Adinath Bio-Labs Ltd Management Discussions

Statements in this Report, particularly those relating to the Companys objectives, projections, estimates, expectations, or future performance, may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations, including the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Actual results, performance, or achievements could differ materially from those expressed or implied in such statements due to risks, uncertainties, and other factors beyond the Companys control. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with the relevant provisions of the Companies Act, 2013, the Management Discussion and Analysis Report for the financial year under review is presented below:

Indias goods and services exports reached a record US$ 825.26 billion in FY 2024-25 (April 2024-March 2025), registering a robust growth of approximately 6.06% over the previous years US$ 778.13 billion, despite global economic uncertainties, geopolitical tensions, and subdued demand in major markets. This milestone was primarily driven by strong services exports, which stood at US$ 387.55 billion (up ~13.6% or 12.45% in some estimates), while merchandise (goods) exports remained nearly stable at US$ 437.70 billion (or US$ 437.42 billion in provisional data), with non-petroleum merchandise exports growing to around US$ 374 billion (+6%).

In the subsequent FY 2025-26, India built further momentum, achieving a new all-time high of US$ 860.09-863.11 billion in total exports (growth of 4.22-4.59%), with merchandise exports at US$ 441.74441.78 billion (modest ~0.93% rise) and services exports surging to US$ 418.31-421.32 billion (growth of ~7.94-8.71%). These figures, compiled from the Ministry of Commerce & Industry and PIB releases, underscore Indias resilient export performance, diversification efforts through PLI schemes, and the pivotal role of the services sector in navigating global headwinds, keeping the country firmly on track toward its US$ 2 trillion export target by 2030.

Sustained Leadership: Indias Economy Shines with Strong Growth, Trade, and Investment Gains:

In FY 2025-26 (April 2025-March 2026), India continued its robust economic expansion as one of the fastest-growing major economies globally, recording a strong real GDP growth of 7.7%, up from 6.5-7.1% in FY 2024-25. This performance, driven by resilient private consumption, services sector strength, policy reforms, and export momentum, reinforced Indias position as a leading emerging economic powerhouse — currently ranked as the worlds 5th or 6th largest economy by nominal GDP (around US$ 4.15 trillion per IMF estimates), with rankings influenced by currency fluctuations.

The country further narrowed the gap with advanced economies through record goods and services exports reaching US$ 860.09 billion (up 4.22% from US$ 825.26 billion in FY 2024-25), with services exports at US$ 418.31 billion (strong ~7.94% growth) and merchandise exports at US$ 441.78 billion.

FDI inflows remained healthy at approximately US$ 58.85 billion (gross, up ~18%), reflecting sustained investor confidence in manufacturing, technology, and renewables. Infrastructure development accelerated with record government capital expenditure, scaled up to ^12.2 lakh crore (~US$ 133 billion) in the Union Budget 2026-27, focusing on roads, railways, ports, airports, and logistics. These strategic initiatives have positioned India firmly on track toward its US$ 5 trillion economy goal despite global headwinds

Indias Financial Sector Stability: The RBIs Financial Stability Report (December 2025):

The Reserve Bank of India (RBI) released its Financial Stability Report (FSR) for December 2025 on or around December 31, 2025. This biannual report (typically issued in June and December) provides a comprehensive assessment of the resilience of Indias financial system, identifies emerging risks, and evaluates the stability of banks, Non-Banking Financial Companies (NBFCs), and other segments.

Key Highlights:

• Overall Financial System Health: The domestic financial system remains robust and resilient, backed by strong bank balance sheets, adequate capital buffers, robust liquidity, steady profitability, and low financial market volatility. Stress tests confirm the systems ability to withstand adverse economic shocks.

• Banking Sector Asset Quality: The Gross Non-Performing Assets (GNPA) ratio of Scheduled Commercial Banks improved to a multi-decade low of 2.1% as of September 2025 (down from higher levels in previous years, e.g., around 3.3% earlier). It is projected to decline further to around 1.9% by March 2027 under the baseline scenario. Under severe stress, it could rise to 3.2-4.2%. Net NPAs are also at low levels.

• Risk Areas: Unsecured retail loans remain a point of vigilance, accounting for a significant share of slippages (53.1% overall, higher in private banks). Fintech exposures, household debt, and interconnectedness with NBFCs require monitoring. Global risks include geopolitical tensions, trade uncertainties, elevated asset valuations, and the growth of crypto/stablecoins.

• Macroeconomic Outlook: Positive growth momentum continues amid controlled inflation. Sovereign debt sustainability is supported by favourable interest rate-growth differentials. Forex reserves provide a strong buffer.

Economic growth outlook

Indias economic growth outlook remains robust but has moderated amid emerging global headwinds. According to the Reserve Bank of Indias latest Monetary Policy Committee announcement in early June 2026, real GDP growth for FY 2026-27 is now projected at 6.6%, revised downward from the previous estimate of 6.9%.

This projection reflects a resilient domestic economy that delivered strong performance in FY 2025-26, with the full-year growth estimated at around 7.7%, marking one of the fastest expansions among major economies and supported by robust private consumption, manufacturing revival, services exports, and investment momentum.

For FY 2026-27, the RBI expects quarterly growth to unfold as follows: 6.6% in Q1, 6.3% in Q2, 6.5% in Q3, and 6.8% in Q4. The downward revision is primarily attributed to risks from the ongoing West Asia conflict, elevated global energy and commodity prices, potential supply chain disruptions, financial market volatility, and weather-related uncertainties, including monsoon prospects.

Despite these challenges, India continues to stand out as one of the fastest-growing major economies. International forecasts broadly align with this moderated trajectory, with institutions like the World Bank and IMF projecting growth in the 6.5-6.6% range for FY 2026-27, underscoring the strength of domestic buffers even as external pressures mount. Policymakers remain focused on sustaining this momentum through supportive measures while keeping the repo rate unchanged at 5.25% to maintain financial stability.

Liquidity deficit challenges

The RBI responded with substantial measures, including cumulative CRR reductions, large-scale open market operations (OMO) bond purchases (e.g., ^2 lakh crore tranches in late 2025-early 2026), and USD/INR buy/sell swaps to inject durable liquidity.

Conditions fluctuated in 2026: a notable deficit emerged in March (around ^65,900 crore or ~US$7 billion, the first major one of the year) due to end-FY tax/GST outflows, before shifting to surplus in April (peaking above ^4 trillion or ~US$43+ billion).

As of mid-June 2026, recent RBI operations data indicate the system is in a liquidity deficit mode (net liquidity injected around -^1.5 to -1.9 trillion), with RBI actively managing through variable rate repo (VRR) operations and other tools to keep overnight rates (e.g., WACR) aligned with the policy repo rate, which was held steady at 5.25% in the June 2026 MPC meeting under a neutral stance.

The RBI continues to emphasize ensuring adequate liquidity for productive credit needs while proactively addressing transient pressures from government cash balances, FX interventions, and seasonal factors. Overall, the banking sector remains resilient with strong capital and liquidity buffers.

Indias economic outlook for 2026: IMF projection:

According to the IMFs April 2026 World Economic Outlook report, Indias real GDP growth is projected at 6.5% for 2026 (and similarly for 2027), positioning the country as the fastest-growing major economy during this period, and significantly outpacing the global average of 3.1%.

This forecast, which corresponds roughly to Indias FY27 (2026-27), reflects an upward revision from previous estimates and builds on strong momentum, with 2025 growth upgraded to 7.6%. Key supporting factors include resilient domestic demand, the carryover effects of robust performance in late 2025, and reduced US tariffs on Indian goods (lowered from 50% to 10%), which help mitigate challenges from ongoing geopolitical tensions, particularly in the Middle East.

Inflation is expected to moderate around 4.7% in 2026. While the baseline assumes a contained regional conflict, downside risks such as prolonged instability, higher energy prices, or broader trade disruptions could temper these outcomes, though Indias outlook remains relatively resilient compared to the global landscape. These projections underscore Indias continued role as a bright spot in an uncertain international environment, with updates anticipated in subsequent IMF releases.

Healthy FDI inflows and export growth

Geographic analysis of FDI sources highlights Indias robust investment ties with key global partners. Singapore and Mauritius remain the dominant contributors, jointly accounting for nearly half of Indias total cumulative FDI equity inflows since April 2000. Singapore has emerged as the top source with approximately US$192.5 billion (around 25% share), driven by its status as a leading international financial hub and gateway for global capital. Mauritius follows closely with about US$185 billion (roughly 24% share), largely attributed to favourable tax treaties and streamlined investment frameworks.

These two jurisdictions continue to anchor Indias FDI landscape even as inflows from the United States and other countries gain momentum in recent years. This strong partnership reflects growing investor confidence in Indias economic prospects and policy environment.

Indias trade scenario in 2026

Indias trade performance in FY 2025-26 (April-March) underscores the countrys growing role as a major player in international markets. Total exports of goods and services reached a record approximately US$860.09 billion, reflecting a 4.22% growth over the previous fiscal year. Merchandise exports stood at around US$441.78 billion, while services exports contributed significantly with about 7.94% growth. Imports rose faster to around US$979.40 billion, leading to a widened trade deficit. This performance was supported by robust government policies, strategic free trade agreements, and diversification of markets.

Pharmaceuticals: India continued to strengthen its position as the "pharmacy of the world" and a leading producer of generic drugs. Pharmaceutical exports reached around US$30-31 billion in FY25 (with strong momentum into 2026), driven by demand in regulated markets like the US (which remains the top destination, accounting for ~34% of exports) and rapid growth in emerging markets across Africa, Asia, Latin America, and Oceania. Key segments like anti-cancer drugs, formulations, and other medicaments showed solid performance, supported by production-linked incentives and quality improvements.

Agriculture and processed food: India maintained and enhanced its status as a top global exporter of rice (worlds largest exporter, with basmati and non-basmati combined exceeding US$11-12 billion), spices (one of the leading categories at ~US$4.5+ billion), and marine products (around US$7.45-8.4 billion with double-digit growth in several months). New and expanded markets in the Middle East, Southeast Asia, the US, UAE, and others drove growth, with overall agri exports reaching about US$52-53 billion in FY25-26. Marine products and spices in particular recorded strong gains due to steady global demand and value-added processing.

ECONOMIC SCENARIO:

Global growth is projected to slow to 3.1 percent in 2026 and edge up to around 3.2 percent in 2027 according to the IMFs April 2026 World Economic Outlook reference scenario (assuming a short-lived Middle East conflict). Other forecasters like the World Bank project a sharper slowdown to 2.5 percent in 2026 due to the impacts of the ongoing Middle East conflict, energy price spikes, and related disruptions.

Elevated geopolitical risks, including the Middle East conflict (with potential effects on energy supplies via routes like the Strait of Hormuz), shifting trade policies/tariffs, high public debt levels, and a withdrawal or recalibration of fiscal support continue to weigh on economic activity. Advanced economies face subdued growth around 1.5-2%, while emerging market and developing economies (EMDEs) are more affected by energy and commodity shocks.

Inflation dynamics have shifted: Global headline inflation, after earlier declines, is now expected to rise modestly in 2026 (to around 4.4 percent in the IMF reference scenario) due to higher energy and food prices before resuming its decline in 2027. Some projections see it around 4% or slightly higher depending on conflict duration and energy market disruptions.

Trade growth has remained resilient in recent years despite conflicts in Ukraine and the Middle East, along with lingering pandemic effects, but faces headwinds from tariffs, uncertainty, and supply chain pressures. Overall, there remains a high degree of uncertainty tied to the duration and scope of geopolitical conflicts (Russia-Ukraine and Middle East), monetary policy paths in advanced economies, trade fragmentation, and potential AI/productivity offsets.

REVIEW OF OPERATION:

The Company operates mainly in Indian Market and engaged in Business of Trading and Consulting. The management of Adinath Bio-Labs Limited presents the analysis of performance of the Company for the Financial Year 2025-2026 and its outlook for the future. This outlook is based on assessment of the current business environment. It may vary due to future economic and other developments. During the year under review, the Company earned total revenue of ^ 8.72 lakh.

Outlook for 2025-2026, Your Company is planning to develop business through diversification mixed with sustain efforts in the present business line. The Board is hopeful for achieving good income & profitability in years to come.

BUSINESS SEGMENT:

The Company is into the business of trading.

MARKET CHALLENGES:

a) High Tariffs and Protectionist Policies

b) Price Sensitivity

c) Infrastructure

d) Power of States

OPPORTUNITIES AND THREATS:

Opportunities

a) Favorable Government Regulations - Supportive policies such as PLI schemes, ease of doing business reforms, and export incentives.

b) Favorable Macro and Micro-economic Conditions - Rising domestic consumption, growing organized retail, and economic recovery.

c) Niche Market Growth Potential - Opportunity to specialize in high-margin or underserved product categories.

d) Expansion into New Geographies - Pan-India reach and potential export markets.

e) Digital Transformation & E-commerce - Growth of online B2B/B2C trading platforms.

f) Sustainability & Green Products - Increasing demand for eco-friendly and ethically sourced goods. Threats

a) Economic Restrictions due to Disruptions (e.g., lockdowns, pandemics, or geopolitical events).

b) Intense Competition from large national and international traders.

c) Limited Geographical Presence - Currently concentrated in East India with no pan-India coverage.

d) Increase in Cost of Logistics - Rising fuel prices, supply chain disruptions, higher transportation costs, and inefficiencies in freight movement.

e) Fluctuating Commodity Prices & Margin Pressure - Volatility in raw material/input costs affecting trading margins.

f) Regulatory and Compliance Risks - Frequent changes in GST, import duties, environmental norms, and state-specific policies.

g) Working Capital Constraints - High inventory holding costs and longer credit cycles in trading business.

h) Technological Disruption - Emergence of advanced digital platforms and automated trading systems by competitors.

RISK AND CONCERNS:

Both local and foreign stakeholders are being impacted by the significant price changes that are occurring on the Indian commodity market. These fluctuations are affecting a variety of commodities. The fluctuations in prices have substantial repercussions for the economy as a whole, as well as for commercial traders, manufacturers, and consumers.

Uncertainties in business offer opportunities and downside risks. Consequently, the Company recognizes the importance of well-structured system to identify and manage the different elements of risk.

Pressure on margins, high manpower and infrastructure cost, availability of substitutes, higher overheads, are some factors which could impact adversely especially as we strive to tap into the competitive markets.

BASIS OF PREPARATION AND PRESENTATION OF OUR FINANCIAL STATEMENTS:

The Financial Statements have been prepared and presented under the historical cost convention, unless otherwise specifically stated, on the accrual basis of accounting and comply with the applicable accounting standards referred to in the Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control procedure commensurate with its size and nature of the business. The nature control system is supplemented by extensive internal audit s regular review by the management and well documented policies and guidelines to ensure reliability of financial and all other records to prepare financial statement and other data. Moreover, the Company continuously upgrades these systems in line with best accounting practices. The Company has independent audit system to monitor the entire operation and the audit committee of the Board reviews the findings and recommendation of the internal auditors

HUMAN RESOURCES:

Human Resources Development envisages the growth of the individual in tandem with the organization. It also aims at the Up-liftment of the individual by ensuring an enabling environment to develop capabilities and to optimize performance.

Human Capital refers to our employees and their commitment and motivation towards achieving organizational goals. This is critical to creating value for our clients and ensuring the long-term sustainability of our business. We strive to foster a people centric culture that enables high performance. Our unwavering focus on engaging, developing and retaining talent, while promoting inclusivity, diversity and transparency, is central to our business strategy.

The Company, on its part, would endeavor to tap individual talents and through various initiatives, ingrain in our human resources, a sense of job satisfaction that would, with time, percolates down the line. It is also the endeavor of the Company to create in its employees a sense of belonging, and an environment that promotes openness, creativity and innovation.

DISCLOSURE OF ACCOUNTING TREATMENT:

In preparation of it financial statement no accounting treatment different from that prescribed in the accounting standard has been followed.

DISCUSSION OF FINANCIAL PERFORMANCE:

Directors of your Company are very hopeful to build up the performance of the company and post better results in the forthcoming financial year and to add value to the shareholders. The Company is hopeful of improving its turnover and bottom line and hopeful of posting better revenue ahead. Financial Highlights with respect to Operational Performance is as under:

DETAILS OF SIGNIFICANT CHANGES:

NA - Not Applicable

CAUTIONARY STATEMENT:

Statement in the management discussion & analysis describing the Companys objectives, projections, estimates & exceptions may be "forward looking statements" within the meaning of applicable securities laws & regulations. These statements being based on certain assumptions and expectation of future events, actual results could differ materially from those expressed or implied. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments, information or events. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the companys operations include economic conditions affecting demand/supply and price conditions in the domestic & overseas markets in which the company operates changes in the Government regulations, tax laws & other statutes & other incidental factors.