Eleganz Interiors Ltd Management Discussions

Annexure-II

Global Economic Review

Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably.

The growth in advanced economies remained steady at 1.7% from 2023 to 2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1% in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026 respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements. The monetary policies announced by governments the world over helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US government threatened to impose tariffs on countries exporting to the US unless those countries lowered tariffs for the US to export to their countries. This enhanced global trade and markets uncertainty and emerged as the largest singular uncertainty in 2025.

Regional Growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

Performance of the major economies, 2024

United States: Reported GDP growth of 2.8% in 2024 compared to 2.9% in 2023. China: GDP growth was 5.0% in 2024 compared to 5.2% in 2023.

United Kingdom: GDP growth was 0.8% in 2024 compared to 0.4% in 2023. Japan: GDP growth was 0.1% in 2024 compared with 1.9% in 2023.

Germany: GDP contracted by 0.2% in 2024 compared to a 0.3% decline in 2023. (Source: CNBC, China Briefing, Ons.gov.uk, Trading Economics, Reuters)

Outlook: The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks. In view of this, World Bank projected global economic growth at 2.7 per cent for 2025 and 2026, factoring the various economic uncertainties.

(Source: IMF, United Nations)

Indian Economic Review

The Indian economy grew at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four-year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy.

Indias nominal GDP (at current prices) was INR 330.68 trillion in FY 2024-25 (INR 301.23 trillion in FY 2023-24). The nominal GDP per capita increased from INR 2,15,936 in FY 2023-24 to INR 2,35,108 in FY 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened 2.12% against the US dollar in FY 2024-25, closing at INR 85.47 on the last trading day of FY25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar).

Inflationary pressures eased, with CPI inflation averaging 4.63% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in FY 2024-25, was the lowest since the pandemic, catalysing savings creation.

Indias foreign exchange reserves stood at a high of USD676 billion as of April 4, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualized rating upgrade rate 14.5% exceeded the decadelong average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to USD81 billion during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of FY 2024-25 when inflows on a gross basis declined 6% to USD17.9 billion due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian Economy

Regional growth (%)	FY 22	FY 23	FY 24	FY 25
Real GDP growth (%)	8.7	7.2	9.2	6.5

(Source: MoSPI, Financial Express)

Growth of the Indian Economy Quarter by Quarter, FY 2024-25

Particular	Q1 FY 25	Q2 FY 25	Q3 FY 25	Q4 FY 25
Real GDP growth (%)	6.5	5.6	6.2	7.4

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross non-performing assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services reached USD824.9 billion in FY 2024-25, up from USD778 billion in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching USD374.1 billion.

Indias net GST collections increased 8.6%, totalling INR 19.56 lakh crore in FY 2024-25. Gross GST collections in FY 2024-25 stood at INR 22.08 lakh crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in FY25 (9.0% in FY24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY25, compared to 8.6% in FY24. Meanwhile, the construction sector expanded at 9.4% in FY25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY25, with growth at 4.5%, which was lower than 12.3% in FY24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in FY25, compared to 8.1% in FY24.

The agriculture sector grew at 4.6% in FY 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 202425 (6.3% in 2023-24).

From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in FY 2024-25, surpassing the previous financial years rate of 5.6%.

The Nifty 50 and SENSEX recorded their weakest annual performances in FY 25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of USD3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or INR 12.3 lakh crore in fiscal 2025 to settle at INR 65.7 lakh crore. At close of FY25, the total number of folios had jumped to nearly 23.5 crore, an all-time peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to INR 24,113 crore.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately USD20 billion by year-end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in FY26.

Tariff-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget FY 2024-25: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasizing agriculture, MSMEs, investment, and exports as the four primary growth engines. With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating INR 11.21 lakh crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to INR 12 lakh annually will be fully exempt from income tax. Economists estimate that the resulting INR 1 lakh crore in tax savings could boost consumption by INR 3-3.5 lakh crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current INR 200 lakh crore.

Free trade agreement: In a post- Balance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems & jewellery sectors. About 99% of Indian exports to UK will enjoy zero-duty access tariff cuts; India will cut tariffs on 90% of tariff lines and 85% could become fully dutyfree within 10 years.

Pay Commission impact: The 8th Pay Commissions awards could lead to a significant salary revision for nearly ten million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7th Pay Commission more than tripled its monthly salaries, raising the range from INR 7,000 to INR 90,000 to INR 18,000 to INR 12.5 lakh, triggering a widespread ripple effect.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34 per cent, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions: In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritized restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Global Interior Designing Market Overview

The global interior designing market size was USD 269.87 billion in 2025 and is projected to reach USD 516.57 billion by 2033, exhibiting a compound annual growth rate (CAGR) of 6.08% during the forecast period.

The interior design is the art and science of strengthening the interior of a place to create a more aesthetic, functional and comfortable environment. This includes various elements such as colour choices, furniture, lighting, layouts, textures and materials such as schemes, research, coordination and management. Interior architects work together with customers to understand their needs, preferences and intended use of space- whether it is housing, commercial or industrial. Their goal is to ensure that the design is in line with security and access standards.

The interior design market is experiencing strong growth due to increasing urbanization, an increase in disposable income and an increasing focus on lifestyle and aesthetics. As more people move to cities and invest in homes or offices sites, the demand for individual and well-designed interiors has increased. The market is also run by real estate and hospitality regions, which are largely dependent on the interior design to attract buyers and guests. In addition, the popularity of awareness of home improvement shows, social media inspirations, and sustainable design practices to encourage consumers to search for professional design services, which can further improve the market.

Indian Interior Designing Market Overview

Despite the industrys competitive nature, the future of interior design in India appears promising. There is a growing interest in commercial design, especially concerning textile selection, which further expands the scope and potential of this creative field. This trend underscores a broader shift towards more sophisticated and personalised design solutions that cater to the evolving needs and aspirations of Indian consumers.

Indias interior design market generated USD 22.21 billion in revenue in fiscal year 2023. From 2024 to 2029, it is anticipated to experience a robust Compound Annual Growth Rate (CAGR) of 18%.

Government Initiatives

The government of India has taken several initiatives to promote a healthy environment for the growth of manufacturing sector in the country. Some of the notable initiatives and developments are:

• The Union Budget 2025-26 was well received by the renewable energy industry, with experts praising its emphasis on clean power, domestic manufacturing, and sustainability. Key initiatives include Rs. 20,000 crore (USD 2.30 billion) allocation for nuclear energy, legislative reforms for energy security, and Rs. 20,000 crore (USD 2.30 billion) commitment to the PM Surya Ghar Muft Bijli Yojana for rooftop solar expansion.

• On February 7, 2025, the Union Cabinet has approved the restructuring of the Skill India Programme with an Rs. 8,800 crore (USD 1.1 billion) outlay, extending it till 2026 to integrate demand-driven, tech-enabled, industry-aligned training nationwide.

• The Union Cabinet has announced the merger of Pradhan Mantri Kaushal Vikas Yojana 4.0, Pradhan Mantri National Apprenticeship Promotion Scheme, and Jan Shikshan Sansthan Scheme under the Skill India Programme.

(Source: IBEF)

Risk management

> Price volatility risk: Heavy reliance on synthetic fabrics and plastic-based raw materials, primarily sourced from overseas markets such as China and Southeast Asia, exposes the business to fluctuations in crude oil prices, changes in import duties, and supply-chain disruptions.

Mitigation: Procurement teams maintain buffer inventories of key inputs and negotiate fixed- price contracts where feasible. Alternative sourcing and localization strategies are under evaluation.

> Supply chain risk: Global shipping delays, container shortages, or geopolitical tensions may result in longer lead times or increased transportation costs, especially for imported goods.

Mitigation: Supplier base has been diversified, regional warehousing capacity developed, and real-time logistics tracking adopted to minimize delivery disruptions.

> Quality control risk: Inconsistent quality across lots or batches, especially with overseas suppliers, can result in high reject rates and unhappy customers.

Mitigation: Institute rigorous quality assurance at sampling, in process, and pre shipment stages, combined with supplier evaluations, audits, and possible third party inspections.

Strengths

> Integrated Manufacturing Facility

> Large and diverse product portfolio

> Cordial customer relationships

> Well-developed distribution network

Weaknesses

> Requires additional financing to scale operations nationally.

> Limited market share with presence confined to select segments.

> Door to door customer service at pan India level

> Competitors can offer similar products quickly

Opportunities

> Growing customer acceptance of decorative items and furniture

> Rise in the demand for products in emerging areas of office and household segments

> E-commerce and online sale is growing and we can cater on national level easily.

Threats

> Changes in Government policies

> Fluctuations in raw materials prices

> Rising Labour wages

> Change of behaviour of consumer demand

> Rising input costs may lead to upward pricing

> Too many players entering and exiting the market

Company Overview

Eleganz Interiors Limited incorporated in April 18, 1996, as a leading Indian company engaged in providing professional services related to Interior Designing. In 2023, the Company transitioned into a public limited entity to strengthen its market position and unlock new growth opportunities. Over the past decade, Eleganz Interiors Limited has built a diverse client base ranging from individual consumers to large-scale business with a particular focus on the interior designing segment. Backed by a robust distribution network, a customer-centric approach, and dedicated sales and marketing teams, the Company delivers services efficiently across India enhancing both brand equity and market reach.

Financial capital analysis Balance sheet

• Borrowings for FY 2024-25 stood at Rs. 560.58 Lakh compared to Rs. 4279.54 Lakh during FY 202324, mobilized to grow the business.

• Total non-current assets for FY 2024-25 stood at Rs. 122.86 Lakh compared to Rs. 78.59 Lakh in FY 2023-24.

Profit and loss statement

• Revenues increased 1699.752% to Rs. 39270.62 Lakh in FY 2024-25 compared to Rs. 22,129.19 Lakh in FY 2023-24.

• EBITDA increased 165.177% to Rs. 3230.69 Lakh in FY 2024-25 compared to Rs. 1955.89 Lakh in FY 2023-24.

• Profit after tax increased 179.15% to Rs. 1979.29 Lakh in FY 2024-25 compared to Rs. 1104.83 Lakh in FY 2023-24.

• Total expenses for FY 2024-25 stood at Rs. 36650.40 Lakh compared to Rs. 20699.93 Lakh in FY 2023-24.

• Depreciation and amortization stood at Rs. 268.51 Lakh in FY 2024-25 compared to Rs. 203.34 Lakh in FY 2023-24.

Key Performance Indicators of our Company

(in Lakhs)

Key Financial Performance	FY 2021-22	FY 2022-23	FY 2023-24	FY 2024-25
Revenue from operations	15,383.03	19,025.86	22,129.19	39,270.62
EBITDA	661.79	1,306.17	1,955.89	3,230.69
EBITDA Margin	4.30%	6.87%	8.84%	8.23%
PAT	509.38	1,031.13	1,220.58	2,070.73
Interest Coverage Ratio	-	6.65	8.85	5.21
Current Ratio	1.27	1.45	1.37	2.24
Debt-equity ratio	0.78	0.72	0.83	0.04
PAT Margin	3.31%	5.42%	5.52%	5.27%
Networth	2,885.21	3,916.35	5,136.93	15,242.39
RoE %	17.65%	26.33%	23.76%	13.59%
Net profit margin (%)	3.31%	5.42%	5.52%	5.27%
Operating Profit Margin (%)	4.42%	7.01%	8.95%	8.42%
Inventory turnover ratio	11.44	6.98	4.27	4.98
Return on Net Worth	17.65%	26.33%	23.76%	13.59%
Debtors turnover ratio	4.38	5.78	5.27	8.62
RoCE%	17.61%	25.85%	31.20%	19.69%

Notes:

> Revenue from Operations means the Revenue from Operations as appearing in the Restated Financial Statements.

> EBITDA is calculated as Profit before tax +Depreciation + Interest Expense - Other Income.

> EBITDA Margin is calculated as EBITDA divided by Revenue from Operations.

> PAT Margin is calculated as PAT for the period /year divided by revenue from operations.

> Interest Coverage Ratio is calculated by dividing Earnings Before Interest and Taxes (EBIT) by the Interest Expense.

> Operating Profit Margin is calculated by dividing the Operating Profit by the Revenue and multiplying the result by 100.

> Inventory Turnover Ratio is calculated by dividing the Cost of Goods Sold (COGS) by the Average

> Inventory, indicating how many times a companys inventory is sold and replaced over a specific period.

> Return on Net Worth (RoNW) is calculated by dividing the Net Profit by the Shareholders Equity and multiplying the result by 100.

> Debtors Turnover Ratio is calculated by dividing the Revenue by the Average Trade Receivables, indicating how efficiently a company collects payments from its customers over a given period.

> Current Ratio is calculated by dividing a companys Current Assets by its Current Liabilities, indicating its ability to meet short-term obligations.

> Debt-Equity Ratio is calculated by dividing the Companys Total Debt by its Shareholders Equity, reflecting the proportion of debt used to finance the business relative to owners funds.

> Net Profit Margin is calculated by dividing the Net Profit by the Revenue and multiplying the result by 100, which indicates the percentage of revenue that remains as profit after all expenses are deducted.

> Net worth means the aggregate value of the paid-up share capital and reserves and surplus of the Company less deferred tax assets.

> Return on Equity is ratio of Profit after Tax and Shareholder Equity. Average Shareholders Equity for the stub period cannot be compared with last years figures and hence it has been taken on standalone basis.

> Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders equity plus long-term borrowings.

Human Resources

Our human capital is central to driving our growth strategy and ensuring smooth daily operations. At Eleganz Interiors Limited, we are committed to attracting and retaining top talent. Our workforce comprises experienced professionals with deep industry expertise, contributing significantly to the Companys overall performance. As of March 31, 2025, we employed 54 permanent staff members. Our head office, located in Dahisar East, Mumbai, serves as the central hub for administration, reporting, and factory support functions. We maintain a healthy and collaborative relationship with our employees. There have been no significant instances of labour disputes, work stoppages, strikes, or other disruptions. Our team members consistently demonstrate integrity and dedication within their respective roles, ensuring smooth operations and the achievement of our corporate objectives.

Internal control systems and their adequacy

The Companys internal financial controls related to its financial statements are appropriate and aligned with the size and nature of its business operations. An independent team of chartered accountants conducts internal audits across various locations, and their findings are summarized and presented to the audit committee for review and feedback. The audit committee holds discussions with the Companys statutory auditors to gain insights into the financial statements, reporting systems, internal controls, and adherence to established accounting policies and procedures.

Cautionary statement

The management discussion and analysis report containing your companys objectives, projections, estimates, and expectations may constitute certain statements, which are forward-looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied.