

O Technological disruptions requiring significant capital investments.

O Duty-free imports by customers against export obligations.

Infinium is fully aware of these challenges and continues to implement strategies to mitigate risks and leverage emerging opportunities.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Management has put in place effective Internal Control Systems to provide reasonable assurance for:

# Safeguarding Assets and their usage.

# Maintenance of Proper Accounting Records and

# Adequacy and Reliability of the information used for carrying on Business Operations.

Key elements of the Internal Control Systems are as follows:

i. Existence of Authority Manuals and periodical updating of the same for all Functions.

ii. Existence of clearly defined organizational structure and authority.

iii. Existence of corporate policies for Financial Reporting and Accounting.

iv. Existence of Management information system updated from time to time as may be required.

v. Existence of Annual Budgets and Long Term Business Plans.

vi. Existence of Internal Audit System.

vii. Periodical review of opportunities and risk factors depending on the Global / Domestic Scenario and to undertake measures as may be necessary.

Internal Audit Reports are regularly circulated for perusal of Senior Management for appropriate action as required.

HUMAN RESOURCE/INDUSTRIAL RELATIONS:

Human capital continues to be a cornerstone of Infiniums growth. The Company remains focused on employee training, safety, and development initiatives. Industrial relations during FY 2024-25 remained cordial and constructive, with employees and management working collectively toward organizational goals.

BUSINESS OUTLOOK:

The pharmaceutical sector demonstrated steady improvement during FY 2024-25, supported by several structural and cyclical factors. Key drivers included:

# Sustained growth in the US generics market, aided by stabilization of base business pricing and improved product launches.

# Robust performance in branded formulations, particularly in chronic therapies.

# Moderation in raw material costs, improving cost efficiency across the value chain.

# Market share expansion in recently launched products, contributing to higher earnings across domestic pharma companies.

API and Pharma Chemicals Outlook

API (Active Pharmaceutical Ingredient) manufacturers, including Infinium Pharmachem, have undertaken significant capacity expansion (capex) during FY 2024-25. This strategic investment is expected to aid further revenue growth, while a healthy product mix and softening input costs are likely to support sustainable operating margins in the range of 20-30%.

Domestic Market Prospects

The Indian pharmaceutical business is expected to record high single-digit growth in FY 2025, driven by:

# Recovery in acute therapy demand.

# An uptick in chronic therapies such as diabetes and cardiovascular treatments.

# Higher medical representative productivity.

# A strong pipeline of new product launches.

# Anticipated boost from a healthy flu season.

International Market Prospects

The US market is expected to maintain strong growth momentum in FY 2025, supported by:

# Normalization of base business pricing.

# Expansion of field force capabilities.

# Acceleration of new product introductions.

# Increasing demand despite pricing pressures, competition, and stricter regulatory norms. Conclusion

Raw material APIs continue to play a critical role in pharmaceutical manufacturing, directly impacting therapeutic efficacy, quality standards, regulatory compliance, cost optimization, and supply chain efficiency. With its specialization in iodine derivatives and pharma intermediates, Infinium Pharmachem Ltd is well-positioned to capitalize on these opportunities in FY 2025, both in the domestic and international markets.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, strategies, projections and estimates, are forward-looking statements and progressive within the meaning of applicable laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward-looking statements.

By Order of the Board of Directors,

For, Infinium Pharmachem limited

Sanjaykumar Viththalbhai Patel

DIN-00370715

Managing Director

Place: Anand

Date: 21st August ,2025