Sangam (India) Ltd Management Discussions

ECONOMIC OVERVIEW

Global Economy

The global economy registered a growth of 3.3% in 2024, signalling a degree of stability despite restrained momentum. However, 2025 has brought about increased volatility, shaped by evolving trade policies, rising geopolitical tensions, and enduring structural macroeconomic challenges. A significant inflection point occurred in April 2025, when the US introduced near-universal tariffs, prompting widespread retaliatory measures. These developments disrupted global trade patterns, triggered corrections across financial markets, and contributed to a rise in global bond yields.

In this shifting global landscape, GDP growth is projected to slow to 2.8% in 2025, with a modest recovery anticipated at 3.0% in 2026.

Inflation has remained more persistent than earlier forecasts suggested. Headline inflation is expected to average 4.3% in 2025, driven primarily by rising input and logistics costs. Core inflation continues to be elevated, particularly in the services sector, complicating the monetary policy decisions of central banks globally.

Indias economy grew by 6.5% In 2024-25, according to the National Statistics Offices second advance estimates released In February 2025. This growth was achieved despite ongoing global uncertainties, Including trade tensions and geopolitical disruptions, and highlights the resilience of Indias domestic demand as well as the effectiveness of Its calibrated policy Interventions.

The global textile market Is positioned for continued expansion, supported by shifting consumer preferences, rapid technological progress, and evolving global dynamics. The market Is expected at USD 696.16 Billion In 2025. Looking ahead, the market Is projected to reach USD 915.96 Billion by 2029, at a CAGR of 7.1% over the forecast period. This strong growth trajectory underscores the Industrys adaptability, resilience, and capacity to thrive amidst changing economic, technological, and environmental conditions. As economic development reshapes consumption patterns, demand continues to grow across segments such as apparel, home furnishings, and technical textiles.

The rise of fast fashion and the proliferation of e-commerce platforms have amplified demand for a diverse range of fabrics, prompting manufacturers to Invest In more agile and Innovative production systems that can rapidly respond to evolving market needs and reduce time-to- market across product categories.

Sustainability has emerged as a key priority, with Increasing consumer preference for environmentally responsible products. This is driving the development and adoption of textiles made from recycled materials, organic fibres, and renewable resources. As the sustainability Imperative gains momentum, It Is expected to reshape production practices and guide Investment flows across the textile value chain.

The Industry Is also undergoing a significant structural transformation powered by the rise of smart textiles and the adoption of advanced digital manufacturing technologies. Smart textiles, or e-textiles, are engineered to respond to environmental stimuli such as temperature, pressure, and humidity. These Intelligent fabrics Incorporate sensors and conductive materials to enable functionalities such as health monitoring, thermal regulation, and data transmission. Their adoption Is gaining momentum, particularly In high-performance segments Including sportswear, healthcare, and defence, where Innovation and functionality are critical differentiators.

Simultaneously, the Integration of Industry 4.0 technologies Including automation, robotics, artificial Intelligence, and advanced processes like 3D knitting and digital printing Is reshaping manufacturing operations. These Innovations are enhancing production efficiency, enabling on- demand manufacturing, reducing material waste, and facilitating greater product customisation. AI- driven analytics are also increasingly Instrumental In optimising supply chains, enhancing quality control, and Improving responsiveness to shifting market dynamics.

(Source: https://www .thebusinessresearchcompany.com/report/textile-global-market-reportResearch and Markets - Global Textiles Market)

(Source: https://www.textilesphere.com/2024/11/indian-textile-industry-outlook-2025.html )

(Source: https://www.pib.gov.in/ PressReleasePage.aspx?PRID=2117470)

(Source: https://ministryoftextiles.gov.in/sites/ default/files/Indian%20Manmade%20fibre%20 textileX20industry.pdf https://texmin.nic.in/pli-scheme-textiles )

(Source: https://www.fashionatingworld.com/ new1-2/india-cotton-production-to-rise-to-302-25-lakh-bales-in-2024-25-season https://economictimes.indiatimes.com/industry/ cons-products/garments-/-textiles/indian-cotton-spinning-industry-expected-to-recover-in-fy25-icra-report/articleshow/111782851.cms)

(Source: https://www.grandviewresearch.com/ horizon/outlook/activewear-market/indiahttps://www.reuters.com/business/ retail-consumer/japans-asics-boost-india-sportswear-production-40-amid-import-restrictions-2025-06-16https://www.reuters.com/business/retail- consumer/jockey-india-licensee-page-industries-beats-q3-profit-view-strong-athleisure-2025-02-05)

(Source: https://www.imarcgroup.com/india- innerwear-market https://texmin.nic.in )

The Indian government continues to prioritise the growth of the textile sector through initiatives such as the PLI Scheme, Make in India, and other export-linked incentives. These policies provide a conducive ecosystem for investment in modern, integrated textile units by offering financial support, infrastructure, and tax incentives. Such initiatives are also intended to improve global competitiveness and support capacity expansion, especially in high-value segments like technical textiles and MMF production.

3 Technological Advancements and Digital Integration

Rapid advancements in automation, AI, and smart textile innovation are reshaping the manufacturing landscape. Digital platforms are enabling greater end-to-end supply chain visibility, enhancing quality control, and driving operational efficiency. Additionally, the expanding e-commerce ecosystem has facilitated the rise of direct-to- consumer channels, enabling textile brands to broaden their reach, strengthen customer engagement, and respond more swiftly to evolving market trends.

4 Export Potential and Global Demand

India remains one of the largest textile exporters globally, supported by its large manufacturing base, skilled workforce, and diverse product range. With increasing demand for affordable, high-quality textiles worldwide, Indian manufacturers are well-positioned to expand their international footprint by leveraging free trade agreements, tapping into emerging markets, and responding to shifts in global supply chains caused by geopolitical disruptions and China+1 strategies.

Fluctuations in the prices of key raw materials, such as cotton and synthetic fibres, continue to exert pressure on input costs and profit margins. In addition, global supply chain disruptions caused by geopolitical tensions, trade restrictions, and climate-related events pose risks to the availability and timely sourcing of materials, thereby impacting production timelines and pricing stability.

Despite having a large labour pool, the sector continues to face a shortage of skilled workers in advanced textile processes such as digital printing, technical textiles, and automated production. Addressing this gap requires sustained investment in skilling, vocational training, and capacity-building initiatives, particularly to align the workforce with Industry 4.0 standards.

India faces strong competition from countries like Bangladesh and Vietnam, which offer lower labour costs and enjoy preferential trade agreements with key importing nations. To remain competitive, Indian manufacturers must prioritise productivity enhancement, design and innovation capability development, and the strengthening of global brand visibility.

With tightening environmental regulations worldwide, textile manufacturers are under increasing pressure to comply with sustainability norms.

This includes reducing water consumption, managing chemical effluents, minimising waste, and ensuring responsible sourcing. Compliance is not only critical from a regulatory perspective but also essential to meeting the expectations of environmentally conscious consumers and international buyers.

Founded in 1984, Sangam (India) Limited (also referred to as ‘Sangam,? ‘SIL? or ‘The Company?) is a fully integrated textile company, operating seamlessly across the entire value chain, from yarn manufacturing and fabric processing to garmenting. Headquartered in Bhilwara, Rajasthan, the Company has established a strong foundation of manufacturing excellence and innovation over four decades.

SIL operates five advanced manufacturing units located in Bhilwara and Chittorgarh, equipped with state-of-the-art spinning, weaving, processing, and garmenting technologies. With an installed base of over 3 Lakhs spindles, a denim production capacity of 60 Million meters, and a robust seamless garment facility, SIL is one of India?s leading producers of PV-dyed yarn and denim fabric.

The Company?s wide-ranging product portfolio includes PV-blended yarns, cotton and open-end yarns, PV fabrics, denim fabrics, seamless garments under the C9 brand, and knitted fabrics. It serves a reputed client base including Walmart, Marks & Spencer, Primark, Zudio, Nykaa, Jockey, Decathlon, Mango, Reliance Retail & More SIL?s customer-centric approach and diversified product portfolio enabled it to expand its international footprint, exporting to over 50 countries.

? Strengthened global presence, with exports to over 54 countries contributing Rs.1,123 Crore in revenue.

? Enhanced operational efficiencies and capacity utilisation across manufacturing units.

? Maintained strategic focus on transitioning from a volume-led to a value-led product portfolio.

SIL has instituted a comprehensive risk governance framework that spans risk identification, assessment, mitigation, and reporting. The Risk Management Committee periodically reviews and addresses a range of risks that could influence operational and financial performance. These include shifts in business conditions, market volatility, geopolitical uncertainties, environmental challenges, and liquidity constraints.

Each identified risk is assessed in terms of likelihood and potential impact, followed by the development of mitigation strategies tailored to safeguard business continuity. This proactive approach enables the Company to respond dynamically to evolving risk scenarios while supporting strategic decision-making.

People are central to SIL?s progress. The Company places strong emphasis on building an inclusive, engaged, and high-performing workforce. Recognising employees as a key source of intellectual capital, SIL is focused on attracting, developing, and retaining talent across its operations.

In 2024-25, Sangam undertook several initiatives to enhance employee engagement, skill development, and workplace wellbeing. The Company?s efforts focused on equipping its workforce with future-ready capabilities, fostering a culture of safety, and promoting inclusivity across the organisation.

A structured learning calendar

was rolled out covering technical,

managerial, and behavioural skills.

Key programmes included:

? Lean Six Sigma for driving process excellence and operational efficiency.

? Power BI training for enhancing data analytics and decisionmaking capabilities.

? Negotiation and Salesmanship workshops to strengthen frontline performance.

? Management Development Programmes (MDPs) for building leadership and managerial competencies.

To complement technical training, employees were engaged in sessions on:

? Health and Safety practices and compliance requirements.

:? Social Benefits and Inditec Audits to ensure awareness of welfare measures and compliance standards.

:? Communication and Interpersonal Skills for workplace effectiveness.

? Gender Sensitisation and Equal Opportunity workshops to reinforce an inclusive culture.

In alignment with its focus on safety and quality, the Company organised practical training on:

? Workplace safety and occupational health.

? Machine operation and preventive maintenance.

? Quality control, yarn standards, and process adherence.

? Lean manufacturing and waste reduction practices.

These initiatives underline Sangam?s commitment to nurturing a skilled, safe, and inclusive workforce, aligned with its growth and sustainability objectives.

To support continuous capability development, SIL has implemented a structured learning and development framework that encourages skill enhancement across roles. As of 31^st March, 2025, the Company employed over 11,000 individuals across multiple geographies and functions.

Through its commitment to a diverse, empowered, and future-ready workforce, SIL continues to invest in long-term organisational growth and resilience.

SIL upholds robust and effective internal control systems that match the scale and complexity of its operations. These systems are designed to ensure that transactions receive proper management authorisation and are integrated at all organisational levels.

They facilitate compliance with statutory and regulatory standards for internal controls and ensure the accurate recording of both financial and operational data, adhering to generally accepted accounting principles. Additionally, these controls provide adequate protection against significant asset misappropriation or loss. A key element of SIL?s internal control framework is its independent internal audit function, supported by a comprehensive internal audit programme and regular evaluations conducted by Management and the Board?s Audit Committee.

Statements made in this Management Discussion and Analysis Report may contain certain ‘forward-looking statements? based on various assumptions about the Company?s present and future business strategies and the environment in which it operates. Actual results may differ substantially or materially from those expressed or implied due to risks and uncertainties. These risks and uncertainties include the effects of economic and political conditions in India and abroad, volatility in interest rates and the securities market, new regulations and government policies that may impact the Company?s businesses, as well as the ability to implement its strategies. The information contained herein is as of the date referenced, and the Company does not undertake any obligation to update these statements. The Company has obtained all market data and other information from sources believed to be reliable or its internal estimates, although its accuracy or completeness cannot be guaranteed.