Shreyans Inds. Management Discussions

Your Company, a Public Limited entity established in the year-1979 is engaged in the manufacturing of Writing and Printing Paper with present capacity of 94,000 MTs per annum. The manufacturing units are located at (i) Ahmedgarh, District Malerkotla, Punjab and (ii) Village Banah, District S.B.S. Nagar, Punjab.

India ranks as the 5th largest producer of paper in the world. However, the Indian Paper Industry accounts for a mere 5.3% of global paper demand. Paper industry in the country is highly fragmented with around 900mills across the country with capacity ranging from 10-15 MTs per day to 1000 MTs plus per day. Out of this, nearly 370 mills are closed. While total annual installed capacity is estimated at 29 Million Tons approximately but the operating capacity at present is estimated at 24 million tons per annum. Considering estimated capacity utilization at 89%, production of paper, paper board and newsprint is estimated at 21.70 million tons/year while consumption is estimated at 21.50 million tons/year. Exports at 2.50 Million tons/year almost match the imports. Based on the raw material used, Paper Mills are divided into three categories namely wood-based, agro-based and waste paper based [recycled fiber]. Your Company uses agro residues, viz. wheat straw, kangaroo grass, baggase as the primary raw material. In our country almost 75% of paper production comes from waste paper based mills while agro based mills contribute hardly 6% and balance is contributed by wood based mills.

The four key Paper and Board categories are: Newsprint, writing and printing papers, Paper Boards for packaging applications, Tissue Papers & other Specialty Papers. The global paper industry continues to grow at a compounded annual growth rate of 0.5% to 1.0% though largely due packaging segment. The industry has witnessed some decline in the writing & printing paper segment, a paradigm shift from the demand perspective due to rising impact of digitization. On the other hand, packaging paper segment is rising with growing demand for packaging from e-commerce, food and food products, FMCG and the pharmaceutical sector.

The Indian paper market is the fastest growing market largely on account of packaging segment. The domestic market for writing & printing is still growing although long term perspective for newsprint & cream wove is not that bright. Market share of these categories has come down from roughly 50% to 30% in the last decade. The paper consumption in India is likely grow @ 6 % annual and may reach around 30 million tons in the next 5years. This is likely to occur due to mainly emphasis on education and literacy coupled with growth in organized retail/e-commerce. The paper industry holds immense potential for growth in India as its per capita consumption is one of the lowest at 15 kgs as against worlds average of around 57kgs. Besides this, ban on single use plastic, being harmful from environmental aspect, is expected to gradually create more avenues for paper specially packaging sector.

Paper industry is facing challenges on technical front to bring out new products, innovate and transform for green manufacturing. In the coming years, sustainability shall be defined by capability to innovate, adapt and transform from time to time. Obligations towards Environment and society will immensely impact the operational viability.

Post Covid-19 pandemic, the Russia-Ukraine conflict derailed the world economies, causing uncertainty and inflationary conditions all around. Though GDP output in many countries rebounded after the waning of covid and International trade had picked up yet high commodity prices and rising interest rates continue to put pressure on the growth outlook.

The Paper industry has finally recovered post Covid and even weathered past the global impact of Russia-Ukraine war. With the initiatives of Indian Government like National Education policy (NEP) 2020, Samagra Shiksha Scheme, National Initiative for Proficiency in Reading with Understanding and Numeracy (NIPUN) Bharat Mission etc and higher budgetary allocation for education sector in Union Budget, it is expected that the demand for writing and printing paper will continue to increase.

One of the main challenge faced by domestic Paper industry is availability of raw materials in adequate quantity. India is a fiber deficient county whether it is wood, agricultural residue or recycles fiber/waste paper. Since the raw material is a major cost component of the production of paper, this lone component adversely affects the cost competitiveness of the Indian Industry as compared to others competing countries.

The paper industry is working in the direction of adopting innovative technologies which could enable it to increase the production with better efficiencies. With more emphasis on proper utilization of agro-residuals which are typically burnt, the availability of agricultural waste can be further improved for the paper industry. Innovations are taking place for proper utilization of agro-residuals, which shall instead be used in the paper industry, and will further supplement farmers income while also regulating pollution levels.


The discussions in this section relate to the financial results pertaining to the year ended March 31, 2023 prepared in accordance with the Indian Accounting Standards [referred to as Ind AS] prescribed under section 133 of the Companies Act, 2013, read with the Companies [Indian Accounting Standards] Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the financial statements.

The following table gives an overview of the financial results of the Company.

(Rs. in lakhs)

Year ended % of % Year ended % of
31 March 2023 Revenue Growth/(Fall) 31 March 2022 Revenue
Revenue from operations 86,553.04 100.00% 48.10% 58,443.34 100.00%
Earnings before interest, tax, depreciation and amortisation (before other income) 10,675.32 12.33% 965.20% 1,002.19 1.71%
Profit Before Tax (PBT) 9,372.54 10.83% 681.92% 1,198.66 2.05%
Profit after tax attributable to shareholders of the Company 7,280.42 8.41% 641.64% 981.66 1.68%
Earnings per share (in Rs.) 53.14 - 638.05% 7.20 -

Previous years figures have been regrouped for comparison with current years presentation where ever necessary.


In accordance with the SEBI [Listing Obligations and Disclosure Requirements 2018] [Amendment] Regulations, 2018, the Company is required to give details of significant changes [change of 25% or more as compared to the immediately previous financial year] in key financial ratios. The Company has identified the following ratios as key financial ratios:

Year ended Year ended
Unit % Change
31 March 2023 31 March 2022
Current Ratio times 1.84 1.29 42.32
Debt-equity Ratio " 0.14 0.27 46.53
Debt service coverage Ratio " 7.46 0.82 812.41
Inventory turnover Ratio " 11.92 9.88 20.68
Trade Receivable turnover Ratio " 25.11 20.03 25.37
Trade Payables Ratio : 10.01 7.81 28.14
Net Profit Ratio % 10.83 2.05 427.97
Return on Capital Employed % 28.73 6.11 370.21


The repayment of Non Current borrowings resulted in improvement in Debt Equity Ratio. The Current ratio improved due to increase in investments. Faster Recovery of Receivables improved Trade receivable turnover ratio. Trade Payable Ratio improved significantly during the year as the performance during the year was better. During the year, the situation improved Post Covid-19 and cash flows, turnover and earnings of the Company have improved as compared to the previous year resulting improvement in Debt Service coverage Ratio, Net Profit Ratio and Return on Capital employed.


The Company has well defined internal control system that corresponds to the size, scope and complexities of its activities. The

Company takes abundant care to design, review and monitor the working of its internal control system. Internal controls are also in

place to guarantee that all assets are safeguarded and protected against loss due to unauthorized use or disposition, and that

transactions are properly authorized, recorded, and reported. Internal Audit in the organization is an independent appraisal activity and

it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the

attention of the Audit Committee of the Board.


The human resources development function of the Company is guided by a strong set of values and policies. Your company strives to

provide the best work environment with ample opportunities to grow and explore. Your company maintains a work environment that is

free from undue stress and harassment. Company enjoys excellent relationship with its personnel and considers them as an essential

part of the organization.

Development and well-being of people working for the Company has been a corner stone of the management policy. This is reflected

through very low employees turnover at all levels including workers, staff, officers and managers. Company lays special emphasis on

staff training and retraining through internal workshops and also nominating staff/officers to various training programs. The total

number of permanent employees in the Company is 1355 as on 31st March, 2023. The employee relations continue to be cordial and

harmonious at all the locations of the Company.


The discussion under this section mentions and specifies the CSR policies of the company. Through the year 2022-2023, the company

took the following initiatives to make positive contributions in the society:

1) Promoting education and literacy by bearing the education expenses of girl students, offering free of cost skill training such as

computers, stitching etc. to women, setting up a library and science lab at Guru Jagtar Singh Model High School and distributing

over 12000 notebooks to needy students in surrounding schools.

2) Providing better medical care and aid to the needy patients at DMCH Ludhiana, providing latest ophthalmic instruments to the local

eye hospital, by organizing medical camps for blood donation and eye care


Soon after the Covid-19 showed signs of waning, the market for writing & printing paper started opening up & demand started

improving. It sprung up with full force and enthusiasm during the year. The industry recovered well from economic downturn and

uncertainty caused firstly by covid pandemic and then by Russia-Ukraine war.

There are some positive developments for the paper industry in India. There are some mega trends influencing the paper industry such

as rapid urbanization, increase in disposable income and sustainable trends. After recording sterling performance during the year

2022-23, we are expecting repeat performance of the industry in FY 2023-24 too. Implementation of National Education Policy (NEP)

2020 and Samagra Shiksha Scheme along with other measures by Indian Government in field of education should also significantly

contribute to the demand for writing and printing paper thereby giving boost to expectations of rewarding years ahead.

Attempts by the Government to aggressively push substitute to single use plastic is going to support sustainable products such as

paper. In recent years, India has become one of the largest consumers of paper and paper board products though per capita

consumption in India is much lower than worlds average. Although packaging is leading the growth story yet writing & printing paper is

also proliferating due to increasing business activity and development of education sectors. The market size for writing & printing

paper is quite good but not as big as the packaging segment. Thus domestic market opportunities are quite promising and healthy.

Further cost of manufacturing in India is quite competitive as compared to China and thus India may gain and corner major chunk of

global demand.


Statements in this report on Management discussion and analysis relating to the Companys objectives, estimates, expectations or

predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are

based upon certain assumptions and expectations of future events. Actual results could however 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, selling prices, raw material costs and availability, changes in government regulations and tax structure,

general economic developments in India and abroad, factors such as litigation, industrial relations and other unforeseen events.

The Company assumes no responsibility in respect of forward looking statements made herein which may undergo changes in future

on the basis of subsequent developments, information or events. Market data and product information contained in this report is

gathered from published and unpublished reports and their accuracy cannot be assured.