Mihika Industries Ltd Management Discussions

A. Overview of the Global Economy:

The global economy remained resilient during 2025 despite continued geopolitical tensions, elevated trade and policy uncertainties, financial market volatility and disruptions to global supply chains. While global economic activity demonstrated resilience, the outlook remained subject to significant downside risks arising from geopolitical developments, trade restrictions, commodity price movements and tighter financial conditions.

According to the International Monetary Fund (IMF), global growth is projected at 3.1% in 2026 and 3.2% in 2027. The global economic outlook continues to be influenced by geopolitical tensions, trade policy developments, commodity price fluctuations and the pace of disinflation. The IMF has highlighted that a prolonged geopolitical conflict, renewed trade tensions, increased fragmentation of global trade and tighter financial conditions could adversely affect global economic activity.

Emerging markets and developing economies continue to contribute significantly to global growth, although their performance remains sensitive to external demand, capital flows, commodity prices and global financial conditions. Against this backdrop, businesses across sectors are increasingly focusing on supply-chain resilience, cost optimisation, technological adoption and diversification of markets.

Overall, while the global economic environment remains uncertain, continued domestic demand, technological advancement and investment in infrastructure are expected to provide support to economic activity.

B. Overview of the Indian Economy:

The Indian economy continued to demonstrate strong resilience and sustained growth during FY 2025-26. According to the provisional estimates released by the National Statistical Office (NSO), real Gross Domestic Product (GDP) is estimated to have grown by 7.7% during FY 2025-26, while nominal GDP recorded growth of 8.9%. Real Gross Value Added (GVA) is estimated to have grown by 7.9% during the year. The Secondary and Tertiary sectors recorded growth of 8.8% and 9.3%, respectively, while the Primary sector grew by 3.2%.

The performance of the Indian economy continued to be supported by resilient domestic consumption, investment activity, infrastructure development, manufacturing and services. The Governments focus on infrastructure development, digitalisation, manufacturing, logistics and improving the overall business environment is expected to continue supporting economic activity.

The Economic Survey 2025-26 also highlighted the resilience of the Indian economy and the continued strengthening of domestic economic fundamentals.

Indias growth prospects remain favourable; however, external risks including global trade uncertainties, geopolitical tensions, commodity price volatility and fluctuations in global financial conditions may continue to influence the economic environment.

C. Outlook:

Mihika Industries Limited remains cautiously optimistic about its business outlook for FY 2026-27. The Company intends to strengthen and expand its trading activities across commodities and fabrics while focusing on prudent procurement, efficient inventory management and development of its customer base.

The Company proposes to explore opportunities in high-demand and value-added textile and fabric segments and selectively expand its presence in commodity trading. The increasing adoption of technology across supply chains provides opportunities to improve procurement, inventory monitoring, transaction processing and customer engagement.

The Company also intends to explore opportunities in Tier 2 and Tier 3 markets, where increasing retail activity, urbanisation and the growth of garment and textile manufacturing clusters may support demand for quality fabrics.

The Company will continue to monitor market conditions closely and adopt a disciplined approach towards procurement, inventory management, working capital and customer credit exposure.

D. Industry structure and development:

The Indian trading industry remains highly fragmented, with a large number of small and medium-sized enterprises operating across commodity and textile value chains. Traders play an important role in connecting producers, aggregators, processors, manufacturers, distributors and end consumers.

The commodity trading industry continues to be influenced by agricultural production, weather conditions, government policies, minimum support prices, commodity prices, transportation costs, warehousing infrastructure and domestic as well as international demand.

The textile and fabric trading industry is influenced by cotton and other fibre prices, yarn and fabric demand, consumer preferences, apparel and garment manufacturing activity, export demand and changes in global trade conditions.

Increasing digitalisation of supply chains, electronic marketplaces, improved logistics infrastructure and organised warehousing are contributing to greater transparency and efficiency in trading activities.

Indias large domestic market, expanding consumer base, improving infrastructure and continued policy focus on manufacturing, logistics and digitalisation provide a supportive environment for businesses operating across the trading and distribution value chain.

E. Opportunities and Threats:

Opportunities:

1. Digitalization and technology adoption: Increasing digitalization of trading and supply-chain processes provides opportunities to improve operational efficiency, transaction transparency, inventory management and customer reach.

2. Growth in textile and fabric demand: Rising consumer spending, expansion of organised retail, growth of the apparel industry and increasing demand for quality fabrics provide opportunities for expansion in the fabric trading segment.

3. Growth in commodity markets: Continued domestic consumption and development of agricultural and commodity supply chains may provide opportunities for traders with efficient procurement and distribution capabilities.

4. Improved logistics and warehousing: Development of transportation, warehousing and supply- chain infrastructure can facilitate efficient sourcing and distribution and support better inventory management.

5. Expansion into emerging markets: Increasing economic activity in Tier 2 and Tier 3 cities provides opportunities for expanding the Companys customer and distribution network.

Threats:

1. Commodity price volatility: Fluctuations in commodity and raw material prices may affect procurement costs, inventory valuations and trading margins.

2. Weather-related risks: Adverse weather conditions and changes in agricultural production may affect the availability and prices of commodities.

3. Regulatory and policy changes: Changes in government policies, import and export regulations, taxation, commodity regulations and other applicable laws may affect trading activities.

4. Demand and market risks: Changes in consumer preferences, textile demand, domestic consumption and global economic conditions may affect the Companys sales and margins.

5. Credit and counterparty risks: Delays in collection or defaults by customers and counterparties may adversely affect working capital and financial performance.

6. Geopolitical and global trade risks: International trade restrictions, tariffs, geopolitical tensions and disruptions in global supply chains may affect commodity and textile markets.

F. Segment-wise or Product-wise performance:

The Company operates in One Primary Segment i.e. "Trading and Distribution ".

G. Future Outlook:

The Company remains focused on establishing sustainable and profitable growth across its trading and distribution activities.

In the commodities segment, the Company expects opportunities to arise from continued domestic consumption, development of agricultural supply chains and improvements in logistics and warehousing infrastructure. The Company will continue to evaluate opportunities based on market conditions, procurement availability and expected trading margins.

In the fabrics segment, demand is expected to be supported by the continued development of the apparel and textile industry, consumer demand for quality products and the expansion of organised retail and distribution networks. The Company will continue to explore opportunities in value-added and higher-demand fabric categories.

The Company intends to focus on strengthening its procurement and distribution capabilities, broadening its customer base, improving inventory management and adopting technology-enabled processes. At the same time, the Company will maintain a prudent approach towards working capital, credit exposure and market risks.

H. Risks and concerns:

As a trading and distribution company, Mihika Industries Limited is exposed to various business and financial risks, including market risk, commodity price volatility, credit risk, liquidity risk, operational risk, regulatory risk and supply-chain disruptions.

The Companys business may also be affected by fluctuations in commodity and fabric prices, changes in customer demand, transportation costs, availability of goods, government policies and broader economic conditions.

The Company continuously monitors market conditions and seeks to mitigate identified risks through prudent procurement practices, appropriate inventory management, customer assessment and regular monitoring of receivables and market developments.

I. Internal control systems and their adequacy:

The Company has adequate internal control systems commensurate with its size, nature and scale of operations. The internal control framework is designed to ensure orderly and efficient conduct of business, safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

The Companys internal controls are periodically reviewed and evaluated, and necessary improvements are made as and when required. Internal audit and verification procedures are undertaken at regular intervals, and significant observations, wherever applicable, are reviewed by the management and the Audit Committee.

The Company remains committed to strengthening its internal control framework and ensuring compliance with applicable statutory and regulatory requirements.

J. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for FY 2025-26, including the key financial indicators and comparison with the previous financial year, is set out in the Directors Report and the financial statements forming part of this Annual Report.

During the year under review, the Company continued to focus on its trading and distribution activities, with emphasis on procurement, customer relationships, inventory management and operational efficiency.

K. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

L. Caution Statement:

Statements made in this Management Discussion and Analysis describing the Companys objectives, expectations, estimates, plans or projections may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations.

These statements are based on certain assumptions and expectations concerning future events and are subject to various risks and uncertainties. Actual results could differ materially from those expressed or implied due to various factors, including changes in economic conditions, market conditions, commodity prices, government policies, regulatory requirements, taxation laws, geopolitical developments, demand conditions and other internal and external factors.

The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

Registered Office:		By the Order of the Board of,
ASO- 432 on the 4th (Fourth) Floor at Rajarhat It Park Ltd, at Plot No- 2C/I, Action Area II C, RAJARHAT, New Town, Kolkata, North 24 Parganas, North 24 Parganas, North 24 Parganas, West Bengal, India - 700 161		Mihika Industries Limited
Corporate Office:
F-607, Titanium City Centre, Near Sachin Tower, Satellite, Jodhpur Char Rasta, Ahmedabad, Ahmadabad City, Gujarat, India - 380 015	Sd/-	Sd/-
	Yagnik Vasant Prajapati	Bipinbhai Becharbhai Prajapati
Place: Ahmedabad	Director	Managing Director
Date: 17th July, 2026	DIN:11400573	DIN:11000222