S & T Corporation Ltd Management Discussions

INDIAN ECONOMY

The Indian economy continued to demonstrate resilience and strong growth momentum during the year. According to the Reserve Bank of India (RBI) Annual Report 2025-26, India remains one of the fastest-growing major economies globally, supported by robust domestic demand, healthy corporate and banking sector balance sheets, sustained capital expenditure, and continued policy reforms. The RBI has projected real GDP growth of 6.9% for FY 2026-27, reflecting confidence in the countrys macroeconomic fundamentals despite global uncertainties. Indias economic outlook continues to be supported by infrastructure development, digital transformation, manufacturing expansion, and increasing investment activity. While geopolitical developments, volatility in global commodity prices, and external economic conditions may pose certain challenges, the countrys strong domestic growth drivers and sound financial system are expected to support sustainable long-term economic growth.

Source:( https:// www.rbi.org.in/Scripts/ AnnualReportPublications.aspx)

The real estate sector witnessed continued momentum, driven by increased demand for residential and commercial properties, supportive regulatory measures, and improved investor confidence. The textile sector also experienced stable demand, supported by domestic consumption and export opportunities, while the commercial leasing market remained steady with growing demand for quality assets.

During the year, the Company continued its business in Real Estate Development and restarted its business activities of trading in yarn and other textile products and leasing of properties, in accordance with the objects contained in its Memorandum of Association. The diversification of business activities is expected to strengthen the Companys revenue base and improve long-term growth prospects.

BUSINESS OVERVIEW

The Company is presently engaged in the following business activities viz. Real Estate Development; Trading in Yarn and Other Textile Products; and Leasing of Properties.

The expansion of business activities during the year represents an important strategic step towards diversifying the Companys operations and reducing dependence on a single source of revenue.

REAL ESTATE SECTOR

The Indian real estate and infrastructure sector continues to play a pivotal role in the countrys economic growth and urban transformation. Supported by sustained government investment, policy reforms, and increasing private sector participation, the sector has witnessed steady growth across residential, commercial, industrial, and logistics segments.

The Government of Indias continued emphasis on infrastructure development through initiatives such as PM Gati Shakti, the National Infrastructure Pipeline (NIP), Smart Cities Mission, metro rail expansion, affordable housing programmes, and multimodal connectivity projects is expected to accelerate urbanisation and improve economic efficiency. The Union Budget 2026-27 further strengthened the sector by increasing capital expenditure on

infrastructure and prioritising investments in transportation, logistics, housing, and urban development.

The residential real estate market continues to benefit from rising income levels, growing urbanisation, favourable demographics, and increasing demand for quality housing. Commercial real estate has also demonstrated resilience, driven by growth in the services sector, Global Capability Centres (GCCs), and demand for office and warehousing spaces.

While challenges such as interest rate movements, input cost fluctuations, and global economic uncertainties remain, the long-term outlook for the Indian real estate and infrastructure sector remains positive, supported by strong economic fundamentals, government policy support, and increasing investment activity.

Source:(https:/ /www.ibef.org/economy/economic-survey-2025-26?utm source)

TEXTILE TRADING SECTOR

India continues to be one of the worlds largest producers and consumers of textiles, with the sector contributing significantly to the countrys industrial output, exports, and employment. The industry benefits from a strong domestic manufacturing base, an integrated value chain, increasing consumer demand, and supportive government initiatives aimed at enhancing global competitiveness.

The Government of India has introduced various measures, including the Production Linked Incentive (PLI) Scheme for Textiles, PM MITRA Parks Scheme, and initiatives to promote technical textiles and exports. These measures are expected to strengthen the textile value chain, improve manufacturing capabilities, and create new business opportunities for market participants.

The yarn and textile trading business continues to benefit from growing domestic consumption, expanding organised retail, increasing demand from the apparel and home furnishing industries, and improving supply chain efficiencies. However, the sector remains exposed to fluctuations in raw material prices, changes in global demand, foreign exchange movements, and evolving trade policies.

The long-term outlook for the textile sector remains encouraging, supported by favourable demographics, rising disposable incomes, increasing exports, and continued government support for the industry.

LEASING OF PROPERTIES

The Income in this segment includes rental income earned on one of the immovable property leased out by the Company, for generating additional source of revenue.

OPPORTUNITIES AND OUTLOOK

The Company believes that the Indian real estate sector continues to offer promising opportunities due to urbanization, infrastructure development, favourable government initiatives, and increasing housing demand. Simultaneously, the textile trading business presents opportunities arising from expanding domestic consumption and improved supply chain efficiencies.

THREATS AND CHALLENGES

The Indian real estate sector continues to face certain challenges despite its strong long-term growth potential. Rising land acquisition costs, increasing prices of key construction materials such as steel, cement, and energy, and fluctuations in borrowing costs may impact project viability and profitability. Any increase in interest rates may affect housing affordability and moderate demand in certain market segments. The sector is also subject to regulatory and compliance requirements, including environmental clearances, land-related approvals, and other statutory permissions. Delays in obtaining approvals or changes in regulatory policies may impact project timelines and increase development costs. Additionally, the sector remains exposed to macroeconomic uncertainties, geopolitical developments, and volatility in commodity prices, which may affect investor sentiment and business confidence. The availability of skilled labour, adoption of modern construction technologies, and increasing focus on sustainability and green building standards also present operational challenges for developers.

Further, intensifying competition among organised developers and changing consumer preferences require continuous innovation, efficient project execution, and enhanced customer engagement. Despite these challenges, favourable demographics, rapid urbanisation, infrastructure development, and supportive government policies continue to provide a strong foundation for the long-term growth of the Indian real estate sector.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

As on March 31, 2026, the Company had 8 permanent employees on its rolls. During the financial year under review, there were no material developments in the Human Resources / Industrial Relations front which had a significant impact on the operations of the Company.

INTERNAL CONTROL & ADEQUACY

The Company has in place adequate internal control systems and internal financial controls commensurate with the nature, size, and complexity of its operations. These controls are designed to ensure the orderly and efficient conduct of business, safeguarding of assets, accuracy and reliability of financial reporting, compliance with applicable laws and regulations, and effective risk management. The internal control systems are periodically reviewed to ensure their adequacy and effectiveness, and no material weaknesses were observed during the year under review.

FINANCIAL PERFORMANCE:

For details of Ratios and changes therein refer Notes to the Financial Statements forming part of this report.

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