Rupa & Company Ltd Management Discussions

Economy Review

Global Economy1

Global economy demonstrated resilience during CY 2025, with growth estimated at 3.4%, despite elevated trade barriers, policy uncertainty and geopolitical tensions. The resilience of global activity was supported by technology-related investment, relatively favourable financial conditions and fiscal and monetary policy support, while businesses demonstrated adaptability in responding to changing trade conditions and supply-chain disruptions.

Global economic environment, however, remains subject to heightened uncertainty arising from geopolitical developments, trade tensions and commodity-price volatility. The conflict in the Middle East has further increased uncertainty around energy prices, inflation and global economic activity.

Outlook1

Global economic outlook for CY 2026 and beyond remains subject to significant uncertainty. Global growth is projected to moderate to 3.1% in CY 2026 before improving marginally to 3.2% in CY 2027. The projected growth remains below the recent pace of approximately 3.4% and the historical average of 3.7% recorded during 2000-19.

Advanced economies are projected to grow by 1.8% in CY 2026 and 1.7% in CY 2027, while emerging market and developing economies are expected to expand by 3.9% and 4.2%, respectively. Emerging market and developing economies are expected to continue contributing significantly to global growth, although their outlook remains sensitive to commodity prices, trade conditions, capital flows, exchange-rate movements and geopolitical developments.

A key concern is the temporary reversal of the global disinflationary trend. Global headline inflation is projected to rise to 4.4% in CY 2026 before declining to 3.7% in CY 2027, with inflationary pressures expected to be more pronounced across emerging market and developing economies. Higher energy and food prices are expected to contribute to the near-term increase in inflation. The outlook remains subject to significant downside risks, including a prolonged or broader geopolitical conflict, deeper geopolitical fragmentation, renewed trade tensions and a reassessment of expectations surrounding AI-driven productivity gains.

Despite these challenges, continued investment in artificial intelligence and technology, business and supply-chain adaptability and supportive policy measures are expected to provide support to global economic activity. Maintaining credible policy frameworks, strengthening economic resilience and reinforcing international cooperation will remain important in navigating the evolving global economic environment.

Indian Economy

Against a challenging global backdrop, the Indian economy demonstrated remarkable resilience during FY 2025-26, reinforcing its standing among the worlds fastest-growing major economies. Indias economy registered real GDP growth of 7.7% in FY 2025-26, supported by resilient domestic demand, sustained investment activity and continued strength in the services sector.2 Real GDP grew by 8.3% in Q2 FY2025-26, compared with 6.8% in Q1 FY2025-26, supported by resilient domestic demand amid global trade and policy uncertainties3. Real GVA expanded by 8.1%, driven by buoyant industrial and services-sector activity.4 Continued formalisation of the economy and strengthened financial sector fundamentals further supported macroeconomic stability.

Sectoral activity remained broad-based during FY 2025-26, with the services sector continuing to be the key driver of economic growth. Services GVA was estimated to grow by 9.9%, supported by strong performance across financial, real estate and professional services, as well as trade, hotels, transport and communication. The manufacturing and construction sectors were estimated to grow by 7.0%, reflecting sustained industrial and investment activity, while the agriculture and allied sector was estimated to expand by 3.1%. Overall, the performance of the major sectors reflected the resilience of domestic economic activity amid a challenging global environment.5 The textile and apparel industry continues to be a vital pillar of Indias economy, contributing significantly to employment, export and industrial output. As one of the countrys largest employment generators, the sector provides direct livelihoods to over 45 million people, making it an important driver of socio-economic development.6 The Government has reinforced its commitment to the sector through targeted initiatives, including the Production Linked Incentive (PLI) Scheme and the PM MITRA parks programme. These initiatives are aimed at enhancing infrastructure, attracting investments and improving Indias global competitiveness through innovation and technology adoption. Indias strong raw material base, coupled with a large skilled workforce, continues to position the country as an emerging global manufacturing hub for textiles and apparel.

Outlook

Indias near-term economic outlook remains broadly positive, although the outbreak of conflict in West Asia since early 2026 has created additional headwinds in the form of higher energy costs, supply chain disruptions and elevated uncertainty. At its April 2026

Monetary Policy Committee meeting, the Reserve Bank of India (RBI) maintained the repo rate at 5.25% while retaining a neutral policy stance. The RBI projected real GDP growth of 6.9% for FY 2026-27.7 Growth is expected to be supported by the continued benefits of GST rationalisation, sustained government capital expenditure, resilient services sector momentum and healthy corporate and banking sector balance sheets.

Private consumption is expected to remain a major growth driver, backed by rising real incomes, improved employment conditions and favourable credit conditions following cumulative rate cuts of 125 basis points during FY 2025-26.8 On the inflation front, the Reserve Bank of India (RBI) projected CPI inflation at 4.6% for FY 2026-27 in its April 2026 policy assessment. The inflation outlook remained subject to upside risks arising from energy-price volatility, geopolitical developments, food-price pressures and potential currency-related imported inflation. The RBI also highlighted the need to closely monitor developments in food and energy prices and their potential impact on the inflation trajectory.9 Despite global uncertainties, Indias strong macroeconomic fundamentals, including healthy forex reserves, a narrowing current account deficit, robust services exports and institutional resilience, are expected to provide a strong buffer against external shocks. Additionally, the governments calibrated approach to trade negotiations, including an interim trade agreement with the United States, further supports Indias growth and export outlook. Indias expanding digital ecosystem and growing technology and AI capabilities are also expected to boost productivity, accelerate formalisation and support long-term growth.

Global Textile Market10

The global textile market continued to demonstrate steady growth momentum, reaching a value of US$ 1,104.0 billion in 2025, compared to US$ 1,508.1 billion by 2034, registering a CAGR of 3.53% during 2026–2034. Growth is being supported by increasing demand for eco-friendly, organic and functional textiles, along with technological advancements and greater adoption of automation in manufacturing.

Asia-Pacific remained the dominant textile manufacturing hub, accounting for approximately 48.7% market share in 2025. The region continues to benefit from abundant raw materials, skilled labour and robust manufacturing infrastructure.

The global textile industry is also witnessing increasing emphasis on sustainability, digitalisation and manufacturing efficiency, as changing consumer preferences and evolving regulatory requirements encourage businesses to adopt more resource-efficient processes and strengthen supply-chain transparency.

Global Apparel Market11

The global apparel market continued to expand, reaching approximately US$1.84 trillion in 2025 and estimated at around US$1.9 trillion in 2026. The market is projected to grow at a CAGR of approximately 3.4% during 2026–2035, supported by rising disposable incomes, increasing demand for casual and athleisure wear, evolving consumer preferences and the continued expansion of e-commerce. Asia-Pacific remained the largest regional market, accounting for approximately 40.8% of global apparel market revenue in 2025. The regions growth is supported by its large consumer base, expanding middle class, established manufacturing capabilities and increasing digital and e-commerce penetration.

Womens apparel remained the largest consumer segment, accounting for approximately 50% of the global apparel market, reflecting sustained demand for casual, comfort-oriented and lifestyle apparel.

The global apparel industry continues to be influenced by changing consumerpreferences,sustainability,digitalisationandtheexpansion of omnichannel retail. At the same time, geopolitical tensions, evolving trade policies, raw material price volatility and supply-chain disruptions remain key challenges for industry participants.

Indian Textile and Apparel Market

Indias textile and apparel industry remains a cornerstone of the national economy. The sector contributes approximately 2% to Indias

GDP and accounts for 11% of manufacturing Gross Value Added (GVA). The industry is the countrys second-largest employment generator, employing over 45 million individuals and about 22,000 million garments produced annually. By 2030, the textile industrys share in GDP is expected to more than double, reaching close to 5%. The domestic textile and apparel market was valued at US$ 225 billion in 2025 and is growing at a CAGR of 10–12%. and is projected to reach US$ 350 billion by 2030. The market is driven by rising domestic consumption, growing fashion and e-commerce penetration, and strong export demand. Government support through PLI schemes, textile parks, and Make in India initiatives is further strengthening manufacturing capacity and industry growth. Indias total exports of textiles and apparel, stood approximately at US$35.52 billion. Ready-Made Garments contributed US$15.77 billion (44%), followed by Cotton Textiles at US$10.25 billion (29%) and Man-Made Textiles at US$5.23 billion (15%).

India has also established a strong position in technical textiles and specialty segments. The sector, valued at US$ 29 billion in FY2024, is projected to reach US$ 123 billion by 2035, making it one of the fastest-growing speciality segments within the countrys textile economy.12

Indian Innerwear Industry

The Indian innerwear market continues to expand, supported by rising disposable incomes, urbanisation, increasing fashion consciousness, growing e-commerce and organised retail penetration, and evolving consumer preferences towards branded and premium products. Valued at approximately US$10.9 billion in 2025, the market is projected to reach US$19.8 billion by 2034, registering a CAGR of 6.49% during 2026–2034.13

The category is increasingly evolving beyond a basic necessity towards a comfort, functionality and lifestyle-oriented segment, with consumers showing greater preference for improved fit, quality fabrics, contemporary designs and performance attributes. Expanding organised retail and digital commerce are further enhancing accessibility and widening consumer choice across markets.

Mens Innerwear Industry14

The Indian mens premium innerwear market was valued at US$815.8 million in 2025 and is projected to reach US$1,401.9 million by 2034, registering a CAGR of 6.01% during 2026–2034. Growth is being supported by rising urbanisation, increasing brand awareness, evolving fashion preferences, and growing e-commerce and influencer-led marketing. Consumers are increasingly prioritising comfort, quality and style, driving a shift towards premium and branded innerwear, while sustainability trends are further shaping purchasing preferences.

Womens Innerwear Industry

The Indian lingerie market was valued at US$ 5.9 billion in 2025 and is projected to reach US$ 12.0 billion by 2034, growing at a CAGR of 8.30% from 2026 to 2034.15 The premium lingerie segment, valued at US$ 1.9 billion in 2025, is expected to grow at a CAGR of 9.50% through 2034 to reach US$ 4.3 billion. This reflects the ongoing premiumisation trend within the womens innerwear category.16

Indias online lingerie market is projected to expand by US$ 717.4 million between 2026 and 2030, registering a CAGR of 11.7%, driven by rising digital penetration across Tier II and Tier III cities.17 The demand for inclusive and body-positive lingerie is gaining significant momentum, with brands prioritising diverse body shapes, personalised sizing and eco-friendly materials. Cotton continues to be the most preferred fabric due to its comfort, breathability and hypoallergenic properties.

Kids Apparel Industry

The Indian kids apparel market was valued at US$ 22.57 billion in 2025 and is projected to reach US$ 27.17 billion by 2034, growing at a CAGR of 2.08% from 2026 to 2034.18 Important drivers of this market segment include Indias large child population, rising disposable incomes, a growing middle-class population and heightened fashion consciousness among parents.

Athleisure Industry

Indias athleisure market is experiencing accelerated growth, driven by evolving consumer lifestyles and increasing health and wellness awareness and rising demand for comfortable, versatile and performance-oriented apparel. The market was valued at US$ 13,880 million in 2025 and is projected to reach US$ 22,367 million by 2034, growing at a CAGR of 5.3% from 2026 to 2034.19

The sustainable athleisure segment is also gaining momentum, driven by increasing consumer preference for eco-conscious materials and performance-oriented products. The expansion of e-commerce and quick-commerce channels is further improving accessibility and supporting category penetration across Tier II and Tier III cities.

E-commerce and Digital Retail Expansion: The continued growth of e-commerce, digital payments and online retail is creating opportunities for apparel brands to expand geographic reach, strengthen consumer engagement and develop direct-to-consumer channels, including across Tier II and Tier III cities.

100% FDI (automatic route): India permits up to 100% FDI in the textile sector under the automatic route, creating a favourable investment environment for the industry. This policy can facilitate greater access to global capital, technology, expertise and international markets, supporting capacity expansion, innovation and competitiveness across the textile value chain.

Outlook

The Indian textile and apparel sector is positioned for sustained growth, supported by rising domestic consumption, policy support, improving infrastructure and strengthening manufacturing capabilities. The innerwear industry is expected to benefit from favourable demographics, increasing brand penetration in Tier II and Tier III cities and the continued shift from unorganised to organised retail.

Government initiatives, including PM MITRA Parks, PLI schemes and skilling programmes, are strengthening the industrys manufacturing and workforce capabilities. Meanwhile, evolving consumer preferences, rising incomes, increasing female workforce participation and the growing adoption of digital retail are supporting demand across innerwear and athleisure categories.

With its diversified brand portfolio, pan-India distribution network and established retail relationships, the Company remains well-positioned to leverage these emerging opportunities.

Company Overview

Rupa & Company Limited ("Rupa" or "the Company") is one of Indias most established and trusted knitwear brands, with a legacy spanning more than five decades. The Company traces its origins to 1968, when visionary entrepreneurs- Mr. Prahalad Rai Agarwala, Mr. Ghanshyam Prasad Agarwala and Mr. Kunj Bihari Agarwala founded a small hosiery venture in Kolkata at a time when the Indian innerwear market was largely dominated by unorganised players. Over the years, the Company has established a strong presence in the Indian knitwear market, supported by established brands, a diversified product portfolio and a longstanding focus on quality, comfort, innovation and evolving consumer preferences. Rupa has built a robust pan-India distribution network comprising over 1,500 dealers and a retail reach of more than 2 lakh outlets, complemented by a growing presence across modern trade, e-commerce and quick commerce channels. The Company is also expanding its international footprint across key export markets while deepening market penetration across India through its extensive distribution and retail network.

Segment-wise and Product-wise Performance

The Company offers a diversified portfolio of knitted apparel across categories including innerwear, outerwear, athleisure, active wear, thermal wear, sleepwear and accessories, catering to men, women, children and infants across Economy, Mid-Premium and Premium segments.

The Companys diversified brand architecture, supported by established brands and a broad distribution network, provides the Company with the flexibility to respond to changing consumer preferences, evolving fashion trends and varying levels of consumer spending.

During the year, the Company continued to focus on strengthening its product portfolio, improving product mix and enhancing its presence across relevant market segments and sales channels. The Company remained focused on strengthening its presence in the Mid-Premium and Premium categories, scaling high-growth segments such as Athleisure, expanding distribution reach and driving efficiency-led improvements across operations.

Outlook

The Indian innerwear and knitwear market is expected to remain supported by evolving consumer preferences, increasing brand awareness, premiumisation, rising disposable incomes and the growing adoption of organised and digital retail channels. Against this backdrop, the Company remains focused on strengthening its market position through continued investments in brands, product innovation, quality and an expanded product portfolio across price segments. The Company will continue to leverage its established distribution network while strengthening its presence across modern trade, e-commerce and other emerging channels. With a diversified product portfolio, established brand equity and focus on operational efficiency, the Company remains well positioned to capture emerging market opportunities and pursue sustainable, profitable growth. At the same time, the Company will remain focused on prudent cost management, working capital optimisation and resilience across its supply chain to navigate market volatility and evolving business conditions.

Business and Financial Overview

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 ("Act"), read with the Companies (Indian Accounting Standards) Rules, 2015, and other applicable provisions of the Act. The financial statements are prepared on a consistent basis and in accordance with generally accepted accounting principles in India, ensuring transparency, reliability and comparability of the Companys financial information.

Standalone Financial Performance and Analysis

( Rs. in Lakhs)

Key Financial Ratios (Standalone)

Risk and Concerns

The Company recognises risk management as a continuous and integral process of identifying, evaluating and addressing potential risks and opportunities that may impact its operations and long-term objectives. To support this approach, the Company has established a comprehensive and dynamic risk management framework focused on the identification, assessment, monitoring and mitigation of a broad range of risks. The framework aims to minimise potential adverse impacts while maximising stakeholder value and supporting stable, sustainable growth.

The Company also promotes a culture of proactive risk reporting and timely resolution across the organisation. In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Risk Management Committee oversees the formulation and implementation of risk management strategies, ensuring the framework remains responsive to evolving business conditions and strategic priorities.

The Company operates in a highly competitive and rapidly evolving innerwear and apparel market, where shifting consumer preferences, digital disruption and premiumisation trends may impact market relevance and growth. These risks are mitigated through sustained investment in brand equity, product innovation, portfolio diversification and an omnichannel distribution strategy.

Macroeconomic volatility, including inflation, interest rate movements and raw material price movements, may affect margins and consumer demand. The Company manages these risks through strategic sourcing, inventory optimisation, calibrated pricing strategies and a diversified product portfolio.

Operational risks related to manufacturing continuity and efficiency are mitigated through multi-location facilities, process standardisation, automation initiatives and robust quality control systems. Supply chain risks are mitigated through vendor diversification, safety stock maintenance and enhanced digital visibility across procurement and logistics operations.

The increasing integration of digital technologies across business operations also exposes the Company to cybersecurity and data protection risks. These risks are managed through strengthened IT infrastructure, robust cyber security protocols, regular system audits and employee awareness programmes.

Regulatory and compliance risks are addressed through a proactive governance framework, supported by dedicated teams and continuous monitoring of policy developments. Sustainability-related considerations, including environmental and social expectations, are becoming increasingly critical across the business landscape. The Company continues to strengthen its focus on resource efficiency, responsible sourcing practices and alignment with evolving ESG standards.

The Risk Management Committee periodically reviews these key risk areas, including market competition, financial volatility, operational efficiency, supply chain resilience, cyber security, regulatory compliance and sustainability to ensure that mitigation strategies remain effective, agile and aligned with the Companys strategic priorities.

Material Developments in Human Resources / Industrial Relations

People remain central to the Companys operations and long-term growth strategy. During FY 2025-26, the Company continued to focus on strengthening its human resources capabilities, employee engagement and organisational effectiveness.

The Company is committed to maintaining a workplace founded on fairness, respect, equal opportunity and non-discrimination, while complying with applicable labour laws and standards relating to employee welfare and workplace practices.

Employee capability building, performance management and engagement remain important areas of focus. The Company undertakes initiatives aimed at enhancing employee skills, encouraging collaboration and fostering a positive and inclusive workplace culture.

Workplace health and safety continues to receive due attention, particularly across manufacturing operations. Employees are provided with appropriate training and guidance on safety practices, with emphasis on adherence to established safety procedures.

Industrial relations remained stable and harmonious during the year. The Company continues to maintain open communication channels and mechanisms for addressing employee concerns in a timely manner.

As at March 31, 2026, the Companys total employee headcount stood at 842.

Internal Control System and their Adequacy

The Company maintains a robust and well-structured internal control framework, commensurate with the size and complexity of its operations. These controls are designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, reliability of financial and operational reporting, accuracy in the recording of transactions and compliance with applicable laws and regulations. The framework ensures that all transactions are executed with appropriate management authorisation and that financial statements are prepared in accordance with generally accepted accounting principles. Adequate safeguards are in place to protect the Companys assets against unauthorised use, loss or misappropriation. The Company also operates a comprehensive internal audit programme, the findings of which are periodically reviewed by Management and the Audit Committee. The Audit Committee regularly interacts with both internal and statutory auditors to review audit observations and ensure that all significant aspects of internal control are duly considered and addressed.

Cautionary Statement

Statements made in this section describing the Companys objectives, projections, estimates and expectations may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on managements current views, assumptions and expectations, informed by historical experience, prevailing market conditions and anticipated future developments. However, actual outcomes may differ materially from those expressed or implied in such statements due to various external factors beyond the Companys control. The Company does not undertake any obligation to publicly update, revise or amend these forward-looking statements to reflect subsequent events or developments, except as required under applicable laws.