Svarnim Trade Udyog Ltd Management Discussions

A. Overview of the Global Economy: Global growth projected at approximately 3.0% for 2026 (IMF July 2026 WEO Update), moderating from 2024-25 average of around 3.5%. Global headline inflation estimated to rise to around 4.7% in 2026 from 4.1% in 2025. Diversified business models helped mitigate macroeconomic challenges. Medium-term outlook cautiously optimistic.

B. Overview of the Indian Economy: India maintained position among fastest-growing major economies in FY 2025-26, supported by robust domestic consumption, government capex, stable financial conditions, easing crude oil prices, and structural reforms. Manufacturing, services, infrastructure, and digital technology sectors key drivers. Government initiatives (ease of doing business, PLI, FTAs, logistics improvements) enhanced competitiveness.

Continuation of Indian Economy overview: Risks largely contained through prudent fiscal and monetary policies; retail inflation within RBI target range for most of the year. Long-term growth outlook favourable.

C. Outlook: Year ahead presents pricing challenges around raw material costs following reinstatement of import duty on raw cotton in January 2026 and volatility in global input prices. Svarmin will focus on competitive retail price points, blends with man-made fibres. Textile market expected to stabilise; differentiation through innovation and quality key.

D. Industry Structure and Developments: Indias textile and apparel exports (including handicrafts) grew to approximately Rs. 3.16–3.25 lakh crore, led by ready-made garment exports and diversification across more than 120 export destinations (notable gains in UAE, UK, Germany, Spain, Japan). Cotton yarn/fabrics/made-ups/handloom recorded modest growth; man-made yarn/fabrics/made-ups stronger gains. Government extended RoSCTL and RoDTEP beyond sunset dates; temporary customs duty exemptions on raw cotton imports and key MMF value chain inputs; GST rationalisation; logistics facilitation initiative. Cotton production expected to increase; reinstatement of import duty on raw cotton from January 2026 contributed to moderation in textile production. Shipping/freight conditions mixed due to Middle East tensions. Medium-term outlook constructive.

• Domestic Growth: Robust domestic consumption and GST-led demand support.
• Global Recovery and FTAs: Expanding network including India-UK CETA; diversification into new export markets.
• Government Support: RoSCTL, RoDTEP, duty exemptions on key inputs.
• Digital Transformation: Sustained global demand for IT and AI-enabled services.

• Geopolitical Tensions: Middle East conflict and shipping disruptions.
• Raw Material Costs: Volatility in cotton and crude oil prices, including reinstated import duty on raw cotton.
• Inflation: Elevated global inflation could squeeze margins.
• Logistics Disruptions: Periodic shipping delays and route disruptions.

F. Segment-wise or Product-wise Performance: Company primarily engaged in single segment — Trading and Distributors.

G. Future Outlook: Positive, underpinned by Indias economic growth and gradually improving global environment. Focus on innovation, cost-effective solutions, expansion into new/diversified markets.

H. Risks and Concerns: Geopolitical Instability; Fluctuating Raw Material Prices; Inflationary Pressures; Regulatory Changes; Supply Chain Disruptions; Currency Risk.

I. Material Developments in Human Resources / Industrial Relations: Employees viewed as most valuable asset; well-structured HR policy; HR division develops skilled workforce through professional and personal growth opportunities.

J. Internal Control Systems and Their Adequacy: Robust internal control system tailored to complexity and evolving risks; ensures reliability of financial information, timely reporting, safeguarding of assets, adherence to laws and regulations; internal auditors monitor and review controls.

K. Discussion on Financial Performance with respect to Operational Performance: Described in the Directors Report.

L. Key Financial Ratios: No significant changes (change of 25% or more compared to immediately previous financial year) in any key sector-specific financial ratios to report.

M. Material Developments in Human Resources / Industrial Relations front including number of people employed: Cordial employer-employee relationship continued; special attention to human resources and employee welfare.

N. Caution Statement: Statements may be "forward looking statements"; actual results may differ depending on economic conditions, Government regulations, tax laws, and other internal and external factors.