Stanley Lifestyles Ltd Management Discussions

Economy Overview

Indian Economy

India maintained a strong growth trajectory during FY2025-26, with real GDP growth accelerating to 7.7%, compared with 7.1% in FY2024-25. Domestic consumption remained a key pillar of economic activity, with Private Final Consumption Expenditure growing 7.7%, supported by resilient household demand. The continued formalisation of economic activity, along with the impact of GST rationalisation, is supporting urban consumption and strengthening the shift towards organised and branded consumption. This provides a favourable backdrop for discretionary and lifestyle categories, where the preference for premium and organised offerings continues to strengthen.

The manufacturing environment remained expansionary, with the Manufacturing PMI at 54.2 in June 2026, remaining above the neutral level of 50 despite some moderation in momentum. Investment in productive capacity also remained healthy, with machinery and equipment imports increasing 19.3% during FY2025-26, indicating continued technology adoption and capacity enhancement. However, elevated energy and commodity prices, higher freight and insurance costs and supply-chain disruptions continue to influence the cost environment, making sourcing efficiency and disciplined cost management important considerations for manufacturers.

Outlook

The economy remains favourable, with real GDP growth projected at 6.6%. The policy repo rate at 5.25%, together with a neutral monetary policy stance, provides a stable financial environment, while continued government capital expenditure and credit availability are expected to support economic activity. Indias expanding integration with international markets through Free Trade Agreements can further broaden market access for domestic manufacturers and support participation in global value chains. With the broader policy environment remaining supportive, the domestic economy is positioned to sustain its growth momentum and provide a favourable operating landscape for organised premium consumer and lifestyle businesses.

Indias GDP Growth

(in %)

FY 2025	7.1
FY 2026	7.7
FY 2027 (P)	6.6*

P- Projected

Source: MoSPI Provisional Estimates FY2025-26, I RBI*

Industry Overview

Luxury Furniture Market

The India furniture market was valued at USD 30.6 billion in 2025 and is expected to reach USD 64.1 billion by 2032, registering a CAGR of 11.1% during FY2025-2032. Growth is being supported by rapid modernisation of the retail landscape, urbanisation and evolving consumer preferences. The market is witnessing a steady shift towards organised players, supported by increasing demand for contemporary, customised and design-led furniture. However, competitive intensity and pricing pressures remain key considerations for market participants.

Within the broader furniture market, the luxury and premium segment is witnessing increasing consumer preference for aesthetically differentiated, high-quality and customised furniture. Consumers are increasingly seeking branded offerings that combine contemporary design, superior craftsmanship, personalisation and consistent quality. The expansion of organised retail and premium residential developments is supporting greater acceptance of branded furniture, while demand from hospitality and other high-end spaces is broadening the scope of premium furniture offerings.

The market is also evolving towards more organised and experiential retail formats, with greater emphasis on design consultation, personalised solutions and customer experience. Digital and omnichannel channels are further improving accessibility to premium furniture across urban markets. In this environment, players are focusing on differentiated product portfolios, customised offerings, retail presence and brand positioning to strengthen their market position. The segment remains competitive, with domestic and international brands as well as specialised design-led players continuing to compete across product quality, design, pricing and customer experience.

Growth Drivers

Rising Premiumisation of Home Interiors

Consumers are increasingly allocating greater spending towards home aesthetics, comfort and lifestyle upgrades, supporting demand for higher-value and design-led furniture.

Higher Disposable Incomes and Aspirational Consumption

Growth in affluent and upper-middle-income households is expanding the addressable market for premium and luxury furniture, with consumers showing greater willingness to spend on differentiated home furnishings.

1 https://www.mospi.gov.in/uploads/latestReleases/latest_release_1780655857536_5ac01869-ca4a-422d-b7a7-57b81da60932_Press_Note_on_GDP_Estimates_ for_Q4_2025-26_and_PE_FY_2025-26_F.pdf 2 https://rbi.org.in/Scripts/BS_ViewBulletin.aspx 3 https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspxRsprid=62863 4 https://www.persistencemarketresearch.com/market-research/india-furniture-market.asp

Urbanisation and Premium Residential Development

Continued urbanisation and expansion of premium residential projects are increasing the addressable market for premium furniture, particularly across major metropolitan markets.

Formalisation and Brand-led Consumption

Increasing consumer preference for established brands offering quality assurance, professional service and consistent product standards is supporting the transition from fragmented, unorganised furniture purchases towards formal retail formats.

Shift Towards Integrated Home Solutions

Consumers are increasingly seeking coordinated furniture and interior solutions across multiple spaces, supporting demand for complete and cohesive home furnishing rather than individual, standalone products.

Company Overview

Established in 2007 as Stanley Seating, Stanley Lifestyles Limited has evolved into one of Indias leading home-grown luxury and premium furniture brands, with over three decades of expertise across design, manufacturing and retail. The Company operates across the ultra-luxury, luxury and super-premium segments through its three retail formats, Stanley Level Next, Stanley Boutique and Sofas & More. Its product portfolio encompasses sofas and seating, beds and mattresses, case goods, kitchens, wardrobes and cabinetry, enabling the Company to address a wide range of premium and luxury home furnishing requirements.

The Company has progressively expanded its offering from premium furniture to complete home solutions, integrating product design, sourcing, manufacturing, quality control and retail under a unified platform. Its capabilities extend across both retail and B2B requirements, including furniture contract manufacturing and automotive applications. With a growing presence across key Indian markets and the commencement of its international journey through the opening of its first store in Sri Lanka in July 2026, Stanley Lifestyles continues to strengthen its position in the luxury and premium home furnishing segment.

30+ Years

Expertise across design, manufacturing and retail

70 Stores

Company-owned and franchised network across 24 cities

Segment-Wise Performance

During FY 2025-26, Sofa & Seating continued to anchor the Companys product portfolio, while Bed & Mattress and Kitchen & Cabinetry strengthened their contribution to the overall mix. The Companys store-format mix remained led by its company-owned network, reflecting its continued focus on strengthening direct customer engagement and control over the retail experience.

Manufacturing

The Company operates an integrated manufacturing platform in Bengaluru, Karnataka, comprising two facilities across Electronic City and Jigani. The facilities collectively span over 3 lakh sq. ft. and have an installed capacity of approximately 3.07 lakh units, supported by skilled workers. The manufacturing facilities cater to a diversified product portfolio comprising seating and beds, kitchen and cabinetry, case goods, mattresses and automotive products, enabling the Company to support both its retail portfolio and B2B requirements. The facilities are supported by quality, environment and safety certifications, including ISO 9001, ISO 14001, ISO 45001 and Greenguard, reflecting the Companys focus on product quality, operational standards and sustainable manufacturing practices.

Financial Performance

Rs. in millions

Particulars	FY 2026	FY 2025	Y-o-Y (%) Change
Revenue from operations (in Rs. million)	4,193	4,262	(1.6)
Total income	4,421	4,434	(0.3)
EBITDA	754	818	(7.8)
EBITDA Margin (%)	18%	19%	(6.3)
Profit before tax	176	364	(51.7)
Profit after tax	130	292	(55.5)
Profit after tax margin (%)	3.1%	6.9%	(55.1)
Return on Net Worth (%)	2.8%	6.3%	(55.5%)

Key Financial Ratios

Rs. in millions

	FY 2026	FY 2025	Y-o-Y (%) Change	Reasons of variance
Current Ratio	2.8	3.3	-15.15%	The increase in current liabilities exceeded the increase in current assets, resulting in a decrease in current ratio.
Debt equity ratio	0.6	0.4	50.00%	The increase in total debt, primarily on account of an increase in lease liabilities, has resulted in an increase in the debt- equity ratio.
Inventory turnover ratio	1.3	1.3	30.00%	The average inventory has remained constant throughout the year, resulting in no significant change in the inventory turnover ratio.
Trade Receivables Turnover Ratio	24.3	17.2	41.28%	The reduction in trade receivables has resulted in an increase in the trade receivables turnover ratio.
Trade Payables Turnover Ratio	4.1	4.4	-6.82%	No material change
Net Capital Turnover Ratio	1.8	1.8	-2.19%	No material change
Net Profit Ratio	3%	7%	-57.14%	The net profit for the current year has decreased, resulting in a decline in the net profit ratio.
Return on Capital Employed	3.2%	5.7%	-43.86%	The decrease in EBIT and increase in capital employed have resulted in a change in the ratio.

Risk Management

Type of Risk	Risk Description	Mitigation Strategy
Economic Risk	Fluctuations in economic conditions within the Companys operating environment may create economic risks and potentially impact its sustainable growth.	The Company continuously monitors economic and market conditions and adapts its business strategy accordingly. Its focus on selective market expansion, complete home solutions and localisation helps strengthen resilience amid changing business conditions.
Concentration Risk	Stanley Lifestyles reliance on the sale of sofas and recliners exposes it to concentration risk, which could impact its operational and financial performance.	The Company has diversified its product portfolio across seating, bedrooms, dining, wardrobes, kitchens and cabinetry, while expanding its complete home solutions offering to address a broader range of customer requirements and increase wallet share.
Procurement Risk	Delays in the procurement of raw materials may result in procurement risks and potentially affect the timely delivery of products.	The Company focuses on premium sourcing of leather, wood and other materials, while increasing Indian sourcing of key raw materials, including leather, to strengthen supply chain resilience and improve cost efficiencies.
Regulatory Risk	Any changes in rules and regulations pose a regulatory risk to the Company, potentially affecting its operational efficiency.	The Company remains BIS compliant and is positioned to benefit from the implementation of the QCO. Its increasing localisation efforts and focus on quality and operational standards support compliance with the evolving regulatory environment.

Human resource

The Company considers its employees as its most valuable asset and remains committed to encouraging a skilled, motivated and engaged workforce. It continues to focus on building employee capabilities, strengthening operational effectiveness and maintaining a supportive work environment that encourages professional growth and employee well-being. The Companys growing retail footprint, manufacturing platform and expanding home solutions portfolio remain supported by its skilled workforce and in-house capabilities.

Total Number of Employees as on March 31, 2026

Internal control systems and their adequacy

The Company has established strong internal control systems to safeguard assets, prevent fraud, and ensure the accuracy of financial records. These systems support efficient business operations, compliance with policies, and the timely preparation of reliable financial reports. Regular reviews and updates are conducted, with any necessary adjustments made to align with company policies and industry standards. Senior management and auditors actively monitor the internal controls, ensuring continuous improvements. These controls strengthen governance, improve operational efficiency, and support the Companys long-term objectives

Cautionary statement

A few forward-looking comments regarding future prospects in the MD&A section contain both known and unknown risks and uncertainties that could materially affect actual outcomes. These statements, which are predicated on assumptions made using available data and may vary over time, represent the Companys current beliefs, objectives and goals as of the date they were made. Risks can also arise from unpredictable variables like shifting regulations and the state of the economy. In light of new information or anticipated developments, the Company is under no duty to update these statements. A number of variables, such as shifts in governmental policies and the state of the domestic and global economies, could affect the actual results.