Shreyans Industries Ltd Management Discussions

Your Company is a Public Limited Company established in the year 1979 and is engaged in the manufacturing of Writing and Printing Paper. The Company operates through two manufacturing units located at Ahmedgarh, District Malerkotla, Punjab and Village Banah, District SBS Nagar, Punjab, with a combined installed capacity of approximately 94,000 Metric Tonnes per annum.

India remains among the leading paper-producing countries globally, with the industry comprising wood-based, agro-based, and recycled fibre-based paper manufacturers. The Indian paper industry continues to play an important role in the countrys economic development and supports various sectors including education, publishing, packaging, FMCG, pharmaceuticals, and organized retail. Your Company operates in the agro-based paper segment and primarily utilizes agricultural residues namely wheat straw and other suitable agro-based fibres as raw materials for manufacturing quality writing and printing paper. The use of agricultural residues as a fibre source promotes sustainable paper manufacturing by reducing dependence on conventional raw materials and supporting environmentally responsible production practices.

The paper industry has witnessed structural changes in recent years, with packaging paper and paperboard segments continuing to experience strong growth driven by increasing demand from e-commerce, food and beverage, consumer goods, pharmaceutical, and retail sectors. Writing and printing paper demand remains stable, supported by educational activities, institutional requirements, and regular consumption patterns.

Indias paper consumption has considerable growth potential due to relatively lower per capita consumption compared with global averages. Increasing literacy levels, expansion of organized retail, economic growth, and growing preference for sustainable alternatives to plastic packaging are expected to support long-term demand for paper products. The Indian paper industry presents substantial opportunities arising from increasing demand for sustainable and recyclable materials. The Governments initiatives towards reducing plastic usage and promoting environmentally friendly packaging solutions are expected to create additional opportunities for the paper sector.

For agro-based paper manufacturers, enhanced utilization of agricultural residues provides a significant opportunity to contribute towards sustainable development. Agricultural waste, which is otherwise frequently disposed of through burning, can be effectively utilized as a valuable fibre resource for paper manufacturing, thereby supporting environmental conservation and promoting the principles of a circular economy.

The paper industry continues to face challenges relating to availability and cost of raw materials, fluctuations in energy costs, increasing regulatory requirements, environmental compliance obligations, and competition from domestic as well as international manufacturers.

Agro-based paper manufacturers are required to maintain consistent availability of agricultural residues at competitive prices while managing seasonal variations in procurement The availability of wheat straw is largely dependent on agricultural harvesting seasons, climatic conditions and cropping patterns etc. Seasonal fluctuations may impact the availability and pricing of raw materials, requiring effective procurement planning, storage management, and supply chain optimization to ensure consistent operations throughout the year.

Your Company continues to undertake initiatives aimed at improving productivity, reducing energy consumption, enhancing operational reliability, and optimizing manufacturing processes. Continuous efforts are made towards modernization of plant and machinery, automation, process improvements, and adoption of energy-efficient practices. Being an agro-based paper manufacturer, the Company remains committed to sustainable utilization of agricultural residues and responsible manufacturing. Efficient resource management, environmental protection, and compliance with applicable regulations continue to remain key priorities.

The long-term outlook for the Indian paper industry remains positive, supported by economic growth, increasing literacy, demand from institutional sectors, and the transition towards sustainable packaging solutions. The Company is well positioned to leverage its experience in agro-based paper manufacturing and continues to focus on strengthening operational efficiency, maintaining product quality, and creating sustainable value for its stakeholders.

The discussions in this section relate to the financial results pertaining to the year ended March 31,2026 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.

In accordance with the SEBI [Listing Obligations and Disclosure Requirements] [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:

Decrease in operational profit resulted in downfall in debt service coverage ratio and interest service coverage ratio. Decrease in profit after tax resulted in downfall in return on equity. Lower operational profit & investment gain resulted in decrease in net profit ratio, return on capital employed and return on investment.

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 1354 as on 31st March, 2026. The employee relations continue to be cordial and harmonious at all the locations of the Company.

The Company remained committed to its vision of contributing to the inclusive and sustainable development of society through meaningful Corporate Social Responsibility (CSR) initiatives. During the year, the Company continued to support education by providing free notebooks, educational material, and financial assistance to deserving students pursuing higher education. To promote sports and physical well-being among youth, sports kits were distributed to schools, sports clubs, and community organizations. The Company also extended financial support to the Eye Hospital and various NGOs for organising blood donation and medical camps towards its healthcare initiatives. In addition, the Company contributed to rural infrastructure development in nearby villages by supporting road repairs, park development, sewerage infrastructure, and installation of street lights, thereby enhancing civic amenities and improving the quality of life of the local community.

The paper industry has weathered all obstacles & turbulences, be it global or indigenous crisis during the last few years with maturity and firmness. The industry has been recovering well from local issues and global uncertainties arose due to conflicts between some countries from time to time.

Rapid urbanization, increase in disposable income, increase in literacy level, e-commerce trends and sustainable growth trends augur well for the Indian paper industry. After achieving fairly good performance during last few years with of course ups & downs associated with nature of paper industry, we hope that market dynamics will change/improve which will enable us registering fairly good performance in FY 2026-27. Implementation of National Education Policy (NEP) 2020 along with other measures by Indian Government in field of education & literacy should lend considerable boost to the demand for writing and printing paper.

The policy thrust by the Government of India & States for reducing/eliminating the use of single use plastic is going to support sustainable products such as paper. In recent years, India has become one of the large 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 good but not as big as the packaging segment. Thus domestic market opportunities are quite promising and healthy. The Government needs to remove anomalies in GST on paper and curb dumping of paper by certain countries under the cover of FTAs. The cost of manufacturing in India is quite competitive as compared to China which can help India gain and corner major chunk of global demand with the support of export oriented policies.

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.