Sigachi Industries Ltd Management Discussions

GLOBAL ECONOMIC REVIEW

In 2024, the world economy exhibited a remarkable ability to withstand ongoing challenges, yielding consistent but moderate growth. The year was marked as a "soft landing" for many economies, which successfully averted the sharp downturns previously anticipated. According to the International Monetary Fund (IMF), it estimated a global GDP growth rate of 3.3% for 2024, paralleling 2023.

This sustained growth de_ed earlier fears of recession, driven by stronger-than-expected performances in the United States, where growth reached an estimated 2.8%, fuelled by robust consumer spending and rising investment in Artificial intelligence. Emerging markets, particularly in Asia, contributed significantly during the year. Despite ongoing challenges in its real estate sector, China_ stabilised at 4.8% growth, aided byfitargeted stimulus measures.

According to IMF estimates, global inflation is easing, declining from 6.7% in 2023 to 5.8% in 2024. Advanced economies are reaching inflation goals faster than emerging markets. In response, central banks, including the U.S. Federal Reserve, are relaxing monetary policies with rate cuts, balancing inflation control and economic growth. However, inflation in the services sector remains reluctant, complicating broader monetary policy normalisation. On the other hand,_ falling energy prices and global oversupply contributed to disinflation.

Global trade reached a record US$33 trillion in 2024, growing by 3.7% (US$1.2 trillion),_with positive growth in most regions except Europe and Central Asia. Developing economies surpassed developed nations, with import and export activity increasing by 4% for the year. However, momentum decreased in the second half, suggesting a slowdown in global demand.

Outlook: Geopolitical tensions and trade uncertainties will continue to cast shadows over the 2025 outlook, which the IMF projects to be at 2.8% growth. Conflicts in Ukraine, the Middle East and South Asia, alongside U.S. trade tariffs, heightened risks of supply chain disruptions, and inflationary spikes are contributing factors. The World Bank noted downside risks, including climate-related disasters and rising debt in low-income countries, with growth in these regions lagging. Moving into 2025, the focus remains on sustainable fiscal policies, structural reforms, and navigating geopolitical headwinds to bolster long-term growth prospects.

Sources: IMF, World Economic Outlook, April 2025, January 2025, October 2024 https://unctad.org/news/global-trade-hits-record-33-trillion-2024-driven-services-and-developing-economies

INDIAN ECONOMIC REVIEW

The Indian economy is projected to grow 6.5% in the fiscal year 2024-25, moderating from the 9.2% expansion in the previous fiscal year. Despite the slowdown, the countryfiretains its position among the worlds fastest-growing major economies._Strong consumer demand, a robust agricultural sector recovery, and consistent service sector performance support the real GDP growth. According to the International Monetary Fund (IMF) in its April Outlook, India has surpassed Japan, becoming the fourth-largest economy in CY2025.

Agricultural output was increased by 4.6% following a robust monsoon that supports rural demand. In contrast, manufacturing growth has been adjusted to 4.5%, down from the previous fiscal years 12.3%, indicative of diminished global demand and a slowdown in corporate investments.

Private consumption is anticipated to have grown by 7.3%, reflecting a buoyant middle class. In comparison, Foreign Direct Investment inflows have experienced a significant surge of 27%, reaching C40,672 million during the first nine months, indicating_investor confidence. Infiation has been effectively managed, as evidenced by the decrease in the Consumer Price Index to 4.6% for the entire financial year 2024-25, down from 5.4% in the previous year. This reduction has been facilitated by a decline in food prices and the stability of monetary policy. The Reserve Bank of India has implemented two consecutive reductions in the repo rate, lowering it from 6.5% to 6%. It has decreased the Cash Reserve Ratio to 4%, injecting C1.16 lakh crore into the financial system.

Fiscal discipline remains resilient, as evidenced by the reduction of the fiscal deficit to 4.8% of GDP, underpinned by robust tax revenues and an emphasis on capital expenditure. Moreover, Indias merchandise exports amounted to US$437.42 billion, reflecting a marginal increase of 0.08% relative to US$437.07 billion in FY24.

Outlook:

India is expected to maintain_ steady growth in FY26, projected at_ 6.3-6.8% on an annual basis, driven by_ resilient consumption,_agricultural recovery, and_increased infrastructure investments. However, possible risks include global trade slowdowns, widening trade deficits, global geopolitical tensions, climate challenges, and newly imposed U.S. tari_ hikes, though strong services exports should provide resilience. However, foreign exchange reserves remain healthy at US$688.13 billion as of April 25, 2025, reflecting sound macroeconomic fundamentals.

INDUSTRY OVERVIEW

Global Pharmaceutical Industry

The global pharmaceutical industry represents a significant powerhouse.

Few sectors have had as profound an impact on human health and societal advancement, with a long legacy of developing transformative drugs and vaccines_ developed over decades, contributing to enhancing global health.

As a cornerstone of healthcare systems worldwide, the sector drives innovation to address evolving medical needs. In 2024, the industry sustained robust growth, with revenues estimated to reach US$1.67 trillion, driven by demand for biologics, vaccines, and personalised medicine.

Emerging markets, especially in Asia, contributed significantly, while_ North America retained its dominant position. However, high R&D costs, averaging US$2.5 billion per new drug, burdened smaller firms, underscoring the need for sustained investment in research and development. Breakthroughs in gene therapies and AI-driven drug discovery reinforced R&Ds critical role in tackling complex conditions such as cancer and Alzheimers.

Concerns

The industry faced challenges in 2024, including patent expirations, pricing pressures, and rising compliance costs. Supply chain disruptions, rapid technological change, and heightened data security requirements further complicated the landscape. Nonetheless, biosimilars and digital health integration presented new growth avenues.

Impact of US tariffs on the industry: Proposed US tariffs on pharmaceutical imports posed serious challenges to global pharmaceutical companies. They are likely to increase drug prices for American consumers, potentially causing shortages of essential medications and affecting the global pharmaceutical industry._While the tariffs may stimulate domestic manufacturing in the long term, they are expected to disrupt global supply chains, increase costs, and result in reduced research and development.

Implementing these tariffs may incite retaliatory trade measures from other nations, thereby posing a potential threat to pharmaceutical exports manufactured within the United States. Although certain companies may be able to absorb short-term increases in costs, the long-term rami_cations of these tariffs could encompass diminished access to medications, escalating insurance expenses, and a possible relocation of manufacturing operations back to the United States.

Outlook: The global outlook remains cautiously optimistic, with the market expected to grow steadily in the future, driven by ageing populations and chronic disease prevalence. Pharmaceutical companies are exploring alternative strategies to mitigate the impact of tariffs, such as diversifying supply chains and establishing new manufacturing facilities.

Key future drivers include:

• Advances in mRNA technology_and_precision medicine

• Sustainability initiatives

• Biotech–big pharma collaborations_accelerating innovation

However, regulatory complexities, geopolitical tensions, and supply chain vulnerabilities pose persistent risks. Continued R&D investment and adaptive strategies will be essential to meet global health demands and ensure long-term resilience.

INDIAN PHARMACEUTICAL INDUSTRY

The Indian pharmaceutical industry, often dubbed the "pharmacy of the world," has evolved remarkably since independence.

Initially reliant on imports, the 1970 Patent Act spurred growth by allowing process patents, enabling local firms to produce affordable generics.

By the 1990s, big Indian companies had gained global prominence, capitalising on cost-e_ective manufacturing and skilled labour. The 2005 TRIPS compliance shifted focus to innovation, with firms investing in R&D for biosimilars and complex generics.

Performance during the fiscal year 2024-25

In 2024, Indias pharma market, valued at US$50 billion, ranked third globally by volume, supplying 20% of global generics and 60% of vaccines. The industrys strength lies in its 10,500+ manufacturing facilities, about 2,000 of which are WHO-GMP approved. India also boasts the largest number of USFDA-approved plants outside the US and a robust supply chain. Government initiatives like the PLI scheme have bolstered API production, reducing dependency on China.

Growth drivers of the year included: The domestic pharmaceutical market grew by 8.4% during the financial year 2024-25 on the back of major therapies showing positive value growth. Pharmaceutical exports also surged, exceeding US$30 billion, reflecting an increase_ of over 9% compared to the previous year._ This growth is attributed to factors like positive value growth in major therapies. The country has also positioned itself as the worlds largest supplier of generic medicines.

Challenges faced during the year: Despite this progress, the industry encountered critical challenges as it approached a pivotal point. These include_ regulatory hurdles, quality control issues, and supply chain disruptions, as well as pressure from competition and price controls._ Intellectual property concerns, the reliance on Chinese APIs, and R&D investment constraints pose significant hurdles.

Regulatory development in the US and its impact: The proposed imposition of tariffs and reduction of prices of pharmaceutical products in the US presents considerable challenges for the Indian pharmaceutical industry in the coming years.

India accounts for approximately 47% of the generics demand in the United States. Price reductions resulting from international reference pricing could significantly reduce revenues for major firms. In response, Indian companies might increase prices in less-regulated markets, thereby jeopardising a_ordability in developing nations. Furthermore, investment in research and development could stagnate, ultimately impeding innovation. Proposed tariffs, potentially set at 25% or higher, could result in billions of dollars in additional costs, consequently raising generic prices for consumers in the United States. Indian businesses may transfer these costs to consumers, compromising a_ordability, or choose to absorb these losses, thereby impacting profitability adversely. Additionally, transitioning Indias 752 FDA-approved facilities to meet reshoring needs in the US_could take four to five years, delaying outcomes from tari_-driven strategies.

However, the growing demand for low-cost generics in the United States could prove advantageous for Indian manufacturers, provided they adjust to reduced profit margins. Indias_ cost advantage_ may mitigate anticipated short-term revenue losses and long-term constraints on innovation. This_ cost-competitiveness in terms of cost_ and potential for_ market diversification_ into regions like Africa and Latin America could offer a bu_er against these impacts. However,_ short-term supply chain disruptions_and_long-term innovation risksfiremain significant concerns.

Developments in the domestic regulatory environment

• The Production Linked Incentive (PLI) scheme advanced domestic API production, reducing dependence on China (from70%tolowerlevels).TheUnionBudget2025-26allocated US$602.9 million to the Department of Pharmaceuticals, up 28.8%, boosting R&D and manufacturing.

• The Uniform Code for Pharmaceutical Marketing Practices (UCPMP) and updated Good Manufacturing Practices (GMP) under Schedule M improved transparency and product quality standards. Centralised export No Objection Certificates streamlined processes.

• The MoHFW has proposed changes to the labelling requirements for drugs via a draft amendment to the Drugs Rules, 1945, mandating that "Details of excipients" also be declared on the label of drugs. Presently, the label of drugs is only required to bear details of the active ingredients that are used in the drug.

• The government has undertaken various measures to simplify the patent application process, including fee rebates for startups, small entities, and educational institutes and expedited examination facilities for certain applicants.

• Initiatives have been taken to streamline regulatory processes for new drug discovery and development, including establishing committees to facilitate regulatory reforms and create a more supportive ecosystem for R&D.

Key growth drivers

• Rising Domestic Demand: Indias large and growing population, coupled with an increasing life expectancy and rising prevalence of lifestyle diseases, creates a significant market for pharmaceuticals.

• Government Initiatives: Government policies, including the Production Linked Incentive (PLI) scheme, aim to boost domestic manufacturing, attract investment, and diversify product offerings.

• Generic Drug Manufacturing: Indias strength in generic drug manufacturing remains a key factor in providing affordable access to essential medicines.

• Expanding Healthcare Infrastructure: Expanding hospitals and hospital chains, clinics, and diagnostic centres, especially in rural areas, improves access to healthcare services and fuels demand.

• Technological Advancements: Adopting technologies like AI, machine learning, and telemedicine is streamlining operations, improving patient care, and enhancing supply chain management.

• Global Market Expansion: Indias pharmaceutical companies are increasingly targeting global markets, particularly the United States, Europe, and emerging regions, contributing to revenue growth.

• Regulatory Reforms: Streamlining regulatory processes and promoting ease of doing business encourages innovation and attracts investment, further accelerating the development of new drugs and therapies.

• Focus on Innovation: The industry is experiencing unprecedented scientific advancements and data-driven breakthroughs, particularly in drug discovery and personalised medicine.

Opportunities

• Emphasis on Self-Reliance: The governments focus on self-reliance in key pharmaceutical products, including APIs (Active Pharmaceutical Ingredients) and KSMs (Key Starting Materials,) will create opportunities for domestic manufacturing.

• Innovation in Next-Generation Modalities: India invests in research and development of new therapeutic modalities, such as biologics and gene therapy, which can lead to innovative new drugs.

• Emerging Market Penetration: Indias export market can grow further in Africa, Latin America, and ASEAN, leveraging low-cost generics and vaccines to meet rising healthcare demands.

What the future holds: Despite facing challenges such as price controls, regulatory scrutiny, and threats from U.S. regulations and reliance on China for APIs and intermediates, the industrys future looks promising. Investments in biologics, digital health, and AI-powered drug discovery are increasing. With an emphasis on quality, a_ordability, and innovation, Indian pharmaceuticals continue to serve a critical role in global healthcare and are set for steady growth until 2030. India aims to achieve market milestones of approximately US$130 billion by 2030 and US$450 billion by 2047.

Sustainability & the Indian pharmaceutical industry

In 2024, the Indian pharmaceutical sector intensi_ed sustainability efforts to meet global environmental standards, a trend continuing into 2025. Prominent companies adopted eco-friendly manufacturing methods, achieving a 15–20% reduction in carbon emissions through energy-e_cient practices and renewable sources like solar energy. The industry invested nearly US$500 million in waste management and water recycling, addressing 30% of its wastewater. Furthermore, the Production Linked Incentive (PLI) program has promoted greener production of active pharmaceutical ingredients (APIs), reducing emissions from imports. In 2025, the Department of Pharmaceuticals will prioritise sustainable R&D, offering incentives for innovations in biodegradable packaging and reduced solvent use.

Indias Branded Generic Drug Market

Indias branded generic drug market serves as a cornerstone of the nations billion-dollar pharmaceutical industry, commanding a ~70-80% share of the domestic market by revenue. In contrast to unbranded generics, which are sold under chemical names, branded generics are off-patent medications marketed under company-specific brand names, offering a_ordability (57–85% lower than branded drugs) and an enhanced perception of quality.

Valued at approximately US$24.91 billion in 2024, the generic market, encompassing branded generics, is anticipated to expand to US$35.62 billion by 2030, growing at a 6.02% CAGR. This growth is propelled by the rising prevalence of chronic diseases (for instance, diabetes accounts for 38.1% of IPM sales) and substantial exports, totalling US$8.7 billion to the United States.

GLOBAL FOOD AND NUTRITION INDUSTRY

The food and nutrition industry_ encompasses the production, processing, distribution, and marketing of food and nutritional products, to enhance human health through dietary choices and the utilisation of supplements._This industry comprises various sectors, including food manufacturing, dietary supplements, and nutrition services, all contributing to the global food supply chain._ It represents a substantial market, characterised by an increasing focus on health-conscious consumer choices and a growing awareness of the importance of balanced nutrition. The industry offers a comprehensive range of products, including baked goods, cereals, dairy items, meats, seafood, eggs, soy-based products, fats, oils, and others. Nutritional foods are developed utilising a diverse array of components, including carotenoids, dietary _bres, carbohydrates, fatty acids, minerals, antioxidants, prebiotics, probiotics, vitamins, and proteins. These products are designed for a variety of applications, including athletic nutrition, weight management, immune enhancement, digestive health, clinical dietary solutions, cardiovascular health, pediatric needs, veterinary applications, medical uses, and personalised nutrition plans.

In 2024, the industry witnessed moderate growth due to challenges like inflation and supply chain disruptions. Since then, food prices have moderated, but cost-driven purchases have persisted. The global Nutritional Food market was valued at_ US$7.16 billion in 2024_ and is expected to reach_ US$15.24 billion by 2032 at a CAGR of 9.90%.

Growth Drivers: Consumers increasingly seek products addressing specific health concerns such as allergies, bone and joint health, glucose management, cancer, cardiovascular issues, maternal and infant care, and skin health. For instance, the growing awareness of health and wellness has led to a surge in demand for immunity-boosting supplements, significantly boosting the market worldwide.

Industry players leverage_ 750+ USFDA-approved plants_ to support global supply chains. Government initiatives such as_PMBJP (Pradhan Mantri Bhartiya Janaushadhi Pariyojana)_and proposed OTC regulations continue to enhance access. However, challenges persist in the form of_ regulatory scrutiny,_ pricing controls (DPCO), and_ doctors preference for branded options due to marketing efforts.

The markets future hinges on balancing quality assurance, bioequivalence compliance, and rural penetration (67% population, 17% OTC sales).

These developments underscore the dynamic nature of the nutritional food market, highlighting how brands are adapting to meet evolving consumer demands through product innovation and targeted health solutions. The market is also growing due to demand for low-sugar, high-nutrient products, with North America leading and Asia-Pacific showing rapid growth. Nutraceuticals and sports nutrition have _ourished, fuelled by preventive healthcare and fitness trends. However, ultra-processed foods, high in sugar and salt, continued to dominate diets, raising health concerns.

Trends: Retail infrastructure and e-commerce improvements are making these foods more accessible to a wider audience. Interestingly, the increasing interest in plant-based and alternative proteins throughout the Asia-Pacific region offers significant investment prospects for companies looking to meet these changing consumer tastes.

The market is witnessing exciting advancements in health-oriented products. Growing awareness of the microbiome is driving demand for probiotics and prebiotics. Consumers are increasingly seeking healthier alternatives, leading to a rise in sugar and fat replacers. Additionally, _avoured and enhanced beverages are gaining popularity, offering hydration with nutritional benefits, while meat and dairy alternatives are expanding to explore diverse protein sources beyond traditional plant-based options.

Opportunities: By 2040, the worldwide population is projected to increase by over a billion individuals, leading to a substantial rise in food demand that is not currently available. Most of this population growth will occur in Africa and South Asia, significantly influencing global consumption trends across various categories in the upcoming years.

In the Asia-Pacific region, emerging markets are experiencing a notable expansion of their middle class. This development is contributing to a surge in expenditure on nutritious food items. The increasing urban population is a significant factor behind this trend, as it creates a greater demand for convenient and healthy food choices. Furthermore, the enhanced accessibility to information is elevating health awareness among consumers, leading to a rising interest in nutritional products.

INDIAN FOOD AND BEVERAGE INDUSTRY

Indias Food and Beverage industry is a vast, rapidly growing sector, encompassing diverse cuisines and products from agriculture to packaged goods. A significant contributor to the economy, it reflects rich culinary traditions while embracing modern processing and innovation, catering to a massive domestic and export market.

The key segments of the industry include food processing, food service, packaged foods (dairy, bakery, snacks, ready-to-eat), beverages (alcoholic, non-alcoholic), food retail, ingredients, organic & health Foods, and plant-based alternatives.

Indias food and beverage (F&B) industry, valued at US$332 billion in 2023, is projected to grow at a CAGR of 11.05%, reaching approximately US$691.47 billion in 2030.

Growth drivers: The growth of the Indian food and beverages market is driven by several factors: the rising afluence of the expanding working population, higher disposable incomes, increased urbanisation that influences lifestyles and reduces the time for home-cooked meals, a boost in tourism and international travel to India, and rising consumption of high-growth food and beverage segments during special festivals, celebrations and other special occasions.

A strong domestic supply of raw materials also supports the growth. India is the worlds leading producer of various agricultural products, including milk, bananas, mangoes, guavas, papayas, ginger, and okra. It also ranks second globally in wheat, rice, and diverse fruits and vegetables and third for cereals, coconuts, lettuce, chicory, nutmeg, mace, cardamom, and pepper.

Trends: Consumer behaviour has changed significantly in recent years and continues to evolve rapidly, influencing food and beverage trends. They now prioritise their personal health by placing more importance on self-care. They are also adapting to a more sustainable lifestyle that focuses on conscious consumption and knowing where their food comes from. New sensorial experiences, are in demand, particularly around traditional _avours and modern twists. At the same time, they are also indulging more, as seen in the growing prominence of premium ingredients.

Opportunities

India has a young population, primarily aged 18-40, driving food and beverage consumption.

The government remains keen on strengthening the food & beverage industry.

Strategy aimed at diversifying export basket to enhance global trade presence and increase shipments.

The government has established 60 Agri-Export Zones, 42 mega food parks, and 128 cold chains to boost exports. India is a trading hub for Southeast Asia in food and beverages.

The growing market for breakfast cereals, pasta, infant food, bakery products, foreign liquor, oils, and sauces.

International organisations are investing in local manufacturing and gaining market insights into consumer preferences.

FSSAI to invest US$ 72.3 million in upgrading food testing infrastructure and labs.

Globalisation has increased the food trade, with 460 million tons traded annually valued at US$ 3 billion.

Indias economic integration and proximity to export markets position it well for trade growth in agricultural and processed food.

INDIAS NUTRITION MARKET

The dietary supplements market encompasses various products, including vitamins, minerals, herbs, botanicals, amino acids, and enzymes, available in various forms, such as tablets, capsules, powders, and liquids. These supplements are consumed to supplement the diet and provide essential nutrients that may be lacking in ones regular diet.

The market caters wide array of consumer needs, encompassing general wellness, sports nutrition, weight management, and targeted solutions for specific health conditions. As health consciousness increases and lifestyle transformations occur, the demand for dietary supplements persistently rises, thereby propelling innovation, product development, and global market expansion.

The_ India Dietary Supplements Market_ is expected to record a CAGR of_10.2%_from 2024 to 2033. In 2024, the market size is projected to reach a valuation of US$24.2 billion. By 2033, the valuation is anticipated to reach US$57.5 billion.

Growth drivers: In recent years, Indian consumers have significantly transformed their attitudes towards health and wellness, primarily due to the increase in lifestyle-related diseases such as diabetes, obesity, and cardiovascular issues. These health concerns compel consumers to adopt a more proactive stance regarding their well-being.

The amalgamation of beauty and wellness is increasingly evident both globally and within India. A growing number of individuals now associate outer beauty with inner health, which is driving the demand for supplements that enhance skin and overall health. Moreover, the expanding middle class, an increase in disposable income, greater availability in retail establishments, and improved accessibility through the proliferation of e-commerce platforms are pivotal factors contributing to growth. Additionally, direct selling networks, speciality stores, and wellness clinics present unique opportunities for personalised customer interactions and product demonstrations, thereby augmenting consumer engagement and loyalty.

New opportunities: The market for dietary supplements directed towards women is anticipated to expand in India significantly. This growth is propelled by an increase in awareness and concern regarding conditions such as Polycystic Ovarian Syndrome (PCOS), in addition to a heightened focus on hormone health. As the acknowledgement of the critical role that hormones play in overall well-being- particularly for women- grows, the demand for specialised supplements to address these needs is also on the rise increasing.

INDIAS NUTRACEUTICAL MARKET

Nutraceuticals are defined as foods or components obtained from foods that provide health benefits that exceed basic nutritional value, thereby effectively bridging the gap between culinary and medicinal domains. These substances are often found in fortified foods, dietary supplements, and beverages, potentially including vitamins, minerals, herbs, or other natural entities that are supported by substantial health-related evidence.

In the post-pandemic context, nutraceuticals have gained increased prominence in India, driven by a heightened awareness of health and concerns surrounding immunity. The pandemic has shifted consumer focus toward preventive healthcare practices, consequently amplifying the demand for vitamins, herbal supplements, and Ayurvedic formulations.

Moreover, the exponential growth of e-commerce, combined with governmental initiatives such as Production Linked Incentive (PLI) schemes aimed at bolstering domestic manufacturing and regulatory advancements under the Food Safety and Standards Authority of India (FSSAI), has propelled the market to unprecedented levels.

Types of products: Nutraceuticals include products that help maintain immunity and prevent diseases. In other words, these products reflect increasing health awareness among the general population in the country. It also includes products that support the optimal functioning of the human body. Poor nutrition plays an important role in lifestyle-related disorders as well. Various nutraceuticals have exhibited therapeutic potential, hence gaining popularity.

Indias nutraceutical market includes dietary supplements, comprising ~65% of the market, which feature vitamins, minerals, probiotics, and herbal extracts like ashwagandha for immunity. Functional foods account for ~37% of revenue, offering fortified cereals and probiotic yoghurts for diabetes and heart health. Functional beverages, including energy drinks and herbal teas, cater to busy consumers. Plant-based nutraceuticals include Ayurvedic supplements and protein powders. Specialised products like gummies and personalised nutrition attract younger demographics.

Fast-growing area: The nutraceuticals market in India grew by ~20% during COVID-19. In 2023, the Indian nutraceuticals industry held approximately_ ~9%_ of the global nutraceuticals market revenue._This represents a significant increase from the 2% share in 2017.

In 2024, the market size was about ~US$7 billion (both domestic & export). The market is expected to double in the next five to six years with a CAGR of 16-18% organically. However, with the right kind of push, the market can strive to climb even higher.

Trends: Key trends include_ a rise in the popularity of herbal supplements, functional foods, and immunity-boosting products._Furthermore, the market is seeing increased adoption of online retail and direct-to-consumer models, along with a focus on sustainable packaging.

Opportunities: In 2025, the Indian nutraceutical market is significantly influenced by AI-driven personal nutrition innovations, harnessing consumer health data for customised solutions. The market is characterised by the emergence of novel delivery formats such as gummies, e_ervescent tablets, and plant-based protein powders, which augment convenience and attractiveness. The increasing prominence of clean-label, Ayurvedic, and herbal products, including ashwagandha and curcumin, corresponds with consumer preferences for natural remedies. The emphasis on preventive healthcare, targeting lifestyle diseases such as diabetes, alongside unexploited rural markets, presents substantial opportunities potential.

Regulatory push: FSSAIs 2022 Nutra Regulations and PLI schemes enhance market access and production. Government initiatives, including the Nutraceutical Centre of Excellence in Kerala and CSIRs Task Force, foster innovation and global competitiveness, positioning India to capture a larger share of the US$400 billion global market.

GLOBAL MCC MARKET

In the pharmaceutical industry, MCC (Microcrystalline Cellulose) is_a versatile and widely used excipient, meaning its a non-active ingredient that supports the active pharmaceutical ingredient (API)._ MCC acts as a binder, disintegrant, filler, and diluent, contributing to tablet stability, drug release, and overall formulation quality.

For its properties, MCC is used in pharmaceuticals for tablet formulation, as a stabiliser and as a thickener in food and beverages, as an anti-caking agent in nutraceuticals, and as a texturiser in cosmetics. It also supports 3D printing and industrial applications.

The global microcrystalline cellulose market size was valued at_US$ 1,298.58 million in 2024. It is projected to reach_US$ 1385.59 million by 2025_ and_ US$ 2,327.82 million by 2033, growing at a_CAGR of 6.7%_during the forecast period (2025–2033).

Growing usage in different industrial segments

- Regulatory approvals for MCC as a safe additive contribute to its growing popularity across various industrial sectors.

- Technological advancements in production processes have improved both quality and cost efficiency.

- Manufacturers are focusing on sustainable sourcing and biodegradable MCC to meet environmental regulations and consumer demand for green products.

- Increased adoption of low-calorie and _bre-rich foods among health-conscious consumers in both developed and developing countries typically incorporates MCC.

- Rising demand from the pharmaceutical industry is due to the extensive use of MCC as an excipient.

- Enhanced focus on personal appearance and health, including hygiene, skin, and hair care, fuelling market growth for MCC.

Opportunities

1. Expansion in Emerging Markets: Rising disposable incomes and pharmaceutical growth in Asia-Pacific and Latin America present significant expansion opportunities for MCC suppliers.

2. Innovative Applications: MCCs potential in 3D printing (as a binder), nutraceuticals, and plant-based meat alternatives opens new revenue streams.

3. Clean Label & Natural Ingredients: The shift toward clean-label products in food and cosmetics creates demand for MCC as a natural, non-GMO, and allergen-free additive.

4. Partnerships & R&D Investments: Collaborations between MCC producers and end-user industries can drive product innovation and customised solutions for niche markets.

INDIAN MCC MARKET

The leading global exporters of Microcrystalline Cellulose are India, Ireland, and Taiwan. Indias leadership position is supported by a well-established manufacturing and exporting infrastructure. Between November 2023 and October 2024, India tops the list with 18,810 shipments, while Ireland follows with 10,707 shipments, and Taiwan ranks third with 6,034 shipments. The domestic microcrystalline cellulose market size reached US$ 43.77 million in 2024. The market is expected to reach US$ 64.15 million by 2033, exhibiting a growth rate (CAGR) of 4.34% from 2025-2033. The Indian microcrystalline cellulose market share is expanding, driven by the growing user awareness about eco-friendly packaging and stringent environmental regulations, along with increasing investments in research, enabling the development of refined items with better water absorption.

Sustainability push: Microcrystalline cellulose (MCC) is preferred as a sustainable material because it is derived from renewable plant-based sources like wood or cotton, processed with minimal environmental impact, and aligns with eco-friendly trends in many industries.

Defining Market Trends

Increasing demand in the paper and packaging industry: The increasing demand in the paper and packaging sector is creating a positive outlook for the microcrystalline cellulose market in India. This substance is commonly used in paper production to enhance the strength, texture, and durability of the paper items.

Health-Conscious Food industry: Increasing consumer demand for low-calorie, plant-based, and clean-label foods boosts the

Growth drivers for the industry

Strong Domestic Production: India has a well-developed MCC manufacturing industry capable of producing high-quality products.

Cost-Competitiveness: The cost of MCC produced from non-wood sources, like agricultural waste, is lower than that of wood-based MCC, making Indian MCC competitively priced in the global market.

Growing Global Demand: The increasing demand for MCC in various industries, including pharmaceuticals, food, and cosmetics, provides a strong foundation for export growth. Government Support: The Indian government promotes exports through various initiatives and policies. use of MCC as a stabiliser, fat replacer, and anti-caking agent in functional foods and dietary supplements, reflecting Indias health-conscious trends market.

Sustainable Production: Manufacturers are increasingly turning to eco-friendly, plant-based ingredients, prompting a shift towards sustainable methods of MCC production, such as utilising non-wood sources and advancements in biorefinery, all backed by government policies focused on sustainability. Cosmetics Industry Growth: The Indian beauty market is expanding at a significant rate, is progressively incorporating MCC for its texturising and moisture-retaining benefits in skincare and personal care products, influenced by trends in premiumisation.

COMPANY OVERVIEW

About the Company

Founded in 1989, Sigachi Industries Limited (Sigachi) has emerged as one of the leading Microcrystalline Cellulose (MCC) manufacturer worldwide. The Company has a diverse portfolio comprising of high-quality Excipients, Co-processed Excipients, Pre-formulated Excipients, APIs and Intermediates, Vitamin-Mineral-Nutrient Blends and O&M Services. With over three decades of industry expertise, Sigachi is a trusted partner to pharmaceutical, nutraceutical, and functional food manufacturers across more than 65 countries.

The Company operates five state-of-the-art manufacturing facilities spread across Gujarat, Telangana, and Karnataka, with a consolidated production capacity exceeding 34000 Metric Tons Per Annum (MTPA), enabling scalable and efficient output across its product portfolio.

Beyond its core MCC business, Sigachi has strategically diversified itsoperationsintoadjacentsectors,includingspecialitychemicals, petrochemical applications, advanced water treatment solutions, and pharmaceutical plant operations. This expansion reflects the Companys vision of becoming a comprehensive solutions provider in the chemical and pharmaceutical sectors.

Sigachis growth philosophy is anchored in its core purpose of "Building A Healthier, Happier and Joyful World Together". This guides product development, manufacturing practices, and corporate social responsibility initiatives.

The Company has a strong focus on sustainable operations, technological innovation, continuous R&D investment and regularly upgrading product offerings to align with global industry trends and environmental considerations.

The Growth Journey

Sigachis global expansion strategy has achieved significant milestones through planned joint ventures and acquisitions. The Company partnered with iMass Investments via Sigachi MENA FZCO, a wholly owned subsidiary of Sigachi Industries Limited to target the UAEs growing food and pharmaceutical markets. Additionally, Sigachi MENA FZCO, a wholly owned subsidiary of Sigachi Industries Limited and Saudi National Projects Investment Ltd (SNP), an advisory investment firm together established Sigachi Arabia as a holding company for Middle Eastern operations, with plans for a manufacturing facility in Riyadh in three years, initially serving Saudi Arabia and expanding to other GCC markets. The ventures follow a 75:25 ownership structure, with Sigachi retaining majority control and leveraging local expertise.

To integrate its pharmaceutical offerings, Sigachi acquired a majority stake in Trimax Bio Sciences, a USFDA, EMEA, and WHO-compliant API manufacturer. This enhances Sigachis active pharmaceutical ingredients capabilities, complementing its excipients business. The agreement allows for the potential acquisition of the remaining stake after three years, with the valuation based on financial performance metrics.

These investments position Sigachi for growth in domestic and international markets, enhancing its capacity to deliver solutions across the pharmaceutical value chain. By committing to innovation, forming strategic partnerships, and pursuing operational excellence, Sigachi solidi_es its role as a global leader in speciality ingredients and pharmaceutical solutions.

Business Overview

1) Microcrystalline Cellulose (MCC)

The Company manufactures MCC in more than 60 different grades, with particle sizes varying from 15 microns to 250 microns. Sigachi serves diverse industries, such as pharmaceutical, food, nutraceutical and cosmetics.

The Company sells its cellulose-based products under the following brands.

HiCelTM

AceCelR

CoatCelR

GloCelR

BARETabR

Di_erent drying techniques are employed to distinguish the products. Additionally, the Company produces multiple grades of the product, incorporating a variety of chemicals, including colloidal silicon dioxide and carboxy cellulose sodium and mannitol, etc.

The Road Ahead

Sigachi is strategically positioned for strong growth, with our Middle East JVs and API expansion opening new opportunities. Progress on CEP filings and our upcoming Dahej SEZ facility will enhance our regulated market presence and excipient capabilities. The GAIN-approved Sultanpur facility strengthens our nutrition segment while continuous R&D drives innovation across our pharma and food portfolios.

With operations in over 65 countries and a diversified product range, we remain focused on sustainable growth through quality, innovation and strategic partnerships - delivering long-term value to all stakeholders. Our future is built on excellence across the pharmaceutical and nutrition value chains.

2) Operations and Management

The Operations and Management (O&M) sector thrives in India and internationally. Sigachi will continue to focus on speciality chemicals, petrochemicals, water treatment, and pharmaceutical plants.

This growth in the manufacturing O&M industry can be attributed to several significant factors:

- Industrial Expansion in Core Sectors: The speciality chemicals and pharmaceutical industries, supported by Make in India and PLI schemes, drive O&M demand for maintaining complex reactors and API plants, while petrochemicals require robust upkeep of refining units.

- Technological Advancements and Industry 4.0: AI, IoT, and predictive maintenance optimise efficiency in water treatment plants and petrochemical facilities, ensuring compliance with stringent quality standards in pharma and speciality chemicals.

- Efficiency and Asset Longevity: Preventive O&M minimises downtime in high-value equipment like distillation columns (petrochemicals) and _ltration systems (water treatment), extending asset life and boosting productivity in pharmas 752+ USFDA-approved plants.

- Skilled Workforce Needs: Complex speciality chemicals and water treatment processes demand specialised O&M expertise, addressing talent shortages as firms prioritise R&D and production. Regulatory and Sustainability Compliance: O&M ensures adherence to environmental norms in water treatment (e.g., ZLD compliance) and petrochemicals while supporting green chemistry and waste reduction in pharma.

- Urbanisation and Sectoral Growth: Rising demand for clean water and speciality chemicals, driven by urbanisation (41% urban population), fuels O&M for treatment plants and chemical manufacturing units.

- Government Support and Cost-Effective Models: PLI schemes, Aatmanirbhar Bharat, and subscription-based O&M models with rapid deployment enhance cost efficiency, supporting high-growth sectors like petrochemicals and pharma.

Research & Development

For over three decades, Sigachi has been at the forefront of the excipient sector, achieving consistent growth through a focus on innovation, quality, and customer trust. Our cutting-edge R&D facility — recognised by the Government of India under the Ministry of Science and Technology and accredited by the Department of Scientific and Industrial Research (DSIR) — provides comprehensive capabilities for pharmaceutical development, from early-stage formulation design to full-scale commercial production.

Our expertise is reinforced by seven granted patents in cellulose and excipient technologies, reflecting our ability to deliver distinctive, high-quality solutions to clients worldwide. To further strengthen customer engagement, we operate the_"Ask an Expert"_online platform, giving partners direct access to our technical knowledge and problem-solving capabilities.

The strategic addition of an API manufacturing unit, together with the launch of the new_Sigachi API R&D Centre in Hyderabad, has expanded our capabilities into the active pharmaceutical ingredient space. This synergy between our excipient expertise and API development enables us to provide complete, integrated solutions. The new API R&D Centre is equipped with advanced infrastructure and skilled scientists, enabling the creation of cost-e_cient, sustainable, and globally compliant manufacturing processes.

We continue to optimise production efficiency, maintain stringent quality standards, and leverage proprietary in-house technologies to enhance our competitiveness. Guided by our purpose —_ to build a healthier, happier, and more joyful world_— we remain dedicated to being the partner of choice for pharmaceutical companies across the globe, delivering value through innovation, reliability, and performance.

Quality

Sigachi is dedicated to provide value by advancing operational excellence and innovation. Its commitment to quality is reflected in strict adherence to international manufacturing standards and ongoing investment in research and development, ensuring products meet evolving industry needs while maintaining a competitive edge in a demanding global marketplace.

To support innovation and regulatory compliance, Sigachi invests in its R&D centres, which uphold quality assurance standards and drive process optimisation.

Sigachi holds a Certificate of Suitability (CEP) for Microcrystalline Cellulose from the EDQM for its three approved MCC manufacturing units. The Company also filed over 18 Type IV DMFs with the USFDA for various excipient grades, reinforcing its global regulatory standing and readiness for regulated markets.

Financial Performance Financial highlights

Particulars	FY 25	FY 24	FY 23	FY 22	FY 21
Revenue from operations	4,882	3,989	3,020	2,503	1,928
Gross Profit	2,275.25	1,727.20	1,391.80	1,118.40	738.40
EBITDA	1,120	766	587	531	388
EBITDA margin	22.38	19.2	19.43	21.21	20.12
PAT	705	572	436	400	303
PAT Margin	14.09	14.34	14.43	15.98	15.72
Cash flow from Operations	269.32	128.91	290.16	58.5	295.51
ROCE	16	16	19	22	39

Key ratios

Particulars	FY 2024-25	FY 2023-24	% change
Debtors Turnover (no. of days)	125	137.27	-8.93%
Inventory Turnover (no. of days)	136	58.95	130.70%
Current Ratio (in times)	2.13	1.67	27.72%
Debt Equity Ratio (in times)	0.19	0.29	-33.07%
Operating Profit Margin (in %)	19.22	21.51	-10.64%
Net Profit Margin (in %)	14.09	14.34	-1.74%
Return on Net Worth (in %)	16.45	16.41	0.24%

Disclosure of accounting treatment

The Company followed the necessary accounting procedures and made sure they were implemented consistently. No variations from the procedure outlined in the accounting rules announced under Section 133 of the 2013 Companies Act have occurred.

Internal Control System and Its Adequacy

Effective internal controls are vital for mitigating financial risks and ensuring the accuracy, integrity, and reliability of the Companys financial reporting. Sigachi has established a robust internal financial control framework that aligns well with its nature, scope, and complexity.

The Companys internal control systems are adequate, efficient, and continuously monitored, ensuring compliance with applicable statutory and regulatory requirements. Regular assessments by the Audit Committee help evaluate the effectiveness of these controls, with particular focus on financial accuracy and risk-based governance practices.

Sigachi remains committed to maintaining transparent accounting records and a strong compliance culture, thereby reinforcing stakeholder confidence and supporting long-term financial sustainability.

Human Resources

At Sigachi Industries Limited, our people are the foundation of our success and the driving force behind our ability to innovate, deliver quality, and grow sustainably. We see our workforce not just as employees, but as partners in building the Companys vision and fulfilling its purpose —fito create a healthier, happier, and more joyful world.

This purpose guides the way we develop, engage, and empower our teams. We make focused investments in talent development, equipping individuals with the skills, resources, and environment needed to achieve excellence. Every employee is encouraged to take ownership of impactful projects that align with both their personal aspirations and Sigachis long-term goals, creating a shared sense of purpose and accountability.

We cultivate a workplace where innovation, ownership, and continuous learning are integral to daily operations. Our inclusive and performance-oriented culture ensures that each person is valued, respected, and inspired to contribute meaningfully to our mission. By embedding our purpose into every facet of our HR approach, we enable our people to thrive — professionally and personally — while collectively advancing Sigachis vision of delivering sustainable pharmaceutical solutions that improve lives and well-being across the globe.

Awards and Accolades

1. National Award for Small-Scale Entrepreneurs (1993)

2. State Awards for outstanding Entrepreneurship, AP (1997 -98)

3. DSIR Approval of R&D Lab (2006)

4. GOI Approval for setting up SEZ unit (2009)

5. MSME National Award (2010)

6. National Innovation Award for MSMEs (2011 – Winner)

7. National Award for Outstanding Entrepreneurship (2011 – 2^nd Prize)

8. Small Giants Award (2014)

9. DHL & Zee Business Award (2015)

10. Company of the year – Pharmaceutical, Dare to Dream Award (2018)

11. National Best Employer Brand (2018)

12. Business Leader of the Year (2019)

13. Silver Star HR Award (2020)

14. Top 100 SME Award (2022)

The Company has received several accolades due to their expertise in building world-class products and delivering excellent services to consumers worldwide. Furthermore, Sigachis facilities are EXCiPACT GMP, SGMP, HACCP, EDQM CEP and ISO 9001:2015 certified.

Disclaimer

Certain statements about future prospects in this section may be forward-looking statements, which involve a number of underlying, identified or unidentified risks and uncertainties that could cause actual results to differ materially from those projected. In addition to the aforementioned macro-environmental changes, the Russian-Ukraine war and Red Sea Crisis might present an unanticipated, unexpected, unknowable and ever-evolving danger, among other things, to the Company and the environment in which it operates. Some of the facts and numbers in the study have been derived from the outcomes of these assumptions, which were based on accessible internal and external information. The estimations on which these assumptions are based are liable to change since the underlying variables are dynamic in nature. Any forward-looking statement provided here only reflects the Companys objectives, beliefs and current expectations and only as of the date on which it was made. It may be revised or updated by the Company at any time without notice in response to new information, unexpected