The following discussion and analysis is intended to convey the managements perspective on our financial condition and results of operations as at and for the financial years ended March 31, 2026, March 31, 2025, and March 31, 2024. The following information should be read in conjunction with, the more detailedfinancial and other information included in this Red Herring Prospectus, including the information contained in "Risk Factors", "Industry Overview", "Our Business", and "Restated Consolidated Summary Statements" on pages 28, 169, 218 and 309, respectively, as well as other financial and other information contained in this Red Herring Prospectus.
This Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Red Herring Prospectus. Some of the information in this section, including information with respect to our business plans and strategies, contains forwardlooking statements that involve risks and uncertainties. You should read "Forward-Looking Statements" on page 26for a discussion of the risks and uncertainties related to those statements and also the sections "Risk Factors", "Industry Overview", "Our Business", and "Restated Consolidated Summary Statements" on pages 28, 169, 218 and 309, respectively, as well as financial and other information contained in this Red Herring Prospectus as a whole, for a discussion of certain factors that may affect our business, financial condition or results of operations. Our actual results may differ materially from those expressed in or implied by these forward-looking statements.
We have also included various financial and operational performance indicators in this Red Herring Prospectus, some of which have not been derived from the Restated Consolidated Summary Statements. The manner of calculation and presentation of some of the financial and operational performance indicators, and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions. For further information, see "Risk Factors - Certain non-GAAP financial measures relating to our operations and financial performance have been included in this Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable" on page 67. Our Companys financial year commences on April 1 and ends on March 31 of the subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that year.
Unless the context otherwise requires, in this section, references to "the Company" or "our Company" are to Symbiotec Pharmalab Limited on a standalone basis and references to "we", "us" or "our" are to Symbiotec Pharmalab Limited on a consolidated basis.
Unless otherwise indicated, industry and market data used in this section has been derived from industry publications, in particular, the report titled "Independent Market Research on the Overview of the Global API Market and Fermentation Technologies" dated August 2026 (the "F&S Report") prepared and issued by F&S, pursuant to an engagement letter dated June 19, 2026. The F&S Report has been exclusively commissioned and paid for by us in connection with the Issue. The data included herein includes excerpts from the F&S Report and may have been re-ordered by us for the purposes of presentation. A copy of the F&S Report is available on the website of our Company at http://investor.symbiotec.com/. For further information, see "Risk Factors -Certain sections of this Red Herring Prospectus disclose information from the F&S Report which has been prepared exclusively for the Offer and commissioned and paidfor by us exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks" on page 60. Also see, "Certain Conventions Use of Financial Information and Market Data and Currency of Presentation - Industry and Market Data " on page 23.
OVERVIEW
For information in relation to our business, see "Our Business" on page 218.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations and financial condition are affected by a number of significant factors, including the following:
Volume of products manufactured and sold
The key driver in the growth of our revenue from operations has been the volume of products manufactured and sold by us. As of March 31, 2026, we had two operational industrial scale API manufacturing facilities - the Rau Facility and the Pithampur Facility. In addition, as of March 31, 2026, we have commissioned the 400 KL Ujjain Facility for biomanufacturing. We are expanding our biologics capacity by adding a proposed dedicated 14 KL (comprising two reactors of 7 KL each) fermentation capacity for biologics manufacturing in Ujjain, Madhya Pradesh to cater to the increasing demand for GLP-1 and Insulin. Further, as of March 31, 2026, we have commissioned the Mhow Facility for complex injectables, where we have started R&D and pilot scale operations. The Mhow Facility is capable of producing up to 20 million DCVs per annum with space for further expansion. Our infrastructure provides us flexibility for both high and low volume manufacturing of varying complexity and enables us to offer our services as a CDMO to specialty pharmaceutical and nutraceutical companies globally.
Our actual production volumes may differ from our estimates due to variations in customer demand for our products. When actual production volumes differ from our estimates, we generally seek to make up any shortfalls through new orders, either with existing or with new customers. Further, since the number of purchase orders that our customers place with us may differ from quarter to quarter, our revenues, results of operations and cash flows may fluctuate. Higher sales volumes generally lead to increased revenue and better absorption of fixed and variable costs, thereby improving our profitability. Conversely, lower sales volumes can result in underutilisation of production capacities and higher per-unit costs, negatively impacting our financial performance. The mix of products we supply within our three complementary platforms, namely API products, CDMO services and complex injectables, also determines the margins we are able to earn from our sales.
Our relationships with customers
Our results of operations significantly depend on our relationships with our key customers. We have supplied products to over 200 customers spread across over 40 countries, as of March 31, 2026. We have established long-standing relationships with several Indian and global pharmaceutical companies. Our customer portfolio comprises key generic and specialty pharmaceutical companies in major global markets such as United States, Europe, and the rest of the world (including Asia), including several prominent pharmaceutical majors and formulations companies.
The following table sets forth the contribution to our revenue from sale of products from our top five and top ten customers for the years indicated:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| Amount ( Rs. million) | Percentage of revenue from sale of products (%) | Amount ( Rs. million) | Percentage of revenue from sale of products (%) | Amount ( Rs. million) | Percentage of revenue from sale of products (%) | |
| Top five customers | 3,475.98 | 43.01% | 3,037.13 | 42.27% | 3,154.83 | 48.51% |
| Top ten customers | 4,654.71 | 57.59% | 4,015.76 | 55.90% | 4,009.50 | 61.65% |
For further information, see "Our Business - Business Operations - Customers" on page 247.
The loss of any of our top customers, or a decline in revenues from them may affect our results of operations. The volume and timing of sales to our customers may also vary due to changes in their requirements, geopolitical issues, and the management of inventory levels.
Cost and availability of raw materials
Our principal raw materials include phytosterols and certain fermentation-based and semi synthetic intermediates, as key starting materials for our APIs. We procure such raw materials from our suppliers based on purchase orders and are thus exposed to fluctuations in availability and prices of our raw materials, which we may not be able to effectively pass on to our customers, and which in turn may affect our margins. We may experience unanticipated increases in the cost of materials we require due to fluctuations in the supply and demand in the national and international markets for raw materials.
The table below sets forth details of our cost of raw materials, packing material and consumables consumed and its percentage of total expenses in the corresponding years:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Cost of raw materials, packing material and consumables consumed ( Rs.million) (A) | 3,020.87 | 2,854.88 | 3,126.30 |
| Total expenses million) (B) | 7,099.02 | 6,088.49 | 5,909.85 |
| Cost of raw materials, packing material and consumables consumed, as a percentage of Total expenses (%) (A/B*100) | 42.55% | 46.89% | 52.90% |
We procure raw materials for our operations domestically as well as from different countries, including China and the United States, the details of which are as follows:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| Amount ( Rs. million) | Percentage of total expenses (%) | Amount ( Rs. million) | Percentage of total expenses (%) | Amount ( Rs. million) | Percentage of total expenses (%) | |
| Raw materials sourced domestically | 781.35 | 11.00% | 915.79 | 15.04% | 785.62 | 12.84% |
| Raw material imports | 1,868.82 | 26.32% | 1,197.36 | 19.67% | 3,275.61 | 55.43% |
| - United States of America | 59.77 | 0.84% | 39.10 | 0.64% | 20.02 | 0.34% |
| - China | 1,695.24 | 23.88% | 1,024.32 | 16.82% | 3,119.82 | 52.79% |
| - Other countries* | 113.81 | 1.60% | 133.94 | 2.20% | 135.76 | 2.30% |
* Other countries includes Singapore, Malaysia and Germany.
Any import restrictions or the imposition of tariff restrictions may impede our supply chain for raw materials. Any inability on our part to procure sufficient quantities of raw materials and on commercially acceptable terms, could lead to a change in our manufacturing and sales volumes.
The table below sets forth details of our purchases from our largest suppliers in the corresponding years:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| Amount ( Rs. million) | Percentage of total expenses (%) | Amount ( Rs. million) | Percentage of total expenses (%) | Amount ( Rs. million) | Percentage of total expenses (%) | |
| Top five suppliers | 1,501.96 | 21.16% | 850.41 | 13.97% | 2,293.90 | 38.81% |
| Top ten suppliers | 1,810.15 | 25.50% | 1,120.78 | 18.41% | 2,974.31 | 50.33% |
Our reliance on key suppliers presents several risks, including potential shortages of raw materials, increased costs, and reduced control over delivery schedules. Additionally, some suppliers may not have the capacity to handle sudden increases in orders for raw materials or may prioritise other customers over us.
Research and development
Our research and development ("R&D") efforts are central to our ability to build, scale, and sustain complex manufacturing technologies. As of March 31, 2026, our R&D team comprised 156 scientists and engineers, including 117 with masters degrees and 10 with PhDs, engaged in new product development, process innovation, technology transfer and scale-up. As of March 31, 2026, we operated three dedicated R&D centres in Indore, Madhya Pradesh, focused on driving innovation across organic chemistry, biotechnology, and complex injectables. Our R&D initiatives focus on developing new products, optimising processes to minimise costs and reduce process time, and improving manufacturing yields. In order to develop our product pipeline and grow our business, we commit substantial time, funds and other resources in R&D. In addition, we must adapt to rapid changes in our industry due to technological advances and scientific discoveries. While we strive to keep our technology, facilities and machinery updated the latest international standards, the cost of implementing new technologies, upgrading our manufacturing facilities and retaining our R&D team will affect our results of operations and cash flows.
The table below sets forth below our expenses on R&D during the corresponding years:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| Research and development expenses million) (A) | 296.95 | 311.43 | 205.09 |
| Total expenses (^million) (B) | 7,099.02 | 6,088.49 | 5,909.85 |
| Research and development expenses, as a percentage of Total expenses (%) (A/B*100) | 4.18% | 5.12% | 3.47% |
General and Indian economic conditions
We are affected by general global and Indian economic conditions. Our performance and growth will depend to a large extent on the health of the economies in which we operate. While our Company is incorporated in India and our manufacturing units are based in India, our export operations are central to our business strategy. Our revenue base is well diversified, with 67.04% of our revenue from operations in Fiscal 2026 generated from international markets and 32.96% from domestic markets which includes indirect exports to regulated markets.
We intend to continue to focus on international markets including United States, Europe and the rest of the world (including Asia). As of March 31, 2026, we held 43 drug master files ("DMFs") registered with the US FDA and 23 certificates of suitability ("CEPs") from the European Directorate for the Quality of Medicines and HealthCare ("EDQM"). We are, therefore, dependent on domestic, and global economic and market conditions of the markets in which we operate or intend to operate. Our business, results of operation and financial condition could be influenced by factors such as inflation, access to capital and borrowing costs, trade policies in terms of tariff and non-tariff barriers, Indias trade deficit, fluctuations in global commodity prices and fluctuations in Indias foreign exchange reserves or currency exchange rates, among others.
PRESENTATION OF FINANCIAL INFORMATION
The Restated Consolidated Summary Statements as at and for the years ended March 31, 2026, March 31, 2025, and March 31, 2024 comprise the restated consolidated balance sheet as at March 31, 2026, March 31, 2025, and March 31, 2024, the restated consolidated statement of profit and loss (including other comprehensive income), the restated consolidated statement of changes in equity and the restated consolidated statement of cash flows for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024, the summary statement of material accounting policies, notes, and other explanatory information relating to such financial periods prepared in accordance with Ind AS specified under Section 133 of the Companies Act 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and restated in accordance with the SEBI ICDR Regulations.
NON-GAAP MEASURES
Certain non-GAAP financial measures and certain other industry measures relating to our operations and financial performance such as EBITDA, EBITDA Margin (%), PAT Margin (%), Return on Equity (%), Net worth, Net Debt, Net Debt to EBITDA, Non-current liabilities - Financial Liabilities - Borrowings to Total equity ratio, Total borrowings to Total equity ratio, Net cash flow generated from operating activities to EBITDA (collectively, "Non-GAAP Measures") have been included in this Red Herring Prospectus. We compute and disclose such non-GAAP financial measures and such other industry related statistical information relating to our operations and financial performance as we consider such information to be useful measures of our business and financial performance, and because such measures are frequently used by securities analysts, investors and others to evaluate the operational performance of the industry, many of which provide such non-GAAP financial measures and other industry related statistical and operational information. Such supplemental financial and operational information is therefore of limited utility as an analytical tool, and investors are cautioned against considering such information either in isolation or as a substitute for an analysis of our audited financial statements as reported under applicable accounting standards disclosed elsewhere in this Red Herring Prospectus.
These non-GAAP financial measures and such other industry related statistical and other information relating to our operations and financial performance may not be computed on the basis of any standard methodology that is applicable across the industry and therefore may not be comparable to financial measures and industry related statistical information of similar nomenclature that may be computed and presented by other companies. Further, these non-GAAP financial measures are not a measurement of our financial performance or liquidity under Ind AS, IFRS or US GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, IFRS or US GAAP. In addition, these non-GAAP measures are not standardised terms, hence a direct comparison of these non-GAAP measures between companies may not be possible. Other companies may calculate these non-GAAP measures differently from us, limiting its usefulness as a comparative measure. Although such non-GAAP measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are usefu l to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance.
For further information, see "Risk Factors - Certain non-GAAP financial measures relating to our operations and financial performance have been included in this Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable" on page 67.
SUMMARY OF MATERIAL ACCOUNTING POLICIES
Set forth below are our material accounting policies:
Current versus non-current classification
The Group presents assets and liabilities in the balance sheet based on current/ non-current classification.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Group has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
Investment in associates and joint ventures
A joint venture is an arrangement in which the Group has joint control and has right to the net assets of the arrangement, rather than the right to its assets and obligations for its liabilities.
The group investments in its joint ventures are accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Groups share of net assets of the joint venture since the acquisition date.
The statement of profit and loss reflects the Groups share of the results of operations of the joint venture. Any change in OCI of those investees is presented as part of the Groups OCI. In addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.
If an entitys share of losses of a joint venture equals or exceeds its interest in the joint venture (which includes any long term interest that, in substance, form part of the Groups net investment in the joint venture), the entity discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture. If the joint venture subsequently reports profits, the entity resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.
The aggregate of the Groups share of profit or loss of a joint venture is shown on the face of the statement of profit and loss.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value, and then recognises the loss as ‘Share of profit of a joint venture in the statement of profit or loss.
Upon loss of joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss
Foreign currencies
The consolidated financial statements are presented in Rs., which is also its functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group at their respective functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of the following:
Exchange differences arising on monetary items that forms part of a reporting entitys net investment in a foreign operation are recognised in profit or loss in the separate financial statements of the reporting entity or the individual financial statements of the foreign operation, as appropriate. In the financial statements that include the foreign operation and the reporting entity (e.g., consolidated financial statements when the foreign operation is a subsidiary), such exchange differences are recognised initially in OCI and accumulated in equity in a separate reserve, viz., Foreign Currency Translation Reserve. These exchange differences are reclassified from equity to profit or loss on disposal of the net investment. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in OCI.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in Other Comprehensive Income (OCI) or profit or loss are also recognised in OCI or profit or loss, respectively).Exchange difference in the foreign currency translation reserve are reclassified to profit & loss account on disposal of the foreign operations.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Group.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the consolidated financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
In determining the fair value of its financial instruments, the Group uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value includes discounted cash flows analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result from general approximation of value and the same may differ from the actual value realised.
Revenue recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory risks.
However, Goods and services tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognised.
Sale of goods
Revenue from sale of products (including sale under co-marketing agreement) is recognised at the point in time when control of the asset is transferred to the customer, generally on delivery of the products. Invoices are payable within contractually agreed credit period.
The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of products, the Company considers the effects of variable consideration (if any). Revenues are net of sales returns, discounts, provision for anticipated returns on expiry, made on the basis of management expectations.
Rendering of services
Revenue from service rendered is recognized based on the terms of the agreements as and when services are rendered and are net of GST (wherever applicable).
Group has more than one performance obligation in case of long - term contracts satisfied over a period of time.
Collaboration arrangements are contractual agreements with third parties that involve a joint operating activity, typically a research and/or commercialization effort, where both we and our partner are active participants in the activity and are exposed to the significant risks and rewards of the activity. Our rights and obligations under our collaboration arrangements vary. These arrangements typically consist of an initial up-front payment on inception of the contract and subsequent payments dependent on achieving certain milestones in accordance with the terms prescribed in the agreement. Non-refundable up-front license fees received in connection with these agreements are deferred and recognised over the balance period in which the Group has pending performance obligations. The revenue is measured by input method i.e. the proportion that costs incurred to date bear to the estimated total costs of a contract. The input method is the most faithful depiction of the Groups performance because it directly measures the value of the services transferred to the customer.
In determining the transaction price, the Group considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any). The Group estimates variable consideration at contract inception until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
Interest income
Interest income is recognized on a time proportion basis taking into account the amount outstanding using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. Interest income is included in Other Income in the Statement of Profit and Loss.
Dividends
Revenue is recognised when the Group s right to receive the payment is established, which is generally when shareholders approve the dividend.
Export Incentive Entitlements
Incentive entitlement on exports (e.g., the erstwhile Merchandise Exports from India Scheme (MEIS), Remission of Duties and Taxes on Export Products (RoDTEP) are recognised to the extent there is no uncertainty as to realisation.
Other Income
Other income is accounted for on accrual basis except where the receipt of income is uncertain.
Contract balances Trade receivables
A receivable represents the Companys right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (n) Financial instruments - initial recognition and subsequent measurement.
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
Taxes
Current income tax
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates an item which is recognised directly in equity or in other comprehensive income. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss are recognised as a part of these items (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. The management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
- When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
- When the deferred Tax Asset relating to the deductible temporary difference arises from the initial recognition of an Asset or liability in a transaction that is not a business
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
- When the deferred Tax Asset relating to the deductible temporary difference arises from the initial recognition of an Asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Property, plant and equipment
Capital work in progress, property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Depreciation on property, plant and equipment is calculated on a straight-line basis using the useful lives indicated in Schedule II of the Act. The Group has used the following rates to provide depreciation on its fixed assets.
| Assets | Useful life ( in years) | As per Schedule II (in years) |
| Buildings | ||
| - Factory buildings | 30 years | 30 years |
| - Other buildings | 60 years | 60 years |
| Plant and machinery | 3 years to 20 years | 3 years to 20 years |
| Electrical installations | 10 years | 10 years |
| Furniture, fittings and equipments | 10 years | 10 years |
| Office equipments | 10 years | 10 years |
| Vehicles | 8 years | 8 years |
| Computers | 3 years | 3 years |
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of plant and machinery over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Investment properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
The cost includes the cost of replacing parts and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of the investment properties are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in profit or loss as incurred.
The Company depreciates investment property over the useful life/lease period.
Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:
- The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
- Its intention to complete and its ability and intention to use or sell the asset
- How the asset will generate future economic benefits
- The availability of resources to complete the asset
- The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation expense is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
During the period of development, the asset is tested for impairment annually.
Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration
For arrangements entered into prior to April 01, 2016, the Group has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases. The Group recognises lease liabilities to make lease payments and Right-of-use assets representing the right to use the underlying assets.
i) Right of use assets (ROU)
The Group recognises Right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of Right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The Right-of-use assets are also subject to impairment. Refer to the accounting policies in Note 1.3 (l) Impairment of non-financial assets.
ii) Lease Liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Groups lease liabilities are included in Financial Liabilities.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
- Raw materials, packing material and consumables: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
- Work-in-progress and finished goods: Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit and loss.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Retirement and other employee benefits
All employee benefits payable wholly within twelve months are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc. and the expected cost of bonus, ex- gratia are recognised during the period in which the employee renders related service.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered the service entitling them to the contribution.
Employee benefits in the form of contribution to Provident Fund managed by Government Authorities, Employees State Insurance Corporation and Labour Welfare Fund are considered as defined contribution plan and the same is charged to the statement of profit and loss for the year when the contributions to the respective funds are due.
The Group operates a defined benefit gratuity plan in India.
The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to the retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
- Theac date of the plan amendment or curtailment, and
- The date that the Group recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
- Net interest expense or income
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the balance sheet date.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
• Financial assets at amortised cost
• Financial assets including derivatives at fair value through profit or loss (FVTPL)
• Financial assets at fair value through other comprehensive income (FVTOCI)
Financial asset at amortised cost
A ‘financial asset is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables, loans and other financial assets.
Financial Assets at FVTOCI
A financial asset is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The assets contractual cash flows represent SPPI.
Financial asset included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Group recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Financial asset at FVTPL
FVTPL is a residual category for financial asset. Any financial asset, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Group may elect to designate a financial asset, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch). The Group has not designated any debt instrument as at FVTPL.
Financial asset included within the FVTPL category are measured at fair value with all changes recognized in the P&L.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial assets) is primarily derecognised (i.e. removed from the Groups Balance Sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Groups continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
On derecognition of a financial asset in its entirety, the differences between the carrying amounts measured at the date of derecognition and the consideration received is recognised in the statement of profit and loss.
Impairment of financial assets
In accordance with Ind AS 109, the Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.
b) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18.
The Group follows ‘simplified approach for recognition of impairment loss allowance on trade receivables.
The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Group determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, twelve month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on twelve month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The twelve month ECL is a portion of the lifetime ECL which results from default events that are possible within twelve months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the entity expects to receive (i.e. net of all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
- All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
As a practical expedient, the Group uses a provision matrix to determine impairment loss allowance on its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
ECL impairment loss allowance (or reversal) recognised during the year is recorded in the statement of profit and loss. The amount is reflected under the head Other expenses / income in the statement of profit and loss.
The Group does not have any purchased or originated credit-impaired financial assets, i.e. financial assets which are credit impaired on purchase/ origination.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Groups financial liabilities trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied.
Loans and borrowings
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
This category generally applies to borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Segment Reporting
Based on "Management Approach" as defined in Ind AS 108 - Operating Segments, the Chief Operating Decision Makers evaluate the Groups performance and allocate the resources based on an analysis of various performance indicators by business segments.
The Group prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Group as a whole.
Cash and cash equivalents
Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short- term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
Cash dividend to equity share holders
The Group recognises a liability to make cash or non-cash distributions to its equity shareholders when the distribution is authorised and the distribution is no longer at the discretion of the Group. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Dividends paid/payable are recognised in the year in which the related dividends are approved by the Shareholders or Board of Directors as appropriate.
Earnings per share
The Groups Earnings per Share (‘EPS) is determined based on the net profit attributable to the shareholders of the Group.
Basic earnings per share is calculated by dividing the profit from continuing operations and total profit, both attributable to equity shareholders of the Group by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is computed using the weighted average number of common and dilutive shares outstanding during the year including share based payments, except where the result would be anti-dilutive.
Government grants and subsidies
Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Group will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.
When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. When the grant relates to an expense item, it is recognised in the statement of profit and loss on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as deferred income that is recognised in profit and loss on a systematic basis over the useful life of the asset.
Share-based payments
Certain Employees of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.
That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companys best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit and loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.
Service conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Companys best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
No expense is recognised for awards that do not ultimately vest because service conditions have not been met.
When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The payment on any re-purchase of vested equity instruments shall be accounted as a deduction from equity, except to the extent that the payment exceeds the fair value of the equity instruments re-purchased, measured at the re-purchase date. Any such excess shall be recognised as an expense.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in our accounting policies during Fiscals 2026, 2025 and 2024.
SEGMENT REPORTING
Our Company has only one reportable segment, i.e., manufacturing of active pharmaceutical ingredients and intermediaries.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE Income
Our total income comprises revenue from operations and other income.
Revenue from operations
Our revenue from operations primarily consists of (i) sale of products - finished goods; (ii) sale of services; (iii) other operating revenue in terms of (a) scrap and other sales; (b) performance linked incentive; and (c) income from export incentives; and (iv) miscellaneous income.
Other income
Other income primarily comprises (i) provision for doubtful debts written back (net); (ii) gain on fair valuation of current investments measured at fair value through profit or loss (net); (iii) foreign exchange gain on sale of investment in subsidiary; (iv) foreign exchange fluctuation (gain); (v) gain on disposal of fixed assets (net); (vi) insurance claim
received; (vii) sundry balances written back; (viii) miscellaneous income; and (ix) interest income.
Expenses
Our expenses comprise: (i) cost of raw materials, packing material and consumables consumed; (ii) changes in inventories of finished goods, semi-furnished goods and work-in-progress; (iii) employee benefit expenses; (iv) finance costs; (v) depreciation and amortization expense; and (vi) other expenses.
Cost of raw materials, packing material and consumables consumed
Cost of raw materials, packing material and consumables consumed consists of opening and closing inventory of raw material and raw material consumption.
Employee benefit expenses
Employee benefit expenses consist of (i) salaries, wages and bonus; (ii) contractual workers - wages; (iii) contribution to provident and other funds; (iv) gratuity expense; (v) expense on employee stock option scheme and (vi) staff welfare expenses.
Finance costs
Finance costs comprise (i) interest on borrowings (at amortised cost) on (a) loans; (b) cash credit accounts/ working capital demand loan ("WCDL"); and (c) pre-shipment credit in foreign currency; (ii) processing charges; (iii) interest expense on lease liabilities; and (iv) others.
Depreciation and amortization expense
Depreciation and amortization expense comprises (i) depreciation of tangible assets; (ii) amortization of intangible assets; and (iii) depreciation of investment properties.
Other expenses
Other expenses primarily includes (i) consumption of stores and spares; (ii) freight and handling expenses; (iii) power and fuel; (iv) repairs and maintenance; (v) insurance; (vi) rates and taxes; (vii) communication expenses; (viii) travelling and conveyance; (ix) printing and stationery; (x) business promotion expenses; (xi) legal and professional; (xii) commission on sales; (xiii) CSR expenditure; (xiv) loss on conversion of joint venture to subsidiary; (xv) bad debts; (xvi) loss on foreign exchange fluctuation (net); (xvii) research and development expenses; (xviii) bank charges; (xix) loss on sale of property plant and equipment; (xx) waste management expenses; and (xxi) miscellaneous expenses.
RESULTS OF OPERATIONS
The following table sets forth certain information with respect to our results of operations and as a percentage of total income for Fiscals 2026, 2025 and 2024:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| ( Rs. million) | Percentage of Total Income (%) | ( Rs. million) | Percentage of Total Income (%) | ( Rs. million) | Percentage of Total Income (%) | |
| Revenue from operations | 8,691.49 | 99.64% | 7,515.54 | 99.41% | 7,162.47 | 99.02% |
| Other income | 31.09 | 0.36% | 44.25 | 0.59% | 70.87 | 0.98% |
| Total income | 8,722.58 | 100.00% | 7,559.79 | 100.00% | 7,233.34 | 100.00% |
| Expenses: | ||||||
| Cost of raw materials, packing material and consumables consumed | 3,020.87 | 34.63% | 2,854.88 | 37.76% | 3,126.30 | 43.22% |
| (Increase)/ decrease in inventories of finished goods, semi finished | 133.77 | 1.53% | 119.14 | 1.58% | 83.78 | 1.16% |
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 | |||
| ( Rs. million) | Percentage of Total Income (%) | ( Rs. million) | Percentage of Total Income (%) | ( Rs. million) | Percentage of Total Income (%) | |
| goods and work in progress | ||||||
| Employee benefit expenses | 1,543.39 | 17.69% | 1,222.82 | 16.18% | 1,040.78 | 14.39% |
| Finance costs | 253.27 | 2.90% | 160.36 | 2.12% | 72.36 | 1.00% |
| Depreciation and amortisation expense | 532.83 | 6.11% | 431.01 | 5.70% | 388.22 | 5.37% |
| Other expenses | 1,614.89 | 18.51% | 1,300.28 | 17.20% | 1,198.41 | 16.57% |
| Total expenses | 7,099.02 | 81.39% | 6,088.49 | 80.54% | 5,909.85 | 81.71% |
| Profit before tax and share of profit/(loss) of the joint venture, exceptional items | 1,623.56 | 18.61% | 1,471.30 | 19.46% | 1,323.49 | 18.29% |
| Share of profit / (loss) of Joint venture | - | - | (1.55) | (0.02)% | (13.66) | (0.19)% |
| Profit before tax and exceptional items | 1,623.56 | 18.61% | 1,469.75 | 19.44% | 1,309.83 | 18.11% |
| Exceptional items | ||||||
| Impact of New wages code on Gratuity & Leave encashment | 89.93 | 1.03% | - | - | - | - |
| Profit before tax for the year | 1,533.63 | 17.58% | 1,469.75 | 19.44% | 1,309.83 | 18.11% |
| Tax expense: | ||||||
| Current tax | 593.75 | 6.81% | 473.85 | 6.27% | 311.26 | 4.30% |
| Adjustment of tax relating to earlier periods Charge/ (Credit) | 1.96 | 0.02% | 5.99 | 0.08% | (2.07) | (0.03%) |
| Deferred Tax | (140.04) | (1.61)% | 22.06 | 0.29% | 0.09 | 0.00% |
| Deferred Tax - Exceptional | (21.07) | (0.24)% | - |
- |
- |
- |
| Total Income tax expense | 434.60 | 4.98% | 501.90 | 6.64% | 309.28 | 4.28% |
| Profit for the year | 1,099.03 | 12.60% | 967.85 | 12.80% | 1,000.55 | 13.83% |
FISCAL 2026 COMPARED TO FISCAL 2025 Total Income
Our total income increased by 15.38% from Rs. 7,559.79 million in Fiscal 2025 to Rs. 8,722.58 million in Fiscal 2026. This increase was due to an increase in revenue from operations, which was partially offset by a decrease in other income.
Revenue from operations
Our revenue from operations increased by 15.65% from Rs. 7,515.54 million in Fiscal 2025 to Rs. 8,691.49 million in Fiscal 2026, primarily on account of increases in (i) sale of products - finished goods from Rs. 7,184.39 million in Fiscal 2025 to Rs. 8,081.84 million in Fiscal 2026, and (ii) sale of services from Rs. 107.26 million in Fiscal 2025 to Rs. 330.50 million in Fiscal 2026, on account of recognition of milestone income.
The table below sets forth revenues generated from various geographies as per (Ind AS 108) - "Operating Segments" in the corresponding years, as well as their percentage of revenue from operations:
| Particulars | Fiscal 2026 | Fiscal 2025 | ||
| Amount ( Rs. million) | Percentage of revenue from operations (%) | Amount ( Rs. million) | Percentage of revenue from operations (%) | |
| Revenue from external customers - India (A) | 2,865.05 | 32.96% | 3,367.75 | 44.81% |
| Revenue from external customers outside India (B) | 5,826.44 | 67.04% | 4,147.79 | 55.19% |
| - Europe | 2,529.86 | 29.11% | 2,271.07 | 30.22% |
| - United States | 1,140.00 | 13.12% | 302.02 | 4.02% |
| - Rest of the world* | 2,156.58 | 24.81% | 1,574.71 | 20.95% |
| Revenue from operations | 8,691.49 | 100.00% | 7,515.54 | 100.00% |
| Particulars | Fiscal 2026 | Fiscal 2025 | ||
| Amount ( Rs. million) | Percentage of revenue from operations (%) | Amount ( Rs. million) | Percentage of revenue from operations (%) | |
| (A+B) |
*Rest of the world includes Asia (other than India) and Africa.
Our other operating revenue decreased in Fiscal 2026 compared to Fiscal 2025 on account of decrease in Performance Linked Incentive (PLI) from Rs. 100.00 million in Fiscal 2025 to Rs. 53.30 million in Fiscal 2026, due to capping of incentive income within the first four years of the scheme. Our Government Grant increased from Rs. 7.50 million in Fiscal 2025 to Rs. 78.60 million in Fiscal 2026, on account of receipt of investment promotion subsidy.
Other income
Our other income decreased by 29.74% from Rs. 44.25 million in Fiscal 2025 to Rs. 31.09 million in Fiscal 2026, primarily due to decrease in (i) Miscellaneous income from Rs. 13.57 million in Fiscal 2025 to Rs. 4.75 million in Fiscal 2026, and (ii) sundry balances written back from Rs. 12.69 million in Fiscal 2025 to Rs. 2.88 million in Fiscal 2026. These were partially offset by gain on dissolution of subsidiary of Rs. 18.43 million in Fiscal 2026, compared to nil in Fiscal 2025.
Total Expenses
Our total expenses increased by 16.60% from Rs. 6,088.49 million in Fiscal 2025 to Rs. 7,099.02 million in Fiscal 2026, mainly due to the following factors:
Cost of raw materials, packing material and consumables consumed
Our cost of raw materials, packing material and consumables consumed increased by 5.81% from Rs. 2,854.88 million in Fiscal 2025 to Rs. 3,020.87 million in Fiscal 2026, primarily on account of an improved product mix and lower raw material cost.
Employee benefit expenses
Our employee benefit expenses increased by 26.22% from Rs. 1,222.82 million in Fiscal 2025 to Rs. 1,543.39 million in Fiscal 2026, primarily due to increases in (i) salaries, wages and bonus from Rs. 1,028.21 million in Fiscal 2025 to Rs. 1,240.29 million in Fiscal 2026, (ii) expense on employee stock option scheme from Rs. 42.93 million in Fiscal 2025 to Rs. 97.46 million in Fiscal 2026, (iii) contractual workers- wages from Rs. 56.59 million in Fiscal 2025 to Rs. 95.86 million in Fiscal 2026, and (iv) staff welfare expenses from Rs. 44.57 million in Fiscal 2025 to Rs. 52.17 million in Fiscal 2026. The increase in employee benefit expenses were primarily on account of increase in the number of employees from 2,054 as of March 31, 2025 to 2,595 as of March 31, 2026 and annual increments given to employees.
Finance costs
Our finance costs increased by 57.94% from Rs. 160.36 million in Fiscal 2025 to Rs. 253.27 million in Fiscal 2026, primarily due to increases in interest on borrowings (at amortized cost) (i) on cash credit accounts/WCDL/buyers credit from Rs. 116.60 million in Fiscal 2025 to Rs. 157.05 million in Fiscal 2026, and (ii) on Term loans from Rs. 20.98 million in Fiscal 2025 to Rs. 65.48 million in Fiscal 2026. This was on account of increase in our total borrowings during the year. However, total borrowings decreased from Rs. 5,409.23 million as of March 31, 2025 to Rs. 3,879.14 million as of March 31, 2026, particularly in the latter part of the year, due to repayment of loans.
Depreciation and amortization expense
Our depreciation and amortization expense increased by 23.62% from Rs. 431.01 million in Fiscal 2025 to Rs. 532.83 million in Fiscal 2026, primarily on account of increase in depreciation of tangible assets from Rs. 423.34 million in Fiscal 2025 to Rs. 527.54 million in Fiscal 2026, as a result of capitalization of new greenfield projects for our injectables and fermentation business.
Other expenses
Our other expenses increased by 24.20% from Rs. 1,300.28 million in Fiscal 2025 to Rs. 1,614.89 million in Fiscal 2026, primarily due to increases in (i) consumption of stores and spares - others from Rs. 170.21 million in Fiscal 2025 to Rs. 211.51 million in Fiscal 2026; (ii) power and fuel expenses from Rs. 296.28 million in Fiscal 2025 to Rs. 417.47 million in Fiscal 2026; (iii) legal and professional from Rs. 97.84 million in Fiscal 2025 to Rs. 141.59 million in Fiscal 2026; and (iv) repairs and maintenance - plant and machinery from Rs. 117.40 million in Fiscal 2025 to Rs. 176.77 million in Fiscal 2026.
Profit before tax and share of profit/(loss) of the joint venture, exceptional items
Profit before tax and share of profit/(loss) of the joint venture, exceptional items was Rs. 1,471.30 million in Fiscal 2025 compared to Rs. 1,623.56 million in Fiscal 2026.
Share of profit / (loss) of Joint venture
Share of Loss of Joint venture was nil in Fiscal 2026 compared to Rs. 1.55 million in Fiscal 2025, due to conversion of our joint venture into our subsidiary.
Exceptional items - Impact of New wages code on Gratuity & Leave encashment
On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour and Employment published Central Rules and FAQs to enable assessment of the financial impact due to changes in regulations. We have considered restructured compensation of its employees with effect from April 1, 2026, and assessed the impact of the changes, consistent with the Labour Codes, draft rules, FAQs and legal opinion. Considering the materiality and regulatory driven, non-recurring nature of this impact, we have presented such incremental impact as "Impact of New wages code on Gratuity & Leave encashment" under "Exceptional Items" amounting Rs. 89.93 million and related deferred tax - exceptional item of Rs. 21.07 million for the year ended March 31, 2026.
Profit before tax for the year
Profit before tax for the year was Rs. 1,533.63 million in Fiscal 2026 compared to Rs. 1,469.75 million in Fiscal 2025.
Total Income Tax Expense
We recorded current tax of Rs. 593.75 million in Fiscal 2026 as compared to current tax of Rs. 473.85 million in Fiscal 2025. We recorded adjustment of tax relating to earlier periods Charge/ (Credit) of Rs. 1.96 million in Fiscal 2026 compared to Rs. 5.99 million in Fiscal 2025. We recorded a deferred tax of Rs. (140.04) million for Fiscal 2026 as compared to a deferred tax of Rs. 22.06 million for Fiscal 2025. We recorded deferred Tax - Exceptional of Rs. (21.07) million for Fiscal 2026 compared to nil for Fiscal 2025. As a result, total income tax expense decreased by 13.41% from Rs. 501.90 million in Fiscal 2025 to Rs. 434.60 million in Fiscal 2026.
Profit for the year
As a result of the factors above, our profit for the year was Rs. 1,099.03 million in Fiscal 2026 compared to Rs. 967.85 million in Fiscal 2025.
FISCAL 2025 COMPARED TO FISCAL 2024 Total Income
Our total income increased by 4.51% from Rs. 7,233.34 million in Fiscal 2024 to Rs. 7,559.79 million in Fiscal 2025. This increase was due to an increase in revenue from operations, which was partially offset by a decrease in other income.
Revenue from operations
Our revenue from operations increased by 4.93% from Rs. 7,162.47 million in Fiscal 2024 to Rs. 7,515.54 million in Fiscal 2025, primarily on account of increases in sale of products - finished goods from Rs. 6,504.11 million in Fiscal 2024 to Rs. 7,184.39 million in Fiscal 2025. The growth of 10.46% in our API business was partially offset by reduction in sale of services from Rs.442.11 million in Fiscal 2024 to Rs.107.26 million in Fiscal 2025. This decrease in service income was on account of an R&D service milestone received in Fiscal 2024, with no comparable income in Fiscal 2025. The table below sets forth revenues generated from various geographies as per (Ind AS 108) - "Operating Segments" in the corresponding years, as well as their percentage of revenue from operations:
| Particulars | Fiscal 2025 | Fiscal 2024 | ||
| Amount ( Rs. million) | Percentage of revenue from operations (%) | Amount ( Rs. million) | Percentage of revenue from operations (%) | |
| Revenue from external customers - India (A) | 3,367.75 | 44.81% | 2,867.23 | 40.03% |
| Revenue from external customers outside India (B) | 4,147.79 | 55.19% | 4,295.24 | 59.97% |
| - Europe | 2,271.07 | 30.22% | 2,124.20 | 29.66% |
| - United States | 302.02 | 4.02% | 642.60 | 8.97% |
| - Rest of the world* | 1,574.71 | 20.95% | 1,528.44 | 21.34% |
| Revenue from operations (A+B) | 7,515.54 | 100.00% | 7,162.47 | 100.00% |
*Rest of the world includes Asia (other than India) and Africa.
Our other operating revenue increased in Fiscal 2025 compared to Fiscal 2024 on account of increase in scrap and other sales from Rs. 48.65 million in Fiscal 2024 to Rs. 64.53 million in Fiscal 2025, and Performance Linked Incentive (PLI) from Rs. 92.40 million in Fiscal 2024 to Rs. 100.00 million in Fiscal 2025.
Other income
Our other income decreased by 37.57% from Rs. 70.87 million in Fiscal 2024 to Rs. 44.25 million in Fiscal 2025, primarily due to foreign exchange gain on sale of investment in subsidiary of Rs. 57.23 million in Fiscal 2024. This was partially offset by an increase in (i) Miscellaneous income from Rs. 10.30 million in Fiscal 2024 to Rs. 13.57 million in Fiscal 2025, and (ii) sundry balances written back of Rs. 12.69 million in Fiscal 2025 compared to nil in Fiscal 2024 due to an old customer advance that was written off in Fiscal 2025.
Total Expenses
Our total expenses increased by 3.02% from Rs. 5,909.85 million in Fiscal 2024 to Rs. 6,088.49 million in Fiscal 2025, mainly due to the following factors:
Cost of raw materials, packing material and consumables consumed
Our cost of raw materials, packing material and consumables consumed decreased by 8.68% from Rs. 3,126.30 million in Fiscal 2024 to Rs. 2,854.88 million in Fiscal 2025, primarily on account of an improved product mix and lower raw material cost.
Employee benefit expenses
Our employee benefit expenses increased by 17.49% from Rs. 1,040.78 million in Fiscal 2024 to Rs. 1,222.82 million in Fiscal 2025, primarily due to increases in (i) salaries, wages and bonus from Rs. 911.49 million in Fiscal 2024 to Rs. 1,028.21 million in Fiscal 2025, (ii) expense on employee stock option scheme of Rs. 42.93 million in Fiscal 2025 from nil in Fiscal 2024, (iii) contractual workers- wages from Rs. 46.27 million in Fiscal 2024 to Rs. 56.59 million in Fiscal 2025. The increase in employee benefit expenses were primarily on account of increase in the number of employees from 1,827 as of March 31, 2024 to 2,054 as of March 31, 2025 and annual increments given to employees.
Finance costs
Our finance costs increased from Rs. 72.36 million in Fiscal 2024 to Rs. 160.36 million in Fiscal 2025, primarily due to increases in interest on borrowings (at amortized cost) on cash credit accounts/WCDL/buyers credit from Rs. 52.85 million in Fiscal 2024 to Rs. 116.60 million in Fiscal 2025. This was on account of increase in our total borrowings from Rs. 2,472.07 million as of March 31, 2024 to Rs. 5,409.23 million as of March 31, 2025. The increase in borrowings is primarily driven by higher working capital needs and capital expenditure projects.
Depreciation and amortization expense
Our depreciation and amortization expense increased by 11.02% from Rs. 388.22 million in Fiscal 2024 to Rs. 431.01 million in Fiscal 2025, primarily on account of depreciation of tangible assets as a result of capitalization of projects during the end of Fiscal year 2024.
Other expenses
Our other expenses increased by 8.50% from Rs. 1,198.41 million in Fiscal 2024 to Rs. 1,300.28 million in Fiscal 2025, primarily due to increases in (i) consumption of stores and spares - R & D from Rs. 37.88 million in Fiscal 2024 to Rs. 75.27 million in Fiscal 2025; (ii) consumption of stores and spares - others from Rs. 151.71 million in Fiscal 2024 to Rs. 170.21 million in Fiscal 2025; (iii) repairs and maintenance - plant and machinery from Rs. 108.29 million in Fiscal 2024 to Rs. 117.40 million in Fiscal 2025; and (iv) commission on sales from Rs. 54.50 million in Fiscal 2024 to Rs. 64.48 million in Fiscal 2025. This was partially offset by power and fuel expenses decreasing from Rs. 311.68 million in Fiscal 2024 to Rs. 296.28 million in Fiscal 2025 owing to a reduction in power rates.
Profit before tax and share of profit/(loss) of the joint venture, exceptional items
Profit before tax and share of profit/(loss) of joint venture, exceptional items was Rs. 1,323.49 million in Fiscal 2024 as compared to Rs. 1,471.30 million in Fiscal 2025.
Share of profit / (loss) of Joint venture
Share of loss of Joint venture was Rs. 13.66 million in Fiscal 2024 as compared to Rs. 1.55 million in Fiscal 2025, due to the conversion of the joint venture Xenamed Corporation, USA to a wholly owned Subsidiary.
Profit before tax for the year
Profit before tax for the year was Rs. 1,469.75 million in Fiscal 2025 compared to Rs. 1,309.83 million in Fiscal 2024.
Total Income Tax Expense
We recorded current tax of Rs. 311.26 million in Fiscal 2024 as compared to a current tax of Rs. 473.85 million in Fiscal 2025. We recorded adjustment of tax relating to earlier periods Charge/(Credit) of Rs. (2.07) million in Fiscal 2024 compared to Rs. 5.99 million in Fiscal 2025. We recorded deferred tax of Rs. 0.09 million for Fiscal 2024 as compared to a deferred tax of Rs. 22.06 million for Fiscal 2025. As a result, total income tax expense increased by 62.28% from Rs. 309.28 million in Fiscal 2024 to Rs. 501.90 million in Fiscal 2025.
Profit for the year
As a result of the factors above, our profit for the year was Rs. 967.85 million in Fiscal 2025 as compared to Rs. 1,000.55 million in Fiscal 2024.
LIQUIDITY AND CAPITAL RESOURCES
For Fiscals 2026, 2025 and 2024, we met our funding requirements through internal accruals and partially through bank borrowings. For further information, see Indebtedness" on page 397.
CASH FLOWS
The following table sets forth certain information relating to our cash flows for the years indicated:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| ( Rs. million) | |||
| Net cash flow generated from operating activities (A) | 1,745.93 | 472.56 | 1,875.02 |
| Net cash flow used in investing activities (B) | (2,269.30) | (3,065.24) | (2,064.06) |
| Net cash flow generated from financing activities (C) | 359.87 | 2,781.63 | 218.48 |
| Net increase/(decrease) in cash and cash equivalents (A + B + C) | (163.50) | 188.95 | 29.44 |
| Cash and cash equivalents at the end of the year | 100.40 | 263.90 | 74.95 |
Operating Activities
Fiscal 2026
Net cash flow generated from operating activities was t 1,745.93 million in Fiscal 2026. Profit before tax was t 1,533.63 million in Fiscal 2026 and adjustments primarily consisted of: (i) depreciation and amortisation of t 532.83 million; (ii) interest income of t (3.39) million; (iii) loss/(gain) on disposal of property, plant and equipment of t (1.19) million; (iv) finance cost of t 253.27 million; (v) net foreign exchange differences (unrealised) of t 21.89 million; (vi) share based payment expense of t 97.46 million; and (vii) Trade payable written back of t (2.88) million.
Operating profit before working capital changes was t 2,387.76 million in Fiscal 2026. The main working capital adjustments in Fiscal 2026 included (i) increase in trade and other receivables and prepayments of t (593.67) million; (ii) decrease in inventories of t 245.71 million; (iii) increase in trade payables and other payables of t 215.43 million; and
(iv) increase in provisions of t 107.81 million.
Accordingly, cash generated from operations in Fiscal 2026 amounted to t 2,363.04 million. Direct taxes paid amounted to t (617.11) million.
Fiscal 2025
Net cash flow generated from operating activities was t 472.56 million in Fiscal 2025. Profit before tax was t 1,469.75 million in Fiscal 2025 and adjustments primarily consisted of: (i) depreciation and amortisation of t 431.01 million; (ii) interest income of t (7.48) million; (iii) share of loss of a joint venture of t 1.55 million; (iv) loss/(gain) on disposal of property, plant and equipment of t 2.73 million; (v) finance cost of t 160.39 million; (vi) net foreign exchange differences (unrealised) of t (9.49) million; (vii) loss on conversion of joint venture to subsidiary of t 10.10 million; (viii) share based payment expense of t 42.93 million; (ix) interest income from financial assets measured at amortised cost of t (0.07) million; and (x) Trade payable written back of t (12.69) million.
Operating profit before working capital changes was t 2,088.73 million in Fiscal 2025. The main working capital adjustments in Fiscal 2025 included (i) increase in trade and other receivables and prepayments of t (719.78) million; (ii) decrease in inventories of t 743.35 million; (iii) decrease in trade payables and other payables of t 1,314.83 million; and (iv) increase in provisions of t 23.36 million.
Accordingly, cash generated from operations in Fiscal 2025 amounted to t 820.83 million. Direct taxes paid amounted to t (348.27) million.
Fiscal 2024
Net cash flow generated from operating activities was t 1,875.02 million in Fiscal 2024. Profit before tax was t 1,309.83 million in Fiscal 2024 and adjustments primarily consisted of: (i) depreciation and amortisation of t 388.22 million; (ii) interest income of t (3.27) million; (iii) share of loss of a joint venture of t 13.66 million; (iv) Loss/(gain) on disposal of property, plant and equipment of t (0.07) million; (v) finance cost of t 72.36 million; (vi) net foreign exchange differences (unrealised) of t (59.61) million; and (vii) interest income from financial assets measured at amortised cost of t (0.07) million.
Operating profit before working capital changes was t 1,721.05 million in Fiscal 2024. The main working capital adjustments in Fiscal 2024 included (i) increase in trade and other receivables and prepayments of t 301.20 million; (ii) increase in inventories of t 920.13 million; (iii) increase in trade payables and other payables of t 1,699.21 million; and (iv) increase in provisions of t 18.80 million.
Accordingly, cash generated from operations in Fiscal 2024 amounted to t 2,217.73 million. Direct taxes paid amounted to t (342.71) million.
Investing activities
Fiscal 2026
Net cash flow used in investing activities was t 2,269.30 million in Fiscal 2026. This primarily reflected the (i) purchase of property, plant and equipment including capital work in progress and capital advances of t (2,257.19) million; (ii) proceeds from sale of property, plant and equipment of t 13.20 million; (iii) fixed deposit/margin money matured of t 1.60 million; (iv) purchase of non-current investments of t (30.35) million; and (v) interest received of t 3.44 million.
Fiscal 2025
Net cash flow used in investing activities was t 3,065.24 million in Fiscal 2025. This primarily reflected the (i) purchase of property, plant and equipment including capital work in progress and capital advances of t (3,081.21) million; (ii) fixed deposit/margin money placed of t (7.07) million; (iii) fixed deposit/margin money matured of t 30.05 million; (iv) purchase of non-current investments of t (14.50) million; and (v) interest received of t 7.49 million.
Fiscal 2024
Net cash flow used in investing activities was t 2,064.06 million in Fiscal 2025. This primarily reflected the (i) purchase of property, plant and equipment including capital work in progress and capital advances of t (2,097.71) million; (ii) proceeds from sale of property, plant and equipment of t 0.44 million; (iii) fixed deposit/margin money placed of t (27.32) million; (iv) Foreign exchange gain (FEF) of t 57.23 million; and (v) interest received of t 3.30 million.
Financing activities
Fiscal 2026
Net cash flow generated from financing activities was t 359.87 million in Fiscal 2026, which primarily comprised (i) proceeds from rights issue of shares of t 1,931.86 million, (ii) proceeds from exercise of options of t 250.07 million, (iii) proceeds of short-term borrowings (net) of t 572.07 million, and (iv) proceeds of long-term borrowings of t 253.21 million. This was partially offset by (i) repayments of long-term borrowings of t (2,374.25) million; (ii) repayment of lease liabilities principal portion of t (9.10) million; (iii) interest paid on lease liability of t (3.68) million, and (iv) finance cost (excluding interest on lease liability) paid of t (260.31) million.
Fiscal 2025
Net cash flow generated from financing activities was t 2,781.63 million in Fiscal 2025, which primarily comprised proceeds of short-term borrowings (net) of t 1,783.62 million; and proceeds of long-term borrowings of t 1,305.70 million. This was partially offset by (i) repayments of long-term borrowings of t (149.64) million; (ii) repayment of lease liabilities principal portion of t (2.43) million; (iii) interest paid on lease liability of t (3.55) million and (iv) finance cost (excluding interest on lease liability) paid of t (152.07) million.
Fiscal 2024
Net cash flow generated from financing activities was t 218.48 million in Fiscal 2024, which primarily comprised (i) repayments of short-term borrowings (net) of t (549.79) million; (ii) repayments of long-term borrowings of t (2.90) million; (iii) proceeds of long-term borrowings of Rs. 845.98 million; (iv) repayment of lease liabilities principal portion of Rs. (1.58) million; (v) interest paid on lease liability of Rs. (2.86) million; and (vi) finance cost (excluding interest on lease liability) paid of Rs. (70.37) million.
INDEBTEDNESS
As of March 31, 2026, we had total borrowings amounting to Rs. 3,879.14 million. For further details related to our indebtedness, see "Financial Indebtedness" on page 402.
The following table sets forth certain information relating to our outstanding indebtedness as of March 31, 2026, and our repayment obligations in the periods indicated:
| Particulars | As of March 31, 2026 ( Rs. million) | |||
| Payment due by period | ||||
| Total | Not later than 1 year | 1-5 years | More than 5 years | |
| Long term borrowings (non current) | 684.13 | - |
684.13 | - |
| Short term borrowings | 3,195.01 | 3,195.01 | - | - |
| Total borrowings | 3,879.14 | 3,195.01 | 684.13 | - |
CONTRACTUAL OBLIGATIONS
The table below summarises the maturity profile of our financial liabilities based on contractually agreed undiscounted payments as of March 31, 2026:
| As at March 31, 2026 | ||||
| Particulars | ( Rs. million) | |||
| Less than 1 Year | 1-5 Years | More than 5 Years | Total | |
| Long term borrowings (non current) | - | 684.13 | - | 684.13 |
| Interest obligation on long term borrowings (Including Interest on Current Maturities of long term borrowings) | 54.14 | 105.85 | 0.57 | 160.56 |
| Short term borrowings | 3,195.01 | - |
- |
3,195.01 |
| Lease liabilities | 9.72 | 12.72 | 96.60 | 119.04 |
| Trade payables | 1,383.28 | - | - | 1,383.28 |
| Other financial liabilities | 344.43 | - | - | 344.43 |
| Total | 4,986.57 | 802.70 | 97.17 | 5,886.44 |
CONTINGENT LIABILITIES AND COMMITMENTS
As of March 31, 2026, we did not have any contingent liabilities as per Ind AS - 37.
OFF-BALANCE SHEET ARRANGEMENTS
We did not have any off-balance sheet arrangements as of March 31, 2026.
CAPITAL EXPENDITURE
The following table sets forth capital expenditure on property, plant and equipment for the years indicated:
| Particulars | Fiscal 2026 | Fiscal 2025 | Fiscal 2024 |
| ( Rs. million) | |||
| Capital expenditure | 2,373.05 | 3,928.96 | 1,766.64 |
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business, including the payments of remuneration and satisfying trade payables.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our principal financial liabilities comprise borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance our operations. Our principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
We are exposed to market risk, credit risk and liquidity risk. Our senior management oversees the management of these risks. Our senior management provides assurance that our financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with our policies and risk objectives. All derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience and supervision. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks - interest rate risk, currency risk and other price risk such as commodity risk. Financial instruments affected by market risks includes borrowings, deposits and other financial assets. We are not exposed to other price risk whereas the exposure to currency risk and interest risk is given below.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relates primarily to our debt obligations with floating interest rates.
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates and arises when transactions are done in foreign currencies. Our exposure to the risk of changes in foreign exchange rates relates primarily to our receivables and payables.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR exchange rates, with all other variables held constant. The impact on our profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. Our exposure to material foreign currency changes for all other currencies is not material.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.
Trade receivables
Customer credit is managed by us subject to the established policy procedures and control related to customer credit risk management. Credit quality of a customer is assessed every year and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and if outstanding is above due date the further shipments are controlled and can only be released if there is a proper justification.
We evaluate the concentration of risk with respect to trade receivables as low, as its customers credit worthiness are monitored at periodical intervals. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
Liquidity risk
Liquidity risk management
Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due. Liquidity risks arise because of the possibility that we could be required to pay its liabilities earlier than expected or encounter difficulty in raising funds to meet commitments associated with financial liabilities as they fall due. Our approach to managing liquidity is to ensure, as far as possible, that we will always have sufficient liquidity to meet our liabilities when due. We manage liquidity risk by maintaining sufficient cash and bank balance and availability of funding through adequate amount of committed credit facilities.
AUDITOR QUALIFICATIONS, RESERVATIONS, ADVERSE REMARKS
Our Statutory Auditors examination report discloses certain modifications included in their reports on the consolidated financial statements as at and for the years ended March 31, 2026, March 31, 2025 and March 31, 2024:
The auditors report on the consolidated financial statements of our Company and our Subsidiaries as at and for the year ended March 31, 2026 included the following qualifications:
a) In annexure to their auditors report under the Companies (Auditors Report) Order (CARO): The title deeds of 1 immovable property (leasehold land) with carrying value of Rs. 375.24 million for Fiscal 2026 are not held in the name of the Company for which registration of title deed is pending.
b) In their auditors report under the head legal and regulatory requirements -The audit trail feature was not fully enabled for specific changes executed through privileged or administrative access rights from April 1, 2026 to March 26, 2026.
The auditors report on the consolidated financial statements of our Company and our Subsidiaries as at and for the year ended March 31, 2025 included the following qualifications:
c) In annexure to their auditors report under the Companies (Auditors Report) Order (CARO): The title deeds of 1 immovable property (leasehold land) with carrying value of Rs. 375.24 million for Fiscal 2025 are not held in the name of the Company for which registration of title deed is pending.
d) In their auditors report under the head legal and regulatory requirements -The audit trail feature was not fully enabled for specific changes executed through privileged or administrative access rights. Further, some audit trail features were not consistently available during the year as the system parameter for logging table level changes remained inactive until April 26, 2024.
The auditors report on the consolidated financial statements of the Group as at and for the year ended March 31, 2024 included the following qualifications:
a) In annexure to their auditors report under the Companies (Auditors Report) Order (CARO): The title deeds of 1 immovable property (leasehold land) with carrying value of Rs. 375.24 million for Fiscal 2024 are not held in the name of the Company for which registration of title deed is pending.
b) In the auditors report under the section audit report on legal and regulatory requirements: the audit trail feature was not fully enabled for certain changes executed through privileged or administrative access rights.
We cannot assure you that our future financial statements will not contain similar or other qualifications, modifications, reservations or adverse remarks.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
There have been no events or transactions to our knowledge that have in the past or may in the future affect our business operations or financial performance which may be described as "unusual" or "infrequent".
KNOWN TRENDS OR UNCERTAINTIES
Other than as described in "Risk Factors" and this "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 28 and 371, respectively, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our revenue or income from continuing operations.
FUTURE RELATIONSHIPS BETWEEN EXPENDITURE AND INCOME
Other than as described in "Risk Factors" on page 28 and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on page 371, to our knowledge there are no known factors which we expect will have a material adverse impact on our operations or finances.
NEW PRODUCTS OR BUSINESS SEGMENTS
Except as described in this Red Herring Prospectus, we have not publicly announced any new products or business segments nor have there been any material increases in our revenues due to increased disbursements and the introduction of new products.
SIGNIFICANT DEPENDENCE ON A SINGLE OR FEW CUSTOMERS OR SUPPLIERS
See "Risk Factors - We derive a substantial portion of our revenue from certain key customers. Revenue generated from our top ten customers accounted for 57.59%, 55.90% and 61.65% of our revenue from sale ofproduct in Fiscals 2026, 2025 and 2024, respectively. Loss of our relationship with any of these customers or delays or reductions in their orders could have an adverse effect on our business, results of operations, financial condition and cash flows" and "Risk Factors - We depend on certain suppliers for raw materials for our operations. Purchases from our top ten suppliers accounted for 25.50%, 18.41% and 50.33% of our total expenses in Fiscals 2026, 2025 and 2024, respectively. Any loss of such suppliers or non-performance of their obligations could adversely affect our business, results of operations, financial condition and cash flows" on pages 33 and 34, respectively.
COMPETITIVE CONDITIONS
We face competition, both domestically and internationally. Our competition varies by market, therapeutic area and product category. (Source: F&S Report). For further details, please refer to "Risk Factors", "Industry Overview", and "Our Business" on pages 28, 169 and 218, respectively.
SEASONALITY OF BUSINESS
Our business is not seasonal in nature.
SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2026
No circumstances have arisen since March 31, 2026 which materially and adversely affect or are likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
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