Premco Global Ltd Management Discussions

OVERVIEW- INDUSTRY STRUCTURE AND DEVELOPMENTS

The financialyear 2024-25 was a a difficult year with most economies trying to avoid recessionary pressures by providing alternative mechanisms to push the demand. Also Tariffs by US on various countries, to safeguard its interest, further put the business style of working of different economies which indirectly affected their trade either positively or otherwise. The Company kept its momentum by maintaining sales both in Export and Domestic Markets. Economies were still cautious due to Israel and Russian aggression on

Gaza and Ukraine territories.

Also differential tariffs by USA on various countries, to safeguard its own interest, have resulted in these Countries changing their business strategies and global trading patterns.

As per the National Statistical Office( year 2024 ), Ministry of Statistics and Programme Implementation:

Indias Real GDP and Nominal GDP are projected to grow by 6.4 per cent (YoY) and 9.7 per cent (YoY), respectively, in 2024-25. On the demand side, private consumption has witnessed continued momentum. It is estimated to grow at 7.3 per cent in 2024-25 compared to 4 per cent in 2023-24, reflecting the rebound demand witnessed in the current year on account of the release of pent up demand for contact-intensive services. Exports are projected to grow at 6.32 per cent in 2024-25 despite sustained supply chain disruptions and an uncertain geopolitical environment. The share of exports in GDP (at 2011-12 prices) remains at 22 per cent in

2023-24 compared to 21.8 per cent in 2022-23.

INDIA APPAREL AND TEXTILE INDUSTRY OUTLOOK. (AS PER MINISTRY OF TEXTILE)

The domestic apparel & textile industry in India contributes approx. 2.0 % to the countrys GDP, 10% to industrial production and 8.21% to exports earnings. India has a 3.91% share of the global trade in textiles and apparel. (Source:Textile Review-2023-24)

The textiles and apparel industry in India is the 2^nd largest employer in the country providing direct employment to 45 Mn people and 100 Mn people in allied industries.

The Indian textile and apparel market size is estimated around $175.7 Bn in 2023-24, with domestic market constituting $139.83 Bn and exports contributing $35.87 Bn (reference).

TECHNICAL TEXTILES IN INDIA ( AS PER MINISTRY OF TEXTILE)

India is the 5th largest producer of technical textiles in the world with a market size of nearly $28 Bn which is expected to reach $300bn by the centenary anniversary of the formation of the Indian republic.

Indias trade of technical textile products has been growing steadily and the country has a trade balance as a net exporter. Indias exports of technical textile products grew from $2.85 Bn in 2020-21 to $2.47 Bn in 2024-25, registering a growth rate of 11% CAGR (YoY). Exports are expected to grow to $ 6 Bn by 2026 and expected to reach $50 Bn by 2047.

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 togrowata significant 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

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 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) plan ning; 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

Company continues to strive for maximizing its capacity utilization in India & Vietnam by concentrating on securing new customers globally and in India and innovating and expanding its Product Mix of its Products.

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: -

in Lakhs

Particulars	Consolidated		Standalone
	March 2025	March 2024	March 2025	March 2024
Total Revenue	11,331.02	10,321.60	7,928.10	6,742.24
Expenses	9,394.59	8,310.83	6,201.76	5,715.81
Profit Before Finance Cost & Depreciation	1,936.43	2,010.77	1,726.35	1,026.43
Finance Cost	246.11	229.16	66.76	60.26
Depreciation & Amortization Exp.	592.17	515.14	374.46	246.18
Profit/(Loss) Items before Extraordinary	1,098.15	1,266.47	1,285.12	719.98
Extraordinary Items	-	(19.26)	-	(19.26)
Profit/(Loss) before	1,098.15	1,285.73	1,285.12	739.25
Less : Provision for current Taxation	193.61	227.94		120.25
Deferred Taxation adjustment	(73.78)	26.57	(73.78)	26.57
Short/(Excess) Income Tax Provision	27.57	7.66	27.57	7.66
Profit/(Loss) After Taxation	950.75	1,023.55	1,331.33	584.76
Minority Interest	-	-	-	-
Other Comprehensive Income (Net of Tax)	0.45	(3.95)	0.45	(3.95)
Total Comprehensive Income	951.20	1,019.61	1,331.78	580.81
Paid up Equity Share Capital	330.48	330.48	330.48	330.48
Earnings Per Share ()	28.77	30.97	40.28	17.69

FINANCIAL PERFORMANCE, OPERATIONS AND STATE OF THE COMPANYS AFFAIRS

CONSOLIDATED ANALYSIS

During the year under review, on consolidated basis, the total Revenue stood at 11,331.02 Lacs as compared to 10,321.60 Lacs in the previous year. Revenue from operations stood at 10947.51 Lacs as against 9,788.18 Lacs in the previous year. Other Income stood at 383.51 Lacs as compared to 533.42 Lacs in previous year. Net Profit after Tax stood at 950.75 Lacs as compared to the Net Profit after Tax of 1023.55 Lacs during the previous accounting year.

STANDALONE ANALYSIS

During the year under review, the total revenue stood at 7,928.10 Lacs as against 6,742.23 Lacs in the previous year. Companys revenue from operations stood at 6,382.41 Lacs as against 6,363.02 Lacs in the previous year. Other Income stood at 1,545.61 Lacs as compared to 379.21 Lacs in previous year. The Company earned Net Profit after Tax of 1331.34

Lacs as compared to Net Profit after Tax of 584.76 Lacs during the previous accounting 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	2024-25	2023-24
Financial Stability Ratios :
Total Debt/Equity (x)	0.10	0.06
Current Ratio (x)	4.58	6.90
Quick Ratio (x)	2.56	4.68
Interest cover (x)	5.46	6.59
Performance Ratios :
Return on Assets (%)	7.33	7.88
ROCE (%)	11.61	12.82
Asset Turnover (%)	84.81	75.62
Working Capital/Sales (x)	0.49	0.66
Return on Equity (%)	8.64	9.24
Profitability Ratios :
EBITDA (%)	17.69	20.69
PBT (%)	10.04	13.08
PAT (%)	8.69	10.42
Efficiency Ratios :
Receivables in days (Debtors	35	25
Turnover)
Inventory in days (Inventory Turnover)	188	211
Payables in days	44	40
Working capital cycle in days (Current ratio)	385	563
Growth Ratios (Y-o-Y) :
Net revenue growth (%)	9.78	6.99
Net sales growth (%)	12.32	5.18
EBITDA growth (%)	-8.97	7.45
PBT growth (%)	-1.86	11.78
PAT growth (%)	-6.71	4.51

Key financial measures (Standalone)

Particulars	2024-25	2023-24
Financial Stability Ratios :
Total Debt/Equity (x)	0.12	0.05
Current Ratio (x)	3.45	4.90
Quick Ratio (x)	1.45	2.28
Interest cover (x)	20.26	13.18
Performance Ratios :
Return on Assets (%)	14.48	6.62
ROCE (%)	15.67	9.47
Asset Turnover (%)	69.41	72.51
Working Capital/Sales (x)	0.39	0.43
Return on Equity (%)	17.64	7.75
Profitability Ratios :
EBITDA (%)	27.06	16.35
PBT (%)	20.14	11.53
PAT (%)	20.87	9.13
Efficiency Ratios :
Receivables in days (Debtors	50	44
Turnover)
Inventory in days (Inventory Turnover)	150	143

 

Particulars	2024-25	2023-24
Payables in days	47	42
Working capital cycle in days (Current ratio)	294	350
Growth Ratios (Y-o-Y) :
Net revenue growth (%)	17.59	-7.69
Net sales growth (%)	0.81	-10.09
EBITDA growth (%)	65.99	-30.66
PBT growth (%)	75.17	-37.70
PAT growth (%)	129.30	-37.34

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 2024, Premco Global limited Employs 500 strong work force in Indian Operations and more than 200 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.