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Alok Industries Ltd Management Discussions

17.39
(-1.31%)
Aug 28, 2025|12:00:00 AM

Alok Industries Ltd Share Price Management Discussions

Alok Industries Limited ("Alok") is one of Indias large vertically integrated textile company with uniqueness of integration in both Cotton and Polyester segments. In the Cotton segment, the Company is integrated right from spinning to weaving, processing, finished fabrics, bedsheets, towels and garments. In case of polyester, the integration is from continuous polymerization where PTA and MEG are used to make melt to produce polyester chips to Partially Oriented Yarn (POY), Fully Drawn Yarn (FDY), Drawn Texturized Yarn (DTY) and Polyester Staple Fiber (PSF). Aloks plants are situated at Vapi (in Gujarat) and Silvassa (part of a Union Territory near Vapi) and the Company has a wide customer base across the world that includes global retail brands, textile importers, private labels, and domestic retailers, garment and textile manufacturers and traders. Alok, on July 17, 2017 underwent a corporate insolvency resolution process under section 31 of the Insolvency and Bankruptcy Code, 2016. Reliance Industries Limited (RIL) along with the JM Financial Asset Reconstruction Company Limited (JMFARC) and JMFARC – March 2018 – Trust submitted a Resolution plan that was approved by the Honble National Company Law Tribunal, Ahmedabad Bench (Approved Resolution Plan) vide its order dated March 8, 2019. The implementation of the Approved Resolution Plan was concluded with the re-constitution of the Board of Directors of the Company on September 14, 2020.

The disturbance in the global geo-political scenario continues to disrupt some of the export markets of western countries. This in turn disrupts the local demand – supply situation too and is adversely affecting the Companys sales. Due to the economic downturn in neighboring countries with large garment manufacturing set-ups, the Company is cautious in expanding its business with them on account of the business risks involved. All these factors continued to have an adverse effect on the Company as a whole and more specifically in the downstream businesses of bedding, towels, and apparel fabrics. The Company reported a positive EBITDA of Rs. 136.69 crore in FY25 as compared to EBITDA of Rs. 84.89 crore in FY24. From March 2024, the Company has shifted its polyester business to Job work model due to which the overall sales for the Company declined to Rs. 3,556.59 crore for the year ended 31st March 2025 as compared to sales of Rs. 5,356.35 crore in the previous year. The local sales declined from Rs. 4,248.41 crore in FY 23-24 to Rs. 2,712.72 crore in FY 24-25 and export sales declined from Rs. 1107.93 crore in FY 23-24 to Rs. 843.87 crore in FY 24-25.

The strong background and support of the present promoters and the synergies in group operations is enabling the Company to sustain in the challenging environment. The Companys standalone rating continued to be CARE AA+ representing strong business fundamentals.

The detailed analysis of the performance of the Company has been given in Section 4 "Financial Performance".

1. Economic Overview 1.1 Global Economic Overview

The global economy demonstrated resilience in 2024, stabilizing at a 3.2% growth rate, aligning with 2023 figures despite prevailing macroeconomic challenges. Emerging economies faced a slowdown, with growth dipping from 4.4% in 2023 to 4.1% in 2024, largely due to prolonged monetary tightening and weakened consumer demand. While inflationary pressures have eased, geopolitical risks, trade realignments, and sectoral disruptions continue to shape the near-term outlook. With financial conditions stabilizing and supply chain resilience improving, 2025 presents a cautiously optimistic trajectory, albeit with persistent risks requiring strategic adaptability.

Figure 1: GDP Growth Rates

4.4%

Source: supply International Monetary Fund

1.2 India Economic Overview

Despite global macroeconomic headwinds, Indias economy has remained resilient, consistently outperforming the global average, driven by robust domestic demand, structural reforms, and strong policy measures. The country has managed economic stability even in the face of external challenges, including supply chain disruptions and inflationary pressures.

In 2023-24, Indias real GDP is estimated at Rs. 172.90 lakh crore (US$ 2 trillion), reflecting the sustained expansion of key sectors such as manufacturing, services, and infrastructure. Meanwhile, the nominal GDP has reached Rs. 293.9 lakh crore (US$ 3.5 trillion), highlighting the countrys growing economic influence on the global stage. This growth trajectory, with a strong 9.2% expansion in 2023-24 compared to 7% in the previous year, underscores Indias ability to navigate global uncertainties while maintaining steady momentum. Looking ahead, the economy is expected to build further on this foundation, supported by increasing investments, digital transformation, and a favorable demographic dividend.

Figure 2: Indias GDP Growth Rate (at constant prices)

As of September 2024, Indias overall Index of Industrial Production (IIP) indicated stabilization in manufacturing, despite persistent challenges in global trade. The textile and apparel sectors, however, witnessed a notable slowdown, with textile manufacturing increasing only marginally from 108.4 to 109.6 in September 2024, while apparel manufacturing remained same from 102.4 to 102.5 in the same period. This reflects reduced export demand from key markets like the US and Europe, where brands focused on inventory rationalization amid economic uncertainty.

Domestically, affordable and mass-market apparel segments showed resilience, but the premium and discretionary categories struggled due to cautious consumer spending. Elevated raw material costs, labor expenses, and energy prices further constrained profitability for manufacturers.

Source: pib.gov.in *Revised estimates

Despite these setbacks, industry stakeholders remain optimistic about a gradual recovery in 2024-25, driven by government tax incentives, infrastructure investments, and emerging sourcing opportunities under the "China Plus One" strategy of global buyers. Manufacturers are increasingly focusing on automation, digital supply chains, and sustainable production practices to enhance competitiveness. With inflationary pressures easing and global demand expected to stabilize, textile and apparel production is likely to witness a moderate revival in the coming year.

2. Textile & Apparel Industry Overview 2.1 Global Apparel Market Overview

The global apparel market is estimated at US$ 1.8 trillion in 2024, growing by 7% compared to 2023. While economic uncertainties and inflationary pressures affected consumption patterns, industry has shown resilience, with demand rebounding in key markets. The United States remains the largest apparel market, expected to reach US$ 288 billion in 2024, followed by EU-27 (US$ 316 billion) and China (US$ 187 billion). India, one of the fastest-growing apparel markets, is projected to reach US$ 108 billion in 2024, growing at a CAGR of 8% until 2030. By 2030, the global apparel industry is expected to reach US$ 2.3 trillion, with Indias market expanding to US$ 175 billion, driven by economic growth, rising disposable incomes, and evolving consumer preferences.

Table 1: Global Apparel Market Size (Value: US$ Bn)

Region

2019 2021 2022 2023 2024 (E) CAGR 2019-24 CAGR 2024-30 (P) 2030 (P)

EU-27

300 297 304 315 316 1% 1% 345

United States

240 260 272 281 288 4% 3% 345

China

184 219 173 190 187 0.3%* 5% 250

India

78 80 92 102 108 7% 8% 175

UK

40 34 43 46 52 5% 3% 62

Japan

101 78 66 61 55 -11%* 1% 60

Brazil

48 39 39 49 51 1% 2% 57

Canada

23 22 19 27 25 2% 2% 28

RoW

613 438 646 633 734 4% 5% 978

World

1,628 1,468 1,655 1,703 1,817 2% 4% 2,300

The near-term outlook for global textile industry is currently uncerta_n largely due to uncerta_nty around US tar_ff pol_cy_ U_S_ tar_ffs cont_nue to create uncerta_nty _n the global market outlook, affect_ng trade flows and buyer sent_ment_ The U_S_ has recently announced rec_procal tar_ffs on _mports from mult_ple countr_es, a_m_ng to balance percefived trade _nequfit_es_ Econom_c analysts pred_ct_ The U_S_ rec_procal tar_ffs are set to be _ntroduced _n phases, beg_nn_ng wfith a unfiversal 10% _mport duty on all goods enter_ng the U_S_ Th_s wfill be followed by country-spec__c tar_ffs, _nclud_ng a 26% tar_ff on _mports from Ind_a_ These measures could s_gn__cantly _mpact global trade flows_ Reserve Bank has cut Ind_as growth forecast to 6_5% from 6_7% est_mated earl_er for the current financ_al year on account of _mpact of global trade and pol_cy uncerta_nt_es_ Whfile currently on hold, Ind_a faces a 26% tar_ff, wh_ch _s lower than the h_gher tar_ffs _mposed on Bangladesh (34%) and V_etnam (41%), two key competfitors _n the textfile and apparel sector_ Th_s could _mprove Ind_as relatfive competfitfiveness _n the long run, as buyers may recons_der sourc_ng strateg_es_ Whfile th_s development may benefit Ind_a _n the long run, fit _s stfill _n a nascent stage_ Trade negotfiat_ons are expected, and the final outcome rema_ns uncerta_n and h_ghly unpred_ctable_ The US apparel store sales showed no change _n 2024 YoY_ S_m_larly, cloth_ng and accessor_es e-commerce sales dropped by 2% _n 2024 compared to last year_ Further ma5orfity of the brands have further _ntens__ed focus on c_rcularfity and traceab_lfity, drfiven by str_cter EU and US regulat_ons_ Investments _n recycl_ng and _nnovat_on are ga_n_ng momentum as sustaffnab_lfity takes center stage_ ompan_es are focus_ng on c_rcular economy pr_nc_ples, advanced textfile recycl_ng technolog_es, and product _nnovat_on to d_fferentfiate themselves _n an evolv_ng market_ As _nflat_on stab_l_zes and global _nterest rates ease, consumer demand _s expected to recover further_ Ind_a rema_ns a key focus area for global retafilers and _nvestors, gfiven fits strong domest_c market and _ncreas_ng manufactur_ng capab_lfit_es_

2_2 Global Textfile & Apparel Trade

In 2024, the global textfile and apparel (T&A) trade was est_mated to be around US$ 875 bfill_on, grow_ng at a 1% A_R s_nce 2019_ Whfile the findustry faced headwfinds _n recent years due to _nflat_onary pressures and economic slowdowns in key consumer markets, it showed resilience and gradual recovery. With macroeconomic conditions stabilizing, demand in major markets is expected to strengthen, setting the stage for renewed growth in the coming years.

Apparel remained the most dominant segment, accounting for approximately 60% of total trade value in 2024, highlighting the continued strong demand for finished garments over raw materials and textiles.

Figure 4: Global T&A Trade (Value: US$ Bn)

From an export perspective, China retained its position as the largest global exporter, contributing US$ 296 billion in textile and apparel shipments, commanding a 34% share of global trade. The European Union (Extra EU-27) ranked second with an 8% share, valued at US$ 66 billion, followed by Vietnam at US$ 44 billion (5%), surpassing Bangladesh and India. Bangladesh and India followed closely with exports of US$ 42 billion and US$ 37 billion, respectively. Turkey, USA and the rest of the world (RoW) contributed to the remaining global trade.

Despite short-term volatility, the industry is expected to maintain an upward trajectory in the coming years, with global trade projected to reach US$ 1,200 billion by 2030.

USA Imports

In 2024, the USAs T&A imports saw a marginal recovery compared to 2023 but remained below the 2022 peak. Total T&A imports stood at US$ 113 Bn, reflecting a -2.9% decline from the 2022 level. Imports from China continued their downward trajectory, declining to US$

28 Bn (a -20% drop from 2022), as brands further diversified their sourcing under the China+1 strategy. Vietnams exports grew to US$ 16 Bn, recovering slightly from 2023 levels, while Indias exports reached US$ 10 Bn, remaining stable compared to 2022. Bangladeshs exports to the USA also declined to US$ 7 Bn, reflecting weaker apparel demand. Other sourcing destinations such as Mexico, Indonesia, Cambodia, and Pakistan maintained steady contributions, but overall trade dynamics continue to be influenced by macroeconomic uncertainties and shifting global supply chain strategies.

Figure 5: Major T&A Suppliers to the USA (Value: US$ Bn.)

2019 2023 2024

EU Imports

In 2024, the EUs total textile and apparel (T&A) imports declined to $127 billion from $138 billion in 2022, marking an 8% contraction amid geopolitical uncertainties and shifting trade patterns. China strengthened its position, increasing its share from 31.2% to 35.4% as exports rose from $43 billion to $45 billion. In contrast, Germanys share fell from 15.9% to 15.7%, with exports declining 9% to $20 billion, while Bangladesh saw a sharper drop of 17%, reducing its share from 13.0% to 11.8%.

Italy and Turkey remained stable, while Frances exports fell 33% to $2 billion, signaling weakening intra-EU trade. These shifts highlight the EUs evolving sourcing landscape, with China gaining ground as traditional suppliers face competitiveness challenges.

Figure 6: Major T&A Suppliers to the EU (Value: US$ Bn)

Source: Eurostat & Wazir Analysis

2.3 Indian Textile and Apparel Industry

Indias textile and apparel market is estimated to be worth US$ 184 Bn in 2024-25. This market has demonstrated consistent growth over time, driven primarily by strong domestic demand. Anticipated future growth is projected to be sustained by ongoing expansion in the domestic market and significant potential for growth in exports.

Figure 7: Indias T&A Market Size

Apparel leads the sector, contributing US$ 108 billion to domestic sales and US$ 16 billion to exports, reinforcing its position as the largest category.

Technical textiles, valued at US$ 28 billion, are gaining momentum, driven by increasing applications across industries such as automotive, healthcare, and infrastructure. Home textiles (US$ 11 billion) continue to be a stable contributor, catering to both domestic and international markets. Meanwhile, textile exports stand at US$ 21 billion, showing Indias strong presence in global textile trade.

While exports remain a smaller portion (US$ 37 billion) of Indias T&A economy, they play a crucial role in the countrys positioning as a key global supplier. With rising demand for functional and sustainable textiles, Indias focus on innovation, value-added products, and expanding trade partnerships will be pivotal for future growth.

2.4 Indias Domestic Market Scenario

Indias domestic textile and apparel (T&A) market has expanded from US$ 106 billion in 2019-20 to an estimated US$ 147 billion in 2024-25, reflecting a CAGR of 7%. Apparel dominates, contributing US$ 108 billion, while home textiles (US$ 11 billion) and technical textiles (US$ 28 billion) are steadily growing.

Source: Wazir Analysis

The domestic T&A market is expected to grow at a CAGR of 9% from 2024-25 onwards and reach US$250 Bn by 2030-31. Technical textiles are expected to be the fastest-growing segment, reaching US$ 54 billion by 2030-31, while home textiles will expand to US$ 16 billion. Apparel will remain the largest segment at

US$ 180 billion, driven by rising consumer demand, increasing urbanization, and government initiatives supporting domestic manufacturing and innovation.

2.5 Indias Exports Scenario

Indias textile and apparel (T&A) exports have fluctuated over the years, reaching an estimated US$ 37 billion in 2024-25, recovering from US$ 35 billion in 2023-24. Apparel remains the largest export segment, contributing US$ 16 billion, followed by fabric (US$ 6 billion), yarn (US$ 6 billion), and home textiles (US$ 6 billion). The export market saw a peak of US$ 43 billion in 2021-22, driven by post-pandemic demand recovery, before stabilizing. Diversification of exports, enhanced global competitiveness, and increased value-added products will be crucial for sustained growth in the coming years.

2.6 Indias Imports Scenario

Indias textile and apparel imports have grown at a modest CAGR of 1% from 2019-20, reaching US$ 9.2 billion in 2024-25. Fabric holds the largest share of imports at approximately 30%, followed by fiber at 25%. A significant portion of these imports includes synthetic fiber, yarn, and fabric, which are not widely produced in India.

Additionally, low-cost imports from China contribute to the overall volume. With increasing domestic demand and a growing textile manufacturing ecosystem, imports are expected to rise in the future.

3. Alok Business Segments

Alok Industries has a strong presence in both the Cotton and Polyester segments. In the Cotton segment, the Company is integrated from spinning to weaving, processing, finished fabrics, bedsheets, towels and garments. In case of Polyester too, the Company is fully integrated starting from continuous polymerization plant to the production of chips, POY, FDY, DTY and PSF.

The Companys vertically integrated facilities and flexibility of operations enables it to produce cotton and cotton blended fabrics in various counts and construction and a wide range of finishes. The Companys global scale integrated plants, modern manufacturing flexibility, product development team and competent marketing force facilitates a deep understanding of customer needs and its satisfactory fulfilment.

The Company has a large customer base comprising of domestic and overseas retailers, brands, and garment exporters in India and converter countries (countries which primarily do garment manufacturing like Bangladesh, Vietnam, Sri Lanka) who are vendors to major international labels. This product, customer and market diversification enables risk mitigation and places the Company at a competitive advantage over other players in the industry. Alok has also ensured that its target market is a diverse mix of the international market, garment export trade and domestic market.

The company operates under the following four divisions:

• Spinning Division

• Polyester Division

• Home Textiles Division

• Apparel & Fabric Division

3.1. Spinning Business Outlook

Indias yarn exports for the first nine months of 2024-25 declined by 10% year-on-year, amounting to US$ 3.2 billion. One of the key challenges faced by the spinning sector in India is the higher cost of cotton compared to international prices which has put high pressure on margins in the spinning sector and demand for Indian commodity spun yarn in export markets. With changing market dynamics going forward the spinning units with large scale will have higher advantage in terms of managing costs and remaining competitive.

Alok, a key player in the Indian spinning industry, is known for its large scale, advanced infrastructure and strong emphasis on research and product development. Its spinning facilities are located in Silvassa, with a significant portion of its yarn—approximately 55% to 60%—being internally consumed across its woven fabrics, knitted fabrics, bedding, and terry towel divisions.

3.2. Polyester Business Outlook

Despite challenges in the export market, Indias polyester exports have grown. In 2024, Indias polyester exports reached approximately US$ 1 billion, comprising

US$ 0.8 billion in filament yarn and US$ 0.3 billion in staple fiber, reflecting a 13% growth compared to 2023. Exports are expected to rise in tandem with increasing global demand. The domestic market for polyester-based products is also expanding, creating significant growth potential for polyester yarn and fiber. Growing categories like activewear, womens western wear, innerwear etc. constitute large portion of polyester yarns and will further increase demand for polyester. Further, the Government of Indias Production Linked Incentive (PLI) scheme is also expected to boost the production of man-made fiber-based textiles and apparel.

However, the Company has shifted its major polyester business to Job work model from March 2024.

3.3. Home Textiles Business Outlook

India has established itself as a prominent manufacturer of home textiles on the global stage, second only to China, holding a market share of approximately 11% in the global home textile trade. The Indian home textiles exports stood at around US$ 6.4 Bn. in 2024 increasing significantly by 12% compared to 2023. This was primarily driven by return of demand in major markets and global geo-political factors favoring India. The exports are further expected to increase as the global economy stabilizes. India exports its home textiles products primarily to the EU and USA, which constitute more than 70% of Indias home textiles export markets. India has a strong manufacturing ecosystem for home textiles with the presence of large and integrated players with strong capabilities which will serve as a huge advantage in the post-covid world, in catering to global market requirements. Alok is amongst one of the largest home textiles manufacturers/ exporters in India and has a large capacity of manufacturing in bedding as well as terry towel. Its weaving manufacturing facility & major stitching unit for bedding is at Silvassa and fabric processing is at Vapi. The entire terry-towel manufacturing is at Vapi. At Heimtextil 2025, Alok reinforced its leadership in this segment by unveiling its latest innovations in bed and bath linens, emphasizing sustainability and performance. Key introductions included:

• Recron Performance Fiber-based collections, co-developed with Reliance Industries, engineered for functionality and durability.

• Eco-friendly innovations such as ultra-soft, PVA-free towels, recycled polyester blends, and 100% organic cotton-based products.

• The launch of Kasturi Cotton-based towels, reinforcing Indias domestic cotton value chain while catering to global premium segments.

The major export market for home textile products for the Company is USA, which is the largest consuming Centre for home products in the world. The other export destinations include European countries and Australia. Alok has also inaugurated a flagship 17,600 sq. ft. showroom at New York, strengthening its global presence and customer engagement. Serving as a strategic hub during the Spring New York Home Textiles Market, space showcases Aloks innovative, sustainable collections and supports collaborative product development with key international partners.

3.4. Fabrics & Apparel Business Outlook

In 2024, India exported fabric worth US$ 4.4 Bn, comprising US$ 3.9 Bn woven fabric and US$ 0.5 Bn knitted fabric. Fabric exports increased by 2% in 2024 compared to 2023. Since 2010, the global apparel trade has demonstrated consistent growth, with a CAGR of 3%, reaching US$ 515 Bn in 2023. The global apparel trade has reached pre-pandemic levels in 2024 and is estimated at US$ 515 Bn.

In 2024, India witnessed resurgence in apparel exports in line with increase in global apparel exports. Indias apparel exports increased by 8% in 2024 to reach US$ 15.7 Bn. The increase is largely attributed to the prevailing global market conditions which have favored India and going forward as the market demand improves Indias apparel exports are also expected to grow. Given that buyers are looking for alternative to China, and now Bangladesh as well, India has an immense opportunity to tap the opportunity and emerge as a leading exporter of apparel. With the world increasingly considering India as an alternative to China, the country is presented with a significant opening to expand its global market presence. Besides the export market, the domestic apparel market also offers a huge opportunity for growth for the apparel segment. The domestic apparel market is expected to grow at 9% CAGR and reach US$ 180 Bn by 2030 from the current level of US$ 108 Bn.

4. Financial Performance Standalone

During the current financial year, the market situation all around and across product segments was very challenging. The adverse global economic and the geo-political conditions due to higher inflation, interest rates and conflicts between Israel – Palestine / Russia – Ukraine has had negative impact on the entire Textile chain in the world. Its export sales and domestic sales saw a drop due to the above factors. A lot of the products supplied by Alok in the domestic market are used as an input for export of the end products. The Company has shifted its polyester business to a job work model from March 2024.

Embroidery and Garment segments of Apparel Fabric business were adversely impacted. Alok witnessed a drop of around 16% and 27% in the sales revenue as compared to the previous year in the Embroidery and Garment segments respectively. The overall sales revenue in Apparel Fabric business increased by 9%. The local sales declined from Rs. 4,248.41 crore in FY 23-24 to Rs. 2,712.72 crore in FY 24-25 and export sales declined from Rs. 1107.93 crore in FY 23-24 to Rs. 843.87 crore in FY 24-25.

The Home Textile business was adversely impacted and reduced by 7% and Cotton Yarn Spinning business reduced by 18%.

The Company reported EBIDTA at Rs. 136.69 crore (including exceptional gain on sale of fixed asset) for the year as compared to an EBIDTA of Rs. 84.89 crore in FY 24. Table 2 gives the summarized profit and loss statement of the Company in the current financial year compared to the previous financial year. The brief analysis of the stand-alone results is given in the table below: Table 2: Summarized Profit and Loss Account (stand-alone)

(Rs. in crore)

PROFIT & LOSS ACCOUNT

31st March 2025 31st March 2024
Local Sales 2,712.72 4,248.42
Export Sales 843.87 1,107.93

NET SALES

3,556.59 5,356.35
Other Income 72.72 18.84

TOTAL INCOME

3,629.31 5,375.19
Material Costs 1,917.18 3,686.54
Employee Benefits 434.90 412.55

PROFIT & LOSS ACCOUNT

31st March 2025 31st March 2024

Other Expenses - without provision

1,220.92 1,179.22

TOTAL EXPENSES

3,573.00 5,278.31

OPERATING EBIDTA before provisions

56.31 96.88

Other Expenses – provisions

13.76 11.99

Exceptional Gain on sale of fixed assets

94.14 -

OPERATING EBIDTA after provisions

136.69 84.89
Depreciation (292.04) (316.98)

OPERATING EBIT

(155.35) (232.09)
Interest & Finance Costs (613.46) (581.62)
(Loss) / Profit Before Tax (768.81) (813.71)
Add / (Less): Provision for - -
Taxes

PROFIT AFTER TAX

(768.81) (813.71)
Other Comprehensive 0.79 (0.41)
Income

Total Comprehensive

(768.02) (814.12)

Income

Profit and Loss Analysis

Net Sales for the year were Rs. 3,556.59 crore comprising of local sales of Rs. 2,712.72 crore and export sales of Rs. 843.87 crore (previous year sales

Rs. 5,356.35 crore: local Rs. 4,248.42 crore and export

Rs. 1,107.93 crore). From March 2024, the Company has shifted its polyester business to Job work model due to which the overall sales for the Company declined.

Operating PBT and PAT. The Profit Before Tax for the year was a loss of Rs. 768.81 crore as compared to loss of Rs. 813.71 crore in the previous year. Since there was no provision for Tax in both the years, the Loss after Tax for the year was Rs. 768.81 crore as compared to loss of Rs. 813.71 crore in the previous year.

Other Comprehensive Income for the year was positive of Rs. 0.79 crore. as compared to negative of

Rs. 0.41 crore in the previous year.

Net (Loss) / Profit After Other Comprehensive Income was a loss of Rs. 768.02 crore in the current year against a loss of Rs. 814.12 crore in the previous year.

Key Ratios

Table 3 gives the Key ratios of the Company (stand-alone)

Table 3: Key Ratios

(Rs. in crore)

Sr. No.

Particulars

31st March 2025 31st March 2024
1 Debtors Turnover – 43 29
Days
2 Inventory Turnover – 81 59
Days
3 Interest Coverage 0.09 0.17
4 Current Ratio 1.34 1.92
5a Debt – Equity (0.18) (0.18)
5b Debt – Equity (quasi) 1.70 1.16
6a Operating EBIDTA Margin (%) without provisions 1.58% 1.81%
6b Operating EBIDTA Margin (%) after provisions 1.20% 1.58%
7 Net Profit Margin (%) -21.62% -15.19%

Comments on Ratios:

Debtors Turnover Days: Debtor turnover at 43 days increased during the year as compared to previous year debtor turnover days of 29 days. In absolute terms, debtors as on 31 March 2025 reduced to

Rs. 421.67 crore as compared to Rs. 424.52 crore as on 31 March 2024.

Inventory Turnover Days: Inventory turnover days at 81 days also increased during the current year as compared inventory turnover days of 59 days in the previous year. In absolute terms inventory decreased to Rs. 787.10 Crs. as compared to Rs. 858.54 crore in the previous year.

Interest Coverage Ratio: Our interest outgo for the year was Rs. 613.46 crore (previous year interest

Rs. 581.62 crore). Based on EBIDTA for the year before exceptional items and provisions of Rs. 56.31 crore (previous year Rs. 96.88 crore), the interest coverage ratio is 0.09, as compared to 0.17 times in the previous year.

Current Ratio: The current ratio for FY 25 was 1.34 times as compared to 1.92 times in the previous year. The total current assets for the year were

Rs. 1,384.02 crore (previous year Rs. 1,651.54 crore).

The installment of term loan due within a year is 43.75 crore (Rs. NIL in the previous year). The current liabilities for the year increased to Rs. 1,033.32 crore, including term loan due within a year, (Rs. 857.42 crore in the previous year).

Debt/ Equity Ratio: The Net worth of the Company in FY 25 was negative at Rs. 18,902.86 crore (Previous year negative net worth of Rs. 18,134.84 crore). The rise in negative net worth during the year was due to a loss of Rs. 768.02 crore (previous year loss of

Rs. 814.12 crore). The outside long-term debt of the Company as on 31st March 2025 net of cash and bank balances was Rs. 3,446.58 crore (Previous year Rs. 3,246.70 crore). The Debt/ Equity ratio for the year was negative 0.18 which is same as the previous year.

Quasi- Debt/ Equity Ratio: The quasi net- worth of the Company as on 31 March 2025 was Rs. 2,023.67 crore (previous year 2,790.54 crore). The same is arrived at by adding Rs. 17,384.02 crore (previous year

Rs. 17,384.02 crore) interest free long-term loans from the promoters and long-term preference shares of Rs. 3,542.51 crore (Previous year Rs. 3,541.36 crore) subscribed by the promoters to the equity & reserves. Based on this, the quasi debt/ equity ratio as on 31 March 2025 was 1.70 as compared to 1.16 as on 31 March 2024.

Operating EBITDA before considering Provisioning: Operating Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) without considering provisions for the year was profit of Rs. 56.31 crore which is 1.58% to sales (previous year Rs. 96.88 crore 1.81% to sales).

Operating EBITDA after considering Provisioning and exceptional gains: Operating Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) for the year is profit of Rs. 136.69 crore (previous year Rs. 84.89 crore) after considering provisioning of Rs. 13.76 crore (previous year provisioning of Rs. 11.99 crore) and an exceptional gain of Rs. 94.14 crore (previous year Nil). As a percentage of sales, operating EBITDA is at 3.84% (previous year positive 1.58%).

Net (Loss) / Profit After Tax: Net Loss After Tax is Rs. 768.81 crore. in the current year (previous year net loss of Rs. 813.71 crore). The loss is due to depreciation for the year of Rs. 292.04 crore (previous year Rs. 316.98 crore) and interest cost of Rs. 613.46 crore (previous year Rs. 581.62 crore). The Net profit

Margin for the year is negative 21.62% as compared to negative 15.19 % in the previous year.

Cash Flows

Table 4 gives the abridged cash flow statement of the Company.

Table 4: Summarized Cash Flow Statement

(Rs. in crore)

Particulars

31st March 31st March
2025 2024
Net cash (used in) / generated 112.37 (1,154.77)
from operating activities
Net cash (used in) / generated 271.57 (177.89)
from investing activities
Net cash (used in) / generated (380.43) 1,340.08
from financing activities

Net (Decrease)/Increase in

3.51 7.42

Cash and Cash equivalents

Cash and Cash equivalents

as at year end

At the beginning of the year 8.21 0.79
At the end of the year 11.72 8.21

Net (Decrease)/Increase in

3.51 7.42

Cash and Cash equivalents

Comments on Cash Flow: a. Cash Flow from Operating Activities: During the Financial Year, Company generated negative Operating Cash flow of Rs. 4.87 crore (previous year positive Rs. 94.54 crore) before working capital changes). The changes in working capital by way of reduction during the year were Rs. 144.47 crore (Negative Rs. 1246.37 crore in the previous year).

After considering Income tax of Rs. 27.23 crore(previous year Rs. 2.94 crore), the cash flow from operation for the year is Rs. 112.37 crore (negative

Rs. 1,154.77crore for previous year). The Company could generate the cash flow from operations during the year due to the reduction in net working capital achieved during the year. b. Cash Flow from Investing Activities: There is a net cash generation of Rs. 271.57 crore from investing activities in March25 (cash utilization of negative of Rs. (177.89) crore in March24). The major utilization was towards purchase of capital goods/ maintenance capex/ CWIP during the year by the company amounting to Rs. 77.88 crore (Previous year

Rs. 36.22 crore). The receipt during the year from proceeds of assets Rs. 125.74 crore (previous year

Rs. 1.30 crore). Proceed from insurance company amounting to Rs. 55.00 crore (previous year NIL). Theotherinflowfortheyearwasreceiptofinterestof

Rs. 6.02 crore (previous year Rs. 6.79 crore) and proceed from rental income during the year was

Rs. 9.68 crore (previous year Rs. 1.63 crore).

The current year inflows from maturity of fixed deposit Rs. 153.01 crore (previous year outflow in the Fixed deposit with banks by Rs. 151.39 crore) increased the total inflow due to investing activities. c. Cash Flow from Financing Activities: The net cash utilization in Financing activities was Rs. 380.43 crorein March25 as compared to Rs. 1,340.08 crore cash generated in March24. The inflow against the issue of Preference Shares was NIL in the current period (Rs. 3,300.00 in the previous year), long-term borrowings Rs. 50 crore in current period (Rs. 3450 crore in the previous year). Major utilization during the year was towards interest payment of Rs. 291.30 crore on the term loan, working capital and others (Rs. 475.91 crore in March24). The repayment of term loans amounting to Rs. Nil (Rs. 4,802.13 crore in March24). The company also reduced its working capital borrowing by Rs. 134.07 crore in the current year (Rs. 126.82 crore in the previous year). d. Cash Flow Summary: Overall, there was a net Cash generation of Rs. 3.51 crore in FY25 (previous year was Rs. 7.42 crore).

Textiles Business: Operations Review Overview

Aloks business comprises of a single business segment i.e., Textiles. Within Textiles, Aloks business comprises of Cotton Yarn, Apparel Fabric (Wovens, Knits & Garments), Home Textiles (Sheeting & Terry Towel), and Polyester Yarn. The division wise sales and its bifurcation into domestic and export is given in table 5 below:

Table 5: Snapshot of Aloks product-group wise sales distribution

12 M ENDED 31 MAR 2025

12 M ENDED 31 MAR 2024

Business Division

Local Export Grand Total % to Total sales Local Local Grand Total % to Total sales Change
Apparel Fabric 477.22 51.06 528.27 14.85% 412.47 24.29 436.76 8.15% 20.90%
Knits 109.07 32.91 141.98 3.99% 74.08 40.99 115.07 2.15% 23.86%
Embroidery 92.49 18.61 111.10 3.12% 96.92 34.67 131.59 2.46% -15.57%
Garment 89.21 7.86 97.07 2.73% 122.70 9.29 131.99 2.46% -26.99%
Hemming 22.82 4.17 26.98 0.76% 13.73 1.44 15.18 0.28% 83.61%

Total Apparel Fabric

790.81 114.60 905.41 25.46% 719.90 110.69 830.59 15.50% 9.09%
Bedding 146.94 295.10 442.04 12.43% 90.77 511.15 601.92 11.24% -26.65%
Terry 107.60 261.01 368.61 10.36% 110.04 159.73 269.77 5.04% 36.69%

Total Home Textile

254.54 556.12 810.66 22.79% 200.81 670.88 871.70 16.27% -7.05%
Packaging 68.14 - 68.14 1.92% 53.44 0.00 53.44 1.00% 27.56%
Polyester 1,072.23 21.41 1,093.64 30.75% 2,620.15 153.81 2,773.95 51.79% -60.57%
Spinning 526.99 151.75 678.74 19.08% 654.11 172.55 826.66 15.43% -17.79%

Grand Total

2,712.72 843.87 3,556.59 100.00% 4,248.41 1,107.93 5,356.35 100.00% -33.59%

Local Sales

The oversupply situation in the Polyester and Apparel Fabric businesses in India coupled with cheap imports from China and other countries severely impacted the efforts of the company to increase its sales in domestic market. The local sales saw a sharp decline by around 36.15% in FY 2025 to Rs. 2,712.72 crore as compared to

Rs. 4,248.41 crore the previous year.

Export Sales

The Companys export business during the year decreased by 23.83% to Rs. 843.87 crore as against

Rs. 1,107.93 crore in the previous year.

The Table below depicts the share of different regions in Aloks exports. The share of the USA in the overall export basket of Alok increased over the year. It continued to remain the dominant market during the year with 46.33% share in exports (Previous year 45.83%). The share of Asia is increasing year after year. It increased from 36.09% in the previous year to 43.65% in the current year. The share of Europe decreased during the year from 4.49% in the previous year to 2.42% in the current year. Share of African continent has decreased to 2.97% in the current year as compared to 7.08% in the previous year

Table 6: Regional Distribution of Exports

31 Mar 2025

12 M ENDED 31 MAR 2024

Regions

Rs. crore US$ MN % to total Rs. crore US$ MN US$ MN
Africa 25.08 3.00 2.97% 78.41 9.50 7.08%
Asia 368.34 43.44 43.65% 399.89 48.46 36.09%
Asia – Pacific 0.82 0.10 0.10% 10.19 1.25 0.92%
Europe 20.44 2.41 2.42% 49.73 6.02 4.49%
North America 32.49 3.78 3.85% 43.64 5.26 3.94%
South America 5.71 0.67 0.68% 18.33 2.21 1.65%
US 391.00 46.16 46.33% 507.75 61.55 45.83%

Total

843.87 99.54 100.00% 1,107.93 134.24 100.00%

Manufacturing and Business Excellence:

Alok Industries Limited is an integrated textile manufacturer with operations in both cotton and polyester value chains. Modern age fibers like Bamboo blends, 100% Viscose from bamboo, 100% Tencel, Tencel Linen blends, Cotton Tencel blends, Modal etc. We can produce and supply to as per market requirements. The Company has created world scale capacities and has a market presence in the domestic as well as export markets. It has global retailers, brands, reputed garment manufacturers and traders in its portfolio of customers.

Aloks business excellence is driven by the following strategic advantages:

• Established relationship with leading global brands and retailers

• State-of-the-art manufacturing facilities and supporting infrastructure.

• Strong emphasis on Quality, Cost and Delivery in time (QCD)

• Economies of Scale that provide competitive advantages.

• Forward and Backward integration leading to assured quality parameters across the chain.

• Wide range of products across different product segments

• In-house product development and designing strength.

The Company has received certifications of Integrated Management System comprising of ISO 9001:2015 (QMS), ISO 14001: 2015 (EMS) and ISO 45001:2018(OHSMS) indicating the robust systems and processes being followed by the Company. Alok is also compliant with the health, safety, and environment norms and has obtained various eco certifications for its products, as required in export markets. Details of these certifications are covered under the section "Quality, Safety, Health and Environment".

Quality, Safety, Health and Environment

1. Quality, Safety, Health, and Environment

At Alok, continuous efforts at developing world class processes and quality assurance are a fundamental and non-negotiable part of the way business is conducted. There is constant focus on manufacturing and allied practices to adhere to the concept of ‘get it right - first time and every time. To achieve this, the Companys products, manufacturing processes and equipment are rigorously checked for quality standards and process deviations, if any.

The Companys adherence to internationally recognized certification standards and compliances has been recognized by reputed certification bodies (see Table 7). Today, the Company has the following certifications/accreditations:

Table 7: Major Certification- Divisions, Plants and Locations Covered.

Certification

Division / Plant / Location

ISO 9001:2015 (QMS) • Process House, Vapi (Normal and Wider width)
ISO 14001:2015 (EMS) • Weaving, Silvassa

ISO 45001:2018(OHSAS) (Integrated Management System)

• CP, POY, FDY, PSF and Texturizing, Silvassa

• Made Ups, Vapi
• Made Ups Garments, Vapi
• Spinning and Knitting, Silvassa
Products :
IS 17261:2022 • Fully Drawn Yarn (FDY)
IS 17262:2022_ • Partially Oriented Yarn (POY)
IS 17263:2022 • Polyester Staple Fibres (PSF)
IS 17265:2022 • 100% polyester spun Greig and white yarn
IS 18739 : 2024 • Madeups
IS 7056 : 2024 • Terry towels
SMETA-Sedex Members Ethical Trade Audit • Silvassa SMU and Madeups & Terry Towels, wadi
WRAP- Worldwide Responsible Accreditation Program. • Garment & Terry Towel, wadi
BSCI-Business Social Compliance Initiative • Knits processing
(Social requirements) • Embroidery
GOTS: Global Organic Textile Standards • Head Office, Mumbai
OCS-Organic Content Standard • Spinning and Knitting Division, Silvassa
GRS: Global Recycle Standards. • Weaving Division, Silvassa
RCS: Recycled Claim Standards • Process House (Normal and Wider Width), Vapi
• Made ups and Garments Division, Silvassa
• Knit Processing, Vapi
• Terry Towel Division, Vapi
• Made-ups Division, Vapi
• Embroidery Division, Silvassa
• POY Units,
Fair Trade- FLOCERT: Fair-trade Standard for Fibre • Spinning and Knitting Division, Silvassa
Crops for Small Producer Organizations
• Weaving Division, Silvassa
• Process House (Normal and Wider Width), Vapi
• Made ups and Garments Division, Silvassa
• Knit Processing, Vapi
• Terry Towel Division, Vapi
• Made-ups Division, Vapi
OEKO Tex Standard – Product Class • Made –ups (Product Class I and II)-Conventional and Organic –
I and II • Woven and Knitted Fabric (Product Class I and II) Conventional and
Organic
OEKOTEX Organic Standard
• Texturized Yarn (Product Class I)- Virgin Polyester
• Cotton and blended yarn (Product Class I) Conventional and Organic
• Terry Towels (Product Class I) Conventional and Organic
• Garments (Product Class I) Conventional

• Woven and Knitted Fabric- (Commission dying and printing) (Product Class I)

• Woven and Knitted Micro Polyester (Product Class I)

STeP Certification (Sustainable Textile Production) and Made In Green Label

• Process House, Vapi (Normal and Wider width)

• Knits Processing, Vapi
• Terry Towel, Vapi
• Made Ups, Vapi/Silvassa
• Garments, Vapi/Silvassa
HIGG index: • Terry Towel / Knits, Vapi
FSLM / SLCP • Made Up, Vapi
• Embroidery, Silvassa
• Made up, Silvassa
• Narrow Width, Vapi
Environmental – FEM
• Terry Towel & Knits, Vapi
• Embroidery, Silvassa
RegenAgri • Spinning, Knitting, Weaving, Sales, Pretreatment, Preparatory,
Weaving, Dyeing, Printing, Finishing, Manufacturing, Warehousing,
Distribution and Packing

Walmart – Joint Quality Management program – JQMP – Factory authorized to ship goods through self inspection

• Wider width processing

• Silvassa Madeups

In addition to the certifications detailed above, Alok also holds the following certifications:

• Egyptian Cotton Certificate - License for using Cotton Egyptian

• BCI – Certifications for entire supply chain of Alok industries limited.

• SUPIMA Cotton Certificate- License for using Cotton Supima

• Cotton USA – License for using Cotton USA

• Cotton made in Africa (CmiA)- Mass balance yarns produced in compliance with licensed CmiA. Awards received by the Company:

Aloks performance, especially in exports of cotton goods and polyester yarn have been recognized through successive awards from TEXPROCIL and SRTEPC in the past for many years. The Company has received following export awards from TEXPROCIL on 08.05.2024 for below categories for FY 2021-22 and 22-23.

2021-2022

• Gold Plaque for Highest Exports of Other Fabrics including Embroidered Fabrics, Laces etc in Category I

• Gold Trophy for Highest Exports of Bleached/Dyed/Yarn Dyed/Printed Fabrics in Category II

• Gold Trophy for Highest Exports of Cotton Made-ups - Terry Towels in Category II

2022-2023

• Silver Trophy for Second Highest Exports of Bleached/Dyed/Yarn Dyed/Printed Fabrics in Category II

Subsidiaries

The Company has the following direct and step -down subsidiaries as given in Table 8 below.

Table 8: Subsidiaries, Step Down Subsidiaries and Joint Ventures

Sr. No.

Name of the Subsidiary Country of Incorporation Relationship (Subsidiary of) % of Ownership
1 Alok Infrastructure Limited India Alok Industries Limited 100%
2 Alok Worldwide Limited BVI Alok Industries Limited 100%
3 Alok International (Middle East) FZE Dubai Alok Industries Limited 100%
4 Alok Singapore Pte Limited Singapore Alok Industries Limited 100%
5 Alok International Inc USA Alok Industries Limited 100%
Step Down Subsidiaries
1 Alok Industries International Ltd. BVI Alok Infrastructure Ltd. 100%
2 Grabal Alok International Ltd. BVI Alok Infrastructure Ltd. 100%
3 Grabal Alok UK Ltd. (Under Liquidation) United Kingdom Alok Industries International Ltd., BVI 99.21%
Grabal Alok International Ltd., BVI 0.66%
4 Mileta a.s. Czech Republic Alok Industries International Ltd., BVI 100%
Joint Venture Companies (Joint Venture with)
1 New City of Bombay Manufacturing Mills Ltd. India Alok Industries Limited 49%
2 Aurangabad Textiles and Apparel Parks Limited India Alok Industries Limited 49%

Textiles: Mileta

Through its step-down subsidiary, Alok Industries International Limited, BVI, Alok has a 100% stake in Mileta, a Czech-based fabric manufacturing company. Miletas facilities are located in Horice (Weaving and Administration) and Cerny Dul (Processing) in the Czech Republic. Mileta has high end technological skill in yarn-dyed fabrics and hemming that results in higher per unit realisation. The Mileta range of products includes high quality shirting, batistes and voiles, complete line of functional table linen, bed linen and handkerchiefs.

It supplies its fabrics to almost all the leading brands in Europe and USA.

For the year ended 31 March 2025, Mileta has achieved sales of Rs. 152.27 crore and made a loss of Rs. (49.63) crore as compared to sales of Rs. 153.23 crore and profit of

Rs. (28.53) crore in March 2024.

UK Retail: Store Twenty One

Alok held a 99.87% equity stake in Grabal Alok (UK) Ltd, through its step-down subsidiaries Alok Industries International Limited and Grabal Alok International Limited. Grabal Alok UK used to operate the ‘Store Twenty One chain of value-format stores in UK. Grabal Alok UK is under liquidation as per the court order dated 10th July 2017 under the provisions of the Insolvency Act 1986. The Company has impaired its entire investment.

Investment: Alok Infrastructure Limited

The Company made certain investments in the realty sector through its 100% subsidiary Alok Infrastructure Limited. The plan was to create value and monetise the same at the right opportunity. However, depressed market conditions in the real estate space resulted in the Company having to dispose of some of its assets at losses. The Company has also provided for the loans / advances which are not recoverable from its subsidiaries. There are no operations being carried out presently in Alok Infrastructure Limited and it had no revenue for the year (Previous Year "Nil") and loss for the year was Rs. 8.08 crore (Previous Year loss of Rs. 12.73) Crs. The loss is mainly on account of interest provision on loan.

Other Subsidiaries

The other direct and step-down subsidiaries of the Company are non-operational. The performance of all of subsidiaries and step-down subsidiaries are given in table 11.

Consolidated Results

Tables 9, 10 and 11 give the profit and loss highlights, balance sheet highlights and Company wise sales of Alok as a consolidated entity. The loss in consolidated accounts for the year was Rs. 854.26 crore (previous year loss Rs. 875.44) crore.

Table 9: Consolidated Profit and Loss Summary

Particulars

31st March 2025 31st March 2024
Net Sales 3,708.78 5,509.59
Other Income 111.07 23.22

Total Income

3,819.85 5,532.82
Material Costs 1,981.00 3,753.83
People Costs 497.35 477.56
Other Expenses 1,319.83 1,229.52

Total Expenses

3,798.18 5,460.90

Operating EBIDTA

21.67 71.91
Depreciation (298.10) (324.62)
Interest & Finance Costs (628.17) (596.07)

Operating (Loss) / Profit Before Tax and exceptional items

(904.60) (848.78)

 

Particulars

31st March 2025 31st March 2024
Exceptional Items 94.14 -

Profit Before Tax after Exceptional items

(810.46) (848.78)
Add / (Less): Provision for Taxes (5.02) 2.92

(Loss) / Profit After Tax

(815.48) (845.86)
Share Of Profit / (Loss) From Associates (Net) (0.96) (0.96)

(Loss) / Profit After Minority Interest

(816.44) (846.82)
Other Comprehensive Income (37.82) (28.62)

Total Comprehensive Income

(854.26) (875.44)

Table 10: Consolidated Balance Sheet Summary

 

(Rs. in crore)

Particulars

31st March 2025 31st March 2024
Share Holders Fund (20,630.12) (19,775.87)
Non-Current Liabilities 25,740.81 24,447.31
Current Liabilities 1,619.18 2,735.39

Total Equity and Liabilities

6,729.87 7,406.83
Non-Current Assets 5,132.79 5,614.65
Current Assets 1,499.83 1,792.18
Non-Current Assets held for sale 97.25 -

Total Assets

6,729.87 7,406.83

Table 11: Company wise Sales& Profit /(Loss) in total Consolidated Performance

(Rs. in crore)

Sr. Name of the company

31.03.2025

31.03.2024

No

Sales

Profit/(Loss)

Sales Profit/(Loss)
1 Alok Industries Limited 3,556.59 (768.01) 5,356.35 (814.13)
2 Alok Infrastructure Limited - (8.08) - (12.73)
3 Alok International Inc. - 8.60 - (6.66)
4 Mileta A.S 152.27 (49.62) 153.23 (28.53)
5 Alok Industries International Limited - (132.13) - (29.06)
6 Grabal Alok International Limited - (20.66) - (10.83)
7 Alok World Wide Limited - 1.93 - 0.02
8 Alok Singapore Pte Limited - (1.00) - (2.21)
9 Alok International (Middle East) FZE - 16.03 - (0.21)

Total

3,708.86 (952.94) 5,509.58 (904.34)
Effect of elimination entries (0.07) 98.70 0.01 28.90

Consolidated (Loss) / Profit

3,708.79 (854.24) 5,509.59 (875.44)

HUMAN RESOURCE

Alok Industries Limited has been actively refining its HR processes and policies to align with the evolving needs of the textile industry. In the financial year 2024–2025, the company focused on harmonizing employee benefits and streamlining policies to reward meritocracy and teamwork.

As of March 31, 2025, Alok Industries total employee strength, including contract workers, stood at 21,037. With a clear vision of becoming a preferred employer in the textile sector, the company remains committed to fostering a dynamic and engaging work environment that empowers people and drives performance excellence.

Strengthening the Leadership Team for the Next Phase of Transformation

The financial year 2024–2025 marked a significant inflection point for Alok Industries Limited, as the company embarked on a renewed strategic direction under the guidance of a restructured and revitalized leadership team. This restructuring is aligned with the organizations long-term vision of operational excellence, innovation, and sustained growth in the highly competitive textile industry.

At the forefront of this transformation is the elevation of Mr. Harsh Bapna as the Chief Executive Officer. Mr._ Bapna is spearheading the companys renewed mission to drive value creation, enhance operational efficiency, and position Alok Industries as a competitive player in textile industry.

To support this strategic shift, several senior leaders have been inducted across key business and functional verticals:

• Mr. Biji Chacko joined the organization as Chief Operating Officer. With extensive experience in managing complex operations and driving process excellence, he brings a sharp execution focus to the companys businesses, manufacturing and supply chain functions.

• In a strategic move to further energize the business divisions, Mr. Ravi Bhargava joined as Divisional CEO – Apparel & Fabric Division, and Mr. Jayesh Saxena assumed the role of Divisional CEO – Home Textile Division. Their appointments reflect a renewed emphasis on product innovation, customer engagement, and market expansion within their respective segments.

• Reinforcing our supply chain and planning function, Mr. Senthilkumar M. A. joined as Head – Sales & Operations Planning (S&OP), bringing expertise in demand forecasting, integrated planning, and execution alignment. Mr. Shishir Verma took charge as Head – Procurement & Contracting, with a mandate to streamline sourcing strategies, build robust vendor partnerships, and ensure cost competitiveness.

• Several other leaders also joined to strengthen specific business and support functions: o Mr. Vidyesh Talekar was on boarded as Business Head – Bed Linen Department, where he is leading efforts to innovate and expand in this critical product category. o Mr. Kulvinder Marwah joined as Head of IT, playing a key role in driving the companys digital transformation journey, enhancing system integration, and strengthening data-driven decision-making.

The infusion of this high-calibre leadership talent represents a strategic step forward for Alok Industries. Each of these leaders brings unique expertise, fresh perspectives, and a shared commitment to excellence that is expected to play a pivotal role in driving the companys transformation agenda. Together, this team is well-positioned to lead Alok Industries into its next phase of growth, agility, and innovation.

Key HR Initiatives Undertaken in Financial Year 2024–2025

The financial year 2024–2025 was a pivotal period of transformation for Alok Industries Limiteds Human Resources function. With a renewed leadership team and a forward-looking vision, the company laid the groundwork for a people-centric, performance-driven organization. A series of strategic HR initiatives were conceptualized and implemented to strengthen employee engagement, modernize systems, and align workforce capabilities with business objectives. Below is an in-depth overview of some of the most significant HR interventions undertaken during the year: A) Office Relocation to Dhirubhai Ambani Knowledge City (DAKC), Navi Mumbai

One of the key infrastructural changes this year was the successful relocation of Alok Industries corporate office to the prestigious Dhirubhai

Ambani Knowledge City (DAKC) in Navi Mumbai. This move was driven by multiple strategic considerations:

Enhanced Facilities: DAKC offers superior amenities, including modern workspaces, employee wellness infrastructure, tech-enabled conference rooms, and recreational facilities, improving overall work experience.

Proximity to Established Ecosystem: Being situated within the strategic campus enables Alok Industries to tap into the shared knowledge, infrastructure, and innovation ecosystem of one of Indias largest conglomerates.

Collaboration & Synergy: The location fosters closer collaboration between teams and aligns with the vision of creating a more integrated, networked, and responsive work environment.

B) Digital Transformation through SAP Human Capital Management (SAP HCM)

In a major stride toward digital transformation, the HR function implemented the SAP HCM (Human Capital Management) platform. This initiative was part of a larger objective to modernize legacy HR systems and introduce automation and standardization across key HR processes.

Automation of Core HR Functions: Processes such as payroll, attendance, employee data management, and compensation were transitioned from manual or fragmented systems to a unified digital platform.

Streamlined Processes: The implementation significantly improved process accuracy reduced administrative overhead, and increased HR operational efficiency.

Collaboration with Domain Experts: The project benefited immensely from the SAP HR experts, ensuring best-in-class system implementation and seamless change management.

Adoption of Industry Best Practices: The platform enabled integration of robust HR practices across talent management, workforce planning, and compliance.

This system transformation has empowered the HR team with better data, faster processing, and enhanced service delivery capabilities.

C) Employee Self-Service (ESS) Portal – Launch of

PeopleFirst

Building on the SAP HCM foundation, Alok Industries launched the PeopleFirst ESS platform, a digital interface that enables employees to independently access and manage a wide array of HR services. The platform represents a step toward democratizing HR service delivery and putting the employee at the center of the HR ecosystem.

Enhanced Transparency: Employees can now track and manage their leave balances, payslips, tax declarations, and more, without depending on HR intermediaries.

Ease of Access: With intuitive design and 24/7 availability, the platform significantly improves user experience and accessibility for the entire workforce.

Boost in Employee Engagement: Empowering employees with control over their personal data and requests has strengthened trust, accountability, and engagement.

The PeopleFirst platform has become an essential tool in fostering a transparent, responsive, and employee-focused workplace.

D) Launch of R-University – Learning & Development for a Future-Ready Workforce

Recognizing that employee development is key to long-term success, Alok Industries launched R-University, a digital learning platform tailored to the needs of a growing, dynamic workforce.

Comprehensive Learning Resources: The platform hosts a wide range of training modules, covering technical skills, leadership development, functional competencies, and soft skills.

Personalized Learning Journeys: Employees can set individual goals, track progress, and engage with content at their own pace.

Performance-Linked Development: The learning content is closely aligned with organizational needs and role-specific competencies, ensuring relevance and ROI.

HR L&D Enablement: The platform provides insights and analytics to the HR Learning & Development team, allowing them to tailor programs and interventions more effectively.

By nurturing a culture of continuous learning, R-University is enabling employees to remain future-ready and actively engaged in their personal and professional growth.

E) Structured Induction with e-Namaste – A Redesigned Onboarding Experience

To improve the employee onboarding experience, the company introduced e-Namaste, a digitized and structured induction program aimed at making the transition for new hires smooth, informative, and engaging.

Holistic Onboarding: New employees are introduced to company culture, policies, business functions, and leadership teams through interactive sessions and digital content.

Cross-Functional Integration: The program encourages inter-departmental interaction, helping new hires build connections across business units.

Faster Time to Productivity: By offering early clarity and context, e-Namaste ensures that employees are better prepared to contribute effectively from the outset.

Stronger Employer Brand: A well-structured onboarding process significantly improves early employee experience and contributes to retention.

The e-Namaste initiative underscores the companys commitment to making every new joiner feel welcomed, supported, and aligned with its vision.

(F) Leadership Alignment Initiatives – Building a Unified Vision

With the induction of a new leadership team, it was imperative to bring strategic clarity and alignment across top management. To this end, Alok Industries took several measures to ensure leadership alignment at businesses, functions & manufacturing site.

These initiatives laid the groundwork for a united leadership team committed to driving excellence, innovation, and sustainable growth.

G) Engagement Activities

Conclusion: A Transformational Year for People & Culture

The HR initiatives undertaken during FY 2024–2025 represent a major leap forward in how Alok Industries views, engages, and empowers its workforce. From system modernization and digital self-service to leadership development and structured onboarding, every intervention was aimed at making Alok Industries a future-ready, people-first organization. These efforts have not only optimized operations but also significantly strengthened the companys foundation for sustainable growth and long-term success.

SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES – FY 2024–2025

Alok Industries Limited continued to advance its commitment to sustainable business practices and inclusive development throughout the financial year 2024–2025. Guided by the values of responsibility, innovation, and stewardship, the company reinforced its dedication to environmental sustainability, community welfare, and circular economy practices, creating long-term value for all stakeholders.

Rooted in its core values of Environment, Health, Safety, Society, and Sustainability, Alok Industries undertook several strategic initiatives aimed at minimizing environmental impact and fostering socio-economic development:

Scaling the Use of Renewable Biomass Energy: The company further expanded the usage of eco-friendly biomass briquettes—produced from cottonseed residue, ground nutshells, sawdust, and dust particles—as a renewable energy source in its solid fuel-fired boilers. This moves significantly reduced dependency on fossil fuels and lowered carbon emissions.

Promoting Circularity through Recycling: In line with circular economy principles, Alok Industries enhanced its recycling capabilities by converting polyester waste, yarn scraps, and PET flakes into premium-quality, 100% recycled polyester fibre. This initiative not only conserves natural resources but also reduces landfill dependency and environmental pollution.

Integrated Waste Management Strategy: The company further strengthened its waste management systems by implementing innovative recycling methods, ensuring that a substantial share of industrial waste is reprocessed into reusable resources for internal operations and partner ecosystems.

Advanced Water Stewardship: Through upgraded water recycling and treatment technologies, the company maintained its focus on efficient water reuse, drastically reducing freshwater withdrawal and contributing to water security in the regions of operation.

Alok Industries believes that sustainability and innovation are twin enablers of industrial resilience, economic value, and environmental responsibility. The company continues to pursue a decarbonization roadmap by embedding energy-efficient practices, expanding its portfolio of eco-friendly products, and integrating sustainable design and raw material sourcing across its manufacturing value chain.

Corporate Social Responsibility: Enabling Empowerment and Well-being

Beyondbusiness,AlokIndustriesremaineddeeplycommitted to its CSR agenda, with a strong emphasis on community upliftment, skill development, womens empowerment, and healthcare support, particularly in regions surrounding its manufacturing facilities.

Key CSR efforts in FY 2024–2025 included:

Empowering Women Through Livelihood Opportunities: The company continued to support self-help groups (SHGs) by providing training and employment in tailoring and garment manufacturing, promoting self-reliance and financial independence among women in local communities.

Skill Development for Inclusive Growth: The companys Skill Development Centre for Garment Stitching remained a pillar of its CSR outreach, equipping youth and women with vocational skills that enhance employability and foster long-term career opportunities in the textile sector.

Supporting Access to Healthcare: Alok Industries played an active role in expanding healthcare access by contributing to the development of a Dialysis Centre at the Civil Hospital, helping improve treatment accessibility for patients in need of life-sustaining care.

Risks & Risk Mitigation

RISK ASSOCIATED WITH THE COMPANY:

The Company is exposed to various risks which include factors such as rising competition in the market on the domestic and export fronts, duty free access to competing countries in US and European markets, uncertain business environment including conflict between Russia and Ukraine, rupee fluctuation, volatility in raw material prices and its availability, slowdown in demand and change in fashion trends, possibility of increase in interest rates, etc. Besides this the Company is also exposed to factors such as the change in government policies, duties & taxes, availability of power from the grid, availability of labour etc. The Company tries to mitigate these risks by taking quick actions and proactive initiatives to minimize the impact of these risks to the extent possible. Some of these threats are given below:

Raw material related Risk:

Raw material being a major cost of production, Companys operations and profitability are significantly dependent on price and timely availability of raw materials used in production process. The primary raw materials for our textile operations are raw cotton. The Company also buys cotton yarn, polyester yarn and fabrics of specifications required by customers which are not produced in its plants or in case the internal capacities are not available.

Cotton:

Being an agricultural commodity, prices of cotton are affected by a range of factors like changes in weather conditions affecting sowing, government policies and regulations. Governing taxes, tariffs, duties, subsidies, import and export restrictions on agricultural commodities, overall supply situation in the world, etc. all these influence pricing and demand supply situation in this industry. The planting of certain crops versus other uses of agricultural resources, the location and size of crop production, volume and types of imports and exports, etc. determine availability of cotton. As compared to FY 2024, the cotton prices saw a decline in prices in FY 2025. As given in the chart below, it remained lower than Rs. 60,000 per candy touching a low of around

Rs. 52,950 in Feb.25 from a level of around Rs. 59,700 in September24. The year end prices were around Rs. 53,000. We expect the prices of cotton to remain range bound between Rs. 55,000 – Rs. 60,000 per candy in FY 2026.

The Company has an experienced team for procurement of raw cotton with a deep understanding of this natural fibre. As a Company, we have adopted various processes whereby we are expanding our sources across different supply chain intermediaries and other stake holders. Cotton being an international commodity, our focus remains optimizing domestic and international opportunities to create a competitive edge of sourcing based on landed cost.

Market related Risk:

The Companys performance is dependent upon the demand situation in individual business segments. A slowdown in demand may lead to decline in production/ sales and thus impact profitability. The value-added segments of Apparel Fabrics and to some extent Home Textiles, are also subject to trends in fashion and consumer demand. Moreover, major international incidents such as Russia-Ukraine and Israel and Gaza / Iran conflicts also impact the demand not only from the impacted economies but also the major global markets.

The market demand is also dependent on global economic and international trade dynamics. The USA reciprocal tariff being negotiated can have a major impact international trade directions and demand. This is likely to impact textile trade in a major way.

The Companys products are sold in both domestic as well as exports markets. While the companys major sales are in domestic market (about 75%- 80%), exports are also expected to remain a sizeable part (about 20%- 25%) of the Companys revenues.

The Companys exports markets, predominantly USA, Europe, and Asia, are very competitive with high emphasis on timely delivery. All the products of the Company are getting exported. Home textiles (bedding and towels) are the major chunk of the Companys exports constituting about 55% of the total exports.

Ability to develop products as demanded by customers and new designs development capability are critical factors for exports markets. The Company has been so far successful in meeting these demands over the years and has also won several export awards in the past instituted by the Government and Export Promotion Councils. India no longer enjoys preferred market access in terms of concessional import duties in major exporting countries like USA & Europe. The Company is progressively widening its markets with increasing focus on Asia and some countries in Africa to mitigate the challenges that are likely to arise in the developed markets. The Company has been able to retain key customers in USA and Europe, albeit with lower volumes. Now with completion of the necessary maintenance of its plants, the Company is confident of bringing into its fold, customers who have moved away in the last few years, given the quality of the products and capacity to supply large volumes consistently. In the domestic market as well, the Company faces competition from organised big players and the unorganised small and fragmented players. The Company has developed a good reputation amongst the domestic traders, garment manufacturers and brands due to quality, design capabilities and cost. Further, the Company has started building relationships with large retailers (physical and online) to supply fabrics and garments. The Companys operations are now getting scaled up and it is fully prepared to meet larger volumes. The Company is confident that it would regain a preferred supplier status for big brands and retailers given the quality, design capability and the capacity to provide large volumes on a consistent basis.

Financial Risk:

The company must meet its financial obligations on time. The Company has an outstanding term loan from banks of

Rs. 3,500 crore and working capital limits of Rs. 300 crore The Company is required to meet the interest obligation on these loans periodically and also has to meet the repayment of term loan as per the terms of sanction. Moreover, the Companys loans are linked to MCLR of the sanctioning banks. Any increase in MCLR would lead to increase in interest rate for the Company on its borrowing.

The Companys present rating is AA+ stable (by CARE) which denotes high level of certainty of meeting debt obligations.

Information Technology Risk

Information and Technology being the major backbone of Companys overall operation and data storage/ analysis, is another key risk area identified by the Company and several measures are being taken to strengthen the same and mitigate the risk associated with this.

The company has successfully implemented a new instance of SAP on a new landscape to replace the earlier obsolete and unsupported instance, which has been functional since 2007. This instance has gone live on 1st September 2023 (transactions prior to 1st September continue to be on the earlier hardware) with the following core modules: a. Sales and Distribution b. Materials Management c. Finance and Controlling d. Production and Planning e. Quality Management f. Plant Maintenance g. Logistics & EWM

Human Capital Management (including ESS) has been rolled out from 1st April, 2024 after 6 months of parallel run. The Company has also successfully migrated the earlier unsupported instance running on end-of-support hardware to a new hardware environment. This instance carries data from April 2007 until August 2023. Both the environments are hosted at the highly secured data center of RIL with a full proof DR environment. Highest level of RTO and RPO are ensured in the present landscape. Cyber security being a major concern for the IT ecosystem, we continue to focus on enhancing cyber security architecture which can protect our landscape from a wider range of security threats under guidance of "IRM - Governance & Risk Management, Reliance Industries Ltd". Access to computing infrastructure such as servers, workstations, network devices etc. are monitored very closely for possible security threats. Necessary controls are strengthened on a continuous basis. Remote working is enabled for all employees who need to access companys computing resources from anywhere through secure and controlled paths created through VPN. Some of the improvements done during the financial year are:

• Old and obsolete IT systems are replaced with new systems. (Ongoing process)

• Network infrastructure is being hardened to mitigate security threats (ongoing process).

• Multi-factor Authentication and MAC address binding are enforced, as applicable.

• Implemented stronger password management system across applications and devices.

• Network bandwidth is continuously optimized to ensure seamless access to applications/database from all locations.

• The external E&Y ITGC system audit for FY 2023-24 has been completed, and the audit for 2024-25 is in progress.

Currency Risk

The Company is subject to currency exposure risk given its significant size of exports. The companys imports are much lower as compared to its exports and thus as far as foreign currency payments are concerned, the company has a natural hedge. The Company has been sanctioned a limit to hedge the currency exposure on export receivables and covers exports to the extent needed to cover open risk (net). The Company also has in place a hedging policy to mitigate currency risks. The currency risk is thus adequately mitigated.

Government Policies:

The companys business also has a threat of sudden change in government policies like policies relating to export and import of certain products, change in customs duty structure, change in export incentives, change in GST rates, etc. Similarly other government policies such as policies relating to labour etc. also have their impact in overall competitiveness of the Company as compared to the competing countries in the international markets. The Company monitors the changes in government policies on day-to-day basis and forms appropriate strategies to mitigate the impact on the Company while ensuring adequate compliances.

Outlook

The inflation in the major economies of US, Europe and UK is coming down slowly. The central banks interest rate hike scenario in those countries is also now teeming down.

As a result, these economies are expected to improve gradually. Some sign of demand revival from those countries is also visible based on the recent meetings of our marketing teams had with the international buyers. The cotton prices have also come down to about Rs. 53,000/- Rs. 55,000/- per candy and the crude is moving in a range bound manner. We, therefore, expect overall market situation to improve in FY 2026 and with the gradual revival of demand, our operating rates of the downstream businesses is expected to improve during the year. This along with several measures undertaken by the Company to improve quality, sales realization and cost reduction are expected to yield positive results during the year. The strong support from our promoters RIL is also to be considered as an important factor for our solidity. We therefore look at the future optimistically.

Internal Control and Adequacy

The Company has in place a well-established framework of internal control systems which are commensurate with the size and complexity of its business. The Company has an independent internal audit function covering major areas of operations and the same is carried out by an external Chartered Accountant firm engaged for this purpose.

Cautionary Statement

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. 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 usingwordssuchas‘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 related to new information, future events or otherwise.

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