Tyche Industries Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

GLOBAL PHARMACEUTICAL SCENARIO

Global health systems have demonstrated remarkable resilience amid the challenges of the pandemic, global inflation, and regional conflicts, while advancing the adoption of novel therapies and expanding overall usage. Medicine consumption and spending have surpassed pre-pandemic growth rates and are projected to remain significantly above those trends through 2028. Global medicine spending, the amount spent purchasing medicines from manufacturers before off-invoice discounts and rebates, is expected to reach US$ 2.3 Trillion by 2028 - growth rate of 6-9% per year. Key drivers of growth through the forecast period include the contribution of new products and the impact of patent expiries, including the growing impact of biosimilars. Higher adoption of speciality medicines for treating chronic, complex or rare conditions in the developed markets and volume-driven growth in the pharmerging markets would also be key pillars of growth.

By 2028, the highest-spending therapy areas are projected to be oncology, immunology, diabetes, cardiovascular, and neurology. Oncology is expected to grow 14-17% CAGR, driven by the continuous introduction of novel cancer treatments. Immunology is expected to grow slowly at a more moderate 2-5% CAGR due to the launch of biosimilars. Diabetes is expected to be the third largest therapy area globally, with growth estimated to be 3-6% over the next five years. Most other therapy areas are expected to grow in low to mid-single digits through 2028 except for mental health, forecasted to grow at 9-12%, driven by anxiety/ depression innovation; obesity is growing 24-27% as highly effective treatments have become available and are expected to gain wider usage across many countries

Growth Across Key Markets:

Global medicine spending is projected to grow at 6-9% CAGR through 2028 to reach about US$ 2.3 Trillion. Developed market spendings are expected to grow at a 5-8% CAGR, driven by new products and increased adoption of existing branded medicines and offset by patent expiries. Meanwhile, pharmerging markets are set to grow at a faster pace of 10- 13% CAGR, fuelled by increased per capita medicine usage and the adoption of new medicines, with strong momentum in Latin America, Eastern Europe, and parts of Asia.

North America:

Medicine spending in North America, the worlds largest pharmaceutical market by size, is expected to grow at a 6-9% rate through 2028 to cross US$ 1 Trillion, driven by the continued growth of both new and older brands and offset by losses of exclusivity.

Europe:

Medicine spending in the top five European markets is projected to grow at 5-6% CAGR driven by a combination of expiry events and payer pressure partly offset by the wider use of novel medicines. Japan:

Japan medicine spending growth is projected at -2 to 1% through 2028 as robust brand growth is offset by a shift in annual price cuts and ongoing moves to generics.

China:

Spending growth in China is expected to slow down to 2-5% CAGR, with positives driven by greater uptake and use of new original medicines and offset by pressures on off-patent and generic pricing.

India:

Medicine spending in India is expected to grow at 7-10% CAGR, mainly driven by volume growth on the back of increased consumption of medicines and the launch of new molecules in India.

GLOBAL API INDUSTRY OVERVIEW:

Active Pharmaceutical Ingredients (APIs) remain foundational to the pharmaceutical value chain. Propelled by the growing global demand for pharmaceutical drugs and advances in process innovation, the global API market reached ~US$255 billion in 2024, reflecting rising production volumes coupled with operational efficiency. Innovations in synthetic methodologies have enhanced efficiency, ensuring compliance with stringent regulatory standards and reducing production costs (Grand View Research). Tyche Industries continues to leverage its state-of- the art manufacturing capabilities to meet global demand with consistent quality and reliability

Market growth and numbers:

The API industry experienced robust growth in both volume and value and is expected to expand at a CaGr of ~6% from 2025 to 2030 (Grand View Research)

DOMESTIC PHARMACEUTICAL MARKET

Market overview

Indias pharmaceutical industry continues to solidify its position as a global powerhouse, with strong leadership in generic medicines and API production. India uniquely offers end-to-end support with capacity, capability, and cost advantages to global clients. In FY 2024-25, India demonstrated robust growth driven by cost-effective manufacturing, expansive R&D capabilities, and favourable government initiatives. Tyche Industries Limited, as a leading API manufacturer, has significantly contributed to enhancing Indias global export performance

Key points:

Market growth and size:

The Indian pharmaceutical industry is the 3rd largest pharmaceutical manufacturing country, in terms of volume. The nation is also the largest supplier of generic pharmaceuticals in the world, accounting for 20% of worldwide supply. Furthermore, Indian pharmaceutical firms are extremely cost-effective and offers excellent efficacy, all of which has helped the country to become the ‘Pharmacy of the World. According to Department of Pharmaceuticals (DoP),The Indian pharmaceutical market is now valued at $50 billion and by FY 2024-25 The domestic market is projected to more than double, reaching US$130 billion by 2030, thereby increasing Indias global market share from the current 3% to nearly 5% by 2030. Furthermore, the market is expected to approach US$450 billion by 2047 (Bain & Company, IPA, Pharmexcil).

Global leadership and export dynamics:

India exported ~US$30 billion worth of pharmaceuticals in FY2025, marking an increase of over 9% from the previous years ~US$27 billion. Notably, these exports fulfil ~40% of the US generic demand and ~25% of all UK prescriptions, underscoring Indias status as a major global manufacturing hub (Pharmexcil, IBEF).

Generics:

Indian generics represent 20% of the global supply by volume and have become a critical pharmaceutical lifeline (IBEF).

API sector:

APIs are a major export category and serve as key enablers for vertical integration across the industry. Indias API exports are projected to expand from nearly US$5 billion in 2023 to reach US$12 billion by 2030, growing at a 14% CAGR during this period. The API exports are further poised to reach US$80-90 billion with a 12% CAGR from 2030 to 2047, matching Chinas expected penetration by 2047 (Bain & Company Report; Pharmexcil 2023 Data).

Healthcare expenditure & government initiatives:

Increased public and private healthcare spending, along with progressive regulatory reforms, has fuelled continued sector growth, accelerating the move toward a more self-reliant and value-added pharmaceutical economy (IBEF)

Investments and Recent Developments

The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 per cent under the automatic route for manufacturing of medical devices subject to certain conditions. The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 15.93 billion between April 2000 and December 2019, according to data released by the Department for Promotion of Industry and Internal Trade (DPIIT).

INDUSTRY FUTURE

Medicine spending in India is projected to grow 7-10% CAGR mainly driven by volume growth on the back of increased consumption of medicines and the launch of new molecules in India over the next five years, leading India to become one of the top 10 countries in terms of medicine spending. Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise. The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.

COMPANY PERSPECTIVE

TYCHE INDUSTRIES LTD (TIL) has developed good reputation as a quality and reliable manufacturer and exporter of APIs, Intermediates and Nutraceuticals, the company expects to develop adequate revenues from these segments in future. TIL is one of the largest manufacturers in India of Glucosamine Hydrochloride and corresponding sodium and potassium salts which are mainly exported to USA and Europe.

The overseas Regulatory approvals facilitated entry of the Company into the overseas advanced regulatory markets. The company has obtained US FDA recognition for its facilities in Kakinada, and the company has already obtained EU- GMP certification. The company is in the process of filings for more ANDAs in the coming future.

SEGMENTWISE OR PRODUCTIONWISE PERFORMANCE

Companys operations are predominantly related to the manufacture of bulk drugs intermediates, as such there is only one primary reportable segment.

COMPANYS FINANCIAL PERFORMANCE AND ANALYSIS

The Companys financial performance and analysis is already discussed in the Directors Report which forms a part of the Annual Report.

FUTURE OUTLOOK

The company has been manufacturing its core products for several years and has built up a steady clientele. The company has plans to introduce newer products after careful market study. The management always strives to introduce new products which it hopes will contribute to the top line and bottom line in the ensuing years by expanding its marketing network to new areas countries in Africa, Europe, Israel, and Middle East.

RISKS AND CONCERNS

Any business activity is confronted with various risks and an efficient business concern would take cognizance of the various risks and arrange for taking corrective actions to mitigate the risks.

Some of the risks are listed below along with the suggested actions for mitigation.

1. COMPETITION:

The competition is mainly from some of the suppliers in India and more so from Global market including Chinese suppliers. To preserve its market share, the company has embarked on aggressive programme to improve the cost efficiency of processes and production of key products vis- a- vis increase in input cost of raw materials, power, labour etc.

2. MARKETING:

Constant efforts are being made to expand the product portfolio and diversify the market into new countries in Africa and Europe, increasing the number of customers and introducing newer products by continuous research and development. The company is also focussing on obtaining regulatory approvals and entering into new markets.

3. EXCHANGE RATE:

High volatility in the foreign currency is a big concern for the company as most of the raw materials are imported/imported products are used by the company. Further as most of the major customers are from outside India the company also faces exchange rate variation

on its receivables, Finance Department is constantly monitoring the situation and taking action against major fluctuations as per the exchange rate movements.

4. RESEARCH AND DEVELOPMENT:

The company faces challenges on rolling out new and improved products, Research and development is a key to success of the unit and hence management takes steps to improve the strength of the R&D team continuously in order to face competition.

5. ENVIRONMENTAL MANAGEMENT:

The company is very much aware of its responsibilities towards environment and commissioned the Multiple Effect Evaporation System to concentrate and collect the solid effluent and send it for incineration to government approved agency.

INTERNAL CONTROLS:

Tyche Industries Limited has proper and adequate internal control system commensurate with the size and complexity of the organization and a well-defined internal control system which is adequately monitored. Checks and balances and control systems have been established to ensure that assets are safe guarded, utilized with proper authorization and recorded in the books of account. There is a proper definition of roles and responsibilities across the organization to ensure information flow and monitoring. An Internal Audit was conducted in various areas of operations of the Company. The Management duly considered and takes appropriate action on recommendations made by the Statutory Auditors, Cost Auditors, Internal Auditors and The Independent Audit Committee of the Board of Directors. The Company has an Audit Committee consisting of three directors out of which two are the Independent Directors. This Committee reviews the statutory audit reports, the quarterly and annual financial statements and discusses all significant audit observations and follow up actions arising from them.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

		Rs. In Lakhs
Particulars	FY 2024-25	FY 2023-24
Revenue From Operations	6547.13	6950.97
Other Income	741.52	592.37
Total Revenue	7288.65	7543.34
Profit/(Loss) before Tax	1671.39	1662.86
Current Tax	439.24	445.90
Deferred Tax Assets/ (Liabilities) Net	(8.58)	(7.33)
Profit/(Loss) After Tax	1240.72	1224.29
Earnings per Share (Basic & Diluted)	12.19	11.78

HUMAN RESOURCES/INDUSTRIAL RELATIONS:

The Company recognizes the immense value addition made by its employees to the growth and development. In turn, the Company is committed to train and develop its people and motivates them to enhance their potential and industrial relations have been cordial and mutually beneficial. As on March 31,2024 the Company had about 164 employees.

KEY FINANCIAL RATIOS:

Key financial parameters as on 31st March 2025 on the basis of Standalone Financials for the year ending 31st March 2025 & 31st March 2024 respectively are as follows:

Particulars	FY 2024-25	FY 2023-24
Debtors Turnover	3.61	3.37
Inventory Turnover	1.91	1.91
Interest Coverage Ratio*	NA	NA
Current Ratio	12.57	16.92
Debt Equity Ratio	NIL	NIL
Operating Profit Margin	25.52%	23.92
Net Profit Margin	19.07%	16.00%

*Company doesnt have any interest liability.

During the year, the return on Net Worth of the Company is 17.58% as compared to the previous financial year 16.35%.

CAUTIONARY STATEMENT:

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by Securities and Exchange Board of India (SEBI), Generally Accepted Accounting Principles in India and Accounting Standards/Ind AS issued by The Institute of Chartered Accountants of India (ICAI).

Our management accepts responsibility for the integrity and objectivity of the financial statements as well as for various estimates and judgments used therein. The judgments relating to the financial statements have been made on a prudent and reasonable basis so that the financial statements reflect in a true and fair view of the state of affairs of the Company.

Readers are advised to kindly note that the above discussion contains statements about risks, concerns, opportunities, etc., which are valid only at the time of making the statements. A variety of factors known/unknown expected or otherwise may influence the financial results. These statements are not expected to be updated or revised to take care of any changes in the underlying presumptions. Readers may therefore appreciate the context in which these statements are made before making use of the same.