AMD Industries Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The packaging industry continues to play an important role in supporting the growth of the food, beverage, pharmaceutical, consumer goods and other industries. Demand for packaging solutions is influenced by urbanisation, changing consumer preferences, growth in organised retail, increasing consumption of packaged products, e-commerce and the need for convenient, durable and cost-effective packaging.

The global plastic packaging industry continues to witness steady demand, with rigid packaging segments, particularly those catering to the food, beverage and healthcare sectors, providing opportunities for sustained growth. The Indian packaging industry is expected to benefit from increasing consumption, urbanisation and the continued expansion of organised retail and e-commerce.

At the same time, the packaging industry is undergoing significant transformation on account of increasing emphasis on sustainability, recyclability and circular economy principles. Customers, regulators and consumers are increasingly seeking packaging solutions with lower environmental impact. This is encouraging manufacturers to focus on recyclable materials, recycled PET (PET ), lightweight packaging and other sustainable packaging solutions.

The Company believes that the Indian packaging industry offers considerable medium- to long-term opportunities, supported by increasing demand from the beverage and consumer goods sectors and the continuing transition towards organised and branded consumption.

2. BUSINESS OVERVIEW

AMD Industries Limited is engaged in the manufacture and supply of packaging products and solutions, primarily catering to the requirements of the beverage and other consumer-facing industries.

The Company continues to focus on maintaining product quality, operational efficiency, customer relationships and timely delivery while responding to changing market requirements.

During FY 2025-26, the Company continued its efforts towards improving operational efficiencies, controlling costs and strengthening its business relationships. The Company remained focused on maintaining its manufacturing capabilities and meeting the evolving requirements of its customers.

The Company also continues to monitor market conditions, input costs and customer requirements closely and undertakes appropriate measures to maintain operational efficiency and competitiveness.

3. OPPORTUNITIES AND THREATS Opportunities:

The Indian packaging sector presents several opportunities for sustainable long-term growth. Increasing urbanisation, rising disposable incomes, changing lifestyles and increasing consumption of packaged food and beverages are expected to support demand for packaging products.

The growing organised retail and e-commerce sectors are also expected to create additional demand for efficient and reliable packaging solutions.

The increasing focus on recyclable and sustainable packaging provides an opportunity for established packaging manufacturers to develop and supply products aligned with evolving customer and regulatory requirements.

The Company intends to leverage its manufacturing capabilities, customer relationships and industry experience to participate in these growth opportunities.

Threats:

The packaging industry remains exposed to fluctuations in the prices of key raw materials, energy costs, transportation expenses and other input costs. Changes in commodity prices may adversely affect margins where such increases cannot be passed on to customers.

The industry is also competitive, with manufacturers competing on price, quality, product innovation, technology and delivery capabilities.

Increasing environmental regulations and restrictions relating to plastics and packaging materials may require additional investment in technology, processes and product development.

Changes in consumer preferences, demand conditions, foreign exchange movements, interest rates and general economic conditions may also affect the Company s performance.

4. BUSINESS PERFORMANCE

During FY 2025-26, the Company s revenue from operations increased to Rs. 28,224.53 lakh as compared to Rs. 27,646.47 lakh in FY 2024-25, representing an increase of approximately 2.09%.

Other income increased to Rs. 365.57 lakh from Rs. 201.47 lakh in the previous year. Consequently, total income increased to Rs. 28,590.10 lakh from Rs. 27,847.94 lakh, registering an increase of approximately 2.67%.

The Company s operating performance, however, remained under pressure during the year due to higher operating costs. Cost of materials consumed increased to Rs. 18,703.57 lakh from Rs. 17,173.25 lakh, while employee benefits expense increased to Rs. 2,526.40 lakh from Rs. 2,246.22 lakh.

Finance costs declined to Rs. 881.04 lakh from Rs. 963.26 lakh, representing a reduction of approximately 8.54%. Depreciation and amortisation expense also declined to Rs. 1,528.10 lakh from Rs. 1,594.03 lakh.

Profit from operations before financial costs, depreciation, exceptional items and tax expenses ( EBITDA/PBDIT ) stood at approximately Rs. 1,864.43 lakh during FY 2025-26 as against Rs. 2,685.10 lakh in FY 2024-25.

The Company reported a loss before tax of Rs. 544.71 lakh during FY 2025-26 as compared to a profit before tax of Rs. 127.81 lakh in FY 2024-25.

After tax adjustments, the Company recorded a net loss of Rs. 408.77 lakh for FY 2025-26 as against a net profit of Rs. 99.91 lakh in the previous financial year.

The financial performance during the year reflects the impact of higher material and operating costs despite growth in revenue and reduction in finance costs. Management continues to focus on improving operating efficiencies, controlling costs, optimising working capital and strengthening profitability.

5. FINANCIAL PERFORMANCE

The key financial performance indicators of the Company are summarised below:

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	Rs. 28,224.53 lakh	Rs. 27,646.47 lakh
Other Income	Rs. 365.57 lakh	Rs. 201.47 lakh
Total Income	Rs. 28,590.10 lakh	Rs. 27,847.94 lakh
EBITDA / PBDIT*	Rs. 1,864.43 lakh	Rs. 2,685.10 lakh
Finance Costs	Rs. 881.04 lakh	Rs. 963.26 lakh
Profit / (Loss) Before Tax	(Rs. 544.71 lakh)	Rs. 127.81 lakh
Profit / (Loss) After Tax	(Rs. 408.77 lakh)	Rs. 99.91 lakh

* EBITDA/PBDIT represents profit from operations before financial costs, depreciation, exceptional items and tax expenses.

During FY 2025-26, revenue from operations increased by approximately 2.09%. However, the increase in material and other operating costs impacted operating profitability. While finance costs declined by approximately 8.54%, the Company reported a loss before tax of Rs. 544.71 lakh and a net loss of Rs. 408.77 lakh.

Management remains focused on improving margins, strengthening cash flows, optimising working capital and enhancing overall operational efficiency.

6. OPERATIONAL PERFORMANCE

The Company continued to focus on efficient utilisation of its manufacturing facilities and optimisation of operating costs.

Management remains committed to improving productivity, reducing avoidable costs, maintaining quality standards and responding effectively to customer requirements.

During the year, the Company closely monitored raw material prices and market conditions and continued to take appropriate measures to manage the impact of cost fluctuations on its operations.

The Company remains focused on improving manufacturing efficiencies and strengthening its operating performance through better utilisation of resources, cost optimisation and continuous process improvement.

7. OUTLOOK

The outlook for the Indian packaging sector remains positive over the medium to long term. Growth in the beverage, food, pharmaceutical and consumer goods sectors is expected to support demand for packaging products.

The increasing preference for packaged and branded products, coupled with urbanisation, organised retail and changing consumption patterns, is expected to provide opportunities for the packaging industry.

However, the Company remains cognisant of the challenges arising from raw material price volatility, competitive pressures, regulatory changes and increasing sustainability requirements.

The Company will continue to focus on strengthening its existing business, improving operational efficiency, controlling costs and identifying opportunities for sustainable and profitable growth.

8. RISKS AND CONCERNS

The Company s business is subject to various risks, including:

volatility in the prices of key raw materials;

changes in energy and transportation costs;

competitive pressures within the packaging industry;

changes in customer demand;

regulatory and environmental requirements relating to plastic packaging;

availability and cost of financing;

interest rate fluctuations;

technological changes and the need for continuous product development; and

general economic and market conditions.

The Company regularly reviews these risks and takes appropriate measures to mitigate their potential impact. The Company s risk management framework is intended to identify, assess and manage significant business and operational risks.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established appropriate internal control systems commensurate with the size and nature of its business.

The internal control framework is designed to safeguard the Company s assets, ensure proper authorisation and recording of transactions, promote operational efficiency and ensure compliance with applicable laws and regulations.

The Company periodically reviews its internal control systems and processes with a view to strengthening controls and addressing identified areas of improvement.

The Audit Committee reviews the adequacy and effectiveness of internal financial controls and other relevant matters in accordance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

10. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human resources continue to be an important element in the Company s operational performance.

The Company recognises the importance of a skilled, motivated and engaged workforce and continues to focus on employee development, workplace safety, productivity and harmonious industrial relations.

The Company maintained cordial relations with its employees during the year under review and remains committed to fostering a productive and positive work environment.

11. ENVIRONMENT, HEALTH AND SAFETY

The Company remains committed to conducting its operations in a responsible manner and complying with applicable environmental, health and safety requirements.

The Company continues to focus on efficient utilisation of resources, operational safety and compliance with applicable environmental standards.

Given the evolving regulatory and market focus on sustainable packaging, the Company remains attentive to developments relating to recyclability, resource efficiency and responsible use of packaging materials.

12. TECHNOLOGY AND INNOVATION

Technology continues to play an important role in improving manufacturing efficiency, product quality and resource utilisation.

The Company continues to evaluate opportunities for process improvement, automation and technology enhancement in line with business requirements and market developments.

The Company remains focused on improving manufacturing processes, maintaining product quality and ensuring efficient utilisation of its resources.

13. FINANCIAL CONDITION AND LIQUIDITY

Significant changes in the key Financial Ratio 25% & above with reasons in detail:

S. No. Particulars	As on 31.03.2026 %	As on 31.03.2025 %	Reason of change
A. Return on Equity Ratio (in %)	-2.63%	0.64	Due to losses for the year.
B. Net profit ratio (in %)	-1.46%	0.37	Due to losses for the year.
C. Return on Capital employed (in %)	1.49%	4.62	Due to decrease in EBIT.

14. CAUTIONARY STATEMENT

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

Actual results could differ materially from those expressed or implied in such forward-looking statements due to various factors, including changes in economic conditions, market demand, raw material prices, regulatory environment, competition, interest rates, taxation, availability of finance and other risks and uncertainties affecting the Company s operations.

The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

15. CONCLUSION

FY 2025-26 was a challenging year for the Company. While the Company recorded a growth of approximately 2.09% in revenue from operations and a significant increase in other income, profitability was adversely affected by higher material and operating costs.

The Company continues to focus on strengthening its core operations, improving operational efficiencies, controlling costs, optimising working capital, maintaining customer relationships and pursuing sustainable growth opportunities in the packaging sector.

Management remains cautiously optimistic about the medium- and long-term prospects of the Company and will continue to monitor industry, economic and regulatory developments while taking appropriate measures to strengthen the Company s operating and financial performance.