Super Sales India Ltd Management Discussions

REPORT ECONOMY OVERVIEW:

Growth in 2024 and outlook for 2025

Global economic growth is estimated at 3.3 percent in 2024, up slightly from 3.2 percent in 2023, signalling a period of relative stability following prolonged economic challenges. Inflation has begun to ease from multidecade highs and is gradually aligning with central bank targets. Labour markets have largely normalized, with unemployment and vacancy rates returning to pre-pandemic levels despite ongoing geopolitical tensions.

However, global growth is projected to slow to 2.8 percent in 2025 before rebounding modestly to 3.0 percent in 2026. This anticipated slowdown reflects a broad-based downgrade across countries, primarily driven by the direct and indirect effects of new trade restrictions. The impact of tariffs will vary across economies based on their trade relationships, industry structures, policy responses and capacity for trade diversification.

Advanced Economies

Growth of the Advance economies in 2024 estimated at 1.8 percent with the growth of United States at 2.8 percent, Euro area at 0.9 percent, Japan at 0.1 percent and other advance economies at 2.2 percent. Growth in this group is expected to decline to 1.4 percent in 2025 and edge up slightly to 1.5 percent in 2026.

In the United States, growth is forecasted to decelerate to 1.8 percent in 2025, nearly one percentage point below 2024, due to increased policy uncertainty, trade tensions and weaker consumer demand. Growth in 2026 is expected to soften further to 1.7 percent amid subdued private consumption and lingering tariff effects.

The Euro Area is projected to see a slight dip in growth to 0.8 percent in 2025, before improving to 1.2 percent in 2026. Tariffs and rising uncertainty will weigh on the 2025 outlook, while a recovery in real wages and fiscal easing are expected to support a modest rebound in 2026.

Emerging and Developing Economies

Estimated Growth of Emerging and developing economies in 2024 at 4.3 percent with Emerging & developing Asia at 5.3 percent, with China at 5.0 percent, India at 6.5 percent, Emerging & Developing Europe at 3.4 percent. It is projected that growth under the reference may drop to 3.7 percent in 2025 and 3.9 percent in 2026. This reflects the impact of recently implemented tariffs, which offset the stronger carryover from 2024 and fiscal expansion in the budget in various countries.

Indias Economic Outlook

The Indian economy is estimated to achieve a growth of 6.5 percent in FY25 despite considerable external headwinds and marking its slowest expansion since the pandemic. This was accompanied by a pick-up in growth from 5.6 percent in Q2 FY25 to 6.2 percent in Q3 FY25. This performance was driven by strong agricultural and service sector performance on the supply side and a steady increase in consumption, core merchandise & services exports on the demand side. All sectors are estimated to grow close to their trend rates The International Monetary Fund, in its earlier report has stated that Indias prudent macroeconomic policies and reform-driven approach have positioned it as the fastest-growing major economy and projected a GDP growth of 6.2 percent for FY 2025 and 6.3 percent for FY 2026, revising down from 6.5 percent for FY 2024.

Retail inflation in India eased to 3.34 percent in March 2025, the lowest since September 2019, largely due to falling food prices, driven by seasonal corrections, lower pulse prices and proactive government measures. In response, the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points to 6.25 percent in February 2025, its first cut in nearly five years. A further 25-basis-point cut to 6.0 percent in April which may expected to encourage borrowing and spending, especially in real estate and consumer goods, thereby boosting economic activity.

The Union Government continues to strike a balance between fiscal consolidation, welfare and growth. The 2025-26 Union Budget outlined a cautious yet forward-looking fiscal consolidation path, emphasizing agriculture, MSMEs, investment and exports as key growth engines. These initiatives are expected to enhance economic resilience in the face of global uncertainties.

Geopolitical tensions, trade policy volatility, particularly recent U.S. tariff hikes, and fluctuating commodity prices have heightened global uncertainty. These factors have led some analysts to trim growth forecasts, despite a decline in commodity prices.

Domestically, private sector capital formation and Indias strong macroeconomic fundamentals will be key drivers of growth in FY2026. Supportive fiscal policies, a continued accommodative monetary stance, and structural reforms outlined in the Union Budget are expected to reinforce Indias economic resilience amid a challenging global environment.

SEGMENT WISE PERFORMANCE:

Agency Division

The prolonged slowdown in the textile market over the past years has led mills to delay capital investments in expansion and modernization, resulting in a decline in revenue for the Agency Division.

The Division has earned a revenue of Rs. 1745.73 Lakhs as against Rs. 3242.77 Lakhs and PBT of Rs. 787.61 Lakhs as against Rs. 2048.84 Lakhs.

Textile Division

The textile division has achieved higher turnover compared to the previous year, thanks to the adoption of enhanced manufacturing processes, greater efficiency, utilization of modern machinery and an optimized product mix. This performance was achieved despite challenges faced by the spinning segment, such as fabric and yarn imports, volatility in yarn prices and the availability of quality cotton in the new season.

The Division has earned a revenue of Rs. 33257.19 Lakhs as against Rs. 30422.45 Lakhs in the previous year.

The Division has earned a profit of Rs.126.39 Lakhs as against Rs. 4.02 Lakhs in the previous year. Engineering Division

The engineering divisions performance has been significantly impacted by lower off-take from OEMs due to the underperformance of the textile segment, as well as reluctance from customers in other segments to lift products, despite an improved order book in the last quarter.

The Division has earned a revenue of Rs. 6061.74 Lakhs as against Rs. 9099.45 Lakhs in the previous year. The Division has incurred a loss of Rs. 157.25 Lakhs as against a profit of Rs. 1348.89 in the previous year. EXPORTS

The Companys ongoing efforts to drive higher turnover through consistent product quality and timely delivery have led to a significant increase in export turnover for the textile division, despite challenges posed by geopolitical issues, reduced purchasing power due to high interest rates and inflation.

Your company has exported yarn of Rs. 6942.93 Lakhs (out of which Rs. 3401.84 Lakhs were for merchant Exports) and Gears Division exports for the year under review was Rs. 140.71 Lakhs.

PROSPECTS

With various government initiatives and schemes supporting the textile sector, increased modernization and automation by customers in this area are expected to drive higher demand for textile machinery, thereby enhancing the performance of the Agency Division.

The recent changes in U.S. tariffs concerning India, assuming continued cordial trade relations, are favourable, as Indian textile products now benefit from lower tariff rates compared to other countries, This is likely to boost the demand for textile yarn. Additionally, the availability of adequate domestic cotton gives the Textile Division a competitive advantage, potentially leading to improved performance.

New product developments in the pipeline for the next-generation gear segment are expected to contribute positively to the performance of the Gears Division. Infrastructure development is the key requirement of our country and Engineering industries in particular drives will play a major role.

OPPORTUNITIES AND THREATS:

Opportunities:

1. Sign of robust demand for textile and apparel segment.

2. Availability of input material.

3. New avenues for Gear and Gear Boxes in medium and Heavy-duty segment.

4 Augmentation of renewable Energy.

Threats:

1. Availability of skilled labour.

2. Continuous increase in power cost.

3. Lower demand for yarn and volatility in selling prices.

4 Incentives provided by other state Governments affects locational advantage.

5. Unstable global trade policy environment.

6. Cybersecurity threat.

RISK AND CONCERN:

Consistency in availability of quality cotton, impact of import of fabric and yarn, export of cotton, incentives offered by other states, extension of the benefit of least developing country to Bangladesh are cause of concern for the demand and margin.

INTERNAL CONTROL SYSTEM AND ADEQUACY:

The Company has an adequate internal control system commensurate with its size and nature of its business. Management has overall responsibility for the Companys internal control system to safeguard the assets and to ensure reliability of financial records.

The Company has a detailed budgetary control system and the actual performance is reviewed periodically and decision taken accordingly.

Internal audit programme covers all areas of activities and periodical reports are submitted to the Management. Audit Committee reviews all financial statements and ensures adequacy of internal control systems. The Company has a well-defined organization structure, authority levels and internal rules and guidelines for conducting business transactions.

FINANCIAL PERFORMANCE AND ANALYSIS:

(Rs. in Lakhs]

HUMAN RESOURCES:

The Companys HR objectives aim to develop and train each individual to perform to his/her fullest capacity, achieving individual excellence and Companys Goals. The shortage of man power in the Textile division has become a severe problem and efforts have been taken to mitigate the same. The number of permanent people employed was 1281.

CAUTION:

Statements in the management discussion and analysis describing the Companys objectives, projections, estimates and expectations may be considered as "forward looking statements" within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. The factors that might influence the operations of the Company are demand-supply conditions, finished goods prices, raw material costs & availability, change in the government regulations, WTO and natural calamities over which the Company has no control.

The Company assumes no responsibility in respect of the forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.

Significant changes in the key financial ratios along with explanations: (Changes in more than 25% compared to previous year)

Explanations: (Changes in more than 25% compared to previous year)

Interest coverage ratio has reduced from 7.23% to 3.72% due to loss in the current financial year.

Operating margin has reduced from 12.32% to 7.71% due to loss in the current financial year.

Net profit margin has reduced from 4.74% to (0.44%) due to loss in the current financial year.

Details of any change in return on net worth as compared to immediate previous financial year along with detailed explanation thereof.

Return on Net worth has come down from 3.56% to (0.31) % due to loss in the current year and higher net worth.