INDUSTRY STRUCTURE & DEVELOPMENT
The recent growth in Indian footwear industry has been fueled by advent of new technologies, growth of e commerce channels and an inflow of fresh investment coupled with changing consumer perceptions wherein footwear has come to be reckoned as an expression of ones personality.
Increasing consumer preference for brands and a bent towards premium products will be facilitating growth in the forecast period for Indian footwear market. Coupled with a dynamic lifestyle, evolving purchase habits and impact of social media, rapid changes have come about in fashion trends, influencing footwear industry as well. Going forward as the situation improves, increasing demand and supply of footwear products from India and other exporting countries is expected to restore the momentum.
OPPORTUNITIES AND CHALLENGES
| STRENGTHS | WEAKNESSES |
| • Research and Development. | • Environmental problems. |
| • Growing international & domestic market. Outsourcing | • Dependence on imported machines and components |
| • Government support in various subsidy schemes | • Dependency on footwear sale. |
| • Marketing and Campaigns | |
| OPPURTUNITIES | THREATS |
| • Use of e-commerce indirect marketing. | • Entry of multinational in domestic market. |
| • Increase quality, innovation, competition & brand building. | • Increasing trend of E-commerce. |
| • Growing fashion consciousness globally as well as domestic market | • Stricter international standards. |
CHALLENGES: A large section of the footwear industry still remains unorganized in nature and offers a strong price competition to those dealing in branded products, forcing them to rely on innovation and technology enabled marketing solutions. Sourcing skilled workforce in wake of increasing demand poses a real challenge across manufacturing processes. The industry operates in a complex regulatory environment. Any change in the laws and regulations governing the footwear industry may affect the business and financial performance of the industry.
OUTLOOK
Overall, despite the challenging environment, the growth-story of India remains intact. India remains a preferred investment destination for FDI amidst global asset shifts towards emerging economies. Proactive and decisive measures taken by governments and policy makers will certainly help kick-off the growth bandwagon again and put economic recovery back on rails.
With footwear evolving from a functional requirement in day-today life to a symbol of fashion and style, it is necessary for the players to align their strategies to come up to the expectations of the modern consumer.
THE CHANGING CONSUMER BEHAVIOUR
Indian consumers are also evolving with the market - habits, lifestyles, tastes and preferences. The advent of organized retailing malls and multiplexes has transformed the shopping habits and purchase behavior of the Indian consumer. There are significant changes that can be seen in the purchasing behavior of Indian consumer. The modern consumer wants his purchases to reflect his lifestyle aspiration. With rise in income & increased awareness about products and proliferation of choices, consumers have become pickier with purchases.
ANALYSIS OF FINANCIAL CONDITION & RESULTS AND DISCUSSION ON FINANCIAL PERFORMANCE AND DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
evenue from operations and sales has been increased this year from 1156.79 Lakh to 1597.16 Lakh.This also results into decrease of net profit/loss from Rs. -158.66 lakh to Rs 459.13 Lakh in said the financial year as compare to previous year.
The company has reduced its borrowings from banks/financial institutions from Rs. 7.72 cr to Rs 3.08 cr in the financial year 2024-25. By the impact, the borrowing cost has been reduced from Rs.1.02 cr to Rs.0.42 cr. In the said financial year.
RATIOS
| Particulars | Year Ended 31.03.2025 | Year Ended 31.03.2024 | Change | Reason of Change |
| a) Current Ratio ( Number of Times) | 1.93 | 1.65 | 17% | Due to increase in current Assets |
| Curren Assets/ Current Liabilities | ||||
| b) Debt Equity Ratio ( number of times) | NA | NA | Due to negative equity | |
| (Total Debt/Shareholderss Equity) | ||||
| c) Debt Service Coverage Ratio ( number of times) | 1.04 | -1.72 | -161% | Due to decrease in losses |
| (Earning available for Debt Service/ Debt Service) | ||||
| d) Return on Equity Ratio( number of times) | 0.89 | -0.43 | -306% | Due to decrease in losses |
| (Net profit aftertax / Average Shareholding Equity) | ||||
| e) Inventory Turnover Ratio( number of time) | 0.16 | 0.20 | -19% | Due to decrease in Raw Material Consumed |
| ( Raw Material consumed/Average Inventory) | ||||
| f) Trade Receivable Turnover ( number of time) | 1.68 | 0.99 | 70% | |
| ( Net Sales excluding export incentive / Average Trade Receivables) | ||||
| g) Trade Payable Turnover( number of times) | 0.56 | 0.00 | 4929045% | Due to increase in Net Purchases |
| ( Net purchases/ Average trade payable) | ||||
| h) Net Capital Turnover ( number of times) | 0.56 | 0.51 | 9% | Due to increase in Working Capital |
| ( Revenue from operation/ working capital) | ||||
| i) Net Profit Ratio(%) | 23.75% | -14.68% | 262% | Due to decrease in sales |
| ( Net profit aftertax/ Revenue from Operation) | ||||
| j) Return on Capital Employed ( Number of times) | 0.196 | 0.035 | 468% | Due to decrease in losses |
| (Profit before Interest & Tax/ Capital Employed) | ||||
| k) Return on Investments ( number of times) | 0.01 | 0.00 | 0% | |
| Return on Fixed Deposits |
Notes
1 Equity =Equity Share capital + Other Equity
2 Raw Mareial Consumed includes cost of Material consumed and change in inventories of finished goods and work in progress
3 Inventory Includes Raw Materials and Components, Work in Progress , Finished Stock, Store and spares
4
Working capital = Current assets lesss current liabilities5 Capital Employed includes shareholders equity , non current and current borrowings
ENVIORNMENT PROTECTION
The footwear industry aims to achieve environmental protection objectives such as waste reduction, recycling and recuperation of secondary raw materials. Environment protection is integral part for any industry. Your Company has adopted various measures in order to achieve the desired environmental level not only to comply with the Environmental Laws but also taking into consideration the Eco friendly atmosphere.
PERFORMANCE
The Company operates in single segment i.e manufacturing of shoe and shoe upper. There has been no change during the year under review in the nature of business pursued by the Company. The Company aims to create sustainable vision to grow the business and make long-term strategic investments in various new ventures promoted by the Company.
The companys sales as well as profit increased in the financial year 2025-25 as compared to previous year 2023-24.
The company has reduced its borrowings as well in the financial year 2024-25. By the impact, the borrowing cost has been reduced from from Rs.1.02 cr to Rs.0.42 cr. In the said financial year.
We are excited to announce that in FY 2025-26, the company plans to relaunch its brand, Lotus Bawa. This strategic initiative is expected to significantly enhance our revenue and sales, positioning us for growth in a competitive marketplace. The relaunch will focus on revitalizing the brands identity and expanding our product offerings, ultimately strengthening our market presence and customer engagement. We look forward to sharing more details as we move closer to the launch.
RISK MANAGEMENT
The present risks and anticipated future risks are reviewed by the management of company at regular intervals. Based on its past experiences, the management tries to remain vigilant about all prospective risks and takes suitable preventive measures to adequately safeguard its resources like men, machine & money, sothat the business continues as usual even during difficult situations. Todays business environment demands that wholesalers and retailers focus more attention on minimizing risks—from closer examination of internal controls, tax positions and financial reporting practices to corporate governance, image marketing, and human resources policies and procedures.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The internal control and risk management system is structured and applied in accordance with the principles and criteria established in the Corporate Governance. As such this process is aimed at pursuing the values of both procedural and substantial fairness, transparency and accountability, which are considered key factors for managing the business. The Audit Committee of its Board of Directors, comprising of Independent Directors, also reviews the systems at regular intervals. Moreover, the Company has appointed M/s Sanjiv Manav Jain & Associates, Chartered Accountants, as its Internal Auditors and they periodically test the efficacy of the prevailing internal control systems.
HUMAN RESOURCES
One of the key pillars of the Companys business is its people. The Companys HR policies and practices are built on core values of Integrity, Passion, Speed, Commitment and Seamlessness. The Companys focus is on recruitment of good talent and retention of the talent pool. The Company is into a continuous process of providing a safe work environment for our employees and stakeholders. As on March 31, 2025.
CAUTIONARY STATEMENT
Statements in this management discussion and analysis describing the Companys views about the industry, objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. The Company undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such statements. Readers are cautioned as not to place undue reliance on the forward-looking statements as they speak only as of their dates. Actual results might differ substantially or materially from those expressed or implied.
ACKNOWLEDGEMENTS
Your Board acknowledges, appreciates and values the unwavering efforts by the employees, workmen and staff including the Management headed by the Directors who have all worked together as a team despite the pandemic and overall challenging business environment. Your Board also appreciates the Independent Directors and the Non-Executive Directors of the Company for their contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which helps your Company to take the right decisions in achieving its business goals. Your Board also wishes to place on record their deep appreciation to the Companys employees, suppliers, customers and Government authorities for their selfless efforts in helping your Company to operate whenever permissible during the pandemic.
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