Paras Petrofils Ltd Management Discussions

We submit herewith the "Management Discussion and Analysis Report" on the business of the Company as applicable to the extent relevant.

ECONOMIC AND INDUSTRY OVERVIEW GLOBAL ECONOMY

Manufacturing and goods trade remain soft, while services are comparatively resilient. Global textiles are growing steadily on the back of "China+1" sourcing shifts, sustainability regulations, and demand for technical textiles. The global textile market is estimated at about USD 760 billion in 2025 and projected to reach ~USD 974 billion by 2030 (CAGR ~5.1%).

INDIAN ECONOMY

India—textiles and apparel (T&A) snapshot

• India is the 6th-largest T&A exporter with an estimated 3.9–4.1% share of global trade. T&A (including handicrafts) comprised ~8.2% of Indias total exports in FY24, and ~8.6% in FY25 (provisional).

• FY24/ FY25 policy: The Production Linked Incentive (PLI) for Textiles carries a 10,683 crore outlay, focused on MMF and technical textiles; incentive years are FY26–FY30, tied to performance over FY25–FY29. The scheme has begun catalyzing fresh investment and exports.

• Budget support: Ministry of Textiles allocation rose from 4,417 crore (BE FY25) to 5,272 crore (BE FY26), with sizable increases toward PLI, jute, and silk.

• Market development: Bharat Tex 2024 concluded with product launches, MoUs, and investment intents, underscoring Indias push to be a global hub.

Trade headwinds and mitigants

Export markets (US/EU) remain sensitive to demand and tariff dynamics. Industry bodies flag risks from tariff actions in key markets, reinforcing the need to diversify geographies and leverage FTAs/CEPA corridors (e.g., Japan). Government is courting investment into PM-MITRA parks and evaluating PLI facilitation for smaller firms to scale apparel exports.

2) Structure and Development of Indias Textile Industry

India remains cost-competitive across the value chain, with strengths in raw-material availability, a complete manufacturing ecosystem, and a deep labor pool. Government programs—PLI for Textiles, PM-MITRA parks, RoDTEP/RoSCTL, and skill initiatives—are aimed at scaling MMF and technical textiles, improving compliance and sustainability, and attracting FDI.

3) Opportunities

• Technical textiles & MMF: Priority under PLI; majority of approved applications are in technical textiles, indicating a structural shift toward higher-value products.

• Market access & investment: Active outreach to Japan/EU/UK/UAE and use of PM-MITRA parks to anchor integrated value chains and attract OEMs.

• Events & branding: Bharat Tex strengthens buyer linkages and showcases regional capabilities.

4) Discussion on Financial and Operational Performance

The financial statements have been prepared in accordance with the Companies Act, 2013 and applicable accounting standards. Detailed financial information is provided in the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, and notes forming part of this Annual Report.

5) Internal Control Systems and Risk Management

The Company maintains a robust internal control framework to safeguard assets, ensure reliable financial reporting, and promote compliance. Independent internal auditors conduct periodic audits across locations; findings and Action Taken Reports are reviewed by the Audit Committee at regular intervals to strengthen control effectiveness.

Key external risks include: raw-material availability and prices (cotton/MMF), global demand cycles, tariff/regulatory actions in key markets, FX volatility, and logistics. Policy support (PLI/PM-MITRA), budget allocations, and export-market diversification partially mitigate these risks.

6) Human Resource Development

The Company continues to invest in people, capability building, and a performance-driven culture grounded in trust, transparency, and teamwork. Policies focus on merit-based growth, retention, and productivity.

7) Cautionary Statement

This report contains forward-looking statements based on current expectations, estimates, and projections. Actual results may differ materially due to factors including raw-material dynamics, global demand, trade policies, regulatory changes, foreign-exchange movements, and macroeconomic conditions in India and our export markets.

	On behalf of Board of Directors
	For Paras Petrofils Limited
	Sd/-
	Deepak Kishorchandra Vaidya
Date: 04/09/2025	Whole-time Director
Place: Surat	DIN: 08201304