Brandman Retail Ltd Management Discussions

BRANDMAN Retail Limited
Annexure-F

Management Discussion & Analysis Report

COMPANY OVERVIEW

Brandman Retail Limited is engaged in the retail and distribution of footwear, apparel and accessories, with a focus on premium sports, athleisure and lifestyle products. The Company operates through a multichannel business model comprising retail stores, multibrand outlets and online channels.

The Company is focused on strengthening its retail and distribution network, building strong brand relationships and delivering quality products and an enhanced customer experience. With the growing demand for branded sports and lifestyle products in India, the Company continues to explore opportunities for expansion and sustainable growth.

The successful listing of the Companys equity shares on the NSE Emerge platform marked an important milestone and provides the Company with a stronger platform to pursue its future growth objectives.

Going forward, the Company remains focused on operational excellence, retail expansion, customer engagement and long-term value creation for its stakeholders.

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Global Economy

The global economy continues to display resilience amid moderating inflation and a rebound in global trade. Easing price pressures have supported real household incomes, though consumer confidence remains below pre-pandemic levels in several regions. Labor markets are softening, yet unemployment rates remain near historic lows. While looser monetary policy is expected to support demand, tighter FY policies could present mild headwinds. Global GDP is projected to grow by 3.2% in 2024 and 3.3% in 2025 and 2026. However, geopolitical tensions in the Middle East and Eastern Europe, along with rising trade protectionism among major economies, pose significant downside risks. A further escalation in conflicts could disrupt energy and commodity supplies, fuelling inflation, particularly in import-dependent nations. Additionally, restrictive trade policies may elevate import costs, squeeze corporate margins, and erode consumer purchasing power. Structural vulnerabilities - including elevated debt levels, stretched asset valuations, weakening credit quality in segments such as commercial real estate, and the growing footprint of unregulated non-bank financial institutions - heighten the risk of financial contagion across market segments. non-bank financial institutions - heighten the risk of financial contagion across market segments.

The Indian retail industry is one of the fastestgrowing sectors of the economy, supported by rising disposable incomes, urbanisation, changing consumer preferences and increasing adoption of organised retail and e-commerce. Within the retail sector, footwear, sportswear and athleisure have emerged as important growth categories.

The Indian footwear market was valued at approximately USD 25 billion in 2023 and is projected to reach around USD 34 billion by 2028, supported by premiumisation, lifestyle changes and increasing preference for branded products. The sports and athleisure segment is also witnessing increasing demand, driven by growing health and fitness awareness, participation in sports and the adoption of casual and comfortable clothing and footwear in everyday lifestyles.

The industry is also witnessing a shift towards omnichannel retailing, with consumers increasingly using both physical stores and online platforms. Growth in e-commerce, social media influence, changing fashion preferences and increasing demand from emerging cities are creating new opportunities for organised retailers and international lifestyle brands.

For Brandman Retail Limited, these developments provide opportunities to strengthen its presence in the footwear, apparel and athleisure segment by expanding its retail and distribution network, developing brand relationships and catering to evolving consumer preferences. The Company remains focused on leveraging these industry trends while maintaining operational efficiency and sustainable growth.

2. OPPORTUNITIES AND THREATS

Opportunities

The Indian footwear, apparel and lifestyle retail industry continues to evolve, supported by rising disposable incomes, increasing urbanisation, a growing young consumer base and changing lifestyle preferences. Footwear and athleisure products are increasingly becoming an integral part of everyday fashion, creating opportunities for organised and branded retailers.

The increasing preference for branded and premium products, growing awareness of sports and fitness, expansion of organised retail and rapid adoption of e-commerce and digital payments provide significant growth opportunities. The Company can leverage these trends by expanding its retail and distribution network, strengthening its brand portfolio and enhancing its presence across emerging markets and customer segments.

Threats

The industry is highly competitive and remains sensitive to changes in consumer preferences, economic conditions and discretionary spending. Inflation, changes in purchasing power, rising real estate and operating costs, supply chain disruptions and fluctuations in sourcing and logistics costs may impact profitability.

Rapid changes in fashion and consumer trends may also create inventory-related challenges. Competition from established brands, organised retailers and online platforms remains significant. The Company continues to focus on operational efficiency, prudent inventory management, strong business relationships and adapting to changing market conditions to manage these risks and support sustainable growth.

3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Brandman Retail Limited operates primarily in the footwear, apparel and accessories business. The Company considers its operations as a single operating segment for financial reporting purposes. However, for management and operational purposes, the Company monitors its performance across various product categories, brands and sales channels.

During the financial year ended March 31, 2026, the Company generated revenue through three principal sales channels, namely B2B, Retail and E-Commerce. B2B remained the Companys largest revenue-generating channel, followed by Retail and E-Commerce.

The Company also maintains a diversified portfolio of footwear, apparel and lifestyle brands, enabling it to cater to a broad range of customer preferences and market segments. The channel-wise and brand-wise revenue performance for FY 2025-26 is summarised below:

Sales Channel	Revenue (?)
E-Commerce	12,63,27,356.04
B2B	100,05,94,956.94
Retail	49,71,64,432.02
Total	1,62,40,86,744.99

The Companys multi-channel approach provides flexibility in reaching customers and business partners across different markets. Going forward, the Company remains focused on strengthening its product portfolio, expanding its distribution and retail presence, enhancing its digital channels and improving customer engagement to support sustainable growth.

4. OUTLOOK

The Indian footwear, apparel and lifestyle retail industry continues to offer significant growth opportunities, supported by rising disposable incomes, increasing urbanisation, a young consumer base and evolving preferences towards branded, comfortable and fashionable products. Growing awareness of health and fitness and the increasing adoption of athleisure are also contributing to demand across the sector.

Consumer expectations are also evolving beyond major metropolitan markets, with customers in Tier 2, Tier 3 and other emerging cities increasingly seeking access to premium and branded products. At the same time, the retail landscape is becoming increasingly omnichannel, with physical retail, e-commerce and digital platforms playing complementary roles in reaching customers.

Against this backdrop, Brandman Retail Limited remains focused on strengthening its presence across the footwear, apparel and accessories segments. The Company intends to expand its retail and distribution network, strengthen its B2B and retail channels and further develop its e-commerce presence to reach a wider customer base.

The Company will continue to focus on building strong brand relationships, enhancing customer experience, maintaining prudent inventory management and improving operational efficiency. With its diversified brand portfolio and multi-channel business model, the Company aims to leverage emerging market opportunities while maintaining a disciplined approach towards sustainable and profitable growth.

However, factors such as inflation, changing consumer preferences, competitive intensity, discretionary spending trends and supply chain conditions may impact the industry. The Company will continue to monitor these developments and adapt its business strategies accordingly.

5. RISKS AND CONCERNS

The Company operates in a competitive and evolving retail and distribution environment and is exposed to various business, operational and market-related risks. A significant portion of the Companys revenue is derived from key brand relationships, particularly New Balance. Any adverse change in such relationships, including changes in distribution strategy, commercial arrangements

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems and procedures commensurate with the size, scale and nature of its business. These controls are designed to safeguard the Companys assets, ensure accuracy and reliability of financial and operational information, promote operational efficiency and ensure compliance with applicable laws, regulations and internal policies.

The internal control framework includes appropriate processes for authorisation of transactions, financial reporting, inventory management, procurement, sales, payments and other operational activities. The Company also undertakes periodic review of its internal processes and controls to identify potential gaps and implement corrective measures, wherever required.

The management regularly monitors the effectiveness of the internal control systems, while the statutory auditors independently review the financial controls as part of the audit process. Based on the managements assessment and the statutory audit, the Company believes that its internal control systems are adequate and operating effectively for its present scale and operations.

or termination or non-renewal of agreements, could adversely affect the Companys revenue, profitability and overall business performance. The Company continues to focus on maintaining strong relationships with its brand partners and developing a more diversified brand portfolio.

The Company also relies on third-party suppliers for the procurement of finished products. Any disruption in supply, delays, quality issues, capacity constraints, transportation challenges or other unforeseen events may affect product availability and business operations. The Company seeks to mitigate these risks through supplier diversification, regular monitoring and maintaining relationships with key suppliers.

Footwear constitutes a significant portion of the Companys revenue. Accordingly, changes in consumer preferences, fashion trends, competitive pricing, supply chain conditions or regulatory requirements affecting the footwear industry may impact the Companys performance. The Company is also focusing on strengthening its apparel and accessories categories to diversify its product portfolio and reduce concentration risks.

The Companys business includes sales through major e-commerce platforms and other customers, which are governed by contractual arrangements containing requirements relating to quality, timely delivery, service levels and compliance. Failure to meet such requirements could result in penalties, reduced business or termination of arrangements. The Company continues to focus on operational efficiency, timely fulfilment and adherence to contractual and regulatory requirements.

The footwear, apparel and lifestyle retail industry is highly competitive and subject to rapidly changing consumer preferences. Competition from established brands, organised retailers and online platforms may affect pricing, margins and market share. The Company continues to focus on strong brand relationships, customer experience, product availability and operational efficiency to remain competitive.

The Company remains committed to identifying, monitoring and mitigating key risks through prudent business practices, operational controls, diversification and continuous review of its business strategy. While reasonable measures are taken to manage identified risks, certain external factors remain beyond the Companys control.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems and procedures commensurate with the size, scale and nature of its business. These controls are designed to safeguard the Companys assets, ensure accuracy and reliability of financial and operational information, promote operational efficiency and ensure compliance with applicable laws, regulations and internal policies.

The internal control framework includes appropriate processes for authorisation of transactions, financial reporting, inventory management, procurement, sales, payments and other operational activities. The Company also undertakes periodic review of its internal processes and controls to identify potential gaps and implement corrective measures, wherever required.

The management regularly monitors the effectiveness of the internal control systems, while the statutory auditors independently review the financial controls as part of the audit process. Based on the managements assessment and the statutory audit, the Company believes that its internal control systems are adequate and operating effectively for its present scale and operations.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year ended March 31, 2026, Brandman Retail Limited continued to focus on strengthening its retail and distribution operations across the footwear, apparel and accessories segments. The Company recorded revenue from operations of approximately 162.41 crore, supported by its B2B, retail and e-commerce channels.

B2B remained the Companys largest revenue-generating channel, contributing approximately 100.06 crore, followed by the retail channel at approximately 49.72 crore and e-commerce at approximately 12.63 crore. The Companys diversified channel presence enabled it to cater to different customer segments and strengthen its market reach.

The Companys operational performance was supported by its portfolio of established brands and continued focus on expanding business relationships, improving customer reach and strengthening distribution capabilities. The Company remained focused on inventory management, operational efficiency and prudent working capital management.

During the year, the Company also achieved a significant corporate milestone with the successful listing of its equity shares on the NSE Emerge platform, strengthening its visibility and providing a broader platform for pursuing its growth objectives.

The management remains focused on sustainable revenue growth, improving operational efficiencies, strengthening its brand and channel portfolio and enhancing profitability while maintaining prudent financial management.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company recognises its employees as an important asset and a key contributor to its continued growth and success. The Company remains committed to maintaining a positive, inclusive and performance-oriented work environment and to developing the skills and capabilities of its workforce.

As on March 31, 2026, the Company had a total workforce of 168 employees, comprising 26 female employees and 139 male employees, along with 3 Directors. The Company continues to focus on employee engagement, training and development, employee welfare and maintaining healthy workplace relations.

The Company maintained cordial industrial relations during the year and did not experience any material disruption on account of employee or industrial relations matters. The Company will continue to focus on strengthening its human resources and creating a supportive work environment.

9. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS

Particulars	31st March 2026	31st March 2025	Change in %	Reason
Debtors Turnover	-	-	-	-
Inventory Turnover	4.18	5.56	(24.88%)	NA
Interest Coverage Ratio	-	-	-	-
Current Ratio	3.08	1.40	120.06%	Movement is driven due to increased credit sales leading to higher trade receivables, along with inventory build-up consequent to the opening of 9 new retail stores.
Debt Equity Ratio	0.72	0.40	81.01%	The movement is driven on account of increase in borrowings to fund the working capital requirements of the company
Operating Profit Margin (%)	-	-	-	-
Net Profit Margin (%)	-	-	-	-
Debt Service Coverage Ratio	3.72	13.77	(72.98%)	The movement is driven on account of increase in long term borrowings to fund the working capital requirement of the company
Return on Equity ratio	29.46%	109.02%	(72.98%)	Movement is driven due to fresh issue of equity shares during the year through public issue.
Trade Receivables turnover ratio	2.25	2.55	(11.74%)	Not applicable
Trade payables turnover ratio	3.03	2.01	51.25%	Movement is primarily due to increase in credit purchases to fill the inventories in the new stores along with existing running retail stores of the company
Net Capital Turnover Ratio	2.21	13.55	(83.65%)	Movement is driven due to increase in net working capital of the company.
Net Profit Ratio	0.16	0.16	0.08%	Not Applicable
Return on capital employed	1.13	0.72	57.73%	Movement is driven due to increase in PAT of the company

10. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF.

The Return on Net Worth of the Company has changed as compared to the immediately preceding financial year, primarily due to the increase in the Companys net worth during the year pursuant to the initial Public Offering (IPO) and the consequent increase in shareholders funds.

The increase in shareholders funds has resulted in a higher net worth base for the Company, which has impacted the Return on Net Worth ratio as compared to the previous financial year. The change is therefore mainly attributable to the increase in net worth arising from the IPO proceeds and the corresponding change in the capital and reserves of the Company.