Aditya Birla Fashion & Retail Ltd Management Discussions

DESIGNER WEAR BRANDSSABYASACHI

Sabyasachi continued to strengthen its position as one of Indias leading designer wear businesses, built on a distinctive luxury proposition rooted in Indian craftsmanship, heritage and cultural storytelling. With revenue of over 600 crore, the brand has established itself as a scaled luxury platform across apparel, accessories and jewellery. Its design philosophy is anchored in timelessness, quality and provenance, allowing it to serve discerning customers across key Indian luxury markets as well as internationally through its presence in New York.

FY26 was a strong year for Sabyasachi, with double-digit growth across all categories. The brand continued to deepen its luxury positioning through a combination of high quality craft led product excellence, immersive retail experiences and powerful storytelling. The opening of the new Bangalore flagship store further strengthened its domestic retail presence, creating an elevated environment that brings together craftsmanship, service, design and brand experience in one of Indias most important luxury markets. Internationally, Sabyasachis global narrative continued to gain momentum through high-impact collaborations and visibility across leading cultural and luxury platforms. The brands participation in prominent art-led and fashion-led events, along with collaborations with global partners, reinforced its ability to reinterpret Indian design codes for an international audience.

Both domestically and internationally, the brand will continue to strengthen its positioning as a truly global luxury house, with a focus on sustained profitability, distinctive brand equity and growing international recognition.

TARUN TAHILIANI

Tarun Tahiliani continued to strengthen its distinctive "India Modern" design philosophy, seamlessly blending Indian craftsmanship, intricate couture detailing, fluid draped silhouettes and contemporary global aesthetics. Over the last three decades, the brand has established itself as one of Indias leading luxury fashion houses, with a strong presence across bridal wear, occasion wear, menswear, accessories and jewellery.

FY26 was a strong year for the brand with growth at 10%, with performance driven by the bridal and fashion categories, particularly lehengas and sarees. The brand continued to benefit from its strong equity in the luxury occasion wear segment and its ability to offer contemporary interpretations of traditional Indian attire.

FY26 was a strong year for the brand, with revenue growing by 10%, driven by healthy momentum across the bridal and fashion categories, particularly lehengas and sarees. The brand now operates 7 Couture stores and 4 OTT stores, enabling it to serve both bespoke luxury clients and consumers seeking ready-to-wear occasion fashion A significant milestone during the year was the celebration of 30 years of Tarun Tahiliani, marked through a series of initiatives and events that showcased the brands consistent commitment to innovation, craftsmanship and design excellence. These celebrations reinforced the brands legacy while highlighting its continued relevance among modern luxury consumers. Building on this legacy, the brands luxury pret offering, OTT, which was introduced in 2024, continued to gain strong momentum during the year.

Going forward, Tarun Tahiliani will focus on strengthening its leadership in luxury bridal and occasion wear while continuing to deepen the brands distinctive "India Modern" design philosophy. The brand will seek to scale its couture and ready-to-wear (OTT) offerings through selective retail expansion, sharper product innovation and stronger consumer engagement. Continued investments in brand storytelling, customer experience and disciplined execution are expected to support sustainable growth, improve profitability and enhance the brands relevance in India and select international markets.

House of Masaba is a young, differen-tiated lifestyle brand that has carved a unique position at the intersection of fashion, beauty and accessories through its distinctive Indian design language, bold prints and contemporary aesthetic.

FY26 was another solid year for the brand, delivering double-digit growth driven by continued momentum across fashion and beauty categories. The brands offine presence continued to strengthen, with 22 exclusive House of Masaba stores across key markets. Its beauty brand, LoveChild by Masaba, further expanded its reach through 100+ retail touchpoints, helping deepen consumer penetration and improve accessibility. Digital channels remain a key pillar of the business, contributing approximately 45% of overall sales, re-flecting the brands strong online community and ability to effectively engage consumers across platforms. House of Masaba also continued to enhance brand visibility and consumer engagement through a series of high-impact collaborations with celebrities, influenc-ers, and leading consumer brands.

Going forward, House of Masaba will focus on strengthening its position as a differentiated lifestyle brand at the intersection of fashion, beauty and accessories. The brand will seek to scale its fashion and beauty businesses through sharper product innovation, selective retail expansion and deeper digital engagement. Building on the momentum of LoveChild by Masaba, the business will continue to widen distribution, introduce new categories and strengthen consumer reach across online and offine channels.

HOUSE OF MASABA

SHANTNU & NIKHIL

Shantnu & Nikhil is a contemporary Indian luxury fashion brand renowned for its sharp tailoring, structured drapes, refined detailing and modern interpretation of Indian occasion and ceremonial wear. The brands portfolio spans multiple formats and consumer segments. Its flagship couture and ceremonial wear business caters to luxury consumers across mens and womens occasion wear, while S&N by Shantnu Nikhil offers a more accessible prestige-pr?t proposition. The portfolio is further complemented by SNCC (Shantnu Nikhil Cricket Club), which extends the brand into contemporary lifestyle fashion, enabling engagement with a younger and broader consumer base.

In FY26, the brand delivered steady performance, supported by product refreshes, enhanced storytelling, and stronger consumer engagement initiatives. The brand is now available through a network of 21 stores, providing a strong platform to serve consumers across key markets. Business continued focus on design innovation, collection launches, and brand-building efforts helped reinforce its positioning within the premium occasion wear segment.

Going forward, Shantnu & Nikhil will focus on strengthening its position in contemporary luxury occasion wear through continued design innovation, sharper brand storytelling and elevated consumer experiences. The brand will seek to scale its couture and ceremonial wear business while expanding the reach of S&N by Shantnu Nikhil and SNCC to engage a broader and younger consumer base. Selective retail expansion, continuous product innovation and deeper omnichannel engagement will remain key priorities, supporting sustainable growth, improved productivity and enhanced brand relevance across consumer segments.

PREMIUM ETHNIC WEAR BRANDS : TASVA

with modern design, superior fit and enhanced comfort.

FY26 was a strong year for the brand, characterized by robust growth, improving operating metrics and increasing consumer acceptance. TASVA delivered high double-digit like-to-like (L2L) growth, reflecting continued progress towards building a sustainable and profitable business. Consumer response remained encouraging across key wedding and festive categories, supported by improvements in product assortment, retail productivity and brand visibility. The brand also accelerated its retail expansion during the year, adding over 30 stores and reaching a network of 94 stores across the country. This expanded footprint has strengthened TASVAs presence in key wedding and occasion wear markets while improving accessibility for consumers across metros and emerging cities.

TASVA, launched in FY22 through a strategic partnership with Tarun Tahil-iani, marked the Companys entry into the premium mens ethnic wear segment. The brand offers a contemporary interpretation of Indian celebration wear across sherwanis, bandhgalas, kurta sets, dinner jackets and accessories, combining traditional craftsmanship

Going forward, TASVA will continue scaling its presence in high-potential wedding markets, deepening penetration in leading metros and further strengthening its positioning as a preferred destination for premium mens ethnic and celebration wear. The brand remains focused on driving profitable growth through a combination of network expansion, improved retail productivity, product innovation and disciplined execution

TCNS PORTFOLIO

TCNS portfolio is Your Companys womens ethnic wear platform, with a portfolio of brands including W, Aurelia, Wishful, Elleven and Folksong, each catering to distinct consumer needs across fusion wear, everyday ethnic wear, occasion wear, bottom wear, and craft-led Indian wear. Together, these brands address a broad spectrum of consumers and occasions, enabling TCNS to maintain a strong presence across the womens ethnic wear market.

The portfolio is well positioned to capitalize on evolving consumer preferences, with increasing demand for contemporary silhouettes, elevated design, premium product offerings, and stronger brand-led fashion propositions. Through its multi-brand architecture, TCNS serves consumers across value, premium, and occasion-led segments while balancing scale with differentiated brand positioning.

FY26 was a year of significant progress, with improvement in the quality of growth and profitability of the business. Key priorities included launch of renewed products, innovation of retail formats along with rationalisation of network, deeper consumer engagement, tighter inventory management and driving operating leverage across the platform. These efforts resulted in meaningful improvements in business fundamentals, with losses reducing by nearly 50% during the year on a YoY basis.

Improved store productivity, sharper merchandise planning, and enhanced consumer engagement drove healthy retail momentum across key markets. The business delivered a like-for-like retail growth of 10% in FY26.

The progress was supported by a series of strategic interventions focused on building a more scalable and profitable business model. A sharper product strategy, including the introduction of occasion wear and fusion-wear capsules, improved assortment relevance and supported stronger sell-through. At the same time, network optimisation and a more disciplined approach to profitable e-commerce growth helped reduce exposure to underperforming channels. While these measures moderated near-term growth, they significantly reduced losses and strengthened the foundation of the business. Together with the initiatives planned for the coming year, these actions are expected to accelerate revenue growth and drive further improvement in profitability.

The brand portfolio also witnessed meaningful strategic progress during the year. W continued to strengthen its fashion credentials and premium positioning through design-led collections and global fashion showcases. Aurelia refreshed its retail identity and consumer proposition to improve relevance and accessibility. The renewed proposition of Wishful as a standalone brand in the occasion wear segment supplemented the portfolio, enhancing its presence across celebration-led consumption occasions and broadening its appeal to more premium ethnic wear consumers.

Going forward, TCNS will focus on driving sustainable and profitable growth by accelerating omnichannel expansion, strengthening its digital ecosystem, and enhancing its product portfolio across premium, occasion, and fusion wear. The business will continue to invest in consumer-led innovation, data-driven merchandising and sharper brand storytelling to deepen customer engagement and improve conversion. Operational excellence, supply chain agility, and disciplined inventory management will remain key priorities, alongside leveraging synergies within the Aditya Birla Fashion portfolio. Together, these initiatives are expected to strengthen profitability, improve capital efficiency, and position TCNS for long-term leadership in Indias organised womens ethnic wear market.

JAYPORE

Jaypore occupies a distinctive position at the intersection of Indian craftsman-ship and contemporary living. The brand is dedicated to preserving, adapting, and reimagining Indias rich artisanal traditions for the modern consumer through a thoughtfully curated portfolio spanning apparel, sarees, menswear, jewellery, bags, footwear and lifestyle accessories.

Its design philosophy is rooted in premium natural fabrics, authentic craft techniques, meticulous workmanship, and timeless aesthetics. The product offering seamlessly addresses a range of occasions-from everyday dressing and workwear to festive celebrations and elevated occasion wear-making it particularly relevant for the modern professional consumer seeking understated elegance and cultural authenticity.

FY26 was another strong year for the brand, with revenue growing by more than 20% with its retail network expanding to 45 stores, including the addition of more than 15 stores during the year. This expansion was complemented by robust growth in the e-commerce business, supported by stronger omnichan-nel capabilities and a more seamless, integrated consumer experience across physical and digital touchpoints.

Jaypores brands salience will continue to be drivern by rich storytelling, and craft-first product approach continue to serve as key differentiators. As consumer interest in heritage-led design, artisanal products and contemporary ethnic wear continues to strengthen, the brand remains well positioned to deepen its leadership within the premium craft-inspired lifestyle and fashion segment.

LUXURY RETAIL

The Collective is Indias leading destination for super premium and luxury fashion, offering a curated portfolio of globally renowned brands under one roof, supported by a best-in-class retail experience. Its digital platform, thecol-lective.in, continues to strengthen its position as a leading online destination for luxury and bridge-to-luxury fashion, expanding the brands reach and accessibility among a growing base of digitally engaged consumers. The brand caters to discerning consumers seeking elevated fashion, contemporary luxury, and international design across apparel, footwear, accessories, and lifestyle categories.

FY26 was another year of sustainable and profitable growth, driven by sharper brand curation, improved merchandise productivity, and continued momentum across key mono-brand formats. The business further expanded its footprint by adding 8 new stores, taking the network to 49 stores across the country and strengthening its presence in premium consumption markets. The brand continues to invest in every aspect of the consumer journey-from discovery and styling assistance to personalized service and long-term relationship management. This customer-centric approach, combined with a curated brand portfolio and omnichannel capabilities, has helped reinforce loyalty and deepen engagement within the high-value segment.

Strategic investments in novelty-led fashion, womenswear, and accessories helped broaden the consumer proposition and unlock new growth opportunities. These initiatives, coupled with a continued focus on premiumization and differentiated product offerings, enhanced the brands relevance among both existing and new consumers.

Going forward, The Collective and the mono-brand portfolio will prioritise driving stronger like-to-like growth through sharper brand curation, improved merchandise productivity, higher store throughput and deeper customer engagement. The business will continue to strengthen its proposition across womenswear, accessories and novelty-led fashion, while enhancing omnichannel capabilities and delivering more personalised, high-touch consumer experiences. The format will build scale through retail expansion, differentiat-ed category play and enhanced brand assortments.

GALERIES LAFAYETTE

The launch of Galeries Lafayette in Mumbai in November 2025 has added a significant new growth platform to the portfolio, introducing a globally renowned luxury department store format to the Indian market.

Early consumer response has been encouraging, supported by curated in-store experiences, exclusive brand collaborations, and strong engagement from premium luxury consumers. During the year, the focus remained on building awareness, increasing footfalls, and establishing Galeries Lafayette as a differentiated destination for luxury fashion and lifestyle. E_orts were directed towards strengthening the brand portfolio through the addition of new and exclusive international brands, creating immersive retail storytelling, and hosting curated events and collaborations that enhanced customer engagement and discovery. These initiatives have helped

IN INDIA (MUMBAI)

drive consumer interest, improve walk-ins, and build relevance amongst Indias growing luxury customer base.

Going forward, the emphasis will remain on enriching the brand mix, elevating experiential retail, deepening partnerships with global luxury brands, and creating distinctive customer experiences that reinforce Galeries Lafayettes positioning as a premier luxury shopping destination in India.

TMRW: A PORTFOLIO OF DIGITAL-FIRST BRANDS

TMRW continues to build its leadership as a new-age, digital-first fashion platform; strategically aligned with the structural growth opportunity in Indias online fashion and D2C ecosystem. The Indian online fashion market is expected to witness strong double-digit growth over the coming years, driven by increasing smartphone penetration, rising internet adoption across Tier 2+ markets, creator-led commerce, social discovery, hyper-personalised customer experiences and growing consumer preference for digital-first brands. The expanding scale of online fashion, coupled with rising year-round demand from non-metro consumers, provides a significant runway for growth for TM-RWs portfolio of brands.

During the year, TMRW delivered strong growth across its portfolio, with revenue increasing by 34% year-on-year, driven by focused investments in product innovation, category expansion, customer acquisition and brand building.

While digital channels remain the primary growth engine, offine expansion accelerated during the year with the addition of over 60 stores, taking the network to nearly 120 stores.

Urbano and Nobero are strong examples of our ability to identify and scale digital-first brands. Both were acquired at relatively modest net revenue bases of approximately 10 crore and have since grown manifold through focused brand building, sharper execution, and the strength of the platforms capabilities. Today, Nobero has scaled to more than 200 crore in revenue, while Urbano has crossed 115 crore, demonstrating our ability to transform emerging brands into sizeable and sustainable growth businesses.

The platform continued to execute on its premiumisation strategy through the introduction of new collections and extensions across athleisure, travel wear, casualwear, winterwear, womens wear and non-apparel categories. These initiatives not only broadened consumer relevance and increased wallet share but also contributed to higher average selling prices and improved unit economics.

The business also made meaningful progress in strengthening its omni-channel presence. The growing physical footprint enhances brand visibility, improves customer engagement, expands access to newer markets and supports a more integrated omni-channel shopping experience.

During the year, TMRW secured a strategic equity investment of approximately 437 crore from ServiceNow Ventures, marking an important milestone in the platforms growth journey. Beyond providing growth capital, the partnership brings together TMRWs digital-first brand-building capabilities and ServiceNows AI and automation expertise. TMRW plans to leverage these capabilities to deepen consumer insights, accelerate speed-to-market, sharpen assortment planning and deliver more seamless experiences across digital and physical channels. The investment reinforces confidence in TMRWs technology-led operating model and will support the next phase of scalable and profitable growth across its portfolio.

Looking ahead, TMRW remains focused on scaling its portfolio through a combination of premiumisation, category adjacencies and deeper consumer engagement. The platform will continue to invest in high-margin growth opportunities, increase the contribution of owned channels including D2C platforms and Exclusive Brand Outlets (EBOs), and leverage data-driven consumer insights to improve customer retention and lifetime value. With a diversified portfolio of emerging brands, expanding om-ni-channel reach and a large addressable market opportunity, TMRW is well positioned to drive sustainable growth and create long-term value.

Your Company has evolved beyond a traditional apparel company into a portfolio of differentiated fashion businesses spanning Value & Masstige, Ethnic Wear, Digital-First Brands and Luxury. This portfolio approach enables the Company to participate across multiple consumer cohorts, occasions, price points and growth vectors, creating a balanced and resilient growth engine.

Each platform is aligned with a distinct structural opportunity within Indias fashion market. While Value & Masstige brands continue to address the countrys largest apparel consumption pools, Ethnic Wear is benefiting from increasing formalisation, Luxury is capturing rising afluence and premiumisation, and TMRW is building relevance among digitally native consumers and riding the rapid digital consumption wave. Together, these businesses position the Company to participate in some of the fastest-growing segments of Indian fashion & lifestyle space.

As Indian consumers increasingly seek higher-quality, differentiated products and aspirational brands, premiumisa-tion is emerging as a powerful driver of value creation in the fashion industry. Across categories, consumers are progressively shifting towards branded offerings that deliver superior design, craftsmanship, quality and a distinctive shopping experience.

Your Company is well positioned to benefit from this structural shift through its portfolio spanning premium, bridge-to-luxury and luxury segments. Within luxury retail, The Collective and Galeries Lafayette provide access to a curated portfolio of leading global brands and cater to the evolving preferences of a_uent Indian consumers. Complementing this, the Companys designer portfolio includes some of Indias most celebrated fashion houses, such as Sabyasachi, Tarun Tahiliani, House of Masaba, and Shantnu & Nikhil, with offerings across couture, bridal wear, occasion wear, ready-to-wear, jewellery, accessories and beauty.

Together, the luxury retail and designer businesses offer significant long-term growth potential, supported by rising afluence, increasing global exposure and a growing appetite for premium experiences. By strengthening brand desirability, expanding selectively across markets and categories, enhancing digital engagement and elevating the overall consumer experience, the Company aims to capture a greater share of premium discretionary spending while improving margins and building enduring brand equity.

The future of fashion retail lies in seam-lessly integrating physical and digital channels to meet consumers wherever they choose to shop. Your Company continues to strengthen its omni-channel ecosystem across businesses, including Pantaloons, its portfolio of TMRW brands, and its Luxury businesses, through a combination of exclusive brand outlets, large-format retail partnerships, digital marketplaces and direct-to-consumer platforms. The Company remains focused on expanding both reach and accessibility across India, supported by an increasing physical footprint and growing digital engagement. This integrated approach not only enhances consumer convenience and brand visibility but also strengthens customer acquisition, retention and lifetime value across the portfolio.

OWND and TMRW are emerging as important growth platforms for the Company. OWND is a retail-led format focused on Gen Z consumers, offering trend-driven fashion, an elevated in-store experience, and a differentiated brand proposition. TMRW, on the other hand, is a digital-first platform focused on building and scaling contemporary fashion brands through technology, data-driven execution, and omnichannel capabilities. Together, these platforms strengthen your Companys presence across fast-growing consumer segments and are expected to become meaningful contributors to its long-term growth.

The Company remains focused on accelerating the path to profitabil-ity across its emerging growth and turnaround businesses, including W, OWND, TASVA and Jaypore. Key priorities include improving like-to-like growth through better retail execution, sharper merchandise planning, stronger consumer engagement and enhanced product proposition, while driving operating leverage through scale. Continued focus on inventory productivity, sourcing efficiencies, om-nichannel expansion and tighter control over discretionary costs is expected to further reduce losses and strengthen the long-term earnings profile of these businesses.

Technology is increasingly becoming a key differentiator in fashion retail, influencing how products are designed, sourced, marketed and sold. Your Company continues to invest in digital capabilities, advanced analytics and artificial intelligence to enhance decision-making, improve consumer experiences and drive operational excellence across its businesses. At Pantaloons, these investments are strengthening merchandise planning, demand forecasting and retail operations, while across the portfolio of TMRW brands, technology is enabling more personalised consumer engagement, data-driven marketing and customer acquisition.

From personalised consumer engagement and demand forecasting to inventory optimisation, supply chain efficiency and smarter retail operations, technology is helping the Company become more agile, responsive and scalable across its portfolio. As the Company continues to expand its businesses, technology will remain a critical enabler of sustainable growth, operational excellence and long-term competitive advantage.

The combined impact of these strategic initiatives is expected to translate into stronger profitability, improved capital efficiency and enhanced cash generation across the portfolio. As businesses scale, store productivity improves and operating leverage strengthens, the Company expects to unlock greater ef-ficiencies across sourcing, supply chain, retail operations and shared platforms.

Together with disciplined capital allocation and a continued focus on execution, these initiatives are aimed at building businesses that are not only larger, but also more resilient, efficient and structurally profitable. This is expected to support sustainable growth, stronger returns and enduring value creation for shareholders.

Over the past few years, your Company has undertaken a comprehensive technology transformation journey to build a scalable, integrated and future-ready digital foundation for the business. During FY26, the Company completed several key initiatives across enterprise platforms, retail systems, omni-channel commerce, inventory visibility, workflow automation and cloud infrastructure, creating a modern technology architecture that supports its diversified portfolio spanning Value & Masstige, Ethnic Wear, TMRW and Luxury businesses.

With the core technology backbone now largely in place, your Company is increasingly focused on leveraging digital capabilities to drive business growth, enhance consumer experiences and improve operating efficiency. Across product development and merchandising, data, analytics and AI-led capabilities are enabling sharper trend sensing, demand forecasting, assortment planning and faster product lifecycle management. These capabilities support improved speed-to-market, greater product relevance and more informed decision-making across brands and categories.

Your Company continues to enhance its supply chain and planning capabilities through real-time inventory visibility, intelligent allocation, automated replenishment and RFID-enabled operations across its retail formats, improving inventory productivity, responsiveness and execution efficiency. These initiatives are helping improve product availability, optimise inventory productivity, reduce markdowns and create a more responsive supply chain capable of serving consumers seamlessly across physical and digital channels.

Technology is also playing an increasingly important role in enhancing store operations and strengthening omni-channel execution. Advanced analytics, omni-enabled fulfilment capabilities, assisted selling tools and digital retail solutions are improving store productivity, optimising inventory availability and enabling a more seamless shopping experience across physical and digital channels. As your Company continues to expand its retail network and digital presence, technology remains a critical enabler of an integrated, agile and customer-centric omnichannel ecosystem.

Consumer engagement remains at the centre of your Companys digital strategy. The Company continues to strengthen its direct-to-consumer ecosystem through investments in brand websites, mobile applications, marketplace integrations, loyalty platforms and customer relationship management capabilities. By building a more unified view of consumers across stores, websites, apps and marketplaces, the Company is enhancing personalisation, improving customer journeys and enabling more meaningful engagement across touchpoints.

Artificial intelligence and automation are expected to play an increasingly important role in the next phase of your Companys transformation journey. The Company is leveraging AI-driven insights, workflow automation and advanced analytics to improve decision-making, simplify processes and enhance productivity across functions. As these capabilities mature, they are expected to unlock new opportunities for efficiency, consumer engagement and business growth.

Looking ahead, your Companys focus will be on maximising the value of its technology investments by driving greater agility, scalability and consumer centricity across the enterprise. By combining strong digital capabilities with its portfolio of leading brands, extensive retail network and growing omni-channel presence, the Company is building a technology-enabled fashion ecosystem designed to support sustainable growth and long-term value creation.

As your Company enters its next phase of growth, it remains focused on building an agile, high-performing and future-ready organisation capable of winning in a dynamic marketplace. Following the successful stabilisation of the post-demerger operating model, the focus is now on enhancing organisational effectiveness, accelerating decision-making and strengthening collaboration across businesses to drive greater speed, productivity and execution excellence.

Your Company continues to unlock the benefits of its diversified portfolio by fostering greater collaboration across brands, formats and functions. Through shared capabilities, knowledge exchange and talent mobility, the Company aims to leverage the strength of its collective ecosystem while preserving the entrepreneurial focus of individual businesses. This approach is expected to create operational efficiencies, accelerate innovation and support sustainable value creation.

A strong leadership pipeline remains central to the Companys long-term success. During the year, your Company continued to invest in leadership development, succession planning and capability building to ensure that the organisation is equipped to navigate future opportunities and challenges. The Company remains committed to nurturing internal talent while selectively bringing in external expertise to strengthen critical capabilities and support future growth ambitions.

Digital enablement is increasingly becoming a key driver of organisational effectiveness. Building on the technology transformation undertaken over the past few years, your Company is embedding digital capabilities, data-driven decision-making, automation and AI-led tools across business processes. These initiatives are aimed at improving productivity, simplifying workflows, enhancing customer engagement and enabling more agile and informed decision-making across the enterprise.

The Company also remains focused on building a strong talent pipeline and developing world-class functional capabilities across retail, merchandising, design, supply chain, marketing, digital and corporate functions. Through structured learning interventions, leadership development programmes and enhanced career mobility opportunities, the Company is creating an environment that supports continuous growth and prepares employees for evolving business needs.

Performance excellence continues to be a core element of your Companys culture. The Company is focused on strengthening accountability, reinforcing meritocracy and fostering a culture of disciplined execution. By aligning goals, performance expectations and development opportunities, the Company seeks to create a high-performance organisation that consistently delivers superior outcomes for customers, shareholders and other stakeholders.

As competition for talent intensifies, your Company is committed to strengthening its position as an employer of choice. The Company continues to invest in enhancing the employee value proposition, creating meaningful career opportunities, strengthening leadership visibility and fostering an inclusive and engaging workplace culture. These efforts are aimed at attracting, developing and retaining high-quality talent across the organisation.

At the same time, your Company is leveraging digital platforms, analytics and automation to deliver a more seamless employee experience. By simplifying processes, improving access to information and enabling data-driven people decisions, the Company is enhancing productivity, strengthening governance and creating a more connected and responsive workplace for its employees.

At ABFRL, sustainability has been an integral part of the way we do business since our inception, guided by the Adi-tya Birla Groups core values and principles. As a consumer-centric organisation and a leader in the fashion and lifestyle industry, your company recognise that meeting evolving customer expectations goes beyond quality and style-it also requires creating products with lower environmental and social impact.

We believe that long-term economic growth can only be achieved when it is balanced with the well-being of people and the planet. With this conviction, we launched our structured sustainability programme, ReEarth for our Tomorrow, in 2013. Built around ten key focus areas-Energy, Carbon Footprint, Green Buildings, Water, Waste, WASH Pledge,

Safety, CSR, Packaging, and Sustainable Products. Your companys programme established clear targets, accountability, and timelines to drive measurable progress. ReEarth is more than a sustainability initiative; it is our commitment to giving back more to the ecosystem than we take from it.

Having achieved significant milestones under the first phase of ReEarth, we introduced ReEarth 2.0 in 2021.

This marked a strategic shift from a process-led approach to a product-led sustainability framework. With a strong focus on sustainable product design and development, consumer-centric innovation, and responsible supply chains, ReEarth 2.0 aligns sustainability more closely with our core business strategy and growth aspirations.

Our sustainability journey is supported by a robust governance framework that extends well beyond regulatory compliance. Sustainability performance and strategic priorities are regularly reviewed by the Management Committee, while the Risk Management and Sustainability Committee (RMSC) oversees sustainability-related risks, opportunities, and initiatives, ensuring a structured and comprehensive approach to sustainability and enterprise risk management.

We aim to minimise environmental impact across the value chain while reducing dependence on fossil fuel-based resources. During the year, we continued to strengthen our environmental stewardship. Our progress spans multiple sustainability dimensions, with 22% of water recycled within our facilities and installed 550 KWp roof top solar capacity. In occupational health and safety, we achieved zero fatalities and conducted 90,801man hours of safety training, reinforcing our commitment to a safe and healthy workplace. In product stewardship, 99.8% of our packaging portfolio was sustainable, while 95% of garments carried at least one sustainability attribute, reflecting our efforts to integrate sustainability into the products our customers choose every day.

We also actively collaborate with leading national and global sustainability platforms, industry bodies, and ESG benchmarks as these partnerships enable us to stay aligned with emerging sustainability trends, regulatory developments, and global best practices while contributing meaningfully to the broader sustainability agenda. Through these collaborations, we continue to enhance our capabilities, drive innovation, and create long-term value for all stakeholders.

Sustainability is evolving from a compliance and operational priority into a key driver of business growth, resilience, and long-term value creation. Aligned with the Aditya Birla Groups vision, the Company is advancing towards Sustainability 3.0, a transformation-focused approach that integrates sustainability deeper into strategy, innovation, products, and stakeholder engagement. Your companys sustainability journey has progressed through distinct phases. Sustainability 1.0 established the foundations through stronger compliance, environmental management, resource efficiency, and awareness-building, establishing the regulatory, operational, and cultural prerequisites for sustainable enterprise management. Sustainability 2.0 focused on scaling impact through robust ESG governance, renewable energy adoption, responsible sourcing, enhanced disclosures, and greater operational accountability. Integrating sustainability across operations and scaling impact. The focus shifted from a process-led approach to a product-led. Building on this progress, Sustainability 3.0 marks the next phase of transformation. As consumer expectations, climate imperatives, and regulatory requirements continue to evolve, the Company is embedding sustainability more deeply into business decision-making and brand ecosystems to create lasting value for stakeholders. The transition has been enabled by significant strides in governance, renewable energy adoption, responsible sourcing, safety performance, ESG disclosures, stakeholder engagement, and operational excellence. These advancements have strengthened organisational readiness to accelerate sustainability-led growth. Your companys Sustainability 3.0 framework is anchored on five strategic pillars:

- Sustainable Brands - Integrating sustainability into brand purpose, consumer engagement, circular business models, and brand performance.

- Product Stewardship - Promoting sustainable raw materials, responsible sourcing, circularity, supply-chain sustainability, and product transparency.

- Net Zero & Decarbonisation - Advancing science-aligned climate action and emissions reduction across operations and the value chain.

- Health, Safety & Well-being - Fostering a zero-harm culture through enhanced safety systems, workforce capability development, and inclusive workplaces.

- Social Impact - Driving inclusive growth through focused interventions in education, health and sanitation, sustainable livelihoods, water stewardship, digitalisation, and employee volunteering. Through this integrated approach, your Company aims to create measurable environmental and social value while strengthening competitiveness, resilience, and long-term stakeholder trust.

RISK MANAGEMENT

Your Company recognizes the importance of a robust governance structure and effective risk management in ensuring sustained performance and growth. An integrated approach has been adopted, combining the COSO framework with the Task Force on Climate-related Financial Disclosures (TCFD), to strike a balance between financial, social, and environmental priorities. This approach aligns risk management with performance and strategy, delivering long-term value to stakeholders. To oversee the identified risks and mitigation plans, a dedicated Risk Management and Sustainability Committee

(RMSC) has been established. The committee, supported by the Chief Risk Officer, Head of Sustainability, and Risk Management Committees, continuously monitors and evaluates risks from strategic, operational, financial, environmental, and compliance perspectives. Internal and external business environments are carefully monitored to identify potential risks and opportunities. Periodic assessments by the established committees and internal functions ensure ongoing evaluation of risks. Mitigation plans are implemented to manage key risks and minimize residual risks, safeguarding the companys interests. This proactive risk management approach provides the foundation for effective decision-making and resilience in the face of evolving challenges.

Risks

1. Macro-economic environment

Global economic uncertainty, inflationary pressures, elevated household indebtedness and fluctuations in consumer sentiment may impact discretionary spending. Prolonged demand softness could affect sales growth, profitability and inventory productivity.

Your Company seeks to mitigate this risk through presence in multiple consumer segments, categories and price points, supported by disciplined cost management and agile business planning. The Company continues to strengthen inventory management, working capital efficiency, sourcing flexibility and channel mix optimisation, enabling it to respond effectively to changing market conditions while supporting sustainable long-term growth.

Rapidly changing consumer preferences, evolving lifestyles and increasing digital influence continue to reshape fashion consumption patterns. Failure to anticipate these shifts could impact product relevance, customer engagement and market share.

Your Company continuously invests in consumer insights, product innovation, category expansion and digital capabilities to remain relevant across diverse consumer segments and occasions. The Company focuses on delivering a compelling value proposition through differentiated products, enhanced customer experiences and a balanced portfolio that caters to evolving consumer needs.

The increasing use of digital platforms, interconnected systems and consumer data heightens exposure to cybersecurity threats, data breaches and operational disruptions. Any sig-nificant incident could impact business continuity, stakeholder trust and brand reputation.

Your Company maintains a comprehensive cybersecurity and resilience framework supported by robust security controls, continuous monitoring, disaster recovery and business continuity processes. The Company also undertakes regular employee awareness programmes, vulnerability assessments and governance reviews to strengthen cyber preparedness and safeguard critical information assets.

Increasing competition for premium retail locations may constrain access to high-quality spaces and result in higher occupancy costs. This could affect expansion plans, store economics and profitability.

Your Company leverages its strong market presence and long-standing relationships with developers and landlords to secure strategic retail locations. The Company also focuses on improving store productivity, optimising space utilisation and enhancing the in-store experience to maximise returns on its retail investments.

As the company scales across multiple verticals-design, retail, marketing, e-commerce, and more-there is an increasing need for skilled talent. In Indias competitive fashion retail sector, attracting and retaining top professionals is a key challenge. Your Company continues to invest in leadership development, succession planning, capability building and employee engagement initiatives. The Company focuses on creating a strong employee value proposition, fostering internal mobility and building a high-performance culture to attract and retain talent across its businesses. Being part of the Aditya Birla Group further strengthens the Companys talent advantage, providing access to a diverse and experienced talent pool in the consumer segment.

TThe Indian fashion and lifestyle market remains highly competitive, with the presence of organized and unorganized domestic players, international brands, digital-first businesses and emerging direct-to-consumer brands. Increased competition may lead to pricing pressures, higher customer acquisition costs and potential market share erosion. Your Company focuses on strengthening brand equity, enhancing product innovation, expanding consumer reach and delivering differ-entiated experiences across channels. Its diversified portfolio, omni-channel presence and deep consumer understanding help maintain competitiveness and support long-term growth

TThe increasing reliance on digital platforms, automation, analytics and artificial intelligence presents risks relating to technology obsolescence, integration complexity, implementation challenges and evolving regulatory expectations. Failure to effectively adopt emerging technologies may impact operational efficiency and competitiveness.

Your Company adopts a disciplined approach to technology transformation, focusing on scalable platforms, phased implementation and strong governance. The Company continues to invest in digital capabilities, data quality, process integration and responsible AI adoption, ensuring that technology enhances business agility, productivity, decision-making and customer engagement while maintaining appropriate oversight and controls.

Your Companys growth strategy involves scaling multiple businesses, expanding its retail footprint, strengthening om-ni-channel capabilities, integrating new platforms and driving operational transformation across the organisation. Delays in execution, ine_ective implementation of strategic initiatives or an inability to realise expected benefits may impact growth, profitability and return on investment. Your Company mitigates this risk through a disciplined execution framework supported by clear governance structures, defined accountability, regular performance reviews and robust project management practices. The Company continues to strengthen organisational capabilities, leadership depth and cross-functional collaboration to ensure effective execution of strategic priorities while maintaining operational agility in a dynamic business environment.

Road Ahead

Your Company enters its next phase of growth with a stronger strategic focus, a diversified portfolio of businesses, and a clear ambition to build one of Indias most admired fashion and lifestyle companies. This next phase of growth will be anchored by a set of 4 focus pillars that will shape its trajectory.

Over the past few years, the Company has laid the foundations for future growth through portfolio expansion, capability building, technology transformation and the creation of multiple growth platforms. The focus now shifts towards unlocking the full potential of these investments through disciplined execution, profitable growth and sustained value creation.

The consumer will remain at the centre of your Companys growth agenda. Fashion consumers today expect greater choice, convenience, personalisation and seamless experiences across channels. The Companys strategy is therefore anchored around serving consumers across multiple occasions, lifestyles and price points through a portfolio of differentiated brands and formats. By strengthening its omni-channel ecosystem across stores, brand websites, marketplaces, mobile applications and emerging commerce channels, the company aims to create a connected and frictionless experience that allows consumers to engage with its brands wherever and however they choose.

A key priority over the coming years will be to strengthen the quality of growth across the portfolio. While continuing to pursue attractive growth opportunities across Value & Mass-tige, Ethnic Wear, TMRW and Luxury, the Company will remain equally focused on improving profitability, enhancing capital productivity and strengthening cash generation. The objective is to progressively build businesses that are not only larger in scale but also structurally stronger, with a clear pathway towards positive cash EBITDA, sustainable free cash flow generation and superior returns on capital over time.

The company will remain disciplined in capital allocation, prioritising opportunities that strengthen competitive advantage, improve profitability and create sustainable long-term value. Growth will be pursued with a clear focus on scalability, strategic fit and returns.

Looking ahead, your Companys success will be defined not only by the scale of its portfolio but by the strength of its execution and its ability to generate sustainable returns on investments. Supported by strong brands, a growing omni-channel distribution, technology-enabled capabilities and strength of its People, the Company is well positioned to deliver its next phase of growth along with driving sustainable value creation.