Shree Ganesh Remedies Ltd Management Discussions

Global Economic Review

in 2024, the global economy expanded by 3.3%, underpinned by recovering activity across several regions and a stabilisation of inflationary pressures. This improvement was aided by enhanced supply chain efficiencies and lower energy and food prices, collectively supporting overall economic performance. Nevertheless, the external environment continues to be shaped by evolving trade dynamics and ongoing policy recalibrations among key economies. The imposition of new tariffs by the United States, alongside reciprocal measures from trading partners, has led to significant shifts in global trade flows. These policy adjustments have introduced new challenges, influencing growth trajectories and necessitating close monitoring of their effects across regions and sectors.

Advanced economies achieved steady progress, with the United States recording growth of 2.8% in 2024. Overall, advanced economies grew by 1.8%, led by robust services sectors and persistent efforts to manage inflation, in spite of restrictive monetary policies, trade-related frictions, and tempered demand expansion. in the euro area, growth is projected at 0.8%, reflecting similar conditions and the sustained impact of tighter policy settings. Emerging market and developing economies registered growth of 4.3%, notwithstanding volatility in commodity markets. india, distinguished by resilient domestic demand, a growing working-age population, and continued digital transformation, is expected to sustain strong economic momentum. Chinas growth, by contrast, is moderating due to persistent trade tensions and shifting global circumstances.

For 2025, global growth is projected to moderate to 2.8%, attributed primarily to ongoing trade frictions and the continuation of restrictive policy measures. Heightened geopolitical uncertainties and evolving supply chain patterns present additional headwinds. A gradual recovery is anticipated for 2026, with growth forecast at 3.0%, subject to improving policy clarity and a more stable geopolitical outlook.

Indian Economic Review

The Indian economy is projected to grow by 6.5% in FY25, following a robust 9.2% outcome in FY24. This moderation primarily reflects heightened global trade uncertainties, including the introduction of new tariffs on indian exports by the United States, alongside a subdued trend in private sector investment. Despite a more challenging external environment, domestic economic conditions have demonstrated resilience, supported by strong consumption, favourable monsoon expectations that are likely to boost agricultural prospects, and sustained momentum within the services sector.

indias inflation rate declined to 3.34% in March 2025, which marks a five-year low. This easing is attributed largely to a moderation in food inflation, which registered at 2.69% during the same period. Additionally, inflationary pressures in the housing and fuel segments moderated, further contributing to overall price stability. The Reserve Bank of India responded to the benign inflation outlook with two consecutive reductions in the benchmark repo rate, bringing it to 6.0%. These policy measures have enhanced the central banks capacity to support economic growth, while maintaining vigilance on price stability.

From a sectoral perspective, the manufacturing landscape is experiencing renewed momentum, facilitated by improved capacity utilisation and a favourable policy climate. Although certain segments remain exposed to uncertain external trade dynamics and margin pressures, resilient domestic demand has emerged as a key growth driver. Advancements in logistics, incentives for value-added production, and an acceleration of infrastructure investment, particularly in consumer goods and light manufacturing, have supported industrial activity. Government initiatives and fiscal support have fostered optimism, with rising business confidence and stronger demand evident across manufacturing and infrastructure. The services segment continues to grow steadily, supported by robust demand conditions and favourable pricing.

The broader economys resilience is further illustrated by the performance of Goods and Services Tax. Gross GST collections reached ?22.08 lakh crore in FY25, which represents an increase of 9.4% over FY24. This upturn reflects both improved compliance and the underlying strength of consumption, particularly in segments that are less sensitive to discretionary cycles.

Looking ahead, the Reserve Bank of India has retained its growth forecast at 6.5% for FY26. Preliminary estimates for FY27 indicate a marginal rise to 6.7%, supported by expectations of a global economic rebound, a revival in private capital expenditure, and emerging gains from supply chain diversification. While global risks persist, positive domestic fundamentals, including favourable demographics, growing formalisation, and ongoing reforms, are expected to support stable growth momentum in the medium term.

Global Pharmaceutical Industry Overview

In FY24, the global pharmaceutical market was valued at approximately US$1.7 trillion, reflecting sustained momentum driven by higher demand for healthcare solutions across regions. Market growth was supported by factors including the rising incidence of chronic diseases, demographic changes marked by an ageing population, and the growing adoption of biologics, biosimilars, and personalised therapies. Enhanced research and development activities and increased healthcare expenditure, together with improvements in regulatory processes, contributed to ongoing industry dynamism.

North America continued to lead global pharmaceutical revenues, underpinned by a robust innovation pipeline and consistent demand for advanced therapies. At the same time, emerging markets in Asia and Latin America recorded greater participation in industry expansion, supported by increased access to healthcare, improved supply chain integration, and the growth of middle-class populations. The sectors landscape evolved further with the integration of artificial intelligence in drug discovery, adoption of digital therapeutics, and wider application of telemedicine, which collectively improved the efficiency and scope of care delivery.

Key Growth Drivers

? Rising Disease Burden and Demographic Shifts

The prevalence of chronic illnesses, combined with the acceleration of global ageing, expands the patient population and increases long-term pharmaceutical demand.

? Innovation in Therapies

Speciality medicines including biologics, cell and gene therapies are set to account for more than 45% of worldwide spending by 2028. Areas such as oncology, immunology, and the treatment of rare diseases remain key growth engines.

? Expansion of Generics and Biosimilars

Established generics and the emergence of new biosimilars are critical for broadening access to essential treatments, especially in cost-sensitive and emerging markets. The IQVIA report projects that biosimilars alone will realise cumulative savings of US$186 billion for healthcare systems by 2028.

? Digital Integration and Technological Shifts

Adoption of telehealth services, wearable technologies, and AI-powered health applications is transforming patient engagement, monitoring, and the generation of real-world evidence to guide treatment outcomes.

? Emerging Markets and Infrastructure Development

Countries such as China, India, and Brazil are recording increased pharmaceutical consumption and production, fuelled by infrastructure upgrades and rising healthcare investments.

? Escalating R&D Investment

Global pharmaceutical R&D spending reached US$200 billion in 2023 and is expected to grow between 5% and 7% annually. Ongoing investment strengthens clinical trials, gene editing advancements, and new drug delivery platforms.

Outlook

The global pharmaceutical industry remains positioned for sustained expansion. The market is projected to reach approximately US$2,970 billion by 2034, translating to a compound annual growth rate of 5.74% from FY25 to FY34. This outlook reflects expectations for continued robust demand for complex therapies and biologics, deeper collaboration within the biopharmaceutical sector, and growing penetration into emerging markets.

To support long-term growth, the industry is prioritising the enhancement of core capabilities across research, development, and manufacturing. Companies are increasing focus on the development and large-scale production of innovative treatments such as monoclonal antibodies, biosimilars, and advanced gene and cell therapies. Strengthening supply chain resilience and raising quality standards remain strategic imperatives, given increased regulatory scrutiny and the sectors ongoing commitment to scalability and compliance.

Indian Pharmaceutical Industry Overview

The Indian pharmaceutical sector is a central pillar of the global healthcare ecosystem, ranking third worldwide by volume, eleventh in terms of medicine spending, and fourteenth by value. India maintains its position as the largest global supplier of generic medicines and has earned a reputation for delivering cost-effective, high-quality pharmaceutical products. The country has the highest number of USFDA-approved pharmaceutical manufacturing facilities, enabling it to cater to an expansive portfolio, including generics, OTC medications, active pharmaceutical ingredients, vaccines, contract research and manufacturing services, biosimilars, and biologics.

The Indian pharmaceutical market is forecast to reach US$130

billion by 2030 and US$450 billion by 2047. This outlook is underpinned by structural and policy-led enablers that are supporting the sectors evolution towards greater scale and complexity.

Key Growth Drivers

? Cost-Effective Manufacturing Base

Indias robust production capabilities, coupled with a skilled workforce and competitive cost structures, underpin the countrys ability to supply affordable medicines globally.

? Rising Healthcare Access and Affordability

Expanding insurance coverage, infrastructural improvements, and government initiatives continue to enhance medicine accessibility and affordability across the population.

? Growing Burden of Non-Communicable and Lifestyle Diseases

Increasing prevalence of chronic ailments such as diabetes, cardiovascular diseases, and cancer is driving higher demand for a diverse range of pharmaceutical therapies.

? Policy Initiatives and Government Support

Strategic policy measures, including the establishment of Centres of Excellence, regulation of essential drug prices, expansion of the Jan Aushadhi scheme, and umbrella development schemes, are fostering innovation, encouraging investment, and boosting domestic manufacturing self-reliance.

? Increased Global Opportunities

Shifts in the geopolitical environment have positioned India favourably under the China Plus One strategy, elevating its status as a preferred partner for contract development and manufacturing organisations in the international arena.

Strategic Direction and Policy Landscape

The government has implemented transformative initiatives, such as the Production Linked Incentive schemes and the Bulk Drug Parks programme, with the aim of bolstering competitiveness, reducing import dependency, and advancing innovation. Recent regulatory reforms promoting ease of business, clinical trial transparency, and drug monitoring reflect a commitment to aligning the industry with global standards.

Outlook

Spending on medicines in India is projected to grow at a CAGR of 7 to 10% through 2028, supported by an ageing population, rising burden of chronic diseases, and continuous expansion of healthcare access. The ongoing integration of digital technologies in pharmaceutical manufacturing and the supply chain is expected to enhance operational efficiency, compliance, and product traceability, further strengthening the sectors foundations.

Indias pharmaceutical industry is well poised to benefit from an improving policy environment, digital adoption, and strengthening global demand. Commitment to quality, cost leadership, and innovation will continue to define the sectors long-term trajectory as it further consolidates its role as a preferred global partner and provider of affordable healthcare solutions.

Global Speciality Chemicals Industry

The global speciality chemicals industry is integral to a broad array of industrial applications, serving as a foundational driver of innovation and value addition across critical sectors. In 2023, the market was valued at USD 641.5 billion, with growth underpinned by rising industrialisation, shifting consumer preferences, and expanding demand for differentiated solutions in both developed and emerging economies. Projected to register a compounded annual growth rate of 5.2% between 2024 and 2030, the sector continues its trajectory of sustainable growth.

A significant proportion of global speciality chemicals production is directed towards four principal end-use sectors: food and beverages, personal care, construction, and electrical and electronics. Rapid growth is anticipated in segments such as specialty coatings, electronic chemicals, nutraceuticals, flavours and fragrances, and organic personal care, owing to the positive outlook for their respective downstream industries.

Several broad-based trends are fuelling sectoral momentum. Advances in technology and the liberalisation of global trade have facilitated greater integration across value chains, enhancing market access and driving innovation. In addition, growing demand for construction, water treatment, electronics chemicals, and active pharmaceutical ingredients continues to elevate industry performance. Heightened consumption of processed food and beverages has stimulated increased use of flavouring agents, particularly in developed markets, while evolving consumer preferences for novel flavours and fragrances are further propelling growth.

The increasing role of food and feed additives, coupled with the latent need for high-performance materials in automotive, aerospace, and renewable energy applications, positions speciality chemicals as a cornerstone of future-ready industrial solutions.

Indian Speciality Chemicals Industry

Indias speciality chemicals sector is undergoing a period of significant transformation and is expected to play an increasingly pivotal role within the broader chemicals landscape. Once considered a modest sub-segment, speciality chemicals currently account for approximately 20% of the Indian chemicals market. The sector provides essential inputs for a diverse range of industries, including pharmaceuticals, agrochemicals, textiles, and fast-moving consumer goods, consolidating its status as a critical growth engine within the Indian economy.

India is emerging as a preferred global manufacturing hub for speciality chemicals, with the countrys technical competencies, scale, and compliance reputation attracting expanding international demand. This transition is further accelerated by supply chain realignments, as multinational corporations respond to the diminishing competitive edge of China, where rising labour costs and increasingly stringent environmental regulations are reshaping sourcing strategies. Government support, cost advantages, and access to a young, skilled workforce make India a compelling alternate destination for production and collaborative ventures.

Policy enhancements have reinforced the industrys strategic positioning. Notable government initiatives, including the Production Linked Incentive (PLI) scheme and the Remission of Duties or Taxes on Export Products (RoDTEP), are actively supporting capacity creation and export competitiveness. Concurrently, ongoing labour and land policy reforms are streamlining the operating environment and facilitating expansion. Capacity augmentation, process innovation, and robust investment flows underscore the confidence of both domestic and global investors in the long-term prospects of Indian speciality chemicals.

The industrys market value stood at US$33.5 billion in 2023 and is forecast to reach US$61.5 billion by 2029, representing a projected CAGR of 10.7%. The pace of expansion will vary by segment, with rapid growth foreseen in electronic chemicals, notably for applications such as semiconductors and integrated circuit process chemicals, in response to rising consumption of electronic devices.

Company Overview

Shree Ganesh Remedies Limited has established itself as a prominent player in the production of pharmaceutical intermediates and speciality chemicals, building on more than two decades of operational excellence. Leveraging advanced chemical synthesis and technology-led processes, the company consistently delivers differentiated solutions to critical sectors, including healthcare, agrochemicals, polymers, and electronics. With principal manufacturing facilities located in Ankleshwar, Shree Ganesh Remedies Limited remains steadfast in its commitment to quality, regulatory standards, and state-of-the-art infrastructure. The companys expansive portfolio serves the complex requirements of clients in over 20 international markets. A strong legacy of mastering complex chemistries is reinforced by ongoing investments in research and development, evidenced by a cutting-edge R&D centre and dedicated pilot facilities. Shree Ganesh Remedies Limited operates through two specialised business verticals, each designed to deliver high-value, tailored solutions across global markets, supporting continued growth and industry leadership.

Performance Review and Outlook

The operating environment for the global and domestic chemical sector in FY25 was characterised by pronounced challenges and volatility. The Company experienced the effects of these headwinds, particularly in the European market where a slowdown curtailed demand. Domestically, increased competition exerted downward pressure on prices, resulting in a material reduction in realisation levels for our products. During the year, revenue from operations was 108.60 crore, representing a decrease of approximately 14% compared to the previous period. Despite softer pricing, the core portfolio achieved stable volume growth, signifying ongoing product demand even amidst broader sectoral weakness.

From a profitability perspective, the Company continued to exhibit strong operational discipline. EBITDA for the year stood at 39.21 crore, with the EBITDA margin rising to 36%, an improvement of nearly 290 basis points year-on-year. This enhancement was largely driven by increased contribution from high-value CRAMS projects, which enabled the partial mitigation of revenue pressures. Profit after tax was 23.10 crore, reflective of higher depreciation and finance costs associated with newly commissioned capacity.

Looking ahead to FY26, the Company is prioritising strategic investments in infrastructure and technology to strengthen its competitive position. Key initiatives include manufacturing expansion at Ankleshwar and development at the Dahej facility, designed to create scalable and advanced production capabilities.

While revenue growth in FY26 is expected to remain steady as new projects move through the approval and ramp-up phases, the Company is laying robust foundations for accelerated growth from FY27. The focus on operational readiness, capacity building, and value-added segments positions the Company to benefit from the next cycle of growth in emerging specialty markets and CRAMS opportunities.

Key Financial Ratios

Ratio Analysis	March 31, 2025	March 31, 2024	Change	Remarks
1 Current Ratio	4.79	3.75	28%	The ratio has increased mainly due to increase in Trade Receivables and Investments
2 Debt Equity Ratio	0.26	0.30	-11%	-
3 Debt Service Coverage Ratio (For Ind AS Companies Profit before OCI)	4.95	6.39	-23%
4 Return on Equity Ratio	0.17	0.27	-36%	Reduction due to decrease in profitability
5 Inventory Turnover Ratio	1.53	2.66	-43%	Reduction due to decrease in Cost of Goods Sold as a result of overall reduction in Turnover
6 Trade Receivables Turnover Ratio	5.10	5.19	-2%	-
7 Trade Payables Turnover Ratio	4.65	5.45	-15%	-
8 Net Capital Turnover Ratio	1.77	2.45	-28%	Reduction due to decrease in Turnover
9 Net Profit Ratio	0.21	0.22	-5%	-
10 Return on Capital employed	0.18	0.24	-26%	Reduction due to decrease in profitability
11 Return on Investment	0.07	0.11	-36%	Reduction due to decrease in fair value gain of Mutual Funds

Internal Control and Adequacy

The Company maintains a comprehensive system of internal controls, designed to safeguard assets, assure the accuracy and reliability of financial reporting, and facilitate compliance with all relevant laws and regulations. This control environment aligns with established best practice frameworks and undergoes regular evaluation to ensure ongoing effectiveness and responsiveness to business needs.

A strong tone at the top is demonstrated by managements unwavering commitment to upholding integrity and ethical conduct across the organisation. Clear policies and procedures, along with a commitment to zero tolerance for unethical actions, reinforce this culture. The Companys risk management framework provides for the identification, assessment, and prioritisation of potential risks across all operational dimensions. Mitigation strategies are developed proactively to minimise disruption and maintain the Companys financial stability.

Segregation of duties is strictly enforced, with critical financial and operational responsibilities allocated to separate individuals, thereby reducing the risk of error or misappropriation. Access to sensitive information and systems is governed by the principle of least privilege, ensuring that only authorised personnel may engage with confidential data. The internal audit function and regular management reviews provide ongoing monitoring and assessment of internal controls. Comprehensive reports on the performance and effectiveness of the internal control system are regularly presented to the Board of Directors for further oversight and direction.

The Company is fully committed to the continuous enhancement of its internal control environment. Through these efforts, the reliability of financial reporting, operational efficiency, and the safeguarding of the Companys assets and reputation are consistently maintained at the highest standards.

Human Resource

The Company regards its employees as its most significant asset and places considerable emphasis on attracting, developing, and retaining a skilled and motivated workforce. During FY25, the Company reinforced its commitment to human capital through the following strategic initiatives:

? Talent Acquisition

Multiple recruitment channels and carefully targeted strategies were employed to secure exceptional talent. Engagement in industry events and cultivation of a distinguished employer brand continued to support the attraction of high-calibre professionals.

? Training and Development

Ongoing investment in comprehensive training programmes ensured employees acquired relevant skills and knowledge to excel in their roles. Continuous learning opportunities enabled staff to adapt effectively to the evolving business landscape.

? Performance Management

The Company maintained a robust performance management system, offering employees regular feedback and structured opportunities for advancement and professional growth.

? Diversity and Inclusion

The workforce remained diverse and inclusive, supported by policies and initiatives designed to nurture a culture of respect, collaboration, and equal opportunity for all employees, irrespective of background or prior experience.

By prioritising investment in human resources, the Company ensures a highly capable workforce that is integral to achieving its strategic goals and sustaining competitive advantage.

Risk Management

The Company continued to uphold a comprehensive risk management framework in FY25, dedicated to identifying, assessing, prioritising, and addressing potential risks throughout its operations. The key components of this framework include:

? Risk Identification

Systematic methods, including scenario analysis, industry benchmarking, and periodic risk reviews, are applied to identify emerging and existing risks across all business areas.

? Risk Assessment

Risks are evaluated based on the likelihood of occurrence and assessed for their potential impact on financial performance, operational efficiency, and the Companys reputation.

? Risk Mitigation

Tailored strategies are developed to address identified risks. These may include avoidance, reduction, risk transfer through insurance, or measured acceptance supported by appropriate internal controls.

? Risk Monitoring

Risks are continuously monitored, with the risk management framework subject to regular review to ensure alignment with the dynamic external and internal environment.

The Companys proactive approach to risk management is designed to minimise potential disruptions and underpin the long-term sustainability and success of its operations.

Cautionary Statement

Certain statements in this report regarding the Companys objectives, projections, estimates, expectations, or predictions may constitute forward-looking statements under applicable securities laws and regulations. While these expectations are based on reasonable assumptions, actual results could significantly differ from those expressed or implied.