Scarnose International Ltd Management Discussions

Scarnose International Limited ("the Company") is a diversi ied global enterprise with a presence across the pharmaceutical, agrochemical, healthcare, animal nutrition, organic fertilizer, and personal hygiene industries. The Company is engaged in manufacturing, trading, warehousing, clearing and forwarding, purchasing and selling, marketing, and brand establishment of a wide range of products. The Companys product portfolio includes animal food supplements, and other products catering to animal.

The Company remains committed to delivering high-quality products, complying with applicable regulatory standards, creating sustainable value for stakeholders, and expanding its presence in established as well as emerging markets.

During FY 2025 26, the global economic environment remained in luenced by moderating in lation, monetary policy developments, geopolitical uncertainties, commodity-price movements, changing trade conditions, and continuing technological transformation.

Global businesses continued to focus on strengthening supply-chain resilience, improving operational ef iciency, managing input costs, and adopting technology to remain competitive. Emerging markets, particularly across Asia and other developing regions, continued to present opportunities for long-term expansion, although in lationary pressures, currency movements, inancing costs, and geopolitical developments remained important considerations.

Key Global Economic Drivers:

i) Global Economic Growth

The global economy continued to experience a gradual and uneven growth trajectory. While several developed economies demonstrated resilience, growth remained subject to higher financing costs, geopolitical uncertainty, and changing consumer and business demand.

Emerging markets continued to provide opportunities owing to increasing consumption, urbanisation, improving infrastructure, and expanding healthcare and agricultural requirements.

ii) Inflation and Monetary Policy

Inflationary pressures moderated from earlier elevated levels in several economies; however, prices of commodities, energy, logistics, packaging and other key inputs remained subject to volatility.

Monetary policy and interest-rate conditions continued to influence investment decisions, consumer demand, working-capital costs, and overall business sentiment.

iii) Geopolitical and Supply-Chain Risks

Geopolitical tensions, international trade developments, disruptions in shipping and logistics, and changes in commodity markets continued to affect global supply chains.

For companies operating across pharmaceutical, agricultural and consumer-product segments, maintaining diversified sourcing channels and adequate inventory planning remained important to mitigate potential supply disruptions.

iv) Technology and Digital Transformation

Technology continued to be a significant driver of business transformation. Artificial intelligence, automation, digital commerce, data analytics, biotechnology and digital supply-chain solutions continued to create opportunities for improving productivity, customer engagement and operational efficiency.

The Company will continue to evaluate technology-led opportunities relevant to its business operations and markets.

v) Sustainability and Environmental Transition

Sustainability continued to gain importance among consumers, regulators, businesses and investors. Increasing demand for environmentally responsible products created opportunities in organic agricultural inputs, biodegradable products, sustainable packaging and resource-efficient operations.

The pharmaceutical, healthcare, personal hygiene, animal health and agriculture sectors continue to witness steady growth, supported by rising awareness, healthcare expenditure and changing consumer needs. Indias strong manufacturing capabilities, cost competitiveness and expanding global presence provide favourable opportunities for companies operating in these sectors.

Growing demand for quality healthcare products, APIs, formulations, hygiene products and sustainable agricultural solutions is expected to support long-term industry growth. The industry, however, remains subject to regulatory requirements, competition, raw material price fluctuations and supply-chain challenges.

Scarnose International Limited intends to leverage emerging opportunities across its diversified business segments while focusing on quality, compliance and sustainable growth. The Company will continue to monitor industry developments and evaluate suitable opportunities for business expansion and value creation.

During FY 2025 26, Scarnose International Limited continued to focus on strengthening its business operations, expanding market opportunities and improving its product and distribution capabilities. The Company continued to operate across its key business areas, including pharmaceutical products, agrochemicals, organic fertilizers, animal food supplements and personal hygiene products.

The Company remained focused on improving distribution, strengthening supplier and quality-control processes, developing sustainable product offerings and identifying opportunities for expansion in domestic and international markets.

Key Performance Highlights for FY 2025 26:

Revenue Growth: Revenue from operations during FY 2025 26 was 1021.22 lakhs, compared with 1,210.16 lakh in FY 2024 25.

Pro itability: Pro it after tax for FY 2025 26 was 0.67 lakhs, compared with 19.10 lakh in FY 2024 25. Earnings per Share: EPS for FY 2025 26 stood at 0.02, compared with 0.61 in FY 2024 25. Business Expansion: The Company continued to explore opportunities for expanding its distribution network and customer base in domestic and international markets. Product Development: The Company continued to focus on product diversi ication, including animal-nutrition solutions. Operational Ef iciency: Greater emphasis was placed on cost management, inventory ef iciency, supplier management and strengthening internal processes.

Opportunities:

Growing awareness regarding health, hygiene and personal wellness. Expansion into Tier II and Tier III cities through affordable and accessible products. Scope for diversi ication into additional personal hygiene products and other feminine hygiene products. Increasing demand for organic fertilizers and sustainable agricultural inputs. Growing focus on animal health, nutrition and disease prevention. Potential for B2B partnerships with institutions, government bodies, NGOs, distributors and other organisations. Expansion of digital sales and distribution channels. Increasing opportunities arising from sustainable and environmentally responsible products.

Threats:

Increasing competition from established, regional and private-label players. Price sensitivity among customers in certain markets. Volatility in raw-material, commodity, packaging and logistics costs. Regulatory changes affecting agricultural, pharmaceutical and personal hygiene products. Increasing environmental and sustainability requirements. Supply-chain disruptions and dependence on third-party suppliers or manufacturers. Changes in consumer preferences and competitive pricing pressures. Foreign-exchange and geopolitical risks in international business.

The Company operates in a single Segment i.e. Animal Food Products, which remained the primary focus of Scarnose International Limited during F.Y. 2025-26. The segment continued to see steady growth, driven by increasing consumer demand for high-quality Goods and Services.

The Company remains cautiously optimistic about its business prospects for FY 2026 27. The demand outlook for animal nutrition and personal hygiene products remains supported by favourable long-term trends including population growth, improving hygiene awareness and demand for sustainable products.

The Company will focus on:

Expanding rural and semi-urban distribution networks. Increasing the use of digital sales and marketing channels. Developing and introducing new product variants.

Focusing on comfort, affordability, quality and sustainability in personal hygiene products.

Strengthening supplier relationships and sourcing channels. Improving supply-chain ef iciency and inventory management. Exploring opportunities for domestic and international market expansion.

Continuing product diversi ication across agriculture, animal nutrition and personal hygiene. Increasing customer and consumer education initiatives.

The Company remains exposed to several business and operational risks, including:

Volatility in prices of pulp, SAP (super absorbent polymers), packaging materials and other raw materials. Potential regulatory restrictions relating to plastics and environmental standards. Changes in consumer preferences towards sustainable and biodegradable alternatives. Competition from domestic, regional and international companies. Dependence on third-party manufacturers and suppliers in certain areas. Logistics and supply-chain disruptions. Changes in government policies and applicable regulations.

The company has robust internal control systems commensurate with the size and nature of its operations. These systems ensure compliance with applicable laws and regulations, safeguard company assets, and enhance operational ef iciency. Regular internal audits and risk assessments are conducted, and indings are reviewed by the Audit Committee.

10. Financial Performance Overview

Revenue from operations: 1021.22 (in lakhs)

Net Pro it: 0.67 (in Lakhs)

Earnings per Share (EPS): 0.02

11. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer-employee relationship also continued during the year under review. The Company has continued to give special attention to human resources.

12. Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of signi icant changes (change of 25% or more as compared to the immediately previous inancial year) in key sector-speci ic inancial ratios. In this regard, the Companys signi icant changes in key sector-speci ic inancial ratios are described in the Financial Statements.

13. Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may be “forward-looking statements” within the meaning of applicable laws and regulations. Actual results may differ materially due to economic conditions, government policies, and other subsequent developments.