Premier Synthetics Ltd Management Discussions

INDIAN TEXTILE AND APPAREL INDUSTRY

The Indian textile and apparel (T&A) industry is a cornerstone of the nations economy, estimated at a massive USD 179 billion. It acts as the countrys second- largest employer right after agriculture, providing livelihood to over 45 million people directly. It contributes approximately 2 to 2.3% to the national GDP, around 7% to industrial output, and nearly 12% of the countrys total export earnings. It is also one of the largest employment- generating sectors, providing livelihoods to over 45 million people, both directly and indirectly, across the entire value chain - from cotton cultivation and yarn production to garment manufacturing and retail.

The Indian textile and apparel industry is a massive economic powerhouse valued at around USD 179 billion. India ranks as the worlds top producer of jute, the largest producer of cotton, and the second- largest producer of manmade fibers. Driven by major exports to countries like the United States and the United Kingdom, the industry maintains a strong trade surplus, with total annual exports reaching estimated USD 35.52 billion.

Estimated value of home textile industry in India for financial year 2024 and 2031 (in billion U.S. dollars)

Further, with the global apparel market expected to reach approximate USD 2.37 trillion by 2030, a CAGR of 8% and the global textile and apparel trade projected to grow to USD 1.2 trillion, opportunities for international expansion are set to increase. Domestically, the Indian textile and apparel market is anticipated to grow at a strong CAGR of 10%, reaching USD 350 billion by 2030, with exports contributing USD 100 billion - offering a significant boost to companies with global ambitions. Additionally, the technical textiles sector is poised for substantial expansion, with the global market projected to hit approximately USD 309 billion by 2047. Specifically, the Indian medical textiles segment, expected to grow at 15% annually, signals rising demand in high- value, specialized applications. For companies in the textile industry, this growth trajectory highlights an ideal environment for scaling operations, diversifying product lines, and tapping into both traditional and emerging high- margin markets.

Value of textiles exported from India in financial year 2025, by type (in million U.S. dollars)

OUTLOOK ON RAW MATERIAL

The current raw material outlook for the Indian textile industry reflects a stark divide between natural and synthetic fibers. While policy shifts are easing pressures on cotton, global geopolitical tensions and supply restrictions are keeping synthetic prices high.

Rebalancing and Policy Relief: Cotton remains Indias largest revenue- generating raw material. It constitutes over 68% of the application share in the domestic market.

Supply Relief via Tariff Policy: Following severe domestic shortages and price spikes earlier in the year, the industry received a major boost as the government scrapped the import duty on raw cotton. This has leveled the playing field for Indian spinning mills against global competitors.

Price Stabilization: Domestic Multi Commodity Exchange (MCX) cotton prices are stabilizing toward a consensus target of approx. 29,000 per bale (170 kg). This is down from previous highs, easing pressure on cotton yarn manufacturers.

Crop Vulnerability: While global stock levels are projected to rebalance, localized weather disruptions and uneven monsoon patterns continue to keep downside price risks alive.

COST PRESSURES AND SHORTAGES

Synthetic materials like polyester, viscose, and nylon face the most challenging operational environment due to raw material restrictions.

Elevated Domestic Pricing: Indian Polyester Staple Fiber (PSF) hovers around 1.25 per KG, which is significantly more expensive than global manufacturing benchmarks like China (0.95 per KG).

Quality Control Order (QCO) Friction: Anti- dumping duties and strict QCOs on imported man- made feedstock protect local raw material giants. However, they starve downstream apparel makers of cheaper synthetic inputs.

Geopolitical Volatility: Persistent supply chain disruptions in West Asia keep crude oil derivatives volatile, keeping input expenses high for polyester and nylon variants.

GOVERNMENT INTERVENTIONS & STRATEGIC SHIFTS

The state is actively attempting to pivot the raw material ecosystem toward self- reliance.

The National Fiber Scheme: Announced in the Union Budget, this central initiative aims to streamline training, technology, and upstream availability of premium, value- added fibers.

The Technical Textiles Push: Driven by the National Technical Textiles Mission, demand is rapidly shifting towards specialized, high- margin chemical raw materials rather than basic cotton weaves.

OPPORTUNITIES AND THREATS

Opportunities

Cotton Self- Sufficiency: India remains one of the largest global producers of raw cotton. This shields domestic mills from total dependence on volatile international agricultural imports.

Recycling and Circularity Lead: The rapid development of chemical recycling plants allows manufacturers to turn textile waste into high- quality recycled polyester. This directly appeals to sustainability- focused Western buyers.

Bio- Fiber Innovation: Rising global demand for eco- friendly apparel drives investment into alternative natural fibers like hemp, bamboo, and organic jute.

Value- Chain Upgradation: Central initiatives like the National Technical Textiles Mission incentivize mills to shift away from basic yarns. Instead, they focus on producing advanced, high- margin functional raw materials.

Strategic Buffer Stocks: Government- backed price support mechanisms help stabilize local cotton supplies during sudden international market shocks.

Threats

Synthetic Pricing Asymmetry: Anti- dumping duties and rigid local Quality Control Orders (QCOs) restrict cheap synthetic imports. This forces downstream apparel makers to buy domestic man- made fibers at heavily inflated prices.

Cotton Yield Fragility: Despite massive planting acreage, India suffers from low cotton yield per hectare. The crop remains highly vulnerable to erratic monsoon patterns and pest outbreaks.

Over- Reliance on Natural Fibers: The sectors heavy concentration on cotton leaves it exposed to seasonal agricultural shocks. It also misses out on the massive global consumer shift toward performance outerwear made of synthetic materials.

Upstream Monopoly Pressures: The consolidation of domestic man- made fiber production among a few massive conglomerates limits the bargaining power of smaller spinning and weaving units.

Traceability Mandates: Tightening international ESG laws (like the EUs digital product passports) place a heavy financial burden on raw material suppliers to certify every step of fiber sourcing.

FINANCIAL PERFORMANCE

Particulars	31/03/2026	31/03/2025
Gross Revenue from Continuing Operations	1,209.61	1,710.33
Profit before Interest, Depreciation & tax from Continuing Operations	(124.75)	119.44
Less: Interest	26.17	31.33
Less: Depreciation	27.14	6.82
Profit before tax from Continuing Operations (A)	(178.06)	81.29
Profit before Tax from Discontinuing Operations	212.54	54.82
Less: Provision for Tax	76.1	(12.95)
Less: Provision for Dividend	-	-
Profit after tax & dividend From Discontinuing Operations (B)	136.44	67.77
Net Profit/(Loss) for the period (A+B)	(41.62)	149.06
Add: Profit/(Loss) brought forward from previous year	(2,567.83)	(2,716.89)
Balance carried to Balance Sheet	(2,609.45)	(2,567.83)

RISKS AND CONCERNS

The primary threat crushing corporate margins is the massive gap between rising operational costs and stagnant selling prices.

Asymmetrical Inflation: Big textile companies have faced around 100 crore in sudden input- cost inflation. Raw material costs surged by 25% to 32%, but yarn prices rose by only 12% to 15% due to weak international demand.

Wage Hikes: Major apparel centers have seen minimum wage increases of 25% to 35%, severely inflating labor costs.

Inability to Pass Costs: Because export orders are locked in 3 to 4 months in advance, manufacturers are forced to absorb these sudden cost spikes, leading to sharp margin compression.

Negative Growth in Key Segments: Overall textile and garment exports declined by 2.2% to 35.8 billion. The drop is worse when measured in US dollars, proving that any apparent growth is just an illusion caused by rupee depreciation.

Commodity Vulnerability: While value- added apparel shows minor resilience, raw textile commodities like yarn and fabric have plummeted by over 2%, hard- hit by trade disruptions.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis describing the Companys objectives, predictions may be forward- looking statements within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward- looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Companys business as well as its ability to implement the strategy.

	Sd/-	Sd/-
Place: Ahmedabad	Gautamchand Surana	Sunny Singhi
Date: 27/08/2026	Managing Director	Director
	DIN: 00955362	DIN: 07210706