Mohini Health & Hygiene Ltd Management Discussions

Global Economy

The global economy remained resilient during FY 2025-26 despite geopolitical tensions, trade uncertainties, energy-market volatility and uneven recovery across major economies.

Inflation has moderated from earlier elevated levels, although the global economic outlook remains subject to uncertainty. Technology-led investment and improving economic activity are supporting growth, while geopolitical developments and trade-related risks remain key challenges.

Outlook

The global economic environment is expected to remain challenging but resilient. Growth is likely to remain moderate, with differences in economic performance across regions.

For India, the outlook remains comparatively strong, supported by domestic demand, infrastructure investment, improving productivity and structural reforms.

Indian Economy

The Indian economy continued to demonstrate strong resilience during FY 2025-26. According to the latest estimates released by the Ministry of Statistics and Programme Implementation (MoSPI), Indias real GDP grew by 7.7% in FY 2025-26, compared with 6.5% in FY 2024-25.

Nominal GDP growth was estimated at 8.9% during FY 2025-26, reflecting continued expansion in economic activity.

Growth was supported by domestic consumption, investment, infrastructure development and continued expansion across key sectors of the economy.

Outlook

Indias economic outlook remains positive, supported by domestic consumption, infrastructure development, investment and structural reforms.

The continued expansion of healthcare infrastructure and increasing awareness of hygiene and medical products are expected to provide opportunities for companies operating in the healthcare and medical consumables segments.

Cotton Industry Overview

Cotton continues to hold an important position in Indias agricultural and industrial economy. India ranks first globally in cotton acreage and second globally in cotton production and consumption.

During the 2025-26 cotton season, Indias cotton production was estimated at 290.91 lakh bales, equivalent to approximately 4.95 million tonnes, on a provisional basis. One bale is equivalent to 170 kg.

Domestic cotton consumption during the same period reached 328 lakh bales, equivalent to approximately 5.58 million tonnes.

The cotton sector contributes significantly to Indias textile and manufacturing ecosystem and remains an important source of livelihood across farming, processing, trading and related activities.

Surgical Cotton Demand:

The demand for surgical cotton and other absorbent cotton products continues to be supported by the expansion of healthcare infrastructure and increasing awareness regarding hygiene and infection prevention.

Surgical cotton is an essential medical consumable used in hospitals, clinics, nursing homes and other healthcare facilities.

Products such as absorbent cotton, cotton balls, zig-zag cotton and gamjee rolls have applications across healthcare and hygiene segments.

The continued development of Indias healthcare infrastructure and increasing focus on hygiene are expected to support demand for medical cotton products.

Import and Export of cotton:

India continues to maintain a significant presence in the global cotton market. During the 2025-26 cotton season, domestic consumption reached 328 lakh bales, indicating strong demand from the textile and cotton-processing industries.

During the 2024-25 cotton season, India exported approximately 18 lakh bales of cotton, equivalent to approximately 0.31 million tonnes. This represented around 3.37% of global cotton exports.

The Government has also undertaken measures to improve cotton productivity, quality and availability and to strengthen Indias cotton value chain.

The Governments initiatives are expected to support domestic cotton availability and strengthen the competitiveness of Indias textile and cotton-based industries

Note: Data for FY26 (April 2025 March 2026) is latest available provisional data.

Source: Ministry of Commerce & Industry, Government of India

(Data as per Trade Data Monitor - May 2026, released on 16 May 2026)

GOVERNMENT INITIATIVES – COTTON SECTOR

The Union Budget 2025-26 announced a five-year Mission for Cotton Productivity to improve cotton productivity, quality and farmer incomes, with a focus on high-yielding and Extra Long Staple (ELS) cotton varieties.

Subsequently, the Union Cabinet approved the Mission for Cotton Productivity (Kapas Kanti) for 2026-27 to 2030-31, with an outlay of Rs 5,659.22 crore. The Mission aims to improve cotton productivity, strengthen domestic raw-material availability and enhance Indias global competitiveness in textiles. It targets increasing cotton production to 498 lakh bales by 2031.

Company Overview

Founded in 2009 in Indore, Mohini Health & Hygiene Limited began as a pioneer in the cotton processing sector, innovating by recycling cotton waste to recover and supply cotton fiber to spinning units. The company initially operated with a modest capacity of 3,000 tonnes of bleached cotton annually, targeting the cotton-based health and hygiene market.

Over time, Mohini expanded its offerings and now manufactures a diverse range of products including surgical cotton, cotton balls, zig-zag cotton, and gamjee rolls. The companys production capacity has grown significantly, with an annual output of 10,800 tonnes of bleached cotton and 2,400 tonnes of surgical cotton products.

With a strategic distribution network of dealers across India, Mohini effectively markets its medical consumables throughout the country. Its manufacturing facilities are strategically situated near raw material sources and are well-connected to major ports and markets. The companys commitment to world-class technology, ongoing growth, product excellence, customer satisfaction, and timely delivery forms the cornerstone of its operations.

Financial Performance

(Rs. In lakhs)

Revenues

Total Revenue for FY 2025-26 stood at Rs. 14760.56 lakhs (Rs. 17866.53 lakhs for FY 2024-25) during the period under

EBDITA

The company reported a negative EBITDA for FY2025- 26 of Rs. (709.37) lakhs.

Net Profit

Net loss for FY 2025-26 stood at Rs. (1517.80) lakhs translating to EPS of Rs. (8.32)

Finance Cost

Finance cost in FY 2025-26 increased by 16.07% to Rs. 367.38 lakhs.

Balance Sheet:

Paid up capital

The total equity share capital for FY 2025-26 stood at Rs. 1823.59 lakhs. There has been no change in the equity share capital of the company over last fiscal.

Net Worth

Net worth for FY 2025- 26 stood at Rs. 9029.10 lakhs from Rs. 10546.89 lakhs in FY 2024-25. The increase was mainly on account of increased profitability of the company.

Borrowings

The companys borrowings have increased by 50.75% to Rs. 263.59 lakhs in FY 2025-26 from Rs. 174.85 Lakhs in FY 2024-25, primarily to support the Companys working capital requirements and business operations. The Company continues to monitor its debt levels and financial obligations to maintain a balanced capital structure.

Key Financial Ratios

A detailed Note on key financial ratios has been provided to Financial Statements.

Risk Management

Risk management measures are essential to a governance system. Therefore, it contributes to its strategic goals and safeguards its value, assets, and reputation.

Here are some of the risks and mitigation strategies of Mohini:

- Competition Risk: Mitigated through robust currency hedging, export pricing, a strong brand image, long-term customer relationships,and constant innovation.

- Foreign Currency Exchange Rate Risk: : Managed by continuous currency tracking and measured hedging to protect margins.

- Raw Material Price Inflation Risk: Addressed by maintaining strong vendor relationships, monitoring cotton prices, and employing a strategic stocking policy

- Reputation Risk: Mitigated by adhering to stringent quality control procedures and striving to meet stakeholder expectations.

- Customer Concentration Risk: Managed by diversifying the customer base and strengthening relationships to reduce dependence on any single customer.

- Regulatory Change Risk: Mitigated through close monitoring of policy changes and adapting company strategies accordingly.

- Risk from Low-Cost Imports: Addressed by leveraging economies of scale, advanced technology, and strategic partnerships to maintain competitive pricing.

Environment and Safety

Clean and safe environmental operations form Mohinis key priorities. The Company conducts all its operations, ensuring the safety of everyone concerned, compliance with statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.

Human Resources

Human resource is a crucial asset for a Company to achieve sustained growth. To attract, retain and develop its talent pool, the Company has consistently recognised talent, imparted training, and followed the golden principle of rewarding performance.

Besides, it is committed to individual well-being and safety at the workplace and it is proud to attract the talent that it needs for future growth.

Most importantly, it places great emphasis on eliminating all forms of discrimination in terms of employment and professional activities (gender, age, race, political affiliation, religion, among others). It pays special attention to professional equality, gender equality, the employment of seniors and young people, the employment of people with disabilities.

Internal Control Systems and Their Adequacy

Mohini Health & Hygiene Limited has established robust internal control systems that are continuously updated to align with business conditions and regulatory requirements. Key aspects include:

- Management Information System: Integral to the control mechanism.

- Audit Committee: Regularly reviews and enhances internal control efficiency. No material weaknesses were found in the past year.

- Monitoring: Business operations are closely supervised by the internal team and Audit Committee, with the Management Board promptly informed of any deviations.

The internal control systems ensure efficiency, safeguard assets, and maintain high accuracy in financial reporting, supporting effective risk management and operational growth.

Cautionary Statements

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions, may be forward-looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied.

Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.