Vivo Bio Tech Ltd Management Discussions

Global Economy

Overview: The global economy remained resilient during 2025 despite persistent trade-policy uncertainty, geopolitical tensions and uneven activity across regions. According to the IMFs July 2026 World Economic Outlook Update, global growth was estimated at 3.5% in 2025 and is projected at 3.0% in 2026. The outlook continues to be shaped by the interaction of higher energy costs and geopolitical risks with strong technology-related investment, particularly in artificial intelligence and advanced technology value chains.

Global headline inflation continued to moderate during 2025, although the pace of disinflation has slowed in 2026. The IMF estimates global inflation at 4.1 % in 2025 and projects it at 4.7% in 2026. Monetary-policy easing in several economies has provided support to activity, while trade restrictions and geopolitical developments continue to present downside risks.

Regional growth (%)	2026 (P)	2025 (E)	2024
World output	3.0	3.5	3.2
Advanced economies	1.7	1.9	1.7
Emerging and developing economies	3.8	4.5	4.2

(Source: IMF, World Economic Outlook Update, July2026)

Performance of The Major Economies, 2025

• United States: Reported GDP growth of 2.1% in 2025 compared to 2.8% in 2024 and is projected at 2.3% in 2026.

• China: GDP growth was 5.0% in 2025 as it was in 2024 and is projected at 4.6% in 2026

• United Kingdom: GDP growth was 1.4% in 2025 compared to 1.0% in 2024 and is projected at 1.0% in 2026.

• Japan: GDP growth was 1.1% in 2025 compared with -0.2% in 2024 and is projected at 0.6% in 2026.

• Germany: GDP growth was 0.2% in 2025 compared with -0.5% in 2024 and is projected at 0.7% in 2026.

(Source: IMF, World Economic Outlook Update, July2026)

Outlook: The global outlook for 2026 remains subject to elevated uncertainty. The IMFs July 2026 update projects global growth at 3.0% in 2026, followed by a recovery to 3.4% in 2027. Higher energy prices associated with the Middle East conflict, renewed geopolitical tensions and financial-market repricing remain key downside risks. At the same time, technology-led investment and productivity gains, particularly around artificial intelligence, are expected to provide an important offset to the drag from the energy shock and trade-policy uncertainty.

Indian Economy Overview

India remained one of the fastest-growing major economies during FY 2025-26. Under the revised national accounts series with FY 2022-23 as the base year, real GDP grew by 7.7% in FY 2025-26, compared with 7.1% in FY 2024-25. Nominal GDP increased to ^345.47 lakh crore in FY 2025-26 on the second advance estimates and was subsequently estimated at ^347.51 lakh crore in the provisional estimates. Real GVA grew by 7.9% in FY 2025-26, compared with 7.3% in FY 2024-25. The performance reflected broad-based expansion across services and secondary-sector activities, supported by domestic consumption, investment and infrastructure activity.

Indias economic resilience was supported by continued domestic demand, improving manufacturing activity, strong services exports and sustained public capital expenditure. At the same time, global trade disruptions, geopolitical tensions and energy- price volatility remained important external risks.

39

GROWTH OF THE INDIAN ECONOMY

	FY22	FY23	FY24	FY25	FY26 (E)
Real GDP growth (%)	8.7	7.2	7.1	7.1	7.7

E: Estimated

(Source: MoSPI, Provisional Estimates of GDP, FY2025-26; base year 2022-23) Growth of the Indian economy quarter by quarter, FY 2025-26

	Q1FY26	Q2 FY26	Q3 FY26	Q4 FY26 (E)
Real GDP growth (%)	7.8	8.4	7.8	7.8

E: Estimated

(Source: MoSPI, Provisional Estimates of GDP, FY2025-26)

The banking sector continued to strengthen, supported by improved asset quality, adequate capitalisation and resilient credit growth. Credit conditions remained supportive of domestic investment and consumption during FY 2025-26. Indias exports of goods and services reached a record level during FY 2025-26. Government data initially estimated exports at US$860.09 billion, while subsequent data placed total exports at approximately US$ 863.1 billion, comprising merchandise exports of about US$ 441.8 billion and services exports of about US$ 421.3 billion. Gross GST collections continued to show sustained growth during FY 202526, reflecting a widening tax base and stronger compliance. The Union Budget 2025-26 had estimated GST receipts, including GST compensation cess and IGST, at Rs. 11.78 lakh crore.

On the supply side, real GVA expanded by 7.9% in FY 2025-26. The secondary and tertiary sectors were key contributors to growth, with services continuing to benefit from strong domestic demand and Indias competitive position in global business and technology services. Manufacturing activity strengthened materially during FY 2025-26, supported by domestic demand, infrastructure investment and improving industrial activity. Construction and related infrastructure activity also remained important drivers of economic expansion. Agriculture and allied activities continued to benefit from improved agricultural conditions, while trade, hotels, transport, communication and other services continued to support employment, consumption and overall economic activity. From a demand perspective, private consumption and fixed investment remained important contributors to growth. Government capital expenditure and infrastructure development continued to support the investment cycle. Financial markets remained sensitive to global interest rates, geopolitical developments and capital flows. Gold continued to attract safe-haven demand amid global uncertainty, while equity markets were influenced by domestic earnings, foreign portfolio flows and global risk sentiment.

Outlook

India is expected to remain among the fastest-growing major economies. The provisional FY 2025-26 GDP estimate of 7.7% provides a strong base for FY 2026-27, although external risks remain from geopolitical tensions, energy prices, global trade conditions and financial-market volatility. The following are some key growth catalysts for India in FY27. Strong domestic demand: Indias large domestic market, rising incomes and continued formalisation of economic activity are expected to support consumption and investment.

• Infrastructure and public capital expenditure: Continued government investment in infrastructure is expected to crowd in private investment and improve productivity.

• Manufacturing and supply-chain diversification: Global efforts to diversify supply chains and Indias expanding manufacturing ecosystem provide opportunities for exports, electronics, pharmaceuticals and other sectors.

• Services exports: Indias strong position in IT, business, professional and financial services is expected to continue supporting foreign-exchange earnings and economic growth.

• Easing inflation and monetary conditions: Moderating inflation and an easing interest-rate environment can support credit growth, investment and consumption, subject to global energy and inflation risks.

• Digitalisation and AI: Rapid adoption of digital public infrastructure, artificial intelligence and automation is expected to create productivity gains across financial services, healthcare, manufacturing and business services.

• Trade agreements: Indias expanding network of trade agreements and efforts to diversify export destinations can improve market access and support export growth.

(Source: MoSPI, Ministry of Commerce & Industry, IMF, Union Budget documents)

Global pharmaceutical industry overview

The global pharmaceutical market is expected to reach US$1,207.00 bn in 2025 growing at a CAGR of 4.76% in 2025-2029, resulting in a market value of US$2384.53 bn by 2029. The United States of America is expected to generate the highest revenue of US$660.00 bn in 2025. Among the various markets that are present, oncology drugs are expected to be the largest, with an estimated market value of US$208.90 bn in 2025. The United States remains at the forefront of pharmaceutical innovation worldwide due to its advanced healthcare infrastructure and strong research and development capabilities.

The pharmaceutical market has experienced significant growth, driven by advancements in therapeutics, targeted therapies and personalised medicine. Innovations such as biologics, gene therapies and RNA-based treatments have reshaped treatment models, offering effective solutions for complex conditions like cancer, autoimmune diseases and genetic disorders. FDA approvals for groundbreaking therapies, including CAR-T cell treatments and immuno-oncology advancements, are redefining cancer care. Expedited regulatory pathways, technological innovations in drug delivery and increasing access to healthcare in emerging economies further support market expansion. Strategic collaborations and continued R&D investments are driving competitiveness and innovation in the industry. The pharmaceuticals market has been growing steadily in recent years, which is mainly driven by innovative drugs and an increasing demand for drugs and treatments worldwide. The growth in the estimated period can be attributed to increasing government support, increase in healthcare access and increase in investments, among others.

The global use of medicines grew by 14% over the past five years and a further 12% increase is expected through 2028, bringing the annual use to 3.8 trillion defined daily doses. Global spending on medicine using list prices grew by 35% over the past five years and is expected to increase by 38% through 2028. The underlying growth rate of pharmaceutical spending, estimated being raised by 3 percentage points to 2-5% CAGR through 2028, reflecting higher recent growth and expected further increased patient use of higher value therapies.

(Source: IQVIA, Statista, Grand View Research)

Indian pharmaceutical industry overview

India is the largest provider of generic drugs globally and is known for its affordable vaccines and generic medications. The Indian pharmaceutical industry is currently ranked third in pharmaceutical production by volume and 14th in value after evolving over time into a thriving industry growing at a CAGR of 9.43% since 2015. It is the largest supplier of generic medicines providing 20% of the worlds supply and a key player in affordable vaccines. The total market size of the Indian pharmaceutical industry is expected to reach US$ 130 billion by 2030 and US$ 450 billion market by 2047. Indian pharmaceutical companies are expected to achieve a revenue growth of 9-11% in FY25.

Generic drugs, over-the-counter medications, bulk drugs, vaccines, contract research and manufacturing, biosimilars and biologics are some of the major segments of the Indian pharma industry.

Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. The domestic pharmaceutical industry includes a network of 3,000 drug companies and more than 10,500 manufacturing units. India enjoys a prestigious position in the global pharmaceuticals sector as it also has a large pool of scientists and engineers with a potential to steer the industry ahead to greater heights. Moreover, India is also capable of manufacturing low- cost generic alternatives due to a number of economic factors favouring the industry. Some of these include the competitive land rates, the availability of cheap labor, lower cost of production and machinery.

Indian pharmaceutical companies have a wide variety of experience in manufacturing as per global standards. Indian companies are experienced in manufacturing a variety of formulations that makes them efficient and competitive in their operations. The Indian pharma market with decades of experience in generics manufacturing, caters to the needs of the general population. These companies have the experience and know-how to produce quality drugs in an efficient, high-quality and cost-effective manner without compromising on any aspect.

(Source: IBEF, PIB.gov.in, Department of Pharmaceuticals)

Union Budget Allocation

The Government of India has allocated a total of Rs.99,859 crore in FY2025-26 budget for the countrys healthcare sector, which is 11% increase from Rs. 89,974 crore in FY2024-25. In the Union Budget 2025, Rs. 95,958 crore had been earmarked for the Department of Health and Family Welfare and Rs. 3,901 crore had been allocation to the Department of Health Research. The government allocated Rs. 2,445 crore for production-linked incentive scheme for the pharmaceutical industry. The government plans to establish 200 day-care cancer centers in FY 2025-26. The government will facilitate the setting up of day-care cancer centers in all district hospitals in the next three years.

(Source: CNBC, KPMG assets, PRS legislative research)

Growth Drivers For Indian Pharmaceutical Market

• Customer preferences : As the majority of the population is middle class and cannot afford expensive healthcare products. Indian pharmaceutical companies are focusing on creating products that are affordable for the masses.

• Trends in the market : The growth of the biopharmaceutical sector are drugs made from living organisms. This sector is growing rapidly in India due to the availability of skilled labor and low production costs.

• Outsourcing: The pharmaceutical market in India is the rise of contract manufacturing. Many pharmaceutical companies in developed countries are outsourcing the manufacturing of their drugs to India. This is because labour and production costs are lower in India.

• Underlying macroeconomic factors : Indias per capita disposable income increased from US$2.54 thousand in 2023 to US$2.77 thousand in 2024 with estimations indicating it will reach US$ 4.34 thousand by 2029. Meanwhile, the Indian healthcare market which was valued at approximately $180 billion in FY 2023 is now estimated to reach US$ 638 billion by 2025 and is expected to grow to about $320 billion by FY 2028. The government has also allocated INR 95,957.87 crore to the healthcare sector for FY26, marking a 9.46% increase compared to the FY25 budget estimates. As the Indian economy grows rapidly, disposable income is rising, leading to greater demand for healthcare products. Moreover, the governments substantial investments in the healthcare sector are contributing to the continued expansion of Indias pharmaceutical industry.

• Ageing population: By 2061, it is estimated that one in every four individuals will be over the age of 61, a shift that is expected to contribute to a rising incidence of cardiovascular and other age-related diseases. This demographic transformation is likely to place significant strain on healthcare systems. Medical inflation is anticipated to intensify the challenges, driving up the cost of healthcare services and treatments. Such escalating costs could restrict access to essential care, particularly for the elderly, who may require long-term management of chronic conditions. Therefore, it will be imperative to address the healthcare demands of an aging population and the pressures of medical inflation to ensure the sustainability and accessibility of healthcare in the coming decades.

(Source: Statista, India briefing, IBEF)

Global CRO Segment Overview

The global contract research organization (CRO) market size is estimated at USD 69.56 billion in 2025 and is expected to reach around USD 126.17 billion by 2034, at a CAGR of 6.85% from 2025 to 2034. Contract research organizations (CROs) provide a wide array of services, including preclinical research, data collection and clinical trial management for biotechnology, pharmaceutical and medical device companies. By collaborating with CROs, life science companies can substantially reduce costs and accelerate the development and launch of new therapeutics and medical devices.

On a regional basis, North America led the CRO market in 2024, driven by the expansion of the regions pharmaceutical and biotechnology sectors. The United States holds the largest market share, followed by Canada. The U.S. dominance is attributed to its strong pharmaceutical and biotechnology industries, a high concentration of clinical research facilities and advanced infrastructure and technology. Canada ranks as the second-largest CRO market in North America.

The CRO industry is expected to experience steady growth due to the increasing trend of outsourcing research activities by academic institutions and private CROs. This strategy allows companies to remain competitive and adaptable in an era of rapidly expanding knowledge, advanced technologies and economic uncertainty. CROs provide a range of outsourcing services, including drug discovery, hit confirmation, lead generation, lead optimization, data management, clinical trial management, patient recruitment and high-speed screening. By leveraging these services, industry players can focus on their core competencies, thereby driving market growth. The growing number of small and mid-sized pharmaceutical and biotechnology companies with limited research and development resources has been driving the demand for CRO services. To meet this rising demand, key market players are increasingly adopting advanced technologies to enhance their service offerings.

(Source: Precedence Research, Fortune Business Insights, Mordor Intelligence)

Indian CRO segment overview

The Indian CRO sector is expanding rapidly, with a CAGR of 10.75%, estimated to reach USD 2.5 billion by 2030. Meanwhile, the Indian preclinical CRO market, valued at USD 220.77 million in 2025, is expected to grow at a CAGR of 6.40%, reaching USD 301.06 million by 2030. This growth is driven by increasing research and development investments, rising outsourcing of research functions and rapid technological advancements. Substantial public and private funding in life sciences also fuels market expansion. Furthermore, the rising prevalence of chronic diseases such as cardiovascular conditions, cancer and diabetes has intensified the demand for innovative treatments. Pharmaceutical and biotechnology companies are ramping up their research and development efforts to develop new drugs and medical devices. Preclinical CROs play a vital role in this process by conducting early-stage research, including animal studies and toxicity testing, to assess the safety and efficacy of new compounds.

Drug discovery CROs are increasingly engaging in long-term strategic partnerships with pharmaceutical and biotechnology companies, academic institutions and other CROs. These collaborations, including drug co-development, joint ventures and preferred provider agreements, allow stakeholders to leverage expertise, enhance capabilities and expand CRO service offerings.

(Source: pharma-dept.gov, Mordor Intelligence)

Growth Drivers for Indian CRO Market

• Globalization of clinical trials is driving market growth : The expansion of clinical trials on a global scale is a major factor fuelling market growth. Key drivers include the adoption of advanced technologies in clinical research, the increasing diversity and prevalence of diseases and the growing focus on research and development, which is encouraging outsourcing. The Indian governments proactive initiatives to strengthen research and development efforts are expected to further accelerate market expansion.

• Increased research and development expenditure : The Indian government has increased spending on research and development, which has risen to 0.7% of GDP. This increase supports the growth of the CRO market by providing more resources for drug development and clinical trials.

• Government initiatives : Policies like Section 35(2AA) of the Income Tax Act offer weighted deductions for companies engaged in scientific research, encouraging investment in innovation.

• Rising number of clinical trials : The Indian CRO market has witnessed significant growth, driven primarily by the increasing number of clinical trials conducted in the country. This surge is contributing to the expansion of the industry, making India a key player in the global clinical research landscape.

• Growing CRO outsourcing in drug development : The Indian CRO market has become a crucial and influential force within the countrys pharmaceutical and biotechnology industries. The rapid expansion of CRO outsourcing in drug development is driven by multiple factors, positioning India as a hub for research and development activities.

• Need for cost effective drugs: The growth of the CRO industry is driven by the increasing demand for cost-effective drug development processes, the rising prevalence of chronic diseases and the growing trend of outsourcing to accelerate research and development activities. Furthermore, the adoption of virtual trials, remote monitoring and telemedicine is further fueling the demand for contract research organization services.

(Source: Market Research Future, Precedence Research)

Company Overview

Vivo Bio Tech Limited has established a strong position in Indias preclinical research ecosystem, with capabilities spanning the breeding and distribution of laboratory animals, customised rodent models and a comprehensive range of preclinical research and toxicology services. The Company is among the leading breeders and distributors of rodent models in India and has developed capabilities in providing Specific Pathogen Free (SPF) laboratory animals to pharmaceutical, biotechnology, contract research and academic institutions.

The Companys integrated business model enables it to address a broad spectrum of customer requirements across the preclinical research value chain. Through its strategic partnership with Cyagen Biosciences, Vivo Bio Tech offers customised rodent models and stem cell products, enabling researchers to access specialised models for complex and evolving research programmes. The

Company is also an authorised distributor in India for laboratory animal diets manufactured by Special Diets Services (SDS), UK, further strengthening its presence across the laboratory animal research ecosystem.

Quality-Focused Laboratory Animal Breeding

Vivo Bio Tech has been a pioneer in the commercial distribution of SPF guinea pigs in India and sources breeder animals from Elm Hill Labs, USA. The Companys in-house breeding programmes utilise premium SPF breeds and are supported by stringent animal husbandry and quality-control practices. These capabilities are aimed at ensuring consistency, reliability and suitability of laboratory animals for use in preclinical research and testing programmes.

The Companys focus on quality, traceability and controlled breeding practices forms an important part of its value proposition, particularly as pharmaceutical and biotechnology companies increasingly require reliable and standardised laboratory models to support research and regulatory submissions.

Integrated Preclinical Research Capabilities

Vivo Bio Tech provides a comprehensive portfolio of preclinical research and toxicology services, covering both in-vitro and in-vivo studies , analytical chemistry, bioanalytical research and physico-chemical studies. The Companys integrated capabilities enable customers to access multiple research and testing requirements through a single platform, thereby supporting greater efficiency and continuity across preclinical development programmes.

Its services are conducted in accordance with applicable regulatory requirements and international guidelines, with a strong emphasis on scientific integrity, quality systems and data reliability. These capabilities position the Company to serve the requirements of pharmaceutical, biotechnology, healthcare and research organisations undertaking drug discovery, development and safety assessment programmes.

Research Infrastructure

Vivo Bio Tech operates a state-of-the-art preclinical research facility, among the larger facilities of its kind in India. Its principal facility is located at Pragnapur Village, Siddipet District, Hyderabad, Telangana. The facility provides an integrated environment for laboratory animal breeding, preclinical research, toxicology and associated analytical activities.

The Company continues to focus on strengthening its infrastructure, scientific capabilities and service offerings to address the evolving requirements of the pharmaceutical and biotechnology industries. Its integrated platform, established laboratory animal capabilities and preclinical research infrastructure provide a foundation for pursuing opportunities arising from the growing demand for outsourced research and development services.

Competitive Strengths

The Companys key strengths include:

• Established position in laboratory animal breeding and distribution , with capabilities in SPF rodent and guinea pig models.

• Integrated preclinical research platform , covering animal studies - both small and large, toxicology and associated analytical services.

• Access to specialised research models and products through its association with Cyagen Biosciences.

• International sourcing relationships , including breeder animals from Elm Hill Labs, USA, and laboratory animal diets from Special Diets Services, UK.

• Quality- and compliance-oriented operating practices , GLP accredited facility for carrying out studies on both small and large animals, aligned with applicable international regulatory guidelines.

• Established research infrastructure in Telangana , providing a platform to support a diverse range of preclinical research programmes.

• Ability to serve multiple customer segments , including pharmaceutical companies, biotechnology companies, contract research organisations and academic/research institutions.

Outlook

The increasing complexity of drug discovery and development, growing emphasis on preclinical safety assessment and the continued adoption of outsourced research models are expected to support demand for laboratory animals, specialised research models and preclinical research services. Against this backdrop, Vivo Bio Tech intends to leverage its established capabilities, infrastructure and scientific expertise to deepen customer relationships, expand its service portfolio and participate in the emerging opportunities within Indias pharmaceutical and biotechnology research ecosystem.

Financial Overview

Analysis of Profit and Loss Statement Revenues

Revenue from operations increased by 12.6%, from Rs. 46.67 Crore in FY 2024-25 to Rs. 52.57 Crore in FY 2025-26, reflecting continued growth in the Companys core business operations. The increase was supported by higher business volumes, particularly across preclinical research and analytical studies.

Other income stood at Rs. 0.44 Crore in FY 2025-26, compared with Rs. 4.80 Crore in FY 2024-25. The previous years other income included Rs. 4.62 Crore towards profit on sale of land, which was a non-recurring item. Accordingly, the decline in other income during FY 2025-26 primarily reflects the absence of this non-operating gain. Other income accounted for approximately 0.83% of total revenues during FY 2025-26, highlighting the Companys predominantly operating-business-driven revenue profile.

Expenses

Total operating expenses increased by 21.15%, from Rs. 25.88 Crore in FY 2024-25 to Rs. 31.34 Crore in FY 2025-26. The increase was primarily attributable to higher employee costs and material consumption associated with the expansion of the Companys operations and the increased scale of its analytical and preclinical research activities.

Material costs increased by Rs. 2.34 Crore, while employee costs increased by Rs. 4.09 Crore during the year. These increases were partly offset by a Rs. 0.37 Crore reduction in administrative expenditure, resulting in a net increase of Rs. 6.05 Crore in total expenses.

Material Costs

Material costs increased by 40.3%, from Rs. 5.79 Crore in FY 2024-25 to Rs. 8.13 Crore in FY 2025-26, and represented approximately 15.5% of operating revenues during FY 2025-26.

The increase was primarily driven by the higher volume and scale of analytical studies undertaken during the year. Analytical studies generally involve relatively higher consumption of reagents, laboratory consumables and other research materials compared with experimental animal breeding and sale activities. Accordingly, the increase in material costs reflects, in part, the evolving business mix and the higher contribution from analytical and research-intensive activities.

Employee Costs

Employee costs increased by 34.5%, from Rs. 11.86 Crore in FY 2024-25 to Rs. 15.95 Crore in FY 2025-26, and represented approximately 30.3% of operating revenues.

The increase was primarily attributable to the addition of scientific, technical and business development personnel to support the Companys expanding operations and incremental business requirements. The strengthening of the scientific and business development teams is expected to enhance execution capabilities, support the expansion of service offerings and create a stronger organisational foundation for future growth.

Overall, the increase in the Companys cost base during FY 2025-26 was primarily associated with investments in people, research capabilities and operating resources to support business expansion. The Management remains focused on improving operating efficiencies and leveraging the enhanced organisational and scientific capabilities to drive sustainable and profitable growth.

Balance Sheet Analysis

Sources of Funds

Capital employed increased by 26.7%, from Rs. 122.72 Crore as at March 31,2025 to Rs. 155.52 Crore as at March 31,2026. The increase was primarily driven by growth in equity, reserves and surplus, as well as total debt, which increased by Rs. 5.03 Crore, Rs. 15.65 Crore and Rs. 12.12 Crore, respectively, during FY 2025-26.

Return on Capital Employed (ROCE)

Return on Capital Employed (ROCE), which measures the return generated on the capital deployed in the business, declined from 13.4% in FY 2024-25 to 7.5% in FY 2025-26, a reduction of 586 basis points. The decline was primarily attributable to a Rs. 1.77 Crore decrease in EBIT from operations, coupled with an increase of approximately Rs. 15.14 Crore in average capital employed during the year. The increase in capital employed reflects the Companys continued investment in its business and operating capabilities. The Management remains focused on improving the utilisation of capital deployed and enhancing operating profitability as the Companys expanded business platform scales.

Net Worth and Return on Net Worth

The net worth of the Company increased by 19.2%, from Rs. 78.19 Crore as at March 31,2025 to Rs. 93.22 Crore as at March 31, 2026. The increase was primarily attributable to the receipt of warrant proceeds and the consequent increase in equity and reserves and surplus. The reported loss after tax of Rs. 1.94 Crore for FY 2025-26 was absorbed within the Companys reserves. During the year under review, the Companys equity share capital increased following the issue of additional equity shares. The total number of equity shares increased by 50,25,812 shares, resulting in 2,21,90,628 equity shares of Rs. 10 each as at March 31,2026.

Debt-Equity Ratio

Total debt increased by 23.4%, from the previous years level to Rs. 63.92 Crore as at March 31,2026. The increase was primarily attributable to an increase of Rs. 10.44 Crore in term debt and Rs. 1.68 Crore in short-term borrowings. Consequently, the Companys Debt-Equity Ratio stood at 0.69x as at March 31, 2026, compared with 0.66x as at March 31, 2025. The marginal movement in the ratio reflects the increase in borrowings alongside the growth in networth during the year.

Investments

The Companys non-current investments stood at Rs. 21.95 Crore as at March 31, 2026. These investments form part of the Companys long-term deployment of capital and are monitored as part of its overall capital allocation strategy.

Working Capital Management

Current assets decreased by 33.7%, from Rs. 43.31 Crore as at March 31, 2025 to Rs. 28.17 Crore as at March 31, 2026. The reduction was primarily attributable to a significant decline in short-term loans and advances. The Current Ratio and Quick Ratio stood at 0.94x and 0.67x, respectively, as at March 31,2026, compared with 1.56x and 1.28x, respectively, as at March 31,2025. The movement primarily reflects the reduction in current assets during the year, particularly short-term loans and advances. Inventories, comprising raw materials, work-in-progress, finished goods and other inventory components, increased by 4.6%, from Rs. 7.79 Crore as at March 31,2025 to Rs. 8.15 Crore as at March 31,2026. The increase was broadly in line with the Companys operating requirements. Trade receivables increased marginally by 4.8%, from Rs. 11.21 Crore as at March 31,2025 to Rs. 11.75 Crore as at March 31,2026. The corresponding debtors turnover cycle stood at 88 days during FY 2025-26, compared with 82 days in FY 2024-25. The movement reflects the increase in receivables relative to the growth in revenue during the year, and the Company continues to focus on timely collection and effective receivables management. Cash and cash equivalents increased by 7.8%, from Rs. 1.21 Crore as at March 31, 2025 to Rs. 1.30 Crore as at March 31, 2026. Short-term loans and advances decreased significantly by 73.3%, from Rs. 22.34 Crore as at March 31,2025 to Rs. 5.96 Crore as at March 31,2026, representing a reduction of approximately Rs. 16.38 Crore. The substantial reduction reflects a more focused deployment of working capital and a reduction in funds tied up in short-term advances.

The Company continues to focus on prudent working capital management, with emphasis on receivables collection, inventory optimisation and efficient deployment of available resources.

Margins

The Companys EBITDA margin from operations declined by 419 basis points, from 44.6% in FY 2024-25 to 40.4% in FY 2025-26. While EBITDA from operations increased in absolute terms, the growth in revenue was higher than the growth in EBITDA, resulting in a moderation in the operating margin. The movement reflects the higher operating cost base associated with the expansion of the Companys business and the changing mix of preclinical and analytical activities. The Net Profit Margin from operations declined by 1,045 basis points, from 5.9% in FY 2024-25 to (4.5)% in FY 2025-26. The decline was primarily attributable to the impact of the deferred tax charge during the year. Although the Company continued to generate positive operating profit, the deferred tax charge contributed significantly to the reported loss after tax of Rs. 1.94 Crore for FY 2025-26.

The Management remains focused on strengthening operating efficiencies, optimising the cost structure and improving margins as the Companys investments in scientific capabilities, personnel and infrastructure translate into increased business volumes and operating leverage.

Key financial ratios

Particulars	FY 2025-26	FY 2024-25
EBITDA from operations/turnover (%)	40.37	44.56
EBIDTA from operations/Net interest ratio	3.63	2.77
Debt-equity ratio	0.69	0.66
Return on equity (%)	(2.26)	11.42
Book value per share (Rs.)	42.01	45.55
Earnings per share (Rs.)	(0.93)	4.95
Debtors\u2019 turnover (days)	82	88
Interest coverage ratio(x)	3.70	3.41
Current ratio (x)	0.94	1.56
Operating profit margin from operations (%)	20.15	25.24
Net profit margin from operations (%)	(4.52)	5.93

Analysis of Key Financial Ratios

• EBITDA from Operations / Turnover:

EBITDA from operations increased marginally by Rs. 0.43 Crore , from Rs. 20.80 Crore in FY 2024-25 to Rs. 21.22 Crore

in FY 2025-26 . However, revenue from operations increased by Rs. 5.90 Crore , from Rs. 46.67 Crore to Rs. 52.57 Crore during the year. Consequently, EBITDA from operations as a percentage of turnover moderated from 44.56% in FY 202425 to 40.37% in FY 2025-26 , a decline of 419 basis points. The moderation primarily reflects the increase in operating costs associated with the higher scale and changing business mix during the year.

• EBITDA from Operations / Net Interest:

The EBITDA from operations to net interest ratio improved from 2.77x in FY 2024-25 to 3.63x in FY 2025-26 . This improvement was supported by a combination of higher EBITDA from operations and lower finance costs. EBITDA from operations increased by Rs. 0.43 Crore to Rs. 21.22 Crore, while finance costs declined by Rs. 1.66 Crore , from Rs. 7.50 Crore in FY 2024-25 to Rs. 5.85 Crore in FY 2025-26 . The improvement indicates stronger operating earnings relative to the Companys interest burden.

• Debt-Equity Ratio:

The Debt-Equity Ratio increased marginally from 0.66x in FY 2024-25 to 0.69x in FY 2025-26 . The movement reflects the change in the Companys capital structure during the year and remains broadly stable.

• Return on Equity:

Return on Equity declined from 11.42% in FY 2024-25 to (2.26)% in FY 2025-26 , primarily due to the decline in Profit After Tax from Rs. 7.57 Crore in FY 2024-25 to a loss of Rs. 1.94 Crore in FY 2025-26 . The reported loss for FY 2025-26 was significantly influenced by a Deferred Tax Liability of Rs. 5.71 Crore . The Company reported Profit Before Tax of Rs.

4.58 Crore and current tax expense of Rs. 0.81 Crore, demonstrating that the negative reported PAT was substantially impacted by the deferred tax charge.

• Book Value per Share:

Book Value per Share decreased from Rs. 45.55 in FY 2024-25 to Rs. 42.01 in FY 2025-26 . This movement occurred despite an increase in the Companys net worth from Rs. 78.19 Crore to Rs. 93.22 Crore during the year. The reduction in book value per share was primarily attributable to the increase in the number of equity shares following the issue of 50,25,812 additional equity shares , taking the total number of equity shares from 1,71,64,816 in FY 2024-25 to 2,21,90,628 in FY 2025-26 . Thus, the increase in net worth was accompanied by a proportionately higher increase in the equity share base.

• Earnings per Share:

Earnings per Share declined from Rs. 4.95 in FY 2024-25 to (Rs. 0.93) in FY 2025-26 , primarily reflecting the reported loss after tax of Rs. 1.94 Crore in FY 2025-26, compared with a profit after tax of Rs. 7.57 Crore in the previous year. The movement in EPS also reflects the increase in the Companys equity share capital during the year.

• Debtors Turnover:

Debtors turnover improved from 88 days in FY 2024-25 to 82 days in FY 2025-26 , indicating an improvement in the Companys receivables cycle. The improvement was supported by strengthened receivables monitoring and follow-up with customers, contributing to more efficient working capital management.

• Interest Coverage Ratio:

The Interest Coverage Ratio improved from 3.41x in FY 2024-25 to 3.70x in FY 2025-26 , supported by the improvement in operating earnings and the reduction in finance costs during the year. The higher coverage provides a better operating cushion against the Companys interest obligations.

• Current Ratio:

The Current Ratio stood at 0.94x in FY 2025-26 , compared with 1.56x in FY 2024-25. The decline primarily reflects changes in the composition of current assets and liabilities during the year. However, the Companys working capital profile benefited from a significant reduction in short-term loans and advances, which declined by Rs. 14.79 Crore , from Rs. 20.86 Crore in FY 2024-25 to Rs. 6.07 Crore in FY 2025-26 . The reduction in short-term advances represents a meaningful improvement in the deployment and management of working capital, notwithstanding the lower reported current ratio.

• Operating Profit Margin from Operations:

• Operating Profit Margin from operations declined from 25.24% in FY 2024-25 to 20.15% in FY 2025-26 . Operating profit stood at Rs. 10.60 Crore on revenue from operations of Rs. 52.57 Crore in FY 2025-26, compared with operating profit of Rs. 11.78 Crore on revenue from operations of Rs. 46.67 Crore in FY 2024-25. The moderation in operating margin was primarily attributable to the higher operating cost base associated with the increase in business volumes and the evolving business mix during the year.

• Net Profit Margin from Operations:

Net Profit Margin from operations declined from 5.93% in FY 2024-25 to (4.52)% in FY 2025-26 , primarily reflecting the impact of the deferred tax charge of Rs. 5.71 Crore on the Companys reported profit after tax. While the Company continued to generate positive operating profit during the year, the higher tax impact resulted in a reported loss at the net profit level.

Opportunities And Threats

The company is strategically positioned to capitalize on market opportunities, driven by its strong commitment to integrated preclinical CRO solutions and significant investments in cutting-edge technologies and platforms. The establishment of an advanced GLP-certified laboratory has further accelerated its growth trajectory. With a primary focus on meeting the needs of long-term strategic partners, the company continues to invest in novel capabilities and enhance its service offerings within these collaborations. In terms of risk management, the leadership team regularly assesses critical risk areas, defining their nature and scope while implementing structured mitigation plans. The key identified risks are as follows:

• Ensuring business resilience

• Workforce health and safety

• Maintaining product effectiveness and quality

• Rising input costs and supply chain disruptions

• Competition and price pressures in regulated markets

• Compliance with data privacy and cybersecurity laws

• Environmental, health and safety (EHS) risks

• Adherence to regulatory and compliance requirements

Risks And Concerns

The preclinical CRO sector is inherently high-risk, requiring exceptional accuracy and quality in service delivery. Despite substantial investments, a rapid surge in revenue is not guaranteed, as building brand reputation and trust is a gradual process in this industry. Moreover, factors such as competition, evolving regulatory frameworks and the companys position within the value chain can significantly influence profitability.

Internal Control Systems And Their Adequacy

The companys internal audit system is continually assessed and updated to ensure asset protection, compliance with established regulations and prompt resolution of pending issues. The Audit Committee regularly reviews reports from internal auditors, noting observations and taking corrective actions when necessary. It maintains ongoing dialogue with statutory and internal auditors to ensure the effective operation of internal control systems.

Human Resources

As of March 31,2026, the company had a workforce of 247 employees, including officers and workmen. Emphasizing skill development and continuous learning, the company has significantly strengthened its human capital, ensuring alignment with market trends and demands. To enhance employee capabilities, the company has implemented various skill development initiatives and knowledge-sharing programs. Employees have also participated in external training programs to stay updated on emerging industry standards. Moreover, several innovative employee-driven ideas have been successfully implemented, leading to improvements in quality, cost efficiency and overall productivity.

Cautionary statement

This statement made in this section describes the companys objectives, projections, expectations and estimations which may be forward-looking statements within the meaning of applicable Securities Laws and Regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realised by the company. Actual results could differ materially from those expressed in the statements or implied due to the influence of external factors which are beyond the control of the company. The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.