Sanofi Consumer Healthcare India Ltd Management Discussions

Global Economy

The global economy remained stable during 2025 despite evolving trade regulations, regional growth divergences and geopolitical uncertainties. Increased investments in technology and supply chain adaptation helped offset the impact of emerging tariffs and changing policy environments, while global inflation moderated to 4.1%, with several economies reporting inflation levels below initial market expectations.

Against this backdrop, the global economy recorded GDP growth of 3.4% in 2025, with growth trends varying across regions. Advanced economies expanded by 1.9%, supported by 2.1% growth in the United States, while the euro area and Japan recorded growth of 1.4% and 1.2%, respectively. Emerging markets continued to outperform, registering overall growth of 4.4%, led by Indias 7.6% expansion and Chinas 5.0% growth.

The global economy is expected to maintain stable growth momentum, with world GDP projected at 3.1% in 2026 and 3.2% in 2027. Productivity improvements driven by technology adoption, including increasing integration of artificial intelligence across industries and healthcare, expected to support economic activity despite continuing geopolitical and trade-related uncertainties.

Advanced economies are projected to record growth of 1.9% in 2026, led by the United States with estimated growth of 2.3%, supported by fiscal measures, improving market conditions and recovery in economic activity. The euro area is expected to maintain stable growth of 1.1%, while Japans growth is projected at 0.7% following recent policy adjustments.

Emerging markets are expected to continue outperforming developed economies, with growth projected above 3.9%. China is expected to record 4.4% growth in 2026 supported by domestic stimulus measures and improving trade conditions, while India is expected to remain one of the fastest-growing major economies, supported by manufacturing expansion and ongoing digital transformation initiatives.

Global headline inflation is projected to rise to 4.4% in 2026 before moderating to 3.7% in 2027 amid continuing are geopolitical developments and supply-side pressures. Central banks across major economies are expected to continue calibrated policy measures, including gradual rate adjustments to support growth while managing inflationary trends. Meanwhile, global trade growth is projected to moderate to 2.6% in 2026, although technology-led exports are expected to continue supporting trade activity. (Source: World Economic Outlook (IMF), WEO- April (IMF))

Indian Economy

The Indian economy demonstrated resilient growth during FY 2025-26 despite global trade uncertainties and market volatility. As per the Second Advance Estimates, real GDP growth stood at 7.6%, while Gross Value Added (GVA) expanded by 7.7%, supported by strong domestic demand and broad-based economic activity.

Geopolitical developments continued to influence the entire global trade and economic activities during the year. Ongoing tensions in West Asia affected energy markets, trade routes and supply chains, resulting in increased and market stability.concernsaround Simultaneously, the Russia-Ukraine conflict continued to impact crude oil prices, commodity availability and global logistics networks. These developments contributed to and created operational challenges for businesses dependent on imported inputs, international sourcing and cross-border supply chains. Higher procurement and freight costs, delays in cargo movement and supply disruptions remained key concerns across industries during the year.

India continued to remain one of the worlds fastest-growing major economies, supported by resilient domestic demand, strong investment activity and ongoing structural reforms. Latest estimates indicate that India slipped from the 4th-largest to the 6th-largest economy globally, with a nominal GDP of approximately $4.15 trillion in 2026. The country is expected to sustain its growth momentum and improve its global standing over the medium term as economic expansion continues.

Private consumption remained a key driver of growth during the year, supported by moderating inflation and rising real incomes, which strengthened household purchasing power. The Union Budget 2026-27 proposed capital expenditure of 12.2 lakh crore towards infrastructure development, providing impetus to sectors such as manufacturing, construction and energy. Government initiatives, including the Viksit Bharat 2047 vision, continued to support self-reliance and long-term capacity creation amid evolving global challenges.

Headline Consumer Price Index (CPI) inflation averaged 1.7% during the first nine months of FY 2025-26, reflecting a relatively stable inflation environment. However, inflationary pressures arising from global developments resulted in CPI inflation reaching 3.4% as of March 2026. The banking sector remained resilient during the year, supportedbyhealthycapitalbuffers, lower non-performing assets and steady credit growth. In addition, foreign exchange reserves exceeding US$700 billion continued to strengthen Indias ability to manage external volatility and global economic uncertainties.

(Source: PIB, PIB 2, MoSPI)

Outlook

The outlook for the Indian economy remains positive and stable, with real GDP growth projected between 6.8% and 7.2% for FY 2026-27. This trajectory underscores Indias capacity to sustain robust momentum amid prevailing global uncertainties.

Sustained government infrastructure expenditure, alongside steadily rising private sector investments, will anchor this expansion, complemented by a strengthening manufacturing foundation. The services sector anticipates continued consistent performance, reinforcing structural economic resilience.

Reinforced by macroeconomic stability and consistent policy frameworks, India stands well-positioned to navigate external challenges. This approach ensures inclusive and sustainable long-term economic progress across diverse societal segments.

(Source: PIB)

Industrial Overview

Indias consumer healthcare industry continued to witness steady expansion during 2025, supported by rising health awareness, increasing preventive healthcare adoption, improving disposable incomes and expanding digital access to healthcare and wellness products. The industry landscape continued to evolve beyond traditional over-the-counter (OTC) products, with increasing consumer preference for vitamins, dietary supplements, nutraceuticals, functional foods, preventive wellness solutions and Ayurveda-based offerings.

Consumer behaviour during the year reflected a gradual shift from reactive treatment-led consumption towards preventive and lifestyle-oriented healthcare spending. Increased adoption of diagnostics, teleconsultations and digital health platforms contributed to higher awareness regarding nutritional deficiencies and wellness management, supporting demand across vitamins, immunity boosters and dietary supplements.

(Source: Euromonitor)

Growth in Nutraceuticals and Dietary Supplements

India remained one of the fastest-growing markets for nutraceuticals and preventive wellness products during the year. According to industry estimates, the Indian nutraceuticals market was valued at approximately $38.77 billion in 2025 and is projected to continue growing at a healthy pace over the medium term, driven by rising health consciousness, urbanisation and increasing prevalence of lifestyle-related diseases. Functional foods and beverages accounted for the largest share of the market, reflecting changing consumer preferences towards convenient health-focused consumption formats.

(Source: Grand View Research)

Demand for dietary supplements and wellness products continued to strengthen during the year, particularly across immunity, weight management, digestive health and personalised nutrition categories. The growing incidence of lifestyle disorders such as diabetes, obesity and cardiovascular conditions continued to support preventive healthcare consumption trends. In addition, increasing preference for plant-based, natural and Ayurveda-inspired products remained a key industry theme, supported by consumer inclination towards clean-label and traditional wellness solutions.

The vitamins and dietary supplements category retained its leadership position within the consumer healthcare segment during 2025. Industry estimates indicate that the Indian vitamins market reached approximately $1.5 billion in 2025, supported by growing adoption of nutritional supplementation, rising wellness awareness and increasing demand for immunity-focused products. Over-the-counter (OTC) drugs are forecast to reach $6,592.73 million by 2034 from $4,110.51 million in 2025 (CAGR 5.5% during 2026-2034), reflecting strong gains from rising incomes and e-commerce access.

India is the worlds largest supplier of generic medicines, accounting for approximately 20 per cent of global supply. The country manufactures around 60,000 generic brands across 60 therapeutic categories.

(Source: Imarcgroup, Deep Market Insights, PIB)

Digital Channels and E-commerce Expansion

Digital platforms and e-commerce channels continued to play an important role in industry growth, improving accessibility and product penetration across Tier II and Tier III markets. Companies increasingly focused on direct-to-consumer engagement, digital marketing and personalised wellness offerings to strengthen consumer reach and retention. The expansion of organised retail, online pharmacies and health-tech ecosystems also supported category growth during the year.

Regulatory Support and Competitive Landscape

Government focus on healthcare access, nutrition and preventive wellness, along with evolving regulatory frameworks by the Food Safety and Standards Authority of India (FSSAI), continued to support industry formalisation and consumer confidence. At the same time, the sector witnessed increasing participation from pharmaceutical companies, FMCG players and digital-first wellness brands, intensifying competition across product categories and distribution channels.

Despite a favourable long-term outlook, the industry continued to face challenges arising from raw material cost volatility, regulatory scrutiny, product standardisation requirements and heightened competitive intensity. Companies also remained focused on product innovation, scientific validation and brand differentiation to strengthen consumer trust and sustain growth in an increasingly competitive market environment.

Evolving Consumer Healthcare Landscape

The global operating environment continues to remain volatile, marked by geopolitical uncertainties, supply chain disruptions and inflationary pressures across markets. These developments have impacted procurement cycles, input costs, logistics networks and overall business planning across industries, including the consumer healthcare sector. Despite these near-term challenges, the Indian consumer healthcare market continues to offer significant long-term growth opportunities driven by increasing health awareness and rising focus on self-care and preventive wellness.

India continues to witness substantial under-penetration across several consumer healthcare categories, creating a large opportunity for improving healthcare awareness, accessibility and treatment adoption. Industry estimates indicate that nearly 70-80% of the Indian population is Vitamin D deficient, while around 30-40% suffer from allergy-related conditions, although awareness and treatment levels remain relatively low. This gap between healthcare needs and consumer awareness presents a significant opportunity for companies operating in the self-care and preventive healthcare space.

Against this backdrop, the Company remains focused on improving access to consumer healthcare solutions and simplifying healthcare adoption for consumers through awareness-led initiatives, accessible product offerings and a consumer-centric approach.

Growth Drivers of the Indian Consumer Healthcare Industry

G rowing incidence of lifestyle-related diseases, including diabetes, obesity and cardiovascular disorders.

Rising health awareness and increasing focus on preventive healthcare and wellness.

Increasing disposable incomes and improving healthcare spending across urban and semi-urban markets.

Expanding demand for nutraceuticals, dietary supplements, functional foods and immunity-boosting products.

Growing consumer preference for natural, herbal, Ayurveda-based, and personalized wellness solutions is driving demand across healthcare and nutrition categories.

Growing reach of online and organized retail channels is increasing product accessibility and supporting deeper market penetration across India.

Supportive government initiatives promoting healthcare access, nutrition and preventive wellness.

Increasing participation by pharmaceutical, FMCG and digital-first brands is driving product innovation and market expansion.

Company Overview

Sanofi Consumer Healthcare India Limited (also referred to as ‘SCHIL or ‘the Company) was incorporated on 10th May 2023. This marked a pivotal step in the global strategy of Sanofi to establish a dedicated Consumer Healthcare entity. Following the successful demerger from Sanofi India Limited, the Company was established to empower consumers through accessible and effective self-care solutions.

The Company reached a major milestone with its listing on the Bombay Stock Exchange and the National Stock Exchange on 13th September 2024. Throughout 2025, the Company moved beyond its initial listing to achieve full operational maturity as an independent business. A significant development in the global structure occurred in 2025 as the parent group entered a strategic partnership with Clayton Dubilier and Rice. This evolution has aligned the Company with a specialised global focus on consumer health while enhancing the agility of the Company to meet the specific needs of the Indian market.

The Company continues to evolve through a Fast-Moving Consumer Healthcare model. This approach combines the scientific trust of healthcare with consumer retail. The Company has built a strong distribution network that serves a wide range of channels, including wholesalers and government institutions, as well as modern pharmacy chains and e-commerce platforms. In 2025, the Company expanded its horizons by commencing export operations, which added a new international dimension to the growth strategy of the Company.

Guided by the principles of marketing excellence and business integrity, the Company is focused on redefining the self-care landscape in India. The core purpose of the Company is to enable healthier lives by offering high-quality and reliable healthcare solutions. Through digital innovation and a consumer-centric approach, the Company empowers individuals to take charge of their own well-being and navigate daily health concerns with confidence.

Product Portfolio

The Company offers a strong lineup of established brands addressing key everyday health needs. These products carry decades of trust and reliability among consumers.

Allergy Relief

• Allegra: This leading allergy solution tackles symptoms like sneezing, runny nose, and itchy eyes. Its scientifically backed, non-drowsy formulation keeps users productive and comfortable all day. The portfolio spans Allegra, Allegra M, Allegra D, Allegra Nasal, and Allegra Nasal Duo.

• Avil: The only antihistamine available in an injectable format, providing effective treatment for a wide range of allergic conditions, including hay fever, drug rashes, allergic conjunctivitis, food allergies, respiratory allergies, and skin disorders. It also helps manage motion sickness, vertigo, nausea, and other symptoms associated with Menieres disease and inner ear disturbances.

Pain Care

Combiflam: A widely used pain relief option for headaches, toothaches, body aches, muscle pain, joint discomfort, and fever. Combining Ibuprofen and Paracetamol, it targets the chemical signals behind pain, fever, and inflammation.

Physical Wellness

DePURA: Available as DePURA Kids Drops and DePURA 60,000 IU. Following recalls in March and June 2023, DePURA 60K returned to market in January 2024

Following the product recalls in 2023, all affected brands, including Allegra, Combiflam and DePURA, were successfully reintroduced to the market, supporting portfolio recovery and strengthening the Companys position across key therapeutic categories.

Opportunities and Risks

Opportunities the speed and reach of

Product Innovation for Changing Consumer Needs:

Consumers increasingly seek solutions for targeted health issues, including immunity support, digestive health, mental well-being, and conditions linked to modern lifestyles. Businesses that consistently develop specialised, tailored products stand ready to gain significant market presence.

• Increased Awareness and Use of Self-Care Options:

Better availability of health-related information encourages more people to adopt self-care routines. Over-the-counter (OTC) remedies and at-home health management products enjoy growing popularity, creating strong demand for reliable offerings.

• Expansion of HCP & Retail Store Access: Healthcare professionals (HCPs) and retail stores are increasingly adopting e-commerce platforms to reshape how consumers discover, evaluate, and purchase health products. These digital channels enable brands to expand their reach indirectly through HCPs and stores while delivering customised experiences and fostering ongoing connections with customers via their online platforms.

Risks

The Company faces various business challenges, yet maintains a comprehensive risk management system designed for thorough identification, evaluation, and control of principal exposures. The primary risks appear below:

• Stringent Regulatory Environment: Indias pharmaceutical sector functions within a tightly controlled framework. Evolving domestic and global regulations, along with stricter requirements for clinical studies and novel drug creation, could constrain innovative efforts and hinder overall industry progress.

• Price Control and NLEM: Medications included in the National List of Essential Medicines (NLEM) fall under central government price regulation. Such listings impose financial strain on pharma firms, potentially eroding margins. Should the Company products enter the NLEM list, or if authorities adjust policies on pricing or distribution margins unfavourably, the Companys performance might suffer.

• Counterfeit and Sub-Standard Drugs: The pharmaceutical market contends with widespread problems of fake and inferior quality medicines. Circulation of these spurious products damages consumer confidence and undermines the credibility of the entire sector.

• Data Breaches and Cyber Threats: Pharmaceutical businesses handle critical information, encompassing confidential details on patented formulations, research breakthroughs, technological developments, and personal health data. This makes the industry particularly susceptible to cybersecurity incidents and unauthorised data access.

Key Strengths

• L eading Consumer Healthcare Player with Operations: The Company ranks among Indias top consumer healthcare firms, featuring powerhouse brands in allergy relief, pain management, and physical wellness categories, with strong brand equity among both healthcare professionals (HCPs) and consumers. The Companys streamlined and responsive business approach maximises these brands potential to deliver exactly what consumers need. Strategic collaborations with local production partners boost cost effectiveness, secure steady supply lines, and speed up product availability in the market. Consumer-oriented strategies, reinforced by powerful distribution across urban and rural channels, fuel consistent expansion throughout India.

• Compelling Growth Path with Robust Margins: The

Company consistently surpasses industry benchmarks with its strong performance record. Streamlined processes, a nimble organisational setup, and extensive channel partnerships allow the Company to sustain attractive profitability levels while pursuing ambitious growth targets.

• Consumer-First Engagement Approach: Building a truly customer-focused organisation remains central to the Companys philosophy, achieved through ongoing market insights, broad-reaching media campaigns, responsive complaint handling systems, and dedicated support initiatives. Generations of trust in the Sanofi name stem from cutting-edge product development and unwavering commitment to world-class quality and safety benchmarks. This foundation, paired with proactive stakeholder relationships, generates greater consumer engagement in modern retail outlets and pharmacy networks.

• Global Expertise Meets Market Insight: As an integral part of Sanofis worldwide Consumer Healthcare division, the Company draws on vast global resources in scientific research, product creation, and promotional excellence. The “India for India” philosophy enables seamless adaptation of international best practices to local realities, ensuring highly relevant strategies. Active collaboration with regulatory bodies further positions the Company to influence the evolution of OTC guidelines in the country.

• Seasoned Leadership and Governance: The professional leadership team and Board of Directors collectively offer more than two decades of expertise spanning consumer healthcare, corporate strategy, financial management, sales operations, brand building, mergers and acquisitions, and project execution. Emphasising diversity and rapid responsiveness, this group empowers swift, localised decisions that capitalise on emerging opportunities and enhance customer satisfaction.

Financial Overview

Financial Performance FY 2025-26

(Rs In Million)

Particulars	FY 2025-26	FY 2024-25	YoY
Revenues	8,784	7,245	21%
EBITDA	3,188	2,434	31%
EBITDA Margin	36%	34%	-
Profit Before Tax (PBT)	3,203	2,468	30%
Profit After Tax (PAT)	2,401	1,810	33%

(Rs In Million)

Particulars	2025	2024
Operating Profit	35%	33%
Net profit Margin (%)	27%	25%
Debtors turnover ratio*	40.57	31.99
Current ratio*	3.85	3.00
Inventory Turnover Ratio*	4.48	2.71
Interest Coverage Ratio	NA	NA
Debt Equity Ratio	NA	NA
Return on Net worth (%)	73%	75%

*Increase in efficiency of operations

Strategic Pillars and Outlook

The Company shapes its future growth around five fundamental strategic pillars that reinforce its market leadership and ensure enduring success.

Scaling HCP Initiation

Healthcare professionals remain a critical driver of brand initiation across our portfolio. We significantly expanded our engagement with doctors and specialists, doubling our face-to-face doctor reach and extending our digital HCP engagement to over 50,000 healthcare professionals. By ensuring our brands are consistently present in the right medical conversations, we are strengthening the foundation of recommendation-led growth across allergy, pain and Vitamin D categories.

Deepening Consumer Engagement

As consumers take a more proactive role in health decisions, we stepped up our investment in direct, meaningful consumer communication. Through digital-first, multimedia campaigns reaching approximately 60 million consumers, we built awareness and encouraged responsible self-care across our core categories. Our award-winning DePURA Vitamin D awareness campaign is a strong example of how we are making healthcare simple, relatable and actionable for everyday Indians, addressing one of the countrys most widespread yet underdiagnosed health challenges. Combiflam further reinforced this commitment through targeted campaigns across pain and fever management, earning recognition for both content innovation and experiential marketing.

Improving Access and Distribution

Access remains central to our approach. By building a robust FMCH distribution network, investing in point-of-sale visibility and expanding presence across traditional trade, e-commerce and online platforms, we doubled our direct retail coverage. Our integrated go-to-market model ensures that trusted healthcare solutions are available and visible wherever consumers seek them.

Building a Future-Ready Organisation

We continued to invest in the capabilities that enable sustainable, long-term growth. We brought in best-in-class FMCH talent across frontline sales, brand management and alternate channels, and established a performance-driven culture anchored in clear KPIs spanning top-line growth, market share and profitability. Our proprietary One Touch platform equipped every field representative with real-time data and AI-led insights, enabling faster and sharper decision-making at the last mile. A lean, fully independent supply chain ensures operational resilience and consistency of supply across all categories.

Human Resources

Effective people management forms the cornerstone of the Companys progress and achievements. The Company cultivates a supportive and collaborative workplace culture where every team member feels appreciated and capable of making a full contribution. Ongoing training programs and interactive employee initiatives help sharpen skills and build professional strengths. As of 31st December 2025, the Company employed a total of 597 individuals.

For more details on human resources, please refer to the ‘People & Culture chapter on page 26.

Internal Control Systems and their Adequacy

The Company has established a comprehensive internal control system commensurate with the size and complexity of its operations. These controls ensure a reasonable assurance regarding the accuracy of financial reporting, compliance with applicable laws and requirements, protectionand use of assets and resources, and adherence to policies and procedures.

The Audit Committee of the Board regularly reviews the audit findings presented by the Internal Audit department, covering all risks, including operational, financial, strategic, technological, etc. The systems are regularly tested for effectiveness by the statutory and internal auditors. Regular reviews and Audit Committee oversight ensure timely corrective actions and adherence to regulatory requirements.

Cautionary Statement

Certain statements in the above Report may be forward-looking and are stated as required by the legislation in force. The actual results may be affected by many factors that may be different from what is envisaged in terms of future performance and the outlook presented above.