Betex India Ltd Management Discussions

REPORT

This chapter on Managements Discussion and Analysis (MD&A") is to provide the stakeholders with a greater understanding of the Companys business, the Companys business strategy and performance, as well as how it manages risk and capital.

The following management discussion and analysis is intended to help the reader to understand the results of operation, financial conditions of BETEX INDIA LIMITED.

(1) ECONOMIC OVERVIEW, INDUSTRY STRUCTURE AND DEVELOPMENTS:

GLOBAL ECONOMY

The global economy remained resilient during FY 2025-26, notwithstanding a challenging operating environment characterised by geopolitical tensions, changes in trade policies, elevated policy uncertainty and divergent growth trends across major economies. Global economic activity continued to expand, supported by resilient domestic demand in several economies, improving financial conditions and continued investment in technology. However, the pace of growth remained moderate and uneven, with the global economy continuing to adjust to a changing trade and policy landscape.

According to the International Monetary Fund (IMF), global growth is projected at 3.3% in 2026 and 3.2% in 2027, broadly in line with the estimated growth rate of 3.3% in 2025. The resilience of global growth has been supported by technology-related investment, fiscal and monetary policy support, relatively accommodative financial conditions and the adaptability of the private sector. At the same time, growth prospects remain subject to significant downside risks arising from geopolitical tensions, changes in trade policies and a possible reassessment of expectations surrounding technology investment.

The international trade environment underwent significant changes during the year. The increase in tariffs and the adoption of protectionist trade measures by major economies contributed to greater uncertainty around global trade and investment flows. Businesses increasingly focused on strengthening supply-chain resilience, diversifying sourcing and markets, and adapting their operating models to a more fragmented global trade environment. The OECD expects global trade growth to moderate in 2026 as the impact of higher tariffs progressively feeds through to trade and investment activity.

Inflation continued to moderate across several economies during FY 2025-26, although the pace of disinflation remained uneven. The decline in inflation from the elevated levels witnessed in earlier years provided greater scope for monetary policy normalisation in some economies. However, persistent services inflation, commodity-price movements, trade-related cost pressures and geopolitical developments continued to pose risks to the inflation outlook. The IMF expects global inflation to continue declining, while noting that inflation in some major economies, particularly the United States, is expected to return to target more gradually.

Monetary and financial conditions also remained an important influence on global economic activity. As inflationary pressures moderated, expectations of monetary policy easing supported financial conditions in several markets. However, differences in inflation trends and economic performance resulted in divergent monetary policy trajectories across economies. Elevated public debt levels, fiscal constraints and the potential for renewed volatility in financial and currency markets remain important considerations for policymakers and businesses.

A notable feature of the global economy during the year was the increasing role of technology-led investment, particularly in artificial intelligence, semiconductors, data infrastructure and digital technologies. Technology-related investment supported economic activity and international trade, partly offsetting the impact of higher trade barriers and policy uncertainty. The IMF has identified technology investment as one of the key factors supporting global growth, while also highlighting the possibility that a reassessment of technology-related expectations could create downside risks to investment and financial markets.

The global economic environment therefore remained one of resilience accompanied by heightened uncertainty. While continued technology investment, private-sector adaptability and moderating inflation provide grounds for cautious optimism, the outlook remains sensitive to geopolitical developments, trade-policy changes, commodity prices, financial conditions and the sustainability of the current investment cycle. The coming year is expected to be characterised by continued structural shifts in global supply chains, evolving trade relationships and increasing adoption of technology, requiring businesses to remain agile and responsive to changes in the external environment.

INDIAN ECONOMY

The Indian economy demonstrated strong resilience during FY 2025-26 and continued to remain among the fastest-growing major economies globally, despite an uncertain and challenging external environment. According to the Second Advance Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) in February 2026, Indias real GDP is estimated to grow by 7.6% in FY 2025-26, compared with 7.1% in FY 2024-25. The growth momentum remained broad-based, supported by resilient domestic demand and strengthening activity across key sectors.

However, our approach is to stay close to our customers, understand their challenges, The Company has accelerated its cost optimisation drive across the value chain to further improve its operational efficiency. The execution excellence initiatives pursued to optimise efficiencies, reduce cost and eliminate wastage has been adopted across functions and processes.

OPPORTUNITIES & THREATS:

Opportunities

The Indian textile industry continues to offer significant opportunities for growth, supported by Indias large domestic market, established manufacturing base and increasing integration with global value chains. Growing global demand for man-made fibre (MMF) products, technical textiles and value-added textile products provides opportunities for Indian manufacturers to diversify beyond traditional cotton-based products and move towards higher-value segments. The technical textiles segment, with applications across healthcare, infrastructure, automotive and defence, also offers significant potential for growth.

Government initiatives continue to support the sectors competitiveness and expansion. During FY2025-26, the Production Linked Incentive (PLI) Scheme for MMF apparel, MMF fabrics and technical textiles was revised to encourage investment, expand eligible product categories and facilitate wider participation. The PM-MITRA Parks and National Technical Textiles Mission continued to support integrated infrastructure, technology, innovation and development of the technical textiles ecosystem. Further, the withdrawal of several Quality Control Orders (QCOs) in the MMF and viscose value chains during November 2025 is expected to ease raw-material constraints and support the competitiveness of domestic manufacturers.

Threats

The Indian textile industry continues to face structural and competitive challenges, including fragmentation of the value chain, relatively small scale of operations, higher logistics and input costs, limited technology adoption and skill gaps. Indias significant dependence on cotton also presents a challenge as global textile demand continues to shift towards man-made fibre (MMF)-based products. These factors can affect productivity, cost efficiency and the industrys ability to compete effectively in global markets.

The industry faces intense competition from major textile-producing countries, particularly in export markets, where differences in scale, cost structures, supply-chain integration and trade access can influence Indias competitiveness. Evolving global trade policies and geopolitical uncertainties may further impact international trade and export demand. At the same time, increasing environmental and sustainability requirements in key export markets are raising compliance, technology and investment requirements for textile manufacturers.

The industrys ability to manage input costs, improve productivity, adopt advanced technologies, diversify its product portfolio and strengthen sustainable manufacturing practices will remain important to maintaining competitiveness and capturing growth opportunities.

(2) OUTLOOK:

Despite the challenging global landscape during the year, India emerged as the fastest-growing major economy, driven by a robust push in capital formation with public investment leading the path. The large domestic consumption basket in the country also supported this growth, though overall, it showed signs of moderation from the earlier years. Government-led strategic reforms, substantial investments in physical and digital infrastructure, and initiatives like Make in India and the Production-Linked Incentive (PLI) scheme bolstered the countrys growth, resilience, and self-reliance.

Looking ahead, reviving consistent demand in the domestic market will be essential for the Companys sustained growth. In response to these challenges, the Company is actively exploring new business avenues, including expanding its presence, to diversify revenue sources and ensure long-term stability.

With completion of necessary capital expenditure to rampup the plants, the operations of the company are gradually increasing. The human resources required to cope-up with the growth requirements of the company are also gradually being put in place. The company is progressively improving its capacity utilization and regaining its market share. It is also generating adequate cash-flows to meet its obligations. The outlook for the Company can therefore be termed as optimistic and expects higher growth then inflation and average grow thin the industry.

(3) RISK AND CONCERNS:

As a diversified enterprise, the Company believes that, periodic review of various risks which have a bearing on the business and operations is vital to proactively manage uncertainty and changes in the internal and external environment so that it can limit negative impacts and capitalize on opportunities.

Risk management framework enables a systematic approach to risk identification, leverage on any opportunities and provides strategies to manage, transfer and avoid or minimize the impact of the risks and helps to ensure sustainable business growth with stability of affairs and operations of the Company. The risks and concerns associated with our companys business are discussed while reviewing Management and Discussion Analysis. The other risks that the management reviews also include:

1. Industry & Services Risk: This includes Economic risks like demand and supply chain, Profitability, Gestation period etc.; Services risk like infrastructure facilities; Market risk like consumer preferences and distribution channel etc.; Business dynamics like inflation/deflation etc.; Competition risks like cost effectiveness.

b) Management and Operational Risk: This includes Risks to Property; Clear and well-defined work process; Changes in technology / up gradation; R&D Risks; Agency network Risks; Personnel & labour turnover Risk; Environmental and Pollution Control Regulations etc.; Locational benefits near metros.

c) Market Risk: This includes Raw Material rates; Quantities, quality, suppliers, lead time, interest rate risk and forex risk.

The Company monitors price fluctuations and follows inventory management and responsive procurement policy to ensure timely procurement of raw materials at competitive prices. It also engages in contracts with clients and tries to pass on variations in the prices of raw materials to them to protect margins.

d) Liquidity Risk: This includes risks like financial solvency and liquidity; Borrowing limits, delays; Cash/Reserve management risks and Tax risks.

e) Disaster Risk: This includes Natural calamities like fires, floods, earthquakes etc.; Manmade risk factors arising under the Factories Act, Mines Act etc.; Risk of failure of effective disaster Management plans formulated by the Company.

The Company prioritises the safety of its stakeholder community and ensures business survival during unpredictable crises. It has a well-designed safety management policy that eliminates/reduces the risk of workplace incidents. Its proper implementation and updation enable effective prevention besides equipping the employees to handle any incident that may occur. To reduce exposure to fire-related hazards, it has placed pressurised fire protection and related systems at strategic locations to deal with any fire-related incidents.

f) Government Policy: This includes Exemptions, import licenses, income tax and sales tax holidays, subsidies, tax benefits etc. Further your Board has constituted a Risk Management Committee, inter-ala, to monitor and review the risk management framework.

g) Competition Risk: We face competition from existing players and potential entrants in the Indian textile industry. The Indian textile industry is highly competitive both in the Dying & Printing Process. Domestic production is dominated by few organized players who have integrated facilities and large economies of scale and the unorganized sector is virtually absent.

h) Technology Risk: The Company gives utmost importance to technology and proactively invests in R&D, modern and sustainable technologies, machinery and equipment for improving the manufacturing process, and quality and strengthening its product portfolio to cater to emerging market trends.

(4) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company maintains a comprehensive internal control framework covering its operational and financial activities to support effective governance and accountability. The control systems are periodically reviewed and strengthened wherever required to ensure that applicable policies, procedures, guidelines, and regulatory requirements are followed consistently and transparently. Appropriate monitoring mechanisms and qualified personnel are in place across various functions to ensure the effective implementation of these controls. The internal audit framework is also reviewed on a regular basis and updated as necessary, with a focus on protecting the Companys assets, ensuring regulatory compliance, improving operational discipline, and enabling timely resolution of identified matters.

The Internal audit covers all areas of activities with periodical reports submitted to the Management. Internal Auditors submit their quarterly report to the Audit Committee and are invited to the meeting to clarify any issues that may be raised by the Committee members. The Audit Committee reviews all financial statements to ensure adequacy of internal control systems. The Company has a well-defined organization structure, authority levels and internal rules and guidelines for conducting business transactions.

The Audit Committee is headed by an Independent Director and this ensures independence of functions and transparency of the process of supervision. The committee makes note of the audit observations and takes corrective actions, if necessary. It maintains constant dialogue with statutory auditors to ensure that internal control systems are operating effectively. Based on its evaluation (as provided under Section 177 of the Companies Act, 2013 and Clause 18 of SEBI Listing Regulations), the Audit Committee has concluded that as of March 31, 2026, the Internal Financial Controls were adequate and operating effectively. The Company conducts its business with integrity and high standards of ethical behaviour and in compliance with the all applicable laws and regulations that govern its business.

5) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Particulars	2025-26	2024-25
Revenue from operations	10033.85	9637.99
Other Income	217.47	97.15
Profit before Interest, Depreciation & Tax	924.27	447.10
Less: Finance Cost	67.83	74.89
Profit before Depreciation and Tax	856.44	372.21
Depreciation	94.09	100.61
Profit before Tax	762.36	271.60
Current tax	188.39	73.92
Mat Credit	-	-
Deferred Tax	10.97	2.19
Profit after Tax	566.63	195.49

During the year under review, the Company recorded higher Revenue from Operations of ?10,033.85/- lakhs as compared to ?9,637.99/- lakhs in the corresponding previous year. The company has posted lower Finance Costs of ?67.83 lakhs as compared to ?74.89 lakhs in the corresponding previous year. Further, lower manufacturing costs and depreciation contributed to improved profitability. The Company reported a higher Net Profit after Tax of ?566.63/- lakhs as compared to ?195.49/- lakhs in the corresponding previous year.

(6) HUMAN RESOURCES & INDUSTRIAL RELATIONS:

Your Company treats its Human Resources as an essential asset and believes in its contribution to the overall growth of your Company. Your Company takes steps, from time to time, to upgrade and enhance the quality of this asset and strives to maintain it in an agile and responsive form. Your Company is an equal opportunity employer and practices fair employment policies. Your Company is confident that its Human Capital will effectively contribute to the long-term value enhancement of the organization.

Your Directors further state that during the year under review, no cases were filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

A) Recruitment Policy

The Company has been able to attract a team of dedicated professionals with appropriate expertise and experience, leaders who are passionate, eager to learn and succeed.

Recruitment based on merit by following well defined and systematic selection procedures eliminating discrimination, sustain motivated and quality work force through appropriate and fair performance evaluation to retain the best talent. Various training programs, with internal and external experts are organized regularly for skill up gradation. The sincere efforts of the employees have resulted in major administrative expense savings.

B) Performance Appraisal System

A competency based performance appraisal system has been devised and implemented the same across the organization. The best performers get recognized and rewarded by the management with the objective of motivating them for further improved performance. Employees are promoted to higher positions on the basis of their performance, attitude and potential to motivate them for further improvement in their work.

C) Personnel Training

The company from time to time fosters a culture of training, people development and meritocracy to ensure that the maximum efficiencies are derived from its human capital. The newly recruited employees undergo a comprehensive induction program. The employees underwent both functional/technical and behavioural training that would eventually result in improved productivity. Safety training is given on regular basis to all employees including temporary employees.

D) Labour Relations

On the labour front, during the year, there were no incidents of labour unrest or stoppage of work on account of labour issues and relationship with them continues to be cordial. To increase team spirit inter department tournaments are organized and various festivals are celebrated in the company.

E) Industrial relations

The Industrial relations remained cordial throughout the year and the Board records its appreciation for the contribution of all employees towards the growth of the company without which the achievements made, would not have been possible. As of 31 March 2026, the Company has 993 employees on roll.

(7) DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO:

9) STATUTORY COMPLIANCE

The Whole-time Directors and CFO makes a declaration in the Board Meetings from time to time regarding the compliance with the provisions of various statutes, after obtaining confirmation from all the units of the Company. The Company Secretary ensures compliance accordance to SEBI regulations and provisions of the Listing Agreement.

Corporate Social Service

The company is committed to its corporate social responsibility and undertakes programs that are sustainable and relevant to local needs. The Company works for sustainable development by achieving excellence in its key functional areas including safety, business operations, process management, busines reults, climate change, carbon footprint reduction, energy and water management, Medical Aid, community development, customer promise and engagement, governance and compliance, human capital, and innovation under its CSR program.

The Company contributes to the development of its community near the plant at G.I.D.C., Pandesara as well as through employee volunteerism as a part of its Corporate Social Responsibility in the areas of education, training, health care and self-employment.

(10) CAUTIONARY STATEMENT

This document contains forward-looking statements about expected future events, financial and operating results of the Company. These forward-looking statements are based on assumptions and the Company does not guarantee the fulfillment of the same. These statements may be subject to risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of Betex India Limiteds Annual Report, 2025-26.

For and on behalf of the Board of Directors

MAHESHKUMAR SOMANI

Chairperson

DIN: 0010644