Brand Concepts Ltd Management Discussions

Economic Overview

Global Economy1

The global economy maintained steady growth rate of 3.3%, despite challenges such as geopolitical tensions, shifting trade dynamics and evolving monetary policies. The US saw strong economic growth, driven by a robust corporate sector and high employment. On the other hand, Europe, particularly Germany, experienced an economic slowdown, impacted by sluggish manufacturing and weak exports.

Emerging markets outpaced developed economies, achieving a growth rate of 4.3% compared to 1.8% in advanced nations, fuelled by solid domestic demand and a rise in foreign investments.

A key factor in the global economic stability was a significant reduction in inflation, which decreased from 6.8% in 2023 to 5.7% in 2024. This decline, supported by well-timed monetary policies and stable energy supplies, helped to control prices, stimulate economic activity and bolster business confidence.

Outlook

The global economy is expected to grow moderately, with a growth rate of 2.8% projected CY 2025 and 3.0% CY 2026. This growth will be supported by central banks maintaining easy monetary policies to keep prices stable, encourage economic activities and boost jobs. However, recent tensions occurred by the U.S. imposing new tariffs on imports have created difficulties in global trade. These trade barriers could raise costs, disrupt supply chains and heighten the risk of an economic slowdown, leading many businesses to slow down. The global leaders are working through diplomacy, trade partnerships and negotiations to reduce tensions and bring stability back to international trade. The outlook for emerging markets and developing economies (EMDEs) remains strong, with expected growth of 3.7% in 2025 and 3.9% in 2026. Meanwhile, Advanced economies are projected to grow at a slower pace, with growth of 1.4% in CY 2025 and 1.5% in CY 2026.

Indias Economy

Indias economy remains a major contributor to global growth, driven by robust rural demand, rising foreign investments and proactive government policies aimed at enhancing consumption and investment. As per the RBI Bulletin, Indias economy grew by 6.5% FY 2025. The services sector played a crucial role in the growth of the Indian economy, contributing significantly to GDP and employment The manufacturing sector remains a key driver of economic growth. While inflation has eased slightly, elevated food prices remain a concern, affecting consumer spending. At the same time, prudent government spending and smart monetary policies contributed to maintaining overall economic stability. Indias efforts to fix long-term issues and make it easier to do business are attracting a lot of interest from global investors. These actions are laying a solid base for future growth and making the economy more resilient. With ongoing reforms and well-planned investments, India is well-positioned to achieve long-term economic growth.

Outlook

The Indian economy is well-positioned to sustain its growth momentum, supported by easing inflation, which is anticipated to boost consumer confidence and increase private consumption. The Government of Indias continued focus on infrastructure development and capital expenditure is further driving expansion across multiple sectors.

However, the new tariffs imposed by the U.S. on Indian goods could affect exports, given that the U.S. is one of Indias major trading partners. In 2024, bilateral trade between the two countries reached $129.2 billion. U.S. exports to India amounted to $41.8 billion, reflecting a 3.4% increase from 2023, while imports from India reached $87.4 billion, up 4.5%, creating a trade deficit of $45.7 billion for the U.S.2 Ongoing trade negotiations between the two countries demonstrate cautious optimism around Indias trade outlook with the U.S., further supporting the countrys economic growth. Backed by strong foreign exchange reserves, careful government spending and stable policy frameworks, India is well-positioned to continue its grow as a significant player in the global economy.

Industry Overview

Global Luggage Industry

The global luggage market is expected to grow by $16.64 billion between 2025 and 2029, with a compound annual growth rate (CAGR) of 8.5%.3 This growth is due to factors such as the increasing number of tourists, rise of athleisure trends and growing consumer demand for sustainable and tech-enabled luggage solutions. The market provides a wide range of products tailored to different travel needs, including luxury luggage, designer travel bags, business bags, backpacks and laptop bags. Key trends in the luggage market include an increasing focus on sustainability, integration of tech-enabled features and diverse options in terms of product look and feel to cater to a range of consumer preferences. Manufacturers are incorporating lighter materials and durable soft materials to meet the needs of modern travellers. The market is also influenced by trends in the tourism industry and the preferences of outbound tourists, especially among millennials and Gen Z, who prioritise outdoor activities and athleisure.

The Asia-Pacific (APAC) region is expected to contribute approximately 39% to the global markets growth during the forecast period. Factors such as high population density and increasing tourism across the region are major drivers of growth. The growing trend of purchasing baggage products as lifestyle statements rather than merely for utility purposes bodes well for market growth. The expanding presence of online retailers, such as Myntra and Amazon, is increasing product accessibility and broadening market reach, contributing to overall market growth.

Indian Luggage Industry4

Revenue generation of Indias organised luggage industry is expected to see a slowdown in growth to 8–10% in FY 2024–25, compared to 18% in the previous year. This decline is mainly due to the industrys rapid expansion between 2021 and 2024, which created a high base effect. Despite steady demand from tourism and business travel, increased competition and higher inventory levels have led to aggressive pricing, especially in the budget segment, reducing average selling prices and profit margins. To counter these challenges, organised luggage manufacturers are increasingly focusing on domestic production of hard luggage, aiming to reduce reliance on imports. The makers plan to invest 500 550 crore this fiscal year to expand manufacturing capacities, funded mainly through internal cash flows. This approach is expected to keep the debt levels manageable and support financial stability. Additionally, stability in raw material prices and improved inventory management are anticipated to help maintain profitability in the medium term.

The Indian backpack market was valued at approximately USD 1.06 billion in 2024 and is projected to grow significantly, reaching USD 5.27 billion by 2035, with a robust CAGR of about 15.66% during the forecast period from 2025 to 2035. This growth is driven by increasing demand across product types such as travel and hiking/camping backpacks, with nylon and polyester being the preferred materials due to their durability and lightweight properties. The market benefits from rising urbanization, a growing young demographic and a surge in outdoor recreational activities, alongside a wider acceptance of backpacks for daily commuting and travel use. Distribution through both online and offline channels is catalysing market expansion, with e-commerce platforms playing an increasingly important role due to consumer preference for convenience. These dynamics collectively underscore the strong trajectory and evolving consumer trends shaping the Indian backpack markets future.

Indian Leather Goods Industry6

The Indian leather goods market generated a revenue of approximately USD 15.13 billion in 2023 and is projected to grow to USD 25.48 billion by 2030, with a CAGR of 7.7% during 2024-2030. Genuine leather remains the largest revenue-generating segment, accounting for over 58% of the market in 2023, while vegan leather is the fastest-growing segment due to rising consumer interest in sustainable and ethical products. India is a prominent player in the Asia Pacific region and contributes about 6% of the global leather goods market revenue. Major leather production hubs are located in states such as West Bengal, Maharashtra, Uttar Pradesh, Karnataka, and Madhya Pradesh. The market growth is supported by increasing export revenues, rising domestic demand fuelled by changing lifestyles, urbanization and disposable income growth. New market entrants focus on enhancing product aesthetics, functionality, and unique design features like fresh colours and embossed textures. The Indian leather goods market continues to benefit from skilled craftsmanship, competitive production costs, and government support, positioning it for steady expansion in both domestic and international markets.

Growth Drivers

Sustainability and Premiumisation Trends

Consumers are increasingly opting for eco-friendly and premium luggage options. Brands are responding to sustainability by adopting recyclable materials and offering products that combine functionality with style. The market is witnessing a shift towards premiumisation, with consumers willing to invest in high-quality, sustainable travel gear that aligns with their lifestyle and values.

Technological Advancements:

The integration of technology in travel accessories such as GPS tracking, USB charging ports and smart locks, has made travelling convenient. The demand for IoT driven solutions in corporate travel is rising due to its ability to address issues like luggage safety and automation of processes.

Government Initiatives Boosting Tourism and Connectivity

Government programmes such as the UDAN-RCS (Ude Desh ka Aam Naagrik - Regional Connectivity Scheme) aim to enhance regional air connectivity by developing under-served airports, thereby making air travel more accessible and inclusive. Additionally, the Swadesh Darshan 2.0 initiative focuses on developing sustainable and responsible tourist destinations, with 57 destinations notified for development. These initiatives are expected to increase domestic tourism, subsequently increasing the demand for travel gear.

E-commerce Expansion:

The rise of online shopping and personalisation of shopping experiences has made it easier for consumers to browse and purchase a wide variety of luggage options, contributing to market growth.

Opportunities and Challenges

Opportunities

Emerging Markets:

Expanding into developing countries with rapidly growing middle-class populations opens up significant opportunities for luggage brands. These markets often have increased disposable incomes and a rising appetite for travel, both domestic and international. By establishing an early presence, brands can build customer loyalty and gain a competitive edge before the market becomes saturated.

Product Customisation:

Personalised luggage offerings, such as monogramming, customised colour options and designs, cater to consumers desire for individuality. As people increasingly seek unique and expressive products, customisation adds perceived value and emotional connection. This strategy encourages brand loyalty, as customers appreciate products with a personal feel.

Direct-to-Consumer Sales:

Selling through online platforms allows luggage brands to bypass traditional retailers and engage directly with customers. This approach enables better control over branding, customer experience and feedback collection. Additionally, it can result in cost savings that are passed on to consumers, enhancing competitiveness in pricing.

Challenges

Raw Material Price Volatility:

Luggage production relies heavily on materials such as aluminium, leather and various plastics, prices of which often fluctuate due to market dynamics. Such volatility increases the unpredictability of production costs, making it harder for companies to maintain stable pricing and margins. Over time, this can erode profitability and strain financial planning.

Supply Chain Disruptions:

Global political tensions, trade restrictions or logistical challenges can severely impact the smooth functioning of manufacturing and distribution operations. These disruptions often lead to delays in product availability and increased operational costs. For luggage companies, operational delays can translate into lost revenue and strained customer relations.

Changing Consumer Preferences:

Modern consumers are increasingly leaning toward luggage that combines durability, lightness and environmental sustainability. This shift in demand forces companies to invest in new materials, technologies and designs to stay competitive. Failing to adapt to these practices could result in a loss of relevance in a rapidly evolving market.

Company Overview

Brand Concepts Limited is a well-known name in Indias fashion and lifestyle accessories space. The Company specialises in licensed fashion and lifestyle products, particularly focusing on travel gear, womens handbags, small leather items and a range of fashion accessories. It owns popular in-house brands such as Sugarush and The Vertical and also partners with renowned international labels such as Tommy Hilfiger, United Colors of Benetton, Juicy Couture and Aeropostale.

The Company operates through many channels including its brand outlets, multi-brand retail stores, large format retail chains and its online platform, through its own website Bagline. com. Over the years the Company has also built a strong pan-India presence. With a vision to become a market leader in the Indian fashion bags and accessories market, the Company is focused on expanding its product range, creating better designs and building its own manufacturing strength to offer more value to its customers and capture a larger market space. Equally significant has been the strategic expansion of our brand portfolio. We have welcomed OFF WHITE & Juicy couture that complement our vision and broaden our customer reach in both Luxury segment and Women Hand Bags, creating opportunities to strengthen our market position and deepen consumer trust. The combination of in-house manufacturing and brand expansion has created a powerful synergy, equipping us to serve customers better, respond swiftly to market changes, and capture new opportunities.

Key Categories

Backpacks

The Company specialises in manufacturing stylish and durable backpacks, including laptop bags, duffle and gym bags, rucksacks and school bags.

Luggage

The Company carefully curates its travel products to suit diverse individual tastes and preferences. It specialises in crafting both hard and soft luggage that seamlessly blends style with practicality, ensuring convenience for modern travellers.

Handbags, Clutches and Wallets

The Company offers an extensive selection of bags, such as crossbody bags, shoulder bags, totes, hobos and classic handbags. These are available in numerous colours, designs and patterns, spanning from timeless classics to modern styles, catering to different tastes and occasions.

Small Leather Goods

The Company provides a wide selection of mens belts and wallets, catering to various personal preferences and requirements. The range features both casual and formal belts, along with sleek, lightweight wallets designed for easy portability. Designed with a strong focus on durability, the Company crafts timeless leather pieces, incorporating materials like nylon and canvas for modern and fashion-forward alternatives.

Financial Performance

Financial Performance
				(INR Mn)
Particulars	FY25	FY24	FY23	FY22
Net Sales	2919.19	2901.49	1,632.2	861.7
EBITDA	205.89	252.70	212.4	77.5
EBITDA Margin (%)	7.05	8.71	13.00	9.00
Profit Before Tax (PBT)	76.80	181.97	134.6	10.4
Profit After Tax (PAT)	52.33	121.27	100.4	7.6
PAT Margin (%)	1.79	4.18	6.20	0.90
Reported Earnings per share (in INR)	4.22	10.04	9.6	0.66

Key Financial Ratios

Particulars

Particulars	FY25	FY24
Debtors turnover ratio	5.36	7.92
Inventory turnover ratio	1.88	2.92
Current ratio	1.31	1.34
Debt to equity ratio	1.29	0.89
Net profit margin ratio	1.79	4.18

Segment Wise Performance

During the financial year 2024-25, your Company continued to strengthen its market position in the travel gear, backpack, and related accessories segment. Despite a challenging economic environment and fluctuations in consumer spending patterns, the Company achieved steady revenue growth.

On a standalone basis , the total revenue stood at 293.02 crores as compared to 292.63 crores in the previous year, reflecting an increase of approximately 0.13%. The net profit for the year was 52.33 crores, compared to 121.27 crores in the previous year.

On a consolidated basis , the total revenue was 293.02 crores, against 292.63 crores in the previous year, registering a similar growth of 0.13%. The consolidated net profit stood at 52.33 crores as compared to 121.27 crores in the previous year.

The decline in profitability, despite revenue growth, was primarily due to higher operating costs, increased finance costs, and significant capital deployment towards strategic initiatives which includes addition in brands, investment in setting up a manufacturing plant, enhanced brand building activities, business expansion, product innovation, and the merger-related integration costs, all of which have impacted short-term profitability. However, these initiatives are expected to create a stronger foundation and deliver sustainable growth in the coming years.

Brand Concepts Limited remains committed to delivering quality products, enhancing customer experience, and pursuing strategic opportunities for growth, in domestic markets.

Sales Channels

Company-owned Outlets

The Company operates 26 company-owned company-operated (COCO) outlets, each offering a wide variety of products, including luggage and small leather accessories.

Franchisee Stores:

There are 23 franchisee owned company operated (FOCO) stores that support the Companys retail operations. These outlets work exclusively to offer the Companys products.

MBOs and Retail:

To enhance capital efficiency and market reach, the Company is shifting to a master distributor model, forming partnerships with multi-brand outlets (MBOs) across various cities and regions.

Third-party Online Platforms

The Company has established a strong presence on leading e-commerce platforms such as Myntra and Amazon, significantly expanding its reach and visibility.

Proprietary Online Platform:

The Company has launched its own e-commerce platform, baglineindia.com, designed to deliver a smooth online-to-offline shopping experience. This platform is fully integrated with the Companys physical retail stores, also branded as BAGLINE.

Bagline and baglineindia.com

Bagline is the flagship retail chain and e-commerce platform of Brand Concepts Limited (BCL), one of the leading names in Indias fashion accessories market. It offers a well-curated selection of premium travel gear, handbags, small leather goods and other fashion accessories for men and women. The Company has a strong presence with more than 49 exclusive stores across India, supported by a user-friendly online portal. This platform not only allows customers to shop conveniently but also connects them with nearby store inventory, making shopping easier and more accessible. The customers can explore a range of internationally licensed brands such as Tommy Hilfiger, United Colors of Benetton, Juicy Couture and Aeropostale. Bagline also features BCLs in-house brands like Sugarush and The Vertical. The brand offers value-added services like doorstep delivery, gift wrapping, loyalty rewards, referral benefits and a dedicated B2B portal for corporate orders.

Positioned within the premium to bridge-to-luxury (BTL) segment, the Company stands out for its on-trend product strategy, quality products and commitment to delivering exceptional customer service. Whether online or in-store, the brand delivers a seamless and personalised shopping experience, driven by BCLs design-led, omnichannel strategy.

SWOT Analysis

Strength

Robust portfolio of brands

Brand Concepts is the license holder for high-end international brands such as Aeropostale, Juicy Couture, UCB and Tommy Hilfiger. This diversified portfolio enhances brand equity and broadens client reach across different market segments.

Multi-channel Presence

The Company uses a multi-channel approach that includes large format stores such as Amazon, Myntra, exclusive brand outlets (EBOs)and its e-commerce site, bagline.com. In order to penetrate the market more deeply, it makes use of distributor networks, which guarantees accessibility across offline and online touchpoints.

Design and Trend Expertise

A dedicated internal team drives product development, design innovation and trend forecasting, enabling Brand Concepts to anticipate and respond to market trends. Product consistency is supported by robust quality control systems, allowing for the timely launch of relevant products.

Consistent Expansion

The Company is steadily expanding its retail footprint across strategic locations, which enhances brand visibility and market coverage and supports long-term growth.

Weaknesses

High Dependence on International Buying:

The Companys dependence on international buying specially the raw materials from China, exposes it to geopolitical risks, which may disrupt supply chains and impact revenue.

Price War Impact:

Intense pricing competition has exerted downward pressure on sales growth. Traditional and modern trade channels were particularly affected, impacting overall market share.

Opportunities

Manufacturing Expansion:

Brand Concepts setting up its own manufacturing units and acquired IFF Overseas, which is expected to improve margins and quality control.

New Licensing Opportunities

The Company is targeting additional international brand licenses to diversify offerings, catering to the trends of the market.

Digital & E-commerce Growth:

Leveraging its online platform (bagline.com) and developing B2B and loyalty services can boost margins and direct customer engagement.

Expansion into Tier II/III Cities

Strengthening presence in untapped regions, especially in Tier II/III cities with value-for-money.

Threats

Retail and Economic Volatility

Macroeconomic conditions and discretionary spending trends could affect sales in the fashion accessories segment.

Inventory Risk

With expanded retail footprint and multi-brand operations, inventory mismanagement could impact cash flows.

Currency & Licensing Risks

Exposure to forex fluctuations due to imports and licensing agreements, along with a dependence on international licensors strategic decisions affect business profitability.

Risk Management

Brand Concepts has implemented a well-defined risk management framework to swiftly and effectively identify, evaluate and address critical business and operational risks. These risks are ranked based on their likelihood and potential impact. Key risks include demand fluctuations, operational challenges, workforce-related issues and technology-related risks. Given the nature of the Companys operations, it is also exposed to various external risks and uncertainties, such as economic downturns, reduced demand in core markets raw material shortages and price volatility. To counter these, the Company formulates comprehensive mitigation strategies aimed at closely monitoring and managing risks to minimise their effect on operational efficiency and financial stability.

Human Resources

The Companys greatest strength lies in its diverse, and multicultural team that balances hard work with enthusiasm. The company adapts seamlessly to changing times, guided by strong Core Values—Meritocracy, Youthfulness, Entrepreneurship, and Innovation that unite all and drive lasting value for all stakeholders. The Company places great importance on its human resources as key drivers of growth and success, showing an open, dynamic work environment with a people-first philosophy rooted in honesty and trust. The companys core values are deeply embedded not only in the organizational culture but also in the benefits that are delivered to consumers, empowering individuals to take ownership, act with energy and enthusiasm, and innovate fearlessly. The Company has a dynamic work environment, managing a diverse team of over 764 individuals.

Internal Control System and Their Adequacy

The Company upholds a robust internal control system to safeguard its assets from potential loss, unauthorised usage, or disposal. All financial transactions undergo thorough authorisation, meticulous recording and accurate reporting to the managerial team. Adhering strictly to applicable Accounting Standards, the Company ensures precision in maintaining financial records and statements. Internal control mechanisms are customised to align with the Companys scale and operational scope, with clear roles and responsibilities delineated and standard operating procedures enacted to provide a reasonable level of assurance. Regular internal assessments validate the effective execution of these responsibilities. Management rigorously evaluates suggestions and observations, leading to continuous strengthening of controls across various business functions.

Disclaimer

Statements made in this report in describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable securities laws and regulations. Many factors may affect the actual results, which could be different from what the directors envisage in terms of future performance and outlook. Important factors that could influence the Companys operations include global and domestic supply and demand conditions affecting selling prices of finished goods, availability of inputs and their prices, changes in the Government policies, regulations, tax laws, economic developments within the country and outside and other factors such as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of subsequent developments, information or events.