Ganesha Ecosphere Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Global economic overview

The global economic growth remained stagnant at 3.5% in 2024 and 2025, as the effects of the war in the Middle East were largely offset by accelerated demand-driven momentum in the global technology cycle, powered by advances in artificial intelligence (AI) and its adoption. The impact has varied widely across countries-energy exporters outside the conflict zone benefited from favourable terms of trade, while economies integrated into the technology value chain saw stronger activity even where they were energy importers, whereas energy importers with limited participation in the technology upturn, a group that includes many low-income countries, experienced weaker activity.

Advanced economies remained broadly stable at 1.9% in both 2024 and 2025, while emerging market and developing economies also held steady at 4.5% in 2025 compared to 4.5% in 2024.

Global inflation moderated sharply in 2025, declining to an estimated 4.1% from 5.8% in 2024, continuing the multiyear disinflation trend that had been in place since the beginning of 2024.

Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook Update assumes that the reopening of the Strait of Hormuz begins in mid-September 2026, with conditions broadly returning to the prewar state of affairs by March 2027, consistent with commodity price assumptions based on market pricing as of June 10, 2026.

Under this outlook, global growth is projected at 3.0% in 2026, before recovering to 3.4% in 2027. Global inflation is expected to rise to 4.7% in 2026, as the disinflation trend since 2024 stalls, before easing to 3.9% in 2027.

(Source: IMF World Economic Outlook Update-July 2026, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan)

Indian economic overview

The Indian economys real GDP grew at 7.7% in FY 2025-26, compared to 7.1% in FY 2024-25. This growth was driven by strong consumption and increasing investments, reaffirming Indias position as the fastest-growing major economy.

Indias real GDP at Constant Prices was estimated at Rs.323.12 Lakh crore in FY 2025-26, compared with H299.89 Lakh crore in FY 2024-25. Inflation remained benign through much of FY 2025-26, with full-year CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment. However, macro stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.88% during FY 2025-26 - its steepest fall since FY 2011-12-touching Rs.94.83 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Indias market capitalisation declined to 7.2% in FY 2025-26 to USD 4.5 trillion from USD 4.83 trillion in FY 2024-25, marking the sharpest drop since FY 2022-23. The BSE Sensex declined 7% or 5,467 points in FY 2025-26 and similarly, the Nifty 50 fell 5.05%, or 1,188 points, in FY 2025-26. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures under Donald Trump, which weighed on global investor sentiment. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures under Donald Trump, which weighed on global investor sentiment.

Amid global uncertainty, India remains resilient, supported by strong domestic demand, low inflation, policy support and structural reforms. The World Bank estimates FY 2026-27 growth at approximately 6.6%, with India expected to remain the fastest-growing major economy.

Consumption, investment recovery, GST rationalisation, stable exports and favourable demographics will support growth. While risks from elevated energy prices, fiscal pressures and global demand uncertainty persist, Indias strong macroeconomic fundamentals and expanding trade linkages should reinforce its position as a key driver of global growth.

(Source: Upstox, Economic Times, India Today, 5paisa, Livemint, The Logical Indian)

INDUSTRIAL OVERVIEW

Textile and apparel industry

Global

The global textile and apparel industry continues to expand, supported by rising consumption, evolving fashion trends, growing e-commerce penetration and increasing adoption of advanced textile technologies. The market was valued at USD 2,123.72 billion in 2025 and is projected to reach approximately USD 4,273.09 billion by 2035, growing at a CAGR of 7.24% between 2026 and 2035.

Growth is being driven by a combination of structural and cyclical factors. Rising consumer demand for natural fibres, increasing utilisation of synthetic and cellulose-based fibres across industrial applications, growing demand for protective clothing, and continuous innovation in fabric manufacturing are supporting industry expansion.

The emergence of smart textiles and wearable technologies is creating additional opportunities across healthcare, sportswear, industrial applications and consumer electronics.

A notable shift within the global textile industry is the increasing emphasis on sustainability and responsible sourcing. Consumers, regulators and global brands are placing greater importance on environmentally responsible products, resulting in stricter environmental standards, greater supply-chain transparency requirements and increasing adoption of recycled materials. This transition is accelerating investment in recycled polyester capacity, traceability systems and circular manufacturing models across major textile-producing regions.

The industry is also witnessing a gradual reconfiguration of global supply chains. Geopolitical developments, changing trade dynamics and the diversification strategies of global brands are encouraging manufacturers to establish more resilient and geographically diversified sourcing networks. These developments are creating opportunities for countries with established manufacturing ecosystems and strong sustainability credentials.

Despite strong long-term fundamentals, the industry continues to face challenges arising from higher raw material costs, wage inflation, rising energy costs and capital expenditure requirements. Nevertheless, the increasing adoption of sustainable textiles and smart fabrics is expected to create significant growth opportunities over the medium to long term.

Regionally, Asia-Pacific accounted for approximately 54% of the global market in 2025, supported by strong manufacturing capabilities, abundant raw material availability and expanding consumer demand. North America is expected to emerge as the fastest- growing region, driven by rising disposable incomes and demand for durable apparel, while Europe continues to benefit from growing consumer preference for sustainable and organic textile products.

India

Indias textile and apparel industry remains one of the countrys most important manufacturing sectors, contributing approximately 2% of national GDP and around 11% of manufacturing gross value added (GVA). The sector accounts for 8.63% of Indias total exports and provides direct employment to more than 45 million people, while supporting an additional 100 million livelihoods across allied activities.

India is currently the worlds second- largest producer of textiles and garments and the third-largest exporter, with a 4.6% share of global textile trade. The industry has reached an estimated size of nearly USD 190 billion in FY 2025-26 and is expected to expand to approximately USD 350 billion by 2030. Textile exports are projected to contribute nearly USD 100 billion by the end of the decade, highlighting the sectors growing global competitiveness.

Non-woven textiles are a significant and growing end-use segment for recycled polyester staple fibre (RPSF), spanning hygiene and medical disposables, geotextiles, automotive interiors and filtration. Indias non-woven fabrics market, valued at around USD 1.5 billion in 2024, is projected to reach nearly USD 2.3 billion by 2030, growing at ~7.6% CAGR. Growth is supported by demand for healthcare disposables, infrastructure-led geotextiles, filtration media and automotive components.

Domestic demand remains a key growth driver, supported by rising disposable incomes, favourable demographics, urbanisation and deepening e-commerce penetration. The domestic market is expected to grow at a CAGR of 10-12%, while the sectors contribution to Indias GDP is projected to increase to nearly 5% by 2030.

Indias export performance remained resilient despite a challenging global trade environment. Textile and apparel exports, including handicrafts, increased from USD 35.87 billion in FY 2023-24 to USD 37.75 billion in FY 2024-25, reflecting the sectors diversified market presence and improving competitiveness.

Government initiatives are further supporting recycled and sustainable fibres. The Union Budget 2026-27 earmarks Rs.405 crore under the PLI scheme for MMF apparel and technical textiles, while the National Technical Textiles Mission has approved 168 projects, including research in geotextiles and speciality fibres. Together, these measures reinforce the long-term demand and innovation ecosystem for recycled fibre-based applications.

Indias raw material ecosystem has also strengthened during the year. Cotton production for the 2025-26 season is estimated at 292.15 Lakh bales, while the Cotton Corporation of India expanded its procurement network from 508 centres to 571 centres across 150 districts in 11 states, helping improve farmer support and supply chain stability.

At the same time, technical textiles are emerging as a major growth avenue. Under the National Technical Textiles Mission, multiple research projects across composites, geo-textiles, smart textiles and textile machinery have been approved in collaboration with leading institutions including IITs, NITs and CSIR laboratories. These initiatives are expected to strengthen Indias innovation capabilities and support the development of higher-value textile products.

Collectively, these developments position India favourably within the evolving global textile landscape. The combination of strong domestic demand, supportive government policies, expanding manufacturing capabilities and increasing adoption of sustainable materials is expected to strengthen the countrys role as a preferred sourcing destination for global brands.

(Source: IBEF, Precedence Research)

Polyethylene Terephthalate (PET) market

Global

Polyethylene Terephthalate (PET) continues to be one of the worlds most widely used polymers, owing to its versatility, durability, lightweight properties and recyclability. Demand remains closely linked to growth in food and beverage packaging, textiles, consumer goods and industrial applications, making PET an integral material within both consumer and manufacturing value chains.

The global PET market was valued at USD 35.68 billion in 2025 and is projected to reach approximately USD 56.40 billion by 2034, expanding at a CAGR of 4.96% between 2026 and 2034.

Historically, growth in PET consumption has been driven by the packaging industry, particularly bottled water, carbonated beverages and food packaging applications. PETs combination of strength, clarity, safety and lightweight characteristics continues to make it the preferred material for these applications. At the same time, increasing polyester consumption within the textile sector remains an important demand driver, particularly across emerging economies with expanding middle-class populations.

A defining trend within the global PET industry is the gradual transition from virgin resin consumption towards circular material systems. While virgin PET continues to account for approximately 76% of global shipments, recycled PET is expected to expand at a significantly faster CAGR of 8.02%. This divergence highlights a structural shift in demand patterns, with sustainability considerations increasingly influencing purchasing decisions across both packaging and textile industries.

The industry is also witnessing rapid technological advancements in recycling processes. Developments in mechanical and chemical recycling technologies are improving material quality, enabling the production of food-contact-grade recycled PET with properties increasingly comparable to virgin resin. These innovations are expected to accelerate the adoption of recycled materials while supporting regulatory and sustainability objectives globally.

While environmental concerns surrounding plastic waste continue to present challenges for the industry, they are simultaneously driving investments in collection infrastructure, recycling technologies and circular economy initiatives. Consequently, the future growth of the PET industry is expected to be increasingly linked to recycling efficiency and sustainable material adoption rather than purely incremental consumption growth.

India

The Indian PET industry continues to demonstrate strong growth, supported by expanding demand across packaging, textiles, automotive and consumer goods sectors. Rising urbanisation, changing consumption patterns and increasing packaged product penetration have strengthened demand for PET-based solutions across a wide range of end-use applications.

Beyond traditional demand drivers, the Indian market is undergoing a significant transformation driven by sustainability considerations and evolving regulatory requirements. Increasing environmental awareness among consumers and businesses is accelerating the adoption of recycled and recyclable packaging materials, particularly within the FMCG, beverage and textile sectors.

Indias PET demand growth remains anchored in packaging, with carbonated beverages, packaged water, dairy, liquor and pharmaceutical bottling as the largest consumption segments. The India PET market generated revenue of USD 1,856.1 million in 2024 and is projected to reach USD 2,598.6 million by 2030, growing at a CAGR of 5.7%, with packaging remaining the largest and fastest-growing application segment. Looking ahead, growth is expected to be increasingly shaped by Indias recycled- content mandates effective from 2025, which have already spurred capacity investments by domestic players, alongside FMCG firms sustainability commitments and rising rPET adoption in the textile sector.

This points to a future where recycling infrastructure and food-grade rPET technology, rather than virgin resin volumes alone, determine competitiveness in Indias PET industry over the coming decade.

Within engineering plastics, demand for Polybutylene Terephthalate (PBT) is also witnessing growth, particularly in automotive, electronics and electric vehicle applications. Supported by government initiatives such as FAME II and increasing domestic manufacturing activity, demand for lightweight and high-performance polymer solutions is expected to remain strong.

Taken together, rising consumption, supportive regulations and a well- developed recycling ecosystem position India as one of the most attractive PET and recycled PET markets globally over the coming decade.

(Source: IMARC Group; National Recycling Corporation, Mordor Intelligence, Grandview Research, Mordor Intelligence, 6Wresearch)

Recycled polyethylene terephthalate (rPET) market

Global

The recycled polyethylene terephthalate (rPET) industry has evolved from a niche sustainability segment into a strategically important component of the global plastics value chain. Regulatory mandates, corporate ESG commitments and increasing consumer awareness are collectively accelerating the shift towards recycled content across packaging and textile applications.

The global recycled polyethylene terephthalate (rPET) market was valued at USD 19.50 billion in 2025. The market is projected to reach USD 38.98 billion by 2034, representing a CAGR of 8.0% between 2026 and 2034.

The industrys growth trajectory is being driven by a fundamental change in how brands approach packaging and material sourcing. Sustainability is increasingly becoming a commercial requirement rather than a differentiating feature.

Large multinational consumer goods companies have established ambitious recycled-content targets, creating sustained demand for high-quality food-grade and bottle-grade rPET across global markets.

Regulatory intervention is further reinforcing this demand. Measures such as the European Unions SingleUse Plastics Directive, which mandates minimum recycled content levels in plastic bottles, have transformed rPET into a compliance-driven material.

As a result, recycled PET increasingly commands strategic importance within packaging supply chains and, in many instances, a premium over virgin alternatives.

Despite robust growth prospects, the industry continues to face challenges relating to collection infrastructure, feedstock availability and quality consistency in several regions. Nevertheless, increasing investments in advanced sorting, washing and recycling technologies are expected to improve operational efficiency and support future capacity expansion.

India

Indias recycled PET industry is entering a phase of structural growth, supported by the convergence of regulatory mandates, sustainability commitments and capacity expansion across the recycling ecosystem.

Indias plastic governance framework, anchored in the Plastic Waste Management (PWM) Rules, 2016 and the Extended Producer Responsibility (EPR) regime, has emerged as a key structural driver for the recycling industry. EPR targets have progressively increased from 35% in FY 2021-22 to 100% by FY 2024-25. The 2026 amendments mark a strategic shift from collection-based obligations to market-driven compliance by mandating minimum recycled content in plastic packaging, beginning at 30% in FY 2025-26 and increasing to 60% by FY 2028-29. These requirements are expected to generate demand for approximately 4 Lakh MTPA of B2B-grade rPET by FY 2025-26, rising to over 10-12 Lakh MTPA by FY 2029-30.

The significance of these regulations extends beyond compliance. They are fundamentally reshaping procurement behaviour among brand owners and packaging companies, transforming recycled PET from a voluntary sustainability initiative into an operational necessity. As implementation progresses, demand visibility for food-grade and bottle-grade recycled materials is expected to strengthen significantly.

India possesses a unique advantage in this transition. The country already records one of the worlds highest PET bottle recycling rates at approximately 92%, recycling around 1.75 million metric tonnes out of 1.9 million metric tonnes of PET bottles consumed annually. In addition to reducing waste, recycled PET production consumes approximately 70% less energy than virgin PET manufacturing, further reinforcing its environmental and economic appeal.

Indias current recycling ecosystem provides a strong foundation for future growth. The country benefits from an extensive collection and sorting network, supported by both organised and informal participants. The market is also witnessing increasing investment in state-of-the-art recycling facilities capable of producing food-grade recycled resin for packaging applications. Such investments are expected to strengthen domestic supply chains and reduce dependence on imported recycled materials while supporting the sustainability objectives of major FMCG and beverage companies.

Within product categories, clear rPET bottles continue to dominate demand due to their widespread use in beverage and personal care packaging. However, coloured rPET products are gradually gaining acceptance as manufacturers explore differentiated and environmentally responsible packaging solutions. Food-grade rPET remains the largest and most strategically important segment, driven by stringent quality requirements and rising demand from food and beverage brands seeking compliant recycled-content solutions.

Looking ahead, Indias rPET industry is expected to benefit from a rare alignment of regulatory support, consumer awareness, brand commitments and investment activity.

As recycled content transitions from a sustainability aspiration to a regulatory obligation, organised recyclers with scale, certifications and established collection networks are likely to emerge as the primary beneficiaries of the sectors long-term growth.

(Source: IMARC Group, Future Market Insights, Price Watch AI)

Company overview

Ganesha Ecosphere Limited ("GESL" or "the Company") is one of Indias leading circular economy enterprises, engaged in converting post-consumer PET waste into high-quality recycled polyester and recycled PET products. Through its integrated recycling ecosystem, the Company transforms discarded plastic bottles into value-added materials that serve the textile, packaging, technical textile, home furnishing and industrial sectors. Today, the Company recycles over 150,000 tonnes of PET waste annually and processes more than 8.5 billion PET bottles each year through its expanding recycling network.

GESLs business has evolved from recycled polyester fibre manufacturing into a diversified recycled PET platform. Its product portfolio now includes Recycled Polyester Staple Fibre (RPSF), Recycled Polyester Spun Yarn (RPSY), dyed texturised yarn, rPET bottle-grade chips, textile-grade rPET chips, rPET filament yarn, washed flakes and other value-added recycled products. These offerings support customers across apparel, technical textiles, packaging, home furnishings and other end-use industries.

The Company operates six manufacturing facilities across Uttar Pradesh, Uttarakhand, Telangana and Nepal, with a total recycling capacity of 185,940 tonnes per annum. Supporting these operations is a robust sourcing ecosystem comprising over 300 suppliers and collection partners across India, enabling the mobilisation of nearly 450 tonnes of PET bottle waste every day.

Under its GoRewise platform, the Company has expanded into food-grade and bottle-grade rPET applications, addressing the growing demand for sustainable packaging solutions. The Company is also deepening its presence in sustainable textiles, with its rFilament yarn recently qualifying with a leading global textile brand, opening new avenues for growth.

Financial overview

Financial performance FY 2025-26

			(Rs. in Crore)
Particulars	March 2026	March 2025	Y-o-Y change
Operational Revenue	1014.10	983.88	3.07%
Other Income	39.80	33.14	20.09%
Operating Expenses	957.15	888.38	7.74%
EBITDA	56.95	95.50	(40.37)%
EBITDA Margin (%)	5.62	9.71	(42.15)%
Finance Costs	6.91	4.78	44.34%
Depreciation and Amortisation expenses	25.37	23.76	6.78%
Profit after Tax	47.83	75.48	(36.63)%
Net Worth	1297.21	1159.90	11.84%
Long-term Debt	0.90	0.83	7.66%
Gross fixed assets (including capital work-in-progress)	545.57	541.29	0.79%
Inventory	168.43	233.06	(27.73)%
Inventory Days	83	93	(10.75)%
Receivables	132.77	107.77	23.21%
Market Capitalisation	2282.62	3946.70	(42.16)%

Kev financial ratios

Particulars	March 2026	March 2025	% Change	Reasons
Debtors turnover (x)	8.31	9.17	(9%)	-
Inventory turnover (x)	4.98	4.41	13%	-
Interest coverage ratio (x)	10.33	21.94	(53%)	Due to decrease in profits
Current ratio (x)	2.30	2.82	(18%)	-
Debt-equity ratio (x) (taking into account both short and long-term borrowings)	0.092	0.092	-	-
Operating Profit Margin (%) (EBIT)	5.62	9.71	(42%)	Due to higher raw material costs
Net Profit Margin (%)	4.72	7.67	(39%)	Due to higher raw material costs and expenses
Return on Net Worth (%)	3.89	6.71	(42%)	Due to lower profits

Key business strengths

Pioneer scale and market leadership:

Ganesha Ecosphere is among the largest PET bottle recyclers in India, commanding a significant share of the countrys annual PET waste recycling throughput. This position - built over more than three decades - has translated into deeply entrenched sourcing relationships, customer trust, and operational expertise that newer entrants cannot replicate at speed or comparable scale.

Diversified and integrated product portfolio:

The Company operates across an extensive range of recycled polyester products - spanning recycled polyester staple fibre, spun yarn, filament yarn, and food-grade rPET granules - serving a broad domestic and international customer base across multiple end- use segments including apparel, home furnishings, technical non-wovens, and rigid packaging. This breadth of product and customer mix provides structural revenue resilience across sectoral and demand cycles.

Research-driven quality products:

Under its GoRewise brand, the Company has adopted "super-clean" technology approved by global regulatory bodies to produce rPET resin with near-virgin-like properties, alongside continuous R&D investment aimed at improving process efficiency and product consistency.

Robust sourcing infrastructure:

The Companys extensive collection network-built across hundreds of suppliers and sourcing channels spanning postconsumer and industrial PET scrap-constitutes a critical and difficult-to- replicate competitive moat. The ability to consistently mobilise large volumes of quality PET waste at scale underpins production continuity and provides meaningful insulation against supply- side disruptions.

Certifications & Qualifications:

The products and operations have various national and international certifications and approvals. These certifications position the Company favourably as global and domestic brand owners seek compliant, audited recycled material sources. Details are provided at page 19.

Growth drivers

EPR recycled content targets: Indias Plastic Waste Management rules mandate a progressive and steep increase in mandatory recycled plastic content across packaging categories through the end of the decade. This legislated demand trajectory effectively converts a large and growing share of rPET offtake from discretionary to nonnegotiable, providing multi-year volume visibility and structural pricing support for established, certified producers like the Company.

Structural supply-demand gap:

Domestic demand for food-grade rPET - driven by EPR mandates - is projected to significantly outpace available certified supply capacity for the foreseeable future. The Company, as one of a small number of FSSAI- and internationally certified rPET producers, is well-placed to capture the bulk of incremental mandated demand as compliance obligations are enforced with increasing rigour.

Premiumisation:

The Company is progressively shifting its revenue mix towards higher-margin product categories-including food-grade rPET granules, recycled filament yarn, and specialty fibres-which command meaningfully better margins than commodity RPSF. As the share of these segments in the revenue mix grows, the Companys overall profitability profile is expected to improve materially.

Global sustainability mandates:

Large multinational consumer goods and retail brands have committed to significant recycled content targets in their packaging and textiles, often exceeding local regulatory minimums, in response to investor and consumer pressure.

This creates a growing export opportunity for a supplier of the Companys scale and certification credentials, independent of domestic policy direction.

Circular economy as industrial policy:

The Indian governments broader push towards a circular economy-reflected across plastic waste, textile recycling, and sustainability-linked infrastructure investment-creates a favourable long-term policy environment for the Companys entire business model.

This policy tailwind is expected to manifest in continued regulatory support, government incentives, and preferential access to industrial parks and infrastructure.

Textile-to-textile opportunity:

Textile-to-textile (T2T) recycling remains at an early stage, accounting for less than 1% of global fibre production, but is expected to emerge as a high-growth segment through 2030 as collection and sorting infrastructure improves, fibre-to-fibre technologies mature and regulation strengthens.

India offers an additional structural opportunity, with the Ministry of Textiles estimating the domestic textile recycling industry could reach ~USD 3.5 billion by 2030, supported by ~7.1 million tonnes of annual textile waste. Recycled polyester is expected to remain the leading commercial opportunity, while T2T recycling provides a longer-term growth avenue as feedstock availability, technology economics and blended-fibre challenges improve.

(Source: Ministry of Textiles, Textile Magazine)

Risk and mitigation strategies

Area of Risk	Brief	Mitigation measures
Market	Virgin polymer price risk: A sustained decline in crude oil and virgin PET/polyester prices narrows the cost differential between virgin and recycled alternatives, weakening the price incentive for voluntary rPET procurement in segments and geographies.	The Company is progressively shifting its product mix toward higher-value applications — food-grade rPET granules, recycled filament yarn and specialty fibres — where demand is driven by regulatory mandates and brand ESG commitments rather than price arbitrage against virgin polymer.
Financial	Foreign exchange fluctuations: Exports account for approximately 9% of revenue, exposing the Company to currency movements, particularly against the US Dollar and Euro.	The Company actively monitors forex exposures and uses forward contracts and natural hedging arrangements to limit the impact of adverse currency movements.
Raw material	PET scrap availability and price volatility: Rising demand for PET waste from different segments viz. rPSF, rPET, straps, sheet/films and export market coupled with high degree of price volatility, compressing margins when finished-product realisations do not move commensurately.	A diversified supplier base of 300+ vendors across India, sourcing from post-consumer and industrial scrap channels, mobilises approximately 450 tonnes of PET waste per day at the Group level. This collection network, built over three decades, provides resilience against supply disruptions and constitutes a competitive moat.
Operational	Operational safety risk: Recycling, washing, shredding, extrusion and granulation processes involve safety-sensitive operations that necessitate strict process controls, training and continuous monitoring.	The Company maintains stringent safety policies, risk assessments, employee safety manuals and training processes across its manufacturing facilities, and has obtained ISO 45001:2018 certification for occupational health and safety.
Quality	Quality compliance: As the Company scales into food-grade and food-contact rPET applications, quality thresholds and certification requirements become significantly more demanding, raising the consequence of any non-conformance in terms of customer dissatisfaction, returns and reputational damage.	A multi-stage quality control mechanism spans the entire manufacturing process, backed by a dedicated quality control team driving continuous improvement. FSSAI & US FDA approvals and EFSA positive opinion for the Groups food-grade rPET operations reflect the rigour of its quality systems and reinforce credibility with global brand customers who conduct independent supplier audits.
Financial	Working capital risk: Timely procurement of PET scrap, inventory holding, receivables management and funding support are of critical importance amid a volatile input-cost environment.	The Company oversees inventory, receivables, payables, price exposures and funding requirements through internal controls, treasury processes and management review mechanisms to maintain working capital discipline.
Strategic	Intensifying competition: The growing commercial attractiveness of rPET, particularly, driven by EPR mandates and brand sustainability commitments, is drawing new entrants — including large integrated petrochemical and packaging players — while a rising number of FSSAI-approved processors is introducing incremental pricing pressure in the industry.	The Group continually strengthens its R&D capabilities to differentiate its offerings and introduce new products aligned with evolving customer preferences. As an industry leader in the RPSF segment and operator of one of Indias largest B2B recycling facilities, it leverages three-plus decades of operational expertise, an established sourcing network and regulatory certifications to sustain its competitive position.
Export	Export market and geopolitical risk: The Company exports to 19+ countries; adverse developments including tariff and non- tariff barriers can curtail international sales and compress realisations on affected volumes.	The Companys sale is more focused towards domestic demand. The Company also actively monitors trade policy developments and recalibrates its geographic revenue mix in response. Customer presence across 19+ countries provides flexibility to reallocate supply as market conditions shift.
Regulatory	Regulatory and compliance execution risk: The Company operates in an evolving regulatory environment where changes in corporate, environmental, taxation and other regulations/ laws could increase compliance costs, constraining operational flexibility and create uncertainty in demand planning.	The Company maintains a robust compliance framework with continuous monitoring of regulatory developments. Constant monitoring of regulatory changes enables it to remain compliant.

Human resources

Refer page 29 for Human Capital

Internal Control Systems and Their Adequacy

Ganesha Ecosphere maintains an internal control framework aligned with the scale, nature, and complexity of its operations.

The framework covers procurement, inventory management, traceability, production processes, quality checks, sales, receivables, treasury, hedging, foreign exchange exposure, and statutory compliance.

The Company places robust emphasis on segregation of duties, approval-based transactions, periodic reconciliations, material movement tracking, and independent reviews. Its ERP-enabled systems support the accuracy of financial reporting, operational monitoring, inventory traceability, and compliance documentation.

The Company also undertakes periodic audits and management reviews to assess the effectiveness of internal controls, with identified observations addressed through corrective actions. This systematic supervision supports financial integrity, regulatory compliance, operational discipline, and effective management of risks across the recycling value chain.

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.