Kewal Kiran Clothing Ltd Management Discussions

ECONOMIC OVERVIEW Indian Economy

India continued to reinforce its position as one of the fastest growing economies during FY26, retaining its position as the sixth largest economy across the world. Supported by strong domestic fundamentals and a resilient economic framework, the country sustained its growth momentum despite global headwinds owing to geopolitical tensions, trade disruptions and financial market volatility. GDP growth is estimated at 7.4% for the year, reflecting the economys ability to navigate external uncertainties while capitalising on the strength of domestic demand and investment.

FY23	FY24 FY25 (FRE)	FY26 (SAE)	FY27 (P)
7.6%	7.2% 7.1%	7.4%	6.8-7.2%

FRE: First Revised Estimate; SAE: Second Advance Estimates, P: Projections

Indias structural consumption story continued to gain momentum during the year. Consumption continued to be the primary driver of economic activity, reflecting the growing aspirations of a young and increasingly affluent population. Improved agricultural output strengthened rural incomes and spending capacity, while urban demand benefitted from rising disposable income, supportive fiscal measures and easing inflationary pressures. These trends contributed to healthy consumption across categories, particularly in discretionary and lifestyle-oriented segments, as consumers increasingly prioritised quality, experiences and premium offerings.

The broader economic environment remained supportive of consumption-led growth. Inflation moderated to 2.0% during FY26, aided by favourable supply conditions and lower food prices, helping improve household purchasing power. The easing inflationary environment, coupled with a more accommodative monetary policy stance, strengthened consumer sentiment and supported discretionary spending. At the same time, continued public investment in infrastructure and logistics enhanced connectivity, improved market accessibility and contributed to the development of a more integrated consumer economy.

Looking ahead, the Union Budget for FY27 reaffirms the Governments commitment to sustaining growth through investments in infrastructure, digital innovation, manufacturing and entrepreneurship. Measures aimed at strengthening the MSME ecosystem, improving ease of doing business and expanding access to credit are expected to stimulate economic activity and support income generation across segments. Combined with favourable demographic trends, rising affluence and evolving consumer preferences, these initiatives are expected to further strengthen Indias long-term consumption landscape, creating a compelling environment for lifestyle- focused businesses to grow and thrive.

OUTLOOK

Indias growth outlook remains compelling, supported by favourable demographics, rising affluence and a steadily expanding consumer economy. With real GDP growth projected in the range of 6.8% to 7.2% in FY27, the country is expected to remain among the fastest-growing major economies globally. Strong domestic demand, increasing urbanisation and continued formalisation of the economy are expected to sustain consumption momentum across both essential and discretionary categories.

The continued emphasis on infrastructure development, manufacturing expansion and job creation is expected to support income growth and strengthen consumer confidence, while ongoing investments in digital connectivity and logistics

will further improve market access and consumption reach. A gradual revival in private sector investments, coupled with the Governments sustained focus on economic development, is expected to create a virtuous cycle of employment generation, income growth and consumer spending.

Indias evolving consumer landscape presents a particularly attractive opportunity for lifestyle-oriented businesses. Rising disposable incomes, increasing exposure to global trends and a growing preference for branded, premium and experience-led offerings are reshaping consumption patterns across demographics. The emergence of digitally-connected consumers, alongside the continued expansion of the middle- income population, is creating new avenues for demand across urban as well as emerging markets.

Supported by a stable policy environment, prudent economic management and ongoing structural reforms, India remains well- positioned to navigate external uncertainties while sustaining its long-term growth trajectory. These underlying strengths are expected to reinforce the countrys consumption-driven growth story, creating a favourable environment for lifestyle brands to deepen consumer engagement, expand market presence and drive sustainable growth.

(Source: PIB, AngelOne, MoSPI, RBI)

INDUSTRY REVIEW Indias Apparel Sector

The Indian textile and apparel industry is one of the most comprehensive and integrated ecosystems globally, spanning the entire value chain from fibre and yarn production to fabric processing, garment manufacturing and fashion retail. Leveraging a longstanding legacy of craftsmanship alongside modern manufacturing capabilities, the sector has developed a strong presence across global markets. Indias expertise in cotton, silk, denim and value-added apparel has earned widespread recognition, while its diversified industry structure enables participation across multiple segments, including traditional handlooms and handicrafts, organised apparel manufacturing, technical textiles and premium fashion. This breadth and depth position the industry as a key contributor to both economic growth and evolving consumer lifestyles. Over the years, on the back of these tailwinds, India has emerged as the second-largest producer of textiles and apparels across the world, with the sector providing direct employment to more than 5.3 crore people in the country. Additionally, the sector is also expected to generate 2 crore more jobs in the next 3 years.

Indias textile and apparel market is valued at $ 190 billion in FY26 and is projected to reach $ 350 billion by 2030. The domestic market carves the lions share of ~80% of the overall market size. Rapid urbanisation, increasing digital penetration and the expanding middle class are reshaping purchasing patterns, creating significant opportunities across lifestyle categories. Consumers are becoming more brand-conscious, value-driven and experience-oriented, resulting in growing demand for products and services that combine quality, convenience and personal expression. The convergence of online and offline channels has further accelerated market access, enabling brands to engage with consumers more effectively and at greater scale.

Indias textile and apparel industry continued to strengthen its global position during FY26, demonstrating resilience amid a dynamic international trade environment. During the fiscal, the Indian textile and apparel industry underwent a defining transformation, marked by a decisive shift toward large- scale integrated manufacturing and advanced technology. Characterised by resilience in the face of global headwinds, the sector reinforced its position as a primary driver of Indias export economy. Export performance remained steady, supported by the sectors diversified product portfolio, established manufacturing capabilities and growing acceptance of Indian textile products across global markets. Some of the critical challenges faced by the sector during the fiscal include the US-imposed tariff shock of 50% which resulted in the rise of the cost of Indian goods by 30-35%, leading to a huge contraction of sales from the US, which was otherwise the largest contributor of Indian exports in the textile and apparel sector. Additionally, due to the stricter environmental and social norms of the European Union, smaller players (especially the MSMEs) were struggling to maintain

margins. To counter such challenges, the country reduced its reliance on the US for exports and targeted 40 other textile- underpenetrated countries for Indian exports such as Japan, Germany, UK and the UAE, among others. In these countries, global textile imports stand at $ 590 billion, with Indias share at a mere 5-6%. Additionally, the Government focused on leveraging existing Free Trade Agreements (FTAs) with countries like UK and speeding up the discussions on lowering the duties and ensuring ease of access to the markets for Indian textile and apparel companies with the European Union.

Strong demand from developed economies, coupled with increasing penetration into emerging markets across the Middle East, Africa and Asia, has strengthened the industrys resilience and reduced concentration risks. This widening global presence positions the sector favourably to capture future opportunities arising from shifting sourcing patterns and supply chain realignments.

The sustained growth in exports reflects the industrys ability to adapt to ever-evolving consumer preferences while maintaining competitiveness across both traditional and value- added segments.

Ready-made garments continued to anchor Indias textile export basket, benefitting from stable demand across key international markets. Other major categories, including cotton-based products, man-made fibre textiles and home textile offerings, also contributed to export growth, highlighting the breadth and versatility of Indias textile ecosystem. Value-added segments such as handicrafts delivered a particularly strong performance, underscoring the increasing global appreciation for Indias craftsmanship, design capabilities and heritage-led products.

Policy support continued to play an important role in enhancing the sectors export competitiveness. The extension of export incentive and duty remission schemes provided stability and improved cost competitiveness for Indian manufacturers, reinforcing the countrys position as a preferred sourcing destination. At the same time, continued investments in infrastructure, logistics and manufacturing capabilities are expected to further strengthen the industrys global competitiveness.

The year also marked a significant advancement in Indias trade engagement strategy, with the conclusion and implementation of multiple bilateral trade agreements with key economies. These agreements are expected to improve market access, reduce tariff barriers and enhance the competitiveness of Indian textile and apparel exports across global markets. Beyond export opportunities, they are also likely to facilitate deeper integration into global value chains, encourage foreign investments, foster technology partnerships and support the development of higher-

value product segments. Collectively, these developments create a favourable environment for the long-term growth of Indias textile and apparel industry, reinforcing its position as a strategic contributor to the countrys manufacturing and export ambitions. As a culmination of this, the textile and apparel sector exports are estimated at $ 37 billion in FY26, despite the global geopolitical uncertainties and tariff shocks. The country additionally targets to scale the textile and apparel export to $ 100 billion by FY31.

(Source: PIB, Wazir Advisors, Ministry of Textile, Textile Sphere India) Growth drivers

?€? Rising population and rapid urbanisation: Indias demographic scale and accelerating urbanisation remain key demand drivers for lifestyle brands. As the worlds most populous nation, with a population of 1.46 billion in 2025 and an urbanisation rate of 37.1%, the country offers a significant and expanding consumer base. Rising urban migration, improving living standards and greater exposure to global trends are driving demand for branded, aspirational and experience-led products across fashion and lifestyle categories. At the same time, Tier II, III and IV cities are emerging as the next consumption frontier, supported by rising incomes, better infrastructure and increasing digital connectivity. As aspirations continue to rise across these markets, they are expected to drive the next phase of growth for organised retail and lifestyle brands

?€? Rising disposable income: The per capital gross national income in India is estimated at ? 1,42,119 in FY26 compared to ? 1,33,501 in FY25, driving the overall consumption story of the country

?€? Consumer demography and preference: Rising affluence and aspiration continue to drive demand for branded and premium apparel in India. Affluent and aspirational consumers are expected to contribute nearly 55% of the countrys consumption growth, supported by increasing incomes and evolving lifestyle preferences. At the same time, Gen Z is emerging as a key growth driver for the textile and apparel sector, with spending projected to reach approximately ? 180 trillion by 2035. Their growing influence on fashion trends, brand choices and digital engagement is expected to further accelerate demand across apparel categories

?€? E-commerce growth: Indias e-commerce market is projected to grow from ? 17.7 trillion in 2025 to ? 27.3 trillion by 2029, registering a CAGR of 11.5%. Driven by increasing digital adoption, this growth is expanding consumer access to brands and supporting demand across the textile and apparel sector

?€? Omnichannel retail expansion: While traditional retail channels continue to anchor consumer purchases, the rapid rise of quick commerce is reshaping the retail landscape. The quick commerce market in India is projected to reach

3-4 trillion by 2030, creating new avenues for consumer engagement and enhancing product accessibility across markets

Government impetus

The Government of India strengthened support for the textile and apparel sector in 2025 through a 1 9% increase in budgetary allocation to ? 5,272 crore, validating its focus on modernisation, sustainability and export- led growth. Policy measures included a revised PLI Scheme with lower investment thresholds, a ? 600 crore Cotton Mission, continued raw cotton import duty relief and sustained emphasis on technical textiles under the National Technical Textiles Mission (NTTM). Additionally, the extension of the Samarth Scheme further enhanced workforce development, while Bharat Tex 2025 showcased Indias growing stature as a trusted and high-quality global textile sourcing hub.

(Source: Textile Sphere India)

COMPANY OVERVIEW

Kewal Kiran Clothing Limited (hereafter mentioned as KKCL or the Company) embarked on its journey in 1992 and has, over the years emerged as one of Indias leading fashion and lifestyle company. The Company has established a strong presence on the back of differentiated offerings spanning the apparel value chain. The various brands operating under the purview of the Company are Killer, Integriti, Lawman, Easies and Junior Killer. The Company has also reinforced its strength in the womens denim and casualwear segment on the back of the 50% stake acquisition in Kraus Casuals Private Limited.

The Company is a strong homegrown brand with a strong recall and a diversified portfolio, ensuring lesser dependency on seasonal trends. The Company has its state-of-the-art

manufacturing facility based out of Mumbai, Daman and Vapi with a strong focus on quality excellence. The ISO 9001:2015 and ISO 45001:2018 certification validates the Companys focus on quality management.

FINANCIAL REVIEW Revenues

FY26 saw the Company delivering its highest-ever operating revenue of ? 1,212.8 crore compared to ? 1,002.8 crore in FY25, registering a y-o-y growth of 20.9%. This performance was primarily driven by a strong growth in volumes and healthy pricing, reflecting quality growth. Enhanced product offerings, strong consumer acceptance and disciplined inventory management further supported by business growth across key markets. This record performance validates the resilience of the Companys business model and provides a strong platform for sustained growth and value creation in the years ahead.

Costs

Cost of Goods Sold (COGS)

Cost of Goods Sold (COGS) comprises raw material consumption, purchase of traded goods, inventory movements and manufacturing-related operating expenses. The fiscal saw COGS increasing to ? 701.2 crore from ? 586.2 crore in FY25. However, COGS as a percentage of revenue from operations reduced to 57.8% in FY26 compared to 58.5% in FY25. The improvement was primarily driven by improved operating efficiencies and favourable pricing power.

Employee benefit expenses

During the year, the employee benefit expenses of the Company increased to ? 171.5 crore compared to ? 136.4 crore in FY25. Consequently, employee benefit expenses as a percentage of revenues saw a slight increase from 13.6% in FY25 to 14.1% in

Management Discussion and Analysis (Contd.)

FY26. The increase was driven by a larger operating base, Kraus Casuals Private Limited team consolidation, higher production and factory-linked expenses, retail expansion and annual increments across the organisation.

Selling and distribution expenses

The selling and distribution expenses during the year stood at ? 55.8 crore compared to ? 49.0 crore in FY25. Though the absolute number has increased, as percentage of revenues, the expense has come down from 4.9% in FY25 to 4.6% in FY26, reflecting operating leverage even as the Company continued to invest in channel expansion, trade-facing visibility, marketing initiatives and consumer engagement. The Company continues to calibrate brand and distribution spends based on seasonality, channel requirements and expected returns.

Administrative and other expenses

The administrative and other expenses in FY26 increased to ? 46.4 crore, from ? 40.4 crore in FY25. Despite the increase in absolute cost, the expense as a percentage of revenues moderated from 4.0% in FY25 to 3.8% in FY26, reflecting scale benefits and disciplined overhead management despite the absolute cost increase which was primarily aligned to a larger business base, professional and operational support requirements and continued investment in systems and processes.

Profitability

EBITDA and EBITDA margin

The Companys EBITDA (operating profit) stood at ? 237.9 crore in FY26 compared to ? 190.6 crore in FY25. Additionally, the EBITDA margin (operating profit margin) also increased from 19.0% in FY25 to 19.6% in FY26, surpassing the guided range of 17-18%. The execution-led operational discipline of the Company enabled it to grow at scale while protecting profitability, demonstrating

the benefit of operating leverage, improved gross margin, cost discipline and a healthier mix of channels and categories even as the Company continued to invest behind brands, retail and distribution.

PBT

Profit Before Tax (PBT) for FY26 stood at ? 202.7 crore compared to ? 197.6 crore in FY25, registering a y-o-y growth of 2.6%.

PAT and PAT margin

Profit After Tax (PAT or net profit) for the year stood at ? 152.3 crore compared to ? 149.2 crore in FY25. However, the PAT margin (net profit margin) declined from 14.2% in FY25 to 12.3% in FY26. PAT margin for the year moderated due to lower other income in FY26 as compared to FY25. Last financial year, there was a monetisation of part of our Investment in shares of Baazar Style Retail Limited, in IPO-OFS which lead to a one time gain of around ? 10.5 crore, contributing to a rise in Other Income reflected in FY25. Further, the Other Income fell in FY26 on account of market vagaries. There has been a moderation in the capital gains as well as fair valuation of Investments.

EPS

Earnings Per Share (EPS) for the year stood at ? 23.03 compared to ? 23.4 in FY25.

ROE

Return on Equity (ROE) for the year stood at 17.3% compared to 20.0% in FY25.

ROCE

Return on Capital Employed (ROCE) for the year stood at 22.7% compared to 24.3% in FY25.

Financial position and cash flows

The Companys liquidity position remained strong during FY26, supported primarily by robust cash flows from operations. Liquidity requirements were met through internally-generated funds and were directed towards working capital needs, manufacturing operations, employee costs and marketing expenditure, among others.

As of March 31,2026, the Company maintained a healthy liquidity position of ? 352.6 crore, comprising cash and cash equivalents, bank balances and investments, compared to ? 340.0 crore on March 31, 2025. This liquidity was achieved against a reduction in total debt from ? 108.0 crore as on March 31,2025 to ? 47.9 crore as on March 31, 2026. The year also saw the Companys interest coverage moderating from 20.5x in FY25 to 15.0 in FY26 on one hand, while the debt-to-equity ratio improved from 0.20x in FY25 to 0.14x in FY26 on the other.

This performance speaks volumes about the Companys strong financial discipline and prudent capital management. The Companys disciplined financial management and cash conservation practices provided resilience against potential external uncertainties.

As a testimony to its financial prudence, the Company was also able to reduce its working capital cycle (as pegged to operating revenues) cycle slightly from 157 days in FY25 to 147 days in FY26.

Debtor cycle as pegged to operating revenues during the fiscal stood at 95 days compared to 94 days in FY25. This resulted in a debtor turnover ratio of 3.82x in FY26 compared to 3.89x in FY25. The year also saw inventory turnover ratio (as pegged to operating revenues) standing at 5.03x compared to 6.54x in FY25.

CREDIT RATING

CRISIL reaffirmed the Companys long-term bank facility rating at CRISIL AA-/Stable in June 2026. The reaffirmation reflects the Companys established domestic menswear position, recognised brands, diversified geography and channels, healthy financial risk profile and strong liquidity. The rating also validates KKCLs prudent capital structure and debt-servicing capacity.

BRAND REVIEW

The Company offers a diverse range of apparels and accessories under the purview of its brands, namely Killer, Integriti, Lawman, Easies, Junior Killer and Kraus Jeans. The Companys range of brands span across the premium, semi-formal, direct-to- consumer (D2C), mid-market, kidswear and womens casualwear categories. The Company caters to the diverse and ever-evolving needs of men, women and children across multiple product categories and price points.

The Company believes that strong brands drive consumer aspiration, support premiumisation and foster long-term customer loyalty. Backed by growing brand recognition and recall, the Company has successfully transformed from a denim- focused business into a diversified lifestyle player with a broad appeal across age groups, genders and consumer segments.

Our portfolio of brands as detailed below resonate with the attitude and aspirations of todays youth, cementing our position as a trusted and long-term player in branded fashion:

Killer

This is the flagship brand of the Company catering to the youths denim aspirations. The brand has a powerful and iconic recall and is regarded as one of the established denim brands in the country. Killer sustained its growth journey during the year with a strong presence across 457 exclusive brand outlets (EBOs).

Integriti

This mid-market brand enables the Company to cater to the work and casualwear requirements of the customers. The growth in sales was driven by renewed focus on the brand and the targeted brand-building efforts of the Company.

Lawman

This is a fast fashion brand of the Company aimed at the young adults and their ever-evolving needs. With the strategic repositioning towards direct to customers (D2C) model, the brand has started showing positive traction and consumer acceptance, operating across 80 EBOs.

Easies

This is a brand with a blend of classic and contemporary preferences, reshaping corporate fashion in India through its range of semi-formal menswear. It is a well-established brand known for its collection of chinos and shirts, and has a dedicated customer following supported by the increasing trend of semiformal wear.

Junior Killer

Built on the flagship brand of the Company, Junior Killer caters to the kidswear segment, focused on boys. Supported by disciplined execution and a focused entry plan, the brand has achieved sustained growth.

Kraus Jeans

This is a brand specialising in womens denim and casualwear. The brand is on track to evolve as a significant player in the womens casualwear market. The brand has been gaining traction in the multi-brand outlets (MBOs) and has also scaled its presence across 28 EBOs. With its focus on improving working capital cycle, the brand delivered robust sales and EBITDA margin growth.

Management Discussion and Analysis (Contd.)

PRODUCT-WISE PERFORMANCE

The Company has gradually evolved from a denim-focused business into a diversified lifestyle brand powerhouse. This is a result of strategic expansion and diversification of its product portfolio to address a wider consumer base across different age groups, genders and price points. This transformation has strengthened brand aspiration, enhanced customer engagement and increased wallet share. Today, the Company offers a comprehensive range of apparel spanning both bottom wear and

top wear categories, including jeans, trousers, shirts, T-shirts, winterwear and wide range of accessories, catering to diverse consumer preferences and occasions.

The year saw a total sales of 180.1 lakh units with a sales realisation of ? 668 per unit in FY26 compared to total sales of 167.8 lakh units with a sales realisation of ? 595 per unit in FY25. The diversification of the portfolio was further validated by the proportion of sales carved by apparel units in FY26 pegged at 72% compared to 66.7% in FY25.

Product category	FY26 share of sales	FY25 share of sales	Annual interpretation
Jeans	48%	46%	Core category and strongest expression of KKCLs denim franchise.
Shirts	22%	21%	Second-largest category, supporting topwear depth and lifestyle positioning.
Trousers	10%	12%	Part of bottomwear breadth across semi-formal and casual occasions.
T-shirts	6%	6%	Stable casualwear category across youth and lifestyle consumption.
Others	13%	15%	Includes accessories and adjacent categories.

The performance of its various product categories during the fiscal are below.

Jeans

Jeans carves the lions share of Companys sales. The contribution of sales from jeans during FY26 stood at 48% compared to 46% in FY25. Total sales from jeans during FY26 stood at ? 581.4 crore, up from ? 462.8 crore in FY25.

Shirts

Shirts carve the second-highest share of Companys sales. The contribution of sales from shirts during FY26 stood at 22% compared to 21% in FY25. Total sales from shirts during FY26 stood at ? 261.3 crore, up from ? 209.2 crore in FY25.

Trousers

The contribution of sales from trousers during FY26 stood at 10% compared to 12% in FY25. Total sales from trousers during FY26 stood at ? 126.3 crore, up from ? 120.8 crore in FY25.

T-shirts

The contribution of sales from T-shirts during FY26 stood at a steady 6%, same as the previous year. Total sales from shirts during FY26 stood at ? 77.9 crore, up from ? 58.9 crore in FY25.

SALES AND DISTRIBUTION CHANNEL

The Company has built a diversified and scalable distribution ecosystem that combines Exclusive Brand Outlets (EBOs), Large Format Stores (LFS), Multi-Brand Outlets (MBOs), e-commerce platforms and exports. This multi-channel approach enables wider market penetration, strengthens brand visibility and supports sustainable growth while maintaining prudent control over inventory and credit risks.

A strong network of long-standing channel partners continues to underpin the Companys market presence. At the same time, the Company is expanding its footprint across organised retail, digital channels and national lifestyle chains to enhance consumer access and capture emerging growth opportunities. The continued expansion of its EBO network across company- operated and franchise-led formats remains a key strategic priority, driving brand building, customer engagement and revenue diversification.

On the channel of sales front, the Companys EBO, large format stores, MBO and online channel reported healthy double-digit growth in FY26, validating the effectiveness of its go-to-market strategy. Revenue grew 24.0% y-o-y and non-retail grew 16.7% y-o-y, underscoring consistent broad-based momentum across formats.

As of March 31, 2026, the Companys distribution network comprised 666 EBOs compared to 609 EBOs in the previous year. The year saw net addition of 57 EBOs across Killer, Lawman and Kraus. Additionally, the Companys diversified distribution network comprised 80+ distributors covering over 4,000+ MBOs, presence across more than 2,700 counters in large format stores and a robust presence across major e-commerce platforms, providing extensive reach across the country.

Going forward, the Company remains focused on optimising its channel mix to balance growth, profitability and cash generation. Leveraging its growing retail footprint and strong brand equity, the Company will continue to pursue disciplined expansion while maintaining prudent receivables management and limiting concentration risks, thereby enhancing resilience and supporting long-term value creation.

Particulars	FY26 data	Strategic relevance
Total EBOs	666	Wider branded retail footprint as of March 31, 2026.
Net EBO additions	57	Disciplined expansion during the year.
Killer EBOs	457	Largest brand-specific retail base and anchor of store scale.
K-Lounge stores	93	Multi-brand retail format supporting portfolio discovery.
Lawman + Integriti EBOs	87	Supports the Companys D2C, value and mid-market propositions.
Kraus EBOs	28	Women-centric retail expansion after first full year of consolidation.

Particulars	FY26 data	Strategic relevance
Factory outlet	1	Outlet format for specific inventory and retail requirements.
MBO reach	80+ distributors covering 4,000+ MBOs	Deepens trade reach across India.
LFS reach	2,700+ counters	Enhances visibility in modern retail and chain stores.
EBO city/town reach	350+ cities and towns	Strengthens penetration beyond metros.

MANUFACTURING, SUPPLY CHAIN AND VALUE CHAIN

KKCLs integrated value chain is one of the most important reasons the Company has been able to scale with quality and margin discipline. The model connects design, merchandising, sourcing, manufacturing, warehousing, packaging, logistics, distribution and retail into one operating loop. This allows the Company to convert trend insights into commercially relevant collections with better control over cost, quality and delivery.

The Companys manufacturing operations are supported by units across Mumbai, Vapi and Daman with an aggregate area of approximately 3.30 lakh sq. ft . Strategic operations are retained in-house to preserve quality and speed, while less critical activities are selectively outsourced to improve efficiency and flexibility.

The value chain is also supported by a strong design and merchandising process. Teams track domestic and international

trends, evaluate consumer feedback through stores and trade shows and translate these inputs into collections suited to each brands positioning. This connection between market insight and manufacturing execution is particularly important in fashion categories, where freshness, fit, timing and availability determine sell-through.

Sustainability and efficiency are embedded into operating practices through certified green chemicals, latest blue technology, energy conservation measures and ozone systems for denim washing. These initiatives support responsible manufacturing while also strengthening process consistency. As the brand portfolio expands, the integrated backbone will remain central to maintaining product quality, faster response and margin resilience.

MARKETING AND CONSUMER ENGAGEMENT

FY26 marketing and consumer engagement were focused on building confidence across the trade network, increasing consumer visibility and sharpening brand relevance. For KKCL, marketing is not only campaign-led. It also operates through retail experience, product storytelling, trade shows, social media, visual merchandising and direct consumer feedback.

Trade shows continued to be important business-building platforms. The Spring-Summer and Autumn-Winter trade shows received encouraging responses across key brands including Killer, Easies, Kraus, Junior Killer and Integriti. These events helped improve visibility on bookings, enabled better inventory planning and strengthened channel partner confidence ahead of selling seasons.

The Company also continued to use brand-led communication, advertising, social media and store-led interactions to build consumer connection. Its association with the Asia Cup during the year added visibility, while brand-specific activities supported the distinct positioning of Killer, Easies Kraus, Lawman, Integriti and Junior Killer.

Stores remain important consumer insight centres for the Company. Retail performance, product trials, fit feedback, pricing response and merchandising outcomes help management refine assortment and demand planning. This feedback loop strengthens the Companys ability to launch sharper collections and manage inventory more effectively.

OUTLOOK, OPPORTUNITIES AND THREATS

The outlook for Indias branded fashion and apparel industry remains constructive, supported by rising incomes, favourable demographics, increasing fashion consciousness, greater digital access and the steady formalisation of retail. Tier II and III markets, modern trade, omnichannel retail and category-led expansion are expected to create meaningful opportunities for organised players with strong brands and execution capabilities.

KKCL enters FY27 with a stronger base for Vision 2028. Revenue from operations reached ? 1,212.8 crore in FY26, ahead of the average growth trajectory originally envisaged under the Vision 2028 plan. The Company remains focused on reaching ? 1,500 crore revenue by FY28, supported by organic growth, sharper brand roles, EBO expansion, product diversification and disciplined capital allocation.

Management has indicated an organic growth ambition of 1518% with potential for a higher growth trajectory if suitable inorganic opportunities are added to the platform. For FY27, net EBO additions are expected to be around 50-70 stores. Growth investments are expected to continue across stores, manufacturing, technology, brand building and working capital, funded by a strong balance sheet and internal accruals.

The Companys opportunities lie in scaling Killers flagship strength, accelerating Kraus in womens casualwear, building Junior Killer in boyswear, sharpening Lawman as a D2C fast-fashion brand, improving Integritis value- led proposition and widening the role of Easies in semi-formal wear. The channel opportunity remains equally important, with retail, LFS, MBO, e-commerce and export channels giving the Company multiple routes to tap consumer.

At the same time, KKCL remains mindful of risks from discretionary consumption volatility, raw material price fluctuation, intense competition, fashion trend changes, export uncertainty, store rollout execution and working capital management. The Companys response will remain anchored in design-led freshness, portfolio diversification, channel discipline, prudent receivables management, strong liquidity and a measured approach to growth.

RISK MANAGEMENT Approach to risk management

Risk management forms a core pillar of the Companys governance and decision-making framework. The Company follows a structured and proactive approach to identifying, assessing and mitigating risks across its business operations, enabling it to navigate uncertainties while pursuing growth opportunities. Oversight of the risk management process is exercised by the Board and its Committees, with management ensuring that risk considerations are integrated into strategic planning, operational execution and capital allocation decisions.

Risk management framework

The Risk Management Committee, comprising seven experienced members of the Board and Senior Management, provides strategic oversight of the Companys risk management framework. The Committee periodically reviews key enterprise risks, assesses their potential business impact and monitors the effectiveness of mitigation strategies to ensure sustained organisational resilience.

The Company has also established an integrated enterprise risk management framework that enables the systematic identification, assessment, mitigation and monitoring of risks across operations. Embedded within the governance structure, this framework supports informed decision-making, enhances preparedness for emerging challenges and safeguards the achievement of long-term business objectives.

Key responsibilities of the risk management committee

?€? Framing of risk management plan and policy

?€? Provide oversight of the Companys risk management plan, ensuring alignment with strategic priorities and operational objectives

?€? Review and approve credit proposals in line with established risk and credit management policies

?€? Guide the identification, assessment and management of key business risks, including emerging and evolving risk factors

?€? Evaluate and enhances risk assessment methodologies, monitoring systems and reporting mechanisms to support informed decision-making

?€? Reviews the effectiveness of risk mitigation measures, internal controls and governance processes

?€? Periodically assesses the Companys overall risk profile and its potential impact on business performance, growth and continuity

?€? Reviews risk monitoring reports, credit exposures and mitigation initiatives and provides recommendations to the Board and senior management

?€? Promotes a strong risk-aware culture by encouraging accountability, transparency and disciplined risk-taking across the organisation

Risks and mitigation measures
Risk	Description	Mitigation strategy
Economic risk	Adverse macroeconomic conditions may affect demand trends, execution schedules and the pace of business growth.	The Government\u2019s sustained focus on the textile and apparel sector supported by incremental budgetary allocations and PLI scheme, among others, have played a pivotal role in helping the Indian textile and apparel sustain growth despite the global geopolitical turmoil.
Quality risk	Inconsistent quality performance may affect stakeholder trust, market reputation and long-term business growth.	The brand is synonymous with quality and treats quality as an integral element to the Company\u2019s success. The quality consistency is supported by robust quality control systems, stringent testing protocols and comprehensive material validation processes. The Company\u2019s ISO 9001:2015 and ISO 45001:2018 certification reflects the strength of its quality management systems.
Product risk	Too much dependence on one category of products can impact profitability due to changing taste and preference of customers.	The Company has diversified its product portfolio over the years and has evolved from a denim- focused business into a diversified lifestyle brand. This is a result of strategic expansion and diversification of its product portfolio to address a wider consumer base across different age groups, gender and price points.
Raw material risk	Availability and fluctuation in price of raw materials can adversely impact profitability of companies.	The geopolitical scenario across the world is expected to put a minor impact on the Company\u2019s margins. However, KKCL is focused on maintaining its topline and not losing market share. The Company will try to pass on some of the price impact on to the customers. Additionally, on the back of the enduring relationships the Company maintains with its suppliers, quality and price of materials generally remain under checks.
Human resource risk	Challenges in attracting, training and retaining skilled talent could impact operational efficiency and long-term business performance.	The Company recognises its workforce as a key driver of sustainable growth and organisational success. Its people strategy focuses on building a skilled, engaged and future-ready talent pool through continuous learning, capability enhancement and leadership development initiatives. Supported by robust talent management, succession planning and employee retention practices, the Company remains well-positioned to meet evolving business requirements and sustain longterm growth.
Finance risk	Inability to meet funding requirements may impact operations and in turn, topline of a company.	The Company places strong emphasis on maintaining a healthy liquidity position and efficient working capital cycle. KKCL maintained a healthy liquidity position backed by a strong debt equity ratio and good credit rating which further validated the Company\u2019s strong debt profile.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a robust internal control and risk management framework designed to support sustainable growth, safeguard assets and strengthen long-term stakeholder value. Embedded across the organisation, the framework comprises well-defined policies, processes, controls and governance mechanisms that facilitate effective risk management and informed decision-making.

The Companys internal control framework is built on the following key pillars:

?€? Strategic planning and performance review: Periodic business planning and performance evaluations to ensure alignment with organisational objectives and long-term growth priorities

?€? Risk assessment and monitoring: Continuous identification and evaluation of key risks and opportunities to support proactive decision-making and business resilience

?€? Governance and delegation framework: Clearly defined organisational responsibilities and authority matrices that promote accountability and effective decision-making

?€? Control enhancement: Regular review and strengthening of internal controls to address evolving business requirements and emerging risks

?€? Process excellence: Standardised policies and operating procedures designed to improve efficiency, consistency and operational effectiveness

?€? Regulatory and compliance oversight: Robust mechanisms to monitor compliance with applicable laws, regulations and internal policies

?€? Investment and capital allocation framework: Defined evaluation parameters for assessing new business opportunities and capital expenditure proposals, ensuring disciplined resource allocation and value creation

?€? Management information systems: Comprehensive reporting systems that provide timely, accurate and actionable information to support effective decision-making and performance monitoring

?€? Internal audit and review: An independent internal audit function, supported by periodic management reviews and established policies, to assess control effectiveness and drive continuous improvement

The internal control system is commensurate with the scale and complexity of the Companys operations and is designed to ensure the integrity of financial reporting, operational efficiency, regulatory compliance and protection of assets. Regular reviews, internal audits and management oversight help evaluate the effectiveness of controls and identify opportunities for continuous improvement. Supported by documented policies and standard operating procedures, the framework promotes accountability, enhances transparency and ensures that business transactions are appropriately authorised, recorded and monitored.

The Companys internal audit function is conducted by an independent firm of Chartered Accountants, which periodically reviews the effectiveness of internal controls, risk management processes and compliance mechanisms. The Audit Committee provides oversight by regularly evaluating audit findings and monitoring the implementation of corrective actions to further strengthen the control environment.

A robust Management Information System supports timely reporting, performance monitoring and informed decision-making across the organisation. The Company continues to enhance its governance framework through the ongoing refinement of policies, processes and risk management practices, ensuring a strong and resilient internal control environment.

HUMAN RESOURCES

The Company believes that its people are its greatest strength and a key enabler of sustainable growth. During FY26, the human resources function remained focused on attracting, developing and retaining talent while fostering a culture of collaboration, accountability and high performance. As on March 31,2026, the Company employed 1,868 people

The Company continued to strengthen its talent acquisition efforts to support business expansion across retail, manufacturing and corporate functions. Learning and development remained a key priority, with employees participating in various technical, functional, behavioural and leadership development programmes designed to enhance capabilities and prepare them for future roles.

Employee engagement initiatives were undertaken throughout the year to promote an inclusive and positive work environment, encourage open communication and recognise individual and team contributions. The Company also continued to focus on employee well-being through health and wellness initiatives, safe working practices, employee benefits and a robust grievance redressal mechanism, reinforcing its commitment to creating a supportive workplace.

The Companys retention strategy is centred on providing meaningful career opportunities, performance-based rewards, continuous learning and an engaging work environment. By investing in its people and nurturing a culture of continuous improvement, the Company aims to build a future-ready workforce capable of supporting its long-term growth objectives and delivering sustained value to all stakeholders.

As KKCL scales towards Vision 2028, people capability will remain central to execution. The Companys ability to build store-level service quality, strengthen manufacturing productivity, support sharper merchandising and integrate new teams such as Kraus will be important for sustaining growth with discipline.

TECHNOLOGY

The Company believes that a robust technology backbone is essential to operational efficiency, productivity, inventory management and business scalability. KKCLcontinues to build and improve its IT capabilities across procurement, production, order processing, billing, finance, payroll, warehouse management, B2B distribution and B2C retail operations.

The Company uses Logic ERP as an end-to-end solution across purchase order management, goods inward processing, production job orders, sales orders, delivery orders, ready-for- dispatch processing, invoicing, e-way bill and e-invoice generation, payroll, finance and accounts. The ERP is linked with production and payroll processes, enabling efficient recording of material movement, tailor payments, wages and accounting entries.

The warehouse management system supports structured inventory management, racking, stacking and faster product location, thereby improving order processing and delivery accuracy. Separate systems for B2B distribution and B2C POS operations support channel-specific sales, inventory, schemes, offers, online discount approvals and invoicing. These technology applications, combined with network security and disaster recovery infrastructure, support operational continuity and future scalability.

Further, the Company has implemented EShipz logistics software for consignment tracking and automatic generation of LR documents, integrated with Logic ERP to enable automatic posting of transport data in the ERP system. The Eazy Rewardz CRM programme is also integrated with Logic POS to support customer engagement and loyalty management at the retail level. In addition, the Company uses RPA bots for data compilation, report generation and automation of repetitive data entry and conversion tasks, thereby reducing manual effort and improving accuracy and turnaround time.

CAUTIONARY STATEMENT

This discussion contains certain forward-looking statements within the meaning of applicable securities laws. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflects managements analysis describing our objectives and expectations based on certain information and assumptions. Our operations are dependent on various internal and external factors within and outside the control of the management. We assume no responsibility in respect of the forward-looking statements herein, which may undergo changes in future on the basis of subsequent developments, information or events. Actual results may differ from those expressed or implied herein.