Stanpacks (India) Ltd Management Discussions

ECONOMIC OVERVIEW

Global Outlook.

The global economy has been resilient in 2024, but some signs of weakness are appearing against a backdrop of slower growth, lingering inflation and an uncertain policy environment. Inflation is projected to be higher than previously expected, although still moderating as economic growth softens. Services price inflation is still elevated amidst tight labour markets, and goods price inflation has begun picking up in some countries, although from low levels. Annual headline inflation in G20 economies is projected at 3.8% in 2025 and 3.2% in 2026. These projections have been revised upwards by 0.3 percentage points compared to our Economic Outlook in December.

The global economy has shown some real resilience, with growth remaining steady and inflation moving downwards. However, some signs of weakness have emerged, driven by heightened policy uncertainty

The Outlook also draws attention to the risk of macroeconomic volatility. An unexpected downturn, policy change or deviation from the projected disinflation path could trigger market corrections, significant capital outflows, and exchange rate fluctuations, particularly in emerging markets. High public debt levels and elevated asset valuations further heighten these risks.

Given these challenges, the Outlook highlights key policy priorities. Central banks should remain vigilant given heightened uncertainty and the potential for higher trade costs to push up price pressures. Provided inflation expectations remain well anchored, and trade tensions do not intensify further, policy rate reductions should continue in economies in which underlying inflation is projected to moderate and aggregate demand growth is subdued.

Decisive fiscal actions are needed to ensure debt sustainability, preserve room for reacting to future shocks and generate resources to meet large impending spending pressures. Stronger efforts are needed to reallocate spending towards activities that support longer-term growth, set within credible medium-term adjustment paths tailored to country-specific circumstances.

With potential output generally weakening across both advanced and emerging economies since the global financial crisis, ambitious structural reforms are needed. Governments must enact reforms to improve productivity and enhance the adoption of new technologies by boosting market competition and eliminating excessive regulatory burdens on firms.

Enhancing education and skills development and reducing constraints in labour and product markets that impede investment and labour mobility will be key. Artificial Intelligence (AI) presents a unique opportunity to revive productivity.

Global economic outlook: Six themes for 2025

The global economic environment is poised for significant shifts in 2025, driven by evolving market dynamics, geopolitical realignments and structural transformations across industries. Below, we explore six key macroeconomic themes that will shape the year ahead, with a focus on their implications for major economies around the world.

1. US economic exceptionalism: a global growth leader and disruptor

The US economy will remain the global growth leader in 2025 driven by solid income growth, pro-cyclical productivity growth, accommodating fiscal policy and easing monetary policy. he US will also be a major global growth disruptor with regulatory, immigration, trade and tax policy changes representing opportunities and risks worldwide. The composition, timing and magnitude of policy shifts are still uncertain, but likely to have a consequential influence on economic and inflation dynamics in 2025 and beyond.

2. Trade and geopolitics: Derisking in a fragmented universe

Governments will continue to blend national security priorities with strategic competitiveness goals using industrial policy and trade protectionism to support their objectives. The fragmentation of global trade, exacerbated by tensions between the US and mainland China, and the rise of geoeconomic blocs will continue to redefine supply chain dynamics.

3. Price volatility: easing inflation pressures but supply fragilities

Inflation will only gradually converge toward central bank targets across regions, with upside risks stemming from structural supply fragilities, geopolitical tensions and volatile commodity prices. Emerging markets will grapple with the challenge of curbing inflation while contending with fragile supply chains, volatile commodity prices and foreign exchange fluctuations. Several Asian emerging economies, including India and Indonesia, are better positioned to maintain price stability due to proactive fiscal measures and monetary prudence. The combination of a diversified supply base that mitigates reliance on external inputs and importing deflation from China should further support disinflation.

4. Monetary policy: reasons to recalibrate, but recalibrate with caution

Generally, easing inflation should continue to favour monetary policy recalibration in the near term. But while central banks will find plenty of reasons to pursue their policy easing cycle, they will almost certainly recalibrate with caution given the risks from inflation volatility tied to trade, wages, energy and food cost pressures. As a result, global monetary policy will be desynchronized as central bankers respond to divergent domestic and international conditions and may even be forced to tighten policy amid resurgent inflationary and exchange rate pressures.

5. Labor in flux: talent scarcity, productivity and AI

The future of global labor markets will be shaped by the intricate interplay of economic pressures, demographic shifts and rapid technological advancements. Policymakers and business leaders will need to counter these challenges by fostering stronger workforce participation and accelerating investments in automation and AI to offset demographic pressures. Business leaders, facing rising costs of talent post-pandemic, are likely to focus on preserving their talent but drive productivity enhancements and constrain wage growth to contain labor costs.

6. Fiscal policy: a delicate balancing act

Fiscal policy in 2025 is set against a backdrop of high public debt, elevated interest rates and competing political and economic priorities. Global public debt is forecast to remain at 91% of GDP, creating an environment where governments face rising borrowing costs and reduced fiscal flexibility. The high-interest rate environment compounds the challenge, as debt servicing increasingly absorbs resources that could otherwise support growth-oriented investments.

INDIA

In recent news, India has overtaken Japan to become the fourth-largest economy in the world. "We are the fourth-largest economy. We are a USD 4 trillion economy, as per IMF data. India today is larger than Japan. India is now anticipated to surpass Germany to become the third-largest economy in the next 2.5 to 3 years, according to NITI Aayog CEO B.VR. Subrahmanyam.

It has seen its economic growth forecast revised down from 6.5% to 6.2% for 2025 and from 6.3% to 6.2% for 2026, as reported in the April 2025 edition of the IMFs World Economic Outlook. For India, the growth outlook is relatively more stable at 6.2% in 2025, supported by private consumption, particularly in rural areas.

Presently positioned as the fourth-largest economy globally, on par with Japan, the IMF forecasts India to be the fastest-growing major economy over the next two years, maintaining a significant advantage over both global and regional competitors despite the adjustment in growth projections.

The Ministry of Finance reports that the IMFs April 2025 World Economic Outlook (WEO) indicates a slight downward revision in the 2025 forecast compared to the January 2025 update, reflecting global trade tensions and uncertainty. However, the overall outlook remains strong, indicating the countrys economic resilience and continued role as a key driver of global growth.

Key Highlights:

1. Stable Global Outlook: Global growth forecasts remain steady at 3.2%-3.3% for 2024-2025. Inflation and interest rates are generally on a downward trend, with a recent cut in US Fed interest rates by 0.5%.

2. Indias Growth Trajectory: India is projected to grow at 7%-7.2% in FY 2025. The first quarter of FY2025 saw a 6.7% GDP growth year-on-year, slightly lower due to reduced government capital expenditure but still reflecting strong long-term growth drivers.

3. Consumption and Investment:

• Consumption: Private Final Consumption Expenditure (PFCE) grew by 7.4% in Q1 FY 2025, with improved rural and urban demand driven by strong consumption patterns.

• Investment: Gross Fixed Capital Formation grew by 7.5%, showing robust investment despite a reduction in central government capital spending. The construction sector saw notable growth at 10.5%.

4. Manufacturing Sector Performance: Manufacturing continues to grow well with a 7% growth in Q1 FY2025, supported by a strong government push.

5. Macro-Economic Stability: Inflation has come down to 3.65%. The exchange rates and interest rates have been relatively stable. The fiscal deficit has significantly reduced from INR 6.1 lakh crores in April-July 2023 to INR 2.8 lakh crores in the same period for 2024. This reduction is driven by higher personal income tax revenues and controlled government expenditure.

6. Strong fund-raising environment: Stock markets are at record highs, and fund raising activities has surged. Mutual fund SIP contributions have doubled from June 2023 to June 2024, reflecting strong domestic investor confidence. FPI debt inflows remain positive, bolstered by the inclusion of Indian government bonds in key indices. Bank credit has grown 15%.

7. Continued growth in service exports: Service exports have slightly surpassed non-oil merchandise exports, indicating a shift in export dynamics. This, along with improved net exports and strong remittances, contributes to economic resilience. Implementation of reforms, including enhancing ease of doing business, advancing energy transitions, and boosting manufacturing competitiveness, would support long-term economic expansion.

SWOT ANALYSIS

All major industries create wealth but if there is one industry that plays a unique role by way of both creation of wealth through a wide range of manufacturing activities and also by way of preserving the wealth or value created by other industries, it is packaging.

• Market trends and Opportunities

In the industrial packaging market there is a noticeable trend towards embracing sustainable and eco-friendly solutions. A significant number of companies have already begun adopting environmentally friendly practices by utilising recycled materials and products with lower emissions. This shift can be attributed to the growing awareness and concerns surrounding the environmental effects associated with conventional packaging materials like plastic and metal. Consequently, there is now an increased demand, for packaging alternatives thatre biodegradable and compostable.

Besides sustainability, technological advancements have also had an impact on the industrial packaging sector. For instance, the adoption of automation in packaging operations has enhanced efficiency while reducing expenses.

Moreover, the integration of technology like sensors and RFID tags has greatly improved supply chain management and product tracking. Manufacturers and distributors who incorporate RFID technology into their supply chains witness an 80% enhancement, in shipping and picking accuracy.

• Challenges &Threats

One of the hurdles in industrial packaging is the issue of cost. As businesses aim to reduce expenses and enhance efficiency they frequently search for methods to decrease their packaging expenditures. However, this approach can potentially jeopardise the protection of products. Raise the likelihood of damage, during transportation and storage. Designing packaging that fulfils both aesthetic needs poses another challenge. On one hand, the package must be durable and offer protection. On the other hand, it should also be visually attractive and represent the brand effectively. Achieving this balance can prove to be a time-consuming task. Regulations also pose a challenge in the field of industrial packaging. Each country has its set of regulations pertaining to packaging materials labelling obligations and environmental impact. Companies must navigate these regulations to ensure compliance while also striving to achieve their business objectives.

Future of industrial packaging

It is evident that technology will continue to have a significant impact on shaping the future of industrial packaging. We can anticipate advancements such as packaging that can monitor product conditions during transportation and the utilisation of 3D printing for personalised packaging solutions. The possibilities are truly limitless.

Another aspect we can expect to witness in the coming years is a focus on sustainability. With consumers prioritising environmental consciousness companies will need to adapt their packaging practices accordingly. This may involve incorporating materials or implementing recycling programs aimed at reducing waste.

Financial Performance :

Particulars	31.03.2025	31.03.2024
Revenue from Operations	2,921.72	2738.14
Total Income	2,939.08	2742.05
Profit before Tax	21.34	(27.12)
Profit After Tax	11.58	26.74
Earnings per share	0.19	0.44

• Key Financial Ratios

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 sector-specific financial ratios.

Particulars	Numerator	Denominator	31st March 2025	31st March 2024	Vari ance	Reason for variance
Current Ratio (in times)	Current assets	Current liabilities	1.40	1.46	-4%
Debt-Equity Ratio (in times)	Total Debt	Equity and other equity	1.10	1.28	-14%
Debt Service Coverage ratio (in times)	Earning for Debt Service = Net Profit after taxes + Non-cash operating expenses + Interest + Other non-cash adjustments	Debt service = Interest and lease payments + Principal repayments	0.99	1.42	-30%	The variance is due to decrease in Earning for Debt service during the year.
Return on Equity	Net Profits after taxes	Average Shareholders Equity	0.02	0.04	-58%	The variance is due to decrease in Net profit during the year .
Inventory turnover ratio	Cost of goods sold	Average Inventory	2.32	1.80	29%
Trade recevi- ables turover ratio (in times)	Net credit sales	Average Trade Receivable	8.74	7.16	22%
Trade payables turnover ratio (in times)	Net credit purchases	Average Trade Payables	3,317.59	26.00	12660%	The variance is due to significant decrease in Trade payables during the year.
Net capital turnover ratio (in times)	Net sales	Working Capital (Current assets- Current liabilities)	9.12	6.90	32%	The variance is due to decrease in Working Capital during the year.
Net Profit Ratio	Net Profit	Net Sales	0.40%	1.00%	-60%	The variance is due to decrease in Net Profit after Tax during the year.
Return on capital employed	Earning before interest and taxes	Capital Employed (Tangible net- worth + Total debt + Deferred tax liability	0.07	0.05	38%	The variance is due to increase in EBIT during the year
Return on Investment	Income generated from investments	Time weighted average investments			0%

• Internal Control System

The Company believes in constant improvement and strives for better system and control at every stage. The Company has adopted various control and monitoring mechanisms, which are audited by an independent Internal Auditor. The Company has a proper and adequate system of internal control to ensure that all the assets are safeguarded and protected against loss from unauthorized use or disposition, and those transactions are authorized, recorded and reported correctly.

The internal control is designed to ensure that financial and other records are reliable for preparing financial information and other data, and for maintaining accountability of assets. InternalAudit is conducted by M/s. M.R. Ravichandran & Co, Chartered Accountants, Chennai, and their report is placed before the Audit Committee.

The Audit Committee also evaluates the adequacy and effectiveness of the internal control systems and monitors the action taken pursuant to audit observations. All the shortcomings in the regular activities are brought to the notice of the Committee and the Board based on which corrective actions are taken.

• Human Resources

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. During the period under review, there were no complaints received by the ICC.

The performance of the Company is critically dependent on the knowledge and skills of its people, their alignment and ownership of the organizational and functional objectives, an enabling operating environment and the motivation and enthusiasm that comes with employees taking ownership of their responsibilities and tasks. The industrial relations scenario remained harmonious throughout the year. Your Company has designated and implemented a large number of initiatives to build and improve knowledge base and competencies of employees at all levels.

• Outlook

Your Company decided to automate few processes of production during the year in order to tackle the deficiency in available workers. This automation was done not to reduce the number of workers but to improve the production capacity, quality of bags that were produced and it also helped in the reduction of production cycle time.

The Company ensures getting new models and designs of its product with the best and unbeatable quality at reasonable prices to cater to the requirements and preferences of its customers. The Company continued its focus on marketing activities by participating in many new markets. Your company has introspected with its customer base and greatly recognizes the need for innovations and new product developments to drive growth and better margins. There is ample scope and opportunity for companies having business in these sectors not to mention the potential of your company and its large presence in these sectors for many years.

Substitutions of Traditional packaging and retail chains are the most important drivers for the market growth. The real opportunity lies in developing nations or emerging economies. The company being a fully integrated end-to-end packaging materials solution company, the window of opportunity is promisingly big. Innovation to create value added differentiation; ability to execute any quantum of order; ensuring an enviable speed to market reach puts the company in a good stead to double up its top-line in the next 4-5 years.

• Cautionary Statement

Statement in the Directors Report and Management Discussion & Analysis Report contain forward looking statements. Actual results, performances or achievements may vary materially from those expressed or implied, depending on the economic conditions, Government policies, subsequent developments and other incidental factors.

For and on behalf of the Board

G V Gopinath	G S Sridhar
Managing Director	Whole Time Director& CFO
DIN:02352806	DIN:01966264
Place : Chennai
Date : 06.05.2025