Rexpro Enterprises Ltd Management Discussions

Global Economic Overview

The global economy showed strong resilience during the Financial Year 2024 25, despite earlier fears of a slowdown or recession. Even with challenges like high in ation, and rising interest rates across the world, global growth remained stable at around 3.2%.

In ation, which had increased sharply in the past due to supply chain disruptions and energy price shocks, is now easing. It is expected to fall from 2.8% by the end of 2024 to 2.4% by the end of 2025, bringing it closer to the targets set by central banks in many countries.

However, the pace of global economic growth is slower than in earlier years. This is due to:

Higher borrowing costs,

Reduction in government financial support,

Lingering effects of the COVID-19 pandemic and geopolitical con icts,

Slower improvements in productivity,

Increasing divisions in global trade and economic policies.

Advanced economies (like the U.S. and Europe) are seeing in ation come under control faster than emerging markets. Global average in ation is expected to fall from 6.8% in 2023 to 5.9% in 2024, and further down to 4.5% in 2025.

Among countries, the United States and several large emerging economies performed better than expected. This was mainly because consumers continued to spend more, using savings built up during the pandemic. Labor markets remained strong, supporting private consumption.

On the other hand, the Eurozone showed slower growth. Weak consumer con dence and high energy prices continued to affect household and business spending.

Looking forward, global growth is expected to remain moderate but stable, with structural reforms, technological innovation, and green investments playing a central role in shaping the post-pandemic recovery and long-term sustainability

Indian Economy

India continued to stand out as one of the fastest-growing major economies during FY 2024 25. Growth remained strong and broad-based, supported by a combination of domestic demand, government spending on infrastructure, and steady performance in the services and manufacturing sectors.

Key highlights:

Indias GDP growth is estimated to be around 6.8% 7.0%, driven by strong urban consumption and a recovery in rural demand.

In ation remained manageable, supported by timely policy actions and improved food supply, though occasional price spikes were seen in food and fuel.

The services sector, particularly IT, digital services, financial services, and tourism, continued to be a major contributor to GDP.

Manufacturing and construction showed healthy growth, driven by government-led infrastructure projects and rising private investment.

The agriculture sector remained stable, though somewhat impacted by uneven monsoons in some regions.

India also continued to attract foreign direct investment (FDI), supported by ongoing reforms and an improving ease of doing business.

Overall, India remains a key driver of global growth, with a favorable outlook for FY 2025 26, provided global risks remain contained and domestic consumption continues to expand.

Industry Overview

In line with the broader economic recovery, the retail furniture and xtures segment experienced sustained growth during FY 2024 25. The Indian furniture market, which is valued at over USD 32 billion, continued to expand steadily, with the organized retail furniture segment growing at a CAGR of 12% 15%. Rising disposable incomes, urban housing development, and changing lifestyle preferences significantly boosted demand for modern, modular, and space-saving furniture. Increased focus on home improvement and remote working led to higher demand for home officefurniture, ergonomic seating, and multifunctional designs. E-commerce played a key role, with online furniture sales contributing approximately 20% of the organized market, supported by better logistics, digital catalogues, and exible financing options.

Retailers also invested in expanding physical store networks and enhancing customer experience through digital tools like 3D visualization, AR-enabled room planners, and contactless purchase solutions. Sustainability emerged as a strong trend, with growing preference for furniture made from eco-friendly materials and sustainable wood sources. However, the sector also faced challenges such as volatility in input costs, particularly for wood, metal, and foam, and supply chain delays in certain regions. Competitive pressure from both domestic and global players required retailers to focus on product innovation, cost optimization, and omnichannel strategies.

Looking ahead, the outlook for the furniture and xtures retail segment in FY 2025 26 remains positive, driven by urbanization, rising demand for aesthetic and customized furniture solutions, and increased penetration of organized retail. With continued support from macroeconomic stability, digital adoption, and consumer-driven growth, the sector is well-positioned to build on its momentum in the coming years.

Company Overview

We are a growing and a diversi ed product manufacturing company catering to several sectors and are based out of Vasai, Maharashtra, India. We started as a one stop solution to meet the furniture and xture requirements for retailers and acquired clients across multiple retail segments such as fashion, lifestyle, electronics, grocery, beauty, telecom etc. We have made complete standalone stores, shop in shops, kiosks and displays for leading global brands and for several large Indian retailers. Further, given our multi-material manufacturing capability for customized products, we have also manufacture furniture for commercial and institutional requirements.

India has witnessed high growth in the infrastructure sector in which roads and metros are an integral part. We have entered the Infrastructure sector by manufacturing sound barriers which are installed on yovers and help to reduce noise pollution and providing a better environment to the nearby residents. Further, we have developed Platform Screen Doors to be used at Metro stations for better safety and prevention of accidents.

Given the boom of online quick retail and the logistics sector, we are manufacturing racking systems and xtures catering specially to the new age warehousing industry.

Our manufacturing facilities are equipped to manufacture products from base materials such as wood, metal, acrylic etc. Most of the processes are in house to ensure high quality finished products and to adhere to fast turnaround time in manufacturing.

We also undertake turnkey projects for end-to-end solution which includes designing, manufacturing and installing all products required and offer such services across India.

We have the following capabilities:

Opportunities and Risk along with its Mitigation

We continue to operate in a dynamic environment, where both opportunities and risks influence our business performance. The following discussion highlights the key opportunity and risks that may impact our operations, along with the measures adopted by the Company to mitigate such risks.

Opportunities

Growing demand for quality furniture for retail and warehousing solutions: With increasing urbanisation, rising disposable incomes, and the growth of quick retail, demand for modular furniture and warehouse racking solutions is expected to expand.

Government initiatives and infrastructure push: Initiatives such as new road developments and metro projects, are creating significant opportunities for the Companys products.

Shift towards organised players for furniture: Customers are increasingly preferring furniture brandso ering qualityand timely delivery, which positions the Company favourably.

Expansion into new geographies and product categories: The Company continues to explore opportunities to widen its product portfolio and reach new markets within India.

Risks and Mitigation

1. Adverse changes in government policies

Risk: Changes in taxation, regulatory norms, or industrial policies may impact operations and pro tability.

Mitigation: The Company closely monitors regulatory developments and proactively ensures compliance with applicable laws. Engagement with industry associations help anticipate and adapt to policy changes.

2. Dependence on key customers or suppliers

Risk: The loss of a major customer or supplier could adversely impact revenues or supply chain stability.

Mitigation: The Company is diversifying its customer base and developing long-term relationships with multiple suppliers to reduce dependency.

3. Competitive intensity

Risk: Increased productivity and efficiency of competitors may affect market share.

Mitigation: The Company continues to focus on cost optimisation, process improvements, and introducing new designs to maintain its competitive edge.

4. Reliance on imports and third-party suppliers for raw materials

Risk: Fluctuations in supply availability, currency movements, or global trade disruptions may affect raw material costs.

Mitigation: The Company is actively working on backward integration, strengthening domestic vendor relationships, and maintaining strategic inventory levels.

5. Technology disruptions

Risk: Failure of technology systems or inability to adopt new technologies may disrupt operations.

Mitigation: Investments in robust IT infrastructure, regular upgrades, and employee training programs are undertaken to ensure business continuity.

6. Macroeconomic and market volatility

Risk: Factors such as in ation, interest rate fluctuations, equity market turbulence, or changes in social and political conditions could impact demand and cost structure.

Mitigation: The Company adopts a conservative financial policy, prudent treasury management, and a exible business model to adjust to changing economic conditions.

Our Competitive Strengths

1. Diversi ed Product Portfolio

Over the years, the Company has built a broad and exible product range, capable of delivering customized solutions at scale. In addition to retail xtures, it manufactures products for industrial and infrastructure applications such as institutional furniture, engineering items, noise barriers, and PSD systems. Leveraging the rise of e-commerce and a robust warehousing system, the Company has reduced dependence on any single sector or client, effectively mitigating concentration risk.

2. Strong Quality Control & Ethical Standards

The Company serves some of Indias leading retail brands, known for their stringent quality and delivery requirements. It has a three-tier quality control process, covering raw material inspection, in-process checks, and nal product veri cation before dispatch. The Company is also SEDEX certified, reflecting its commitment to ethical supply chain practices.

3. Advanced Manufacturing Capabilities

Operating through two well-equipped plants in Vasai, Maharashtra, the Company manufactures multi-material products combining wood and metal. Facilities include modern machinery, professional printing, in-house powder coating, and high-capacity production lines tailored for mass-customization needs.

4. Long-Term Client Relationships

The Company maintains strong ties with a loyal customer base across retail, commercial, and residential sectors. Specializing in bespoke, high-volume custom manufacturing, it is a preferred vendor for many clients, consistently delivering quality products and timely project execution, including store installations and seasonal rollouts.

5. Experienced Leadership Team

Led by a team of diverse and experienced promoters, the management brings deep expertise in product innovation, material sourcing, cost control, and client relationship management. Their collaborative approach has been instrumental in driving new business opportunities and nurturing internal talent.

Significant changes in Key Financial Ratios compared to previous year

Sr. No.	Ratio	As at 31- Mar-2025	As at 31- Mar-2024	Changes	Reason for Change
(i)	Current Ratio	2.46	1.22	101.15%	Improvement in working capital cycle due to increase in current assets and reduction in liabilities
(ii)	Debt-Equity Ratio	0.08	0.65	-87.49%	Repayment of borrowings, leading to a much lower debt level compared to equity.
(iii)	Debt Service Coverage Ratio	12.47	15.16	17.76	Increase in earnings available for debt servicing and reduced debt obligations.
(iv)	Inventory Turnover Ratio	7.58	9.81	22.67	Inventory levels increased to meet the growing demand, reducing turnover ratio.
(v)	Trade Receivables Turnover Ratio	3.70	4.67	-20.71%	Higher receivables due to extended credit terms for strategic clients.
(vi)	Trade Payables Turnover Ratio	2.74	2.91	-6.09%	Slight increase in trade payable turnover ratio was due to small increase in credit purchases.
(vii)	Net Capital Turnover Ratio	1.91	13.22	-85.52%	Increased working capital base due to higher current assets which reduced the capital efficiency.
(viii)	Return on Equity	12.99%	56.24%	-76.91%	Though profits increased but it did not increase as much as the increase in equity base due to Initial Public O ering (IPO) which resulted in reduced return on equity.
(ix)	Net Pro t Ratio	7.53%	6.25%	20.56%	Improved margins driven by operational e ciencies and better cost management.
(x)	Return on Capital Employed	18.51%	62.21%	-70.25%	Due to significant increase in equity base, it impacted overall returns.
(xi)	Return on Investment	NA	NA	NA	The Company did not have any significant nancial investments during the reporting periods.

Strategic Initiatives and Future Outlook

1. Research and Development (R&D):

Our Company remains committed to innovation and technology-driven solutions. We have successfully developed advanced products, such as platform screen doors. Looking ahead, we plan to enhance our R&D efforts, particularly in the infrastructure and retail verticals, which we believe are key drivers for our long-term growth. We also aim to explore research and development of products for emerging sectors.

2. Expansion of Domestic Operations:

While we currently operate on a pan-India basis for project execution and material supply, our manufacturing facilities are primarily located in the western part of the country. To deepen our market presence and ensure faster execution and service delivery, we intend to establish dedicated marketing and implementation teams across various regions of India.

3. Integration of Robotics in Manufacturing:

We plan to incorporate robotic technologies to enhance product quality and operational efficiency by introducing collaborative robots (cobots) that work alongside human workers, we aim to automate routine and repetitive tasks while allowing our human workforce to focus on specialisation, customization, and value-added functions. Cobots are particularly beneficial for small and medium enterprises due to their adaptability, safety, and ease of deployment.

4. Adoption of Intelligent Process Automation (IPA):

To further improve operational reliability and reduce manual errors, we are evaluating the use of Intelligent Process Automation (IPA). IPA will enable us to automate decision-based work flows, increase processing speed, and improve product consistency. Over time, this technology is expected to deliver cost savings and enhance our agility in responding to evolving business needs.

5. Collaboration for B2G and Infrastructure Projects:

We recognize the importance of strategic partnerships to unlock new business opportunities, especially in the B2G

(business-to-government) and infrastructure sectors. We are actively seeking collaboration with eligible and experienced partners in the metro infrastructure domain to qualify for large-scale government tenders. This is particularly critical for the supply of specialized products such as platform screen doors and noise barriers. Additionally, we continue to engage directly with both domestic and multinational corporations for our existing product offerings, and partnerships will be vital in navigating public procurement frameworks.

Material development in human resources /industrial relations front including number of people employed

Your Company endeavours to create a work environment which is collaborative and learning and growth oriented to enable employees to perform at their full potential. Your Company believes that a motivated and empowered employee base is the key to our operations and business strategy, and has developed a large pool of skilled and experienced personnel. Your Company maintain a collaborative, inclusive, non-discriminative and safe work culture, and provide equal opportunities to all employees. It believes that such an enabling environment is essential for us to deliver value for our customers, shareholders and communities. The Company also takes various measures to keep its employees motivated and committed to their work by providing them a healthy work environment.

The Industrial Relations at the Factory have remained cordial.

As on March 31, 2025, your Company had 80 employees. It includes one Managing Director and three Whole-Time Directors.

Discussion on financial performance with respect to operational performance

This has been explained in the Boards Report

Details of any change in return on net worth as compared to the immediately previous financial year along with a

detailed explanation thereof

The return on net worth of your Company for the FY 2024-25 is 12.96% as against 49.10% in the previous financial year, the said decrease is due to increase in equity due to Initial Public O er on NSE Emerge Platform.

Segment Wise Or Product-Wise Performance

The company is engaged in the business of manufacturing furniture and industrial warehouse racks. For the year ended March 31, 2025, the revenue from operations was 10,658.82 lakhs as compared to 8,298.66 lakhs in the previous year. Out of this, revenue from the furniture segment amounted to 9,830.30 lakhs (previous year 7,261.89 lakhs) and from the industrial warehouse racks segment amounted to 928.52 lakhs (previous year 1,060.31 lakhs). After considering eliminations of 100.00 lakhs (previous year 23.55 lakhs), the net revenue from operations stood at 10,658.82 lakhs (previous year 8,298.66 lakhs).

The segment reported pro tability for the year ended March 31, 2025, were 798.24 lakhs for the furniture segment and 4.39 lakhs for the industrial warehouse racks segment, aggregating to 802.63 lakhs. In the previous year, the segment results were 330.45 lakhs for furniture and 187.90 lakhs for warehouse racks, aggregating to 518.34 lakhs.

As at March 31, 2025, segment assets amounted to 9,522.23 lakhs for the furniture segment and 701.42 lakhs for the warehouse racks segment, aggregating to 10,223.65 lakhs, as against 3,100.03 lakhs and 895.89 lakhs respectively in the previous year (total 3,995.92 lakhs). The segment liabilities as at March 31, 2025, were 3,754.84 lakhs for the furniture segment and 143.93 lakhs for the warehouse racks segment, aggregating to 3,898.77 lakhs, compared to 2,359.17 lakhs and 573.82 lakhs respectively in the previous year (total 2,932.99 lakhs).

All of the companys revenue was derived from operations within India, which stood at 10,658.82 lakhs for the year ended March 31, 2025, as compared to 8,298.66 lakhs in the previous year. The company did not earn any revenue from operations outside India.

Internal Control Systems and their adequacy

The Companys internal controls are commensurate with the nature of its business, the size and complexity of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or disposition, executing transactions with proper authorization and ensuring compliance with corporate policies. The system ensures appropriate information flow to facilitate effective monitoring. The internal audit system also ensures formation and implementation of corporate policies for nancial, reporting, accounting and information security.

The Internal Financial Control of the company is analyzed and audited for the compliances and accordingly the report under Section 143 of the Companies Act, 2013 is prepared and the report on internal control over financial reporting as issued by the statutory auditors of the Company for the year ended March 31, 2025.

The Companys internal auditors review business processes and controls. The audit committee reviews reports presented by the internal auditors on a periodic basis. The committee makes note of the audit observations and takes corrective actions, if necessary. It maintains a constant dialogue with the statutory and internal auditors to ensure effective operations of the internal control systems. The Audit Committee of the Board then discusses significant findings and corrective measures initiated. The Audit Committee of the Board of Directors periodically reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening these systems.

Cautionary Statement

Statements in this report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement because of many factors like economic condition, availability of labor, price conditions, domestic and international market, changes in Government policies, tax regime, etc. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information and event.