Orbit Exports Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW

GLOBAL ECONOMIC GROWTH

REMAINED SUBDUED IN FY 2024-25

The International Monetary Fund (IMF) forecasted global GDP growth by 2.8% in 2024 and stabilize at 3.3% in 2025 both figures slightly below the pre-pandemic average of ~3.7%.

However, in a recent update, the IMF revised its 2025 outlook down to 2.8%, attributing the downgrade to escalating trade tensions (especially U.S. tariffs) and increased policy uncertainty.

The World Bank presents a more cautious view: its June 2025 Global Economic Prospects report forecasts global growth of only 2.3% in 2025, with a modest recovery to 2.7% by 2026-27, driven by rising trade barriers and policy risks.

Regionally, advanced economies are projected to expand at around 1.4%-1.8% in 2025, with the U.S. near 1.8% and the Euro Area at approximately 0.8%, as tightened monetary policy weighs on activity. Emerging markets and developing economies are expected to grow between 3.7%-4.0%, supported by resilience in Asia-especially India and Southeast Asian nations. Headline inflation is expected to decline from ~5.8% in 2024 to around 4.3% in 2025, though core inflation is projected to moderate more slowly, necessitating a cautious approach from central banks.

GLOBAL TRADE IS LIKELY TO REMAIN UNDER PRESSURE.

The IMF forecasts trade growth will slow to 1.7% in 2025, down from higher levels earlier in the decade. Similarly, the World Bank emphasizes the drag of higher tariffs and unpredictable trade policies.

In summary, FY 2024-25 is expected to bring modest global growth, persistent core inflation, and elevated geopolitical and trade risks-underlining the importance for businesses to adopt flexible strategies, diversify across regions, and prepare for continued economic volatility.

OUTLOOK

Asia is expected to remain the primary driver of global economic growth in FY 2024-25. The World Bank projects overall annual growth in the East Asia & Pacific (EAP) region to slow from approximately 5.0% in 2024 to around 4.5%-4.0% in 2025-reflecting moderating trade flows and increased policy uncertainty, particularly due to trade barriers-though China is still expected to grow at around 4.5% in 2025, supported by fiscal stimulus measures .

Headline inflation across G20 countries is anticipated to ease gradually as global cost pressures-driven largely by declining commodity prices-subside. The World Bank forecasts global headline inflation to moderate through 2024- 25, with a slower normalization of core inflation.

Despite elevated inflation and tighter monetary conditions in many economies, the global economy has demonstrated resilience. Overall growth is expected to remain close to current levels-around 2.3% globally in 2025- before showing signs of a mild rebound in 2026. Emerging market and developing economies, particularly in Asia, are projected to sustain stronger growth relative to slower-growth advanced economies.

INDIAN ECONOMY OVERVIEW AND OUTLOOK (FY 2024-25)

The Indian economy is estimated to have expanded by around 6.4%-6.5% in FY 2024-25, moderating from the robust 7.8% growth recorded in FY 2023-24, yet remaining among the fastest-growing major economies globally. The moderation reflects a normalization after the postpandemic rebound and a softer global trade environment, while domestic drivers remained strong. Inflation pressures eased significantly during FY 2024-25, with headline CPI inflation averaging around 4.6%, down from 5.4% in FY 2023-24, largely helped by the stabilization of global commodity prices and improved food supply conditions.

The rupee remained broadly stable in FY 2024-25, averaging near 85 against the US dollar with limited depreciation, while Indias foreign exchange reserves stayed robust at around USD 640 billion, providing a comfortable external buffer. Corporate credit quality continued to strengthen, supported by solid balance sheets, government-led capital expenditure, and buoyant domestic demand, with the banking sectors gross nonperforming asset (GNPA) ratio improving to approximately 2.3% - a multi-decade low. Merchandise exports faced headwinds from weaker global trade, growing by a modest 4%-5% to reach about USD 520-530 billion, while services exports remained strong, expanding close to 12% year- on-year and supporting Indias overall external balance. Tax collections also remained healthy, with net direct tax collection and GST revenues growing in double digits, reflecting formalisation and a resilient tax base.

Indias capital markets maintained their positive momentum, with the Nifty 50 rising by around 18% in FY 2024-25, helping preserve Indias status as the worlds fourth-largest stock market by capitalization. Structural factors, including growing household incomes, urbanisation, and digital transformation, continued to underpin medium-term growth prospects. Indias unemployment rate remained contained at around 3.1% in 2024, reflecting steady labour market improvements.

Looking ahead, India is expected to sustain growth close to 6.5% in FY 2025-26, supported by strong domestic demand, stable inflation conditions, an improving rural economy, and ongoing government infrastructure initiatives. However, risks from global geopolitical tensions and trade policy uncertainty will require close monitoring to ensure continued resilience. Overall, Indias structural fundamentals and policy support place it in a strong position to maintain its growth leadership among major economies.

Middle East & Africa region is expected to be the fastest- growing (5.6% CAGR) through 2030. Within North America, the textile market was approximately USD 99.7 billion in 2024, with a projected increase to USD 103.7 billion in 2025, and a 3.85% CAGR forecast through 2030.

The textile machinery market, essential to industry modernization, was estimated at USD 31.6 billion in 2024 and is expected to rise to USD 33.2 billion in 2025, growing at a 4.9% CAGR through 2030. Mashed with rising industrial automation, digital textile printing, and sustainable production norms such as recycled polyester lines, the sector is undergoing a technological transformation.

Key industry trends include the surge in e-commerce, growing consumer focus on sustainable and natural fibers, and increasing demand for technical textiles in applications like automotive, medical, and filtration. These shifts are reshaping global supply chains and

UNION BUDGET FY 25-26

In Union Budget FY 2025-26, the Government of India continued its strong emphasis on capital expenditure, allocating 11.21 lakh crore (3.1% of GDP) to long-term investments in infrastructure, solar energy, medical ecosystem, tourism, and technology . The top 13 ministries, collectively accounting for 53% of total estimated central government expenditure, saw particularly high allocations . The Ministry of Defence received the largest share at 6.81 lakh crore, representing 13.4% of total budget outlay, and showing a 6.3% increase from the previous year . Other major recipients included the Ministry of Road Transport & Highways ( 2.87 lakh crore; ~5.7%), the Ministry of Railways ( 2.55 lakh crore; ~5.0%), and the Ministry of Consumer Affairs, Food & Public Distribution ( 2.16 lakh crore; ~4.3%) . These allocations reflect a strategic continuation of the previous years focus on boosting public investment-led growth, while also emphasizing economic and social infrastructure development.

GLOBAL TEXTILE INDUSTRY OVERVIEW (FY 2024-25)

The global textile industry, spanning fiber production, textile manufacturing, and retail, is estimated at approximately USD 760 billion in 2025 and is projected to grow at a 5.1% CAGR between 2025 and 2030, reaching nearly USD 974 billion by 2030. Apparel remains the dominant segment, accounting for over 55% of market share, while industrial and technical textiles are expected to grow at a faster pace (5.9% CAGR) by 2030

The raw material landscape remains diverse: synthetic fibers (especially polyester) held a 53% revenue share in 2024 and are projected to grow at about 6.3% CAGR to 2030. However, there is rising consumer demand for natural fibers-such as cotton, silk, wool, hemp, and linen- driven by sustainability, health consciousness, and postpandemic hygiene preferences.

Geographically, the Asia-Pacific region dominates, with a 53.2% share of the textile market in 2024. Meanwhile, the

INDIAN TEXTILE INDUSTRY OVERVIEW

(FY 2024-25 AND BEYOND)

The Indian textile and apparel industry, a crucial pillar of the countrys manufacturing sector, continues to expand steadily. In FY 2024-25, the Indian textiles and apparel market is projected to grow at a compound annual growth rate (CAGR) of 10%, putting it on track to reach USD 350 billion by 2030. The industry contributes approximately 2.3% to Indias GDP, 13% to industrial production, and 12% to total exports, with its GDP share expected to double to nearly 5% by the end of the decade, reflecting its growing strategic importance (Invest India).

India holds its position as the worlds third-largest textile exporter, with textile exports projected to reach USD 100 billion by 2030. In FY 2023-24, Indias total textile exports (including handicrafts) stood at USD 35.9 billion, with readymade garments contributing USD 14.23 billion. The United States remained Indias largest export destination, accounting for roughly 32.7% of total textile and apparel exports. During April-June FY 2023-24 alone, exports of 247 technical textile products reached 5,946 crore (about USD 715 million), highlighting Indias growing capabilities in higher-value textile categories.

The manufacturing side of the sector has been recovering well from the pandemic, with the Manufacturing of Textiles Index reported at 105.9 in April 2024, indicating solid industrial activity (Ministry of Textiles). Indias textile workforce remains among the largest globally, employing nearly 45 million workers, including 3.52 million handloom weavers, reinforcing the industrys socio-economic significance.

Cotton, Indias flagship fiber, continues to dominate. India is the largest cotton producer globally, estimated to have produced 31.6 million bales in FY 2023-24, with total availability of 34.6 million bales. Cotton output is projected to reach 7.2 million tonnes by 2030, with an estimated value exceeding USD 30 billion by 2027. In FY 2022-23, India produced 2.15 million tonnes of fiber and 5,185 million kilograms of yarn. The natural fiber-driven segment is expected to grow from USD 138 billion to USD 195 billion by 2025, reflecting an increased preference for sustainable and organic fibers .

On the global stage, the global apparel market is expected to grow at about 8% CAGR, reaching USD 2.37 trillion by 2030, while global textile and apparel trade is forecast to grow at a 4% CAGR, crossing USD 1.2 trillion by 2030 (Mordor Intelligence). This sets a supportive backdrop for Indias ambitions to expand its market share.

INDIAN TEXTILE INDUSTRY OUTLOOK

Looking forward, India has laid out an ambitious vision for its textiles sector by 2047, targeting USD 600 billion in textile exports and developing a USD 1.8 trillion domestic market. The roadmap envisions India as a global leader in sustainable manufacturing, with a focus on achieving 30% of the global recycled fiber market and establishing new segments dedicated to textile recycling and waste management. The shift towards greener, circular textile production, coupled with strong support for innovation in technical textiles, is set to transform India into a more competitive, resilient, and sustainable textile powerhouse. The rising popularity of e-commerce, growing investment in modern manufacturing technology, and a proactive policy push from government initiatives like PM MITRA and PLI schemes will help achieve this ambitious growth.

Overall, the Indian textile industry is well-positioned to capitalize on its strong fundamentals, demographic advantages, and policy tailwinds to achieve robust and inclusive growth through FY 2024-25 and toward its longer-term 2030 targets.

EXPORTS OVERVIEW

In FY 2024-25, Indias textile and apparel exports showed a healthy rebound following the challenges of the previous year. Total exports for the sector were estimated at USD 37.9 billion, an increase of around 10% over FY 2023-24s USD 34.43 billion. Apparel exports were a key contributor, registering double-digit growth of approximately 10%, reaching nearly USD 16 billion, buoyed by improved demand from major markets such as the United States and the European Union. Textile exports, including yarns, fabrics, and made-ups, demonstrated resilience, supported by relatively steady global demand and Indias competitive pricing, achieving an annual growth of around 3-4%.

While international freight costs remained elevated, particularly due to ongoing disruptions in the Red Sea region and continued geopolitical tensions, exporters benefited from better shipping planning and diversification of routes. These logistical challenges, coupled with a gradually improving global economic environment, led to a more stable recovery than was seen in the previous fiscal year.

Indias textile and apparel sector continued to account for around 8% of total national exports during the year, and the country retained its rank among the top six global textile exporters, with a global market share of about 3.9%. This performance underscores the resilience of Indias textile ecosystem, aided by supportive policy frameworks, diversified product portfolios, and expanding sustainable manufacturing practices. Looking forward, industry participants expect further gains as India consolidates its role in global value chains, especially as international buyers diversify sourcing beyond China and Bangladesh.

GOVERNMENT INITIATIVES IN THE TEXTILE SECTOR (FY 2024-25 TO 2030)

The Indian government has set an ambitious roadmap to transform the textile sector into a globally competitive and sustainable industry by 2030. One of the flagship initiatives is the PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks Scheme, which aims to create world-class textile hubs with integrated infrastructure and plug-and-play facilities. The scheme carries an outlay of 4,445 crore to be implemented through FY 2027-28, with seven PM MITRA parks already under development to attract investment, enhance scale, and generate employment (PIB).

Another major step is the Production Linked Incentive (PLI) scheme for textiles, with an approved outlay of 10,683 crore over five years. The PLI scheme is focused on boosting the production of man-made fiber (MMF) apparel, MMF fabrics, and technical textile products, with a view to build globally competitive capacity and encourage economies of scale (PIB).

The National Technical Textiles Mission (NTTM), operational until FY 2027-28 with an allocation of 1,480 crore, is another transformative program designed to position India as a leader in the global technical textiles space by supporting research, innovation, and capacity building (Ministry of Textiles).

To strengthen human resources and skills in the sector, the government continues to operate the SAMARTH (Scheme for Capacity Building in Textile Sector), focusing on upskilling youth and providing employment-linked training in textile clusters across India (PIB).

In addition, the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, originally introduced in 2019, has been extended until March 31, 2026, with a budget allocation of 9,246 crore for FY 2024-25. This initiative is crucial to improve the price competitiveness of Indian garments, apparel, and made-ups in international markets by refunding embedded taxes and levies (The Hindu Business Line).

Budgetary allocation for the Ministry of Textiles itself is set to see a marginal 2.5% increase in FY 2024-25, from

4,389 crore in the previous year to roughly 4,500 crore to support various policy interventions. This allocation will help sustain flagship programs, support modernisation of textile infrastructure, and expand technology adoption in the sector (The Hindu).

Looking ahead toward 2030, the government is expected to continue promoting sustainability, circularity, recycling, and digital transformation in the textile value chain through follow-on phases of PLI, targeted green textile incentives, and future skill-development schemes. These measures collectively aim to position India as a global leader in sustainable and technologically advanced textiles by the end of this decade.

ABOUT THE COMPANY

Orbit Exports is a distinguished exporter of innovative fabrics, ribbons, and made-ups, serving diverse global markets across the United States, Latin America, Africa, the Middle East, and Europe. With a strong commitment to achieving world-class quality standards, the Company continues to enhance its product portfolio while strategically expanding its international presence. Leveraging its established strengths and investing in new facilities, Orbit Exports is well- ositioned to capture growth opportunities in the coming year, reinforcing its trajectory toward a promising and sustainable future.

OPPORTUNITIES

The ongoing global strategy of diversifying manufacturing and sourcing away from China - known as China Plus One - is creating significant opportunities for India to position itself as a strong alternative for textile and apparel manufacturing. India benefits from an established textile ecosystem, competitive labor costs, and a large pool of skilled workers, enabling it to capture greater export market share as global buyers diversify their supply chains.

PASHION The increasing popularity of fast fashion - characterized by rapid design-to-shelf cycles and high consumer turnover - is driving growth in the textile and apparel sector. Fast fashion trends push manufacturers toward quicker production timelines, smaller batches, and trend-sensitive product development, creating opportunities for agile players to capture market share.

With rising demand for organic, recycled, and ecofriendly fabrics, sustainability is becoming a key differentiator in the global textile industry. This trend offers Indian mills a chance to stand out through the use of greener materials and cleaner processes.

Brands are prioritizing certified sustainable supply chains, pushing manufacturers to adopt eco-friendly technologies and standards like GOTS and OEKO-TEX?. Green textiles are now essential for market relevance, export growth, and long-term value creation.

The Indian government is boosting the textile sector through key schemes like PM MITRA,

PLI, RoSCTL, and the National Technical Textiles Mission. These initiatives aim to attract investments, enhance competitiveness, and drive export growth.

Support for integrated textile parks and technical textile innovation is creating a stronger ecosystem for high-value manufacturing, positioning India as a global textile hub.

THREATS

M LABOUR SHORTAGES

Shortages of skilled workers, especially in spinning, dyeing, and finishing processes, could disrupt operations and delivery timelines.

BgLOBAL COMPETITION^B

Countries like Bangladesh and Vietnam maintain cost advantages and efficient supply chains, making it harder for India to compete on mass- market apparel.

I SUBDUED EXPORT Economic slowdown and inflation in Western markets may limit consumer spending, affecting Indias textile and apparel exports.

¦ ENVIRONMENTAL Strict sustainability rules on water, energy, and emissions add costs and could challenge small and medium enterprises to stay compliant.

IrAwmateriAlpRiCe^H

Cotton and synthetic fiber prices remain vulnerable to weather, geopolitical factors, and commodity speculation, which can squeeze margins.

Global conflicts or trade restrictions may disrupt shipping routes, raise logistics costs, and delay international orders.

RISKS AND CONCERNS

Orbit Exports operates within a dynamic global environment that presents multiple business and operational risks. The Company follows a robust Enterprise Risk Management (ERM) framework designed to systematically identify, assess, and mitigate these risks while ensuring sustainable business continuity and stakeholder value. The key risk factors and mitigation strategies are outlined below:

Raw Material Price Risk

Fluctuations in the prices of key raw materials - including cotton, specialty fibers, yarns, glass roving, chemicals, and resins - can significantly impact input costs and thereby affect margins. Many of these commodities are linked to global crude oil prices, adding another layer of volatility. Mitigation: The Company actively monitors commodity price trends, deploys responsive procurement strategies, and maintains strategic inventory levels. Contractual arrangements with clients also include pass-through clauses to safeguard margins against significant raw material price swings.

Economic and Geopolitical Risk

Geopolitical tensions, global economic slowdowns, high inflation, and potential recessions in key export markets such as the US and Europe can affect export demand and disrupt sales momentum. Mitigation: While some improvements in the global macroeconomic climate are evident, the Company is prudently diversifying its market mix, strengthening its domestic presence, and leveraging product innovation to sustain demand despite global uncertainties.

Exchange Rate Volatility Risk

A large portion of Orbit Exports revenues are earned in foreign currencies while expenses are largely denominated in Indian Rupees, exposing the Company to exchange rate volatility. Sharp currency movements could impact profitability.

Mitigation: A proactive hedging policy is in place, utilizing forward contracts and foreign exchange options to manage exposure. The Company regularly reviews its currency risk profile to maintain optimal hedge coverage and protect financial performance.

Logistics and Supply Chain Risk

Disruptions due to geopolitical conflicts (such as the Russia-Ukraine crisis), rising shipping costs, port congestions, or domestic logistical bottlenecks can delay order fulfillment and increase costs. Mitigation: The Company has developed a resilient supply chain ecosystem with multiple sourcing alternatives and maintains strong vendor partnerships to minimize disruptions. Robust supply chain monitoring systems are used to anticipate and manage potential bottlenecks.

Disaster and Pandemic Risk

The Company is exposed to natural disasters, fire hazards, pandemics, and other catastrophic events, which can disrupt operations, delay projects, or inflate costs. Mitigation: Orbit Exports has put in place a comprehensive safety management program to protect employees and assets. Fire prevention and emergency systems are strategically deployed across facilities, and regular training ensures preparedness for various disaster scenarios.

Technology and Innovation Risk

Rapid changes in technology, product innovation cycles, and evolving sustainability norms present a risk if the Company fails to keep pace. Falling behind could lead to competitive disadvantage or loss of market share. Mitigation: The Company continues to invest in modern technologies, automation, and R&D initiatives to upgrade processes, enhance product quality, and meet global sustainability benchmarks.

Regulatory and Compliance Risk

The global textile sector faces increasingly stringent environmental, labor, and trade regulations. Noncompliance may result in legal penalties, brand damage, or loss of international customers. Mitigation: The Company closely monitors evolving regulatory landscapes and actively ensures adherence through compliance audits, certifications, and training of teams on best practices.

Cyber security and Data Protection Risk

As digital operations expand, there is a growing risk of data breaches, ransomware attacks, or loss of sensitive commercial information.

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

Competition Risk

The textile industry is highly competitive, with price pressures from low-cost producing countries and rapid shifts in global consumer trends. Mitigation: The Company focuses on product differentiation, design capabilities, premium quality, and customer relationships to defend and expand its market share.

Despite these challenges, Orbit Exports remains vigilant, continuously monitoring trade conditions, geopolitical developments, and market shifts. The Companys proactive risk mitigation strategies, supported by a dynamic ERM framework, help ensure preparedness for emerging threats while positioning it to seize growth opportunities sustainably.

COMPANY OUTLOOK AND STRATEGIC INITIATIVES

Investment in Renewable Energy Orbit Exportsentered into a joint venture for the 2MW Solar Captive Generating Plant (SCGP), intended for its Sarigram and Kosamba locations. Commissioning of this pivotal project is expected to be completed this year. This initiative marks a significant advancement in our energy strategy, designed to dramatically increase our reliance on clean, renewable energy sources.

Significant Capital Investment in Advanced Capabilities

Orbit Exports initiated the capex project for the process house, representing a substantial investment of 30 crores in new machinery and allied capital expenditure. This strategic allocation of resources is directly aimed at expanding our processing capabilities. This project is expected to start delivering commercial output from Q4 FY26.

Product Innovation and Diversification Orbit Exports continues to prioritise product innovation, focusing on developing sustainable fabrics, technical textiles, and value-added made-ups. By diversifying its product range, the Company aims to tap into emerging markets and serve a wider spectrum of customers globally..

Strengthening Global Market Presence With a growing export footprint in the US, Latin America, Africa, the Middle East, and Europe, Orbit Exports is actively pursuing new partnerships and distribution channels to expand its global reach and reduce market concentration risk.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

At Orbit Exports Limited, we recognize the importance of robust internal financial controls in ensuring transparency, compliance, and efficiency in our operations. Our internal control systems are designed to align with our scale, business nature, and operational complexity, and are subject to regular monitoring and evaluation by our management, internal auditors, and statutory auditors.

Monitoring and Evaluation

Our internal financial controls are subject to periodic monitoring by our management, ensuring that they remain effective and responsive to changing business dynamics and regulatory requirements. This systematic oversight enables us to identify areas for improvement and implement corrective actions as necessary.

Audit and Oversight

Our internal and statutory auditors conduct thorough evaluations of our internal control framework, providing valuable insights into control effectiveness and highlighting areas for enhancement. Their independent assessments help us to identify potential risks and opportunities for improvement.

Review and Implementation

Audit findings and status reports, along with management actions and responses, are presented to our Audit Committee for review. This collaborative approach ensures that audit recommendations are addressed promptly, and corrective actions are implemented as necessary.

Adaptability and Compliance

Our internal control systems are adaptable to accommodate amendments in laws and regulations, ensuring ongoing compliance and mitigating regulatory risks effectively. We prioritize compliance and take proactive steps to stay ahead of regulatory changes.

Driving Continuous Improvement

We emphasize a culture of continuous improvement in our internal controls, driving enhancements aimed at optimizing operational efficiency and minimizing risks.

Our commitment to continuous improvement enables us to stay agile and responsive to changing business needs

CONCLUSION

As we reflect on the financial year 2024-25, Orbit Exports has demonstrated resilience, agility, and a strong commitment to sustainable value creation in a highly competitive global environment. Through strategic investments in renewable energy, advanced manufacturing capabilities, and product innovation, the Company has fortified its operational foundation while aligning with evolving market demands and stakeholder expectations.

Our unwavering focus on quality, customer-centricity, and responsible growth continues to strengthen our market position and enable us to adapt swiftly to emerging opportunities. Backed by a culture of innovation and a talented workforce, Orbit Exports is poised to deliver longterm growth and resilience.

Looking ahead, we remain confident in our ability to navigate challenges, expand our global footprint, and drive sustainable excellence. With a clear vision, a well- defined strategy, and a commitment to positive social impact, Orbit Exports is ready to scale new heights and create lasting value for all stakeholders in the years to come.

CAUTIONARY STATEMENT

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.