Riba Textiles Ltd Management Discussions

ANNEXURE VI TO THE DIRECTORS REPORT 2024-25

During FY 2024-25, Ribas management undertook a comprehensive strategic review aimed at strengthening the companys position as a market leader within a highly competitive industry. Recognizing the challenges posed by ongoing liberalization and intensified competition from both domestic and international players, the company maintained a proactive approach focused on product and procedural innovation.

Despite prevailing market headwinds and subdued demand, Riba successfully executed a robust innovation agenda, launching several new products aligned with evolving customer needs and industry trends. This commitment to innovation enabled the company to increase its market share and enhance its brand equity. Looking ahead, Riba remains optimistic about expanding its footprint in the export segment. The companys strategic initiatives, combined with a continuous drive for operational excellence, are expected to facilitate the capture of a substantial share in the export market. Ribas agility in responding to competitive pressures and its sustained investment in new product development position the company to capitalize on emerging opportunities, both within India and internationally.

In summary, through disciplined execution of its innovation-driven strategy, Riba is well equipped to navigate the dynamic business environment, maintain growth momentum, and deliver long-term value to stakeholders in FY 2024-25.

1. Global Textile Market Overview

The global textile market is undergoing steady expansion, driven by rising consumer demand for functional and sustainable fabrics. Innovations in raw materials, such as recycled fibers and bio-based polymers, are reshaping the industrys value chain. Rapid urbanization and growing disposable incomes in emerging economies continue to fuel volumes across apparel, home textiles, and technical textiles.

Key growth drivers:

• Urbanization and rising living standards boosting demand for home and apparel textiles

• Technological advancements in yarn spinning, weaving, and finishing enhancing productivity

• Sustainability mandates pushing adoption of eco-friendly fabrics and circular-economy models

• Digitalization in supply chains, from raw-material traceability to on-demand manufacturing

Regional dynamics:

• Asia Pacific remains the largest production hub, led by China, India, and Bangladesh

• North America and Europe focus on high-value segments like technical and smart textiles

• Latin America and Africa are emerging markets, with investments in local textile park

The global textile market size was estimated at USD 1,976.84 billion in 2024 and is predicted to increase from USD 2,123.72 billion in 2025 to approximately USD 4,016.50 billion by 2034, expanding at a CAGR of 7.35% from 2025 to 2034. The rising demand for natural fibers globally is driving the growth of the textile market.

Asia Pacific Textile Market Size and Growth 2025 to 2034

The Asia Pacific textile market size was estimated at USD 1,067.49 billion in 2024 and is predicted to be worth around USD 2,188.99 billion by 2034 at a CAGR of 7.45% from 2025 to 2034.

Terry Towel Industry in the Global Context

The global towels market, of which terry towels represent a substantial share, was valued at approximately USD 11 billion in 2023. It is projected to grow to USD 18 billion by 2032, reflecting a compound annual growth rate of 5.5 percent. This expansion is attributed to enhanced consumer focus on hygiene, rising disposable incomes, and modernization in both residential and commercial segments.

Market segmentation by material highlights cottons dominance due to its superior absorbency and softness, while microfiber and bamboo towels gain traction for quick-drying and antimicrobial properties. The hospitality sectors increasing standards for premium linens further amplify demand for high-quality terry towels.

Investments in advanced manufacturing equipment, such as rapier looms for terry towel production, underscore the industrys technological evolution. The global market for terry towel rapier looms is estimated at USD 500 million in 2025, with a forecasted CAGR of 5 percent through 2033, reaching around USD 750 million. This reflects manufacturers drive for higher production speeds, improved efficiency, and reduced maintenance costs.

Key implications for terry towel players:

• Scale up sustainable cotton sourcing and invest in renewable-energy-powered mills

• Differentiate through value-added features such as quick-dry and antimicrobial finishes

• Expand presence in fast-growing regions like Southeast Asia and Latin America

• Leverage advanced loom technologies to optimize cost and quality

Beyond these figures, monitoring shifts in consumer preferences?such as demand for organic textiles and digital customization?will be critical. Terry towel manufacturers should also watch regulatory developments around chemical use and wastewater treatment, ensuring compliance while pursuing operational excellence.

2. Indian Textiles Market (Towels-Market Size)

Indias textile industry remains a cornerstone of the national economy, contributing approximately 2% to GDP and accounting for over 12% of total export earnings. The sector is characterized by its vertically integrated value chain?from fiber to finished goods?and its adaptability to global trends in sustainability, digitalization, and product innovation.

Home Textiles and Terry Towel Segment: Strategic Relevance

The Indian towel and linen market was valued at USD 621 million in 2024, and is projected to reach USD 1,525 million by 2033, growing at a CAGR of 10.5%. Within this, terry towels represent a high-margin, high- growth category, driven by both export demand and rising domestic consumption.

Export Dynamics:

• India accounts for 39% of cotton towel imports to the US, making it a dominant global supplier

• Despite duty disadvantages in Europe, Indian terry towel exports remain competitive due to quality and cost-efficiency

• The US continues to be the largest export destination, contributing over 60% of Indias home textile exports

Domestic Market Trends:

• Branded terry towels are gaining traction in Indias urban retail and hospitality sectors

• Premiumization and hygiene awareness are driving demand for high-GSM, quick-dry, and antimicrobial variants

• Online retail expansion is reshaping consumer access and preferences

Sustainability and Innovation:

The terry towel segment is undergoing a transformation aligned with global ESG expectations:

• Adoption of organic cotton, bamboo fibers, and recycled yarns is accelerating

• Certifications like GOTS and OEKO-TEX are becoming essential for export competitiveness

• Indian manufacturers are investing in energy-efficient looms, solar-powered operations, and zero-liquid discharge systems to meet sustainability benchmarks

3. Government Initiatives:

Government Initiatives Supporting Terry Towels and Allied Textile Products

The Government of India continues to play a pivotal role in strengthening the textile industry, with targeted interventions that directly benefit terry towel manufacturers and allied segments. These initiatives aim to modernize infrastructure, enhance competitiveness, promote sustainability, and expand global market access

A. Budgetary Allocations and Policy Support

• Increased Budget Allocation: The Ministry of Textiles received a 19% increase in budgetary allocation for FY 2025-26, rising to Rs. 5,272 crore, signaling strong policy commitment to sectoral growth.

• Cotton Mission: A five-year Cotton Mission with Rs. 600 crore allocation focuses on improving productivity of extra-long staple (ELS) cotton?critical for premium terry towel production. It promotes clean cotton cultivation and scientific agronomy practices to ensure raw material quality and availability2.

B. Technology Up gradation and Duty Exemptions

• Customs Duty Exemption on Looms: To encourage modernization, the government has fully exempted customs duty on shuttle-less looms?specifically Rapier Looms (below 650 m/min) and Air Jet Looms (below 1,000 m/min). This directly benefits terry towel manufacturers investing in high-speed, energy- efficient weaving technologies.

• Revised Duty on Knitted Fabrics: Basic Customs Duty (BCD) on knitted fabrics has been revised to 20% or Rs. 115/kg, whichever is higher, to curb cheap imports and protect domestic producers of allied textile products.

C. MSME and Export Facilitation:

• Enhanced Credit Access for MSMEs: Micro enterprises in textiles now have access to credit cards with limits up to Rs. 5 lakh, facilitating working capital for small-scale towel and linen producers.

• Extended Export Timelines for Handicrafts: Exporters of duty-free input-based handicrafts? including allied products like decorative towels?can now avail extended timelines of up to 15 months, improving flexibility and compliance.

D. Sustainability and Skill Development

• Support for Green Manufacturing: Incentives under schemes like PLI for Textiles and PM MITRA Parks promote sustainable production, energy-efficient machinery, and integrated textile hubs.

• Skill Enhancement Programs: Through SAMARTH, the government continues to train workers in advanced textile operations, including towel weaving, finishing, and quality control.

These initiatives collectively enhance the competitiveness of Indian terry towel manufacturers by reducing input costs, improving raw material quality, and enabling technology absorption. Riba Textiles Ltd remains aligned with these policy directions, leveraging government support to drive modernization, sustainability, and export growth

4. Road Ahead: Towel Industry Outlook -

The towel industry is poised for strategic transformation, driven by evolving consumer preferences, sustainability imperatives, and global market shifts. Key growth vectors include:

• Hospitality & Wellness Expansion: Rising international travel, wellness tourism, and premium hotel refurbishments are expected to boost demand for high-quality, customized towels.

• Export Opportunities: Emerging markets in Africa, Southeast Asia, and Latin America present untapped potential, especially for eco-certified and value-added towel products.

• Sustainability & ESG Integration: Increasing preference for organic cotton, recycled fibers, and low- impact dyeing processes is reshaping procurement and production strategies.

• Digital Commerce Acceleration: E-commerce platforms and D2C brands are redefining distribution models, supported by flexible return policies and personalized offerings.

• Government Incentives & Infrastructure Push: Schemes like RoDTEP, PLI, and textile parks under PM MITRA are expected to catalyze capacity expansion and technology absorption.

• Smart Manufacturing & Automation: Adoption of IoT-enabled machinery, energy-efficient looms, and real-time production analytics will enhance operational efficiency and reduce waste.

5. Weaknesses: Structural and Operational Challenges:

Despite promising growth avenues, the industry faces several headwinds that require strategic mitigation:

• Raw Material Volatility: Cotton price fluctuations, driven by climate events and global trade dynamics, continue to impact input costs and margin stability.

• Labor Dependency & Disruptions: The sector remains vulnerable to labor shortages, strikes, and skill gaps, especially in spinning, weaving, and finishing operations.

• High Capital Intensity: Upgrading to modern machinery and sustainable processes demands significant investment, often with long payback periods.

• Fragmented Supply Chain: Coordination gaps across sourcing, processing, and logistics can lead to delays, quality inconsistencies, and elevated working capital cycles.

• Environmental Compliance Pressure: Increasing scrutiny on water usage, effluent discharge, and carbon footprint necessitates robust ESG frameworks and monitoring systems.

• Limited Brand Differentiation: In commoditized segments, lack of innovation and branding limits pricing power and customer loyalty.

6. Riba Textiles Ltd - Company Overview

Riba Textiles Limited, headquartered in Haryana, India, is a 100% export-oriented manufacturer specializing in Terry Towels, Tufted Rugs, and allied textile products. Located 100 km from New Delhi, Riba operates a fully integrated, state-of-the-art production facility spread across 16 acres, with a built-up area of 400,000 sq. ft. and an annual capacity of 8,000 tons.

Global Reach & Market Leadership

• Riba is recognized as Indias leading manufacturer of beach towels, with extensive jacquard weaving capacity serving seasonal beach markets across hemispheres.

• The company exports to 30 countries, supplying major departmental stores, importers, and retail chains across North America, Europe, Asia, and Oceania.

• Riba holds the status of a Government of India-approved Star Export House, reinforcing its credibility in global trade.

Integrated Manufacturing Excellence

Ribas ultramodern composite plant encompasses:

• Dyeing, Weaving, Finishing, Sublimation, Embroidery

• End-to-end transformation of cotton yarn into premium towels and bath rugs

• Continuous product innovation driven by in-house design and production teams, ensuring alignment with international trends and customer preferences

Financial Performance & Market Standing

• As of FY 2024-25, Riba reported annual revenue of Rs. 296 crore, marking a 19.8% YoY growth, outperforming its 3-year CAGR of 7.9%.

• Net profit stood at Rs. 8 crore, reflecting a 7.4% YoY increase, with consistent profitability over the past five years.

• The company maintains a healthy Operating Profit Margin of 7.5% and a Return on Equity of 9.1%, indicating operational efficiency and prudent capital deployment.

• Listed on the BSE (Code: 531952), Ribas stock trades at a P/E ratio of ~10.2, with a market capitalization of approximately Rs. 82 crore, reflecting investor confidence in its fundamentals.

Certifications & Compliance

Riba is committed to ethical manufacturing and sustainability, holding:

• BSCI 2.0 (Business Social Compliance Initiative)

• ISO 9001:2015 (Quality Management Systems)

• Oeko-Tex Standard 100 (Textile safety and environmental standards)

7. Initiatives has been taken by the Company

• Plant & Machinery: An amount of Rs. 11.63 crore was invested in new plant and machinery to augment production capacity and meet anticipated demand growth. This upgrade is expected to contribute meaningfully to operational efficiency and topline expansion.

• Land Acquisition for Future Expansion: The Company acquired land valued at Rs. 2.78 crore, strategically located to facilitate future capacity additions, including weaving and processing units. This acquisition ensures readiness for scale-up without delays associated with land procurement.

Planned Investments for FY 2025-26

• Weaving Capacity Expansion: The Company has outlined a further investment of approximately Rs. 14 crore in plant and machinery during FY 2025-26, specifically targeted at increasing weaving capacity. This initiative is aligned with the Companys growth roadmap and export strategy.

8. Financial Performance:

During the financial year 2024-25, the Company achieved a turnover of Rs. 29,585.89 Lacs, representing a growth of 19.83% over the previous years turnover of Rs. 24,689.43 Lacs. This performance reflects sustained operational momentum, improved market penetration, and strategic execution across key business verticals.

Net profit for the year stood at Rs. 849.96 Lacs, as compared to Rs. 791.76 Lacs in 2023-24, registering a year-on- year increase of 7.35%. The improvement in profitability is attributable to enhanced capacity utilization, disciplined cost management, and the benefits derived from recent investments in energy-efficient technologies and process optimization.

In view of the encouraging financial results and a positive industry outlook, the Board remains confident of delivering improved performance in the current year. The Company continues to focus on strengthening its export footprint, driving operational efficiencies, and aligning its growth strategy with long-term value creation for stakeholders.

9. Key Financial Ratios:

KEY FINANCIAL RATIO	31.03.2025	31.03.2024	Deviation
Interest Service Coverage Ratio	11.05	9.36	18.03%
Debt Service Coverage Ratio	1.47	1.52	-3.46%
Debt Equity Ratio	0.26	0.28	-6.11%
Current Ratio	1.38	1.33	3.91%
Total Debts to Total Assets	0.34	0.78	-56.63%
Debtors Turnover Ratio	7.61	3.09	146.12%
Operating Margin (%)	12.56%	16.63%	-24.45%
Net Profit Margin (%)	2.87%	3.20%	-10.38%
Return to Equity Ratio	8.68%	8.86%	-1.97%
Return on Capital Employed	13.47%	13.03%	3.44%

The company has strengthened its financial position through lower debt, better liquidity, and improved efficiency in receivables. However, profitability margins have declined, indicating pressure on earnings despite stronger solvency.

10. Risks and concerns

Our core export markets in Western economies are contending with two major headwinds: escalating U.S. tariffs on home textiles and sustained volatility from the Russia-Ukraine conflict. These factors have tightened margins, disrupted supply chains, and dampened end-market demand for discretionary home-linen products.

Drawing on our proven resilience in previous downturns, we expect these measures to stabilize export volumes and safeguard profitability through FY2026. We will continue to vigilantly monitor tariff developments, macro indicators and supply-chain dynamics, enabling agile recalibration of our go-to-market levers as conditions evolve.

11. Internal Control Systems and their adequacy

The Company has established an internal control system that is commensurate with its size and complexity. This framework ensures that all assets are safeguarded against unauthorized use or disposition, and that transactions are properly authorized, recorded, and reported in accordance with applicable laws and policies.

• Internal Audit Committee:

An independent Internal Audit Committee, with clearly defined powers and responsibilities, oversees the Internal Audit Department to guarantee its objectivity and autonomy. The department maintains comprehensive control manuals and pre-execution checklists, which the Committee reviews periodically to validate findings and track remediation actions.

• Delegation of Authority:

A formal Delegation of Authority matrix outlines approval limits and monetary thresholds for each managerial level. This structure ensures that all transactions and commitments are executed by authorized personnel and that internal checks confirm adherence to prescribed procedures before any action is taken.

• Functional Manuals and Procedures:

Dedicated manuals for Production, Sales, Administration, and Personnel encapsulate detailed workflows, control points, and activity-specific checklists. These documents are reviewed and updated continuously to reflect regulatory changes, operational enhancements, and industry best practices.

• Continuous Improvement and Technology Integration:

To drive ongoing enhancements, the Company routinely revises its control manuals and checklists. We are also developing an integrated software solution to automate approval workflows, enable real-time exception monitoring, and enhance the accuracy and timeliness of management reporting.

12. Material Developments in Human Resources/industrial relations front, including number of people employed

• Strategic Emphasis on Human Capital:

The Company regards its workforce as the primary driver of sustainable growth. Human Resources Development is positioned as a core strategic pillar, aligned with our belief that employee contributions will fuel long-term success.

• Talent Development and Engagement:

Key initiatives to strengthen our talent pool include:

1. Structured training programs to enhance both technical competencies and soft skills

2. Competitive remuneration and benefits designed to attract and retain high-potential professionals

3. Leadership-development tracks featuring mentoring, rotational assignments, and succession planning

• Industrial Relations and Productivity Enhancement:

During the year, industrial relations remained constructive and stability was reinforced through:

1. Regular dialogue forums between management and employee representatives

2. Performance-linked incentive schemes to reward productivity gains

3. Continuous improvement workshops on the shop floor to optimize processes and reduce waste

• Workforce Profile:

As of year-end, the Companys human capital comprises approximately 950 individuals, including:

1. Technical and non-technical personnel

2. Managerial and non-managerial staff

3. Casual and contract labour

• Outlook

In response to evolving market dynamics, we will continue to invest in our people through targeted skill-building, enhanced engagement mechanisms, and robust leadership pipelines. These efforts will equip the organization to meet future challenges and advance our mission with confidence.

13. Cautionary Statement:

The statements contained in the Management Discussion and Analysis should be read in conjunction with the Companys audited standalone financial statements and the related auditors report as of March 31, 2025, which form an integral part of this Annual Report.

Certain sections of the MD&A describe the Companys objectives, projections, estimates, and expectations and may constitute forward-looking statements under applicable laws and regulations. These statements are based on current assumptions and involve risks and uncertainties that could cause actual outcomes to differ materially. The Company undertakes no obligation to update or revise any forward-looking statements, except as required by law.

	By order of the Board of Directors
	For Riba Textiles Limited
Place : Panipat	Sd/-
	Asha Garg
Date : 31.08.2025	Chairperson & Whole-time Director
	DIN: 06987609