Himatsingka Seide Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

Global growth moderates to 3.0% in 2026; India remains the fastest-growing large economy

Two forces pulled the world economy in opposite directions through 2026. The war in the Middle East delivered a supply shock and renewed energy price volatility. The artificial intelligence investment cycle delivered a demand-led expansion in technology goods and services. Netting the two, the International Monetary Funds (IMF) July 2026 World Economic Outlook Update places global growth at 3.0% in 2026, down from 3.5% in 2025.

The distribution of that growth matters more than the average. Energy importers and economies with thin fiscal bu ers are absorbing most of the war shock, while economies embedded in the technology value chain have seen forecasts upgraded. Emerging economies are projected to slow from 4.5% in 2025 to 3.8% in 2026, and advanced economies from 1.9% to 1.7%. Disinflation has stalled, with price pressures proving more persistent than expected through 2026. That keeps central banks cautious on the pace of rate cuts and delays the relief that cheaper financing would give to working capital intensive sectors such as textiles.

India is expected to lead major economies in 2026, with growth of 6.4% supported by resilient private consumption and continued strength in services activity.

While global economic growth moderated during 2026 amid geopolitical developments and inflationary pressures, several structural growth drivers continued to support demand across markets. Increased investments in technology, easing inflationary trends in key economies, and gradual normalization of supply chains are expected to support global economic activity over the medium term. India continues to remain among the fastest-growing major economies, reinforcing its position as an attractive manufacturing and consumption hub.

Table 1: Real GDP growth by geographies (YoY % change)

Country / Region	2021	2022	2023	2024	2025	2026(P)
USA	6.1%	2.5%	2.9%	2.8%	2.1%	2.3%
Euro Area	6.3%	3.5%	0.4%	1.0%	1.4%	0.9%
UK	8.4%	4.8%	0.4%	1.0%	1.4%	1.0%
Japan	2.7%	0.9%	1.5%	-0.2%	1.1%	0.6%
India	9.7%	7.6%	9.2%	7.1%	7.7%	6.4%
China	8.6%	3.1%	5.4%	5.0%	5.0%	4.6%
Indonesia	3.7%	5.3%	5%	5.0%	5.1%	5.0%
World	6.6%	3.6%	3.5%	3.5%	3.5%	3.0%

Global goods and services trade set a record in 2025

World trade in goods and services reached a record of close to US$ 35 trillion in 2025, up from US$ 33 trillion in 2024. Goods trade grew 4.6%, accelerating from 2.4% the previous year, while services trade added 5.3% and reached its highest ever share of world trade. Volume rather than price drove the expansion. Beneath the headline, the composition of trade continued to shift. Nearshoring gained ground and US-China bilateral flows contracted sharply, so a record total conceals a redistribution of who trades with whom. For Indian exporters, the redistribution is the part that matters.

Goods trade growth is projected at 1.9% in 2026, with services at 4.8% continuing to outpace goods. Slower output growth, elevated tariffs, higher trade costs, the Middle East conflict and shipping constraints all weigh on the forecast. The unresolved variable remains US tari policy, where the position changed twice within a single month in 2026 and where a further legal or political reversal would reset sourcing economics again.

INDIA ECONOMIC OVERVIEW

Indias real GDP growth is estimated at 7.7% in FY 2026 and stays well ahead of every major economy

Indias real GDP is projected to grow at 7.7% in FY 2026, up from 7.1% in FY 2025 and well ahead of the 6.2% that was projected for the year twelve months ago. Infiation is the more consequential change. Consumer price inflation fell to 2.1% in FY 2025 from 4.6% in FY 2024 and is projected to return to 4.7% in FY 2026.

Indias economic outlook remains positive in the medium term. Structural drivers such as robust domestic demand, infrastructure investment, digital transformation, manufacturing expansion through initiatives like PLI schemes, and favorable demographics are expected to underpin steady growth. While external headwinds like global trade tensions, geopolitical risks, and financial market volatility persist, India is well-positioned to achieve sustainable growth in the 6-7% range over the next few years, provided reforms continue and global conditions stabilize.

Indias economic momentum continues to be supported by rising disposable incomes, urbanization, infrastructure development, digital transformation, and a growing middle class. These structural factors are enhancing consumption across categories and creating favourable conditions for sustained growth in lifestyle and home textile segments.

Per capita income continues to show an upward trend, though the gap with developed markets is significant

Indias GDP per capita has risen from US$ 1,916 in 2020 to an estimated US$ 2,680 in 2025, recording a healthy CAGR of 7% over the past five years; the fastest among major economies, alongside the US and the UK. It is projected to increase further to US$ 2,810 in 2026. Even so, Indias per capita income remains far below that of other major world economies, roughly a thirty-third of the US (US$ 89,990 in 2025), a twenty-first of the UK (US$ 57,610) and a fifth of China (US$ 13,970), which indicates huge potential for growth and economic development and augurs well for future prospects. Notably, while advanced economies such as Japan have seen per capita income contract over this period (CAGR of -2%), India has combined a low base with consistent expansion, pointing to a long runway for consumption-led demand as incomes converge upwards.

Table 2: GDP per capita, current prices (Values in US$)

Country	2020	2021	2022	2023	2024	2025(E)	2026(P)	CAGR (2020-25)
USA	64,454	71,232	77,801	82,254	86,170	89,990	94,430	7%
UK	40,231	46,731	46,234	49,213	53,340	57,610	61,060	7%
Canada	43,573	52,912	56,358	54,376	55,210	55,760	60,300	5%
Japan	40,160	40,155	34,080	33,845	33,820	35,970	35,700	-2%
China	10,696	12,878	12,968	12,961	13,450	13,970	14,870	5%
India	1,916	2,250	2,361	2,547	2,590	2,680	2,810	7%

GLOBAL TEXTILE AND APPAREL T&A INDUSTRY SCENARIO

Global T&A trade edged up to US$ 900 billion in 2025, with growth sustained

Global Textile and Apparel (T&A) trade is estimated to increase to US$ 904 billion in 2025 from US$ 893 billion in 2024, registering a modest 1% year-on-year growth. While global trade has shown signs of recovery following the post-pandemic slowdown, the overall growth trajectory has remained subdued, with the market recording a CAGR of 2% during 2010–2025. The industry continues to face structural challenges, including persistent geopolitical uncertainties, inflationary pressures, evolving sourcing strategies, and weak consumer demand across key markets such as the US and Europe. Despite these headwinds, global T&A trade has demonstrated resilience, supported by gradual demand stabilization, easing inflation, and improving inventory levels. Looking ahead, trade activity is expected to strengthen further as consumer spending recovers, retail inventories normalize, and sourcing diversification continues to reshape global supply chains.

The global sourcing landscape continues to undergo structural transformation. As brands seek diversified and resilient sourcing destinations, India has emerged as a preferred alternative due to its integrated textile ecosystem, improving competitiveness, sustainability focus and large-scale manufacturing capabilities. These trends present long-term opportunities for Indian textile and home textile exporters.

China still accounts for a third of global T&A exports, but buyers continue to build alternate sourcing bases

In terms of exports, China remains the dominant player, with a total export value of US$ 291 billion, accounting for 32% of global trade. While the EU ranks second with US$ 69 billion in exports, Vietnam stands out as the third-largest exporter (US$ 46 billion), reflecting its rising role in global sourcing, amid shifting supply chains. Bangladesh, focused almost entirely on apparel, and India, with a more balanced profile favoring textiles, follow in the rankings with US$ 40 billion and US$ 37 billion in total exports respectively. With global buyers looking to de-risk their supply chains, there has been a shift in sourcing from China in recent years, and going forward, there is good opportunity for countries like India to further increase their share.

Table 3: Top exporters of T&A (Values in US$ billion)

		Exports Value (2025)
Rank	Country/ Region	Textile	Apparel	Total	Total T&A Export
1	China	145	146	291	32.2%
2	Extra EU-27*	29	40	69	7.6%
3	Vietnam	7	39	46	5.1%
4	Bangladesh	3	37	40	4.4%
5	India	21	16	37	4.1%
6	Turkey	14	17	31	3.4%
7	USA	14	5	19	2.1%
8	RoW	131	240	371	41.0%
	World	364	540	904

The ongoing diversification of global supply chains under the China+1 strategy presents a significant opportunity for India. Global buyers increasingly prefer sourcing partners capable of offering scale, quality, compliance and end-to-end supply chain visibility. Indias integrated textile value chain positions it favorably to benefit from this structural shift.

Several other trends, below, are shaping global trade dynamics, and are expected to have an impact, in the future:

• Geopolitical factors influencing global trade

Geopolitical conflicts in Russia–Ukraine, the Middle East, India–Pakistan tensions etc. remain pressing points that will dictate the trade scenario. There is a gradual shift toward easier global monetary conditions, supported by disinflation and cautious central bank easing. This is likely to gradually lift demand, in coming quarters. However, global growth faces headwinds from sentiment, geopolitics, and fiscal constraints.

• US tari policy

The imposition of US reciprocal tariffs has created an uncertain scenario, globally. Once the exact tariffs are finalized for all the countries, it will trigger a realignment of sourcing bases, investment flows and manufacturing bases, as buyers and exporters seek to maximize the tari advantage.

• Regionalisation and China+1 sourcing

Buyers are diversifying away from a single-country dependence, building parallel capacity in South and Southeast Asia while also shortening supply lines through nearshoring to Mexico, Turkey and North Africa, for speed-to-market. Trade blocs and regional agreements are increasingly determining where capacity is added, and countries offering scale, duty advantage and reliable lead times, stand to gain the most from this realignment.

• Sour cing consolidation

Brands and retailers are consolidating their supplier base, preferring vertically integrated partners that can provide end-to-end solutions over smaller, fragmented vendors. This enhances supply chain control and efficiency for the brands, and is expected to continue. Accordingly, manufacturers that are vertically integrated and have large-scale capacities have a competitive advantage in the sourcing landscape.

• Ra w material and logistics cost volatility Cotton and man-made ber prices, energy costs and freight rates have remained volatile, with Red Sea and other shipping disruptions lengthening transit times and raising landed costs. Sustained volatility compresses margins across the value chain and is pushing brands towards longer-term contracts, dual sourcing and greater inventory discipline.

• Digitalization & AI integration

The role of digital technologies and AI in the textile sector is growing rapidly, especially in areas like demand forecasting, quality control, and inventory management. With positive outcomes expected, these technologies will likely become central to operational efficiency and competitiveness across the industry.

• Sustainability & traceability

Global brands are getting increasingly stringent with sustainability and traceability, driving major changes across the textile supply chain. Brands like Nike and H&M now demand eco-friendly materials, lower emissions, and transparent sourcing. Accordingly, suppliers need to adopt cleaner technologies, meet certification standards, and ensure supply chain traceability. While compliant suppliers will gain stronger brand partnerships, others risk being excluded.

• Pr oliferation of bilateral trade agreements With multilateral progress stalled, countries are pursuing bilateral and regional agreements to secure preferential access. Duty differentials created by these agreements are becoming a decisive factor in sourcing decisions, and exporters in markets that conclude agreements with the US, EU and UK are likely to see a step-change in order flows.

• Tightening regulatory and compliance requirements Beyond voluntary brand standards, importing markets are legislating supply chain obligations, including the EUs due diligence and eco-design rules, extended producer responsibility regimes for textiles, and forced-labour import restrictions in the US. Compliance is becoming a precondition for market access rather than a differentiator, favoring suppliers with documented, auditable value chains.

• Escalation of the US-Iran conflict

The intensi cation of hostilities between the US and Iran in FY 2026 has re-priced risk across West Asia, disrupting shipping through the Strait of Hormuz and the Red Sea corridor. For textile exporters, the impact is felt less through demand, and more through freight rates, insurance premiums and delivery reliability.

• Rising crude prices lifting polyester yarn costs The conflict-driven firmness in crude oil has flowed through to petrochemical feedstocks, with PTA and MEG prices moving up and pulling polyester staple ber and lament yarn prices with them. Since man-made bers account for a growing share of home textile and apparel blends, the increase compresses spreads for spinners and fabric producers who cannot pass costs through in an order book priced months in advance.

INDIAN T&A INDUSTRY OVERVIEW

Indias T&A industry reached US$ 194 billion in FY 2026, anchored by a US$ 158 billion domestic market

Indias T&A industry is one of the largest in the world, playing a crucial role in the countrys economy through employment generation, domestic consumption, and exports. The Indian T&A industry size for FY 2026 is estimated at US$ 194 billion, comprising a domestic market of US$ 158 billion and exports worth US$ 36 billion. The domestic market is dominated by apparel, contributing US$ 116 billion, followed by technical textiles at US$ 30 billion, and home textiles at US$ 12 billion. On the export front, textiles account for the larger share at US$ 21 billion, while apparel exports stand at US$ 16 billion. This structure reflects Indias strong domestic consumption, driven by a large and growing middle class, rising urbanization, and shifting fashion preferences, while the relatively lower share of exports points to significant untapped global potential. With targeted initiatives from both private industry and government to deepen the manufacturing ecosystem, India is well-positioned to enhance its competitiveness and expand both its domestic and international T&A footprint in the coming years.

Textile output rose about 11% in FY 2026, while apparel output fell about 16%

The Index of Industrial Production for the two segments moved in opposite directions during FY 2026. The textiles index averaged about 11% above FY 2025, its strongest reading in the current series, supported by spinning and fabric volumes and by the return of cotton cost competitiveness through the second half of the year. The apparel index averaged about 16% below FY 2025.

The divergence reflects end market rather than capacity. Textile output serves a mix of domestic conversion demand and made-ups exports, both of which held up. Apparel output is more exposed to US order flow, which was deferred through the first three quarters, while tari levels were unresolved. The pattern has continued into the first quarter of FY 2027, with the textiles index averaging about 136 against about 94 for apparel, which indicates that the recovery in garment orders lags the recovery in fabric and made-ups, rather than moving with it.

Indias domestic T&A market reached US$ 158 billion in FY 2026 and is set to touch US$ 250 billion by FY 2031

Indias domestic T&A market has grown from US$106 billion in FY 2020 to US$158 billion in FY 2026, registering a CAGR of 7%. Apparel continues to dominate the domestic market, increasing from US$ 78 billion in FY 2020 to US$ 116 billion in FY 2026. Technical textiles and home textiles have also witnessed steady growth, reaching US$ 30 billion and US$12 billion, respectively, in FY 2026.

Although growth moderated in the recent period due to a subdued consumption environment, Indias domestic T&A market continues to demonstrate strong long-term potential. Supported by rising disposable incomes, urbanization, favorable demographics, and increasing consumer spending, the market is projected to reach US$ 250 billion by FY 2031, reflecting a CAGR of 9% over FY 2026-31. Within this apparel-led market, technical textiles are expected to be the fastest-growing segment, expanding at a CAGR of 12.5% to reach US$ 54 billion by FY 2031. Home textiles are also projected to maintain healthy growth at a CAGR of 6%, reaching US$16 billion, while the apparel segment is expected to remain the largest contributor with a market size of US$180 billion by FY 2031.

Indias T&A exports slipped 1% in FY 2026, giving back part of the previous years gain

Indias T&A exports have remained largely stagnant in recent years, increasing modestly from US$ 34 billion in FY 2020 to US$ 36 billion in FY 2026, reflecting a low CAGR of 1%. After the 6% growth recorded in FY 2025, exports declined marginally by 1% in FY 2026, indicating that the recovery is yet to gain durable momentum. Apparel continues to be the leading export segment, accounting for over 43% of total exports last year. Apart from home textiles and other products, most segments have seen limited change over the last six years. Looking ahead, the Free Trade Agreements (FTAs) already in force with the UAE, Australia and the UK, together with the concluded India-EU agreement awaiting rati cation, and ongoing talks with the US, are expected to lift exports meaningfully. Moreover, the China+1 sourcing strategy of global buyers, positions India as a key alternative, offering further growth potential for the countrys export performance.

Indias T&A imports jumped 17% in FY 2026, well ahead of the six-year trend

Indias T&A imports have seen a steady increase over the years. In the last fiscal year, imports grew 17%, reaching US$ 11.4 billion, up from US$ 9.8 billion, and comparatively higher than the last six-year CAGR of 5%. Fiber and fabric consistently remain the two largest import categories, contributing 46% in FY 2026. Yarn imports have grown to US$ 2.1 billion in FY 2026 from US$ 0.5 billion in FY 2020, while apparel imports saw fluctuations, standing at US$ 1.7 billion in FY 2026 against a peak of US$ 1.8 billion in FY 2023. Home textiles continue to represent a small and stable share of total imports, whereas other items have risen sharply over the last two years to US$ 2.0 billion. With increasing domestic demand and a growing textile manufacturing ecosystem, imports are expected to rise in the future. China remains the dominant import partner, contributing a substantial 37% of Indias total T&A imports. Bangladesh and the EU each account for 11%, followed by the US and Vietnam at 5% each.

Key trends and business factors shaping the market in FY 2026 and beyond

Indian cotton prices have realigned with global benchmarks

India has historically been among the most competitive cotton sources, and after a period in which domestic prices ran ahead of international benchmarks, that gap has largely closed. Through FY 2025, Indian cotton (Shankar 6) traded at a premium to comparable Brazilian cotton and to the Cotlook A index, driven by the import duty on cotton, a sharp rise in the Minimum Support Price, and lower domestic yields. The position reversed over FY 2026: softer global prices, combined with the withdrawal of the 11% import duty for the August-

December 2025 and June-October 2026 windows, has brought Indian cotton back to broad parity with international benchmarks. This restores a measure of raw material cost competitiveness across the value chain and eases the margin pressure that spinners and vertically integrated players carried through the previous year. While the long-term sustainability of this advantage will depend on productivity improvements under the Cotton Mission, recent developments have strengthened the competitiveness of Indian manufacturers in global markets.

Government support has been consolidated into a single INR 10,000 crore textile programme

The Union Budget for FY 2026-27 consolidated the Governments support architecture for textiles into a single Integrated Programme for the Textile Sector, with an allocation of around INR 10,000 crore. It combines five components: the National Fiber Scheme for ber self-reliance across natural, man-made and new-age bers; the Textile Expansion and Employment Scheme, offering capital support for machinery, technology upgradation and common testing and certification facilities; a uni ed National Handloom and Handicraft Programme; and the Tex-Eco initiative for sustainable manufacturing; and continued funding for skilling and cluster development. Mega Textile Parks will now be awarded through a challenge route, weighted toward technical textiles and higher value addition. The existing framework continues in parallel, with seven PM MITRA parks under implementation against a targeted investment of around INR 70,000 crore, RoSCTL for garments and made-ups extended to 30 September 2026, and RoDTEP covering non-apparel textiles over the same window. On raw material, the Cotton Mission remains the principal lever, working on yield, ber quality and modernization of ginning and pressing capacity to reduce reliance on periodic import duty waivers and high support prices. Collectively, these measures target the two binding constraints on Indias competitiveness, raw material cost and manufacturing scale, and their commercial relevance has increased now that the India-UK CETA is operational and the India-EU FTA concluded.

FTAs with major markets are widening Indias preferential access

India is strengthening its position in the global trade landscape through a series of FTAs aimed at expanding market access. Agreements are already in force with the UAE, Australia, Japan, South Korea and, most recently, the UK, whose Comprehensive Economic and Trade Agreement took effect on 15 July 2026. Negotiations with the EU concluded in January 2026 and now await rati cation, while talks continue with the US and New Zealand. These agreements are particularly significant for Indias T&A sector, which is heavily export-driven and competes against suppliers that have long enjoyed preferential access to the EU and UK markets.

The implementation of the India-UK Comprehensive Economic and Trade Agreement and the successful conclusion of negotiations for the India-EU FTA represent important milestones for the Indian textile industry. These agreements are expected to enhance Indias competitiveness, improve market access and create significant long-term export opportunities across textiles, home textiles and apparel segments.

US reciprocal tariffs shaped most of FY 2026 before a decisive reset in February 2026

For the greater part of FY 2026, Indian T&A exports operated under a punitive US tari structure that, at its peak, took the effective duty on Indian goods to nearly 50%, comprising a 25% reciprocal tari and a 25% additional levy. The consequences were visible across the value chain: US retailers deferred order placement, shifted to shorter buying cycles, and pushed a portion of the tari burden onto Indian suppliers, who absorbed part of the cost to protect volumes. Margins across the exporting base compressed as a result, and Indias T&A exports declined. The position reset in February 2026, when the additional levy was withdrawn and the effective duty on Indian goods was brought back into line with that applied to competing sourcing destinations. Enquiry levels and order placement began to recover through the fourth quarter, but the reset came too late in the year to reverse the decline, leaving FY 2026 export performance weighed down by the preceding three quarters.

The India-UK CETA and the concluded India-EU FTA open a second growth engine

Two agreements finalized within a six-month window have altered the addressable market for Indian T&A. The India-UK Comprehensive Economic and Trade Agreement came into force on 15 July 2026, granting duty-free access across 1,143 T&A tari lines and eliminating UK duties of up to 12%. Negotiations on the India-EU FTA concluded on 27 January 2026 after eighteen years and the agreement provides for immediate or phased elimination of the 8-12% duties currently applicable on Indian textiles, apparel and home textiles. The commercial significance is greatest in categories where India is under-represented rather than where it already leads. India holds only about 6% of the EUs home textile import market and roughly 6% of EU cotton home textile imports, a segment where Pakistan has long benefited from preferential access. Taken together, the EU and UK represent a significant home textile pool, giving Indian suppliers meaningful headroom as duty parity is established.

Cotton duty relief has eased input costs and improved cost competitiveness

The Government withdrew the 11% import duty on cotton (HS 5201), including basic customs duty and the Agriculture Infrastructure and Development Cess, for the period 1 June to 31 October 2026. This is the second such waiver within twelve months, following a similar exemption between August and December 2025 and the reinstatement of the duty on 1 January 2026. The exemption has narrowed the gap between Indian and international cotton prices and improved competitiveness against Asian peers that already enjoy duty-free access to raw cotton. During FY 2026, Indian cotton prices moved closer to global benchmarks, improving cost competitiveness across the textile value chain and strengthening the position of Indian manufacturers in global markets.

Freight and logistics volatility from the West Asia conflict weighed on H2 FY 2026

Escalation in West Asia disrupted routings through the Red Sea and the Strait of Hormuz during the second half of FY 2026, with diversions around the Cape of Good Hope lengthening Asia-Europe transit times and lifting freight, insurance and fuel costs. The impact was felt largely in bulk, lower-value-density categories such as bed linen and terry towels, where extended lead times also raised working capital intensity. Despite these temporary disruptions in global logistics networks during FY 2026, supply chains demonstrated improving resilience. As freight markets gradually stabilize and sourcing patterns normalize, industry participants are expected to benefit from improved operational predictability and efficiency.

Retailer inventory caution is giving way to a normalizing buying cycle

FY 2026 was characterized by deliberately lean retail inventories, short order horizons and low forward visibility, as buyers waited for tari clarity before committing to programmes. By the fourth quarter, US retail price points reflecting the earlier tari pass-through had been accepted by end consumers, and sourcing patterns began to normalize. With tari levels now settled and preferential access under recent FTAs taking effect, the sector is positioned for a restocking cycle in FY 2027, with order books expected to lengthen and pricing negotiations to stabilize. Recovery will not be uniform: suppliers with certified capacity, design capability and demonstrated compliance are likely to capture a disproportionate share of the first wave of replenishment orders.

Firmer crude prices are feeding through to polyester yarn costs

The conflict-driven strength in crude oil has passed through the petrochemical chain, lifting PTA and MEG prices and, with them, polyester staple ber and lament yarn. With man-made bers accounting for a rising share of home textile and apparel blends, the increase compresses spreads for spinners and fabric producers working against order books priced several months in advance. It also narrows the cotton-polyester price differential that has underpinned the shift towards synthetics in recent seasons, and may slow that substitution at the margin. Vertically integrated players with in-house spinning and the ability to flex ber mix retain more room to protect margins than converters buying yarn on the open market.

Sustainability and traceability are becoming strategic differentiators in global sourcing

Sustainability and traceability are increasingly becoming strategic differentiators rather than mere compliance requirements. Manufacturers that have established robust ESG frameworks, responsible sourcing practices and transparent value chains are well positioned to deepen relationships with global brands and secure long-term growth opportunities. Sourcing decisions at global retailers are increasingly gated on environmental and social performance rather than influenced by it. Traceability from farm to finished product, certified and preferred ber programmes, verified water and energy metrics, and documented labour standards are now standard components of vendor qualification, reinforced by tightening EU requirements on eco-design, product-level disclosure and supply-chain due diligence. For Indian suppliers this cuts both ways. Compliance carries real cost and administrative burden, but for vertically integrated players with visibility across the chain it functions as a defensive advantage, restricting the competitive set to a small group of qualified vendors. Companies that have secured top-decile global ESG rankings have converted compliance from a cost center into a commercial differentiator, and this is likely to remain a determinant of preferred-vendor status in the EU and UK as FTA-led volumes build.

The US–Iran conflict has reintroduced geopolitical risk into sourcing calculus

The escalation in hostilities between the US and Iran through FY 2026 has re-priced risk across West Asia and reopened questions around the security of the Strait of Hormuz and the Red Sea corridor. For Indian textile exporters the consequence is largely logistical rather than demand-side: longer routings, elevated container and insurance costs, and less predictable transit times into Europe and North America. Buyers have responded by extending lead times, holding modestly higher safety stock at destination, and in some categories, splitting volumes across sourcing geographies, to limit exposure to a single trade lane. Suppliers with diversified shipping options, strong on-time delivery records and the balance sheet to absorb working capital swings are better placed to hold share through this period.

Home Textile Market Overview

Global home textile trade held at US$ 58 billion, with growth broadly fiat

The global home textiles trade stood at US$ 58 billion in 2025, recording a modest CAGR of 3% over the past five years. Growth remained relatively fiat compared to the previous year, indicating a period of stabilization. The European Union continues to be the largest importer in this category, followed by other major markets including the US, UK, Japan, and Canada. Beyond these markets, countries such as Mexico,

South Korea, Turkey etc. are witnessing steady growth in imports for home textile products. These markets also present a good opportunity for Indian exporters to expand their global footprint. With its strong manufacturing capabilities, diverse product range, and increasing focus on sustainability and quality, India is well-positioned to tap into these growing regions and enhance its share in the global home textiles trade.

US home textile imports jumped 20% in 2025 to US$ 15.6 billion

Home textile imports in the US grew by 20% last year from US$ 13.0 billion in 2024 to US$ 15.6 billion in 2025, significantly higher than the last five-year CAGR of 6%. US imports have now surpassed the 2021 post-pandemic restocking peak, setting a fresh high in 2025. China has remained the dominant supplier, and its share has moved back up from 40% in 2020 to 43% in 2025 after several years of decline. India has held its position, with the imports share edging up from 25% to 26% in the last five years. The import share of Pakistan edged up from 9% to 10%, while "Other" countries eased from 25% to 21%, suggesting diversification has plateaued. These shifting dynamics present a strong opportunity for India to further expand its presence in the US home textile market.

India supplies close to half of US cotton home textile imports

While China remains the top exporter of overall home textiles to the US, India holds a leading position in cotton-based home textiles. India has a high share of

50% in cotton home textile imports by the US and holds a 38% share of US cotton bed linen imports.

EU home textile imports grew 4% in 2025, with India holding a 6% share

The EUs imports in the home textile category grew by 4% in 2025 compared to the previous year. China remains the EUs largest import source, with a share of 16%. Indias contribution has remained stable, at around US$ 1.1 billion in 2025 with a 6% market share, which indicates a strong opportunity to expand further by leveraging its vertically integrated textile ecosystem, growing focus on sustainability, and improving trade relations with the EU.

Pakistan is the leading supplier of cotton home textiles to the EU, benefiting significantly from its free trade access. Despite having a strong cotton base, Indias share remains relatively lower at 6% in 2025, against Pakistans 22%, and is expected to improve in the coming years.

Indias home textile exports slipped 6% to US$ 6.1 billion, with the US comprising 58% of shipments

The Indian home textiles exports stood at around US$ 6.1 billion in FY 2026, declining by 6% compared to FY 2025, though still growing at 1% CAGR over the last five years. The US remains the dominant destination, consistently accounting for the largest share, holding steady at around 58% between FY 2020 and FY 2026.

The EU, the second-largest market, held its share broadly steady at around 17% between FY 2020 and FY 2026, though it remains a critical export destination.

With the India-EU FTA pending rati cation, there is significant potential for India to boost its home textile exports to the EU market. Other markets like the UK (4–5%), Australia (2–3%), and Canada (3%) have maintained relatively stable shares over the years.

India continues to maintain a strong position in global home textiles, ranking as the second-largest exporter globally with a share of around 11% of global home textile exports, and enjoys significant market leadership in cotton-based products in key export markets. The combination of favorable trade agreements, increasing buyer diversification, sustainability-led sourcing preferences and Indias strong manufacturing capabilities provide a compelling growth runway for the sector.

Indias domestic home textile market is expanding at a significantly faster pace than the global average. Over the past five years, it has grown at a CAGR of 7%, reaching an estimated US$ 12 billion in FY 2026 and is projected to continue the growth momentum and reach US$ 16 billion by FY 2030. The growth of the domestic market is largely driven by rising disposable incomes, urbanization, and the growth of the housing sector. Consumers are increasingly prioritizing home aesthetics, comfort, and hygiene, particularly after the pandemic, leading to higher demand for premium and branded home textile products such as bedding, towels, and curtains. The expansion of organized retail, e-commerce, and omni-channel strategies has further improved accessibility across Tier 2 and 3 cities. Additionally, the recovery in the hospitality and institutional sectors is supporting demand for products like bed linen and towels. Growing awareness around health, hygiene, and sustainability is also fuelling demand for high value, differentiated offerings. Consumers are shifting from unbranded to trusted brands, seeking better quality, design, and durability. Moreover, the increasing trend of viewing the home as a lifestyle statement, influenced by social media and interior design trends, is encouraging more investment in home textiles. Overall, these factors position Indias domestic home textile market for sustained growth in the coming years.

KEY GROWTH DRIVERS FOR THE HOME TEXTILE SEGMENT

India enters FY 2027 with a stronger set of structural advantages in home textiles than at any point in the last five years. The FY 2026 export decline was largely a function of tari uncertainty and freight volatility rather than any loss of competitiveness, and most of those headwinds have since reversed. The drivers below are expected to shape the segments trajectory over the medium term.

• Rising urbanization & housing growth

Rising urbanization and new housing developments are boosting demand for essential home textiles.

• FT A-led export opportunities

The India–UK CETA and India–EU FTA improve price competitiveness by eliminating tariffs, creating significant export growth potential.

• Disposable income & lifestyle upgrades

Higher incomes and aspirational lifestyles are driving spending on premium and decorative textiles.

• Hospitality & real estate expansion

Growth in hotels and luxury real estate is fuelling institutional demand for high-quality home textiles.

The outlook for the textile and home textile industry remains encouraging. The convergence of multiple structural drivers including global supply chain diversification, favorable trade agreements, improving domestic consumption, growing sustainability awareness and Indias strengthening manufacturing ecosystem creates a supportive environment for long-term growth. While near-term uncertainties related to geopolitical developments and global demand

• Growing e-commerce & omni-channel retail Online platforms are expanding access to diverse, affordable, and customizable home textile products.

• Sustainability trends

Eco-conscious consumers are increasingly choosing sustainable and certified home textile options.

• Lifestyle & interior focus

Home textiles are now lifestyle products, driven by demand for comfort, personalization, and aesthetics.

• Go vernment policy support

Consolidated textile schemes, PLI incentives, and textile parks are encouraging fresh investments and capacity expansion.

conditions may persist, Indias competitive positioning and expanding market opportunities are expected to support sustained growth across both domestic and export markets. The home textile segment remains well placed to benefit from premiumization trends, increasing consumer spending, growing housing demand and stronger market access through recently concluded trade agreements.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Companys internal control systems to mitigate material business risks ensure proper safeguarding of assets, maintaining proper accounting records and reliable financial information, and are designed to provide reasonable assurance that all material misstatements, frauds or violations of laws and regulations will be prevented.

Independent External Assurance

An external independent firm carries out the internal audit of The Companys operations and reports its findings to the Audit Committee on a regular basis.

Internal Assurance

The Internal Audit also evaluates the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness through periodic reporting.

Governance Structures and Policies

The combination of policies and processes cover and mitigate the various risks associated with the Companys business. The Company periodically reviews the effectiveness of the risk management framework and addresses the emerging challenges that arise in a dynamic business environment.

HUMAN RESOURCES

The Human Resources function catalyzes organizational transformation by embedding progressive people and practices, and fosters a technology-enabled, engaged work environment. We emphasize continuous development and growth, enabling The Company to attract, integrate, develop and retain the talent essential for sustaining long-term business success.

Learning & Development

A values-driven, competency-based framework to attract and retain top talent, fosters a collaborative, transparent and high-performance culture. Continuous capability enhancement fosters a collaborative, transparent and participative work culture, with rewards linked to merit and sustained performance. Key focus is placed on Environment, Health & Safety (EHS) through specialized training programmes and awareness initiatives, enabling employees to adopt safe work practices, comply with regulations and contribute to a sustainable workplace.

Diversity & Talent Quality

The Company employs more than 6,232 employees across diverse business functions. We are committed to building an inclusive workforce that embraces individuality while cultivating shared values and behaviors. We actively promote gender, age and regional diversity through targeted workshops and sensitization initiatives, fostering a workplace that is equitable, respectful and innovative.

Human Resource Transformation

Our Human Resource systems have evolved to align with the digital global environment. Technology integration enables an agile, high-quality work experience. Innovation is encouraged through a dedicated platform where employees can easily submit ideas that contribute to The Companys growth, fostering a culture of recognition, engagement and ensuring every voice is heard.

Analysis of Consolidated Financials

CONSOLIDATED INCOME STATEMENT SUMMARY

Particulars	Consolidated
	2025-26	2024-25	FY 26 Change %
Revenue from Operations	251,509	277,820	-9.5%
Other Income	21,215	6,507	226.0%
Total Revenue	272,724	284,327	-4.1%
Cost of materials consumed	138,123	139,644	-1.1%
As a % of Revenue	54.92%	50.26%	9.3%
Employee benefit expenses	26,774	26,928	-0.6%
Other expenses	50,159	59,834	-16.2%
EBITDA	57,667	57,922	-0.4%
Depreciation	16,421	15,142	8.4%
EBIT	41,246	42,780	-3.6%
Interest and finance cost	29,058	31,570	-8.0%
Profit before exceptional items and tax	12,188	11,210	8.7%
Exceptional items	-	-9,461	100.0%
Profit before tax	12,188	1,749	596.9%
Profit after tax before share of associates	6,224	7,628	-18.4%
Share of loss of associates	-27	-24	14.8%
Profit for the year	6,196	7,604	-18.5%

Revenue Analysis

• Consolidated Total Revenue for the year registered a decline of 4.1% to 2,72,724 Lacs. The decline was primarily attributable to the overhang of US tariffs and the resulting impact on demand and revenue streams from the US markets.

• FY 2026 financial performance remained range bound amid evolving US tari policies, geopolitical uncertainties and challenging demand conditions across certain key markets. During the year, the Group continued to recalibrate its strategy in line with emerging global market dynamics, with a strategic focus on strengthening its Non-US market presence and India portfolio.

• The Group remains focused on enhancing capacity utilization and expanding its market share across key regions and channels. The Group continues to leverage its integrated manufacturing infrastructure to support existing and new product verticals and pursue long-term growth opportunities across domestic and global markets.

Expenditure Analysis

• Cost of Materials Consumed stood at 1,38,123 Lacs during the year. As a percentage of revenue from operations, material costs increased from 50.26% to 54.92%, primarily driven by inflationary pressures.

• Employee Benefit Expenses amounted to 26,774 Lacs as compared to 26,928 Lacs in the previous year. As a percentage of total revenue, employee costs reduced to 9.47% in FY 2026 from 10.75% in FY 2025.

Profitability Analysis

• Consolidated EBITDA declined marginally by 0.4%, standing at 57,667 Lacs in FY 2026 as against 57,922 Lacs in FY 2025. However, the EBITDA margin improved to 22.93% in FY 2026 from 20.85% in the previous year, primarily supported by the favourable impact of rupee depreciation.

• Total Operating Expenses stood at 2,15,056 Lacs in FY 2026 as against 2,26,406 Lacs in FY 2025.

• Interest and Finance Charges decreased by 8.0%, from 31,570 Lacs in FY 2025 to 29,058 Lacs in FY 2026, reflecting a reduction of 2,512 Lacs during the year. The decrease was mainly due to lower utilisation of working capital limits during the year, resulting in lower borrowing costs.

• Consolidated EBIT decreased by 3.6%, amount to 41,246 Lacs in FY 2026 compared to 42,780 Lacs in FY 2025.

• Consolidated Profit After Tax (PAT) stood at 6,196 Lacs in FY 2026 as against 7,604 Lacs in FY 2025.

CONSOLIDATED BALANCE SHEET

The analysis of our consolidated Balance Sheet as at 31 March 2026 is as below

Particulars	As at 31 March 2026	As at 31 March 2025
Property, Plant and Equipment *	203,391	216,797
Goodwill	50,453	45,124
Other Financial Assets	63,613	53,543
Deferred Tax Assets (Net)	2,176	1,809
Non-Current Income Tax Assets (Net)	1,514	1,514
Other Current and Non-Current Assets	19,493	26,109
Inventories	122,372	100,750
Trade Receivables	119,169	108,669
Cash and Cash Equivalents^	7,903	11,643
Total Assets	590,084	565,958
Equity Share Capital	6,287	6,287
Other Equity	207,786	196,986
Total Borrowings	261,928	253,914
Current And Non-Current Provisions	3,925	3,163
Deferred Tax Liabilities, (Net)	4,763	2,243
Current And Non-Current Other Liabilities	6,112	7,075
Trade Payables	84,821	84,930
Other Current and Non-Current Financial Liabilities	10,796	8,881
Current Income Tax Liabilities, (Net)	3,666	2,478
Total Liabilities	590,084	565,958

*Includes CWIP, other intangible assets, right of use assets and assets held for sale ^Includes Current Investments

Analysis of Assets

• The Groups asset base increased by 24,126 Lacs, with Total Assets standing at 5,90,084 Lacs as at 31 March 2026 compared to 5,65,958 Lacs as at 31 March 2025. The increase in Total Assets primarily reflects foreign currency translation effects due to the depreciation of the rupee.

Analysis of Equity and Liabilities

• Consolidated Net Worth increased from 2,03,273 Lacs in FY 2025 to 2,14,074 Lacs in FY 2026 mainly due to profits registered during the year.

• Total Borrowings increased from 2,53,914 Lacs in FY 2025 to 2,61,928 Lacs in FY 2026 due to additional borrowing during the year.

• Trade Payables stood at 84,821 Lacs in FY 2026 compared to 84,930 Lacs in FY 2025.

KEY CONSOLIDATED FINANCIALS & RATIOS

Particulars	As at 31 March 2026	As at 31 March 2025
Total Income	272,724	284,327
EBITDA	57,667	57,922
EBIT	41,246	42,780
Net Profit after Tax	6,196	7,604
Net Worth	214,074	203,273
Net Debt	257,923	245,085
Net Profit Margin	2.3%	2.7%
Operating Profit Margin	21.1%	20.4%
Leverage ratios
Net Debt/Equity (Times)	1.20	1.21
Interest Coverage Ratio (Times)	1.42	1.36
Capital Efficiency Ratios
Return on Equity (ROE)	3.0%	4.2%
Return on Capital Employed (ROCE)	8.8%	9.4%
Working Capital Ratios
Current ratio (in times)	1.40	1.39
Inventory Days	295	260
Receivable Days	178	142
Payable Days	165	155

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of The Company have been prepared in accordance with the Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016, read with Section 133 of the Companies Act, 2013.