Rekvina Labs Ltd Management Discussions

We are pleased to present the Management Discussion and Analysis Report on the operations and performance of the Company.

Overall Review

The Indian pharmaceutical industry continues to be one of the fastest-growing sectors of the Indian economy, recording consistent double-digit growth over the past few years. India remains a preferred global hub for cost-effective pharmaceutical manufacturing, supported by competitively low costs of Active Pharmaceutical Ingredients (APIs), robust manufacturing infrastructure, regulatory-approved facilities for both APIs and formulations, and an abundant pool of skilled manpower. These strengths remain the primary drivers of sustainable growth for the sector.

Rekvina Laboratories Limited is engaged in the manufacturing and marketing of pharmaceutical formulations, serving both domestic and international markets. The Company is committed to innovation, quality, and compliance, positioning itself as a reliable partner in the pharmaceutical value chain.

Strengths:

- Quality producer of pharmaceutical formulations, delivering products as per specific customer requirements. - Expertise in developing newer formulations through innovative and cost-effective manufacturing processes. - Ability to provide Contract Research and Manufacturing Services (CRAMS) to customers globally.

Weaknesses:

- Increasing competition within the industry.

- Rising costs of energy, solvents, and raw materials.

Opportunities & Threats:

Pharmaceutical companies that achieve excellence in manufacturing and develop cost-efficient synthesis routes have significant opportunities to partner in contract manufacturing and research services. With state-of-the-art and regulatory-compliant facilities, Rekvina Laboratories Limited is well-positioned to leverage these opportunities. However, fluctuating raw material prices, rising input costs, and regulatory challenges remain key concerns.

(c) Segment-Wise or Product-Wise Performance

At present, the Company operates in a single business segment, i.e., Pharmaceutical Formulations. Hence, separate segmental reporting is not applicable.

(d) Outlook & Future Strategy

The Company is focusing on strengthening its core business of manufacturing and marketing formulations. Research and Development (R&D) initiatives have been accelerated to improve cost competitiveness and ensure compliance with global regulatory requirements. Cost optimization, efficient resource utilization, and strong management control are being emphasized across all operations.

With a strong resource base and a clear vision to become a leading manufacturer in selected therapeutic areas, Rekvina Laboratories Limited is well-prepared to capitalize on emerging opportunities and meet industry challenges.

(e) Risks and Concerns

The Company?s profitability has been adversely affected due to fluctuations in raw material prices and the burden of high finance costs. Measures such as cost reduction, capacity optimization, and job work activities are being pursued to improve margins and strengthen financial performance.

(f) Internal Control Systems and Adequacy

The Company has initiated steps to implement a robust internal control framework commensurate with its scale and nature of operations. The controls are designed to ensure optimal utilization and safeguarding of resources, adherence to policies and statutory compliance, and effective risk management. Periodic reviews and audits are undertaken to assess and strengthen these systems.

(g) Human Resources

The Company recognizes employees as its most valuable assets. Focused initiatives on training, development, and employee engagement are undertaken at all levels. These efforts have enabled the Company to retain talent, boost morale, and maintain a motivated workforce during challenging times.

(h) Financial Performance

A detailed financial analysis of the Company?s performance for the year under review is provided in the Board?s Report, and is not repeated here for the sake of brevity.

(i) 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 therefore

(j)Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof

The Company reported a Net Loss of 13.71 lakhs in FY 2024-25 as against a Net Loss of 1.64 lakhs in FY 2023-24. Total Expenses increased from 1.64 lakhs in FY 2023-24 to 13.71 lakhs in FY 2024-25, primarily on account of higher employee benefit expenses and other operating costs. Consequently, the Return on Net Worth deteriorated further during FY 2024-25, reflecting the continued negative net worth position of the Company.