Credit Rating

Lagnam Spintex Limited Plant & Regd. Office: A 51-53, RIICO Growth Centre Hamirgarh, Bhilwara (RAJ)-311001 To, Date: 30.07.2026 The Manager Listing & Compliance Department, National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra, Mumbai- 400051. Company ID: LAGNAM ISIN: INE548Z01017 Sub.: Disclosure under regulation 30 of the SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 (as amended)- Intimation of the Credit Rating assigned & Reaffirmed by “India Ratings & Research” Dear Sir/Madam, Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 (as amended), we hereby inform you that “India Ratings & Research” (Credit Rating Agency) has assigned and affirmed the Credit Rating on bank facilities of the Company as per following details: - Facilities Present Credit Rating Previous Credit Rating Long-Term Loans IND BBB-/Stable IND BBB-/Stable Fund Based Facilities IND BBB-/Stable/ IND A3 IND BBB-/Stable/ IND A3 Non Fund Based Facilities IND A3 IND A3 A copy of publication dated 30.07.2026 as issued by “India Ratings & Research” is attached herewith. Thanking You, Yours Faithfully, For Lagnam Spintex Limited Anand Mangal Managing Director DIN: 03113542 Encl.: As above M: (91) 9929091010 E: anand@lagnam.com W: www.lagnamspintex.com PAN: AABCL8061A CIN: L17119RJ2010PLC032089 India Ratings Affirms Lagnam Spintex’s Bank Loan Facilities at 'IND BBB-’/Stable; Rates Additional Limits Jul 30, 2026 | Lagnam Spintex Limited | Other Textile Products India Ratings and Research (Ind-Ra) has taken the following rating actions on Lagnam Spintex Limited’s (LSL) bank loan facilities: Details of Instruments Rating Assigned Size of Issue Instrument Type Regulator of Instrument Date of Issuance Coupon Rate Maturity Date with Rating Action (INR million) Outlook/Watch Bank loan facilities RBI - - - 86.10 BBB-/Stable/IND Assigned Bank loan facilities RBI - - - 3,886 BBB-/Stable/IND Affirmed Analytical Approach Ind-Ra continues to take a standalone view of LSL to arrive at the ratings. Detailed Rationale of the Rating Action The affirmation reflects Ind-Ra’s expectation of sustenance of LSL’s medium scale of operations in the medium term, along with a likely improvement in operating profitability due to the installation of a solar power plant, including a hybrid power plant, in FY27 leading to power cost savings. The full year impact on the operating profitability is likely to be seen from FY28. Ind-Ra expects the credit metrics to remain modest in the near term, although improve due to the likely increase in operating profitability, along with a reduction in the total debt led by scheduled debt repayments. List of Key Rating Drivers Strengths Medium scale of operations; revenue likely to remain at similar levels in medium term Experienced promoters; established presence in textile market Weaknesses Credit metrics to remain modest despite improvement Modest EBITDA margins Inherent industry risks Detailed Description of Key Rating Drivers Medium Scale of Operations; Revenue Likely to Remain at Similar Levels in Medium Term: In FY26, LSL reported a turnover of INR6,049.80 million (FY25: INR6,055.65 million) with exports contributing 42.79% to the total revenue (46.26%). The company operated at 100% capacity during FY25-FY26 with sales increasing to 25,017 metric tonnes (MT; 24,062MT); however, realisation per MT softened to INR241,819 (INR251,662). Bangladesh contributed 25.65% to the company’s revenue (FY25: 25.09%), followed by Portugal at 5.89% (6.20%), while the US, Morocco, South Korea and others contributed for the remaining. The revenue share from Bangladesh declined to 15.44% in 4QFY26 from 38.47% in 1QFY26 and is likely to have reduced further in 1QFY27 as LSL has been expanding in other international markets. Ind-Ra expects the revenue to sustain at similar levels in FY27 on account of 100% capacity utilisation and the absence of any further capex plan for increasing the installed capacity. Experienced Promoters; Established Presence in Textile Market: LSL is a listed entity, led by D.P. Mangal, the chairman of the group, who has more than four decades of experience in the textile industry, and Anand Mangal, who has been the managing director since LSL’s inception in 2010. Furthermore, the company has a strong foothold in the domestic and export markets, such as Bangladesh, Portugal, Poland, China, Singapore, the US, South Korea, Morocco, and Germany. Credit Metrics to Remain Modest despite Improvement: LSL installed 41,472 spindles for manufacturing 100% compact cotton yarn in Hamirgarh, Bhilwara, at a total cost of INR2,180 million, of which INR1,630 million has been funded through banks and the rest through internal accruals. Out of the total debt of INR1,630 million, INR1,505.54 million was drawn down in FY24, leading to deterioration in the net leverage (net adjusted debt/operating EBITDA). Thereafter, the credit metrics remained modest, although improved over the years led by increased operating profitability and scheduled debt repayments. The new plant commenced commercial operations from January 2024. In FY26, LSL’s interest coverage (operating EBITDA/net interest expense) improved to 2.18x (FY25: 2.11x; FY24: 2.95x) and net leverage to 5.35x (5.95x; 8.37x) due to sustained operating profitability of INR668.6 million (INR653.05 million; INR450.78 million) and a reduction in total debt to INR3,575.97 million (INR3,884.95 million). The adjusted net leverage (including export bills discounted) stood at 6.23x in FY26 (FY25: 6.85x; FY24: 9.56x). The net interest expense is net of subsidy received on term loan interest, which LSL generally receives quarterly. Ind-Ra expects the credit metrics to improve further in FY27 and FY28 on the back of a likely improvement in operating profitability and a further reduction in term debt due to scheduled debt repayments. Modest EBITDA Margins: The EBITDA margins improved to 11.05% in FY26 (FY25: 10.78%) on account of a decline in the cost of goods sold as a percentage of revenue to 71.79% (72.36%). In FY26, the EBITDA per tonne was INR26,724 (FY25: INR27,139). The operating profitability was also impacted in FY26 due to an increase power tariff by the government of Rajasthan, effective October 2025. The return on capital employed was 10.0% in FY26 (FY25: 9.70%) and is likely to improve over the medium term led by the likely improvement in operating profitability. LSL is installing a 12MW solar power plant and a 3.5MW hybrid power plant with a total capex of about INR550 million, which is likely to become operational during September-October 2026. The power plant is likely to benefit in lowering the annual power cost by about INR150 million. Ind-Ra expects the operating margins to increase above 12% over the medium term led by the estimated savings in power cost. Inherent Industry Risk: Textile players face high competition, due to the fragmented nature of the industry and raw material price volatility. Furthermore, cotton prices in India are regulated through the fixing of a minimum support price by the government, and cotton players depend on the price parity. The price of raw cotton also depends on the area under production, annual yield, international demand-supply scenario, export quota decided by the government and the previous year’s inventory. Liquidity Adequate: The company’s average monthly utilisation (based on drawing power) of the fund-based limits was 93.95% over the 12 months ended June 2026. During FY26, LSL increased its working capital limits to INR2,000 million from INR1690 million. Furthermore, LSL has about INR410 million of sanctioned Emergency Credit Line Guarantee Scheme limits, which have been partly utilised for working capital requirment. The cash flow from operations turned positive to INR423.60 million in FY26 (FY25: negative INR65.41 million) due to favourable change [Showing first 8,000 characters — download PDF for full document]