Rupa & Company Ltd Management Discussions

Economy Overview

Global Economy¹

In Calendar Year (CY) 2024, the global economy experienced moderate but consistent growth, expanding by 3.3% despite facing persistent geopolitical tensions, shifting trade dynamics and evolving monetary policies. In response to these challenges, governments across the world have recalibrated their economic strategies. Emphasis has shifted towards technological innovation, strengthening supply chain resilience and encouraging economic diversification to ensure sustainable development.

Global inflation moderated from 6.6% in CY 2023 to 5.7% in CY 2024.² This reduction was primarily due to effective monetary policies and greater stability in stable energy markets, both of which helped restore price stability and supported the ongoing economic recovery. Emerging markets and developing economies led global growth, with a 4.3% expansion, significantly outperforming the 1.8% growth rate of advanced economies. Their performance was driven by strong domestic consumption, increased foreign investment inflows and reducing reliance on external trade.

Outlook

The global economic growth is expected to remain moderate in the coming years, with projections of 2.8% in CY 2025 and 3.0% in CY 2026. This outlook is primarily driven by a gradual decline in inflation and the ongoing efforts of central banks to maintain stability through targeted monetary policies. Emerging markets are expected to maintain steady growth, with a forecasted expansion of 3.7% in CY 2025. In contrast, advanced economies are likely to experience more gradual recovery, with growth expected to reach 1.4% in CY 2025.

Inflation is projected to ease further, reaching 4.3% in CY 2025 and 3.6% in CY 2026.³ This decline is expected to positively influence consumer spending. Despite recent tariff hikes that have impacted global trade growth, the resilience and interconnectivity of the global economy remain intact. Governments and businesses are adapting to new market dynamics and optimising supply chains. Moreover, advancements in technology, improved workforce productivity and enhanced infrastructure are expected to drive sustainable growth, providing a foundation for continued economic progress and renewed optimism in the years ahead.

Indian Economy

Indias economy registered a robust growth rate of 6.5% in Financial Year (FY) 2025, reflecting its resilience amid a challenging global environment marked by geopolitical uncertainty, supply chain constraints and evolving trade dynamics.⁴ The performance was driven by the strength of the services sector, which was important in supporting overall economic activity. Growth was further supported by rapid expansion of digital infrastructure, which enhanced financial inclusion and credit accessibility. This technological progress spurred demand across various sectors, contributing to overall economic growth. Additionally, inflation eased from 5.4% in FY 2024 to 4.9% in FY 2025.⁵

The textile and apparel industry remains a vital pillar of Indias economy, contributing significantly to employment, export revenues and industrial output. As one of the largest employment generators, the sector provides direct livelihoods to over 45 million people, making it an important driver of socio-economic development.⁶ Thus, the Government has introduced several initiatives such as the Production Linked Incentive (PLI) Scheme and the PM MITRA parks. These initiatives aim to enhance infrastructure, attract investments and improve global competitiveness by fostering innovation and technological advancements. Indias competitive advantage in this industry is further strengthened by its vast raw material base and skilled workforce, which positions the country as a potential global manufacturing hub for textiles and apparel.

Outlook

Indias economic outlook remains favourable, underpinned by sustained public investments in infrastructure, robust growth in manufacturing and the ongoing development of trade and financial services. The governments ongoing emphasis on capital expenditure, coupled with initiatives aimed at boosting rural demand and accelerating the expansion of both digital and physical infrastructure is expected to drive industrial activity and enhance productivity. As supply chains stabilise and input costs moderate, industries linked to essential services and everyday consumption are well-positioned to capitalise on increased demand while improving operational efficiency.

The recent 25 basis points reduction in the repo rate by the Reserve Bank of India is anticipated to increase liquidity, improve access to credit and positively influence market sentiment, thereby supporting economic growth. Meanwhile, the government is adopting a calibrated approach to the evolving global tariff landscape to safeguard Indias economic interests. Despite global uncertainties, India is expected to sustain its growth trajectory, supported by strong domestic consumption, a favourable inflationary outlook and a stable macroeconomic environment.

GDP Growth Trend in India (%)

Industry Overview

Global Textile Market⁷

The global textile market is valued at US $ 1065.6 billion in CY 2024, with continued growth driven by evolving consumer preferences for eco-friendly and functional textiles, rapid population growth and technological advancements in manufacturing. The increasing demand for smart textiles, which integrate electronic components for enhanced functionality, is further expanding the market. Additionally, government initiatives and trade agreements are influencing market dynamics, particularly in emerging economies such as India and China. The expansion of online retailing, along with the continuing popularity of fast fashion, is also contributing significantly to market growth. The textile market is expected to reach US $ 1484.7 billion by CY 2033.

Global Apparel Market⁸

The global apparel industry continues to demonstrate robust growth potential, with revenues projected to reach approximately US$1.84 trillion by 2029, reflecting a steady annual expansion of 2.64%. This growth is supported by significant contributions from womens fashion, which remains the dominant segment, poised to reach nearly US$ 963 billion. Consumer spending on clothing is also expected to increase, with the average per capita expenditure anticipated to reach US$234.78 in 2025. Emerging economies, particularly India, are set to add around US$121 billion into the global market by 2025.

Nonetheless, the sector continues to face headwinds, including persistent supply chain disruptions, escalating production costs and the introduction of new tariffs structures. To navigate these complexitiesandmaintaincompetitiveadvantage,brandsareadopting more sustainable practices and diversifying sourcing networks.

Indian Textile and Apparel Market⁹

Indias textile and apparel industry remains a vital component of the national economy, contributing approximately 2.3% to GDP. It provides employment to over 45 million individuals.

India is globally recognised for its leadership in textile and apparel production, standing as the largest producer of cotton and the second-largest producer of textiles and garments worldwide. The nations export portfolio is diverse, covering readymade garments, cotton textiles, man-made fibres and technical textiles. The government strategic interventions have been instrumental in accelerating the sectors growth trajectory. The Production Linked Incentive (PLI) Scheme has attracted substantial investment, while the PM MITRA (Mega Integrated Textile Region and Apparel) Parks focus on developing state-of-the-art industrial infrastructure and the SAMARTH scheme addresses skill development needs.

As consumers become more conscious of environmental and social impacts, Indian manufacturers are embracing eco-conscious practices, including the use of sustainable materials, clean manufacturing technologies and circular economy principles. Also, the rise in disposable incomes of middle class and strong governmental support are propelling the sectors expansion. With its abundant natural resources, skilled labour and integrated supply chain, India is well-positioned to become a global manufacturing hub for sustainable and high-quality textiles.

Indian Innerwear Industry¹⁰

The Indian innerwear industry, valued at US $10.24 billion in 2024, has transformed from a basic necessity to a dynamic, trend-driven market. This growth is fuelled by rising disposable incomes, urbanisation, heightened focus on wellness and the rapid expansion of e-commerce. The womens segment dominates with over 60% market share, driven by fashion-forward choices and diverse product offerings, while mens and kids categories are also gaining traction due to increased demand for premium and athleisure styles.

A shift from unbranded to branded products, with consumers seeking quality, comfort, and style, is shaping the industrys future. Growth opportunities are especially strong in Tier II and III cities and the segment is diversifying into shapewear, thermal wear and loungewear. With intensified competition, companies are investing in branding, innovation, and sustainability to stay ahead. The market is projected to reach US $19.25 billion by 2033, growing at a CAGR of 6.7% from FY 2025 to FY 2033.

Mens Innerwear Industry:

The Indian male innerwear market is experiencing substantial growth, fuelled by factors such as rising disposable incomes, evolving fashion trends and the increasing reach of e-commerce platforms. Indian men are prioritising comfort, quality and style of their innerwear, prompting a shift towards premium and branded options. The markets growth is further supported by the influx of international brands and the increasing demand for innovative fabrics, such as moisture-wicking and breathable materials. The industry is poised for continued growth, adapting to the diverse preferences of the modern male consumer.

Womens Innerwear Industry

The Indian womens innerwear market is experiencing significant growth, reaching a valuation of US $ 5.4 billion in 2024.¹¹ This growth is driven by the increasing recognition of womens innerwear as both a daily essential and a fashion statement, along with a rising middle-class with rising disposable incomes. The sectors growth has been further propelled by celebrity involvement and the proliferation of online retail platforms, which have enhanced market accessibility and offered consumers a diverse range of product choices. The demand for inclusive and body-positive lingerie is also gaining momentum, with brands prioritising diverse body shapes and personal preferences. Cotton continues to be the most favoured fabric due to its comfort, breathability and hypoallergenic properties.

Kids Apparel Industry

The Indian kids apparel market is witnessing consistent growth, with a projected CAGR of 2.17% from 2025 to 2033.¹² Key drivers of this growth include increasing disposable incomes, a burgeoning middle class and greater fashion awareness among parents. The market offers a wide array of product categories, including casual wear and ethnic attire for both boys and girls. Distribution channels have significantly expanded, with a strong presence across supermarkets, brand outlets, multi-brand stores and online platforms, improving accessibility for a wider consumer base. Current trends shaping the industry include the rise of gender-neutral fashion, a heightened focus on sustainable and ethically produced clothing and the influence of social media on purchasing decisions.

Athleisure Industry

Indias athleisure market is undergoing a phase of accelerated growth, underpinned by rising health consciousness, demand for versatile apparel and innovations in fabric technology. The development of breathable, stretchable and moisture-wicking textiles has enhanced product appeal, while relaxed workplace dress codes and influencer-driven social media trends have boosted sales. Expanded access through e-commerce and quick commerce platforms, especially in Tier II and Tier III cities has made athleisure more accessible.

Opportunities ¹³

Expansion of Textile Parks

The PM MITRA parks aim to develop world-class infrastructure by integrating the entire textile value chain. This initiative is expected to lower logistics costs, boost operational efficiency and enhance Indias competitiveness in global textile markets. With seven parks already approved across various states, this initiative holds significant potential to attract investment and accelerate growth.

Incentives for Technology Upgradation

The Amended Technology Upgradation Fund Scheme (ATUFS) provides capital subsidies to MSMEs to support the adoption of modern technologies. With a budget allocation of H17,822 crore, this scheme is designed to enhance productivity and strengthen the global competitiveness of Indias textile sector.

Skilling Initiatives

The Samarth scheme is aimed at bridging the gap in the textile industry by providing training to industry workers. With over 3.82 lakh individuals trained and a strong placement record, the initiative addresses the industrys need for a skilled workforce, thereby supporting the sectors growth and competitiveness.

Growth in Exports

Indias textile and apparel exports registered a 7% increase during the year. The governments focus on boosting exports aligns with the industrys upward trajectory, positioning India as a key player in the global textile value chain.

Policy Support

The Make in India initiative has led to policy interventions that strengthen infrastructure and provide targeted incentives. These effortsaimtopositionIndiaasaglobalhubfortextilemanufacturing and exports, while accelerating growth across the industry.

Threats

Regulatory Challenges

Despite reforms, Indias manufacturing sector continues to face challenges stemming from complex regulations and relatively high labour costs. These barriers limit operational flexibility, discourage capacity expansion and impact the overall competitiveness of the industry.

Environmental Concerns

The textile industry is under increasing pressure to reduce greenhouse gas emissions due to sustainability mandates. While initiatives such as adopting renewable energy are underway, reliance on coal remains a significant hurdle in achieving long-term environmental targets.

Global Trade Dynamics

Proposed import tariffs in key markets could lead to increased production costs and reduce sales for Indian manufacturers. These trade barriers may prompt brands to relocate production, potentially undermining the industrys export growth and global competitiveness.

Supply Chain Fragmentation

The textile industrys supply chain remains fragmented, resulting in inefficiencies that hinder quality control and delay deliverables. This fragmentation challenges the industrys ability to meet global standards and respond swiftly to market demands.

E-commerce Expansion

The rapid growth of e-commerce platforms is being fuelled by several factors, including increased internet usage, the rise of smartphones, convenience and access to a wide variety of products

Government Initiatives

Schemes like the Mega Integrated Textile Region and Apparel (MITRA) aim to promote sustainable development by integrating the entire garment manufacturing process, including spinning, weaving, dyeing, processing and printing at one location

Technological Advancements

Innovations such as artificial intelligence for trend forecasting and advanced manufacturing techniques are significantly boosting production efficiency and enabling customisation

Sustainability Trends

Increasing environmental awareness among has driven brands to adopt eco-friendly practices, such as using sustainable materials, adopting circular fashion models and ethical labour practices, influencing purchasing decisions.

Outlook

The Indian innerwear industry is poised for significant growth, driven by strategic government initiatives aimed at enhancing manufacturing capabilities and export potential. Under the Make in India initiative, the government has introduced several schemes, including the Production Linked Incentive (PLI) Scheme, PM MITRA Parks, to increase domestic production and infrastructure. These efforts are complemented by skill development programs like Samarth, which have trained and placed a substantial number of workers in the sector. With the textile industry contributing notably to the nations GDP and employment, these measures are expected to accelerate growth, making India a more competitive player in the global innerwear market.

Company Overview

Incorporated in 1985, Rupa & Company Limited is one of Indias most renowned and trusted knitwear brands, with a legacy that spans over five decades. The Companys products cover the entire range of knitted garments from comfort innerwear to cool casual and fashion wear. The Company has evolved to become the frontrunner in the innerwear and outerwear business in India and also a leading brand in global markets with millions of satisfied customers. In the recent years, the Company has widened its geographic footprint across the globe with strong market presence across multiple nations globally.

Synonymous with quality and durability, the Companys brands are integrated across the hosiery value chain. They enjoy top-of-the-mind recall across all segments and have earned the trust of millions across the globe. Today, the brand "Rupa" with an accomplished milestone of 50+ years in the knitwear industry has been able to sustain business cycles through the interplay of its passion, consumerism and maturity.

The Company has a Pan-India presence with several regional/sales offices, central warehouses over four locations and 9,000+ SKUs and four manufacturing units at Domjur, Kolkata (West Bengal), Tiruppur (Tamil Nadu), Bengaluru (Karnataka) and Ghaziabad (NCR).

Segment Wise and Product Wise Performance

The Company operates within a single reportable segment manufacturing of hosiery and related products. This includes the production of garments, primarily made using high-quality yarns The manufacturing process encompasses knitting, dyeing, finishing, and packaging, with a strong emphasis on delivering products that ensure comfort, durability, and style. These offerings cater to a wide range of consumer needs across fashion, sports, and everyday wear segments.

Business and Financial Overview

The Companys financial statements have been prepared in compliance with the Indian Accounting Standards (Ind AS), as mandated by the Ministry of Corporate Affairs under Section 133 of the Companies Act, 2013, in conjunction with the Companies (Indian Accounting Standards) Rules, 2015 and other applicable provisions of the Act. These statements are also in alignment with accounting practices generally accepted in India, ensuring transparency, consistency and accuracy in financial reporting.

Standalone Financial Performance and Analysis

	Year ended	Year ended
Particulars
	March 31, 2025	March 31, 2024
Revenue from Operations	1,22,718.49	1,19,416.90
Profit before Finance Charges, Tax, Depreciation/Amortization (PBITDA)	14,730.08	13,298.53
Less: Finance Charges	2,076.98	2,065.12
Profit before Tax, Depreciation/Amortization (PBTDA)	12,653.10	11,233.41
Less: Depreciation/Amortization	1,444.32	1,467.95
Profit before Taxation and Exceptional items	11,208.78	9,765.45
Exceptional Items	-	381.81
Profit before Taxation (PBT)	11,208.78	9,383.64
Less: Tax Expense	2,940.83	2,471.56
Profit after Taxation (PAT)	8,267.95	6,912.08

Key Financial Ratios (Standalone)

Ratios	2024-25	2023-24	Reason where variance is more than 25%
Debtors Turnover	2.48	2.62	N.A.
Inventory Turnover	2.84	2.64	N.A.
Interest Coverage Ratio	6.40	5.73	N.A.
Current Ratio	2.60	2.59	N.A.
Debt Equity Ratio	0.04	0.02	The variation in debt-equity ratio is primarily due to increase
			in net debt during the year ended 31st March, 2025
Operating Profit Margin (%)	10.57%	9.74%	N.A.
Net Profit Margin (%)	6.74%	5.79%	N.A.
Return in Net Worth (%)	8.43%	7.45%	N.A.

Risk & Concerns

The Company recognises risk management as an essential, continuous process of identifying, evaluating and addressing both potential opportunities and challenges that could impact its operations. To safeguard its business interests and ensure long-term stability, the Company has established a comprehensive risk management framework. This framework encompasses proactive identification, assessment, monitoring and mitigation of a wide range of risks, with the goal of reducing any adverse effects on the Companys strategic objectives and maximising value for its stakeholders.

The primary goal of the risk management policy is to ensure stable and sustainable growth and embedding a culture of proactive risk reporting and resolution. In compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has appointed a dedicated Risk Management Committee tasked with overseeing the risk management strategy and ensuring its effective implementation. Key risk factors under continuous review include market competition, financial volatility, operational inefficiencies, supply chain disruptions, cyber security threats, regulatory changes and sustainability-related issues. Mitigation measures are regularly evaluated and the Committee ensures that the risk management framework remains agile to address evolving risks.

Material Developments in Human Resources / Industrial Relations

The Company had made several developments in advancing its human resources and industrial relations strategies to enhance organisational capabilities and strengthen employee engagement. Committed to upholding fair labour practices, gender equality and human rights, the Company adheres to strict standards, including no child labour, non-discrimination and fair wages.

To enhance workforce capabilities, the Company has implemented a structured Performance Improvement Plan, alongside comprehensive training programmes that cover product knowledge, behavioural skills, technical expertise and leadership development. Workplace safety is a top priority, with all shop-floor employees, undergoing mandatory safety training.

A performance-based reward system was implemented to recognise high performers, alongside various employee engagement initiatives. These include team-building events, celebration of festivals and other activities that promote collaboration and strengthen the work culture. These efforts collectively contributed to a productive and motivated workforce, aligning with the Companys goals of sustainable growth and inclusivity. As of March 31, 2025, the Companys headcount stands at 840.

Internal Control System

The Company maintains appropriate and effective internal control systems in proportion to the business size and complexity. In our opinion, these systems provide reasonable assurance that policies, processes, tasks, behaviours and other aspects of an organization, taken together, facilitate its effective and efficient operation, help to ensure the quality of internal and external reporting, as well as the accurate recording of financial and operational data, and help to ensure compliance with applicable laws and regulations. It offers a fair guarantee that transactions are carried out with management authorisation. The permissible compilation of financial accounts in accordance with generally accepted accounting standards is also ensured, as is the sufficient protection of the Companys assets from major misappropriation or loss. In addition to this the Company also has a robust internal audit programme and the same is regularly reviewed by Management and the Audit Committee. The Audit Committee periodically meets the statutory and internal auditors of the Company to ascertain the issues dealt with in the reports reviewed during the year, together with additional information, necessary to ensure that the board has taken account of all significant aspects of internal control.

Cautionary Statement

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be ‘forward looking statements within the meaning of applicable securities laws and regulations. Forward looking statements are based on our opinions, estimates and assumptions considering our experience and perception of historical trends, current conditions and expected future developments. The Company cannot guarantee that these assumptions and expectations will prove correct or will be realized by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. Except as required by law, the Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments.