Rachit Prints Ltd Management Discussions

1 INDUSTRY OVERVIEW

The global economy continued to operate in a dynamic and challenging environment during the financial year 2025-26, with economic activity influenced by geopolitical developments, inflationary pressures, changing interest-rate conditions, commodity price fluctuations and evolving global trade patterns . While global economic activity remained resilient, uncertainties relating to international trade, supply chains and consumer demand continued to impact businesses across various sectors. These developments have a direct bearing on the home furnishing and textile industry, particularly in terms of raw material costs, production expenses, freight costs and demand from domestic as well as international markets.

Major economies such as the United States, China and countries across Europe continued to remain important markets for global manufacturing and consumer products. Changes in consumer spending, housing activity and purchasing patterns in these economies have an impact on the demand for home furnishing products, including mattresses, bedsheets, blankets, comforters and related textile products . At the same time, gradual stabilisation in global supply chains and continued consumer demand for comfortable, durable and aesthetically appealing home furnishing products provide opportunities for manufacturers to expand their product offerings and customer base.

For the Company , which is primarily engaged in the manufacturing and supply of mattress- related fabrics, bedsheets, blankets, comforters and other home furnishing products , the

changing global environment presents both opportunities and challenges. Increasing consumer focus on comfort, quality, design, durability and customised home furnishing products is

expected to support demand for value-added products. However, fluctuations in the prices of cotton, yarn and other textile raw materials, energy costs, logistics expenses and changes in consumer demand may continue to affect operating margins. The Company remains focused on maintaining product quality, improving manufacturing efficiency, developing customised

products and strengthening its customer relationships to effectively respond to the evolving market environment.

2 Industry Structure and Development

The Indian textile and home furnishing industry continues to be an important segment of the Indian economy, supported by a well-established value chain covering fibres, yarn, fabrics, home textiles, made-ups and finished furnishing products . India has a strong manufacturing base, availability of diverse raw materials, skilled manpower and a large domestic consumer market, providing a favourable foundation for the continued development of the sector. The industry is increasingly moving towards value-added, design-oriented and quality-focused products , driven by changing consumer preferences and increasing demand for comfortable, durable and aesthetically appealing home furnishing products.

During FY 2025-26 , the Indian textile and apparel sector continued to demonstrate resilience amid changing global market conditions. Indias exports of textiles and apparel, including handicrafts, stood at approximately ^3,25,339 crore , registering a growth of 1.8% over ^3,19,573 crore in FY 2024-25. Textile and apparel exports recorded growth across more than 100 international markets , reflecting the continued competitiveness and diversification of Indian textile products. Within the export basket, ready-made garments, cotton textiles and man-made textiles remained the major contributors. During FY 2025-26, exports of readymade garments were approximately ^1,39,350 crore , cotton textiles approximately ^1,02,427 crore , man-made textiles approximately ^46,254 crore , while carpet exports stood at approximately ^12,887 crore .

The domestic home furnishing segment, comprising blankets, mats, carpets, bedsheets, comforters and other household textile products , continues to benefit from urbanisation, changing lifestyles, increasing disposable incomes and evolving consumer preferences. Consumers are increasingly seeking products offering comfort, quality, durability, attractive designs and affordability , creating opportunities for manufacturers to develop differentiated and value-added products. The gradual expansion of organised retail, e-commerce and wider distribution networks is also providing manufacturers with opportunities to reach a broader customer base in domestic as well as international markets.

At the same time, the industry continues to face challenges including fluctuations in the prices of cotton, yarn and other raw materials, energy and logistics costs, changing global demand, international competition, technological requirements and geopolitical uncertainties . The Government continues to support the development and modernisation of the textile sector through initiatives such as PM MITRA Parks, the Production Linked Incentive (PLI) Scheme for Textiles, the National Technical Textiles Mission and SAMARTH , aimed at strengthening domestic manufacturing, encouraging technology adoption, skill development and improving Indias global competitiveness.

For the Company, which is primarily engaged in the manufacturing and supply of blankets, mats, carpets, bedsheets and other home furnishing products , the evolving industry environment presents opportunities for product diversification, quality enhancement, technology upgradation and expansion of its customer base . The Company intends to leverage its manufacturing capabilities and customer relationships to respond to changing market requirements while maintaining focus on cost efficiency, product quality, innovation, timely delivery and customer satisfaction . These factors are expected to remain important for sustaining the Companys competitiveness and supporting its long-term growth.

3 Investments and Key Developments:

During the financial year under review, the Company continued to focus on strengthening its manufacturing capabilities and improving operational efficiency in the home furnishing and textile segment , particularly in relation to its products such as blankets, mats, carpets, bedsheets and other allied products . The Company also undertook procurement of machinery, equipment and spare parts , including imports, as required for supporting its manufacturing operations, maintenance and technological capabilities. These initiatives are aimed at improving production efficiency, maintaining product quality and enabling the Company to meet evolving customer requirements. The Company also successfully completed its Initial Public Offering (IPO) of 13,09,000 Equity Shares , which were allotted on 04th September, 2025 , and subsequently listed on the BSE SME Platform with effect from 08th September, 2025 , marking a significant milestone in its growth and strengthening its capital base and market visibility.

The broader textile sector also witnessed continued investment and policy support during the year. The Governments PM MITRA Scheme is being implemented with an outlay of ^4,445 crore, while the PLI Scheme for Textiles has continued to attract investments towards MMF fabrics, apparel and technical textiles. These developments are expected to strengthen Indias textile manufacturing ecosystem and create opportunities across the textile value chain.

4 The Company:

The Company is a textile and home furnishing products manufacturing company , primarily engaged in the manufacturing and supply of blankets, mats, carpets, bedsheets, comforters

and other allied home furnishing products . The Company has developed its capabilities to manufacture and supply products catering to the requirements of its customers, with a focus on quality, design, comfort and durability . Its manufacturing operations enable it to respond to varying customer requirements and market conditions while maintaining focus on operational efficiency and timely execution of orders.

During the year under review, the Company continued to strengthen its business operations and manufacturing capabilities. The Company also procured machinery, equipment and spare parts, including imports , as required for its manufacturing operations, maintenance and capacity enhancement. These initiatives are intended to support production efficiency, maintain consistent product quality and enable the Company to meet evolving market and customer requirements.

The Company successfully completed its Initial Public Offering (IPO) during the financial year, pursuant to which 13,09,000 Equity Shares were allotted on 04th September, 2025 at an issue price of ^149/- per Equity Share , comprising a face value of ^10/- and a premium of ^139/- per share. The Equity Shares were subsequently listed and admitted to dealings on the BSE SME Platform of BSE Limited with effect from 08th September, 2025 . The successful listing represents an important milestone for the Company and has strengthened its capital base, enhanced its market visibility and broadened its investor reach.

5 COMPANYS PERFORMANCE

During the financial year 2025-26 , the Company continued to focus on strengthening its operations in the textile and home furnishing segment , with its principal products comprising blankets, mats, carpets, bedsheets, comforters and other allied products . The Company witnessed a growth in its operating performance during the year, supported by continued demand for its products and focused efforts towards improving manufacturing and operational efficiency.

The Income from Operations (Gross) increased to *53,23,994.42 hundred during FY 202526 from *41,70,319.71 hundred in FY 2024-25, registering a growth of approximately 27.66% , while Total Revenue increased to *53,51,789.84 hundred from *41,78,427.34 hundred , representing a growth of approximately 28.09% . The Company recorded a Profit Before Tax of *6,20,989.84 hundred as compared to *6,08,970.60 hundred in the previous financial year, reflecting an increase of approximately 1.97% , while Profit After Tax stood at *4,58,198.83 hundred as against *4,56,175.99 hundred , registering an increase of approximately 0.44% . The Basic and Diluted EPS stood at *10.51 during FY 2025-26 as compared to *13.03 in the previous year.

During the year, the Company also successfully completed its Initial Public Offering (IPO) and its Equity Shares were listed on the BSE SME Platform with effect from 08th September, 2025 . The successful listing has strengthened the Companys capital base and enhanced its visibility in the market. Going forward, the Company remains focused on expanding its product portfolio, improving manufacturing efficiency, maintaining product quality, managing costs and strengthening its customer base to achieve sustainable growth.

\u2022 Bifurcation of Revenue from Operations
Particulars	FY 2025-26 (K in	FY 2024-25 (K in
	Hundreds)	Hundreds)
Sale of Manufactured Goods	52,21,629.91	41,30,322.75
Sale of Traded Goods	55,680.45	4,123.50
Job Work	34,816.66	25,435.54
Packing Charges	841.66	41.58
Freight on Sales	11,025.74	10,396.34
Total Revenue from	53,23,994.42	41,70,319.71
Operations

6 SEGMENT REPORTING

The Company is engaged in the manufacturing and trading of textile and home furnishing products, including blankets, mats, carpets, bedsheets, comforters and other allied products. The Company operates primarily in one reportable business segment, i.e., Textile and Home Furnishing Products. Accordingly, segment reporting is not applicable to the Company.

7 Dividend

No dividend has been declared for the financial year 2025-26.

8 OUTLOOK: OPPORTUNITIES, THREATS, RISKS & CONCERNS • Opportunities:

The Company operates in the textile and home furnishing segment , with its principal products comprising blankets, mats, carpets, bedsheets, comforters and other allied products . The changing lifestyle patterns, urbanisation, increasing consumer preference for quality and comfortable home furnishing products and the growth of organised retail and e- commerce provide opportunities for the Company to expand its customer base and product portfolio. The Company can further benefit from opportunities arising from product

diversification, customised products, technology upgradation and expansion into new domestic and international markets .

• Threats:

The Company operates in a competitive industry and faces competition from organised as well as unorganised manufacturers. Changes in consumer preferences, pricing pressure, increasing competition, fluctuations in demand and the entry of new players may affect the Companys market position and margins. Further, changes in international trade conditions, import-export policies and geopolitical developments may also impact the textile and home furnishing industry.

• Risks & Concerns:

The Companys business is exposed to fluctuations in the prices and availability of cotton, yarn and other raw materials , which may affect its cost of production and profitability. Other key risks include changes in energy and transportation costs, supply-chain disruptions, availability of skilled manpower, changes in regulatory requirements, technological obsolescence and fluctuations in domestic and global economic conditions. The Company seeks to mitigate these risks through efficient procurement and inventory management, maintaining customer relationships, quality control, operational efficiencies and continuous evaluation of market and business conditions .

• Outlook:

The Company remains cautiously optimistic about the long-term prospects of the textile and home furnishing industry. With its focus on blankets, mats, carpets, bedsheets and allied products , the Company intends to strengthen its manufacturing capabilities, improve product quality, diversify its product range and expand its market presence. The successful completion of the Companys IPO and listing on the BSE SME Platform in September 2025 has further strengthened its capital base and market visibility. Going forward, the Company will continue to focus on sustainable growth, operational efficiency, cost management and meeting evolving customer requirements.

9 INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has established and maintained an adequate internal control system commensurate with the size, scale and nature of its business operations. The internal controls are designed to ensure proper authorisation, safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, operational efficiency and compliance with applicable laws and regulations .

The Company has appropriate controls and procedures covering key areas of its operations, including procurement of raw materials, inventory management, production, sales, receivables, payments, financial reporting and statutory compliances . The internal control framework also facilitates appropriate segregation of duties and authorisation of transactions, along with regular monitoring by the management. The Company maintains proper books of accounts and financial records to ensure reliability and transparency in financial reporting.

The Audit Committee and the Board of Directors periodically review the adequacy and effectiveness of the internal control framework based on management inputs, financial information and other relevant reports. The Company continues to strengthen its internal control processes in line with the growth of its business and evolving operational requirements.

Based on the assessment carried out during the year under review, the Board is of the opinion that the Company has adequate internal financial controls with reference to the financial statements , which were operating effectively during the financial year 2025-26. No material weakness in the internal control system was reported during the year under review.

10 HUMAN RESOURCES

Human resources continue to be an important part of the Companys operations and growth. Being engaged in the manufacturing of blankets, mats, carpets, bedsheets, comforters and other home furnishing products , the Company relies on a combination of skilled, semi-skilled and other personnel across its manufacturing, quality control, sales, administration and support functions.

During the year under review, the Company remained focused on maintaining a safe, healthy and supportive work environment and on ensuring effective utilisation of its human resources. The Company encourages employee development, teamwork, discipline and adherence to quality and safety standards. Appropriate attention is given to employee welfare, workplace safety and compliance with applicable labour laws and regulations.

The management believes that a committed and capable workforce is essential for maintaining product quality, operational efficiency and timely fulfilment of customer requirements .

The Company will continue to focus on strengthening its human resource capabilities and developing the skills of its employees in line with its business requirements and future growth plans.

11 OPERATIONAL AND FINANCIAL PERFORMANCE OVERVIEW (FY 2025-26)

During the financial year 2025-26 , the Company continued to strengthen its operations in the textile and home furnishing segment , with its principal products comprising blankets, mats, carpets, bedsheets, comforters and other allied products . The Company remained focused on maintaining product quality, meeting customer requirements, improving manufacturing efficiency and strengthening its market presence.

During FY 2025-26, the Company recorded Income from Operations of ^53,23,994.42 hundreds , as compared to ^41,70,319.71 hundreds in FY 2024-25, registering a growth of approximately 27.66% . The Total Revenue increased to ^53,51,789.84 hundreds from ^41,78,427.34 hundreds in the previous year, reflecting a growth of approximately 28.09% . The increase in revenue was supported by growth in the Companys core operating activities, including sales of manufactured goods, traded goods and job work.

The Company recorded a Profit Before Tax of ^6,20,989.84 hundreds during FY 2025-26 as against ^6,08,970.60 hundreds in FY 2024-25, representing an increase of approximately 1.97% . After accounting for applicable tax expenses, the Company reported a Profit After Tax of ^4,58,198.83 hundreds , compared to ^4,56,175.99 hundreds in the previous financial year, registering an increase of approximately 0.44% . The Basic and Diluted Earnings Per Share (EPS) stood at ^10.51 per Equity Share of ^10/- each as against ^13.03 in FY 2024-25.

During the year under review, the Company also successfully completed its Initial Public Offering (IPO) and its Equity Shares were listed on the BSE SME Platform with effect from 08th September, 2025 . The Company further continued to invest in and strengthen its manufacturing capabilities through the procurement of machinery, equipment and spare parts , including imports, as required. Going forward, the Company remains focused on operational efficiency, cost optimisation, product quality, product diversification and expansion of its customer base to support sustainable growth.

12 Details of significant changes in key financial ratios:

Ratio	Numerator / Denominator	Ratio (25 26)	Ratio (24 25)	% of Variation	Reason for variance in the ratio by more than 25%
(a) Current Ratio	Current Asset / Current Liabilities	3.45	1.69	104.06%	Current assets increased and current liabilities decreased
(b) Debt-Equity Ratio	Total Debts / Shareholders\u2019 Equity	0.31	0.74	-57.92%	Equity base increased
(c) Debt Service Coverage Ratio	Earnings available for debt service / Debt Service	11.12	19.71	-43.59%	Net profit increased
(d) Return on Equity Ratio (ROE)	Net Profits after taxes / Average Shareholder\u2019s Equity	0.19	0.51	-62.19%	Equity base increased
(e) Inventory Turnover Ratio	Cost of Goods Sold / Average Inventory	5.16	6.36	-18.86%	N.A.
(f) Trade Receivables Turnover Ratio	Sales / Average Accounts Receivable	5.56	5.78	-3.67%	N.A.

(g) Trade Payables Turnover Ratio	Net Credit Purchases / Average Trade Payables	22.92	5.47	318.94%	Trade Payables increased
(h) Net Capital Turnover Ratio	Revenue / Average Working Capital	1.38	1.85	-25.61%	Average working capital increased
(i) Net Profit Ratio	Net Profit after Tax / Net Sales	0.09	0.11	-21.32%	N.A.
(j) Return on Capital Employed (ROCE)	Earnings before interest and taxes / Capital Employed	0.16	0.40	-59.14%	Equity base increased
(k) Return on Investment (ROI)	Since the Company does not have any treasury investments, this ratio is not worked out.

13 CAUTIONARY STATEMENT

Statements regarding projections, estimates and expectations have been made in good faith. However, unforeseen factors may cause actual results to differ from those envisaged by the Management. Market and product information is based on various published and unpublished sources, the accuracy and completeness of which cannot be assured. The Management reserves the right to revise such statements in the best interests of the Company and its shareholders.

	By order of the Board For RACHIT PRINTS LIMITED
	Anupam Kansal	Naina Kansal
Date: 07.09.2026	Managing Director	Whole-time director
Place: Meerut	DIN:01982805	DIN:02313363