Torrent Pharmaceuticals Ltd Management Discussions

Caveat

Shareholders are cautioned that certain data and information external to the Company is included in this section. Though the data and information are based on sources believed to be reliable, no representation is made on their accuracy or comprehensiveness. Further, though utmost care has been taken to ensure that the opinions expressed by the management herein contain their perceptions on most of the important trends having a material impact on the Companys operations, no representation is made that the following presents an exhaustive coverage on and of all issues related to the same. The opinions expressed by the management may contain certain forward-looking statements in the current scenario, which is extremely dynamic and increasingly fraught with risks and uncertainties. Actual results, performances, achievements or sequence of events may be materially different from the views expressed herein. Shareholders are hence cautioned not to place undue reliance on these statements and are advised to conduct their own investigation and analysis of the information contained or referred to in this section before taking any action with regard to their own specific objectives. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinions expressed here are subject to change without notice. The Company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this section, consequent to new information, future events, or otherwise.

Note

Except stated otherwise, all figures, percentages, analysis, views and opinions are on consolidated financial statements of Torrent Pharmaceuticals Limited and its wholly owned subsidiaries (jointly referred to as Torrent or Company, hereinafter). Financial information presented in various sections of the Management Discussion and Analysis are classified under suitable heads, which may be different from the classification reported under the Consolidated Financial Statements. Some additional financial information is also included in this section, which may not be readily available from the Consolidated Financial Statements. Previous years figures have been regrouped, wherever necessary, to make it comparable with the current year.

Global Economy:

The IMFs January 2025 World Economic Outlook reports that global growth is expected to remain steady but subdued at 3.3% in both 2025 and 2026, below the 2000-2019 historical average of 3.7%. The forecast for 2025 is broadly unchanged from October 2024, with stronger growth in the United States offsetting weaker projections for other major economies. Global headline inflation is anticipated to decline to 4.2% in 2025 and 3.5% in 2026, with advanced economies expected to reach their inflation targets earlier than emerging markets.

The global economic outlook is shaped by diverging national trends and significant uncertainty. While the U.S. economy remains resilient, expanding by 2.7% in late 2024 due to strong consumer spending and favourable financial conditions, other advanced economies like the Euro area and Japan have struggled with weak manufacturing and temporary disruptions. Chinas growth slowed to 4.7% amid sluggish consumer demand and a slow property sector recovery, while Indias growth decelerated due to declining industrial activity.

Disinflation continues globally, although unevenly. While core goods inflation has stabilised, services inflation in the U.S. and Europe particularly remains elevated. Central banks are responding differently, with some continuing to tighten policy amid persistent inflation and others easing as pressures subside. Financial conditions remain generally accommodative, though tighter in emerging markets due to a strong U.S. dollar and geopolitical uncertainties.

Trade policy uncertainty, political instability in parts of Asia and Europe, and ongoing geopolitical tensions (especially in the Middle East and Ukraine) weigh on global sentiment. Oil prices are projected to fall due to weak Chinese demand and robust non-OPEC and supply, while gas prices may rise due to weather-related disruptions.

Risks to the global outlook are tilted to the downside over the medium term, though the near term presents a mixed picture. While U.S. growth could exceed expectations due to deregulation and expansionary fiscal policy, other regions face risks from inflation stickiness, weak investment and potential tariff escalations. These divergent conditions may lead to broader policy and monetary divergences, heightening volatility in capital flows and exchange rates.

Policy priorities include keeping inflation under check, maintaining fiscal discipline, and implementing structural reforms to boost long-term growth. The IMF emphasises the need for multilateral cooperation, particularly in trade, to reduce fragmentation and build resilience within the global economy.

Indian Economy:

Overall, the outlook for the Indian economy remains positive. The Reserve Bank of India has projected Indias real GDP growth for FY 2025-26 at 6.5%, with macroeconomic fundamentals stable and risks broadly balanced.

A recovery in agricultural output following favourable monsoon projections, sustained momentum in services, and a revival in manufacturing activity are expected to support economic activity in FY 2025-26. Government capex continues to play a pivotal role in stimulating demand, with increased capital outlay being accommodated within the existing fiscal space through reprioritisation rather than an expansion in overall expenditure. The governments focus on inclusive growth targeting key segments such as women, youth, farmers, and the poor has been maintained alongside its fiscal consolidation efforts, with the Fiscal Deficit estimated to decline to 4.4% of GDP for FY 2025-26.

The global economic environment remained subdued during FY 2024-25, particularly affecting Indias major trade partners, leading to weaker demand for merchandise exports. At the same time, falling international commodity prices brought down import values, resulting in a narrower merchandise trade deficit. This trend, coupled with robust remittance inflows, helped contain the Current Account Deficit at 1.5% of GDP, indicating external sector stability.

On the demand side, household consumption is projected to gain momentum, aided by improving rural incomes, moderation in inflation, and enhanced consumer confidence. Prospects for fixed investment remain encouraging, supported by rising private sector capex, stronger corporate balance sheets, and continued public sector investment. The rebound in global trade and greater participation in global value chains are also expected to boost external demand, adding to the growth momentum. Inflationary pressures, particularly food inflation, showed signs of easing toward the end of FY 2024–25. The Reserve Bank of India, in its April 2025 monetary policy statement, projected headline inflation to remain around 4.0% for 2025-26, with quarterly estimates ranging from 3.6% in Q1 to 4.4% in Q4. This revision was driven by declining core inflation, record wheat and pulse output, and stabilisation in food prices. The policy repo rate was reduced by 25 basis points to 6.0%, marking a shift towards a more accommodative stance to support growth amid global volatility. Additionally, the Cash Reserve Ratio remains at 4%, continuing to ensure liquidity support in the system.

However, several headwinds warrant attention. Geopolitical tensions, including volatility in the Middle East and supply chain disruptions, remain a risk to trade flows and energy prices. Persistent inflation in developed markets, fluctuation in global financial markets, and the potential for further geo-economic fragmentation could introduce external shocks. Nevertheless, Indias robust macroeconomic framework, improved financial sector resilience, and policy space for counter-cyclical measures provide confidence in the economys ability to navigate these uncertainties.

Global Pharma Market

In 2025, global health systems continue to demonstrate remarkable resilience, having adapted significantly in the aftermath of the COVID-19 pandemic, surging inflation and ongoing regional conflicts. The adoption of novel therapies and an overall increase in medicine usage reflect a maturing response to healthcare challenges. Importantly, global use and spending on medicines have now surpassed pre-pandemic growth trajectories and are expected to grow well above those historical trends through 2028. At list price levels, the global pharmaceutical market is projected to grow at a compound annual growth rate (CAGR) of 5-8% through 2028, reaching a total estimated market size of $2.3 trillion. This growth will be uneven across regions, with more established markets particularly the U.S., Europe, and parts of Asia expanding more rapidly. These markets are benefitting from the introduction of new branded therapies and the continued use of high-cost treatments. In contrast, Pharmerging markets (emerging pharmaceutical markets) are expected to grow at a gradual pace, with volume growth driving most of the gains instead of increased uptake of expensive therapies.

A significant portion of future global medicine spending will be driven by existing branded products, which are expected to contribute the largest share of growth, nearly doubling compared to the previous five-year period. New product launches in the top 10 developed markets are forecasted to contribute $193 billion in growth, representing a $40 billion increase over the previous period. However, loss of exclusivity (LOE) for blockbuster drugs, especially biologics will also play a defining role. The impact of LOE is projected to more than double to $192 billion, with biosimilars contributing increasingly to this shift. For generic and biosimilar manufacturers, the next five years represent a critical window to capitalise on a wave of upcoming patent expiries, especially after a relatively quiet LOE period in recent years.

Regional Outlook

• United States: On a net price basis, U.S. pharmaceutical spending is projected to grow at a 2-6% CAGR over the next five years, a slowdown from 5.3% CAGR in the past five years. This deceleration reflects anticipated price negotiations and other cost-containment measures introduced by the Inflation Reduction Act.

• Europe: Spending is expected to increase by $70 billion through 2028, driven by the steady launch of innovative branded therapies. However, this growth will be partially offset by increasing penetration of generics and biosimilars, especially in markets with strong cost-control policies.

• Japan: Growth in Japan is expected to remain subdued, with spending ranging from -1% to 2% CAGR through 2028. While new brand uptake continues, ongoing annual price cuts and a continued shift to generics will counterbalance gains.

• China: Pharmaceutical spending in China is forecast to slow further, as positive momentum from new original therapies is offset by ongoing pressures on off-patent and generic pricing, particularly under centralised procurement policies.

• Latin America: After high pandemic-era usage, growth dipped in 2024 but is expected to rebound with a 7-10% CAGR through 2028. This resurgence will be led by Brazil, Mexico, Argentina, and Colombia, driven by strong demand for generic medicine and growing access.

Key Drivers

Looking ahead, the trajectory of the pharmaceutical sector will be shaped by:

1. New product launches, particularly in oncology, immunology, and rare diseases.

2. A sharp increase in patent expiries, notably among biologics, accelerating biosimilar adoption.

3. Differentiated regional policy landscapes, particularly around pricing reforms and reimbursement mechanisms.

The global outlook remains robust as the sector balances innovation with affordability, laying emphasis on high-value branded therapies and cost-effective generics and biosimilars in a complex and evolving post-pandemic healthcare environment. The largest driver of medicine spending growth over the next four years is expected to be the availability and use of innovative therapeutics in developed markets and offset by loss of exclusivity and lower cost of generics and biosimilars.

Global Trends in Medicine Use – 2025 Outlook

Global medicine use has expanded significantly over the past five years, with patient usage rising by 14%, largely driven by increased access to therapies across regions and the continuous launch of innovative treatments. This trend is projected to persist, with global medicine consumption expected to grow by an additional 12%, equivalent to 400 billion defined daily doses (DDDs) by 2028.

This growth reflects an evolving landscape shaped by scientific advances, broader health system outreach, and increased therapeutic focus on chronic and complex diseases.

Key Areas of Global Medicine Spending

• Biotech medicines are expected to account for 39% of total global spending by 2028. This segment includes both emerging modalities such as cell and gene therapies, and a maturing biosimilar market that is helping to expand access to high-cost biologics. Key drivers of biotech spending include innovations in oncology, immunology, diabetes, and obesity, alongside a growing pipeline in neurology.

• Specialty medicines, typically complex or high-cost treatments for chronic, rare or severe conditions, is expected to represent 43% of global spending by 2028, with the bulk of this expenditure concentrated in developed markets. These therapies increasingly shape treatment paradigms in oncology, immunology, and rare diseases.

• Therapeutic areas with the highest forecast spending by 2028 include: o Oncology: Expected to grow at a 14-17% CAGR through 2028, driven by the continued launch of novel targeted and immuno-oncology therapies. o Immunology: Projected to grow at a more moderate 2-5% CAGR, as biosimilar adoption begins to moderate spending growth despite new launches. o Diabetes: Anticipated to reach $184 billion by 2028, making it the third largest therapy area globally, with 3-6% CAGR, supported by both traditional therapies and newer GLP-1-based treatments. o Cardiovascular and Neurology: These areas are expected to show steady growth, bolstered by innovation in heart failure, stroke prevention, and emerging treatments for migraine, depression, and rare neurological conditions.

• Obesity treatment has emerged as a major focus area. Global spending reached $24 billion in 2023, a dramatic rise from $3.2 billion in 2020, primarily due to the widespread uptake of GLP-1 receptor agonists. Originally developed for diabetes management, these agents have demonstrated strong weight-loss efficacy and are being rapidly adopted as non-surgical obesity treatments. Their clinical success has catalysed a surge in obesity-focused trials, signalling robust future investment in metabolic health.

Therapeutic Area Spotlight: Growth Drivers

Immunology, endocrinology and oncology continue to maintain strong growth momentum. Each of these sectors has outpaced the global 14% average DDD growth in the past five years, underpinned by increased treatment accessibility, novel product introductions and broader patient eligibility.

• In immunology, the proliferation of biologics and biosimilars in high-income markets has intensified therapeutic competition, improved affordability and expanding access. These dynamics are expected to sustain momentum even as pricing pressures mount.

• In oncology, developed markets are rapidly incorporating precision therapies and immuno-oncology agents, while low-and middle-income countries are making strides in expanding access to traditional chemotherapies, contributing to a balanced global growth pattern.

• Endocrinology is undergoing a major transformation, led by the exponential rise in GLP-1-based therapies used in diabetes and increasingly in obesity. These therapies have seen widespread adoption in the U.S. and other developed countries due to their dual benefit in metabolic control and weight reduction. As clinical evidence mounts and new indications are approved, this class is expected to dominate future growth in the endocrine segment.

The next phase of global medicine use will be defined by:

• Increased patient-centric innovation through targeted, high-value therapies,

• Expanded access in emerging markets via biosimilars and generics,

• Stronger therapeutic engagement across chronic and complex disease categories.

Coupled with supportive health policy, continued investment in R&D, and responsive pricing strategies, the pharmaceutical sector is poised to deliver both clinical and commercial impact through 2028.

Emerging trends

Brand Loss of Exclusivity: Opportunities for Generics and Biosimilars

A significant wave of patent expirations is set to reshape the competitive landscape. Over the next five years, the impact of brand loss of exclusivity (LOE) is projected at $192 billion, with biosimilars accounting for $59 billion of this total. This presents a critical opportunity for generic and biosimilar manufacturers to expand their portfolios and market share, especially after a comparatively modest expiry cycle in the last five years. This dynamic continues to incentivise both innovators and challengers, contributing to market diversification and improved affordability.

Pricing Pressures and Value-Based Expectations

The dual forces of rising healthcare demand and constrained public health budgets are intensifying pressure on pharmaceutical pricing globally. Governments, insurers and patients are increasingly advocating for transparency, affordability and value-based pricing models. In the U.S., recent moderation in price erosion has been largely supply-driven, with underlying structural issues remaining unchanged—suggesting that the current reprieve may be temporary. Broader adoption of health technology assessments and outcomes-based contracts are expected to shape future access decisions and reimbursement policies.

The Rise of Specialty Pharmaceuticals

Specialty medicines targeting complex, chronic or rare conditions continue to command a growing share of global pharmaceutical expenditure. By 2028, specialty medicines will account for 43% of global pharma spending, with the majority concentrated in high-income countries. In contrast, pharmerging markets will maintain a relatively modest 13% share, constrained by affordability and infrastructure challenges. The expansion of innovative biologics, gene therapies, and precision medicine is central to this trend.

Oncology: The Epicentre of Therapeutic Innovation

Oncology remains the most active therapeutic area in terms of clinical trials, new product approvals, and investment. It is the largest global category by drug spending, fuelled by advancements in immunotherapies, cell and gene therapies, and biomarker-driven treatments. The global oncology pipeline continues to expand, with many novel agents targeting previously untreatable or rare cancers. This area is also leading the shift toward personalised medicine, where treatment is increasingly tailored to individual patient profiles.

The Growing Burden of Chronic and Lifestyle Diseases

As populations age and lifestyles shift, the global burden of chronic and sub-chronic conditions is rising. This includes growing incidence of:

• Cardiovascular disease

• Diabetes and obesity

• Central nervous system (CNS) disorders such as depression, anxiety, and dementia

Emerging markets like India, Brazil and Southeast Asia are seeing the fastest increases, driven by urbanisation, improved diagnosis, and strengthening of local health systems. This shift has led to growing demand for preventive care, long-term disease management and patient adherence tools.

Pharma 4.0: The Digital Transformation of Manufacturing

Pharma 4.0, an evolution of Industry 4.0, is revolutionising pharmaceutical manufacturing through the integration of cyber-physical systems, AI, IoT and data analytics. Its four pillars - Resources, Information Systems, Organisation & Processes and Culture - enable:

• Real-time data monitoring and predictive maintenance

• Smarter decision-making and reduced human error

• Automation of production lines with enhanced regulatory compliance

The use of augmented reality (AR), virtual reality (VR), and machine learning (ML) enhances training, batch predictability, and operational efficiency. Cloud computing and the Industrial Internet of Things (IIoT) further enable connected operations and self-optimising systems.

Digital Healthcare and Integrated Delivery Models

The integration of digital tools into healthcare delivery has accelerated in the post-pandemic period, improving both access and efficiency:

• Telemedicine, e-prescriptions and remote monitoring are becoming integral to care delivery.

• Health data platforms and electronic health records are enhancing continuity and coordination of care.

• In India, the Ayushman Bharat Digital Mission is creating a unified national digital health ecosystem, supporting universal health coverage through interoperable health records, digital IDs, and e-health infrastructure.

Globally, digital health ecosystems are enabling value-based procurement, predictive analytics and personalised care pathways, fostering better outcomes and cost optimisation.

Regulatory Evolution and Global Harmonisation

Regulatory frameworks are evolving to support innovation while ensuring safety, transparency and faster market access:

• Greater emphasis is being placed on real-world evidence and post-marketing surveillance.

• Harmonisation of regulatory standards, especially across Asia-Pacific and Latin America, is expected to ease the path for cross-border approvals and clinical trials.

The growing use of digital submissions, adaptive trial designs and expedited review pathways is helping speed the delivery of life-saving therapies.

Environmental, Social, and Governance (ESG) Priorities

Pharma companies are increasingly aligning with ESG standards, focusing on:

• Sustainable manufacturing and supply chain practices

• Equity in global medicine access

• Transparent pricing and ethical R&D practices

Investors, regulators and consumers are placing greater scrutiny on corporate responsibility, making ESG integration a critical component of long-term strategy.

The pharmaceutical sector in 2025 is at a pivotal juncture defined by disruptive innovation, digital transformation, evolving global health needs and regulatory modernisation. Companies that effectively leverage scientific breakthroughs, embrace patient-centric models and invest in digital and sustainable practices will lead the next era of growth.

The future of pharma will not only be about curing disease, but about delivering value, ensuring equity, and designing systems that are smarter, faster, and more inclusive.

Growth Drivers

1 Affordability

With increasing healthcare cost, demand for quality generic medicines is expected to rise as it offers affordable option for patients and healthcare providers.

2 Loss of Exclusivity:

The impact from brands losing exclusivity (LOE) is expected to more than double to $192Bn. This provides opportunities for generic manufacturers to introduce bioequivalent cheaper alternatives.

3 Health Insurance and Infrastructure:

Penetration of health insurance (both public and private) is expected to surge with the introduction of government sponsored initiatives and programmes, making healthcare more affordable and will lead to market expansion, particularly in emerging markets.

4 Digital and Advanced Analytics:

Major technological shifts have encouraged a rapid increase in the use of Advanced Analytics (AA) to drive growth and productivity across the pharma value chain.

5 Longer Life Expectancy:

With declining fertility and increased longevity, the relative size of older age groups is increasing.

6 Changing Lifestyle:

In todays world, sedentary lifestyle, changing dietary habits, hectic and stressful life, less sleep and certain environmental factors have resulted in higher incidences of chronic diseases.

7 Improving Purchasing Power:

Rise of per capita income has driven the demand for quality healthcare solutions, more particularly in emerging markets.

8 Regulatory Developments:

The Pharma industry operates in one of the worlds most regulated environments to deliver safe, effective and high-quality medicines. Improvement of regulatory standards across the globe has boosted customer confidence and led to market growth.

Indian Pharma Market

The Indian pharmaceutical industry is the third largest globally by volume, eleventh in terms of medicine spending, and fourteenth by value. India is the worlds leading supplier of generic medicines, recognised for its cost-effective and high-quality pharmaceutical products.

The country hosts the highest number of pharmaceutical manufacturing facilities approved by the U.S. Food and Drug Administration (USFDA). These facilities cater to a diverse range of segments, including generic drugs, over-the-counter (OTC) medications, active pharmaceutical ingredients (APIs), vaccines, contract research and manufacturing services (CRAMS), biosimilars and biologics.

The Indian pharmaceutical market is projected to reach US$ 130 billion by 2030 and US$ 450 billion by 2047. This growth will be driven by a combination of factors including increased affordability and accessibility, a growing burden of lifestyle-related diseases, cost-effective production capabilities, and proactive government policies.

Medicine spending in India is expected to grow at a CAGR of 7-10% through 2028, propelled by an ageing population, expanding healthcare access and a rising prevalence of chronic conditions.

Policy Initiatives and Strategic Direction

To enhance domestic pharmaceutical production and strengthen the healthcare system, the Government of India has introduced several strategic policy measures. These aim to improve affordability, accessibility, and innovation while reducing dependence on imports. Key initiatives include:

• Establishment of Centres of Excellence to promote pharmaceutical research and innovation.

• Regulation of essential drug pricing to ensure affordability.

• Expansion of Jan Aushadhi scheme, targeting approximately 25,000 outlets to provide cost-effective medicines.

• Launch of umbrella schemes for overall industry development.

These efforts build upon earlier programmes such as the Production Linked Incentive (PLI) schemes (PLI I 1.0 and 2.0) and the Bulk Drug Parks initiative. Collectively, these policies aim to position India as a self-reliant, globally competitive pharmaceutical manufacturing hub.

The evolving global geopolitical environment, particularly the ‘China Plus One strategy, presents a significant opportunity for India to emerge as a preferred destination for Contract Development and Manufacturing Organisations (CDMOs).

Future Outlook

The integration of digital technologies in pharmaceutical manufacturing and supply chain operations is expected to further enhance efficiency, traceability, and product quality. Coupled with increasing healthcare awareness and rising disease burden, the industry is well-positioned to meet the growing demand for high-quality, affordable medicines.

Regulatory frameworks are also expected to evolve in alignment with advancements in the industry, emphasising patient safety and sustainable growth.

Regulatory Reforms

In a bid to strengthen ethical standards and enhance transparency, the Department of Pharmaceuticals has introduced the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) 2024. The code has been disseminated to pharmaceutical associations which are responsible for ensuring member compliance. UCPMP 2024 promotes responsible marketing, fosters innovation, builds industry trust, and enforces stricter regulatory adherence, all of which are crucial for long-term industry credibility and growth.

Mergers & Acquisitions

M&A activity in the pharmaceutical industry is poised for a rebound in 2025, driven by portfolio gaps, supply chain challenges and policy shifts. A stronger deal market in the US and Europe, supported by improving macroeconomic conditions and expectations of lighter regulation, is expected to accelerate deal volumes and values. Large pharmaceutical companies face looming patent cliffs and are targeting late-stage biotech firms to fill pipeline gaps and drive innovation. Biotech M&A will focus on mid-sized firms with Phase III assets, particularly in oncology. Divestitures of non-core assets are also gaining momentum, with large companies streamlining their portfolios.

IPO markets are reviving, offering new capital sources, while companies are exploring alternative deal structures, including joint ventures and licensing. M&A hot spots in 2025 include biotech, GLP-1s, consumer healthcare amongst others.

Despite a decline in M&A activity in 2024, falling interest rates and a shift in regulatory tone are creating a more deal-conducive environment. Market players are expected to seize opportunities for transformative growth through strategic acquisitions and partnerships in 2025.

M&A Focus Areas

Opportunities in Growing GLP-1 Drug Market

These breakthrough therapies are defining the future of chronic disease management, particularly diabetes and weight-loss management. It is one of the largest profit pools and therefore, Companies across the value chain are expected to compete to position themselves in this fast-growing market, with a premium to be paid for innovation.

Biotech Acquisitions to Fend Off Patent Cliffs

Mid-stage biotech companies continue to innovate and have become attractive buy-outs for large-cap pharma companies, facing significant loss of exclusivity and gaps in their product pipelines that needs to be filled sooner to achieve growth plans.

CROs, CDMOs with Strong Cash Flow

Contract Research Organisations (CROs) and Contract Development and Manufacturing Organisations (CDMOs) with unique capabilities and operating in specialty niches that can help accelerate time to market, continue to demonstrate strong cash flows will remain attractive sectors for investment.

Artificial Intelligence (AI)

Application of technology and AI has increased in drug discovery and development as it makes discovery, design and development process faster and cheaper. It even leads to identifying new drugs, beyond the reach of traditional methods. This trend is in pharma and biotech companies leveraging M&A to gain early access to emerging opportunities.

Divestment of Non-Core Assets

Large pharmaceutical conglomerates are aiming to divest non-core assets to generate cash and fund new investments which align more closely with their core competencies.

M&A Trends in Indian Pharma

The domestic formulations segment has seen sustained interest from both strategic acquirers and financial sponsors, reflecting a push for market expansion, therapeutic diversification and access to established brands. In the B2B pharma space, particularly within the Active Pharmaceutical Ingredient (API) segment, deal activity remains strong. The API/CDMO segment is benefitting from global demand for supply chain diversification and Indias positioning as a cost-competitive manufacturing hub.

The sector remains relatively fragmented, offering significant opportunities for consolidation. Larger domestic players are increasingly streamlining their operations by focusing on core therapeutic areas and high-growth verticals. As a result, there is a growing trend of divesting non-core brands and business units, a strategy aimed at optimising capital allocation and improving operational focus. This trend is expected to continue through 2025, supported by evolving market dynamics and increased scrutiny on return on investment.

Overall, M&A is serving as a strategic tool for companies to reposition portfolios, gain scale, and unlock long-term value in an increasingly competitive and innovation-driven healthcare environment.

Performance Snapshot:

As a frontrunner in the industry, the Company has established itself as one of the leading players in the Indian pharmaceutical industry with a formidable presence in India as well as international markets. With a strong foundation, the Company remains poised for continued growth and success in an evolving landscape. Internationally, the Companys presence extends across diverse geographies through its subsidiaries, encompassing a broad spectrum of growth markets. Additionally, it maintains a global footprint in many other countries through different business models. The multifaceted approach ensures a robust and expansive reach, allowing the Company to effectively cater to the needs of diverse markets and capitalise on emerging opportunities.

Subsidiaries of the Company

During the year 2024-25, the Company reported revenues of H11,516 crores, growth of 7% compared to H10,728 crores in the previous financial year.

The breakup of revenues under key territories is as under:

Revenue (in crores)	2024-25		2023-24		Growth
	Amount	Share	Amount	Share	%
India	6,393	55%	5,666	53%	13%
USA	1,100	10%	1,078	10%	2%
Germany	1,139	10%	1,074	10%	6%
Brazil	1,100	10%	1,126	10%	-2%
Others	1,784	15%	1,784	17%	0%
Total	11,516	100%	10,728	100%	7%

Core Competencies:

India, Brazil, Germany, US, are the top four markets for the Company. The Companys strategic priorities in India and Brazil and other branded markets continue to focus on strengthening specialties, field force productivity and brand building. These markets remain a key priority for the Company and offer higher visibility and sustainability to the business. The Branded business constitutes around 74% of the overall Company revenues.

India:

The Indian pharmaceutical market (IPM) which is valued over $27 billion, grew at 8%. The market is expected to grow at high single digit over the near term, backed by factors such as increasing healthcare expenses, rising chronic diseases, expanding health insurance coverage, rising income levels and increasing government initiatives that aim to improve healthcare infrastructure and expand access to essential medicines. Initiatives such as the Jan Aushadhi Scheme, which aims to provide affordable generic medicines to the masses, have played a crucial role in improving access to healthcare in rural and underserved areas. Stable pricing environment and patent expiries in the recent past supported the new launch momentum and have made up for the tepid volume growth.

For the year ended 31st March 2025, India continues to be the largest business unit contributing 55% to the overall revenues. The Company is ranked 7th in the IPM and continues to grow faster than the market (IPM 8% vs Torrent 13%). The Company ranks 6th in the combined chronic / sub chronic therapy areas. 21 Brands feature amongst Top 500 brands of the IPM and 18 brands (MBs) have revenues of more than Rs. 100 crores.

7th	6th	6th
Largest Company in IPM	Rank in combined chronic / sub chronic segment	Rank by prescription at specialists
21 brands	18 brands (MBs)	Ranked amongst
Among Top 500 brands in IPM	Above H100 crores	Top 5 across Cardiac, CNS, GI, Cosmo Derma therapy areas

In IPM, Cardiac is the major contributor followed by Anti-Infective, Gastro-intestinal, Anti-diabetic and Vitamin Mineral Nutrients (VMN) segment. The Company has strong presence in Cardiac, Gastro-intestinal, CNS, Vitamin Minerals Nutrients, Anti-diabetic and Dermatology, with these therapies contributing to ~87% of sales.

The Company continues to focus on chronic and sub chronic therapies as its main area of focus and aims to gain market share in key sub-therapies. The Company has maintained its rank in major therapy areas like Cardiac, Anti-Diabetic, CNS, GI, Derma, with one rank improvement in Gynaecology.

The Company forayed into the consumer health segment with Shelcal-500 (a calcium supplement) and has expanded presence with brands such as Ahaglow (face wash gel), Unienzyme (digestive enzymes tablet) and Tedibar (baby bathing bar). Consumer engagement campaigns are ongoing for these brands. There has also been channel expansion in Modern Trade and Quick Commerce. Overall, the consumer health segment has progressed well, aided by channel activations, increased distribution in newer towns and growth in the e-commerce business.

New introductions in key therapies have been a focus area for the Company to drive higher than market growth. The Company has strategically diversified and strengthened its presence in some of the key therapies linked to patent expiries such as Empagliflozin and its Fixed Dose Combinations (FDC) in the anti-diabetic segment. The Company has also launched skin care and hair care brands within derma therapy, improved constipation segment within GI therapy, Elagolix and Lactoferrin + Probiotic formulation in the gynaecology therapy, SGLT2 + Betablocker in the CVD segment, and Nutraceuticals in CNS. The launches have been identified in high potential segments.

In the coming year, the Company will continue to focus on new launches driven by patent expiries and brand extensions, which will help to address the unmet patient needs and complete its therapy basket.

The new introductions have been backed by expansion of the field force (FF) across key therapeutic areas of the Company. This expansion will help the Company to retain its competitive edge in all focus markets, without diluting focus on the existing portfolio. Expansion of field force has been done across key therapeutic areas including Cardiology, Diabetology, CNS & Multi specialty TAs. The current MR strength is ~6400.

Stable market, high chronic led growth, launch of a differentiating portfolio along with field force expansion has helped the Company to gain market share and strengthen its leadership position within the industry.

Brazil:

Brazil continues to be the largest pharmaceutical market in Latin America, representing almost half of the LATAM market in units and value (USD). It is currently the 8th largest in the world with an estimated market size of around BRL 236 Bn (US$ 39 Bn), growing at ~11%. The Brazilian pharma market is expected to grow at a CAGR of 9.7% (between 2025-29).

Brazils GDP growth of 2024 is expected to be ~3.7%. Given the economic situation, the interest rate in 2024 was 10.75% which is expected to be at 13.25% in 2025 and projected GDP growth is likely to be 2.2%. Tax reforms have been recently announced by the government, which will be transitioned gradually. The government plans to reinforce growth in the health sector by restoring funds. This, however, does not limit the opportunity for pharmaceutical companies to gain from direct sales to consumers. Additionally, the government plans to strengthen local production of vaccines, medical equipment, devices and other categories and increase it from 42% to 70%.

The Brazil retail market continues to grow in units in 2024 and maintains a pace of 11.7% in value (excluding OTC). Approximately 65% of the retail market is driven by prescription products with mature promoted products growing at 9.7%, Patented (exclusive) products growing at 19.4% and Generics growing at 12.5%. On the non-retail front, the private market continues to register healthy growth of 14.2%. On the regulatory front, Brazilian Health Agency (ANVISA) restricted the drug registration process through clones, limiting it to companies within the same economic group only. This will benefit local pharma corporations at large. During the fiscal year 2024-25, Brazilian operations registered a total revenue of BRL 728 Mn or ~ H1100 crores, registering constant currency growth of 9.4%. In the retail market, Torrent is ranked 21st in the Brazilian pharma market and 19th in the overall branded and generic market. In Branded Generics covered market, the Company maintains its leadership. The Company intends to gain market share through specialty focus, enhancing existing field force productivity and reach, and launch of new products. The Company is also preparing for entry into newer therapeutic segments in the near term.

Among the Indian companies, in terms of value, the Company ranks No. 1 (IQVIA dataset). Currently, it has commercialised 29 branded generics and 25 generic products. In its branded generic portfolio, the Company has 30 Branded and 24 Generics product filings awaiting approval and 23 new filings planned in the next 12 months.

Germany:

In major European countries like Germany, France, Italy, Spain and UK, medicine spending is expected to increase by US$ 70B over the next 5 years, from US$ 226 Bn in 2023 to US$ 296 Bn in 2028. CAGR from 2023 to 2028 is expected to be 4% to 7%. Germany, where the Company has significant presence, is valued over $60 Bn and is expected to grow at a CAGR of 4% to 7% through 2028. The German healthcare market is highly regulated, and the legislative pressure on pharmaceutical businesses to lower the sales price of drugs for end-consumers is not very high. Generics, including biosimilars, are expected to add $15 Bn in growth over the next five years, about the same as in the past five years despite a larger impact of losses of exclusivity as volume gains will be offset by price deflation.

The Company has direct presence in Germany and UK.

Revenues from Germany operations during 2024-25 were H1139 Cr (Euro 125 Mn), registering growth of 6% in Rs. terms (Euro Growth 5%). Consistent tender win performance and new product launches are expected to support the growth momentum. Among the generic players, the Company holds 5th position and is ranked No. 1 among Indian players in the German market.

USA:

The US pharmaceutical market is on a promising trajectory, expected to reach a value of $857 billion by 2030, rising from $613 billion in 2024. This steady growth, driven by a compound annual growth rate (CAGR) of 5.7% from 2025 to 2030, reflects the sectors adaptability and innovation. Traditional small-molecule drugs continue to dominate revenue streams, but biologics and biosimilars are gaining momentum as the fastest-growing segments. This evolution is fuelled by groundbreaking therapeutic developments, an increasing number of regulatory approvals, and enhanced research initiatives.

A major driver of innovation in recent years has been the success of GLP-1 receptor agonists and dual GLP-1/GIP agonists, which are setting new benchmarks for obesity treatment. These treatments have shown transformative outcomes, shifting the focus toward more customised and effective therapeutic solutions. Their success symbolises industry shift towards personalised medicine, where targeted therapies are developed to meet individual patient needs more precisely. This trend is expected to strengthen US leadership in global pharmaceutical revenue through 2030, as companies continue to invest heavily in cutting-edge R&D pipelines and clinical advancements across therapeutic areas.

In 2024, the U.S. Food and Drug Administration (FDA) approved 900 abbreviated new drug applications (ANDAs), including 92 complex generics.

In the current environment, there is rising pressure from both government and private players to reduce cost and ensure the value of drugs. This is further amplified in the US market by the consolidation of healthcare delivery into fewer, more complex and powerful healthcare systems, thereby increasing centralised control over the drugs. Further compounding these pressures are recent tariff proposals, which have raised alarms within the pharmaceutical industry and have sparked concern about escalating drug shortages and rising costs for American consumers. Generic manufacturers which operate on thinner margins, are particularly vulnerable to these changes, as they lack the pricing flexibility of their branded counterparts.

The Company is ranked No.11 amongst the US generic Indian companies. Sales from the US business were H1,100 crores (US$ 128 Mn) during the financial year 2024-25.

The Company has filed 4 ANDAs during FY 2024-25. The Company has 120 ANDA approvals (including 5 tentative approvals) and its pipeline consists of 19 pending approvals and 17 products under development to be filed over the next 3 years.

Manufacturing

The Companys state-of-the-art manufacturing facilities for formulation and API have significantly contributed to the fulfilment of demand for high-quality products and in sustaining its growth and success. During the year, the Company received USFDA Establishment Inspection Report (EIR) for its Indrad Plant, located in Gujarat and for the Pithampur facility at Madhya Pradesh. All four plants, which manufacture products for the US market, have been cleared by FDA and the Company has already started receiving new product approvals for USA.

Plants at Indrad, Dahej and Baddi were also audited by EU authorities and the approval has been received for all three sites, for the next 3 years.

Research and Development

To support the Companys interest in complex specialty generics, 2 Oncology products have been filed in the US as well as the EU, out of which one product has been filed with granted PFC application for CGT exclusivity. The Company has filed Complex OSD on NCE-1 and one Branded generic product was launched during the year through partnerships with patient support services. Furthermore, the pipeline recognises unmet medical needs by including convoluted generics, Derma, cosmeceutical products as well as complex injectables where vertical integration is not required, and competition is minimal. To gain a competitive edge, R&D has continued to focus on near-term assembly of commercial portfolio of biologics.

Ideation and decision making for intricate product development with vertical integration for several complex APIs provides a key competitive advantage for expanding the API Business. It also helps to identify external business partners/agents in key markets of US, Europe, Japan, China, Brazil, Korea and other emerging markets. To boost growth and to support inorganic activities, due diligence for external developments were stepped up and a network of external experts in complex dosage forms was formed. The in-house Cutting-edge Bio-Evaluation Centre supports product development by means of conducting bioequivalence studies which have been audited and certified by various regulatory agencies. As part of the recent US FDA inspection, the clinical as well as bio analytical part of the centre has been successfully cleared with Zero 483 observations. Also, the clinical lab of IH BE centre has been granted NABL accreditation till 2028.

The R&D expenses for the year amounted to H581 crores, representing around 5% of the Companys total revenue.

Threats, Risks and Concerns

Strategic risk

The Company faces strategic risks due to delays in product development and launch, regulatory landscape, capital investments on new projects and inorganic growth opportunities.

The pharmaceutical product development lifecycle integrally carries high risk in terms of uncertainty in clinical outcomes, technical challenges related to development of complex products and significant expenditure. Timely launch of the product is of utmost important to recover the expenses already incurred in the R&D phase. Launch could be delayed or abandoned on account of delay in securing regulatory approvals or high probability of patent litigation. Moreover, simultaneous entry of competitors at the time of launch of product creates pricing pressure, adversely impacting margins of the Company. The Company manages such risks through careful market research for selection of new products, detailed project planning and continuous monitoring. R&D activities are complemented with insurance programmes suited to nature and propensity of risk.

The Company may launch a generic product based on legal and commercial factors, even though patent litigation is pending. The outcome of such patent litigation could affect the Companys business adversely in case it is established by the court of law that there has been a patent infringement. In addition to the substantial liabilities for patent infringement, the Company may also incur high costs of litigation for defending against the infringement. This risk is sought to be managed by a careful patent analysis prior to development and launch of the generic products and strategy of early settlement with the patent holders, on case-to-case basis, particularly in the US market.

The Company deploys capital to add manufacturing capacity to meet increasing demand of pharmaceutical products from various markets. The Company faces risks arising out of delay in implementation of project and results in cost overrun. There is also a possibility of demand slump by the time the project is completed and carries risk of underutilisation of capacities resulting in high manufacturing cost. The risks are sought to be mitigated through the formation of appropriate project management teams and management oversight.

The Company has a history of successful acquisitions and its integration with existing business operations. It continuously looks for new inorganic growth opportunities. Any such acquisition involves significant challenges in terms of integration of people, system and processes with existing operations, which requires considerable amount of time, resources and effort. This may lead to temporary disruption of ongoing business, affect relations with the employees and customers with whom the Company has been dealing.

Competition Risk and Pricing Pressure

The Company markets pharmaceutical products across different countries and has global operations. Generally, pharmaceutical products are affected by price erosion over a period, either due to intensified competition in the market or on account of pricing controls notified by local governments. Intense competition and threats from new entrants in existing key markets and therapies impede the Companys ability to drive improvements in market share.

In the Generics market, the Company is mainly exposed to pricing pressure in the US and Germany. In the US, consolidation of certain customer groups, emergence of large buying groups representing independent retail pharmacies, prevalence and influence of managed care organisations and similar institutions enable such groups to extract price discounts on the Companys products and it could adversely affect the overall price realisations of the Company. In Germany, insurance companies have been empowered to enter into rebate contracts and float tenders. Aggressive bidding by competitors in such tenders leads to continuous price erosion.

In the Branded Generics market, the Company is mainly exposed to pricing pressure in India and Brazil. In India, the Company is exposed to pricing pressure due to drug price control through National List of Essential Medicines (NLEM) as well as the promotion of generic medicines by the Government of India through various initiatives. In Brazil, the Company sells branded generics, the pure generic competition could adversely affect development of branded business.

A significant portion of the revenue in various markets would be derived from sales to limited number of customers. In case of loss of business from one such customer or difficulties experienced by the customer in paying us on time may impact business performance.

The risks are mitigated through careful market analysis, upgrading skills, marketing alliances and upscaling of volumes to bring down costs and management oversight. For Branded Generic Markets, mitigation strategies include Specialty-driven approach and building brands, resulting in high prescription stickiness. Evolving patients needs are met through the delivery of innovative products in diverse dosage forms and fixed dosage combinations. Scientific detailing, delivery of quality products, competitive pricing, therapy focused sales structure together with low attrition will help to wither out competition risks. For Generics markets, continuous supply through a robust and agile supply chain and compliance at our manufacturing facilities, portfolio optimisation by incremental investment in R&D of complex drugs, introduction of diversified dosage forms and value-added generics, continuous cost optimisation structures and enhanced manufacturing productivity enables us to remain competitive and sustain margins.

Product Quality and Regulatory Risk

The Company operates in a highly regulated pharmaceutical sector. It is essential to comply with the highest quality standards as potential risks associated with Pharmaceutical products can have significant impact on human health. Risks of product efficacy, adverse drug reactions, unexpected side effects, drug interactions, medication errors etc. pose risk to the safety of patients. Additionally, product manufacturing sites of the Company and those of our contract manufacturers and suppliers are regulated by government health and quality regulations. Failure to comply with the applicable regulations and cGMP requirements results in regulatory warnings, failure / delay to secure approvals for commercial launches, withdrawal of certification of manufacturing facility, product recalls and product liability claims or cancellation of approvals / licenses to manufacture. Inability to comply with quality requirements throughout the supply chain may lead to the risk of batch rejection. Overall, non-compliance to such requirements adversely impacts brand and Company reputation.

The Company assures product quality and regulatory compliance through robust quality management systems, adequately assisted by automated and system driven controls to adhere with applicable processes, pharmacovigilance function and stringent training programmes at its own and third-party manufacturing plants. The Company has established a global pharmacovigilance group comprising a team of experienced doctors and pharmacists in the field of pharmacovigilance. The global pharmacovigilance system supervises and integrates all affiliates pharmacovigilance system. This ensures that any safety information or adverse events from any country are captured, evaluated and reported duly as per regional and global pharmacovigilance regulations. These risks are sought to be managed by appropriate laboratory and clinical studies for each new product, compliance with Good Manufacturing Practices and independent quality assurance system. Rigorous vendor and contract manufacturer audits on factors such as cGMP and quality management system compliance is in place to mitigate risks. The Company also has an adequate insurance cover for product liability. The Company is facing litigation on two of its products viz. Losartan and Valsartan in the US.

Supply Chain Risk

Although a major portion of the Companys finished formulations are being manufactured at in-house facilities, the Company also depends on third party suppliers for sourcing, for some of its markets. Any significant disruption at in-house facilities or any third-party manufacturing locations due to economic, regulatory, political and social factors, quality deficiencies in products or any other event may impair the Companys ability to produce, procure and / or ship products to the markets on time and could expose the Company to penalties and claims from customers.

The Company purchases Active Pharmaceutical Ingredients (API) and other materials that it uses in its manufacturing operations from foreign and domestic suppliers. Although the Company has a policy to actively develop alternate supply sources for key products, there would be certain cases where the Company has listed only one supplier in its application with regulatory agencies. An interruption in the supply from single source materials can impact the financial performance of the Company.

Continuous monitoring to identify potential disruptions, proactive deployment of mitigation measures, maintaining sufficient inventory balances for key products, logistics optimisation and cost rationalisation through rate contracts with vendors and prior scheduling of dispatches helps to manage the risk.

Financial Risks

The Company operates across the globe and risks associated with fluctuation in foreign currencies, changes in interest rates and tax landscape of respective foreign countries may impact the Companys operations.

Foreign currency risks mainly arise due to the Companys overseas operations and borrowings. The Company accrues revenue from export and import of raw materials, plant and machinery. It also avails services from different countries. All such transactions are in foreign currency and exposed to foreign currency risk. With respect to borrowings, the Company carries currency risk to the extent of foreign currency borrowings and is exposed to interest rate risk on borrowings linked to variable rate of interest. The Company has potential tax exposure resulting from application of varying laws and interpretations in relation to various business transactions. Although the Company carries out cross-border transactions between affiliates on the basis of internationally accepted practices, tax authorities in various jurisdictions may have different views or interpretations and subsequently challenge the amount of profits taxed in their jurisdiction, resulting in increased tax liability, including interest and penalties, that may drive up the tax expense of the Company.

The Company has a defined risk management framework to manage currency and interest rate risks. The Company has also taken adequate measures to ensure compliance to the laws of respective countries.

Cyber Security and Data Privacy Risk

The pharmaceutical sector continues to be targeted by cyber criminals which may cause significant disruption to business operations. The Company depends upon complex and interdependent information technology systems, including internet and cloud-based systems, to support business processes. Moreover, there are dependencies on outsourced and collaborative systems, which require exchanging data and information. The size, complexity and interconnectivity of our computer systems make them potentially vulnerable to breakdown, malicious intrusion, computer viruses and other cyber-attacks.

Failure to protect personal data and comply with data privacy regulations of countries in which the Company operates may attract financial penalties, intervention by regulators and reputational loss.

The Company has internationally recognised framework of ISO 27001:2022 which includes Information security policy, secured IT system, robust access control and restricted administrator privilege to restrict unauthorised access. Adequate e-mails protection, multi-factor authentications, and laptop encryptions are also implemented. Independent vulnerability assessment and penetration tests (VAPT) are performed yearly to identify gaps in controlled framework and enhance effectiveness of controls. An IT disaster recovery plan is also in place for our key applications. It aims to minimise impacts from any unanticipated events and breakdowns. The Company continuously invests in information technology to reduce risks and has also opted for significant cyber security insurance cover.

Business Continuity Risks

Potential disruption or failure of the Companys operations due to unexpected events including natural disasters, supply chain disruptions, security breaches or cyberattacks, financial crisis, regulatory changes or pandemics may lead to business continuity risks. It can have significant impacts on a companys financial performance, reputation and ability to continue operations. The Company has identified key business, operational, strategic business continuity risks and have instituted various measures including alternate sourcing strategies, carrying adequate inventories, vertical manufacturing integration, digital interventions, periodic review BCP and DRP plans, training on Emergency Response Plan etc. to ensure timely availability and management of operations in times of disruptions.

Compliance Risks

As the Company operates in multiple geographies globally, each operating in a dynamic and complex regulatory landscape that continuously evolves, changes and undergoes increased scrutiny from the regulators, failure to identify and / or comply with applicable statutes and regulations globally may pose a threat to business operations, thereby affecting our financial and / or reputational standing. Regulatory risks are managed through a strong governance mechanism based on the philosophy of ‘zero tolerance to non- compliance. This is implemented through regular assessment of regulatory and compliance requirements, robust internal controls, continuous monitoring through compliance management systems and periodic reporting to senior management and the Board. Further, independent assessments and audit mechanisms are put in place.

Environment, Social and Governance Risks

Commercial activities may cause adverse impact on the environment and thereby impact society at large. Climate-related events such as weather pattern changes, rising sea water levels may cause disruption in manufacturing and supply chain cycles, resulting in financial losses. To sustain growth in a continuously evolving global ecosystem with unpredicted externalities, it is important to implement ESG measures. Failure to limit our environmental impact may have negative consequences on our reputation, operations and long-term sustainability of our Companys performance.

Sustainable value creation can no longer be agnostic of ESG risks, which has now evolved as a new yardstick in addition to profitability and capital efficiency returns. The Company has developed a structured ESG framework and strategy, based on international standards and structures such as GRI, SASB and many others. The Company has designed a multi-fold strategy, with four core ESG pillars, i.e. Responsible Consumption, Responsible Practices, Responsible Communication and Responsible Supply Chain, that will enable it to navigate its growth in a manner that maximises stakeholder value, consistently and sustainably.

Counterfeit Drugs Risks

The pharmaceutical industry has been increasingly challenged by the vulnerability of illegal counterfeit products in a growing number of markets and over the internet. Counterfeit medicines are fake medicines that are passed off as authentic, which may contain the wrong ingredients, contain too much, too little or no active ingredient at all or contain other harmful ingredients. Third parties may illegally distribute and sell counterfeit versions of our products, which do not meet the rigorous manufacturing and testing standards that our products undergo, making them unsafe and ineffective for consumption. The Company takes measures to prevent counterfeit by assessment of random samples from the market, implements packaging controls via serialisation, track and trace systems, hologram and barcodes. It helps to build a strong and reliable distribution network.

Geopolitical Risks

Since the Company operates across the globe, dynamic changes in geopolitical situations of countries may adversely impact operations of the Company. There could be possibilities of war, terror attacks, political unrest and government default in some of the geographies in which the Company has operations. Recently, the Company witnessed situations like war in Russia-Ukraine, the middle-east, political uncertainty in Sri Lanka, US trade policy changes and supply chain disruptions including the Red Sea crisis. These may have an adverse impact on the operations of the Company. It may impact the Companys growths, delay its cash inflows, increase procurement costs and increase foreign currency volatility. The Company manages risk through continuous evaluation of economic developments in such geographies, securing receivables through LCs / Bank Guarantee, hedging foreign currencies and entering into rate contracts. Overall, the Company keeps the exposure to such geographies to a minimum level.

Human Capital Risk

The Pharmaceutical industry is knowledge driven and requires highly skilled human resources in major operations of the Company to drive productivity. Inability to attract and retain skilled employees may adversely affect the complex operations of the Company. The Company manages to attract and retain talented employees by providing job rotations, creating a motivating working environment and development of team-building initiatives. Prioritisation of continuous learning and development initiatives foster innovation and develops a future-ready workforce. Further, the Company takes adequate measures to develop succession plans and de-risk critical roles.

Human Resources

The total employee strength of the Company at the end of financial year 2024-25 was 17,320 against 16,056 at the end of financial year 2023-24, an increase of 1,264 employees.

Internal Control System

The Company has a robust system of internal controls comprising authority levels and powers, supervision, checks and balances, policies and procedures. The system is reviewed and updated on an on-going basis. The Company continuously upgrades its internal control systems by taking measures such as strengthening of IT infrastructure and use of external management assurance services. The Company has in place a well-defined internal audit system whereby the internal audit is performed across locations of the Company and the results of the audit findings are reviewed by the audit committee.

Results of Operations for 2024-25 compared with 2023-24

Summary Financial Information:

Particulars	2024-25		2023-24
	K crores	% to Revenues	K crores	% to Revenues
Sales and Operating Income (Revenues)	11,516	100%	10,728	100%
Gross Profit	8,740	76%	8,041	75%
Selling, General and admin expenses (SG&A)	4,438	39%	4,146	39%
Research and Development Spend	581	5%	527	5%
Operating EBITDA	3,721	32%	3,368	31%
Forex (Gain) /Loss	17	0%	4	0%
Other (Income)	(20)	(0%)	(50)	(1%)
Depreciation / amortisation	795	7%	808	8%
Net Interest expense / (Income)	232	2%	342	3%
Profit before tax and exceptional items	2,697	23%	2,264	21%
Exceptional Items	24	0%	(88)	(1%)
Profit before tax and after exceptional items	2,673	23%	2,352	22%
Income Tax	762	6%	696	6%
Profit after Tax	1,911	17%	1,656	16%

Financial Performance

• Revenues grew by 7% to H11,516 crores from H10,728 crores in the previous year

• Operating EBITDA grew by 10% to Rs. 3,721 crores from H3,368 crores in the previous year

• Borrowings reduced by H911 crores. Net Leverage stands at 0.62x.

Working Capital and Liquidity

The trade working capital i.e., net working capital investment excluding current investments, cash and cash equivalents, bank balances other than cash and cash equivalents, short term borrowings, current maturity of long-term debt and accruals on tender contracts (Germany) increased by H193 crores at the end of financial year 2024-25. The number of days of net trade working capital remained at 90 days at the end of financial year 2024-25.

Cash and cash equivalents including current investments and bank balances including fixed deposits was at H689 crores during the financial year 2024-25 compared to H1,005 crores at the end of financial year 2023-24.

Key Financial Ratios for 2024-25 compared with 2023-24

Particulars	2024-25	2023-24
Profitability ratios
(a) EBITDA margin	32%	32%
(b) Net profit margin (Refer Note 1)	17%	15%
(c) Return on net worth	25%	24%
Working capital ratios
(d) Debtors turnover (days)	60	64
(e) Inventory turnover (days)	82	79
Gearing ratios
(f) Interest coverage	12.43	8.40
(g) Debt / equity	0.23	0.34

 

Particulars	2024-25	2023-24
Liquidity ratios
(h) Current ratio	1.36	1.20

Note:

1. Net profit margin is adjusted for exceptions items.

The ratios have been computed as follows:

• EBITDA margin : (Profit before tax and exceptional items + Net Interest expense / (income) + Depreciation / amortisation)

/ Revenues

• Net profit margin: Profit after taxes / Revenues

• Return on net worth: Profit after taxes / Net worth (Net worth = Share capital + Reserves and Surplus)

• Debtors days: (Trade receivables / Net Sales) * 365

• Inventory Days: (Inventory / Net Sales) * 365

• Interest coverage: (Profit after tax + Deferred tax + Depreciation and amortisation + Interest expense) / Interest expense

• Debt to equity: Debt / Net worth

• Debt: Long term borrowings (current and non-current portion)

• Net worth: Share capital + Reserves and surplus

• Current ratio: Current assets / [Current liabilities less Current Maturities of Long-term debt]

For and on behalf of the Board of Directors

Samir Mehta

Mumbai Executive Chairman

20th May, 2025 DIN: 00061903

References

1. World Economic Outlook, International Monetary Fund, Jan 2025

2. Economic Review – Department of Economic Affairs 2024-25

3. The Global Use of Medicines 2024.

4. AIOCD MAT March 2025 data set.