RRIL Ltd Management Discussions

Economic overview

Global economy

The global economy is facing substantial headwinds, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the weak outlook limits their ability to boost job creation and reduce extreme poverty. This challenging context is compounded by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable global trade environment and scale up support for vulnerable countries, including those in fragile and conflict situations. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To unlock job creation and long-term growth, reforms should focus on raising institutional quality, attracting private investment, and strengthening human capital and labour markets.

Global GDP growth

According to the latest international economic projections Global growth is projected at 3.0 percent for 2026 and 3.4 percent for 2027, broadly unchanged cumulatively from the April 2026. The war shock is weighing on energy importers and vulnerable economies, while AI-driven demand is lifting countries integrated into the global technology value chain.

RRI Limited is concentrated on its two-business horizon namely Textile Business and Real Estate Redevelopment activities in the state of Maharashtra and Gujarat. The visionary management policies and enthusiastic professionals executives engaged in the company are dedicated to delivering the demands on time with the entire satisfaction of customer.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The following operating and financial review of the Company throughout the Financial Year 2025-26, achieving consolidated sales of Rs.122.00 crore. This impressive success is attributed to the sales momentum gained from textile segments. With industry reforms and sustained home buyer demand, supported by an optimum repo rate, the company holds a highly optimistic outlook for its growth strategy and the future of the real estate sector.

Additionally, the Company achieved the growth in consolidated PAT, reaching Rs. 8.67 crores.

DISCUSSION ON FINANCIAL PERFORMANCE

Consolidated Financial Performance

Particulars	2025-26	2024-25
Income from Operation	12200.50	11,286.00
Earnings before interest, tax, depreciation and amortization (EBITDA)	1485.30	1,172.88
Profit Before Tax (PBT)	1121.89	960.50
Profit after tax attributable to shareholders of the company	866.97	684.56
Earnings per share (Rs.)	0.72	0.56

Analysis of revenue growth

The overall financial performance on consolidated basis is satisfactory on business performance.

BUSINESS SEGMENT

i. TEXTILE BUSINESS

Industry Structure and Development:

Indias textiles sector is one of the oldest and most diverse industries in the country, with roots stretching back centuries. It spans from traditional hand-spun and handwoven clusters to sophisticated capital-intensive mills, supported by a robust base of fibres and yarns ranging from cotton, jute, silk, and wool to polyester, viscose, and acrylic.

The decentralised power loom, hosiery, and knitting segment remains the largest component, reflecting the industrys ability to cater to multiple consumer markets. Its close linkage with agriculture, reliance on natural resources like cotton, and strong cultural heritage give the Indian textiles industry a unique identity compared to other manufacturing sectors.

To sustain competitiveness and attract investment, the government has been actively supporting the sector through targeted initiatives such as the Scheme for Integrated Textile Parks (SITP), the Technology Upgradation Fund Scheme (TUFS), and the Mega Integrated Textile Region and Apparel (MITRA) Park scheme. These measures, along with new investments in technology, innovation, and design, are positioning the textiles sector not only as one of Indias oldest industries but also as one of its most future-ready.

OPPORTUNITIES AND THREATS

Opportunities:

The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US2.3billionby2030.Indiaranksamongthetopfiveglobalexportersinseveraltextilecategories,withexportsexpectedtoreachUS2.3billionby2030.Indiaranksamongthetopfiveglobalexportersinseveraltextilecategories,withexportsexpectedtoreachUS 100 billion. India is the worlds largest producer of cotton. Indias total production of cotton in the 2025-26 season have been estimated at 292.15 lakh bales of 170 kgs. In FY26 (April-February 2026), the total exports of textiles and apparel (including handicrafts) stood at US32.63billion.TheReady-MadeGarments(RMG)category,withexportsofUS32.63billion.TheReady-MadeGarments(RMG)category,withexportsofUS 14.53 billion, accounted for the largest share (45%) of total exports, followed by Cotton Textiles (29%) (US9.36billion)andMan-MadeTextiles(159.36billion)andMan-MadeTextiles(15 4.82 billion). The textile industry in India is predicted to double its contribution to the GDP to approximately 5% by the end of this decade. India saw a 36.4% increase in industrial design applications, particularly in textiles, accessories, tools, machines, health, and cosmetics. The sector employs over 45 million people and produces approximately 22,000 million pieces of garments annually.

Threats:

Fluctuations in the prices of cotton, man-made fibres, dyes, and chemicals can increase production costs and adversely affect profit margins. Shortages of skilled labour, increasing wage levels, and changing labour regulations may affect productivity and operating costs. Higher electricity, fuel, and gas prices increase manufacturing costs, particularly in energy-intensive textile processes such as spinning, weaving, and dyeing. Ongoing geopolitical conflicts, trade disputes, sanctions, and disruptions in international shipping routes can affect supply chains, increase logistics costs, and delay deliveries.

a. Outlook

Textile business performance was satisfactory considering the near-term uncertainty for the financial year 2025-26, the Company is taking all efforts to improve sales to get more orders at competitive rates.

b. Challenges

Textile industry is always subject to facing crisis in a cyclical way and increased competition due to surplus capacity in the country has resulted in pressure on margins due to price under cutting in the market. Timely action is needed to overcome this situation by taking corrective and proactive steps, then and there. Rupee values in the global market has affected in the past few months thus making it extremely difficult to be competitive at a time when some of our major competing countries are depreciating against dollar and exporters are being badly affected. Indian textile industry needs to overcome some of the threats looming large in this front.

ii. REAL ESTATE BUSINESS

Industry Structure and Development

The real estate sector is one of the most globally recognized sectors. It comprises four sub-sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. It was also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. Bengaluru was expected to be the most favored property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.

Indian Economy

Real estate sector in India is expected to reach US1trillioninmarketsizeby2030,upfromUS1trillioninmarketsizeby2030,upfromUS 200 billion in 2021 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs.

The Indian real estate market is projected to experience a substantial increase, potentially reaching a value of US5-7trillionbytheyear2047,withthepossibilityofsurpassingUS5-7trillionbytheyear2047,withthepossibilityofsurpassingUS 10 trillion.

Average home prices rose by 13-15% in FY25, and theyre expected to climb another 3-5% in FY26, a sign that demand remains strong and developers continue to hold pricing power.

Indias physical retail landscape is poised for a substantial boost, with nearly 41 million sq. ft of retail developments set to be operational between 2024 and 2028 across the top 7 cities, encompassing projects in various stages from construction to planning.

Indian real estate sector has witnessed high growth in the recent times with rise in demand for office as well as residential spaces.

OPPORTUNITIES AND THREATS

Opportunities:

The Government has allowed FDI of up to 100% for townships and settlements development projects. Government of India along with the governments of respective States has taken several initiatives to encourage development in the sector. The Smart City Project, with a plan to build 100 smart cities, is a prime opportunity for real estate companies. The real estate sector shows promise with a projected 9.20% CAGR from 2023 to 2028. Private market investor, Blackstone, which has significantly invested in the Indian real estate sector (worth Rs. 3.80 lakh crore (US50billion),isseekingtoinvestanadditionalRs.1.70lakhcrore(US50billion),isseekingtoinvestanadditionalRs.1.70lakhcrore(US 22 billion) by 2030. Continued policy support for Affordable Rental Housing Complexes (ARHCs) aims to provide rental housing for urban migrants and workforce, expanding housing access beyond ownership models. Driven by increasing transparency and returns, theres a surge in private investment in the sector.

Threats:

As the real estate industry continues to evolve, the industry faces a multitude of threats and challenges. Rapid technological advancements, changing market trends, and regulatory complexities pose constant hurdles. Moreover, competition intensifies as new players enter the market. Navigating these obstacles requires strategic planning, innovation, and adaptability to ensure continued success in this dynamic landscape. Delays due to approvals, land acquisition issues, labour shortages, litigation, or supply chain disruptions can increase project costs and postpone revenue recognition. Rising borrowing costs can reduce home affordability and increase financing costs for developers.

a. Outlook

As the Indias property market has struggled in the year amid high bank interest rates and slowing economy but by introducing various measures, the government has given boost to the sector by inspiring confidence to the builders as well as the buyers. With a customer-centric approach, their new-age structures redefine the real estate landscape, exceeding conventional expectations.

b. Challenges

The major challenges to our business are constraints of funds, human resources, change in government policys and legal compliances.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place well established framework of internal control system which commensurate with the size and complexity of its business. The Company has an independent internal audit function covering major areas of operations and is carried out by external firms of Chartered Accountants engaged for this purpose.

STATEMENT OF CAUTION

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 and based on the fact that the Resolution Plan for the Company has been implemented. These statements have been based on current expectations and projections about future events. Wherever possible, all precautions have been taken to identify such statements by using words such as anticipate, estimate, expect, project, intend, plan, believe and words of similar substance in connection with any discussion of future performance. Such statements, however, involve known and unknown risks, significant changes in political and economic environment in India or key markets abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and other costs and may cause actual results to differ materially. There is no certainty that these forward-looking statements will be realised, although due care has been taken in making these assumptions. There is no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.