Patron Exim Ltd Management Discussions

ECONOMIC OVERVIEW:

Global Economy

Market Size: The global API market was valued at approximately $255 billion in 2024 and is projected to reach $359 billion by 2030, growing at a CAGR of 5.8%.

Growth Forecast: By 2033, the market is expected to hit $374.5 billion, reflecting sustained demand across therapeutic areas.

Key Growth Drivers

a) Chronic Disease Prevalence: Rising cases of cancer, diabetes, and cardiovascular conditions are fueling demand for APIs.

b) Aging Population: The global increase in elderly populations, especially in Africa and Latin America, is boosting pharmaceutical consumption.

c) Biotech and Biosimilars: Advancements in biologic drugs and biosimilar development are accelerating API innovation and production.

d) Generic Drug Demand: Cost-effective generics are gaining traction, especially in emerging markets, increasing API requirements.

(source: https://www.grandviewresearch.com/industrv-analvsis/active-pharmaceutical- ingredients-market)

Indian Economy Outlook

Market Size (2024): USD 17.77 billion Projected Size (2033): USD 38.60 billion Growth Rate: CAGR of 8.1% from 2025 to 2033

India is rapidly emerging as a global hub for API manufacturing, thanks to its cost-effective production capabilities, skilled workforce, and supportive government policies.

(Source: https://www.imarcgroup.com/india-active-pharmaceutical-ingredients-market)

Government Initiatives

• Production Linked Incentive (PLI) Scheme: INR 6,940 crore allocated to boost domestic API and Key Starting Materials (KSM) production

• Pharmaceuticals Vision 2020: Rs. 15,000 crore initiative to make India a global pharma manufacturing leader

• Self-Reliance Push: Reducing dependency on Chinese imports by encouraging local production

(Source: https://globalriskcommunitv.com/market research/india-active-pharmaceutical- ingredients-market-growth-analvsis-an)

BUSINESS OPERATIONS:

The Company is currently engaged in the trading and distribution of wide range of pharmaceutical raw material which is also known as APIs (Active Pharmaceutical Ingredients), industrial, excipient and solvents. Presently our product portfolio comprises of around 150 AIPs, Excipient, Pharma Chemical & Intermediates. We are also in the trading of variety of chemicals, such as, Petrochemicals, Dyes & Pigment Chemicals, Paints & Speciality Chemical, Agro Chemicals, Oil & Refinery Chemicals, Foam & Adhesive, Plywood & Laminates Chemical. The range of Chemicals also includes food industry & water treatment chemicals, resins & plastics chemicals, polymers and additives etc. The geographical territory in which your Company operates is Ahmedabad and the surrounding area of Gujarat.

The Company got certification of ISO 9001:2015 in Quality Management System, ISO 22000:2018 in The Food Safety Management System, ISO 45001:2018 in Occupational Health & Safety Management System, we are also certified by INTERNATIONAL QUALITY CERTIFICATION SERVICES UK LTD as a HACCP in Hazard Analysis & Critical Control Point System, as a HALAL in Compliance with the requirements of Islamic Law and WHO-GMP to adopt a Good Manufacturing Practice.

OUR PRODUCTS:

APIs is known as bulk drugs or bulk actives are the principle ingredients used in making finished dosages in the form of capsules, tablets, liquid or other forms of dosage, with the addition of other APIs or inactive ingredients. We believe that timely and committed delivery is an ongoing process of building and sustaining relationships. Our strength lies in understanding the requirements of the customer and our execution capabilities. This has enabled us to get repeated orders from our existing customers and attract new customers.

An active ingredient is the ingredient in a pharmaceutical drug or pesticide that is biologically active. The similar terms active pharmaceutical ingredient and bulk active are also used in medicine, and the term active substance may be used for natural products.

SWOT ANALYSIS:

Strength

A. Diversified Product Portfolio

The Company has diverse product portfolio across various segments to fulfil customers requirements. offerings include wide range of pharmaceutical raw material which is also known as APIs (Active Pharmaceutical Ingredients) and chemical formulation products. We supply products on the basis of needs and requirements in the market. The product range in formulations allows existing customers to source majority of their product requirements from the Company and also enables it to expand business from existing customers as well as address a larger base of potential new customers.

B. Experienced Promoter

The Promoter of the Company, Mr. Narendrakumar Gangaramdas Patel has significant in depth knowledge of the various products traded by the Company and has been instrumental in the consistent growth of Companys performance. He has an overall experience of more than 2 decade in the trading segments of pharmaceutical business. The Company believes that our promoters experience and their understanding of the pharmaceutical business will enable it to continue to take advantage of both current and future market opportunities. The promoter is actively involved in the business with continuous personal attention.

C. Quality Service

The Company believes in providing quality and timely service to customers. It has set very high standards when it comes to timeliness and quality of service we provide to customers. The stringent systems ensure that all the products reach customers on stipulated time and there are minimum errors to ensure reduced product rejection. It believes that quality service for the last 2 decades has earned us a goodwill from customers, which has resulted in customer retention and order repetition. It has also helped us to add to existing customer base. The Company have developed internal procedure of checking the client orders at each stage from customer order to delivery. The Company focuses on maintaining the level of consistently in our service, thereby building customer loyalty for Companys Brand.

D. High level of customer satisfaction

The Companys customers are highly satisfied with services from purchase order to quality to delivery to customer complain redressal mechanism. It has been able to achieve this customer satisfaction with the help on timely deliveries, ease of placing orders, and stellar customer services.; this has helped in creating a customer base from various categories such as retailers, semi-wholesalers, etc

Weakness

The Company is in the business of supplying raw materials to pharmaceutical industries and pharmaceutical industry falls under the essential business list declared by the Government. Therefore, even during the time of the pandemic, the Company continued its business operation during lock down period and the business was not affected during the pandemic.

Opportunity

A. Develop cordial relationship with our Suppliers, Customer and employees

The Company believes in maintaining good relationship with our Suppliers and Customers which is the most important factor to keep our company growing. Our dedicated and focused approach and efficient and timely delivery of products has helped us build strong relationships over number of years. We bag and place repetitive order with our customers as well as with our suppliers respectively. For us, establishing strong, mutually beneficial long-term relationships and strategic supplier relationship management are critical steps in improving performance across the supply chain, generating greater cost efficiency and enabling the business to grow and develop.

B. To build-up a professional organization

The Company believe in transparency, commitment and coordination in our work, with our suppliers, customers, government authorities, banks, financial institutions etc. We have a blend of experienced and sufficient staff for taking care of our day to day operations. We also consult with external agencies on a case to case basis on technical and financial aspects of our business. We wish to make it sounder and stronger in times to come.

C. Leveraging our Marketing skills and Relationships

This is a continuous process in our organization and the skills that we impart in our people to give prime importance to customers. We aim to do this by leveraging our marketing skills and relationships and further enhancing customer satisfaction. We plan to increase our customers base by supplying orders in hand on time, maintaining and renewing our relationship with existing clients.

D. Focus on dealing in quality standard products

Quality of the product is very important for the company from both customer point of view and growth point of view. Our Company is focused on dealing in the products which meets with the requisite quality standards as per the applicable regulatory norms. Providing the desired and good quality products help us in enhancing our Companys image and maintaining long term relationships with customers.

E. Government Support

Government incentives including an outlay of INR 21940 for PLI 1.0 and PLI 2.0

F. Medical tourism

Quality services at marginal costs compared to US, Europe, and South Asia

G. Infrastructure development

India has the highest number of US-FDA compliant plants outside the US

H. Strong drug manufacturing

Expertise in low cost generic patented drugs as well as end-to-end manufacturing

I. Strong domestic demand

Launch of the largest National Health Protection Scheme globally

Further, recognizing the potential for growth, the Government of India took up the initiative of developing the Indian Pharmaceuticals sector by creating a separate Department in July 2008. The Department is entrusted with the responsibility of policy, planning, development and regulation of Pharmaceutical Industries. An assessment of the Indian Pharmaceutical Industrys strength reveals the following key features:

a) Strong export market- India exported drugs worth US$ 15 billion to more than 200 countries including highly regulated markets in the US, Europe, Japan and Australia. Large Indian pharma 66 companies have emerged as among the most competitive in the evolving generic space in North America and have created an unmatched platform in this space. Indian companies are also making their presence felt in the emerging markets around the world, particularly with a strong portfolio in antiinfective and antiretroviral.

b) Large domestic pharma companies have continued to grow, assuming leadership position in many therapies and segments in the Indian market as well as creating a strong international exports backbone.

c) Competitive market with the emergence of a number of second-tier Indian companies with new and innovative business modules.

d) Indian players have also developed expertise in significant biologics capabilities.

e) Biologic portfolios while still nascent in India are being built with an eye on the future.

f) Multinational companies have continued to invest significantly in India and are making their presence felt across most segments of the Indian pharma market. Companies have also begun to invest in increasing their presence in tier II cities and rural areas and making medical care more accessible to a large section of the Indian population.

g) Low cost of production and low R&D costs.

h) Innovative Scientific manpower.

i) Excellent and world-class national laboratories specializing in process development and development of cost-effective technologies.

j) Increasing balance of trade in Pharma sector.

k) An efficient and cost effective source for procuring generic drugs, especially the drugs going off patent in the next few years.

l) An excellent center for clinical trials in view of the diversity in population Threats

Our Companys future results of operations could be affected potentially by the following factors:

1. Changes in Laws and Regulations that apply to our Industry.

2. Changes in Fiscal, Economic or Political conditions in India

3. Companys inability to retain the experienced staff

4. Failure to adapt the changing technology in our industry of operation may adversely affect our business

5. Failure to comply with regulations prescribed by authorities of the jurisdiction in which we operate

6. Competition with existing and new entrants

7. Reduction of the sub contact from the big contracting Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place proper system of internal control which is commensurate with size and nature of business. The Company has an Audit Committee headed by the Independent Director, inter-alia, to oversee companys reporting process, disclosure of information.

FINANCIAL POSITION AND RESULTS OF OPERATIONS:

The Company has robust growth and improvement in top line and bottom line on Standalone basis in the Current and previous financial years which is explained below:

(Rs. in lakh)

PARTICULARS	STANDALONE - FINANCIAL STATEMENTS-YEAR ENDED MARCH 31, 2025	STANDALONE - FINANCIAL STATEMENTS-YEAR ENDED MARCH 31, 2024
Revenue from Operations	2436.42	657.65
Other Income	31.52	364.64
Total Revenue	2467.94	1022.29
Profit / (Loss) before exceptional and extraordinary Items and tax	10.60	90.00
Add/(Less): Extra-Ordinary Item	NIL	Nil
Profit / (Loss) after Extra Ordinary Items and before tax	10.60	90.00
Tax Expense:
A) Current Income Tax	3.5	23.4
B) Deferred Tax (Assets)/Liabilities	NIL	Nil
Profit / (Loss) After Tax	7.10	66.60

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

The Company considers employees as its vital and most valuable assets. Your Company considers manpower as its assets and understands that people have been driving force for growth and expansion of the Company. As on March 31, 2025, there were 4 permanent employees employed by the Company. The Company will continue to create opportunity and ensure recruitment of diverse candidates without compromising on meritocracy.

KEY FINANCIAL RATIOS:

Sr No	Ratio	Numerator	Denominator	FY 202425	FY 202324	% of Change	Reason For Movement
1	Debtors Turnover Ratio (Times)	Net Credit Sales	Average Trade Receivable	3.04	0.55	456.90%	In the FY 2024, the Trade receivable Ratio is reducing significantly since the company has improved its credit policy which reduces level of Trade Receivable outstanding at the end of the year.
2	Inventory Turnover Ratio (Times)	Cost of Goods Sold	Average Inventory	8.66	0.65	1235.44%	In the FY 2024 the Inventory turnover ratio increased as the company has achieved good turnover and controlled the Inventory level.
3	Interest Coverage Ratio (Times)	Earnings Before Interest and Taxes	Interest Expense	0.00	0.00	0.00%	NA
4	Current Ratio (Times)	Current Asset	Current Liabilities	7.37	7.32	0.72%	Increased in current in comparison of previous year
5	Debt Equity Ratio (Times)	Total Debt	Shareholders Equity	0.13	0.16	-18.69%	Due to repayment of unsecured loan
6	Return on Equity Ratio	Net Profit after Tax	Shareholders Equity	0.18%	1.70%	-89.36%	Return on Equity Ratio is increased as the turnover
							and the profit of the company has increased substantially.
7	Net Profit Ratio	Net Profit after Tax	Turnover	0.29%	10.13%	-97.16%	Net Profit Ratio is increased significantly because Revenue is increased & other fixed overheads are not increased in that proportion.
8	Return on Capital Employed	Earnings Before Interest and Taxes	Capital Employed = Tangible Net worth + Debt + Lease Liability	0.27%	2.30%	-88.13%	Return on Capital employed increased significantly because Revenue & Net Profit are increased.

CAUTIONARY STATEMENT:

The content in this Management Discussion and Analysis may contain Forward Looking Statements including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Companys future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, several risks, uncertainties, and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. The Company undertakes no obligation to publicly revise any forward- looking statements to reflect future/ likely events or circumstances.

For and on behalf of Board of Directors
PATRON EXIM LIMITED
Sd/-	Sd/-
Narendra Patel	Bhumishth Patel
Managing Director	Non-Executive Director
(DIN: 07017438)	(DIN:02516641)