LS Industries Ltd Management Discussions

"ANNEXURE-F”

Your Board of Directors is pleased to share with you the "Management Discussion and Analysis Report” for the Financial Year ended March 31, 2026.

INDUSTRY STRUCTURE & DEVELOPMENTS:

TEXTILES:

The textile industry is one of Indias major manufacturing and employment-generating sectors. It covers the complete chain from fiber production to spinning, weaving/knitting, processing, garment manufacturing and distribution. India has an advantage because it possesses a broad textile value chain, covering both natural fibers such as cotton, wool, silk and jute and man-made fibers (MMF). The Company is still looking for opportunity in this sector to start from very beginning in this industry.

PAPER TRADING:

India has a sizeable paper manufacturing base, with around 850 paper mills and annual production of about 25 million tonnes. Domestic paper consumption was estimated at 23.84 million tonnes in 2024-25, growing at nearly 6% annually. Around 74-76% of Indias paper production in 2024-25 came from recovered paper and recycled fibre, highlighting the industrys increasing reliance on recycled raw materials. The Company is dealing in Paper trading and generating Income from this segment.

GLOBAL ECONOMY OVERVIEW

The global economy remained resilient during 2025 despite elevated policy uncertainty, shifting trade patterns and geopolitical developments. However, the outlook became more uneven during 2026, with energy-price pressures, trade-policy changes, evolving supply chains and differing country exposures influencing growth prospects.

According to the International Monetary Fund ("IMF”) World Economic Outlook Update, July 2026, global growth is estimated at 3.5% in 2025 and is projected to moderate to 3.0% in 2026 before recovering to 3.4% in 2027.

Advanced economies are projected to grow by 1.7% in 2026 and 1.8% in 2027, compared with 1.9% in 2025. Emerging market and developing economies are expected to remain the principal contributors to global growth, although their growth is projected to moderate from 4.5% in 2025 to 3.8% in 2026, before recovering to 4.5% in 2027.

For manufacturing businesses, the environment reinforces the importance of procurement agility, prudent inventory management, cost discipline, energy efficiency, dependable delivery and close customer engagement. We remain focused on strengthening operational resilience, quality consistency, resource productivity and responsiveness across our textile operations.

INDIAN ECONOMY OVERVIEW

Indias economy demonstrated strong resilience during FY 2025-26 despite a challenging global environment marked by trade policy uncertainty, geopolitical tensions and volatile commodity prices. Broad-based domestic demand, public infrastructure investment, improving rural activity and continued strength in services and manufacturing supported economic momentum.

According to the National Statistical Offices Provisional Estimates, Indias real GDP grew by 7.7% in FY 2025-26, compared with 7.1% in FY 2024-25. Real Gross Value Added grew by 7.9%, supported by robust expansion in the secondary and tertiary sectors. The secondary sector grew by 8.8%, while the tertiary sector expanded by 9.3%; the primary sector recorded 3.2% growth, supported by agriculture and allied activities.

Domestic consumption and investment remained important growth drivers. Private Final Consumption Expenditure and Gross Fixed Capital Formation each recorded growth of more than 7.5% during the year. This reflected improving demand conditions, sustained public capital expenditure and continued investment across infrastructure, manufacturing and services.

Manufacturing activity remained a key contributor to economic performance. The manufacturing, trade and related services, and financial, real estate and professional-services segments recorded double-digit growth during FY 2025-26. The continued emphasis on production-linked incentives, infrastructure creation, formalization, digitalization and supply- chain development is expected to support Indias long-term competitiveness.

Inflation remained broadly contained for a significant part of the year. The Economic Survey reported average headline CPI inflation of 1.7% during April-December 2025, aided primarily by moderation in food and fuel prices. Retail inflation, however, remains sensitive to food-price movements, weather conditions, global energy prices and geopolitical developments.

Outlook: India enters FY 2026-27 with strong domestic economic fundamentals, supported by consumption, investment, infrastructure development, financial-sector stability and policy support for manufacturing. The Economic Survey projected real GDP growth in the range of 6.8% to 7.2% for FY 2026-27. The outlook will nevertheless remain dependent on global trade conditions, energy prices, monsoon performance, inflation trends and the pace of private-sector investment.

For Sectors like Paper Trading the outlook in India is positive, particularly in packaging and specialty paper. Domestic demand is expected to benefit from e-commerce, organized retail, food processing, pharmaceuticals and rising consumption. Industry projections indicate that Indian paper production could reach approximately 35 million tonnes by FY2030.

At the same time, traditional newsprint and some printing-paper segments face structural pressure from digitalisation and changing media consumption.

DISCLOSURE OF ACCOUNTING TREATMENT

The standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS”) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. The Company has not adopted any accounting treatment that differs from the prescribed accounting standards and requires separate disclosure under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Any material change in an accounting policy, accounting estimate or useful life of an asset, together with its financial effect, has been appropriately disclosed in the audited financial statements and notes to accounts.

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.621.82 Lakhs as compared to Rs. 478.85 lakhs in the previous financial year. The Profit/(Loss) after tax for the same period stands at Rs. (103.00) as compared to the Profit/(Loss) after tax of Rs. (2054.75) 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

Paper trading offers an opportunity to diversify revenue sources. Increasing demand for packaging paper, paperboard, recycled paper and specialty paper can provide new business opportunities, particularly as e-commerce, FMCG and organized retail expand. Your Company will focus on use of digital platforms, automation, data analytics and e-commerce to improve procurement, inventory management, customer reach and operational efficiency. Digitalization can also help reduce transaction and distribution costs.

THREATS

The textile industry is facing a challenge with the limited availability of raw materials and labor, 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 established internal-control systems commensurate with the scale, nature and complexity of its operations. These systems support the orderly and efficient conduct of business, safeguard assets, promote compliance with applicable laws and policies, ensure the reliability of financial and operational information, and facilitate timely decision-making.

The control framework is supported by defined delegation matrices, documented policies and procedures, authorization mechanisms, periodic reconciliations, management reviews and reporting processes. These controls provide reasonable assurance that transactions are appropriately authorized, accurately recorded and reflected in the financial statements in accordance with applicable accounting standards.

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.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

We recognize that responsible manufacturing requires sustained attention to environmental stewardship, employee health and workplace safety. Our EHS approach focuses on regulatory compliance, risk prevention, resource efficiency and the development of a safe and responsible operating culture.

COMMITMENT TO EMPLOYEE SAFETY

Comprehensive Training: We conduct safety-awareness and process-related training to strengthen employee understanding of safe working practices, operational discipline and emergency preparedness.

Proactive Risk Management: Potential safety and operational risks are identified and addressed through preventive measures, workplace practices, monitoring mechanisms and corrective- action processes.

HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS

The Company recognizes its employees as a key driver of operational excellence, quality, safety and sustainable growth. Our human-resource approach focuses on attracting, developing and retaining capable talent; strengthening functional skills; promoting accountability; and fostering a respectful, inclusive and performance-oriented workplace.

We continued to focus on appropriate talent deployment, training, employee engagement, safety awareness and the development of functional and leadership capabilities. A skilled and motivated workforce remains essential to consistent product quality, productivity improvement and effective response to evolving customer requirements.

Industrial relations remained harmonious and cordial during the year. The Company maintains ongoing engagement with employees and seeks to address workplace matters through transparent policies, clear communication and applicable grievance-redressal mechanisms.

WAY FORWARD

We will remain focused on strengthening the competitiveness of our core textile business through product relevance, quality consistency, cost discipline, operational efficiency and customer responsiveness. We will continue to assess opportunities in value-added products, new customer relationships and market segments while maintaining prudent capital allocation and working- capital discipline.

In an operating environment shaped by changing demand conditions, input-cost movements, trade developments and sustainability expectations, our priority will remain resilient execution, responsible manufacturing and sustainable stakeholder value creation.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains statements describing the Companys objectives, projections, estimates, expectations, plans, strategies, outlook and future prospects. These statements may constitute forward-looking statements within the meaning of applicable securities laws and regulations.

Such forward-looking statements are based on certain assumptions, estimates and expectations available to the management at the time of preparation of this report. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, demand environment, raw material prices, foreign exchange rates, interest rates, government policies, regulatory developments, competitive conditions, customer preferences, supply-chain disruptions, climatic events, technology changes, project execution timelines and other risks beyond the Companys control.

The Company does not undertake any obligation to publicly update, modify or revise any forward- looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws and regulations. Readers are advised not to place undue reliance on forward-looking statements and to read this section together with the Companys financial statements, notes to accounts, Boards Report, Corporate Governance Report, Business Responsibility and Sustainability Report and other statutory disclosures forming part of the Annual Report.

		By order of the Board
		For LS Industries Limited
	-Sd-	-Sd-
	(Nipun Goyal)	(Naveen Kumar Gupta)
	DIN:02853571	DIN: 11023859
	Managing Director	Director & Chief Financia Officer
Date: 05.09.2026
Place: Nalagarh