Kizi Apparels Ltd Management Discussions

The management of the Company is pleased to present its report on the business environment & industry scenario, industry risks and opportunities and Companys performance during the financial year 2025 -26.

The global economy continued to operate in a complex and evolving environment during FY 2025-26, influenced by geopolitical uncertainties, changing trade policies, supply-chain realignment, inflationary pressures and shifts in consumer demand. Despite these challenges, global trade and consumption remained resilient across several major markets. The textile and apparel industry continued to benefit from population growth, rapid urbanisation, rising disposable incomes, expansion of organised retail and e-commerce, and increasing consumer preference for branded, functional and sustainable products.

The global textile and apparel industry is undergoing significant structural transformation, driven by technological advancement and increasing emphasis on sustainable manufacturing. Technologies such as Artificial Intelligence (AI), automation, robotics, digital printing, Internet of Things (IoT), data analytics and smart manufacturing are increasingly being adopted across the textile value chain to improve productivity, strengthen quality control, reduce material wastage, optimise inventory management and enhance overall operational efficiency. At the same time, international brands and retailers are placing greater emphasis on environmentally responsible manufacturing, recycled and sustainable materials, and reduction of carbon emissions, water conservation, renewable energy and greater supply-chain transparency.

Global sourcing patterns are also witnessing gradual diversification as international brands seek to reduce dependence on individual manufacturing locations and build more resilient supply chains. The continuing "China plus One" sourcing strategy has created significant opportunities for alternative manufacturing destinations, particularly India. Supported by its strong textile manufacturing base, availability of raw materials, skilled workforce, competitive production capabilities and improving infrastructure, India is well positioned to strengthen its participation in the global textile and apparel supply chain and capture emerging opportunities in international markets.

India continued to demonstrate resilience during FY 2025-26, supported by strong domestic consumption, infrastructure development, manufacturing activity, digitalisation and policy initiatives aimed at strengthening investment and production capabilities. The textile and apparel industry remains an important contributor to the Indian economy through manufacturing, exports, employment generation and rural livelihoods. India possesses an integrated textile value chain covering fibres, yarn, fabrics, processing, garments, home textiles, handicrafts and technical textiles, supported by abundant raw-material availability, established manufacturing clusters and a large skilled workforce.

During FY 2025-26, Indias exports of textiles and apparel, including handicrafts, stood at approximately Rs.3,25,339 crore as against Rs.3,19,573 crore during FY 2024-25, registering growth of approximately 1.8%. Ready-made garments remained the largest export category at approximately Rs.1,39,350 crore, while man-made textiles and cotton textile exports stood at approximately Rs.46,254 crore and Rs.1,02,427 crore, respectively. Indias textile exports continued to reach a diversified range of international markets, including the United States, Bangladesh, the United Arab Emirates, the United Kingdom and major European countries, demonstrating the sectors resilience despite global demand fluctuations, input-cost pressures and trade- related uncertainties.

Government initiatives such as the PM Mega Integrated Textile Regions and Apparel (PM MITRA) Parks Scheme, Production Linked Incentive (PLI) Scheme for Textiles, National Technical Textiles Mission, SAMARTH, RoSCTL and RoDTEP continue to support investment, infrastructure development, value addition, skill development and export competitiveness. Further, the India-United Kingdom Comprehensive Economic and Trade Agreement (CETA), providing duty-free access to almost 99% of Indias exports to the UK, is expected to create significant opportunities for labourintensive sectors, including textiles and apparel. Supported by favourable policies, improving infrastructure and greater access to international markets, the Indian textile and apparel industry remains well positioned for sustainable long-term growth.

The Indian textile and apparel industry is undergoing significant transformation, driven by increasing emphasis on technology, value addition, sustainability and market diversification. The sector is progressively expanding beyond conventional textile manufacturing towards branded apparel, man-made fibres, technical textiles, performance fabrics and other specialised products. Sustainable manufacturing has also gained considerable importance, with global customers increasingly evaluating suppliers on environmental performance, responsible sourcing and supply-chain transparency. Consequently, Indian manufacturers are investing in renewable energy, water-efficient manufacturing systems, recycling, environmentally friendly materials and recognised sustainability standards.

Technology adoption continues to be a major driver of the industrys transformation. Automation, Artificial Intelligence (AI), Internet of Things (IoT), digital printing, Enterprise Resource Planning (ERP) systems, data analytics and automated manufacturing processes are enabling businesses to improve productivity, minimise material wastage, enhance product quality and achieve faster order fulfilment. Technical textiles also represent an important growth opportunity, with increasing demand for specialised textile products across healthcare, automotive, construction, agriculture, defence, infrastructure and industrial applications. Continued investment in research, innovation and manufacturing capabilities is expected to support further diversification into higher-value textile products.

The domestic apparel market is also evolving rapidly with the expansion of organised retail, e-commerce, social commerce and Direct-to-Consumer (D2C) brands, enabling manufacturers to reach consumers directly and respond more effectively to changing preferences and fashion trends. At the same time, diversification of global sourcing provides India with opportunities to strengthen its position in international textile and apparel supply chains. Supported by competitive manufacturing capabilities, availability of raw materials, skilled manpower, improving infrastructure and government initiatives, India remains well positioned to capture emerging opportunities and increase its participation in the global textile and apparel market.

The operating environment for the textile industry continues to be influenced by global demand conditions, fluctuations in raw-material prices, foreign-exchange movements, freight costs, geopolitical developments and evolving international trade policies. While these factors may result in short-term volatility, Indias strong domestic market and diversified manufacturing capabilities provide structural support to the sector. Government initiatives such as PM MITRA Parks and the Production Linked Incentive (PLI) Scheme are expected to strengthen integrated manufacturing infrastructure, improve economies of scale and encourage investment in man-made fibre apparel, fabrics and technical textiles, thereby enhancing Indias competitiveness in global markets.

The industry continues to face challenges including intense international competition, changing fashion cycles, fluctuations in cotton and other input costs, compliance requirements, availability of skilled labour and evolving sustainability standards. At the same time, rising disposable incomes, rapid urbanisation, a growing young consumer base, expansion of organised retail and increasing adoption of digital commerce provide significant growth opportunities. The convergence of traditional retail, e-commerce and Direct-to-Consumer (D2C) models is further transforming the market, while continued focus on operational efficiency, technology adoption, working-capital management and product diversification is expected to support the industrys sustainable long-term growth.

The medium- to long-term outlook for the Indian textile and apparel industry remains positive, supported by growing domestic consumption, export diversification, policy support, technological advancement and Indias increasing integration with global supply chains. The India-UK CETA, expanding trade relationships and export- promotion initiatives are expected to create additional opportunities for Indian manufacturers, particularly in technical textiles, man-made fibres, sustainable garments, performance fabrics and branded apparel. Increasing investments in automation, digitalisation, research and development, renewable energy and sustainable manufacturing are also expected to strengthen the industrys competitiveness. While global economic uncertainties, geopolitical developments, fluctuations in raw-material prices, currency movements and changing consumer preferences may continue to pose challenges, Indias integrated textile value chain, strong raw-material base, skilled workforce, growing domestic market and improving manufacturing infrastructure provide a strong foundation for sustainable growth. With continued focus on quality, innovation, value addition, technology and sustainability, India is well positioned to further strengthen its position as a major global textile and apparel manufacturing and sourcing destination.