Remedium Lifecare Ltd Management Discussions

Macroeconomic Overview Global Growth Outlook

The past four years have tested the resilience of the global economy. A high impact pandemic, escalating geopolitical conflicts, and extreme climate events have disrupted supply chains, caused energy and food crises, and prompted governments to take unprecedented actions to safeguard lives and livelihoods. While the global economy has demonstrated resilience, this stability masks uneven regional recoveries and persistent fragilities. As per the Global Economic Prospects Report (January 2025), global growth stabilised at an estimated 2.7% in 2024 and is expected to maintain this pace through 2025-26. As inflation nears target levels and monetary easing bolsters economic activity, both advanced and emerging market and developing economies (EMDEs) are poised for steady expansion. Growth in advanced economies is projected to remain at 1.7% —below pre-pandemic trends, as a slowdown in the United States offsets modest recoveries in the Euro area and Japan. In China, subdued consumption and a prolonged structural slowdown are expected to further temper growth in 2025-26. Excluding China, EMDEs are set for a gradual acceleration, with growth strengthening from an estimated 3.5% in 2024 to an average of 3.8% in 2025-26, driven by monetary easing, recovering real incomes, rising domestic demand, and gradually expanding trade and industrial activity.

Overall, the post-pandemic global economic expansion is forecast to remain steady but subdued, with growth levels insufficient to fully offset the damage caused by several years of successive negative shocks—with the possibility of further headwinds from heightened policy uncertainty, growing trade fragmentation, slower-than-anticipated progress in inflation moderation, and weaker performance in major economies. Additional risks include escalating conflicts and geopolitical tensions and increasing extreme weather events driven by climate change.

On the upside, a faster-than-expected decline in inflation and stronger demand in key economies could drive global growth beyond current projections. In the United States, expansionary fiscal policy and resilient consumption— supported by strong household balance sheets—may lift growth above expectations. Similarly, in China, additional stimulus from policymakers could boost domestic demand, leading to a stronger-than-anticipated economic rebound.

Global health systems have demonstrated remarkable resilience amid the challenges of the pandemic, global inflation, and regional conflicts, while advancing the adoption of novel therapies and expanding overall usage. Medicine consumption and spending have surpassed pre-pandemic growth rates and are projected to remain significantly above those trends through 2028.

Global medicine spending, the amount spent purchasing medicines from manufacturers before off-invoice discounts and rebates, is expected to reach US$ 2.3 Trillion by 2028 - growth rate of 6-9% per year. Key drivers of growth through the forecast period include the contribution of new products and the impact of patent expiries, including the growing impact of biosimilars. Higher adoption of speciality medicines for treating chronic, complex or rare conditions in the developed markets and volume-driven growth in the pharmerging markets would also be key pillars of growth.

In FY 2023-24, the Indian pharmaceutical industry?s turnover reached approximately Rs.4,17,345 crore (~US$50 billion), reflecting ~10% growth over the prior year ETCFO.com Wikipedia .

Exports jumped to Rs.2,59,658 crore (~US$30.4 billion) in FY 2024-25 from Rs.2,43,119 crore (~US$27.8 billion) in FY 2023-24 IBEF . A McKinsey report indicates India met ~20% of global demand and towers over in US generic requirements (~40%) and UK (~25%)

Pharma recorded ~10% YoY growth in Q2, driven by strong performance both domestically (~9.8%) and in North America (~10.8%) The Economic Times ETPharma.com . Chronic therapies grew ~9% YoY, while acute therapies saw only ~4% growth The Economic Times .

The sector posted a 7.8% YoY growth for April 2025, with sales amounting to Rs.19,711 crore The Times of India+1 .

The PLI schemes for APIs, bulk drug parks, and medical devices are accelerating local manufacturing and reducing import dependency India Briefing LinkedIn Forbes . Macquarie projects India?s CRDMO (Contract Research, Development & Manufacturing Organization) sector could achieve ~Rs.1,21,282 crore (~US$14 billion) by 2028 IBEF .

India now has 748 US FDA-approved plants, 348 EU GMP-registered sites, and nearly 1,943 UK MHRA authorizations as of April 2024 ETPharma. com Wikipedia . The revised Schedule M, along with the upcoming PRIP (Promotion of Research & Innovation in Pharma) scheme, is driving digital transformation, biosimilars, mRNA vaccine development, AI-based drug discovery, and specialty drugs focus ETPharma.com .

The UCPMP 2024—India?s updated code for ethical pharmaceutical marketing—was enacted in March 2024, introducing stricter norms for promotions, sample distribution, gifts, CMEs, and transparency Wikipedia .

By mid-2024, ~14,080 Jan Aushadhi stores were operational nationwide, supplying affordable generics and driving access and affordability Wikipedia .

Remedium Lifecare Limited is engaged in the business of trading in Advanced Pharmaceutical Intermediates, Active Pharmaceutical Ingredients (API?s) and other pharma products used viz. Iso propyl Alcohol (IPA) ,Cyclohexane, DI Iso Propyl Amine (DIPA), Ethyl Acetate, Hydrazine Hydrate, Iso propyl Alcohol (IPA), Methylene Di Chloride, Potassium Carbonate Powder, Sodium Bi-Carbonate, Potassium Hydroxide Flakes, Sodium Chloride (Common Salt), Sodium Carbonate (SODA ASH), Amino isophthalic Acid, Tellurium(IV) Oxide, Grignard Reagent, Iodine, Selenium Metal Powder, Trimethyl Sulfoxonium Iodide (TMSI).

• Total Income (Consolidated) fell sharply from Rs.4,06,278.78 lakhs in FY 2024 to Rs.41,605.37 lakhs in FY 2025, indicating a major decline in operating scale.

• Profit After Tax (PAT) also dropped significantly from Rs.3,273.02 lakhs in FY 2024 to just Rs.212.94 lakhs in FY 2025.

• The decline in profitability is largely attributable to:

o Higher finance cost (Rs.528.86 lakhs in FY 2025 vs Rs.387.30 lakhs in FY 2024).

o Increased other expenses and stock-in-trade adjustments.

o Substantial fall in other income (Rs.1,080.26 lakhs in FY 2025 vs Rs.2,108.11 lakhs in FY 2024).

o And company had a high voloum order in FY 2023-24 which company not able to received in FU 2024-25

Despite these challenges, the Company remained resilient by focusing on operational efficiencies, cost control measures, and strengthening vendor relationships.

• Rising domestic demand for affordable generics.

• Export potential with increasing acceptance of Indian pharma products.

• Government support through PLI, Jan Aushadhi scheme, and healthcare infrastructure expansion.

• Digital health and e-pharmacy penetration improving distribution

• Intense competition and price erosion in the generics segment.

• Dependence on imported APIs leading to cost fluctuations.

• Stringent regulatory and quality compliance requirements.

• Currency volatility affecting export realizations.

• Regulatory risks and compliance costs.

• Price erosion in generics leading to margin pressures.

• Volatility in foreign exchange rates impacting exports.

• Rising competition from both multinational and domestic players.

While FY 2024-25 witnessed a downturn in performance, your Company remains cautiously optimistic about the medium to long-term outlook. Strategic focus areas will include:

• Strengthening the product portfolio in chronic and specialty segments.

• Diversifying sourcing to mitigate API dependency risks.

• Enhancing operational efficiency through digitalization and supply chain optimization.

• Exploring new export markets and expanding the domestic distribution network.

The Company is committed to creating sustainable value for all stakeholders while navigating industry challenges with prudence and agility.

The Company operates primarily in pharmaceutical trading. During FY 2024-25, consolidated Total Income stood at Rs.41,605.37 lakhs as compared to Rs.4,06,278.78 lakhs in FY 2023-24. Profit After Tax (PAT) was Rs.212.94 lakhs, significantly lower than the Rs.3,273.02 lakhs reported in the previous year, primarily due to lower trading volumes, reduced other income, and higher finance costs.

The Company remains committed to improving operational efficiency, expanding its customer base, and diversifying its sourcing network. In the coming year, focus will be on:

• Strengthening distribution channels in domestic markets.

• Exploring export opportunities in regulated and semiregulated markets.

• Enhancing digital integration in trading operations for better supply chain visibility.

• Tightening cost control measures to improve margins.

Despite near-term challenges, the medium-term outlook for the Indian pharmaceutical sector remains positive, driven by healthcare demand, supportive government policies, and growing export potential.

• Regulatory Risk: Compliance with multiple domestic and international regulatory frameworks increases operational complexity.

• Market Risk: Price fluctuations in APIs and traded formulations can affect margins.

• Financial Risk: Foreign exchange volatility and rising interest costs impact profitability.

• Operational Risk: Supply chain disruptions can delay procurement and distribution.

The Company has a structured risk management framework to identify, evaluate, and mitigate risks in a timely manner.

The Company has in place adequate internal control systems commensurate with the size and nature of its operations. These systems ensure:

• Accuracy and reliability of financial reporting.

• Safeguarding of assets.

• Compliance with applicable laws and regulations.

• Efficiency of operations.

The Internal Audit team periodically reviews operations, and findings are presented to the Audit Committee for corrective action.

*Note - Deposit reflecting in "short term borrowing" are deemed deposit for advances received from customers. These deposit are interest free and have been ignored while calculating Debt-Equity Ratio.

The Company recognizes that its employees are its core strength. Continuous training, skill development, and employee engagement programs are undertaken to improve productivity. The Company also emphasizes ethical business practices, responsible sourcing, and compliance with ESG norms.

In FY 2024-25, the Company enhanced digital systems for compliance, strengthened vendor due diligence processes, and continued initiatives to reduce its carbon footprint across trading operations.

Certain statements made in this report relating to Company?s objectives, projections, estimates, and expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to global and domestic economic conditions, industry dynamics, regulatory changes, and other related factors.