Polytex India Ltd Management Discussions

1. Global Economy

The global economy in FY2026 operated in an environment marked by elevated geopolitical uncertainties, persistent trade fragmentation and relatively tight financial conditions, which continued to weigh on economic activity across regions. Global output was mainly supported by continued expansion in technology-related investment, and the growing contribution of services trade to global growth. Inflationary pressures generally moderated across major economies as the effects of earlier monetary tightening continued to take hold, enabling several central banks to gradually shift toward a more accommodative policy stance.

However, the global environment remained fragile amid escalating geopolitical tensions. The outbreak of war in the Middle East disrupted energy supplies and trade flows, temporarily elevating fuel and food prices. Investment patterns continued to evolve, driven by rapid advancements in artificial intelligence, digital infrastructure, and strategic supply chains. Financial markets remained volatile, yet capital flows adapted to shifting conditions, underscoring the systems flexibility. Concerns around energy security and commodity market volatility continued to affect business confidence, even as innovation-led industries and sustainable technologies offered new opportunities to strengthen productivity and support long-term growth.

Global Growth Forecast (%)

	2025	2026	2027
World output	3.4	3.1	3.2
Advanced economies	1.9	1.8	1.7
\u2022 United States	2.1	2.3	2.1
\u2022 Euro Asia	1.4	1.1	1.2
\u2022 Emerging Market and Dev. Economies	4.4	3.9	4.2
\u2022 China	5.0	4.4	4.0
\u2022 India	7.6	6.5	6.5

Source: IMF World Economic Outlook Report April 2026

Outlook:

The global economic outlook remains challenging amid heightened uncertainty arising from evolving trade policies, geopolitical tensions, and rising global trade fragmentation. Growth is expected to moderate as economies adjust to a less favourable external environment characterized by weaker trade momentum, policy unpredictability, and persistent structural constraints. Rising trade barriers and shifts in global supply chains are likely to weigh on investment sentiment and economic activity, while fiscal pressures and elevated public debt levels continue to limit policy flexibility in several economies.

The global economy is expected to be supported by sustained policy coordination and the rapid pace of technological adoption. While risks remain, opportunities in digital transformation, energy transition initiatives and supply-chain diversification efforts continue to underpin long-term growth prospects.

2. Indian Economy:

The Indian economy continued to demonstrate resilience during FY2026, maintaining its position among the fastest-growing major economies despite escalating geopolitical tensions, global trade disruptions and volatility in commodity markets. Economic activity remained well-supported by domestic drivers, with real GDP growth of 7.6% underpinned by healthy consumption trends, sustained government expenditure on infrastructure and steady momentum across industrial and service sectors. Rural demand remained strong, riding on a good monsoon and robust agricultural activity, while urban consumption showed gradual improvement during the year.

Industrial growth was aided by ongoing infrastructure investments and policy-led initiatives, while services activity remained broad-based, driven by financial services, trade, logistics and digital-led segments. Inflationary pressures eased over the course of the year, with headline CPI inflation moderating to 3.4% in March 2026, supported by improved food supply conditions and relative stability in key input costs. However, persistent global commodity volatility and supply chain disruptions continued to pose upside risks. Liquidity conditions were actively managed by the Reserve Bank of India (RBI) to ensure sufficient system liquidity, supporting credit flows without creating financial instability.

Indias external position remained stable, supported by strong services exports, steady remittance inflows and comfortable foreign exchange reserves of over USD 700 billion, which provided resilience against global uncertainties. Fiscal indicators remained robust, with GST collections growing 8.3% to 22.3 lakh crores in FY2026, reflecting sustained economic activity, improved compliance and ongoing formalisation. Overall, the macroeconomic environment remained stable, anchored by strong domestic fundamentals, prudent policy measures and continued economic momentum.

	2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025	FY2026
Real GDP growth (%)	6.5	3.9	(5.8)	9.7	7.0	7.6	6.5	7.6
Average CPI inflation (%)	3.4	4.8	6.2	5.5	6.7	5.4	4.6	2.1
Average WPI inflation (%)	4.3	1.7	1.3	1.3	0.9	0.7	2.3	0.7
Merchandise exports (Yo-Y % Growth)	9.1	(5.0)	(7.5)	44.8	6.9	(3.1)	0.1	0.9
Merchandise imports (Yo-Y % Growth)	10.3	(7.6)	(16.6)	55.3	16.8	(5.9)	6.9	7.6
Current account balance (% of GDP)	(2.1)	(0.9)	0.9	(1.2)	(2.0)	(0.7)	(0.6)	(0.6)
Exchange Rate (Rs./S - avd)	699	709	74.2	74.5	80.4	82.8	84.6	88.3
10-year Yield	7.5	6.9	6.3	6.8	7.3	7.1	6.6	7.0

Source: Department of Economic Affairs (DEA), Ministry of Statistics and Programme Implementation (MoSPI), RBI

Outlook

Indias growth prospects remain strong, anchored by its demographic dividend, rapid digital adoption, and a reform driven policy environment. The agriculture sector is expected to benefit from continued investment in irrigation, technology, and crop diversification. Industrial activity is likely to accelerate further, supported by rising manufacturing capacity utilisation, private sector investment, and government initiatives such as the Production Linked Incentive (PLI) scheme, alongside a growing focus on green and sustainable manufacturing.

The services sector will continue to be Indias growth engine, driven by technology exports, fintech innovation, and the expansion of global capability centres. Inflation is expected to remain within manageable levels, aided by proactive monetary policy, though global energy prices and currency movements could pose challenges. With supply chain realignments and strong investor confidence, India is well positioned to consolidate its role as a global economic powerhouse committed to inclusive and sustainable progress.

Source: IMF World economic outlook, Apr26

3. Indian NBFC Industry

The Non-Banking Financial Company (NBFC) sector in India continued to demonstrate resilience in FY2026, maintaining its role as a critical pillar of credit delivery. The industry expanded steadily, supported by strong demand across retail and commercial segments. Asset quality remained a key area of focus across the sector. NBFCs continued to strengthen underwriting frameworks, collection mechanisms and portfolio monitoring practices, resulting in improved credit discipline and enhanced resilience of loan books. From a financial perspective, the sector demonstrated steady operating performance during FY2026. NBFCs continued to access diversified funding sources and maintained adequate liquidity buffers. The focus on operational efficiency, disciplined cost management and portfolio quality enabled lenders to navigate funding pressures and sustain earnings performance. Capitalization levels across the sector remained comfortable, supporting business growth and balance sheet strength.

Digital adoption continued to gain momentum, with NBFCs leveraging technology, analytics and digital platforms to enhance customer acquisition, improve service delivery and strengthen credit assessment processes. Investments in digital capabilities also contributed to greater operational efficiency and improved customer experience. Artificial intelligence and super app ecosystems are increasingly integrated into operations, improving efficiency and expanding access to financial services. The rapid growth of mobile based repayment channels illustrates how technology is reshaping customer behaviour and strengthening business models.

Overall, FY2026 was characterized by balanced growth, stronger risk management practices, increasing digitalization and a continued focus on portfolio quality, reinforcing the NBFC sectors importance within Indias financial system.

Growth Drivers for the Indian NBFC Industry Robust Retail Credit Demand:

The retail lending sector remains a key driver of growth, with strong demand for gold loans, vehicle financing, and personal loans. Rising incomes, increasing urbanisation, growing consumer aspirations and expanding entrepreneurial activity continue to drive demand for retail and business financing, supporting long-term growth opportunities for the sector.

4. Internal Control System and Adequacy:

Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. The control systems set on place are checked and further supplemented by MIS which provided for planned expenditure and information on disposal and acquisition of assets. Your company has an adequate system of internal control, designed to provide reasonable assurance that assets are safeguarded; transactions are executed in accordance with managements authorisation and properly recorded. Accounting records are adequate for preparation of financial statements and other financial information. Besides, the management has put in place system for review and monitoring of non-performing assets, if any of the company for effecting recoveries.

5. Financial:

The financial performance of the Company has been satisfactory in the year under review. The Financial performances of the Company are given as under:-

Performance	Year ended 31st March, 2025	Year ended 31st March, 2026
Profit/(Loss) before Depreciation and Taxation	(10,76,353)	(14,51,494)
Depreciation	NIL	NIL
Profit/(Loss) before Tax	(10,76,353)	(14,51,494)
Profit after Tax	(10,65,422)	(14,51,494)
Proposed Dividend	NIL	NIL
Interim Dividend	NIL	NIL
Dividend Tax	NIL	NIL

6. Human Resources:

Your company always regards human resources as its most valuable asset and continuously evolves policies and process to attract and retain its substantial pool of managerial resources through friendly work environment that encourages initiatives by individuals and recognizes their performance. The company has a competency based performance and potential appraisal systems for identifying and developing managerial talents and is reviewed on an ongoing basis. Emphasis is laid on providing adequate training to its employees, to meet the attitudinal and cultural values of the organization to achieve customer satisfaction.

7. Disclaimer:

Certain Statements in the management Discussion and Analysis describing the companys views about the industry, expectations, objectives, etc. may be understood within the meaning of applicable laws and regulations. Factors like changes in Government regulations, tax laws and other factors are such as industrial relations and economic developments etc. may further influence the companys operations or performance.