Venus Remedies Ltd Management Discussions

Global economy

Global economic recovery remained uneven during FY26 amid rising geopolitical tensions, inflationary pressures and evolving global trade dynamics. Rising energy and commodity prices, coupled with geopolitical supply disruptions, continued to influence input costs and business sentiment globally. Global inflation moderated but remained elevated at 4-5% by 2025 across several major economies.

The U.S. dollar has stayed strong against most currencies while many emerging-market currencies have weakened in 2025. Global trade grew modestly, with WTO forecasts indicating 2-3% growth for 2025. However, tariff-related developments and evolving trade restrictions across major economies are expected to influence global trade momentum going forward.

Global freight and logistics conditions improved compared with earlier disruptions, although shipping costs remained above pre-pandemic levels. Geopolitical tensions in the Red Sea region significantly impacted container shipping rates, which rose nearly 115% above historical baseline levels at peak disruption periods, adding 0.6% to global CPI. While freight pressures have eased gradually, shipping volatility, insurance costs, and supply-chain risks continue to remain important considerations for globally operating businesses.

At the same time, global companies increasingly diversified their sourcing and manufacturing operations beyond China under the "China+1" strategy to strengthen supply-chain resilience and reduce concentration risks. This continued to create opportunities for alternative manufacturing destinations such as India across pharmaceuticals and other industries.

After a post-pandemic boom, consumer demand for healthcare is stabilising. Ageing populations in the U.S./EU and strong public health programmes in Asia/Middle East underpin steady demand for essential medicines. The IMF notes that technological investments and fiscal support are boosting activity.

Key international markets

GCC economies continued to benefit from strong government spending, infrastructure diversification and non-oil sector expansion, supporting higher business activity and import demand across healthcare, manufacturing, and industrial sectors. ASEAN remained one of the fastest-growing economic regions globally, driven by rising domestic consumption, manufacturing investments and increasing regional trade integration.

Meanwhile, Europe and the UK witnessed gradual economic stabilisation supported by moderating inflation, improving energy security, and easing supply-chain pressures, resulting in improved trade sentiment and stronger cross-border commercial activity during the year.

Outlook

The global economy is expected to witness steady growth momentum over the medium term, supported by easing inflationary pressures, improving trade activity, stabilising supply chains and resilient consumer demand across major economies. Emerging markets are expected to remain key growth drivers, while developed economies are likely to benefit from gradual monetary easing and improving business sentiment. Continued investments in infrastructure, manufacturing, healthcare, technology and energy transition across regions are expected to strengthen global economic activity and support long-term international trade and investment flows.

Despite global geopolitical uncertainties and evolving trade realignments, the country maintained strong economic momentum backed by policy continuity, rising industrial activity and improving business confidence. Indias GDP growth remained robust at 6.5% during FY25, reinforcing its position among the fastest-growing major economies globally.

Inflationary pressures moderated significantly during the year, with retail inflation easing to 3.16% in April 2025— the lowest year-on-year inflation rate since July 2019— supported by favourable food prices, stable commodity trends, and calibrated policy measures. Indias external sector also remained resilient, with the current account deficit narrowing to 0.2% of GDP in Q1 FY26, supported by healthy foreign exchange reserves and stable capital inflows, which helped maintain relative currency stability amid global volatility.

The country continued to witness healthy growth in exports, improving manufacturing activity and sustained investment momentum, supported by government-led infrastructure development and industrial expansion initiatives. At the same time, foreign direct investment inflows remained robust, reflecting continued global confidence in Indias long-term economic and manufacturing potential.

Building Indias manufacturing strength

Continued government focus on logistics enhancement, industrial corridors, and domestic manufacturing strengthened Indias position as a reliable production and export hub. Investments across roads, ports, railways and digital infrastructure improved operational efficiency and supply-chain connectivity across industries.

For export-oriented companies, whose manufacturing operations are entirely India-based, the countrys stable policy environment, improving infrastructure ecosystem and growing global manufacturing relevance continued to create a supportive long-term operating environment.

Outlook

Indias economic outlook remains strong, with real GDP growth for FY27 projected at 6.8-7.2% supported by resilient domestic consumption, rising infrastructure investments and sustained manufacturing activity. Expanding infrastructure capabilities, improving manufacturing competitiveness and increasing global economic integration are expected to further strengthen the countrys long-term growth trajectory and export potential.

Global pharmaceutical sector

Global pharma market size and expected CAGR

The global pharmaceutical market was estimated at approximately USD 1.73-1.88 trillion in FY26 and is projected to reach USD 2.7-3.5 trillion by 2033-2035, based on different industry estimates. Generic medicines continued gaining significant traction globally due to increasing healthcare cost optimisation measures and rising demand for affordable treatment solutions.

Emerging markets across GCC, ASEAN, Africa, Latin America and CIS regions continued witnessing improving healthcare accessibility, rising government healthcare investments and expanding healthcare infrastructure. Increasing focus on affordable healthcare delivery, healthcare localisation and medical infrastructure development across these regions continued supporting long-term pharmaceutical demand and international business opportunities.

Cost pressures & Margin environment

The pharmaceutical industry continued to operate in a dynamic cost environment influenced by API price volatility, currency fluctuations, energy prices and evolving sourcing strategies. Dependence on geographically concentrated API supply chains continued to expose the industry to procurement and pricing fluctuations during periods of geopolitical uncertainty.

Freight and logistics conditions gradually stabilised during the year compared with earlier global disruptions, supporting improved inventory planning and operational efficiency. However, currency movements and energy price fluctuations continued to influence export competitiveness, procurement economics and overall margin profiles across the pharmaceutical value chain.

Innovation and R&D

Pharmaceutical companies globally increased investments in differentiated products, specialty therapies, complex generics and advanced drug delivery systems to address evolving treatment requirements and strengthen therapeutic positioning.

The oncology segment particularly witnessed strong innovation momentum through targeted therapies, immunotherapies, biosimilars and precision medicine advancements, while critical care therapeutics continued benefiting from growing ICU infrastructure, emergency care demand and hospital-based treatment expansion.

Regulatory & Compliance focus

Global pharmaceutical markets continued to witness increasing focus on compliance with globally recognised standards and certifications such as EU-GMP, WHO-GMP and other international regulatory approvals. These approvals remained critical for enhancing market access, strengthening customer confidence and supporting long-term business sustainability.

The U.S. market

The United States remains the worlds largest pharmaceutical market, driven by high healthcare spending, innovation in specialty drugs, biologics and strong demand for oncology and chronic disease therapies.

Market size: Valued at approximately USD 520-721 billion in 2025, with 2026 estimates ranging from USD 553-766 billion.

Projected growth: The market is expected to reach USD 963-1,305 billion by 2035, growing at a CAGR of 6.1-6.37%.

Key highlights: z Strong growth in specialty and injectable segments (oncology, immunology) z Generics hold high volume share (>90% in many categories), supporting cost containment

The European market

Europe is the second-largest pharmaceutical market globally, characterised by strong regulatory standards (EMA), universal healthcare systems and growing demand for generics and specialty therapies. Market size: Valued at approximately USD 514-578 billion in 2025, expected to reach USD 616 billion in 2026.

Projected growth: Anticipated to reach USD 808-1,033 billion by 2033-2034, at a CAGR of 5.9-6.67%.

Key highlights: z Significant focus on biosimilars, specialty generics and injectable formulations (injectables hold dominant share in specialty segments) z Ageing population and chronic disease burden drive oncology and hospital-based therapies z Strong emphasis on cost control through generics adoption

Global injectable market

Injectable formulations continued gaining preference due to their faster therapeutic efficacy, precision dosing, improved bioavailability and increasing application across oncology, anti-infectives, intensive care and emergency treatments. Hospital-based therapies and specialised injectable products also continued to witness strong demand across regulated and semi-regulated markets globally.

Sterile injectables: The global sterile injectable drugs market is witnessing steady growth, driven by the rising prevalence of chronic diseases and expanding oncology treatments. Sterile injectables are widely preferred for their rapid therapeutic action and effectiveness in critical care and complex treatments.

According to Mordor Intelligence, the market is projected to grow at a CAGR of 7.45% during 2026-2031, supported by advancements in aseptic manufacturing, rising healthcare investments, growing adoption of generic injectables and increasing outsourcing to specialised manufacturing partners. North America remains a dominant market, while Asia-Pacific is emerging as a key growth region.

Indias growing strength in injectables manufacturing

Indias sterile injectable market is a booming global powerhouse, valued at roughly USD 3 billion (over H25,000 Crore) and projected to reach USD 7.6 billion by 2033. Driven by rising global healthcare costs and a massive shift toward biologics, India serves as the worlds premier contract manufacturing hub for critical care and generic injectables.

Rising global outsourcing toward India: Pharma companies worldwide are shifting sterile injectable contract manufacturing to India for cost efficiency and capacity. The sterile injectable CMO market is growing strongly, with India playing a key role in fill-finish and complex formulations.

Expansion of injectable manufacturing capacities: Major players are expanding sterile fill-finish lines. India benefits from large-scale infrastructure in Gujarat, Maharashtra and other hubs. Sterile injectables benefit from high barriers, making them attractive for differentiated generics and complex products.

Oncology therapeutics growth in India

Oncology continued to emerge as one of the fastest-growing segments within the Indian pharmaceutical industry, driven by rising cancer incidence, improving treatment accessibility and expanding oncology infrastructure. According to ICMR, India recorded nearly 1.46 million cancer cases in 2022, with almost one in nine Indians likely to develop cancer during their lifetime. The growth is driven by ageing populations, lifestyle changes and increasing disease awareness. Increasing expansion of specialised cancer hospitals, government healthcare schemes and broader treatment accessibility also accelerated demand for affordable oncology medicines and injectable cancer therapies.

Growth in Oncology Drug Demand: The India oncology market was valued at USD 6.21-11.73 billion in 2025, projected to grow at 10.45-20% CAGR in various segments through 2030-2034.

Rising Use of Injectable Oncology Therapies: Injectables (chemotherapy, targeted therapies, supportive care) dominate hospital-based oncology treatment due to bio-availability and acute needs. Generic oncology injectables see strong demand.

Government policy support

The Government of India continued strengthening the domestic pharmaceutical ecosystem through initiatives such as the Production Linked Incentive (PLI) Scheme, API self-reliance programmes and "Make in India," aimed at enhancing manufacturing competitiveness, reducing import dependency and strengthening supply-chain resilience.

At the same time, increasing healthcare investments and policy-driven healthcare expansion continued to improve treatment accessibility across the country. Government initiatives such as Ayushman Bharat, PM-ABHIM and the National Cancer Grid supported expansion of diagnostics, oncology infrastructure and affordable treatment availability, particularly across Tier 2 and Tier 3 cities.

Key growth drivers z Rising healthcare spending & accessibility: Increasing healthcare expenditure, expanding insurance coverage and improving healthcare accessibility continued to support pharmaceutical demand across India z Growth in Injectables & Speciality formulations: Demand for injectable and speciality formulations witnessed strong growth driven by rising hospitalisation, critical care requirements, oncology treatments and adoption of complex therapies z Increasing demand for Complex generics & Affordable medicines:

Rising chronic disease burden, wider healthcare penetration and growing focus on cost-effective treatment solutions accelerated demand for affordable medicines and complex generics z Expansion of Hospital-based & Critical care therapies: Expansion of tertiary healthcare infrastructure, ICU facilities, and emergency care services continued driving demand for anti-infectives, hospital-administered therapies and critical care formulations z Strengthening ICU & Healthcare infrastructure: ICU beds in government hospitals increased from approximately 27,360 in 2019 to over 36,000 in 2023, supported by continued expansion under national healthcare missions z Domestic manufacturing & Supply-chain strengthening: Focus on domestic manufacturing, API self-reliance and globally compliant production capabilities continued supporting export competitiveness and supply-chain resilience across the pharmaceutical sector

FY26 was the year VMRCs science moved from the laboratory into the clinic. The Companys lead anti-infective candidate, VRP-034, received CDSCO approval for its Phase 1 clinical study. A second candidate, VRP-048, completed preclinical development. Gene-editing delivery achieved proof-of-concept. Two studies were published in JAC-Antimicrobial Resistance. And PLEA Trust, Venuss AMR advocacy platform, joined the WHO-UN Multi-Stakeholder Partnership Platform.

The year also marked VMRCs twentieth anniversary. Over two decades, the Centre has grown into an integrated, multidisciplinary research organisation spanning 17 functional areas across the full bench-to-bedside lifecycle: from formulation science and molecular biology to clinical development, regulatory affairs and commercialisation support.

The clinical milestone: VRP-034

VRP-034 is built on Venuss proprietary Renal Guard Technology (RGT). The platform addresses a critical unmet need: polymyxin B, one of the last-resort antibiotics against severe resistant infections, causes kidney damage that limits its clinical use. RGT reformulates the drug to preserve antibacterial efficacy while reducing nephrotoxicity.

CDSCO approval for VRP-034s Phase 1 study was VMRCs defining achievement of FY26. All trial-readiness activities were completed by March 31, 2026: protocol finalisation, site preparation, regulatory submissions and clinical partner coordination. Patient dosing begins Q1 FY27.

VRP-034 holds the U.S. FDA Qualified Infectious Disease Product (QIDP) designation, with patents filed in 88+ countries and granted in 15. The molecule received the Aegis Graham Bell Award in the Life Sciences category during FY26, presented by Smt. Anupriya Patel, Honble Union Minister of State for Health and Family Welfare, Government of India.

Emerging research: Exosomes & Gene-editing delivery

Exosome research & Manufacturing

Exosomes are natural particles released by cells to carry biological material. They are among the most sought-after ingredients in advanced medicine, valued for their potential as drug-delivery vehicles, diagnostic agents and therapeutic agents. Global supply is limited and there is currently no domestic manufacturing capability in India.

Building on more than two years of CRISPR and gene-editing work and the Companys experience operating bioreactors for anti-infective research, VMRC has begun isolating, purifying and studying exosomes, with a longer-term goal of establishing manufacturing capability.

Advanced gene-editing delivery

Having achieved proof of concept with engineered bacteriophage delivery of CRISPR constructs, the next stage is to test bacteriophages and other carriers, including exosomes, for delivering gene-editing payloads in living systems. This delivery work marks the direction VMRC intends to pursue, extending translational research into the intersection of synthetic biology, gene therapy and anti-infective science.

Institutional business: three tiers of growth

Indias healthcare spending continues to accelerate. The Ministry of Health and Family Welfare budget rose significantly. Ayushman Bharat (AB PMJAY) funding grew to H9,500 Crore (up from H7,300 Crore). The Jan Aushadhi network expanded to 15,000+ Kendras, contributing cumulative consumer savings of around 50-90% of their medical expenses. This structural increase in government healthcare investment is the tailwind behind Venuss institutional growth.

Venus operates across three distinct institutional channels, each with different economics, timelines and strategic importance. This tiered approach allows the Company to pursue institutional growth without sacrificing margins.

Tier 1: Large government tenders

The first tier comprises large government tenders: all-India programmes, state health missions and autonomous institutions such as AIIMS, SMS Jaipur and TNMSC. These tenders are high-volume, price-sensitive and require 6 to 12 months from quote to order execution. The Company participates only where specification alignment is strong, pricing dynamics protect margins and supply chain reliability is achievable. FY26 saw Venus initiate business with five major hospitals, including AIIMS Gorakhpur and SMS Jaipur.

Tier 2: Emerging government channels

The second tier comprises key government healthcare channels, including ESI hospitals, CGHS, DGAFMS and Railway hospitals. These channels remain an important part of the Companys institutional strategy, supported by continued expansion in participation and deeper engagement across government healthcare programmes.

FY26 marked significant progress in the ESI segment, with two Venus formulations approved under the programme and supplies reaching 74 ESI hospitals across the country. The Company continues to strengthen its presence across these institutional channels as healthcare access and public spending expand.

Tier 3: Private institutional networks

The third tier is private institutional networks: tertiary care chains, specialty hospitals and nursing homes. Margins are higher, procurement cycles are faster and clinical conviction drives decision-making. Venuss research-led portfolio is particularly valuable in this channel. The Companys products are now used in more than 500 tertiary care centres across India, including premier government institutions.

The three-tier strategy balances scale, reach and profitability. Government tenders provide volume, emerging channels open new opportunities and private institutions strengthen the overall revenue mix. This diversified approach enhances the resilience and long-term growth potential of the institutional business.

Tender pipeline: FY27 visibility

The order book and tender pipeline is expected to remain strong. Results are awaited on tenders quoted in FY26. Major tenders from TNMSC (Tamil Nadu), GMSCL (Gujarat), AIIMS Delhi and DGAFMS (Defence) are in the pipeline.

Commercial execution

DAVAI: fully digital field sales

More than 90% of Venuss domestic field sales now run fully digitally through the DAVAI platform. The Global Critical Care team has entirely transitioned to e-detailing, replacing paper-based engagement with real-time digital interaction with clinicians. The shift has delivered real-time visibility into field effectiveness, digital route planning, data-driven campaign management and full accountability for every call and prescriber engagement.

From a supply perspective, DAVAI has extended reach into Tier 3 towns and digitised order execution entirely. Order-to-fulfilment time has fallen to under 24 hours. Reconciliations are handled automatically through native integration with the Companys ERP. The technology architecture behind DAVAI is detailed in the Information Technology section of this report.

Prescriber base and field force

Supported by live data, the Global Critical Care field team plans routes, schedules calls and executes marketing campaigns with greater visibility and responsiveness, strengthening execution across priority therapy areas This technology-enabled approach enhances field effectiveness while supporting stronger engagement with clinicians across the Companys hospital-focused portfolio.

Geographic reach

Venus Remedies has established a pan-India domestic presence, while its Institutional Market Division currently operates across 21 states, continuing to expand its reach through government and institutional healthcare channels. The DAVAI platform has been central to Tier 3 town penetration, reaching smaller nursing homes and specialty hospitals that traditional wholesale distribution finds difficult to serve. The ambition to achieve full state coverage remains a multi-year objective, with priority given to states with large AIIMS networks, expanding government healthcare infrastructure and growing private tertiary care presence. Full state coverage is expected by FY28.

The FY25 Annual Report outlined plans to enter the Nepalese market with Methylprednisolone Sodium Succinate Injection, Sulbactam Injection and

Ceftazidime + Avibactam Injection. During FY26, Methylprednisolone Sodium Succinate Injection was successfully launched in Nepal, while Sulbactam Injection and Ceftazidime + Avibactam Injection continue to progress through the regulatory registration process.

Profitability & Commercial discipline

The international business shifted from volume-led to margin-led execution during FY26. This was a deliberate choice. In an environment of global pricing pressure, tender competition and input cost inflation, Venus prioritised sustainable margin expansion over undifferentiated scale.

Every new commercial opportunity was evaluated against defined profitability thresholds, ensuring disciplined capital allocation and sustainable margin expansion. Revenue from private markets continued to increase, supported by stronger pricing flexibility and expanding commercial presence across Asia and Africa. High-value therapies continued to account for an increasing share of the international portfolio, reflecting the Companys focus on differentiated products with stronger margin potential.

Gross contribution targeting: The Company set a gross contribution floor for new commercial commitments, filtering opportunities by margin quality rather than volume alone.

Tender selectivity: Venus applied profitability filters to tender participation, declining opportunities where pricing dynamics would erode margins below acceptable thresholds. Tender participation remained selective, with commercial decisions increasingly guided by profitability rather than volume.

Private market expansion: The shift toward private healthcare channels in Asia and Africa provided greater pricing flexibility and reduced exposure to institutional tender volatility. Expansion into private healthcare markets further strengthened pricing discipline while reducing dependence on highly competitive institutional tenders.

Portfolio rationalisation: Low-margin commodity products were selectively deprioritised. The portfolio continued to be streamlined by selectively deprioritising lower-margin products in favour of differentiated therapies with greater long-term value.

Navigating a complex operating environment

Supply Chain Resilience

The international operating environment in FY26 was marked by geopolitical tensions, freight cost volatility, logistics disruptions and sharp increases in specialty API costs. Platinum-compound-linked products were particularly affected, with input cost inflation impacting margins on contracts where pricing had already been committed. Venus responded by diversifying API sourcing, improving supply chain planning and selectively participating in commercial activities. Where pricing commitments could not absorb increases in input costs, the Company de-prioritised affected contracts in favour of margin-accretive alternatives. Freight cost management improved over FY25 through better logistics planning, though the global environment remains volatile.

Digital commercial intelligence

FY26 marked the beginning of a shift toward digitally enabled commercial decision-making across the international business. AI-assisted tools are now used in pricing, tender bid evaluation and gross contribution modelling. Real-time dashboards track contribution, profitability and launch velocity across territories. These capabilities are at an early stage. Human judgement and commercial experience remain central to every decision. The tools improve the quality and speed of the data available to the decision-makers. Over time, as the models strengthen, the balance between analytical input and human judgement will evolve.

Strategic partnerships

Venus Remedies international model is partnership-led. The Company works through local partners and representative models across its markets, with direct commercial capabilities concentrated in regions where proximity is essential for tender execution and institutional engagement.

In FY26, the focus remained on expanding product portfolios with existing partners rather than onboarding new partners at scale. This approach deepens per-partner revenue, strengthens institutional relevance and avoids the longer lead times associated with developing new partnerships. Portfolio expansion with existing partners contributed international revenue growth during the year.

Institutional engagement continued through WHO-linked procurement, UNICEF programme partnerships and PAHO market participation.

Outlook

Having consistently grown its international business, Venus Remedies is now targeting a sustainable annual growth. This ambition is grounded in four concrete levers.

First, deeper penetration in existing markets through expanded product portfolios and increased wallet share with current partners.

Second, selective entry into new geographies where Venus holds regulatory approvals and commercial readiness.

Third, continued activation of dormant marketing authorisations in FY27. Fourth, increased revenue share from high-value therapies and private market channels.

Venus Remedies is strategically positioned to drive accelerated international growth through an integrated framework that combines therapeutic excellence, regulatory capital activation, disciplined profitability execution and digitally enabled commercial intelligence.