Foce India Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian watch industry continues to evolve, driven by changing consumer preferences, increasing digital adoption, growing disposable incomes and the rapid expansion of organized retail and e-commerce platforms. While smartwatches have witnessed significant growth owing to increasing demand for health monitoring, fitness tracking and connected devices, the demand for traditional and premium analogue watches remains resilient, supported by brand consciousness, gifting trends and consumer preference for quality timepieces. The industry is also witnessing increasing adoption of digital sales channels, enabling companies to reach a wider customer base across geographies while improving customer engagement through technology-driven marketing initiatives. Manufacturers and distributors continue to focus on strengthening their product portfolios by introducing innovative designs, premium materials and value-added offerings to meet the evolving expectations of customers.

During the Financial Year 2025-26, the Company recorded a healthy improvement in its financial performance, reflecting the continued demand for its products and effective business strategies. On a standalone basis, the Companys Revenue from Operations increased by 58.08% to 5,662.20 Lakhs from 3,581.90 Lakhs in the previous financial year. Profit Before Tax increased to 171.12 Lakhs from 130.30 Lakhs, registering a growth of 31.33% over the previous year.

On a consolidated basis, Revenue from Operations increased by 39.40% to 14,531.88 Lakhs from 10,425.16 Lakhs in the previous financial year. The consolidated Profit Before Tax stood at 1,869.88 Lakhs as against 1,791.70 Lakhs in the previous year, demonstrating the continued operational strength of the Company and its subsidiaries.

The Company continues to focus on expanding its market presence, strengthening customer relationships, improving operational efficiencies and enhancing profitability while maintaining prudent financial management. With increasing opportunities in the organized watch and lifestyle products market, coupled with continued emphasis on technology, distribution expansion and customer-centric offerings, the Company remains well positioned to capitalize on emerging growth opportunities and deliver sustainable long-term value to its stakeholders.

OPPORTUNITIES, CHALLENGES, THREATS, RISKS AND CONCERNS

The Indian watch industry continues to offer significant long-term growth opportunities, supported by favorable macro-economic conditions, increasing consumer spending and rapid digital transformation. The Company believes that the following factors will continue to drive the growth of the industry and create opportunities for its business: The positive growth outlook of the Indian economy, moderating inflation, Government initiatives to boost consumption, increasing per capita income, favourable demographics, rapid urbanization and rising discretionary spending are expected to support sustained demand for watches and lifestyle products.

The traditional analogue watch segment continues to have substantial growth potential, as a large section of Indian consumers continues to prefer analogue watches for their craftsmanship, aesthetics and long-term value. The rapid expansion of e-commerce, online marketplaces and Omni-channel retailing has significantly enhanced market reach and customer accessibility, thereby creating new growth opportunities for the Company. Increasing adoption of digital marketing, innovative consumer engagement initiatives and the growing acceptance of smart wearables are expected to expand the overall watch market and complement the growth of the traditional watch segment. The Companys SME listing enhances its visibility, corporate governance standards and access to capital, enabling it to pursue future expansion opportunities and strengthen stakeholder confidence.

CHALLENGES AND THREATS

The Company operates in a highly competitive and dynamic business environment and is exposed to various business challenges and external threats, including:

Intense competition from domestic and international brands.

Changing consumer preferences and rapidly evolving market trends.

Fluctuations in procurement and input costs, finance costs and supply chain disruptions.

Execution risks associated with business expansion and implementation of strategic initiatives.

Short-term economic slowdown affecting consumer demand, business activities and investor sentiment.

Global economic uncertainties, geopolitical developments and slowdown in international liquidity flows.

Continuous changes in the regulatory and compliance framework applicable to listed companies.

The Company continuously reviews its business strategies and operational processes to effectively respond to these challenges while maintaining sustainable growth.

RISKS AND CONCERNS

The Companys business performance is influenced by domestic and global economic conditions, regulatory developments and industry-specific factors. Economic growth, inflation, interest rates, government policies, geopolitical developments and changes in the global business environment may impact business operations and financial performance. Further, industrial growth is influenced by various social, financial, economic, political and environmental factors.

The Company has established appropriate internal control systems and risk management processes to identify, monitor and mitigate business risks. The key risks to which the Company is exposed include:

Credit Risk

Liquidity Risk

Market Risk

Interest Rate Risk

Legal and Regulatory Risk

Economic and Political Risks

Operational and Supply Chain Risks

Cyber Security and Information Technology Risks

The management continuously reviews these risks and implements appropriate mitigation measures to safeguard the Companys assets, ensure regulatory compliance and achieve sustainable business growth.

OUTLOOK

Foce India Limited has established itself as a recognized player in the Indian watch industry with a legacy spanning over three decades. From its humble beginnings as a retail watch outlet in Mumbai during the 1980s, the Company has evolved into an integrated business engaged in the manufacturing, importing, marketing and distribution of wristwatches under various brands. Over the years, the Company has built a strong presence in the mid-premium watch segment, supported by an expanding distribution network across India and a well-diversified customer base comprising retail customers, institutional buyers and corporate clients.

The outlook for the Indian watch industry remains positive, driven by favorable macro-economic conditions, rising disposable incomes, rapid urbanization, increasing fashion consciousness and growing demand for branded lifestyle products. The continued expansion of organized retail, e-commerce platforms and omni-channel distribution is expected to further enhance market accessibility and create new opportunities for growth. While smart wearables continue to witness increasing adoption, the traditional analogue watch segment continues to enjoy strong consumer preference owing to its timeless appeal, craftsmanship and gifting value, thereby providing significant growth opportunities for established brands.

The Company remains focused on strengthening its position in the premium and luxury watch segments by expanding its product portfolio, enhancing brand visibility and increasing its presence in key metropolitan and high-growth cities across India. The management also intends to further strengthen its retail footprint through strategic expansion of physical stores while simultaneously leveraging digital platforms and online sales channels to enhance customer reach and engagement.

The financial performance of the Company during the financial year under review reflects the resilience of its business model and its ability to capitalize on emerging market opportunities. On a standalone basis, the Company reported Revenue from Operations of 5,662.20 Lakhs as compared to 3,581.90 Lakhs in the previous financial year, representing a growth of approximately 58.08%. Profit Before Tax increased to 171.12 Lakhs from 130.30 Lakhs, reflecting improved operational performance and prudent financial management.

On a consolidated basis, the Company achieved Revenue from Operations of 14,531.88 Lakhs, as against 10,425.16 Lakhs in the previous year, registering a healthy growth of approximately 39.40%. Consolidated Profit Before Tax stood at 1,869.88 Lakhs compared with 1,791.70 Lakhs in the previous financial year, demonstrating the continued contribution of its subsidiaries and the overall strength of the Groups operations.

Going forward, the Company will continue to focus on sustainable growth through product innovation, expansion of distribution channels, enhancement of operational efficiencies, strengthening of customer relationships and prudent cost management. The Company also remains committed to adopting technological advancements, improving digital capabilities and maintaining high standards of corporate governance, compliance and risk management.

While the business environment may continue to face challenges arising from economic uncertainties, inflationary pressures, evolving consumer preferences and increasing competition from domestic and international players, the Companys experienced management team, established market presence, diversified customer base and disciplined business approach provide confidence in its ability to navigate these challenges effectively.

With a strong brand portfolio, an expanding market presence, improving financial performance and a clear long-term growth strategy, the Company is well positioned to capitalize on the opportunities offered by the growing Indian watch and lifestyle products market. The management remains optimistic about the Companys future prospects and is committed to creating sustainable long-term value for its shareholders and all other stakeholders.

FINANCIAL PERFORMANCE OF THE COMPANY:

(Amount in Lakhs)

	Standalone		Consolidated
Particulars	Figures as at the end of current reporting Period 31.03.2026	Figures as at the end of previous reporting Period 31.03.2025	Figures as at the end of current reporting Period 31.03.2026	Figures as at the end of previous reporting Period 31.03.2025
Revenue from Operations	5,662.20	3,581.90	14,531.88	10,425.16
Other Income	-	-	39.37	39.25
(a)Total Revenue	5,662.20	3,581.90	14,571.25	10,464.42
Less: Administrative &
Other Expenses
Purchase of Stock in Trade	5,649.42	3,502.55	15,454.52	8,477.27
Changes in inventories of finished goods, work- in-progress and stock-in- trade	(446.57)	(220.27)	(3,491.37)	(222.28)
Depreciation & Amortization	3.75	3.00	29.95	23.56
Employee Benefit Expenses	17.47	18.18	42.74	38.65
Finance Expenses	70.80	10.47	140.24	59.16
Other expenses	200.79	142.94	525.30	296.35
(b)Total Expense	5,495.66	3,456.86	12,701.38	8,672.72
(c)Profit / (Loss) before Tax (a-b)	171.12	130.30	1,869.88	1,791.70
Less: Tax Expense
Current Tax	43.11	32.68	375.52	352.51
Deferred Tax	(0.24)	0.12	(2.21)	(1.04)
Profit After Tax	128.24	97.50	1,496.57	1,440.23
Basic Earnings Per Share	1.08	0.83	12.56	12.26
Diluted Earnings Per Share	1.08	0.83	12.56	12.26

DETAILS OF SIGNIFICANT KEY FINANCIAL RATIOS:

Ratios	2025-2	2024-25
Debtors Turnover	2.73	3.74
Inventory Turnover	11.04	19.97
Interest Coverage Ratio	3.42	13.45
Current Ratio	1.35	1.67
Debt Equity Ratio	5.34	10.60
Return on Equity	3.37	2.86
Net Profit	2.25	2.72

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems and procedures commensurate with the nature, size and complexity of its business operations. These internal controls are designed to provide reasonable assurance regarding the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information in compliance with the applicable accounting standards, statutory requirements and other regulatory provisions. The Companys internal control framework ensures that all transactions are appropriately authorized, recorded and reported, thereby facilitating the preparation of financial statements that present a true and fair view of the Companys financial position and performance. The management continuously reviews and strengthens the internal control environment to enhance operational efficiency and ensure compliance with applicable laws, regulations and internal policies.

The Company has an independent Internal Audit function, which periodically evaluates the adequacy and effectiveness of the internal control systems and risk management processes. The observations and recommendations of the Internal Auditor are reviewed by the Management and the Audit Committee of the Board of Directors, which monitors the implementation of corrective actions, wherever required. The Audit Committee also periodically reviews the internal audit reports and the effectiveness of the Companys internal financial controls to ensure continuous improvement in the overall governance and control framework.

Based on the reviews carried out during the financial year, the Management believes that the existing internal control systems are adequate and operating effectively, commensurate with the size, scale and nature of the Companys operations.

ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to conducting its business operations in an environmentally responsible, safe and sustainable manner. It recognizes that environmental protection, occupational health and workplace safety are integral to its business philosophy and long-term growth strategy.

The Company endeavors to comply with all applicable environmental, health and safety laws, rules and regulations and continuously strives to adopt practices that promote efficient utilization of natural resources, conservation of energy and reduction of environmental impact, wherever feasible. The management also encourages responsible use of resources and the adoption of environmentally sustainable business practices across its operations.

The Company places significant emphasis on maintaining a safe, healthy and secure working environment for its employees, customers, business associates and other stakeholders. Appropriate safety measures, operating procedures and preventive practices are implemented to minimize occupational risks and ensure compliance with applicable statutory requirements relating to health, safety and environmental protection.

The Company remains committed to continually improving its Environment, Health and Safety (EHS) standards and fostering a culture of safety, regulatory compliance and environmental responsibility in all aspects of its business operations.

RISK MANAGEMENT

Risk management forms an integral part of the Companys business strategy and corporate governance framework. The Company has adopted a structured approach to identify, assess, monitor and mitigate risks that may impact the achievement of its strategic, operational, financial and compliance objectives.

The Company has established appropriate mechanisms to identify and evaluate various business risks arising from changes in the economic environment, market conditions, regulatory framework, operational activities, technology, finance and other external factors. Identified risks are periodically reviewed, prioritized based on their potential impact and likelihood, and appropriate mitigation measures are implemented to minimize their effect on the Companys business and operations.

The management regularly monitors the effectiveness of the risk management framework and undertakes periodic reviews to ensure that emerging risks are identified in a timely manner and appropriate corrective actions are taken. The Companys risk management process is supported by robust internal control systems a nd is overseen by the Board of Directors and the Audit Committee, wherever applicable.

The Company believes that a proactive and well-defined risk management framework strengthens operational resilience, enhances decision-making and supports sustainable long-term growth while safeguarding the interests of its shareholders and other stakeholders.

HUMAN RESOURCES

The Company recognizes that its employees are its most valuable asset and remain a key driver of its sustained growth and success. It is committed to fostering a work environment that promotes professionalism, integrity, teamwork, innovation and continuous learning.

The Company places significant emphasis on the development of its human resources through continuous learning, skill enhancement and awareness programmes, including training on safety, ethical business practices, regulatory compliance and organizational values. The management encourages employee participation, performance excellence and a culture of accountability to achieve the Companys strategic objectives.

The Company believes in maintaining a healthy, safe, inclusive and harmonious work environment and is committed to ensuring the well-being, motivation and professional development of its employees. During the financial year under review, industrial relations at all levels remained cordial and harmonious, with continued cooperation and support from employees.

The management appreciates the dedication, commitment and contribution of its employees, whose collective efforts have played a significant role in the Companys performance and progress. The Company remains committed to nurturing talent and strengthening its human capital to support sustainable growth and long-term value creation.

CAUTIONARY STATEMENT

The statements contained in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, plans, strategies or outlook may constitute forward-looking statements within the meaning of applicable laws and regulations. These statements are based on certain assumptions, expectations and estimates regarding future events and are subject to various risks, uncertainties and other factors, many of which are beyond the Companys control.

Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including but not limited to changes in economic conditions, industry trends, consumer demand, competitive environment, availability and cost of products, inflation, interest rates, foreign exchange fluctuations, changes in Government policies, taxation, regulatory developments, geopolitical events, supply chain disruptions and other risks and uncertainties affecting the Companys business and operations.

The Company undertakes no obligation to publicly update, amend or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under the applicable laws, regulations or listing requirements. Readers are therefore advised to exercise due caution while relying on such forward-looking statements and to consider them in conjunction with the Companys financial statements and related notes forming part of the Annual Report.

	For and on behalf of the Board M/s Foce India Limited
	Sd/-	Sd/-
	Manoj Sitaram Agarwal	Utkarsh Agarwal
	Managing Director	Director
		DIN: 08021945
Date: 07/09/2026	DIN: 00159601
Place: Mumbai