Bharat Textiles & Proofing Industries Ltd Management Discussions

The Management Discussion and Analysis Report has been prepared in accordance with the provisions of Regulation 34(2)(e) of Listing Regulations, read with Schedule V(B) thereto, with a view to provide an analysis of the business and Financial Statements of the Company for the financial year and should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Integrated Report. The objective of this report is to convey the Managements perspective on the external environment and our industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the financial year.

1. Industry Structure and Developments:

Indian Economy

India s textile sector is one of the nation s oldest and most diverse industries, deeply rooted in centuries-old traditions. The Union Budget 2026 27 places the textile sector at the heart of India s growth, underlining its strategic importance to the economy. By prioritizing this labor-intensive industry, the Budget acknowledges textiles as a key driver of job creation, export growth, rural livelihoods and sustainable manufacturing.

Notably, the Indian textile sector possesses significant intrinsic strengths- the country is the worlds largest cultivator of cotton by acreage , the largest producer of jute , the second-largest producer of silk and cotton , second major global hub in the man-made fibers (MMF) segment and the second-largest producer of polyester and viscose fibers . In the Union Budget 2026-27 , a comprehensive and integrated policy framework has been declared to bolster the entire textile value chain- from fiber to fashion, from village industries to global markets. Integrated Programme for the Textile Sector

With the objective of boosting competitiveness, fostering self-reliance and creating jobs, the Government has proposed an Integrated Programme for the textile sector, structured around four sub-components:

National Fiber Scheme: This scheme aims to build self-reliance across the fiber spectrum by supporting natural fibers such as silk, wool, and jute, alongside man-made fibers (MMF) and new-age fibers. By strengthening domestic fiber availability and encouraging innovation in advanced textile materials, the scheme seeks to reduce import dependence, promote diversification beyond cotton, and enhance India s capability in high-performance and specialized textiles.

Textile Expansion and Employment Scheme: Focused on modernization of traditional textile clusters, this component provides capital support for machinery, technology upgradation, and the establishment of common testing and certification centers. The scheme is expected to enhance productivity, improve quality compliance and enable large-scale employment generation.

Tex-Eco Initiative: The Tex-Eco Initiative promotes globally competitive and environmentally sustainable textiles and apparel (T&A) manufacturing. It aligns domestic production with international sustainability standards, and supports access to emerging green markets.

Samarth 2.0: An upgraded skilling programme , Samarth 2.0 aims to modernize the textile skill ecosystem through deeper collaboration with industry and academic institutions. It seeks to ensure the availability of industry-ready skilled manpower across the value chain.

The global textile market size was estimated at USD 1.16 trillion in 2025 and is projected to reach USD 1.61 trillion by 2033 , growing at a CAGR of 4.2% from 2026 to 2033 . The demand for textiles is rising due to fast fashion, growing urbanization, and increasing disposable incomes in emerging economies.

Tarpaulin And Textiles Sector:

This sector experiences a challenging operating environment and uncertainty over demand growth and volatility in raw material prices, it is likely that the sector s outlook will turn relatively positive. Margin pressure would persist for both the cotton and synthetic textile industries, driven by rising power and wage costs and higher interest rates. The cotton industry is presently facing challenges like slow demand and a loss in margins, but a recovery is expected on account of falling cotton prices, though this could be negated by further volatility in input costs or forex movements. The Tarpaulin Market supports diverse industries with annual global production exceeding 15 18 billion square meters of tarpaulin fabrics across agriculture, logistics, and construction sectors. PVC tarpaulin accounts for nearly 55 60% of total market share due to superior durability and waterproofing properties. PE tarpaulin contributes around 40 45%, driven by cost efficiency and lightweight structure. Transportation and logistics sectors consume over 35% of tarpaulin demand, while agriculture accounts for approximately 25%. Tarpaulin Market Insights highlight increasing adoption of UV-resistant fabrics capable of withstanding exposure beyond 3 5 years, particularly in outdoor industrial and infrastructure applications

The future of India s textiles industry looks promising, supported by rising domestic demand, growing exports, and policy interventions that are strengthening competitiveness. The sector, which already contributes around 2% to GDP and employs over 45 million people, is expected to see its share in the economy nearly double by the end of the decade. Technical textiles will play a pivotal role in this growth. The segment, valued at US$ 29 billion in FY24, is projected to expand rapidly, reaching US$ 45 billion by 2026 and continuing on a strong trajectory thereafter. Within this, Mobil tech textiles for automotive use are expected to nearly double from US$ 2.32 billion in FY25 to US$ 4.57 billion by FY33, driven by the rise of electric vehicles and demand for advanced materials.

2. Performance Review :

The Income of the Company for the year is INR 2050.19 Lakhs as against previous years of INR 1671.21 Lakhs. The Companys net profit for the year ended was INR 33.13 lakhs approximately (last year profit amounts to INR. 26.25 lakhs. The Earning Per Share (EPS) for the year is Rs. 0.57.

3. Business Outlook:

Your Company expects to continue to identify prudent land acquisition opportunities even as it intends to focus on the timely completion of its projects, despite of number of risks. Your company will be facing them with full zeal and gist and will be able to overcome and withstand the risks enumerated envisaging future outlook.

4. Opportunities and Threats:

The Indian textile stands at a promising juncture, with several key opportunities shaping its growth trajectory. Agricultural demand is rising due to crop protection needs, with tarpaulins covering over 20 million hectares of farmland globally. Greenhouse and crop storage applications require tarpaulins with UV resistance above 90%, ensuring durability across multiple growing seasons. Temporary shelters and disaster relief structures are also driving demand, with emergency response agencies using tarpaulins sized between 20 50 square meters for rapid deployment. Tarpaulin Market Forecast highlights increasing usage in modular infrastructure and humanitarian applications. Opportunities:

Global Shift towards Sustainable Textiles: Increasing demand for eco-friendly and ethically produced products aligns with Tridents sustainability agenda

Expansion into New Geographies: Growing opportunities in emerging markets for home textiles

Government Incentives: Benefitting from Production Linked Incentive (PLI) schemes and textile parks under Make in India

Innovation in Functional Textiles and Specialty Paper: Scope to develop antimicrobial, organic, and smart fabrics, and expand value-added paper offerings

Green Energy Integration: Strengthening energy division with renewable projects enhances long-term cost savings and ESG positioning.

However, the Company is exposed to different types of risks such as credit risk, market risk (including liquidity risk and interest rate risk), operational risk and legal risk. The Company monitors credit and market risks, as well as portfolio and operational risk through the oversight of senior management personnel in each of its business segments. Legal risk is subject to the review of the Companys legal department and external advisers. The Company is exposed to specific risks in connection with the management of investments and the environment within which it operates. The Company aims to understand measure and monitor the various risks to which it is exposed and to ensure that it adheres, as far as reasonably and practically possible, to the policies and procedures established by it to mitigate these risks. There are certain key challenges and threats that need to be actively addressed and mitigation steps to be taken as and when required. These challenges can be summarized as follows:

Economic slowdowns, geopolitical tensions, and trade barriers can impact exports and input costs Intense Industry Competition: Price and quality pressures from global players, especially in textiles and paper Raw Material Price Fluctuations: Cotton, pulp, and chemicals are subject to price volatility, affecting margins Regulatory and Environmental Compliance Risks: Stricter norms, particularly in water-intensive sectors, can lead to cost and operational pressures Increasing input material costs leading to higher cost of construction. Increasing labor cost and shortage of skilled and technically qualified manpower. Land prices still continue to be high. Lack of desirable progress in development of infrastructure specifically in the areas of roads, water and sewage systems, power, etc. Absence of industry status and institutional financing for land procurement. Decrease in Investments in the last year. Tax structure GST (Goods and Service Tax) make the garments expensive.

RISK MANAGEMENT

The Companys effective risk management approach is driven by the expertise and proactive involvement of its management team. The risk management committee plays a crucial role in promptly identifying and mitigating potential risks. Recognizing risk as an inherent aspect of business, the Company remains committed to implementing proactive and efficient risk management strategies. Quality risk: The businesss performance may face challenges due to subpar product quality and inefficiencies in manufacturing processes. Mitigation: The Company ensures optimal efficiency across its manufacturing facilities by making substantial investments in cutting-edge technologies while upholding the highest quality standards. Raw material risk: Fluctuations in raw material costs could have an adverse impact on the business.

Mitigation: The Company monitors the market for raw material procurement and implements proactive strategies to mitigate the impact of price fluctuations.

Trend risk: The Company s growth may be constrained if it fails to adapt to changing consumer preferences. Mitigation: Demonstrating a strong commitment to technological advancement and market relevance, the Company continues to invest in product development and innovation. Competition risk: The entry of new competitors may impact the Companys profitability.

Mitigation: By exporting to around 64 countries and serving customers across India, the Company minimizes potential risks through ongoing product innovation, strong brand recognition and efficient operations. Customer attrition risk: Customer retention is crucial, as it directly impacts the Companys revenue and profitability. Mitigation: As a leading textile solutions provider, the Company consistently innovates by offering yarns such as cotton blended dyed yarn, cotton mélange and specialty blends.

Key ratios

Ratio	Numerator	Denominator	As at 31st march, 2026	As at 31st March, 2025	Variance
Current ratio	Current assets	Current liabilities	1.51	1.36	10.50%
Debt-equity ratio	Total Debt	Shareholders \u2019 Equity	3.86	5.34	-27.69%
Debt service coverage ratio	Earning available for debt service	Debt service	0.20	0.12	57.49%
Return on equity ratio	Net Profit after taxes less preference dividend (if any)	Average shareholders \u2019 equity	015	0.13	9.71%
Inventory turnover ratio	Cost of goods sold or sales	Average Inventory	3.51	2.91	20.86%
Trade receivable turnover ratio	Net credit sales	Average trade receivable	8.11	5.78	40.17%
Trade payable turnover ratio	Net credit purchase	Average trade payable	24.79	11.63	113.18%
Net capital turnover ratio	Net sales	Average working capital	7.55	7.85	-3.78%
Net profit ratio	Net Profit after taxes less preference dividend (if any	Net sales	0.017	0.016	6.73%
Return on capital employed	Earnings before interest and taxes	Capital employed	0.54	0.41	32.82%
Return on investments	Income from investments	Cost of investment	-	-	-

During the year, the Company has taken multiple initiatives to optimize cost and products, which has led to improvement in operational results. The Company has generated positive EBITDA and Cash Profit compared to negative EBITDA and Cash loss in FY25. Accordingly, Interest Coverage Ratio, EBITDA Margin, Net Profit Margin, Return on Net Worth ratios have improved compared to that of FY 2024-25. The Company s key ratios for FY 2025-26 reflect the challenging global and domestic economic environment. Although inflation eased compared to the previous year, the financial performance was impacted by high interest rates, slower growth in major economies and geopolitical tensions (including the Russia-Ukraine conflict, Israel Hamas crisis and Red Sea disruptions). Overall, while the Company s financial ratios indicate partial operational improvement, profitability and returns remained under pressure, reflecting the continued impact of external challenges and cost pressures.

5. Internal Control Systems and Adequacy:

The Company has in place adequate internal control systems and procedures commensurate with its size and nature of business. The Internal Audit team continuously monitors the effectiveness of internal control and provides a reasonable assurance of the adequacy and effectiveness of your Company s control, governance and risk management process to the Audit Committee. It also checks the implementation of corrective actions and improvements suggested by the Audit Committee.

Internal Audit focuses on the following objectives, forming part of the Audit Plan approved by the Audit Committee: Adherence to the operating systems and manual; Performance of operational activities in an efficient and effective manner; Compliance with the risk management process; Compliance with legislative and regulatory provisions.

The Audit Committee reviews the Audit Reports and also has discussions with the Statutory Auditors.

6. Human Resources:

Your company believe that the employees are key contributors to the success of the business. Your company focus on attracting and retaining the best possible talent. This attribute helps employees garner a sense of brotherhood with the management which ultimately produces exemplary results for the entire organization. Company s manpower is a prudent mix of the experienced and youth which gives the dual advantage of stability and growth. Entire work processes and skilled, semiskilled and unskilled resources together with management team have enabled to implement your company s growth plans. Your Company believes that the human resources are a very important part of its strengths and hence ensures that all facilities like EPFO, ESIC, Leave, Entitlement and other facilities, uniforms, safety equipment is provided to all staff as applicable.

As of March 31, 2026, the Company s workforce comprised approximately 34 employees (up from 45 in the preceding year) and 34 workers (as compared to 45 last year) across its manufacturing and administrative facilities.

7. Cautionary Statement :

The information and opinion expressed in this Report may contain certain forward-looking statements, which the management believes are true to the best of its knowledge at the time of preparation of the report. The management shall not be liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein. Prior written permission of the Company may be obtained for furnishing this information to any person.

8. Conclusion:

Your Company s primary focus will be to grow volumes across markets. BTPIL will address each market depending on local conditions and consumer trends. While we recognize that the global environment is extremely challenging there are new opportunities emerging to meet consumer needs. Bharat Textiles will focus on profitable growth through a mix of brand led growth, innovation, efficient cost management and successfully scaling up new businesses.

By order of the Board

For Bharat Textiles & Proofing Industries Limited

Sd/-	Sd/-
Ajeet Kumar Bhandari	Anil Bhandari
Managing Director	Whole-time director
DIN: 01023609	DIN: 02722372
Place: Chennai
Date: 01/09/2026