Manaksia Ltd Management Discussions

Global economic overview

The global economy grew marginally at a 3.4% in 2025 compared to 3.3% in the previous year, influenced by the US tariff shock of April 2025. Despite being partially unwound through subsequent trade deals, it left effective tariff rates well above pre-2025 levels and heightened trade policy uncertainty.

Advanced economies witnessed a marginal growth from 1.8% in 2024 to 1.9% in 2025, while emerging market and developing economies demonstrated relative resilience, expanding by 4.4% in 2025 compared to 4.3% in 2024.

Global inflation continued its multi-year downward trend in 2025, declining to an estimated 4.1% from 5.8% in 2024.

Regional growth (%)	2025	2024
World output	3.5	3.5
Advanced economies	1.9	1.9
Emerging and developing economies (Source: IMF, un.org)	4.5	4.5

Performance of the major economies, 2025

Outlook

Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook report adopted a reference forecast instead of a conventional baseline, assuming the war remains contained in duration, intensity, and reach, with disruptions easing by mid-2026, in line with commodity futures as of 10th March, 2026.

Under this reference view, global growth is projected at 3.1% in 2026 and 3.2% in 2027. Global inflation is expected to rise to 4.4% in 2026 before easing to 3.7% in 2027.

(Source: OECD Interim Economic Outlook, IMF, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan)

Indian economic overview

The Indian economys real GDP grew at 7.7% in FY 26, compared to 7.1% in FY 25. This growth was driven by strong consumption and increasing investments, reaffirming Indias position as the fastest-growing major economy.

Indias Real GDP at Constant Prices was estimated at H323.12 Lakh Crore in FY 2025-26, compared with H299.89 Lakh Crore in FY 2024-25.

Growth of the Indian economy

	FY 23	FY 24	FY 25	FY 26
Real GDP growth (%)	7.0*	7.2	7.1	7.7

E: Estimated. Note: FY 24 figure restated under new base year 2022-23. (Source: MoSPI)

* The FY 23 figure (7.0%) is from the old base year series (2011-12) as the new series back-data for FY 23 will only be available after December 2026.

Growth of the Indian economy quarter by quarter, FY 2025-26

	Q1FY 26	Q2FY 26	Q3FY 26	Q4FY 26
Real GDP growth (%)	6.7	8.4	7.8	7.8

Note: Q2 revised upward from 8.2% and Q3 from 7.35% under the new base year 2022-23 series released 27th February, 2026. Q4 remains an estimate. (Source: MoSPI)

Inflation, policy and currency dynamics

Inflation remained benign through much of FY 26, with full-year CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment.

However, macro stability was accompanied by currency volatility.

The Indian rupee depreciated sharply by 9.88% during FY 26 - its steepest fall since FY12 — touching H94.83 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Capital flows and market behaviour

Foreign portfolio investors remained risk-averse, withdrawing a record H1.8 trillion during FY 26 - the largest outflow in 36 years. However, strong domestic institutional inflows of H8.50 trillion provided a crucial counterbalance, highlighting the growing maturity and depth of Indias domestic capital markets.

Indias market capitalisation declined 8% year on year in FY 26 to USD 4.5 trillion from USD 4.83 trillion in FY 25, marking the sharpest drop since FY 23. The BSE Sensex declined 7% or 5,467 points in FY 26, against a gain of 5.1% or 3,763 points, in FY 25. Similarly, the Nifty 50 fell 5%, or 1,188 points, in FY 26, compared to a gain of 5.3% or 1,192 points, in FY 25. against a gain of 5.34%, or 1,192 points, in the corresponding period. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures under Donald Trump, which weighed on global investor sentiment.

Gold prices surged 64.1% during FY 26 reflecting global risk aversion and safe- haven demand.

Indias net direct tax collections rose 5.12% y-o-y to H23.40 Lakh Crore in FY 26, though this fell short of the Revised Estimate of H24.21 Lakh Crore by approximately H80,000 Crore. Corporate tax collections came in at H10.99 Lakh Crore against a target of H11.09 Lakh Crore, while personal income tax (including STT) stood at H12.41 Lakh Crore against a target of H13.12 Lakh Crore — the larger of the two misses, partly reflecting the income tax relief extended to the middle class in the Union Budget 2025-26

Banking sector

Indias banking sector reflected improving financial health, with the gross non-performing asset ratio declining to a multi-decadal low of 1.8% as of March 2026, indicating stronger asset quality and disciplined lending practices.

This stability was mirrored in profitability metrics, as scheduled commercial banks reported a return on assets of 1.3% and a return on equity of 12.6% for the full year 2025-26, underscoring sustained operational efficiency and a healthier balance sheet trajectory. Banks also remained well capitalised, with the capital to risk- weighted assets ratio (CRAR) at 17.7% and the Common Equity Tier-1 (CET1) ratio at 15.3%, both multi-decadal highs, while profit after tax for scheduled commercial banks crossed H4,05,268 Crore in 2025-26, up from H3,78,163 Crore the previous year

Indias growth story

Real Gross Value Added (GVA), which measures economic output excluding taxes and subsidies, grew 7.9% in FY 26, compared with 7.3% in FY 25. At current prices, nominal GVA rose 9.1% to H314.87 Lakh Crore from H288.54 Lakh Crore a year earlier.

The tertiary services sector remained a key growth driver, expanding by 9.0% in FY 26 and increasing its share in nominal gross value added to 54.3% from 52.8% in FY 25, supported by broad-based momentum across segments.

During FY 26, financial, real estate,

IT and professional services grew by 9.9%, while trade, hotels, transport, communication and broadcasting recorded a strong 10.1% growth, and public administration and other services expanded by 5.8%.

The secondary sector grew 9.1%, accelerating from 8.0% in the previous year, driven by manufacturing alongside construction growth of 7.1%. This combination of services-led scale and manufacturing acceleration is shaping a more balanced and resilient economic structure.

Consumption and investment

During FY 26, Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) maintained above-7% growth, reflecting a well-balanced demand composition across household spending and investment activity.

Growth catalysts

Policy-led consumption boost: The Union Budget FY 27s tax relief measures- particularly income tax exemptions up to H12 Lakh- are expected to stimulate discretionary spending and reinforce consumption-led growth.

Anticipatory Pay Commission impact: The 8th Pay Commission, though expected to be implemented from FY28, is already shaping consumer sentiment, creating a forward consumption impulse.

Monetary stability: The

Reserve Bank of Indias calibrated stance, with the repo rate at 5.25%, balances inflation risks with growth support, ensuring macroeconomic stability.

Credit expansion:

Improved banking health and liquidity conditions are expected to sustain strong credit growth across MSMEs, housing, and retail segments.

Fiscal prudence with growth focus: The Union Budget maintains fiscal discipline while prioritising infrastructure, MSME support, skilling, and innovation-key levers for long- term productivity.

Outlook

The year under review underscores a defining divergence: a world grappling with uncertainty, and an India navigating it with confidence.

In a global environment marked by fragmentation and caution, India stands out as a rare convergence of stability, scale and structural opportunity.

The World Bank has revised its FY 27 growth estimate upward to approximately 6.6%, reflecting resilient domestic momentum even as growth moderates from the previous year. India is expected to retain its position as the fastest-growing major economy.

Growth will be shaped by a combination of strong domestic demand and resilient private consumption, supported by low inflation and GST rationalisation, alongside stable export performance with improved access to key markets. This momentum is further reinforced by sustained policy support, ongoing economic reforms, and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending, and uncertainty in global demand, Indias macroeconomic fundamentals remain strong.

Over the medium term, sustained consumption, gradual investment recovery, and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth.

(Source: Upstox, Economic Times, India Today, 5paisa, Livemint, The Logical Indian)

Nigerian construction sector review

The Nigerian construction industry remains a key driver of economic development, contributing approximately N19.36 trillion in nominal terms in 2025, up from N16.29 trillion in 2024, with real growth of 5.53% in 2025 compared to 4.16% in the previous year. The sector spans residential, commercial, industrial, and infrastructure development, with public infrastructure accounting for over 60% of total output, reflecting the governments commitment to addressing Nigerias estimated USD 3 trillion infrastructure deficit over the next 30 years. Rapid urbanisation and population growth continue to intensify the housing shortage, currently estimated at nearly 14.9 Million units.

Despite strong demand fundamentals, the sector faces macroeconomic pressures, including elevated inflation, currency movements, and high interest rates, which have raised input costs particularly for imported materials. Regulatory bottlenecks, bureaucratic delays, and skilled labour shortages further constrain project execution and profitability.

The industry is expected to grow by 3.1% in real terms in 2026, supported by housing and transport investments and improved credit flows. Construction sector real GDP growth of 5.08% year- on-year in Q4 2025. Over 2025-2028, the sector is forecast to expand at an average annual rate of 3.1%, driven by continued infrastructure development, transport, electricity, and oil and gas investments.

At the start of the 2025-26 fiscal year, Nigerias foreign direct investment (FDI) picture showed mixed signals. FDI inflows remained modest relative to total capital imports, with FDI reaching approximately USD 923 Million during the 2025 calendar year, representing about 4.0% of Nigerias total foreign capital inflows, even as overall capital imports surged to US USD 23.22 Billion. While direct investment improved compared to the previous year, long-term industrial investment remained relatively subdued despite strengthening macroeconomic conditions.

In line with efforts to boost long-term productive investment, Nigeria has also continued to secure strategic infrastructure funding. Notably, the government approved a USD 652 Million funding package from the China Exim Bank to construct a key road linking the Lekki Deep Sea Port and the Dangote Petroleum Refinery in Lagos to at least a dozen southern states designed to serve as a primary evacuation corridor for imports and petroleum exports.

This evolving investment landscape reflects both opportunities and challenges: while headline foreign capital is improving, the composition still leans heavily toward short-term portfolio flows, underscoring the need for sustained reforms to attract more long-term FDI into productive sectors such as infrastructure and construction.

(Source: Global Data.com, Agusto Research, Naira Metrics, Reuters)

Nigerian metal packaging sector review

Nigerias metal packaging market is estimated at approximately USD 11 Billion in 2025 and is projected to grow at a CAGR of 9.6% over the next five years, reaching nearly USD 17 Billion by 2031. The industrial manufacturing segment accounts for a substantial share of demand, supported by government initiatives focused on strengthening local production and reducing import dependence.

However, the industry faces several headwinds, including volatile raw material prices particularly aluminium and steel, which pressure margins and raise production costs. Infrastructure gaps and logistics inefficiencies further constrain distribution and operational efficiency. In addition, competition from informal market players offering lower-priced alternatives challenges established manufacturers striving to maintain quality and compliance standards. Addressing these structural issues will be critical to sustaining long-term growth in Nigerias metal packaging sector.

Nigerias packaging market was valued at USD 0.92 Billion in 2025 and is projected to grow from USD 0.94 Billion in 2026 to reach USD 1.09 Billion by 2031, at a CAGR of 2.93% during the forecast period (2026-2031)

Plastic continues to dominate due to cost efficiency and established processing infrastructure. However, sustainability regulations and the expansion of e-commerce are accelerating demand for paper-based and flexible packaging formats.

The commissioning of the Dangote polypropylene complex is expected to reduce reliance on imported resins, while tighter monetary conditions are encouraging greater local sourcing. Over the long term, opportunities are strongest for players investing in recycling infrastructure, high-barrier packaging for agro-exports, and anti- counterfeit solutions.

(Source: 6W Research, Research and Markets)

The global aerosol packaging market is projected to grow from USD 8.08 Billion in 2026 to USD 12.13 Billion by 2035, registering a CAGR of 4.62% during the forecast period. Aerosol packaging serves a broad range of consumer and industrial applications,

B using propellants to dispense liquids or fine particles efficiently across segments such as personal care, home care, automotive, and healthcare.

Rising consumer preference for premium personal care products remains a key growth driver, as manufacturers increasingly adopt aerosol formats for convenience and controlled delivery. Indias cosmetics market is expected to reach USD 25.39 Billion by 2034, reinforcing demand for innovative and efficient packaging solutions in the region.

The rapid expansion of e-commerce is also supporting market growth.

U.S. ecommerce sales reached approximately USD 1.234 trillion in 2025, up 5.4% year-on-year, accounting for approximately 16.4% of total retail sales on a Commerce Department basis. The continued rise of online shopping is driving demand for lightweight, durable, and user- friendly packaging formats, further strengthening the outlook for aerosol containers.

(Source: Global Market Insights, Towards Packaging)

Company review

Manaksia Limited maintains a significant and diversified operational presence in Nigeria through its network of subsidiaries. The Company is engaged in the manufacturing of a wide array of industrial and consumer products. Its offerings include galvanized steel coils and sheets, colour-coated steel, and pre-painted aluminum coils and sheets, catering to construction, infrastructure, and industrial applications.

The group also produces high-quality metal closures, paper packaging solutions, and non-ferrous alloys, with a particular focus on automotive components. The Nigerian subsidiary is equipped with state-of-the-art facilities to produce kraft paper, supporting both domestic and industrial requirements.

Through its integrated manufacturing operations, Manaksia Limited continues to strengthen its position in the Nigerian market while delivering high-quality products across multiple sectors, emphasising innovation, operational excellence, and sustainability.

Key ratios

Regional growth	FY 26	FY 25
EBlTDA/turnover (%)	9.70	13.81
Debt-equity ratio (x)	0.04	0.04
Return on net worth (%)	7.00	10.00
Book value per share (H)	110.28	87.31
Earnings per share (H)	7.99	8.54
Debtors turnover ratio (x)	11.56	12.62
Inventory turnover (days)	46.87	52.55
Interest coverage ratio (x)	21.78	9.30
Current ratio (x)	7.34	6.28
Net profit margin (%)	6.00	7.00
Operating profit margin (%)	5.00	7.00

Reason for change in net worth

Unlike the sharp currency-led erosion of previous years, FY 2025-26 saw a reversal in trend, with the Nigerian Naira appreciating against major currencies through the year after several years of steep depreciation.

This strengthening was supported by improved external reserves at the Central Bank of Nigeria, a tighter monetary policy stance, and reduced foreign exchange demand following import substitution in the refining sector. As the Companys Balance Sheet items are restated at the exchange rate prevailing at each reporting date, this appreciation contributed positively to the translation of the Companys African net assets, supporting an increase in net worth to ?723 Crore as of 31st March, 2026, from ?572 Crore a year earlier, a rise disproportionate to the years net profit of ?52 Crore, reflecting the favourable currency translation effect.

Risk management

Currency risk

Manaksia Limiteds extensive operations in Africa naturally expose the Company to foreign exchange volatility, especially fluctuations in the Nigerian Naira and other operating currencies. Such movements can affect

cost structures, earnings, and the ability to discharge foreign-currency denominated obligations. In recent periods, currency instability in Nigeria has led to foreign exchange losses reported in the Groups consolidated financial results, highlighting the ongoing relevance of this exposure.

Mitigation: The Company actively manages both short term and long term currency exposures using hedging instruments and financial strategies designed to reduce the impact of exchange rate movements on financial performance.

Regulatory risk

Operating across multiple jurisdictions means that Manaksias business is influenced by varying regulatory landscapes. Policy changes, new compliance frameworks, or shifts in taxation could introduce operational uncertainty or require rapid adaptation.

Mitigation: Robust internal tracking of regulatory developments, stringent compliance systems, and constructive engagement with regulators and industry associations help the Company remain aligned with evolving legal frameworks and maintain operational effectiveness. Continued full compliance was observed in FY 2025- 26 with no regulatory censure reported.

Political risk

Political and policy instability, particularly in Nigeria, can create a challenging business environment that affects investor confidence and operational planning.

Mitigation: The Companys diversified product portfolio and broad demand base help cushion its business from localised political shifts. Products that meet essential and mass market needs tend to be less sensitive to political disruptions, aiding in continuity of operations.

Finance and liquidity risk

Securing cost effective financing is vital for capacity expansion, working capital operations, and strategic investments. Constraints on funding access or rising borrowing costs could limit growth potential.

Mitigation: Manaksia has strengthened its financial position with prudent capital management. In FY 2025-26, the debt equity ratio was improved/ unchanged while maintaining healthy interest cover, enhancing financial flexibility for future investments.

Cultural risk

Operating across diverse cultural and linguistic environments can pose challenges in market engagement, relationship building, and business practices.

Mitigation: The Company has built long standing relationships with over 70-90% of its distributor and customer base for more than five years, underpinning strong cross cultural engagement and trust.

Quality and supply chain risk

Maintaining consistent product quality throughout production and logistics is critical. Damage or deterioration in transit could harm customer satisfaction and brand equity.

Mitigation: The Company leverages established scale advantages, technology, and deep market insight to deliver reliable, cost competitive solutions that reinforce its market leadership.

Competition risk

The caps, crowns, and metal sheets segment has seen an influx of smaller local players, intensifying competition.

Mitigation: Manaksia leverages economies of scale, advanced technology, and deep consumer insights to provide reliable, high-quality solutions at competitive prices, maintaining market leadership.

Opportunities and threats

Through a diversified product portfolio and an extensive presence across domestic and international markets, the Company mitigates risks and implements robust safeguards to address potential challenges committees further support this governance structure by evaluating processes, identifying potential risks, and ensuring timely corrective actions, thereby reinforcing operational integrity and accountability throughout the Company.

Internal control systems and its adequacy

Manaksias internal control and risk management frameworks are meticulously designed and closely aligned with the principles of its corporate governance code. These systems are deeply embedded across the organisation, ensuring that all levels of personnel are actively engaged in implementing policies, monitoring operations, and executing their responsibilities with diligence.

The Board of Directors provides overarching oversight, strategic guidance, and policy direction, while supervising the Executive management team. Dedicated monitoring

Human resources

Manaksia Limited considers its workforce to be the cornerstone of its competitive advantage. Leveraging a team with diverse industry experience and specialised technical expertise, employees drive the Companys commitment to innovation and excellence. Guided by a progressive HR philosophy that challenges conventional approaches, Manaksia focuses on initiatives that support both professional growth and personal well-being. By promoting work-life balance and cultivating a culture of pride, inclusion, and belonging, the Company ensures that its people remain motivated, engaged, and aligne with organisational goals.

Cautionary statement

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be forward looking statements within the meaning of applicable securities laws and regulations. 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 realised by the Company. Actual results could differ materially from those expressed in the statement or implied due to the influence of external factors that are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments.