Sudarshan Pharma Industries Ltd Management Discussions

Global Economic Overview:

The global pharmaceutical market size was estimated at USD 1,645.75 billion in 2024 and is expected to grow at a CAGR of 6.12% from 2025 to 2030. Advancements in biologies, personalized medicine, and RNAi-based therapeutics are enhancing treatment outcomes. Expedited regulatory pathways and growing demand for patient-centric solutions further support market growth. Technological innovations in drug delivery systems and expanding access to healthcare in emerging economies also contribute to market expansion. Strategic collaborations and investments in R&D continue to drive product development and market competitiveness.

Pharmaceutical R&D spending has been a pivotal driver of market growth, with the sector continuously investing in the discovery and development of new therapies. This high level of investment fuels the discovery of breakthrough therapies across various segments, including oncology, immunology, and rare diseases. The growing market adoption of innovative and modern medicines is another key driver of the pharmaceutical market. As patients and healthcare providers become more aware of the effectiveness of new treatments, there is an increasing demand for cutting-edge therapies that offer better outcomes and fewer side effects.

The USA has exempted Indian pharmaceutical exports from its newly announced tariffs, ensuring Indian drugmakers can continue supplying affordable medicines to the American market without additional cost burdens. The decision comes amid broader tariff measures imposed by the US administration, which include a 10% universal tariff on imports and a 26% discounted rate on Indian goods. However, pharmaceuticals remain untouched, reinforcing Indias crucial role in the global supply of generic medicines.

The exemption is particularly significant, as Indian companies supply around 40% of all generic drugs used in the US, according to the US Food and Drug Administration (USFDA). Also, the USA remains the largest market for Indian pharmaceutical exports, valued at $8.7 billion, while imports from the US into India stand at just $800 million, according to the Pharmaceuticals Export Promotion Council of India, government agency for promoting pharmaceutical exports.

By securing tariff exemptions, Indian pharmaceutical companies gain a competitive edge over other Asian exporters, particularly China and Vietnam, whose drug exports face higher duties under the revised US trade policies.

Indian Economic Overview:

India is one of the biggest suppliers of low-cost vaccines in the world. Because of the low price and high quality, Indian medicines are preferred worldwide, thereby rightly making the country the Pharmacy of the World. Indian pharmaceutical market is estimated to touch US$ 130 billion in value by the end of 2030.

India is among the top 12 destinations for biotechnology worldwide and 3rd largest destination for biotechnology in Asia Pacific. The country holds 3-5% of the global biotechnology industry pie. The Indian healthcare industry is expected to reach over US$ 610 billion by 2026. About 20% of the global exports in generic drugs are met by India.

The presence of a skilled workforce as well as high managerial and technical competence is a source of attraction for private players. Pharma companies have already increased spending in the country to tap rural markets and develop better infrastructure.

The Indian Pharmaceuticals sector has seen some major developments, investments, and support from the government in the recent past:

Set an ambitious target to boost the medical devices industry in India, aiming to elevate it from its current US$ 11 billion valuation to US$ 50 billion by 2030.

The Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) has reached a noteworthy milestone, achieving sales of Rs.1,000 Crores in October 2024.

The Department of Pharmaceuticals will soon launch the Scheme for the Promotion of Research and Innovation in Pharma (PRIP) MedTech Sector.The scheme has been approved by the Union Cabinet for a period of five years starting from 2023-24 to 2027-28 with a total outlay of Rs.5,000 Crores.

Japanese companies have been invited to invest in the Indian Pharmaceutical and Medical Device Industry.The co-operation between Pharmaceutical Traders Association and Japan Federation of Medical Devices Associations of the two countries can contribute to stabilize the global supply-chain especially of APIs and Medical Devices.

Company Overview:

Sudarshan Pharma Industries Limited (the Company) operates in pharmaceutical and chemical industries, focusing on specialty chemicals and intermediates used in pharmaceuticals, paints, food products, and adhesives. The Company has a strong presence domestically and internationally, participating regularly in trade fairs and exhibitions. The Company exports primarily to South East Asia, Middle East, and North Africa. The Companys services include contract manufacturing and supplying generic pharmaceutical formulations to healthcare institutions through its distribution network.

The Company offer services of Quality Control (QC) and Formulation Development to provide customised solutions to customers and assist them in sourcing the innovative products as per their needs. The Companys pharma and specialty chemical business operations are supported by various manufacturers having facilities which are approved by the Food & Drug Administration (FDA), World Health Organization (WHO) and other relevant authorities. Presently, the Company has a Contract Manufacturing Agreement with some prominent pharmaceutical companies and has also joined hands with regular suppliers having FDA and WHO approved plant to supply pharma formulation and more than 100 generic pharma products.

The Company also supplies generic pharmaceutical formulation as Make to order for bulk supply to hospitals and related healthcare organisations. The Company has launched some of the best performing unique products such as Jivan Kit, Setdown, Pulmo relief, Fix Pollen, Flupimac and many more. In

domestic pharmaceuticals markets, currently, the Company has its presence in 5 States and further offering customised solutions to its customers for their requirement of Drug Intermediates and Specialty Chemicals. To boost export business, the Company is in the process of applying for some formulation registrations in some African as well Asian countries. With its longstanding operations and quality products, the Company has built a strong relationship with customers for Specialty Chemicals, Active Pharmaceutical Ingredients (APIs) and Finished Dosage Form (FDFs).

The Company was initially incorporated as Sudarshan Speciality Chemsolve Private Limited under the provisions of the Companies Act, 1956, registered with the Registrar of Companies, Mumbai. In 2016, the Companys name was changed from Sudarshan Specialty Chemsolve Private Limited to Sudarshan Pharma Industries Private Limited, as per the Certificate of Incorporation dated 17th December 2016, issued by the Registrar of Companies, Mumbai, underthe Companies Act, 2013.

Subsequently, the Company was converted from a Private Limited Company to a Public Limited Company, changing its name to Sudarshan Pharma Industries Limited. A fresh Certificate of Incorporation consequent upon this conversion was issued by the Registrar of Companies, Mumbai, on 5th January 2017. The Company successfully completed its Initial Public Offering (IPO) in the financial year 2022-23.

The Companys senior management team comprises Mr. Hemal V. Mehta, Chairman and Managing Director (CMD), who possesses approximately 27 years of industry experience, and Mr. Sachin V. Mehta, who brings with him 19 years of experience in the pharmaceutical and chemical sectors.

The Company has developed extensive expertise in specialty chemicals, bulk drugs, Active Pharmaceutical Ingredients (APIs), and pharmaceutical formulations. It actively supports the Government of Indias initiatives, such as the Make in India campaign and aligns with the vision of self-sufficiency outlined by the Honble Prime Minister.

Considering the Companys historical achievements, strategic future plans, strong commitment of its promoters, and robust financial performance, it demonstrates significant potential for sustainable growth and value creation for stakeholders. 1

Under the Aatmanirbhar Bharat Rojgar Yojana through the Production-Linked Incentive (PLI) scheme, the Company successfully achieved L A its initial milestone pPJ by developing a laboratory-scale sample of Vitamin B1 (Thiamine 1

Hydrochloride). This H development covered * Rs the complete process, from basic raw materials to the finished product, Rs including the successful manufacturing of all necessary intermediates for producing the final API, Vitamin B1.

I The Company successfully achieved its first milestone of developing M the sample for the molecule VITAMIN B1 (Thiamine Hydrochloride) M from the Base Root and have filed an application for the registering W a patent for the Manufacturing of "VITAMIN B1".

The Company has successfully achieved the development of the molecule VITAMIN B6 (Pyridoxine Hydrochloride) from base root till the finished product and also successfully manufactured all the intermediary products required to manufacture the finished API products ofVITAMIN B6".

We take pride in being the only company to have two APIs under a single basket within the PLI scheme. These products have been developed through our dedicated R&D division, establishing our leadership in this segment. Patent applications have been filed covering both the manufacturing processes and intermediates for Vitamin B1, Vitamin B6, and other related APIs. The production facility at Mahad is currently under development and is scheduled to be fully operational by March 2026. This plant will not only serve the objectives of the PLI scheme but will also function as a versatile multipurpose facility.

The Company operates with a strategy of upward integration within the pharmaceutical industry, encompassing specialty chemicals, intermediates, active pharmaceutical ingredients (APIs), and finished products. Currently, for at least the next two years, our primary focus will remain on APIs and intermediates, after which we plan to gradually transition toward formulation ? and branding. Our long-term vision involves strengthening

S our brand presence and intensifying innovative research

activities through our extensive in-house R&D facilities. Ultimately, we aim to address significant global health challenges such as heart disease, cancer, AIDS, and other j . critical medical conditions.

In line with this strategy, we have developed two innovative products designed to significantly contribute to human health:

F Heart Kit Loading Dose: An emergency cardiac formulation intended as a first-aid treatment during heart attacks. Developed based on the guidance of our mentor, Padma Vibhushan Dr. Bhaktavatsalam·renowned for performing over 7,700 heart surgeries at minimal or no cost·this unique formulation is currently in the patent application process. The Company intends to reintroduce this product to the market on a substantial scale upon securing the patent.

Jivan Kit: An Ayurvedic immunity-enhancement product consisting of Jivan Sudha, Jivan Sat, and Jivan Prash. Based on Ayurvedic principles, Jivan Kit aims to maintain balance among the fundamental bodily elements (Vaat, Pitt, and Cough), boosting immunity, facilitating cell regeneration, detoxification, and enhancing overall vitality.

In addition to the products mentioned earlier, the Company has developed "Set Down, an innovative formulation combining principles from both Ayurveda and Allopathy. This unique product is specifically designed to effectively address constipation and related digestive issues. It has received positive market feedback, with increasing numbers of medical practitioners recommending it to their patients.

Our primary focus remains on the manufacturing of Active Pharmaceutical Ingredients (APIs) and intermediates, with an emphasis on advanced research, innovation, and new product development. To enhance our research capabilities, we place significant emphasis on our R&D activities and maintain strategic collaborations with leading experts and institutions. Among our notable partnerships is an association with Dr. William Selvamurthy at Amity University, a pioneer in setting global educational benchmarks and best practices. Under his guidance, the Company collaborates in pharmaceutical and healthcare research, including areas such as nanotechnology, patent drafting and submission, and the commercialization of innovative technologies and products.

Recognition as Star Export House

The Company has been awarded the prestigious Certificate of Recognition - One Star Export House by the Ministry of Commerce and Industry, Government of India, which speaks volumes about the dedication and perseverance of Sudarshan Pharma spotlighting its export capabilities and aligning with Indias push for domestic pharmaceutical production.

A Status-holder shall be eligible for privileges as specified by the Foreign Trade Policy. On being recognized as a star export house, the Company shall be eligible to enjoy various benefits and privileges such as:

Authorization and customs clearance for imports and exports may be allowed on a self-declaration basis.

Exemption from the furnishing bank guarantee for Schemes under Foreign Trade Promotion unless specified otherwise.

Input-output norms may be fixed on priority within 60 days by the Norms Committee.

Exemption from compulsory negotiation of documents through banks.

* Remittances or receipts should, however, be received through banking channels.

Rs Status holders would be entitled to preferential and priority treatment while handling consignments by concerned agencies.

. Status holders are eligible to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs.10 lakhs or 2% of average annual export realization during the preceding three licensing years, whichever is higher.

Rs Exporters involved in manufacturing would be eligible to self-certify their goods they originated from India.

Dehradun facility

Further strengthening our commitment to innovation, we are establishing a state-of-the-art R&D facility in Dehradun. The Company has already finalized an acquisition agreement for the necessary land, and construction is progressing rapidly. Supported by a team of highly skilled professionals, this facility is expected to drive significant patent development and enhance our research capabilities.

Technology Transfer Agreement with Uttaranchal University

The Company entered into a Technology Transfer Agreement on 24th January 2025 with Uttaranchal University, acquiring the rights, interests, and ownership of Patent No. 202LLLOZ9OO5, titled Preparation of Bioplastic from Stubble of Rice, Aloe Vera Waste, PVA, and Glycerol Plasticizer, published by the Patent Office of the Government of India. According to this agreement, the Company holds exclusive rights and ownership of the patent for a period of five years commencing from 24th January 2025.

Company at a Glance

The Company is into Specialty Chemicals & Intermediates for Pharma, agro chemicals, Coating, various other industries. We are also into Active Pharmaceuticals Ingredients manufacturing. Our main focus is on Vitamin and API.

Consolidated Financial Highlights (Rs. In Lakhs)