Mahip Industries Ltd Management Discussions

This section shall include discussion on the following matters within the limits set by the listed entitys competitive position:

FORWARD-LOOKING STATEMENT

Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

A. Industry structure and developments

Flexible packages are used for consumers and in industrial applications, to protect, market, and distribute a vast array of products. Flexible products include rollstock, bags, pouches, labels, wraps, lidding, shrink sleeves and stretch film. From convenience and durability; ease in opening and resealing; overall cost saving; and high portability, flexibfe packaging has cemented itself in the packaging world, and has undoubtedly became a key contributor to packaging industry growth. This popularity is largely based on frequent technology advancements in this field; good barrier properties of flexible films; light weight and portability which acquire much less space and make it cost effective.

Though increased consumption of processed foods & beverages and, innovation in flexible packaging are driving factors to boost in flexible packaging material consumption, yet fluctuating raw material prices and stringent regulation on packaging material waste hinder its growth to some extent.

Technological advancements in packaging plays a vital role in driving the growth of flexible packaging market. Advanced technology in packaging has allowed companies for innovation in products instead of sticking to traditional methods of packaging. Due to this, many companies are investing in R&D and are coming up with advanced flexible packaging products with barrier resistance properties that offer resistance against heat and moisture and eliminates oxidation of foods. Such properties prove effective in maintaining the quality and consistency of food products while extending their shelf life without the use preservatives. Recent advancements in materials and production processes have reduced the weight of some flexible packages by up to 50%, consequently lowering product shipping costs while maintaining or improving product protection. Flexible packaging offers various environmental advantages viz. low raw material consumption, low carbon footprint, and relatively low waste produced as compared to conventional packaging formats.

The global flexible packaging market is valued at approximately $284.6 billion to $307.15 billion as of 2026. Driven by e-commerce, convenience foods, and sustainable material innovations, it is projected to grow to between $440 billion and $463 billion by 2033-2034, registering a steady Compound Annual Growth Rate (CAGR) of 4.5% to 6.3%, we are continuously tracking and evaluating the direct as well as the indirect influence of the pandemic on different end use industries. These insights are included in the report as a major market contributor. Technological innovation, sustainability trepidations, and attractive economics are among the reasons for the remarkable growth of flexible packaging in the last two decades, globally.

Owing to the rising focus on sustainability, traditional rigid packaging solutions are being substituted by innovative and more sustainable flexible packaging. The growing market demand for customer-friendly packages and high level of product protection is expected to boost flexible packaging as a viable and cost- effective substitute. E-commerce, digital printing, and sustainability are driving market development and growth. Customers are increasingly becoming willing to pay extra for certain products attributes boosted by flexible packaging. According to the Flexible Packaging Association, Flexible packaging is mainly used for food, cosmetics and pharma products. Beauty products manufacturers are also investing in eco-friendly packaging approaches to make more sustainable usage of plastics in the persona! care industry.

The market is likely to experience growth due to the increased adoption of blister plastic films, aluminum foils, and pouches in the pharmaceutical industry. The wide adoption of blister material, replacing the glass and rigid plastics, has resulted in the high application of lidding films. Paper and plastic films are widely used in blister packs, followed by aluminum foil because of their cost-efficiency. The US pharmaceutical packaging market is the major revenue contributor.

The growth in the flexible packaging industry in India is mainly driven by the food and the pharmaceutical packaging sectors. The large and growing Indian middle class, along with the growth in organised retailing in the country are fueling growth in the flexible packaging industry. Another factor, which has provided substantial stimulus to the packaging industry is the rapid growth of exports, which requires superior packaging standards for the international market. The Indian packaging industry is dominated by plastic flexible packaging. The traditional rigid packaging users have also been shifting to flexible packaging in recent times. According to industry sources, the main reason for this is that flexible packages are found aesthetically attractive, cost-effective and sturdy. Consumer preference for the use of convenient packaging and packaged products in affordable quantities in laminates is also one of the main reasons that have contributed to the growth of flexible packaging in India. The food-processing sector is the largest user of flexible packaging.

B. Opportunities and Threats

Opportunities

As an industry, Flexible packaging is robust and growing rapidly, with innovation, sustainability, and market differentiation driving growth. It is a trend that continues to gain great popularity. Technological advancement in flexible packaging materials make them suitable to far more consumer products today.

Changing the lifestyle of consumers along with rising demand for products that offer ease of convenience are the key attributes prompting the demand for portable packaging solutions. Packaging sector in India is classified into rigid and flexible segments, The global packaging market is estimated at USD 1.22 trillion in 2026 and is projected to grow to USD 1.44 trillion by 2031, registering a CAGR of 3.42% during 2026-2031.

Food & Beverage

Food and beverages remain the largest and most stable downstream opportunity for the packaging industry, driven by rising consumption of packaged snacks, staples, dairy and ready-to-eat products. Growth is increasingly skewed toward high-barrier flexible packaging, aseptic cartons and portion-controlled formats, supporting shelf life, safety and convenience. According to Mordor Intelligence, the India food and beverage packaging market was valued at USD 38.27 billion in 2025 and is projected to grow at a CAGR of 6.44% during 2026-2031, providing sustained volume visibility for packaging manufacturers.

Pharmaceuticals and Healthcare

Indias pharmaceutical sector offers a high-value, compliancedriven growth opportunity for packaging players. Rising domestic healthcare consumption and strong export momentum are driving demand for blister packs, bottles, vials, ampoules and secondary cartons, alongside increasing adoption of traceability and tamper-evidence features. Packaging demand in this segment benefits from stringent regulatory requirements and relatively lower price sensitivity, supporting margin stability.

E-Commerce and Quick-Commerce

E-commerce represents the fastest-growing downstream opportunity, reshaping packaging demand toward lightweight, durable and tamper-evident solutions optimised for lastmile delivery. Growth in quick- commerce and return-ready logistics is increasing demand for right-sized corrugated boxes, flexible mailers and protective cushioning systems. The India e-commerce packaging market was valued at USD 3.75 billion in 2025 and is forecast to grow at a CAGR of 12.48% through 2031, significantly outpacing overall packaging market growth.

Personal Care and FMCG

The personal care and FMCG segment is evolving toward premiumisation and brand differentiation, creating opportunities for aesthetically enhanced and functional packaging solutions. Growth in urban consumption and rising middle-class incomes are increasing demand for dispensing formats, resealable packs and visually differentiated packaging, particularly in skin care, home care and hygiene categories. Packaging plays a central role in brand positioning and consumer engagement in this segment. ^*

* Owing to the rising focus on sustainability, traditional rigid packaging solutions are being substituted by innovative and more sustainable flexible packaging. The growing market demand for customer- friendly packages and product protection is expected to boost flexible packaging as a viable and cost- effective substitute,

• E-commerce, digital printing, and sustainability are driving market development and growth. Customers are increasingly becoming willing to pay extra for certain product attributes boosted by flexible packaging. For instance, according to the Flexible Packaging Association, a huge percentage of consumers in North America are keen to pay more for tangible and functional packaging benefits, such as product protection, shipping friendly, and supply chain efficacy, among others.

• According to Flexible Packaging Association, demand for flexible packaging products is continuously increasing in pharma& cosmetic products.

Threats

Poor infrastructure facilities for recycling

Recycling of plastic packaging waste is a process that requires time consuming state-of-the-art infrastructure facilities. Fiowever, some parts of the world lack these facilities for recycling. Even in developed countries such as the US, the problem of sub-standard infrastructure for recycling persists. Every year, in the US itself, recyclable containers worth more than USD 11 billion are thrown away due to a lack of recycling facilities. According to the UN Environment Programme, the world produces around 330 million tons of plastic waste each year. To date, only 9% of the plastic waste ever generated has been recycled, and only 14% is collected for recycling now. The existing machinery infrastructure is ill-equipped to handle plastic waste,

immense Competition from the domestic and international player

The Flexible Packaging Market is highly competitive owing to the presence of multiple vendors in the market. The market appears to be moderately concentrated with the major players adopting strategies such as product innovation, mergers, and acquisitions in order to stay competitive in the market.

Regulatory constraints

Due to stringent government regulations, changing consumer preferences, and environmental pressures, manufacturers are steering their strategies toward circularity and leveraged new plastic technologies to develop recyclable and sustainable solutions that include specific properties such as oxygen, moisture, light, puncture, and chemical resistance, and easy-tear propagation. Key focus areas for manufacturers include the development of alternative bioplastics solutions such as polybutylene succinate and biopolyproplyene, along with the price and disposal of bioplastics.

C. Segment-wise or product-wise performance

The Company operates in single Segment i.e. manufacture of Paper and Paper Products.

D. Outlook

The global flexible packaging market Is segmented on the basis of material, packaging type, end-use industry, and region. On the basis of material, the market is segmented into paperboard, plastic, aluminum foil, PET films, and others. Aluminum foil segment further segmented into dried mixed, condiments, bakery and confectionery, meat, dairy, milk powder, and others. PET film segment further segmented into metalized PET film and inorganic coated PET film. Metalized PET film segment is fragmented into meat, vegetables and fruits, carbonated beverages, shelf stable food, dried mixed, and others. Inorganic coated PET film segment is further fragmented into bakery and confectionery, condiments, frozen food, aerated beverages, and others. By packaging type, it is divided into stand-up pouch, films, bag-in-box, and others. On the basis of end-use industry, it is segmented into food & beverages, personal care, pharmaceutical, household care, industrial, & others. Food & beverages segment further segmented into juices and aerated beverages, bakery and confectionery, dried mixed, condiment, meat, frozen food, spices, and others. On the basis of region, the market is studied across North America, Europe, Asia-Pacific, and LAMEA.

Major players operating in the global flexible packaging market include Berry Global Inc., Amcor Pic, FlexPak Services LLC, Mondi Group, Sealed Air Corporation, Constantia Flexibles, Transcontinental Inc., Coveris Holding SA, Huhtamaki, and Sonoco.

E. Risks and concerns

One of the major risks in the industry is the increase in the prices of our basic Raw Material, i.e. Kraft Paper, which may have an adverse impact on our operations and financial conditions. Besides this, the huge working capital requirements may be a matter of concern.

F. Internal control system and their adequacy

The Company has adequate and efficient internal and external control system, which provides protection to all its assets against loss from unauthorized use and ensures correct reporting of transactions. The internal control systems are further supplemented by internal audits carried out by the respective Internal Auditors of the Company and Periodical review by the management. The Company has put in place proper controls, which are reviewed at regular intervals to ensure that transactions are properly authorized, correctly reported and assets are safeguarded. The Audit Committee of the Board addresses issue raised by both the Internal and Statutory Auditors, to keep constant check on cost structure and to provide adequate financial and accounting controls and implement accounting standards.

In addition to the above, the Company has formulated a Vigil Mechanism (Whistle Blower Policy) for its Directors and Employees for reporting genuine concerns about unethical practices and suspected malpractices.

G. Discussion on financial performance with respect to operational performance

The financial performance of the Company for the Financial Year 2025-26 is described in the report of the Board of Directors of the Company. The financial statement of the company are also enclosed with this Annual report.

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

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

I. Cautionary Statement

Certain statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied therein. Important factors that could make a difference include cyclical demand and pricing in the Companys principal markets, changes in Government regulations and tax regime, economic developments within India and other ancillary factors.

Financial and Operations Performance

In 2026, Mahip Industries Limiteds revenue from operations stood at INR 910.47 Lakhs, Compared to INR 622.81 Lakhs in 2025, reflecting a stable revenue performance amid a challenging cost and demand environment.

EBITDA for 2026 was INR 179.79 Lakhs, Compared to INR (73.93 Lakhs) in 2025.

REVENUE TREND Revenue from operations

Year	Revenue from operations
2023	INR (207.24)
2024	INR 363.61
2025	INR 622.81
2026	INR 910.47

EBITDA and Profit After Tax

EBITDA: Operating profit (EBITDA) before exceptional items in 2026 stood at INR 179.79 Lakhs, reflecting an increase compared to INR (73.93 Lakhs) in 2025, driven by input cost movements, sales mix and operating leverage.

PAT: Profit after tax in 2026 was INR 280.31 Lakhs, compared to INR 8.10 Lakhs in 2025, year to year movement reflects operational performance and the impact of exceptional items relative to the prior year.

Earnings and Shareholder Returns

EPS: Earnings per share (excluding exceptional items) for 2026 stood at INR 1.81, compared to INR 0.05 in 2025, reflecting changes in profitability.

Reserves, Capital Expenditure and Asset Base

Reserves and Surplus: As at the end of 2026, reserves and surplus stood at INR (2,658.44) Lakhs, compared to INR (2,938.75) Lakhs in 2025, supported by retained earnings.

Fixed Assets: Fixed assets as at the end of 2026 were INR 274.00 Lakhs, compared to INR 289.11 Lakhs as at the end of 2025.

Key Financial Ratios

Ratio	2025-26	2024-25
Current Ratio	1.72	0.48
Trade Receivable Turnover Ratio	1.89	3.04
Inventory Turnover Ratio	19.07	4.33
Debt-Equity Ratio	-2.43	-1.90
Debt Service Coverage Ratio	0.17	0.02
Net Profit Ratio (%)	30.79	1.30
Return on Equity (%)	-32.05	-1.60

By the Order of the Board

Registered Office:
Survey No. 127, Jala Spur - Godhneshwar Dholka - Bagodara Highway, Ahmedabad - 387 810	Mahip Industries Limited
Place: Ahmedabad	Rajiv Govindram Agrawal
Date: 05/09/2026	Whole-Time Director and
	chairman
	DIN:01922581