Luxury Time Ltd Management Discussions

This Management Discussion and Analysis Report presents the managements perspective on the business environment, operating performance, financial position, opportunities, risks and outlook of Luxury Time Limited ("the Company") for the financial year ended March 31, 2026. Unless otherwise stated, the financial information discussed herein is based on the audited standalone financial statements of the Company for FY 2025-26.

1. Global Economic Overview

FY 2025-26 remained a challenging yet mixed macroeconomic environment. On the one hand, increased protectionism led to tariff wars; on the other hand, it also created opportunities. Global economic growth for 2025-26 stabilized at a moderate 3.0% to 3.3% range, driven by technology investment and resilient emerging markets, though tempered by geopolitical conflicts, tariff shifts, and uneven regional momentum.

The key drivers for growth and investments were Al-driven technology that helps in boosting integrated value chains, offsetting headwinds from sluggish industrial investment and trade policy realignments.

Regional conflict shocks and energy price disruptions have renewed localized price pressures, keeping developing economy inflation elevated near 5.2% and developed regions around 2.9%.

The emerging markets remained the primary global growth engines, led by India with an estimated real GDP growth of 7.4% for fiscal 2026 backed by domestic consumption and investment. In the luxury market, despite the precious metals prices going through the roof and Rupee depreciating significantly against foreign currencies like dollar and CHF, India continued to be supported by high- income consumer resilience, brand-led engagement, experiential retail and strong demand for products with design, heritage and craftsmanship. Despite the global hiccups, India continued to improve its retail infrastructure, supported by domestic consumption, expanding digital payments, rising disposable incomes, greater exposure to global brands and a growing younger affluent consumer base have created a favorable environment for premium and luxury categories, including watches and related services.

2. Industry Structure, Developments and its Impact in India

A luxury watch is often considered as an investment and is associated with its heritage, strong brand equity, relatively exclusive distribution, product craftsmanship, recognizability, and appreciation from peer group. This industry is highly individual-centric and thrives on satisfying the achievement of personal goals or collectability. Hence different customer segments exist and catered by different brands. Since the luxury customer seeks newness and innovation that reflects their respective personalities, it provides room for growth for different brands.

The after-sales services, professional advice and timely product availability help build trust. Globally, the category has evolved from being only a functional timekeeping product to a lifestyle, gifting, investment and status-led product category. Consumers increasingly value authenticity along with retail experience across various retail channels.

In India, the luxury and premium watch market continues to benefit from premiumization, growth in organized retail, increasing international travel exposure, brand awareness, wedding and gifting demands, expansion of affluent and upper-middle income households, and the expectation of a luxury retail experience. At the same time, the industry remains sensitive to import duties, foreign exchange movements, brand allocation policies, inventory availability, compliance requirements and the broader discretionary spending environment. The FTA with Switzerland, helped rationalize the customs duties which further helped in delivering better services and experiences.

Luxury Time Limited is in a great position as it provides a complete ecosystem through distribution of watches, world servicing of timepieces, end-to-end marketing and brand PR, authentic tools and machines. This diversified yet highly focused product portfolio has led us to fine-tune the processes and systems and deliver efficient business outcomes. The Companys business model is therefore closely linked with product availability, brand relationships, customer experience, after-sales standards and disciplined inventory and working capital management.

3. Business Overview

Luxury Time Limited, incorporated on August 22, 2008 and converted from a private company to a public company on February 24, 2025, is engaged in the business of importing and trading all types of clocks and watches, along with world-class after sales services, import and trading in specialized tools and machines used in watch making/repair, and luxury retailing. The Company also provides brand promotion related services including retail audits, exhibitions, consultancy, boutique management, training and brand promotion.

During the year under review, the Company completed its public issue, and its equity shares were listed on the BSE SME Platform. The listing marks an important milestone in the Companys journey, strengthening its governance framework, public market visibility and ability to pursue growth with greater financial flexibility.

The Company remains focused on building a trusted, service-backed and compliant business in the luxury watch ecosystem. Managements priorities include strengthening brand and customer relationships, improving operating discipline, building aftersales and service capabilities, maintaining prudent inventory controls and ensuring responsible growth.

4. Opportunities and Threats Opportunities

- Premiumisation and aspiration-led consumption: The growing preference for premium lifestyle products provides a favourable demand backdrop for watches and related services.

- Growth of authorised and organised channels: Customers increasingly prefer trusted channels for authenticity, warranty, after-sales support and overall buying experience.

- Expansion of after-sales and service revenue: Repair, maintenance, spares and brand-support services can provide recurring revenue opportunities and deepen customer engagement.

- Brand promotion and retail support services: As global and domestic brands expand in India, services such as roadshows, training events, retail audits, and exhibitions can become increasingly relevant.

- Improved financial strength after public issue: Enhanced net worth and a debt-free balance sheet provide the Company with a stronger base for future growth and resilience.

Threats

- Macroeconomic and discretionary spending risk: Luxury watch purchases may be affected by changes in consumer sentiment, inflation, interest rates and broader economic and geopolitical uncertainty.

- Foreign exchange and import-related risk: As the business involves imported products and components, currency fluctuations, customs duties and changes in trade policy can impact costs and margins.

- Inventory and product allocation risk: Luxury watches require careful inventory planning. Mismatch between demand and availability, changing consumer preferences or slow-moving stock can affect working capital and profitability.

- Counterfeit risk: Unauthorised channels and counterfeit products can affect customer trust and brand value in the industry.

- Operational and logistics risk: Movement of high-value inventory requires strong security, insurance, documentation and control processes across locations and service channels.

5. Product-wise Performance

The Company is primarily engaged in the business of trading, and distribution of watches and related spares. Since the Company operates in a single reportable business segment, separate segment reporting under the applicable Accounting Standard is not applicable. However, based on the nature of revenue, the product-wise / service-wise performance is summarised below:

Particulars	FY 2025-26 (5 Lakhs)	FY 2024-25 (5 Lakhs)	Change
Sale of goods	4,832.03	5,194.97	-6.99%
Sale of services	559.17	180.29	+210.15%
Revenue from operations	5,391.20	5,375.26	+0.30%

Revenue from operations remained broadly stable at 55,391.20 lakhs as against 55,375.26 lakhs in the previous year. While sale of goods moderated during the year, service revenue recorded significant growth, reflecting the increasing contribution of service- led activities to the Companys revenue mix. Sale of services contributed 10.37% of revenue from operations in FY 2025-26 as compared to 3.35% in FY 2024-25.

6. Discussion on Financial Performance with respect to Operational Performance

Particulars	FY 2025-26 (Rs. Lakhs)	FY 2024-25 (Rs. Lakhs)	Change
Revenue from operations	5,391.20	5,375.26	+0.30%
Total income	5,420.75	5,436.82	-0.30%
EBITDA	750.33	510.88	+46.87%
EBITDA margin on revenue from operations	13.92%	9.50%	+442 bps
Profit before tax	725.80	485.40	+49.53%
Profit after tax	561.98	334.53	+67.99%
PAT margin on revenue from operations	10.42%	6.22%	+420 bps
Basic and diluted EPS	58.04	55.42	+48.38%

The Company delivered a significant improvement in profitability during FY 2025-26. EBITDA increased by 46.87% to 5750.33 lakhs, supported by a better gross margin profile, disciplined cost management and a higher contribution from services. Profit before tax increased by 49.53% to 5725.80 lakhs and profit after tax increased by 67.99% to 5561.98 lakhs.

Cost of goods and direct expenses, including changes in inventory, were lower during the year, contributing to improved operating margins. Employee benefit expenses increased from 5198.35 lakhs to 5232.55 lakhs, reflecting investment in people and business operations. Other expenses increased to 5515.27 lakhs, primarily reflecting the scale and requirements of a growing and listed business, including marketing, professional, travel, rent and other operating costs. Finance costs reduced from 523.23 lakhs to 514.52 lakhs, and the Company had nil borrowings outstanding as at March 31, 2026.

7. Balance Sheet and Liquidity Position

Particulars	As at March 31, 2026 (Rs.Lakhs)	As at March 31, 2025 (Rs.Lakhs)	Change
Share capital	825.48	642.60	+28.46%
Reserves and surplus	2,726.65	1,041.71	+161.75%
Net worth	3,552.13	1,684.31	+110.90%
Current assets	2,960.24	2,223.59	+33.13%
Current liabilities	749.92	811.83	-7.63%
Current ratio	3.95x	2.74x	Improved
Borrowings outstanding	Nil	20.15	Debt-free at year-end
Cash and bank balances	387.96	329.44	+17.76%

The Companys financial position strengthened significantly during the year. Net worth increased to 53,552.13 lakhs as at March 31, 2026 from 51,684.31 lakhs as at March 31, 2025, primarily on account of the public issue, increase in securities premium and accretion of profits. The Company closed the year with nil borrowings and a stronger current ratio of 3.95x, indicating a comfortable liquidity position.

Inventories reduced from 51,065.71 lakhs to 5969.48 lakhs, reflecting better inventory discipline. Trade receivables increased from 5664.12 lakhs to 51,148.04 lakhs, mainly due to the timing and mix of sales and credit terms. Management continues to monitor receivables closely and remains focused on timely collections and prudent credit control.

The Company generated net cash flow from operating activities of 5124.25 lakhs during FY 2025-26. Net cash used in investing activities was 51,342.18 lakhs, primarily due to investment in fixed deposits and business assets. Net cash flow from financing activities was 51,276.45 lakhs, mainly arising from the public issue of equity shares, net of issue related expenses and borrowings movement during the year. Closing cash and cash equivalents stood at 5387.96 lakhs as at March 31, 2026. In addition, the Company held fixed deposits disclosed under other current and non-current assets.

8. Outlook

Management remains cautiously optimistic about the medium-term prospects of the luxury watch ecosystem in India. The market is expected to benefit from favourable structural drivers such as rising income levels, premiumisation, increasing acceptance of authorised and organised retail channels, growth of affluent consumers, greater brand awareness and the importance of reliable after-sales support.

The Company intends to build on its strengthened balance sheet and listed-company platform to pursue sustainable growth. Key focus areas will include strengthening relationships with brand partners and customers, improving after-sales capabilities, supporting brand promotion assignments, enhancing internal processes, maintaining a prudent inventory profile and ensuring robust compliance and governance standards.

At the same time, the Company will continue to be watchful of macroeconomic uncertainty, discretionary demand cycles, currency movements, import cost changes and working capital requirements. The managements approach will remain disciplined, profitability-focused and risk-aware.

9. Ratio Ratio	31-Mar-26	31-Mar-25	Variation	Reason for variation
Current Ratio	3.95	2.74	44.12%	The Current Ratio improved primarily due to a 33.13% increase in current assets, from ^2,223.59 lakh to ^2,960.24 lakh, along with a 7.63% reduction in current liabilities, from ^811.83 lakh to ^749.92 lakh. The increase in current assets was mainly attributable to higher trade receivables of ^483.92 lakh, fixed deposits of ^300.00 lakh, and an increase of ^58.52 lakh in cash and bank balances. Current liabilities declined mainly due to repayment of short-term borrowings and reduction in other current liabilities and short-term provisions.
Debt-Equity Ratio		0.01	-100.00%	The Debt-Equity Ratio became nil as the Company had no outstanding borrowings as at 31 March 2026, compared with short-term borrowings of ^20.15 lakh as at 31 March 2025. During the year, the Company repaid its outstanding borrowings. Further, shareholders equity increased from ^1,684.31 lakh to ^3,552.13 lakh, mainly pursuant to the public issue of equity shares, an increase in securities premium and profits retained during the year. The movement reflects the strengthening of the Companys capital structure and elimination of year-end debt.
Interest Coverage Ratio	54.06	22.52	140.05%	The Interest Coverage Ratio improved from 22.52 times in the previous year to 54.06 times during the current year. The improvement was attributable to a 45.58% increase in earnings before interest and tax, from ^507.96 lakh to ^739.48 lakh, together with a 39.36% reduction in interest cost, from ^22.56 lakh to ^13.68 lakh. The increase in earnings was mainly driven by improved gross margins, lower purchases and direct expenses and a favourable change in revenue mix. Interest cost declined following the repayment of borrowings during the year. The higher ratio reflects the Companys improved ability to meet its interest obligations from operating earnings.
Inventory Turnover Ratio	3.89	4.18	-6.78%	The Inventory T urnover Ratio decreased mainly due to a 6.84% reduction in cost of goods sold, from ^4,253.40 lakh to ^3,962.67 lakh, while average inventory remained substantially unchanged at approximately ^1,018 lakh. The estimated inventory holding period increased from approximately 87 days to 94 days.
Trade Receivables Turnover Ratio	5.94	8.61	-31.04%	The ratio decreased because average trade receivables increased by 45.25%, from ^623.82 lakh to ^906.08 lakh, whereas net credit sales remained broadly stable. Closing trade receivables increased from ^664.12 lakh to ^1,148.04 lakh, mainly due to the timing of collections and a higher level of credit outstanding at the year-end. Consequently, the estimated collection period increased from approximately 42 days to 61 days. The Company continues to monitor outstanding receivables and strengthen its collection process.
Operating Profit Margin	13.92%	9.50%	46.44%	The Operating Profit Margin improved due to an increase of 46.87% in EBITDA, from ^510.88 lakh to ^750.33 lakh, while revenue from operations remained broadly stable. The improvement was mainly driven by lower purchases and direct expenses, including lower customs duty, together with a change in revenue mix towards service income.
Net Profit Margin	10.42%	6.22%	67.49%	The Net Profit Margin increased as profit after tax rose by 67.99%, from ^334.53 lakh to ^561.98 lakh, while revenue from operations increased marginally by 0.30%. The increase in profitability was attributable to improved gross margins, lower finance costs, reduction in purchases and direct expenses.
Return on Net Worth	15.82%	19.86%	-20.34%	Return on Net Worth decreased despite the increase in profit after tax because the Companys net worth increased at a higher rate. Net worth increased by 110.90%, from ^1,684.31 lakh to ^3,552.13 lakh, mainly due to the public issue of equity shares, an increase in securities premium and retention of current-year profits. As the public issue was completed during the latter part of the financial year, the Company had only a limited period to deploy the additional capital and generate returns thereon. Accordingly, the enlarged equity base resulted in a temporary dilution in Return on Net Worth.

10. Risks and Concerns

- Demand and consumer sentiment risk: Luxury watches are discretionary purchases and may be impacted by changes in consumer sentiment, economic conditions and spending priorities.

- Foreign exchange and import cost risk: Currency fluctuations, import duties, freight, insurance and customs processes can affect landed costs and margins.

- Inventory risk: Luxury watch inventory is high-value and style-specific. Inefficient inventory planning or slow movement can lead to working capital blockage and potential obsolescence.

- Receivables and credit risk: Increase in trade receivables requires continued focus on credit discipline, collections and customer-wise monitoring.

- Brand and supply allocation risk: The Companys performance depends in part on relationships with brand partners, product allocation and availability of relevant models and spares.

- Operational, logistics and insurance risk: High-value inventory movement requires strong documentation, transit controls, insurance coverage, security protocols and clear process ownership across each movement leg.

- Regulatory and compliance risk: As a listed SME company and a business dealing with imported products, the Company is subject to corporate, securities, tax, customs, consumer protection and other regulatory requirements. Compliance lapses may have financial and reputational implications.

- Technology and cyber risk: Greater use of digital systems, websites and customer data requires adequate data protection, cyber hygiene and access controls.

11. Internal Control Systems and their Adequacy

The Company has internal control systems commensurate with the size, nature and complexity of its operations. These systems are designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, safeguarding of assets, prevention and detection of errors and frauds, accuracy and completeness of accounting records, timely preparation of reliable financial information and compliance with applicable laws and regulations.

Given the high-value nature of the Companys inventory, management places emphasis on inventory controls, physical verification, movement documentation, insurance coverage, authorisation procedures, reconciliation processes, procurement controls and segregation of responsibilities. Financial controls are supported by accounting policies, approval mechanisms, periodic reviews and statutory audit processes.

The Company continues to strengthen its control environment as it transitions into a listed public company. The management and the Board periodically review key financial, operational and compliance matters and take corrective actions wherever required. The internal control framework is expected to evolve further with the scale and requirements of the business.

12. Human Resources and Industrial Relations

The Company recognises that people are central to customer experience, brand representation, operational discipline and service quality. During the year, the Company continued to focus on building a capable and accountable team across sales, operations, finance, compliance and support functions. Training, process orientation and role clarity remain important areas for the Company, particularly given the specialised nature of luxury watch products and customer expectations.

Industrial relations remained cordial during the year. The number of employees as at March 31, 2026 was 23. The Company will continue to invest in people capability, professional conduct, compliance awareness and service excellence.

13. Disclosure of Accounting Treatment

The financial statements of the Company have been prepared in accordance with the applicable Accounting Standards notified under Section 133 of the Companies Act, 2013 read with the relevant rules made thereunder and other accounting principles generally accepted in India. The Company has followed the accounting treatment prescribed in the applicable Accounting Standards. As per the Ministry of Corporate Affairs notification dated February 16, 2015, companies whose securities are listed on the SME Exchange are exempt from the compulsory requirement of adoption of Indian Accounting Standards (Ind AS). Accordingly, the Company has prepared its financial statements in accordance with applicable Accounting Standards under Indian GAAP.

14. Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic conditions, demand and supply factors, changes in government policies, tax and regulatory developments, foreign exchange movements, competitive pressures, availability of products and spares, changes in consumer preferences and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments, information or events, except as may be required under applicable law.