Riba Textiles Ltd Management Discussions

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

1. Global Textile Market Overview

- The global textile and apparel trade reached nearly US$ 900 billion in 2025, with

the apparel market valued at US$ 1.9 trillion. Growth was tempered by tariff imbalances and muted consumer demand, but diversification of markets beyond US created opportunities for india.

- Sustainability remained a key driver, with rising demand for eco-friendly fabrics, recycled fibers, and bio-based polymers.

- The global towel market, valued at US$ 11 billion in 2023, is projected to reach US$

18 billion by 2032 at a CAGR of 5.5%, driven by hygiene awareness and hospitality sector demand.

2. Indian Textile Market Performance

- Indias textile and apparel industry was valued at US$ 194 billion in FY 2025-26, growing ~5% year-on-year. The domestic market contributed nearly 80% of total demand, underscoring its importance.

- Textile exports rose 2.1%, from ^3,09,859 crore in FY 2024-25 to ^3,16,334 crore in FY

2025-26. Growth was broad-based, with strong performance in ready-made garments (+2.9%), man-made fabrics (+3.6%), and handicrafts (+6.1%).

- Key export destinations showing robust growth included UAE (+22.3%), Japan

(+20.6%), and Germany (+9.9%), reflecting diversification beyond traditional US and EU markets.

3. Terry Towel Industry Context-

- India remains a dominant supplier of cotton towels to the US (39% share).

- Domestic demand is rising due to premiumization, hygiene awareness, and online retail expansion.

- Sustainability imperatives are reshaping the industry: adoption of organic cotton, bamboo fibers, recycled yarns, and certifications like GOTS and OEKO-TEX are becoming essential.

4. Government Initiatives

- FY 2025-26 saw enhanced support through RoSCTL and RoDTEP schemes, extension of PM MITRA textile parks, and new FTAs (India-UK, India-EU, India-EFTA) improving market access.

- Customs duty exemptions on shuttle-less looms and credit access for MSMEs supported modernization and competitiveness.

5. Riba Textiles Ltd - Strategic Positioning

- Riba invested in new weaving capacity and allied machinery, strengthening production efficiency.

- Despite global headwinds, Riba maintained profitability through cost discipline, innovation, and export diversification.

- The company remains aligned with government policy directions, leveraging sustainability, technology upgradation, and market expansion to mitigate risks.

6. Road Ahead

- Opportunities: Expansion in hospitality and wellness sectors, growth in eco- certified towels, and digital commerce acceleration. The FTAs with UK and prospective FTAs with EU/Canada would be a game changer and expand opportunities to increase sales in these markets exponentially.

- Challenges: Cotton price volatility, tariff disadvantages, and environmental compliance pressures.

- Strategy: Riba will continue to invest in energy-efficient looms, solar-powered operations, and ESG frameworks, while targeting new geographies in UK, EU, Canada.

9. Key Financial Ratios:

KEY FINANCIAL RATIO	31.03.2026	31.03.2025	Deviation
Interest Service Coverage Ratio	9.93	11.05	-10.08%
Debt Service Coverage Ratio	1.12	1.47	-23.91%
Debt Equity Ratio	0.29	0.26	8.85%
Current Ratio	1.19	1.38	-13.62%
Long Term Debt to working capital	2.00	1.23	63.35%
Bad Debts to Accounts Receivable Ratio	0.00	0.00	0.00%
Total Debts to Total Assets	0.35	0.34	2.87%
Debtors Turnover Ratio	6.68	7.61	-12.19%
Operating Margin (%)	14.88%	12.56%	18.40%
Net Profit Margin (%)	3.17%	2.87%	10.40%
Return to Equity Ratio	0.08	0.09	-11.72%
Return on Capital Employed	0.12	0.13	-8.75%

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

The textile industry in FY 2025-26 continues to face significant challenges, with escalating U.S. tariffs on home textiles, geopolitical volatility from the Russia-Ukraine conflict and Middle East tensions, and volatile cotton and energy prices exerting pressure on margins and supply chains. Rising freight costs and disruptions in petrochemical supply have impacted polyester availability, while inflation and weak consumer confidence in Europe and North America have dampened discretionary demand for apparel and homelinen products. At the same time, tightening ESG and regulatory compliance requirements in the U.S. and EU—covering forced labour, chemical usage, and sustainability certifications—have increased operational costs. These factors collectively underscore the need for agility and resilience. Drawing on its proven ability to withstand previous downturns, Riba Textiles remains focused on product innovation, energyefficient manufacturing, and diversification into emerging markets such as Africa, Southeast Asia, and Latin America, while vigilantly monitoring tariff developments, macroeconomic indicators, and supplychain dynamics to recalibrate its gotomarket strategies and safeguard profitability.

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 preexecution 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 980 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, 2026, 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.

Place: Panipat	By order of the Board of Directors
Date: 31.08.2026	For Riba Textiles Limited
	Sd/-
	Asha Garg
	Chairperson & Whole-time Director
	DIN: 06987609