Clara Industries Ltd Management Discussions

BUSINESS OVERVIEW

Clara Industries Limited has built its identity as a reliable and forward-looking organization in the packaging and allied industries. Over the years, the Company has steadily expanded its expertise across multiple business verticals including packaging films, flexible packaging, PP mats, recycled granules, self-adhesive tapes, horticulture bags, and food wraps. This diversification is not just a measure of scale, but of strength, allowing Clara Industries to serve varied consumer and industrial needs while maintaining its focus on quality and innovation.

The Companys journey has been defined by resilience and adaptability. From modest beginnings, Clara Industries has consistently aligned itself with market shifts, technological changes, and evolving customer expectations. Its emphasis on maintaining product integrity and environmental responsibility has allowed it to become a trusted partner for businesses and households alike. Today, the Company stands as a name synonymous with both reliability and progressive thinking in the packaging domain.

The legacy of Clara Industries is deeply rooted in the values of commitment, quality, and long-term vision. It has always believed that growth is not merely reflected in numbers but also in the ability to sustain trust across generations of stakeholders. This guiding principle has ensured that even in years marked by challenges, Clara Industries has remained steadfast in delivering value. The Companys reputation is a result of years of consistent effort, strong governance, and a belief in doing business responsibly.

Looking ahead, Clara Industries continues to build on this foundation, not by simply adding to its scale but by strengthening its contribution to the industries it serves and the communities around it. The legacy it carries is not just of past achievements, but of a vision to create enduring value, resilience, and responsible growth in the years to come.

Clara Industries Limited operates through a diverse portfolio of businesses that together form the foundation of its growth and resilience. Each segment complements the others, enabling the Company to remain balanced even in times of market volatility. By catering to both industrial and household needs, Clara Industries has built an ecosystem that combines large-scale manufacturing with consumer-centric innovation.

The packaging films business has remained at the heart of operations, serving as the backbone for several industries that rely on safe and efficient packaging solutions. With continuous improvements in quality standards and technology adoption, Clara Industries has established itself as a dependable supplier in this highly competitive segment. The products emerging from this vertical are not only essential to the functioning of multiple value chains but also act as a bridge that connects manufacturers with consumers across regions.

The flexible packaging business is another important arm, designed to address the rising demand for versatile and durable packaging. In an environment where product presentation, protection, and sustainability matter equally, Clara Industries has positioned its solutions as reliable and i nnovative. This business has given the Company the agility to respond quickly to market requirements while also ensuring that it contributes meaningfully to the modern consumer experience.

The Companys presence in PP mats reflects its philosophy of addressing both functional and lifestyle needs. What began as a simple consumer good has grown into a category with increasing relevance, particularly in households and institutions. Clara Industries has managed to transform this everyday utility product into one that carries the hallmark of quality and trust. The strength of this segment lies in its ability to reach diverse markets and maintain relevance across a wide demographic.

In the recycled granules business, the Company underscores its commitment to sustainability and environmental responsibility. By converting post-industrial and post-consumer waste into high-quality raw material, Clara Industries not only reduces dependency on virgin plastics but also contributes to a circular economy. This segment represents the Companys proactive steps towards integrating sustainability with profitability, and its growing importance reflects how future- ready Clara Industries has become.

The self-adhesive tapes division has been built with a focus on performance and convenience. These products have found applications across industries, households, and offices, making them an essential utility with a wide reach. By ensuring consistency and durability in this segment, the Company has created a line of products that have become indispensable in day-today operations of both businesses and consumers.

The horticulture bags segment, though specialized, holds significant promise given the increasing focus on agriculture and green practices. Clara Industries has positioned itself as a responsible contributor to the agricultural economy by providing solutions that enhance farming efficiency and sustainability. This business reflects the Companys vision of aligning growth with broader societal and environmental goals.

The food wrap business represents one of the Companys strongest consumer-facing endeavours. By offering safe, hygienic, and innovative wrapping solutions, Clara Industries has been able to connect directly with households and food businesses. This segment also highlights the Companys ability to combine functionality with health and environmental considerations, creating a product line that resonates with modern lifestyles.

Together, these diverse business segments demonstrate the breadth and depth of Clara Industries Limited. Each vertical brings its own strengths and opportunities, while collectively they create a synergy that underpins the Companys stability and progress. This diversity has been one of the strongest reasons for Clara Industries resilience and growth, ensuring that the Company is not defined by a single market but by a portfolio of opportunities that continue to evolve with time.

The strength of Clara Industries lies in its robust manufacturing infrastructure, which continues to evolve with the demands of the market. Our facilities are equipped with advanced machinery and technology, enabling us to maintain consistent quality, optimize efficiency, and scale production in line with customer requirements. Over the years, we have built a reputation for precision and reliability in our operations, ensuring that every product leaving our plants reflects the highest standards of craftsmanship and compliance.

A significant aspect of our manufacturing philosophy is the emphasis on sustainability and process optimization. By investing in energy-efficient equipment, implementing waste reduction practices, and promoting recycling initiatives within our operations, we aim to align our production processes with global benchmarks of environmental responsibility. Our in-house quality control systems are designed to monitor every stage of production, from sourcing of raw materials to the final product, ensuring adherence to both domestic and international quality norms.

The versatility of our manufacturing capabilities allows us to serve a diverse range of sectors, from packaging films and flexible packaging to specialized segments such as self-adhesive tapes, recycled granules, horticulture bags, and food wraps. This integrated approach not only reduces dependency on external resources but also provides us with greater flexibility to innovate and customize solutions for our clients.

Our ability to adapt capacity to market dynamics has been an important driver of growth. Even during periods of volatility in raw material pricing and supply chain disruptions, the resilience of our operations has enabled us to sustain production and deliver on commitments. The expansion of our production lines over the years has enhanced our efficiency and improved turnaround times, allowing us to meet increasing volumes without compromising on quality.

At Clara Industries, we view our manufacturing capabilities not just as a means of production, but as a core strength that defines our competitiveness. The continuous pursuit of technological advancement, combined with an unwavering focus on quality and sustainability, positions us to serve evolving customer needs and drive long-term growth.

At Clara Industries, research and innovation remain at the heart of our growth journey. The company has always recognized that long-term success is determined not only by operational efficiency but also by the ability to anticipate market shifts and create solutions that address emerging needs. Guided by this philosophy, our approach to research and product development is built on continuous improvement, customer-centricity, and sustainability.

The packaging and allied industries are undergoing rapid transformation, driven by changing consumer lifestyles, rising awareness of environmental concerns, and evolving regulatory frameworks. In response, we have aligned our research priorities with the twin objectives of functionality and responsibility. Our teams focus on developing products that are lighter, stronger, and more versatile while simultaneously reducing environmental impact through the use of recyclable and eco-friendly materials. By doing so, we create offerings that not only meet customer requirements but also contribute positively to the larger ecosystem.

A key area of innovation has been the enhancement of material performance to ensure durability, safety, and cost efficiency. Through rigorous testing, process optimization, and investment in advanced technologies, we continue to improve the barrier properties, flexibility, and shelf-life characteristics of our products. This commitment enables our solutions to find application across diverse sectors ranging from food and consumer goods to agriculture and industrial uses.

Equally important is the role of product development in maintaining our competitive edge. Our teams work closely with customers to understand their unique requirements and co-create solutions that provide measurable value. This collaborative approach has enabled us to build long-standing partnerships and gain recognition as a trusted solutions provider. Innovation, therefore, is not viewed as an isolated function but as a collaborative process where customer feedback, market insights, and technical expertise converge.

In recent years, our research has also placed significant emphasis on process efficiency and sustainability. We continue to explore alternatives that minimize waste, reduce energy consumption, and support the transition to a circular economy. The development of products from recycled granules and our investments in ecoconscious packaging solutions stand as testaments to this focus.

Clara Industries envisions innovation as a continuous journey rather than a destination. By nurturing a culture of curiosity and encouraging our teams to push boundaries, we aim to deliver products that not only address todays needs but also anticipate tomorrows possibilities. Our investment in research and product development is therefore both a business strategy and a responsibility? ensuring that we remain relevant, competitive, and aligned with global sustainability imperatives.

Clara Industries has consistently demonstrated resilience and adaptability in its growth journey. Since inception, the Company has advanced steadily by combining entrepreneurial vision with disciplined execution. Each phase of growth has been marked by investments in capabilities, diversification of business verticals, and a commitment to value creation for all stakeholders. Over the years, we have expanded from being a focused packaging player into a diversified enterprise with a presence across packaging films, flexible packaging, recycled granules, self-adhesive tapes, horticulture bags, PP mats, and food wraps. This transition has been achieved through a measured approach that balances opportunity with responsibility.

The year 2024-25 reflects the continuity of this journey. While the broader business environment has remained challenging, Clara Industries has maintained its focus on strengthening core operations and deepening market penetration. Instead of pursuing aggressive expansions, the emphasis has been on consolidating existing capacities, streamlining efficiencies, and enhancing product quality. This approach ensures sustainable growth by building a solid foundation before the next phase of scale-up.

Our expansion strategy continues to be guided by three priorities?diversification, innovation, and sustainability.

Diversification across businesses provides us with resilience against market volatility and helps tap opportunities across industries. Innovation enables us to remain ahead of evolving consumer preferences, while sustainability ensures that our growth is aligned with global environmental and social imperatives. Together, these priorities define a growth model that is balanced and future-ready.

Geographically, the Company is steadily working to expand its footprint within India and across selected international markets. By leveraging our strong manufacturing base and customer relationships, we aim to increase our share in both domestic and export segments. At the same time, we continue to explore strategic collaborations and partnerships that can accelerate growth without diluting focus.

Looking ahead, Clara Industries envisions growth not as an end in itself but as a means to create long-term value. The Company intends to pursue expansion opportunities that complement its existing strengths, deepen customer engagement, and contribute positively to the broader ecosystem. By focusing on measured expansion, operational excellence, and customer-centric innovation, Clara Industries is preparing itself for the next phase of growth?one that is sustainable, scalable, and strategically aligned with the evolving needs of markets and society.

At Clara Industries, our philosophy is anchored in the belief that business growth and societal progress must go hand in hand. We view our role not merely as a manufacturer or supplier, but as a partner in shaping sustainable solutions for the future. Every decision, from product development to customer engagement, is guided by the principle of creating longterm value while upholding responsibility toward people, communities, and the environment. This philosophy has enabled us to build enduring trust and credibility among stakeholders and has shaped the way we conduct our business over the years.

The Companys core values provide the foundation for this philosophy and serve as guiding principles in our journey. Integrity forms the heart of our operations, ensuring transparency, fairness, and accountability in every relationship. Excellence drives us to continuously push boundaries, improve processes, and set benchmarks in quality and service. Innovation inspires us to seek out new ideas and adopt forward-looking approaches that anticipate evolving market needs. Sustainability underscores our commitment to minimizing environmental impact and maximizing resource efficiency. Collaboration reminds us that our success is rooted in partnerships?within teams, with customers, suppliers, and the larger community.

Together, these values form more than just a set of ideals; they define our culture and identity as an organization. They influence the way we innovate, the way we serve our customers, and the way we contribute to the world around us. At Clara Industries, we see our philosophy and values not as aspirations to be achieved someday, but as everyday practices that guide our growth, inspire our people, and shape our future.

GLOBAL ECONOMY

The global economy in 2025 stands at a critical juncture, balancing between structural challenges and emerging signs of stability. According to the International Monetary Fund (IMF), global GDP growth is projected at around 2.8% in 2025, reflecting a moderation from pre-pandemic averages but still indicative of resilience in key markets. While advanced economies face headwinds from tightening financial conditions, geopolitical uncertainties, and subdued trade flows, emerging markets continue to provide momentum with stronger consumption and investment patterns. Softening inflation and gradually easing supply chain disruptions are expected to support a more balanced global growth trajectory in the medium term.

GROWTH MOMENTUM

The world economy is anticipated to expand modestly in 2025, with the IMF projecting global GDP growth at 2.8% . While advanced economies seem likely to deliver around 1.5% growth, emerging economies are expected to outperform, thanks to resilient domestic consumption and public infrastructure spending ? many poised to grow at over 4%. India stands out among major economies, with its GDP growth projected at 6.5-6.7% for FY 202425. This sustained momentum is being driven by strong private consumption, robust public investments, and a strategic focus on manufacturing, infrastructure, and renewable energy. Such a favourable macroeconomic climate creates a solid backdrop for industries like packaging, which directly benefit from rising demand across consumer and commercial sectors.

GLOBAL TRADE TENSIONS

In early April 2025, the United States implemented a sweeping shift in trade policy, imposing a universal 10% minimum tariff on all imports under the declaration of a national emergency to counter perceived unfair trade practices. This move significantly disrupted global trade flows, with China facing the sharpest impact as tariffs on Chinese goods surged to 145%. In retaliation, China levied steep reciprocal tariffs on U.S. exports, further escalating trade tensions.

The policy shift has heightened cost pressures across industries, disrupted global supply chains, and contributed to financial market volatility. While the U.S. suspended additional tariff hikes for 59 trading partners?including the EU, Canada, Mexico, South Korea, and Vietnam ?China remained excluded, intensifying the geopolitical divide.

This realignment underscores a sharp pivot toward protectionism, undermining decades of free-trade agreements and injecting considerable uncertainty into the global economy, even as it aims to address long-standing trade imbalances.

REGIONAL GROWTH TRENDS

UNITED STATES

The U.S. economy is projected to grow at 1.8% in 2025, a slowdown driven by restrictive monetary policy and escalating trade disruptions. Inflation is expected at around 5%, with tariffs adding nearly one percentage point. Domestic consumption is weakening, while manufacturing faces rising input costs, intensifying growth headwinds.

CHINA

Chinas growth forecast has been revised down to 4% in 2025 amid softening external demand, internal deleveraging, and a transition toward consumption-driven growth. Inflation remains subdued, with risks of deflation and renewed credit stress in the property sector, which continues to weigh on overall stability.

EURO AREA

Eurozone GDP growth is expected at just 0.8% in 2025, constrained by weak consumption, soft external demand, and ongoing political and energy-related uncertainties. Investor sentiment remains fragile, particularly in Germany and France, dampening prospects for a robust recovery.

EMERGING MARKETS & DEVELOPING ECONOMIES (EMDES)

Growth in EMDEs is moderating, with notable slowdowns in Mexico, South Africa, and Argentina. High debt burdens, currency depreciation, and tighter financing conditions are straining policy flexibility, while reduced investor interest amplifies economic vulnerabilities across these markets.

GLOBAL INFLATION OUTLOOK

According to the IMFs April 2025 World Economic Outlook, global inflation is projected to ease from 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025.

The decline is supported by easing supply chain pressures, softer food and energy prices, and tighter monetary policy in advanced economies. While advanced economies are expected to reach their inflation targets sooner, Emerging Markets and Developing Economies (EMDEs) will continue to face higher price pressures for longer. Core inflation is projected to decline more gradually, reflecting persistent wage and service costs. However, tariff hikes and policy uncertainty pose risks, as higher import costs could slow disinflation and delay price stability.

GLOBAL ECONOMIC OUTLOOK

The global economy is undergoing profound structural shifts, shaped by rapid technological advancements and automation. These changes have enhanced productivity but also contributed to job displacement, wage stagnation, and widening inequality, especially in advanced economies.

While near-term challenges are dominated by geopolitical tensions and rising protectionism, deeper concerns stem from vulnerabilities in interconnected global supply chains. Disruptions caused by tariffs, trade disputes, and other shocks continue to create ripple effects across industries and markets.

Uncertainty around investment, heightened by policy ambiguity and trade frictions, is leading to delayed capital flows, tighter financial conditions, and subdued economic momentum. At the same time, market volatility is intensifying, exposing potential risks to the global financial system as confidence weakens.

Addressing these challenges will require nuanced and coordinated policy responses aimed at strengthening resilience, supporting inclusive growth, and moving beyond binary trade narratives of winners and losers toward broad-based global prosperity.

(Source: IMF World Economic Outlook, April 2025)

INDIAN ECONOMY

Indias economy grew at 6.5% in FY 202425, as per the National Statistics Offices second advance estimates (February 28, 2025), maintaining its momentum despite a challenging global environment. This performance underscores the resilience of Indias domestic economic structure and the effectiveness of calibrated policy measures in mitigating external risks such as persistent trade tensions and tariff- related disruptions.

Growth continues to be anchored by strong domestic consumption, with rural demand acting as a crucial buffer against global uncertainties. Robust agricultural output and supportive government initiatives have sustained rural spending. However, sustaining long-term momentum will require revival in both rural and urban demand, particularly amid labor market constraints and inflationary pressures.

Structural reforms, rapid digital adoption, and continued infrastructure investments are strengthening Indias macroeconomic fundamentals. Yet, additional reforms are essential to further boost investment flows and enhance manufacturing competitiveness. While easing global oil prices provide some relief, inflation remains a key concern guiding the Reserve Bank of Indias monetary policy.

INDIAS GROWTH PROJECTIONS

According to the International Monetary Fund (IMF), Indias real GDP growth is projected at 6.4% for both FY 2024-25 and 2025-26, revised upward from earlier estimates of 6.2% and 6.3%, respectively. This upgrade reflects a more benign external environment and reinforces Indias status as the fastest-growing major economy.

Supporting this optimism, a United Nations report also projects Indias growth to moderate slightly to 6.3% in 2025, while still recognizing the country as a standout performer among its peers.

This robust growth trajectory underscores Indias strong fundamentals?anchored by resilient domestic consumption, ongoing policy reforms, and targeted investment? which continue to position the nation as a key driver of global economic momentum.

BUDGET 2025-26:

The Union Budget 2025-26 highlights nine priority areas aimed at fostering inclusive and sustainable growth?agriculture, manufacturing, urban development, energy security, green growth, youth empowerment, financial sector development, infrastructure & investment, and last-mile delivery. Together, these reflect a forward-looking roadmap for a resilient and future-ready economy.

Continuing its infrastructure-led growth strategy, the government has allocated a capital outlay of Rs11.21 lakh crore for FY 2025-26, marking a modest increase from the previous year. This sustained focus on infrastructure underscores the role of public investment as a critical driver of long-term growth.

AGRICULTURE REBOUNDS

Indias growth vision is closely tied to the agriculture sector, which is expected to rebound with a 3.8% growth rate in FY 2024-25, up from 1.4% in FY 2023-24. This recovery is driven by a favorable monsoon, sustained rural consumption, and policy interventions such as the Kisan Credit Card scheme and the e-National Agriculture Market (eNAM).

The Union Budget 2025-26 allocated Rs. 1.52 trillion to agriculture, focusing on enhancing credit access, developing digital marketplaces, and promoting sustainable practices. These measures are aimed at boosting productivity, supporting farmer welfare, and strengthening allied sectors such as horticulture and livestock.

Agriculture continues to serve as a cornerstone of economic stability, acting as a buffer against global uncertainties while fuelling rural demand. Targeted investments in agri-infrastructure, storage, and value-added services like food processing are expected to generate employment opportunities and broaden the sectors impact on the overall economy. While the growth reflects steady progress, it also marks a crucial phase of stabilisation for long-term sustainability.

INDUSTRY PERFORMANCE

Indias manufacturing sector continues to play a pivotal role in driving economic expansion, supported by policy reforms, supply chain diversification, and rising domestic demand. In FY 2024-25, the sector is projected to grow at 7.4%, compared to 5.9% in FY 2025-24, reflecting an improvement in capacity utilisation and investment inflows.

Government initiatives such as the Production-Linked Incentive (PLI) schemes, focus on "Make in India," and measures to promote MSMEs are accelerating industrial competitiveness. Increased capital expenditure on infrastructure and logistics is further strengthening the sectors ecosystem, improving both domestic and export prospects.

However, challenges remain in the form of high input costs, global trade uncertainties, and technology adoption gaps. Addressing these through skill development, innovation, and greater private investment will be crucial for sustaining momentum in the manufacturing sector.

TRENDS IN INFLATION

Inflation remains a critical factor influencing Indias macroeconomic stability. In FY 2024-25, headline inflation averaged around 4.6%, broadly within the Reserve Bank of Indias target range of 2-6%. Food price volatility, driven by supply-side shocks such as erratic rainfall and global

The Union Budget 2025-26 emphasizes measures to contain inflation through enhanced food supply management, investments in warehousing and cold storage, and support for agricultural productivity. Additionally, energy price stability and calibrated monetary policy by the RBI are expected to keep inflation in check.

While inflationary risks persist from global oil price fluctuations and climate-related uncertainties, Indias strong domestic demand, improved supply chains, and fiscal prudence are expected to maintain price stability going forward.

RURAL ECONOMY TRENDS

Indias rural economy continues to be a vital engine for national consumption dynamics. In FY 2024-25, inflation- adjusted consumer spending grew by 7.1%, surpassing overall GDP growth of 6.5%?a testament to strengthening rural demand even amid macroeconomic uncertainty.This resurgence has been bolstered by favorable monsoon conditions, healthier farm incomes, and easing inflationary pressures.

FMCG data for Q1 2025 indicates that consumption growth in rural areas outpaced urban demand by fourfold, with traditional trade volumes rising to 6.2% compared to 5.0% in the previous year. This trend continued into Q2, where village markets delivered double the consumption growth seen in cities, propelled by staples and personal care categories.

Furthermore, over three-quarters (76.6%) of rural households reported higher consumption levels, and nearly 40% noted increased income?supported by low rural inflation, which dropped to just 1.72% in June 2025. Such strong rural momentum offers a significant buffer for domestic demand and underpins more stable growth in the packaging, FMCG, and allied sectors.

EXPORT TRENDS

In FY 2024-25, India achieved a historic high in total exports, amounting to US $824.9 billion, marking a 6% year-on-year increase. Services exports continued to lead the momentum, recording US $587.5 billion, a robust 15.6% uplift over the previous year. On the merchandise side, non-petroleum exports expanded to US $574.1 billion, growing by 6%.

Export diversification emerged as a defining theme-high-tech and value- added goods such as engineering, electronics, pharmaceuticals, and agricultural produce accounted for over 50% of merchandise exports. Electronics exports surged impressively (+55-47%), machinery and pharma maintained strong traction, while agricultural products like meat and dairy also showed double-digit growth in Q2 FY25.

The resilience of Indias export engine was evident despite global headwinds. While traditional sectors such as gems, jewellery, and petroleum faced slowdowns or flat performance, the services sector helped cushion the impact, contributing significantly to foreign exchange inflows. With trade deficit narrowing and balance of payments stabilized, exports played a critical stabilizing role amid lingering geopolitical uncertainty.

FOREX & RUPEE STABILITY

Indias external sector gained further strength on the foreign exchange front, with reserves rising to USD 676.5 billion as of March 51, 2025, up from USD 648.6 billion a year earlier. This increase reflects proactive interventions by the RBI along with favorable valuation gains on foreign assets. The sustained build-up in reserves provides a strong cushion against external shocks and ensures ample import cover, a critical safeguard in the face of ongoing global uncertainties.

Despite navigating a turbulent global environment, the Indian Rupee exhibited exhibited relative stability throughout FY 2024-25. While there were intermittent phases of depreciation, the currency rebounded sharply in early 2025, recording its strongest monthly appreciation in over six years in March. This recovery was driven by strong foreign portfolio inflows and a weakening US dollar.

For the full fiscal year, the rupee registered only a modest depreciation of around 2.4% against the US dollar-significantly better than many other emerging market currencies. The RBIs timely interventions, coupled with the comfort of robust forex reserves, played a decisive role in mitigating external shocks and sustaining investor confidence.

FUTURE GROWTH PROSPECTS

India is projected to sustain a real GDP growth rate of 6.5% between FY 2025-26 and FY 2027-28, supported by strong fundamentals in manufacturing, exports, and digital transformation. Enhanced competitiveness in these areas, coupled with a notable rise in services exports, is expected to strengthen productivity and efficiency, reinforcing Indias long-term growth trajectory.

That said, certain headwinds persist. A potential global slowdown-particularly in the U.S. and China-could dampen external demand. On the domestic front, delays in private corporate capital expenditure, compounded by concerns over Chinas excess manufacturing capacity, may weigh on investment. Further, a possible depreciation of the Chinese Renminbi could exert pressure on Indias trade balance.

Nevertheless, India remains well positioned to capitalize on the growing adoption of the China + 1 strategy by multinational corporations. This shift is likely to boost Indias role in global manufacturing and supply chains, creating fresh opportunities for investment, exports, and job creation.

Annual Ponort 2024-25 44

GLOBAL FLEXIBLE PACKAGING MARKET

The global flexible packaging market was valued at USD 210.62 billion in 2023 and is projected to reach USD 238.91 billion by 2029, registering a steady CAGR of 2.12%. This growth is underpinned by rising demand across food and beverages, pharmaceuticals, personal care, and household products, where packaging is increasingly recognized as a value-adding extension of the product itself.

Innovation is driving the transition toward smaller, convenient formats such as sachets, pillow packs, and mini pouches, which cater to evolving consumer preferences for portability and affordability. At the same time, sustainability imperatives are reshaping the industry, encouraging the development of eco-friendly, recyclable, and lightweight solutions, particularly in the case of multilayer plastic materials that are traditionally harder to recycle.

Within the Asia-Pacific region, China stands out as the largest contributor, benefitting from its low-cost manufacturing base, rapid urbanization, and rising consumer demand for modern packaging formats. Global brands and retailers also favor flexible packaging for its cost efficiency, logistical advantages, and strong performance in single-serve and small-format applications, making it a preferred choice across both emerging and developed markets.

Overall, flexible packaging continues to expand its role as not just a protective medium but also a strategic tool for brand differentiation, consumer convenience, and sustainability compliance, positioning it as a central pillar of the global packaging industrys future.

GLOBAL FLEXIBLE PACKAGING

MARKET - SIZE & TRAJECTORY

The global flexible packaging market has displayed robust growth in recent years and is projected to continue its upward trend. In 2023, the market was estimated at USD 270.96 billion, and expectations are that it will grow to USD 373.34 billion by 2030, translating into a strong CAGR of approximately 4.8%. Earlier estimates suggested a base of USD 210.62 billion in 2023, with projections rising to USD 238.91 billion by 2029, reflecting a more conservative CAGR of 2.12%.

This growth is being driven by increasing demand across key industries such as food & beverage, pharmaceuticals, personal care, and e-commerce packaging. Flexible packaging offers multiple advantages? space efficiency, reduced material usage, better product protection, and sustainability?which continue to attract manufacturers and global brands alike. Notably, the Asia-Pacific region remains the largest and fastest-growing market, driven by rising disposable incomes, urbanisation, and robust retail expansion.

FLEXIBLE PACKAGING IH flPflC

The Asia-Pacific (APAC) flexible packaging market was valued at USD 80.74 billion in 2025 and is projected to reach USD 94.67 billion by 2029, registering a steady CAGR of 2.69% during the forecast period. APAC is set to remain the dominant force in the global flexible packaging landscape, driven by strong domestic demand, competitive labour costs, and expanding manufacturing infrastructure. These factors continue to attract global players who are increasing investments, forming strategic partnerships, and introducing innovative product solutions to strengthen their market presence.

The regions growth trajectory is supported by rapid economic development, a rising workforce, and surging demand from food, beverage, and pharmaceutical sectors. In particular, food packaging innovation and healthcare-related needs are shaping consumer expectations for greater safety, convenience, and sustainability.

That said, APAC also presents challenges due to its fragmented market structure and vast geographic scale, particularly in large economies like China and India, which can complicate supply chain efficiency. Companies that successfully diversify sourcing networks, enhance procurement systems, and adapt packaging formats to local preferences will gain a competitive edge.

The APAC market encompasses a wide spectrum?from low-cost sachets catering to mass consumption to premium protective packaging for industrial and healthcare applications. Looking ahead, significant growth is expected in convenience-driven and sustainable packaging formats, underscoring APACs role as the most influential hub for flexible packaging globally.

EUROPE FLEXIBLE PACKAGING MARKET

The European flexible packaging market was valued at USD 58.66 billion in 2025 and is forecast to reach USD 65.58 billion by 2029, registering a CAGR of 1.88%. Growth in the region is underpinned by economic stability, rising disposable incomes, and strong demand for innovative packaging technologies, including aseptic, retort, anti-counterfeit, and child-resistant formats. These solutions provide vendors with a competitive edge while ensuring compliance with stringent European regulations on food safety and sustainability.

The market is being reshaped by a structural shift from rigid to flexible packaging, as smaller households and urban consumers increasingly favour singleserve, lightweight, and portable packaging. Demand from coffee, pet food, fresh produce, and dairy sectors continues to drive innovation, with recyclability and ecofriendly materials becoming central to product development.

Western Europe dominates the market, supported by mature consumption patterns and advanced retail infrastructure in countries such as Germany, France, Belgium, and the Netherlands. Meanwhile, Eastern Europe is emerging as a high- growth region, benefitting from rising incomes and evolving consumer preferences.

However, the market faces challenges from Brexit-related trade complexities, which have disrupted cross-border supply chains and increased compliance costs for exporters. Despite these hurdles, Europes emphasis on sustainable innovation and premium packaging solutions positions it as a leading player in shaping the future of the global flexible packaging industry.

FLEXIBLE PACKAGING IH NORTH AMERICA

The North America flexible packaging market was valued at USD 48.66 billion in 2023 and is projected to reach USD 52.62 billion by 2029, at a CAGR of 1.31% over the forecast period. Growth in the region is being largely driven by the rapid expansion of e-commerce, particularly in high-volume categories such as personal care products, pharmaceuticals, and pet foods, which has spurred demand for flexible sacks, pouches, and FIBCs.

The region-led by the United States, the largest revenue contributor-benefits from a mature and resilient economy characterized by increasing consumer spending, dining-out frequency, and strong retail activity, all of which continue to favour packaging demand. Flexible plastic films and resins remain dominant due to their cost-efficiency, durability, and versatility, especially in the food and beverage sector, where extended shelf life and product protection are essential.

A major trend shaping the market is the adoption of smart packaging technologies such as RFID tags and QR codes, which enhance supply chain visibility, product authentication, and consumer engagement, particularly in sensitive categories like food and pharmaceuticals. Moreover, the growing popularity of portable and convenient pouch formats for ready-to-eat foods, beverages, and personal care products further supports market expansion.

While the regions market is relatively mature compared to APAC and Europe, continuous innovation in sustainable packaging solutions, recycling technologies, and digitalized packaging formats is expected to create new opportunities and strengthen North Americas role in the global flexible packaging industry.

LATIN AMERICA PACKAGING TRENDS

The Latin America flexible packaging market was valued at USD 14.83 billion in 2023 and is projected to reach USD 17.25 billion by 2029, growing at a CAGR of 2.55% during the forecast period. Growth in the region is being fuelled by a rapidly expanding middle class and rising disposable incomes, which are driving higher consumption levels and packaging demand, outpacing the more mature markets of North America and Europe.

Brazil and Mexico are the key growth engines in the regions flexible packaging industry. Brazil, ranked as the second- largest pet food market globally, has seen significant demand for flexible packaging in this category, supported by the countrys strong grain production base. In addition, Latin America is a major exporter of meat, poultry, and seafood, creating sustained demand for durable and efficient packaging solutions for international shipping.

The retail ecosystem in Brazil further underlines this trend, with over 90,000 retail outlets spanning healthcare, food, electronics, and pet care categories. The ongoing recovery of Brazils economy, coupled with rising investment in organized retail, is expected to provide strong momentum for the market.

Overall, the region presents a promising outlook for flexible packaging, supported by growing consumption, expanding agriculture and services sectors, and rising exports, with Brazil continuing to play a pivotal role in shaping the Latin American market landscape.

MIDDLE EAST & AFRICA FLEXIBLE PACKAGING MARKET

The Middle East & Africa flexible packaging market was valued at USD 7.72 billion in 2025 and is projected to reach USD 8.79 billion by 2029, expanding at a CAGR of 2.19% over the forecast period. Although per capita consumption remains relatively low compared to mature regions like Europe and North America, the market presents substantial untapped potential.

Economic growth in Turkey, the UAE, and Saudi Arabia is accelerating demand for flexible packaging, particularly across the food, pharmaceutical, and consumer goods sectors. At the same time, regional challenges?including economic volatility in certain African economies, underdeveloped logistics infrastructure, and lingering recessionary impacts?pose constraints to faster adoption.

Despite these hurdles, key urban centers such as Dubai, Abu Dhabi, Riyadh, and Doha are experiencing robust growth in packaging demand. As economies stabilize following pandemic-related and geopolitical disruptions, countries like Saudi Arabia, Kuwait, and Qatar are positioned to sustain long-term demand for packaging solutions.

The regions large base of small and medium enterprises (SMEs) also opens opportunities for global players to expand. Industry leaders such as Amcor, Constantia Flexibles, and Huhtamaki Group, currently anchored in South Africa and the UAE, are well placed to scale their presence and capture growth across new markets.

GROWTH DRIVERS

Shifting Consumer Expectations and Lifestyle Changes

Modern consumers are prioritizing packaging that blends functionality, sustainability, and convenience. There is a notable move toward mono-material and minimalistic packaging designs that enhance usability while reducing environmental impact. Particularly in the food, beverage, personal care, and healthcare industries, hygienic, attractive, and eco-conscious packaging has become essential in the post-pandemic era.

Growing urban populations and fast-paced lifestyles are further amplifying the demand for easy-to-use, resealable, and lightweight packaging formats.

Surge in Online Food Delivery and E- Commerce Packaging

The expansion of food delivery services, quick commerce, and e-commerce platforms has fueled demand for durable, safe, and sustainable packaging. The rise of dark kitchens and aggregator platforms has led to soaring usage of disposable trays, bowls, pouches, and containers. Beyond food, the growth of online shopping is also boosting flexible packaging needs for electronics, apparel, and household products, where tamper-proof, protective, and branded packaging plays a pivotal role.

Packaging as a Strategic Branding and Marketing Tool

Packaging is no longer just about protecting products?it has become a powerful brand enabler and storytelling medium. Companies are investing in limited editions, creative structural designs, personalized prints, and interactive features such as QR codes and AR-based experiences to engage customers. By reinforcing brand identity and enhancing shelf appeal, packaging helps companies stand out in increasingly competitive retail and e-commerce spaces.

Innovation in Formats, Materials, and Design

There is rising demand for single-serve, family packs, miniaturized, and multi-pack formats that address evolving consumer preferences like portion control, portability, and affordability. Simultaneously, sustainability pressures are pushing brands toward eco-friendly, recyclable, and compostable packaging made from plant starch, biodegradable plastics, and recycled paper. Innovative formats such as stand-up pouches, zipper packs, and spout pouches are gaining traction due to their versatility and lower material usage.

Digital Transformation, Smart Packaging, and Traceability

Advancements in digital technologies are reshaping the packaging sector. Smart packaging solutions, including RFID tags, NFC-enabled labels, and QR codes, are enabling real-time tracking, authentication, and personalized consumer engagement. Blockchain and AI are being leveraged to improve supply chain transparency, traceability, and sustainability performance. These technologies not only protect against counterfeiting but also support circular economy goals by improving end-of-life management and reducing waste.

Regulatory Push and Sustainability Mandates

Governments and regulatory bodies are enforcing stricter norms around plastic waste management, recyclability, and extended producer responsibility (EPR). This is compelling manufacturers to adopt greener packaging alternatives, invest in closed-loop recycling systems, and develop materials that align with global sustainability standards. Companies that adapt early are expected to gain competitive advantage as eco-compliance becomes a consumer and regulatory expectation.

Globalization of Supply Chains and Market Expansion

As global trade and cross-border e- commerce expand, the demand for flexible, durable, and lightweight packaging is growing. Flexible packaging helps reduce logistics costs and carbon footprints compared to rigid alternatives. Emerging markets in Asia, Africa, and Latin America are offering substantial opportunities due to rising disposable incomes, changing consumption patterns, and an expanding middle-class population.

MARKET OPPORTUNITIES

Vendor-Led Product Innovation

Global packaging vendors are actively investing in advanced product platforms to address evolving regulatory standards and consumer expectations. By expanding their product portfolios with sustainable, lightweight, and performance-driven solutions, vendors are securing stronger market positions. Strategic investments in R&D are also enabling companies to diversify their geographic reach and create long-term competitive advantages.

Rising Demand for Tamper-Proof Packaging

Heightened regulatory oversight and growing consumer concern over product safety are accelerating the demand for tamper-proof packaging. This trend is especially pronounced in the food, beverage, and pharmaceutical sectors, where visible evidence of tampering not only safeguards product integrity but also builds consumer trust. For high-value goods and sensitive categories such as baby food or healthcare items, tamper-evident solutions are becoming a market standard.

Emergence of Reusable and Refillable Packaging Models

Sustainability is pushing businesses toward reusable packaging systems that align with circular economy principles. Durable formats using stainless steel, aluminium, or reinforced polymers are replacing singleuse plastics in areas like beverages, personal care, and grocery deliveries. These models not only reduce waste but also create recurring consumer engagement through refill and return systems.

Growing Role of Smart and Connected Packaging

Technological innovation is opening opportunities for smart packaging solutions. Features such as QR codes, RFID tags, and NFC chips provide transparency, traceability, and consumer interactivity. These solutions enhance safety by validating authenticity, while also enabling personalized marketing and customer engagement. With the growth of e- commerce and direct-to-consumer models, connected packaging is becoming a vital touchpoint.

Expansion of Sustainable Material Alternatives

The global shift towards eco-friendly packaging materials presents opportunities for innovation in biodegradable plastics, compostable films, and plant-based materials. Vendors who can scale production of cost-efficient and sustainable alternatives are well-positioned to capture both regulatory-driven and consumer-driven demand, especially in regions with stricter plastic bans.

Growth in Single-Serve and On-the-Go Packaging

The rise of urban lifestyles, smaller households, and health-conscious consumers is driving demand for singleserve and portion-controlled packaging. This trend is particularly strong in snacks, ready-to-drink beverages, and meal kits. Brands that innovate in convenient, portable, and eco-friendly formats stand to benefit significantly.

KEY BflBBIEBS TO MARKET GROWTH

Rising Costs of Recycling Infrastructure

The recycling of rigid and flexible plastic packaging remains highly capital- and resource-intensive. Significant amounts of energy, water, and labour are required for cleaning, segregating, and reprocessing post-consumer plastics. For many small and medium enterprises (SMEs), it is often more cost-effective to manufacture new plastic packaging rather than invest in recycling. Moreover, most packaging facilities across emerging markets are designed to handle virgin plastic materials, which makes retrofitting them for recycled content both costly and technically complex. This cost burden continues to slow down large-scale adoption of recycling initiatives.

Food Safety and Contamination Risks

One of the most pressing concerns in packaging is the potential for harmful substances to migrate from packaging materials into consumables. Chemicals such as PFAS, phthalates, and mineral oils? commonly present in recycled or chemically treated packaging?pose significant health risks, especially when exposed to heat or improper processing. Cross-contamination during high-volume packaging operations also jeopardizes food integrity, raising safety concerns for manufacturers and consumers alike. As regulatory agencies tighten restrictions, packaging companies are under increasing pressure to ensure compliance and transparency across their supply chains.

Environmental Burden of Plastic Waste

Plastic waste continues to dominate the global sustainability debate, with single-use and non-biodegradable polymers like polystyrene being especially problematic. These materials not only resist recycling but also release carcinogenic by-products as they degrade. Rising consumer awareness, combined with stricter government policies, is accelerating the push to eliminate singleuse plastics?placing both regulatory and reputational pressure on packaging companies.

FUTURE OUTLOOK

The global flexible packaging market is projected to witness steady and broad- based expansion over the next decade, driven by its rising adoption across food, healthcare, personal care, and digital commerce sectors. Its unique combination of cost-efficiency, adaptability, and sustainability advantages firmly positions flexible packaging as a cornerstone of the industrys ongoing transformation.

INDIflH FLEXIBLE PACKAGING INDUSTRY

The Indian flexible packaging industry is entering a phase of rapid expansion, underpinned by strong macroeconomic trends, evolving consumer behaviour, and significant investments in manufacturing capacity. With the market projected to grow by nearly USD 17.5 billion between 2024 and 2029 at a CAGR of 12.7%, India is expected to emerge as one of the fastest-growing hubs for flexible packaging globally. This acceleration is being driven by rising demand for packaging solutions that are lightweight, cost-effective, durable, and sustainable.

Flexible packaging formats?including pouches, bags, sachets, wraps, and laminated films?are increasingly preferred by both manufacturers and consumers due to their ability to provide extended shelf life, protection from contamination, and convenient handling. The shift away from rigid packaging formats such as glass and tin towards flexible alternatives highlights the industrys transition to more resource- efficient solutions. For businesses, the lower transportation costs, reduced material usage, and adaptability of flexible packaging offer strong operational and financial advantages.

A major demand driver is the food and beverage sector, which accounts for the largest share of consumption. With the rapid rise of urbanisation, dual-income households, and a growing culture of on- the-go consumption, packaged foods, snacks, dairy products, and beverages are increasingly relying on flexible packaging to deliver freshness and convenience. The expansion of organised retail and e- commerce platforms has further accelerated the adoption of smaller, portable, and resealable packaging units. In pharmaceuticals, flexible blister packs, sachets, and pouches are gaining popularity for their tamper resistance, hygiene, and cost efficiency. Similarly, in personal care and household goods, flexible packaging is being leveraged to support premiumisation while enabling sustainable packaging practices.

Environmental concerns and regulatory interventions are also reshaping the sector. With increasing restrictions on single-use plastics and rising public awareness of plastic waste management, packaging companies are shifting towards recyclable and biodegradable film technologies. Indian manufacturers are investing in advanced multi-layered films, barrier coatings, and mono-material laminates to comply with sustainability mandates while retaining performance and cost competitiveness. Additionally, the governments focus on extended producer responsibility (EPR) is compelling companies to innovate and adopt closed- loop recycling models.

The sectors growth is also supported by Indias competitive manufacturing ecosystem. The availability of raw materials such as polypropylene (PP) and polyethylene (PE), combined with improving infrastructure and favourable government policies, is attracting both domestic and global players to scale operations in India. International companies view India as a promising entry point into the broader Asia- Pacific market, while local firms are upgrading technology and expanding capacity to cater to rising demand.

Going forward, the Indian flexible packaging market is poised to evolve from being volume-driven to innovation-led. Developments in intelligent packaging? such as QR-enabled packs, freshness indicators, and smart labelling?are expected to gain traction. At the same time, digital printing and customised packaging formats will cater to the growing emphasis on personalisation and brand differentiation. Companies that successfully align their strategies with sustainability, innovation, and affordability will be best positioned to capture market leadership in this high-growth industry.

Food and beverage packaging will continue to dominate market share, but the fastest growth is projected in pharmaceuticals and personal care, driven by increasing health awareness and demand for premium products. Furthermore, the rise of organized retail and quick-commerce players like Blinkit, Zepto, and Swiggy Instamart is set to accelerate the adoption of flexible pouches and sachets for efficient logistics and consumer convenience.

Another important driver is the regulatory environment. With India pledging to reduce single-use plastics and encourage recyclable or biodegradable alternatives, flexible packaging companies are shifting toward mono-material solutions, compostable films, and recyclable laminates. These eco-friendly innovations are expected to gain substantial traction, especially as consumer sentiment increasingly favors sustainability.

From an investment perspective, the sector offers attractive opportunities for both domestic and foreign players. Indias competitive manufacturing costs, expanding infrastructure, and government incentives under schemes like Make in India and PLI (Production Linked Incentive) are creating a favorable environment for capacity expansion and technology upgrades. Global leaders are eyeing joint ventures, mergers, and acquisitions to secure a foothold in this fast-growing market.

In conclusion, the next five years will witness a decisive shift toward sustainable, intelligent, and digitalized packaging ecosystems. Companies that invest early in green materials, automation, and advanced printing technologies will be well- positioned to capture long-term value and establish leadership in this evolving sector.

EPR MANDATE 2025-26

The Government of India has introduced the Extended Producer Responsibility (EPR) framework to accelerate sustainability in packaging. Under this mandate, Producers, Importers, and Brand Owners (PIBOs) are legally obligated to manage the entire lifecycle of their packaging?from design and production to collection, recycling, and final disposal. This initiative strengthens the countrys commitment to a circular economy, reduces environmental risks, and promotes efficient resource utilization.

Key Features of the Mandate

• Mandatory Registration: All PIBOs must register with the Central Pollution Control Board (CPCB) through a centralized portal before undertaking packaging operations.

• Lifecycle Responsibility: Companies are accountable for end-to-end management of packaging waste across materials like plastic, paper, glass, and metal.

• Recycled Content Targets: Effective April 1, 2025, packaging must include minimum recycled content and reuse provisions.

• Traceability & Labeling: From July 1, 2025, all plastic packaging must carry QR codes, barcodes, or unique identifiers for public traceability through CPCBs database.

• Waste Collection Systems: PIBOs

must develop robust collection mechanisms and partner with recyclers to ensure responsible waste recovery.

• Enforcement & Penalties: Non compliance will attract strict penalties under the Environment (Protection) Act, 1986.

This landmark regulation represents a paradigm shift in Indias packaging sector, driving companies toward eco-friendly innovation, enhanced accountability, and sustainable growth practices.

COMMITMENT TO FOOD SAFETY COMPLIANCE

The Food Safety and Standards (Packaging and Labeling) Regulations, introduced in 2011, were designed to set comprehensive requirements for how food products are packed and labeled in India. Their primary purpose is to safeguard consumers and enhance product traceability, ensuring that every packaged item reaching the market adheres to strict quality and safety norms.

These regulations make it mandatory for food labels to provide accurate and clear details such as ingredients, nutritional content, allergens, expiry dates, and manufacturer information. Packaging materials, too, are required to be food- grade, safe, and non-toxic, protecting products from contamination while maintaining their freshness and quality. The Food Safety and Standards Authority of India (FSSAI) oversees the enforcement of these rules, promoting transparency and accountability across the food sector.

In January 2025, FSSAI further streamlined compliance by announcing a uniform enforcement timeline for amendments to the Food Safety and Standards (Labeling and Display) Regulations, 2020. Under this system, all amendments will take effect from July 1 each year, with a minimum compliance window of 180 days from notification. This approach not only provides clarity and predictability for food businesses but also ensures that consumers continue to receive reliable and up-to-date information on the products they purchase.

FSSflIS PACKAGING UPDATE

On March 28, 2025, the Food Safety and Standards Authority of India (FSSAI) introduced a landmark amendment permitting the use of select categories of recycled plastics in food packaging. This progressive step reflects Indias commitment to sustainability while maintaining strict safeguards around food

safety. Only those recycling technologies that are formally evaluated and approved by FSSAI will be permitted, ensuring that the materials used pose no risk to consumer health.

To reinforce transparency and accountability, the amendment makes it mandatory for all recycled plastic packaging to carry clear traceability labels. Additionally, food businesses using such materials will undergo regular audits and compliance checks, strengthening oversight and minimizing the possibility of misuse. By balancing innovation with responsibility, this regulation paves the way for a more circular economy in packaging, aligning environmental goals with consumer trust.

STRENGTHENING PLASTIC WASTE GOVERNANCE

The Plastic Waste Management (PWM) Rules, 2016 were introduced to establish a comprehensive framework for addressing the growing challenges of plastic waste in India, with particular emphasis on plastic packaging. These rules focus on reducing environmental pollution by encouraging responsible production, collection, segregation, recycling, and disposal of plastic waste.

A key highlight of the PWM Rules is the concept of Extended Producer Responsibility (EPR), which places accountability on producers, importers, and brand owners to manage the lifecycle of plastic products, including post-consumer waste. By mandating that businesses set up collection mechanisms and channel plastic waste for recycling or safe disposal, the rules aim to reduce the burden on municipalities and improve waste management efficiency.

Over time, the PWM framework has been strengthened through amendments, aligning with Indias sustainability goals and global best practices. These efforts not only mitigate plastic pollution but also create opportunities for innovation in eco-friendly packaging and recycling technologies, thereby promoting a circular economy.

PHASING OUT SINGLE-USE PLASTICS

The nationwide ban on single-use plastics, implemented in July 2022, represents a landmark move in Indias battle against plastic pollution. The regulation targeted 19 specific low-value, non-recyclable items? including plastic straws, disposable cutlery, and certain packaging materials?that were major contributors to environmental degradation.

This ban has not only curtailed the production and use of such items but also compelled packaging manufacturers and brands to innovate and transition toward sustainable alternatives. By promoting biodegradable, compostable, and recyclable packaging solutions, the policy serves as a catalyst for long-term environmental stewardship while pushing industries to align with Indias broader sustainability goals.

Additionally, the initiative has raised consumer awareness about the environmental consequences of single-use plastics, encouraging responsible consumption patterns and greater acceptance of eco-friendly packaging in daily life.

INDIAS RUSTIC TBBHSITIOH

Launched in September 2021 by the Confederation of Indian Industry (CII) and WWF India, with support from WRAP, the India Plastics Pact represents a bold step toward building a circular economy for plastic packaging. Its roadmap for implementation, unveiled in August 2022, outlines a strategic framework that brings together businesses, policymakers, and stakeholders to transform the way plastics are produced, used, and recycled in India.

The Pact sets ambitious 2050 targets, including ensuring that 100% of plastic packaging is reusable, recyclable, or compostable. It also aims to achieve a 50% recycling rate for plastic packaging while mandating that all packaging incorporates an average of 25% recycled content. These commitments are designed to close the loop on plastic use, reduce waste leakage into the environment, and maximize resource efficiency.

Beyond recycling targets, the Pact emphasizes the elimination of unnecessary or problematic plastic packaging through design innovation and systemic change. By fostering collaboration across industries, it not only drives sustainable business practices but also aligns Indias packaging ecosystem with global environmental stewardship goals.

PACKAGED COMMODITIES AMENDMENT RULES. 2015

The Legal Metrology (Packaged Commodities) (Amendment) Rules, 2015 provided businesses with additional time to comply with updated labeling requirements. Recognizing the disruptions caused by the Covid-19 pandemic, the government allowed the use of pre-printed packaging materials until January 1, 2025.

This extension was aimed at ensuring a smoother transition to the revised standards while reducing operational challenges.

It also helped minimize financial losses and unnecessary waste of pre-existing packaging stock, offering much-needed relief to manufacturers and retailers during a period of uncertainty.

By balancing regulatory compliance with industry realities, the amendment reflects a practical approach toward supporting both business continuity and consumer protection.

INDUSTRY OUTLOOK

Indias flexible packaging industry is set to maintain strong double-digit growth, fueled by structural consumption shifts, rapid urbanisation, the rise of e-commerce, and increasing demand for processed food. These factors are reshaping consumer preferences and driving the need for more efficient packaging solutions.

Rising logistics costs are further pushing businesses toward lighter, compact, and durable packaging that lowers shipping expenses while enhancing supply chain efficiency. This shift is not only cost-driven but also operationally strategic, enabling companies to stay competitive in a fastchanging market.

At the same time, government initiatives such as Make in India, sustainability regulations, and policy support for MSMEs are creating a favourable environment for expansion. However, to fully realise this potential, industry players must balance affordability with compliance, invest in green technologies, and establish strong local recycling networks to align with Indias evolving regulatory and environmental priorities.

Looking ahead, companies that focus on consumer-centric innovation-such as sustainable designs, smart packaging, and greater convenience-will be best positioned to capture market share and build long-term brand value in Indias dynamic packaging ecosystem.

PRODUCT PORTFOLIO

The Indian packaging industry is undergoing rapid transformation, shaped by consumer preferences for convenience, sustainability, and cost efficiency. With e-commerce, FMCG, food delivery, and pharmaceuticals driving demand, companies with diverse, adaptable, and innovative product portfolios are better positioned to capture long-term growth.

Clara Industries has built a comprehensive product mix that balances mainstream packaging solutions with innovative, value- added products. This combination not only enables the company to serve a wide spectrum of industries but also strengthens its competitiveness in an environment increasingly defined by regulatory requirements and consumer-led sustainability.

PACKAGING FILMS

Our packaging films form the foundation of versatile, reliable, and high- performing solutions for a wide range of industries. At the core of this portfolio are LD PP multilayer sheets, manufactured from high-quality polypropylene and LLDPE granules using advanced multilayer extrusion technology. This process ensures excellent durability, flexibility, and barrier protection, helping safeguard products against moisture, dust, and external contaminants while extending shelf life and maintaining quality.

These films are available both in roll form and as ready-to-use bags, offering convenience for diverse industrial and consumer applications. Food processors use them for hygienic, tamper-resistant packaging, while the agricultural and industrial sectors value their strength for safe storage and bulk handling. Lightweight yet resilient, they also contribute to cost- efficiency in logistics and transportation. Importantly, their recyclability aligns with the growing emphasis on sustainable packaging practices. By combining performance, versatility, and ecoresponsibility, our packaging films deliver solutions that meet evolving customer expectations in a dynamic market.

PRINTED PLASTIC FILMS

Our printed plastic films offer an advanced packaging solution that combines functionality with strong visual appeal. Manufactured in monolayer, two- layer, and three-layer structures, these films are engineered to deliver the right balance of strength, flexibility, and barrier properties depending on customer requirements. Available in both roll form and as customized pouches, they cater to a wide spectrum of applications across food, personal care, and industrial segments.

The key advantage of these films lies in their ability to support high-quality printing, enabling vibrant graphics, brand messaging, and product information to be displayed with clarity and durability. This makes them not only a protective medium but also a powerful tool for brand differentiation on retail shelves. With customizable formats, sizes, and finishes, our printed films are designed to meet diverse client specifications while ensuring consistency in performance and quality.

PLASTIC MATS

Our plastic mats combine durability, functionality, and design appeal, making them a popular choice for both domestic and commercial use. Manufactured from high- quality polypropylene, these mats are lightweight yet strong, offering excellent resistance to wear, moisture, and everyday use. Their versatility allows them to serve multiple purposes?from floor coverings in households and offices to outdoor and recreational applications.

With a wide range of colors, patterns, and textures, our mats are crafted to suit diverse consumer preferences while maintaining affordability and ease of maintenance. They are easy to clean, foldable for convenient storage, and long- lasting, making them a practical solution for modern lifestyles. Beyond everyday utility, plastic mats also cater to export markets where demand for low-cost, high- quality, and multipurpose household products is steadily increasing.

HORTICULTURE

BAGS

Our horticulture bags are designed to meet the growing needs of modern agriculture, floriculture, and urban gardening. Manufactured from high- quality materials, these bags are durable, lightweight, and capable of withstanding varying weather conditions, making them a reliable choice for farmers and gardeners alike. They provide an efficient and cost- effective alternative to traditional pots, offering portability and flexibility in both small-scale and commercial cultivation.

Available in a variety of sizes and specifications, these bags are ideally suited for growing vegetables, fruits, ornamental plants, and nursery saplings. Their breathable yet sturdy structure promotes healthy root development and efficient water drainage, ensuring optimal plant growth. With the increasing emphasis on sustainable farming practices, our horticulture bags are gaining traction in

both domestic and export markets, catering to the rising demand for innovative and eco-friendly cultivation solutions.

FOOD WRAP

Our food wrap is a one-side metallised, high- quality packaging solution designed as a healthier and more. sustainable alternative to conventional aluminium foil and butter paper.Unlike aluminium foil, which may have harmful effects when in direct contact with food, our metallised food wrap ensures safety without compromising on performance. It is crafted to maintain freshness, prevent contamination, and preserve the natural taste and aroma of food.

Available in convenient 1 kg rolls, the wrap is easy to handle and versatile for multiple uses?whether for packing tiffins, storing cooked meals, or wrapping fresh produce. Its combination of durability, light weight, and eco-friendliness makes it especially suitable for households, restaurants, and food businesses seeking reliable and responsible packaging. With the rising consumer preference for safer and sustainable options, our metallised food wrap stands out as a modern, everyday essential.

CLING WRAP

Our cling wrap is a transparent, stretchable, and food-grade film designed to provide reliable protection and everyday convenience. It clings tightly around containers, bowls, and food items, helping to prevent air exposure and keeping food fresher for longer. Its flexibility and self-sealing properties make it easy to handle, ensuring a secure wrap without the need for additional sealing tools.

Available in different sizes, the wrap caters to a wide range of needs, from household kitchens to restaurants, bakeries, and catering services. It is commonly used for wrapping fresh fruits, vegetables, dairy, and cooked meals, ensuring hygiene and extending shelf life. By preserving moisture and preventing odour transfer, cling wrap offers a practical, efficient, and modern solution for food storage and handling.

SELF-ADHESIVE TAPES

Our self-adhesive tapes are versatile packaging solutions designed for reliable sealing, bundling, and protection across multiple industries. Manufactured with strong adhesion properties, they ensure secure bonding on a wide variety of surfaces, from cartons and parcels to plastics and metals. The tapes are easy to apply, tear-resistant, and maintain their grip even under varying storage and transit conditions, making them indispensable in logistics, warehousing, and retail environments.

Available in different sizes and specifications, these tapes are widely used for packaging, labeling, and protective applications. Their durability, convenience, and cost-effectiveness make them an essential component in both commercial operations and day-to-day use, ensuring efficiency and reliability in every application.

LAB REPORT ENVELOPES

Our lab report envelopes are designed for the secure and efficient handling of medical documents, diagnostic reports, and other important records. Crafted from premium-quality materials, they combine durability with practicality, making them suitable for both routine and sensitive documentation. These envelopes are available in three distinct varieties, each tailored to specific needs.

The Basic envelopes offer a simple and reliable solution for everyday use, making them well-suited for non-sensitive documents, internal communications, and routine reports. For documents that require frequent access, the Resealable envelopes provide added convenience as they can be opened and sealed multiple times while maintaining security and accessibility. At the highest level of protection, the TamperProof envelopes ensure maximum confidentiality. Once opened, they cannot be resealed, providing a clear indication of any unauthorized access, making them ideal for legal documents, confidential lab reports, and sensitive materials that demand absolute security.

MACHINERY & MANUFACTURING STRENGTH

At Clara Industries, we have built a strong manufacturing backbone powered by advanced, high-performance machinery. Our facilities are equipped with cutting- edge extrusion, printing, lamination, slitting, rewinding, and recycling units that enable us to deliver consistent quality, large-scale production, and innovative packaging solutions. This integrated setup not only supports our wide product portfolio?from packaging films and flexible packaging to mats, tapes, and food wraps?but also reinforces our commitment to efficiency, precision, and sustainability.

Clara Industries operates with strong and versatile manufacturing capabilities spread across three dedicated units, each equipped with advanced machinery to cater to different product lines. These facilities are designed to manage large- scale production while upholding strict quality and safety standards, enabling us to serve a wide spectrum of industries with reliability.

Our infrastructure includes multi-layer and monolayer extrusion lines, state-of-the-art rotogravure and flexographic printing machines, lamination systems, and highspeed cutting, stitching, and rewinding equipment. Together, these give us the flexibility to deliver both standard and highly customized products?ranging from packaging films and flexible pouches to mats, self-adhesive tapes, horticulture bags, and food wraps.

In addition, in-house recycling and batchmaking units strengthen our sustainability focus by reducing waste and optimizing raw material usage. With the combined capacity of our three units, Clara Industries stands well-positioned to meet rising market demands while consistently innovating to match global benchmarks of quality and performance.

KEY MACHINERY

At Clara Industries, our strength lies in the seamless integration of advanced machinery with skilled manufacturing practices. We have built a strong ecosystem of equipment that allows us to deliver flexible packaging solutions that are not only high in quality but also adaptable to the diverse needs of our customers. OurJ production is anchored by a modern multilayer Mamta Brampton extrusion line, which ensures films with excellent durability and barrier properties, while monolayer extruders give us the versatility to produce films across a wide spectrum of applications.

In our mats division, precision looms and thread warping machines enable us to craft plastic mats that combine strength with visual appeal, while specialized extruders ensure consistency in every weave and finish. For printing and finishing, we rely on high-precision rotogravure and flexographic machines that bring designs to life with sharp detailing and vibrant colors. These are further complemented by lamination systems that add strength, and slitting, rewinding, pouch cutting, and sealing machines that prepare the final products in formats suited for both mass production and customized orders.

Equally important is our commitment to sustainability. With in-house recycling systems, including advanced mother-baby recycling lines and agglomerators, we are able to convert plastic waste back into usable raw material. This not only reduces our environmental footprint but also ensures a steady flow of resources for production. Together, this blend of cutting- edge technology and eco-conscious infrastructure allows Clara Industries to stay ahead in innovation, efficiency, and responsibility, setting us apart in the packaging industry.

At Clara Industries, our strength comes from combining innovation, scale, and trust to deliver packaging solutions that add real value. Over time, we have developed a diverse product portfolio that includes food wraps, horticulture bags, flexible packaging films, self-adhesive tapes, and more. This variety enables us to serve a wide range of industries, from food to healthcare and agriculture, making us a reliable partner for customers with different requirements.

Our three manufacturing units are equipped with advanced extrusion, lamination, and printing technologies, giving us the ability to respond quickly to evolving market needs. These facilities allow us to create packaging that balances quality, functionality, and sustainability, while also providing the flexibility to innovate and customize solutions as per customer expectations.

Equally important is our commitment to sustainability and responsibility. We are continuously exploring eco-friendly alternatives and recycling-led initiatives that help reduce environmental impact while supporting the long-term goals of our customers. Alongside this, we place strong emphasis on relationships. By ensuring consistent quality, timely delivery, and tailored solutions, we have become more than just a packaging supplier. For many of our clients, we are a partner they can trust to support their growth.

Clara Industries competitive edge lies in this blend of diverse offerings, modern manufacturing capabilities, focus on sustainability, and a people-centered approach. This combination has powered our growth so far and will continue to guide our journey in the future.

BUSINESS STRATEGY & INITIATIVES

Clara Industries business strategy is built on a clear vision of growth, innovation, and responsibility. In a dynamic market shaped by changing consumer expectations, evolving regulations, and rapid technological shifts, we focus on strengthening our core operations while embracing new opportunities. Our initiatives are guided by a dual approach: expanding our product portfolio and manufacturing capabilities to meet rising demand, while also investing in sustainable practices and customer-centric solutions that ensure long-term value creation.

CUSTOMER-CENTRIC INNOVATION

At Clara Industries, we believe that the strongest businesses are built around the people they serve. Customer-centric innovation for us is about going beyond simply meeting current needs?it is about anticipating future expectations and creating solutions that grow with our clients. We invest in understanding consumer behaviour, market trends, and shifting lifestyles so that our strategies remain aligned with what truly matters to our customers. This mindset enables us to stay agile and proactive, ensuring that our offerings remain relevant in a rapidly evolving marketplace.

Our approach to innovation is highly collaborative. We actively engage with clients, partners, and stakeholders to cocreate ideas, gather insights, and refine solutions that enhance their experiences. From adopting digital tools that simplify processes to streamlining service delivery and improving operational transparency, our focus is on building trust and long- lasting relationships. By maintaining open channels of communication and valuing customer feedback at every stage, we are able to shape offerings that resonate more deeply and add greater value.

Ultimately, customer-centric innovation at Clara Industries is not a one-time initiative but an ongoing commitment. It is about building an organisation that listens, learns, and adapts?one that puts customer satisfaction at the heart of its growth strategy. This philosophy continues to guide our investments, partnerships, and initiatives, allowing us to evolve in step with those who rely on us.

OPERATIONAL EFFICIENCY

Operational efficiency lies at the core of Clara Industries success and growth journey. We recognise that in todays competitive landscape, efficiency is not only about reducing costs but also about ensuring consistency, reliability, and speed across every stage of our operations. Through careful planning, disciplined execution, and continuous improvement, we have built processes that allow us to maximise output while maintaining the highest standards of quality.

Our three manufacturing units operate in a well-coordinated manner, enabling us to balance production across diverse product lines and respond quickly to market demands. Automation and modern machinery support accuracy and precision, while streamlined workflows minimise wastage and downtime. By integrating technology with skilled manpower, we ensure that every step of production is both productive and adaptable.

Efficiency for us also extends beyond the shop floor. From supply chain management to distribution and customer service, we focus on optimising resources and improving turnaround times. This commitment to operational excellence not only strengthens our competitiveness but also allows us to deliver greater value to our customers while driving sustainable growth.

FUTURE GROWTH MISSION

At Clara Industries, our vision for the future is driven by a strong belief in sustainable expansion and continuous value creation. We see growth not merely as an increase in scale but as an opportunity to diversify, innovate, and strengthen our role in the industries we serve. Our mission is to build on the foundation of trust, quality, and efficiency that has brought us this far, while setting ambitious goals for the years ahead.

One of the key milestones in our growth journey is the upcoming establishment of a new woven sack plant. This facility will add significant capacity to our portfolio, enabling us to enter new markets and serve existing customers with enhanced offerings. The addition reflects our strategy of aligning investments with industry demand and ensuring that our manufacturing capabilities remain future- ready.

Beyond capacity expansion, we are committed to adopting advanced technologies, exploring new product segments, and enhancing our sustainability practices. By combining innovation with responsible growth, we aim to not only increase our market presence but also contribute positively to the communities and industries we touch. Our mission is clear: to shape Clara Industries into a diversified, future-focused organisation with growth that is both steady and meaningful.

FINANCIAL PERFORMANCE OVERVIEW

The financial year under review was marked by a softer performance compared to the previous year, reflecting the impact of global macroeconomic challenges, raw material price volatility, and the commissioning of new capacity. While revenue and profitability moderated, these outcomes were anticipated as part of the companys transition phase, with resources strategically directed toward expansion and strengthening operational capabilities.

Despite the short-term decline, Clara Industries Limited maintained a sound financial position, with disciplined cost management and steady cash flows supporting stability. Investments in new units, including the woven sack plant, alongside ongoing modernization of machinery, underline the companys commitment to building a stronger growth platform. With a diversified product portfolio and a resilient business model, the company remains well-positioned to regain momentum and deliver sustainable value creation in the years ahead.

During FY 2024-25, the company recorded a moderation in its overall financial performance compared to the previous year. Revenue declined slightly due to elevated raw material costs, global demand fluctuations, and the ramp-up phase of the newly commissioned unit. Profitability was also impacted as strategic investments were directed toward expansion and capacity building.

Revenue

Total revenue for the year reflected a marginal decline as compared to FY 202524. The dip was largely cyclical, influenced by raw material price volatility and a slower-than-expected demand recovery. However, the long-term growth trajectory remains intact, supported by structural industry drivers.

Profitability

Profit before tax (PBT) and profit after tax (PAT) moderated in line with revenue performance and expansion-related costs. These figures are expected to recover in the upcoming periods as the benefits of enhanced capacity, product diversification, and efficiency measures begin to materialize.

OPPORTUNITIES BHD THREATS

OPPORTUNITIES

The flexible packaging industry in India is entering a new era of expansion, presenting Clara Industries with significant opportunities to scale and diversify. Rapid urbanisation, shifting consumption patterns, and rising awareness around sustainability are creating new avenues where innovation and efficiency in packaging are highly valued. For companies with strong manufacturing capabilities and a versatile product range, this evolving landscape offers considerable potential to strengthen market position and capture emerging demand.

E-commerce and Digital Retail Growth

The explosive growth of e-commerce and quick-commerce platforms has reshaped how products are packaged, stored, and delivered. Lightweight, durable, and cost- efficient packaging is increasingly in demand to ensure products are transported safely while keeping logistics costs low. This trend creates a vast opportunity for Clara Industries to supply packaging solutions that meet the unique needs of online retail, particularly as the market expands beyond metros into tier-2 and tier-5 cities.

FMCG and Food Delivery Expansion

Indias FMCG sector, supported by rising incomes and lifestyle shifts, continues to grow at a strong pace. Simultaneously, the food delivery and takeaway segment is becoming mainstream, with millions of households now relying on these services regularly. These dynamics are driving demand for packaging that combines functionality with safety and hygiene. Products such as food wraps, cling films, and tamper-proof solutions are expected to witness higher adoption, providing an avenue for consistent volume growth.

Sustainability and Regulatory Push

The regulatory landscape is increasingly focused on sustainability, with initiatives such as Extended Producer Responsibility (EPR), the ban on single-use plastics, and FSSAIs guidelines on food-safe materials. While these changes raise compliance requirements, they also create opportunities for companies that proactively align with eco-friendly practices. Clara Industries is well positioned to take advantage of this shift by offering recyclable, reusable, and environmentally responsible products. As global brands in India look for supply chain partners with strong green credentials, this alignment can become a significant competitive advantage.

Diversification Through Woven Sack Plant

The establishment of a new woven sack plant presents a strategic growth avenue by expanding the companys presence into bulk and industrial packaging. Woven sacks are widely used in agriculture, cement, fertilizers, and other industrial sectors, all of which are witnessing rising demand in Indias growth story. This diversification not only reduces dependence on a single segment but also positions Clara Industries to serve a much broader customer base, ensuring resilience in changing market conditions.

Global Market Entry

Beyond domestic expansion, the flexible packaging industry also offers opportunities for increased global participation. With India emerging as a preferred hub for cost- efficient and high-quality manufacturing, exports of packaging products are expected to rise steadily. By leveraging modern machinery, strong product quality, and compliance with international standards, Clara Industries can strengthen its foothold in overseas markets, creating an additional growth stream for the years ahead.

THREATS

While the flexible packaging industry offers significant growth opportunities, it is also shaped by challenges that can impact profitability and long-term sustainability.

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These threats, if not managed proactively, may create obstacles in scaling operations or maintaining competitiveness in a fast- evolving marketplace. Recognising these challenges is the first step toward building strategies that mitigate risks and strengthen resilience.

Raw Material Price Volatility

One of the most pressing threats for the packaging industry is the fluctuation in raw material prices, particularly polymers derived from crude oil. Any sharp increase in crude oil prices directly inflates input costs, compressing margins for packaging manufacturers. For companies operating in a highly competitive market where cost efficiency is critical, this volatility poses a substantial risk. Moreover, disruptions in global supply chains, as seen in recent years, can exacerbate the challenge by limiting availability and delaying procurement.

Regulatory and Compliance Pressures

The tightening of environmental regulations, while creating opportunities for sustainable products, also brings significant compliance challenges. Policies such as the Plastic Waste Management Rules, the ban on single-use plastics, and evolving FSSAI standards require companies to continuously adapt their processes, materials, and supply chains. Noncompliance can result in financial penalties, reputational damage, and loss of market access. For smaller manufacturers, keeping pace with these changes is especially difficult, but even larger companies must consistently invest in research and compliance systems to stay aligned with evolving requirements.

Intense Market Competition

The packaging industry in India is fragmented, with the presence of numerous regional players as well as large-scale multinational corporations. Intense price competition is common, leading to pressure on margins and limiting the scope for aggressive pricing strategies. The rapid pace of innovation also means that products can quickly become outdated, requiring continuous investment in technology and R&D. In such a landscape, differentiation through quality, innovation, and customer trust becomes essential to maintaining a strong position.

Environmental and Social Perception

Plastic packaging continues to be viewed critically in public discourse due to its association with waste and pollution. While flexible packaging offers efficiency and recyclability in many cases, negative consumer sentiment around plastics can affect demand. Growing environmental activism and shifting consumer preferences toward biodegradable alternatives could challenge traditional packaging solutions. Companies that fail to address these perceptions with sustainable innovations risk being sidelined in favour of more ecofriendly competitors.

Global and Macroeconomic Uncertainty

Broader macroeconomic and geopolitical risks also play a role in shaping the industrys outlook. Currency fluctuations, trade restrictions, or global slowdowns can disrupt export markets and raise operational costs. Events such as the Covid-19 pandemic and supply chain crises have highlighted the vulnerability of globalised industries. For packaging companies aiming to expand globally, these uncertainties remain an ever-present risk that requires strategic preparedness.

The Indian flexible packaging industry presents a compelling mix of growth opportunities and critical challenges. While rising demand from sectors such as e- commerce, FMCG, and pharmaceuticals, alongside sustainability-driven innovation, is creating strong tailwinds, issues such as raw material volatility, regulatory pressures, and environmental concerns demand careful navigation. Companies that are able to balance opportunity with preparedness by innovating responsibly will be best positioned to sustain growth and create long-term value.

FUTURE OUTLOOK flHP ROADMAP

As the global and Indian packaging landscape continues to evolve, Clara Industries is entering a transformative phase of growth. The next few years will be defined not only by expanding market opportunities but also by our ability to innovate responsibly, adapt to regulatory shifts, and strengthen our position as a trusted partner to diverse industries. The companys focus will remain on aligning its strategies with changing consumer behavior, the demand for sustainable solutions, and the growing role of technology in packaging. Our roadmap, therefore, is designed to capture growth while building resilience and ensuring longterm value creation.

Industry Alignment and Growth Vision

Indias flexible packaging market is projected to grow at a double-digit pace, fueled by rising urbanization, increased consumer spending, and the rapid adoption of organized retail and e-commerce. Clara Industries intends to leverage this momentum by expanding its product portfolio and strengthening its footprint across high-demand categories such as food, pharmaceuticals, and personal care. With increasing government emphasis on sustainability and responsible waste management, we see a strong opportunity to position our products as both ecofriendly and cost-effective. Our long-term vision is not only to grow alongside the market but also to play a leadership role in shaping packaging trends that address both convenience and responsibility.

Investment in Capacity and Infrastructure

The roadmap for the coming years involves significant investments in expanding our production capacity. A key milestone will be the establishment of the new woven sack plant, which represents a strategic step into a complementary business line with strong demand prospects in agriculture, cement, and industrial applications. Additionally, our existing three units will undergo continuous modernization, focusing on advanced machinery, automation, and digitization to improve efficiency and ensure consistent quality. By combining scale with technology, Clara Industries will be better positioned to meet rising domestic and international demand.

Driving Innovation and Sustainability

Innovation will be central to our strategy going forward. As consumer expectations shift toward recyclable, reusable, and traceable packaging, we plan to accelerate R&D initiatives in eco-friendly materials, biodegradable solutions, and smart packaging technologies. Partnerships with recyclers, raw material suppliers, and technology providers will be instrumental in this journey. Beyond product innovation, sustainability will be embedded in our operations through energy efficiency, waste reduction, and adoption of renewable energy wherever feasible. These initiatives not only align with global trends but also reinforce our responsibility toward environmental stewardship.

Strengthening Market Presence

Clara Industries aims to consolidate its position in the domestic market while exploring growth opportunities in exports. The Indian subcontinents role as a manufacturing hub provides us with a unique advantage to cater to global customers seeking cost-efficient and

quality packaging solutions. Strategic alliances, expanded distribution networks, and closer engagement with end-user industries will ensure that we remain agile and responsive to changing market dynamics. By strengthening customer relationships and offering value-added services, we aspire to be recognized not just as a supplier, but as a long-term strategic partner.

Embracing Digital Transformation

The packaging sector is increasingly being reshaped by digital technologies, and Clara Industries intends to stay ahead of the curve. The integration of ERP systems, data-driven decision-making tools, and digital quality monitoring will be prioritized across our units. Looking forward, the adoption of AI-driven design processes, IoT-enabled machinery, and smart packaging features will further enhance our operational efficiency and customer engagement. Digitalization is not just a tool for efficiency?it is a key enabler of transparency, compliance, and long-term competitiveness.

Talent and Organizational Development

Growth is not possible without a strong and adaptive workforce. Clara Industries recognizes the need to invest in its people through training, upskilling, and leadership development programs. The companys roadmap includes initiatives to foster a culture of innovation, accountability, and collaboration. By creating an environment that values both performance and wellbeing, we will continue to attract and retain talent that drives our ambitions forward.

Outlook Beyond 2029

Looking ahead to the end of this decade, Clara Industries envisions itself as a diversified, innovation-led, and sustainability-driven packaging company with a strong presence across both domestic and international markets. The combined impact of capacity expansion, product innovation, digital transformation, and a customer-centric mindset will enable us to achieve sustained growth. While challenges such as raw material volatility and regulatory pressures will persist, our roadmap is designed to balance risks with opportunities, ensuring resilience and consistent value creation.

SUSTAINABILITY

Commitment to Responsible Growth

At Clara Industries, sustainability is not a separate initiative but an integral part of how we operate, innovate, and grow. We recognize that the packaging industry is at the center of global discussions on waste management, climate change, and consumer safety. As a responsible player, we are committed to reducing environmental impact while delivering high- quality packaging solutions that meet modern demands. Our approach balances three priorities?economic performance, environmental stewardship, and social responsibility?ensuring long-term value creation for all stakeholders.

Environmental Responsibility

One of our most critical responsibilities lies in addressing the environmental challenges posed by plastic waste. We have taken significant steps to minimize our ecological footprint by adopting lightweight packaging formats that use fewer resources and generate lower emissions during transportation. Efforts are underway to increase the use of recyclable and reusable materials across our product portfolio, in line with global sustainability benchmarks.

Our three manufacturing units are being upgraded with energy-efficient systems, water conservation measures, and waste segregation practices. Investments in modern extrusion and printing technologies have not only enhanced production quality but also reduced scrap generation and energy consumption. Over the coming years, we aim to further integrate renewable energy sources into our operations and strengthen partnerships with recyclers to promote a circular economy in packaging.

Product Innovation for a Circular Future

Sustainability in packaging is no longer limited to compliance?it is a driver of consumer choice and brand differentiation. Clara Industries is aligning its product development strategy with this new reality. From metallised food wraps that reduce dependency on harmful aluminum foils to eco-conscious cling films and recyclable horticulture bags, our innovations are designed with both functionality and environmental impact in mind.

Product Innovation for a Circular Future

Sustainability in packaging is no longer limited to compliance?it is a driver of consumer choice and brand differentiation. Clara Industries is aligning its product development strategy with this new reality. From metallised food wraps that reduce dependency on harmful aluminum foils to eco-conscious cling films and recyclable horticulture bags, our innovations are designed with both functionality and environmental impact in mind.

We are also preparing to embrace upcoming regulatory mandates such as Extended Producer Responsibility (EPR) by developing products that meet requirements for recycled content, traceability, and reuse. By embedding sustainability in our product portfolio, we are not only staying ahead of compliance but also creating meaningful choices for customers seeking responsible packaging alternatives.

Social Responsibility and Community Engagement

Sustainability extends beyond the environment to the communities where we operate. Clara Industries is deeply committed to contributing to social development through responsible employment, skill development, and local community initiatives. By creating opportunities for local talent and supporting micro-enterprises, we foster inclusive growth that benefits both the business and society at large.

Our CSR initiatives, including financial aid programs and community outreach, are directed toward improving education, healthcare, and social security in regions around our manufacturing hubs. Through such programs, we aim to play a role in uplifting communities while building goodwill and trust with stakeholders.

Compliance and Governance

We believe that strong governance is the foundation of sustainability. Clara Industries adheres strictly to all applicable environmental and safety regulations, including the Plastic Waste Management Rules, EPR guidelines, and FSSAI regulations for food-grade materials. Regular internal audits, external certifications, and transparent disclosures ensure accountability in every aspect of our operations. Going forward, we will continue to strengthen traceability, data-driven monitoring, and reporting systems to enhance compliance while maintaining transparency with our stakeholders.

Roadmap for a Sustainable Tomorrow

Our sustainability roadmap is designed with clear objectives: to reduce waste at source, improve recyclability, and optimize energy use. In the near term, we are focused on integrating recyclable materials into mainstream production and expanding collection and reuse programs. Over the medium to long term, our targets include a higher share of renewable energy, zero landfill status across units, and partnerships for large-scale recycling projects.

Clara Industries envisions becoming a leader in sustainable packaging by 2050, building a future where every product we create not only fulfills the functional needs of customers but also leaves a positive imprint on the planet. Our vision is rooted in the belief that packaging can go beyond utility?it can inspire confidence, protect resources, and promote circularity. To achieve this, we are committed to continuously rethinking materials, processes, and business models in ways that reduce waste and extend product lifecycles.

This journey calls for more than just technological upgrades; it requires a culture of responsibility and innovation across the organization. We are fostering partnerships with suppliers, recyclers, policymakers, and customers to co-create solutions that make sustainability practical and scalable. At the same time, we recognize that our people are the driving force behind this vision, and their collective effort and shared purpose will shape how far and how fast we progress.

By combining innovation with accountability and collaboration with ambition, Clara Industries aims to set new benchmarks for sustainable growth in the packaging industry. Our roadmap is clear: to design with responsibility, produce with efficiency, and deliver with integrity, so that our impact extends beyond profits to the wellbeing of society and the health of our planet.

SIGHIFICflNT ACCOUNTING POLICIES AND NOTES

Basis of Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). These statements comply, in all material respects, with the Accounting Standards prescribed under Section 155 of the Companies Act, 2015, read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements are prepared on an accrual basis under the historical cost convention. The accounting policies have been applied consistently, except where a departure is specifically stated.

Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, income, and expenses, as well as the disclosure of contingent liabilities at the reporting date. These estimates are based on managements best knowledge of current events and expected future outcomes. However, actual results may differ, requiring adjustments to carrying values in subsequent periods.

Property, Plant & Equipment and Intangible Assets

Property, plant, and equipment are carried at cost of acquisition or construction, net of accumulated depreciation and impairment losses, if any. Cost includes the purchase price and any directly attributable expenses necessary to bring the asset to its intended use. Expenditure on major improvements and additions is capitalized, while routine maintenance and repairs are charged to the Statement of Profit and Loss. Depreciation is provided on the Written Down Value method, based on the useful lives prescribed under Schedule II of the Companies Act, 2015, or as estimated by management. Assets are reviewed for impairment, and an impairment loss is recognized when the carrying amount exceeds the recoverable value. Such losses are reversed if there is an improvement in recoverable value.

Revenue Recognition

Revenue is recognized when it is earned, measurable, and realizable, with no significant uncertainty regarding collection. Revenue from sale of goods is recognized upon transfer of ownership, delivery of products, and satisfaction of contractual obligations, with risks and rewards passed to customers. Revenue is presented net of indirect taxes such as Sales Tax and Goods & Services Tax (GST).

Investments

Investments intended to be held for not more than one year are classified as current investments, while all others are classified as long-term investments. Investments are initially recorded at cost, including directly attributable acquisition costs such as brokerage and duties. Current investments are carried at the lower of cost or fair value, determined on an individual investment basis. Long-term investments are carried at cost, with provisions made for any decline in value that is other than temporary. On disposal, the difference between carrying value and sale proceeds is recognized in the Statement of Profit and Loss.

Inventories

Raw materials and work-in-progress are valued at the lower of cost and net realizable value. Cost is determined on a First-in-First-out (FIFO) basis, while net realizable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The Company does not carry finished goods inventory as of the reporting date.

Employee Benefits

Retirement benefits in the form of provident fund contributions are defined contribution schemes. The Companys contributions are charged to the Statement of Profit and Loss in the year during which the employee renders the related service.

Taxation

Tax expense comprises current tax and deferred tax. Current tax is measured at amounts expected to be paid in accordance with the provisions of the Income Tax Act, 1961, as enacted or substantively enacted at the reporting date. Deferred tax is recognized on timing differences between taxable and accounting income, using enacted or substantively enacted tax rates at the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty of realization in future periods.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets that take a substantial period to get ready for their intended use are capitalized as part of the cost of such assets. All other borrowing costs are recognized as an expense in the period in which they are incurred.

Current Assets, Loans, and Advances

In the opinion of the Board, current assets, loans, and advances are realizable at least at the amounts stated in the Balance Sheet, in the normal course of business, and all liabilities are payable on demand or as agreed.