Q2 FY2026 Insights: Textiles Industry Overview

Textiles Sector: A Comprehensive Industry Analysis and Company Deep Dive

Small Summary The Indian Textiles sector, a cornerstone of the nation's economy, is undergoing significant transformation, driven by increasing domestic consumption, a growing organized retail segment, and a strong push towards exports and technological integration. This analysis synthesizes data from three key players – Vardhman Textiles Limited (a large, vertically integrated yarn and fabric manufacturer), Saraswati Saree Depot Limited (a specialized B2B saree wholesaler expanding into retail), and Active Clothing Co. Limited (an integrated apparel manufacturer focused on knitwear and exports) – to provide an in-depth understanding of the industry's landscape, financial health, competitive dynamics, and future outlook. While the sector faces challenges such as margin pressures and capital intensity, strategic investments in sustainability, technology, and market diversification are paving the way for robust long-term growth. The industry is projected to reach US$350 billion by 2030, with exports targeting US$100 billion, underpinned by strong government support and evolving consumer preferences for quality, branded, and sustainable products.

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A. INDUSTRY OVERVIEW & MARKET LANDSCAPE

The Indian Textiles sector is a vast and complex ecosystem, playing a pivotal role in the country's economy. It is the world's second-largest textile producer and fifth-largest exporter, contributing approximately 2.3% to India's GDP, 13% to industrial production, and 10.5% to the nation's total exports. The sector's GDP contribution is anticipated to double to 5% by the end of the decade, reflecting its strategic importance and growth potential. The market for Indian textiles and apparel is projected to grow at a robust 10% CAGR, reaching an impressive US$350 billion by 2030, with exports expected to reach US$100 billion. The government has set an ambitious target of US$250 billion in textiles production and US$100 billion in exports over the next 5-6 years, indicating strong policy support for the sector.

Total Addressable Market Size and Growth Rates

The overall textile and apparel market in India is on a significant growth trajectory. Beyond the overarching US$350 billion target by 2030, several sub-segments demonstrate substantial market potential:

• **Outerwear Jackets Market:** Valued at USD 31.51 billion in 2024, it is projected to reach USD 53.76 billion by 2033, indicating a strong CAGR.
• **Joggers and Sweatpants Market:** This segment was valued at USD 87.16 billion in 2023 and is expected to grow to USD 131.92 billion by 2030.
• **Circular Knit Fabric Market:** Standing at USD 4.5 billion in 2022, it is projected to reach USD 7.2 billion by 2030.
• **Sweaters Market:** With a size of USD 12.8 billion in 2023, this market is forecast to expand to USD 19.6 billion by 2030.
• **Flat-knit Sweaters Market:** A larger segment, valued at USD 60 billion in 2022, it is projected to reach USD 85 billion by 2030.
• **Readymade Garments Market:** One data point suggests a market size of USD 4.5 billion in 2022, projected to reach USD 7.2 billion by 2030. Another, specific to India, shows a market size of US$36 billion in FY24, with a significant projection to US$100 billion by FY30. This indicates a substantial growth opportunity in the readymade apparel segment.
• **Indian Knitting Industry:** This segment is pegged at approximately $9.1 billion and is slated to reach about $21.5 billion by 2027, growing at a 9% CAGR.
• **Saree Industry:** This traditional segment, worth Rs. 558 billion in fiscal 2020, experienced a significant decline of approximately 43% in fiscal 2021 due to the pandemic. However, it rebounded strongly by approximately 44% in fiscal 2022. By fiscal 2024, it was valued at Rs. 515 billion, representing about 5% growth from the previous year. The long-term outlook projects the saree industry to grow at a 5-6% CAGR from fiscal 2024 to 2029, reaching Rs. 650-675 billion by fiscal 2029.

Market Structure and Segmentation

The textile industry is highly diversified, encompassing various stages of the value chain and catering to different market segments:

• **Vertical Integration:** Companies like Vardhman Textiles Limited exemplify vertical integration, being India's largest vertically integrated textile manufacturer and the largest producer of yarn. This structure allows for control over the entire production process, from raw material to finished product, offering efficiency and quality control advantages.
• **Product Segmentation:**
• **Customer Type Segmentation:**
• **Organized vs. Unorganized Segment:** The saree industry, for instance, is seeing a significant shift towards the organized segment, which is growing at a 9-10% CAGR. It is expected to constitute 32-37% of the market by fiscal 2029, up from the current 25-30%. This trend benefits organized players like Saraswati.

Key End Markets and Applications

The textile products cater to a diverse range of end markets: * **Global Fashion Brands:** Active Clothing serves prominent foreign brands, providing "design-to-shelf" services for high-fashion streetwear. Its 22-year partnership with Levis is a testament to this. * **Direct-to-Consumer (D2C) Brands:** Active Clothing also positions itself as a preferred partner for D2C brands, reflecting the growing trend of online retail. * **Wholesale and Distribution:** Saraswati's core business is wholesale distribution of sarees to retailers across India. Active Clothing also has a dealer network for domestic brands. * **Domestic Retail Consumers:** Both Saraswati (through its new retail outlet) and Active Clothing (through MBOs and brand partnerships) directly serve the end consumer market in India. * **Industrial Applications:** While not explicitly detailed for all companies, yarn production (Vardhman) has broad industrial applications beyond apparel.

Geographic Distribution and Regional Dynamics

The geographic reach of companies varies significantly: * **Global Footprint:** Vardhman Textiles boasts a global footprint, exporting to over 75 countries, highlighting its international presence and diversified market access. Active Clothing also has a strong export focus, catering to 30+ countries, with significant market presence in North America (38.46% of regional market share in 2024), Europe, and rapid growth in Asia-Pacific. It aims to unlock a ₹500 Cr growth opportunity across 110+ countries with Levi's. * **Domestic Regional Focus:** Saraswati Saree Depot primarily serves the Indian domestic market, with a strong concentration in the West (81.4% of H1 FY26 revenue) and South (18.0% of H1 FY26 revenue) regions. North and East regions currently contribute negligibly (0.2% and 0.0% respectively). Its operations are concentrated in Kolhapur (90.52% of H1 FY26 store-wise revenue) and Ulhasnagar (9.48%).

Market Maturity and Lifecycle Stage

The Indian textile industry is in a growth phase, transitioning from a largely unorganized sector to a more structured and organized one. * **Growth in Demand:** The overall market projections (US$350 billion by 2030) indicate a robust growth stage. * **Organized Segment Expansion:** The saree industry's shift towards organized players (9-10% CAGR) signifies a maturing market where branding, quality, and supply chain efficiencies are becoming critical. * **Technological Adoption:** The push for advanced manufacturing (e.g., Active Clothing's "Knit to Shape" Smart Knitting Factory) suggests an industry embracing innovation to enhance competitiveness and efficiency. * **Sustainability Focus:** Companies like Vardhman with ambitious ESG goals (Net Zero by 2045, Net Positive Impact by FY 2050) indicate a sector moving towards more sustainable practices, a characteristic of a maturing and responsible industry.

Industry Value Chain and Ecosystem

The value chain in the textile sector is extensive: * **Raw Material Production:** This includes cotton, synthetic fibers, and other inputs. Vardhman, as a large yarn producer, sits at a crucial upstream position. * **Textile Manufacturing (Spinning, Weaving, Knitting, Processing):** Vardhman's vertical integration covers these stages. Active Clothing specializes in knitting (flat-knitted, circular-knitted) and has backward integrated into printing, garment dyeing, and specialized washes. Saraswati sources from over 900 weavers/suppliers, indicating its position further down the chain, relying on external manufacturing. * **Apparel Manufacturing/Garmenting:** Active Clothing provides end-to-end "design-to-shelf" solutions, converting fabrics into finished garments. * **Wholesale and Distribution:** Saraswati operates as a major wholesaler. Active Clothing also manages distribution for various brands. * **Retail:** Saraswati is venturing into direct retail, while Active Clothing leverages MBOs. * **Ancillary Services:** Design, marketing, logistics, and technology integration (e.g., AI-driven design, real-time sales tracking by Active Clothing) are integral parts of the ecosystem.

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B. FINANCIAL & ECONOMIC PROFILE

The financial performance of the companies analyzed reflects a dynamic and evolving textile sector, characterized by varying scales, growth trajectories, and profitability profiles. While some companies demonstrate strong growth, others face margin pressures, highlighting the competitive nature and input cost sensitivities within the industry.

Industry Aggregate Revenue Scale and Growth Trajectory

The three companies represent different scales within the textile sector: * **Vardhman Textiles Limited:** As India's largest vertically integrated textile manufacturer, Vardhman operates at a significantly larger scale. Its total income for FY25 was INR 9,955 Crore, with a turnover exceeding USD 1 Billion. For H1 FY26, its Revenue from Operations stood at INR 4,760 Crore, showing a modest YoY growth of 1% compared to H1 FY25 (INR 4,725 Crore). Total Income for H1 FY26 was INR 4,882 Crore, a slight YoY decline of 0.4% from INR 4,900 Crore in H1 FY25. Quarterly, Q2 FY26 Revenue from Operations was INR 2,417 Crore (YoY -1.5%, QoQ 3.2%), and Total Income was INR 2,468 Crore (YoY -4%, QoQ 2%). * **Saraswati Saree Depot Limited:** This company operates at a mid-tier scale, specializing in sarees. Its annual revenues have shown consistent growth, reaching INR 613.61 Crore in FY25 from INR 550.31 Crore in FY22. For H1 FY26, Revenue from Operations was INR 353.16 Crore, demonstrating a strong 19.67% YoY growth compared to H1 FY25 (INR 295.12 Crore). Total Operational Revenue for H1 FY26 was INR 355.34 Crore, growing 19.81% YoY. Quarterly, Q2 FY26 Revenue from Operations was INR 208.39 Crore, marking a significant 26.5% YoY growth. * **Active Clothing Co. Limited:** This company is a smaller, but rapidly growing, integrated apparel manufacturer. Its annual revenues have seen substantial growth, from INR 200.49 Crore in FY23 to INR 296.15 Crore in FY25. For H1 FY26, Total Income was INR 147.66 Crore, reflecting a 15.22% YoY growth compared to H1 FY25 (INR 128.15 Crore). Quarterly, Q2 FY26 Total Income was INR 83.19 Crore, showing a modest 1.93% YoY growth.

**Summary of Revenue Growth:** * **Vardhman:** H1 FY26 Revenue from Operations grew 1% YoY, Total Income declined 0.4% YoY. Q2 FY26 Revenue from Operations declined 1.5% YoY, Total Income declined 4% YoY. This indicates a period of slight contraction or stabilization for the larger player. * **Saraswati:** H1 FY26 Revenue from Operations grew 19.67% YoY, Total Operational Revenue grew 19.81% YoY. Q2 FY26 Revenue from Operations grew 26.5% YoY. This company demonstrates strong double-digit growth. * **Active Clothing:** H1 FY26 Total Income grew 15.22% YoY. Q2 FY26 Total Income grew 1.93% YoY. This company shows healthy growth, though Q2 FY26 growth was modest.

Profitability Levels Across Companies

Profitability, measured by EBITDA and PAT margins, shows variability and recent pressures for some players.

**Vardhman Textiles Limited:** * **EBITDA Margin:** FY22: 27%; FY23: 15%; FY24: 13%; FY25: 16%. In H1 FY26, EBITDA Margin was 16.0% (YoY -100 bps from 17.0% in H1 FY25). For Q2 FY26, it was 15.5% (YoY -110 bps, QoQ -100 bps), indicating a recent contraction. * **PAT Margin:** FY22: 17%; FY23: 7%; FY24: 6%; FY25: 9%. In H1 FY26, PAT Margin was 8.0% (YoY -110 bps from 9.1% in H1 FY25). For Q2 FY26, it was 7.7% (YoY -90 bps, QoQ -70 bps), also showing recent contraction. * **Absolute EBITDA:** H1 FY26: INR 780 Cr (YoY -6%). Q2 FY26: INR 383 Cr (YoY -10%, QoQ -4%). * **Absolute PAT:** H1 FY26: INR 391 Cr (YoY -12%). Q2 FY26: INR 189 Cr (YoY -14%, QoQ -6%).

**Saraswati Saree Depot Limited:** * **EBITDA Margin:** FY25: 6.87%; FY24: 6.62%. In H1 FY26, EBITDA Margin was 6.52% (YoY -0.31% from 6.83% in H1 FY25). For Q2 FY26, it was 6.75% (YoY -0.73% from 7.48% in Q2 FY25). * **PAT Margin:** FY25: 4.98%; FY24: 4.83%. In H1 FY26, PAT Margin was 4.77% (YoY -0.54% from 5.31% in H1 FY25). For Q2 FY26, it was 5.04% (YoY -0.77% from 5.81% in Q2 FY25). * **Absolute EBITDA:** H1 FY26: INR 23.04 Cr (YoY 14.24%). Q2 FY26: INR 14.06 Cr (YoY 14.10%). * **Absolute PAT:** H1 FY26: INR 16.86 Cr (YoY 7.62%). Q2 FY26: INR 10.51 Cr (YoY 9.88%).

**Active Clothing Co. Limited:** * **EBITDA Margin:** FY23: 6.86%; FY24: 9.98%; FY25: 9.95%. In H1 FY26, EBITDA Margin was 9.72% (YoY -1.11% from 10.83% in H1 FY25). For Q2 FY26, it was 8.88% (YoY -1.18% from 10.06% in Q2 FY25). * **PAT Margin:** FY23: 1.13%; FY24: 2.29%; FY25: 2.84%. In H1 FY26, PAT Margin was 3.34% (YoY 0.47% from 2.87% in H1 FY25). For Q2 FY26, it was 3.36% (YoY 0.34% from 3.02% in Q2 FY25). * **Absolute EBITDA:** H1 FY26: INR 14.35 Cr (YoY 3.41%). Q2 FY26: INR 7.39 Cr (YoY -10.01%). * **Absolute PAT:** H1 FY26: INR 4.93 Cr (YoY 34.10%). Q2 FY26: INR 2.79 Cr (YoY 13.48%).

**Range of Margins and Outliers:** * **EBITDA Margins:** Range from 6.52% (Saraswati H1 FY26) to 16.0% (Vardhman H1 FY26). Vardhman consistently maintains higher EBITDA margins due to its scale and vertical integration. Saraswati and Active Clothing operate at lower, but improving, EBITDA margins. * **PAT Margins:** Range from 3.34% (Active Clothing H1 FY26) to 8.0% (Vardhman H1 FY26). Similar to EBITDA, Vardhman leads in PAT margins. Active Clothing has shown a positive trend in PAT margin improvement despite EBITDA margin contraction in H1/Q2 FY26, suggesting better cost control below EBITDA or lower interest/depreciation.

**Observation:** Q2 FY26 and H1 FY26 data show a common trend of EBITDA margin contraction for all three companies (Vardhman, Saraswati, Active Clothing) on a YoY basis. This suggests industry-wide pressures, possibly from raw material costs or increased operational expenses, impacting gross profitability. However, Active Clothing managed to improve its PAT margin in H1/Q2 FY26, indicating effective management of other expenses, interest, or taxes.

Return Profiles (ROCE, ROE) by Company

Return ratios indicate how efficiently companies are using capital and generating returns for shareholders.

**Vardhman Textiles Limited:** * **ROCE:** FY22: 24%; FY23: 11%; FY24: 8%; FY25: 11%. * **ROE:** FY22: 22%; FY23: 9%; FY24: 7%; FY25: 9%. Vardhman's return ratios declined significantly from FY22 to FY24, then recovered slightly in FY25, reflecting the cyclicality and challenges faced by the broader textile industry during that period.

**Saraswati Saree Depot Limited:** * **ROCE:** FY23: 98%; FY24: 64%; FY25: 28%; H1 FY26 (annualized): 24%. * **ROE:** FY23: 96%; FY24: 59%; FY25: 25%; H1 FY26 (annualized): 18%. Saraswati exhibits exceptionally high, though declining, return ratios. The sharp decline from FY23 to FY25/H1 FY26 suggests significant capital base expansion (Shareholders Funds grew from 64.91 Cr in Mar'24 to 188.70 Cr in Sept'25) or a normalization of profitability after a period of high efficiency. Even with the decline, its ROCE and ROE remain significantly higher than Vardhman and Active Clothing, indicating very efficient capital utilization or a business model with lower capital requirements relative to profits.

**Active Clothing Co. Limited:** * **ROCE:** FY23: 7.14%; FY24: 9.00%; FY25: 10.93%. * **ROE:** FY23: 3.51%; FY24: 7.03%; FY25: 10.92%. Active Clothing shows a consistent improvement in both ROCE and ROE from FY23 to FY25, indicating increasing efficiency in capital deployment and better returns for shareholders as the company scales up and optimizes operations. Its FY25 ratios are comparable to Vardhman's.

Working Capital Characteristics and Cash Conversion Cycles

Working capital management is crucial in the textile industry due to inventory and receivables.

**Vardhman Textiles Limited:** * **Net Debt:** FY22: INR 288 Cr; FY23: (INR 1,131) Cr (net cash); FY24: INR 424 Cr; FY25: (INR 210) Cr (net cash); 1H26: INR 78 Cr. The fluctuating net debt position, including periods of net cash, suggests strong liquidity management and potentially efficient working capital. Total Borrowings have also fluctuated, decreasing from INR 1,980 Cr in FY22 to INR 1,238 Cr in FY25, before rising to INR 1,478 Cr in 1H26. * **Investments (Excluding Group Investments):** Significant investments ranging from INR 1,282 Cr to INR 2,438 Cr, indicating a robust balance sheet and strategic deployment of surplus funds.

**Saraswati Saree Depot Limited:** * **Inventories:** Increased from INR 107.70 Cr (Mar'24) to INR 155.84 Cr (Sept'25). * **Trade Receivables:** Increased from INR 75.12 Cr (Mar'24) to INR 139.70 Cr (Sept'25). * **Current Assets:** Grew from INR 198.45 Cr (Mar'24) to INR 354.90 Cr (Sept'25). * **Current Liabilities:** Grew from INR 141.03 Cr (Mar'24) to INR 180.70 Cr (Sept'25). * **Cash From Operating Activities:** H1 FY26: INR 0.19 Cr; FY25: INR 2.46 Cr; FY24: (INR 8.54) Cr. Cash generation from operations is low and has been negative in FY24, suggesting challenges in converting profits into operating cash, possibly due to increasing working capital requirements (inventories and receivables).

**Active Clothing Co. Limited:** * **Total Current Assets:** Increased from INR 121.19 Cr (FY23) to INR 215.31 Cr (FY25). * **Total Current Liabilities:** Increased from INR 84.97 Cr (FY23) to INR 164.87 Cr (FY25). * **Cash from Operation:** FY23: INR 14.25 Cr; FY24: INR 20.77 Cr; FY25: (INR 10.37) Cr. Similar to Saraswati, Active Clothing experienced negative cash from operations in FY25, indicating a potential strain on working capital as the company grew rapidly.

**Observation:** Both Saraswati and Active Clothing, despite showing revenue growth, have faced challenges in generating consistent positive cash flow from operations, particularly in recent periods. This could be attributed to increased working capital needs (inventory build-up, higher receivables) to support growth, which is common in scaling businesses within the textile sector. Vardhman, being a larger and more mature player, demonstrates better working capital management with fluctuating but often net cash positions.

Capital Intensity Requirements

The textile industry is generally capital-intensive, requiring significant investments in machinery, facilities, and technology.

• **Vardhman Textiles:** Depreciation has been consistently high and increasing (INR 99 Cr in Q2 FY25 to INR 113 Cr in Q2 FY26; INR 195 Cr in H1 FY25 to INR 222 Cr in H1 FY26), indicating ongoing capital expenditure for maintenance and expansion. Long-term borrowings increased from INR 749 Cr in FY25 to INR 1,225 Cr in 1H26, suggesting recent capital investments.
• **Saraswati Saree Depot:** While its business model (wholesale distribution) might appear less capital-intensive than manufacturing, it has invested in a new purchase office in Surat (25,000 sq. ft. in Oct 2024) and its first exclusive retail outlet in Kolhapur (2025). Depreciation increased significantly from INR 0.23 Cr in Q2 FY25 to INR 1.42 Cr in Q2 FY26, and from INR 0.43 Cr in H1 FY25 to INR 2.69 Cr in H1 FY26, reflecting recent asset additions.
• **Active Clothing Co.:** This company is undertaking significant capital expenditure. It has an agreement with CIXING for the purchase of 600 advanced machines to establish India's first "Knit to Shape" Smart Knitting Factory. This is a major investment in technology and capacity expansion. Depreciation is also notable (INR 1.68 Cr in Q2 FY26, INR 3.28 Cr in H1 FY26). Cash from Investing Activities has been consistently negative (FY23: -17.43 Cr, FY24: -19.45 Cr, FY25: -10.57 Cr), confirming ongoing capital investments.

**Observation:** All three companies are actively investing in their operations, whether it's for capacity expansion, technological upgrades, or market penetration. Active Clothing's "Knit to Shape" factory represents a significant leap in capital intensity and technological adoption.

Revenue Quality

The quality of revenue varies based on the business model: * **Vardhman:** Revenue from operations is primarily from yarn and fabric sales, likely a mix of domestic and international B2B contracts. The nature of its business suggests a relatively stable, though cyclical, revenue stream. * **Saraswati:** Over 90% of revenue comes from sarees, primarily through B2B wholesale. The company serves over 13,000 unique customers, with the top 10 contributing less than 8% of total sales, indicating a diversified customer base and lower customer concentration risk. The annual flagship event "UTSAV" contributes 13-15% to annual revenues, adding a seasonal component. The expansion into retail introduces a B2C element. * **Active Clothing:** Revenue is largely from manufacturing for global fashion brands and D2C brands, implying B2B contracts. Its long-term relationships (e.g., 22-year partnership with Levis) suggest stable, recurring business. The distribution of brands like Flying Machine, Arrow, Being Human, etc., through MBOs also adds a B2B distribution component. The "design-to-shelf" service enhances its value proposition and potentially strengthens customer loyalty.

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C. COMPETITIVE STRUCTURE & DYNAMICS

The Indian textile sector is characterized by a mix of large, integrated players and specialized, niche operators. The competitive landscape is evolving with increasing formalization, technological adoption, and a focus on sustainability.

Number of Players and Market Concentration

India is the world's second-largest textile producer, indicating a vast number of players across the entire value chain, from small weavers to large integrated mills. The market is fragmented, especially in the unorganized segments, but there's a clear trend towards consolidation and growth of organized players. * **Vardhman Textiles:** As "India's Largest Vertically Integrated Textile Manufacturer" and "Largest Producer of Yarn," Vardhman holds a dominant position in its specific segments, suggesting a degree of concentration at the top tier of the manufacturing chain. * **Saraswati Saree Depot:** Positioned as "One of India's leading organized saree wholesalers" and "One of India's leading players in the B2B segment" (as of 2024), it signifies a growing presence in the organized saree market, which itself is becoming more concentrated. The organized segment is expected to constitute 32-37% of the market by fiscal 2029, up from 25-30% currently, indicating a shift from a highly fragmented unorganized market. * **Active Clothing Co.:** Described as "India's one of the leading Integrated Design-to-retail Apparel Company," it suggests a strong position within its niche of integrated apparel manufacturing for high-fashion and premium brands, particularly in knitwear.

Market Share Distribution

Specific overall market share percentages for each company are not provided, but their positioning statements give an indication of their relative standing: * **Vardhman:** Dominant in yarn and vertically integrated textiles. * **Saraswati:** A leader in the organized B2B saree market, with Kolhapur store accounting for nearly 88% of its total combined sales (H1 FY26), indicating regional dominance. * **Active Clothing:** Strong presence in export markets, with North America accounting for 38.46% of its regional market share (2024). It is the largest Levis marketing partner for Chandigarh, Punjab, J&K, Himachal Pradesh, demonstrating significant regional market share in distribution for specific brands.

Competitive Intensity Assessment (Porter's 5 Forces Style)

• **Threat of New Entrants (Moderate to High):**
• **Bargaining Power of Buyers (Moderate to High):**
• **Bargaining Power of Suppliers (Moderate):**
• **Threat of Substitute Products or Services (Moderate):**
• **Rivalry Among Existing Competitors (High):**

Entry Barriers and Competitive Moats

• **Scale and Vertical Integration:** Vardhman's status as India's largest vertically integrated player with 60+ years of experience and a USD 1 Billion+ turnover creates significant economies of scale and control over the value chain, acting as a strong moat.
• **Brand and Legacy:** Saraswati's 50-year legacy and established B2B network of 13,000+ customers provide strong brand recognition and trust within its niche.
• **Technology and Innovation:** Active Clothing's investment in the "Knit to Shape" Smart Knitting Factory, 3D seamless knitting, automation, and AI-driven design creates a technological moat, offering advanced, efficient, and sustainable manufacturing capabilities. Its "design-to-shelf" service and in-house design capabilities are also differentiators.
• **Customer Relationships and Global Reach:** Active Clothing's 22-year partnership with Levis and presence in 30+ export countries, along with Vardhman's global footprint across 75+ countries, demonstrate strong, long-standing customer relationships and diversified market access.
• **Supply Chain Strength:** Saraswati's extensive network of 900+ weavers/suppliers and Active Clothing's backward integration enhance supply chain resilience.
• **Sustainability Initiatives:** Vardhman's ambitious ESG goals (Net Zero by 2045) could become a competitive advantage as global demand for sustainable textiles grows.

Pricing Power Dynamics and Pricing Trends

• **Input Cost Sensitivity:** Raw materials constitute a significant portion of expenditure for all companies. Fluctuations in raw material prices (e.g., cotton, yarn) directly impact profitability. The observed margin contractions in Q2 FY26 for Vardhman and Saraswati suggest limited pricing power to fully offset rising costs or intense competition preventing price increases.
• **Premiumization Trend:** Saraswati notes a "growing preference for higher-quality, premium sarees," which could allow for better pricing in that segment. Active Clothing caters to "ultra-premium brands" and "high-fashion streetwear," implying a focus on value-added products where pricing power might be stronger.
• **Brand Value:** Strong brands (e.g., Levis, Arrow, Flying Machine for Active Clothing's distribution) generally command better pricing.

Differentiation Strategies Employed

• **Vardhman:**
• **Saraswati:**
• **Active Clothing:**

Consolidation Trends and M&A Activity

No explicit M&A activity is mentioned in the provided data. However, the growth of organized players and the increasing capital requirements for technology and sustainability suggest a potential for future consolidation, especially in fragmented segments. The shift in the saree market towards organized players is a form of market consolidation.

Competitive Advantages of Each Player

• **Vardhman Textiles:**
• **Saraswati Saree Depot Limited:**
• **Active Clothing Co. Limited:**

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D. OPERATIONAL CHARACTERISTICS

Operational efficiency, capacity management, and technological adoption are critical determinants of success in the textile sector. The companies analyzed demonstrate varying operational models, from large-scale vertical integration to specialized manufacturing and wholesale distribution.

Capacity and Utilization Trends Across Companies

• **Vardhman Textiles Limited:** While specific capacity and utilization rates are not provided, its status as the "Largest Producer of Yarn" and "India's Largest Vertically Integrated Textile Manufacturer" implies substantial production capacity across spinning, weaving, and processing. The consistent depreciation charges (INR 113 Cr in Q2 FY26, INR 222 Cr in H1 FY26) suggest ongoing investment in maintaining and potentially expanding its vast operational infrastructure.
• **Saraswati Saree Depot Limited:** This company's operational footprint is primarily in warehousing and retail. It boasts a "Total area spread: 235,000+ sq ft across Kolhapur, Ulhasnagar & Ahmednagar." Its two main stores collectively cover 185,000+ square feet, with the Kolhapur store accounting for nearly 88% of total combined sales (H1 FY26). The opening of a new purchase office in Surat (25,000 sq. ft.) in October 2024 indicates an expansion of its procurement and inventory handling capacity.
• **Active Clothing Co. Limited:** This company provides detailed operational metrics for its manufacturing facility in Fatehgarh Sahib, Punjab.

**Observation:** Active Clothing operates at a healthy 75% utilization rate across its key manufacturing segments, suggesting efficient use of existing assets. Its planned expansion with the "Knit to Shape" factory will further boost capacity. Saraswati is also expanding its physical footprint to support growth.

Production Economics and Cost Structures

Raw materials are the most significant cost component across the textile value chain. * **Vardhman Textiles:** Total Expenditure for Q2 FY26 was INR 2,085 Cr, representing 84.5% of Total Income. For H1 FY26, Total Expenditure was INR 4,102 Cr, representing 84.0% of Total Income. While specific breakdown is not provided, raw materials would be a dominant factor. * **Saraswati Saree Depot Limited:** Raw Materials constitute the largest portion of expenditure. * Q2 FY26: Raw Materials at INR 185.13 Cr, representing 88.8% of Revenue from Operations. Employee Cost: INR 4.23 Cr (2.0% of revenue). Other Cost: INR 4.97 Cr (2.4% of revenue). Total Expenditure: INR 194.33 Cr (93.3% of revenue). * H1 FY26: Raw Materials at INR 312.70 Cr (88.5% of revenue). Employee Cost: INR 7.31 Cr (2.1% of revenue). Other Cost: INR 10.11 Cr (2.9% of revenue). Total Expenditure: INR 330.12 Cr (93.5% of revenue). * **Active Clothing Co. Limited:** Raw materials are also the primary cost. * Q2 FY26: Raw material at INR 57.87 Cr (70.0% of Net Sales). Employee Benefit Expenses: INR 14.63 Cr (17.7% of Net Sales). Other Expenses: INR 3.30 Cr (4.0% of Net Sales). Total Expenditure: INR 75.80 Cr (91.6% of Net Sales). * H1 FY26: Raw material at INR 100.20 Cr (68.1% of Net Sales). Employee Benefit Expenses: INR 27.02 Cr (18.4% of Net Sales). Other Expenses: INR 6.09 Cr (4.1% of Net Sales). Total Expenditure: INR 133.30 Cr (90.5% of Net Sales).

**Observation:** Raw material costs are extremely high for Saraswati (around 88-89% of revenue), indicating a low value-add model where the company primarily acts as a distributor. For Active Clothing, raw materials are around 68-70% of net sales, with employee costs being the second significant component (17-18%), reflecting its manufacturing nature. Vardhman, being vertically integrated, likely has a more diversified cost structure but raw materials would still be dominant. The high proportion of raw material costs makes profitability highly sensitive to commodity price fluctuations.

Supply Chain Structure and Dependencies

• **Vardhman Textiles:** As a vertically integrated player, it controls much of its supply chain from yarn production onwards, reducing external dependencies for intermediate products.
• **Saraswati Saree Depot Limited:** Relies on a broad network of suppliers, sourcing from "over 900 weavers/suppliers across major Indian hubs." This diversified supplier base mitigates concentration risk, as "Top 10 suppliers account for less than 26% of total purchases." The new purchase office in Surat aims to "reduce COGS" by optimizing procurement.
• **Active Clothing Co. Limited:** Emphasizes "Backward Integration" with in-house capabilities in printing, garment dyeing, dip dyeing, and specialized washes. This reduces reliance on external vendors for these processes, enhancing control over quality and lead times. Its "design-to-shelf" model also implies close collaboration with raw material suppliers and logistics partners.

Technology Landscape and Innovation Pace

• **Active Clothing Co. Limited:** Is a frontrunner in technology adoption.
• **Vardhman Textiles Limited:** While not explicitly detailing specific technologies, its "Sustainability Goals" (decouple growth from energy, minimise emissions, enhance traceability) imply investment in efficient and environmentally friendly technologies across its manufacturing processes.
• **Saraswati Saree Depot Limited:** Focuses more on operational efficiencies in procurement, inventory handling, and store operations, rather than manufacturing technology. Its product catalogue with "more than 300,000 different SKUs" suggests robust inventory management systems.

**Observation:** Active Clothing is clearly investing heavily in cutting-edge manufacturing technology to gain a competitive edge in efficiency, sustainability, and product innovation. This positions it well for future growth in premium and high-fashion segments.

Operational Efficiency Benchmarks

• **Saraswati Saree Depot Limited:**
• **Active Clothing Co. Limited:** Its 75% utilization rate across manufacturing capacities is a good benchmark for operational efficiency. The "Knit to Shape" factory aims for "zero-waste production," which would be a significant efficiency gain.

Key Performance Indicators (Company-specific and Industry Averages)

• **Vardhman Textiles:**
• **Saraswati Saree Depot Limited:**
• **Active Clothing Co. Limited:**

Asset Efficiency Metrics

• **Vardhman Textiles:** Total Assets grew from INR 10,576 Cr in FY22 to INR 11,900 Cr in FY25 and INR 12,615 Cr in 1H26. Its ROCE and ROE (FY25: 11% and 9% respectively) indicate moderate asset efficiency, typical for a large, capital-intensive manufacturer.
• **Saraswati Saree Depot Limited:** Total Assets grew from INR 205.94 Cr (Mar'24) to INR 379.46 Cr (Sept'25). Its exceptionally high ROCE and ROE (FY25: 28% and 25% respectively) suggest very high asset efficiency, likely due to its asset-light wholesale model compared to manufacturing, though these ratios are normalizing as its capital base expands.
• **Active Clothing Co. Limited:** Total Assets grew from INR 178.19 Cr (FY23) to INR 279.11 Cr (FY25). Its ROCE and ROE (FY25: 10.93% and 10.92% respectively) show improving asset efficiency as the company scales.

**Observation:** Saraswati's business model appears to be the most asset-efficient in terms of generating returns on capital, though its cash conversion cycle needs attention. Active Clothing is improving its asset efficiency as it grows, while Vardhman maintains a steady, moderate efficiency reflective of its large-scale, capital-intensive operations.

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E. GROWTH DYNAMICS & DRIVERS

The Indian textile sector is poised for substantial growth, fueled by a combination of domestic demand, export opportunities, evolving consumer preferences, and strategic initiatives by companies.

Historical Growth Trajectory (3-5 year view with specific rates)

• **Vardhman Textiles Limited:**
• **Saraswati Saree Depot Limited:**
• **Active Clothing Co. Limited:**

Current Growth Rates and Acceleration/Deceleration

• **Vardhman:** Q2 FY26 Total Income: INR 2,468 Cr (YoY -4%, QoQ 2%). H1 FY26 Total Income: INR 4,882 Cr (YoY -0.4%). Currently experiencing slight deceleration or contraction.
• **Saraswati:** Q2 FY26 Revenue from Operations: INR 208.39 Cr (26.5% YoY growth). H1 FY26 Revenue from Operations: INR 353.16 Cr (19.67% YoY growth). Shows significant acceleration in current periods.
• **Active Clothing:** Q2 FY26 Total Income: INR 83.19 Cr (1.93% YoY growth). H1 FY26 Total Income: INR 147.66 Cr (15.22% YoY growth). While H1 growth is healthy, Q2 growth was modest, indicating some quarterly variability.

Volume vs Price Contribution to Growth

• **Saraswati Saree Depot:** Mentions "Continued focus on volume growth" as a driver. Its "Number of Units Sold" increased from 15.71 million in FY23 to 16.51 million in FY25, and 8.41 million in H1 FY26. The "Avg Net Sales per customer" also increased from Rs. 3,79,856 in FY22 to Rs. 4,51,153 in FY25, suggesting both volume and value (price/mix) are contributing to growth.
• **Active Clothing:** Its expansion into "ultra-premium brands" and "high-fashion streetwear" suggests a focus on higher-value products, implying a significant price/mix contribution alongside volume growth from capacity expansion.
• **Vardhman:** Not explicitly stated, but as a yarn producer, volume would be a primary driver, though product mix and efficiency gains could also contribute to value.

Organic vs Inorganic Growth Components

All companies primarily discuss organic growth initiatives: * **Vardhman:** Growth through operational efficiencies, sustainability, and market reach. * **Saraswati:** Expanding product portfolio (men's ethnic wear), customer engagement, new retail outlets, new purchase offices. * **Active Clothing:** Capacity expansion (Knit to Shape factory), product portfolio diversification (soft wovens, athleisure), dealer network expansion, strengthening brand partnerships. No explicit inorganic growth (M&A) is mentioned.

Geographic Expansion Opportunities and Progress

• **Vardhman:** Already has a global footprint across 75+ countries, indicating ongoing efforts to deepen penetration and explore new markets.
• **Saraswati:** Currently concentrated in West (81.4%) and South (18.0%) India. Significant opportunity to expand into North and East India, which currently contribute negligibly (0.2% and 0.0% respectively).
• **Active Clothing:** Currently exports to 30+ countries. Management aims to unlock a ₹500 Cr growth opportunity across 110+ countries with Levi's, indicating ambitious global expansion plans. Its regional market share in North America (38.46%) suggests a strong base for further international growth.

Product/Service Innovation Pipeline

• **Saraswati:**
• **Active Clothing:**
• **Vardhman:** Focus on sustainability goals implies innovation in processes and materials to reduce environmental impact.

Adjacent Market Opportunities

• **Saraswati:** Men's ethnic wear category.
• **Active Clothing:** Diversifying into "FMCG distribution" as a future direction, indicating a move beyond core apparel manufacturing.

Customer Acquisition and Penetration Trends

• **Saraswati:** Maintained a stable and growing customer base, from 13,263 in FY23 to 13,601 in FY25, and 9,924 in H1 FY26. The company serves over 13,000 unique customers, with low concentration risk.
• **Active Clothing:** Plans to increase its dealer base from 200 to 300, indicating a focus on expanding its distribution network for domestic brands. Its long-term partnerships with global brands like Levis (22 years) demonstrate strong customer retention and potential for deeper penetration within existing client portfolios.

Industry Growth Drivers

The textile sector's growth is propelled by several macro and micro factors: * **Healthy Traction in Utsav Segment:** Saraswati notes this, indicating seasonal demand boosts. * **Early Onset of Festive Season:** Diwali in October 2025 provided a boost to demand for Saraswati, highlighting the importance of cultural events. * **Continued Focus on Volume Growth:** Companies are actively pursuing higher sales volumes. * **Organized Segment Growth:** The shift from unorganized to organized players, particularly in segments like sarees (9-10% CAGR), drives growth for structured businesses. * **Long-Term Industry Outlook:** Projected 5-6% CAGR for the saree industry and 10% CAGR for the overall Indian textiles and apparel market to 2030. * **Consumer Trends:** * **Growing Preference for Higher-Quality, Premium Products:** Drives value growth and benefits players focusing on quality. * **Online Retail:** Increasing penetration of e-commerce platforms. * **Disposable Income:** Rising income levels in India fuel consumption. * **Sustainability:** Growing consumer awareness and demand for eco-friendly products. * **Athleisure Trend:** Blurring lines between activewear and casual wear creates new market segments. * **Minimalist and Gender-Inclusive Designs:** Evolving fashion preferences. * **Technology Integration:** Adoption of advanced manufacturing, AI-driven design, and smart factories improves efficiency and product offerings. * **Government Policies and Support:** Initiatives aimed at boosting textile production and exports (e.g., target of US$250 billion production and US$100 billion exports). * **Global Market Position:** India's strong standing as a textile producer and exporter provides a foundation for continued international growth.

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F. RISK LANDSCAPE

The textile sector, despite its growth potential, is exposed to a range of risks, from macroeconomic fluctuations to specific operational and competitive challenges.

Industry-Wide Systematic Risks

• **Cyclicality and Economic Sensitivity:** The textile industry is inherently cyclical, highly sensitive to economic downturns, changes in consumer discretionary spending, and global trade dynamics. Vardhman's fluctuating revenues and margins (e.g., EBITDA margin drop from 27% in FY22 to 13% in FY24) highlight this sensitivity.
• **Raw Material Price Volatility:** All companies, especially those with high raw material costs (Saraswati at 88-89% of revenue, Active Clothing at 68-70%), are vulnerable to fluctuations in prices of cotton, synthetic fibers, and other inputs. This can significantly impact gross margins if price increases cannot be fully passed on to customers, as suggested by the Q2 FY26 margin contractions across all three companies.
• **Global Economic Slowdowns:** As a significant exporter (Vardhman to 75+ countries, Active Clothing to 30+ countries), the Indian textile sector is susceptible to slowdowns in key export markets like the US and EU (which account for 47% of India's textile exports).
• **Currency Fluctuations:** For export-oriented businesses, adverse currency movements can impact profitability.

Regulatory and Policy Risks by Geography

• **Trade Policies and Tariffs:** Changes in international trade agreements, tariffs, or non-tariff barriers can affect export competitiveness.
• **Environmental Regulations:** Increasing global and domestic environmental regulations (e.g., ZDHC MRSL compliance for Vardhman) require significant investment and compliance costs. Failure to comply can lead to penalties or market access restrictions.
• **Labor Laws:** The textile industry is labor-intensive, and changes in labor laws or minimum wage policies can impact employee costs.

Technology Disruption Threats

• **Rapid Technological Advancements:** While companies like Active Clothing are embracing technology, those slower to adopt new manufacturing processes (e.g., 3D seamless knitting, automation) or digital tools (AI-driven design, online retail platforms) risk falling behind in efficiency, cost-effectiveness, and product innovation.
• **Changing Production Methods:** The shift towards "knit to shape" or other advanced manufacturing techniques could disrupt traditional textile production models.

ESG and Sustainability Challenges

• **Environmental Impact:** The textile industry is known for its high water consumption, energy usage, and waste generation. Companies face increasing pressure from consumers, regulators, and investors to adopt sustainable practices.
• **Compliance Costs:** Achieving ambitious goals like Net Zero Emissions by 2045 (Vardhman) or 100% ZHDC MRSL Compliance by FY 2030 requires substantial investment in cleaner technologies and processes.
• **Reputational Risk:** Failure to address ESG concerns can lead to negative brand perception and impact sales, especially in environmentally conscious markets.
• **Traceability:** Enhancing traceability of raw materials (Vardhman's goal) is complex but crucial for sustainable sourcing.

Supply Chain Vulnerabilities

• **Supplier Concentration:** While Saraswati has a diversified supplier base (top 10 suppliers < 26% of purchases), reliance on a large number of small weavers/suppliers can introduce quality control or consistency challenges.
• **Logistics and Infrastructure:** Efficient movement of raw materials and finished goods is critical. Disruptions in transportation or port operations can impact lead times and costs.
• **Geopolitical Risks:** Global supply chains are vulnerable to geopolitical tensions, trade wars, or regional conflicts.

Competitive Threats (New Entrants, Substitutes)

• **Intense Competition:** The fragmented nature of the Indian textile market, coupled with the rise of organized players, leads to fierce competition, putting pressure on pricing and margins.
• **Fast Fashion:** The rapid pace of fashion cycles demands quick response times and efficient inventory management. Companies unable to adapt risk inventory obsolescence.
• **Brand Proliferation:** A growing number of domestic and international brands vying for consumer attention.
• **Online Retailers:** The rise of e-commerce platforms and direct-to-consumer brands can bypass traditional distribution channels, posing a threat to wholesalers like Saraswati if they don't adapt.

Customer Concentration Risks

• **Saraswati Saree Depot:** Mitigates this risk effectively, with its "Top 10 customers contribute to less than 8% of total sales."
• **Active Clothing Co.:** While it has a long-standing partnership with Levis, it also serves other brands and is expanding its dealer network, diversifying its customer base. However, a significant portion of revenue from a single large client always carries some inherent risk.

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G. CAPITAL ALLOCATION & INVESTOR RETURNS

Capital allocation strategies are crucial for sustainable growth and shareholder value creation in the capital-intensive textile industry. Companies deploy capital for capacity expansion, technological upgrades, working capital management, and debt reduction.

Capex Trends and Requirements (Growth vs. Maintenance)

• **Vardhman Textiles Limited:** Shows consistent and increasing depreciation (INR 113 Cr in Q2 FY26 vs INR 99 Cr in Q2 FY25; INR 222 Cr in H1 FY26 vs INR 195 Cr in H1 FY25), indicating ongoing capital expenditure for both maintenance and growth. The increase in long-term borrowings from INR 749 Cr in FY25 to INR 1,225 Cr in 1H26 further suggests significant recent investments, likely for capacity expansion or modernization.
• **Saraswati Saree Depot Limited:** Has undertaken strategic capex for market expansion and operational efficiency. This includes the launch of its first exclusive retail outlet in Kolhapur (2025) and the opening of a new 25,000 sq. ft. purchase office in Surat (October 2024). The sharp increase in depreciation (INR 1.42 Cr in Q2 FY26 vs INR 0.23 Cr in Q2 FY25) confirms recent asset additions. Cash from Investing Activities was negative (INR -1.69 Cr) in H1 FY26, indicating capital deployment.
• **Active Clothing Co. Limited:** Is making substantial growth-oriented capital investments. The agreement to purchase 600 advanced machines for India's first "Knit to Shape" Smart Knitting Factory is a major capex initiative aimed at capacity expansion, technological upgrade, and sustainable production. Cash from Investing Activities has been consistently negative (FY23: -17.43 Cr, FY24: -19.45 Cr, FY25: -10.57 Cr), reflecting continuous investment in its manufacturing infrastructure and capabilities.

**Observation:** All three companies are actively investing in their future, with Active Clothing making the most significant growth-oriented capex for technological advancement.

R&D Investment Levels as % of Revenue

• Explicit R&D expenditure as a percentage of revenue is not provided for any company.
• However, **Active Clothing**'s "design-to-shelf" service, in-house design capabilities, and investment in AI-driven design (future direction) strongly imply significant investment in product development and innovation, which serves a similar function to R&D in the apparel sector.
• **Vardhman**'s focus on sustainability goals and enhancing traceability suggests investment in process innovation and material science, which could be categorized as R&D.

Dividend Policies and Payout Ratios

No information on dividend policies or payout ratios is provided in the extracted data for any of the companies.

Share Buyback Programs

No information on share buyback programs is provided in the extracted data for any of the companies.

M&A Activity and Strategy

No explicit M&A activity or strategy is mentioned for any of the companies. Their growth strategies appear to be primarily organic, focusing on internal capacity expansion, market penetration, and product diversification.

Cash Generation and Free Cash Flow Profiles

• **Vardhman Textiles Limited:** While specific cash flow from operations is not provided for recent quarters, its Net Debt position fluctuates between net debt and net cash (FY23: -INR 1,131 Cr, FY25: -INR 210 Cr), suggesting periods of strong cash generation that allow for debt reduction or investment. Total Cash and cash equivalents were INR 74 Cr in 1H26.
• **Saraswati Saree Depot Limited:** Cash From Operating Activities has been inconsistent: INR 0.19 Cr (H1 FY26), INR 2.46 Cr (FY25), (INR 8.54) Cr (FY24). This indicates challenges in converting profits into operating cash flow, possibly due to increasing working capital requirements (inventories, receivables) to support growth. Net Cash Flow for H1 FY26 was INR 15.20 Cr, but this includes financing activities.
• **Active Clothing Co. Limited:** Cash from Operation has also been inconsistent: INR 14.25 Cr (FY23), INR 20.77 Cr (FY24), (INR 10.37) Cr (FY25). Negative operating cash flow in FY25, coupled with significant investing activities, resulted in a Net Cash Flow of (INR 0.08) Cr in FY25. This suggests that rapid growth and capital investments are currently consuming a significant portion of internally generated cash.

**Observation:** Both Saraswati and Active Clothing show signs of cash flow strain from operations, which is common for growing companies requiring substantial working capital and capital expenditure. Vardhman, with its larger scale and maturity, appears to have more robust cash generation capabilities.

Capital Efficiency Improvements

• **Vardhman:** ROCE and ROE recovered slightly in FY25 (11% and 9% respectively) after a dip, indicating efforts to improve capital efficiency.
• **Saraswati:** While its ROCE and ROE are exceptionally high, they have been declining (ROCE from 98% in FY23 to 24% in H1 FY26, ROE from 96% to 18%). This is likely due to the expansion of its capital base (Shareholders Funds grew from INR 64.91 Cr in Mar'24 to INR 188.70 Cr in Sept'25) rather than a fundamental decline in efficiency, as the new capital is deployed for growth. The management is "confident of achieving targeted revenue and ROCE for the Kolhapur store by the end of this financial year," implying a focus on maintaining capital efficiency.
• **Active Clothing:** Shows consistent improvement in ROCE (from 7.14% in FY23 to 10.93% in FY25) and ROE (from 3.51% in FY23 to 10.92% in FY25). This indicates that its capital allocation decisions are yielding better returns over time, and the company is becoming more efficient in utilizing its capital as it scales.

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H. FUTURE OUTLOOK & PROJECTIONS

The future outlook for the Indian textile sector is largely positive, driven by strong domestic demand, export potential, and strategic investments in technology and sustainability. Companies are setting ambitious growth targets and focusing on key trends to capitalize on emerging opportunities.

Industry Growth Projections (with timeframes)

• **Overall Indian Textiles and Apparel Market:** Projected to grow at a 10% CAGR to reach US$350 billion by 2030.
• **Textile Exports:** Expected to reach US$100 billion.
• **Saree Industry:** Projected to grow at a 5-6% CAGR from fiscal 2024 to 2029, reaching Rs. 650-675 billion by fiscal 2029.
• **Organized Saree Segment:** Expected to constitute 32-37% of the market by fiscal 2029 (up from 25-30% currently), growing at 9-10% CAGR.
• **Indian Knitting Industry:** Market pegged at around $9.1 billion, slated to reach about $21.5 billion by 2027 (9% growth).
• **Specific Product Categories (from Active Clothing data):**

Management Guidance Across Companies

• **Saraswati Saree Depot Limited:**
• **Active Clothing Co. Limited:**
• **Vardhman Textiles Limited:** While no explicit forward-looking financial guidance is provided, its strategic initiatives around sustainability (Net Zero by 2045, Net Positive Impact by FY 2050) and leveraging competencies for customer sustainability goals indicate a long-term vision focused on responsible growth and market leadership in sustainable textiles.

Emerging Opportunities and Whitespace

• **Men's Ethnic Wear:** Saraswati's pilot project highlights this as a potential growth area.
• **Athleisure Products:** Active Clothing's expansion into this category taps into a growing global trend.
• **Sustainable and Eco-friendly Textiles:** Strong demand drivers, with companies like Vardhman positioning themselves as leaders.
• **Online Retail and D2C Models:** Continued growth in e-commerce provides opportunities for direct customer engagement and broader reach.
• **Value-added Services:** "Design-to-shelf" solutions (Active Clothing) and comprehensive marketing support create deeper partnerships and higher value capture.
• **Geographic Expansion:** Untapped domestic regions (North/East India for Saraswati) and new international markets (Active Clothing's target of 110+ countries).
• **FMCG Distribution:** Active Clothing's future direction into this adjacent market indicates diversification opportunities.

Transformation Themes and Inflection Points

• **Technology-led Manufacturing:** The adoption of advanced technologies like 3D seamless knitting, automation, and AI-driven design (Active Clothing's "Knit to Shape" factory) is a major transformation, driving efficiency, customization, and sustainability.
• **Sustainability as a Core Strategy:** Moving beyond compliance to making sustainability a competitive advantage (Vardhman's Net Zero goals) is a significant shift.
• **Organized Sector Dominance:** The increasing share of organized players in traditionally unorganized segments (like sarees) is an inflection point for market structure and competitive dynamics.
• **Digitalization of the Value Chain:** From design to sales tracking, digital tools are enhancing efficiency and customer engagement.

Long-Term Structural Trends (5-10 year view)

• **Premiumization and Branding:** Growing consumer preference for higher-quality, branded products will continue to drive market value.
• **Sustainability Imperative:** Environmental and social responsibility will become non-negotiable, influencing sourcing, manufacturing, and consumer choices.
• **Technological Integration:** Automation, AI, and data analytics will become standard across the textile value chain, enhancing productivity and innovation.
• **E-commerce and Omnichannel Retail:** The blend of online and offline retail will become more sophisticated, requiring companies to have robust digital strategies.
• **Diversification and Specialization:** Companies will either become highly specialized in niche, high-value segments or diversify strategically into adjacent markets to mitigate risks and capture new growth.
• **Government Support:** Continued policy support and initiatives (e.g., PLI schemes) are expected to bolster the sector's growth and global competitiveness.

Potential Disruptions on the Horizon

• **Rapid Fashion Cycles:** The "fast fashion" phenomenon can lead to inventory obsolescence and demand quick adaptation.
• **New Materials and Manufacturing Processes:** Breakthroughs in material science (e.g., bio-based fibers, smart textiles) or manufacturing (e.g., on-demand production) could disrupt existing supply chains and product categories.
• **Geopolitical Shifts:** Trade wars, protectionist policies, or supply chain disruptions can significantly impact global textile trade.
• **Changing Consumer Values:** A rapid shift in consumer preferences towards minimalism, circular economy, or ethical consumption could challenge traditional business models.

Expected Margin Evolution

• The Q2 FY26 data shows EBITDA margin contraction for all three companies, suggesting ongoing pressures from input costs or competitive pricing.
• However, Active Clothing's PAT margin improved, indicating effective cost management below the EBITDA line.
• In the long term, companies investing in vertical integration (Vardhman), technological efficiency (Active Clothing), and premiumization (Saraswati, Active Clothing) are better positioned to improve or maintain margins by reducing costs, enhancing value, and gaining pricing power.
• Sustainability initiatives, while initially costly, could lead to long-term cost savings (e.g., energy efficiency, waste reduction) and command a premium in the market.

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I. COMPANY-BY-COMPANY PROFILES

This section provides a detailed profile for each of the three companies, synthesizing their financial performance, strategic direction, operational strengths, and market positioning.

1. Vardhman Textiles Limited

**Company Name and Brief Description:** Vardhman Textiles Limited is India's largest vertically integrated textile manufacturer, with over 60 years of industry experience. It is a leading producer of yarn and fabrics, operating on a global scale with a presence in over 75 countries. The company is known for its extensive manufacturing capabilities, large workforce (25,000+ employees), and a turnover exceeding USD 1 Billion. Vardhman is increasingly focusing on sustainability and ESG initiatives.

**Scale Metrics (Revenue, Capacity, Market Share):** * **Revenue (FY25):** INR 9,955 Crore (Total Income). * **Turnover:** USD 1 Billion+. * **Market Position:** India's Largest Vertically Integrated Textile Manufacturer, Largest Producer of Yarn. * **Global Footprint:** Across 75+ Countries. * **Workforce:** 25,000+ Employees.

**Financial Performance Summary (Growth, Margins, Returns):** * **Revenue Growth:** H1 FY26 Revenue from Operations: INR 4,760 Cr (YoY 1%). Total Income: INR 4,882 Cr (YoY -0.4%). Q2 FY26 Total Income: INR 2,468 Cr (YoY -4%, QoQ 2%). Annual Total Income has fluctuated: FY22: INR 9,771 Cr; FY23: INR 10,034 Cr; FY24: INR 9,632 Cr; FY25: INR 9,955 Cr. * **Profitability (EBITDA & PAT Margins):** * **EBITDA Margin:** FY25: 16%. H1 FY26: 16.0% (YoY -100 bps). Q2 FY26: 15.5% (YoY -110 bps, QoQ -100 bps). * **PAT Margin:** FY25: 9%. H1 FY26: 8.0% (YoY -110 bps). Q2 FY26: 7.7% (YoY -90 bps, QoQ -70 bps). * Margins have shown contraction in Q2 and H1 FY26, indicating recent pressures. Historically, margins have varied significantly (EBITDA FY22: 27%, FY24: 13%). * **Returns (ROCE & ROE):** * **ROCE:** FY25: 11% (recovered from 8% in FY24). * **ROE:** FY25: 9% (recovered from 7% in FY24). * Return ratios have shown recovery in FY25 after a dip in FY23-FY24. * **Balance Sheet:** Strong Shareholders Funds (INR 9,832 Cr in 1H26). Total Borrowings INR 1,478 Cr in 1H26 (up from INR 1,238 Cr in FY25). Net Debt was INR 78 Cr in 1H26, fluctuating between net debt and net cash historically. Significant investments (INR 1,326 Cr in 1H26).

**Strategic Priorities and Focus Areas:** * **Sustainability Goals:** Reduce fresh water consumption, decouple growth from energy, minimise emissions, minimise waste, enhance traceability of raw materials, improve work conditions, empower marginalised, eliminate hazardous chemicals, leverage competencies for customer sustainability goals. * **ESG Vision:** Achieve Net Zero Emissions by 2045, Attain Net Positive Impact by FY 2050, 100% ZHDC MRSL Compliance by FY 2030, ZERO Fatalities & occupational diseases, 50% Reduction in waste sent to landfill by 2030. * **Sustainable Sourcing:** 29% of inputs sourced sustainably in FY24.

**Competitive Advantages and Positioning:** * **Scale and Vertical Integration:** Dominant position in yarn and integrated textile manufacturing provides cost efficiencies and quality control. * **Global Reach:** Extensive international presence diversifies market risk and provides access to diverse customer bases. * **Strong Financials:** Robust balance sheet and net worth provide resilience and capacity for investment. * **Sustainability Leadership:** Proactive and ambitious ESG goals position it as a responsible and future-ready player in a market increasingly valuing sustainability.

**Key Metrics and KPIs specific to the company:** * Total Income, EBITDA Margin, PAT Margin, ROCE, ROE, Net Debt, Shareholders Funds, Sustainable Sourcing % (29% in FY24).

**Management Outlook and Guidance:** * No explicit forward-looking financial guidance provided in the extracted data. However, the strong focus on ESG and sustainability indicates a long-term strategic vision for sustainable growth and market leadership.

**Recent Developments and Initiatives:** * Continued investment in operations as indicated by increasing depreciation and borrowings. * Ongoing progress towards ambitious ESG targets.

2. Saraswati Saree Depot Limited

**Company Name and Brief Description:** Saraswati Saree Depot Limited is one of India's leading organized saree wholesalers, with a 50-year legacy in the B2B and wholesale segment of traditional women's apparel. The company is a major player in the country's saree market, serving over 13,000 unique customers and sourcing from over 900 weavers/suppliers across India. It is strategically expanding its product portfolio and venturing into the retail segment.

**Scale Metrics (Revenue, Capacity, Market Share):** * **Revenue (FY25):** INR 613.61 Crore (Revenues). * **Market Position:** One of India's leading organized saree wholesalers, leading player in the B2B segment. Major Organized Player in the country's saree market. * **Customer Base:** Over 13,000 unique customers in FY24. * **Supplier Base:** Sources from over 900 weavers/suppliers. * **Total Area Spread:** 235,000+ sq ft across Kolhapur, Ulhasnagar & Ahmednagar. * **Product Catalogue:** More than 300,000 different SKUs.

**Financial Performance Summary (Growth, Margins, Returns):** * **Revenue Growth:** H1 FY26 Revenue from Operations: INR 353.16 Cr (19.67% YoY growth). Q2 FY26 Revenue from Operations: INR 208.39 Cr (26.5% YoY growth). Annual Revenues grew consistently from FY22 (INR 550.31 Cr) to FY25 (INR 613.61 Cr), with significant acceleration in H1 FY26. * **Profitability (EBITDA & PAT Margins):** * **EBITDA Margin:** FY25: 6.87%. H1 FY26: 6.52% (YoY -0.31%). Q2 FY26: 6.75% (YoY -0.73%). * **PAT Margin:** FY25: 4.98%. H1 FY26: 4.77% (YoY -0.54%). Q2 FY26: 5.04% (YoY -0.77%). * Margins have shown slight contraction in Q2 and H1 FY26 despite strong revenue growth, indicating cost pressures. * **Returns (ROCE & ROE):** * **ROCE:** FY25: 28% (declined from 98% in FY23). H1 FY26 (annualized): 24%. * **ROE:** FY25: 25% (declined from 96% in FY23). H1 FY26 (annualized): 18%. * Return ratios are exceptionally high but have been declining as the capital base expands, suggesting normalization. * **Balance Sheet:** Shareholders Funds grew significantly from INR 64.91 Cr (Mar'24) to INR 188.70 Cr (Sept'25). Debt/Equity is 0 (FY25, H1 FY26), indicating a debt-free status. Inventories and Trade Receivables have increased substantially to support growth. * **Cash Flow:** Cash From Operating Activities has been inconsistent (negative in FY24, low positive in FY25/H1 FY26), suggesting working capital intensity.

**Strategic Priorities and Focus Areas:** * **Product Portfolio Expansion:** Pilot project in men's ethnic wear. * **Market Diversification:** Entered the retail segment with its first exclusive outlet in Kolhapur (2025). * **Operational Efficiency:** Opened a new purchase office in Surat (25,000 sq. ft.) in October 2024 to reduce COGS. Driving efficiencies across procurement, inventory handling, and store operations. * **Profitable Scale-up:** Focused on strengthening the supply chain and investing in capabilities for long-term growth.

**Competitive Advantages and Positioning:** * **Legacy and Expertise:** 50-year legacy and deep understanding of the traditional women's apparel market. * **Extensive Network:** Strong B2B customer base (13,000+) and diversified supplier network (900+ weavers). * **Regional Dominance:** Strong market presence in West and South India, particularly Kolhapur. * **Debt-Free Status:** Provides financial flexibility. * **Agile Diversification:** Strategic entry into new product categories and retail segment.

**Key Metrics and KPIs specific to the company:** * Number of Units Sold, Total Number of Customers, Avg Net Sales per customer, Net Sales per sq.ft. area in use, Item Wise Revenue (Sarees 90.2%), Zone Wise Revenue (West 81.4%), Store Wise Revenue (Kolhapur 90.52%).

**Management Outlook and Guidance:** * "Confident of achieving targeted revenue and ROCE for the Kolhapur store by the end of this financial year." * "Focused on profitable scale-up, strengthening the supply chain, and investing in capabilities to support long-term growth." * "Expect to gain meaningful insights over the next six months regarding the men's ethnic wear pilot project."

**Recent Developments and Initiatives:** * Launch of first retail outlet in Kolhapur (2025). * Opening of new purchase office in Surat (Oct 2024). * Pilot project in men's ethnic wear.

3. Active Clothing Co. Limited

**Company Name and Brief Description:** Active Clothing Co. Limited, based in Mohali, Punjab, is an integrated apparel manufacturer specializing in flat-knitted sweaters, jackets, and circular-knitted t-shirts. The company provides "design-to-shelf" services and end-to-end solutions for global fashion brands, catering to high-fashion streetwear and ultra-premium segments. With over 25 years of experience, it exports to 30+ countries and is a key partner for brands like Levis and Arvind Lifestyle.

**Scale Metrics (Revenue, Capacity, Market Share):** * **Revenue (FY25):** INR 296.15 Cr (Revenues). * **Market Position:** India's one of the leading Integrated Design-to-retail Apparel Company. Preferred partner for high-fashion streetwear and D2C brands. Largest Levis marketing partner for Chandigarh, Punjab, J&K, Himachal Pradesh. * **Workforce:** 2,300+ Total Workforce. * **Export Countries:** 30+. * **MBOs:** 200+ Number Of MBOs. * **Total Production Area:** 230,000 Sq. Ft. * **Overall Annual Apparel Capacity:** 4,650,000 units. * **Utilization (FY25):** Approx 75% across Sweaters, Jackets, T-Shirts, Shoe Uppers.

**Financial Performance Summary (Growth, Margins, Returns):** * **Revenue Growth:** H1 FY26 Total Income: INR 147.66 Cr (15.22% YoY growth). Q2 FY26 Total Income: INR 83.19 Cr (1.93% YoY growth). Annual Revenues grew strongly from FY23 (INR 200.49 Cr) to FY25 (INR 296.15 Cr), with a significant 39.5% YoY growth in FY25. * **Profitability (EBITDA & PAT Margins):** * **EBITDA Margin:** FY25: 9.95%. H1 FY26: 9.72% (YoY -1.11%). Q2 FY26: 8.88% (YoY -1.18%). * **PAT Margin:** FY25: 2.84%. H1 FY26: 3.34% (YoY 0.47%). Q2 FY26: 3.36% (YoY 0.34%). * EBITDA margins have contracted in Q2 and H1 FY26, but PAT margins have shown improvement, indicating effective cost management below the EBITDA line. * **Returns (ROCE & ROE):** * **ROCE:** FY25: 10.93% (improved from 7.14% in FY23). * **ROE:** FY25: 10.92% (improved from 3.51% in FY23). * Return ratios have shown consistent improvement, reflecting increasing capital efficiency. * **Balance Sheet:** Net Worth: INR 77.38 Cr (FY25). Debt To Equity: 1.53 (FY25), indicating higher leverage. Total Assets: INR 279.11 Cr (FY25). * **Cash Flow:** Cash from Operation was negative in FY25 (INR -10.37 Cr), and Cash from Investments consistently negative, reflecting significant capital expenditure for growth.

**Strategic Priorities and Focus Areas:** * **Technological Advancement:** Establishing India's first "Knit to Shape" Smart Knitting Factory with 600 advanced machines (3D seamless knitting, automation, zero-waste production). * **Product Portfolio Diversification:** Expanded into soft wovens, knitted beanies and gloves, soft-knitted toys, athleisure products. * **Backward Integration:** In-house capabilities in printing, garment dyeing, dip dyeing, specialized washes. * **Market Expansion:** Increasing dealer base from 200 to 300. Global expansion with Levi's to 110+ countries. * **Value-Added Services:** Providing "design-to-shelf" service and marketing solutions (Real-Time Sales Tracking, Market Research). * **Sustainability:** Installed roof top solar panel (500 KW, 50% of demand). * **Future Direction:** Diversified Product Portfolio (FMCG distribution), Infrastructure Expansion, Tech-Enabled Ecosystem (AI-driven design, smart manufacturing).

**Competitive Advantages and Positioning:** * **Technological Leadership:** Pioneering advanced knitting technology for efficiency, customization, and sustainability. * **Integrated Solutions:** "Design-to-shelf" model offers comprehensive value to global brands. * **Strong Brand Partnerships:** Long-standing relationships with premium international and domestic brands. * **Product Innovation:** Continuous expansion into high-growth and niche product categories. * **Operational Excellence:** Healthy utilization rates and backward integration.

**Key Metrics and KPIs specific to the company:** * Overall Annual Apparel Capacity (4.65M units), Utilization Rates (approx 75%), Regional Market Share (North America 38.46%), Number of MBOs (200+), Levi's partnership revenue.

**Management Outlook and Guidance:** * **Revenue Targets:** Aiming for ₹500 Cr revenue in 3 years and ₹1,000 Cr revenue in 5 years. * **Levi's Portfolio:** Scaling to ₹100 Cr, unlocking ₹500 Cr growth opportunity across 110+ countries. * **Dealer Network:** Increasing from 200 to 300. * **Strategic Focus:** "Committed to delivering sustained value... Focused on enhancing efficiency, deepening customer relationships and driving technology-led improvements across operations."

**Recent Developments and Initiatives:** * Agreement for "Knit to Shape" Smart Knitting Factory. * Expanded product portfolio and backward integration units (2024). * Strengthened leadership team.

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J. TABLES

Here are the key financial and operational tables extracted from the provided documents, organized for clarity and comprehensive reference.

1. Vardhman Textiles Limited - Financial Metrics

**Q2 FY26 Standalone vs Q2 FY25 Standalone vs Q1 FY26 Standalone**

| Metric | Q2 FY26 (INR Cr) | Q2 FY25 (INR Cr) | Q1 FY26 (INR Cr) | YoY Change (Q2 FY26 vs Q2 FY25) | QoQ Change (Q2 FY26 vs Q1 FY26) | | :---------------------- | :--------------- | :--------------- | :--------------- | :------------------------------ | :------------------------------ | | Revenue from Operations | 2417 | 2455 | 2342 | -1.5% | 3.2% | | Other Income | 51 | 110 | 72 | -53.6% | -29.2% | | **Total Income** | **2468** | **2565** | **2414** | **-4%** | **2%** | | Total Expenditure | 2085 | 2140 | 2017 | -2.6% | 3.4% | | **Total EBITDA** | **383** | **425** | **397** | **-10%** | **-4%** | | **EBITDA Margin (%)** | **15.5%** | **16.6%** | **16.5%** | **-110 bps** | **-100 bps** | | Depreciation | 113 | 99 | 109 | 14.1% | 3.7% | | Interest / Finance Cost | 21 | 18 | 22 | 16.7% | -4.5% | | **PBT** | **249** | **309** | **266** | **-19%** | **-6%** | | Tax | 60 | 89 | 64 | -32.6% | -6.3% | | **PAT** | **189** | **220** | **202** | **-14%** | **-6%** | | **PAT Margin (%)** | **7.7%** | **8.6%** | **8.4%** | **-90 bps** | **-70 bps** | | EPS (INR) | 6.55 | 7.59 | 6.97 | -13.7% | -6.0% |

**H1 FY26 Standalone vs H1 FY25 Standalone**

| Metric | H1 FY26 (INR Cr) | H1 FY25 (INR Cr) | YoY Change (H1 FY26 vs H1 FY25) | | :---------------------- | :--------------- | :--------------- | :------------------------------ | | Revenue from Operations | 4760 | 4725 | 1% | | Other Income | 122 | 175 | -30.3% | | **Total Income** | **4882** | **4900** | **-0.4%** | | Total Expenditure | 4102 | 4066 | 0.9% | | **Total EBITDA** | **780** | **834** | **-6%** | | **EBITDA Margin (%)** | **16.0%** | **17.0%** | **-100 bps** | | Depreciation | 222 | 195 | 13.8% | | Interest / Finance Cost | 43 | 35 | 22.9% | | **PBT** | **515** | **604** | **-15%** | | Tax | 124 | 157 | -21.0% | | **PAT** | **391** | **447** | **-12%** | | **PAT Margin (%)** | **8.0%** | **9.1%** | **-110 bps** | | EPS (INR) | 13.52 | 15.44 | -12.4% |

**Historical Standalone Financials (FY22-FY25)**

| Metric (INR Crore) | FY22 | FY23 | FY24 | FY25 | | :----------------- | :---- | :---- | :---- | :---- | | Total Income | 9,771 | 10,034 | 9,632 | 9,955 | | Total EBITDA | 2,647 | 1,478 | 1,292 | 1,625 | | EBITDA Margin (%) | 27% | 15% | 13% | 16% | | PAT | 1,677 | 749 | 608 | 879 | | PAT Margin (%) | 17% | 7% | 6% | 9% | | Net Worth | 7,539 | 8,294 | 8,805 | 9,578 |

**Key Financial Ratios (FY22-FY25)**

| Ratio | FY22 | FY23 | FY24 | FY25 | | :-------------------- | :--- | :--- | :--- | :--- | | Return on Capital Employed (ROCE) | 24% | 11% | 8% | 11% | | Return on Equity (ROE) | 22% | 9% | 7% | 9% | | Total Debt / Equity | 0.26 | 0.20 | 0.20 | 0.13 | | Net Debt / Equity | 0.04 | -0.14 | 0.05 | -0.02 |

**Standalone Balance Sheet Highlights (FY22-1H26)**

| Metric (INR Cr) | FY22 | FY23 | FY24 | FY25 | 1H26 | | :------------------------ | :---- | :---- | :---- | :---- | :---- | | Shareholders Funds | 7,539 | 8,294 | 8,805 | 9,578 | 9,832 | | Long-term borrowings | 921 | 931 | 413 | 749 | 1,225 | | Short-term borrowings | 1,059 | 746 | 1,377 | 489 | 253 | | **Total Borrowings** | **1,980** | **1,677** | **1,790** | **1,238** | **1,478** | | Total Cash & cash equivalents | 116 | 370 | 84 | 85 | 74 | | Investments (Excl. Group) | 1,576 | 2,438 | 1,282 | 1,363 | 1,326 | | **Net Debt** | **288** | **(1,131)** | **424** | **(210)** | **78** | | **TOTAL ASSETS** | **10,576** | **10,861** | **11,487** | **11,900** | **12,615** |

**Shareholding Pattern (September 2025)**

| Category | Percentage | | :--------------- | :--------- | | Promoter Group | 64.21% | | Institutional | 22.18% | | Public | 13.61% |

**Top Institutional Shareholders (September 2025)**

| Institution | Percentage | | :------------------ | :--------- | | HDFC Mutual Fund | 7.48% | | DSP Mutual Fund | 3.04% | | Nippon Life India | 2.98% |

2. Saraswati Saree Depot Limited - Financial Metrics

**Q2 FY26 vs Q2 FY25 vs Q1 FY26**

| Metric (₹ crore) | Q2 FY26 | Q2 FY25 | Q1 FY26 | YoY Growth (Q2 FY26 vs Q2 FY25) | | :------------------------ | :------- | :------- | :------- | :------------------------------ | | Revenue from Operations | 208.39 | 164.75 | 144.77 | 26.5% | | Other Income | 1.29 | 0.75 | 0.89 | 72.0% | | **Total Operational Revenue** | **209.68** | **165.50** | **145.66** | **26.69%** | | Raw Materials | 185.13 | 144.71 | 127.57 | 28.07% | | Employee Cost | 4.23 | 2.64 | 3.08 | 60.23% | | Other Cost | 4.97 | 5.08 | 5.14 | -2.00% | | Total Expenditure | 194.33 | 152.43 | 135.79 | 27.48% | | **EBITDA (excl. Other Income)** | **14.06** | **12.32** | **8.98** | **14.10%** | | **EBITDA Margin (%)** | **6.75%** | **7.48%** | **6.20%** | **-0.73%** | | Depreciation | 1.42 | 0.23 | 1.27 | 517.39% | | Interest | 0.28 | 0.40 | 0.26 | -30.00% | | Income from Associates | 0.34 | 0.27 | 0.26 | 25.93% | | **PBT** | **14.00** | **12.72** | **8.59** | **10.04%** | | Tax | 3.48 | 3.15 | 2.24 | 10.48% | | **PAT** | **10.51** | **9.57** | **6.35** | **9.88%** | | **PAT Margin (%)** | **5.04%** | **5.81%** | **4.39%** | **-0.77%** | | Basic EPS (₹) | 2.65 | 2.42 | 1.60 | 9.50% |

**H1 FY26 vs H1 FY25**

| Metric (₹ crore) | H1 FY26 | H1 FY25 | YoY Growth (H1 FY26 vs H1 FY25) | | :------------------------ | :------- | :------- | :------------------------------ | | Revenue from Operations | 353.16 | 295.12 | 19.67% | | Other Income | 2.18 | 1.47 | 48.30% | | **Total Operational Revenue** | **355.34** | **296.59** | **19.81%** | | Raw Materials | 312.70 | 258.96 | 20.75% | | Employee Cost | 7.31 | 5.34 | 36.89% | | Other Cost | 10.11 | 10.66 | -5.00% | | Total Expenditure | 330.12 | 274.96 | 20.06% | | **EBITDA (excl. Other Income)** | **23.04** | **20.17** | **14.24%** | | **EBITDA Margin (%)** | **6.52%** | **6.83%** | **-0.31%** | | Depreciation | 2.69 | 0.43 | 525.58% | | Interest | 0.54 | 1.05 | -48.57% | | Income from Associates | 0.60 | 0.41 | 46.34% | | **PBT** | **22.58** | **20.57** | **9.82%** | | Tax | 5.72 | 4.90 | 16.73% | | **PAT** | **16.86** | **15.67** | **7.62%** | | **PAT Margin (%)** | **4.77%** | **5.31%** | **-0.54%** | | Basic EPS (₹) | 4.25 | 3.96 | 7.32% |

**Annual Financials (FY22, FY23, FY24, FY25)**

| Metric (Rs. Crore) | FY22 | FY23 | FY24 | FY25 | | :-------------------------- | :----- | :----- | :----- | :----- | | Revenues | 550.31 | 603.52 | 612.58 | 613.61 | | EBITDA (excl. Other Income) | 21.58 | 35.68 | 42.10 | 42.15 | | EBITDA Margin (%) | - | - | 6.62% | 6.87% | | PAT | 12.31 | 22.97 | 29.53 | 30.57 | | PAT Margin (%) | - | - | 4.83% | 4.98% | | EPS (Rs.) | - | - | 8.92 | 7.72 |

**Key Ratios (Annualized for H1 FY26)**

| Ratio (%) | FY23 | FY24 | FY25 | H1 FY26 | | :-------- | :--- | :--- | :--- | :------ | | ROE | 96% | 59% | 25% | 18% | | ROCE | 98% | 64% | 28% | 24% | | ROA | 12% | 14% | 11% | 9% | | Debt/Equity | 1.17 | 0.67 | 0 | 0 |

**Balance Sheet (Rs. Crore)**

| Metric | As on 30th Sept'25 | As on 31st Mar'25 | As on 31st Mar'24 | | :--------------------- | :----------------- | :---------------- | :---------------- | | Shareholders Funds | 188.70 | 177.86 | 64.91 | | Non Current Liabilities | 10.07 | 11.57 | - | | Current Liabilities | 180.70 | 100.51 | 141.03 | | **Total Equity & Liabilities** | **379.46** | **289.93** | **205.94** | | Non Current Assets | 24.56 | 25.82 | 7.48 | | Inventories | 155.84 | 125.41 | 107.70 | | Trade receivables | 139.70 | 84.98 | 75.12 | | Cash & Cash equivalents | 31.32 | 46.52 | 9.87 | | Current Assets | 354.90 | 264.11 | 198.45 | | **Total Assets** | **379.46** | **289.93** | **205.94** |

**Cash Flow Statement (Rs. Crore)**

| Metric | H1 FY26 | FY25 | FY24 | | :----------------------- | :------ | :----- | :------ | | Cash From Operating Activities | 0.19 | 2.46 | (8.54) | | Cash From Investing Activities | (1.69) | (8.08) | (0.23) | | Cash From Financing Activities | (13.70) | 42.27 | 0.41 | | **Net Cash Flow** | **15.20** | **36.65** | **(9.18)** |

**Operational Metrics**

| Metric | FY23 | FY24 | FY25 | H1 FY26 | | :------------------------- | :------- | :------- | :------- | :------- | | Number of Units Sold (in millions) | 15.71 | 16.1 | 16.51 | 8.41 | | Total Number of Customers | 13,263 | 13,000 | 13,601 | 9,924 | | Avg Net Sales per customer (in Rs.) | 3,96,033 | 4,12,578 | 4,51,153 | - | | Net Sales per sq.ft. area in use (in Rs.) | 29,834 | 33,000 | 33,147 | - |

**Item Wise Revenue (in % - H1 FY26)**

| Item | Percentage | | :------------------- | :--------- | | Sarees | 90.2% | | Kurtis & Dress Materials | 7.0% | | Blouse Pieces | 1.3% | | Shirt & Pant Pieces | 0.8% | | Others | 0.8% |

**Zone Wise Revenue (in % - H1 FY26)**

| Zone | Percentage | | :---- | :--------- | | West | 81.4% | | South | 18.0% | | North | 0.2% | | East | 0.0% |

**Store Wise Revenue (in % - H1 FY26)**

| Store | Percentage | | :---------- | :--------- | | Kolhapur | 90.52% | | Ulhasnagar | 9.48% |

3. Active Clothing Co. Limited - Financial Metrics

**Q2 FY26 vs Q2 FY25**

| Metric (₹ Cr) | Q2 FY26 | Q2 FY25 | YoY Growth (Q2 FY26 vs Q2 FY25) | | :------------------------ | :------- | :------- | :------------------------------ | | Total Income | 83.19 | 81.62 | 1.93% | | Net Sales | 82.77 | 81.43 | 1.64% | | Other Income | 0.43 | 0.19 | 126.32% | | Raw material | 57.87 | 56.84 | 1.81% | | Employee Benefit Expenses | 14.63 | 13.53 | 8.13% | | Other Expenses | 3.30 | 3.03 | 8.91% | | Total Expenditure | 75.80 | 73.40 | 3.27% | | **EBIDTA** | **7.39** | **8.21** | **-10.01%** | | **EBIDTA Margin (%)** | **8.88%** | **10.06%** | **-1.18%** | | Interest | 2.49 | 3.19 | -21.94% | | Depreciation | 1.68 | 1.89 | -11.11% | | **PBT** | **3.22** | **3.13** | **2.67%** | | TAX Expense | 0.43 | 0.67 | -35.82% | | **PAT** | **2.79** | **2.46** | **13.48%** | | **PAT Margin (%)** | **3.36%** | **3.02%** | **0.34%** | | EPS (₹) | 1.76 | 1.59 | 10.69% |

**H1 FY26 vs H1 FY25**

| Metric (₹ Cr) | H1 FY26 | H1 FY25 | YoY Growth (H1 FY26 vs H1 FY25) | | :------------------------ | :------- | :------- | :------------------------------ | | Total Income | 147.66 | 128.15 | 15.22% | | Net Sales | 147.22 | 127.86 | 15.14% | | Other Income | 0.43 | 0.29 | 48.28% | | Raw material | 100.20 | 84.04 | 19.23% | | Employee Benefit Expenses | 27.02 | 24.14 | 11.93% | | Other Expenses | 6.09 | 6.08 | 0.16% | | Total Expenditure | 133.30 | 114.27 | 16.65% | | **EBIDTA** | **14.35** | **13.88** | **3.41%** | | **EBIDTA Margin (%)** | **9.72%** | **10.83%** | **-1.11%** | | Interest | 5.34 | 5.67 | -5.82% | | Depreciation | 3.28 | 3.56 | -7.87% | | **PBT** | **5.73** | **4.65** | **23.19%** | | TAX Expense | 0.80 | 0.98 | -18.37% | | **PAT** | **4.93** | **3.67** | **34.10%** | | **PAT Margin (%)** | **3.34%** | **2.87%** | **0.47%** | | EPS (₹) | 3.14 | 2.37 | 32.49% |

**Annual Financials (FY23, FY24, FY25)**

| Metric (In ₹ Cr) | FY23 | FY24 | FY25 | | :--------------- | :----- | :----- | :----- | | Revenues | 200.49 | 212.35 | 296.15 | | Total Income | 200.85 | 212.66 | 297.12 | | EBIDTA | 13.77 | 21.23 | 28.49 | | EBIDTA Margin (%) | 6.86% | 9.98% | 9.95% | | PBT | 3.03 | 5.91 | 10.01 | | PAT | 2.26 | 4.86 | 8.45 | | PAT Margin (%) | 1.13% | 2.29% | 2.84% | | EPS (₹) | 1.46 | 3.13 | 5.45 |

**Balance Sheet (In ₹ Cr)**

| Metric | FY25 | FY24 | FY23 | | :------------------------ | :----- | :----- | :----- | | Net Worth | 77.38 | 69.20 | 64.35 | | Total Non Current Liabilities | 36.86 | 32.59 | 28.87 | | Total Current Liabilities | 164.87 | 118.34 | 84.97 | | **Total Liabilities** | **279.11** | **220.13** | **178.19** | | Total Non Current Assets | 63.80 | 60.17 | 57.00 | | Total Current Assets | 215.31 | 159.96 | 121.19 | | **Total Assets** | **279.11** | **220.13** | **178.19** |

**Cash Flow Statement (In ₹ Cr)**

| Metric | FY23 | FY24 | FY25 | | :--------------------- | :----- | :----- | :------ | | Cash from Operation | 14.25 | 20.77 | -10.37 | | Cash from Investments | -17.43 | -19.45 | -10.57 | | Cash from Financing | -0.94 | -1.15 | 20.87 | | **Net Cash Flow** | **-4.12** | **0.17** | **-0.08** |

**Key Ratios (Annual)**

| Ratio (%) | FY23 | FY24 | FY25 | | :-------------------- | :---- | :---- | :---- | | ROE | 3.51 | 7.03 | 10.92 | | Debt To Equity (Times) | 1.23 | 1.24 | 1.53 | | Book Value (₹) | 41.48 | 44.61 | 49.89 | | ROCE | 7.14 | 9.00 | 10.93 | | Interest Coverage (Times) | 1.42 | 1.73 | 1.88 |

**Manufacturing Facility Capacities & Utilization (FY25)**

| Product | Capacity (Units) | Utilization (Approx) | | :---------- | :--------------- | :------------------- | | Sweaters | 2,400,000 | 75% | | Jackets | 500,000 | 75% | | T-Shirts | 1,000,000 | 75% | | Shoe Uppers | 750,000 | 75% |

**Regional Market Share (2024)**

| Region | Percentage | | :------------ | :--------- | | North America | 38.46% | | Europe | Significant market presence | | Asia-Pacific | Rapid growth |

**Readymade Garments Market Growth Forecast (Billion)**

| Year | Value | | :--- | :---- | | FY18 | 37 | | FY19 | 36 | | FY20 | 34 | | FY21 | 30 | | FY22 | 44 | | FY23 | 37 | | FY24 | 36 | | FY30F | 100 |