Shilp Gravures Ltd Management Discussions

ECONOMIC SCENARIO AND OUTLOOK :

GLOBAL ECONOMY REVIEW AND OUTLOOK1

Global growth is projected to be 3.0 percent in 2026 and 3.4 percent in 2027, down from the average of 3.5 percent observed in 2024-25 and broadly unchanged on a cumulative basis compared with the forecasts in the April 2026 World Economic Outlook (WEO). The modest slowdown reflects the effects of the war in the Middle East being partly offset by accelerated demand-driven momentum in the global technology cycle thanks to advances in artificial intelligence (AI) and its adoption. Energy exporters outside the conflict zone benefit from favorable terms of trade, whereas economies plugged into the technology-led upturn experience stronger activity even if they are energy importers. In contrast, activity weakens for energy importers with limited participation in the technology value chain, a group that includes many low-income countries. Global headline inflation is expected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before declining to 3.9 percent in 2027. Slightly revised upward from April, these projections indicate that the disinflation trend in place since the beginning of 2024 has stalled.

Risks to the outlook are more balanced than in April but still tilted to the downside. The possibility of renewed Middle East conflict looms large and could extend commodity price volatility, further threaten supply chains, raise prices, and weigh on financial conditions. Trade fragmentation could accelerate, possibly hurting output and increasing prices. A possible correction in technology-driven expectations adds to the downside risks, whereas eroded policy buffers can amplify those risks. Upside risks stem from a swifter-than-expected normalization in energy markets, stronger-than-expected technology investment, a revival of durable cooperation that lowers trade barriers, and structural reform that raises medium-term growth. Policy priorities are restoring price stability, supported by clear communication, central bank independence, and strong financial oversight, while rebuilding fiscal buffers and using fiscal tools sparingly through temporary, targeted support that preserves price signals.

Structural reforms are needed to promote energy security, AI readiness, domestic rebalancing, and international cooperation should be strengthened to relieve the strain of ongoing tensions.

Source: 1 https://www.imf.org/en/Publications/WEO/Issues/2026/04/22/world-economic-outlook-april-2026 INDIA1:

The year 2025 may have begun with one set of expectations and ended with another for the world,India included. Growth was strong in the first quarter and continued to improve in the subsequent two quarters. The central bank cut interest rates aggressively and loosened liquidity conditions. The government announced significant tax breaks for households in the budget for fiscal year 2026 (FY26) in February. It achieved a fiscal deficit of 4.8% of GDP, against the budgeted 4.9%, and announced a target of 4.4% for FY26, fulfilling the promise made in 2021 to reduce the Union fiscal deficit by more than half from 9.2% in FY21. India received credit rating upgrades from three credit rating agencies in 2025, starting with Morningstar DBRS in May, followed by S&P in August and R&I in September. S&Ps upgrade of India from BBB- to BBB was Indias first credit rating upgrade from a major agency in nearly two decades.

The Indian rupee underperformed in 2025. India runs a trade deficit in goods. Its net trade surplus in services and remittances is not enough to offset it. India depends on foreign capital flows to maintain a healthy balance of payments. When they run drier, rupee stability becomes a casualty.

The rupees valuation does not accurately reflect Indias stellar economic fundamentals. In other words, the rupee, therefore, is punching below its weight. Of course, it does not hurt to have an undervalued rupee in these times, as it offsets to some extent the impact of higher American tariffs on Indian goods, and there is no threat of higher inflation from higher-priced crude oil imports now.

Indias recent economic performance has demonstrated that macroeconomic stability and growth can be sustained even in a turbulent global environment. But this chapter has argued that the nature of the challenge now facing India is changing. In a world marked by geopolitical fragmentation, contested trade, volatile capital flows, and rapid technological shifts, growth by itself is no longer the binding constraint. Source: 1 https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf OUTLOOK1:

The Indian economy continued to demonstrate resilience during FY 2025-26 despite an uncertain global economic environment, geopolitical developments and trade-related challenges. The growth was supported by resilient domestic demand, private consumption and capital formation. Indias nominal GDP increased by 8.9% to 346.36 lakh crore during FY 2025-26, compared with 318.07 lakh crore in the previous financial year."

The industrial sector maintained a positive growth trajectory during FY 2025-26, supported by resilient domestic demand, strengthening manufacturing activity and continued investment across key sectors of the economy. The manufacturing sector remained an important contributor to overall economic growth, supported by favourable domestic demand conditions and the continued expansion of Indias industrial and manufacturing base.

The sustained growth in manufacturing and consumption-oriented sectors is expected to provide a supportive environment for the packaging industry and allied sectors, including the gravure printing and gravure cylinder/roller industry.

Going forward, Indias economic outlook remains broadly positive, supported by domestic demand, investment activity, macroeconomic stability and structural reforms. However, risks arising from global economic conditions, geopolitical tensions, commodity prices, exchange- rate movements and trade-related developments may continue to influence business conditions.

Source: 1 https://www.mospi.gov.in/latest-releases

INDUSTRY STRUCTURE AND DEVELOPMENT PACKAGING INDUSTRY:

The Indian packaging industry continued to witness strong growth during FY 2025-26, supported by rising domestic consumption, urbanisation, increasing disposable incomes and the expansion of organised retail and e-commerce. The growth in consumption-oriented sectors such as food and beverages, pharmaceuticals, personal care, FMCG and consumer durables has continued to generate demand for innovative, efficient and high-quality packaging solutions.

Indias packaging industry is projected to grow at around 9% CAGR over the next five years and reach approximately US$92 billion by FY 2030, according to an industry report by Avendus Capital1. The growth is expected to be driven by increasing consumption across key end- use sectors, including food and beverages, pharmaceuticals, personal care, agriculture, consumer durables and e-commerce.

Flexible packaging continues to remain one of the important segments of the Indian packaging industry owing to its cost efficiency, versatility, lightweight characteristics and suitability for a wide range of consumer products. The segment is witnessing increasing adoption in FMCG and food-related applications, while sustainability considerations are encouraging the development of recyclable materials, lightweight packaging and mono-material structures.

The packaging industry is also undergoing technological transformation, with increasing emphasis on automation, improved printing quality, shorter turnaround times, customised packaging and sustainable packaging solutions. These developments are creating opportunities across the packaging value chain, including flexible packaging films, laminates, printing and associated manufacturing processes.

For the gravure printing ecosystem, the continued growth of flexible packaging is particularly relevant. Gravure printing remains an important printing technology for high-volume and high-quality packaging applications, thereby supporting demand for precision- manufactured gravure printing cylinders and rollers. The industrys increasing focus on quality, consistency, productivity and advanced printing technologies is expected to create opportunities for manufacturers of gravure cylinders and rollers.

The industry is, however, exposed to challenges including volatility in raw material and energy costs, increasing environmental and sustainability requirements, competition from alternative packaging materials and printing technologies, and the need for continuous investment in technology and process efficiencies.

Source: 1 https://www.avendus.com/about/newsroom KEY MARKET TRENDS

Technological advancement, automation and digitalisation are increasingly shaping the packaging and printing ecosystem. Packaging manufacturers are focusing on improved print quality, faster turnaround, process efficiency and greater consistency. These developments are creating opportunities for technologically advanced gravure printing cylinders and rollers. The establishment of new high-technology gravure cylinder manufacturing capacity in India, including facilities equipped with electro-mechanical and laser engraving technologies, reflects the industrys continuing focus on precision and technological advancement.

GRAVURE INDUSTRY:

The Indian gravure printing industry continues to play an important role in the flexible packaging ecosystem, particularly in high-volume applications where consistent print quality, colour reproduction and productivity are critical. The growth of consumer-oriented sectors and increasing demand for high-quality printed packaging continue to support the underlying demand for gravure printing solutions.

The industry is undergoing technological transformation, with increasing adoption of advanced electro-mechanical and laser engraving technologies, automation, digital workflows and automated inspection systems. These developments are aimed at improving precision, repeatability, productivity and turnaround time.

Sustainability and environmental considerations are also becoming increasingly important across the gravure value chain. Industry participants are focusing on reducing solvent and chemical usage, improving solvent recovery, reducing energy consumption and exploring alternative plating and cylinder technologies. The increasing adoption of water-based and energy-efficient printing solutions is expected to influence future technology and process choices.

In line with the evolving requirements of the gravure industry, your company remains committed to strengthening its technological capabilities, enhancing operational efficiency and maintaining high standards of product quality and consistency. The Company continues to focus on timely delivery, customer satisfaction, process optimisation and adoption of appropriate technological advancements. It remains focused on responding proactively to changing market requirements, including the growing emphasis on precision, automation, sustainability and cost efficiency, while strengthening its position as a reliable partner to customers in the gravure printing and flexible packaging ecosystem.

FLEXO PRINTING INDUSTRY:

Flexography is used to print labels, packaging, and other consumer products, economically at high speeds on a wide variety of substrates. It is widely used for packaging applications such as flexible packaging, labels, corrugated boxes, bags and pouches.

Indias flexographic printing industry is experiencing increasing adoption, particularly across flexible packaging, corrugated packaging and labels & tags. Industry estimates indicate that the Indian flexographic printing market generated approximately US$560.5 million in 2025 and is projected to grow at a CAGR of around 8.6% during 2026-2033. Flexible packaging was the largest application segment in 2025, while labels and tags are expected to be among the faster-growing segmentsl.

A significant trend is the movement of flexography from being primarily a cost-efficient printing alternative towards a more automation- driven and technology-oriented printing process. Industry discussions in India during 2026 have highlighted process standardisation, automation, process control and reduction of production variability as key priorities for converters.

Flexographic printing is also benefiting from its ability to print on a wide range of substrates and its suitability for packaging applications. Improvements in plate technology, colour management, automation and press efficiency are enhancing print quality and productivity. The technology is particularly relevant for applications requiring flexibility, shorter production runs and frequent job changes.

Thus, gravure and flexography are increasingly evolving as complementary technologies, with the choice depending on run length, substrate, print requirements, cost and production economics.

1. https://www.grandviewresearch.com/horizon/search?q=flexographic%20printing

OPPORTUNITIES. THREATS AND CONCERNS:

The continued expansion of flexible packaging provides opportunities for the gravure printing ecosystem. Gravure remains well suited to high-volume applications requiring consistent print quality, colour reproduction and productivity. Increasing demand for high-quality graphics, frequent product launches and differentiated packaging is expected to support the requirement for precision-manufactured gravure cylinders and rollers.

Technological development across the printing industry presents further opportunities through automation, digital workflows, advanced engraving and plate technologies, automated inspection, process optimisation and improved quality-control systems. Manufacturers capable of adopting appropriate technologies and providing consistent quality and faster turnaround are expected to be better positioned to benefit from market growth.

However, intensifying competition among packaging converters and printing companies may also result in pricing pressure and increased expectations relating to quality, delivery schedules and cost efficiency. Customers are increasingly seeking shorter turnaround times, improved productivity and greater flexibility while maintaining competitive pricing.

Customer concentration and dependence on key customers may expose manufacturers to fluctuations in order volumes and pricing. Any slowdown in the underlying consumer, FMCG, food and beverage or pharmaceutical sectors may consequently affect demand for packaging and printing services.

For gravure cylinder and roller manufacturers, maintaining consistent quality, dimensional accuracy, engraving precision and timely delivery is critical. Any quality failure, production interruption, machinery breakdown or delay in delivery may affect customer relationships and business performance.

Your Company remains committed to maintaining high standards of product quality and process efficiency while adapting to the industrys increasing emphasis on automation, sustainability, precision and cost competitiveness.

THE NEXT DECADE:

The Indian packaging industry is expected to remain a significant growth sector over the next decade, supported by increasing consumer expenditure, urbanisation, rising disposable incomes, organised retail, e-commerce and the continued expansion of food and beverages, pharmaceuticals, FMCG, personal care and other consumer-oriented industries. The increasing penetration of packaged products and the evolving requirements of brand owners are expected to create sustained demand for innovative, attractive and functional packaging solutions..

Flexible packaging is expected to remain an important growth segment owing to its lightweight characteristics, cost efficiency, versatility and suitability for a wide range of consumer products. Increasing demand for differentiated packaging, frequent product launches and greater product customisation is expected to create opportunities for packaging converters and associated printing technologies.

Over the next decade, your Company intends to remain focused on strengthening its position within the evolving packaging and printing ecosystem. The Company will continue to invest in technology, automation, precision manufacturing, quality improvement and process efficiency, while closely monitoring developments in gravure, flexographic and digital printing.

ENVIRONMENTAL CONSCIOUSNESS

Environmental sustainability is expected to become an increasingly important consideration across the packaging and printing industry. Growing awareness among consumers, brand owners and regulators regarding climate change, resource conservation, plastic waste and responsible manufacturing is expected to influence packaging materials, printing processes and supply-chain practices.

The packaging industry is expected to witness greater emphasis on recyclability, lightweighting, reduction in material consumption, mono-material packaging, responsible sourcing and circular-economy principles. These developments are likely to influence the choice of substrates, inks, coatings and printing technologies and may require continuous adaptation across the packaging value chain.

Your Company believes that sustainability and operational efficiency can complement each other and will continue to integrate environmental considerations into its long-term business strategy while maintaining product quality, customer requirements and competitiveness. TECHNOLOGY. INNOVATION AND INDUSTRY TRANSFORMATION

The printing and packaging industry is expected to undergo significant technological transformation over the next decade, driven by automation, digitalisation, artificial intelligence, advanced materials and increasing customer expectations for quality, speed and flexibility. The convergence of conventional printing technologies with digital workflows is expected to reshape production processes and business models across the industry.

For the gravure industry, continued advancement in laser and electro-mechanical engraving, automated cylinder production, colour management and data-driven process control is expected to improve precision, productivity and consistency. At the same time, advancements in flexographic plate technology and digital printing are expected to increase competition in selected applications.

The Company recognises that continuous technological advancement will be critical to maintaining competitiveness. Accordingly, your Company remains committed to evaluating and adopting appropriate technologies, automation and process improvements, while strengthening its technical capabilities and human resources. The Company will continue to focus on innovation, product development, quality enhancement and operational efficiency to meet evolving customer requirements.

SEGMENT WISE PERFORMANCE:

As on March 31, 2026, 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:

( in Lacs)

Particulars	Standalone		Consolidated
	2025-26	2024-25	2025-26	2024-25
Revenue from operation	8838.00	8,261.09	9787.45	9,151.55
EBITDA	1759.40	1,049.58	1701.93	1,033.22
Profit after Tax (PAT)	795.87	420.81	699.66	371.29
Basic/Diluted Earnings per share	12.94	6.84	11.38	6.04

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:

Ratios	2025-26	2024-25	%change
Debtors Turnover	56.35	54.10	4.16
Inventory Turnover	69.70	83.07	(16.09)
Interest Coverage Ratio1	38.58	19.22	100.73
Current Ratio2	7.56	5.79	30.74
Operating Profit Margin	11.22	9.29	20.76
Net Profit Margin3	9.01	5.09	77.01
Return on Networth4	7.41	4.18	77..27

1 Increase is on account of repayment of entire Interest thereon upto 31 March,2026.

2 Increase is on account of decrease in payables

3 Increase is on account of increase in net profit after taxes

4 Increase is on account of increae 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:

Human resources continue to remain an important component of the Companys operations, particularly in a technically specialised manufacturing industry such as gravure cylinder and roller manufacturing. The Companys performance depends on the availability of skilled personnel across manufacturing, engraving, plating, quality control, maintenance, engineering, production planning and customer service functions.

The Company recognises that skilled and technically competent manpower will be critical to the successful adoption of advanced manufacturing technologies, automation and digitalisation. Accordingly, your Company remains focused on employee training, skill development, knowledge enhancement and continuous improvement to build capabilities aligned with evolving industry requirements.

With increasing adoption of automation, laser engraving, advanced electro-mechanical systems, digital workflows and automated inspection technologies, the nature of skills required within the industry is also evolving. The Company intends to strengthen its technical capabilities and provide appropriate learning and development opportunities to enable employees to adapt to technological changes and emerging business requirements.

The Company is committed to maintaining a safe, inclusive, professional and productive work environment and encourages employee participation, teamwork and continuous improvement. Appropriate emphasis is placed on occupational health and safety, employee welfare and compliance with applicable labour and employment laws.

As on March 31, 2026, there are total 253 employees working on the pay roll of the Company and there are 162 workers working on contract basis.

Industrial relations during the year remained cordial and constructive. The Company continues to maintain an open and transparent approach towards employee communication and engagement and endeavours to address employee-related matters in a timely and fair manner. 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.

	For and on behalf of the Board of Directors of Shilp Gravures Limited
Place : Rakanpur	Ambar Patel	Jayantilal Jhalavadia
Date : 6th August, 2026	(Managing Director)	(Director)
	(DIN: 00050042)	(DIN: 01754051)