Net Avenue Technologies Ltd Management Discussions

Financial Year 2025-26

96%

68% 50%+ 30+

of operating income from gross margin, up from 58% of orders are customised countries served worldwide exports

1. Industry Overview

1.1 International Market and the Diaspora Opportunity

Indias global diaspora is estimated at approximately 35 million people spread across more than 180 countries, of which the United States, United Kingdom, Canada and Australia - the Companys primary overseas markets - together account for close to 9.6 million people. This diaspora base, combined with second- and third-generation consumers who retain a strong cultural connection to Indian festive and wedding traditions, continues to underpin sustained overseas demand for authentic Indian ethnic wear. Large online marketplaces such as Amazon in the United States are estimated to sell Indian ethnic wear products worth over USD 100 million annually, underlining the scale of the addressable opportunity even outside dedicated ethnic-wear platforms.

Figure 2: Indian Diaspora in the Companys Primary Export Markets

Source: Ministry of External Affairs, Gol. Global Indian diaspora = 35.4 Mn across 30+ countries.

Demand from the diaspora is driven principally by three recurring occasions: major festivals such as Diwali and Eid, which remain significant cultural events even outside India; weddings, which continue to be one of the single largest drivers of ethnic wear purchases internationally; and the comfort, breathability and craftsmanship associated with natural and sustainably sourced Indian fabrics, which increasingly resonates with consumers seeking an alternative to mass-produced fast fashion.

The global ethnic wear market remains a large and structurally growing segment of the wider apparel industry, estimated in the range of USD 94-100 billion in 2024 and forecast to grow at a compound annual rate of roughly 6-8% over the coming decade on the back of rising cultural affinity, festive and wedding-related spending, and expanding online retail penetration. Within this, the India-linked ethnic wear opportunity - spanning both the domestic market and exports to the diaspora - continues to be one of the fastest-growing pockets of the category.

1.2 Domestic (India) Market

The India ethnic wear market was valued at approximately USD 19 billion in 2023 and is projected to reach approximately USD 30.4 billion by 2030, growing at a CAGR of around 6.9%. India accounted for roughly a fifth of global ethnic wear revenue in 2023 and is expected to remain the largest single-country market through the decade. The market continues to be heavily skewed towards the unorganised sector, which accounts for an estimated 80-85% of the category, while the organised, branded segment is growing considerably faster, at an estimated 20% annually, as consumers migrate towards consistent quality, sizing and after-sales service. Womens wear continues to dominate category revenue, though mens and kids ethnic wear are expanding off a smaller base.

Figure 1: India Ethnic Wear Market Size (USD Billion)

India Ethnic Wear Market - Growing at 6.9% CAGR (2023-2030E)

Source: Grand View Research, India Ethnic Wear Market Outlook, 2023-2030

2. Trade Policy Environment: US Tariffs

The United States is the Companys single largest export market, and US trade policy toward Indian textile and apparel imports has been unusually volatile over the past year. Reciprocal tariffs of around 25% were in effect through mid-2025, before an additional oil-linked surcharge raised the effective rate to as high as 50% from August 2025, materially impacting the competitiveness of Indian apparel exporters, particularly smaller and mid-sized players. Following the US-India trade agreement announced in February 2026, tariffs were reset sharply lower to around 18%, and a subsequent Supreme Court ruling striking down the earlier emergency-powers-based tariffs replaced country-specific rates with a more moderate, broad-based Section 122 duty structure, bringing the effective rate on Indian apparel and textile imports down to approximately 10% by mid-2026, before base MFN duties are added on top.

Figure 3: US Tariff Trajectory on Indian Apparel/Textile Imports

Source: Press coverage of the Feb 2026 US-India trade agreement and post-EEPA Section 122 tariff regime; indicative, varies by HS code.

While this easing is a meaningful positive relative to the peak of the crisis, the tariff and trade-policy environment remains fluid, with several of the underlying provisions subject to periodic renewal and possible further negotiation. The Company continues to closely track developments in this area given their direct bearing on landed cost competitiveness in its largest market.

3. Company Overview and Growth Strategy

The Company sells Indian ethnic wear through cbazaar.com , primarily targeting the global Indian diaspora, and today serves customers in more than 30 countries, with the United States, United Kingdom, Canada and Australia as its major markets. A core element of the Companys value proposition is custom stitching and made-to-measure tailoring offered at scale - over 50% of orders processed during the year were customised - supported by a proprietary technology platform. Exports account for approximately 84% of the Companys operating income, reflecting the primarily overseas, diaspora-oriented customer base.

3.1 Key Growth Drivers

? Sustained demand for customised, made-to-measure ethnic wear among the diaspora population, a segment underserved by mainstream fast-fashion retailers

? Rising disposable incomes among overseas Indian households, particularly in North America, the UK and Australia

? A large and growing Indian wedding and celebration wear market, driven by increased consumer spending on occasion-based dressing

? Increasing consumer preference for appropriate, festival- and occasion-specific ethnic wear rather than generalised traditional clothing

3.2 Strategic Priorities

? Deepen penetration in key existing markets - the United Kingdom, Canada and Australia - alongside the core US market

? Scale up RaiR, the Companys exclusive hand-embroidered collection, as a premium differentiator

? Build brand awareness and consideration through focused social media and digital marketing

? Continue diversifying the country mix to reduce concentration risk in any single overseas market

4. Discussion on Financial Performance

Revenue from operations for the year decreased by 4% compared to the previous year, while the net loss for the year narrowed by 51% year-on-year, reflecting improved cost efficiency and margin management. The Companys export business grew 5% during the year and continued to be maintained at a healthy gross margin of 70%. On an overall basis, gross margin improved to 68% from 58% in the previous year. Gross margin is computed inclusive of fabric conversion and redesign charges as part of cost of goods sold; in the statutory financial statements, these charges are classified within other expenses.

Figure 4: FY26 Financial Highlights

5. Human Resources and Industrial Relations

As on 31st March 2026, the Company employed 51 people, of whom approximately 22% were women. There were no material developments on the industrial relations front during the year.

6. SWOT Analysis

STRENGTHS

? Proprietary technology platform enabling large-scale, made-to-measure customisation

? Proven ability to execute customised orders at scale, with over half of all orders being customised

? Established, recognised brand among the Indian diaspora with a presence in 30+ countries

? Healthy and improving gross margin profile (68% in the current year)

OPPORTUNITIES

? Rising disposable incomes and an expanding middle class in key overseas markets

? Structural shift from the unorganised to the organised, branded retail segment

? Second- and third-generation diaspora consumers embracing fusion and occasion wear

? Diversification into UK, Canada, Australia and other emerging diaspora markets

WEAKNESSES

? Inconsistent supply chain reliability affecting fulfilment timelines

? Inadequate third-party logistics infrastructure for cross-border apparel shipments

? High dependence on a single market (United States) for a large share of exports

THREATS

? Continued volatility in US trade policy and tariff structures

? Freight and logistics rate volatility impacting landed costs and margins

? Growing competition from organised players and global marketplaces entering ethnic wear

? Currency fluctuation risk given the high share of foreign-currency revenue

7. Risks and Concerns

The most significant external risk facing the Company continues to be US trade policy, given the concentration of export revenue in that market. While effective tariffs on Indian apparel imports have eased considerably from the 50% peak reached in August 2025 to approximately 10-18% through the first half of 2026 (Section 2), several elements of the current tariff structure remain time-bound and subject to renewal or renegotiation, and the Company continues to evaluate contingency options, including accelerating growth in the UK, Canada, Australia and other diaspora markets to reduce reliance on any single geography.

? Continued uncertainty around the permanence of the current, more favourable US tariff regime

? Volatility in international freight and logistics rates, which can materially impact landed cost and profitability

? Inconsistency in the domestic supply chain and reliance on third-party logistics infrastructure, which can affect fulfilment timelines for customised, made-to-order products

? Increasing competition from organised retail players and global marketplaces expanding into the ethnic wear category

? Foreign exchange rate volatility, given the high proportion of revenue denominated in foreign currency

The Company is evaluating options to navigate the evolving trade environment and continues to prioritise deepening its presence in the United Kingdom, Canada, Australia and other key overseas markets, alongside building brand awareness through social media marketing, to diversify away from reliance on any single market.

Key Financial Ratios

On behalf of the Board For NET AVENUE TECHNOLOGIES LIMITED

Sd/- Rajesh Nahar Chairman cum Managing Director DIN: 01015059

Place: Chennai Date: 10/08/2026