Kahan Packaging Ltd Management Discussions

The Management Discussion and Analysis Report for the financial year ended 31^st March, 2026 should be read in conjunction with the financial statements and related notes forming part of this Annual Report. The discussion below contains forward-looking statements based on the Companys current expectations, estimates and assumptions. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, raw material prices, customer demand, regulatory developments, competitive conditions, technological changes and other risks.

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian packaging industry continues to be an important component of the manufacturing and consumption ecosystem, serving diverse end-use industries including food and beverages, pharmaceuticals, personal care and cosmetics, consumer goods, chemicals, industrial products and e-commerce. The industry comprises manufacturers and converters of flexible and rigid packaging, paper and paperboard packaging, corrugated packaging, metal and glass packaging, labels and other specialised packaging solutions.

During FY 2025-26, the packaging industry continued to benefit from the growth of organised retail, processed food and beverages, pharmaceuticals, consumer products, e-commerce and quick- commerce. Increasing urbanisation, changing consumption patterns, smaller pack sizes, convenience-oriented products and the expansion of organised distribution channels continued to support demand for packaging solutions.

Flexible packaging remained an important part of the Indian packaging landscape. Industry estimates indicate that flexible packaging accounted for approximately 52.5% of Indian packaging volumes in 2025, while rigid plastics also continued to record strong demand.

The industry is also undergoing a significant transition towards sustainable and resource-efficient packaging. Increasing regulatory focus on plastic waste management, Extended Producer Responsibility ("EPR"), recyclability and recycled content is encouraging manufacturers and brand owners to redesign packaging structures and increase the use of recyclable and recycled materials.

Digital commerce has emerged as another important demand driver. The growth of e-commerce and quick-commerce has increased the requirement for corrugated boxes, protective packaging, mailers, tamper-evident solutions, labels and right-sized packaging. The Indian e-commerce packaging market is expected to continue expanding, supported by increasing online consumption and the development of logistics and fulfilment infrastructure.

At the same time, the industry remains highly competitive and fragmented, with participants ranging from large integrated manufacturers to regional converters and specialised packaging companies. Consequently, product quality, cost competitiveness, customer service, innovation, delivery capabilities and the ability to comply with evolving environmental requirements remain important competitive factors.

2. OPPORTUNITIES AND THREATS Opportunities

a. Growth in packaged consumption

Increasing consumption of packaged food and beverages, pharmaceuticals, personal care products, consumer goods and industrial products is expected to support long-term demand for packaging solutions. Increasing penetration of organised retail and changing lifestyles are also contributing to greater use of packaged products.

b. E-commerce and quick-commerce

The continued expansion of e-commerce and quick-commerce is creating opportunities for packaging manufacturers, particularly in corrugated, protective, flexible and customised packaging. Demand is increasingly shifting towards lightweight, right-sized, durable and return-friendly packaging solutions.

c. Sustainable packaging

The increasing focus on recyclability, recycled content, reduction of material usage and circularity presents opportunities for companies capable of developing packaging solutions with lower environmental impact. Sustainable packaging is increasingly becoming an important consideration for brand owners and consumers.

d. Regulatory-driven innovation

The implementation and strengthening of EPR and other waste-management requirements are encouraging the industry to develop recyclable packaging structures, improve traceability and strengthen linkages with recycling ecosystems. Companies with appropriate technical capabilities and compliance systems may benefit from this transition.

e. Product innovation and value-added solutions

There is increasing scope for value-added packaging incorporating improved barrier properties, lightweighting, enhanced shelf life, customised designs, security features and digital printing. Such solutions provide opportunities to improve product differentiation and customer retention.

f. Growth of pharmaceutical, food processing and consumer industries

The expansion of pharmaceutical manufacturing, food processing, personal care and consumer- product industries is expected to create sustained demand for specialised packaging solutions, subject to the Companys product portfolio and customer mix.

Threats

a. Volatility in raw material prices

Packaging manufacturers remain exposed to fluctuations in the prices of polymers, paper, paperboard, inks, adhesives, chemicals, aluminium and other inputs. Sudden increases in input costs may adversely affect margins where such increases cannot be passed on to customers.

b. Regulatory and environmental requirements

Increasingly stringent requirements relating to plastic waste, recycling, recycled content, EPR and sustainability may increase compliance costs and require investments in technology, processes and product redesign.

c. Intense competition

The industry remains competitive, with domestic and regional manufacturers competing on price, quality, delivery, product range and customer service. Pricing pressure may adversely affect margins.

d. Supply chain disruptions

Geopolitical developments, logistics disruptions, energy costs, availability of raw materials and international trade conditions may affect procurement costs and production schedules.

e. Technological changes

Rapid developments in automation, digital printing, manufacturing processes and packaging technologies require continuous investment. Failure to adopt appropriate technologies may affect competitiveness.

f. Changing customer preferences

Brand owners are increasingly seeking sustainable, lightweight, recyclable and customised packaging solutions. Companies that are unable to respond to these changing requirements may face pressure on market share and customer retention.

3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Companys performance during FY 2025-26 is to be assessed with reference to its principal products and business activities.

During the year, the Company continued to focus on maintaining product quality, improving operational efficiency, strengthening customer relationships and optimising the product mix.

Where the Company has only one reportable operating segment, the disclosure may be stated as follows:

The Company operates predominantly in the packaging business and accordingly has one reportable operating segment. Therefore, separate segment-wise financial performance is not applicable. The operational performance of the Company is discussed in conjunction with its overall financial performance.

The Company continues to monitor market demand, customer requirements, product profitability and capacity utilisation to optimise its product mix and improve operational efficiency.

4. OUTLOOK

The outlook for the Indian packaging industry remains positive, supported by structural demand drivers such as urbanisation, increasing packaged consumption, organised retail, food processing, pharmaceuticals, personal care, e-commerce and quick-commerce.

The industry is expected to increasingly focus on recyclable and sustainable materials, lightweighting, resource efficiency, recycled content and design-for-recycling. Sustainability requirements are expected to influence both product development and procurement decisions.

Digitalisation, automation and advanced printing technologies are also expected to play a greater role in improving production efficiency, reducing wastage, enabling shorter production runs and supporting customised packaging. Industry research indicates that paper and paperboard are gaining importance in e-commerce packaging, while biodegradable and compostable materials are expected to record comparatively faster growth.

The Company intends to remain focused on improving operational efficiency, maintaining product quality, strengthening its customer base, developing value-added products and managing costs prudently. The Company will continue to evaluate opportunities arising from changing market requirements while remaining mindful of the risks associated with raw material prices, regulatory developments and competitive pressures.

5. RISKS AND CONCERNS

The principal risks and concerns relevant to the Company and the packaging industry include:

Raw Material Risk: Volatility in the prices and availability of key raw materials may affect production costs and margins.

Demand Risk: Changes in consumer demand, economic conditions and spending patterns may affect demand from end-use industries.

Regulatory Risk: Changes in environmental, plastic waste management, EPR, labour, taxation and other applicable regulations may require changes to products, processes and compliance systems.

Competition Risk: Intense competition may result in pricing pressure and reduced margins.

Technology Risk: Rapid technological developments may require continuous investments in machinery, automation and digital technologies.

Supply Chain Risk: Disruptions in logistics, transportation, energy availability or raw material supply may affect production and customer servicing.

Customer Concentration Risk: Dependence on a limited number of customers, where applicable, may affect revenues in the event of loss or reduction of business from such customers.

Quality and Product Safety Risk: Failure to meet prescribed quality standards or customer specifications may result in claims, rejection of products, reputational damage or other financial consequences.

Cyber and Information Security Risk: Increasing digitalisation of business and manufacturing processes exposes the Company to cybersecurity and information-security risks.

The Company seeks to mitigate these risks through appropriate internal controls, supplier and customer management, quality systems, operational monitoring, compliance mechanisms and periodic review of business risks.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established internal control systems commensurate with the size, nature and complexity of its operations. The internal control framework is designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, safeguarding of assets, prevention and detection of fraud and errors, reliability of financial reporting and compliance with applicable laws and regulations.

The key elements of the internal control framework include:

• appropriate authorisation and approval procedures;

• segregation of duties;

• controls over procurement, inventory, production and sales;

• reconciliation and review of financial and operational information;

• controls over receivables, payables and cash management;

• periodic review of budgets and operational performance;

• statutory and regulatory compliance monitoring;

• information technology and access controls; and

• periodic internal review and audit processes.

The adequacy and effectiveness of internal controls are reviewed periodically by the management and, where applicable, by the Internal Auditors and the Audit Committee. Significant observations, if any, are reviewed and appropriate corrective measures are undertaken.

Based on the information available to the management, the Company believes that its internal control systems are adequate and commensurate with its operations.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company during FY 2025-26 should be read together with the operational performance and the audited financial statements forming part of this Annual Report.

Particulars	FY 2025-26	FY 2024-25	Change (%)
	(Figures in INR Lakhs)	(Figures in INR Lakhs)
Revenue from Operations	3037.67	2838.88	7.00%
Other Income	9.71	13.49	-28.02
Total Income	3047.38	2852.37	6.84%
Profit Before Tax	156.31	150.36	3.96%
Profit After Tax	116.97	112.10	4.34%
Earnings Per Share	4.30	4.12	4.37%

The movement in revenue and profitability during the year was primarily attributable to [increase/decrease in sales volumes, changes in product mix, raw material prices, operating costs, finance costs, depreciation, other income or other company-specific factors].

The Company continued to focus on cost optimisation, operational efficiency, working capital management and improvement in productivity during the year.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

Human resources continue to be an important component of the Companys operations. The Company seeks to maintain a skilled, motivated and responsible workforce and focuses on employee development, training, workplace safety and compliance with applicable employment requirements.

During FY 2025-26, the industrial relations of the Company remained cordial and satisfactory.

The total number of employees of the Company as at 31^st March, 2026 and as at 31^d March, 2025 are same i.e. 13 employees.

The Company continues to focus on employee capability development, retention of key talent and strengthening of skills required for operational efficiency and technological advancement.

9. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

In accordance with Regulation 34(3) read with Part B of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to disclose significant changes in specified key financial ratios, being changes of 25% or more compared with the immediately preceding financial year, along with explanations for such changes.

For detailed ratio analysis refer to note no. 36 of the Financial Statement.

10. FORWARD-LOOKING STATEMENTS

Certain statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable laws and regulations.

These statements are based on certain assumptions and expectations of future events and are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied due to factors including changes in economic conditions, customer demand, raw material prices, competition, government policies, regulatory requirements, technological developments, availability of resources and other factors beyond the Companys control.

The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.