Atharv Enterprises Ltd Management Discussions

This discussion covers the financial results and other developments for the year ended March 31, 2026. Statements in this Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute ‘forward-looking statements within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ on account of various factors such as changes in Government regulations, tax regimes, economic development, exchange rate and interest rate movements, competitive environment, product demand and supply.

Indian Industry Structure and Development:

Your company has earned a net profit of Rs. 18.58 Lakh during the financial year under review against a profit of Rs. 19.26 Lakh in previous year.

OPPORTUNITIES AND THREATS AND FUTURE OUTLOOK GLOBAL ECONOMIC CONDITIONS

OPPORTUNITIES: Free Trade Agreements (FTAs):

UK FTA (July 2026): Zero duty on apparel/footwear (previously 10 16%), opening a $1.35 billion annual export opportunity; Indias share in UK apparel imports could double from 6% to 12%. EU & UK negotiations: Expected to expand market access further. China+1 Strategy: Global buyers diversifying supply chains away from China, creating openings for Indian exporters. Domestic Market Growth: Indias textile & apparel market valued at $194 billion in 2025 26, growing ~5% annually, with 80% demand from domestic consumption. This provides stability against global volatility.

Government Support:

PM MITRA scheme driving investment in mega textile parks.

GST rationalisation & export incentives easing cost pressures. Technical textiles focus boosting innovation.

Man-Made Fibre (MMF) Expansion: Rising demand for synthetic fabrics globally; Indias competitiveness will improve if MMF production scales up.

THREATS: Tariff Volatility:

US tariffs swung from 50% (temporary in 2025) to 18% (current); future uncertainty remains with Section 122 authority expiring in July 2026. Exporters dependent on US markets remain vulnerable.

Cotton MSP Premium: Indian cotton priced 5 7 cents/lb above global benchmarks, compressing margins across spinning and garmenting. Global Demand Weakness: Recovery in consumption remains uneven, especially in Western markets, limiting export growth. Competition: Bangladesh and Vietnam remain cost-competitive; if Bangladesh stabilises, diverted orders may return.

Compliance & ESG Pressures: Increasing buyer focus on sustainability, labour standards, and speed to market requires investment in systems and certifications

Segment wise or product-wise performance:

The Companys business activity falls within a single business segment i.e. Textile Business.

BUSINESS OVERVIEW

Company is in process to build the strategic focus on scaling man-made fibre production, leveraging FTAs, and building compliance-driven, flexible supply chains to withstand tariff and demand volatility. With 80% demand from India itself, company expand its focus on fast fashion, athleisure, and home textiles for steady growth.

For mitigating the risk company is in process of adopting following:

Hedge raw material costs.

Build flexible supply chains to adapt to tariff shocks.

All said and done, there are good reasons to believe that Atharv Enterprises Limited will perform even better in FY 2026. We hope that this forward-looking statement turns out to be true.

Risk and Concerns:

External environment remains uncertain and challenging. Cotton MSP hikes, tariff re-escalations, and global recessionary trends could erode competitiveness.

Internal Control System and their adequacy:

The company has adequate internal audit and control system. Internal auditors comprising of professional firm of Chartered Accountants have been entrusted the job to conduct regular internal audit and report to the management any lapses, if any.

Discussion on financial performance with respect to operational performance:

(Rs. In Lakhs)