Bindal Exports Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Global Industry Structure and Developments

The global textile and apparel industry is a large, fragmented and highly competitive sector encompassing the production of fibers, yarns, fabrics, garments, home textiles and technical textiles. During 2025, the global textile market was estimated at approximately USD 1.1 trillion, with market estimates varying depending on the scope and segmentation adopted. The industry is expected to maintain steady growth over the medium term, supported by changing consumer preferences, rising disposable incomes, expansion of e-commerce, increasing demand for sustainable and functional textiles, and continued technological advancements. Asia-Pacific remains the largest regional market, supported by its established manufacturing base, raw material availability, export infrastructure and growing domestic consumption.

The industry is also undergoing structural changes driven by sustainability, circularity, automation and digitalization. Demand is increasing for recycled and natural fibers, technical and performance textiles, and environmentally responsible production processes. At the same time, manufacturers continue to face challenges relating to raw material prices, energy costs, environmental compliance, supply-chain disruptions and intense global competition. These factors are expected to influence the operating environment and competitive positioning of textile and apparel companies during the coming years.

Indian Industry Structure and Developments

The Indian textile and apparel industry is one of the oldest and most significant sectors of the Indian economy, contributing approximately 2% to the countrys GDP and accounting for around 12% of total exports. The sector spans the entire value chain from fiber to apparel, including natural and synthetic fibers, weaving, knitting, processing, garmenting, and trading.

Indias textile market is currently undergoing structural transformation driven by changing global sourcing patterns, growing demand for sustainable products, digitalization of retail, and policy support through initiatives such as the PLI Scheme, PM-MITRA Parks, and FTA agreements.

The trading segment, especially in yarn and fabric, remains vibrant, driven by strong domestic consumption and a shift in B2B buying behavior post-COVID. Textile traders are now increasingly leveraging technology for sourcing, logistics, and customer engagement.

KEY MARKET SEGMENT

Our Company operates across a broad spectrum of the textile value chain, including fabric supply, grey cloth trading, finished fabric exports, garment exports, and branded garment manufacturing under our proprietary label FASHFUN. With a diversified product mix and a balanced focus on both domestic and international markets, we serve a wide range of customer segments in the textile and apparel ecosystem.

1. Fabrics (Finished & Grey) - Domestic and Export

Nature of Business: Supply and trading of finished and grey fabrics such as polyester, viscose, rayon, and blends thereof.

2. Garment Manufacturing (FASHFUN Brand) Business Model: In-house manufacturing with stitching, cutting, and value addition facilities; focuses on mid-premium branded segment. Product Line: Ready-to-wear garments under the FASHFUN label. Target Segment: Retailers, fashion chains, and direct-to-consumer (D2C) channels. Growth Focus: Expansion through domestic e-commerce, retail distribution, and select export channels.

DEVELOPMENT OUTLOOK

The Indian textile and apparel sector is poised for robust growth, driven by strong domestic consumption, favorable government policies, and increasing global demand for diversified sourcing. Against this backdrop, Binal Export Limited is well-positioned to expand its operations, build on its export success, and further strengthen its market presence through strategic initiatives.

OPPORTUNITIES AND THREATS

Opportunities:

Global "China + 1" sourcing strategy favoring Indian exporters. Increased demand for sustainable and technical textiles. Government support through PLI Scheme, PM-MITRA, and export incentives. Expansion of domestic textile consumption due to urbanization and e-commerce. New market access via FTA agreements (UAE, Australia, EU under negotiation).

Threats:

Raw material price volatility, especially cotton and polyester. Rising labor and energy costs. Competition from low-cost manufacturing countries like Bangladesh and Vietnam. Foreign exchange fluctuation impacting export earnings. Logistics constraints and regulatory compliance challenges for MSMEs.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Projects and Performances for the financial year 2025-26 - A snapshot

During the financial year 2025-26, the Company recorded a Total Revenue from Operations of 2247.07 lakhs, representing a 16.79% decrease compared to the previous year (FY 2024-25). The decline was primarily attributable to subdued demand in key export markets, raw material price volatility, and currency fluctuations impacting margins in the trading segment.

The Company continued to strengthen its operational foundation and diversify its portfolio across its core segments. The performance highlights are summarized below:

Export Sales:

Revenue from Exports: 194.48 lakhs % of Total Revenue: 8.65%

1 Key Export Markets: Germany, Nigeria, France, Spain, U.K, Egypt, Jordan, Syria, Mauritius, U.A.E, Saudi Arabia, Oman, Yemen, Kuwait, Singapore, Malaysia, and Indonesia.

Domestic Sales

Revenue from Domestic Market: 2025.59 lakhs % of Total Revenue: 91.35% Domestic Operations Include: Sale of Grey Cloth (0.52%), Fabric and Fants (49.87%), Made ups (40.23%)

OUTLOOK

The Company is optimistic about the prospects for FY 2025-26. With a balanced focus on domestic market expansion, export growth, product innovation, and operational efficiency, it aims to restore revenue growth and enhance profitability. The Company will continue to invest in upgrading manufacturing capabilities, diversifying product offerings —including sustainable and value-added textiles—and strengthening supply chain resilience. While global market conditions remain dynamic, strategic initiatives and disciplined execution are expected to position the Company well to navigate uncertainties and capitalize on emerging opportunities in the Indian and international textile markets.

RISKS AND CONCERNS

? Currency Fluctuations: INR volatility impacts export realizations.- Environmental Regulations: Compliance with water, dyeing, and effluent treatment norms.- Labour Availability: Migration and labour shortages in key manufacturing hubs.- Geopolitical Factors: Disruptions in raw material supply chains.

A comprehensive enterprise risk management (ERM) system is in place to monitor and mitigate these risks.

INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT

The company has in place an adequate system of internal control commensurate with its size and nature of its business. These have been designed to provide reasonable assurance that all assets are safeguarded and protected against loss from unauthorized use or disposition and that all transactions are authorized, recorded and reported correctly and the business operations are conducted as per the described policies and procedures of the Company. The Audit committee and the management have reviewed the adequacy of the internal control systems and are found satisfactory. However, suitable steps are taken to improve the same.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year 2025-26, the Company recorded a Total Revenue from Operations of 2247.07 lakhs, representing a 16.79% decrease compared to the previous year (FY 2024-25). The decline was primarily attributed to fluctuating raw material costs and overall market volatility in the global textile sector.

Despite the drop-in revenue, the Company focused on cost optimization, efficiency improvement, and supply chain streamlining to protect margins. Operationally, the Company achieved stable capacity utilization levels and introduced new product lines to cater to evolving market demand, particularly in the domestic segment.

EBITDA margins remained under pressure due to input cost inflation, yet the Company was able to partially offset this through improved manufacturing efficiencies and better inventory management. Export revenue declined due to weak demand in Europe and the US; however, domestic trading activities remained resilient, supported by demand in Tier 2 and Tier 3 cities. Inventory and receivable cycles were closely monitored, resulting in improved working capital management despite revenue pressures. The Company continued its focus on operational sustainability, including energy efficiency measures and resource optimization, which contributed to lowering overheads.

Looking ahead, the Company remains committed to restoring revenue growth and profitability through strategic capacity utilization, market diversification, and technology integration across operations.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Debtors and Inventory Turnover Ratio

Debtors Turnover Ratio measures how many times a business can turn its accounts receivable into cash during a period. The Debtors turnover ratio for FY 2025-26 stood at 4.49 times as compared to 4.43 times in FY 2024-25. The improvement reflects more efficient collection of receivables and better credit control policies during the year. Enhanced follow-up and tighter credit evaluation helped reduce the average collection period. There is a variation of 1.37% in the current year (FY 2025-26).

The inventory turnover ratio is an important measure as well which measures how well a company generates sales from its inventory. The company in FY 2025-26 has inventory turnover ratio of 8 times as compared to 8 times in FY 2024-25.

Current Ratio

The companys current ratio stood at 4.3 in FY 2025-26 as compared to 5.4 in FY 2024-25, which it maintains in order to make sure it has adequate resources to meet its short-term obligations. Current ratio has shown a decrease of 19.71% during the year due to a proportionately higher increase in current liabilities as compared to current assets during the year.

Debt to Equity

In FY. 2025-26 Debt to Equity ratio of the company is 0.00 as compared to 0.00 in FY 2024-25. It remains the same due to NIL Debt.

Gross Profit Margin

The company aims to maintain a stable gross profit margin ratio. In FY 2025-26, the gross margin ratio improved and stood at 33.34% as compared to 23.50% of FY 2024-25. The gross profit margin has increased by 41.90% due to reduction in costs of the company.

Net Profit Margin

The company reported a net profit of 28.10 lakhs for FY 2025-26. However, it expects to improve its profit margins in the upcoming financial year. The net profit margin for the current year stood at 1.25% compared to -3.65% in FY 2024-25.

Return on Net Worth

The Return on Net Worth (RoNW) increase from -11.01% in FY 2024-25 to 3.04% in FY 2025-26, due to increase in profitability during the year. The positive RoNW reflects the Companys improved financial performance and the effectiveness of its initiatives toward cost optimization and operational efficiency. The transition from a negative to a positive return demonstrates the Companys strengthened ability to generate value from its net worth.

CHARTERED ACCOUNTANTS

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Date: 30/05/2026