TCPL Packaging Ltd Management Discussions

INDUSTRY OVERVIEW

Over the last few years, India has maintained its position as one of the fastest growing economies in the world, and consequently consumption of packaging products has also grown. Similar to the global packaging industry, growth is primarily driven by an increasing demand from FMCG, F&B, Retail, Tobacco, e-Commerce, and Healthcare industries. Given the environmental impact of packaging materials and the plastic waste crisis, consumers world-wide are demanding an increased use of recycled content in packaging or entirely recyclable packaging. All manufacturers are looking towards opportunities to innovate and manufacture more sustainable packaging products, and this continues to be a prime area of focus for TCPL.

COMPANY OVERVIEW

TCPL is one of Indias leading producers of sustainable, innovative packaging solutions catering to a diverse range of industries. We collaborate closely with our customers to deliver paperboard-based packaging products, including folding cartons, printed blanks and outers, and litho-laminated cartons. We offer flexible packaging formats such as laminates, pouches, wrap-around labels, and shrink sleeves. TCPL has a strong pan-India presence with nine state-of-the-art manufacturing facilities, supported by marketing offices in key metropolitan regions, and headquarters in Mumbai. Our international operations are anchored through a wholly owned subsidiary in the United Arab Emirates, which enables us to tap into a dynamic region, and a global centre of commerce.

KEY DEVELOPMENTS IN FY 2024-25

During the financial year, the Company commissioned a new greenfield manufacturing site in Chennai. Strategically located near the port, this plant is designed to serve both domestic customers in South India and act as an export hub, reflecting our continued focus on operational expansion and global market reach.

In a significant backward integration move, the Company has setup a wholly owned subsidiary Accura Technik Private Limited to establish a manufacturing plant for engraved printing and embossing cylinders in Silvassa. This facility will house the latest, state of the art technology for electronic and laser engraving, this will not only meet our internal requirements, but also cater to third-party demand in India and abroad.

Commercial production is expected to commence by Q2 FY 2025 26.

Our subsidiary Creative Offset Printers Private Limited has recorded strong revenue growth since acquisition. However, operational profitability remains a concern. We are undertaking comprehensive restructuring and efficiency enhancement measurestoturnaroundits performance.

The companys exports in the past years has been strong and growing. The establishment of our UAE subsidiary has substantially strengthened our global footprint, driving robust growth in overseas revenues.

The companys other units have performed adequately in the year 2024-25, during which we installed a brand new state-of-the-art printing machine imported from Germany in Goa.

FINANCIAL PERFORMANCE

During the financial year 2024-25, the Company has achieved a revenue from operations 1770.26 crores on a consolidated basis, an increase of 14.85%; and revenue from operations of 1696.38 crores on a standalone basis, an increase of 13.79% on year- on-year basis. On a consolidated basis, the EBIDTA margin stood at 16.56%, and on a standalone basis it is 16.88% as against 16.31% and 16.70% respectively in the previous year.

SUSTAINABILITY INITIATIVES

TCPL remains deeply committed to be Indias most sustainable packaging company. Paperboard, a core material in our product mix, is recyclable and largely sourced from recycled or responsibly forested pulp. In our flexible packaging business, we have made significant strides in providing high barrier fully recyclable alternatives to existing packaging structures, utilizing in house polyethylene film to design mono polymer packaging.

In addition to product sustainability, we continue to invest in green manufacturing. In FY 2024 25, rooftop solar power installations were completed in Silvassa, Goa, and Haridwar.

These now supply around 15% of the energy requirements at those locations. Existing solar setups in Guwahati and Silvassa continue to perform satisfactorily, and further solar expansion is planned across additional sites. In our flexible packaging unit, solid-fired boilers using biomass/briquettes are being installed to replace diesel and furnace oil, significantly reducing both emissions and fuel costs.

OPPORTUNITIES

Indias macroeconomic outlook remains optimistic, bolstered by political stability and growing consumer demand. With widespread geographic coverage and a strong product portfolio,

TCPL is well-positioned to benefit from market recovery and growth in packaging demand.

TCPL is now recognised as a leader in its field across segments, and the management is very confident of leveraging its existing relationships with leading customers, besides entering new customer segments, to continue with high rates of growth as witnessed in the past. The flexible packaging division, in particular, holds strong future potential. Our high barrier recyclable mono-polymer (PE) pouch solutions — now used by leading brands like Unilever and Nestl? — position us as an innovation leader in the sustainability space. With ample in house capacity already installed, this segment is poised for accelerated growth.

With the global shift away from China as a manufacturing source, TCPL is actively targeting new export markets. Initial supply to USA commenced during the year, opening a high- potential avenue of growth.

THREATS

Volatility in raw material prices including paper, polymers, aluminum (LME-indexed), and key chemicals continues to pose a challenge. Logistics and freight costs have also been erratic. While partial cost pass-through and productivity improvements help mitigate the impact, margin pressure due to time lag remains a risk across our business segments.

Growth in end-user sectors such as FMCG, F&B, tobacco, and liquor also influences our performance. Recent quarterly results from several key customers indicate muted domestic volume growth (3 5%) versus expected levels (8 12%). A rebound to pre- COVID growth rates would benefit your Company significantly.

SEGMENT WISE OR PRODUCT-WISE

PERFORMANCE

The Company currently has only one segment of business i.e., Printing and Packaging.

DIVIDEND POLICY AND AMOUNT

The Board of Directors of the Company has adopted the policy of paying out 20% of retained profit, as Dividend each year. Accordingly, it is recommended by the Board of Directors to continue the same percentage for adoption in the ensuing Annual General Meeting. The dividend of 30.00 per equity share would amount to a pay-out of 2730 Lakhs, subject to deduction of tax at source as per provisions of prevailing of Tax Rules. The dividend distribution policy is available on the weblink https://tcpl.in/wp-content/ uploads/2025/07/Dividend-Distribution-Policy.pdf

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal control system and a defined organizational structure besides, internal rules and regulations for conducting the business. The Management reviews actual performance with reference to budgets periodically. The Company has an Audit Committee, Independent Statutory Auditors, Internal Auditors and Risk Management Committee who submit reports periodically which are reviewed and acted upon.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Industrial relations continue to remain cordial during the year and total 2419 employees are on the Companys payroll as on March 31, 2025 as compared to 2228 employees on the Companys payroll as on March 31, 2024.

DISCLOSURE OF ACCOUNTING TREATMENT

In preparation of financial statements, the Company has not followed a treatment different from that prescribed in the

Accounting Standards. There are no significant changes in key financial ratios viz Debtors Turnover, Inventory Turnover,

Interest Coverage Ratio, Current Ratio, Debt Equity Ratio,

Operating Profit Margin, Net Profit Margin.