Shine Fashions India Ltd Management Discussions

For the Financial Year Ended March 31st, 2026

1. ECONOMIC AND BUSINESS ENVIRONMENT

The global business environment during the financial year 2025-26 continued to remain dynamic, characterised by changing consumer preferences, evolving trade patterns, fluctuations in raw material prices, geopolitical developments and varying levels of demand across international markets. The textile and apparel industry continued to witness structural changes driven by increasing demand for quality products, shorter delivery cycles, sustainability, product innovation and greater supply-chain efficiency.

India continues to have a significant position in the global textile and apparel value chain, supported by its established manufacturing base, availability of raw materials, skilled manpower and increasing policy focus on textiles and technical textiles. The continued development of technical textiles and increasing emphasis on domestic value addition provide opportunities for companies operating in specialised textile segments.

Against this backdrop, the Company continued to strengthen its position in the interlining and textile raw- material segment while pursuing initiatives aimed at expanding its product portfolio, improving operational capabilities and creating opportunities in international markets.

2. INDUSTRY OVERVIEW

The textile and apparel industry is undergoing significant transformation, with increasing emphasis on technical textiles, functional fabrics, sustainable materials and value-added textile products. Interlining products constitute an important component of apparel manufacturing as they provide structure, shape, durability and functional characteristics to garments.

Demand for interlining products is influenced by the overall growth of the apparel and garment industry, changing fashion trends, increasing product specifications and the requirement for specialised applications across mens wear, womens wear, shirts, suits, outerwear and embroidery products.

The Companys product range includes various categories of interlining solutions such as non-woven interlinings, woven fusible interlinings, cotton interlinings, water-jet interlinings, tricot interlinings, waistband interlinings, canvas and other specialised interlining products. The Company caters to varying customer requirements by offering products in different specifications and applications.

The industry, however, remains exposed to volatility in the prices of cotton, synthetic fibres and other raw materials, foreign exchange fluctuations, changes in international trade policies, logistics costs and competitive pricing pressures.

3. COMPANY OVERVIEW

Shine Fashions (India) Limited is engaged in the business of importing, supplying, trading and processing various types of interlining fabrics and textile raw materials. The Company has developed a product portfolio catering to different segments of the apparel and garment industry.

The Companys principal products and solutions include:

• Non-woven interlinings;

• Polyester and other fusible interlinings;

• Cotton fusible and tricot interlinings;

• Water-jet interlinings;

• Waistband interlinings;

• Hair canvas and other specialised interlining products;

• Double tape and web interlining; and

• Other customised interlining solutions.

The Companys business model is supported by product sourcing, procurement, quality management, customer relationships and timely supply of products according to customer specifications.

During FY 2025-26, the Company continued to build upon its existing business while simultaneously pursuing initiatives for backward integration and expansion into international markets.

4. OPERATIONAL PERFORMANCE

During the year under review, the Company continued to focus on strengthening its core interlining business and improving operational efficiency.

The Company recorded consolidated revenue of approximately Rs.101.99 crore during FY 2025-26, as compared with approximately Rs.81.58 crore during FY 2024-25, representing growth of approximately 24.9%. Consolidated EBITDA before exceptional items stood at approximately Rs.11.36 crore, compared with approximately Rs.9.34 crore in the previous year, reflecting an improvement in operating performance.

On a standalone basis, revenue from operations increased from approximately Rs.80.46 crore in FY 2024-25 to Rs.99.33 crore in FY 2025-26, while EBITDA before exceptional items increased from approximately Rs.9.32 crore to Rs.11.68 crore.

The improvement in operating performance reflects the Companys continued business growth, increasing scale of operations and focus on operational efficiency. The Company remains focused on strengthening its customer base, improving procurement and inventory management and expanding the range of value-added products.

5. FINANCIAL PERFORMANCE

The financial performance of the Company for FY 2025-26 reflects continued growth in the underlying business, whose details are as follows:-

		(Rs. In Crores)
Particulars	For the FY 2025-26	For the FY 2024-25
Revenue from Operations	99.33	80.46
Other Income	0.40	0.07
Total Income	99.73	80.52
Profit before Depreciation, Financial Expenses and Taxation	12.53	9.37
Depreciation &Amortization	0.02	0.02
Financial Expenses	0.83	0.03
Profit before Taxation	11.68	9.32
Less:- Exceptional Items	7.55	-
Less: Provision for Taxation (current & deferred)	1.04	2.35
Profit after Taxation	3.09	6.97

The Companys core operating performance remained positive during the year. However, the reported consolidated profit was affected by a one-time exceptional expenditure of approximately Rs.7.55 crore relating to the Companys strategic market-development initiative.

Accordingly, the reduction in reported profit should be viewed in the context of the exceptional expenditure and not solely as a deterioration in the underlying operating performance of the business.

On a Consolidated basis, the Company recorded revenue of approximately Rs.101.99 crores and profit after tax of approximately Rs.2.93 crores for FY 2025-26.

6. BACKWARD INTEGRATION AND MANUFACTURING INITIATIVE

During the previous financial year, the Board approved the establishment of the Companys first manufacturing unit for interlining/technical textile products as part of its backward-integration strategy.

The initiative represents an important strategic step in the evolution of the Companys business model from primarily trading and sourcing activities towards greater control over manufacturing and value addition.

The proposed manufacturing initiative is expected to provide opportunities for:

• Improving control over product quality;

• Enhancing supply-chain efficiency;

• Reducing dependence on external sources;

• Improving product customisation;

• Strengthening margins over the longer term; and

• Creating opportunities for import substitution in specialised interlining products.

The implementation of the project has experienced initial execution and implementation challenges, and the progress has been slower than originally anticipated. The Company continues to evaluate and implement the project in a measured manner, with emphasis on commercial viability, operational efficiency and long-term returns.

7. INTERNATIONAL BUSINESS AND MARKET EXPANSION

During FY 2025-26, the Company initiated a strategic expansion towards international markets with the objective of developing new export opportunities and broadening its addressable market.

The Company has incurred a one-time strategic investment of approximately Rs.7.55 crore towards its market- development initiative. The investment is intended to establish a platform for accessing international customers and developing export-oriented business opportunities.

The international expansion strategy is expected to focus on leveraging the Companys existing product capabilities, developing relationships with overseas customers, expanding the product portfolio and creating a sustainable export business.

The management believes that international market expansion can provide the Company with opportunities for geographical diversification, larger customer relationships and additional avenues for long-term growth. At the same time, the Company recognises that international expansion involves execution, regulatory, foreign exchange, logistics, credit and market-entry risks.

8. OPPORTUNITIES

The Company believes that the following factors may provide opportunities for future growth:

a. Growth in Apparel and Garment Industry

The continuing development of the apparel industry and increasing demand for quality and specialised garments may support demand for interlining and allied textile products.

b. Technical Textiles and Value-Added Products

The increasing adoption of technical and functional textile products provides opportunities for the Company to develop and market specialised interlining and textile solutions.

c. Backward Integration

The proposed manufacturing initiative provides an opportunity to improve supply-chain control, product development capabilities and operational efficiency.

d. Export Market Expansion

Expansion into international markets provides an opportunity to diversify the Companys customer base and increase the scale of operations.

e. Product Innovation

Changing customer requirements provide opportunities to develop customised, sustainable and application- specific interlining products.

f. Import Substitution

The Companys proposed manufacturing capabilities may enable it to participate in the domestic replacement of certain imported specialised textile products.

9. THREATS AND CHALLENGES

The Company operates in a competitive and evolving industry and faces various risks and challenges, including:

• Volatility in prices of cotton, synthetic fibres and other raw materials;

• Foreign exchange fluctuations arising from import and export activities;

• Changes in international trade policies and duties;

• Increased competition from domestic and international suppliers;

• Changes in customer preferences and fashion trends;

• Logistics and supply-chain disruptions;

• Availability of skilled manpower;

• Execution and commissioning risks associated with the manufacturing project;

• Risks associated with entering new international markets; and

• Working-capital requirements arising from expansion of operations.

The Company continues to monitor these factors and seeks to mitigate their impact through prudent procurement, customer diversification, inventory management, quality control and appropriate risk- management practices.

10. RISK MANAGEMENT

The Company recognises that effective risk management is essential for sustainable business growth. The principal risks associated with the Companys operations include business risk, market risk, raw-material price risk, foreign exchange risk, credit risk, liquidity risk, operational risk and regulatory/compliance risk.

The Company seeks to mitigate these risks through appropriate internal controls, regular review of business operations, evaluation of suppliers and customers, quality controls, insurance coverage and monitoring of financial and operational exposures.

The risk-management framework is periodically reviewed by the management and the Board/appropriate Board Committees, as applicable, to ensure that significant risks are identified and appropriately addressed.

11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established internal control systems commensurate with the size, scale and nature of its operations.

The internal control framework is designed to provide reasonable assurance regarding the safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, operational efficiency and compliance with applicable laws and regulations.

The Companys internal audit mechanism provides an additional layer of review of financial and operational processes. The internal audit function is supported by periodic assessment of internal controls and reporting to the appropriate level of management and the Audit Committee.

The management believes that the internal control systems are adequate and commensurate with the Companys present scale of operations.

12. HUMAN RESOURCES

Human resources continue to be an important component of the Companys ability to deliver quality products and services and maintain customer relationships.

The Company seeks to maintain a professional and performance-oriented work environment while providing employees with appropriate training and opportunities for skill development.

The management recognises that employee capability, operational discipline and product knowledge are important for successful execution of the Companys growth strategy, particularly in relation to manufacturing, quality control and international business development.

The Company remains committed to maintaining a safe, inclusive and conducive workplace and complying with applicable statutory requirements relating to employment and workplace practices.

13. SUBSIDIARY COMPANY

As at March 31, 2026, the Company has its subsidiary, Shinetex Industries Private Limited.

The subsidiary forms part of the Companys consolidated financial statements. The subsidiary was established to support the Companys business activities and has been involved in the processing and allied activities relating to textile/interlining products.

The consolidated financial statements provide a combined view of the financial performance and position of the Company and its subsidiary.

14. BUSINESS OUTLOOK

The management remains cautiously optimistic about the Companys medium- and long-term prospects.

The Companys growth strategy is expected to focus on four principal areas:

1. Strengthening the existing interlining and textile raw-material business;

2. Progressing the backward-integration/manufacturing initiative;

3. Developing international markets and export opportunities; and

4. Improving operational efficiency, working-capital management and product value addition.

The achievement of these objectives will depend upon the successful execution of the Companys strategic initiatives, market conditions, availability and cost of raw materials, customer demand, funding requirements and the broader domestic and global economic environment.

The Company intends to pursue growth in a disciplined manner while maintaining focus on financial prudence, customer service, quality and sustainable value creation.

15. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations.

These statements are based on certain assumptions and expectations of future events and are subject to various risks and uncertainties. Actual results may differ materially from those expressed or implied in such forwardlooking statements due to changes in economic conditions, market demand, raw-material prices, foreign exchange rates, government policies, regulatory requirements, competition, technology, project execution and other factors beyond the Companys reasonable control.

The Company assumes no responsibility for updating or revising any forward-looking statements in light of subsequent developments, events or circumstances.