Superhouse Ltd Management Discussions

Macroeconomic Overview:-

The year 2024-25 witnessed a stagnant market, internationally. The overall exports of India during 2024-25 were nominally increased from US$ 437.11 billion to US$ 437.41 billion. Exports of leather industry increased from US$ 4.69 billion to US$ 4.83 billion, registering an increase of 3.01% during the year. The increase was registered in all categories of leather and leather products, except finished leather & Footwear Components. Saddlery and Harness shown the positive growth of 12.75%, Non-Leather Footwear increased by of 11.63%, Leather Goods increased by 7.04% and Leather Garments increased by 4.23%. Footwear and leather goods hold a major share of 68.91% of the total export of leather and leather products with an export value of US$ 3,327.36 Million.

The major markets for Indian leather & leather products are USA with a share of 21.65%, Germany at 11.24%, UK at 9.07%, Italy at 6.24%, Netherlands at 5.12%, Spain at 5.08%, France at 4.83%, U.A.E. at 2.60%, China at 2.41%, Belgium at 2.27%., Poland at 1.95 %, Vietnam at 1.90%. ,Australia at 1.53%, Japan at 1.46% , Denmark at 1.15%, Hong Kong at 1.12%, Russia at 1.11%, Canada at 1.08%, Portugal at 1.03% and Korea Rep. at 0.88% and These 20 countries together accounted for nearly 83.72% of Indias total leather and leather products exports.

Industry Structure and Development:-

The leather industry holds a prominent place in the Indian economy. The sector is known for its consistency in high export earnings. With total annual exports of over US$ 437.41 billion, export of leather and leather products stood at US$ 4.83 billion during 2024-25.

The domestic leather industry is bestowed with an abundance of raw material resources, as India is endowed with 20% of the worlds cattle and buffalo stock and 11 % of goat and sheep stock. Added to this are key underlying strengths such as skilled manpower, innovative technology, increasing industry compliance to international environmental standards and dedicated support of allied industries. The leather industry is an employment-intensive sector, providing livelihood opportunity to over 4.42 Million people, mostly from the weaker sections of the society. Womens employment is predominant in the leather products sector with about 30% of women being the workforce.

India is the second largest producer of footwear and leather garments in the world. The leather industry is spread across diverse categories, namely finished leather, footwear, footwear components, leather garments and leather goods, including bags, saddlery, harness and leather gloves. As per DGCI&S

exports data, export of leather and leather products for the year 2024-25 stood at US$ 4828.97 Million during the year 2024-25

Opportunities and Threats: -

The Government of India had identified the leather sector as a focus sector in the Indian Foreign Trade Policy in view of its immense potential for export growth prospects and employment generation. Accordingly, the government is also implementing various special focus initiatives under the Foreign Trade Policy for facilitating the growth of the leather sector with the implementation of various industrial developmental programs as well as export promotional activities, and keeping in view the past performance and industrys inherent strengths of skilled manpower, innovative technology, increasing industry compliance to international environmental standards and dedicated support of the allied industries, the Indian leather industry aims to augment production, thereby enhancing exports and resultantly creating additional employment opportunities.

However, despite the growth prospects, challenges abound, including entry of multinationals in the domestic market, international price fluctuation, stringent pollution norms such as zero liquid discharging policy of the government, fast changing fashion trends and cutback of government incentives.

Segment-wise Performance:-

The segment-wise performance of the company during the year

is as under :-
Segments Turnover
Leather and Leather Products :	Rs. 440.69 Crores (previous year Rs. 465.39 crores)
Textile Garments :	Rs. 76.33 Crores (previous year Rs. 64.33 Crores)

Domestic Sales :

The company manufactures and sells its products in the domestic market under the renowned Allen Cooper and Double Duty brands.

Outlook :-

The Companys products are well-accepted in overseas and Indian markets. The company is focusing to further expand its geographic presence into new countries and also deeper penetration in existing markets through aggressive marketing and distribution. The company is making efforts to penetrate into the fast-growing sectors of sports and kids shoes market. The company is also harnessing e-commerce platforms to expand its marketing activities in the domestic market.

Risk and Concerns

The major raw material for the leather industry is raw hide/ skin. Leather is a natural product and its prices and availability fluctuate from time to time. The company possesses vast experience in sourcing raw materials for its tanneries and leather products divisions from India and outside, which help in keeping prices and availability under check. The output of raw hides/skin also depends upon personal skills of purchasers and technicians, which are being taken care of by the experienced personnel of the company. Substantial revenue of the company is generated in foreign exchange. Adverse foreign exchange rates may affect the profitability of the company. However, experienced professional are keeping close vigilance over movement in currency rates and taking action accordingly to mitigate the risks.

Cautionary Statement :-

Statement in the Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectation, or prediction may be forward-looking statement. Further, the performance of the company is also dependent on domestic and global economic conditions, government and regulatory policies on which the company is not having any control.

Internal Control System and their Adequacy :-

The company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from misuse or disposition and those transactions are authorized, recorded and reported correctly. Proper checks and controls have been introduced for all the incoming and outgoing materials. The Audit Committee and Internal Audit Department regularly review the financial and operating controls at all locations of the Company. The internal control

is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

Financial Performance with respect to Operational Performance:-

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and Generally Accepted Accounting Principles in India. The company has achieved sales and other income of Rs. 517.02 crores during the year, against Rs. 529.72 crores reported last year. Profit before tax was Rs. 17.93 crores and profit after tax was Rs. 13.41 crores during the year, as compared to profit before tax of Rs. 10.30 crores and profit after tax of Rs. 7.92 crores reported during the previous year. The net block of the company as at 31.03.2025 was Rs. 203.88 crores, against Rs. 210.19 crores as at 31.03.2024. The net current assets as at 31.03.2025 were Rs. 148.59 crores, as against Rs. 132.06 crores as at 31.03.2024.

Further, the company achieved consolidated sales and other income of Rs. 677.15 crores against Rs. 677.28 crores reported during the previous year. Consolidated profit before tax was Rs.11.66 crores and profit after tax was Rs. 7.66 crores during the year under review, as compared to Rs. 15.31 crores and Rs. 11.72 crores, respectively, during the previous year. Further, consolidated net block as at 31.03.2025 was Rs. 247.29 crores, against Rs. 252.35 crores as at 31.03.2024. Consolidated net current assets as at 31.03.2025 stood at Rs. 205.83 crores as against Rs. 198.05 crores as at 31.03.2024. Detailed information on financial performance is given in the appended annual financial statements.

The summarized financial performance during the year is as under:-

Key Financial Summary:-

The key financial summary of the Company is as under:-

(Rs.in lacs)

Particulars	Standalone		Consolidated
	2024-2025	2023-2024	2024-2025	2023-2024
Sales	50490.78	52060.69	66499.47	66530.95
Other Income	1211.32	911.35	1215.28	1197.19
PBT	1793.10	1030.56	1166.09	1531.24
PAT	1341.33	792.57	765.62	1172.58
Share Capital	1102.50	1102.50	1074.97	1074.97
Other Equity	38249.97	37042.28	44580.28	43789.59
Non-controlling Interest	-	-	2337.07	2314.28
Net Worth	39352.47	38144.78	47992.32	47178.84
Earnings per Share	12.17	7.19	8.48	11.61

Key Financial Ratios:-

The key financial ratios of the Company along with explanation for significant changes are as under:-

S. No.	Particulars	2024-25	2023-24
1	Debtor Turnover Ratio	3.55	3.47
2	Inventory Turnover Ratio	3.56	3.44
3	Interest Coverage Ratio	4.08	3.32
4	Current Ratio	1.62	1.61
5	Debt Equity Ratio	0.35	0.36
6	Operating Profit Margin	8.41%	7.06%
7	Net Profit Margin	2.80%	1.58%
8	Return on Net Worth	7.20%	5.60%

There is no significant change in the financial ratios.

Industrial Relations and Human Resources Development:-

The relations with employees continued to be cordial during the year. The Directors record their appreciation for the sincere and committed efforts put in by all categories of employees during the year. There were 1619 permanent employees with the company as on 31st March, 2025.