Ganesha Ecoverse Ltd Management Discussions

The global economy remained relatively stable in 2024, with global GDP rising around 3.2% according to the IMF. Growth was uneven—advanced economies slowed, while developing nations, especially in Asia, continued to expand steadily. India overtook Japan to become the worlds fourth-largest economy and is projected to climb to third with a GDP of ~$7.3 trillion by 2030.

Yet, the outlook was clouded by fresh uncertainties—Chinas launch of "DeepSeek" and hiking of import tariffs rattled supply chains and heightened geopolitical fragmentation. Trade barriers sparked fears of retaliation, dampening investment flows and complicating inflation control. Ongoing challenges such as the Ukraine war, Red Sea disruptions, supply-chain bottlenecks, trade disputes, and climate-driven shifts in investment further shaped a cautiously steady global economic environment.

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

Real GDP Growth	2024	2025 (P)	2026 (P)
World Output	3.3	2.8	3.0
Advanced Economies	1.8	1.4	1.5
Emerging Markets and Developing Economies	4.3	3.7	3.9

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Outlook

The global economy is projected to maintain a steady growth path, with GDP expected to expand by 2.8% in 2025 and 3.0% in 2026. This outlook is supported by balanced recoveries across major economies, easing inflation, and improving demand, particularly in key emerging markets where industrial output and consumer spending continue to strengthen. In the United States, growth is forecast to moderate to 1.8% in 2025 and 1.7% in 2026, reflecting a cooling labour market and normalization in household consumption. The Eurozone is also expected to see a gradual recovery, with GDP growth reaching 0.8% in 2025 and 1.2% in 2026, driven by stronger consumer demand and declining inflation. Globally, inflation is on a downward trend, projected to fall to 4.3% in 2025 and 3.6% in 2026. While advanced economies are likely to reach their inflation targets sooner, monetary policies will remain varied as countries adapt to their specific economic conditions. (Source: World Economic Outlook, IMF (April 2025))

Indian Economy

Indias economy maintained a stable growth trajectory in FY 2024–25, with real GDP estimated at 6.5%, driven by strong domestic consumption, a dynamic services sector, and solid macroeconomic fundamentals. Now the worlds fourth-largest economy by nominal GDP and third by purchasing power parity, India is targeting a $5 trillion economy by FY

2027–28 and $30 trillion by 2047. Achieving these goals will depend on continued infrastructure investment, policy reforms, and technology adoption.

For FY 2025–26, the capital investment outlay has been raised to 11.21 lakh crore (3.1% of GDP), reinforcing long-term growth. Sustainability is a key priority, with rising investments in green energy, electric mobility, and the National Green Hydrogen Mission supporting the net-zero 2070 target. Government initiatives like ‘Make in India 2.0, the PLI scheme, and digital infrastructure development aim to boost manufacturing, exports, and economic self-reliance. With inflation expected to ease by late 2025, there may be room for a more accommodative monetary stance. Meanwhile, welfare programmes such as PMGKAY and ongoing reforms are set to further strengthen rural demand and capital formation.

GDP Growth

FY 2021-22	FY 2022-23	FY 2023-24	FY 2024-25 (E)	FY 2025-26 (P)
9.7%	7.6%	9.2%	6.5%	6.2%

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Outlook

India is poised for strong growth in FY 2025–26, with GDP projected to expand by 6.2%, driven by robust infrastructure investment, rising private sector capex, and continued development in financial services. The positive outlook is supported by favourable demographics, strong consumer demand, easing inflation, and proactive government reforms.

The Union Budget for FY 2025–26 balances growth and fiscal discipline, focusing on infrastructure, domestic manufacturing, and improved disposable incomes. A key measure—raising the income tax exemption threshold to 12.75 lakh—is expected to boost middle-class consumption and overall economic momentum.

Further Indian Government in a recent bold indirect tax policy, in September 2025, unveiled GST 2.0, streamlining tax rates to two slabs (5% and 18%) plus a 40% surcharge on luxury and sin goods. Daily essentials, food items, dairy, insurance, education, and healthcare staples are now taxed minimally or exempt. Appliances, small vehicles, and autos are taxed at 18%. These reforms aim to cushion consumers, spur demand, and counter tariff shocks, with modest inflation relief and manageable fiscal impact.

Industrial Overview

Textile and Apparel Industry

Global

The global textile market was valued at $1,976.84 billion in 2024 and is projected to reach $4,016.50 billion by 2034, growing at a CAGR of 7.35%. Key growth drivers include rising demand for natural fibres, eco-conscious consumer behavior, government support, and innovations in smart clothing and fabric technologies. The expansion of e-commerce, evolving fashion trends, and increased use of synthetic and cellulose fibres in industrial applications also contribute to growth.

Asia Pacific led the market in 2024 due to abundant raw materials and strong e-commerce adoption. North America is expected to grow fastest, driven by high living standards and durable clothing demand, while Europe benefits from consumer preference for organic fabrics and sustainable policies.

Challenges include high production costs from rising raw material and labor prices. However, opportunities lie in smart textiles, which integrate technology for applications in sports, entertainment, and mining.

Indian

Indias textile and apparel sector contributes 2.3% to GDP, 13% to industrial output, and 12% to export earnings, employing over 45 million people across the value chain. The domestic market is projected to grow at a CAGR of 10%, reaching $350 billion by 2030, with $100 billion from exports. The technical textiles segment is also expanding, with the global market expected to hit $309 billion by 2047. Notably, Indias medical textiles are forecasted to grow 15% annually, reaching $22.45 million by 2027.

As of April 2025, cotton prices fell by 2.01%, improving margins, though production is expected to drop 7% YoY to 30.2 million bales, prompting a 42% rise in imports and a 37% decline in exports. Lower global prices and tariff uncertainties make imports more attractive.

India is also shifting towards man-made fibres (MMF), which account for 77% of global fibre use. However, the sector faces challenges like fragmentation and high logistics costs. The governments $23 billion PLI scheme has been discontinued due to underperformance, but efforts are underway to build integrated ‘fibre-to-fashion value chains to boost competitiveness.

(Source: PIB, IBEF, Indian Textile Journal, The Economic Times, Reuters, Business Standard)

Company Overview:

During the financial year 2024–25, On standalone basis, total income of the Company was 1057.54 lakh as against 1238.49 lakh during the previous financial year 2023-24. During the year under review, the Company has reported a loss of 146.43 lakh as against the profit of Rs. 423.05 lakh in the last financial year.The decline in performance of the Company was primarily due to the provision made by the Company towards the accumulated dividend payable on Preference shares of the Company and the mark-to-market (MTM) loss on its investment portfolio due to adverse movements in the equity market.

Further the Company undertook several significant strategic initiatives aimed at strengthening its presence in the textile sector and enhancing long-term value creation. On October 10, 2024, the Company completed a Rights Issue, allotting 1,34,15,250 equity shares of 10 each at a price of 35 per share (including a premium of 25), raising 4,695.33 lakh. Following this allotment, the paid-up equity share capital increased to 2,459.46 lakh, comprising 2,45,94,650 equity shares. These newly issued shares rank pari-passu with the existing equity shares in all respects. The proceeds from the Rights Issue were primarily deployed to fund a strategic investment in the recycled textile segment, reinforcing the Companys long-term commitment to sustainable manufacturing.

On October 22, 2024, the Company invested 4,649.50 lakh in GESL Spinners Private Limited (GSPL), subscribing to 2,73,50,000 equity shares of 10 each and acquiring a 44.39% stake. This investment positioned GSPL as an Associate Company. GSPL is engaged in the production of textile-grade spun yarn and sewing thread made from Recycled Polyester Staple Fibre (RPSF), a product segment that closely aligns with the Companys core textile business and growing sustainability focus. The capital infusion into GSPL was utilised for debt reduction and the procurement of plant and machinery, as outlined in the Rights Issue Letter of Offer dated September 03, 2024.

Unfortunately, in August 2024, GSPLs yarn spinning facility sustained extensive damage due to a severe storm and flooding, resulting in a six-month operational halt and financial losses amounting to 3,012.62 lakh. Despite this setback, the facility has since resumed operations, and GSPL continues to function as a going concern. Recognising the strategic importance of this associate and the long-term value it brings to the Companys textile portfolio, the Board of Directors, at its meeting held on May 30, 2025, approved the proposal for the merger of GSPL with the Company. This consolidation is expected to create synergies in production and enhance operational efficiencies, particularly in the recycled fibre and sustainable yarn segment.

In line with broader operational realignment, and following the approval of the shareholders via a Special Resolution passed through Postal Ballot on February 20, 2025, and the subsequent approval of the Regional Director, the Board approved the shifting of the Companys registered office, from P3-211, Second Floor, Central Square, 20, Manohar Lal Khurana Marg, Bara Hindu Rao, Delhi – 110006, to Gata No. 192 & 196, Village - Temra, Tehsil - Bilaspur, District Rampur – 224921, Uttar Pradesh. This move is expected to provide better administrative integration with the Companys operational centres and manufacturing facilities.

The strategic decisions undertaken during the year reflect the Companys forward-looking approach, particularly its focus on sustainable textile solutions, capacity expansion, and long-term value creation. Despite external disruptions affecting its associate company, the Company remains resilient and is well-positioned to capture future growth opportunities in the evolving global textile landscape.

Financial review

The Company achieved a total income of 1057.54 lakh during FY 2025 as against 1238.49 lakh during FY 2024. During the year under the review, the Company has incurred a loss of 146.43 Lakh.

Key financial ratios

Particulars	Financial year ended March 31, 2025	Financial year ended March 31, 2024
Debtors turnover (x)	22.20	2.68
Inventory turnover (x)	120.61	100.09
Interest coverage ratio (x)	*	5.01
Current ratio (x)	9.30	10.38
Debt-equity ratio (x)	0.37	2.10
Operating Profit Margin (%)	*	51.40%
(EBIT)*
Net Profit Margin (%)	*	71.40%
Return on Equity (%)	*	49.71%

Note: For details please refer to the accounting ratios provided in Notes to the Financial Statements (statement of accounting ratios). *Ratios are Not Applicable in View of Loss.

Risk management

The risk management is an ongoing process and the Board members periodically review the business risks and minimization procedures. The Company is expected to have various internal and external risks. The Textile industry in which the Company is operating is itself facing risks in demand, cheaper imports, higher tariffs from USA etc. Accordingly, Company is also exposed to these risks as well as internal risks like delay in merger of GSPL with the Company, migration to main board of BSE, risks and losses of associate company (GSPL).

Human resource review

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

Internal control systems and their adequacy

The internal control system is an integral part of the general organizational structure of the Company. The Board of Directors offers its guidance and strategic supervision to the Executive

Directors and management. The Audit Committee also regularly reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

Cautionary statement

The statements in the ‘Management Discussion and Analysis section describing the Companys objectives, projections, estimates and prediction may be considered as 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, expenditures 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 realised. 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.