[Pursuant to Regulation 34 read with Para B of Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015]
The Directors of your Company are pleased to present the Management Discussion and Analysis Report for the financial year ended 31st March 2025.
The textile industry accounts for about 11 per cent of Indias manufacturing Gross Value Added (GVA). India is the sixth largest exporter of textiles and apparel and has a share of about 4 per cent of the global trade in this segment. The share of textiles and apparel, including handicrafts, in Indias total merchandise exports stood at about 8% in Financial Year 2024.
In 2024, the global economy navigated moderate growth amidst persistent inflationary pressures and geopolitical instability. A year marked by significant global elections, the immediate impact of which is evident, while long-term effects remain to be seen, added another layer of complexity. Monetary policy, particularly interest rate adjustments in major economies, remained a central focus. Emerging markets exhibited diverse performance, influenced by commodity markets and debt vulnerabilities. Trade tensions and supply chain disruptions continued to strain global commerce and investment, while geopolitical volatility persisted. This confluence of factors created a dynamic and uncertain economic landscape for businesses and policymakers worldwide.
Looking ahead, the global economy in 2025 is projected to grow at a modest but steady rate of 2.8%. While global inflation is expected to continue its downward trend, the pace of decline may vary across regions. Geopolitical tensions and trade uncertainties remain significant risks to the global outlook. A balanced policy approach?€”focused on structural reforms and strengthened multilateral cooperation?€”will be essential to manage these risks and support medium-term growth prospects.
Global GDP growth trend
| 2023 | 2024(E) | 2025(F) | 2026(F) | |
| World | 3.5 | 3.3 | 2.8 | 3.0 |
| Advanced Economies | 1.7 | 1.8 | 1.4 | 1.5 |
| US | 2.9 | 2.8 | 1.8 | 1.7 |
| Euro Area | 0.4 | 0.9 | 0.8 | 1.2 |
| Emerging market and developing economies | 4.7 | 4.3 | 3.7 | 3.9 |
| China | 5.4 | 5.0 | 4.0 | 4.0 |
| India (FY) | 9.2 | 6.5 | 6.2 | 6.3 |
Source: IMF World Economic Outlook. Apr25
Note: IMF forecasts in April were prior to some dilution of tariffs announced by the US E - Estimated F - Forecasted
India continues to be one of the fastest growing major economies. The Indian economy is estimated to have recorded a solid growth of 6.5% in FY 2024-25, on top of a strong 9.2% growth in the previous year. Private consumption expenditure accelerated during the year, whereas gross fixed capital formation decelerated.
Growth was slower in the first half of the year, with the election-related code of conduct slowing down public capex and heatwave incidences impacting consumption, along with the elevated food inflation. Growth recovered in the second half of the year.
Retail inflation eased from 5.4% in FY 2023-24 to 4.6% in FY 2024-25. Inflation fell below the 4%-mark in the last quarter of the fiscal, as food inflation declined substantially. This opened the space for policy rate cuts by the RBI; policy rate was cut by a combined 50 basis points in February and April 2025 meetings. Liquidity conditions that had tightened in early 2025 have eased with a slew of liquidity measures by the RBI.
Indias macroeconomic situation continues to be resilient with fiscal consolidation on track, a healthy level of foreign exchange reserves and current account deficit well within prudent levels. Merchandise exports stagnated in FY 2024-25 while services exports remained buoyant. Accordingly, despite a widening of merchandise trade deficit, the overall current account deficit is estimated to be contained.
India remains the worlds foremost producer and exporter of handmade carpets, leading in both volume and value. In FY 2023?€“24, exports totaled approximately US $1.39 billion, rising to around US $1.5 billion by March 2025, representing nearly 40% of global handmade carpet exports. Indian carpets reach over 70 countries, with key importers including the United States, Germany, United
Kingdom, Australia, Canada, South Africa, France, Italy, and Brazil. Indias historic tradition of craftsmanship, centered in major clusters such as Bhadohi/Mirzapur (UP), Rajasthan, Jammu & Kashmir, Telangana, Gujarat, and others, supports over 2 million artisans?€”mostly rural and women?€”working across a wide range of carpet types (Indo-Persian, silk, wool, Kilim, hand-tufted, etc).
Industry strategies now include digital customization, e-commerce platforms, and sustainable product lines. Government support through skill development, trade events such as ICE 2023, financial incentives and Geographic Indication protections complements the sectors strengths.
Indias carpet manufacturing segment significantly benefits from the countrys broader ambition to scale its textile sector to USD 350 billion by 2030, with exports expected to contribute USD 100 billion from a base of USD 33?€“39 billion in FY 2024?€“25. Though full-year FY 2024?€“25 carpet export figures are yet pending, export momentum aligns with sectoral growth trends.
The industry is backed by government support mechanisms including the expanding Production Linked Incentive (PLI) scheme, PM MITRA textile parks, proactive trade agreements (e.g. India-UK FTA eliminating textile tariffs), and focused duty rationalization efforts.
However, the carpet industry faces significant challenges such as adoption of outdated weaving technology, high fixed-cost structures, infrastructure gaps, and mounting competition from machine-made imports?€”especially from Turkey, which imposes high import duties on Indian origin carpets while Indias current duty structure is disproportionately favorable.
These constraints collectively exert pressure on operating margins. As the Company invests in automation, design innovation, strategic partnerships, and digital marketing, its performance trajectory remains tied to both domestic reforms and global trade dynamics.
Opportunities:
Expansion of PM MITRA Parks and PLI schemes aimed at improving infrastructure, reducing logistics costs, and supporting capacity expansion for textile manufacturers.
India targets US $100 billion in textile exports by 2030 (from ~US $35?€“39 billion currently), with strong demand for high-value handmade carpets and floor coverings.
Increasing demand for eco-friendly, natural fiber, and handcrafted carpets aligns with Indias traditional strengths in artisanal craftsmanship.
Increasing adoption of e-commerce platforms, digital design tools, and online customization enables direct access to global customers and niche interior segments.
Opportunities to expand into carpet tiles, luxury vinyl flooring, and custom floor coverings catering to hospitality, office, and commercial spaces.
Technological and Cost Disadvantages
Continued reliance on manual production and outdated machinery leads to lower productivity and higher fixed costs compared to global competitors using automated systems.
Export competitiveness is hampered by unequal tariff structures, such as high import duties on Indian carpets in Turkey (~46%) versus lower duties on machine-made imports into India (~20%).
Complex labor laws, infrastructure gaps, and fluctuating raw material prices increase operational uncertainty and reduce cost efficiency.
Slowing demand in key export markets (US, UK, EU), rising ESG compliance requirements, and exchange rate volatility pose risks to export volumes and profit margins.
With increase in raw material prices, Scarcity of wool fibers, Supply delays and discontinuity, the Indian manufacturers are not able to compete with other carpet producing countries and this has had an impact on the exports of the carpets from India.
The Company operates in single segments i.e. carpets business. Hence, The Business Segments reporting in accordance with Accounting Standard 17 Segment Reporting is not applicable.
The outlook for the Indian carpet and flooring industry remains positive, underpinned by sustained global demand, government support, and emerging opportunities in digital and sustainable manufacturing. India continues to be the worlds largest exporter of handmade carpets, commanding nearly 40% of global market share, and maintaining a stable growth trajectory. The sector is well-positioned to benefit from the governments broader vision to expand textile exports to US $100 billion by 2030, with carpets and floor coverings identified as a key value-added export segment.
The industry is expected to grow steadily over the medium term, with the Indian carpet market projected to reach US $4.17 billion by 2033, up from approximately US $2.55 billion in 2024, at a CAGR of 5.6%. The expansion is driven by rising demand for eco-friendly, artisanal, and customizable products, particularly in high-income markets like the United States, Europe, the UK, and newer geographies including Scandinavia and Latin America. The growing importance of sustainability and traceability in global sourcing is creating favorable conditions for Indian handmade carpets, which are perceived as ethical, durable, and environmentally friendly.
Domestically, increasing urbanization, rising disposable incomes, and evolving interior décor preferences are spurring demand for high-quality carpets, rugs, and flooring materials in residential and commercial sectors. At the same time, the governments initiatives?€”such as the PM MITRA Parks, PLI scheme expansion to textiles and MSMEs, and targeted investment in export clusters like Bhadohi and Mirzapur?€”are expected to enhance production capacity, reduce costs, and improve logistical efficiencies across the value chain.
However, the industry must navigate ongoing structural challenges, including technological gaps, high fixed costs, and trade-related asymmetries. While countries like Turkey and China continue to gain ground in machine-made carpets with automated production and aggressive pricing, Indias long-term competitiveness will depend on modernization, skill development, and adoption of digital technologies such as AI-enabled design, virtual customization, and direct-to-consumer (D2C) marketing.
Overall, the Company remains cautiously optimistic about the medium- to long-term prospects of the Indian carpet industry. By leveraging Indias artisanal heritage, aligning with sustainable manufacturing trends, and strengthening its presence in global and digital markets, the Company aims to capture emerging growth opportunities while mitigating structural and market-driven risks.
In line with the regulatory requirements, the Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. A detailed exercise is being carried out at regular intervals to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.
In todays complex business environment, almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organizations success. Globalization with increasing integration of markets, newer and more complex products and transactions and an increasingly stringent regulatory framework has exposed organizations and integrated approach to risk management. Timely and effective risk management is of prime importance to our continued success. The sustainability of the business is derived from the following:
Identification of the diverse risks faced by the company.
The evolution of appropriate systems and processes to measure and monitor them.
Risk Management through appropriate mitigation strategies within the policy framework.
All these risks are continuously analyzed and reviewed at various levels of management through an effective information system.
The Company has implemented a comprehensive and well-structured internal control system that is aligned with the nature, scale, and complexity of its business operations. The system is designed to ensure efficiency in operations, compliance with applicable laws and regulations, and safeguarding of assets. It encompasses all critical business processes, including procurement, production, sales, finance, and human resources. The Company continuously monitors the effectiveness of these controls through regular management reviews.
The Company continues to have good and cooperative relationships with its employees. This positive environment helps improve employee performance and encourages them to work effectively with the Company.
The Company also ensures a safe and respectful working environment, with strict measures in place to prevent any kind of physical, verbal, or sexual harassment.
There have been no material changes in the key financial ratios or other financial parameters of the Company during the financial year, as compared to the previous year. The Company continues to maintain financial stability and operational consistency across all core performance indicators.
The statements made in this Management Discussion and Analysis report describing the Companys objectives, expectations, projections, estimates, or forecasts may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events.
Actual results may differ materially from those expressed or implied due to various risks and uncertainties. Key factors that may impact the Companys performance include fluctuations in demand and supply conditions, availability and cost of working capital and raw materials, changes in government policies and regulatory environment, tax structures, and broader economic developments in India and across global markets.
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