Texmo Pipes & Products Ltd Management Discussions

INDIAN ECONOMY

According to the study of the National Statistical Institute, the Indian economy displayed positive growth this year despite global uncertain situations. The Gross Domestic Product (GDP) of the Company shows as an economic survey GDP for the FY 2025-26 projected at 6.8% and real GDP growth is 7.2%. By looking to the Union Budget 2026 the Government is continuously working hard enough taking into vision of Make In India and Viksit Bharat @2047. Despite of ongoing trade routes and war, along with subsequent developments imposed by different economies, global economy had a major impact on global supply chain and oil prices, which in turn also affect Indian economy and business trade. Also in line with the global movements, stock markets variation, inflation, forex reserves also impact during the fiscal year. All the major economies of the world have also gone through some form of changes in trade policies and are also approaching India in various sectors for trade and commerce.

OUTLOOK

During the Financial Year 2025-26, the overall growth scenario is remained well, although significant challenges persist in the global environment and scenario. The factors i.e. Consumption, income growth, and borrowing costs shall affect the countries overall economic scenario. Despite other challenges, there are positive elements within the global economic landscape and the move and outlook of the Government. Even as the global conflict remained geographically distant from India, ripples comprised increased oil import, inflation, cautious government and a sluggish equity market, India continuously emerged as the fastest- growing economy in FY 2025-26 with fourth largest global economy. India became the worlds most populous nation. The Governments increased impetus on infrastructure creation, showcased in the largest-ever allocation in the Union Budget is expected to drive economic progress. Expanding public digital platforms and measures such as boosting infrastructure, global outreach, PM GatiShakti, the National Logistics Policy, Jal Jeevan Mission and the Production-Linked Incentive schemes will support and aid economic growth..

INDIAN PIPING INDUSTRY OVERVIEW

The Indian plastic pipe market in the coming future is eyeing and witnessing a futuristic approach and filled with opportunities and is likely to grow in coming years. As the country chart shows growth towards development, the market is expected to grow at an impressive CAGR of 10.3% from 2022 to 2027, reaching a valuation of $10.9 billion. The key sectors in Indian Piping Industry are divided in potable water supply, wastewater supply, electrical and telecommunication cable protection, agriculture, chemicals, and oil and gas etc. This growth can be attributed to a large number of factors, including government investment in infrastructure, an uptick in residential and commercial construction, industrial expansion, the irrigation sector, and the replacement of deteriorating and GI pipes and household water supply etc. The PVC Pipe Sector expected to grow 10-15% this year. The demand for metal to polymer pipes has experienced a noticeable shift across various industries, particularly in plumbing and piping applications within the construction industry. CPVC pipes have also witnessed a surge in demand in the hot- and cold- water plumbing industry in recent years. As the Indian economy continues to march forward, the plastic pipe market is poised for an impressive growth trajectory, spearheading a new era of infrastructure development in the country. The massive outreach of Functional Household Tap Connection is also a major boost for the piping industry to reach at every household for providing drinking water. The Indian plastic piping industry is expected to witness approximately 8% volume growth in FY 2026-27, supported by recovery in housing and agriculture demand, infrastructure spending and increasing penetration of organised players. The IMD forecast for the year is to have below normal rainfall. The same will boost crop production and contain inflation.

OPPORTUNITIES AND THE GOVERNMENT IMPETUS

The efforts of the Government and its focus and impetus on infrastructure creation, road transportation, showcased the allocation in the Union Budget is expected to drive economic progress and growth. Expanding public digital platforms and measures such as PM GatiShakti, the National Logistics Policy, and the Production-Linked Incentive schemes will support and aid economic growth. The Government is year on year focusing on allocating and increasing budgets for infrastructure, agriculture and major sectors giving highest level of revenue and employment in all means. The infrastructure sector and the attention of every household and livelihood for all is the major focus of government to reach at an improved outlook.

THE GOVERNMENT DEVELOPING INITIATIVES:

The Capital Outlay in Budget 2025-26:

The Union Budget 2026-27 continued to focus on infrastructure-led economic growth and long-term development by increasing the public capital expenditure outlay to Rs.12.20 lakh crore, compared with Rs. 11.21 lakh crore in FY 2025-26. The continued emphasis on infrastructure development, water supply, sanitation, irrigation, urban infrastructure and rural development is expected to support demand for polymer piping products. The Government has also maintained its focus on agriculture and allied activities, rural infrastructure and productivity enhancement, creating opportunities for irrigation and agricultural applications. Continued investment in programmes such as the Jal Jeevan Mission, PMAY, PM GatiShakti and other infrastructure initiatives is expected to support the development of water-management and infrastructure networks and contribute to the long-term growth prospects of the polymer piping industry.

Har Ghar Nal Se Jal:

The Governments focus under the Jal Jeevan Mission, the Har Ghar Nal Se Jal Scheme aims to provide every household with a Functional Household Tap Connection (FHTC) in its premises to reduce the burden of fetching water on women in the household. By introducing the scheme in the year 2019 to 2024, the Government has further extended the same till the year 2028 for its wide outreach to every household. With the scheme, the government looks to provide all citizens of the country with sustainable water supply connectivity for the provision of clean drinking water and is focusing with a clear vision with a roadmap.

PM Gati Shakti National Master Plan:

By PM Gati Shakti National Master Plan and National Logistics Policy catalyse the infrastructure sector and its huge outlay boost all sector in infrastructure and development.The Governments focus by this initiative creates master plan for efficient and speedy work progress in developing sectors.

Affordable Housing Project:

The growing awareness of home ownership and the Governments favorable affordable housing schemes has led to significant growth in the affordable housing segment. As we advance, the demand for affordable housing will continue over the coming years. As in the last Union Budget, the Finance Ministry has again announced PM Awas Yojana 2.0 - an initiative addressing urban housing shortage, ensuring a pucca house to all eligible families focusing on urban poor.

The land based transportation system:

he Government focus is to build and develop roads and highways to ease transportation and efficient and effective time management and ease in doing business. The Indian government intends to accelerate road construction year on year and the overall road construction project pipeline remains robust across various areas and seen in execution stages.

Other Opportunities:

The Water Supply and Distribution channels outreaching to the end areas focused us on improving technological advancement and reaching public distribution channels.

The Governments focus on Telecom and Gas Sector, Company is driving its approach towards gas pipeline projects supply and distribution channels.

The increased growth in construction industry and technological advancement leads to the clear vision of government in our sector which shows the roadmap for our industry and future outlook.

Furthermore, policy initiatives like AMRUT 2.0 (Atal Mission for Rejuvenation and Urban Transformation) and Smart Cities Mission creates huge demand for commercial and real estate.

Sectors focusing more positively year on year includes Irrigation, Real Estate and Urban Infrastructure and various government schemes like Pradhan Mantri Krishi Sinchayee Yojana and boosting in micro irrigation projects and agriculture.

CHALLENGES Cost of raw material

The raw material prices during the year under review shows substantial high and it broadly impacts the performance and operations of the industry and the Company and due to the sudden volatility the operations may affect to an extent. However, despite being various geopolitical and global challenges, the Company achieved the targets as defined, by technological advancement and superior techniques, quality creation and expertise and dealing in all segments. The Company also achieve around 30% growth in CPVC Fittings and Sanitary segment. Also an unpredicted and unseasonal rainfall impacted the industry to a possible extent. Moreover, the change in raw material prices impact the end users and pipe manufacturing players, as the cost is to be passed down to the downstream industry users and is also affects both organized and unorganized sectors. However, the raw material prices are slightly improving and shall develop a positive and growth impact in both revenue and operational outlook.

Risk Management

The Company has in place an effective risk management framework to primarily control business and operational risks. The major risk areas are systematically and periodically reviewed by the senior management. At various levels, comprehensive policies and procedures will help to identify, mitigate and monitor risks. By taking such proactive measures, the Company ensures that strategic business objectives are achieved seamlessly in a steady and efficient manner. During the financial year under review, rating for fund based facilities of the Company has been IND BBB+. Further, your Company has an intricate Risk Management procedure which depicts business risk and operational risks that are supported by policy framework.

Human Resource

The Human Resource division of the company plays a vital role in hiring, training, managing and retaining employees to build a group of talented workforces. So that they can reach their full potential and work diligently towards the growth of the organization. The Company has created a level playing field space, whereon equal opportunities to all employees is provided. With this belief, it has enhanced employee morale, boosted productivity and reduced people absenteeism. As of March 31, 2026, the Companys permanent total work force is 340 employees.

Product Wise Performance

Companys major products are PVC, HDPE, Fittings and Trading. Performance of various products at a glance is as under:-

(Rs. in lakhs)

Particulars	2025-26	2024-25
HDPE Pipe	9,611.54	10,449.47
PVC Pipe	13,942.29	16,549.87
CPVC fitting	1,463.36	1,301.42
Moulding fittings	3,183.95	3,256.31
CPVC Pipe	0.10	7.76
Roto Water Tank	632.27	666.44
Compound/Dry Blend	781.23	-
RM Compound Sale	106.67	110.77
Trading Sale	5,008.01	3,683.22
Total	34,729.43	36,025.27
Add - Sales of Services	529.32	580.75
Total revenue from operations	35,258.75	36,606.02

Note - The Previous year figures have been regrouped/ reclassified wherever necessary to make them comparable with current periods figure.

Internal Control System and their adequacy

The Company considers that internal control is one of the key supports of governance which provide freedom to the management within a outline of appropriate checks and balances. Texmo Pipes and Products Limited have a strong internal control framework, which was instituted considering the size, nature and risk in the business. The Companys internal control environment provide assurance on efficient conduct of operations, security of Assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records, timely preparation of authentic financial information and compliance with applicable laws and regulation. The Company uses SAP - Enterprise Resources Planning software as its core IT system. The Internal Auditor is a Chartered Accountant has been entrusted the job to conduct regular internal Audits at all the units/Branches and report to the management the lapses, if any and submitted Report on quarterly basis to the Board of Directors for their review and comments. To ensure efficient Internal control system, the Company has a well constituted Audit committee who at its periodical meeting, review the competence of internal control system and Procedures thereby Suggesting improvement in the system and process as per the changes of Business dynamics. The system and process are continuously improved by adopting best in class processes, automation and implementing latest IT tools.

Discussion on Financial Performance with respect to operational performance

On a standalone basis your company recorded a turnover of Rs. 35,258.75 Lakhs for the year ended 31st March, 2026 as against Rs. 36,606.02 Lakhs in the previous year which shows a decrease of 3.68%.

On a standalone basis, the profit before interest, depreciation and tax for the financial year is Rs. 2,505.66 Lakhs as against Rs. 2,819.55 Lakhs recorded in the previous year. The profit before tax for the financial year stood at Rs. 1,635.80 Lakhs compared to Rs. 1,669.45 Lakhs of the previous year. The profit after tax & exceptional item for the financial year at Rs. 1,125.96 Lakhs compared to Rs. 1,746.41 Lakhs of the previous year.

On a standalone basis your company recorded Production of 26,322.39 MT for the year ended 31 st March, 2026 as against 26,608.36 MT in the previous year which shows a decrease to 1.07%.

The Companys subsidiary Shree Venkatesh lndustries Private Limited has also performed well in terms of its Operations in the Pithampur Industrial Area, Dist. Dhar, M.P. in Indore Region.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Details of significant changes, i.e., change of 25% or more, as compared to the immediately previous Financial Year in key financial ratio, along with detailed explanation therefore:

Sr. No. Particulars	Ratio as on 31 March 2026	Ratio as on 31 March 2025	% of Change	Explanation, if any
i. Return on Equity Ratio	5.13%	8.52%	-39.79%	Due to decrease in profit after Tax and increase in Average Total Equity as compared to previous year.
ii. Net Profit Ratio	3.19%	4.77%	-33.06%	Due to decrease in Profit after Tax and Turnover as compared to previous year.
iii. Return on Investment Ratio	-0.45%	1.49%	-69.80	Due to decrease in Investment during the year as compared to previous year.
iv. Debt Equity Ratio	0.10	0.13	-27.13%	Due to decrease in Total Debts and increase in Total Equity as compared to previous year.
v. Net Capital Turnover Ratio	3.32	2.57	28.88%	Due to decrease in Turnover and working capital as compared to previous year.

RETURN ON NET WORTH:

Details of change in Return on Net Worth as compared to the immediately previous Financial Year as follows:

Sr. No. Particulars	Ratio as on 31 March 2026 in	Ratio as on 31 March 2025 in	% of Change	Explanation, if any
i. Return on Net Worth	6.96%	11.65%	-40.27%	Due to decrease in Profit after tax as compared to previous year.

Cautionary Statement

Some of the statements in this Management Discussion and Analysis, describing the companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable Laws and Regulations. Actual results might differ substantially from those expressed or implied. Important developments that could affect the Companys operations include changes in economic conditions affecting demand, supply and price movements in the domestic and overseas markets in which your company operates changes in the Government regulations, Tax Laws and other Statutes or other incidental factors. The company assumes no responsibility in respect of forward-looking statements, which may be amended or modified in future.