Mish Designs Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

As we look ahead to the landscape of the apparel industry, it stands at the brink of transformative changes. These changes, driven by technological advancements and shifting consumer behaviors, are shaping the fashion industry trends in profound ways. Traditionally marked by creativity and adaptability, this sector now faces a pivotal moment where innovation intersects with sustainability and ethical practices.

Understanding these emerging fashion industry trends is crucial for stakeholders at all levels - from top fashion executives and designers to manufacturers, retailers, and end consumers. Staying abreast of these fashion industry trends is not just about remaining competitive; its about seizing new opportunities for growth, adapting to changing market demands, and making informed decisions that will shape the future of fashion.

In 2026, the apparel industry exemplifies how embracing technology, sustainability, and innovation can lead to a more responsible and dynamic future. This transformation is not just about staying competitive in light of emerging fashion industry trends; its about redefining the essence of fashion in the modern world.

The shift towards circular fashion supply chains and the embrace of the resale market reflect a broader move towards responsible consumption in the fashion industry. They not only address environmental concerns but also offer new opportunities for economic growth and creative innovation, aligning with the industrys evolving priorities and consumer expectations.

INDIAN MARKET:

India is among the top garment-manufacturing countries in the world. Indian textiles and apparel products have a history of fine craftsmanship across the entire value chain from fiber, yarn, and fabric to apparel with high global appeal. Indias cotton, silk, and denim are highly popular in other countries, and Indian apparel too has found success across fashion centres around the world. Indias textile and apparel industry is a large, diverse, and globally significant sector, playing a vital role in economic growth, employment generation, and export earnings. As one of the worlds leading textile exporters, it contributes substantially to merchandise exports, supported by a strong domestic market and an extensive MSME base. The sector has demonstrated resilience despite global challenges, with exports spanning over 111 countries and steady growth in key segments such as ready-made garments and jute. Government initiatives focused on value addition, market diversification, and global integration, under programmes such as Make in India and Aatmanirbhar Bharat, continue to strengthen its long-term growth potential.

India is among the top garment-manufacturing countries in the world. Indian textiles and apparel products have a history of fine craftsmanship across the entire value chain from fiber, yarn, and fabric to apparel with high global appeal. Indias cotton, silk, and denim are highly popular in other countries, and Indian apparel too has found success across fashion centres around the world. The country is a leading producer and consumer of cotton, with the largest acreage under cultivation globally, estimated at around 12.5 million hectares, accounting for nearly 38% of the global cotton area. Alongside this, India has strong capabilities in silk and denim production.

The apparel industry is one of the biggest contributors to the economy with a 2% contribution to the gross domestic product (GDP). It is also the second largest employer after agriculture, providing direct employment to more than 45 million people. Andhra Pradesh, Telangana, Haryana, Jharkhand, and Gujarat are the top textile and clothing manufacturing states in India.

GLOBAL MARKET

The global textile market size was valued at USD 1,104.0 Billion in 2025. Looking forward, IMARC Group estimates the market to reach USD 1,508.1 Billion by 2034, exhibiting a CAGR of 3.53% from 2026-2034. Asia-Pacific currently dominates the market, holding a market share of 48.7% in 2025. At present, rising preferences for eco-friendly fabrics, organic materials, and functional textiles are positively influencing the market. Besides this, the growing adoption of automation, which aids in improving production efficiency and reducing manufacturing costs, is fueling the textile market share.

At present, the market is growing due to the escalating demand for clothing, home furnishings, and industrial applications. Fashion trends are constantly evolving, encouraging textile producers to innovate and create a variety of fabrics. In addition, accelerated urban development and inflating disposable incomes are leading individuals to invest more in clothing and home furnishings, enhancing textile usage. The rise in fast fashion trends is facilitating the production of textiles at a faster pace. The broadening of e-commerce portals is boosting textile sales by offering a wide range of products to a larger audience.

Moreover, innovations in technology are refining fabric quality and increasing production speed, which is making textiles more available and cost-effective. Innovations, such as automation, digital printing, and smart textiles, in textile manufacturing processes have revolutionized the industry. Automation has improved production efficiency and reduced costs, enabling manufacturers to meet increasing demands. Digital printing has opened new possibilities for customization and design flexibility, allowing for faster and more accurate production. Smart textiles, integrated with sensors and electronics, offer enhanced functionality and performance. These technological advancements cater to the changing consumer preferences and drive industry competitiveness by enabling faster production, improved quality, and innovative product offerings.

MACRO-ECONOMIC OVERVIEW

India ranks among the top five global exporters of textiles and apparel, with a robust raw material and manufacturing base.

In FY26, Indias exports of textiles and apparel (including handicrafts) stood at US$ 35.52 billion, while imports were recorded at US$ 8.49 billion. Ready-Made Garments (RMG) accounted for the largest share of exports at US$ 15.77 billion (44%), followed by cotton textiles at US$ 10.25 billion (29%) and man-made textiles at US$ 5.23 billion (15%). As per the

Ministry of Textiles, Indias textile and apparel exports including handicrafts rose by 2.1% year-on-year to 3,16,334.9 crore in FY 2025-26 from 3,09,859.3 crore in FY 2024-25, with ready-made garment exports increasing by 2.9% from 1,35,427.6 crore to 1,39,349.6 crore.

The Indian textile and apparel sector is a significant contributor to the countrys GDP and a major source of employment, especially for women and the rural population. The industrys performance has been supported by government initiatives such as Make in India, Skill India, the Production Linked Incentive (PLI) Scheme for Textiles, the PM MITRA Parks Scheme, the National Technical Textiles Mission and the five-year Cotton Mission. Bharat Tex 2026, held from July 14 to July 17, 2026 at Bharat Mandapam, New Delhi with participation from over 130 countries, showcased the sectors advancements, sustainability efforts, and potential for high-value production, according to the Ministry of Textiles and the Press Information Bureau.

Based on product category, ready-made garments (RMG) accounted for the largest share of textile and apparel exports in FY26 at US$ 15.77 billion (44%), followed by cotton textiles at US$ 10.25 billion (29%) and man-made textiles at US$ 5.23 billion (15%). As per data compiled by the Confederation of Indian Textile Industry, during April 2025 to January 2026 textile exports declined by 2.35% to US$ 16,677.99 million while apparel exports grew by 1.59% to US$ 13,128.71 million, with combined textile and apparel exports marginally lower by 0.65% at US$ 29,806.70 million.

The Narendra Modi government is targeting US$ 250 billion in textiles production and exports of US$ 100 billion by 2030. This roadmap for achieving the production and export target was discussed by Mr. Piyush Goyal, Union Minister of Commerce and Industry, at the Chintan Shivir organized by the Ministry of Textiles. The Ministry of Textiles is presently headed by Mr. Giriraj Singh, Union Minister of Textiles, with Mr. Pabitra Margherita as Union Minister of State for Textiles.

OPPORTUNITIES

Sustainable products:

The textile industry is increasingly focusing on sustainability as consumers seek products with a reduced environmental footprint. This trend involves the use of organic, recycled, and sustainably sourced fabrics, as well as efforts to reduce fabric waste. Eco-friendly dyeing and printing processes and ethical production practices are central to this movement.

Circular fashion:

This trend has gained prominence for its emphasis on reducing waste and extending the lifecycle of clothing. It encompasses the use of recycled materials, recycling practices, and the repurchasing of used clothing items. Business models like clothing rental, exchanges, and repair services are gaining popularity in this context.

Digitization and e-commerce:

E-commerce is a dominant force in the textile market, enabling companies to reach a global audience and provide convenient purchasing options. The digitalization of processes, including computer-aided design, 3D modeling, and on-demand production, is gaining traction, leading to increased operational efficiency.

Free trade agreements and policy support:

The India-United Kingdom Comprehensive Economic and Trade Agreement (CETA) provides duty-free access for a substantial portion of Indian textile and apparel exports to the United Kingdom, and India is actively pursuing market diversification with the European Union and other economies. Domestically, the Production Linked Incentive (PLI) Scheme for Textiles, the PM MITRA Parks Scheme, the first of which became operational at Warangal, Telangana in May 2026, the National Technical Textiles Mission and the five-year Cotton Mission are expected to improve scale, raw material availability and cost competitiveness across the value chain.

THREATS:

Raw material prices

Increasing raw material prices affect operational costs and increase the price of the end product, especially for small and medium enterprises.

Government policies

Frequent policy changes at the national and state levels can put pressure on the textile business

Competition :

The industry faces competition from cheaper imports.

Tariff and trade policy risk:

The United States is the single largest export destination for Indias textile and apparel sector. Following the escalation of United States tariffs on Indian goods with effect from August 2025, the applicable duty structure has been revised more than once and continues to evolve. Separately, the European Union has suspended preferential tariff treatment for Indian apparel for the period 2026-2028. Continued tariff and trade policy uncertainty may affect order flows, realisations and margins across the industry.

Other challenges include:

Shortage of skilled workers

Rising production costs

Unsustainable resource consumption

Waste generation

Inadequate working conditions

Lack of value addition

Low productivity

Slow pace of modernization

Lack of scale and high fragmentation

Inadequate attention paid to technology upgradation and regular R&D

BUSINESS PERFORMANCE:

1) REVIEW OF OPERATIONS:

The Total Income of the Company stood at 838.13 Lakhs for the year ended March 31, 2026 as against 1810.14 Lakhs in the previous year. The Company made a net loss of 103.20 Lakhs for the year ended March 31, 2026 as compared to the net profit of 88.99 Lakhs in the previous year.

2) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The company has an Internal Control System commensurate with its requirement and size of business to ensure that the assets and interest of the company assets are safeguarded. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid down system and policies are comprehensively and frequently monitored by your companys management at all the levels of the organization. The company has established well defined policies and processes across the organization covering all major activities including authority for approvals. In all cases where monetary decisions are involved, various limits and authorities are in place.

The Companys internal controls are structured in a manner that ensure reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies, laws and accounting standards.

With a strong monitoring system in place, the Company has an Audit Committee, the details of which have been provided in the Corporate Governance Report. The Audit Committee of the Board of Directors review the existing audit procedures and internal systems of control on an ongoing basis keeping in mind the organizations requirements, growth prospects and ever evolving business environment. They also review the internal audit findings and recommendations and ensure that corrective measures are implemented. Suggestions for improvement are considered and the Audit Committee follows up on the implementation of corrective actions.

3) RISKS AND CONCERN:

Following the escalation of United States tariffs on Indian goods with effect from August 2025, exporters experienced order deferrals, cancellations and margin pressure, particularly in the ready-made garment segment for which the United States is the single largest destination. The tariff position has since been revised on more than one occasion and the duty structure applicable to Indian textile and apparel exports to the United States remains subject to change. Separately, the European Union has suspended preferential tariff treatment for Indian apparel for the period 2026-2028, while free trade agreements such as the India-United Kingdom Comprehensive Economic and Trade Agreement are expected to support market diversification over the medium term. Volatility in cotton and other raw material prices, elevated logistics and freight costs and the continuing reconfiguration of global supply chains have added to the pressure on the working capital positions of manufacturers across the industry.

Risk is an integral part of the business and we aim at delivering superior shareholder value by achieving an appropriate balance between risks and returns. The industry is subject to continuously evolving legislative and regulatory environment due to increasing globalization, integration of world markets, newer and more complex products & transactions and an increasingly stringent regulatory framework.

Our senior management identifies and monitors the risks on an ongoing basis and evolves processes/systems to monitor and control the same to contain the risks to minimum levels. Periodic monitoring by our officials helps in identifying risks in early stage. If required, a risk event update report is periodically placed before the Board of Directors of the Company.

Regulatory framework, focused on maintaining controls on domestic businesses but even inadvertently creating more favorable regulatory environment for global entities operating in India is a matter of concern. We actively participate in dialogue in industry bodies and with regulators to point these out and to recommend appropriate changes.

4) RISK MANGEMENT:

For Mish Designs Limited, an effective risk management policy lies at the core of our business philosophy, which is centered on delivering higher and better returns to all our stakeholders. With ups and downs, volatility and fluctuations in the apparel and textile business in which the Company operates, Mish Designs Limited is exposed to various risks and uncertainties in the normal course of our business. Since such variations can cause deviations in the results from operations and affect our financial state, the focus on risk management continues to be high.

5) KEY RATIOS

PARTICULARS	2025-26	2024-25	Change in ratios in %
(a) Current Ratio,	0.34	0.24	42.55%
(b) Debt-Equity Ratio,	0.43	0.08	415.79%
(c) Debt Service Coverage Ratio,	-4.05	5.19	-178.03%
(d) Return on Equity Ratio,	-0.06	0.06	-198.22%
(e) Inventory turnover ratio,	0.94	2.75	-65.74%
(f) Trade Receivables turnover ratio,	13.23	23.07	-42.65%
(g) Trade payables turnover ratio,	4.19	6.40	-34.49%
(h) Net capital turnover ratio,	-0.50	-1.01	-50.59%
(i) Net profit ratio,	-0.12	0.05	-349.68%
(j) Return on Capital employed,	-0.03	0.08	-141.00%
(k) Return on investment	N.A	N.A	N.A

REASONS FOR MORE THAN 25% VARIANCE

RATIOS WITH VARIANCE

	REASONS FOR VARIANCE MORE THAN 25%
(a) Current Ratio,	The Change in ratio is due to following reason:
	1. During year companys inventories and trade receivable increased The Change in ratio is due to following reason:
(b) Debt-Equity Ratio,	1. During year company has raised fund through Right issues and company also issues the bonus shares also
(c) Debt Service Coverage Ratio,	The Change in ratio is due to following reason:
	1. During year company has Repaid his loan from related parties
(d) Return on Equity Ratio,	As mentioned in (b) and the turnover along with profit has risen
(e) Inventory turnover ratio,	Not Significant
(f) ratio,	Trade Receivables turnover Not Significant
(g) Trade payables turnover ratio,	Not Significant
(h) Net capital turnover ratio,	The Change in ratio is due to following reason:
	1. During the year companys turnover has risen
(i) Net profit ratio,	As mentioned in (h)
(j) Return on Capital employed,	As mentioned in (h)
(k) Return on investment	Not Applicable, as company has made no investment or fixed deposits.

6) HUMAN RESOURCES:

Mish Designs Ltd. is part of a dynamic and progressive group that actively fosters a challenging work environment and encourages Entrepreneurship. With trust being the critical part of our business belief, we lay a strong emphasis on integrity, teamwork, innovation, performance and partnership. Our professional staff with diverse backgrounds brings varied talent, knowledge and experience to the Group, helping our businesses to remain competitive, achieve greater success and newer milestones. Our management team and board of directors are resolved to do what, we believe, is best for our shareholders, clients and associates.

At Mish Designs Limited, we recruit for skill, experience, right attitude, commitment and diversity. However, the one common trait that runs through the DNA of every employee is entrepreneurship. We encourage our employees to act as owners, partners and managers of their individual functions while providing a conducive environment for them to be creative and productive.

7) GOVERNMENT INITIATIVES:

Indias apparel export sector is witnessing strong positive momentum, supported by a clear policy push and ambitious growth targets. The government is working on a comprehensive roadmap to scale textile and apparel exports from around US$ 40 billion to US$ 100 billion by 2030, with a focus on expanding into FTA markets, boosting high-value segments like handlooms, silk, and GI products, and converting non-exporting districts into export hubs. Complementing this, the Union Budget 2026 outlines an integrated approach to strengthen manufacturing, generate employment, and promote sustainability across the textile value chain, enhancing global competitiveness. Government initiatives such as PM MITRA Parks, Production Linked Incentive (PLI) Scheme, and skill development programs like SAMARTH are creating world-class infrastructure, encouraging large-scale apparel manufacturing, and improving workforce capabilities. Additionally, strategic trade agreements and policy support are opening access to major global markets, positioning India to significantly increase its share in global apparel trade and achieve long-term export growth.

As the textile industry is crucial for Indias growth, the government of India has implemented several schemes for the growth of production and ease of trade. The Amended Technology Upgradation Fund Scheme (ATUFS) and the Advance Authorization (AA) schemes are focused on strengthening and increasing the production of textile and apparel products in the country.

The Union Budget 2026 27 introduces a comprehensive strategy to strengthen Indias textile sector through fibre self-reliance, cluster modernisation, sustainable manufacturing, skilling, Mega Textile Parks and enhanced support for handloom and handicrafts. It also boosts exports and MSME liquidity through extended export obligation timelines, stronger TReDS financing mechanisms and Rs. 10,000 crore (US$ 1.09 billion) SME Growth Fund, aiming to position India as a global textile manufacturing and export hub while generating employment and promoting inclusive growth.

The Mission Steering Group under the chairmanship of Union Minister of Textiles has approved 19 research projects of value approximately US$ 2.52 million across different fields of technical textiles under the National Technical Textiles Mission. The research projects were approved across key strategic areas of composites, geo textiles, smart textiles and machineries etc. in the 9th Mission Steering Group meeting. The approved projects were proposed by eminent research bodies and institutions including Indian Institute of Technology, National Institute of Technology, and Council of Scientific

& Industrial Research etc. The Union Minister also reviewed the progress on R&D, promotion and market development, export promotion and education, training and skill development under the Mission. The Union Minister reviewed 27 applications from 16 public and 11 private institutes which were earlier approved for introducing papers on technical textiles, procuring lab infrastructure and training of trainers across different application areas. He also reviewed internship initiatives and skilling initiatives taken by the Ministry under the Mission.

Inspired by the 5F Vision of the Prime Minister Mr. Narendra Modi, Bharat Tex 2024, the largest global textile event in India with a unified Farm to Fashion focus, was held in New Delhi in February 2024. The four-day event witnessed an overwhelming response from Indian and global players including top brands and retailers. The mega event was organised by a consortium of 11 Textile Export Promotion Councils and supported by the Ministry of Textiles. The event focused on trade, investment, and sustainability, attracting over 3,500 exhibitors, 3,000 buyers from 111 countries, and over one lakh trade visitors. Spanning around 2 million sq. ft. across two venues, Bharat Mandapam and Yashobhoomi, the event highlighted the entire textile value chain, featuring highlights like Vastra Katha, an artistically curated textile narrative. Multiple Memorandum of Understandings (MoUs) were signed during the event.

8) OUTLOOK:

The future of Indias textiles industry looks promising, supported by rising domestic demand, growing exports, and policy interventions that are strengthening competitiveness. The sector, which already contributes around 2% to GDP and employs over 45 million people, is expected to see its share in the economy nearly double by the end of the decade.

Technical textiles will play a pivotal role in this growth. The segment, valued at US$ 29 billion in FY24, is projected to expand rapidly, reaching US$ 45 billion by 2026 and continuing on a strong trajectory thereafter. Within this, mobiltech textiles for automotive use are expected to nearly double from US$ 2.32 billion in FY25 to US$ 4.57 billion by FY33, driven by the rise of electric vehicles and demand for advanced materials. Sustainability and innovation are emerging as defining themes for the industry. Companies are increasingly adopting eco-friendly processes and recyclable fibres to align with global trends, while government schemes like MITRA Parks and support for integrated textile hubs are encouraging value addition and modernisation.

With household incomes rising, urbanisation expanding, and demand from sectors like housing, healthcare, and hospitality growing steadily, Indias textile and apparel market is projected to reach US$ 350 billion by 2030. This positions India not only to strengthen its domestic market but also to expand its global footprint in textiles and apparel.

9) SAFE HARBOUR:

This document contains statements about expected future events, financial and operating results of the businesses, which are forward-looking. By their nature, forward-looking statements require the businesses to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirely by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of Mish Designs Limiteds Annual Report, FY2025-26