Banswara Syntex Ltd Management Discussions

The global economic outlook remains cautiously optimistic, though not without challenges. While global growth continues, it faces some pressure from evolving trade dynamics, intermittent geopolitical tensions, and selective protectionist policies among major economies. These factors have the potential to introduce volatility in global financial markets and cause short-term disruptions in supply chains. Nonetheless, many economies are showing signs of stability, supported by policy interventions and gradual recovery in global trade. Businesses across sectors, including textiles, are closely monitoring these developments for their potential impact on input costs and export demand.

On the domestic front, Indias economic activity remains resilient, supported by consumption demand, a robust services sector, and a favourable outlook for agriculture. The governments continued focus on capital expenditure, along with sound corporate and banking sector balance sheets, provides further impetus to the growth momentum. Measures announced in the Union Budget 202526 are expected to strengthen domestic consumption and sustain the recovery. Moreover, the adherence to fiscal consolidation without compromising on the quality of expenditure is likely to enhance investor confidence, improve sovereign ratings, and support capital inflows. With inflation projected to align with the target on account of a favourable food inflation outlook, the monetary policy framework continues to aim at maintaining macroeconomic stability while supporting sustained economic growth.

Source: RBI

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian textiles and apparel industry continues to play a pivotal role in the countrys economic development, contributing approximately 2.3% to the national GDP, 13% to industrial production, and 10.5-12% to total exports. With strategic support and increasing global demand, the sector is projected to double its GDP contribution to around 5% by the end of this decade. India is currently the worlds second-largest producer and the third-largest exporter of textiles and garments, ranking among the top five global exporters in several textile categories. The domestic textiles and apparel market is expected to grow at a compound annual growth rate (CAGR) of 10% to reach US$ 350 billion by 2030. Export performance has remained robust, with total exports projected to reach US$ 100 billion by FY30.

In parallel, the technical textiles segment is emerging as a high-potential growth area. India is the fifth-largest market globally in this segment, with a penetration level of 9-10% and an expected annual growth rate of 10%. The global technical textiles market is projected to reach US$ 309 billion by 2047, providing significant export and investment opportunities for Indian manufacturers. The Indian textile sector remains a cornerstone of the countrys industrial and export ecosystem, well-positioned for sustained long-term growth.

The Free Trade Agreement (FTA) between India and the United Kingdom marks a significant milestone, offering a modern and comprehensive framework for deep economic integration, trade liberalisation, and tariff concessions. This landmark agreement ensures broad market access for Indian goods across all sectors, addressing Indias key export interests. With tariff elimination on approximately 99% of tariff lines, covering nearly 100% of trade value, the FTA is expected to significantly boost bilateral trade between the two nations.

OPPORTUNITIES AND THREATS

The Indian textile and apparel industry offers immense growth potential, fuelled by the abundant availability of raw materials such as cotton, wool, silk, and jute, coupled with cost-effective and skilled manpower. With over 45 million people employed and an annual production of approximately 22,000 million garments, the sector demonstrates robust manufacturing capacity. Government support plays a critical role in this growth, with initiatives such as 100% FDI under the automatic route, a 19% increase in the Ministry of Textiles budget allocation to Rs5,272 crore (US$ 607 million) for FY 2025-26, and the launch of a five-year Cotton Mission aimed at boosting productivity, reducing import dependence, and strengthening MSMEs. The market is projected to reach US$ 350 billion by 2030, driven by strong export performance US$ 21.3 billion during April-October FY25 dominated by readymade garments (41%), cotton textiles (33%), and man-made textiles (15%). Furthermore, the technical textiles segment is poised to reach US$ 23.3 billion by 2027, while cotton production is expected to touch 7.2 million tonnes by 2030, creating further opportunities for domestic growth and global competitiveness.

However, the industry also faces several challenges. Intense global competition from low-cost producers, volatility in raw material prices, and evolving consumer preferences toward fast and sustainable fashion create ongoing market pressure. Regulatory challenges, rising labour costs, and environmental concerns heighten compliance burdens and operational risks. Additionally, rapid technological changes require continuous investment in innovation and automation to stay competitive. The sector is also vulnerable to supply chain disruptions from geopolitical tensions, natural disasters, or pandemics, along with currency fluctuations that affect export margins.

GOVERNMENT INITIATIVES

I. Production Linked Incentive (PLI) Scheme: The PLI Scheme for Textiles to promote production of MMF apparel, MMF Fabrics and Products of Technical Textiles in the country to create 60-70 global players, attract fresh investment of Rs 19,000 crores approximately and generate almost 7.5 lakh new employment opportunities.

II. PM-MITRA: To attract investment for ‘Make In India initiative and to boost employment generation through setting up of 7 (Seven) PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks in Greenfield/Brownfield sites with world class infrastructure including plug and play facility with an outlay of Rs 4445 crore for a period of seven years up to 2027-28.

III. Free Trade Agreement: The recently concluded Free Trade Agreement (FTA) between India and the United Kingdom represents a landmark development in Indias trade policy, aimed at fostering deep economic integration through trade liberalisation and tariff concessions. As a modern and comprehensive agreement, the FTA ensures extensive market access for Indian goods across all sectors, fully addressing Indias export interests. India stands to benefit significantly from the elimination of tariffs on approximately 99% of the tariff lines, covering nearly 100% of the trade value. This is expected to open substantial avenues for enhanced bilateral trade between India and the UK, strengthening Indias export competitiveness and creating new growth opportunities for key sectors.

RISKS & CONCERNS

Management Discussion and Analysis mainly comprise the statements which may, inter alia, involve predictions based on perceptions and may, therefore, be prone to risks and uncertainties. It is the sum of the Companys expectations, beliefs, estimates and projections which may be forward looking or depressing within the meaning of applicable laws and regulations. The actual results could differ materially from those expressed herein specifically or impliedly. The shareholders are cautioned to keep this in view in conjunction with the Companys financial statements.

SEGMENT-WISE PERFORMANCE

The core business of the Company is manufacturing and marketing of spun synthetic blended yarn, wool and wool mix yarn, spun synthetic and worsted fabrics and cotton & linen fabrics besides readymade garments. The Company also produces shirting and technical fabrics. During the year revenue from operation of all three divisions of the Company as follow;

Division	Revenue (Rs In Lakh)	Sale Volume
Yarn	45959	206 Lakh Kgs.
Fabric	54053	232 Lakh Mtrs.
Garment	27535	37 Lakh Pcs.
Others	1623	N.A

OUTLOOK

Your Company remains well-positioned to capitalize on strong domestic demand and emerging global opportunities across textiles and apparel. With steady recovery in key export markets like the US and Europe, and the added advantage of the recently signed India-UK FTA, we foresee a favourable environment for growth. Continued government support through initiatives like the PLI scheme and MITRA parks is expected to further enhance industry competitiveness. To seize these opportunities, the Company is strengthening its operational capabilities and deepening its focus across Yarn, Fabric, and Garment divisions, laying the foundation for sustained and scalable growth.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The operating performance of the Company has been detailed in the Directors Report under the heads ‘Financial Statements and Operations and State of Affairs.

The Indian textile and apparel industry is poised for robust growth, supported by strong domestic demand, rising disposable incomes, a growing middle class, and shifting consumer preferences toward quality and branded products. Global opportunities continue to expand, with the apparel market and trade projected to grow steadily over the next few years. Government initiatives such as the Production-Linked Incentive (PLI) scheme and proposed MITRA parks aim to boost manufacturing capacity and export competitiveness. A notable boost comes from the recently signed India-UK Free Trade Agreement, which is expected to enhance export competitiveness by eliminating tariffs and providing a level playing field.

The profit before interest, depreciation, and tax (PBIDT) during 2024-25 has been Rs11721 Lakh as against Rs 12058 Lakh during 2023-24. The profit before depreciation and tax (PBDT) has been Rs 7762 Lakh as against Rs 9096 Lakh during 2023-24. The Net Profit earned during the year is Rs 2139 Lakh as against Rs 3525 Lakh in 2023-24.

In Q4 FY25, the company experienced a slight decline in total income, primarily due to lower production volumes and weak domestic demand. Despite this, EBITDA margins remained stable, aided by a favourable shift in product mix and the stabilization of power and fuel costs.

However, profitability was impacted as profit after tax dropped, mainly due to increased finance costs and some exceptional items during the quarter. Additionally, the companys net debt rose, largely driven by higher working capital requirements and investments in plant modernization and machinery upgrades. Despite the increase in debt, the overall capital structure remains within a comfortable range.

INTERNAL CONTROL SYSTEMS & ADEQUACY

A detailed note on internal control systems and adequacy has been mentioned in the Boards Report.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

As required, the following are the key ratios having significant changes i.e. change 25 % or more as compared to the previous financial year:

Key Ratios

Particulars	31s* March 2025	31st March 2024	Changes in %
Current Ratio	1.48	1.60	(7.26)
Debt-Equity Ratio	0.81	0.66	22.59
Interest Coverage Ratio (Debt Service Ratio)	1.02	1.27	(20.09)
Return on Equity Ratio	0.04	0.07	(42.06)
Inventory turnover Ratio	4.42	4.32	2.40
Debtors turnover Ratio (Trade Receivable Ratio)	6.32	6.03	4.81
Net Profit Margin Ratio	0.02	0.03	(40.61)
Return on Net Worth ( Return Capital Employed)	0.07	0.09	(21.13)
Operating Profit Margin Ratio	0.05	0.06	(16.67)

Please refer to Note No. 54 of Standalone Financial Statement for the reason of more than 25% variance.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Banswara Syntex Limited continues to believe that its human capital is its most invaluable asset. The company remains dedicated to investing in its people by enhancing their capabilities, honing their expertise, and fostering a spirit of leadership. This approach ensures a dynamic and innovative workplace environment.

Key Initiatives in FY25:

1. Management Trainees Program: The Company has introduced a comprehensive management trainees program aimed at grooming future leaders by providing hands-on experience and mentorship. This program recruits fresh graduates from leading institutions and immerses them in various aspects of the business.

2. Internship Program: Banswara Syntex Limited offers an extensive internship program that provides students with practical experience in the textile industry. Interns are mentored by experienced professionals and given opportunities to work on real time projects, thus preparing them for future roles within the industry.

3. Training & Development Program:

o Team Building/Interpersonal Skills: Regular workshops are conducted to improve team dynamics and interpersonal skills among employees.

o Personality Development Program: Focused on junior and middle level staff to enhance their confidence level to deal with various situations in and out of the work.

o Leadership Training Program: Focused on middle and senior-level managers, this program enhances leadership capabilities through advanced management training modules.

4. Standardizing HR Practices and Policies: The Company has taken steps to standardize HR practices and policies across all its divisions and locations ensuring consistency, fairness, and compliance throughout the Banswara group.

5. Strengthening the Compliance Structure: Efforts are being made to reinforce the companys compliance structure, ensuring adherence to all legal and regulatory requirements, thereby minimizing risks and enhancing governance.

6. Employee Engagement: Many events have been organized to foster a sense of community and enhance employee morale. Such activities encourage teamwork, celebrate cultural diversity, and provide a platform for employees to relax and rejuvenate. Below is a staff count as on March 2024 and March 2025.

LOCATION	March 2024	March 2025
Banswara	1008	920
Daman	287	243
Mumbai	136	125
Surat	111	36
TOTAL	1,542	1,324

7. Vartalaap: The Company has introduced “Vartalaap”, a one-to-one employee grievance redressal session between employees and HR. This initiative aims to address employees concerns effectively, giving them a sense of belongingness and fostering a transparent and supportive workplace culture.

These initiatives underscore Banswara Syntex Limiteds commitment to nurturing its human resources and creating an environment that promotes growth, engagement, and well-being for all the employees.

The industrial relations in all units of the Company continue to be cordial. The skills, experience and passion of our people facilitate deeper customer understanding and engaging relationships and strengthen our brand value as a preferred employer. We continue to step up efforts to accelerate our value-based growth strategy and the overall development of human capital. We nurture our people by investing in their empowerment through learning and development, wellness, and safety besides providing workplace facilities.

CAUTIONARY STATEMENTS

Statements in this Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations, or predictions, may be “forward looking statements” within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.

For and behalf of the Board of Directors

	Sd /-
	Rakesh Mehra
Place: Mumbai	Chairman
Dated: 15th May, 2025	DIN: 00467321