Laurus Labs Ltd Management Discussions

Global economy

The global economy exhibited resilience in 2024, maintaining a growth rate of 3.32%, consistent with the previous year. This stability was underpinned by robust domestic demand in several advanced economies and a gradual recovery in emerging markets. However, the year was not without challenges. Policy uncertainty intensified due to persistent trade tensions, geopolitical conflicts, elevated inflation in some regions and volatile commodity prices.

In response to moderating inflation and slowing growth, central banks in major economies initiated cautious monetary easing. The U.S. Federal Reserve began rate cuts in September 2024, while the European Central Bank implemented a series of reductions, aiming to support economic activity without reigniting inflationary pressures. Global inflation showed signs of moderation, declining from 6.8% in 2023 to an estimated 5.9% in

2024, with projections indicating a further decrease to 4.5% in 2025.

These global trends played out differently across regions. The United States experienced flat growth in 2024 compared to the previous year, with projections indicating a slowdown from 2.8% in 2024 to 1.8% in

2025. The euro area remained subdued, with growth expected to increase slightly to 1.0% in 2025. Chinas economy faced headwinds from both domestic structural adjustments and external trade pressures, leading to a projected growth rate of 4.7% in 2025.

In contrast, India maintained its position as one of the fastest-growing major economies, supported by strong domestic demand and structural reforms.

Global and regional GDP growth projections (% Change)

(% Change)
Region/Economy	Estimate H	Projection
	2024	2025	2026
World	3.3%	2.8%	3.0%
Advanced Economies	1.5%	1.7%	1.8%
United States	2.8%	1.8%	1.7%
Euro Area	0.7%	1.0%	1.2%
Japan	0.9%	0.6%	0.7%
United Kingdom	0.5%	1.0%	1.2%
Canada	1.2%	1.5%	1.7%
Emerging Market and Developing Economies	4.2%	4.0%	4.1%
China	4.8%	4.1%	4.0%
India	6.2%	6.5%	6.5%

Outlook j

Looking ahead, the IMF projects global growth to moderate to 2.8% in 2025 and slightly recover to 3.0% in 2026. The outlook is shaped by several factors, including ongoing trade tensions, geopolitical risks, and the pace of monetary policy adjustments. The IMF emphasises the importance of global cooperation on trade and debt restructuring, cautioning that further escalation could trigger broader financial instability.

A significant development contributing to these concerns was the resurgence of protectionist trade policies in 2024, notably the imposition of substantial tariffs by the United States on Chinese goods. These measures, reaching historically high levels, prompted retaliatory actions from China, leading to heightened global trade tensions.

The resulting uncertainty disrupted supply chains and contributed to a slowdown in global trade volumes, with the IMF noting that such tensions could moderate global GDP by around 0.5 percentage points.

Indian economy

India maintained its position as the fastest-growing major economy in FY25, with GDP expanding by 6.5%, as per the NSOs Second Advanced Estimates. Despite global headwinds, including trade disruptions, geopolitical tensions and financial market uncertainties, the Indian economy stood out for its resilience, underpinned by strong macroeconomic fundamentals, policy consistency and a stable financial system. Public sector investments and infrastructure development emerged as key drivers of growth, offsetting the effects of muted private consumption. The governments continued emphasis on capital expenditure, particularly in transportation, energy, and digital infrastructure, sustained momentum even as household consumption faced pressure from elevated inflation levels during parts of the year.

The services sector remained a cornerstone of growth, with finance, real estate, and IT services contributing significantly to overall performance. Meanwhile, manufacturing witnessed moderate growth at 3.9% in FY25, compared to 5.5% in FY24, reflecting the impact of global demand softening and domestic supply adjustments. Agriculture, however, demonstrated resilience, recording 4.6% growth, supported by favourable monsoon conditions, robust crop yields, and sustained policy support.

Inflation moderated steadily through FY25, with Consumer Price Index inflation declining to 3.34% in March 2025, led by sharp corrections in food prices.

This easing of inflationary pressures allowed the Reserve Bank of India (RBI) to initiate its first rate cut since 2020, reducing the repo rate by 25 basis points from 6.5% to 6.25% in February, and then by another 25 basis points to 6.00% in April 2025. The central banks approach remained cautious, balancing the need to support growth without compromising on financial stability.

The governments policy approach remained firmly anchored in creating a transparent, rule- based ecosystem supportive of investment and innovation. Structural reforms aimed at strengthening manufacturing, enhancing domestic supply chains, accelerating digital transformation, and promoting sustainability were key focus areas.

The broader ambition of transitioning towards a "Viksit Bharat" (Developed India) by 2047 has reinforced the medium- and long-term direction of economic policymaking.

j) Outlook ^

Looking ahead, the RBI projects GDP growth at 6.5% in FY26, with inflation anticipated to remain within the RBIs comfort range of 4%, aided by stable commodity prices and steady demand conditions. While the macroeconomic and financial foundations remain robust, the outlook is not without risks. Geopolitical uncertainties, including recent border tensions, along with evolving global conditions, may pose challenges to sentiment and external trade. Nonetheless, continued progress in domestic reforms, coupled with sound fundamentals, positions India favourably in the global economic landscape, offering opportunities for sustained growth and development.

Industry overview

Global pharmaceutical market

The global pharmaceutical market was valued at approximately US$ 1.7 trillion in 2024, reflecting the worlds rising demand for healthcare solutions. Growth is being driven by the increasing burden of chronic diseases, aging populations, and rising investments in biologics, biosimilars, and personalised medicine. Research and development (R&D) activity has intensified as the industry addresses unmet medical needs, supported by faster regulatory approvals and increased healthcare spending worldwide. While North America leads in global revenues with a strong R&D pipeline and steady demand for innovative therapies, emerging markets in Asia and Latin America are gaining ground, supported by improved healthcare access, growing supply chains, and expanding middle- class populations.

Technological shifts such as AI-assisted drug discovery, digital therapeutics, and telemedicine are gradually reshaping how treatments are developed, delivered, and monitored, though the industrys core focus remains on advancing complex therapies and strengthening global supply capabilities. Alongside, the rising emphasis on affordability, cost-effectiveness, and patient access is shaping investment and development priorities. Together, these forces position the pharmaceutical market for sustained growth, even as it navigates regulatory pressures, pricing challenges, and the evolving needs of healthcare systems worldwide.

Regional developments

• North America maintained its leadership in 2024, accounting for 38.6% of global pharmaceutical revenues, underpinned by strong R&D investments, a robust regulatory framework, and sustained innovation in biologics and specialty drugs.

• Asia-Pacific is the fastest-growing region, fuelled by expanding healthcare infrastructure, rising chronic disease burdens, and local companies increasing participation in global supply chains. Notably, Chinas share of major pharmaceutical transactions soared from <5% in 2020 to ~30% in 2024, reflecting its biotech boom.

• India continues to reinforce its reputation as the pharmacy of the world, with pharmaceutical exports to the U.S. reaching US$ 8.7 billion in FY24, accounting for about 31% of total Indian pharma exports.

• Latin America and Africa are witnessing accelerating growth, driven by private investments, improved healthcare delivery, and widening access to essential medicines.

Key trends shaping the pharmaceutical industry

• Expansion of specialty medicines: Specialty medicines, including biologics and cell and gene therapies, are expected to account for over 45% of global spending by 2028. Areas such as oncology, immunology, and rare diseases are driving much of this growth.

• Rise of generics and biosimilars: While specialty drugs dominate spending, generics and biosimilars continue to play a critical role in expanding patient access, particularly in emerging markets. According to IQVIA report, that biosimilars alone will generate US$ 186 billion in cumulative savings for healthcare systems by 2028.

• Precision medicine and personalised treatments: Companies are investing heavily in genomic data, biomarkers, and targeted therapies, particularly in oncology, rare diseases, and immunology, to deliver highly personalised patient care.

• Digital health integration: Telemedicine, wearable devices, and AI-powered health apps are transforming patient monitoring, improving adherence, and enabling pharmaceutical companies to collect real-world evidence.

• AI in Drug Discovery: Artificial intelligence is revolutionising drug development by reducing timelines, improving accuracy in candidate selection, and enabling faster delivery of breakthrough treatments.

• Emerging market growth: Countries such as China, India and Brazil are witnessing increased pharmaceutical demand due to rising healthcare infrastructure investments and an aging population.

• Rising R&D Investments: Global R&D spending, which reached US$ 200 billion in 2023, is projected to grow by 5-7% annually, with a strong focus on clinical trials, gene editing, and new drug delivery technologies.

Market size and forecast (2025-2034)

(US$ Billion)

Outlook^)

Looking ahead, the pharmaceutical market is projected to reach approximately US$ 2,970 billion by 2034, expanding at a CAGR of 5.74% from 2025 to 2034. This forecast reflects the sustained demand for innovative therapies, expanding biopharma collaborations, and deeper penetration of pharmaceuticals into developing regions. The global pharmaceutical industry is evolving with a sharp focus on enhancing core capabilities in research, development, and manufacturing to meet the growing demand for complex therapies and biologics. There is a strong shift toward biopharmaceuticals, including monoclonal antibodies, biosimilars, and advanced treatments such as gene and cell therapies.

The sector is also expanding in emerging markets, reinforcing supply chain resilience, and adapting to stricter quality standards to ensure scalable, compliant production.

Further, the industry is navigating a landscape marked by increased regulatory scrutiny, pricing pressures, and rising expectations around affordability and access. The integration of digital tools to support real-time data collection, patient engagement, and streamlined processes is subtly reshaping operations. To thrive, the industry must balance innovation in drug pipelines, manufacturing excellence, and global delivery, all while addressing challenges such as cost constraints, evolving healthcare policies, and the complexity of new treatment options.

Source: Cervicon Consulting

Global CDMO industry overview

The global pharmaceutical Contract Development and Manufacturing Organisation (CDMO) market is projected to reach approximately US$ 169.87 billion in 2024, continuing its upward trajectory as a critical player in the pharmaceutical value chain. This growth is supported by a range of key factors, including the increasing complexity of drug development, the rise of biologics and personalised medicines, and the ongoing trend towards outsourcing.

The need for specialised expertise in biologics, gene therapies, and other complex drugs is expanding the role of CDMOs in pharmaceutical manufacturing.

As biopharmaceuticals become increasingly prevalent,

CDMOs are positioned as essential partners for the development and commercialisation of these drugs. Moreover, outsourcing trends have accelerated, with pharmaceutical companies recognising the cost-saving potential of leveraging the capabilities of external manufacturing partners. By outsourcing, companies can reduce capital expenditure on manufacturing facilities and focus their investments on core areas such as research and development.

In addition, CDMOs benefit from increased demand for services tied to both traditional and novel drug manufacturing, such as sterile injectables, viral vectors, and the production of cell and gene therapies. This is transforming the industry, with many CDMOs pivoting towards cutting-edge manufacturing capabilities to meet the needs of biologics developers. These driving factors are expected to propel the industry forward in the coming years, making CDMOs indispensable to the global pharmaceutical ecosystem.

Regional developments in the CDMO market

The CDMO markets growth varies across regions, each with distinct advantages and opportunities. Notable regional developments include:

• Asia-Pacific: The region continues to dominate as the largest contributor to the global market, driven by low labour costs, the expanding pharmaceutical infrastructure in countries like India and China, and strong government support for the pharmaceutical sector.

• North America: The region is known for its stringent regulatory standards and focus on high-quality production. The United States is home to a significant portion of global pharmaceutical companies that are increasingly relying on CDMOs to meet growing production demands, particularly for biologics and advanced therapies.

• Europe: The European CDMO market is strong, particularly in countries like Germany and Switzerland. The regions emphasis on regulatory compliance and technological innovation supports its position as a key player in contract manufacturing, especially for sterile products and biologics.

• Latin America: The market is growing, with rising demand for generic drugs and increased outsourcing by North American and European pharmaceutical companies seeking cost-effective solutions in manufacturing.

• Middle East and Africa: These regions are seeing steady growth in demand for contract manufacturing services, particularly in countries like Saudi Arabia and South Africa, driven by local pharma expansion and increasing healthcare investments.

Key trends shaping the cdmo industry

Several significant trends are reshaping the global CDMO landscape:

• Rising demand for biologics and gene therapies:

The increasing prevalence of biologics and complex therapies, such as gene and cell-based treatments, is pushing CDMOs to enhance their manufacturing capabilities, especially in the fields of sterile injectables and viral vector production.

• Outsourcing expansion: Pharmaceutical companies are increasingly outsourcing their manufacturing to CDMOs in order to reduce capital expenditures and focus on core areas such as R&D. This trend is expected to drive the need for more flexible and responsive manufacturing solutions.

• Technological integration: CDMOs are investing in automation, AI and data analytics to optimise manufacturing processes, reduce errors, and improve production efficiency. These technologies are becoming essential to remain competitive in a rapidly evolving market.

• Environmental sustainability: Growing regulatory pressures and market expectations are pushing CDMOs to adopt sustainable manufacturing practices. This includes reducing waste, optimising energy use, and incorporating green technologies to align with global environmental standards.

• Regulatory compliance and quality assurance:

As global drug production becomes more complex, CDMOs are increasingly required to meet higher regulatory standards, driving investment in quality assurance systems and advanced compliance technologies.

Outlook ^ s

Looking ahead, the global CDMO industry is expected to continue its growth trajectory, with a positive outlook for the next decade.

As pharmaceutical companies shift their focus to biologics and complex therapies, the demand for contract manufacturing services will only increase. The outsourcing trend will also accelerate as companies strive to improve operational efficiencies and reduce costs while meeting the growing global demand for innovative medicines.

However, there are several challenges on the horizon. Stringent regulatory requirements will require CDMOs to continuously adapt and invest in compliance-related technologies and practices. Additionally, the rapid pace of technological advancements means that CDMOs will need to stay ahead of the curve to remain competitive.

Indian pharmaceutical market

The Indian pharmaceutical industry has experienced significant growth in recent years and is poised for sustained expansion in the coming years. In FY25, the industry is estimated to reach a market size of Rs 2.38 lakhs crores (US$ 28.5 billion), reflecting an 8.2% growth from the previous year. The Indian pharmaceutical market is expected to maintain this robust growth trajectory, with a CAGR of 8-9% over the next 5-7 years. This growth is underpinned by a combination of factors, including increasing demand from both domestic and international markets, a strong export performance, and regulatory support from the Indian government. [Source: PharmaRack]

Indian CDMO market overview

With a market size of US$ 22.51 billion in 2024, the Indian CDMO sector is poised for significant expansion over the coming years. India is recognised as a top destination for pharmaceutical outsourcing, benefiting from a combination of a skilled workforce, highly competitive costs, and regulatory-compliant facilities.

India continues to be a dominant player in the generic medicines and vaccine markets, commanding a substantial share of global exports, including over 40% of the US OTC drug market and producing approximately 60% of the worlds vaccines. These strong global positions provide a solid foundation for the sectors growth in both small molecule and biologics manufacturing.

Key trends and growth drivers

Indias CDMO sector is evolving rapidly, driven by several key trends and growth drivers that are shaping the future of pharmaceutical outsourcing:

• Cost competitiveness: India remains highly competitive in terms of costs for R&D and manufacturing. This cost advantage continues to be a primary factor for pharmaceutical companies seeking to optimise their supply chains, particularly those looking to shift production away from China and other high-cost regions.

• Skilled workforce: India is home to a large pool of highly skilled professionals, including scientists and regulatory experts, providing a substantial talent base for CDMOs. The countrys workforce, with its robust technical knowledge and expertise, is a key asset for Indian companies seeking to meet the increasingly complex demands of global pharmaceutical markets.

• Regulatory compliance and infrastructure:

Indias US FDA-approved manufacturing facilities continue to bolster its reputation for high-quality manufacturing and regulatory compliance.

This status enables Indian CDMOs to offer services that meet the strictest global quality standards, positioning India as a reliable partner for both established and emerging pharmaceutical companies worldwide.

• Technological advancements: The growing use of artificial intelligence (AI), machine learning (ML), and automation in the pharmaceutical manufacturing process is enhancing operational efficiency.

These technologies are playing a pivotal role in reducing time-to-market, improving product quality, and boosting the overall competitiveness of Indias CDMOs.

• Geopolitical shifts: With rising concerns over supply chain risks, Indian CDMOs are benefitting from the global shift towards diversified supply chains.

The countrys favourable position as a competitive and reliable outsourcing destination has made it a key player in the global pharmaceutical supply chain.

Indian CDMO market forecast (2024-2029)

(US$ Billion)

Outlook

Indias CDMO market is expected to double by 2029, growing from US$ 22.51 billion in 2024 to US$ 44.63 billion at a CAGR of 14.67%.

This growth will be driven by Indias expanding role in small molecule manufacturing and the increasing demand for biologics. This is prompting Indian CDMOs to ramp up capacities in biologics manufacturing and capture a larger share of this lucrative market. Additionally, the rise of cell and gene therapies is opening new avenues, encouraging Indian players to upgrade their capabilities to serve this complex and fast- evolving field. Moreover, continued investments in research and development are enabling Indian CDMOs to diversify their service portfolios, particularly in cutting-edge areas such as peptides, oligonucleotides and other specialised drug modalities.

v ) Company overview

Laurus Labs Limited, an integrated pharmaceutical manufacturing company based in India, is committed to driving sustainable growth and innovation within the pharmaceutical industry. With a mission to provide high-quality medicines consistently and globally, the company has established a reputation for excellence in drug development and manufacturing. Through continuous investment in research and development, Laurus Labs has evolved into a diversified leader, tapping into new growth opportunities across various sectors.

Originally founded as a company specialising in Active Pharmaceutical Ingredients (APIs) for Antiretroviral (ARV) therapies, Laurus Labs has expanded its expertise into Formulations and ventured into Contract Development and Manufacturing Organisation (CDMO) services for human health, animal health, specialty chemicals, and crop science ingredients. In line with its vision of becoming a fully integrated pharmaceutical company, Laurus Labs is now focusing on cutting-edge technologies, including Precision Fermentation and Cell and Gene Therapy manufacturing, with plans to establish a Centre of Excellence in this emerging field.

This strategic transformation reflects Laurus Labs commitment to future growth, realised through constant innovation, adaptability and a relentless focus on operational excellence.

Opportunities

• Innovations in cell and gene therapies: Significant potential for breakthroughs in advanced therapies, with a growing emphasis on strategic investments in the development of cell and gene therapies.

• Expertise in chemistry and process engineering:

Leveraging deep expertise in these fields to drive improvements in product development and manufacturing efficiencies, strengthening competitive advantages across multiple segments.

• Strong pipeline and rapid scale-up: Continued progress in both CDMO and CMO projects, facilitating the scaling up of manufacturing capabilities and enhancing commercial execution.

• Cost optimisation and resource management:

Effective use of manpower, materials, and reactors to optimise production costs and increase margins, enhancing overall efficiency.

• Greener, cleaner, and safer processes:

Transitioning to environmentally friendly production methods through the adoption of Continuous Flow Chemistry and Bio catalysis.

• In-house manufacturing for supply chain security: Manufacturing key intermediates internally, ensuring greater supply chain stability and reducing external dependencies, while driving down production costs.

• Diversified project portfolio: Expanding into new markets and product segments, improving profit margins through a more diversified and strategically aligned portfolio.

• Stabilising ARV sales: Efforts to stabilise and meet the increasing global demand for Drug Substance (DS) and Drug Product (DP), securing a strong position in the ARV market.

Threats

• Price erosion and regulatory scrutiny: Slower growth in key export markets such as the USA due to price erosion and increasing regulatory challenges that can affect market dynamics.

• Regulatory delays: Potential delays in obtaining regulatory approval for new products, impacting the timely launch of new therapies and treatments.

• ARV drug pricing pressures: The global oversupply of Antiretroviral (ARV) drugs, which is leading to excess channel inventory and price pressures, affecting profitability in this sector.

• Clinical programme delays: Potential delays in clinical development programs of strategic partners, which could impact the timeline for the introduction of new therapies.

Division-wise performance

CDMO

Our performance in the CDMO segment during FY25 was marked by strong growth, particularly in the small molecule space, where we achieved 49% growth.

The growth was driven by successful execution across multiple mid- to late-stage New Chemical Entity (NCE) programmes and ramp-up of new manufacturing assets commissioned during the second half of the year. We recorded annual revenues of Rs 1,374 crores, reflecting the increasing demand for our integrated commercial offerings, particularly from Big Pharma customers. Our active project pipeline remained robust, with over 110 ongoing programmes, including more than 90 in human health and over 20 across animal health and crop sciences. Notably, over 15 commercial programmes spanned APIs and intermediates. We also increased our reactor capacity for small molecule APIs by 15%, positioning ourselves well to meet growing customer requirements. To support future growth, we are expanding our multi-site capabilities across various modalities, further strengthening our CDMO leadership.

Generics (FDF & API)

Our performance in the generics segment during FY25 was muted growing 2% and recorded revenues of Rs 4,020 crores. Soft growth was mainly on account of lower API division performance which declined by 4% due to capacity reallocation. In the Finished

Dosage Formulations (FDF) division, we delivered 12% growth, driven by the execution of multiple integrated CMO contracts and improved utilisation across our manufacturing network. We expect this positive momentum to continue as we operationalise additional contracts in the coming quarters. Notably, our ARV revenue share has declined from 67% to 45% over the past five years, reflecting our success in reducing dependence on legacy products and building a more balanced generics portfolio. As we move into FY26, we will focus on rebalancing R&D and manufacturing resources to further strengthen our generics pipeline and ensure the timely delivery of customer commitments.

Biotechnology

Our bio-division delivered revenues of Rs 160 crores.

The underlying revenue growth was healthy, excluding impact of advanced shipments last year and discontinued low margin non-core nutrition business.

We have increased customer pipeline activity within AOF and diversified CDMO customer base. Looking ahead, we are preparing to break ground on a new commercial- scale fermentation facility at Vizag by June 2025, with a planned investment of Rs 250 crores. This expansion will more than double our fermentation capacity by 2026, enabling us to better serve the large molecule CDMO market with our enzyme engineering capabilities.

FY25 consolidated financials

(Rs in crores)
Particulars	FY25	FY24	Y-o-Y Change (%)/bps
Revenue	5,554	5,041	10%
Gross Margin	55.4%	51.7%	370 bps
EBITDA	1,115	798	40 %
% to Revenue	20.1	15.8%	430 bps
PBT	484	236	105 %
Net Profit	358	161	122 %
% to Revenue	6.4%	3.2%	320 bps
EPS (Rs )	6.6	2.9	128 %

Revenue from operations (Net)

In FY25, Laurus Labs revenue from operations stood at Rs 5,554 crores, reflecting a 10% change compared to Rs 5,041 crores in FY24. Primarily driven by strong CDMO execution while generic FDF growth offset by lower API business.

Material costs

Material costs as a percentage of revenue were 44.6% ir FY25, compared to, 48.3% in FY24, reflecting a change of 370 basis points on better divisional mix

Employee expenses

Employee expenses increased to Rs 720 crores in FY25 from Rs 640 crores in FY24, largely driven by a further rise in headcount beyond the 300+ added in FY25 and continued investments in talent across R&D and manufacturing functions.

Other expenses

Other expenses, including marketing, R&D and administration, reached Rs 1,301 crores in FY25, up from Rs 1,191 crores in FY24. As a percentage of revenue, these expenses stood at 23% versus 24% in FY24. Key drivers included continued spending on new initiatives like Cell and Gene Therapy (CGT), Animal Health, and the ramp-up of advanced manufacturing capabilities.

FY25 balance sheet

Particulars	FY25	FY24	Change (Rs )
Net Fixed Assets (incl. CWIP)	4,316	4,048	+268
Goodwill and Intangibles	266	265	+1
Inventories (A)	1,937	1,845
Receivables (B)	2,007	1,663
Payables (C)	959	1,051
Net Working Capital (A+B-C)	2,985	2,457	+528
Other Assets & Liabilities	-501	-291	-210
Cash & Cash Equivalents	100	139	-39
Equity	4,473	4,111	+362
Debt (current + non-current)	2.693	2,507	+186
Total Net Assets	7,166	6,618	+548

Highlights

Net Fixed Assets: Increased by Rs 268 crores to Rs 4,316 crores in FY25, driven by ongoing investments in new R&D centre for CDMO activities in Hyderabad site, Building Intermediate/API manufacturing blocks at LSPL Unit 2 & Unit 4, Drug Product line expansion and certain API block modification at Vizag site.

Goodwill and Intangibles: Goodwill and intangibles saw a marginal increase of Rs 1 crores, bringing the total to Rs 266 crores.

Net Working Capital: Stood at Rs 2,985 crores,

Increase mainly due to a increase in inventories and accounts receivables.

Cash & Cash Equivalents: Cash & Cash Equivalents Rs 100 crores, reflecting healthy liquidity position.

Equity: Rose to Rs 4,173 crores, reflecting the companys strong financial health and retained earnings.

Debt: Increased to Rs 2,693 crores, mainly in the working capital loans to support several CDMO project deliveries involving longer lead time. Long-term debt remained stable.

FY25 Key ratios (Consolidated)

Ratio	FY25	FY24
Debtors Turnover	2.8	3.0
Inventory Turnover	2.9	2.7
Interest Coverage Ratio	5.3	4.6
Current Ratio	1.22	1.23
Debt-Equity Ratio	0.60	0.61
EBITDA Margin (%)	20.1%	15.8%
Net Profit Margin (%)	6.4%	3.2%
Return on Net Worth (%)	8.0%	3.9%
Net Debt-EBITDA	2.3x	2.9x

Outlook for FY26

Looking ahead, the Company is well-positioned to become a more diversified CDMO-CMO company, supported by:

• A promising late-stage pipeline

• Enabling technology platforms

• Strengthened collaborations with major global clients

• Improved operating margins from better asset utilisation and product mix

We remain committed to delivering high-quality, integrated solutions to global customers while creating long-term stakeholder value.

People - Our strength

With a strong and diverse global workforce, Laurus Group directly employs over 7,000+ people and engages another 6,000+ individuals indirectly across our business operations. We recognise that our people are the driving force behind our success and are deeply committed to nurturing their growth and well-being.

Throughout the year, we continued to invest in strengthening the capabilities of our employees by providing targeted training and development opportunities. From on-the-job learning and professional upskilling to specialised programmes focused on adapting to technological advancements, we ensure our teams are equipped with the skills needed to navigate an evolving industry landscape.

Our commitment extends beyond professional development. We actively promote employee welfare and work-life balance through various initiatives, including annual family day celebrations, childrens development programmes, and comprehensive safety training.

We also prioritise open communication and engagement, regularly connecting with our workforce through town hall meetings, employee surveys, and face-to-face interactions to understand their needs and feedback.

Our efforts to foster a supportive and inclusive workplace continue to earn recognition. Laurus has been certified as a Great Place to Work by the GPW Institute for the fourth consecutive year, underscoring the positive culture we have built together. In addition, we have received multiple safety awards from governmental and non-governmental bodies, reaffirming our focus on employee safety and well-being. Industrial relations remained harmonious throughout the year, and

Laurus Group remains steadfast in its commitment to care for all Laureates as we collectively drive the organisation forward.

Risk management

At Laurus Labs, risk management is an integral part of our strategic and operational decision-making process. We proactively identify, assess, and mitigate potential risks across our business segments to ensure long-term resilience and value creation.

Our structured risk governance framework enables timely responses to emerging challenges in a dynamic business environment. For a detailed overview of our risk management approach and key risks, please refer to page 89 of the Integrated Annual Report.

Internal control

Laurus Labs has established a robust internal control framework designed to ensure the integrity of financial reporting, safeguard assets and enhance operational efficiency. This framework includes a comprehensive set of policies and procedures that guide all aspects of the Companys operations.

The internal control system at Laurus Labs is aligned with globally recognised standards and practices, ensuring compliance with regulatory requirements and internal policies. It includes rigorous processes for financial reporting, risk management and compliance monitoring. Regular internal audits are conducted to assess the effectiveness of controls and identify areas for improvement. These audits are complemented by third-party reviews to ensure objectivity and enhance the credibility of the findings.

A key component of the internal control framework is the segregation of duties, which minimises the risk of errors and fraud. Additionally, automated systems and controls are implemented to streamline operations and reduce manual intervention, thereby increasing accuracy and efficiency. The framework also emphasises continuous training and awareness programmes for employees to ensure that they are well-versed in compliance and control practices. Laurus Labs internal control framework is overseen by the Audit Committee, which reviews and monitors the effectiveness of the controls on a regular basis. The committee ensures that any identified issues are promptly addressed and that corrective actions are implemented.

Cautionary Statement

This Report contains forward-looking statements, which may be identified by the use of words like plans, expects, will, intends, projects, estimates, or other words of similar meaning. All statements that address expectations, assumptions, or projections about the future, including statements about Laurus Labs Limiteds strategy for growth, market position, expenditures and financial results, are also forward-looking statements. Laurus Labs Limited cannot guarantee that these assumptions and expectations are accurate or will be realised.