Piotex Industries Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. Industry Structure and Developments

Indias textile and apparel industry is one of the countrys oldest and most significant industries, with a strong presence across the entire value chain, from fibre and yarn manufacturing to weaving, processing, garments and technical textiles. The sector comprises both organised, capital-intensive mills and a large decentralised powerloom, handloom, hosiery and knitting segment.

India has a strong raw-material base, including cotton, jute, silk and wool, along with man-made fibres such as polyester, viscose, nylon and acrylic. The industry continues to benefit from Indias large domestic market, skilled workforce, established manufacturing ecosystem and growing global demand.

During FY 2025-26, the textile and apparel sector continued to witness growth, supported by increasing domestic consumption, recovery in global apparel demand, expansion of organised retail and increasing sourcing from India by international brands. The growing preference for affordable and fashionable clothing, coupled with the expansion of e- commerce and organised retail, is expected to provide further opportunities to the sector.

Market Outlook

The Indian textile and apparel market is expected to witness strong long-term growth and is projected to reach approximately US$350 billion by 2030, supported by rising domestic demand and increasing exports. India continues to remain among the leading global textile and apparel exporters and has a strong position across cotton, yarn, home textiles, garments and technical textiles.

The global apparel and textile market is also expected to expand steadily, providing opportunities for Indian manufacturers and exporters. Indias technical textiles, home textiles and value-added textile segments are expected to remain key growth areas.

Government Initiatives

The Government of India continues to support the textile industry through various schemes and policy initiatives aimed at increasing manufacturing capacity, modernising technology, attracting investment and generating employment. Major initiatives include the PM Mega Integrated Textile Regions and Apparel (PM MITRA) Parks, Production Linked Incentive (PLI) Scheme for Textiles, Technology Upgradation Fund Scheme (TUFS) and schemes supporting technical textiles and the handloom sector.

Export Scenario

Exports remain an important component of the Indian textile industry. During FY 2024-25 and FY 2025-26, the sector continued to focus on increasing Indias share in global textile and apparel sourcing. The United States, European markets and other developed economies remain important export destinations, while diversification into newer markets is expected to support future growth.

Outlook

The outlook for the Indian textile industry remains positive, supported by increasing domestic consumption, favourable demographics, rising organised retail, e-commerce penetration, government support and the global shift towards diversified sourcing. Increasing demand for technical textiles, home textiles, sustainable products and value-added garments is expected to create additional growth opportunities.

However, the industry may continue to face challenges such as fluctuations in raw-material prices, global economic conditions, intense international competition, changing consumer preferences and volatility in export markets. Companies with efficient manufacturing capabilities, strong customer relationships, product diversification and focus on value-added products are expected to be better positioned to benefit from the sectors long-term growth.

2. Opportunities and Threats

Opportunities

• Government Incentives: The PLI scheme and other textile promotion policies support capital investment and competitiveness.

• Export Potential: Increasing demand from markets like the USA, EU, and Middle East for synthetic and blended textiles.

• Digital Transformation: Technology adoption in manufacturing and supply chain offers enhanced efficiency.

• Sustainability Trend: Rising demand for eco-friendly and recycled synthetic fibers creates new product lines.

Threats

• Raw Material Price Volatility: Prices of petrochemical-based raw materials such as polyester and nylon fluctuate with global crude oil prices.

• Global Trade Disruptions: Ongoing conflicts and trade protectionist policies may affect exports.

• Labour and Compliance Costs: Increased regulations and cost of compliance may affect profitability.

• Competition: Rising competition from global players in low-cost economies such as Vietnam and Bangladesh.

3. Segment-wise or Product-wise Performance

The Company is operating only in one segment. The turnover/performance of the Company has been disclosed in the Directors report under the Head "Review of Operations, sales and working results."

4. Outlook

Your company remains committed to upholding the highest standards of governance, transparency, and ethical practices. With India racing towards growth and becoming a strong economy, we look forward to emerge as a strong, reliable, and sustainable company. Together, we shall embrace the future with optimism, determination, and the desire to build a brighter tomorrow.

5. Risks and Concerns

Key risks faced by the Company include:

• Commodity Price Risk: Raw materials like polyester chips and filaments are crude-oil derivatives.

• Currency Risk: Export receivables are subject to forex fluctuations.

• Credit Risk: Delays in receivables from domestic and overseas clients.

• Environmental Compliance Risk: Non-compliance with stringent pollution control norms can attract penalties.

The Company has robust risk management and hedging mechanisms in place, including forward contracts, inventory management, and diversified client portfolios.

6. Internal Control Systems and Their Adequacy

The Company has a sound internal control system commensurate with its size and nature of operations. It includes policies and procedures to ensure:

• Efficient use and protection of resources.

• Accuracy and completeness of accounting records.

• Compliance with applicable laws and regulations.

Periodic internal audits are conducted and findings reported to the Audit Committee and Board for necessary action. No significant internal control weaknesses were observed during the year.

7. Financial Performance with Respect to Operational Performance

	Standalone
PARTICULARS	31.03.2026	31.03.2025
IX. Net Sales/Income from Operations	9020.56	13435.66
X. Other Income	68.27	34.41
XI Total Revenue (1+11)	9088.82	13470.07
XII. Earnings Before Interest, Taxes, Depreciation and Amortization Expense	118.00	499.29
XIII. Finance Cost	25.87	47.86
XIV. Depreciation and Amortization Expense	3.59	2.08
XV. Profit Before Tax (IV-V-VI)	88.54	449.35
XVI. Tax Expense:
Less: Current Tax Expense	22.53	115.76
Less: Deferred Tax	(0.09)	(2.67)
Short Provision for tax	0.50	-
Profit After Tax (VII-VIII)	65.61	336.26

8. Material Developments in Human Resources / Industrial Relations

The company continues to give utmost importance to Human Resources Development and keeps relations normal. As on 31st March, 2026, there are 9 employees.

Industrial relations continue to be harmonious and normal.

9. Details of Significant Changes in Key Financial Ratios

Sr. No. Ratio	Numerator	Denominator	As at March 31,2026	As at March 31,2025	% Variance	Notes
1 Current Ratio	Current Assets	Current Liabilities	4.83	4.10	17.91%
2 Debt-Equity Ratio	Total Debt	Total Equity	0.00	0.09	-97.03%	Refer Note:1
3 Debt Service Coverage Ratio	Earnings before Interest, Tax and Exceptional Items	Current maturity of long term debt + Interest Expense	4.56	3.92	16.31%
4 Return on Equity <ROE)<%>	Profit after tax	Average Net worth	2.54%	19.27%	-86.82%	Refer Note:2
5 Inventory Turnover Ratio	COGS	Average Inventory	123.49	294.57	-58.08%	Refer Note:3
6 Trade receivables turnover ratio	Value of Sales & Services	Average Trade Receivable	6.77	5.30	27.64%	Refer Note:4
7 Trade payables turnover ratio	Purchases	Average Trade Payable	32.59	11.18	191.49%	Refer Note:5
8 Net capital turnover ratio	Turnover	Average working capital	5.61	9.37	-40.09%	Refer Note:6
9 Net profit ratio(%)	Profit after tax	Value of Sales & Services	0.73%	2.50%	-70.94%	Refer Note:7
10 Return on capital employed (ROCE)(%)	EBIT	Capital Employed	0.04	0.19	-77.55%	Refer Note:8
11 Return on investments (%)	Net Profit	Equity + Reserves & Surplus	0.03	0.13	-80.98%	Refer Note:9

Reasons for Variations

1 Debt-Equity Ratio : Ratio has decreased primarily due to the repayment of loans, resulting in a reduction in the Companys overall debt levels.

2 Return on Equity (ROE) (%): The ratio has decreased due to lower profitability earned during the year.

3 Inventory Turnover Ratio : The ratio has decreased owing to an increase in average inventory levels.

4 Trade Receivables Turnover Ratio : The Ratio has increased primarily due to a proportionately higher reduction in average trade receivables compared to the decline in sales during the year.

5 Trade Payables Turnover Ratio : The Ratio has increased primarily due to a proportionately higher reduction in average trade payables compared to the decline in purchases during the year.

6 Net Capital Turnover Ratio : The ratio has decreased due to increase in average working capital.

7 Net Profit Ratio (%): The ratio has decreased on account of decline in the overall profitability of the Company.

8 Return on Capital Employed (ROCE): The ratio has decreased due to reduction in Earnings Before Interest and Tax (EBIT).

9 Return on Investments (%): The ratio has decreased owing to lower returns generated from investments during the year.

10. Cautionary Statement

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 may differ materially from those expressed or implied due to various factors including changes in economic, political, and regulatory environments, natural calamities, and market conditions.

		For and on behalf of Board of Directors
		Piotex Industries Limited
	Mr. Abhay Shriram Asalkar	Mr. Yogesh Omprakash Nimodiya
Date: 26th August, 2026	Managing Director	Executive Director
Place: Pune	DIN:06851614	DIN: 06851606