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As per the Central Statistical Office (CSO), the Indian economy grew by a strong 8.7% in the fiscal year 2021-22, against a contraction of 6.6% in financial year 2020-21. This dramatic reversal that is unseen among large major economies of the world implies that overall economic activity has recovered past the pre-pandemic levels. Almost all indicators demonstrate that the economic impact of the second wave of the virus in Q1 of 2021-22 fiscal was much smaller than that experienced during the full lockdown phase in 2020-21. This also exhibits the sheer resiliency of the economy to bounce back after a major shock event that has left much of the world paralysed.

The CSO has indicated that GVA (gross value added) during fiscal year ending March 2022 was at 8.1%, as compared to a contraction of 4.8% in the previous year. Furthermore, as far as the major constituents of the economy are concerned, the agriculture sector slowed to 3% in 2021-22, after growing 3.3% in the previous year. While the mining and quarrying sector grew by 11.5% in FY 2021-22, against a contraction of 8.6% in the previous fiscal year, manufacturing also expanded at a good pace of 9.9%, as against -0.6% in the previous year. Moreover the services sector was up by 11.1% during 2021-22, as against a contraction of 202.2% recorded in the previous financial year. Total consumption expanded by 7% in 2021-22. The primary factor attributable to this is the significant contributions from government spending, especially in the absence of private sector investment. Similarly, gross fixed capital (GFC) formation exceeded pre-pandemic levels on the back of ramped up public expenditure on infrastructure. This is amply evident in the over 35% YoY increase in capex and proposed infrastructure spend of over Rs.10 lakh crore, as announced in the Union Budget 2022-23, thus reinforcing the government’s commitment to using infrastructure as a force multiplier for sustained economic growth. Furthermore, exports of both goods and services have been exceptionally strong in 2021-22, with imports also recovering strongly on the back of domestic demand resumption as well as higher international commodity prices. Moreover, despite the disruptions caused by the global pandemic, India’s balance of payments has remained in surplus throughout the last two years. This has allowed the Reserve Bank of India (RBI) to keep accumulating foreign exchange reserves, which stand at about US$ 600 bn. This is equivalent to about 12-13 months of merchandise imports and is higher than the country’s external debt. The combination of high foreign exchange reserves alongside sustained foreign direct investment (FDI) and rising export earnings will provide sufficient buffer against possible global liquidity tapering in 2022-23. Besides, the government’s GST (Goods and Services Tax) collections have also been robust, indicating healthy recovery of the corporate and trade, services and business sectors. The average monthly gross GST collection for the last quarter (Q4) of FY 2021-22 has been Rs. 1.38 lakh crore, against the average monthly collection of Rs. 1.10 lakh crore, Rs. 1.15 lakh crore and Rs. 1.30 lakh crore in the first, second and third quarters, respectively. Additionally, the gross GST revenue collected in the month of March 2022 was Rs. 1.42 lakh crore, which is an all-time high breaching the earlier record of Rs. 1.40 lakh crore collected in the month of January 2022.

The Production-Linked Incentive (PLI) scheme of the government is a major initiative aimed to uplift MSMEs and enhance manufacturing GVA from the current 16.5%, and is likely to unlock about $520 bn in the country’s output over the medium-term. Further, India is being increasingly seen as a viable alternative sourcing destination by global corporations adopting a ‘China+1’ strategy to de-risk their supply chain, thus embedding the country deeper in global value chains. India is being increasingly seen as a viable alternative sourcing destination by global corporations adopting a ‘China+1’ strategy to de-risk their supply chain, thus embedding the country deeper in global value chains.

Despite the several positive developments in India, the global environment still remains fraught with uncertainty. Runaway inflation is being exacerbated by the Russia-Ukraine war and the COVID suppression policy of China that has called for strict lockdowns, thus disrupting global supply chains. Further, at the time of drafting this report, the Monetary Policy Committee (MPC) of the RBI had already increased the benchmark policy rate (repo rate) by 40 bps to 4.4% with immediate effect, and also hiked the cash reserve ratio (CRR) by 50 bps to 4.5% effective May 21, 2022 in an off-cycle meeting, thus withdrawing its accommodative stance witnessed during the pandemic. This is being seen as a measure to control inflation that is above the RBI’s target range. Nonetheless, with the vaccination program, which is to be seen as a key economic indicator, has covered the bulk of the Indian population and with economic momentum building back and the likely long-term benefits of supply-side reforms in the pipeline, the Indian economy is in a good position to achieve GDP growth of 8-8.5% in fiscal 2022-23, as estimated by the 2022 Economic Survey.


Textile and apparel industry

According to the Ministry of Textiles, Government of India, India’s textile industry is one of the largest in the world with a huge raw material base and established manufacturing strengths across the value chain. This makes the country the 6th largest exporter of textiles and apparel globally. India’s textiles and clothing industry is one of the mainstays of the national economy. The uniqueness of the Indian textile industry lies in its strength, both in the hand-woven sector as well as in the capital-intensive mill sector. The country’s mill sector is the second largest in the world. Traditional sectors, including handloom, handicrafts and small-scale power loom units are the biggest source of employment for millions of people in rural and semi-urban areas, thus offering direct employment and livelihood opportunity to skilled and semi-skilled workers, including a large number of women. The sector has strong alignment with the government’s key initiatives of Make in India, Skill India, Women Empowerment and Rural Youth Employment.

India recorded its highest-ever textiles and apparel exports in 2021-22 at USD 44.4 billion, as per the Ministry of Textiles, Government of India. The exports tally, which also includes handicrafts, indicates a substantial increase of 41% and 26% over the corresponding figures in FY 2020-21 and FY 2019-20, respectively.

In a major development for the domestic textiles sector, the government approved the Production-Linked Incentive (PLI) Scheme for textiles, focusing on man-made fiber (MMF) apparel, MMF fabrics, and products of technical textiles to enhance India’s manufacturing capabilities and exports. The scheme has an approved financial outlay of Rs. 106.83 billion over a five-year period. While the notification for the scheme was issued on September 24, 2021, operational guidelines for the PLI Scheme were issued on December 28, 2021.

Some of the key other initiatives of the government in support of the domestic textiles and apparel sector include: l Technology aid through the Amended Technology Fund Upgradation Scheme (ATUFS) with an outlay of Rs. 17,822 crore that aims to mobilise new investments of about Rs. 95,000 crore and create new employment for about 3.5 mn l Support for skilling through ‘Samarth’ that was formulated under the broad skilling framework adopted by the Ministry of Skill Development & Entrepreneurship, with advanced features such as training of trainers, dedicated call centre with helpline number, mobile app-based Management Information System (MIS), on-line monitoring of the training process, etc. l Infrastructure development via the PM-Mega Integrated Textiles Regions and Apparel Park (PM-MITRA) launched in October 2021 to bolster India’s textile industry by way of enabling scale of operations, optimising logistics cost by housing the entire value chain in a single location, attracting investment, generating employment and augmenting export potential. The government plans to set up 7 PM-MITRA Parks in greenfield/brownfield sites and has a budgetary outlay of Rs. 4,445 crore for a period 2021-22 to 2027-28.

The Goverment of India supported the domestic Textile and Appearel sector through Technology aid through the Amended Technology Fund Upgradation Scheme (ATUFS) with an outlay of Rs. 17,822 crore.

l Textile Cluster Development Scheme (TCDS) that envisages developing an integrated workspace and linkages-based ecosystem for existing as well as potential textile units to make them operationally and financially viable. The total outlay of the scheme is Rs. 853 crore for completing ongoing projects.

l Integrated Processing Development Scheme (IPDS) that aims to facilitate the textiles industry to meet the required environmental standards and support new Common Effluent Treatment Plants (CETP)/upgradation of CETPs in existing processing clusters, etc.

Indian innerwear industry & Outlook

The Indian innerwear market is currently estimated to be worth Rs. 475 bn, accounting for 9-10% of the total domestic fashion retail market. It is expected to grow at a CAGR of 13% during FY 2020-25 (Source : Dolat Capital).

Innerwear has graduated from being just a functional category to a category that offers additional fashion quotient. With rising aspirations and disposable incomes, the innerwear industry is witnessing a perceptible shift from a price-sensitive category to a brand-sensitive category. This represents a major opportunity for branded players. Furthermore, traditionally, the innerwear market was largely fragmented and unorganised. Yet, over the recent years, the organised innerwear segment has shown promising growth in both men’s and women’s categories, getting a thrust from rising brand consciousness, need for added comfort, seamless availability offline and online, including via easy access from several fashion e-comm players, and products being available across diverse price points, thus suiting all budgets and expectations. Today, with the lifting of COVID-induced lockdowns and rising mobility, the innerwear industry is likely to witness huge pent-up demand. Furthermore, innerwear being a discretionary product, consumers with rising discretionary incomes will likely accelerate purchase decisions, thus giving an added impetus to overall demand. Over the long term, urbanisation, growing disposable and discretionary incomes, and increasing consumer preference for branded products, the innerwear industry is likely to emerge as a promising retail segment of the future. The shift from unbranded to branded products and from the unorganised to the organised players embodies a major structural demand driver for India’s innerwear industry.

Indian innerwear market

2020 2025 (E)
Rs. 475 bn Rs. 876 bn


CAGR 2020-2025 (E): 13%

Men’s innerwear segment

Men’s innerwear segment, which is currently estimated at Rs. 139 bn, is projected to grow at a CAGR of 10.3% to reach a size of Rs. 226 bn by FY 25E. It contributes 29% of total innerwear market and is characterised by the presence of numerous Indian and international brands. The men’s innerwear segment is largely dominated by organised players with about 60% of the market share (Source : Dolat Capital).

The current industry trends exhibit an inclination amongst Indian men to spend more on innerwear, leading to continued growth in this category, especially in the premium, super premium and luxury price segments. Though MBOs (multi brand outlets) are still considered to be the most preferred channel for buying innerwear, organised retail

The current industry trends exhibit an inclination amongst Indian men to spend more on innerwear, leading to continued growth in this category.

formats such as EBOs (exclusive brand outlets), departmental stores and LFS (large format stores) are also gaining traction and popularity, as more and more brands enter into the premium and luxury categories. Furthermore, the recent popularity of online retail, especially for apparel shopping, has also permeated into the innerwear category, providing much more exposure to the consumer. Online retail is also giving consumers the accessibility to top brands in areas where these brands have no physical presence, thereby opening up a new retail/demand channel for companies. Going forward, men’s innerwear category is projected to expand at a 10.3% CAGR to reach a size of Rs. 226 bn by 2025 from

Rs. 139 bn in 2020, thus constituting about 26% of the total innerwear industry in 2025. The share of mid and premium product categories is expected to grow to 38% and 18%, respectively in 2022, up from 35% and 16% in 2018. The share of the economy category is projected to decline during this period from 47% to 41%. Sizeable opportunity exists in terms of growing spends on innerwear and rising need for comfortable innerwear, even as innovation in terms of new designs and materials also help sustain consumer interest.

Men’s innerwear market

2020 2025 (E)
Rs. 139 bn Rs. 226 bn


CAGR 2020-2025 (E): 10.3%

Women’s innerwear segment

The women’s innerwear market to grow at a 14% CAGR vs. 10.3% CAGR for men’s innerwear market, till 2025 (Source Dolat Capital). This is on account of women’s innerwear segment possessing high growth potential considering low penetration and higher share of unorganised/non-branded products. Thus, the industry expects growth in the innerwear market to be driven by women’s segment at least over the next decade, as branded players focus on capturing market share from the unorganised players and as women from urban, semi-urban as well as rural areas prioritise comfort and protection through innerwear. Furthermore, given a variety of design options and innovations, the women’s innerwear segment, which is approximately 68% of the total innerwear market, is more dynamic and includes a wider range of product offerings.

Thus, women’s innerwear market is likely to grow at a faster pace compared to men’s innerwear segment, from Rs. 321 bn in FY 2020 to an estimated Rs. 621 bn in FY 2025. This growth in demand is attributable to growing number of working women and rising fashion consciousness amongst women, especially on account of increased online exposure. Women are becoming increasingly conscious about their intimate wear brands and styles, not just in metros, but also in smaller towns and cities. In order to cater to the growing demand, the industry has consistently launched new collections for women’s innerwear. Furthermore, disruptive ad campaigns focused on raising awareness and dedicated women EBOs assuring enhanced privacy have also helped expand the size of the market. As these trends play out and as the market consolidates from being currently fragmented, women’s innerwear offers tremendous market potential, with the size of this industry expected to reach about 71% of the total innerwear market size in 2025.

Women’s innerwear market

2020 2025 (E)
Rs. 321 bn Rs. 621 bn


CAGR 2020-2025 (E): 14%

Kids wear segment

The Indian kids wear market is highly unorganised and fragmented with a large number of local MBOs and regional players. India has the world’s largest young population in the age group of 0-14 years and accounts for as much as 27% of the total population. Moreover, with growing trends of nuclear family system, increased spending on children and rising brand awareness among children, the kids wear market in India, which is worth Rs. 1,022 bn in 2020, is expected to grow at a CAGR of 10% in the next 5 years.

Athleisure wear segment

Athleisure as a category was already gaining traction during the pre-COVID era and now, owing to work from home as also growing fitness consciousness amongst consumers, the segment is witnessing significant acceleration. India’s athleisure market is estimated at Rs. 54,000 cr and is growing at 18-20% annually (Source : Philip Capital).

Athleisure is not just a fashion essential anymore; it has emerged as a medium for expression and an insignia of the young and the young at heart. In India, the demand for casual wear is rapidly escalating, as the modern Indian consumer does not wish to compromise on comfort, functionality and looks. With rapid globalisation and the advent of digital media, the spread of fashion across global cultures have picked up tremendous pace. Consumers, ever connected and digitally aware, are constantly following international trends, which has also given a boost to the domestic activewear/athleisure segment.

Going forward, the benefits of athleisure apparel, like prolonged durability, improved range of motion, breathability of material and superior comfort are some of the major factors that will continue to influence the growth of the athleisure/ activewear industry.

Key trends observed in the innerwear industry

The future outlook of the Indian innerwear industry appears positive on account of several factors as per a research by www.indiaretailing.com which includes:

l Shift from the unorganised sector to the organised segment, especially with the unorganised players being weakened by the pandemic and thus also having limited advertising and marketing power.


l Transition to branded innerwear products on the back of greater awareness creation by the organised players and consumers choosing these products for enhanced comfort.


l Rising disposable incomes, thus driving discretionary purchases for consumers to try out new products that innovate around styles, designs and materials. l Multiple channels of easy product availability, including EBOs, MBOs and online that provide the added convenience of home delivery.


l Growing frequency of purchases given an impetus by higher discretionary spends


l Permanency in hybrid work trends driving the athleisure wear industry, as consumers choose comfort and style.


l Growing health consciousness and the need to look good while working out will also especially drive athleisure wear demand

l Celebrity marketing will continue to have a positive brand rub-off, propelling demand in especially semi-urban and rural regions

l Growing power of digital influencers and their large fan following will also emerge as a major driver of influencing innerwear and outerwear demand


l Attractive demographics with a large youth population


l Shift in market demand from unbranded products to proven branded products, especially driven by higher awareness and celebrity advertising

l Premiumisation trends with consumers up-trading from economy to higher value premium and luxury products

l Work from home and hybrid work trends driving demand for comfort wear products l Increased awareness among women about intimate wear products


l Trends in more women stepping out for work and participating in the formal workforce, driving both- demand for women inner wear and higher discretionary/disposable incomes



l Inflationary pressures threatening price and demand stability


l Labour availability challenges and costly training expenses incurred for skilling

l Changing consumer behavior.


l High cost of brand building


l Emerging multi-national brands and their entry to the Indian market.


l Infrastructural bottlenecks and efficiency l Imports from other countries.

Risks and concerns


l Covid-19 pandemic situation: Resurgence of potential new waves of Covid-19 may impact the business.


l Volatility in raw material prices: Cotton yarn and fabric account for approximately 70% of the total raw material cost. Currently, the Company is able to pass on any rise in raw material costs to the consumer. Any inability to pass on the impact of rise in raw material prices may negatively impact the estimated margin of the Company, resulting in lower earnings.


l Entry of foreign players: With markets being global and digital, it is becoming easier for foreign brands to penetrate into Indian domestic markets via direct and indirect strategic tie-ups largely in the premium and super-premium segments, thus creating stiff competition for existing players in the organized sector.

l Changing customer behaviour and spending capacity: Rapid changes in consumer preferences from one brand to another makes it difficult for a Company to establish a permanent connect and in gaining brand loyalty, consequently leading to loss of business to competitors. Furthermore, improving Indian demographic profile has given credence to the Indian consumption story and any downward deviation in economic growth may impact consumers’ discretionary spends, thereby negatively impacting the earning potential of the Company.

Internal control system and their adequacy

The Company has adequate system of internal controls system commensurate with its nature of business and size of operations to safeguard and protect from loss, unauthorized use or disposition of the Company’s resources. There are proper procedures for authorization, recording and reporting of transactions to the management. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in conformity with applicable accounting standards and principles or any other criteria applicable to such statements, and to maintain accountability for aspects. The Company’s internal audit process covers all significant operational areas and reviews the in-system checks regularly. The internal audit report, submitted by the internal auditors, is placed before the Audit Committee of the Company’s Board of Directors on a quarterly basis for review. Suggestions for improvements are considered and the Audit Committee asserts stringent corrective actions and follow-ups on the implementations thereof. The Audit Committee periodically meets the statutory and internal auditors of the Company to ascertain their views on the adequacy of internal control system and keeps the Board informed of its observations from time to time.

Financial performance and Analysis

Particulars 2021-22 2020-21 Change %
Revenue from Operations 1,42,867.48 1,28,740.17 14,127.31 10.97
Other Income 1,070.45 730.02 340.43 46.63
Profit before Finance Charges, Tax, Depreciation/Amortization 27,780.06 26,319.86 1,460.20 5.55
Less: Finance Charges 1,870.46 1,342.91 527.55 39.28
Profit before Tax, Depreciation/Amortization (PBTDA) 25,909.60 24,976.95 932.65 3.73
Less: Depreciation/Amortization 1,383.69 1,373.14 10.55 0.77
Profit before Taxation (PBT) 24,525.91 23,603.81 922.10 3.91
Less: Tax Expense 5,449.91 6,211.77 -761.86 -12.27%
Profit after Taxation (PAT) 19,076.00 17,392.04 1683.96 9.68


*Previous year figures have been re-stated wherever required.

The Company is engaged in the business of manufacturing of hosiery and related products and there is no separate reportable segment.

Key financial ratios

As required, pursuant to Schedule V(B) to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, key financial ratios for the financial year 2021-22 vis-?-vis 2020-21, along with changes therein, are reproduced herein below:

Sl. No. Ratio FY 2021-22 FY 2020-21
i. Debtors’ Turnover 3.16 4.20
ii. Inventory Turnover 2.96 3.03
iii. Interest Coverage Ratio 14.11 18.58
iv. Current Ratio 2.02 2.32
v. Debt Equity Ratio 0.28 0.06
vi. Operating Profit Margin/EBIDTA Margin (%) 18.70 19.88
vii. Net Profit Margin (%) 13.35 13.51
viii. Return on Net Worth (%) 23.83 26.76


In the preparation of financial statements, the treatment, as prescribed in the applicable IND Accounting Standards are followed.

Human Resources and Industrial Relations

The Human Resources (HR) function of an organization is vital to the creation and development of good quality and dedicated human capital, essential to the Company’s business and operations. Rupa always focuses in grooming and training its workforce via imparting specialized and technical training at regular intervals, which helps improve their knowledge, skills and competency to execute their assignments, effectively and efficiently. Employee incentivisation, professional growth, participation and recognition are always part of the Company’s HR management, with focus on upgrading their quality of life and job satisfaction. The Company’s HR policy empowers it to attract, integrate and retain the best talent, requisite to its line of business and necessary for powering its growth. As on March 31, 2022, the number of permanent employees on the rolls of Company, was 1152. Further, industrial relations have remained cordial during the period under review.

Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the objectives, projections, estimates and expectations are ‘forward-looking statements’ within the meaning of applicable laws and regulations and are subject to volatile market conditions. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations, include economic conditions affecting demand/supply and price conditions in the markets in which the Company operates, changes in Government regulations, tax laws, statutes and other incidental factors.