Radha Madhav Corporation Ltd Management Discussions

Industry Outlook

The Indian packaging industry is one of the fastest growing sectors, driven by rapid growth in consumer markets, rising urbanization, increasing income levels, and changing lifestyle patterns. According to industry reports, the Indian packaging market is projected to grow at a CAGR of over 20% during the next few years, with flexible packaging and rigid packaging being the dominant formats. With the governments increasing emphasis on sustainability and environmental compliance, there is a visible shift towards eco-friendly and recyclable packaging solutions. The FMCG retail sector, which remains one of the largest consumers of packaging products, continues to experience robust growth, particularly in categories such as food & beverages, personal care, and household products. The increasing penetration of modern trade, expansion of e-commerce platforms, and rising demand from rural India are further fueling this expansion. Indias retail market, valued at over USD 1 trillion, is expected to grow significantly in the next decade. Organized retail is gradually expanding its footprint, supported by digitization, modern retail formats, and the increasing aspirations of a young population. Within this context, retail brands that offer trusted quality, innovative formats, and wider product baskets are well-positioned to capture consumer loyalty.

Company Background

Radha Madhav Corporation Limited has historically been engaged in the manufacturing of packaging goods and also ventured into retail of FMCG products. While evaluating the company under the Corporate Insolvency Resolution Process (CIRP), it was assessed that the company was primarily driven by its packaging segment. However, post-acquisition and subsequent detailed review, it has been observed that much of the existing machinery is obsolete, technologically outdated, and in many cases beyond economic repair. This has necessitated a fundamental reassessment of the companys operational model. The management, under the approved resolution plan, has successfully discharged the debt obligations envisaged in the plan. With this milestone completed, the focus now shifts to reviving, modernizing, and diversifying the companys operations in line with current industry opportunities.

Managements Strategic Outlook

1. Investment in New Machinery and Technology

The company recognizes that competitiveness in the packaging industry is driven by efficiency, consistency, and quality of output. In view of the outdated nature of existing equipment, we are committed to investing in state-of-the-art machinery with modern automation features.

2. Diversification of Product

Portfolio While packaging will remain a core strength, the management is focused on diversifying the product line. Plans are underway to introduce new categories of packaging products, including flexible laminates, eco-friendly packaging solutions, and customized consumer-centric designs.

3. Expansion of Retail Business

The retail vertical has strong potential for growth. With increasing consumer demand for quality FMCG products, the company plans to expand its retail product basket, enter into strategic partnerships with suppliers, and develop in-house brands where feasible.

4. Operational Costs and Temporary

Impact on Margins During the year, the company has incurred higher electricity consumption costs. This has been largely due to the fact that certain factory and commercial spaces are temporarily rented out, and maintenance-related activities are ongoing across our facilities. Additionally, the company has invested a substantial amount of money in repairs and maintenance.

5. Capital Restructuring and Listing

The revival journey has also been extended due to delays in re-listing of shares and completion of procedural formalities. Post capital restructuring and relisting, the company will be in a stronger position to attract fresh investments and accelerate the pace of expansion.

6. Sustainability and Compliance

We are committed to aligning with national and global environmental norms by introducing recyclable and biodegradable packaging formats.

7. Strengthening Governance and Operational

Discipline With the completion of CIRP obligations, management is fully focused on operational growth and governance.

Challenges and Risks

- High competition in both packaging and retail segments - Initial capital expenditure on machinery and technology

- Fluctuating raw material prices - Regulatory compliance in packaging waste management and FMCG quality standards - Transitional costs in repairs, maintenance, and utilities until full modernization is achieved

Potential of the Company

The market dynamics of both the packaging and FMCG retail industries have undergone a fundamental shift in recent years. Rising consumer demand, deeper penetration of organized retail, and increased acceptance of branded products have significantly expanded the addressable market size. Unlike many of our peers in the sector, who continue to operate under the burden of high interest outgo and heavy depreciation due to large legacy borrowings, RMCL stands on a leaner and stronger financial platform. Our company has either nil or significantly lower interest costs compared to the industry average. Similarly, with obsolete machinery being phased out and new investments being undertaken in a calibrated manner, our depreciation burden is expected to be considerably lighter. This provides RMCL with distinct advantages: - Higher operational flexibility - Improved profitability ratios - Greater capacity to reinvest into expansion and branding Furthermore, RMCL is not an unknown entrant in the industry. Over the years, the company has built its presence and identity in both packaging and FMCG retail. The Radha Madhav name is already established and recognized, which will make it easier and faster for us to reestablish market presence once production resumes.

Future Outlook

Despite the initial hurdles arising from outdated assets, higher temporary operational costs, and delays in re-listing, the companys future outlook remains robust. With debt obligations completed under the resolution plan, the company is now on a strong financial footing to invest in growth. Both packaging and retail businesses are expected to stabilize revenues and provide sustainable long-term growth. The management remains confident that with the right investments, renewed strategies, and a commitment to innovation, RMCL will successfully re-establish itself as a competitive, value-driven enterprise creating wealth for its shareholders.

Conclusion

The journey of revival has been challenging, particularly given the obsolete asset base, higher operational costs, and time taken in procedural requirements. However, with the debt burden resolved, and with capital restructuring and re-listing on the horizon, the company is at the cusp of a new growth cycle. Both packaging and retail businesses offer immense opportunities, and management is committed to capitalizing on them through timely investments, diversification, and innovation. We assure our shareholders that while the turnaround has taken longer than initially expected, the foundation is now stronger than ever. The future of Radha Madhav Corporation Limited is bright, and with continued support from all stakeholders, we are confident of delivering sustainable growth and enhanced value in the coming years.

Segment-wise or product-wise performance

During this period a very large number of shops, depots and warehouses have been put in place. All these distribution points have been integrated on central processing system.

Details of Significant Changes in key financial ratios, along with detailed explanations therefor:

- Debtors Turnover :	4.56
- Inventory Turnover :	11.94
- Interest Coverage Ratio :	0
- Current Ratio :	0.64
- Debt Equity Ratio :	0.39
- Operating Profit Margin :	0.55
- Net Profit/Loss Margin :	0.55

Details of change in Return on Net Worth as compared to immediately previous financial year along with the detailed explanation thereof

The Company was under CIRP and the Resolution Applicant acquired the Company on August 01, 2022. Company started reviving only after that.

RoNW (FY 2024-25): 5%

RoNW (FY 2023-24): 179%

RoNW (FY 2022-23): -213%

Return on Net Worth has decreased during the financial year under review as compared to the previous financial year due to reduction in turnover.

Cautionary Statement

Statements in the Management discussion and analysis describing the companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results could differ materially

from those expressed or implied. Important factors that could make a difference to the companys operations include economic conditions affecting demand/supply and prices, conditions in the domestic and overseas markets in which the company operates/ going to operate, changes in government regulations, tax laws and other statutes and other incidental factors.

For and on Behalf of the Board of Directors of Radha Madhav Corporation Ltd

	Sd/-	Sd/-
Date: August 29, 2025	Nitin Jain	Vijay Patel
Place: Daman	Whole Time Director & CFO	Whole Time Director
	DIN:09833381	DIN:07505750