Global Economy
Global economic growth is expected to moderate in 2026 compared to the previous year, remaining below long-term historical averages through 2027. Advanced economies are expected to record modest growth, mainly due to persistent trade frictions, geopolitical uncertainty, elevated energy-related costs, and cautious consumer and business sentiment. In many developed markets, higher borrowing costs from previous tightening cycles may continue to affect investment decisions, housing demand, and corporate expansion plans.
Emerging markets and developing economies can face greater near-term pressure because of commodity price volatility, regional conflicts, weaker external demand, and currency-related challenges. Countries heavily dependent on food, fuel, or imports of raw material remain more vulnerable to inflationary shocks. Conditions are, however, expected to improve gradually as supply-side pressures ease, global trade routes adjust, and policy frameworks become more stable.
Despite these challenges, global growth continues to receive support from investment in technology and artificial intelligence (AI), which is improving automation, efficiency, and productivity across sectors. Adaptive supply chains are helping firms reduce dependence on single markets and build resilience against disruptions.
In addition, supportive financial conditions in select economies may encourage infrastructure spending, digital transformation, and private-sector investment. Services trade, including tourism, finance, education, digital services, and professional consulting, is becoming an increasingly important contributor to global economic activity.
Global headline inflation is projected to increase to 4.4% in CY 2026 from 4.1% in 2025, before easing to 3.7% in CY 2027. This uptick is primarily driven by negative supply shocks from higher energy and food prices stemming from the West Asia war. Inflation dynamics remain uneven across countries, shaped by stubborn services inflation, wage pressures, exchange-rate movements, fiscal policies, and country-specific supply constraints. Overall, the global outlook points to a fragile but gradually stabilising economic environment.
Outlook
The global economic outlook has become more uncertain amid escalating geopolitical tensions, particularly in the Middle East, during early CY 2026. The conflict has contributed to supply-side disruptions, affecting energy markets and key global shipping routes. This has resulted in increased volatility in commodity prices and trade flows. Global growth expectations have consequently moderated, while inflationary pressures have re-emerged in several economies due to higher energy and food prices.
Despite these challenges, ongoing investment in technology and AI, resilient services activity, and adaptive supply chains continue to support global economic activity. However, downside risks remain elevated, including the possibility of prolonged geopolitical instability and disruptions to energy infrastructure. Tighter financial conditions and weaker global trade momentum also pose challenges. Over the medium term, global growth prospects are expected to remain moderate relative to historical trends.
Indian Economy
India remained one of the fastest-growing major economies during FY 2025-26, supported by strong domestic demand, infrastructure development, and improving manufacturing activity. Real GDP growth for FY 2025-26 was estimated at 7.6%, following growth of 7.2% and 7.1% in the preceding two fiscal years.
Inflation has moderated from earlier highs but remains sensitive to food and energy price volatility. Although headline inflation remained below the RBIs 4% medium-term target, upside risks persist due to energy prices, monsoon-related uncertainty, and supply-side disruptions. The RBI projected inflation at 4.4% for FY 2026-27, indicating that underlying price pressures may persist over the medium term.
Overall, Indias external sector remained stable, supported by strong services exports, rising electronics shipments, and deeper integration with global value chains.
However, geopolitical tensions, commodity price volatility, protectionist policies, and weaker global demand remain key risks.
Outlook
Indias growth outlook remains supported by favourable demographics, rising domestic demand, and ongoing policy reforms. Infrastructure development, manufacturing initiatives, and a stronger focus on sustainability and self-reliance are also contributing to the growth. GDP growth is expected to remain resilient, supported by consumption, public capital expenditure, services activity, and an expanding industrial base.
Indias focus on domestic manufacturing, import substitution, and strategic self-sufficiency is expected to strengthen local value chains and reduce external dependence. A broader industrial base may also increase volumes of recyclable waste streams, supporting resource recovery and circular- economy-led growth through reuse, recycling, repair, refurbishment, and remanufacturing.
(Sources: https://www.pib.gov.in/PressReleasePage aspx?PRID=2260251®=3&lang=2
https://www.pib.gov.in/PressReleasePage.
aspx?PRID=2252272&lang=1®=3&utm)
Industry Overview
Foods and Nutritional Ingredients Industry
Humanitys approach to diet is undergoing a fundamental shift: from eating for sustenance to eating for prevention. Consumers increasingly expect everyday food and beverages to support immunity, improve gut health, and reduce the risk of future illnesses. This is driving demand for specialty food ingredients that enhance texture, freshness, and clean-label appeal. It is also increasing demand for nutritional ingredients such as vitamins and minerals used in fortified foods, supplements, and infant nutrition. Since raw nutrients like iron may have an unpleasant taste or lower stability, advanced technologies such as micro-encapsulation are becoming essential. These technologies improve delivery, absorption, and efficacy in the human body.
Specialty Food Ingredients Market
The specialty food ingredients market comprises ingredients that enhance the taste, texture, nutritional value, shelf life, and functionality of food and beverage products. The market is driven by growing consumer demand for clean-label, plant-based, and health-focused foods, including functional beverages, probiotics, and protein-enriched products. Key ingredients include flavours, enzymes, specialty starches, emulsifiers, sweeteners, and functional proteins. Rapid innovation in food technology, rising health awareness, and the expansion of processed and convenience foods are fuelling market growth globally. Growth remains particularly strong across North America, Europe, and Asia-Pacific.
Global
The global specialty food ingredients market was estimated at US$ 85 Billion in 2024. The market is expected to grow at a 6.8% CAGR between 2024 and 2029, reaching approximately US$ 118 Billion by 2029. Based on this CAGR, the market size is estimated at around US$ 90.8 Billion in 2025 and US$ 97.0 Billion in 2026.
Outlook
The global specialty food ingredients industry is expected to sustain healthy growth over the next few years. This is primarily being driven by rising consumer demand for healthier, more innovative, and functional food products. Ingredients such as enzymes, emulsifiers, preservatives, sweeteners, acidulants, colours, flavours, encapsulated preservatives, encapsulated acidulants, leavening agents, flavour enhancers, fat powders, texture enhancers, and caseinates are increasingly being used across the food industry. They help improve product quality, taste, processing efficiency, and shelf life.
Demand is further supported by rising preference for clean-label, natural, minimally processed, and plant-based ingredient solutions. Advancements in food processing technologies and increasing focus on sustainable sourcing are expected to support market growth. Specialty food ingredients will remain important for improving sensory appeal, nutritional value, stability, and regulatory compliance across food applications.
(Source: Frost & Sullivan)
India
Indias specialty food ingredients market was estimated at around US$ 4.3 Billion in FY 2023-24. The market is projected to grow at an 8.1% CAGR during 2024-29, reaching approximately US$ 6.4 Billion by 2029. Based on the year-wise forecast, the market size is expected to be US$ 4.7 Billion in 2025 and US$ 5.1 Billion in FY 2025-26.
Outlook
Indias specialty food ingredients industry is expected to grow steadily over the next few years, supported by rising demand for innovative, high-quality, and functional food solutions. Ingredients such as encapsulated preservatives, encapsulated acidulants, leavening agents, flavour enhancers, fat powders, emulsifiers, and texture enhancers are increasingly being adopted across bakery, beverages, confectionery, dairy, and processed foods. These ingredients help improve shelf life, flavour management, texture, consistency, mouthfeel, and product stability. The market is also being driven by changing consumer lifestyles, higher demand for convenience foods, premium and functional beverages, and technological innovation in ingredient formulation. Going ahead, demand is expected to benefit from the growing shift towards clean-label, plant-based and sustainable food solutions. Specialty food ingredients are likely to remain important for aligning food products with evolving consumer expectations and regulatory standards. They will continue to play a key role in improving functional and sensory attributes across Indias packaged and processed food industry.
(Source: Frost & Sullivan)
Nutritional Ingredients Market
Nutritional ingredients include proteins, minerals, vitamins, phytochemical extracts, antioxidants, amino acids, enzymes, probiotics, and prebiotics, among others. Used across dietary supplements, functional foods, functional beverages, infant nutrition, sports nutrition, personal care and pharmaceuticals, they help improve nutritional value and deliver targeted health benefits. Market growth is driven by increasing consumer awareness of health and wellness, rising demand for functional foods, and dietary supplements. Growing focus on preventive healthcare is also boosting demand. Further, the market is benefitting from trends such as personalised nutrition, sports nutrition, clean-label products, and plant-based diets.
Global
The global nutritional ingredients market was estimated at US$ 99 Billion in 2024. The market is expected to grow at a 6.8% CAGR during 2024-2029, reaching ~US$ 138 Billion by 2029. Based on this, the market size is estimated at around US$ 105.7 Billion in 2025 and US$ 112.9 Billion in 2026.
Outlook
The global nutritional ingredients industry is expected to sustain healthy growth over the next few years, supported by rising awareness of the link between diet and health. Increasing focus on preventive healthcare, higher healthcare costs, ageing populations, and demand for functional foods, supplements, and fortified products are expected to drive market expansion.
Demand is also being supported by the rising prevalence of lifestyle-related and chronic diseases such as diabetes, cardiovascular issues, arthritis, and osteoporosis. Asia-Pacific is the largest market for nutritional ingredients in both value and volume terms and is expected to record the highest growth. This is further supported by urbanisation, vitamin and mineral deficiencies, rising incomes, and expanding supplement consumption. Overall, the industry outlook remains positive, with growth expected to be led by functional nutrition, fortified foods, infant and sports nutrition, dietary supplements. Demand for clean-label formulations and advanced ingredient formats such as encapsulated minerals and vitamins is also likely to increase.
(Source: Frost & Sullivan)
India
The countrys market was estimated at US$ 613 Million in FY 2023-24 and is expected to grow at a 7.8% CAGR during 2024-2029, reaching US$ 892 Million by FY 2028-29. The market size is estimated at approximately US$ 661 Million in FY 2024-25 and US$ 712 Million in FY 2025-26.
Outlook
Indias nutritional ingredients industry is expected to grow steadily over the next few years. This growth is mainly supported by rising consumer awareness around health and wellness, higher disposable incomes, and increasing demand for fortified and functional foods. Ingredients such as encapsulated vitamins, minerals, amino acids, granulated products, and vitamin-mineral premixes are seeing increasing adoption across dietary supplements, and fortified foods and beverages. Their use is also increasing in infant and sports nutrition.
Going forward, the market is expected to benefit from rising demand for preventive nutrition, sports nutrition consumption, infant nutrition, and wider adoption of food fortification. Advanced ingredient formats such as encapsulated nutrients, liposomal nutrients and premixes are likely to gain wider acceptance. These help improve nutrient stability, absorption, taste masking, uniform dosage and product performance across supplements, fortified foods and beverages, and nutrition-led formulations.
(Source: Frost & Sullivan)
Vitamins and Minerals Market
The market consists of essential micronutrients used in dietary supplements, functional foods, beverages, pharmaceuticals, and animal nutrition products to support overall health and wellness. Increasing consumer awareness of immunity, preventive healthcare, and nutritional deficiencies, along with growing demand for fortified foods and supplements are driving growth. Key products include vitamin A, B-complex, C, D, E, calcium, magnesium, zinc, and iron. Rising health consciousness, ageing populations, sports nutrition trends, and expanding demand for personalised and preventive nutrition are further supporting market growth globally.
Global
The global vitamins and minerals market was valued at US$ 29 Billion in 2024. The market is projected to grow at a CAGR of 7.0% during 2024-2029, reaching US$ 41 Billion by 2029. The market size is estimated at ~US$ 31.0 Billion in 2025 and US$ 33.2 Billion in 2026.
Outlook
The global vitamins and minerals industry is expected to post steady growth, supported by rising health awareness, preventive healthcare adoption, ageing populations, and demand for nutritional supplementation. As consciousness about nutrient deficiencies and wellness increases, demand is likely to remain strong across dietary supplements, functional and fortified foods, infant and sports nutrition, and pharmaceutical applications.
The outlook is also supported by the growing use of vitamin and mineral blends in food fortification and enrichment programmes. These blends help create uniform dosage, improve nutrient delivery, and address micronutrient deficiencies and malnutrition. Advancements in distribution, personalised nutrition, and integration of vitamins and minerals into functional foods are expected to make these nutrients more accessible and appealing to a wider consumer base. (Source: Frost & Sullivan)
India
Indias vitamins and minerals market was valued at US$ 2.1 Billion in FY 2023-24. It is expected to grow at an 8.0% CAGR during 2024-2029, reaching ~US$ 3.0 Billion by FY 2028-29. The market size is estimated at ~US$ 2.3 Billion in FY 2024-25 and US$ 2.4 Billion in FY 2025-26.
Outlook
The market is expected to grow steadily over the next few years, backed by rising health awareness and use of dietary supplements, and growing focus on preventive healthcare. Vitamins and minerals are increasingly being used to support immunity, overall well-being, recovery from illness, cognitive function, and specific health needs.
Market growth is expected to be driven by rising supplement consumption, greater awareness of nutrient deficiencies, demand for fortified foods, and innovation in formulations and delivery formats. Manufacturers are also introducing new formats to suit changing consumer preferences. This is expected to expand the market across supplements, pharmaceuticals, functional foods, beverages, infant nutrition, and sports nutrition.
(Source: Frost & Sullivan)
Specialty Nutritional Ingredients Market
The specialty nutritional ingredients market includes high-value ingredients designed to enhance the nutritional, functional, and health benefits of food, beverages, dietary supplements, and pharmaceutical products. These ingredients include probiotics, prebiotics, proteins, amino acids, omega-3 fatty acids, vitamins, minerals, fibres, and botanical extracts. Market growth is driven by rising consumer focus on health and wellness, preventive healthcare, sports nutrition, and personalised nutrition solutions. Increasing demand for functional foods, clean-label products, and plant-based nutrition is further accelerating the adoption of specialty nutritional ingredients across global markets.
Global
The global specialty nutritional ingredients market was valued at US$ 13.6 Billion in 2024. The market is projected to grow at a CAGR of 7.2% during 2024-2029, reaching US$ 19.3 Billion by 2029. Based on the year-wise forecast, the market size is estimated at US$ 14.6 Billion in 2025 and US$ 15.6 Billion in 2026.
Outlook
The global specialty nutritional ingredients industry is expected to maintain healthy growth over the next few years. This growth is supported by rising consumer demand for advanced nutrition formats that improve bioavailability, stability, solubility, and functional performance. Specialty ingredients such as spray-dried vitamins and minerals, granulated ingredients, vitamin-mineral premixes, triturates, caseinates, liposomal nutrients, and encapsulated nutrients are increasingly being used across functional foods, dietary supplements, and nutrition-led formulations.
Innovation in liposomal delivery, encapsulation, plant- based formulations, and clean-label ingredients is expected to shape industry growth. These technologies help protect sensitive nutrients, improve absorption, increase shelf life and support better consumer acceptance. Overall, the industry outlook remains positive. Demand is likely to grow across supplements, fortified foods, functional beverages, infant nutrition, and sports nutrition as consumers increasingly shift to targeted, science-backed wellness solutions.
(Source: Frost & Sullivan)
India
The India specialty nutritional ingredients market was estimated at ~US$ 613 Million in FY 2024 and is projected to reach around US$ 892 Million by FY 2029, growing at a 7.8% CAGR over 2024-2029. Based on this projected growth trajectory, the market size is estimated at nearly US$ 661 Million in FY 2025 and US$ 712 Million in FY 2026.
Outlook
Indias specialty nutritional ingredients industry is likely to grow steadily over the next few years, backed by rising health and wellness awareness, higher disposable incomes, and growing demand for fortified and functional food products.
Demand is expected to benefit from the growth of nutraceuticals, e-commerce-led product access, and rising sports nutrition consumption. Increasing demand for infant nutrition and greater consumer focus on ingredient transparency and nutrient quality are also expected to drive growth. Additionally, regulatory support for fortification, including edible oil, milk, and rice fortification, is expected to support wider adoption of specialty nutritional ingredients in India.
(Source: Frost & Sullivan)
Key Growth Drivers
Rising health and wellness awareness
Growing focus on immunity, gut health, preventive healthcare and overall well-being is increasing demand for fortified foods, functional beverages, and dietary supplements
Growth in functional and packaged foods
Rising consumption of ready-to-eat, ready-to-cook, bakery, dairy, beverages, and processed foods is driving demand for ingredients that improve nutrition, taste, texture, stability, and shelf life
Rising demand for infant and sports nutrition
Increasing participation of women in the workforce, fitness awareness, and active lifestyle trends are supporting growth in infant formula, protein products, and sports nutrition
Micronutrient deficiency and food fortification
Vitamin and mineral deficiencies, along with government-led fortification programmes, are supporting wider use of nutritional ingredients in rice, milk, edible oil, and other staple foods
Expansion of nutraceuticals and supplements
Higher disposable incomes, ageing populations, lifestyle-related health concerns, and e-commerce access are supporting demand for dietary supplements and nutrition-led products
Innovation in ingredient technologies
Advanced formats such as encapsulation, spray drying, granulation, liposomal delivery, and premixes are improving nutrient absorption, stability, taste-masking, and product performance
Pharmaceutical Excipients Market
The Pharmaceutical Excipients Market comprises inactive substances used in drug formulations to improve the stability, bioavailability, taste, texture, and delivery of pharmaceutical products. These excipients include binders, fillers, disintegrants, coatings, preservatives, sweeteners, and lubricants used in tablets, capsules, injectables, and topical formulations. Market growth is driven by the expanding pharmaceutical industry, rising demand for generic medicines, advancements in drug delivery systems, and increasing production of biologics and specialty drugs. Growing investments in healthcare, regulatory compliance requirements, and innovation in multifunctional and patient-friendly formulations are further supporting market expansion globally.
Global
The global pharmaceutical excipients market was estimated at approximately US$ 10.4 Billion in 2024. The market is expected to grow at a CAGR of ~4.7% during 2025-2029, reaching approximately US$ 13.0 Billion by 2029. The market size is projected at around US$ 10.9 Billion in 2025 and US$ 11.4 Billion in 2026.
Outlook
The global pharmaceutical excipients industry is expected to expand steadily over the next few years. Growth is supported by rising pharmaceutical production, increasing demand for generics, growth in chronic disease treatment, ageing populations, and continued expansion of healthcare access.
Looking ahead, industry growth is likely to be shaped by demand for high-quality, multifunctional, and formulation-specific excipients. Continuous manufacturing in solid drug production is creating a need for excipients suited to newer production processes. Meanwhile, the rising use of parenteral drugs is increasing demand for parenteral-grade excipients.
However, stringent regulatory requirements, long development timelines, and high R&D investments remain key entry barriers. Therefore, established suppliers with strong quality, regulatory, and manufacturing capabilities are better placed to benefit from market growth.
(Source: Frost & Sullivan)
Indian Pharmaceutical Excipients Market
The Indian pharmaceutical excipients market was estimated at approximately US$ 856 Million in 2024. It is expected to grow at an ~11% CAGR between 2024 and 2029. Based on this growth rate, the market size is estimated at around US$ 950 Million in 2025 and US$ 1,055 Million in 2026. By 2029, the market is likely to reach ~US$ 1,442 Million.
Outlook
The Indian pharmaceutical excipients industry is expected to progress at a healthy pace over the next few years. Growth is backed by the expansion of Indias pharmaceutical manufacturing base, rising demand for generic medicines, and increasing use of functional excipients in complex formulations. Expansion is further expected to be driven by Indias expanding healthcare infrastructure, and greater emphasis on quality and safety standards. Technological advancement in functional excipients, increased adoption of orphan drugs, and growth in the biopharmaceutical industry are additional contributors. Demand is likely to remain strong across binders, fillers, lubricants, stabilisers, preservatives, solubilisers and other formulationsupporting ingredients.
Dicalcium Phosphate Market
The dicalcium phosphate market focuses on the production and use of dicalcium phosphate (DCP), a widely used calcium and phosphorus compound. It is utilised in animal feed, fertilisers, pharmaceuticals, and food applications. In animal nutrition, it serves as an essential feed additive to support bone development and overall livestock health. In the pharmaceutical and food industries, DCP is used as a dietary supplement, tablet binder, and fortifying agent. Market growth is driven by increasing demand for high-quality animal feed, rising awareness of nutritional supplementation, expanding livestock production, and growing applications in pharmaceuticals and food processing industries worldwide.
Global and India
The global DCP excipient market was estimated at approximately US$ 338 Million in 2024. The market is expected to grow at a ~5.5% CAGR, reaching approximately US$ 442 Million by 2029. Based on this growth rate, the market size is estimated at around US$ 357 Million in 2025 and US$ 376 Million in 2026.
In India, the DCP excipient market was valued at approximately US$ 28.4 Million in FY 2024. It is expected to grow at a ~9.0% CAGR, reaching approximately US$ 43.7 Million by FY 2029. Based on this growth rate, the market size is estimated at around US$ 31.0 Million in 2025 and US$ 33.7 Million in FY 2026.
Outlook
Indias DCP demand is expected to grow faster than the global market. This is supported by expanding pharmaceutical manufacturing, rising generic drug production, and increasing need for quality excipients. With imports meeting a meaningful share of domestic demand, Indian manufacturers have scope to strengthen local supply. Globally, Asia-Pacific leads consumption, followed by North America and Europe, with demand supported by pharmaceutical production.
(Source: Frost & Sullivan)
Magnesium Stearate Market
The magnesium stearate market involves the production and application of magnesium stearate, a widely used pharmaceutical and food additive. It is known for its lubricating, anti-caking, and stabilising properties. It is primarily used in pharmaceutical formulations as a tablet and capsule lubricant to improve manufacturing efficiency and product consistency. Magnesium stearate is also used in food products, cosmetics, and personal care applications. Expanding pharmaceutical and nutraceutical industries, increasing demand for dietary supplements, and growing use of processed foods and
cosmetic products globally are driving market growth. Rising investments in healthcare manufacturing and advancements in drug formulation technologies are further supporting this expansion.
Global and India
The global magnesium stearate excipient market was estimated at around US$ 433 Million in 2024. The market is expected to grow at a ~7.0% CAGR, reaching around US$ 607 Million by 2029. Based on this growth rate, the market size is estimated at ~US$ 463 Million in 2025 and US$ 495 Million in 2026.
Outlook
Global magnesium stearate demand is expected to be supported by expanding pharmaceutical and cosmeceutical industries. Asia-Pacific is likely to lead growth, aided by rising healthcare needs and manufacturing capacity. In India, demand is likely to grow with higher pharmaceutical production, solid oral dosage formulations, and use of quality excipients. Continued import dependence creates scope for domestic manufacturers to expand local production.
(Source: Frost & Sullivan)
Calcium Carbonate Market
Calcium carbonate is widely used in pharmaceutical formulations as an excipient due to its properties as a filler, binder, and calcium supplement in tablets and capsules. Asia-Pacific is the largest and fastest-growing market, led by China and India, where increasing healthcare demand and expanding pharmaceutical manufacturing capabilities are supporting market growth. North America and Europe collectively account for a significant share, supported by strong pharmaceutical production infrastructure and well-established regulatory frameworks.
Global and India
The global calcium carbonate excipient market was valued at ~US$ 228 Million in 2024 and is projected to grow at ~6.5% CAGR, reaching nearly US$ 312 Million by 2029. Indias calcium carbonate excipient market stood at ~US$ 22.6 Million in 2024. It is expected to grow at ~9.8%, reaching ~US$ 36 Million in 2029.
Outlook
The outlook for the pharmaceutical-grade calcium carbonate market remains positive. Growing demand for oral solid dosage formulations, dietary supplements, and over-the-counter digestive medications is a key driver. Calcium carbonates multifunctional properties as both an excipient and active pharmaceutical ingredient make it highly valuable in tablet and capsule manufacturing. This is particularly relevant in direct compression and chewable formulations. Rising pharmaceutical production, increasing prevalence of gastrointestinal disorders, and expanding nutraceutical consumption are expected to further drive demand. The continued growth of the generic drug industry and advancements in manufacturing technologies are likely to support wider adoption, especially in Asia-Pacific, North America, and Europe.
(Source: Frost & Sullivan)
Key Growth Drivers
Growth in generic medicines
Patent expiry of branded drugs is increasing generic drug production, directly raising demand for excipients. Generic manufacturers may also develop differentiated formulations, creating demand for varied excipient types
Rising healthcare demand and ageing population
Increasing population, higher average age, rising chronic diseases, and growing healthcare needs are expanding pharmaceutical consumption, supporting demand for excipients
Technological advancement in functional excipients
Demand is increasing for functional and multifunctional excipients that improve stability, solubility, bioavailability, manufacturability, and patient compliance in modern formulations
Demand for synthetic and specification-driven excipients
Synthetic excipients are expected to see robust growth as they can be produced according to desired specifications, supporting specialised formulation requirements
Reformulation of existing drugs
Pharmaceutical companies are reformulating drugs to improve effectiveness, develop extended-release versions, and make medicines easier to administer. These changes often require different or specialised excipients
Expansion of pharmaceutical manufacturing^ emerging markets
Improving healthcare infrastructure, economic development, and rising pharmaceutical production in markets such as India, China, Brazil, and Russia are expected to support excipient demand
Growthin biologics, biosimilars, and orphan drugs
Rising adoption of orphan drugs, growth in biopharmaceuticals, and expanding biologics and biosimilar contract manufacturing are expected to create new opportunities for excipient suppliers
Import substitution opportunityin India
India imports more than 80% of excipients from countries such as China, the US, Europe, Japan and Korea. This creates scope for domestic manufacturers to expand local production and improve supply security
Export Markets for Food and Nutritional Ingredients from India
India has established itself as a reliable, high-quality exporter of nutritional ingredients, deeply integrated into global supply chains. The export market is growing at an accelerated pace due to converging macroeconomic and strategic factors:
Cost and Quality Arbitrage
Indian manufacturers successfully leverage a highly skilled chemical engineering workforce to offer competitive pricing, coupled with stringent adherence to global pharmacopeias (USP, BP, EP) and rigorous supplier audits.
China Plus One and Supply Chain Security
Following significant global supply disruptions, multinational FMCG and pharmaceutical brands are actively executing strategies to de-risk their supply chains away from geographic concentration in China. This is driving a surge in long-term, high-volume export contracts for Tier-1 Indian manufacturers with global quality certifications such as EXCiPACT, WHO-GMP, and USFDA approvals.
Global Battery Materials Industry (Lithium Iron Phosphate)
The global Lithium Iron Phosphate (LFP) battery market was estimated at US$ 42.2 Billion in 2025 and is expected to reach US$ 47.67 Billion in 2026. The market is projected to grow to US$ 116.8 Billion by 2033, registering a 13.6% CAGR during 2026-2033.
Outlook
The global LFP battery market is expected to remain on a strong growth path. Rising adoption of electric vehicles, renewable energy storage systems, and grid-scale battery applications are key drivers. LFP batteries are gaining preference due to their lower cost, better thermal stability, longer lifecycle, and reduced dependence on nickel and cobalt. Asia-Pacific remained the largest market in 2025, holding 51.6% share, supported by strong EV and battery manufacturing activity. North America is expected to be the fastest-growing region. Demand is also expected to benefit from increasing investments in local battery manufacturing, energy storage infrastructure, and cost-efficient battery chemistries across automotive, power, and industrial applications.
(Source: https://www.grandviewresearch.com/industry-analysis/lithium-iron-phosphate-lifepo4-material-battery-market)
Indian Battery Materials Industry (Lithium Iron Phosphate)
The global shift towards electric mobility and renewable energy is accelerating demand for Lithium Iron Phosphate (LFP) batteries, positioning them as a key technology in sustainable energy storage. Compared to nickel- and cobalt-based battery chemistries, LFP batteries offer superior thermal stability, enhanced safety, longer cycle life, and lower production costs. This makes them highly suitable for electric vehicles, two- and three- wheelers, and large-scale energy storage systems. Iron phosphate (FePO4), a core material in LFP batteries, is derived from abundant and non-toxic raw materials such as iron ore and phosphate rock. This reduces reliance on supply-constrained minerals like cobalt and nickel. Increasing government support, localisation initiatives, and investments in domestic battery supply chains are expected to drive the growth of the LFP battery ecosystem. This trend is likely to be evident across countries such as India, the United States, and European nations, amid evolving regulatory and energy security requirements.
Advantages of LFP Chemistry (Electrochemical and Strategic Advantages):
-=. Superior Safety (Thermal Stability): The phosphate polyanion in the LFP crystal structure creates an exceptionally strong covalent bond. This extreme thermal and chemical stability drastically mitigates oxygen release at high temperatures, effectively reducing the risk of catastrophic thermal runaway and battery fires compared to volatile Nickel-Manganese- Cobalt (NMC) chemistries
-=. Exceptional cycle life: LFP batteries exhibit minimal degradation during deep discharge cycles. They can endure thousands of charge/discharge cycles with minimal capacity fade. This makes them the optimal, lowest total-cost-of-ownership choice for both long-term commercial EV fleets and daily-cycling grid energy storage
-=. Cost-effectiveness and supply chain security: LFP eliminates the requirement for expensive, highly volatile, and ethically concerning conflict minerals such as cobalt and nickel. It relies entirely on iron and phosphate, two of the most geologically abundant, stable, and widely distributed commodities on Earth The India LFP battery market is projected to reach US$ 2.10 Billion in 2026. LFP accounts for ~54% of current EV battery demand in India, with over 70% contribution in three-wheeler cargo and passenger segments.
Outlook
Indias LFP battery materials industry is expected to post robust growth over the next few years. Rising electric mobility adoption, battery energy storage systems, and domestic battery manufacturing are key drivers. Demand is expected to be led by electric two-wheelers, three-wheelers, electric buses, commercial vehicles, and stationary storage. LFP batteries are already dominant in grid-scale lithium-ion deployments globally, accounting for over 60% share due to their safety, long cycle life and cost-effectiveness. In India, battery energy storage systems are likely to become a major demand driver as renewable energy integration, solar farms, and grid stabilisation requirements expand.
(Source: https://www.fortunebusinessinsights.com/lithium-ion-li-ion-phosphate-batteries-market-102152)
Key Growth Drivers Rising electric mobility
Growing EV adoption is increasing demand for battery cells, packs and materials, making batteries a critical part of the mobility value chain
Energy storage demand
Expansion of renewable energy and grid-scale storage is supporting battery demand, particularly for LFP batteries due to their safety and long cycle life
LFP chemistry adoption
LFP batteries are gaining preference because of better thermal stability, longer cycle life, lower cost and reduced dependence on cobalt and nickel
Localised supply chains
Countries are focusing on domestic battery and cathode material production to reduce import dependence and improve supply security
Raw material availability
Iron and phosphate-based chemistries benefit from wider raw material availability, reducing exposure to geopolitical and supply-chain risks
Company Overview
Founded in 1989, Sudeep Pharma Limited has evolved from a single-facility mineral excipients manufacturer into a globally recognised, technology-led producer of specialty ingredients. Today, the Company boasts a robust global footprint, exporting to over 100 countries. It serves a clientele of over 1,100 customers, including more than 40 blue-chip multinationals, 14 Fortune 500 companies, and global leaders.
Sudeep Pharma differentiates itself through deep in-house capabilities in mineral chemistry and process engineering. The Companys proprietary platforms encompass spray drying, encapsulation, liposomal delivery systems, and precision blending. This allows it to engineer minerals for improved functional outcomes such as controlled release and enhanced shelf life. Crucially, Sudeep Pharma is the only Company in India (and one of only nine globally) to hold a European CEP certification to promote and sell calcium carbonate as an API, cementing its formidable regulatory moat.
Key Developments of the Year
Landmark Public Listing: IPO and Stock Exchange Listings
A defining corporate development was the Companys successful Initial Public Offering (IPO) and subsequent listing on the BSE and NSE on 28th November, 2025. This transition to a public entity provides the capital framework required to support its aggressive global expansion and entry into the energy materials sector.
Strategic European Foothold: The NSS Acquisition
In May 2025, the Company acquired an 85% stake in Nutrition Supplies and Services (NSS), an Ireland-based specialist in infant and medical nutrition premixes. This acquisition provides immediate entry into the highly regulated European infant and clinical nutrition markets, effectively bypassing typical 4-to-7-year regulatory approval cycles. The integration is progressing smoothly, with Sudeep India beginning to act as a primary ingredient supplier to NSS, thereby optimising the supply chain and improving overall margins.
Manufacturing and Capacity Expansion: Unit IV, Nandesari, Gujarat
The Company is significantly increasing its industrial footprint to meet rising global demand. Construction of the Nandesari Greenfield (Unit IV), the Companys largest facility to date, located in Nandesari, Gujarat, is nearly complete. Planned for Commissioning in Q1 FY 2025-26, this site will add 51,200 MT of annual capacity. Unit IV will enable industrial-scale production of high-value molecules, including bisglycinates, gluconates, and citrates, which are clinically developed for superior nutrient absorption.
Energy Transition Pivot: Sudeep Advanced Materials
The Company has entered the global battery materials market through its subsidiary, Sudeep Advanced Materials (SAM), focusing on precursor cathode active materials (pCAM). The Company is setting up a plant at Dahej, Gujarat, spread across 80,980 sq. metres. The facility is expected to be commissioned in early 2027, with a Phase I capacity of 25,000 MT.
Business and Operational Highlights
Customer Acquisition and Global Reach
Sudeep Pharma continued to expand its global customer footprint, serving over 1,100 customers across ~100 countries. Its customer base includes 14 Fortune Global 500 companies and 40+ blue-chip multinational customers, reflecting strong acceptance across regulated pharmaceutical and food and nutrition markets.
Capacity Utilisation and Scale-up
The Company operates four manufacturing facilities with a combined annual capacity of 72,246 metric tonnes (MT). The Nandesari Greenfield facility will add 51,200 MT of capacity. Current overall capacity utilisation is close to 50%. The pharma, food, and nutrition vertical operates at ~65%, against optimum utilisation of ~70%.
R&D and Product Pipeline
Sudeep Pharma continued to deepen its innovation-led portfolio through six indigenously developed proprietary technologies: encapsulation, spray drying, granulation, trituration, liposomal preparation, and blending. These capabilities support improved bioavailability, controlled and sustained release, product stability, shelf-life extension, and taste and odour masking across pharmaceutical, food, and nutrition applications.
Advanced Materials Progress
Sudeep Advanced Materials made meaningful progress in battery-grade iron phosphate for LFP batteries. The Dahej Battery Materials Facility broke ground on 23rd January, 2026, with Phase I capacity of 25,000 MT per annum. Commissioning is targeted by Q1 FY28. The Company also upgraded its existing Pharma and Food Iron Phosphate capacity to produce 5,000 MT of battery-grade material and has secured commercial purchase orders against this upgraded capacity.
Strategic Subsidiary Integration
The acquisition of an 85% stake in NSS, Ireland, through Sudeep Pharma B.V., has strengthened the Companys advanced formulation capabilities and European presence. NSS provides access to infant and clinical nutrition markets and helps reduce the typical approval timeline for entry into these regulated categories.
Financial Performance Highlights
Key Financial Metrics
-=. Consolidated total income reached 670.84 Crs in FY 2025-26 (Revenue from operations at 642.26 Crs), jumping 28% YoY compared to 501.99 Crs in FY 2024-25. The acceleration reflects a full-period contribution from the NSS Ireland acquisition, consolidated from May 2025. It also reflects commencement of commercial production at the Nandesari Greenfield facility in Q4, and continued share gains in regulated US and EU specialty ingredient accounts
-=. Sudeep Pharma has structurally elevated its margin profile through a richer specialty mix and disciplined cost engineering. Operating Profit (EBITDA) for FY 2025-26 stood at 221.9 Crs, yielding an EBITDA margin of 34.6% versus FY 2024-25 (37.8%). This places Sudeep in the top decile of global specialty chemical peers, validating the strategic shift toward engineered, encapsulated, and regulated-channel SKUs
-=. Profit After Tax (PAT) grew to 174.3 Crs in FY 2025-26, reflecting YoY growth of 26% from 138.69 Crs in FY 2024-25. PAT margin held strong at 27.1%
-=. Backed by prudent capital allocation, the Company reported an FY 2025-26 Return on Equity (ROE) of 19.41% and a Return on Capital Employed (ROCE)
of 22.52%. Both metrics are deliberately moderated relative to FY 2024-25 levels following the 95 Crs fresh-equity infusion at IPO, which expanded the equity base ahead of full earnings absorption from the Dahej Phase I buildout
-=. Despite aggressive growth capex for Nandesari and Dahej, Sudeep maintains a highly conservative debt profile. Total borrowings stood at 148.3 Crs as of March 31,2026, against reserves and surplus of 872Crs, yielding a Debt-to-Equity ratio of just 0.17x and providing substantial headroom to self-fund the next leg of capacity expansion at Dahej without further dilution
Key Financial Ratios
| Key Financial Ratio | FY 2025-26 | FY 2024-25 | Variance (%) | Remarks for the Variance |
| Debtors Turnover (Days) | 127.54 | 132.92 | (4%) | No Significant Variance |
| Inventory Turnover (Days) | 121.10 | 92.27 | 31% | The increase in inventory days, as the company expanded globally and set up warehouses in USA and Europe. Also during the year end there was high volume of Raw material purchase |
| Interest Coverage Ratio | 30.99 | 32.28 | (4%) | No Significant Variance |
| Current Ratio | 3.09 | 2.43 | 27% | Due to significant increase in inventories and unutilized funds from IPO , there is increase in Current ratio |
| Debt Equity Ratio | 0.17 | 0.27 | (39%) | Due to increase in total equity by fresh issue of equity shares and CCPS in current year (Excluding NCI) |
| Material Margin (%) | 64.61% | 67.17% | (4%) | No Significant Variance |
| Net Profit Margin (%) | 27.14% | 27.64% | (2%) | No Significant Variance |
Return on Net Worth (RONW): The RONW for FY 2025-26 stood at 19.73%.
Opportunities, Threats, Risks and Concerns
Strategic Opportunities
Growth in specialty food ingredients
The specialty food ingredients market is expanding, driven by demand for healthier, innovative, and functional food products. This creates opportunities across bakery, beverages, dairy, processed foods, and nutrition-led formulations
Expansion of vitamins and minerals demand
Advancements in distribution channels, personalised nutrition, and the integration of vitamins and minerals into functional foods are supporting market expansion
Rising demand for food fortification
Lifestyle changes, declining nutritional value in agricultural produce, and increasing awareness of micronutrient deficiencies are supporting demand for fortified foods and mineral ingredients
Growth in pharmaceutical excipients
The global excipients market is expected to grow, while the Indian market is expected to grow faster. Indias high import dependence for excipients creates an opportunity for domestic manufacturers
Import substitution in India
India imports more than 80% of excipients from countries such as China, the US, Europe, Japan, and Korea. This creates room for Indian manufacturers to increase local production
Growth in vitamins and minerals
Both global and Indian vitamins and minerals markets are expected to grow at around 7% through 2024-2029, supported by nutrition awareness and food fortification trends
Technology-ledingredient formats
Encapsulation, spray drying, granulation, liposomal delivery, and premixes offer opportunities to improve nutrient stability, absorption, controlled release, and taste-masking, supporting higher-value formulations
Battery-grade iron phosphate opportunity
The Company has developed battery-grade iron phosphate and plans to set up 100,000 MTPA capacity in phases from early 2027. This creates a potential new business segment linked to the LFP battery value chain.
Ex-China battery material demand
Emerging demand for battery chemical supply chains outside China may support Sudeep Pharmas proposed battery-grade iron phosphate business
International presence and acquisition-led expansion
The Company has a presence across the US, South America, Europe, the Middle East, Africa, and Asia-Pacific. The acquisition of NSS in Ireland adds an international manufacturing base
Regulatory-compliant manufacturing and R&D capabilities:
Well-equipped manufacturing facilities, R&D capabilities, and experienced promoters and senior management are key strengths
Risk management strategies
Human Resources
The management believes that Sudeep Pharmas technological edge is driven by its human capital. Currently, the Company employs a robust workforce of over 525 permanent employees.
R&D and innovation focus
At the heart of the Company is an elite R&D facility staffed by over 41 specialised scientists, chemical engineers, and material experts. This team has successfully spearheaded over 300 projects and commercialised 106 unique products to date.
Talent acquisition for new verticals
In FY 2025-26, the Company successfully scaled up its leadership and technical talent specifically for the Battery Materials division (SAM), aggressively onboarding global industry veterans in green chemistry and advanced cathode engineering.
Health, safety, and environment (HSE)
Employee safety remains paramount. Rigorous, continuous EHS training programmes have been mandated across all six manufacturing sites. Industrial relations have remained exceptionally cordial, with no material labour disruptions during the year.
Internal Control Systems and Their Adequacy
The Company has an internal control framework appropriate to the scale, nature and complexity of its operations. The framework covers procurement, inventory management, material flow tracking, production processes, quality checks, sales, receivables, treasury, hedging, foreign exchange exposure, and statutory compliance.
The Company undertakes periodic audits and management reviews to assess the adequacy and effectiveness of internal controls. Observations arising from such reviews are evaluated and addressed through corrective actions. The internal control systems are reviewed by the management and Audit Committee to support financial integrity, regulatory compliance and operational discipline.
Cautionary Statement
This Management Discussion and Analysis may include forward-looking statements that reflect the Companys current intentions, beliefs, expectations, or projections. These statements are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated.
Such risks and uncertainties include, among others, changes in commodity prices, foreign exchange rates, raw material availability, regulatory requirements, global trade conditions, customer demand, project execution timelines, financing conditions, and general economic developments. Readers are advised not to place undue reliance on forward-looking statements, as actual outcomes may differ from those expressed or implied.
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