Walpar Nutritions Ltd Management Discussions

A. Overview of the Global Economy:

In 2024, the global economy navigated moderate growth amidst persistent inflationary pressures and geopolitical instability. A year marked by significant global elections, the immediate impact of which is evident, while longterm effects remain to be seen, added another layer of complexity. Monetary policy, particularly interest rate adjustments in major economies, remained a central focus. Emerging markets exhibited diverse performance, influenced by commodity markets and debt vulnerabilities. Trade tensions and supply chain disruptions continued to strain global commerce and investment, while geopolitical volatility persisted. Concurrently, technological advancements, especially in AI and renewable energy, presented both, significant opportunities for productivity gains and challenges related to workforce adaptation. This confluence of factors created a dynamic and uncertain economic landscape for businesses and policymakers worldwide.

Looking ahead, the global economy in 2025 is projected to grow at a low but steady rate of 2.8%1. Global inflation is expected to continue its downward trend, but the pace of decline may vary. Geopolitical tensions and trade uncertainties remain significant risks to the global economy. A balanced policy approach is essential to manage these risks, enhancing medium-term growth prospects through structural reforms and stronger multilateral cooperation.

B. Overview of the Indian Economy:

Indias real GDP is projected to grow at 6.5%2 in financial year 2024-25, following a steady recovery to pre-COVID levels. While this growth was slower than expected, it continues to be one of the fastest growing major economies. Retail headline inflation has softened in line with global deflation trends, decreasing from 5.4% in financial year 2023-24 to 4.6% in financial year 2024-25, exhibiting increased deceleration towards the latter part of the year. However, food inflation that has remained a significant contributor to total inflation continued to remain high, albeit decelerating in the last quarter of the fiscal. With early indications of softening of food inflation, we will continue to monitor the trends. The Government allocated over 11 lakh crores to capital expenditure during the fiscal, contributing to 3.4% of the GDP. The agriculture sector received a boost through several schemes and incentives, driving a gradual recovery in financial year 2024-25. Increased grassroots-level structural reforms and a focus on deregulation are expected to bolster medium-term growth and competitiveness.

FMCG consumption remained subdued during the year. While rural demand recuperated, urban consumption continued to moderate. However, upper-end consumption continued to drive growth, with a growing preference for premium products and amplified consumer demand in the digital commerce space. Looking forward, the pace of recovery of consumption will depend on real wage growth, employment and food inflation levels. Higher agricultural output combined with government initiatives towards boosting consumption should benefit well for the FMCG industry in the near term.

India is at the forefront of digital infrastructure developments. In the year, India not only expanded its digital infrastructure but also focussed on ensuring its accessibility, security, and impact on various sectors of the economy. This should set the stage for continued digital transformation and economic growth.

Looking ahead, India is expected to maintain its position as one of the fastest-growing major economies. The momentum is anticipated to be driven by sustained government investments in infrastructure, a growing middle class, and increasing digital adoption. The Governments reforms aimed at boosting manufacturing, enhancing productivity and improving ease of doing business will play a crucial role in ensuring long-term sustainable growth. Within this, private consumption will play an important role. The ability to navigate global factors such as geopolitical developments, market sentiment shifts, and currency fluctuations will be crucial for maintaining growth momentum.

C. Outlook:

India is a global leader in generic drugs and affordable vaccines, ranking third in pharmaceutical production by volume. The industry, growing at a CAGR of 9.43%, includes segments like generics, vaccines, biologics, and contract manufacturing. India supplies a significant share of global medicine demand, including over 50% of vaccines and 80% of antiretrovirals. With a strong manufacturing base, skilled workforce, and compliance with international standards, it holds a key global position. The industry contributes 1.72% to Indias GDP and is projected to reach a market value of US$130 billion by 2030.

D. Industry structure and development:

Indias pharmaceutical sector ranks third globally in terms of volume and is a key contributor to global generics, vaccines, and nutraceuticals. The nutraceutical market in India is also witnessing rapid growth due to increasing awareness of preventive healthcare, lifestyle-related disorders, and a growing middle class. The herbal and Ayurveda segment, deeply rooted in Indian tradition, is experiencing a resurgence, supported by government initiatives like AYUSH and rising global demand.

The convergence of pharmaceuticals, nutraceuticals, and herbal products is reshaping the health and wellness landscape in India. Regulatory tightening, increasing R&D investment, and consumer preferences for natural and preventive care are defining the sectors growth trajectory.

E. Opportunities and Threats:

Opportunities:

Rising global demand for alternative medicine and plant-based remedies.

Government incentives and regulatory support under the PLI scheme, Startup India and Ayush Promotion.

Export potential in the US, Europe, and Asia-Pacific regions.

Increasing collaborations for contract manufacturing and R&D.

Growing preference for preventive healthcare and immunity-boosting products post-COVID.

Threats:

Regulatory uncertainties, product approvals from authorities like CDSCO, FSSAI & USFDA and frequent policy changes.

Intense competition from domestic and international players. Price control measures affecting margins. Supply chain disruptions due to geopolitical factors. High R&D costs and IPR issues.

F. Segment-wise or Product-wise performance:

The Company is primarily engaged in single segment i.e. Manufacturing and Trading of Pharmaceutical, Nutraceutical, Herbal and Ayurvedic commodities.

The Consolidated Turnover of the Company for the Financial Year 2024-25 is Rs. 7202.93 Lakhs.

G. Future Outlook:

The Company anticipates sustained growth in the coming years, driven by product innovation, capacity expansion, and strategic market penetration. Focus areas include launching evidence-based herbal formulations, expanding international certifications, enhancing digital marketing capabilities, and forging B2B partnerships. The Company is committed to aligning with global quality standards and environmental sustainability.

H. Risks and concerns:

Key risks include:

Regulatory and compliance risks in domestic and international markets. Volatility in raw material prices, especially natural extracts. Dependency on third-party suppliers for critical inputs. Technological obsolescence and need for constant innovation.

I. Material Developments in Human Resources / Industrial Relations:

The Company places high emphasis on employee welfare, skill development, and performance-based culture. Various training and wellness initiatives were undertaken during the year to enhance employee engagement. Relations between management and employees remained cordial and cooperative throughout the financial year.

J. Internal control systems and their adequacy:

The Companys internal control framework focuses on strong governance, a vigilant finance function, and independent internal reviews. Risk assessment exercises prioritize the businesss key risks, guiding the formulation of strategies. The Audit Committee regularly reviews and takes appropriate action based on any deviations, observations, or recommendations from internal auditors. The Company is committed to upholding best practices in corporate governance, supported by well-documented policies and procedures to ensure compliance with all relevant regulations. Robust IT systems are in place to protect sensitive data and streamline the audit process. Accounting standards are strictly adhered to when recording transactions. Alongside robust Management Information Systems (MIS), the Company employs various strategies for real-time expense reporting to maintain control. Any deviations from budget allocations are promptly identified and corrected to ensure strict compliance.

K. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2024-25 is described in the Directors Report of the Company.

L. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

M. Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector specific financial ratios. In this regard, the Company has no significant changes in any key sector specific financial ratios to report.

N. Caution Statement:

Certain statements in the MDA section concerning future prospects may be forward-looking statements which involve a number of underlying identified/non-identified risks and uncertainties that could cause actual results to differ materially. The results of these assumptions made, relying on available internal and external information, are the basis for determining certain facts and figures stated in the report. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based, are also subject to change accordingly. These forward-looking statements represent only Company current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. Company assumes no obligation to revise or update any forward-looking statements, arising due to new information, future events, or otherwise.