Rajshree Polypac Management Discussions

<dhhead>Management Discussion & Analysis</dhhead>

About Rajshree

With over 2 decades of experience in the packaging industry, Rajshree Polypack Limited ("RPPL" / "Company") is one of the leaders in manufacturing of rigid plastic sheets for specialized Form, Fill and Seal ("FFS") Application and thermoformed packaging products to the industry segment we cater to.

Our products range include packaging for dairy industry, Food and Beverages ("F&B"), bakery and confectionaries, trays for sweet and snacks, punnets for fruits and vegetables, electronic packaging, etc. We have also developed sealing and lidding Laminates for food packaging and undertook product trials with multiple customers. We have a wide range of sizes and designs to meet the customers’ need and we aim to continue to build our strengths in the field of rigid and semi-rigid packaging products.


Industry structure and developments Economic overview & Outlook Global Economy

As per the April 2023 report of the International Monetary Fund (IMF) on Global Economic Outlook, the global economy is at a highly uncertain moment, with the cumulative effects of the past three years of adverse shocks—most notably, the COVID-19 pandemic and Russia’s invasion of Ukraine—manifesting in unforeseen ways. Spurred by pent-up demand, lingering supply disruptions, and commodity price spikes, inflation reached multidecade highs last year in many economies, leading central banks had to tighten aggressively to bring it back toward their targets and keep inflation expectations anchored.

Although inflation has declined as central banks have raised interest rates and food and energy prices have come down, underlying price pressures are proving sticky, with labor markets tight in a number of economies. Commodity prices that rose sharply following Russia’s invasion of Ukraine have moderated, but the war continues, and geopolitical tensions are high. Infectious COVID-19 strains caused widespread outbreaks last year, but economies that were hit hard—most notably China—appear to be recovering, easing supply-chain disruptions.

Global growth is expected to bottom out at 2.8% this year before rising modestly to 3% in 2024. For advanced economies, growth is projected to decline by half in 2023 to 1.3%, before rising to 1.4% in 2024. For emerging market and developing economies, economic prospects are on average stronger than for advanced economies, but these prospects vary more widely across regions. On average, growth is expected to be 3.9% in 2023 and to rise to 4.2% in 2024. (Source: World Economic Outlook - April 2023 Published by IMF)

Indian Economy

National Statistical Office ("NSO") reported GDP growth at 7% for the period whereas CRISIL has forecasted GDP growth at 6% for FY24 which is 1% lower than the NSO report. Higher inflation coupled with aggressive rate hikes and volatility in crude and commodity prices have led to the lower growth rate predicted by CRISIL. Slowing global growth will weaken India’s export whereas the domestic demand could also come under pressure with the RBI’s rate hikes coming into play. Consumer inflation is expected to be 5%. Due to lower commodity prices, expectation of softer food prices, cooling domestic demand will be helping to moderate the CPI.



Packaging is an essential component of almost every product. A product’s packaging acts as an ‘eye catcher’, allowing it to stand out from competing goods in today’s market environment, which faces sti_ competition, and therefore, an edge is required for the product to outshine its rival. It is instrumental in conveying the product’s message to consumers. In addition to the same, it helps in establishing the visual appeal of a brand. Marketers view product packaging as the best possible opportunity to attract consumers to their product. Packaging encompasses a wide range of packaging types and materials. Flexible packaging, including pouches, sachets, and bags, dominates the market due to its cost-e_ectiveness, convenience, and lightweight nature. Additionally, rigid packaging, such as bottles, containers, and cartons, is widely used for various products. The segment has also witnessed the adoption of sustainable packaging materials like bioplastics, use of recycled materials, and eco-friendly alternatives to meet growing consumer preferences for environmentally friendly solutions.


Global Packaging Industry

The global packaging market size is expected to grow from USD 1,098.81 billion in 2023 to USD 1,333.02 billion by 2028, at a CAGR of 3.94% during the forecast period (2023-2028).

The global packaging business has experienced consistent growth over the last decade due to substrate choice changes, expansion of new markets, and changing ownership dynamics. Traditional packaging may continue to be replaced by flexible packaging, high-barrier _lms, and stand-up retort pouches may challenge rigid pack formats like metal tins and glass jars for a wide range of food products. (Source: https://www.mordorintelligence.com/industry-reports/global-packaging-market)

Indian Packaging Industry

India packaging market size was valued at US$ 81.07 Bn in 2021 and the total revenue is expected to grow at 26.1% through 2021 to 2027, reaching nearly US$ 325.95 Bn. As per CRISIL, packaging sector revenue is expected to grow to 1.47x of revenue generated in FY19.

The Indian packaging market has experienced significant growth in recent years, driven by factors such as increasing urbanization, rising disposable incomes, changing lifestyles, and the growth of the e-commerce industry. F&B and Pharmaceuticals are the top end user industry of packaging products and the packaging industry is getting a further boost due to higher growth of F&B and Pharma industry. (Source: Maximize Market Research report, CRISIL Report)

Rigid Packaging Industry

Rigid packaging industry refers to the sector that produces containers and packaging materials that maintain their shape and provide sturdy protection to the products inside. Rigid packaging is commonly made from materials like plastics, metals, glass, and paperboard. By end-user industry, the market is categorized into F&B, personal care, household, healthcare, and others.

The rigid packaging industry continues to evolve to meet the demands of sustainability, convenience, and changing market dynamics. Manufacturers are investing in research and development to create innovative, eco-friendly packaging solutions that align with consumer preferences and regulatory requirements. (Source: https://www.mordorintelligence.com/industry-reports/india-rigid-plastic-packaging-market)

Global Rigid Plastic Packaging Industry

The global rigid plastic packaging market was valued at $182.07 Billion in 2020, and is projected to reach $270.60 Billion by 2028, growing at a CAGR of 4.9% from 2021 to 2028. The growth of the rigid plastic packaging market is majorly driven by rapid expansion of the food & beverage industry, which, in turn, fuels the demand for bottles, jars, fruit juice containers, food package container, and foodie bags. (Source: https://www.alliedmarketresearch.com/rigid-plastic-packaging-market)

Indian Rigid Packaging Industry

Indian Rigid Packaging Industry is projected to grow at a CAGR of 9.36% till FY 2028. Rigid plastic packaging is widely used in the country because of its a_ordability, toughness, and being lightweight in nature. Rigid plastics like Polyethylene Terephthalate (PET) and High-Density Polyethylene (HDPE) can be placed directly into a recycling bin. Flexible packaging is less eco-friendly than rigid plastics, even though they are recyclable. The market is growing as rigid plastic packaging is employed in several end-user industries across the nation.

The market for rigid plastic packaging is expanding in India with the rising food and beverage sector. The demand for packaged meals in the F&B sector and the healthcare industry is driving the growth of the market. The need for packaged goods has steadily risen due to urbanization, rising disposable income, and changing lifestyles. (Source: https://www.mordorintelligence.com/industry-reports/india-rigid-plastic-packaging-market)


Growing Global Packaging Market

The global packaging market continues to expand due to population growth, urbanization, and increased consumer spending. This presents opportunities for the rigid packaging industry to meet the rising demand for packaging solutions.

Sustainable Packaging

As sustainability becomes a top priority for consumers and businesses alike, there is an increasing demand for eco-friendly packaging options. The rigid packaging industry can capitalize on this trend by developing and promoting recyclable, biodegradable, and reusable packaging solutions.

Innovation and Customization

Advancements in technology allow for innovative packaging designs and customization options. The rigid packaging industry can leverage these developments to create unique and visually appealing packaging solutions that cater to specific customer needs, enhancing product differentiation.

Investment in End-use Industries

Huge investments in the food processing, personal care, and pharmaceutical industries are allowing the packaging market to expand. The emergence of India’s middle class, the quick expansion of organised retail, the expansion of exports, and India’s burgeoning e-commerce sector are all helping to fuel growth.

Extended Shelf Life

Though plastic pollution has gotten a lot of not-so-positive attention, plastic packaging for food can actually help the environment by cutting down on food waste. It allows far wider out-reach for the brands due to increased shelf life. Rigid packaging products are recyclable making it more preferable as a sustainable packaging solution.



Regulatory Pressures

Governments worldwide are imposing stricter regulations on packaging materials, waste management, and recycling. Compliance with these regulations can pose challenges for the rigid packaging industry, requiring more investments in sustainable practices and materials.


Volatile Raw Material Costs

Fluctuations in raw material prices, such as plastic resins, can significantly impact the cost structure of the rigid packaging industry. Instability in commodity markets poses challenges for manufacturers in terms of procurement and pricing strategies.

Changing Consumer Preferences

Consumer preferences are continually evolving, influenced by factors such as convenience, aesthetics, and environmental concerns. The rigid packaging industry needs to stay ahead of these shifts to ensure that their packaging solutions align with changing consumer expectations.

Alternative Packaging Materials

The development of alternative packaging materials, such as bioplastics or compostable materials, poses a threat to traditional rigid packaging. These emerging materials may gain market share due to their eco-friendly attributes, potentially reducing demand for conventional rigid packaging products.


Segment–wise performance

Presently, the Company operates in only one primary segment i.e., Rigid packaging products and hence, segment-wise information is not applicable to the Company.



The Company is using state of the art technology at its factory and great impetus has been given for technical excellence. Our production capacity has improved in last few years and currently, we have ample capacity and production strength to cater to rising demand. The Company has continuously been investing in technological enhancement for better product quality as well as efficiency. Further, it gives us immense pleasure to announce that we have set foot in manufacturing of injection moulding products segment in the current year and are receiving healthy demand of the same.

We all know very well that marketing and branding go a very long way. During financial year 2022-23, we gave high emphasis on the marketing and business promotion front. We attended various exhibitions and industry events not only domestically but on a global level. All efforts made towards product development and business promotion have paid well as we onboarded more than 200 customers in the previous year. At the same time, Rajshree’s Products have been displayed on an International Stage and we have started receiving interest from potentially large customers across the globe.

With ongoing development of Olive Ecopak Private Limited (our joint venture company) ("OEPL"), the Company is working on entering into manufacturing of sustainable packaging products in the current year. We have already invested _900 Lakhs in OEPL in the previous year and the work on the project is at a requisite pace. The construction of factory building is in line with the implementation schedule and orders are being placed for the machinery required for OEPL.


Risks and concerns




Demand Risk

The Company can face demand risk due to fluctuating market conditions, seasonal variations, new product introduction and change in the competitive landscape.

The Company has grown its customer-base over the period and continues to onboard new customers through its diverse product offering.

Business Agreement Risk

The Company relies on strategic relationships and agreements with various clients. Termination of agreements, or less favourable renewal terms could adversely affect profitability.

The Company has demonstrated ability of significantly enhancing product offering which makes it a favourable partner.

Regulatory Risk

Regulations on consumer health and the risk of the Company’s products being targeted for discriminatory tax and packaging waste recovery may adversely impact business.

RPPL adheres to best manufacturing practices and takes issues of sustainability relating to packaging and waste recovery very seriously. It works closely and constantly with different stakeholders, to develop sustainable packaging focused on protecting the environment and also waste recycling. The Company has also entered into a joint venture by the name Olive Ecopak Private Limited for manufacturing sustainable packaging products.

Business Viability Risk

An inability to integrate the operations of or leverage potential operating and cost e_ciencies from the newly acquired territories and sub territories may adversely affect the Company’s business and future financial performance.

To ensure success of the newly acquired operations, the Company invests significant management time and financial resources to develop local market strategies (including that for potential cultural and language barriers) and assimilate business practices to ensure business viability.





Consumer Risk

Preference Failure to adapt to changing consumer health trends and address misconceptions relating to impact of usage of plastic products on the health may adversely impact demand.

RPPL sales team works closely with management to ascertain the changing consumer habits and constantly focus on product innovation and expanding range of products which are safe to use and eco-friendly.

Raw Material Risk

Maximizing cost efficiencies is an An interruption in the supply or significant integral part of RPPL’s increase in the price of raw materials or packaging materials may adversely affect the Company’s business prospects, results of operations and financial condition.

strategy, whereby it constantly focuses on reducing cost of goods sold, effectively managing operating expenses and enhancing cash flows. For this, the Company has undertaken several initiatives including backward integration and centralized material procurement. It leverages its scale of operations to achieve better bargaining power with suppliers, resulting in better working capital management. The Company’s ability to improve asset utilization enables it to achieve higher operating leverage and amortize overheads on a wider base. Additionally, the Company continues to invest in advanced technologies to improve operational e_ciencies and work processes in its operations, thereby ensuring integrated operational data from manufacturing, planned procurement and superior tracking of transportation of the Company’s products.


Internal control systems and their adequacy

Your Company has adequate internal control systems commensurate with its size and operations. During the year, such controls were tested and no reportable material weakness in the design or operations was observed.

The Company is following all applicable Accounting Standards for maintaining its books of accounts and reporting financial statements.


Discussion on financial performance with respect to operational performance Performance Highlights

During the year under review, the Company registered growth of 27.01% in turnover. The turnover of the Company for FY 2022-23 was _25,219.24 Lakhs as compared to _19,855.64 Lakhs for FY 2021-22. The net profit of the Company stood at _1,095.09 Lakhs for FY 2022-23 as compared to _955.10 Lakhs for FY 2021-22. Brief glimpse of key performance numbers is as under:

Particulars (_ Lakhs)



Revenue from Operations (Net)



Other Income



Total Revenue



Total Expenditure



Profit Before Tax



Tax Expenses



Other Comprehensive Income/(Loss)



Profit After Tax



Earnings per share ()




Operational Performance

During the year the Company produced 17,207 MT of Rigid Plastic Sheets as compared to 13,630 MT for the FY 2021-22, thereby registering growth of 26.24% over previous year. The production of thermoformed packaging products stood at 7,525 MT for financial year 2022-23 as compared to 5,918 MT for the FY 2022-23 i.e., a growth of 27.15% over the previous year.

The Company entered into an exclusive toll manufacturing agreement for the manufacturing of injection molding products for food packaging with a third-party manufacturer during the current year. With this, the Company is exploring in injection molding technology with an initial installed capacity of 1,000 MTPA and the Company intends to expand capacities into this segment with improvement in demand.

The overall capacity utilisation of the Company can be seen as under:




Sheet Extrusion













Material developments in Human Resources / Industrial Relations front, including number of people employed.

As of March 2023, the Company had 541 full time employees on its payroll. The Company has maintained its record of good industrial relations with its employees. During the year, various initiatives had been taken to improve the performance and productivity levels in various departments of the Company.

The Company granted 16,500 Stock Options under Rajshree Polypack Limited- Employee Stock Option Plan 2022 ("RPPL ESOP 2022") in February 2023 to certain employees of the Company, rewarding them for their contribution in the Company’s growth.

The Company has its own in-house facilities in the plant to train the new recruits before their placement, that helps in optimum utilization of resources as well as maintaining quality standards. It also indulges into and implements various HR initiatives and activities including employee welfare, special rewards, performance review system and various employee motivation activities.


Details of significant changes (i. e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:



FY 2022-23

FY 2021-22

% changes

Reason for the changes

Inventory Turnover





The Company has higher sales in Q1 of the financial year and to support the same, the Company has kept high stocks of inventory. Keeping higher stocks helps the Company to be in a better position to tackle the raw material price volatility.

Interest Coverage Ratio





Decreased due to increase in debt and short- term borrowings to support the operational expansion and increase in fixed assets.

Debt Equity Ratio





Increased due to increase in debt and short- term borrowings to support the operational expansion and increase in fixed assets.

Debt/EBIDTA Ratio





Increased due to increase in debt and short- term borrowings to support the operational expansion and increase in fixed assets.


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

The Company Return on Net Worth ("RoNW") has increased slightly at 8.41% for FY 2022-23 as compared to 8.25% for FY 2021-22. The Company has consistently been investing into growth and is expecting to reap benefits of such investment in near future.


Safe Harbour Clause

Certain statements in this Report describing the Company’s objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable Securities Laws and Regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company’s operations include global and Indian demand-supply conditions, finished goods prices, availability and prices of raw materials, power, interest rates, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors. Your Company is not obliged to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events or otherwise.