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, 2025

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

Texel Industries Limited ("Texel") has been engaged in the business of manufacturing technical textile products with over 35 years of experience in the industry. The company has proven its capabilities in manufacturing a wide range of technical textile products which includes geomembranes, geotextiles and ground covers among others. Our products have applications in agriculture, aquaculture, horticulture, animal husbandry, civil engineering, water harvesting, water conservation and disaster relief, landscaping, transportation, pollution control and waste management.

Texel is having total installed manufacturing capacity of about 23,680 metric tonnes at its Kheda facility. The total practical capacity is about 19,080 metric tonnes. _ The Company continues to focus on cost optimization by improving production efficiencies, while also investing in the development of new products and the enhancement of its existing offerings, technologies, and processes. Your Company remains committed to upholding the confidence of its stakeholders and is consistently working towards strengthening revenues and profitability.

Your Company continues to witness healthy demand across domestic and international markets. By broadening its product mix and focusing on profitability, the Company is working towards strengthening its financial position and ensuring consistent growth.

B. OVERVIEW OF THE GLOBAL ECONOMY:

According to the_International Monetary Funds World Economic Outlook Update (July 2025), the global economy is forecast to grow by_3.0 percent in 2025, with a slight recovery to_3.1 percent in 2026. Growth in_advanced economies_is expected to remain subdued—projected at around_1.4 percent in 2025_—while_emerging market and developing economies_are forecast to expand at approximately_3.7 percent in 2025. Global inflation_is anticipated to continue its downward trajectory, though_inflation in the United States may remain above target, partly due to enduring trade-related pressures_. The IMF highlights several downside risks to this outlook, including_heightened policy uncertainty, ongoing geopolitical tensions, trade disruptions, and elevated tari_ regimes—all of which exert a drag on investment and trade, dampening near-term growth options. Despite these challenges, the global economy demonstrates tentative resilience; however, achieving stable and sustainable growth will require careful calibration of policy trade-o_s, rebuilding of bu_ers, and a focused commitment to structural reforms.

C. OVERVIEW OF THE INDIAN ECONOMY:

According to the_United Nations World Economic Situation and Prospects (mid-2025 update), Indias economy grew by about_6.8% in 2024_and is expected to grow by_6.3% in 2025, rising further to_6.5% in 2026. Growth is being supported by_government spending on infrastructure_and_steady household consumption. India is also benefiting from global companies moving parts of their supply chains here. Key industries such as_pharmaceuticals, chemicals, electronics, and IT services_are expected to perform well, even though demand for exports is weak in many countries.

Infiation is projected to fall from_4.8% in 2024fito about_4.3% in 2025, which keeps it within the Reserve Bank of Indias comfort zone. Together with healthy job creation, this will support local demand in FY 2025-26. Risks remain from global trade tensions, tariffs, and geopolitical issues, but India is still the_ fastest-growing major economy, backed by strong fundamentals like high foreign exchange reserves, solid public investment, a young workforce, and resilient private consumption.

D. OPPORTUNITIES AND THREATS:

Indias focus on world-class infrastructure, along with the Governments push for technical textiles, continues to create a strong growth environment. A favorable monsoon forecast, supported by the newly launched_Bharat Forecasting System (BFS), strengthens agricultural planning and is expected to drive demand for products used in farming and water management. At the same time, new applications of geosynthetics are gaining traction across multiple industries.

On the risk side, global trade policies such as the_ U.S. tari_ regime_ may create pricing pressures in certain markets, but they also encourage Indian manufacturers to diversify exports and improve competitiveness. Geopolitical tensions and fluctuations in shipping and freight rates remain factors to watch, though their impact is expected to be temporary and manageable. With resilient domestic demand, government infrastructure spending, and an agile operating model, your Company is well positioned to navigate these external challenges while continuing to capture growth opportunities.

Your Companys risk management and control frameworks are aligned with its overall risk profile and appetite, though no system can provide complete assurance. To safeguard business operations, comprehensive insurance coverage has been maintained for all key assets, helping to minimize potential losses. Your Company is also planning to migrate from the current ERP system to a customized ERP to mitigate risks.

E. SEGMENT-WISE PERFORMANCE:

Your Company remains committed to innovation and leadership in the Indian market by delivering high-quality products and steadily expanding its geographical presence. A brief overview of the segment-wise performance is provided below.

Technical Textile (Manufacturing) Segment:

• Geomembranes

The concept of geomembrane-lined farm ponds is rapidly gaining recognition across India, supported by various government initiatives aimed at water conservation and sustainable agriculture. As adoption continues to rise, these ponds are creating new opportunities in the country for the Companys products. This growing acceptance positions your Companys geomembrane products at the forefront of a significant expansion of the market, offering long-term growth potential and strengthening its role in advancing resilient agricultural practices.

During FY 2024-25, the Company registered Annual Sales of about 4959.60 lakhs, thereby contributing about 42.86 % to the total turnover of the Company.

• Tarpaulins

Your Companys HDPE Tarpaulins remained a steady contributor to performance during FY 2024-25, with sales of 2585.98 Lakhs, accounting for 22.35 % of total turnover. Supported by government schemes in the agro segment and sustained demand from industry and retail markets, this product line continues to provide a stable revenue base.

Alongside, the technical textile products manufactured at the Kheda facility are steadily strengthening their market presence, reflecting growing acceptance and long-term potential.

• Geotextiles

Your Companys woven geotextiles are witnessing growing acceptance in international markets, with exports steadily contributing to volumes. During FY 2024-25, this segment generated revenues of 846.58 Lakhs, reflecting its rising importance in the portfolio.

Other Technical Textile Products

Your Company is also manufacturing following products, namely:

Ground covers: It is used for protection of the soil from frost and other elements of nature and also to prevent growth of weeds. Lumber covers: It is used for covering lumber which is used in construction.

Metal wrap: It is used for preventing corrosion of metal coils.

Geo Tank – It is a portable structure that facilitates for aquaculture and water storage;

Azolla Bed – used for azolla fern cultivation in animal husbandry, dairy industry and also used in aquaculture industry; Vermibed – used for organic farming; Grow Bags – used in terrace gardening or nursery and also for vegetable cultivation; Geo Tube or Lay Flat tube – used for water supply and water conveyance; Water Proof Membrane – used for preventing the ingress of water into roofs, walls and basements.

Your Company is focusing on increasing sales of these products also.

• Land, Building & Property Development Segment:

During the year, the Company also initiated surplus property development as part of its strategy to unlock value from non-core assets. With the consolidation of operations at the Kheda plant, surplus property was repurposed for development, thereby contributing to the turnover and strengthening the overall revenue mix.

During FY 2024-25, the Company registered Annual Sales of about 707.81 lakhs in this segment, thereby contributing about 6.12 % to the total turnover of the Company.

F. OUTLOOK:

Your Companys performance remains closely tied to the overall pace of economic growth, inflationary trends, and consumer spending power. To stay ahead in a competitive environment, we have placed strong emphasis on_operational efficiency, innovation in value-added products, and selective expansion into new markets_with the objective of strengthening margins and building resilience.

We are pursuing growth across all product lines, geographies, and customer segments, while maintaining a disciplined financial approach.

At the same time, your Company continues to build on its long-standing strength in_water conservation solutions, an area where our expertise has consistently created impact. Expanding the product portfolio and venturing into untapped markets remain key priorities to achieve stability in both operations and profitability.

Looking ahead, your Company is committed to delivering_ sustainable, year-on-year growth. With scale and execution discipline, we expect revenue expansion to be accompanied by improvement in_EBITDA margins, enabling long-term value creation for all stakeholders.

G. RISKS AND CONCERNS:

Risk is inherent to every business, and your Company has adopted a comprehensive Risk Management Policy to systematically identify, evaluate, mitigate, and monitor potential threats. These risks span across strategy, finance, operations, foreign exchange, environment, technology, regulation, reputation, personnel, and political factors, among others. To ensure effective oversight, the Audit Committee of the Board regularly reviews and strengthens the Companys risk management framework, enabling proactive responses and safeguarding business continuity.

H. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has established a robust system of internal financial controls in line with the requirements of the Companies Act, 2013, aimed at strengthening transparency and accountability. These controls are designed to safeguard assets, ensure their optimal use, and maintain accuracy in financial reporting. The Internal Auditors regularly review operations across departments and present their findings to the Audit Committee on a quarterly basis. The management remains committed to maintaining strong internal control systems across business operations, statutory compliances, and financial reporting.

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

During F.Y. 2024-25, the revenue from operations was about 11,530.83 lakhs. The Company reported a Profit of 488.51 lakhs during the year against a loss of 841.11 lakhs in the previous year. The Management was able to stabilize operations through its efforts.

Your Company is working towards achieving better financial performance in the years to come. The financial performance of the Company has been summarized in the Directors Report under the heading ‘Financial Performance.

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

The Company firmly believes that its people are its greatest strength and the driving force behind its continued progress. Their integrity, commitment, and passion have been central to achieving consistent improvements. We strive to provide a workplace culture and HR practices that encourage_innovation, collaboration, merit-based growth, continuous learning, and leadership development.

Our Human Resource strategy remains focused on_ enhancing productivity, optimizing manpower costs, and strengthening skill development. At the same time, we are committed to fostering motivation and engagement through diverse initiatives that create a sense of belonging and inspire employees to contribute their best.

As on 31.03.2025, there are total 66 (Sixty-Six) employees working on the pay roll of the Company and there are 226 (Two Hundred Twenty-Six) workers working on contract basis.

K. THE KEY FINANCIAL RATIOS ARE GIVEN BELOW:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is required to provide details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations.

Key Financial Ratios	FY 2024-25	FY 2023-24	% Change	Explanation
Debtors Turnover Ratio	9.62	6.31	52.46%	Due to better collection efficiency and lower average receivables compared to last year.
Inventory Turnover Ratio	3.57	3.57	0%	-
Interest Coverage Ratio	3.24	0.71	356.34%	Significant improvement due to higher earnings before interest and tax (turnaround from loss to profit) along with reduced interest burden.
Current Ratio	1.08	0.83	30.12%	Increase mainly due to reduction in current liabilities while current assets have increased moderately.
Debt Equity Ratio	0.19	4.90	-96.12%	Substantial increase in shareholders equity (profit retention, new infusion, or reserves) combined with a decrease in borrowings.
Operating Profit Margin (%)	8.04	16.08	-50.00%	Decline in margin mainly due to increased input costs and other operating expenses, despite revenue growth. However, operations have turned profitable compared to the loss in previous year.
Net Profit Margin (%)	4.22	-8.86	-147.63%	Improvement due to turnaround from net loss in FY 2023-24 to net profit in FY 2024-25 & supported by better operational performance and cost control.

L. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THERE OF:

Particulars	FY 2024-25	FY 2023-24
Return on Net Worth (%)	11.88	-51.09

The Net worth as on 31^st March, 2025 has increased to 4,110.40 Lakhs as compared to 1645.63 lakhs in the previous year, so the Return on Net Worth is 11.88% as compared to (-) 51.09 % in the previous year.

The Companys Return on Net Worth improved from –51.09% in FY 2023-24 to 11.88% in FY 2024-25. The negative ratio in the previous year was primarily due to losses incurred during FY 2023-24. With improved financial performance and profitability during FY 2024-25, the Company achieved a positive return on net worth. The change is mainly attributable to better operating results and efficient cost management.

M. CONCLUSION:

The Management Discussion and Analysis Report ("this Report") has been prepared on the basis of available data as well as certain assumptions as to the economic conditions, various factors affecting raw material prices, selling prices, consumer demands & preferences, governing laws, political factors and other incidental factors. The Companys actual results, performance may differ considerably from those presented herein. The Companys performance is dependent upon global and national economic conditions, change in the geopolitical scenario, the price of commodities, business risk, change of Governments rules and regulations and other incidental factors over which the Company do not have any direct/indirect control.

	For and on behalf of the Board
	Shailesh R. Mehta	Umeshbhai A. Vyas
Place : Ahmedabad	Chairman & Managing Director	Independent Director
Date : 14th August, 2025	DIN:01457666	DIN: 07979266