Mohit Industries Ltd Management Discussions

This Management Discussion and Analysis provides a comprehensive overview of the Companys performance for the financial year ended March 31, 2026, covering its financial performance, operational developments and key strategic initiatives. The Companys performance is influenced by various factors, including economic conditions, demand, supply and pricing trends in domestic and international markets, availability and prices of raw materials, changes in government policies and regulations, labour-related matters, taxation laws and other applicable statutes, as well as overall economic developments in India and the countries in which the Company operates.

The Companys business is also influenced by factors such as changing consumer preferences, competitive dynamics, technological developments and prevailing trends in the textile industry. This report has been prepared based on publicly available information from various sources, including websites, reports and industry publications. The following discussion and analysis should be read in conjunction with the Companys financial statements and the notes thereto forming part of this Annual Report.

GLOBAL ECONOMY & OUTLOOK

The global economy has demonstrated resilience amid a challenging and evolving macroeconomic environment. According to the IMF World Economic Outlook Update, July 2026, global economic growth is projected at 3.0 percent in 2026 and is expected to strengthen to 3.4 percent in 2027, indicating a gradual improvement in global economic activity. The outlook for 2027 reflects expectations of a moderate recovery in global economic activity, supported by improving investment and technology-led growth. However, the global economic environment remains subject to uncertainties arising from geopolitical developments, energy prices, trade policies, inflationary pressures and financial market conditions. For the textile industry, global demand, raw material prices, trade policies, consumer spending and developments in key international markets will continue to influence business conditions. Against this backdrop, companies are expected to focus on operational efficiency, cost optimisation, product competitiveness and adaptability to changing market conditions.

INDIAN ECONOMY AND OUTLOOK

Indias economy continued to demonstrate resilience and sustained momentum during FY 2025-26, despite an evolving global economic environment and geopolitical uncertainties. As per the First Advance Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI), Indias real GDP is estimated to grow by 7.4 percent during FY 2025-26, reaffirming its position as one of the fastest-growing major economies globally. The growth has been supported by robust domestic demand, strengthening capital formation and improved manufacturing activity, while the services sector has continued to remain a key contributor to overall economic expansion. Indias resilient domestic economy, improving manufacturing activity and favourable long-term growth prospects continue to provide a supportive environment for businesses. While challenges arising from global economic developments, commodity prices, trade policies and geopolitical uncertainties remain, the underlying strength of the Indian economy presents meaningful opportunities across sectors. At Mohit Industries, we continue to closely monitor these developments and remain focused on strengthening our operations, improving efficiencies and leveraging emerging opportunities to support sustainable growth.

TEXTILE INDUSTRY

The textile and apparel industry continues to be an important contributor to Indias economy, employment and exports. India has established a strong position across the textile value chain, supported by its large domestic market, skilled workforce, availability of raw materials and well-developed manufacturing capabilities. The industry is witnessing continued transformation driven by changing consumer preferences, increasing demand for value-added products, technological advancements and the growing adoption of e-commerce and digital platforms. During FY 2025-26, Indias textile and apparel exports, including handicrafts, stood at approximately

US $35.52 billion. The performance reflects the resilience of the Indian textile sector and its continued relevance in global markets.

India also continues to enjoy a strong position in cotton production, providing an important competitive advantage to the domestic textile industry. The availability of a strong domestic raw-material base, together with Indias integrated textile manufacturing ecosystem, provides opportunities for further growth across the value chain. The Government continues to undertake various initiatives to strengthen the competitiveness of the Indian textile industry, including PM MITRA Parks, the Production Linked Incentive (PLI) Scheme, the National Technical Textiles Mission and various measures aimed at supporting textile exports and enhancing manufacturing capabilities. These initiatives are expected to encourage investment, technology adoption, employment generation and integration of the Indian textile industry with global value chains.

Going forward, the industry is expected to benefit from rising domestic consumption, increasing global demand for Indian textile products, diversification of global sourcing and opportunities arising from Indias expanding trade relationships. At the same time, the industry remains exposed to challenges such as fluctuations in raw material prices, changing global demand, competition from other textile-producing countries, trade policies and geopolitical developments. The Company remains focused on strengthening its operational capabilities, improving efficiency, maintaining product quality and responding effectively to changing market requirements. The evolving industry landscape presents opportunities for the Company to strengthen its market position and pursue sustainable growth.

Financial Performance of the Company

The Company is supported by a strong management framework and an experienced, mission-driven leadership team, which continues to facilitate an efficient mechanism for marketing and selling its products to customers.

During the year, your company recorded total revenue of 13989.67 Lakhs against 11239.58 Lakhs in the previous year, resulting into profit before tax of (128.51) Lakhs during the year as compared to profit before tax of (328.23) Lakhs in previous year. Total Comprehensive Income during the year was (653.38) Lakhs as compared to (1117.95) Lakhs in the previous year. The financial performance of the Company during the year continued to be impacted by various operational and market-related factors. Volatility in the prices of key raw materials, particularly cotton and synthetic fibres, resulted in higher production costs. The financial performance during the year was influenced by changes in raw material prices, particularly cotton and synthetic fibres, along with evolving market conditions. The Company continues to focus on strengthening its operational efficiency through cost optimization, process enhancements and exploration of new market opportunities, with a view to enhancing its competitiveness and supporting sustainable business growth. The management remains focused on strengthening the Companys operations, enhancing operational efficiency and exploring new business opportunities, with a continued emphasis on sustainable growth and long-term value creation.

To support the growth and expansion of the Companys business operations, the Board of Directors has arranged funds through borrowings from banks and promoters. These borrowings include unsecured loans from the promoters, which have been utilized to meet the Companys working capital and operational requirements and to support its ongoing business activities.

The Company has established a presence in international markets by exporting Polyester Draw Texturized Yarn (DTY) under its own brand, catering to customers across South Korea, Thailand, the Czech Republic, Denmark, Bangladesh, Egypt, Nepal and several other countries. During the year under review, the Company recorded an export turnover of 1,049.17 Lakhs, as compared to 1,443.98 Lakhs in the previous year. The Company continues to focus on strengthening its presence in existing international markets while exploring opportunities to expand its export footprint across new geographies.

Risks and Opportunities

The Company operates in a dynamic and competitive textile industry and remains attentive to factors that may influence its business performance and growth prospects. The management continuously evaluates industry developments and market conditions to identify potential risks and opportunities.

Risks

Key risks include fluctuations in raw material prices, changing customer preferences, competitive pricing pressures and volatility in domestic and international markets. Any substantial increase in raw material costs may impact the Companys cost of production and margins. Changes in economic conditions, regulatory requirements, foreign exchange movements and global trade dynamics may also impact demand, costs and profitability. The Company continues to monitor these factors and take appropriate measures to manage their potential impact on operations. Technological advancement is another important factor influencing the textile sector. Continuous developments in manufacturing processes, machinery and product technology require companies to evaluate and adopt appropriate technological improvements. Failure to keep pace with relevant technological developments may affect operational efficiency, product quality and competitiveness. The Companys performance may also be influenced by broader macroeconomic factors, including inflation, interest rates, foreign exchange movements, changes in consumer spending, geopolitical developments and overall economic conditions, which may affect domestic demand as well as export opportunities.

Opportunities

Despite the above challenges, the Indian textile industry continues to offer significant growth opportunities, supported by Indias established manufacturing capabilities, skilled workforce and strong presence across the textile value chain. Increasing global demand and opportunities arising from evolving international supply chains provide scope for Indian textile manufacturers to expand their presence in international markets, including the United States, European Union and Middle Eastern markets.

The growing demand for value-added, specialized and performance-oriented textile products presents opportunities for product diversification and improved realization. Developments in areas such as functional fabrics, technical textiles, smart textiles and other innovative textile applications may provide avenues for new product development and long-term growth.

Government initiatives aimed at strengthening domestic manufacturing, promoting exports and enhancing the competitiveness of the textile sector are expected to support the industrys growth prospects. The development of textile parks, manufacturing infrastructure and related support systems may further improve operational efficiencies and create opportunities for capacity expansion.

The Company remains focused on identifying emerging market opportunities, strengthening operational efficiency, maintaining product quality and responding to changing customer requirements. The management believes that prudent risk management, efficient resource utilization and a continued focus on market and industry developments will enable the Company to address challenges and pursue sustainable growth opportunities.

Future Outlook

The Company remains optimistic about the long-term prospects of the textile industry and is focused on strengthening its operational capabilities and market position. The Company will continue to closely monitor evolving market conditions, customer preferences and industry trends to identify opportunities for sustainable growth. Going forward, the Company intends to focus on enhancing operational efficiency, optimizing the utilization of resources, improving product offerings and strengthening relationships with existing customers while exploring opportunities to expand its customer base and market reach. The Company will also continue to evaluate relevant technological developments and opportunities for product diversification in line with changing market requirements. The management remains committed to pursuing prudent growth strategies, maintaining operational discipline and responding proactively to market opportunities and challenges. Through these initiatives, the Company aims to strengthen its competitive position and create sustainable value for its stakeholders.

Internal Control System

The Company has in place an adequate internal control framework commensurate with the nature, size and complexity of its business operations. The internal control systems are designed to facilitate effective operational management, safeguard the Companys assets, ensure proper48 authorization and recording of transactions, and support the accuracy and reliability of financial reporting. During the year under review, the Company continued to review and strengthen its internal processes and control mechanisms to ensure that they remain aligned with its business requirements and operational needs. Appropriate controls are implemented across key financial and operational activities, with defined procedures and levels of authority to promote accountability and transparency. The internal audit function periodically reviews various financial, operational and process-related areas and provides assurance on the adequacy and effectiveness of the internal control environment. Observations and recommendations arising from such reviews are considered by the management and appropriate corrective measures are undertaken, wherever required. The Company continues to place emphasis on strengthening its control environment, improving process efficiency and ensuring compliance with applicable policies, procedures and regulatory requirements. The management remains committed to maintaining a robust internal control framework to support efficient, transparent and sustainable business operations.

Human Resource

The Company continues to recognize its employees as an important contributor to its business performance and long-term success. During the year under review, the Company remained focused on maintaining a positive and professional work environment that encourages teamwork, accountability and employee engagement. The Company places emphasis on developing employee capabilities, strengthening skills and fostering a culture that supports productivity and continuous improvement. The management believes that a motivated and capable workforce is essential for achieving operational objectives and responding effectively to the evolving requirements of the business. Going forward, the Company will continue to focus on employee engagement, skill development and welfare initiatives while fostering a work environment that enables employees to contribute effectively towards the Companys growth and long-term objectives.

Forward-Looking Statements:

This Management Discussion and Analysis contains certain statements that may constitute forward-looking statements, reflecting the Companys current expectations, estimates, beliefs and projections regarding its future business, financial performance and prospects. Such statements are based on information and assumptions available to the Company as on the date of this report and are subject to various risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in such statements. These factors may include, among others, changes in economic and business conditions, industry trends, customer demand, market competition, availability and cost of raw materials, technological developments, regulatory and policy changes, geopolitical conditions and other factors beyond the Companys reasonable control. The Company does not undertake any obligation to update, revise or publicly release any changes to these forward-looking statements as a result of subsequent events, developments or otherwise, except where required under applicable laws and regulations.