Ganesha Ecoverse Ltd Management Discussions

Global Economy

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.

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 ^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 ^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 202425, 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.

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 fastestgrowing 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.

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 ^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.

Ganesha Ecoverse Limited ("the Company") is engaged in dealing with plastic and textile products, including trading of post-consumer PET bottle waste and scrap, and holds a strategic 44.39% associate stake in GESL Spinners Limited ("GSL"), which processes Recycled Polyester Staple Fibre (RPSF) into textile-grade spun yarn and sewing thread — positioning the Company within Indias expanding recycled-PET value chain at a time when regulatory recycled-content mandates are strengthening structural demand for the sector.

The year under review was an eventful one for the Company. GSLs manufacturing facility, which had suffered extensive storm and flood damage in August 2024, continued its recovery through the year, with capacity utilisation progressively improving to over 80%.

On 30th June, 2026 the Board of Directors of the company have approved the scheme of amalgamation of the Company with GESL Spinners Limited by way of absorption and dissolution of the Company without winding up. The scheme was approved with the objective of strategic consolidation of business activities, integration of business synergies, strong financial capability of the single entity, focused management and unified strategic direction, significant reduction in multiplicity of legal and regulatory compliances etc.

Upon Scheme becoming effective and in consideration of the Arrangement, the equity and preference shareholders of the Company will get the equity and preference shares of GESL Spinners Limited.

During the year, the Company has relocated its registered office to Gata No. 192 & 196, Village Temra, Tehsil- Bilaspur, District Rampur, Uttar Pradesh.

On a standalone basis, the Company reported total income of Rs. 152.60 lakh for the year ended March 31, 2026, against Rs. 1057.54 lakh in the previous financial year 2024-25, and a profit of Rs. 124.79 lakh as against the loss of Rs. 146.42 lakh in the previous financial year, on a standalone basis due to reversal of accumulated dividend accrued on Redeemable Cumulative Preference Shares.

The Companys standalone performance for the year continued to be affected by mark-to-market (MTM) losses on its investment portfolio amid a volatile equity market — a year in which the BSE Sensex and Nifty 50 recorded their sharpest annual declines since the pandemic.

The performance of the associate (GSL): Operations continued their recovery from the August 2024 storm and flood damage, with capacity utilisation improving to over 80% during the year even as the associate remained loss-making.

Risk management is an ongoing process, with the Board periodically reviewing business risks and mitigation measures. In addition to industry-level risks — such as demand fluctuations, competition from cheaper imports, and tariff-related uncertainty — the Companys principal risks during the year included: the pace and completion risk associated with the Scheme of Amalgamation with GSPL, including regulatory and shareholder approvals; continuing losses at GSPL pending full recovery of its manufacturing capacity and volatility in the Companys investment portfolio.

The Company endeavors to foster a work environment that is secure, transparent, healthy, forward-thinking and inclusive, with the aim of enhancing employee productivity.

The internal control system is an integral part of the Companys overall organisational structure. The Company maintains an internal control framework aligned with the scale, nature, and complexity of its operations. The Board of Director provides guidance and strategic supervision to the Executive Directors and management. The Audit Committee regularly reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and predictions may be considered forward-looking statements. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market positioning, expenditure and financial results, are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent developments, information or events.