Parmeshwari Silk Mills Ltd Management Discussions

The Board of Directors of Parmeshwari Silk Mills Limited ("the Company") is pleased to present the Management Discussion and Analysis Report for the financial year ended March 31, 2026, in compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule V thereto.

The report provides an overview of the global and Indian economic environment, industry developments, business performance, opportunities, risks, internal control systems, human resources, and future outlook.

1. GLOBAL ECONOMIC OVERVIEW

The global economy demonstrated resilience during financial year 2025-26 despite persistent geopolitical tensions, supply chain realignments, elevated interest rates in several advanced economies and continuing inflationary pressures. According to the International Monetary Fund (IMF), global economic growth remained stable, supported primarily by emerging market economies, while developed economies experienced moderate expansion.

Inflation continued its downward trajectory across major economies owing to easing commodity prices, improved supply chains and prudent monetary policies adopted by central banks. However, uncertainty arising from geopolitical conflicts, trade policy changes and volatile energy prices continued to influence investment decisions and international trade.

Global manufacturing activity gradually improved during the year with increasing industrial production and stronger export demand in emerging economies. Businesses continued investing in digital transformation, automation, artificial intelligence and sustainability initiatives to improve operational efficiency and long-term competitiveness.

The textile and apparel industry also witnessed gradual recovery in global demand after a period of inventory correction in major international markets. Buyers increasingly diversified sourcing destinations to reduce dependence on single-country supply chains, thereby creating opportunities for competitive manufacturing destinations such as India.

2. GLOBAL ECONOMIC OUTLOOK

The medium-term outlook for the global economy remains cautiously optimistic. Moderating inflation, improving consumer confidence and expected easing of monetary policies are likely to support economic activity.

Nevertheless, global economic growth continues to face challenges from:

• Geopolitical conflicts and regional instability;

• Supply chain disruptions;

• Currency fluctuations;

• Volatility in commodity and energy prices;

• Climate-related risks and sustainability requirements.

Businesses across industries are increasingly focusing on resilient supply chains, digitalisation, ESG compliance and operational efficiency to strengthen long-term competitiveness.

3. INDIAN ECONOMIC OVERVIEW

India continued to remain one of the fastest-growing major economies during FY 2025-26, supported by strong domestic consumption, robust government capital expenditure, increasing private investment and sustained macroeconomic stability.

Government initiatives including "Make in India", Production Linked Incentive (PLI) Schemes, PM Gati Shakti, National Logistics Policy and significant investments in infrastructure further strengthened industrial growth.

The Reserve Bank of India maintained a balanced monetary policy aimed at containing inflation while supporting economic growth. Strong banking fundamentals, healthy corporate balance sheets and increasing credit availability supported investment across manufacturing and infrastructure sectors.

India also witnessed continued growth in exports of engineering goods, pharmaceuticals, textiles and value-added manufacturing products despite challenging global trade conditions.

4. INDIAN ECONOMIC OUTLOOK

India is expected to remain among the worlds fastest-growing large economies over the medium term.

Key growth drivers include:

• Strong domestic consumption;

• Infrastructure-led economic expansion;

• Manufacturing sector growth;

• Increasing foreign direct investment;

• Government emphasis on exports;

• Digital transformation;

• Rising middle-class consumption;

• Stable banking and financial sector.

Government initiatives towards ease of doing business, logistics improvement and manufacturing competitiveness are expected to strengthen Indias position as a preferred global manufacturing hub.

The continued implementation of structural reforms is expected to support long-term sustainable growth across sectors including textiles.

PART II - INDUSTRY OVERVIEW, OPPORTUNITIES, CHALLENGES & OUTLOOK

INDUSTRY OVERVIEW

5. Global Textile Industry

The global textile and apparel industry continued its recovery during FY 2025-26 following the inventory correction experienced in previous years. Demand from developed markets gradually improved, although purchasing decisions remained cautious because of inflationary pressures and evolving consumer spending patterns.

Manufacturers across the world increasingly adopted advanced technologies including automation, artificial intelligence, digital manufacturing and supply chain analytics to improve efficiency and reduce production costs.

Sustainability continued to remain a major focus area. International brands increasingly preferred suppliers capable of demonstrating compliance with environmental, social and governance (ESG) standards, traceability requirements and responsible sourcing practices.

India continued to benefit from the global trend of diversification of sourcing away from concentrated manufacturing locations.

6. Indian Textile Industry

The Indian textile and apparel industry continues to be one of the countrys oldest and most significant industries, contributing substantially to employment generation, industrial production and export earnings. The sector spans the complete textile value chain-from fibre, yarn and fabric manufacturing to apparel, home textiles and technical textiles-making India one of the few countries with a fully integrated textile ecosystem.

India remains one of the worlds largest producers of cotton, man-made fibres, silk, jute and handicraft products. The industry is supported by a strong domestic raw material base, skilled workforce, expanding manufacturing infrastructure and increasing technological adoption.

During FY 2025-26, the textile industry witnessed gradual improvement in domestic demand supported by increasing consumer spending, revival in retail activity and growth in organised apparel markets. Export demand also improved in selected international markets as inventory levels with global retailers normalised and sourcing diversified beyond traditional manufacturing hubs.

Government initiatives promoting domestic manufacturing, infrastructure development, technical textiles, sustainability and export competitiveness have further strengthened the long-term prospects of the Indian textile sector.

The increasing adoption of digital technologies, automation, Industry 4.0 practices and sustainable manufacturing is enabling Indian textile manufacturers to improve productivity, operational efficiency and global competitiveness.

7. Government Initiatives Supporting the Textile Industry

The Government of India continues to accord high priority to the development of the textile and apparel sector through various policy initiatives aimed at enhancing manufacturing competitiveness, exports, employment generation and value addition.

Major initiatives include:

PM MITRA Parks

The PM Mega Integrated Textile Region and Apparel (PM MITRA) Scheme is aimed at establishing world-class integrated textile parks with state-of-the-art infrastructure, enabling economies of scale, reducing logistics costs and strengthening Indias global competitiveness.

Production Linked Incentive (PLI) Scheme

The Production Linked Incentive Scheme continues to encourage investments in man-made fibre apparel, technical textiles and high-value textile products by incentivising production and capacity expansion.

National Technical Textiles Mission

The National Technical Textiles Mission is promoting innovation, research and development, standardisation and exports in technical textiles, thereby creating significant growth opportunities for the Indian textile industry.

Export Promotion Measures

The Government continues to strengthen export competitiveness through trade facilitation measures, logistics improvements, Free Trade Agreement (FTA) negotiations, export incentives and market diversification initiatives.

Sustainability and ESG Initiatives

The Government continues to encourage sustainable manufacturing practices through energy efficiency programmes, environmental compliance, renewable energy adoption and responsible production standards, helping Indian manufacturers align with evolving global sourcing requirements.

8. Opportunities

The Company believes that the Indian textile industry offers significant long-term growth opportunities supported by favourable macroeconomic and structural factors.

Major opportunities include:

• Growing Domestic Consumption

Indias expanding middle-class population, increasing urbanisation, higher disposable income and changing consumer preferences continue to drive demand for textiles and apparel across various market segments.

• Global Supply Chain Diversification

International buyers continue to diversify sourcing destinations to reduce dependence on single-country manufacturing hubs. India is well positioned to benefit from this structural shift due to its integrated textile value chain and strong manufacturing capabilities.

• Government Policy Support

Government initiatives such as PM MITRA, Production Linked Incentive (PLI) Scheme, National Technical Textiles Mission and infrastructure development programmes are expected to enhance the competitiveness of the Indian textile sector.

• Export Potential

Increasing market access through bilateral trade agreements, improved logistics infrastructure and Indias reputation as a reliable sourcing destination are expected to provide additional export opportunities.

• Sustainability

Growing preference among international brands for environmentally responsible manufacturing provides opportunities for companies adopting sustainable production practices, resource efficiency and ESG compliance.

• Digital Transformation

Adoption of automation, digital manufacturing technologies, artificial intelligence, data analytics and modern supply chain management systems is expected to improve productivity, quality and operational efficiency.

9. Challenges and Threats

While the long-term outlook remains positive, the textile industry continues to face several challenges.

Some of the significant risks include:

• Volatility in cotton and other raw material prices.

• Exchange rate fluctuations affecting export competitiveness.

• Rising freight and logistics costs.

• Increasing energy and fuel prices.

• Inflationary pressures affecting consumer demand.

• Global geopolitical uncertainties impacting international trade.

• Competition from low-cost manufacturing countries including Bangladesh, Vietnam and China.

• Stringent environmental and sustainability compliance requirements imposed by global buyers.

• Shortage of skilled manpower in certain manufacturing segments.

• Higher interest costs and working capital requirements.

• Supply chain disruptions arising from geopolitical events and international shipping constraints.

The Company continuously monitors these developments and adopts suitable risk mitigation strategies to minimise their impact on operations.

10. Future Outlook

The outlook for the Indian textile industry remains positive over the medium to long term.

India continues to strengthen its position as a preferred global sourcing destination supported by its integrated manufacturing ecosystem, abundant raw material availability, skilled workforce and supportive government policies.

Increasing domestic demand, improving export opportunities, technological advancements, sustainability initiatives and infrastructure development are expected to support the long-term growth of the industry.

The Company remains committed to improving operational efficiency, enhancing product quality, strengthening customer relationships and expanding market presence while maintaining prudent financial discipline.

Your Company continues to focus on sustainable growth through operational excellence, cost optimisation, efficient working capital management and continuous improvement initiatives. Management remains confident that these strategic measures will enable the Company to capitalise on emerging opportunities and create long-term value for all stakeholders.

PART III - COMPANY PERFORMANCE, RISK MANAGEMENT AND OTHER MANDATORY DISCLOSURES

11. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company is primarily engaged in the business of manufacturing and trading of textile products and operates in a single reportable segment, namely Textiles. Accordingly, segment-wise reporting, as prescribed under the applicable Indian Accounting Standards (Ind AS 108 - Operating Segments), is not applicable beyond the aforesaid segment.

During the financial year under review, the Company recorded Revenue from Operations of Rs. 240.65 Crore on a standalone basis as compared to Rs. 228.26 Crore during the previous financial year, registering a healthy growth in business operations. The improvement in revenue was primarily attributable to better sales realisation, improved customer demand, efficient execution of orders and sustained operational performance despite challenging market conditions.

12. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial statements of the Company have been prepared in accordance with the provisions of the Companies Act, 2013, the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act and other generally accepted accounting principles in India.

During FY 2025-26, the Company continued its focus on operational efficiency, cost optimisation and prudent financial management, resulting in improved profitability despite a challenging global business environment.

Key Financial Highlights (Standalone):

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	Rs. 240.65 Crore	Rs. 228.26 Crore
Total Income	Rs. 240.99 Crore	Rs. 228.66 Crore
Profit Before Tax	Rs. 11.60 Crore	Rs. 10.20 Crore
Profit After Tax	Rs. 8.62 Crore	Rs. 7.56 Crore
Earnings Per Share	Rs. 28.71	Rs. 25.19

The Company achieved growth in revenue and profitability during the year through better operational efficiencies, effective cost management and improved business performance. Profit Before Tax as well as Profit After Tax recorded healthy growth over the previous year, reflecting the Companys continued emphasis on operational excellence and disciplined financial management.

Management continues to focus on enhancing productivity, improving capacity utilisation, strengthening customer relationships and maintaining financial discipline to create sustainable long-term value for all stakeholders.

13. RISKS AND CONCERNS

The Company operates in a dynamic business environment and is exposed to various business risks that may impact its operations and financial performance.

The major risks identified by the management include:

• Volatility in prices of cotton, yarn and other raw materials.

• Foreign exchange fluctuations affecting export competitiveness.

• Changes in government policies, taxation and regulatory framework.

• Intense competition in domestic and international markets.

• Rising finance, logistics and energy costs.

• Working capital management challenges.

• Supply chain disruptions arising from geopolitical developments.

• Changes in customer demand and consumption patterns.

• ESG and sustainability-related compliance requirements.

The Company has established appropriate risk management processes to identify, monitor and mitigate significant business risks. Continuous review of business strategies, inventory management, customer diversification and financial discipline help minimise the impact of these risks.

14. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate system of internal controls commensurate with the size, scale and complexity of its operations.

The internal control framework is designed to ensure:

• safeguarding of assets;

• prevention and detection of frauds and errors;

• accuracy and completeness of accounting records;

• reliability of financial reporting;

• compliance with applicable laws, regulations and internal policies;

• efficient utilisation of resources.

The Company has documented policies, standard operating procedures and clearly defined authority levels for various business processes. Internal audits are conducted periodically by independent professionals, and the observations along with recommendations are reviewed by the Audit Committee and the management to ensure timely corrective actions.

The Audit Committee regularly reviews the adequacy and effectiveness of the internal financial control systems and recommends suitable improvements wherever considered necessary.

15. HUMAN RESOURCE DEVELOPMENT

The Company firmly believes that its employees constitute one of its most valuable assets and remain the cornerstone of its sustained growth.

The Company continues to focus on:

• maintaining cordial industrial relations;

• providing a safe, healthy and inclusive workplace;

• enhancing employee skills through training and development programmes;

• encouraging teamwork, innovation and continuous learning;

• recognising employee performance through transparent evaluation systems.

Industrial relations remained cordial throughout the year and the Company continued to receive wholehearted support and cooperation from employees at all levels.

16. DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements have been prepared in accordance with the applicable provisions of the Companies Act, 2013, Indian Accounting Standards (Ind AS), applicable rules thereunder and other recognised accounting principles generally accepted in India.

There has been no material departure from the prescribed accounting standards while preparing the financial statements for the year under review.

17. CAUTIONARY STATEMENT

Statements contained in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, government policies, taxation, foreign exchange fluctuations, raw material prices, demand and supply conditions, competitive pressures, technological developments, geopolitical developments and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements on the basis of subsequent developments, information or events.

18. DETAILS OF SIGNIFICANT CHANGES

During the financial year under review, there were no significant changes in the nature of business, operations or overall business environment of the Company which materially affected its financial position compared with the previous financial year.

19. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS

FINANCIAL YEAR

The return on Net Worth stood at 13.90% for the current financial year as compared to 14.13% for the previous financial year.

ACKNOWLEDGEMENT

The Board places on record its sincere appreciation for the continued trust and confidence reposed by shareholders, customers, bankers, suppliers, business associates and all other stakeholders. The Directors also acknowledge the dedication, commitment and valuable contribution made by the employees at all levels, which has enabled the Company to achieve consistent growth and improved performance during the financial year.