Ganesha Ecosphere Ltd Management Discussions

Global Economy

The global economy demonstrated relative stability in 2024, despite a backdrop of persistent challenges related to economic conditions, international relations, and government policies. According to the International Monetary Fund (IMF), global GDP grew by around 3.2% during the year. Growth rates varied significantly across regions, with advanced economies recording slower expansion, while many developing nations—particularly in Asia-sustained steady growth. Notably, India became the worlds fourth-largest economy, surpassing Japan, and is projected to reach third place with a GDP of $7.3 trillion by 2030.

The global economic landscape was further complicated by new uncertainties following Chinas introduction of DeepSeek and subsequent increases in tariffs on key imports. U.S. tariff increases in 2025, including steep levies on imports from countries such as India, have significantly impacted the global economy by raising consumer prices and disrupting trade flows. The tariffs have driven an estimated 1.8% rise in U.S. consumer price levels, equivalent to an average loss of about $ 2,400 in household purchasing power, while also contributing to slower economic growth and higher unemployment domestically. Globally, key trade partners—including Canada, Mexico, China, and India—have faced economic slowdowns, export declines, and strained trade relations. Overall, the tariffs have fuelled inflationary pressures and heightened uncertainty, triggering negative spill overs across international markets and supply chains.. Throughout 2024, several persistent headwinds, including the ongoing Ukraine conflict, disruptions in the Red Sea, continued supply chain bottlenecks, trade disputes, and shifts in investment driven by evolving climate policies, shaped a cautiously stable yet complex global economic landscape.

(Source. World Economic Outlook, IMF, April 22, 2025)

Outlook

The global economy is expected to maintain a steady growth trajectory, with forecasts indicating expansion rates of 2.8% in 2025 and 3.0% in 2026. This positive outlook is supported by balanced recoveries in major economies, underpinned by stable demand conditions and easing inflationary pressures. Key emerging markets are anticipated to play a substantial role in this growth, driven by improvements in industrial output and consumer spending.

In the United States, economic growth is projected to moderate to 1.8% in 2025 and 1.7% in 2026, reflecting adjustments in the labour market and normalisation of household spending. The Eurozone is expected to experience a gradual recovery, with GDP growth rates of 0.8% in 2025 and 1.2% in 2026, mainly due to stronger consumer demand and lower inflation.

Globally, inflation rates are on a downward trend, although certain regions continue to confront persistent price pressures. Worldwide inflation is projected to decline to 4.3% in 2025 and further to 3.6% in 2026. Developed economies are likely to reach their inflation targets more rapidly than others, and monetary policy approaches will remain varied in response to the differing economic landscapes across countries.

(Source: World Economic Outlook, IMF (April 2025))

Indian Economy

Indias economy continued on a stable growth trajectory throughout FY 2024-25, reinforcing its status as a key player in the global economic landscape. According to the National Statistical Office (NSO), real GDP growth was estimated at 6.5% for the year, following a 9.2% increase in the previous fiscal. This performance reflects Indias robust macroeconomic fundamentals, sound policy framework, a dynamic services sector, and strong domestic consumption, all of which contribute to a positive long-term outlook.

Indias economic ranking has steadily advanced, placing it as the worlds fourth-largest economy by nominal GDP—having overtaken Japan— and third-largest by purchasing power parity. Strategic targets are in place to achieve a $5 trillion economy by FY 2027-28, with a long-term vision extending to $30 trillion by 2047. Attainment of these ambitious milestones depends on significant infrastructure investment, ongoing reforms, and accelerated technology adoption. Supporting this agenda, the capital investment outlay for FY 2025-26 has been raised to 511.21 lakh crores, amounting to 3.1% of GDP.

The governments focus on reforms and large-scale allocation toward both physical and digital infrastructure are central to sustaining this momentum and bolstering economic self-reliance. Initiatives such as Make in India 2.0, measures to improve the ease of doing business, and the Production-Linked Incentive (PLI) scheme aim to strengthen infrastructure, facilitate manufacturing and boost exports—cementing Indias position in the global manufacturing ecosystem. With inflation expected to return to target levels by late 2025, there is scope for a more accommodating monetary policy. Continued infrastructure development, supportive reforms, and programmes like the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) are also set to spur capital formation and support rural demand.

Outlook

Indias economy is positioned for robust growth, with a projected expansion of 6.2% in FY 2025-26. This outlook is supported by substantial investments in infrastructure, increased private sector capital expenditure, and the continued development of the financial services sector. Ongoing government reforms are expected to provide sustained momentum for the economy.

Several factors underpin this positive forecast, including Indias favourable demographic profile, rising capital investments, proactive policy initiatives, and strong consumer demand. Rural expenditure growth, facilitated by easing inflation, also contributes to the overall economic strength. The governments emphasis on capital spending and prudent fiscal management fosters a conducive environment for investment and consumption alike. Additional support stems from policies aimed at boosting business sentiment and consumer confidence.

The Union Budget for FY 2025-26 outlines a strategy focused on promoting growth while maintaining fiscal discipline. Key measures include enhancing disposable incomes, prioritising infrastructure projects, and encouraging domestic manufacturing. Notably, the increase in the income tax exemption threshold to S12.75 lakh per annum is expected to bolster middle-class purchasing power and stimulate consumer spending.

Industrial Overview Textile and Apparel Industry Global

The global textile market demonstrated substantial valuation at $1,976.84 billion in 2024 and is projected to reach $4,016.50 billion by 2034, indicating a compound annual growth rate (CAGR) of 7.35% from 2025 to 2034. This expansion is primarily propelled by a confluence of factors, including increasing consumer demand for natural fibres, growing eco-consciousness among consumers, and supportive governmental initiatives aimed at developing the textile sector. Further contributing to market growth are advancements in smart clothing technologies, the expanding reach of e-commerce platforms, and evolving fashion trends.

Key drivers for this growth encompass the rising demand for materials such as silk and wool, ongoing governmental efforts to promote the textile industry, continuous research and development in fabric manufacturing techniques, and an increasing need for protective clothing. The growing inclination towards online clothes shopping and the expanding utilisation of synthetic and cellulose fibres in various industrial applications also serve to accelerate market expansion.

A significant trend shaping the industry is the heightened awareness and subsequent demand for eco-friendly and sustainable textile products. This shift is leading to the implementation of stricter environmental regulations and the adoption of cleaner production methodologies across the sector. Despite these positive trends, the market faces challenges, notably high production costs stemming from escalating prices of raw materials, labour, and machinery.

Nevertheless, opportunities abound within the industry, particularly with the increasing adoption of smart clothing, also known as e-textiles or smart fabrics. These innovative products integrate embedded systems for monitoring human physiological functions and offer promising applications across sports, entertainment, and mining industries.

From a regional perspective, Asia Pacific commanded the largest market share in 2024, a position driven by the ready availability of raw silk, significant demand for fashionable apparel, and the widespread adoption of e-commerce. Looking ahead, North America is anticipated to emerge as the fastest-growing region, supported by rising per capita income, high living standards, and a sustained demand for durable clothing. Europe is also forecasted to experience considerable growth, stimulated by increasing consumer preference for organic fabrics and advantageous government policies promoting sustainable practices.

(Source: Precedence Research)

Indian

The textile and apparel industry contributes approximately 2.3% to the national GDP, around 13% to industrial output, and nearly 12% of the countrys total export earnings. It is also one of the largest employment-generating sectors, providing livelihoods to over 45 million people, both directly and indirectly, across the entire value chain, from cotton cultivation and yarn production to garment manufacturing and retail.

(Source: PIB)

Domestically, the Indian textile and apparel market is anticipated to grow at a strong CAGR of 10%, reaching $350 billion by 2030, with exports contributing $100 billion, offering a significant boost to companies with global ambitions. Additionally, the technical textiles sector is poised for substantial expansion, with the global market projected to hit $309 billion by 2047. Specifically, the Indian medical textiles segment, expected to grow at 15% to reach $22.45 million by 2027, which a rising demand in high-value, specialised applications. For companies in the textile industry, this growth trajectory highlights an ideal environment for scaling operations, diversifying product lines, and tapping into both traditional and emerging high-margin markets.

(Source: IBEF, Indian Textile Journal)

As of April 2025, cotton prices have seen a slight decrease of approximately 2.01% since the beginning of the year, which could potentially improve profit margins and enhance price competitiveness in both domestic and export markets. However, market projections indicate a phase of stability ahead, with prices expected to range from 5120-130 per kg throughout the year. This anticipated steadiness is largely due to improved balance in global supply and demand, alongside a more stable macroeconomic outlook.

Indias cotton production for the FY 2024-25 season is projected to decrease by 7% Y-o-Y, reaching approximately 30.2 million bales (bales of 170 kg each), primarily due to reduced acreage and crop damage from excessive rainfall. Consequently, cotton imports are expected to rise by 42% to 2.5 million bales, while exports may decline by 37% to 1.8 million bales.

(Source: The Economic Times, IBEF)

The increase in imports is further supported by lower international cotton prices and tariff uncertainties, making imported cotton more cost-effective for Indian buyers.

(Source: Reuters)

Indias textile industry is witnessing a strategic shift towards man-made fibres (MMF), aligning with global consumption trends where MMFs constitute approximately 77% of fibre usage. As of March 2025, the Indian government has decided to let its $23 billion PLI scheme lapse due to underperformance, with no further expansion planned. This decision affects sectors including textiles and MMF.

(Source: Business Standard, Reuters)

However, the MMF sector faces challenges such as fragmentation and higher logistical costs due to a lack of vertical integration. Efforts are underway to develop integrated fibre-to-fashion value chains to enhance competitiveness and meet the rising global demand for MMF-based textiles.

(Source: Business Standard)

Polyethylene Terephthalate (PET) Market

Global

The global Polyethylene Terephthalate (PET) market is a substantial and growing industry, driven by the versatile properties of PET and its extensive range of applications. Valued at an estimated $31.67 billion in 2024, the market is projected to expand to approximately $49.03 billion by 2034, demonstrating a CAGR of 4.47% from 2025 to 2034.

The primary factors propelling the growth of the PET market include its increasing adoption in the food and beverage packaging sector. PETs attributes, such as being shatterproof, lightweight, and non-reactive, make it an ideal material for bottled water and carbonated soft drinks. The burgeoning textile industry also plays a significant role, as PET is a key component in producing synthetic fibres like polyester, a demand further amplified by global population growth and the increasing focus on sustainable textiles. Furthermore, rising global PET recycling and collection rates, coupled with growing consumer preference for environmentally conscious and recyclable products, are contributing to market expansion.

However, the PET market faces notable challenges, primarily stemming from environmental concerns regarding its non-biodegradable nature. This issue necessitates robust waste management and recycling solutions. Stringent environmental regulations and the increasing demand for eco-friendly alternatives, are anticipated to moderate market growth.

Despite these hurdles, new opportunities are emerging. There is a growing demand for lightweight packaging solutions, particularly within the electronics and food industries. The continued expansion of the textile sector, alongside advancements in bio-based PET and technical textiles, presents new avenues for market development. The competitive landscape is expected to intensify, prompting companies to focus on developing innovative and cost-effective PET manufacturing technologies to enhance their market standing. Regionally, the Asia Pacific currently holds the largest market share and is expected to maintain its dominance throughout the forecast period, driven by escalating consumption of packaged food and rising demand for automobile films in countries like China and India.

(Source: Precedence Research)

Indian

The Indian PET and PBT resins market reached a valuation of $199.71 million in 2024 and is projected to grow to $306.65 million by 2033. This growth trajectory is supported by a CAGR of 4.88% from 2025 to 2033. Several key factors are driving this expansion, including the increasing demand from major sectors such as packaging, automotive, and electronics. The market is also benefiting from a rising preference for sustainable and recyclable plastics, as well as supportive government regulations that promote the use of eco-friendly materials.

The growing environmental consciousness among Indian consumers, coupled with stringent government regulations on waste management, is playing a significant role in propelling the demand for sustainable PET resins. This trend is particularly evident in the packaging, FMCG, and textile industries, which are increasingly adopting recycled PET (rPET). The governments Extended Producer Responsibility (epr) scheme is a major driver, mandating a minimum percentage of recycled plastic content in packaging and thereby boosting the demand for rPET to surpass one million tons by 2031.

In the automotive and electronics sectors, there is a surge in the adoption of Polybutylene Terephthalate (PBT) resins. This is due to PBTs superior properties, including high heat resistance, excellent electrical insulation, and lightweight nature. This trend is especially pronounced in the rapidly expanding electric vehicle (EV) market and the electronics manufacturing sector, where high-performance materials are essential. Government policies like the FAME II scheme further incentivize EV adoption and domestic manufacturing, which in turn fuels the demand for PBT-based components. These market dynamics highlight a broader shift towards high-performance, sustainable materials across Indias key industrial sectors.

(Source: Imarc Group)

Recycled Polyethylene Terephthalate (rPET) Market

Global

The global market for recycled polyethylene terephthalate (rPET) is poised for significant growth, with a projected increase from $32.53 billion in 2025 to approximately $47.82 billion by 2034, representing a CAGR of 4.33% over the forecast period. The Asia Pacific region is the dominant force in this market, holding a revenue share of around 40% and exceeding a valuation of $12.74 billion in 2024. This growth is largely driven by a global push for sustainability and circular economy initiatives, along with heightened consumer environmental awareness and a rising demand for sustainable product alternatives.

Recycled Polyethylene Terephthalate Market size 2024 to 2034 (USD Billion)

Key drivers include the increasing use of rPET in the food and beverage industry, where major companies are transitioning to bottles made from 100% recycled materials. Furthermore, supportive government regulations and policies, such as Japans Container and Packaging Recycling Act and Chinas 14th Five-Year Plan, are actively promoting resource efficiency and recycling, thereby fostering market expansion.

The market is segmented by product type and end-use, with the fibre segment accounting for the highest sales volume in 2024. In the product type segment, clear rPET holds the largest market share.

Despite its positive trajectory, the rPET market faces challenges. A key hurdle is consumer perception regarding the quality of recycled products, as concerns about contamination and durability can persist. Additionally, the lack of adequate infrastructure for the collection, sorting, and processing of PET waste remains a significant challenge, leading to limited availability of high-quality feedstock and increased operational costs.

These challenges are balanced by emerging opportunities, particularly the rising demand for rPET from the non-food sector. Recent corporate actions, such as the commissioning of new recycling plants and collaborations to advance chemical recycling for non-food PET materials, are also contributing to the markets expansion and highlighting the industrys focus on innovation.

(Source: Precedence Research)

Indian

The Indian recycled polyethylene terephthalate (rPET) bottles market was valued at $10.67 billion in 2023 and is projected to reach approximately $17.53 billion by 2030, growing at a CAGR of 7.35% from 2024 to 2030. This growth is a result of increasing environmental consciousness, demand for sustainable packaging, and supportive regulatory frameworks.

Market Attributes	Key Insights
Market Size in 2023	$ 10.67 Bn
Market Size in 2030	$ 17.53 Bn
Forecast Period 2024 to 2030 CAGR	7.35%

(Source: Maximize Market Research)

The markets current trajectory is marked by a significant shift towards the adoption of recycled materials, especially within the Fast-Moving Consumer Goods (FMCG) sector. This shift is being driven by factors such as:

Consumer Preference: Heightened concern for environmental conservation is pushing consumer preferences toward eco-friendly packaging. For example, on-pack messaging like "Recycle Me Again" by major beverage companies and the use of recycled PET in apparel for the Indian cricket team have been shown to increase consumer demand for sustainable products by 15-20%.

Government Regulations: The Extended Producer Responsibility (EPR) scheme is a major catalyst, mandating a minimum of 30% recycled plastic content in packaging by April 1, 2025, with a target of 60% by FY30. This regulation is expected to create a demand for approximately 3,50,000MT of B2B-grade rPET by FY26, potentially exceeding 1.1 million tons by FY30.

Industry Innovations & Investments: India has a well-established informal ecosystem for collection and recycling PET bottles, which is now being supported by large-scale investments from recycling companies to expand rPET production. New state-of-the-art facilities, such as the one launched by us at Warangal, are capable of recycling millions of PET bottles daily to produce food-grade rPET resins.

The rPET market in India is segmented by product type and grade:

Product Type: Clear rPET bottles currently dominate the market due to their widespread use in the beverage and personal care industries, where transparency is valued. However, the colored rPET segment is gaining momentum as industries seek differentiated, eco-friendly packaging solutions.

Grade: The food-grade rPET segment is the largest, driven by stringent quality standards and rising demand for safe, hygienic packaging in the food and beverage industry.

While the Indian rPET market is well-positioned for growth, it faces challenges in scaling up infrastructure and formalising its supply chain to meet the growing demand for B2B-grade rPET, which requires significant capital investment and technical expertise. However, the markets readiness to adopt global sustainability trends and a strong push from both corporate and government sectors suggest a promising future.

Company Overview

Ganesha Ecosphere Limited (GESL of the Company) is a leading Indian company specialising in PET waste recycling, transforming discarded plastic bottles into value-added products. A pioneer in the sector, GESL manufactures Recycled Polyester Staple Fibre (RPSF), Recycled Polyester Spun Yarn (RPSY), and dyed texturised yarn. These materials find wide application in diverse industries, including textiles for clothing and functional fabrics, as well as fillings for home furnishings and toys. The Company stands as the largest PET bottle recycler in India, having processed over 41+ billion PET bottles in the last decade, demonstrating its significant contribution to environmental sustainability and the circular economy.

GESL operates strategically located manufacturing facilities in Kanpur (Uttar Pradesh), Rudrapur

(Uttarakhand), and Bilaspur (Uttar Pradesh), boasting a combined production capacity of 118,800 TPA for RPSF and Yarn. The Company maintains an extensive pan-India network of scrap dealers for efficient raw material sourcing, ensuring a consistent supply of PET waste for its non-chemical recycling processes.

In recent times, Ganesha Ecosphere has undertaken several key initiatives and corporate developments. This includes the set up of Companys longest integrated rPET Chips production facility at Warangal (Telangana) at its wholly-owned subsidiary. Additionally, the Company launched "Go Rewise" in FY 2022-23 to enhance the plastic recycling loop and introduced rPET bottle grade chips in 2023.

These strategic moves, alongside adherence to regulatory standards, underscore the Companys operational effectiveness and commitment to growth.

Financial Overview Financial Performance FY 2024-25

(Rs. in Crore)

Particulars	Mar-25	Mar-24	YoY change
Operational Revenue	983.88	975.34	0.88%
Other Income	33.14	25.76	28.65%
Operating Expenses	888.38	875.60	1.46%
EBITDA	95.50	99.74	4.25%
EBITDA Margin (%)	9.71	10.23%	-5.08%
Finance Costs	4.78	15.17	-68.49%
Depreciation and Amortisation expenses	23.76	26.66	-10.88%
Profit after Tax	75.48	62.48	20.81%
Net Worth	1159.90	1,089.15	6.50%
Long-term Debt	0.83	2.44	-65.98%
Gross fixed assets (including capital work-in-progress)	541.29	518.04	4.49%
Inventory	233.06	206.01	13.13%
Inventory Days	93	92	-
Receivables	107.77	103.42	4.21%
Market Capitalisation	3946.70	2,496.68	58.08%

Key Financial Ratios

Particulars	Mar-25	FY 24
Debtors turnover (x)	9.17	9.79
Inventory turnover (x)	4.41	4.48
Interest coverage ratio (x)	21.94	6.52
Current ratio (x)	2.82	6.04
Debt-equity ratio (x) (taking into account both short and long-term borrowings)	0.092	0.003
Operating Profit Margin (%) (EBIT)	10.31	9.87
Net Profit Margin (%)	7.67	6.41
Return on Net Worth (%)	6.71	7.17

Risk Management

The Company has implemented a comprehensive Risk Management Framework designed to identify, assess, and actively manage risks through effective mitigation strategies. The Board, Risk Management Committee, and senior leadership across all levels foster a strong risk-aware culture, embedding risk management into routine business activities. This framework forms a critical component of the organisational structure, steering the execution of strategic plans. The management has identified the following key risks:

Risk Name	Description	Mitigation Strategy
Product Risk	The relevance of the companys products in the market may decline.	The company offers a diverse range of high-quality fibre and yarn products to meet the varied needs of its customers. Growing environmental awareness among consumers and conducive government policies are expected to drive product demand.
Competition Risk	Availability of comparable products, as well as intense competition from existing players and new entrants, could affect profitability.	The company constantly seeks to develop its R&D capabilities to distinguish itself from its competitors and to introduce new products and different variants of existing products based on customer preferences and demand, thereby increasing its margins. The company is an industry leader in the RPSF segment and possesses one of the largest B2B facilities in India in its Group.
Raw Material Risk	Volatility in raw material prices could impact business growth.	The Company possesses a diversified portfolio of 275+ suppliers across India. Our collection network enables the supply of PET waste from various sources, ranging from post-consumer scrap to industrial scrap. Our extensive collection network helped us mobilise an average of 350 Tons of PET waste per day at group level, showcasing our ability to source adequate raw material to feed our production lines.
Quality Risk	Failure to meet product quality standards and inefficient manufacturing processes could hinder business growth.	The company is dedicated to enhancing its quality systems and their effectiveness to reduce the incidence of such risks while simultaneously improving its operational efficiencies. We employ a stringent quality control mechanism at each stage of the manufacturing process to ensure that our finished product conforms to the exact requirements of our customers. With a strong quality control team working on new product development/ quality improvement, the focus of our Company continues to be on maintaining high levels of quality.
Customer Concentration Risk	Over-dependence on key customers could impact profitability if the company fails to retain them.	With a diverse product portfolio comprising superior and eco-friendly products, our products have found wide acceptance in the domestic and overseas markets. We constantly improve our product quality to meet stringent customer requirements. We are able to capitalise on our reputation for quality, consistent performance and customer satisfaction in our existing markets and product verticals to target new customers. Company is dealing with more than 300 customers and our top 5 customer accounts for less than 20% of our revenue.
Forex Risk	Fluctuations in foreign currency exchange rates could affect profitability.	The company manages currency risks by continuously monitoring exposures and prudently managing them within specified margins for each market segment. It hedges the exchange risk through forward contracts and natural hedging to minimise the impact of unfavourable fluctuations.
Regulatory Risk	Evolving regulatory regulations, including application of corporate and tax laws, may adversely affect our business, prospects and results of operations	The Company possesses a robust policy framework that ensures compliance with the relevant laws and regulations. We consistently monitor regulatory changes, staying up-to-date with our compliance and preventing instances of noncompliance and promoting governance.

Human Resources

At the Company, employees play a vital role in driving business growth. As of March 31, 2025, the permanent workforce comprised 2,276 individuals. The Company is dedicated to promoting a safe, transparent, healthy, progressive, and inclusive work environment to enhance employee productivity.

Internal Control Systems and their Adequacy

The internal control and risk management system is structured and applied in accordance with the principles and criteria established in the corporate governance practices of the organisation. It is an integral part of the general organisational structure of the Company and involves a range of personnel who act in a coordinated manner while executing their respective responsibilities. The Board of Directors offers its guidance and strategic supervision to the Executive Directors and management, monitoring and support committees.

Cautionary Statement

The Management Discussion and Analysis may incorporate certain statements deemed forward-looking. These statements are inherently subject to various risks and uncertainties. Actual results could materially deviate from those expressed, as significant factors such as government policies, local political and economic developments, industrial relations, and risks inherent to the Companys growth may influence operations.

Market data and product analysis presented herein are derived from internal Company reports, alongside industry and research publications. However, their accuracy and completeness cannot be guaranteed, nor can their absolute reliability be assured.