Tirupati Foam Ltd Management Discussions

DISCLAIMER

Readers are cautioned that this discussion and analysis contains forward looking statements that involve risks and uncertainties. The company undertakes no obligations to publicly update or revised any forward-looking statements, whether as a result of new information, future events, or otherwise, Actual results, performance or achievements, risks and opportunities could differ materially from those expressed or implied in these forward-looking statements.

GLOBAL ECONOMY

The global economy displayed stability in CY 2025-2026, successfully overcoming early concerns about a potential downturn caused by supply chain disruptions, geopolitical uncertainties and inflationary pressures. Posting a steady growth rate of 3.4% for the year, the global economy managed to sustain its momentum despite several headwinds. The US economy showcased resilience with high employment rates and impressive corporate earnings. Europe, despite facing political and economic challenges, navigated uncertainties and is positioned for a robust recovery. Meanwhile, China, having reopened its economy post-COVID, is actively addressing overcapacity and financial strains in the real estate sector, laying the groundwork for sustainable and balanced economic growth.

Global consumer price inflation stood at approximately 4.1% in CY 2025 and is expected to increase marginally to around 4.4% in CY 2026, reflecting the lagged impact of monetary tightening by major central banks and ongoing supply-side pressures.

Growth trends remained uneven across regions, with advanced economies recording modest expansion of 1.9% in CY 2025. This was led by the United States at 2.1%, supported by resilient investor sentiment and stable policy conditions, although employment growth showed signs of moderation. Europe expanded by 1.4%, demonstrating stability despite ongoing trade related pressures. In contrast, emerging and developing economies outperformed, registering growth of 4.4% in CY 2025. China remained a key contributor, with growth of 5% driven by public spending and export activity, while several smaller economies continued to face constraints arising from currency pressures, limited fiscal capacity and elevated debt levels.

[Source: IMF World Economic Outlook, April 2026].

INDIAN ECONOMY

During the year under review (FY 2025-2026), Indias GDP grew at a rate of 7.7%. Despite global economic turbulence and geopolitical conflicts in parts of Europe and the Middle East, Indias economy demonstrated significant resilience. This impressive expansion was fuelled by strategic government initiatives and a steady increase in exports.

Inflation has remained contained, with the Consumer Price Index (CPI) at approximately 3.2% under the revised 2024 base year. This downward trend in inflation is bolstering positive consumer sentiment, setting the stage for heightened consumer spending across key retail categories.

Although urban consumption exhibited a plateauing trend, rural consumption remained robust supported by strong agricultural performance. On the other hand, the services sector continued to be a key driver of growth.

Government-aided structural reforms, deregulation efforts and infrastructure investments are further strengthening market confidence and creating a conducive environment for businesses. With a flourishing services sector, digital growth and increasing financial inclusion, India continues to be a vibrant marketplace for consumer brands aiming to scale.

Indian mattress industry

Indias mattress market is growing on the back of urban housing demand, rising disposable income, and a shift from unorganized to organized brands. E-commerce, modern retail, and branded sleep products are all helping the market become more premium and more visible.

Further the Indian mattress market is comprised of PU Foam, Rubberised Coir, and Spring Mattresses. Consumer-driven factors such as increasing population, rising urbanisation, and improvement in institutional infrastructure are the key growth drivers for the growth of the mattress market. Branded mattress players have seen an increasing market share due to their constant efforts and investments to increase consumer awareness about premium and quality mattresses and development of retail infrastructure and marketing activities.

An increasing number of residential units is propelling the demand for mattresses all over the country. Residential consumers accounted for the bulk of the share, while the remaining was shared by institutional customers, which include hotels, hospitals and educational institutions. Among the different sizes available, king-size mattresses are the most preferred and comfort is the most crucial factor that determines their dominance in the market An increasing number of residential units is propelling the demand for mattresses all over the country. Residential consumers accounted for the bulk of the share, while the remaining was shared by institutional customers, which include hotels, hospitals and educational institutions. Among the different sizes available, king-size mattresses are the most preferred and comfort is the most crucial factor that determines their dominance in the market.

Opportunities, Threats, Risks, Concern& Future Outlook

There is considerable scope for growth of foam industry because of increased usage of foam products in day-today life. However competition from importers and unorganized sector has been increasing day by day. Therefore the Indian industry will have to really strive hard to sustain against global competition as well as competition from unorganized markets. The steep competition has led to reduction in prices and increased expenses on promotional front. Therefore, the Company has to resort to an aggressive marketing campaign and thereby fetching higher volumes in the products positioned in lower and middle category segment at one hand and the higher realization from the products positioned in premium segment.

Opportunities

1. Product Differentiation

2. E-Commerce

3. Export Potential

4. Rural Market

Threats

1. Transportation and warehousing

2. Raw Material Prices

3. Economic Stability

4. Counterfeit Products

Segment Wise Performance

As such the Company deals only in one segment – Flexible polyurethane foams, hence there is no specific differential information pertaining to this section.

Financial Performance

The companys ability to maintain its cash flows and profits in this uncertain environment reflects hard work done by executive directors of the company and its leadership in domestic sales.

The Net Sales including other income of Rs. 9537.66 Lacs as compared to Rs. 10652.68 Lacs for the Previous Year. The Profit before financial cost, Tax and Depreciation was Rs. 257.03 Lacs for period under review as compared to Rs. 282.19 Lacs for the Previous Year. The Net Profit after making the provision for Depreciation and Taxation stood at Rs.192.60 Lacs as against Rs. 213.75 Lacs for the previous year.

Internal Control Systems and Their Adequacy

The Company has adequate Internal control systems commensurate with its size and operations to ensure orderly and efficient conduct of business while safeguarding the assets, quality, safety, procurement, finance and accounts and reducing and detecting error.

The Company also has appointed an external firm of Chartered Accountants to supplement the efficient Internal Audit.

Material Development in Human Resources and Industrial Relations Front

The Company routinely undertakes employee development activities keeping in mind the professional requirements of the employees as well as the growth of the Company.

The Industrial Relations were cordial throughout the year with no incidence of strike or lockouts.

CAUTIONARY STATEMENT

Statements in this Management Discussion & Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic developments in the country and improvement in the state of capital markets, changes in the Government regulations, tax laws and other status and other incidental factors.

b) Change/Appointment/Re-appointment of Directors/ KMP

In accordance with the provisions of the Companies Act, 2013 and rules made thereunder and pursuant to the Article of Association of the Company, MR. ROSHAN P SANGHAVI (DIN:01006989), MR. SATISH A MEHTA (DIN:01007020) & MR. DEEPAK T MEHTA (DIN:00156096) Executive Directors of the Company retires by rotation as Director of the company at the ensuing 39th Annual General Meeting and being eligible offers themselves for re-appointment to the Board as Directors of the Company.

MR. MANISH R PATEL (DIN: 09547012) who were appointed as Non-Executive Independent Director and whose term would expire in next Financial Year 2027-2028 and being eligible offers themselves to be re-appointed for their Second Five Year Term at 39th Annual General Meeting of the company. Hence recommended to the members.

Profile and other information of the aforesaid Director, as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Notice convening the 39th Annual General Meeting.

The above proposal for reappointment forms part of the Notice of the 39th Annual General Meeting and the relevant resolution is recommended for your approval therein.

c) Board Evaluation

A formal evaluation mechanism is in place for evaluation the performance of the Board, committees thereof, individual directors and the Chairman of the Board. The evaluation of board is carried out annually as per the provisions of the Companies Act, 2013, rules thereof and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Performance evaluation of each Director is based on the criteria as laid down from time to time by the Nomination and Remuneration Committee. Criteria for performance evaluation includes aspects such as attendance for the meetings, participation and independence during the meetings, interaction with Management, Role and accountability to the Board, knowledge and proficiency and any other factors as may be decided by the Nomination and Remuneration Committee. Further, performance evaluation of an Executive Director is done based on business achievements of the company.

Matrix setting out the skills/expertise/competence of the Board

The Board of Directors have identified the following Core Skills/Expertise/Competencies as required in the context of its business(es) and sector(s) for it to function effectively: