Premco Global Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

OVERVIEW- INDUSTRY STRUCTURE AND DEVELOPMENTS

The financial year 2025-26 was yet another a difficult year with most economies trying meet the challenges of International Markets. US Tariff impacted the textile sector severely and impacts were as follows;

U.S. tariffs have dealt a severe blow to Indias export-oriented economy, driving a $1.5 billion drop in shipments over a five-month span and causing significant job losses in labor-intensive industries. These steep duties, alongside geopolitical tensions, have weakened the Indian Rupee, widened the trade deficit, and reduced overall GDP growth projections.

Key Impacts on the Indian Economy

• Slumping Export Volumes: Indias exports to the U.S. fell sharply. Goods entering the U.S. market face prohibitively high duties, heavily dampening demand for Indian-made products.

• Battered Labor-Intensive Sectors: Traditional industries such as textiles, gems and jewelry, marine products (e.g., shrimp), and auto components have taken the hardest hit. Exporters are struggling to compete with rival nations, like Vietnam and Bangladesh, which face lower U.S. tariffs.

• Currency and Macroeconomic Pressure: Reduced export revenues have pressured the Indian Rupee, resulting in record lows against the U.S. dollar. This currency depreciation risks raising imported inflation, which could force the Reserve Bank of India to tighten monetary policy and raise borrowing costs

Strategic Response and Future Outlook

To counter the negative fallout, the Indian government and industry bodies are actively recalibrating their trade strategies:

• Market Diversification: Indian exporters are pivoting away from heavy reliance on the U.S. market. Focus has shifted toward increasing shipments to alternative markets in the UAE, Latin America, and Africa.

Trade Negotiations: India is engaged in continuous bilateral dialogues with Washington to secure product-level exemptions for critical sectors and to address trade imbalances without causing broader diplomatic friction.

Domestic Boost: Accelerating the rollout of targeted government export promotion missions and continuing to foster manufacturing via production-linked incentives (PLI) are critical elements of Indias long-term defense against tariff shocks.

APPAREL MARKET:

The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 2.3 billion by 2030. India ranks among the top five global exporters in several textile categories, with exports expected to reach US$ 100 billion.

The textiles and apparel industry contributes approximately 2% of Indias GDP and about 11% of manufacturing GVA (Gross Value Added) as of February 2026. The textile industry in India is predicted to double its contribution to the GDP to approximately 5% by the end of this decade. Global fibre demand is expected to reach around 149 million tonnes in 2030, with increasing population and growth in per-capita consumption.

The Indian Technical Textiles market is the fifth largest in the world. The technical textiles industry was valued at US$ 29 billion in 2024 and is projected to grow to US$ 45 billion by 2026, US$ 123 billion by 2035, and US$ 309 billion by 2047. The India mobiltech textile market (a division of technical textiles for automotive use) is projected to grow from US$ 2.32 billion in FY25 to US$ 4.57 billion by FY33, at a CAGR of 8.84%. This growth is driven by rising demand for advanced materials, electric vehicles, and sustainability focus.

The global apparel market was valued at US$ 1.9 trillion in 2025 and is expected to grow at a CAGR of 4.1% from 2026 to 2034. Growth is driven by rising demand for casualwear and athleisure, social media trends, higher disposable incomes, and e-commerce expansion.

In FY26 (April-February 2026), the total exports of textiles and apparel (including handicrafts) stood at US$ 32.63 billion. The ReadyMade Garments (RMG) category, with exports of US$ 14.53 billion, accounted for the largest share (45%) of total exports, followed by Cotton Textiles (29%, US$ 9.36 billion) and Man-Made Textiles (15%, US$ 4.82 billion).

The sector employs over 45 million people and produces approximately 22,000 million pieces of garments annually.

Road Ahead

The future of Indias textiles industry looks promising, supported by rising domestic demand, growing exports, and policy interventions that are strengthening competitiveness. The sector, which already contributes around 2% to GDP and employs over 45 million people, is expected to see its share in the economy nearly double by the end of the decade.

Technical textiles will play a pivotal role in this growth. The segment, valued at US$ 29 billion in FY24, is projected to expand rapidly, reaching US$ 45 billion by 2026 and continuing on a strong trajectory thereafter. Within this, mobiltech textiles for automotive use are expected to nearly double from US$ 2.32 billion in FY25 to US$ 4.57 billion by FY33, driven by the rise of electric vehicles and demand for advanced materials.

Sustainability and innovation are emerging as defining themes for the industry. Companies are increasingly adopting eco-friendly processes and recyclable fibres to align with global trends, while government schemes like MITRA Parks and support for integrated textile hubs are encouraging value addition and modernisation.

With household incomes rising, urbanisation expanding, and demand from sectors like housing, healthcare, and hospitality growing steadily, Indias textile and apparel market is projected to reach US$ 350 billion by 2030. This positions India not only to strengthen its domestic market but also to expand its global footprint in textiles and apparel.

References: Ministry of Textiles, Indian Textile Journal, Department of Industrial Policy and Promotion, Press Information Bureau, Union Budget 2026-27

PREMCO GLOBAL LIMITED, is a member of Technical Textiles Association. Technical textiles are textile materials and products used for their technical performance and functional properties. Technical Textiles have a huge scope for growth in India and is a sunrise sector.

India accounts for 11% (USD 22 Billion) of the worlds technical textile production (USD 197 Billion). Technical textiles account for up to 13% of Indias overall textile and garment industry and adds 0.7 percent to Indias GDP. According to the Commerce Ministry of India (2024), the Technical Textile sector is expected to grow at a significant growth rate of 20% p.a. over the next five years.

STRENGTHS:

The Companys strengths lie in its management ability to work on innovative ideas, products and services to its customers. Its ability to meet fashion designs through its Sampling and R & D team enables the Company to meet marketing challenges and new trends. Further the Companys financial stability and its ability to cover financial and non- financial risks makes the business environment meet its commitments even in challenging economic environments.

RISK AND CONCERN (WEAKNESS)

The Company has robust risk management procedures to identify and evaluate risks on an ongoing basis. Risks are inherent to business activities, however the company recognizes these risks and formulates mitigating actions across.

• Strategic Risks,

• Compliance Risks,

• Operational Risks,

• Reporting obligations and

• Environment, Health and Political Risks

The identified risks are integrated into the business plan with detailed action plans to mitigate the identified business risk.

OPPORTUNITIES AND THREATS FOR THE COMPANY OPPORTUNITIES:

For the apparel industry in general and our market in particular:

• Company has a geographical advantage in the supply of goods to its overseas customers, as it also has a plant in VIETNAM, which is presently a large global textile Hub, and ranks amongst the most rapidly growing countries for textiles manufacturing and exporting.

• Increasing fashion consciousness, higher disposal incomes and consumers becoming more aspirational, discerning and brand savvy, will boost sales for brands to which the Company has been manufacturing and supplying ELASTIC TAPES. Demand is expected to steadily increase for Companys products.

• In 2023-27, the Company has successfully renewed its SINGLE STAR EXPORT HOUSE CERTIFICATE, which will enable our company to be recognized for ease of operation with tax and banking officials.

• Setting up of new factory: As Committed, the Company has established an additional factory in Gujarat, at Umbergaon with a capital outlay of Rs.28 crores, funded through both internal Accruals of Company and bank borrowing. The Plant has been upgraded with state of art facilities for manufacturing products conforming to Global Standards.

THREATS

Many major international textile companies have ventured into technical textile business in India realizing that Indian markets are likely to emerge as one of the largest markets in the world in the next few decades. Due to this, we expect enhanced competition for the Companys Products. Companys Exposure to Foreign Currency Risks due to Overseas Operations.

Sustainability:

We have initiated integration of sustainability across the value chain of our business by

(i) recognizing its scope and relevance;

(ii) articulating our approach

(iii) planning; and

(iv) putting in place an execution framework.

The sustainability journey is guided by a Senior Team under the leadership of Chairman and Board. The sustainability drive has specific focus areas and there is a team with a mission and unit team heads leading the effort in each focus area and at each manufacturing unit. We have now adopted a sustainability culture in all aspects of our business.

SEGMENTWISE PERFORMANCE:

The Company is mainly engaged in the business of Manufacturing of Woven & Knitted Elastic Tapes and all other activities of the Company revolve around the main business, and as such, there are no separately reportable segments.

OUTLOOK

In view of US Tariffs Company has been focussing on other National and International Markets to compensate the Business opportunities lost due to political embroglio and Trade Tariffs between and India and US. Company is also working on other cost effective and Cost Optimising efforts to boost Companys Profit Margins and improve its EBIDTA. Companys ability to venture into New Technical Textile product mix will surely be reflected in ensuing results.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has adequate internal control systems commensurate with the size and nature of its business. The Management is entrusted with the overall responsibility of the Companys internal control systems to safeguard assets and ensure reliability of financial records. The Company has a detailed budgetary control system and actual performance is reviewed periodically to align operating cost with business performance.

The Internal audit program covers all areas of activities with periodical reports submitted to the Management. Internal Auditors submit their quarterly report to the Audit Committee and are invited to the meeting to clarify any issues that may be raised by the Committee members. The Audit Committee reviews all financial statements to ensure adequacy of internal control systems. The Company has a well-defined organization structure, authority levels and internal rules and guidelines for conducting business transactions.

1. FINANCIAL SUMMARY HIGHLIGHTS

The Financial Performance for financial year 2024-2025 is summarized in the following table: -

				Rs. in Lakhs
Particulars	Consolidated		Standalone
	March 2026	March 2025	March 2026	March 2025
Total Revenue	10057.98	11,331.02	7373.84	7,928.10
Expenses	8434.68	9,394.60	5424.61	6,201.75
Profit Before Finance Cost & Depreciation	1623.30	1,936.42	1949.23	1,726.35
Finance Cost	240.50	246.11	67.41	66.76
Depreciation & Amortization Exp.	564.33	592.16	353.02	374.46
Profit/(Loss) before Extraordinary Items	818.47	1,098.15	1528.80	1285.13
Extraordinary Items	94.05		94.05	-
Profit/(Loss) before Taxation	724.42	1,098.15	1434.75	1285.13
Less : Provision for current Taxation	84.12	193.61
Deferred Taxation adjustment	(41.57)	(73.77)	(41.57)	(73.77)
Short/(Excess) Income Tax Provision		27.56		27.56
Profit/(Loss) After Taxation	598.73	950.75	1393.18	1331.34
Minority Interest
Other Comprehensive Income (Net of Tax)	0.42	0.45	0.42	0.45
Total Comprehensive Income	599.15	951.20	1393.60	1331.78
Paid up Equity Share Capital	330.48	330.48	330.48	330.48
Earnings Per Share (?)	18.12	28.77	42.16	40.28

FINANCIAL PERFORMANCE, OPERATIONS AND STATE OF THE COMPANYS AFFAIRS 1. PERFORMANCE OVERVIEW:

A. CONSOLIDATED PERFORMANCE

During the year under review, on a consolidated basis, the Company recorded a total revenue of 010,057.98 Lakhs, reflecting a decline of 11.23% compared to 011,331.02 Lakhs in the previous financial year.

• R evenue from operations stood at 09,368.04 Lakhs during the year under review as compared to 010,947.51 Lakhs in the previous year.

• Other income, however, increased to 0689.94 Lakhs from 0383.50 Lakhs in the previous year.

The Profit After Tax (PAT) for the year stood at 0598.73 Lakhs as against 0950.75 Lakhs in the previous year, registering a decline of 37.02%. The decrease in profitability was primarily attributable to the impact of tariff measures imposed by the United States of America and prevailing geopolitical uncertainties, including war-like situations in various regions, which adversely affected global trade and business conditions.

B. STANDALONE PERFORMANCE

During the year under review, the Company reported a total revenue of 07373.84, showing a mariginal decline of 6.99% compared to 07,928.10 Lakhs Lakhs in the previous financial year.

• Revenue from operations stood at 05,176.47 Lakhs, showing a marginal decrease over 06,382.49 Lakhs reported in the previous year.

• Other income saw a substantial rise to 02,197.37 Lakhs, up from 01,545.61 Lakhs in the prior year, reflecting a growth of over 42.16%.

As a result, the Net Profit after Tax (PAT) improved significantly to 01,393.18 Lakhs, as against 01,331.34 Lakhs in the previous financial year an increase of 4.64%.

The overall improvement in profitability is primarily attributable to higher sales and a reduction in certain operational expenses during the year.

FINANCIAL VISION AND OUTLOOK:

The Company Targets to maximize, its capacity utilization in India & Vietnam, by entering new markets like Europe and Bangladesh and introducing new products.

Key financial measures (Consolidated)

Particulars	2025-26	2024-25
Financial Stability Ratios :
Total Debt/Equity (x)	0.18	0.10
Current Ratio (x)	4.93	4.58
Quick Ratio (x)	3.15	2.56
Interest cover (x)	4.01	5.46
Performance Ratios :
Return on Assets (%)	4.61	7.33
ROCE (%)	7.94	11.61
Asset Turnover (%)	72.11	84.81
Working Capital/Sales (x)	0.59	0.49
Return on Equity (%)	5.77	8.64
Profitability Ratios :
EBITDA (%)	16.33	17.69
PBT (%)	7.74	10.04
PAT (%)	6.40	8.69
Efficiency Ratios :
Receivables in days (Debtors Turnover)	32	35
Inventory in days (Inventory Turnover)	198	188
Payables in days	43	44
Working capital cycle in days (Current ratio)	475	385
Growth Ratios (Y-o-Y) :
Net revenue growth (%)	-11.23	9.78
Net sales growth (%)	-14.38	12.32
EBITDA growth (%)	-19.30	-8.97
PBT growth (%)	-3.41	-1.86
PAT growth (%)	-37.01	-6.71

Key financial measures (Standalone)

Particulars	2025-26	2024-25
Financial Stability Ratios :
Total Debt/Equity (x)	0.08	0.12
Current Ratio (x)	4.09	3.45
Quick Ratio (x)	2.24	1.45
Interest cover (x)	22.94	20.26
Performance Ratios :
Return on Assets (%)	15.74	14.48
ROCE (%)	18.32	15.67
Asset Turnover (%)	58.46	69.41
Working Capital/Sales (x)	0.56	0.39

 

Particulars	2025-26	2024-25
Return on Equity (%)	18.73	17.64
Profitability Ratios :
EBITDA (%)	35.85	27.06
PBT (%)	27.72	20.14
PAT (%)	26.92	20.87
Efficiency Ratios :
Receivables in days (Debtors Turnover)	47	50
Inventory in days (Inventory Turnover)	133	150
Payables in days	53	47
Working capital cycle in days (Current ratio)	404	294
Growth Ratios (Y-o-Y) :
Net revenue growth (%)	-6.99	17.59
Net sales growth (%)	-0.19	0.81
EBITDA growth (%)	7.45	65.99
PBT growth (%)	11.63	75.17
PAT growth (%)	4.64	129.30

MATERIAL DEVELOPMENT IN HUMAN RESOURCES (INCLUDING NO OF PERSONNEL EMPLOYED)

The Company believes that Human Resources is one of the most vital resources and a key pillar in providing the Organization a competitive edge in a current business environment.

The Work Environment is very challenging and performance oriented. The Company recognizes employees potential and provides them with growth opportunities and takes suitable measures for employees welfare.

As on 31st March 2026, Premco Global limited Employs 400 strong work force in Indian Operations and more than 300 Managers, Workers and staff in Vietnam.

Performance Management for Staff Members:

The Company has designed and implemented a Performance Management System (PMS) that allows individual Goal/KRA (Key Result Area) setting. This enables a two-way discussion between a Staff Member and his/her Reporting Manager (Coach) which ensures that the organizations objectives are percolated down to teams and individuals.

Talent Acquisition:

The Company continues to strengthen both leadership and managerial teams. Taking into consideration the increasing scale of operation, we have inducted senior leaders and executives who bring rich experience from world-class organizations, as well as young professionals, who bring fresh energy into our organization.

GROUP INSURANCE:

Company continues with its commitment towards providing group insurance to ensure that employees get a safety cover and also ensure that all the plants comply with government norms to ensure adequate safety measures. Company Employees aged 60 plus have also been offered protection up to 3,00,000 rupees for any disease. This cover is optional at the request of Employee.

Cautionary statement:

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual might differ materially from those either expressed or implied.