Sunrest Lifescience Ltd Management Discussions

The Management of the Company is pleased to present the Management Discussion and Analysis Report for the financial year 2025 26. This report provides an overview of the global and Indian economic environment, the pharmaceutical industry, key business developments, opportunities, risks and challenges, and the Companys performance during the year under review.

GLOBAL ECONOMY

The global economy remained resilient during the financial year 2025 26 despite persistent geopolitical tensions, trade policy uncertainties, supply chain realignments, inflationary pressures and volatility in energy and commodity prices. Although economic growth moderated across several developed economies, strong domestic demand in emerging markets, technological innovation and sustained investments in healthcare and digital transformation continued to support global economic activity.

Central banks across major economies maintained a cautious monetary policy approach throughout the year. While inflationary pressures gradually moderated in several regions, interest rates largely remained elevated to ensure price stability. Businesses worldwide continued to focus on operational efficiency, supply chain diversification, digital transformation and sustainability initiatives to mitigate evolving macroeconomic challenges.

The pharmaceutical and healthcare sectors continued to demonstrate resilience owing to increasing healthcare expenditure, rising prevalence of chronic diseases, ageing populations and continuous innovation in biotechnology, specialty medicines and precision healthcare.

Monetary Policy and Inflation Management

Major central banks adopted a balanced and data-driven monetary policy approach to contain inflation while supporting economic growth. Although inflation eased in several economies, borrowing costs remained relatively high, influencing capital investments and financing decisions across industries. Companies increasingly focused on improving operational efficiencies and prudent capital allocation to maintain profitability.

Moderate Growth in Advanced Economies

Advanced economies experienced relatively moderate growth due to high interest rates, geopolitical uncertainties and cautious consumer spending. While healthcare expenditure remained relatively stable, pharmaceutical companies continued to face pricing pressures, reimbursement challenges and increasing regulatory scrutiny in several developed markets.

Emerging Markets Continue to Drive Growth

Emerging economies, particularly India and other Asian economies, continued to outperform many developed markets, supported by robust domestic demand, expanding healthcare infrastructure, manufacturing growth and favourable demographic trends. India further strengthened its position as a global pharmaceutical manufacturing hub with continued emphasis on affordable medicines, vaccines and active pharmaceutical ingredients (APIs).

Increasing Focus on Healthcare Innovation

Governments and international healthcare organisations continued to invest significantly in strengthening healthcare infrastructure, improving accessibility to affordable medicines and promoting research and innovation. Investments in biotechnology, artificial intelligence, digital healthcare, biosimilars and specialty pharmaceuticals continued to create new growth opportunities for pharmaceutical companies globally.

Future Outlook

The long-term outlook for the global pharmaceutical industry remains positive, driven by increasing healthcare awareness, rising life expectancy, growing burden of chronic diseases, technological advancements and continuous investments in research and development. Companies with strong regulatory compliance, diversified product portfolios and efficient supply chains are expected to remain well-positioned for sustainable growth.

INDIAN ECONOMY

India continued to remain one of the fastest-growing major economies during the financial year 2025 26, supported by strong domestic consumption, resilient manufacturing activity, increasing government capital expenditure and sustained growth in the services sector. Despite uncertainties in the global economic environment, the Indian economy demonstrated remarkable resilience owing to healthy macroeconomic fundamentals, policy reforms and increasing private sector investments.

Government initiatives such as Make in India, Production Linked Incentive (PLI) Scheme, PM Gati Shakti, Digital India, and Atmanirbhar Bharat continued to strengthen Indias manufacturing capabilities and improve the countrys competitiveness across various sectors, including pharmaceuticals.

Growth Drivers

Domestic consumption continued to remain a major contributor to economic growth, supported by rising disposable incomes, improving employment levels and expanding urbanisation. Continued investment in infrastructure, healthcare, renewable energy and digital technologies further strengthened economic activity and investment confidence.

Inflation and Monetary Policy

The Reserve Bank of India continued to maintain a balanced monetary policy to ensure price stability while supporting economic growth. Inflation remained under control compared to previous years despite occasional volatility in food and commodity prices. The banking sector remained well-capitalised with healthy credit growth and improving asset quality.

External Sector

Indias external sector remained resilient with healthy foreign exchange reserves, steady remittance inflows and continued foreign direct investment. Although exports faced temporary challenges due to subdued global demand, services exports continued to perform strongly, supporting the countrys external stability.

Digital and Structural Reforms

India continued to witness rapid digital transformation through widespread adoption of digital payment systems, public digital infrastructure and technology-driven governance initiatives. Continued improvements in ease of doing business, taxation reforms and regulatory simplification enhanced investor confidence and strengthened the overall business environment.

Government Support for Pharmaceuticals

The Government of India continued to promote domestic pharmaceutical manufacturing through various policy initiatives, including the Production Linked Incentive (PLI) Scheme, support for API manufacturing, research and development, and strengthening healthcare infrastructure. These initiatives are expected to enhance Indias self-reliance and global competitiveness in the pharmaceutical sector.

The Company continues to align its business strategy with these national initiatives by strengthening its product portfolio, expanding market reach, maintaining high-quality standards and continuously improving operational efficiencies.

INDUSTRY OVERVIEW

The Indian pharmaceutical industry continues to be one of the most important contributors to the countrys healthcare ecosystem and global pharmaceutical supply chain. India remains the worlds largest supplier of generic medicines by volume and is widely recognised as a trusted manufacturer of affordable, high-quality pharmaceutical products.

The industry comprises generic formulations, Active Pharmaceutical Ingredients (APIs), vaccines, biosimilars, biotechnology products, specialty medicines, over-the-counter (OTC) medicines and contract research and manufacturing services (CRAMS). Supported by a robust manufacturing ecosystem, skilled scientific workforce and internationally compliant manufacturing facilities, India continues to strengthen its position in the global pharmaceutical market.

The pharmaceutical sector continues to benefit from several long-term structural drivers, including:

Rising healthcare awareness and expenditure. Growing incidence of chronic and lifestyle-related diseases. Expanding health insurance coverage. Increasing ageing population. Greater demand for affordable medicines. Growing exports and international market opportunities.

Continuous innovation in biotechnology, biosimilars and specialty pharmaceuticals.

Government initiatives promoting domestic manufacturing and research.

India continues to maintain a strong global presence in pharmaceutical exports, vaccines, generic medicines and Active Pharmaceutical Ingredients (APIs). Continuous investments in research and development, digital healthcare, quality compliance and manufacturing capabilities are expected to further strengthen the industrys long-term growth prospects.

The global pharmaceutical industry also continued its steady growth trajectory during the year, supported by increasing healthcare investments, technological advancements, precision medicine, artificial intelligence, biotechnology and rising demand for innovative therapies. The long-term outlook for both the Indian and global pharmaceutical industries remains positive, creating significant opportunities for companies focused on quality, innovation, regulatory compliance and sustainable growth.