SPL Industries Ltd Management Discussions

The Board of Directors is pleased to share with you the Management Discussion and Analysis Report for the Financial Year ended on March 31, 2025.

COMPANY SYNOPSIS

SPL has a leading Apparel Export House and has one of the largest vertically integrated knitwear plants in India, leading manufacturer & exporter of Knitted fabric and Knitted garments. SPL offers innovative designs that incorporate the latest trends and employs only high-quality fabrics to build trust with stakeholders and attract a strong clientele. The company is reputed for excellent Product Development and Design Capability. The Company strives to cater its products to both domestic and international markets, aligning with its objective of becoming a leading global manufacturer. It is committed to being a resilient organization with a clear vision, focusing on strengthening its core and emerging stronger.

Factors Fuelling the Companys Growth Abundant Raw Material Availability

India continues to be the worlds largest cotton producer55, which enables Trident to source quality raw materials domestically, ensuring cost- efficiency and supply stability.

Favourable Macroeconomic Conditions

Indias GDP grew at 6.5% in FY 2024-2025; this economic expansion supports rising domestic consumption and infrastructure-driven demand across core segments.

Government Support

Initiatives such as the PLI scheme (which saw its allocation increase by 89% to INR 16,092 Crore for FY 2024-25 according to the Union Budget 2025-26) and the National Manufacturing Mission are creating a conducive environment for growth in textiles.

Growing Export Opportunities

Indias trade agreements and enhanced competitiveness have opened access to new markets, allowing SPL to diversify geographically, particularly in textiles.

Annual Financial Performance

SPL has leveraged its strengths, team cohesion, and talented workforce to deliver high-quality products and consolidate its position as a responsible organization. Despite the unprecedented challenges faced by the Indian economy.

During the year under review, the Company has operated in single segment i.e. Garment and marked total income of Rs. 15,319.61 Lakhs and achieved a standalone net profit of Rs. 979.15 Lakhs as compared to Rs. 1175.11 Lakhs in previous financial year. Tire earnings per share of the Company was INR 3.38 in the year under review.

In FY 2024-25, the Company has not declared any dividend on the equity share of the company.

Balance Sheet Paid-up Capital

The total equity share capital remained unchanged at INR 2900.00 Lakhs as of March 31, 2025 (the same as March 31, 2024).

Net Worth

Tire net worth of the Company increased to INR 20,894.80 Lakhs (as of March 31, 2025), compared to INR 19,917.38 Lakhs (as of March 31, 2024).

Key Financial Ratios and Other Parameters

Detailed Explanation of Significant Changes-As per Notes on ratio (Note No. 54(iii))

1. Debt includes long-term Provisions and Other long- term debt.

2. Includes Net Profit after taxes, Depreciation & Amortization and Finance cost.

3. Debt Service Includes Interest on USL.

4. Revenue includes credit sales only.

5. Includes tangible net worth, total debt and deferred tax liability.

6. Reflects Cost of Investment as on Closing of Financial Year Opportunities:

• Global Shift towards Sustainable Textiles: Increasing demand for eco-friendly and ethically produced products aligns with SPLs sustainability agenda.

• Expansion into New Geographies: Growing opportunities in emerging markets for textiles.

• Government Incentives: Benefitting from Production Linked Incentive (PLI) schemes and textile parks under Make in India.

• Innovation in Functional Textiles and Speciality Paper: Scope to develop antimicrobial, organic, and smart fabrics, and expand value- added paper offerings.

• Green Energy Integration: Strengthening energy division with renewable projects enhances long-term cost savings and ESG positioning. Threats:

• Global Market Volatility: Economic slowdowns, geopolitical tensions, and trade barriers can impact exports and input costs.

• Intense Industry Competition: Price and quality pressures from global players, especially in textiles and paper.

• Raw Material Price Fluctuations: Cotton, pulp, and chemicals are subject to price volatility, affecting margins.

• Regulatory and Environmental Compliance Risks: Stricter norms, particularly in water-intensive sectors, can lead to cost and operational pressures.

• Currency Fluctuations: Affects export competitiveness and profitability.

Global economic overview

In 2024, global GDP grew by approximately 3.3%, marginally above the 3.1% recorded in 2023. lThis expansion was driven by resilient economic activity in the United States, where real GDP rose by 2.8%. In contrast, the Eurozone experienced modest growth of 0.8%, constrained by weak performance of the manufacturing sector and elevated energy costs.2 In China, growth slowed to 4.8% owing to a prolonged property- sector downturn and softer domestic demand.3

Global inflation averaged 5.9% in 2024, with food and energy price pressures easing gradually.4

Manufacturing activity remained close to stagnation throughout 2024. Although intermittent upswings suggested the broader economy was still growing at around an annualised rate of 3.0%, factory output remained under pressure due to lesser new orders and supply chain disruptions.5

Commodity prices remained relatively muted in 2024. The World Banks commodity price index fell by roughly 3% in Q1 FY 2024, led by a 3% decline in energy prices on account of lower natural gas and crude oil prices, while metals and agricultural prices showed only minor changes. Meanwhile, global cotton prices decreased by nearly 9%, from 95 cents per pound in 2023 to 86.6 cents in 2024, benefitting textile manufacturers with reduced input costs and supporting downstream production.

1IMF

2Bureau of Economic Analysis 3The Associated Press 4IMF

5S&P Global Indian Economy

Indias economy remained remarkably resilient in the face of global disruptions. Strong domestic consumption, higher government spending on infrastructure and an accommodative monetary policy powered this growth. Retail inflation eased to 4.6% in FY 2024-25, the lowest since

FY 2018-19. This led the Reserve Bank of India (RBI) to implement its first rate cut in five years to 6%, thereby supporting continued growth.10

The financial services sector remained stable, supported by well-capitalised banks and a solid regulatory framework. Government initiatives, such as Make in India spurred domestic manufacturing growth, while long-term prospects in manufacturing and technology attracted strong foreign investment. The expansion of Indias digital economy, including e-commerce and digital payments, further boosted economic activity.

Imported commodity prices in India eased in FY 2024-25, with the World Banks Commodity Markets Outlook projecting a 5.1 % decline in 2025 driven largely by falling crude oil and metals prices, which kept domestic inflationary pressures anchored. Cotton prices in India averaged around INR 7,800 per quintal in FY 2024-25, supported by lower production and an INR 589 MSP increase in May 2025 that set prices at INR 7,710-8,110 per quintal.il

Indias manufacturing sector grew at 4.8% in FY 2024-25, up from 4.7% in FY 2023-24. This contributed to 7.4% GDP growth in the fourth quarter of FY 2024-25.12 Tire government increased budget allocations to support manufacturing, with FDI in the sector reaching USD 184 Billion·a 90.5% rise over the past decade ·fuelled by production-linked incentive schemes.13 Over the past six financial years, total FDI inflows amounted to USD 464.54 Billion.14 With robust physical and digital infrastructure, India is now well-positioned to expand the share of the manufacturing sector in the economy and strengthen its role in global supply chains.

Outlook

The prospects for the Indian economy remain promising. A growing population, the governments continued thrust on infrastructure and a decade of digital transformation position Indias GDP for accelerated growth in the coming years.

Despite global tariff pressures and geopolitical tensions, the RBI projects a strong GDP growth rate of 6.5% for FY 2025-26.15 Moreover, retail inflation is expected to hover around 4.0% in FY 2025-26, providing scope for further monetary accommodation if needed.16

India has strong potential to grow its presence in global markets, supported by economic growth, longterm employment prospects and skill development opportunities for millions. To tap into this potential, the Government of India has announced the National Manufacturing Mission in the Union Budget 2025-26, which aims to boost Make in India through supportive policies, ease of doing business, MSME growth, a future-ready workforce and clean-tech manufacturing. In Budget 2025-26, PLI allocations were further enhanced for key sectors, with electronics and IT hardware rising from INR 5,777 Crore to INR 9,000 Crore; automobiles and auto components from INR 346.87 Crore to INR 2,818.85 Crore; and the textile sectors PLI allocation surging from INR 45 Crore to INR 1,148 Crore.17

The country is steadily advancing towards Industry 4.0, adopting best-in-class technologies in manufacturing. This is further supported by government initiatives such as the National Manufacturing Mission, which aims to raise the manufacturing sectors contribution to GDP to 25% by 2025.

Source: S&P Global

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