Kopran Ltd Management Discussions

Economy Overview

Global Economy¹

Overview

The global economy remained steady despite headwinds from higher trade barriers and elevated uncertainty particularly arising particularly from geopolitical conflicts. Additional uncertainty stemmed from shifting trade policies, tariff-related risks, and increased volatility in financial markets. However, these pressures were partly offset by technology-driven investments, accommodative financial conditions including a weaker US dollar, and supportive fiscal and monetary policies. As a result, the global economy recorded moderate growth of around 3.5% in CY 2025 and continued to expand at a stable pace despite recent geopolitical developments and disruptions in energy markets.

Global trade flows also remained stable, although trade patterns increasingly reflected changing dynamics such as reduced imports from China and rising trade with countries like Vietnam and Taiwan. This shift was driven by supply chain reconfiguration due to geopolitical tensions, trade wars, elevated US tariffs, lower input costs for raw materials sourced from Southeast Asian countries and policy adjustments across major economies. Companies accelerated supply chain diversification and strengthened domestic manufacturing capabilities, leading to a gradual realignment of global trade networks. Technology-related trade continued to remain a key contributor, partly offsetting slower momentum across other segments. These trends continued to influence sectors linked to capital expenditure, infrastructure and industrial expansion.

Advanced economies grew at a relatively moderate pace, expanding by 1.9%, while emerging market and developing economies (EMDEs) recorded stronger growth of 4.5%. Among EMDEs, India continued to outperform several other developing economies and remained an important driver of both regional and global growth. This momentum continued to contribute meaningfully to overall global economic expansion.

Improving supply conditions and the impact of monetary policy helped ease inflationary pressures compared to recent years. However, regional variations continued to persist, with several economies gradually moving towards their target inflation levels.

Outlook

Geopolitical developments, including tensions in energy-sensitive regions such as West Asia, continue to pose risks to energy markets and global supply chains, with potential implications for commodity prices and input costs across industries. If ongoing conflicts remain limited in duration and impact, global growth is projected to moderate to 3.0% in 2026 and 3.4% in 2027. However, a prolonged or wider conflict could weaken growth prospects and further disrupt financial markets, leading to higher inflationary pressures and tighter financial conditions. Rising geopolitical fragmentation, a reassessment of AI-led productivity gains and renewed trade tensions may further increase global risks. High public debt levels and weakening institutional credibility across certain economies also continue to add to these concerns. On the other hand, stronger-than-expected productivity gains from AI or a sustained easing of trade tensions could support economic activity.

The global outlook continues to be influenced by external factors, includingtradepolicyshifts,financialmarketmovements,elevated public debt levels and geopolitical developments, particularly in energy markets, which could disrupt supply chains and increase commodity price volatility. Central banks are expected to remain focused on maintaining price stability, with policy measures aligned to evolving inflation conditions. Strengthening policy credibility, improving adaptability and enhancing international cooperation is expected to remain important priorities to navigating current challenges and future uncertainty.

Indian Economy Overview²

The Indian economy maintained strong growth momentum in FY 2025–26, with real GDP growth at 7.7%³, supported by domestic demand, investment activity and stable macroeconomic fundamentals. Growth continued to be driven by the services and manufacturing sectors. Economic conditions remained stable despite global uncertainty, arising from geopolitical tensions, elevated energy prices and supply chain disruptions.

Domestic demand remained the primary driver during the year. Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) grew by 7.7% and 7.1% respectively, in FY 2025–26.⁴ Rural demand remained steady, supported by the agriculture sector, while urban consumption improved alongside stronger services sector activity. Inflation remained largely contained during FY 2025–26. Headline CPI inflation stayed below 3.4%. Core inflation excluding precious metals stood at approximately 2.1% during the year, indicating relatively stable underlying price conditions.⁵ Against this backdrop, the Reserve Bank of India maintained a supportive monetary stance. The policy repo rate was reduced by 100 basis points during the year to 5.25%, while liquidity conditions supported adequate credit availability.⁶

The domestic growth momentum was further supported by prudent fiscal management, stable revenue mobilisation and disciplined expenditure. Government spending on infrastructure continued to support investment activity, while GST collections and digital adoption improved overall efficiency. Employment conditions also remained stable, with unemployment at 4.9% in FY 2025–26.

Public investments in transportation, energy and logistics, through initiatives such as PM Gati Shakti and the National Infrastructure Pipeline, continued to support industrial output and capacity creation across sectors. Capacity utilisation improved to around 75%–76%, indicating a gradual recovery in private investment and stronger demand across infrastructure-linked industries⁷. Regulatory developments by the Reserve Bank of India also supported the sector. A revised framework for infrastructure lending reduced provisioning requirements for under-construction projects from 5% to 1%, improving credit flow and making project financing more viable for lenders.⁸

Indirect tax reforms, particularly GST, continued to simplify the taxation framework and reduce rates across key sectors. At the same time, trade agreements such as the India–EU Free Trade Agreement and ongoing discussions with the US are strengthening Indias position within global value chains. The India–EU FTA is expected to unlock significant economic opportunities, with bilateral trade already at around 11.5 lakh crore ($ 136.5 billion) and exports to the EU at 6.4 lakh crore.⁹ The agreement is expected to provide preferential market access to over 99% of Indian exports, creating opportunities for export growth, employment generation and investment inflows.

This growth trajectory remains aligned with the Governments long-term vision of Viksit Bharat 2047, which focuses on sustained economic growth, infrastructure expansion, and productivity enhancement to transition India into a developed economy. Continued emphasis infrastructure-led development remains a key pillar of this strategy.

Indian Economy Outlook

The Indian economy is expected to maintain a stable growth trajectory, supported by strong domestic fundamentals and continued policy support. Growth is likely to remain driven by domestic demand, alongside sustained focus on infrastructure development and capital expenditure. Higher public investment, improving capacity utilisation and stronger corporate and financial sector balance sheets are expected to support a gradual increase in private sector investment.

Policy initiatives are expected to continue supporting growth while strengthening export competitiveness. The Union Budget 2026–27 has maintained its emphasis on infrastructure-led development, with public capital expenditure of around 12.2 lakh crore, equivalent to 3.1% of GDP and total expenditure of about 53.5 lakh crore. This continued investment push is expected to support economic activity and improve overall growth momentum.¹⁰

Inflation is projected at 5.1%¹¹ supported by stable supply conditions and calibrated policy measures. Monetary policy is expected to remain data-driven, balancing growth priorities with price stability. Despite global uncertainties, including commodity price volatility and geopolitical risks, Indias macroeconomic strengths, including foreign exchange reserves of around US$ 697.1 billion and diversified growth drivers, are expected to support economic stability.¹²

Industry Overview

Global Pharmaceutical Industry

Overview

The global pharmaceutical industry continued to witness steady growth during CY 2025, supported by rising demand for specialty therapies, biologics, oncology treatments and GLP-1-based drugs used in diabetes and obesity management. Increased adoption of digital healthcare platforms, faster drug approvals across select therapeutic areas and deeper penetration into emerging markets also contributed to industry growth momentum.

Global pharmaceutical sales are estimated to have reached nearly US$1.7 trillion to US$1.8 trillion during CY 2025¹³, while overall industry growth remained in the range of 6% to 7%.

At the same time, pharmaceutical companies continued to face pricing pressure in regulated markets, rising compliance costs and loss of exclusivity for certain key products. Despite these challenges, large pharmaceutical companies maintained stable operating performance, supported by diversified product portfolios, continued pipeline development and sustained investments in research and manufacturing capabilities.

Outlook

The global pharmaceutical industry is expected to maintain stable growth momentum in 2026, supported by rising demand for biologics, specialty therapies and treatments for chronic diseases. Global pharmaceutical sales are projected to increase to nearly $1.8 trillion to $1.9 trillion in 2026¹⁴

15Industry growth is expected to be driven by increasing demand for obesity, oncology, immunology and rare disease therapies, along with rising healthcare spending across developed and emerging markets. Pharmaceutical companies are also accelerating investments in cell and gene therapies, AI-enabled drug discovery and digital research platforms to improve development efficiency and pipeline quality.

At the same time, manufacturers continue to diversify supply chains and expand regional production capabilities, including higher outsourcing to CDMOs to reduce sourcing risks and improve operational stability. Growing adoption of outcome-based pricing models and rising competition from generics and biosimilars may continue to impact profitability across certain markets. However, diversified product portfolios, strong liquidity positions and continued focus on innovation are expected to support stable industry performance over the near term.¹⁶

Indian Pharmaceutical Industry

Overview

Indias pharmaceutical industry continues to strengthen its position within the global healthcare supply chain through its scale in generics, vaccines, biosimilars and contract manufacturing. Pharmaceutical exports remained above $30 billion during FY 2025-26, with exports growing by 5.6% year-on-year despite global trade disruptions. India currently exports pharmaceutical products to more than 190 countries, with regulated markets such as the U.S. and Europe continuing to account for a significant share of exports.¹⁷

The API segment is also witnessing accelerated domestic capacity expansion under the Production Linked Investment (PLI) scheme and bulk drug park initiatives. As of FY 2026, cumulative investments under the PLI scheme for bulk drugs exceeded 4,760 crore, while production capacities were created for 26 critical APIs, KSMs and drug intermediates that were previously dependent on imports.¹⁸ India is also expanding bulk drug infrastructure across the country to strengthen supply chain stability and reduce dependence on imported APIs.

Increasing traction in biologics, injectables, CDMO/CRDMO services and specialty formulations is further contributing to industry growth.

Active Pharmaceutical Ingredient (API) Industry

India continues to strengthen its position in the global Active Pharmaceutical Ingredient (API) industry through expanding domestic manufacturing capabilities, improving regulatory compliance standards and increasing participation in global pharmaceutical supply chains. The country currently has more than 2,000 WHO-GMP compliant pharmaceutical manufacturing facilities and one of the largest USFDA-compliant manufacturing bases outside the United States, supporting exports to highly regulated markets.

Indias pharmaceutical exports crossed approximately $30 billion in FY 2025-26, with APIs and drug intermediates continuing to contribute significantly to export growth.¹⁹ India also supplies nearly 20% of the worlds generic medicines by volume, supporting sustained demand for domestically manufactured APIs.

Under the PLI scheme for bulk drugs, approved manufacturers have committed investments exceeding 6,900 crore against the originally committed investment of around 3,900 crore, indicating faster capacity expansion across critical APIs, KSMs and intermediates.20

In addition, 48 products covering critical fermentation-based and chemically synthesised APIs, KSMs and intermediates have been approved under the scheme to strengthen domestic manufacturing capabilities.²¹

India currently accounts for nearly 8% of the global API market by value and remains among the largest suppliers of generic-drug-linked APIs globally. Increasing focus on high-potency APIs, peptide-based therapeutics, oncology APIs and CDMO partnerships is further improving the industrys value mix and export competitiveness. Rising regulatory approvals, quality-compliance investments and digital manufacturing adoption are also expected to support long-term growth across the sector.

Outlook

Indias API sector is entering a new phase of growth during FY 2025–26, supported by rising investments in fermentation capabilities, speciality molecules, and domestic raw material integration. Several manufacturers are expanding capacities for complex APIs, oncology products, peptides, and high-potency ingredients as global pharmaceutical companies increasingly look for alternative sourcing destinations outside China.

The industry is also witnessing higher localisation of key starting materials (KSMs) and intermediates, helping reduce import dependence for critical drug manufacturing. Under the governments PLI initiatives, investments in API and bulk drug manufacturing have already crossed earlier targets, while new greenfield projects and bulk drug parks are improving utility access, logistics efficiency, and production economics.²²

Indias pharmaceutical exports continue to expand across regulated markets, with nearly half of exports directed towards the US and Europe. Companies are increasingly focusing on compliant manufacturing infrastructure, digital quality systems, and backward integration to improve supply reliability and margin stability.²³ Industry estimates indicate that the Indian API market could cross $ 15 billion in 2026, supported by export demand, contract manufacturing opportunities, and growing adoption of China-plus-one sourcing strategies by multinational pharmaceutical companies.²⁴

Business Outlook

The Companys long-term strategy centres on deepening its market position in key therapeutic segments while actively expanding its global export footprint. By prioritising operational efficiency, product quality, and regulatory compliance, Kopran aims to mitigate industry-wide volatility in raw materials and supply chain pressures. The company is positioning itself to capture sustainable growth through organisational integration, strategic portfolio diversification, and a continued focus on manufacturing excellence, delivering long-term value to its stakeholders.

Growth Drivers

Expansion in Speciality and High-Value APIs

Indian pharmaceutical companies are increasing investments in oncology APIs, peptides, hormone-based products and contrast media to improve product mix and expand into higher-margin therapeutic categories. This shift is strengthening Indias presence in regulated markets and reducing dependence on commoditised bulk drugs.

Rising Domestic Production of Key Starting Materials

Manufacturing capacity for several critical KSMs, drug intermediates and APIs has increased under government-backed incentive schemes. Domestic production of products that were earlier import-dependent is improving supply availability and reducing exposure to external sourcing disruptions.

Development of Bulk Drug Manufacturing Infrastructure

Large-scale bulk drug parks currently under development are expected to improve utility access, waste management systems and logistics efficiency for API manufacturers. Shared infrastructure facilities are likely to reduce operating costs and support faster commissioning of manufacturing units.

Growth in Regulated Market Exports

Indian API manufacturers continue to see growing opportunities in the US, Europe and other regulated markets as global pharmaceutical companies increasingly diversify sourcing strategies. Demand for compliant manufacturing facilities and stable long-term supply arrangements continues to increase.

Increased Focus on Fermentation-Based Manufacturing

Companies are expanding fermentation capabilities for antibiotics and niche APIs, supported by fresh applications under the PLI scheme. This is helping strengthen domestic manufacturing in segments that were previously heavily dependent on imports.

China-plus-one Sourcing is Reshaping Procurement Trends

Large pharmaceutical companies in the US and Europe are gradually reducing dependence on single-country sourcing models following repeated supply disruptions and geopolitical uncertainty. India is emerging as a preferred alternative due to its large USFDA-approved manufacturing base, cost competitiveness and expanding backward integration capabilities. Request-for-quotation volumes for Indian contract manufacturers also increased as buyers diversified sourcing networks.

Oncology and Chronic Therapy APIs are Seeing Stronger Demand

Demand for APIs used in cancer, cardiovascular and diabetes therapies is increasing at a faster pace than traditional acute-care segments. Oncology-focused APIs are expected to record strong growth rates over the next five years as pharmaceutical pipelines shift towards specialised and targeted treatments.

API Manufacturing is Becoming More Technology-Driven

Manufacturers are increasing adoption of AI-enabled process monitoring, continuous manufacturing systems and digital quality controls to improve batch efficiency, reduce wastage and strengthen compliance standards. Technology-led manufacturing upgrades are also becoming increasingly important for regulated-market exports and large-scale CDMO contracts.

Government Initiatives

Production Linked Incentive (PLI) Scheme for Bulk Drugs

The government expanded application rounds under the bulk drug PLI scheme during FY 2025–26 to strengthen domestic manufacturing of critical APIs, KSMs and drug intermediates. Fresh applications were invited for products such as Meropenem and Ritonavir to reduce import dependence in priority therapeutic segments. Production capacities have already been created across several approved greenfield projects.

Bulk Drug Parks Development Programme

Construction activity across the approved bulk drug parks in Gujarat, Andhra Pradesh and Himachal Pradesh gathered pace during FY 2025–26. These parks are being developed with shared solvent recovery systems, common effluent treatment facilities, steam generation units and logistics infrastructure to reduce manufacturing costs and improve operational efficiency for API manufacturers.

Revamped Pharmaceutical Technology Upgradation Assistance Scheme (RPTUAS)

The RPTUAS scheme witnessed higher industry participation during FY 2025–26, with a large number of applications approvedforupgradingmanufacturingfacilitiestoglobalquality and compliance standards. Investments under the scheme are supporting automation, digital quality systems and advanced production technologies across pharmaceutical plants.

Expansion of Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP)

The PMBJP network crossed key expansion milestones during FY 2025–26, improving access to affordable generic medicines across both urban and rural regions. Budgetary allocation for the scheme was further increased to support a wider product basket and expansion of Jan Aushadhi Kendras across the country.

Strengthening Pharmaceutical Cluster Infrastructure

Under the Scheme for Strengthening of Pharmaceutical Industry (SPI), pharmaceutical clusters and common facility centres are receiving support for testing laboratories, quality infrastructure and shared manufacturing utilities. This is helping MSME-focused pharma clusters improve operational standards and reduce infrastructure-related costs.

Medical Devices and Pharma Manufacturing Integration

The government continues to support integration between pharmaceutical manufacturing and domestic medical device production through dedicated incentive schemes and industrial parks. Cumulative sales under the medical devices PLI scheme crossed significant levels during FY 2025–26, supported by rising domestic production and exports of high-end medical equipment.

Outlook

Indias pharmaceutical industry is gradually moving towards biologics, biosimilars, complex injectables and CRDMO-led manufacturing during FY 2025–26. Global pharmaceutical companies are increasing outsourcing partnerships with Indian manufacturers for product development, clinical-scale production and commercial manufacturing, particularly across specialised therapy segments.

The global CRAMS market is expected to continue expanding through 2026, creating additional opportunities for Indian companies with advanced manufacturing capabilities. The industry is also witnessing higher investments in AI-enabled drug discovery platforms, digital manufacturing systems and data-driven quality monitoring to improve development timelines and manufacturing efficiency.

Pharmaceutical companies are further expanding capabilities in peptides, biosimilars and high-value formulations as healthcare demand increasingly shifts toward chronic and speciality therapies.

India also continues to strengthen its position in global pharmaceutical exports, supported by regulated-market demand, a large manufacturing base and increasing product diversification. Industry estimates suggest that the Indian pharmaceutical market could maintain double-digit long-term growth, aided by rising healthcare spending, insurance penetration and increasing demand for speciality medicines.

Company Overview and Outlook

Kopran Limited is an Indian pharmaceutical company with integrated operations across formulations and Active Pharmaceutical Ingredients (APIs). The Company is engaged in the development, manufacturing and marketing of pharmaceutical products for both domestic and international markets. Its manufacturing facilities operate in line with global quality standards and hold approvals from multiple international regulatory authorities.

The formulations business focuses on oral solid dosage forms and other pharmaceutical products across a range of therapeutic categories. The API business, managed through its wholly owned subsidiary Kopran Research Laboratories Ltd. (KRLL), manufactures a portfolio of APIs and advanced intermediates.

The Company has established a presence across regulated as well as semi-regulated markets, supported by approvals from international regulatory authorities, including USFDA, EU-GMP, UK-MHRA and WHO-GMP. Its portfolio spans therapeutic areas such as anti-infectives, cardiovascular, gastroenterology, CNS and anti-diabetic products, along with specialised APIs including Atenolol and Sterile Carbapenems.

Koprans manufacturing and export network continues to expand through product diversification, compliance-focused operations and backward integration capabilities across APIs and intermediates. The Company currently supplies products across Africa, Europe, Southeast Asia, CIS markets and Latin America.

Outlook

Kopran is well-positioned for future growth by connecting its medicine manufacturing (formulations) directly with its active raw material (API) business. By making more of its own raw materials in-house, the company will protect itself from supply chain disruptions, lower production costs, and become more competitive worldwide. The ongoing expansion of its packing and production facilities will allow Kopran to meet rising demand, improve factory efficiency, and boost its export volumes. Additionally, by signing new long-term contracts with international drug companies for custom manufacturing (CDMO/CMO), Kopran is set to enter heavily regulated foreign markets, maximise its factory capacity, and bring in steady, higher-profit revenue streams.

Product Portfolio

Formulations

Kopran Limiteds Formulations vertical is engaged in the development and manufacturing of oral solid dosage forms and dry powder formulations across both Penicillin-based and non-Penicillin therapeutic categories. The Company manufactures tablets, capsules, dry powders and suspensions primarily for export markets across regulated and semi-regulated geographies.

Its dedicated formulations facility located at Khopoli, Maharashtra, has a built-up area of 11,432 sq. mts. and operates separate manufacturing blocks for Penicillin and Non-Penicillin products. The Company is undertaking expansion in the existing units estimated capex of H 25 Crores. The Penicillin portfolio includes products such as Amoxicillin, Ampicillin, Cloxacillin and Amoxy-Clav, while the

Non-Penicillin segment covers therapeutic categories including Macrolides, Anti-Hypertensives, Cardiovascular, Anti-Helmentics, AntiHistamines, Anti-Diabetics, CNS, Pain Management and Gastroenterology.

Going forward, the Company is aligning its formulation development strategy with its API portfolio to increase backward integration and leverage its in-house manufacturing capabilities. This strategic alignment is expected to enhance supply chain security, create greater value addition across the value chain, improve cost competitiveness, and strengthen the Companys overall competitive position in both domestic and international markets. The Company has undertaken the expansion of its granulation, filling, and packing capacities. This capacity enhancement is aimed at supporting increasing production volumes, improving manufacturing efficiency, and meeting the requirements of both domestic and export markets. The expanded infrastructure will also enable the Company to support the anticipated growth in its branded formulations, generic exports, and CDMO/CMO businesses while enhancing operational flexibility and economies of scale

The Company is strategically strengthening its CDMO and CMO business to enhance its presence in regulated markets. It has entered into development and manufacturing agreements with several international pharmaceutical companies. These partnerships are expected to drive exports to regulated markets, improve capacity utilization, and establish long-term customer relationships. The increasing contribution from CDMO/CMO operations is anticipated to enhance the Companys margin profile through higher-value offerings while providing greater revenue visibility and a more stable, recurring business stream

The formulations business is entirely export-focused, with markets and manufacturers of more than 100 dosage variants aligned with international quality standards.

During FY 2025 26, the formulations segment recorded revenue of 29,639 Lakhs, with the Penicillin plant contributing 17,509 Lakhs and the Non-Penicillin plant contributing 12,130 Lakhs. Region-wise exports were led by Africa ( 11,733 Lakhs) and South Africa ( 12,574 Lakhs), followed by Southeast Asia, MENA and LATAM markets.

Product Launches

Outlook

The formulations business is expected to benefit from higher product registrations, automation of packing lines, expansion into newer geographies and rising demand for export-oriented generic medicines. The Company is also focusing on differentiated dosage formats, operational cost optimisation and leveraging its regulated-market customer base for new product introductions.

Active Pharmaceutical Ingredients (API)

The API vertical, operated through Kopran Research Laboratories Ltd. (KRLL), is engaged in the development, manufacturing and sale of APIs and Advanced Intermediates across multiple therapeutic categories. The API manufacturing facility located at MIDC Mahad, Maharashtra, has a built-up area of 11,900 sq. mts. and includes multipurpose plants, pilot plants and specialised manufacturing infrastructure for complex molecules. The Company has dedicated sterile API facility which is now focused on manufacturing complex range of Carbapenems. The Company has commercialised 26 API products catering to both domestic and export markets. The Company has also set up a brownfield API manufacturing facility in Panoli, Gujarat.

The Companys Panoli manufacturing facility commenced commercial production on 31 March 2026. Following the commencement of operations, the Company is actively pursuing the necessary regulatory approvals and customer qualifications across various domestic and international markets. As these approvals are received and commercial supplies ramp up, the Company expects the facility to progressively increase its utilization and achieve its full operating potential over the next two to three years

Kopran has developed capabilities across product categories, including Anti-Hypertensives, Macrolides, Neuromodulators, Urologicals, Anti-Infectives, Anti-Thrombotics, Anti-Diabetics, Sterile Carbapenems, Sterile Cephalosporins, Intermediates, NSAIDs and Cardiology APIs. The Company has established a strong presence in products such as Atenolol and Sterile Carbapenems, supported by advanced manufacturing systems and regulated-market compliance standards.

During FY 2025-26, the API segment generated revenue of 37,335 Lakhs, led by Carbapenems ( 18,977 Lakhs), Macrolides ( 6,081 Lakhs) and Anti-Hypertensives ( 4,580 Lakhs). Export sales contributed 14,598 Lakhs, while domestic sales stood at 22,737 Lakhs.

The Companys general API facilities hold approvals from major regulatory authorities, including US FDA, EU-GMP, WHO-GMP and ANVISA, while the formulations facilities are approved across 15 international markets, including MHRA (UK), Health Canada, SAPHRA South Africa, MMA Malta (EU GMP), FDA Philippines, DAV Vietnam and FDA Thailand.

Outlook

The API business is expected to benefit from rising global demand for speciality APIs, sterile antibiotics, high-value intermediates and regulated-market outsourcing opportunities. The Companys strategic priorities include capacity expansion, development of niche and high-volume APIs, process yield improvements, backward integration through intermediates, new regulatory filings, and expansion of the Panoli R&D and API facility in Gujarat.

TheCompanyisalsofocusingonreducingdependenceonChinathroughlocalisationofintermediatesandprocessoptimisationinitiatives.

Opportunities and Challenges

Opportunities

Carbapenem and Sterile API demand

Koprans API portfolio has a strong presence in Sterile Carbapenems, where the Company has dedicated manufacturing capabilities and an established market presence. During FY 2025–26, Carbapenem revenues contributed 18,977 Lakhs, accounting for the largest share of the API revenue mix. Rising global demand for hospital anti-infectives, injectable antibiotics and critical care therapies is expected to create additional export opportunities across regulated and semi-regulated markets.

Growth in Regulated-Market Formulations Exports

The formulations business continues to derive a significant share of revenues from export-focused geographies, including Africa, South Africa, Southeast Asia, MENA and the UK. During

FY 2025 26, formulations revenue stood at 29,639 Lakhs, supported by stronger demand for Penicillin and Non-Penicillin dosage forms. Increasing product registrations and expansion into newer regulated markets are expected to support further scale expansion.

Diversified Therapeutic Portfolio Across APIs and Formulations

Kopran operates across multiple therapeutic categories, including Anti-Hypertensives, Macrolides, Neuromodulators,

Anti-Thrombotics, Anti-Diabetics, Sterile Cephalosporins, NSAIDs, Cardiology and Gastroenterology. This diversified product portfolio helps reduce concentration risk and enables participation across chronic, acute and speciality therapy segments.

Opportunities from Backward Integration and Intermediates

The Company continues to focus on Advanced Intermediates, localisation initiatives and process optimisation to reduce raw material dependence and improve operational flexibility. Expansion of the Panoli API and R&D facility, along with development of intermediates for key APIs, is expected to support cost optimisation and margin improvement over the medium term.

Regulated Markets

Koprans facilities hold approvals from major regulatory authorities, including US FDA, EU-GMP, WHO-GMP, ANVISA, MHRA (UK), Health Canada and SAPHRA South Africa. These approvals strengthen access to regulated pharmaceutical markets and support participation in international tenders and long-term supply contracts.

The Company is focusing on increasing its exports

Challenges

Volatility in Forex Movements and Export Realisations

The Company reported cumulative forex losses of 1,595

Lakhs during FY 2025–26, reflecting the impact of currency fluctuations on profitability. Since a significant portion of revenues is linked to exports, volatility in global currencies may affect margins and working capital cycles.

Pressure on Profitability from Pricing and Input Costs

Although FY 2025 26 revenue increased to 68,142 Lakhs,

EBITDA margins remained at 11.43%, reflecting pressure from raw material costs, competitive pricing and operating expenses. Maintaining profitability while expanding capacity, ensuring compliance standards, and investing in R&D remains an important focus area.

Dependence on Export-Driven Business Segments

The formulations business primarily caters to export markets, making performance sensitive to geopolitical developments, tender cycles, import regulations and market-specific pricing pressures across Africa, LATAM and other overseas markets.

Regulatory Inspections and Compliance Intensity

Operations across APIs and formulations require continuous adherence to standards prescribed by the US FDA, EU-GMP, WHO-GMP and other international regulatory agencies. Regulatory observations, delays in product approvals or changes in compliance requirements could impact production schedules and export supplies.

Working Capital and Debt Management

Borrowings increased to 15,269 Lakhs in FY 2025 26 as the

Company continued investments in manufacturing operations and business expansion. Balancing capital expenditure, debt servicing and operating cash flows remains important amid changing market conditions.

Sustainable Growth Strategies

The Company is strengthening its management bandwidth by augmenting its leadership team and organizational capabilities to support its growth strategy. These initiatives are expected to enhance execution capabilities, improve operational effectiveness, and position the Company to capitalize on emerging business opportunities

The Company is strategically strengthening its CDMO and CMO business to enhance its presence in regulated markets. It has entered into development and manufacturing agreements with several international pharmaceutical companies. These partnerships are expected to drive exports to regulated markets, improve capacity utilization, and establish long-term customer relationships. The increasing contribution from CDMO/CMO operations is anticipated to enhance the Companys margin profile through higher-value offerings while providing greater revenue visibility and a more stable, recurring business stream

In other export markets, the Company continues to aggressively expand its product registrations across the countries in which it operates while simultaneously entering new geographies to broaden its global footprint. This strategy is aimed at strengthening market presence, diversifying the export portfolio, and unlocking new growth opportunities. By expanding its product offerings and geographic reach, the Company seeks to enhance export revenues, reduce market concentration risks, and build a sustainable international business

The Companys API business is focused on increasing export revenues by expanding into new geographies, broadening its customer base, and accelerating the filing of newly developed API molecules in international markets. A higher contribution from exports is expected to improve margins through better product realization and a more value-accretive revenue mix.

The Company is taking strategic initiatives to enhance backward integration across its manufacturing operations while broadening and strengthening its supply chain. It is also focused on improving manufacturing processes and operational efficiencies to optimize costs, ensure a reliable supply of key inputs, and enhance product quality. These initiatives are expected to improve competitiveness, strengthen business resilience, and support sustainable long-term growth.

Therapeutic Area

Particulars	FY 2025-26	FY 2024-25	FY 2023-24
Anti-Diabetic	392	121	107
Anti-Infective	56	96	101
Antibiotic-Urological	1,675	1,556	3,245
Anti-Hypertensive	4,580	4,767	4,393
Neuromodulator	2,551	2,378	2,208
Sterile Cephalosporin	129	1,496	1,798
Macrolide	6,081	6,200	5,547
Carbapenem	18,977	16,108	14,709
Anti-Thrombotic	2,315	1,534	939
Intermediate	394	1,611	162
Anti-Lipid	142	2	—
NSAIDs	43	12	—

Financial Performance Highlights

Key Financial Ratios Based on the Consolidated Financial Statement

Key ratio	FY 2025-26	FY 2024-25	Increase/(decrease) (in %)	Remark
Debtors Turnover Ratio	2.85	2.95	-3.27	-
Inventory Turnover Ratio	2.40	2.63	-8.60	-
Interest Coverage Ratio	7.44	6.56	13.41	-
Current Ratio	1.51	1.76	-14.13	-
Debt Equity Ratio	0.29	0.29	-0.71	-
Operating Profit Margin (%)	1.00	0.99	0.58	-
Net Profit Margin (%)	3.77	6.08	(37.99)	Due to Impact of forex losses and higher depreciation
Return on Net Worth	4.85	7.44	(34.81)	Lower return due to a decline in PAT

Key Financial Ratios Based on the Standalone Financial Statement

Key ratio	FY 2025-26	FY 2024-25	Increase/(decrease) (in %)	Remark
Debtors Turnover Ratio	2.72	3.02	-9.93	-
Inventory Turnover Ratio	2.80	2.99	-6.44	-
Interest Coverage Ratio	10.62	10.50	1.10	-
Current Ratio	1.63	2.02	-19.19	-
Debt Equity Ratio	0.10	0.11	-1.43	-
Operating Profit Margin (%)	0.99	0.98	1.51	-
Net Profit Margin (%)	13.22	13.21	0.06	-
Return on Net Worth	0.17	0.17	2.96	-

Key Financial Highlights on the Consolidated Basis

Key Parameter	FY 2025-26	FY 2024-25	Increase/(decrease) (in %)	Remark
Income from Operations	68,142.36	62,960.44	8.23	-
EBITDA**	6195.47	7,289.99	(15.01)	-
PBT	3,435.62	5,194.86	(33.87)	Due to Impact of forex losses and higher depreciation
PAT	2,573.12	3,855.19	(33.26)	Due to Impact of forex losses and higher depreciation
Material costs	43901.55	40,461.67	8.50	-

 

Key Parameter	FY 2025-26	FY 2024-25	Increase/(decrease) (in %)	Remark
Employee benefit expenses	6521.31	6,053.62	7.73	-
Other expenses	9929.46	9,155.16	8.46	-
Shareholders fund	53,028.05	51,834.79	2.30
Non-current liabilities	3190.18	3,669.74	(13.07)	-
Current liabilities	34618.01	28,896.74	19.80	-
Non-current assets	38,518.57	33,426.36	15.23	-
Current assets	52317.67	50,974.91	2.63	-

Key Financial Highlights on the Consolidated Basis

Key ratio	FY 2025-26	FY 2024-25	Increase/(decrease) (in %)	Remark
Income from operations	30564.62	27,100.95	12.78	-
EBITDA*	4757.57	3,865.58	11.25	-
PBT	4039.39	3,579.48	12.85	-
PAT	3039.97	2,685.62	13.19	-
Material costs	17013.33	15,738.07	8.10	-
Employee benefit expenses	3294.29	3,001.59	9.75	-
Other expenses	5499.43	4,495.71	22.33	-
Shareholders fund	44783.10	43,143.78	3.80	-
Non-current liabilities	1111.82	1,172.00	(5.13)	-
Current liabilities	14694.46	10,332.50	42.22	Due to Increase in Trade Payable & Other Current liability
Non-current assets	36565.43	33,743.59	8.36	-
Current assets	24023.95	20,904.69	14.92	-

Risk Management and Concerns

Kopran has implemented a comprehensive Risk Management Policy to identify, evaluate and monitor potential risks, to reduce their impact on the Companys operations, financial performance and overall business stability.

Increase/(decrease) (in %)	Remark
Changes in regulatory requirements, government policies or compliance standards may affect manufacturing operations, product approvals and market access. Non-compliance could also impact the Companys reputation and business continuity.	The Company follows applicable regulatory guidelines across all operating markets and maintains quality and compliance systems aligned with global standards to ensure smooth operations.
Delays or shortages in the procurement of raw materials, intermediates and key starting materials may affect production schedules, operational efficiency and profitability.	Kopran is strengthening procurement strategies through the development of Key Starting Materials (KSMs), supplier diversification and dual sourcing arrangements for critical raw materials.
The pharmaceutical industry requires continuous product development, process improvements and technology upgrades to remain competitive. Delays in innovation may affect market positioning and growth opportunities.	The Company continues to invest in R&D capabilities, process development and technology enhancement initiatives while collaborating with global partners for product and process advancements.
Intense competition across domestic and export markets may affect pricing, market share and operating margins.	Kopran focuses on differentiated products, regulated- market presence, quality standards and strategic expansion initiatives to strengthen competitiveness.
Export-oriented operations expose the Company to fluctuations in foreign exchange rates, which may impact revenue realisation and profitability.	The treasury team continuously monitors currency movements and undertakes appropriate measures to manage forex-related exposure.
Macroeconomic conditions such as inflation, interest rates, geopolitical developments and changes in global demand may affect operating performance and export business.	The Company monitors economic developments closely and undertakes corrective actions to reduce the impact of external market disruptions.
Supply-chain disruptions, transportation delays and shipping challenges may impact timely product deliveries and customer servicing.	Kopran maintains dedicated logistics planning and diversified supply-chain coordination to minimise operational disruptions and ensure delivery continuity.
Environmental non-compliance or failure to meet sustainability-related requirements may affect operations, reputation and regulatory standing.	The Company follows environmental regulations, maintains compliance systems and regularly undertakes environmental monitoring and reporting activities.

Quality and Concerns

The Company is committed to maintaining the highest international quality standards across its manufacturing operations. The Companys facilities strictly adhere to guidelines established by global regulatory authorities. It has implemented a comprehensive quality and safety management system that promotes safe manufacturing practices while ensuring the delivery of superior products. All manufacturing units operate in accordance with Good Manufacturing Practices (GMP), underscoring their focus on quality, excellence and value. The Companys manufacturing hubs have received approvals and recognitions from several regulatory bodies, including the MHRA (UK), TFDA (Tanzania) and MCC (South Africa), among others.

Human Resources

During FY 2025–26, the Company strengthened its commitment to human capital development and operational excellence by driving targeted learning initiatives focused on technical, functional, and behavioral competencies, alongside critical regulatory, GMP, and EHS compliance. To sustain long-term growth and build a robust talent pipeline, the Company combined strategic lateral hiring across core manufacturing, R&D, and commercial functions with structured campus recruitment, backed by digital HR process enhancements and merit-based performance management. Fostering a high-performance culture remained deeply intertwined with employee well-being and inclusivity the Company sustained high engagement through wellness and cultural initiatives, maintained absolute compliance with the Sexual Harassment of Women at Workplace Act, and upheld strict non-discrimination standards. Underpinned by constructive dialogue and robust grievance redressal mechanisms, the Company achieved harmonious industrial relations and reinforced a safe, collaborative, and legally compliant workplace across all operational locations.

Internal Control System

The Companys internal control system is specifically created to fit its size and nature, encouraging a culture of innovation and continuous improvement. The Audit Committee of the Board frequently assesses the systems efficacy in recording transactions, managing assets and reporting. A chartered accounting company conducts independent quarterly internal audits to ensure accuracy and compliance with regulatory standards. The Audit Committee thoroughly evaluates the reports submitted by the Internal Auditors. Any issues reported by the Internal and Statutory Auditors are carefully addressed and immediately remedied, indicating the Companys strong commitment, reflecting high levels of internal control and corporate governance.

Cautionary Statement

The forward-looking statements in this report adhere to the relevant securities laws and regulations. The actual results and the Companys planned results could differ significantly due to several circumstances. Key factors that may have an impact on the Companys performance include domestic and international economic conditions, as well as changes in government policies, tax laws and other regulations.