Addi Industries Ltd Management Discussions

ECONOMY

GLOBAL

After withstanding higher trade barriers and elevated uncertainty last year, global activity now faces a major test from the outbreak of war in the Middle East. Assuming that the conflict remains limited in duration and scope, global growth is projected to slow to 3.1 percent in 2026 and 3.2 percent in 2027. Global headline inflation is projected to rise modestly in 2026 before resuming its decline in 2027. Slowdown in growth and increase in inflation are expected to be particularly pronounced in emerging market and developing economies. Fostering adaptability, maintaining credible policy frameworks, and reinforcing international cooperation are essential to navigating the current shock while preparing for future disruptions in an increasingly uncertain global environment.

INDIA

India continued to demonstrate strong macroeconomic resilience during 2026 despite global economic uncertainties. Although India slipped to the sixth-largest economy in nominal GDP terms due to factors such as the weakening rupee, global geopolitical tensions, foreign capital outflows, and GDP base-year revision, its underlying economic fundamentals remained robust. Supportive government policies, moderating inflation, healthy banking and corporate sectors, strong credit growth, and favourable agricultural prospects contributed to sustained economic stability.

According to the IMF and the United Nations, India is expected to remain the fastest-growing major economy, with GDP growth projected at 6.4% in 2026 and 6.6% in 2027. While rising crude oil prices due to geopolitical tensions in the Middle East may increase import costs and exert pressure on the rupee, Indias strong economic fundamentals are expected to support long-term growth and resilience.

INDUSTRY STRUCTURE & DEVELOPMENT

It is a recognized fact that the knitwear sector in the textile industry plays an important role in the Indian Economy. This industry, however, is highly competitive and fragmented. During the year 2025-26 the exports of readymade garments have been reduced substantially, and the export growth was severely affected due to several internal and external developments. Stiff Global Competition, Changing Technology & Fashion industry and above all failure to resume production have an adverse impact on business prospects and profitability. The Company endeavours into real estate to upward the profit of the Company. However the Company has not entered into any contracts relating to real estate during the year under review.

OPERATING RESULTS

The Companys results for the year present a mixed picture strong top-line expansion at the group level, offset by materially higher costs that weighed on profitability across both standalone and consolidated views.

Standalone performance:

Total income (including other income) declined marginally by about 1.98%, from 537.03 lakhs in FY

2024-25 to 526.38 lakhs in FY 2025-26.

Total expenses rose sharply by around 90.00%, from 123.05 lakhs to 233.80 lakhs, driven largely by a steep increase in finance cost (from 1.55 lakhs to 38.84 lakhs). Profit before tax fell by about 29.32%, from 413.98 lakhs to 292.58 lakhs. Profit after tax (PAT) declined by approximately 28.65%, from 310.89 lakhs to 221.83 lakhs.

Consolidated performance:

Total income (including other income) grew strongly by about 90.57%, from 553.90 lakhs in FY 2024-25 to 1,055.58 lakhs in FY 2025-26 nearly doubling at the group level.

Total expenses increased significantly to 743.68 lakhs (from 123.59 lakhs), reflecting the scale-up of group operations and higher finance costs. Profit before tax stood at 311.90 lakhs, a decline of about 27.52% over the previous year ( 430.31 lakhs). Profit after tax (PAT) came in at 236.25 lakhs against 324.81 lakhs in the previous year, a decrease of around 27.27%.

OPPORTUNITIES & THREATS

The opportunities in the Textile Industry and the increasing growth in export of knitted garments augur well for this vital segment. There is a perceptible change in the outlook and shift for diversified and high value added products. Textile Companies are always experiencing pricing pressures, lately due to stiff international competition. Besides, lack of modern technology and archaic personnel laws are some of the other areas of significant threats. Addi Industries is seized of all such factors having adverse effect on its exports. It is always eager and endeavoring to constantly update its plant & equipment for producing the best quality products. A capital expenditure of Nil was incurred during the year on technology upgradation and modernization of machinery & equipment, wherever considered necessary.

SEGMENT-WISE PERFORMANCE

The Company exploring market in real estate and textile industries, However as of now there is no projects in the Company.

FUTURE PROSPECTS AND OUTLOOK

The Company will continue to explore various options to strengthen its capital base and balance sheet to augment the long-term resources for meeting funds requirements of its business activities, the future growth opportunities, general corporate purposes and other purposes.

RISKS & CONCERNS

The Company places its thrust on product excellence. Judicious risk management policies, strong systems, constant monitoring of various risk factors and a focus on greater market penetration continue to guide the business strategy of the Company. Strict monitoring is done to cut-down costs and overheads, whatever feasible, to make the product more price-competitive.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Audits are also carried out to review the adequacy of the internal control systems, compliance with policies and procedures. The Company has instituted a system of internal control and checks, which are supplemented by an on-going programme of internal audits and Management Information System (MIS). An annual planning and budgeting system has been put into practice. The Audit Committee of the Board actively reviews internal control systems as well as financial disclosures normally on every quarterly period.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCE

Personal relations during the year under report have been cordial. To conform to international standards, the Company conducts different training programs in-house. The Company has also identified and included specific programs on Health, Safety & Environment in every employee/es performance targets. A self-assessment system is in vogue amongst the staff, and a code of conduct amongst the senior management personnel, which is reviewed by the top management from time to time.

MEDIUM- AND LONG-TERM STRATEGY

The Company is committed to creating long-term value for shareholders through sustainable growth and profitability. The Company is committed to investing in its employees and fostering a culture of innovation and excellence. The Company is also committed to being a responsible corporate citizen and contributing to the communities in which it operates.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

Ratio	FY 2025-26	FY 2024-25	Change (%)	Explanation (if change > 25%)
Current Ratio	114.21	105.74	8.02%	NA
Debt-Equity
Ratio	-	-	-	-
Debt Service
Coverage ratio	-	-	-	-
Inventory
Turnover ratio	-	-	-	-
Trade
Receivable
Turnover Ratio	-	-	-	-
Trade Payable
Turnover Ratio	-	-	-	-
Net Capital
Turnover Ratio	-	-	-	-
Net Profit ratio	-	-	-	-
Return on Equity ratio	0.70%	1.01%	-30.45%	Due to decrease in profit in March 31, 2026
Return on Capital Employed	4.15%	5.35%	-22.45%	NA
Return on Investment	1.83%	2.07%	-11.62%	NA

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF: Return on Net worth for the FY 2025-26: Return on Net worth for the FY 2024-25: 4.024% Change in Return on Net worth: Explanation: Increased on account of improvement in the working capital during the year as compared to the previous year.

CAUTIONARY STATEMENT

The Statements in the Report of the Board of Directors and the Management Discussion & Analysis Report describing the Companys 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 since the Companys operations are influenced by many external and internal factors beyond the control of the Company.