C P S Shapers Ltd Management Discussions

The following Management Discussion and Analysis (MD&A) provides an updated overview of the performance, operations, and financial condition of CPS Shapers Limited for the financial year ending 31st March, 2025. This analysis aims to provide shareholders, investors, and other stakeholders with a comprehensive understanding of the companys strategies, challenges, and future outlook.

The Shapewear market in India has undergone a significant transformation, evolving from a category solely focused on functionality to one that embodies fashion and style. This segment has effectively carved out a distinct space for itself, fuelled by increasing disposable incomes, a growing interest in fashion and a desire for comfort. As a result, Shapewear has emerged as one of the rapidly expanding fashion sectors in India. The industry is currently dominated by unorganised players, but there is a shift towards organised players that offer branded, stylish and comfortable Shapewear. Consumers today are seeking Shapewear that not only serves a functional purpose but also reflects their personal style and individuality. The growing preference for branded Shapewear has led the industry to move from being price sensitive to brand sensitive, with the premium segment showing great promise in catering to changing consumer needs.

We strongly believe that every business entails risks, which can vary in terms of their impact, likelihood of occurrence and speed of onset. These risks are constantly evolving and changing, and we consistently monitor the external environment to identify potential risks and evaluate their potential impact on our objectives. Our primary focus is to manage and mitigate these risks to acceptable levels. To achieve this, we rely on the guidance of the Board of Directors, which oversees our enterprise-wide risk management initiatives. We strive to leverage our resources to convert opportunities into tangible outcomes.

• Increase in fashion consciousness: In India, the domestic Shapewear market is experiencing a tremendous roar and the market is witnessing the advent of premium Shapewear brands. Customers do not overlook crucial requirements like quality and comfort and are willing to pay the amount required and this is a great opportunity for the Industry.

• New Fabrics & Trends: Cotton has always been highly preferred in this segment, but today with technological advancements, we notice a wide array of comfortable fabrics being used. From nylon to organic cotton, spandex blend cotton fabric to modal and from micro-fiber to more durable material. This has led to product innovations in the industry.

• Shifting to Branded Products: There has been a shift in market demand from unbranded products to

branded products, mainly driven by higher awareness and celebrity advertising.

• Exports: India is the 3rd largest exporter of Textiles & Apparel in the world. Capacity built over years has led to low cost of production per unit in Indias textile industry. This has lent a strong competitive advantage to the countrys textile exporters relative to key global peers.

• Multiple channels of easy product availability, including EBOs, MBOs and online platforms that provide the added convenience of home delivery.

• Large domestic organised enterprises are constantly evolving to capture a larger market share, but they are facing stiff competition from the unorganised industry as well as international brands entering India.

• Threat from fluctuating prices of the raw materials used in production, such as cotton, yarn, and chemicals, and thereby raising price of the finished products may not be viable in a competitive market.

• Today Shapewear products are considered more of a fashion accessory than a necessity. Being a fashion product, industry players must adapt to the constantly evolving fashion trends in the mass market to remain viable.

• Rapid changes in consumer preferences from one brand to another makes it difficult for a Company to establish a permanent connect and in gaining brand loyalty consequently leading to loss of business to competitors.

• Emergence of start-ups in the Shapewear industry with aggressive marketing and discount to attract customers.

The Company is in a single reportable segment only, i.e., Shapewears.

The growth potential of the Indian Shapewear market is immense and holds tremendous opportunities. Exposure to premium products and international standards of quality and design have enabled consumers to seek Shapewear shopping and consumption as an experiential process over just attending to basic essential needs. Companies are adapting to new consumer priorities, and digital is providing a nexus for growth. Improving fashion trends, increasing disposable income, and changing consumer lifestyles along with preferences are the factors expected to boost market growth. The availability of products in a variety of fabrics such as cotton, polyester, nylon, rayon, silk, and cotton blends is driving the product demand. The Indian consumers are becoming more aware and environmentally conscious, and want to buy products from brands that follow ethical and sustainable practices - whether it is exploring ecofriendly fabrics, sustainable manufacturing processes, reducing the carbon footprint or cutting down waste. The time is ripe for the industry to embrace a more sustainable model to contribute their share for the environment and stay ahead of the game.

The Company has a proper and adequate internal control system to ensure effective governance, risk management, operational efficiency and all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions authorized, recorded and reported correctly. The internal control is supplemented by extensive program of internal audits, review by management and documented policies, guidelines and procedures.

Companys financial performance remains closely tied to our operational efficiency and market dynamics. During the financial year, we achieved operational performance, including increased productivity, optimized supply chain, and improved cost control measures. The financial performance of the Company has been summarized in the Directors Report under the heading ‘Financial Summary and Highlights.

The industrial relations have been cordial and satisfactory. We recognize the importance of Human resources and give full respect for its development and are committed to the development of our human resource. Efforts continue to make the organization a great place to work. There were 302 number of people employed on the rolls of the company as on March 31, 2025.

Facts and figure in the Managements Discussion and Analysis describe the companys projection and estimates may be "forward looking predictions" and it may differ from the results.