Sueryaa Knitwear Ltd Management Discussions

We submit herewith the "Management Discussion and Analysis Report" on the business of the Company as applicable to the extent relevant.

GLOBAL ECONOMY OVERVIEW:

The global economy entered 2025 with cautious stability. After enduring a prolonged period of unprecedented shocks ranging from the Covid pandemic to global geopolitical instability, green shoots of stabilization began emerging in 2024. Inflation moderated from multi-decadal highs, while labour markets showed signs of normalization, with unemployment and vacancy rates returning to pre-pandemic levels. Global growth has hovered around 3% in recent years.

However, the international trade landscape has once again been thrown into a frenzy with clouds of uncertainty threatening to destabilise the global economy, which was looking to get back on track. A series of tariff increases initiated by the United States was proposed to be countered in equal measure by most of its major trading partners. Although the tariff war has been paused for the time being, the sword still hangs over the neck of the global economy. If implemented, the effective global tariff rates will rise to their highest levels in a century. This represents a major spanner in the works of the global economy, considerably dragging down the growth outlook at a time when international trade dynamics were already unstable and looking for some fresh impetus.

The IMF has projected global GDP growth to decelerate to 2.8% in 2025 and marginally recover to 3.0% in 2026. That is significantly below the historical average growth of ~3.7% seen over 2000-2019. Advanced economies are expected to grow at just 1.4%, with the U.S. slowing to 1.8% and the Euro Area to 0.8%, amid increased policy uncertainty and weaker demand. Growth in the emerging markets and developing economies are expected to slow to 3.7% in 2025 and 3.9% in 2026.

INDIAN ECONOMIC OVERVIEW

India remains a standout performer on the international stage and is expected to continue leading global growth. Despite a slight downward revision from its earlier forecast in January 2025 to factor in heightened global trade tensions and uncertainty, the IMF has projected India to remain the fastest-growing major economy over the next two years, with Indias GDP expected to grow at 6.2% in 2025 and 6.3% in 2026.

The bright outlook stems from Indias strong macroeconomic fundamentals, resilient domestic consumption, and its ability to maintain a steady trajectory while navigating a complex global landscape. IMFs reaffirmation of Indias resilience and potential underscores its expanding role as a global growth engine.

Retail inflation in India eased to a 6-year low of 4.6% in 2024-25. It eased further to 3.16% in April 2025. This highlights the effectiveness of RBIs monetary policy in successfully balancing economic expansion and price stability. With inflation under control, RBI has been stepping on the pedal to support growth with two back-to-back rate cuts in February and April 2025.

The HSBC Manufacturing PMI hit a 10-month high of 58.2 in April 2025, inching up slightly from 58.1 in March 2025. The Manufacturing PMI has remained above the 50-mark since July 2021, indicating sustained growth in the manufacturing sector in the country. With an approximately 10% Y-o-Y increase in its budget for 2025-26, the government has allocated ? 11.2 Lakh Crores for capital expenditure, underlined its continuing thrust on investment-led growth in India. The outlook for the Indian economy continues to be positive, driven by macroeconomic stability, pro-growth monetary policy environment, and resilient domestic demand.

Outlook

The Indian economy is expected to continue its upward trend and become the third-largest economy by 2027. According to the Organisation for Economic Co-operation and Development (OECD), the GDP grew by 6.6% in FY 2024-25. Inflation is expected to further fall and this will support the increased level of consumption of goods and services and contribute to increased activity in the economy.

With the support of various industry-promoting programmes like the Production-Linked Incentive (PLI) scheme and the governments Make in India initiative, the manufacturing sector can potentially expand into a USD 1 trillion industry by 2025-2026. This strategic move is expected to help the growth of the manufacturing sector and thereby contribute to economic growth in the coming years.

INDUSTRY OVERVIEW

TEXTILE

GLOBAL TEXTILE MARKET

The textile market size has grown strongly in recent years. It will grow from $640.43 billion in 2024 to $696.16 billion in 2025 at a compound annual growth rate (CAGR) of 8.7%. The growth in the historic period can be attributed to growth in world population, increased demand for man-made fibers, government initiatives for the textile industry, strong economic growth in emerging markets and a ban on plastic usage.

The textile market size is expected to see strong growth in the next few years. It will grow to $915.96 billion in 2029 at a compound annual growth rate (CAGR) of 7.1%. The growth in the forecast period can be attributed to global population growth and urbanization, a rapid growth in ecommerce, rising spend on leisure, increasing retail penetration, increasing internet penetration and smartphone usage and growing preference for contactless delivery solutions. Major trends in the forecast period include focus on adopting digital textile printing inks, focus on use of non-woven fabrics, focus on using organic fibers, focus on sustainable fibers, focus on using blockchain in the manufacturing processes, focus on implementing digital platforms in textile supply chain management, focus on collaborating with technology companies to design and develop smart fabrics, focus on adopting robotics and automation, focus on investing in artificial intelligence and focus on partnerships and collaborations to develop innovative products.

INDIAS TEXTILE MARKET

India has set an ambitious target to elevate its textile and apparel (T&A) exports from $34.8 billion in 2023-24 to an eye-popping $100 billion by 2030. This raises a critical question - is this lofty ambition grounded in reality or is it just a daydream? If we look at the long-term trends, Indias T&A exports have grown steadily from $11.5 billion in FY2001 to $34.8 billion in FY24, accounting for only a 4 per cent share in global exports of $774.4 billion. At this pace, achieving the $100 billion target by 2030 seems a tall order unless dramatic, game-changing reforms are introduced.

Delving deeper into the numbers, the apparel segment (HSN codes 61 and 62) within overall T&A exports comprises about 42 per cent. It rose from $5.5 billion in FY2001 to $14.5 billion in FY24. Its share in global apparel exports has remained stubbornly around 3 per cent over this entire period. Meanwhile, competitors like Bangladesh and Vietnam have surged ahead. Bangladeshs global share has grown from 2.2 per cent to 9.6 per cent, while Vietnams share jumped from 1 per cent to 5.8 per cent between 2000 and 2023 (see infographics). A significant portion of this shift occurred post-2010 when Chinas global market share slipped from 34.8 per cent to 29.8 per cent, partly due to its trade war with the US. So, what is preventing India from seizing this opportunity to expand its apparel exports and capture the market space left behind by China? India should not only focus on apparel exports, but the exports of the entire T&A sector if it is to achieve its target of $100 billion . For this, let us dig into the challenges that lie ahead in the textile value chain - from farm to foreign.

OPPORTUNITIES, CHALLENGES AND OUTLOOK

OPPORTUNITIES

• Bharat Tex 2024

- Bharat Tex 2024 is an excellent platform to highlight Indias exceptional capabilities in the textile industry.

- Thread of Bharat Tex connects the glorious history of Indian tradition with todays talent; technology with traditions; and is a thread to bring together style, sustainability, scale and skill.

- Focussing on tradition, technology, talent and training.

- We are working in a very wide ambit to further increase the contribution of Textile Sector in building a developed India.

- Textiles and Khadi have empowered women of India.

- Today technology and modernization can co-exist with uniqueness and authenticity.

- Kasturi Cotton is going to be a big step towards creating Indias own identity.

- In PM-MITRA parks, Government strives to establish the entire value chain ecosystem in a single place where modern infrastructure with plug and play facilities are made available.

- Today a peoples movement is going on in the country for Vocal for Local and Local to Global

• Helping SMEs in the textile sector by providing them with modern machines and other allied infrastructure.

• Growing Population and Rising Disposable Income

Indias textile market is primarily driven by its large and growing population, which creates a substantial demand for clothing and textiles. With a population exceeding 1.3 billion, India presents a vast consumer base for the textile industry. Moreover, the rising disposable income levels among the middle class and urban population further fuel this demand.

According to the Ministry of Statistics and Programme Implementation, Indias per capita income increased to USD 1615.55 in FY 2020-21, reflecting a steady rise in purchasing power. This growing purchasing power translates into increased expenditure on clothing and textiles, thus driving the market forward.

• Government Initiatives and Policies

The Indian governments proactive initiatives and policies play a crucial role in driving growth in the textile industry. Programs such as the Make in India campaign and the National Textile Policy aim to promote domestic manufacturing, boost exports, and attract investments into the sector.

• Sustainability and Eco-Friendly Textiles

Increasing awareness regarding environmental sustainability presents a significant opportunity for the Indian textile industry. Consumers are becoming more conscious of the environmental impact of textile production and are demanding eco-friendly and sustainable products.

The adoption of organic cotton, recycled materials, and eco-friendly manufacturing processes can help Indian textile manufacturers tap into this growing market segment. According to the Cotton Corporation of India, the demand for organic cotton in India has been increasing by 20-25% annually, indicating a promising opportunity for sustainable textiles.

• Digital Transformation and E-Commerce

The rapid growth of e-commerce platforms presents new avenues for market expansion in the Indian textile industry. With the increasing penetration of smartphones and internet connectivity, online retailing has become increasingly popular among Indian consumers. Textile companies can leverage digital channels to reach a wider audience, improve customer engagement, and enhance the overall shopping experience.

According to the Ministry of Electronics and Information Technology, Indias digital economy is expected to reach USD 1 trillion by 2025, offering immense opportunities for textile businesses to capitalize on digital transformation and e-commerce trends.

THREATS

Based on review of the textile market situation and level of rivalry present in the domestic market, following threats might be present in the market, which can hinder growth of the revenue of the Company:

• Infrastructure Challenges

Despite significant progress, Indias textile industry still faces infrastructure challenges that hinder its growth potential. Inadequate transportation networks, outdated manufacturing facilities, and insufficient power supply infrastructure contribute to operational inefficiencies and higher production costs.

According to the Confederation of Indian Textile Industry (CITI), infrastructure bottlenecks increase production costs by up to 15-20% in some cases, making Indian textiles less competitive in the global market.

• Fragmented Industry Structure

The Indian textile industry is highly fragmented, comprising numerous small-scale and unorganized players alongside larger corporations. This fragmented structure often leads to inefficiencies in production, distribution, and marketing. Small-scale producers face challenges such as limited access to finance, outdated technology, and lack of economies of scale.

Additionally, the presence of a large informal sector makes regulation and quality control difficult, impacting the overall reputation of Indian textiles in international markets.

• Intense competition between established brands and private label brands.

• Low cost substitute products from other countries

• Significant presence of small suppliers has reduced the bargaining power.

• Major clothing brands have better bargaining power over textile manufacturers, as the product differentiation is low and numbers of players are high and fragmented.

DISSCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable accounting standards issued by the Institute of Chartered Accountants of India. The details of the financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Accounts and other financial statements forming part of this annual report.

INTERNAL FINANCIAL CONTROL SYSTEM

Given the magnitude and nature of its business, the Company has maintained sound and commercial practice with an effective internal control system. The system ensures that all transactions are authorized, recorded and reported correctly to safeguard the assets of the Company and protect them from any loss due to unauthorized use or disposition. The adequate internal information system is in place to ensure proper information flow for the decision- making process. The Company also has well-established processes and clearly defined roles and responsibilities for people at various levels. The control mechanism also involves well documented policies, authorization guidelines commensurate with the level of responsibility and standard operating procedures specific to the respective businesses, adherence to which is strictly ensured. Internal audit is carried out frequently to create awareness and to take corrective actions on the respective units or areas, which need rectification. These reports are then reviewed by the "Management Team" and the "Audit Committee" for follow-up action.

HUMAN RESOURCE DEVELOPMENT

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.

Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

DISCLOSURE OF ACCOUNTING TREATMENT

While preparation of financial statements, a relevant Accounting Standard treatment has been followed.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.

	On behalf of the Board of Directors
	For Sueryaa Knitwear Limited
	Aliva Dey
Date: 04.08.2025	Additional (Whole time) Director
Place: Ludhiana	DIN: 10805742