RFBL Flexi Pack Ltd Management Discussions

(Annexure I to the Boards Report for the financial year 2025-26)

1. Industry Structure and Development

Indias flexible packaging industry continues to expand on the back of rising consumption in the food and beverage, pharmaceutical, home care and personal care segments, growing organised retail penetration, and a structural shift from rigid to flexible formats owing to cost, weight and shelf-life advantages. Your Company is engaged in the manufacture and trading of printed multilayer flexible packaging materials, including plastic film rolls and pouches, and also trades in woven fabric packaging materials and polyester laminated films, serving customers on a business-to-business (B2B) basis across the food, pharmaceutical, and home and personal care sectors.

The Companys manufacturing facility is strategically located at Himatnagar, Gujarat, near the Gujarat-Rajasthan border, which management believes provides logistical advantages, lower transportation costs and faster delivery timelines while allowing the Company to service demand in regions that are relatively under-served by organised flexible packaging capacity. The Company holds ISO 9001:2015 certification for its quality management systems and operates an integrated manufacturing set-up with in-house lamination and ink-manufacturing capabilities, which supports quality control across the value chain, from raw-material procurement to final dispatch.

During the year, the Company successfully completed its Initial Public Offering of equity shares, which opened on 12 May 2026 and closed on 14 May 2026, and its equity shares were listed on the NSE Emerge (SME) platform of the National Stock Exchange of India Limited. The listing has strengthened the Companys capital base and is expected to support its capacity-expansion plans.

2. Opportunities and Threats

Opportunities

Continued formalisation of packaging demand from food, pharmaceutical and FMCG customers, favouring organised, quality-certified suppliers.

Proximity to the Rajasthan market and relatively lower flexible-packaging infrastructure in the region, offering scope for market-share gains.

Capacity expansion funded through IPO proceeds, enabling higher volumes and a broader product mix, including diversification into new geographies.

In-house lamination and ink-manufacturing capabilities supporting better cost control and faster turnaround for customised orders.

Incorporation of a wholly owned overseas subsidiary in the UAE during the year, which management intends to use as a platform for exploring export and regional markets.

Threats

Volatility in prices of key raw materials such as CPP, CPE and BOPP films, metallised films, adhesives and inks, which can compress operating margins if not passed through in a timely manner.

Customer concentration and pricing pressure typical of a B2B model, along with competition from larger, well-capitalised packaging companies.

Working-capital intensity of the business, reflected in elevated receivable and inventory cycles in certain periods.

Regulatory and environmental developments relating to plastics and packaging, including extended producer responsibility norms, which may require incremental compliance investment.

3. Segment / Product-wise Performance

The Company operates in a single reportable business segment, namely flexible packaging materials, comprising manufactured products (printed multilayer laminated films, pouches and rolls) and traded products (woven fabric packaging materials and polyester laminated films). Revenue from operations grew to Rs. 14,857.26 Lakhs in FY 2025-26 from Rs. 13516.18 Lakhs in FY 2024-25, aided by capacity utilisation and continued demand from food, pharmaceutical and home and personal care customers.

Trading operations, alongside the sale of manufacturing scrap for further processing, continued to supplement the Companys core manufacturing revenue during the year.

4. Outlook

Management expects demand for flexible packaging to remain resilient, supported by consumption growth in the Companys key end-markets. The proceeds of the IPO are earmarked, inter alia, for setting up a new state-of-the-art manufacturing facility at Himatnagar, upgrading production technology, and strengthening the Companys working-capital position, which the Board believes will support the next phase of growth. The Company also intends to deepen its distribution network and widen its geographic presence, including through its newly incorporated overseas subsidiary. While near-term operating margins are likely to remain in line with recent years given the competitive, input-cost-linked nature of the industry, the Board remains confident of sustaining the Companys growth trajectory over the medium term.

5. Risks and Concerns

Raw-material price risk: A significant portion of cost of goods relates to petrochemical-derived films and inputs, exposing margins to crude-oil-linked price movements.

Customer concentration and credit risk: The B2B model exposes the Company to receivable risk; debtor days rose to 85 in FY 2024-25 before improving to 48 in FY 2025-26, and management continues to monitor collections closely.

Execution risk on capacity expansion: Timely commissioning of the new facility funded through IPO proceeds is important to realising anticipated growth and returns.

Leverage and interest-cost capitalisation: External analysis has flagged that the Company may be capitalising certain interest costs; the Board and Audit Committee keep this accounting treatment under review to ensure it remains appropriate.

Regulatory risk: Changes in environmental, plastics-usage and packaging-waste regulations could increase compliance costs.

Currency and overseas-subsidiary risk: The new UAE subsidiary introduces incremental foreign-exchange and overseas-operations risk, which will be managed as that entity commences activity.

6. Internal Control Systems and their Adequacy

The Company has in place internal control systems commensurate with the size, scale and nature of its operations, covering procurement, production, quality checks from raw-material intake to final dispatch, inventory management and financial reporting. These systems are designed to ensure efficient use of resources, safeguarding of assets, and reliability of financial records, and are reviewed periodically by the Board and its Audit Committee. As a company recently listed on the NSE Emerge platform, the Company is enhancing its internal control and compliance framework to align with the requirements applicable to listed entities.

7. Financial Performance

A summary of the Companys standalone financial performance for the last two financial years is set out below (Rs. in Lakhs, unless otherwise stated):

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	14,857.26	13,516.18
Total Expenses	13,671.26	12,392.22
Operating Profit (EBITDA)	1,166.00	1,155.96
Operating Profit Margin (%)	7.85%	8.55%
Profit Before Tax	1,166.00	1,155.96
Net Profit After Tax	825.25	799.36
Earnings Per Share (Rs.)*	5.086	3.95

*EPS for FY 2025-26 reflects the enlarged equity base following the IPO and related capital restructuring (equity capital increased from Rs. 125.00 Lakhs to approximately Rs. 1,625.00 Lakhs); accordingly, EPS for FY 2025-26 is not directly comparable with the prior year on a per-share basis.

Total assets grew from Rs. 4697.15 Lakhs as at 31st March 2025 to Rs. 5004.86 Lakhs as at 31 March 2026. Borrowings reduced from Rs. 1,887.50 Lakhs to Rs. 1,011.44 Lakhs over the same period, reflecting the Companys continued focus on deleveraging. Cash flow from operating activities turned positive at approximately Rs. 1038.44 Lakhs in FY 2025-26, compared with an outflow of Rs. 1245.91 Lakhs in the previous year, aided by an improvement in the working-capital and collection cycle.

Key Financial Ratios

Particulars	Formula / Particulars	Amount	Mar-26	Mar-25	Deviation	Reason for deviation more than 25%
(a) Current Ratio	Current Assets	448,857,072	2.02	2.23	-0.09
Current Liabilities	221,888,280
(b) Debt Equity Ratio	Total Liabilities	101,144,789	0.38	1.06	-0.64	Equity increase during the year
Total Shareholders Equity	265,230,856
(c) Debt Service Coverage Ratio	Net Operating Income	129,931,260	11.74	25.23	-0.53	Debt increase compare to last year
Debt Service	11,067,651
(d) Return on Equity Ratio (ROE)	Net Income (annual)	82,524,892	0.16	0.17	-0.03
Total Assets	500,485,684
(e) Inventory turnover ratio	Cost of Goods Sold	1,325,144,857	11.20	13.71	-0.18
Avg. Inventory	118,282,275
(f) Trade Receivables turnover ratio	Net credit sales	1,483,726,393	5.83	7.00	-0.17
Average Accounts Receivable	254,395,068
(g) Trade payables turnover ratio	Credit Purchase	535,025,804	14.11	32.00	-0.56	Purchase increase compare to last year
Average Accounts Payable	37,917,490
(h) Net capital turnover ratio	Net Sales	1,483,726,393	3.05	3.88	-0.21
Average Total Assets	485,100,299
(i) Net profit ratio	Net Profit	82,524,892	5.55%	5.90%	-0.06
Sales	1,483,726,393
(j) Return on Capital employed	EBIT	129,931,260	0.47	0.43	0.09
Total Assets - Total Current Liabilities	278,597,385
(k) Return on investment	Net Profit	82,524,892	1.17	1.27	-0.08
Cost of Investment	70,411,600

8. Human Resources

The Company believes its people are central to its quality and service standards and continues to invest in training on quality management (including ISO 9001:2015 processes), workplace safety and operational efficiency. Industrial relations during the year remained cordial, and the Company continues to strengthen its management team and governance structures in line with its status as a listed entity, including at the Board and senior-management levels.

9. Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied, depending on economic conditions, government policies, raw-material price movements and other incidental factors. The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Date: 03.09.2026	By order of the Board ,
Place: Himatnagar	RFBL FLEXI PACK LIMITED
Registered Office:	Sd/-
Survey No 3 2, Plot No 1 5 ,	Behind KUNJIT MAHESHBHAI PATEL
Marutinandan Temple Dhandha, Himatnagar,	CHAIRMAN CUM MANAGING DIRECTOR
Sabarkantha, Himatnagar, Gujarat, India,	DIN: 06719295
383001
Email: info@rfblflexi.com
Contact: +91 80475 23951
Web: https://rfblflexi.com/