Shreenath Paper Products Ltd Management Discussions

1. 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 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 L21098MH2011 PLC222833.

2. INDUSTRY STRUCTURE:

The global paper industry is undergoing a significant 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 continues to decline due to digitalization, the industry is witnessing robust growth in paperboard packaging, tissue products, and specialty papers.

In particular, the shift away from single-use plastics has opened up 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 substantial rise in 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 are 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 ban on single-use plastics, increasing emphasis on hygiene and sanitation, and rising demand from sectors such as pharmaceuticals, retail, and e-commerce are contributing to the sectors sustained growth. With per capita paper consumption significantly below the global average, there remains ample headroom for long-term expansion.

The industry is expected to continue consolidating around packaging and hygiene segments, while investing in renewable raw materials, energy efficiency, and sustainable forestry. Companies that focus on innovation, operational efficiency, and circular practices will be best positioned to capitalize on the evolving market landscape.

3. OPPORTUNITIES AND THREATS:

Strength:

• 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, distribution network, etc are key factors in client decisions among competitors, however, price is the deciding factor in most cases. We face fair competition from both organized and unorganized players in the market. We believe that our experience in this business and quality assurance will be key to overcome competition posed by such organized and unorganized players. Although, a competitive market, there are not enough number of competitors offering services similar to us. We believe that we are able to compete effectively in the market with our quality of services and our reputation. We believe that the principal factors affecting competition in our business include client relationships, reputation, and the relative quality and price of the services.

4. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

Our Company is engaged in the business of importer, exporter, stockiest, agents, brokers, retailers of all kind of paper including writing, printing, rapping and tissues, newsprint paper for packaging including corrugated and craft papers, synthetic papers, all kinds of boards including paper and straw board and all kind of pulp whether chemical and mechanical including dissolving paper pulp used in paper industry

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

		2024-25
Group-wise	Unit	Quantity	Value	Share %
Coated Paper	KG	1159228.88	9,34,26,865.70
	MTR	498700.00		9.1 1%
	PKT	226.00		0.00%
Coating Base Paper	KG	545974.99	3,89,55,236.82	3.80%
Food Grade Paper	KG	1714476.61	13,81,45,048.76	1 3.47%
Machine Glazed Paper	KG	1624935.50	9,86,40,210.79	9.62%
Others	KG	1210967.21	10,77,70,992.26	10.51%
	MTR	1222970.00
	NO	1000.00
	REAM	12.00
	ROLL	243.00
	SQ.	252.54
	MT.
	PKT	3880.00
	NOS	1 30.00
Pressure Sensitive Adhesive Sheet	SQ.	1048992.24	3,15,83,580.45	3.08%
	MT.
	PKT	30900.00		0.00%
Sublimation Paper	MTR	19127982.00	9,91,77,573.45	9.67%
UnCoated Paper (Hi-Bright)	KG	3387680.96	24,64,92,151.97	24.03%
UnCoated Paper (High-Stength)	KG	64845.00	46,52,442.00	0.45%
UnCoated Paper (Low-Bright)	KG	2654846.26	16,69,67,051.59	16.28%
Grand Total			1,02,58,11,153.79	100.00%

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

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

6. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share Capital: During the year under review, the Company has increased Paid-up Share capital of Company as per details mentioned below:

Sr. No.	Date of Allotment	Nature of allotment	No. of Equity Shares allotted	Cumulative No. of H Equity HB Shares HRn
1.	March 5, 2025	IPO allotment	53,10,000	1,96,54,200

 

	FY 2024-25	FY 2023-24
Revenue from Operations	10258.21	18584.83
Other Income	349.90	382.00
Total Income	10608.11	18966.82
Direct & other related expenses	9526.06	17,572.92
Employee Benefit Expenses	149.40	154.67
Financial Cost	327.35	334.75
Depreciation and amortisation expenses	28.40	36.14

 

Particulars	FY 2024-25	FY 2023-24
Other Expenses	173.94	273.73
CSR expenses	10.60	6.00
Total Expenses	10215.75	18378.21
Profit/(Loss) before Tax	392.36	588.62
Less: Exceptional items	-	-
Profit/(Loss) before Tax	392.36	588.62
Total Tax Expenses	103.49	150.5
Profit/(Loss) aftertax	288.87	438.11
Other Comprehensive income for the financial year	-	-
Total Comprehensive income/(loss) for the financial year	-	-
Earnings per Equity Share (?) - Face value of 10/- each	1.96	3.06

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

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable asset of your Company. The Company recognizes people as its most valuable asset and the Company has kept a sharp focus on Employee Engagement. The Companys Human Resources is commensurate with the size, nature, and operations of the Company.

8. DETAILS OF KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Description	As at March 31,2025	As at March 31,2024	Variance	Remark
Current Ratio	2.19	1.45	51%	The company has raised funds from IPO during the year. This has led to an increase in Current Assets and consequently, an increase in Current ratio.
Interest covering Ratio	2.20	2.76	-20%	The turnover of the company has decreased during the year which has impacted the profits and consequently the Interest service ratio.
Operating Profit Ratio	7.05	5.06	39%	Though the sales had decreased, the company used its resources effectively which helped to increase the Operating profit ratio.
Debt-Equity Ratio	0.68	1.53	-56%	Since the company raised funds from IPO at the fag end of the year and reduced its liabilities, there was an improvement in the DE ratio.
Return on Equity Ratio	0.06	0.23	-72%	As the turnover of the company had decreased impacting its profitability, there was a decrease in the Return on Equity ratio.

 

Description	As at March 31,2025	As at March 31,2024	Variance	Remark
Inventory Turnover Ratio	33.92	10.60	220%	As the overall industry was not performing well, the company sales had declined leading to an increased inventory in the hands of the company.
Trade Receivables Turnover Ratio	152.97	82.74	85%	As stated above, since the overall industry was underperforming, the company had to allowed increased credit periods to its customers which consequently increased the Trade Receivables ratio.
Net Profit Ratio	0.03	0.02	18%	Though the sales had decreased, the company used its resources effectively which helped to increase the Net profit ratio.
Return on Capital employed	0.04	0.09	-58%	As there was a sudden increase in the equity at the end of the year, it has led to a decline in the Return on Capital Employed. However, the entire capital was not employed throughout the year. The entire IPO funds were not infused in the business and were lying in the escrow account which has led to a lower return on capital employed.

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

The Return on Net Worth for F.Y. 2024-25 was 6% and for F.Y. 2023-24 was 23%. The return has decreased owing to following reasons:

1. The Networth has increased to Rs. 44.62 Crores in FY24-25 from Rs. 18.93 Crores in FY23-24 owing to Share Premium collected during IPO.

2. At the same time, the PAT has decreased to Rs. 2.89 Crores in FY24-25 from Rs. 4.38 Crores in FY23- 24 owing to a slow down in the industry.

10. FORWARD-LOOKING STATEMENT:

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic, and natural calamities over which we do not have any direct/indirect control.

For and on behalf of the Board

Shreenath Paper Products Limited

Sd/-

Alok Navneetdas Parekh

Managing Director

DIN:03467607

Place: Ch. Sambhajinagar

Date: May 30,2025