GSM Foils Ltd Management Discussions

Global Economy

The global Aluminum Foil Packaging Market (A is expected to be growth USD 27.9 billion by 2028, growing at a CAGR of 4.3% during the forecast period. Market growth in the Asia Pacific can be attributed to presence of a large and growing aluminum foil packaging demand in the Asian Countries.

Market share of Indian Aluminum Foil Packaing Market in 2023-2024, followed by Europe and North America. Emerging economies such as India and China are predicted to observed considerable demand for aluminum foil packaging due to the growing food & beverages industry, packaging, pharmaceuticals & healthcare industry. According to the world bank, Asia pacific is the fastest-growing region, in the terms of both economic and population growth. According to world economics, the region held for 44% of the global GDP, and 64% of the total GDP growth during the past 10 years.

Strong economic growth in the first quarter of FY23 helped India overcome the UK to become the fifth-largest economy after it recovered from the COVID-19 pandemic shock. Nominal GDP or GDP at Current Prices in the year 2023-24 is estimated at Rs. 295.36 lakh crores (US$ 3.54 trillion), against the First Revised Estimates (FRE) of GDP for the year 2022-23 of Rs. 269.50 lakh crores (US$ 3.23 trillion). The growth in nominal GDP during 2023-24 is estimated at 9.6% as compared to 14.2% in 2022-23. Strong domestic demand for consumption and investment, along with Governments continued emphasis on capital expenditure are seen as among the key driver of the GDP in the second half of FY24. During the period April-June 2025, Indias exports stood at US$ 109.11 billion, with Engineering Goods (25.35%), Petroleum Products (18.33%) and electronic goods (7.73%) being the top three exported commodity. Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

Indias real GDP grew by 8.2% in FY24, posting growth of over 7% for a third consecutive year, driven by stable consumption demand and steadily improving investment demand. Gross value added (GVA) at 2011-12 prices grew by 7.2% in FY24, with growth remaining broad-based.

Manufacturing is emerging as an integral pillar in the countrys economic growth, thanks to the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals, and consumer durables. Chemicals, pharmaceuticals, electronics, automotive, industrial machinery, and textiles (among others) are expected to propel manufacturing exports to reach US$ 1 trillion by FY28.

India has the capacity to export goods worth US$ 1 trillion by 2030 and is on the road to becoming a major global manufacturing hub. Indias manufacturing sector is poised to reach US$ 1 trillion by 2025-26, led by Gujarat, Maharashtra, and Tamil Nadu.

Indias overall exports during the April-March period of 2023-24 are US$ 776.68 billion, reflecting a marginal positive growth of 0.04% over the April-March period of 2022-23. In March 2024 alone, exports stood at US$ 70.21 billion.

Indias manufacturing industry witnessed its fastest expansion in 16 years in March, with the HSBC final India Manufacturing Purchasing Managers Index (PMI) soaring to 59.1, the highest since February 2008. This surge was fuelled by increased demand, resulting in notable improvements in new orders, output, input stocks, and job creation, as reported by S&P Global.

The market growth of aluminum foils is expected to be fueled by the expansion of the global packaging industry, as aluminum foils are extensively used for packaging various products such as food, beverages, cosmetics, and pharmaceuticals. The pharmaceutical industry, in particular, is experiencing a surge in demand for aluminum foils, leading to increased manufacturing activities.

Aluminum plays a major role in the modern world through its innumerable forms of applications- from kitchen ware to electric conductors and from railway wagon to Appollo spacecraft. Because of its intrinsic and versatile properties of lightness, strength to weight ratio, corrosion resistance, electrical and thermal conductivity, non toxicity etc., a wide range of uses has opened up for this metal. Aluminum as a packaging material is unmatched owing to its light weight, hygienic and non-contamination which eventually results in longer shelf-life of end products.

Aluminum foil is a thin sheet of metal. As such it can be an absolute barrier to moisture, gases, odors, bacteria and molds. The high reflectivity of aluminum ensures good protection against radiant heat, whilst its opacity is important in preventing deterioration of a very large range of foods and drinks which are affected by light. It is used for packaging and non-packaging uses. The growth of this industry has been in the recent past, owing to the growing application of foil in a variety of products.

During the year, your company achieved a Gross Turnover excluding trading turnover of Rs. 4818.40/- Lakhs and production for the Blister Foils and Strip Foils was 2125 kgs for the financial year 2023-2024.

The Company has reached a turnover of Rs. 4083.39/- Lakhs from the very first year of its incorporation even under the conditions of uncertain prices of raw material and heavy competition and market situation worldwide.

Supply of Aluminum is in excess and any deficit can be imported at low rates of duty. Currently, the demand is stable while supply is in excess. Demand for aluminum is estimated to grow 6% - 8% per annum in view of the low per capita consumption in India. Competition is primarily on quality and price, as being a commodity, differentiation is difficult. However, the recent spate of consolidation has reduced the competitive pressure in the industry. Further increasing value addition to aluminum products has helped some companies protect themselves from high volatilities witnessed in this industry.

Company continues to maintain its conservative financial profile. Company Banked with Bank of India for their working capital needs. Company has sufficient working capital limits of from Bank of India at concessional and extremely competitive interest rate. Presently Company has availed cash credit//term loan facility. Cash Flow for less than 2 years is adequate to extinguish its entire debts timely.

Company has opportunity to increase production and sales turnover due to acceptance of product by most of the major Pharma Companies in India, Bangladesh and other countries.

Threats

Due to downfall in metal and grannual rates customers may ask for rate reduction and due to impose of Anti-Dumping duty on Foil Stock (raw material) on import from China the cost of raw material increase.

The Risk Management framework of your Company ensures regular review by management to proactively identify the emerging risks, to do risk evaluation and risk prioritization along with development of risk mitigation plans and action taken to minimize the impact of the risk. The various risks, including the risks related to the economy, regulation, competition, technology etc., are documented, monitored and managed efficiently.

Your company faces risk with similar to those faced by companies operating in the non-ferrous metal sector. Profitability may also be affected on account of competition from existing and prospective manufactures of the same products and cheap import from China.

The Company has identified its business segment as Primary Reportable Segment. There are no other Primary Reportable Segment and the Companys Operations fall under a single segment "Aluminum Foils". Hence, Segment reporting is not applicable as per Accounting Standard (AS) - 17 - Segment Reporting.

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standards.

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. The internal controls cover operations, financial reporting, compliance with applicable laws and regulations, safeguarding assets from unauthorized use and ensure compliance Of corporate policies. The Audit Committee of the Board of Directors also periodically reviews audit plans, external auditor observations and recommendations, significant risk area assessments and adequacy of internal controls.

The Human Resource philosophy and strategy of your Company is to attract and retain the best talent, be an employer of choice and create a holistic workplace environment, where employees get opportunities to realize their potential. Companies are judged on career growth prospects, rewards, work life balance, Performance evaluation and stability. Our standing here is a reflection of not just our employees view but also of the larger Indian workforce which responded. Considering the long-term business goals, your Company has ensured that the Human Resources strategy is in line with and complementary to the business strategy.

It is your companys belief that people are at the heart of corporate & constitute the primary source of sustainable competitive advantage. The trust of your companys human resource development efforts therefore is to create a responsive and market driven organization. Your company continues its focus on strengthening competitiveness in all its business. Your directors look forward to the future with confidence.

The company has followed a conscious policy of providing training to Management Staff through in-house and external programme, for upgrading personal and technical skills in relevant areas of functional disciplines.