Orchid Pharma Ltd Management Discussions

ECONOMIC OVERVIEW GLOBAL

Global growth is projected at 3.1% in 2024 and 3.2% in 2025, as per World Economic Outlook (WEO) on account of greater-than expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China. Despite facing challenges such as geopolitical tensions, supply chain disruptions, and an energy crisis, the economy has maintained its strength and stability. The economic activity remained robust, and the economy adapted well to changing financial conditions, leading to consistent job growth, strong consumer demand due to rising incomes, increased government spending, and higher labour force participation.

Risks to the global outlook are now broadly balanced. On the upside, looser fiscal policy than necessary and assumed in projections could raise economic activity in the short term, although risking more costly policy adjustment later on. Inflation could fall faster than expected amid further gains in labor force participation, allowing central banks to bring easing plans forward. Artificial intelligence and stronger structural reforms than anticipated could spur productivity and on the downside, new price spikes stemming from geopolitical tensions, including those from the war in Ukraine and the conflict in Gaza and Israel, could, along with persistent core inflation where labor markets are still tight, raise interest rate expectations and reduce asset prices. A divergence in disinflation speeds among major economies could also cause currency movements that put financial sectors under pressure. High interest rates could have greater cooling effects than envisaged as fixed-rate mortgages reset and households contend with high debt, causing financial stress.

While some emerging markets have outperformed expectations following robust domestic demand and improved trade dynamics, many developing economies continue to grapple with the dual pressures of high inflation and increased external debt. This financial strain limits their ability to invest in essential sectors like healthcare and infrastructure, critical for sustainable growth.

Real GDP growth, 2024 (% change)

INDIAN

In FY 2023-24, the Indian economy has gained significant momentum, driven by positive macroeconomic indicators, improved labour market conditions, heightened urban demand, and increased government focus on capital expenditure. The National Statistics Organisation (NSO) in India has projected a robust growth of 7.6% for the Indian economy in FY 2023-24, exceeding the 7.0% growth witnessed in the previous FY 2022-23. Moreover, the Interim Budget for FY 2024-25 announced by the government indicates a move towards a self-reliant India, diminishing dependence on imports and fostering growth in domestic industries. By maintaining the status

While key metropolitan centres continue to hold strategic importance, a new wave of economic hubs is rising to prominence.

Currently among the top five economies globally, in the next three years, the country is expected to become the third-largest economy in the world, with a GDP of $5 trillion. Moreover, according to projections by the International Monetary Fund (IMF), Indias contribution to global growth will be around 18% by FY 2027-28; backed largely by robust domestic demand.

With expectations of a stable GDP growth rate in the coming years, India is poised for robust growth. With inflation projected to stabilise and align with targets by 2025, the economy stands to benefit from more relaxed monetary policies, which will likely enhance investment capacities across various industries.

The governments continued emphasis on infrastructure development is anticipated to stimulate gross fixed capital formation, providing a catalyst for broader economic activities that underpin the pharmaceutical sector as well. Moreover, enhanced rural demand, spurred by initiatives like the PM Garib Kalyan Anna Yojana, is expected to boost overall consumption, including healthcare services and products.

With ongoing reforms targeting vital areas such as workforce skilling, healthcare, energy security, MSMEs, and gender balance, India is advancing towards becoming a $7 trillion economy by 2030.

INDUSTRY OVERVIEW GLOBAL

Global health systems have demonstrated remarkable resilience in the face of the pandemic, global inflation, and regional conflicts and have moved forward to adopt novel therapies and increase usage. Overall, the global use and spending on medicines is exceeding prepandemic growth rates and is expected to continue significantly above those trends through 2028. The pharmaceutical industry has and will continue to have a significant impact on the global economy in terms of contribution to GDP.

The Pharmaceuticals market has been growing steadily in recent years, which is mainly driven by innovative drugs and an increasing demand for drugs and treatments worldwide. The largest driver of medicine spending growth through the next five years is still expected to be the availability and use in developed markets of innovative therapeutics and offset by losses of exclusivity and the lower costs of generics and biosimilars. Traditionally, innovative medicine growth has occurred most in the years immediately following launch, whereas recent years and the forecast outlook show growth driven by older products. This mix of spending growth between volume- driven growth, and mix-driven changes in the cost of therapy are showing most geographies shifting to more expensive therapies, reflecting the broader availability and patient access to medicines with higher clinical value.

Global medicine spending growth is expected to accelerate over the next five years, driven mostly by increased growth contribution from existing branded products even as most growth segments are expected to increase compared to the last five years. The impact from brands losing exclusivity (LOE) is expected to more than double to $192Bn, although a large part of that increase is from biologics facing biosimilars where the impacts have had more uncertainty.

With the start of the year 2024, we are hopeful about the fact that the pharma industry stands at the threshold of significant changes driven by advancements in technology, regulatory shifts, and evolving market dynamics. They are new trends creating a sense of anticipation, dominance of small molecule drugs, a growing usage and adoption of a growing biologics, the outsourcing of drug development and manufacturing, an increasing interest in personalized medicine with the advent of AI, and a grave emphasis on emerging markets. Pharma companies are also facing the task of addressing challenges related to regulatory compliance, rising expenses in research and development, effective management of supply chains, acquisition of intellectual property, coping with the substantial costs linked to medications, and much more.

INDIAN

The Indian Pharmaceutical industry is currently ranked third in pharmaceutical production by volume after evolving over time into a thriving industry growing at a CAGR of 9.43% since the past nine years. India has highest number of pharmaceutical manufacturing facilities that comply with the US Food and Drug Administration (USFDA) and has 500 API producers that make for around 8% of the worldwide API market.

Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. The domestic pharmaceutical industry includes a network of 3,000 drug companies and ~10,500 manufacturing units. India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers with a potential to steer the industry ahead to greater heights.

Indian pharmaceutical industry is known for its generic medicines and low-cost vaccines globally. Transformed over the years as a vibrant sector, presently Indian Pharma ranks third in pharmaceutical production by volume. The Pharmaceutical industry in India is the third largest in the world in terms of volume and 14th largest in terms of value. The Pharma sector currently contributes to around 1.72% of the countrys GDP.

Market size of India pharmaceuticals industry is expected to reach US$ 65 billion by 2024, ~US$ 130 billion by 2030 and US$ 450 billion market by 2047. According to the government data, the Indian pharmaceutical industry is worth approximately US$ 50 billion with over US$ 25 billion of the value coming from exports. About 20% of the global exports in generic drugs are met by India.

The pharmaceutical industry in India is a significant part of the nations foreign trade and offers lucrative potential for investors. Millions of people around the world receive affordable and inexpensive generic medications from India, which also runs a sizable number of plants that adhere to Good Manufacturing Practices (GMP) standards set by the World Health Organization (WHO) and the United States Food and Drug Administration (USFDA).

The Indian Government has taken many steps to reduce costs and bring down healthcare expenses. The National Health Protection Scheme, which aims to offer universal healthcare, the ageing population, the rise in chronic diseases, and other government programmes, including the opening of pharmacies that offer inexpensive generic medications, should all contribute to boost the Indian pharmaceutical industry. Some of the initiatives taken by the Government to promote the pharmaceutical sector in India are; 1) The government earmarked Rs. 1,000 crore (US$ 120 million) for the promotion of bulk drug parks for FY25, a significant increase from the previous year; 2) The total outlay for the development of the pharmaceutical industry for FY25 was increased to Rs. 1,300 crore (US$ 156.5 million) while the budget for the promotion of medical device parks was raised to Rs. 150 crore (US$ 18 million) for FY25.; 3) The allocation for assistance to medical device clusters for common facilities (AMD-CF) was pegged at Rs. 40 crore (US$ 4.1 million) for FY25.; 4) The outlay for the Jan Aushadhi scheme, the initiative to provide affordable generic medicines in the country, was hiked to Rs. 284.5 crore (US$ 34 million) for FY25, up from Rs. 110 crore (US$ 13 million) in the revised estimate for FY24.

OPPOURTUNITIES AND THREATS

The future holds both opportunity and increased complexity for the pharmaceutical industry.

Growth Drivers

1. Strong Demand: Rising income, greater health awareness, lifestyle diseases and increasing access to insurance will contribute to growth. The healthcare sector, as of 2024, is one of Indias largest employers, employing a total of 7.5 million people. A recent research report predicts that the integration of Artificial Intelligence (AI) within the Indian healthcare sector will create nearly 3 million new jobs by 2028.

2. Attractive Opportunities: Indias public expenditure on healthcare touched 2.1 % of GDP in FY23 and 2.2% in FY22, against 1.6% in FY21, as per the Economic Survey 2022-23. Two vaccines Bharat Biotechs Covaxin and Oxford- AstraZenecas Covishield manufactured by the Serum Institute of India) were instrumental in medically safeguarding the Indian population and those of 100+ countries against COVID-19.

3. Policy and Government support: The Government aims to develop India as a global healthcare hub. Public health surveillance in India will further strengthen the health systems. In the Interim Union Budget 2024-25, the government allocated Rs.90,659 crore (US$ 10.93 billion) to the Ministry of Health and Family Welfare (MoHFW). In March 2021, the Parliament passed the National Commission for Allied & Healthcare Professions Bill 2021, which aims to create a body that will regulate and maintain educational and service standards for healthcare professionals.

4. Rising Manpower: Availability of a large pool of welltrained medical professionals in the country. The number of allopathic doctors with recognised medical qualifications (under the I.M.C Act) registered with state medical councils/national medical council increased to 1.3 million in November 2021, from 0.83 million in 2010.

5. Growing space: This industry is still in its growing phase, according to the Life Cycle of an Industry. So, it can still go a long way and spread its wings further apart. So, it can still take control over the market, given the right marketing and advertising.

6. Foreign investment: Per Indias Consolidated FDI Policy, foreign direct investment in the pharmaceutical sector in greenfield (new) projects is permitted up to 100% without the approval of the Department of Pharmaceuticals (the "DoP"). 100% FDI in the pharmaceutical sector is allowed in brownfield pharmaceuticals; wherein 74% is allowed under the automatic route and thereafter through the government approval route.

7. Continued Rise of Digital Health: The rise of digital health technologies will transform the pharma industry. Patients will be able to monitor their health remotely through telemedicine and wearables. This technology will also provide valuable data for pharma companies to develop more effective treatments

Threats for Pharmaceutical Industry

1. Demand for a skilled workforce: The pharmaceutical industry requires a workforce that has significant knowledge, experience, and skills. Training the workforce helps to acquire the necessary skills to ensure, enhance and improve their participation in their daily tasks. This will also help to fill in any skills gaps that may be observed in the workforce.

2. Supply chain disruption: Supply chains have witnessed an unprecedented disruption all around the world, and this represents one of the major challenges facing the pharmaceutical industry. Many pharma companies are looking to supply chain innovations and circular supply chain models to tackle these challenges and build business resilience.

3. Regulatory compliance: Pharmaceutical companies must comply with various regulations, from clinical trial requirements to manufacturing and distribution standards. Keeping up with these regulations can be daunting, and failure to comply can result in costly fines and reputational damage.

4. R&D Costs: Developing new drugs and treatments is an expensive and time-consuming process. With rising R&D costs and increasing pressure to deliver results, pharmaceutical companies must be able to streamline their research processes and optimize their resources.

5. Intellectual property

The pharmaceutical industry is highly competitive, and intellectual property is critical to the success of any company. Protecting and enforcing patents can be a complex and costly process, and the threat of patent infringement is a constant concern.

6. Pricing pressure

Pharmaceutical companies face increasing pressure to control the cost of their products, both from government regulators and consumers. This pressure can lead to lower profit margins and increased competition, making it harder for companies to invest in R&D and bring new products to market.

7. Supply chain management

The pharmaceutical supply chain is complex and highly regulated, with multiple stakeholders involved in drug production, transportation, and distribution. Ensuring the safety and quality of pharmaceutical products at every stage of the supply chain is essential but can be challenging.

SEGMENT WISE / PRODUCT WISE PERFORMANCE

Orchid Pharma Limited currently operates mainly in API business. This segment has 2 categories namely Oral and Sterile. The category wise sales data is given below:

Financial Year	Oral		Sterile
	Quantity (Per MT)	Value (Rs in Lakh)	Quantity (Per MT)	Value (Rs in Lakh)
2022 - 23	260.64	44,436.43	113.64	20,645.69
2023 - 24	379.25	62,029.38	106.76	19,136.20

OUTLOOK

Orchid, an EOU for manufacturing of both sterile and oral cephalosporin APIs and have a long history of commercial production with the widest portfolio of cephalosporin APIs enjoys 1) Extensive experience in manufacturing complex APIs with high entry barriers; 2) Longstanding relationships with key customers with diversified geographical presence; 3) API Facility with in-house R&D and regulatory capabilities; 4) Experienced Promoter, professional senior management and a technically qualified team.

Research & Development. Technology Development/Absorption and Intellectual Property

Research & Development is the lynchpin of innovation and plays a vital role in developing and adopting new technologies in the technologically intensive Pharmaceutical industry. In Orchid, a team of well qualified and experienced professionals in R&D are specialised across the value chain of chemical research, analytical research, process development & process engineering of APIs, intermediates and Key Starting Materials. Our R&D centre conforms to international standards and is well equipped with world-class infrastructure managed by best-in-class manpower.

Our R&D performance hinges on the coherence and cohesiveness among our R&D Scientists and Manufacturing Personnel where rapid exchange of knowledge takes place to keep pace with competition and to develop disruptive technologies for future. The R&D team focuses on process intensification, absorption of technologies and establishing technologies at commercial scale.

A dedicated team of scientists focuses on product/process development in the area of cephalosporins and related heterocyclic chemistry, development of advance heterogeneous catalysts, extension of chemistry skills to non-heterocyclic compounds, value creation in existing key products through process improvements / process intensification, Chiral compounds and development of animal health care products

We develop new technologies at the lab scale and the scientists and manufacturing engineers work in close coordination to ensure parameters established during lab development are within the determined design space leading to seamless scale-up to commercial scale without losing on the proficiency of the process with a lead-time comparable to the best in the industry. Six Sigma initiatives at plants and R&D support the adoption of new technologies and enhancing the efficiencies of our manufacturing plants to provide better services to our customers.

Through our investment in R&D, together with our implementation of management tools and strategies in manufacturing, design and project management, we continue to improve our cost competitiveness and quality of production by improving the efficiency of our supply chain management and developing better processes and product development and manufacturing capacities to reduce process inefficiencies, process variations, plant inefficiencies, assets under-utilisation and the time required for product and process development.

We continually develop new products that provide our customers with better solutions for existing problems and new solutions for emerging problems. This requires us to expend significant effort on research, development, manufacturing and marketing. To preserve the value of our investment, we rely on the patent laws of the jurisdictions where we do business. In addition, we need to continuously improve our production efficiencies. Our production technologies typically incorporate specialised proprietary know-how. We have both developed intellectual property internally and acquired intellectual property through acquisitions. From time to time, we may grant licenses to third parties to use our patents and know-how, and may obtain licenses from others to manufacture and sell products using their technology and know-how.

We have designed a very successful R&D which continues to ensure delivery of a sustainable pipeline of high-value products. The Groups R&D strategy is centered on improving the speed and yield. Our R&D continues to lead to new, innovative processes and new knowledge- driven products that increase the efficiencies of our production and allow us to capitalise on opportunities for growth in competitive markets.

Our business faces significant competition from China and other competitors. R&D has taken a proactive approach to introduce new products on which we were earlier dependent on China. This is being done by deploying our various technological capabilities. New products continue to get developed by experienced and talented R&D teams which work to deliver in line with the marketing strategy by developing new cost effective processes/ products. Further, in order to ensure that cost competitiveness is maintained, R&D is working on the improvement of existing processes including atom economy.

Our focus continues to be on developing commercially competitive, intellectual property compliant, robust and eco-friendly technologies. Our R&D thrives on green chemistry culture and has developed various environmentally friendly & disruptive technologies, incorporated optimum atom efficiencies, recycling and reuse of solvents/reagents/by-products targeting towards zero discharge of effluents, removal/ substitution/ minimisation of hazardous chemicals and replacing chemical processes with enzymatic/ chemo catalysis processes.

Our Intellectual Property (IP) - enabled innovative R&D efforts have helped us avoiding any intellectual property (IP) disputes after developing outstanding designing around capabilities around third party IP by identifying newer opportunities, better understanding of emerging challenges, developing alternative/innovative research strategies and creating intellectual property which is well protected in defined geographies of our business interests. Our efforts have fructified into intellectual properties, which have grown over the years creating a strong position in generic pharmaceutical businesses in regulated markets.

The Group has a dedicated team of scientists whose primary task is to ensure that the products are manufactured using only noninfringing processes and compliance requirements are met by reviewing and monitoring IPR issues continuously. The Group takes all reasonable steps to ensure that our products do not infringe valid third-party IPRs.

We have evolved our production technologies including specialised proprietary know-how over a period of time with the help of R&D. We keep our options to licence-in/ licence-out technologies/know-how to accelerate businesses of interest. The basic mission of R&D remains to enhance innovation level, scientific efficiency and effectiveness in compliance with Orchid core values.

API manufacturing

API is an important segment of the Indian pharma industry, contributing to around 35% of the market. The Indian pharmaceutical industry is the 3rd largest in terms of volume and 13th largest in terms of value. Furthermore, India also has the highest number of US- FDA compliant Pharma plants outside of USA and is home to more than 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities as well as a highly skilled resource pool, occupying forty-four percent of global abbreviated new drug applications, the API industrys growth in the country has been fuelled by adopting global standards.

There are 500 API manufacturers contributing about 8% in the global API Industry. India is the largest supplier of generic medicines. It manufactures about 60,000 different generic brands across 60 therapeutic categories and accounts for 20% of the global supply of generics. Access to affordable HIV treatment from India is one of the greatest success stories in medicine. Because of the low price and high quality, Indian medicines are preferred worldwide, making it "pharmacy of the world".

There is a growing investment in R&D for API production processes, as well in quality, environment and safety, resulting in better, safer and cleaner technologies and substantial increase of pharmaceutical technology know-how and intellectual property. Companies should increase their size to face global competition. Mergers and acquisitions are taking place in order to pursue globalisation projects. API manufacturers ask for global harmonised regulations with an increasingly strong relationship between the EU and the USA.

RISKS AND CONCERNS

1. Regulations and directives: Pharma manufacturing is already highly regulated, with manufacturers continually refining their processes to overcome substantial compliance obligations and costs. Unfortunately, compliance will become even more challenging in the coming years. The U.S. Food and Drug Administration (FDA) recently issued pharma industry guidance documents that impact how organizations collect, manage and submit quality data.

2. Talent shortage: As with all sectors, pharma manufacturers are struggling to attract the right talent. According to McKinsey, 80% of facilities are having difficulty finding candidates with the right skills. Pharma manufacturers are rapidly introducing new technologies, automating processes, and applying advanced analytics to data. Disruptions such as new business models and entirely new product modalities are contributing to the current landscape.

3. Cybersecurity and data protection: Cybersecurity threats are a major concern for nearly every industry, but according to IBMs latest report, pharma ranks among the top three industry verticals for the highest average cost of a data breach. In 2023, the global average cost of a data breach in the pharma industry was an eyewatering $4.82 million.

4. Cost and inflationary pressures: Inflation is still nearly triple what it was pre-pandemic, and it will continue to play a role in 2024. According to Deloittes 2024 Health Care and Life Sciences Outlook, 36% of survey respondents indicated that the economy and inflation would continue to influence their strategy. This is seemingly at odds with the commonly held belief that pharma is one of the few industries that is recession-proof, and can better withstand economic downturns and pressure than other industries.

Additionally, the broader risks associates with the business of the Company are:

• Our business is dependent on the success of our relationships with our customers and sale of our products to them. Any adverse developments or inability to enter into or maintain such relationships, loss of such customers, the deterioration of their financial condition or prospects, or a reduction in their demand for our products could adversely affect our business, results of operations, financial condition and cash flows.

• We derive majority of our revenue from our sterile and oral cephalosporin API business, of which a limited number of key products generate a significant portion of our total revenue, and our business may be adversely affected if our sterile and oral cephalosporin API business or our key products do not perform as well as expected or if substitute products become available or gain wider market acceptance.

• Manufacture, storage and supply of oral and sterile cephalosporin APIs is a complex process and if we fail to maintain the quality of our sterile APIs manufacture at any stage, our business and operations will be adversely affected.

• We are dependent on select countries and few suppliers for significant part of our raw material. Any delay, interruption or shortfall in the supply of our raw materials or an increase in our raw material costs, or other input costs, may adversely affect the pricing and supply of our products and have an adverse effect on our business, results of operations and financial condition.

• Our business subjects us to risks in multiple countries that could materially adversely affect our business, cash flows, results of operations and prospects. We also face foreign exchange risks that could adversely affect our results of operations and cash flows.

• Our inability to successfully utilize our installed capacity, could have an adverse effect on our business, results of operations, financial condition and cash flows.

• Pricing pressure from customers may affect our gross margin, profitability and ability to increase our prices, which in turn may materially adversely affect our business, results of operations and financial condition.

• We are exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact our results of operations and cash flow.

• Reforms in the healthcare industry and the uncertainty associated with pharmaceutical pricing and reimbursement could adversely affect the pricing and demand for our products.

• We rely completely on third-party logistics providers for supply and transportation of our products to our customers. Any inability on the part of third party logistics providers to effectively render their services may adversely impact our operations and business.

• We have power and water requirements and any disruption to power or water sources could increase our production costs.

INTERNAL CONTROL SYSTEMS

The Company has external teams carrying out various types of audit to strengthen the internal audit and risk management functions. The Internal Financial Control over Financial Reporting System are existing and operative, however based on the observations of the auditors, the Company is further strengthening the Internal Financial Control systems over financial reporting. The Board and Audit Committee ensure that the internal financial control system operated effectively and they regularly review the effectiveness of internal control system in order to ensure due and proper implementation and due compliance with applicable laws, accounting standards and regulatory norms.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Profitability From Continuing Operations

• During the year ended on March 31, 2024, the EBITDA of the Company was at Rs. 141.07 Crore as against EBITDA of Rs.103.05 Crore during the previous year ending on March 31, 2023.

• The net profit of the Company before Extra-ordinary items & Tax for the year ended on March 31, 2024 stood at Rs. 91.52 Crore as against loss of Rs.16.04 Crore during the previous year ending on March 31, 2023.

EPS for Company

• EPS for the year ending on March 31, 2024 (before extra-ordinary items) stood at a positive Rs. 19.59 as compared to a positive Rs. 13.28 for the previous year ending on March 31, 2023.

Components of Revenue & Expenditure

From Continuing Operations

• The operating revenues for the year 2023-24 was Rs. 819.37 Crore as against Rs.665.90 Crore during the previous year ending on March 31, 2023.

• Material cost for the year ended March 2024 was Rs. 528.35 Crore (64.48 % of the Operating revenues) as compared to Rs. 406.09 Crore (60.9% of the Operating revenues) during the previous year ending on March 31, 2023.

• The other operating cost, including employee cost for the year ended March 2024 was Rs. 224.23 Crore as against Rs. 197.66 Crore during the previous year ending on March 31, 2023.

• The Finance cost for the year ended March 2024 was Rs. 16.33 Crore as compared to Rs. 32.23 crore during the previous year ending on March 31, 2023.

• The Depreciation & Amortisation for the year ending March 2024 was Rs. 33.22 Crore as compared to Rs.54.79 Crore during the previous year ending on March 31, 2023.

Balance Sheet

• The Equity and Reserves as at March 31, 2024 stood at Rs. 1218.32 Crore as compared to Rs.731.96 Crore as at March 31, 2023.

• The total borrowings as at March 31, 2024 stood at Rs. 134.26 Crore as compared to Rs.331.35 Crore as at March 31, 2023.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED

Orchids HR function is aligned with the Companys overall growth vision and continuously works on areas such as recruitment and selection policies, disciplinary procedures, reward/recognition policies, learning and development programmes as well as all- round employee development. Orchid provides a safe and rewarding environment that attracts and retains a talented team and where employees are engaged in delivering exceptional results to the customers and investors. Orchid Pharma has a diverse talent pool of 923 Orchidians. The Company acknowledges the indispensable role of Orchidians in driving continued success.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS ALONG WITH DETAILED EXPLANATIONS

All Amount in INR Crore

Particulars	FY 2023 - 24	FY 2022 - 23
Debtors Turnover Ratio:
Sales for the year (manufacturing sales)	815.12	655.61
Debtors at the beginning of the year	294.04	241.18
Debtors at the end of the year	271.24	294.04
Average Debtors for the year	282.64	267.61
Debtors Turnover Ratio	2.8	2.5
Inventory Turnover Ratio
Cost of goods sold	484.46	384.62
Opening Inventory	225.27	169.12
Closing Inventory	258.19	225.27
Average Inventory	241.73	197.19
Inventory Turnover Ratio	2.0	2.0
Interest Coverage Ratio
EBITDA	141.06	103.05
Interest Expenses	16.33	32.23
Interest Coverage Ratio	8.64	3.2
Current Ratio
Current Assets at the end of the year	782.29	493.79
Current Liabilities at the end of the year	209.67	326.63
Current Ratio	3.73	1.51
Debt Eauitv Ratio
Total Debts at the end of the year	134.26	331.35
Shareholders equity at the end of the year	1218.31	731.96
Debt Equity Ratio	0.11	0.45
Operating Profit Margin (%)
Operating Profit	110.68	83.62
Net Sales	819.37	665.90
Operating Profit Margin%	13.51	12.56
Net Profit Margin (%)
Net Income at the end of the year	91.52	16.04
Net Sales at the end of the year	819.37	665.90
Net Profit Margin%	11.17	2.41

DETAILS OF CHANGE IN RETURN ON NET WORTH AS COMPARED TO IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Return on net-worth improved to positive of 7.51% during the FY 2023-24 compared to 2.27% of the previous year. Improvement has occurred due to current years increased profits due to the turnover increase and overall operational expenses were reduced during the year as compared to last year.