Satchmo Holdings Ltd Management Discussions

FY2024-25

Economic Environment

Indias economic performance in the fiscal year 2024-25 (FY25) reflects a period of moderated growth influenced by both domestic and global factors.

GDP Growth: The National Statistical Office (NSO) projects Indias real GDP to grow by 6.4% in FY 2024-25, a deceleration from the 8.2% growth observed in the previous fiscal year. This slowdown is attributed to weakened manufacturing output and subdued corporate investments

Sectoral Performance:

Industry: Expected to expand by 6.2%, driven by robust activities in construction and utilities. 0 Services: Continues to be a significant contributor to GDP, with services exports growing by 12.8% during April-November for FY204-25, up from 5.7% in the previous fiscal year.

Inflation and Monetary Policy: Retail inflation softened to 4.9% during April-December 2024, remaining within the target band of 4?2%. The Reserve Bank of India (RBI) projects inflation at 4.6% in Q1 and 4.0% in Q2 of FY2025-26. In response to easing inflation, the RBI implemented a 25 basis point rate cut in April 2025, with an additional reduction anticipated in August, aiming to stimulate economic activity.

Outlook: Looking ahead, Indias GDP is expected to grow between 6.3% and 6.8% in FY202526, contingent upon a continued rural recovery, softer inflation, and the resolution of geopolitical and trade uncertainties

The Company

Company Overview and Market Positioning

SATCHMO Holdings Limited ("SATCHMO" or "Company") is an investment and Holding Company in the sectors of Facilities management, Catering, Restaurants, Food and Equity Trading. The Company has a very strong brand equity, business processes and partnerships to attain the next stage of growth.

SATCHMO has a comprehensive corporate governance framework with an eminent Board and strong management team with significant experience across industries. In line with best in class corporate governance practices, the Company has a required proportion of Independent Directors.

Operational Performance

The Company is currently focussing on its Balance Sheet and exiting from various stressed assets and working to become zero debt in the parent company as well as its subsidiaries. The Company has exited four projects in previous years and the efforts are on-going for exiting remaining stressed real estate projects which will aim to also addressing debt challenges and settling banks by the end of first quarter of the current year FY 2025-26 so as to become debt-free. At the same time, focus is also to complete balance two ongoing projects by finishing the pending works and handing over the remaining apartments to the customers.

Consolidated Financial Performance in IND-AS (Figures)

Satchmo at consolidated level including the two subsidiaries generated revenue of Rs. 1,527 lakhs (including other income), compared with FY 2023-24 revenue of Rs 13,348 lakhs (including other income). The Earnings before interest, tax, depreciation and amortization (EBITDA) was Rs. 1,849 lakhs as compared to Rs 1,581 lakhs in the previous year. The Profit / (Loss) after taxes during the year was Rs. 1,838 lakhs.

Consolidated Revenue Breakup: - IND-AS (Figures)

	FY2025	% Share	FY2024	% Share
Property Development	1,107	93.65%	3,199	72.69%
Contractual Activities / Other Operating Income	-	-	-	-
Income from Sale of Projects	-	-	984	22.36%
Maintenance Income	74	6.26%	171	3.89%
Income from Sale of Shares	1	0.09%	47	1.06%
Misc. - Other Income	-	-	-	-
Total	1,182		4,401

Consolidated Financial Condition IND- AS (Figures)

(Rs. in Lakhs)

Particulars	March 31, 2025	March 31, 2024
Sources of funds
a. Shareholders funds	(105,607)	(107,474)
b. Minority Interest	-	-
c. Loan funds	13,385	13,386
Total	(92,222)	(94,088)
Application of funds
a. Fixed assets (net)	10,570	10,391
b. Investments
c. Net current assets	(102,792)	(104,479)
d. Deferred tax/ miscellaneous expense, among others	-	-
Total	(92,222)	(94,088)

 

Particulars	12 months ended March 31, 2025	12 months ended March 31, 2024
Profit before tax	1,838	1,468
Add: Adjustments	(140)	(4,779)
Add: Net working capital	1,353	6,535
Less: Income Tax paid	14	129
Net cash flow from operating activities	359	3,353
Net cash flow from investing activities	(2)	(25)
Cash flow from financing activities	(1)	(3,550)
Net cash inflow / (outflow)	356	(222)

Liquidity

As of 31 March 2025, the Company had cash and cash equivalents of Rs. 366 Lakhs. On a standalone basis, the Company had a total debt of Rs. 8,507 Lakhs and the Net worth was at (Rs. 94,673 Lakhs) as at 31 March 2025. The Company is closely monitoring the debt levels and has put in place plans to close all the debts in the current financial year 2025-26.

Business Strategy

New Businesses

SATCHMO has been focusing on new businesses in line, primarily with the industrial catering division with the amended objects, and is working towards turnaround of its financial position.

SATCHMO has already commenced business of trading in equities in last year of the previous year and have reported small income on equity trading. During the current year trading in equities continued two quarters of the financial year, however the market conditions were volatile hence there were reduced activities on a cautious basis.

Further, the Company in continuation of its aim from the previous year will focus into other businesses like facilities management, catering and restaurants in line with its amended objects. Significant improvements, viz., identifying of the factory lease premises and placing of orders for machineries have already been done in this aspect and its hopeful that this new business will be kick-started shortly and will start bringing revenue from the second quarter of the current financial year 2025-26.

Company is hopeful of value generation in these new areas of business and working towards substantial improvement in its financial position.

Exploring new opportunities

Facility Management:

The Company sees good potential in Facility Management services where there is need for quality professional players to provide integrated management solutions including security, housekeeping, MEP maintenance, landscaping and external development management, capex improvement, etc. It is a competitive but growing sector wherein there is great demand in several residential and commercial spaces. While the margins are modest, increased scale would provide economies in terms of cost efficiency and improved margin apart from helping the top line. This would help in related diversification by utilizing existing resources and capacities.

Food and catering:

The food and catering industry in India continues to demonstrate robust growth, driven by increasing urbanization, evolving consumer lifestyles, and a rising demand for convenient and quality dining solutions. The sector is witnessing strong momentum across both institutional and retail segments, with corporates, educational institutions, hospitals, and events being key contributors to demand.

Our companys focus is to maintain a strong focus on operational efficiency, hygiene standards, and menu innovation to align with customer preferences. We will aim to invest in modern kitchen infrastructure, technology-driven processes, and staff training to ensure consistency and scalability across service locations.

The industry also experienced increased demand for specialized dietary offerings and sustainable packaging solutions, which we have proactively integrated into our services. Our catering vertical will focus on increased traction with the revival of social gatherings, weddings, and MICE (Meetings, Incentives, Conferences, and Exhibitions) events, especially in urban centers in future apart from Industrial catering.

Also there will be challenges such as fluctuating commodity prices, manpower retention, and regulatory compliances which may impact margins. However, through strategic sourcing, digital integration, and cost optimization initiatives, we have planned to mitigated these risks to a large extent.

Our focus will remain on enhancing customer satisfaction, maintaining food safety standards, and leveraging technology for end- to-end service excellence.

Continuous urban population growth and increased employment rates have caused consumers to live a hectic lifestyle. Due to the lack of time available for culinary and meal preparation, processed foods such as ready-to-eat products and snacks have gained popularity in urban areas.

India has one of the worlds largest working populations. With rising discretionary incomes, this demographic can be considered the largest consumer of processed foods. This population is further anticipated to increase steadily over the next five years.

Necessary recruitment of senior staff who have adequate expertise in this field have already been completed and all strategies to kick- start the business have reached quite considerable level including leasing out factory premises and placement of Purchase Orders for important machineries. Necessary infrastructure for the same will be completed in the first quarter of the current year so that by the end of the current financial year the Company starts generating revenue from this line of business.

Managing and promoting talent

SATCHMOs culture is focused on customer-centricity, collaborative teamwork, result orientation, entrepreneurial mind set and developing people. One of the key growth strategies at SATCHMO is to manage and promote talent by providing growth opportunities, rewards, respect, learning and fun. The Companys employees are both an important stakeholder group and key players in its business. With their skills and achievements, the Company is driving a culture of innovation and sustained growth for SATCHMO.

Opportunities and Threats

Demand for Catering has increased with rapid rise in urbanization. Millions of people migrate to cities every year, not only driving demand for homes but also giving rise to avenues in Food Chain supply. The disposable income has been steadily increasing and there is increased demand for multiple restaurants. Going forward, with the e-commerce market in India making itself look attractive, can pose a good opportunities in area of timely execution of orders from customers.

The key threats to businesses of catering arises from change in customer preference for newer places.

• Sales market risks - Economic and market conditions might influence customers to defer or cancel preference for outside food

• increase in cost of raw materials

• regulatory and policy changes results in higher costs .

Risk management

The Company has an established enterprise risk management framework to optimally identify and manage risks, as well as to address operational, strategic and regulatory risks. The ability to anticipate risks and respond effectively is critical for achieving the Companys objectives and provides value to stakeholders. The risk management process also addresses long term strategic and operational planning, talent acquisition and retention, treasury management, financial reporting and controls, information technology and security, environment health and safety compliance, legal, taxation, communication, regulatory compliance and code of conduct for employees. The Company believes that risk is an integral part of every business and promotes a culture of building ability to anticipate and manage the risks effectively and converting them into opportunities. Risk assessment is conducted by the risk management committee and the program is reviewed periodically by the Audit Committee.

There are several areas of risk related with:

• the macroeconomic environment

• the information technology systems and disaster recovery

• Liquidity risks

• the availability of finance and the cost of financing

• the human resources - their availability, costs and compliance with the code of ethics of the Company

• the vendors and business partners

• the assets of the Company

• Competitors and Customer risks

Internal Control Systems

SATCHMO has an elaborate internal control system which monitors compliance to internal processes. It ensures that all transactions are authorized, recorded and reported correctly. Well established and robust internal audit processes, both at business and corporate levels, continuously monitor the adequacy and effectiveness of the internal control environment across the Company and the status of compliance with operating systems, internal policies and regulatory requirements. In the networked IT environment of the Company, validation of IT security continues to receive focused attention of the internal audit. The Internal Audit team of the Company independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting to the Audit Committee of the Board.

The Company strives to continuously strengthen the internal control systems by adopting standard operating procedures and by delegating roles and responsibilities to various Department heads for effective implementation of the same. This is to ensure that the Company conducts its business with highest standards of statutory, legal and regulatory compliance.

Outlook

The key focus for us in the following year would be:

• Design and Innovation: The Company has always focused on building a strong brand recall and differentiating itself from the competitors by continuous investments in new design and innovation.

• Quality: Delivery highest quality to the customers to their utmost satisfaction.

• Cash-flow Management - Tight control on accounts receivables and accounts payables with the objective of reducing the interest burden.

• Customer Relationship - Enhance customer experience at each of their touch points starting with at the stage at which we interact with them to assist in selection of a home till the time it is handed over.

Human Resources Development

• Human Resources (HR) play a pivotal role in driving the companys growth and sustaining operational excellence. During the financial year, the company continued to invest in human capital development through structured training programs, skill enhancement initiatives, and employee engagement activities aimed at fostering a culture of performance, collaboration, and innovation.

• We placed strong emphasis on talent acquisition, retention, and succession planning to ensure the organization remains agile and future-ready. With a focus on building leadership at all levels, we implemented targeted development programs and performance-linked incentives to align individual growth with organizational goals.

• The company also enhanced its digital HR platforms to streamline payroll, attendance, performance management, and learning modules, improving transparency and efficiency across HR functions. Special attention was given to employee well-being, mental health support, and workplace safety, especially in light of the dynamic and demanding industry environment.

• As we grow and diversify, our HR strategy remains focused on nurturing a motivated, skilled, and diverse workforce that can adapt to evolving business needs and contribute meaningfully to the companys long-term vision.

• Our work-force consists of our permanent employees, consultants and labour work force that work at projects through subcontractors.

Cautionary Statement

Statements in this Management Discussion and Analysis contain "forward looking statements" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Companys future business developments and economic performance.

While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. The Company undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.

For and on behalf of the Board of Directors	Nitesh Shetty
Place: Bengaluru	Chairman & Managing Director
Date: April 30, 2025	DIN:00304555