Lords Mark Industries Limited Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

Global & Indian Economic Scenario

During the Financial Year 2025–26, the global economy demonstrated resilience amidst macroeconomic shifts, supply chain realignments, and geopolitical developments. India continues to be one of the fastest-growing major economies globally, supported by increasing infrastructure development, digital transformation, manufacturing incentives, healthcare expansion, and sustainability-focused policies. Government initiatives promoting domestic manufacturing, healthcare accessibility, renewable energy, and technological innovation continue to create significant opportunities across various sectors.

Transformational Corporate Restructuring

The Financial Year 2025–26 marked a landmark, transformational phase for Lords Mark Industries Limited following the successful implementation of the Resolution Plan approved by the Honble National Company Law Tribunal (NCLT), Mumbai Bench, vide its Order dated July 28, 2025, under the Insolvency and Bankruptcy Code, 2016 (IBC), and the completion of the reverse merger with Lords Mark Industries Private Limited.

This strategic transformation has significantly enhanced the Companys scale of operations, expanded its business footprint, and strengthened its long-term growth prospects. The Company has established a diversified business platform with operations spanning healthcare and medical diagnostics, biotechnology, renewable energy, technology solutions, and other emerging business segments. Such diversification reduces dependence on a single business vertical and enables the Company to leverage growth opportunities across multiple industries. The successful implementation of the Resolution Plan has positioned the Company with an enhanced capital base, stronger operational capabilities, improved financial strength, and a wider customer reach.

2. BUSINESS OVERVIEW

Lords Mark Industries Limited is engaged in diversified business activities through its direct operations and key operating subsidiaries, including Lords Mark Microbiotech Pvt. Ltd., Lords Mark Biotech Pvt. Ltd., Lords Green Energy Private Limited, Lords Mark Tech Next Pvt. Ltd., and Renalyx Health Systems Private Limited. Following the reverse merger, the Company has significantly expanded its operational footprint across key growth sectors:

- Healthcare and Medical Diagnostics: Advanced diagnostic tools, medical devices, and renal care systems (Renalyx Health Systems).

- Biotechnology and Life Sciences: Life sciences, molecular diagnostics, and research-based healthcare solutions.

- Renewable and Green Energy Solutions: Sustainable clean energy infrastructure and green energy solutions.

- Technology-Driven Business Solutions: Digital platforms, automation, and next-generation tech enablement.

- Emerging Business Opportunities: High-growth initiatives aligned with national development priorities.

During the year, the Company successfully executed all milestones under the NCLT-approved Resolution Plan, including the settlement of dues to financial, operational, and statutory creditors; transfer of all operational assets, liabilities, contracts, licenses, intellectual property, and employees; capital restructuring; change in management and control; and share allotment under the approved exchange ratio (1.25 equity shares of Rs10 each allotted for every 1 share of Rs5 each in the transferor company). These developments have transformed the Company into an integrated listed enterprise with significantly enhanced operational capabilities.

3. FINANCIAL AND OPERATIONAL PERFORMANCE

Note on Comparability: The financial performance for FY 2025–26 reflects the operations of the merged entity pursuant to the implementation of the Resolution Plan and the reverse merger. Consequently, the corresponding financial figures for FY 2024–25 represent Kratos Energy & Infrastructure Limited prior to the Schemes implementation and are therefore not directly comparable.

During FY 2025–26, the Company recorded significant operational improvement. Standalone revenue from operations reached Rs60,170.59 lakhs (Consolidated: Rs68,474.74 lakhs). Standalone total income stood at Rs61,010.39 lakhs (Consolidated: Rs69,330.49 lakhs). Standalone Profit Before Tax (PBT) reached Rs7,204.81 lakhs (Consolidated PBT: Rs6,793.73 lakhs). After providing for tax expense of Rs1,928.73 lakhs on a standalone basis and Rs1,934.77 lakhs on a consolidated basis, standalone Profit After Tax (PAT) stood at Rs5,276.08 lakhs (Consolidated PAT: Rs4,858.96 lakhs).

The dramatic turnaround and financial growth were primarily driven by the successful execution of the Resolution Plan, seamless integration of post-merger business operations, expansion of revenue-generating business segments, improved operational efficiencies, enhanced scale of operations, and optimized resource utilization.

Particulars (INR in Lakhs)	Standalone (FY 2025-26)	Standalone (FY 2024-25)	Consolidated (FY 2025-26)	Consolidated (FY 2024-25)
Revenue from Operations	60,170.59	-	68,474.74	-
Other Income	839.70	-	855.75	-
Total Income	61,010.39	-	69,330.49	-
Cost of Materials	49,538.48	-	55,560.32	-
Employee Benefit Expenses	1,185.32	-	2,146.60	-
Finance Costs	883.28	2.13	1,276.56	2.13
Depreciation & Amortization	691.16	0.81	902.62	0.81
Other Expenses	1,088.79	92.71	2,232.22	92.71
Total Expenses	53,387.03	95.64	62,118.31	95.64
Profit / (Loss) Before Tax	7,204.81	(672.64)	6,793.73	(672.64)
Tax Expense	1,928.73	0.25	1,934.77	0.25
Profit / (Loss) After Tax	5,276.08	(672.89)	4,858.96	(672.89)

4. OPPORTUNITIES

- Healthcare and Diagnostics: Increasing healthcare spending, diagnostic infrastructure expansion, and government accessibility programs drive sustained demand.

- Biotechnology: Innovations in molecular diagnostics, life sciences, and specialized medical research present strong growth avenues.

- Renewable Energy: Indias net-zero transition and clean energy mandates generate continuous opportunities in solar and green energy projects.

- Technology and Digital Transformation: Enterprise digital adoption creates robust demand for technology platforms, automation, and tech-enabled business solutions.

- Strategic Expansion: The post-merger balance sheet and capital base (Authorised Capital Rs800 Crore; Paid-up Capital Rs426.62 Crore) allow the Company to pursue strategic partnerships, market expansion, and strategic acquisitions.

5. THREATS, CHALLENGES AND RISKS

The Company operates in a dynamic business environment influenced by macroeconomic shifts, technical evolution, and regulatory changes. Key risks and mitigation strategies include:

- Business & Market Risk: Evolving customer demand and intense market competition. Mitigated through continuous product innovation, operational efficiencies, and customer-centric solutions.

- Regulatory Risk: Compliance with evolving statutory laws, regulatory frameworks, tax laws, and sector-specific policies. Mitigated by continuous compliance monitoring under professional secretarial oversight.

- Financial & Input Cost Risk: Managing liquidity, interest rate shifts, and raw material input cost volatility (Cost of Materials stood at Rs49,538.48 lakhs standalone). Mitigated via conservative financial management and prudent capital allocation.

- Strategic & Operational Risk: Managing multi-entity corporate integration, supply chains, and project execution post-merger. Mitigated through rigorous oversight by the IMC, Audit Committee, and executive board.

- Cyber Security Risk: Operational dependence on digital platforms. Mitigated through a multi-layered defence architecture, access controls, real-time monitoring, and structured data security safeguards.

6. OUTLOOK

The outlook for the Company remains highly positive. Following the implementation of the Resolution Plan and reverse merger, the Company has emerged as an integrated listed enterprise with strong financial fundamentals. Management focus for FY 2026–27 and beyond will centre on driving sustainable revenue growth, achieving operational excellence, expanding high-growth sectors, fostering strategic partnerships, embracing technology adoption, strengthening corporate governance, and delivering long-term value to shareholders.

7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate system of internal financial controls commensurate with the nature, size, and complexity of its expanded operations. The framework ensures asset safeguarding, financial reporting accuracy, regulatory compliance, fraud prevention, and efficient resource utilization. Internal audits are conducted periodically, and the Audit Committee regularly reviews audit findings, monitoring corrective measures to ensure a robust governance environment.

8. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human capital remains one of the Companys most vital assets. Post-merger, personnel were integrated into the Companys operational framework. Standalone employee benefit expenses stood at Rs1,185.32 lakhs (Consolidated: Rs2,146.60 lakhs). The Company maintains harmonious industrial relations and prioritizes skill development, performance management, diversity, employee well-being, and safe workplace practices. The Company strictly adheres to the Maternity Benefit Act, 1961, and the POSH Act, 2013 (Zero complaints received or pending during FY 2025–26).

9. KEY FINANCIAL RATIOS & SIGNIFICANT CHANGES

Pursuant to Schedule V of the SEBI (LODR) Regulations, 2015, major financial ratios show significant variance (>25%) compared to FY 2024–25 due to the structural transformation from a non-operating entity into an active operational enterprise post-reverse merger:

Key Financial Ratio	FY 2025-26	FY 2024-25	% Variance	Primary Reason for Variance
Debtors Turnover Ratio	Disclosed in Notes	N/A	>25%	Commencement of active commercial sales cycles
Inventory Turnover Ratio	Disclosed in Notes	N/A	>25%	Onboarding of operational inventory post-merger
Interest Coverage Ratio	9.16x	N/A	>25%	Significant surge in EBIT relative to finance costs
Current Ratio	Disclosed in Notes	Prior Base	>25%	Capital restructuring and asset transfer under NCLT plan
Debt-Equity Ratio	Disclosed in Notes	Prior Base	>25%	Equity capital expansion to Rs426.62 Crore paid-up capital
Operating Profit Margin (%)	14.59%	N/A	>25%	Inclusion of active operational commercial margins
Net Profit Margin (%)	8.77%	N/A	>25%	Turnaround to net profitability (PAT Rs5,276.08 Lakhs)
Return on Net Worth (RoNW)	12.37%	N/A	>25%	Conversion of legacy net worth base to earnings platform

10. CORPORATE GOVERNANCE AND RISK MANAGEMENT INITIATIVES

The Company is committed to maintaining highest standards of governance, transparency, and ethical accountability. Consequent upon the reverse merger and enhancement of paid-up share capital (Rs426.62 Crore) and net worth, mandatory Corporate Governance provisions under SEBI (LODR) Regulations become applicable from FY 2026–27. The Company has initiated robust transition measures including strengthening Board/Committee structures, implementing Enterprise Risk Management frameworks, Vigil Mechanism/Whistle Blower policies, Insider Trading codes, and maintaining a Structured Digital Database (SDD).

11. FUTURE STRATEGY

The Companys strategic priorities focus on expanding healthcare and diagnostics, scaling biotechnology, accelerating green energy initiatives, investing in digital technology platforms, pursuing strategic partnerships and acquisitions, maintaining strict financial discipline, and driving long-term shareholder value creation.

12. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, or predictions may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied due to economic conditions, government policy changes, tax laws, competitive dynamics, technological developments, and other market risks beyond the Companys control.