OPERATIONS
The following discussion is intended to convey managements perspective on our financial condition and results of operations of the company for Fiscals 2025, 2024 and 2023. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our Restated Financial Information for Fiscals 2025, 2024 and 2023, including the related annexures.
Unless otherwise indicated or context otherwise requires, the financial information for Fiscals 2025, 2024 and 2023, included herein is derived from the Restated Financial Information, included in this Red Herring Prospectus. For further information, see “Restated Financial Information” and “Summary of Financial Information” on pages 273 and 84.
Our Fiscal year ends on March 31 of each year. Accordingly, all references to a particular Fiscal are to the 12-month period ended March 31 of that year.
This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with respect to future events and financial performance. Actual results may differ from those anticipated in these forwardlooking statements as a result offactors such as those set forth under “Forward Looking Statements” and “Risk Factors” on pages 28 and 39, respectively.
Business Overview
the fashion industry evolved, we recognized the need to modernize and adapt. Over the years, we invested in technologies like digital printing, computerized embroidery, and modern weaving techniques. These upgrades enabled us to respond to shifts in consumer preferences and produce fabrics suited to fast fashion. Today, we operate as a fabric manufacturer in Punjab, serving clients across segments, from apparel brands to individual consumers. Our offerings include fabrics, ready - to-stitch garments (womenswear), and designs that align with prevailing trends while preserving the techniques we have developed over time. This shift reflects our capacity to adapt and deliver value to our customers and partners.
Our business focuses on three core pillars that define our strategic approach and market presence:
> Brand enabler for other apparel brands: We work as a partner to apparel brands, supporting them in creating products for their customers. By supplying fabrics and designs based on market trends, we assist brands in developing collections that align with their target audience. Our experience spans a wide range of fabric types, enabling us to serve both established brands and new entrants. With our infrastructure and capabilities, we handle product development and execution, allowing brands to concentrate on their primary business activities. This approach helps brands respond to changes in the market and maintain their position.
> Own Brands: We also have our own brands “Rasiya”, “Kaytex” and “Darbaar-e-Khaas” catering to markets in North India, enabling rural and semi-urban presence. We manage everything from fabric production to ready-to-stitch suits, co-ord sets, and accessories such as shawls, scarves, and stoles. We focus on maintaining standards, following fashion trends, and offering prices aligned with customer expectations. Our brands offer designs that serves customer demand in Tier 2 and Tier 3 cities across Northern India. As our presence expands, we have reached new areas, established brand awareness, and built customer relationships.
> Non-Branded Segment: In the non-branded segment, we cater to bulk buyers, wholesalers, and retailers by supplying fabrics and garments such as ready-to-stitch suits and co-ord sets, accessories such as shawls, scarves, and stoles without specific branding. This segment focuses on delivering solutions to customers who prioritize flexibility and cost- effectiveness.
Our business model allows us to serve different market segments, offering both branded and non-branded products. This approach supports our ability to meet the varied and changing requirements of the textile and fashion industries and enables our company to focus on serving a wide customer base.
We use technologies such as digital printing for customizable designs, jacquard weaving for detailed patterns, computerized embroidery for consistent detailing, and processing methods in our operations. These methods support efficient production and help meet the changing requirements of the textile industry. Following are the technologies that we use:
> Digital Printing: Our company uses reactive digital printing machines for printing on cotton/viscose fabrics from Hopetech and sublimation printing machine from Hopetech (combined with a heat transfer machine) for printing on polyester fabrics. For details, please refer page 222 under the heading “Digital Printing Process”. Digital printing is a technological advancement in textile manufacturing that changes the method of applying designs to fabrics. This process involves directly printing digital designs onto textiles using inkjet-based systems. Unlike traditional techniques such as screen printing, digital printing does not require the use of screens or rollers, resulting in faster setup times, reduced material use, and the ability to produce detailed designs. The process supports customization by enabling the creation of various patterns, gradients, and image-based prints. It can be used on multiple types of fabrics, including cotton, silk, polyester, viscose, linen, and blends, making it suitable for different end-use cases. Digital printing enables the production of detailed patterns, clear outlines, and consistent coloration, which can be applied to garments such as salwar suits, sarees, and dress materials. This technology supports responsiveness to changing market trends by allowing manufacturers to produce small batches with variable designs, helping meet the requirements of short lead times and seasonal collections.
> Weaving: Our company uses weaving machines by Sulzer. For details, please refer page 220 under the heading “Fabric Manufacturing Process””. Weaving is one of the most essential processes in textile manufacturing, forming the foundation of fabrics. By interlacing two sets of yarn·warp (lengthwise) and weft (crosswise)·weaving produces a variety of fabric types, each characterized by its texture, strength, and appearance. The process of weaving includes:
Warp Preparation: The warp yarns are aligned and stretched on a loom to form the base of the fabric. This requires precision to ensure uniform tension and alignment.
Weft Insertion: The weft yarns are inserted across the warp using various techniques, depending on the type of loom or weaving method.
Interlacing: The interlacing pattern of warp and weft determines the weave type, which affects the fabrics strength, texture, and aesthetics.
Weaving is used to create a wide range of fabrics, including cotton, silk, polyester, viscose, and blends and is customisable with different weave patterns, such as plain, twill, satin, or jacquard, offer unique textures, drape, and durability, making them suitable for specific uses and catering to market such as fashion industry.
> Jacquard: We use electronic jacquard weaving machines by Sulzer, Vamatex and Somet. For further details, please refer page 222 under the heading “Jacquard Fabrics Manufacturing Process". Jacquard technology represents a significant advancement in textile manufacturing, enabling the creation of detailed patterns and designs directly into the fabric during the weaving process. It is widely used for fabrics, offering design capabilities and versatility. It involves the use of a specialized loom equipped with a jacquard attachment that controls individual warp threads. This allows for the production of complex, multi-coloured patterns and designs that are woven into the fabric, rather than printed or embroidered. Named after Joseph Marie Jacquard, who invented the loom in the early 19th century, this technology has evolved significantly with modern advancements, including computerized jacquard looms. Jacquard weaving is used to create fabrics for upholstery, drapery, and home decor, such as brocades, damasks, and tapestries. It is integral to high- end fashion, producing fabrics with intricate textures, patterns, and vibrant designs and can be applied to various materials, including silk, cotton, polyester, viscose, and blends, ensuring diverse fabric options.
> Computerised Embroidery: Our company uses computerized multi-head embroidery machines of Zhejiang Yuelong Sewing Equipment. Computerised embroidery is offered as an add-on service to complement fabric customization and hence no separate manufacturing process is defined for the same. Computerised embroidery is a process used in textile manufacturing to add patterns, motifs, and textures to fabrics or garments using automated embroidery machines. It replaces manual embroidery with machines equipped with CAD (“Computer-Aided Design") systems, which allow for accurate replication of designs in less time. This method integrates traditional embroidery techniques with digital tools, enabling consistent output and increased production efficiency. It supports the creation of various design elements for different textile segments, including both couture and ready-to-wear. Computerised embroidery enables the production of customized designs at scale, addressing the demand for individualized and differentiated textile products across various markets.
> Dyeing and Processing: We use jigger dyeing, jet dyeing, mercerizing, sanforising, decadising and hot air stenters of Harish. Dyeing and processing are key steps in textile manufacturing that convert raw textiles into finished materials suitable for end-use. These processes prepare fabrics to meet specific aesthetic, functional, and performance requirements. Dyeing refers to the application of colour to textiles through dyes that bond with the fibres. This can be carried out at different stages, such as the yarn or fabric stage, depending on the desired outcome. Processing includes various finishing techniques applied after dyeing, involving both chemical and mechanical treatments to alter the fabrics characteristics. Together, dyeing and processing ensure that fabrics conform to defined standards for colour, texture, and utility. These steps play a role in aligning textile properties with requirements across sectors such as apparel, sportswear, and industrial textiles.
Our company maintains quality as part of its operations. We start with inspection of raw materials, such as yarns, dyes, chemicals, greige fabrics to ensure they meet our specifications for durability, colour consistency, and performance. Before dispatch, every finished product is checked for physical appearance, strength, and compliance with design specifications. Parameters such as texture, colourfastness, stitching accuracy, shrinkage, tear strength, and pilling are reviewed to confirm they meet our customer-defined quality standards.
We also have our in-house design team which is the creative force behind our trend-driven fabric solutions. This team comprises of designers and textile experts who stay at the forefront of global fashion trends, ensuring our products are always aligned with market demands. By leveraging advanced design tools, such as CAD software, and drawing inspiration from global fashion forecasts, our designers create unique patterns, textures, and designs that cater to a wide variety of customer preferences. The in-house design team plays a pivotal role in developing seasonal collections, ensuring we remain relevant in the fast-paced textile and fashion industries. From ideation to execution, the team collaborates with our production units to translate creative concepts into quality fabrics and garments. Their expertise extends across various styles and applications, including digital prints, jacquard weaves, and embroidered designs, allowing us to offer a diverse portfolio of products. This team also works closely with our clients, including apparel brands and wholesalers, to develop customized designs that meet their specific requirements. Whether its creating exclusive prints for a premium collection or producing culturally inspired patterns for regional markets, our design team delivers tailored solutions that enhance the uniqueness of our customers products. Additionally, the in-house team ensures that every design is optimized for production efficiency, balancing aesthetics with practical manufacturing considerations. Their ability to integrate creativity with technical know-how sets us apart, enabling us to offer fabrics and garments that are not only visually stunning but also commercially viable. Through their efforts, we continue to deliver exceptional value, combining innovation, quality, and style to meet the evolving needs of our customers.
Notes.
(1) Revenue from operations is calculated as revenue from sale of manufactured products and services.
(2) EBITDA is calculated as restated profit before tax, extraordinary and exceptional items plus finance costs, depreciation and amortisation expense minus other income.
(3) EBITDA margin is calculated as a percentage of EBITDA divided by revenue from operations.
(4) PAT represents total profit after tax for the year/period.
(5) PAT margin is calculated as a percentage of PAT divided by revenue from operations.
(6) Return on Equity (ROE%) is calculated as a percentage of PAT divided by average total equity at the end of the year /period, whereas total equity is calculated as average of opening equity share capital and reserves and surplus and closing of equity share capital and reserves and surplus.
Indicator |
March 31, | March 31, | March 31, |
| 2025 | 2024 | 2023 | |
Revenue from Operations (RS in Lakhs) (1) |
15,278.73 | 12,494.14 | 9,918.84 |
- Product Revenue (Z in Lakhs) |
13,943.07 | 10,615.86 | 8,253.19 |
- Service Revenue (Z in Lakhs) |
1,241.01 | 1,802.10 | 1,602.10 |
- Others (Z in Lakhs) |
94.65 | 76.18 | 63.55 |
EBITDA (RS in Lakhs) (2) |
3,006.22 | 2,242.60 | 1,278.83 |
EBITDA Margin (%) (3) |
19.68% | 17.95% | 12.89% |
PAT (RS in Lakhs) (4) |
1,690.47 | 1,130.80 | 559.14 |
PAT Margin (%) (5) |
11.06% | 9.05% | 5.64% |
Return on equity (%) (6) |
40.43% | 41.36% | 30.48% |
Return on capital employed (%) (7) |
33.22% | 32.72% | 25.81% |
Debt-Equity Ratio (times) (8) |
0.76 | 1.06 | 1.28 |
Trade Receivables (days) (9) |
85 | 83 | 95 |
Trade Payables (days) (10) |
77 | 62 | 73 |
Inventory (days) (11) |
137 | 125 | 73 |
Working Capital Cycle (days) (12) |
145 | 146 | 95 |
Our management team is led by Sanjeev Kandhari, the Chairman and Managing Director, who has been associated with our company since its incorporation and has 30 years of experience in the textile manufacturing industry. He oversees the companys overall performance, formulates growth strategies, and provides strategic direction to the senior management team. Amit Kandhari, our Whole-time Director and Chief Financial Officer, has also been with the company since its inception. With three decades of experience in the textile industry, he manages finance, production, and compliance while driving the companys expansion and operational efficiency. Our leadership also includes Devika Arora, the Head of Designing, who has been with us since 2017 and specializes in textile and fashion design, ensuring our collections align with market trends. Sahil Kandhari, the Head of Printing, has been associated with our company since 2020, bringing expertise in digital printing technologies to optimize high-quality fabric production. Harsimran Diwan, the Procurement Head, has been with us since 2016, ensuring the timely sourcing of raw materials at competitive prices, supporting the companys focus on quality and efficiency. Our operations are further strengthened by Kuldeep Singh, the Merchandising Manager, who oversees packing, scheduling, and shipment processes for smooth order fulfilment. Lalit Kesar, our Processing and Finishing Head, rejoined the company in 2023, bringing expertise in dyeing techniques and fabric finishing to ensure adherence to quality standards. Niranjan Singh, the Production Manager, has been with us since 1999, leveraging his 25 years of experience to manage production operations efficiently. Ranjit Kumar, the Production Planner, has been associated with us since 2006, focusing on planning, scheduling, and coordinating production activities to ensure timely deliveries while maintaining quality standards. Together, our diverse and experienced management team plays a crucial role in driving our companys growth, enhancing operational efficiencies, and maintaining our position as a leader in textile manufacturing. Their collective expertise spans design, procurement, production, processing, finance, and logistics, ensuring seamless execution of business strategies while upholding our commitment to innovation, quality, and customer satisfaction.
The scale of our operations and distribution network along with our customers confidence have had a significant impact on our revenues and profitability. Set out below are our key performance indicators for the last three Fiscals are as follows:
Based on the Restated Financial Information:
a) Key financial indicators
Particulars |
Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
Salaries, bonus and other incentives paid |
191.87 | 143.70 | 104.89 |
Designing charges paid to third parties |
12.19 | 10.90 | 10.23 |
Total |
204.06 | 154.60 | 115.12 |
The details of expenses incurred on our design team for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023 is below:
(Z in Lakhs)
Notes:
(1) Digital Printing (Volume) refers to the total amount of Digital Printing products produced using Digital Printing technology.
(2) Jacquard (Volume) refers to the total amount of Jacquard products produced using Jacquard technology.
(3) Others (Volume) refers to the total amount of other products produced using other techniques or technologies mch as dobby, corduroy, etc.
(4) Digital Printing (Average Selling Price) refers to the average price at which Digital Printing products are sold. It is calculated by dividing the revenue earned from Digital Printing products by the volume of Digital Printing products produced.
(5) Jacquard (Average Selling Price) refers to the average price at which Jacquard products are sold. It is calculated by dividing the revenue earned from Jacquard products by the volume of Jacquard products produced.
(6) Others (Average Selling Price) refers to the average price at which other products are sold. It is calculated by dividing the revenue earned from other products by the total volume of other products produced.
(7) Distribution Network refers to the structured system of intermediaries/individuals that facilitate the movement ofproducts or services from us to our customers. No. of dealers/ distributors refers to the total count of dealers or distributors responsible for distributing products from our company to our customers. No. of brokers/ agents refers to the total count of brokers or agents who connect our company with our customers.
Significant factors affecting our Financial Condition and Results of Operations
Our business and results of operations have been affected by a number of important factors that we believe will continue to affect our business and results of operations in the future. These factors include the following:
Raw materials cost
We source raw materials, such as yarns, chemicals, dyes, inks and greige fabrics, etc from our suppliers with whom we have established long-standing relationships in order to ensure the consistent supply of products to our customers. We do not enter into formal arrangements or contracts with certain of our suppliers and instead issue purchase orders to source our materials on an as-needed basis to such suppliers. Our business relies on the procurement of key raw materials, including yarns, greige fabrics, dyes, chemicals, and other essential inputs required for digital printing, jacquard weaving, dobby
| Indicator | Units | March 31, 2025 | March 31, 2024 | March 31, 2023 |
| Digital Printing (Volume) | ||||
| - Fabrics | Metres | 27,95,182 | 13,84,239 | 7,28,365 |
| - Garments (ready-to-stitch womenswear) | Pieces | 3,51,243 | 1,88,795 | 99,561 |
| - Products manufactured | Nos. | 209 | 204 | 187 |
| Jacquard (Volume) | ||||
| - Fabrics | Metres | 5,09,913 | 4,43,791 | 4,14,483 |
| - Garments (ready-to-stitch suits, shawls and stoles) | Pieces | 9,85,195 | 7,51,672 | 5,44,480 |
| - Products manufactured | Nos. | 423 | 389 | 445 |
| Other woven fabrics (Volume) | ||||
| - Fabrics | Metres | 8,29,358 | 12,55,911 | 22,32,962 |
| - Garments (ready-to-stitch womenswear) | Pieces | No garments are manufactured under this segment | ||
| - Products manufactured | Nos. | 726 | 565 | 502 |
| Digital Printing (Average Selling Price) | ||||
| - Fabrics | Rs. per Meter | 143.00 | 172.39 | 146.67 |
| - Garments (ready-to-stitch womenswear) | Rs. per piece | 1,011.35 | 1,151.32 | 1,195.14 |
| Jacquard (Average Selling Price) | ||||
| - Fabrics | Rs. per Meter | 193.66 | 169.63 | 178.48 |
| - Garments (ready-to-stitch suits, shawls and stoles) | Rs. per piece | 416.38 | 462.67 | 431.42 |
| Other woven fabrics (Average Selling Price) | ||||
| - Fabrics | Rs. per Meter | 159.24 | 145.34 | 130.15 |
| - Garments (ready-to-stitch suits, shawls and stoles) | Rs. per piece | No garments are manufactured under this segment | ||
| Distribution Network | ||||
| - No. of dealers/ distributors | Nos. | 154 | 132 | 123 |
| - No. of brokers/ agents | Nos. | 71 | 60 | 56 |
(7) Return on Capital Employed (ROCE%) is calculated as a percentage of EBIT divided by average capital employed at the end of the year /period, whereas average capital employed is calculated as average of opening capital employed and closing capital employed. EBIT is calculated as restated profit before tax plus finance costs minus other income. capital employed is calculated as total equity minus DTA plus DTL, long term borrowings and short-term borrowings.
(8) Debt to Equity ratio is calculated as total borrowings divided by total equity.
(9) Trade Receivables (days) is calculated as average trade receivables divided by revenue from operations multiplied by 365. Average frade receivables are calculated as average of opening trade receivables and closing trade receivables.
(10) Trade Payables (days) is calculated as average trade payables divided by cost of goods sold multiplied by 365. Average frade payables is calculated as average of opening frade payables and closing trade payables.
(11) Inventory (days) is calculated as average inventories divided by cost of goods sold multiplied by 365. Average inventories is calculated as average of opening inventory and closing inventory.
(12) Working capital cycle (days) is calculated inventory days plus trade receivables days minus frade payables days.
b) Key operational indicators (only for our product revenue segment)
fabric production, embroidery, dyeing, and garment finishing. Any fluctuations in the prices, availability, or quality of these raw materials can significantly affect our cost structure and margins. The prices of yarns, greige fabrics, and chemicals are subject to market fluctuations driven by global demand-supply dynamics, raw material shortages, production disruptions, and commodity price changes. Additionally, since some of our raw materials, specialty dyes, and chemicals are either imported or linked to global commodity prices, they are vulnerable to currency exchange rate fluctuations, which can result in higher procurement costs and affect our cost of production and pricing competitiveness. The availability and pricing of raw materials also depend on our supplier arrangements, procurement strategies, and payment terms. As some of our key raw material suppliers are related parties, any changes in supplier terms, pricing revisions, or supply disruptions could impact our operational efficiency and working capital requirements. Additionally, the textile industry is subject to regulatory and environmental compliance, particularly in the use of dyes, chemicals, and synthetic materials. Stricter regulations may lead to higher compliance costs and require investment in alternative solutions, affecting our raw material expenses. Seasonality and demand fluctuations in the textile industry also impact bulk raw material procurement strategies, with increased demand during peak seasons leading to potential price hikes by suppliers. Furthermore, supply chain disruptions, including transportation delays, fuel cost hikes, and import-export restrictions, can contribute to rising procurement costs and affect our ability to maintain stable pricing. During Fiscals 2025, 2024 and 2023, our cost of materials consumed was RS11,184.75 Lakhs, RS10,693.21 Lakhs and RS7,756.74 Lakhs, constituting 73.20%, 85.59% and 78.20% respectively, of our total revenue from operations. Our major raw materials are sourced domestically from Punjab, Gujarat and Tamil Nadu. Our cost of goods sold is impacted by the amount of raw materials procured and the price at which we procure such raw materials and may fluctuate from time to time. The availability and price of our raw materials may be subject to a number of factors beyond our control, including macro and micro economic factors, seasonal factors, environmental factors and changes in Government policies and regulations.
Operational efficiencies and working capital management
Our supply chain network comprises a diverse network of suppliers, contract manufacturers, brokers, agents, and distributors that play a crucial role in the seamless flow of raw materials, fabrics, and finished products. Given the high volume of raw materials and finished goods that move through this network, our supply chain is highly sensitive to changes or disruptions in procurement, production, or distribution processes. While we have established strong relationships with our partners, certain factors remain outside of our control, such as raw material availability, delays in transportation, regulatory changes, and geopolitical risks, which could impact our operations and financial performance.
Additionally, we are heavily reliant on logistics providers for the timely and efficient delivery of both inventory to our warehouses and customer orders to various retail channels and markets. Any disruption in transportation or supply chain inefficiencies could lead to delays in fulfilling orders, impacting customer satisfaction and profitability. Furthermore, our inventory management and operational margins are directly influenced by supply chain performance. Significant changes in the availability of raw materials, transportation costs, or distribution channels could impact our production schedules and profit margins. Therefore, maintaining a resilient and efficient supply chain is critical to ensuring business continuity, optimizing costs, and meeting customer expectations across our markets.
A significant proportion of our operating costs is attributable to our cost of raw materials consumed, which include cost of raw materials and direct expenses. Cost of raw materials consumed, which include cost of raw materials and accessories and packing materials, comprise costs related to the raw materials used to manufacture our products, which for the Fiscals 2025, 2024 and 2023 amounted to RS11,184.75 Lakhs, RS10,693.21 Lakhs and RS7,756.74 Lakhs, constituting 73.20%, 85.59% and 78.20% respectively, of our revenue from operations.
Working capital management remains critical towards our profitability and our ability to successfully manage our working capital depends on our ability to manage payments, monitor inventory and manage our inventory days, trade receivables days and trade payables. For the Fiscals 2025, 2024 and 2023, we had inventory of RS4,020.45 lakhs, RS3,120.88 lakhs and RS1,551.91 lakhs, respectively, trade payables of RS2,257.03 lakhs, RS1,542.13 lakhs and RS1,555.76 lakhs, respectively, and trade receivables of RS3,545.70 lakhs, RS2,836.78 lakhs and RS2,569.16 lakhs, respectively. Successfully managing our inventory will help us effectively prevent shortfalls and deal with unsold stock, while reducing our trade receivables days will improve our cash flow cycle and enable us to redeploy working capital in an efficient manner. For the Fiscals 2025, 2024 and 2023, we had inventory days of 137 days, 125 days and 73 days, respectively, trade receivables days of 85 days, 83 days and 95 days, respectively, and trade payables days of 77 days, 62 days and 73 days, respectively.
Seasonality
The demand for our products, including ready-to-stitch garments (womenswear), shawls, stoles, scarves, and fabrics, tends to fluctuate based on seasonal trends, festivals, and wedding seasons. Typically, there is higher demand during quarter 3 and quarter 4 due to festive periods and peak wedding seasons, particularly in Tier 3/4 cities, semi-urban, and rural markets, where traditional wear is more prominent. Additionally, export demand may vary based on seasonal preferences in
international markets. This seasonality can lead to variations in sales volumes, inventory levels, and cash flows across different quarters.
During peak seasons, we experience an increase in orders, which requires higher production and inventory levels to meet customer demand. Conversely, off-peak periods may result in lower sales volumes, impacting cash flow and profitability if inventory levels are not well-managed. Seasonality also affects operational planning, as we need to ensure that production schedules, raw material procurement, and supply chain operations align with anticipated demand fluctuations. Any unexpected changes in seasonal trends or adverse weather conditions could further impact our sales performance and financial results. As a result, managing the seasonal nature of demand effectively is critical to maintaining consistent revenue streams and profitability throughout the year.
Consumer spending, market trends and the Indian economy
Urbanization and rising middle-class fuel revenue growth in the digital textile printing industry. An emerging middle class with higher discretionary spending power and increased appetite for consumer goods is fueling the overall textile industry in the domestic market. Growth in domestic textile market has a high degree of correlation with the rise of affluent middle class centered in urban markets. Urban population increased from 278 million to 373 million during the past decade (2001 - 11) and by 2030, the share of urban population is estimated to grow to about 41.7% of the population of India. Increasing urbanization indirectly increases disposable income and access to fashionable clothing. This trend coupled with high presence of young working population, will drive demand for digitally printed fabric. Nearly 61% of Indias population was in the working age group i.e. 16-59 in 2011 which is expected to rise to 65.1 percent in 2036 with total population growing from 121.1 crores to 151.8 crores during the period 2011-2036. The population in this age group is more aspirational and aware. Rising working age population coupled with growing literacy rate in the country is leading to newer and better-quality jobs and higher remuneration, which in turn is leading to higher spending. The difference in disposable income has been improving in favour of rural consumers due to higher employment by means of government sponsored job outreach programs like MGNREGA. Consequently, rural consumer base has increased. Rural income growth has been supporting the growth of unbranded textile products (Source: D&BReport). We intend to capitalize on the growing industry opportunity and leverage our position in the industry, to continue to grow our business. Furthermore, the market is characterized by changing customer preferences. Our results of operations are dependent on our ability to anticipate, gauge and respond to such changes in customer preferences and design new products or modify our existing products in line with changes in fashion trends as well as customer demands and preferences.
The success of our business depends upon our ability to anticipate and forecast customer demand and trends. We plan our inventory and commence our design process prior to launch and estimate our sales based on the forecasted demand for the forthcoming period. We have inventory manufactured or procured in advance and stored at our warehouses ahead of each upcoming season. Moreover, our success also depends to a significant extent on consumer confidence and spending, which is influenced by general economic conditions, discretionary income levels and our ability to respond to market trends. Our results of operations could be impacted by any of these factors and may decline during recessionary periods or in other periods where one or more macro-economic factors or potential macro-economic factors negatively affect consumer confidence and spending.
Competition
We face competition in our main business lines. Since our business is competitive, some of our key competitors that have diversified businesses, may have greater resources and offer a broader range of products than ours. Such competitors may also have longer operating histories, greater financial, technical, product development and marketing resources and greater brand recognition. Such competitors could use these resources to market or develop their products that are more effective or less costly than our products or that could render any or all of our products obsolete. Competitive pressures could also affect the pricing of our products. Greater competition for particular products could have a negative impact on pricing. Our success is dependent upon our ability to compete against such competitors. We will continue to seek to distinguish our offerings by providing quality products at competitive prices.
Capacity utilization
We seek to capitalize on the growth opportunities in the fashion and textile industry considering our current scale of operations, network of distributors, number of customers that we cater to and spearheaded by an experienced management team. As on March 31, 2025, our facilities at Amritsar have a production capacity of 158.77 lakhs MPA. We propose to increase our scale of operations in digital printing to cater to the increase in demand. The actual production and capacity utilization of our facilities at Amritsar for Fiscal 2025, Fiscal 2024 and Fiscal 2023, were as follows:
We have installed additional digital printing equipment, allowing us to scale up production and cater to diverse customer needs, including customized and short-run orders for branded and non-branded segments. We have installed HM2700B- TK64-A1 Digital Printing Machine by Hanglory Group, Shenzhen, China. The HM2700B-TK64-A1 Digital Printing Machine is a solution designed to meet the evolving demands of the textile and fashion industries. This advanced machine delivers high-resolution printing with sharp, detailed patterns and vibrant colours, ensuring exceptional accuracy and quality. Optimized for both small and large production runs, it offers quick turnaround times, making it ideal for fast fashion and on-demand textile solutions. The machine is highly versatile, supporting a wide range of fabrics, including cotton, polyester, viscose, and blends, enabling diverse applications. Its customization capabilities allow for the creation of unique and detailed designs tailored to specific customer requirements. Additionally, the HM2700B-TK64-A1 incorporates ecofriendly features, minimizing waste and promoting energy-efficient operations. This innovative technology will enhance our production capabilities and reflect our commitment to delivering superior textile solutions while aligning with sustainability goals. The machinery, once fully operational, is expected to increase our digital printing capacity to 140.00 lakhs MPA. For further details, please see “Our Business - Our Manufacturing capabilities” on page 217.
Relationships with customers
We do not enter into long-term contracts with any of our customers. The sales to our customers are basis purchase orders. A substantial portion of our revenue is derived from repeat orders and long-term partnerships with a diverse customer base that includes wholesalers, retailers, apparel brands, and institutional buyers. Maintaining strong customer relationships is crucial for sustaining our order flow, cash flow, and overall profitability. Any changes in customer preferences, purchasing patterns, or financial health could directly affect our sales volumes and profitability. Additionally, our ability to offer customized products, competitive pricing, and timely delivery plays a vital role in retaining existing customers and attracting new ones. As our customers operate in highly dynamic and competitive markets, it is essential for us to continuously innovate and adapt to their evolving demands to remain a preferred supplier. A disruption in our key customer relationships, whether due to operational issues, pricing pressure, or external market conditions, could significantly impact our financial performance. Therefore, our financial condition and results of operations are closely linked to how effectively we manage and nurture our customer relationships to ensure consistent business growth and market presence. We also have an in-house sales team which interacts regularly with our customers in order to understand their evolving requirement. Additionally, our dealer - based sales and distribution network focuses on order servicing and collections. However, failure to meet the expectations of the client can lead to cancellation of current and future orders.
Government policies
The Indian government is actively promoting the textile sector through initiatives aimed at establishing textile hubs across the country. This governmental support enhances infrastructure and investment opportunities, encouraging more businesses to transition to digital textile printing technologies. Various policies and initiatives, such as providing subsidies and incentives to manufacturers and promoting skill development programs are expected to further drive the adoption of digital textile printing technology within the Indian textile industry. Amended Technology Upgradation Fund Scheme (ATUFS) is aimed at technologically upgrading the machinery used in textile industry. Upgrading machinery used in textile industry improves quality of products and reduces the manufacturing cost, which will make Indian textile industry more competitive in the global arena. With the aim of ‘Make in India and ‘Zero Defect and Zero Effect in manufacturing, the government provides credit linked capital investment subsidy. This scheme would facilitate augmenting of investment, productivity, quality, employment, exports and import substitution in the textile industry. It will also indirectly promote investment in textile machinery manufacturing. Units that meet the lending norms of financial institutions and the schemes benchmark criteria are eligible. Subsidy rates depend on the type of unit and capital investment with the budget allocation INR 17,822 Crores for FY 2023. The PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme is a government initiative to create modern textile value chain in India. This scheme is aimed at making the sector globally competitive by building best-in-class manufacturing infrastructure, upgradation of technology, fostering innovation, enhancing skills and reducing costs in the sector. The Government of India approved 7 PM MITRA parks for the textile industry. These parks will provide 1,00,000 jobs directly and 2,00,000 jobs indirectly, in addition to attracting an investment of INR 10,000 Crore. The Production Linked Incentive (PLI) scheme aims to boost production of technical textiles, manmade fibres (MMF) and MMF
| Fiscal 2025 (MPA) | Capacity
utilization (%) |
Fiscal
2024 (MPA) |
Capacity
utilization (%) |
Fiscal
2023 (MPA) |
Capacity
utilization (%) |
|
Digital printing |
54,28,505 | 58.90% | 33,16,502 | 76.19% | 7,93,906 | 55.73% |
Jacquards |
34,83,749 | 79.12% | 34,32,578 | 77.96% | 18,92,240 | 52.32% |
Others such as dobby and corduroy |
20,18,997 | 89.42% | 20,16,201 | 89.29% | 16,41,264 | 53.84% |
Total |
1,09,31,251 | 68.85% | 87,65,281 | 79.58% | 43,27,410 | 53.49% |
*As certified by Er. Rohit Kapoor, Chartered Engineer pursuant to certificate dated June 20, 2025. |
||||||
apparel. This is at a budget of INR 106.83 billion, for the timeline of FY 2025- 26 to FY 2029-30. Companies that meet the performance and investment targets one year early can become eligible one year earlier. The scheme focuses on technical textiles, MMF Fabrics, and MMF apparels. It aims to create 7,50,000 jobs, achieve a turnover of INR 3 Lakh Crore and attract an investment of INR 19,000 Crore. Government initiatives, coupled with PLI schemes offering globally cost- competitive products have made India an important country exporting digital printed textile to Middle East and African countries. Supportive government initiatives such as PM-Mega Integrated Textiles and Apparel Park (PM-MITRA), Textile Cluster Development Scheme, Integrated Processing Development Scheme, PLI, amongst others are helping in improving the production technology, which is driving the overall production volume in the sector. (Source: D&B Report)
Critical Accounting Policies and Significant Judgments and Estimates
The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain. We consider an accounting policy to be a critical estimate if: (1) we must make assumptions that were uncertain when the judgment was made, and (2) changes in the estimate assumptions, or selection of a different estimate methodology, could have a significant impact on our financial position and the results that we report in our Restated Financial Information. While we believe that our estimates, assumptions, and judgments are reasonable, they are based on information available when the estimate was made.
Further, our material accounting policies as per Restated Financial Information, are as follows:
a) Basis of preparation of restated financial information
The Restated Financial Information of the company comprise of Restated Statement of Assets and Liabilities as March 31, 2025, March 31, 2024 and March 31, 2023, the related Restated Statement of Profit and Loss, Restated Statement of Changes in Equity and Restated Statement of Cash Flows for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023, and the material accounting policies and explanatory notes (collectively, the “Restated Financial Information”), and have been prepared by the management specifically for inclusion in the Draft Red Herring Prospectus (“DRHP”) to be filed by the Company with SME Platform of National Stock Exchange of India Limited (“NSE Emerge”) in connection with proposed Initial public Offering (“IPO”).
The Restated Financial Information have been prepared to comply in all material aspects with the requirements of:
(i) Section 26 of Part I of Chapter III of the Companies Act, 2013 (“the Act”);
(ii) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (“SEBI ICDR Regulations”); and
(iii) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India (“ICAI”), as amended (the “Guidance Note”).
The Restated Financial Information of the company have been prepared to comply in all material respects with the AS notified under the Companies (Accounting Standards) Rules, 2021 (as amended from time to time), presentation requirements of Division I of Schedule III to the Companies Act, 2013, (AS compliant Schedule III), as applicable to the financial statements and other relevant provisions of the Companies Act.
The Restated Financial Information have been compiled by the Management from Audited Financial Statements of the Company audited by us for the year ended March 31, 2025, March 31, 2024 and March 31, 2023 which have been prepared by the Company in accordance with Accounting Standards, as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules, 2021, as amended and other accounting principles generally accepted in India, along with the presentation requirements of Division I of Schedule III to the Companies Act, 2013 (AS compliant Schedule III), as applicable, which have been approved by the Board of Directors at their meeting held on September 04, 2024, September 02, 2023 and September 02, 2022 respectively.
The Restated Financial Information have been prepared to contain information/disclosures and incorporating adjustments set out below in accordance with the SEBI ICDR Regulations:
i. Adjustments to the profits or losses of the earlier years for the changes in accounting policies if any to reflect what the profits or losses of those years would have been if a uniform accounting policy was followed in each of these years and of material errors, if any;
ii. Adjustments for reclassification/regroupings of the corresponding items of income, expenses, assets and liabilities retrospectively in the year ended March 31, 2025, March 31, 2024, March 31, 2023 and March 31, 2022, in order to bring them in line with the groupings and the requirements of the SEBI ICDR Regulations, if any; and
iii. The resultant impact of tax due to the aforesaid adjustments, if any.
b) Use of estimates
The preparation of restated financial information in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
c) Property, Plant and Equipment
Tangible assets are stated at cost, less accumulated depreciation and impairment (if any). Cost consists of acquisition cost comprising purchase price (excluding rebates and discounts) and direct cost incurred to make the asset ready to use. All assets costing Rs. 5,000 or below are fully depreciated in the year of addition.
Subsequent expenditure related to an item of property plant and equipment is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
Gains or losses arising from derecognition of property plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
d) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the statement of profit and loss in the year in which the expenditure is incurred.
Intangible assets are amortized on a straight-line basis over the estimated useful economic life. All intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.
The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items & Changes in Accounting Policies.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
e) Depreciation and Amortization
Depreciation on fixed assets is provided on written down value method at the rate arrived at based on the useful lives as estimated by the management which is in accordance with Schedule II to the Companies Act,2013.
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation method is revised to reflect the changed pattern.
f) Government grants and subsidies
Government grants and subsidies relating to revenue are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants / subsidy will be received.
g) Leases
Where the Company is lessee:
Company has not taken any asset on leasehold basis
Where the company is lessor
Company has not given any asset on leasehold basis.
h) Borrowing costs
Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
i) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments/deposits with an original maturity of three months or less.
j) Investments
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.
Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
k) Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Companys cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.
After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the assets or cashgenerating units recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
l) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
The company generally follows the mercantile system of accounting and recognizes Income & Expenditure on accrual basis.
Revenue is recognised to the extent that it is possible that, the economic benefits will flow to the company and the revenue can be reliably estimated and collectability is reasonably assured.
Revenue from sale of goods and services are recognised when control of the products being sold is transferred to our customer and then there are no longer any unfulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.
Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as goods and service tax etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable
m) Foreign currency translation Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
Exchange differences
Exchange differences arising on settlement / conversion of foreign currency monetary assets and liabilities are recognized as income or expense in the Statement of Profit and Loss in the period in which they arise.
n) Retirement and other employee benefits
Employee benefits include provident fund, gratuity and compensated absences.
Defined contribution plans
Retirement benefit in the form of provident fund is a defined contribution plan. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expenditure, when an employee renders the related service.
Defined benefit plans
For defined benefit plan in the form of gratuity, the cost of providing benefits is determined based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.
While Company maintains systems and procedures to monitor and encourage client compliance, it may not have direct control over the actions and decisions made by the clients. Therefore, the possibility of unforeseen contingent liabilities arising from client non-compliance cannot be completely eliminated.
o) Segment reporting
The Companys business activity primarily falls within a single business segment. The Company mainly operates Indian domicile. Hence segment information as per AS 17 is not required to be disclosed.
p) Income taxes and Deferred Taxes
Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rate s and the tax laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.
q) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
r) Provisions and contingent liabilities
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
Key Components of Income and Expenses
We report our income and expenditure in the following manner:
Total Income
Our total income comprises of revenue from operations and other income.
Revenue from operations: consists revenue generated from the sale of our products, sale of services and sale of packaging materials, scrap, etc. Our revenue from sale of products consists revenue from production and sale of fabrics, including digitally printed, jacquard, dobby, corduroy, and other customized fabrics tailored for various applications and revenue from ready-to-stitch garments (womenswear) such as suits and co-ord sets and accessories like shawls and stoles designed to meet customer preferences. Our revenue from sale of services is earned from fabric processing services, including dyeing, digital printing, and fabric finishing, performed for third-party clients.
Other income: includes (i) recurring income which comprises of interest received on security deposits, fixed deposits, and parties, foreign exchange gain fluctuations, rent received from leasing part of our properties; and (ii) non-recurring income which primarily comprises of profit on sale of fixed assets, and export incentives primarily received under the Remission of Duties or Taxes on Export Products (RoDTEP) scheme and Duty Drawback Scheme, etc.
Total Expenses
Our total expenses comprise of cost of material consumed; changes in inventories of finished goods and work-in-process; employee benefits expense; finance costs; depreciation and amortisation expense; and other expenses.
Cost of material consumed: primarily consists of purchase of raw materials, such as, yarns, chemicals, dyes, inks and greige fabrics and related materials; (ii) direct expenses such as wages to labours, accessories consumed, clipping & mending charges, cord cutting expenses, cutting & twisting, diesel, fuel, oil & lubricants consumed, dyeing & finishing, electric equipment consumed, electricity, embroidery, firefighting exp, custom duty, duty drawback, freight, fabrication, pet coke consumed, custom, clearing & forwarding, designing, sorting & grading, testing charges, warping expenses, packing material consumed; and (iii) changes in inventories of raw materials represents the net increase or decrease in raw materials at the beginning of the year and end of the year.
Changes in inventories: represents the net increase or decrease in finished goods at the beginning of the year and end of the year.
Employee benefits expenses: comprises of staff welfare expense, contribution to statutory fund, salaries to directors, salaries to office staffs, annual leave with wages, bonus, gratuity account and incentives.
| Revenue
from operations |
% of
Revenue from operations |
Revenue
from operations |
% of
Revenue from operations |
Revenue
from operations |
% of
Revenue from operations |
|
Domestic |
14,613.91 | 95.65% | 12,494.14 | 100.00% | 9,918.84 | 100.00% |
Exports |
664.82 | 4.35% | - |
- |
- |
- |
Total |
15,278.73 | 100.00% | 12,494.14 | 100.00% | 9,918.84 | 100.00% |
*As certified by M/s. S G U R & Co., Chartered Accountants, by way of their certificate dated July 15, 2025. |
||||||
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Segment Information
There is no reportable segment identified on the basis of which segment information is required to be disclosed. Information about Revenue Split by Geographical Area
Fiscal 2025 compared to Fiscal 2024 Total Income
Our total income increased by 22.54% to RS15,321.50 lakhs for Fiscal 2025 from RS12,503.32 lakhs for Fiscal 2024 based on Restated Financial Information. This increase was primarily due to significant increase in our revenue from operations which was primarily driven by revenue from production and sale of fabrics, including digitally printed, jacquard, dobby, corduroy, and other customized fabrics tailored for various applications and revenue from ready -to-stitch garments (womenswear) such as suits and co-ord sets, and accessories like shawls and stoles designed to meet customer preferences and our revenue from sale of services is earned from processing services, including dyeing, digital printing, and fabric finishing, performed for third-party clients, sale from packaging materials, scrap, etc. and significant decrease in our other income primarily due to significant increase in export incentives primarily received under the Remission of Duties or Taxes on Export Products (RoDTEP) scheme and Duty Drawback Scheme. For further details, please see, Fiscal 2025 compared to Fiscal 2024 - Total Income - Revenue from operations” and “- Fiscal 2025 compared to Fiscal 2024 - Total Income - Other income” below.
Revenue from operations: Our revenue from operations increased by 22.29% to RS15,278.73 lakhs for Fiscal 2025 from RS12,494.14 lakhs for Fiscal 2024 based on Restated Financial Information, primarily due to the following reasons:
Particulars |
(RS in Lakhs) | (% of
total income) |
(RS in Lakhs) | (% of
total income) |
(RS in Lakhs) | (% of
total income) |
Income |
||||||
Revenue from Operations |
15,278.73 | 99.72% | 12,494.14 | 99.93% | 9,918.84 | 99.84% |
Other income |
42.77 | 0.28% | 9.18 | 0.07% | 15.56 | 0.16% |
Total Income |
15,321.50 | 100.00% | 12,503.32 | 100.00% | 9,934.40 | 100.00% |
Expenses |
||||||
Cost of material consumed |
11,184.75 | 73.00% | 10,693.21 | 85.52% | 7,756.74 | 78.08% |
Changes in inventories of finished goods and work-in progress |
(442.59) | (2.89%) | (1,561.31) | (12.49)
% |
24.10 | 0.24% |
Employees Benefit Expenses |
622.73 | 4.06% | 548.71 | 4.39% | 469.62 | 4.73% |
Finance Costs |
435.20 | 2.84% | 392.93 | 3.14% | 282.11 | 2.84% |
Depreciation and Amortization |
422.55 | 2.76% | 338.68 | 2.71% | 192.08 | 1.93% |
Other expenses |
907.62 | 5..92% | 570.93 | 4.57% | 389.55 | 3.92% |
Total Expenses |
13,130.26 | 85.70% | 10,983.15 | 87.84% | 9,114.20 | 91.74% |
Profit /(Loss) before tax and exceptional items |
2,191.24 | 14.30% | 1,520.17 | 12.16% | 820.20 | 8.26% |
Exceptional Items |
- |
- |
- |
- |
- |
- |
Restated Profit /(Loss) before tax |
2,191.24 | 14.30% | 1,520.17 | 12.16% | 820.20 | 8.26% |
Tax Expenses |
500.77 | 3.27% | 389.37 | 3.11% | 261.05 | 2.63% |
Restated Profit /(Loss) for the year / period |
1,690.47 | 11.03% | 1,130.80 | 9.04% | 559.14 | 5.63% |
Finance costs: consists of interest expenses and bank charges.
Depreciation and Amortization Expenses: includes depreciation expenses on property plant and equipment and amortisation of intangible assets.
Other Expenses: comprises majorly rent expenses, electricity expenses, computer rentals, software charges, office expenses and repairs and maintenance, advertisement expenses, travelling expenses, etc.
Our Results of Operations
The following table sets forth select financial data derived from our restated statement of profit and loss for the Fiscals 2025, 2024 and 2023 and we have expressed the components of select financial data as a percentage of total income for such years:
• Sale of products, i.e., sale of fabrics, including digitally printed, jacquard, dobby, corduroy, and other customized fabrics and revenue from ready-to-stitch garments (womenswear) such as suits and co-ord sets, and accessories like shawls and stoles increased by 31.34% to RS13,943.07 lakhs in Fiscal 2025 from RS10,615.86 lakhs in Fiscal 2024. This was primarily due to:
> Higher production volumes particularly in digital printing segment, expanded product offerings, and growing customer demand across domestic markets. Our focus on digitally printed fabrics along with ready-to-stitch garments like suits, shawls, and stoles, has contributed significantly to the rise in revenue. We manufactured 27.95 lakhs meters of fabrics in digital printing segment and 3.51 lakhs pcs of ready-to- stitch garments and accessories in digital printing segment during Fiscal 2025 as compared to 13.84 lakhs meters of fabrics in digital printing segment and 1.89 lakhs pcs of ready-to-stitch garments and accessories in digital printing segment during Fiscal 2024. For details please see, “Basis for Offer Price - Key operational indicators (Only for our product revenue segment) ” on page 131. This strategic shift from the traditional manufacturing fabric segment to higher-value digital printing fabrics and garments, has led to an overall increase in revenue and improved profitability; and
> Our ability to cater to both branded and non-branded segments, including customized products for apparel brands and its own branded offerings, has allowed it to capture a wider market share and increase order volumes. Additionally, our expansion into Tier 3/4 cities and rural areas through its own brands has further contributed to higher sales volumes in previously untapped markets. Our sales from our own brands contributed 45.57%, sales from brand enabling segment for apparel brands contributed 30.52%, and sales from non-branded segment contributed to 15.17% in Fiscal 2025 as compared with sales from our own brands contributed 45.58%, sales from brand enabling segment for apparel brands contributed 20.63%, and sales from non-branded segment contributed 18.75% in Fiscal 2023. For details please see, “Our Business - Our Revenue Mix" on page 208. This strategic shift from the non-branded fabric segment to higher-value branded and brand enabler segments, has led to an overall increase in revenue and improved profitability.
• Sale of services earned from processing services, including dyeing, digital printing, and fabric finishing, performed for third-party clients decreased by 31.14% to RS1,241.01 lakhs in Fiscal 2025 from RS1,802.10 lakhs in Fiscal 2024 is primarily attributable to a strategic shift in focus toward higher-margin product sales and increased in-house utilization of production capacities. With the expansion of the Company s digital printing and weaving infrastructure during Fiscal 2024, a larger portion of these facilities was dedicated to fulfilling internal orders for own branded and brand-enabler product lines, thereby reducing the availability of capacity for external third-party service assignments. Additionally, the Company prioritized product-based revenue, which offers better control over pricing and customer relationships, compared to processing services that generally operate on narrower margins; and
• Sale of other packaging materials, scrap, etc. increased by 24.25% to RS94.65 lakhs in Fiscal 2025 from RS76.18 lakhs in Fiscal 2024.
Other income: Our other income was increased by 365.73% to RS42.77 lakhs for Fiscal 2025 from RS9.18 lakhs for Fiscal 2024 based on Restated Financial Information, primarily due to:
• increase in interest income from security deposits for RS4.18 lakhs in Fiscal 2025 as compared to interest income from security deposits for RS2.26 lakhs in Fiscal 2024;
• decrease in interest income from fixed deposits for NIL in Fiscal 2025 as compared to RS0.27 lakhs in Fiscal 2024;
• decrease in interest income from parties on delayed payment for RS0.60 lakhs in Fiscal 2025 as compared to RS2.98 lakhs in Fiscal 2024;
• increase in exchange rate difference for RS9.44 lakhs in Fiscal 2025 as compared to NIL in Fiscal 2024;
• increase in export incentives primarily received under the Remission of Duties or Taxes on Export Products (RoDTEP) scheme and Duty Drawback Scheme for RS24.88 lakhs in Fiscal 2025 as compared to NIL in Fiscal 2024.
Total Expenses
Cost of material consumed: The cost of material consumed increased by 4.60% to RS11,184.75 lakhs in Fiscal 2025 from RS10,693.21 lakhs Fiscal 2024 based on Restated Financial Information. The increase was primarily due to the following reasons:
• increase in purchase of raw materials for RS6,955.99 lakhs in Fiscal 2025 as compared to RS6,297.71 lakhs in Fiscal 2024 due to the rise in production volumes driven by higher customer demand, new product launches, and our expanded manufacturing capabilities. As we have increased our focus on value-added fabrics, such as digitally printed fabrics, the requirement for greige fabrics, chemicals, dyes, and accessories has grown significantly. Our strategy to expand our ready-to-stitch garment segment, including suits, co-ord sets, shawls, stoles, and scarves, has also contributed to a higher consumption of raw materials. Additionally, increased sourcing of specialty yarns, chemicals, and fabrics to meet customized customer requirements has resulted in a higher procurement of raw materials. Moreover, as we have entered new markets and strengthened our distribution channels, there has been an uptick in orders, requiring the procurement of larger quantities of raw materials to support higher production targets. The increased emphasis on maintaining product quality and expanding product offerings has also led to purchasing premium yarns, sustainable fabrics, and eco-friendly dyes;
• increase in direct expenses cost such as wages to labours, accessories consumed, clipping & mending charges, cord cutting expenses, cutting & twisting, diesel, fuel, oil & lubricants consumed, dyeing & finishing, electric equipment consumed, electricity, embroidery, firefighting exp, custom duty, duty drawback, freight, fabrication, pet coke consumed, custom, clearing & forwarding, designing, sorting & grading, testing charges, warping expenses, packing material consumed for RS4,686.55 lakhs in Fiscal 2025 from RS4,393.61 lakhs in Fiscal 2024 primarily due to the growth in production volumes, higher raw material usage, and expansion of manufacturing activities during the year. The increase reflects our enhanced capacity utilization, introduction of new products, and greater focus on value- added processes such as digital printing, jacquard weaving, and embroidery, which require more labour, power, and consumables; and
• changes in inventories of raw materials at the beginning of the year and at the end of the year amounted to RS (457.79) lakhs in Fiscal 2025 from RS1.89 lakhs in Fiscal 2024.
Changes in inventories: The changes in inventories of finished goods amounted to RS (442.59) lakhs in the Fiscal 2025 in comparison to RS (1,561.31) lakhs in Fiscal 2024 based on Restated Financial Information. This was primarily due to increase in closing stock of finished goods in Fiscal 2025 as compared to Fiscal 2024 reflecting our expanded production capacity, diversification of product offerings, and strategic approach to managing inventory to meet anticipated future demand. The increase in finished goods stock is primarily driven by our production of fabrics such as digitally printed fabrics, jacquard fabrics, dobby fabrics, corduroy fabrics, and ready-to-stitch garments like suits, co-ord sets, shawls, and stoles, aimed at fulfilling bulk orders and seasonal customer demand. The rise in closing stock levels is also attributed to new product development efforts and our preparation for peak sales periods, such as festive seasons and wedding seasons, where demand is typically higher. Additionally, our expansion into new markets, particularly in Tier 3/4 cities and rural areas, has led to increased production, resulting in a higher stock of finished goods to ensure timely fulfilment of new and repeat orders. Another contributing factor to the increase in finished goods stock is our focus on maintaining a broader product mix to cater to customer preferences across different regions and end-use applications. By holding adequate stock levels, we are better positioned to meet unexpected spikes in demand, ensure faster order fulfilment, and minimize the risk of supply chain disruptions.
Employee benefits expenses: The employee benefits expense increased by 13.49% to RS622.73 lakhs for the Fiscal 2025 from RS548.71 lakhs for the Fiscal 2024 based on Restated Financial Information, primarily due to:
• increase in salaries to office staff to RS187.68 lakhs for the Fiscal 2025 from RS162.17 lakhs for the Fiscal 2024;
• increase in bonus paid to RS88.57 lakhs for the Fiscal 2025 from RS77.43 lakhs for the Fiscal 2024;
• increase in incentive paid to RS25.35 lakhs for the Fiscal 2025 from Nil for the Fiscal 2024; and
• increase in annual leave with wages paid to our employees to RS58.92 lakhs in Fiscal 2025 from RS51.17 lakhs in
Fiscal 2024.
Finance costs: The finance costs increased by 10.76% to RS435.20 lakhs for the Fiscal 2025 from RS392.93 lakhs for the Fiscal 2024 based on Restated Financial Information, primarily due:
• increase in interest expense on borrowings from banks to RS283.44 lakhs in Fiscal 2025 from RS224.98 lakhs in Fiscal 2024 consequent to increase in our total borrowings from banks to RS3,291.05 lakhs as of March 31, 2025 from RS2,672.74 lakhs as of March 31, 2024;
• increase in interest expense on unsecured borrowings from related parties to RS 118.53 lakhs in Fiscal 2025 from RS158.86 lakhs in Fiscal 2024; and
• increase in other borrowing costs, comprising of bank charges and loan processing fees to RS33.24 lakhs in Fiscal 2025 from RS9.09 lakhs in Fiscal 2024.
Depreciation and Amortization Expenses: The depreciation and amortization expenses increased by 24.76% to RS422.55 lakhs for the Fiscal 2025 from RS338.68 lakhs for the Fiscal 2024 based on Restated Financial Information, primarily due to increase in depreciation on property, plant and equipment to RS422.55 lakhs for the Fiscal 2025 from RS338.62 lakhs for the Fiscal 2024 due to additions and disposals in property, plant and equipment for RS955.86 lakhs (net) during the Fiscal 2025.
Other Expenses: The other expenses increased by 58.97% to RS907.62 lakhs for the Fiscal 2025 from RS570.93 lakhs for the Fiscal 2024 based on Restated Financial Information, primarily due to:
• increase in rent to RS172.40 lakhs for the Fiscal 2025 from RS55.57 lakhs for the Fiscal 2024, primarily attributable to the rent payable towards the three warehouses and plant machineries taken on lease;
• increase in conveyance allowance, vehicle running and travelling expenses to RS38.38 lakhs for the Fiscal 2025 from RS29.03 lakhs for the Fiscal 2024, primarily attributable to sales, procurement, operational oversight, and supply chain management and are necessary to support our business operations, customer engagement, and logistics processes;
• increase in fees & taxation, property tax and pollution expenses to RS20.15 lakhs for the Fiscal 2025 from RS12.74 lakhs for the Fiscal 2024, primarily attributable to the government levies, statutory fees, professional fees for regulatory filings, business licenses, and renewal charges, ownership and use of land, buildings, and other real estate assets such as manufacturing facilities, warehouses, corporate offices, and sales outlets and compliance with environmental laws and pollution control norms mandated by government bodies;
• increase in repairs and maintenance to RS85.42 lakhs for the Fiscal 2025 from RS57.17 lakhs for the Fiscal 2024, primarily attributable to upkeep and smooth functioning of our manufacturing facilities, machinery, equipment, warehouses, and office premises;
• increase in security agency services to RS41.60 lakhs for the Fiscal 2025 from RS26.69 lakhs for the Fiscal 2024, primarily attributable to the cost of hiring professional security personnel from third-party security agencies to provide round-the-clock surveillance and access control at key locations, including manufacturing units, warehouses, corporate offices;
• increase in brokerage to RS191.96 lakhs for the Fiscal 2025 from RS136.57 lakhs for the Fiscal 2024, primarily attributable to commission payments to our brokers/agents who facilitate business relationships with retailers, wholesalers, apparel brands, institutional buyers, and other clients, particularly in semi-urban and rural markets for expanding market reach;
• increase in rebate, discount and rate difference of RS234.56 lakhs for the Fiscal 2025 from RS197.83 lakhs for the Fiscal 2024, primarily attributable to price adjustments or concessions provided to customers, dealers, distributors, and institutional buyers; and
• increase in exhibition & sale promotion of RS16.12 lakhs for the Fiscal 2025 from RS3.78 lakhs for the Fiscal 2024, primarily attributable to our enhanced marketing efforts aimed at expanding its presence in new markets and strengthening brand visibility. This includes participation in textile and fashion trade fairs, exhibitions, and buyer- seller meets.
Tax Expenses
Our total tax expense was increased by 28.61% to RS500.77 lakhs for the Fiscal 2025 from RS389.37 lakhs for the Fiscal 2024 comprising of current income tax and deferred tax credit/charge. During the Fiscal 2025, we incurred current tax expenses of RS583.87 lakhs and deferred tax credit of RS83.10 lakhs and during Fiscal 2024, we incurred current tax expenses of RS408.53 lakhs and deferred tax credit of RS19.15 lakhs. The decrease in our deferred tax charge to deferred tax credit was primarily due to creation of deferred tax assets on account of timing difference in Net block as per books & as per Income Tax. Further, our effective tax rate was 25.17% for the Fiscals 2025 and 2024.
Restated profit after tax for the year
Due to the foregoing, we incurred a profit of RS1,690.47 lakhs during the Fiscal 2025, as compared to a profit of RS1,130.80 lakhs during the Fiscal 2024. Our profit has significantly increased primarily driven by our growth in revenue from fabric production, ready-to-stitch garments, and third-party processing services, as well as strategic initiatives such as doubling our digital printing capacity and enhancing brand-enabling services for apparel brands. For details with respect to the capacity expansion, refer “Our Business - Our Manufacturing capabilities” on page 217. This expansion in digital printing capabilities has allowed us to cater to the growing demand for fast-fashion products with customized, high-quality designs, resulting in higher margins and greater customer satisfaction. Additionally, our role as a brand enabler for established and emerging apparel brands has contributed significantly to revenue growth, as it provides tailored solutions, quick trend adaptations, and high-value fabric offerings that align with global fashion trends. Our ability to expand our product portfolio with value-additions has further boosted sales volumes and profitability. On the cost front, our total expenses as a percentage of total income for Fiscal 2025 was only 85.70% as compared to 87.84% for Fiscal 2024. Our efforts to optimize production processes, reduce wastage, and improve supply chain management have contributed to better cost control, enhancing operational margins. Despite rising input costs for raw materials, fuel, and logistics, the company has successfully maintained competitive pricing while improving its gross profit margins through value-added products and efficient resource utilization. The increase in profit reflects our strategic focus on scaling its production capacity, expanding brandenabling services, growing our customer base, and improving operational efficiencies. Our investment in digital printing, combined with our brand-centric approach, has helped drive sustainable growth and profitability, positioning it in the textile and garment industry.
Fiscal 2024 compared to Fiscal 2023
Total Income
Our total income increased by 25.86% to RS12,503.33 lakhs for Fiscal 2024 from RS9,934.40 lakhs for Fiscal 2023 based on Restated Financial Information. This increase was primarily due to significant increase in our revenue from operations which was primarily driven by revenue from production and sale of fabrics, including digitally printed, jacquard, dobby, corduroy, and other customized fabrics tailored for various applications and revenue from ready-to-stitch garments (womenswear) such as suits and co-ord sets, and accessories like shawls and stoles designed to meet customer preferences and our revenue from sale of services is earned from processing services, including dyeing, digital printing, and fabric finishing, performed for third-party clients, sale from packaging materials, scrap, etc. and significant decrease in our other income primarily due to significant increase in the interest income generated from the security deposits, increase in rental income from leasing part of our properties and significant decrease in the profit on sale of fixed assets. For further details, please see, Fiscal 2024 compared to Fiscal 2023 - Total Income - Revenue from operations” and Fiscal 2024 compared to Fiscal 2023 - Total Income - Other income” below.
Revenue from operations: Our revenue from operations increased by 25.96% to RS12,494.14 lakhs for Fiscal 2024 from RS9,918.84 lakhs for Fiscal 2023 based on Restated Financial Information, primarily due to the following reasons:
• Sale of products, i.e., sale of fabrics, including digitally printed, jacquard, dobby, corduroy, and other customized fabrics and revenue from ready-to-stitch garments (womenswear) such as suits and co-ord sets, and accessories like shawls and stoles increased by 22.26% to RS10,615.86 lakhs in Fiscal 2024 from RS8,253.19 lakhs in Fiscal 2023. This was primarily due to:
> Higher production volumes particularly in digital printing segment, expanded product offerings, and growing customer demand across domestic markets. Our focus on digitally printed fabrics along with ready-to-stitch garments like suits, shawls, and stoles, has contributed significantly to the rise in revenue. We manufactured 13.84 lakhs meters of fabrics in digital printing segment and 1.89 lakhs pcs of ready-to- stitch garments and accessories in digital printing segment during Fiscal 2024 as compared to 7.28 lakhs meters of fabrics in digital printing segment and 1.00 lakhs pcs of ready-to-stitch garments and accessories in digital printing segment during Fiscal 2023. For details please see, “Basis for Offer Price - Key operational indicators (Only for our product revenue segment) ” on page 131. This strategic shift from the traditional manufacturing fabric segment to higher-value digital printing fabrics and garments, has led to an overall increase in revenue and improved profitability; and
> Our ability to cater to both branded and non-branded segments, including customized products for apparel brands and its own branded offerings, has allowed it to capture a wider market share and increase order volumes. Additionally, our expansion into Tier 3/4 cities and rural areas through its own brands has further contributed to higher sales volumes in previously untapped markets. Our sales from our own brands contributed 45.58%, sales from brand enabling segment for apparel brands contributed 20.63%, and sales from non-branded segment contributed to 18.75% in Fiscal 2024 as compared with sales from our own brands contributed 35.30%, sales from brand enabling segment for apparel brands contributed 16.82%, and
sales from non-branded segment contributed 31.08% in Fiscal 2023. For details please see, “Our Business - Our Revenue Mix" on page 208. This strategic shift from the non-branded fabric segment to higher-value branded and brand enabler segments, has led to an overall increase in revenue and improved profitability.
• Sale of services earned from processing services, including dyeing, digital printing, and fabric finishing, performed for third-party clients increased by 11.10% to RS1,802.10 lakhs in Fiscal 2024 from RS1,602.10 lakhs in Fiscal 2023 reflects our growing expertise and capacity in offering value-added textile solutions. The rise in third-party processing orders can be attributed to the increasing demand from apparel brands, wholesalers, and fabric manufacturers who outsource dyeing, printing, and finishing services to leverage our advanced machinery and quality output. Our focus on digital printing services, which offer customized, fast-turnaround solutions, has been a key contributor to this growth, as brands continue to seek modern designs and intricate patterns to meet fast-fashion trends. Additionally, the rise in demand for premium fabric finishing services, including pre-treatment, posttreatment, and fabric softening processes, has driven higher service revenues, as these processes enhance the durability, texture, and colourfastness of fabrics; and
• Sale of other packaging materials, scrap, etc. increased by 16.58% to RS76.18 lakhs in Fiscal 2024 from RS63.55 lakhs in Fiscal 2023.
Other income: Our other income was decreased by 40.98% to RS9.18 lakhs for Fiscal 2024 from RS15.56 lakhs for Fiscal 2023 based on Restated Financial Information, primarily due to:
• increase in interest income from security deposits for RS2.26 lakhs in Fiscal 2024 as compared to interest income from security deposits for RS1.26 lakhs in Fiscal 2023;
• decrease in interest income from fixed deposits for RS0.27 lakhs in Fiscal 2024 as compared to RS2.46 lakhs in Fiscal 2023;and
• increase in interest income from parties on delayed payment for RS2.98 lakhs in Fiscal 2024 as compared to Nil in Fiscal 2023.
Total Expenses
Cost of material consumed: The cost of material consumed increased by 37.86% to RS10,693.21 lakhs in Fiscal 2024 from RS7,756.74 lakhs Fiscal 2023 based on Restated Financial Information. The increase was primarily due to the following reasons:
• increase in purchase of raw materials for RS6,297.71 lakhs in Fiscal 2024 as compared to RS4,437.41 lakhs in Fiscal 2023 due to the rise in production volumes driven by higher customer demand, new product launches, and our expanded manufacturing capabilities. As we have increased our focus on value-added fabrics, such as digitally printed fabrics, the requirement for greige fabrics, chemicals, dyes, and accessories has grown significantly. Our strategy to expand our ready-to-stitch garment segment, including suits, co-ord sets, shawls, stoles, and scarves, has also contributed to a higher consumption of raw materials. Additionally, increased sourcing of specialty yarns, chemicals, and fabrics to meet customized customer requirements has resulted in a higher procurement of raw materials. Moreover, as we have entered new markets and strengthened our distribution channels, there has been an uptick in orders, requiring the procurement of larger quantities of raw materials to support higher production targets. The increased emphasis on maintaining product quality and expanding product offerings has also led to purchasing premium yarns, sustainable fabrics, and eco-friendly dyes;
• increase in direct expenses cost such as wages to labours, accessories consumed, clipping & mending charges, cord cutting expenses, cutting & twisting, diesel, fuel, oil & lubricants consumed, dyeing & finishing, electric equipment consumed, electricity, embroidery, firefighting exp, custom duty, duty drawback, freight, fabrication, pet coke consumed, custom, clearing & forwarding, designing, sorting & grading, testing charges, warping expenses, packing material consumed for RS4,393.61 lakhs in Fiscal 2024 from RS3,173.90 lakhs primarily due to the growth in production volumes, higher raw material usage, and expansion of manufacturing activities during the year. The increase reflects our enhanced capacity utilization, introduction of new products, and greater focus on value-added processes such as digital printing, jacquard weaving, and embroidery, which require more labour, power, and consumables; and
• changes in inventories of raw materials at the beginning of the year and at the end of the year amounted to RS1.89 lakhs in Fiscal 2024 from RS145.43 lakhs in Fiscal 2023.
Changes in inventories: The changes in inventories of finished goods amounted to RS (1,561.31) lakhs in the Fiscal 2024 in comparison to RS24.10 lakhs in Fiscal 2023 based on Restated Financial Information. This was primarily due to increase in closing stock of finished goods in Fiscal 2024 as compared to Fiscal 2023 reflecting our expanded production capacity, diversification of product offerings, and strategic approach to managing inventory to meet anticipated future demand. The increase in finished goods stock is primarily driven by our production of fabrics such as digitally printed fabrics, jacquard fabrics, dobby fabrics, corduroy fabrics, and ready-to-stitch garments like suits, co-ord sets, shawls, and stoles, aimed at fulfilling bulk orders and seasonal customer demand. The rise in closing stock levels is also attributed to new product development efforts and our preparation for peak sales periods, such as festive seasons and wedding seasons, where demand is typically higher. Additionally, our expansion into new markets, particularly in Tier 3/4 cities and rural areas, has led to increased production, resulting in a higher stock of finished goods to ensure timely fulfilment of new and repeat orders. Another contributing factor to the increase in finished goods stock is our focus on maintaining a broader product mix to cater to customer preferences across different regions and end-use applications. By holding adequate stock levels, we are better positioned to meet unexpected spikes in demand, ensure faster order fulfilment, and minimize the risk of supply chain disruptions.
Employee benefits expenses: The employee benefits expense increased by 16.84% to RS548.71 lakhs for the Fiscal 2024 from RS469.62 lakhs for the Fiscal 2023 based on Restated Financial Information, primarily due to:
• increase in salaries to office staff to RS162.17 lakhs for the Fiscal 2024 from RS131.03 lakhs for the Fiscal 2023;
• increase in bonus paid to RS77.43 lakhs for the Fiscal 2024 from RS58.59 lakhs for the Fiscal 2023;
• increase in gratuity expenses to RS95.52 lakhs for the Fiscal 2024 from RS89.28 lakhs for the Fiscal 2023;
• increase in contribution to Statutory fund for our employees to RS33.39 lakhs for the Fiscal 2024 from RS24.83 lakhs
for the Fiscal 2023;
• increase in annual leave with wages paid to our employees to RS51.17 lakhs in Fiscal 2024 from RS39.14 lakhs in Fiscal 2023; and
• increase in staff welfare expenses to RS8.54 lakhs in Fiscal 2024 from RS6.23 lakhs in Fiscal 2023;
Finance costs: The finance costs increased by 39.28% to RS392.93 lakhs for the Fiscal 2024 from RS282.11 lakhs for the Fiscal 2023 based on Restated Financial Information, primarily due:
• increase in interest expense on borrowings from banks to RS224.98 lakhs in Fiscal 2024 from RS131.21 lakhs in Fiscal 2023 consequent to increase in our total borrowings from banks to RS2,672.74 lakhs as of March 31, 2024 from RS1,781.23 lakhs as of March 31, 2023;
• increase in interest expense on unsecured borrowings from related parties to RS158.86 lakhs in Fiscal 2024 from RS145.20 lakhs in Fiscal 2023; and
• increase in other borrowing costs, comprising of bank charges and loan processing fees to RS9.09 lakhs in Fiscal 2024 from RS5.70 lakhs in Fiscal 2023.
Depreciation and Amortization Expenses: The depreciation and amortization expenses increased by 76.32% to RS338.68 lakhs for the Fiscal 2024 from RS192.08 lakhs for the Fiscal 2023 based on Restated Financial Information, primarily due to:
• increase in depreciation on property, plant and equipment to RS338.62 lakhs for the Fiscal 2024 from RS191.81 lakhs for the Fiscal 2023 due to additions and disposals in property, plant and equipment for RS837.52 lakhs (net) during the Fiscal 2024; and
• decrease in amortization of intangible assets to RS0.06 lakhs for the Fiscal 2024 from RS0.27 lakhs for the Fiscal 2023.
Other Expenses: The other expenses increased by 46.56% to RS570.93 lakhs for the Fiscal 2024 from RS389.55 lakhs for the Fiscal 2023 based on Restated Financial Information, primarily due to:
• increase in rent to RS55.57 lakhs for the Fiscal 2024 from RS53.34 lakhs for the Fiscal 2023, primarily attributable to the rent payable towards the three warehouses and plant machineries taken on lease;
• increase in conveyance allowance, vehicle running and travelling expenses to RS29.03 lakhs for the Fiscal 2024 from RS26.31 lakhs for the Fiscal 2023, primarily attributable to sales, procurement, operational oversight, and supply chain management and are necessary to support our business operations, customer engagement, and logistics processes;
• increase in fees & taxation, property tax and pollution expenses to RS12.74 lakhs for the Fiscal 2024 from RS6.37 lakhs for the Fiscal 2023, primarily attributable to the government levies, statutory fees, professional fees for regulatory filings, business licenses, and renewal charges, ownership and use of land, buildings, and other real estate assets such as manufacturing facilities, warehouses, corporate offices, and sales outlets and compliance with environmental laws and pollution control norms mandated by government bodies;
• increase in repairs and maintenance to RS57.17 lakhs for the Fiscal 2024 from RS50.51 lakhs for the Fiscal 2023, primarily attributable to upkeep and smooth functioning of our manufacturing facilities, machinery, equipment, warehouses, and office premises;
• increase in security agency services to RS26.69 lakhs for the Fiscal 2024 from RS23.40 lakhs for the Fiscal 2023, primarily attributable to the cost of hiring professional security personnel from third-party security agencies to provide round-the-clock surveillance and access control at key locations, including manufacturing units, warehouses, corporate offices;
• increase in brokerage to RS136.57 lakhs for the Fiscal 2024 from RS97.45 lakhs for the Fiscal 2023, primarily attributable to commission payments to our brokers/agents who facilitate business relationships with retailers, wholesalers, apparel brands, institutional buyers, and other clients, particularly in semi-urban and rural markets for expanding market reach; and
• increase in rebate, discount and rate difference of RS197.83 lakhs for the Fiscal 2024 from RS91.47 lakhs for the Fiscal 2023, primarily attributable to price adjustments or concessions provided to customers, dealers, distributors, and institutional buyers.
Tax Expenses
Our total tax expense was increased by 49.15% to RS389.37 lakhs for the Fiscal 2024 from RS261.05 lakhs for the Fiscal 2023 comprising of current income tax and deferred tax credit/charge. During the Fiscal 2024, we incurred current tax expenses of RS408.53 lakhs and deferred tax credit of RS19.15 lakhs and during Fiscal 2023, we incurred current tax expenses of RS217.66 lakhs and deferred tax charge of RS43.40 lakhs. The decrease in our deferred tax charge to deferred tax credit was primarily due to creation of deferred tax assets on account of timing difference in Net block as per books & as per Income Tax. Further, our effective tax rate was 25.17% for the Fiscals 2024 and 2023.
Restated profit after tax for the year
Due to the foregoing, we incurred a profit of RS1,130.80 lakhs during the Fiscal 2024, as compared to a profit of RS559.14 lakhs during the Fiscal 2023. Our profit has significantly increased primarily driven by our growth in revenue from fabric production, ready-to-stitch garments, and third-party processing services, as well as strategic initiatives such as doubling our digital printing capacity and enhancing brand-enabling services for apparel brands. For details with respect to the capacity expansion, refer “Our Business - Our Manufacturing capabilities” on page 217. This expansion in digital printing capabilities has allowed us to cater to the growing demand for fast-fashion products with customized, high-quality designs, resulting in higher margins and greater customer satisfaction. Additionally, our role as a brand enabler for established and emerging apparel brands has contributed significantly to revenue growth, as it provides tailored solutions, quick trend adaptations, and high-value fabric offerings that align with global fashion trends. Our ability to expand our product portfolio with value-additions has further boosted sales volumes and profitability. On the cost front, our total expenses as a percentage of total income for Fiscal 2024 was only 87.84% as compared to 91.74% for Fiscal 2023. Our efforts to optimize production processes, reduce wastage, and improve supply chain management have contributed to better cost control, enhancing operational margins. Despite rising input costs for raw materials, fuel, and logistics, the company has successfully maintained competitive pricing while improving its gross profit margins through value-added products and efficient resource utilization. The increase in profit reflects our strategic focus on scaling its production capacity, expanding brandenabling services, growing our customer base, and improving operational efficiencies. Our investment in digital printing, combined with our brand-centric approach, has helped drive sustainable growth and profitability, positioning it in the textile and garment industry.
Cash Flows and Cash and Cash Equivalents
Operating Activities
Fiscal 2025
Net cash generated from operating activities was RS1,297.22 lakhs for the Fiscal 2025. While our net profit before tax and exceptional items was RS2,191.24 lakhs, we had an operating profit before working capital changes of RS3,112.34 lakhs for the Fiscal 2025 which was primarily adjusted due to depreciation and amortisation of RS422.55 lakhs, finance costs of RS435.20 lakhs, loss on sale of assets of RS4.33 lakhs and gratuity provision of RS83.80 lakhs and offset by interest income for RS4.78 lakhs and contribution to CSR activities for RS20.00 lakhs. Our changes in working capital for the Fiscal 2025 primarily consisted of an increase in inventories by RS899.57 lakhs, increase in trade receivables by RS708.92 lakhs, decrease in short term loans and advances by RS42.15 lakhs, increase in other current assets by RS581.71 lakhs, increase in trade payables by RS714.90 lakhs, increase in other current liabilities by RS38.78 lakhs and increase in short term provisions by RS181.14 lakhs. Our income taxes paid was RS601.87 lakhs during the Fiscal 2025.
Fiscal 2024
Net cash generated from operating activities was RS90.15 lakhs for the Fiscal 2024. While our net profit before tax and exceptional items was RS1,520.17 lakhs, we had an operating profit before working capital changes of RS2,317.52 lakhs for the Fiscal 2024 which was primarily adjusted due to depreciation and amortisation of RS338.68 lakhs, finance costs of RS392.93 lakhs, gratuity provision of RS82.15 lakhs, loss on sale of assets of RS0.09 lakhs and offset by interest income for RS5.50 lakhs and contribution to CSR activities for RS11.00 lakhs. Our changes in working capital for the Fiscal 2024 primarily consisted of an increase in inventories by RS1,568.97 lakhs, increase in trade receivables by RS267.62 lakhs, decrease in short term loans and advances by RS96.57 lakhs, increase in other current assets by RS320.78 lakhs, decrease in trade payables by RS13.63 lakhs, increase in other current liabilities by RS64.72 lakhs and increase in short term provisions by RS190.86 lakhs. Our income taxes paid was RS408.53 lakhs during the financial year 2024.
Fiscal 2023
Net cash generated from operating activities was RS653.13 lakhs for the Fiscal 2023. While our net profit before tax and exceptional items was RS820.20 lakhs, we had an operating profit before working capital changes of RS1,368.42 lakhs for the Fiscal 2023 which was primarily adjusted due to depreciation and amortisation of RS192.08 lakhs, finance costs of RS282.11 lakhs, gratuity provision of RS85.65 lakhs and offset by prior period items of RS0.18 lakhs, interest income for RS3.72 lakhs and profit on sale of fixed assets by RS7.72 lakhs. Our changes in working capital for the Fiscal 2023 primarily consisted of decrease in inventories by RS169.41 lakhs, increase in trade receivables by RS346.68 lakhs, decrease in short term loans and advances by RS3.02 lakhs, increase in other current assets by RS317.97 lakhs, decrease in trade payables by RS132.63 lakhs, increase in other current liabilities by RS42.08 lakhs and increase in short term provisions by RS85.13 lakhs. Our income taxes paid was RS217.66 lakhs during the financial year 2023.
Investing Activities
Fiscal 2025
Net cash used in investing activities was RS1,064.88 lakhs for the Fiscal 2025, primarily comprising payment for purchase of property, plant and equipment for our manufacturing facilities aggregating RS 1,043.93 lakhs, sale proceeds from disposing of fixed assets aggregating RS9.45 lakhs, and decrease in cash flow on account of security deposits placed aggregating RS35.18 lakhs.
Fiscal 2024
Particulars |
Fiscals |
||
| 2025 | 2024 | 2023 | |
Net cash (used)from operating activities |
1,297.22 | 90.15 | 653.13 |
Net cash (used)from investing activities |
(1,064.88) | (641.68) | (973.89) |
Net cash (used)from financing activities |
(171.22) | 456.80 | 260.85 |
Net increase / (decrease) in cash and cash equivalents at the end of the period/year |
11.00 | (94.74) | (59.92) |
Cash and Cash equivalents at the beginning of the year |
21.33 | 116.07 | 175.98 |
Cash and Cash equivalents at the end of the year |
82.46 | 21.33 | 116.07 |
The following table sets forth our cash flows and cash and cash equivalents for the period / years indicated:
For further details of financial indebtedness as on March 31, 2025, see “Financial Indebtedness” on page 305.
Liquidity and Capital Resources
Historically, our primary liquidity requirements have been to finance our capital expenditure and working capital needs for our operations. We have met these requirements through cash flows from operations and borrowings. As of March 31, 2025, we had RS82.46 lakhs in cash and cash equivalents. We believe that, after taking into account the expected cash to be generated from operations, our borrowings, and the Net Proceeds, we will have sufficient liquidity for our present and anticipated requirements for capital expenditure and working capital for the next 12 months.
Contingent Liabilities
As of March 31, 2025, we have following contingent liabilities as per AS 29: a. Claims against the Company (including unasserted claims) not acknowledged as debt:
Particulars |
As of March 31, 2025 |
Long-term borrowings |
1,528.68 |
Short-term borrowings |
2,286.14 |
Total |
3.814.82 |
Net cash used in investing activities was RS641.68 lakhs for the Fiscal 2024, primarily comprising payment for purchase of property, plant and equipment for our manufacturing facilities aggregating RS852.50 lakhs, sale proceeds from disposing of fixed assets aggregating RS5.29 lakhs, increase in cash flow on account of fixed deposits/security deposits matured/ placed (net) aggregating RS200.02 lakhs and interest income received for RS5.50 lakhs.
Fiscal 2023
Net cash used in investing activities was RS973.89 lakhs for the Fiscal 2023, primarily comprising payment for purchase of property, plant and equipment for our manufacturing facilities aggregating RS845.00 lakhs, sale proceeds from disposing of fixed assets aggregating RS47.10 lakhs, decrease in cash flow on account of fixed deposits/security deposits matured/ placed (net) aggregating RS179.71 lakhs, interest income received for RS3.72 lakhs.
Financing Activities
Fiscal 2025
Net cash generated from financing activities during the Fiscal 2025 was RS171.22 lakhs comprising repayment of long-term borrowings aggregating RS318.24 lakhs, short-term borrowings availed of RS582.22 lakhs and payment of interest aggregating RS435.20 lakhs.
Fiscal 2024
Net cash generated from financing activities during the Fiscal 2024 was RS456.80 lakhs comprising proceeds from long-term borrowings aggregating RS290.88 lakhs, short-term borrowings availed of RS558.85 lakhs and payment of interest aggregating RS392.93 lakhs.
Fiscal 2023
Net cash generated from financing activities during the Fiscal 2023 was RS260.85 lakhs comprising long-term borrowings availed of RS374.54 lakhs, short-term borrowings availed aggregating RS168.42 lakhs and payment of interest aggregating RS282.11 lakhs.
Indebtedness
The following table sets forth our financial indebtedness as of March 31, 2025:
in Lakhs)
Off-Balance Sheet Commitments and Arrangements
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
Debt/Equity Ratio
Our debt/equity ratio (i.e. debt divided by shareholders equity) was 0.76 times, 1.06 times and 1.28 times as of March 31, 2025, March 31, 2024 and March 31, 2023, respectively.
‘Debt represents the sum of long-term borrowings and short-term borrowings.
‘Shareholders Equity represents the sum of paid-up share capital, reserves and surplus created out of profit less accumulated losses.
Quantitative and Qualitative Analysis of Market Risks
We are exposed to various types of market risks during the normal course of business. For further details, see “Risk Factors on page 39.
Credit risk
Credit risk is the risk of financial loss to us if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from our receivables from customers. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. We assess the credit quality of the counterparties, taking into account their financial position, past experience and other factors. We establish an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. Our management uses a simplified approach for the purpose of computation of allowance for expected credit loss for trade receivables.
Liquidity risk
Liquidity risk is the risk that we will not be able to meet our financial obligations as they become due. We manage our liquidity risk by ensuring, as far as possible, that we will always have sufficient liquidity to meet our liabilities when due.
Ultimate responsibility for liquidity risk management rests with the respective Board of Directors, which has established an appropriate liquidity risk management framework for the management of our short-term, medium-term and long-term funding and liquidity management requirements. We manage liquidity risk by maintaining adequate reserves, banking facilities and committed borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities and by monitoring rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that we do not breach borrowing limits or covenants (where applicable) on any of our borrowing facilities.
Market Risks
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments. We have negligible exposure to foreign currency risk. We do not have interest rate risks as we do not have
Particulars |
As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
Related to Direct Tax Matters |
25.97 | 25.33 | 23.46 |
Related to Indirect Tax Matters |
- | - | - |
Related to Bank Guarantees |
- | - | - |
Other Matters |
0.35 | 0.35 | - |
debt obligations with floating interest rates. Further, we are not exposed to currency risk, as we do not have any significant foreign currency outstanding /receivables neither are we exposed to price or commodity risk.
Inflation
In recent years, India has experienced relatively high rates of inflation. Inflation generally impacts the overall economy and business environment and hence could affect us
Auditor Qualifications and Emphasis of Matter
There are no auditor qualifications which have not been given effect to in the Restated Financial Information.
Unusual or Infrequent Events or Transactions
There have been no unusual or infrequent events or transactions that have in the past or may in the future affect our busines s operations or future financial performance.
Known Trends or Uncertainties
Our business has been subject to significant economic changes arising from the trends identified above in Significant Factors Affecting our Financial Conditions and Results of Operations” above and the uncertainties described in “Risk Factors" on page 39.
Future Relationship Between Cost and Revenue
Other than as described in “Risk Factors” and this section, there are no known factors that might affect the future relationship between cost and revenue.
Related Party Transactions
We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party transactions, see “Other Financial Information - Related Party Transactions" on page 276.
Competitive Conditions
We operate in a competitive environment. Please refer to “Risk Factors”, “Industry Overview" and “Our Business" on pages 39, 141 and 203, respectively, for further information on our industry and competition.
Seasonality and Cyclicality of Business
We are impacted by seasonal variations in sales volumes, which may cause our revenues to vary significantly between different quarters in a financial year. Typically, we see an increase in our business during the festive periods in India, i.e., prior to Dussehra and Diwali, and end of season sales. Therefore, our results of operations and cash flows across quarters in a financial year may not be comparable and any such comparisons may not be meaningful, or may not be indicative of our annual financial results or our results in any future quarters or periods. See “Risk Factors - Risks Relating to our Business - Our business is seasonal in nature, which could adversely affect our financial performance.” on page 44.
Extent to which material increases in Net Sales or Revenue are due to increased sales volume, introduction of new products or services or increased sales prices
Changes in revenue in the last three Fiscals, are as described in “- Fiscal 2025 compared to Fiscal 2024" and “- Fiscal 2024 compared to Fiscal 2023” above.
Significant Dependence on Single or Few Customers
Significant proportion of our revenue have historically been derived from top 15 and top 20 customers. The % of contribution of our customers visa-vis the revenue from operations for the financial years March 31, 2025, 2024 and 2023 are as follows:
New Products or Business Segments
Except as disclosed in “Our Business” on page 203, and products that we announce in the ordinary course of business, we have not announced any new products or business segments.
Significant developments occurring after March 31, 2025
As set out in this Red Herring Prospectus, to our knowledge, no circumstances have arisen since the date of the last financial statements as disclosed in this Red Herring Prospectus which materially or adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.
Recent Accounting Pronouncements
As on the date of this Red Herring Prospectus, there are no recent accounting pronouncements, which, we believe, would have a material effect on our financial condition or results of operations.
Particulars |
Customers |
||
| March 31, 2025 | March 31, 2024 | March 31, 2023 | |
Top 15 (%) |
49.23% | 45.10% | 51.24% |
Top 20 (%) |
55.08% | 51.16% | 57.39% |
IIFL Customer Care Number
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1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
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