Nitin Spinners Ltd Management Discussions

Economic overview Global economy

In CY 2024, the global economy sustained its growth trajectory, recording a growth rate of 3.3%, despite on-going geopolitical tensions, shifting trade dynamics, realignment of supply chains and alterations in monetary policy. In response to these headwinds, governments worldwide prioritised policy reforms and aimed at prioritising innovation, enhancing supply chain resilience and promoting economic diversification to secure long-term stability.

Inflationary pressures eased considerably over the year, with global inflation declining from 6.6% in CY 2023 to 5.7% in CY 2024. This decline was primarily due to effective monetary interventions and greater stability in energy markets, which contributed to price stabilisation and supported a broader economic rebound. Emerging Markets and Developing Economies (EMDEs) outpaced advanced economies with a growth rate of 4.3%, compared to 1.8% in the latter. Their strong performance was catalysed by robust domestic demand, increased Foreign Direct Investment (FDI) and a strategic pivot towards reducing reliance on external trade.

Outlook

The global economy is projected to expand at a measured pace, with growth estimated at 2.8% in CY 2025 and 3.0% in CY 2026. This outlook is supported by a gradual decline in inflation and the implementation of targeted policies by Central Banks worldwide. Emerging markets are expected to maintain stable momentum with a growth rate of 3.7%, while developed economies are likely to experience a slow but steady recovery, reaching 1.4% growth in CY 2025.

As inflation is forecast to ease to 4.2% in CY 2025 and further to 3.5% in CY 2026, consumer expenditure is expected to strengthen. Despite recent hikes in tariffs by USA and the implementation of protectionist measures across several geographies, the global economy remains interconnected and resilient.

In response to uncertainties in global trade, governments and businesses are adapting by tapping into new markets and enhancing supply chain efficiencies. Additionally, a sharper focus on boosting productivity through technological innovation, improved workforce health and smarter infrastructure is predicted to catalyse sustained growth and offer a pathway to renewed global progress.

Indian economy

Indias economy grew at a rate of 6.5% in FY 2024-25, despite global challenges, such as geopolitical conflicts, supply chain disruptions and shifting trade dynamics. This performance was driven by targeted government measures, particularly the allocation of H11.21 Lakhs Crores in the Union Budget for infrastructure and rural connectivity. Strategic capital investments also played a key role in containing the fiscal deficit at 4.7% of GDP, thereby providing significant scope to boost demand and stimulate economic growth.

Indias manufacturing sector, along with supportive government measures played a crucial role in expediting economic growth and bolstering employment opportunities. India has now become the 4th largest economy of the world, ahead of Japan. The countrys per capita income has also doubled in last 10 years.

Outlook

Despite global uncertainties, India is predicted to sustain its growth trajectory, supported by strong domestic demand, disinflationary trends and a favourable macro-economic environment like sustained domestic and foreign investments, robust manufacturing growth and improvement in trade and financial services. The governments continued focus on capital expenditure, improving rural demand and the rapid increase of digital and physical infrastructure are expected to further improve economic growth and social well-being. As supply chains stabilise and input costs moderate, industries integrated into essential services and everyday consumption are well- positioned to benefit from heightened demand and enhanced operational efficiency.

The recent repo rate reduction by the Reserve Bank of India (RBI) is set to inject liquidity, enhance credit access and boost market sentiment. Simultaneously, the government is adopting a calibrated approach to the evolving global tariff landscape to protect national economic interests. Moreover, the UK Free Trade Agreement (FTA) aims to enhance bilateral trade by reducing tariffs, streamlining customs procedures and encouraging investment flows. It offers expanded market access for goods and services, demonstrating stronger economic ties and mutual growth opportunities.

Global textile and apparel industry

The global textile industry, valued at US $ 1,976.84 billion in FY 2024, exhibited steady growth driven by the increasing demand for natural fibres. Additionally, the Asia Pacific region, remained a dominant market owing to its easy access to raw materials, a young population driving demand for fashionable apparel and significant government investments in countries, such as India, China and Bangladesh. The industry is highly fragmented, with a broad spectrum of offerings, which spans clothing and home decor to technical and medical textiles. Moreover, it has major players continuously adopting strategies to strengthen their market positions.

Globally, the textile sector benefited from rising consumer awareness of sustainable and eco-friendly products, leading to stricter regulations and a shift towards clean production techniques. North America is projected to be the fastest-growing region while Europe exhibits significant growth potential, supported by demand for organic fabrics and favourable trade policies.

Outlook

The global textile industry valued at an estimated US$ 2,123.72 billion in 2025, is poised for sustained expansion at a Compound

Annual Growth Rate (CAGR) of 7.35% through 2034. The sector is predicted to capitalise on trends towards sustainable practices. While challenges related to production costs and raw material availability persists, sustained investments in technology, research and development, evolving consumer preferences for eco-friendly and high-performance textiles are set to fuel the industrys growth momentum in the years ahead.

Indian textile and apparel industry

The textile and apparel industry being a major economic driver, contributes significantly to the nations GDP and employment generation. As one of the largest sources of employment after agriculture, the sector engages over 45 million people directly.² The industry witnessed steady growth 2024, with the market value reaching an estimated US$ 222.08 billion and is projected to sustain its growth in the upcoming years.³ This growth is expected to be propelled by rising domestic consumption, with Indias expanding middle class fuelling demand for high-end and branded apparel and the exponential rise in online retail that has made fashion more accessible across both urban and rural markets. The sector benefits from a unique blend of traditional craftsmanship and modern innovation, displayed at landmark events like Bharat Tex 2025, which drew global attention to Indias capabilities in sustainable textiles.

Government initiatives have been crucial in shaping the industrys trajectory. Schemes such as the PM MITRA Parks and the Production Linked incentives (PLI) programme have enhanced infrastructure, encouraged large-scale production of man-made and technical textiles thereby, improving the sectors global competitiveness. Indias diverse product range and a strong push for sustainability and digitalisation, have positioned the country as an emerging leader in the global textile and apparel market.⁴

2https://www.pib.gov.in/PressReleasePage.aspx?PRID=2117470

3https://www.imarcgroup.com/indian-textiles-apparel-market

4https://www.pib.gov.in/PressReleasePage.aspx?PRID=2104423#

Outlook

The textile and apparel industry stands as a key driver of economic growth. However, it has reinforced its global market presence as well. The sectors export potential strengthened, supported by expanded trade alliances, improved infrastructure and a favourable policy environment. Also, government support, technological advancement, rising consumer demand and FTA major consuming countries has set Indias textile and apparel industry for a high growth trajectory, thereby, propelling sustained expansion and innovation in the forthcoming years.

Indian cotton textiles industry

Cotton is a major commercial crop in India and contributes about 24% of the total cotton production of the world. It provides employment and income for millions of farmers and workers across the country. India holds the largest cotton acreage in the world. It also contributes to the countrys foreign exchange earnings through the export of raw cotton, processed materials, and finished textile products.

The Indian cotton textiles industry experienced moderate growth in 2024-25. Cotton prices remained largely stable during the year contributing to more predictable input costs. However at the end of the fiscal, domestic cotton prices increased due to sharp decline in estimated domestic cotton output to 29.14 million bales against earlier estimates of 31.5 million bales. Government of India has launched a H600 Crores, five-year Cotton Mission aimed at increasing productivity, especially for extra-long staple cotton and promoting sustainable cotton.

A rebound in exports and favorable domestic demand are expected to drive Indias cotton yarn industry to a higher revenue growth in the fiscal 2025-26, up from a modest 2-4% growth in the previous fiscal.

Strong Domestic demand

Increasing demand in domestic market due to rising income levels and growing middle class, changing taste and preferences, continues to drive demand for Indian Textiles and apparel.

Shift in global sourcing preferences

Heightened labour rates in Vietnam and political unrest in Bangladesh position India an ideal sourcing destination among global buyers. Moreover, possible US tariffs against Chinese textiles may divert orders to Indian producers.

Free Trade Agreement (FTA) with various consuming countries

The newly signed India-UK FTA is expected to augment textile exports to the UK by removing import tariffs on textiles and apparel. Consequently, it will potentially enhance Indian textile exporters profit margins, further propelling competition in the UK market. Further trade agreements under negotiation with other countries, will enhance competitiveness of Indian Textiles

Government initiatives

The Government of India has come up with a number of initiatives to support the textile industry, such as the PLI Scheme and Mega Integrated Textile Region and Apparel (MITRA) Parks. This will enable the textile industry to become globally competitive, boost employment generation and attract investments in value added segments.

Sustainability and revival of indigenous cotton

Government of India has introduced Kasturi Cotton, a cleaner, greener alternative. This eco-friendly cotton from India is designed to reduce environmental impact while meeting the growing demand for sustainable cotton for fashion brands.

Supply Chain and Infrastructure Bottlenecks

The Indian textile sector is challenged by supply chain fragmentation and inefficient logistics systems. Delays in raw material procurement and inconsistent quality further heighten production costs.

Tariff and Non-tariff Barriers by different countries

Tariff barriers and other restrictive trade practices by certain countries poses challenges for growth and competitiveness of Indian Textiles Industry

Technological gaps

Technological innovation in Domestic Textiles Machinery is limited especially in weaving and processing segments resulting into import of highly expensive imported machinery.

Labour issues and skill shortages

Despite being a labour-intensive sector, the Indian textile industry struggles with shortages of labour and absence of skilled employees.

Environmental sustainability and regulatory compliance

The textile industry is a major source of environmental pollution which includes water and air pollution and greenhouse gas emissions. Environmental sustainability concerns in India have resulted in stricter regulatory oversight and compliance rules, which hinder textile production.

Company overview

Nitin Spinners Limited, headquartered in Bhilwara, Rajasthan, has established itself as one of the leading integrated textile manufacturers in India, specialising in cotton and blended yarns, knitted fabrics and finished woven textiles. Since its inception, the Company has demonstrated a strong commitment to innovation and operational excellence, with its state-of-the-art spinning, weaving and finishing facilities that ensure high efficiency and consistent product quality. Its strategic focus on value addition, continuous product development and investment in advanced technology has enabled Nitin Spinners to meet the evolving demands of both domestic and international markets.

With a well-diversified export base spanning Asia, Europe and Latin America (LATAM), African countries, Nitin Spinners has positioned itself as a trusted partner in the global textile industry. The Companys disciplined financial management and robust product mix, combined with its proximity to raw material sources and key logistics hubs, have supplemented sustained growth and profitability. Recent capital investments are set to further expand capacity, enhancing cost efficiencies and enabling Nitin Spinners to capitalise on emerging opportunities in global supply chains and favourable trade agreements thereby reinforcing its leadership in the textile sector.

Segment wise performance

The company operates in single business segment (Textiles). The product wise revenue bifurcation is as under;

Financial performance

Key financial ratios

Risks and concerns

Risk management is an important part of the governance system, contributing to the achievement of strategic objectives and protecting the value, assets and reputation of the organisation. Below are some risks identified by Nitin Spinners along with their corresponding mitigation strategies:

Environment and safety

Nitin Spinners Limited reinforced its commitment to environmental sustainability and workplace safety through multiple strategic initiatives. The company continued to embed eco-friendly practices by increasing the use of sustainable fibers such as BCI, organic, regenagri cotton and recycled cotton/polyester which now constitute about 43% of its product line, aligning with global trends toward responsible sourcing and reduced environmental impact. Additionally, the expansion of renewable energy capacity to 18.8 MW emphasizes the companys focus on minimizing its carbon footprint and operational costs. On the safety front, the company maintained rigorous operational discipline, leveraging modern infrastructure and technology to ensure a safe working environment for its employees. These ongoing efforts reflect the companys broader ESG goals and its dedication to sustainable growth, positioning it as a responsible leader in the textile industry.

Corporate Social Responsibility (CSR) Initiatives

The Company continued its dedication to corporate social responsibility by creating meaningful, long-term benefits for its employees and the surrounding communities. It provides empowering opportunities for women and generates stable employment that supports local economic growth. Key initiatives include the construction of a womens hostel in Bhilwara and significant efforts toward cotton development and research. The Company also facilitated infrastructure development in rural areas, including roads, drainage systems, and water harvesting projects, thereby enhancing the quality of life and resilience of local communities. Additionally, it promoted education for differently-abled children and supported the construction of school rooms and hostels for higher studies. Through these initiatives, the Company aims to promote long-term, constructive change for the environment and society.

Human resources

The Company demonstrated robust operational performance, underpinned by disciplined execution and optimal utilization of expanded capacities. The companys workforce played a pivotal role in supporting stable, controlled growth amid a dynamic business environment. Enhanced production volumes across yarn and fabrics segments reflected effective manpower deployment and skill development initiatives. Strategic investments in capacity building, sustainability, and value addition were complemented by a continued emphasis on employee engagement and operational efficiency. As the company looks ahead, its human resources remain central to driving innovation, maintaining high standards of quality, and supporting the companys growth ambitions in both domestic and international markets.

The company has total employee strength of 6736 as on 31st March 2025

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, offering recommendations for enhancement and reinforcement where necessary. During the past year, the internal control system underwent testing, revealing no significant flaws in either design or implementation. India is the six largest embodied in various transcript and also various other activities.

Cautionary statement

The passages found in the Management Discussion and Analysis, which outline the Companys goals, forecasts, assessments, anticipations, might qualify as forward-looking statements according to relevant laws and regulations. Actual outcomes might significantly deviate from what is either directly stated or indirectly implied. Key determinants that could impact the Companys activities encompass the availability and costs of raw materials, fluctuating demand and pricing trends in the Companys main markets, alterations in governmental regulations and tax structures, economic shifts within India and the nations where the Company operates, along with other ancillary factors.