Speciality Medicines Ltd Management Discussions

OPERATIONS

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended on March 31, 2025, March 31, 2024, March 31, 2023. You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Draft Red Herring Prospectus. You should also read the section entitled "Risk Factors" beginning on page 25 of this Draft Red Herring Prospectus, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Speciality

Medicines Limited (erstwhile " Speciality Medicines Private Limited "), our Company. Unless otherwise indicated, financial information included herein are based on our "Restated Financial Statements" for Financial Year ended on

March 31, 2023, March 31, 2024, and March 31, 2025, included in this Draft Red Herring Prospectus beginning on page 211.

BUSINESS OVERVIEW

We are engaged in the business of marketing and distribution of finished formulations of specialty pharmaceutical products, comprising of high-cost oral and injectable medications used in the treatment of complex and chronic medical conditions in therapeutic areas like oncology, immunology, neurology and rare diseases. We offer a diverse portfolio of specialty pharmaceutical products, focusing on various therapeutic areas such as oncology, immunology, neurology, and rare diseases. Our products which are offered in such areas are available in a wide range of dosage forms like Tablets, Capsules, Cream, Syrups, Eye Drops, Gel, Infusion, Inhalation, Inhaler, Injection, Nasal Spray, Ointment, Ophthalmic, Oral Solution, Oral Suspension, Sachet and Suspension. We operate through two integrated business models: (a) Manufacturing, through contract manufacturing basis, of approved finished formulations and distribution internationally and (b) Marketing and distribution of specialty pharmaceutical products sourced from manufacturers.

Under our contract manufacturing arrangement, our contract manufacturer based in India is responsible for the manufacturing of speciality pharmaceutical formulations. These formulations are either approved or currently undergoing the approval process with the relevant health authorities in the target countries. Once the necessary regulatory approvals are obtained, we initiate our role as the distributor for these products. Our responsibilities include overseeing the marketing and distribution of the approved specialty pharmaceutical products across multiple international markets.

Under our other business model, we operate as a distributor of specialty pharmaceutical products sourced from manufacturers. Our role focuses on the procurement, warehousing, and wholesale distribution of these medicines to a wide network of healthcare providers and retailers. We ensure smooth supply chain operations and timely delivery across various regions. Our services are centred on maintaining consistent product availability and supporting our customers through reliable and efficient distribution.

Through this dual-model approach, our company effectively distributes and markets specialty pharmaceutical products across India and overseas, maintaining a strong focus on quality and regulatory compliance. We have established our presence in international markets through products that are either registered or in the process of registration in countries which includes Jordan, Ethiopia, Uganda, Peru and Namibia. We have, through our distributions, established good relationship with our customers spreading across more than 20 states of India and more than 35 countries all over the world.

Specialty medicines are pharmaceutical products designed to treat complex, chronic, or rare conditions. Unlike traditional drugs, which are typically prescribed for common illnesses and follow simpler manufacturing processes, specialty medicines are characterized by their advanced therapeutic properties and the complexity of their development, handling, and administration.

Specialty medicines are characterized by their use in treating complex or rare diseases such as cancer, rheumatoid arthritis, multiple sclerosis, haemophilia, and genetic disorders, where standard therapies are often ineffective. They involve advanced technologies like biologics and gene therapies, making their research, development, and manufacturing highly sophisticated and costly, which results in higher prices compared to conventional drugs. These medicines also require complex administration and handling, often needing refrigeration, injections, or infusions delivered in clinical settings or through specialty pharmacies. Additionally, they are supported by patient education, adherence programs, and ongoing monitoring to ensure effective treatment outcomes.

Our product portfolio comprises of wide range of therapeutic drugs namely ACE inhibitors, Analgesic, Antiulcer, Anti angiogenic, Anti Erectile Dysfunction, Anti fibrinolytic, Anti histamine, Anti-inflammatory, Anti-ulcer, Anti-acne, Antianxiety, Antiarrhythmic, antiarrhythmic agent, Antibiotic, Antibiotic, Anticancer, Anticholinergics, Anticoagulant, Anticonvulsant, Antidepressant, Antidiabetic, Antidiuretics, Antiemetics, Antifungal, Anti-gastric, Antihistaminic, Antihypertensive, Antimalarial, Antiparasitic, Antiprotozoal, Antipsychotic, Antipyretic, Antiretroviral, Anti-seizure, Antispasmodic, Anti-vertigo, Antiviral, Asthma, Beta blocker, Chronic Obstructive Pulmonary Disease, Corticosteroids, Dermatology, Hyperprolactinemia, Immuno-suppressive, Iron deficiency, NSAIDs, Ocular-hypertension, selective relaxant binding agent, Urology, Vaso constrictor. Our product portfolio consists of more than 900 products, as on March 31, 2025. We operate under different brand names across the globe. Moreover, as on March 31, 2025, we have 1 product registered overseas and total 60 products are under process of registration in 5 countries, which will provide revenue to the company.

Our Company was originally incorporated as "Speciality Medicines Private Limited" as a Private Limited Company, under the provisions of the Companies Act, 2013 vide Certificate of Incorporation dated February 05, 2021, issued by the Registrar of Companies, Central Registration Centre. Later on, pursuant to a special resolution passed by our Shareholders in the Extra-Ordinary General Meeting held on April 04, 2024, our Company was converted from a private limited company to public limited company and consequently, the name of our Company was changed from "Speciality Medicines Private Limited" to "Speciality Medicines Limited" and a fresh certificate of incorporation dated June 25,

2024 was issued to our Company by the Registrar of Companies, Central Registration Centre. The Corporate Identification Number of our Company is U85300GJ2021PLC120022. For details of change in registered office of our

Company, please refer to chapter titled "History and Corporate Structure" beginning on page 178 of this Draft Red Herring Prospectus.

Our Company plans to establish a Research and Development (R&D) Center to manage R&D and formulation processes internally. This new R&D center will be equipped with modern laboratories, pilot-scale manufacturing units, stability chambers, and advanced analytical instruments such as HPLC, GC and other equipment required for pre-formulation, formulation development, analytical method validation, stability testing and scale-up processes in compliance with Good Laboratory Practices. It will enable us to undertake pre-formulation studies, formulation development for solid orals, injectables, ophthalmic and nasal preparations, analytical method development and validation, stability testing as per ICH (International Council for Harmonisation) guidelines, and scale-up/technology transfer activities in compliance with Good Laboratory Practices (GLP). The centre is expected to facilitate the development of differentiated dosage forms such as controlled-release tablets, fixed-dose combinations, and orphan drug formulations. It will also support line extensions of existing products, such as developing paediatric-friendly syrups from adult formulations or introducing novel packaging formats to improve patient compliance.

Our Promoters, Parth Goyani and Sumit Goyani, have been associated with the Company since its incorporation. In todays dynamic and highly competitive pharmaceutical landscape, they have established a diversified business model under their leadership. They continue to serve as the foundation of our progress, instilling a strong value system at the core of our operations.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR:

In the opinion of the Board of Directors of our Company, there have not arisen, since the date of March 31, 2025 as disclosed in this Red Herring Prospectus, any significant developments or any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months.

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, "Annexure IV" beginning under

Chapter titled "Restated Financial Statements" beginning on page 211 of the Draft Red Herring Prospectus.

KEY FINANCIAL KPI OF OUR COMPANY

	Speciality Medicines Limited
Metric	As of and for the Fiscal
	2025	2024	2023
Revenue From operations ( in lakhs)	5,827.14	2,752.48	2,317.50
Total revenue ( in lakhs)	5,853.96	2,765.72	2,319.90
EBITDA ( in lakhs)	909.21	526.08	357.77
EBITDA Margin (%)	15.60%	19.11%	15.44%
Profit after tax ( in lakhs)	860.82	293.36	169.61

 

	Speciality Medicines Limited
Metric	As of and for the Fiscal
	2025	2024	2023
PAT Margin (%)	14.77%	10.66%	7.32%
Return on Equity (ROE) (%)	37.96%	27.95%	42.69%
Debt To Equity Ratio	0.17	0.19	0.61
Interest Coverage Ratio	18.82	8.32	9.35
Return on Capital Employed (ROCE) (%)	33.47%	36.90%	50.22%
Current Ratio	5.36	3.12	1.84
Net Capital Turnover Ratio	2.66	2.83	9.01

REVIEW OF RESTATED FINANCIALS

Principle Components of our Restated Statement of Assets & Liabilities

Fiscal 2025 Compared with Fiscal 2024:

( in lakhs)

Particulars	For the year ended on		Increase/ (Decrease)
	March 31, 2025	March 31, 2024	Amount	%
Liabilities
Long- Term Borrowings	260.84	84.53	176.31	208.58%
Short Term Borrowings	243.84	201.30	42.54	21.13%
Trade payables- Due to Others	97.11	241.49	-144.38	-59.79%
Assets
Non-current Investments	10.15	9.96	0.19	1.91%
Long term loan and advances	3.00	3.00	0.00	0.00%
Short term loan and advances	773.35	121.98	651.37	533.99%
Trade receivables	958.28	1071.32	-113.04	-10.55%
Inventories	1737.60	803.14	934.46	116.35%

Long-Term Borrowings

Long-term borrowings increased by 176.31 lakhs i.e. 208.58%, from 84.53 lakhs in fiscal 2024 to 260.84 lakhs in fiscal 2025. primarily to support the growing funding needs of the company. The additional borrowings were undertaken to finance higher export orders, meet trade-related obligations in a timely manner.

Short-Term Borrowings

Short-term borrowings increased by 42.54 lakhs, representing a 21.13% increase from 201.30 lakhs in Fiscal 2024 to 243.84 lakhs in Fiscal 2025. This increase was primarily driven by borrowings for working capital and due to the reclassification of the current maturities of long-term borrowings amounts due within the next 12 months under short-term borrowings to support business operations.

Trade Payable

Trade payables decreased by 144.38 lakhs i.e. 59.79%, decreased from 241.49 lakhs in fiscal 2024 to 97.11 lakhs in fiscal 2025. The decrease was primarily due to deliberate shift in the companys working capital strategy, opting to settle outstanding supplier invoices more rapidly to capitalize on early payment discounts, strengthen supplier relationships for better terms in the future, or improve its creditworthiness.

Non-current Investment

Non-current investments comprise the companys investment in equity shares of private limited companies. Investment increased by 0.19 lakhs i.e. 1.91%, increased from 9.96 lakhs in fiscal 2024 to 10.15 lakhs in fiscal 2025. The increase was primarily due to increase in investment in equity shares.

Long-term loans and advances

There is no movement in Long-term loans and advances, the same is for security deposits made by the company in respect of rented office premises, which remain unchanged.

Short-term loans and advances

Short-term loans and advances increased by 651.37 lakhs i.e. 533.99%, increase from 121.98 lakhs in fiscal 2024 to 773.35 lakhs in fiscal 2025. This increase is primarily due to increase in advance to suppliers.

Trade Receivables

Trade receivables had decreased by 113.04 lakhs i.e. 10.55%, falling from 1,071.32 lakhs in fiscal 2024 to 958.28 lakhs in fiscal 2025. The decrease in trade receivables is primarily due to company focused on timely recovery from customers, reduction in credit cycle.

Inventories

The inventory of stock-in-trade increased by 934.46 lakhs, rising from 803.14 lakhs in Fiscal 2024 to 1737.60 lakhs in Fiscal 2025. The increase is primarily attributable to higher procurement of goods to support anticipated demand and ensure adequate stock availability. Additionally, management has consciously built-up inventory levels to mitigate supply chain uncertainties and to maintain uninterrupted sales operations.

Fiscal 2024 Compared with Fiscal 2023:

( in lakhs)

Particulars	For the period ended March 31,		Increase/ (Decrease)
	2024	2023	Amount	%
Liabilities
Long- Term Borrowings	84.53	116.55	-32.02	-27.48%
Short Term Borrowings	201.30	247.43	-46.13	-18.64%
Trade payables- Due to Others	241.49	180.22	61.27	34.00%
Assets
Non-current Investments	9.96	9.96	0.00	0.00%
Long term loan and advances	3.00	3.00	0.00	0.00%
Short term loan and advances	121.98	71.34	50.64	70.99%
Trade receivables	1071.32	550.59	520.73	94.58%
Inventories	803.14	459.54	343.60	74.77%

Long-Term Borrowings

Long-term borrowings decreased by 32.02 lakhs i.e. 27.48%, from 116.55 lakhs in fiscal 2023 to 84.53 lakhs in fiscal 2024. This decline is primarily attributable to the repayment of existing loans during the fiscal year. The company focused on reducing its financial leverage by settling a portion of its long-term debt, which also resulted in lower interest obligations. Additionally, there were no significant new long-term borrowings raised in the period.

Short-Term Borrowings

Short-term borrowings decreased by 46.13 lakhs, representing a 18.64% decrease from 247.43 lakhs in Fiscal 2024 to 201.30 lakhs in Fiscal 2023. This reduction is primarily due to the company repaying a portion of its short-term debt during the fiscal year.

Trade Payable

Trade payables increased by 61.27 lakhs i.e. 34.0%, increased from 180.22 lakhs in fiscal 2023 to 241.49 lakhs in fiscal 2024. The increase was primarily due to higher procurement of goods and services in line with business growth, along with extended credit terms from suppliers.

Non-current Investment

There is no movement in Non-current investments, the same is towards investment made in equity shares.

Long-term loans and advances

There is no movement in Long-term loans and advances, the same is for security deposits made by the company in respect of rented office premises, which remain unchanged.

Short-term loans and advances

Short-term loans and advances increased by 50.64 lakhs i.e. 70.99%, increase from 71.34 lakhs in fiscal 2023 to

121.98 lakhs in fiscal 2024. This increase is primarily due to increase in advance to suppliers.

Trade Receivables

Trade receivables had increased by 520.73 lakhs i.e. 94.58%, increasing from 550.59 lakhs in fiscal 2023 to

1071.32 lakhs in fiscal 2025. The increase in trade receivables is primarily due to extended credit terms offered to customers.

Inventories

The inventory of stock-in-trade increased by 343.60 lakhs, rising from 459.54 lakhs in Fiscal 2023 to 803.14 lakhs in Fiscal 2024. The increase is primarily attributable to higher procurement of goods to support anticipated demand and ensure adequate stock availability. Additionally, management has consciously built-up inventory levels to mitigate supply chain uncertainties and to maintain uninterrupted sales operations.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION:

Our Companys future results of operations could be affected potentially by the following factors:

1. General economic conditions in India, changes in laws and regulations.

2. Changes in revenue mix, including geographic mix of our revenues.

3. Changes in Fiscal, Economic or Political conditions in India.

4. Increased market fragmentation.

5. Competition with existing and new entrants

6. Seasonal variations and availability / shortage of fresh vegetables as same being the principal raw material used for manufacturing of our products

7. Dependency on few key customers

8. Technology System and Infrastructure Risks

RESULTS OF KEY OPERATIONS

Income Statement Items

The following table sets forth select financial data from our restated financial statement of profit and loss for the financial years ended March 31, 2025, 2024 and 2023 the components of which are also expressed as a percentage of total revenue for such period and financial years.

( in lakhs)

Particulars	For the year ended on
	March 31, 2025	% of Total Income	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income
Revenue from Operations	5,827.14	99.54%	2,752.48	99.52%	2,317.50	99.90%
Other Income	26.83	0.46%	13.24	0.48%	2.40	0.10%
Total Income	5,853.96	100.00%	2,765.72	100.00%	2,319.90	100.00%
Purchases of stock in trade	5,151.66	88.00%	2,163.91	78.24%	2,038.62	87.88%
Changes in inventories of stock-	-934.47	-15.96%	-343.60	-12.42%	-434.70	-18.74%
in-trade
Employee benefit expenses	208.33	3.56%	147.77	5.34%	141.44	6.10%
Finance cost	47.27	0.81%	60.47	2.19%	35.10	1.51%
Depreciation & amortization expense	19.76	0.34%	23.19	0.84%	29.50	1.27%
Other expenses	492.42	8.41%	258.33	9.34%	214.38	9.24%
Total Expenses	4,984.96	85.16%	2,310.07	83.52%	2,024.33	87.26%
Profit Before Tax	869.00	14.84%	455.66	16.48%	295.57	12.74%
Total tax	8.18	0.14%	162.30	5.87%	125.95	5.43%
Profit for the Year	860.82	14.70%	293.36	10.61%	169.61	7.31%

Revenue from Operations: Revenue from operations which consists of Sales of specialty pharmaceutical finished formulation in domestic and international market and further bifurcation into registered and unregistered medicine for the Fiscals 2025, 2024 and 2023 have been provided below:

( in lakhs)

Particulars	For the year ended March 31, 2025	% Total amount of revenue from operations	For the year ended March 31, 2024	% Total amount of revenue from operations	For the year ended March 31, s2023	% Total amount of revenue from operations
Domestic Sales
Registered Products	-	-	-	-	-	-
Unregistered Products	1,798.80	30.87%	1,169.76	42.50%	661.90	28.56%
Export Sales
Registered Products	-	-	74.50	2.71%	317.54	13.70%
Unregistered Products	4,028.34	69.13%	1,508.22	54.79%	1,338.06	57.74%
Total	5,827.14	100.00%	2,752.48	100.00%	2,317.50	100.00%

Other Income: Other income includes Foreign Exchange Fluctuation gains, Interest income, Export Benefit and Other Miscellaneous Income.

Total Income: Our total income comprises revenue from operations and other income.

Total Expenses: Companys total expenses consist of Purchases of stock in trade, Changes in inventories of Stock-in-trade, Employee benefit expenses, Finance cost, Depreciation and amortization expense, and other expenses.

Changes in inventories of Stock-in-trade: Changes in inventories consists of costs attributable to an increase or decrease in inventory levels during the relevant financial period in Stock-in-trade.

Employee Benefits Expense: Employee benefit expense includes Salary to Staff, Salary to Workers, Directors

Remuneration, Bonus, Gratuity and Employee welfare & other expenses.

Finance Cost: Finance cost includes Interest to financial institutions and Bank Commission & Charges.

Other expenses: Other expenses mainly consist of Travelling Expenses, Dossier Expenses, ROC Charges, Consultancy & Legal Fees etc.

COMPARISON OF F.Y. 2025 WITH F.Y. 2024:

Revenue from Operations

The Companys revenue from operations for the financial year 2024-25 was 5,827.14 lakhs as compared to 2,752.48 lakhs in the financial year 2023-24, reflecting an increase of 3,074.66 lakhs or 111.71%.

The increase in revenue was primarily attributable to higher sales of unregistered products. Sales in the domestic market increased by 629.04 lakhs or 53.78%, while sales in the export market increased by 2,520.12 lakhs or 167.09% during the same period.

The growth in export revenues was driven by penetration into new geographies across Africa, Asia, Europe and Latin America, where the demand for affordable unregistered generic products has been increasing. The Company has also strengthened relationships with international distributors and agents, which has resulted in higher order volumes and repeat business.

Further, the Companys competitive pricing strategy enabled it to capture higher volumes while maintaining margins.

In addition, through participation in exhibitions and marketing initiatives, the Company was able to achieve new product additions from existing clients, particularly in Armenia, Brazil and Italy.

Other Income

Other Income in the financial year 2024-25 increased by 13.58 lakhs or 102.56%, reaching 26.83 lakhs in comparison to the 13.24 lakhs incurred in the Financial Year 2023-24. This increase was primarily due to increase in Foreign Exchange Fluctuation gains by 7.49 lakhs as compared to last year and due to benefits received under RoDTEP scheme in financial year 2024-25.

Purchases of stock in trade

Purchases of stock in trade amounted to 5,151.66 lakhs in the financial year 2024-25, which constitutes 88.00% of total income.

Changes in inventories of Stock-in-trade

There was an increase of 590.87 lakhs for Fiscal 2025 as compared to an decrease of 91.10 lakhs for Fiscal 2024, primarily attributable to a higher inventory of Stock-in-trade at the end of Fiscal 2025.

Employee Benefits Expenses

Employee benefit expenses in the Financial Year 2024-25 increased by 60.56 lakhs or 40.99%, reaching 208.33 lakhs in comparison to the 147.77 lakhs incurred in the Financial Year 2023-24. This rise in employee benefit expenses primarily stemmed from increases in Director remuneration which went up by 59.58 lakhs.

Finance Costs

Finance Costs in the Financial Year 2024-25 decreased by 21.83% or 13.20 lakhs, reaching 47.27 lakhs in comparison to the 60.47 lakhs incurred in the Financial Year 2023-24. This fall primarily stemmed from decreased in Interest to Bank, Financial institutions and related parties which reduced by 24.66 lakhs, however the same was offset by an increase in other borrowing costs by 11.46 lakhs.

Depreciation and amortization expenses

Depreciation and amortization expenses for the Financial Year 2024-2025, amounted to 19.76 lakhs constituting 0.34% of total income.

Other Expenses

Other expenses in the Financial Year 2024-25 increased by 90.62% or 234.09 lakhs, reaching 492.42 lakhs in comparison to the 258.33 lakhs incurred in the Financial Year 2023-24. This increase in other expenses was attributed to several factors, including 133.76 lakhs increase in Customs House Agent & Air Freight Charges, 24.49 lakhs increase in Commission Expenses, 32.84 lakhs increase in Dossier Expenses, Registration charges of 31.27 lakhs and 10.40 lakhs increase in Travelling Expenses.

Tax Expenses

Tax expenses decreased by 154.12 lakhs or 94.96%, reaching a total of 8.18 lakhs in the financial year 2024-25, in contrast to tax expense of 162.30 lakhs in the financial year 2023-24. This significant reduction is primarily due to the benefits availed under Section 80-IAC of the Income Tax Act, 1961.

Profit after Tax (PAT)

Due to the aforementioned factors, the profit experienced an upswing, primarily driven by the growth in total income and a decrease in total expenses as a percentage of total income. The Profit After Tax (PAT) for the financial year 2024-

25 reached 860.82 lakhs, marking a notable increase from 293.36 lakhs in the financial year 2023-24. In the financial year 2024-25, PAT constituted 14.70% of the total revenue, in contrast to 10.61% in the fiscal year 2023-24.

Rationale for increase in Profit after Tax (PAT) compared to Revenue from Operation

The increase in Profit after Tax (PAT) compared to Revenue from operation is mainly on account of:

Substantial Growth in Revenue from Operations:

Revenue from operations increased by 111.71% in FY 2024-25, primarily attributable to higher sales of unregistered products. Sales in the domestic market increased by 629.04 lakhs or 53.78%, while sales in the export market increased by 2,520.12 lakhs or 167.09% during the same period. The higher sales base provided operating leverage, allowing fixed costs to be absorbed more efficiently, thereby enhancing margins.

Favorable Product Mix:

The shift in focus towards high-demand and cost-effective formulations further strengthened contribution margins. The Company was able to achieve new product additions from existing clients, particularly in Armenia, Brazil and Italy.

Operational Efficiency and Cost Control:

Better utilization of resources, optimization of distribution channels, and negotiation of favorable procurement terms with suppliers contributed to cost savings. There was also a 21% reduction in finance cost in FY 25.

Strategic Market Expansion:

Entry into new international such as Africa, Asia, Europe and Latin America, and stronger relations with distributors ensured consistent bulk orders, reducing sales and marketing costs per unit.

Tax Exemption:

The company availed income tax exemption benefits under Section 80-IAC of the Income Tax Act. This significantly reduced the overall tax liability by 94.96% or 154.12 lakhs, thereby enhancing the Profit After Tax (PAT)

COMPARISON OF F.Y. 2024 WITH F.Y. 2023:

Revenue from Operations

The Companys revenue from operations for the financial year 2023-24 was 2,752.48 lakhs as compared to 2,317.50 lakhs in the financial year 2022-23, reflecting an increase of 434.98 lakhs or 18.77%.

The increase in revenue was primarily driven by higher sales of unregistered products in the domestic market, which increased by 507.86 lakhs or 76.73% as compared to the previous year. Sales of unregistered products in the export market also increased by 170.16 lakhs or 12.72% over the same period.

The growth was further supported by stronger demand from African and Asian markets, where unregistered products are preferred for their affordability and accessibility. Additionally, improved supply chain efficiencies enabled the Company to ensure timely delivery of larger consignments. The Companys strategic focus on cost-effective alternatives also gained wider acceptance among local healthcare providers, contributing to revenue growth during the year.

Other Income

Other Income in the financial year 2023-24 increased by 10.85 lakhs, reaching 13.24 lakhs in comparison to the

2.40 lakhs incurred in the Financial Year 2022-23. This increase was primarily due to increase in Foreign Exchange Fluctuation gain of 13.24 lakhs which is marginally offset by a decrease in benefits from Duty Drawback Scheme of

2.40 lakhs.

Changes in inventories of stock-in-trade

There was an increase of 91.10 lakhs for Fiscal 2024 as compared to Fiscal 2023, primarily attributable to a higher inventory of stock in trade at the end of Fiscal 2024.

Employee Benefit Expenses

Employee benefit expenses in the Financial Year 2023-24 increased by 4.48% or 6.33 lakhs, reaching 147.77 lakhs in comparison to the 141.44 lakhs incurred in the Financial Year 2022-23. This marginal rise in employee expenses stemmed from increase in Director remuneration, gratuity and other allowances aggregating to 11.87 lakhs which has been offset by a decrease of 5.38 lakhs in Salaries and wages.

Finance Costs

Finance Costs in the Financial Year 2023-24 increased by 72.28% or 25.37 lakhs, reaching 60.47 lakhs in comparison to the 35.10 lakhs incurred in the Financial Year 2022-23. This rise in finance costs primarily stemmed from increases in Interest to financial institutions which went up by 25.43 lakhs.

Depreciation and amortization expenses

Depreciation and amortization in the Financial Year 2023-24 amounted to 23.19 lakhs, constituting 0.84% of total income.

Other Expenses

Other expenses in the Financial Year 2023-24 increased by 20.50%, reaching 258.33 lakhs in comparison to the

214.38 lakhs incurred in the Financial Year 2022-23. This increase in other expenses was attributed to several factors, including 37.62 lakhs increase in Business Development Expense, 27.91 lakhs increase in CHA & Air Freight Charges, 33.77 lakhs increase in Legal & Professional Fees, these increases get offset by a decrease in Commission Expenses by 36.06 lakhs, decrease in Transportation Expenses by 8.68 lakhs and decrease in Travelling Expenses by 5.43 lakhs.

Tax Expenses

Tax expenses increased by 28.85%, reaching a total of 162.30 lakhs in the financial year 2023-24, in contrast to the

125.95 lakhs in the financial year 2022-23.

Profit after Tax (PAT)

Due to the aforementioned factors, the profit experienced an upswing, primarily driven by 19% growth in total income and a 5 % decrease in total expenses as a percentage of total income. The Profit After Tax (PAT) for the financial year 2023-24 reached 293.36 lakhs, marking a notable increase from 169.61 lakhs in the financial year 2022-23. In the financial year 2023-24, PAT constituted 10.61% of the total revenue, in contrast to 7.31% in the fiscal year 2022-23.

Rationale for increase in Profit after Tax (PAT) compared to Revenue from Operation

The increase in Profit after Tax (PAT) compared to Revenue from operation is mainly on account of:

Higher Revenue Growth

The Companys revenue from operations for the financial year 2023-24 was 2,752.48 lakhs as compared to 2,317.50 lakhs in the financial year 2022-23, reflecting an increase of 434.98 lakhs or 18.77%. Growth was primarily driven by higher sales of unregistered products in the domestic market, which increased by 507.86 lakhs or 76.73% as compared to the previous year. Sales of unregistered products in the export market also increased by 170.16 lakhs or 12.72% over the same period. The increase in revenue was further supported by stronger demand from African and Asian markets, where unregistered products are preferred for affordability and accessibility. This sustained growth in revenue directly translated into higher profitability.

Economies of Scale

With higher business volumes, the company benefited from economies of scale, which reduced per-unit costs and enhanced profitability.

Improved Operational Efficiency

Better cost management, optimization of resources, helped reduce overheads and improve productivity. As a result, operating margins improved compared to the previous fiscal year.

Financial Discipline

Effective working capital management, better credit control, and prudent financial practices contributed to stronger bottom-line results.

Cash Flow

The table below summaries our cash flows from our Restated Financial Information for the financial years ended on 2025, 2024, and 2023:

Particulars	FY 2025	FY 2024	FY 2023
Net cash (used in)/ Generated from operating activities	(579.44)	(480.02)	(365.31)
Net cash (used in)/ Generated from investing activities	(206.90)	(2.52)	(11.80)
Net cash (used in)/ Generated from finance activities	846.01	481.28	387.50
Net increase/ (decrease) in cash and cash equivalents	59.67	(1.25)	10.39
Cash and Cash Equivalents at the beginning of the period	24.90	26.15	15.77
Cash and Cash Equivalents at the end of period	84.58	24.90	26.15

Cash Flow from used in Operating Activities

Net cash used in operating activities in the Fiscal 2025 was (579.44) lakhs and our profit before tax that period was 869.00 lakhs. The difference was primarily attributable to depreciation of 19.76 lakhs, finance charges of 47.27 lakhs, provision for gratuity of 6.58 lakhs and thereafter change in working capital of (1,522.05) lakhs respectively, resulting in gross cash used in operations at (579.44) lakhs. We have not paid any income tax in the Fiscal 2025.

Net cash used in operating activities in the Fiscal 2024 was (480.02) lakhs and our profit before tax that period was 455.66 lakhs. The difference was primarily attributable to depreciation of 23.19 lakhs, finance charges of 60.47 lakhs, provision for gratuity of 4.02 lakhs and thereafter change in working capital of (894.65) lakhs respectively, resulting in gross cash used in operations at (351.31) lakhs. We have income tax paid of 128.72 lakhs.

Net cash used in operating activities in the Fiscal 2023 was (365.31) lakhs and our profit before tax that period was 295.57 lakhs. The difference was primarily attributable to depreciation of 29.50 lakhs, finance charges of 35.10 lakhs, provision for gratuity of 0.78 lakhs and thereafter change in working capital of (665.44) lakhs respectively, resulting in gross cash used in operations at (304.49) lakhs. We have income tax paid of 60.82 lakhs.

Cash Flow used in Investing Activities

In the Fiscal 2025, our net cash used in investing activities was (206.90) lakhs, which was primarily for purchase of fixed assets of (60.71) lakh, (increase) in investment of (0.19) lakhs and (Increase) in Non Current Assets of

(146.00) lakhs.

In the Fiscal 2024, our net cash used in investing activities was (2.52) lakhs, which was primarily for Purchase of fixed assets of (2.52) lakh during the said period.

In the Fiscal 2023, our net cash used in investing activities was (11.80) lakhs, which was primarily for Purchase of fixed assets of (7.97) lakh and (increase) in investment of (3.83) lakhs during the said period.

Cash Flow generated from Financing Activities

In the Fiscal 2025, our net cash generated from financing activities was 846.01 lakhs. This was primarily due to net increase in long term borrowings of 246.78 lakhs and proceeds from issue of Equity Shares and Debentures of 674.43 lakhs, which was partially offset by Interest Paid of (47.27) lakhs and net repayment of short term borrowings of (27.93) lakhs during the said period.

In the Fiscal 2024, our net cash generated from financing activities was 481.28 lakhs. This was primarily due to net increase in short term borrowings of 31.04 lakhs and proceeds from issue of Equity Shares and Debentures of 616.69 lakhs, which was partially offset by Interest Paid of (60.47)lakhs and net repayment of short term borrowings of

(105.98) lakhs during the said period.

In the Fiscal 2023, our net cash generated from financing activities was 387.50 lakhs. This was primarily due to net increase in long term borrowings of 198.71 lakhs and proceeds from issue of Equity Shares and Debentures of 224.79 lakhs, which was partially offset by Interest Paid of (35.10) during the said period.

Information required as per Item 11 (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

1. Unusual or infrequent events or transactions

To our knowledge there have been no unusual or infrequent events or transactions that have taken place during the last three years.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page 25 of this Draft Red Herring Prospectus. To our knowledge, except as we have described in this Draft Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Income and Sales on account of major product/main activities

Income and sales of our Company mainly consists of sale of products.

4. Whether the company has followed any unorthodox procedure for recording sales and revenues

Our Company has not followed any unorthodox procedure for recording sales and revenues.

5. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section titled "Risk Factors" beginning on page 25 in this Draft Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

6. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.

Increases in revenues are by and large linked to increases in volume of business.

7. Total turnover of each major industry services in which the issuer company operated.

The Company is in the business of, the relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 114 of this Draft Red Herring Prospectus.

8. Status of any publicly announced new products or business services.

Our Company has not announced any new services or business services.

9. The extent to which business is seasonal.

Our Companys business is subject to seasonality. For further information, kindly check "Risk Factors" beginning on page 25 in this Draft Red Herring Prospectus.

10. Any significant dependence on a single or few suppliers or customers.

The % of contribution of our Companys suppliers vis-?-vis the total purchases respectively for the Fiscal 2025, 2024 and 2023 is as follows:

Particulars	Top Suppliers as a percentage (%) of total purchases
	Fiscal 2025	Fiscal 2024	Fiscal 2023
Top 5	56.12%	54.59%	42.05%
Top 10	67.23%	66.70%	59.27%

The % of contribution of our Companys customers vis-?-vis the total revenue from operations respectively for the Fiscal 2025, 2024 and 2023 is as follows:

Particulars	Top Customers as a percentage (%) of Revenue from operations
	Fiscal 2025	Fiscal 2024	Fiscal 2023
Top 5	60.95%	43.09%	58.42%
Top 10	74.90%	61.36%	70.86%

11. Competitive conditions.

Competitive conditions are as described under the Chapters titled "Industry Overview" and "Our Business" beginning on pages 114 and 149, respectively of this Draft Red Herring Prospectus.