Indo Count Industries Ltd Management Discussions.


The year 2020 unfolded quite unusually as the world saw the biggest contraction since the Great Depression of 1929. Globally, economies witnessed a significant demand slowdown and increased protectionism. A year which was already reeling under the after-effects of deteriorating US-China trade relationships, uncertainties around the US Presidential elections, volatile crude prices and the closure of Brexit deal, got further aggravated by the outbreak of the Covid-19 pandemic. This pandemic brought the world down to its knees as both developed and developing economies were hit hard by an unseen health and economic crisis. Trade and tourism came to a screeching halt, business across sector came to a sudden stand still, and the entire demand-supply mechanism was interrupted almost instantaneously. According to the World Economic Outlook, the global growth contracted by 3.3% in CY 2020 (Source: World Economic Outlook, April 2021).

World Real GDP Growth (%)

The fast spread of the Covid-19 virus in CY 2020 prompted authorities around the world to implement strict measures. These measures intended containing further spread of the virus for safety and health reasons. Governments around the world announced monetary and fiscal stimulus packages to boost business activities for mitigating long-term economic impacts. The restrictions definitely helped reduce the impact of the virus on public health and economy in the short term. The gradual resumption of operations across sectors and geographies, in Q4 2020-21, indicated a long-term optimistic outlook for the global output, still looming with hints of uncertainty.


The US economy was reeling with a recessionary trend due to the Covid-19 pandemic since the beginning of the year. The forthcoming economic contraction was indicated by an inverted US yield curve. Unemployment levels went on record-highs during May 2020, with the US Bureau of Labour

Statistics reporting U-3 unemployment figures of 14.7% the highest recorded since 1941. Apart from this, in April

2020, construction of new homes in the US dropped by 30%, reaching the lowest in the last five years. The US Department of Commerce reported a fall in consumer spending by 7.5% during March 2020. This was the largest monthly drop since the record keeping began in 1959. As a result, the countrys gross domestic product (GDP) reduced by 4.8% during the first quarter of CY 2020. To cushion the economic against the impact, a USD 2 trillion package under the CARES Act was signed into law in March 2020 the largest economic stimulus legislation in the US history. The fall in the GDP continued in the second quarter as well. However, during the third quarter, the US economy started to turn around due to number of reasons. An improved consumer buying sentiment post the stimulus packages announcement by the Government, gradual resumption of economic activities along with a fainting impact of Covid-19 in the US economy were the major contributors here. The nations real GDP increased at an annual rate of 4.3%, reflecting the continued economic recovery, reopening of establishments, and continued Government response to the pandemic. According to the National Retail Federation (NRF), the retail sales are expected to grow between 6.5% and 8.2% to more than USD 4.33 trillion in CY 2021 as more individuals get vaccinated and the economy reopens.


With gradual recovery of the economy from Covid-19 through increased vaccination drives, and normalisation of economic activities, the US economy is already on a path to turnaround.

According to the most recent forecast released at the Federal Open Market Committee (FOMC) meeting in December 2020, the US GDP growth is expected to rebound up to 4.2% in

CY 2021, and moderate to 3.2% in CY 2022, and 2.4% in CY

2023. Although uncertainties due to the subsequent Covid-19 waves is imminent, a faster recovery in the US economy is expected in the CY 2021.

European Union (EU) Region

The European economy was already under stress due to the Brexit deal, slower economic activity and other factors. And so, the Covid-19 pandemic only struck the economy further. Governments were forced to take drastic and stringent measures to contain the spread of the virus. As a result, activities across sectors fell substantially, recording the real GDP fall at double-digit rates in both, the euro zone and

European Union (EU) in the first half of the year. The confinement measures taken to limit the spread of

Covid-19 caused a slump in the economy. It slipped into contraction after almost seven years of uninterrupted growth. Compared to the last quarter of CY 2019, GDP contracted by

3.6% in the euro area, and fell by 3.2% in the EU. The European Purchase Managers Index, a key indicator of the economic activity, crashed to a record low of 13.5 in April 2020. However, with massive stimulus packages and policy support announced by the Governments, the economic activities slowly started resuming in the EU region since the second half of CY 2020.


Despite the high and rising human toll of the pandemic, economic activities appear to be adapting to the new ways of doing business. The additional policy measures announced at the end of CY 2020 are expected to provide further support to the economy in CY 2021. A growth rate of 4.1% is forecasted in CY 2021 the fastest the European economy has grown since

CY 2017. The vaccine drive has raised hopes of a turnaround in the pandemic this year. However, renewed waves and new variants of the virus pose concerns for the outlook.


The Indian economic growth, like major world economies, has been muted in the year 2020. Lower consumption across sectors, slower economic activities across regions and lockdown measures for curbing the ongoing pandemic across the country hold the blame for this.

With the onset of the pandemic and lockdown restrictions on economic activities, GDP growth for June quarter of 2020-21 declined by 23.9% (Source: Ministry of Statistics and Programme Implementation, August 2020). To counter the effects of the pandemic, the Indian Government and RBI announced a Covid-19 relief package to the tune of Rs 29.87 lakh Crores in aggregate, touching all spheres of the economy

(Source: Press Information Bureau, Government of India, Ministry of Finance, 12th November 2020).

As a result of these fiscal and monetary stimulus measures, the Indian economy went on to register a 0.4% GDP growth in December 2020 (Source: Ministry of Statistics and Programme Implementation, February 2021). In the fourth quarter, important indicators such as the unemployment rate showed signs of improvement. It went from 9.06% in December 2020 to 6.9% in February 2021 (Source: Centre for Monitoring Indian Economy). Manufacturing PMI increased for the seventh month in a row to 57.7 in February 2021, surpassing global levels

(Source: Boston Consulting Group India Economic Monitor, March 2021). In 2020, the country received a remarkable 13% increase in FDI. GST collections have been steadily increasing over the last six months, and in February 2021, it surpassed the USD 1 trillion mark (Source: Boston Consulting Group India Economic Monitor, March 2021).


The Indian economy is undergoing a V-shaped recovery. This gradual turnaround is underpinned by the largest inoculation drive, uplifting consumer sentiment, increasing investments and revival of business activities across sectors to their pre-Covid-19 levels. In the next financial year, 2021-22, domestic economy is projected to register growth of around 11% (Source: Economic Survey 2020-21).


The global textile and apparel industry comprises fibres, yarn, household and technical fabric, as well as garments. The global apparel market fell by 22%, coming down from USD 1,635 billion in CY 2019 to USD 1,280 billion in CY 2020, due to challenges posed by the pandemic. There was an overall deterioration in the performance of the textile industry in CY 2020. However, the demand started picking up from the slump during the second half of CY 2020 This came in as a ray of hope for the textile manufacturers and the related incumbents in the entire value chain. As per the International Textile

Manufacturers Federation (ITMF), starting from CY 2021 to CY 2024, there are positive turnover expectations in the sector. On a global level, sales expectations are especially strong for CY 2021 and CY 2022, indicating a stronger recovery.

Source: UN Comtrade & Wazir Analysis


The Global textile industry is expected to record a CAGR of 3% and reach USD 2,007 billion by CY 2025. Increasing consumer awareness, rising disposable incomes, rapid urbanisation and growing e-commerce platforms, coupled with fast pace changing trends in the fashion industry are together projected to drive the global textiles market. This demand is largely expected to be driven by developing countries like China, India, Mexico and Bangladesh.


The Indian Textile Industry comprises spinning, weaving and knitting, fabric finishing

Indias second-largest employment generating sector. The Indian textile and apparel market fell by 30% from USD 106 billion in 2019-20 to USD 75 billion in 2020-21. This was attributed to the economic impacts and trade restrictions due to the Covid-19 pandemic. Indias textiles industry contributed around 7% to the industry output (by value) in 2019-20. The Indian textiles and apparel industry contributed 2% to GDP, 12% to export earnings, and maintained a share of 5% of global textiles and apparel trade in 2019-20 (Source: IBEF, Indian Textile Industry Report, February 2021).

Source: DGCI&S and Wazir Analysis

With exports worth USD 33.5 billion in 2019-20, India is the worlds fifth largest exporter of textile and apparel. In 2020-21, Indias T&A exports were projected to drop about 15% as a result of Covid-19, reaching USD 28.4 billion. However, with improvement, it is projected to rise at an 11% CAGR to USD 65 billion by 2025-26.

Source: DGCI&S and Wazir Analysis

The textile industry sources its raw material from the agriculture sector and its by-products. Thus, making all-round sustainable development of the textile industry is imperative to the development of the Indian economy.

Impact of Covid-19 on the Indian Textile Industry

With the outbreak of Covid-19, lockdowns across regions were imposed and economic activities came to a standstill, barring few essential goods and services. The Indian textile industry was also severely affected by this pandemic during 2020-21.

Discontinuation of Manufacturing Sector

The Indian manufacturing industry came to a near standstill in the initial months of 2020-21. Post unlocking, most manufacturing units in the country operated primarily with 50% workforce across industries. Thus, translating into suboptimal levels of capacity utilisation.

Logistics and Supply Interruption

Logistics and supply chain interruption and disruptions in exports due to the Government measures taken to curb the virus impacted the entire value chain. During the period April-September 2020, Indias net trade was down by around 50% on month-on-month basis as against the similar period of the previous year.

Order Termination

Many international and domestic buyers either terminated or deferred their consignments, sighting the uncertain market conditions. Thus causing further slump across the industry.

Collapse in Brick-n-Mortar Form of Retail Sales

Retail sales of garments and other apparels through physical stores completely stopped due to the lockdown restrictions in the country. Even post unlocking, the festive and wedding season sales were profoundly impacted by the negative sentiments across the country.

Development of New Consumption Channels/Patterns

Due to interruption in the physical form of sales, the online and e-commerce sales of goods and apparel witnessed a sharp rise in 2020. Furthermore, with the advent of ‘Work-From-Home culture, the demand for casual wear apparels over formals surged significantly.

Among the sub-sections of the Indian textile industry, lockdowns affected the production of cotton yarn and manmade fibres (MMF). It resulted in a slump in their output by around 33.7% and 24.6%, respectively, during the April-October 2020 period. Also, the pandemic-related disruptions affected exports as the outbound shipments of MMF decreased by 19.6% during April-September 2020 while that of readymade garments (RMG) fell by 30.4% during April-November 2020. The Indian textile industrys heavy dependency on exports dented its domestic production as reflected in the Index of Industrial Production (IIP) figures for textiles and wearing apparels registering a de-growth of 24% and 34%, respectively, during April-February 2021.

(Source: CARE Ratings, Indias foreign trade update, April 2021)

Several initiatives were taken by the Government in the Union Budget 2021-22 to uplift the Indian textile sector. The grant to the sector was increased from Rs 3,300 crores previously to Rs3,614.64 crores. The budget increased the allocation of Amended Technology Upgradation Scheme (ATUFs) from Rs 545 crores previously to Rs 700 Crores. This will help clear the pending capital subsidy. It also allocated Rs 30 crore for Export Promotion Studies against Rs 5 crore in the last budget, and Rs 100 crore for Integrated Scheme for Skill Development. With these boosting measures taken by the Centre, textile industry is expected to see a rebound in 2021-22.

(Source: The Union Budget, 2021-22)


EU remains the largest market for the Indian textile and apparel products. It consists of home linen, womens apparels, knitted t-shirts and a variety of packing goods such as sacks and bags.

Indias export of textile products towards EU remained muted during 2020-21 due to challenges posed by the pandemic. The Indian textile exports also face higher trade barriers from other competitor countries like Vietnam, Bangladesh, and Pakistan in the form of higher trade tariff.


US is one of the major export markets for the Indian textile and clothing industry. Readymade garments held the highest share of exports to the US, followed by the home textiles in CY

2020. Indias exports during the year to the US was about 47% for garments, followed by home textiles making an extensive share of 38%.


The Indian textile industry has varied segments and gamut of opportunities to offer the end users. Amidst the Covid-19 pandemic affecting the economies drastically, customers across regions are increasingly looking to de-risk their dependence on a single geography. This ‘China+1 strategy across the prime textile consuming markets has brought in several opportunities for the Indian textile industry. Through these opportunities, India can capture higher market share of global economies from China, primarily focusing the EU and the US.

Abundance of raw materials: The Indian textile industrys prime strength lies in its strong production base. This is further led by the abundant availability of the different types of yarn/fibres (ranging from natural fibres cotton, jute, silk, wool to man-made fibres like polyester, viscos, nylon and acrylic).

Skilled manpower: India enjoys a comparative advantage in terms of skilled manpower and cost of production when compared to other major textile producers.

Robust demand: For emerging markets like India, the demand growth is driven by several factors. These include rising per capita income level, shift of behavioural pattern towards discretionary spending amongst the consumers and increasing brand consciousness.

Policy support: Several policy support initiatives taken by the Government of India favourably puts the country in the higher growth thrust sector. These policies range from fund allocation to the capital subsidy scheme, infrastructure development of textile value chain to 100%

FDI in the sector (through automatic route).


With the Governments boost to the sector, rise in the public buying sentiments and large-scale vaccination drive, a turnaround in the textile industry is evident. Since the last quarter of 2020-21, the economy has been witnessing an increasing consumption pattern across customer segments along with a higher export demand. During 2021-22, demand for textile is expected to improve even as industry will continue facing challenges till the restricted movement of people is completely uplifted (work from home norm, online colleges/ education). Further, the discretionary nature of the industry is also expected to affect its sales to an extent. The market is expected to recover and grow at 10% CAGR from 2019-20 to reach USD 190 billion by 2025-26. However, with the rising and rapid spread of the second wave of Covid-19, the actual achievement of the growth projections may be delayed.


Home textile offers a wide range of categories such as furnishing fabrics, curtains, carpets, table covers, kitchen accessories, made-ups, bedspreads, bath linen, and other home furnishings.

The global home textile market is one of the most lucrative segments in the global textile industry, expected to report a CAGR of 2.9% during the period CY 2021-CY 2025. The global home textile market stands at USD 155 billion in 2021 and is expected to reach to USD 174 billion in 2025. The industry is witnessing a steady growth driven by factors, like rising consumer spending on home renovation and fashion sensitivity towards household furnishing.

(Source: Mordor intelligence report)

The United States and Europe are the biggest consumers constituting 60% of the home textiles imports. Here again, countries like India, China, and Pakistan are the key suppliers.

Rising focus on market by the governments and favourable regulatory policies are expected to be one of the prime drivers for market movements. Such support, along with growth in investments in market, provide further opportunities for the global home textile industry to prosper. The growing real estate market, along with increasing consumer spending on a home renovation is expected to drive market growth going ahead.


Bed linen includes bedspreads, blankets, mattress, mattress cover, pillows, duvets, duvet covers, and bed covers, among others. This segment is anticipated to register a CAGR of

6% between CY 2021-CY 2026. This is due to the growth of end-use sectors such as hospitality, housing, growing fashion sensitivity of urban consumers toward home furnishings, increasing demand for digitally printed home textiles, and rapidly mounting fashion trends in home textiles. (Source: Mordor intelligence report)

The major drivers of the industry include rising disposable incomes, increasing population, rising housing industry, technological developments, and the growing availability of goods in a wide range of fibre types, textures, fabrics, styles, and colours. Also, the rising interest of consumers in organic and eco-friendly bed linen products is expected to be a key trend guiding the sectors growth.


Last few years have seen the Indian home textile segment emerge as one of the most attractive textile segments. This emergence is in terms of growth potential and the exclusive product offerings put together. India home textile market reached USD 6.2 billion in 2019-20. (Source: The Great Lockdown: Indian Home Textile Industry, Wazir Advisor, April 2021). During the year, the sector faced demand from the hospitality sector, a moderate demand from the household sector and increasing demand from the healthcare sector due to the pandemic. India accounts for around 7% of the global home textiles trade. Superior quality, unique designs, extensive variety in terms of price, designs and colour choices make Indian companies a leader in the US and the UK contributing two-third to their exports.

India is being recognised as a preferred sourcing destination for lot of products. These products offer traditional artistry along with a unique appeal by being effectively used for producing value-added home textile items.

(Source: Mordor Intelligence Report)


Rapid urbanisation, improved standard of living coupled with increasing spending power are some of the key factors anticipated to support growth drive in the Indian home textile industry. Growing spending towards modernisation of the interior of the households is resulting in demand surge for home textile products such as bedsheets, pillows and covers, and curtains, among others. Furthermore, rising awareness for healthcare and hygiene is expected to increase demand from the healthcare sector as well.

Exports to the US and EU region are also likely to witness an upsurge. Younger population, increasing per capita income and compulsive buying habits of consumers are the prime reasons behind this increase..


Amidst uncertainties in the overall market scenario, the year 2020 can be considered a mixed year in terms of performance in the global cotton industry. Prices have been improving sequentially for 10 straight months from May 2020 onwards to February 2021. A growth of about 7% on m-o-m basis was witnessed in each of the first 2 months of CY 2021.

The increase in prices is driven by improvement in international demand on account of relaxations in lockdown restrictions. This apart, 7.4% y-o-y lower global cotton production (24.6 million tonnes) estimates by the United States Department of Agriculture (USDA) amidst 14.5% increase in global consumption (25.7 million tonnes) for Cotton Season (CS) 2020-21 also supported the price rise. Moreover, higher cotton imports by China (the worlds largest cotton consumer and one of the primary importers of cotton) from USA (the worlds largest cotton exporter) on account of implementation of the USA-China phase one trade agreement aided the international price growth. Furthermore, the ban imposed by the USA on imports of Chinas cotton products made in Xinjiang region due to forced labour issues are also believed to have increased the international cotton prices.


Cotton production in India is estimated to remain stable at 6.1 million tonnes in the current cotton season (CS) October 2020-September 2021 backed by higher yields. Also, an increase in cotton Minimum Support Price (MSP) by 4.9% to Rs 5,515 per quintal for medium staple cotton for CS 2020-21 is estimated to aid cotton production.

Cotton Balance Sheet Estimated as on March 31, 2021

Details 2019-20 2020-21
(in lakh bales) (in million tonnes) (in lakh bales) (in million tonnes) % change
Opening stokc 32 0.54 *125 2.13 290.6
Crop 360 6.12 360 6.12 0.0
Imports 15.5 0.26 11 0.19 -29.0
Total Supply 407.5 6.93 496 8.43 21.7
Mill onsumption 218 3.71 288 4.90 32.1
Consumption by SSI: Units 18 0.31 24 0.41 33.3
Non-Mill Consumption 14 0.24 18 0.31 28.6
Total Domestic Demand 250 4.25 330 5.61 32.0
Available Surplus 157.5 2.68 166 2.82 5.4
Exports 50 0.85 60 1.02 20.0
Closing Stock 107.5 1.83 106 1.80 -1.4

Source: Cotton Association of India (CAI)

Apart from production, cotton supply also includes carry-over stocks from last cotton season (which surged by 290.6% to 2.1 million tonnes). As a result, total cotton supply during CS 2020-

21 is estimated to increase by 21.7% to 8.4 million tonnes. The domestic cotton demand, disrupted due to Covid-19 pandemic in CS 2019-20, is expected to grow by 32% to 5.6 million tonnes on account of a likely recovery in current season. India is also estimated to increase cotton exports by 20% to 1.02 million tonnes. This will be backed by improving international cotton consumption and the demand for Indian cotton in view of its competitive pricing in the global markets. Thus, higher outbound shipments will help India reduce the surplus availability of cotton. With gradual unlocking activities, some recovery in domestic cotton demand and consumption is expected to increase by 32% y-o-y in CS 2020-21. Additionally, cotton exports from India also witnessed revival and grew by

39.2% to 0.48 million tonnes during October 2020-January

2021. This is further expected to grow by 20% to 1.02 million tonnes during CS 2020-21. This growth in cotton exports was primarily attributable to strong demand for cotton from China and Vietnam.


With upward trend in cotton prices and better domestic and international demand for cotton and cotton yarn, a higher cotton crop is expected to be produced in next CS 2021-22. The competitive Indian cotton prices provided support to cotton exports. This trend is expected to continue in the coming period as well with the Indian cotton prices remaining competitive as compared to its international counterpart. Thus boosting the cotton industry.

(Source: CARE Research: Cotton and cotton yarn update, April 2021)


Indo Count Industries Limited (‘ICIL or ‘The Company) is a leading global player, specialising in home textiles and bedding segment. The Companys extensive product offering comprises premium value-added products including bed sheets, fashion bedding, utility bedding and institutional bedding. ICIL is the largest manufacturer and exporter of bed sheets, bed linen, quilts from India and is recognised among the top three global bed sheet suppliers to the US.

The Company offers end-to-end solutions in the home textile segment through its technologically superior manufacturing facility in Kolhapur, Maharashtra. ICILs brands cater to a global consumer base and enjoys a wide brand following. The Company sells its products globally through its extensive network of marquee retailers.


R&D is one of the primary focus areas at ICIL. It starts with sentiment surveys to gauge consumer preferences and continues till development of value-added products and post-launch market research. The Company has collaborations that encompass both innovative product designing and sustainable material consumption. The in-house R&D team of the Company has contributed to the development if various new products and has been involved in the development and implementation of new processes & other process improvements. During the year under review, the Company launched many new products under our newly Launched Brands namely "Wholistic" and "Sleep Rx" in Health & Hygiene and Sustainable Performance category respectively. The Company also introduced process improvements in the fieldof weaving preoperatory. R&D continues to help the Company in its drive to become more sustainable and environment friendly.


The Company achieved growth in various parameters despite challenging environment and lockdown restrictions. Our growth during the year was propelled by higher demand for home textile products and consequent increase in our market share globally. Furthermore, our persistent focus on expanding our current capacity, growing our branded portfolio, enhancing our domestic presence, improving ecommerce in comparison to and building and creating a sustainable value chain have helped us to achieve the strong performance & growth.

Standalone Performance Highlights: gin during the year under

Delivered record sales volume of 78.2 Mn metres for FY21, a growth of 26% YoY

Achieved total revenue of Rs 2,552 crores for FY 2020-21

EBIDTA stood at Rs 419 crores for FY 2020-21 as against

Rs 232 crores in previous year

Achieved net profit Rs 260 crores for the year ended March 31, 2021

EPS stood at 13.18

Consolidated Performance Highlights:

Achieved total revenue of Rs 2,557 crores for FY 2020-21 as against Rs 2135 crores in previous year

EBIDTA rose by 74% to Rs 415 crores in 2020-21 versus Rs 238 crores in 2019-20

Net Profit increased by 241% to Rs 249 crores in 2020-21 as against Rs 73 crores in 2019-20

Key Financial Parameters

Particulars Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Operating Profit Margin (%) 15.06 9.70 14.70 9.30
Net Profit Margin (%) 10.20 3.65 9.74 3.42



2020-21 2019-20 2020-21 2019-20
Return on Net 20.40 7.60 19.40 7.40
Worth (%)
Debt-Equity Ratio 0.19 0.21 0.20 0.18
Interest Coverage 14.09 5.19 13.23 4.95
Current ratio 1.93 1.84 1.91 1.84
Inventory 115 109 121 108
Turnover (days)
Debtors Turnover 70 47 69 41

2019-20 includes exceptional item includes Rs 94.27 Crores provided against refund of excess export benefits of earlier years by way of MEIS as per the Adjudication Order issued by office of The Commissioner of Customs

Reason for variation (>25%): The Debtors Turnover Ratio has increased due to higher turnover and increase in credit period to some customers due to pandemic. The Interest Coverage

Ratio has improved due to increased profits previous year.TheOperatingprofit ProfitMargin Margin,Net and Return on Net Worth have improved due to increase in revenueandprofit.


In the month of March, 2020, the outbreak of Novel Coronavirus

(COVID-19) pandemic developed rapidly into a global crisis.

This led to declaration of the lockdowns by the governments in the countries all over the world. Your Company immediately shifted its focus on ensuring the health, safety and well-beingof of all employees. The manufacturing plants of the Company at Kolhapur were temporarily closed from March, 23, 2020 to contain the spread of COVID-19 as per Central/State

Government directions. The partial manufacturing operations at the Companys Home Textile and Spinning Plant were resumed w.e.f. April 26, 2020 and April 27, 2020 respectively with limited workforce subject to the conditions prescribed by the Government/Local Authorities. The Company thus faced certain initial disruptions in operations due to COVID-19 pandemic at the beginning of the year 2020-21. Form June 2020, retail stores in US and Europe started reopening in the phased manner and in the second half of the 2020-21, with unlocking and revival of economic activities, the textile, and especially the home textile segment, performed significantly well. Record holiday season sales happened in the US, expanding exports from the country. Furthermore, with the shift in the work culture being practiced through ‘Work from Home, the domestic consumption of the home textile segment improved manifold. This change in customer focus towards home textiles and ICILs focus of expanding distribution though e-commerce platform helped the Company to achieve highest ever performance during the year. Led by an experienced management team with a strong customer base, capital adequacy, wider geographic distribution, extensive sectoral understanding of product development as well as a relatively under leveraged balance sheet, the Company was positioned to adapt to the ever-changing customer preferences and successfully navigated through challenges posed by the Covid-19 pandemic.

The Company follows all the Government regulations and directives regarding Covid-19 issued from time to time. The Company has taken all steps such as maintenance of social distancing norms, distribution of masks and PPE kits to employees, regular sanitisation of the office and manufacturing facilities, daily thermal screening, biometric attendance to ensure health and safety of all employees.


To manage with the global climate change impacts, the Company continued its initiative in the agricultural sector through its Project GAGAN. This initiative involves raising awareness amongst the farmers regarding sustainability improvement in cotton farming. As a part of this project, the farmers learn techniques to enhance productivity of cotton whilst inculcating climate saving initiatives like lower usage of water, pesticides and fertilisers. Primary objective of this project is to integrate the value chain from farm to fashion. It aims at creating awareness amongst farmers so that cotton farming remains profitable and sustainable for them over the years.

The Company also partnered Walmart in Project GIGATON.

Through this project, suppliers set goals to reduce carbon emissions across 6 pillars such as energy, waste, packaging, agriculture, forests, and product use and get Walmarts acknowledgement. ICIL is currently identifiedas the Giga-Guru by the global giant Walmart.

ICIL has continuously emphasised on sustainability initiatives and has set standards through HIGG Index. This index is a self-assessment benchmark to measure metrics such as environmental sustainability, energy savings, water consumption and recycling, zero effluents discharge and gas emissions. All of these parameters are compared globally among all manufacturers to assess environmental and social sustainability across the supply chain. The Companys verified HIGG Index score was 78 (Level 3) one of the best global scores across the home textile segment.


Risk management remains an integral part of ICILs business over the years. The Company has identified key external and internal risk factors associated with the operations along with the control process to mitigate such risks. Further, the Company conducts regular reviews of identified risks and control processes. This enables ICIL to mitigate such identified risks by ensuring newly evolved risks are addressed within stipulated timelines and appropriate control processes are adopted. Some of the primary risks and the Companys mitigation methods are listed below.

Risk Particulars Description Mitigation Methods Degree of Impact
Credit risk Inability to make timely payments deteriorating the risk profile/credit rating - Effective credit monitoring, resulting into timely collections and accounting accuracy Medium
- Analytics to provide lead indicators for potential defaulters
- Reinforcing the credit control process
Economic risk Slowdown/downturn in the global economy translating to lower revenue and profitability Geographical diversification of the revenues to mitigate risk of adverse impact Medium
Forex risk Adverse fluctuation in foreign exchange rates affecting profitability - Proactive management of forex exposure Medium
- Using structured and systematic hedging mechanism
- Consistent monitoring of exposure to currency fluctuations
- Timely execution of forex forward contracts
Competition risk Increasing competition resulting from shift in consumer behavioural pattern, and price - Offering end-to-end solutions under the home textile value chain Low
undercutting, among others, might impact business - Persistent focus to capture market share through strong R&D and value-added solutions
Environmental risk Inability to comply with regulatory obligations related to environment affecting profitability - Adherence to a diverse set of regulatory guidelines charted out at local, state, national and transnational level Medium
- Consistent monitoring regulatory changes ensuring compliance with all applicable regulations
- Frequent upgradation of technological equipment
- Achievement of ‘Giga Guru status for contributions towards environmental sustainability
‘Force Majeure risk Unforeseeable circumstances such as fire, natural calamity, pandemic, infrastructure breakdown and so on, affecting operations Effective long-term business continuity plan to reduce impact on the business Low
Cost risk Volatility in raw material cost impacting cost of production - Ensuring raw materials booking instantly after order confirmation - Maintaining adequate inventory levels to safeguard from short-term price volatility Low


As a progressive organisation, the Company places a high value on the most valuable asset its people. Integral to the Companys approach, human resource development is its distinctive strategy. The Company believes that alignment of all employees to a shared vision is crucial for success in the marketplace. The Companys Human Resource (HR) team plays a vital role in attracting and retaining talents from the textile industry. The HR team ensures conducting trainings for employees, to nurture their skill sets. The Company has built a future-ready organisation through learning, innovation, and world-class execution. ICIL aims training efforts towards personnel development to allow advancement and success within the organisation. The Company takes pride in building a culture of rewarding the merits and strongly emphasises on building a healthy work environment.

ICILs employee strength at the end of 2020-21 stood at 2,203. Further, during the year, the Company also hired 1,226 personnel on contractual basis.


The Companys well-established internal control systems ensure achievement of its operational, compliance as well as reporting objectives. Company has suitable policies and procedures in place, commensurate with its current size as well as for future growth. A broader system of internal controls and external audits have been defined and deployed to effect continuous improvements and protect the business from potential vulnerabilities. Policies and procedures play a critical role in operationalisation of internal controls. The Company also makes appropriate use of its systems and various applications to put checks and controls for strengthening this internal control framework. All such internal controls and their adequacy, financial and risk management policies, significant audit findings, and compliance with accounting standards, are regularly reviewed by the Audit Committee.


The global economy is on a major turnaround, with many countries showing continued growth in production and consumption. The future, though uncertain, is still optimistic. Consumption in the home textiles segment has shown resilience during the pandemic, with consumers exhibiting a strong buying trend due to health and hygiene reasons. This growth momentum in home textile segment is expected to continue in the next financial year with increased focus of consumers towards ‘Home, amidst a cultural shift towards ‘work from home and also higher usage of health, wellness and hygiene products. In line with Companys growth strategy, there is an expectation to grab higher market share through capacity building initiatives and enhanced focus on newer segments like B2C and D2C, going forward. However, with the second wave of Covid-19 pandemic in India, the Company remains cautiously optimistic about the growth projections, despite being well off as a global supplier to diverse geographies.

Cautionary Statement

Statements in this Report on Management Discussion and Analysis, relating to the Companys objectives, projections, estimates, expectations or predictions may be forward-looking within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results might differ materially from those expressed or implied, depending upon factors such as climatic conditions, global and domestic demand-supply conditions, raw materials cost, availability and prices of finished goods, foreign exchange market movements, changes in the Government regulations, tax structure, economic and political developments within India and the countries where the Company conducts its business and other factors such as litigation and industrial relations. The Company has obtained all market data and other information from sources believed to be reliable or its internal estimates, although its accuracy or completeness cannot be guaranteed. The Company assumes no responsibility in respect of forward-looking statements herein which may undergo changes in future based on subsequent developments, information or events.