Lorenzini Apparels Ltd Management Discussions

The management of Company has reviewed the Companys performance and key business developments for the financial year ended March 31, 2026 and shared its perspective on the road ahead. The outlook reflects the current economic environment and business landscape, though future developments both domestic and global across economic, social, and political fronts may influence actual outcomes.

Global Economy Overview

The global economy demonstrated resilience in 2025 despite operating in a challenging and uncertain environment. According to the International Monetary Fund (IMF) World Economic Outlook (April 2026), global GDP grew by 3.3% in 2025. Assuming geopolitical conflicts remain limited in duration and scope, global growth is projected to moderate to 3.1% in 2026 before improving slightly to 3.2% in 2027. Global headline inflation is expected to rise modestly in 2026, followed by a gradual decline in 2027.

While these projections reflect continued economic stability, they also indicate a more moderate pace of growth compared to historical trends. Sectorally, the global services industry remained a key driver of economic expansion, whereas the manufacturing sector experienced subdued performance, particularly across Europe. Elevated trade policy uncertainty and the increasing adoption of protectionist measures by major economies continue to pose challenges to global trade and investment flows.

Indian Economy Overview

According to the International Monetary Fund (IMF) World Economic Outlook (April 2026), Indias economy is projected to grow by 6.5% in FY2026 27, reflecting strong private consumption, continued infrastructure spending, and resilient investment activity. Similarly, the Reserve Bank of India (RBI) projects GDP growth of 6.6% for FY2026 27, while acknowledging downside risks arising from geopolitical developments, higher energy prices, and weather-related uncertainties.

The services sector is expected to remain the principal driver of economic growth, supported by continued expansion in digital services, financial services, and information technology. Manufacturing is expected to benefit from ongoing government initiatives, including the Production Linked Incentive (PLI) Scheme, infrastructure investments, and supply chain diversification, while agriculture is likely to remain supported by policy measures despite climate-related risks.

Textile Market Summary

The global textile market size was valued at USD 1,160 billion in 2025 and is projected to grow from USD 1,210 billion in 2026 to USD 1,610 billion by 2033, at a CAGR of 4.2% from 2026 to 2033. Asia Pacific dominated the global market, accounting for the largest revenue share of 49.9% in 2025. The demand for textiles is rising due to fast fashion, growing urbanization, and increasing disposable incomes in emerging economies.

Indias textile and apparel industry remains one of the countrys largest and most significant manufacturing sectors, contributing around 2% to GDP and 11% to manufacturing Gross Value Added (GVA) while providing employment to over

45 million people. The industry continues to benefit from Indias strong raw material base, skilled workforce, competitive manufacturing costs, and supportive government policies.

The domestic textile and apparel market, estimated at US$ 225 billion in 2025, is expected to grow at a CAGR of 10 12%, reaching approximately US$ 350 billion by 2030, driven by rising disposable incomes, rapid urbanisation, increasing e-commerce penetration, and changing consumer preferences. On the global front, Indias textiles and apparel exports stood at US$ 37.8 billion in FY2025, with the Government targeting US$ 100 billion in exports by 2030 through various policy initiatives and infrastructure development.

The ready-made garments (RMG) segment continues to be the largest contributor to textile exports, accounting for nearly 45% of Indias total textile and apparel exports during FY2026 (April February). Global sourcing trends such as the "China plus One" strategy, coupled with improving demand in key international markets, are expected to support sustained growth in Indias apparel exports.

The industry is also witnessing significant policy support through initiatives such as the Production Linked Incentive (PLI) Scheme, PM MITRA Mega Textile Parks, and the Samarth Scheme, which aim to enhance manufacturing capacity, improve competitiveness, strengthen integrated textile infrastructure, and develop skilled manpower. Recent trade agreements, including the India UK Free Trade Agreement, are expected to further enhance export opportunities by providing duty-free market access for a majority of Indian textile products.

Despite favourable long-term fundamentals, the industry continues to face challenges such as volatile raw material prices, fluctuations in global demand, supply chain disruptions, and increasing sustainability requirements. Nevertheless, supported by robust domestic consumption, favourable demographics, expanding export opportunities, and continued government focus on infrastructure and manufacturing, the Indian apparel industry is well positioned for long-term growth and remains an important contributor to the countrys economic development.

BUSINESS OPERATIONS OF THE COMPANY

The Company is committed to delivering high-quality products while maintaining a strong customer-centric approach. Quality assurance remains a key focus across all stages of its operations, enabling the Company to consistently meet customer expectations and strengthen the reputation of its brand in the market. The Company has established long-term strategic relationships with select customers in the domestic market, which has contributed to sustaining its competitive position within the industry.

The Company markets its products through multiple sales channels, including retail stores and e-commerce platforms, ensuring wider market reach and enhanced customer accessibility. To optimize operational efficiency, the Company outsources garment manufacturing to third-party job work contractors on a need basis. It provides detailed technical specifications, including product designs, patterns, fabric quality standards, and other manufacturing requirements. Based on these specifications, the contractors independently procure the required raw materials and undertake the manufacturing process while adhering to the Companys prescribed quality standards.

The Companys products are marketed under its flagship brand "MONETIL" through its exclusive stores and outlets across India, reflecting its commitment to quality, innovation, and customer satisfaction.

PERFORMANCE OF THE COMPANY

During the financial year under review, the Company recorded a turnover of 7274.99 lakhs against 6342.04 lakhs in the previous year and the Company has incurred profit of 435.28 lakhs as compared to profit of 583.64 lakhs in previous financial year. The management of the Company is putting their best efforts to improve the performance of the Company.

During the year the Company has performed modestly but despite of challenging economic conditions due to the Middle East crises and other related factors, we are able to maintain profits and steady revenue in the Company. The Directors are relentlessly striving for betterment of the business and growth of the Company. They are optimistic about the future and expect the business to perform well in the forthcoming year.

RISK AND CONCERNS

The prevailing economic trends are likely to have a direct impact on your Companys growth prospects. Inflation is expected to remain high for the foreseeable future, driven by commodity price increases due to ongoing conflicts and broader price pressures. Additionally, the anticipated interest rate hikes by Central Banks in the coming year are expected to dampen growth and strain economies, especially in emerging markets.

In this environment, the ability to effectively manage cost pressures will be crucial to your Companys overall performance. Reduced purchasing power and demand, driven by the economic climate, could lead to significant shifts in consumer behavior, negatively affecting the market for textiles and apparel. A shift towards more value-for-money options could further reduce growth and profitability for your Company.

Opportunities

a) Sustainable Product: There is a growing consumer demand for responsibly produced clothing. By adopting Sustainable practices, we can attract and retain eco-conscious customers and enhance our brand loyalty and Reputation. Through product and process innovation, we can help lower the environmental footprint of our Products across own operations and value chain.

b) Product Quality and Safety: -Product quality and safety can help us gain a competitive edge in the market. High-quality, safe products foster consumer trust and loyalty, enhancing brand reputation and encouraging Repeat purchases.

c) Resource Management- Energy and Water: -efficient resource usage and focus on raw materials and processes with lower environmental impact can result in cost savings, increased customer loyalty, the opening of new market segments and a stronger brand Image.

d) Resilient exports: -Indias textile and apparel sector entered FY27 on a strong footing, supported by improving global demand, policy support, and expanding export opportunities. While the sector had demonstrated resilience in FY26 despite global uncertainties, the government expects momentum to continue in FY27 as exporters benefit from market diversification, higher demand for value-added products, and ongoing initiatives to enhance competitiveness. The textile industry remains a key contributor to Indias employment, exports, and manufacturing growth, with the government focusing on strengthening the sector through investments, production-linked incentives, and trade agreements.

OUTLOOK AND STRATEGY

Market Outlook (India - Apparel Industry)

Indias apparel industry is set for steady growth, driven by favorable demographics, rising incomes, urbanization, and evolving fashion preferences. Digital adoption and demand for branded, personalized clothing are transforming consumer behavior, especially in Tier II IV cities, fueled by aspirational youth and expanding e-commerce.

Despite short-term macroeconomic pressures like inflation and shifting spending patterns, long-term prospects remain strong. The rise of Gen Z and Gen Alpha, growing fashion awareness, and increasing demand for sustainable, value-driven fashion are reshaping the industrys future.

Strategic Focus Areas

To capitalize on these trends and maintain a competitive edge, the Company has adopted the following key strategies:

a) Omni channel Expansion: Integrating digital and physical retail for a seamless customer experience, with continued investment in e-commerce and digital marketing. b) Portfolio Diversification: Expanding product offerings across value, premium, and occasion wear, while entering new categories and consumer segments. c) Geographic Penetration: Strengthening presence in Tier II IV cities through franchise and owned formats, backed by localized marketing. d) Customer-Centric Innovation: Using data to drive personalized products, curated collections, and improved post-purchase service. e) Sustainability: Adopting eco-friendly materials, optimizing supply chains, and minimizing environmental impact in line with global standards. f) Operational Efficiency: Leveraging technology and AI to boost supply chain agility, inventory management, and responsiveness to market trends.

KEY INITIATIVES WITH RESPECT TO STAKEHOLDER RELATIONSHIP

A Stakeholders relationship committee is formed for reviews of statutory compliances and services relating to security. No complains was raised or received from any shareholders during the year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

The Company had sufficient numbers of employees at its administrative office. The Company recognizes the importance of human value and ensures that proper encouragement both moral and financial is extended to employees to motivate them. The Company enjoyed excellent relationship with workers and staff during the last year. Our human resource department plays a key function in our Company. It is operated by professionally qualified and experienced personnel and receives attention from senior management. The following table sets forth information on the number of our staff in various departments of our business as of March 31, 2026.

Employees on Payroll excluding Contractual and KMP/ Directors	As on March 31, 2026
Skilled/ Semi-Skilled	79
Unskilled	08
Contractual	0
Total	87

SUMMARY OF KEY FINANCIAL METRICS AND KEY RATIO

The Summary of Key Financial metrics and Key Ratio has been disclosed, as applicable, have been made in the Financial Statements, which are to be read together with the Notes annexed thereto and forming an integral part of the Financial Statements.

FORWARD LOOKING STATEMENTS

Readers are cautioned that this Management Discussion and Analysis contains forward-looking statements that involve risks and uncertainties. When used in this discussion, the words “anticipate”, “believe”, “estimate”, “intend”, “will”, and “expected” and other similar expressions as they relate to the Company or its business are intended to identify such forward looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements and risks and opportunities could differ materially from those expressed or implied in such forward-looking statements. The important factors that would make a difference to the Companys operations include economic conditions affecting demand supply and price conditions in the domestic and overseas markets, raw material prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes, economic development within India and the countries within which the Company conducts business and incidental factors. The Company undertakes no obligation to publicly amend, modify or revise any forward-looking statements on the basis, of any subsequent developments, information or events. This report is prepared on the basis of public information available on website / report / articles etc. of various institutions. The following discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.

		For Lorenzini Apparels Limited
	SD/-	SD/-
	(Sandeep Jain)	(Rajit Sehgal)
Date: 25/08/2026	Chairman, Managing Director & CFO	Director
Place: New Delhi	DIN:02365790	DIN: 05281112