Bannari Amman Spinning Mills Ltd Management Discussions

The Companys principal line of business is manufacturing and marketing of Cotton Yarn, Woven and Knitted fabrics, Home Textiles, Knitted Garments and Processing of fabrics. The Company has two spinning units near Dindigul, Tamilnadu with an installed capacity of 145440 spindles, Weaving and Home Textiles units at Karanampettai near Palladam with an installed capacity of 153 looms, Processing unit at SIPCOT, Perundurai with an installed capacity to process 5400 tonnes of fabric per annum, Knitting unit near Dindigul with installed capacity to produce 5200 tonnes of knitted fabric per annum and 27 Windmills with an installed capacity of 23.40 MW green power which is entirely used for captive consumption.

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, with the capital-intensive sophisticated mills sector at the other end. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk, and wool, to synthetic/man-made fibres like polyester, viscose, nylon and acrylic.

The decentralised power looms/hosiery and knitting sector form the largest component of the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. Indias textiles industry has a capacity to produce a wide variety of products suitable for different market segments, both within India and across the world.

According to Crisil Ratings, the organised retail apparel sector is projected to achieve revenue growth of 8-10% in FY25, driven by few positive factors.

The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 350 billion by 2030. Moreover, India is the worlds 3rd largest exporter of Textiles and Apparel. 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 contributes 2.3% to the countrys GDP, 13% to industrial production and 12% to exports. The textile industry in India is predicted to double its contribution to the GDP, rising from 2.3% to approximately 5% by the end of this decade.

Increasing Global Demand for Textiles India is positioned as a leading supplier of textiles globally. The industry is expected to see significant growth in exports, driven by increasing demand in key markets such as the United States, Europe, and the Middle East. Indias textile exports are projected to reach $45 billion by 2025, up from the $38 billion mark in 2020. This growth is driven by Indias competitive manufacturing costs, skilled labor force, and the push to strengthen its export-friendly policies.

As the world moves toward sustainability, the Indian textile industry is embracing eco-friendly manufacturing practices. Sustainable textiles, organic fibers, and eco-friendly dyes are expected to become standard by 2025. The rise of sustainable brands and an increase in consumer awareness around eco-conscious products are prompting Indian manufacturers to adopt green technologies. Moreover, India is focusing on circular economy principles, recycling, and waste reduction in textile production.

Technological Advancements and Automation Technological innovations are revolutionizing the Indian textile industry. Automation, AI, and IoT (Internet of Things) are streamlining production processes, improving efficiency, and reducing costs. By 2025, we can expect more widespread adoption of technologies like smart textiles, digital printing, and automated stitching machines. The implementation of data analytics for real-time decision-making will also play a crucial role in optimizing supply chains and improving product quality.

The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. India is working on various major initiatives to boost its technical textile industry. The Indian government is playing a pivotal role in transforming the textile sector through various schemes such as the Production Linked Incentive (PLI) Scheme for Textiles and the National Textile Policy. These initiatives aim to boost manufacturing, exports, and job creation.

With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. The growth in textiles will be driven by growing household income, increasing population, and increasing demand by sectors like housing, hospitality, healthcare, etc.

Availability of Cotton, the main raw material for manufacture of Cotton Yarn, is subject to the vagaries of nature and the prices also fluctuate wildly based on supply/demand in the World market and Government policy on export of Cotton. Equally high is the cost of man made fibres which impact the Profitability. There are challenges related to Infrastructure and logistics. Environmental concern is also one of the factors which will have a bearing on the Textile industry performance.

The Company has adequate internal control procedures and systems commensurate with its size and nature of its business for purchase of raw materials, plant and machinery, components and other items and sale of goods. The checks and controls are reviewed by the Audit Committee for improvement in each of these areas on a periodical basis. The internal control systems are improved and modified continuously to meet with changes in business conditions, statutory and accounting requirements.

The financial performance of the Company has been discussed at length in Directors Report to the Members.

Return on Networth 31.3.2025-8.47%

Return on Networth 31.3.2024-(6.90%)

The RONW has turned positive during FY 25 as the operating performance of the Company has improved as compared to previous year.

The Company currently manufactures Cotton yarn, Polyester & Cotton blended yarn, Knitted fabric, Grey and bleached woven fabric, made ups and Processed knit fabric. The medium and long term strategies that will be initiated by the Company are discussed below.

As part of product diversification, the Spinning units have started manufacturing finer counts viz.80s, 100s used in value added applications and also new product mixes produced out of imported cotton for quality sensitive consumers. Production of Polyester and cotton blended yarn commenced during the year.

Knitted fabric production is against orders and emphasis will be on producing value added fabric (Lycra).

Production of fabric is generally against orders. A portion of fabric produced is transferred to Home Textile division for manufacture of value added products. Efforts are underway to identify new markets.

The main products are bleached fabric and madeups like bed linen products meant mainly for exports. Home textiles is one of the focus areas for the Company and efforts are underway to increase the share of Home Textiles products.

The processing division produces dyed fabric for Hosiery segment applications and the production is against orders. Surplus capacity is utilized for job work order.

(Disclosure with limits set by competitive position, medium term and long term strategies as approved by Board of Directors)