Garware Synthetics Ltd Management Discussions

Pursuant to schedule V of the SEBI (LODR) Regulation, 2015. Management Discussion and Analysis Report form a part of the Annual Report of the Company. It indicates the Companys movement in the external environment vis-a-vis its own strengths and resources.

AN ECONOMIC OVERVIEW GLOBAL ECONOMY

World Economy

Global growth is projected at 3.0 percent for 2026 and 3.4 percent for 2027, broadly unchanged cumulatively from the April 2026 World Economic Outlook. The outlook is uncertain. The war shock is weighing on energy importers and vulnerable economies, while AI-driven demand is lifting countries integrated into the global technology value chain.

Global economic expansion continued, with IMF estimating global growth at 3.4% for CY25. improving from CY24 growth of 3.1%. Inflationary pressures have moderated marginally across many economies but remained sticky, reflecting evolving trade dynamics and an uptick in key commodity prices. Central banks across major economies continued their easing cycle but adopted a more cautious stance towards the end of CY25, signalling the likely end of policy easing cycle. Despite these stabilising trends, trade uncertainties, and ongoing regional conflicts continued to weigh on market sentiment, global trade flows, and investment decisions. End of Fiscal 2026 saw significant supply-side disruptions in energy markets from the Middle East conflict, leading to spike in energy prices. Brent crude prices rose from $70/bbl towards $100/bbl, posing fresh stagflationary risks for the global economy.

INDIAN ECONOMY

India is one of the worlds fastest-growing retail markets, and expected to become the third-largest by 2030. The countrys retail sector is entering a transformative phase, fuelled by the rising purchasing power of a young, digitally savvy, and aspiring population. The retail sector, estimated at US $1.07 trillion in 2024, is projected to reach US $1.93 trillion by 2030, growing at a CAGR of 10% according to Deloitte-FICCI 2025 report. Growth is being led by the expansion of physical stores in underpenetrated regions and the continued rise of e-commerce, enabling seamless, anytime access for consumers. E-commerce penetration, estimated at 7% in 2024 is expected to double to 14% by 2030, ably supported by omni-channel strategies adopted by retailers.

The Indian economy is estimated to grow at 7.6% in FY 2025-26, up from 7.1% in FY 2024-25, as RBI rate cuts along with cuts in personal tax and GST led to recovery in consumption demand. Supportive inflation backdrop led RBI to ease policy rates by 100 bps in FY 2025-26. RBI also enhanced liquidity through measures like CRR Cuts, bond purchases and long-term FX swaps. Depreciation pressure on Rupee intensified during second half on back of foreign portfolio outflows and surge in crude oil prices. At the end, Rupee registered the largest annual depreciation against Dollar to close the year at around 95 levels.

INDUSTRY STRUCTURE AND DEVELOPMENT

The global nylon industry is a major multi-billion-dollar market valued at about $32.5 billion, driven heavily by automotive manufacturing and textile production. The India nylon market size reached USD 1.74 billion in 2025 and is projected to expand to USD 3.3 billion by 2034, growing at a compound annual growth rate (CAGR) of around 6.95% to 8.6%.

Garware Synthetics Limited manufactures wide range of bristles made from Nylon 6, 66, 610, 612, PBT, Polypropylene, which finds extensive application in various Brush Industries. Recently Company has developed nylon sutures, which was currently imported into other country. These sutures are used mainly for medical purpose. The management is trying its best to improve the working of the Company.

OPPORTUNITIES AND THREATS

Your company has got good demand for its products due to high quality standards. The company can produce almost 570 MT per year if work at its full capacity. However, the Company is not producing the sufficient quantity of products due to scarcity of the Working Capital. At the same time, many potential markets are untapped due to shortage of raw material. In spite of all odds, the Company is still enjoying the reputation on grounds of quality.

Our raw materials are petro-based products. Price fluctuations in petroleum-based raw materials impact profit margins. Cheaper imports from international markets pose continuous pressure on domestic manufacturers, though regulatory measures like anti-dumping duties offer partial relief. In the current year oil prices were also high. This has resulted in increasing the raw material prices considerably. As the market could not absorb all the raw material prices, resulted into loss of sale and reduces company profit margin.

Your management is of the opinion that the following determining factors of Opportunities and Threats would play a vital role in case of your company.

FACTOR FOR OPPORTUNITY

1. Additional production capacity to meet the market demand and achieve economies of scale.
2. Use of latest technology to facilitate further reduction in wastages and improvement in quality.
3. The company has brand equity and a reputation in the industry for producing quality products. Its continuous service and customer care.
4. The Company is a pioneer in plastic industry.

FACTOR FOR THREATS

1. Your company faces competition from the unorganized sector in the industry.
2. Your company faces adversity due to volatile raw material Prices.
3. Your company suffers from huge amount of power shortage. Due to the power-cutting in company factory established, the Company suffered amount of production loss during the current year and the same trend will continue in the next year also as the area of production is not having adequate power generating capacity.

HUMAN RESOURCES DEVELOPMENT:

The total numbers of employees as on 31st March, 2026 were 65. The industrial relations in all units of the Company continue to be cordial. Your Company believes that its employees are its core strength and development of people is a key priority for the organization to drive business objectives and goals. Robust HR policies are in place which enables building a stronger performance culture.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has a compact organization Structure which helps it run business operation smoothly. The Company has adequate internal control system, commensurate with the size and nature of its operations. Audit Committee, the details of which has been provided in the Corporate Governance Report has been entrusted with detailed terms of reference to review and look into proper recording of transactions and preparation of financial statement. One of the important functions of the Audit Committee is to review the adequacy of internal control systems and compliance thereof.

CAUTIONARY STATEMENT:

Statements in this report on Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking, considering the applicable laws and regulations. These statements are based on certain assumptions and expectation of future events. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include finished goods prices, raw materials costs and availability, global and domestic demand-supply conditions, fluctuations in exchange rates, changes in Government regulations and tax structure, economic developments within India and the countries with which the Company has business contacts. The Company assumes no responsibility in respect of the forward-looking statements herein, which may undergo changes in future on the basis of subsequent developments, information or events.

By Order of the Board of Directors,Garware Synthetics Limited,

Sd/-Deepak KambleDirectorDIN: 09718203

Date: 24th August, 2026Place: Thane