Neeraj Paper Marketing Ltd Management Discussions

INDURY RUCTURE AND DEVELOPMENT

OUTLOOK OF PAPER INDURY:

India ands as one of the large manufacturers and consumers of paper globally. With a wide range of products including writing and printing paper, newsprint, packaging paper, and tissue paper, the paper indury emerges as one of the fa-growing businesses in India. The outlook for the paper and packaging indury in India is optimiic, driven by several factors including the countrys growing population, increasing urbanization, and rising disposable incomes. The rapid expansion of e-commerce is fueling demand for packaging materials, while a growing focus on suainability is prompting the indury to innovate greener solutions.

Currently, the paper indury in India is valued with a revenue of approximately 80,000 crore rupees annually. India is home to around 850 paper mills, which collectively produce about 25 million tonnes of paper each year. This production volume is expected to rise to approximately 35 million tonnes by the iscal year 2030, re lecting the robu demand for paper products across various sectors.

Indias outlook for FY26 is characterised by a blend of resilience and cautious optimism, navigating a complex global landscape. The countrys large domeic market continues to provide a bu er again external shocks, and ructural reforms are expected to gradually enhance productivity and ef iciency. Several key factors are expected to shape Indias economic trajectory. Continued government focus on infraructure development, evidenced by suained public invement, is likely to be a signi icant growth driver. These invements are crucial for crowding private capital expenditure and are vital for long-term economic expansion. The ongoing digitalisation drive and policy support for manufacturing, including initiatives like the PLI scheme, are also expected to contribute positively. However, the outlook is not without its challenges. Fitch Ratings has revised Indias GDP growth foreca for FY26 downward to 6.4%, citing heightened global trade tensions and a moderation in global growth projections.

The indury is expected to face margin pressures due to increasing input cos, cheaper imports, and new capacity additions. Despite short-term margin contractions and high import volumes impacting domeic manufacturers, long-term prospects remain positive.

The rising literacy rates, increased indurial activity, advancements in technology, suainable practices and greater demand for packaging materials are the factors that are promising 6% to 7% annual growth in the paper indury in India.

With such promising growth in the future of the paper indury in India, it has become one of the be business ideas and invements to art with. Government initiatives like "Make in India" and infraructure development projects are expected to boo manufacturing activities and reamline supply chains.

Technological advancements are enhancing productivity and quality, while rising export potential o ers opportunities for market expansion.

Despite challenges such as luctuating raw material prices and competition from alternative materials, rategic invements and a commitment to suainability can help the indury capitalize on opportunities and rengthen its position in the global market

SCOPE AND DEMAND OF PAPER INDURY IN INDIA

The Indian paper packaging market, valued at $12.87 billion in 2025, is projected to experience robu growth, exhibiting a Compound Annual Growth Rate (CAGR) of 6.63% from 2025 to 2033. This expansion is fueled by several key drivers. The burgeoning e-commerce sector signiicantly contributes to the demand for corrugated boxes and other packaging solutions for safe and eficient product delivery. Simultaneously, the increasing consumption of processed foods, beverages, and personal care products fuels demand across various paper packaging segments, including folding cartons and liquid cartons. Furthermore, the growing preference for eco-friendly and suainable packaging options is bolering the adoption of paper-based alternatives to plaics, further accelerating market growth. However, challenges such as luctuating raw material prices (particularly pulp and paper) and ringent environmental regulations pose potential reraints.

The segmentation analysis reveals signi icant opportunities within speci ic end-user induries. Corrugated packaging dominates, driven by the growth of e-commerce and the food & beverage sector. Folding cartons ind application in diverse sectors like healthcare, pharmaceuticals, and consumer goods, while liquid cartons cater primarily to the dairy and beverage induries. Regional variations in consumption patterns and infraructure development will in luence market dynamics, with urban areas likely experiencing faer growth compared to rural regions. The foreca period (2025-2033) is expected to witness continued market expansion, driven by the factors mentioned above, leading to considerable invement opportunities for both eablished players and new entrants in the Indian paper packaging landscape. Future growth will hinge on companies ability to adapt to suainable practices, optimize supply chains, and leverage technological advancements to improve ef iciency and reduce cos.

INDIAN PAPER PACKAGING INDURY TRENDS

The Indian paper packaging market is experiencing robu growth, driven by a burgeoning population, rising disposable incomes, and a booming e-commerce sector. Key market insights reveal a growing preference for suainable and eco-friendly packaging solutions, pushing companies to inve in recycled content and biodegradable materials. This trend aligns with increasing environmental awareness among consumers and ringent government regulations. The food and beverage indury remains a major driver of growth, followed by the pharmaceuticals and e-commerce sectors. The increasing demand for convenient and tamper-evident packaging is fueling innovation in design and functionality. The rise of organized retail and the expansion of the cold chain logiics infraructure are also positively impacting the indurys growth trajectory. Furthermore, the increasing adoption of lexible packaging solutions and the growing demand for cuomized packaging are reshaping the market dynamics. The indurys competitiveness is shaped by factors such as raw material cos, energy prices, and technological advancements. Companies are adopting rategies such as backward integration and rategic partnerships to mitigate risks and enhance their competitiveness in this dynamic market. The shift towards digital printing is increasing the scope of cuomization and value addition, further fueling market growth.

GOVERNMENT INITIATIVES

The Union Budgets focus on manufacturing and MSMEs is expected to boo demand for paper and packaging materials across multiple sectors for the growth of the paper indury, a paper manufacturers body said on Monday.

The Indian Paper Manufacturers Association (IPMA) in a atement said the Union Budget lays a rong emphasis on booing consumption, manufacturing and suainability, which aligns well with the growth of the paper indury in India.

The Indian government is actively supporting the pulp and paper indury through various initiatives focused on booing production, promoting suainability, and enhancing research and development. Key areas include encouraging eco-friendly practices, incentivizing green technologies, and rengthening the domeic indury to compete with imports.

The Indian government supports the pulp and paper indury through various initiatives focused on research and development, suainability, and resource management. These include the reconitution of the Development Council for Pulp, Paper & Allied Induries (DCPPAI), and the eablishment of the Central Pulp & Paper Research Initute (CPPRI) for research and development. The government also encourages farm forery, particularly for pulpwood cultivation, and promotes suainable practices like wae recycling and energy ef iciency.

Key Government Initiatives:

Research and Development:

The CPPRI, an autonomous body under the Department of Indurial Policy & Promotion (DIPP), plays a crucial role in promoting research and development in the pulp and paper indury.

The CPPRI focuses on developing technologies for utilizing non-conventional raw materials, improving pulping and bleaching processes, and enhancing the suainability of the indury.

Initiatives like the UNIDO project, supported by DIPP, aim to develop and adopt appropriate technologies for enhancing the suainability of the Indian paper and pulp indury.

Suainability and Environmental Initiatives:

The Perform, Achieve and Trade (PAT) scheme under the National Mission for Enhanced Energy Eficiency (NMEEE) has signi icantly improved energy eficiency in the paper indury, with the indury exceeding targets for reducing speci ic energy consumption.

The indury is also adopting advanced process controls, digital tools, and machine learning models to optimize operations, reduce wae, and improve resource management.

There are ongoing e orts to address the environmental impact of the indury, including water usage, ef luent discharge, and energy consumption.

The Corporate Responsibility for Environmental Protection (CREP) has been inrumental in driving voluntary norms for water and energy usage, as well as ef luent discharge.

Farm Forery and Raw Material Sourcing:

The government encourages farm forery, particularly the cultivation of pulpwood species, through initiatives like providing quality planting material and technical advice to farmers.

Policy Support:

Initiatives like "Make in India" and G reforms are creating a more conducive environment for the paper and packaging indury.

The government is also focusing on developing suainable packaging solutions and minimizing plaic packaging.

Challenges and Future Directions:

The indury faces challenges in implementing ricter environmental norms and adopting cleaner technologies.

There is a need for continuous research and development e orts to develop co-e ective solutions that can be adopted by smaller units.

The indury is also looking towards innovation and advanced technologies to enhance its suainability and competitiveness.

SWOT ANALYSIS OF THE INDIAN PAPER AND PACKAGING INDURY

RENGTHS

? Large and Growing Domeic Market ? Availability of Personnel Across All Levels ? Well-Developed Printing Indury

? Rich Know-How in Non-Wood Pulping And Applications ? The packaging board segment is growing attractively ? Wide variety of paper is traded ? There is increased recyclability of wae paper

WEAKNESSES

? Small and Fragmented Indury ructure ? Environmental Hazards

? Many economically unviable plants

? There is a growing requirement of scale to survive

THREATS

? Mills Lacking International andards ? Government Policies

? High Capital Cos Deterring Invements Conclusion

? Cos of raw materials have increased hence the total co increased ? There is growing competition from imports ? Digitalization is a ecting paper demand

OPPORTUNITIES:

? Enormous Domeic Market Potential ? rong Fore Plantation Potential

? Attractive demand headroom from a lower per capita consumption perspective ? Growing consumption of packaging paper/board in food and pharma sector ? Growing demand from downream sectors (Kraft, corrugation, duplex) ? Innovative product creation possibilities ? Progressive ban on single-use plaic to widen the market

SEGMENT -WISE /PRODUCT WISE PERFORMANCE

Company is engaged in trading of paper, wae paper and chemical. During the year 2024-25, turnover of Paper, Paper Board, chemical and Other Paper items contributed in the gross turnover of the Company which is as follows:

Revenue from products
S.No Products	Total (in Rs.)
	192533844.38
1 Duplex
	1037305814.70
2 Kraft Paper
	498762332.05
3 Paper Wae
	56708378.63
4 Poer Paper
	167231095.00
5 Maize arch "Unicorn"
	3212500.00
6 Others (Imperia Dazz)

OUTLOOK

Looking at FY 2026, the Indian paper indury anticipates a recovery with improved operating margins. The indurys pro it margins are expected to improve over the next 4-6 quarters, according to a report by BOBCAPS. This will be driven by abilising raw material cos, potentially lower import volumes, and rong demand from packaging, e-commerce, and education.

From a medium-term perspective, Indias growing FMCG sector and high spending in education, coupled with growth in organised retail and demand for better quality paper as well as more health consciousness of people, etc., are triggering factors of the growth prospects of the Indian Paper Indury. The Indian Paper Manufacturers Association (IPMA) projected a CAGR of 8.2% over the next ive years, aligning with national economic growth trends. This optimism is underpinned by signi icant invements totalling 25,000 crore in capacity expansion and technological modernisation, focusing on reducing carbon footprints and enhancing product quality.

RISKS AND CONCERN

Neeraj Paper operates in a dynamic environment characterized by luctuating raw material cos, indury cyclibality and other volatile challenges. Recognizing these factors, NPML has inituted a robu risk management framework to proactively identify, assess, and mitigate potential risks, ensuring suainable growth and operational resilience.

In accordance with Companies Act, 2013 and liing Regulation, the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted eps for framing, implementing and monitoring the risk management plan for the company. In todays challenging and competitive environment, rategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Invements, retention of talent and expansion of facilities. Business risk, inter-alia, further includes inancial risk, political risk, idelity risk, legal risk.

This indury, which goes a long way in India, is fraught with multiple issues, viz., high raw material cos, supply chain disruptions, and market fragmentation. These seemingly intractable issues require concentrated attention on inveing in advanced machinery and technology, enhancing supply chain management and ef iciency, and expanding product lines to meet evolving market demands. To be sure, these are dif icult issues, but by no means undoable.

INTERNAL CONTROL SYEM AND ADEQUACY

The Company has adequate internal control procedures commensurate with the size of the Company and the nature of its business. These syems are designed to ensure that all the assets of the company are safeguarded and protected again any loss and that all the transactions are properly authorized recorded and reported. The internal audit is entrued to M/s VPSJ & Co. a irm of Chartered Accountants.

The main thru of internal audit is to te and review controls, appraisal of risks and business practices. The Audit Committee of the Board of Directors actively reviews the adequacy and e ectiveness of internal control syems and sugges improvements to rengthen the same. The Board of Directors has framed a policy which ensures the orderly and ef icient conduct of its business, safeguarding of its assets, to provide greater assurance regarding prevention and detection of frauds and accuracy and completeness of the accounting records of the company. Further your company has adequate internal inancial control with reference to its inancial atements.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The inancial and operative performance is already elaborated in Directors Report.

HUMAN RESOURCES

The Company recognises the importance of a productive workforce and rategically inves in the attraction and retention of talented individuals who can contribute to the companys success. To ensure that its human capital remains skilled and competent, the Company implements e ective talent management practices, leadership succession planning, and organisational assessments. The "3C rule" Character, Capability, and Cataly is integrated into employee development processes and tools, ensuring alignment with organisational objectives. Furthermore, The Company enhances its organisational e ectiveness by employing career planning along with training and skill development programs. The safety of employees is of paramount importance at Neeraj Paper. The organisation foers a positive and inclusive work environment that expressly prohibits any form of discrimination and rigorously enforces a policy aimed at preventing sexual harassment. Total number of employees as of March 31, 2025 is17.

KEY FINANCIAL RATIOS

The details of changes in Key Financial Ratios as compared to the immediately previous inancial year along with explanations are as follows:

Nature of Ratios	For year ended 31 March 2025	For year ended 31 March 2024	Changes%	Explanation for the changes more than 25%
Debtors Turnover (in days)	78.10	103.13	-24.28%	Receivable turnover ratio has improved on account of increase in sales and improved collection process.
Inventory Turnover (in days)	NA	NA	NA	NA
Intere Coverage Ratio (in times)	1.17	1.33	-12.12%	NA
Current Ratio (in times)	1.80	1.85	-2.88%	NA

 

Debt Equity Ratio (in times)	0.54	0.92	-41.39%	Ratio has reduced on account of repayment of term loans and reductions in cash credit facility
Operating Pro it Margin (in %)	1.38%	1.83%	-24.39%	NA
Net Pro it Margin (in %)	0.09%	0.30%	-69.90%	Ratio has worsened on account of provision of intere on cash credit account imposed by the bank after closure of year.
Return on Capital employed (in %)	8.00%	9.00%	-11.11%	NA
Return on invement	NA	NA	NA	NA
Trade payables turnover ratio	23.23	22.12	4.99%	NA
Net capital turnover ratio (in times)	8.38	6.75	24.11%	NA
Debt Service Coverage Ratio (in times)	1.40	0.73	92.82%	Ratio has improved on account of reduction of term loan and consequently reduction in term loan inallments.
Return on Equity Ratio (in %)	1.00%	2.00%	-50.00%	Ratio has worsened on account of provision of intere on cash credit account imposed by the bank after closure of year.

CHANGES IN RETURN ON NET WORTH

The return on net worth for the inancial year 2024-25 and for the inancial year 2023-24, it is 0.64 % and 1.71 % respectively. The change in return on net worth as compared to the immediately previous inancial year is-62.56%. The ratio has worsened on account of provision of intere on cash credit account imposed by the bank after closure of year.

CAUTIONARY ATEMENT

atements in the Management Discussion and Analysis and in the Directors Report, describing the companys objectives, projections and eimates, results may vary materially from those expressed or implied by the forward looking atements due to risks or uncertainties associated therewith depending upon economic conditions, government policies and other incidental factors. Readers are cautioned not to place undue reliance on these forward-looking atements.

	By the order of the Board
	For NEERAJ PAPER MARKETING LIMITED
	Sd/-	Sd/-
	Deepak Goel	Parveen Kumar Goel
	(Whole-Time-Director)	(Whole-Time-Director)
	DIN: 00200527	DIN: 00014638
	Add: 218-222, Agarwal	Add: 218-222, Agarwal
th
DATED: 08 Augu 2025	Preige Mall, Near M2K Cinema	Preige Mall, Near M2K Cinema
PLACE: DELHI	Pitampura, Delhi-110034	Pitampura, Delhi-110034