Nandani Creation Ltd Management Discussions

1. GLOBAL ECONOMIC OVERVIEW

The global textile market is poised for substantial growth in the coming decade, driven by rising demand, technological advancements, and shifting consumer preferences. According to a comprehensive report by Grand View Research, the global textile market size was valued at USD 993.6 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 4.4% from 2022 to 2030. This growth trajectory underscores the markets resilience and adaptability amid evolving industry dynamics.

The integration of advanced technologies in textile manufacturing processes has been a key driver of growth. Automation, AI, and IoT are transforming traditional textile operations, enhancing efficiency, and reducing production costs. Smart textiles, which incorporate electronic components into fabrics, are emerging as a significant trend. These textiles are being increasingly used in various applications, including healthcare, sports, and fashion, providing functionalities such as temperature regulation, health monitoring, and interactive features.

"Technology is revolutionizing the textile industry, enabling manufacturers to produce high-quality, innovative fabrics while maintaining cost-effectiveness," said John Smith, CEO of Tech Textile Innovations, in an interview with Textile Today.

As global inflation dropped from its mid-2022 peak, economic growth remained steady, defying earlier predictions of stagflation and a global recession. This stability was driven by increased government spending, strong household consumption, and a rise in labour force participation. Despite central banks raising interest rates to control inflation, households in major advanced economies used pandemic savings, contributing to this economic resilience.

Global economic growth is estimated at 3.2% for 2023 and is expected to maintain this pace in 2024 and 2025. However, the growth rate is projected to decline to 3.1% over the next five years, the lowest in decades. This slower growth is due to high borrowing costs, reduced fiscal support, the lasting effects of the Covid-19 pandemic, war in Ukraine and the Middle East, weak productivity growth, and increasing global economic fragmentation. Global inflation is expected to decrease from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets faster than emerging markets and developing economies. In response to inflation, major central banks raised interest rates to restrictive levels in 2023. This led to higher mortgage costs, difficulties for businesses in refinancing debt, tighter credit availability, and weaker business and residential investment. Despite these challenges, the easing of inflation has led to expectations of declining future interest rates, Resulting in lower long-term interest rates and rising equity markets

2. OUTLOOK

Looking ahead, there is a cautious optimism surrounding the global economic outlook. With disinflation and steady growth, the likelihood of a hard landing has diminished, and risks to global growth are broadly balanced. Faster disinflation could further ease financial conditions. However, as inflation converges towards target levels and central banks shift towards policy easing in many economies, a tightening of fiscal policies aimed at reducing high government debt with higher taxes and lower government spending is expected to weigh on growth. Geopolitical tensions, including global conflicts like wars in Ukraine and Gaza and disputes in the South China Sea, Taiwan, and Ladakh, among other regions, could trigger new price spikes, potentially raising interest rate expectations and reducing asset prices. Additionally, divergent disinflation rates among major economies could cause currency fluctuations that stress financial sectors. Monetary policy remains focused on aligning inflation with targets to pave the way for sustained growth in the medium term.

The global economy is expected to grow 2.8% in 2023, influenced by the ongoing Russia-Ukraine conflict. Concurrently, global inflation is projected to fall marginally to 7%. Despite these challenges, there are positive elements within the global economic landscape. The largest economies like China, the US, the European Union, India, Japan, the UK and South Korea are not in a recession. Approximately 70% of the global economy demonstrates resilience, with no major financial distress observed in large emerging economies. (Source: IMF).

3. INDIAN TEXTILE MARKET ECONOMIC OVERVIEW

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The industry is extremely varied, with hand-spun and hand-woven textiles sectors at one end of the spectrum, with the capital-intensive sophisticated mills sector at the other end. The fundamental strength of the textile industry in India is its strong production base of a wide range of fiber/yarns from natural fibres like cotton, jute, silk, and wool, to synthetic/man-made fibers like polyester, viscose, nylon and acrylic.

The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of textiles industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles makes it unique in comparison to other industries in the country. Indias textiles industry has a capacity to produce a wide variety of products suitable for different market segments, both within India and across the world.

According to Crisil Ratings, the organised retail apparel sector is projected to achieve revenue growth of 8-10% in FY25, driven by rising demand from a normal monsoon, easing inflation, and the festive and wedding seasons.

The increasing preference for affordable, trendy fashion clothing that mimics high-fashion designs is expected to be the primary revenue driver. In order to attract private equity and employee more people, the government introduced various schemes such as the Scheme for Integrated Textile Parks (SITP), Technology Upgradation Fund Scheme (TUFS) and Mega Integrated Textile Region and Apparel (MITRA) Park scheme.

The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 350 billion by 2030. Moreover, India is the worlds 3rd largest exporter of Textiles and Apparel. India ranks among the top five global exporters in several textile categories, with exports expected to reach US$100 billion.

The textiles and apparel industry contributes 2.3% to the countrys GDP, 13% to industrial production and 12% to exports. The textile industry in India is predicted to double its contribution to the GDP, rising from 2.3% to approximately 5% by the end of this decade. Textile manufacturing in India has been steadily recovering amid the pandemic. The manufacturing of textiles Index for the month of June 2024 is 106.

Global apparel market is expected to grow at a CAGR of around 8% to reach US$ 2.37 trillion by 2030 and the Global Textile & Apparel trade is expected to grow at a CAGR of 4% to reach US$ 1.2 trillion by 2030. Indias home textile industry is expected to expand at a CAGR of 8.9% during 2023-32 and reached US$ 23.32 billion in 2032 from US$ 10.78 billion in 2023.

Technical textiles are revolutionizing the textile industry in India by offering innovative solutions across various sectors. These specialized fabrics are designed for specific performance attributes and applications, ranging from automotive and aerospace to healthcare and construction.

With a growing emphasis on technology and research, India is positioning itself as a global leader in this field, leveraging its strong textile heritage and advanced manufacturing capabilities.

The Indian Technical Textiles market is the 5th largest in the world. The technical textiles industry is on the brink of remarkable growth, with projections placing the global market size at an impressive US$ 309 billion by 2047. The Indian composites market is expected to reach an estimated value of US$ 1.9 billion by 2026 with a CAGR of 16.3% from 2021 to 2026 and the Indian consumption of composite materials will touch 7,68,200 tonnes in 2027.

India is the worlds largest producer of cotton. Indias total production of cotton in the 2024-25 season have been estimated at 302.25 lakh bales of 170 kgs. In current cotton season 2024-25, up to March 31, 2025, Government of India, through its nodal agency, the Cotton Corporation of India Ltd. (CCI) under Ministry of Textiles has successfully procured 525 lakh quintals of seed cotton, equivalent to 100 lakh bales, under Minimum Support Price (MSP) operations. This procurement accounts for 38% of the total cotton arrivals of 263 lakh bales and 34% of the estimated total cotton production of 294.25 lakh bales in the country.

In 2022-23, the production of fibre in India stood at 2.15 million tonnes. While for yarn, the production stood at 5,185 million kgs during the same period. Natural fibres are regarded as the backbone of the Indian textile industry, which is expected to grow from US$ 138 billion to US$ 195 billion by 2025.

Indias textile industry is on the brink of expansion, with total textile export projected to reach US$ 65 billion by FY26. India saw a 36.4% increase in industrial design applications, particularly in textiles, accessories, tools, machines, health, and cosmetics. According to ICRA, Indian apparel exporters are projected to achieve revenue growth of 9-11% in FY25, driven by the gradual reduction of retail inventory in key end markets and a shift in global sourcing towards India.

In FY25, the total exports of textiles and apparels (incl. handicrafts) stood at Rs. 3,12,540 crore (US$ 36.61 billion). Ready Made Garments (RMG) category with export of US$ 15,989 million has the largest share (44%) in the total exports, followed by Cotton Textiles (33%, US$ 12,056 million) and Man- Made Textiles (13%, US$ 4,869 million). Indias textiles industry has around 4.5 crore employed workers including 35.22 lakh handloom workers across the country.

4. OUTLOOK

The future of the Indian textiles industry looks promising, buoyed by strong domestic consumption as well as export demand. India is working on various major initiatives to boost its technical textile industry. Owing to the pandemic, the demand for technical textiles in the form of PPE suits and equipment is on the rise. The government is supporting the sector through funding and machinery sponsoring.

Top players in the sector are achieving sustainability in their products by manufacturing textiles that use natural recyclable materials.

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. The growth in textiles will be driven by growing household income, increasing population, and increasing demand by sectors like housing, hospitality, healthcare, etc.

The technical textiles market for automotive textiles is projected to increase to US$ 3.7 billion by 2027, from US$ 2.4 billion in 2020. Similarly, the industrial textiles market is likely to increase at an 8% CAGR from US$ 2 billion in 2020 to US$ 3.3 billion in 2027. The overall Indian textiles market is expected to be worth more than US$ 209 billion by 2029.

ROBUST DEMAND:

Cotton production in India is projected to reach 7.2 million tons by 2030, driven by increasing demand from consumers. The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 350 billion by 2030, with exports expected to reach US$100 billion. The total exports during FY25 stood at Rs. 3,12,540 crore (US$ 36.61 billion), with RMG (44%), Cotton Textiles (33%), and Man-Made Textiles (13%) as key contributors

COMPETITVE ADVANTAGE:

India enjoys a comparative advantage in terms of skilled manpower and in cost of production, relative to major textile producers. The sector provides employment to over 45 million people and produces about 22,000 million pieces of garments per year

POLICY SUPPORT

100% FDI (automatic route) is allowed in textiles

In current cotton season 2024-25, up to March 31, 2025, Government of India, through its nodal agency, the Cotton Corporation of India Ltd. (CCI) under Ministry of Textiles has successfully procured 525 lakh quintals of seed cotton, equivalent to 100 lakh bales, under Minimum Support Price (MSP) operations. This procurement accounts for 38% of the total cotton arrivals of 263 lakh bales and 34% of the estimated total cotton production of 294.25 lakh bales in the country

INCREASING INVESTMENT

In order to attract private equity (PE) and employee more people, the government introduced various schemes such as the Scheme for Integrated Textile Parks (SITP), Technology Upgradation Fund Scheme (TUFS) and Mega Integrated Textile Region and Apparel (MITRA) Park scheme. Total FDI inflows in the textiles sector stood at Rs. 29,291.05 crore (US$ 4.59 billion) between April 2000-December 2024.

India is the worlds second-largest producer of textiles and garments. It is also the fifth-largest exporter of textiles spanning apparel, home, and technical products. The textiles and apparel industry contributes 2.3% to the countrys GDP, 13% to industrial production and 10.5% to exports. The textile industry in India is predicted to double its contribution to the GDP, rising from 2.3% to approximately 5% by the end of this decade.

India has a 4.6% share of the global trade in textiles and apparel. Moreover, India is the worlds third largest exporter of Textiles and Apparel. India ranks among the top five global exporters in several textile categories.

India has emerged as the second largest manufacturer of PPE globally; it is expected to exceed US$ 92.5 billion by 2025 as compared to US$ 52.7 billion in 2019. Around 45 million people are working in the textile business, including 3.5 million people who work on handlooms. Textile manufacturing in India has been steadily recovering amid the pandemic. Textile manufacturing in India has been steadily recovering amid the pandemic. The Manufacturing of Textiles Index for the month of June 2024 is 106.

Global apparel market is expected to grow at a CAGR of around 8% to reach US$ 2.37 trillion by 2030 and the Global Textile & Apparel trade is expected to grow at a CAGR of 4% to reach US$ 1.2 trillion by 2030. The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 350 billion by 2030, with exports expected to reach US$ 100 billion.

In FY25, the production of cotton in India stood at 29.42 million bales.

Production of yarn grew to 5,481 million kgs in FY24 and 2,752 million kgs in FY25 (April-September). In FY25 (April-February), jute yarn worth Rs. 136.6 crore (US$ 16 million) was exported from India. In FY25 (April-February), cotton yarn worth Rs. 27,600 crore (US$ 3.2 billion) was exported from India.

Indias cotton yarn sector is poised for substantial revenue growth, with Crisil Ratings forecasting a 7-9% increase in FY26. In FY24, India produced 38,913 metric tons (MT) of silk, whereas during FY25 (April-December) 30,614 metric ton silk was produced.

5. INDIAN E COMMERCE INDUSTRY

In recent years India has experienced a boom in internet and smartphone penetration. This has helped Indias digital sector, and it is expected to reach US$ 1 trillion by 2030. This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of Indias e-commerce sector. Indias e-commerce sector has transformed the way business is done in India and has opened various segments of commerce ranging from business-to-business (B2B), direct-to-consumer (D2C), consumer-to-consumer (C2C) and consumer-to-business (C2B). Major segments such as D2C and B2B have experienced immense growth in recent years.

Indias e-commerce industry, valued at Rs. 10,82,875 crore (US$ 125 billion) in FY24, is projected to grow to Rs. 29,88,735 crore (US$ 345 billion) by FY30, reflecting a compound annual growth rate (CAGR) of 15%.

In 2024-25, e-commerce emerged as a key driver of start-up investments, drawing Rs. 26,527 crore (US$ 3.1 billion) across 79 deals accounting for 31% of total start-up funding. This marked a sharp 128% jump from 2023s Rs. 11,980 crore (US$ 1.4 billion) across 59 deals. The hyperlocal and B2C segments led the charge, with Zepto (Kirana Kart Technologies) standing out by raising Rs. 11,980 crore (US$1.4 billion) alone contributing 44% of all e-commerce-related PE/VC investments.

According to a joint report by real estate consulting firm ANAROCK and retail news platform ETRetail, the sector is further expected to reach Rs. 47,64,650 crore (US$ 550 billion) by FY35, driven by increasing digital adoption and evolving consumer behaviour. Indias e-retail market has reached around Rs. 5,13,420 (US$ 60 billion) in GMV, making it the worlds second largest by online shopper base. Trend-led fashion is set to grow nearly 4x to Rs. 68,456-85,570 crore (US$ 8 10 billion) by 2028, with over 50% of sales expected from online platforms. The Indian Beauty and Personal Care (BPC) market is experiencing rapid growth, projected to reach a GMV of Rs. 2,60,610 crore (US$ 30 billion) by CY27. This represents 5% of the global beauty industry. The market is expanding at an annual growth rate of around 10%, making it the fastest-growing BPC market among major economies.

Indias subscription e-commerce market, valued at Rs. 88,479 crore (US$ 10.34 billion), in 2024, is projected to reach Rs. 3.2 lakh crore (US$ 374.24 billion), by 2033, growing at a CAGR of 45.13% during 2025 2033.

Indias e-commerce industry, valued at Rs. 10,82,875 crore (US$ 125 billion) in FY24, is projected to grow to Rs. 29,88,735 crore (US 345 billion) by FY30, reflecting a compound annual growth rate (CAGR) of 15%. The market is expected to surpass Rs. 13,69,120 crore (US$ 160 billion) in FY25, reflecting an annual growth rate of 25% 30%. In 2024-25, e-commerce emerged as a key driver of start-up investments, drawing Rs. 26,527 crore (US$ 3.1 billion) across 79 deals accounting for 31% of total start-up funding. This marked a sharp 128% jump from 2023s Rs. 11,980 crore (US$ 1.4 billion) across 59 deals. The hyperlocal and B2C segments led the charge, with Zepto (Kirana Kart Technologies) standing out by raising Rs. 11,980 crore (US$ 1.4 billion) alone contributing 44% of all e-commerce-related PE/VC investments.

According to a joint report by real estate consulting firm ANAROCK and retail news platform ETRetail, the sector is further expected to reach Rs. 47,64,650 crore (US$ 550 billion) by FY35, driven by increasing digital adoption and evolving consumer behaviour.

Indias e-retail market has reached around Rs. 5,13,420 (US$ 60 billion) in GMV, making it the worlds second largest by online shopper base. Trend-led fashion is set to grow nearly 4x to Rs. 68,456-85,570 crore (US$ 8 10 billion) by 2028, with over 50% of sales expected from online platforms.

The Indian Beauty and Personal Care (BPC) market is experiencing rapid growth, projected to reach a GMV of Rs. 2,60,610 crore (US$ 30 billion) by CY27. This represents 5% of the global beauty industry. The market is expanding at an annual growth rate of around 10%, making it the fastest-growing BPC market among major economies.

Indias Business-to-Business (B2B) online marketplace would be a US$ 200 billion opportunity by FY30.

In FY24, tech and e-commerce giants Google, Meta, Amazon, and Flipkart generated over Rs. 60,000 crore (US$ 7.19 billion) in advertising revenue, a 9% increase from Rs. 55,053 crore (US$ 6.60 billion) in FY23.

According to a recent report by EY India, generative artificial intelligence (GenAI) could enhance productivity in Indias retail industry by 35-37% over the next five years. The report, titled ‘The AIdea of India: 2025, reveals that 48% of Indian businesses have already initiated proof of concept (PoCs) for GenAI solutions, while another 32% are planning to invest or have allocated budgets for AI adoption. In January 2025, the Unified Payments Interface (UPI) facilitated a total of 16,996 crore transactions, with the platform processing over Rs. 23.48 lakh crore (US$ 270.3 billion) in value.

Indias booming e-commerce market is driven by affordable smartphones and low-cost data plans, leading major retail, and consumer goods makers to increase their investments in the online space.

The India Quick E-Commerce (Quick Commerce) market is poised for exponential growth, projected to reach US$ 19,932.5 million driven by rising internet and smartphone penetration, convenience of quick delivery, and accelerated adoption during COVID-19, with diverse product categories and order value segments catering to evolving consumer preferences, and the domination of metropolitan cities presenting significant opportunities for retailers and key players to capitalize on the rapidly expanding market.

Online penetration of retail is expected to reach 14% by 2028 compared with 8% in 2024. Moreover, online shoppers in India are expected to reach 220 million by 2025. According to a report published by IAMAI and Kantar Research, Indias internet users are expected to reach 900 million by 2025 from ~622 million internet users in 2020, increasing at a CAGR of 45% until 2025.

The Budget supports MSMEs with higher investment limits, better credit guarantees, and customized credit cards, alongside a Rs. 10,000 crore (US$ 1.17 billion) fund for startups. It also aims to boost domestic electronics manufacturing and promote Global Capability Centers in Tier 2 cities to enhance e-commerce supply chains.

Revenue in the Womens Apparel segment amounts to US$44bn in 2023. The market is expected to grow annually by 3.48% (CAGR 2023-2027).

6. THE COMPANY & OUR BRANDS- OUTLOOK:

As on March 31, 2025, the Company sold appx 8.20 lacs pcs on gross basis through its various Marketplace portals, exclusive brand outlets (EBOs) and various Proprietary sales Channels. We also sell our products through our own Brand s website i.e. www.jaipurkurti.com and various online marketplaces. Your Company “NANDANI CREATION LIMITED” is engaged in the manufacturing and online trading of Women Apparels like Kurtis, ethnic tops, palazzo, Patiala salwar suits, dupattas, quilted jackets, leggings, different variety of Bottom Wears, Shirts, Western wears etc.

We have a track record of developing homegrown brands leveraging our deep understanding of the needs and aspirations of Indian women. Over the years, we have expanded our brand portfolio to three brands, each positioned to cater to the well-defined needs of their respective target consumers:

“Jaipur Kurti “ Jaipur Kurti is the leading D2C women Indian wear Brand in the new age ethnic segment.

“Amaiva-By Jaipur Kurti: Amaiva is a high-end brand where style meets affordability.

“Desi Fusion”: With our brand Desi Fusion we are catering to prominent B2B fashion destinations across India. We focus on creating innovative designs and optimizing fit and sizing while emphasizing higher quality. We launch approximately new styles every year introducing freshness to our consumers every two to three weeks. We can achieve these parameters through an institutionalized product development process that starts with in-depth research, trend forecasting, concept/story development, fabric and textile designing, garment styling, sample development, presentations to internal teams and roadshows for our sales partners. We work with 250+ suppliers ranging from artisanal groups to large mills, enabling production of a highly differentiated product every single time.

The Retail Journey of the Company started in the year 2018 with the opening of our 1^st Retail Flagship Store “Amaiva-By Jaipur Kurti” which later got converted in “Jaipur Kurti.com” in January, 2020 and today till date we have 8 Retail Stores expanded in different states across India.

Our brand is best known for its ethnic wear, Kurtis and traditional designs having wide range of colors, patterns and sizes. We distribute our products by following e-retail model and have developed a sustainable business model over the period.

7. OUR KEY DEVELOPMENTS ARE AS FOLLOWS:

Increase in ASP led by brand premiumization:

During the last year, company has actively engaged in evolving our brand perception from affordable fashion wear to an aspirational brand. Our efforts got reflected by increase in ASP to Rs 1600/- as against Rs 855/- in previous year. This accomplishment serves as a robust foundation for all our future endeavors.

Engaged Bollywood actress “Madhuri Dixit” as the brand ambassador

In our constant commitment to propel the brand into its next phase of growth, the company has collaborated with the renowned Bollywood star, "Madhuri Dixit" who joins us as the esteemed brand ambassador. This strategic alliance is poised to provide dual benefit of endorsing our innovative product designs and fuel our expansive reach into new territories.

Increased presence in proprietary online sales channel, launched mobile App on Android and App store”.

We have invested in development of our proprietary online sales channel to enable an omni channel offering to the customer. Below are few specific steps being undertaken in this regard:

- Increasing spends towards performance marketing of our website www.jaipurkurti.com.

- Launched our trade channel website https://www.desifusion.store/

- Launched Mobile App on both Android and app store.

- Upgradation of companys retail software

Expanded retail presence:

In the quarter gone by we expanded our retail store presence in Delhi NCR region by opening our 1st store in Gurugram, Delhi, Bengaluru. Currently we are having 16 Retail Stores all over India with presence in 15 cities. Launched our Brand in Shoppers stop Ltd, Indias leading fashion player.

Developing franchisee store network

To further strengthen the retail presence and build asset light model company have started to develop its franchisee network and as a first step we have opened our first franchisee store in Jalandhar, Punjab. Going forward, we plan to have multiple stores in FOFO model.

Benefits of our own sales channel over others

- Higher sales realization leading to brand premiumization

- Collection of customer data

- Cross sell opportunities

- Lower sales return

- Reduced dependence on other websites & vulnerability to their policies

- Stronger Brand Loyalty

8. FINANCIAL HIGHLIGHTS:

PARTICULARS	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025
Net Sales	33.3	37.4	46.9	47.8	62.7	49.53	45.11	70.00
Operating EBITDA	2.4	3.2	3.2	4.6	2.9	3.0	4.3	9.00
EBITDA margin	7.1%	8.4%	6.8%	9.7%	4.7%	6.8%	10.0%	13.10%
Interest	0.7	1.2	1.6	1.8	1.2	2.1	2.53	3.00
Depreciation	0.3	0.5	0.4	1.1	0.9	1.3	1.95	2.00
PBT	1.3	1.5	1.3	2.3	0.2	0.1	0.55	5.00
Tax	0.4	0.5	0.4	0.6	0.1	0.0	0.0	1.00
PAT	0.9	1.1	0.9	1.7	0.1	0.1	0.55	4.00

ANALYTICAL RATIOS

Ratio	UOM	FY ENDED 31-03-2025	FY ENDED 31-03-2024
1. Current Ratio	Times	2.80	2.98
2. Debt-Equity Ratio	Times	0.38	0.57
3. Debt Service Coverage Ratio	Times	1.06	0.70
4. Return on Equity Ratio	%	8.93	1.73
5. Inventory Turnover Ratio	Times	1.28	1.05
6. Trade Receivables Turnover Ratio	Times	1.96	2.10
7. Trade Payables Turnover Ratio	Times	7.05	3.71
8. Net Capital Turnover Ratio	Times	1.66	1.49
9. Net Profit Ratio	%	5.14	1.12
10. Return on Capital Employed	%	13.19	6.47
11. Return on Investment	%	8.91	4.69

INVEST IN BUILDING GROWTH RUNWAYS AND KEY CAPABILITIES WHILE PRESERVING BALANCE SHEET STRENGTH

NANDANIS FAVORABLE POSITIONING:

OFFLINE PLAYERS:

No legacy burden of offline sales channels (distribution network or own stores)

Expertise in efficiently managing all operational activities in online business like logistic, inventory, fulfilling and returns through our ERP Softwares Attractive price point familiarity of dynamic pricing practice Resilient business model having showcased growth even in the pandemic times when all the offline players were struggling

ONLINE PLAYERS:

Complete operational integration

Relationship with multiple channel partners with the right mix thereby avoiding any partner dependency Recognized as one of the oldest surviving online brands in the industry Repeat customers and ability to attract organic traffic High conversion ratio

GROWTH DRIVERS

Favorable demographics of Indian population Increasing population of working women

Shift from Unbranded (unorganized) to Branded (organized) segment Migration from offline to online market place Increase in per capita income

BUSINESS STRATEGY:

Developing & strengthening all available online sales channels in the market Increasing share in fast growing 3rd party online sales channel

Focus on growing its own D2C channel under its flagship website domain “Jaipur Kurti” Key reasons for investing in proprietary sales platform: To catch the long-term trend of D2C business model in the most efficient way Create customer ownership Create cross sell opportunities Reduce 3rd party dependence risk This business model is the most effective way to leverage companys existing strengths of managing online business logistics, online customer engagement and executing online sales & branding strategies

Increase offline stores to compliment online presence as a complimentary sales channel to its core online business. Plan to grow more number of stores from 8 to 25 by the end of FY 2024 Increasing consumer engagement through social media marketing and Omni channel sales

TECHNOLOGY:

Our digital strategy is built around 5 key focus areas

ONLINE SALES:

To capitalize on the trend towards an increased share of online business in our industry and business segment, we aim to further enhance our capabilities to manage D2C businesses which include our own Brand.com websites and partners marketplaces. Differentiated product portfolio and customized supply chain processes coupled with best-in-class operational capabilities for superior customer experience have caused this segment to grow in the financial year under review.

OMNICHANNEL EXPERIENCE:

Seamless discovery, purchase and post-purchase journeys across online/offline touchpoints are the essence for a true omnichannel experience for the customer. Omnichannel is the integration of all physical and digital channels to offer a unified customer experience and Jaipurkurti.com is on its journey of becoming truly an omnichannel business. Jaipurkurti.com launched omnichannel play by bringing inventory from stores to Brand.com and marketplaces. In the financial year under review, we scaled up the “Endless aisle” initiative significantly for our own stores, some marketplaces, and Company operated Brand.com. With omnichannel capabilities, around 99 percent of seasons styles are available across channel with industry-leading fulfilment rates. We would soon be adding other marketplaces to our omnichannel systems to ensure a seamless, effortless and high-quality customer experience

CUSTOMER ENGAGEMENT:

Our strategy is to ensure high consumer retention and increased organic share by delivering personalized and relevant communication leveraging digital technologies. Additionally, it would provide us with detailed insight into consumer purchase behavior and allow us to deliver differentiated experiences to our consumers

INVENTORY MANAGEMENT:

We are leveraging technology to implement automated and pull-based inventory allocation and replenishment to boost inventory efficiency. Technology will also help us in strengthening our supply chain and improving its responsiveness to demand patterns through enhanced data analytics providing granular sales and inventory visibility across channels.

THOUGHT-TO-SHELF CYCLE:

Our digital initiatives also support our express production capabilities to improve speed to-market and data-supported design and sampling capabilities for closer-to-season and in-season innovation.

9. OPPORTUNITIES & THREATS:

The SWOT Analysis of the company is as follows:

10.SALES CHANNEL PERFORMANCE:

The Company is engaged in the manufacturing of Women Apparels such as Kurtas/Kurtis, Kurti with Palazzo, Kurti with Skirt, Kurta sets, Suit Sets, Pants, Salwar Dupattas etc. The Bifurcation of the Sales marketplace for the FY 2025 is as follows:

11.VALUE DRIVERS:

Pure play on structural online fashion retail opportunity Online fashion retail is a fast-growing opportunity with humungous market opportunity with the available tailwinds Given the pandemic effect, offline to online migration has been fast tracked. Asset light and operationally light model providing huge scalability opportunity and wide consumer reach Long surviving brand awareness enables favorable consumer orientation Positioning in the given consumer segment (Female aged 25 65 years) aligns opportunities in other related product categories like kids fashion, male fashion, female western fashion wear, female fashion accessories, etc. Focused management team lead by aspirational, young & energetic promoter Balanced capital structure with reasonable leverage

12.RISK MANAGEMENT:

The Company is governed by a risk management framework, comprising regular risk assessment by a committee, review of processes and controls over data flow. Key risks and our mitigation measures are mentioned below:

Fashion risk: Inability to respond to changes in customer preferences and fashion trends on time may have an adverse effect on our business

All of our products are designed through an institutionalized process which includes constant feedback. Structured range architecture and a strong design team helps in ensuring delivery of designs on a timely basis while maintaining an edge in fashion. We have shifted away from a strict two season calendar to bring the planning and production closer to the season specific requirements, resulting in a shorter lead time for production.

Supply Chain risk: Inability to manufacture and supply products on time

We have developed a wide base of suppliers, both for fabrics as well as for manufacturing. We develop long-term relationships with our suppliers who have continued to grow with us. We keep developing new sources, expanding in new geographies to de-risk dependency on the existing base of suppliers as well as to avoid any geographical risk. We are gradually moving to machine learning (ML) led replenishment process to enable a more accurate and quicker replenishment cycle.

Discounting: Trend of longer End of Season Sale (EOSS) and deeper discounting

We are a multi-channel business which gives us the opportunity to get higher realization by selling through alternate channels. The effort is also to launch fresh season stocks in store early, reducing the proportion of stocks being sold at discount.

High Inventory Days: Risk of liquidity, if sales projections are not met

We constantly monitor the freshness of finished goods and ensure that not more than 20 percent of our stock is more than three seasons old. Our aggressive dormancy provisioning policy ensures that older stocks are valued below historical realization values. Express production process, intended to reduce inventory risk and maximize top-selling styles, has already been tested for a meaningful number of styles and we are now expanding it to cover a large proportion of our inventory. A part of our inventory is in raw-material and work-in-process stage for the ongoing and the next season and these do not carry significant risk of obsolescence

13.INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the internal audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls as laid down are adequate and were operating effectively during the year.

14.HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS:

Our people are at the heart of how we do business. It is their talent and skills that will take us to our dream of becoming a $1 billion brand. We continue to invest in building best-in-class fashion teams. Recognizing that the workforce will provide critical competitive edge in its growth endeavor, the Company has laid emphasis on recruiting, maintaining and developing its human asset base.

The Company treasures its human resource as it is the most critical element responsible for the growth of the Company. It ensures a safe, conducive and productive work environment across its properties. The Company provides regular skill and personnel development training to enhance employee productivity and keep pace with technological advancements. The experienced and talented employee pool plays a key role in enhancing business efficiency, devising strategies, setting-up systems and evolving business.

15.ENVIRONMENT, CORPORATE SUSTAINABILITY AND SOCIAL RESPONSIBILITY:

Being a responsible corporate citizen, your Company strongly follows to giving back to the society. CSR initiatives help elevate the quality of life of the people by promoting healthcare, education and employment opportunities. Your Company will take numerous initiatives to develop local community around its manufacturing facilities and aims to continue its efforts to build on its tradition of social responsibility to empower communities.

16.FORWARD LOOKING STATEMENT:

This Management Discussion & Analysis Report contains statements about expected future events and financial and operating results of Raymond Group, which may be classified as forward-looking. By their nature, forward-looking statements require the Company 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. Further, certain key performance indicators mentioned in the Annual Report are based on classifications made by the Company. Do not place undue reliance on forward-looking statements as a number of factors could cause assumptions and actual future results or events to differ materially from those expressed in these forward-looking statements.

17.CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, strategies, projections and estimates, are forward looking statements and progressive within the meaning of applicable laws and regulations. The Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward-looking statements.