Globale Tessile Ltd Management Discussions

ECONOMIC OVERVIEW & OUTLOOK GLOBAL ECONOMY:

GLOBAL ECONOMY:

The global economy remained resilient during the FY 2025-26 despite persistent geopolitical tensions, evolving trade dynamics and supply chain disruptions across key regions. Global GDP growth stood at 3.4%, supported by steady momentum across Emerging Market and Developing Economies (EMDEs), stronger export activity and improving investments across industrial and infrastructure sectors, while advanced economies grew by 1.9%. Inflation moderated to 4.4% during the year, although volatility in energy markets and geopolitical conflicts continued to create uncertainty across global trade and production networks. Increasing focus on supply chain diversification, localization strategies and domestic manufacturing capabilities continued to reshape global industrial and engineering ecosystems, creating both opportunities and operational challenges for manufacturing-led industries dependent on capital expenditure and infrastructure investments.

INDIAN ECONOMY:

India remained one of the fastest-growing major economies during FY2025-26, supported by strong domestic demand, sustained infrastructure spending and improving manufacturing activity. Real GDP growth was estimated at 7.7%, driven by resilient consumption, healthy investment momentum and improving industrial output. Rising localization initiatives, strong government focus on infrastructure development and improving supply chain resilience further supported economic activity during the year.

The Indian economy also benefited from stable monetary conditions and healthy financial sector indicators. CPI inflation remained largely within the target range, while the Reserve Bank of India maintained the repo rate at 5.25% with a supportive policy stance to ensure adequate liquidity and growth momentum. Strong GST collections, healthy bank credit growth and continued public and private capital expenditure further strengthened the environment for industrial expansion and long-term economic growth.

India remained one of the fastest-growing major economies in FY 2025-26, supported by resilient domestic demand, improving investment activity and stable macroeconomic fundamentals despite heightened geopolitical uncertainties and global supply chain disruptions. Real GDP growth was estimated at 7.7% during the year, following growth rates of 7.1% in FY 2024-25 and 7.2% in FY 2023-24. Growth momentum remained supported by strong private consumption, sustained public capital expenditure and improving industrial activity across key sectors of the economy.

Inflation remained relatively moderate through most of the year before witnessing a gradual increase toward the close of FY2025-26. Consumer price inflation rose from 2.7% in January 2026 to 3.4% in March 2026, primarily led by food price pressures and higher energy-related risks arising from geopolitical developments.¹ Despite external uncertainties, Indias macroeconomic fundamentals remained relatively stable, supported by healthy financial sector conditions, robust tax collections, stable banking sector balance sheets and continued policy support for economic growth.

The Union Budget 2026-27 further reinforced the governments emphasis on infrastructure-led growth, with public capital expenditure increased to 12.2 lakh crore from 11.2 lakh crore in FY2025-26, alongside continued investments in logistics, industrial corridors, energy security and strategic manufacturing sectors.²

GLOBAL TEXTILE INDUSTRY:

The global textile industry witnessed steady growth during FY2025-26, supported by rising demand across fashion, home textiles and technical textile applications despite geopolitical disruptions and evolving trade dynamics. The global textile market was estimated at approximately USD 0.74 trillion in 2025 and is projected to reach around USD 1.02 trillion by 2031, with a CAGR of nearly 5.1% during 2026-2031. Asia-Pacific retained its position as the largest textile manufacturing hub globally, accounting for over 54% of global output, supported by integrated supply chains, competitive manufacturing ecosystems and strong export capabilities.³

The global textile industry is expected to benefit from premiumization trends, sustainability-led investments, digital transformation and supply-chain realignment initiatives. Countries such as India and Vietnam are likely to strengthen their position within global textile supply chains under the ongoing China-plus one sourcing strategy adopted by global brands and retailers. Increasing investments in recycled fibers, circular manufacturing systems, technical textiles and renewable-energy-based production infrastructure are also expected to support long-term industry growth.

INDIAN TEXTILE INDUSTRY:

Indias textile industry witnessed a year shaped by shifting global sourcing strategies, expanding trade partnerships and sustained policy support aimed at strengthening domestic manufacturing capabilities. As global brands increasingly diversified supply chains beyond China and focused on reliable, large-scale sourcing destinations, India further strengthened its position as a key textile and apparel manufacturing hub supported by its integrated value chain, abundant raw material base and growing manufacturing ecosystem.

The domestic textile and apparel market was estimated at around USD 225 billion in 2025 and remained one of the largest contributors to Indias manufacturing economy. India retained its position as the worlds second-largest producer of textiles and garments and the sixth-largest textile exporter globally, with a 4.6% share in global textile and apparel trade.⁴ Indias textile exports demonstrated resilience during FY2025-26 despite geopolitical disruptions and evolving tariff structures. Total textile exports, including handicrafts, increased by 2.1% to 3.16 lakh crore, supported by growth across readymade garments, man-made textiles and value-added product categories.⁵ Export momentum remained broad-based across several international markets including the UAE, UK, Germany, Spain and Japan, while ongoing trade agreements with the UK, EU, EFTA and other regions are expected to further strengthen Indias access to global markets.

Indias home textile segment also maintained healthy growth momentum, supported by rising urbanization, premiumization trends, organized retail expansion and increasing consumer spending on home decor and lifestyle products. The Indian home textile market reached approximately USD 4.51 billion in 2025 and is projected to grow steadily over the long term, supported by strong demand across bed linen, bath linen and furnishing products.⁶

BUSINESS OVERVIEW:

The Company has continued to suffer its overall performance during the Financial Year 2025-26. The Company experienced a decline in the performance as compared to previous years, primarily due to a significant increase in the cost of raw materials, power and fuel, and logistics and other costs of the Manufactures of the Textile product and recession in the economy which affect demand supply chain . During the Previous year, the Company continued to engage with Mahalaxmi Fabric Mills Limited (MFML), a third party vendor responsible for manufacturing and processing Job work services. As informed in the previous years, a major fire broke out at (MFML) factory premises, causing extensive damage to their infrastructure and resulting in a temporary disruption of their operations. This incident adversely impacted our Companys supply chain and business activities. The management actively evaluated the extent of the disruption and is collaborating closely with (MFML) to identify alternative arrangements and ensure the continuity of operations.

Despite these setbacks, the Board of Directors has continued to make strong efforts across all operational areas, including marketing, finance, and cost control, which have started delivering positive outcomes and also informed by the (MFML), the Company has now gradually restored the production activities. The outlook for the Companys products remains promising, and management is confident of achieving improved operational performance in the coming months.

In order to achieve the greatest level of customer satisfaction and excellent business relations, continuous infrastructure upgradations are made. There is a special focus on adopting sustainable business processes that add value to the stakeholders. The Companys dedicated team, with Rich industry experience, remains committed to sourcing and delivering high-quality Products that meets stringent quality standards.

Your Company reported the Total income of the Company is Rs. 1515.52 Lakhs as against Rs 4965.66 Lakhs in the previous year. The Profit before Tax amounted to (173.42) Lakhs as against (106.44) Lakhs in the previous year. The net profit after tax amounted to (139.93) Lakhs as against (76.92) Lakhs in the previous year.

INDUSTRY STRUCTURE AND DEVELOPMENT:

Your Company is mainly engaged in the Trading Business of shirting, suiting and high - value fabrics, range goes into apparels and home textiles, catering to Domestic as well as Global Market.

Globale Tessile Limited to operate as a vertically integrated textile player. The streamlined focus on its core marketing capabilities is expected to enhance operational efficiency, drive economies of scale, strengthen margins, and offer more focused leadership and management attention to the textile business.

STRENGTH AND WEAKNESS:

The Indian Textile Industry has long been a cornerstone of the Indian economy, contributing significantly to both employment and exports. From the historic Charkha Movement led by Mahatma Gandhi to the contemporary Vocal for Local campaign championed by the Prime Minister, this sector has remained at the forefront of national economic and cultural identity. The essential nature of textiles is embedded in the Indian ethos, as reflected in the phrase "Roti, Kapda aur Makaan"?underscoring the fundamental human need for clothing and the sectors intrinsic value. India enjoys a competitive advantage in textiles due to the abundant availability of skilled yet cost-effective labor and its position as the worlds third-largest cotton producer. The industry is largely autonomous, managing everything from raw material procurement to final product delivery. This vertical integration, along with robust entrepreneurial activity, has positioned India as a key player in the global textile value chain.

The Indian textile industry continues to benefit from strong fundamentals, including abundant availability of raw materials, a large skilled workforce, an integrated textile value chain, and a growing domestic as well as global market. Government initiatives such as the Production Linked Incentive (PLI) Scheme, PM MITRA Parks⁷, Cotton Sector Reforms⁸, Bharat Tex 2026⁹, the National Technical Textiles Mission, ATUFS, and export promotion schemes are supporting modernization, infrastructure development, technological advancement, and export competitiveness. These factors provide significant opportunities for industry growth, innovation, and long-term value creation.

However, the global China Plus One strategy?where brands seek to diversify their manufacturing base beyond China?offers a timely opportunity for India to expand its share in global textile and apparel exports. India expanded its global trade integration during FY2025-26 through ongoing agreements and negotiations with regions including the UK, EU, EFTA, Oman and New Zealand. These developments are expected to improve preferential market access, diversify export opportunities and improve Indias positioning within global textile supply chains. Export promotion measures such as the RoSCTL and RoDTEP schemes also supported cost competitiveness for Indian textile exporters amid evolving global trade dynamics.

The Indian textile market has several weaknesses that affect its growth and competitiveness in the global market. One major weakness is the fragmented nature of the industry, as many small and unorganized units operate with limited access to modern technology and finance. Some textile manufacturers also use outdated machinery, which can lead to lower productivity, higher production costs, and inconsistent quality. The industry faces strong competition from countries such as China, Bangladesh, and Vietnam, which often have lower manufacturing and labour costs. In addition, inadequate infrastructure, high logistics costs, and supply-chain inefficiencies can increase delivery time and reduce competitiveness. The sector also faces skill gaps, particularly in advanced manufacturing, design, and technology. Environmental concerns related to water consumption, chemical use, and textile waste are another challenge, especially as international buyers increasingly demand sustainable products. Furthermore, India has relatively limited global branding in high-value textile and fashion segments. These challenges show that the Indian textile industry needs greater investment in technology, infrastructure, skilled labour, sustainability, and international marketing to strengthen its position in the global market.

In summary, the Indian textile industry is at a pivotal moment. While legacy issues around outdated infrastructure persist, strategic government support, rising domestic demand for premium and casual products, growing retail penetration, and global shifts in sourcing provide a strong foundation for sustainable growth and global relevance.

OPPORTUNITIES AND THREATS:

The Indian textile and apparel industry is witnessing a dynamic transformation driven by emerging consumption patterns and strategic global realignments. Premiumization and casualization are key trends, fueled by an aspirational consumer base and increasing brand consciousness, resulting in rising demand for premium products and versatile, everyday casual wear. Simultaneously, the expansion of organized retail, particularly in Tier 2 and Tier 3 cities, is unlocking new avenues for growth, deeper market penetration, and enhanced brand visibility. Government initiatives such as the Production-Linked Incentive (PLI) scheme are further strengthening the domestic textile manufacturing ecosystem, with a focused push on man-made fibers (MMF) and technical textiles to boost innovation and value addition. In the global arena, the China Plus One strategy?adopted by many international brands to reduce reliance on Chinese manufacturing? presents a significant opportunity for Indian exporters to expand their global footprint. Prospective Free Trade Agreements (FTAs), including one with the United Kingdom and EU, could further enhance Indias export competitiveness and support its ambition to emerge as a key sourcing and manufacturing hub

Despite its vast potential, the Indian textile industry continues to grapple with several structural and external challenges. Intense competition from low-cost manufacturing hubs such as Bangladesh and Vietnam poses a significant threat, as these countries benefit from superior cost efficiencies and economies of scale. Moreover, the sector is vulnerable to input cost volatility, particularly in the pricing of raw materials like cotton, which directly impacts profitability and pricing flexibility. The situation has been further exacerbated by subdued consumer demand, as observed in FY25-26, where weak spending trends across both domestic and key international markets constrained volume growth. In addition, the growing global emphasis on sustainability and regulatory compliance has brought Environmental, Social, and Governance (ESG) considerations to the forefront. Meeting these expectations requires substantial investment in eco-friendly processes, waste reduction, and supply chain transparency?posing both a challenge and an opportunity for forward-looking firms within the industry.

The ongoing geopolitical conflicts in the Middle East and Europe, particularly the Russia-Ukraine war and Specially Iran war, have severely disrupted global supply chains, adversely affecting trade flows and increasing volatility across markets. As a company with a predominantly export-oriented business model, such disruptions?coupled with persistently high container shipping costs, limited availability, and frequent delays?pose serious operational challenges. Domestically, inadequate and inefficient logistics infrastructure continues to contribute to longer transit times and elevated costs, further impacting competitiveness.

KEY RISKS & CONCERNS:

The Textile industry is always subject to facing crisis in a cyclical way. Timely action is needed to overcome this situation by taking corrective and proactive steps, then and there.

The Textile business, like other businesses, is susceptible to various risks. The primary risk factor is raw material prices, mainly cotton and the biggest component of cost. Cotton prices are increasing regularly as are other input costs including power, fuel and logistics. Since cotton is an agricultural produce, it suffers from climatic and seasonal volatility. Whereas such volatility in case of a product higher in the textile value chain is generally passed through an increase in value added products in the basket provides insulation against such volatilities.

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.

The industry also faces intense competition from low-cost manufacturing countries such as Bangladesh, Vietnam, and China, while its heavy dependence on exports makes it vulnerable to global economic slowdowns, changing trade policies, and currency fluctuations. Additionally, supply chain disruptions, limited technology adoption, and financial constraints among small and medium enterprises can reduce productivity and operational efficiency. Growing environmental regulations, sustainability expectations, and compliance with ESG standards require significant investment in cleaner production methods and ethical sourcing. Climate change further threatens cotton production and water availability, while rapidly changing consumer preferences demand faster innovation and greater product customization. Addressing these challenges through modernization, sustainable practices, workforce development, and market diversification is essential for ensuring the industrys resilience and continued growth.

Moreover, escalating tariff barriers imposed by the US on several imported goods?part of its ongoing trade policy shift?have created additional hurdles for Indian exporters. The prolonged Russia Ukraine conflict and Iran War has not only strained energy prices and global freight movement but also contributed to elevated uncertainty in export destinations, weakening consumer sentiment. These compounded factors collectively threaten to reduce the Companys business volumes and profitability in the near to medium term.

The Company is susceptible to disasters and crises such as, cyclones, earthquakes, geopolitical instability, fire hazards, etc. which may cause operational disruption, shutdown or production cuts, project delays, supply chain hurdles, and increased construction costs. Compliance issues with the environmental norms and regulations and supply chain challenges continue to be issues of concern.

INTERNAL CONTROL SYSTEM:

The Company has an adequate system of internal control implemented by the Management towards achieving efficiency in operations, optimum utilization of resources and effective monitoring thereof and compliance with applicable laws. The internal control is supplemented by an extensive programme of Internal Audits.

The Internal Audit programme is finalized in consultation with the Internal Auditors and the Audit Committee of the Board. The Audit Committee is briefed on the findings by the Internal Auditors, every quarter, along with the remedial actions that have been recommended or have been taken by the Management to plug systemic weaknesses. The audit committee of the Board meets periodically to review various aspects of the performance of the Company and also review the adequacy and effectiveness of the internal control system and suggests improvement for strengthening then from time to time.

The Company maintains an efficient internal control system commensurate with the size, nature and complexity of its business. The internal control system is responsible for addressing the evolving risks in the business, reliability of financial information, timely reporting of operational and financial transactions, safeguarding of assets and stringent adherence to the applicable laws and regulations. The internal auditors of the Company are responsible for regular monitoring and review of these controls. The Audit Committee periodically reviews the audit reports and ensures correction of any variance, as may be required. Key observations are communicated to the management who undertakes prompt corrective actions.

FINANCIAL AND OPERATIONAL PERFORMANCE:

The Company has continued to suffer its overall performance during the Financial Year 2025-26. The Company experienced a decline in the performance as compared to previous years, primarily due to a significant increase in the cost of raw materials, power and fuel, and logistics and other costs of the Manufactures/Suppliers of the Textile product and recession in the economy which affect demand supply chain.

During FY 2025-26, the market remained exposed to heightened volatility due to ongoing geopolitical conflicts in the Middle East anc Europe. These developments significantly disrupted global supply chains, increased uncertainty across international and dosmestic markets, and contributed to fluctuations in commodity prices and overall business conditions.

Particulars	2025-26	2024-25	% change
Debtor Turnover (Times)	9.72	11.07	-12.20
Inventory Turnover (Times)	3.34	6.47	-48.36
Current Ratio (Times)	1.57	1.85	-14.83
Debt Equity Ratio (Times)	1.62	1.14	-46.91
Operating Profit Margin (%)	-5.94	-0.31	-5.63
Net Profit Margin (%)	-0.10	-0.02	518.16

During the current Financial Year there has been decrease in Revenues, Operating Profit Margin and Net Profit Margin. As of March 31,2026, the Companys Net Worth stood at Rs 958.71 lakhs. The Return on Net Worth (RoNW) for the year 2025-26 showed a marked Decline to -14.61% from 7.01% recorded in 2024-25.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:

The Company continues to maintain cordial and harmonious relations with its employees at all levels. The Company considers its employees to be its most valuable asset and an integral part of its competitive strength. Accordingly, it places strong emphasis on human resource development, employee engagement, training and skill enhancement.

The Company has a well-designed Human Resource policy aimed at fostering a conducive work environment, promoting inclusive growth and equal opportunities, and aligning employees individual goals with the organisations overall growth vision. The Human Resources function plays a vital role in building and nurturing a strong, talented and committed workforce by providing opportunities for professional and personal development.

Formal training and development programmes are an integral part of the Companys operations. Employees, including operators and workmen, are provided continuous training through both internal and external programmes to upgrade their knowledge, skills and competencies and to equip them to effectively meet the evolving challenges of change and growth. The Company also focuses on identifying the potential of its employees and provides appropriate opportunities for career advancement and professional growth.

The operations of the Company across various functions have been further strengthened through the induction of suitably qualified, competent and experienced personnel. The Management places considerable emphasis on employee performance, particularly at the managerial level, and encourages a culture of accountability, continuous improvement and excellence.

The Companys positive approach towards competitiveness, employee engagement and retention enables it to attract, develop and retain a capable and high-performing workforce. Regular upgradation of knowledge and skills, together with comprehensive employee development initiatives, contributes to enhancing employee productivity and strengthening the organizations capabilities.

The Board places on record its appreciation and gratitude to all work-floor personnel, managers and employees for their dedication, commitment and significant contribution to the growth and performance of the Company.

Industrial relations during the year remained cordial, harmonious and satisfactory.

RESEARCH & DEVELOPMENT:

Increased globalization has made the sale of products and retaining of customers highly competitive. To overcome a significant volatility in the market, the need of the hour is high customer satisfaction and value for money from the product. Keeping the above objective as paramount, the research and development activities were focused into attending major customer complaints/suggestions in order to improve customer satisfaction. Your Directors are pleased to inform that the above efforts have lead to considerable reduction of customer complaints. Your Company has successfully launched products of better quality with new aesthetic look as per customer requirements. Further, the Company plans to make new investments towards making Global Branding and expanding its presence across international markets and establishing a strong and sustainable e-commerce footprint.

CAUTIONARY STATEMENT:

This Management Discussion and Analysis Report may contain forward-looking statements, such as goals, estimates, projections and expectations of the Company, as defined under applicable laws and regulations. Actual results may differ materially from those expressed or implied in such statements due to various factors, including but not limited to changes in governmental regulations, tax laws, foreign exchange fluctuations, raw-material availability and pricing, cyclical demand and pricing in key markets and broader economic conditions in India and other jurisdictions where the Company operates. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward looking statements. The Company assumes no obligation to update any forward-looking statements, except as required by law.

	FOR, GLOBALE TESSILE LIMITED
	SD/-
	SHRI JEETMAL B. PAREKH
Date: JUNE 11, 2026	MANAGING DIRECTOR
Place: Ahmedabad	(DIN:- 00512415)