Suditi Industries Ltd Management Discussions

The Management Discussion and Analysis Report has been prepared in accordance with the provisions of Regulation 34(2)(e) of Listing Regulations, read with Schedule V(B) thereto, with a view to provide an analysis of the business and Financial Statements of the Company for the financial year and should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Integrated Report.

The objective of this report is to convey the Managements perspective and analysis of the industry environment, global and domestic developments, business opportunities and challenges, operating performance and future outlook of the Company. The statements contained herein describing the Companys objectives, expectations, estimates, outlook and other forward-looking information are subject to various risks and uncertainties and should not be construed as a guarantee of future performance.

1. INDUSTRY STRUCTURE & DEVELOPMENT:

The textile and apparel industry remains one of the most significant segments of the global consumer and manufacturing economy, with extensive linkages across agriculture, manufacturing, retail, logistics and allied services. The industry is characterised by globalised supply chains, evolving consumer preferences, increasing product differentiation and growing emphasis on sustainability, traceability, quality and speed-to-market.

India continues to occupy an important position in the global textile and apparel ecosystem, supported by its large domestic market, diversified textile manufacturing base, availability of raw materials, established manufacturing capabilities, skilled workforce and presence across the textile value chain.

During FY 2025-26, the Indian textile and apparel sector continued to demonstrate resilience despite an evolving global trade environment. According to the Ministry of Textiles, the Indian textile industry expanded to approximately US$190 billion during FY 2025-26, with the Government targeting a sector size of approximately US$350 billion by 2030.

The sector is undergoing a gradual transition from a predominantly volume-driven manufacturing model towards higher-value, branded, differentiated and technology-enabled products. Increasing consumer awareness, organised retail, e-commerce, shorter fashion cycles and demand for improved product quality are encouraging manufacturers to focus on design, innovation, product development, operational efficiency and responsiveness to market trends.

2. GLOBAL TEXTILE AND APPAREL INDUSTRY

The global textile and apparel industry is undergoing a period of structural change. The traditional concentration of sourcing and manufacturing is increasingly being complemented by a more diversified and resilient supply-chain model. Geopolitical developments, freight and logistics considerations, changing tariff structures, trade agreements, sustainability requirements and the need for greater supply-chain visibility are influencing sourcing decisions of international brands and retailers.

The global operating environment during FY 2025-26 remained characterised by uneven economic growth, cautious consumer spending in certain developed markets, elevated trade-policy uncertainty and changes in tariff regimes. The World Trade Organization has highlighted the continuing influence of tariffs and trade-policy uncertainty on global merchandise trade, while its 2026 outlook indicates that global trade remains resilient but subject to significant geopolitical and policy-related risks.

For the textile and apparel industry, changes in tariff structures are particularly significant because apparel sourcing is highly price-sensitive and international brands continuously evaluate the relative competitiveness of manufacturing locations.

Consequently, global buyers are increasingly adopting a "China+1" and multi-country sourcing approach, creating opportunities for countries with established textile ecosystems, competitive manufacturing capabilities, reliable delivery and the ability to meet international quality and compliance standards.

India is well positioned to participate in this transition. Its integrated textile ecosystem, availability of cotton and other fibres, manufacturing capabilities, large domestic market and growing network of trade agreements provide a strong foundation for expanding its role in global textile and apparel supply chains.

3. GLOBAL TRADE, TARIFFS AND TRADE AGREEMENTS

Trade policy has emerged as one of the important factors influencing the global apparel industry. Changes in import duties, reciprocal tariffs, preferential market access and country-specific trade measures can directly influence the landed cost and competitiveness of apparel sourced from different manufacturing destinations.

During FY 2025-26, developments in the United States tariff regime received significant attention from the global textile and apparel industry. The Government of India has stated that the additional 25% tariff imposed by the United States on certain Indian exports in connection with Russian oil imports was subsequently removed in February 2026, while the reciprocal tariffs were affected by the United States Supreme Court judgment of February 2026. Subsequently, the United States issued executive measures providing for a 10% tariff applicable across countries. The Government of India has continued to engage with the United States on the implications of these developments.

Such developments highlight the importance of geographical diversification, prudent customer and market selection, competitive pricing, supply-chain flexibility and continuous monitoring of international trade policies.

At the same time, Indias expanding network of Free Trade Agreements ("FTAs") is creating opportunities for improved market access. The India-New Zealand trade agreement, for instance, provides zero-duty access for Indian exports including textiles and apparel, while recent India-EU trade developments are expected to materially improve market access for Indian textile and clothing products.

The evolving trade landscape therefore presents both opportunities and challenges. While tariff changes may create short-term uncertainty and affect landed costs, preferential trade arrangements can enhance Indias competitiveness and support greater integration with international markets.

4. INDIAS EXPORT PERFORMANCE

Indias textile and apparel exports continued to demonstrate resilience during FY 2025-26. Exports of textiles and apparel, including handicrafts, stood at approximately Rs.3,25,339 crore during FY 2025-26, registering growth of 1.8% over the previous year. The sector recorded export growth across more than 100 destinations, demonstrating the breadth and resilience of Indias global market presence.

Ready-Made Garments ("RMG") remained the largest contributor among the major textile export categories, with exports of approximately Rs.1,39,350 crore during FY 2025-26. Cotton textiles contributed approximately Rs.1,02,427 crore, while Man-Made Fibre ("MMF") textiles contributed approximately Rs.46,254 crore.

Indias position in the global textile and apparel market provides a significant opportunity for Indian manufacturers to expand their international presence, particularly as global brands seek diversified and reliable sourcing partners.

The Government has articulated an ambitious objective of increasing Indias textile and apparel exports towards approximately US$100 billion by 2030. Achieving this objective would require continued investments in scale, technology, product development, value addition, logistics, sustainability and global marketing.

5. DOMESTIC TEXTILE AND APPAREL MARKET

Indias domestic market remains a significant structural strength for the textile and apparel industry. Rising disposable incomes, urbanisation, increasing brand awareness, changing lifestyles, growth in organised retail and rapid expansion of e-commerce are contributing to the formalisation and expansion of apparel consumption.

Consumer preferences are also evolving from basic functionality towards greater emphasis on design, comfort, quality, fit, fashion, convenience and brand experience. The increasing penetration of organised retail and digital commerce is enabling brands to reach consumers across metropolitan as well as Tier-11 and Tier-III cities.

The domestic market therefore provides Indian apparel companies with an opportunity to build scale while reducing excessive dependence on any single international geography.

6. CHANGING CONSUMER AND INDUSTRY TRENDS

The apparel industry is increasingly influenced by rapidly changing consumer preferences and shorter product cycles. Consumers are seeking greater variety, improved quality, contemporary designs, comfort, functionality and competitive pricing.

At the same time, brands and retailers are increasingly seeking:

• shorter lead times and faster replenishment;

• flexible and smaller production runs;

• consistent quality and product reliability;

• greater design and product-development capabilities;

• supply-chain transparency and traceability;

• responsible sourcing and compliance;

• environmentally responsible manufacturing; and

• greater use of technology and data in demand forecasting and inventory management.

Digitalisation is also transforming the industry through e-commerce, digital product development, data- driven merchandising, automated manufacturing, digital printing and technology-enabled supply-chain management.

These developments favour manufacturers that are able to combine quality, flexibility, speed, cost efficiency and market responsiveness.

7. SUSTAINABILITY AND RESPONSIBLE MANUFACTURING

Sustainability is becoming an increasingly important consideration in global textile and apparel sourcing. International brands, retailers, regulators and consumers are placing greater emphasis on responsible sourcing, environmental impact, resource efficiency, traceability, waste reduction and ethical supply- chain practices.

Accordingly, sustainability is progressively moving from being a compliance consideration to becoming an important element of competitiveness and market access.

Indian textile manufacturers are therefore required to continuously adapt to evolving environmental, social and governance expectations, improve resource efficiency and strengthen processes relating to quality, compliance and responsible manufacturing.

8. GOVERNMENT INITIATIVES AND POLICY SUPPORT

The Government of India continues to undertake several initiatives aimed at strengthening the competitiveness and scale of the textile and apparel sector.

Key initiatives include the Production Linked Incentive ("PLI") Scheme for Textiles, PM Mega Integrated Textile Regions and Apparel ("PM MITRA") Parks, National Technical Textiles Mission ("NTTM"), SAMARTH - Scheme for Capacity Building in Textiles Sector, and export-support measures including the Rebate of State and Central Taxes and Levies ("RoSCTL") and Remission of Duties and Taxes on Exported Products ("RoDTEP").

The Government has also been focusing on strengthening the entire textile value chain, promoting value addition, encouraging technical textiles, improving productivity, supporting exports and facilitating investments in modern manufacturing infrastructure.

The policy direction is increasingly focused on making India a globally competitive textile and apparel manufacturing and export destination.

9. OPPORTUNITIES

The evolving global and domestic environment presents several opportunities for the Indian textile and apparel industry.

Global Supply-Chain Diversification

The increasing preference among international brands for diversified sourcing provides an opportunity for India to increase its share in global apparel supply chains.

Preferential Market Access

FTAs and other trade arrangements can improve Indias tariff competitiveness and facilitate access to international markets. The reduction or elimination of duties in key markets can provide Indian exporters with an opportunity to compete more effectively with alternative sourcing destinations.

Domestic Consumption

Indias large and growing consumer base, increasing disposable income, urbanisation, organised retail and e-commerce provide a substantial long-term opportunity for apparel companies.

Value Addition and Product Differentiation

Growth opportunities are increasingly shifting towards value-added products, specialised categories, differentiated designs, technical capabilities and branded apparel rather than purely volume-driven manufacturing.

Technology and Digitalisation

Technology-led manufacturing, digital product development, automation, data analytics and digitally enabled retail can improve productivity, reduce lead times and enhance customer responsiveness.

Sustainability

The growing global focus on sustainable sourcing presents an opportunity for Indian manufacturers that can demonstrate responsible production, traceability, resource efficiency and compliance with evolving international standards.

10. RISKS, CONCERNS AND THREATS

Despite the favourable long-term outlook, the textile and apparel industry remains exposed to several external and operational risks.

Global Economic Conditions

Weak consumer demand, inflationary pressures, slower economic growth or changes in discretionary spending in major markets can adversely affect apparel demand.

Tariff and Trade Policy Risk

Changes in tariffs, import duties, trade restrictions, sanctions, preferential access and other trade-policy measures can affect the landed cost and competitiveness of Indian exports. The rapidly evolving global tariff environment therefore requires continuous monitoring and appropriate market and customer diversification.

Raw Material Price Volatility

Fluctuations in the prices of cotton, yarn, synthetic fibres and other inputs may affect production costs and operating margins.

Foreign Exchange Risk

Companies with international business exposure may be affected by fluctuations in foreign exchange rates, particularly where revenues and costs are denominated in different currencies.

Intense Global Competition

India competes with established textile and apparel manufacturing countries on parameters including cost, quality, scale, lead time, infrastructure, tariff access and product capabilities.

Supply-Chain Disruptions

Geopolitical developments, disruptions in shipping routes, freight-cost volatility, energy prices and logistics constraints can affect delivery schedules and overall supply-chain costs.

Regulatory and Sustainability Requirements

Increasing environmental, labour, product-safety, traceability and sustainability requirements in international markets may increase compliance costs and require continuing investments in systems, processes and technology.

Changing Consumer Preferences

The fast-changing nature of fashion and consumer preferences creates risks relating to demand forecasting, inventory management, product obsolescence and the ability to respond rapidly to market trends.

11. FUTURE OUTLOOK AND PROSPECTS

The medium- to long-term outlook for the Indian textile and apparel industry remains constructive, supported by Indias large domestic consumption base, established textile ecosystem, skilled workforce, manufacturing capabilities and increasing integration with global supply chains.

The Governments vision of expanding the Indian textile industry towards approximately US$350 billion by 2030, together with the objective of increasing textile and apparel exports towards US$100 billion, reflects the strategic importance accorded to the sector.

The future growth trajectory of the industry is expected to be shaped by the following key factors:

• increasing domestic apparel consumption;

• continued expansion of organised retail and e-commerce;

• diversification of global sourcing away from concentrated manufacturing locations;

• improved market access through FTAs and trade partnerships;

• increasing demand for value-added and differentiated products;

• adoption of technology and automation;

• stronger focus on sustainability and traceability;

• development of technical and specialised textiles; and

• continued Government support for investments, exports, infrastructure and skill development.

At the same time, the industry is expected to remain sensitive to global economic conditions, international trade policies, tariffs, exchange-rate movements, raw material prices and geopolitical developments.

The ability to remain competitive will therefore depend increasingly on operational efficiency, product innovation, quality, speed-to-market, supply-chain resilience, prudent cost management, market diversification and the ability to respond proactively to changing consumer and regulatory requirements.

12. OUTLOOK FOR THE COMPANY

Against this evolving industry backdrop, the Company remains focused on strengthening its operating capabilities, improving efficiency, responding to changing consumer requirements and leveraging opportunities arising from the growth of the domestic and international apparel markets.

The Companys focus is expected to remain on strengthening its product and market capabilities, improving operational efficiency, maintaining quality standards, developing customer relationships and responding appropriately to changing market conditions.

The Company will continue to evaluate opportunities arising from the growth of organised retail, digital commerce, changing consumer preferences and the evolving global sourcing landscape. At the same time, it will remain mindful of external risks relating to global demand, raw material costs, foreign exchange, tariffs, trade policies and competitive intensity.

The Companys long-term approach will remain centred on sustainable growth, prudent financial management, operational discipline and strengthening its ability to create enduring value for its stakeholders.

The management remains cautiously optimistic about the medium- to long-term prospects of the Indian textile and apparel sector, while recognising that the near-term operating environment may remain dynamic and influenced by global economic, geopolitical and trade developments.

Financial Performance Overview

The discussions in this section relate to the consolidated, Rupee-denominated financial results pertaining to the year that ended March 31, 2026. The financial statements of Company and its subsidiaries are prepared in accordance with the Indian Accounting Standards (referred to as Ind AS) prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the consolidated financial statements

The consolidated financial performance of the Company for FY 2025-26, as compared with FY 202425, is summarised below:

	FY 2025-26	FY 2024-25
Particulars	Amount	% of Revenue	% Growth	Amount	% of Revenue
Revenue from Operations	12,130.70	100.0%	27.1%	9,547.68	100.0%
Earnings Before Interest and Tax (EBIT)	1,161.95	9.6%	350.4%	258.22	2.7%
Profit After Tax attributable to owners of the Company before	1,052.90	8.7%	235.1%	314.18	3.3%
Earnings Per Share ( Rs.)	2.11	-	80.3%	1.17	-

Management Analysis

During FY 2025-26, the Company recorded consolidated Revenue from Operations of Rs.12,131.70 lakh as against Rs.9,547.68 lakh in FY 2024-25, representing a growth of 27.1%. The growth reflects the Companys continued expansion of its business operations and strengthening of its revenue base. The performance was achieved against a dynamic operating environment characterised by evolving consumer preferences, competitive intensity and changes in the domestic and global apparel and textile landscape.

The improvement in profitability was particularly notable during the year. Consolidated EBIT increased, resulting in a significant improvement in the EBIT margin from 2.7% to 9.6%. Consequently, basic Earnings Per Share increased from Rs.1.17/- to Rs.2.11/-. The substantial improvement in operating profitability, together with the growth in revenue, indicates improved operating leverage and stronger earnings generation during the year.

The Company remains focused on building upon this improvement through disciplined cost management, enhancement of operational efficiencies, strengthening of its product and market portfolio and continued focus on value creation. Going forward, management intends to leverage opportunities arising from the expanding domestic apparel market, changing consumer preferences, organised retail and e- commerce, as well as the evolving global sourcing landscape, while maintaining a prudent approach towards costs, working capital, market risks and other external factors. The Company will continue to focus on sustainable and profitable growth while strengthening its competitive position in the textile and apparel industry.

Key Ratios:

Particulars	2025-26 (Standalone)	2024-25 (Standalone)	2025-26 (Consolidated)	2024-25 (Consolidated)
Debtors Turnover	1.79	2.22	2.44	3.13
Inventory Turnover	22.19	25.61	16.46	11.14
Interest coverage Ratio	18.06	4.37	16.27	3.94
Debt Equity Ratio	0.08	0.13	0.11	0.44
Operating profit margin (%)	9.36%	1.73%	9.39%	2.59%
Net Profit margin (%)	0.09%	0.03%	0.09%	0.03%
Return on net worth (%)	0.13%	0.09%	0.21%	1.40%
Current Ratio	2.69	1.49	2.21	1.00

Internal Controls & Systems:

The Company has in place robust Internal Control system to maximize the effectiveness and efficiency by including activities that are tailored to the nature, size and complexity of the entity. The Company follows proper hierarchy for reporting of routine activities. The company has set up adequate internal control and systems to ensure that all the functions and procedures followed are effective and any major revenue leakage or wastage of resources are timely checked and controlled. The Company implements and manages efficient internal control systems to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, by maintaining proper records and reports in a timely manner. There is regular evaluation of all the Internal Controls Systems and procedures, and it is also reviewed by Internal Auditors through checking, inspection and verification. Apart from this the company has also adequate internal financial control systems that include a risk based framework to ensure orderly and efficient conduct of its business, safeguarding assets and accuracy and completeness of the accounting records, and assurance on reliable financial information.

Internal Audit

Internal Audit at the Company is an independent and objective activity designed to provide assurance to senior management and add value by identifying opportunities to deliver business benefits and improvements to internal controls. It helps us accomplish our objectives by bringing a systematic and disciplined approach to evaluating and improving the effectiveness of processes, controls, and governance. The internal audit function carries out a focused and risk-based annual internal audit plan approved by the Audit Committee.

Human Resources

Beyond Balance Sheet, Companys single biggest asset is its Human Resources. The Company is of firm belief that the human resources are the driving force towards progress and success. The Company continued its policy of attracting and recruiting the best available talents so that it can face business challenges ahead. The industrial relationship continues to be cordial during the year. The total permanent employees strength of the Company was 199 as on March 31, 2026.

Though the statement and views expressed in the above-said report are on the basis of certain assumptions and expectations of future events, actual results may differ from whatever is stated in the annual report

Cautionary Statement:

The statements made in this Management Discussion and Analysis that pertain to the Companys objectives, plans, estimates, and expectations may be considered forward-looking statements under applicable laws and regulations. These statements, which discuss future performance and outcomes, are based on Managements current plans and assumptions using available information. However, these statements are subject to various risks, uncertainties, and potential inaccuracies in assumptions. Such forward-looking statements can be identified by the use of words like anticipate, estimate, expects, projects, intends,plans, believes, aims, drive towards or similar expressions. While we have exercised prudence in our assumptions, we cannot assure that these forward-looking statements will materialise. We undertake no obligation to publicly update any such statement, whether due to new information, future events, or other circumstances.