Fiberweb India Ltd Management Discussions

Economic and Industry Overview

Global manufacturing activity remained uneven through 2025-26. Demand across most industrial end-markets was steady in volume but persistently competitive on price, while geopolitical developments — most notably the conflict involving the United States and Iran in the closing months of the year — disrupted shipping routes, lengthened lead times and added volatility to crude-linked raw material costs. Shifting tariff positions between major trading blocs were an additional variable for export-oriented manufacturers through the year.

Nonwovens remain one of the faster-growing segments within technical textiles. Their functional and cost advantages over conventional fabrics continue to widen their application across hygiene, medical and surgical disposables, wipes, filtration, agriculture, automotive interiors, geotextiles and packaging. Industry estimates place the Indian nonwoven fabric market on a mid-single-digit compound growth path over the coming decade, supported by rising hygiene consumption, healthcare expenditure, infrastructure and agricultural mechanisation. Regulatory and consumer pressure towards recycled and biodegradable materials is now a defining feature of the segment and is increasingly reflected in customer sourcing specifications rather than merely in customer preference.

Company Overview and Product-wise Performance

Fiberweb (India) Limited is engaged in polymer processing, manufacturing spunbond and melt-blown nonwoven fabrics from polypropylene at its facility at Nani Daman, which operates as a hundred per cent Export Oriented Unit. The Companys products are supplied to the hygiene, medical, agricultural, industrial and packaging sectors, and are exported to the United States, the United Kingdom, Europe, Australia, New Zealand, South Africa and the Gulf, alongside supplies to multinational customers within India. The manufacturing system is certified to ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018.

The Companys business constitutes a single reportable segment — polymer processing — and accordingly segment reporting under Ind AS 108 is not applicable. Within that single segment, spunbond fabric continues to account for the substantial majority of volumes, with melt-blown fabric addressing higher-specification filtration, medical and wipe applications. Fabric is customised across GSM, thickness, width, colour and performance characteristics, which allows the Company to serve a diversified customer base without significant reconfiguration of its lines.

Total transactions at the Companys United States branch amounted to Rs. 169.62 Lakhs during the year, representing 2.00 per cent of turnover, against Rs. 209.15 Lakhs or 2.06 per cent in the previous year.

Financial Performance

The Companys standalone financial performance for the year under review is summarised below.

Particulars	FY 2025-26	FY 2024-25	Change (%)
Revenue from operations	8,456.17	10,129.43	(16.52)
Other income	156.78	169.60	(7.56)
Total income	8,612.95	10,299.03	(16.37)
EBITDA	1,881.61	2,246.17	(16.23)
EBITDA margin (%)	21.85	21.81	—
Finance cost	105.28	71.45	47.35
Depreciation and amortisation	429.60	480.97	(10.68)
Profit before tax	1,346.73	1,693.75	(20.49)
Profit after tax	1,001.49	1,500.46	(33.26)
Earnings per share (Rs.)	3.48	5.21	(33.21)
Net worth	18,636.41	17,634.92	5.68

(Rs. in Lakhs, except per share data)

Management Discussion and Analysis

Revenue from operations declined by 16.52 per cent, principally on account of subdued realisations, competitive pricing pressure and volume disruption in the fourth quarter arising from interrupted logistics and raw material supply. Notwithstanding the revenue decline, the EBITDA margin was held at 21.85 per cent against 21.81 per cent in the previous year, reflecting active cost management. Other expenses reduced by 33.90 per cent to Rs. 1,504.91 Lakhs, within which freight expenses fell by 45.91 per cent to Rs. 538.63 Lakhs and power and fuel costs by 22.34 per cent to Rs. 248.50 Lakhs. Employee benefit expenses were broadly stable at Rs. 419.78 Lakhs.

Profit before tax at Rs. 1,346.73 Lakhs and profit after tax at Rs. 1,001.49 Lakhs were lower by 20.49 per cent and 33.26 per cent respectively. Finance cost increased to Rs. 105.28 Lakhs from Rs. 71.45 Lakhs, reflecting higher working capital and project-related borrowing during the year. A net gain on foreign currency transactions of Rs. 150.90 Lakhs was recorded, broadly in line with the previous year.

The balance sheet strengthened over the year. Net worth increased by 5.68 per cent to Rs. 18,636.41 Lakhs and total assets to Rs. 20,507.31 Lakhs. Property, plant and equipment rose to Rs. 14,527.47 Lakhs from Rs. 12,794.12 Lakhs, following capital expenditure of approximately Rs. 2,080 Lakhs during the year. Trade receivables reduced sharply to Rs. 664.77 Lakhs from Rs. 1,666.65 Lakhs on sustained collection effort, and inventories to Rs. 2,272.74 Lakhs from Rs. 2,419.20 Lakhs. Net cash generated from operating activities was Rs. 1,727.80 Lakhs. Total borrowings stood at Rs. 1,201.99 Lakhs against Rs. 843.34 Lakhs, and leverage remains low relative to net worth.

Key Financial Ratios

Details of significant changes in key financial ratios, in accordance with Schedule V to the SEBI Listing Regulations, are set out below.

Ratio	FY 2025-26	FY 2024-25	Change (%)	Explanation for change more than 25%
Current ratio	3.89	3.84	1.18	NA
Debt-Equity ratio	0.06	0.05	34.87	Increase in debt during the year.
Return on equity ratio	5.37	8.51	-36.84	Company profit declined during the year, as compared to previous year
Inventory turnover ratio	2.00	2.37	-15.40	NA
Trade receivable turnover ratio	7.25	6.94	4.49	NA
Trade payable turnover ratio	14.61	22.19	-34.17	Trade payable turnover fell because average payables rose while cost of goods sold fell
Net capital turnover ratio	1.92	2.32	-17.37	NA
Net profit ratio (in %)	11.84	14.81	-20.05	NA
Return on capital employed (in %)	7.79	10.01	-22.16	NA
Return on investment (in %)	-	-	-	NA

Outlook and Growth Strategy

The Company had earlier proposed an investment of approximately Rs. 165 Crores in the nonwoven flushable products segment. Following a reassessment of market conditions and business dynamics, the Board has instead approved a project involving an investment of approximately Rs. 50 Crores for the manufacture of nonwoven felted products using recycled materials. On the basis of present estimates, the project is expected to generate annual revenue of approximately Rs. 175 Crores at a projected profitability of approximately Rs. 30 Crores once it reaches steady-state operation. The revised approach requires materially lower capital, can be funded substantially from internal accruals, and positions the Company in a segment where recycled content is increasingly a customer requirement.

Management Discussion and Analysis

Alongside this, the Company will continue to pursue a shift in product mix towards specialised and value-added grades where competition is less concentrated on price, to develop biodegradable and environmentally sustainable material options, and to broaden its geographic and customer footprint across the technical textile value chain. Operational excellence, cost optimisation and prudent financial discipline remain the operating priorities.

Opportunities

- Widening application of nonwovens across hygiene, medical, filtration, agriculture, geotextile, automotive and packaging end-uses.

- Regulatory and customer-led demand for recycled, biodegradable and energy-efficient materials, which the proposed felted nonwoven project directly addresses.

- Government investment in infrastructure and healthcare, supporting demand for geotextiles and medical textiles.

- Responsiveness of the export order book to easing trade friction, as demonstrated by orders of over Rs. 8 Crores secured following the reduction in United States tariffs in February 2026.

- An established, certified manufacturing base with the flexibility to customise across GSM, width and performance characteristics.

Risks and Concerns

- Raw material price risk: polypropylene prices are linked to crude oil and remain volatile; sustained increases may not be immediately recoverable through selling prices.

- Geopolitical and logistics risk: as experienced in the fourth quarter of the year under review, conflict-related disruption to shipping and supply chains can affect both cost and delivery schedules.

- Trade policy and tariff risk: as a hundred per cent Export Oriented Unit, the Company is exposed to changes in tariffs, anti-dumping actions and trade barriers in its principal markets.

- Foreign exchange risk: revenues and a portion of costs are denominated in United States dollars; the Company benefits from a natural hedge, but residual exposure remains.

- Competition and pricing pressure: capacity additions, domestically and regionally, continue to compress realisations at the commodity end of the product range.

- Project execution risk: the proposed expansion is subject to timely commissioning, equipment delivery, regulatory approvals and market conditions at the time of commercialisation.

The Company mitigates these risks through diversified sourcing, active cost management, disciplined credit control, a low-leverage balance sheet and a Board-approved risk management framework that is periodically reviewed.

Internal Control Systems and their Adequacy

The Company maintains internal financial controls commensurate with the size, scale and nature of its operations, designed to ensure the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of fraud and error, accuracy and completeness of accounting records, and timely preparation of reliable financial information. Internal audit is carried out by M/s A. V. Jobanputra & Co., Chartered Accountants, whose observations and recommendations are reviewed by the Audit Committee, which also monitors their implementation. Based on the framework of internal financial controls, the work of the internal and statutory auditors and the reviews performed by management and the Audit Committee, the Board is of the opinion that the internal financial controls with reference to the financial statements were adequate and operating effectively during the financial year 2025-26.

Human Resources and Industrial Relations

The Company employed 114 permanent employees as on 31st March, 2026. Industrial relations remained cordial throughout the year, and there has been no union at the Company since its incorporation. The Company continues to invest in skill development, workplace safety and statutory welfare, and maintains full compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Maternity Benefit Act, 1961. No complaints under the POSH Act were received during the year. Against a statutory corporate social responsibility obligation of Rs. 15.85 Lakhs, the Company spent Rs. 31.00 Lakhs during the year on education, healthcare and community welfare initiatives.

Cautionary Statement

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 securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include global and domestic demand and supply conditions, raw material prices and availability, changes in government regulations and tax regimes, tariff and trade policy developments, foreign exchange movements, geopolitical developments, and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent development, information or event.