Jumbo Bag Ltd Management Discussions

ANNEXURE- I

World Economic Conditions

The global economy is undergoing a profound transformation, requiring adaptive strategies from policy-makers and business leaders alike.

Growth perspectives for the US are improving, driven by strong artificial intelligence- related investment. Europe confronts weak growth and geo-economic challenges, while China navigates deflationary headwinds alongside a rebalancing of trade and consumption. South Asia stands out as the region with the strongest growth outlook.

World Trade Outlook: Stable, in Line with Output

Global Growth: Divergent and Uncertain

Global growth is projected at 3.3 percent for 2026 and 3.2 per cent for 2027, revised slightly up since the October 2025 World Economic Outlook. Technology investment, fiscal and monetary support, accommodative financial conditions, and private sector adaptability offset trade policy shifts.

Global inflation is expected to fall, but US inflation will return to target more gradually. Key downside risks are re-evaluation of technology expectations and escalation of geopolitical tensions. Since the October 2025 WEO, trade tensions have continued to abate but remain subject to occasional flare-ups. A dispute between China and the United States involving controls on exports of semiconductors and rare earth minerals was quickly followed by a truce that reduced bilateral tariffs until November 2026 and introduced a pause on export controls

Risks to the Outlook: Broadly Balanced:

There is scope for further favourable surprises, but numerous adverse risks pull the distribution of outcomes in the opposite direction. Prominent risks and uncertainties surrounding the outlook

Five themes will define the macro-strategic environment in 2026:

1. Trade: policy-driven geo-economic disruptions Trade policy will remain a primary driver of supply side volatility in 2026. The average US tariff rate has risen sharply, moving from roughly 2.4% at the end of 2024 to around 16.8% by the end of November 2025, with the effective rate based on customs duties collected closer to 13%. Although the full impact of these changes is still unfolding, the scale of the increase marks a significant realignment of cost structures.

Corporate planning is adjusting to this new landscape. Firms are no longer treating elevat- ed tariffs as a temporary shock; they are embedding them into structural cost assumptions and building greater flexibility into sourcing, pricing and capital allocation decisions. In all, we estimate the new tariff regime will reduce global GDP by roughly 0.7% by 2026 and real US GDP by 1.2% by 2026, excluding any offsets.

For business leaders, trade has become a strategic variable that actively shapes supply chain geography, input cost trajectories and competitive positioning. The priority is to di- versify sourcing, build tariff contingency strategies and prepare for supply side disruptions that are likely to persist rather than fade.

2. AI revolution: innovation, investment, and labor transformation

AI is emerging as the strongest supply-side counterweight to a slowing global econ- omy. We estimate roughly one-third of US GDP growth in the first half of 2025 to have come from AI-related investment, ranging from data center expansion and model training to cloud, semiconductor and software deployment. This acceleration is laying the founda- tion for a multiyear uplift. At the global level, we find that AI diffusion could generate one to two additional years of growth over the next decade, and the potential uplift for the US is even larger at two to four years as higher capital investment combines with measurable productivity gains.

Taken together, AI is becoming a defining supply side force that influences capital allo- cation, cost structures, workforce planning and competitive positioning. The pressure to keep pace with early adopters has created a wave of fear-of-missing-out (FOMO) -driven investment, yet rapid deployment without a clear strategic framework risks misallocating capital and amplifying operational vulnerabilities.

3. Markets in flux : shifting rates, currencies, and commodities

Financial markets remain unsettled as supply-side shocks, geo-economic tensions and uneven central bank policy paths continue to reshape rate expectations and capital flows.

Commodity markets are reinforcing these signals of structural strain. Recent movements in oil, rare earth metals and gold reflect a combination of geo-economic developments, supply constraints and a broader inclination among global investors to diversify away from dollar-denominated assets. These dynamics point to a commodity landscape that is more sensitive to political shocks and more central to inflation risks than in previous cycles.

Taken together, these forces create a financial environment that is likely to remain volatile and potentially more restrictive than underlying demand conditions might imply. For busi- nesses, the combination of steeper yield curves, shifting commodity prices and evolving currency preferences underscores the need for stronger balance sheet planning, more adaptive hedging strategies and a more disciplined approach to investment and liquidity management.

4. Debt and deficits: competing fiscal priorities

Fiscal policy is entering a more constrained phase as high debt levels, elevated interest rates and rising structural spending needs converge. Global public debt is approaching 100% of world GDP, and fiscal deficits remain above pre-pandemic norms. As debt stocks grow and interest rates stay elevated, debt service absorbs a larger share of government revenue and narrows the space for growth-enhancing investment.

This dynamic increases the likelihood that long-term borrowing costs remain high even as central banks reduce policy rates. In turn, this would limit governments ability to cushion future shocks and raise pressure on the private sector.

5. Demographics: evolving talent dynamics and shifting immigration patterns

Demographic change is becoming one of the most powerful structural forces shaping the global economy. The global population aged 65 and older is set to rise from roughly 10% today to nearly 20%, or 1.6 billion, by the middle of the century. This shift is unfolding alongside steadily declining fertility rates. More than two-thirds of countries now fall below the replacement rate of 2.1 births per woman, which means that working age populations will stagnate or contract across much of the world. Labor markets are already reflecting these trends. Labor force participation is declining across most advanced economies as aging cohorts move into retirement and younger workers enter the labor market in smaller numbers

Indian Economic Conditions

The year 2025 marked an inflection point: Policy overhauls across Western economies— particularly in trade, investment, and industrial policy—triggered spillover effects across all major global markets. India was not immune to these shifts. Intricately connected to global value chains, India, the worlds fourth-largest economy and a major global trading partner, faced external shocks and acute effects from these global policy changes, including tariff escalations and volatile capital flows.

As India enters 2026, several themes will shape the next phase of growth and demand the same level of pragmatism. Growth is expected to stand between 7.5% and 7.8% in fiscal 2025 to 2026, and then between 6.6% and 6.9% in fiscal 2026 to 2027, buoyed by the rollout of new goods and services tax (GST) rules and slowing inflation.

India is expanding its reach across Africa, Latin America, and West Asia, and recent BRICS and G20 engagements have focused on collaboration in energy, critical minerals, and digital infrastructure

Three of the biggest global risks for India in 2026 will come from:

• US tariff policies and the conclusion of the India-US trade deal, which remains unpre- dictable.

• Chinas slow recovery and its dominance in critical minerals, which India must monitor as it recalibrates its relationship with Beijing.

Domestically, the three biggest risks that need to be monitored are:

Yet, despite headwinds, demand resilience, a reset in trade and investment outlook, and policy reforms stood out. India focused squarely on its biggest strength, domestic demand, to keep growth buoyant as inflation levels stayed low at 1.8% on average through the fiscal year. With slowing global demand, rising trade frictions, and a delicate domestic consump- tion environment, India deployed a carefully sequenced set of fiscal, monetary, and trade reforms that not only cushioned the economy but also laid the foundation for future growth.

Packaging and FIBC Industrial Trend

The flexible intermediate bulk container market is expected to grow from USD 8.63 billion in 2025 to USD 9.05 billion in 2026 and is forecast to reach USD 11.44 billion by 2031 at 4.82% CAGR over 2026-2031. Demand continues to come from chemicals, agriculture and construction, but stronger growth now comes from sustainable packaging mandates, in- plant automation and the rapid scale-up of lithium and rare-earth supply chains.

Key Drivers Shaping the Growth of the Flexible Intermediate Bulk Container

• The rising industrialization all around the world and the increasing demand for efficient packaging solutions for a variety of products and materials for safer storage and transport activities are driving the growth of the FIBC market.

• The rise of the national and international supply chain for transporting various materials, components, and other products from various industries, such as food and beverages, chemicals and materials, healthcare, construction, consumer goods, and other end-use industries, is contributing to the growth of the FIBC market.

• FIBC, a flexible intermediate bulk container, is an effective packaging solution that can store or transport any kind of material, such as liquid chemicals or solid materials, from the manufacturing unit to its required destination.

• The rising international trade of industries like pharmaceuticals, chemicals, and food and beverages products such as medicines, food items, liquid chemicals, and other materials to other countries with the minimized risk of losses and spoilage is accelerating the adoption of FIBCs for transportation.

• FIBC, a flexible intermediate bulk container, is 100% made from food-grade material, which makes it the preferred packaging material for industrial products like food and beverages, healthcare, and pharmaceutical products.

• FIBC packaging is made from several types of materials that make it easy and lightweight to handle. It is also durable and has a long lifecycle, which makes it lower in maintenance. All these properties are driving the adoption of FIBCs by several end- use industries.

• According to Straits Research analysis, the India FIBC Market was valued at USD 554.35 Million in 2024 and is projected to reach USD 835.69 Million by 2030, expanding at a CAGR of 7.2% during the forecast period. Key drivers contributing to this growth include increased demand from agriculture, chemicals, and energy industries due to the convenient, cost-effective, and efficient packaging solution provided by FIBC. Industry-specific uses, such as the transportation of sand, fertilizers, grains, and minerals, spur the growth too. Green production and sustainability trends, along with technological advancements, offer lucrative opportunities. Export potential is a major untapped growth avenue. In positioning itself for future growth, India is reinforcing its market presence by leveraging these trends, thereby setting itself up as a significant contributor in the global FIBC market.

Risks and concerns.

Operating margin remains susceptible to fluctuations in the prices of key input i.e. polymer, which move in tandem with crude oil prices. Also, we are subjected to foreign currency exchange rate fluctuations which could have impact on results of operations. However, this is hedged passing the increase and decrease in the polymer price to Customers.

The FIBC industry is fragmented because of low entry barrier as capital and technology requirements are limited, gestation period is small, and raw materials are easily available. This restricts substantial scale up in operations and exerts pricing pressure. Also, this in- dustry being highly labour intensive the retention of workers has been high priority for the Company. Attrition of workers may affect the production and also involves cost and time in inducting and training of new appointees. Several other global as well as Indian economic and political factors that are beyond our control may affect the business of the Company.

Segment Wise Performance:

Your Company is into the manufacturing of Flexible Intermediate Bulk Bags (FIBC bags) generally used for industrial purposes and also a Del - Credere Associate cum Consign- ment Stockist (DCA/ CS) of Indian Oil Corporation Limited (IOCL) for polymer trading for a decade now. The following table gives an overview of the financial results of the Company.

Rs. in Lakhs

Particulars	Results 2026	Results 2025	Growth %
Sales and other income	11,820.02	12,672.49	-6.73%
Profit before interest, Depreciation, taxes & exceptional items	1,681.79	1,024.19	64.21%
Profit before tax & exceptional items	1,129.26	496.34	127.51%
Profit/ (Loss) before tax	1,129.26	496.34	127.51%
Profit/ (Loss) after tax	850.21	323.71	162.65%

The revenue of the Company for the financial year 2025-26 has decreased by (6.73%) compared to the previous year ended 2024-25.

The profit before tax & exceptional items has increased by 127.51% due to increase in operational efficiency and reduction in wastage on the material cost and increase in profit after tax of 162.65%.

In the upcoming financial year 2026-27 your company will be looking to strengthen its overseas customer base around the globe and look to replicate its growth though main challenges like recession and global economy continues to be bigger challenges.

Your Company is working on various cost cutting measures and also reaching out to other stakeholders including its customers to deal with challenges together.

Your company is a Del - Credere Associate cum Consignment Stockist (DCA/ CS) of Indian Oil Corporation Limited for Tamil Nadu, Pondicherry and Kerala since 2009. We are able to achieve constant level of sales throughout the year.

The profit from trading division has been increased due to effective availability of material from IOCL and able to add new customers in its order book. Further the company is expecting better profitability in the coming years.

The Financial and Operational performance of the Company are on growing trend and details of the same are mentioned in the Financial Statements as well as Board report.

Internal Control System

Your Company has an efficient inbuilt system to monitor the compliance of standards at each stage of the production process. The system enables the management to quickly identify any deviations from the required standards and to take appropriate action for correction. The compliance to the standards is also reviewed by the management at the monthly meetings.

The above system is further audited by the internal auditor appointed by the Board of Di- rectors who gives quarterly reports to the Audit Committee on the level of compliance. The deviations if any are also reported further to which the committee recommends necessary course of action.

The system helps the company to identify the risks at an early stage so that required action is taken for control.

Material developments in Human Resources / Industrial Relations front, including number of people employed.

The company believes that its human resources are one of the most crucial assets and critical enablers of the Groups growth. To that extent, the Group engages with its employees to hone their skill sets and equip them with knowledge and know-how. It is also deeply invested in establishing its brand name to attract and retain the best talent in the market. During the period under review, employee relations continued to be healthy, cordial and harmonious at all levels, and the Group aims to maintain such relations with the employees going forward as well. As of 31st March, 2026 the Company has 246 permanent employees.Risks and Concerns

Risks and Concerns

The Company has in place a Risk Management Policy duly approved by the board which is periodically reviewed by the management. The main objective of the companys risk management policy is to ensure the effective identification and reporting of risk exposures, involvement of all departments and employees in risk management, to ensure continuous growth of business and protect all the stakeholders of the Company.

Key Financial Ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios.

Key financial ratio as per the above mentioned regulation

Financial ratio	FY 2025- 26	FY 2024- 25	Reasons for Variation
Net profit ratio	7.11%	2.55%	Due to Operational Efficiency
Debt-Equity ratio	0.85	1.22	Due to repayment of term loans and improve s
Debt Service Coverage Ratio	3.14	2.42	Due to increase in profits & de- crease in interest rates.
Return on capital employed	16.16%	9.37%	Due to enhanced operational efficiency and disciplined cost man- agement
Return on Equity Ratio	19.65%	9.13%	Due to enhanced operational profitability and Disciplined capital structure

Future Outlook:

The outlook for Jumbo Bag Ltd remains positive, driven by strategic initiatives aimed at strengthening operational efficiency, sustainability, market presence, and product innovation. The Company continues to align its long-term vision with emerging industry trends and evolving customer requirements.

1. Investment in Renewable Energy

The Company is committed to enhancing its sustainability framework through investments in solar energy. Installation of solar power systems at manufacturing facilities is expected to reduce dependency on conventional energy sources, optimize energy costs, and lower the overall carbon footprint. This initiative reinforces the Companys commitment to environmentally responsible operations while improving long-term cost efficiency.

2. Automation and Operational Excellence

Jumbo Bag Ltd plans to implement automation across various operational areas to enhance efficiency, precision, and productivity. Automation initiatives in production processes, material handling, quality control, and packaging are expected to streamline workflows, reduce turnaround time, minimize human error, and improve overall product consistency. These measures will strengthen competitiveness and operational scalability.

3. Expansion of Production Capacity

With a focus on meeting growing domestic and international demand, the Company is exploring expansion of its production capacity. Strategic capacity augmentation will enable timely execution of large orders, improved economies of scale, and enhanced customer satisfaction. The Company aims to ensure that its infrastructure is aligned with projected future demand.

4. Market Diversification and Expansion

The Company intends to explore new domestic and international markets to diversify its revenue streams and reduce concentration risks. By strengthening its global footprint and entering emerging markets, Jumbo Bag Ltd seeks to capitalize on new business opportunities and build a more resilient market presence.

5. Product Development and Innovation

In line with evolving industry requirements, the Company is focused on developing new products tailored to market needs. Continuous research and development efforts aim to introduce innovative, value-added packaging solutions that meet changing regulatory standards, sustainability expectations, and customer-specific requirements. Product diversification will further enhance the Companys competitive positioning.

Overall, Jumbo Bag Ltd remains focused on sustainable growth through operational excellence, innovation, market expansion, and responsible business practices. These strategic initiatives are expected to strengthen the Companys long-term performance and create value for all stakeholders.

Cautionary Statement:

Statements contain in this report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement because of many factors like economic condition, availability of labour, price conditions, domestic and international market, etc.

	For and on behalf of the Board
	RENUKA MOHAN RAO
	S/D
Place: Chennai	Chairman
Date : 29.04.2026	DIN:07542045