KMC Speciality Hospitals India Ltd Management Discussions

1. Industry Structure and Developments Summary Global outlook:

The global paper recycling market is expected to reach an estimated $57.7 billion by 2031 with a CAGR of 3.5% from 2025 to 2031. The paper recycling market in India is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the increasing demand for recycled paper- based products, rising concern towards the depletion of environmental resources, and stringent government regulations promoting paper recycling.

The future of the paper recycling market in India looks promising with opportunities in the food & beverage, retail, electrical & electronic, printing & paper, and building & construction markets.

Emerging Trends in the Paper Recycling Market in India

The paper recycling market in India is experiencing rapid transformation driven by environmental concerns, technological advancements, and changing consumer behaviours. As India aims to reduce its carbon footprint and promote sustainable practices, the industry is adopting innovative solutions to enhance efficiency and scalability. Government policies and global sustainability commitments are further accelerating this shift, making paper recycling a critical component of Indias waste management strategy. The market is also witnessing increased awareness among consumers and businesses about the importance of recycling, leading to higher participation rates. These developments are collectively reshaping the landscape of paper recycling in India, creating new opportunities and challenges for stakeholders. Understanding these trends is essential for businesses, policymakers, and consumers to navigate the evolving market landscape effectively.

Recent Developments in the Paper Recycling Market in India

The paper recycling market in India is experiencing rapid growth driven by increasing environmental awareness, government policies promoting sustainability, and technological advancements in recycling processes. As India aims to reduce its carbon footprint and manage waste more effectively, the industry is witnessing significant transformations. The rise in urbanization and the expansion of the paper consumption sector further fuel this markets expansion. Innovations in recycling technology are improving efficiency and quality, making recycled paper more competitive with virgin paper. Additionally, collaborations between government agencies and private companies are fostering a more sustainable and circular economy. These developments collectively are shaping a resilient and environmentally conscious paper recycling landscape in India, promising long-term economic and ecological benefits.

- Growing Environmental Awareness: The increasing awareness among consumers and industries about environmental issues is driving demand for recycled paper products. This shift is encouraging manufacturers to adopt sustainable practices, leading to a surge in recycling activities. The governments campaigns and educational programs are further amplifying this trend, resulting in a more eco-friendly market. As a result, the industry is witnessing a significant boost in the adoption of recycled paper, which reduces deforestation and minimizes waste in landfills. This shift not only benefits the environment but also enhances the markets reputation and consumer trust. The rising demand for eco-friendly products is expected to sustain growth in the coming years, making environmental consciousness a key driver of the markets expansion.

- Government Policies and Initiatives: The Indian government has introduced various policies and initiatives to promote paper recycling and waste management. These include stricter regulations on waste segregation, incentives for recycling companies, and awareness campaigns. The Swachh Bharat Abhiyan and other programs are encouraging proper waste disposal and recycling practices across urban and rural areas. These policies are creating a conducive environment for industry growth by reducing illegal dumping and promoting formal recycling channels. Additionally, subsidies and tax benefits are attracting new players into the market, increasing competition and innovation. Overall, government support is pivotal in shaping a sustainable and organized paper recycling industry in India.

- Technological Advancements: Innovations in recycling technology are significantly improving the efficiency and quality of recycled paper. Modern sorting and de-inking processes enable higher purity levels, expanding the range of recycled paper products. Automation and AI-driven systems are reducing labor

costs and increasing throughput, making recycling more economically viable. New chemical treatments and eco-friendly bleaching methods are minimizing environmental impact while enhancing product quality. These technological improvements are enabling recyclers to meet international standards, opening export opportunities. As a result, the industry is becoming more competitive globally, attracting investments and fostering sustainable growth. Continuous R&D efforts are expected to further revolutionize the recycling process, ensuring long-term viability.

- Market Expansion and New Opportunities: The increasing demand for recycled paper in packaging, printing, and tissue products is driving market expansion. E-commerce growth and the rise of sustainable packaging are creating new opportunities for recycled paper manufacturers. Additionally, the development of rural collection centres and informal recycling networks is broadening the supply base. International markets are also opening up due to Indias improved recycling standards and quality. Strategic partnerships and investments are facilitating infrastructure development, enabling larger-scale operations. This expansion is creating employment opportunities and supporting local economies. The diversification of product applications and market channels is positioning India as a key player in the global recycled paper industry.

- Consumer Preference Shift: Consumers are increasingly favouring eco-friendly and sustainable products, influencing market dynamics. This shift is evident in the rising demand for recycled paper products in stationery, packaging, and printing industries. Brands are actively promoting their eco-conscious initiatives, which resonate with environmentally aware customers. The preference for biodegradable and recyclable materials is encouraging manufacturers to innovate and expand their product lines. This consumer-driven trend is fostering a competitive environment focused on sustainability, quality, and affordability. As awareness continues to grow, the market is expected to see sustained demand for recycled paper, reinforcing the importance of eco-friendly practices in business strategies.

These recent developments are collectively transforming the paper recycling market in India into a more sustainable, technologically advanced, and market-driven industry. Increased environmental awareness and supportive government policies are creating a favorable environment for growth. Technological innovations are enhancing efficiency and product quality, while expanding market opportunities and shifting consumer preferences are driving demand. Together, these factors are fostering a resilient industry that not only supports environmental goals but also offers economic benefits. The markets evolution is positioning India as a significant player in the global recycled paper industry, with long-term prospects for sustainable development and environmental conservation.

2. OPPORTUNITIES:

- Digital Packaging Solutions: Innovation in eco-friendly packaging materials is transforming the industry. The demand for sustainable packaging is rising among e-commerce and retail sectors, encouraging the use of recycled paper. This shift reduces reliance on virgin materials, lowers carbon footprints, and appeals to environmentally conscious consumers. Companies investing in biodegradable and recyclable packaging solutions are gaining market share, fostering a circular economy. The growth of digital printing and customized packaging further enhances this opportunity, making it a vital area for expansion and innovation.

- Educational and Office Supplies: The increasing adoption of recycled paper in educational institutions and offices is a significant growth driver. Governments and organizations are promoting eco-friendly practices, leading to higher demand for recycled notebooks, stationery, and printing paper. This application not only supports sustainability goals but also offers cost-effective solutions for bulk procurement. The integration of recycled paper into daily operations enhances brand reputation and aligns with corporate social responsibility initiatives. As awareness grows, this segment is poised for substantial expansion, influencing market dynamics positively.

- Industrial and Packaging Materials: Recycled paper is increasingly used in industrial applications such as pallets, cushioning, and packaging materials. The demand is driven by the need for lightweight, durable, and eco-friendly packaging solutions across manufacturing sectors. This application reduces waste and transportation costs while supporting environmental regulations. Innovations in recycled paper processing improve product quality, making it suitable for heavy-duty uses. The expansion of e-commerce and logistics sectors further amplifies this opportunity, contributing to sustainable industrial practices.

- Construction and Building Materials: Recycled paper products are emerging as sustainable alternatives in construction, such as insulation and wall panels. These materials offer thermal insulation, soundproofing, and eco-friendly benefits, aligning with green building standards. The growing focus on sustainable construction practices in India boosts demand for recycled paper-based building materials. This application not only reduces construction waste but also promotes resource efficiency. As green building certifications become more prevalent, the adoption of recycled paper in construction is expected to accelerate, opening new avenues for growth.

- Agricultural and Horticultural Uses: The utilization of recycled paper in agriculture, such as seedling trays and mulch films, is gaining momentum. These biodegradable products support sustainable farming practices by reducing plastic waste and enhancing soil health. The demand is driven by government initiatives promoting organic farming and eco-friendly agricultural inputs. Recycled paper-based products offer cost-effective, biodegradable, and environmentally friendly solutions for farmers. This application fosters a circular economy in rural areas and contributes to sustainable agricultural development, presenting a promising growth trajectory for the market.

3. Segment-wise Performance

The Company deals only in one segment i.e. procurement and supply of recycled paper. During the year operations in the FY 25-26, the company achieved a consolidated turnover of Rs. 6292.32 lakhs and earned a net profit after tax of Rs. 28.12 lakhs.

4. Outlook

The paper recycling market in India is experiencing rapid growth driven by increasing environmental awareness, government policies promoting sustainability, and technological advancements in recycling processes. As India aims to reduce its carbon footprint and manage waste more effectively, the industry is witnessing significant transformations. The rise in urbanization and the expansion of the paper consumption sector further fuel this markets expansion. Innovations in recycling technology are improving efficiency and quality, making recycled paper more competitive with virgin paper. Additionally, collaborations between government agencies and private companies are fostering a more sustainable and circular economy. These developments collectively are shaping a resilient and environmentally conscious paper recycling landscape in India, promising long-term economic and ecological benefits.

5. Risks and Concerns:

- High Operational and Processing Costs: Despite technological advancements, the Indian paper recycling industry faces high operational costs due to outdated equipment, energy consumption, and labor expenses. These costs impact profit margins and competitiveness, especially against virgin paper producers. Additionally, the need for continuous investment in upgrading facilities and maintaining quality standards adds financial strain. Overcoming cost barriers is essential for industry sustainability and expansion, requiring innovative solutions and government support to reduce expenses and improve efficiency.

- Lack of Awareness and Consumer Participation: Limited awareness about the benefits of recycling and sustainable practices hampers market growth. Many consumers and small businesses are unaware of proper waste segregation and recycling procedures, leading to contamination and inefficient collection. This results in lower-quality raw materials and increased processing costs. Enhancing public education, awareness campaigns, and incentivizing participation are critical to improving raw material quality and expanding the recycling ecosystem.

- Regulatory and Policy Challenges: While policies exist, inconsistent enforcement and lack of comprehensive regulations pose hurdles. Illegal dumping, unregulated waste collection, and inadequate infrastructure hinder industry development. Additionally, bureaucratic delays and lack of clarity in policies can discourage investment. Strengthening regulatory frameworks, ensuring strict enforcement, and streamlining procedures are necessary to create a conducive environment for sustainable growth and attract investments in recycling infrastructure.

6. Internal Control systems and their Adequacy

The Company has adequate control systems commensurate with the size of its business activities.

7. Financial Performance with respect to Operational Performance Revenues - Standalone

During the year under review, the Company on a standalone basis has recorded an Rs. 1096.81 lakhs as against Rs. 1232.32 Lakhs for the previous financial year. The Company incurred a net profit of Rs. (116.05)

Lakhs for the financial year 2025-26 as against the net profit after tax of Rs. 14.00 lakhs for the year 2024-25. Revenues - Consolidated

During the year under review, the Company on a consolidated basis has recorded the total revenue of the Company for the financial year 2025-26 was Rs. 6292.32 Lakhs as against Rs. 3705.77 lakhs for the previous financial year. The Company recorded a net profit of Rs. 28.12 Lakhs for the financial year 2025-26 as against the net profit after tax of Rs. 99.38 lakhs for the previous year.

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

There are no material developments in Human Resources / Industrial Relations during the year under review.

9. Details of any change in Return or Net Worth as compared to the immediately previous financial year.

FINANCIAL RATIOS:

STANDALONE

Particulars	2025-26	2024-25	Remarks
Current Ratio	1.60	2.79	Due to Increase in the trade payables
Debt-Equity Ratio	0.20	0.29	Due to increase in the share capital & reserves
Trade Receivables Turnover Ratio	1.27	2.71	Due to increase in the trade receivables
Inventory Turnover Ratio	5.89	6.49	Due to decrease in the Turnover
Debt Service Coverage Ratio
Operating Profit Margin (%)	(5.07)	1.16	Due to the losses incurred and increase in the equity share capital
Net Profit Margin (%)	(10.58)	1.14	Due to the losses incurred and increase in the equity share capital
Return on Net Worth	(5.07)	1.16	Due to the losses incurred and increase in the equity share capital

CONSOLIDATED

Particulars	2025-26	2024-25	Remarks
Current Ratio	1.66	2.20	Due to increase in the Trade Payable and Borrowings
Debt-Equity Ratio	0.76	1.08	Due to increase in the share capital and reserve balances
Trade Receivables Turnover Ratio	2.51	2.22	Due to increase in the revenue (i.e turnover)
Inventory Turnover Ratio	5.87	4.95	Due to increase in the revenue (i.e turnover)
Debt Service Coverage Ratio	0.17	0.23	Due to increase in the loan amounts
Operating Profit Margin (%)	6.67	15.66	Due to decrease in the Profits and Increase the Share capital
Net Profit Margin (%)	0.45	2.68	Due to decrease in the profits and increase the turnover
Return on Net Worth	1.05	4.42	Due to decrease in the profits & increase the share capital

Change in Return on Net worth as compared to the immediately previous financial year along with a detailed explanation thereof: During the year under review, the Companys consolidated Return on Net worth (RONW) experienced a decrease of 76.24% compared to the previous financial year. This variance is primarily attributable to the expansion of the Companys equity base. The total number of paid-up equity shares increased from 1.20 crore to 1.79 crore, thereby significantly enhancing the Share Capital and overall Net worth (Shareholders Funds)

Any other Sector Specific ratios, as applicable: NIL

10. Disclosure of Accounting Treatment

During the preparation of Financial Statements for the financial year 2025-26, the treatment as prescribed in the Note No. 2 to the Financial Statements regarding the Accounting Standards, has been followed by the Company. There are no significant changes in the treatment of Accounting Standards followed by the Company in the said financial year as compared to the previous financial year.

11. Cautionary Statement

Although we believe, we have been prudent in our projections, estimates, assumptions, expectations or predictions while making certain statements, realization is dependent on various factors. Should any known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information.

For and on behalf of the Board For Bandaram Pharma Packtech Limited

Date: 13.08.2026
Place: Bengaluru

Deepak Reddy Bandaram
Chairman and Managing Director
DIN:07074102

Bhandaram Sathyavathi
Director
(DIN: 07638353)