Harish Textile Engineers Ltd Management Discussions

1. Technical Textiles:

High-performance textiles used in aerospace, medical, and infrastructure. The segment is projected to reach $300 billion by 2047.

2. Sustainable & Organic Textiles:

Rising demand for eco-friendly fabrics such as organic cotton, bamboo textiles, and biodegradable materials.

3. Digital & Smart Textiles:

AI-driven manufacturing, IoT-based quality control, and 3D weaving are increasingly transforming production processes.

4. Handloom & Artisanal Textiles: Government initiatives continue to promote handloom clusters to preserve Indias rich weaving heritage.

5. Man-Made Fibre (MMF) and Apparel:

Increasing focus on synthetic textiles, MMF apparel, and high-value garments provides opportunities for growth and diversification.

1. PM MITRA (Mega Integrated Textile Region & Apparel Parks): 7 mega parks with world-class infrastructure and $10 billion expected investment.

2. Production Linked Incentive (PLI) Scheme: $10,683 crore incentive for MMF fabrics, technical textiles, and high-value apparel.

3. Samarth Scheme: Skilling 10 lakh artisans and textile workers to bridge skill gaps.

4. Integrated Processing Development Scheme (IPDS): Support for eco-friendly processing units to meet global environmental standards.

5. National Handloom Development Programme (NHDP): Support for handloom weavers, market linkages, and financial assistance.

6. Raw Material Support Schemes: Initiatives for promotion of cotton, jute, silk, and wool to enhance quality and yield.

Indias textile industry is on the cusp of transformational growth, driven by government support, innovation, and sustainability. Bharat Tex 2025 has reinforced Indias position as a global textile hub, with a clear roadmap to achieve $9 lakh crore in exports by 2030. With strong policy backing, technological advancements, and skilled workforce development, India is set to redefine the global textile landscape.

By 2030, India is expected to be a major player not only in textiles but also in the emerging markets of smart and technical textiles. Sustainability will remain a key focus, and companies that embrace eco-friendly practices will be well positioned to benefit from the global market. However, the industry must continue to innovate, improve infrastructure, and address environmental concerns to fully realise its potential.

As India continues to scale its textile industry, it is expected to remain an important hub for textile manufacturing, exporting high-quality products to global markets and catering to a growing domestic market. The coming years are expected to be transformative for the industry, with increasing opportunities in textile innovation and sustainable production.

The Indian government aims to increase textile exports from $3 lakh crore to $9 lakh crore by 2030, leveraging sustainability, innovation, and policy support.

For the Fiscal Year 2025-26, the Company has attained the top line of Rs. 138 crores. This records for almost 5% Y-o-Y growth in the annual turnover of the Company. The Non-Woven Business

1 performed exceptionally well, showing an annual increase in the turnover by almost 14.13%. The performance of the PSF division was also increased substantially by about 9.55%. The Textile Engineering business is not performing well and has been incurring losses.

Non-Woven and PSF divisions are attaining their fullest capacity utilisations, and with a better product mix, the contributions from both the business segments are improving on a year-on-year basis. Non-Woven division with the help of a profitable product mix and increased capacity utilisations, has attained the EBITDA contributions of 12.67% as against 11.97% for the Financial Year 2024-25. PSF division with the help of a profitable product mix has attained the EBITDA contributions of 11.50% as against 10.07% for the Financial Year 2024-25.

Profits of Non-Woven and PSF Divisions get set off against the losses of the Textile Engineering Division.

At a consolidated level, the company has attained the EBITDA contribution of Rs. 13.48 Crores as compared to EBITDA Contribution of Rs. 5.92 Crs in the financial Year 2024-25.

Your Company is one of the leading producers of textile processing and finishing machinery in India. The machinery manufactured by your Company is well-accepted by reputed clients both in India and abroad. Your Company has successfully exported its products to over 25 countries, including prestigious markets like the United Kingdom.

The Companys manufacturing facilities are spread across 50,000 square feet in Umbergam, Gujarat.

In addition to machinery manufacturing, your Company is also engaged in the production of Non-Woven fabrics, primarily used in automotive interiors, filtration, and hygiene segments. This activity is carried out at its Umbergam plant, which has a factory building of approximately 1,10,000 square feet.

Furthermore, your Company is involved in the production of polyester staple fibre (PSF) by recycling PET bottles and waste polyester at its plant located in Gonde, Nashik.

Over the years, your Company has gained significant product and domain expertise across all the products it manufactures.

It also has an excellent technical and design team capable of handling tailor-made and specialised projects, including those outside the textile industry.

Your Company has best-in-class infrastructure and advanced plant and machinery in this business. The PSF business is eco-friendly and sustainable as it converts PET bottles and polyester scrap into useful fibre. Your Company has domain expertise and experience in this segment, supported by strong infrastructure and ambitious plans for expansion.

The Companys Non-Woven Business offers a wide range of products catering to a broad customer base. With backward integration through its PSF plant, the Company enjoys assured raw material supply, putting it in a unique and advantageous position in the industry.

Quality:

Harish machines are known and respected for their quality and productivity, and they command premium valuation in the market.

Similarly, the PSF and Non-Woven products of your Company are well-known for their high-quality standards and reliability.

The outlook for the financial year 2026-2027 appears positive. The Non-Woven Business has achieved its highest-ever monthly turnover. Non-Woven Segment is also planning to expand its capacity by acquiring additional NW lines during the year to cater the market demand.

There is good demand for Textile Processing and Finishing Machinery and the said loss making division is slowly back on the track of achieving no profit no loss or substantially reduced the losses in the first two months of operations.

The overall business scenario for both Non-Woven and PSF Segments also looks encouraging.

The recycling industry has moved from being considered a medium-to long-term viable business to now being a "must-have" for ecological development. As a result, this industry is moving from a side stream to the mainstream.

Many companies, particularly in the automotive industry, are increasingly seeking recycled materials to reduce their carbon footprint. Since your Company supplies fibre and Non-Woven fabrics mainly to automotive ancillary companies, it is well-positioned to cater to the growing demand in this segment.

Export markets offer strong opportunities for the engineering business. Specialised and tailor-made solutions for non-textile customers also present good growth prospects. For the PSF business, expansion plans are in place, and rising auto sales are improving opportunities for both PSF and Non-Woven Segments.

Potential threats include economic slowdown, liquidity issues, rising raw material prices, and unfavourable government policies. However, since the textile industry is one of the top three employment generators, government policies are expected to remain supportive.

Other Threats:

Emerging geopolitical trade issues Trade restrictions and supply chain challenges Gulf war bearing its Price escalations effect on petroleum product.

Entry of new players in the market

Volatility in the INR/USD exchange rates Higher interest rate regime

Data theft/loss Domain-based threats Hacktivism Website/system non-availability

Possibility of global recession Supply chain disruptions Employee health and wellness concerns

The industry is currently facing risks due to a liquidity crunch and a global economic slowdown, caused by monetary tightening and higher interest rate regimes implemented by central banks around the world.

Your Company has a well-defined organizational structure, documented policies, and an authority matrix to ensure operational effectiveness, reliability of financial reporting, and compliance with applicable laws and regulations.

The internal financial control system includes:

Proper delegation of authority Segregation of duties System access controls Proper documentation and record-keeping

The Internal Auditor continuously reviews the effectiveness of these controls. Reports prepared by the Internal Auditor are reviewed by the Audit Committee.

The Company follows a risk-based internal audit policy, with the objective of identifying key processes and controls, assessing their operating effectiveness, and providing recommendations for process improvement and control enhancement.