Prima Plastics Ltd Management Discussions

GLOBAL ECONOMY AND OUTLOOK

The macroeconomic landscape has been substantially destabilized by the outbreak of the US-Iran conflict in early 2026. The escalation of hostilities and the resulting blockades in the Strait of Hormuz—a critical artery responsible for roughly one-fifth of global liquefied natural gas (LNG) trade and significant daily crude oil transit—have triggered one of the most severe global energy security shocks in recent history. Brent crude oil prices surged by over 55% within the first month of the conflict, reaching peak highs of $113 to $119 per barrel. However, prices began to cool and drop back down to the $70-$90 range by June and July 2026. This sudden and sharp increase in energy costs is radiating across global commodity, financial, and food markets, reigniting inflationary pressures and complicating central bank monetary policies. Consequently, international trade organizations have downwardly revised global GDP growth projections for the year, citing that prolonged geopolitical friction, permanently elevated risk premiums, and compounding supply chain fragmentation will likely sustain market volatility and weigh heavily on global economic expansion for the foreseeable future.

The ongoing geopolitical crisis has fundamentally disrupted the cost structure and supply chain dynamics of the plastics moulding and manufacturing industry. With the Middle East serving as a primary global hub for petrochemical production, restricted maritime flows through the Strait of Hormuz and the Red Sea have severely choked the supply of critical feedstocks, including naphtha, propylene, and ethylene. As a result, the industry has witnessed a dramatic contraction in resin availability, driving core polymer prices—particularly polyethylene (PE) and polypropylene (PP)—up by more than 50% in the first half of 2026 alone. Beyond direct raw material inflation, operating margins face compounding pressures from surging freight rates, heightened "war risk" maritime insurance premiums, and extended logistics lead times. These converging headwinds are squeezing profitability across the sector, compelling manufacturers to aggressively diversify raw material procurement, implement stringent cost-pass-through mechanisms to downstream consumers, and carry higher safety inventories to mitigate the ongoing threat of sudden supply disruptions.

Indian Economy and Outlook

Even with global tensions and shifting trade relationships, the Indian economy has shown remarkable independent strength, standing out as a primary driver of global growth. In FY26, steady government investments and a healthy bounce-back in consumer spending kept our economy active, protecting India from the stalled growth and high inflation seen in many advanced nations. Although the US-Iran conflict caused unpredictable global energy prices, Indias proactive shift toward diverse energy sources and responsible government spending kept our broader economy stable.

At the close of the fiscal year, Indias manufacturing sector demonstrated a strong upward trajectory, driven by extensive infrastructure upgrades and successful incentive programs like the PLI schemes. Major global companies now view India not just as a cost-effective location, but as a premier hub for high-quality manufacturing. While the Reserve Bank of India (RBI) effectively anchored inflation and maintained stable interest rates through the fiscal year-end—fostering a favourable climate for industrial expansion—subsequent global macroeconomic shifts have introduced renewed volatility in input costs and supply chain dynamics. As we navigate this rapidly evolving post-reporting environment, Prima Plastics remains highly agile. Even though there was a scarcity of raw material in the domestic as well as the international markets, still we are proactively managing these past and recent hurdles while staying well-positioned to capitalize on underlying domestic demand and the structural momentum of Indias Viksit Bharat 2047 vision

Industry Structure and Development

The Indian plastics industry has firmly transitioned from a fragmented processing sector into a structurally mature, high-value manufacturing ecosystem. Valued at approximately US$47 billion in 2026, the sectors operational backbone remains its robust network of MSMEs, which account for nearly 90% of the domestic processing landscape. However, the industry is currently undergoing a profound paradigm shift driven by stringent regulatory frameworks and the global imperative for sustainability. The recent 2026 amendments to the Plastic Waste Management Rules have cemented Extended Producer Responsibility (EPR) not merely as a compliance metric, but as a core strategic mandate. This regulatory rigor is accelerating the industrys pivot toward a genuine circular economy, fostering capital expenditure in recycled polymers, sustainable packaging designs, and advanced waste- to-wealth processing infrastructure.

Concurrently, the industry is aggressively scaling to meet the Plastic Export Promotion Councils (PLEXCONCIL) ambitious export target of US$25 billion by 2027. Supported by structural catalysts such as the Production Linked Incentive (PLI) schemes and ongoing synergies with Make in India and Digital India, domestic manufacturers are rapidly ascending the value chain. By integrating smart manufacturing technologies and systematically reducing reliance on imported raw materials, the Indian plastics sector is capitalizing on shifting global trade blocs to position itself as a resilient, high-tech cornerstone of the global supply chain.

Business Overview

Prima Plastics Limited stands as one of the Indias leading manufacturer and producer of plastic furniture products. Your Company was established in 1993 and has marked its presence in India as well as in global markets. Your Company operates in a single segment-designing, producing, marketing, and supplying plastic moulded products in both domestic and international markets. With three manufacturing facilities across India (spanning three states and one union territory) and three international units, the Company continues to expand its operational footprint.

The Indian plastics industry is evolving rapidly, with increasing emphasis on innovation, diversification, and sustainable practices. Your Company remains aligned with these trends, placing a strong focus on product development and market responsiveness.

Key Highlights:

I. Product Development:

• Furniture Division: Introduced new SKUs catering to lifestyle segments

II. Logistics and Distribution:

• Currently operating 10 warehouses strategically located in Coimbatore, Hubli, Jammu, Jaipur, Kanpur, Indore, Cuttack, Hyderabad, Vijayawada, and Bangalore.

• Ongoing efforts to further expand warehousing capacity to serve new markets.

III. Market Penetration:

• Expansion of PAN-India distributor network

• Participation in national and international trade exhibitions to build brand presence and explore new market opportunities

• Expansion of sales through modern trade Product Portfolio

Furniture Division

The "Prima" brand continues to solidify its reputation as a trusted leader in the plastic moulded furniture segment by consistently delivering high-quality, competitively priced products. Our market presence is rapidly expanding through targeted omnichannel marketing campaigns, strong corporate initiatives, and strategic entry into previously untapped regional markets.

Strategic Product Diversification

To capitalize on Indias booming wedding and event sector, we introduced a premium line of Event and Decorative Chairs last financial year. The strong customer response has validated our strategy, and we are actively developing additional products to further capture market share in the tent and decor segment. Furthermore, responding to consumer demand for elegant, space-saving solutions, we successfully launched storage cabinets, enhancing our portfolio and driving incremental sales.

To capitalize on the accelerating shift toward digital consumption, the Company is aggressively expanding its digital footprint across key platforms, including Instagram, Facebook, LinkedIn, YouTube, and our corporate website. Our digital strategy is rooted in enhancing the customer journey; we maintain an active dialogue with our audience through real-time product launch announcements and intuitive. By strategically leveraging UserGenerated Content (UGC) and targeted Influencer Marketing, we have cultivated a dynamic and highly engaged online community, successfully surpassing 11,000 followers while driving sustained brand visibility and customer loyalty.

Waste Management

Driven by evolving market demands for high-capacity sanitation solutions, we successfully expanded our Waste Management Division by launching 60-litre, 80-litre and 110-litre bins complementing our existing 660-litre and 1100-litre Wheeled Bins. This strategic portfolio expansion directly reinforces our commitment to the national "Swachh Bharat Abhiyan" initiative.

Prima Dustbins represent a rapidly growing segment within our injection-moulded portfolio. Engineered for exceptional durability and safety, they are manufactured from FDA-approved, UV-stabilized virgin HDPE. Their seamless, weld-free design ensures they are anti-corrosive, acid-resistant, and entirely free of toxic elements, making them ideal for rigorous, long-term use.

To support this product trajectory, we are aggressively scaling our PAN-India dealer network to ensure broader market accessibility. Through consistent quality and robust engineering, Prima is steadily cementing its position as a trusted, reliable brand in the waste management sector.

OPPORTUNITIES

During the year under review, the Company aggressively expanded its market footprint across both physical and digital ecosystems. Leveraging our core expertise in the plastics industry, we diversified our portfolio through research-led product development tailored to evolving modern lifestyles.

We accelerated our offline retail strategy by successfully entering the modern trade sector to drive volume growth. In parallel, we fortified our direct-to-consumer digital channels. By strengthening our presence on premier e- commerce platforms like Amazon, Flipkart, and DMart Ready, we ensured seamless, nationwide product accessibility. This e-commerce acceleration was supported by a progressive digital marketing framework utilizing SEO, AEO, Influencer, and User-Generated Content (UGC) campaigns. Furthermore, our active engagement across platforms like Facebook, Instagram, and YouTube—featuring value-added content such as DIY assembly tutorials—has significantly elevated brand visibility and customer retention.

THREAT

Beyond the evolving regulatory landscape, the moulded plastic furniture segment faces distinct structural and operational headwinds. Foremost is the severe volatility in core petrochemical feedstock prices—specifically polypropylene (PP) and polyethylene (PE)—which remains highly susceptible to recent geopolitical shocks and energy supply disruptions in the Middle East. Furthermore, we face intense competition from an unorganized sector that frequently introduces low-cost imitations driving aggressive price wars.

From a demand perspective, the growing trend of premiumization poses a notable substitution risk. The Company is actively engaged in developing higher quality products and pivoting towards a premium range of furniture to mitigate the said risk.

EXPORTS

Your Companys consolidated export was worth Rs 4,624.56 Lakhs during the year under review against Rs 4651.70 Lakhs in previous year.

Cultivating resilient, long-term strategic alliances with our international clientele remains a cornerstone of our global growth strategy. Throughout the fiscal year, we prioritized client retention and deepened our engagement with existing global partners, ensuring unwavering supply chain reliability and consistent product quality despite ongoing international trade disruptions.

RISKS AND CONCERNS

As we navigate a complex global macroeconomic environment, the Company remains vigilant against the following principal risks:

Foreign Exchange (FX) Risk

Given our expanding global footprint, a significant portion of our revenue streams and procurement expenditures are denominated in multiple foreign currencies. This inherent structural exposure renders our cross-border transactions vulnerable to acute currency volatility, which can directly inflate our raw material procurement costs and dilute export realizations.

We maintain a dynamic FX risk management policy as we continuously monitor global currency fluctuations and utilize calibrated hedging instruments, forward contracts, and natural hedges to insulate our profit margins and ensure financial predictability.

Raw Material & Commodity Price Risk

Our manufacturing operations are heavily reliant on petrochemical feedstocks (primarily Polypropylene and Polyethylene). We face substantial pricing and supply chain risks stemming from geopolitical fragmentation, energy market shocks, and inherent commodity cycle volatility. Unpredictable surges in polymer prices directly threaten our operating margins.

To safeguard our cost structure, Management actively diversifies our global supplier base, enters into strategic, long-term procurement contracts, and maintains optimal buffer inventories to cushion against sudden supply bottlenecks or localized geopolitical shocks.

Regulatory and Macro-Political Risk

The Company is subject to evolving domestic policies, international trade tariffs, and stringent ESG compliance mandates across our global markets. Unforeseen shifts in Indian governmental policies, or regulatory instability in our international target markets, can disrupt operational continuity and cross-border expansion plans.

We deploy a robust, centralized regulatory compliance framework. Our legal team continuously horizon-scan for impending statutory shifts—particularly regarding plastic waste management and cross-border trade policies—ensuring seamless, preemptive compliance and minimizing legal exposures.

Business and Operational Risk

Beyond financial and regulatory exposures, our enterprise is subject to various internal and external operational disruptions, ranging from localized manufacturing bottlenecks to IT infrastructure vulnerabilities.

We have institutionalized a rapid-response control mechanism enabling swift identification, root-cause analysis, and agile deployment of corrective measures to ensure uninterrupted business continuity.

Our robust Business Risk Management (BRM) framework systematically identifies, evaluates, and mitigates enterprise risks while capitalizing on strategic opportunities. Governed by a formally documented and dynamic Risk Management Policy, our Senior Management continuously monitors and reviews critical risk exposures. By embedding these proactive controls across all operational levels, we actively safeguard corporate assets and ensure the seamless execution of the Companys strategic objectives.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

As a cornerstone of our corporate governance, the Company has established a highly robust and scalable framework of Internal Financial Controls (IFC). Tailored specifically to the complexities of our manufacturing operations, this framework is deeply integrated into our daily workflows through stringent policies, automated ERP controls, and secure IT infrastructure. These systems are designed to drive operational efficiency, unequivocally safeguard corporate assets, and ensure the absolute integrity and reliability of our financial reporting.

Our compliance and risk mitigation strategy is anchored by a comprehensive Internal Audit Plan, which is rigorously vetted and approved by the Audit Committee. Executed by our internal audit team in strategic partnership with external domain experts, this program continuously stress-tests our control environment and compliance protocols across all business units. We maintain a dynamic approach to risk management; all audit observations are critically reviewed by management, with immediate corrective protocols deployed to neutralize identified risks.

For the financial year under review, it is reassuring to report that our audit mechanisms found no material weaknesses or significant adverse observations concerning the design, adequacy, or operational effectiveness of the Companys internal financial controls.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Revenue from Continuing Operations:

On a consolidated basis, the revenue from operations for FY 2025-26, was Rs 15,980.67 Lakhs which increased by 12.03% compared to Rs 14,265.10 Lakhs for the previous year 2024-25. However, the consolidated EBITDA increased to Rs 3,730.66 Lakhs for FY 2025-26 which is 16.80% higher than that of the previous year 2024-25 i.e. Rs 3,194.16 Lakhs.

On a standalone basis, the revenue from operations for FY 2025-26, was Rs 8,664.59 Lakhs which increased by 7.02% compared to Rs 8,095.89 Lakhs for the previous year 2024-25. The standalone EBITDA increased to Rs 1,529.63 Lakhs for FY 2025-26 which is 25.85% higher than previous year 2024-25 i.e. Rs 1,215.43 Lakhs.

Operating Profit:

The Company witnessed operating profit of Rs 4,163.98 Lakhs in comparison to Rs 4,725.14 Lakhs in previous year. Finance Cost:

The finance cost for the FY 2025-26 was Rs 219.18 Lakhs which was decreased by 16.44% compared to Rs 262.30 Lakhs in the previous year.

Profit:

Your Company has registered a Profit before Tax of Rs 2,970.43 Lakhs as compared to previous year Rs 2,455.83 Lakhs and Net Profit after Tax of Rs 2,329.37 Lakhs as compared to Rs 1,918.32 Lakhs in previous year.

HUMAN RESOURCE

At Prima, our human capital remains the definitive driver of our sustained business success. We pride ourselves in cultivating a deeply purpose-driven and empathetic organizational culture that resonates both within our workforce and across the broader communities we serve.

By strategically investing in employee development and outlining meaningful career trajectories, we have sustained exceptionally high retention rates. Prima continues to solidify its reputation as a preferred employer—an aspirational workplace where top-tier talent seeks to build long-term careers. We believe in actively encouraging our teams to challenge the status quo with bold ideas and fresh perspectives. Through transparent communication channels, collaborative decision-making, and a steadfast commitment to absolute meritocracy, our HR frameworks transcend basic regulatory compliance.

As we closed the fiscal year on March 31,2026, the Prima family stood strong at 342 dedicated professionals. Each member of our team plays an indispensable role in executing our strategic vision, driving operational excellence, and generating sustainable, long-term value for our stakeholders.

CHANGES IN KEY FINANCIAL RATIOS

Pursuant to provisions of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule V Part B(i) details of the change in key financial ratios is given hereunder:

FY2025 and FY2026 numbers are from continuing operations only, hence, strictly not comparable.

CHANGE IN RETURN ON NET WORTH

The return on Net Worth for the Financial Year 2025-26 has increased by 23.04%. However, the same is not comparable with the previous year as the figures are from conitnuing operations only.

DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of financial statements, there is no difference in treatment from that of prescribed in an Accounting Standards.

FORWARD LOOKING STATEMENTS

The report contains forward-looking statements, identified by words like plans, expects, will, anticipates, believes, intends, projects, estimates and so on. All statements that address expectations or projections about the future, but not limited to the Companys strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realised. The Companys actual results, performance or achievements could thus differ from those projected in any forwardlooking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.