Nitin Spinners Ltd Management Discussions

Economic overview

Global economy

The global economy demonstrated notable resilience in CY 2025, recording GDP growth of approximately 3.4%, withstanding higher trade barriers and elevated uncertainty in the previous year, due to accommodative financial and fiscal support. Growth, however, remained uneven across regions. Advanced economies expanded more slowly at around 1.9%, while emerging and developing economies (EMDEs) continued to outperform, growing by 4.4%. Global inflation remained relatively stable at 4.1% in CY 2025, although trends remained uneven across regions.

Global financial conditions saw moderate tightening following geopolitical developments, while remaining accommodative compared to historical levels, with adjustments in bond yields, equity markets and currencies.

Outlook

Once again, the global economy is threatened by the outbreak of war in the Middle East at the end of February 2026 causing serious supply disruption and increased input and energy cost. Looking ahead, global economic growth is projected to expand by around 3.1% in CY 2026. Global trade growth is expected to moderate from the elevated levels in the previous year, reflecting the impact of tariffs and geopolitical scenario, before stabilising as trade linkages and production chains adjust. Services trade is anticipated to remain relatively comparatively resilient, supported by stronger underlying growth trends.

Global imbalances are projected to narrow gradually, partly supported by fiscal measures in certain economies, while sustained investment, particularly in technology, is expected to underpin capital flows across major markets.

However, persistent geopolitical tensions and potential disruptions to global trade continue to influence the outlook. Developments in West Asia, including disruptions to trade routes such as the Strait of Hormuz, may affect trade flows and energy supply chains, contributing to volatility in commodity prices. These risks add to earlier pressures arising from higher energy and food prices linked to supply constraints and higher input costs.

Inthisenvironment,globaleconomicstabilitywilldependontimely policy responses and continued structural adjustments across economies to navigate evolving macroeconomic conditions.¹

Indian economy²

The Indian economy delivered a strong performance in FY 2025-26, supported by robust domestic demand, stable macroeconomic conditions and continued policy support. GDP grew by 7.6% over the base year (2022-23), indicating sustained economic momentum.

Manufacturing remained a key contributor, registering broad-based expansion with double-digit growth during the year, underpinned by domestic demand and supportive policy measures. The secondary and tertiary sectors also posted growth above 9%. Within services, segments such as trade, repair, hotels, transport and communication grew by 10.1%, indicating steady consumption-led activity.³

On the expenditure side, growth was driven by both consumption and investment. Private Final Consumption Expenditure (PFCE), accounting for over 61.5% of GDP, remained the primary engine of growth, while Gross Fixed Capital Formation (GFCF) increased by 7.6%, supported by infrastructure development and continued private sector investment.⁴

Indias CPI inflation stood at 3.4% in March 2026^.5 Although inflation edged up slightly, it remained within the target range, with a recovery in food prices and stable core inflation. However, rising input costs and the risk of higher energy prices present potential upside pressures going forward.

On the external front, the economy remained stable despite global uncertainties, supported by adequate foreign exchange reserves and fiscal management, with continued emphasis on capital expenditure, infrastructure and structural reforms supporting overall macroeconomic stability and investor confidence.

Outlook

The Indian economy is expected to maintain a positive growth trajectory, supported by strong domestic fundamentals and continued policy momentum. Economic activity is likely to remain resilient, driven by robust demand, a gradual improvement in private investment and sustained government expenditure, along with stable corporate and banking sector balance sheets and moderating inflation.

Ongoing structural reforms, including tax rationalisation, regulatory simplification and ease of doing business, combined with continued emphasis on infrastructure, digitalisation and manufacturing, are expected to support productivity and investment. Improvements in labour market conditions and formalisation are also likely to support growth, where Indias real GDP is projected to grow by 6.9% in FY 2026-27.

Industry overview

Global textile and apparel industry⁶

The global textile and apparel industry remains a critical pillar of the global manufacturing ecosystem, with the market valued at approximately USD 2,281.51 billion in FY 2025-26. The industry continues to witness strong momentum driven by rising demand for fashion and clothing, increasing penetration of e-commerce and growing applications of textiles across industrial, medical and technical segments. As a result, the industry is evolving beyond its traditional role in clothing and fashion to become an increasingly diversified and technology-driven sector.

Asia-Pacific retained its leadership position in both production and consumption, supported by its cost competitiveness, well-established supply chains and large-scale manufacturing capabilities. In parallel, North America is emerging as an important market, driven by higher demand for premium products, technical textiles and innovative fabric solutions. Industry dynamics are also being reshaped by the growing global focus on sustainable and eco-friendly materials, particularly natural fibers such as cotton. This shift is encouraging manufacturers to adopt more sustainable production practices while also accelerating investments in smart textiles and high-performance fabrics designed for specialised applications.

Despite challenges such as rising input costs and supply chain complexities, the industry outlook remains positive, supported by innovation, evolving consumer preferences and expanding global trade.

Outlook

The global textile and apparel industry is projected to reach USD 4,016.50 billion by FY 2033-34, growing at a CAGR of 7.35%. As the industry evolves, growth is expected to become increasingly value-driven and innovation-led, with increasing focus on premiumisation, product differentiation and brand-led strategies to improve margins. At the same time, investments in automation, advanced manufacturing and digital supply chains to improve efficiency and responsiveness.

Along with these developments, traceability, compliance and circularity are expected to gain greater importance, driven by evolving regulatory frameworks and global brands. Further, emerging segments such as technical textiles and smart fabrics are expected to create new opportunities beyond traditional apparel markets.

Although challenges such as input cost volatility and global uncertainties may continue, the industry is expected to strengthen resilience through innovation, supply chain diversification and strategic partnerships. These factors are expected to support sustainable long-term growth across the global textile and apparel sector.

Indian textile and apparel industry

The Indian textile and apparel industry continued to strengthen its global position in FY 2025-26, remaining the worlds second-largest producer and third-largest exporter. The sector contributed approximately 2% to Indias GDP and 11% to manufacturing GVA, while providing employment to over 45 million people.

The domestic market is witnessing steady growth of 11.38%, supported by rising disposable incomes, expanding e-commerce penetration and evolving consumer preferences.⁸ At the same time, the sector recorded exports of approximately USD 37 billion and continues to pursue its USD 100 billion export target by FY 2029-30. Despite global challenges, export growth remained supported by increasing emphasis on quality improvement and zero-defect manufacturing standards.⁹

In addition to traditional segments, the industry is gaining momentum in technical textiles, driven by increasing applications across industrial and infrastructure sectors. Indias inherent strengths in cotton production, availability of a skilled workforce and cost competitiveness continue to reinforce its position in the global value chain.

The sector is also benefiting from continued policy support through initiatives such as the PLI Scheme and PM MITRA Parks, along with favorable trade agreements, aimed at enhancing global competitiveness. Further, strengthening this momentum, Bharat Tex 2025, a global textile mega event supported by the Ministry of Textiles, highlighted the strength of Indias entire textile value chain and strengthened the countrys position as a preferred global sourcing and investment destination.

Outlook

The Indian textile and apparel industry is expected to maintain a steady growth trajectory to reach_USD 656.31 Billion_by FY 2033-34¹⁰, supported by strong domestic consumption, improving export opportunities and continued policy support. Rising incomes, urbanisation and premiumisation are expected to drive domestic demand, while favorable trade agreements and shifting global sourcing trends are expected to boost exports.

In addition, growth is anticipated to be led by value-added segments such as technical textiles and man-made fibres, alongside continued strength in apparel. Government initiatives focused on infrastructure, incentives and technology upgradation are expected to enhance competitiveness and support scale across the sector.

Although challenges such as raw material price volatility may persist, the industry remains well-positioned to leverage its strong manufacturing base and skilled workforce to achieve sustainable long-term growth.

Indian textile and apparel market forecast (In USD Billion) Size, By Raw Material, 2025-2034 (USD Billion)

Indian cotton textiles industry

The Indian cotton textile industry remains a key pillar of the countrys textile ecosystem, supported by Indias position as the worlds largest cotton producer and one of the largest processors and exporters. The sector plays a critical role in livelihoods, supporting millions of farmers and generating employment across the value chain.

The industry continues to benefit from strong domestic demand and export opportunities, particularly in cotton yarn, fabrics and ready-made garments. However, productivity remains a challenge, with yields significantly lower than global benchmarks. This has highlighted the need for technology adoption, better farming practices and improved seed quality to enhance efficiency and output.

In response, the Government has been focusing on strengthening the cotton value chain through initiatives aimed at enhancing productivity, ensuring quality and promoting sustainability. Programmes such as the proposed Mission for Cotton Productivity, along with measures supporting technology upgradation, traceability systems and contamination control, are expected to improve global competitiveness and improve quality standards.

Inaddition,initiativessuchasKasturiCottonBharatarepositioning Indian cotton as a premium, traceable and sustainable global brand aligned with leading international benchmarks.

Outlook

Looking ahead, the industry is expected to benefit from rising global demand for natural and eco-friendly fibres. Continued collaboration among stakeholders, such as farmers, industry and policymakers, will be crucial in unlocking higher productivity, improving quality standards and strengthening Indias position in the global cotton textile market.

As the broader textile sector continues to expand, domestic cotton consumption is also expected to rise steadily, creating opportunities across the value chain while reinforcing Indias presence in both domestic and international cotton markets.

Opportunities and challenges

Opportunities

Strong Domestic Demand: Rising income levels, a growing middle class and evolving consumer preferences continue to support demand for Indian textiles and apparel.

Shift in Global Sourcing Preferences: Heightened labour costs in Vietnam and political unrest in Bangladesh are positioning India as an ideal sourcing destination among global buyers. In addition, potential US tariffs on Chinese textiles may further divert orders to Indian producers.

Free Trade Agreements (FTAs) with Consuming Countries:

The India-UK and EU FTA is expected to augment textile exports by eliminating import tariffs on textiles and apparel, thereby improving margins and competitiveness. Ongoing trade negotiations with other countries are expected to further enhance the global competitiveness of Indian textiles.

Government Initiatives: Government initiatives such as the PLI Scheme and Mega Integrated Textile Region and Apparel (MITRA) Parks are aimed at enhancing global competitiveness, attracting investments and supporting employment generation across the textile sector.

Sustainability and Revival of Indigenous Cotton: The introduction of Kasturi Cotton as a cleaner and greener alternative is aimed at reducing environmental impact while meeting the growing demand for sustainable cotton among global fashion brands.

Challenges

Supply Chain and Infrastructure Bottlenecks: The Indian textile sector continues to face challenges arising from supply chain fragmentation and inefficient logistics systems. Delays in raw material procurement and inconsistent quality increase production standards often lead to higher production costs and operational inefficiencies.

Tariff and Non-Tariff Barriers by Different Countries: Tariff barriers and restrictive trade practices imposed by certain countries continue to pose challenges for the growth and competitiveness of the Indian textile industry.

Technological Gaps: Limited technological innovation in domestic textile machinery, particularly in weaving and processing segments, has resulted in continued dependence on expensive imported machinery.

Labour Issues and Skill Shortages: Despite being a labour-intensive sector, the industry continues to face labour shortages and the availability of skilled employees.

Environmental Sustainability and Regulatory Compliance:

Increasing environmental concerns, including water and air pollution and greenhouse gas emissions, have led to stricter regulatory oversight and compliance requirements, which impact textile production.

Company overview

Nitin Spinners Limited (‘the Company) is one of the leading integrated textile manufacturer in India, specialising in cotton and blended yarns, knitted fabrics and finished woven textiles. The Company operates state-of-the-art spinning, weaving and finishing facilities, enabling high operational efficiency and consistent product quality.

With headquarters in Bhilwara, Rajasthan, the Companys diversified product portfolio serves both domestic and international markets, supported by a strong focus on value addition, continuous product development and sustained investment in modern technologies. The Company has established a well-diversified global presence across Asia, Europe, Latin America and Africa, positioning itself as a reliable partner in the global textile industry.

Its operations are supported by disciplined financial management, a robust product mix and strategic proximity to raw material sources and key logistics hubs, supporting sustained growth and profitability. Ongoing capital investments aimed at expanding capacity and improving efficiencies are expected to enhance cost competitiveness and position the Company to benefit from emerging opportunities in global supply chains and favourable trade dynamics, strengthening its position in the textile sector.

Segment wise Performance

The Company operates in a single business segment, i.e., Textiles, hence segment wise performance is not reported. However the product-wise revenue bifurcation is presented below:

Strategic Capital Expenditure

The Company is undertaking a strategic capacity expansion to strengthen its integrated textile operations and enhance its presence in value-added segments. The expansion includes an additional 22,400 MTPA spinning capacity and weaving and finishing fabric capacity of 35 million metres per annum. Nearly 60% of the incremental spinning output is expected to be utilised in-house for fabric manufacturing, supporting greater integration across operations. This approach is expected to improve the margin profile while enabling the Company to broaden its product portfolio, enter new markets and focus on premium and value-added offerings. The total project cost is estimated at approximately Rs. 1,120 crores and will be funded through a mix of internal accruals and term debt.

In line with its sustainability focus, the Company is also investing in renewable energy and power efficiency initiatives, These initiatives aim to reduce operational costs, lower carbon footprint and support responsible sourcing practices.

The project will further benefit from incentives under the Rajasthan Investment Promotion Scheme (RIPS) 2024, including interest subsidy, capital subsidy and electricity duty benefits, thereby strengthening overall project viability and supporting long-term value creation.

Financial overview

Financial Performance

Particulars	FY 2025-26	FY 2024-25
Revenue from operations	3213.87	3305.65
Other income	5.01	3.60
Total income	3218.88	3309.25
Earnings before interest, tax and Depreciation and Amortization	457.75	475.02
Profit for the Year	177.55	175.43
EPS (Basic) (in INR)	31.58	31.20

Key financial ratios

Particulars	FY 2025-26	FY 2024-25	% change	Reason to change
Inventory turnover	5.29	5.64	-6.21%	marginally lower improved
Interest coverage ratio	6.46	5.26	+22.81%
Current ratio	1.53	1.71	-10.53%	Last year long term surplus funds deployed in Expansion Project
Long Term Debt equity ratio	0.49	0.62	-20.97%	Decreased due to repayment of Term Loan
Debtors turnover	7.46	8.80	-15.23%	Average credit period increased due to challenging market conditions marginally reduced
Operating profit margin	14.22%	14.35%	-0.91%
Net profit margin	5.52%	5.31%	+3.95%	-
Return on Average net worth	12.76%	14.28%	-10.64%	Reduced due to lower margins in challenging market conditions

Risk management

Risk management is an integral part of the Companys governance framework, supporting the achievement of strategic objectives while safeguarding value, assets and reputation. The Company follows a structured approach to identifying, assessing and mitigating risks across its operations and business environment.

The key risks identified by Nitin Spinners Limited, along with the measures adopted to address them, are outlined below

Risk	Impact	Mitigation
Competition risk	Increased competition may reduce returns on investment, market share and profit margins.	The Company addresses this risk through continued focus on value addition, product quality, customer service, a diverse product portfolio and cost efficiency, while also expanding its customer base.
Foreign currency exchange risk	Fluctuations in the rupee may affect earnings, as a significant portion of the Companys revenue is derived from exports.	It follows a structured forex hedging policy to manage exposure to currency fluctuations.
Raw material price inflation risk	Volatility in cotton prices may adversely affect profitability.	The Company closely monitors cotton price trends and maintains a disciplined inventory approach to manage price fluctuations.
Reputation risk	Delays in delivery or inconsistencies in product quality may affect stakeholder confidence and business operations.	Nitin Spinners maintains strict quality control systems and ensures adherence to delivery timelines to meet stakeholder expectations.
Customer concentration risk	Dependence on a limited number of customers may lead to revenue fluctuations.	It continues to diversify its customer base across different geographies to reduce reliance on any single customer.
Tariff and Trade Policy Risk	Uncertainties in global trade policies and tariff structures may weaken export demand and exert pressure on margins.	The Company is diversifying into lower-tariff markets, strengthening its presence EU and UK regions and balancing export exposure with increased focus on domestic demand.

Business Outlook

The Company aims to strengthen and consolidate its leadership position through consistent growth, supported by a continued focus on improving cost and production efficiencies. The strategy includes doubling fabric capacity to target higher-margin segments and expanding the proportion of value-added products across yarns and fabrics. With an established presence in finished fabrics, the Company is strengthening its portfolio by expanding from formalwear to casualwear, including menswear, womenswear and kidswear, while enhancing multi-fibre options. Ongoing new product development and reengineering will help address evolving market demand.

In addition to business expansion, sustainability remains a key focus area. The Company is investing in sustainability and renewable energy, including solar power, while adopting reprocessing waste to optimise raw material usage and costs. Backed by disciplined capex, prudent working capital management and support from initiatives such as the Rajasthan Investment Promotion Scheme 2024, the Company remains well-positioned to drive sustained profitability and long-term growth.

Environment and safety

Nitin Spinners Limited continued to strengthen its sustainability roadmap through focused investments in renewable energy and resource-efficient operations aimed at reducing its overall carbon footprint. During the year, the Company announced renewable energy capex of approximately 230 crores towards captive solar power projects. In addition, the Company increased its investments in wind-solar hybrid SPVs to further enhance the share of green energy in its overall power mix to approx. 50%.

Alongside its renewable energy initiatives, the Company promoted the use of sustainable fibres such as BCI, organic and recycled fibres as part of its responsible manufacturing practices. It also undertook multiple resource conservation measures including installation of a zero liquid discharge system, sewage water treatment plant and rainwater harvesting systems to improve water efficiency. Further, the Company continued to maintain strong operational discipline and workplace practices focused on ensuring a safe and secure working environment across its manufacturing facilities.

Corporate Social Responsibility (CSR) Initiatives

The Company continued its CSR initiatives with a focus on creating long-term value for employees and the surrounding communities. It supported opportunities for women and contributed to employment generation, aiding local economic development. Key initiatives included the construction of a womens hostel in Bhilwara and contributions towards cotton development and research.

The Company also supported infrastructure development in rural areas, building roads, drainage systems and water harvesting projects as well as improving access to essential facilities. In the area of education, the Company promoted education of differently-abled children and supported the construction of school rooms and hostels for higher studies.

Human resources

The Company reported strong operational performance, supported by efficient execution and effective utilisation of expanded capacities. Its workforce remained integral to maintaining stable growth in a dynamic business environment, with improved production volumes across yarn and fabric segments indicating efficient manpower deployment and ongoing skill development.

Alongside investments in capacity expansion, sustainability and value addition products, the Company maintained its focus on employee engagement and operational efficiency. Its human resources practices continued to support a performance-oriented work culture aligned with evolving business requirements.

Going forward, the Companys employees will continue to play a critical role in supporting innovation, maintaining product quality and enabling growth across domestic and international markets.

As on 31st March 2026, the Company had a total employee strength of 6693.

Internal control and their adequacy

Nitin Spinners maintains effective internal control systems, which are consistently enhanced and adjusted to adapt to evolving business landscapes, as well as statutory and accounting standards. The Company possesses a strong Management Information System, which plays a vital role within this control framework. The Audit Committee of the Board of Directors regularly evaluates the efficiency and efficacy of these internal control systems and offers recommendations for enhancement where necessary. During the past year, the internal control system underwent testing, revealing no significant flaws in either design or implementation.

Cautionary Statement

The passages in the Management Discussion and Analysis outlining the Companys goals, forecasts, assessments and anticipations may qualify as forward-looking statements under relevant laws and regulations. Actual outcomes might significantly deviate from those stated or implied. Key factors that could impact the Companys activities include the availability and cost of raw materials, demand and pricing trends in the Companys main markets, changes in governmental regulations and tax structures, economic conditions in India and in the countries where the Company operates, along with other related factors.

	For and on Behalf of the Board of Directors
	Dinesh Nolkha	Nitin Nolakha
Place : Hamirgarh, Bhilwara	Chairman & Managing Director	Managing Director
Date : 08th August, 2026	(DIN – 00054658)	(DIN – 00054707)
Registered Office :
16-17 KM Stone, Chittor Road,
Hamirgarh, Bhilwara - 311025