Supriya Lifescience Ltd

This commitment to broadbase the business played out in a positive way during the last financial year.

I am pleased to report that the commitment made by the company to its stakeholders during the last financial year was validated in 2023-24. Following the subdued performance of 2022-23, your management had assured stakeholders that it would broadbase the business beyond an excess dependence on any single geography and product segment. The management was responsive and a direction towards this broadbasing was initiated during the year under review, the full impact of the outcomes likely to be realized across the foreseeable future.

The management's responsiveness was reflected in superior financials during the last financial year. Revenues increased 24%

The fact that the percentage increase in PAT was higher than the percentage increase

in revenues indicates that the growth achieved by the company was profitable and value-accretive.

This growth was the result of the company's responsiveness in the face of a rapidly transforming world. In the past, the company would periodically generate a moderate percentage of its

overall revenues and exports from China. As opposed to Indian pharmaceutical companies importing APIs from China, your Company exported APIs to China. This contrarian achievement was the result of

a conscious decision to specialise in select therapeutic segments and enhance cost

competitiveness, making your Company a turn-to resource supplier.

When China went into a lockdown, exports to that geography were curtailed in 2022-

23. Revenues to China declined to a mere 8.38% of revenues and a 11.44% of exports.

This represented a decisive moment for your Company. Your management could have sustained the existing strategy on the grounds that realities would return to status quo and China would return as a large buyer. One would concede that the reality is progressively normalising and the worst with regards to the exports disruption to China is largely over.

something unlikely to occur or should it broadbase its global revenue profile so that in the event of Black Swan events, the company's supply chain and revenues

profile would not be excessively dependent on any one region, country or continent.

There comes a time in the existence of an organization when it must decide whether to stay within its comfort zone or extend beyond. Such a moment transpired during the last financial year

when the company made the momentous decision to extend beyond its existing business and make a decisive step ahead. This decision is expected to gradually transform the company's business model, enhance stakeholder and deepen business sustainability.

I am pleased to report that the word – broadbasing – became operative for the company's strategy during the last financial year. This word, which implies that the business model is spread across as a larger number of variables, was designed from a growth cum defensive perspective: during periods of sectorial or corporate rebound, broadbasing would empower the company to grow faster than the peer growth average and during periods of sectorial sluggishness, the decline in our corporate financials would be lower than the decline experienced by our peers.

This commitment to broadbase the business played out in a positive way during the last financial year.

One, the company extended from a longstanding focus on the manufacture of APIs to the proposed manufacture of formulations. This extension – especially in the areas of anti-histamines and anesthetics, the company's existing areas of competence – is expected to enhance

value to the products that we manufacture, provide a completed solution for those who have procured APIs from us, ensure that we consume a sizable proportion of APIs in-house and graduate our brand from being a completely back-end player to

one that has taken a decisive step towards customer proximity.

It would pertinent to assure stakeholders that your Company will continue to focus on niche products that are relatively under- crowded, where realizations are attractive and where investments can be recovered with speed for onward redeployment.

We will market our formulations through marketing arrangements with larger market-facing pharmaceutical companies who facilitate our access into less regulated markets. We intend to file ANDAs thereafter and extend to the regulated markets with niche formulations that enhance our brand, visibility, revenues and realizations.

Two, the company moved with speed to insulate itself from the impact of the

China lockdown. The company marketed products across North America and Europe (and to a lesser extent in Latin America).

The speed with which the company responded to the China slowdown is creditable; within just a year of the China lockdown the company had recalibrated its sales across a wider range of regulated markets. This speed represented a validation of the company's prudent product selection, commitment to the highest manufacturing hygiene and standards as well as its competitiveness.

The complement of these realities is reflected in the company's EBITDA margin, which moved from 40% to 28% to 30%.

We believe that the quality of the financials that we reported during the last financial year indicates that our increased sales were not achieved on account of product dumping or discounting; they were achieved through a superior price-value proposition that was acceptable to our customers.

Three, your Company recognises that in a knowledge-driven business where the role of the commodity is being increasingly replaced with that of the specialty, the future lies in enhanced research and talent capital. Your Company is cognizant of this growing reality. During the year under review, your Company recruited a senior industry professional to head Strategy

and Formulations, completing its talent preparedness to address its 2027 growth journey. Complementing this recruitment, your Company strengthened its research facility in Ambernath, extending from API research to formulations research. The strength of research professionals increased significantly in percentage terms during the year under review and this trend is expected to sustain during the current financial year. We are optimistic that this integrated facility will attract professionals, provide an invigorating workplace and emerge as your Company's most potent business driver. By investing in the future without expecting immediate returns,

your Company has also demonstrated its commitment to long-term growth and sustainability.

At Supriya Lifesciences, we are optimistic that the complement of broadbased building blocks – markets, segments and talent – should translate into enhanced.

2030. Based on our blueprint, we expect to grow our business without compromising our margins, which is expected to enhance value for all our stakeholders in a sustainable manner.