Shaily Engineering Plastics Ltd Management Discussions

Global Economy

The global economy entered FY26 navigating a materially more uncertain environment than the cautious stabilisation seen through 2024-25. During early 2026, geopolitical tensions and evolving trade policies increased volatility, resulting in higher energy prices, elevated freight costs and disruptions across global supply chains. These developments have accelerated supply chain diversification and reinforced the focus on building resilient sourcing networks.

As per the International Monetary Funds (IMF) World Economic Outlook, global growth is projected to moderate to 3.1% in 2026 - a downward revision of 0.2 percentage points from the Funds earlier projection - before recovering marginally to 3.2% in 2027. Both estimates remain below the pre-pandemic historical (2000-19) average of 3.7% and below the roughly 3.4% pace recorded in 2025, underscoring a structurally slower growth backdrop for the world economy.

The principal swing factor behind the downgrade is the outbreak of conflict in the Middle East at the end of February 2026, which has disrupted commodity and energy markets and lifted inflation expectations. Global headline inflation is now projected at 4.4% in 2026 (an upward revision) before easing to 3.7% in 2027.

Brent Crude Oil Price Forecasts

While the global outlook remains mixed amid persistent inflationary and geopolitical risks, long-term investments in healthcare, technology and manufacturing continue to support growth opportunities.

GDP Growth Expectations

Region / Country	2025	2026E	2027E
World Output	3.4	3.1	3.2
United States	2.1	2.3	2.1
Euro Area	1.4	1.1	1.2
Emerging Market & Developing Economies	4.4	3.9	4.2
China	5.0	4.4	4.0
India	7.6	6.5	6.5

Key risks flagged by the IMF for the remainder of FY26/27 include further geopolitical escalation and energy-infrastructure damage, a correction in AI-related capital expenditure or a re-evaluation of AI profitability, renewed trade disputes (particularly around rare-earth elements), fiscal slippage and erosion of central bank credibility, and broader financial-market instability stemming from global macroeconomic imbalances. A de-escalation of current tensions and greater clarity on trade policy remain the principal upside levers to global growth. Source: https://www.imf.org/en/publications/weo/issues/2026/04/14/world-economic-outlook-april-2026

Indian Economy

India sustained its strong economic momentum during 2025-26, supported by resilient domestic demand, prudent macroeconomic management and continued public investment. Growth was driven by improving rural and urban consumption alongside robust infrastructure development. The countrys expanding manufacturing ecosystem and increasing participation in global supply chains further enhanced its competitiveness. While global uncertainties and commodity price fluctuations remain key risks, Indias underlying economic fundamentals continue to provide confidence in its long-term growth trajectory.

IMFs April estimates had projected Indias economy to grow by 6.5% in both 2026 and 2027. In its subsequent July 2026 update, the IMF trimmed the calendar-year 2026 growth forecast marginally to 6.4%, citing a more challenging global environment marked by geopolitical tensions and trade uncertainty, while raising the 2027 forecast to 6.7% on the back of resilient private consumption and a strong services sector. The Reserve Bank of India has also progressively revised its own growth estimates upward through the year, reinforcing the broad-based nature of the domestic recovery.

Indias resilience amid global uncertainty continues to reinforce the countrys role as a key driver of global economic activity and provides a supportive backdrop for domestically-manufacturing, export-oriented companies such as Shaily, which derived approximately 68% of FY26 revenue from exports.

Source: https://www.imf.org/en/publications/weo/ issues/2026/04/14/world-economic-outlook-april-2026

Global Plastic Industry

The global plastics market was valued at USD 533.59 billion in 2025 and is estimated at USD 560.38 billion in 2026, projected to reach USD 832.62 billion by 2034 at a CAGR of 5.1% over 2026-34. Asia Pacific remains the dominant region with a 53% share in 2025, led by China, India and Japan, followed by Europe (19.3%) and North America (16.6%).

Packaging remains the single largest end-use, accounting for 45.51% of demand and continuing to benefit from growth in food & beverage, consumer goods and pharmaceutical packaging, while polyethylene remains the dominant polymer type with a 23.3% share. Beyond packaging, growth is increasingly driven by the substitution of metal with engineering plastics in automotive and industrial applications (aided by the shift to electric vehicles), continued build-out of infrastructure and construction applications (an estimated 14.2% CAGR sub-segment), and rising investment in sustainable, bio-based plastics derived from renewable feedstocks such as corn starch and sugarcane. https://www.fortunebusinessinsights.com/plastics-market-102176

Indian Plastic Industry

Indias plastics industry, valued at approximately USD 44.28 billion in 2025 and an estimated USD 47.04 billion in 2026, is projected to reach USD 63.69 billion by 2031, implying a CAGR of about 6.24% over 2026-31. Growth continues to be underpinned by a combination of policy support and structural demand shifts: the Production-Linked Incentive (PLI) scheme is accelerating polymer capacity additions in Gujarat; rapid expansion of quick-commerce is lifting demand for rigid food-grade containers; Swachh Bharat Mission Phase-II is driving replacement of urban water and sanitation infrastructure with HDPE piping; the shift to electric two-wheelers is increasing use of engineering plastics in battery housings and lightweight components; and rising pharmaceutical exports are lifting consumption of medical-grade resins, concentrated in Gujarat and Maharashtra - directly in Shailys backyard.

Packaging remains the largest application (41.62% share), polyethylene the leading polymer type (33.68% share), and injection moulding the leading processing technology at approximately 35.45% of processing capacity - directly relevant to Shailys core manufacturing process.

Western India, where Shailys Gujarat manufacturing base (Halol and Rania) is located, accounts for the largest share of national plastics consumption at 46.55%. The Government of Indias Make in India push and the growing preference among Western customers for India-based sourcing under a China+1 diversification strategy continue to create meaningful opportunities for quality-driven, globally-certified Indian manufacturers such as Shaily.

Source: https://www.mordorintelligence.com/industry-reports/ analysis-of-plastic-industry-in-india

Consumer Segment

Home Furnishing Business

The global furniture and home-furnishing market is estimated at USD 1.0 trillion in 2026 and is projected to reach USD 1.43 trillion by 2031, growing at a CAGR of 7.39%. Growth is being driven by urbanisation and the resulting demand for space-efficient, modular and multi-functional furniture; rising middle-class incomes in emerging markets, particularly India; the continued integration of e-commerce with physical retail through visualisation tools and flexible fulfilment; the persistence of hybrid-work arrangements supporting demand for home-office furniture; a faster-growing outdoor-living sub-segment (8.12% CAGR); and regulatory and consumer pressure for recycled content and sustainable materials in furniture manufacturing. Source: https://www.mordorintelligence.com/industry-reports/ furniture-and-home-furnishing The global steel/metal furniture market, valued at USD 653.85 billion in 2024, is projected to reach USD 988.33 billion by 2031, growing at a CAGR of 5.30%. Growth continues to be underpinned by infrastructure development and smart-city investment, increased marketing of ready-to-use furniture for commercial and residential buildings, rising disposable income (particularly among millennial consumers), and the continued expansion of e-commerce distribution channels.

Source: https://www.verifiedmarketresearch.com/product/steel-furniture-market/

At Shaily

Shailys Consumer segment spans home furnishings, personal-care and FMCG packaging, carbon-steel furniture, offering end-to-end capabilities from design through final delivery across kitchenware, integrated cooking, dining, and organisational/ storage solutions. The Company has served marquee customers including IKEA, Unilever, P&G, Gillette, Corvi, Lidl and Lowes, with several relationships spanning 10-25 years.

Consumer segment revenue was approximately RS. 511.3 crore in FY26, broadly flat year-on-year, as continued softness in demand across the US and Europe weighed on volumes even as the Company added new customers and product lines.

HealthCare Segment

Global and Indian Medical Device Market

The global medical devices market, valued at USD 572.31 billion in 2025, is projected to reach approximately USD 1,032.66 billion by 2034, a CAGR of approximately 6.9%, with North America holding the largest share at 38.1%. Growth continues to be driven by rising chronic-disease prevalence (an estimated 422 million people globally live with diabetes, with 1.5 million deaths annually attributed to the condition), an ageing population, increased surgical and diagnostic procedure volumes, sustained R&D investment (breakthrough device designations rose from 135 in 2022 to 167 in 2023), and rising adoption of wearable and connected health devices.

Indias medical devices market, valued at approximately USD 15.2 billion in 2025, is projected to reach USD 50.1 billion by 2030, implying a CAGR of approximately 16.4% - roughly 2.5x the pace of the global market. The diagnostic-imaging sub-segment alone is expected to grow from RS. 17,606 crore in 2025 to RS. 25,726 crore by 2030. Indias medical-technology exports are targeted to reach approximately RS. 1,69,000 crore (USD 20 billion) by FY30, supported by the National Medical Devices Policy 2023, which promotes regulatory streamlining, infrastructure development and domestic manufacturing, alongside cumulative FDI inflows of approximately USD 4.24 billion into the sector between April 2000 and December 2025. Source: https://www.fortunebusinessinsights.com/industry-reports/medical-devices-market-100085 Source: https://www.ibef.org/industry/medical-devices

GLP-1 Therapies and the Semaglutide Patent Cliff

The global GLP-1 (glucagon-like peptide-1) market is estimated to grow from approximately USD 49.3 billion in 2025 to USD 157.5 billion by 2035, a CAGR of roughly 11-12%. Within this, the semaglutide market (Ozempic, Wegovy, Rybelsus) was estimated at USD 28.4 billion in 2024, growing to approximately USD 93.6 billion by 2035 (CAGR 10.5-11.5%), while the Mounjaro (tirzepatide) market, valued at USD 14.2-16.8 billion in 2024-25, is projected to reach approximately USD 78.5 billion by 2034, a CAGR of about 18.7% - the fastest-growing molecule in the class. According to the World Health Organization, more than one billion people globally live with obesity (650 million of them adults), and an estimated 530 million adults live with diabetes, of whom 98% have type-2 diabetes - a demand base that continues to expand faster than supply.

FY26 marked a pivotal structural event for this industry: the patent and data-exclusivity protection for semaglutide began expiring in a first wave of eight markets during 2026 - Canada, Brazil, China, India, Mexico, Turkey, Saudi Arabia and South Africa - which together represent approximately 33-38% of the worlds obese adult population. Indias patent expired on 20 March 2026, and more than 40 generic brands launched generic versions. Canada granted its first approvals in late April/ early May 2026.

Regulatory pathways vary by market - Canada and Saudi Arabia treat semaglutide as a small-molecule generic requiring only bioequivalence studies, while Brazil, India and South Africa classify it as a biosimilar requiring more extensive immunogenicity and clinical testing. The core markets of the US, EU and Japan remain patent-protected until 2031-32. The global market for pen and injector drug-delivery devices (across all therapy areas) was estimated at approximately USD 114.7 billion in 2025, projected to reach USD 236.5 billion by 2033 (CAGR 9.6%), while the sub-market specifically for GLP-1/insulin-style pen injectors was estimated at approximately USD 40 billion in 2024 and is projected to exceed USD 60 billion by 2030. Within GLP-1 drug administration specifically, auto-injectors hold an estimated 58% device-share, prefilled syringes approximately 23%, wearable patch injectors approximately 12%, and oral formulations the balance of approximately 6-7% - though more than 75% of the 55-60 GLP-1 molecules currently in development remain injectable, limiting near-term substitution risk from oral formats.

Source: https://www.iqvia.com/locations/emea/blogs/2025/07/ off-patent-semaglutide Source: https://www.iqvia.com/locations/emea/blogs/2026/04/ your-questions-answered-off-patent-semaglutide-in-2026 Source: https://www.precedenceresearch.com/mounjaro-market Source: https://www.grandviewresearch.com/industry-analysis/ semaglutide-market-report Source: https://marketintelo.com/report/glp-1-drug-delivery-device-market

At Shaily

Shailys Healthcare segment - comprising proprietary IP-led pen injectors, auto-injectors other specialty drug-delivery devices, and eye applicator together with primary pharmaceutical packaging and has been the biggest driver of the Companys growth over the past three years. Healthcare revenue grew to approximately RS. 392.8 crore in FY26 ( 40% of consolidated revenue). The installed pen-manufacturing capacity expanded massively to 35 mn pens p.a. as of March 2026.

During the year, the Company appointed Mr. Chi Hung Kam (Joe Kam), a two-decades SHL Medical and Flextronics veteran with experience managing nine manufacturing sites across Taiwan and the US, as Chief Operating Officer - Healthcare, effective 1 March 2026, reflecting the scale-up ambitions for this segment.

Industrial Segment

The global automotive plastics market, valued at USD 33.02 billion in 2025, is projected to reach USD 54.82 billion by 2033, a CAGR of approximately 6.8%, with Asia Pacific holding the largest share (46.57%) on the back of Chinas automotive and EV manufacturing scale. Growth continues to be driven by lightweighting - the replacement of metal components with engineered plastics to improve fuel efficiency and reduce emissions - a trend reinforced by tightening emissions regulation and the accelerating shift to electric vehicles, which particularly benefit from weight reduction to extend range. https://www.grandviewresearch.com/industry-analysis/ automotive-plastics-market

At Shaily

Shailys Industrial segment covers automotive components (including knobs and switchgear parts), appliance casings, LED lighting and high-performance engineering products, contributing approximately 9% of FY26 revenue on the back of strong demand across product segments and successful project ramp-ups.

The Company is a licensed processor of Torlon polymer, a critical capability for ultra-high-performance thermoplastic applications in semiconductors, aerospace & defence, electric vehicles and medical devices, and its ability to substitute plastic for metal rods in precision applications is described by management as unique globally.

Consumer Electronics and Semiconductor Segment

The global consumer electronics market, valued at USD 1,319.32 billion in 2025, is projected to reach USD 2,073.98 billion by 2033, a CAGR of approximately 5.9%, with Asia Pacific commanding a 49.3% revenue share on the back of rapid urbanisation, rising disposable incomes and smartphone/ e-commerce penetration.

Separately, Indias semiconductor manufacturing ecosystem has expanded meaningfully through FY26. Under the India Semiconductor Mission (an approximately RS. 76,000 crore, or USD 9 billion, government programme offering up to 50% fiscal support across fab, OSAT/ATMP and specialty-semiconductor scheme windows).

A complementary RS. 22,919 crore Electronics Component Manufacturing Scheme (ECMS), launched in 2025, is targeted at building out the upstream component supply chain, including the assembly, testing, marking and packaging (ATMP) consumables ecosystem that OSAT and fab customers require on a recurring, just-in-time basis and typically prefer to source domestically rather than import.

Source: https://www.grandviewresearch.com/industry-analysis/ personal-consumer-electronics-market Source: https://www.zetwerk.com/blog/manufacturing-technology/india-semiconductor-manufacturing-2026/

Consolidated Financial Performance of the Company for FY 2025-26

The company reported Revenue of RS. 990.67 Cr in FY 2025-26 as compared to RS. 786.8 Cr in FY 2024-25, a growth of 25.91% Y-o-Y.

Revenue from sale of products and services stood at RS. 980.83 Cr in FY 2025-26 as compared to RS. 782.3 Cr in FY 2024-25. The company reported EBITDA of RS. 287.7 Cr in FY 2025-26 as compared to RS. 178.4 Cr in FY 2024-25 i.e. a growth of 61% Y-o-Y.

EBITDA margins stood at 29.0% in FY 2025-26 as compared to 22.7% in FY 2024-25.

Profit before tax (PBT) came in RS. 222.6 Cr in FY 2025-26 as compared to RS. 119.3 Cr in FY 2024-25 i.e. a growth of 87% Y-o-Y.

The company reported Profit after Tax of RS. 169.9 Cr in FY 2025-26 as compared to RS. 93.1 Cr in FY 2024-25 i.e. a growth of 82.5% Y-o-Y.

The revenue mix for exports to domestic stands at 69:31 in FY 2025-26. The revenue mix continues to skew towards exports. Our Debt-to-Equity ratio stands at 0.3x times.

Total Capex spend (including work in progress) during FY 2025-26 is RS. 185.58 Cr. The major capex has been towards the new pharma plant.

Significant changes in Key Financial Ratios during FY 2025-26

The key financial ratios during FY 2025-26 vis-à-vis FY 2024-25 are as below:

Key Financial Ratios	31 st March 2026	31 st March 2025	Variance
Debtors turnover Ratio	4.61	4.58	0.66%
Inventory Turnover	2.83	3.02	-6.35%
Interest Coverage Ratio	15.03	8.04	86.95%
Current Ratio	1.25	1.22	2.50%
Debt Equity Ratio	0.3	0.4	-25.00%
Operating Profit Margin (%) EBITDA	29.04%	22.67%	28.10%
Return on Net worth (%) (ROE)	26.88%	18.50%	45.28%