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 forward looking 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 are 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

The global economy in financial year 2024–25 has seen a mix of cautious optimism and a continued uncertainty. Encouragingly, inflation has shown signs of moderation across major economies, offering some relief after years of elevated price pressures. This easing trend, supported by more stable commodity prices and improved supply chain dynamics, has allowed central banks, especially in advanced economies, to hold firm on tight monetary policies without further aggressive rate hikes. While interest rate cuts have been limited, the more predictable inflation path has helped stabilize financial markets and laid the foundation for a gradual economic recovery.

However, this progress has been overshadowed by renewed geopolitical and trade tensions, particularly between the United States and China.

A year marked by significant global elections, the immediate impact of which is evident, while long term effects remain to be seen, added another layer complexity. Monetary policy, particularly interest rate adjustments in major economies, remained a central focus. Emerging markets exhibited diverse performance, influenced by commodity markets and debt vulnerabilities. Trade tensions and supply chain disruptions continued to strain global commerce and investment, while geopolitical volatility persisted. Concurrently, technological advancements, especially in AI and renewable energy, presented both, significant opportunities for productivity gains and challenges related to workforce adaptation. This confluence of factors created a dynamic and uncertain economic landscape for businesses and policymakers worldwide.

The U.S.-led multiple waves of tariffs against trading partners have caused major policy shifts, resetting the global trade system and giving rise to uncertainty. This has overshadowed the positive developments that the world has achieved during the post-pandemic revival in the last two years. As per World Economic Outlook, IMF the, effective tariff rates at levels not seen in a century and a highly unpredictable environment. Global headline inflation is expected to decline at a slightly slower pace in April 2025 than what was expected in January 2025. Heightened uncertainty has affected the consumer sentiment, discouraging them from making bigticket expenditures. Business sentiment is also damaged. On top of that, inflation in the U.S. could rise again as US President Trumps policies on trade, deportation, and tax are inflationary.

The newly emerged situation has triggered a downward revision of global growth prospects by the forecasting agencies. The International Monetary Fund (IMF) in its World Economic Outlook ("WEO") on 22 April has dropped global GDP projection from 3.3% in 2024 to 2.8% for 2025 and 3% in 2026, down from 3.3% for both years in its January 2025 WEO Update.

Source: World Economic Outlook April 2025, IMF

DOMESTIC ECONOMY OVERVIEW

India has continued to showcase remarkable economic resilience despite a highly volatile and challenging global environment. In the face of ongoing global trade tensions, geopolitical uncertainties, and policy unpredictability, India has maintained its position as one of the worlds fastest-growing major economies. The performance of Indias economic in FY 2024-25 has been characterised by a combination of strong growth drivers and emerging challenges. Following a splendid 9.2% GDP growth in FY 2023-24, the Indian economy is estimated to grow by 6.5% in FY 2024-25 (per the Second Advance Estimate). The Reserve Bank of India (RBI) has also played a critical role in sustaining this momentum through its proactive monetary policy measures. The RBI has implemented a cumulative repo rate cut of 100 bps since February 2025 lowering it from 6.5% to 5.5%. The lower repo rate is expected to gradually reduce borrowing costs for businesses and consumers, thereby enhancing credit availability. Increased access to affordable credit is essential for sustaining consumption, encouraging investment, and supporting overall economic activity. This accommodative stance demonstrates the RBIs commitment to balancing inflation control with growth promotion. Additionally, the RBI has also addressed the system-wide liquidity availability through a host of measures easing the overall financial conditions. Indias macroeconomic stability is further reinforced by prudent fiscal management. The governments efforts to maintain fiscal discipline while investing in key sectors have strengthened the economys fundamentals. Structural reforms in areas such as labour laws, taxation, and financial regulations continue to improve the business environment, attracting both domestic and foreign investment. Indias continued focus on enhancing manufacturing capacity, expanding exports, and driving infrastructure will be the key pillars of Indias journey towards its economy. The Make-in-India programme and Production Linked Incentives (PLI) scheme stands out as the pivotal drivers of domestic manufacturing. These efforts are designed to boost local production, attract foreign investment, and create a competitive edge in creating millions of jobs and improving Indias global supply chain.

Source: NSO

INDUSTRIAL STRUCTURE AND DEVELOPMENTS

The global synthetic leather market size is calculated at USD 49.10 billion in 2025 and is forecasted to reach around USD 97.29 billion by 2034, accelerating at a CAGR of 7.9% from 2025 to 2034. Globally increasing demand from the footwear sector is expected to be a key factor propelling the overall market growth. The new research study consists of industry trends, detailed market analysis, patent analysis, value chain analysis, SWOT analysis, and market forecast and opportunity analysis. The growth in the market size over the next decade is likely to be the result of the anticipated surge in demand for vegan and sustainable materials.

North America is expected to grow significantly in the synthetic leather market during the period. North America is experiencing a rise in the demand for the use of eco-friendly products. At the same time, the industries are also using advanced technologies for the development of cruelty-free products. Furthermore, their use in the development of shoes, bags, etc is growing, which in turn contributes to the same. Thus, all these factors enhance the market growth.

The high cost of natural leather is another factor that has driven the need for natural leather replacements. PVC leather is another essential type of synthetic leather that has grown in popularity due to its diverse variety of uses, which include shopping bags, cosmetic bags, wallets, suitcases, purses, and travel bags. It is used in various applications, including fabrics, footwear, clothing, upholstery, and others, where a leather-like finish is required, and the material is unusable, unsuitable, and cost-prohibitive. The production process has evolved over the past few years for the shell coating to go on top of the synthetic polymer blend.

Synthetic Leather Market Key Takeaways

• Asia Pacific held market share of 43% in 2024.

• By product, the polyurethane (PU) synthetic leather segment registered a maximum market share of 53% in 2024.

• By application, the footwear segment is expected to capture the biggest revenue share of 31% in 2024.

• By application, the automotive industry is expected to grow at the fastest CAGR of 20.15% from 2025 to 2033 in terms of revenue.

The footwear segment led the market and accounted for 29.11% of the global revenue in 2024. Synthetic leather is widely used to manufacture shoe uppers, shoe lining, and soles for sports shoes, formal shoes, flip flops, soccer shoes, sandals, slippers, and boots. These shoes are also cost-effective, environmentally friendly, and long-lasting. Synthetic leather shoes possess higher water resistance than genuine leather shoes, which can get stained due to exposure to certain elements. Faux leather shoes are durable enough to be used for a more extended period when walking or running.

The synthetic leather market is expected to grow significantly over the forecast period owing to the rising demand for synthetic leather in footwear and automotive applications. Synthetic leathers are blends of polyurethane and polyvinyl chloride. At present, several market players are also engaged in the introduction of bio based materials for leather. Increasing demand for synthetic leather in the footwear industry owing to cheaper prices is expected to fuel the market growth over the forecast period.

Synthetic leather has been replacing genuine leather at a steady rate. The market is expected to gain considerable market share in the footwear segment in the coming years on account of rising usage of artificial leather grades in boots, sneakers, womens sandals, and mens formal shoes. Moreover, increasing per capita disposable income is expected to boost the demand for synthetic leather in various application segments.

Increasing market penetration of synthetic leather materials in automotive interior applications is expected to be a critical factor for growth. Car manufacturers are adopting synthetic leather materials owing to their high durability, wear resistance, and cost-effective production. Passenger vehicles targeted primarily at the middle income class consumer group are the major end user of faux leather in automotive segment. Faux leather is affordable and easier to maintain as compared to real leather, which aids in attracting a large number of consumers. Utilization of artificial leather reduces the overall cost of the vehicle, thereby assisting manufacturers in achieving stable economies of scale.

Increasing demand of footwear expected to be a major factor that propels the overall market growth for synthetic leather. Synthetic leather is a suitable alternative as it comprises of a cloth base that is coated with synthetic resins. Thus, synthetic leather completely serves the purpose of real leather by offering a leather-like finish, thereby anticipated to augment its demand across wide application area that includes footwear, fabrics, upholstery, clothing, and others. The production process of synthetic leather has evolved over the past few years to curb down the rate of hunting and protect the animal life.

The global demand for leather materials has seen a paradigm shift owing to its increasing application across automotive, furnishing, bags, clothing, and many others.

Manufacturers have been focusing significantly to shift their sources for raw materials towards the Asian suppliers for example India, Vietnam and China because of low cost of labour & freight along with an abundance of raw material in the region.

BUSINESS OUTLOOK

The Asia Pacific synthetic leather market size was estimated at USD 19.45 billion in 2024 and is predicted to be worth around USD 42.91 billion by 2034, at a CAGR of 8.23% from 2025 to 2034.

The Asia Pacific encountered the largest value share of more than 43% in the year 2024 and expected to maintain the same trend over the analysis period. India, China, and South Korea are the major countries that drive the growth of the market in the region. Further, increasing disposable income along with rising population across the region offers numerous opportunities for the market growth. North America and Europe witness sluggish growth owing to the maturity of the market. In addition, the ongoing trade war between China and the U.S. along with drastic decline in the cross-border trade with the spread of the coronavirus pandemic that originated in Wuhan, China, has initiated trust issues between the two countries that further expected to negatively impact market growth in the upcoming years. High climate control, superior comfort, and easy-to-style properties of synthetic leather have made them increasingly in the fashion industry. Besides this investment from leading fashion brands towards developing apparel and footwear from artificial leather coupled with increasing demand from consumers will pump up the market growth in upcoming years.

In India rapid urbanization and shifting customer preferences are driving key developments in artificial leather market. The demand for sustainable and eco-friendly materials is increasing, mirroring the global trend of lessening reliance on conventional leather. Government measures promoting the use of substitutes for animal leather contribute to this trend by pushing businesses to employ ecologically friendly production procedures. Furthermore, growing disposable income among Indian customers has resulted in an increased interest in fashion and lifestyle items manufactured of synthetic leather, notably in sectors such as footwear, bags, and upholstery. Innovations in manufacturing technologies are also opening up new business prospects. The development of high-grade synthetic materials that have the appearance and feel of genuine leather is attracting customers who want both quality and affordability. This tendency is especially noticeable among young, fashion-conscious shoppers who are increasingly looking for fashionable but more sustainable solutions. The growth of e-commerce platforms in India expands the reach of artificial leather items, making them more accessible to a larger audience. Furthermore, as firms address environmental issues, collaboration with sustainability-focused groups might open up new opportunities for growth. There is a noticeable tendency toward the construction of local production units, which not only serve domestic markets but also minimize transportation costs and carbon footprints. Overall, the mix of shifting consumer behavior, technical improvements, and supporting government legislation offers a dynamic environment for Indias artificial leather sector, with plenty of room for growth and innovation. 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 European market. Mayur has a subsidiary company named Mayur Uniquoters SA (Pty) Ltd in South Africa, which will develop logistics to facilitate 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.

OPPORTUNITIESAND 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 Export Promotion Council for Handicrafts reported an increase in exports of synthetic leather goods by approximately 15% in the last financial year, with numbers projected to rise owing to favorable trade agreements and the global emphasis on sustainable materials.This favorable export landscape provides additional impetus for manufacturers to scale their production and enhance product quality.

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

• Strong and eco-sustainable product

• Export opportunities to neighboring countries

• Modernized manufacturing units

• Optimizing production cost

• Trained / skilled manpower at competitive wage level

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

• Presence in global market

THREATS

• Unfavorable foreign exchange rate fluctuations

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

• Some raw material not available locally; it increases cost and lead tuff competitiveness

• Non-biodegradability of synthetic leather

• Irregular supply of raw material

• Increase in competition

• Increase in logistic 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.

• Debtor Turnover Ratio is 3.33 times

• Inventory Turnover Ratio is 3.15 times

• Interest Coverage Ratio is 133.24 times

• Current Ratio is 8.08 times

• Debt to Equity Ratio is 0.01 times

• Operating Profit Margin Ratio is 23.39 percentage

• Net Profit Margin Ratio is 17.19 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 Audit and Risk Management Committee. This Committee convene periodically to identify processes exposed to risks, determine risk mitigation strategies, and oversee their implementation.

The Company recognises that the emerging and identified risks need to be managed and mitigated to: Protect its shareholders and other stakeholders interest, Achieve its business objective, and Enable sustainable growth.

The Company is continuously and carefully monitoring the risks and concerns related to the business for example: macro-economic factors, foreign exchange fluctuation, geographical concentration, change in the Government policies and legislation, increase in the 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 that is 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, following measures have been initiated:

• The internal control systems are evaluated with respect to their compliance with the operating systems and policies of the Company across all locations.

• The Company has put 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 operations, the Company has adequate systems of internal control comprising authorization levels, supervision, checks and balances and procedures through documented guidelines which provide that all transactions are authorized, recorded and reported correctly and compliance with policies and statutes are 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, 2025 are 473.

CAUTIONARY STATEMENT

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

	For and on behalf of the Board of Directors of
	Mayur Uniquoters Limited
	Suresh Kumar Poddar
Place : Jaipur	(Chairman and Managing Director & CEO)
Dated : July 30, 2025	DIN: 00022395