GLEN Industries Ltd Management Discussions

A. Industry Structure and Developments

Glen Industries Limited ("GIL" or "the Company"), originally incorporated in 2007 as Glen Stationery Private Limited, transitioned into the manufacturing of eco-friendly food packaging and foodservice products. The Companys principal product lines are thin-wall food containers, polylactic acid (PLA) straws, and paper straws, catering to the HoReCa (Hotel, Restaurant and Catering), Quick Service Restaurant (QSR), food and beverage, and dairy industries, both in India and in export markets including the United States, the European Union, the Middle East, and Africa.

The Company is listed on the BSE SME platform via an initial public offering, with net proceeds earmarked substantially for setting up a new manufacturing facility in Howrah, West Bengal, intended to expand installed capacity and setup capacity for Thermoforming and Paper Cup products.

The Global Plastic Packaging Market size is estimated at 103.63 million tonnes in 2024, and is expected to reach 121.93 million tonnes by 2029, growing at a CAGR of 3.31% during the forecast period (2024-2029).

The food packaging industry is one of the largest users of plastics. The demand for rigid plastic packaging for the food industry is witnessing growth, as it is increasingly replacing traditional materials such as paperboard, metals, and glass owing to its beneficial properties, such as being lightweight, having reduced cost, less energy and water consuming process and easily reusable.

Experienced Leadership & Team
Glen Industries Limiteds management team, led by industry veterans, drives strategic decisions that capitalize on market opportunities and address the dynamic needs of customers.

Strong Customer Relationships
With a focus on building long-term relationships, Glen Industries ensures reliable delivery and consistent product quality through a highly efficient supply chain.

Advanced Manufacturing Facilities
The company invests in state-of-the-art production facilities, delivering high-quality products with an emphasis on process optimization and cost-effectiveness.

Commitment to Quality
Glen Industries adheres to global standards such as ISO, HACCP, FSSC 22000, and FSC ensuring that every product meets the highest safety, reliability, quality benchmarks, environment friendly and sustainable solution.

Tailored Solutions
The company provides customized packaging solutions, offering flexibility that helps clients differentiate their brands and align with their operational needs.

Revenue from operations grew approximately 19% year-on-year in FY26 to Rs. 20,312.61 Lakhs, extending the strong growth trajectory of the prior three years (three-year CAGR through FY25 of roughly 22%). However, profitability did not keep pace: the cost of materials consumed rose to roughly 62% of revenue in FY26 from about 57% in FY25, due to increase in Crude Oil Prices compressing EBITDA margin from 24% to 19% even as absolute EBITDA was largely flat at Rs. 3,906.75 Lakhs. Combined with a modest increase in finance costs and depreciation, profit before tax stood at Rs. 2,172.32 Lakhs (FY25: Rs. 2,444.76 Lakhs) and PAT at Rs. 1,650.25 Lakhs (FY25: Rs. 1,822.31 Lakhs), a PAT margin of about 8.1% versus 10.7% in FY25. EPS fell more sharply, to Rs. 6.86 from Rs. 10.39, reflecting both the lower profit and a larger post-issue share base following the FY26 equity raise. Management has attributed part of the pressure on growth momentum to prevailing geopolitical conflicts impacting export markets, while continuing to guide toward a turnover target of approximately Rs. 50,000 Lakhs by FY29.

The balance sheet was transformed in FY26 by a further primary equity issuance: net worth more than doubled, from Rs. 5,846.19 Lakhs to Rs. 13,961.04 Lakhs, driven by fresh share capital and a large securities-premium addition to reserves (well in excess of retained FY26 profit, confirming the equity raise as the primary driver). Total borrowings were held broadly flat at Rs. 12,072.81 Lakhs, alongside a large increase in cash and bank balances to Rs. 3,380.07 Lakhs (partly reflecting fixed deposits placed from the issue proceeds). Capital work-in-progress rose sharply, from Rs. 53.80 Lakhs to Rs. 1,188.85 Lakhs, consistent with initial site and foundation work at the new facility. Inventories grew to Rs 7,841.52 Lakhs keeping in mind increase transit time due to disruption in Middle East

Operating cash flow remained positive but modest at Rs. 584.82 Lakhs in FY26 (FY25: Rs. 576.90 Lakhs). Investing outflows moderated to Rs. 1,769.25 Lakhs (FY25: Rs. 3,480.23 Lakhs). Financing activities were dominated by the equity raise: net proceeds from the further issue of shares were approximately Rs. 6,294.22 Lakhs, against which the Company paid Rs. 628.83 Lakhs in public issue expenses, placed Rs. 3,219.47 Lakhs into fixed deposits (pending deployment, toward the new facility), made a net repayment of Rs. 1,210 Lakhs on borrowings, and paid Rs. 935.41 Lakhs in finance costs — together contributing net financing inflows of Rs. 1,114.57 Lakhs. The net effect was a modest Rs. 69.87 Lakhs reduction in narrowly-defined cash and cash equivalents, even as the Companys overall liquidity position (including fixed deposits) strengthened materially.

The Companys product portfolio spans thin-wall food containers (the largest revenue contributor), PLA straws, and paper straws, now supplemented by newly introduced paper cups and thermoforming-based solutions. Products are sold to HoReCa, QSR, FMCG, retail, beverage and dairy customers domestically (26+ states) and to a growing base of international customers (40+ recurring clients across 30+ countries). We have consistently focused on diversifying our product portfolio to cater to a broad range of customers across various end-use industries and geographic markets. While we remain committed to strengthening our existing product lines, we also aim to expand into new product categories that present significant opportunities for growth and profitability. This strategic approach includes broadening our offerings within our current business segments while exploring untapped markets and developing innovative products that align with emerging trends and customer needs. By identifying and entering segments that our management has identified as having strong growth potential, we aim to not only enhance our market presence but also position ourselves as a dynamic and forward-thinking organization capable of adapting to an ever-evolving business landscape.

Management has reiterated an ambition to reach approximately Rs. 50,000 Lakhs in turnover by FY29, implying continued double-digit growth from the FY26 base of Rs. 203 Lakhs, underpinned by the new facility and further product diversification (paper cups, thermoforming).

The Strategic Growth Roadmap includes:

• Use recyclable, biodegradable materials and eco-friendly practices.
• Deploy electric injection machines, reduce carbon emissions.
• Position Glen Industries Limited as a socially responsible brand.

• Use industry insights to diversify customer base.
• Increase wallet share by offering broader solutions to existing clients.

• Invest Rs. 10,022.00 lakhs in new manufacturing facilities and new production lines.

• Enhance automation, drive operational efficiency, and cost competitiveness.

• Expand into new product categories across industries and markets.
• Develop innovative products based on emerging trends and customer needs.

• Streamline manufacturing processes to improve resource efficiency.
• Build customized systems for better control and performance monitoring.
• Foster employee engagement to sustain high service quality.

• Export concentration risk: a large share of revenue is derived from international customers, exposing the Company to trade-policy, tariff and geopolitical risk.
• Input cost risk: key raw materials are polymer/crude-linked, and prices can be volatile.
• Execution risk: delay in commissioning the new manufacturing facility could defer expected growth and impair return on the associated capital expenditure.
• Regulatory risk: Shifting emphasis on sustainable and environment friendly packaging solution.

As a listed entity on the BSE SME platform, the Company is required to maintain internal financial controls commensurate with its size and the nature of its operations, covering procurement, inventory management, treasury and financial reporting, subject to review by its statutory auditors and the Audit Committee of the Board. Given the working-capital intensity of the business, the adequacy of inventory and receivables monitoring controls is particularly relevant to an assessment of financial risk.

The Companys operations are supported by a manufacturing workforce spread across permanent and contractual employees at its Howrah facilities, consistent with its scale as a mid-sized SME manufacturer. Detailed headcount and per-employee productivity metrics are disclosed in the Companys statutory annual report.

This Management Discussion and Analysis contain forward-looking statements regarding the Companys business outlook, growth prospects and financial performance, which are based on assumptions and estimates that involve known and unknown risks and uncertainties. Actual results may vary due to risks and uncertainties including regulatory changes, economic conditions, and competitive factors. The Company does not undertake any obligation to update these statements except as required by law.