Avi Ansh Textile Ltd Management Discussions

2(https://www.news18.com/business/economy/indias-gdp-grows and https://www.hindustantimes.com/india-news/ india-economy-grew-6-5-in-fy25-beating-forecasts)

Cotton dominated the market and accounted for the largest revenue share of 39.3% in 2024, due to its natural origin, breathability, softness, and widespread consumer preference, especially in apparel and home textiles. It is particularly favored in tropical and subtropical regions for its comfort in warm climates. Cottons versatility allows its use across diverse segments, from casual wear to medical and industrial applications. In addition, global efforts to promote sustainable and organic cotton farming are boosting its market appeal. Major producing countries such as India, China, and the U.S. support a steady supply chain. Despite competition from synthetic fibers, cotton maintains a strong market share due to its biodegradability and eco-friendly perception.

Indias textile industry has shown significant growth in FY 2024-25, with exports rising by 6.32% to $36.606 billion. Apparel exports increased by 10.03% to $15.989 billion, while textile exports grew by 3.61% to $20.617 billion. The market is largely MSME-based and primarily dependent on the domestic sector, which focuses heavily on high-street retail and local brands. However, with the rapid expansion of organised retail — especially brands like Zudio and others across Tier 1, 2, and 3 cities — competition has intensified. This has resulted in reduced footfall for high-street shops. On the other hand, many manufacturers are shifting to FOB (Free on Board) and private label business models, but these also operate on very thin margins. So overall, its a tough time for Indian garment manufacturers, both in the domestic and private label segments.

In domestic market, factors like labour shortages and inability to innovate and adapt are also one of the main obstacle in growth. As compared to domestic market, international market is still performing better. Export performance is showing signs of steady recovery, supported by a 7 per cent increase in textile and apparel shipments between April and October of FY 2024-25. The Indian garment industry stands at a promising juncture, with several opportunities ready to be tapped. Although the industry is balancing between uncertainty and possibility. By identifying and seizing the right opportunities, India can not only stay ahead in the global race but also redefine its role as a leader in the world of apparel.

According to the report, total cotton supply up to the end of June 2025 is estimated at 356.76 lakh bales. This includes market arrivals (pressings) of 296.57 lakh bales, imports of 30 lakh bales, and an opening stock of 30.19 lakh bales at the beginning of the season, as estimated by CAI.

Further, the industry body has estimated domestic cotton consumption up to the end of June 2025 at 233.50 lakh bales, while export shipments are pegged at 15.25 lakh bales. The stock at the end of June 2025 is estimated at 108.01 lakh bales, which includes 32 lakh bales held by textile mills and the remaining 76.01 lakh bales with the Cotton Corporation of India (CCI), Maharashtra Federation, and others including multinational companies, traders, ginners, and exporters. Cotton that has been sold but not yet delivered is also included in this figure.

The closing stock at the end of the 2024-25 season, as of September 30, 2025, is projected at 55.59 lakh bales, significantly higher than the 30.19 lakh bales recorded at the end of the previous season.

At Avi Ansh Textile, we foster a culture of meritocracy, where every individual has equal opportunities to grow and succeed. We believe in empowering women through employment, providing them with a safe and comfortable work environment that encourages their participation and contribution. We invest in our employees growth and development through regular skill and knowledge enhancement programs, equipping them with the tools and expertise needed to excel in their roles. Our industrial relations remained peaceful and harmonious throughout the year, reflecting our commitment to maintaining a positive and productive work environment.

To make sure that company is up-to-date with the industry standard, it regularly reviews and updates its internal controls and measures itself with industry standards. In order to stay compliant the dynamics of evolving business requirements , legal compliances and corporate governance are incorporated into current systems after a thorough evaluation with regard to the expectations of business partners , such as customers , institutions and compliance needs . Senior management keeps an eye on the internal audits suggestions for ongoing system updates. The infrastructure of IT system is upgraded frequently to facilitate improved controls and corporate decision making to make sure that the company is not lagging in technology and is at par with the industry.

1. Indias cotton yarn segment is poised for a healthy 7-9% revenue growth in FY26. This rebound is fueled by renewed export demand, especially from China and Steady domestic consumption, particularly from Ready-Made Garments (RMG) and Home Textiles (HT).After a harsh 22% drop in FY24 revenue due to price declines, FY25 and FY26 are expected to see recovery, supported by increased volumes and slightly higher price realizations.

However, domestic cotton remains pricey. With Indian cotton costing ~83-84 US cents/lb against NY futures at ~67-69 cents, this cost gap squeezes margins.

To stabilize prices, the Cotton Corporation of India (CCI) is planning to procure 10 million bales — a move that could prevent oversupply and support the market.

2. Indias polyester yarn sector faces a flat revenue outlook, but with a silver lining — improving margins. Imports are down, helping domestic players. Policies like Minimum Import Price (MIP) and Quality Control Order (QCO) are working. Falling crude oil prices lower input costs, boosting profits.

Margins could rise to around 6.75% in FY26, compared to just over 5% in FY24. Thats a notable improvement, even if topline growth remains modest. But theres a formidable competitor in sight — China. With a 62% global export share and massive integrated capacity, Chinas dominance in polyester yarn continues to limit Indias export opportunities unless large-scale investments are made.

3. In textile industry companies do face a lot of geographical challenges such as natural disaster, climate, resource availability, power supply issues depending upon the location of the manufacturing unit. Avi Ansh Textile is encountering geographical challenges due to the current government of Punjabs policies and excessive electricity load on the Dera-Bassi Industrial Area which is causing frequent electricity outages. This is disrupting heavy machine operations and leading to fixed labor costs being incurred despite the operational disruptions. Although the issue has been raised to the concerned authority by the companies and adequate action from the authorities is awaited.

4. The Indian government has introduced policies like the Production Linked Incentive (PLI) scheme and the PM MITRA scheme to boost investment, enhance infrastructure, and promote exports in the Textile. Indias rising middle class is expected to drive demand for clothing, home textiles, and other textile products, presenting opportunities for growth. Also, Indias textile industry can benefit from the growing global demand for textiles, particularly in the US and EU markets

5. Countries like India, Bangladesh, and Vietnam are now under serious consideration as alternative supply hubs. India also benefits from the upcoming India-UK Free Trade Agreement (FTA).

6. While US tariffs directly affect only 3-5% of Indias yarn exports, the indirect boost to downstream segments like garments and home textiles could uplift demand for yarn domestically.

7. Theres a subtle but powerful shift happening in global trade. As tensions rise between the US and China, global buyers are diversifying sourcing away from China.