Orbit Exports Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW

A YEAR OF TRADE SHOCKS AND A LATE-YEAR GEOPOLITICAL TEST

The global economy moved through FY 2025-26 under sustained pressure, first from a wave of tariff increases initiated by the United States through 2025, and then, in the closing months of the year, from a fresh geopolitical shock as conflict broke out in the Middle East. Growth held up better than many feared, but the path was not smooth.

The International Monetary Funds outlook shifted several times over the course of the year as conditions changed. Its January 2026 update placed global growth at a resilient 3.3% for calendar year 2026, as the drag from tariffs was expected to fade. By April 2026, with the Middle East conflict underway, the IMF revised this down to 3.1%, and by July 2026 to 3.0%, reflecting the wars impact on energy prices and vulnerable economies, partly offset by strong AI-linked technology investment in economies positioned to benefit from it.

Sources. IMF World Economic Outlook Updates, January, April and July2026.

The World Banks January 2026 Global Economic Prospects report was similarly cautious, projecting global growth of around 2.6% for 2026 - a modest improvement on its earlier estimate, helped by stronger-than-expected US growth despite tariff-driven trade disruption, though the Bank flagged that growth remained too concentrated in advanced economies to meaningfully reduce poverty in developing ones.

Source. World Bank Global Economic Prospects, January2026.

For exporters, the more direct story of the year was trade policy itself. The United States raised tariffs on a wide range of trading partners through 2025, including a steep increase on Indian goods to as much as 50% by August 2025 - among the highest rates applied to any major Indian export category, and a direct hit to the textile and apparel trade in particular. This eased meaningfully in the final quarter of the fiscal year: on 2 February 2026, India and the United States finalised a bilateral trade agreement that brought the effective US tariff on most Indian exports, including textiles and apparel, down to around 18%. For Indias textile exporters, FY 2025-26 was therefore a year of two distinct halves - a first two- thirds of rising costs and shrinking margins under a 50% tariff wall, followed by a final quarter of real, though still incomplete, relief.

Sources. India Briefing, 3 Feb 2026; ClearTax, Jut 2026; PIB, 3 Feb 2026 (FIEO statement).

INDIAN ECONOMY OVERVIEW AND OUTLOOK

INDIA REMAINED ONE OF THE MORE RESILIENT LARGE ECONOMIES

Against this uneven global backdrop, Indias economy proved to be one of the more resilient large economies through FY 2025-26. Provisional estimates released by the Ministry of Statistics and Programme Implementation in June 2026 placed Indias real GDP growth for the year at 7.7%, with growth accelerating to 7.8% in the final quarter (January-March 2026) - comfortably ahead of the Reserve Bank of Indias own initial estimate of 6.5% for the year, and reflecting strong domestic consumption, sustained government capital spending, and resilient services exports even as merchandise trade conditions stayed difficult.

Source. ¦ Ministry of Statistics and Programme Implementation, Provisional Estimates of Annual GDP for 2025-26, 5June 2026.

Inflation eased over the course of the year, helped by stable food prices and the GST rate reforms rolled out during FY 2025-26, giving the RBI room to keep interest rates broadly steady while it watched external risks develop. Indias foreign exchange reserves and the health of its banking sector both remained strong through the year, providing a buffer against the volatility that tariff and geopolitical developments brought to global trade and currency markets.

Looking ahead, growth is expected to moderate slightly but remain robust, with the RBIs own projections placing real GDP growth for FY 2026-27 in the region of

6.6-7.0%, supported by continued domestic demand and the improved external trade environment following the India-US agreement.

Sources: RBI Monetary Policy statements, December 2025-February 2026; PIB Factsheet.

UNION BUDGET FY 2026-27

A CONTINUED PUSH ON CAPITAL SPENDING AND A NEW TEXTILE PROGRAMME

The Union Budget for FY 2026-27, presented on 1 February 2026, continued the Governments emphasis on public capital expenditure, allocating 12.2 lakh crore - approximately 3.1% of GDP, and roughly 9% higher than the previous years allocation - toward long-term investment in infrastructure and manufacturing.

For the textile sector specifically, the Budget introduced a new Integrated Programme for Textiles, carrying a Budget allocation of 1,500 crore and built around measures directly relevant to Orbits own business:

• National Fibre Scheme - aimed at strengthening Indias self-reliance in natural fibres (silk, wool, jute) as well as man-made and new-age fibres.

• Textile Expansion and Employment Scheme - offering capital support for machinery and technology upgradation at existing textile clusters, along with new common testing and certification centres.

• Mega Textile Parks - a new challenge-based scheme to develop textile parks with a focus on technical textiles and higher value addition, alongside the Governments existing PM MITRA parks programme.

• Mahatma Gandhi Gram Swaraj Initiative - support for khadi, handloom and handicraft producers through improved training, quality standards and market access.

Together, these measures signal continued Government intent to shift Indias textile industry from a volume- led exporter toward a higher-value, more technically sophisticated one - a direction consistent with Orbits own investment in processing capability and testing infrastructure this year.

Sources: PIB, Union Budget 2026-27 Highlights and Ministry of Textiles backgrounder, 1 Feb 2026; IBEF, Union Budget 2026-27.

GLOBAL TEXTILE INDUSTRY OVERVIEW

STEADY UNDERLYING GROWTH, UNEVEN YEAR-TO- YEAR CONDITIONS

The global textile industry - spanning fibre production, textile manufacturing and retail - is estimated at approximately USD 760 billion, projected to grow at a 5.1% CAGR through 2030 to reach nearly USD 974 billion. Apparel remains the dominant segment, accounting for over 55% of the market, while industrial and technical textiles - used in automotive, medical and filtration applications - are growing faster, at close to 5.9% CAGR, as manufacturers diversify beyond fashion into higher- value technical categories.

Source: Invest India / Mordor Intelligence industry estimates (continuity basis with prior years Report).

On the raw material side, synthetic fibres - chiefly polyester - continue to hold the largest share of global demand at around 53%, but natural fibres are gaining ground: cotton, wool, hemp and linen are all seeing rising demand as brands respond to consumer preference for more sustainable sourcing, a trend directly relevant to Orbits own fashion fabric and home textile lines, both of which sit closer to the natural and blended-fibre end of the market than to bulk synthetics.

Geographically, Asia-Pacific remains the dominant manufacturing region, with over half of global textile output. For fashion and home-textile categories specifically - the segments Orbit operates in - growth continues to be driven less by raw volume expansion and

more by faster design cycles, smaller production batches, and buyers growing preference for traceable, quality- verified supply chains, all of which favour manufacturers with strong design and quality-control capability over those competing purely on scale.

The more consequential story for FY 2025-26, however, was not underlying market growth but trade policy - the US tariff escalation and subsequent de-escalation described above reshaped competitive dynamics across sourcing hubs through the year, with Indian exporters navigating both a period of reduced US competitiveness and, from February 2026, a partial recovery in relative positioning against alternative sourcing origins such as Bangladesh and Vietnam.

INDIAN TEXTILE INDUSTRY OVERVIEW A RESILIENT SECTOR, TESTED AND STILL GROWING

The Indian textile and apparel industry remains a crucial pillar of the countrys manufacturing base, contributing approximately 2 3% to GDP, 13% to industrial production and around 12% of Indias total exports. The industry employs nearly 45 million workers, including 3.5 million handloom weavers, and India continues to hold its position as the worlds third-largest textile exporter, with a long-term Government target of USD 100 billion in textile exports by 2030 and USD 600 billion by 2047.

Source . In vest India, Ministry of Textiles.

Against this backdrop, FY 2025-26 was a genuine test of the sectors resilience. Indias textile and apparel exports, including handicrafts, reached Rs3,25,339 crore for the year - up 1.8% over FY 2024-25s Rs3,19,573.2 crore, with export growth recorded across more than 120 countries. Given that this growth was achieved through a year that included several months under a 50% US tariff, a modest but positive full-year result reflects real underlying resilience rather than a smooth or easy trading environment.

Source: Ministry of Textiles, via infashionbusiness. com.

A ug 2026 (final FY2025-26fgures).

On the raw material side - directly relevant to Orbits input costs, since polyester is the primary fibre behind the Companys fashion fabrics - the year split into two distinct phases. Domestic polyester filament yarn and staple fibre prices declined for much of FY 2025-26, easing

EXPORTS OVERVIEW input costs through most of the year, before firming sharply in the closing months as PTA and MEG feedstock costs rose on the back of the Middle East conflict and the crude oil price pressure it brought (see Global Economy Overview). Indian polyester filament yarn prices rose by more than 13% quarter-on-quarter in early 2026 alone, reflecting this late-year cost push.

Sources: ChemAnalyst, Polyester Filament Yarn Price Trend. 2026: ExpertMarketResearch, Polyester Staple Fibre

AFP } Price Trends. 2026.

Government schemes - PM MITRA, the Production Linked Incentive (PLI) scheme, the National Technical Textiles Mission, S AMARTH and the RoSCTL export rebate scheme - remained in place through the year and were joined, via the FY 2026-27 Budget, by the new National Fibre Scheme and Textile Expansion and Employment Scheme described above. Alongside these, the India- UK Comprehensive Economic and Trade Agreement (CETA), which came into force on 15 July 2026, adds a further market-access tailwind for FY 2026-27 - see Opportunities and Company Outlook below.

A MODEST RISE, ACHIEVED UNDER REAL PRESSURE

Ready-made garments (RMG) remained the largest single contributor to Indias textile exports in FY 2025-26, rising to Rs1,39,350 crore. Cotton textiles followed at Rs 1,02,427 crore, with man-made textiles at Rs 46,254 crore, handicrafts (excluding handmade carpets) at Rs15,855 crore, carpets at Rs12,887 crore, and smaller contributions from jute, silk and wool products.

TOTAL T&A EXPORTS,	READY-MADE GARMENTS	COTTON TEXTILES
FY25-26 +1.8% YoY	Largest segment

The United States remained Indias largest single export destination for textiles and apparel throughout the year, with exports to the US totalling Rs85,910 crore - a notable outcome given that Indian exporters spent roughly two-thirds of the fiscal year selling into that market under a 50% tariff. The relief brought by the February 2026 trade agreement came too late in the year to materially lift full-year volumes, but exporters and industry bodies alike expect its fuller benefit to show through in FY 2026-27.

Source: Ministry of Textiles, via technicaltextilesm, Aug2026.

It is against this specific backdrop - a modest 1.8% industry-wide export growth rate, achieved despite eight-plus months under a 50% US tariff - that Orbits own performance in FY 2025-26 should be read (see Theme of the Year and Financial Highlights in the Business Overview section of this Report).

GOVERNMENT INITIATIVES IN THE TEXTILE SECTOR

A CONSISTENT POLICY PUSH, REINFORCED THIS YEAR

• PM MITRA Parks Scheme - integrated textile hubs with plug-and-play infrastructure, with several parks under development.

• Production Linked Incentive (PLI) Scheme - an outlay of 10,683 crore over five years, focused on man-made fibre apparel, fabrics and technical textile products.

• National Technical Textiles Mission (NTTM) - 1,480 crore, extended through FY 2027-28, supporting research, innovation and capacity building in technical textiles.

• SAMARTH Scheme - capacity-building and employment-linked skilling for the textile workforce.

• RoSCTL Scheme - rebate of embedded state and central taxes and levies on garment, apparel and made-up exports, extended through March 2026.

• National Fibre Scheme and Textile Expansion and Employment Scheme (new, FY 2026-27 Budget) - described in the Union Budget section above.

Sources. PIB, Ministry of Textiles, The Hindu Business Line.

ABOUT THE COMPANY

ORBIT EXPORTS LIMITED

Orbit Exports is one of Indias leading exporters of fashion fabrics, seasonal ribbons and made-up products, serving customers across the United States, Latin America, Africa, the Middle East and Europe. The Company remains focused on its core strengths - design-led product development, vertical integration from yarn twisting to finished goods, and long-standing customer relationships - while continuing to invest in its manufacturing capability, its systems and its international presence.

OPPORTUNITIES

WHERE THE ENVIRONMENT IS TURNING IN INDIAS FAVOUR

EU-INDIA FREE TRADE AGREEMENT India and the EU concluded talks on 27 January 2026 for whats being called the mother of all trade deals - once ratified, it gives Indian textiles zero-duty access to the EU market (tariffs currently up to 12%), opening a $263.5 billion import category. The EU is already Indias second- largest textile export destination.	UK FREE TRADE AGREEMENT (CETA) The India-UK trade agreement came into force on 15 July 2026, eliminating UK tariffs (previously 8-12% on garments, up to 16% on some categories) on nearly all Indian textile exports. With India holding just 6.6% of the UKs $17 billion textile import market against Chinas 25%, industry estimates point to Indias UK exports roughly doubling over five to six years.
CHINA PLUS ONE Global buyers continue to diversify sourcing away from China, and Indias established textile ecosystem, skilled workforce and competitive costs position it as a	FAST FASHION & AGILE MANUFACTURING Rapid design-to-shelf cycles are pushing brands toward smaller batches and quicker turnaround - an area where design-led, vertically integrated manufacturers can compete on responsiveness, not just
GREEN & SUSTAINABLE TEXTILES Rising demand for organic, recycled and eco-friendly fabrics, and growing brand preference for certified sustainable supply chains, is opening space for manufacturers with credible sustainability programmes.	GOVERNMENT INCENTIVES PM MITRA, PLI, RoSCTL and the new National Fibre Scheme and Textile Expansion and Employment Scheme together lower the cost of investment and improve export competitiveness for manufacturers who engage with them.

THREATS

WHAT COULD STILL WORK AGAINST THE INDUSTRY

TRADE POLICY UNCERTAINTY While the February 2026 India-US deal brought real relief, detailed tariff schedules and a comprehensive bilateral agreement were still being finalised as of this Report; terms could still shift.	GLOBAL COMPETITION Countries such as Bangladesh and Vietnam maintain cost advantages in parts of the value chain, and continue to compete for the same buyer relationships India is pursuing.
SUBDUED DEMAND IN WESTERN MARKETS Slower consumer spending growth in the US and Europe could limit the pace of order recovery even as tariff conditions improve.	RAW MATERIAL PRICE VOLATILITY Polyester and other synthetic fibre prices remain exposed to crude oil movements, geopolitical developments and feedstock (PTA/MEG) cost swings, all of which can compress margins with little warning.
LABOUR SHORTAGES Shortages of skilled workers in spinning, dyeing and finishing could disrupt operations and delivery timelines across the industry.	ENVIRONMENTAL COMPLIANCE COSTS Tightening sustainability rules on water, energy and emissions add cost, particularly for smaller manufacturers with less capacity to absorb compliance spend

RISKS AND CONCERNS

HOW ORBIT IDENTIFIES AND MANAGES ITS KEY RISKS

Orbit Exports operates within a dynamic global environment that carries multiple business and operational risks. The Company follows an Enterprise Risk Management (ERM) framework designed to identify, assess and mitigate these risks on an ongoing basis, while protecting business continuity and stakeholder value. The key risk factors and how the Company manages them are set out below.

Raw Material Price Risk

Fluctuations in the prices of key raw materials - including polyester and other synthetic fibres, specialty yams and chemicals - can meaningfully affect input costs and margins. Many of these inputs are linked, directly or indirectly, to global crude oil prices, adding a further layer of volatility.

Mitigation : Orbit actively monitors commodity price trends, uses responsive procurement strategies, and maintains strategic inventory levels. Contractual arrangements with clients also include pass-through clauses that help protect margins against significant raw material price swings.

Economic and Geopolitical Risk, Including Trade Policy

FY 2025-26 was a direct demonstration of this risk in practice: the US tariff increase to 50% materially affected demand and pricing for several months before the February 2026 trade agreement eased conditions. Geopolitical tension, including the conflict that emerged in the Middle East during the year, adds a further layer of unpredictability to shipping, energy costs and buyer sentiment.

Mitigation : Orbit continues to diversify its market mix across the US, Latin America, Africa, the Middle East and Europe, maintains a conservative, low-geared balance sheet that preserves flexibility during periods of uncertainty, and stays close to its existing customer relationships rather than depending on any single market.

Exchange Rate Volatility Risk

A large share of Orbits revenue is earned in foreign currencies while a significant portion of costs are denominated in Indian Rupees, exposing the Company to currency movements that could affect profitability.

Mitigation : A hedging policy is in place, using forward contracts and foreign exchange options to manage exposure, with the Companys currency risk profile reviewed regularly to maintain appropriate hedge coverage.

Logistics and Supply Chain Risk

Disruptions from geopolitical conflict, elevated shipping costs, port congestion or domestic logistical bottlenecks can delay order fulfilment and increase costs.

Mitigation : Orbit maintains a resilient supply chain with multiple sourcing alternatives and strong vendor partnerships, supported by monitoring systems designed to anticipate and manage potential bottlenecks.

Technology and Innovation Risk

Rapid change in production technology and evolving sustainability norms can put slower-moving manufacturers at a competitive disadvantage.

Mitigation : Orbit continues to invest in its process house, testing capability and textile-specific ERP system (see Operational Strength & Excellence in the Business Overview section), keeping its production processes and product quality aligned with evolving global standards.

Competition Risk

The textile industry remains highly competitive, with price pressure from lower-cost producing countries and fast-changing global consumer trends.

Mitigation : Orbit focuses on product differentiation, design capability, premium quality and long-standing customer relationships to defend and grow its market position, rather than competing primarily on price.

Regulatory and Compliance Risk

The global textile sector faces increasingly detailed environmental, labour and trade regulation. Noncompliance can result in penalties, brand damage, or loss of international customers.

Mitigation : The Company monitors evolving regulatory requirements closely and maintains compliance through regular audits, relevant certifications, and ongoing staff training on best practice.

Cybersecurity and Data Protection Risk

As digital operations expand - including through Orbits move to a textile-specific ERP system this

year - the Company faces growing exposure to data breaches, ransomware and loss of sensitive commercial information.

Mitigation : Orbit employs cybersecurity frameworks, regular IT audits, employee awareness training and data encryption protocols to protect its systems and customer data.

COMPANY OUTLOOK AND STRATEGIC INITIATIVES WHERE ORBIT IS INVESTING NEXT

Investment in Renewable Energy

As disclosed in the previous Annual Report, Orbit entered into a joint venture for a 2 MW Solar Captive Generating Plant (SCGP) intended for its Sarigam and Kosamba locations, with commissioning expected during the current year. This remains a central part of the Companys energy strategy, aimed at meaningfully increasing its reliance on clean, renewable power.

Capital Investment in Advanced Capabilities Through new ERP implementation

Orbits move to a textile-specific ERP system this year strengthens the Companys production planning and tracking capability - giving management clearer, more real-time visibility into scheduling, work-in-progress and output across weaving, processing and cut-and- sew. Going into FY 2026-27, this improved visibility is expected to support tighter production planning, faster response to order changes, and better coordination across Orbits integrated value chain, complementing the capacity gains from the process house investment.

Product Innovation and Diversification

Orbit continues to prioritise product innovation, with a focus on sustainable fabrics, technical textiles and value- added made-ups. By diversifying its product range, the Company aims to reach emerging markets and a wider spectrum of customers globally.

Strengthening Global Market Presence

With an established export footprint across the US, Latin America, Africa, the Middle East and Europe, Orbit continues to pursue new partnerships and distribution channels to expand its global reach and reduce market concentration risk. The improved US tariff environment following the February 2026 trade agreement is expected

to support this effort in FY 2026-27, though the Companys underlying strategy of market diversification remains unchanged regardless of how that environment develops.

INTERNAL CONTROL SYSTEMS

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Orbit recognises the importance of robust internal financial controls in ensuring transparency, compliance and efficiency across its operations. The Companys internal control systems are designed to align with its scale, business nature and operational complexity, and are subject to regular monitoring and evaluation by management, internal auditors and statutory auditors.

Monitoring, Audit and Review

Internal financial controls are subject to periodic monitoring by management, with internal and statutory auditors conducting independent evaluations that highlight areas for improvement. Audit findings and management responses are presented to the Audit Committee for review, ensuring that recommendations are addressed and corrective actions implemented promptly.

Adaptability and Continuous Improvement

Orbits control systems are designed to adapt as laws and regulations change, and the Company maintains a continuous-improvement approach to its internal controls, aimed at keeping operations efficient, compliant and responsive to changing business needs. CONCLUSION

A YEAR THAT TESTED RESILIENCE, AND CONFIRMED IT

FY 2025-26 was, by most external measures, one of the more difficult years the Indian textile industry has faced in some time - a steep US tariff increase, sustained geopolitical uncertainty, and a global economy that itself moved from cautious optimism to renewed disruption over the course of the year. Against that backdrop, the sectors own performance - modest but positive export growth reflects genuine resilience rather than an easy environment.

Orbits own performance through this period, detailed in the Business Overview and Financial Statements sections of this Report, should be read in this context: a Company that maintained consistency in value and consolidated its volumes during one of the more testing

years its industry has experienced, while continuing to invest in the capabilities, systems and sustainability initiatives that will shape its position in the years ahead.

CAUTIONARY STATEMENT

FORWARD-LOOKING STATEMENTS

Certain statements in this Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable Securities Laws and Regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand supply conditions, finished goods prices, availability and prices of raw materials, power, interest rates, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors. Your Company is not obliged to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events or otherwise.