Sanghvi Brands Ltd Management Discussions

Against the backdrop of the prevailing external business environment, the Companys value creation model and its long-term business strategy, the Board of Directors of Sanghvi Brands Limited ("the Company") is pleased to present the Management Discussion and Analysis Report, together with the Audited Financial Statements, for the financial year ended March 31, 2026.

This Report provides an overview of the Companys operating and financial performance, industry trends, opportunities, risks and outlook for the future. It has been prepared in accordance with the requirements of Regulation 34(2)(e) read with Schedule V (Part B) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Sanghvi Brands Limited (CIN: L74999PN2010PLC135586) was incorporated on February 16, 2010 under the provisions of the Companies Act, 1956 and is presently listed on the BSE SME Platform. The Registered Office of the Company is situated at Sanghvi House, 105/2, Shivajinagar, Pune - 411005, Maharashtra, India.

The Company has established its presence in the spa, salon and wellness industry, where it focuses on developing premium lifestyle and wellness brands through strategic partnerships, brand management, franchising and operational excellence.

The beauty, wellness and personal care industry continues to be one of the fastest-growing segments of the consumer services sector in India. Increasing disposable incomes, rapid urbanisation, changing lifestyles, greater awareness of personal grooming and wellness, and the growing preference for premium beauty and wellness services have significantly contributed to the expansion of the organised spa and salon industry. The increasing influence of digital platforms, social media and evolving consumer expectations has further accelerated the demand for quality wellness experiences and internationally recognised brands.

Globally, the wellness economy continues to witness robust growth, with the spa industry emerging as one of its fastest-growing segments. Hotel and destination spas have experienced significant expansion, driven by increasing travel, wellness tourism and consumer preference for holistic health and rejuvenation services. Asia continues to strengthen its position as a major global wellness market, supported by rising consumer spending, expanding hospitality infrastructure and increasing investment in premium wellness services. These industry trends present significant opportunities for companies operating in the organised spa and wellness sector. Against this favourable industry backdrop, Sanghvi Brands Limited continues to strengthen its position by leveraging its expertise in operating and managing premium international wellness and lifestyle brands. The Company remains focused on enhancing customer experience, expanding strategic business relationships, improving operational efficiencies and identifying new opportunities for sustainable growth within the wellness and personal care ecosystem.

The management believes that the long-term fundamentals of the Indian spa, salon and wellness industry remain strong. Supported by favourable demographic trends, increasing health and wellness consciousness and the growing demand for organised premium wellness services, the Company is well positioned to capitalise on emerging opportunities while continuing to create sustainable value for its stakeholders.

The business environment in which the Company operates continues to evolve rapidly, driven by changing consumer preferences, increasing demand for branded lifestyle and wellness products, growth of organised retail and franchise-led models, expansion of digital and omnichannel platforms, and rising consumer spending on premium goods and services. These developments create significant opportunities for growth, expansion and value creation for the Company in its core areas of operations.

Accordingly, the key opportunities available to the Company and the threats associated with its business operations are mentioned as under:

The Company continuously evaluates these opportunities and risks and remains focused on strengthening its partnerships, enhancing operational efficiencies and implementing appropriate risk mitigation strategies to ensure sustainable long-term growth.

The Company is engaged in the business of establishing, acquiring, operating, importing, marketing and promoting various Indian and international brands and dealing in branded goods and services. In line with its business model, Sanghvi Brands Limited has developed a strong presence in the luxury wellness and spa industry and operates an integrated portfolio of international spa, salon and wellness brands across multiple geographies.

Sanghvi Brands has created and operates one of the largest portfolios of luxury lifestyle and international wellness brands in India and South Asia, and is positioned amongst the leading spa and wellness operators globally. The Company holds exclusive rights and master franchise arrangements for premium international brands including Spa LOCCITANE, ELLE Spa & Salon, and Warren Tricomi Salon & Spa, with operations across India, the Middle East and the Indian Ocean region including Sri Lanka and Fujairah (UAE).

The Companys business model is supported by a strong network of more than 50+ spa, salon and gym partnerships worldwide, which are either operational or under development. These partnerships include collaborations with leading hospitality brands such as JW Marriott, Accor, Hilton and IHG, as well as prominent real estate developers including Lodha Developers, Godrej Properties, Ajmera Developers, Kanakia, TVH Developers and K Raheja Corp, thereby strengthening its presence across premium hospitality and residential destinations.

The Company has also received industry recognition for its operational excellence, including awards from LOCCITANE for operating one of the best spas in the Asia-Pacific region, and has been recognised among Indias most influential luxury brands by leading industry publications. Its flagship brand portfolio, including SPA by LOCCITANE, has also been acknowledged by reputed platforms such as Conde Nast Traveller and ELLE Magazine for excellence in spa and wellness services.

Despite having a diversified portfolio of brands, geographies and operational formats, the Company continues to operate within a single reportable business segment, namely spa, salon and wellness services along with brand management and related activities. Accordingly, segment-wise reporting is not applicable.

The management remains optimistic regarding the long-term growth prospects of the Company, supported by the continued expansion of the luxury spa, salon and wellness industry. The increasing demand for premium wellness experiences, growth of organised hospitality and lifestyle destinations, rising consumer spending on wellness services, and expanding franchising and brand collaboration opportunities are expected to provide sustainable avenues for growth and value creation.

The Company intends to further strengthen its portfolio of premium international spa and wellness brands, deepen existing strategic partnerships with leading hospitality groups and real estate developers, and explore new alliances across key domestic and international markets. It also remains focused on enhancing operational efficiencies through technology adoption, cost optimisation initiatives and disciplined financial management, with the objective of improving service quality and long-term shareholder value.

The outlook for the Company remains positive however, it is subject to prevailing economic conditions, consumer demand trends within the wellness sector, regulatory developments and geopolitical uncertainties that may have an impact on business operations.

The Company operates in the luxury spa, salon and wellness industry, which is influenced by evolving consumer preferences, discretionary spending patterns, and global lifestyle trends. While the industry presents significant growth opportunities, it is also exposed to various internal and external risks that may impact the business operations and financial performance of the Company.

The Companys performance is influenced by macroeconomic conditions such as economic slowdown, inflationary pressures, geopolitical uncertainties and fluctuations in foreign exchange rates. These factors, particularly given the Companys association with international brands and overseas operations, may impact consumer spending on premium spa and wellness services and, consequently, affect profitability.

The spa and wellness industry is highly competitive, with the presence of both organised and unorganised players in domestic and international markets. Increasing competition, entry of new players and expansion of existing competitors may result in pricing pressures and impact the Companys market share.

The Companys business is also dependent on strategic relationships with international brands, hospitality groups and real estate developers. Any adverse changes, non-renewal or termination of such arrangements, as well as regulatory changes relating to hospitality, franchising, labour laws, taxation and health and safety standards, may impact business operations and compliance requirements.

The Companys operations are dependent on the availability of skilled manpower in the spa and wellness sector. Any inability to attract, train and retain qualified professionals may affect service quality, customer satisfaction and operational efficiency.

The business is also exposed to risks related to dependency on key brand partnerships and franchise arrangements. Any operational disruptions, contractual limitations or inability to effectively manage such partnerships may impact business continuity.

Operational risks, including service delivery standards, quality control, and efficient management of multiple locations across geographies, remain critical to sustaining brand reputation and customer experience.

The Company has an adequate system of internal controls commensurate with the nature, size and complexity of its business. The internal control framework is designed to ensure safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

The internal financial controls are periodically reviewed by the management. The Audit Committee regularly reviews the adequacy and effectiveness of internal control systems and recommends improvements wherever considered necessary.

During the financial year under review, the Company achieved a consolidated turnover of Rs. 1,46,142.82 thousand, as compared to the previous financial year, reflecting continued growth in business operations.

The Profit After Tax (PAT) increased to Rs. 15,839.72 thousand from Rs. 10,126.72 thousand in the previous year, demonstrating improved operational performance, better cost management and enhanced business efficiencies.

On a standalone basis, the Company recorded a turnover of Rs. 91,155.76 thousand as against Rs. 85,194.16 thousand during the previous financial year.

The Profit After Tax stood at Rs. 8,500.13 thousand as compared to Rs. 10,869.77 thousand in the previous year. Although revenue increased during the year, profitability was impacted primarily due to higher operating and administrative expenses incurred during the year. The management continues to focus on improving operational efficiencies, cost optimisation and sustainable profitability.

Overall, the financial position of the Company remains stable and provides a sound platform for future growth.

The Company firmly believes that its employees are its most valuable asset and continues to focus on attracting, retaining and developing talented professionals.

The Company maintains cordial industrial relations at all levels. Various initiatives relating to employee engagement, learning and development, performance management and workplace safety continue to be undertaken to build a motivated workforce.

The total number of permanent employees as on March 31, 2026 was 81.

Pursuant to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the key financial ratios are disclosed below. The said ratios have also been appropriately detailed in Note No. 34 of the Notes to the Standalone Financial Statements for the financial year 2025-2026.

The Companys Return on Net Worth decreased from 11% in the previous financial year to 8% during the financial year under review. The decline in Return on Net Worth is primarily attributable to a reduction in net profitability during the year, which impacted the overall return generated on shareholders funds. The management continues to focus on improving operational efficiencies, optimizing costs, strengthening revenue generation, and enhancing overall business performance. The Company remains committed to prudent financial management and strategic initiatives aimed at improving profitability and delivering sustainable value to its shareholders over the long term.

This statement made in this section describes the Companys objectives, expectation and estimations which may be forward looking statements within the meaning of applicable securities, laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events.

The financial statements are prepared in accordance with the Generally Accepted Accounting Principles ("GAAP") in India under the historical cost convention on an accrual basis, and are in conformity with mandatory accounting standards, as prescribed under Section 133 of the Companies Act, 2013(Act) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act. The Company has consistently applied the prescribed accounting policies and standards, and no treatment different from that prescribed under the applicable Accounting Standards has been adopted in the preparation of the financial statements. Accordingly, no alternative accounting treatment requiring specific disclosure or management explanation has arisen during the year.