Shish Industries Ltd Management Discussions

Industry structure and developments:

During the financial year 2024 25, the industrial packaging and building materials sectors witnessed steady growth, driven by a resurgence in manufacturing activity, infrastructure development, and increased focus on sustainable solutions. The industrial packaging segment benefited from heightened demand across key end-user industries such as chemicals, agriculture, pharmaceuticals, and FMCG, with growing emphasis on product safety, logistics efficiency, and environmental compliance. Meanwhile, the roofing and insulation products market continued to gain momentum, supported by government initiatives promoting energy efficiency, green buildings, and affordable housing. Advancements in materials technology, along with rising customer preference for durable and cost-effective solutions, further influenced the industry landscape. The company operated in a moderately fragmented market, characterized by evolving customer requirements, stringent regulatory standards, and increasing competition from both domestic and international players. These trends offer significant growth opportunities for companies focused on innovation, quality, and sustainability.

Global Economic Overview:

The global economy in FY 2024 25 experienced moderate recovery amid continued geopolitical tensions, inflationary pressures, and evolving supply chain dynamics. While advanced economies faced subdued growth due to tight monetary policies and high borrowing costs, emerging markets showed relative resilience, supported by domestic consumption, infrastructure investments, and easing commodity prices. Key sectors such as manufacturing, construction, and logistics critical to our business operations witnessed gradual stabilization, creating a mixed demand environment across geographies. The global push toward sustainability and circular economy principles further influenced industry practices, particularly in packaging and building materials, prompting greater adoption of eco-friendly solutions. Despite lingering uncertainties, improving global trade sentiment and policy support in infrastructure and housing sectors provided a positive outlook for companies operating in industrial packaging and building products, laying a foundation for long-term growth.

Packaging Market Analysis

The Packaging Market size is estimated at USD 1.18 trillion in 2025, and is expected to reach USD 1.44 trillion by 2030, at a CAGR of 3.92% during the forecast period (2025-2030).

The packaging market is set to undergo a significant transformation spurred by factors such as sustainability, technological innovations, evolving consumer preferences, and shifting market dynamics. There is a rising preference for materials that are biodegradable, compostable, and recyclable. In response, companies are increasingly adopting sustainable practices in their packaging to align with consumer expectations and regulatory mandates.

The packaging industry is evolving toward sustainable solutions, driven by consumer preferences, government regulations, and environmental commitments from companies. Companies are adopting mono-material packaging and plant-based films to meet environmental regulations and reduce their carbon footprint.

Major e-commerce companies in China are implementing measures to minimize packaging waste and increase cardboard box reuse. Cainiao (Alibaba Groups logistics arm), JD.com, and SF Express have established programs to reduce plastic usage and adopt recyclable packaging materials. Logistics companies are transitioning to recycled and biodegradable paper-based packaging to meet consumer and regulatory requirements. Cainiao announced in 2024 that it sources over 70% of its shipping boxes from recycled paper, reducing landfill waste by millions of tons annually.

Various drivers shape the growth, demand, and sustainability of the paper and glass packaging markets. Heightened awareness of environmental issues has led consumers to favor sustainable packaging. Paper and glass, recognized for their recyclability, are increasingly chosen over plastic. Global government regulations are curbing plastic use and championing recyclable materials, amplifying the demand for paper and glass packaging. End-user industries, such as the food and beverage sector, are major consumers of paper and glass packaging. While glass is the go-to for beverages like juices and alcohol, paper dominates in food wrapping and takeaway containers.

The market faces challenges from evolving regulatory standards due to environmental concerns. Governments worldwide are implementing regulations to minimize environmental waste and improve waste management processes in response to public concerns about plastic packaging waste.

Packaging Industry Overview

The packaging market experiences rivalry due to the presence of both global and regional players, steady market growth, a focus on product differentiation, and ongoing industry consolidation.

Global corporations leverage their scale, broad portfolios, and innovation to compete, while regional players emphasize niche markets and customer relationships, creating a dynamic competitive environment.

Traditionally seen as a mature market, the sector is now shifting toward innovation and differentiation. Companies invest in R&D to develop new designs, improve functionality (e.g., easy-open ends, resealable features), achieve lightweighting for sustainability, and enhance packaging aesthetics. This focus on differentiation heightens rivalry as firms aim to offer unique value propositions.

The market is highly fragmented, with a mix of large multinational corporations and numerous small to medium-sized enterprises (SMEs) operating across various regions. These companies compete intensely based on factors such as price, product quality, innovation, sustainability, and customer service.

OPPORTUNITIES

? The Company is successfully increasing its reach in various parts of the country where it is less represented.

? Each of the business divisions of the Company is working out an extensive plan and strategy to reach such areas by appointing new channel partners, increasing the connection between retailers and influencers and also creating awareness and promotional campaigns.

? The Company has also been participating in various national and international exhibitions and remains focused on increasing its export business.

? The Company is judiciously spending on promoting its products on various media platforms including national and regional TV channels, OTT platforms during popular events and also popular trade magazines.

? At Shish Industries, we align our initiatives to adopt innovative practices and strategic policies to restore ecosystems and minimize environmental degradation.

THREATS

? The increasing focus on minimizing the utilization of plastic across the packaging sector is projected to have a negative impact on the global plastics corrugated packaging market. ? The global plastics corrugated packaging market is highly competitive ? Social factors impacting packaging - From food shortages and ethical sourcing to responsible water and land use, consumers want to know more about the products they buy and the brands that produce them ? New rules around the use of plastics and pollution-causing materials, as well as protecting human and planetary health, will greatly affect consumers. ? Extreme weather conditions can readily affect corrugated packaging

SEGMENT WISE OR PRODUCT-WISE PERFORMANCE & DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The company is primarily engaged in the business of Corrugated Plastic Sheets, which constitute a single reportable segment in accordance with Ind AS 108 "Segment Reporting".

FINANCIAL HIGHLIGHTS

	Standalone		Consolidated
Particulars
	F.Y. 2024-25	F.Y. 2023-24	F.Y. 2024-25	F.Y. 2023-24
Revenue from Operations	11,778.82	8,547.88	11,625.12	8,574.08
Other Income	1,020.18	265.48	360.36	263.85
Total Income	12,799.00	8,813.36	11,985.48	8,837.93
Less: Total Expenses before Depreciation, Finance Cost and Tax	10,965.81	7,493.22	10,482.14	7,485.52
Profit before Depreciation, Finance Cost and Tax	1,833.19	1,320.14	1,503.34	1,352.41
Less: Depreciation	202.69	112.28	457.35	143.69
Less: Finance Cost	162.84	77.14	254.17	95.02
Profit Before Tax	1,467.66	1,130.72	791.83	1,113.70
Less: Current Tax	369.38	285.13	199.29	309.13
Less: Short provision for earlier year	14.40	4.55	14.46	5.76
Less: Deferred tax Liability (Asset)	(11.33)	(2.15)	(19.03)	(1.62)
Profit after Tax (before Minority Interest)	1,095.21	843.20	597.11	800.43
Less: Profit / (Loss) Of Minority Interest	-	-	(276.92)	-
Profit after Tax	1,095.21	843.20	874.03	800.43>

FINANCIAL PERFORMANCE On Standalone Basis

During the year under review, the revenue from operation of the Company was stood at INR 11,778.82 Lakhs as against that of INR 8,547.88 Lakhs for previous year. Revenue from operation of the Company was increased by 37.80% over previous year. Profit before Tax for the financial year 2024-25 stood at INR 1,467.66 Lakhs as against that of INR 1,130.73 Lakhs making the net profit of INR 1,095.21 Lakhs for the financial year 2024-25 as against the net profit of INR 843.20 Lakhs for the financial year 2023-24. The increase in profit after tax was achieved due to effective purchase policy of the Company and thereby reducing the cost of raw materials. During the year under review, the export sales of the Company were increased by 37.42%, whereas domestic sales of the Company were increased by 38.22% than that of respective for previous year.

On Consolidated Basis

The consolidated revenue from operation of the Company for financial year 2024-25 stood at INR 11,625.12 Lakhs as against that of INR 8,574.08 Lakhs for previous year. The consolidated net profit after tax (after adjustment of minority interest) for the financial year 2024-25 was stood at INR 874.03 Lakhs as compared to INR 800.43 Lakhs for the previous financial year 2023-24.

The Company has reported growth of 9.20% in consolidated net profit after tax and 35.58% in revenue for the full financial year 2024-25 as compared to the previous financial year 2023-24. The increase in profit after tax was achieved due to effective purchase policy of the Company and thereby reducing the cost of raw materials.

RISK AND CONCERNS

The Company is exposed to various risks and uncertainties which may adversely impact its performance. The Companys future growth prospects and cash flow generation could be materially impacted by any of these risks or opportunities. The major risks as identified by the Company are demand-risks due to any resurgence in the COVID 19 pandemic, currency risk associated with imports, unfair competition, etc. The Company follows the Enterprise Risk Management (ERM) framework to manage and mitigate such risks which is primarily based on the integrated framework for enterprise risk management and internal controls developed by the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Control system and adequacy Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. Thus, internal control is an integral component of risk management. The Internal control checks and internal audit programmes adopted by the Company plays an important role in the risk management feedback loop, in which the information generated in the internal control process is reported back to the Board and Management. The internal control systems are modified continuously to meet the dynamic change. Further the Audit Committee of the Board of Directors reviews the internal audit reports and the adequacy and effectiveness of internal controls.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS (STANDALONE BASIS)

Particulars	F.Y. 2024-25	F.Y. 2023-24	Variance	Reason
Debtors Turnover	5.62 times	4.26 times	31.96%	Ratio increased as the increase in Revenue as compared to the
				increase in Trade receivables is more
Inventory Turnover	6.26 times	8.09 times	(22.71%)	Ratio decreased due to increase in inventories as compared to
				increase in revenue
Interest Coverage Ratio	10.71 times	16.43 times	(34.84%)	The Ratio has decreased due to percentage increase in Interest
				Expense as compared to EBIT.
Current Ratio	2.00: 1.00	2.43: 1.00	(17.53%)	Current Ratio has decreased due to percentage increase in
				Current Liabilities as compared to Current Assets
Debt Equity Ratio	0.24: 1.00	0.22: 1.00	7.20%	Ratio increased due to increase in debt as compared to increase
				in Shareholders Fund
Operating Profit Margin (%)	13.74%	14.09%	(2.42%)	There is nominal difference in Operating Profit Ratio
Net Profit Margin (%)	9.30%	9.86%	(5.74%)	There is nominal difference in Net Profit Ratio
Return on Net Worth	10.13%	14.27%	(29.03%)	Due to significant increase in Shareholders equity in comparison
				to the Net Profit, the Ratio Decreased

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS (CONSOLIDATED BASIS)

Particulars	F.Y. 2024-25	F.Y. 2023-24	Variance	Reason
Debtors Turnover	6.28 times	4.68 times	34.24%	Ratio increased as the increase in Revenue, as compared to the
				increase in Trade receivables, is more.
Inventory Turnover	5.34 times	6.67 times	(19.87%)	Ratio decreased due to increase in holding period of Inventory.
Interest Coverage Ratio	4.35 times	13.31 times	(67.32%)	Due to increase in Interest Expense and decrease in EBIT, the
				ratio decreased.
Current Ratio	2.19: 1.00	2.78: 1.00	(21.31%)	Current Ratio has decreased due to increase in Current Liabilities
				as compared to Current Assets.
Debt Equity Ratio	0.33: 1.00	0.22: 1.00	51.60%	Ratio increased due to percentage increase in debt as compared
				to Shareholders Fund.
Operating Profit Margin (%)	8.85%	14.04%	(37.02%)	Due to decrease in Operating Profit and increase in revenue, the
				ratio decreased.
Net Profit Margin (%)	5.14%	9.34%	(44.98%)	Due to decrease in Consolidated Net Profit and increase in
				revenue, the ratio decreased.
Return on Net Worth	5.89%	13.36%	(55.93%)	Due to significant increase in Shareholders equity and decrease
				in Net Profit, the Ratio Decreased

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company believes in establishing and building a strong performance and competency driven culture amongst its employees with greater sense of accountability and responsibility. The Company has taken various steps for strengthening organizational competency through the involvement and development of employees as well as installing effective systems for improving their productivity and accountability at functional levels. The Company acknowledges that its principal asset is its employees. Ongoing in-house and external training is provided to the employees at all levels to update their knowledge and upgrade their skills and abilities. As on March 31, 2025, the Company had total 70 full time employees. The industrial relations have remained harmonious throughout the year.

CAUTIONARY NOTE

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the Companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.