Perfectpac Ltd Management Discussions

[Schedule V Regulation 34(3) of SEBI (LODR) Regulations, 2015]

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The packaging industry plays a vital role in Indias economic growth and consumption ecosystem. Packaging today is no longer limited to protecting products during storage and transportation, it has evolved into a strategic business function that influences branding, consumer experience, product differentiation, sustainability and supply chain efficiency.

The Indian packaging industry continues to witness robust growth driven by increasing urbanization, rising disposable incomes, changing consumer preferences, growth in organised retail, expansion of e-commerce and quick commerce, and increasing demand for packaged products across sectors such as FMCG, food & beverages, pharmaceuticals, personal care, electronics, textiles and industrial goods.

According to industry estimates, the Indian packaging market was valued at approximately Rs. 5.4 trillion in financial year 2025 and is expected to reach around Rs. 8.3 trillion by financial year 2030. Growth in packaging consumption continues to outpace overall consumption growth, making the industry an important indicator of economic activity and consumer demand.

The corrugated packaging industry forms a significant segment of the packaging sector owing to its cost-effectiveness, durability, recyclability and versatility. Corrugated boxes are extensively used for packaging products across diverse industries including FMCG, e-commerce, pharmaceuticals, textiles, consumer durables and industrial products. Growing environmental awareness and increasing preference for recyclable packaging solutions continue to support demand for corrugated packaging products.

The industry is witnessing increasing investments in automation, process modernization, digital printing technologies and sustainable packaging solutions. Regulatory initiatives relating to waste management, recycling and Extended Producer Responsibility (EPR) are encouraging manufacturers to adopt environmentally responsible practices and develop sustainable packaging alternatives. Despite strong growth prospects, the industry remains highly fragmented, particularly in the corrugated packaging segment, resulting in intense competition. However, increasing emphasis on quality, compliance, operational efficiency and sustainability is expected to create opportunities for organised and technologically advanced players.

2. OPPORTUNITIES & THREATS Opportunities

India continues to be one of the fastest-growing major economies in the world. Rising consumption levels, increasing urbanisation, growth of organised retail and rapid expansion of e-commerce and quick commerce are expected to create significant opportunities for the packaging industry.

The growing demand for packaged food, pharmaceuticals, personal care products, consumer goods and industrial products is expected to support sustained demand for packaging solutions. Increasing awareness regarding sustainable packaging and regulatory emphasis on recyclable materials are creating new opportunities for eco-friendly corrugated packaging products.

The packaging industry is also witnessing increasing adoption of automation, digital technologies and smart packaging solutions aimed at enhancing operational efficiency, product traceability and customer engagement. Growing export opportunities and increasing preference for customised and value-added packaging solutions provide additional avenues for growth.

Threats

The Corrugated packaging industry continues to face challenges arising from intense competition, pricing pressures and the fragmented nature of the industry. Low entry barriers in certain segments often result in excess capacity and margin pressures.

Volatility in raw material prices, particularly kraft paper can adversely impact profitability. Increases in energy, labour, transportation and logistics costs further add to operational challenges.

The industry is also exposed to evolving environmental regulations, sustainability requirements and compliance obligations relating to recycling and waste management. Economic slowdowns, changes in consumer demand patterns and global supply chain disruptions may also impact business performance.

The Company continuously monitors these developments and undertakes appropriate measures to mitigate risks while leveraging emerging opportunities.

3. SEGMENT-WISE PERFORMANCE

The Company operates in a single business segment, namely Packaging. Accordingly, separate, segment-wise or product-wise performance disclosures are not applicable. The Company does not have any operations outside India and, therefore, geographical segment-wise disclosures are also not applicable.

4. OUTLOOK

The outlook for the Indian packaging industry remains positive, supported by favourable demographic trends, increasing consumer spending, rapid urbanization, expansion of organised retail, growing e-commerce penetration and rising demand for packaged products across various sectors.

Indias packaging consumption per person remains significantly lower than that of developed economies, indicating substantial long-term growth potential for the packaging industry. As consumers increasingly shift towards branded products and seek greater convenience, safety, hygiene and product quality, packaging usage across industries is expected to increase steadily in the coming years.

The corrugated packaging segment is expected to continue benefiting from growth in e-commerce, logistics, food processing, pharmaceuticals, consumer goods and manufacturing sectors. Sustainability initiatives and increasing preference for recyclable packaging materials are expected to further strengthen demand for corrugated packaging products.

The industry is also expected to witness increased adoption of automation and higher capacity/productivity plants by newer entrants. Industry consolidation and increasing focus on organised players are expected to create opportunities for efficient manufacturers with strong operational capabilities.

While challenges such as raw material price volatility, competitive pressures and regulatory changes may continue to impact the industry, the long-term growth fundamentals remain strong.

Your Company remains committed to enhancing operational efficiency, improving product quality, strengthening customer relationships, modernising manufacturing facilities and maintaining prudent financial discipline. The Company believes that its focus on quality, customer satisfaction and continuous improvement positions it favourably to capitalize on future growth opportunities and create long-term value for stakeholders.

5. RISKS AND CONCERNS

Risk management forms an integral part of the Companys business strategy and operational framework. The Company has established processes to identify, assess, monitor and mitigate various risks that may impact its business objectives, operational performance, financial results and reputation.

The Board of Directors and senior management regularly review the risk management framework to ensure effective monitoring and timely mitigation of identified risks. The Company also maintains an internal audit mechanism that assists in identifying emerging risks and evaluating the effectiveness of internal controls.

The key risks faced by the Company include:

Raw Material Price Risk: Prices of major raw materials such as kraft paper and other packaging inputs are subject to fluctuations due to demand-supply dynamics, market conditions and global economic factors, which may impact profitability.

Competitive Intensity: The packaging industry remains highly fragmented with significant competition from organised and unorganised players, resulting in pricing pressures and margin challenges.

Regulatory and Environmental Risk: Increasing environmental regulations, sustainability requirements and compliance obligations relating to waste management and recycling may require additional investments and operational changes.

Economic and Demand Risk: Slowdown in economic activity, reduction in consumer spending or lower demand from key customer industries may adversely affect business volumes.

Operational Risk: Disruptions in supply chains, logistics constraints, energy cost increases and technological changes may impact operational efficiency and business continuity.

The Company continuously evaluates these risks and adopts suitable mitigation strategies to ensure sustainable business growth and value creation.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal financial controls commensurate with the size, scale and complexity of its operations. These internal controls are designed to provide reasonable assurance regarding the reliability of financial reporting, compliance with applicable laws and regulations, safeguarding of assets and the orderly and efficient conduct of business operations.

The Companys internal financial control framework includes documented policies and procedures for authorization and approval of transactions, safeguarding of assets, prevention and detection of frauds and errors, maintenance of accurate accounting records and timely preparation of reliable financial information. The controls are periodically reviewed to ensure their continued effectiveness and adequacy.

The Company has a well-defined organizational structure, established authority levels and internal policies governing business operations. Management regularly reviews actual performance against budgets and business plans and takes appropriate corrective actions, wherever necessary.

The Audit Committee of the Board provides oversight on financial reporting, internal controls, risk management and audit functions. The Company has appointed independent Internal Auditors who periodically review the adequacy and effectiveness of internal controls and submit their reports to the Audit Committee. The Statutory Auditors also evaluate the effectiveness of internal financial controls over financial reporting as part of their audit procedures.

Based on the reviews carried out by Management, Internal Auditors, Statutory Auditors and the Audit Committee, the Board is of the opinion that the Companys internal financial control systems were adequate and operating effectively during the financial year under review.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATING PERFORMANCE

The financial performance of the Company for the financial years ended March 31, 2026 and March 31, 2025 is summarized below:

(Rs. in Lakhs)

Particulars	Year Ended March 31, 2026	Year Ended March 31, 2025
Revenue from Operations	11,373.48	11,345.88
Total Revenue	11,385.76	11,366.35
Profit Before Tax	420.81	424.88
Profit After Tax	314.95	315.20
Earnings Per Share (in Rs.)	4.73	4.73

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (‘Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with the applicable rules made thereunder. There has been no change in the accounting treatment followed by the Company during the financial year under review.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company firmly believes that its employees are its most valuable asset and a key driver of sustainable growth. The Company remains committed to fostering a work environment that encourages learning, innovation, teamwork, integrity and continuous improvement.

The Company focuses on strengthening employee capabilities through skill development, training initiatives and performance enhancement programs. Efforts are continuously made to create a safe, inclusive and productive workplace that promotes employee engagement and professional growth.

Industrial relations during the year remained cordial and harmonious across all levels of the organisation. The Company continues to maintain constructive relationships with its employees and there were no significant industrial disputes or work stoppages during the year.

The Company also places significant emphasis on employee health, safety and well-being and continues to strengthen its systems and processes in line with applicable statutory requirements and industry best practices.

The total number of employees on the rolls of the Company as on March 31, 2026 was 130.

9. SIGNIFICANT CHANGES IN FINANCIAL RATIOS

The mentioned below are the key financial ratios of the Company with reasons for significant changes in the financial ratios which are 25% or more as compared to the previous year:

Financial Ratios	FY 2025-26	FY 2024-25	Change in %	Reason for Change
Debtors Turnover Ratio	6.15	6.39	(3.82)	-
Inventory Turnover Ratio (RM)	23.99	21.54	11.35	-
Interest Coverage Ratio	32.85	25.85	27.08	Due to increase in borrowings and decrease in profit during the year.
Current Ratio	2.24	2.64	(14.91)	-
Debt equity Ratio	0.08	0.02	383.52	Due to increase in borrowings during the year.
Operation Profit Margin (%)	3.88	3.90	(0.51)	-
Net Profit margin (%)	2.53	2.79	(9.56)	-
Return on Net worth (%)	7.23	8.45	(14.38)	-

10. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, plans and outlook may constitute ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied in such statements due to various factors including, but not limited to, changes in economic conditions, market demand, competitive pressures, raw material prices, energy costs, regulatory developments, tax laws, environmental regulations, foreign exchange fluctuations, supply chain disruptions and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are therefore cautioned not to place undue reliance on such forward-looking statements. The Management Discussion and Analysis Report should be read in conjunction with the Companys financial statements and notes thereto forming part of the Annual Report.

	For and on behalf of the Board
Place: New Delhi	Sanjay Rajgarhia
Date: August 07, 2026	Chairman and Managing Director
	DIN: 00154167