SBC Exports Ltd Management Discussions

MANAGEMENT AND ANALYSIS REPORT

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The statements contained in the Directors Report and the Management Discussion and Analysis Report relating to the Companys objectives, projections, estimates, expectations, or forecasts may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions, expectations, and managements current assessment of future events and are therefore subject to various risks and uncertainties.

Actual results, performance, or achievements may differ materially from those expressed or implied in such forward-looking statements due to several factors, including but not limited to changes in the availability and prices of raw materials, fluctuations in demand and pricing within the industry, changes in government policies, taxation, and regulatory frameworks, as well as domestic and global economic conditions. Other operational, business, and industry-specific risks and uncertainties may also have a material impact on the companys actual performance. Accordingly, readers are advised not to place undue reliance on these forward-looking statements.

MARKET CONTEXT - GLOBAL AND INDIAN ECONOMY AND OUTLOOK GLOBAL ECONOMY OUTLOOK

Global Economic Outlook

During FY 2025-26, the global economy continued to experience moderate growth amid persistent geopolitical tensions, evolving trade policies, inflationary pressures, and financial market uncertainties. According to the International Monetary Fund (IMF), global GDP growth is estimated at around 3.0% for 2026, supported by easing inflation in several economies and gradual recovery in global trade. However, growth prospects remain uneven across regions due to geopolitical developments, supply chain realignments, and policy uncertainties.

Growth in advanced economies is expected to remain moderate, reflecting slower consumer demand, relatively high interest rates, and fiscal consolidation measures. Emerging Market and Developing Economies (EMDEs), including India, continue to outperform advanced economies, supported by resilient domestic demand, infrastructure investments, and improving manufacturing activity. While the risk of a global recession has receded, sustained international cooperation and stable macroeconomic policies remain essential for fostering long-term global economic growth.

Indian Textile Industry Outlook

India continues to strengthen its position as one of the worlds leading textile and apparel manufacturing hubs. The sector remains a significant contributor to the countrys industrial output, employment generation, and export earnings. Growing global demand, coupled with the China+1 sourcing strategy adopted by international buyers, has created new opportunities for Indian textile manufacturers.

The Government of India continues to support the sector through various initiatives, including the Production Linked Incentive (PLI) Scheme, PM MITRA Parks, the National Technical Textiles Mission, and export promotion measures. These initiatives are expected to enhance manufacturing competitiveness, attract investments, and strengthen Indias position in global value chains.

Technological advancements continue to transform the textile industry. Increased adoption of automation, artificial intelligence (AI), the Internet of Things (loT), digital printing, advanced quality control systems, and data-driven manufacturing processes is improving operational efficiency, reducing costs, and enhancing product quality. Sustainability has also emerged as a key focus area, with textile manufacturers increasingly adopting environmentally responsible production practices, energy-efficient technologies, recycling initiatives, and circular economy principles to meet evolving global customer expectations and regulatory requirements.

Going forward, the Indian textile industry is expected to benefit from rising export opportunities, expanding domestic consumption, government policy support, and continued investments in technology and sustainable manufacturing practices, positioning the sector for long-term and sustainable growth.

Growth in Domestic Market the Indian textile industry is not just focusing on exports. Domestic demand for textiles is expected to grow at a steady pace. With the growing middle class, changing fashion trends, and rising disposable incomes, the demand for both traditional and modern textiles will soar. By 2026, the domestic market is expected to contribute significantly to the textile industrys growth. In a context of elevated trade policy uncertainty, further trade fragmentation risks additional disruptions to trade networks.

More persistent inflation could lead to higher-for-longer interest rates. Other risks include weaker-than anticipated activity in key economies and disasters related to climate change. Against this backdrop, policy makers face daunting challenges.

INDIAN ECONOMY OVERVIEW

India continues to be one of the fastest-growing major economies in the world, supported by strong domestic demand, sustained public investment, a resilient financial sector, and a stable macroeconomic environment. According to the International Monetary Fund (IMF), Indias economy is projected to grow at approximately 6.4%-6.5% during FY 2026-27 , maintaining its position as a leading performer among Emerging Market and Developing Economies (EMDEs).

The countrys robust economic performance is underpinned by continued government expenditure on infrastructure, increasing private sector investments, steady growth in manufacturing and services, rising digital adoption, and strengthening domestic consumption. Policy reforms aimed at enhancing the ease of doing business, improving logistics infrastructure, promoting manufacturing through initiatives such as Make in India and the Production Linked Incentive (PLI) Scheme, and encouraging foreign direct investment continue to support long-term economic growth.

Indias manufacturing and services sectors have remained resilient, supported by favourable demographic trends, expanding urbanisation, and rising consumer spending. Inflation has moderated compared to previous years due to prudent monetary policy and easing global commodity prices, while the countrys external sector has remained stable despite global economic uncertainties.

Although the global economy continues to face challenges arising from geopolitical tensions, evolving trade dynamics, and financial market volatility, India has demonstrated remarkable resilience by converting these challenges into opportunities. Its growing role in global supply chains, expanding export potential, and increasing strategic importance in international trade continue to reinforce its position as a significant contributor to global economic growth.

Indias continued focus on infrastructure development, digital transformation, sustainability, innovation, and inclusive growth is expected to strengthen its economic fundamentals further. With a favourable policy environment, strong domestic demand, and increasing global investor confidence, the Indian economy remains well-positioned to sustain its growth momentum over the medium to long term.

According to the International Monetary Fund (IMF), India is projected to register a 6.5% GDP growth rate in 2025 and 6.4% in 2026 , reinforcing its position as one of the fastest-growing major economies among Emerging Market and Developing Economies (EMDEs). This outlook reflects Indias continued economic resilience amid an uncertain global environment marked by geopolitical tensions, evolving trade dynamics, and moderating inflation.

Indias consistent growth performance underscores its role as a key driver of global economic expansion, supported by improving macroeconomic fundamentals, a vibrant services sector, sustained public investment in infrastructure, and policy initiatives aimed at enhancing productivity, manufacturing, and the overall investment climate.

The economy continued to demonstrate robust momentum during FY 2025-26, supported by strong performance in manufacturing, construction, and services. Growth is expected to remain resilient over the medium term, driven primarily by robust domestic demand, higher capital expenditure, improving private consumption, and sustained government investment. Inflation has moderated significantly, supported by easing food prices and prudent monetary policy. To further strengthen export competitiveness, India continues to focus on deeper integration into global value chains and enhancing

manufacturing capabilities under various production-linked initiatives.

These projections stand out against a comparatively moderate global growth outlook, with the world economy expected to expand by around 3.0% in 2025 and 3.1% in 2026 , highlighting Indias resilience and growing contribution to global economic growth.

This robust and resilient growth story is driven by perseverance, innovation, and long-term policy vision.

The Indian economy has consistently demonstrated its ability to overcome global uncertainties and convert challenges into opportunities while pursuing sustainable, balanced, and inclusive growth. Through continued structural reforms, digital transformation, and strong fiscal management, India has further strengthened its position as a preferred investment destination and a key contributor to global economic stability.

This sustained economic performance reflects Indias growing significance in the global economic landscape.

Several landmark financial and structural reforms introduced over the past decade continue to support economic growth, including:

• Liberalisation of the Foreign Direct Investment (FDI) regime;

• Expansion of the automatic approval route across various sectors;

• Promotion of Public-Private Partnerships (PPPs) for infrastructure development;

• Significant public investment in transportation, logistics, and digital infrastructure; and

• Continued emphasis on manufacturing, digitalisation, and ease of doing business.

The services sector continues to remain the primary engine of growth, supported by strong demand for financial services, information technology, real estate, tourism, and professional services. The Purchasing Managers Index (PMI) for services has remained firmly in expansion territory during 2026, reflecting sustained business confidence and strong domestic demand.

Manufacturing is expected to benefit from stable input costs, improved supply chains, higher capacity utilisation, and supportive government initiatives such as the Production Linked Incentive (PLI) Scheme and the Make in India programme. Continued regulatory reforms and infrastructure development are expected to improve productivity and enhance Indias global competitiveness.

Indias economic reforms are complemented by initiatives promoting a business-friendly environment, climate-conscious development, improved ease of living, digital governance, and transparent regulatory systems. Supported by substantial investments in physical and digital infrastructure, rapid adoption of artificial intelligence and emerging technologies, and a favourable investment climate, India has consolidated its position as the worlds fourth-largest economy , with a nominal GDP exceeding US$4 trillion , further strengthening its role as a global economic powerhouse.

Industry Challenges

Despite favourable long-term fundamentals, the global textile industry continues to face several operational and economic challenges, including:

• Geopolitical Uncertainties: Ongoing geopolitical conflicts and trade tensions continue to disrupt global supply chains, impact freight movement, and create volatility in international trade.

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• Volatility in Raw Material Prices: Prices of cotton, synthetic fibres, energy, chemicals, and other key inputs remain susceptible to fluctuations, affecting production costs and profitability.

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• Rising Logistics and Operating Costs: Higher transportation costs, labour shortages in certain regions, and elevated financing costs continue to exert pressure on manufacturers.

• Changing Consumer Expectations: Consumers are increasingly demanding sustainable, ethically sourced, and environmentally friendly products, encouraging manufacturers to adopt greener production processes and greater supply chain transparency.

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• Intensifying Competition: Global manufacturers face increasing competition from low-cost production centres while simultaneously investing in product innovation and operational efficiency.

Growth Opportunities

Despite these challenges, the textile industry continues to offer significant long-term opportunities driven by structural changes in global consumption patterns and manufacturing strategies.

• Growing demand for sustainable and recycled textiles.

• Expansion of technical textiles across industrial applications.

• Diversification of global sourcing beyond traditional manufacturing hubs.

• Increased adoption of automation, artificial intelligence, and Industry 4.0 technologies.

• Supportive government policies promoting domestic manufacturing, exports, and infrastructure development.

• Rising demand from emerging economies supported by increasing urbanisation and disposable incomes.

Global Market Outlook

The long-term outlook for the global textile industry remains positive. Increasing consumer spending, rising fashion consciousness, growing demand for functional and performance textiles, and rapid expansion of e-commerce continue to support industry growth. Asia-Pacific remains the largest manufacturing and consumption hub owing to its established production ecosystem, skilled workforce, and competitive cost structure. At the same time, North America and Europe continue to witness growing demand for sustainable, premium, and technical textile products.

Manufacturers worldwide are increasingly focusing on supply chain diversification, operational resilience, digital transformation, and environmentally responsible manufacturing to address evolving market requirements and enhance competitiveness.

Textile Market - Key Highlights

• Asia-Pacific continued to dominate the global textile market owing to its large manufacturing base and strong export capabilities.

• North America is expected to register robust growth, supported by increasing demand for technical and sustainable textiles.

• Cotton remains the largest raw material segment, while wool and other premium natural fibres are expected to witness healthy growth over the coming years.

• Natural fibres continue to account for a significant share of the global textile market, supported by increasing consumer preference for sustainable products.

• The fashion and apparel segment remains the largest application area for textiles globally.

• Technical textiles are expected to remain the fastest-growing segment, driven by increasing demand from healthcare, automotive, construction, defence, and industrial sectors.

• Digitalisation, automation, sustainability, and innovation will continue to shape the future of the global textile industry and drive long-term growth.

TEXTILES

GLOBAL TEXTILE INDUSTRY Indian Textile Industry

Indias textile and apparel industry is one of the oldest and most significant sectors of the countrys economy, with a rich heritage spanning over 5,000 years. From its early prominence in cotton cultivation and handwoven fabrics to becoming one of the worlds leading textile manufacturing hubs, the industry has continuously evolved through innovation, modernization, and technological advancement while preserving Indias diverse cultural and traditional craftsmanship.

Today, the textile sector serves as a key pillar of Indias manufacturing economy, contributing significantly to industrial output, exports, employment generation, and rural livelihoods. As one of the largest employers after agriculture, the industry supports millions of people across the entire value chain, from fibre production and spinning to weaving, processing, garment manufacturing, and retail.

India enjoys a distinct competitive advantage owing to the availability of abundant natural fibres, a large skilled workforce, integrated manufacturing capabilities, and a well-established textile value chain. Supported by favourable government policies, increasing investments, digital transformation, and growing global demand, the country continues to strengthen its position as a preferred sourcing destination for textiles and apparel.

The Indian home textiles segment continues to play a pivotal role in global markets, backed by strong raw material availability, diversified product offerings, advanced manufacturing capabilities, and an expanding domestic consumer base. Domestic manufacturers are increasingly shifting from traditional high-volume product categories towards premium, value-added, design- oriented, and sustainable products to enhance profitability and strengthen their global competitiveness.

The growth of the home textiles industry is being supported by several structural factors, including:

* Competitive manufacturing costs and a robust integrated supply chain.

* Rapid expansion of organised retail and e-commerce platforms.

* Strong domestic demand driven by rising disposable incomes and urbanisation.

* Growth in the housing, hospitality, healthcare, and real estate sectors.

* Increasing consumer preference for premium, sustainable, and branded home textile products.

Technical textiles have emerged as one of the fastest-growing segments of the Indian textile industry. Growing demand from sectors such as healthcare, automotive, infrastructure, defence, agriculture, construction, and industrial applications is creating significant opportunities for manufacturers. Government initiatives, including the National Technical Textiles Mission (NTTM) and the Production Linked Incentive (PLI) Scheme, are further encouraging investments, innovation, and capacity expansion in this segment.

India continues to be a net exporter of technical textile products and is steadily strengthening its presence in international markets. Although the country currently accounts for a relatively modest share of the global technical textiles market, significant untapped potential exists due to increasing domestic consumption, expanding manufacturing capabilities, and favourable policy support.

Looking ahead, the long-term outlook for the Indian textile industry remains positive. Continued government focus on infrastructure development, ease of doing business, export promotion, sustainability, digitalisation, and value-added manufacturing is expected to drive future growth. Increasing investments in modern manufacturing technologies, product innovation, and environmentally responsible production practices will further enhance Indias competitiveness in the global textile market and support sustainable, profitable growth for the industry.

Indian Textile Industry Outlook

The Indian textile and apparel industry continued to demonstrate resilience during FY 2025-26 despite a dynamic global economic environment marked by geopolitical uncertainties, evolving trade policies, and supply chain realignments. Supported by strong domestic demand, favourable government initiatives, increasing investments, and expanding manufacturing capabilities, the sector maintained its position as one of the largest contributors to Indias manufacturing output, exports, and employment.

India continues to strengthen its position as a preferred global sourcing destination due to its abundant availability of natural fibres, integrated textile value chain, skilled workforce, competitive manufacturing costs, and growing focus on sustainable production practices. The industrys long-term fundamentals remain robust, supported by increasing urbanisation, rising disposable incomes, expanding organised retail, and rapid growth of e-commerce.

Industry Challenges

While the long-term outlook remains encouraging, the industry continues to face several challenges:

• Global Economic Uncertainty: Geopolitical conflicts, changing trade regulations, and supply chain disruptions continue to create volatility in international markets.

• Raw Material Price Volatility: Fluctuations in the prices of cotton, synthetic fibres, energy, and chemicals continue to impact production costs and operating margins.

• Intensifying Global Competition: Competition from other textile-producing nations requires Indian manufacturers to continuously improve productivity, quality, innovation, and delivery capabilities.

• Changing Consumer Preferences: Growing demand for sustainable, traceable, and environmentally responsible products is encouraging manufacturers to adopt greener technologies and circular manufacturing practices.

• Logistics and Compliance Costs: Rising freight costs and evolving global regulatory requirements continue to influence export competitiveness.

Growth Drivers

Despite these challenges, several structural factors continue to support the industrys long-term growth:

• Strong domestic consumption supported by rising income levels and urbanisation.

• Increasing government support through initiatives such as the Production Linked Incentive (PLI) Scheme, PM MITRA Parks, National Technical Textiles Mission (NTTM), and various export promotion measures.

• Growing investment in modern manufacturing technologies, automation, artificial intelligence, and digital supply chain solutions.

• Rising demand for value-added garments, premium home textiles, sustainable products, and technical textiles.

• Diversification of global sourcing strategies, creating opportunities for India to strengthen its position in international textile supply chains.

Technical Textiles - A Key Growth Opportunity

Technical textiles continue to emerge as one of the fastest-growing segments of the industry. Increasing demand from healthcare, automotive, defence, construction, agriculture, infrastructure, and industrial applications is creating significant opportunities for Indian manufacturers. Continuous investments in research, innovation, and advanced manufacturing technologies are expected to accelerate the growth of this high-value segment.

The Way Forward

The future of the Indian textile industry remains promising, supported by favourable demographic trends, policy reforms, digital transformation, and increasing global demand for sustainable and value-added textile products. To further enhance global competitiveness, the industry is expected to focus on:

• Modernisation of manufacturing facilities through automation and advanced technologies.

• Product innovation and expansion into high-value textile segments.

• Strengthening sustainability practices through resource-efficient and environmentally responsible manufacturing.

• Diversification of export markets and enhancement of supply chain resilience.

• Continuous skill development and adoption of Industry 4.0 technologies.

With its strong manufacturing ecosystem, integrated value chain, supportive policy framework, and commitment to innovation and sustainability, the Indian textile industry is well positioned to capitalise on emerging global opportunities and achieve sustainable long-term growth.

MANPOWER SUPPLY/STAFFING SEGMENT Manpower Supply and Staffing Industry

One of the key business segments of SBC Exports Limited is manpower supply and staffing services, providing skilled, semiskilled, and unskilled workforce solutions to various Government departments, Public Sector Undertakings (PSUs), autonomous bodies, and private sector organisations. The Company offers flexible staffing solutions that enable clients to efficiently manage their workforce requirements while ensuring regulatory compliance and operational efficiency.

The global staffing industry continues to demonstrate resilience amid economic uncertainty, changing labour-market conditions and evolving workforce requirements. According to the latest World Employment Confederation (WEC) Industry Impact Report 2026, private employment agencies placed approximately 61 million people into jobs globally in 2024, nearly 1 million more than in 2023, despite industry revenues declining by 4.2%. Of these placements, approximately 58.4 million were through temporary agency work, while around 2.5 million were through direct recruitment, highlighting the continued importance of flexible workforce solutions.

The latest WEC Q2 2026 Labour Market Intelligence Insights indicates that the staffing market is showing early signs of recovery, although the recovery remains uneven across countries and sectors. Global online job postings for agency work increased by approximately 10% year-on-year in Q1 2026, while agency-worker hours increased by 3.7% in the United States, 6.4% in Chile and 7.4% in Canada. Europe also recorded modest growth of approximately 1.2% in agency-worker activity.

The Asia-Pacific region is emerging as an important growth market, with WEC reporting that it is now the largest region by staffing job placements, with India and China among the leading contributors to growth. At the same time, the increasing adoption of digital recruitment and artificial intelligence is transforming candidate sourcing, matching, onboarding and workforce management.

Recent market developments also indicate improving hiring momentum. In Q2 2026, Randstad reported 1.9% organic revenue growth, with revenue in the United States increasing by 4%, including a 13% increase in its operational business, while Germany returned to 4% year-on-year growth and Iberia recorded 11% growth. These developments indicate early signs of stabilisation in staffing demand, particularly in temporary and operational workforce segments.

Going forward, the staffing industry is expected to benefit from the continued demand for flexible workforce solutions, specialised talent, temporary staffing, digital recruitment, AI-enabled talent matching, reskilling and multi-country workforce solutions . Persistent skill shortages and changing employer requirements are likely to further strengthen the role of staffing companies as strategic workforce partners.

Key Growth Drivers

The manpower supply industry is expected to continue benefiting from several long-term growth drivers, including:

• Increasing demand for workforce flexibility and cost optimisation.

• Rising adoption of temporary, contract, and project-based employment models.

• Expansion in infrastructure, manufacturing, healthcare, logistics, e-commerce, IT, and public sector projects requiring scalable manpower solutions.

• Rapid digitalisation of recruitment, onboarding, payroll management, and workforce administration.

• Growing use of Artificial Intelligence (AI), automation, and data analytics in talent acquisition and workforce management.

• Government initiatives promoting employment generation, skill development, and labour market formalisation.

Industry Challenges

Despite favourable long-term prospects, the industry continues to face certain challenges:

• Shortage of skilled professionals across specialised sectors.

• Compliance with evolving labour laws, wage regulations, and social security requirements.

• Rising employee acquisition, retention, and training costs.

• Margin pressures arising from increasing competition and higher operating expenses.

• Managing workforce productivity while ensuring service quality and regulatory compliance.

Industry Outlook

The long-term outlook for the global manpower supply and staffing industry remains positive. Businesses across sectors are increasingly outsourcing workforce management to improve operational efficiency, reduce costs, and enhance organisational agility. The growing adoption of digital recruitment technologies, AI-enabled talent management, and flexible employment models is expected to further accelerate industry growth during 2026 and beyond .

India is also emerging as one of the fastest-growing staffing markets, supported by expanding organised employment, infrastructure development, manufacturing growth, digital transformation, and government initiatives such as Skill India , Digital India , and increased investments in industrial and public infrastructure.

With its established presence in manpower supply and staffing services for Government and private sector organisations, SBC Exports Limited is well positioned to benefit from these favourable industry trends. The Companys continued focus on operational excellence, technology adoption, regulatory compliance, and customer-centric service delivery is expected to strengthen its competitive position and support sustainable long-term growth.

INDIA AND STAFFING SEGMENT: - AN OVERVIEW India and Staffing Segment - An Overview

Indias staffing industry continued to demonstrate robust growth during FY 2025-26 , supported by strong economic activity, increasing formalisation of the workforce, expanding infrastructure projects, digital transformation across industries, and rising adoption of flexible employment models. Organisations across both the public and private sectors increasingly relied on contract staffing solutions to address evolving business requirements while maintaining operational agility and cost efficiency.

The flexi staffing industry maintained its growth momentum during FY 2025-26, driven by sustained demand from sectors such as manufacturing, FMCG, retail, e-commerce, logistics, healthcare, energy, infrastructure, telecommunications, and financial services. Businesses continued to prefer flexible workforce solutions to meet seasonal demand, execute project-based assignments, and optimise workforce costs in an evolving economic environment.

The Information Technology (IT) staffing segment also continued its recovery during FY 2025-26. Increasing investments in digital transformation, cloud computing, artificial intelligence (AI), cybersecurity, data analytics, and Global Capability Centres (GCCs) led to a steady rise in demand for skilled technology professionals. Contract hiring and specialised staffing solutions remained key drivers of growth as organisations accelerated their digital initiatives.

The broader staffing industry witnessed healthy expansion across both white-collar and blue-collar employment segments. Continued investments in infrastructure, manufacturing, logistics, renewable energy, healthcare, and government-led development projects generated significant employment opportunities, while organised staffing companies played an increasingly important role in meeting workforce requirements efficiently and in compliance with labour regulations.

The staffing sector is also benefiting from several structural growth drivers, including:

• Increasing formalisation of Indias workforce.

• Rising adoption of flexible and project-based employment models.

• Expansion of manufacturing under the Make in India initiative.

• Growth of Global Capability Centres (GCCs) and digital services.

• Government investments in infrastructure, logistics, transportation, and public services.

• Accelerated adoption of technology-enabled recruitment, payroll, compliance, and workforce management solutions.

• Continued focus on skill development through initiatives such as Skill India and other employment-generation programmes.

OUTLOOK - Looking Ahead: An Optimistic Outlook for An Textile

India is expected to remain one of the fastest-growing staffing markets globally, supported by favourable demographics, sustained economic growth, increasing private and public investments, and the growing preference for organised workforce solutions. As businesses continue to embrace hybrid workforce models and focus on operational flexibility, the demand for manpower outsourcing, contract staffing, and specialised recruitment services is expected to strengthen further during FY 2026-27 .

With increasing formal employment, regulatory reforms, and rapid digitalisation of human resource management, the staffing industry is well positioned to play a critical role in supporting Indias economic growth and employment generation. These favourable industry trends provide significant opportunities for organised staffing companies such as SBC Exports Limited to expand their service offerings, strengthen client relationships, and deliver sustainable long-term value.

FINANCIAL PERFORMANCE IN 2025-2026:

Future Outlook

SBC Exports Limited remains optimistic about its long-term growth prospects and is well positioned to capitalize on emerging opportunities across its business segments. The Company will continue to focus on sustainable growth through innovation, operational excellence, customer-centricity, and disciplined financial management while adapting to evolving market dynamics.

Market Trends and Innovation

The Company continues to closely monitor emerging industry trends, including the growing demand for sustainable textiles, value-added apparel, technical textiles, digital transformation, and changing consumer preferences. Through continuous product innovation, technology adoption, and process improvements, the Company aims to strengthen its competitive position and deliver high-quality products and services across its business verticals.

Innovation will remain a key strategic priority, supported by ongoing investments in modern manufacturing technologies, automation, quality enhancement, and digital capabilities. The Company also intends to explore environmentally sustainable production methods and resource-efficient manufacturing practices in line with global ESG expectations.

Strategic Growth and Business Expansion

The Company remains focused on expanding its domestic and international presence by strengthening customer relationships, diversifying its product portfolio, and exploring new business opportunities. Strategic partnerships, market expansion initiatives, and increased penetration into high-growth sectors will continue to support long-term business growth.

In the manpower supply segment, the Company expects to benefit from the increasing demand for organised staffing solutions across Government departments, public sector undertakings, manufacturing, logistics, infrastructure, healthcare, and other industries. The Company will continue to enhance its service capabilities through technology-enabled workforce management and efficient compliance systems.

Operational Excellence

Operational excellence remains a key focus area for the Company. Continuous improvement in manufacturing efficiency, supply chain optimisation, cost management, automation, and digitalisation will enhance productivity and strengthen operational resilience. The Company remains committed to maintaining high quality standards while improving overall operational efficiency and profitability.

Sustainability and ESG Commitment

Sustainability continues to be an integral part of the Companys long-term strategy. SBC Exports Limited is committed to promoting environmentally responsible manufacturing practices, efficient utilisation of natural resources, responsible sourcing, waste reduction, and regulatory compliance. The Company will continue to strengthen its Environmental, Social and Governance (ESG) framework while creating long-term value for all stakeholders.

Human Capital Development

The Companys employees remain its most valuable asset. SBC Exports Limited will continue to invest in employee development through training, skill enhancement, leadership development, workplace safety, and employee engagement initiatives. Building a diverse, inclusive, and high-performance work culture will remain a key priority to support sustainable business growth.

Outlook

Supported by Indias strong economic fundamentals, favourable government policies, increasing global sourcing opportunities, and growing demand across its business segments, SBC Exports Limited is confident of strengthening its market position in the coming years. The Companys focus on innovation, operational excellence, prudent financial management, digital transformation, and sustainable business practices will continue to drive long-term growth and enhance value creation for its shareholders, customers, employees, and other stakeholders.

Key Financial Insights

• Top-Line Momentum: Revenue from operations crossed the ?40,000 Lakh mark, registering a strong 34.38% growth, proving robust business scaling and market demand.

• Explosive Profitability: Profit After Tax (PAT) outpaced revenue growth significantly, surging by 89.07%. This highlights excellent operational leverage, meaning the company successfully managed its fixed overheads while scaling up volume.

• Shareholder Value: Total Comprehensive Income followed a similar trajectory, nearly doubling with an 88.74% increase, reflecting strong overall wealth creation for the period.

We are pleased to report another year of exceptional financial performance for FY 2025-26, reflecting the successful execution of our strategic initiatives and continued business expansion.

Revenue from Operations increased by 34.38% to ?40,320.71 Lakhs, compared to ?30,004.52 Lakhs in the previous financial year. This robust growth was driven by increased market penetration, expansion of our business operations, a diversified customer base, and sustained demand across our key business segments.

The Company also delivered strong profitability during the year. Profit Before Tax (PBT) grew by 86.61% to ?3,425.09 Lakhs, while Profit After Tax (PAT) increased by 89.07% to ?2,527.28 Lakhs, compared to ?1,336.68 Lakhs in FY 2024-25. These impressive results reflect our continued focus on operational excellence, improved efficiencies, prudent cost management, and a favourable business mix.

Further, Total Comprehensive Income stood at ?2,458.31 Lakhs, registering a significant growth of 88.74% over the previous year, demonstrating the Companys consistent financial strength and value creation.

These outstanding financial results reaffirm the effectiveness of our long-term growth strategy, disciplined financial management, and our commitment to delivering sustainable value to all stakeholders.

Looking ahead, we remain focused on expanding our market presence, strengthening our product and service offerings, leveraging technological advancements, and enhancing operational efficiencies. With a strong financial foundation and a clear strategic vision, we are confident in our ability to sustain profitable growth and create long-term value for our shareholders and stakeholders.

We are pleased to report another year of strong financial performance for FY 2025-26 , underscoring the Companys resilient business model and the successful execution of its strategic growth initiatives.

Revenue from Operations increased by 30.19% to ? 30,142.10 Lakhs , compared to ? 23,152.95 Lakhs in the previous financial year. This growth was driven by increased market penetration, expansion of our customer base, stronger demand across our business segments, and the Companys continued focus on delivering value-driven products and services.

The Company also recorded a significant improvement in profitability. Profit Before Tax (PBT) increased by 75.58% to ? 2,953.55 Lakhs , while Profit After Tax (PAT) grew by 80.46% to ^ 2,175.86 Lakhs , compared to ^ 1,205.74 Lakhs in FY 2024-25. This remarkable growth reflects the Companys emphasis on operational excellence, improved productivity, effective cost management, and enhanced resource utilisation.

Further, Total Comprehensive Income stood at ^ 2,106.89 Lakhs , registering a robust growth of 79.84% over the previous year, demonstrating the Companys continued financial strength and sustainable value creation.

These encouraging financial results reaffirm the effectiveness of our long-term strategy and disciplined approach to business operations. They also strengthen our confidence in the Companys ability to generate consistent returns while maintaining financial stability.

Looking ahead, we remain committed to expanding our market presence, strengthening our product portfolio, investing in innovation and technology, and enhancing operational efficiencies. Supported by a strong financial foundation and a clear strategic vision, we are confident in our ability to sustain profitable growth and deliver long-term value to our shareholders and all other stakeholders.

INTERNAL CONTROL SYSTEM

The Company has established a comprehensive and effective internal control framework designed to safeguard its assets, ensure the reliability of financial reporting, promote operational efficiency, and ensure compliance with applicable laws, regulations, and internal policies. The internal control systems are commensurate with the nature, scale, and complexity of the Companys business operations and are periodically reviewed to address evolving business risks and regulatory requirements.

Risk Management and Control Environment

The Company follows a structured risk-based approach to identify, evaluate, and mitigate key business risks across its operations. The internal control framework addresses risks associated with procurement of raw materials, manufacturing processes, inventory management, sales and distribution, information technology, financial reporting, statutory compliances, and other critical business functions. Appropriate mitigation measures are implemented to minimize the impact of identified risks and support sustainable business growth.

Robust Control Framework

The Companys internal control framework comprises well-defined policies, standard operating procedures, and clearly documented authority matrices. Key control mechanisms include:

• Appropriate segregation of duties across critical business and financial processes.

• Multi-level approval mechanisms for significant financial and operational transactions.

• Physical safeguards over assets, inventories, and other valuable resources.

• Well-defined accounting policies and procedures to ensure complete, accurate, and timely recording of financial transactions.

• System-driven controls and periodic reconciliations to strengthen financial discipline and operational accuracy.

Ethical Governance and Compliance

The Company continues to maintain a strong culture of integrity, transparency, and ethical business conduct. A comprehensive Code of Conduct, supported by various internal policies, provides clear guidance on ethical standards and compliance expectations for Directors, senior management, and employees. The management remains committed to fostering a sound control environment through effective governance, accountability, and continuous oversight.

Information and Communication

The Company has established effective information and communication systems that facilitate the timely dissemination of financial, operational, and compliance-related information across all levels of the organization. These systems support informed decision-making, improve transparency, and enable efficient monitoring of business performance and regulatory compliance.

Monitoring and Continuous Improvement

The effectiveness of the internal control framework is regularly monitored through internal audits, management reviews, process evaluations, and periodic risk assessments. The Audit Committee of the Board periodically reviews the findings of the internal auditors and monitors the implementation of corrective actions wherever necessary. Recommendations arising from audit observations are promptly addressed to further strengthen internal controls and improve operational efficiency.

The Company believes that continuous evaluation and enhancement of its internal control systems are essential to maintaining a robust governance framework and ensuring long-term business sustainability.

Conclusion

Based on the reviews conducted during the financial year ended March 31, 2026 , the Board is of the opinion that the Companys internal financial controls are adequate and operating effectively. The Company remains committed to continuously strengthening its governance practices, enhancing operational efficiencies, safeguarding stakeholder interests, and creating sustainable long-term value.

RISKS & CONCERNS

Risk management continues to be an integral part of the Companys corporate governance framework and business strategy. The Company has established a comprehensive risk management process to identify, assess, monitor, mitigate, and report significant business risks that may impact its operations and financial performance.

The Board of Directors, supported by the Risk Management Committee and senior management, periodically reviews the Companys risk profile and the effectiveness of mitigation measures to ensure that emerging risks are addressed proactively. The Company continuously strengthens its internal systems and processes to enhance resilience and support sustainable growth.

The key risks and concerns impacting the Companys business are outlined below:

1. Supply Chain Risks

The textile and apparel industry operates through an integrated supply chain involving procurement of raw materials, manufacturing, logistics, and distribution. Any disruption arising from geopolitical developments, transportation bottlenecks, natural calamities, or unforeseen global events may affect the timely availability of raw materials and finished goods. The Company continues to diversify its supplier base, strengthen vendor relationships, and optimise inventory planning to mitigate such risks.

2. Raw Material Price Volatility

The prices of key raw materials, including cotton, wool, yarn, synthetic fibres, dyes, and packaging materials, are subject to fluctuations due to changes in demand and supply dynamics, climatic conditions, inflationary pressures, and global commodity trends. Significant variations in input costs may impact margins. The Company actively monitors market conditions, adopts prudent procurement strategies, and improves operational efficiencies to minimise the impact of such volatility.

3. Seasonality of Business

Demand for certain product categories, particularly woollen knitted garments, remains seasonal, with a substantial portion of annual sales being generated during the third quarter of the financial year. To reduce dependence on seasonal demand, the Company continues to expand its portfolio of cotton garments, casual wear, and other year-round products while strengthening its presence across domestic and international markets.

4. Market Competition

The textile and apparel industry remains highly competitive with the presence of both organised and unorganised players. Changing consumer preferences, evolving fashion trends, pricing pressures, and technological advancements require continuous innovation and product differentiation. The Company remains focused on enhancing product quality, strengthening its brands, expanding distribution channels, and improving customer experience to maintain its competitive position.

5. Economic and Business Environment

Macroeconomic conditions, inflation, changes in consumer spending patterns, interest rate movements, foreign exchange fluctuations, and global economic uncertainties may influence demand for textile products and overall business performance. The Company closely monitors economic developments and adopts appropriate business strategies to maintain operational resilience and financial stability.

6. Digital Transformation and Evolving Retail Landscape

The rapid growth of e-commerce and digital commerce continues to reshape the retail ecosystem. Consumer purchasing behaviour is increasingly shifting towards online platforms, requiring businesses to strengthen their digital capabilities. The Company continues to enhance its omni-channel presence by expanding its reach through leading e-commerce marketplaces and strengthening its digital marketing initiatives to improve customer engagement and market penetration.

7. Regulatory and Compliance Risks

The Company operates in a regulated business environment and is required to comply with various statutory and regulatory requirements relating to corporate laws, taxation, labour laws, environmental regulations, SEBI regulations, and other applicable legislations. The Company has established robust compliance monitoring systems and regularly reviews changes in the regulatory framework to ensure timely compliance.

Outlook

While the operating environment continues to present uncertainties, the Company remains confident in its ability to manage these challenges through disciplined risk management practices, operational excellence, product diversification, and continuous innovation. Supported by a strong governance framework, sound financial position, and experienced management team, the Company is well positioned to capitalise on emerging growth opportunities and create sustainable long-term value for its stakeholders.

SBC EXPORTS LIMITED - COMPETITIVE ADVANTAGES

SBC Exports Limited has built a strong competitive position through its diversified business model, customer-centric approach, operational excellence, and continuous focus on innovation. The Companys key competitive strengths are as follows:

1. Diversified Business Portfolio

Unlike conventional textile companies, SBC Exports Limited operates across multiple business verticals, including Garments & Carpets, Information Technology & E-Governance Services, and Travel & Tourism through MaujiTrip . This diversified business model enables the Company to reduce sector-specific risks, create multiple revenue streams, and enhance long-term business resilience.

2. Strong Manufacturing Capabilities

The Company possesses modern manufacturing facilities supported by advanced production technology and skilled manpower. Continuous investment in automation, process improvements, and technology upgradation has enhanced manufacturing efficiency, product quality, and production capacity while reducing operating costs.

3. Established Brands and Product Portfolio

The Company has developed a strong portfolio of brands, including F-Route, SBC Design+, and IEDEE , offering a wide range of garments such as T-shirts, denims, jackets, trousers, sweatshirts, and other apparel products. This diversified product mix enables the Company to cater to varied customer preferences across domestic and international markets.

4. Expanding Digital and E-Commerce Presence

The Company continues to strengthen its Omni channel retail strategy through its F-Route brand and strategic tie-ups with leading e-commerce platforms such as Amazon, Flipkart, Myntra, and Meesho , enabling wider customer reach and improved brand visibility across India.

5. Global Market Presence

With decades of experience in exports and established relationships with international customers, the Company has developed a strong presence in overseas markets. Its ability to deliver quality products, maintain timely deliveries, and meet global quality

standards has strengthened its reputation as a reliable export partner. The Company has also secured export orders from overseas customers, further expanding its international footprint.

6. Technology-Driven Operations

The Company leverages technology across manufacturing, inventory management, financial controls, customer relationship management, and business operations. Continuous investment in digital transformation enhances productivity, improves decision-making, and supports scalable growth across business segments.

7. Customer-Centric Business Approach

Customer satisfaction remains central to the Companys business philosophy. By focusing on product quality, timely delivery, customized solutions, and responsive customer service, the Company has established long-term relationships with domestic and international customers, resulting in repeat business and sustained growth.

8. Commitment to Sustainability

The Company remains committed to responsible business practices by promoting sustainable sourcing, efficient utilisation of resources, waste reduction initiatives, and environmentally responsible manufacturing processes. These initiatives support longterm sustainability while meeting evolving customer and regulatory expectations.

9. Experienced Leadership and Strong Governance

The Company is guided by an experienced Board of Directors and a professional management team with extensive industry expertise. Supported by sound corporate governance practices, effective risk management, and a robust internal control framework, the Company continues to maintain high standards of transparency, accountability, and operational discipline.

10. Financial Strength and Growth

The Company has consistently delivered strong financial performance, supported by robust revenue growth, improving profitability, and prudent financial management. Its healthy balance sheet and diversified revenue base provide the flexibility to pursue strategic investments and future expansion opportunities while creating sustainable value for shareholders.

Outlook

Leveraging its diversified business model, established brands, expanding digital presence, technological capabilities, and strong governance framework, SBC Exports Limited is well positioned to capitalize on emerging opportunities across its business verticals. The Company remains committed to innovation, operational excellence, and sustainable growth, thereby enhancing long-term value for all stakeholders.

OPPORTUNITIES

India continues to emerge as one of the worlds fastest-growing economies, creating significant opportunities across the textile, apparel, technology, and travel sectors. With its diversified business model, strong operational capabilities, and customercentric approach, SBC Exports Limited is well positioned to capitalize on these emerging opportunities.

1. Expanding Domestic and Global Textile Demand

The increasing demand for quality apparel and textile products in both domestic and international markets presents significant growth opportunities. Rising disposable incomes, urbanisation, and changing fashion preferences are driving higher consumption of branded garments. The Company is well positioned to leverage these trends through its diversified product portfolio and expanding market presence.

2. Growing E-Commerce and Omni-channel Retail

The rapid expansion of e-commerce has transformed consumer buying behaviour. With its established presence on leading online marketplaces such as Amazon, Flipkart, Myntra, and Meesho, along with its own brand F-Route , the Company is well positioned to strengthen its digital footprint, enhance customer engagement, and expand its reach across India and international markets.

3. Rising Export Opportunities

India continues to strengthen its position as a preferred global sourcing destination for garments and textiles due to its skilled workforce, competitive manufacturing capabilities, and favourable trade environment. The Companys established export business, strong manufacturing capabilities, and commitment to quality provide significant opportunities to expand its international customer base and increase export revenues.

4. Product Diversification and Brand Expansion

Changing consumer preferences continue to create opportunities for companies offering innovative, quality-driven, and value- added products. The Company continues to expand its product portfolio across multiple apparel categories and strengthen its portfolio of brands, enabling it to cater to diverse customer segments and enhance brand recognition in domestic and overseas markets.

5. Government Policy Support

The Government of India continues to promote the textile and apparel sector through initiatives such as PM MITRA Parks , the Production Linked Incentive (PLI) Scheme , National Technical Textiles Mission , and various export promotion measures. These initiatives are expected to strengthen the competitiveness of Indian manufacturers and create new opportunities for capacity expansion, technology adoption, and export growth.

6. Technology and Manufacturing Excellence

Continuous investments in automation, modern manufacturing technologies, digital transformation, and process optimisation provide opportunities to improve productivity, enhance product quality, reduce operational costs, and increase manufacturing efficiency. These initiatives strengthen the Companys long-term competitiveness.

7. Sustainability and Responsible Manufacturing

Global customers are increasingly demanding environmentally responsible and ethically manufactured products. The growing focus on sustainable sourcing, resource efficiency, and environmentally friendly manufacturing practices presents an opportunity for the Company to enhance its market positioning and strengthen relationships with global buyers.

8. Growth in IT & E-Governance Services

Indias ongoing digital transformation, increasing government spending on e-governance initiatives, and growing adoption of digital public infrastructure provide significant opportunities for the Companys IT and e-governance business. Continued investments in digital services and technology solutions are expected to support long-term growth in this business segment.

9. Expansion in the Travel & Tourism Business

The Indian travel and tourism industry continues to witness strong growth, supported by increasing domestic travel, rising disposable incomes, improved infrastructure, and greater digital adoption. Through its wholly owned subsidiary MaujiTrip Limited , the Company is well positioned to capitalize on the growing demand for online travel services and expand its presence in this rapidly growing sector.

Outlook

Backed by a diversified business model, strong financial performance, expanding digital presence, experienced management team, and a continued focus on innovation and operational excellence, SBC Exports Limited remains well positioned to capitalize on emerging opportunities across its business segments. The Company will continue to invest in technology, strengthen its brands, expand its market presence, and pursue sustainable growth initiatives to create long-term value for all stakeholders.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

The Companys employees remain its most valuable asset and continue to be the cornerstone of its sustained growth and success. SBC Exports Limited is committed to fostering a work environment that promotes innovation, collaboration, integrity, continuous learning, and employee well-being. The Company firmly believes that a motivated, skilled, and engaged workforce is essential for achieving operational excellence and delivering long-term value to stakeholders.

During the financial year under review, the Company continued to invest in talent development through various learning and skill enhancement initiatives aimed at improving employee productivity, operational efficiency, and leadership capabilities. Emphasis was also placed on employee engagement, workplace safety, performance management, and maintaining a culture of accountability and inclusiveness.

The Company remains committed to providing equal opportunities for growth, encouraging diversity, and maintaining a safe, healthy, and respectful work environment across all its business operations. Continuous efforts are made to strengthen employee capabilities in line with the Companys expanding business requirements and strategic objectives.

Industrial relations throughout the year remained cordial, harmonious, and productive. The Company maintained constructive engagement with its workforce, resulting in uninterrupted operations and no loss of man-days due to industrial disputes or labour unrest during the year.

As on March 31, 2026 , the Company had 453 permanent employees on its rolls. The management remains committed to nurturing its human capital and fostering a high-performance culture that supports the Companys long-term growth aspirations and sustainable business success.

KEY FINANCIAL RATIOS

RATIO	FY 202526	FY 202425	% OF CHANG E	REASONS FOR CHANGE IN THE RATIO BY MORE THAN 25%
Current Ratio	1.23	1.21	1.39%	NA
Debt-Equity Ratio	2.93	2.40	22.06%	NA
Debt Service Coverage Ratio	4.38	3.85	13.73%	NA
Return On Equity ratio	0.29	0.22	30.01%	Due to significant variation in profit after tax in comparison with the shareholders equity during the year. The increase/decrease in profitability has resulted in a corresponding change in the return generated on the shareholders funds.
Inventory Turnover Ratio	2.57	3.08	16.47%	NA
Trade Receivables Turnover Ratio	3.24	2.63	23.04%	NA
Trade Payables Turnover ratio	6.06	4.23	43.23 %	Due to a significant increase in Avg. trade payable compared to the decrease in credit purchase compared to the previous year.
Net Capital turnover ratio	5.45	6.15	11.25%	NA
Net profit ratio	0.10	0.07	34.87%	Due to a significant increase in net profit compared to sales compared to the previous year.
Return on Capital Employed	0.34	0.29	16.30%	NA
Return on Investment	0.05	0.01	681.37 %	Due to a significant decrease in net return on investment compared to increase in capital employed compared to the previous year.

CAUTIONARY STATEMENT

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

These statements are based on certain assumptions and expectations of future events and are subject to various risks, uncertainties, and other factors, many of which are beyond the control of the Company. Actual results, performance, or achievements may differ materially from those expressed or implied in such forward-looking statements due to changes in economic conditions, government policies, market dynamics, industry trends, regulatory developments, foreign exchange fluctuations, raw material prices, competitive pressures, and other factors affecting the Companys operations.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable laws and regulations.

Readers are therefore cautioned not to place undue reliance on these forward-looking statements and are advised to consider the risks and uncertainties discussed elsewhere in this Annual Report, including the Management Discussion and Analysis, before making any investment or business decisions.

The Management Discussion and Analysis should be read in conjunction with the Companys Audited Financial Statements and the Notes thereto for the financial year ended March 31, 2026.

For and on behalf of SBC EXPORTS LIMITED

85

GOVINDJI GUPTA	DEEPIKA GUPTA
Director	Director
DIN: 01632764	DIN:03319765
Date: 28.08.2026
Place: Sahibabad