Rajnish Wellness Ltd Management Discussions

1. Industry Overview

The wellness and healthcare industry continues to present significant opportunities, driven by increasing consumer awareness, changing lifestyles, preventive healthcare practices and growing demand for wellness-oriented products and services. At the same time, the sector remains competitive and is influenced by consumer preferences, pricing pressures, regulatory requirements and the increasing adoption of digital and e-commerce channels.

Against this backdrop, Rajnish Wellness Limited continued to focus on its business operations while seeking opportunities to strengthen revenue generation, improve operational efficiency and build a sustainable platform for future growth.

2. Business Performance

During FY2025-2026, the Company recorded Revenue from Operations of 14,175.23 lakh, equivalent to approximately 141.75 crore. Other income stood at 82.39 lakh, resulting in Total Income of 14,257.62 lakh, or approximately 142.58 crore.

The Company continued to operate in a challenging and competitive business environment. While the scale of operations remained significant, profitability was affected by the Companys overall cost structure, particularly purchases of stock-in-trade and other operating expenses.

Managements focus remains on improving the quality and sustainability of revenues, optimizing costs and strengthening operating efficiencies.

3. Financial Performance

The Companys financial performance for FY2025-2026 is summarized below:

Particulars	FY2025-2026 ( lakh)
Revenue from Operations	14,175.23
Other Income	82.39
Total Income	14,257.62
Purchases of Stock-in-Trade	14,116.93
Changes in Inventories of Movies & Theatrical Rights	(327.97)
Employee Benefits Expense	172.18
Finance Costs	0.46
Depreciation & Amortization	1.95
Other Expenses	1,135.46

The Company reported a loss before tax of 841.38 lakh, compared with total income of 14,257.62 lakh. After recognition of a deferred tax credit of 212.66 lakh, the loss for the period stood at 628.72 lakh, equivalent to approximately 6.29 crore.

The loss during the year indicates continued pressure on operating profitability. Management recognizes the need to improve margins and strengthen the relationship between revenue growth and profitability.

4. Analysis of Major Cost Components

Purchases of Stock-in-Trade:

Purchases of stock-in-trade amounted to 14,116.93 lakh, representing the largest component of the Companys expenditure. The relatively high level of procurement costs places considerable pressure on gross margins. Management will continue to evaluate procurement efficiency, product mix, pricing and supplier relationships with a view to improving contribution margins.

Changes in Inventories:

The Company recorded a negative inventory adjustment of 327.97 lakh in respect of movies and theatrical rights. The movement in inventory reflects the accounting impact of changes in the carrying value and utilization of such rights during the year. Effective management of inventory and rights-related assets remains important for improving working-capital efficiency.

Employee Benefits Expense:

Employee benefits expense stood at 172.18 lakh. The Company continues to focus on maintaining an efficient organizational structure while ensuring that the business has the appropriate capabilities to support its operations and future growth.

Other Expenses:

Other expenses amounted to 1,135.46 lakh, making it another significant component of the Companys overall cost structure. Management will continue to review these expenses and identify opportunities for rationalization and improved operating efficiency.

Finance Costs:

Finance costs were limited to 0.46 lakh, indicating that interest costs did not constitute a significant contributor to the Companys loss during the year.

Depreciation and Amortization:

Depreciation and amortization expense amounted to 1.95 lakh, representing a relatively small component of total expenditure.

5. Profitability

The Company reported a loss before tax of 8.41 crore during FY2025-2026. The principal challenge remains the Companys ability to generate sufficient operating contribution after meeting procurement and other operating expenses.

The deferred tax credit of 2.13 crore partially reduced the reported loss, resulting in a net loss of 6.29 crore for the year.

Managements priority is therefore to improve underlying operating profitability rather than relying on non-operating or tax-related items to improve the reported bottom line.

6. Operational Focus

During the year, management continued to focus on maintaining business operations and identifying opportunities for improvement in revenue generation and operational efficiency.

a) Going forward, the Company intends to focus on:

b) Improving gross and operating margins.

c) Optimizing procurement and inventory management.

d) Reviewing the product and business mix.

e) Controlling discretionary and administrative expenditure.

f) Improving working-capital efficiency.

g) Strengthening customer acquisition and retention.

h) Expanding appropriate digital and online channels.

i) Pursuing sustainable and profitable revenue growth.

7. Outlook

Management believes that the long-term outlook for the wellness and healthcare sector remains encouraging due to increasing health consciousness, preventive healthcare awareness and evolving consumer lifestyles.

However, the Company recognizes that industry growth alone does not guarantee profitability. The Companys near-term strategy will therefore emphasize profitable growth, cost optimization, margin improvement and stronger operational execution.

Management will continue to evaluate opportunities to expand its business while maintaining appropriate financial discipline.

8. Risks and Challenges

The Company remains exposed to several risks inherent to its business and the broader wellness and healthcare sector.

Key risks include:

Competitive pressure: Increasing competition may affect pricing and margins.

Procurement costs: Changes in product and input costs may adversely affect profitability.

Inventory risk: Inefficient inventory management may result in working-capital pressures or losses.

Consumer preferences: Rapid changes in consumer behavior require continuous adaptation.

Regulatory environment: Changes in applicable laws and regulations may affect business operations.

Market risk: Broader economic conditions and changes in consumer spending may influence demand.

Reputation risk: Product quality and customer satisfaction are important to maintaining consumer confidence.

Management continues to monitor these risks and intends to strengthen appropriate operational and financial controls.

9. Internal Control and Risk Management

The Company maintains internal control systems intended to safeguard its assets, support accurate financial reporting and promote operational efficiency.

Management periodically reviews business processes and financial controls to identify areas for improvement. The Company remains committed to strengthening its control environment in line with the scale and complexity of its operations.

10. Human Resources

Human resources continue to be an important component of the Companys operations. Management recognizes the importance of maintaining an efficient, accountable and customer-focused workforce.

The Company will continue to focus on employee development, appropriate manpower deployment and creating an environment that supports responsible execution of its business objectives.

11. Future Strategy

The Companys strategy for the coming financial year is focused on strengthening the fundamentals of the business. Management intends to prioritize:

a) Revenue quality improving the profitability and sustainability of revenue streams.

b) Margin enhancement improving procurement, pricing and product mix.

c) Cost optimization reviewing operating and administrative expenses.

d) Working-capital discipline improving inventory and receivables management.

e) Digital expansion leveraging digital channels where commercially viable.

f) Customer engagement improving customer experience and retention.

g) Operational efficiency creating a leaner and more scalable operating structure.

12. Managements Overall Assessment

FY2025-2026 was a challenging year for the Company from a profitability perspective. The Company generated total income of 142.58 crore, demonstrating a substantial operating scale; however, the Company incurred a loss before tax of 8.41 crore and a net loss of 6.29 crore.

The financial results highlight the need for greater focus on operating margins, procurement efficiency, expense management and profitable revenue generation.

Management remains committed to improving the Companys operational and financial performance. The focus going forward will be on strengthening the underlying business, improving cost efficiency, optimizing the business mix and pursuing sustainable growth.

The Company believes that disciplined execution and continued focus on operational efficiency will be critical to improving profitability and creating long-term value for its stakeholders.

Cautionary Statement

Statements in the Management Discussion & Analysis, describing the Companys objectives, projections and estimates are forward looking statement and progressive within the meaning of applicable laws & regulations. Actual result may vary from those expressed or implied. Important developments that could affect the Companys operations are significant changes in political and economic environment in India, tax laws, exchange rate fluctuation and related factors.

The Board, on the recommendations of the Nomination and Remuneration Committee, considers the appointment and re-appointment of Directors.

Section 149 of the Companies Act, 2013, provides that an Independent Director shall hold office for a term of up to five consecutive years on the Board of a Company and shall be eligible for re-appointment on passing of a special resolution by the shareholders of the Company. However, the Independent Directors shall not retire by rotation.

Section 152 of the Companies Act, 2013, states that one-third of the Board members other than Independent Directors who are subject to retire by rotation, shall retire every year and shall be eligible for re-appointment, if approved by the shareholders at the Annual General meeting.

In view of the above, Mr. Rajnishkumar Singh (DIN: 07192704), Executive and Non- Independent Director of the Company, retires by rotation at the forthcoming Annual General Meeting, and being eligible seeks re-appointment.

b) Attendance of each director at the meeting of the board of directors and the last Annual General Meeting:

Name of Director	Category of Directorship	No. of Board Meeting Attended	Attendance at AGM
Mr. Rajnishkumar S. Singh	Executive Chairperson, Managing Director	7	Yes
Mrs. Monam Kapoor	Non-Executive Independent Director	7	Yes
Mrs. Preeti Garg	Non-Executive Independent Director	7	Yes
Mrs. Swati Jain	Non-Executive - Independent Director	7	Yes
Mrs. Saloni Mehra	Non-Executive - Non-Independent Director	7	Yes