JK Paper Ltd Management Discussions

JK Paper Limited

JK Paper, Indias prominent integrated wood-based paper and packaging solutions company, with a presence across Office Paper, Paperboards, Corrugated Boxes, Monocartons & Labels, Animal Nutrition and Defence Electronics, has developed several flagship brands and earned widespread recognition for quality products, reliable service and a compelling price-value proposition, thereby reinforcing its reputation as a trusted industry leader. With an export presence spanning more than 60 countries, the Company has established a global footprint and continues to strengthen its position across international markets. As a diversified business, the Company remains well-positioned to utilise multiple growth opportunities while embedding ESG principles into its core strategy framework. Guided by a robust commitment to responsible resource management and community stewardship, JK Paper continues to focus on sustainable growth and long-term value creation reforming its Vision of Enriching Lives.

In 2025, the Global economy recorded GDP growth of 3.4%, led by Emerging Market and Developing Economies (EMDEs), which sustained stable growth supported by stronger net exports, particularly in China and higher investment activity. Advanced economies expanded by 1.9%, primarily driven by AI-related investments in the US. Global inflation remained elevated at 4.1%. Simultaneously, global trade policies increasingly reflected geopolitical and security considerations, rather than efficiency-driven principles and established multilateral frameworks. Global economic activity also came under additional pressure following the outbreak of war in the Middle East.

The closure of the Strait of Hormuz and significant damage to critical production and infrastructure facilities triggered an unprecedented energy crisis. In this evolving environment, policy responses by governments across the world will remain critical in addressing emerging macroeconomic challenges in the years ahead.

Given the evolving situation in the Middle East, a prolonged disruption could adversely impact global growth through elevated energy prices, supply chain dislocations and tighter financial conditions. Reflecting on the prevailing uncertainty, the IMF has outlined a range of scenarios regarding the potential evolution of the conflict.

In the event of a severe downside scenario, global growth could moderate to around 2% or lower, bringing the world economy close to a worldwide recession and marking only the fifth such instance since 1980.

Outlook

Global growth is projected to moderate to 3.1% in 2026 before edging up marginally to 3.2% in 2027. At the same time, inflation is expected to rise slightly to 4.4% in 2026 before resuming its downward trajectory the following year. However, risks arising from escalating geopolitical tensions and potential trade disruptions will severely impact the global growth.

IMFs Growth and Inflation Forecasts

Scenario	Forecasts		Assumptions
	GDP growth	Inflation	Crude oil	Gas	Food
Baseline	3.1%	4.4%	$80-85	<100%	Moderate
Adverse	2.5%	5.4%	$100	~160%	2.5%
Severe	2.0%	5.8%	$120-130	>200%	5-10%

Source: IMF World Economic Outlook, April 2026

Despite multiple global headwinds leading to heightened trade uncertainty and the imposition of elevated penal tariffs, the Indian Government responded to these challenges with calibrated policy interventions, accelerated deregulation and simplification of compliance requirements across sectors. In 2025-26, the Indian economy recorded a real GDP growth rate of 7.6%, reflecting resilient underlying momentum in economic activity. 1 Growth was supported by robust consumption and investment, aided by supportive policy measures, ongoing structural reforms and favourable financial conditions. This demand-led resilience was also mirrored on the supply side, with manufacturing activity strengthening significantly and emerging as a key contributor to economic resilience, while the services sector continued to drive overall economic growth.

A key statistical development during the year was the revision of Indias GDP series, with the base year updated to 2022-23 from 2011-12, incorporating structural shifts in the economy over the past decade. Consequently, previously reported GDP levels and growth rates were re-estimated. For instance, real GDP growth for 2023-24 has been revised to 7.2% under the new series, compared to 9.2% under the earlier series, while 2025-26 growth has been revised upward to 7.7%.

In terms of nominal GDP measured in US dollar terms, Indias position in the global economic rankings declined to sixth in 2025 from fourth earlier. This shift occurred despite India continuing to register one of the fastest growth rates among major economies. A stronger US dollar and the depreciation of the Indian rupee weighed on Indias nominal GDP in US dollar terms. Additionally, the downward revisions to historical GDP estimates under the revised base-year series also contributed to the change in ranking.

Indias manufacturing sector is undergoing a gradual transformation, supported by sturdy policy intent and industrial ambition. A major initiative is the Production Linked Incentive (PLI) scheme. With an incentive outlay of Rs. 1.97 lac crore and approvals across 14 strategic sectors, the scheme extends beyond a financial support mechanism. 2 It is supporting Atmanirbhar Bharat by scaling up domestic manufacturing capabilities and strengthening Digital India initiatives. On the external financing front, gross Foreign Direct Investment (FDI) recorded substantial growth, while net FDIshowed some moderation on higher repatriation. India continues to remain an attractive destination for greenfield FDI projects.

Outlook

Looking ahead, India is expected to sustain its growth momentum, with GDP projected to expand by 6.5%. 3 The Union Budget 2026-27 introduced the Karta vyas framewor k, placing emphasis on accelerating growth. The year 2026-27 is expected to witness a phase of adjustment as businesses and households respond to evolving conditions, even as demand and investment activity continue to strengthen. The Governments focus on scaling up domestic manufacturing across strategic and frontier sectors is also expected to support Indias medium- term growth trajectory.

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Indian economic review

On the demand side, private consumption in 2026-27 is expected to be supported by discretionary spending, with rural demand demonstrating resilience and urban consumption likely to strengthen further, aided by buoyant services sector activity and the anticipated benefits arising from GST rationalisation. At the same time, external risks remain elevated. While diversification of the energy supply mix has helped to manage disruptions, a prolonged Middle East conflict could exert pressure on the rupee amid a stronger US dollar, thereby increasing imported inflation risks that may weigh on purchasing power and overall demand. Additionally, fertiliser supplies adversely affected by the war could impact agricultural sector that is already challenged by deficient monsoon and El Nino risks.

Paper and paperboard Global

The global paper and paperboard market was estimated at approximately 435 million MT in 2025, remaining largely flat compared to 2024. Growth stood at around 0.4% in 2025, significantly lower than the 3.6% recorded in 2024, primarily due to heavy stocking during the previous year, driven by oversupply from APAC regions, particularly China and Indonesia.

With rising concerns over plastic pollution, consumers and corporations alike are increasingly shifting towards sustainable packaging solutions. This transition is reshaping the supply chain and influencing product design strategies, with paper and paperboard based solutions gaining preference owing to their recyclability, biodegradability and relatively lower environmental impact compared to plastics. Governments across the world also are reinforcing this transition through stringent environmental regulations, including bans on singleuse plastics, Extended Producer Responsibility (EPR) mandates, circular economy initiatives and incentives for eco-friendly packaging innovations. For example, the European Unions Packaging and Packaging Waste Directive, along with similar regulations across North America and parts of Asia, is compelling manufacturers to adopt greener materials and reduce waste generation.

In response, major corporations have announced public commitments towards sustainable packaging targets, further accelerating demand for recyclable packaging paper and paperboard.

The global Writing and Printing paper market is currently estimated at approximately 73 million MT in volume terms and is expected to decline at a CAGR of around 2% over the next few years due to continued e-media penetration and evolving consumption patterns. Mature markets such as North America and Europe are witnessing sharper declines compared to the Asia Pacific regions. However, in developing economies, despite increasing digitalisation, demand remains relatively resilient due to continued reliance by educational institutions and businesses on printed materials for textbooks, examinations, communication and record-keeping. Additionally, rising disposable incomes and improved access to education continue to support paper consumption.

The rapid expansion of e-commerce is also contributing to demand growth, as printed labels, invoices and packaging materials remain integral to supply chain operations. Growing environmental awareness is further driving the production and adoption of sustainable and recycled paper products, aligned with various green initiatives across the globe. Technological advancements in printing processes have further enhanced the quality and efficiency of printed materials, increasing demand for speciality paper grades.

In Paperboard, the market size is estimated at approximately 275 million MT, which is expected to grow at a CAGR of around 2% over the next few years. The Paperboard market is thriving due to substitution of plastics, proliferation of digital commerce, sustainability imperatives, technological innovation, sector-specific packaging needs and regulatory trends. Rising consumer awareness and stringent regulatory norms are driving a shift to eco-friendly packaging solutions. Growth across food, beverages, cosmetics, personal care and pharmaceuticals is also driving specialist board formats, especially for fresh, premium and ready-to-eat goods.

Indian

The Indian paper and paperboard market is estimated at approximately ~25 million MT in 2025-26 and is expected to grow steadily at around 6% over the next few years. India remains a high- growth market due to its low per capita consumption of approximately 15kg against the global average of about 57 kg, improving literacy levels, urbanisation and increasing preference for sustainable, paper-based packaging solutions.

The significant gap in per capita consumption highlights Indias strong long-term growth potential, particularly in packaging and hygiene segments, as consumption patterns evolve alongside economic development.

The Indian industry is structurally distinct from global peers, with significant dependence on recycled fibre and agroresidues, alongside limited availability of wood. This results in relatively higher fibre and logistics costs compared to low- cost regions such as Latin America and Indonesia. However, the industry benefits from growing domestic demand, import substitution opportunities and continued investments in capacity expansion and product innovation.

The Indian Writing and Printing (W&P) paper segment continues to remain an important component of the domestic paper industry, supported by structural demand from education, publishing and office stationery. Despite global trends of digital substitution, India has demonstrated relatively stable demand due to its large and growing population, rising literacy levels and continued dependence on physical learning materials. In 2025-26, the Indian W&P paper market comprises approximately 7 mn MT, accounted for nearly 30% of the total paper and paperboard demand in the country. The segment has been growing at a moderate rate of around 2-3% annually, which is lower than the overall industry growth but still positive compared to declining trends in developed markets.

In contrast, the Paperboard segment, accounting for approximately 65% of total industry volumes, is having robust growth of around 8%, supported by expansion across end-use industries such as FMCG, e-commerce, pharmaceuticals, along with food and beverages.

Rising consumption, urbanisation and the rapid growth of organised retail and online commerce have further accelerated demand for paperboard and speciality packaging grades. In addition, export-oriented sectors such as agriculture and processed foods are contributing to increased demand for corrugated packaging.

Despite healthy demand fundamentals, the industry continues to face challenges arising from increasing wood costs, global uncertainty and increasing imports from China and Indonesia, driven by oversupply conditions, which are exerting pressure on profitability. Looking ahead, while the Indian paperboard market is expected to maintain its growth trajectory, supported by domestic demand and the shift from plastic to paper-based packaging solutions, it is likely to face challenges from low-cost imports.

Wood pulp

The global wood pulp market remains a critical component of the paper and paperboard industry, serving as a key raw material for paper and paperboard. Demand is currently being driven by paperboard and tissue segments, while demand for W&P continues to decline. In recent years, substantial capacity additions have led to periods of oversupply and price volatility, while sustainability requirements and increasing recycling trends have also influenced market dynamics.

In 2024, the market experienced heightened volatility due to supply disruptions, inventory fluctuations and new capacity additions, particularly from low-cost regions such as Latin America and Asia.

In contrast, 2025 witnessed relatively stable market conditions, albeit with slower growth momentum. Price volatility moderated during the year, although hardwood pulp prices increased recently, driven largely by higher wood and logistics costs rather than a demand- led recovery. Overall, prices remained within a relatively narrow range.

Despite ongoing global uncertainty, the market in 2025 is more balanced; however, growth remains modest as the industry continues to navigate weak demand recovery and persistent cost pressures.

Packaging conversion

The Indian Corrugation industry is estimated at 7- 8 million MT in 2024-25 and is expected to grow at a CAGR of 8-9%, reaching around 11-12 million MT by 2029-30.

The industry remains fragmented, with over 10,000 manufacturers, although capacity utilisation of approximately 65-70% is expected to improve through operational efficiency gains and ongoing industry consolidation. Key demand drivers include PLI-linked export growth across sectors such as electronics, auto components, apparel, solar and footwear, alongside a structural shift toward paper- based alternatives to EPS, bubble wrap and other plastic components among FMCG and e-commerce customers.

The Monocarton packaging segment is growing at 7-8% annually, with domestic demand projected to increase from 5-6 MT in 2024-25 to 7-8 MT by 202930. Growth is being driven primarily by the Food and Beverage sector, which accounts for nearly 30% of demand, along with increasing premiumisation across FMCG, pharmaceutical and QSR segments. Indias Free Trade Agreements (FTA) with the EU and USA are also expected to accelerate export demand in electronics, footwear, toy and apparels sector. The industry remains fragmented with existence of several local and regional players across geographies, though some consolidation is emerging.

Regulatory restrictions on single-use plastics and the rising adoption of recyclable packaging are structurally reshaping the industry landscape. Concurrently, reverse-auction procurement practices adopted by FMCG players are accelerating consolidation, intensifying price pressure and driving a shift toward automation and operational efficiency.

Animal health

Structural growth in global animal protein demand persisted through 2025. Poultry continued to lead as the most preferred protein, aided by competitive pricing, fewer trade barriers and favourable health positioning among consumers. Meanwhile, dairy consumption accelerated in parts of Asia and Africa, supported by sector commercialisation and government programmes aimed at improving productivity.

Global compound feed production reached 1.44 billion metric tonnes in 2025, growing at 2.9% YoY. 4 However, growth continued to be uneven and increasingly regionalised, driven by structural modernisation, productivity improvements and a shift from on-farm mixing towards industrial feed systems.

A defining feature of 2025 was the industrys resilience amid persistent pressures, as producers navigated persistent disease risks, including HPAI and African swine fever (ASF), volatile input markets, climate disruptions and geopolitical supply-chain dislocations, while still delivering net volume growth.

Latin America and Southeast Asia emerged as the most dynamic growth corridors for feed. Latin America further consolidated its position as a leading global protein export hub, with compound feed expanding by 2.8% and aquafeed surging by 11.4%. Southeast Asia witnessed herd rebuilding following ASF, with Vietnam, Thailand and Indonesia driving significant gains across poultry and swine segments.

India ranked among the fastest- growing major feed markets globally, recording 4.5% overall growth. Layer feed grew by 4.4%, reflecting rising egg consumption driven by greater 4

Outlook_2026_-_English.pdf

protein awareness and affordability. Aquaculture feed volumes expanded by approximately 5.5%, benefiting from increasing commercialisation of inland aquaculture. These structural drivers, combined with regulatory tailwinds arising from the phased removal of antibiotic growth promoters (AGPs), are creating a compelling and expanding addressable market for science-backed feed additive solutions.

Globally, the non-AGP feed additive segment is expected to sustain a CAGR of 7-8% over the decade, supported by both regulatory mandates and voluntary commitments by food companies and retailers to antibiotic- free supply chains. Key beneficiaries of this shift include science-backed categories such as non-AGPs, probiotics and direct-fed microbials, organic acids and acidifiers, phytogenics and botanical extracts, enzyme complexes and immunostimulants. However, these evolving regulatory requirements procurement processes, to strengthen domestic manufacturing and reduce import dependence. 8

The Company is the largest producer of Office and Communication paper in India, the second-largest player in Paperboard and the largest player in Corrugated Boxes. Its strong portfolio of paper brands includes JK Copier, JK Ultima, JK Tuffcote, JK Excel Bond, and the wide range of JK Aqua products, which enjoy strong market recognition across diverse customer segments. With the acquisition of Borkar Packaging Pvt. Ltd. During the year, JK Paper has emerged amongst as one of the top three players in the Monocarton segment. In addition, the Company has a presence across Speciality Papers, Labels, Animal Nutrition and Defence Electronics. have also intensified competition within the segment.

Defence electronics

The global defence industry is entering a structurally robust growth phase, driven by rising geopolitical tensions, NATO rearmament, the Russia-Ukraine war, Middle East instability, Indo- Pacific security concerns and rapid modernisation of warfare. Global military expenditure reached a record US$ 2.89 trillion in 2025, growing 2.9% in real terms, with the US, China and Russia accounting for over half of global spending. Europe grew fastest at -14%, while Asia and Oceania grew -8.1%, reflecting sustained modernisation across China, India, Japan, South Korea and Australia. 5

A significant shift in the defence industry is the increasing focus of spending from traditional platforms towards electronics-led, sensor-led and software- enabled capabilities. The global defence electronics market attained a market size

Uncoated writing-printing and specialty papers

The writing and printing (W&P) paper market faced significant headwinds during the year, with prices impacted by low-cost imports, high raw-material costs and aggressive pricing strategies adopted by agro-based paper mills. Consequently, printers and publishers increasingly shifted towards imported and agro-based paper, compelling wood-based manufacturers to undertake sharp price corrections in order to remain competitive.

Despite these pressures, JK Paper was able to maintain its volumes, supported by profound relationships with printers and publishers and a diversified product portfolio aligned to evolving market requirements. Successful conversion of large maplitho tenders also contributed to sustaining volumes. of US$ 185 billion in CY 2025, expected to grow to US$ 284.4 billion by CY 2034, led by radar, communication systems, electronic warfare, avionics, command- and-control, surveillance, missile electronics and sensor payloads. 6

Indias defence sector operates within a regulated procurement framework and is influenced by Government policy, budgetary allocations and strategic requirements. Over recent years, Indias defence budget has demonstrated a sustained increase. The total defence allocation increased from approximately ¥5.25 lac crore in 2022-23 to ¥6.22 lac crore in 2024-25 and further to ¥6.81 lac crore in 2025-26, representing steady nominal growth over the period. 7

Government policy has progressively increased the share of defence capital procurement earmarked for domestic industry and private sector. As per recent budgetary and policy announcements, approximately 75% of capital acquisition is reserved for Indian vendors, subject to eligibility and

The copier paper segment remained under pressure during 2025-26 due to elevated imports and intense competition among domestic mills. However, JK Paper leveraged its brand salience to maintain a price premium while continuing to deliver healthy volumes.

Paperboard

Despite a highly competitive paperboard market in India during the reporting year, JK Paper delivered reasonable growth in this segment. Imports also played a significant role in the first half of 2025-26, with import volumes averaging close to 30,000 tpm, before declining by nearly 50% in the second half following the introduction of the Minimum Import Price (MIP) policy. During the year, JK Paper successfully sold new products, such as aqueous- based grades and further strengthened

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its focus on value-added offerings.

The Company also enhanced service levels through market-proximate quick service centres and expanded its cutting network with the addition of centres in Delhi and Surat, taking the total number of centres to four. Nearly 25% of incremental nominations during the year were received directly from customers through the Key Account Management Programme (KAM). Robust and sustained relationships with converters and distributors also supported growth under challenging market conditions.

Coated paper

The coated paper segment underwent significant shifts during 2025-26.

New domestic entrants intensified competition and exerted sustained pressure on pricing. Import volumes also moderated as incremental domestic capacity entered the market, further influencing the supply-demand balance. As a result, prices remained under pressure throughout the year.

Corrugated boxes

Competitive intensity remained elevated in low-differentiation volume segments. However, customer diversification continued to progress, with new customers added across India, partially offsetting customer churn. The value- added portfolio demonstrated strong demand traction beyond commoditised FMCG categories, while early momentum in new vectors, such as high-gloss printing, large-format boxes along with the fruits and vegetables segment, reinforced the strategy of portfolio premiumisation and diversification.

Towards the end of 2025-26, geopolitical developments in West Asia increased disruption risks across key maritime corridors, including the Red Sea and the Suez Canal, leading to supply chain dislocations, exchange-rate volatility and higher input prices. These developments impacted global kraft paper availability and cost dynamics, thereby increasing the risk of margin volatility due to inherent lags in cost pass-through.

During 2025-26, the Corrugation Business recorded volume growth of 7.4%, broadly in line with GDP growth. Value increased by around12%, supported by calibrated pricing actions and a gradual improvement in product mix.

Monocarton and Labels During 2025-26, the Monocartons business delivered volume growth of 6.4%. Key priorities included consolidation of operating units, optimisation of customer and product mix and realising consolidation benefits following the acquisition of Borkar Packaging Pvt. Ltd. in October 2025. Capability enhancement initiatives, including the commissioning of a state- of-the-art printing line at Ahmedabad and an automatic rigid box machine in Chennai, strengthened the businesss ability to cater to high-quality print and premium packaging requirements.

These initiatives are expected to support margin improvement over the previous year through operating leverage, integration synergies and cost optimisation, despite prevailing input cost pressures. Integration of the acquired business progressed with a focus on procurement efficiencies, operational alignment and network optimisation.

While competitive intensity remained high in standard folding carton segments, the business maintained a balanced customer portfolio across FMCG and other end segments. The value- added portfolio, including speciality finishes and rigid boxes, recorded healthy traction, reinforcing the strategy of premiumisation and capability enhancement. West Asia geopolitical disruptions impacted Red Sea/Suez logistics and lifted raw material costs by around 10-15%. With pass-through delays, margins may remain volatile, especially under contracts.

Animal Health

Quadragen VetHealth Pvt Ltd, a subsidiary of JK Paper Ltd. serves as the groups specialised animal health and speciality chemical platform, focused on building leadership in high-potency veterinary therapeutics and nutritional additives. The Company is a global market leader in the production of Halquinol, a non-antibiotic antimicrobial and growth promoter recognised for its superior quality and purity compared to other global players.

It is engaged in sophisticated chemical synthesis and formulation of a diverse product portfolio. This portfolio includes gut health stabilisers, performance enhancers and specialised mineral supplements tailored for the poultry, swine, aqua and ruminant industries.

Headquartered in Bangalore,

Quadragen operates at the intersection of the speciality chemical and veterinary sectors, utilising advanced manufacturing processes to deliver mission-critical solutions. The company remains committed to excellence in chemical engineering and animal science, with a focus on addressing the growing global demand for safe and effective livestock productivity enhancers while upholding the highest standards of quality and regulatory compliance.

Defence Electronics

DELOPT, a division of JK Paper Ltd. serves as the groups advanced defence and electronics technology platform focused on building indigenous capabilities in electro-optics, infrared imaging, defence electronics, embedded systems, surveillance technologies and strategic manufacturing. The division is engaged in the development and integration of solutions such as thermal imaging systems, night vision devices, EO/IR payloads, UAV and airborne surveillance systems, ruggedised electronics, FPGA- based systems, thermal weapon sights, border surveillance solutions and other mission-critical technologies for defence, aerospace and homeland security applications. The year-on-year revenue growth was recorded at 68%, reflecting robust business growth.

DELOPT is aligned with Indias Atmanirbhar Bharat and defence indigenisation initiatives and aims to support the growing demand for locally designed and manufactured high- technology defence systems.

Raw material management

JK Paper Ltd. continues to strengthen its leadership in sustainable forestry through a comprehensive farm forestry model that integrates environmental stewardship with socio-economic development. The Company adopts a localised sourcing strategy focused within a 200 km radius of its manufacturing units and promotes plantation development beyond its annual wood requirements to ensure long-term raw material security while mitigating supply risks arising from increasing industry demand.

At the core of this initiative is an extensive farmer engagement programme that encourages the cultivation of pulpwood species such as eucalyptus, subabul and casuarina. Through structured outreach initiatives, including exposure visits to manufacturing facilities, clonal nurseries and demonstration plots, farmers are educated on the economic advantages of pulpwood cultivation over traditional crops. This approach has improved awareness, along with enhancing adoption rates across key plantation regions.

The Companys sustainability commitment is further reinforced by its achievement of FSC® Forest Management (FM) certification in 2024, spanning over one-third of its plantations and exceeding 72,000 hectares by 2025.

Its cumulative plantation footprint has reached approximately 87,840 acres, with 36,095 hectares covered during the year across Gujarat, Maharashtra, Chhattisgarh, Odisha, Andhra Pradesh, Telangana and Madhya Pradesh. During the year alone, ~12 crore saplings were planted, significantly contributing to the enhancement of green cover.

During the year, India experienced acute pulpwood scarcity, resulting in wood prices increasing by over 80% compared to normal levels. While this remains a cyclical industry challenge, JK Paper continues to pursue initiatives aimed at enhancing fiber procurement security and supporting operational continuity. The overall scenario underscores the urgent need for wider adoption of farm forestry across wood-based industries to ensure long-term resource security, environmental sustainability and economic resilience.

Procurement

The year 2025-26 commenced with a continuation of the price correction trend from the elevated levels observed during the post-COVID period. This normalisation was witnessed across major input categories, including chemicals, packaging materials and coal, which positively contributed to improved input cost management.

However, the global economic slowdown in 2025, particularly in China, influenced by tariff policies implemented by the United States, led to subdued demand and heightened uncertainty across sectors.

Despite the broad-based softening of input costs, certain commodities, such as starch continued to experience elevated price levels due to sustained high demand throughout 2025. In response, the Company adopted proactive measures, including the rapid development of alternative sourcing channels, mitigating cost pressures and ensuring supply continuity.

Currency movements also played a significant role during the year. Appreciation of the US Dollar and Euro against the Indian Rupee increased the landed cost of imported inputs such as pulp and lime, despite relatively stable global import prices. The depreciation of the Indian Rupee continues to be a concern from a long-term perspective, particularly amid ongoing global conflicts and external economic pressures, despite some indications of potential stabilisation.

Product development

Amid rising consumption of plastic- based packaging, the industry continued to face increasing scrutiny due to concerns around mismanaged waste, environmental pollution, climate change and biodiversity loss. In this context, fibre-based packaging has emerged as a sustainable and scalable alternative, receiving substantial regulatory support as governments increasingly move towards replacing single-use plastics.

JK Paper Ltd. has actively responded to this transition by developing and launching a range of innovative, sustainable fibre-based products under its AQUA brand (aqueous barrier), certified by the Central Pollution Control Board (CPCB). The portfolio includes Aqua Bev 1S & 2S, Aqua Tub, Aqua Serve and Aqua Freeze.

These products offer critical functional properties, such as water and moisture resistance, superior oil and grease resistance and heat sealability, while meeting essential sustainability criteria including recyclability, repulpability and compostability. They are particularly suited for replacing single-use plastic packaging across food and beverage applications, quick service restaurants (QSRs) and deep-freeze segments such as ice cream packaging.

In parallel, the Company continues to expand its value-added portfolio catering to F&B, pharmaceutical, FMCG and QSR sectors through close customer collaboration. Key innovations include Taral Board (coated liquid packaging board), antifungal stiffeners, cigarette board, deep-freeze packaging board (2PE-coated high-strength boards) and low-GSM PFAS-free hygienic OGR paper for food wrapping, offering enhanced oil and grease resistance while adhering to global safety standards.

Further strengthening its innovation capabilities, JK Paper has partnered with the Indian Institute of Technology Delhi under a Centre of Excellence initiative to develop advanced speciality coatings. These include 100% bio-based coated boards, low-toxicity antifungal coatings and completely PFAS-free (TOF-free) oil and grease-resistant solutions for food packaging.

These initiatives reflect the Companys commitment to sustainable manufacturing, regulatory alignment and customer-centric innovation.

JK Paper Ltd. continues to accelerate its business transformation through a structured and future-ready digital strategy aimed at enhancing operational efficiency, driving innovation and building long-term competitive advantage. The Company has made significant progress in embedding digital technologies across its manufacturing and business processes, aligning with the principles of Industry 4.0.

By leveraging advanced automation, real-time data capture and smart manufacturing systems, JK Paper has optimised its production processes, resulting in improved product quality, higher throughput and better resource utilisation. The integration of digital tools across shop-floor operations enables predictive maintenance, reduces downtime and enhances decisionmaking through data-driven insights.

To further strengthen its capabilities, JK Paper is investing in advanced analytics and artificial intelligence (AI)-led use cases, including demand forecasting, supply chain optimisation, quality analytics and process optimisation.

These initiatives are enabling faster and more accurate business decisions. the industry, leveraging digitalisation not just as an efficiency lever, but as a strategic enabler of growth, resilience and sustainable value creation across the value chain

JK Paper Ltd. places sustainability at the core of its business strategy, integrating environmental stewardship, social responsibility and long-term value creation into its operating philosophy. The Company has adopted a structured ESG framework through identifying priority pillars, establishing performance baselines and benchmarking of key KPIs against industry standards.

This disciplined approach enables targeted investments towards carbon neutrality, energy resilience and biodiversity conservation.

The Company continues to reduce its environmental footprint through energy optimisation, increased adoption of renewable energy and advanced water and waste management systems. Ongoing modernisation and deployment of new technologies have resulted in a significant reduction in coal consumption. At the Rayagada unit, more than 70% of total energy requirements are met through green sources, while at the consolidated level, approximately 60% of total energy consumption is derived from renewable energy. Additionally, the upcoming BCTMP pulp

Through these focused ESG initiatives and measurable targets, JK Paper is steadily progressing toward becoming a carbon- and water-positive organisation, underpinned by ethical practices, operational excellence and sustainable growth.

At JK Paper, Human Resources continues to play a strategic role in supporting the Companys transformation into a progressive and future-ready enterprise. Rooted in a people-first philosophy and strong organisational values, HR has evolved into a more structured, data- driven and capability-focused function aligned with business priorities.

During the year, the focus shifted from strengthening foundational

The Company is also building scalable digital platforms that support agility and innovation, help responding effectively to evolving market dynamics.

At the core of this transformation is a focus on people and technology.

JK Paper is actively upskilling its workforce to adapt to new digital tools and ways of working, while simultaneously strengthening its IT and digital infrastructure. A dedicated Digital and IT organisation is driving this transformation, ensuring alignment between business objectives and technology implementation.

Through these initiatives, JK Paper aims to establish itself as a benchmark within plant at Songadh Unit is planned to operate entirely on renewable power.

JK Paper is also focused on improving resource efficiency, with targeted reductions of 5-10% in water and steam consumption from current levels. Its operations ensure 100% recovery of paper machine backwater through disc filters, with reclaimed water effectively reused across the mill.

On the social front, the Companys farm forestry programme spans over 5,00,000 hectares and supports more than 75,000 farming families. This initiative promotes sustainable pulpwood cultivation, enhances rural livelihoods and reduces dependency on natural forests. people practices towards building deeper internal talent pipelines, accelerating capability development and embedding future-ready skills across the workforce. A balanced build vs. buy talent strategy, supported by a strategic GET/MT pipeline, job rotations and cross-functional assignments, has further strengthened the Companys talent ecosystem.

The Company also made steady progress on its diversity and inclusion agenda, moving beyond awareness-building towards measurable improvements in representation and establishing a clear roadmap for long-term diversity goals.

Learning and development initiatives have become more targeted and future-focused, with over 600 employees covered under digital awareness programmes and more than 200 employees trained in analytics. Structured skill-building initiatives continue to strengthen digital, automation and data-driven capabilities across roles. Leadership development was further enhanced through Individual Development Plans (IDPs), experiential learning and cross-functional exposure.

Aligned with JK Papers growth and diversification strategy, particularly within the packaging business, HR continued to build specialised capabilities and strengthen leadership depth across businesses. Employee engagement initiatives also evolved into more insight-led and targeted interventions, supported by enhanced feedback mechanisms, developmental conversations and recognition initiatives, fostering a more connected, motivated and agile workforce capable of supporting the Companys long-term growth aspirations.

Analysis of the profit and loss statement Revenues: The Consolidated Revenue increased from Rs. 7,064.62 crores in 2024- 25 to Rs. 7,568.93 crores in 2025-26.

Expenses: Total expenses increased from Rs. 6,242.57 crores in 2024-25 to Rs. 6,754.25 crores in 2025-26. A significant increase in raw material cost and lower realisation across all categories have impacted performance during year. The selling prices remained under pressure mainly due to increase in cheaper imports. Sales volume have shown a growth in Paper & Boards during the year. The Company continued its focus on operational efficiencies.

Financial Metric	2025-26	2024-25
Gross Sales	7,568.93	7,064.62
Net Sales	7076.03	6,662.49
Profit before Interest and Depreciation (EBITDA)	984.11	1026.31
Profit before Depreciation and Tax (PBDT)	741.41	848.58
Profit before Tax (PBT)	364.48	516.96
Profit after tax (PAT)	271.87	406.68

Analysis of the Balance Sheet

Sources of funds: The capital employed by the Company increased from Rs. 6,880 crores as on March 31,2025, to Rs. 7,456 crores as on March 31,2026. Return on capital employed stood at 5.9% in 2025-26 compared to 7.80 % in 2024-25. The net worth of the Company increased by 2.77% from Rs. 5,372 crores as on March 31,2025, to Rs. 5,521 crores as on March 31,2026. Total debt increased by 39.23% to Rs. 2,436.25 crores as on March 31,2026, mainly due to fresh borrowings for BCTMP pulp mill project. The Companys interest cover stood at a comfortable 4.37x in 2025-26 (5.77x in 2024-25). Applications of funds: Property, Plant and Equipment (PPE) increased from Rs. 5,438 crores as on March 31,2025, to Rs. 5,562 crores as on March 31,2026.

Working capital management

Current assets of the Company increased by 9.65% from Rs. 2,755.37 crores as on March 31,2025 to Rs. 3,021.36 crores as on March 31,2026 mainly due to increase in inventory. Current Ratio and Quick Ratio of the Company stood at 1.39 and 0.77 respectively in 2025-26 compared to 1.83 and 1.03 respectively in 2024-25. The finished goods inventory days stood at 18 in 2025-26 compared to 13 in 2024-25.

Details of significant changes

(i.e. change of 25% or more compared to the immediate previous financial year)

Financial Ratios

Financial Metric	UOM	2025-26	2024-25	% Change	Definition	Remark for Variation
Debt-Equity Ratio	Times	0.42	0.31	34.59%	Total debt / shareholders equity	Primarily on account of increase in total borrowings
Finished Goods Inventory Days	No(s)	17.93	13.20	35.87%	Net Sales / Finished Goods Inventory	Increase in inventories
Return on Equity	%	4.99%	7.79%	35.92%	Profit after tax / Shareholder Equity	Decrease in profit

Financial Metric	UOM	2025-26	2024-25	% Change	Definition	Remark for Variation
Net Capital Turnover Ratio	Times	6.63	4.64	43.12%	Net Sales/Working Capital	Primarily on account of increase in short term borrowings
Net Profit Ratio	%	3.90%	6.19%	36.99%	Net Profit after tax/Net Sales	Decrease in profit

Risk management framework

The Company has established a comprehensive risk management framework for identifying, assessing and managing risks across key functions and business segments. A documented Risk Control Matrix supports a structured approach to risk assessment and mitigation.

Risk management

Risk description	Mitigation strategy
Economic risk Geopolitical tensions, trade disruptions, inflationary pressures, currency volatility, fluctuating interest rates and a slowdown in domestic demand could adversely affect the Companys operations, input costs, supply- chain stability, export competitiveness and overall financial performance	The Company follows a prudent hedging strategy to manage currency and interest-rate exposures, supported by continuous monitoring of forex and interest-rate movements and the use of forward contracts and option structures to optimise hedging costs. Regular engagement with banks and financial experts enables timely coverage of exposures and an optimal mix of fixed and floating rate borrowings is maintained. The Company also closely monitors segment-wise import trends and continues to engage with the Government regarding the implementation of Minimum Import Price (MIP) for Writing & Printing paper and Anti-Dumping Duty (ADD) on Packaging Board to address dumping arising from global trade dislocations.
Demand substitution risk Increasing digitisation may reduce demand for paper-based products, which could adversely impact the Companys business performance.	To address this, the Company has diversified into Paperboard and corrugated packaging, along with the animal nutrition sector, thereby reducing dependence on the writing and printing paper segment. The Company actively pursues growing segments, maintains a robust pipeline of new products, strengthens its distribution channel and pursues international markets, supported by manufacturing flexibility to produce a diverse range of grades.
Raw material risk Shortages of critical raw materials such as wood, pulp, coal and chemicals may adversely affect production capacity and profitability.	The Company has implemented strong farm forestry programmes around its manufacturing units to ensure sustainable local availability of wood while optimising logistics costs. Extensive R&D initiatives have enabled the development of high-yielding pulpwood clones with shorter maturation cycles, which are being promoted among farmers, thereby supporting both farmer livelihoods and long-term raw material security. The Company is also focusing on alternative sources of wood, including secondary nature, while exploring the use of alternative species alongside traditional and proven pulpwood species. Long-term partnerships with suppliers of other key inputs further support supply reliability.
Risk description	Mitigation strategy
People risk Failure to attract and retain an efficient and capable workforce may affect the Companys operational efficiency and adversely impact its long-term growth prospects.	The Company continues to strengthen its talent management framework through a focused approach towards identifying critical talent, building leadership pipelines and enhancing organisational capabilities. Structured succession planning mechanisms have been implemented to identify successors for critical roles, ensuring leadership continuity and reducing dependency risks. Investments in capability building through structured learning and development interventions are aimed at strengthening technical, functional, digital and managerial competencies across levels, supplemented by attrition analysis, employee engagement initiatives and apprenticeship-led skill development programmes.
Environmental Risk Increasing stakeholder expectations, evolving ESG regulations, climate change impacts, carbon emission norms, water stress, biodiversity concerns and sustainability disclosure requirements may affect operations and reputation.	The Company continues to strengthen its ESG framework through sustainable forestry initiatives, renewable energy adoption, energy- efficiency projects, water conservation programmes, circular-economy practices, responsible sourcing and enhanced ESG disclosures aligned with global frameworks. The Company has proactively reduced specific water consumption and invested in advanced technologies to improve consumption efficiency, while strengthening effluent recycling and treatment processes. Ecofriendly products such as aqueous-barrier coated cupstock board, paper straws and paper carry bags have been commercialised, with further plastic-replacement products under development to support the transition to a low-carbon, circular economy.
Regulatory compliance risk Non-compliance with statutory regulations may result in penalties and could adversely impact the Companys credit rating.	The Company has established a comprehensive compliance and monitoring framework for effective management of regulatory requirements, supported by a digital compliance management tool that tracks the status of all applicable statutory compliances online and enables proactive compliance tracking and timely reporting. Certifications such as ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 reflect the Companys commitment to maintaining high standards in quality, environmental management and safety.

JK Paper has established a comprehensive internal control framework tailored to the nature, size and risks of its business. This internal control environment facilitates efficient operations, asset security, fraud/error prevention and detection, accurate and complete accounting records and timely preparation of reliable financial information. The Company utilises SAP, an Enterprise Resource Planning (ERP) software, as its primary IT system. An independent internal audit function is in place to ensure compliance with operating systems, internal policies and legal requirements, while also recommending improvements to systems and processes. Operating management monitors the internal control environment closely and ensures effective implementation of audit recommendations. The Audit Committee of the Board oversees the performance of the Internal Audit Function, reviews key findings and provides strategic guidance.