Ecofinity Atomix Ltd Management Discussions

A. Indian Economic Overview:

India enters FY26 with strong economic momentum supported by stable macroeconomic fundamentals, sustained policy support, and broad-based sectoral performance. Despite a challenging global environment, the economy has remained resilient, with robust growth, historically low inflation, improving labour market indicators, and strengthening external and financial buffers. Coordinated fiscal, monetary, and structural policies have reinforced macroeconomic stability while supporting investment, consumption, and inclusion. The emerging macroeconomic environment reflects an economy that is consolidating its gains while strengthening the foundations for sustained and inclusive growth.

B. Outlook:

Indias growth outlook remains robust, underpinned by strong macroeconomic fundamentals and broad-based demand momentum. As per the First Advance Estimates, real GDP and Gross Value Added (GVA) are projected to grow by 7.4% and 7.3% respectively in FY26.

A strong agricultural performance has bolstered rural incomes and consumption, while improvements in urban demand- supported by tax rationalisation measures indicate a broadening of the consumption base. Indias potential growth is estimated at around 7%, with real GDP growth for FY27 projected in the range of 6.8-7.2%, reflecting sustained medium-term growth capacity amid a challenging global environment. On the trade front, Indias total exports reached record levels of USD 825.3 billion in FY25 and USD 418.5 billion in H1 FY26, driven by strong growth in services exports and sustained momentum in non-petroleum, non-gems, and jewellery exports.

Indias integration into global trade continues to deepen, marked by diversification and strong services-led growth. Indias share in global merchandise exports increased from 1% in 2005 to 1.8% in 2024.

According to UNCTADs Trade and Development Report 2025, India ranks third among countries in the Global South in terms of the diversity index of trade partnerships, following China and the UAE. Indias index score of 3.2 exceeds that of all countries in the Global North, underscoring its resilience in the face of tariff uncertainties and other emerging challenges.

C. Industry structure and development:

Indias textile sector continued to demonstrate resilience in global markets during FY 2025–26. Total textile exports, including handicrafts, increased from Rs 3,09,859.3 crore in FY 2024–25 to Rs 3,16,334.9 crore in FY 2025–26, registering a growth of 2.1%. This performance reflects steady global demand for Indian textile products and the continued competitiveness of the sector across major product categories.

Among the major segments, Ready-Made Garments (RMG) of all textiles remained the largest contributor to textile exports, rising from Rs 1,35,427.6 crore to Rs 1,39,349.6 crore, an increase of 2.9%. Cotton yarn, fabrics, made-ups and handloom products recorded exports of Rs 1,02,399.7 crore in FY 2025–26 as against Rs 1,02,002.8 crore in FY 2024–25, reflecting stable growth of 0.4%. Man-made yarn, fabrics and made-ups posted a stronger growth of 3.6%, with exports increasing from Rs 41,196.0 crore to Rs 42,687.8 crore.

Among value-added segments, handicrafts excluding handmade carpets recorded the highest growth among major categories, rising by 6.1% from Rs 14,945.5 crore to Rs 15,855.1 crore.

Export growth was registered in more than 120 destinations during April 2025 to February 2026 over the corresponding period of the previous year, indicating broad-based geographical expansion in Indias textile export basket. A notable growth has been observed in key markets such as UAE (22.3%), UK (7.8%), Germany (9.9%), Spain (15.5%), Japan (20.6%), Egypt (38.3%), Nigeria (21.4%), Senegal (54.4%), and Sudan (205.6%) etc

The Government has continued to support the sector through key export facilitation and remission measures, including the extension of the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme and the RoDTEP Scheme beyond 31.03.2026.

Indias FTA agenda also saw major progress during 2025–26, with important implications for the textile and apparel sector. The India–EFTA TEPA entered into force on 1 October 2025; the India–UK CETA was signed in July 2025; the India–Oman CEPA in December 2025; the India–New Zealand FTA was announced on 22 December 2025; and the India–EU FTA was concluded on 27 January 2026. Collectively, these FTA developments are expected to improve preferential market access, reduce tariff disadvantages, support supply-chain integration, and open new opportunities for textiles, apparel, handicrafts and technical textiles, thereby aiding market diversification, export growth, investment, technology partnerships, and Indias deeper integration into global value chains.

The continued growth in textile exports, coupled with sustained policy support, underlines the Governments commitment to strengthening the sector, promoting employment, and advancing the goal of higher value-added exports.

D. Opportunities and Threats:

Opportunities: Expand into technical textiles for medical, agricultural, and industrial applications. Tap into growing domestic and international markets with rising purchasing power. Leverage digital integration and automated smart manufacturing. Shift toward eco-friendly, sustainable, and recycled fabric production lines.

Threats: The company is concerned about the various threats that it is exposed to which includes factors such as rising competition in the market both on the domestic & export front, duty free access to competing countries in US & European markets, uncertain business environment, fluctuating rupee, cost of raw material and its availability, slowdown in demand & change in fashion trends, possibility of increase in interest rates, etc. Besides this the Company is also exposed to factors such as the change in government policies, duties & taxes, availability of power from the grid, availability of labour etc.

E. Segment-wise or product-wise performance:

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

F. 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.

G. Internal control systems and their adequacy:

The Company has its Internal Financial Control systems commensurate with operations of the Company. The management regularly monitors the safeguarding of its assets, prevention and detection of frauds and errors, and the accuracy and completeness of the accounting records including timely preparation of reliable financial information. The Head of Internal Audit together with External Audit consults and reviews the effectiveness and efficiency of these systems and procedures to ensure that all assets are protected against loss and that the financial and operational information is accurate and complete in all respects.

H. 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 report of Board of Directors of the Company.

I. 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.

Total Number of people employed: 3

J. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including: Part of the Financial Statements.