Saraswati Saree Depot Ltd Management Discussions

Global Economic Outlook

Global economic growth is projected to remain steady at 3.3% in both 2025 and 2026 below the pre-pandemic average of 3.7% observed between 2000 and 2019. An upward revision in the United States offsets modest downgrades in several other major economies.

Inflation continues to ease, with global headline inflation expected to decline to 4.2% in 2025 and further to 3.5% in 2026. This disinflationary trend is supported by falling energy prices and a gradual cooling in labor markets. However, inflation in the U.S. is likely to stay slightly above the Federal Reserves 2% target in 2025, while remaining more subdued in the euro area and low in China.

Several key factors are shaping the outlook. Policy uncertainty especially around trade and fiscal strategies is on the rise. Geopolitical tensions, particularly in the Middle East, and ongoing trade frictions continue to weigh on sentiment and investment. Diverging monetary policy paths among major central banks reflect varying domestic conditions, with the U.S. likely to maintain higher interest rates relative to others. Additionally, fiscal tightening is expected to persist through 2025 26, especially across advanced economies such as the United States.

Source: www.worldbank.org/en/region/sar/publication/south-asia-development-update

Indian Economic Outlook

Indias economy is expected to grow at 6.5% in FY26, maintaining momentum from FY25, underpinned by a balanced blend of domestic growth drivers. Over the medium term (FY26 FY31), GDP growth is projected to average 6.7% annually, led by strong capital formation and productivity gains mirroring the robust growth seen during the pre-pandemic decade. India is poised to remain one of the fastest-growing major economies globally throughout this period.

Growth will be supported by several key enablers: easing food inflation on the back of a normal monsoon, lower borrowing costs following anticipated rate cuts by the RBI, and higher disposable incomes among the middle class due to tax relief measures. Broad-based domestic consumption particularly across FMCG, consumer durables, two-wheelers, tourism, and rural markets will further fuel demand.

Structural vulnerabilities such as competitive pressure from low-cost Chinese imports, exchange rate volatility, capital flow fluctuations, and lingering weaknesses in parts of the manufacturing sector remain areas of concern.

Nonetheless, Indias macroeconomic resilience stands firm, backed by strong fundamentals low external debt, ample foreign exchange reserves, a thriving services sector, and disciplined fiscal policy. Corporate deleveraging over recent years has strengthened balance sheets, enhancing the capacity for future investment.

Source: https://www.crisil.com/content/crisilcom/en/home/events/india-outlook/2025/03/unleashing-manufacturing-the-competitiveness-clarion-call.html

Textiles and Apparel Industry:

Global apparel market is expected to grow at a CAGR of around 8% to reach US$ 2.37 trillion by 2030 and the Global Textile & Apparel trade is expected to grow at a CAGR of 4% to reach US$ 1.2 trillion by 2030. The market for Indian textiles and apparel is projected to grow at a 10% CAGR to reach US$ 350 billion by 2030, with exports expected to reach US$ 100 billion.

India is the worlds second-largest producer of textiles and garments. It is also the fifth-largest exporter of textiles spanning apparel, home, and technical products. The textiles and apparel industry contributes 2.3% to the countrys GDP, 13% to industrial production and 10.5% to exports. The textile industry in India is predicted to double its contribution to the GDP, rising from 2.3% to approximately 5% by the end of this decade. India has a 4.6% share of the global trade in textiles and apparel. Moreover, India is the worlds third largest exporter of Textiles and Apparel. India ranks among the top five global exporters in several textile categories. The textile sector is expected to play a significant role, with a target of US$ 100 billion in exports by FY30, up from US$ 34.43 billion in FY24. In FY25 (April- September) the total exports of textiles stood at US$ 21.35 billion. Around 45 million people are working in the textile business, including 3.5 million people who work on handlooms. Textile manufacturing in India has been steadily recovering amid the pandemic.

India enjoys a comparative advantage in terms of skilled manpower and in cost of production relative to other major textile producers. Indias ready-made garment (RMG) exports are likely to surpass US$ 30 billion by 2027, growing at a CAGR of 12-13%

Source: https://www.ibef.org/industry/indian-textiles-and-apparel-industry-analysis-presentation

India Saree Market Size:

The India saree market size reached USD 5.76 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 10.33 Billion by 2033, exhibiting a growth rate (CAGR) of 6.70% during 2025-2033. The rapid adoption of e-commerce, fueled by AI-driven customization, virtual try-ons, and social commerce, is broadening accessibility and convenience for buyers. Additionally, celebrity endorsements and eco-conscious branding are attracting younger demographics, further augmenting the India saree market share.

The market is witnessing a significant shift toward wearing sarees, driven by increasing consumer interest about traditional fashion. Traditional weaves, including Banarasi, Chanderi, and Kanjeevaram are gaining popularity as buyers prioritize ethical production and artisanal craftsmanship. Government initiatives such as the "Handloom Mark" and "Geographical Indication (GI) tags" have further enhanced consumer confidence in authentic handloom products.

Additionally, younger generations are embracing sarees as a way to support local weavers and reduce fast fashions environmental impact. Brands and designers are responding by promoting organic dyes, biodegradable packaging, and fair-trade practices. Social media influencers and celebrities endorsing handloom sarees are also significantly supporting the India saree market growth. As a result, the market for sarees is expanding, with both domestic and international buyers showing keen interest in ethically made, heritage textiles.

Growth of Online Saree Retail and Customization:

The market is experiencing rapid digital transformation, with online platforms becoming a preferred shopping destination for consumers. Indias fast-developing e-commerce industry, poised to reach a value of USD 345 Billion by 2030 and USD 550 Billion by 2035, is opening new international opportunities for traditional saree sellers through digital platforms. With 944.7 million internet users and over 150 million online buyers many people are selling sarees on YouTube channels. Government policies, such as 100% FDI, the growth of ONDC, and B2B e-commerce reform, are driving the digitalization in Indias vibrant saree industry.

Source: https://www.imarcgroup.com/india-saree-market

Policy Support:

• Total FDI inflows in the textiles sector stood at US$ 4.56 billion between April 2000-September 2024.

• The Textile Ministrys allocation increases by 19%, rising from Rs. 4,417.03 crore (US$ 512 million) in 2024 25 to Rs. 5,272 crore (US$ 611 million) in 2025 26, reflecting the governments commitment to addressing long-standing challenges and unlocking new growth opportunities.

• The Union Budget 2025-26 allocates Rs. 1,148 crore (US$ 133.1 million) for the PLI Scheme to boost domestic manufacturing and exports, and Rs. 635 crore (US$ 73.6 million) for the Amended Technology Upgradation Fund Scheme to modernize textile machinery.

• The Governments Rs. 10,683 crore (US$ 1.44 billion) PLI scheme is expected to be a major booster for the textile manufacturers. The scheme proposes to incentivise MMF (man-made fibre) apparel, MMF fabrics and 10 segments of technical textiles products.

Source: https://www.ibef.org/industry/indian-textiles-and-apparel-industry-analysis-presentation

Company Overview:

Saraswati Saree Depot Limited (SSDL) is a prominent organized player in Indias saree industry, with a legacy spanning over five decades. Established in 1966 and formally launched as a partnership firm in 1993, SSDL operates in the B2B and wholesale segment of traditional womens apparel. The Company generates over 90% of its revenue from sarees, while also dealing in a wide range of womens apparel such as kurtis, dress materials, blouse pieces, lehengas, and accessories, offering a robust catalogue of over 300,000 SKUs. Its operational presence includes two large-format stores in Maharashtra its flagship store in Kolhapur and another in Ulhasnagar collectively spanning more than 185,000 sq. ft., with the Kolhapur outlet contributing nearly 88% of overall sales. In October 2024, SSDL enhanced its sourcing efficiency by acquiring a 25,000 sq. ft. purchase office in Surat, strategically located near key suppliers. The company sources sarees from over 900 weavers and vendors across major textile hubs like Surat, Varanasi, Madurai, and Kolkata, and primarily caters to over 13,000 unique customers across southern and western India, including Maharashtra, Goa, Karnataka, and Tamil Nadu.

Financial Overview:

The consolidated financial performance of the Company for the financial year ended March 31st, 2025, is as follows:

Total revenue from operations stood at Rs. 613.61 crore for the year ended March 31, 2025, as against Rs. 610.9 crore for the corresponding previous period, increase of 0.44% EBITDA (excluding other income) was at Rs. 42.15 crore as against Rs. 40.43 crore in FY24, an increase of 4.25% EBITDA Margin for the year ended FY25 was 6.87% as against 6.62% in FY24, an increase of 25 bps The PAT (profit after tax) was Rs. 30.57 crore for the year ended March 31, 2025, as against Rs. 29.53 crore for the corresponding previous period, a growth of 3.52% FY25 PAT Margin stood at 4.98% as against PAT Margin of 4.83% in FY24, increase of 15 bps.

Details of Significant Changes in Key Financial Ratios:

Ratios	FY25	FY24
(i) Debtors Turnover	7.22	8.14
(ii) Inventory Turnover	5.27	5.68
(iii) Interest Coverage Ratio	39.44	16.65
(iv) Current Ratio	2.63	1.41
(v) Debt Equity Ratio	0.02	0.67

Explanation:

Interest Coverage Ratio is improved due to lower finance cost on account of debt repayment. Current ratio is improved on account of lower borrowings and increased inventories and receivables. Short term Debt has been repaid hence Debt to equity ratio is 0.02.

Risks and Concerns:

The traditional apparel and saree wholesale industry faces several inherent risks. Heavy reliance on sarees makes businesses vulnerable to shifts in consumer preferences and fashion trends. The market is highly seasonal, with sales peaking during festivals and weddings, causing revenue fluctuations. Intense competition from unorganized players puts pressure on pricing and margins. Many operators have geographically concentrated operations, making them susceptible to local disruptions. The industry also depends heavily on third-party suppliers without long-term contracts, leading to supply chain uncertainties. High working capital needs, inventory management challenges and regulatory compliance requirements further add to the operational risks. Broader economic factors such as inflation and policy changes can also impact demand and cost structures.

Internal Control Systems:

The Company recognizes the critical importance of robust internal control systems for managing its business operations, ensuring financial integrity, and mitigating risks. SSDL leverages an ERP software system for sales, purchase, inventory, financial reporting, and invoicing, which helps track procurement and sales while enhancing operational efficiency. Its data security framework includes firewalls, web content filtering, encryption, and authentication technologies, along with backup systems. To safeguard physical assets, the Company has implemented security cameras, guards, and periodic stock verification at its stores, and maintain proper records for cash payments, reconciling them with bank statements to prevent misappropriation. The Audit Committee, formed as per the Companies Act and SEBI Listing Regulations, oversees financial reporting, disclosures, internal control effectiveness, and audit reviews. SSDL also has a vigil mechanism in place, with the Chairman of the Audit Committee addressing grievances related to victimization, ensuring a transparent platform for reporting concerns.

Human Resources:

The employees play a vital role in the smooth functioning of the Companys operations and in maintaining its competitive edge in the market. As of March 31, 2025, SSDL had a total workforce of 247 employees. Attracting and retaining skilled talent remains a priority, and the Company has implemented bonus/profit-sharing plans for KMP and SMP, though it does not currently offer employee stock options. The Company has maintained cordial labor relations with no history of strikes or unrest, and remain committed to complying with all applicable labor laws and regulations in India.

Outlook:

IThe Indian saree industry is projected to grow at a CAGR of 6.7% from 2025 to 2033, reaching USD 10.33 billion. As an organized player, the Company is well-positioned to benefit from the faster growth of the organized segment. The Company will continue investing in IT infrastructure, strengthening its ERP systems and data analytics capabilities to enhance operational efficiency, supply chain effectiveness, and customer satisfaction. It remains focused on product diversification and quality through innovative designs and strong supplier relationships, which offer advantages such as favorable pricing and exclusive designs. In line with its long-term vision to become more consumer-centric and explore higher-margin opportunities, the Company is entering the retail segment, beginning with the launch of its first exclusive retail outlet in Kolhapur as a pilot initiative. Further expansion will be based on insights gathered from this initial rollout, reflecting a cautious yet confident approach. The Company is also actively evaluating the performance of its Ulhasnagar branch and intends to take a decisive strategic decision in the coming months to protect overall business health. The Company also plans to explore entry into the mens ethnic wear segment to capitalize on emerging trends. Overall, its strategy for sustained growth includes efficient management of operational complexities, expanding its customer base, introducing new product lines, and maintaining disciplined capital allocation to ensure long-term value creation and sustainable growth.

For and on Behalf of The	Vinod Dulhani
Board of Directors	CEO & Managing Director
Place : Kolhapur	DIN: 09105157
Date : 14.08.2025