Jagjanani Textiles Ltd Management Discussions

A. Indian Economic Overview:

The results of growth-enhancing policies and schemes (such as the production-linked incentive program and the Government?s continued push toward self-reliance), along with strong infrastructure spending, have begun to yield visible outcomes in FY 2024-25. These measures supported higher multiplier effects on jobs and income, improved productivity, and greater efficiency across sectors, leading to sustained economic expansion. In addition, spillover benefits from shifting global supply chains and geopolitical realignments strengthened India?s position as a preferred alternate investment destination. According to the Reserve Bank of India (RBI), the economy grew by 6.5% in FY 2024-25, in line with earlier projections. Inflation eased significantly during the year, with the average CPI inflation falling to around 3–3.5%, well below the RBI?s 4% target, helped by a moderation in food and commodity prices. The fiscal deficit narrowed to 4.8% of GDP, creating space for continued public investment. With inflation under control and growth momentum holding steady, FY 2024-25 marked a year of relative macro-stability, even as the Government and the RBI carefully balanced global headwinds, domestic consumption challenges, and fiscal discipline.

B. Outlook:

In the last decade, India has been one of the fastest-growing economies, with annual growth rate averaging 7-8%. The increase in GDP can be attributed to a variety of reasons, including favorable demographics, influx of investment capital and technological efficiency and productivity gains. As the new financial year begins, there is greater uncertainty on this question, not just because of difference in assessment of the economic situation at hand but also due to the ongoing geopolitical crisis which is fuelling a surge in global commodity prices, especially crude oil. Textiles remain a significant contributor to Indias GDP and employment, particularly in rural areas.

C. Industry structure and development:

India is the world?s second-largest producer of textiles and garments. It is also the fifth largest exporter of textiles spanning apparel, home and technical products. The textiles and apparel industry contribute 2.9% to the country?s GDP, 14% to industrial production and 15% to exports. Indian textile players have undertaken various initiatives to boost textile sales viz. investment to expand production capacity, using technology to optimize the value chain, leveraging strategic partnerships and strengthen sustainable textiles business. Textile industry has been steadily recovering post pandemic amid increased raw material prices and container shortages. Production-linked Incentive scheme is expected to be a major boost for the textile manufacturers. The scheme proposes to incentivise MMF (man-made fibre) apparel and MMF fabrics.

Opportunities: Going ahead, there could be a positive side for textile business as festival season will start from mid-3^rd Quarter till end of March, which majorly includes Diwali, Christmas and Holi.

Threats: The company is concerned about the various threats that it is exposed to which includes factors such as rising competition in the market both on the domestic & export front, duty free access to competing countries in US & European markets, uncertain business environment, fluctuating rupee, cost of raw material and its availability, slowdown in demand & change in fashion trends, possibility of increase in interest rates, etc. Besides this the Company is also exposed to factors such as the change in government policies, duties & taxes, availability of power from the grid, availability of labour etc.

E. Segment–wise or product-wise performance:

The Company is operating in only one segment i.e. trading of clothes. Therefore,there is no requirement of Segment wise reporting.

F. Risks and concerns:

Management recognizes the following principal risks that may influence decisions made by investors given their significant impact on business conditions as stated in the securities report, and among matters pertaining to accounting status, consolidated companies? financial status and business performance, as well as cash flows. Our risk management system addresses the increasingly complex risks that we face in our day-to-day operations. The risk management system conducts risk analysis of economic and social changes and implements preventive measures that are best suit for the Company.

G. Internal control systems and their adequacy:

The Company has its Internal Financial Control systems commensurate with operations of the Company. The management regularly monitors the safeguarding of its assets, prevention and detection of frauds and errors, and the accuracy and completeness of the accounting records including timely preparation of reliable financial information. The Head of Internal Audit together with External Audit consults and reviews the effectiveness and efficiency of these systems and procedures to ensure that all assets are protected against loss and that the financial and operational information is accurate and complete in all respects.

H. Discussion on financial performance with respect to operational performance:

During the year, the textile industry has shown a notable increase in financial performance compared to the previous year. Key indicators such as revenue have risen, driven primarily by expanded market presence and increased demand for our diversified product offerings. Our strategic focus on cost management initiatives has enhanced profitability margins, with increase in operating profit during the year. The financial performance of the Company for the Financial Year 2023-24 is described in the report of Board of Directors? of the Company.

I. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources. Investments in training programs have been pivotal in upskilling the workforce, particularly in areas such as advanced manufacturing techniques, quality control, and workplace safety. The industry has experienced a moderate increase in the number of people employed, reflecting both seasonal fluctuations and strategic expansions in production capacities.