Jagsonpal Pharmaceuticals Ltd Management Discussions

Economic environment

GLOBAL ECONOMY

In 2024, the global economy had a modest growth of 3.3%, marking a period of relative stability amid constrained momentum. As the year 2025 unfolds, the global landscape is undergoing significant shifts, driven by nations recalibrating policy priorities in response to growing geopolitical tensions and mounting financial pressures.

As per the International Monetary Fund report published in April 2025, the global trade tariff tensions and extremely high levels of policy uncertainty are expected to have a significant impact on economic activity. Based on information as of April 4, global growth is projected to drop to 2.8% in 2025 and 3% in 2026—down from 3.3% for both years in the January 2025 update. This is also much below the historical (2000-19) average of 3.7%.Amid this backdrop, global headline inflation is now expected to decline more gradually reaching 4.3% in 2025 and easing further to 3.6% in 2026. This revision reflects higher inflation estimates for advanced economies, partially offset by marginal downward adjustments in emerging and developing markets.

GDP growth projections

(in %)

	2024	2025	2026
Global Economy	3.3	2.8	3.0
Advanced Economies	1.8	1.4	1.5
Emerging Markets and Developing Economies	4.3	3.7	3.9

(Source: World Economic Outlook, April 2025)

Outlook

Despite facing significant challenges, this period also presents an opportunity to build resilient and sustainable future. Several economies under pressure have shown commendable agility, reinforcing the belief that recovery is possible through well-executed reforms and coordinated policy responses.

A balanced and inclusive recovery will require collective commitment to transparent trade practices, timely debt resolution, and structural realignments. Sustained growth and financial stability will depend on clear monetary policy signals, effective use of macroprudential tools, and disciplined fiscal management.

Going forward, international cooperation will be crucial. With a shared vision, responsible leadership and vision for progress, the global economy can regain its footing, strengthen its buffers, and unlock new avenues for longterm, inclusive growth.

INDIAN ECONOMY

India has emerged as a beacon of resilience and stability, navigating persistent global headwinds through steady GDP growth, moderating inflation, and strong domestic demand. The Indian economy is projected to grow by 6.5% in FY 202425, driven by strong performance in construction, trade, and financial services, all supported by sustained consumption and focused government spending.

GDP Growth Projection (in %)

FY 21	FY 22	FY 23	FY 24	FY 25 (P)
(6.6)	8.7	7.0	8.2	6.5

(Source: ) (P): Projected

Indias economic stability is driven by resilient domestic consumption, with rural demand playing a pivotal role in shielding the economy from global volatility. This rural strength is supported by stable agricultural output and targeted government initiatives that have helped sustain consumption. However, to preserve growth momentum, it is crucial to stimulate demand across both rural and urban segments, especially amid concerns around job market stagnation and inflationary pressures.

Structural reforms, digital acceleration, and infrastructure investments have strengthened Indias macroeconomic foundation. However, deeper policy interventions are still needed to attract higher investments and revive the manufacturing sector. Positive tailwinds such as easing oil prices and a manageable current account deficit provide additional macroeconomic stability. Nonetheless, inflation remains a key concern, shaping the Reserve Bank of Indias cautious monetary approach as it works to balance growth with stability.

Outlook

Looking ahead, India is expected to maintain a real GDP growth rate of 6.5% through FY26-FY28, driven by rising manufacturing and export competitiveness, a surge in services exports, and rapid digital transformation all boosting productivity and efficiency.

However, risks to this outlook include a potential global slowdown led by weaker growth in the US and China. Domestically delays in the private capex cycle could dampen growth prospects. On the external front, Chinas excess capacity and Renminbi depreciation could put pressure on Indias trade balance.

Recent tensions in the Middle East have added a layer of uncertainty. For India, the impact is visible through rising crude oil prices, given our heavy dependence on imports from the region. Prolonged instability could also affect Indian families with members working in the Gulf and put pressure on foreign exchange reserves.

At the same time, global policy shifts and supply chain realignments are creating new strategic opportunities. The increasing adoption of the China + 1 strategy is positioning India as a compelling alternative in global manufacturing, with the potential to attract greater investment, boost exports, and generate employment—reinforcing its emergence as a key driver of global growth.

Global pharmaceutical industry

The global pharmaceutical industry continues on a steady growth path, powered by a mix of sustained innovation, broader healthcare access, and rising demand for specialty therapies. In advanced markets, growth is propelled by the uptake of high-value, advanced treatments, while emerging economies are seeing increased momentum through higher volumes and greater spend on complex therapies, supported by expanded healthcare coverage.

According to IQVIA, the global pharmaceutical market is expected to grow at a CAGR of 6% to 9%, reaching between US$ 2.23 trillion and US$ 2.25 trillion by 2028. This growth is fuelled by the rising prevalence of chronic and lifestyle- related conditions, heightened awareness around preventive care, and increasing healthcare needs of ageing populations.

At the same time, the industry is also undergoing significant transformation across its value chain. Companies are prioritising breakthrough innovations, enhancing access, deploying emerging technologies, and improving operational efficiency. Collaboration across the ecosystem is deepening, aided by sectors agility and coordination, reaffirming its capacity to respond swiftly to global challenges.

Global pharmaceutical market growth

(USD Bn)

Region	2028	2024-2028 CAGR
Developed	1,775-1,805	5-8%
Pharmerging	400-430	10-13%
Lower income countries	33-37	3-6%
Global	2,225-2,255	6-9%

Source: IQVIA Market Prognosis, September 2023; IQVIA Institute, December 2023

Indian pharmaceutical industry

The Indian pharmaceutical industry continues to make its mark on the global stage ranking third worldwide by volume and fourteenth by value. This gap is largely due to strong focus on generics, which account for nearly 70% of industry revenues and are typically priced lower. In FY24, the industrys market size reached approximately USD 54 billion, reflecting growing influence not just in India but also globally.

Domestically, growth is expected to be driven by rising health insurance penetration, improved access to healthcare, the increasing prevalence of chronic diseases, and higher per capita income. The market has seen strong momentum across both acute and chronic therapy areas, with notable contributions from cardiac care, diabetes, and central nervous system treatments. Additionally, price revisions under regulatory frameworks and the introduction of new products also played a pivotal role in accelerating growth, along with increased uptake of existing therapies.

On the global front, export growth is being fuelled by deeper penetration of generics in regulated markets, supported by a strategic focus on niche and complex products, ongoing patent expiries, and licensing agreements through the Medicines Patent Pool. Demand from semi-regulated markets has also rebounded, while emerging economies such as Russia, Brazil, and South Africa are expected to provide sustained long-term growth opportunities.

Looking ahead, the industry is expected to maintain a steady growth journey with an expected growth rate of around 9% annually, mainly driven by rising global demand for affordable medicines, strong export performance in regulated markets, increasing domestic healthcare consumption, and supportive government policies. Balanced growth across regulated, semi-regulated, and unregulated markets positions India as a key player in the evolving global pharmaceutical landscape.

Both domestic and international markets are playing an equal role in this growth story. Exports to regulated markets are projected to grow at around 9% CAGR, while semi-regulated and unregulated markets are expected to grow steadily at around 8% CAGR during FY25-FY27. This balanced momentum reflects the industrys strong fundamentals, global competitiveness, and sustained demand across geographies.

Growth drivers

Competitive manufacturing advantage

India stands third globally in pharmaceutical production by volume and fourteenth by value, largely due to its dominance in the generics segment. The countrys manufacturing edge is driven by highly skilled talent, operational efficiency, and significantly lower R&D and clinical trial costs—up to 90% less than in developed markets. This cost-efficiency has made India a preferred global hub for affordable, high- quality pharmaceutical production.

Patent cliff opportunity

The upcoming wave of patent expiries presents a strategic opportunity for Indian pharma companies. A large number of high-value drugs set to lose exclusivity by 2030 this creates a opportunity for Indian players to launch alternatives, expand global reach and diversify their product portfolios. This shift is expected to unlock significant revenue potential and diversify product portfolios.

Rising health insurance penetration

A growing health insurance market is broadening access to medical care and reducing the out-of-pocket burden for patients. Raising awareness, changing disease trends, and lessons from recent health crises have accelerated insurance adoption across segments. This growing penetration is reducing out-of-pocket expenses and boosting demand for medical treatments and pharmaceuticals.

Increasing life expectancy

With life expectancy on the rise, India is witnessing a gradual increase in demand for long-term care and chronic disease management. This demographic shift is reshaping pharmaceutical demand, calling for targeted therapies and innovative healthcare solutions to serve an ageing population.

Lifestyle-related health risks

Changing lifestyles characterized by sedentary routines, poor nutrition, and environmental stress—are driving the incidence of chronic conditions such as diabetes, hypertension, and cardiovascular diseases. Addressing these challenges will require an expanded range of therapeutic interventions and preventive medicines.

Technology-led healthcare transformation

The adoption of digital health tools such as telemedicine, remote monitoring devices, and AI-powered platforms—is transforming how healthcare is delivered and consumed. These advancements are enabling personalised care, improving outcomes, and creating demand for pharma products that integrate with tech-enabled health ecosystems.

About Jagsonpal Pharmaceuticals

Founded in 1978, Jagsonpal Pharmaceutical Limited (Jagsonpal) has built a strong reputation over four decades by expanding its presence across India and providing access to high-quality healthcare solutions. The Company operates primarily in Gynaecology, Orthopaedics, Dermatology, and Childcare, with a consistent focus on quality, innovation, and stakeholder value. Its mission remains rooted in contributing meaningfully to a healthier nation.

Over the years, Jagsonpal has developed a diverse and clinically relevant product portfolio, delivering consistent market success. Fifteen of its brands rank among the top five in their respective molecule categories, reflecting the trust it has earned among prescribers and patients. The Company currently stands 13 th within its addressed market, underscoring its growing leadership in key therapeutic areas.

With a pan-India presence and stronghold in northern regions, Jagsonpals reach is driven by a dedicated sales force of over 900 professionals, 1,50,000 doctor connects and coverage across specialities.

FY25 Performance

JPLs performance for FY25 underscores the strength of our strategy and execution. Revenue grew 29% to f 2,687 million, while operating EBITDA rose 59% to f 579 million, with a 411 bps margin expansion—reflecting disciplined cost management and successful business integration. Operational PAT grew by 66.9% to f375 million from f225 million in the previous year while cash and cash equivalent stood at f 1456 million even after investing nearly f 950 million in acquisition. The various strategic initiatives delivered across key financial and operating metrices with a major milestone being Indocap® becoming Jagsonpals first f 50 Cr brand (Source: IQVIA).

Focus segments

Gynaecology: A wide range of products catering to womens health, hormonal balance and pregnancy support: Maintane Inj, Maintane tab, Doxypal DR-L, Queezy-ER, Lycored Group, Divatrone/SR, FeProtien, Cycloreg CR, Endoreg, Fibristone, Lycored-M, Cystelia M/35, Deereg

Pain/ Analgesics: Focussed on anti- inflammatory and pain relief therapies: Parvocox, Eclonac P/SP, Parvon forte, Indocap/SR/P.

Dermatology: Addressing skin care: Eukroma Group, Pru, Sunkroma, Lulyera XL, KTC Group.

Childcare: Essential therapies for gastrointestinal health and respiratory support in children: Tinilox, Kidygut, Ventiphylline Group.

Recent developments
Year	Milestones	Consequence
2022	Infinity Holdings acquires significant stake and becomes Promoter of Jagsonpal	Onboarding of a private equity party as a joint promoter.
	Board Reconstitution	Induction of market leaders from varied fields to strengthen the Board.
	Launch of Divatrone	Jagsonpal ranked 1 st runner up in New Introduction upto 5000 Million category by AWACS Marketing Excellence Award 2022.
2023	Divisionalization	Transition to 3 operating divisions namely Boneva, Fembon and Naari.
	New Product Introductions	Launched new products to drive growth and reduce dependency on core brands.
2024	Acquisition of Business of Yash Pharma Laboratories Private Limited (Yash Pharma)	Gives Jagsonpal access to Dermatology & Childcare segment.
	Strengthening Leadership in Pain Management	Indocap-P became the first JPL brand to cross f500 Million in sales, reinforcing our leadership in safer pain management.

Inorganic Growth

In FY 2024-25, we completed the strategic acquisition of Yash Pharmas India and Bhutan operations, including its brands and trademarks. This acquisition added a complementary business with no overlap, strengthening our market position and deepening our presence in high-growth therapy areas. It enabled access to emerging segments and expanded our market coverage through a more diverse portfolio of molecules. Notably, four leading brands from the acquired portfolio rank among the top in their respective categories, enriching our portfolio with over thirty well- established brands.

Our focus now remains on accelerating organic growth while continuing to evaluate synergistic inorganic opportunities. Backed by strong internal accruals and a robust balance sheet, we are well-positioned to invest in long-term value creation.

Key therapeutic segment & performance in FY25

Segments	Current Annual Segment Sales ( in million)	Growth (y-o-y)
Gynaecology	11,354	3.8%
Pain/ Analgesics	1,86,250	7.4%
Dermatology	16,397	9.1%

Source: IQVIA Market Feedback Report April 2025

HUMAN RESOURCES

At the heart of our organization lies the belief that our people are our greatest strength. With a team of over 1,400 dedicated employees, we are committed to fostering a workplace built on fairness, inclusivity, and opportunity. We ensure equal employment and career growth prospects for all, cultivating an environment where every individual can thrive.

To nurture continuous learning, we conduct regular workshops that enhance technical expertise, communication skills, and managerial capabilities. Personalized Individual Development Plans (IDPs) align employee aspirations with organizational goals, supporting sustained professional growth. Recognizing the importance of holistic well-being, we promote both mental and physical health through initiatives such as yoga sessions, stress management programs, and scientific knowledge training.

Employee well-being extends beyond the workplace. We provide financial security through a suite of insurance benefits, including Group Mediclaim Insurance, Term Life Insurance, and Group Accidental Insurance, ensuring employees and their families are protected in times of need.

Our preventive healthcare initiatives include Health & Lifestyle Management Camps, Oral Hygiene Clinics, Ergonomics Workshops, Stress and Anger Management sessions, and gynecologist-led programs addressing womens health.

Integrity and ethical conduct remain foundational to our culture. We uphold a safe and transparent work environment where employees can raise concerns without fear. Our Whistle-blower Policy guarantees confidentiality and protection, while our zero-tolerance stance on harassment reinforces our commitment to dignity, respect, and trust.

Our people policies and processes

• Recruitment Policy: Recruitment was anchored in fairness and meritocracy, with equal opportunities ensured through defined job criteria and structured interviews.

• Performance Appraisal Policy: A transparent Performance Management System recognized merit and supported growth. Annual Key Performance Objectives (KPOs) were aligned with organizational goals, reinforced by continuous feedback and fair evaluations.

• Group Mediclaim Insurance (GMP) Policy: All employees were covered under a comprehensive Mediclaim policy, with the option to extend benefits to dependents. The coverage included cashless treatment facilities and protection for pre-existing conditions without waiting periods, ensuring timely and accessible healthcare.

• EDLI and Term Life Insurance: Employees families were safeguarded through EDLI and Term Life Insurance policies, which provided financial security in the event of an untimely demise, ensuring long-term protection and stability.

• Group Accidental Insurance: Employees were protected under Group Accidental Insurance, covering medical expenses and providing financial compensation in the event of an accident. In case of severe outcomes, nominees received the necessary financial support.

• Whistle-blower Policy: A confidential and secure mechanism was instituted to report unethical conduct, policy violations, or malpractices. All concerns were addressed with sensitivity and fairness, with strict assurance of non-retaliation against whistle-blowers.

• Prevention of Sexual Harassment (POSH) Policy:

In compliance with the POSH Act, 2013, the Company enforced a zero-tolerance policy towards sexual harassment. An Internal Complaints Committee was constituted to handle grievances promptly and impartially. Regular awareness and sensitization programs reinforced our commitment to a safe and respectful workplace.

Threats, Risks and Concerns Risk Management

In compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, the Company has constituted a Risk Management Committee comprising Directors. Details of the Committees composition, charter, meetings held, and Director participation are provided in the Corporate Governance Report. The Committee meets at regular intervals to review the risk landscape and guide the Companys mitigation strategies.

As part of its enterprise risk management framework, the Company conducted a comprehensive risk assessment exercise, identifying key strategic and operational risks that could impact performance. Mitigation actions have been defined to address these exposures proactively. A summary of the identified risks and corresponding mitigation measures is presented below:

Key Risk	Mitigation Plan / Remarks
Structural Risk Regulatory interventions such as the National List of Essential Medicines (NLEM), Jan Aushadhi Scheme, and push for generic prescriptions may impact pricing and margins.	The Company regularly introduces product line extensions to diversify its portfolio and reduce reliance on NLEM-listed products. Focus remains on niche, differentiated molecules less affected by pricing regulations.
Operational Risk Divisional restructuring and the shift from Depot to Carrying & Forwarding Agent (C&FA) model may cause short-term disruptions.	A phased execution plan has been developed to ensure a smooth transition. Fifteen C&FA units are already operational, enabling improved distribution agility and long-term cost efficiencies.
Access Security Risk Unauthorized access to systems can lead to data breaches, financial losses, and reputational damage.	Comprehensive cybersecurity protocols are in place, including firewalls, antivirus tools, and password-protected systems to prevent unauthorized access and mitigate threats.
Data Management Risk Weak backup and recovery protocols pose risks of	Regular data backups are performed, and a robust disaster recovery system is being implemented to strengthen business

The Company remains focused on institutionalizing a forward-looking, agile risk management culture. By continuously monitoring the evolving risk environment and adapting its controls, the Company aims to protect stakeholder interests and ensure long-term sustainability.

Financial Review & Operational Highlights

(f In Million)

	As at March 31, 2025	As at March 31, 2024	Difference
ASSETS
Non-current assets
Property, plant and equipment	6.11	9.10	-2.99
Goodwill	96.93	-	96.93
Right of use assets	82.26	83.92	-1.66
Other Intangible Assets	759.24	-	759.24
Financial assets
(i) Other financial assets	173.91	51.70	122.21
Income-tax assets (net)	7.98	12.46	-4.48
Other non-current assets	44.23	45.81	-1.58
Total non-current assets	1170.66	202.99	967.67
(f In Million)
	As at March 31, 2025	As at March 31, 2024	Difference
Current assets
Inventories	152.00	149.97	2.03
Financial assets
(i) Investments	-	-	-
(ii) Trade receivables	131.76	109.51	22.25
(iii) Cash and cash equivalents	112.15	127.60	-15.45
(iv) Bank balances other than (iii) above	1175.17	1351.74	-176,57
(v) Other financial assets	0.67	1.10	-0.43
Other current assets	40.19	56.08	-15.89
Assets held for sale	-	171.79	-171.79
Total current assets	1611.94	1967.79	-355.85
Total assets	2782.60	2170.78	611.82
EQUITY AND LIABILITIES
Equity
Equity share capital	132.80	132.19	0.61
Other equity	2266.70	1741.83	524.87
Total equity	2399.50	1874.02	525.48
Liabilities
Non-current liabilities
Financial liabilities
Lease liabilities	76.32	75.57	0.75
Other Financial Liabilities	6.66	-	6.66
Provisions	10.38	9.18	1.20
Deferred tax liabilities (net)	30.70	20.73	9.97
Total non-current liabilities	124.06	105.48	18.58
Current liabilities
Financial liabilities
(i) Lease liabilities	16.07	13.84	2.23
(ii) Trade payables
Total outstanding dues of micro enterprises and small enterprises	14.71	16.44	-1.73
Total outstanding dues of creditors other than micro enterprises and small enterprises	82.63	59.52	23.11
(iii) Other financial liabilities	103.49	67.14	36.38
Other current liabilities	32.00	26.82	5.18
Provisions	10.14	7.52	2.62
Current tax liabilities (net)	-	-	-
Total current liabilities	259.04	191.28	67.76
Total liabilities	383.10	296.76	86.34
Total equity and liabilities	2782.60	2170.78	611.82

Non-current assets

Property, plant and equipment (PPE)

Decrease in PPE is due to impairment of companys vehicles.

Right-of-Assets (ROU)

Increase in ROU is due to the addition of Mumbai office.

Non-current investments

N.A.

Other non-current financial assets

The increase in non-current financial assets is due to increase in Bank Deposits with maturity period of More than 12 Months.

Non-current Assets - Goodwill

Increase in goodwill is due to acquisition of Yash Pharma India and Bhutan business during FY 24-25.

Current assets

Inventories

The decrease in Inventories is a result of reduction in inventory cycle due to better inventory planning and control.

Trade receivables

The increase in receivables in FY 2024-25 is due to the acquisition of Yash Pharma business.

Other current financial assets

The decrease in other current financial assets is due to surplus funds diverted to buy brands with higher rate of return.

Other current assets

The decrease in other current asset is due to GST refund 11.34 million received during the year.

Equity

Other Equity

Changes in equity is due to share based payment expenses of 68.04 million, share options exercised 33.30 millions, dividend paid 132.29 million and total comprehensive income for the year being 555.82 million.

Non-current liabilities

The increase is due to the addition of Mumbai office lease, deferred tax liabilities created due to timing differences in certain expenses such as leave encashment, gratuity, leases and depreciation on property, plant and equipment, amortization of brands acquired and deferred payment obligation against brands acquired.

Current liabilities

Trade payables

The increase in trade payables in FY 2024-25 is due to the acquisition of Yash Pharma business.

Other Financial liabilities

The increase in other current liabilities is due to increase in statutory liabilities mainly due to higher sales achieved in Q4 FY25 as against sales in Q4 FY24.

Key Ratios

Particulars	FY 2024-25	FY 2023-24	Reason for More than 25% Change
Current Ratio	6.2	9.5	Decrease is due to surplus funds used for business acquisition
Net Capital Turnover Ratio	1.2	1.3	-
Net Profit Ratio	20.6	10.8	Due to improved business performance
Debtor Turnover Ratio	20.5	19.1	-
Inventory Turnover Ratio	17.6	13.9	Increase is a result of reduction in Inventory cycle due to better Inventory planning & control
Operating Profit Margin	18.7	26.5	-
Interest Coverage Ratio	-	-
Debt Equity Ratio	-	-	-
Return on Net Worth	23	12	Due to improved business performance

Outlook

Our growth roadmap is anchored in a focused three-pronged strategy aimed at driving sustainable performance and longterm value creation.

• New Product Launches remain a core growth driver. By focusing on niche and innovation-led opportunities, we aim to introduce multiple new products each year that deepen market engagement and expand our therapeutic relevance.

• Volume Growth is being actively pursued through sales force empowerment and enhanced field productivity. Targeted training programs are strengthening the capabilities of our medical representatives, ensuring sharper market execution and improved coverage.

• Price Optimization, particularly within the non-NLEM portfolio, is contributing to topline momentum. Our ability to maintain competitive pricing while upholding quality standards supports better realization and profitability.

Looking ahead, we anticipate continued revenue expansion and significant improvement in operating margins. In the near term, stronger cost efficiencies and higher operating leverage are expected to translate into meaningful EBITDA improvement. Over the longer horizon, our operating performance is poised for further enhancement through focused margin accretive actions.

Internal Control Systems and their Adequacy

The Company has a robust internal control framework to safeguard assets, ensure compliance, and address risks promptly. The Audit Committee regularly reviews internal audit findings, ensures corrective actions, and maintains open communication with statutory and internal auditors. These measures enhance transparency, accountability, and stakeholder confidence.

Cautionary statement

This section includes forward-looking statements based on assumptions about future events. Actual outcomes may differ due to external factors beyond the Companys control. The Company is not obligated to revise these statements following new developments or changes in circumstances.