Shreenath Paper Products Ltd Management Discussions

Management Discussion & Analysis Report

INTRODUCTION:

Our company was originally incorporated as a Private Limited Company under the name "Shreenath Paper Products Private Limited" under the provisions of the Companies Act, 1956 vide Certificate of Incorporation issued by the Assistant Registrar of Companies, Mumbai, Maharashtra on October 10, 2011. Subsequently, our Company was converted to a Public Limited Company and the name of our Company was changed to "Shreenath Paper Products Limited" vide Special Resolution passed by the Shareholders at the Extra-Ordinary General Meeting of our Company held on March 21, 2023. The fresh Certificate of Incorporation consequent to conversion was issued on April 20, 2023, by the Registrar of Companies, Mumbai, Maharashtra. The Corporate Identification Number of our Company is L21098MH2011PLC22833.

INDUSTRY STRUCTURE:

The global paper industry continues to undergo a structural transformation, driven by sustainability imperatives, digital disruption, evolving consumer behavior, and rapid growth in packaging and hygiene segments. While the demand for traditional printing and writing paper faces pressure due to ongoing digitalization, the industry is witnessing sustained demand in paperboard packaging, tissue products, and specialty papers.

In particular, the global and domestic shift away from single-use plastics continues to open new avenues for biodegradable, fiber-based alternatives. Regulatory measures and increasing environmental awareness are further accelerating the adoption of sustainable packaging solutions. Additionally, the expansion of e-commerce, food delivery, and fast-moving consumer goods (FMCG) sectors has led to a steady demand for corrugated and kraft packaging paper.

Emerging technologies such as nano-cellulose fibers, smart packaging, and advancements in recycling processes are contributing to the industrys evolution toward a more circular and low-emission value chain. Developed markets remain focused on innovation and circularity, while developing economies, including India, present strong growth potential due to low per capita paper consumption and increasing urbanization.

In India, the outlook remains highly promising. The governments regulation on single-use plastics, increasing emphasis on hygiene and sanitation, and rising demand from sectors such as pharmaceuticals, retail, and e-commerce contribute to the sectors long-term growth. With per capita paper consumption remaining below the global average, there remains ample headroom for expansion.

OPPORTUNITIES AND THREATS:

Strengths:

Experience of our Promoters and senior management team Customer Satisfaction Repetitive Customers

Opportunities:

Vast Industrial Presence in both Public and Private Sectors

Huge demand for Domestic services

Threats:

We operate in a competitive atmosphere. Some of our competitors may have greater resources than those available to us. While product quality, brand value, and distribution networks are key factors in client decisions, price often acts as a critical deciding factor. We face competition from both organized and unorganized players in the market. We believe that our experience in this business and quality assurance are key to overcoming competition.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

Our Company is engaged in the business of importer, exporter, stockist, agent, broker, and retailer of all kinds of paper including writing, printing, wrapping, tissues, newsprint paper for packaging (including corrugated and kraft papers), synthetic papers, all kinds of boards, and all kinds of pulp.

Our client domain mainly includes notebook manufacturers, paper converters, retailers, offset printers, and allied industries where printing paper is used as raw material or consumable.

Product Sales Breakdown (FY 2025-26):

Group-wise Category	Revenue (Rs. in Lakhs)	Share (%)
Sublimation Paper	4,647.31	40.53%
Coated Paper	2,377.70	20.74%
UnCoated Paper (Hi-Bright)	1,912.99	16.68%
UnCoated Paper (Low-Bright)	428.45	3.74%
Food Grade Paper	370.94	3.24%
UnCoated Paper (High-Strength)	206.96	1.80%
Coating Base Paper	123.40	1.08%
Pressure Sensitive Adhesive Sheet	107.23	0.94%
Others	1,402.29	12.23%
Total Revenue from Operations	11,466.22	100.00%

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an effective and reliable internal control system commensurate with the size of its operations. It adheres to local statutory requirements for the orderly and efficient conduct of business, safeguarding of assets, detection and prevention of frauds and errors, adequacy and completeness of accounting records, and timely preparation of reliable financial information. The efficacy of internal checks and control systems is validated through self-audits, internal audits, and statutory audits.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share Capital:

During the financial year under review, the paid-up equity share capital of the Company stood at Rs.1,965.42 Lakhs (comprising 1,96,54,200 equity shares of Rs.10 each).

Financial Highlights (Rs.in Lakhs):

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	11,466.22	10,258.21
Other Income	690.61	349.90
Total Income	12,156.83	10,608.11
Total Expenses	11,772.26	10,215.75
Profit Before Tax (PBT)	384.57	392.36
Less: Tax Expenses	99.03	103.49
Profit After Tax (PAT)	285.54	288.87

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

Your Company continues to follow its policy of building strong teams of professional talent. People remain our most valuable asset, and the Company maintains a continuous focus on employee engagement, retention, and capability building. The strength of the Human Resources team remains commensurate with the size, nature, and scale of operations.

DETAILS OF KEY FINANCIAL RATIOS:

Description	As at March 31, 2026	As at March 31, 2025	Variance (%)	Remarks / Explanation
Current Ratio	2.30	2.19	+5.02%	Maintained strong working capital positions.
Debt-Equity Ratio	0.60	0.68	-11.76%	De-leveraging and debt repayment during the year.
Inventory Turnover Ratio	10.97	33.92	-67.66%	Inventory management aligned with sales cycle.
Trade Payables Turnover Ratio	19.83	12.63	+57.01%	Improved liquidity enabling timely supplier payments.

 

Description	As at March 31, 2026	As at March 31, 2025	Variance (%)	Remarks / Explanation
Turnover Ratio				enabling timely supplier payments.
Net Profit Margin Ratio	2.49%	2.82%	-11.70%	Margin pressures owing to competitive paper imports.
Return on Equity (ROE)	6.35%	6.47%	-2.62%	Impacted by market pricing pressure and larger equity base post-IPO.
Return on Capital Employed (ROCE)	9.11%	9.61%	-5.25%	Efficient utilization of deployed funds post IPO capital deployment.

DETAILS OF CHANGE IN RETURN ON NET WORTH:

The Return on Net Worth (ROE) for F.Y. 2025-26 stands at 6.35% compared to 6.47% (or 6.00% base) in F.Y. 2024-25.

The shift is primarily attributable to market pricing pressure from low-cost paper imports alongside the full-year effect of the expanded equity capital base.

FORWARD-LOOKING STATEMENT:

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, and estimates may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied. Key factors that could cause variations include economic and market conditions affecting demand and supply, raw material pricing, statutory regulations, tax regimes, and unexpected geopolitical or natural events.

Alok Navneetdas Parekh

Managing Director

DIN: 03467607

Place: Ch. Sambhajinagar

Date: May 30, 2026