Lakshmi Engineering & Warehousing Ltd Management Discussions

I Industry Structure and Development

Economic growth and the Governments continued focus on highways expansion and logistics infrastructure are driving growth in Indias warehousing sector. The grant of ‘Infrastructure status to the logistics and warehousing sector along with the rapid growth of emerging sectors such as e-commerce and allied services, rising consumption demand, and the Governments continued thrust on establishing India as a global manufacturing hub, has resulted in a steep uptick in demand for quality Warehousing space.

In the Companys Warehousing Rental Services Unit at Hosur, the entire leasable building space has been fully occupied by reputed corporate entities. Strategically located on the Bangalore- Salem / Chennai Highway, with close proximity to Karnataka and other Southern States, the demand for warehousing space at Hosur continues to remain encouraging.

The Engineering Services Unit near Coimbatore manufactures Spares and Accessories of Shuttle Looms, Parts for Machine Tools and Spares for other Textile Machineries as well.

II. Opportunities and Threats

A. Warehousing Rental Services

The manufacturing sector excluding Consumer Goods and Durables, continued to gain momentum and contributed for a significant volume in warehousing transactions during 2025. This growth is primarily driven by the consumption boom, with 60% of online purchases now originating from Tier II and III cities.

The positive market momentum and stable average rents reflect terms in scaling up operations.

There is a increasing preference among occupiers for Grade A, ESG-compliant Warehouses equipped with modern storage solutions. Third-party logistics providers, engineering & manufacturing companies and e-commerce players continue to be key drivers of demand for Warehousing space. As the industry matures, occupier expectations with regard to base level rental offers have increased with standard specifications rather than value-added charges over the base rents. This shift has resulted in an upward revision in base rental levels and overall occupancy cost.

The Companys Warehousing facilities, characterized by large floor connectivity, continue to provide a distinct advantage in attracting reputed corporate clients.

B. Engineering Services

The Companys Engineering Services caters to Domestic and Overseas Customers engaged in the manufacture of Parts for Machine Tools and Tool Holders, as well as Textile Spares and Accessories. The increase in input cost has impacted operational margins during the year. The Company is actively pursuing re-engineering initiatives, expanding supplies to new customers, and exploring opportunities in other business segments with a view to improving turnover and enhancing profitability

III. Outlook

The entire existing space including the additional space of the newly constructed building, having been leased to reputed Corporate entities, will result in increase of the rental income during the Financial Year 2026-27.

Your Companys continuous efforts in identifying new Domestic and Overseas Textile Machinery Manufacturers, the supply of Spares, Accessories and Parts for Machine Tools will contribute to increased revenue generation for the Company.

IV. Internal Control System and its Adequacy

The Company has an adequate Internal Control System commensurate with its size and nature of its business operations. The Management has overall responsibility for the Companys Internal Control Systems to safeguard the assets and to ensure accuracy and reliability of financial records. The Audit Committee periodically reviews the Financial Statements and ensures adequacy and effectiveness of the Internal Control Systems.

V. Discussion of Financial Performance with respect to Operational Performance

The Company during the year has achieved a Revenue of 1,568.25 Lakhs from operations and the Net Profit for the year under review is 168.61 Lakhs after providing 149.74 Lakhs for Depreciation and 67.79 Lakhs towards Taxation.

VI. Material Development in Human Resources / Industrial Relations Front, including Number of People Employed

The number of employees engaged during the year was in line with operational requirement of the Company. The relation with labour continued to be cordial during the year. Total employees as on 31.03.2026 were 103 (One Hundred and Three only).