Rose Merc. Ltd Management Discussions

<dhhead-MANAGEMENT DISCUSSION f AND ANALYSIS</dhhead-

Global Economy

During the financial year 2025-26, the global economy demonstrated remarkable resilience, achieving an approximate growth rate of 3.1%. This expansion was primarily driven by steady consumer demand and ongoing growth within the services sector, even in the face of geopolitical uncertainties and challenges related to international trade. While commodity prices experienced volatility, the improvement in supply chain conditions contributed to enhanced business stability. This environment created a broadly positive foundation for companies operating in international markets, supporting their ability to navigate and adapt to changing economic circumstances.

Indian Economy

India maintained its position as the fastest-growing major economy in the world, recording an estimated GDP growth of around 7.6%. This robust performance was underpinned by strong domestic consumption, sustained government infrastructure investments, resilient services exports, and solid macroeconomic fundamentals. These factors have enabled India to emerge as one of the most attractive markets for growth globally. Looking forward, the countrys economic outlook remains highly optimistic, presenting substantial opportunities for businesses that are agile, innovative, and well diversified. Rose Merc Limited continues to align its strategy with these ongoing trends to ensure long-term success.

Financial Performance

Despite a challenging economic environment, Rose Merc Limited reported revenue of Rs. 8847.7 las for the financial year 2025-26, reflecting a year-on-year growth of 12.3%. EBITDA stood at Rs. 1873.9 lacs, resulting in a margin of 21.2%. Net Profit After Minority Interest reached Rs. 567.7 lacs, a significant turnaround from a loss of Rs. 55.9 lacs in the previous year. This improvement marks a decisive shift in profitability and demonstrates the effectiveness of the Companys diversification strategy and disciplined operations across its business segments.

Segment-wise

Performance

Sports Division

The Sports Division continues to be a central pillar in Rose Merc Limiteds growth and brand-building strategy. During the financial year 2025-26, the Company completed the fourth season of the Navi Mumbai Premier League (NMPL), further reinforcing its status as one of the regions leading cricket tournaments. Notably, this season featured eight U-19 players, highlighting the Companys commitment to nurturing young talent.

The Company welcomed Indian international cricketer and Rajasthan Royals captain Riyan Parag, as well as Indian cricketer Dhruv Jurel, as brand ambassadors. Their association underscores Rose Merc Limiteds dedication to promoting sporting excellence and forging connections with young audiences throughout India.

Rose Merc Limited achieved a significant milestone by becoming the Title and Principal Sponsor for two franchises in the Mumbai Premier League - Aakash Tigers and Arcs Andheri - and the Title Sponsor of Pruthvi Panthers in the Baroda Super League. This expanded sponsorship strengthens the Companys visibility and demonstrates its long-term commitment to Indian cricket. The Company also supported Shivaji Park Gymkhana, which launched the Shivaji Park Gymkhana Rose Merc Cricket Academy. Over the next three years, Rose Merc Limited will support 48 students selected across U-13, U-16, and U-19 categories. Beyond cricket, the Company contributed to the Grand Wrestling Championship 2025 and the Falcon Cup International Golf Tournament, broadening its engagement in sports.

Fashion

The Company further strengthened its position in the fashion division through its subsidiaries Emirates Holding FZ LLC and Moda Orama Ventures Pvt. Ltd. (MOVe). Marking its maiden entry into Dubai, Rose Merc Limited organised the Emirates Luxury Fashion Show. Additionally, MOVes studio became fully operational during the year, successfully expanding its creative and production capabilities.

Strengthening of Balance Sheet

Indias tourism and hospitality sector continues to witness a remarkable boom, driven by rising domestic travel, growing disposable incomes, and increasing preference for leisure and weekend getaway destinations. Locations such as Lonavala, with their proximity to major metros and year- round tourist appeal, have emerged as key beneficiaries of this trend, offering strong potential for hospitality-led revenue growth.

In a significant step towards strengthening its balance sheet and expanding its asset portfolio, Rose Merc Ltd. acquired a bungalow property in Lonavala, Maharashtra, valued at approximately Rs. 1.3 crore, in April 2026. The property is proposed to be utilised for facility management and hospitality-related business activities, creating opportunities for future revenue generation and enhanced asset utilisation. Further, the Company is also in discussions to acquire land near Lonavala for hospitality-related business activities, reflecting its continued focus on diversifying revenue streams and building longterm asset value.

New Initiatives

Rose Merc Limited is entering the next-generation technology sector through three companies. The Company acquired a 30% stake in its newly formed subsidiary, Virtual Gain Technologies Private Limited., which operates in the fintech domain. Virtual Gain combines core infrastructure services, such as cloud management and enterprise communication tools, with specialised payout solutions and high- impact digital marketing. This positions Rose Merc Limited as a versatile partner for organisations navigating the complexities of the digital economy.

The Company is also engaged in advanced discussions with ZCLUS Ltd, an information technology firm, and CATS Technology Pvt. Ltd., which specialises in deep-tech fields including quantum photonics, artificial intelligence, big data analytics, and surveillance intelligence.

Dividend Payout

In keeping with its commitment to delivering sustainable long-term value to shareholders, the Board of Directors of Rose Merc Limited has recommended a dividend of Rs. 0.35 per equity share for FY 2025-26. This represents a substantial increase over the dividends of Rs. 0.12 per equity share in FY 2024-25 and Rs. 0.10 per equity share in FY 2023-24.

This increase in dividend payout reflects Rose Merc Limiteds improved financial performance and the Boards confidence in its future growth prospects. The Company remains committed to maintaining a balanced approach that rewards shareholders while supporting ongoing investments for sustainable development.