Suryalata Spinning Mills Ltd Management Discussions

Corporate Information

Suryalata Spinning Mills Limited (the Company) is a public limited company Incorporated on 23rd May, 1983, having its Registered office situated at 105, S P Road. Surya Towers, 1st Floor, Secunderabad, Telangana State. The company established to manufacture Synthetic Blended Yarns, Products are proven and established a credible position in the market. These Yarns are designed to deliver uniform quality, durability and process efficiency across weaving and finishing stages, making well suited to have mass manufacturing. The company is listed on the Bombay Stock Exchange.

Organization Overview

The company is engaged in producing the best quality Synthetic Blended Yams and it is one of the largest producers of Ring Spun Yarns i.e 100% PSF Ring Spin Yams, 100% PSF-Vortex Yams, P/V blended yarns and value-added Yams like Slub yarns, Elite Twist, Salro Yarns, Compact Yarns and TFO (two for one twister) Yarns etc., counts ranging from 10s to 60s The company is having two manufacturing units at Kalwakurthy and Urukondapet, on Kalwakurthy - (adcherla Road in Nagerkurnool District, Telangana, only an hour away from the Hyderabad International Airport and the distance between the two units is 5 Kms. The Company is having total installed capacity of 1,19,280 spindles and 16 Nos Vortex Spin machines. Altogether produces the quantity about 90 MTs per day. The units are maintaining standard operational system and certification of ISO 9001:2015. The company sells its finished goods (Yarn) to various dealers located in the Indian domestic market as well as in the International market.

Globa] Economic Review

The global economy environment is challenging with geopolitical uncertainties and continued to face inflationary pressures, fragmented trade relationships and subdued consumer demand during the financial year 2025-26. Growth in advanced economies remained subdued, moderating from 1.8% to 1.7%, reflecting tighter financial conditions and weaker demand. The Ongoing geopolitical tensions in West Asia, have contributed to volatility and Increase of energy prices, resulted to the inflation in consumer markets. In contrast, emerging economies continued to drive global growth, expanding by 4.4% in 2025, supported by strong domestic demand, Increasing infrastructure investments, and improving manufacturing activity. Overall, the global outlook remains uncertain due to geopolitical developments which continue to pose risks to sustained economic growth.

Globa] Textile Industry:

The global textile industry is a multi-trillion-dollar manufacturing sector projected to reach over USD I Trillion by the early 2030s, accounting for approximately 2% of the worlds GDP. Asia remains the dominant manufacturing hub, led by China (which produces over 50% of global output), India, and emerging hubs in Vietnam and Bangladesh

The global textile market is anticipated to grow on three major principles: designing, producing, and distributing different flexible materials such as yarn and clothing. Many processes, such as knitting, crocheting, weaving, and others, are primarily used to manufacture a wide range of finished and semi-finished goods in bedding, clothing, apparel, medical, and other accessories.

However, geopolitical risks remain high, particularly in light of the conflict in the Middle East and tensions in Europe, trade tariffs imposed by the USA on various products and on various countries including India, are undermining the global growth outlook.

Indian economic review:

Indias economy continued to demonstrate resilience amid continuing the West Asia conflicts, global macroeconomic challenges, inflationary and Inconsistency in the global markets Despite back of strong domestic demand, the country has maintained relative economic stability in 2025-26 and maintained growth at 6.8%, supported by across manufacturing, services, and infrastructure sectors. The Reforms undertaken over the last ten years by the Union government have formed the foundation of a resilient, partnership-based governance ecosystem and have restored the ability of the economy to grow healthily. With the policy reforms that the government has already rolled out and which are on the anvil, there is significant optimism and confidence in the Indian economy and its prospects today. India embarks on her AmrltKaal with confidence and the attitude that challenges to growth and Inclusive development is stepping stones. Going forward, continued investments, rapid digitalization, and a favourable demographic profile are expected to further strengthen Indias growth outlook

Indian Textile Industry:

India is the worlds second-largest producer of textiles The Indian textile and apparel market, valued at USD 248.70 billion In 2025, is expected to reach USD 656.31 billion by 2034, reflecting a compound annual growth rate of I 1.38% between 2026 and 2034. As one of the cornerstones of Indias economic development, the sector integrates traditional craftsmanship with modern manufacturing, catering to both domestic consumption and international exports. Beyond its economic contribution, the industry plays a vital social role by generating rural employment, encouraging womens participation in garment manufacturing, and preserving regional textile traditions that form an essential part of Indias cultural identity while adapting to evolving consumer preferences.

Functioning as a powerful economic engine, the textile and apparel industry employs millions across the value chain, from cotton farmers to garment workers, while contributing significantly to foreign exchange earnings through exports. The sector maintains a unique balance between heritage and modernity, serving diverse market segments ranging from commodity fabrics to premium

Fashion textiles. Regional clusters have developed specialized strengths-Maharashtra in integrated mill production, Gujarat in synthetic textiles, Tamil Nadu in cotton spinning, and Uttar Pradesh in handloom traditions. This diversity is exemplified by Varanasis artisans producing intricate Banarasi silk saris on traditional pit looms, alongside Surats industrial-scale power loom facilities manufacturing synthetic fabrics for global fast- Fashlon retailers.

Indias textile and apparel sector is poised for sustained expansion, driven by rising domestic consumption, enhanced manufacturing capacity, improved export competitiveness, and diversification into higher-value product segments. The demographic advantage of a young population, rapid urbanization, and the growth of digital commerce platforms are strengthening demand fundamentals across categories. Strategic investments in advanced spinning and weaving technologies, adoption of sustainable production practices to address environmental concerns, and the development oF Innovative design capabilities will further elevate the industrys global positioning, ensuring long-term growth and resilience.

Government Initiatives For Textile Industry:

The Government announced the continuity of Rebate on PM MITRA Park: Transforming Indias textile landscape: The PM MITRA Park initiative is a flagship program aimed at modernizing Indias textile sector through world-class infrastructure and integrated value chains. In Tamil Nadu, a 11,894 crore (US$ 216.09 million) investment has been approved for a 1,052-acre park in Vlrudhunagar, focused on technical textiles and processing, expected to attract 10.000 crore (US$ 1.14 billion) and create one lakh jobs by 2027. Similarly, Madhya Pradesh is developing a 2,100 crore (US$ 239.59 million) park in Dhar, spanning 2,100 acres, supported by an Moll with the Brand fk Sourcing Leaders Association. The state has already secured 3,500 crores (US$ 399.32 million) in Investments and Is promoting organic cotton under Indias Five F Vision. Together, these projects form part of the broader PM MITRA Parks Scheme, which envisions seven mega textile parks nationwide with 4,445 crores (US$ 541.82 million) in government support, expected to draw 85,370 crores (US$ 10 billion) In private Investments and elevate India as a global textile hub.

Revival oF khadi by KVIC: The Khadi and Village Industries Commission (KVIC) recorded a historic turnover oF US$ 20 billion in 2025-26, signaling a strong revival of Khadi. To support artisans, a 20% wage hike for spinners was announced effective April 2025. Rising demand, job creation, and design innovations are reshaping Khadi into a sustainable fashion choice, particularly appealing to younger generations and strengthening its role in Indias textile heritage

Samarth scheme extension: The Samarth Scheme, extended for FY25 and FY26 with a budget of 495 crores (US$ 56.6 million), aims to train three lakh people In textile-related skills. As of July 2025, over 4.57 lakh beneficiaries had been trained, with 3.55 lakh successfully placed, including 88% women. The scheme is demand- driven, placement-focused, and covers the textile value chain (excluding spinning and weaving), thereby enhancing productivity and supporting job creation across the sector.

Government e-Marketplace (GeM) Initiative: By March 2027 about 1.50 lakh handloom agencies/weavers and 26,644 artisans, had registered on the Government e-Marketplace (GeM) portal. This digital initiative has expanded market access for traditional artisans, enabling them to connect directly with buyers and strengthen their economic opportunities through transparent and efficient online transactions.

National technical textiles mission: The National Technical Textiles Mission, launched In FY2I and extended until FY26 with a financial outlay of 1.480 crores aims to achieve 86.680 crores In technical textile exports. Indias current exports range between 17,336 crore and 26,004 crores and the mission Is expected to significantly boost competitiveness in this high-value segment.

India solar energy sector review

The Government announced the continuity of Rebate on Indias energy demand is projected to rise faster than any other country in the coming decades, driven by Its vast population and strong economic growth potential. Meeting this surge sustainably requires a significant share of additional demand to be met through low-carbon, renewable sources. India has pledged to achieve net-zero emissions by 2070 and ensure that 50% of its electricity generation comes from renewables by 2030, marking a landmark global climate commitment. India solar energy market was valued at USD 8 billion in 2025 and is expected to reach USD 14 billion by 2030.

Government Initiates for Solar

2. PM Surya Ghar: Muft Bijli Yojana (PMSGMBY) has become the world s largest domestic rooftop solar initiative, achieving a milestone of 26 lakh solar-powered homes by March 2026, the scheme is making solar energy widely accessible.

3. Affordable financing and col lateral-free loans at a subsidized 6.75% interest rate through 12 Public Sector Banks, ensuring financial inclusion and ease of access to Investments.

I. Empowering citizens and sustainability: With a

seamless 15-day subsidy transfer and zero electricity bills for many households, the scheme Is not only powering homes but also empowering people.

Expansion in core activity of Spinning :

The company had installed proven technology of Vortex Spin equipments and the Yarn produced with this technology are proved its quality in the forward segments. The company able to liquidates the entire produced quantities. It is confident to establish further volumes for these Vortex yams by expand its capacities. The company had installed 16 Nos oF Vortex Spin Machineries, equivalent to 24000 Ring Spindles. Considering the cost economics and constraints of manpower availabilities, the company is in the process of Increase Vortex Spin capacities by replace the Ring frames In phased manner.

Opportunities & Threats of Company:

Suryalata holding on hand opportunities to strengthen its position with -

(a) Availability oFadvanced technology equipment.

(b) Experienced management team.

(c) Emphasis on Quality Products

(d) Timely deliveries to Customers.

(e) Long standing Customer Relations

(f) Simple and Strategic market potentiality.

(g) Rich resources of raw materials like PSF.VSF, Silk and Cotton.

The Company estimates the Threats to Synthetic industry such as

a) Significant changes in raw cotton prices effects to Synthetic Fiber prices .

kj Losgistic costs are adversely aFFecting its ability to compete in exports.

c) High power costs and High interest costs are burdened for this Thin margin industry.

d) Long export lead times are eroding Indias export competitiveness across the textile chain.

d) Currency fluctuations are highly aFFecting the synthetic spinning industry.

e) Profitability undermined with inflation and causing to raise wages

f) Fierce competition stressed by e-commerce activities

g) Changing consumer behavior (e.g. fast fashion).

Risks and Concerns:

Risks are integral partofthe growth of a business. However, the Company frames the effective risk management which helps to mitigate the risks effectively and ensures business sustainability.

Effective risk management comprises the,

i) Standard policy to pass the cost increases with its premium quality.

ii) Consciously up-keep of equipment and implementing the cost control methods,

iii) Strengthen and widen the customer base with timely supplies.

iv) Change into high count patterns which support high contributions

Future Outlook of the Company Products:

Synthetic Yam Products are expected to grow at significant rate over the coming years. The growth can be attributed to its beneficial properties such as high strength, chemical & wrinkle resistance, quick drying etc., are towards personal care and hygiene applications. It is also used in households as cushioning 8. insulating material in pillows and in industries for making carpets, Tyres, air filters, coated fabrics and other products.

Also the Fashion segment dominated the market owing to the increasing consumerspending on clothi ng and appareI. In addition, high consumer requirements for crease-free suiting 8. shirting fabrics and quality dyed 8. printed Fabrics are likely to drive and to increase the demand For Synthetic products.

Considering all these present applications and forecasting the future requirement of Synthetic Yam Products, the company focused on technically proved Vortex Yarns to have new product in the basket, increase the volumes, improve the margins and to strengthen the financial position.

Internal Control Systems and their Adequacy:

The Company has a well-established Framework of internal controls in all areas of its operations, including suitable monitoring procedures and competent personnel. In addition to statutory audit, the financial controls of the Company at various locations are reviewed by the Internal Auditors, who report their findings to the Audit Com mittee of the Board. The Audit Committee is headed by an Independent Director and this ensures independence of functions and transparency of the process of supervision. The Committee meets to review the progress of the internal audit initiatives, significant audit observations and planning and implementation of follow-up action required. The Company conducts its business with integrity and high standard of ethical behavior and in compliance with the laws and regulations that govern its business.

Human Resource Developments / Industrial Relations:

The Company firmly believes that Human Resource Development strategies and practices will continue to provide a sustained competitive advantage and will continuously work towards nurturing and enhancing a competitively superior position in terms of human capital, people processes and employees behaviour.

There were no material developments in the Human resources. The industrial relations were generally found satisfactory.

During the period under review, the total number of people employed by the Company is 449 in addition to indirect employment created.

Corporate Social Responsibility :

The company formulated CSR policy to touch and transform peoples lives by promoting health care, education including special education among children and employment opportunities for women, providing alnutrition, sanitation and drinking water, animal welfare etc,.

During the year Suryalata has continued to educate Vedic students thru Vedic Pathasala, in the form of contributions to provide Food fk Sanitization for Old Age people to enhance their health in the society.

Cautionary Statement: The statement and views expressed by the management in the above said report are on the basis of best judgment but the actual results might differ From whatever stated in the report. The Company takes no responsibility for any consequence of decisions made based on such statements and holds no obligation to update these in future. Readers are cautioned not to place undue reliance on these forward-looking statements.

Review of Financial &. Operational performance:

The Standalone performance of the company Turnover of Rs. 491.06 crores and slight decreased compared to previous year despite resilience, uncertainty, trade friction in the fragmented world economy.

Your Company has earned a Consolidated Profit Before Tax Rs. 46.05 crore in comparison to Rs. 18.90 crore in the previous year due to price stress in the sluggish market and subdued market conditions. Consolidated Profit after tax is Rs.35.52 crores as against Rs. 15.37crore in the previous year.

Key Financial Ratios:

Debtors / Turnover	Current year - 21.95 times (previous year - 21.00 times)	Marginal increase due to drop of sales In March 2026
inventory/ Turnover	Current year - 16.50 times (previous year - 19.37 times)	Dropped due to increase of inventory in March 2026
interest Coverage Ratio	Current year - 14.03 times (previous year - 4 .86times)	increased with an increase in profit margin on receipt of industrial Incentives.
Debt / Equity Ratio	Current year -0.31% (previous year -0.28%)	increased due to New Term Loan borrowings for project
Operating Profit Margin (PBT)	Current year - 6.23% (previous year- 2.71%)	Increased with an Increase in profit margin
Net Profit Margin (PAT)	Current year - 6.13 % (previous year -2.02%	Increased with an Increase in profit margin
Return on Net Worth (equity)	Current year - 10-44 % (previous year - 3.95%)	Increased with an increase in profit margin