UFM Industries Ltd Management Discussions

INDIAN ECONOMY AND INDUSTRY AT A GLANCE

The global economy in FY 2025-26 remained resilient with growth of around 3.2 - 3.3%, supported by AI-driven investment and accommodative financial conditions. Advanced economies recorded modest expansion, while emerging markets continued to show stronger momentum. Inflation moderated globally, though risks from trade tensions, geopolitical uncertainties, and high debt levels persist. Overall, the global outlook remains steady but uneven, with medium-term prospects hinging on structural reforms and productivity gains from technological adoption.

During FY 2025-26, the Indian economy demonstrated resilience with GDP growth of 7.4% supported by robust domestic demand, lower inflation, and strong services exports. Industry and agriculture recorded broad-based growth, while infrastructure investment continued to anchor long-term competitiveness. Fiscal consolidation and stable external balances further strengthened macroeconomic fundamentals. Despite global uncertainties, Indias medium-term growth potential remains around 7%, positioning the country as one of the fastest-growing major economies.

Looking ahead, India is expected to maintain its position as one of the fastest-growing major economies. The momentum is anticipated to be driven by sustained government investments in infrastructure, a growing middle class, and increasing digital adoption. The Governments reforms aimed at boosting manufacturing, enhancing productivity and improving ease of doing business will play a crucial role in ensuring long-term sustainable growth. Within this, private consumption will play an important role. The ability to navigate global factors such as geopolitical developments, market sentiment shifts, and currency fluctuations will be crucial for maintaining growth momentum.

During the year under review, the company has seen improvement in capacity utilization as well reducing cost through better synergy between sales and logistics. Your company has seen considerable increased in its market share in the state of Mizoram. Company has also retained leadership position in the bakery and high quality flour segment in Barak valley. Company is seeing good progress in the supply chain and logistics bringing overall cost effectiveness

The economic and industrial landscape for FY 2026-27 presents a mix of promising opportunities and notable threats. On the opportunity side, India is well-positioned to benefit from global supply chain diversification, as companies seek alternatives to traditional hubs. The governments continued emphasis on infrastructure development, renewable energy, and digital transformation will create new avenues for investment and productivity gains. The demographic dividend, with a young and expanding workforce, coupled with rising middle-class consumption, is expected to sustain domestic demand. Policy initiatives such as the Production Linked Incentive (PLI) schemes, financial sector reforms, and targeted support for manufacturing and services are likely to enhance competitiveness and attract foreign capital.

At the same time, several threats could temper this outlook. Geopolitical tensions and trade protectionism may disrupt global markets and supply chains, impacting exports and investment flows. Commodity price volatility, particularly in energy and food, poses risks to inflation and household consumption. Domestically, climate-related challenges such as erratic monsoons and

extreme weather events could affect agricultural output and rural demand. Rising regulatory compliance requirements, infrastructure bottlenecks, and skill gaps in advanced technologies may also constrain industrial growth. Furthermore, global financial vulnerabilities, including elevated debt levels and tightening liquidity, could influence capital availability and investor sentiment.

In summary, while Indias structural strengths and reform momentum provide a strong foundation for growth, proactive risk management and strategic adaptation will be essential to harness opportunities and mitigate threats in the evolving global and domestic environment.

Looking ahead to FY 2026-27, the global economy is projected to grow at a modest pace of ~3.0-3.2%, with technology, renewable energy, and supply chain diversification driving industrial activity. Indias industry is expected to sustain strong growth momentum, supported by manufacturing revival, infrastructure investment, and digital transformation. With resilient domestic demand, favorable demographics, and continued policy support, India remains well-positioned to deliver ~7% growth, reinforcing its role as a key driver of global economic expansion. Indias industry is poised for continued expansion, supported by strong domestic demand, government-led infrastructure push, and favorable demographics.

While the economic and industry outlook remains positive, several risks warrant careful monitoring. Global uncertainties such as geopolitical conflicts, trade protectionism, and commodity price volatility could disrupt supply chains and dampen investor sentiment. Financial vulnerabilities arising from elevated public debt levels and tightening global liquidity may pose challenges to capital flows, particularly in emerging markets. Domestically, climate-related risks including erratic monsoons and extreme weather events could impact agricultural output and rural demand. Additionally, structural challenges such as skill gaps, infrastructure bottlenecks, and regulatory compliance requirements may affect the pace of industrial expansion. Addressing these risks through proactive policy measures, resilient corporate strategies, and sustainable practices will be critical to safeguarding growth momentum in FY 2026-27 and beyond.

Statements in this report describing the Companys objectives, expectations, or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in Government regulations, tax laws, economic developments within the country and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis, of any subsequent developments, events, or information.