Macro International Ltd Management Discussions

The Management Discussion and Analysis Report have been prepared in compliance with the requirements of Listing Agreements and contain expectations and projections about the strategy for growth. Certain statements in the Management Discussion and Analysis Report are forward looking statements which involve a number of risks and uncertainties that could differ from actual results performance or achievements which such forward looking statements on the basis of any subsequent developments, information or events for which the Company do not bear any responsibility.

INDUSTRY OVERVIEW

Indias bulk drug (API) and intermediates ecosystem anchors a pharma export engine that reached USD 30.47 billion in FY 2024-25, with bulk drugs & intermediates contributing USD 4.87 billion (?16%); producer by volume and supplies roughly 20% of global generics, with the domestic industry projected to top USD 130 billion by 2034 (?10% + CAGR). Policy tailwinds include the PLI scheme for KSMs/Drug Intermediates/APIs, which has cleared 48 projects (34 already commissioned) to reduce import dependence and scale local manufacturing. Within this landscape, Hyderabad/Telangana stands out as Indias bulk-drug powerhouse ? often called the "Bulk Drug Capital" ? accounting for about 40% of national bulk drug output and roughly 50% of bulk drug exports, supported by the ~2,000-acre Genome Valley life-sciences cluster and the planned ~19,000-acre Hyderabad Pharma City, billed as the worlds largest integrated pharma park. This cluster depth?R&D institutes, USFDA-registered sites, and export infrastructure ? underpins Hyderabads leading share in APIs and intermediates and positions the city to capture the next wave of value (high- science APIs, biologics inputs) as India moves from volume to value in global pharma supply chains.

The pharma sector has been contributing significantly to Indias economic growth as one of the top 10 sectors in reducing trade deficit and attracting the Foreign Direct Investment (FDI). The industry employs over 2.7 million people either directly or indirectly, and ranks third in terms of volume and 14th in terms of value globally.

Your company has its Corporate and Operational sales office presence in Hyderabad, TS, India. Hyderabad has a dominant position in Pharma Sector; it ranks first in manufacturing of bulk drugs and third in formulations in the country.

• Telangana and Andhra Pradesh has over 2500 Pharma companies and is home to few of the top pharma companies. There are more than 200 Active Pharmaceutical Ingredients (API) units in the state, which are poised to grow at a rate of 10 to 15 per cent annually in the coming days.

• Hyderabad is also referred to as the Vaccine Hub of India. The city is home to leading vaccine producers and the Clinical Trial sector in Hyderabad has also witnessed a steep rise, with leading clinical trial companies having their presence.

OPPORTUNITIES AND EXISTING THREATS AND RISKS FACED BY THE INDUSTRY.

Opportunities

1. Global Demand for Generics & APIs

a. India supplies ~20% of the worlds generics and 50% of global vaccine demand.

b. Increasing demand for cost-effective medicines in developed and emerging markets creates export growth potential.

2. Hyderabads Strategic Positioning

a. The city accounts for ~40% of Indias bulk drug production and ~50% of exports.

b. Supported by Genome Valley (2,000-acre R&D hub) and the upcoming Hyderabad Pharma City (19,000-acre integrated pharma park).

3. Government Incentives

a. Production Linked Incentive (PLI) Scheme for APIs, Key Starting Materials (KSMs), and intermediates is encouraging domestic manufacturing.

b. Policy push to reduce import dependence (currently ~70% of APIs imported from China).

4. Growing Healthcare Expenditure

a. Indias healthcare market is projected to reach USD 800 billion by 2030.

b. Rising chronic disease prevalence (diabetes, cardiovascular, oncology) driving pharmaceutical demand.

5. Emerging Biologics & Specialty Drugs

a. Increasing investments in biosimilars, complex generics, and niche therapeutic areas.

b. Hyderabads R&D ecosystem is well-placed for biologics manufacturing.

EXISTING THREATS AND RISKS FACED BY THE INDUSTRY.

1. Regulatory Stringency in Global Markets

a. Compliance with USFDA, EMA, and WHO- GMP standards is mandatory; any lapses can lead to import bans, product recalls, or reputational damage.

2. Over dependence on API Imports

a. Despite being a bulk drug hub, India imports a large portion of raw materials from China, exposing the sector to geopolitical and supply chain risks.

3. Price Erosion & Margin Pressure

a. Intense competition in generics leads to price erosion, particularly in regulated markets like the US.

4. Environmental Compliance Costs

a. Bulk drug manufacturing generates effluents that require strict treatment; environmental violations can result in penalties or shutdowns.

b. Hyderabad, being a major bulk drug producer, faces heightened environmental scrutiny.

5. Global Market Volatility

a. Currency fluctuations, trade policy changes, and global recessionary trends can impact export revenues.

6. Talent Retention Challenges

a. Increasing competition for skilled chemists, formulation scientists, and regulatory affairs experts within Hyderabads pharma ecosystem.

OUTLOOK

The outlook of the Company remains positive. Astal Laboratories Limited is cautiously optimistic about its prospects in the coming years. The Company aims at providing quality products to the customers and to provide them with greater satisfaction. For last couple of years, the company has taken a number of initiatives to re- structure and re- engineer the operation to enable the company to compete better in this profound competitive regime.

BUSINESS OPERATIONS:

Your companys objects were altered in the year 2023 to venture into pharmaceutical bulk drug business. To suit the business the companys name was also changed to ASTAL LABORATORIES LIMITED Thus, your company has successfully ventured into bulk drug business and in the first 3 quarters of operations itself has established its presence in the Intermediates field. The Company continues its business operations in single segment i.e. Pharmaceuticals and there is no change in the nature of business during the year under review.

Revenue and net profits:

(i) Revenue:

(ii) The Company has recorded revenue of Rs. 6423.10/- Lacs, for the financial year ended 31^st March 2025 which is 171.64% growth in revenue when compared to the previous years revenue of Rs. 2364.77 Lakhs. The entire sales were domestic Rupee sales.

(iii) Net profits:

Profit after Tax (PAT) recorded increase of 1039.20% from Rs. 78.47 Lacs to 892.53 during the previous FY.

(iv) Earnings:

Earnings per share for the F.Y 2024 - 2025 stood at Rs. 9.08 as against Rs. 1.55 recorded during the previous financial year.

Operational Highlights

(i) During the year the company has manufactured and sold Intermediates through own plant at Raichur Industrial estate, Raichure, Karnataka and also by third party manufacturing.

(ii) The company has enquiries for production of APIs and would produce this product in the next quarter onwards

(iii) There is immense growth opportunity in the Intermediates and API business as most of the APIs are imported from China. Your company has acquired a Pharmaceutical Intermediates plant at Raichur, KIADB industrial area, Yadgir district, Karnataka. The unit is a running plant with all clearances. This Intermediates manufacturing unit will cater to the domestic and internal markets.

HUMAN RESOURCE STRATEGY

Strategic human resource (HR) management is the foundation of a strong business. At Astal Laboratories Limited, a young dynamic team of promising and talented employees, work relentlessly to pursue MILs business plans. With high focus on the values of Innovation, Initiative, Passion and Humility, the HR of the Company is aligned towards hiring, developing and retaining highly proficient talent and works to provide an inclusive environment that is welcoming to all diversities. The HR department continuously benchmarks best practices across the industry -in the areas of Talent Management, Learning & Development, Performance Management System and Employee Care.

Internal Controls

An external agency is auditing the Companys internal controls. This results in an unbiased and independent examination of the adequacy and effectiveness of the internal control systems in achieving the Companys goal of optimal operation. The activities are safeguarding and protecting the Companys assets from unauthorized use or disposition, keeping proper accounting records, and verifying the authenticity of all transactions.

The independent Audit Committee and the Board of Directors regularly review the Companys performance to ensure that it is by overall corporate policy and in line with predetermined objectives.

Risk and Concerns

Astal laboratories Limited faces risks and uncertainties typical to that faced by global pharmaceuticals industry, which could have a material impact on earnings and the ability to operate in the future. These are determined via robust assessment considering our risk context by the Board of Directors with inputs from the executive management. The Board is satisfied that these risks are being managed appropriately and consistently.

Cautionary Statement

The Management Discussion and Analysis statements describing Astal Laboratories Limiteds objectives, projections, estimates, and expectations may be "forward-looking statements" within applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand-supply and price conditions in the domestic and overseas markets. It operates changes in the government regulations, tax laws, and other statutes & other incidental factors.