Neuland Laboratories Ltd Management Discussions

ECONOMY OVERVIEW Global Economy

The global economy maintained steady growth of 3.4% in both 2024 and 2025. This growth was driven by strong investments in artificial intelligence, particularly in North America and Asia. Global economic growth reflects the combined effect of contrasting forces. While evolving trade policies have created headwinds, strong investment momentum in technology – particularly artificial intelligence has provided significant support, especially in North America and Asia. At the same time, geopolitical tensions and ongoing conflicts, including the Russia Ukraine war and Israel Iran conflicts, added further uncertainty to the global environment. The escalation of tensions involving

Iran has also heightened risks of oil price volatility and global logistics disruptions, particularly from potential disruptions to key shipping routes such as the Strait of Hormuz. This has increased input-cost pressures, freight volatility, and supply chain uncertainty for energy-importing economies, thereby adding to inflationary risks and dampening global trade momentum. Global economic growth was further supported by accommodative fiscal and monetary policies and the private sectors strong adaptability, which helped offset challenges from U.S. tariffs that remained in place despite key trade agreements. Global headline inflation declined to an estimated 4.1% in 2025, down from 5.9% in 2024, and is expected to further moderate to 3.8% in 2026 and 3.4% in 2027. According to the January 2026 International Monetary Fund (IMF) report, the global economy is projected to grow by 3.1% in 2026 and 3.2% in 2027.

Source: World Economic Outlook, April 2026

Indian Economy

Indias FY 2025-26 Gross Domestic Product growth is estimated at 7.4%, according to the economic survey report dated January 20, 2026, driven by strong consumption and investment. Externally, total exports (merchandise and services) hit a record US$ 860.1 billion in FY 2025-

26, with further upside from Indias recently concluded Free Trade Agreement with the European Union, following three years of negotiations, which is expected to enhance market access amid global trade uncertainties. India and the

United States have also reached an interim bilateral trade framework designed to enhance economic cooperation and pave the way for a comprehensive trade agreement during FY 2025-26. However, FY 2025-26 proved to be an exceptionally challenging year for Indias economy on the external front. The external environment remained highly uncertain, particularly following policy announcements impacting the pharmaceutical sector in early April 2026 such as increased scrutiny of drug pricing, tighter regulatory expectations and discussions around supply chain security and import dependence. Heightened uncertainty in global trade, coupled with the imposition of high and punitive tariffs by key partners, placed significant stress on manufacturers particularly exporters. In response, the government leveraged this crisis as a catalyst for reform, accelerating critical measures such as the rationalisation of GST rates and further simplification of compliance requirements across various industries.

In FY 2025-26, the Reserve Bank of India (RBI) shifted its monetary stance toward easing and reduced the repo rate by a cumulative 100 basis points. The rate was reduced from its earlier peak of 6.50% to 5.50% by October 2025, and further cut to 5.25% in December 2025 to support growth amid moderating inflation. As of February 6, 2026, the RBIs

Monetary Policy Committee kept the repo rate unchanged at 5.25% and maintained a neutral policy stance, focussing on maintaining stability amid global uncertainties. Real GDP growth for FY 2026-27 is projected to range between 6.8% and 7.2%, reflecting steady economic momentum supported by strong domestic demand, continued investment activity and improving macroeconomic stability.

Source:

Ministry of Finance -India, The White House, Washington

INDUSTRY OVERVIEW Global Pharmaceuticals Industry

The Pharmaceutical industry remains integral to modern healthcare systems, as it is essential for the prevention, management and treatment of both acute and chronic conditions, including cardiovascular diseases, infectious diseases, cancer and metabolic disorders. The global pharmaceutical industry has exhibited sustained growth and resilience, driven by continuous advances in medical science, rising healthcare expenditure and broader access to essential medicines. The global pharmaceutical industry was valued at US$ 1,999.2 billion in 2025 and is expected to expand significantly in the coming years. It is projected to grow from US$ 2,150.2 billion in 2026 to US$ 4,035.4 billion by 2034, registering a compound annual growth rate (CAGR) of 8.2% during the forecast period. This anticipated growth reflects strong underlying demand for innovative therapies, alongside substantial investments in research and development to address evolving healthcare needs.

North America is expected to remain the leading region in the global pharmaceutical industry, accounting for 44.8% of the total market share in 2026. The regions dominance can be attributed to its well-established healthcare infrastructure, high per capita healthcare spending, robust intellectual property framework and considerable investment in biotechnology and drug development, all of which support innovation and accelerate the commercialisation of new treatments. By 2035, the pharmaceutical industry is expected to take on a broader and more transformative role in healthcare. Advances in science are likely to enable pharmaceutical companies to treat and, in some cases, cure diseases for which effective treatments are currently unavailable. At the same time, the industry is expected to evolve beyond its traditional role of manufacturing medicines and increasingly position itself as a long-term health partner. This transformation will be driven by scientific innovation, artificial intelligence, integrated healthcare ecosystems, and a patient-centric approach to support health and well-being across all stages of life.

Over the past five years, 394 novel active substances (NAS) have been launched globally, though the number has been lower in certain regions.

Global Specialty Pharmaceuticals Market

Specialty pharmaceuticals primarily entail specialty drugs or medications distinct from traditional or general pharmaceuticals, typically used to treat complex, chronic or rare medical conditions such as cancer, autoimmune disorders. They include biologic drugs, gene therapies, cell therapies or other advanced treatment modalities. The global specialty pharmaceuticals market was valued at

US$ 311.7 billion in 2024 and is expected to expand from US$ 326.5 billion in 2025 to US$ 519.8 billion by 2035, registering a CAGR of 4.8%.

The North American specialty pharmaceuticals market is expected to grow from US$ 170.8 billion in 2024 to US$ 284.0 billion in 2035, reinforcing its position as the largest regional market in this segment. Europes specialty pharmaceuticals market is projected to expand from US$ 70.0 billion in 2024 to US$ 115.0 billion in 2035, maintaining its role as a key contributor to global demand. The Asia-Pacific region is forecast to increase from US$ 40.7 billion in 2024 to US$ 76.0 billion in 2035, reflecting its evolution into a major growth engine, supported by rising healthcare investment and improved patient access to medicines, vaccines and advanced therapies.

The South American pharma industry is expected to grow from US$ 17.1 billion in 2024 to US$ 26.0 billion in 2035, while the Middle East & Africa pharma industry is projected to rise from US$ 13.1 billion in 2024 to US$ 19.0 billion in 2035, indicating steady but smaller-scale expansion.

Source: Market Research Future; New Molecular Entity (NME) Drug and New Biologic Approvals - FDA

Global Active Pharmaceutical Ingredients (API) market

The API market refers to the global trade and production of the therapeutically active components used in medicines, serving as the foundational building blocks for the pharmaceutical industrys drug manufacturing. The global API industry is witnessing sustained growth, driven by rising pharmaceutical demand, increasing prevalence of chronic diseases and continuous innovation in drug development. At the same time, investments in precision medicine, high-potency APIs and green chemistry are reshaping manufacturing processes and supporting sustainable production. Regulatory emphasis on quality, transparency and current Good Manufacturing Practices (cGMP) continues to influence industry dynamics, prompting manufacturers to modernise facilities and adopt digital quality systems.

Over the past decade, FDA approvals of New Molecular Entities (NMEs) and new biologics under New Drug Application (NDAs)/Biologics License Application (BLAs) have remained consistently robust, reflecting sustained innovation in the U.S. pharmaceutical and biopharmaceutical sector. USFDA approvals remained strong over the last decade, ranging from 25 to 61 annually, with 471 total molecule approvals during the period. Small molecules and peptides consistently dominated approvals, averaging 30 approvals per year compared with 17 for biologics.

Biotech-led small-molecule approvals increased from -9 in 2016 to -24 in 2025, demonstrating sustained innovation momentum and stronger pipeline execution.

The upcoming global patent cliff is expected to create a substantial medium to long-term growth opportunity for generic and biosimilar manufacturers, including Indian players, across both the small-molecule and complex biologics segments. A large number of branded drugs are expected to lose patent exclusivity during the latter half of this decade and into the early 2030s. Following patent expiry, generic and biosimilar manufacturers are likely to introduce more affordable alternatives, increasing market competition and improving patient access. The global pharmaceutical industry is entering a decisive phase, with an estimated US$ 200 - US$ 300 billion worth of blockbuster drugs expected to lose exclusivity between 2026 and 2032. The value at risk is substantial. According to GlobalDatas Pharma Intelligence Centre, the cumulative sales risk from blockbuster drugs losing patent protection between 2026 and 2032 is estimated to exceed US$ 200 billion in the US. A total of 33 blockbuster biologics and 28 blockbuster small-molecule drugs are expected to lose patent protection during this period. The opportunities arising from the expiration of blockbuster biologic drugs are projected to exceed US$ 137 billion, while those from small-molecule blockbuster drugs are expected to surpass US$ 63 billion. Among these, GLP-1 drugs such as semaglutide are witnessing rapid growth, with annual sales expected to increase from more than US$ 69 billion as of January 2026 to over US$ 80 billion by 2027.

The growth of the global API market is closely tied to the expanding peptide market, as peptides are small protein-like molecules used in modern medicines to target specific functions in the body. Increasing demand for these highly precise and effective treatments is driving the need for specialised, high-quality pharmaceutical ingredients for their manufacture. Advances in peptide synthesis and purification technologies and the rising adoption and applications of targeted therapies in chronic disease treatment are further strengthening the interdependence between the two markets. The global API market comprises many chemical classes, including traditional small molecules, biologics, high-potency APIs, oligonucleotides and peptides. The global peptide API market was valued at US$ 6.0 billion in 2025 and is projected to grow from US$ 7 billion in 2026 to approximately US$ 14 billion by 2030, registering a CAGR of 18.5% during the forecast period. This growth is driven by a robust, expanding clinical pipeline, with the FDA TIDES review identifying hundreds of peptide-based candidates currently under development worldwide. These include therapeutic, diagnostic, and theranostic applications, including peptide inhibitors, peptide drug conjugates, and other next-generation peptide platforms. Regulatory momentum is also strengthening the outlook. In 2025 alone, the US FDA approved 4 TIDES-based therapeutics (1 peptide, 3 oligonucleotides). This builds on 34 peptide approvals between 2016 and 2024, reflecting sustained innovation and clinical adoption. 40+ peptides are investigated in phase 3, with 6+ in the preregistration stage.

Source: Express Pharma; New Molecular Entity (NME) Drug and New Biologic Approvals - FDA

Pharmaceutical Contract Development and

Manufacturing Organisations (CDMO) market

The global pharmaceutical Contract Development and Manufacturing Organisation (CDMO) industry is experiencing strong growth, driven by increasing outsourcing by pharmaceutical and biotechnology companies and rising demand for cost-efficient, scalable manufacturing solutions. The Pharmaceutical CDMO market size is expected to grow from US$ 258.9 billion in 2025 to US$ 275.27 billion in 2026, and is forecast to reach US$ 374.7 billion by 2031, at a 6.3% CAGR over 2026-2031. Robust outsourcing demand for complex molecules, the rise of high-potency APIs (HPAPIs), and artificial-intelligence-enabled process-development platforms underpin this trajectory. Peptide-based GLP-1 therapies, expanding vaccine programs, and sustained investment in digitally connected plants further amplify the need for specialist partners capable of absorbing capital and regulatory risks. North American innovators continue to anchor high-value biologics and innovation in advanced therapeutics work, while Asia-Pacific cost advantages accelerate capacity expansion.

API manufacturing remains the largest segment, accounting for nearly 55% of the market in 2025. Small molecules account for around 62% of the market. Strong oral dosage forms held nearly 40% market share, while sterile injectables are emerging as the fastest-growing segment with growth exceeding 9% CAGR due to rising demand for injectable therapies. Oncology accounted for more than 32% of total

CDMO revenues, and high-potency APIs (HPAPIs) are expected to grow at more than 8% CAGR, supported by increasing demand for oncology drugs.

North America dominated the global CDMO industry with nearly 37% market share in 2025, supported by strong biologics capabilities, advanced R&D infrastructure and high pharmaceutical spending. At the same time, the Asia-Pacific region is expected to be the fastest-growing, with a CAGR of more than 7%, driven by cost advantages, expanding manufacturing infrastructure, and supportive government initiatives. The industry is also witnessing rapid adoption of advanced technologies such as AI-enabled process development, continuous manufacturing, automation and digital quality systems.

The expansion of the global CDMO market is largely driven by the increasing outsourcing of drug development and manufacturing activities by pharmaceutical and biotechnology companies seeking to reduce operational costs, access specialised expertise and accelerate product commercialisation. Europe accounted for the second-largest share, benefiting from regulatory alignment with international standards and growing participation in biotech forums that enhance service visibility. Meanwhile, the Asia-Pacific region is expected to witness significant growth driven by rising investment in biopharmaceutical research, expanding manufacturing capacity, and favourable government support in countries such as China, India, and Japan.

Indian Pharmaceuticals Industry

The Indian pharmaceutical industry is one of the fastest-growing segments in the global healthcare industry and remains a critical player in the international pharmaceutical supply chain. The Indian pharmaceutical industry is the 3rd-largest globally by volume and 11th-largest by value, supported by a highly fragmented yet large ecosystem comprising over 3,000 companies and 10,500 manufacturing units. India is also the largest global supplier of generic medicines, contributing around 20% of global generic supply and manufactures approximately 60,000 generic brands across 60 therapeutic categories. The domestic pharma industry is valued at approximately US$ 60 billion and is projected to grow to US$ 130 billion by 2030, supported by rising healthcare demand and continued expansion of access to medicines.

India also maintains a strong export presence, ranking 11th globally in pharmaceutical exports, with products reaching 191 countries in FY 2024-25. The total pharma exports have grown substantially to US$ 30.5 billion in FY 2024-25, up nearly 16-fold from US$ 1.9 billion in 2000-01, reflecting its evolution into a key global supplier of affordable generics. The pharma industry continues to attract capital, with FDI inflows of 13,193 crore in FY 2025 26 (up to September 2025). Indias longstanding reputation as the "Pharmacy of the World" is supported by its well-established generic drug manufacturing capabilities, cost-efficient production infrastructure, highly skilled scientific and technical workforce and progressively strengthening regulatory compliance framework aligned with global standards. India has the highest number of United States Food and Drug Administration (USFDA)-approved manufacturing plants outside the United States, reflecting strong global confidence in the quality and compliance of its pharmaceutical sector. The country also has around 500 active pharmaceutical ingredient (API) manufacturers, contributing nearly 8% of global API production.

The growth trajectory of the Indian pharmaceutical industry depends on several structural and demographic factors. Increasing healthcare awareness among the population, rising penetration of health insurance coverage and the growing burden of chronic and lifestyle-related diseases are collectively driving sustained demand for pharmaceutical products. In addition, consistent government support to strengthen domestic pharmaceutical manufacturing has further accelerated sectoral growth. Strategic initiatives such as the Production-Linked Incentive (PLI) scheme, along with investments in bulk drug parks and API manufacturing infrastructure, are enhancing domestic capabilities in active pharmaceutical ingredient and formulation production, thereby improving supply chain resilience and reducing import dependence. Moreover, the Indian pharmaceutical companies are significantly increasing their investments in biosimilars, monoclonal antibodies and specialty therapies as part of a strategic effort to move up the pharmaceutical value chain.

The Indian pharmaceutical industrys strong global presence in generics and specialty formulations is closely supported by the Indian API market, which serves as the backbone of drug manufacturing and ensures supply chain reliability, cost competitiveness and regulatory compliance across domestic and export markets. The Indian API market forms a critical backbone of the countrys pharmaceutical industry, supporting both domestic formulation manufacturing and global drug supply chains. The India API market is projected to grow from US$ 14.2 billion in 2025 to US$ 15.3 billion in 2026 and is expected to reach US$ 22.2 billion by 2031, registering a CAGR of 7.7% during 2026 2031. The growth of the API market is projected to be supported by favourable government policies, rising export demand and sustained capacity expansion initiatives.

The PLI scheme has been encouraging investment in new manufacturing facilities and bulk drug parks, helping to reduce logistics costs and improve manufacturers access to infrastructure. At the same time, buyers in the United States and Europe are diversifying their sourcing away from China, leading to increased inquiries from Indian contract manufacturers. Indian companies are also upgrading their capabilities in fermentation, high-containment manufacturing and continuous processing to serve high-value segments such as oncology and biotechnology.

The adoption of AI-based process controls is improving efficiency by reducing production cycle times and energy usage. However, the pharma industry faces challenges, including fluctuations in key starting-material prices from

China and compliance gaps among smaller manufacturers.

These factors are encouraging greater backward integration and stronger quality systems, which are expected to enhance the industrys long-term competitiveness.

The API market serves as the foundation of the CDMO market, as robust API development and manufacturing capabilities enable CDMOs to offer integrated, end-to-end solutions from drug substance development to finished-dosage manufacturing. The Indian CDMO market was valued at US$ 25.8 billion in 2025 and is projected to grow from US$ 29.5 billion in 2026 to US$ 57.9 billion by 2031, registering a CAGR of 14.4% during the forecast period (2026 2031). This strong growth is driven by Indias cost-effective manufacturing capabilities, availability of a skilled technical workforce and supportive government initiatives such as the PLI scheme, which is encouraging capacity expansion across the sector.

GOVERNMENT INITIATIVES

US Policy Environment

Recent policy discussions and regulatory actions in the United States highlight a strong focus on pharmaceutical supply chain resilience, API sourcing diversification and reduced overdependence on single geographies, which indirectly support the strategic positioning of Indian API manufacturers. As of January 2026, India accounts for about 48% share of U.S.-referenced API Drug Master Files and generic drug supplies, reinforcing its role as a trusted manufacturing partner. Additionally, regulatory initiatives by the U.S. Food and Drug Administration to strengthen manufacturing oversight and improve review efficiency, along with bilateral trade engagement reported by Mint, demonstrate how evolving U.S. policy frameworks are shaping sourcing strategies and creating opportunities for compliant, globally integrated Indian API firms to expand their footprint in the U.S. market. This shift is further supported by the ongoing "China+1" strategy, under which global buyers are actively diversifying procurement away from China toward alternative hubs such as India. In parallel, such supply chain reconfiguration also serves as a practical hedge against potential U.S. tariff escalation and broader trade policy uncertainty by distributing sourcing across multiple geographies rather than concentrating risk in a single market.

European Policy Environment

The 2024 2029 policy framework of the European Union (EU) reflects a decisive shift toward pharmaceutical security, supply-chain resilience and innovation-led competitiveness – developments highly relevant to Indian API manufacturing and exporting companies. The proposed Critical Medicines Act and the establishment of the Critical Medicines Alliance signal a structured approach to reducing shortages, diversifying API sources and strengthening strategic partnerships with reliable, EU-GMP-compliant suppliers. In parallel, the ongoing reform of EU pharmaceutical legislation under the European Commission and regulatory oversight by the European Medicines Agency are modernising approval pathways, enhancing monitoring of supply risks and tightening quality and transparency standards. Complementary initiatives such as the Health Technology Assessment

Regulation, the European Health Data Space and broader life sciences competitiveness measures further reinforce a harmonised, data-driven and innovation-oriented ecosystem. The evolving policy landscape prioritises strong regulation, sustainable manufacturing and diversified sourcing, positioning compliant and technologically advanced Indian API exporters as key partners in supporting Europes pharmaceutical supply security and long-term resilience. Within this framework, India is well placed to benefit from deeper trade and regulatory engagement, with the evolving

FTA discussions offering meaningful scope to enhance market access, streamline compliance pathways and improve tariff predictability for pharmaceutical products, including APIs.

Indian Policy Environment

The Union Budget for FY 2026-27 marks a significant push for Indias health and pharmaceutical sectors. The budget also emphasises healthcare infrastructure, human resource development, digital health and industry incentives, covering measures such as expanded hospital capacity, upgradation of educational institutions, establishment of accredited clinical trial sites and customs duty exemptions for life-saving drugs, all aimed at advancing Indias pharmaceutical research & development (R&D) and global competitiveness. The budget also proposed the following:

COMPANY OVERVIEW

Neuland Laboratories Limited (hereafter referred to as ‘Neuland or ‘the Company) is a leading global API CDMO, with a legacy of more than 4 decades and a strong reputation for maintaining high-quality products and business standards. The Company is headquartered in Hyderabad, India and operates as a pure-play API manufacturing service provider.

Neuland offers a wide range of customised chemistry solutions designed to meet the evolving requirements of the global pharmaceutical industry. Over the past 18 years, the Company has evolved significantly through its work on new chemical entities (NCEs) with numerous venture-backed biotech firms as well as recent engagements with

Big Pharma.

The Company has established itself as a trusted API-preferred partner with significant expertise in complex chemistry. Neuland provides a comprehensive suite of services, including custom synthesis and the supply of advanced intermediates and APIs across multiple stages of clinical development. It also offers Chemistry, Manufacturing, and Controls (CMC) support for New Drug Application (NDA) filings and manufacturing support throughout the commercial product lifecycle, from product launch and lifecycle management to eventual genericisation.

Neuland is supported by highly proficient technical and scientific teams that have helped build strong brand equity in its current GMP API manufacturing and enabled faster drug development. The Companys key strength lies in its consistent delivery of high-quality

APIs manufactured at its three cGMP United States Food and Drug Administration (US FDA)-approved facilities, supported by robust process chemistry and a stringent regulatory compliance framework.

BUSINESS SEGMENTS

• Generic Drug Substances (GDS): Neuland has focussed since its inception on developing and manufacturing non-exclusive APIs, supported by agile, scalable facilities and a portfolio of more than 65 molecules, having developed processes for over 150 generic molecules over the last 4 decades. The Company addresses both large-volume, mature molecules and low-volume, high-complexity molecules with limited competition, organised into Prime APIs and Specialty APIs within the GDS portfolio. The

Company operates a dedicated Process Investigation

Department that continually optimises processes to lower customers total cost. Neuland runs GDS operations that comply with leading global regulatory standards and uphold a strong EHS culture, assuring safety and compliance. The Company relies on robust process controls to deliver consistent product quality, reliable supply and predictable delivery timelines.

The Company maintains a manufacturing footprint that supports seamless scale-up from gram-level development to large commercial volumes and is underpinned by structured project management and governance across multiple geographies. Neuland brings 42 years of API experience, a portfolio of more than 100 APIs across 10 therapeutic areas, over 300 processes developed, more than 1,007 global filings and more than 286 patent filed, serving customers in over 80 countries.

Prime APIs: The Prime API segment includes a portfolio of 12 APIs that drive business growth. Key molecules include Mirtazapine (an antidepressant) and Ezetimibe, along with other important compounds such as Escitalopram, Enalapril, Sotalol and Labetalol.

• Specialty APIs: The Specialty APIs segment is a high-margin, profit-driving business with a portfolio of over 50 value-added APIs focussed on select customers. The Company works with complex compounds, often protected by patents, which are used in validation batches and regulatory filings. Key molecules in this segment include Apixaban, Paliperidone Palmitate Sterile, Aripiprazole Sterile, Dorzolamide, Brinzolamide, Deferasirox, Donepezil and Salmeterol. Two new Drug Master Files (DMFs) were filed during FY 2025-26 for Vonoprazan and Edoxaban, further strengthening the Companys portfolio.

Custom Manufacturing Solutions (CMS): The Companys CMS capabilities include the entire drug development lifecycle, from pre-Investigational New Drug (pre-IND) stages and the supply of materials for clinical trials, to large-scale commercial manufacturing.

The Company demonstrates particular expertise in collaborating with biotechnology clients, supporting the scale-up of their molecules from preclinical research to Phase III clinical trials while enabling rapid scale-up and minimising technology-transfer lead times. The CMS business segment of Neuland Laboratories Limited is backed by 18 years of CDMO experience, supports 98 active projects, has contributed to 4 approved NDAs as part of the initial filing, and has enabled 27 IND filings, reflecting its strong development, regulatory and manufacturing capabilities.

OPERATIONAL HIGHLIGHTS

In FY 2025-26, Ezetimibe and Mirtazapine remain major contributors to the core GDS portfolio, playing a pivotal role in its overall performance and growth. On the specialty side, Apixaban and Donepezil made notable contributions to the portfolio, while Paliperidone faced some shipment delays due to operational challenges at the customer end. However, the company continued to see good interest in its portfolio of filed products as well as those under development

In FY 2025-26, the Company achieved a significant milestone with the Boards approval to relocate its R&D facility to a new campus, enabling the development of a larger, state-of-the-art research and development centre in Hyderabads Genome Valley

The new large-scale peptide facility is on track for commissioning in the near term, with clear visibility into programs expected to support initial utilisation post-validation

Neuland serves customers in more than 80 countries and derives around 90% of its total revenue from exports. The United States and Europe are its key markets, together contributing over 94% of total export revenue

Neuland has established a strong global regulatory footprint with over 1,007 filings as of March 2026, supported by a diversified presence across key regulated and semi-regulated markets. This includes 75 active US DMFs, 33 filings with Health Canada, 10 Japanese DMFs, 17 China DMFs, 26 filings with KFDA (Korea), and 28 filings with TGA (Australia). In addition, the Company has filed approximately 289 dossiers across ROW markets such as Turkey, Mexico, and Brazil, and around 499 EUDMF filings across key European geographies, including Germany, France, Poland, and Italy. The portfolio is further strengthened by 30 CEPs received for various products, reflecting its strong compliance and quality track record across jurisdictions. In FY 2025-26, the Company also filed 2 additional DMFs and commercialised one new molecule, further strengthening its regulatory and product pipeline

Neuland has a total manufacturing capacity of 1,226 kilolitres (KL) and continues to expand its capacities to support backward integration and new business opportunities. The Company maintains a strong focus on enhancing capabilities in deuterated molecules, peptides, enzymatic reactions and cryogenic processes. Neuland is also committed to sustainability, with targets to reduce absolute Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 58.8% by FY 2033-34. The Company aims to achieve net-zero emissions across its value chain by FY 2049-50, attain water neutrality by FY 2049-50 and ensure zero waste to landfill

FINANCIAL OVERVIEW

Financial Performance

Metric	FY2017	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025	FY2026
Total Income	588.9	533.7	670.3	766.6	953.0	953.0	1200.9	1571.1	1497.3	2053.1
( in crore)
EBITDA ( in crore)	106.9	54.6	61.4	105.3	162.5	144.3	281.1	474.5	342.8	603.4
EBITDA Margin	18.1%	10.2%	9.2%	13.7%	17.1%	15.1%	23.4%	30.2%	22.9%	29.4%
PAT ( in crore)	46.4	11.8	16.1	15.9	80.3	63.5	163.1	299.6	259.4	363.1
PAT Margin	7.9%	2.2%	2.4%	2.1%	8.4%	6.7%	13.6%	19.1%	17.3%	17.7%
EPS ( per share)	41.6	10.6	12.8	12.4	62.6	49.5	127.1	233.5	202.2	283.0

Statement of Profit and Loss

Revenue for the Company stood at 2,053.1 crore in FY 2025-26, up from 1,497.3 crore in FY 2024-25, reflecting a year-on-year increase of 37.1%. Revenues recorded a strong expansion, primarily driven by the scale-up of key molecules within the CMS business, reflecting improved commercial traction and execution across the portfolio. This higher revenue base also strengthened overall financial performance through operating leverage, supporting margin expansion and improved return ratios. EBITDA of the Company stood at 603.4 crore in FY 2025-26, compared to 342.8 crore in FY 2024-25, reflecting a year-on-year change of 76.0%. The movement was driven by changes in the business mix and operating-leverage benefits.

Profit after tax stood at 363.1 crore in FY 2025-26, compared to 259.4 crore in FY 2024-25, reflecting a year-on-year change of 40.0%.

R&D Investment

R&D spend stood at 79.2 crore in FY 2025-26, compared to 61.2 crore in FY 2024-25, reflecting continued investment in capability building and equipment augmentation.

Key Change in Significant Financial Ratios Interest Coverage Ratio

The interest coverage ratio stood at 35.1x in FY 2025-26, compared to 59.2x in FY 2024-25, largely influenced by movement in EBITDA and finance costs.

EBITDA Margin (%)

EBITDA margin stood at 29.4% in FY 2025-26, compared to 22.9% in FY 2024-25, reflecting a 650 bps expansion driven by improved operating leverage and business mix.

Net Profit Margin (%)

Net profit margin stood at 17.9% in FY 2025-26, up from 17.6% in FY 2024-25, reflecting a 30 bps increase driven by improved profitability.

Net Debt to Tangible Net Worth Ratio

Net debt-to-tangible net worth ratio stood at -0.10 in FY 2025-26, compared to -0.18 in FY 2024-25, reflecting a 0.08 change in balance sheet leverage during the year.

Current Ratio

The current ratio stood at 2.1 in FY 2025-26, down from 2.4 in FY 2024-25, indicating a 14% decline in liquidity position.

Cash Conversion Cycle

Cash conversion cycle stood at 137 days in FY 2025-26, compared to 107 days in FY 2024-25, primarily driven by higher inventory levels and increased receivables.

Return on Capital Employed (ROCE) & Return on Invested Capital (ROIC)

ROCE stood at 26.1% in FY 2025-26, compared to 17.9% in FY 2024-25, reflecting improved capital efficiency. ROIC stood at 21.1% in FY 2025-26, compared to 14.6% in FY 2024-25.

Fixed Assets Turnover

Fixed assets turnover stood at 2.5 in FY 2025-26, compared to 2.3 in FY 2024-25, supported by a higher revenue base and improved asset productivity.

Operating Profit Margin

Operating Profit Margin stood at 24.9% in FY 2025-26, up from 18.5% in FY 2024-25, reflecting a 640 bps increase driven by improved profitability.

BUSINESS OUTLOOK

Neuland is steadily evolving into a more innovation-led and globally integrated CDMO platform, with its dual strategy of strengthening high-margin specialty products while scaling the Prime API business, which is expected to drive sustainable and balanced growth over the long term. The

Company continues to see strong traction in new business wins, creating a growing pipeline of opportunities expected to support future scale-up across both the GDS and CMS segments. The CMS business is entering its next phase of growth, supported by recently commercialised molecules, upcoming launches, and a robust pipeline of development-stage assets, including molecules in Phase 2 and later stages. This expanding pipeline provides increasing visibility on future commercialisation opportunities and reinforces a structurally-driven growth trajectory.

Neuland is also accelerating its transition towards a

CDMO-focussed model centred on new chemical entities, supported by expanding customer engagements, deeper relationships with innovators, and increased participation in complex development programs. The continued ramp-up at Unit 3 is expected to enhance execution capabilities and support larger commercial opportunities. At the same time, the Company is building differentiated capabilities in peptides through multiple collaborations with innovators and targeted NCE opportunities. Significant traction has been reported from both big pharma and small mid-size biotech companies for process development and scale up for peptides. The upcoming peptide facility will be ready by H2 2026. Along with this new R&D centre at Genome Valley, is expected to significantly strengthen Neulands technology platform, enabling participation in higher-value and more innovation-driven programs. Moreover, the new production block, together with the planned expansion of Unit 1 through land acquisition, is expected to provide additional manufacturing flexibility, faster scale-up, and improved operational readiness to meet future customer requirements.

RISK MANAGEMENT

The Company faces a range of risks due to the complex and uncertain nature of drug development, manufacturing and distribution. Its robust risk management framework enables the identification, assessment and mitigation of these risks, minimising their impact on business operations. These strategies also ensure compliance with laws and regulations, protect public health and safeguard the Companys reputation and financial stability. Neuland consistently delivers high-quality products and maintains stakeholder confidence by proactively managing risks.

HUMAN RESOURCES (HR)

Human Resources plays a central role in Neulands success by supporting an inclusive, supportive work culture in which employees are dedicated to achieving customer satisfaction and maintaining high standards of excellence.

The Company places strong emphasis on attracting top talent, developing leadership capabilities, enhancing skills, promoting diversity, ensuring employee health and safety and recognising outstanding performance. To support these objectives, Neuland utilises an online Human Resource Management System (HRMS) that facilitates goal-setting, performance appraisals and the provision of constructive feedback. In addition, the Company offers a range of training programs, workshops and mentoring initiatives to support continuous learning and career advancement. Employee contributions and achievements are recognised through the ACE (Acknowledging Commitment and Excellence) awards, presented quarterly and annually. The Company also prioritises employee well-being through wellness initiatives, including regular health checkups, medical insurance and confidential emotional support provided by the third-party service YourDOST. With a global workforce of 2,188 employees, Neuland successfully combines robust HR practices with a culture of development, recognition and care. These initiatives enable Neuland to build a motivated, skilled and resilient workforce that drives sustainable growth and long-term organisational success.

Please refer to page number 96 of the Narrative section for further detailed information

RESEARCH AND DEVELOPMENT

Neuland operates a state-of-the-art R&D facility in Bonthapally, Hyderabad, dedicated to the efficient development of complex molecules, cost-effective synthetic routes and non-infringing processes while minimising impurities. The facility comprises 15 state-of-the-art development laboratories, including 70 fume hoods, specialised peptide and D2 analogue labs, analytical labs, kilo labs for scale-up and pilot plants equipped with polyblock reactors and laboratory reactors for solubility, crystallisation and Design of Experiments (DoE) studies.

It also includes dedicated hazardous-waste and wet-lab facilities, as well as Focussed Beam Reflectance Microscopy (FBRM) for particle-size and crystallisation monitoring. Neuland engages in collaborative, client-specific synthesis under confidentiality agreements, delivering tailored solutions with comprehensive analytical support. The facility is backed by approvals from DSIR (Government of India) and the USFDA, and is supported by a strong R&D team of

434 professionals, along with advanced instrumentation, including a 600 MHz NMR system. The Company continually invests in technical skill enhancement, process engineering, Quality by Design (QbD) laboratories and sophisticated technologies to maintain robust quality and innovation in

API and intermediate development. Neuland also maintains a strong supply chain management system, optimising inventory, lead times and costs, while promoting employee well-being through health programs, medical insurance and confidential emotional support services.

The Companys R&D strategy is built on five integrated capability pillars to advance the development of complex, high-value and regulated APIs. The first three pillars focus on scientific and technological depth across process and product development: advanced multi-step synthesis and lifecycle optimisation for complex APIs (including high-potency and low-dose molecules), strong solid-state chemistry capabilities covering polymorph, salt and cocrystal engineering and innovative hybrid technologies integrating SPPS/LPPS, enzymatic and chemical routes.

These are further strengthened by expertise in peptide crystallisation and the use of flow chemistry for hazardous or unstable transformations, with emerging hybrid flow-batch manufacturing models designed for scalable, regulatory-ready deployment.

The remaining pillars establish a digitally enabled and compliance-led development ecosystem. Digital R&D capabilities integrate AI-assisted retrosynthesis, centralised knowledge systems, DoE and kinetics-based modelling and early deployment of Process Analytical Technology

(PAT) and digital twins to enhance predictability and first-pass success. This is underpinned by a regulatory-first, sustainability-driven design philosophy that embeds Quality-by-Design principles from the outset, along with proactive control strategies, and systematically incorporates sustainability metrics such as PMI, solvent efficiency, and energy consumption to ensure regulatory robustness, operational efficiency, and long-term environmental responsibility.

During FY 2025-26, Neuland Laboratories has reshaped its R&D function from a support role into a core driver of future growth. This has been backed by investment in new state-of-the-art facility of around 1,40,000 sq. ft. The Company is also strengthening its technical capabilities in advanced chemistry while embedding Green Chemistry practices and digital tools, such as Electronic Lab Notebooks, to improve efficiency and data quality.

INFORMATION TECHNOLOGY (IT)

Neuland has developed a strong IT infrastructure that ensures system resilience, uninterrupted workflows, robust data security and effective cross-functional coordination. The Company uses Systems, Applications and Products in Data Processing (SAP) Enterprise Resource Planning (ERP) for core business functions and SAP SuccessFactors for

Human Resource Management System (HRMS) processes.

Operations are further supported by Customer Relationship

Management (CRM), inventory planning tools, a Laboratory Information Management System (LIMS) and a Quality Assurance Management System (QAMS). Employees securely access the in-house intranet, Base Camp and mobile applications through single sign-on integrated with

Microsoft Office 365 and the Enterprise Mobility Suite (EMS). Hybrid working is enabled for 90% of operations through Virtual Desktop Infrastructure (VDI). Network and data security is maintained through a Software-Defined Wide Area Network (SD-WAN), virtualised servers, Data Leak Prevention (DLP) systems, Business Continuity Plans (BCPs) and Disaster Recovery (DR) solutions. Neuland prioritises data protection through regular Vulnerability

Assessments and Penetration Testing (VAPT), Security Information and Event Management (SIEM) and compliance with Information Security Management System (ISMS) standards certified to International Organisation for

Standardisation (ISO) 27001:2013. All stakeholders sign Confidentiality Disclosure Agreements (CDA) to safeguard sensitive organisational information.

ENVIRONMENT, HEALTH & SAFETY (EHS)

Neulands senior management is dedicated to achieving excellence in EHS practices and actively works to protect the environment, prevent occupational illnesses and minimise work-related injuries. Corporate responsibility lies at the core of Neulands work ethic, with a strong emphasis on EHS. Neuland has implemented a robust EHS management system that focusses on conserving resources, preventing pollution and safeguarding the health and well-being of its employees. The Company promotes the importance of individual well-being and environmental conservation across all business operations, guided by a ‘Safety First approach. These efforts have been recognised globally, as reflected in an ESG score of 76 out of 100 awarded by S&P Global. In addition, Neuland is committed to reducing its greenhouse gas emissions by 58.8% by FY 2033-34, compared to the baseline year of FY 2025-26. To achieve this target, the Company is implementing energy-efficiency measures, optimising manufacturing processes and transitioning to renewable energy sources. It is investing in renewable energy projects, such as solar and wind power, installing energy-efficient equipment and improving operational efficiency to reduce its overall carbon footprint.

QUALITY CONTROL AND QUALITY ASSURANCE

Neuland has established a robust framework that aligns with international regulations and adapts to new policies, ensuring the superior quality of its products and services.

The Company places strong emphasis on quality control and quality assurance throughout the entire manufacturing process, from the procurement of raw materials to the distribution of finished products. This is achieved through comprehensive quality management systems, regular risk assessments and strict adherence to GMP. Neulands quality control laboratories, equipped with advanced instruments such as High-Performance Liquid Chromatography (HPLC), Gas Chromatography (GC), Ultraviolet Spectroscopy (UV), Fourier Transform Infrared Spectroscopy (FTIR), Liquid Chromatography Mass Spectrometry (LC-MS), Inductively Coupled Plasma Mass Spectrometry (ICP-MS) and X-ray Diffraction (XRD), operate continuously with skilled analysts who ensure product integrity. These laboratories perform analytical testing, method validation, batch release testing and stability studies in accordance with ICH guidelines, guaranteeing consistent compliance with regulatory standards.

WATER & WASTE MANAGEMENT

Neuland has set a target to reduce water consumption by

10% through recycling and efficient water management practices. The Company has upgraded its water recycling systems with advanced filtration and purification technologies, optimised processes through green chemistry and continuously improved equipment efficiency to conserve water. Neuland initiated a waterbody rejuvenation project during the year to offset nearly 50% of FY 2025-26 water consumption. The Company is further supporting its Net Zero ambitions by investing in carbon offset initiatives, afforestation and reforestation projects and exploring carbon capture and storage technologies. Neuland has established clear interim targets, along with robust monitoring and reporting mechanisms, to make meaningful progress toward its environmental and sustainability goals by 2035. Neuland has also established a comprehensive sustainability agenda that includes reducing hazardous and non-hazardous waste, minimising emissions and conserving water. The Company has set targets to reduce hazardous waste by 100% and non-hazardous waste by 50% through green chemistry principles, improved waste segregation and recycling, waste-to-energy initiatives, and lean manufacturing practices. Neuland has installed advanced scrubbers and filtration systems, maintains emission-control equipment and uses safer, non-toxic chemicals to reduce environmental impact. The Company has implemented Zero Liquid Discharge (ZLD) technology, recovering and reusing approximately 90% of wastewater, while the remaining wastewater is treated and managed in an environmentally responsible manner.

Please refer to page number 134 of the Narrative section for further detailed information

INTERNAL CONTROL AND AUDIT

The Company has established robust internal control systems that are appropriately aligned with the size, complexity and nature of its operations. These systems ensure strict compliance with applicable regulations, safeguard assets from unauthorised use, help prevent fraud, protect sensitive information and support accurate and reliable financial reporting. Clearly-defined approval limits govern contracts and expenditures, while well-structured processes facilitate effective business planning and enable periodic performance reviews. As of March 31, 2026, the management conducted a comprehensive evaluation of the Companys internal financial controls and the Audit Committee confirmed that these controls were adequate and operating effectively in accordance with the requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (SEBI) Listing Regulations. The statutory auditors, MSKA & Associates, audited the financial statements and issued an attestation report on the internal financial controls. In addition, Ernst & Young LLP conducted internal audits of the Companys key operational areas.

The specialised third-party professionals also periodically assess critical compliance areas to ensure adherence to established standards. The Audit Committee carefully reviews all audit observations, recommends corrective actions wherever necessary and regularly updates the

Board of Directors, thereby strengthening the Companys overall governance framework.

CAUTIONARY STATEMENT

This document contains forward-looking statements regarding expected future events and financial and operating results of Neuland Laboratories Limited. As these statements rely on assumptions, they are inherently subject to risks and uncertainties. There is a significant risk that these assumptions and predictions may prove inaccurate. Readers are cautioned against placing undue reliance on forward-looking statements, as various factors could cause actual future results and events to differ materially from those expressed in these statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors outlined in the Managements Discussion and Analysis of Neuland Laboratories Limited Annual