Supreme Facility Management Ltd Management Discussions

Facility Management Services Market

Overview of the Global Facility Management Services Market

During the year the global economy showed mixed performance, marked by uneven momentum across regions. The global Facility Management Services (FMS) market is witnessing significant growth, driven by increasing demand for efficient management, technological advancements, and the need for cost-effective solutions in building and infrastructure management. This expansion is fuelled by the increasing focus on operational efficiency, sustainability, and the growing trend of outsourcing non-core activities to specialized service providers.

The year 2024-25 was shaped by a mix of economic and geopolitical developments that impacted global stability. While the U.S. economy remained resilient, several advanced and emerging economies faced headwinds from weak industrial activity, sluggish consumption, and political uncertainty. Trade tensions escalated, with new tariffs and shifting alliances fueling market volatility. Inflation began to moderate globally, though services inflation and supply-side disruptions kept pressures alive in some regions. At the same time, global productivity growth remained tepid, with structural bottlenecks, underinvestment in key sectors, and ongoing adjustments from the pandemic era continuing to weigh on output efficiency, especially in manufacturing-heavy economies.

Outlook

Looking ahead, the global economy is expected to maintain a modest growth pace of 3.3% in both 2025 and 2026, remaining below its pre-pandemic average. While the U.S. is projected to continue showing robust demand and investment momentum, growth in other advanced and emerging economies remains uneven, with Europe facing manufacturing slowdowns and China grappling with weak consumer confidence and a sluggish property market. Inflation is gradually retreating, aided by cooling labor markets and easing energy prices, though core services inflation remains high in some regions.

Monetary policies are diverging, with some central banks cautious about easing too quickly. Trade policy uncertainty and geopolitical risks - especially in the Middle East and Europe - add to the fragile outlook, while risks of renewed inflation or financial instability remain elevated. Medium -term growth prospects remain dim, and the IMF emphasizes the need for structural reforms and multilateral cooperation to strengthen resilience and lift potential output.

Sources: IMF

The Indian Economy

During the Year the Indian economy maintained its position as the fastest-growing major economy, with real GDP expanding by 6.4% despite a slowdown from the previous three years of over 7% growth. The moderation was mainly driven by weaker investment momentum, particularly in gross fixed capital formation, which decelerated due to reduced capital expenditure by both Union and State governments. While private sector investment remained tepid, high-frequency indicators showed signs of a rebound in the second half of the year Consumer demand was mixed - urban consumption gained traction, buoyed by e-commerce and a modest pickup in demand for household staples, while rural demand improved following a strong kharif harvest and higher rabi sowing. Headline inflation eased towards the end of the year, helped by seasonal declines in fruit and vegetable prices, yet food inflation remained persistently high, with some essential items witnessing double-digit price increases This, combined with rising rural wages and corporate salary revisions, raised concerns about potential second - order inflation effects. Despite global headwinds and geopolitical tensions, Indias services sector remained robust, green energy investments surged and the economy continued to show underlying resilience through the year.

Outlook on the Indian Economy

Looking ahead, the Union budgets strategic tax stimulus to boost economic activity. The tax exemptions announced in the budget will increase consumer spending and may boost GDP by 0.6% to 0.7%. Evolving global trade relations are expected to influence Indias economic trajectory: Indias strong trade relations with the United States, which is also the nations largest trading partner, will likely impact the nations trade balance and economic growth significantly due to the shifting global trade landscape. Q4 25 growth and the high-frequency indicators such as e-way bills, toll collections, and petroleum consumption point toward a broad-based pickup in activity. Corporate earnings, particularly in the banking, finance, and insurance sectors, are anticipated to improve, with unlisted firms also expected to post robust revenue growth. The rural economy is benefiting from a strong agricultural output, while urban consumption is being boosted by rising disposable incomes and growing demand in housing and e-commerce. Inflation is likely to remain within the RBIs comfort zone, though food prices will require close monitoring due to their volatility. On the investment front, the governments push for infrastructure and renewable energy is set to continue, with the green energy sector expected to achieve significant milestones in solar, wind, and nuclear capacity.

RBI Bulletin/Published reports

Segment Wise Performance

Supreme Facility operation can be broadly classified under the following categories :

A. Integrated Facilities Management (IFM) 63.38% of Revenue in FY 2024-25

Outsourcing of facilities management services is increasing across the industry as a strategic approach to enhance their competitive edge and achieve goals related to market retention and leadership. Our relationship with customers and presence across the various industries has provide us with deep market insights, which we believe have been key contributors to the growth of our operations and profitability. In the Integrated Facilities Management (IFM) and Other Services segment, our Company operates across a diverse range of service lines. These includes (i) soft services such as housekeeping and cleaning services, disinfecting and sanitizing services, pest control, horticulture, and facade cleaning; (ii) hard service such as maintenance, repair, overhaul and performance management of electrical, plumbing and maintenance services (iii) Staffing Service where we supply the workforce for various support service. As of FY 2024-25, we are serving a wide spectrum of industries such as manufacturing, automotive, IT/ITeS, healthcare, engineering, consumer products, FMCG, and retail. The performance of the Integrated Facilities Management (IFM) segment for the financial year 2024-25 is summarized below:

B. Other Support Services 36.62% of Revenue in FY

2024-25

Other Support Services Includes (i) Employee Transportation ("ET") services whereby we provide transportation services for the employees of our clients; (ii) Corporate Food Solution Services ("CFSS") whereby we offer catering services for employees of our corporate clients; (iii) Supply Chain Management Services ("SCM") whereby we provide Third-party logistics (3PL) service for our clients and (iv) Production Support Services ("PSS") whereby we supplying the workforce to the manufacturing companies for production, material handling, and maintenance. Considering our client penetration and industries we serve, the cross-selling of other support services leads to further growth in revenue. The performance of the Other Support Service segment for the financial year 2024-25 is summarized below: In catering our clients with our service portfolio, we are supported by our Subsidiaries and Associate. We deliver integrated solutions designed to streamline and optimize client operations across industries.

Key drivers of growth include:

- Increased Focus on Core Business Functions:

Organizations across sectors are increasingly outsourcing non-core operations such as facility management, housekeeping, security, and support services to specialized vendors. This allows them to allocate internal resources more efficiently and concentrate on strategic priorities like innovation, customer experience, and growth. IFM providers are stepping in as trusted partners, delivering reliable, end-to-end service solutions that reduce management complexity for businesses.

- Technological Integration: The rise of IoT, AI, and smart facilities has revolutionized the way buildings are managed, leading to enhanced energy efficiency, reduced operational costs, and improved asset lifecycle management.

- Sustainability: Businesses are increasingly adopting green building technologies and energy-saving solutions, with an emphasis on reducing carbon footprints, waste management, and water conservation.

- Cost Optimization and Flexible Workforce Solutions: In uncertain or cost-sensitive economic environments, businesses look for ways to reduce fixed costs. Outsourced IFM and business services provide a variable cost model, reducing the burden of in-house hiring, training, and supervision. Service providers also offer flexibility in workforce deployment, allowing clients to scale up or down based on demand fluctuations

- Regulatory and Labor Law Formalization:

Increasing enforcement of labour laws, occupational safety norms, and statutory compliance (such as PF, ESI, minimum wages, and contract labour regulations) is making it difficult for unorganized or informal players to operate. Organized IFM and business service providers, with systems in place to ensure compliance and transparency, are gaining credibility and market share.

- Shift in Global Manufacturing to India: Amid rising trade tensions, higher tariffs and a global push to diversify supply chains, many multinational companies are reducing their reliance on China and turning to India as a key manufacturing destination. The Indian governments push through initiatives like ‘Make in India and production-linked incentives (PLIs) is further accelerating this shift. As a result, several new industrial and manufacturing facilities are being established across the country. These large-scale operations require professional management of infrastructure, utilities, safety and workforce amenities—creating a significant growth opportunity for Integrated Facilities Management (IFM) and business services providers

- Global Expansion: Rapid urbanization, expansion of corporate offices, industrial parks, and retail spaces worldwide have increased the demand for comprehensive facility management services.

SWOT Analysis Strength

- Broad, unified service delivery – Supreme Facility offers a comprehensive range of services like housekeeping, pest control, mechanical, electrical, plumbing, and other support service i.e. Employee transportation, Production support service, Supply chain and Corporate food solution, catering to major industries.

- Established market position- With vast experience, Supreme has evolved into a prominent player in the Integrated Facilities Management (IFM) and other Support Services (OSS) sectors.

- Client Retention – With quality of service 90% of clients is retained for over 5 years which helps sustainable growth.

Weakness

- Cost Pressures & Competition: Intense competition leading to pressure on pricing and margins from unorganized sector and competition

- High Employee Attrition: High attrition among staff could lead to increased hiring costs and affects service consistency.

Financial Statements Financial Statements

- Inflexible Service Contracts: Rigid contract terms may make it difficult to adapt to changing client needs or offer flexible solutions, limiting the ability to upsell or cross-sell services.

Opportunities:

- Increase in Demand for Integrated Solutions:

Industries are increasingly seeking for comprehensive, integrated solutions for facility management, cleaning and other business support services under one roof, which are creating opportunities for service provider who are providing a bundle of end-to-end services.

- Increased Demand for Specialized IFM Service offerings: Across the industries there is increase in demand for specialized services, it can tap into the growing demand for specialized IFM services, offering tailored solutions for sectors like healthcare, FMCG, Retail and manufacturing and engineering, ensuring industry-specific needs being met and operational efficiency.

- Growth of Real Estate, IT Parks, GCCs, E-commerce and Warehousing: The boom in segment has create opportunities for not just IFM, other Support services business aiming provide specialized services for this segment.

Threats:

- Economic Downturns: Economic recessions can lead to reduced spending by corporates on services.

- Further Industry Fragmentation: Increased Industry Fragmentation would lead to margins to further fall due to increased pricing pressure and unviable contracts.

- Risk of Changes in Labor Laws: Frequent changes in labor laws and regulations pose a risk to Supreme facility, as non-compliance or delayed adaptation to new labour requirements can lead to legal issues, increased costs, and potential disruptions in service delivery.

Significant Factors influencing Results of Operations and Financial Condition

We believes that the following factors have significantly affected our results of operations and financial condition during the periods under review and may continue to affect our results of operations and financial condition in the future: Improvement in Margin: We have seen improvements in our EBITDA margins driven by increased on the revenue and our focus on the improvement of margin from existing business and acquisitions of new profitable contracts. This margin expansion has been further supported by our continued investment process automation, which have enhanced operational efficiency, reduced manual dependencies, and streamlined service delivery. These initiatives have collectively contributed to a consistent upward trend in profitability. Going forward we continue to maintain the current margins and grow.

Presence in Industrial IFM : Industrial FM, which includes managing customer manufacturing plants, and other industrial-related facilities, continues to be a significant revenue driver for us. The IFM segment as a whole is highly diversified across various customer sectors, which reduces concentration risk. This strong focus on Industrial FM sets us apart from other players in the market, acting as a key differentiator. We expect this contribution to remain robust and continue to be a competitive advantage in the years ahead.

Diversified Service portfolio – We offer entire gamut of services starting from housekeeping and facility management, production support, warehousing, Employee transportation, Corporate food solution etc., are all provided under one umbrella of Supreme facility which provides customers ease of doing business.

Our Strategy Going Forward:

- Retain, strengthen and grow the customer base: We emphasis deepening relationships with customers through long-term, renewable contracts, creating a stable revenue model. Our strong brand and quality service enables customer retention and cross-selling.

- Grow market share in key segments: We aim to expand in key segments like Retail and industrial facilities through customer-focused mining and business development. Our 7+ member sales and marketing team drives new customer acquisitions and strengthens existing relationships.

- Geographical expansion – To expand the market presence we are expanding the business in North and South through acquisition of the client and Inorganic growth

- Introduce new products and services: To expand our market share, we will introduce new products and services targeting lucrative segments, leveraging Indias economic growth and initiatives like Make in India. We plan to achieve this through organic development, partnerships, and acquisitions, broadening our offerings in integrated facilities management and other support services.

Internal Control Systems and their Adequacy

- Our company maintains all its records and routes all approvals using an ERP system.

- Our company has laid down adequate systems and well-drawn procedures for ensuring internal financial controls. Internal auditors are present at the audit committee meetings where internal audit reports get discussed alongside management comments and the final observation of the internal auditor

- The Board of directors have adopted various policies put in place controls and monitoring measures for ensuring the orderly and efficient conduct of the business of the company, the safeguarding of the assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

- The statutory auditors have also expressed satisfaction with their audit report to the shareholders.

- The audit trail feature, as mandated by the Companies (Accounts) Rules 2014 (as amended) with effect from 1 April 2023, has been enabled in the accounting software used by the Company. Our Company also has set up practices for daily backup of the entire database and applications.

Discussion on Standalone Financial Performance with Respect to Operational Performance

Particulars	Standalone (In Lacs)
	March 31, 2025	March 31, 2024
Revenues from Operations	32,990.90	29,431.38
Other Income	166.20	132.30
Total Income	33,157.10	29,63.68
Profit Before Tax, Finance Charges/Income, depreciation, and Exceptional Items	3,294.64	2,593.70
Finance Charges	1,111.23	869.41
Provision for Depreciation	1,299.43	956.54
Exceptional / Prior Period Items	0	295.53
Profit Before Tax	883.98	472.22

Material Developments in Human Resources/ Industrial Relations Front, including Number of People Employed

The relationship between the management and employees remained constructive throughout the year under review. As of the reporting date, the Company employs a total of 8,540 (Standalone) individuals across various levels and functions.

Financial Ratios

The details of significant changes (ie., change of 25% or more as compared to the immediate previous financial year) in key financial ratios, along with detailed explanations, therefore:

Ratio	Formula	As on March 31, 2025	As On March 31, 2024	% of Variance	Reason for Variance
Current Ratio (Times)	Current assets/Current liabilities	1.89	1.33	42%	The increase in Current Ratio is due to proceeds from IPO which is invested in short term Deposit
Net Profit Ratio (%)	NPAT/Total revenue	2.05%	1.18%	74%	Due to Prior Period expenses provision of the Employee Gratuity
Debt Equity Ratio (Times)	Total debt/Shareholders equity	1.34	2.63	49%	Due to IPO Proceeds
Return On Equity	Net Income/Shareholders Equity	8%	20%	-60%	Due to IPO Proceeds
Inventory Turnover	COGS/Average Inventory	28.12	46.02	-39%	It has changed due to change in the Business Mix
Trade Payable Turnover	Total Purchases/ Average Trade Payable	8.55	5.63	52%	It has changed due to change in the Business Mix
Net Capital Turnover	Total Sales/ Shareholders Equity	3.91	9.18	-57%	Due to IPO proceeds
Return on Capital Employed	EBIT Total assets - total current liabilities	12.92%	20.57%	-37%	Due to IPO proceeds