Parmax Pharma Ltd Management Discussions

Global Economy

Global economic activity expanded at a measured pace through 2025, as cooling inflation, steady consumer expenditure, and continued investment in technology-led transformation held momentum in place. Softer commodity prices and smoother supply chains brought inflation down far enough for central banks in many regions to begin loosening policy. That recovery, however, was not evenly shared. Advanced economies slowed under subdued demand, fiscal consolidation and cooling labour markets, while emerging economies, Asia in particular, held a firmer pace on the strength of domestic consumption and favourable structural drivers.

That relative calm gave way to fresh volatility in early 2026 as geopolitical tensions sharpened across regions that matter to trade and energy. The US-Israel-Iran conflict unsettled global financial markets, amid disruptions along key maritime routes stretching from the Strait of Hormuz to the Red Sea and the Suez Canal, which drove energy prices and freight costs higher. Shifting trade policies and tariff actions added to the pressure, hastening a restructuring of global supply chains as businesses moved to diversify sourcing and built in greater resilience.

the outlook remains uneven. Higher energy costs and persistent geopolitical risk continue to weigh on energy importing and more exposed economies, even as countries woven into the global technology value chain draw strength from rising investment in AI and digital infrastructure. Disinflation, meanwhile, has lost pace, with price pressures proving more stubborn than expected. Risks are more balanced than they were in early 2026, though renewed geopolitical conflict and a possible repricing in financial markets still cloud the outlook. Against this backdrop, holding price stability, rebuilding fiscal buffers and shoring up resilience remain the priorities for policymakers.

Indian Economy:

India held its position as the worlds fastest-growing major economy during FY 2025-26, supported by robust domestic demand, stable macro-economic fundamentals and sustained policy initiatives. Growth remained broad-based, with resilient consumption, continued public capital expenditure and the countrys favourable demographic advantage each contributing.

Domestic consumption remained the principal engine of growth throughout the year. Improved agricultural output and favourable monsoon conditions strengthened rural demand, while urban consumption benefited from rising formal employment, higher disposable incomes and expanding retail credit. Private Final Consumption Expenditure grew by 7.7% during FY 2025-26, spread across categories rather than concentrated in a few segments. Rising household incomes and improving consumer sentiment held up discretionary spending, providing a strong foundation for sustained economic expansion

India further strengthened its standing as an attractive global manufacturing hub, as companies spreading supply-chain risk found a settled policy environment and a skilled workforce available to them. continued investments in infrastructure and logistics improved operational efficiencies, strengthened industrial competitiveness and supported long term economic development. The economy, however, remained exposed to external challenges; volatility in crude oil prices, food inflation and geopolitical developments continued to pose potential risks to inflationary trends and external balances.

Global Pharmaceutical Industry

Growth across the global pharmaceutical industry has held firm, as healthcare access widens, public health expenditure rises, and investment in research and development continues. The market was valued at approximately USD 1,738.0 billion in CY 2025 and is projected to reach USD 1,837.0 billion in CY 2026. Further out, it is expected to compound at a CAGR of 6.1% between CY 2026 and CY 2033, reaching an estimated USD 2,776.7 billion.

The forces behind this expansion are structural rather than cyclical. Chronic and non-communicable diseases (NCDs) now account for nearly 74% of global deaths, and that burden has lifted demand for long-term therapies and specialised treatments. Populations are ageing across developed and emerging economies alike, raising healthcare utilisation, while wider coverage and government-led vaccination programmes are bringing preventive care within reach of more people.

Alongside the broader therapeutics market, pharmaceutical manufacturing, which covers Active Pharmaceutical Ingredients (APIs), contract manufacturing, and outsourced development services, is expanding on its own account. Demand for complex generic medicines, the drive to diversify supply chains, and wider adoption of continuous manufacturing technologies are each pulling it forward. The segment was valued at approximately USD 627.8 billion in CY 2025 and is expected to reach USD 665.3 billion in CY 2026, with continued investment in capacity, technology, and supply-chain resilience projected to carry it to a CAGR of 5.98% through CY 2034.

Indian Pharmaceutical Industry

Indias place in the global pharmaceutical value chain continues to strengthen, built on manufacturing depth, cost competitiveness, and a growing focus on innovation. The domestic pharmaceutical industry is estimated to be valued at nearly USD 60 billion in 2026 and is projected to expand to USD 120-130 billion by 2030, with further growth anticipated as the sector advances towards its long-term vision for 2047.

Government policy has carried much of this forward, working on competitiveness, innovation, and access to healthcare at the same time. The Union Budget 2026-27 announced the Biopharma SHAKTI initiative with an outlay of 10,000 Crores over five years to build out biologics, clinical infrastructure and high-value therapeutics, the clearest signal yet of the move towards innovation-led biopharmaceuticals. The Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) has, meanwhile, expanded its network to more than 18,646 operational Jan Aushadhi Kendras as of February 2026, widening access to affordable medicines across the country.

Domestic Pharmaceutical Market

Indias domestic pharmaceutical market ranks among the worlds largest and among its fastest growing. Greater health awareness, rising disposable incomes, a deep manufacturing base, and sustained work on accessibility and affordability all sit behind that position. Demand is broadening across therapeutic segments as the burden of chronic disease grows, healthcare infrastructure expands, and quality medicines reach further.

The domestic pharmaceutical market recorded an annual turnover of Rs. 4.72 lakh Crores in FY 2024-25. Price revisions, new product launches, and healthy domestic demand are expected to hold that trajectory, with market participants projecting growth of 9-11% during FY 2025-26.

Chronic therapies are among the key drivers of the growth, particularly cardiac and anti-diabetic therapies, reflecting changing disease patterns and the increasing need for long term care. Investment in research and development, higher budgetary allocations for the sector, and continued improvement in healthcare infrastructure are lending further support to the growth of pharmaceutical industry. In addition, the development of mega Bulk Drug Parks is expected to strengthen domestic manufacturing and make supply chains more efficient.

Export Pharmaceutical Market:

India remains the worlds largest supplier of generic medicines and a trusted partner in global healthcare. A strong manufacturing base, a record of regulatory compliance, and cost competitiveness kept exports on their upward path through the year. Pharmaceutical exports reached USD 30.47 billion in FY 2024-25, registering 9.4% year-on-year growth, and increased further to approximately USD 31.11 billion in FY 2025-26. Global demand has held up, and the industrys stated ambition is USD 50 billion in exports by CY 2030.

Indias role in global healthcare rests as much on vaccines as on generic medicines. The country accounts for 20% of global generic drug demand, while Indian manufacturers supply 55- 60% of UNICEFs vaccine requirements, 99% of the World Health Organisations (WHO) DPT vaccine demand, and substantial shares of BCG and measles vaccines. This is what stands behind the description of India as the Pharmacy of the World, an ability to deliver high-quality, affordable medicines and vaccines at scale.

Company Overview:

Company is engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs), pharmaceutical intermediates and speciality chemicals. the Company has built a portfolio of APIs alongside a small range of specialised finished products.

Key Financial Ratios

Financial Parameters	FY 2025-26	FY 2024-25	Change (%)	Reason for Change
Debt-Equity Ratio (Times)	-1.96	-4.07	51.84	The change in the ratio is mainly due to the loss incurred during the financial year, which adversely impacted the Companys profitability and net worth.
Operating Profit Margin (%)	-0.30	-0.03	(900.00)
Net Profit Margin (%)	-34.34	-7.42	(362.80)
Return on Equity (%)	0.58	0.39	48.72
Return on Capital Employed (%)	0.75	0.91	17.58
Debtors Turnover Ratio (Times)	3.13	0.54	(479.63)
Current Ratio (Times)	0.74	0.69	(7.24)
Interest Coverage Ratio (Times)	-2.90	-1.33	118.45
Inventory Turnover Ratio (Months)	8.87	1.48	499.32