Mahalaxmi Rubtech Ltd Management Discussions

ECONOMIC OVERVIEW & OUTLOOK GLOBAL ECONOMY:

The global economy demonstrated resilience in 2024, expanding by approximately 3.2% despite facing significant headwinds such as persistent geopolitical tensions, inflationary pressures, and supply chain disruptions. As we progress through 2025, global growth is expected to remain stable, with the International Monetary Fund (IMF) forecasting a growth rate of around 3.3% (IMF, April 2024 ).

The global economic landscape in 2025 was characterised by persistent difficulties. Key among these were ongoing geopolitical tensions, including the conflict in Ukraine and Middle East Tariff issue disruptions impacting shipping in the Red Sea. Additionally, complications in international supply chains and trade disputes between major economies presented continued challenges.

Emerging markets, particularly in Asia, continue to be the primary engines of global growth. In 2024, Asia accounted for around 60% of global economic expansion, with India, Indonesia, and Vietnam leading the charge (Economic Times, Apr 2024 ). Despite monetary tightening and external shocks, these economies remain resilient, buoyed by strong domestic demand and growing foreign investment. However, geopolitical risks continue to pose significant challenges. Ongoing conflicts in the Middle East, political uncertainty in Europe, and renewed trade tensions—especially with the potential for new tariffs from the US—remain key concerns (Washington Post, July 2025 ). Additionally, climate-related disruptions and extreme weather events are beginning to influence food prices and production patterns globally, disproportionately affecting low-income populations (The Guardian, Aug 2025 ).

Going forward, a combination of easing inflation, declining commodity prices, and increased government spending is expected to support global demand and attract investment. Nevertheless, policymakers and investors alike are proceeding cautiously, as the path to sustained global recovery remains vulnerable to shocks, both economic and geopolitical. The outlook for 2025 is one of tempered optimism—growth is holding, inflation is softening, and emerging markets are thriving, but underlying risks remain elevated.

INDIAN ECONOMY:

Indias economy continued to demonstrate robust growth in FY 2025, maintaining its position as one of the fastest-growing major economies globally. The country recorded a strong GDP growth rate, driven by a notable decline in the inflation rate, which led to improved disposable incomes and boosted private consumption. This rise in consumer spending sustained the domestic demand for goods and services.

The Reserve Bank of India (RBI) played a pivotal role in this economic stability through its proactive and calibrated monetary policies, which reinforced the overall financial landscape.

Indias real Gross Domestic Product (GDP) recorded a growth of 6.5%in FY25, indicating sustained economic momentum despite ongoing global uncertainties. The international economic environment remains fragile, with persistent geopolitical tensions, conflicts, and volatile trade policies continuing to pose significant challenges. On the domestic front, retail inflation has moderated, easing from 5.4% in FY24 to 4.9% during the April-December 2024 period, signalling improved price stability.

Reflecting Indias expanding role in the global economy, the country now holds the seventh-largest share in global services exports. Additionally, merchandise exports, excluding petroleum and gems & jewellery, recorded a 9.1% growth in the same period, underscoring the sectors resilience and adaptability amid a complex global trade landscape. For FY26, GDP was initially projected to grow at 6.7%; however, due to the impact of tariff-related factors, the Reserve Bank of India has revised the forecast downward to 6.5%. The Union Budget 2025-26 unveils a range of bold reforms and targeted initiatives focussed on strengthening Indias textile sector, MSMEs, exports, and agriculture. It also introduces tax relief measures designed to boost disposable income and drive overall economic growth.

TEXTILE INDUSTRY:

GLOBAL TEXTILE INDUSTRY

The global Technical Textile Sector continued its dynamic growth trajectory in 2025. Estimates from Research and Markets indicate a market value of approximately USD 247 billion, expected to expand to USD 324 billion by 2030GlobeNewswire . reflecting a steady compound annual growth rate (CAGR) of 5.6% to 6.5% across various forecasts. This growth is driven by rising demand across industries such as automotive, healthcare, construction, and defense. Asia-Pacific remains the dominant regional force, accounting for nearly 47% of the global market—led by China and India. Chinas market alone is expected to grow from USD 40.3 billion in 2024 to USD 59 billion by 2030 (CAGR of 6.6%), while India has emerged as the fastest-growing exporter in the region, with technical textiles exports rising from 16,100 crore in FY 2021 to 24,733 crore in FY 2025, marking a CAGR of nearly 11%. National initiatives like Indias National Technical Textiles Mission and the Production-Linked Incentive (PLI) scheme, which has already attracted 7,343 crore in investments, have significantly accelerated the domestic industrys capabilities. Strategic shifts in manufacturing hubs, such as the Tirupur clusters move from natural to man-made fibers (MMF)—targeting a rise in MMF share from 10% to 30% by 2030—underline the industrys structural transformation. Simultaneously, applications in non-woven textiles, geotextiles, and SporTech (sports and outdoor wear) are witnessing rapid growth, fueled by increasing infrastructure projects, sustainability concerns, and lifestyle changes. These trends collectively reinforce technical textiles as a high-growth, innovation-driven segment at the intersection of industrial performance and consumer demand.

INDIAN TEXTILE INDUSTRY:

The Government of India is actively pursuing substantial growth in both domestic production and export of technical textiles over the next five years. A major policy support in this direction is the Production-Linked Incentive (PLI) Scheme targeting man-made fibres (MMF) and technical textiles, which is expected to significantly accelerate manufacturing and investment in the sector. The government extended the Rebate of State and Central Taxes and Levies (Ro SCTL) scheme by two years, up to March 2026 an important move for ensuring policy predictability and enabling long-term trade planning. To attract private equity and build world-class infrastructure, several large-scale initiatives have been launched, including the Scheme for Integrated Textile Parks (SITP), the Mega Integrated Textile Region and Apparel (MITRA) Park Scheme, and the PM MITRA Parks. These initiatives aim to transform India into a global hub for MMF and technical textiles by supporting end-to-end value chains. Complementing these efforts is the National Technical Textiles Mission (NTTM), a flagship mission focused on R&D, innovation, and export promotion in the technical textile space, further strengthening Indias position in this high-growth industry.

BUSINESS OVERVIEW

The Company continues to sustain its overall performance in the Financial Year 2024-25 driven by the enhance performance in the business. The Technical Textiles sector performance is continued grow as compared to the previous years . Your Directors have been making efforts on all fronts viz. marketing, finance and cost control, etc. and these efforts have been yielding good results. The outlook for the Companys products appears to be good and the Company is confident of achieving improved operational performance.

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 for the stakeholders. Our dedicated team, with rich experience in the field of procuring superior quality of products.

Your Company reported at Standalone level, the total income of the Company is 9481.60 Lakhs as against 7856.74 Lakhs in the previous year. The Profit before Tax amounted to 2192.75 Lakhs as against 1480.12 Lakhs in the previous year. The net profit after tax amounted to 1677.70 Lakhs as against 1103.45 Lakhs in the previous year.

INDUSTRY STRUCTURE AND DEVELOPMENT:

Your Company operates mainly Polymer Based Technical Textile / Rubber Division at MRT, manufactures Offset Rubber Printing Blankets and a range of Technical Coated Fabrics. This division also includes Maheeka Textech" (A Weaving Unit). This division is manufacturing fabrics for Offset Rubber Printing Blankets used in Sheet Fed, Web, Metal Deco, Packaging, and Security Printing Applications. Maheeka Textech is a high-tech weaving unit that includes warping and sizing. This unit has automatic rapier looms and air jet looms for the weaving of various types of fabrics. Maheeka Textech also has a facility for manufacturing specialty fabrics used for Technical Textiles products.

The Company manufactures various types of Technical Coated Fabrics. The fabric would be coated with Acrylics, PU, PVC Rubber, and other different polymers. The said Technical Coated Fabric would be used for various applications such as Tarpaulins, Awnings, Covers, Defense applications, Healthcare, Medical Substrates, Transport, Automotive, Aeronautic & Space, Architectural Membranes, Flexible Membranes for Civil Structures, Blinds, Protective Clothing, Home Furnishing, Geo Textiles, Industrial Fabrics, Sports, Environmental Pollution control, etc. The Company also manufactures Textile based Digital Print Media which are substrates for use in digital banners & signage printing. The product range would include Back-lite, Front-lite, Hoardings, Banners, Bio Gas Tanks and Water Tank Liners .

For a long time, MRT has been exporting its products to many countries, The Company operates across multiple products and businesses in diverse markets and environments. The Company is having a domestic market, as well as exports to various countries across the globe. The Company has a well-equipped laboratory, quality assurance team, and equipment to produce and offer its premium product line, with speciality character and performance, to match all kinds of National or International norms and standards. The Company regularly participates in Domestic and International exhibitions enabling it to keep abreast with the latest global trends.

STRENGTH AND WEAKNESS:

Technical textiles have seen an upward trend globally in the recent years due to improving economic conditions.Technological advancements, increase in end-use applications, cost-effectiveness, durability, user-friendliness and eco-friendliness of technical textiles has led to the upsurge of its demand in the global market. Indutech, Mobiltech, Packtech, Buildtech and Hometech together represent 2/3^rd of the global market in value The Ministry of Textiles under the Government of India has taken some significant steps to promote the Textile Industry and Technical Textile Industries in the Country. Fund Scheme and PLI Schemes aims at making available funds to the domestic textile industry for technology up-gradation and setting up of new units. This scheme aims to generate annual growth in volume terms in cloth production and in value terms in exports by increasing domestic value addition and technology depth and enhancing global competitiveness.

The Indian Government and State Government have come up with several promotion policies for the Textile and Technical Textile sector. Unlike the conventional textile industry in India, which is highly export intensive, the technical textile industry is still import dependent. In India, production is largely concentrated in the small-scale segments such as canvas tarpaulin, carpet backing, woven sacks, shoelaces, soft luggage, zip fasteners, stuffed toys, fabrication of awnings, canopies and blinds etc. The technical textiles sector in India is heavily dependent on import of speciality fibres. The next segment highlights some of the speciality fibres and its strategic importance.

However, one of the biggest weaknesses of the Textile industry is its old machines, the spinning, weaving and processing sector lacks modernization and there is a need of introducing new technology also India has a relatively less number of the shuttle-less loom. This is resulting in higher production costs where the Indian Manufacturing Sector is having a tough fight with the cheap imported fabrics.

Obsolescence of technology, risk in the industrial environment, global crises, tariff and FTA issues and the competition, and changing customer needs may affect Companys business too.

OPPORTUNITIES AND THREATS:

Opportunities

• Favourable Global Realignment : Rising global demand and supply chain diversification ("China +1") are creating opportunities for India to position itself as a key sourcing hub over China, Vietnam, and Bangladesh. FTAs, especially with the UK, improve access to major markets, strengthening Indias export potential.

• Strong Domestic Consumption : Rapid growth in e-commerce, rising disposable income, and Gen Z-led consumption trends are driving robust domestic demand. Expansion of organised retail and entry of global brands offer long-term growth prospects.

• Policy & Government Support : Schemes like PM MITRA Parks, PLI, and RoSCTL (extended till March 2026) provide capital support and tax rebates to boost competitiveness. Proactive state-level policies in UP, Bihar, Odisha, and MP offer attractive incentives for setting up textile units.

• Sustainability & Circular Economy : Indias growing focus on textile recycling and sustainable manufacturing aligns with global trends, creating opportunities for green jobs and long-term environmental leadership.

• Export Growth Potential : Textile exports projected to grow from USD 45 billion to USD 100 billion by 2030, with potential to generate one million jobs annually.

Threats

• Cost and Competitiveness Challenges : India faces higher production costs, lower labour productivity, and fragmented supply chains compared to global peers. High raw material costs, especially in man-made fibres, reduce price competitiveness.

• Regulatory & Trade Barriers : Cumbersome export procedures, limited FTAs (compared to competitors), and complex compliance frameworks hinder ease of doing business. New EU and global sustainability regulations challenge MSMEs in meeting green sourcing and energy standards.

• Labour Market Risks : Rising minimum wages, high attrition, and regional imbalances in workforce availability cause production disruptions and workforce instability.

• Sustainability & Technology Gaps : Slow adoption of advanced technologies and underdeveloped recycling infrastructure hinder competitiveness in fast fashion and circular economy segments.

• Macroeconomic and External Risks : Inflation, high power and fuel costs, global conflicts (Europe & Middle East), and subdued demand in key export markets are affecting margins. Currency volatility poses risks to export earnings, requiring robust financial hedging strategies.

OUTLOOK:

The Company delivered a standout performance in Q4 of FY 2024-25, supported by robust execution and improved operating efficiency. With a reasonably healthy order book position, we anticipate moderate revenue growth in FY 2024-25, with a focus on maintaining or marginally improving margins and enhancing Return on Capital Employed (ROCE). Despite the global economic headwinds, the Company remains confident in its strategic positioning, particularly in the Technical Textiles and Rubber Division, which has continued to perform well even amid macroeconomic volatility.

The financial year 2024-25 proved to be a rollercoaster for most industries, including textiles. Global demand was significantly impacted by geopolitical developments such as the Russia-Ukraine conflict, tensions in the Middle East, and overall recessionary pressures in key markets. These challenges were further compounded by volatility in foreign exchange rates, inflationary pressures, rising logistics and freight costs, and persistent supply chain disruptions. Despite these headwinds, the Company remains optimistic about the medium- to long-term outlook, and continues to invest in its growth engines, particularly in the technical textile segment.

Demand across the textile segment is expected to remain market-specific. While the domestic market is showing signs of recovery and is projected to improve steadily, volumes in the United States may see modest growth or remain flat. The European and UK markets are expected to remain muted in the near term. However, an improvement in export prospects could materialize if India is successful in concluding Free Trade Agreements (FTAs) with key global economies. Demand from South-East Asian countries is expected to strengthen, presenting opportunities for export-led growth.

The Technical Textile business is expected to grow at a steady and secular pace, closely aligned with Indias GDP growth trajectory. With the gradual normalization of operations across the textile industry from the beginning of FY 2024-25, we remain very positive about the long-term potential of the technical textiles segment. This optimism is backed by increasing domestic demand, policy support from the Government of India, and strategic initiatives such as the Production-Linked Incentive (PLI) Scheme, PM MITRA Parks, and the National Technical Textiles Mission (NTTM)-all of which aim to transform India into a global hub for high-value technical textiles.

In the near term, the performance of the domestic market will be closely tied to macroeconomic revival, consumer sentiment, and capital investment cycles. On the export front, while challenges persist, we believe that improving global demand, particularly in South-East Asia, and better trade facilitation, can help offset some of the current constraints.

While volatility in global markets remains a concern, the Company has continued to strengthen its resilience through product innovation, diversification, and operational efficiency. Barring unforeseen circumstances, we are confident of achieving improved performance in FY 2025 and building a sustainable growth trajectory for our Technical Textiles.

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 Technical 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 ongoing Middle East & Europe conflict and tariff and FTA issues has adversely impacted the global supply chain network. Since majority of the Companys business is exports-oriented and it depends on the supply chain for exporting final products, any kind of disruptions in the supply chain, ever-rising container shipping cost, availability and delays pose severe challenges for the business. Further, inadequate and inefficient logistics in India lead to delays and high costs of logistics.

The geopolitical turmoil, global economic slowdown, high inflation and the threat of a looming recession in key markets like the US and Europe have led to a slowdown in the domestic as well as export market. Demand compression would reduce the Companys business.

The global economic landscape remains uncertain due to geopolitical tensions like the Russia-Ukraine conflict, unrest in the Middle East, and recessionary pressures, which could impact demand and escalate costs. Labour shortages, particularly of skilled manpower, remain a constraint in scaling operations efficiently. Intense competition from global players, especially from China, poses pricing pressure, while the Indian industrys reliance on imported or second-hand machinery limits technological advancement. Further, compliance with stringent environmental norms requires sustained investment, and volatility in foreign exchange rates may affect export margins despite prudent financial management. Although shipping and logistics costs have recently stabilized, ongoing disruptions in supply chains and freight routes continue to be areas of concern. Overall, while challenges exist, the Companys product portfolio, manufacturing capabilities, and market presence provide a strong platform to capitalize on future growth opportunities in the technical textiles sector.

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 and competitions 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 continues to sustain its overall performance in the Financial Year 2024-25 driven by the good performance in the business. The financial and operational performance for F.Y 2024-25 are as under:-

Particulars	FY 2024-25	FY 2023-24	% change
Current Ratio (Times)	2.60	2.09	24.53
Debt Equity Ratio (Times)	0.43	0.55	-21.98
Debt Service Coverage Ratio	4.28	3.56	20.41
Net Profit Ratio	18.21	14.35	26.91
Operating Profit Margin (%)	24.85	21.05	3.80
Return on Net Worth	24.37	21.08	3.29

During the current Financial Year there has been marginally increase in Operating Profit and Net Profit Margin mainly due to increase in market globally of Textile Products in which your Company operates.

The Net Worth of the Company stood at 6872.69 Lakhs as on March 31, 2025.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:

Your Company continues to have cordial and harmonious relations with its employees at all levels during the period under review. The Company also puts emphasis on formal training and development programmes to operators and workers, as a core activity and provides continuous training, both internally and externally, for the upgradation of employee skills. The operations of the Company across functions have been strengthened through the induction of appropriately qualified and experienced manpower.

Management identifies the potential of each employee and endeavors by providing them right opportunity to grow. Management of your Company strongly focuses on the performance of the managers. The Board acknowledges its thanks to all the works floor personnel and other employees for making significant contribution to your Company.

The Company considers its employees as the most important asset and integral to its competitive position. It has a well designed HR policy that promotes a conducive work environment, inclusive growth, equal opportunities and competitiveness and aligns employees goals with the organisations growth vision. Its human resource division plays a crucial role to build a strong and talented workforce. It provides opportunities for professional and personal development and implements comprehensive employee engagement and development programmes to enhance the productivity and skills of its employees

Our positive approach to competency, development and retention allows attracting, retaining and built the best team. The Company attaches priority to human resource development, with focus on regular up-gradation of the knowledge and skills of our employees and equipping them with the necessary expertise to meet the challenges of change and growth successfully. Industrial Relations were cordial 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 your Company also plans to make new investments for upgrading and modernizing their R & D facilities.

ISO 9001:2015 CERTIFICATION:

We wish to inform you that your Company has obtained the ISO 9001:2015 Certification for Technical Textile / Rubber Division, Accreditation by TUV South Asia Private Limited, covering all major criteria Development and Manufacturing of Rubber and Technical Textile Products. Throughout our corporate career, your company has been quality-focused and technology-dirven. From our inception, these were the factors that enabled us to manufacture quality products through in-house R&D, and successfully market market them around the world.

CAUTIONARY STATEMENT:

Comments in this Management Discussion and Analysis outlining the Companys strategies and objectives are believed by the Management to be true and to the best of its knowledge but at the time of preparation actual results may differ materially from those expressed or implied and hence the Company and the Management shall not be held responsible for any loss which may arise as a result of any action taken on the basis of information contained herein.

Important factors that could influence the Companys operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and outside the country and other factors such as litigation and industrial relations.

Your Board of Directors hereby confirm that the Company does not have any Subsidiary / Joint Venture Company, as at 31^st March, 2025.