Aaradhya Disposal Industries Ltd Management Discussions

1. COMPANY OUTLOOK

Aaradhya Disposal Industries Limited is engaged in the manufacturing and supply of paper-based disposable and packaging products for domestic as well as international markets. The Companys product portfolio includes Paper Cup Blanks, Ripple Blanks, Poly-Coated Paper Rolls, Embossed Ripple Wall Paper Fans, Multi-Colour Paper Fans and Biodegradable Coated Paper, among other paper-based products.

The Company operates in a sector that is witnessing increasing emphasis on sustainable and environmentally responsible packaging solutions. Growing awareness regarding environmental impact, changing consumer preferences and the evolving regulatory environment are contributing to the gradual shift towards paper-based, recyclable and biodegradable alternatives.

The Company maintains a strong focus on product quality and consistency and sources key raw materials from established suppliers, including ITC, Century, Nippon and West Coast. The Companys sourcing and quality-control practices are directed towards maintaining consistency in product specifications and meeting customer requirements.

With its manufacturing capabilities, diversified product portfolio and presence in both domestic and international markets, the Company intends to strengthen its market position by focusing on product development, operational efficiency, customer relationships and expansion into new markets.

The Company remains focused on sustainable and responsible growth while responding to changing market conditions and emerging opportunities in the paper-based packaging industry.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS Indian Economy and Packaging Industry

The packaging industry continues to be an important component of the Indian manufacturing and consumption ecosystem. Demand for packaging solutions is supported by the growth of food and beverage, retail, hospitality, consumer goods, e-commerce and other end-use sectors.

The industry is also undergoing a gradual transformation as sustainability becomes an increasingly important consideration for manufacturers, businesses and consumers. The growing preference for recyclable, biodegradable and paper-based packaging solutions is creating opportunities for companies operating in the sustainable packaging segment.

At the same time, the industry remains exposed to several external factors, including fluctuations in raw material prices, availability of key inputs, logistics and freight costs, foreign exchange movements, changing regulatory requirements and competitive pressures.

The increasing adoption of sustainable packaging solutions provides opportunities for manufacturers with appropriate product capabilities and quality standards. However, continued investment in manufacturing efficiency, product innovation, quality management and compliance with applicable standards remains essential for maintaining competitiveness.

The Company continues to monitor developments in the packaging industry and evaluate opportunities arising from changing customer preferences, sustainability requirements and growth in domestic as well as international markets.

3. COMPANY OVERVIEW

Aaradhya Disposal Industries Limited is engaged in the manufacturing of paper-based disposable and packaging products catering to varied customer requirements across domestic and international markets.

The Companys product portfolio includes Poly-Coated Paper Rolls, Embossed Ripple Wall Paper Fans, Biodegradable Coated Paper, Multi-Colour Paper Fans, Paper Cup Blanks and Ripple Blanks. The diversified product range enables the Company to address requirements across different applications and customer segments.

The Company operates its manufacturing facility at Dewas, Madhya Pradesh, supported by an experienced and qualified workforce. Its operations involve various processes relating to paper processing, printing, coating and allied manufacturing activities.

Quality remains an important aspect of the Companys operations. The Company undertakes quality checks at various stages of the manufacturing process with a view to maintaining consistency in product specifications and meeting customer requirements.

The Company sources key raw materials from established suppliers, including ITC, Century, Nippon and West Coast, which supports the Companys efforts towards maintaining consistent input quality.

The Company also has an established export business and continues to explore opportunities to expand its presence in international markets. Going forward, the Company intends to focus on strengthening its existing customer relationships, expanding its product offerings and identifying new domestic and overseas market opportunities.

4. FINANCIAL AND OPERATIONAL PERFORMANCE

During the financial year under review, the Company recorded a significant improvement in its financial performance compared with the previous financial year.

During the year under review, the Company witnessed a change in its product mix, with notable growth in Paper Cup Blanks and Coated Paper products, along with the introduction of the Sweet/Cake/Pizza/Dry Fruit Boxes segment. Certain other product categories witnessed a decline in revenue, while export sales were impacted by adverse international market conditions and geopolitical disruptions. The Company continues to focus on strengthening its higher-growth product segments and expanding its product portfolio to support sustainable business growth.

5. PRODUCT-WISE PERFORMANCE

During the year under review, the Company recorded revenue from a diversified range of products across its domestic and export businesses.

Domestic / Other Product Revenue

Export Revenue

The product-wise performance reflects diversification across multiple product categories. During the year, certain existing product categories recorded increased revenue contribution, while newer product categories also contributed to the Companys overall business performance.

The Company continues to evaluate market demand and customer requirements with a view to improving its product mix and strengthening its presence across relevant product segments.

6. BUSINESS STRATEGY

The Companys business strategy is focused on achieving sustainable growth through market expansion, product diversification, operational efficiency, quality enhancement and responsible business practices.

• expanding its presence in existing domestic and export markets;

• developing new customer relationships and strengthening existing ones;

• expanding and diversifying its product portfolio;

• improving manufacturing efficiency and productivity;

• maintaining consistent product quality;

• optimising procurement and utilisation of raw materials;

• responding to changing customer and market requirements; and

• developing products aligned with increasing sustainability considerations.

The Company will continue to assess market conditions and allocate resources prudently towards areas offering sustainable business opportunities.

7. SUSTAINABILITY

Sustainability continues to be an important consideration in the Companys business operations and longterm strategy. The Companys product portfolio includes paper-based and biodegradable coated products that cater to the growing requirement for alternatives to conventional packaging materials.

The Company seeks to improve the efficiency of its manufacturing operations while promoting responsible utilisation of resources. It also continues to evaluate opportunities for product development and process improvements that are aligned with evolving sustainability requirements.

The Company recognises that sustainable growth requires a balance between business objectives, operational efficiency, customer requirements and environmental considerations.

8. OPPORTUNITIES

The Company believes that the evolving packaging landscape presents opportunities across both domestic and international markets.

• Growing demand for sustainable packaging: Increasing environmental awareness and the preference for paper-based, recyclable and biodegradable products are creating opportunities for manufacturers of sustainable packaging solutions.

• Expansion of food and beverage applications: The continued growth of food service, takeaway and related businesses supports demand for paper-based products used in food and beverage applications.

• Growth in organised retail and e-commerce: Expansion of organised retail and e-commerce is contributing to increased demand for efficient and reliable packaging solutions.

• Product diversification: Changing customer requirements provide opportunities for manufacturers to develop customised and application-specific products.

• Export opportunities: International demand for sustainable packaging solutions provides opportunities for Indian manufacturers to expand their geographical presence, subject to applicable quality, regulatory and trade requirements.

9. THREATS AND CHALLENGES

The Company operates in a competitive and evolving industry and is exposed to various business and external risks.

• volatility in the prices of paper and other raw materials;

• fluctuations in the availability and supply of key inputs;

• increase in freight, logistics and energy costs;

• foreign exchange fluctuations in export transactions;

• changes in domestic and international trade conditions;

• increasing competition in domestic and international markets;

• evolving environmental and sustainability-related regulations;

• changes in customer preferences and product specifications; and

• the requirement for continuous improvement in technology, quality and operational efficiency.

The Company continuously monitors these factors and takes appropriate operational and commercial measures, wherever practicable, to mitigate their potential impact on its business.

10. RISK MANAGEMENT

The Company recognises that effective risk management is an integral part of sustainable business operations. The Board of Directors periodically reviews significant business and operational risks and the measures undertaken for their mitigation.

The senior management team is responsible for identifying and monitoring key risks relevant to the Companys operations and for implementing appropriate mitigation measures.

The principal risks identified by the Company include:

• Raw Material Price and Availability Risk

• Foreign Exchange Risk

• Economic and Market Risk

• Regulatory and Sustainability Risk

• Manufacturing and Operational Risk

• Competition Risk

• Export and International Market Risk

The Company continues to monitor these risks and reviews its mitigation strategies in accordance with the changing business environment.

11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established internal control systems and processes commensurate with the nature and scale of its operations. These controls are intended to safeguard the Companys assets, ensure proper authorisation and recording of transactions, promote operational efficiency and support the reliability of financial reporting.

The Management periodically reviews actual performance against budgets and business plans. The internal control framework is also subject to review through the Companys internal audit and statutory audit processes.

The Audit Committee and the Board periodically review relevant reports and observations and consider appropriate corrective measures wherever required.

12. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human resources continue to remain an important component of the Companys operations. The Company seeks to maintain a professional and productive work environment and focuses on employee engagement, skill development and operational discipline.

During FY 2025-26, the Company maintained harmonious industrial relations. As at 31 March 2026, the Company had 28 employees on its payroll, compared with 28 employees in the previous year.

The Company believes that a capable and engaged workforce is essential for maintaining operational efficiency and supporting its growth objectives.

13. ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENTS

The Company has prepared its Financial Statements in accordance with the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Rules, 2021, and other applicable provisions of the Act.

14. CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis describing the Companys objectives, expectations, estimates, projections and other forward-looking information may constitute forward-looking statements within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied in such statements due to various factors, including changes in economic and business conditions, demand and supply conditions, raw material prices, competition, domestic and international market conditions, foreign exchange movements, government policies, taxation and regulatory changes, geopolitical developments and other factors beyond the Companys control.

The Company assumes no obligation to publicly update or revise any forward-looking statements based on subsequent events, information or developments, except as may be required under applicable laws and regulations.