Lasa Supergenerics Ltd Management Discussions

Forward-Looking Statement

This Management Discussion and Analysis (MDA) contains forward-looking statements that reflect the Companys objectives, expectations, and predictions based on certain assumptions and future events. These statements are subject to risks and uncertainties that could cause actual results to differ materially. The Company undertakes no obligation to update or revise any forward-looking statements due to new information or future events.

Global Economic Review

The global economy has demonstrated resilience despite significant interest rate hikes by central banks aimed at price stability. The IMF projects a steady global growth rate of 3.2% in 2024 and 2025, mirroring 2023s pace. Inflationary pressures are easing faster than expected, balancing risks to global economic outlooks. Supply-enhancing reforms and multilateral cooperation are essential to sustain growth, tackle climate change, and mitigate geoeconomic fragmentation risks.

Global Pharmaceutical Industry Outlook

The pharmaceutical industry is expected to grow at a CAGR of 5.9% from 2023 to 2028, despite a plateau in 2023 due to a slowdown in biologics and COVID-19 vaccine demand. Emerging markets in APAC and LATAM are driving stronger growth compared to developed economies. The sector is witnessing a surge in biosimilars, digitalization of supply chains, AI applications, and a healthy M&A environment. Increased patient access to better medicines is a key growth driver.

Indian Economic Landscape

India recorded a robust GDP growth of 8.15% in FY23-24, driven by strong domestic demand, manufacturing growth, and government reforms. GDP is forecasted to grow between 7.0% and 7.3% in the next two fiscal years, supported by improving capital flows and easing inflationary pressures. The governments reform agenda and optimistic market sentiment are expected to sustain Indias growth momentum.Indian Pharmaceutical Industry

India is the 3rd largest pharmaceutical producer globally, with a market expected to reach US$ 130 billion by 2030. The industrys growth is supported by strong export performance, government initiatives like the PLI scheme, and expansion of the biosimilars market. Indias pharmaceutical ecosystem benefits from a skilled workforce, robust manufacturing infrastructure, and increasing domestic demand.

Global and Indian API Industry

The global Active Pharmaceutical Ingredient (API) market is projected to grow from $163.5 billion in 2024 to $238.3 billion by 2029 at a CAGR of 7.8%. India, as the 3rd largest API producer, accounts for 8% of the global market and is expected to expand at a CAGR of about 6.5% through 2028. Growth drivers include rising healthcare spending, aging population, increased DMF filings with regulatory bodies, and government support for domestic API manufacturing.

Company Overview

Lasa Supergenerics Limited is a vertically integrated entity specializing in veterinary APIs with a strong focus on catalyst chemistry. The Company operates manufacturing facilities in Maharashtra with backward integration from discovery to bulk production, serving over 500 global customers across India, Australia, Middle East, China, and other regions. Lasa is recognized as a leading player in Indias veterinary API market and continues to expand its export presence.

Strengths

• Diverse product portfolio with over 15 niche veterinary and human APIs.

• Vertically integrated manufacturing infrastructure allowing flexible product mix.

• Strong R&D capabilities focused on process optimization and new product development.

• Cost advantage through backward integration and multi-purpose manufacturing facilities.

Established global marketing footprint and alliances with key industry players.

Challenges

• Limited capabilities in global regulatory affairs, intellectual property creation, and international marketing compared to larger peers.

• Rising costs of skilled manpower impacting innovation and operational efficiency.

• Constraints due to litigation affecting credit facilities for expansion.

• Need for strengthening manufacturing practices to meet global regulatory expectations.

Opportunities

• Growing demand for cost-effective contract manufacturing and research services by multinational companies.

• Licensing and marketing alliances for new chemical entities (NCEs) and new drug delivery systems (NDDS).

• Expansion potential in emerging and mature international markets.

• Increasing government support for pharmaceutical manufacturing and API production.

• Rising global demand for animal health and veterinary APIs.

Threats

• Stricter product patent regimes impacting domestic innovation.

• Regulatory challenges and pricing controls limiting profitability.

• Competitive pressures from Chinese and East European manufacturers.

• Potential adverse impact of mergers and acquisitions by multinational corporations on the generic pharma market.

• Statutory Hurdles.

Performance Review

The financial statements are prepared under historical cost convention, on accrual basis of accounting, and in accordance with the provisions of the Companies Act, 2013 (the Act) and comply with the Accounting Standards notified under Section 133 of the Act read with the Companies (Accounting Standards) Rules, 2015. The management of the Company has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the state of affairs and profit/ loss for the year.

The following discussions on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all

references herein to "we", "us", "our", "Your Company", "the Company", "Lasa", "Lasa Supergenerics Ltd." are to Lasa Supergenerics Ltd.

STANDALONE FINANCIAL OVERVIEW

The performance of the Company for the financial year ended March 31, 2025 is as follows: Financial Highlights:

Particular	Amount ( n Rupees)
As at Year end	March 31, 2025	March 31,2024
Income from operations	14244.81	10433.50
Other Income	501.23	9.93
Total Income	14746.03	10443.43
Expenditure	13618.21	10216.92
Profit/ (Loss) before Depreciation, Interest and Tax	1127.82	226.51
Less: Depreciation	1229.98	1067.26
Profit/ (loss) before Interest and Tax	(102.16)	(840.75)
Less: financial Charges	269.24	193.19
Profit/ (Loss) Before Extraordinary Items & Tax	(371.40)	1033.93
Less: Exceptional Items	1566.91	877.32
Add Excess Depreciation due to change in Depreciation method from WDV to SLM.	-	-
Less: (Excess)/ Short Tax Provision	-	-
Less: Provision for Taxation	-	-
Add : Deferred Tax Income / (Expenditure)	(462.58)	261.81
Profit / (Loss) After Tax	(1475.73)	(2173.06)
Add: Prior Period Income /(Expenditure) (Net)	-	-
Add: Other Comprehensive Income	4.42	11.54
Profit / (Loss) for the Year	(1471.31)	(2161.53)

Note: figures of previous years have been regrouped / reclassified wherever necessary to confirm this periods classification.

Impact of Global Economy & Business Outlook

Geopolitical tensions, especially ongoing conflicts in Eastern Europe and the Middle East, continue to pose significant risks to global economic stability by disrupting supply chains and increasing inflationary pressures. Climate change impacts, including droughts and extreme weather events, have further strained global trade routes and manufacturing activities, posing near-term risks to economic growth.

Despite these challenges, the business outlook for FY 2024-25 remains positive for Lasa Supergenerics Limited. With growing demand for Active Pharmaceutical Ingredients (APIs) driven by a slowdown in the Chinese economy, the Company expects a healthy uptick in revenues and profitability. The consolidation of manufacturing into a single facility at MIDC Lote Parshuram aims to enhance operational efficiency and mitigate risks related to past disruptions such as fire, floods, and regulatory hurdles. Resolution of ongoing banking disputes is expected to improve working capital availability and overall performance.

Risks and Concerns

• Regulatory Risks: Compliance with stringent regulatory standards across various global markets entails significant costs and uncertainties. Delays or changes in regulatory approvals can impact product commercialization.

• R&D Risks: High investments in R&D carry inherent risks of delays or failure to obtain necessary regulatory clearances.

• Environmental & Compliance Risks: Non-compliance with environmental laws or adverse natural events can disrupt manufacturing operations. Past incidents have prompted consolidation of manufacturing units.

• Insurance Risks: Ongoing litigation with insurers has resulted in a lack of insurance coverage, exposing the Company to uninsured risks despite safety measures.

• Quality and Statutory Risks: Packaging or manufacturing discrepancies, legal disputes with tax authorities, and ongoing litigation with financial institutions pose operational challenges.

• Other Concerns: Currency fluctuations, competitive pressures, intellectual property risks, and potential delays in regulatory approvals remain key areas of vigilance.

Risk Management and Internal Control Systems

Lasa Supergenerics Limited has established a comprehensive risk management framework that includes regular risk identification, assessment, and mitigation strategies overseen by the Board of Directors. The Company maintains robust internal controls and conducts periodic internal audits to ensure operational efficiency, regulatory compliance, and financial integrity. The Audit Committee actively reviews internal audit findings and recommends improvements. Additional measures such as fraud risk assessments, whistleblower policies, and strengthened employee verification processes further enhance governance standards.

Human Resources

The Company values its human capital as a key driver of growth and innovation. With a workforce of 66 employees as of March 31, 2025, Lasa fosters a culture of learning, mentorship, and high performance. Regular training programs, strong industrial relations, and employee development initiatives support a motivated and skilled team aligned with the Companys strategic objectives.