Le Lavoir Ltd Management Discussions

A. Overview of the Global Economy:

The global economy during F.Y. 2025-26 continued to operate in an uncertain and challenging environment, characterized by geopolitical tensions, evolving trade policies, inflationary pressures, financial market volatility, and disruptions to global supply chains. These factors continued to influence business confidence, consumer demand, operating costs and investment decisions across major economies. The global economy remained resilient during calendar year 2025, with technology-related investment, particularly in artificial intelligence and related industries, providing support to economic activity despite trade policy uncertainty and geopolitical tensions. Global headline inflation stood at approximately 4.1% in 2025, while global economic growth was estimated at 3.5%. However, this aggregate performance concealed notable regional differences. Advanced economies recorded growth of 1.9%, with the United States expanding by 2.1%, supported by continued investment and resilient domestic demand. The euro area grew by 1.4%, while Japan registered growth of 1.1%. Emerging market and developing economies expanded by 4.5%, led by China at 5.0% and India at 7.7%. Looking ahead, the global economic outlook remains resilient but uneven.

Against this backdrop, advanced economies are expected to experience relatively moderate growth, while emerging market and developing economies are expected to demonstrate comparatively stronger growth, although growth prospects remain uneven across regions. The global economic outlook continues to be influenced by geopolitical developments, commodity price movements, monetary and fiscal policies, financial market conditions and evolving international trade dynamics.

Global demand for agricultural products remained supported by population growth, food consumption and the essential nature of agricultural commodities. However, prices of agricultural products remained susceptible to volatility arising from changes in crop production, inventory levels, weather conditions, fertilizer and energy costs, transportation expenses and international trade policies. Such fluctuations may have an impact on procurement costs, inventory valuations, working capital requirements and operating margins of businesses engaged in the agricultural products value chain.

Despite these macroeconomic challenges, demand for essential and recurring services has remained comparatively resilient. Sectors such as healthcare, hospitality, institutional facilities and other service-oriented industries continue to require reliable hygiene, textile cleaning and linen management solutions. This provides a relatively stable demand environment for the institutional laundry and textile care industry.

At the same time, the laundry and agricultural products sectors remain exposed to fluctuations in energy, water, labour, chemicals, transportation, raw materials and other operating costs. Inflationary pressures, commodity price volatility, weather-related uncertainties and evolving trade policies may continue to influence operating costs, procurement conditions and margins across these sectors. Businesses are therefore increasingly required to focus on operational efficiency, resource optimisation, efficient sourcing, quality management, inventory management, supply-chain resilience, service quality and effective cost management to remain competitive.

Overall, the global economic environment remains uncertain, with both risks and opportunities for businesses operating in essential service sectors. The institutional laundry, textile care, dry-cleaning and related services markets are expected to continue benefiting from the recurring nature of demand, while the agricultural products business is expected to be supported by essential consumption requirements and the continuing importance of food security. Industry participants across these sectors are likely to remain focused on productivity, cost efficiency, quality, reliable supply, market diversification, risk management and compliance to navigate changing market conditions and sustain long-term growth.

B. Overview of the Indian Economy:

The Indian economy remained resilient during F.Y. 2025-26 despite global trade uncertainties, geopolitical tensions, and financial market volatility. According to the Provisional Estimates released by the National Statistics Office (NSO) in June, 2026, Indias real GDP is estimated to have grown by 7.7% during F.Y. 2025-26, while Gross Value Added (GVA) is estimated to have grown by 7.9%. The growth was supported by continued domestic demand, investment activity and the expansion of key services and other productive sectors. Strong macroeconomic fundamentals, stable financial conditions, and ongoing infrastructure development continued to support economic activity across industries.

These macroeconomic trends have created a favourable environment for the organized laundry and textile care industry. Rapid urbanization, increasing disposable incomes, higher workforce participation, and changing consumer lifestyles are accelerating the shift from unorganized laundry practices to organized, technology-enabled, and professional laundry services. Institutional demand from hotels, hospitals, corporate offices, educational institutions, and industrial establishments has also continued to expand, driven by increasing emphasis on hygiene, operational efficiency, and regulatory compliance.

Customers are increasingly seeking reliable, high-quality, and sustainable laundry solutions that offer convenience, consistent service standards, faster turnaround times, and superior fabric care. This has encouraged greater adoption of outsourced laundry services across both institutional and retail segments, while also driving investments in automation, digital process management, water-efficient technologies, and environmentally sustainable operations.

Looking ahead, Indias resilient economic fundamentals, expanding urban population, continued development of the hospitality and healthcare sectors, and increasing preference for organized outsourcing are expected to support sustained growth in the professional laundry and textile care industry. Companies with scalable operations, advanced processing technologies, strong customer relationships, and a focus on quality, sustainability, and operational excellence are expected to be well positioned to capitalize on these long-term growth opportunities.

C. Outlook:

The Company expects continued growth in institutional laundry services, supported by increasing awareness of health, hygiene and professional textile care. The dry-cleaning and laundromat segments are also expected to benefit from changing consumer lifestyles and growing demand for convenient and professional laundry services. Increasing adoption of automation, technology and sustainable practices is expected to enhance operational efficiency and support the Companys growth over the next 2 3 years.

D. Industry Structure and Developments:

Laundry and dry-cleaning industry

The laundry and dry-cleaning industry in India continue to evolve, driven by urbanisation, changing consumer lifestyles, and increasing awareness of hygiene and professional textile care. The institutional laundry segment continues to benefit from demand across sectors such as hospitality, healthcare, manufacturing and other organised establishments, where reliable and professional laundry services are increasingly required.

The laundromat and retail dry-cleaning segments are also witnessing continued development, supported by growing consumer preference for convenience and professional laundry services. The industry is progressively adopting technology-enabled and modern operating practices, including automated equipment, digital service platforms, efficient resource utilisation, water and energy-efficient processes and environmentally sustainable solutions.

Agriculture

The agricultural products industry continues to remain an important part of the Indian economy, supported by the essential nature of food and agricultural commodities, a large domestic consumer base and increasing demand for value-added agricultural products. The sector encompasses a broad range of activities, including cultivation, procurement, aggregation, processing, storage, transportation, distribution and trading of foodgrains, pulses, oilseeds, fruits, vegetables and other agricultural commodities.

E. Opportunities and Threats:

Opportunities:

Increasing outsourcing of laundry and linen management by hotels, hospitals and other institutions. Rising demand for processed, packaged and value-added agricultural products. Scope for introducing value-added services such as pickup and delivery, specialized garment care and subscription-based services. Increasing focus on quality, hygiene and standardised processes, creating opportunities for organised service providers. Growing emphasis on environmentally responsible operations, supporting the adoption of water-saving, energy-efficient and eco-friendly processes. Government initiatives supporting agriculture, food processing and infrastructure development.

Threats:

Intense price competition may affect profitability, particularly in markets with a significant presence of local and unorganized operators. Fluctuations in the prices of electricity, water, fuel, chemicals and other key inputs may adversely affect the Companys cost structure and margins. Rising wage costs and availability of skilled and semi-skilled manpower may increase operating expenses. Rising costs of seeds, fertilizers, pesticides, labour, power, transportation and other agricultural inputs. Economic slowdowns may result in reduced discretionary spending on premium laundry and dry-cleaning services and may affect demand in certain customer segments. Climate change and increasing frequency of extreme weather events creating long-term uncertainty in agricultural production.

F. Segment-wise or Product-wise performance:

The Company is primarily engaged in the Institutional Laundry Services business and also carries on business in agricultural products, including wheat flour and other related products.

G. Future Outlook:

Looking ahead, the Company remains optimistic about the growth prospects of its laundry and textile care business and is committed to pursuing focused strategies to strengthen its market position, improve operational efficiency and capitalise on emerging opportunities. Key areas of strategic focus include:

Institutional and Commercial Demand: The Company will continue to focus on expanding its presence across hospitals, hotels, hostels, corporate establishments and other institutional customers for its laundry and textile care services, while strengthening its market presence and customer base in the agricultural sector and catering to evolving consumer and market demand.

Operational Efficiency and Cost Management: Effective management of key operating costs, including electricity, water, chemicals, manpower and transportation, will remain a priority. The Company will continue to optimise processes and improve resource utilisation to support sustainable margins.

Service Quality and Hygiene Standards: Maintaining high standards of cleanliness, hygiene, garment care and timely delivery will remain central to the Companys operations. The Company will continue to strengthen processes and quality controls to meet evolving customer expectations.

Supply Chain and Procurement Management: The Company will continue to strengthen its procurement and supply-chain capabilities for agricultural products by focusing on reliable sourcing, quality control, inventory management, storage and efficient distribution. Sustainability and Resource Efficiency: With increasing focus on environmental responsibility, the Company will continue to adopt practices aimed at efficient consumption of water and energy, responsible use of chemicals and improved waste management.

Changing Customer Preferences: The Company will continue to monitor changing consumer and institutional requirements and develop convenient service offerings, including pickup and delivery, digital booking and customised laundry solutions.

H. Risks and Concerns:

Operational Risk: Equipment failure, utility interruptions or delays in maintenance may affect laundry processing capacity and timely service delivery.

Customer Risk: Dependence on a limited number of major institutional customers may impact revenues in the event of contract termination, reduced volumes or delayed renewals.

Commodity and Agricultural Risk: Changes in agricultural commodity prices, seasonal availability, crop yields, adverse weather conditions, pest attacks and other factors affecting agricultural production may impact procurement costs, availability and profitability.

Regulatory, Environmental and Food Safety Risk: Changes in environmental, wastewater treatment, labour, occupational safety, food safety, quality and other applicable regulatory requirements across the laundry and agricultural businesses may increase compliance obligations and operating costs.

I. Material Developments in Human Resources / Industrial Relations:

Industrial Relations continued to be harmonious and cordial throughout the year. The Company always valued its Human Resources and believes in unlimited potential of each employee. Your directors believe and affirm the importance of developing human resources, which is the most valuable asset of your Company and the key element in bringing all round improvements and achieving growth. The human resource philosophy and strategy of your Company has been designed to attract and retain the best talent. In practice, it creates and nurtures a work environment that keeps employees engaged & motivated. Employee relations during the year under review were peaceful. The contribution and co-operation received from employees across all levels was excellent and the same has been appreciated & supported by the management through its continuous & systematic training programmes.

J. Internal control systems and their adequacy

The Company has an independent Internal Audit function with a well-established risk management framework. The scope and authority of the Internal Audit function are derived from the Internal Audit Charter approved by the Audit Committee. The Company has engaged a reputable external firm to support the Internal Audit function for carrying out the Internal Audit reviews.

The Audit Committee meets every quarter to review and discuss the various Internal Audit reports and follow up on action plans of past significant audit issues and compliance with the audit plan. The Chairperson of the Audit Committee has periodic one-on-one meetings with the Internal Auditor to discuss any key concerns.

Additionally, the following measures are taken to ensure proper control:

Budgets are prepared for all the operational levels.

Any material variance from budget has to be approved by the Commercial director. Any major policy change is approved by the managing director. Any deficiency in not achieving target is reviewed at management meetings.

K. Discussion on financial performance with respect to operational performance

The financial performance of the Company for the Financial Year 2025-26 is described in the Directors Report of the Company.

L. Material developments in Human Resources / Industrial Relations front including number of people employed

The Company continued to maintain cordial and positive relations with its employees during FY 2025 26. The Company also remained committed to maintaining a healthy and productive work environment to support operational efficiency and quality of services.

M. Caution Statement

Statements made in the Management Discussion and Analysis describing the various parts may be “forward looking statement” within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Govt. Regulations and amendments in tax laws and other internal and external factors.

Registered Office:	By the Order of the Board Le Lavoir Limited
1st Floor Shop No. 105, Four Square Plaza, Uni.Rd., Rajkot Sau Uni Area, Rajkot, Rajkot, Gujarat, India, 360 005	Sd/-	Sd/-
	Ashok Dilipkumar Jain	Swaroop Dylon
Place: Rajkot	Director	Whole-time Director
Date: 2nd September, 2026	DIN: 03013476	DIN: 11921050