Indo Count Industries Ltd Management Discussions

Global Economy

Global growth in 2025 is estimated at 3.3%, reflecting a balance between policy headwinds and strong investment momentum. Global private consumption reached approximately $60.3 trillion, growing 3.4% year-on-year, albeit a moderation from 4.3% growth in 2024, indicating a gradual normalisation of demand. Inflation remained elevated but manageable at 4.1%, with consumption supported by stable labour markets and resilient spending among middle- to high-income households.

Currency Movements and Financial Conditions

Currency markets witnessed notable volatility, with the U.S. dollar (DXY index) declining by 10% in 2025, marking its weakest first-half performance in over five decades. This movement was driven by slower U.S. growth expectations, rising fiscal deficits, and shifting global capital flows, despite relatively stable interest rate policies. Financial conditions remained broadly accommodative, supporting liquidity and investment activity across markets.

Geopolitical and Trade Environment

The global outlook for 2026 is significantly affected by escalating geopolitical tensions and trade disruptions, which are increasing market volatility and slowing growth. Prolonged conflicts, notably the Russia–Ukraine War, continue to pressure energy markets through sustained sanctions on Russia, while rising tensions in the Middle East disrupt oil supply chains, driving crude prices higher.

Simultaneously, renewed aggressive tariff policies by the U.S., targeting major partners such as China, Mexico, and Canada, have prompted retaliatory measures, suppressed global trade growth to approximately 1.5%, and weakened the U.S. Dollar by diminishing investor confidence. In response, the European Union has accelerated its free trade initiatives, securing agreements with multiple countries to diversify trade flows and offset the impact of U.S. protectionism, thereby supporting moderate Eurozone growth amid ongoing external challenges.

Industrial Activity and Cost Trends

Manufacturing activity remained resilient, driven by strong demand in technology-intensive sectors such as semiconductors, electronics, and AI infrastructure. Asian economies continued to lead export growth in these segments. While input cost pressures persisted during the year, expectations of easing in commodity and energy prices supported industrial stability.

Labour Market Stability

Global labour markets remained stable, with unemployment holding at around 5% in 2025. Despite initial concerns arising from trade uncertainties and tariff actions, partial policy adjustments helped sustain employment levels, thereby supporting consumption and economic resilience.

Global Debt and Capital Markets

Global borrowing levels reached unprecedented highs, with OECD sovereign borrowing at $17 trillion in 2025 and outstanding sovereign bond debt in advanced economies climbing to nearly $61 trillion, with public debt exceeding 80% of GDP in many cases.

Emerging market sovereign debt also crossed $12 trillion, reflecting increased reliance on debt markets, particularly for refinancing requirements estimated at $13.5 trillion during the year.

Outlook

The global economy is expected to maintain stability, with growth projected at 3.3% in 2026 and 3.2% in 2027. Advanced economies are expected to grow at 1.8% in 2026 and 1.7% in 2027, while emerging markets are projected to grow at 4.2% and 4.1%, respectively. Inflation is anticipated to moderate from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, supported by easing demand and lower energy prices. Trade growth is expected to soften to 2.6% in 2026 before recovering to 3.1% in 2027, while commodity and energy prices are projected to decline by around 7% in 2026, easing cost pressures. However, elevated global debt levels, geopolitical risks, protectionism and trade uncertainties remain key challenges, even as continued investments in technology and AI support long-term productivity and growth.

Impact on the Company

These macroeconomic and geopolitical factors have directly influenced the Companys performance and strategic direction. Geographic diversification has accelerated, with non-U.S. markets which accounts for approximately 30% of core revenues, is expected to grow by 20% during FY 26-27 supported by growing trade partnerships. Recent trade agreements with the U.K. and EU are expected to enhance long-term visibility, and strengthen order flow.

The US Economy

The U.S. economy demonstrated resilience in 2025. According to the IMF, GDP expanded by 2.1%, supported by fiscal stimulus, an accommodative monetary policy stance, and sustained investment in advanced technologies, including artificial intelligence and digital infrastructure. Consumer spending remained the principal engine of growth, with Real Personal Consumption Expenditure moderating marginally to 2.4%, underpinned by stable incomes and accumulated household wealth. The Federal Reserve eased policy with a cumulative 75-basis-point cut in the federal funds rate. At the same time, higher tariffs added to near-term inflationary pressure even as they offered targeted support to domestic industries.

That said, sectoral indicators pointed to emerging headwinds. The ISM Manufacturing PMI remained below the 50-mark for most of the year, weighed down by elevated input costs, softer employment, and subdued capital investment. The labour market also moderated, with unemployment rising to 4.1%, the participation rate easing to 62.3%, and the employment-to-population ratio declining to 59.7% — its lowest reading since early 2022. While consumption and broader macroeconomic fundamentals held firm, industrial activity and employment gradually decelerated.

Outlook

The U.S. economy is projected to grow by 2.4% in 2026 and 2.0% in 2027. An expansionary fiscal stance and easing monetary conditions are expected to lower borrowing costs and revive investment momentum though Middle East conflict risks remain large. Continued advancements in technology, particularly AI, will support productivity and business expansion, though the pace of technology-led growth is likely to moderate.

Counterbalancing this, constrained labour force growth — owing to lower immigration — and a gradual softening in private consumption could temper domestic demand. Inflation is expected to converge with the Federal Reserves 2% target by 2027, paving the way for further monetary easing. However, rising real neutral interest rates, driven by robust investment demand, may limit the extent of rate cuts. Public debt, projected to rise from 101% of GDP in 2026 to an estimated 120% by 2036, remains a structural concern, despite ongoing productivity gains from technological innovation.

Impact on the Company

The U.S. economy, which accounts for approximately 70% of the Companys market exposure, is a key driver of performance. Stable growth and resilient consumer demand support sales. Retail expansion and strong e-commerce penetration (over 20% of sales) provide structural support for growth. Tariff volatility, pressured margins, leading to cost-sharing measures and ~100 bps EBITDA contraction. The Company is also leveraging the U.S. market to advance its "Indo Count 2.0" strategy, scaling its branded portfolio and targeting robust growth in utility bedding business.

The European Economy

The European Union economy is projected to expand by 1.4% in 2025, led by resilient consumer spending amid stable labour markets and rising real wages. Euro area inflation moderated to 2.1%, broadly aligned with the medium-term 2% target, supported by a measured monetary policy stance. While the US and UK have entered a rate-cutting cycle, the euro area is expected to hold policy rates steady in the near term. On the trade front, progress on the India–EU and India–UK Free Trade Agreements is set to widen market access and strengthen export competitiveness, particularly for the textile sector.

Private consumption registered a gradual recovery, with household real consumption rising 0.3% in the euro area and 0.5% across the EU, reversing the contraction seen earlier in the year. Higher disposable incomes and a modest decline in household saving rates underpinned the improvement. Industrial output, however, remained subdued, weighed down by elevated energy costs linked to the Ukraine conflict and the euros real appreciation, which weakened export competitiveness. Stable natural gas prices — supported by softer demand and effective EU storage policies — offered partial relief to industry. The EU retained its position as a leading global textile market, with imports exceeding USD 260 billion, on par with the US, reflecting durable demand despite the broader macroeconomic backdrop.

Outlook

Euro area growth is forecast at a moderate 1.3% in 2026 and 1.4% in 2027, supported by public spending and resilient performance in markets such as Spain and Ireland. Among the key economies, Germany is projected to grow by 1.1%, France by 1.0%, Italy by 0.7%, and Spain by 2.3%. The UK is expected to expand by 1.3% in 2026 and 1.5% in 2027, while Emerging Europe is set to rebound with growth of 2.3% and 2.4%, respectively.

The 2026 outlook remains subdued, reflecting softer labour markets and muted consumption. That said, strategic investments in digital infrastructure and green energy are expected to strengthen medium-term resilience. Fiscal policy is likely to remain neutral in 2026 before turning more expansionary in 2027, driven by higher defence and infrastructure spending, providing further impetus to growth.

Impact on the Company

Landmark trade agreements such as the India–European Union Free Trade Agreement and India–UK Free Comprehensive Economic and Trade Agreement are expected to eliminate tariffs and significantly enhance competitiveness, for export of Indian products, enabling the company to tap into the European home textile market. Strategically, Europe plays a significant role in diversifying the companys revenue base beyond the U.S., with non-U.S. markets already contributing around 30% of core revenue.

The Indian Economy

India entered FY2026 with strong economic momentum, underpinned by stable fundamentals, coordinated policy support, and broad-based sectoral growth. Despite global headwinds, the economy delivered a resilient performance, supported by robust domestic demand, historically low inflation, and a strengthened external position.

Real GDP is estimated to have grown 7.6% in FY2026, revised upward from the earlier 7.4% advance estimate, against 6.5% in FY2025 — making India the fastest-growing major economy for the fourth consecutive year. Domestic demand remained the principal anchor of growth, with Private Final Consumption Expenditure accounting for 61.5% of GDP — the highest share since FY2012 — and rising 7.7%. Gross Fixed Capital Formation stayed steady at around 30% of GDP, reflecting sustained investment activity. Retail inflation moderated sharply to 1.7% during April–December FY2026, down from 4.6% in FY2025, supporting real purchasing power and stable input costs across consumption-led sectors, including home textiles.

Sectoral performance was broad-based. Agriculture grew an estimated 3.1%, supported by a favourable monsoon — a particularly relevant tailwind for cotton-dependent industries. Industrial activity strengthened, with manufacturing GVA accelerating to 7–8% in the first half of FY2026, surpassing pre-pandemic trends. Gross non-performing assets in the banking system declined to 2.2%, reflecting a healthier financial system and improved credit availability for industry.

The external sector held firm. Total exports of merchandise and services reached a record USD 825.3 billion in FY2025, with continued momentum in FY2026 — merchandise exports grew 2.4%, and services exports 6.5% during April–December 2025, even amid heightened US tariff actions. The current account deficit remained moderate at 0.8% of GDP in H1 FY2026, while foreign exchange reserves covered over 11 months of imports — providing a meaningful buffer against global volatility.

For the textile sector, the year was steady. Total textile and apparel exports (including handicrafts) stood at USD 32.63 billion during April–February FY2026, with cotton textiles contributing 29% (USD 9.36 billion). Strong growth was recorded across over 120 destinations, with double-digit gains in the United Kingdom (7.8%), Germany (9.9%), Spain (15.5%), and Japan (20.6%). The Governments extension of the RoSCTL and RoDTEP schemes beyond March 31, 2026, has reinforced policy support for export competitiveness.

Outlook

Real GDP growth is projected at 6.8–7.2% in FY2027, with Indias potential growth estimated at around 7%. Domestic demand is expected to remain the anchor, supported by low inflation, a stable labour market, and rising real incomes. Inflation is forecast to remain within the Reserve Bank of Indias 4% (?2%) target band, preserving consumer purchasing power and macroeconomic stability.

Global Textile Industry

The global textile industry continues to demonstrate significant scale and evolving strategic importance, with the market estimated at USD 2,123.72 billion in 2025. The Asia Pacific region remains dominant, valued at USD 470.61 billion in 2025 and projected to grow further, led by key manufacturing hubs such as China, India, and Bangladesh, which benefit from strong production ecosystems, access to skilled labour and raw materials. Structurally, the industry is undergoing a transformation driven by sustainability, digitalisation, and innovation, with increasing adoption of circular production models, bio-based fibres, and AI-enabled supply chain optimisation. Emerging opportunities are also visible in technical textiles, including automotive and industrial applications, alongside supply chain diversification trends that are strengthening alternative sourcing destinations such as India and Uzbekistan. Supported by favourable government initiatives, e-commerce expansion, and rising demand across apparel, home furnishings, and specialised segments, the industry remains positioned for long-term growth.

Performance

In 2025, the textile sector experienced an uneven recovery and strategic recalibration amid persistent demand-side and cost-related challenges. Weak consumer sentiment—accounting for a significant share of industry concerns—combined with high inflation and elevated interest rates, resulted in subdued apparel demand and lower order volumes. At the same time, geopolitical disruptions, including tensions in the Middle East and logistical constraints in critical trade routes, increased freight costs and disrupted supply chains. Input cost pressures remained elevated due to rising energy and raw material prices, compressing margins across the value chain. Additionally, stricter sustainability regulations heightened compliance requirements and scrutiny around greenwashing practices. Despite these headwinds, underlying demand drivers such as urbanisation, rising disposable incomes, and expanding end-use applications—including medical textiles and protective industrial clothing—continued to support baseline consumption and provide resilience to the sector.

Outlook

The global textile market size is predicted to increase from USD 2,281.51 billion in 2026 to approximately USD 4,016.50 billion by 2034, expanding at a CAGR of 7.35% from 2025 to 2034. Sustainability is emerging as the central theme shaping the future of the textile sector, influencing industrial strategies, investment priorities, and production models. As environmental considerations gain prominence, companies are increasingly focusing on sustainable materials, energy-efficient technologies, and responsible manufacturing practices.

At the same time, evolving industrial and geopolitical dynamics are reshaping global supply chains. The trend of reshoring, bringing production closer to end markets, is gaining traction in Europe and Asia to reduce import dependence, lower transportation emissions, and enhance supply chain resilience.

U.S. Textile Industry

The U.S. textile industry operated in a complex, high-cost environment in 2025, marked by tariff volatility, geopolitical sensitivities, and shifting trade dynamics. Shipments of man-made fibre, textiles, and apparel eased to USD 60.9 billion from USD 63.9 billion in 2024, with over 40 plants shutting down in the past two and a half years — reflecting structural pressures on domestic manufacturing. Higher sourcing costs from U.S.–China frictions, elevated freight and logistics expenses, tighter compliance, and persistent cost competition from low-cost economies continued to compress margins. Trade performance held firm. Exports of fibre, textiles, and apparel stood at USD 27 billion, against USD 28 billion in 2024, anchored by Western Hemisphere partners — Mexico, Canada, and the CAFTA-DR bloc. On imports, sourcing continued its structural shift away from China toward South and Southeast Asia, with Vietnam, Bangladesh, India, and Cambodia gaining share. AI and data-driven systems strengthened as a competitive lever, sharpening forecasting, efficiency, and customer engagement across the value chain. The U.S. textile market is projected to expand from USD 196.0 billion in 2025 to USD 282.2 billion by 2034, at a CAGR of 4.13%, supported by innovation in materials, demand for sustainable and recycled textiles, and steady growth in the apparel and fashion sectors. Strengthening trade engagement with India, the continued "China-plus-one" recalibration, selective onshore expansion, and a growing emphasis on sustainable, traceable sourcing — reinforced by initiatives such as the U.S. Cotton Trust Protocol — are expected to define the industrys long-term direction.

European Union Textile Industry

The European textile industry operated under significant pressure in 2025 amid a challenging macroeconomic environment. Textile output declined 1.9%, and clothing production fell 5% in the first half of the year, weighed down by weak consumer demand, persistent inflation, and elevated interest rates. Employment levels softened, and turnover turned negative across several segments.

Competitive intensity rose as low-cost imports surged, eroding domestic market share and tightening pricing. Mandatory textile waste collection systems and broader environmental regulations added to compliance costs, while high energy and raw material prices continued to pressure margins.

Trade activity, however, remained robust. Apparel imports into the European Union rose to USD 90 billion in 2025, supported by higher volumes despite softer prices. Germany retained its position as the largest market, while Spain emerged as the fastest-growing. China continued to lead as the EUs largest supplier, underscoring sustained competitive pressure on regional manufacturers.

The European textile market is projected to expand from USD 180.95 billion in 2025 to approximately USD 271.49 billion by 2031, at a CAGR of 7.05%. Circular economy frameworks, shorter fashion cycles, and rising demand for technical and high-performance textiles are shaping growth. Structurally, the industry is shifting toward recycled fibres, bio-based

Demand fundamentals remain supportive. Despite price sensitivity, the U.S. remains a consumption-driven market, with e-commerce a key growth lever. Within cotton textiles, the home textiles segment is projected to grow at a CAGR of 8.9%, led by rising preference for cotton bed linen, towels, and made-ups. Combined with the structural shift in sourcing, this presents a constructive medium-term backdrop for established Indian home textile manufacturers serving the U.S. retail channel materials, and digitalised, automation-led operations, with apparel continuing to lead and industrial and technical textiles emerging as key growth drivers.

A transformative shift is underway in 2027, anchored by the India–EU Free Trade Agreement concluded in January 2026, which grants zero-duty access to the EU market for Indian textiles, apparel, and made-ups. This eliminates earlier duties of 8–12% on Indian textile products, restoring tariff parity with established preferential suppliers such as Bangladesh and Vietnam. The agreement is expected to strengthen trade flows materially, improve long-term visibility for manufacturers and retailers, and reinforce the growth prospects of Indian home textile exporters in one of their largest international markets.

Indian Textile Industry

Indias textile industry remained a structurally strong and strategically important pillar of the economy in 2025, demonstrating resilience despite a subdued global trade environment. The sector contributed approximately 2% to GDP and 11% of manufacturing Gross Value Added, while accounting for around 8.63% of total exports — underscoring its dual role as an industrial anchor and an export-oriented sector.

With over 45 million people directly employed, it remained the countrys second-largest employer after agriculture, with significant participation by women and rural communities. Performance was supported by strong domestic demand and an integrated value chain, with India retaining its position as the worlds largest cotton producer. That said, structural challenges tempered momentum. Competition from low-cost manufacturing nations such as Bangladesh and Vietnam intensified pricing pressure.

Fragmented supply chains continued to drive logistical inefficiencies, while cotton-led raw material volatility weighed on margins. A shortage of skilled labour for advanced manufacturing and the need for continuous upskilling remained critical constraints.

Outlook

The Indian textile industry, valued at USD 152.40 billion in 2025, is projected to reach USD 213.75 billion by 2034,

Global Home Textiles Industry

The global home textiles industry operated in a challenging macroeconomic environment in 2025, marked by high inflation, elevated interest rates, and subdued consumer sentiment, which weighed on discretionary spending and demand for premium products. Geopolitical tensions and supply chain disruptions added further pressure, while elevated energy and raw material costs continued to compress margins. Stringent environmental regulations, particularly across Europe, raised compliance and operational complexities.

Against this backdrop, the market demonstrated resilience across categories. Bed linen retained its position as Indo Counts dominant product category, while bathroom linen emerged as a faster-growing adjacency. Distribution dynamics continued to shift, with speciality stores holding a significant share even as online channels expanded rapidly. Cotton remained the leading raw material, though recycled and speciality blends gained meaningful traction. Asia-Pacific — anchored by India and China — maintained its leadership position, supported by strong consumption and integrated production capabilities.

Outlook

The global home textiles market is projected to expand from USD 136.25 billion in 2025 to USD 200.28 billion by 2031, at a CAGR of 6.63%. Growth will be anchored by rising disposable incomes, increasing demand for premium home d?cor, and the continued shift toward digital retail. at a CAGR of 3.83%. Rising domestic consumption, higher disposable incomes, urbanisation, and a widening middle class will anchor growth.

Sustainability and innovation are reshaping the segment mix, with rising demand for organic, recycled, and bio-based textiles and accelerating adoption of advanced manufacturing technologies.

Global trends remain supportive. The "China-plus-one" sourcing realignment, combined with the recently concluded India–EU Free Trade Agreement. Its continued engagement with the United States positions India as a key alternative manufacturing hub for major Western markets. The Ministry of Textiles has outlined an ambitious roadmap to triple textile exports from _3 lakh crore today to _9 lakh crore by 2030, supported by stronger domestic manufacturing and broader global market outreach.

Structurally, the industry is being reshaped by sustainability, innovation, and digital integration. Greater adoption of recycled, regenerated, and bio-based fibres is aligning the sector with ESG and circular economy frameworks, while demand for smart and functional textiles — including temperature-regulating and health-monitoring products — is steadily rising. AI, automation, and emerging applications such as 3D printing are improving production efficiency, reducing waste, and accelerating speed to market.

Asia-Pacific is expected to record the fastest growth, reinforced by scale, specialisation, and ongoing modernisation across the value chain. For established Indian home textile manufacturers with integrated cotton-to-finished-product capabilities, an expanding global footprint, and a strong sustainability orientation, this presents a constructive medium-term backdrop for deepening their presence across both traditional and emerging channels.

The U.S. Home Textiles Industry

The U.S. home textiles industry entered a cautious, transitional phase in 2025 amid a challenging macroeconomic and regulatory environment. Higher inflation and subdued consumer sentiment constrained discretionary spending on home goods, while trade policy disruptions — including tariff hikes and potential import penalties — raised sourcing costs and weighed disproportionately on imported products. Supply chain constraints and cotton-led raw material volatility added further complexity to pricing and inventory management, pressuring margins. Regulatory requirements also intensified, with stricter PFAS norms and forced-labour compliance necessitating significant supply chain adjustments.

Against this backdrop, the industry demonstrated resilience through segmental strength and adaptive strategies. Bed linen — Indo Counts core category — retained its leadership position, while the upholstery and commercial segments also showed growth potential. Cotton continued to lead material consumption, though alternatives such as linen gained share.

Outlook

The U.S. home textiles market is projected to expand from USD 26.48 billion in 2025 to USD 33.24 billion by 2031, at a CAGR of 3.86%. Growth will be supported by rising residential construction and home renovation activity, a recovery in the hospitality sector, and growing consumer preference for high-quality, functional, and eco-friendly products such as cooling and temperature-regulating bedding. Sustainability has moved from differentiator to expectation, with

Indian Home Textiles Industry

The Indian home textiles market demonstrated strong segmental performance and evolving consumption patterns in 2025. Bed linen — Indo Counts core product category — retained its leadership position, anchored by consistent demand across both domestic and export channels. Cotton continued to dominate as the preferred raw material, reflecting Indias integrated value chain, while alternatives such as wool, hemp, silk, jute, and bamboo gained traction amid rising demand for sustainable and diversified offerings. The residential segment led overall consumption, supported by rising household incomes and ongoing lifestyle upgrades. Distribution remained largely offline-led, though online channels expanded at a faster pace, signalling a clear structural shift toward digital commerce. The industry maintained a healthy growth trajectory through the year, supported by strong fundamentals, improving product diversification, and increasing alignment with global consumption trends environmentally responsible fabrics and production practices increasingly mainstream.

The retail landscape continues to evolve toward omnichannel models that integrate online and in-store experiences, while the rapid expansion of e-commerce and direct-to-consumer channels is enabling brands to deepen reach and customer engagement. Technological advancements — including automation, smart manufacturing, and digital printing — are improving efficiency, product quality, and customisation. For established Indian home textile manufacturers with integrated cotton-to-finished-product capabilities, strong sustainability credentials, and well-developed U.S. retail relationships, the operating environment remains constructive for sustained, value-accretive growth.

Outlook

The Indian home textiles market is projected to expand from USD 11.18 billion in 2025 to USD 16.76 billion by 2031, at a CAGR of 7.08% — a growth rate that materially outpaces both the U.S. and global home textile markets. Demand is being driven by robust export momentum, rising urban disposable incomes, and supportive government incentives that continue to strengthen the textile ecosystem. Indias strong manufacturing base and cost competitiveness further position it as a key global sourcing hub for home textiles. Looking ahead, sustained growth will be reinforced by favourable demographics, rapid urbanisation, and evolving consumer lifestyles. Continued government investment in housing infrastructure, rising demand from the hospitality sector, and the expansion of organised retail into emerging urban centres are expected to deepen market opportunities. Manufacturers with integrated cotton-to-finished-product capabilities, strong product innovation, sustainable manufacturing practices, and well-developed omnichannel reach are best positioned to capitalise on this trajectory.

Global Cotton Industry

The global cotton industry navigated a complex operating environment in 2025, marked by supply-demand imbalances, elevated inventory levels, and price volatility. Macroeconomic uncertainty, soft end-market demand, and rising input costs weighed on the broader sector. Climate-related risks — particularly in rain-fed cultivation regions — and intensifying competition from synthetic fibres such as polyester continued to pressure both margins and market share. Geopolitical tensions and trade barriers added further uncertainty to global trade flows.

The Asia-Pacific region retained its leadership across both consumption and production, anchored by strong spinning capacity in China and India, with India holding its position as the worlds largest cotton producer — a structural advantage for Indian home textile manufacturers operating an integrated cotton-to-finished-product value chain. Trade volumes expanded steadily, supported by rising demand from emerging manufacturing hubs such as Vietnam and Bangladesh. Encouragingly, the sector recorded gradual progress in sustainability, with certified cotton programmes, improved traceability, and growth in speciality segments such as organic and extra-long-staple cotton.

Indian Cotton Industry

The Indian cotton industry reflected robust supply dynamics alongside evolving trade trends in 2025–26. According to the Cotton Association of India, total cotton supply for the season — up to 30 September 2026 — is estimated at 427.59 lakh bales, against 392.59 lakh bales in the previous season, supported by higher imports of 50 lakh bales and stable production. Domestic demand is projected at 305 lakh bales, resulting in a surplus of approximately 122.59 lakh bales and signalling ample market availability. Export volumes are expected to moderate relative to the previous year, reflecting shifting global demand and a tilt toward prioritising domestic supply.

Productivity improvements held the year together on the cultivation side. Targeted initiatives under national programmes delivered measurable gains in yield and quality, while expanded procurement infrastructure and effective MSP implementation supported farmer participation and stabilised market conditions. Institutional support — notably through scaled procurement operations by the Cotton Corporation of India — provided price stability and improved income visibility for growers, reinforcing the foundation of the value chain.

Outlook

The global cotton market is projected to expand from USD 44.3 billion in 2026 to USD 53.5 billion by 2031, at a CAGR of 3.85%. Growth will be driven by rising demand in the Asia-Pacific region, wider adoption of biotechnology in cultivation, and growing sustainability premiums offered by global brands. Cotton consumption and production are expected to grow broadly in tandem over the long term, maintaining relative balance in the market.

Sustainability is set to be the defining theme. Adoption of recycled cotton and certified sourcing is steadily reshaping the industry, supported by regulatory frameworks such as the EUs Ecodesign for Sustainable Products Regulation and the Strategy for Sustainable and Circular Textiles. Headwinds remain — competition from synthetic fibres, shifting consumer preferences, weather-related harvest losses, and trade actions such as the Uyghur Forced Labour Prevention Act will continue to shape market dynamics.

For integrated Indian home textile manufacturers with direct access to domestic cotton, established traceability frameworks, and a strong sustainability orientation, these structural shifts present a meaningful competitive advantage.

Outlook

The Indian cotton market is projected to expand from USD 6.9 billion in 2025 to USD 9.6 billion by 2034, at a CAGR of 3.59%, supported by strong domestic demand and the continued expansion of Indias textile manufacturing ecosystem. Policy and productivity initiatives — including government-led programmes to develop climate-resilient, high-yield cotton varieties through advanced breeding and biotechnology — are expected to narrow the structural quality gap progressively.

In the near term, the market is undergoing a supply chain recalibration, with textile mills increasingly relying on higher-quality imports to address shortages of quality domestic lint. Rising closing stocks, against softer domestic production, may exert downward pressure on cotton prices relative to the previous year,while a constructive input-cost environment for downstream manufacturers may help offset the impact. Sustainability is fast emerging as the defining lever, with global buyers placing growing emphasis on eco-friendly and traceable cotton sourcing. For Indian home textile manufacturers with integrated procurement, certified traceability frameworks, and an established sustainability orientation, this presents a meaningful premium opportunity over the medium term.

SWOT ANALYSIS

STRENGTHS

Strong Global Market Presence: The Company has established a strong presence in international markets, supplying high-quality home textile products to leading global retailers.

Strong Brand Recognition: A well-established reputation for quality, innovation, and reliability has enabled the Company to build enduring relationships with customers across key global markets.

State-of-the-Art Manufacturing Facilities: The Companys technologically advanced manufacturing infrastructure and ongoing digital transformation initiatives strengthen productivity, operational excellence, and customer responsiveness

Integrated Value Chain Capability: Well-established capabilities across the textile value chain—from spinning and weaving to manufacturing and finishing.

OPPORTUNITIES

Energy Sustainability: Greater adoption of renewable energy solutions provides opportunities to improve cost efficiency, reduce carbon emissions, and strengthen ESG performance.

Changing Consumer Trends: Evolving fashion and lifestyle preferences are creating opportunities for increased demand across the home textiles segment

Growth in Sustainable and Circular Fashion:

Increasing consumer focus on eco-friendly and recycled textiles is creating new market opportunities.

Favourable Trade Agreements: Emerging bilateral trade agreements are opening access to new international markets.

WEAKNESSES

Outdated Technology: Continued reliance on ageing manufacturing infrastructure may constrain productivity, operational efficiency, and the ability to meet evolving customer expectations.

Fragmented Supply Chain: Limited vertical integration often results in longer lead times and operational inefficiencies.

Dependence on Cotton: High reliance on cotton exposes the industry to price volatility and climate-related supply fluctuations.

Compliance Gaps: Inconsistent adherence to global environmental and labour standards may affect export competitiveness.

Capital-Intensive Operations: Significant ongoing capital expenditure on technology and capacity expansion could create pressure on free cash flow.

Export Market Concentration: Strong presence in international markets exposes to risks arising from changes in trade policies, tariff regimes, currency movements, and global economic uncertainties.

THREATS

Supply Chain Disruptions and Cost Inflation: Rising logistics costs and geopolitical uncertainties may impact profitability.

Intensifying Global Competition: Increasing competition across domestic and international markets may affect the Companys ability to sustain market share and profitability.

Volatility in Global Markets: Fluctuations in global economic activity, geopolitical events, and international trade dynamics may influence demand, input costs, and the Companys export performance.

Stricter Environmental Regulations: Growing regulatory pressure to adopt sustainable manufacturing practices may increase compliance costs.

Regulatory and Quality Control Changes:

New import standards and quality control requirements could affect raw material sourcing and production costs.

Business Performance

Operational Highlights y Operational volumes and revenues were affected by the US tariff environment, with tariff levels moving from 10% to 25% to 50% and subsequently to 10% during the year. y Despite tariff pressures, total income for FY26 reached _4,210.85 crore, supported by growth in new businesses. y H2 FY26 total income grew 6% over H1 FY26, reflecting improving momentum. y Revenue from New Businesses (Utility Bedding and USA Brand Business) increased steadily from 13% in Q1 to more than 24% in Q4FY2026, reflecting strong market acceptance. y The Wamsutta brand was relaunched in July 2025 through a Direct-to-Consumer (D2C) platform in the United States, achieving rapid adoption with sales across all 50 US states.

y A third greenfield manufacturing facility for utility bedding was commissioned in North Carolina in January 2026, with an annual capacity of 18 million pillows, increasing total US utility bedding capacity to 31 million pillows. y A new licensing agreement with Tommy Hilfiger strengthened the Companys utility bedding portfolio, bringing the number of licensed brands to six. y Branded businesses across categories accounted for around 20% of total revenues during the year. y Landmark trade agreements with the United States and the European Union are expected to reduce tariff uncertainty and potentially enable duty-free access for Indian textile exports to Europe. y Non-US markets contributed around 30% of core revenues, supported by growing demand in the United Kingdom, Australia, Japan, and the Middle East.

Financial Performance

	Standalone	Standalone	Consolidated	Consolidated
Particulars (_ Crore)	FY2026	FY2025	FY2026	FY2025
Revenue from Operations	3098.37	3,771.65	4,141.35	4,151.39
Other Income	80.63	49.56	69.5	39.51
Total Income	3,179.00	3,821.21	4,210.85	4,190.90
EBITDA	378.79	513.52	461.47	576.74
Less: Finance Cost	95.07	107.1	136.04	123.16
Less: Depreciation	93.11	83.01	159.18	115.93
Profit Before Tax	190.61	323.4	166.25	337.65
Tax Expenses	46	86.19	39.57	87.65
Net Profit	144.61	237.21	126.68	250
Other Comprehensive Income (Net of Tax)	(24.76)	(4.84)	(13.39)	(13.87)
Total Comprehensive Income	119.85	232.37	113.29	236.13
Basic & Diluted EPS (_)	7.3	11.98	6.4	12.62

Key Financial Ratios

Particulars	Standalone	Standalone	Consolidated	Consolidated
	FY2026	FY2025	FY2026	FY2025
Current Ratio	1.91	1.75	1.71	1.7
Debt–Equity Ratio	0.36	0.48*	0.57	0.64
Interest Coverage Ratio	3	4.02#	2.22	3.74#
Net Profit Margin (%)	4.67	6.29$	3.06	6.02$
Return on Net Worth (%)	6.35	11.08^	5.46	11.44^
Operating Profit Margin (%)	8.94	11.2	7.15	10.84@
Inventory Turnover Ratio	2.74	3.16	2.86	2.9
Debtors Turnover (Days)	94	72	52	50

Note: There is a variance higher than 25% on a Y-o-Y basis-

*Debt-Equity Ratio: Due to reduction in debts

#Interest Coverage Ratio: Due to decrease in Profits and increase in debts $Net Profit Margin (%): Reduced profit after tax due to product mix, sales realisation and geopolitical issues ^Return on Net Worth (%): Due to decrease in Profit after tax and increase in Shareholders Fund @Operating Profit Margin (%) Due to lower operating leverage, geopolitical issues and new business incubation costs

Human Resource

The Company recognises its workforce as a critical pillar of sustained growth and operational excellence. It remains committed to developing a skilled, agile, and future-ready talent pool by promoting continuous learning, capability building, and professional development to help employees adapt to evolving technologies and industry dynamics. The Human Resources function plays a key role in attracting, nurturing, and retaining talent while fostering a collaborative and performance-driven work culture. Employee health, safety, and well-being remain top priorities, supported by regular facility audits and dedicated plant safety committees that monitor and address workplace safety standards. The Company continues to promote a positive and inclusive work environment where merit and performance are recognised and rewarded. As of 31 March 2026, the Company had a workforce of 3599 employees, supported by 3400 contractual personnel including consultant, across its operations.

Information Technology

Indo Count Industries has integrated advanced information technology and digital strategies into its core operations to enhance efficiency, strengthen brand engagement, and accelerate e-commerce growth. The Company continues to invest in modern technologies and business process re-engineering to optimise internal workflows and support scalable operations. Adopting a digital-first approach, it has expanded its direct-to-consumer presence through platforms such as wamsutta.com, as well as revamped domestic e-commerce portals for Boutique Living and Layers, offering curated product assortments and an improved user experience.

With a strong focus on mobile optimisation, the Company leverages digital channels to broaden its market reach beyond traditional retail formats. Its marketing strategy integrates performance-driven digital campaigns, social media engagement, influencer collaborations, and innovative tools such as augmented reality filters to enhance consumer interaction. In the future, Indo Count aims to strengthen its position as a technology-driven textile leader by further leveraging digital platforms and integrating technology with ESG principles, including improved traceability and sustainable sourcing across the value chain.

Risk & Concerns

The Company operates in a dynamic business environment that is exposed to various strategic, operational, financial, regulatory, and market-related risks. As a significant exporter of home textile products, the Company is also susceptible to changes in global trade policies, including the imposition of tariffs, geopolitical developments, shifts in customer demand, foreign exchange fluctuations, and volatility in raw material prices.

Recent changes in tariff policies, particularly in key export markets, have the potential to influence the Companys cost competitiveness, pricing strategies, customer demand, and supply chain dynamics. The Company continues to closely monitor these developments and proactively engages with its customers and supply chain partners to minimise the impact. Through diversified sourcing, operational efficiencies, prudent inventory management, optimisation of product mix, and strategic commercial initiatives, the Company strives to mitigate the effect of such external developments while preserving its competitive position.

The Companys risk management framework is supported by a clearly defined risk governance structure aligned with its business objectives and the evolving risk landscape. The framework takes into account industry-specific factors, liquidity considerations, market conditions, and earnings objectives within acceptable risk parameters, thereby facilitating informed decision-making across the organisation. To effectively manage financial risks, the Company employs appropriate risk mitigation measures, including foreign currency hedging and other suitable strategies. Risk management is embedded into the Companys strategic planning and day-to-day operations, enabling the timely identification, assessment, monitoring, and mitigation of key risks.

Risks are systematically evaluated based on their likelihood and potential impact and are assigned to designated functional leaders responsible for implementing appropriate mitigation measures. A structured monitoring mechanism at both the business unit and enterprise levels ensures continuous oversight and facilitates timely response to emerging risks.

The Company is making significant investments in brownfield capacity expansion, modernization of its spinning facility, and the development of a greenfield utility bedding project in North Carolina. In addition, it continues to invest in automation and technology upgradation across its manufacturing facilities. These strategic initiatives are expected to enhance production capacity, improve operational efficiency and scalability, strengthen execution capabilities, reinforce the Companys long-term competitive position, and support sustainable business growth.

The Company remains committed to maintaining a robust risk governance framework. The Risk Management Committee oversees the enterprise risk management process to ensure its continued adequacy and alignment with the Companys strategic objectives and the evolving business environment.

Internal Control Systems and Their Adequacy

The Company has established a comprehensive internal control framework to ensure effective operational efficiency, regulatory compliance, and accurate financial reporting. Its policies and procedures are designed to support both current operations and strategic growth objectives.

To strengthen oversight and accountability, the Company combines robust internal controls with regular internal audits and leverages advanced digital systems. A key milestone in its digital transformation is the implementation of SAP S/4HANA, which enhances process automation, real-time monitoring, and risk mitigation.

The Audit Committee periodically reviews the adequacy of internal controls, financial policies, risk management measures, key audit observations, and accounting compliance. This continuous evaluation ensures transparency, operational integrity, and alignment with global best practices.

Cautionary Statement

This section contains the Companys objectives, estimates, expectations, and projections, which may include ‘forward-looking statements as defined under applicable securities laws and regulations. These statements are based on certain assumptions and anticipated future events. However, the Company cannot assure the fulfilment or accuracy of these assumptions and expectations. Actual outcomes may differ significantly due to factors beyond the Companys control. The Company does not undertake any obligation to revise or update these ‘forward-looking statements considering future developments, information, or events.