HRH Next Services Ltd Management Discussions

The following Management Discussion and Analysis Report has been prepared in accordance with the Regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with a view to provide an analysis of the business and financial statements of the Company for the F.Y. 2025-26, hence it should be read in conjunction with the respective financial statements and notes thereon. The Companys management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present the Companys state of affairs and profits for the year. Investors are cautioned that this discussion contains forward looking statements that involve risks and uncertainties. The Company undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

We are a chain of gourmet Bakery and Patisserie spread across Mumbai through 32 retail stores, a centralized production facility and multiple corporate clients. Out of these 32 retail stores, 4 stores are running under the franchisee model (franchisee owned, and company operated) and rest 28 stores are owned by us. We offer fresh food products from traditional to made to order as required by the Customers. Both our Promoters individually have 31+ years of experience in Hospitality industry.

Grill Splendour Services Private Ltd. was incorporated in November 2019 as a hospitality company to acquire the bakery and confectionary business along with brand Birdys Bakery and Patisserie from WAH Restaurants Private Limited. The acquisition was done via a Business Transfer and Intellectual Property Assignment Agreement dated December 27, 2019 (Acquisition Agreement). After that the company proceeded to invest in the business and grow the brand and spread presence.

The brand Birdys was originally set up as "Birdys by Taj". Over a period, it was sold to WAH Restaurants Private Limited and from them the same was acquired by us vide above referred Acquisition Agreement. The primary focus of our Company was to bring back the quality and sheen of the brand. We did that over a period of last few years by a series of initiatives. We are engaged in the sale of following broad categories of products:

• Cakes & Pastries

• Food Sale

• Beverages

• Desert Sales

The Indian bakery industry continues to demonstrate strong growth potential, supported by rising urbanization, increasing disposable incomes, changing lifestyles and growing consumer preference for convenient, ready-to-eat and value-added food products. According to the latest estimates of IMARC Group, the Indian bakery market was valued at approximately US$15.05 Billion in 2025 and is projected to reach US$32.05 Billion by 2034, registering a CAGR of 8.76% during 2026-2034.

The growth of the sector is being supported by the expansion of organized retail, supermarkets, convenience stores, e-commerce and quick-commerce platforms, which are improving the availability and accessibility of bakery products across metropolitan as well as Tier-II and Tier-III cities. The increasing preference for convenient food products among time-constrained consumers is further contributing to sustained demand.

Consumer preferences are also evolving towards healthier, functional and premium bakery products. Demand for whole-wheat, multigrain, fortified, low-sugar, clean-label and other nutritionally enhanced products is creating opportunities for manufacturers to innovate and diversify their product portfolios. At the same time, premium artisanal products, specialty breads, cakes and pastries are gaining traction among urban consumers.

The bakery sector is therefore expected to remain an important component of Indias food-processing industry during 2025-26, with opportunities arising from product innovation, modern retail expansion, digital commerce and increasing consumer willingness to explore premium and healthier bakery offerings.

The Company earned total income of Rs. 1,02,286/- (in thousand) as compared to Rs. 1,03,126/- (in thousand) in the previous financial years.

The management continues to monitor developments in the bakery industry and consumer demand closely. During 2025-26, the Company will focus on strengthening operational efficiency, maintaining product quality, managing input costs and identifying opportunities for sustainable growth in its existing and potential markets.

The Company has adequate internal control procedures commensurate with its size, scale and nature of business. The internal control systems are designed to ensure the efficient utilization and protection of the Companys resources, accuracy of financial and operational information, compliance with applicable policies and procedures, and adherence to statutory and regulatory requirements.

The Company has appointed auditors to carry out audit assignments and periodically review transactions across its divisions and functions. The effectiveness of the internal control systems is reviewed periodically, and appropriate measures are taken wherever necessary to strengthen such controls.

The Board of Directors of the Company has established a Risk Management Policy and related guidelines to identify, assess, monitor and mitigate risks that may adversely affect the Companys business operations and financial performance.

Key business and operational risks, including market competition, volatility in raw material prices, changing consumer preferences, supply-chain challenges, food-safety requirements and regulatory compliance, are considered as part of the Companys annual and strategic business planning processes.

The Company seeks to manage identified risks through appropriate operational controls, periodic management reviews and continuous monitoring. The risk management framework is intended to enable the Company to respond effectively to uncertainties and make informed decisions across its business divisions and corporate functions.

The Companys financial performance for the year under review is covered in Directors Report to the Members.

Indian consumers, particularly in urban markets, are increasingly seeking premium and differentiated bakery products. Specialty breads, croissants, sourdough products, premium pastries, muffins, desserts and artisanal products provide opportunities for bakeries to diversify their offerings and improve realization.

Health and wellness considerations are becoming increasingly important in food purchasing decisions. This creates opportunities for products based on whole wheat, multigrain, millet, high-fibre and fortified ingredients, as well as reduced-sugar and other health-oriented formulations. Government initiatives supporting millet-based and nutritionally enriched food products are also contributing to product diversification.

The continued expansion of supermarkets, hypermarkets, convenience stores, online platforms and quick-commerce services is creating additional distribution opportunities for bakery businesses. Modern retail also provides improved product visibility and access to consumers outside traditional bakery outlets. Supermarkets and hypermarkets represented the leading bakery distribution channel in 2025-26, according to IMARC.

Demand for customized cakes, premium desserts and celebration-oriented bakery products continues to provide opportunities for bakeries to cater to birthdays, weddings, anniversaries, corporate events and other occasions. Online ordering and social-media-driven discovery can further support this segment.

The increasing penetration of organized retail and improved distribution infrastructure is enabling branded bakery products to reach smaller cities and towns. Rising incomes and changing consumption patterns in these markets provide opportunities for expansion beyond major metropolitan areas.

The Indian bakery industry remains highly competitive, with established national and regional brands, local bakeries, artisanal outlets and new-age food businesses competing across value and premium segments. Increasing competition may result in pricing pressure and higher expenditure on branding, distribution and product innovation.

Bakery businesses remain exposed to fluctuations in the prices of key inputs such as wheat/flour, sugar, edible oils, butter, dairy products, eggs, packaging materials, fuel and electricity. Such cost pressures can adversely affect margins, particularly where the ability to pass increased costs to consumers is limited.

Consumer preferences are evolving rapidly towards healthier, functional, premium and clean-label products. Concerns relating to refined flour, sugar, preservatives and nutritional content may adversely affect demand for conventional products. Bakery businesses therefore need to continuously innovate and adapt their product portfolios. IMARC identifies health concerns, price sensitivity, competition from traditional snacks and input-cost volatility among the key challenges facing the sector

The outlook for the Indian bakery industry for 2025-26 remains positive, supported by structural changes in consumer behaviour, urbanization, rising disposable incomes and the increasing preference for convenient and ready-to-eat food products. The latest IMARC estimates indicate that the Indian bakery market reached US$15.05 Billion in 2025 and is expected to grow to US$32.05 Billion by 2034, at a CAGR of 8.76% during 2026-2034.

Growing Population: The increasing population in India is leading to a higher demand for bakery food products, creating a substantial market opportunity for manufacturers.

Changing Consumer Preferences: Consumers in India are increasingly adopting western food trends, which includes a higher consumption of bakery products like bread, biscuits, cakes, and pastries.

Expansion of Retail and E-commerce Sectors: The expanding retail and e-commerce landscape in India is providing easier access to bakery products for consumers, driving market growth.

Health Awareness: Rising health consciousness among individuals is prompting manufacturers to introduce healthier options like low trans-fat, multi-grain, and whole wheat bakery products.

Convenience and Affordability: Bakery products offer convenience and affordability to consumers, making them popular choices across various demographics.