Akshar Spintex Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT</dhhead>

The management discussion and analysis report provide an over view of the financial and Business activities for the fiscal year ended on 31st March 2026, gives an overall sight of the yarn industry, opportunities and threats in the business and Companys strategy to deal with that. This report is designed to focus on current years activities, resulting changes and other known facts in conjunction to the financial and strategic position of the Company.

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Industry Structure and Developments

India is the worlds second-largest producer of textiles and garments and the third largest exporter, covering apparel, home textiles, and technical textile products. The country holds a 4.6% share of global trade and features among the top five exporters in several categories. The industry contributes around 2% of Indias GDP and about 11% of manufacturing GVA (Gross Value Added) as of February 2026. Its role in employment is also significant, with over 45 million people engaged and about 22,000 million garments produced annually. By 2030, the textile industrys share in GDP is expected to more than double, reaching close to 5%.

The domestic market is valued at US$225 billion in 2025 and is growing at a brisk pace of 10-12% CAGR. Rising incomes, e-commerce penetration, and evolving consumer preferences are expected to push the market size to US$350 billion by 2030. This expansion will be further supported by Indias rising per capita income, which is projected to increase from US$2,812.62 in FY26F to US$4,000 by FY30.

On the export front, Indias textiles and apparel exports, including handicrafts, stood at US$37.8 billion in FY25, with the government targeting US$100 billion in exports by 2030, supported by policy initiatives and improving global demand.

India is the worlds largest producer of cotton. In FY25-26, the production of cotton in India have been estimated at 292.15 lakh bales of 170 kgs.

Production of yarn stood at 5,481 million kgs in FY24 and 2,752 million kgs in FY25 (April-September).

Indias cotton yarn sector is poised for substantial revenue growth, with Crisil Ratings forecasting a 7-9% increase in FY26.

Indias home textile sector is known for its rich traditions and craftsmanship, with various regions specializing in unique textile techniques and patterns. Gujarat is renowned for its vibrant and intricate embroidery, while Kashmir is famous for its luxurious woollen shawls and rugs. This diversity reflects Indias extensive heritage and expertise in textile production.

Indias textile sector is poised for a transformative decade, driven by strong domestic demand, rising global opportunities, and supportive government initiatives. With expanding technical textiles, growing export potential, and sustained innovation, the industry is set to play an even greater role in powering Indias economic growth and strengthening its position as a global textile leader.

The textile industry continues to play a significant role in the Indian economy by contributing to employment, exports and industrial growth. Government initiatives aimed at promoting manufacturing, technical textiles, infrastructure development and exports have provided growth opportunities to the sector.

References: Industry data and information have been sourced from the India Brand Equity Foundation (IBEF).

MARKET SIZE:

In the cotton season 2025-26, as of February 5, 2026, the Government of India, through its nodal agency Cotton Corporation of India (CCI) under the Ministry of Textiles, procured 90.97 lakh bales of cotton valued at Rs. 36,355 crore (US$4.11 billion) under Minimum Support Price (MSP) operations. To strengthen procurement coverage, CCI expanded its network from 508 centres in 2024-25 to 571 centres across 150 districts in 11 cotton-growing states during 2025-26. India saw a 36.4% increase in industrial design applications, particularly in textiles, accessories, tools, machines, health, and cosmetics.

The global apparel market was valued at US$1.9 trillion in 2025 and is expected to grow at a CAGR of 4.1% from 2026 to 2034. Growth is driven by rising demand for casualwear and athleisure, social media trends, higher disposable incomes, and e-commerce expansion. In FY26, the total exports of textiles and apparel (including handicrafts) stood at US$35.52 billion, while imports were recorded at US$8.49 billion. The Ready-Made Garments (RMG) category, with exports of US$15.77 billion, accounted for the largest share (44%) of total exports, followed by Cotton Textiles (29%, US$10.25 billion) and Man-Made Textiles (15%, US$5.23 billion).

The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$2.3 billion by 2030. India ranks among the top five global exporters in several textile categories, with exports expected to reach US$100 billion. The textiles and apparel industry contribute approximately 2% of Indias GDP and about 11% of manufacturing GVA (Gross Value Added) as of February 2026. The textile industry in India is predicted to double its contribution to the GDP to approximately 5% by the end of this decade.

Global fibre demand is expected to reach around 149 million tonnes in 2030, with increasing population and growth in per-capita consumption. The Indian Technical Textiles market is the fifth largest in the world. The technical textiles industry was valued at US$29 billion in 2024 and is projected to grow to US$45 billion by 2026, US$123 billion by 2035, and US$309 billion by 2047.

The India mobiletech textile market (a division of technical textiles for automotive use) is projected to grow from US$2.32 billion in FY25 to US$4.57 billion by FY33, at a CAGR of 8.84%. This growth is driven by rising demand for advanced materials, electric vehicles, and sustainability focus.

Indias sports technology market was valued at US$501.3 million in 2025 and is projected to reach US$1528.5 million by 2034, growing at a CAGR of 12.79% from 2026 to 2034. Indias home textile market is projected to grow at a CAGR of 7.08% during 2026-2031, reaching US$16.76 billion by 2031 from US$11.18 billion in 2025.

Technical textiles are revolutionizing the textile industry in India by offering innovative solutions across various sectors. These specialized fabrics are designed for specific performance attributes and applications, ranging from automotive and aerospace to healthcare and construction. With a growing emphasis on technology and research, India is positioning itself as a global leader in this field, leveraging its strong textile heritage and advanced manufacturing capabilities. The Indian composites market is expected to reach an estimated value of US$1.9 billion by 2026 with a CAGR of 16.3% from 2021 to 2026 and the Indian consumption of composite materials will touch 7,68,200 tonnes in 2027.

The sector employs over 45 million people and produces approximately 22,000 million pieces of garments annually.

References: Industry data and information have been sourced from the India Brand Equity Foundation (IBEF)

INDUSTRY OUTLOOK

The Indian textile and apparel industry continues to play a significant role in the countrys economy and remains an important contributor to employment, exports and industrial growth. India has a well-established textile value chain covering cotton cultivation, spinning, weaving, processing, manufacturing and garmenting, providing the country with a strong foundation to participate in the global textile and apparel market.

The outlook for the cotton yarn industry remains cautiously positive, supported by the steady demand for cotton-based apparel and home textiles, increasing preference for natural fibres, growth in international textile consumption and Indias established position as a major cotton and yarn-producing country. Demand is also expected to benefit from the growing emphasis on sustainable and recyclable fibres, as global brands and consumers increasingly focus on environmentally responsible products.

Growth Opportunities

The Indian spinning industry is expected to benefit from increasing global demand for quality cotton yarn and the gradual diversification of international textile supply chains. Global apparel and textile manufacturers are increasingly seeking reliable sourcing partners, creating opportunities for Indian yarn manufacturers with consistent quality, competitive pricing and dependable delivery capabilities.

The expansion of Indias textile manufacturing and garmenting capabilities, together with increasing exports of value-added textile products, is expected to support domestic consumption of cotton yarn. The development of specialised and value-added yarns, including compact-spun and blended yarns, provides additional opportunities for manufacturers to improve product realisation and address changing customer requirements.

Technological advancement is also expected to remain an important driver of competitiveness. Modern spinning machinery, automation, process optimisation and quality-control systems can improve productivity, consistency and manufacturing efficiency. Companies that invest in modern technology and capacity enhancement are better positioned to meet the evolving requirements of domestic and international customers.

Export Potential

India has considerable potential to strengthen its position in the global textile supply chain. Indian cotton yarn is exported to several major textile-producing and consuming markets, including Bangladesh, China, Vietnam, Japan, South Korea, the United States and European markets.

The diversification of global textile sourcing away from concentrated manufacturing locations may provide additional opportunities for Indian textile manufacturers. Indias integrated textile ecosystem, availability of cotton, established spinning capacity and skilled workforce provide a competitive base for serving international customers.

However, international competitiveness remains dependent on cotton availability and prices, manufacturing costs, logistics, energy costs, exchange-rate movements and prevailing global trade policies.

Sustainability and Product Innovation

Sustainability is increasingly influencing purchasing decisions across the global textile industry. International brands and textile manufacturers are placing greater emphasis on responsible sourcing, traceability, resource efficiency, recycled materials and environmentally responsible production processes.

This trend is creating opportunities for manufacturers capable of supplying consistent-quality yarns while meeting evolving sustainability requirements. Product innovation, including compact yarns, blended yarns and other value-added products, can enable manufacturers to cater to specialised applications and strengthen customer relationships.

Key Industry Challenges

Despite the positive long-term outlook, the cotton yarn industry remains exposed to several external factors. Cotton prices are influenced by domestic production, weather conditions, international cotton prices, inventory levels and global demand-supply dynamics. Sudden fluctuations in cotton prices can impact margins and working-capital requirements.

The industry also faces challenges relating to energy costs, labour availability, freight and logistics expenses, foreign exchange volatility and competition from other major textile-producing countries. Global economic slowdowns, geopolitical developments and changes in trade policies may also influence export demand.

The availability of good-quality cotton in adequate quantities at competitive prices remains particularly important for maintaining the competitiveness of Indian spinning mills. Improvement in cotton productivity, quality and supply-chain efficiency, together with supportive policy measures, can further strengthen Indias position in the international market.

Outlook

The medium- to long-term outlook for the Indian cotton yarn industry remains positive, albeit subject to cyclical and external risks. Growth in global textile consumption, increasing preference for natural fibres, Indias established textile ecosystem and opportunities arising from diversification of global supply chains provide a favourable environment for the industry.

The Company believes that manufacturers with modern manufacturing facilities, strong quality standards, operational efficiency, product diversification and a balanced domestic and export market presence will be better positioned to capture the emerging opportunities.

The Company will continue to monitor developments in cotton prices, global demand, export markets, foreign exchange, trade policies and geopolitical conditions and will take appropriate measures to mitigate associated risks while pursuing sustainable growth and long-term value creation.

GOVERNMENT GRANTS AND POLICIES:

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Government policies and initiatives continue to play an important role in strengthening the competitiveness, modernization and global positioning of the Indian textile industry. The Government of India has introduced various schemes and policy measures aimed at promoting investment, technological upgradation, exports, sustainability, skill development and integrated textile manufacturing.

The Company regularly monitors the policies, schemes and incentives introduced by the Central and State Governments that are relevant to the cotton spinning and textile industry and evaluates their applicability to its operations.

THE SAMARTH

The SAMARTH scheme continues to play a key role in bridging skill gaps in Indias textile sector, with the government emphasizing industry-aligned training, mandatory placement targets, and inclusion of traditional sectors such as handloom and handicrafts. The scheme also supports self-employment and entrepreneurship, particularly among women and rural workers, reinforcing its focus on inclusive growth and workforce formalization, as highlighted by the Ministry of Textiles in recent parliamentary updates.

Production Linked Incentive (PLI) Scheme for Textiles

The Government of India has introduced the Production Linked Incentive (PLI) Scheme for Textiles with the objective of promoting the production of Man-Made Fibre (MMF) apparel, MMF fabrics and products of Technical Textiles and enhancing the competitiveness and scale of the Indian textile industry.

The scheme is primarily aimed at attracting investment in identified segments of the textile value chain and strengthening Indias position in global textile manufacturing. The applicability of the scheme to the Companys operations is evaluated based on the prescribed eligibility criteria.

Remission of Duties or Taxes on Export Product (RoDTEP):

The RoDTEP scheme seeks to refund eligible duties, taxes and levies borne on exported products which are not otherwise refunded or remitted under any other mechanism. The scheme is intended to improve the competitiveness of Indian exports and support exporters in international markets.

The Company monitors the applicable RoDTEP rates and Government notifications relating to its export products and undertakes eligible claims in accordance with applicable requirements.

PM Mitra: (PM MITRA Parks)

The Government of India has introduced the PM Mega Integrated Textile Regions and Apparel (PM MITRA) Parks Scheme with the objective of developing integrated, large-scale textile manufacturing facilities with modern infrastructure and facilities across the textile value chain.

The Prime Minister Mega Integrated Textile Region and Apparel (PM MITRA) Parks Scheme aims to establish seven world-class mega textile parks with state-of-the-art infrastructure, plug-and-play facilities, and a fully integrated textile value chain with a total investment of Rs.4,445 crore (US$541.82 million) for the years up to 2027-28 was approved by the government. These parks are expected to attract investments worth Rs. 85,370 crore (US$10 billion). The government is planning to set up 12 new industrial parks and 5-6 mega textile parks, announced by Union Minister of Commerce and Industry Mr. Piyush Goyal. He also urged the private sector to capitalize on these initiatives.

Kasturi Cotton Bharat

Kasturi Cotton Bharat is an initiative of the Ministry of Textiles aimed at promoting Indian cotton through branding, traceability and certification. The initiative seeks to enhance the value and recognition of Indian cotton in domestic and international markets and encourage greater transparency across the cotton value chain. The initiative is relevant to the broader cotton and textile ecosystem and may support Indias positioning as a reliable source of quality cotton and cotton-based products.

Bharat Tex

Bharat Tex has emerged as an important platform for showcasing Indias textile capabilities and connecting Indian textile manufacturers and exporters with global buyers, brands and other stakeholders. Such industry initiatives provide opportunities for business networking, market development, knowledge sharing and promotion of Indian textile products in international markets.

Other initiatives taken by the Government of India are:

In May 2026, the Prime Minister inaugurated the countrys first operational PM MITRA Park at Warangal, Telangana. Developed at a project cost of Rs. 1,695.54 crore (US$191.87 million), the integrated textile park spans 1,327 acres and is expected to attract investments of over Rs. 6,000 crore (US$679 million) while generating more than 24,400 jobs across the textile value chain.

On February 28, 2026, the Ministry of Textiles announced that the PM MITRA Park in Tamil Nadu allotted 190.44 acres to 23 investors, unlocking committed investments of nearly Rs. 2,192 crore (US$248.03 million) and potential creation of 15,000 jobs across yarn, fabric, garment, and technical textile segments.

On December 9, 2025, the Government stated that the five-year Cotton Mission would focus on developing climate-smart, pest-resistant, and high-yielding cotton varieties, including extra-long staple (ELS) cotton, to strengthen domestic cotton productivity and reduce import dependence.

On December 5, 2025, the Government reported that a total of 168 projects had been approved under the National Technical Textiles Mission (NTTM), including 79 research projects covering speciality fibres, geotextiles, agro-textiles, and smart textiles to strengthen Indias technical textiles ecosystem.

As of February 2026, the Government continued development of seven PM MITRA Parks aimed at creating integrated textile manufacturing ecosystems with world-class infrastructure to reduce logistics costs and enhance global competitiveness of Indias textile sector.

The government signed an MoU with the Brand & Sourcing Leaders Association to boost Madhya Pradeshs textile sector, aligning with the PM MITRA Park in Dhar. Over Rs. 16,000 crore (US$1.83 billion) in investment intent letters have been received, with Rs. 3,500 crore (US$399.32 million) already invested. The state is promoting organic cotton and modern textile infrastructure under Indias Five F Vision.

In May 2026, KVIC reported record provisional sales of Rs 1,87,105 crore (US$21.17 billion) in FY26, while Khadi textile sales reached Rs 7,869 crore (US$0.89 billion), reflecting growing consumer demand and strengthened promotion of indigenous products.

The Khadi and Village Industries Commission (KVIC) recorded a historic turnover of Rs. 1.70 lakh crore (US$19.23 billion) in FY25, reflecting the continued revival of Khadi and village industries, alongside stronger demand, employment generation, and broader rural economic activity.

The Samarth Scheme extended for FY25 and FY26 with Rs. 495 crore (US$56.6 million) budget aims to train three lakh people in textile skills. It is demand-driven, placement-focused, covers the entire textile value chain except spinning and weaving, and supports job creation and productivity enhancement.

As of February 2026, over 2 lakh weavers, artisans, and handloom-related entities have been onboarded on the Government e-Marketplace (GeM) portal.

The Central government aims to achieve Rs. 86,680 crore (US$10 billion) in technical textile exports under the National Technical Textiles Mission, launched in FY21 and extended until FY26 with a financial outlay of Rs. 1,480 crore (US$170.74 million). Indias technical textile exports range between Rs. 17,336 crore (US$2 billion) and Rs. 26,004 crore (US$3 billion).

The Prime Minister Mega Integrated Textile Region and Apparel (PM MITRA) Parks Scheme aims to establish 7 world-class mega textile parks with state-of-the-art infrastructure, plug-and-play facilities, and a fully integrated textile value chain with a total investment of US$541.82 million (Rs. 4,445 crore) for the years up to 2027-28 was approved by the government. These parks are expected to attract investments worth Rs. 85,370 crore (US$10 billion).

Secretary of the Ministry of Textiles, Ms. Rachna Shah, announced that Indias technical textiles market has great potential, with a notable growth rate of 10% and ranking as the 5th largest in the world.

A tripartite Memorandum of Understanding (MoU) was signed by the Textiles Committee under the Ministry of Textiles, the Government e Marketplace (GeM) under the Ministry of Commerce and Industry, and the Standing Conference of Public Enterprises (SCOPE) to promote upcycled products made from textile waste and scrap.

Mr. Piyush Goyal also discussed the roadmap to achieve the target of US$250 billion in textiles production and US$100 billion in exports by 2030.

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Risk & Concerns

The Company has established a risk management framework for identifying, assessing, monitoring and mitigating various risks associated with its business operations. The management periodically reviews the key business and operational risks and takes appropriate measures to minimize their potential impact on the Companys performance.

The Companys business is primarily exposed to risks relating to cotton prices, yarn realizations, market demand, competition, foreign exchange fluctuations, power and other input costs, availability of raw materials, working capital requirements, technology and availability of skilled manpower.

The major risks and the corresponding mitigation measures are set out below:

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Risk	Impact	Mitigation
Raw Material Price Risk – Cotton	Cotton is the principal raw material for the Companys yarn manufacturing operations. Significant fluctuations in cotton prices may increase the cost of production and adversely affect operating margins.	The Company closely monitors cotton prices and market trends and plans procurement based on production requirements and prevailing market conditions. Inventory levels and procurement cycles are monitored to manage price volatility and ensure continuity of operations.
Availability of Raw Material	Adverse weather conditions, changes in crop production, supply disruptions or other factors may affect the availability and quality of cotton and may result in higher procurement costs.	The Company maintains relationships with multiple suppliers and monitors market availability and procurement conditions. Procurement planning and inventory management are undertaken to support uninterrupted production.
Yarn Price & Demand Risk	Fluctuations in yarn realizations and changes in domestic and international demand may adversely affect sales volumes and profitability.	The Company continuously monitors market demand, yarn prices and customer requirements and adjusts its production and sales strategies accordingly. The diversified product portfolio also enables the Company to cater to different customer segments.
Business & Competition Risk	The textile and spinning industry is highly competitive. Competition from domestic and international manufacturers may exert pressure on selling prices, margins and market share.	The Company focuses on product quality, customer service, timely delivery, operational efficiency and development of value-added and specialty yarns. Customer relationships and market developments are monitored on a regular basis.
Power & Energy Cost Risk	Spinning operations are energy-intensive. Increases in electricity, fuel and other energy costs may increase the Companys cost of production and reduce margins.	The Company monitors energy consumption and focuses on efficient utilization of power and other resources. Operational efficiencies and cost-control measures are implemented wherever practicable.
Foreign Exchange Risk	Changes in foreign exchange rates may affect the realization from exports and the cost of imported goods, where applicable.	The Company monitors foreign exchange movements and evaluates its foreign currency exposures periodically. Appropriate commercial measures are taken based on the nature and timing of the underlying transactions.
Working Capital & Liquidity Risk	The textile business requires adequate working capital for procurement of cotton, inventory holding, production and receivables. Inadequate liquidity may affect business operations.	The Company closely monitors receivables, inventory, payables and cash flows and undertakes measures for efficient utilization of working capital and timely realization of receivables.
Operational Risk	Machine breakdowns, production interruptions, quality issues or other operational disruptions may affect production volumes, delivery schedules and profitability.	Regular monitoring of production operations, preventive maintenance and quality-control measures are undertaken to minimize operational disruptions and maintain product consistency.
Technology Risk	Changes in manufacturing technology and increasing automation may require continuous investment to maintain efficiency and competitiveness.	The Company periodically evaluates technological improvements and process upgrades and adopts appropriate measures based on operational requirements and commercial viability.
Human Resource Risk	Availability and retention of skilled and experienced personnel are important for maintaining manufacturing efficiency and product quality.	The Company focuses on employee development, training, skill enhancement, employee engagement and maintaining a conducive work environment to attract and retain suitable manpower.
Regulatory & Compliance Risk	Changes in applicable laws, regulations, environmental requirements, labour laws and other statutory requirements may increase compliance obligations and operating costs.	The Company monitors applicable statutory and regulatory developments and undertakes necessary measures to ensure compliance with applicable requirements.
Global Economic & Geopolitical Risk	Global economic slowdown, geopolitical developments, trade restrictions, tariffs and supply-chain disruptions may affect textile demand, exports, raw material prices and freight costs.	The Company closely monitors domestic and international market developments and seeks to diversify its customer base and markets while maintaining flexibility in procurement and sales decisions.

COMPANY PERFORMANCE AND BUSINESS OUTLOOK

During the financial year under review, the Company continued its operations in the cotton spinning and textile sector amidst challenging business conditions. The performance of the Company was affected by volatility in raw material prices, fluctuations in yarn realizations, input costs, working capital requirements and overall market conditions.

During the year under review, the Company recorded revenue from operations of 11,728.12 Lakhs as compared to 11,676.91 Lakhs in the previous financial year. However, the Company incurred a Loss before Exceptional Items and Tax of 810.03 Lakhs, as against a loss of 587.76 Lakhs in the previous year. The Company reported a Net Loss of 738.94 Lakhs for the year under review as compared to a Net Loss of 444.81 Lakhs in the previous financial year.

The Company continues to focus on improving operational efficiencies, optimizing production costs, effective working capital management and strengthening its customer base. The management is also focused on improving capacity utilization, maintaining product quality and exploring opportunities in domestic as well as export markets.

BUSINESS OUTLOOK

The long-term outlook for the Indian textile and cotton yarn industry remains supported by the established domestic textile value chain and continuing demand for cotton-based products. At the same time, the industry remains exposed to fluctuations in cotton prices, yarn realizations, energy costs, foreign exchange movements, global demand, competition and changes in trade policies.

Going forward, the Company intends to strengthen its operational and financial performance through prudent cost management, efficient utilization of manufacturing resources, improved working capital management and closer monitoring of market conditions. The Company will continue to focus on maintaining quality standards, strengthening customer relationships and identifying opportunities for improving its product mix and market reach.

The management remains cautiously optimistic about the Companys prospects and will continue to take appropriate measures to improve operational efficiency, control costs and enhance the overall financial performance of the Company, subject to prevailing market and economic conditions.

The Company will continue to closely monitor developments in the domestic and international textile markets and take suitable business decisions in response to changes in demand, raw material prices, export opportunities and other external factors.

OUR PRODUCT RANGE:

• 100% Carded Cotton Yarn (16s to 44s Ne)
• 100% Semi Combed Cotton Yarn (16s to 44s Ne)
• 100% Combed Cotton Yarn (16s to 44s Ne)
• Slub Yarn
• Core Spun Yarn
• TFO Yarn
• Eli Twist Yarn
• Fancy Yarn
• Melange Yarn
• Blended Yarn
• BCI Certified Yarn
• Organic Yarn

STRENGTHS, WEAKNESS, OPPORTUNITIES AND THREATS:

The textile and spinning industry continues to evolve in response to changing consumer preferences, technological developments, sustainability requirements and global trade dynamics. In this environment, the Company continues to focus on strengthening its product portfolio, improving operational efficiency and responding effectively to changing market conditions.

Strengths

• Established presence in the cotton yarn manufacturing industry.
• Diversified product portfolio comprising carded, semi-combed and combed cotton yarn as well as specialty and value-added yarns.
• Product range covering Slub Yarn, Core Spun Yarn, TFO Yarn, Eli Twist Yarn, Fancy Yarn, Melange Yarn and Blended Yarn.
• Capability to cater to varied customer requirements across different yarn segments.
• Availability of products such as BCI Certified Yarn and Organic Yarn, enabling the Company to participate in sustainability-oriented market segments.

• Established manufacturing infrastructure and technical experience in the spinning business.
• Presence in both domestic and export markets.
• Focus on quality, productivity and efficient utilization of manufacturing resources.

Weaknesses

• The Companys profitability is sensitive to fluctuations in cotton prices and yarn selling prices.
• High working capital requirements associated with the spinning and textile business.
• Significant exposure to power, fuel, freight and other operating costs.
• Profit margins may be affected by fluctuations in demand, yarn realizations and raw material prices.
• Dependence on domestic and international market conditions for sustained demand.
• The Company operates in a highly competitive industry where pricing pressure can affect margins.

Opportunities

• Growing domestic and international demand for cotton and value-added yarn products.
• Increasing preference for sustainable and traceable textile products provides opportunities for BCI Certified and Organic Yarn.
• Scope for increasing the contribution of specialty and value-added yarns to the overall product mix.
• Opportunities to expand the Companys presence in export markets and develop new customer relationships.
• Adoption of modern manufacturing technologies, automation and process improvements can enhance productivity and cost efficiency.
• Increasing focus of global textile manufacturers on reliable and diversified sourcing from India provides opportunities for Indian yarn manufacturers.
• Product diversification and development of customized yarns can help the Company address specific customer requirements.

Threats

Threats - Volatility in domestic and international cotton prices.

• Fluctuations in yarn prices and demand may adversely affect operating margins.
• Intense competition from domestic as well as international yarn manufacturers and other textile-producing countries.
• Increase in power, labour, transportation, freight and other input costs.
• Foreign exchange fluctuations may affect the Companys export business and profitability.
• Changes in international trade policies, tariffs, duties and regulations may impact export opportunities.
• Geopolitical developments, global economic uncertainty and disruptions in supply chains may adversely affect demand and operating costs.
• Increasing environmental and sustainability requirements may result in additional compliance and investment costs.
• Rapid technological developments require continuous investment in machinery, processes and employee skills.

The Company continues to monitor these factors closely and remains focused on leveraging its strengths and available opportunities while taking appropriate measures to mitigate the impact of identified weaknesses and external threats.

INTERNAL CONTROL & ADEQUACY:

INTERNAL CONTROL & ADEQUACY: Your Company has been regularly reviewing and updating its internal controls by benchmarking against the industry standards. Dynamics of changing business requirements, statutory compliances and corporate governance are adopted in existing systems after careful review to remain in line with compliance requirements, expectations of business partners like customers and institutions. Senior management monitors the recommendations of internal audits for continuous system updating. IT System infrastructure is updated regularly to support business decision making as well as better controls.

HUMAN RESOURCES:

The Company recognizes that its employees are its most valuable assets and play a vital role in achieving sustainable growth and long-term business objectives. The Company continues to maintain a healthy, professional and supportive work environment, fostering teamwork, discipline and commitment towards organizational goals.

During the financial year under review, the Company continued to focus on employee engagement, skill development, performance improvement and maintaining harmonious relations with its employees. The Company also ensures compliance with applicable labour laws and statutory requirements relating to its employees.

The Company believes in providing equal opportunities to its employees and maintains a work environment free from discrimination and harassment. The Company is committed to the overall development and welfare of its employees and encourages them to contribute effectively towards the growth and success of the Company. During the year the Company has employed around 120 permanent and on contract based 5 employees on rolls. Further, industrial relations remained peaceful and harmonious during the year.

SEGMENT-WISE PERFORMANCE:

The Company has identified its business segment as Primary Reportable Segment. There are no other Primary Reportable Segment and the Companys Operations fall under a single segment "Spinning of Cotton Yarn". Hence, Segment reporting is not applicable.

FORWARD-LOOKING STATEMENT:

This analysis contains forward-looking statements, which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

Statements made in this Management Discussion and Analysis Report may contain certain forward-looking statements based on various assumptions on the Companys present and future business strategies and the environment in which we operate. Actual results may differ substantially or materially from those expressed or implied due to risk and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India and abroad, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the Companys businesses as well as the ability to implement its strategies. The information contained herein is as of the date referenced and the Company does not undertake any obligation to update these statements. The Company has obtained all market data and other information from sources believed to be reliable or its internal estimates, although its accuracy or completeness cannot be guaranteed.

2025

Ratios	31st March 2026	31st March 2025
Current Ratio (Current assets / Current liabilities)	4.48	9.91
Debt-Equity Ratio (Total debt / Shareholders Equity)	0.06	0.07
Debt Service Coverage Ratio (Earning available for debt service / debt service)	-0.03	-0.04
Return on Equity Ratio (Profit after tax / Shareholders Equity)	-8.80	-6.73
Inventory turnover ratio (Turnover / average inventory)	2.51	3.01
Trade Receivables turnover ratio (Turnover / Average Receivable)	18.24	18.31
Trade payables turnover ratio (Total Purchases / Average Payable)	18.96	22.53
Net capital turnover ratio (Turnover / Working capital)	2.54	3.66
Net profit ratio (PAT / Turnover)	-6.30	-5.03
Return on Capital employed (PBIT / Capital Employed)	-8.77	-6.57
Return on investment	NA	NA

KEY FINANCIAL RATIO

Explanation of Movement of Ratio

1. Current ration; Current ratio has from 9.91 to 4.48, decreased due to decrease in current assets and increase in current liabilities during the year.
2. Debt-Equity Ratio: Debt-Equity Ratio improved marginally from 0.07 to 0.06, mainly due to repayment/reduction of borrowings during the year. The Company continues to have a very low debt level, reflecting a conservative capital structure.
3. Debt Coverage Service Ratio: The DSCR improved slightly from (0.04) to (0.03) decreased due to loss incurred in current year by the company.
4. Return on Equity Ratio: ROE declined from (6.73%) to (8.80%) due to higher losses incurred during the year.
5. Inventory turnover ratio: The Inventory Turnover Ratio decreased from 3.01 to 2.51, indicating comparatively slower movement of inventory during the year, mainly due to lower sales volume and subdued market demand.

6. Trade Receivables turnover ratio: The Trade Receivables Turnover Ratio remained almost unchanged at 18.24 as against 18.31 in the previous year, indicating consistent efficiency in collection of receivables.
7. Trade Payables Turnover Ratio: The Trade Payables Turnover Ratio decreased from 22.53 to 18.96, mainly due to lower purchase volume and changes in payment patterns to suppliers during the year.
8. Net Capital Turnover Ratio: Net capital turnover ratio has decreased on account of increase in the working capital intensity of the Companys operations.
9. Net Profit Ratio: Net profit ratio has decreased due to loss incurred in current year by the company.
10. Return on Capital employed: Return on capital employed has decreased due to loss incurred in current year by the company.

For and on Behalf of Board of Directors AKSHAR SPINTEX LIMITED

Date: 1st September, 2026 Place: Haripar (Jamnagar)

Harry D.Paghdar Director DIN: 11096100

Harikrushna S. Chauhan Chairman Cum Whole Time Director DIN: 07710106