Sanathan Textiles Ltd Management Discussions

Economic overview

Global Economy¹

In CY 2024, the global economy recorded a steady and moderate growth of 3.3%, navigating challenges such as ongoing geopolitical tensions, evolving trade patterns and changing monetary policies. In response, governments worldwide recalibrated their economic strategies, focusing more on technological advancement, bolstering supply chain resilience and promoting economic diversification to drive long-term sustainable growth.

Global inflation eased from 6.6% in CY 2023 to 5.7% in CY 2024, largely due to effective monetary policy measures and improved stability in energy markets. These developments helped restore price stability and reinforced the momentum of global economic recovery. Emerging markets and developing nations were the primary engines of growth, expanding by 4.3%, compared to a 1.8% increase in advanced economies. This divergence was fuelled by robust domestic demand, rising foreign investment and reduced dependence on external trade.

Outlook

Global economic growth is anticipated to remain modest over the next few years, with forecasts indicating a 2.8% increase in CY 2025 and 3.0% in CY 2026. This outlook is supported by a gradual reduction in inflation and sustained efforts by central banks to maintain economic stability through targeted monetary measures. Emerging markets are projected to sustain robust growth, with an estimated expansion of 3.7% in CY 2025, whereas advanced economies are expected to recover at a slower pace, posing a growth rate of approximately 1.4% in the same year.

Inflation is expected to continue its downward trend, reaching 4.3% in CY 2025 and 3.6% in CY 2026, which is likely to bolster consumer spending. Despite recent tariff increases impacting global trade, the resilience and interdependence of the global economy remain intact.

In response to evolving market conditions, both governments and businesses are actively reconfiguring supply chains in response to shifting dynamics. Additionally, ongoing advancements in technology, rising workforce productivity and improved infrastructure are poised to support sustainable long-term economic growth, contributing to renewed global optimism.

Indias Economy and Industry Overview

The global textile market size was valued at approximately USD 1,976.84 billion in 2024, with growth driven by increasing demand for functional fibres, technological progress and heightened customer awareness of environment-friendly and sustainable products. The Asia-Pacificregiondominatedthemarketwith54%oftheglobal share in 2024, with major contributions from India, China and Bangladesh. Factors such as raw material availability, a young fashion-conscious population and favourable government policies fuelled the regions growth.

Looking ahead, the global textiles market is poised for substantial expansion, reaching an estimated USD 3,047.24 billion by 2030. The sectors future will be shaped by continued advancements in smart textiles, growing applications in technical fields and a shift towards sustainable production. India continues to play a significant role in driving global economic growth, with GDP grew by 6.5% in FY 2024-25.² This growth is supported by strong rural demand, increasing foreign investment and government initiatives aimed at boosting consumption and capital expenditure. While the service sector has seen steady expansion, manufacturing remains a major pillar of the economy. The governments emphasis on "Make in India" and the National Logistics Policy is catalysing a renewed focus on manufacturing, which is being positioned as a central pillar of Indias long-term economic strategy. With favourable demographics, improving ease of doing business, and supply-chain diversification, India is emerging as a global alternative manufacturing hub.

Within this broader context, the textile and apparel sector, a cornerstone of Indias industrial ecosystem, is witnessing significant transformation. Structural reforms such as the Production Linked Incentive (PLI) Scheme, establishment of PM-MITRA Textile Parks and programmes like Samarth for skill upgradation and the National Technical Textiles Mission (NTTM) further support innovation, capacity, and exports, all intended together to make the sector modern. Expansion in textile manufacturing is also being driven by rising domestic consumption, increased export potential, and greater adoption of automation and sustainable practices.

Yarn manufacturing, forming the upstream base of the textile value chain, plays a critical role in enabling downstream segments such as Apparel and garments, technical textiles, automotive fabrics, and home furnishings. The demand for Polyester Filament Yarn (PFY) in particular is growing steadily due to its durability, versatility, and alignment with sustainability trends, especially in dope-dyed variants that eliminate water-intensive dyeing processes. Companies with integrated capabilities, cost-efficiency, environmentally friendly manufacturing practices, sustainable energy solutions, and proximity to key markets are well-positioned to benefit from this shift.

India ranks among top textile exporters with 4.6% global share

5^th largest producer of Technical textile

2^nd largest producer of Cotton, Polyester, Viscose & Silk

Indian Yarn Manufacturing

Indias textile market size was estimated at US $146.6 billion in 2024, with expectations to grow to US $213.5 billion by 2033 (CAGR 3.85%). Indias yarn manufacturing landscape is undergoing a paradigm shift, driven by the growing prominence of man-made fibres (MMF), particularly Polyester Filament Yarn (PFY). While natural fibres like cotton have traditionally dominated the Indian textile sector, global consumption trends are increasingly favouring synthetics due to their superior durability, cost-efficiency, functional capabilities and adaptability across end-use industries. India is the second-largest producer of PFY globally, and this segment now accounts for over 40% of the countrys total fibre consumption, a share that is expected to increase steadily in the coming decade. Compared to the global average of 13.5 kg per person, and 22.5 kg in North America and 12 kg in China, Indias per capita fibre consumption stands at approximately 5.5 kg per year, of which 3.1 kg is man made fibre (MMF)

Polyester Filament Yarn, a key contributor in the MMF category, has seen robust demand growth, fuelled by rising consumption in sportswear, automotive fabrics, furnishings, and fashion textiles. PFYs ability to meet functional, aesthetic, and environmental standards - particularly in its dope dyed variant and recycled form, which eliminates water-intensive post-processing has positioned it as a future-ready yarn. The MMF-focused

PLI scheme, import rationalisation of raw materials, and dedicated PM-MITRA Textile parks have further incentivized capacity expansion and backward integration by domestic manufacturers. India is projected to double its MMF capacity in the next five years, and PFY is poised to be at the heart of this growth.

Parallel to the PFY uptrend is the emergence of technical textiles as a high-potential vertical within Indias textile manufacturing ecosystem. Estimated to grow at a CAGR of ~15% over the next five years, the Indian technical textile market is witnessing increasing adoption in segments such as geo-textiles, medical textiles, automotive textiles, protective clothing, and agro-textiles. Yarn manufacturers like Sanathan Textiles are aligning product development and capacity expansion to cater to these evolving technical applications, by focusing on high tenacity, fire-retardant, anti-bacterial, and UV-resistant yarns that meet both Indian and global standards.

The convergence of domestic infrastructure growth, export market penetration, sustainability orientation, and government support is reshaping Indias yarn manufacturing narrative. As value shifts from commodity-driven production to engineered and specialised yarns, manufacturers with integrated capabilities, advanced automation, and ESG-aligned operations such as Sanathan Textiles are well-positioned to lead the next phase of Indias textile evolution.

Opportunities

1. Shift to Man-Made Fibres (MMF):

Global fibre consumption is tilting towards MMF, especially polyester. MMFs offer better durability, functionality, lower cost, and versatility across applications. Dope-dyed coloured yarns and recycled polyester cater to eco-conscious buyers.

2. Technical Textiles Growth:

Increasing demand in automotive applications, industrial applications, and medical applications for functional yarns. Product innovation (antimicrobial, flame-retardant, high-tenacity yarns) is rising. Government support and separate recognition of technical textiles in policy frameworks.

3. Policy and Export Incentives:

PLI scheme offers capital support for MMF investments and scale-up. PM-MITRA Textile parks promote integrated clusters with shared infrastructure. Indias strong cotton and growing polyester base improves export competitiveness.

Threats

1. Global Competition Pressure:

Indian yarn producers face pricing pressure in international and domestic markets. Delay in modernisation may erode global market share.

2. Trade and Regulatory Risks:

Anti-dumping duties and QCOs affect import/ export flows. Changes in labour laws, GST structure, or power tariffs can disrupt cost planning. Delays in policy implementation may hinder investment momentum.

3. Environmental and Sustainability Mandates:

Pressure to reduce water usage, emissions, and chemical discharge. Buyers increasingly demand traceability, certifications, and green compliance. Non-compliance can lead to loss of large institutional and export orders.

Strength

1. Core to the Textile Value Chain:

Yarn is the foundational input for all fabric manufacturing, ensuring steady demand. It serves diverse applications—from apparel and home furnishing to technical textiles. Its role is critical in value addition and determines the quality of end products.

2. Diverse Product Offerings:

Industry spans natural fibres (cotton, jute, wool) and synthetic yarns (polyester, viscose, nylon). Allows manufacturers to cater to a wide array of markets—fashion, automotive, medical, etc. Enables customization and development of performance-based yarns for specific needs.

3. Scale and Process Efficiency:

Large integrated players benefit from economies of scale in production and procurement. Adoption of automation and advanced machinery ensures consistency and throughput. Integrated Polymerization Spinning and texturizing reduce handling costs and lead times.

Weaknesses

1. Capital and Infrastructure Intensive:

Requires significant upfront investment in plant, machinery, and utilities. High fixed costs necessitate consistent capacity utilisation for profitability. Smaller players struggle to match quality and efficiency standards of larger firms.

2. Raw Material Price Volatility:

Synthetic yarns depend on crude oil derivatives (PTA, MEG), whose prices are unpredictable. Cotton yields are susceptible to climate variation and global supply trends. Fluctuations impact temporary demands, working capital and pricing strategy.

3. Environmental Footprint:

Traditional dyeing processes are water-intensive and generate effluents. Energy consumption in spinning and heating processes adds to the carbon footprint. Growing need for compliance with environmental regulations adds cost and complexity.

Company Overview

Sanathan Textiles Limited is one of Indias leading Integrated yarn manufacturer, offering a Diversified portfolio of high-quality Polyester Filament Yarns, Cotton Yarns and Yarns for Technical Textiles catering to multiple end-use industries including apparel, automotive, furnishings. Established with a long-term vision to contribute to the growth of Indias textile sector, Sanathan Textiles has evolved into a trusted name in the industry, known for its scale, innovation, and commitment to excellence.

The Companys journey began as a family-owned enterprise, built on strong entrepreneurial values, ethical business conduct, and a deep understanding of the textile value chain. Over the years, Sanathan Textiles has successfully transitioned into a professionally managed organization, while retaining the foundational ethos of its promoters. The Board and Management team comprise of experienced professionals and next-generation leadership, ensuring succession, continuity, innovation, and operational excellence.

Sanathan Textiles primary manufacturing facility is located at Silvassa with a total production capacity of 2,23,750 MTPA. This integrated unit houses polymerisation, spinning, texturizing, and value-addition capabilities, enabling the Company to cater to both standard and made-to-order customised yarn requirements. The facility is supported by advanced technology, stringent quality controls, and sustainability practices such as the Zero

Liquid Discharge and Global Recycle Standard packaging for the Finished Goods that are sent outside the facility.

At Sanathan Textiles, cotton spinning is an art perfected through precision, consistency, and responsible sourcing. With a dedicated focus on quality, we procure premium-grade cotton from trusted suppliers to ensure fibre integrity, uniformity, and strength. Our state-of-the-art spinning infrastructure at Silvassa, comprising of 1.32 lakh spindles, is designed to transform this high-quality raw cotton into superior yarns that meet the demanding standards of the leading brands. Leveraging advanced machinery and process controls, we produce cotton with excellent fineness, durability, and performance characteristics delivering value across apparel, home textiles. This commitment to excellence in cotton spinning reflects our broader ethos of combining material precision with manufacturing scale, setting new benchmarks for reliability and innovation in the textile industry.

As part of its strategic growth agenda, Sanathan Textiles through its Wholly Owned Subsidiary i.e. Sanathan Polycot Private Limited, is in the process of commissioning a state-of-the-art greenfield facility in Wazirabad, Punjab, which will significantly expand its manufacturing capacity to 570,500 MTPA. This new plant is expected to strengthen the Companys operational footprint in Northern India, improve logistic efficiencies, and enhance customer proximity which will support to create a circular economy. Upon completion, the Punjab facility will enable Sanathan to double its overall capacity, supporting its ambition to become one of the most agile and scalable yarn manufacturers in the country, thereby adding value to our customers, vendors and stakeholders.

The rising adoption of active sportswear and technical textiles is expected to be a key demand catalyst for Polyester Filament Yarns (PFY) in the coming years. With increasing focus on fitness, athleisure, and performance-based apparel, consumers are shifting towards garments that offer durability, moisture-wicking, breathability, and stretchability, all attributes where polyester outperforms natural fibres. Simultaneously, the growth of technical textiles across sectors such as automotive, medical, industrial safety, geo-textiles, and protective wear is accelerating the need for high-performance yarns that meet functional and regulatory requirements. PFYs inherent characteristics - high tensile strength, lightweight, dimensional stability, and cost-effectiveness make it the preferred choice for these specialised applications. As global and domestic manufacturers respond to this demand shift, the consumption of PFY is poised to rise significantly, positioning integrated and innovation-led producers like Sanathan Textiles to benefit from this structural transformation in the textile landscape and with a clear focus on sustainability, digitisation, and customer-centric innovation, environmentally friendly practices. Sanathan Textiles continues to build long-term value for customers and stakeholders while contributing meaningfully to Indias textile industry and manufacturing landscape.

SWOT Analysis on Sanathan Textiles

Strengths

1. Integrated and Diversified Manufacturing Capability

Offers a comprehensive product portfolio across Polyester Filament Yarn (PFY), Texturised Yarn, Dope Dyed Yarn, Cotton Yarn, and Technical Textiles catering to diverse end-use industries.

End-to-end control over production enables consistent quality, customisation, and better supply chain management.

Focus on value-added and sustainable yarns positions the Company well in premium and export markets.

2. Strategic Expansion Footprint

Established manufacturing base in Silvassa with proven operational track record and infrastructure.

New greenfield plant in Wazirabad, Punjab, will double production capacity and offer Just-in-time, Customer Satisfaction and logistical advantages for North India Market.

Plant proximity to raw materials and consumption centres will enhance cost efficiency and customer responsiveness.

3. Sustainability and Process Efficiency

Adoption of rice husk-based boilers and dope dyeing technology for coloured yarns reflects commitment to eco-friendly practices.

Ensuring Zero Liquid Discharge at Plant to align with the sustainability expectations of global buyers, enhancing brand credibility.

Focus on automation and digitisation to improve operational productivity and cost competitiveness.

Weaknesses

1. Product Concentration in Synthetic Yarn Segment

High reliance on PFY and related yarns exposes the Company to fluctuations in polyester demand and crude-linked raw material prices.

Limited presence in natural and blended fibre segments.

Market cyclicality can affect volume growth and pricing power in commodity yarn categories.

2. Inventory Management Sensitivity

Managing raw material procurement and finished goods turnover is critical, especially during expansion phases.

Any mismatch in demand forecasting could impact margins and liquidity.

3. Geographic Dependence Pre-Commissioning of Punjab Plant

Until full commissioning of the Punjab facility, operations remain heavily centred around Western India.

Limits immediate access to textile clusters in the North and North-East.

Creates dependence on long-haul logistics for servicing distant customers.

Opportunities

1. Rising Domestic Consumption and MMF Shift

Indiaspercapitafibreconsumptionisincreasing, with a clear shift towards man-made fibres driven by demand for performance fabrics.

PFY demand is expected to surge in athleisure, home textiles, and technical textiles.

Sanathan is well-positioned to cater to this demand through its expanded capacity and product mix.

2. Government Policy Tailwinds

Beneficiary of textile-specific policies such as the PLI Scheme for MMF, PM-MITRA parks, and ATUFS, which inturn supports expansion and modernisation.

Focus on synthetic and technical textiles by the government aligns with Sanathans core manufacturing strengths.

Favourable export incentives and FTAs may open new markets.

3. Sustainability and ESG-Aligned Growth

Rising global emphasis on traceable, low-impact textiles creates a competitive edge for Sanathans dope-dyed and renewable-energy-driven operations.

ESG-conscious buyers are prioritising suppliers with documented sustainability initiatives.

Potential to attract ESG-focused funds and institutional investors.

Threats

1. Raw Material Price Volatility

Prices of PTA, MEG, and other crude-based inputs are subject to international price swings, affecting cost stability.

Supply disruptions or geo-political factors can further intensify pricing risks.

Requires dynamic sourcing and inventory hedging strategies.

2. Intensified Competition

International players with large capacities and cost efficiencies are expanding aggressively.

Domestic players with large capacities and cost efficiencies lead to continued pressure on margins.

Pricing pressure in commodity yarn segments can affect margins if value-added differentiation is not maintained.

Chinese and Southeast Asian exporters continue to offer stiff price-based competition.

3. Regulatory and Compliance Burden

Increasing environmental regulations, energy norms, and labour laws require sustained investment in compliance systems.

Any lapses can lead to penalties, disruption of exports, or reputational damage.

Export markets are also moving towards stricter carbon and traceability benchmarks.

Range of Yarns

Polyester Yarn

The Company offers a fully integrated setup with forward and backward integration, producing a wide range of polyester yarns. It offers a wide variety of products, including:

Partially Oriented Yarn (POY)

Draw Textured Yarn (DTY)

Air-textured Yarn

Fully Drawn Yarn (FDY)

Twisted Yarn

Recycled Yarn

Melange Yarn

Cotton Yarn

The cotton yarn division focuses on fine count combed compact yarns. It produces yarns from cotton carded and combed cotton, supporting weaving and knitting industries including:

Cotton Carded Yarn

Cotton Combed Compact Yarn

Other variants

Yarns for Technical Textiles

This segment includes high-performance yarns designed for demanding applications. These yarns are known for their durability, dimensional stability, and high tenacity. The Key Products are

Low Shrinkage Yarns (HTLS)

High Tenacity Yarns (GHT)

Super Low Shrinkage (HTSLS)

Low Elongation (HTLE)

Sanathan Textiles continues to strengthen its leadership position in the high-performance and specialty yarn segment through a focused range of value-added yarns designed to meet evolving needs of customers and brands. The Company offers innovative products such as :

S-Flex, a self-stretch yarn engineered for flexibility and comfort.

Sanathan Drycool, which delivers moisture-wicking and quick-drying properties ideal for activewear and performance garments.

CDP (Cationic Dyeable Polyester), which enables vibrant colouration and compatibility with disperse and cationic dyes for high-fashion applications.

In line with global sustainability trends, Sanathan Reviro, a recycled polyester yarn, is manufactured using post-consumer PET waste, supporting circular textile solutions.

Additionally, Born Dyed Eco-friendly coloured yarns produced through dope dyeing technology eliminates the need for post-spinning dyeing processes, offering significant water savings and reduced chemical usage.

These differentiated yarns like Sanathan Puro and Sanathan Stretch, not only enhance functionality and aesthetics but also align with global buyers expectations on sustainability, performance, and innovation. With this product suite, Sanathan Textiles is well-positioned to cater to sectors like sportswear, intimate wear, furnishings, and technical textiles, while achieving better margins and customer loyalty.

FINANCIAL PERFORMANCE OVERVIEW

During the financial year ended March 31, 2025, Sanathan Textiles Limited demonstrated resilient financial performance, underscored by stable revenues and improved profitability. Revenue from operations stood at H 2,99,861 lakh, registering a marginal increase of 1% over the previous year. Despite a largely flat topline, the Companys EBITDA grew by 16% to H 26,278 lakh, driven by better operating margins. EBITDA margins improved by 110 basis points to 8.8%, reflecting the Companys continued focus on value-added products and operational discipline. Profit before tax (PBT) grew by 19% to H 21,645 lakh, and Profit After Tax (PAT) stood at H 16,045 lakh, marking a 20% year-on-year growth. PAT margins expanded to 5.4%, and Earnings Per Share (EPS) increased to H 21.3, underscoring improved shareholder value.

The Company also maintained a strong balance sheet, with total assets rising to H 3,52,807 lakh as of March 31, 2025, compared to H 2,20,368 lakh in the previous year. This significant growth was primarily attributable to the ongoing capital expenditure, with capital work-in-progress expanding from H 14,051 lakh to H 1,58,695 lakh, reflecting the Companys strategic investments in enhancing manufacturing capacity. The expansion was largely funded through a mix of internal accruals and long-term borrowings. The strategic investment positions Sanathan Textiles favourably for scalable growth and sustainable value creation in the upcoming years.

Summarised Consolidated Balance Sheet

PARTICULARS	As on 31-3-2025	As on 31-3-2024
Assets
Property, plant & Equipment	93,087	92,647
Capital WIP	1,58,695	14,051
Intangible Assets	149	247
Goodwill	191	191
Other financial Assets	981	1,553
Other non-current Assets (including income-tax assets)	13,970	20,746
Non-Current Assets	2,67,073	129,435
Inventories	37,474	40,549
Investments	-	10,695
Trade Receivables	14,858	12,568
Cash & cash equivalents	3,099	2,993
Other bank balances	10,750	7,169
Other Current Assets (including other financial assets)	19,553	16,959
Current Assets	85,734	90,933
Total Assets	3,52,807	2,20,368
Equity & Liabilities
Share Capital	8,440	7,194
Other Equity	1,72,361	1,20,303
Shareholders Funds	1,80,801	1,27,497
Long Term Borrowings	93,820	33,720
Deferred Tax Liability	8,093	7,753
Other Non-Current Liabilities and Provisions	2,685	863
Non-Current Liabilities	1,04,598	42,336
Short term Borrowings	14,597	4,268
Trade payable	48,827	43,694
Other Financial Liabilities and Provisions	1,823	734
Other Current Liabilities	2,161	1,839
Current Liabilities	67,408	50,535
Total equity & Liabilities	3,52,807	2,20,368

Statement of Profit & Loss

(figures in INR lakhs, unless stated otherwise)

PARTICULARS	FY 2024-25	FY 2023-24	YOY Change (%)
Revenue from operations	2,99,861	2,95,750	1%
Total Expenses	(2,73,583)	(2,73,092)	0
EBITDA (excluding Other Income)	26,278	22,658	16%
EBITDA Margins (%)	8.8%	7.7%	110 bps
Other Income	1,749	2,230	(22)%
Depreciation	(4,586)	(4,439)	3%
Finance cost	(1,796)	(2,308)	(22)%
PBT	21,645	18,141	19%
Tax	(5,600)	(4,756)	(18)%
PAT	16,045	13,385	20%
PAT Margins (%)	5.4%	4.5%	80 bps
Basic EPS (INR)	21.3	18.6	15%

Significant Change of Key Financial Ratios

Key Financial Ratios (Consolidated)

Ratios	2024-25	2023-24	YOY Change (%)
Current ratio	1.27	1.80	(29)%
Debt-equity ratio	0.60	0.30	101%
Debt service coverage ratio	3.29	3.05	8%
Return on equity ratio	10.4%	10.5%	(1)%
Inventory turnover ratio	5.75	5.57	3%
Trade receivable turnover ratio	21.63	21.77	(1)%
Trade payable turnover ratio	4.79	5.53	(13)%
Net capital turnover ratio	16.36	7.32	124%
Net profit ratio	5.4%	4.5%	18%
Return on capital employed	10.6%	15.7%	(32)%
Return on investment	6.1%	8.2%	(25)%

Company Outlook

In the coming years, the Company is anticipated to demonstrate positive growth driven by capacity expansion and strong financial performance. The Company remains focused on timely meeting the consumer demand. Along with this, it will create real value for its customers by ensuring product innovation, reliability, quality, and responsiveness. In addition to this, the upcoming Punjab facility will help the Company to meet the evolving consumer demand in the forthcoming years and helps to go closer to the Customers and become their preferred partner.

Product Research and Development

Sanathan Textiles continues to place strategic emphasis on Research and Development (R&D) as a driver of product innovation, process efficiency, and sustainable differentiation. The Companys Product Innovation and Development team (‘our R&D) efforts are closely aligned with market demands, focusing on the development of high-performance value-added yarns. These initiatives collectively contribute to strengthening the Companys competitive positioning in both domestic and global markets.

Sanathan Textiles views its people as a key enabler of operational efficiency, innovation and long-term growth. In FY2025, the Company focused on building capabilities, improving engagement and strengthening organisational resilience. Talent acquisition was driven by structured campus hiring of Graduate and Diploma Engineer Trainees, lateral recruitment from technical domains, and leveraging industry networks. Sanathan Textiles make-to-order innovation model has been instrumental in attracting professionals with a problem-solving orientation and a drive for customised solutions.

Learning and development remained central to Sanathans people strategy, across employee levels and partner organisations. These initiatives focused on enhancing technical, behavioural, and leadership skills. The Corporate and Compliance Team played a supportive role in knowledge-building efforts. The

Company continued to nurture its internal talent pipeline through a well-defined succession planning framework, enabling internal mobility into key leadership roles such as Site Head, Production Head and Process Control Head. Performance management was reinforced through KPIs aligned with business objectives and the deployment of digital tools for onboarding, attendance, learning and appraisal systems.

Sanathan Textiles maintained its emphasis on employee engagement through initiatives centred on safety, productivity, and effective communication. Diversity and equal opportunity remained core principles across recruitment and appraisal processes. The Company prioritised the well-being of its workforce, implementing welfare programs that included safety training, PPE distribution, regular health check-ups, and access to hygienic facilities. These measures were extended to both permanent and contractual employees, with full adherence to statutory labour requirements. Collectively, these efforts reinforced a culture of accountability, inclusion and high performance across the organisation.

In line with its philosophy of fostering a culture of ownership and long-term value creation, Sanathan Textiles has introduced an Employee Stock Option Plan (ESOP) for employees. The ESOP scheme is designed not merely as a reward mechanism, but as a strategic tool to align employee interests with the Companys sustained growth trajectory. By granting equity-based incentives, Sanathan Textiles aims to instill a strong sense of accountability and belonging among its key talent. This initiative underscores the Companys commitment to recognising and retaining high-performing individuals, while encouraging a stakeholder mindset that supports innovation, collaboration, and performance excellence.

Corporate Social Responsibility

Committed to Good Corporate Citizenship and Inclusive Growth

Aligned with the Companys core value of Good Corporate Citizenship, Sanathan Textiles actively embraces its social responsibilities through structured initiatives aimed at creating a meaningful and lasting impact on society. Guided by the Companys CSR Policy and its defined thematic areas, our interventions are focused on critical domains such as eradicating hunger, promoting healthcare and education, encouraging sports, preserving cultural heritage, and protecting the environment. Each initiative reflects our commitment to sustainable development and social upliftment, particularly in communities surrounding our operational areas.

Enhancing Emergency Response – Contribution of a Fire Tender

Eradicating Hunger – The Annapurna Program

Promoting Healthcare – Support to Masina Hospital

Supporting Education – Infrastructure Enhancement for Schools

Encouraging Sports – Contribution to the Indian Navy

Environmental Sustainability – Plastic-to-Plant Exchange Drive

Risk Management

The Company considers risk management a vital aspect of its operations and has established a comprehensive framework to identify, evaluate and mitigate risks across all functional areas. This framework involves periodic risk assessments, continuous monitoring of key indicators and the formulation of appropriate mitigation strategies. Oversight is provided by a dedicated Risk Management Committee composed of Directors and senior leadership, which routinely reviews relevant policies and advises management on risk-related matters.

Aligned with its sustainability agenda, the Company actively evaluates environmental, social and governance (ESG) risks to promote responsible and sustainable operations. This proactive approach to risk management not only helps minimise potential adverse effects but also strengthens the Companys ability to achieve its strategic objectives.

Internal Control System

The Company has implemented a robust internal control system to ensure the efficiency and effectiveness of operations, accurate financial reporting and compliance with laws and regulations. The Company has established comprehensive policies and procedures for all major business processes, including management, human resources, procurement and inventory management. Regular audits are conducted by internal auditors to monitor compliance with these policies and procedures and to identify areas for improvement. The Company also maintains a system of checks and balances, including the segregation of duties and clear lines of authority and responsibility. Through these measures, the Company aims to minimise the risk of fraud, errors and other financial irregularities, to foster transparency and accountability throughout the organisation.

Cautionary Statement

This report on Management Discussion and Analysis includes forward-looking statements, which are predictions, expectations, projections, or estimates about the Companys objectives. These statements are based on certain assumptions and expectations of future events. However, actual results may differ from these statements due to various factors such as changes in government regulations, tax laws and other statutes. Additionally, unforeseen events such as force majeure could affect the actual result. It is important for readers to understand the context in which these statements are made and that they may not reflect future outcomes accurately.