Strides Pharma Science Ltd Management Discussions

Economic environment

Global Economy

In 2024, the world economy grew at a moderate rate of 3.3% as per IMF, signifying a phase of relative stability. As we progress through 2025, the global environment is seeing a substantial transformation, prompted by nations realigning their policy priorities in reaction to escalating geopolitical tensions and increasing economic difficulties.

The United States has implemented a series of additional tariff measures, eliciting immediate and vigorous responses from key trading partners. This resulted in the enactment of nearly universal tariffs on April 2, 2025. Consequently, effective tariff rates have escalated to unprecedented heights, inflicting a severe and detrimental impact on global GDP. In light of this uncertainty, worldwide headline inflation is projected to decrease at a slower rate than previously planned. IMF projection indicates a decline to 4.3% in 2025 and thereafter to 3.6% in 2026. The revision indicates elevated inflation projections for industrialised nations, somewhat counterbalanced by slight downward modifications in emerging markets and developing economies.

GDP growth projections (in %)

	2024	2025	2026
Global Economy	3.3	2.8	3.0
Advanced Economies	1.8	1.4	1.5
Emerging Markets and Developing Economies	4.3	3.7	3.9

(Source: IMF, World Economic Outlook, April 2025)

United States:

The United States anticipates an economic growth rate of 1.8% in 2025, a figure that has been adjusted downward because of stringent monetary policy alongside increasing trade disruptions. The current outlook suggests that inflation may persist at a heightened level of approximately 3%, with recent tariff measures contributing an estimated additional one percentage point to this figure. The current landscape indicates a decline in domestic consumption, while the manufacturing sector faces challenges due to increasing input costs, compounded by ongoing global supply chain pressures.

China

Chinas growth is experiencing a moderation, with projections adjusted to 4% for 2025. This adjustment considers the effects of weakened external demand, continued internal deleveraging, and the ongoing structural shifts towards a consumption-driven economy. The outlook suggests that inflation will likely stay subdued, with the possibility of transitioning into a deflationary phase.

Euro Area:

The eurozone continues to face challenges with subdued consumption and exports, leading to a revised GDP growth forecast of 0.8% for 2025. The ongoing political instability in certain regions, coupled with enduring energy insecurity, poses challenges to investor confidence, particularly in Germany and

France.

Emerging Markets and Developing Economies (EMDEs):

The growth trajectory of emerging markets and developing economies is currently exhibiting signs of moderation, with notable effects observed in nations such as Mexico, South Africa, and Argentina. The elevated levels of debt and the decline in currency values within these markets are contributing to increased inflationary pressures while simultaneously limiting the flexibility of policy options. Concurrently, numerous developing nations are facing increasingly stringent financing conditions and a waning interest from investors, which is exacerbating their economic vulnerabilities.

Outlook

Regardless of the difficulties that the global economy is currently experiencing, this period presents a one-of-a-kind chance to increase resilience and map out a more sustainable route forward. There is a possibility of recovery if the appropriate combination of coordinated policies and proactive reform is implemented, as seen by the adaptability displayed by many economies that are under strain.

Countries can assist a global recovery that is more balanced and inclusive if they collaborate to create a trading environment that is stable and transparent, make progress towards timely debt resolution, and address structural imbalances. The road that lies ahead will require international cooperation to be successfully navigated. It is possible for the global economy to restore momentum, rebuild buffers, and open new chances for prosperity across regions if coherent strategy, strong leadership, and commitment to shared progress are implemented.

As per IMF, Indias GDP expanded by 6.5% in FY 2024-25, solidifying its status as one of the fastest-growing major countries amid global uncertainties.

This performance was supported by structural reforms, swift digital transformation, and ongoing infrastructure investments, which combined fortified the countrys economic base. Strong domestic demand and ongoing private sector investment contributed further impetus across several sectors.

Monetary policy became accommodative throughout the year. The Reserve Bank of India decreased the repo rate by 25 basis points to 6.25%, aiming to reconcile inflation management with the necessity to enhance ation, and credit flow and investment. This supportive position enhanced liquidity and facilitated corporate growth. Indias trade performance exhibited resilience externally, with total exports increasing almost 6% year-on-year. Services exports developed as a significant contributor, enhancing Indias stake in global services trade and solidifying its status as a leading global services exporter.

Global pharmaceutical industry development

The pharmaceutical sector worldwide is experiencing continuous growth, driven by factors including product innovation, increased healthcare access, and heightened demand for specialty medications. Developed markets are propelling growth by adopting innovative, high-value therapies, whilst emerging economies are seeing momentum from greater volumes and elevated expenditure on complex treatments due to expanded healthcare coverage.

According to IQVIA, the market is expected to expand at a compound annual growth rate of 6 to 9 percent, with a value of US$2.23 to 2.25 trillion by 2028. This expansion is influenced by the rising prevalence of chronic diseases, lifestyle-related health concerns, and heightened knowledge of preventative and long-term care. The growing older demographic is exacerbating the demand for comprehensive and accessible healthcare solutions.

The interrelated advancements in consumption, employment, investment, policy, and trade created a unified context for enduring economic performance. Indias capacity to manoeuvre through a turbulent global landscape while promoting internal transformation underscores its increasing resilience and preparedness for forthcoming opportunities and challenges.

Outlook

Indias FY 2025-26 economic outlook is cautious and resilient due to domestic strengths and global uncertainties. Commodity price volatility, trade interruptions, and geopolitical concerns may hinder growth. Due to structural stability and a strong policy framework, the economy should be able to weather these threats. Maintaining momentum requires accelerating corporate wage growth, improving consumer mood, and boosting private sector investment in critical industries. Agriculture, lower food inf stability should boost rural demand. These elements are crucial for inclusive growth and consumption. Indias global competitiveness is likely to improve with targeted deregulation and grassroots structural reforms.

The entire pharmaceutical value chain is experiencing a profound upheaval in response to these shifts. Organisations are prioritising transformative breakthroughs, broadening access to healthcare, utilising emerging technology, and improving operational efficiency. Simultaneously, collaboration across the healthcare ecosystem is intensifying, bolstered by advantageous government policies designed to foster long-term resilience. The industrys capacity to navigate uncertainty was well showcased throughout the epidemic via its swift and imaginative worldwide reaction.

Global pharmaceutical market growth

Region	2028	2024-2028 CAGR
Developed	1,775-1,805	5-8%
Pharmerging	400-430	10-13%
Lower income countries	33-37	3-6%
Global	2,225-2,255	6-9%

Source: IQVIA Market Prognosis, September 2023; IQVIA Institute, December 2023

Global pharmaceutical market by product type in 2028 (projected)

Spending	Developed	Pharmerging	Lower Income Countries	Global
Original brands	1,390-1,420	110-130	9-13	1,520-1,550
Non-original brands	165-185	130-150	15-19	315-345
Unbranded generics	125-145	53-73	1.5-2.5	185-205
Other	68-88	84-104	3.5-4.5	165-185

Principal trends influencing the industry

The global pharmaceutical sector is experiencing a profound shift. Transforming healthcare requirements, technolog y upheavals, and changing commercial anticipations are prompting organisations to reassess established methods. As the industry traverses a multifaceted environment, five critical trends are emerging as essential foundations for future growth and resilience. Aging population: Growing lifespan and falling fertility are increasing global ageing, doubling the 60-plus population by 2050. As age-related diseases like cardiovascular disease, diabetes, cancer, and neurological illnesses increase, healthcare demand, notably in the pharmaceutical industry, remains high. Pharma businesses prioritise cardiometabolic, cancer, CNS, and pain management. Biologics, tailored treatments, geriatric-friendly formulations, and access and adherence-supporting digital health solutions are innovating. Immigration may also reduce healthcare workforce shortages in ageing economies. Companies will have to align portfolios with demographic needs, improve public health integration, and provide patient-centric, cost-effective aged care solutions to stay future-ready. Ageing drives pharmaceutical sector growth, not simply demographics.

Reinventing business models

Pharmaceutical businesses are transitioning from traditional frameworks. The emphasis is increasingly on streamlined, technology-driven, and more patient-oriented models that can more effectively match with changing market conditions and stakeholder demands.

Transitioning from treatment to prevention and personalisation

The future of healthcare is advancing towards proactive and individualised solutions. Predictive analytics, preventive care techniques, and point-of-care delivery are more prevalent, facilitated by enhanced biological understanding and advanced technologies that enable customised interventions.

M&A with a purpose

Strategic mergers and acquisitions are increasingly focused, prioritising digital and biotechnology competencies. These agreements pertain not only to scale but also to the acquisition of innovation, the fortification of pipelines, and the expeditious transition to value-based care models.

Adopting artificial intelligence and sophisticated technologies

Collaboration between humans and machines is becoming fundamental to pharmaceutical operations. Artificial intelligence and machine learning are transforming various sectors, including drug research, clinical trials, supply chains, and customer engagement, thereby improving agility and accuracy universally.

Positioned for growth

For Strides Pharma, these trends present strategic opportunities. The Company is focused on expanding its portfolio and strengthening its presence in regulated and emerging markets. Investments in R&D and geographic expansion will enable Strides to capture value from high-growth areas while maintaining affordability in essential medicines. By aligning with evolving industry dynamics, Strides is well-positioned to drive growth and enhance patient access to quality medications.

Outlook

Over the course of the next five years, it is anticipated that developed countries will place a greater emphasis on sophisticated and high-value medicines, whilst emerging nations will continue to look for a balance between affordability and wider access. This shift illustrates the growing role that the pharmaceutical industry is playing in addressing unmet medical needs, even though it is facing mounting hurdles in terms of cost. To preserve the affordability of healthcare and enhance the outcomes for patients all over the world, companies will continue investing in innovation and to make generics and biosimilars more widely available.

Spending on pharmaceuticals is increasing in line with the overall cost of healthcare. This trend can be attributed to several factors, including expanded insurance coverage, a growth in the number of people who self-medicate, and the relatively lower cost of medications in comparison to other medical treatments. When it comes to expanding access to medical care, countries with lesser incomes are increasingly relying on generics and branded generics, while developed regions are making progress with patented and branded therapies. This contrast reflects the global industrys ongoing challenge of balancing innovation with cost-effective healthcare delivery.

The world of Strides Pharma

At Strides Pharma Science Limited, we are a global pharmaceutical company focused on developing and manufacturing niche finished dosage formulations. We operate in over 100 countries and have built a strong global manufacturing presence, with seven facilities across four continents, four of which are approved by the US FDA. This footprint enables us to serve diverse markets with high-quality, reliable products. In FY 2024-25, we delivered a strong performance, reflecting our focused execution, resilient business model, and commitment to sustainable growth.

Creation of OneSource - continuing our legacy

The successful listing of OneSource marked a significant milestone in our journey of consistent value creation. This achievement resulted in the delivery of incremental value of approximately 78,800 million for the shareholders of Strides, reinforcing our commitment to enhancing c stakeholder wealth.

With the completion of this transaction, Strides and OneSource now operate as two independently listed entities, each aligned to its distinct strategic priorities. Both companies are governed by their respective Boards and led by experienced management teams, ensuring focused execution and strengthened accountability.

This strategic move has also simplified the corporate structure, enabling each entity to fully leverage its specifiopportunities, corestrengths,pursuemarket-and drive sustainable growth independently.

We remain focused on our commitment to delivering long-term shareholder value through disciplined execution, operational excellence, and a continuous focus on innovation and growth.

Financial Summary

	FY25	FY24	YOY Change
Revenue (m)	45,653	38,945	17.2%
Gross Margins (m)	25,854	21,455	20.5%
Gross Margh (%)	56.6%	55.1%	154bps
EBITDA (m)	8,028	5,868	36.8%
EBITDA Margin (%)	17.6%	15.1%	252bps
Operational PAT (m)	3,447	279	12x
Operational EPS ()	37.5	3.1	12x

Operational PAT = Reported PAT from continuing operations excluding exceptional/ items

Numbers presented have been adjusted to refect the impact of the demerged softgel business to onesource

Key ratios

Particulars	FY 2024-25	FY 2023-24
Debtors turnover	3.89	3.19
Inventory turnover	1.65	1.54
Interest coverage	3.12	1.52
Current ratio^	1.24	1.10
Debt to equity	0.69	1.17
EBITDA margin (%)	17.6%	15.1%
Operational PAT %	7.6%	0.7%

^Current liabilities exclude current maturities of long-term borrowings

US Pharma Industry Landscape

Industry landscape

In 2024, the U.S. pharmaceutical market demonstrated robust momentum aligned with our long-term growth aspirations. Market dynamics were shaped by increased utilisation of innovative therapies, continued dominance of generics in chronic care, and evolving policy frameworks aimed at improving affordability and access.

Overall medicine use increased significantly, with prescription utilisation rising by 1.7% to 215 billion days of therapy. This growth reflects improved access to treatments for chronic conditions, increased engagement by Medicare beneficiaries, and the introduction of novel therapies. Notably, net market expenditure rose by 11.4% in 2024, compared to 4.9% in the previous year. This increase was primarily driven by higher adoption of high-impact treatments particularly in diabetes and obesity rather than broad-based price increases.

Specialty medicines saw particularly strong growth, outpacing traditional therapies in both usage and spending due to a steady stream of new launches and typically higher price points. Oncology spending increased by US$14 billion year-over-year, reaching

US$103 billion on a net basis, reflecting broader uptake of a growing pipeline of novel cancer treatments introduced over the past decade. Immunology spending rose by US$7 billion, despite biosimilar competition and the loss of exclusivity for adalimumab (Humira), indicating strong demand for alternative branded options. Similarly, new therapies in HIV treatment, especially Integrase inhibitor and NRTI combinations contributed to a US$1 billion increase in HIV-related spending.

While therapeutic innovation has enhanced patient outcomes, access barriers persist. More than 50% of new prescriptions for novel therapies remain unfulfilled due to cost concerns, highlighting the ongoing need to address affordability. Initiatives under the Inflation Reduction Act (IRA), including caps on insulin costs and reduced Medicare out-of-pocket liabilities, have begun to alleviate financial burdens

However, structural challenges such as restrictive insurance designs and high out-of-pocket expenses continue to impact patient access, especially for cutting-edge therapies.

Generics: Foundation of access amid shifting market dynamics

Generic medicines continue to serve as a cornerstone of the U.S. healthcare system, accounting for approximately 90% of all prescription volumes in 2024. Their critical role in managing chronic conditions such as hypertension, mental health disorders, lipid regulation, and gastrointestinal issues remains unchanged, with substitution rates in many of these areas exceeding 98%. post-loss of exclusivity (LOE) has slowed, with payer rejection rates exceeding 25% for new generic claims within two years of launch. This trend has delayed patient access and limited the commercial viability of new generics. Additionally, price erosion once a hallmark of competitive generics markets has begun to moderate, especially in already commoditised segments.

In high-growth therapy areas such as diabetes, obesity, and immunology, branded products have gained substantial share, reflecting the strong uptake

In 2024, branded drugs represented nearly 50% of diabetes prescriptions and over 60% of obesity-related treatments. The absence of generic or biosimilar alternatives for many of these new therapies has shifted the therapeutic mix and delayed substitution opportunities.

Regulatory and policy landscape

Structural reforms under the IRA and changes to Medicare Part D continue to reshape the Structural reforms under the IRA and changes to Medicare Part D continue to reshape the pharmaceutical market landscape. These policies are expected to generate long-term savings and improve affordability but may also introduce pricing pressures and compliance burdens for manufacturers. For generic companies, the new environment necessitates greater operational agility and strategic engagement with payers to ensure sustained access and competitiveness.

IQVIA projects that small molecule LOEs could generate approximately US$90.9 billion in cumulative savings between 2025 and 2029. Capturing this opportunity will depend on overcoming systemic barriers to generic uptake including regulatory clarity, payer alignment, and streamlined substitution pathways.

At the same time, U.S. medicine spending is forecast to grow by 3% to 6% annually through 2029, propelled by continued innovation and offset in part by price cuts and patent expiries. By 2029, net spending is projected to rise by US$ 116 billion compared to 2024 levels. On a list-price basis, total spending is expected to grow between 5%-8% annually, with net growth of 3%-6% after accounting for discounts and rebates.

The U.S. market as a continues to be source of value creation, underpinned by innovation in specialty therapeutics and the enduring relevance of generics in foundational care. As the U.S. healthcare environment continues to evolve, our strategy is built around agility, innovation, and access.

Our progress in the U.S.

The United States remains the largest and most attractive pharmaceutical market, offering significant opportunities for growth. We leverage our strong R&D capabilities to target 15-20 filings each year, while capitalising on our established front-end infrastructure to scale operations. Among Indian peers, we rank among the fastest-growing companies in the US generics space.

Our US strategy is built on a focused portfolio of niche products, disciplined pricing, and carefully timed launches. This differentiated approach has helped us protect margins and sustain profitability, even amid a challenging market environment. Backed by USFDA-approved facilities and continued R&D investments, we are well-positioned with a broad portfolio of approved products to drive future growth and innovation. The US business recorded Rs. 24,457 million ($291m) in revenue, representing 21.8% YoY growth and exceeding the outlook. This was propelled by new product launches, steady base business, and a strong commercial execution framework.

U.S. medicine spending is forecast to grow by 3% to 6% annually through 2029, propelled by continued innovation and offset in part by price cuts and patent expiries. By 2029, net spending is projected to rise by US$ 116 billion compared to 2024 levels.

Key highlights, FY 2024-25

• Continued to strengthen market share underpinned our growth momentum.

• Received 5 product approvals and launched 7 products.

• Commercialised products in the US stood at 73

• Maintained strong market share across the portfolio, supporting year-on-year growth

• Delivered industry-leading customer service with near-zero Failure-to-Supply penalties

Road ahead

In the Generics segment, we have identified 60 dormant ANDAs for reactivation over the next three years. These products are progressing through various regulatory phases, including Prior Approval Supplements (PAS) related to source changes and cost efficiencies. Their relaunch is integral to our strategy of reaching the US$400 million revenue from generics milestone.

Beyond Generics, we have made targeted investments in high-value segments such as Controlled Substances, Nasal Sprays, and 505(b) (2) products laying the groundwork for our next phase of growth. We filed our first Nasal

Spray product with the USFDA in Q1FY 2025-26, reinforcing our commitment to innovation and long-term value creation.

Other regulated markets: Maximising portfolio and pursuing partnerships

Industry landscape

European Union (EU5)

EU5 pharmaceutical markets (UK, Germany, France, Italy, and Spain) are predicted to expand by US$70 billion from 2024-2028. This expansion will be driven by new product launches, generics, biosimilars, and altering healthcare policy, however economic and regulatory variables will affect the speed of growth. Germany and the UK will see faster rise in medicine spending, while Italys budget constraints limit spending. Medicine spending in the EU5 is estimated to climb 4-7% annually, reaching US$250-300 billion by 2028.

In speciality areas like oncology, neurology, and immunology, new brands and innovation will fuel market expansion. However, tougher reimbursement decisions and financial concerns may restrict the pace of adoption. Loss of Exclusivity (LOE) for several blockbuster pharmaceuticals will lower prices, while generics and biosimilars will save US$18 billion, offsetting spending increases.

Economic and geopolitical considerations increasingly inf luence healthcare spending. The Russia-Ukraine conflict has raised energy and inflation, forcing governments to tighten budgets using price controls, rebates, and return systems to balance cost management and pharmaceutical access. Payer strategies and health technology assessments (HTAs) are evolving to manage innovation within budget restrictions. The EU HTA Regulation, effective 2025, will standardise clinical evaluations but leave price to member states. To optimise high-cost therapy spending, payers are using outcome-based pricing, price-volume deals, and managed access.

Chronic disease management relies on trusted brands for efficacy and affordability. New brands boost growth, and generics and biosimilars, notably in immunology and cancer, keep European prices competitive.

Australia

The pharmaceutical sector in Australia is seeing consistent expansion, propelled by an ageing demographic, heightened health consciousness, and an emphasis on preventative healthcare. The market includes prescription prescriptions, over-the-counter (OTC) treatments, and additional pharmaceutical items.

Prescription medications represent a substantial segment of the market, with demand bolstered by governmental programmes such as the Pharmaceutical

Benefits Scheme (PBS), which subsidises numerous prescription drugs, hence improving accessibility for Australian citizens.

Notwithstanding a strong domestic market, Australia significantly depends on pharmaceutical imports, with a considerable proportion of medications utilised being procured from abroad. This dependence highlights the significance of global supply chains in fulfilling domestic healthcare requirements.

Our progress in Other Regulated Market

In FY 2024-25, Strides Pharma strengthened its presence across key regulated markets beyond the U.S., delivering a robust 13.5% year-on-year revenue growth in the Other Regulated Markets (ORM) segment, reaching 13,585 million from Rs. 11,964 million in FY 2023-24. This growth was driven by portfolio optimisation, consistent quarterly execution, and strategic B2B partnerships.

This segment, which includes geographies such as the UK, Australia, and Continental Europe, remains a strategic pillar in the Companys global footprint. To support long-term growth, we initiated over 150

R&D filings for our partner-led model across 20+ EU markets. In Australia, we continue to benefit from a

10-year supply agreement with Arrotex, the countrys leading generics player.

Our market expansion strategy delivered results through increased volumes and new customer acquisitions, strengthening our position in key geographies. Notably, our B2B platform synergICE exceeded expectations, driving business efficiency, deepening partnerships, and enhancing customer satisfaction. With ongoing investments in capability, quality, and process optimisation, we remain focused on sustainable, innovation-led growth.

UK

The UK remains our anchor market in Europe, where our subsidiary, Strides Pharma UK Limited, maintains a strong and growing presence We have established a strong and credible presence, leveraging a diversified distribution network across both prescription (Rx) and over-the-counter (OTC) segments. Our reach spans Tier-1 and Tier-2 retail wholesalers, NHS supply chains, and Clinical Commissioning Groups (CCGs). Recognised for our commitment to quality and reliability, we actively participate in NHS tenders through the Commercial Medicines Unit (CMU), reinforcing our position as a trusted partner in the UKs healthcare landscape.

Australia

Australias pharmaceutical market is characterised by its knowledge-driven, technology-intensive nature, supported by strong access to medicines, high generic penetration, growing awareness of chronic and lifestyle-related conditions, and subsidised prescription costs under the Pharmaceutical Benefits

Scheme (PBS). In this dynamic environment, we have built a strong, long-standing partnership with Arrotex Australias leading pharmaceutical company with a significant market footprint. As their preferred strategic supplier, we support a wide portfolio of products through this collaboration. To serve the

Australian market efficiently, we operate a dedicated manufacturing facility in India, ensuring consistent quality and supply.

EU

European Unions pharmaceutical landscape is marked by regional diversity, with varying market dynamics across Western, Eastern, and Southern Europe. Recognising that success in one region doesnt guarantee the same in another, we have adopted a tailored approach to each market we operate in. This strategy has enabled us to deliver consistent growth across the continent. Our strong network of strategic partnerships continues to drive momentum and fuel our expansion across key European markets.

In FY 2024-25, the growth in Continental Europe was more subdued due to longer-than-anticipated timelines between product approvals and commercial launches by our B2B partners. These partners, among the top generic players in Europe, typically require multi-country regulatory clearances before initiating launches, which has led to delays despite a robust pipeline of approved products.

In FY 2024-25, Strides Pharma strengthened its presence across key regulated markets beyond the U.S., delivering a robust 13.5% year-on-year revenue growth in the Other Regulated Markets (ORM) segment, reaching 13,585 million from 11,964 million in FY 2023-24.

Key highlights, FY 2024-25

• Witnessed robust demand for key products; along with new long-term supply contracts, this significantly drove growth in the UK and Nordic markets

• Appointment of new partners with a pan-European presence led to longer-than-expected timelines for product launches

• Delivered strong performance in the UK market, while other European regions remained relatively muted

• Maintained strong customer advocacy and dependable supply, which enhanced our reputation and helped expand our customer base

Way forward

Looking ahead, growth will be driven by the expansion of our product portfolio and continued acquisition of new customers across key markets. We are well-positioned to capitalise on a robust funnel of opportunities currently in the pipeline, which are expected to convert into meaningful revenue streams. Additionally, sustained momentum in regulatory filings will support our medium-term growth trajectory, reinforcing our commitment towards the region.

Growth markets: Growth driven by new geographies and products

Industry landscape

Latin America

The Latin American pharmaceutical market is rapidly emerging as one of the fastest-growing sectors worldwide, with a predicted compound annual growth rate considerably exceeding the global average. This impetus is propelled by increasing income levels, a burgeoning middle class, and enhanced access to healthcare. As regional economies advance, a greater number of individuals may access medical treatment, resulting in heightened demand for pharmaceutical items.

An increasing elderly demographic is also driving the rise, necessitating more prescriptions to address chronic ailments. Simultaneously, governments are undertaking coordinated investments in healthcare infrastructure and services, thereby improving access to medical treatment. Initiatives for regulatory harmonisation are reducing obstacles for enterprises seeking to enter or expand in the market, thereby enhancing the regions appeal to global pharmaceutical entities.

Brazil and Mexico dominate the region in market size, illustrating the magnitude and promise of Latin Americas pharmaceutical sector. The region offers a significant growth opportunity for pharmaceutical businesses prepared to address its increasing healthcare needs, due to a favourable combination of economic, demographic, and policy-related variables.

Africa

The African medicines market, excluding COVID-19 vaccines, is anticipated to expand at a compound annual growth rate of 6%, reaching an estimated US$34 billion by 2027 in the base-case scenario. This rise signifies a comprehensive transformation occurring throughout the continent, propelled by a confluence of population changes, advancing healthcare requirements, and favourable legislative improvements.

Accelerated urbanisation is inducing lifestyle modifications that are elevating the incidence of chronic diseases, thus amplifying the demand for a broader spectrum of pharmaceutical products. Simultaneously, governments throughout Africa are diligently promoting efforts to entice international investment and foster indigenous industry. These initiatives seek to diminish import reliance, improve healthcare accessibility, and establish more robust pharmaceutical supply chains.

Notwithstanding advancements, the continent persists in contending with a twin burden of infectious diseases and an increasing prevalence of non-communicable ailments. This highlights the pressing necessity for accessible, efficient, and locally sourced medical solutions. The regulatory harmonisation initiatives, notably the formation of the African Medicines Agency, represent a crucial advancement in developing a more cohesive and effective pharmaceutical environment, facilitating expedited approvals and enhanced quality assurance across markets.

Our progress in Growth Markets

Our Growth Markets segment spans both established regions such as South Africa and other African countries and emerging focus areas including Latin America, APAC, CIS, China, and the Middle East. Collectively, these markets contribute over 10% to our consolidated revenue.

In FY 2024-25, the segment recorded revenue of 4,927 million, up from 3,967 million in FY 2023-24, reflecting a growth of 24.2% YoY. This growth was driven by increased volumes, expanded market coverage, and deeper penetration across emerging regions including parts of Africa, Asia-Pacific(APAC), and the Middle East and North Africa (MENA).

The Company continued to invest in regulatory infrastructure and portfolio development to support its branded generics strategy in these markets. While the segment remains subscale, it has shown consistent momentum, supported by a combination of new product introductions and the expansion of commercial teams on the ground. These investments have enabled Strides to seed new markets and build a foundation for long-term participation.

Growth in these geographies was supported by a mix of direct market entries and partnerships, with a focus on improving access to essential medicines. Although the business remains lumpy due to its evolving scale, the Company maintained a disciplined approach to portfolio selection and market prioritisation.

Established geographies

South Africa: Our portfolio boasts an extensive array of over 100 molecules, catering to diverse needs and markets. We have forged a robust relationship with Dischem, a prominent player in the industry, ensuring seamless access to our innovative products for customers.

Other African countries: The African pharmaceutical market is anticipated to witness robust growth, exceeding 10%, with branded generics expected to outpace originators. To capitalise on this promising landscape, our medical field force, covering 20,000 healthcare professionals, ensures our well-established presence.

Targeted expansion

We are pursuing a focused regional expansion strategy aimed at unlocking growth in high-opportunity markets:

• Latin America (LATAM): With deep-rooted experience in this legacy market, we are well-positioned to build on our strong foundation and drive sustainable growth.

• Asia Pacific (APAC): A substantial registered portfolio enables us to re-enter key markets in the region and tap into its growing demand.

• Commonwealth of Independent States (CIS):

Leveraging our existing product registrations, we are re-establishing our footprint to capture market share and expand presence.

Through strategic partnerships

• China: We have entered into a joint venture with

Sihuan, with three products currently progressing through the registration process.

• Middle East: We see significant opportunity in this region and are in discussions to forge strategic partnerships with at least three leading pharmaceutical companies.

The Company continued to invest in regulatory infrastructure and portfolio development to support its branded generics strategy in these markets. While the segment remains subscale, it has shown consistent momentum, supported by a combination of new product introductions and the expansion of commercial teams on the ground.

Key highlights, FY 2024-25

• Revenue from Growth Markets increased by 24.2% YoY, reflecting strong volume-led growth and successful new product launches.

Way forward

We have initiated a wave of regulatory filings across new territories, marking a key step in our long-term growth strategy. Given the extended regulatory timelines in many of these markets, we anticipate variability in quarterly performance over the next two years as the business stabilises. Going forward, our focus will remain on maximising portfolio potential and expanding our channel partner network with precision both of which will be critical drivers of sustainable growth in our Growth Markets segment.

Our progress in Access Markets

In FY 2024-25, Strides Pharmas Access Markets segment experienced a marginal decline in revenue, reflecting the inherently lumpy nature of this business. The segment, which includes tenders and institutional sales across low- and middle-income countries, is characterised by variability in order volumes and timing.

We witnessed renewed momentum in access markets following the launch of the new antiretroviral tender. While donor-funded procurement continues to introduce variability, we remain committed to driving growth through strategic market engagement and a strong focus on customer-centric approaches.

Research and development at our fore

Innovation is the engine powering our growth. In recent years, our R&D efforts have been sharply aligned with portfolio enhancement, allowing us to consistently deliver value through niche, high-impact products. Our state-of-the-art Global Formulation R&D Centre in Bengaluru serves as the innovation hub where ideas are transformed into differentiated therapies.

Backed by a skilled and dedicated team, we harness advanced pharmaceutical technologies to develop a wide range of dosage forms from oral solids and liquids to topicals, sachets, and modified-release formulations. Our development pipeline is designed to serve the needs of both regulated and emerging markets, reflecting our global outlook and adaptability.

Through this broad and forward-looking approach, we continue to push the boundaries of product development driven by science, guided by technology, and rooted in our commitment to better healthcare access worldwide.

Despite the year-on-year degrowth, the Company maintained its focus on regulatory readiness and portfolio expansion to support long-term participation in these markets. Strides continued to invest in filing activities and operational infrastructure to ensure supply continuity and compliance with evolving procurement standards.

The Access Markets business remained an important part of the Companys global footprint, contributing to volumes and supporting its broader mission of improving access to affordable medicines in underserved regions. The segment continues to offset the operational costs of the manufacturing facility, ensuring its optimal utilisation.

Key highlights, FY 2024-25

• Maintained focus on Cost Improvement Programs (CIPs) with vendors to drive cost efficiency and strengthen competitiveness

Way forward

Growth is expected to remain uneven in the near term, given the tender-driven nature of the segment. However, we remain focused on optimising participation, managing costs effectively, and ensuring operational sustainability as we navigate this variability.

Quality and compliance first culture

Focus on quality and compliance is a culture we embed across every level of our organisation. Our commitment to quality excellence is reflected in how we align our people, processes, products, and technologies to meet and exceed global standards. We invest in equipping our teams with advanced training that sharpens their ability to identify, address, and prevent quality issues proactively. Through our comprehensive quality excellence programme, we uphold rigorous compliance frameworks while continually driving improvement and accountability across operations.

Robust IT infrastructure

Our digital transformation journey has been instrumental in strengthening compliance and elevating operational quality. Over time, weve built a robust IT backbone that supports automation across key functions spanning research, manufacturing, and quality systems. A cornerstone of this evolution is our adoption of the Manufacturing Execution System

(MES), which enables real-time data capture from equipment and instruments, ensuring adherence to Good Manufacturing Practice (GMP) standards. Through MES, we generate electronic Batch Manufacturing Records, enabling faster batch approvals via ‘Review by Exception and significantly reducing manual oversight. Electronic logbooks further eliminate documentation errors, allowing accurate, real-time activity tracking. These digital capabilities not only streamline our operations but also enhance our ability to meet global regulatory expectations. Combined with deep R&D expertise and strong regulatory acumen, this tech-driven approach has supported successful product registrations across multiple-controlled markets worldwide.

Led by our people

The passion, integrity, and relentless pursuit of excellence of our people continue to drive our progress across global markets and business segments. We cultivate a high-performance culture that values individuality, encourages innovation, and recognises contributions at every level.

We are committed to creating a safe, inclusive, and empowering workplace where every team member can thrive. Our work environment is built on mutual respect and trust, with a strong focus on employee well-being. From comprehensive safety protocols to wellness initiatives, we ensure our people feel supported.

Learning and development are deeply embedded in our culture. Through structured training programmes, functional academies, mentorship opportunities, and access to digital learning platforms, we enable our teams to continuously enhance their skills and adapt to the evolving business landscape. Our internal mobility programmes further encourage career progression and cross-functional exposure.

Collaboration remains a core pillar of how we work. Leveraging robust digital infrastructure, we enable seamless teamwork across geographies, functions, and time zones. We encourage knowledge-sharing through communities of practice, cross-functional projects, and peer learning initiatives ensuring that best practices are institutionalised, and innovation is accelerated.

Transparent communication is fundamental to our culture. Our senior leadership regularly engages with employees through global townhalls, virtual connects, and focused feedback sessions. Our employee feedback and governance app provide a direct channel for real-time insights and continuous dialogue reinforcing our belief that every voice matters.

We uphold the highest standards of ethical conduct and governance. Our Whistleblower Policy ensures a safe and confidential space for employees, directors, and stakeholders to raise concerns about potential misconduct or policy violations, with zero tolerance for retaliation.

Creating an equitable and respectful workplace is a top priority. Our gender-neutral Prevention of Sexual Harassment (POSH) policy is supported by awareness programmes, sensitisation workshops, and trained internal committees. We actively promote diversity and inclusion, striving to ensure that all individuals, regardless of gender, background, or identity, feel welcomed and empowered.

Risk management

We place strong emphasis on Enterprise Risk Management (ERM) and Business Continuity Management (BCM) as critical enablers of our strategic and operational resilience. Our ERM framework is dynamic and deeply integrated into our decision-making processes continuously evolving to align with our strategic priorities and the shifting global risk landscape. It addresses a wide range of potential exposures, including financial, operational, geopolitical, compliance, and Sustainability-ESG risks, ensuring that we remain agile and future-ready. Our risk management systems played a pivotal role in navigating geopolitical uncertainties and supply chain disruptions. Proactive planning and mitigation efforts helped us minimise financial impact and maintain operational continuity. A notable focus area has been cybersecurity an increasingly critical dimension of enterprise risk. We have invested significantly in advanced security infrastructure, including the establishment of a dedicated Security Operations Centre (SOC) to monitor, detect, and respond swiftly to emerging threats.

Cybersecurity is now a standing agenda item in our monthly governance reviews, reinforcing its strategic importance at the highest levels. These efforts reflect our broader commitment to safeguarding business continuity, protecting stakeholder interests, and enhancing organisational trust and resilience in an interconnected world.

Internal control systems and adequacy

Our advanced IT infrastructure underpins strong internal controls across all business functions, ensuring accuracy, transparency, and reliability in financial reporting. We maintain a comprehensive and continuous internal audit programme, executed by Grant Thornton, which systematically reviews key operational areas. The Audit Committee provides consistent oversight by regularly evaluating audit findings, reinforcing governance and accountability across the organisation.