Zydus Wellness Ltd Management Discussions

Global Economic Landscape

The International Monetary Funds ("IMF") World Economic Outlook (April 2025) forecasts a deceleration in global growth from 3.3% in 2024 to 2.8% in 2025, before recovering to 3% in 2026. This moderation reflects the impact of sustained high interest rates, tight monetary conditions and escalating geopolitical fragmentation, including increasing protectionism and trade frictions among major economies.

Inflation and Cost Pressures

Global Inflation is projected to ease from 5.9% in 2024 to 4.3% in 2025, eventually declining to 3.6% by 2026. However, core Inflation remains elevated due to persistent input cost pressures in key sectors such as food, fuel and packaging materials. Manufacturers continue to face challenges in passing on cost increases to end consumers.

Trade and Supply Chain Dynamics

Global trade volumes remain subdued compared to historical norms, influenced by supply chain disruptions, ongoing trade tensions and a structural shift toward regionalised production. Additionally, the continued pivot in consumption patterns from goods to services has tempered the growth of merchandise trade.

Capital Flows and Financial Conditions

Capital inflows into emerging markets remain volatile, reflecting the uncertainty stemming from fluctuating global monetary policies. These markets remain particularly sensitive to interest rate shifts in developed economies, posing risks to financial stability and investment planning.

Indian Economic Outlook – A Growth Oasis

In the post-pandemic era, India has emerged as one of the most resilient economies among the top global economies. During FY 2024-25, the Indian economy is estimated to have grown at a pace of 6.4%, despite facing several external headwinds. This growth is particularly noteworthy given the global context, where many large economies struggled to maintain momentum. The expansion was driven by strong performance in the agricultural and services sectors on the supply side, along with a steady increase in private consumption and resilience in core merchandise and services exports on the demand side. The International Monetary Fund, in its Article IV Consultation report released in February 2025, reafirmed Indias position as the fastest-growing major economy, crediting its prudent macroeconomic management and reform-oriented policy framework.

Inflationary pressures eased significantly during the year. Headline Inflation averaged 4.7% during April, 2024 to February 2025, compared to 5.4% in the same period of the previous fiscal. The decline was largely due to a sharp correction in food prices, led by a seasonal drop in vegetable prices during the winter months, a continued decline in pulse prices and various administrative interventions by the government. The Inflation outlook remains benign, supported by favourable estimates of agricultural production, which suggest continued moderation in food Inflation going forward.

Labour market indicators also showed notable improvement. According to the Periodic Labour Force Survey ("PLFS"), the urban unemployment rate declined from 6.5% in Q3 FY 2023-24 to 6.4% in Q3 FY 2024-25. This improvement was accompanied by a rise in the labour force participation rate and an increase in the worker-to-population ratio, indicating broader strengthening of employment conditions in urban regions. Additionally, various employment indices and business surveys pointed towards a positive hiring outlook.

Looking ahead, while the overall economic outlook for India remains positive, significant risks persist. These include uncertainties stemming from geopolitical developments, trade policy shifts, commodity price volatility and financial market turbulence. That said, a relatively stable outlook for commodity prices offers some relief. More importantly, Indias strong macroeconomic fundamentals and increasing domestic private sector capital formation are expected to support growth in FY 2025-26. Complementing this is a supportive policy environment–marked by accommodative monetary policy, fiscal prudence and a reform-focused Union Budget–which is geared towards long-term development. These factors are expected to enhance Indias economic resilience and sustain growth momentum amid a challenging global landscape.

Source: RBI

International Monetary Fund

Periodic Labour Force Survey

FMCG Sector Overview

The FMCG sector experienced a strong recovery in 2025 after a challenging post-festive period marked by Inflation and high inventory levels. Retailers, focused on clearing out excess stock, delayed new billing into late 2024. However, the January–March (JFM) quarter saw a robust rebound, with a 12.4% growth, driven by early seasonal demand and improved consumption sentiment.

By 2027, the total revenue of the FMCG market is expected to reach nearly C 53.4 Lakh Crore (US$ 615.87 billion), reflecting a compound annual growth rate ("CAGR") of 22.76% from 2021. Recent quarters have seen positive momentum, with the October–December, 2024 period recording a 10.6% sales value growth – the highest in four quarters. CRISIL forecasts 7-9% revenue growth for the FMCG sector in the current FY 2025-26, driven by increased volume and rural demand recovery.

Consumption Landscape: Rural-Urban Dynamics

Rural markets continued to drive growth, benefiting from higher purchasing power and increased product accessibility through smaller pack sizes. On the other hand, urban consumption showed a notable pickup in 2025, narrowing the gap with rural markets. This shift points to a more balanced market, with rising demand fuelled by early seasonal trends and enhanced availability of products across regions.

Channel Growth and Consumer Access

The rise of organised retail and digital channels played a crucial role in driving growth:

• Modern trade and e-commerce both expanded significantly, propelled by changing consumer preferences and increased digital adoption.

• Quick commerce gained traction in metropolitan areas, catering to the growing demand for fast, small-basket purchases.

• Marketplace platforms deepened their presence in Tier II and Tier III towns, capitalising on the increase in digital access and aspirational consumption patterns. Throughout the year, the FMCG sector saw steady demand momentum, particularly in rural areas, where small unit packs supported accessibility and affordability for lower-income segments. While urban demand was more subdued, premium categories remained resilient, reflecting a dual trend of value-seeking behaviour alongside the rise of premiumisation. Seasonal factors, such as an extended and intense summer, also contributed to stronger category performance early in the year.

Nielsen and Kantar World Panel Household data reported that the overall FMCG market in India (Urban + Rural) grew by 9% in value, 6% in volume and saw a 3% increase in household penetration, while Zydus Wellness outperformed on all these fronts –primarily driven by Rural markets, with contributions from Urban areas as well. For example, the report highlights that Zydus

Wellness achieved a household penetration estimated to be nearly four times higher than the overall market average, reflecting the brands increasing consumer acceptance, expanding reach and strong resonance across households

Source:

Bizom-The Kirana Pulse Nielsen report

Kantar World Panel Household data report

Performance Overview – FY 2024–25

Consolidated financial highlights

Parameters	FY 2024-25	FY 2023-24	Growth (%)
Net Sales	26,912	23,152	16.2%
Total Income from Operations	27,089	23,278	16.4%
EBITDA	3,797	3,082	23.2%
EBITDA Margin (%)	14.0%	13.2%
Profit Before Tax (before exceptional items)	3,529	2,743	28.7%
PBT Margin (%)	13.0%	11.8%
Net Profit	3,469	2,669	30.0%
Net Profit Margin (%)	12.8%	11.5%
Adjusted Net Profit*	3,410	2,623	30.0%

*Excluding Exceptional items and one-time tax impact

Revenue and Segment-Wise Performance

During the FY 2024–25, the Company recorded consolidated net sales growth of 16.2%, with volume growth of 12.4%, amounting to C 26,912 million. This reflects a healthy CAGR of about 10% in revenue from operations, which stood at C 27,089 million (+16.4% YoY), based on the FY 2020-21 base.

Segment Performance

• The Personal Care segment demonstrated strong consumer traction, delivering a robust growth of 33.4% in FY 2024–25. This momentum underscores the segments resilience and brand strength, contributing to a healthy CAGR of 16.5% from the FY 2020-21 base.

• The Food and Nutrition segment sustained its upward trajectory, registering growth of 13%, supported by category expansion, innovation and strategic acquisitions. This resulted in a consistent CAGR of 8.3% over the same base period FY 2020-21, reinforcing long-term potential in this space.

The Company continued to drive innovation by leveraging its strong Research & Development capabilities. A wide array of new product launches and portfolio extensions during FY 2024–25 underscored this commitment to innovation. While a comprehensive list of these innovations is available under corporate overview section, it is noteworthy that most of the new launches received a positive response from consumers, reflecting strong market relevance and brand trust.

The Company took proactive measures in response to concerns raised by global regulatory bodies regarding the consumption of non-nutritive sweeteners. In line with this, it launched Sugar Free Gold+, reformulated with Sucralose + Chromium, where Chromium contributes to the maintenance of normal blood glucose levels. The removal of aspartame also helped address consumer concerns and strengthen product trust.

Input Cost Management and Margin Performance

On the macroeconomic front, easing food Inflation contributed to a reduction in overall Inflation; however, price volatility–particularly in edible oils–remained a concern. The Company remained vigilant, closely tracking price movements of key raw materials and entering long-term contracts where feasible. Risk mitigation strategies included maintaining inventory buffers and diversifying the supplier base.

The Company experienced a gradual reduction in the prices of key inputs such as milk, sucralose and stevia. The Company also deployed strategic hedging, shift toward favourable product mix and calibrated pricing strategies. As a result, the Company achieved consistent margin expansion across all four quarters, with gross margin improvement of 168 basis points for FY 2024–25 and a cumulative 361 basis points added back over FY 2023–24 and FY 2024–25.

Expenses Overview

During the year, advertisement and promotion expenses grew by 18.6%, refiecting increased investments in brand visibility, market penetration and advertising through both media and non-media channels. Other expenses rose by 18.1%, mainly attributable to costs related to long-term strategic consultancy services and other expenditures aligned with evolving business requirements.

Profitability and Operational Efficiency

On the EBITDA front, the Company posted a growth of 23.2% for FY 2024–25, closing the year at C 3,797 million. Net profit (excluding exceptional items and one-time deferred tax assets) rose by 30% to C 3,410 million, reflecting robust operational performance and cost management.

Additionally, reported net profit as a percentage of revenue from operations improved by 1.3% on a year-on-year basis. Earnings Per share ("EPS") also registered strong growth of 30% from 41.94 to 54.52 in FY 2024-25.

Net Worth and Capital Employed

The total net worth as on March 31, 2025, was C 56,716 million, higher by 5.9% from the previous year. The return on equity (ROE = Reported Net profit / Equity) stood at 6.1% during the year. Return on Capital Employed (ROCE = Adjusted earnings before interest net of tax / CE) stood at 6.3% during the year.

Net Debt

The consolidated net debt of the Company as on March 31, 2025, was at C 754 million, against C 76 million last year.

Capital Expenditure

The Company has incurred capital expenditure of C 663 million in FY 2024-25.

Other Key Ratios

The Companys current ratio stood at 1.48 as of March 31, 2025, compared to 1.58 in the previous year.

The debtors turnover ratio, measured in days, increased to 49 days from 44 days in the prior year. This increase is primarily attributed to higher sales in the organised trade channel and a concentration of sales towards the end of the financial year, resulting in a longer collection cycle.

The trade payables turnover ratio improved marginally, reducing to 53 days from 56 days, indicating slightly faster payments to suppliers and a modest reduction in creditor days.

The inventory turnover ratio improved significantly, decreasing to 67 days from 73 days, reflecting better inventory management and improved sales velocity.

Market Leadership and Reach

The Company retained leadership positions across most categories that it operates in. Also, continued investments in distribution, category expansion, innovation, media campaigns, sales promotions and digital engagement further strengthened competitive positioning and market share across key brands. The Company today nourishes, nurtures and energises over 70 million families through an extensive omnichannel presence–including over 2.8 million retail outlets stocking Zydus Wellness products. This widespread availability underscores the strength of our brands and the Companys capability to meet the everyday needs and diverse shopping preferences of Indian consumers.

The Company continued to deliver on the seven key pillars that supported growth during FY 2024-25

A. Acceleration of growth of core brands

The Company continued to support the growth of both existing and new products through targeted marketing initiatives and a robust Go-To-Market ("GTM") strategy, tailored to the fast-paced and competitive FMCG environment. These efforts included multi-channel advertising campaigns, in-store promotions, strategic pricing and consumer engagement programmes aimed at building brand loyalty and driving product trials. The GTM strategy focused on optimising distribution networks, enhancing visibility at retail touchpoints, leveraging data analytics for demand forecasting and collaborating closely with trade partners to ensure swift product availability and shelf presence. Through these integrated efforts, the Company aimed to accelerate market penetration, improve brand equity and respond dynamically to shifting consumer preferences.

Glucon-D – Resilient performance

• Continued the successful campaign ‘Thakaan Gone, Energy On, reinforcing Glucon-Ds positioning as a trusted instant energy solution, especially relevant during peak summer months and high-activity occasions.

• Building on last years pilot in select key states, the Glucon-D Activors Electrolyte Energy Drink was extended to a broader national footprint. To drive relevance and differentiation, a new consumer-facing campaign ‘Energy Dilaye,

Active Banaye was launched, targeting the evolving energy needs of active consumers. y The brand was supported with a comprehensive 360? marketing approach, including ATL campaigns, digital activations and extensive on-ground initiatives. A mega sampling drive at various places including Maha Kumbh (The Worlds largest gathering), was executed to increase product trials and consumer engagement at scale. y Popular sports personality Irfan Pathan was onboarded as the face of the campaign, enhancing brand visibility, trust and connect, particularly among younger and fitness-oriented audience.

These concerted efforts were aimed at not only reinforcing Glucon-Ds leadership in the instant energy segment but also expanding its appeal among newer, more active consumer cohorts.

Complan – Supporting brand focused communication

By product portfolio expansion, Complan introduced new variants to cater to diverse consumer needs:

• Complan Immuno-Gro: Launched as a pilot in select states.

• Complan Viemax: Targeting adults, this high-protein milk-based drink is enriched with prebiotics and probiotics to support gut muscle strength and digestion.

The brand continues to be endorsed by renowned personalities like Madhuri Dixit and Sneha Prasanna for emphasising nutritional differentiation of the brand. For specific variants like Complan NutriGro and Complan Viemax, the brand has engaged healthcare experts and digital infiuencers to appeal to health-conscious consumers.

Sweeteners with Purpose: Driving Health-Conscious Growth and Engagement

• With a 360? campaign, Sugar Free Green consistently registered a double-digit growth over last four financial years.

• Introduced Sugar Free Dlite, Cookies and Chocolates in domestic market with fiavours like choco chip and mocha hazelnut, catering to health-conscious consumers.

• Sugar Free continues to run forums with doctors and key opinion leaders in regional languages to address concerns around non-nutritive sweeteners.

• Upgraded Sugar Free Gold to Sugar Free Gold+, reformulated with Sucralose + Chromium, where Chromium contributes to the maintenance of normal blood glucose levels. The removal of aspartame also helped address consumer concerns and strengthen product trust.

• Sugar Free Gold+ launched the #Take Control With Sugar Free campaign on World Diabetes Day, introducing a Sweetness Score Card to help users assess their sugar consumption habits and evaluate the risk of pre-diabetes.

Nycil – Leading the Way in Category Performance

• Continues to lead the prickly heat powder category with the highest market share.

• Registered strong growth ahead of the category, despite intensive competitive scenario building around the category.

• Nycil introduced its soap variant in four difierent fragrances in the international market.

Everyuth – Outpacing the category growth

• Everyuth continues its strong momentum with double-digit growth even in FY 2024-25, gaining significant traction in both volume and market share in the skincare and personal care categories, backed by a superior product experience.

• The core portfolio, including face washes, scrubs, peel-offs and body lotions, has strengthened its leadership position, driven by robust consumer demand and enhanced brand visibility.

• To meet evolving consumer needs, Everyuth launched the Pink Clay & Charcoal Face Wash, Face Pack and Face Scrub, combining purifying pink clay and detoxifying charcoal for a deep-cleansing effect. In Q4, the brand expanded into the Sheet Mask category, introducing three variants: Golden Glow, Anti-Pollution and Aloe Cucumber.

• TV and digital campaign continued to amplify brand visibility and drive consumer engagement, supporting the growth of its core product lines.

Nutralite – Volume growth driven by Dairy and spreads portfolio

• Continuously broadening the portfolio basket.

• Nutralite has extended a range of innovative offerings, including Nutralite Professional ("NLP") Cheese Analogue, NLP Fat Spread Rich, Nutralite DoodhShakti Professional Processed Cheese, Nutralite Carrot Mayo & Cucumber and Nutralite Active in Olive and Garlic & Herbs variants.

• Continued to support the brand with digital media, e-commerce channel activations and various customer engagement activities.

• The brand launched an AI-powered recipe platform to tap into the digital food market, ofiering unlimited recipes at the touch of a button through various methods, such as uploading a photo to get the recipe or sending a message with the dish name to a WhatsApp number.

• Focused celebrity engagements with Chef Sanjeev Kapoor to drive growth.

B. Diversifying the Portfolio with Strategic Acquisition and Brand Acceleration – Rite Bite

As part of our long-term strategy to expand our presence in the fast-growing healthy snacking segment, the Company successfully completed the acquisition of 100% equity share capital of NIPL during the year. NIPL owns and operates the brands RiteBite Max Protein (focused on protein-fueled healthy snacks) and RiteBite (focused on fiber-enriched and balanced nutrition snacks), with a diversified portfolio spanning nutrition bars, cookies, chips and other healthy snacking formats.

The acquisition strategically aligns with our commitment to scale our presence in health-focused, functional food categories. Post-acquisition, the integration of NIPL operations is progressing as per plan, supported by a comprehensive digital transformation roadmap.

Key operational systems and processes are being aligned with our enterprise-wide capabilities to unlock synergies in manufacturing, supply chain and go-to-market infrastructure.

NIPL has continued to deliver steady growth across its product portfolio, driven by rising consumer demand for protein-rich, low-calorie and on-the-go nutrition. Digital-first marketing, strong e-commerce visibility and increased consumer engagement through high-impact platforms such as marathons, fitness events and targeted influencer partnerships have enhanced brand visibility and relevance across key urban and health-conscious demographics.

The Company continued to invest in scaling brand presence through digital media campaigns, e-commerce activations and on-ground presence at major lifestyle and fitness events, enabling deeper consumer-connect. These brand-building initiatives, along with strategic distribution expansion and innovation pipelines, have reinforced our confidence in the long-term potential of the acquisition.

This acquisition not only diversifies our portfolio into high-growth, adjacent categories but also strengthens our positioning as a leading player in the health and wellness space, in line with evolving consumer preferences and our broader strategic vision.

Post acquisition introduced a choco-filled fiber bar - Melting Chocolate, along with two variants under the Fruit-filled bar range- Blueberry blast and Berry Delite -as well as Protein Bar Bytes.

C. Building International Presence

The Company is focused on scaling its international business by prioritising key regions such as SAARC, MEA, SEA and ISC. This includes entering new geographies and introducing innovative products tailored to regional market needs. During the financial year, the Company continued to strengthen its foundation across international markets. The Complan and Sugar Free franchises remain the flagship brands in these markets. Notably, despite challenging macro-economic conditions in Nigeria, the business delivered a positive performance.

D. Significant initiatives to grow scale and improve profitability

The Company has taken various initiatives to increase consumer base and improve profitability.

• As the world witnesses shift in consumer desires, choices and how they access them, the Companys prime focus is to innovate new products and extensions that fit into the consumers evolving preferences and bring novel solutions for category expansion. With the strong R&D team and state of the art R&D facility at Ahmedabad, the Company has a strong new product pipeline in place which could be launched at an appropriate time based on the market requirements and consumer needs. We ensure that all our new products are well researched and scientifically backed and substantiated.

• In todays competitive market, its crucial to identify the most effective channels for reaching potential and existing customers together and increase overall penetrations of its brands. The Company continues to drive growth of its iconic brands through reimagined narratives and exploring new approaches to media exposure for our brands to achieve consumer connection with greater precision. The Company has been able to increase overall penetration of its key brands.

• The Company has successfully transitioned from a distribution-led model to establishing direct relationships with all modern trade and e-commerce partners. This strategic disintermediation has enhanced supply chain efficiency, improved product availability, reduced lead times and delivered margin benefits. Complementing this shift, the Company has steadily increased its focus on organised trade, introducing channel-specific offerings designed to resonate with new-age consumers.

• As a result, organised trade saliency continued to strengthen, reaching 23% in FY 2024-25–comprising 10% from e-commerce and 13% from modern trade (MT). Quick commerce has emerged as a key growth driver within e-commerce, now accounting for 41.4% of total e-commerce sales, supported by its lower cost-to-serve advantage over traditional e-commerce channels.

• As the Company continues to grow in scale and launch new products and extensions, it is imperative to make these products available across channels to reach to the consumers who are looking for such offerings through a right mix of distribution reach. The Company today nourishes, nurtures and energises over 70 million families through an extensive omnichannel presence–including over 2.8 million retail outlets stocking Zydus Wellness products.

E. Digital Transformation & Data-Led Decision Making

As consumer behaviour shifts to digital, the Company has fast-tracked its digital transformation to enhance customer engagement, streamline operations and improve decision-making. Investments in advanced analytics and AI-driven tools have optimised media spend, improved demand forecasting and streamlined inventory management. The focus on Direct-to-Consumer ("D2C") via brand-owned e-commerce platforms and marketplace integrations has strengthened consumer connections and data ownership.

As part of its ongoing commitment, the Company continues to invest in digitalisation, automation and real-time capabilities to drive operational excellence and future-ready growth.

F. Sustainability & ESG Integration

Recognising the growing consumer and investor emphasis on responsible business, the Company has made sustainability a core strategic priority:

• Sustainable packaging initiatives including increased use of biodegradable, recyclable, or reusable materials across product lines.

• Adoption of green manufacturing practices – reducing water, energy consumption and waste across facilities.

• Ethical sourcing partnerships established with suppliers to ensure fair labour practices and environmentally conscious raw material sourcing.

• Active monitoring and progress reporting on ESG goals, with alignment to global standards.

• For more details refer the BRSR and ESG section, which forms part of the Integrated Annual Report.

G. Talent & Culture Transformation

People are the core of innovation and execution. The Company continues to foster a culture of performance, agility and inclusion:

• Rolled out a Leadership Development Programme to nurture internal talent pipelines and support succession planning.

• Focused on enhancing employee experience through wellbeing programmes and digital HR tools.

• Initiatives on gender diversity, through targeted hiring.

• We also follow a structured recruitment and development approach to attract, nurture and retain top talent. This year we onboarded number of employees, strengthened our future pipeline through programmes like COMPASS and Project Gurukul and enhanced engagement via initiatives like LeaderScape and Zydus Wellness Chronicles.

• We continued to be certified as ‘Great place to work.

Building Stronger Stakeholder Relationships

The Company actively manages a range of key stakeholder relationships and strive to ensure open, honest and constructive communication. This supports the development of the business through a robust engagement process for both internal and external stakeholders.

The stakeholder network includes Employees

Employees are key stakeholders who drive business objectives as a cohesive unit. It is therefore imperative for the Company to address their needs, challenges and aspirations. The following initiatives are undertaken:

1. Employee Engagement

• Employee-Friendly Workplace

Our organisational culture promotes collaboration, innovation and employee empowerment, creating an inclusive and engaging work environment.

• Safe and Respectful Workplace

We are dedicated to ensuring a physically and psychologically safe workspace for all employees. Robust policies such as the Prevention of Sexual Harassment ("POSH") at the workplace, Occupational health safety policy, Human Rights policy help reinforce our commitment to dignity and respect.

• Performance Recognition

A fair and transparent performance management system forms the cornerstone of our recognition framework. Grounded in meritocracy, collaboration and execution excellence, it ensures that outstanding contributions are acknowledged and rewarded.

• Feedback Mechanisms

Regular and open communication is key to our culture. Initiatives such as Chai pe Charcha for field sales teams and Expresso with the CEO for mid-level managers provide platforms for one-on-one dialogue, allowing employees to voice their perspectives and share feedback directly with leadership.

• Employee Recognition and Celebration

We believe in celebrating achievements and milestones. Formal recognition programmes, annual off-sites, sales conferences, team-building events and monthly birthday celebrations foster a strong sense of belonging and camaraderie.

• Employee Wellness

Emphasising a holistic approach to wellbeing, we have introduced a comprehensive Health and Wellness Policy. As part of this initiative, free health check-ups have been conducted for the majority of our employees. Additionally, we are offering reimbursements for health initiatives undertaken by employees, further encouraging proactive care and healthy lifestyle choices.

2. Professional Development

We believe that professional development is the foundation of sustainable growth. Our initiatives are designed to build individual capabilities and cultivate leadership at every level.

• Talent Management

Through structured talent reviews and succession planning, we identify and nurture top talent for critical positions, ensuring we are prepared for the future with a strong internal talent pipeline.

•Skills Development & Training

Our comprehensive learning framework includes technical training at facilities and customised learning modules to meet evolving organisational and employee needs.

• Leadership Development

Focused leadership development programmes, supported by tools like Hogan 360, empower employees to become inspiring and value-driven leaders equipped to drive performance and engagement.

3. Rewards

• We are committed to fostering a culture of appreciation by recognising and celebrating the contributions of our employees. To support this, we have strengthened our recognition and rewards framework with initiatives such as quarterly individual and team awards, along with SPOT awards that highlight exceptional performance and everyday excellence. y These efforts have played a vital role in Zydus Wellness being continued as certified as a Great Place to Work, reinforcing our dedication to building an environment where employees feel valued, supported and empowered to succeed.

Shareholders & Investors

The Company values the trust and confidence placed in it by shareholders and investors and is committed to maintaining effective, transparent and timely communication through the following initiatives:

• Quarterly investor conference calls with analysts and institutional investors to share performance updates and address queries.

• Investor presentations, along with earnings call transcripts and audio recordings, are made available on the Companys website and filed with the stock exchanges.

• Annual General Meetings ("AGMs") are conducted and the Annual Report is published on both the Companys website and the stock exchanges.

• Press releases regarding key developments are published on the Companys website and the stock exchanges to ensure consistent stakeholder updates.

• Financial results and statements (unaudited/audited) are disclosed on a quarterly, half-yearly and annual basis across the Companys website, stock exchanges and leading newspapers.

• A dedicated Investors section is maintained on the Companys website in accordance with regulatory requirements, offering easy access to relevant disclosures and updates.

• Investor grievances are actively addressed through the Stakeholders/Investors Relationship Committee, comprising Independent and Non-Executive Directors.

• The Company upholds robust corporate governance practices, ensuring accountability, transparency and ethical conduct across all levels of the organisation.

Consumers

At the heart of our business is a deep commitment to prioritising consumers and adapting to their evolving needs through the following initiatives:

• Ongoing consumer engagement to understand preferences and deliver relevant product and packaging solutions.

• Consumer-validated decision-making, where key business strategies are shaped by direct consumer insights, ensuring relevance and impact.

• Empowering informed choices by sharing clear, accessible product information across various media platforms and social awareness campaigns.

• Delivering superior consumer experiences through high-quality products and continuous innovation driven by the latest advancements in science.

• Enhancing value for consumers by actively optimising cost structures and improving affordability without compromising quality.

• Providing responsive support by promptly addressing consumer queries, feedback and grievances through efficient service channels.

• Facilitating product trials by offering free sampling of new launches across both digital and physical touchpoints to encourage discovery and feedback.

Government & Regulatory Authorities

The Company actively supports the government and regulatory authorities through collaborative efforts aimed at policy development and community advancement, including:

• Engaging in policy advocacy by working with government bodies through industry associations to contribute to informed decision-making.

• Supporting government-led initiatives focused on community welfare, development and social impact.

• Participating in key forums such as seminars, meetings and conferences organised by government entities and industry associations to share insights and foster dialogue.

Suppliers & Vendors

The Company supports its suppliers and vendors through consistent engagement and collaborative practices, including:

• Organising dairy camps to connect with farmers and strengthen the supply chain.

• Providing education and health support by distributing mineral mixtures and deworming tablets for better animal health.

• Staying connected with key suppliers through regular virtual and physical interactions to ensure smooth supply in a changing environment.

• Using fair contracts and shared processes to help improve quality and build trust.

• Holding regular meetings between suppliers and company management to discuss progress and future plans.

• Sharing regular updates on quality standards and service expectations to support continuous improvement.

Planet & Society

The Company contributes to the planet and society through the following actions:

• Adhering to all rules and regulations to ensure responsible business practices.

• Developing responsible products that prioritise sustainability and social impact.

• Engaging in policy advocacy to support positive changes for the environment and society.

• Participating in environmental and sustainability initiatives, focusing on energy conservation, water usage and waste reduction.

y Taking part in working groups, events, conferences and community development activities to foster broader societal impact.

• As part of our commitment to transparency and sustainable business practices, we are actively working towards obtaining an ESG score from the globally reputed rating agency, S&P Global. This initiative reflects our dedication to aligning with international ESG standards and continuously improving our performance in these critical areas. Our commitment to collaborative engagement helps us make informed decisions, increase transparency and build valuable relationships with our stakeholders.

Additional details can be found in the Stakeholder Engagement and Materiality Assessment sections of the Integrated Annual Report.

Risk

Risk identification, Risk mitigation and Internal controls

The Companys business comprises manufacturing and marketing of consumer wellness products. Its presence in these segments exposes it to various risks which are explained below.

Risk of fluctuations in prices of key inputs

Prices of key ingredients used in the products manufactured and marketed remain volatile due to several market-related factors, including changes in government policies, Inflationary environment and fluctuations in the foreign exchange, resulting in price fluctuations of products. The Company keeps a close watch on the prices and enter long term contracts, wherever feasible, to minimise the risk of fluctuations in the input prices. The Company has also adequate inventory buffers as a risk mitigation measure and there is a continuous effort to increase supplier base in case risk is perceived.

Risk of competition and price pressure

Though most of the Companys products enjoy leading positions in their respective categories, the risk of competition from existing players as well as from new entrants remains high. However, the Companys strength in the marketplace, coupled with its continuous thrust on improving the quality of its products and offering newer products in the wellness segment provide it with an edge over competition. The Company supplies its products in both retail as well as institutional segments. Both segments have their own nuances in terms of customer expectations, competition and pricing. However, the Company is well focused on increasing its share in all segments through a sound marketing strategy and a balanced approach.

Risk of evolving customer tastes, preferences and behaviour

The Covid-19 pandemic has resulted in notable changes in consumer habits and demands which require continued innovation to remain relevant and competitive. While the focus remains on accelerating the growth of core brands through innovation, the Company may lose market share and competitive advantage owing to shifts in consumer behaviour.

Risk of litigation related to quality of products, intellectual properties and other litigation

Being in the consumer healthcare and wellness segment, the Companys products and their manufacturing and supply chain processes are required to maintain high quality standards. Any deviation from prescribed regulations or any variation in quality from standards laid down by regulatory authorities can lead to actions from these authorities or litigation from its customers. The Company has implemented various policies such as quality risk management, food safety management systems and regulatory controls. Different SOPs such as global food safety management, compliance standards for manufacturing facilities and self-inspection are also implemented. Dedicated team has been deployed to continuously keep a watch on recent changes in regulatory requirements and evaluate their likely impact on the Company to enable proactive measures to mitigate any possible risks of regulatory actions. The Company has procured adequate insurance against the risk of products being recalled from the markets due to quality issues. The Company also faces the risk of litigation from its competitors or customers on claims it makes for values its products ofier. The Company always strives to ensure the highest standard of quality for its products and processes and continuously works on improving upon that quality. It also maintains a high level of accuracy in product claims. Having a strong brand equity in each of the segments, the Company faces the risk of unauthorised and illegitimate use of its brand name, packaging designs and other intellectual properties related to its products. The Company ensures protection of its intellectual properties through appropriate registrations and other legal means.

Geopolitical, Trade Disputes and Macro Economic Risks

The Company operates in a complex global environment and is exposed to risks arising from international trade disputes, protectionist policies and macro-economic or geopolitical disruptions. Trade tensions between countries may result in sudden changes in tarifis, import/export duties and the imposition of non-tarifi barriers, leading to increased input costs, restricted market access and supply chain bottlenecks. Similarly, geopolitical and macro-economic challenges–such as political instability, military conflicts, terrorist threats, currency devaluation, Inflation and global events–can have widespread implications, including disruption of trade flows, commodity shortages and volatility in resource prices like oil and gas, affecting industrial output and operations worldwide.

In response to these challenges, the Company actively monitors geopolitical developments and collaborates closely with trade consultants and local partners to ensure compliance and continuity of operations. It is also taking strategic measures to enhance resilience, including diversification of sourcing and manufacturing locations, portfolio diversification to reduce dependence on individual markets or products, localisation of manufacturing to mitigate foreign exchange risks and geographic expansion into more stable markets.

Under Penetration of Category

The Company is continuously investing in the development of its brands and the category it operates in. Some of the categories in which the Company operates are under penetrated currently which poses one of the risks for the aspiration and growth strategy of the Company. The Company constantly innovates to meet the expectation of all its customers and therefore ofiers unique product propositions which would help to grow the brands and their respective categories.

Impact on business due to risk of shift or delay in seasons

The delay or shift in seasons may impact business of some of the brands like Glucon-D and Nycil which are largely dependent on onset of a good summer season in India. This risk can be mitigated by having flexibility in its supply chain to manage the inventory.

Counterfeit Products

The production of counterfeit products poses significant threat to the Companys credibility resulting in loss of sales and customer trust in the brand. The risk is mitigated by taking timely legal action against the fraudulent practices to safeguard its interests.

Supply chain disruptions

Covid-19 and geopolitical uncertainty around the world has put the resilience and continuity of the Companys supply chain at risk. The supply chain network is exposed to potentially adverse events such as physical disruptions, environmental and industrial accidents, labour unrest, trade restrictions or disruptions at a key supplier, which could hamper the Companys eficiency and delivery. These risks may be mitigated by adaptive distributed manufacturing footprint, following harmonious labour practices, always ensuring sufficient inventory and having more than one source of critical supplies.

Category Growth Constraints in Emerging Markets

While the Company sees emerging markets as potential growth drivers, certain categories are yet to mature in these regions due to lower awareness, regulatory limitations, or price sensitivity. This poses a challenge to achieving the desired market penetration. The Company adopts a phased market-entry strategy backed by consumer education programmes, affordability initiatives and alliances with local players to foster category development.

Dependence on Key Brands or Products

A significant portion of the Companys revenues may be derived from a few key brands. Any disruption or loss in consumer confidence in these brands due to quality, supply, or competitive factors may adversely affect business performance. The Company continuously works on brand rejuvenation, diversification of product portfolio and investment in R&D to launch adjacent offerings under its trusted brand umbrella.

Consumer Trust and Brand Reputation

Consumer wellness and healthcare products require a high level of trust. Any negative publicity–whether due to misinformation, influencer backlash, or social media controversies–can quickly impact the brand. The Company has established a crisis communication plan and actively monitors online sentiment to proactively address issues.

Cyber Security

The cyber-attack threat of unauthorised access and misuse of sensitive information poses a great threat to business with the increase in digitalisation efforts and the hybrid model of working. This makes the Companys business operations vulnerable and may inhibit performance. The Company has implemented and installed necessary security tools to safeguard against cyber-attacks.

Risk management and Internal Control Systems

The Company has established a well-defined process of risk management, wherein the identification, analysis and assessment of the various risks, measuring the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimise the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the board to ensure that business operations are directed towards attaining the stated organisational objectives with optimum utilisation of resources. Apart from these internal control procedures, a well-defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by a reputed firm of chartered accountants. The Audit Committee regularly reviews the reports of the internal auditors and recommends actions for further improvement of operations in general and financial controls.

Talent Acquisition, Retention and Development Risks

In an increasingly competitive FMCG landscape, the ability to attract, retain and develop skilled talent–particularly in critical functions such as innovation, digital, Sales and supply chain–is essential for sustaining productivity and driving long-term growth. High attrition rates or gaps in key skill areas can significantly hamper operational efficiency and innovation capability.

The Company takes a comprehensive approach to talent management and human capital development. It has instituted robust employee engagement programmes, leadership development pipelines and flexible work practices to support retention and upskilling efforts. In addition to these strategic talent initiatives, the Companys HR function plays a vital role in ensuring equitable compensation, fostering diversity and inclusion, managing workplace concerns and driving overall employee satisfaction.

Recognising the importance of employee wellbeing, the Company has implemented comprehensive safety protocols across all its locations. This dual focus on professional development and holistic wellbeing reflects the Companys deep commitment to building a resilient, future-ready workforce.

Changes in Regulatory and Tax Environment

Changes in regulatory policies, tax structures, or implementation of new compliance laws across jurisdictions may affect pricing, profitability and ease of doing business. The Company actively monitors policy changes and works with industry bodies and legal advisors to prepare timely responses and adjust its business models accordingly.

Environmental, Social and Governance Risks

Increasing focus on sustainability from regulators, consumers and investors may expose the Company to ESG-related risks such as plastic use, carbon emissions and ethical sourcing. Failure to meet these expectations may lead to reputational damage or regulatory sanctions. The Company has initiated a robust ESG roadmap including greener packaging solutions, waste reduction programmes, responsible sourcing practices and periodic ESG disclosures.

We continue to strengthen our resilience and drive sustainable growth by proactively managing risks and seizing emerging opportunities. For more details, refer to the Risks and Opportunities section of the Integrated Annual Report.