Lovable Lingerie Ltd Management Discussions.


For the financial year 2019-20, the Company recorded a net turnover of Rs.14,237.81 lakhs as against Rs.17,550.54lakhs for the financial year 2018-19, registering a decrease of 18.87% The Net Profit Before Tax stood at Rs.402.45 lakhs as against Rs. 322.59 lakhs over last year and Profit After Tax stood at Rs.314.07 lakhs for the year as against Rs.81.55 lakhsin the last year.


The Company is engaged in the business of manufacturing garments. Therefore, there is no separate reportable segment.


To avoid duplication between the Directors Report and the Management Discussion and Analysis, we present below a composite summary of performance and functions of the Company.


The Indian textiles industry, currently estimated at around US$ 150 billion, is expected to reach US$ 250 billion by 2019. Indias textiles industry contributed seven per cent of the industry output (in value terms) of India in 2017-18. It contributes 2.3% to the GDP of India, 7% of the countrys manufacturing production and 13% of countrys export earnings. It employs more than 45 million people and expected to touch 55 million by 2020, rendering it a very vital component of Indias organized and unorganized sector employment.

India is well integrated in the value-chain of the Textile Industry from fibre to fashion.

The production of raw cotton in India is estimated to have reached 36.1 million bales in FY19.


The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route.

Initiatives taken by Government of India are:

- The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 5 per cent.

- As of August 2018, the Government of India has increased the basic custom duty to 20 per cent from 10 per cent on 501 textile products, to boost "Make in India" and indigenous production.

- The Government of India announced a Special Package to boost exports by US$ 31 billion, create one crore job opportunities and attract investments worth Rs 80,000 crore (US$ 11.93 billion) during 2018-2020. As of August 2018, it generated additional investments worth Rs 25,345 crore (US$ 3.78 billion) and exports worth Rs 57.28 billion (US$ 854.42 million).

- The Government of India has taken several measures including Amended Technology Up-gradation Fund Scheme (A-TUFS). This Scheme is estimated to create employment for 35 lakh people and enable investments worth Rs 95,000 crore (US$ 14.17 billion) by 2022.

- Integrated Wool Development Programme (IWDP) approved by Government of India to provide support to the wool sector starting from wool rearer to end consumer which aims to enhance the quality and increase the production during 2017-18 and 2019-20.

- The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme named ‘Scheme for Capacity Building in Textile Sector (SCBTS) with an outlay of Rs 1,300 crore (US$ 202.9 million) from 2017-18 to 2019-20.

- Government of India approves special package for employment generation viz

• Employee Provident Fund Scheme Reforms

• Increasing overtime caps

• Introduction of fixed term employment

• Additional incentives under ATUFS

• Enhanced duty drawback coverage

• Enhancing scope of Section 80JJAA of Income Tax Act

The management discussion and analysis presents the industry Overview, Strength, Opportunities and Performance, Initiatives by the Company and overall strategy of Lovable Lingerie Limited becoming a market driven producer/exporter of various innovative models and ranges of Textiles products.


Indian Textile industry can be divided into several segments, some of which can be listed as below:

- Cotton Textiles

- Silk Textiles

- Woolen Textiles

- Readymade Textiles

- Jute and Coir


- India has rich resources of raw materials for the textile industry. It is one of the largest producers of cotton in the world and also rich in resources of fibres like polyester, silk, viscose etc.

- India is riched in highly trained manpower. The country has a huge advantage due to lower labour rates. Because of low labour rates, the manufacturing cost in textile manufacturing automatically comes down to very reasonable levels.

- India is highly competitive in spinning sector and has presence in almost all processes of the value chain.


- Low per-capita domestic consumption of textile indicating significant potential growth.

- The Domestic market is extremely sensitive to fashion fads and this has resulted in the development of a responsive garment industry, catering to paying and aspirational customers.

- Indias global share is just 3% while China controls about 15%, signifying considerable headroom to scale up.

- Companies need to concentrate on new global product standards for leveraging the opportunities.


- The industry which was growing at 3-4% during the last six decades has now accelerated to the annual growth rate of 9-10% but various factors have effecting annual growth rate of textile industry, Global recession and Domestic demand slowdown coupled with a Supply glut is one of them.

- The impact of the global and domestic economic slowdown is directly affect the performance of the industry.


Capacity building:

In order to steer your company into an aggressive growth path, the company is looking into enter the mass segment, which had not been fully explored by the company till date. To meet the expected demand from the mass segment, the company is building new capacity at our Erode Plant with an annual production capacity of 25 lakhs nos., which is 30% of the companys total capacity.

Upskilling of Employees:

Of all the factors of production, work force comes first. Upskilling and Reskilling the the work force in tune with the latest technological developments, not only motivates the employees but also increase the productivity and upgrades product standards. Your company, assisted with the Government of India Initiative on Upskilling and Resiklling "Samarth" schemes, set up and tied up with training centres to equip our work force with modern techniques.

New Product Categories and Styles:

Your company has identified the twin routes of deeper & category-leading brand-building & scale-up of production routes to high sales volumes & to be the engines of growth.

SS19 collection of Lovable comprised of Premium & Classic products like Encircle-The Original, Encircle-Elite, ADL-The 1, whole new range of styles in our Confi-series & a whole new line of products under the name "Prime", which caters the plus- size category of the market. Under Daisy Dee, the company has launched a new sub-brand by the name of Daisy Dee OUTFIT for tapping into the Athleisure category. The company is looking to tap mass segment under the category of "Lovable Essensuals"

Accordingly, your company in the year 2019-20 has invested heavily in new marketing initiatives, advertising & a heightened media presence, besides launches of new, trendy products in innerwear & sportswear. Your company has also increased its online presence through various mediums of social media and presence on leading Ecommerce Marketplaces. Dealer Apps for direct communication with the market has also been launched in 2019.


Your Company places utmost importance on ensuring safety of its employees, visitors to our premises and the communities we operate in.

Your Directors are committed to strict compliance of not just statutory requirements but even more stern internal policies and best practices related to environment, health and safety in all our units. In the year under review, your Company has further strengthened its commitment to workplace compliance by increasing the strength of the workplace Compliance Department to enhance monitoring and control in all these areas.

Environment: Your Company is an environment friendly organization as it is a non-polluting and non-effluent generating manufacturing set-up.


The Companys internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested and certified by Statutory as well as Internal Auditor and cover all offices, factories and key business areas. Periodical reports and significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee is headed by an Independent Director and this ensures independence of function and transparency of the process of supervision and oversight. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companys risk management policies and systems. The Company conducts its business with integrity and high standard of ethical behaviour and in compliance with the laws and regulations that govern its business.


Sr No. Particulars Year 2019-20 Year 2018-19 Change in %
1 Debtors Turnover 3.47 3.85 (10%)
2 Inventory Turnover 2.62 3.50 (25%)
3 Interest Coverage Ratio 60.00 103.18 (42%)
4 Current Ratio 6.02 4.10 47%
5 Debt Equity Ratio 0.05 - 5%
6 Operating Profit Margin (%) 4% 4% (7%)
7 Net Profit Margin (%) 3% 3% 15%
8 Return on Net worth 3% 3% (7%)

Explanation: Due to increased competitive intensity and contraction of overall demand, there was a drop in our turnover in FY20 as compared to FY19. The drop in turnover has impact on profitability and financial ratios for FY20 as compared to FY19.



For the apparel industry in general and our market in particular:

• More organized retail. Better consumer retail experience

• Increasing fashion consciousness and consumers becoming more aspirational, discerning and brand savvy.

• The factors that determine consumption, education, occupation, urbanization, rise in nuclear families moving in a positive direction

• Increasing urban women population and women corporate workforce

• Increasing brand consciousness and spending on kids

• Higher disposable income

• Increasing online retail.

• Company need to concentrate on new global product.

• Low per-capita domestic consumption of textile indicating significant potential growth.


Many major international apparel brands have commenced operations in India realizing that Indian markets are likely to emerge as one of the largest market in the world in the next few decades. Competitive intensity is expected to sustain high.

Indias global share is just 3% while China controls about 15%. In post 2015, China is expected to capture 43% of global textile trade.


The Company has robust risk management procedures to identify and evaluate risks on an ongoing basis. The identified risks are integrated into the business plan and a detailed action plan to mitigate the identified business risk and concerns is put in place.

The key risks and concern identified by the company and its mitigation plans are:

Availability and Rising Cost of Labour:

The industry is growing at a fast pace, in a highly labour intensive sector and demand for experienced and trained manpower is outstripping supply. The ability to retain existing talent and attract new talent assumes crucial importance. The Company has created long term plans with the objective of motivating employees to create a sense of "belonging" and a ‘feel good environment. The Company has set up robust training centers at various units where newcomers to the labour force receive structured training.

Increase in input and brand-building costs:

The availability of raw materials at reasonable rates is one of the main concerns of the company. However the company is confident that increases in raw material cost, if and when they occur, can be passed on to consumers because of the strong pricing power of its brands. The company is also aggressively taking steps to monitor and improve productivity, which will mitigate the impact of material cost increases to some extent. The Company is also conscious that in the Media environment of exploding media vehicles and fragmented audiences, the challenges for achieving Brand Reach and delivering effective communication are rising disproportionately. The Company is taking steps to plan and execute media campaigns with higher efficiency and continue to achieve brand salience.


Your Company fully values the Human capital; it deploys and credits its success to them. It has been the consistent endeavor of the Company to create a congenial and challenging working atmosphere wherein every employee can develop his own strength and deliver to his full potential.

During the year under review, industrial relations in the factory were cordial and pro-active and all employees and the Union supported productivity and process improvement measures undertaken at all the functions of the Company. Their unstinted co-operation has enabled the unit to achieve continuous growth, both quantitatively and qualitatively. Your Company continued to maintain excellent industrial relations with all its employees and independent job work firms. Adequate safety and welfare measures are in place and your Company will continue to improve the same on ongoing basis.

As of 31st March, 2020, the Company had 1099 employees on its roll.


The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market.

High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market.

The global economic climate continues to be volatile, uncertainand prone to geo-political risks. Weak consumer sentiment and low commodity prices are expected to affect global growth adversely.

Your Company has achieved a significant growth and has been constantly following emerging market trends and has accordingly from time to time revamped its marketing strategies and product portfolios. The Company is trying to come up with some new products and ranges of inner wears according to changing consumer needs and demand.

Your Company has taken a step to evolve in the super-premium segment of innerwear.


Statements in the management discussion and analysis describing the Companys objectives, projections, estimates and expectations may be considered as "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. The factors that might influence the operations of the Company are economic conditions, government regulations and natural calamities over which the Company has no control.

The Company assumes 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.