Gujarat Raffia Industries Ltd Management Discussions

A. Economic and Business Overview:

Despite a challenging global economic climate, the INR remained under pressure from elevated crude oil prices and volatility in advanced-market investment flows. Nevertheless, India sustained its position as one of the world?s fastest-growing major economies. The IMFs latest Article IV consultation projected real GDP growth of 6.5% in FY 2024–25 and FY 2025–26, with headline inflation easing toward the 4 % target, and the current-account deficit moderate at around –1.3 % of GDP. India?s robust macroeconomic fundamentals and proactive policy interventions successfully cushioned the impact of external shocks.

B. Industry Structure and Developments:

The textiles sector in India remains a cornerstone of the economy—both historically and in contemporary times—employing over 35 million people and ranking as the world?s second-largest exporter of textiles. It comprises two key segments: the unorganized handloom, handicrafts, and sericulture sector, and the organized spinning, apparel and machinery-intensive segment. The decentralized power looms, hosiery, and knitting clusters form the largest sub-sector, supported by strong linkages to agriculture and cultural heritage. Recent PLI incentives have catalysed textile investments to the tune of 7,343 crore, yielding 4,648 crore in turnover and 538 crore in exports.

C. Opportunities and Threats:

Relaxation of mandatory jute packaging is set to boost demand for HDPE/PP woven sacks, reinforcing the Company?s strategic exports push, targeting over 40 % of production.

D. Segment-wise Performance:

The Company operates in a single segment. Performance details are disclosed under "Review of Operations, Sales and Working Results" in the Directors? Report.

E. Recent Trends and Future Outlook:

Despite the global slowdown, the Company remains optimistic. A significant presence in the fertilizer and agriculture sectors, expansion of food-grain packaging by government agencies, and completion of plant capacity expansions by year-end 2024–25 are expected to drive growth in domestic markets for tarpaulin, fabric, and sacks.

F. Risks and Concerns:

Competitive pressure persists due to large petrochemical manufacturers supplying raw materials at scale and low cost.

G. Internal Control Systems and Adequacy:

Robust internal audit and control systems, supported by Chartered Accountants, continue at all units. Audit Committee oversight ensures timely remedial action. Recent enhancements include aligning technical and non-financial controls with MIS and integrating IT systems for improved accuracy, asset safeguarding, compliance, and fraud prevention.

H. Financial Performance with respect to Operational Performance:

The financial results for FY 2024–25 are detailed in the Directors? Report under "Review of Operations, Sales and Working Results."

I. Material Developments in Human Resources and Industrial Relations Front:

The Company has continued to give special attention to Human Resources/ Industrial relations development. Industrial relations remained cordial throughout the year and there was no incidence of strike, lock out etc.

J. Cautionary Statement:

Statement in this Management Discussion and Analysis Report, Describing the Company?s objectives, estimated and expectations may constitute "Forwarding Looking Statements" within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.