Jumbo Bag Ltd Management Discussions

World Economic Conditions

The baseline forecast is for the world economy to Lower inflation and monetary easing offer relief, but trade tensions, high debt burdens, and geopolitical risks cloud the outlook Despite falling inflation, improving labour market conditions, and monetary easing, global growth is projected to remain below the pace seen before the pandemic, and the world economy continues to face significant uncertainties. This continues to gravely impact progress towards the Sustainable Development Goals (SDGs), especially for many developing countries that are still suffering from the accumulated impacts of successive crises.

However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development. Emerging market and developing economies are set to enter the second quarter of the 21st century with per capita incomes on a trajectory that implies feeble catch-up toward those of advanced economies. Most low-income countries are not on course to graduate to middle-income status by 2050. Policy action at the global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.

Risks to the global outlook are now broadly balanced. On the downside, new price spikes stemming from geopolitical tensions, including those from the war in Ukraine and the conflict in Gaza and Israel, could, along with persistent core inflation where labour markets are still tight, raise interest rate expectations and reduce asset prices. A divergence in disinflation speeds among major economies could also cause currency movements that put financial sectors under pressure.

A greater-than-expected rise in the labour force amid robust employment growth supported activity and disinflation in advanced economies and several large emerging market and

Middle-income economies.

World Trade Outlook: Stable, in Line with Output

Global Growth: Divergent and Uncertain

Global growth is projected at 3.3 percent both in 2025 and 2026, broadly unchanged from the October 2024 World Economic Outlook (WEO) forecast with an upward revision in the United States offsetting downward revisions elsewhere. The near-term outlook is characterized by divergent paths, while medium-term risks to growth are tilted to the downside. Renewed inflationary pressures could interrupt the monetary policy pivot, with implications for fiscal sustainability and financial stability. The policy mix should balance trade-offs and rebuild buffers.

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

Downside Risks Dominate

• Trade Policy Uncertainty and Protectionism:

Heightened trade policy uncertainty and protectionist measures could hinder both short-term and long-term growth prospects.

• Geopolitical Instability:

Escalating geopolitical tensions and conflicts, including state-based armed con flict, are major concerns.

• Inflation:

While inflation is expected to ease, it remains a concern, especially in emerging economies.

• Debt and Fiscal Fragility:

Many countries, particularly developing ones, face high debt levels and reduced official development aid, leading to potential debt distress.

• Climate Change:

More extreme weather events are a significant risk, impacting economies and infrastructure.

• Cybersecurity Risks:

Cyberattacks and IT outages could disrupt global markets and economies.

• Impact of AI:

While AI offers potential for economic growth, it also introduces risks to financial and social stability.

• Economic Volatility:

Increased economic volatility, including fluctuations in commodity prices, is a concern.

• Supply Chain Disruptions:

Trade tensions and other factors could disrupt global supply chains.

• Recessionary Risks:

Some forecasts suggest a significant probability of the US and global economies entering a recession by the end of 2025.

Indian Economic Conditions

Besides, the apparent "slowdown" in fiscal 2024 to 2025 has partly been a consequence of election-driven uncertainty (with both India and the United States going to the polls), disruptions driven by more-than-anticipated rainfall till the third quarter, and volatility in global trade networks in the last two quarters. Not to mention, the growth over the year is being compared against a significantly elevated economic base driven by revised figures for the past year. This optimism is carried forward, as we see a good jump in high-frequency indicators such as goods and services tax, auto sales, and sales of fast-moving consumer goods in recent months.

Two opposing forces are set to define Indias economic trajectory in fiscal 2025 to 2026:

• The potential positive impact of tax incentives: The Union Budgets tax stimulus could raise GDP at least by 0.6% to 0.7% this fiscal Besides, lower in flation, range-bound global oil prices, lower borrowing rates, and more liquidity (due to the easier monetary policy), and a more certain global environment by the end of the year will help boost sentiment.

• The potential negative impact of uncertainty in global trade networks:

India faces an ad valorem baseline tariff rate of 10% on its goods exports to the United States.

Considering the net impact of these two factors on growth (discussed at length in this edition), Deloitte remains cautiously optimistic about growth in the current fiscal (with likely growth between 6.3% and 6.5%), and forecasts growth between 6.5% and 6.7% in the next (2025 to 2026).

Packaging and FIBC Industrial Trend

• The FIBC market is anticipated to be valued at USD 7.4 billion in 2025, and USD 11.5 billion by 2035. Sales are predicted to expand at a 4.5% CAGR from 2025 to 2035. The revenue generated by FIBCs in 2024 was USD 7.2 billion.

• Major applications of FIBCs are in the agriculture industry compared to others in the end-use segment in the forecast period, capturing more than 26% of the market share. FIBCs are used widely in agriculture because they are efficient in storing and transporting large volumes of bulk materials such as grains, seeds, and fertilizers. Their flexibility, cost-effectiveness, and ease of handling make them ideal for this industry, reducing packaging costs, improving logistics, and ensuring safe, secure transportation over long distances.

• As Indias exports continue to grow, especially in the areas of food processing, pharmaceuticals, and chemicals, custom bulk packaging solutions are becoming increasingly important for Indian manufacturers. According to the India Brand Equity Foundation, the value of Indian pharmaceutical exports from India increased from USD 19.1 billion in 2019 to USD 25.4 Billion in 2023. This rising export trend is expected to have created a bolstered demand for bulk FIBC across the market.

• Governments are encouraging the use of recyclable materials for packaging in India, which is something that FIBCs can help with. There is an increasing demand for customized storage and transportation solutions for various industries, and the lack of skilled labor means that more and more FIBCs are being used due to their ease of handling and cost-effectiveness.

• According to the President of the Indian Flexible Intermediate Bulk Container Association (IFIBCA), since the inception of FIBCA, the country produced around 10,000 tons of FIBCs per year. At present, it produces 400,000 tons per year. India is one of the largest exporters of FIBCs in the world, including Europe, and the United States is one of the largest importers. The growth in production is expected to increase between 2024 and 2029 with the rising demand across the globalmarket.

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 industry 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 Consignment 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.

Particulars	Results 2025	Results 2024	Growth %
Sales and other income	12,672.49	10,542.50	20.20%
Profit before interest, Depreciation,	1024.19	800.28	21.86%
taxes & exceptional items
Profit before tax & exceptional items	496.34	316.46	36.24%
Profit/ (Loss) before tax	496.34	137.75
Profit/ (Loss) after tax	323.71	118.88	172.3%

The revenue of the Company for the financial year 2024-25 has by 20.20% compared to the previous year ended 2023-24.

The profit before tax & exceptional items has increased by 36.24% due to increase in operational efficiency and reduction in wastage on the material cost and increase in profit after tax of 172.3%.

In the upcoming financial year 2025-26 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 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 Directors 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, 2025 the Company has 235 permanent employees.

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 2024-25	FY 2023-24
Net profit ratio	2.55%	1.13%
Trade payables turnover ratio	8.72	6.94
Inventory turnover ratio	3.36	2.42
Return on Equity Ratio	9.13%	3.58%
Debt Service Coverage Ratio	2.42	1.51

The decrease in above ratio is due to writing off Insurance claims last year to the extent of Rs.178 lakhs

Future Outlook:

Your Company decided to automate few processes of production during the year in order to tackle the deficiency in available workers. This automation was done not to reduce the number of workers but to improve the production capacity, quality of bags that were produced and it also helped in the reduction of production cycle time.

The Company ensures getting new models and designs of its product with the best and unbeatable quality at reasonable prices to cater to the requirements and preferences of its customers. The Company continued its focus on marketing activities by participating in many new markets. Your company has introspected with its customer base and greatly recognizes the need for innovations and new product developments to drive growth and better margins. There is ample scope and opportunity for companies having business in these sectors not to mention the potential of your company and its large presence in these sectors for many years.

Substitutions of Traditional packaging and retail chains are the most important drivers for the market growth. The real opportunity lies in developing nations or emerging economies. The company being a fully integrated end-to-end packaging materials solution company, the window of opportunity is promisingly big. Innovation to create value added differentiation; ability to execute any quantum of order; ensuring an enviable speed to market reach puts the company in a good stead to double up its top-line in the coming years.

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 : 31.07.2025	DIN: 07542045