APM Industries Ltd Management Discussions

Annexure-6

[Schedule V-Regulation 34(3) of SEBI (LODR) Regulations, 2015]

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian textile industry is one of the oldest and most significant sectors of the countrys economy, contributing substantially to industrial output, exports and employment. The industry encompasses the entire textile value chain, ranging from fiber and yarn manufacturing to fabrics, garments, home textiles and technical textiles.

India continues to be one of the worlds leading producers of textiles and apparel, supported by abundant raw material availability, a large and skilled workforce, a well-established manufacturing base and increasing adoption of modern technology. The country is among the largest producers of cotton and man-made fibers and has emerged as a preferred sourcing destination for global textile buyers due to its quality standards, diversified product portfolio and competitive manufacturing capabilities.

The Government of India continues to support the growth of the textile sector through various policy initiatives, including the Production Linked Incentive (PLI) Scheme, PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks, National Technical Textiles Mission (NTTM) and other initiatives aimed at enhancing competitiveness, attracting investments and promoting exports. Increasing emphasis on sustainability, digitalisation and value-added products is expected to further strengthen the long-term prospects of the industry.

During the financial year 2025–26, the Indian textile industry witnessed stable domestic demand despite global economic uncertainties. The domestic market continued to benefit from increasing urbanisation, rising disposable incomes, expanding organised retail and growing preference for quality textile products. At the same time, manufacturers remained focused on improving operational efficiencies, reducing costs and adopting sustainable manufacturing practices to remain competitive.

2. OPPORTUNITIES & THREATS

The Indian economy continued to demonstrate resilience during the financial year 2025–26 despite global geopolitical uncertainties, inflationary pressures and volatility in commodity markets. Supported by strong domestic consumption, public capital expenditure, manufacturing growth and ongoing structural reforms, India remains one of the fastest-growing major economies globally. These favourable macroeconomic conditions, coupled with rising disposable incomes, increasing urbanisation, expanding organised retail, evolving consumer preferences and various Government initiatives to promote manufacturing, technical textiles, exports and infrastructure, continue to create significant growth opportunities for the Indian textile industry.

However, the textile industry continues to operate in a highly competitive environment and remains exposed to several external and internal challenges. Fluctuations in the prices of raw materials, including cotton, man-made fibres, dyes and chemicals, as well as volatility in natural gas, energy and logistics costs, may adversely impact operating margins. Global economic uncertainties, geopolitical developments, changing trade policies, foreign exchange fluctuations, stringent environmental and sustainability regulations, supply chain disruptions, labour shortages and rapidly evolving consumer preferences continue to pose risks to business performance. The industry also faces intense competition from both domestic manufacturers and low-cost exporting countries.

The Company continues to focus on operational efficiency, product quality, cost optimisation, prudent procurement practices and continuous technological improvements to enhance operational resilience and competitiveness. These initiatives are aimed at effectively managing business risks while enabling the Company to capitalise on emerging growth opportunities and deliver sustainable long-term value.

3. SEGMENT-WISE PERFORMANCE

The Company is engaged in the business of manufacturing and selling of man-made fiber yarn in India and operates in a single business segment. Accordingly, segment-wise performance is not applicable.

During the financial year 2025–26, the Company continued to focus on operational efficiency, product quality, cost optimisation and customer satisfaction. The Companys products continued to enjoy strong acceptance in the domestic market. In line with its business strategy, the Company did not undertake any export activities during the year and remained focused on catering to domestic demand.

4. OUTLOOK

The Indian textile industry is expected to witness gradual improvement over the medium to long term, supported by recovery in domestic demand, increasing urbanisation, rising disposable incomes and continued policy support from the Government. While the industry continues to face challenges arising from geopolitical uncertainties, global economic slowdown and changing trade dynamics, long-term growth prospects remain positive. Government initiatives to promote domestic manufacturing, man-made fibres (MMF), technical textiles, infrastructure development and technological upgradation are expected to enhance the competitiveness of the Indian textile sector and create opportunities for sustainable growth.

The Company expects demand for synthetic blended yarn to remain stable, supported by growth in the apparel, home furnishing and textile sectors. The Companys continued focus on product development, quality improvement, operational efficiency, cost optimisation, energy conservation and customer satisfaction are expected to strengthen its competitive position, even though global economic uncertainties, geopolitical developments, sluggish domestic market, low cost imports and changing trade dynamics may continue to pose challenges.

5. RISKS & CONCERNS

The Company continues to operate in a dynamic business environment that is influenced by various domestic and global factors. Volatility in the prices of key raw materials, including polyester staple fiber, viscose staple fiber and other inputs, as well as fluctuations in energy costs, particularly natural gas and electricity, may impact the Companys operating margins and profitability.

The textile industry also faces intense competition from both domestic manufacturers and overseas suppliers. Changes in customer preferences, evolving environmental and sustainability standards, regulatory developments and geopolitical uncertainties may affect market conditions and business operations. In addition, inflationary pressures, supply chain disruptions and fluctuations in foreign exchange rates may have an indirect impact on the Companys business.

The Company continuously monitors these risks and adopts appropriate mitigation measures through prudent procurement practices, effective inventory management, product diversification, operational efficiency, energy conservation initiatives and a strong focus on quality. The management remains committed to strengthening the Companys competitive position while effectively managing business risks.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate system of internal controls commensurate with the size, scale and complexity of its business operations. The internal control framework is designed to ensure the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

Well-defined policies, standard operating procedures and delegated authority matrices are in place to ensure effective financial and operational controls. The Company regularly reviews its internal control systems to enhance their effectiveness and align them with changing business requirements.

The Audit Committee of the Board periodically reviews the adequacy and effectiveness of the internal control systems, internal audit reports and compliance with statutory requirements. The Internal Auditors carry out periodic audits across various functional areas, and their observations and recommendations are reviewed by the management and the Audit Committee. Appropriate corrective actions are implemented wherever necessary.

The Statutory Auditors also evaluate the adequacy of internal financial controls over financial reporting as part of their audit. The management believes that the existing internal control systems are adequate and operating effectively.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year 2025–26, the Company continued to focus on improving operational efficiency, optimizing costs and strengthening its presence in the domestic market.

The Company did not undertake any export activities during the year and continued to focus on the domestic market, where its products enjoy strong customer acceptance and offer better operational profitability.

(Rs. in Lakhs)

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time. There has been no change in the accounting policies or accounting treatment adopted by the Company during the financial year.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company firmly believes that its employees are its most valuable asset and play a pivotal role in achieving sustainable growth. The Company continues to foster a culture of integrity, teamwork, innovation and continuous learning while providing equal opportunities for professional development and career progression.

The Company places significant emphasis on employee engagement, skill development, occupational health and safety, and maintaining a safe, healthy and inclusive working environment. Various initiatives are undertaken to enhance employee capabilities and improve productivity across all levels of the organization.

Industrial relations during the financial year remained cordial and harmonious. The management maintains regular interaction with employees to ensure a positive work environment and address concerns in a timely manner.

As on March 31, 2026, the Company had 1,722 employees on its rolls.

9. LONG TERM AND SHORT TERM STRATEGY OF COMPANY

The Companys business strategy is focused on achieving sustainable growth through operational excellence, product quality, cost competitiveness and responsible business practices.

The Company continues to invest in modernization, energy-efficient technologies and process improvements to enhance productivity and reduce operating costs. Continuous emphasis is placed on product development, customer satisfaction and strengthening relationships with existing customers while exploring new business opportunities in the domestic market.

Water Conservation

Water conservation continues to be an integral part of the Companys sustainability initiatives. Rainwater harvesting systems and groundwater recharge facilities established by the Company continue to support water conservation and groundwater replenishment in and around its manufacturing facilities.

The Company also continues to maximize reuse of treated water through its Effluent Treatment Plant (ETP), Multi-Effect Evaporator (MEE) and Sewage Treatment Plant (STP), thereby minimizing freshwater consumption and promoting sustainable water management.

Renewable Energy and Energy Conservation

The Company remains committed to increasing the use of renewable energy and adopting energy-efficient technologies. The 2.72 MW ground-mounted/rooftop solar power plant continued to contribute towards reducing dependence on conventional power sources and lowering the Companys carbon footprint.

During the financial year 2025–26, the solar power plant generated approximately 30.37 lakh kWh of electricity. The Company also implemented various energy conservation measures, including replacement of conventional lighting with energy-efficient lighting, installation of energy-efficient equipment and continuous monitoring of energy consumption, thereby improving operational efficiency and reducing overall energy costs.

The management will continue to focus on technological upgradation, sustainable manufacturing practices and efficient utilization of natural resources to create long-term value for all stakeholders.

10. KEY FINANCIAL RATIOS

The key financial ratios of the Company and the reasons for significant changes (25% or more) therein, as compared to the previous financial year, are set out below:

11. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, expectations, estimates, projections or predictions may constitute ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, government policies, taxation, raw material prices, market demand, competition, technological developments, foreign exchange fluctuations and other factors beyond the Companys control.

The Company undertakes no obligation to publicly amend, modify or revise any forward-looking statements based on subsequent developments, information or events.