Sihora Industries Ltd Management Discussions

The market is projected to grow from USD 1,065.45 billion in 2026 to USD 1,955.50 billion by 2034, exhibiting a CAGR of 7.11% during the forecast period. Asia Pacific dominated the adventure tourism market with a market share of 44.17% in 2025.

Textile products mainly include flexible materials made from natural and synthetic fibers, yarns, and fabrics. The materials can be woven or knitted into different forms and are widely used in clothing, home furnishings, medical use, and other sectors. The increasing consumer shift from traditional synthetic fabric materials toward organic cotton, recycled polyester, and biodegradable fabrics is further driving the global textiles market.

Key companies such as Hengli Textile, Shenzhou International Group Holdings Ltd, Toray Industries, Inc., and Chargeurs SA are focusing on the development of wearable textiles and antibacterial fabrics, which are contributing to the growth of the global textile market. Furthermore, innovations in smart textiles, 3D printing, and automation technologies are further promoting the expansion of the textile industry.

Source: https://www.fortunebusinessinsights.com/textile- market- 103879

INDIAN ECONOMY

Indias exports of textiles and apparel, including handicrafts, stood at ?3,25,339 crore in 2025- 26, registering a growth of 1.8 per cent over ?3,19,573.2 crore in 2024- 25 with export growth recorded in over 100 countries.

The Government has implemented several schemes and undertaken various initiatives to strengthen the global competitiveness and export preparedness of the Textile and Apparel sector. These interalia includes the PM Mega Integrated Textile Regions and Apparel Parks Scheme (including at Amravati, Maharashtra), the Production Linked Incentive Scheme for Textiles, the National Technical Textiles Mission, SAMARTH - Scheme for Capacity Building in the Textile Sector, and the launch of various components including Market Access Support and interest subvention under the Export Promotion Mission etc. In addition, several measures have recently been undertaken to support the Textile and Apparel exports and address emerging global challenges. These include the extension of Remission of Duties and Taxes on Exported Products Scheme up to 30 September 2026; the temporary exemption from customs duty on import of Cotton falling under Customs Tariff Heading 5201 from 1 June to 31 October 2026; the temporary exemption from customs duties on key inputs in the man- made fibre (MMF) value chain, including Purified Terephthalic Acid and Mono- Ethylene Glycol; rationalisation of GST rates for correcting of the inverted duty structure in the MMF value chain; and the launch of the Resilience & Logistics Intervention for Export Facilitation (RELIEF) initiative to support exporters affected by disruptions arising from the evolving geopolitical situation in West Asia and its continuing impact on maritime logistics across the Gulf and adjoining regions.

The Rebate of State and Central Taxes and Levies (RoSCTL) Scheme, operational since March 2019, provides for the rebate of embedded State and Central taxes and levies on the export of garments and made- ups, with a view to enhancing the competitiveness of these sectors. The Scheme has been extended for a further period of six months, up to 30 September 2026, to ensure policy predictability and stability for exporters in these sectors.

The Government has also adopted a focused export- promotion and market- diversification strategy covering 40 priority countries. Sixteen Free Trade Agreements (FTAs), including the India- United Kingdom Comprehensive Economic and Trade Agreement (CETA), are already in force. In addition, the FTA negotiations with the European Union have been successfully concluded, while India has signed an FTA with New Zealand. These agreements provide an opportunity for Indian textiles and apparel sector to enhance their exports and undertake market diversification.

To further enhance textile sector competitiveness and export preparedness, the Ministry of Textiles has established six Textile Export Facilitation Centres (TEFCs), including at Ichalkaranji, Maharashtra, launched India Immersive Experience Programme through National Institute of Fashion Technology to showcase Indias textiles, handicrafts, culture and design ecosystem to international institutions of designs/fashions. The Ministry of Textiles successfully concluded the Textiles Summit in June 2026 which brought together representatives from State Governments/UTs, industry, and academia to foster collaborative dialogue on the growth of the textile sector and unlock the potential of districts. The products of textiles & handicraft were exported from more than 500 districts in 2025- 26. The district led focused approach with 100 champion & 100 aspirational Textiles Districts has been adopted to facilitate better improved planning and implementation support. The third edition of Bharat Tex, a global mega textiles event was held from 14th- 17th July, 2026 to showcase Indias entire textile value chain, foster global business partnerships, and position India as a leading global sourcing and manufacturing hub for textiles and apparel.

Collectively, these measures have helped diversify export markets, strengthen supply- chain resilience, improve market access including through e- commerce and enhance the competitiveness of Indian exporters, particularly MSMEs including Maharashtra.

Source: https://ebs.publicnow.com/

Indias Textile Exports Register Growth of 2.1% in FY 2025-26

Indias textile sector continued to demonstrate resilience in global markets during FY 2025- 26. Total textile exports, including handicrafts, increased from ?3,09,859.3 crore in FY 2024- 25 to ?3,16,334.9 crore in FY 2025- 26, registering a growth of 2.1%. This performance reflects steady global demand for Indian textile products and the continued competitiveness of the sector across major product categories.

Among the major segments, Ready- Made Garments (RMG) of all textiles remained the largest contributor to textile exports, rising from ?1,35,427.6 crore to ?1,39,349.6 crore, an increase of 2.9%. Cotton yarn, fabrics, made- ups and handloom products recorded exports of ?1,02,399.7 crore in FY 2025- 26 as against ?1,02,002.8 crore in FY 2024- 25, reflecting stable growth of 0.4%. Man- made yarn, fabrics and made- ups posted a stronger growth of 3.6%, with exports increasing from ?41,196.0 crore to ?42,687.8 crore.

Among value- added segments, handicrafts excluding handmade carpets recorded the highest growth among major categories, rising by 6.1% from ?14,945.5 crore to ?15,855.1 crore.

Export growth was registered in more than 120 destinations during April 2025 to February 2026 over the corresponding period of the previous year, indicating broad- based geographical expansion in Indias textile export basket. A notable growth has been observed in key markets such as UAE (22.3%), UK (7.8%), Germany (9.9%), Spain (15.5%), Japan (20.6%), Egypt (38.3%), Nigeria (21.4%), Senegal (54.4%), and Sudan (205.6%) etc

The Government has continued to support the sector through key export facilitation and remission measures, including the extension of the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme and the RoDTEP Scheme beyond 31.03.2026.

Indias FTA agenda also saw major progress during 2025- 26, with important implications for the textile and apparel sector. The India- EFTA TEPA entered into force on 1 October 2025; the India- UK CETA was signed in July 2025; the India- Oman CEPA in December 2025; the India- New Zealand FTA was announced on 22 December 2025; and the India- EU FTA was concluded on 27 January 2026. Collectively, these FTA developments are expected to improve preferential market access, reduce tariff disadvantages, support supply- chain integration, and open new opportunities for textiles, apparel, handicrafts and technical textiles, thereby aiding market diversification, export growth, investment, technology partnerships, and Indias deeper integration into global value chains.

The continued growth in textile exports, coupled with sustained policy support, underlines the Governments commitment to strengthening the sector, promoting employment, and advancing the goal of higher value- added exports.

MARKET DYNAMICS

Market Drivers

Growing Demand for Technical Textiles from Different Sectors to Foster Market Growth

The expansion of technical textiles is driven by their enhanced functional properties and wide- ranging applications across different industries, such as automotive, agriculture, healthcare, and others. Furthermore, technological advancements in the production of fabric products, including smart, multi- functional, and sustainable fiber products, are expected to drive the textile market growth in the long run. For instance, according to the India Brand Equity Foundation data, published in July 2023, the import value of technical textiles in India reached USD 2.46 billion in FY 2021- 2022.

Market Restraints

Fluctuation in the Prices of Cotton to Limit Market Growth

The price instability of cotton acts as a restraining factor for the overall textile market. Cotton is one of the most essential raw materials that is used to produce different types of fabric products. Therefore, when cotton prices rise, fabric manufacturers face increasing production costs, often leading to higher prices of the final products. This situation reduces profit margins, particularly for smaller firms, thus restricting market growth.

Market Opportunities

Rapid Establishment of Online Sales Channels by Textile Manufacturers to Augment Growth

Recently, fabric brands have been leveraging online sales platforms to reach global buyers and distributors, tapping into new markets beyond their traditional reach and overcoming geographical barriers. Digital transformation also enables small manufacturers to diversify their sales channels and attract both buyers and suppliers. For instance, in September 2023, Mango, a European fashion brand, expanded its online sales by launching in twenty- two new markets, particularly across Africa and several emerging regions.

TEXTILE MARKET TRENDS

Inclination of Consumers toward Sustainable and Organic Fabrics to Support Market Development

In recent times, consumers have increasingly favored fabrics that reduce environmental impact, such as organic cotton, biodegradable fibers, and recycled materials that help minimize waste. Fabric manufacturers and brands are investing in research and development to innovate new bio- fabricated and circular economy- driven fabrics. This sustainability trend is opening new growth opportunities across markets such as fashion apparel, home textiles, sportswear, and others. For instance, in April 2023, Zara, a global fashion retail company, launched a first of its kind womens capsule collection made with recycled polycotton blended textiles, in partnership with Circ, a fashion technology company specializing in recycling polycotton waste.

SEGMENTATION ANALYSIS

By Product Type

Extensive Retail Ecosystem Boosted Apparel Textiles Segment Growth

Based on product type, the market is divided into technical textiles, home textiles, apparel textiles, and industrial textiles. The apparel textiles segment is expected to dominate the market, capturing a share of

30.30

%

30.30% in 2026. Apparel encompasses a broad range of products and styles for men, women, and kids, supported by advanced manufacturing capabilities and extensive retail ecosystems globally. Continuous innovation in smart clothing products with advanced features is further boosting segment growth.

For instance, according to the India Brand Equity Foundation, in FY 2022, Indian fabrics and apparel exports increased by

41

%

41% , reaching a value of USD 44.40 billion in 2022.

The technical textiles segment is expected to grow at the fastest CAGR during the forecast period.

By Textile Form

Increased Demand for Durable Fibers to Boost the Growth of the Synthetic Segment

Based on textile form, the market is divided into synthetic fibers and natural fibers. The synthetic fibers segment is expected to hold the majority share of the market, accounting for

68.05

%

68.05% in 2026. Synthetic fibers such as polyester, nylon, and acrylic are more cost- effective to produce compared to natural fibers. Furthermore, these fibers offer superior strength, durability, and elasticity, making them highly suitable for various industrial applications, thus supporting the growth of the segment.

The natural fibers segment is expected to grow at the fastest CAGR of

8.65

%

8.65% during the forecast period.

By Fabric Type

Growing Application of Woven Fabrics Boosts the Growth of the Segment

Based on fabric type, the market is divided into woven and nonwoven. The woven segment is expected to lead the market, accounting for an estimated

66.53

%

66.53% share in 2026. The interlacing of yarns in woven fabrics provides high performance and resistance to wear, making them suitable for apparel and technical textile applications, such as airbags, seat belts, and medical products, boosting the segment growth.

For instance, according to the National Cotton Council of America, textile mills in the U.S. typically manufacture approximately 8 billion square yards of woven cotton goods and 3 billion square yards of knitted cotton goods annually.

The non- woven is estimated to be the fastest- growing segment with a CAGR of

8.43

%

8.43% during the forecast period.

By End-user

Rising Prevalence of Home Décor and Renovations to Boost the Fabric Demand within the Residential Sector

Based on end- user, the market is divided into residential and commercial. The commercial segment is further divided into hospitality, healthcare, corporate offices, and others.

The residential segment is expected to lead the market, accounting for

64.03

%

64.03% in 2026. The increasing consumer spending on home décor and renovations makes textiles a suitable option to upgrade living spaces. Moreover, higher urban populations and increasing

The Government is taking initiatives to attract foreign investment in the textile sector through promotional visits to countries such as Japan, Germany, Italy and France. According to the new Draft of the National Textile Policy, the Government is planning to attract foreign investment and creating employment opportunities for 35 million people. India can become the one- stop sourcing destination for companies from Association of Southeast Asian Nations (ASEAN) as there exist several opportunities for textile manufacturing companies from 10- nation bloc to invest in India.

ADVANTAGE

Competitive Advantage

Abundant availability of raw materials such as cotton, wool, silk and jute.

India enjoys a comparative advantage in terms of skilled manpower and in cost of production relative to other major textile producers.

Union Minister of Commerce and Industry, Mr. Piyush Goyal, emphasised that the India- United Kingdom (UK) Free Trade Agreement (FTA) opens transformative opportunities for wellestablished sectors of India such as textiles, leather, and footwear sectors, enhancing competitiveness and visibility in the UK market.

Robust Demand

The Indian technical textiles market is expected to expand to US$ 23.3 billion by 2027, driven by increased awareness of goods and higher disposable incomes.

Cotton production in India is projected to reach 7.2 million tonnes

(

~

43

( ~ 43 million bales of 170 kg each) by 2030, driven by increasing demand from consumers.

The total textile and apparel exports (including handicrafts) stood at US$ 35.52 billion during FY26, as compared to US$ 36.62 billion in FY25.

Policy Support

100

%

100% FDI (automatic route) is allowed in the Indian textile sector.

The Union Budget 2026- 27 allocated Rs. 5,279.01 crore (US$ 597.34 million) to the Ministry of Textiles, compared to the revised estimate of Rs. 5,766.68 crore (US$ 652.52 million) in FY25- 26. The budget also continued key initiatives such as the Cotton Mission and broader integrated programmes aimed at enhancing productivity, dependence, and reducing strengthening import MSME competitiveness across the textile value chain.

The Indian Council of Agricultural Research (ICAR)- Central Institute for Cotton Research (CICR) is implementing a special cotton project under the National Food Security and Nutrition Mission across eight major cotton- growing states, with an outlay of Rs. 6,032.35 lakh (US$ 6.83 million) allocated for FY25- 26 to promote best practices and enhance cotton productivity.

Increasing Investments

Total FDI inflows in the textiles (including Dyed, printed) sector stood at Rs. 33,512.66 crore (US$ 5,073.03 million) between April 2000March 2026.

According to Apparel Export Promotion Council (APEC), significant opportunities exist to deepen collaboration between Indian and Japanese firms in the textiles sector, with Tokyo- based companies expressing keen interest to invest in India.

THREATS, RISKS AND CHALLENGES

1. Volatility in Raw Material Prices

The primary raw materials used in the manufacture of zippers, laces and narrow woven fabrics include polyester yarn, nylon yarn, cotton yarn, metal components, dyes, chemicals and other textile inputs. Prices of these materials are influenced by crude oil prices, supply- demand dynamics, global commodity markets and foreign exchange movements. Significant fluctuations in input costs may adversely affect profit margins, particularly where cost increases cannot be fully passed on to customers due to competitive market conditions.

2. Intense Industry Competition

The textile accessories market is highly competitive with the presence of numerous organised and unorganised domestic manufacturers, as well as international players. Competition is based on pricing, quality, delivery schedules, product innovation and customer service. Continuous pricing pressure may impact margins and necessitate ongoing investments in product development, operational efficiency and customer relationship management.

3. Dependence on the Textile and Apparel Industry

Demand for zippers, laces and narrow woven fabrics is closely linked to the performance of the textile, garment, footwear, luggage and fashion industries. Any slowdown in these sectors due to economic downturns, reduced consumer spending or changes in fashion trends may adversely affect demand for textile accessories.

4. Global Economic Uncertainties

Macroeconomic challenges such as inflationary pressures, high interest rates, geopolitical conflicts, trade restrictions and recessionary conditions in major export markets may impact international demand for textile and apparel products. Such developments may result in lower export orders, reduced capacity utilisation and pricing pressures across the textile value chain.

5. Foreign Exchange Risk

Manufacturers engaged in exports or dependent on imported raw materials and machinery are exposed to foreign currency fluctuations. Volatility in exchange rates may increase procurement costs, affect export realisations and impact overall profitability if not effectively managed through appropriate hedging strategies.

6. Supply Chain Disruptions

The industry depends on timely availability of raw materials, transportation networks and logistics infrastructure. Disruptions arising from geopolitical tensions, shipping delays, port congestion, natural disasters or global supply chain constraints may increase procurement costs, delay deliveries and affect customer commitments.

7. Changing Fashion Trends and Consumer Preferences

The lace and fashion accessories segment is significantly influenced by evolving fashion trends, seasonal demand patterns and changing consumer preferences. Rapid shifts in design, colour and styling may lead to inventory obsolescence and require continuous investment in product innovation and market intelligence.

8. Technological Advancements

Advancements in manufacturing technologies, automation and digital textile production require continuous capital investment to remain competitive. Failure to adopt modern production technologies may result in lower productivity, higher manufacturing costs and reduced competitiveness in domestic and international markets.

9. Labour Availability and Skill Development

The textile industry remains labour- intensive despite increasing automation. Availability of skilled labour, rising wage costs, employee retention and continuous skill development remain key operational challenges. Labour shortages or industrial disruptions may adversely affect production schedules and operational efficiency.

Regulatory and Compliance Risks

The industry is subject to various laws and regulations relating to environmental protection, labour welfare, product quality, exports, taxation and corporate governance. Changes in government policies, trade regulations, customs duties or environmental norms may increase compliance costs and require operational adjustments.

11. Credit and Customer Concentration Risk

Delayed payments, customer defaults or concentration of revenue from a limited number of customers may affect working capital and cash flows. Companies are required to maintain prudent credit evaluation processes, diversify their customer base and monitor receivable cycles to mitigate such risks.

12. Rising Energy and Utility Costs

Manufacturing operations are energy intensive and dependent on continuous availability of electricity, fuel and other utilities. Increases in power tariffs, fuel prices or utility costs may adversely impact manufacturing costs and operating margins.

13. Import Competition

Indian manufacturers continue to face competition from low- cost imports, particularly from countries with lower manufacturing costs and larger production capacities. Aggressive pricing by imported products may exert pressure on domestic pricing and market share, especially in commodity product categories.

14. Customer Expectations on Quality and Delivery

Customers increasingly demand consistent product quality, shorter delivery timelines, customised solutions and competitive pricing. Failure to meet quality standards or delivery commitments may impact customer relationships, repeat business and market reputation.

15. Cybersecurity and Digital Risks

With increasing digitalisation of manufacturing, supply chain management and business operations, organisations face growing risks relating to cybersecurity breaches, ransomware attacks, data privacy and system failures. Robust information technology infrastructure and cybersecurity frameworks are becoming increasingly important for business continuity.

16. Climate Change and Natural Disasters

Extreme weather events, water scarcity, floods, heat waves and other climate- related disruptions may affect raw material availability, manufacturing operations and logistics. Increasing regulatory focus on climate- related disclosures also requires businesses to strengthen sustainability and risk management practices.

17. Geopolitical and Trade Policy Risks

Changes in international trade policies, sanctions, tariff structures, free trade agreements and geopolitical developments may impact export competitiveness and global supply chains. Businesses engaged in international markets must continuously monitor evolving trade dynamics and diversify export destinations to reduce dependency on specific regions.

STRENGTHS

1. Experienced promoters

The promoters have over 17 years of experience in the textile industry, providing strong industry knowledge, expertise, and established business relationships.

2. High-quality specialized products

The company has the capability to manufacture high- quality specialized products while maintaining consistent standards, supporting customer satisfaction and repeat business.

3. Wide product range

The company offers specialized products in various materials, sizes, and designs, enabling it to cater to diverse customer requirements and preferences.

4. Strong operational network

A well- established network of operations supports efficient procurement, manufacturing, and distribution, contributing to smooth business operations.

5. Strategic manufacturing location

The manufacturing unit is located in Surat, Gujarat, a major textile hub with excellent connectivity. This provides convenient access to suppliers, skilled manpower, transportation, and key markets.

WEAKNESSES

1. Dependence on suppliers

The company depends on external suppliers for essential raw materials, making it vulnerable to supply chain disruptions, delays, and price fluctuations. This may affect production and increase operational costs.

2. Fluctuating demand

Demand for certain specialized products varies due to seasonal factors and changing customer preferences. This can create challenges in production planning, inventory management, and resource utilization

3. Geographical market dependence

Heavy reliance on a specific geographical market limits the companys growth potential and increases exposure to regional economic changes. Expanding into new markets could help diversify revenue and reduce this risk.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

During the financial year ended 31 March 2026, the Company recorded a significant improvement in its product portfolio performance, with total revenue from products increasing to 1,891.98 Lakhs as against 1,456.20 Lakhs in the previous financial year, representing an overall growth of approximately

29.93

%

29.93% . The growth was primarily driven by increased demand for the Companys core textile accessory products, expansion of the customer base and improved production efficiencies.

Narrow Woven Fabrics

Narrow Woven Fabrics continued to be one of the Companys principal revenue contributors during the year. Revenue from this product category stood at 796.14 Lakhs in FY 2025- 26 as compared to 1,000.50 Lakhs in FY 2024- 25. Although the segment witnessed a decline in revenue, it continued to account for a substantial portion of the Companys overall product mix. The decline was primarily attributable to changes in product mix and increased focus on higher value- added products.

Zipper Sales

Revenue from Zipper Sales increased significantly to 777.78 Lakhs during FY 2025- 26 from 416.11 Lakhs in the previous year, registering an impressive growth of approximately

86.92

%

86.92% . The strong performance reflects higher market demand, expansion of the customer base and the Companys continued focus on value- added fastening solutions. The zipper segment emerged as one of the fastest- growing product categories during the year.

Elastic Products

Revenue from Elastic products increased sharply to 168.20 Lakhs during FY 2025- 26 as against 6.98 Lakhs in FY 2024- 25. This substantial increase indicates the successful expansion of the

Page 26

Companys product portfolio and growing acceptance of its elastic products in the apparel and textile accessories market. The segment is expected to contribute positively to future revenue growth.

Viscose Suit

Revenue from Viscose Suit products increased to 149.86 Lakhs during FY 2025- 26 from 32.61 Lakhs in the previous year, reflecting a growth of approximately

359.56

%

359.56% . The increase was driven by higher customer demand and improved market penetration, demonstrating the Companys ability to diversify its product offerings and capitalise on emerging market opportunities.

Overall Performance

The Companys product portfolio remained well diversified across multiple textile accessory categories during the year. While the Narrow Woven Fabrics segment continued to maintain a significant contribution to revenue, the substantial growth in Zipper Sales, Elastic products and Viscose Suit products reflects the Companys strategic emphasis on expanding its value- added product portfolio and responding to evolving customer requirements. The balanced product mix is expected to strengthen the Companys market position, reduce dependence on any single product category and support sustainable long- term growth.

OUTLOOK

The outlook for Indias textile accessories industry remains favourable, supported by increasing domestic demand, improving export opportunities and sustained government support for manufacturing. The implementation of PM MITRA Parks, PLI Scheme, National Technical Textiles Mission and various export promotion measures is expected to strengthen Indias competitiveness in the global textile value chain.

Growing demand for branded apparel, sportswear, technical textiles, sustainable products and premium fashion accessories is expected to drive consumption of zippers, laces and narrow woven fabrics. Increasing investments in automation, innovation and environmentally sustainable manufacturing practices are also expected to improve operational efficiencies and product quality.

However, the industry may continue to face challenges arising from raw material price volatility, geopolitical developments, freight costs and global demand fluctuations. Despite these challenges, the long- term growth prospects remain encouraging owing to Indias strong manufacturing ecosystem, expanding export markets and favourable demographic trends.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company recognizes that effective risk management and a robust internal control framework are essential for achieving its strategic and operational objectives. While risks inherent to the business cannot be eliminated entirely, the Company continuously endeavors to identify, assess, and mitigate such risks through appropriate policies, processes, and control mechanisms.

The Company has established an adequate system of internal controls commensurate with the nature, size, and complexity of its business operations. These controls are designed to safeguard the Companys assets, ensure the accuracy and reliability of financial and operational information, promote operational efficiency, ensure compliance with applicable laws and regulations, and facilitate the achievement of organizational objectives through the optimal utilization of resources.

To strengthen the effectiveness of its internal control framework, the Company has instituted an independent internal audit function. The Internal Auditor conducts periodic audits based on a risk- based internal audit plan, which is reviewed annually in consultation with the Audit Committee and the Statutory Auditors. The scope of internal audits includes an evaluation of the adequacy and effectiveness of internal controls, review of operational processes, assessment of risk management practices, and verification of compliance with applicable policies and regulatory requirements.

The observations and recommendations of the Internal Auditor are placed before the Audit Committee for review. The Audit Committee monitors the implementation of corrective actions, and significant findings are periodically reported to the Board of Directors for its review and guidance.

The Company has also established adequate internal financial controls over financial reporting, which are commensurate with the size and nature of its operations. During the financial year under review, these controls were tested and evaluated, and no material weakness or significant deficiency in the design or operating effectiveness of the Companys internal financial controls was observed.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company recognizes that its employees are its most valuable asset and believes that a motivated, skilled, and engaged workforce is fundamental to achieving sustainable growth. The Companys human resource philosophy is centred on fostering an inclusive, collaborative, and performance- driven work environment that encourages continuous learning, innovation, and professional development.

As an equal opportunity employer, the Company is committed to providing a workplace that promotes fairness, diversity, and mutual respect. The Company complies with all applicable labour and employment laws and ensures that its human resource practices are free from discrimination. Employment decisions are based solely on merit, qualifications, and business requirements, without regard to race, religion, caste, colour, gender, age, disability, marital status, ethnicity, language, sexual orientation, gender identity, or any other characteristic protected under applicable laws.

The Company continues to strengthen its human capital through structured talent acquisition, employee engagement initiatives, capability enhancement programmes, learning and development opportunities, and performance management systems. It also promotes a healthy work- life balance and a collaborative work culture to enhance employee productivity, innovation, and overall organizational effectiveness.

The Company believes that aligning individual performance with organizational objectives is essential for achieving long- term success. Accordingly, it has established a structured performance appraisal system that facilitates goal alignment, recognizes employee contributions, identifies development opportunities, and supports career progression. The Company remains committed to investing in the continuous development and well- being of its employees to build a competent and future- ready workforce.

As on March 31, 2025, the Company had 15 permanent employees on its rolls.

COMPANY PROFILE

Sihora Industries Limited (the Company or Sihora) is engaged in the manufacturing and sale of narrow woven fabrics, woven labels, lace, digitally printed narrow fabrics, tapes, zippers, elastics, technical textiles, and other value- added textile products catering to the fashion, apparel, packaging, and industrial sectors.

The Company was originally incorporated as Sihora Industries Private Limited under the provisions of the Companies Act, 2013, pursuant to a Certificate of Incorporation dated August 10, 2023, issued by the Registrar of Companies, Central Registration Centre. The Company was incorporated with the primary objective of acquiring and continuing the business operations of Sihora Narrow Fabrics, a proprietary concern owned by its Promoter, Mr. Gautam Vallabhbhai Sihora. Pursuant to the business transfer arrangement, the entire business undertaking of the proprietorship, including its assets and liabilities, was taken over by the Company with effect from October 17, 2023.

Subsequently, pursuant to a Special Resolution passed at the ExtraOrdinary General Meeting held on June 12, 2024, the Company was converted into a public limited company. Consequently, its name was changed from Sihora Industries Private Limited to Sihora Industries Limited, and a fresh Certificate of Incorporation reflecting the change in name was issued by the Registrar of Companies, Ahmedabad, on July 17, 2024. The Corporate Identification Number (CIN) of the Company is L13999GJ2023PLC143747.

As part of its long- term growth strategy and to strengthen its capital base, the Company undertook an Initial Public Offering (IPO) of its equity shares. Pursuant to its application, the Company received the In- Principle Approval from BSE Limited on September 22, 2025, for listing on the SME Platform. Following the completion of all applicable regulatory and procedural requirements, the Companys equity shares were successfully listed on the BSE SME Platform on October 17, 2025.

The Company is promoted by Mr. Gautam Vallabhbhai Sihora and Mrs. Priyal Gautakummar Sihora, who are also the original subscribers to the Memorandum of Association. Together, the Promoters possess more than a decade of experience in the textile industry, providing strategic leadership, operational expertise, and extensive industry knowledge that have contributed to the Companys growth and development.

Headquartered in Surat, Gujarat, the Company manufactures a diverse range of textile products, including narrow woven fabrics, FINANCIAL PERFORMANCE AND HIGHLIGHTS

woven labels, fancy lace, zippers, elastics, tapes, and other textile accessories. These products are primarily supplied to customers across the domestic market and find applications in the fashion and apparel industry, packaging solutions, and various industrial segments.

The Companys manufacturing facility is located at Plot No. 34/D/1/2/3, Laxminarayan BRC Compound, Udhna, Mangrol, Surat - 394210, Gujarat, India. The facility is equipped with modern manufacturing machinery and technology that enable efficient production while maintaining stringent quality standards. Comprehensive quality control procedures are implemented throughout the manufacturing process to ensure consistency, durability, reliability, and customer satisfaction.

The Company places significant emphasis on understanding customer requirements and delivering customized textile solutions. Product development is driven by various factors, including customer preferences, end- use applications, quality expectations, climatic conditions, and commercial considerations. The careful selection of raw materials forms an integral part of the manufacturing process, as it directly influences the performance, durability, comfort, and overall quality of the finished products. Through its customer- centric approach, manufacturing capabilities, and commitment to quality, the Company strives to strengthen its position as a reliable supplier of specialized textile products across diverse industry segments.

Financial Highlights

Particulars F.Y. 2025-26 F.Y. 2024-25

Revenue from Operations 1,891.98 1,456.20

Other Income 61.28 50.26

Total Income 1,953.26 1,506.46

Less: Total Expenses before Depreciation, Finance Cost and Tax 1,694.42 1,126.99

Profit before Depreciation, Finance Cost and Tax 258.84 379.47

Less: Depreciation 97.50 42.24

Less: Finance Cost 31.36 86.99

Profit Before Extraordinary & Exceptional Items and Tax 129.98 250.24

Less: Prior Period Item 0.00 0.00

Profit before tax 129.98 250.24

Less: Current Tax 39.18 66.61

Less: Deferred tax Liability (Asset) (5.70) (3.16)

Less: Excess/Short Provision Written back/off 0.00 0.00

Profit after Tax 96.50 186.79

Financial Performance

During the financial year 2025- 26, the Companys Revenue from Operations increased by

29.92

%

29.92% rising from 1,456.20 lakhs in the previous financial year to 1,891.98 lakhs, reflecting healthy growth in its core business operations. Total Income also increased by

29.67

%

29.67% to 1,953.26 lakhs, supported by higher operating revenue and a modest increase in other income.

Despite the strong growth in revenue, the Companys profitability was impacted during the year. Profit Before Tax (PBT) stood at 129.98 lakhs for FY 2025- 26 as compared to 250.24 lakhs in FY 2024- 25. The decline in profitability was primarily attributable to a significant increase in operating expenses, employee benefit costs, finance costs, and depreciation arising from business expansion and capacity enhancement initiatives undertaken during the year.

Overall, while the Company delivered robust top- line growth, the increase in operating costs moderated its earnings during the year. The management remains focused on improving operational efficiencies, optimizing cost structures, and enhancing capacity utilization to strengthen margins and improve profitability.

The Board of Directors continues to review and refine the Companys business strategies and operational policies with the objective of maximizing manufacturing capacity utilization and improving overall operational performance. The Board remains confident that these initiatives, together with continued demand for the Companys products, will support sustained growth in revenue from operations and contribute to improved profitability in the coming years.

RATIO ANALYSIS

Particulars Numerator/Denominator 31 March 2026 31 March 2025 Change in % Reason

Current Ratio Current Assets 4.09 1.85 121.08% The improvement is due to higher current assets and/or lower current liabilities, strengthening the companys short-term liquidity.

Debt-Equity Ratio Current Liabilities This has resulted from debt repayment, debt-to-equity conversion, or an increase in shareholders funds through retained profits or capital infusion.

Debt Service Coverage Ratio Earnings available for Debt Service 0.74 -- -- This is due to lower EBITDA, higher interest costs, or increased principal repayments, indicating that earnings are insufficient to fully cover debt-servicing obligations.

Return on Equity Ratio Profit after Tax 9.06% 42.81% -78.97% The probable reasons include lower profit after tax and/or higher shareholders equity due to fresh capital infusion or retained earnings.

Inventory turnover ratio Cost of Goods Sold 2.10 3.21 -34.62% Possible reasons include higher inventory accumulation, slower sales, lower production/utilisation, product-mix changes, or reduced demand.

Trade receivables turnover ratio Average Inventories 8.25 9.54 -13.50% This is due to extended customer credit periods, delayed payments, higher receivables, or lower turnover.

Trade payables turnover ratio Total Purchases 13.24 7.19 83.89% This is due to lower outstanding creditors, shorter supplier credit periods, faster payments, or reduced purchases relative to average payables.

Net capital turnover ratio Total Turnover 1.91 4.35 -56.09% The decline indicates inefficient deployment of working capital, with higher net working capital relative to turnover and possible excess funds tied up in current assets.

Net profit ratio Net Profit 5.10% 12.83% -60.49% Possible reasons include lower gross margins, higher operating/finance costs, depreciation, employee costs, overheads, adverse product mix, lower selling prices, or exceptional expenses.

Return on Capital employed Earnings before interest and taxes 9.23% 28.14% -67.31% This is due to lower EBIT, higher capital employed, asset/capacity under-utilisation, or reduced operating margins.

Return on Net Worth

The Return on Net Worth (RoNW) of the Company decreased from 40.22% in FY 2024- 25 to 9.06% in FY 2025- 26. The decline was mainly due to the substantial increase in the Companys Net Worth following the Initial Public Offering (IPO), along with a decrease in profitability during the year.

The Companys Net Worth increased from 525.55 lakhs to 1,604.41 lakhs, representing an increase of approximately 205.29%, primarily due to the increase in equity share capital and Securities Premium arising from the IPO. On the other hand, Profit After Tax decreased from 186.79 lakhs to 96.50 lakhs, resulting in lower returns generated on the significantly enlarged shareholders funds.

Accordingly, the reduction in RoNW is primarily attributable to the significant expansion of the Companys equity base pursuant to the IPO, coupled with lower profitability during the year, rather than a decline in the Companys Net Worth.

CAUTIONARY NOTE

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the Companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.