Caveat
Shareholders are cautioned that certain data and information external to the Company are included in this section. Though these 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 are extremely dynamic and increasingly fraught with risks and uncertainties. Actual results, performance, 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/ entities where company is having controlling stake (jointly referred 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. The previous years figures have been regrouped, wherever necessary, to make it comparable with the current year
Global Economy:
The global economy is expected to grow at a moderate but slightly weaker pace amid rising geopolitical uncertainty. According to the IMFs April 2026 World Economic Outlook, global growth is projected at 3.1% in 2026 and 3.2% in 2027, revised downward from earlier estimates, mainly due to the outbreak of conflict in the Middle East. Without this disruption, growth would have been higher, indicating that underlying momentum remains resilient but uneven.
Inflation dynamics show a temporary reversal in disinflation trends. Global headline inflation is projected to rise to 4.4% in 2026 before easing to 3.7% in 2027, driven largely by higher commodity and energy prices following geopolitical tensions. However, inflation patterns remain divergent across economies, with advanced economies facing sticky services inflation while emerging economies experience mixed trends.
Growth performance varies significantly across regions. The United States continues to outperform, supported by fiscal expansion, technological investment, and easing financial conditions. In contrast, the Euro area grows modestly, while Japans growth remains subdued. Emerging market and developing economies grow at a slower pace than earlier expected, with Chinas outlook slightly upgraded due to policy support and reduced trade tensions.
The outlook is dominated by heightened downside risks, including geopolitical escalation, energy market disruptions, trade fragmentation, fiscal vulnerabilities, and potential financial market corrections linked to AI-driven investment cycles.
Policy priorities emphasize maintaining price stability, safeguarding fiscal sustainability, and preserving financial stability. Central banks are urged to remain vigilant, while governments must ensure targeted and temporary support measures. Structural reforms, international cooperation, and trade stability are essential to strengthening long-term global resilience.
Overall, the outlook for the Indian economy remains strongly positive. India is expected to grow by 6.8-72% in FY27 (Economic Survey 2025-26). The IMF revised Indias growth upward to 7.3% for FY2025-26, with growth projected to moderate to 6.4% in 2026 and 2027
On the demand side, domestic demand continues to anchor growth, supported by a strengthening momentum in capital formation. On the supply side, manufacturing activity has gained traction, and services continue to drive overall expansion. On the supply side, manufacturing activity has gained traction, and services continue to drive overall expansion.
Inflationary pressures have eased significantly. Headline CPI inflation declined to 1.7 per cent during April-December FY26, driven primarily by corrections in vegetable and pulse prices, supported by favourable farm conditions, supply- side interventions, and a strong base effect. Core inflation has exhibited persistence, largely influenced by price spikes in precious metals; adjusting for these, underlying inflation pressures appear materially softer The Reserve Bank of India delivered a cumulative reduction of 125 basis points in the policy repo rate since February 2025, complemented by an injection of durable liquidity via CRR, open market operations and forex swaps.
Indias growth profile in FY26 reflects a well-balanced and resilient domestic demand environment, with private consumption emerging as a key anchor. The strength in consumption is underpinned by benign inflation, stable labour market conditions, and improving real incomes, allowing households to sustain spending at levels not seen in over a decade. This suggests that the recovery has moved beyond pent-up demand and is now supported by structural improvements in purchasing power
At the same time, investment activity remains robust, with capital formation holding firm at elevated levels relative to the pre-pandemic period. This indicates continued confidence in the medium-term growth outlook, supported by both public and private sector capex, and points to the persistence of an investment-led growth cycle alongside consumption strength.
On the production side, growth is becoming increasingly broad-based. Manufacturing is gaining traction, reflecting improving capacity utilisation and policy support, while services continue to act as a key growth engine, benefiting from strong domestic demand and external linkages. The agricultural sector, though growing at a more moderate pace, remains stable, supported by favourable climatic conditions, thereby reinforcing rural demand dynamics.
Externally, Indias position remains comfortable despite global uncertainties. Strong export performance, particularly in services, highlights the countrys growing competitiveness in high-value sectors, while a contained current account deficit and ample foreign exchange reserves provide a buffer against external shocks. Recent sovereign rating upgrades by agencies such as S&P Global Ratings and Morningstar DBRS reflect increasing confidence in Indias macroeconomic stability and fiscal credibility.
Overall, the economy appears to be in a balanced growth phase characterised by steady growth, controlled inflation, and strong macroeconomic fundamentals, positioning it relatively well to navigate an increasingly uncertain global environment.
Middle East Conflict:
The ongoing Middle East conflict has evolved from a geopolitical risk into a systemic macroeconomic driver, with the International Monetary Fund, International Energy Agency, and World Bank jointly characterizing it as one of the largest energy supply disruptions in modern history.
The shock is primarily being transmitted through a sharp reduction in oil and gas supply, leading to sustained increases in energy prices, which are already feeding into global inflation. Beyond first-round effects, higher gas prices are elevating fertiliser costs, creating second-order pressures on food prices and amplifying inflationary risks, particularly in emerging economies.
In parallel, disruptions to key energy trade routes and rising shipping and insurance costs are increasing the delivered cost of commodities, further tightening global financial conditions. The IMF has also highlighted risks of currency volatility and capital outflows in energy-importing economies as external balances deteriorate.
Crucially, the persistence of the shock implies that adjustment is likely to occur through demand destruction rather than rapid supply recovery, pointing to weaker global growth. This creates a stagflationary backdrop, where inflation remains elevated even as economic momentum slows.
Global Pharma Market
In 2026, 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 pharmaceutical sector remains a critical pillar of global healthcare, with innovation, access, and affordability shaping the industrys trajectory.
At invoice price levels, the global pharmaceutical market is projected to grow at a compound annual growth rate (CAGR) of 5-8% through 2030, reaching a total estimated market size of approximately $2.6 trillion. This growth will be driven by the continued availability and use of innovative therapeutics in developed markets, offset by losses of exclusivity. Spending and volume growth are following diverging trends by region, with volume and spending drivers varying some regions are more volume-driven while others have a greater contribution from adoption of innovation with higher prices.
Exhibit 15: Global medicine market size and growth including estimated COVID-19 vaccine and therapeutic spending. 2016-2030
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. Thirty countries are expected to drive global spending growth, all with spending in 2030 more than $2 billion higher than in 2025. Half of these are developed countries with GDP per capita above $50,000, and the other half are Pharmerging countries with robust pharmaceutical growth.
On a net price basis, U.S. pharmaceutical spending is forecast to grow at a 4 -7% CAGR over the next five years, down from 9.4% CAGR for the past five years. This deceleration reflects the growing impact of patent expiries, biosimilar competition, and policy measures including the Inflation Reduction Act. Total net spending on medicines in 2030 is expected to increase by $171 billion compared to 2025. At list prices, U.S. spending is expected to increase by $389 billion through 2030, driven by new and existing brands and offset by the largest-ever wave of losses of exclusivity projected at $198 billion, the highest in history, significantly exceeding the often-cited patent cliff of 2011-2012.
Regional Outlook
• United States: On a net price basis, U.S. pharmaceutical spending is projected to grow at a 4-7% CAGR over the next five years. Growth will be driven by adoption of newly launched innovative products, with an average of 50-55 new medicines launching per year, including those in oncology or with specific return-on-investment profiles. The largest driver of growth will be increased usage of existing protected branded products, expected to add $378 billion in spending over five years. The Inflation Reduction Act (2022), benefit redesign for Medicare Part D, and the omnibus legislation of summer 2025 are reshaping how consumers pay for drugs.
• Europe: Spending in the top six European markets (Germany, UK, Italy, Spain, France, and Poland) ranges from $41 billion to $78 billion in 2025, with spending at invoice prices projected to grow modestly through 2030. Eastern European countries with higher historic growth, including Russia, Poland, Romania, and Turkiye, are projected to continue above-average growth. The recently announced U.S./UK trade deal includes an intention by the UK to increase spending on novel drugs as a percentage of GDP EU-wide policies targeting security of supply, harmonisation of health technology assessments, and incentives to industry will shape the market.
• Japan: Medicine spending is forecast to remain nearly unchanged over five years, averaging 0.5 to 2.5% CAGR through 2030. Growth is driven by existing products and expected new launches, while offset by annual price cuts and expiries. Long-listed products (off-patent brands) face significant price erosion through biennial and annual pricing revisions. Average price cuts are projected in the 4-6% range, with larger cuts for every-year scheduled price cuts.
• China: Pharmaceutical spending has risen from $112 billion in 2016 to $166 billion in 2025 in constant USD. Over the past five years, spending growth was driven by protected original branded products, more often from multinational companies, which grew at an average of 18.2% per year. Over the next five years, protected original brands will slow to 8.4% per year while most other types of product will decline, contributing to overall growth slowing to 0-2%. The National Reimbursement Drug List (NRDL) updates and volume-based procurement (VBP) continue to drive down generic prices.
• Latin America: Growth is expected to slow to 8-11% CAGR through 2030, led by strong performance in Brazil (the largest and among the fastest growing), Mexico, Argentina, and Colombia. Brazils growth is driven by a combination of economic and policy drivers.
• India: Spending growth is expected at 7-10% through 2030. Growth has been driven by volume over the past decade as 1.3 billion people expand usage in a largely out-of-pocket market. Most of the spending is driven by nonoriginal brands and unbranded generic drugs, supported by lower prices and robust domestic generics.
• Middle East and North Africa: Spending is expected to grow considerably, led by Saudi Arabia growing from $15.5 billion to $23.6 billion, driven by Vision 2030 goals including increasing life expectancy and promoting preventive healthcare. Egypts growth is driven more by price growth amid currency devaluation. The UAE is expected to see more modest growth. Sub-Saharan Africa is projected to grow only 2.6% CAGR through 2030, spending only $14 billion on medicines despite being home to 1.5 billion people.
Key Drivers Ahead
Looking ahead, the pharmaceutical sectors trajectory will be shaped by a few critical forces:
1. New product launches, particularly in oncology, immunology, diabetes and obesity. An estimated 73 novel active substances (NAS) were launched globally in 2025, above the average of NAS launches over the past decade. In the past five years there were 386 NAS launches. Oncology is expected to grow 9-12% CAGR through 2030, with spending projected to reach $467 billion. Obesity spending reached nearly $65 billion in 2025 and could reach $105-$200 billion by 2030.
2. A sharp increase in patent expiries, notably among biologics, accelerating biosimilar adoption. The impact of brand loss of exclusivity is projected at $198 billion in developed markets over the next five years, as both small molecule and biologic product exposure to Loss of exclusivity [LOE] has increased substantially. Global spending on biotech drugs is expected to reach $915 billion by 2030, about 34% of global medicine spending.
3. Differentiated regional policy landscapes, particularly around pricing reforms and reimbursement mechanisms.
4. Glucagon-like peptide-1 (GLP-1) receptor agonists have emerged as one of the most transformative drug classes in the pharmaceutical industry, reshaping the treatment landscape for both diabetes and obesity. The dramatic growth of therapies based on GLP-1 has accelerated in the past five years, through wider usage for both diabetes and obesity indications.
The global outlook remains robust as the sector balances innovation with affordability, emphasising both high-value branded therapies and cost-effective generics and biosimilars in a complex and evolving healthcare landscape.
The largest driver of medicine spending growth through the next four years is still expected to be the availability and use of innovative therapeutics in developed markets and offset by losses of exclusivity and lower costs of generics and biosimilars.
Global Trends in Medicine Use - 2026 Outlook
Global medicine use based on modelling medicine volumes shipped according to defined daily dose assumptions increased by 441 billion defined daily doses over the past five years and is expected to grow on average 2.7% annually through 2030.
The highest volume growth over the next five years is expected in China, reaching 5.5% compound annual growth (CAGR) driven by policy initiatives related to Healthy China 2030. By 2030, usage in China is expected to reach an index of 196, nearly doubling relative to 2020 levels. Asia-Pacific and China together account for more than half of global volume growth through 2030. Eastern European growth slows to 2.4% CAGR, with relatively little or localized impact of Ukraine conflict.
Medicine use in regions with higher-income countries like North America, Western Europe, and Japan is projected to increase more slowly, remaining close to or below global average growth as mature markets typical of these more established health systems. Per capita use varies widely by region, with Japan and Western Europe having more than double the use of most other regions. Broadly, there is a correlation of medicine use to per capita gross domestic product, where per capita use generally increases with income.
The global use of medicines is expected to grow on average 2.7% annually through 2030, similar to the last five years
Exhibit 1: Historic and projected use of medicines by region. defined daily doses (DDD) in billions, 2020-2030
Key Areas of Global Medicine Spending
• Biotech medicines - those created through recombinant DNA technology - are expected to reach $915 billion by 2030, about 34% of global medicine spending. Biotech covers a range of therapies, including traditional therapies such as insulin analogues and more complex specialty medicines and cell and gene therapies. Biotech drugs will see a 47% aggregate increase over the next five years. However, overall biotech growth will occur despite brand losses of $50 billion due to biosimilars in developed markets.
• Specialty medicines - those treating chronic, complex, or rare conditions, often requiring special handling, distribution, or patient monitoring - will represent about 46% of global spending by 2030 and over 53% in leading developed markets, up from 34.9% and 36% respectively a decade earlier. Pharmerging countries have lagged, with only 18% of spending on specialty medicines in 2025.
• Oncology: Expected to grow at 9-12% CAGR through 2030, reaching $467 billion from $291 billion in 2025. The PD-1 inhibitors pembrolizumab (Keytruda) and nivolumab (Opdivo), which combined accounted for 10% of global oncology spending in 2025, are expected to face biosimilar competition. This will be offset by continued uptake of novel modalities including ADCs, bispecific antibodies, and cell and gene therapies.
• Immunology: Projected to grow at 3.5-6.5% CAGR through 2030, reaching $271 billion. Growth is offset by the impact of biosimilars, particularly biosimilar adalimumab (Humira), ustekinumab (Stelara), and tocilizumab (Actemra). New products in psoriasis, atopic dermatitis, and severe asthma have driven spending growth and are expected to continue.
• Diabetes and Obesity: Diabetes spending in developed markets reflects both the consistent use of key therapies as a patients Type 2 disease progresses and the adoption of novel therapies. GLP-1 therapies have risen to $88 billion in spending globally. Obesity spending reached $65 billion in 2025 and could reach $105-$200 billion by 2030.
• Cardiovascular: Spending on therapies for cardiovascular diseases highlights the highly effective range of treatments where drugs have multi-use, including cardiovascular, heart failure, and diabetes. Novel GLP-1 receptor agonist therapies have been approved for cardiovascular indications, benefiting more patients. SGLT2 therapies, originally developed for diabetes, are now used more widely for cardiovascular prevention. Growth in cardiovascular therapies overall is projected at 2.5% CAGR through 2030.
• Neurology: New therapies in Alzheimers and anxiety/depression are expected to drive spending growth. The antiamyloid therapies aducanumab (Aduhelm, launched 2021), lecanemab (Leqembi, launched 2023), and donanemab (launched 2024) have seen limited adoption. Expected spending growth in mental health areas is currently higher than in neurology treatments, reflecting the effects of innovation for unmet needs.
• Cell and Gene Therapies: In addition to the over 80 cell and gene therapies launched globally to date, an additional 20-25 are expected to be launched by 2030. Many of these therapies have very high costs which, combined with uncertain numbers of patients, are generating significant tension and resistance from payers. Health technology assessments (HTAs) are key to setting net prices, especially in Europe.
Oncology and obesity forecast double-digit growth rates to 2029 while immunology slows due to biosimilars
Exhibit 42: Top 20 therapy areas in 2030 in terms of global spending with forecast 5-year CAGRs, constant US$, 2026-2030
Global growth in spending for treatment of diabetes is driven entirely by GLP-1 drugs Exhibit 5O: Global diabetes spending and growth, constant US$Bn, 2020-2030
Growth spans a wide range of therapeutic areas, with immunology, endocrinology, and oncology maintaining strong momentum. Medicine use has increased across most therapy areas since 2020, with particularly strong growth in immunology (201% increase across all regions), infectious disease, and endocrinology. Cardiovascular medicines remain the largest therapy area by volume at 483 billion defined daily doses.
In immunology, biologic medicines account for the majority of treatment in developed regions, while Pharmerging countries and countries in the rest of the world averaged only 31% biologic use. Immunology has seen the largest percentage increase in medicine use across all regions in the past five years. The lowest per capita use remains in lower GDP countries, yet these countries increased usage by 194% over the period.
In oncology, global defined daily doses grew more than 25% over the last five years. Growth is driven primarily by Pharmerging countries due to widening access to care and increased access to innovation. PD-1 /PD-L1 checkpoint inhibitors have seen wide adoption in developed markets, with variations on a per capita basis. Access in low- and middle-income countries remains limited and the gap with developed markets has widened over time.
In endocrinology, the group of hormone-regulating therapies has grown at double the global average, primarily driven by 30% growth in diabetes medicine volume over the last five years. The dramatic growth of GLP-1 therapies has been the single largest driver, with use accelerating for both diabetes and obesity indications.
Looking Ahead
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; and 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 2030.
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 in developed markets is projected at $198 billion, with both small molecule and biologic product exposure increasing substantially. This represents a critical opportunity for generic and biosimilar manufacturers to introduce cost-effective alternatives.
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. In the U.S., the Inflation Reduction Act and Medicare reforms are reshaping how consumers and government pay for drugs. In Europe, harmonisation of health technology assessments is expected to improve access in some countries while shifting pricing thresholds in others. In China, volume-based procurement and NRDL negotiations continue to drive down prices. Payers in developed markets are expected to face budget pressures and act to curtail drug spending growth
The Rise of Specialty Pharmaceuticals
Specialty medicines targeting complex, chronic, or rare conditions continue to command a growing share of global pharmaceutical expenditure. By 2030, specialty medicines will account for about 46% of global spending and over 53% in leading developed markets. The most commonly noted attribute is that they are more expensive, often exceeding $1,000 per month. As specialty medicine share of spending increases, payers are increasingly focused on demonstrating value and managing costs.
Oncology remains the most active therapeutic area in terms of clinical trials, new product approvals, and investment. Cancer medicine spending rose to $291 billion globally in 2025 and is expected to reach $467 billion by 2030. Growth is expected to slow beginning in 2027 as a number of backbone therapies begin to face generic or biosimilar competition, but this will be offset by continued uptake of novel modalities.
The Growing Burden of Chronic and Lifestyle Diseases
As populations age and lifestyles shift, the global burden of chronic conditions is rising, including cardiovascular disease, diabetes and obesity, and CNS disorders. The broad range of therapies for cardiovascular and metabolic conditions account for 24% of global use of medicine. Emerging markets like India, Brazil, and Southeast Asia are seeing the fastest increases, driven by urbanisation, improved diagnosis, and health system strengthening.
Pharma 4.0: The Digital Transformation of Manufacturing
Pharma 4.0 is revolutionising pharmaceutical manufacturing through the integration of cyber-physical systems, AI, IoT, and data analytics. Key benefits include real-time data monitoring and predictive maintenance, smarter decisionmaking and reduced human error, and automation of production lines with enhanced regulatory compliance. The use of augmented reality, virtual reality, and machine learning enhances training, batch predictability, and operational efficiency.
Digital Healthcare and Integrated Delivery Models
The integration of digital tools into healthcare delivery is accelerating post-pandemic. 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. Globally, digital health ecosystems are enabling value-based procurement, predictive analytics, and personalised care pathways.
Regulatory Evolution and Global Harmonization
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 cross-border approvals. 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, and 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 2026 is at a pivotal juncture defined by disruptive innovation, digital transformation, evolving global health needs, and regulatory modernisation. Companies that effectively navigate these dynamics balancing innovation with access, cost with value, and speed with safety will be best positioned for sustainable growth.
The future of pharma will be not only about curing disease, but about delivering value, ensuring equity, and designing systems that are smarter, faster, and more inclusive.
#1. Affordability
With increasing healthcare costs, there will be growing demand for quality generic medicines as they offer affordable options for patients and healthcare providers. The global wave of patent expiries over the next five years creates significant opportunities for generic and biosimilar manufacturers to introduce cost-effective alternatives, expanding access across both developed and emerging markets.
• 2. Loss of Exclusivity:
The impact from brands losing exclusivity is expected to be the highest in history in developed markets over the next five years. This provides transformative opportunities for generic and biosimilar manufacturers to introduce bioequivalent, cheaper alternatives at scale.
?3. Health Insurance & Infrastructure:
Penetration of health insurance (both public and private) is expected to surge with government- sponsored initiatives and programmes. In India, the Ayushman Bharat PM-JAY scheme and expanding health infrastructure are making healthcare more affordable. Globally, strengthening of healthcare infrastructure, particularly in emerging markets, will drive increased medicine consumption and spending.
• 4. Digital and Advanced Analytics:
Major technological shifts including AI, IoT, and data analytics are transforming drug discovery, manufacturing, supply chain management, and patient engagement. Application of AI in drug discovery is making the process faster, cheaper and may lead to identifying completely new drugs beyond the reach of traditional methods. Pharma 4.0 is enabling real-time monitoring, predictive maintenance, and automation with enhanced regulatory compliance.
5. Longer Life Expectancy:
With declining fertility and increasing life expectancy globally, the proportion of elderly population is rising, driving demand for chronic disease management therapies. This demographic shift is particularly pronounced in developed markets but is increasingly relevant in emerging economies, creating sustained demand for cardiovascular, diabetes, oncology, and CNS therapies.
• 6. Changing Lifestyle:
Sedentary lifestyles, urbanisation, and dietary changes are driving increased prevalence of cardiovascular disease, diabetes, obesity, and CNS disorders globally. The cardiometabolic therapy area accounts for 24% of global medicine use. The dramatic rise of GLP-1 therapies for diabetes and obesity from $25 billion in 2020 to $65 billion in 2025 for obesity alone exemplifies how changing lifestyle patterns are creating entirely new therapeutic categories.
?7. Improving Purchasing Power:
The middle-class population and purchasing power in emerging markets continue to grow, expanding the addressable market for pharmaceutical products. Indias PFCE share in GDP has risen to 61.5% in FY26, the highest since FY12. Pharmerging countries those with GDP per capita below $50,000 and robust pharmaceutical growth will grow by $121 billion through 2030.
#8. Regulatory Developments:
The Pharma industry operates in one of the worlds most regulated environments to meet the public expectation of safe, effective, and high-quality medicines. Global harmonization of regulatory standards will help in driving confidence and market expansion.
Indian Pharma
The Indian pharmaceutical industry ranks as the third largest globally by volume, eleventh in terms of medicine spending, and fourteenth by value. India is the worlds leading supplier of generic medicines, accounting for approximately 20% of global generic drug exports by volume and serves over 200 countries. The country is recognised for its cost-effective and high-quality pharmaceutical products.
The country hosts the highest number of pharmaceutical manufacturing facilities approved by the U.S. Food and Drug Administration (USFDA). These facilities cater to a diverse range of segments, including generic drugs, over the counter (OTC) medications, active pharmaceutical ingredients (APIs), vaccines, biosimilars, and contract research and manufacturing services (CRAMS).
The Indian pharmaceutical market is projected to reach US$ 130 billion by 2030 and US$ 450 billion by 2047. This growth will be driven by a combination of factors such as increasing affordability and accessibility, a growing burden of lifestyle-related diseases, cost-effective production capabilities, and a supportive policy environment. Medicine spending in India is expected to grow at a compound annual rate of 7-10% through 2030, propelled by an ageing population, expanding healthcare access, and a rising prevalence of chronic conditions.
Indias expanding network of trade agreements is strengthening its pharmaceutical industry by improving global market access, boosting exports, and enhancing competitiveness. Agreements with key partners such as the EU, the UK, and New Zealand are enabling reduced or zero-duty access for a wide range of pharmaceutical products, making Indian generics more competitive in international markets.
These partnerships are expected to drive export growth, attract investment, support MSME participation, and deepen integration into global healthcare value chains. Alongside these agreements, government initiatives such as Production Linked Incentive schemes, bulk drug and research support are reinforcing domestic manufacturing, reducing import dependence, and positioning India as a reliable global supplier of affordable medicines.
Policy Initiatives and Strategic Direction
To enhance domestic pharmaceutical production and reinforce healthcare system resilience, 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:
• Establishing Centres of Excellence to promote pharmaceutical research and innovation.
• Regulating essential drug pricing to ensure affordability.
• Expanding the Jan Aushadhi scheme, targeting approximately 25,000 outlets to provide cost-effective medicines.
• Launching umbrella schemes for overall industry development.
These efforts build upon earlier programs such as the Production Linked Incentive (PLI) schemes (PLI 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 Organizations (CDMOs). Indias strengths in cost- effective manufacturing, regulatory compliance, and a large skilled workforce position it well to capture a growing share of global CDMO outsourcing.
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 industry advancements, emphasizing patient safety and supporting 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 made mandatory, marking a significant shift from the earlier voluntary framework. It has been disseminated to pharmaceutical associations, which are responsible for ensuring member compliance.
Mergers & Acquisitions
Global health industries M&A values rose by 46% in 2025, despite a drop in volumes of 5%. This performance was underpinned by 11 megadeals (transactions valued greater than $5bn), up from three in 2024. While each region accounted for roughly one-third of global deal volumes, Asia Pacific grew the most, up 12% in 2025, compared to a 5% increase in Europe, the Middle East, and Africa (EMEA) and a drop of 23% in the Americas. Much of the growth in Asia Pacific?s M&A activity was due to a 53% increase in China dealmaking, with investors attracted to the country?s innovative drug development landscape. The Americas continued to dominate in terms of deal value, representing nearly two-thirds of total deal value and nine megadeals.
Health industries dealmakers are seeking to build resilience, secure capabilities and reposition for growth. In 2026, M&A will be driven by derisked innovation, technology, shifting funding models, and the consumerisation of care. After two years of navigating macroeconomic volatility and regulatory uncertainty, Healthcare industries dealmakers are starting 2026 with renewed confidence and strategic urgency.
M&A activity in the pharmaceutical and healthcare sector is expected to focus on several high-growth and strategic areas. These include opportunities in the rapidly expanding GLP-1 drug market, driven by demand for advanced diabetes and weight-loss therapies, where innovation commands premium valuations. Large pharmaceutical companies are also likely to acquire mid-stage biotech firms to address patent expiries and strengthen their product pipelines. Additionally, CROs and CDMOs with specialized capabilities and strong cash flows will remain attractive investment targets due to their role in accelerating time-to-market. The growing application of AI in drug discovery and development is further expected to drive acquisitions aimed at accessing cutting-edge technological capabilities. At the same time, companies will continue to divest non-core assets to unlock capital and refocus on core business areas aligned with long-term growth strategies.
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 benefiting 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 optimizing capital allocation and improving operational focus. This trend is expected to continue through 2026, 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 robust and expansive reach, allowing the Company to effectively cater to the needs of diverse markets and capitalise on emerging opportunities.
Acquisition during the year:
During the year, the Company acquired a controlling stake in J. B. Chemicals & Pharmaceuticals Limited ("JBCPL”) pursuant to share purchase agreements executed with Tau Investment Holdings Pte. Ltd. (promoter) and certain employees of JBCPL, along with a mandatory open offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Subsequent to completion of the acquisition of controlling stake on January 21, 2026 and additional purchases from employees, the Companys aggregate shareholding in JBCPL stood at 48.80% on a fully diluted basis, resulting in the Company obtaining control over JBCPL.
The acquisition is aligned with the Companys strategic objective of strengthening and deepening its presence in the Indian Pharmaceutical Market (IPM). On a combined basis, Torrent Pharma is now ranked 5th in the IPM and significantly enhances its prescription footprint, improving its ranking in terms of reach from 10th to 4th, as per the SMSRC dataset, reflecting the enhanced scale and breadth of the combined business. This transaction strengthens the domestic foundation, expands the footprint across key therapeutic areas, and reinforces the long-term growth platform.
The acquisition also enhances the Companys international business presence across select geographies, including the United States, Russia, and South Africa, where both organizations have overlapping or complementary market presence. This is expected to support a more diversified and resilient global portfolio. In addition, the acquisition provides a meaningful entry and expansion opportunity in the Contract Development and Manufacturing Organization (CDMO) segment, which is a strategically attractive space.
Overall, this acquisition represents a meaningful step in the Companys long-term strategy and positions it well for the next phase of sustainable growth.
Subsidiaries of the Company (including JB chemicals)
The Consolidated financial result includes financial results of the JB Pharma and its subsidiaries w.e.f. January 21, 2026, together with depreciation and amortization on the fair value of the acquired assets, that has been determined based on purchase price allocation. , The Company reported revenues of Rs. 13,980 crores, growth of 21% compared to Rs. 11,516 crores in the previous financial year. Base business without giving effect to consolidation of JB Pharma, the Company registered a revenue growth of 15%.
The breakup of revenues under key territories is as under:
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 base Branded business constitutes around 74% of the overall Company revenues.
India:
The Indian pharmaceutical market (I PM) 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.
IPM growth trend (in value):
For the year ended 31st March 2026, India base business continues to be the largest business unit contributing 54% to the overall revenues.
Together with JB Pharma the Company is now ranked 5th in the IPM (PY 7th) and continues to grow faster than the market at 12% vs IPM at 9%. The Company ranks 4th in the combined chronic / sub chronic therapy areas and 25 Brands feature amongst Top 500 brands of the IPM and 27 Mother brands (MB) have revenues of more than Rs. 100 crores.
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, Pain/Analgesic and Dermatology, contributing to ~90% of the India revenues.
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 outperformed and gained rank in major therapy areas like Cardiac, AntiDiabetic, CNS, GI, Derma, with one rank improvement in Gynaecology.
Over the past four-years the Consumer Health business has delivered double digits growth, playing a pivotal role across consumer centric brand portfolio. Key anchors for business have been focussed portfolio approach, premiumisation strategy and calibrated portfolio expansion including entry into new segments such as nutrition supplements with science based, differentiated offerings catering to evolving consumer needs.
CHC had delivered consistent growth trajectory across key brands supported by brand building initiatives, influencers campaigns and precision led digital media investments. These efforts have strengthened consumer engagement and enhanced brand salience and equity across target segments. In parallel CHC has strengthened its omnichannel presence with accelerated expansion across ecommerce and quick commerce which contribute > 20% complemented by deepening reach in 4,500 Modern Trade pharmacy chains. Distribution has been further augmented through direct distribution network covering approximately 75,000 chemist outlets for enhancing market access, availability, and activations.
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 & its Fixed Dose Combinations (FDC) and also with a wide range formulation for Semaglutide in the anti-diabetic segment. The Company has launched Semaglutide in both oral and injectable formulations. The launch expands the companys presence in metabolic disorders such as type-2 diabetes and obesity.
The Company has also launched Elobixibat, Linaclotide & Tegoprazan in GI therapy; Shelcal Total / CM and Prozuca in VMN; Tedibar Ceramax & Ega glow in Derma segment; Lactium Melatonin in CNS. Tedirex in Skin Infection & Denosumab in RA therapy. The launches have been identified in high potential segments.
JBCPLs top brands Cilacar, Metrogyl, Rantac and Nicardia would strengthen Torrents Chronic portfolio presence and help consolidate its ranking in therapy.
In the coming year, the Company will continue to focus on new launches driven by patent expiries, brand extensions and therapy gaps which will help to address the unmet patient needs.
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 field force strength including JB Pharma is now approximately 9300.
Stable market, high chronic led growth, differentiating products along with field force expansion have helped the Company 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 249 Bn (US$ 45 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 2025 was~2.3%. Given the economic situation, the interest rate in 2025 was 15% which is expected to be at 12.5% in 2026 and projected GDP growth is likely to be 1.5 to 2.2%. Tax reform entered its first phase in 2026, with a key milestone in 2027, when the transition from the current ICMS system to the new IBS/CBS model begins. The transition period between the two systems will run through 2032, when the new model is expected to be fully implemented.
Brazilian retail market continues to grow in units in 2025 and maintains a pace of 12.3% in value (excluding OTC). Approximately 67% of the retail market is driven by prescription products with mature promoted products growing at 6.2%, Patented (exclusive) products growing at 69.5% (Excluding GLP-1, patented products grew 4.5% in value) and Generics growing at 12%. On the non-retail front, the private market continues to register healthy growth of 16%. 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 2025-26, Brazilian operations registered a total revenue of BRL 817 Mn or ~Rs 1362 crores, registering constant currency growth of 12%. In the retail market, Torrent is ranked 19th in the Brazilian pharma market and 15th 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 Retail dataset). Currently, it has commercialized 33 branded generics and 27 generic products. Overall the Company has 58 products under approval at ANVISA and 19 new filings planned in the next 12 months.
Germany:
Medicine spending in Europe is expected to increase by US$ 85B over the next 5 years, from US$ 242 Bn in 2024 to US$ 327 Bn in 2029. CAGR from 2024 to 2029 is expected to be 4% to 8%.
Germany, where the Company has significant presence, Medicine spending is increased by 5.7 % is now valued over € 67 Bn and is expected to grow at a CAGR of 4% to 7% through 2029. 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 more than $20Bn in growth over the next five years. This growth is comparable to previous 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.
Sales from Germany operations during 2025-26 were Rs.1243 Cr (Euro 121 Mn), registering growth of 10% in INR (Euro degrowth 3%). The German tender market remains extremely competitive with annual price declines. We have been successful in these challenging circumstances through our efforts in improving productivity and cost competitiveness. Our portfolio currently covers 56% of the overall generics market and we expect the coverage to expand in the coming years. We launched five new products during the year
Among the generic players, the Company holds 5th position and is ranked No. 1 among Indian players in the German market.
USA:
United States remains the single largest pharmaceutical market worldwide and exerts outsized influence on global medicine spending and innovation. U.S. pharmaceutical revenues are projected to reach approximately USD 884 billion by 2030, supported by high levels of innovation adoption, strong specialty care infrastructure, and payer reliance on pharmaceuticals to address chronic and complex diseases.
Growth across therapeutic areas remains concentrated in oncology, immunology, and endocrinology. Within these areas, diabetes and obesity therapies have emerged as the fastest growing categories globally. GLP-1 receptor agonists and dual GLP-1/GIP therapies, originally developed for diabetes managements, are increasingly deployed for obesity and broader metabolic disease treatment, Global GLP-1 sales are projected to exceed $70 billion by 2026, with the United States accounting for more than half of global demand.
With innovation industrys product mix continues to evolve. Though small molecule drugs still account for more than half of total prescription volumes, biologics and specialty medicines represent a disproportionate share of revenue growth. Biosimilars are expanding rapidly across oncology, immunology, and inflammatory diseases, improving patient access while lowering system wide healthcare costs.
Tariffs on pharmaceuticals was a grave concern in 2025. Fortunately, as of now, generic pharmaceuticals are exempt, and we expect this to continue in 2026.
US Generic Pharmaceutical experienced 5.8% price deflation in 2025 and we expect similar deflationary pressures in 2026. Supply chain constrains arising out of Middle East Asia conflict, continued cost pressure and highly competitive landscape for new launches will continue to have impact on the business. However, such impact would be similar to other Generic players operating in this region.
ANDA filings have reduced in 2025 to 600 vs 740 in 2024, driven by higher ANDA filing fees and complexity of filings. The median approval timeline continues to be around 25-27 months.
The Company is ranked No.12 amongst the US generic Indian companies. Sales from the US business were US$ 151Mn during the financial year 2025-26.
The Company has filed 2 ANDAs during FY 2025-26. The Company has 124 ANDA approvals (including 3 tentative approvals) and its pipeline consists of 16 pending approvals and 21 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 Dahej Plant, located in Gujarat and for the Vizag API plant located at Andhra Pradesh. All four plants, which manufacture finished 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, Pithampur, Bileshwarpura and Baddi has valid EU approval as on date.
Research and Development
With a strong strategic focus on the development of generic as well as complex products, the Company has filed 19 dossiers across regulated markets. Torrent has received 24 approvals from regulated markets.
Torrent continues to maintain a strong footprint across all segments of domestic operations. During FY 2025-26, the Company received 8 product approvals in the domestic market.
Marking a significant milestone, Torrent launched Semaglutide, providing healthcare professionals with a comprehensive range of treatment options. Metabolic disorders, particularly Type 2 diabetes, represent one of the most pressing healthcare challenges in India. Torrents entry into the GLP-1 therapy segment underscores its commitment to widening access to advanced therapies at affordable prices, while supporting physicians in managing complex metabolic conditions.
Torrent Pharma also achieved a Day 1 launch of Brexpiprazole tablets in India for the treatment of acute schizophrenia. Brexpiprazole is a novel second generation antipsychotic (SGA) indicated for schizophrenia and as an adjunctive therapy for major depressive disorder (MDD). Further strengthening its differentiated portfolio, Torrent launched Indias first Prucalopride oral solution (Pruvict), offering greater dosing flexibility and ease of administration. Liquid formulations address patient convenience and psychological comfort, thereby enhancing adherence to therapy. In the cosmetic dermatology segment, differentiated products were introduced, including Ahaglow Liposomal, which leverages advanced liposomal technology to improve formulation performance and patient experience.
The current development pipeline reflects a broad and well balanced portfolio encompassing orphan drugs, NCE-1, first to file (FTF), injectables, and high value as well as high volume products. Selective incremental innovations have been incorporated to enhance patient convenience and compliance. To further strengthen its competitive positioning, the R&D function has expanded into biologics, with a key focus on the oncology segment.
To accelerate growth and support inorganic opportunities, due diligence activities for external development programs, particularly in complex generics and injectables, were stepped up during the year.
The Companys in house API manufacturing capability significantly supports the development of complex products, strengthens the API business, and enhances global scalability. To accelerate growth and support inorganic opportunities, due diligence activities for external development programs, particularly in complex generics and injectables, were stepped up during the year
Torrents in house Bio Evaluation (BE) Centre successfully cleared a US FDA inspection with zero Form 483 observations and has also received NABL accreditation valid until 2028. The Company is planning to expand BE Centre capacity to enable additional bioequivalence studies with enhanced analytical support, thereby minimizing regulatory risks during product approvals. Also, PE centre renewal received till Mar28 from ANVISA which will facilitate BR dossier filing with better compliance.
The R&D expenditure for the year amounted to C650 crore, representing approximately 5% of the Companys total revenue, reaffirming Torrent Pharmas sustained commitment to innovation and long-term growth.
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 underutilization 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 270012022 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 serialization, track and trace systems, hologram and barcodes. It helps to build a strong and reliable distribution network.
Geopolitical Risks
The Company operates in multiple geographies and is exposed to risks arising from geopolitical developments, international conflicts, trade restrictions, regulatory changes, and global economic uncertainties. Ongoing geopolitical tensions, regional conflicts, supply chain disruptions, changes in trade policies, and volatility in key shipping routes may adversely impact the availability and cost of raw materials and active pharmaceutical ingredients, logistics and freight costs, foreign exchange stability, and timely realization of receivables. Such events may disrupt operations, delay shipments, increase costs, and adversely affect business performance, cash flows, and growth. The Company seeks to mitigate these risks through continuous monitoring of global developments, diversification of sourcing and market exposure, securing receivables through Letters of Credit and Bank Guarantees, foreign currency hedging, contractual risk management measures, and by maintaining prudent exposure to higher-risk geographies.
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 2025-26 was 18,531 (without JB Pharma) against 17,312 at the end of financial year 2024-25, an increase of 1,219 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 2025-26 compared with 2024-25 Summary Financial Information:
| Particulars | 2025-26* | 2024-25 | ||
| Crores | % to Revenues | Crores | % to Revenues | |
| Sales and Operating Income (Revenues) | 13,980 | 100 | 11,516 | 100 |
Gross Profit |
10,592 | 76 | 8,740 | 76 |
Operating EBITDA |
4,559 | 33 | 3,721 | 32 |
| Forex (Gain) /Loss | 183 | 1 | 17 | 0 |
| Other (Income) | (51) | (0) | (20) | (0) |
| Depreciation / amortization | 1,119 | 8 | 795 | 7 |
| Net Interest expense / (Income) | 347 | 3 | 232 | 2 |
Profit before tax and exceptional items |
2,961 | 21 | 2,697 | 23 |
| Exceptional Items | 89 | 1 | 24 | 0 |
Profit before tax and after exceptional items |
2,872 | 20 | 2,673 | 23 |
| Income Tax | 734 | 5 | 762 | 6 |
Profit after Tax |
2,138 | 15 | 1,911 | 17 |
*2025-26 includes JBCPL financials from 21st Jan - 31st Mar, 2026
Financial Performance
The Company registered a revenue growth of 21% and Operating EBITDA growth of 23%. Operating EBITDA margins improved to 33% versus 32% in the previous year
Profit before Tax and exceptional items is 21% vs 23% in the previous year, mainly on account of higher depreciation & amortization and interest charges relating to acquisition of JB Pharma with effect from January 21,2026.
Exceptional item relates to acquisition and merger related cost.
Liquidity
Cash and cash equivalents including current investments and bank balances including fixed deposits was at Rs. 2,372 crores as on 31st March 2026 compared to Rs. 689 crores at the end of financial year ending 31st March -25.
Key Financial Ratios for 2025-26 compared with 2024-25
| Particulars | 2025-26 | 2024-25 |
Profitability ratios |
||
| (a) Operating profit margin | 33% | 32% |
| (b) Net profit margin (Refer Note 1) | 16% | 17% |
| (c) Return on net worth | 26% | 25% |
Working capital ratios (Refer Note 2) |
||
| (d) Debtors turnover (days) | 62 | 60 |
| (e) Inventory turnover (days) | 65 | 82 |
| (f) Trade Working Capital (days) | 70 | 90 |
Gearing ratios |
||
| (g) Interest coverage | 9.26 | 12.43 |
| (h) Debt / equity | 1.42 | 0.23 |
Liquidity ratios |
||
| (i) Current ratio | 1.17 | 1.36 |
Note:
1. Net profit margin is adjusted for exceptions items.
2. Working Capital ratio for the FY 2025-26 is calculated considering full year revenue of the Company and JB Pharma.
The ratios have been computed as follows:
• Operating profit margin: Revenues - (Cost of goods sold + employee benefits + other expenses) + (Other income-interest income) /Revenues
• Net profit margin: Profit after taxes / Revenues
• Return on net worth: Profit after tax attributable to owners of the Company / Net worth (Net worth = Share capital + Reserves and Surplus)
• Debtors days: (Trade receivables / Net Sales) * 365
• Inventory Days: (Inventory / Net Sales) * 365
• Trade Working Capital: (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) / 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 | |
| Ahmedabad | Executive Chairman |
| 22nd May 2026 | DIN: 00061903 |
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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2026, IIFL Capital Services Ltd. All Rights Reserved
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132 (Member ID - NSE: 10975 BSE: 179 MCX: 55995 NCDEX: 01249), DP SEBI Reg. No. IN-DP-185-2016, IA SEBI Regn. No: INA000000623, Merchant Banker SEBI Regn. No. INM000010940, RA SEBI Regn. No: INH000000248, BSE Enlistment Number (RA): 5016, AMFI-Registered Mutual Fund Distributor & SIF Distributor
ARN NO : 47791 (Date of initial registration – 17/02/2007; Current validity of ARN – 08/02/2027), PFRDA Reg. No. PoP 20092018, IRDAI Corporate Agent (Composite) : CA1099
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
