Samsrita Labs Ltd Management Discussions

OVERVIEW:

Samsrita Labs Limited is embarking on a pivotal strategic diversification, expanding beyond its traditional healthcare services. This deliberate move aligns with the companys broadened objects clause, enabling ventures into highly innovative and growth-oriented sectors. The company is actively exploring new domains, particularly Deep Technologies and Green Technologies (such as renewable energy, advanced waste management, EV Technology comprehensive environmental solutions, and sustainable materials). This expansion is strategically timed to capitalize on emerging market opportunities and technological advancements that are central to global sustainability and digitization trends. A key component of this strategic blueprint involves acquiring and investing in established businesses within these targeted sectors. These acquisitions are structured to secure a controlling interest, allowing Samsrita Labs Limited to significantly influence the direction and operations of the investee entities. Complementing this, the Companys associate, Krisani Bio Sciences Private Limited, is actively engaged in research and holds granted patents, with ongoing efforts to commercialize these through sales or out-licensing opportunities.

In a recent development underscoring this diversification, Samsrita Labs Limited acquired a 28.62% stake in M/s QROPS Advisory Services Private Limited (QROPS), Hyderabad. This was achieved through a share swap model, allotting 20% of Samsrita Labs Limiteds shares to make QROPS an Associated Company. QROPS is a specialized consulting firm dedicated to empowering Micro, Small, and Medium Enterprises (MSMEs) in capital structure, expanding operations, and attracting investments from High-Net-Worth Individuals (HNIs), Venture Capital (VC) firms, Private Equity (PE) funds, Family Offices, and retail investors. The promoters and team at QROPS bring extensive experience and a proven track record in financial advisory and capital structuring, providing a synergistic asset for Samsrita Labs Limiteds broadened focus.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Indian Pharmaceutical Industry, traditionally dominated by generic drug manufacturing, is undergoing a significant transformation. While generics remain a stronghold, theres a discernible shift towards greater emphasis on Research and Development (R&D) in new drug discovery and advanced research areas. This renewed focus has been accelerated by global events like the COVID-19 pandemic, prompting both large Indian pharmaceutical companies and global players (through acquisitions and joint ventures in India) to prioritize innovation. The Government of India is actively supporting this shift through various incentives and policies aimed at fostering R&D and enabling Indian pharma to compete effectively on the global stage. The industry is moving towards a model where generic manufacturing prowess is complemented by innovation in novel therapies, biosimilars, and biologics, unlocking greater value in the global market.

INDIAN PHARMACEUTICAL INDUSTRY:

The Indian pharmaceutical industry holds a formidable position globally, ranking third largest by volume and 14th by value. It is the largest exporter of generic drugs worldwide. India also boasts the highest number of USFDA-approved manufacturing facilities outside of the USA, underscoring its commitment to quality and regulatory compliance. The Current Market Size (2024): Approximately US$58 billion. The industry is projected to reach US$120-130 billion by 2030 and US$400-450 billion by 2047, demonstrating a robust growth trajectory. CAGR (2024-2030): The Indian pharmaceutical manufacturing market is estimated to grow at a Compound Annual Growth Rate (CAGR) of 10.5% from 2024 to 2030, reaching US$35.38 billion by 2030 for manufacturing alone.This growth is driven by rising lifestyle diseases, an aging population, increased focus on holistic health, growing consumerization of healthcare, and the emergence of new therapies for chronic conditions.

DEEP TECHNOLOGIES:

Deep technologies, encompassing AI, Machine Learning, and Blockchain, are poised for transformative growth in India. The Indian deep tech startup ecosystem has been expanding rapidly, with over 1,600 startups and a total market size estimated at US$14 billion. This segment has witnessed over 40% CAGR growth over the past four years, with the number of startups leveraging deep tech increasing 3.5 times since 2017.

The Indian government is actively supporting deep tech growth, but challenges remain, including longer gestation periods for deep tech ventures and a need for more patient capital. However, the confluence of talent, government support, and increasing investor interest bodes well for the future of deep tech in India.

GREEN TECHNOLOGIES:

Indias commitment to sustainability is driving significant growth in the green technology sector. The India green technology and sustainability market size reached US$837.2 million in 2024 and is projected to surge to US$8,603.2 million by 2033, exhibiting a remarkable CAGR of 27.36% during 2025-2033. This growth is fueled by government initiatives to conserve natural resources and reduce emissions, alongside increasing industry recognition of the importance of sustainable practices for long-term economic viability. Technologies like IoT, Cloud Computing, AI, and Blockchain are being integrated into green solutions.

Advanced Waste Management:

The Indian waste management market is a critical area within green technologies. Valued at an estimated US$32.81 billion in 2024, it is expected to reach US$36.68 billion by 2029, growing at a CAGR of 2.25%. Despite its immense potential, the sector faces challenges: only 30% of the 75% recyclable waste is currently recycled, and inefficient infrastructure and policies contribute to poor waste management.

Indias total waste production is projected to increase from its current annual rate of 62 million tons to a staggering 162 million tons by 2030. Hazardous, plastic, e-waste, and biomedical waste are also expected to rise proportionately. The governments push for improved urban sanitation and cleanliness, as evidenced by programs like Swachh Survekshan, is driving improvements in waste management practices at the municipal level, particularly in areas like door-to-door garbage collection and source segregation. Samsrita Labs Limiteds foray into waste management within green technologies indicates a recognition of this critical environmental and economic opportunity.

OPPORTUINITIES AND THREATS:

OPPORTUNITIES:

The Indian Pharma Industry has high potential at least in the coming one decade. The Indian Government also encouraging Pharma Industry in multiple angles. The Indian pharmaceutical industry holds a formidable position globally, ranking third largest by volume and 14th by value. Global Pharma companies looking forward to associate with Indian pharma companies both in manufacturing and research.

Advanced Waste Management is rapidly evolving sector in India with significant growth potential. This escalating waste generation, coupled with a growing focus on circular economy principles, presents significant opportunities for innovation. Numerous startups are emerging with inventive solutions for waste collection, segregation, treatment, and conversion of waste into valuable resources (e.g., waste-to-energy, recycling plastic and agricultural waste into eco-friendly products).

THREATS:

Samsrita Labs primary focus on pharma including research and development may face several challenges such as human capital risk, risk of failure or delay of R&D , changing global geo political situations, national policy decisions etc.

Advanced Waste Management involves High Upfront Capital Investment, Regulatory & Policy Uncertainty/Inconsistency, Fluctuating Commodity Prices (for Recycled Materials), Technological Obsolescence & R&D Costs, Public Acceptance and "Not In My Backyard" (NIMBY) Syndrome, Waste Composition Variability, Competition from Traditional Landfilling, Lack of Skilled Workforce, Cybersecurity Risks etc.,

All Pharma, Advanced Waste Management sectors are driven by global sustainability goals and technological innovation. However, navigating these threats will be crucial for their long-term success and widespread adoption.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE: Not Applicable

FINANCIAL RATIOS:

FINANCIAL RATIOS:
RATIOS:
Particulars	2024-25	2023-24	Remarks
Debtors turnover ratio	-	-	-
			-
Inventory turnover ratio	-	-
Interest coverage ratio	-	-	-
Current ratio	1.59	1.72	The company should focus on increasing sales turnover to improve efficiency.
Debt equity ratio	0.20	0.17	The company should monitor its debt-equity ratio to ensure the increase in debt supports sustainable growth while maintaining a healthy balance.
Operating profit margin (%)	-	-	-
	-
Net profit margin (%)		-	- Decrease in Net Profit
Return on Net worth	-1.75	-1.69

RETURN ON NET WORTH:

There is a change in the Return on Net Worth which is at -1.75% for the Financial Year 2024-25 as compared to immediately previous year 2023-24 which was at -1.69%. Reasons for decrease in Net Profit on account of decrease in other expenses.

DISCLOSURE OF ACCOUNTING TREATMENT:

Financial Statements are prepared as per Ind AS duly following the principles laid in the Ind AS. Management has not adopted any other standards other than the prescribed Accounting Standards in preparing the financial statements.

OUTLOOK:

The overall outlook for Samsrita Labs Limited is one of significant strategic transformation and growth. The Indian pharmaceutical industry remains a bedrock of strength, with strong global standing in generics and a burgeoning focus on R&D for high-value products. This provides a stable platform for the companys existing operations.

The strategic diversification into Deep Technologies and Green Technologies positions Samsrita Labs Limited at the forefront of two of the most impactful and rapidly growing sectors globally. The substantial market sizes and high growth rates projected for these domains in India offer immense opportunities for new revenue streams, technological innovation, and competitive advantage. The acquisition of a stake in QROPS further strengthens the companys financial ecosystem by tapping into the robust MSME funding landscape and establishing connections with a wide range of investors, providing potential future investment opportunities and a diversified revenue stream from advisory services. Samsrita Labs Limiteds integrated approach, combining its established pharmaceutical expertise with strategic ventures into cutting-edge technologies and sustainability solutions, is well-aligned with national and global trends towards digitization, innovation, and environmental responsibility. This diversified portfolio aims to create a resilient and high-growth enterprise, capable of delivering sustained value to its shareholders.

RISKS AND CONCERNS:

The Company is committed to conducting business in accordance with all applicable statutory laws and regulations, and pursuing its core organizational values. The company is going to frame its business model to minimize the risks by diversifying its areas of operation and focus on generating continuous revenue generation apart from its focus on high value creative technology and research areas. While the diversified business model presents significant opportunities, Samsrita Labs Limited acknowledges and actively manages inherent risks:

Samsrita Labs Limited operates in highly regulated environments, particularly in pharmaceuticals, deep technologies, and green technologies. Significant regulatory changes, such as those expected focusing on upgraded manufacturing facilities, enhanced quality control, stringent documentation mandates, and ethical marketing practices, necessitate continuous adaptation, substantial capital expenditure, and comprehensive employee training. Non-compliance could lead to penalties, operational disruptions, and reputational damage. Research and development, especially in new drug discovery and deep technologies, inherently carries the risk of failure or significant delays. Long gestation periods, high investment requirements, and the uncertain nature of innovation can impact financial performance and return on investment. The other risks may include Human Capital Risk, Strategic Co-development and Acquisition Risks, Market Volatility and Competition Market Volatility and Competition, Economic and Geopolitical Landscape, Cybersecurity Risks.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Samsrita Labs Limited strongly believes that a robust internal control mechanism is a prerequisite to ensure that an organization functions ethically, complies with all legal and regulatory requirements and observes the generally accepted principles of good corporate governance. To enable this, the Company has established a strong internal control system for the Company, which is comprised of policies, guidelines and procedures to ensure the orderly and efficient financial and business conduct.

Samsrita Labs Limited has adopted strong internal control systems backed by constant reviews and upgradation. Internal Audit, Statutory Audit by external agencies and the Audit Committee, look into the internal control aspects and further advice on the corrective measures as and when required.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The management discussion and Analysis given below relates to the Audited Financial Statements of Samsrita Labs Limited. The discussion should be read in conjunction with the financial statements and related notes for the year ended 31st March 2025.

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

Samsrita Labs Limiteds employees are the backbone of the Company. It is their knowledge, scientific skills and innovative capabilities that enable Samsrita Labs Limited to harness the power of science and serve its clients. Samsrita Labs Limited recognizes that an inclusive culture which promotes diversity, ethics and integrity is crucial. Through a range of HR- led initiatives, we offer customized training programs to enhance the staffs scientific and leadership skills with special attention to collaborative learning amongst the several teams.

SUMMARY:

Samsrita Labs Limited is embarking on a pivotal strategic diversification, expanding beyond its traditional healthcare services. This deliberate move aligns with the companys broadened objects clause, enabling ventures into highly innovative and growth-oriented sectors. The company is actively exploring new domains, particularly Deep Technologies and Green Technologies (such as renewable energy, advanced waste management, comprehensive environmental solutions, and sustainable materials). This expansion is strategically timed to capitalize on emerging market opportunities and technological advancements that are central to global sustainability and digitization trends

CAUTIONARY STATEMENT/ DISCLAIMER CLAUSE:

Certain statements in the Management Discussion and Analysis describing the Companys objectives, predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, new regulations and Government policies that may impact the Companys business as well as its ability to implement the strategy. The Company does not undertake to update this statement.

	For and on behalf of the Board of
	Samsrita Labs Limited
	Sd/-
	Krishnam Raju Kalidindi
Place: Hyderabad	Chairman and Whole-Time Director
Date: 18.07.2025	(DIN: 00874650)