Raymond Lifestyle Ltd Management Discussions

Global Economy

The global economy demonstrated remarkable resilience in 2025, achieving a growth rate of 3.4%, despite heightened trade tensions and persistent policy uncertainty. Economic activity was supported by technology-led investments, accommodative financial conditions and targeted policy measures across major economies. 1

However, following a period of resilience in the face of elevated trade barriers and uncertainty, global activity now faces a significant headwind from the outbreak of conflict in the Middle East. With the closure of the Strait of Hormuz and damage to critical production facilities in a region central to global hydrocarbon supply, it raises the risk of a significant energy shock.

Looking ahead, the global outlook remains broadly stable, albeit cautious. Structural drivers, particularly sustained investment in technology and AI, along with continued policy support are expected to support global economic stability. Policymakers will need to encourage the diffusion and adoption of new technologies while ensuring adequate investment in skills development to support a smoother labour market transition.

Indian Economy

Despite navigating multiple headwinds, India achieved real GDP growth at 7.6% 2 , supported by robust domestic demand conditions and strong business optimism. Economic activity remained relatively resilient, with leading indicators pointing towards continued momentum in manufacturing. Within this broader growth environment, the textile and apparel sector, contributing approximately 2.3% to Indias GDP and employing over 45 million people, remained a significant beneficiary of Indias economic momentum. 3

Direct tax exemptions for the middle-income segment under the Union Budget 2025-26 supported disposable incomes, thereby strengthening consumption. Building on this, the accelerated rationalisation of GST 2.0 slabs ahead of the festive season further boosted demand, while also providing relief to MSMEs and the informal sector amid subdued external demand conditions. Against this backdrop of easing price pressures, inflation moderated to multi-year lows, enabling the Reserve Bank of India to implement a cumulative 125-basis-point rate cut in 2025 to support growth and revive credit demand.

Looking ahead, Indias growth outlook remains positive, underpinned by strong services sector, continued infrastructure investment and ongoing structural reforms. The proposed India-EU Free Trade Agreement is expected to provide access to over 99% of Indias exports, 4 while the recently concluded India-UK FTA opens further avenues for trade expansion. Continued focus on infrastructure, manufacturing, digital transformation and supply chain diversification is likely to strengthen Indias position as a global hub for production and consumption.

Industry Overview

Textile industry

The global textile market was valued at $ 1,104 Billion in CY 2025, with Asia Pacific accounting for 48.7% of the market, supported by its strong manufacturing base, cost competitiveness and growing domestic demand. 5 China, India and Bangladesh continued to maintain a significant presence owing to their extensive production infrastructure, availability of skilled labour and access to raw materials.

India remains among the largest and most diversified textile producers. Total exports, including handicrafts, increased from _3,09,859.3 crore in FY 2024-25 to _3,16,334.9 crore in FY 2025-26, registering a growth of 2.1%. 6 Government initiatives, including enhanced budgetary allocation, the Production Linked Incentive (PLI) scheme and targeted support for MSMEs, strengthened the industry. These measures are expected to support capacity expansion, productivity improvement and long-term growth.

Apparel industry

The global apparel market was valued at $ 1,749 Billion in CY 2025, with Asia Pacific accounting for 41% of the market. 7 The industry continued to witness changing consumer preferences, shorter fashion cycles and rising demand for sustainable and functional apparel.

In India, apparel consumption trend remains favourable, with volumes estimated to reach 42.69 billion pieces by FY 2030. 8 Rising incomes, urbanisation and increasing preference for branded and organised retail are expected to support long-term market growth. Manufacturers also focused on sustainable production practices and portfolio diversification.

Garmenting Industry

The global garment industry was competitive and fast-evolving, driven by changing consumer trends and increasing digital adoption. Asia-Pacific dominates global production, accounting for 65-70% of global output, supported by cost-efficient manufacturing and integrated supply chains. 9

India ranked as the third-largest garment exporter globally after China and Vietnam, with exports of $ 4.07 Billion.17 Indias Ready-Made Garment (RMG) exports during April-January FY 2026 stood at $ 13.1 Billion, registering a growth of 1.6%. 10 Export performance remained resilient despite elevated US tariffs, which impacted order flows to Indias largest market. The conclusion of the India-EU FTA is expected to provide a structural boost to the sector by improving market access and export competitiveness.

Key Government Initiatives 11

PLI Scheme- The PLI Scheme for textiles, with an outlay of Rs. 10,683 crore, aims to boost large-scale manufacturing in man-made fibre apparel and technical textiles. The scheme supports capacity expansion in the organised fabric and garmenting segments.

PM MITRA Parks- Seven Mega Integrated Textile Region and Apparel Parks are being developed across Tamil Nadu, Telangana, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh and Maharashtra, with a total outlay of Rs. 4,445 crore. Covering the entire value chain from spinning to garmenting, these integrated hubs are expected to strengthen the textile ecosystem.

National Technical Textiles Mission (NTTM)- With an outlay of Rs. 1,480 crore, the mission focuses on innovation, skill development and market creation in technical textiles. It supports the adoption of specialised fibres and value-added applications across the industry.

India-EU FTA- The agreement eliminates duties of up to 12% on Indian textile and apparel exports to the EU, which represents an import market of $ 263.5 Billion. This is expected to improve export competitiveness and create significant opportunities for garment and fabric exporters. 12

India-UK FTA- Concluded in FY 2025, the India-UK FTA eliminates tariffs on 99% of Indias exports to the UK, covering nearly the entire bilateral trade value. The agreement is expected to provide Indian exporters with a significant cost advantage over competing exporting nations.

India-EFTA TEPA- Signed in March 2024, this agreement improves market access for Indian exports to Switzerland, Iceland, Norway and Liechtenstein, supporting entry into high-value European markets.

Business Overview

Raymond Lifestyle Limited is a leading fashion and lifestyle Company with a heritage spanning more than a century. The Company has built a diversified portfolio of apparel and fabric brands across key segments of the fashion value chain. Its products are distributed through a network of over 1,650 exclusive and multi-brand outlets, along with a growing presence across large-format retail and digital channels.

Business Portfolio

Branded Textile- A market-leading business in premium suiting and shirting fabrics, supported by a broad and differentiated product offering.

Branded Apparel- Offers a diversified ready-to-wear portfolio through brands such as Park Avenue, ColorPlus, Raymond Ready to Wear, Parx and Ethnix by Raymond, catering to formal, casual, smart casual and ethnic wear categories.

Garmenting- Operates as a B2B manufacturing business supplying suits, jackets and formalwear to leading domestic and international brands.

High-Value Cotton Shirting- Manufacturers and markets premium cotton and linen shirting fabrics for international apparel brands.

Performance Review (Financial and Operational)

FY 2026 marked a defining year for Raymond Lifestyle Limited, with the Company surpassing Rs. 7,000 crore in revenue and reporting its highest-ever turnover. Performance was driven by sustained growth across both core and emerging business segments.

The legacy suiting and shirting businesses continued to deliver strong performance, with both achieving record results during the year. The apparel segment also witnessed a recovery, supported by improving market conditions and stronger consumer demand. In addition, the home business, despite being at a relatively small, contributed positively to overall performance.

Financial Performance Highlights (Consolidated, YoY)

(Rs. in Crore)

Particulars	FY 2025-26	FY 2024-25	YoY Change
Total Income	7,034	6,360	11%
EBITDA	804	651	23%
EBITDA Margin (%)	11.4%	10.2%	120 bps
PBT (Before	200	122	63%
Exceptional Items)
PBT Margin (%)	2.8%	1.9%	90 bps

Segment-wise Performance

Branded Textile: Volume growth was supported by wedding and festive season demand, along with a favourable shift towards higher-value products. Continued traction in made-to-measure and custom tailoring further supported performance. Despite elevated wool prices, the segment absorbed a significant portion of the cost increase to protect consumer price points. Revenue for the year stood at Rs. 3435 crore, with EBITDA margins of 18%.

Branded Apparel: The segment delivered steady growth, driven by strong domestic demand and improved execution across exclusive brand outlets, large-format stores and online channels. Product innovations in formal wear, particularly wrinkle-free and stretch fabrics, witnessed strong consumer acceptance. Revenue for the year stood at Rs. 1812 crore.

Garmenting: The segment faced near-term challenges, with US tariffs and deferred orders affecting revenues. In response, the Company accelerated its focus on the UK and European markets while strengthening vertical integration initiatives. Revenue for the year stood at Rs. 1066 crore.

High-Value Cotton Shirting: The segment delivered stable performance, supported by a favourable product mix and sustained demand from global brand partners. Linen remained a key growth contributor, although elevated linen fibre prices increased input costs during the year. This impact was mitigated through phased price increases, forward purchase arrangements and focused marketing campaigns. Revenue for the year stood at Rs. 818 crore.

Opportunities
Premiumisation and Casualisation-	Retail Penetration-
Rising aspirations and higher discretionary spending are driving demand for branded and premium apparel across formal and casual wear categories.	Rapid growth of organised retail is enhancing brand visibility, improving consumer access and creating new growth opportunities.
China+1 and Export Opportunity-	Government Policy Support-
Global brands are diversifying sourcing beyond China, positioning India as a preferred manufacturing alternative. India\u2019s integrated supply chain and robust raw material base provide a competitive advantage in capturing this opportunity.	Initiatives such as the PLI Scheme, PM MITRA Parks and Indias expanding FTA network arestrengtheningmanufacturing capabilities and export competitiveness, fostering a favourable environment for organised players.
Sustainability -
Increasing emphasis on sustainable materials, traceability and responsible sourcing is influencing consumer preferences and global procurement strategies. Rising demand for value-added fabrics is supporting premium positioning across domestic and export markets.

Threats and Challenges
Intense Competition-	Input Cost Volatility-	West Asia Geopolitical Conflict-	Labour Cost and Compliance-	Regulatory and Environmental Compliance-
The industry faces intense competition from global manufacturing hubs such as China and Vietnam, which benefit from scale advantage and cost competitiveness.	Cotton prices remain susceptible to fluctuations arising from weather conditions, crop cycles and geopolitical disruptions. Such volatility can increase input costs and impact margins.	Ongoing geopolitical tensions across West Asia and critical global trade corridors have elevated freight and insurance costs, extended transit timelines and disrupted supply chains. Weakening consumer sentiment in global markets may also impact export demand.	Implementation of the new labour codes is expected to increase statutory employment costs and compliance requirements across the industry.	Stricter environmental regulations, particularly for water- and chemical- intensive processes, may increase compliance costs. Adapting to evolving regulatory standards will require sustained investments across the value chain.

Risks, Concerns and Mitigations

Risk	Impact on Raymond	Mitigation
Macroeconomic Slowdown	Lower discretionary spending may affect demand across apparel and textile categories.	Strong domestic brand positioning, driven by premiumisation trends and structural shift toward casualisation.
Raw Material Price Volatility	Fluctuations in wool, cotton and flax prices may compress fabric and shirting margins.	Vertical integration and domestic sourcing provide a natural hedge against global commodity price volatility.
West Asia Geopolitical Conflict	Elevated freight costs, extended delivery timelines and weaker order flows may impact export performance.	Diversified export mix, with increasing contribution from the UK and Europe, along with favourable trade agreements.
Competitive Intensity	Increasing competition across brands, price segments and retail channels may impact volumes and market share.	Differentiated brand portfolio, omnichannel presence and AI-led capabilities, supported by an expanding large-format retail footprint.
Transition to New Labour Codes	Revised wage definitions may increase statutory obligations relating to provident fund, gratuity and leave encashment.	Compensation structures are being realigned, alongside revised actuarial valuations and upgraded digital systems to ensure seamless compliance.

Internal Control Systems and Their Adequacy

The Company maintains a robust internal control framework designed to ensure the accuracy and reliability of financial reporting, efficient operations and compliance with applicable laws and regulations. The internal audit function continuously monitors the adequacy and effectiveness of these controls, and its findings are reviewed by the Audit Committee of the Board, ensuring the highest level of oversight.

Human Resources

The Companys people strategy is aligned to the distinct requirements of each business segment, while maintaining a consistent focus on performance, accountability and capability development. FY 2026 marked a significant leadership transition with the appointment of a new CEO, CFO and CMO.

During the year, the Company also restructured its marketing and IT functions, while strengthening capabilities across digital go-to-market initiatives, supply chain management and CRM. As the business expands across categories and scales operations, talent acquisition and retention remain key priorities, backed by sustained investments in capability building and organisational depth.

Sustainability and ESG

Raymond Lifestyle Limited integrates sustainability and responsible practices across its value chain. The Companys disclosures are aligned with global frameworks, including SASB, TCFD and GRI.

Environmental

The Company made significant progress in energy efficiency, renewable energy adoption and emissions reduction during the year. During FY 2026, the share of renewable energy in the Companys overall energy mix increased by 5%-6% over the FY 2025 baseline, keeping it on track to achieve its target of sourcing 25% of total energy requirements from renewable sources by 2030. Water management and Zero Liquid Discharge initiatives are operational across key manufacturing sites. The Company also strengthened responsible sourcing practices, with wool, cotton and linen procured through certified sustainable supply chains.

Social

The Company maintained a strong focus on worker safety, fair labour practices and human rights standards across its operations and supply chain. It also advanced workforce diversity, with women accounting for nearly 48% of the overall workforce. Through established policies and oversight mechanisms, the Company promotes responsible labour practices and a safe working environment.

Governance

The Companys sustainability and risk management agenda is overseen by a Board-level ESG and Risk Management Committee, ensuring continued focus on governance, accountability and resilience. Following a ransomware incident in FY 2025, cybersecurity was elevated as a Board-governed priority, leading to the formation of a dedicated IT Committee to strengthen oversight of cybersecurity controls, risk mitigation and incident response preparedness.

Outlook

Following the recovery witnessed in FY 2026 and the completion of key organisational restructuring initiatives, Raymond Lifestyle Limited remains focused on driving sustained productivity improvements across retail and manufacturing operations. The Companys strategic priorities include:

Premiumisation and Casualisation- The Company aims to strengthen its presence in premium and bespoke segments across suiting, shirting and ethnic wear, enabling further movement up the value chain. The focus remains on expanding the casualwear portfolio while retaining a strong position in formalwear. Growth is being supported through category expansion across brands and increasing emphasis on comfort led fabrics, hybrid blends, and versatile wearability aligned with evolving consumer preferences.

Export Diversification- While the US continues to remain an important market, its contribution to the overall business is expected to moderate from historical levels over time, alongside increasing contribution from the UK and Europe. Ongoing and proposed FTAs with these regions are expected to improve competitiveness for Indian exporters by reducing duty related disadvantages and expanding market opportunities.

Digital and Supply Chain Transformation- E-commerce is being repositioned from a liquidation platform to a primary brand channel, with online sales gaining strong traction. The Company is also strengthening supply chain capabilities across warehousing, logistics and demand forecasting.

Retail Expansion- The Company plans to expand its store network in FY 2027, with all new store additions subject to rigorous viability benchmarks and clear payback criteria.

Emerging Business- The Company continues to scale emerging categories through Ethnix by Raymond and its premium innerwear business. The launch of the Chairmans Collection marks its entry into the ultra-luxury bespoke menswear segment.

Financial Discipline- The Company ended FY 2026 with a net debt-free balance sheet and a surplus cash position. Operating leverage, an improving premium product mix and higher channel efficiency are expected to support further margin expansion.

Having established a strong financial foundation in its first full year as an independently listed entity, the Company enters FY 2027 with a clear consolidation agenda. The focus is on margin expansion, retail productivity and disciplined capital allocation. Backed by a strengthened balance sheet, renewed leadership team and a well-defined strategic roadmap, the Company is well-positioned to deliver sustainable and high-quality earnings growth.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax regimes, and other statutes.