CEO’s Message

The operating environment remains positive despite global challenges. Across the global pharmaceutical landscape, customers are seeking deeper, more strategic partnerships, increasing demand for partners with strong process chemistry capabilities, specialised technology platforms, and the ability to operate at scale. Customers are also rebalancing their sourcing networks to reduce concentration in selected geographies, positioning India well to benefit from this diversification. At the same time, sustained demand for affordable healthcare underpins the generics opportunity, while advances in new modalities are widening the sector’s long-term potential.

Against this backdrop, we reported revenues of ₹ 6,813 crore, reflecting 23% growth over the previous year, supported by robust demand across our CDMO and Affordable Medicine businesses. EBITDA stood at ₹ 1,826 crore, with margins of 26.8%, marking a significant improvement over last year, driven by a favourable product mix and better utilisation of assets. Gross margins were healthy at 60.4%. Return on capital employed improved to 17.7%, supported by stronger operating efficiency and disciplined capital deployment. During the year, we invested ₹ 1,070 crore in capital expenditure, primarily towards expanding our CDMO manufacturing capabilities, while net debt-to-EBITDA improved to 1.3x.

Our CDMO business is one of the key drivers of our long-term growth trajectory. For the year, CDMO revenues increased by 36%, with strong momentum in small molecules supported by late-stage and commercial programme deliveries, repeat business from existing customers, and ramp-up of new manufacturing assets. Small molecule CDMO pipeline momentum is healthy, with a balanced mix of large pharma and mid- and small-biotech companies. We are also seeing increasing engagement in complex chemistries and advanced modalities. Our active pipeline stands at over 125 projects across human health, animal health, and crop science, providing continuity and depth to customer relationships.

Our Affordable Medicines business provided scale and stability through the year. The division increased revenues by 18%, supported by ARV volumes, formulations growth, and progress in developed markets. This business is foundational to our portfolio and plays an important role in our market reach and operating base. We strengthened our ARV portfolio, expanded formulation opportunities, advanced CMO-led activity, and made steady progress in product filings.

Alongside this, we expanded our manufacturing network and strengthened niche capabilities. In CDMO, we advanced our capabilities in peptides development and manufacturing and also invested further in enabling technologies such as flow chemistry, biocatalysis, and other specialised platforms. Construction of the Vizag microbial fermentation facility is progressing in line with our plan.

In formulations, the oral dosage capacity expansion became operational in part and being used for commercial supplies; while the KRKA joint venture facility construction is progressing as scheduled, with Phase 1 expected to be completed in mid-2027. We also operationalised process development laboratories for gene therapy and antibody-drug conjugates in Hyderabad and continue to invest in new modalities. These initiatives are strengthening our current capabilities while preparing us for future opportunities.

A significant milestone during the year was the allotment of 532 acres of land in Visakhapatnam by the Government of Andhra Pradesh. This provides a strong platform for long-term expansion and supports our plans to develop a world-class pharmaceutical manufacturing complex in proximity to our existing operations. Over the coming years, we plan to invest more than USD600 million across manufacturing and R&D infrastructure, representing a significant commitment to scale and technology-led growth.

Quality remains central to how we operate and reflects our values-led approach. Our commitment to one quality standard across markets is non-negotiable, guided by our belief that quality should not vary by geography, economics or regulatory category. During the year, we completed 132 quality audits across our facilities, with no critical findings. This consistency underpins the trust we have built with customers and regulators globally.

We also made steady progress on our ESG priorities, with a meaningful improvement in our S&P Global ESG assessment over the previous year, reflecting advancement across environmental, social, and governance parameters. On the social front, our support for paediatric cardiac interventions is among the most meaningful expressions of our commitment. To date, around 500 such interventions have been supported, including 125 during the year.

During the year under review, the Board has approved the Composite Scheme of Arrangement (“the Scheme”) between Laurus Synthesis Private Limited (“LSPL”) (“Demerged Company” or “Transferor Company”), Sriam Labs Private Limited (“Sriam”) (“Resulting Company”), both wholly-owned subsidiaries of the Company, and Laurus Labs Limited (“Transferee Company” or “the Company”) and their respective shareholders and creditors for (i) the demerger of LSPL, whereby the Identified Business Undertaking, i.e., Unit-1 of LSPL, shall be demerged and be merged with Sriam; and (ii) Amalgamation of the Remaining Business Undertaking of LSPL (i.e., entire LSPL excluding Unit-1) with the Company.

The aforesaid companies have filed the requisite application along with the Scheme with the Hon’ble National Company Law Tribunal (“NCLT”), Amaravati Bench, Andhra Pradesh. The implementation of the Scheme is now subject to the final approval and sanction from the competent authorities. We expect the merger process to be completed by September 2026.

Our progress is built on the strength of our people. As we scale, leadership depth, execution capability, and organisational discipline are critical priorities. We are pleased to have been recognised as a Great Place to Work for the sixth consecutive year, reflecting the strength of our culture and employee engagement.

Entering the new fiscal, while the global environment remains uncertain, we are navigating this period with prudence and staying focused on our priorities. We will continue to strengthen our CDMO platform, improve execution in Affordable Medicines, advance capacity creation aligned with demand, and invest in technologies and capabilities that support long-term growth. As we enter our third decade, we do so with a stronger foundation while staying grounded in the values that have brought us this far.

I thank our employees, customers, partners, and shareholders for their continued trust and support.