Stanpacks India Ltd Management Discussions

1. OVERVIEW:

The objective of this report is to convey the Managements perspective on the external environment and Manufacturing industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the FY2025-26.

2. ECONOMIC OVERVIEW

A. Global Economy

The global economy remained resilient during the financial year 2025 26 despite continued geopolitical uncertainties, evolving trade policies and persistent inflationary pressures. According to the International Monetary Fund (IMF), global economic growth is estimated at 3.0% in 2025, with a modest improvement expected in 2026. Although inflationary pressures moderated across several economies, growth remained uneven amid higher interest rates, fiscal challenges and geopolitical developments.

Economic performance varied across major regions. The United States continued to demonstrate resilience, supported by robust consumer spending and a relatively stable labour market, though elevated borrowing costs moderated investment activity. In contrast, the Euro Area experienced subdued economic growth due to weak industrial production, softer external demand and continued policy challenges. Chinas economic recovery remained gradual, with domestic demand and the real estate sector continuing to face headwinds despite supportive government measures. Meanwhile, several emerging and developing economies continued to outperform advanced economies, driven by resilient domestic demand, infrastructure investments and improving manufacturing activity.

Global trade witnessed gradual recovery during the year; however, businesses continued to face disruptions arising from geopolitical developments. The prolonged Russia Ukraine conflict, ongoing tensions in the Middle East, and disruptions to shipping routes through the Red Sea affected global logistics, freight costs and commodity prices. These developments prompted manufacturers worldwide to strengthen supply chain resilience through supplier diversification, inventory optimisation and enhanced risk management practices. The manufacturing sector continued to adapt to evolving market conditions by focusing on automation, digital transformation, operational efficiency and sustainable production practices. Growing -mental responsibility, resource optimisation and technological advancement encouraged businesses to invest in modern manufacturing processes to improve competitiveness and long-term resilience.

Looking ahead, easing inflationary trends, gradual recovery in international trade and continued investments in manufacturing and infrastructure are expected to support global economic activity. Nevertheless, businesses are expected to remain cautious in navigating geopolitical risks, commodity price volatility and evolving trade dynamics.

B. Indian Economy

India continued to reinforce its position as one of the worlds leading and fastest-growing major economies during the financial year 2025 26. According to the Provisional Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI), Indias real Gross Domestic Product (GDP) grew by 7.7% during FY 2025 26, reflecting the resilience of the economy despite global geopolitical uncertainties, inflationary pressures and volatile international trade conditions. Inflation remained broadly under control during the year, with the Consumer Price Index (CPI) inflation averaging around 4.6%, supported by prudent monetary policy measures and easing food price pressures during the latter part of the financial year.

The countrys economic growth was primarily driven by strong domestic consumption, healthy investment activity and sustained Government capital expenditure. The services sector continued to remain a key contributor to economic growth, while the industrial sector also recorded steady expansion, supported by improving manufacturing activity and infrastructure development. Indias stable banking system, comfortable foreign exchange reserves and continued investor confidencefurther strengthened the countrys macroeconomic fundamentals.

Indias manufacturing sector maintained positive momentum throughout the year. The Manufacturing

Purchasing Managers Index (PMI) remained above the 50-point threshold for most of FY 2025 26, indicating sustained expansion in manufacturing activity. Improving industrial production, increasing capacity utilisation and resilient domestic demand continued to support manufacturing growth despite a challenging external environment.

Manufacturing industries, however, faced cost pressures during the year owing to geopolitical developments.

Escalating tensions in the Middle East, particularly around the Strait of Hormuz, along with disruptions in key international shipping routes, led to volatility in crude oil prices and increased freight and fuel costs. These developments impacted global supply chains and highlighted the importance of efficient cost management and supply chain resilience for manufacturing businesses.

The Governments continued focus on infrastructure development, logistics and manufacturing-led growth is expected to strengthen Indias industrial ecosystem over the long term. Backed by strong domestic demand, favourable demographics and a stable macroeconomic environment, India continues to provide a conducive environment for manufacturing industries, including the industrial packaging sector.

3. INDUSTRY STRUCTURE AND DEVELOPMENTS

The packaging industry continues to play a vital role in supporting manufacturing, trade and logistics by enabling the safe storage, handling and transportation of goods. Supported by expanding industrial activity, organised supply chains and growing exports, the Indian packaging industry was valued at approximately USD 106 billion in 2025 and continues to witness steady growth, driven by increasing demand for and sustainable packaging solutions.

Plastic packaging remains one of the largest segments of the packaging industry due to its durability, versatility and cost-effectiveness. The Indian plastic packaging market was valued at approximately USD 22 billion in

2025 and is expected to witness steady growth, supported by increasing manufacturing activity, expanding exports and rising demand for quality packaging solutions. India also continues to strengthen its position as a competitive manufacturing and export hub, backed by its robust industrial base, skilled workforce and adherence to international quality standards.

During FY 2025 26, the packaging industry continued to witness increasing adoption of automation, process optimisation and sustainable manufacturing practices to improve operational efficiency the same time, manufacturers faced challenges arising from fluctuations in raw material prices, higher freight and energy costs, evolving environmental regulations and geopolitical developments, including uncertainty surrounding the Strait of Hormuz, which impacted global supply chains and logistics planning.

Despite these challenges, the long-term outlook for the packaging industry remains positive, supported by continued growth in manufacturing, infrastructure development, organised logistics and export-oriented production. Increasing emphasis on innovation, sustainability and operational excellence is expected to create new opportunities and support the industrys long-term growth.

4. BUSINESS OVERVIEW

Stanpacks (India) Limited is engaged in the manufacture of industrial packaging products. The Company continues to focus on quality packaging solutions through efficient manufacturing processes, operational excellence and customer satisfaction.

During FY 2025 26, the Company undertook initiatives to strengthen its manufacturing capabilities, improve operational efficiency and support sustainable growth

Key business developments during the year include: • Automation and Technology Upgradation:

The Company installed a fully automatic manufacturing machine as part of its ongoing focus on automation and technology upgradation. The new machinery is expected to improve production efficiency, enhance process consistency and strengthen overall manufacturing capabilities.

• Manufacturing Process Optimisation:

The Company implemented improvements in its production processes to optimise manufacturing operations, enhance operational efficiency and maintain consistent product quality in line with evolving customer requirements.

• Renewable Energy Initiative:s

During the year, The Company has initiated discussions on the installation of a solar rooftop power system. The Company proposes to commence the process of evaluating suitable options and implementation prospects during FY 2026 27. The proposed initiative is expected to enhance the use of renewable energy, improve energy efficiencyand contribute towards reducing the Companys environmental footprint, approvals and commercial feasibility.

5. KEY STRATEGIC THEMES INFLUENCING THE OPERATING ENVIRONMENT

The operating environment during FY 2025 26 was shaped by several global, domestic and industry-specific developments. These strategic themes continued to influence the manufacturing sector and are expected to shape the business environment for the packaging industry in the years ahead.

a. Geopolitical Developments and Supply Chain Resilience

Continuing geopolitical tensions, including the Russia Ukraine conflict and developments in the Middle East, together with disruptions to global shipping routes, highlighted the importance of resilient supply chains. Manufacturers increasingly focused on supplier diversification, inventory optimisation and logistics planning to minimise operational disruptions.

b. Manufacturing-Led Growth and Industrial Expansion

India continued to strengthen its manufacturing ecosystem through sustained industrial growth, infrastructure development and increasing investments. Rising industrial activity and expanding domestic demand continued to support long-term opportunities for the packaging.

c. Sustainability and Circular Economy

Environmental sustainability remained a key focus area across industries. Increasing emphasis on recycling, responsible resource utilisation, waste reduction and environmentally responsible packaging solutions continued to influence business strategies and customer expectations during the year.

d. Cost Optimisation and Operational Excellence

Volatility in raw material prices, freight costs and energy expenses encouraged manufacturers to strengthen operational efficiency and cost optimisation initiatives. Investments in automation, process improvements continued to support productivity and long-term competitiveness.

6. 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.

Strengths & Opportunities :

Established presence in the packaging industry, supported by a focus on product quality, operational efficiency and customer satisfaction.

• Growing opportunities arising from increasing manufacturing activity, expanding exports, infrastructure development and rising demand for sustainable packaging solutions.

• Adoption of automation, digital technologies and process improvements presents opportunities to enhance productivity, operational efficiency and long-term

Weaknesses & Threats

Volatility in raw material prices, freight and energy costs may impact operating margins and profitability.

Intense competition, evolving environmental regulations and changing customer expectations require continuous innovation and operational excellence.

Geopolitical uncertainties, supply chain disruptions and fluctuations in domestic and global economic conditions may influence . business performance

7. FINANCIAL PERFORMANCE :

Particulars	31.03.2026	31.03.2025
Revenue from Operations	3,020.12	2,921.72
Total Income	3,022.81	2,939.08
Profit before Tax	(12.37)	21.34
Profit After Tax	(8.73)	11.58
Earnings per share	(0.14)	0.19

8. 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 2026	31st March 2025	Vari- ance	Reason for vari- ance
Current Ratio	Current assets	Current liabilities	1.26	1.40	-10%	No major vaari- ance
Debt-Equity Ratio	Current assets	Current liabilities	1.18	1.10	8%	No major vaari- ance
Debt Service Coverage ratio	Total Debt	Equity and other equity	1.27	0.99	28%	The variance is due to decrease in Earning for Debt service during the year.
Return on Equity	Net Profits after taxes	Average Share- holders Equity	(0.01)	0.02	-131%	The variance is due to decrease in Net profit during the year.
Inventory turnover ratio	Cost of goods sold	Average Inven- tory	2.69	2.32	16%	No major vaari- ance
Trade recevi- ables turover ratio (in times)	Net credit sales	Average Trade Receivable	8.59	8.74	-2%	No major vaari- ance
Trade pay- ables turnover ratio (in times)	Net credit sales	Average Trade Receivable	3,706.14	3,317.59	12%	No major vaari- ance
Net capital turnover ratio (in times)	Net sales	Working Capital (Current assets- Current liabilities)	13.45	9.12	48%	The variance is due to decrease in Working Capital during the year.
Net Profit Ratio	Net Profit	Net Sales	-0.12%	0.40%	-130%	The variance is due to decrease in Net Profit after Tax during the year.
Return on capital em- ployed	Earning before interest and taxes	Capital Employed	0.04	0.07	-42%	The variance is due to decrease in EBIT during the year
Return on Investment	Income generated from investments	Time weighted average invest- ments	-	-	0%

9. 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. Internal Audit 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.

10 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.

11. 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.

12. 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
Sd/-	Sd/-
G V Gopinath	G S Sridhar
Managing Director	Whole Time Director& CFO
DIN:02352806	DIN:01966264
Place : Chennai
Date : 15.05.2026