G M Polyplast Ltd Management Discussions

Global Market Scenario of Economy: 2025-26: The global economy navigated a materially more challenging environment during the financial year

2025-26 than the relatively steady conditions of the preceding year. Global growth, which had shown resilient, broadly stable momentum through calendar

2025, faced a fresh headwind in early calendar 2026 with the outbreak of conflict in the Middle East, which introduced renewed volatility in energy and commodity prices and tightened global financial conditions. According to the International Monetary Funds April 2026 World Economic Outlook, assuming the conflict remains limited in duration and scope, global growth is projected to moderate to approximately 3.1% in calendar 2026 and 3.2% in calendar 2027, with the slowdown and associated inflationary pressure expected to be particularly pronounced across emerging market and developing economies.

Notwithstanding these external shocks, the Indian economy continued to demonstrate comparative resilience during the year under review, supported by robust domestic consumption, sustained public capital expenditure, and a stable monetary policy environment. Persistently elevated public debt levels globally, moderating but still-present disinflationary pressures in several advanced economies, ongoing trade fragmentation, and structural bottlenecks in global supply chains remained key themes through the year, keeping overall business and investor sentiment cautious even as widespread recession was avoided. The IMF has continued to emphasise the need for prudent fiscal and monetary policies, together with renewed efforts to foster investment and structural reform, to support stable and sustainable growth into financial year 2026-27 and beyond. Indian Plastic Industry: 2025-26 Overview: The Indian plastics industry sustained its growth trajectory through financial year 2025-26, reaffirming its position as a critical enabler across the automotive, construction, agriculture, healthcare, packaging, and fast-moving consumer goods (FMCG) sectors. Industry estimates place the Indian plastics market at approximately USD 44-47 billion for calendar 2025-26, with the sector projected to sustain a compound annual growth rate in the region of 6.1% to 6.4% over the coming decade. This continued expansion is being driven by rising domestic consumption, the sustained growth of e-commerce and urban infrastructure development, and increasing export demand for Indian-manufactured plastic products.

Packaging remains the single largest application segment, accounting for over 40% of overall market share, driven by continuing demand for lightweight, durable and cost-efficient solutions across food packaging, consumer durables and online retail. The automotive, construction and electronics sectors also use segments, as remainsignificant plastic materials continue to enable innovation in lightweighting, energy efficiency and cost-effective manufacturing.

Government initiatives such as Make in India, production-linked incentive (PLI) schemes, and continued expansion of polymer manufacturing capacity - particularly across the Gujarat and Maharashtra petrochemical corridors - continue to strengthen domestic supply and reduce import dependency for raw materials, even as manufacturers continue to navigate volatile feedstock prices and global demand fluctuations. Environmental sustainability continued to command increasing regulatory and market attention through the year. Extended Producer Responsibility (EPR) norms notified in recent years have continued to push converters and brand owners toward recycled-content resins and greener manufacturing processes, while the biodegradable and recycled plastics segment continues to grow at a considerably faster pace than the broader industry. Micro, Small, and Medium Enterprises (MSMEs) continue to form the backbone of the industry, contributing substantially to both production volume and employment generation, with their adaptability - particularly in rural and semi-urban locations - continuing to bolster the sectors overall supply chain resilience.

In summary, the Indian plastics industry in 2025-26 remained on a robust growth path, underpinned by strong domestic demand, continued government policy support, export ambitions, and a deepening focus on sustainability. The outlook into financial year 2026-27 remains positive, with continued investment in technology, scale and sustainable manufacturing expected to reinforce the industrys role as a growth engine for the broader Indian economy.

Company Outlook and Performance: The Companys continued focus on quality, operational excellence and customer satisfaction translated into another year of consistent growth for G M PolyplastLimitedduringfinancialyear 2025-26. Despite a dynamic and competitive external environment, the

Companys focused strategies and agile execution enabled it to build further on the market position it has consolidated in recent years, while continuing to invest in capacity and future growth.

During the financial year 2025-26, the Company achieved Revenue from Operations of Rs. 102.99 crore (Rs. 10,299.19 lakhs), an increase of 7.11% compared to Rs. 96.16 crore (Rs. 9,615.55 lakhs) in the previous year, demonstrating continued strengthening of the Companys market position and the trust placed in it by its customers. Profit Before Tax increased to Rs. 11.14 crore (Rs. 1,113.59 lakhs) from Rs. 9.99 crore (Rs. 999.02 lakhs), while Profit After Tax (PAT) rose to Rs. 8.27 crore (Rs. 826.69 lakhs), an increase of 11.05% over the Rs. 7.44 crore (Rs. 744.44 lakhs) recorded in the previous year. Earnings per share (Basic and Diluted) stood at Rs. 6.14, compared to Rs. 5.53 in the previous year, an increase of 11.03%, reflecting the Companys continued operational efficiency and prudent financial management.

A particularly notable feature of the years performance was the substantial improvement in operating cash generation: Net Cash from Operating Activities increased to Rs. 951.41 lakhs, compared to Rs. 27.40 lakhs in the previous year, driven principally by a reduction in inventory levels and improved working capital management. This strong cash generation enabled the Companytofund -up in capital expenditure gross Property, Plant & Equipment significantstep increased from Rs. 558.75 lakhs to Rs. 908.46 lakhs during the year - while simultaneously strengthening its cash and bank balances, which closed the year at Rs. 567.38 lakhs as against Rs. 102.64 lakhs in the previous year. The Companys Net Worth increased to Rs. 4,746.77 lakhs from Rs. 3,920.08 lakhs, an increase of 21.09%, further strengthening the Companys balance sheet and its ability to pursue new business opportunities while continuing to withstand market fluctuations.The current ratio remains healthy at 4.47, and the Company continues to operate with a very low level of gearing (debt-equity ratio of

0.02).

During the year, the Company also incorporated Regranix Private Limited as its wholly-owned subsidiary (incorporated March 13, 2026), reflecting the Companys continued focus on long-term strategic growth and diversification. As the subsidiary had not commenced business operations as at March 31, 2026, its financials have not been consolidated for the year under review, as more particularly explained in the notes to the financial statements.

The outlook for the Company remains promising. Continued emphasis on product innovation, capacity expansion and sustainable manufacturing practices positions the Company well to capture emerging opportunities across key sectors such as pharmaceuticals, packaging and interior solutions. The Companys expanding relationships with strategic partners, together with its continued commitment to responsible and disciplined growth, are expected to support further diversification and market reach in the years ahead. The entire G M Polyplast team remains united in its pursuit of excellence, committed to delivering superior value to customers and stakeholders, upholding high standards of governance, and building on the strong foundations laid in recent years.

Segment-wise / Product-wise Performance: The Company operates in a single reportable business segment, namely the manufacture of plastic sheets and granules (HIPS, ABS, PET, PP and HDPE), and accordingly, separate segment-wise financial disclosure as defined under Accounting Standard 17

("Segment Reporting") prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, is not applicable to the Company.

Opportunities and Threats of the Plastic Industry in the Indian Market: The Indian plastic industry continuestooffersignificantgrowth opportunities, driven by strong domestic consumption, expanding export markets, and continuous technological advancement. The rapid growth of e-commerce and organised retail continues to propel demand for lightweight, durable and cost-effective plastic packaging solutions, while government incentives such as the Make in India initiative, production-linked incentive (PLI) schemes, and the development of dedicated Plastic Parks continue to enhance domestic manufacturing capacity and export competitiveness. Increasing adoption of engineering plastics, together with continuing innovation in bioplastics and recycling technologies, presents promising avenues for specialisation and sustainable growth in an increasingly environmentally conscious market.

The industry continues, however, to face notable threats that require careful navigation. Tightening environmental regulations around plastic waste management continue to demand higher investment in sustainable materials, waste recycling infrastructure and compliance mechanisms, which may elevate operational costs. Volatility in raw material prices, closely linked to fluctuations in petrochemical feedstocks, continues to introduce uncertainty into cost structures and profitability. Infrastructure gaps and shortages of skilled labour in certain regions continue to constrain scaling and technology adoption for smaller players, while trade uncertainties, protectionist policies in key export markets and currency volatility pose ongoing risks to international growth ambitions. Intense competition in a fragmented market continues to restrict pricing power for smaller participants. Addressing these challenges through continued innovation, sustainability commitments and strategic investment will remain crucial for companies, including G M Polyplast Limited, to capitalise on the industrys opportunities while prudently managing the associated risks.

Risks and Concerns: The Indian plastic industry continuestofacesignificantrisks and concerns, primarily stemming from environmental and regulatory challenges. India remains one of the largest generators of plastic waste globally, and a meaningful proportion of this waste continues to remain uncollected or is disposed of through open dumping or burning, resulting in environmental hazards such as waterway blockages, urban flooding, and degradation of marine ecosystems. The open burning of plastics continues to pose meaningful public health risks in affected communities, and the presence of microplastics in water and soil continues to raise concerns for agricultural productivity and food safety. Indias informal recycling sector, while handling a substantial share of plastic waste, continues to operate under conditions that expose workers to health and safety risks, and compliance with mandatory Extended Producer Responsibility (EPR) norms across the value chain remains an ongoing area for improvement.

On the regulatory front, while India has implemented bans on identified single-use plastics and continues to strengthen Plastic Waste Management Rules, enforcement remains inconsistent in several regions. Persistent volatility in raw material prices, ongoing supply chain considerations, and global trade uncertainties continue to add financial and operational risk for manufacturers. Growing public and governmental focus on reducing plastic use and increasing sustainability investment continues to create cost and compliance considerations for the industry. Addressing these risks requires continued, coordinated action between government, industry participants - including companies like G M Polyplast Limited - and communities, to improve collection systems, adopt circular economy practices, strengthen worker protections, and accelerate the adoption of sustainable materials.

Internal Control Systems and their Adequacy: G M Polyplast Limited has in place a comprehensive internal control framework that is documented and consistently implemented across all functions of the Company. As part of this framework, the Company formulates an annual business plan and develops detailed quarterly budgets for revenue and capital expenditure. Actual operating performance is closely monitored against these budgets, and variances are promptly analysed and addressed to ensure effective financial and operational management.

To maintain the robustness of its controls, the Company has engaged M/s. D D & Associates, Chartered Accountants, an independent firm, to carry out periodic internal audits covering all key activities and departments within the organisation. The findings and recommendations arising from the internal audit process are submitted on a half-yearly basis to the Audit Committee of the Board of Directors, which reviews these reports to ensure compliance with established procedures and to strengthen the overall internal control environment.

Human Resources and Industrial Relations: The Company recognises its employees as a key contributor to its continued growth and operational performance. As on March 31, 2026, the Company had permanent employees on its rolls, compared to employees as on March 31, 2026. Industrial relations with employees remained cordial and harmonious throughout the year under review, with no material disputes reported. The Company continues to invest in the training and development of its workforce, and remains committed to maintaining a safe, respectful and productive working environment across its manufacturing and administrative operations.

Discussion on Financial Performance with Respect to Operational Performance: The Directors confirm that there have been no material events or circumstances since the date of the last audited financial statements which materially or adversely affect, or are likely to affect, the profitability of the Company, the value of its assets, or its ability to meet its liabilities within the next twelve months. During the financial year 2025-26, the Company achieved Revenue from

Operations of Rs. 102.99 crore (Rs. 10,299.19 lakhs), as against Rs. 96.16 crore (Rs. 9,615.55 lakhs) in the previous year (FY 2024-25), representing growth of

7.11%. The table below summarises the Companys key financial highlights for the year under review as compared to the previous year:

Details of significant changes (i.e., a change of 25% or more, as compared to the immediately preceding financial year) in key financial ratios, along with detailed explanations therefor, are set out below.

The Return on Net Worth of the Company for the financial year 2025-26 was 17.42%, as compared to 18.99% in the previous financial year, representing a decline of 1.57 percentage points. This decline is not attributable to any deterioration in profitability Profit After Tax in year - but rather to the Companys Net Worth growing at a faster relative pace of 21.09% (from Rs. 3,920.08 lakhs to Rs. 4,746.77 lakhs), driven principally by retention of profits and consequent accretion to reserves. The Board considers this to be a healthy outcome, reflectingthe Companys strengthening capital base and its capacity to support future growth and capital expenditure.

Cautionary Statement: Statements in this Management Discussion and Analysis and in the Boards Report describing the Companys strengths, strategies, projections and estimates are forward-looking statements and are progressive within the meaning of applicable securities laws and regulations. Actual results may vary materially from those expressed or implied, depending upon various economic and other factors, including but not limited to Government policies, rules and regulations, general economic conditions, raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in government regulations and tax regimes, economic developments within India and globally, and other incidental factors. The Management shall not be responsible for any actions taken based on such statements.