Texel Industries Ltd Management Discussions

Pursuant to Regulation 34(2) (e) and Schedule V of SEBI (LODR) Regulations, 2015

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the financial year ended 31^st March 2026.

A. OVERVIEW OF THE COMPANY "TEXEL INDUSTRIES LIMITED":

Texel Industries Limited ("Texel" or "the Company") has been engaged in the manufacture of technical textile products for over three decades. The Company has established capabilities in manufacturing a wide range of products, including geomembranes, geotextiles, tarpaulins, ground covers and other coated and uncoated technical textile products.

The Companys products find applications in agriculture, aquaculture, horticulture, animal husbandry, civil engineering, water harvesting and conservation, disaster relief, landscaping, transportation, pollution control, waste management and other industrial sectors.

The Companys manufacturing operations are located at its Kheda facility. As at 31^st March 2026, the Company had an installed manufacturing capacity of approximately 23,680 metric tonnes per annum and a practical production capacity of approximately 19,080 metric tonnes per annum.

During FY 2025-26, the Company continued to focus on improving operational efficiency, optimising manufacturing costs, strengthening product quality and expanding the applications of its existing technical textile products. As part of its application-development initiatives, the Company is exploring solutions for completely recyclable print media and systems designed to reduce evaporation losses from water-storage facilities.

The Company continues to focus on broadening its market presence in India and international markets, improving capacity utilisation and developing value-added applications. It remains committed to strengthening revenues and profitability through operational discipline, cost optimisation, application development and expansion into suitable market segments.

B. OVERVIEW OF THE GLOBAL ECONOMY:

According to the International Monetary Funds World Economic Outlook Update of July 2026, global growth is projected at 3.0% in 2026 and 3.4% in 2027. The outlook remains uneven, with geopolitical tensions, trade-policy uncertainty, energy-price movements and disruptions to international trade continuing to affect investment and business confidence. At the same time, technology-led investment and resilient private-sector activity are supporting growth in certain economies.

The global operating environment therefore remains uncertain. Volatility in commodity prices, tariffs, freight costs, exchange rates and supply chains may influence the performance of manufacturing and export-oriented businesses. Sustainable growth will depend upon macroeconomic stability, calibrated policy responses and continued investment in productive capacity and technology.

C. OVERVIEW OF THE INDIAN ECONOMY:

India remained one of the fastest-growing major economies during FY 2025-26. As per the provisional estimates released by the Ministry of Statistics and Programme Implementation, real GDP grew by approximately 7.7% in FY 2025-26, compared with 7.1% in FY 2024-25.

Growth was supported by domestic demand, investment activity and the performance of the secondary and tertiary sectors.

Continued public expenditure on infrastructure, policy support for manufacturing, water conservation and technical textiles, together with resilient domestic consumption, provides a supportive environment for the Companys products. Nevertheless, global trade uncertainty, geopolitical developments, commodity-price volatility and financing conditions remain important external risks.

D. OPPORTUNITIES AND THREATS:

Indias continuing focus on infrastructure creation, water conservation, irrigation, sustainable agriculture and the development of technical textiles offers growth opportunities for the Company. Increasing awareness of geosynthetics and engineered membrane systems is supporting new applications in agriculture, aquaculture, civil engineering, waste management, waterproofing and environmental protection.

The Company also sees potential in value-added applications of its existing products, including completely recyclable print-media solutions and systems for reducing evaporation losses from water-storage facilities. Expansion of exports and the development of specialised products for international customers provide further opportunities for growth and diversification.

The principal threats include volatility in polymer prices, competitive pricing, fluctuations in demand, delayed receivables, foreign-exchange movements, freight disruptions, geopolitical uncertainty and changes in tariffs and trade policies. The Company seeks to mitigate these risks through cost control, product and market diversification, quality improvement, customer development and prudent financial management.

The Companys risk-management and control frameworks are aligned with its business profile, although no system can provide absolute assurance. Adequate insurance coverage is maintained for key assets. The Company also continues to strengthen its systems and processes, including improvements in ERP and information-based controls.

E. SEGMENT-WISE PERFORMANCE:

Technical Textile Segment

The Company remains focused on strengthening its presence in the Indian and international technical-textile markets by delivering quality products and expanding the geographical reach and application base of its portfolio. The Technical Textile Segment contributed

9428.28 lakhs to the Turnover during the financial year.

Land, Building & Property Development Segment:

The Company has undertaken the development and monetisation of surplus property with the objective of unlocking value from non-core assets, following the consolidation of its manufacturing operations at the Kheda facility. The Land, Building and Property Development

Segment contributed 479.94 lakhs to the Turnover during the financial year.

F. OUTLOOK:

The Companys performance remains linked to economic growth, infrastructure and agricultural activity, raw-material prices, customer demand and the availability of working capital. The Company will continue to emphasize operational efficiency, cost optimization, development of value-added applications and selective expansion in domestic and international markets.

The Company seeks to build upon its established capabilities in water-conservation and technical-textile solutions, while developing applications relating to recyclable print media and reduction of evaporation losses. Increasing capacity utilisation, strengthening the flo the customer base remain important management priorities. productmix,improvingcash The Company remains committed to pursuing sustainable growth and improved profitability. Actual performance will, however, depend upon market conditions, execution, input costs, financing conditions and other external factors.

G. RISKS AND CONCERNS:

Risk is inherent in every business, and the Company has adopted a framework to identify, evaluate, mitigate and monitor material risks.

These include strategic, financial, operational, foreign-exchange, environmental, technological, regulatory, reputational, personnel and political risks.

The Company is particularly exposed to volatility in polymer prices, competitive pricing, availability of working capital, customer receivables, fluctuations in export demand, freight costs and changes in tariffs or trade policies. The Audit Committee and the management periodically review the Companys risk-management and control framework to support business continuity and timely mitigation.

H. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has established internal financial controls in accordance with the requirements of the Companies Act, 2013. These controls are designed to safeguard assets, promote efficient use of resources, maintain accurate accounting records and support reliable financial reporting.

The Internal Auditors periodically review operations and controls across departments and place their observations before the Audit Committee. The management continues to strengthen controls relating to business operations, statutory compliance, inventory, receivables and financial reporting.

I. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During FY 2025-26, revenue from operations was 10,095.86 lakh compared with 12,117.44 lakh in FY 2024-25. EBITDA was 1,259.00 lakh compared with 1,481.14 lakh in the previous year. Profit before tax was 315.57 lakh compared with 472.31 lakh, while profit after tax was 529.96 lakh compared with 488.51 lakh in FY 2024-25.

Revenue and EBITDA declined principally due to lower sales volume, subdued demand, geopolitical and trade-policy uncertainty and changes in the product and customer mix. Cost optimization and operational efficiencies partly mitigated the effect of the contribution.

Although profit before tax declined, profit after tax increased during FY 2025-26. This was substantially influenced by a favorable tax and deferred-tax impact during the year and should therefore be viewed separately from the movement in operating performance. The

Company continuestofocusonimprovingrevenue,operationalefficiency, working-capital management and profitability.

( in lakhs)

Particulars	FY 2025-26	FY 2024-25
Revenue from operations	10,095.86	12,117.44
EBITDA	1,259.00	1,481.14
Profit before tax	315.57	472.31
Profit after tax	529.96	488.51
Finance cost	406.45	457.64
Total borrowings	1,681.82	781.41
Net worth	4,646.05	4,110.40

J. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT:

The Company believes that its employees are an important source of organizational strength. Its human-resource practices seek to support productivity, skill development, teamwork, accountability, employee engagement and a safe working environment.

The Company continued to focus on manpower productivity, training and development and constructive industrial relations. Industrial relations during the year remained cordial.

As at 31 March 2026, the Company had 70 staff members, 81 workers on the rolls of the Company and 193 contractual workers, representing an aggregate workforce of 344 persons.

K. THE KEY FINANCIAL RATIOS ARE GIVEN BELOW:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to disclose significant changes of 25% or more, as compared with the immediately preceding financial year, in specified key financialratios, together with explanations.

Key Financial Ratio	FY 2025-26	FY 2024-25	Change	Explanation
Debtors Turnover Ratio	9.20	9.62	-42.16%	Marginal decline due to lower sales and relatively higher average trade receivables.
Inventory Turnover Ratio	2.08	3.57	-148.74%	Higher average inventory due to slower inventory movement during FY 2025-26.
Interest Coverage Ratio	3.10	3.24	-4.32%	-
Current Ratio	1.24	1.08	14.81%	-
Debt-Equity Ratio	0.36	0.19	17.19%	-
Operating Profit Margin	7.29%	8.04%	-9.33%	-
Net Profit Margin	5.35%	4.22%	26.78%	Improvement mainly due to higher PAT, which was influenced by a favorable tax/deferred-tax impact during FY 2025-26.

The adverse movement in certain financial ratios during FY 2025 26 was attributable to a combination of company-specificand external factors. The debtors turnover ratio declined mainly because of delays in receiving payments against supplies made to government customers. The inventory turnover ratio was affected by inventory accumulated for anticipated exports to the United States, which could not be executed as planned following the sudden imposition of higher tariffs on Indian goods. In addition, geopolitical instability and the resulting weakness in the global economy affected demand and reduced overall sales, leading to higher inventory holding. The interest coverage ratio moderated due to lower operating earnings arising from reduced sales and increased working capital tied up in inventory. The debt-equity ratio increased mainly because of additional borrowings, including funds invested in solar-power equipment. Although this investment increased borrowings during the year, it is expected to provide long-term benefits through savings in energy costs after the initial payback period.

L. CHANGE IN RETURN ON NET WORTH:

Particulars	FY 2025-26	FY 2024-25
Return on Net Worth	11.41%	11.88%

The Companys return on net worth, calculated as profit after tax divided by closing net worth, was approximately 11.41% in FY 2025-26 compared with 11.88% in FY 2024-25. Profit after tax increased from 488.51 lakh to 529.96 lakh; however, net worth also increased from 4,110.40 lakh to 4,646.05 lakh. Consequently, the return on net worth remained broadly stable, with a marginal decline. The FY 2025-26 profit after tax was influenced by a favorable tax/ deferred-tax impact.

M. CONCLUSION:

This Management Discussion and Analysis Report has been prepared on the basis of available information and certain assumptions concerning economic conditions, raw-material prices, selling prices, customer demand, governing laws, political and geopolitical developments and other incidental factors. Statements in this Report describing the Companys objectives, expectations, estimates or projections may be forward-looking statements within the meaning of applicable laws and regulations.

Actual results and performance may differ materially from those expressed or implied due to economic conditions, commodity prices, business risks, competitive conditions, changes in government policies and regulations and other factors over which the Company may not have direct or indirect control.

	For and on behalf of the Board
	Shailesh R. Mehta	Umeshbhai A. Vyas
Place : Ahmedabad	Chairman & Managing Director	Independent Director
Date : 13th August, 2026	DIN:01457666	DIN: 07979266