Supreme Facility Management Ltd Management Discussions

Facility Management Services Market FY 2025-26

1. Overview of the Global Facility Management Services Market

During FY 2025-26, The global economy entered fiscal year 2025-26 navigating a complex and evolving landscape shaped by elevated trade barriers, persistent policy uncertainty, and a fresh geopolitical shock-the outbreak of war in the Middle East in late February 2026. This conflict has emerged as the dominant macro risk of the year, threatening to reverse the modest momentum that had been building through technology-driven investment and accommodative financial conditions. Global growth is projected at 3.1% in 2026 and 3.2% in 2027, below the historical average of 3.7% (2000-19). The 2026 forecast has been revised downward by 0.2 percentage point versus the January 2026 WEO Update. Global headline inflation is expected to rise to 4.4% in 2026 before declining to 3.7% in 2027, with both years revised upward. Absent the Middle East

conflict, growth would have been revised marginally higher to 3.4%. Trade policy fragmentation continues to weigh on global growth. Trade-related disputes remain a material risk independent of geopolitical developments. The International Monetary Funds (IMF) Commodity Special Feature highlights rare earth elements as a specific friction point, given their critical role in technology and defence supply chains-a potential flashpoint for further trade restrictions.

Fiscal buffers in many economies are already stretched, limiting the scope for counter-cyclical support. The IMF warns that scaling up defence spending, while supportive of short-term activity, risks crowding out social expenditure and stoking inflationary pressures- creating a difficult policy trade-off. Rising public debt and wider fiscal deficits could push up long-term interest rates and tighten broader financial conditions.

World Economic Outlook Growth Projections:

\u2018 Growth Projections (%)	2025	2026	2027
Global Economy	3.4	3.1	3.2
Advanced Economies	1.9	1.8	1.7
Emerging Markets and Developing Economies	4.4	3.9	4.2

*Note these estimates are on Current Year Basis and not Financial Year basis.

Outlook

The global economic outlook remains challenging, with medium-term growth expected to stay modest due to rising geopolitical tensions and increasing fragmentation across countries. In the absence of strong policy support or major technological breakthroughs, global GDP is projected to grow at around 3.1% over the medium term, below the prepandemic average of 3.7%, led by slower growth in China and moderation across other key regions including Asia, the Middle East, Africa, North America, and Europe. A gradual slowdown in globalization is likely to impact growth through several channels. Lower trade may reduce income growth and poverty reduction in developing economies. Tighter migration could affect remittance flows, while higher uncertainty may limit investment and capital flows. Overall, reduced movement of goods, capital, and people may slow innovation and productivity, leading to a structurally weaker global growth outlook.

Sources: IMF

Global Macroeconomic Highlights

• Divergent Monetary Policy: Major central banks shifted from aggressive tightening to cautious rate cuts as inflation moderated, though financial conditions remained sensitive to trade tariffs and debt levels.

• Technology & AI Acceleration: Rapid adoption of AI, IoT, and automated maintenance platforms partially offset structural labor bottlenecks in industrial and commercial real estate.

• Trade Dynamics: Shifting global supply chains (China + 1 strategy) accelerated investments into alternative manufacturing hubs, notably in South and Southeast Asia.

2. The Indian Economy

During FY 2025-26, India solidified its position as the worlds fastest-growing major economy, with Real GDP accelerating to 7.6% (up from 7.1% in FY25) despite elevated global trade policy uncertainty and the impact of U.S. tariffs on merchandise exports.

Economic activity was bolstered by strong domestic consumption, robust services exports, and sustained government capital expenditure on physical and digital infrastructure.

Macroeconomic Snapshot (India FY 2025-26)

Metric	Value / Projection
Real GDP Growth Rate	7.6%
Average CPI Inflation	2.6% - 3.1% (RBI Target Comfort Zone)
Key Growth Drivers	Commercial Leasing, GCCs, PLI Schemes
Sectoral Standouts	IT/ITeS, BFSI, Manufacturing, FMCG

Key Economic Drivers in FY 2025-26

* Disinflation & Consumer Demand: Consumer Price Index (CPI) inflation dropped significantly to 2.6%, driven by lower food prices and stabilized supply chains, which reignited urban consumption and boosted disposable income.

* Commercial & Industrial Boom: India witnessed record office space absorption led by Global Capability Centres (GCCs) accounting for 35%-40% of prime commercial leasing.

* Green Energy & Infrastructure: Capital allocation towards solar, wind, green hydrogen, and industrial parks created significant demand for specialized, high-spec facilities management.

Fiscal Position:

The government maintained its fiscal consolidation path, narrowing the general government deficit from 7.7% of GDP in FY25 to 7.4% in FY26. Revenue remained strong - a sharp rise in non-tax revenues offset the impact of income tax cuts and GST rationalisation. Spending growth was modest in both current and capital expenditure. However, the public debt-to-GDP ratio edged up marginally from 84.1% to 84.5% due to weak nominal GDP growth, compounded by a downward revision of nominal GDP following Indias base-year rebasing (2011-12 g 2022-23 in February 2026).

Outlook on the Indian Economy

Indias growth outlook remains strong, supported by reforms, improving formal employment, and a stable fiscal position. However, rising Middle East tensions pose near-term risks. GDP growth is now expected at

6.6% in FY27 (vs. 7.2% earlier), as higher energy prices and global uncertainty impact consumption, investment, and exports. Inflation is likely to rise by ~90 bps, while higher subsidy spending may slow government consumption. The current account deficit is projected at 1.8% of GDP due to higher energy imports, and the fiscal deficit may increase to 7.6% before gradually improving. Growth is expected to recover to -7.2% in FY28, supported by easing energy conditions. Indias strong macro fundamentals-healthy forex reserves, a credible central bank, and continued reforms-provide resilience. Key priorities remain energy diversification, renewable expansion, stronger trade ties, and fiscal discipline.

Source: World Bank Market Opportunities

India enters FY27 as the fastest-growing major economy globally, with GDP growth expected to sustain at -6.5% overthe medium term, supported by resilient domestic demand, a revival in private capex, and continued public infrastructure spending. The Government of India has budgeted capital expenditure at over 11 lakh crore (-3.4% of GDP) in FY26, reflecting a sustained infrastructure-led growth strategy. Additionally, Production Linked Incentive (PLI) schemes across 14 sectors, the National Logistics Policy, and the PM Gati Shakti master plan are accelerating industrialisation, logistics efficiency, and supply chain integration. Against this backdrop, the Integrated Facilities Management (IFM) and Other Support Services (OSS) industry is expected to benefit from multiple structural tailwinds:

• Formalization & Compliance led Outsourcing: Increasing regulatoryenforcement (labourcodes, ESG disclosures, workplace safety norms) and rising compliance complexity are accelerating the shift from unorganised to organised service providers. Large enterprises are prioritising governance, auditability, and service standardization, driving demand for scaled IFM players.

• Manufacturing & Industrial Expansion: Under initiatives such as PLI, Make in India, and China + 1, India is witnessing strong momentum in electronics, semiconductors, automotive, defence, and specialty manufacturing. This is leading to incremental demand for industrial facility management, technical services, shopfloor manpower, and warehouse operations.

• Technology-led Transformation: Adoption of IoT- based monitoring, AI-driven predictive

maintenance, robotics, and digital workforce management is improving service delivery efficiency and enabling margin expansion. Clients are increasingly favouring partners with technology-enabled execution capabilities. Sectoral Growth Tailwinds: Expansion in healthcare, aviation, hospitality, and organised retail is driving demand for specialised, compliance-intensive services such as infection control, passenger handling, and high-frequency maintenance.

• Urbanisation & Policy Support: Government led initiatives such as Smart Cities Mission, AMRUT, and continued urban infrastructure development are increasing the scale and complexity of assets requiring professional facility management.

3. Segment-Wise Performance (FY 2025-26)

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

A. Integrated Facilities Management (IFM) 59% of Revenue in FY 2025-26

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 2025- 26, we are serving a wide spectrum of industries such as manufacturing, automotive, IT/ITeS, healthcare, engineering, consumer products, FMCG, and retail.

B. Other Support Services 41% of Revenue in FY2025- 26

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) wherebywe 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 ourclient penetration and industries we serve, the crossselling of other support services leads to further growth in revenue.

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.

4. Key Market Growth Drivers for FY 2025-26

* 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.

* Expansion of GCCs and Commercial Real Estate: The rapid setup of Global Capability Centres across Tier-1 and Tier-2 cities in India generated steady long-term contracts for IFM providers.

* Adoption of Smart Building Technologies (PropTech): Integration of IoT sensors, energy analytics, and automated work-order tracking reduced facility downtime by up to 25% and lowered utility bills for corporate clients.

* Formalization & Labor Compliance: Strict regulatory enforcement regarding statutory benefits (PF, ESI, minimum wages) accelerated client transition from unorganized local vendors to compliant, organized IFM operators.

* ESG & Green Building Mandates: Enterprise mandates around net-zero targets boosted demand for waste circularity, water recovery systems, and energy audits within IFM contracts.

* 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

5. SWOT Analysis Strengths

Diversified Single-Window Solutions: Broad operational spectrum ranging from housekeeping to 3PL logistics and industrial shop-floor support.

High Client Retention (>90%): Deep domain relationships and 5+ year contract histories ensure predictable, recurring annuity revenues.

Industrial FM Specialization: Market differentiation through expertise in high-demand manufacturing and industrial utility management.

Weaknesses

Attrition & Hiring Costs: Entry-level staff turnover in soft services requires continuous recruitment and training investment.

Pricing Pressures: Competitive bidding in commoditized service lines compresses initial operating margins.

Opportunities

Manufacturing Boom (Make in India): Supply chain diversification into India offers growth in managing newly commissioned manufacturing facilities. Cross-Selling Potential: Expanding corporate food solutions and employee transport across existing IFM client bases.

Threats

Regulatory Compliance Shifts: Rapid changes in regional labor rules, minimum wage hikes, or statutory caps impact fixed-price contracts.

Fragmented Market Competition: Regional unorganized players undercutting pricing with noncompliant operational models.

6. Significant Factors influencing Results of Operation 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 ofdoing business. Exceptional Items - During the year, the Company has fully written off its investment in Zipgo Technology India Private Limited amounting to INR353.66 lakhs (previous year: carried at cost INR 353.66 lakhs). The management has assessed the decline in the value of the investment to be other than temporary in accordance with AS 13 — Accounting for Investments. The amount has been presented as an Exceptional Item on the face of the Statement of Profit and Loss in compliance with the format prescribed under Schedule III, Division I to the Companies Act, 2013, and AS 5.

7. 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.

8. 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

9. Key Financial Ratios & Performance Metrics

Discussion on Standalone Financial Performance with Respect to Operational Performance

Particulars	Standalone (In Lacs)
	March 31, 2026	March 31, 2025
Revenues from Operations	42,041.03	32,990.90
Other Income	120.60	166.20
Total Income	42161.63	33,157.10
Profit Before Tax, Finance Charges/Income, depreciation and Exceptional Items	3745.51	3,294.64
Finance Charges	1186.97	1,111.23
Provision for Depreciation	1716.74	1,299.43
Exceptional / Prior Period Items	353.66	0.00
Profit Before Tax	488.14	883.98

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 12,019 (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, 2026	As On March 31, 2025	% of Variance	Reason for Variance
Return on Equity	Net income Shareholders equity	10%	8%	30.39%	Due to Exception Item of Investment written off.
Net Profit Ratio	NPAT Total revenue	1.40%	2.05%	-31.40%

Due to Exception Item of Investment written off. 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 ofthe entire database and applications