United Leasing & Industries Ltd Management Discussions

In accordance with Regulation 34(2)(e) read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LORD Regulations"), the Management Discussion and Analysis Report of United Leasing and Industries Limited ("United" or "the Company") for the financial year ended March 31, 2026, is presented below.

The discussion and analysis should be read in conjunction with the Audited Financial Statements and the Notes forming part thereof. The financial information stated herein is based on the audited financial statements of the Company for the financial year ended March 31, 2026.

Statements in this section describing the Companys objectives, expectations, estimates, plans or predictions may constitute forward-looking statements. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, market demand, competition, raw material prices, regulatory environment, technology, operational risks and other factors.

INDUSTRY STRUCTURE AND DEVELOPMENTS

India possesses one of the worlds most diverse textile ecosystems, with an extensive value chain covering natural fibres such as cotton, jute and silk, man-made fibres, yarn, fabric, processing, ready-made garments, home textiles, technical textiles, handlooms and handicrafts. The breadth of this ecosystem provides India with a structural advantage supported by raw-material availability, established spinning and weaving capacities, garmenting and processing clusters, skilled manpower, entrepreneurial MSMEs, established export relationships and a large domestic consumer market.

The Indian textile and apparel industry is geographically diversified, with specialised clusters such as Tiruppur, Surat, Ludhiana, Panipat, Ahmedabad, Bengaluru, Noida and Gurugram, among others, contributing to various segments of the textile value chain.

Embroidery constitutes an important value-added segment of the textile industry and caters to apparel, fashion, home textiles, accessories and customised textile products. The segment is witnessing increasing adoption of modern technology, digital designs and automation, which can contribute to improved product quality, productivity and operational efficiency.

The industry continues to benefit from changing fashion trends, increasing consumer spending, e-commerce, product customisation and opportunities for export-market diversification. At the same time, the sector remains exposed to fluctuations in raw-material prices, changing consumer preferences, intense competition, supply-chain disruptions, foreign exchange movements and evolving regulatory and sustainability requirements.

CURRENT MARKET CONDITIONS

The textile market during the period under review and the outlook for FY 2026-27 may broadly be characterised by selective demand growth accompanied by continued margin discipline.

Demand conditions are improving across certain segments and markets, although the recovery remains uneven. Export-oriented businesses are seeking to diversify their customer and geographic base, while Indias large domestic market continues to provide a significant demand opportunity.

Customers are increasingly focused not only on price but also on quality, timely delivery, compliance, sustainability, traceability and product innovation. Accordingly, operational efficiency and the ability to respond quickly to changing market requirements are becoming increasingly important.

Traditional cotton-based textiles continue to remain significant; however, opportunities are also emerging in ready-made garments, man-made fibres, technical textiles, sustainable and recycled materials, performance fabrics and higher-value home-textile products.

For textile and embroidery businesses, the ability to maintain an appropriate product mix, control costs, optimise capacity utilisation and manage working capital remains critical for protecting margins and ensuring sustainable growth.

IMPACT OF RECENT GEOPOLITICAL AND TARIFF DEVELOPMENTS

Global trade policy and geopolitical developments continue to influence the operating environment of the Indian textile industry.

Recent trade arrangements and market-access initiatives provide opportunities for Indian textile and apparel businesses to expand their presence in international markets. Improved market access in the United Kingdom, European Union and other markets could strengthen the competitiveness of Indian textile products over the medium term, subject to commercial implementation and evolving trade conditions.

At the same time, the international trading environment remains subject to uncertainty. Changes in tariffs, import duties, trade policies and regulatory requirements in major export markets may affect pricing, competitiveness and demand.

Geopolitical developments, particularly disruptions affecting shipping routes in the West Asia and Gulf regions, have also resulted in longer transit routes, vessel diversions, congestion and increased freight, insurance and war-risk costs. Such developments may have a direct impact on the landed cost of textile products and margins, particularly where orders are executed at fixed prices.

Accordingly, supply-chain resilience, market diversification, prudent liquidity management and flexibility in sourcing and customer markets remain important considerations for businesses operating in the textile sector.

MARKET FLUCTUATIONS AND COST PRESSURES

The textile industry is sensitive to fluctuations in the prices and availability of key raw materials. Cotton, yarn, synthetic fibres and other textile inputs can experience significant price movements due to crop conditions, global commodity prices, domestic demand, import policies, exchange-rate movements and procurement cycles.

Temporary changes in customs duties and import policies relating to textile inputs may also influence procurement costs and market dynamics.

In addition to raw materials, textile businesses are exposed to costs relating to power, fuel, labour, transportation, chemicals, dyes, machinery maintenance and regulatory compliance. Changes in these costs may affect operating margins where the increase cannot be fully passed on to customers.

Working-capital management is therefore particularly important in the textile industry. Inventory and trade receivables can represent a significant portion of operating capital, and excessive inventory holding may increase exposure to price movements and liquidity pressures.

The Company continues to monitor these factors and follows a prudent approach towards procurement, cost control, inventory management and working-capital requirements.

BUSINESS AND OPERATIONAL PERFORMANCE

During FY 2025-26, the Company continued its operations in the textile embroidery business. There was no change in the nature of business of the Company during the year under review.

The Company remained focused on maintaining business continuity, managing operating costs, strengthening customer relationships and improving the efficiency of its operations.

During the year, the Company operated in an environment characterised by changing market conditions, fluctuations in input costs and competitive pressures. Management continued to adopt a prudent approach towards cost control, working-capital management and operational efficiency.

The Companys operating performance and financial results for FY 2025-26 should accordingly be viewed in the context of the overall conditions prevailing in the textile and embroidery sector.

OPPORTUNITIES

The Company believes that the evolving textile industry presents opportunities in value-added and specialised textile products, including embroidered products serving apparel, fashion, home textiles and accessories.

The increasing adoption of e-commerce, changing fashion preferences, product customisation and digital embroidery technologies provides opportunities for product diversification and improved operational efficiency.

The Companys opportunities include:

increasing demand for value-added and customised textile products; development of new customer segments and markets; opportunities arising from Indias expanding domestic textile and apparel market; potential growth in export-oriented textile and apparel segments; adoption of modern embroidery machinery, digital designs and automation; increasing preference for differentiated and higher-value textile products; and improved market access arising from evolving international trade arrangements.

The Company may evaluate suitable opportunities in these areas based on market conditions, commercial viability and availability of resources.

THREATS

The Company operates in a competitive and rapidly evolving industry. Key threats include fluctuations in raw-material prices, intense domestic and international competition, changing consumer preferences, economic uncertainties, supply-chain disruptions and changes in trade policies.

The textile sector is also exposed to changes in labour costs, energy prices, transportation costs and regulatory requirements. Rapid technological developments may require businesses to make timely investments in machinery, systems and processes in order to remain competitive.

Geopolitical developments and changes in tariff structures in major markets may also affect the competitiveness and cost structure of textile businesses.

The Company seeks to address these challenges through prudent cost management, operational monitoring, customer engagement and continuous assessment of market conditions.

RISK & CONCERN

The principal risks and concerns relevant to the Companys business include:

Raw Material Risk: Fluctuations in the prices and availability of textile-related raw materials may affect operating costs and margins.

Market and Competition Risk: Changes in consumer preferences and increasing competition may affect demand, pricing and customer retention.

Supply Chain Risk: Disruptions in transportation, logistics or availability of inputs may affect production schedules and delivery commitments.

Credit Risk: Delays in collection from customers may adversely affect working capital and liquidity.

Economic and Geopolitical Risk: Changes in economic conditions, international trade policies, tariffs and geopolitical developments may affect market demand and operating costs.

Technology Risk: Changes in technology and production methods may require timely adoption of new equipment and processes.

Regulatory Risk: Changes in applicable laws, environmental requirements, labour regulations and other compliance requirements may increase operational costs or require changes in business practices.

The Company continuously monitors these risks and takes appropriate measures through prudent procurement planning, cost management, working-capital management and operational controls.

HUMAN RESOURCE DEVELOPMENT/ INDUSTRIAL RELATION

Human resources remain an important component of the Companys long-term success.

The Company recognises that its employees are a valuable asset and play an important role in achieving operational efficiency, maintaining product quality and supporting the Companys business objectives.

The Company continues to focus on employee development, performance management, employee engagement and creation of a positive working environment.

The Company follows appropriate processes relating to employee induction, allocation of responsibilities, performance assessment and employee development.

The management believes that a motivated and capable workforce is essential for achieving sustainable growth and maintaining competitiveness.

FINANCIAL PERFORMANCE

During the financial year ended March 31, 2026, United Leasing and Industries Limited continued to operate in the textile embroidery business. There was no change in the nature of business of the Company during the year under review.

Revenue and Income

The Company recorded Revenue from Operations of 714.14 Lakhs during FY 2025-26 as against 785.28 Lakhs in FY 2024-25. Revenue from operations therefore declined during the year, reflecting the operating conditions prevailing in the textile and embroidery sector.

Other Income during the year stood at 7.05 Lakhs, compared with 18.65 Lakhs in the previous year.

Consequently, the Companys Total Income stood at 721.19 Lakhs, compared with 803.93 Lakhs in FY 2024-25.

Expenses

The Companys total expenses for FY 2025-26 stood at 703.90 Lakhs, as compared with 787.19 Lakhs in the previous financial year.

The principal components of expenditure were:

Cost of Materials Consumed: 416.03 Lakhs as against 439.15 Lakhs; Employee Benefit Expenses: 71.63 Lakhs as against 62.30 Lakhs; Depreciation and Amortisation: 60.63 Lakhs as against 59.26 Lakhs; Finance Costs: 33.27 Lakhs as against 37.63 Lakhs; and Other Expenses: 122.33 Lakhs as against 188.86 Lakhs.

The reduction in total expenses was primarily supported by lower material consumption costs, finance costs and other operating expenses during the year.

Profitability

Profit before exceptional items and tax for FY 2025-26 stood at 7.29 Lakhs, compared with 16.74 Lakhs in FY 2024-25.

During the year, the Company recognised an impairment loss of 0.08 Lakhs in respect of assets in subsidiaries. Accordingly, profit before tax stood at 7.21 Lakhs as against 16.74 Lakhs in the previous financial year.

The Company reported Profit After Tax of 2.95 Lakhs for FY 2025-26 as compared with 11.26 Lakhs in FY 2024-25.

The Basic and Diluted Earnings Per Share stood at 0.10 per equity share during FY 2025-26, as compared with 0.38 per equity share in the previous financial year.

1. The Current Ratio improved marginally from 2.50 to 2.58, indicating a marginal improvement in the Companys short-term liquidity position.

2. The Debt-Equity Ratio remained broadly stable at 0.73, compared with 0.74 in the previous year, reflecting a broadly stable capital structure.

3. The Debt Service Coverage Ratio improved from 1.22 to 1.52, indicating an improvement in the Companys ability to service its debt obligations during the year.

4. The Return on Equity declined from 1.64% to 0.43%, primarily due to the lower profit earned during FY 2025-26.

5. The Inventory Turnover Ratio declined from 4.66 to 3.02. The movement in the ratio reflects changes in the Companys inventory position and cost of goods sold during the year.

6. The Trade Receivables Turnover Ratio declined from 6.81 to 5.53, reflecting a comparatively lower turnover of trade receivables during the year.

7. The Trade Payables Turnover Ratio increased significantly from 31.17 to 75.83. The movement primarily reflects changes in the Companys average trade payables and the corresponding cost and operating expenditure during the year.

8. The Net Capital Turnover Ratio declined from 1.86 to 1.52, reflecting lower revenue from operations relative to working capital deployed during the year.

9. The Net Profit Margin declined from 1.43% to 0.41%, primarily due to the reduction in profit after tax during the year.

10. The Return on Capital Employed stood at 10.91%, compared with 11.21% in the previous year, remaining broadly stable with a marginal decline.

11. Return on Investment is not applicable / not meaningful for the Company for the respective periods and accordingly no ratio has been reported.

APPRECIATION AND ACKNOWLEDGEMENT

The Directors place on record their sincere appreciation for the continued support and contribution of the Companys employees, management, customers, suppliers, bankers, advisors, business associates and other stakeholders.

The Directors particularly acknowledge the dedication, commitment and professionalism demonstrated by the employees during the year under review. Their contribution has been instrumental in supporting the Companys operations and enabling the Company to navigate the evolving business environment.

The Board also expresses its gratitude to all shareholders and other stakeholders for their continued confidence, cooperation and support.

The Company remains committed to strengthening its operations, improving efficiency and creating sustainable long-term value for all its stakeholders.

DIN: 01860038

Sd/- Ashish Khanna

Managing Director

DIN: 01251582