7NR Retail Ltd Management Discussions

A. Overview of the Global Economy:

The global economy remained resilient during FY 2025-26 despite heightened geopolitical tensions, trade policy uncertainties, and persistent financial market volatility. According to the latest projections by the International Monetary Fund (IMF), global economic growth is expected to moderate to around 3.1% in 2026, remaining below the historical average of 3.8% (2000-2019). While domestic demand and labor market resilience continue to support growth in several major economies, elevated public debt levels, restrictive monetary conditions, geopolitical conflicts, and slower productivity growth continue to weigh on the global outlook.

Global inflation has eased significantly from the highs witnessed over the past few years, supported by moderating commodity prices, improved supply chain conditions, and the cumulative effects of monetary tightening by central banks. However, inflationary pressures remain uneven across regions due to geopolitical developments, energy price volatility, exchange rate fluctuations, and varying domestic demand conditions. Consequently, central banks are expected to maintain a cautious approach toward monetary policy normalization.

From the textile and apparel industrys perspective, the evolving global macroeconomic environment presents both opportunities and challenges. Slower economic expansion in advanced economies continues to moderate consumer demand for discretionary products such as apparel and home textiles. At the same time, easing inflation and relatively stable raw material prices are expected to reduce input cost pressures, improving operating margins for textile manufacturers. Nevertheless, exchange rate volatility, evolving trade policies, logistics costs, and geopolitical uncertainties remain key factors influencing export competitiveness and global sourcing strategies.

India continues to strengthen its position as a preferred global manufacturing and sourcing destination under the ongoing "China Plus One" strategy. Supported by expanding production capacity, government initiatives, improving infrastructure, and growing bilateral and regional trade partnerships, Indias textile sector is well placed to benefit from global supply chain diversification. The Government of India has also set an ambitious target of achieving US$1 trillion in total exports during FY 2025-26, providing additional momentum for export-oriented industries, including textiles and apparel.

B. Overview of the Indian Economy:

The global economy entered FY 2025-26 amid improving inflation dynamics but continued uncertainty arising from geopolitical conflicts, trade tensions, fluctuating commodity prices, and uneven economic recovery across regions. While inflation has eased significantly from the highs witnessed during 2022-23, global growth remains moderate due to tighter financial conditions and subdued investment sentiment. The United States has continued to demonstrate resilience, supported by a strong labour market and steady consumer spending, whereas several European economies have experienced slower growth amid weak industrial activity and external demand. Financial markets have remained relatively stable despite persistent geopolitical risks and volatility

in energy markets. According to the International Monetary Fund (IMF), global growth is estimated at around 3.3% in 2025, reflecting a stable but below long-term average expansion.

In the Indian context, the economy has continued to demonstrate strong resilience and remains one of the fastest-growing major economies in the world. As per the First Advance Estimates released by the National Statistical Office (NSO), Indias Real GDP (at Constant 2011-12 Prices) is estimated to grow by approximately 6.5% during FY 2025-26, following the robust expansion recorded in the previous year. The Economic Survey projects that growth will be driven by strong domestic consumption, sustained public capital expenditure, healthy private investment, improving manufacturing activity, and the continued strength of the services sector. Inflation has moderated and remained broadly within the Reserve Bank of Indias target range, providing support to household consumption and business confidence. Despite external risks, including geopolitical tensions and global trade uncertainties, Indias macroeconomic fundamentals, resilient financial sector, and ongoing structural reforms continue to position the economy as one of the fastest- growing large economies global.

India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships. Indias appeal as a destination for investments has grown stronger and more sustainable because of the current period of global unpredictability and volatility, and the record amounts of money raised by India-focused funds in 2022 are evidence of investor faith in the "Invest in India" narrative.

Indias status as an attractive investment destination is further solidified amid global volatility. Investor confidence remains high, with India-focused funds raising record inflows, and Indias growing prominence in global supply chains bolstering its appeal. The country now hosts 113 unicorn startups with a combined valuation exceeding US$ 350 billion, and the fintech sector is poised to generate the next wave of unicorns. Several tech IPOs are anticipated in FY 2025-26, further deepening the domestic capital market ecosystem.

Explaining the economic outlook factoring global rudiments, the slowdown in global growth and economic output coupled with increased uncertainty is likely to dampen global trade growth. Strong domestic demand amidst high commodity prices will raise Indias total import bill and contribute to unfavourable developments in the current account balance. These may be exacerbated by plateauing export growth on account of slackening global demand. Should the current account deficit widen further, the currency may come under depreciation pressure. Also, entrenched inflation may prolong the tightening cycle, and therefore, borrowing costs may stay ‘higher for longer.

C. Indian Textile Industry:

Indias textile and apparel industry continued to demonstrate resilience during FY 2025-26, supported by strong domestic demand, improving global market conditions, and ongoing government initiatives. The industry remains one of the countrys largest employment generators, contributing around 2% to GDP, 12% to manufacturing GVA, and 8-9% to Indias merchandise exports. Textile and apparel exports are estimated to have exceeded US$37 billion during the year, driven by growth in cotton yarn, home textiles, ready-made garments, and technical textiles. With initiatives such as the PM MITRA Parks, PLI Scheme, and increasing focus on sustainability and value-added products, the Indian textile industry is well positioned for sustained long-term growth and enhanced global competitiveness.

D. Outlook:

During the reporting period, We must focus more on offering new products meeting customer retail price points. We experienced an increase in sales volume, leading to a rise in revenue from this segment The steady demand for quality yarn products in the domestic market contributed to our success. Further geographic presence will be increased, and new markets will be explored.

E. Industry structure and development:

The Indian textile and apparel industry remains one of the countrys largest and most significant sectors, contributing approximately 2% to Indias GDP, around 12% to manufacturing Gross Value Added (GVA), about 13% to industrial production, and 8-9% to the countrys merchandise exports. India accounts for nearly 4% of global textile and apparel trade, reinforcing its position as one of the worlds leading textile manufacturing and exporting nations.

India is among the worlds largest producers of cotton, jute, silk, and man-made fibres. It is the second-largest producer of silk globally and contributes around 95% of the worlds handwoven fabric. During FY 2025-26, Indias textile and apparel exports are estimated to have exceeded US$37 billion, supported by growing demand for cotton yarn, home textiles, garments, technical textiles, and man-made fibre products. The Government has set an ambitious long-term target of achieving US$100 billion in textile and apparel exports by 2030 through enhanced competitiveness and value addition.

The sector continues to be the second-largest employment generator after agriculture, directly employing over 45 million people while supporting the livelihoods of more than 100 million people across allied sectors such as agriculture, handlooms, handicrafts, logistics, and retail.

The industrys growth is being driven by strategic government initiatives, including the PM MITRA Mega Textile Parks, the Production Linked Incentive (PLI) Scheme for Textiles, the National Technical Textiles Mission, and continued investments in sustainability, innovation, digitalisation, and infrastructure development. With a strong raw material base, an integrated value chain, a skilled workforce, and supportive policy measures, the Indian textile industry is well positioned to strengthen its global competitiveness and achieve sustainable long-term growth.

F. Opportunities and Threats:

Opportunities:

- The governments continued support through schemes such as the National Technical Textiles Mission (NTTM), 100% FDI in the textile sector, and SAMARTH - Scheme for Capacity Building in the Textile Sector, is driving investment, skill enhancement, and innovation across the value chain.

- China plus one diversification policy will benefit Indian manufacturers. As global retailers are looking for an alternate supply base, India has greater appeal as an attractive option for manufacturing and exports of textiles and apparels.

- The growth of the technical textile market will create lucrative opportunities.

- he rapid growth of organized retail and e-commerce platforms is transforming buying behavior and enhancing market reach for textile and apparel products, particularly in Tier 2 and Tier 3 cities.

- Rising disposable income will stimulate domestic demand.

- The growing popularity of fast fashion products will contribute to the growth of the textile and apparel industry.

- Long-standing relationships with international brands, institutional buyers, and a skilled workforce provide Indian textile players with a strong foundation for sustained growth and operational stability.

Threats:

- Market Competition: The domestic yarn trading market remains highly competitive, with numerous established and emerging players competing for market share. This creates pricing pressure and may affect margins. The Company actively monitors competitor strategies and continuously innovates to maintain its competitive positioning.

- Raw Material Costs: Fluctuations in raw material prices can impact our profitability. We actively manage our procurement process and explore alternative suppliers to mitigate the risk of sudden price increases.

- Regulatory Changes: Any adverse changes in trade policies, tariffs, or regulatory frameworks—both domestic and international—may affect export competitiveness and supply chain dynamics. The Company remains agile by staying informed on regulatory developments and adjusting its operations accordingly.

- Economic Factors: Economic conditions, both domestically and internationally, can impact the demand for yarn products. We assess economic trends and adjust our production and pricing strategies to optimize performance.

- Labor Availability and Costs: The industry is labor-intensive, and availability of skilled labor, especially in manufacturing hubs, can become a constraint. Rising labor costs and increasing regulatory scrutiny on workplace practices may affect productivity and compliance overheads.

G. Segment-wise or Product-wise performance:

The Company is operating in only one segment i.e. Trading in textiles products. Therefore, there is no requirement of Segment wise reporting.

H. Future Outlook:

Looking ahead, we will focus on the following strategies to sustain growth and capitalize on emerging opportunities:

- Focus on analytics

- Global trade and geopolitical factors

- Online Expansion

- Premiumisation and access to global brands

- Technological advancements

- Further Growth of Private Brands

- Sustainability and eco-friendly practices

I. Risks and concerns:

Management recognizes the following principal risks that may influence decisions made by investors given their significant impact on business conditions as stated in the securities report, and among matters pertaining to accounting status, consolidated companies financial status and business performance, as well as cash flows. Our risk management system addresses the increasingly complex risks that we face in our day-to-day operations. The risk management system conducts risk analysis of economic and social changes and implements preventive measures that are best suit for the Company.

J. Internal control systems and their adequacy:

The company has implemented proper system for safeguarding the operations/business of the company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements.

The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. The company has internal audit and verification at regular intervals.

The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of company.

K. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2025-26 is described in the Directors Report of the Company.

L. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

M. Caution Statement:

Statements made in the Management Discussion and Analysis describing the various parts may be "forward looking statement" within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Govt. Regulations and amendments in tax laws and other internal and external factors.

Registered Office:	By the Order of the Board of
Godown No-1, 234/1+234/2, FP-69/3, Sadashiv Kanto, B/h Bajaj Process, Narol Chokdi, Narol, Ahmedabad, Gujarat - 382 405.	7NR Retail Limited
	Sd/-	Sd/-
	Dilipbhai Vitthaldas Patel	Chetan Kumar Ojha
Place: Ahmedabad	Director	Managing Director
Date: 8th July, 2026	DIN:11661239	DIN: 09706197