Magenta Lifecare Ltd Management Discussions

ANNEXURE 1 TO BOARDS REPORT

1. Global Economy and Outlook:

The global economy in the Financial Year 2025-26 demonstrated resilience despite persistent geopolitical tensions, evolving trade dynamics and intermittent financial market volatility. Global GDP growth remained steady at approximately 3.4%, supported by stable consumer demand, improving supply chain conditions and continued investment in technology and digital infrastructure. Global consumer price inflation stood at approximately 4.1% in the Current Year 2025 and is expected to increase marginally to around 4.4% at the end of Financial Year 2026, reflecting the lagged impact of monetary tightening by major central banks and ongoing supply-side pressures.

Inflation is expected to remain moderate, with energy markets continuing to experience supply-side pressures. Overall, while stable growth provides some support to demand, geopolitical risks and policy uncertainty are likely to weigh on global momentum, resulting in cautious business sentiment and uneven growth across regions.

2. Indian Economy and Outlook:

India has reinforced its position as one of the fastest-growing major economies, with GDP growth of 7.7% in Financial Year 2025 26, compared with 7.1% in Financial Year 2024 25. This momentum is supported by steady rural demand and a gradual recovery in industrial activity. Government-led initiatives, including the Production Linked Incentive (PLI) schemes, have provided impetus to the manufacturing sector, while services continue to register robust growth. Sustained public investment in infrastructure has further underpinned overall economic expansion.

India is expected to remain the fastest-growing major economy over the near term. Growth is likely to be supported by continued government capital expenditure and a recovery in private consumption. Private Final Consumption Expenditure is projected to grow at approximately 7.0% in Financial Year 2025 26, reflecting improving consumer demand.

3. Industry structure and development:

The furniture and home furnishing industry in India is undergoing a significant transformation, evolving from a largely unorganized and fragmented sector into a more structured and competitive market. Traditionally dominated by local artisans and small-scale manufacturers, the industry is now seeing increased participation from organized players, both domestic and international. Factors such as urbanization, rising disposable incomes, lifestyle changes, and a growing preference for branded, modular, and ready-to-assemble furniture are driving formalization and innovation in the sector.

E-commerce and Omni channel retail have further reshaped the buying experience, offering greater product variety and convenience to consumers. Additionally, there is a growing demand for sustainable and space-saving solutions, leading to increased investment in design, materials, and manufacturing technology. With continued emphasis on quality, customization, and customer experience, the industry is poised for long-term growth and structural maturity.

4. Opportunities and Threats:

5. Segment wise or product-wise performance:

The Company is operating in only one segment i.e. House hold furnishings. Therefore, there is no requirement of Segment wise reporting.

6. Future Outlook:

The Indian household furnishings industry is expected to maintain a positive growth trajectory, supported by rising disposable incomes, increasing urbanization, changing consumer preferences and greater emphasis on home aesthetics, comfort and functionality. Growing awareness of quality, design and sustainable products is expected to create further opportunities for organized players in the household furnishings segment.

Going forward, the Company intends to strengthen its market position by expanding its product portfolio, introducing innovative and contemporary designs, improving product quality and enhancing customer experience. The Company will continue to focus on developing products that address changing consumer needs while maintaining an appropriate balance between quality and affordability.

7. Risks and concerns:

The Company operates in the household furnishings industry and is exposed to various business and operational risks, including fluctuations in the prices of raw materials such as wood, fabric, foam, metal and other inputs, changing consumer preferences, intense competition from organized players, local manufacturers and online platforms, and changes in economic conditions and consumer spending. The Company may also face risks relating to supply-chain disruptions, transportation delays, inventory management, product quality, customer satisfaction, cybersecurity, data protection and compliance with applicable laws and regulations. Inflationary pressures and fluctuations in input costs may affect operating margins, while rapid changes in designs, trends and customer expectations may require continuous product innovation. The Company seeks to mitigate these risks through prudent cost and inventory management, maintaining strong supplier relationships, monitoring market trends, ensuring product quality, strengthening operational efficiency and complying with applicable statutory and regulatory requirements. Management continuously reviews the risk environment and takes appropriate measures to minimize the potential impact of identified risks on the Companys operations and financial performance.

8. Internal control systems and their adequacy:

The Company has established adequate internal control systems and procedures commensurate with the size and nature of its business. These controls are designed to safeguard the Companys assets, prevent and detect errors and irregularities, ensure accuracy and reliability of accounting records, and support compliance with applicable laws and regulations. The internal control framework includes appropriate controls over procurement, inventory, sales, receivables, payments, financial reporting and authorization of business transactions. The management periodically reviews the effectiveness of these controls and takes corrective measures wherever required. The Company believes that its existing internal control systems are adequate and effective for the Companys present scale of operations and provide reasonable assurance regarding the protection of assets, reliability of financial information and efficient conduct of business.

9. 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 report of Board of Directors of the Company.

10. Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector specific financial ratios. In this regard, the Company has significant changes in key sector specific financial ratios is described in the Financial Statement of this Annual Report.

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

The cordial employer-employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

12. 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.