Heads UP Ventures Ltd Management Discussions

Global Economy

Economic momentum, which had shown resilience through the disinflation period of 2022-23, is now moderating. Global growth slowed from 3.2% in 2024 to a projected 3.0% in 2025, reflecting tighter financial conditions, waning fiscal support, and heightened trade and geopolitical tensions. The earlier resilience supported by household savings and strong labor markets in advanced economies is giving way to softer demand and weaker investment.

Inflation Trends: Headline global inflation is projected to decline from 5.9% in 2024 to 4.5% in 2025, continuing its downward trajectory. Advanced economies are on track to return to their inflation targets sooner, while several emerging and developing economies face stickier price pressures.

Regional Divergence:

The U.S. economy is projected to slow sharply, with growth falling from 2.7% in 2024 to 1.9% in 2025, as higher rates weigh on credit and consumption.

The Euro Area continues a modest recovery, while emerging Asia remains the main driver of global growth, led by India and resilient ASEAN economies.

Growth in China is moderating, reflecting structural headwinds in property markets and slower productivity gains.

Medium-Term Outlook: The IMF highlights that global growth over the next five years is projected at 3.1%, among the weakest medium-term forecasts in decades, due to lingering effects of the pandemic, geopolitical fragmentation, slower productivity, and demographic challenges.

Risks: Risks to the outlook remain tilted downward. These include renewed commodity price spikes from geopolitical conflicts (notably Ukraine and the Middle East), a disorderly unwinding of global trade ties amid rising tariffs, and financial stresses from diverging disinflation speeds. On the upside, faster-than-expected disinflation could allow central banks to ease earlier, supporting demand.

Policy Priorities: Monetary policy remains centered on anchoring inflation expectations while maintaining financial stability. Fiscal policy space is constrained, with a need for consolidation in many economies, though targeted support for vulnerable groups is encouraged. Structural reforms to boost productivity, trade integration, and green transition investment remain critical for long-term growth.

Indias economy in 2024-25 demonstrated remarkable resilience, with GDP growth of 7.6% driven by robust investment, manufacturing momentum, and buoyant services activity. Inflation moderated significantly within the RBIs target range, enabling a shift in monetary policy toward supporting growth. Strong external buffers and consistent domestic demand positioned India as the worlds fastest-growing major economy. Looking ahead, with growth projected at 6.5% in FY 2025-26, India remains well-placed to sustain expansion while balancing inflation management and structural reforms.

Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10% of the countrys gross domestic product (GDP) and around eight % of the employment. India is the worlds fifth-largest global destination in the retail space. The sizeable middle class and nearly unexplored retail market in India are the main enticing factors for international retail behemoths seeking to move into newer markets, which will help the Indian retail business grow more quickly. The urban Indian consumers purchasing power is increasing, and branded goods in categories like apparel, cosmetics, footwear, watches, beverages, food, and even jewellery are gradually evolving into business and leisure that are well-liked by the urban Indian consumer. The retail sector in India is expected to reach a whopping US$ 2 trillion in value by 2032, according to a recent analysis by the Boston Consulting Group (BCG).

Online penetration of retail is expected to reach 10.7% by 2024 versus 4.7% in 2019. By 2024, Indias e-commerce industry is expected to increase by 84% to US$ 111 billion, driven by mobile shopping, which is projected to grow at 21% annually over the next four years.

Indias retail sector was experiencing exponential growth with retail development taking place not just in major cities and metros, but also in small cities. Healthy economic growth, changing demographic profile, increasing disposable income, urbanization, and changing consumer tastes and preferences have been some of the factors driving growth in the organized retail market in India.

During the FY 2024-25, the Company has developed a new range of products in fashion apparels and accessories business including T-shirts, Caps, Hats, socks, Underwear and such different categories of products. The Company has also launched its own website www.hupessentials.com and activated social media handles in the last quarter of the financial year and started selling the inventories designed and manufactured. The Company has entered into an outright purchase agreement with Reliance Retail Limited for the sale of the fashion apparel and accessories under the brand “HUP” on their e-commerce platform.

As the Company is in the process of establishing the brand across all channels, an inherent risk of new business operations becoming futile is the ultimate risk which the Company is facing. As there were no business operations during the FY 2024-25, the details pertaining to segment-wise revenue could not be provided.

Establishing a non-celebrity brand within an increasingly saturated market characterized by intense brand rivalry, surplus supply pressures, online platform discounts, elevated procurement costs, and operational challenges presents a significant challenge for the company. The company is dedicating considerable efforts toward producing high-quality goods at affordable prices. It anticipates receiving constructive responses regarding its existing product inventories, which will serve as a foundation for refining its market penetration strategy. This involves devising plans for enhanced procurement to amplify production volume and expand the reach of the brand.

Your director reports that during the year under review, the Company has recorded total sales of Rs. 141.96 Lakhs as compared to Rs. 62.80 Lakhs in the previous financial year. The Profit before tax for the period under review is Rs. 159.82 Lakhs as compared to Rs. (431.79) Lakhs in the previous financial year. The Profit after tax during the year under review is Rs. 139.38 Lakhs as compared to Rs. (431.79) Lakhs in the previous financial year.

Our people are at the heart of everything we do and we implement a variety of initiatives to augment their operational capabilities. As on 31st March, 2025, our workforce strength is recorded at 2 (excluding the Executive Directors of the Company).

We have set up a comprehensive system of internal controls, along with a structured internal audit process, vested with the task of safeguarding the assets of the organisation, and ensuring reliability and accuracy of the accounting and other operational data. Internal audit is conducted for all the processes to identify risks and verify whether all systems and processes are commensurate with the business size and structure. These internal controls are verified by the Audit Committee to monitor existing systems and take corrective measures, wherever required.