Libas Consumer Products Ltd Management Discussions

The global economy proved more resilient than expected in the first half of 2025, but the growth outlook remains weak. With monetary policy becoming increasingly visible and a weaker-than-expected recovery in China, global growth in 2025 is projected to be lower than in 2024. While headline inflation has been declining, core inflation remains persistent, driven by the services sector and still relatively tight labour markets. Risks continue to be tilted to the downside. Inflation could continue to prove more persistent than anticipated, with further disruptions to energy and food markets still possible. A sharper slowdown in China would drag on growth around the world even further. Public debt remains elevated in many countries. The world economy was expected to grow by 3.0% in 2025, before slowing down to 2.7% in 2025. A disproportionate share of global growth in 2024-25 is expected to continue to come from Asia, despite the weaker-than-expected recovery in China. Headline inflation has continued to come down in many countries, driven by the decline of food and energy prices in the first half of 2025. However, core inflation inflation excluding the most volatile components, energy and food hasnt significantly slowed. It remains well above central banks targets. A key risk is that inflation could continue to prove more persistent than expected, which would mean interest rates need to tighten further or remain higher for longer.

Outlook

The recent conflict in the Middle East, coming on top of the Russian Federations invasion of Ukraine, has heightened geopolitical risks. Conflict escalation could lead to surging energy prices, with broader implications for global activity and inflation. Other risks include financial stress related to elevated real interest rates, persistent inflation, weaker-than-expected growth in China, further trade fragmentation, and climate change-related disasters. Against this backdrop, policy makers face enormous challenges and difficult trade-offs. International cooperation needs to be strengthened to provide debt relief, especially for the poorest countries; tackle climate change and foster the energy transition; facilitate trade flows; and alleviate food insecurity. Emerging Market and Developing Economy (EMDE) central banks need to ensure that inflation expectations remain well anchored and that financial systems are resilient. Elevated public debt and borrowing costs limit fiscal space and pose significant challenges to EMDEs - particularly those with weak credit ratings - seeking to improve fiscal sustainability while meeting investment needs. Commodity exporters face the additional challenge of coping with commodity price fluctuations, underscoring the need for strong policy frameworks. To boost long-term growth, structural reforms are needed to accelerate investment, improve productivity growth, and close gender gaps in labour markets

Indian Economy and Outlook Economy

India turned its story around in one decade - one that saw populism breakthrough in the West in 2016, demonetization in 2017, the shadow banking crisis of 2018, a once-in-a-lifetime pandemic in 2020, the highest inflation in 40 years in the West (which still continues), and two wars since early

Annual Report 2024-25/66

2022. Despite uncertainties, India managed to sail ahead while building its ship. India took determined and focused actions to convert know-how and capabilities into unique products and solutions. Indias emphasis on using technology to accumulate and diffuse tacit knowledge, building high-end manufacturing capacity, and improving competitiveness through exports formed the three necessary catalysts that boosted its growth trajectory and improved its economic fundamentals over the years. Gross Good and Services Tax (GST) revenue for March 2025 witnessed the second highest collection ever at 1.78 lakh crore, with a 11.5% year-on-year growth. FY 2023-24 marks a milestone with total gross GST collection of 20.18 lakh crore exceeding 20 lakh crore, a 11.7% increase compared to the previous year. Indias economy is projected to grow by 6.5% in 2025, according to a report by the UN which also noted that an increasing trend of multinationals extending their manufacturing processes into India to diversify their supply chains will also have a positive impact on Indian exports, while moderating commodity prices will be beneficial to the countrys import bill As per UN Trade and Development (UNCTAD) report, India grew by 6.7% in 2025 and is expected to expand by 6.5% in 2025, continuing to be the fastest-growing major economy in the world. “The expansion in 2025 was driven by strong public investment outlays as well as the vitality of the services sector which benefited from robust local demand for consumer services and firm external demand for the countrys business services exports,” the report said, adding that these factors are expected to continue to support growth in India in 2025.

Outlook

The global economy is expected to witness a synchronous rebound in 2025 as major election uncertainties get sorted out and the central banks of the West may announce a couple of rate cuts later in 2024. Analysing changed market conditions, Deloitte has revised Indias annual economic growth prediction from 7.6% to 7.8% and estimated the countrys GDP growth to be around 6.6% in FY 2024-25 and 6.75% in the current fiscal as markets learn to factor in geopolitical uncertainties in their investment and consumption decisions. Strong growth numbers over the past two years have helped the economy to catch up with the pre-COVID trends. Investment, backed by strong government spending on infrastructure, has helped India maintain a steady recovery momentum. The difference between actual GDP from the pre-COVID GDP levels is progressively narrowing as growth picks up pace. However, there were concerns about inflation and geopolitical uncertainties feeding into higher food and fuel prices. At the same time, the prediction of above normal monsoon would likely provide some respite by positively impacting agriculture output and easing pressure on food prices. Inflation is expected to remain above the Reserve Bank of Indias target level of 4% over the forecast period due to strong economic activity

The Indian Apparel industry is one of the most distinctive in the world because of its ancient techniques and cultural traditions. In the vastness of India, it is but natural that its different parts, in addition to having their own unique cultures and languages, also have a variety in clothing. With the rise of urbanization and the country adopting traditional values at an increasing pace, the fashion and apparel industries are on the wheel of adaptation. Revenue in the Apparel market amounts to US$ 96.47bn in 2023. (Source: https://www.statista.com/outlook/cmo/apparel/india)

The domestic market is expected to continue to grow strongly until Financial Year 2025, clocking up to INR 8.1 trillion to INR 8.2 trillion, registering a CAGR of about 18% to 20% between Financial Years 2022 and 2025.

Indian wedding and celebration wear market in India

(Source: CRISIL Research)

Ethnic wear in India accounted for about 32% of the overall apparel retail market in India as of Financial Year 2020. Womens ethnic wear is the largest segment of the overall market as it has found acceptance in both daily wear and office-wear categories, apart from the Indian wedding and celebration wear category. It includes lehengas, kurtis, sarees and salwar kameez. Mens ethnic wear is the second-largest category and has a share of approximately 10% of the overall ethnic market. It is dominated by the Indian wedding and celebration wear market which accounted for approximately 80% of mens ethnic wear sales and includes sherwanis, kurta jacket sets, kurta pajama, Indowestern apparel, etc. Acceptance of ethnic wear during festivals and wedding functions is leading to overall growth of the mens ethnic wear market. Kids ethnic wear accounts for the remaining 9% of the ethnic apparel market.

Salt business

Salt market forecast projected to reach $19.4 billion by 2030, with global industrial salt market forecast expected at a CAGR of 3.2% from 2021 to 2030. Globalisation and influence of western culture in developing economies are boosting the demand for sea salt as well as the sea salt markets future trends. The growing interest of consumers in foreign cuisine, such as Italian and French food that require flavors and seasonings, is likely to drive sales of sea salt and also the sea salt market opportunities.

A shift towards the market of branded ready-made garment is being observed.

Increased Disposable Income and Purchasing Power of Indian Customer opens New Market Development.

More number of emerging malls and retail industries are providing opportunities to industrys segments likehandicrafts and apparels.

There is a provision of more FDI and investment opportunities.

Subsidy from the central government to give boost to the home textiles Industry.

Threats

Continuous Quality Improvement is the need of hour as there are different demand pattern all over the world.

Striking a balance between the quality and price of products.

Changes in market trends, fashion and consumer preferences and increase in Competition that are largely beyond our control could adversely affect our business, financial condition, results of operations and prospects. Our cost of fabrication is exposed to fluctuations in the prices of material. Natural calamities and force majeure events may have an adverse impact on our business. Political instability or changes in the Government could adversely affect economic conditions in India generally and our business in particular.

Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price. We may suffer loss of income, if our products/designs are duplicated by our competitors.

Wefacecompetitioninourbusinessfrombothdomesticandinternationalbrands.Suchcompetition would have an adverse impact on our business and financial performance. Our insurance coverage may not adequately protect us against future unforeseen liabilities and this may have a material adverse effect on our business. Other types of risks include Strategic Risk, Business Risk, Finance Risk, Environment Risk, Personnel Risk, Operational Risk, Reputation Risk, Regulatory Risk, Technology Risk, etc. Your company aims at enhancing and maximizing shareholders value by achieving appropriate tradeoff between risk & returns.

The Company has a well-established framework of internal controls in all areas of its operations, including suitable monitoring procedures and competent personnel. In addition to statutory audit, the financial controls of the Company at various locations are reviewed by the Internal Auditors, who report their findings to the Audit Committee of the Board. The Audit Committee is headed by an Independent Director and this ensures independence of functions and transparency of the process of supervision. The Committee meets on a regular basis to review the progress of the internal audit initiatives, significant audit observations and planning and implementation of the follow-up action required. The Company conducts its business with integrity and high standards of ethical behaviour and in compliance with the all applicable laws and regulations that govern its business.

Please refer financial statement.

The man machine combination is balanced optimally as the Company believes that Human Resource is one of the most vital resources and a key pillar in providing the Organization a competitive edge in current business environment. A motivated and efficient workforce can help it attain its target in a realistic manner. Taking cognizance of that fact, the Company provides extensive training to its employees in order to develop their skill sets and keep them motivated. The Company appreciates the productive co-operation extended by its employees in the efforts of the management to carry the Company to greater heights. The industrial relations in all units of the Company continue to be cordial.

The statements made above may be construed as Forward Looking Statements within the meaning of the applicable laws and regulations. Actual performance of the Company may vary substantially depending upon the business structure and model from time to time. Important external and internal factors may force a downtrend in the operations of the Company.