Sanofi India Ltd Management Discussions

Economic Overview

Amid persistent global economic headwinds, India stands out as one of the fastest-growing major economies. According to the First Advance Estimates of Gross Domestic Product 2025-26, Indias GDP growth is projected at 7.4% in FY 2025-26, compared to 6.5% in FY 2024-25. Robust private consumption, tax reforms, and resilient manufacturing and services activity are supporting the growth trajectory.

Despite rising trade tensions and policy uncertainty, Indias economic outlook remains resilient, with growth estimated at 6.5% in FY 2026-27 and 6.6% in FY 2027-28. Key drivers include easing inflationary pressures, rapid infrastructure development and digitization, a recovery in exports and private investments, and favorable policy reforms, among others.

Sources: https://www.pib.gov.in/PressReleaseP age.

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https://economictimes.indiatimes.com/news/economy/

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Industry Overview

Indian Pharmaceutical Industry

The Indian pharmaceutical industry was valued at approximately USD 55 billion in 2025 and is expected to reach USD 120-130 billion by 2030, growing at a CAGR of 11-13%. Growth will be driven by a combination of expanding healthcare access, growing demand for treatments across both acute and chronic conditions, digital transformation, and continued reliance on affordable generic medicines.

India ranks as the third-largest pharmaceutical producer globally, by volume, and the 14 th largest by value, contributing around 1.72% to Indias GDP. The strength of the industry lies in its well-established generics ecosystem, cost-effective manufacturing, and a large pool of skilled scientists and engineers.

Indias pharmaceutical sector has a strong export presence, supplying medicines to over 200 countries worldwide, with the United States (US) being its largest export destination. Pharmaceutical exports have grown steadily from USD 15 billion in FY 2013-14 to USD 27.9 billion in FY 2023-24 and USD 30.47 billion in FY 2024-25. Generic drugs account for 20% of global exports in terms of volume, positioning the country as the largest provider of generic medicines globally.

Sources: https://www.pib.gov.in/PressReleseDetailm. aspxRsPRID=2205547®=3&lang=1

https://www.ibef.org/industry/indian-pharmaceuticals- industry-analysis-presentation - add this source

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India ranks as the third- largest pharmaceutical producer globally, by volume, and the 14 th largest by value, contributing around 1.72% to Indias GDP. - -

In the Union Budget 2026-27, the government launched the Biopharma SHAKTI (Strategy for Healthcare Advancement), with an outlay of 10,000 crore over the next five years, aimed at positioning India as a global hub for biopharmaceutical manufacturing and innovation. This initiative reflects the growing shift in Indias disease burden toward non-communicable diseases, such as diabetes, underscoring the importance of biologic medicines in improving patient outcomes.

Looking ahead, the Indian Pharmaceutical industry is poised for robust growth, with the market projected to reach USD 450 billion by 2047. This expansion will be supported by favorable government policies, rising prevalence of chronic diseases, increasing foreign investments, and a strong focus on the manufacturing of high-quality pharmaceutical products.

Growth Drivers Increase in Chronic Diseases

Rising incidences of chronic diseases such as hypertension, diabetes, respiratory ailments, and cardiovascular diseases on account of rapid urbanization, aging population, adoption of sedentary lifestyles, and poor dietary habits are expected to boost demand for pharmaceutical products.

Improving Affordability

Increasing income levels and affluence are prompting individuals to seek high-quality healthcare services, including better hospitals, medicines, and treatment.

Expanding Insurance Coverage

Health insurance penetration in India continues to deepen, supported by greater participation from private insurers and broader therapy coverage. The governments Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) health insurance scheme is driving healthcare access for patients.

Government Support and Incentives

Supportive government policies, such as the Production Linked Incentive (PLI) scheme, stringent quality and regulatory standards, and focus on chronic diseases, are further propelling the pharmaceutical industrys growth.

Company Overview About the Company

Sanofi India is amongst Indias leading multinational healthcare companies, offering a wide product portfolio spanning diverse therapeutic segments. Driven by continuous innovation, we are committed to improving peoples lives and delivering sustainable growth. Our offerings include products and solutions for diabetes (both insulins and orals), cardiology, thrombosis, epilepsy and infections.

For seven decades, we have been at the forefront of delivering high-quality, affordable medicines to patients across India. Our capabilities have consistently earned us the trust of both healthcare practitioners and patients in India and beyond.

Employee health and safety remains a core priority. The Company has implemented a comprehensive Health, Safety and Environment (HSE) Management System, supported by robust infrastructure, clearly defined operational procedures, continuous training and awareness programs, regular monitoring, and periodic reviews. Our safety framework includes ongoing risk assessments, internal and external audits, and managerial safety visits, creating a proactive safety culture where employees are encouraged to identify and mitigate potential risks.

Manufacturing Capabilities

The Company operates a cutting-edge manufacturing facility in Goa, equipped with advanced technologies and internationally accredited infrastructure. With an annual production capacity of 5 billion oral solid dosage forms, the facility is designed to promote safer and environmentally responsible working practices, supported by stringent quality systems.

The Goa facility operates under rigorous oversight from multiple global health authorities, Regierungsprasidium Darmstadt, TGA, UK-MHRA, WHO, Russian Health Authorities, NMRA - Sri Lanka, and others, ensuring top- notch product safety, quality and compliance. Digital advancements, including automated manufacturing processes, QR code integration and the elimination of physical leaflets, have been embedded across operations to enhance data integrity and efficiency.

The manufacturing operations at the Goa site are conducted in accordance with applicable local and global regulatory requirements. Environmental discharges are maintained within stipulated limits, and waste generated from manufacturing activities is managed and disposed of in accordance with local regulations and internal Sanofi guidelines.

Our manufacturing unit adheres to a zero-discharge policy, with wastewater treated in-house and reused for landscaping through an on-site effluent treatment plant. The Company has installed energy-efficient centrifugal chillers, which are projected to significantly reduce CO2 emissions.

We achieved a customer service level of 99.5% in 2025. The Goa site operates with closed-loop, highly automated systems that minimize manual material handling. These systems are continuously enhanced to strengthen Data Integrity Risk Assessment (DIRA) compliance, reduce manual intervention and ensure operational excellence. As a strategic sourcing hub for the Sanofi Group, the Goa facility is regularly evaluated for new opportunities in tablet formulations.

The Goa site ranks as the third most cost-competitive solid dosage manufacturing facility globally and among 35 sites in Asia. Since 2017, the facility has consistently maintained a competitive cost of Sanofi Manufacturing Unit (SMU). At USD 0.09 per unit in 2025, it has outperformed the top-quartile benchmark of USD 0.113 per unit by 20%. It also ranks in the top quartile globally for productivity, underscoring its operational efficiency and global competitiveness.

Operational Overview Operational Performance FY 2025 Diabetes Portfolio Market Overview

Diabetes has reached epidemic proportions in India, presenting significant public health challenges. According to the IDF Atlas Diabetes 11 th Edition (2025), India accounts for one in seven of all adults living with diabetes worldwide. The prevalence is projected to increase by 75%, from 90 million in 2024 to 157 million by 2050, underscoring the escalating burden of this chronic condition. Additionally, the Indian Council of Medical Research (ICMR) reports that 15.3% of the Indian population has pre-diabetes, highlighting the critical need for early intervention and comprehensive diabetes management solutions.

In response to this growing healthcare imperative, our diabetes portfolio comprises a comprehensive range of injectable therapies supported by high-quality manufacturing standards and specialized patient services. We remain committed to serving as a trusted partner for healthcare professionals, patients, and caregivers across Indias diverse healthcare landscape.

Source: https://www.thelancet.com/journals/landia/ article/PIIS2213-8587(23)00119-5/fulltext

Strategic Positioning and Market Presence

Our strategic approach integrates scientific initiatives, real- world evidence studies, and affordability-driven access strategies to reinforce our presence across both private and public healthcare sectors in India. This multi-pronged

approach ensures that our therapeutic solutions reach patients across various socioeconomic segments while maintaining clinical excellence and therapeutic efficacy.

Public Market

As government is working toward improving access for Indian population through its initiatives, Sanofi is also working toward providing access of Sanofi Insulins to government institutes. Public Market has been the growth driver in 2025 and will continue to be one of the strategic pillars for Sanofi.

Product Portfolio Performance Lantus® (Insulin Glargine 100 U/mL)

Lantus® continues to establish the gold standard for basal insulin therapy in India. Following its inclusion in the National List of Essential Medicines (NLEM) in 2023, the product has sustained strong momentum, driven by improved affordability and enhanced patient access. This regulatory milestone has significantly expanded our reach within the public healthcare system, enabling broader patient access to quality diabetes care.

Toujeo® (Insulin Glargine 300 U/mL)

Toujeo®, our second-generation basal insulin, demonstrated growth aligned with market in 2025 (IQVIA MAT December 2025). The product has garnered increasing clinical endorsements across both private and public healthcare sectors. Through targeted educational initiatives, Toujeo® continues to advance medical community understanding of Time in Range (TIR) and Glycemic Variability (GV), contributing to improved diabetes management paradigms in India.

Soliqua® (Insulin Glargine 100 U/mL + Lixisenatide)

Soliqua®, our fixed ratio combination therapy of insulin glargine, an insulin analog, and Lixisenatide, a glucagon- likepeptide-1(GLP-1) receptor agonist, represents a best-in-class injectable solution indicated for adults with insufficiently controlled Type 2 diabetes mellitus. The product achieved exceptional growth of 90% in 2025, reflecting strong clinician advocacy and patient acceptance of this innovative therapeutic approach to glycemic control.

Apidra ® (Insulin Glulisine)

Apidra ® , our rapid-acting insulin analog, recorded 13% growth in 2025, outperforming market growth rates (IQVIA MAT December 2025). This performance demonstrates continued physician confidence in the products clinical profile and its role in comprehensive diabetes management regimens.

Patient Support and Ecosystem Development

Patient Support Program

We recognize that effective diabetes management extends beyond pharmaceutical intervention to encompass patient education, awareness, and ongoing support. As

a responsible healthcare leader, we are committed to shaping and sustainably managing the diabetes ecosystem through comprehensive capacity and capabilitybuilding initiatives.

Our flagship Saath 7 program, Indias longest-running patient support initiative, impacts over 100,000 patients annually across India. The program provides evidence- based patient education and practical solutions designed to enhance patient understanding, improve treatment adherence, and optimize therapeutic outcomes. This sustained engagement reflects our commitment to longterm patient welfare and holistic diabetes management. In 2025, the Patients Solutions team achieved exceptional follow-up rates and industry-leading compliance rates, with 90 certified counselors across 45+ cities.

Digital Transformation and Stakeholder Engagement

Digital Health Initiatives

Our digital strategy enables seamless, multi-channel engagement with healthcare professionals, providing stakeholders with convenient access to medical information and educational resources in their preferred formats. Our keystone medical education programs have been comprehensively digitalized, offering key thought leaders, specialists, and practicing physicians interactive and accessible learning platforms that support continuous medical professional development.

Distribution Evolution

The healthcare distribution landscape in India is undergoing significant transformation, with the emergence of e-commerce platforms and modern trade channels reshaping traditional distribution models. We continue to adapt our commercial strategies to leverage these evolving channels, ensuring optimal product availability and patient access across diverse geographic and demographic segments.

Outlook

The diabetes portfolio remains strategically positioned to address Indias growing diabetes burden through innovative therapeutic solutions, comprehensive patient support programs, and adaptive commercial strategies. Our continued investment in scientific medical education, real-world evidence generation, and digital engagement platforms reinforces our commitment to improving diabetes care outcomes across Indias healthcare ecosystem.

Financial Overview

Revenue from Operations stood at 18,374 million for the year ended December 31, 2025, compared to 20,132 million in the previous year. Profit Before Tax and exceptional items stood at 4,720 million for the year ended December 31, 2025, as against 4,691 million in the previous year. Profit After Tax (PAT) increased from 3,137 million in 2024 to 3,267 million in 2025.

Financial Performance

Key Financial Ratios

Particulars	2025	2024
Operating Profit Margin (%)	25.02	22.72
Net Profit Margin (%)	17.78	15.58
Trade Receivables Turnover Ratio	9.04	11.13
Current Ratio	1.63	1.53
Inventory Turnover Ratio	2.21	1.68
Interest Coverage Ratio	NA	NA
Debt to Equity Ratio	NA	NA
Return on Net Worth (%)	59.58	50.31

Opportunities and Risks Opportunities

Expansion of Partnerships and Co-marketing Agreements

Partnerships and co-marketing agreements between Indian and global pharmaceutical companies have increased steadily in recent years. These collaborations facilitate knowledge exchange, resource sharing and access to new geographies, while enabling co-marketing of innovative therapies. Further, they support faster market entry for new brands and help enhance the reach and sales of established products.

Innovation and Digital Adoption

Rapid technological advancements are accelerating the adoption of advanced analytics and solutions across the pharmaceutical value chain. Growing use of digital technologies, such as telemedicine, artificial intelligence (AI), machine learning (ML), and data-driven platforms, is reshaping healthcare delivery and innovation. These technologies enable remote diagnosis, support personalized treatment pathways, and expedite drug discovery and development processes, creating new growth opportunities for the sector.

Risks

The major risks are listed below:

Pricing Risk

Pharmaceutical products listed in the National List of Essential Medicines (NLEM) are subject to price control by the government. This can result in pricing pressures and impact the margins and profitability of pharmaceutical companies.

Quality Risk

The proliferation of substandard or counterfeit drugs may pose quality risks and erode consumer trust in the industry.

Raw Material Risk

The pharmaceutical industry is susceptible to volatility in the prices and availability of raw materials, particularly active pharmaceutical ingredients (APIs) and intermediates. Factors such as inflation, changes in government policies, fluctuations in foreign exchange rates, and shifting demand and supply conditions can affect manufacturing costs and profit margins.

R&D Risk

Higher R&D investments can increase capital expenditure and impact the margins and profitability of the industry. The Company focuses on major therapy areas such as Diabetes, Cardiology, Thrombosis, Anti-infectives, and CNS. It relies on the Sanofi Groups R&D efforts and capabilities for the development and commercialization of new products.

Cybersecurity Risk

Pharmaceutical companies manage large volumes of sensitive data, including proprietary information about patented drugs, advancements in technologies, and patient records. This increases exposure to cybersecurity threats and data breaches, leading to loss of confidentiality, data integrity, and stakeholder trust.

Outlook

Indias pharmaceutical market is experiencing rapid growth, driven by rising healthcare awareness, expanding insurance coverage, increasing prevalence of lifestyle diseases, and a government committed to healthcare infrastructure development.

Regulatory Risk

The Indian pharmaceutical industry operates under a stringent regulatory framework. Evolving regulations governing clinical trials, product approvals and the development of new drugs may result in higher compliance costs, longer approval timelines and operational complexities, which may impact industry growth.

Sanofi India is poised to seize the opportunities in both domestic and international pharmaceutical markets. Sanofi India continues to prioritize key therapeutic areas, particularly diabetes, by combining product innovation, localization of supply chains and strategic partnerships. These initiatives are aimed at strengthening market presence, improving accessibility of therapies and enhancing long-term competitiveness in the Indian pharmaceutical landscape.

Human Resources

Our employees are vital to our continued growth and success. We strive to create a safe and inclusive work environment that empowers individuals to perform at their best. We place strong emphasis on employee engagement and development through structured recognition and reward mechanisms and continuous learning opportunities to enhance their skills and capabilities. As of FY 2025, the total employees at the Company stood at 1,104 (including contractual employees and workers). During the year, industrial relations across all operations remained harmonious.

Further details on Human Resources form part of the Social (Employees) chapter of the Integrated Report.

Internal Control Systems and their Adequacy

The internal control systems of the Company, configured within the ERP (SAP), are commensurate with the size and complexity of its operations. The framework is reinforced through standard operating procedures, clear delegation of authority, and segregation of duties across critical processes.

Regular reviews of the internal controls are conducted in line with the Audit Plan approved by the Audit Committee. Internal audit observations, along with recommended preventive action plans, are presented to the Audit Committee for review. Structured follow-up mechanisms ensure the timely implementation of identified actions.

Additionally, quarterly testing of key mandatory controls, including the Financial Control Framework (FCF), is undertaken to ensure the effectiveness of internal controls.

The internal control framework enables accurate recording and reporting of operational and financial transactions, safeguards Companys assets against loss or unauthorized use, mitigates emerging risks, ensures the reliability of financial information, and ensures compliance with applicable regulatory requirements.

The Internal Audit function follows a hybrid audit model, combining on-site and remote audits, tailored to business requirements and external conditions. This approach ensures comprehensive management oversight and effectiveness of key controls. Further, the progressive automation of monitoring controls through advanced tools has enhanced operational efficiency by reducing manual interventions and enabling teams to focus on strategic priorities.

The Audit Committee of the Board regularly reviews internal audit findings, encompassing operational, financial, strategic, technological and other risks.

Cautionary Statement

Certain statements in the above Report may be forwardlooking and are stated as required by the legislations in force. The actual results may be affected by various factors that differ from what is anticipated in terms of future performance and the outlook presented above.