Shree Rama Newsprint Ltd Management Discussions

A] INDUSTRY STRUCTURE AND DEVELOPMENTS

The demand for packaged drinking water has grown into one of the most resilient consumer markets in existence. The Indian bottled market was valued at USD 10.71 Billion in 2025 and is projected to reach USD 29.70 Billion by 2034, growing at a CAGR of 12.00% during 2026-2034. Bottled water market is a symbol of a new lifestyle and health-consciousness rising in India. While a substantial portion of the population struggles to get safe drinking water, a new generation, particularly in metropolitan areas, is becoming accustomed to paying high costs for bottled water. Over the last five years, the bottle water market has grown by 40-45 percent. Higher disposable income, increasing taste for hygiene, improved price, easier availability of packaged drinking water, and a lack of safe drinking water are driving demand for bottled water. While India is among the top ten bottled water users in the world, its per capita bottled water consumption is estimated to be five litres per year, which is far lower than the global average of 24 litres. Bottled water is becoming one of Indias fastest growing industries.

In India, packaged drinking water bottles are sold in four main types of Stock Keeping Units (SKUs) - one-liter bottles, two-liter bottles, 500 ML bottles, 200 ML bottles, pouches, and barrels of 15-20 liters. Among the different SKUs, one-liter bottles have acquired the largest market share of 42% in 2024, followed by 500 milliliter bottles and 250 milliliter bottles.

The packaged bottled drinking water has become popular in India. Different kinds of flavored water containing fruit essence and artificial sweeteners like soda, cola, juice, and other sweetened beverages often act as a substitute to plain bottled water. At times consumers prefer flavored bottled water to normal bottled water. This shift is developing an opportunity to expand the product line of bottled water manufacturers in India.

B] OPPORTUNITIES & THREATS

Opportunities: -

• Increasing market trends

• Direct-To-Consumer

• Increasing health awareness

• Government Policies

• Low production cost

• Tourism, Hospitality, and Out-of-Home Consumption Growth

Threats:

• Duplication

• Unorganized Industry

• Quality inconsistencies in unregulated brands

• Environmental concerns over plastic usage.

C] SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The company has discontinued the production in its paper division. Hence there is only one operating segment i.e. Packaged drinking water segment. The production and performance of said segment is mentioned in Boards Report.

D] OUTLOOK

The organized sector for packaged water bottles is increasing with a CAGR of approx. 25 %. The market players in India have recently inclined towards institutional sales through partnership with airlines, movie theatres, and hotels. Such partnerships are eventually increasing the penetration of the product in the market, followed by rise in the overall sales volume in India

E] RISK & CONCERNS

Nearly 67% of the population resides in rural areas. However, the rate of penetration of bottled water is significantly low in these regions. This, as a result, hinders the growth of the market in India.

F] INTERNAL CONTYROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements.

G] DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE AND KEY FINANCIAL RATIO:

This has been dealt with in the Directors Report and key financial ratio are disclosed in note 37 to financial statements.

H] MATERIAL DEVELOPMENT IN HUMAN RESOURCES /INDUSTRIAL RELATIONS FRONT INCLUDING NO OF PEOPLE EMPLOYED

The Company recognizes human capital as strategic resource and believes empowerment of employees across the organization in order to achieve organizational effectiveness. There have been no material developments/ significant changes in Human Resource during the year under review. The Company employs 42 people as on 31.03.2026 as against 42 people employed as on 31.03.2025.

I] 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 THEREFORE, INCLUDING:

Ratios	Current Period	Previous Period	% Variance	Reason for variance
Current Ratio	0.17	0.29	-41.21%	The Current Ratio decreased from 0.29 to 0.17 main- ly due to the provision for dividend of Rs. 35 crore on Non-Convertible Redeemable Preference Shares (NCRPS), resulting in a corresponding increase in current liabilities.
Debt-equity ratio	(4.55)	(25.59)	-82.20%	The Company continues to have a negative net worth. The Debt-Equity Ratio has changed from (25.59) to (4.55) primarily due to changes in total borrowings and shareholders equity. The negative shareholders equity is mainly attributable to contin- ued losses from the discontinued business and the recognition of interest provision on Non-Convertible
				Redeemable Preference Shares (NCRPS)
Debt service coverage ratio	0.15	0.24	-35.88%	The Debt Service Coverage Ratio decreased from 0.24 to 0.15 primarily due to lower earnings available for debt servicing, resulting from reduced revenue from the continuing business during the current year. The ratio has been computed considering Profit after Tax from continuing operations only.
Inventory turnover ratio	6.46	9.37	-31.04	The Inventory Turnover Ratio and Trade Receivable
Trade receivables turnover ratio	6.14	10.13	-39.38%	Turnover ratio decreased primarily due to a decline in revenue from continuing operations on account of adverse market conditions, resulting in lower in- ventory turnover and lower collection during the current year
Net capital turnover ratio	-0.35	-0.97	-63.49%	The Net Capital Turnover Ratio changed primarily due to a reduction in net working capital resulting from an increase in current liabilities, mainly on ac- count of the provision for interest on Non-Convert- ible Redeemable Preference Shares (NCRPS).

Management Discussion and Analysis Report

Ratios	Current Period	Previous Period	% Variance	Reason for variance
Trade payable turnover ratio	2.29	4.27	-46.44%	The Trade Payables Turnover Ratio decreased pri- marily due to an increase in the average trade pay- ables balance during the current year, resulting in a lower turnover ratio.
Net profit ratio	-103.76	-64.84	-60.03%	The Net Pro_t Ratio declined from (64.84%) to (103.76%) primarily due to lower revenue from con- tinuing operations and adverse market conditions, which resulted in higher net losses during the cur- rent year.
Return on capital employed	1.01	2.17%	-53.47%
Return on investment	0.81	2.01%	-59.79%	The Return on Investment (ROI) and Return on In- vestment decreased primarily due to lower EBIT from continuing operations resulting from a decline in revenue from the continuing business during the current year.

J) DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Ratio	Current Period	Previous Period	% Variance	Reason for variance
Return on Networth	-83 %	-754 %	89%	The return on networth improved as com- pared to previous year primarily due to lower impairment position on fixed assets as compared to F.Y. 2024-25 resulting in a lower loss during current year.

K) CAUTIONARY STATEMENT

The statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic demand supply conditions, finished goods prices, raw material cost and availability, changes in Government regulations, tax regimes, economic developments within India and other factors such as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

	On behalf of Board of Directors
	For Shree Rama Newsprint Limited
Date: August 13, 2026	Siddharth G. Chowdhary	Meenu Singhvi
Place: Ahmedabad	Whole-time Director	Director
	DIN: 01798350	DIN: 08273316