Shilp Gravures Ltd Management Discussions

ECONOMIC SCENARIO AND OUTLOOK :

GLOBAL ECONOMY REVIEW AND OUTLOOK¹

The global economy maintained a stable growth trajectory in CY2024, recording a GDP expansion of 3.3%, despite persistent headwinds from geopolitical tensions, trade disruptions and evolving monetary policy landscapes. Headline inflation moderated to 5.8% in CY 2024 from 6.7% in the previous year, reflecting the continued impact of tighter monetary policies and easing commodity prices.

Central banks in major economies have initiated a gradual shift toward monetary easing, with initial rate cuts introduced in late CY 2024. Further reductions are anticipated in CY 2025, which could enhance liquidity and support a recovery in private sector investment activity. While global manufacturing exhibited signs of moderation driven by supply chain realignments and shifting demand, industrial output remained resilient.

Looking ahead, global GDP is projected to grow at a steady pace of 2.8% in CY 2025 and 3.0% in CY 2026. This outlook is underpinned by sustained consumer spending, targeted policy interventions and continued innovation. The global economy remains well-positioned to navigate macroeconomic uncertainties and capitalize on structural growth opportunities.

1 https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025 INDIA:

India remained a key driver of global growth and demonstrated strong economic resilience, recording a GDP growth of 6.2% in FY 202425.¹ Domestic demand remained strong, supported by stable private consumption and increased capital investments. The Reserve Bank of India (RBI) maintained a vigilant stance on inflation while supporting growth. Inflation moderated to 3.3%, supported by stable food prices, improved supply chain efficiencies and proactive monetary interventions.²

Indias growth trajectory is expected to remain robust, supported by strong consumer demand, continued government focus on capital expenditure and sustained policy support. The Union Budget introduced meaningful income tax relief for salaried individuals, which is anticipated to bolster urban consumption and drive domestic demand. In a long-anticipated move, the Reserve Bank of India (RBI) recently cut the repo rate by 50 basis points to 6.0%, signaling a shift toward a more accommodative monetary stance. Simultaneously, the reduction in the Cash Reserve Ratio to 4% is expected to improve systemic liquidity, creating favourable conditions for credit expansion and private sector investment.

Despite prevailing global uncertainties, including geopolitical risks and financial market volatility, Indias strategic initiativessuch as diversifying export destinations, strengthening domestic manufacturing capacities and advancing structural reforms are positioning the economy more firmly within global value chains. These efforts provide a resilient foundation for sustained and broad-based growth.

1 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2132688

2 https://www.mospi.gov.in/sites/default/files/press_release/CPI_PR_15Apr25.pdf OUTLOOK:

According to the International Monetary Fund, Indian economy is projected to deliver robust growth of 6.2% for 2025-2026, highest amongst the emerging economies, driven by strong domestic demand and healthy consumption growth supported by an improvement in labour market conditions, increasing consumer confidence, an expected recovery in rural demand and higher purchasing power with moderating of inflation. In the Union Budget for FY2023-24, the government announced a 33% increase in capex allocation to INR 10 trillion, which is expected to boost private investments. The Budget has also targeted a lower fiscal deficit in FY2023-24 at 5.9% and the government has committed to bring it down to below 4.5% by FY2025-26.

Risks to the outlook remain with weakness in the global economy impacting exports, volatility in food and crude oil prices, slowdown in private consumption and aggressive monetary tightening by global central banks to moderate inflation.

INDUSTRY STRUCTURE AND DEVELOPMENT PACKAGING INDUSTRY:

The Indian packaging sector has emerged as a vital contributor to the nations economy, fueled by rapid industrialization, increasing consumer demand, and a shift towards organized retail. Valued at INR 2,879 Bn in FY 2023, Indias plastic packaging market is projected to grow at a CAGR of 7.7%, reaching INR 3,810 Bn by FY 2028, the industry has grown at a steady rate of 6-7% annually, and its prospects continue to rise with the expansion of key sectors like food and beverage, pharmaceuticals, and e-commerce. Indias vast population, urbanization trends, and changing lifestyle preferences have heightened the demand for innovative, eco-friendly, and convenient packaging solutions. This transformation is supported by technological advancements and government policies promoting sustainability and waste reduction.

The Indian packaging sector offers compelling opportunities due to its strong growth trajectory and resilience in the face of global economic fluctuations. With the burgeoning middle class driving consumption, e-commerce penetration expanding in tier-II and tier- III cities, and increasing regulatory focus on sustainable practices, the sector is primed for innovation and long-term value creation. Additionally, Indias favourable demographic profile and its cost-competitive manufacturing environment make it an attractive hub for both domestic and international players1.

1 https://www.investindia.gov.in/sector/packaging

Quick-commerce operators in tier-1 cities, rising exports of generic medicines, and consumer preference for sustainably sourced materials are expanding the India packaging market into new substrates, barrier coatings, and distribution models. Capital flows are accelerating as private equity groups finance consolidations that help converters fund automation, closed-loop recycling, and advanced analytics. Paperboard and compostable films are winning share as multinationals align procurement with global decarbonization targets, while domestic brands adapt pack formats for rural cold-chain gaps and multilingual labelling.

Key Market Trends

With advancement in technology and general awareness, the packaging sector in India is well poised as most of the raw materials for packaging are abundantly available in the country. Moreover, the per capita spending has increased tremendously, leading to changing rural markets and a growing middle class who demand the best of products. Various upgraded technologies are being used in industry such as aseptic packaging, retort packaging and biodegradable packaging to enhance the life of food product.

GRAVURE INDUSTRY:

The Gravure Printing Market is projected to grow significantly between 2025 and 2035, driven by increasing demand from industries such as packaging, and furniture printing. The market is expected to reach USD 4,562.5 million in 2025 and is forecasted to expand to USD 8,808.8 million by 2035, reflecting a compound annual growth rate (CAGR) of 6.8% over the forecast period.

One of the major drivers of this market is the rising demand for high-quality and durable printing solutions in the flexible packaging industry. Gravure printing is widely preferred in packaging applications due to its superior image reproduction, consistency, and ability to handle large-scale printing with minimal defects.

Additionally, the growing emphasis on sustainable packaging solutions has prompted advancements in gravure printing technologies, including water-based inks and eco-friendly printing methods, further fueling market expansion.

The Asia-Pacific will be the leader in terms of growth for the gravure print market with huge industrialization growth, flourishing e- commerce businesses, and greater requirements for good print quality in the packaging material. China, India, Japan, and South Korea are all primary consumers as well as manufacturers of gravure printing products.

Your Company serves complete cross-section of the gravure industry such as: Flexible Packaging, Anilox Rollers, PVC Flooring, Decorative Laminates, Specialty Coatings, Artificial Leather, Gift Wrapper, Security printing and Transfer printing etc. India has an advantage of large volume consumption of consumer products and therefore gravure is the most preferred technology to handle such volumes due to economy of scale, availability of skilled manpower and high quality printing.

Your company continues to cater the Indian Packaging Industry with its dedicated endeavors which in turn stimulates the growth of the Company in the future. Your company has been investing in training the manpower and upgrading the technology from time to time to keep the pace with the changing trends.

FLEXO PRINTING INDUSTRY:

Flexography is used to print high volumes of labels, packaging, and other consumer products, economically at high speeds on a wide variety of substrates. It is used in many specialist applications as wrapping paper, stationery, and lables. This report contains a comprehensive data set covering all major end-use applications for national and regional markets, as well as current and future demand for flexographic equipment and consumables.

The flexographic printing market size stood at USD 19.80 billion in 2025 and is forecast to reach USD 26.28 billion by 2030, translating to a robust 5.83% CAGR over the period. Rising e-commerce volumes, stringent food-contact regulations, and continuous improvements in AI-enabled press automation are expected to uphold this momentum in the flexographic printing market1.

Flexo output is growing across most applications - notably packaging. It accounts for the overwhelming volume of corrugated board printed. Growth in this segment is forecast to continue; driven by economic demand, particularly from e-commerce and consumerfacing boxes.

The three largest regions for flexo printing are Asia, North America and Western Europe. Combined, these account for 81.0% of global volume and 83.1% of the value in 2024. Asia is forecast to experience strong growth at a 5.8% CAGR by volume for 2024-2029, with India the fastest growing national market. North America and Western Europe are mature regions for flexo print, and will grow more moderately - 2.3% CAGR and 1.7% CAGR, respectively - across the same period2.

1. https://www.mordorintelligence.com/industry-reports/flexographic-printing-market

2. https://www.labelandnarrowweb.com/breaking-news/global-flexo-printing-market-to-reach-267-2-billion-in-2029/ OPPORTUNITIES, THREATS AND CONCERNS:

The volatility in raw material prices is a major challenge impeding market growth.

The different types of packaging materials used for the packaging of food include plastic, glass, metals, and paper. For example, the cartons used in food packaging are produced either from recycled fiber or virgin fiber. The prices of both recycled fiber and virgin fiber fluctuate constantly, which is a major concern for end-users such as carton producers. The instability in the price of raw materials will result in increased production cost and reduced profit margins.

The prices of packaging raw materials such as paper and paper products that are used to manufacture corrugated packaging solutions are also expected to fluctuate. In addition, aluminum, a key raw material used in manufacturing food cans, is also exhibiting continuous price fluctuations. Hence, the above-mentioned factors are expected to hinder the growth of the India flexible packaging market in focus.

However, despite the challenges often presented by flexible packaging in terms of consistent recycling channels, the format remains a preferred choice for brands, retailers and consumers. In coming years, the Indian packaging industry will see substantial growth. The increasing awareness regarding clean water, safe food, and pharmaceuticals along with adoption of next gen digital technologies will aggressively penetrate and drive the Indian packaging industry".

The next decade:

In the coming decade, India will focus on transitioning this industry towards sustainability. The implementation of single-use plastic ban policy along with a focus on recycling and biodegradability will bring about a major transformation in this sector. Currently, the Indian packaging industry consumes more polymers compared to the global average. This creates a unique opportunity for India to drive this industry towards sustainability, bio-based/paper-based packaging.

The packaging sector has a much wider exposure to other sectors of our economy. The growth of these sectors in the coming decade will have a combined effect to take this sector to new heights. The Government of India recognised the potential of this sector and released a slew of policies like the single use plastic ban policy, profit linked tax incentive for food packaging, adoption of the National Packaging Initiative, to further incentivise innovation in this sector. There has also been a rise in material technology research-based start ups to create new sustainable packaging materials.

The presence of large number of players in the market and entry of new entrants in the flexible packaging market is projected to intensify the market competition. The market competition is seen on the basis of price, quality, services, and innovation. The leading players in the market putting efforts by introducing innovative and bio-based packaging materials.

Environmental Consciousness

With environmental awareness rising globally, there is a strong momentum towards sustainable solutions. Stakeholders across the value chain are voicing their concerns regarding the use of plastic packaging and organizations are realigning themselves in this direction. However, there are teething challenges the market is facing in providing these sustainable solutions.

The investment required for the research of these solutions is high. This has limited the number of available eco-friendly options. Also, these solutions come at an added cost which neither the industry nor the consumer is prepared to absorb. This is making manufacturers wary of investing in the production of packaging that might not fetch the markup price. Importing again is cost-intensive.

Solving Industry Challenges with Technology

Most of these challenges can be solved with technology, to form a tightly knit and integrated system. However, with technology, an allembracing approach would be necessary. Every stage of the procurement process will need automation. Business leaders can empower their teams with visibility of their supply chain in real-time. This would help them absorb demand fluctuations faster.

The industry has immense potential in terms of manufacturing capacity. This combined with an automated supply chain system can create a sustainable ecosystem that can be used by generations to come. Digitalization of the supply chain is what will enable the packaging industry to operate at full potential. And thats a mission every individual at Bizongo is working towards developing.

SEGMENT WISE PERFORMANCE: As on March 31, 2025, the Company has only two reportable segments, that of i) manufacture of engraved copper rollers and ii) energy generation through wind mill. The segment revenue, results, assets, and liabilities include the respective amounts identifiable to each of the segment and amount allocated to it. The figurative parameter in detail is provided in Note no. 44 (Segment Reporting) in the Note to Financial Statements.

FINANCIAL PERFORMANCE: An overview of the financial performance is given in the Boards Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.

KEY FINANCIAL HIGHLIGHTS:

KEY FINANCIAL RATIOS (STANDALONE):

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is required to provide 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:

1 Increase is on account of repayment of entire Interest thereon upto 31 March,2025.

2 Decrease is on account of decreased in net profit after taxes

3 Decrease is on account of decreased in earning before interest and taxes INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has laid down internal financial controls. The policies and procedures adopted by the Company ensure orderly and efficient conduct of its business, safe- guarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable information.

Your Company have an Audit Committee and has met four times in the year. Audit Committee ensures proper compliance with the provisions of the Listing Regulations, Companies Act, reviews the adequacy and effectiveness of the internal control environment and monitors implementation of internal audit recommendations. Besides the above, Audit Committee is actively engaged in overseeing financial disclosures. The recommendations of the Internal Auditors and the Audit Committee are followed up effectively for implementation.

HUMAN RESOURCES / INDUSTRY RELATIONS:

The Company considers its people to be its biggest asset and credits its sustained improvements to their ethics, dedication and energy. It is its endeavour to offer a work environment and HR processes that promote creativity, teamwork, meritocracy, learning and leadership. The Human Resource Management continues to be focused on improving employee productivity, reducing employee cost and building necessary skill sets whilst building employee motivation through varied employee engagement initiatives.

Your Company is confident that its Human Capital will effectively contribute to the long-term value enhancement of the organization. The Company continuously nurtures this environment to keep its employees highly motivated, result oriented and adaptable to changing business environment. There exist peaceful and amicable relations with staff and workers at office and plant.

As on March 31, 2025, there are total 262 employees working on the pay roll of the Company and there are 159 workers working on contract basis.

CAUTIONARY STATEMENT:

Statements in the Management Discussion & Analysis Report describing the Companys objectives, projections, expectations, opinion and predictions may please be considered as "forward looking statements" only. Actual results may differ materially from those expressed or implied. Important factors that could influence the Companys operations should be viewed in light of changes in market conditions, domestic demand and supply conditions, prices of raw materials, economic developments in the country, changes in the government regulations, tax laws and other statutes and such other incidental factors which are material to the business operation of the Company.