Suryavanshi Spinning Mills Ltd Management Discussions

Annexure - V

1. INDUSTRY STRUCTURE, DEVELOPMENT AND PRODUCT WISE PERFORMANCE

Company is in the business of manufacturing of Polyester, polyester-viscose Blended Yarns and other Textiles & Medical Textiles Products at Aliabad, Shameerpet Mandal, Ranga Reddy District, in the state of Telangana catering to both domestic and the export markets.

The textiles and apparel industry contributes approximately 2 % of Indias GDP and about 11 % of manufacturing GVA (Gross Value Added) as of February 2026. The textile industry in India is predicted to double its contribution to the GDP to approximately 5 % by the end of this decade. Global fibre demand is expected to reach around 149 million tonnes in 2030, with increasing population and growth in per-capita consumption.

The Indian cotton yarn market is experiencing a robust growth trajectory driven by sustainability reflecting a growing consumer preference for eco-friendly textiles and technological advancements. India remains the largest exporter of cotton yarn, while the fastest-growing segment is organic cotton yarn, driven by rising environmental awareness. The Indian cotton yarn market is projected to grow at 7.49 % CAGR from 2025 to 2035, driven by rising demand in textile applications, technological advancements, and sustainable practices Demand for Indian cotton yarn has picked up from Countries such as China, Bangladesh and Vietnam, among others, following the disruption in global logistics after the breakout of war in West Asia. In the last few years, rising cotton prices - both domestic and international have led to a narrowing spread between yarn and fibre prices. This has severely compressed gross margins, leaving Indian spinning mills with little buffer to sustain profitability.

The Indian textile sector had a tough fiscal year in FY2025-2026. It saw steep US tariffs, and then the end of the period witnessed Middle East supply chain disruptions. Yet, Indias Textile and garment exporters collectively shrugged off the pressure and grew with immense potential for resurgence through innovation, strategic adaptation, and a commitment to sustainability. By embracing cost-effective sourcing, focusing on niche markets, leveraging technology, and prioritizing responsible practices, businesses can navigate the current landscape and secure a brighter future. Companies that prioritize cost control, supply chain resilience and product upgrading will be better positioned to withstand uncertainty and emerge stronger as condition stabilise. The Indian textile industrys future hinges on a collective effort from businesses, government agencies, and consumers. By acknowledging the challenges, embracing innovation, and prioritizing sustainability, the industry can navigate the current hurdles and emerge stronger, fostering economic growth and shaping a future of responsible and thriving textile production.

India has established itself as a major global textile hub, ranking among the leading producers and exporters of textiles and apparel. The country continues to maintain a strong presence across global markets, with exports reaching 3,16,334.9 Crore in FY26, registering a growth of 2.1 %, despite challenging global demand conditions. Ready-made garments remained the largest export segment, while man-made fibre (MMF) products recorded relatively stronger growth compared to cotton-based categories, reflecting a gradual shift in global demand patterns.

The Indian textile market reached US$ 152.40 Billion in 2025 and is projected to reach US$ 213.75 Billion by 2034, growing at a CAGR of 3.83 % during 2026-2034, driven by rising consumption, product diversification and technological advancements. Growth is further supported by increasing urbanisation, rising disposable incomes, the expansion of organised retail, and demand for value-added and sustainable textile products.

• China Plus One and Supply Chain Diversification- Global companies are increasingly diversifying sourcing away from China, creating opportunities for Raymond to expand its export footprint and strengthen its position in global supply chains.

• Expansion into Technology-Intensive and Advanced Components - Increasing demand for complex engineering solutions, advanced assemblies and precision-engineered components provides opportunities to enhance value addition, deepen customer integration and improve profitability.

• Policy Support: Government initiatives, such as PM MITRA Parks, facilitate the development of integrated textile ecosystems, scale efficiencies, and generate investment inflows and employment.

• Geopolitical and Supply Chain Risks- Ongoing geopolitical conflicts, trade disruptions and logistics bottlenecks may impact raw material availability, exports and operational efficiency across global markets.

• Intensifying Global Competition- The engineering and aerospace sectors remain highly competitive, with global players continuously investing in technology, innovation and cost efficiencies.

• Regulatory and Compliance Challenges- Aerospace and defence businesses are subject to stringent certifications, quality standards and regulatory approvals, which may lead to operational or project execution risks if not managed effectively.

The Company has identified key risks such as Technology obsolescence, Market/Industry Risks, Logistics Risks, Political environmental risks, Disaster risks, Financial Risks, Labour Shortage and Foreign Exchange Rate Risks. Key Risks include fluctuation in raw materials prices, increased global and local competition, sales channel disruption. Retaining the existing talent pool and attracting new talent.

Reduced purchasing power and increased demand could result in significant shifts in consumer behaviour, negatively impacting the textile and apparel market. Consumers might seek more budget-friendly options, potentially leading to reduced growth and profitability for the Company.

The global and Indian economic outlook remains cautiously positive despite ongoing geopolitical uncertainties, trade realignments and volatility in energy and commodity markets. Global GDP growth is projected to moderate to 3.1 % in CY2026 before improving marginally to 3.2 % in 2027, while inflation is expected to remain elevated in the near term before gradually easing. In India, real GDP growth for FY2026-27 is projected at 6.6 %, supported by strong domestic demand, infrastructure spending, rising manufacturing investments and increasing focus on localisation and supply chain diversification. Continued government emphasis on scaling up domestic manufacturing across strategic and frontier sectors, along with healthy financial conditions, improving industrial activity and resilient services growth, is expected to support long-term economic expansion. However, elevated energy prices, supply chain disruptions and global geopolitical developments may continue to pose near-term risks to growth and inflation outlook.

The industry outlook for FY27 remains uncertain, with growth drivers intact but near-term performance constrained by demand uncertainty, input cost volatility, and geopolitical disruptions. A broad-based recovery will depend on revival in global consumption and export markets. Recent Free Trade Agreements (FTAs) with the EU and UK, currently under discussion, are likely to enhance market access and improve export competitiveness for Indian players.

The Company has an adequate and effective internal control system commensurate with the size and complexity of the organization. The Company has undertaken a comprehensive review of all internal control systems to take care of the needs of the expanding size of the Company and believes that these systems provide, among other things, a reasonable assurance that transactions are executed with management authorization. It also ensures that they are recorded in all material respect to permit preparation of financial statements in conformity with established accounting principles along with the assets of the Company being adequately safeguarded against significant misuse or loss. The company has also upgraded the IT support systems. A system of internal audit to meet the statutory requirement as well as to ensure proper implementation of management and accounting controls is in place. The Audit Committee periodically reviews the adequacy of the internal audit functions.

The aim is to create an inclusive working environment that attracts and retains the best people, enhances their flexibility, capability and motivation and encourages them to be involved in the growth of the Company. We believe in sophisticated equipment and skilled employee resources, together with strong management and design capabilities. As on 31.03.2026 the Company has 18 employees on rolls of the company.

In the preparation of the financial statements the Company has followed the Indian Accounting Standards (IND AS) specified under Section 133 of the Act, read with relevant rules made there under. The Significant Accounting policies which are consistently applied have been set out in the notes to the financial statements.

In view of change in operations the companys revenue from operations was Rs. 264.17 lakhs in the previous financial year and it is increased to Rs. 692.03 lakhs during the financial year 2025-26.

10. HEALTH, SAFETY AND SECURITY MEASURES:

The Company continues to accord the highest priority to health and safety of its employees and communities it operates in. The Company has been fully committed to comply with all applicable laws and regulations and maintains the highest standard of Occupational Health and Safety and ensures safer plants by conducting safety audits, risk assessments and periodic safety awareness campaigns and training to employees. We believe in good health of our employees. Modern occupational health and medical services are accessible to all employees through well-equipped occupational health centers at all manufacturing units.

Further, the Company had taken all precautionary and safety measures for its employees during pandemic and continue to ensure all preventive and protective safeguards for all employees against such threats at its plant and sites.

1. Readers are advised to kindly note that the above discussion contains statements about risks, concerns, opportunities, etc., which are valid only at the time of making the statements. These statements are based on certain assumptions and expectation of future events. Actual results could, however, differ materially from those expressed or implied. A variety of factors known / unknown, expected or otherwise may influence the financial results. These statements are not expected to be updated or revised to take care of any changes in the underlying presumptions.

2. Readers may therefore appreciate the context in which these statements are made before making use of the same. The company assumes no responsibility in respect of the forward-looking statements herein, which may undergo changes in future based on subsequent developments, information or events.