Mayur Uniquoters Ltd Management Discussions

Management Discussion and Analysis Report, popularly known as MDAR, is the communication straight from the management to their valued shareholders giving them insights into the present business conditions of the Company and its future potential. It gives a birds eye view about the Companys objective, predictions and forwardlooking statements. This report is an integral part of the Boards Report. Aspects on industry structure and developments, opportunities and threats, outlook, risks, internal control systems and their adequacy, material developments in human resources and industrial relations have been covered in this Report.

Companys financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, as per the provisions of the Companies Act, 2013 ("the Act") and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, and relevant amendments Rules issued thereafter.

Our Vision is to be preferred supplier to automotive, footwear and leather goods to the leading OEMs in the World. Our values and guiding principle have been woven around seven major aspects which are evidently visible in all the activities performed by the Company i.e. Customer Satisfaction, Innovation, Quality Product and Service, Employee Growth, Culture, Being Sensitive towards Society and Environment Protection. This guiding principle is now the culture of the organization and ensures that both internal and external customers are satisfied.

GLOBAL ECONOMIC OVERVIEW

Global growth remained resilient at 3.4 per cent in 2025 (3.3 per cent in 2024) , amidst several headwinds such as prolonged geopolitical tensions, trade-related uncertainty and higher debt levels which were counterbalanced by tailwinds like fiscal and monetary support, accommodative financial conditions and surging investment in technology. Global inflation eased to 4.1 per cent in 2025 from 5.8 per cent in the previous year, reflecting the impact of softening energy prices, normalisation of supply chain constraints, even as core and services inflation remained sticky. The disinflationary process, however, remained uneven across countries with relative stickiness in services inflation in major advanced economies.

Global equity markets remained resilient, supported by AI-related technology stocks. However, concerns about tariff uncertainty, stretched valuations, potential spillovers on other software services, and escalating geopolitical tensions generated episodes of turbulence. The US dollar depreciated during April 2025 - February 2026 but strengthened on safe-haven demand after the outbreak of the West Asia conflict. Sovereign bond yields remained elevated amid fiscal concerns, with the conflict adding further upward pressure.

Source: Reserve Bank of India (RBI)

The global economy in financial year 2025-26 navigated a challenging environment characterized by geopolitical tensions, evolving trade policies, and persistent economic uncertainty. While the global economy demonstrated resilience during the year, growth momentum moderated amid heightened geopolitical risks and disruptions to international trade and investment flows. Global growth is projected to be 3.0 percent in 2026 and 3.4 percent in 2027, down from the average of 3.5 percent observed in 2024-25 and broadly unchanged on a cumulative basis compared with the forecasts in the April 2026 World Economic Outlook (WEO). The modest slowdown reflects the effects of the war in the Middle East being partly offset by accelerated demand-driven momentum in the global technology cycle thanks to advances in artificial intelligence (AI) and its adoption. The impact varies widely based on countries exposure to the war and position in the technology value chain. Energy exporters outside the conflict zone benefit from favourable terms of trade, whereas economies plugged into the technology-led upturn experience stronger activity even if they are energy importers.

Global economic activity and the outlook are being shaped by two major forces, pushing in opposite directions with asymmetric effects across countries. First is the negative supply shock induced by the war in the Middle East. Second is the ongoing positive technology shock manifesting in accelerated momentum of the global technology cycle, in no small part driven by advances in and deployment of artificial intelligence (AI) tools.

The global economy as a whole has, so far, weathered the shock from the war better than feared. Movements in and repercussions from the main channels of transmission commodity prices, inflation expectations, and financial conditions have been relatively limited. However, transmission is still in the early stages commercial and strategic destocking have provided temporary relief from reduced energy flows, whereas forward-looking indicators such as supply chain pressure and manufacturing purchasing managers indices point to softer momentum ahead and some countries are experiencing more strain than others.

In emerging market and developing economies, growth is projected to slow to 3.8 percent in 2026 before recovering to 4.5 percent in 2027. The revisions are heterogeneous, reflecting differences in commodity dependence, geographic exposure, remittances and tourism receipts, sensitivity to financial conditions, and position in the global technology value chain. India remains among the fastest growing major economies, with growth projected at 6.4 percent, supported by strong momentum in private consumption and services activity.

Source: World Economic Outlook, IMF

DOMESTIC ECONOMY OVERVIEW

India has continued to outperform amid a volatile global environment and remains the worlds fastest-growing major economy. Against the backdrop of a steady global growth amidst multiple headwinds, Indias GDP growth is estimated at 7.6 per cent for 2025- 26, up from 7.1 per cent in the previous year. On the demand side, private final consumption expenditure and fixed investment served as the key growth drivers. Although the imposition of US tariffs initially triggered concerns, their overall impact remained muted, with net exports exerting a modest drag of 0.1 percentage points on growth. On the supply side, a buoyant services sector and a robust manufacturing performance helped offset subdued agricultural activity.

Indias economic activity exhibited marked resilience in 2025-26, driven by a steady momentum in private consumption, uptick in fixed investment, strong performance of manufacturing activity and upbeat performance in services.

With the growth-inflation outlook remaining delicately poised amid heightened geopolitical risks, the MPC in its April 2026 meeting unanimously decided to keep the policy repo rate unchanged at 5.25 per cent, while remaining vigilant and closely monitoring incoming information and assessing the balance of risks.

The RBIs Monetary Policy Committee maintained the repo rate at 5.25% with a neutral stance, balancing resilient domestic GDP growth (6.7%) against supply-led inflation risks from geopolitical tensions and monsoon uncertainties.

Industrial sector posted strong growth in 2025-26, driven by a robust manufacturing sector. The growth was facilitated by steady industrial credit growth and broad sectoral policies like the production linked incentive (PLI) scheme and the National Manufacturing Mission. Manufacturing sector experienced broad-based expansion, with the key sectors like basic metals, motor vehicles, and other transport equipment registering strong growth.

Source: Reserve Bank of India (RBI) Monetary Annual Report

INDUSTRIAL STRUCTURE AND DEVELOPMENTS

Synthetic leathers are widely used for automotive interiors, hospitality seating, healthcare equipment, and consumer goods manufacturing. They are cost-effective, consistent, easy to clean, and do not need to be conditioned. They are also more eco-friendly and safer compared to natural leathers

The global synthetic leather market size is estimated at USD 49.10 billion in 2025 and is projected to reach around USD 103.91 billion by 2035, growing at a CAGR of approximately 7.78 percent between 2026 and 2035.

The synthetic leather market is experiencing strong growth due to rising demand from automotive, footwear, furniture, and fashion industries. Moreover, increasing consumer preference for animal-free products, sustainability trends, and innovations in high-performance and eco-friendly synthetic leather materials drive market growth.

The market is expanding globally as industries seek cost- effective, durable, and versatile alternatives to natural leather. Emerging regions such as Asia-Pacific, Latin America, and the Middle East & Africa offer significant opportunities due to rapid urbanization, growing middle- class populations, and increasing adoption of synthetic leather in automotive, footwear, and furniture sectors.

Europe is expected to show lucrative growth in the synthetic leather market during the forecast period. Due to growing awareness, the use of synthetic leather is increasing in Europe. At the same time, various alternatives for the development of synthetic leather are also being developed with the use of advanced technologies. This, in turn, increases the number of collaborations between various companies. Thus, with the use of these alternative materials, the automotive as well as the fashion industries are shifting towards the use of synthetic leather. This is further supported by the government as well. Thus, this results in enhancing the market growth.

Synthetic Leather Market Key Takeaways

• Asia Pacific held a market share of around 43 percent in 2025 and remains the largest regional market.

• By product, the polyurethane (PU) synthetic leather segment holds the largest market share, at over 53 percent.

• By application, the footwear segment continues to capture the largest revenue share, at over 31 percent.

• The automotive segment is expected to grow at the fastest CAGR of 13.2% over the forecast period. The demand is being supported by the rapid expansion of electric vehicles and premium interior customization programs

The synthetic leather market is witnessing a high degree of material and process innovation, particularly in water- based PU systems, solvent-free coatings, microfiber structures, and bio-based feedstocks. Automotive and premium footwear applications are driving development of low-VOC and Odor-controlled materials that comply with strict cabin air quality standards. Manufacturers are also integrating recycled polyester backings and renewable carbon inputs to improve sustainability positioning. Meanwhile, innovation is shifting toward plastic-reduced leather alternatives using cellulose, agricultural waste, bacterial fermentation, and hybrid biomaterials for next- generation applications

The footwear sector is one of the largest consumers of synthetic leather, accounting for a substantial share of global demand. Brands are increasingly opting for synthetic materials due to their versatility, durability, and ability to mimic natural leather at a lower cost. As global footwear production continues to rise, particularly in emerging economies including China, India, Vietnam, and Indonesia, manufacturers are turning to synthetic leather as a cost-efficient and scalable material that meets both aesthetic and functional requirements.

The shift in consumer preferences toward affordable, lightweight, and stylish footwear is also fueling the demand for synthetic leather. Athletic and casual shoe segments, dominated by brands such as Nike, Adidas, and Puma, extensively use synthetic materials for uppers, linings, and insoles. These companies prioritize materials that allow greater customization, faster production cycles, and better performance under various weather conditions- all of which are attributes associated with advanced synthetic leather.

BUSINESS OUTLOOK

The Asia Pacific synthetic leather market size is estimated at USD 21.07 billion in 2025 and is projected to reach around USD 45.93 billion by 2035, growing at a CAGR of approximately 8.1 percent from 2026 to 2035. Asia Pacific continues to hold the largest regional value share, at over 43 percent, with India, China and South Korea being the principal growth drivers on account of rising disposable income and population.

Mayur has the largest capacity for manufacturing of synthetic leather in domestic organized segment with capacity of annual production of 48.60 Million linear meters of PVC coated fabric and 5.00 Million Linear meter of PU coated fabric. MUL manufactures more than 400 variants of artificial leather from PVC polymer which finds application in footwear (shoes/sandals insole and uppers), automotive (seat upholstery and inner linings), furniture & fashion items (apparel) and leather goods.

Mayur, has a diversified clientele across various industries and caters to the synthetic leather requirements of reputed players like BMW, Mercedes Benz, Chrysler, Ford, Hyundai, MG, KIA, Maruti Suzuki, Tata, Toyota, Mahindra & Mahindra, ISUZU, Suzuki, Honda, Renualt, Skoda/Volkswagen, Stellantis, Hero, Bajaj, Royal Enfield, TVS, Piaggio, Sonalika Tractor, Lear, TS Tech Sun, Bharat Seat, Krishna Maruti, Sharda Motors, S.I. Interpact Group, Swaraj Auto, Polor Auto etc. among automotives and Bata, Paragon, Lancer, Action, Relaxo, VKC Group etc. among footwear segment

Mayur is also exporting to automotive OEM i.e. Mercedes Benz and BMW in the South African market. Mayur has a subsidiary company named Mayur Uniquoters SA (Pty) Ltd in South Africa, which is to facilitating exports to Mercedes Benz and BMW.

We have also into the retail furnishing business under the brand name "TEXTURE AND HUES" to serve our retail customer through our wholly owned subsidiary company Mayur Tecfab Private Limited and we are getting good response in the retail business from the our dealers.

OPPORTUNITIES AND THREATS

Growing international demand for artificial leather contributes notably to the expansion of the India Artificial Leather Market Industry. India is strategically positioned to become a leading export hub for artificial leather products, especially in markets in Europe and North America.

The rising demand for animal-free and sustainable products is a major driver of the Global Synthetic Leather Market. This is because synthetic leather is seen as a viable alternative to traditional leather and is increasingly being used in various industries, including fashion, automotive, and furniture.

OPPORTUNITIES

• Development of new types of high-quality PU coated fabric

• Product diversification

• Growing demand from the footwear and automotive industry, including accelerating electric-vehicle adoption

• Strong and eco-sustainable product proposition

• Export opportunities to neighbouring and Western markets

• Modernised manufacturing units

• Optimising production cost

• Trained/skilled manpower at competitive wage levels

• Being a Cheaper alternative to natural leather with good aesthetic quality, demand to continue to remain strong Presence in global market

THREATS

• Unfavourable foreign exchange rate fluctuations

• Lack of poor policies for the specific development of the sector

• Some raw material not available locally, increasing cost and affecting competitiveness

• Non-biodegradability of synthetic leather

• Irregular supply of raw material

• Increase in competition

• Increase in logistics cost

SEGMENT-WISE PERFORMANCE

The Company deals only in one segment, i.e. manufacturing and sale of PU/PVC Synthetic Leather; accordingly, there is only a single reportable segment.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The overview of financial performance with respect to operational performance of the Company can be obtained from the various following ratio analysis.

The overview of financial performance with respect to operational performance of the Company can be obtained from the various following ratio analysis.

• Debtor Turnover Ratio is 3.14 times

• Inventory Turnover Ratio is 3.20 times

• Interest Coverage Ratio is 247.30 times

• Current Ratio is 7.71 times

• Debt to Equity Ratio is 0.01 times

• Operating Profit Margin Ratio is 29.08 percentage

• Net Profit Margin Ratio is 21.55 percentage

RISKS AND CONCERNS

The risks and opportunities inherent to all corporations are inseparable elements. The Directors and management of the Company make constructive decisions to protect the interests of stakeholders. The Company has implemented a Risk Management Policy, which is continuously monitored and reviewed under the guidance of the Audit and Risk Management Committee. This Committee convenes periodically to identify processes exposed to risks, determine risk mitigation strategies, and oversee their implementation.

The Company recognises that emerging and identified risks need to be managed and mitigated to:

• Protect its shareholders and other stakeholders interest,

• Achieve its business objectives, and

• Enable sustainable growth.

The Company continuously and carefully monitoring the risks and concerns relating to the business, including macro-economic factors, foreign exchange fluctuation, geographical concentration, changes in government policy and legislation, increases in raw material prices etc. The Company has also taken several insurance policies to mitigate other risks and concerns of the Company.

RESEARCH AND DEVELOPMENT (R&D)

Research and Development activities have played a pivotal role in differentiating the overall attributes of synthetic leather from traditional leather. In this direction, your Company has increased its R&D efforts in scope and scale for comprehensive and integrated research works in the identified thrust areas.

Our R&D work towards the development of synthetic leather with various new textures, colors, patterns, and functionalities to develop synthetic leather with superior properties. We continuously strive towards in-house product development /innovation and sustainable synthetic leather in tune with evolving industry trends.

With experienced and qualified human resources our R&D capabilities are the driving forces of our current momentum and future growth of the organization. With innovation instilled into culture of the company at various levels, R&D is a crucial attribute in fostering our vision to become a global leader in the synthetic leather Industry.

The Company is providing new products from time to time which helps in expanding the business to new dimensions. Customer from OEMs, automobile, footwear, furniture and upholstery, leather goods, sports equipment and fashion industry have varied requirements which are all successfully fulfilled in our prototype laboratories. To mention their achievements, the R&D wing delivers a good number of samples on every working day.

Strategically, Mayur is well placed to create PVC/PU leather products for every part of interior trim applications meeting worldwide standards. We are augmenting our research capabilities and expanding our product portfolio to address the prospective demand across global markets.

Further to meet out the requirements of the customers in the new era as per the international standards and advance technology, we are planning for setting up a new world-class R&D Centre which will focus on developing, demonstrating, innovative and environment friendly, customer centric products and process technologies for developing new and critical product in the artificial synthetic leather industry.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

To ensure effective internal controls across business processes and systems, the Company has established a robust framework designed to provide reliable and quality assurance related to the Companys financial and operational information, so that it can comply with applicable laws and safeguard its assets. The framework comprises both entity-level controls and business process controls., The adequacy and efficacy of these controls are evaluated on a regular basis:

To facilitate the same, the following measures have been continued:

• Internal control systems are evaluated against operating systems and policies of the Company across all locations.

• The Company has in place robust data security management.

• The Company is employing data analytics in the internal audit.

• All operations are executed through Standard Operating Procedures (SOPs) in all functional activities, and these are updated and validated periodically as per the business need.

Commensurate with the size and nature of its operations, the Company has adequate systems of internal control comprising authorisation levels, supervision, checks and balances and documented guidelines, providing that all transactions are authorised, recorded and reported correctly and that compliance with policies and statutes is ensured.

The Company has an independent internal audit system to monitor the entire operations and services. The top management and Audit Committee of the Board review the findings of the Internal Auditor and takes remedial actions accordingly.

The division also assesses opportunities for improvement in business processes, systems & controls and it provides the recommendations for design to add value to the organization and it also follows up on the implementation of corrective actions and improvements in business processes after review by the audit committee and senior management.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATION

The Company always believes that its growth is closely linked with the growth and overall development of its employees. The Company is committed to upgrade the skill of its employees and to create an environment where excellence is recognized and rewarded. The target is to place right people at right position and to enhance the efficiency, working speed, competency and time management skill of its employees. The Companys endeavour is to create an environment where people can use all of their capabilities in promoting the business of the Company. The number of people employed, as of March 31, 2026 are 465.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, objectives, strategies, projections and estimates are forward-looking and progressive within the meaning of all applicable laws and regulations. Actual results may vary depending upon various economic aspects, such as government policies, rules and regulations, economic conditions and other incidental factors. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in principal markets, changes in government regulations, tax regimes, economic developments within India and outside the countries in which the Company conducts business, and other incidental factors. Management will not be in any way responsible for actions taken based on such statements.