Huhtamaki India Ltd Management Discussions

Huhtamaki India Limited, part of the global Huhtamaki Group, draws on over a century of expertise in flexible packaging and labelling solutions. Leveraging the Groups capabilities in material science, innovation and manufacturing excellence, the Company delivers packaging solutions designed to protect products, maintain hygiene and enhance consumer convenience across diverse end-use industries.

The Company places strong emphasis on safety, quality and environmental responsibility, integrating sustainability into product design and manufacturing processes.

Its focus on developing recyclable and resource-efficient packaging solutions the growing need to balance functionality with environmental considerations, while meeting evolving regulatory and customer expectations.

Huhtamaki India serves a diversified customer base across food and beverages, pharmaceuticals, personal care and other consumer segments, delivering cost-effective, performance-driven packaging solutions that help preserve product integrity and strengthen brand engagement.

Going forward, Huhtamaki India intends to build on its manufacturing capabilities and global innovation platforms to advance sustainable packaging solutions, enhance operational efficiency and support customers in their transition toward more circular packaging systems, reinforcing its role in shaping the future of responsible packaging.

Global economic review

The global economy in 2025 continued to demonstrate underlying resilience, supported by steady consumption, sustained investments in technology and relatively stable financial systems However, as the world moves into 2026, this growth trajectory is being tested by heightened geopolitical tensions and disruptions in energy markets, introducing new uncertainties into the macroeconomic environment.

Global growth forecast (%)

	Estimated	Projected
.	2025	2026	2027
World Economy	3.3	3.3	3.2
Advanced Economies	1.7	1.8	1.7
Emerging & Developing Economies	4.4	4.2	4.1

(Source: IMF January Outlook)

According to the International Monetary Funds (IMF) January Outlook Update, global real GDP growth is projected at around 3.3% in 2026, broadly in line with the estimated 3.3% in 2025 and slightly above earlier forecasts. This stability reflects a balance of forces across the global economy, where continued investments in technology and relatively accommodative financial conditions are helping offset trade policy headwinds, even as geopolitical developments create periodic volatility.

Across major economies, growth dynamics remain uneven. The United States continues to be supported by resilient domestic demand and investment momentum, while Europe faces relatively slower expansion amid cost pressures and structural constraints. In Asia, large economies such as China and India remain pivotal to global growth, supported by domestic consumption and policy measures, although external volatility and trade developments may influence near-term performance.

According to IMF estimates, the two economies together are expected to contribute around 43.6% of global real GDP growth in 2026, with India accounting for nearly 17% and China about 26.6% of incremental global expansion. Nevertheless, the outlook remains subject to evolving global conditions, including commodity price volatility, trade realignments and financial market movements.

Key factors shaping the global economic landscape

Easing inflationary pressures

Global headline inflation is projected to moderate further in 2026, declining to about 3.8%, down from an estimated 4.1% in 2025. Continued easing in energy and commodity prices, along with softer demand pressures across several regions, supports this moderation. By 2027, global inflation is expected to ease further toward 3.4%. However, ongoing geopolitical tensions, particularly instability in the Middle East, remain key risks to this trajectory and may further push up inflation.

Policy support across major economies

Policy frameworks across major economies remain broadly supportive, though increasingly calibrated. Central banks are balancing growth support with inflation management, in a more measured approach to monetary easing. Fiscal interventions, particularly in emerging markets, continue support demand and cushion the impact of external shocks.

Emerging market demand and structural growth

Emerging market and developing economies are projected to grow faster than advanced economies, supported by strong domestic demand, favourable demographics and rising investment levels. Expanding consumer markets across Asia, Africa and Latin America are driving growth in sectors such as manufacturing, services, infrastructure and consumption oriented industries. However, these economies remain sensitive to global financial conditions, currency and commodity price fluctuations, which may influence growth stability.

Supply chain resilience

Global supply chains have become more robust compared to the disruptions witnessed during the pandemic, driven by greater diversification and stronger logistics infrastructure. Nevertheless, recent energy-related disruptions and elevated transportation costs have reiterated the structural vulnerabilities within supply networks, reinforcing the need for ongoing resilience-building initiatives across industries.

Technology investment and productivity gains

Investment in technology and digital capabilities continues to support global economic resilience. Advances in digital infrastructure, automation, artificial intelligence and related technologies are enabling productivity improvements, supporting business investment and facilitating new operating tomodels across industries. These developments are helping offset slower growth in traditional sectors and sustain economic activity.

Outlook

The global economic outlook remains constructive, supported by structural drivers such as digitalisation, technology-led investments and resilient domestic demand across key economies. However, the near-term trajectory is increasingly - influenced by geopolitical developments and disruptions in energy markets, which have introduced heightened macroeconomic uncertainty. Elevated energy prices are exerting upward pressure on inflation while weighing on real incomes, consumption and investment, leading to a moderation in global growth from earlier expectations, even as underlying fundamentals remain intact.

Policymakers are navigating a more complex environment, balancing inflation control with growth support, which may result in tighter financial conditions and evolving liquidity dynamics. The duration of energy supply disruptions will remain a critical determinant of the outlook while a short-lived shock could enable gradual stabilisation, a prolonged disruption may amplify cost pressures and downside risks to growth. Overall, the global economy is expected to sustain positive momentum, with increasing emphasis on resilience, supply chain security and operational adaptability in a more volatile environment.

Indian Economic Review

Indias economy continues to demonstrate strong underlying momentum, supported by resilient domestic demand, policy support and structural growth driveRs.Economic activity remained robust through 2025-26, driven by consumption-led growth, improving financial conditions and sustained government interventions. However, evolving global uncertainties and energy market disruptions have introduced near-term risks, moderating the pace of expansion while leaving the medium-term growth trajectory intact. According to the Economic Survey 2025-26, real GDP growth for 2025-26 is estimated between 6.8-7.2%, while Gross Value Added (GVA) is projected to expand by 7.3%. This performance reflects the economys resilience despite a challenging external environment.

Domestic demand continued to serve as a key growth driver. The share of private consumption expenditure in GDP increased to 61.5%, indicating sustained demand strength. Rural consumption remained supported by robust agricultural performance, while urban demand benefited from tax rationalisation and rising disposable incomes.

Inflation trends also remained favourable, with average headline inflation at around 1.7% during April-December 2025, supported by relatively stable food and fuel prices. Indias external position stayed strong, with foreign exchange reserves rising to USD 701.4 billion as of 16 January 2026,

India Retains Strong Growth Momentum, Expected to Grow By 6.8 - 7.2% In 2026-27

(Source: Government of India - Economic Survey 2025-26 and Press Information Bureau (PIB) ) compared with USD 668 billion in March 2025. This provided import cover of about 11 months, strengthening resilience against external volatility.

However, India remains exposed to external vulnerabilities, particularly due to its dependence on energy imports. significant share of crude oil requirements is sourced from global markets, making the economy sensitive to price fluctuations. Elevated energy prices could exert pressure inflation, fiscal balances and consumption. Additionally, financial conditions may influence capital flows, stability and investment sentiment in the near term.

Union Budget 2026 27: Implications for the

Packaging Industry

The Union Budget 2026 27 reinforces the Governments focus on infrastructure, manufacturing growth, and sustainability, with capital expenditure increased to 12.2 lakh crore to strengthen logistics and industrial ecosystems. Continued support for sectors such as food processing, pharmaceuticals, onand e-commerce key end-use industries for packaging signals sustained demand for packaging solutions. At the same time, policy emphasis on recycling, waste management, and circular economy practices aligns with the industrys shift toward sustainable and resource-efficient packaging, creating opportunities for innovation in recyclable and environmentally responsible materials.

Key Growth Drivers

Broad-Based Domestic Demand

Consumption and investment continued to anchor growth 2025-26. Private consumption remained robust, reflecting rising real incomes, urban demand recovery and sustained rural spending. Investment activity was supported by strengthening gross fixed capital formation, with investment share remaining above pre-pandemic averages.

Government Capital Expenditure and Policy Support

Public investment continued to act as a crowding-in mechanism, stimulating private investment and infrastructure development. Union Budget priorities for 2026-27 increased capital expenditure to Rs.12.2 lakh crore, signalling sustained support for long-term productive capacity and connectivity improvements

Agricultural Recovery and Rural Demand

A strong performance in agriculture enhanced rural incomes and helped consolidate private consumption demand. Foodgrain production recorded increases, supporting food security and rural purchasing power.

Services and Export Expansion

inServices exports reached record levels, driven by strong IT and financial services performance, reinforcing Indias position in global services trade and contributing to overall GVA growth. Exports of value adding goods from India has increased, driven by ongoing trade discussions, as well as impact of tariffs across various countries on global supply chains.

Macroeconomic and Financial Stability

Stable price conditions, supported by low inflation and supportive monetary policy, strengthened real purchasing power and investment sentiment. Financial soundness indicators such as declining non-performing asset ratios and robust external reserves enhanced resilience. .

Outlook

Looking ahead, the Indian economy is expected to sustain its growth momentum, supported by strong structural fundamentals, favourable demographics and continued policy reforms. Robust domestic demand, sustained public infrastructure spending and improving private investment sentiment are expected to provide a stable foundation for expansion, even as near-term growth may remain influenced by global uncertainties and movements in commodity prices.

Inflation is likely to remain within a manageable range, although periodic-side factors cannot be ruled out. Policymakers are therefore expected to maintain a calibrated approach that supports growth while preserving price stability, ensuring adequate liquidity and safeguarding financial stability across the system.

At the same time, evolving geopolitical developments, particularly in the Middle East, may introduce a degree of uncertainty around global energy prices, supply chain continuity, inflation trajectory and external demand conditions. While Indias macroeconomic fundamentals remain resilient, the potential implications of these developments will become clearer as the situation evolves. The above assessment is based on information currently available, and the outlook will continue to be shaped by both domestic policy support and global economic developments.

Global packaging industry

The global packaging industry is a large and strategically important segment of the global economy, serving diverse end-use industries including food & beverage, pharmaceuticals, consumer goods and e-commerce. The sector continues to demonstrate steady and resilient growth, supported by its indispensable role across these value chains.

The global packaging market is estimated at USD 1.22 trillion in 2026 and is projected to grow to USD 1.44 trillion by 2031, registering a CAGR of 3.42% during 2026-2031. This expansion reflects the industrys ability to absorb rising regulatory and sustainability-related costs while maintaining relevance through innovation, scale efficiencies and evolving material solutions.

Packaging Market

(Market Size in USD Trillion)

Asia-Pacific remains both the largest and fastest-growing regional market, accounting for 39.72% of global market share in 2025. This position is supported by high manufacturing density, expanding consumer markets and increasing export-orientedproduction.

While mature markets continue to invest in advanced recycling, mono-material formats and digital printing technologies, emerging markets particularly in Asia-Pacific are driving growth through scale manufacturing, cost competitiveness and rising consumption of packaged goods.

Flexible Packaging Segment

Flexible packaging continues to dominate the global packaging landscape, accounting for 53.8% of total market revenue in 2025. Flexible formats are projected to grow at a CAGR of 4.16% through 2031, outpacing rigid packaging due to advantages such as lower material consumption, reduced transportation costs and greater suitability for e-commerce logistics.

Packaging Market

(Market Share by Packaging Format, 2025)

Growth Drivers

Demand from End-Use Industries

Growth in packaged food & beverages, pharmaceuticals, personal care, and especially e-commercecontinues to drive demand for innovative, protective and consumer-packaging solutions. The shift toward convenience formats and greater product differentiation reinforces the need advanced packaging designs.

Sustainability-Linked Purchasing Commitments

Corporate sustainability mandates are increasingly shaping packaging procurement decisions. Brand owners are specifying minimum recycled content, recyclability and carbon-reduction metrics within supplier contracts, directly influencing material selection and innovation. Sustainability-linked purchasing commitments contribute approximately +1.0% to overall market CAGR, as companies invest in mono-material films, bio-based resins and advanced recycling technologies to comply with evolving circular-economy regulations.

Shift Toward Mono-Material and Recyclable Packaging

Regulatory bans on non-recyclable and multi-layer plastic structures are accelerating the transition toward mono-material packaging formats. Retailers and brand owners are increasingly adopting recyclable polyethylene and polypropylene films that simplify waste collection and reprocessing. This transition is estimated to add approximately +0.5% to CAGR, particularly in Europe and North America, where regulatory enforcement and EPR frameworks are most stringent. Indian units of multinational consumer goods companies are expected to adopt similar packaging norms.

Regulatory Pressure on Single-Use Plastics

Global and regional regulations targeting single-use plastics are compelling packaging manufacturers to develop alternative materials and formats. Regulatory bans are estimated to contribute approximately +0.7% to market CAGR over the long term, as companies invest in paper-based, compostable and recyclable plastic solutions to maintain compliance while preserving functional performance.

Digital Printing and On-Demand Customisation

The adoption of on-site digital printing and short-run customisation capabilities enables faster SKU launches, reduced inventory holding and improved brand differentiation. Mordor Intelligence estimates that digital printing adoption contributes around +0.4% to CAGR, particularly in developed markets where product variety, personalization and speed-to-market are critical competitive factors.

(Source: Mordor intelligence)

Challenges

Raw Material Cost Volatility	Regulatory and Sustainability	Supply Chain Constraints
Fluctuations in prices of plastics, paper, aluminum and other feedstocks can compress margins, particularlyfor restrictions onsingle-useplasticsand seen during recent global disruptions companies without effectivehedging non-recyclable materials, operational or supply-chain flexibility.	Compliance As global jurisdictions tighten pose inventory planning and adaptation andcompliancecostscan fulfillment increase, especially for manufacturers with legacy processes.	Disruptions in logistics, container shortages and port congestion as

Outlook

The long-term outlook for the global packaging industry remains robust, supported by structural drivers such as urbanisation, digital commerce penetration, technological innovation and ongoing sustainability imperatives. Flexible packaging, which already represents a majority share of revenue, is forecast to grow at a higher rate than the overall market, driven by cost advantages, e-commerce needs and sustainability trends.

Continued investment in materials innovation, across manufacturing and supply chains, and sustainability strategies will be central to competitive positioning value creation.

(Source: Mordor intelligence)

Indian packaging industry

The Indian packaging industry represents a critical pillar of the countrys consumption-led manufacturing ecosystem, supporting sectors such as food & beverages, pharmaceuticals, personal care, consumer durables and e-commerce. Structural drivers such as urbanisation, rising disposable incomes, increasing penetration of organised retail and the rapid expansion of digital commerce continue to drive demand for packaged products across formats and materials.

The Indian packaging market was valued at USD 101.12 billion in 2025 and is projected to reach USD 169.73 billion by 2030, growing at a robust CAGR of 10.73% during 2025-2030. This growth reflects the industrys gradual transition from commodity-led packaging toward more technology-enabled and sustainability-aligned solutions.

Extended Producer Responsibility (EPR) regulations are also accelerating structural change. Mandatory requirements for recycled content in rigid plastics 30% by 2025, rising to 60% by 2029 are reshaping material sourcing, packaging design and supplier partnerships. This regulatory shift is encouraging backward integration, partnerships with recyclers and investments in food-grade recycled polymers.

Flexible Packaging Segment

Flexible packaging led the Indian packaging market with a 54.32% share, supported by advantages such as material efficiency, logistics optimisation and suitability for high-consumer goods. Flexible formats are projected to grow at a CAGR of 11.51% through 2030, outpacing rigid alternatives as brands increasingly prioritise lightweight and recyclable packaging solutions.

Key Growth Drivers

Quick-Commerce and Urban Fulfilment Models

The rapid adoption of 10-30 minute delivery models in Tier-1 cities is redefining packaging performance requirements Demand is shifting toward hybrid packaging solutions that provide cushioning, insulation and tamper evidence within compact delivery formats. This trend is estimated to contribute +2.1% to market CAGR, with spillover effects into Tier-2 cities as last-mile infrastructure scales.

Regulatory Push Toward Recycled Content (EPR)

Government-mandated Extended Producer Responsibility (EPR) norms are accelerating adoption of recycled polymers and paperboard, particularly in early-compliance states such as Maharashtra, Gujarat and Tamil Nadu. This regulatory transition is contributing +1.8% to CAGR, while also encouraging backward integration, supplier sourcing agreements.

Rural Consumption and Ready-to-Eat Penetration

Rising rural incomes, improving road connectivity and increasing access to packaged foods are expanding demand for flexible pouches with strong barrier properties. in ready-to-eat and ambient food categories is estimated to contribute +1.2% to long-term CAGR, supporting sustained volume expansion beyond urban centres.

E-Commerce Expansion

Indias e-commerce market is expected to become the third-largest globally by 2030, significantly boosting demand advanced, customised packaging solutions. Rapid digital adoption, rising internet penetration and a convenience-consumer base are driving demand for lightweight, durable and tamper-proof packaging that ensures product safety while optimising logistics and fulfilment costs.

Rising Middle-Class Consumption and Premiumisation

The expanding middle-class population and rising disposable incomes are shifting consumer preferences toward premium, well-packaged products, particularly in food and beverages Increasing focus on convenience, hygiene and shelf life is driving adoption of high-barrier materials, resealable formats and portion-controlled packs, positioning packaging as a brand differentiator.

Technological Innovation and Smart Packaging

Accelerated innovation in bio-based polymers, high-barrier films and nanotechnology is enhancing packaging performance while reducing environmental impact. Simultaneously, smart packaging solutions including RFID tracking, QR-based traceability and intelligent freshness indicators are gaining traction in food and pharmaceutical applications, improving supply-chain transparency, compliance and consumer engagement.

Challenges

Policy Uncertainty from State-Level Plastic Bans

Intermittent and uneven implementation of single-use plastic bans across states is impacting investment visibility and capacity planning, particularly for flexible and rigid plastic segments. This regulatory variability is estimated to exert a ~-1.3% drag on CAGR, as converters balance compliance costs with demand continuity.

Fragmented Converter Base

A highly and long-term fragmented industry structure constrains the pace of automation, digitalisation and recycling integration, especially among small and mid-sized playeRs.Limited access to capital and scale efficiencies is estimated to impact growth by ~-0.9%, reinforcing the need for consolidation and capability-led expansion.

(Source: Mordor intelligence)

Outlook for

The Indian packaging industry is expected to sustain strong double-digit growth, supported by consumption expansion, e-commerce penetration and a regulatory-led shift toward sustainable packaging solutions. Flexible packaging, paperboard formats and e-commerce-driven applications are likely to remain the primary growth engines. As the industry consolidates, companies that invest in recycling integration, automation and performance-driven packaging capabilities are expected to gain competitive advantage, while scale, compliance readiness and innovation will increasingly define long-term value creation.

Growing Downstream Sectors

The food industry accounted for 48.5% of Indias packaging market, underscoring its role as the primary anchor for packaging demand, while the remaining 51.5% was contributed by beverages, e-commerce, pharmaceuticals, other industrial end-use segments, reflecting diversified demand base

Food & Beverage

Food and beverages remain the largest and most stable downstream opportunity for the packaging industry, driven by rising consumption of packaged snacks, staples, dairy and ready-to-eat products. Growth is increasingly skewed toward high-barrier flexible packaging, aseptic cartons and portion-controlled formats, supporting convenience. According to Mordor Intelligence, the India food and beverage packaging market was valued at USD 38.27 billion in 2025 and is projected to grow at a CAGR of 6.44% during 2026-2031, providing sustained volume visibility for packaging manufacturers.

(Source: Mordor Intelligence - Indian food and beverage packaging market)

E-Commerce and Quick-Commerce

E-commerce represents the fastest-growing downstream opportunity, reshaping packaging demand toward lightweight, durable and tamper-evident solutions optimised for last-mile delivery. Growth in quick-commerce and return-ready logistics is increasing demand for right-sized corrugated boxes, flexible mailers and protective cushioning systems. The India e-commerce packaging market was valued at USD 3.75 billion in 2025 and is forecast to grow at a CAGR of 12.48% through 2031, significantly outpacing overall packaging market growth

(Source: Mordor Intelligence -Indian e-commerce packaging market)

Pharmaceuticals and Healthcare

Indias pharmaceutical sector offers a high shelf life,safetyand driven growth opportunity for packaging playeRs.Rising domestic healthcare consumption and strong export momentum are driving demand for blister packs, bottles, vials, ampoules and secondary cartons, alongside increasing adoption of traceability and tamper-evidence features. Packaging demand in this segment benefits from stringent regulatory requirements and relatively lower price sensitivity, supporting margin stability.

(Source: Mordor Intelligence -- Indian

Packaging Market)

Personal Care and FMCG

The personal care and FMCG segment is evolving toward premiumisation and brand differentiation, for aesthetically enhanced and functional packaging solutions. Growth in urban consumption and rising middle-class incomes are increasing demand for dispensing formats, resealable packs and visually differentiated packaging, care, home care and hygiene categories. Packaging plays a . central role in brand positioning and consumer engagement in this segment.

(Source: Mordor Intelligence -- Indian packaging-industry )

Financial and Operational Performance

Revenue and Profitability

In 2025, Huhtamaki Indias revenue from at Rs.24,694.1 million (net of GST), compared to Rs.25,211.8 million in 2024, reflecting a stable revenue performance amid a challenging cost and demand environment.

EBITDA (before exceptional items) for 2025 was Rs.2,260.4 million, compared to Rs.1,509.9 million in 2024. EBITDA performance was influenced by raw material price trends and product mix with margin movement reflecting the combined impact of cost pressures and pricing actions.

The average Return on Equity (RoE) for 2025 stood at 9.5 %, compared to 7.5% in 2024, aligned with changes in profitability and capital efficiency during the year.

As of 31 December 2025, the Companys market capitalisation was Rs.15,988 million, compared to Rs.20,663 million as of 31 -December 2024.

Revenue Trend

Revenue from Operations

Year	Revenue from Operations
2021	26,252.8
2022	29,829.2
2023	25,494.4
2024	25,211.8
2025	24,694.1

EBITDA and Profit After Tax

EBITDA: Operating profit (EBITDA) before exceptional items in 2025 stood at Rs.2,260.4 million, reflecting a increase compared to 2024, driven by input cost movements, sales mix and operating leverage. opportunities PAT: Profit after tax in 2025 was Rs.1,181.6 million, compared to Rs.879.7 million in 2024. Year-on-year movement reflects operational performance and the impact of exceptional items, in skin relative to the prior year.

Earnings and Shareholder Returns

EPS: Earnings per share (excluding exceptional items) for stood 2025 stood at Rs.15.56, compared to Rs.8.51 in 2024, reflecting changes in profitability.

Dividend: The Board declared a dividend of Rs.2 per equity share of face value Rs.2 each for 2025 (2024: Rs.2 per equity share).

Reserves, Capital Expenditure and Asset Base

Reserves and Surplus: As at the end of 2025, reserves and surplus stood at Rs.12,784.2 million, compared to Rs.11,784.4 million in 2024, supported by retained earnings. Capital Expenditure: Capital expenditure during 2025 amounted to Rs.558.1 million, focused on capacity optimisation, efficiency improvement and maintenance.

Fixed Assets: Fixed assets as at the end of 2025 were Rs.6387.6 million, compared to Rs.6,378.9 million as at the end of 2024.

Debt, Working Capital and Returns

The Company maintained a prudent balance sheet position. As of 31 December 2025, gross debt stood at Rs.1014.7 million, compared to Rs.1,014.7 million as of 31 December 2024, reflecting continued focus on liquidity management.

Particulars( Rs.million)	2024	2025
Inventory	2,502.2	2,056.9
Debtors	5,703.9	5,537.2
Current liabilities	5,771.8	5,475.6
Loans and advances	761.8	744.5
Cash flow from operations	1,423.4	2,378.1
RoE (%)	7.5%	9.5%
RoCE (%)	8.0%	12.5%

Key Financial Ratios

Ratio	2024		Explanation for significant change (>25%) 2025
Current Ratio	2.1	2.4	N.A.
Debtors Turnover Ratio	4.4	4.3	N.A.
Inventory Turnover Ratio	9.4	10.5	N.A.
Debt-Equity Ratio	0.1	0.1	N.A.
Debt Service Coverage Ratio	1.2	11	The increase primarily on account of earning available to debt service in current year and reduction in total borrowings in previous year.
Net Profit Ratio (%)	3.5%	4.8%	Primarily due to profit .higheroperational
Return on Net Worth (%)	7.5%	9.5%

Risk Management

Huhtamaki India follows a comprehensive and forward-looking risk management framework, embedded into its strategic planning, operational execution and decision-making processes Risk oversight is provided by the Risk Committee, which operates in alignment with the Huhtamaki Group Enterprise Risk Management (ERM) Policy. The Committee periodically reviews the risk landscape, evaluates potential impacts on business objectives and oversees mitigation actions to resilience, compliance and sustainable value creation.

The Company recognises that the operating environment is increasingly complex, where macroeconomic uncertainty, regulatory transitions, technological disruption and evolving . customer expectations intersect. Effective risk management, therefore, is not limited to mitigation but also focuses on anticipation, preparedness and opportunity identification.

Macroeconomic Risks

Global economic volatility, geopolitical tensions and external disruptions can impact raw material availability, energy costs, logistics and customer demand. Events such as geopolitical conflicts and supply chain shocks have reinforced the importance of operational flexibility and sourcing resilience.	Mitigation Measures
	• Continuous monitoring of global economic and geopolitical developments
	• Diversified sourcing and supplier base across geographies
	• Flexible operating and procurement strategies to manage volatility
	• Scenario planning and inventory buffers for critical inputs

Regulatory Risks

The packaging industry is subject to rapidly evolving regulations related to material bans, Extended Producer Responsibility (EPR), recycled- content mandates and environmental compliance.	Mitigation Measures
	• Early tracking of regulatory developments and policy direction
Inconsistent implementation across states and accelerated timelines may affect product formulations, supply chains and investment planning.	• Active engagement with regulators and industry bodies through evidence-based advocacy
	• Integration of sustainability into product design and material innovation
	• Alignment of product roadmaps with customer-specific ESG targets
In parallel, customer-led sustainability commitments often move faster than regulation, increasing the risk of misalignment with customer expectations.

Concentration Risks

An increasingly competitive market, coupled withMitigation Measures dependence on select large customers, may impact pricing power and revenue stability. Rapid shifts in consumer preferences and packaging formats further intensify competitive pressure.	• Diversification across customers, end-use segments and applications
	• Continuous customer engagement and co-creation of solutions
	• Focus on value-added, performance-driven and compliant packaging offerings
	• Leveraging Group capabilities and best practices to strengthen differentiation

Operational and Financial Risks

Volatility in raw material prices, energy costs and freight rates may affect margins and cash flows. •	Mitigation Measures
	Long-term contracts and pricing mechanisms to manage cost volatility
Operational inefficiencies or disruptions can impact service levels and profitability.	• Continuous improvement initiatives to enhance operational efficiency
	• Strong working capital discipline and liquidity management
	• Use of market intelligence to anticipate and respond to cost movements

Technology Risks

Rapid advancements in packaging materials, recycling technologies and smart packaging solutions create the risk of technology obsolescence if adoption lags industry trends. Delayed investments may lead to competitive disadvantage or higher future capital costs.	Mitigation Measures
	• Continuous investment in R&D, automation and digitalisation
	• Strategic partnerships with material suppliers and technology providers
	• Ongoing benchmarking against global best practices within the Group
	• Protection of intellectual property through patents and trade secrets

Human Capital Risks

The ability to attract, develop and retain skilled talent,Mitigation Measures particularly in technical, operational and leadership

• Structured talent development and leadership succession programmes roles, is critical to long-term performance. Talent shortages may impact productivity, innovation and• Competitive compensation, benefits and employee engagement initiatives succession planning.

• Focus on diversity, equity and inclusion to widen the talent pool

• Learning and capability-building aligned with future skill requirements

Cybersecurity Risks

Increasing digitalisation and reliance on data-driven systems expose the Company to cybersecurity threats, data breaches and compliance risks. Non- compliance with legal, regulatory or ethical standards may result in financial penalties, reputational damage and operational disruption.	Mitigation Measures
	• Strengthened IT security architecture and access controls
	• Regular cybersecurity audits, system testing and compliance reviews
	• Robust internal controls and governance frameworks
	• Employee awareness and training on cyber hygiene and ethical conduct

Climate-Related Risks

Packaging operations are energy-intensive, and volatility in energy availability or pricing may impact operating costs. Additionally, the transition toward lower-carbon operations requires careful capital planning.	Mitigation Measures
	• Energy-efficiency initiatives and process optimisation
	• Gradual transition to renewable energy sources where feasible
	• Long-term energy sourcing strategies to manage price volatility

ESG and Reputational Risks

Environmental impact, social responsibility and governance practices play a critical role in shaping stakeholder trust and brand reputation.	Mitigation Measures
Failure to meet ESG expectations may affect customer relationships, investor confidence and regulatory standing.	• Integration of ESG considerations into strategy, operations and product development
	• Active engagement with customers, communities, suppliers and regulators
	• Transparent reporting of ESG initiatives, targets and progress

Focus Areas for 2026

In 2026, Huhtamaki India will continue to build on its strategic foundations while sharpening execution across sustainability, innovation, operational excellence and people development. The focus areas reflect the Companys intent to strengthen resilience, improve profitability and reinforce its leadership in sustainable packaging.

Accelerated profitable growth

Growth will be driven through innovation, stronger customer partnerships and expansion across high growth end use segments such as food, beverages, quick commerce and e commerce. The Company will focus on commercially viable sustainable packaging solutions including recyclable mono material structures and lightweight designs, while strengthening relationships with existing customers solution co development and value added offerings.

The Company will continue to invest in automation, digitalisation and data-driven decision-making to improve operational visibility, quality consistency and cost control.

Technology adoption will support scalability, traceability and faster response to customer and regulatory requirements.

Disciplined capital allocation

Capital allocation will remain focused on return driven investments across organic growth, innovation and operational efficiency. Investments will prioritise sustainability linked initiatives, process improvements and critical maintenance, while maintaining a strong balance sheet, prudent liquidity and disciplined return thresholds.

Accountability and execution

Operational excellence will remain central to execution, with initiatives focused on margin recovery, cost competitiveness and productivity improvements. The Company will continue to strengthen process optimisation, waste reduction, yield improvement and plant utilisation, supported by lean manufacturing practices, digital tools and empowered business teams working with strong functional expertise.

Human Resources

During 2025, Huhtamaki India continued to strengthen its people-first operating model, drawing on Huhtamaki Groups global practices in safety, capability building and inclusive leadership. Employees remain the cornerstone of business performance, particularly in a manufacturing-led organisation where safety, operational discipline and technical capability directly influence customer outcomes.

Safety and Culture

Safety remained the Companys foremost priority in 2025, aligned with Huhtamaki Groups zero-harm ambition. Structured safety leadership, shopfloor engagement and standardised safety practices across plants reinforced a culture where safety is embedded into daily operations rather than treated as a compliance requirement.

The Companys values of Care, Dare and Deliver continued to guide behaviours, decision-making and leadership conduct, ensuring consistency across functions and locations.

Performance, Capability and Rewards

In line with Huhtamakis global performance philosophy, Huhtamaki India continued to strengthen a structured and transparent performance culture in 2025. Enhancements to performance management systems ensured clearer goal setting, differentiated rewards and consistent recognition of high performance.

Reward and recognition frameworks were aligned with both individual contribution and collective outcomes, reinforcing accountability, collaboration and continuous improvement critical enablers in a cost- and quality-sensitive packaging environment.

Diversity, Equity and Inclusion

DEI remained a strategic priority during the year, supported by Group-wide inclusion principles. Huhtamaki India focused on improving gender diversity in manufacturing roles, supported by infrastructure upgrades, policy interventions and equitable access to opportunities.

Initiatives such as I-WIN, Between Us and Coffee continued to strengthen open dialogue, leadership accessibility and trust, contributing to a more inclusive and engaged workplace.

Engagement and Employee Experience

Employee engagement in 2025 benefited from strong leadership connect, structured communication forums and recognition platforms. Outcomes from the WTW engagement survey continued to exceed industry benchmarks, reflecting between employee expectations and organisational practices

Learning, Development and Well-being

Consistent with Huhtamaki Groups emphasis on lifelong learning, the Company invested in technical, behavioural and leadership capability building. Programmes such as the Global Week of Learning, functional skill development and leadership interventions strengthened organisational depth.

Employee well-being was supported through counselling services, wellness initiatives and recognition platforms such as the Quarterly Sampark Programme, reinforcing a holistic approach to performance and resilience.

Acknowledgement of Support from Huhtamaki Group

During 2025, Huhtamaki India continued to derive significant strategic and operational advantage from the support of Huhtamaki Group, reflecting the strength of operating within a globally integrated organisation.

Support from Global Key Account Management enabled improved demand visibility, centralised planning and optimal utilisation of manufacturing capacity. This strengthened order book stability, enhanced customer service levels and enabled clearer commercial frameworks particularly critical in food and FMCG segments where predictability and reliability are key.

Group-led capabilities around operational excellence continued to deepen operational maturity in 2025. These initiatives drove measurable improvements in productivity, waste reduction, energy efficiency, solvent efficiency and cost optimisation, aligning Indian operations with global manufacturing benchmarks.

Commercial Excellence initiatives supported pricing discipline, portfolio rationalisation and margin improvement, including the elimination of structurally unprofitable business. Enhanced negotiation capability and value-based pricing frameworks supported recovery of volumes while protecting profitability.

Access to Huhtamaki Oyjs innovation platforms, material expertise and technology ecosystems enabled Huhtamaki India to accelerate development of recyclable and sustainable packaging solutions, aligned with Group sustainability commitments and evolving customer expectations.

During the year, Huhtamaki India continued to benefit from Group-led IT standardisation, cybersecurity strengthening and digital governance, alongside transformation initiatives such as shopfloor digitalisation, data services, ERP transformation and structured transformation management. These initiatives enhanced transparency, control and decision-making agility. .

Internal Controls

Huhtamaki Indias internal financial control framework remained robust and effective, aligned with Huhtamaki Group governance standards. Controls were designed to ensure accuracy of financial reporting, compliance with applicable laws, safeguarding of assets and disciplined execution of transactions.

The Audit Committee continued to oversee the control environment through regular interactions with management, internal auditors and statutory auditoRs.Based on periodic reviews, the internal control systems were assessed to be adequate and operating effectively.

The independent internal audit function operated under a risk-based audit framework, supported by a reputed external firm. Audit plans were reviewed annually, with structured follow-up on corrective actions, ensuring continuous strengthening of the control environment.

Cautionary Statement

This report contains forward-looking statements based on managements current expectations and assumptions. Such statements involve inherent risks and uncertainties, and actual outcomes may differ materially due to changes in economic conditions, regulatory developments, market dynamics and other external factoRs.The Company undertakes no obligation to update these statements, except as required by law.