LS Industries Ltd Management Discussions

Your Board of Directors is pleased to share with you the "Management Discussion and Analysis Report" for the Financial Year ended March 31, 2025.

INDUSTRY STRUCTURE & DEVELOPMENTS

The Indian textile and apparel industry is one of the oldest and most significant industries in the Indian economy, contributing substantially to industrial production, employment generation, and export earnings. It plays a vital role in the countrys socio-economic development and is deeply linked to both agriculture (for raw materials like cotton, jute, silk, and wool) and industry (for manufacturing and processing).

GLOBAL ECONOMY OVERVIEW

The International Monetary Fund (IMF) projects global real GDP growth at ~3.2% in 2024, and again ~3.2% in 2025.Advanced economies are expected to grow modestly: from ~1.6% in 2023 to ~1.7% in 2024 and ~1.8% in 2025. Emerging markets & developing economies are projected to grow ~4.2% in both 2024 and 2025 (a slight slowdown from ~4.3% in 2023). Though there is some resilience, this growth rate remains below the pre-pandemic average (~3.8% for 2000-19) indicating subdued prospects.

Global inflation is expected to moderate, with the IMF estimating inflation to decline from ~6.8% in 2023 to ~5.9% in 2024 and ~4.5% in 2025. Central banks in advanced economies continue with high policy rates (to combat inflation). The persistence of elevated rates is a drag on growth.

INDIAN ECONOMY OVERVIEW

According to the International Monetary Fund (IMF), Indias real GDP growth is projected at around 6.4 % for FY 2025-26. Other sources report slightly higher projections: e.g., growth in the range 6.3 % to 6.8 % for FY 2025-26 as per the Indian governments Economic Survey. Inflation is expected to moderate: For instance, in the context of earlier years the IMF anticipated decline in consumer price inflation towards ~4.8 %-5 % in coming years. The current account deficit is expected to remain contained (e.g., ?€”1.3 % of GDP in 2025/26 as per IMFs Article IV on India) despite global headwinds. Fiscal consolidation remains on the agenda: The general government overall balance was projected around -7.0 % of GDP in 2025/26.

India is expected to remain one of the fastest-growing major economies in FY 2025-26, though growth around ~6.3-6.8 % means growth will be moderate compared to very high growth years. For businesses and investors: Favourable themes include domestic consumption plays, manufacturing/industry linked plays (especially benefiting from policy push), infrastructure and services growth. At the same time, companies must remain vigilant about external risks, input cost inflation, competitive pressures, and regulatory/governance aspects.

For sectors like textiles (relevant to your interest), domestic demand growth, labour-intensive production advantages, and export diversification are key opportunities. But global demand softness and trade-barriers will require strategic agility and cost management.

FINANCIAL PERFORMANCE OF COMPANY

LS Industries Limited is engaged in the business of producing high-quality fabrics and textiles for various applications, including clothing, home textiles, and industrial use. The Company has not been able to maintain its position in the market. The Company is facing continuous struggle.

During the year under review, your Company recorded a total income of Rs.478.86 Lakhs as compared to Rs.57.49 lakhs in the previous financial year. The Profit/(Loss) after tax for the same period stands at Rs. (2054.75) as compared to the Profit/(Loss) after tax of Rs. (331.73) in the previous financial year. Your directors are putting in their best efforts to improve the performance of the Company.

OUTLOOK

Along with Textile and Paper trading business. The company is in line with the Companys strategic objective of diversification and sustainable growth; the management has identified technology- driven agritech and food automation as promising emerging sectors. Accordingly, the Company has decided to invest in a venture integrating artificial intelligence (AI), robotics, and smart automation into food processing and precision agriculture.

Simultaneously, the Company is exploring opportunities in Hydroponics Farming- an advanced, soil-less agricultural practice that leverages AI-enabled environmental control systems to optimize yield, resource efficiency, and product quality.

OPPORTUNITIES

The global shift toward automation, digitization, and contactless operations has opened vast opportunities in Textiles, Paper trading and Hydroponics represents a transformative opportunity in sustainable agriculture ?€” a system that minimizes soil use, water waste, and chemical dependency, while maximizing yield and quality. When integrated with Al-based environmental control systems, hydroponics can revolutionize food production in Indias climate-constrained and resource-sensitive regions.

THREATS

The textile industry is facing a challenge with the limited availability of raw materials and labour, which has resulted in higher retail prices and reduced consumer demand for clothing. Meeting the demand for these scarce raw materials could also lead to increased costs, further impacting the industry.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has internal control system to ensure that all the activities are monitored and controlled against any misuse or disposition of assets and that all the transactions are authorized, recorded are reported correctly. The Audit Committee of the Board of Directors reviews the adequacy of internal control.

RISKS AND CONCERNS

Risk is an inherent part of any business. There are various types of risks that threaten the existence of a Company like Strategic Risk, Business Risk, Finance Risk, Environment Risk, Personnel Risk, Operational Risk, Reputation Risk, Regulatory Risk, Technology Risk, Political Risk, etc. Your Company aims at enhancing and maximizing shareholders value by achieving appropriate trade-off between risk & returns.

HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS

We believe that our employees are the assets of our organization. We are committed to provide opportunities to our employees to re-skill and up-skill themselves, in the face of rapidly evolving technology and increasing automation. Your Company is confident that its human capital will effectively contribute to the long-term value enhancement of the organization. The Company continuously nurtures this environment to keep its employees highly motivated, result oriented and adaptable to the changing business scenario. The Companys human resource policies align closely with the overall business strategy and play ar integral role in executing business operations.

By order of the Board For LS Industries Limited