HCP Plastene Bulkpack Ltd Management Discussions

Global Economic Overview

After withstanding higher trade barriers and elevated uncertainty last year, global activity now faces a major test from the outbreak of war in the Middle East. Assuming that the conflict remains limited in duration and scope, global growth is projected to slow to 3.1 percent in 2026 and 3.2 percent in 2027. Global headline inflation is projected to rise modestly in 2026 before resuming its decline in 2027. Slowdown in growth and increase in inflation are expected to be particularly pronounced in emerging market and developing economies. The forecast for 2026 is revised downward by 0.2 percentage point and that for 2027 is unchanged, compared with those in the January 2026 WEO Update. Global headline inflation is expected to increase to 4.4 percent in 2026 and decline to 3.7 percent in 2027, marking upward revisions for both years.

The baseline forecast is for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023. A slight acceleration for advanced economies where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025 will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025. The forecast for global growth five years from now at 3.1 percent is at its lowest in decades. Global inflation is forecast to decline steadily from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025 with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Core inflation is generally projected to decline more gradually. The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability. (Source: IMF World Economic Outlook - April 2026).

Indian Economy Overview Gross Domestic Product (GDP):

Real GDP growth in 2026-27 is projected in the range of 6.8% to 7.2%. In 2025-26, GDP is estimated to grow by 7.4%, higher than 2024-25 (6.5%). Growth in 2025-26 is largely driven by domestic demand. The share of private final consumption expenditure rose to 61.5% in 2025-26, the highest level since 2011-12. Following factors are conducive for domestic economy: (i) healthier balance sheets across households, firms, and banks, (ii) support from public investment, (iii) resilient consumption demand, and (iv) improving private investment intentions. External uncertainties remain, including slower growth in major trading partners, trade disruptions arising from tariffs, and volatility in capital flows, which may affect exports and investor sentiment.

Inflation:

Retail inflation declined from 4.6% in 2024-25 to 1.7% in 2025-26 (April-December). This has improved real purchasing power and supported consumption. Decline in inflation was driven by lower prices of food items such as vegetables, pulses, and spices. This was owing to favourable weather conditions and higher production. RBI and IMF project a gradual increase in headline inflation in 2026-27, within the target range of 4% (?2%).

External Sector:

Indias current account deficit (CAD) in the first half of 2025-26 was 0.8% of GDP, lower than the first half of 2024-25 (1.3% of GDP). Indias current account shows a trade deficit in goods, which is partly balanced by strong earnings from services and private transfers. The surplus in services has grown steadily due to strong position in IT and professional services. Remittances also remain a key source of external funding.

As of January 16, 2026, forex reserves covered about 11 months of imports and 94% of the external outstanding debt. Expansion of higher-value manufacturing exports and diversification of export destinations have helped sustain exports, despite the impact of high tariffs from USA

The industrial sector grew by 7% in first half of 2025-26, higher than the previous year (6%). Manufacturing growth has recovered to 9% in the second quarter of 202526, after slowing down to 2.2% in the second quarter of 2024-25. Medium and high technology account for 46% of the total manufacturing value added, indicating more advanced production structures. (Source: Economic Survey 2025-26).

Plastic Industry

The plastic industry is a major contributor to the Indian economy. For decades now, plastic has played a vital role in industries as diverse as Agriculture, Healthcare, Packaging, Construction, Electronics, Transportation, and Machinery. Plastics popularity can be attributed to its remarkable properties like lightweight, durability, chemically stable, and capability of being molded into a variety of shapes and sizes. Additionally, plastics are also cheap.

The domestic plastic sector in the country has done well in the recent years and it has tremendous potential to grow further. The contribution of the plastic sector in making India a developed nation will be unparalleled and invaluable. the export of the country was stalled at around 500 million dollars till 2020 but the scenario has been changed in the last two years and the country has managed to touch the 776 million dollars mark in the export sector. Plastic industrys contribution was of 12 billion dollars and it has the potential to grow. Plastic sector has the potential to add business opportunities, jobs for young generation, opportunities in the world and it can help the government to grow the entire ecosystem of the plastic sector over the next few years.

FIBC Space

Indian manufacturers prefer to lower the total weight of bulk packaging that flexible intermediate bulk containers (FIBC) can provide. Their load-carrying capacity, versatility, re-usability, cost-effectiveness and eco-friendly material are increasing the demand. There are four main types of FIBC bags - A,B,C, and D. D is the safest option if one is working with flammable solvents and gases or other combustible substances.

Domestically, the utilization of bulk packaging (FIBCS) is less compared to European and American markets. The demand in these countries is primarily due to the pharmaceutical industry, whereas in emerging economies agriculture and food processing are responsible for the demand. Persistent growth in these industries across the world is positively impacting the demand for FIBC.

India has emerged as one of the worlds largest manufacturing and exporting hubs for FIBCs owing to its integrated PP value chain, skilled workforce, competitive production costs, and adherence to international quality standards. India exports approximately 40,000 MT of FIBCs per month, accounting for a significant share of global trade.

The bulk packaging market is growing steadily in India and in this sector, flexible bulk packaging is the fastest growing segment. But mostly in India, overall awareness about the usage of FIBC products is inadequate among the consumers. Hence, it presents a significant opportunity to grow awareness and generate interest in the Indian market.

With increasing awareness about FIBC and growing investment in R&D to improve the efficiency of the product to stay competitive, the market is likely to grow further with different segments like food, pharma, chemical, dairy (milk powder) etc.

Going forward, the North American region is expected to be the dominant position in the bulk bag market worldwide owing to the high use of packaging materials by end-use industries and the growth of the fertilizer and chemical industry in this region. Europe is expected to grow at a substantial rate as well due to the involvement of bulk bags in the mining and pharmaceutical sectors in this region.

The global FIBC market is anticipated to touch a valuation of US $12.6 billion by 2033, with a CAGR of 5.4%.

India holds a substantial market share for FIBCs in the US and Europe markets. As per an industry expert, India has a 75% share in the European FIBC imports and a 72% share in the US import market and is now looking at the Japan and South Korea markets to drive the growth.

Polypropylene Woven Sacks

The demand for polypropylene woven sacks is increasing as it is a suitable alternative to PE (polyethene) considering environmental risks associated with this material. The global polypropylene woven sacks market is expected to surpass US $ 6.1 billion by 2034 growing at a CAGR of 4.2% from 2024 to 2034.

The interest in polypropylene packs and sacks from the concrete business has expanded altogether over the most recent couple of years, because of an expansion in urbanization and development in the modern area. Worldwide organizations are peering toward fully expecting expanded requests from the structure and development industry.

Developing economies, the rising population and the subsequent disposable income of people boost the market. Additionally, polypropylene is on the surge as they are used for packaging a range of products like fertilizers, sugar, chemicals, and various other products.

Polypropylene woven bags and sacks will see an increase in demand as the cement industry continues to expand. During shipping and transportation, polypropylene woven bags and sacks provide excellent material handling and superior strength. Lately, it has been seen that the quantity of polypropylene woven packs and sacks makers for modern applications has expanded decisively.

OUR COMPANY OVERVIEW

HCP Plastene Bulkpack Limited (HPBL) is a forty-one years old Company that specializes in manufacturing plastic packaging solutions with an expansive product portfolio comprising FIBCs, small bags and AD star bags.

In the year 2001, it started manufacturing woven bags. The Companys target markets are the EU and the US, which have stringent quality requirements.

In 2019, Gopala Polyplast Limited was admitted to CIRP under the provision of IBC, 2016 due to default in payment by its erstwhile promoters to Financial and Operational Creditors. Subsequently, M/s Plastene India Limited submitted a Resolution Plan and the same was approved by Honble National Company Law Tribunal at Ahmedabad Bench. Under the new ownership and management of Plastene India Limited Group, Gopala Polyplast Limited was renamed as HCP Plastene Bulkpack Limited (HPBL). Presently HPBL is a part of Plastene Group, a reputed FIBC manufacturer and exporter with a robust product portfolio range.

OUR BUSINESS OVERVIEW

The Company produces PP fabric which is sold in the international and domestic markets. The major product portfolio is small PP Woven Bags, FIBC Bags, AD Start Bags. Major consumption of these bags is by Cement, Sugar, Food grains and Fertilizer industries.

During the Year FY 26 Revenue from operations stood at Rs. 289.41 Crore as compared to Rs. 118.08 Crore in FY showing increasing performance during the year.

OPPORTUNITIES & THREATS OPPORTUNITIES

• FIBC is an important product which could provide interesting growth opportunities in the domestic market and exports.

• Growing global FIBC demand.

• Rising chemical exports.

• Growth in food-grade packaging.

• Sustainable packaging requirements.

• Expansion of mining sector.

• Fertilizer industry growth.

• Infrastructure development.

• Increasing agricultural exports.

• Diversification of global supply chains towards India

THREATS

• Spike in raw material prices could impact business profitability.

• Global economic slowdown could impact the demand for our products.

• Polypropylene price volatility.

• Crude oil price fluctuations.

• Foreign exchange fluctuations.

• Freight cost volatility.

• Global geopolitical uncertainties.

• Competition from low-cost manufacturers.

• Stringent environmental regulations.

• Rising labour costs.

OUR HUMAN RESOURCE DEVELOPMENT

Our priority has always been to create a future-ready workforce. We believe that our Company can maintain sustainable and pro-table growth by focusing on performance culture. Therefore, we encourage our people at every step so that they can achieve organizational goals.

Our business places a strong emphasis on its people development processes and works to update skill sets. Training is crucial for organizational development and success. Our training programs are created to mould the intellect of our employees so that it leads to quality performance of employees.

FINANCIAL PERFORMANCE

INTERNAL CONTROL SYSTEM

For any Business entity to achieve its goals and objectives, internal control mechanisms are crucial. According to the size and nature of its operations, the Company has suitable internal control mechanisms. In order to ensure Companys integrity and foster operational efficiency, there must be well-documented policies, guidelines, and procedures in place to track business and operational performance. Financial and other data are reliable for preparing financial information and other data, for maintaining accountability of assets and for preventing loss from transactions that are not authorized, recorded or reported correctly. All assets are safeguarded and protected against loss from unauthorized use or disposition. A comprehensive programme of internal audits and management review supplements internal control. The system has been created to guarantee the accuracy of financial and other records for the preparation of financial information and for maintaining asset accountability.

RISKS & CONCERNS

The Company has a robust risk management strategy to identify the various risks and opportunities across our operations. Periodic reviews are conducted and the summary is presented to the Board Committee. It oversees the processes and mitigation actions wherever necessary. The risk landscape includes long-term strategic risks, short to medium-term risks as well as single events. Senior Executives work to achieve KPIs and targets, including the financial and nonfinancial performance of the Company to mitigate associated risks.