Caprihans India Ltd Management Discussions

Pharma/Pharmaceutical Packaging Industry Outlook

The pharmaceutical packaging industry in India continues to grow steadily, driven by rising medicine production, stricter regulatory requirements, and the increasing need for secure and sustainable packaging. The growth of the domestic pharmaceutical market is anticipated to be driven by factors such as increased health insurance coverage, better access to healthcare facilities, and rising per capita income. While the broader Indian pharma market is expanding rapidly, the packaging segment is benefiting from specific trends: higher exports to regulated markets, the growing role of contract manufacturing for multinational companies, and the transition to eco-friendly materials.

Pharma packaging is no longer viewed solely as a protective layer it now plays a central role in patient safety, supply chain integrity, and regulatory compliance. Features such as tamper evidence, track-and-trace serialization, anti-counterfeit printing, and QR code-enabled patient information are increasingly standard. Packaging solutions are being designed to protect sensitive formulations, extend shelf life, and improve patient adherence.

Caprihans, with its long-standing expertise in PVC and PVDC films, continues to serve as a trusted supplier to leading domestic and global pharmaceutical companies. The companys established manufacturing base, R&D capability, and quality systems position it well to meet evolving customer needs and international compliance standards.

Market Size and Drivers

Indias pharmaceutical packaging market is estimated at USD 2.2 billion in 2024 and is projected to grow at over 8% CAGR through 2030, outpacing global packaging market growth. This is supported by: Export Growth: Increased outsourcing from regulated markets to India requires high-quality, compliant packaging materials.

Specialty Therapies: The rise of biologics, injectables, and controlled-release drugs demands specialized barrier packaging.

Sustainability Push: Domestic regulations and global buyers are promoting recyclable, halogen-free, and bio- based packaging materials.

Automation and Precision: Packaging lines are integrating high-speed, precision forming and sealing equipment, demanding films with consistent performance.

PVC and PVDC blister films remain dominant for solid oral dosage packaging due to their proven barrier protection and cost-effectiveness. However, newer laminates combining PET, PE, and proprietary coatings are gaining traction for sustainability and performance advantages.

Caprihans Competitive Position

Caprihans operates with several competitive strengths:

Large-scale Manufacturing: High-capacity film extrusion and coating facilities capable of serving large pharma customers from two (2) State-of-the-art integrated manufacturing facilities.

R&D and Product Development: Active development of halogen-free blister films and recyclable laminates. Regulatory Compliance: Systems aligned with EU, U.S. FDA, and WHO GMP requirements.

Supply Chain Reach: Strong domestic distribution network and export capabilities to multiple continents. Customer Partnerships: Long-term relationships with top pharma companies and packaging converters.

The company is increasingly focusing on sustainable packaging innovations developing recyclable mono- material solutions, introducing solvent-free coating processes, and optimizing barrier properties.

Opportunities, Threats & Outlook

Opportunities:

Expanding sustainable product lines to cater to the shift in buyer specifications.

Offering advanced anti-counterfeit and traceability features integrated into films.

Partnering with pharmaceutical companies for co- development of custom barrier solutions. Export growth by meeting high-barrier packaging needs in Europe, North America, and emerging markets.

Threats:

Volatility in raw material prices, driven by fluctuations in global crude oil trends, resin market dynamics and foreign exchange movements.

Competitive pressure from global film manufacturers entering the Indian market.

Potential phase-outs or restrictions on certain halogen- based materials in export markets.

Customer consolidation leading to stronger negotiating power on pricing.

Outlook:

Global and domestic pharmaceutical packaging demand is set to rise, especially for barrier films, sustainable solutions, and high-precision materials. Caprihans investments in R&D, sustainability, and customer service will strengthen its market leadership and open new export avenues.

Packaging Technology and Trends

In 2025, three clear trends are shaping the packaging industry:

1. Sustainability:

Development of halogen-free films and recyclable multi-layer laminates.

Increased demand for materials that meet extended producer responsibility (EPR) norms.

2. Digital Integration:

Films designed for seamless integration with serialized packaging lines.

Printing surfaces optimized for QR codes, authentication labels, and digital tracking.

3. Barrier Performance:

Higher moisture and oxygen barrier requirements due to global distribution timelines.

Focus on packaging that supports complex formulations such as moisture-sensitive APIs and biologics.

Caprihans is investing in coating technologies that reduce material weight while maintaining barrier performance reducing cost and environmental impact.

Internal Controls and Adequacy

The company maintains robust internal financial and operational control systems, ensuring that all transactions comply with company policies and regulatory requirements. Periodic internal audits are conducted, and key findings are presented to the Audit Committee for corrective measures.

SEGMENT-WISE PERFORMANCE

The Company deals only in one segment i.e. Pharma packaging solutions manufacturing and sale is a single reportable segment.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Companys operating revenue and other income stood at Rs. 752 crores as compared to Rs. 704 crores in the previous year. The growth is majority from export market which has increased from 193 cr. to 215 cr.

The overview of overall financial performance having significant impact as compared to previous year with respect to operational performance of the Company can be obtained from the various following ratio analysis. Few other ratios are which do not have significant changes is as per note 42.

Ratio	Current year	Previous year	% Variance	Remarks for variance more than 25%
Trade receivables	5.56	4.19	32.97%	Increase in Sales &
turnover ratio (in				Better realization
times)
Trade payables	6.02	4.16	44.72%	Increase in Sales &
turnover ratio (in				reduction in Credit
times)				Term
Return on equity	-14.29%	-10.58%	35.06%	Due to USD
ratio (in%)				appreciation,
				Margin eroded
Return on capital	0.74%	3.39%	-78.32%	Due to RPS
employed (in%)				Redemption
Net capital	(10.79)	(228.23)	-95.27%	Reduction in
turnover ratio				Working Capital
(in times)

Risks and Concerns

Key risks include:

Material Price Volatility: Mitigated through long-term supplier contracts and strategic inventory management. Regulatory Changes: Continuous monitoring of international packaging regulations to ensure compliance readiness.

Environmental Compliance Costs: Increasing investment in sustainable technology to stay ahead of legislation. Currency Fluctuations: Impacting export profitability; managed via hedging strategies.

Cautionary Statement

This Management Discussion and Analysis contains forward- looking statements based on current assumptions and available information in public domain/expert opinion. Actual results may vary due to changes in raw material markets, customer demand, regulatory frameworks, geopolitical factors, and other unforeseen developments.

Corporate Social Responsibility (CSR) Report:

1 A brief outline of the Companys CSR Policy, including overview	The CSR activities are generally carried out directly by the
projects or programs proposed to be undertaken and a reference to	Company by identifying activities.
the Web-link to the CSR Policy and projects or programs.
	The Company has formed a CSR Policy in compliance with the provisions of the Companies Act, 2013 and the same is placed on the website of the company www.bilcare.com
2 The Composition of the CSR Committee as on 31.03.2024	1. Mr. Pramod Toshniwal Chairman
	2. Ms. Ankita J. Kariya Member
	3. Mr. Kavaseri R Viswanathan Member
3 Provide the details of Impact assessment of CSR projects carried out in	Not Applicable
pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, if applicable (attach the report)
4 Details of the amount available for set off in pursuance of sub-rule	None
(3) of rule 7 of the Companies (Corporate Social Responsibility Policy)
Rules, 2014 and amount required for set off for the financial year, if
any
5 Average net profit/(loss) of the company for the preceding three	(Rs. 39.65 Cr)
financial year (Amount in Rs. Crs)*
6 Prescribed CSR expenditure
(a) Two percent of average net profit of the company as per section	(Rs. 0.79 Cr)
135(5)
(b) Surplus arising out of the CSR projects or programmes or activities	Nil
of the previous financial years.
(c) Amount required to be set off for the financial year, if any	Nil
(d) Previous year unspend amount	Rs. 0.40 Cr
Total CSR obligation for the FY (a+b-c)	Rs. 0.40 Cr
7 Details of CSR spent during the financial year
Amount spent during F.Y. 2024-25	Rs. 0.00 Cr (Rs. 0.48 lacs)
Amount unspent, if any as on 31.03.2025	Rs. 0.40 Cr
Amount transferred to unspent CSR Account	Rs. 0.40 Cr
8 Details of CSR amount spent against ongoing projects for the financial	Nil
year
9 Manner in which the amount spent during the financial year other	Dharmveer Anand Dighe Jidd Special School, Thane
than ongoing projects:	The Company was able to spend nominal amount for upkeep
	& maintenance of the ‘sensory garden which aids the
	handicapped and mentally challenged children to familiarise
	and learn the five human senses namely: sight, hearing,
	smell, taste and touch.
	Daang Seva Mandal Ashram School, Nasik
	The Company was not in a position to spend on this project
	further during the year due to unavoidable circumstances.
10 Reasons for CSR Amount unspent	As above.

Statement of Disclosure of Remuneration

Information as required under the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

A. Remuneration disclosures for Executive Directors & Key Management Personnel for the financial year ended March 31,2025 (in Rs. Cr.)

Sr. Name and Designation No.	Remuneration of Director/ KMP for the F.Y. 2024-25	% Increase in Remuneration in F.Y. 2024-25	Ratio of remuneration to median remuneration
1 Mr. Ankita J. Kariya	0.77	18%	13
Chairman & Managing Director
2 Mr. Somenath Mukherjee	1.09	10%	18
Executive Director
3 Mr. Pritam Paul	0.53	1%	9
Vice President & Company Secretary [Chief
Financial Officer upto 25.10.2024]
4 Mr. Guman Mal Jain	0.37	N.A.	NA
Chief Financial Officer (w.e.f. 26.10.2024

Note:

Details of remuneration paid to Independent Directors, Non-Executive Directors and KMPs are provided in the relevant sections of the Annual Report.

B. The percentage increase in the median remuneration of employees in the financial year is 2%.

C. The number of permanent employees on the rolls of company as on March 31, 2025 is 540.

D. It is hereby affirmed that the remuneration paid is as per the as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.