Creative Graphics Solutions India Ltd Management Discussions

Industry Overview

Flexography

The flexographic printing industry continues to grow, driven by rising demand for sustainable packaging, expanding flexible packaging applications and increasing adoption across the food, beverage, pharmaceutical and consumer goods sectors. According to Mordor Intelligence, the global flexographic printing market is projected to grow at a 5.76% CAGR during 2026-2031, reaching USD 27.71 billion by 2031.

Flexible packaging remains the largest application segment, while pharmaceuticals are expected to be the fastest-growing end-use industry, supported by increasing demand for high-quality packaging and regulatory compliance. Asia-Pacific continues to lead the market, with India benefiting from rising packaging consumption, organised manufacturing, and the growing adoption of automation and sustainable printing technologies.

What are Flexographic Printing Plates

Flexographic printing plates are precision-engineered photopolymer plates that transfer ink onto substrates such as paper, films, foils and corrugated board. They deliver high print quality, production efficiency and consistent image reproduction across a wide range of packaging applications.

Why Flexography is Gaining Momentum /

• Rising demand for flexible packaging

• Growing pharmaceutical packaging requirements

• Increasing adoption of sustainable printing solutions

• Expansion of e-commerce packaging

• Continued investments in automation and digital printing technologies

Why Creative Graphics is Well Positioned

Comprehensive Product Portfolio

Manufactures high-quality flexographic printing plates serving flexible packaging, labels, corrugated packaging and industrial printing applications across diverse end-use industries.

Technology & Customer Support

Focuses on consistent print quality, technical expertise and customer-centric solutions that help converters improve productivity, reduce waste and enhance printing efficiency.

Growth Platform

Strengthening its market presence through expanded manufacturing capabilities, strategic leadership additions and a growing footprint in South India.

Pharmaceutical Packaging

The pharmaceutical packaging industry is witnessing sustained growth, driven by rising healthcare demand, expanding biologies and injectable therapies, and increasingly stringent regulatory requirements.

According to Mordor Intelligence, the global pharmaceutical packaging market is projected to grow at a 5.94% CAGR during 2026-2031, reaching USD 218.81 billion by 2031.

India, supplying nearly 20% of global generic medicines by volume, continues to strengthen its position as a leading pharmaceutical manufacturing hub, driving demand for high- barrier packaging materials such as Alu Alu foils, PVC/PVDC films and blister foils, while increasing quality, compliance and sustainability requirements are creating opportunities for integrated packaging solution providers.

Why High-Barrier Packaging Matters

High-barrier packaging materials such as Alu Alu foils, blister foils and PVC/PVDC films provide superior protection against moisture, oxygen, light and environmental contaminants, helping preserve drug stability, extend shelf life and maintain product efficacy. As biologies, specialty medicines and moisture-sensitive formulations continue to gain prominence, demand for advanced primary packaging solutions is expected to rise significantly.

Why India is a Growing Pharma Packaging

• -20% of global generic medicines supplied by India (by volume)

• Rising pharmaceutical production and export opportunities

• Growing demand for biologies and specialty medicines

• Increasing adoption of high-barrier primary packaging

• Stringent serialization and regulatory compliance requirements

• Sustainability-led material innovation and recyclable packaging solutions

Why Creative Graphics is Well Positioned

Integrated Product Portfolio

Offers a comprehensive range of Alu Alu Foils, PVC/PVDC Films, Blister Foils, Tandem Films and CR Foils, enabling pharmaceutical companies to source multiple packaging solutions from a single partner and simplify vendor management.

Quality & Compliance Infrastructure

Dedicated in-house testing laboratory with capabilities including tensile strength, bond strength, heat sealability, GSM, micron thickness, forming and sealing trials, supporting stringent

pharmaceutical quality and regulatory standards.

Scale & Future Readiness

Expanded to 20,000 MT installed Alu Alu capacity, (yet to be operationalised) supported by new

PVC/PVDC and specialty packaging capabilities.

With all the expansions included, the capacity has reached over 44,000 MT

EPR Compliance

Advancing Responsible Packaging Through Circularity^

As sustainability and regulatory expectations continue to evolve, the Plastic Waste Management Rules, 2016 (as amended), together with the Extended Producer Responsibility (EPR) framework, have become a cornerstone of Indias plastic waste management regime.

Under the Plastic Waste Management Rules, recycling obligations for plastic packaging are being implemented in a phased manner, with a target of 80% recycling by FY 2027-28, alongside the progressive incorporation of recycled plastic content in packaging materials. These regulatory measures are encouraging the adoption of recyclable packaging designs, enhancing material recovery and supporting the responsible use of resources across the packaging value chain.

WHY EPR MATTERS

The implementation of EPR is accelerating the transition towards more sustainable packaging solutions across industries. As businesses work to meet evolving compliance requirements, greater emphasis is being placed on recyclable materials, efficient waste management systems and responsible packaging practices. This shift is fostering innovation throughout the packaging value chain while supporting long-term environmental stewardship.

FLEXOGRAPHY& SUSTAINABLE PACKAGING

Flexographic printing continues to play an important role in supporting sustainable packaging initiatives. The technology is widely used across flexible packaging applications and is compatible with evolving packaging formats designed to improve recyclability and resource efficiency. As brand owners increasingly prioritize sustainable packaging, demand for high-quality flexographic printing solutions is expected to remain well supported.

Global Adoption of EPR for Plastic Packaging

Extended Producer Responsibility (EPR) has evolved into a globally recognised policy instrument for improving plastic waste management and advancing circular economy objectives. Countries across Europe, North America and Asia-Pacific have adopted EPR frameworks that place responsibility on producers for the collection, recycling and environmentally sound management of post-consumer packaging waste. These regulations are accelerating investments in recycling infrastructure, encouraging recyclable packaging designs and promoting greater resource efficiency across the packaging value chain.

As governments continue to strengthen sustainability commitments, EPR is increasingly influencing packaging design, material selection and procurement practices. The expanding adoption of EPR frameworks is reinforcing the shift towards recyclable packaging solutions while fostering greater collaboration among brand owners, packaging manufacturers and recyclers to build more circular packaging ecosystems.

Business Performance

Building Scale Across Businesses

FY 2025-26 was a year in which the Groups growth broadened beyond a single engine. Consolidated revenue grew 37.8% to Rs345.98 crore, taking the four-year CAGR since FY 2021-22 to 50.0%, with both operating businesses contributing · Wahrens pharmaceutical packaging scale-up and Creative Graphics own flexographic growth.

Consolidated EBITDA grew a more modest 3.4% to Rs33.39 crore, with margin easing from 12.9% to 9.7%, and PAT fell 9.7% to Rs 18.75 crore. The moderation reflects cost absorbed simultaneously across both businesses that are Creative Graphics Bangalore ramp-up, and Wahrens FI2 raw material disruption and pre-operative capacity costs, consistent with a year defined by investment ahead of returns.

Consolidated Balance Sheet Snapshot (Rs Cr)

Particulars	FY 2024-25	FY 2025-26
Shareholders Funds	106.74	125.50
Total Assets	217.68	279.66
Property, Plant & Equipment	46.87	72.46

Consolidated Key Ratios

Particulars	FY 2024-25	FY 2025-26
ROE	19%	15%
Debt / Equity	0.60x	0.73x
Debt Service Coverage Ratio	10.06x	5.06x
Working Capital Days	108	83

Creative Graphics - Standalone

Standalone revenue grew 38.9% to Rs 154.80 crore, the fastest pace of growth the flexo business has posted in three years, as the Bangalore facility came onstream during the year and EPR-linked demand pulled brand owners toward flexo-compatible formats.

EBITDA grew a slower 20.8% to Rs22.63 crore as new-capacity ramp-up costs and firmer raw material prices ran ahead of the additional volume. PAT held roughly flat at Rs 13.35 crore, also absorbing a step-up in finance costs as long-term borrowings nearly doubled to fund the Bangalore and Oman investments.

Metric	FY 2024-25	FY 2025-26	YoY
Revenue from Operations	Rs 111.46 Cr	Rs 154.80 Cr	+38.9%
EBITDA (Margin)	Rs18.73 Cr (16.8%)	Rs22.63 Cr (14.6%)	+20.8%
Profit After Tax (Margin)	Rs 13.43 Cr (12.0%)	Rs13.35 Cr (8.6%)	-0.6%

Scale moved first. Operating leverage comes next.

Scale broadened

The Group added Rs94.90 crore to consolidated revenue in FY 2025-26, with both Flexography and Pharma Packaging contributing to growth. Revenue has now compounded at 50.0% over four years, reflecting the scale created by its two-engine business model.

Investment preceded returns

The benefits of the capacity expansion are yet to be fully reflected in earnings. Bengaluru ramp-up costs, H2 raw material pressures in Pharma Packaging and investments in new capacity moderated EBITDA margin to 9.7%, while PAT stood at Rs 18.76 crore.

The focus now shifts to utilisation

With Bengaluru operational and new pharmaceutical packaging lines at or near commercial scale, the next phase will be driven by higher utilisation, a broader product portfolio and increasing export contribution. The objective is now to translate the operating base created into stronger earnings conversion.

Outlook & Conclusion

FY 2026-27: Capacity in place, external uncertainty in view

FY 2025-26 closed with a substantially stronger operating base. Bengaluru is operational, Wahrens Alu Alu, PVC/PVDC and Tandem lines are at or near commercial scale, and the Oman facility has been installed. These investments provide the potential for a fuller contribution from the expanded capacity and broader product portfolio in FY 2026-27.

The external environment, however, remains uncertain. The geopolitical conflict that affected the second half of FY 2025-26 is expected to remain a source of uncertainty in FY 2026-27, potentially influencing the availability and pricing of aluminium, PVC and PVDC, international logistics and the timing of commercial production in Oman. Consequently, the pace of volume ramp-up and margin recovery may remain uneven during the year.

Against this backdrop, the Companys focus will remain on disciplined capacity utilisation, supply- chain resilience, customer continuity and measured expansion. FY 2025-26 represented a year of investment ahead of returns. FY 2026-27 begins with the capacity created and the opportunity intact, while external conditions call for continued prudence. The Company remains focused on translating this expanded operating base into a larger, more diversified and sustainable business over the long term.

Sustainability at a Glance

The Company believes that long-term value creation depends on responsible environmental management, inclusive workforce practices, disciplined governance, and ethical business conduct. Sustainability is not treated as a reporting exercise but as a strategic lens guiding operational and capital decisions. As we expand our footprint, including our strategic investment in Oman, ESG considerations are embedded into our risk evaluation, quality control, supply chain oversight, and technology investments.

ESG Governance in Action

Sustainability considerations are gradually being woven into the companys governance architecture. The Board of Directors provides overall strategic direction and stays engaged with emerging ESG- related risks and opportunities as they arise, while the Audit Committee continues to oversee the Companys broader risk management framework. Senior management leads day-to-day execution and monitors performance on the ground.

Board Oversight of ESG

The Board of Directors provides overall direction on matters that have a bearing on the Companys long-term sustainability, and is kept informed of key developments through periodic updates from senior management. The Audit Committee, in the course of its risk oversight mandate, considers relevant risk exposures that may have an ESG dimension, while the CSR Committee oversees the Companys community-facing initiatives. As the Companys ESG approach matures, it intends to strengthen this oversight structure further.

Stakeholder Engagement

Stakeholder engagement forms an integral part of the Companys approach to identifying and managing material sustainability topics. In an evolving business environment, the Company proactively engages with its stakeholders to understand emerging expectations, identify potential risks and opportunities, and strengthen long-term resilience. Stakeholders are identified and prioritised based on their relevance, role, and influence on the Companys operations and strategic objectives. Dedicated engagement mechanisms have been established to facilitate transparent communication, gather feedback, and address stakeholder concerns in a timely and effective manner.

The Companys stakeholder ecosystem comprises both internal and external stakeholders. Internal stakeholders include employees, senior leadership, management, and the Board of Directors, while external stakeholders encompass customers and clients, investors and shareholders, suppliers and value chain partners, government and regulatory authorities, industry associations, and local communities. Through regular engagement, the Company seeks to better understand stakeholder perspectives and integrate these insights into its business strategy and sustainability initiatives.

Key Stakeholder Groups and Engagement Mechanisms

Employees - Central to operational excellence and innovation, employees are engaged through induction and onboarding programmes, town halls, internal communications, learning and development initiatives, and periodic employee feedback surveys.

Customers and Clients - As key drivers of business growth and partners in innovation, customers and clients are engaged through regular interactions, account reviews, customer feedback mechanisms, and digital engagement platforms.

Investors and Shareholders - Investors and shareholders provide the capital that supports the Companys growth and long-term value creation. They are engaged through the Annual General Meeting, annual reports, investor presentations, stock exchange disclosures, and other regulatory communications.

Suppliers and Value Chain Partners - Suppliers and business partners play a critical role in ensuring operational continuity and maintaining quality standards. Engagement is undertaken through vendor onboarding processes, performance reviews, periodic audits, and ongoing business interactions.

Government and Regulatory Authorities - Government agencies and regulatory bodies provide the framework within which the Company operates. Engagement is maintained through statutory filings, regulatory disclosures, compliance reviews, and participation in relevant industry consultations.

Local Communities - Local communities are important stakeholders in the Companys long-term social and economic impact. Engagement is undertaken through community development and CSR initiatives, regular outreach programmes, and interactions facilitated by the management team.

By fostering transparent, two-way communication across these groups, the Company aims to build long-term, trust-based relationships that inform its sustainability priorities and support its continued growth.

Materiality Assessment

Our materiality assessment evaluates alignment with strategic priorities, financial and operational risk exposure, regulatory developments, stakeholder expectations, industry trends, and long-term value creation potential.

Reassessing Materiality in FY 2025-26

In line with our commitment to continuous improvement, we undertook a reassessment of material topics during the year, reviewing stakeholder feedback, evolving regulatory landscapes, industry trends, and internal risk assessments. This confirmed the continued importance of quality, compliance, safety, and environmental efficiency, while also highlighting the growing significance of technology integration and supply chain resilience.

Our environmental strategy focuses on operational efficiency, resource optimisation, and enabling sustainable packaging solutions.

Product Safety and Quality

As a provider of flexographic and pharmaceutical packaging solutions, product integrity is fundamental to our operations. Quality management systems operate in alignment with recognised standards such as ISO 9001, where applicable, with defect rates, rework, customer complaints, and audit findings tracked to reduce scrap and strengthen customer confidence.

Energy Efficiency and GHG Emissions

Continuous optimisation through process automation and energy-efficient technologies such as UV LED systems supports improved energy productivity and effective management of Scope 1 and 2 emissions, while strengthening operational resilience in a carbon-sensitive environment.

Material Use and Waste Management

Waste reduction supports circularity objectives and regulatory compliance. Scrap generated during operations is segregated and diverted through authorised recycling and recovery channels, reducing landfill dependency and enabling material recovery.

Paper is a principal material input across our operations, and monitoring its consumption is an important measure of material efficiency. Consistent monitoring helps identify opportunities to optimise usage, limit wastage and support responsible sourcing over time.

Our people-centric approach prioritises safety, workforce stability, and inclusive practices, while extending our impact to the communities in which we operate.

Occupational Health and Safety

The Company maintains defined safety protocols aligned with recognised occupational health and safety principles, including ISO 45001 standards where applicable, supported by regular training and safety awareness initiatives.

Labour Relations and Workforce Stability

During FY26, total employee strength increased from 419 to 497, reflecting expanded operational capacity, while employee retention remained strong at 94.36%, indicating sustained workforce stability.

Gender Diversity and Inclusion

The Company is guided by a Board-approved Diversity, Equity and Inclusion (DE&I) Policy that sets out its commitment to a workplace that is inclusive, equitable, and respectful, where every individual feels valued and empowered to thrive. The Policy establishes the Company as an equal opportunity employer, with a zero-tolerance approach to discrimination and harassment, fair and merit-based hiring, promotion, and reward practices, and periodic awareness sessions on diversity, unconscious bias, and inclusive communication. Guided by this Policy, women representation across the workforce increased to !2 in FY26, from 18¹ in FY25.

Privacy and Data Security

Access to customer information is restricted on a need-to-know basis through defined access controls, with data collected and stored securely in line with applicable protection standards. The Company reported zero incidents of data breach in FY26.

CSR and Community Engagement

CSR initiatives are overseen by the Boards CSR Committee and implemented in line with the Companys approved CSR Policy. This year priority areas included:

Creative Graphics follows a structured governance framework supported by defined policies, internal controls, and Board oversight, complying with all applicable local and national laws and regulations

Board Composition and Diversity

The Company is guided by a Board-approved Policy on Board Diversity, which affirms its commitment to a Board that reflects a diverse and balanced mix of experience, perspectives, and backgrounds. The Policy commits the Company to ensuring the presence of at least one Woman Director as required under the Companies Act, 2013, to actively working towards greater representation of women on the Board and in senior leadership, and to fair, transparent, and merit-based practices in all Board appointments. The Nomination and Remuneration Committee is responsible for implementing and overseeing this Policy, including in Board succession planning.

Risk and Compliance Management

The Companys Risk Management Policy outlines a systematic approach to identifying, assessing, mitigating, and monitoring risks across strategic, financial, operational, and compliance categories, with oversight anchored at Board, Audit Committee, and management levels.

Business Ethics and Integrity

Ethical conduct is reinforced through the Code of Conduct for Directors and Senior Management and the Companys Anti-Bribery and Anti-Corruption (ABAC) Policy, which maintains a zero-tolerance approach to bribery, facilitation payments, and corrupt practices. The Policy sets clear boundaries around gifts and hospitality, requires prior approval for related- party and charitable transactions, and prohibits any preferential treatment in recruitment or business dealings. Employees and third parties acting on the Companys behalf are expected to adhere to these standards, with protection from retaliation for those who report concerns in good faith.

Supply Chain and Raw Material Sourcing

Supplier selection focuses on quality reliability, regulatory compliance, and long-term supply stability. The Companys Supplier Code of Conduct sets out clear expectations for all suppliers, contractors, and business partners, covering fair labour practices and human rights, safe working conditions, environmentally responsible operations, anti-bribery and business ethics, and the protection of confidential data. The Company reserves the right to monitor supplier compliance through self-assessments and periodic audits, with corrective action required in cases of non-compliance.

Certifications and Standards Compliance

The Company and its group entity, Wahren India Private Limited, maintain internationally recognised certifications that reinforce quality, environmental, and safety standards across operations, with regular internal and external audits to ensure continued compliance.

Technology and Automation

Automation continues to improve operational efficiency, accuracy, and material utilisation, indirectly supporting sustainability outcomes through reduced rework and more disciplined resource management.