TPL Plastech Ltd Management Discussions

• OVERVIEW OF ECONOMY

> Global Economy

As per the International Monetary Funds July 2026 World Economic Outlook Update, global economic growth is projected at 3.0% in 2026, followed by a recovery to 3.4% in 2027. The forecast reflects the competing effects of the Middle East conflict, which is adversely affecting energy-importing and vulnerable economies, and stronger technology-led activity driven by artificial intelligence investment and adoption. Global headline inflation is expected to increase from 4.1% in 2025 to 4.7% in 2026, before moderating to 3.9% in 2027.

• United States: Growth is projected at 2.3% in 2026. The economy remains relatively resilient, supported by its position as a net energy exporter, although trade uncertainty and a possible reassessment of AI-related expectations remain key risks.

• Eurozone: Growth is forecast at 0.9% in 2026, recovering to 1.2% in 2027. Elevated energy costs, weaker consumer confidence and tighter financial conditions are weighing on the regions outlook.

• China: Growth is projected at 4.6% in 2026, before slowing to 4.1% in 2027. The near-term outlook has improved due to stronger- than-expected activity and technology-related exports, while structural challenges and external uncertainty continue to constrain growth.

> The IMF recommends a flexible, country-specific policy approach that preserves price and financial stability while limiting the impact on economic activity. Fiscal support should be temporary and targeted towards vulnerable households, alongside credible measures to rebuild fiscal buffers and maintain debt sustainability. Structural reforms should focus on productivity, workforce skills, AI and digital adoption, energy security and investment. The IMF also calls for stronger international cooperation to reduce trade uncertainty, address debt vulnerabilities and improve resilience to global shocks.

> Indian Economy

The Indian economy remained resilient in FY26 despite geopolitical tensions, volatile energy prices and disruptions to global trade. Real GDP is estimated to have grown by 7.6%, up from 7.1% in FY25, supported by strong domestic consumption, investment activity and policy continuity. Private consumption grew by around 7.7%, aided by moderate inflation, tax measures and improving labour- market conditions. Investment remained robust, supported by public infrastructure spending, healthier corporate and banking balance sheets and improving private-sector investment intentions. However, net exports weighed modestly on growth due to subdued global demand and higher imports. Indias medium-term outlook remains favourable, supported by structural reforms, digital infrastructure, demographic advantages and sustained capital expenditure. While geopolitical tensions, energy-price volatility and inflation pose near-term risks, strong domestic demand and macroeconomic stability position India to remain among the worlds fastest-growing major economies.

• END USER INDUSTRY OVERVIEW

> Plastic Industry

The global plastics market size was valued at USD 533.59 billion in 2025 and is projected to grow from USD 560.38 billion in 2026 to USD 832.62 billion by 2034, exhibiting a CAGR of 5.1% during the forecast period. Asia Pacific dominated the plastics market with a market share of 53% in 2025. Moreover, the U.S. plastics market is projected to reach USD 93.43 billion by 2032, fueled by rising applications in packaging, automotive, and consumer goods. The India Plastic Industry size is projected to be USD 44.28 billion in 2025, USD 47.04 billion in 2026, and reach USD 63.69 billion by 2031, growing at a CAGR of 6.24% from 2026 to 2031. The plastics industry is governed by a comprehensive regulatory framework and comprises a wide range of polymer products, including polystyrene (PS), polyethylene (PE), acrylonitrile butadiene styrene (ABS), and polypropylene (PP). In India, the sector supports employment for approximately 4.5 million people through a network of nearly 35,000 processing units. The government has outlined an ambitious roadmap to increase the industrys economic contribution from 3.5 lakh crore (US$42 billion) to 12 lakh crore (US$150 billion) over the next four to five years, with a strong emphasis on enhancing export competitiveness. Among the various polymer categories, polyethylene (PE) and polypropylene (PP) continue to command the largest share of the market. Demand for plastics continues to grow, driven by increasing use in automotive, packaging, and construction applications. Lightweight plastics are increasingly replacing traditional materials in vehicles, improving fuel efficiency and reducing emissions. Rapid urbanization, infrastructure development, and construction activity in emerging economies such as India, China, Brazil, and Mexico are further supporting demand. While stricter ESG standards and regulations on single-use plastics present challenges, advancements in recycling, sustainable packaging, and reusable plastic solutions are helping drive the industrys long-term growth.

> Packaging Industry

Global industrial packaging market projected to reach ~USD 97 bn by 2031 (5-6% CAGR), driven by rising demand for lightweight, recyclable IBC solutions across chemicals, food processing, and pharmaceuticals The global packaging market is estimated at approximately USD 1.22 trillion in 2026 and is projected to reach around USD 1.44 trillion by 2031, implying a CAGR of about 3.4% over the forecast period. Asia-Pacific remains the largest and fastest-growing region, driven by strong demand from food & beverage, healthcare, e-commerce, and consumer goods industries. The India packaging market size is valued at USD 101.12 billion in 2025 and is forecast to reach USD 169.73 billion by 2030, advancing at a 10.73% CAGR. In India, the packaging industry continues to grow rapidly, supported by rising consumption, expanding organized retail, increasing e-commerce penetration, and growth in the pharmaceutical sector. Plastic packaging remains a key segment, with flexible packaging witnessing strong demand due to its cost efficiency, convenience, and sustainability benefits. Rigid plastic packaging, including PET and HDPE containers, continues to maintain a significant market share owing to its durability, strength, and recyclability.

Plastics remain indispensable across industries such as packaging, automotive, healthcare, and manufacturing due to their versatility and performance characteristics. Industry growth is increasingly supported by rising adoption of recycled plastics, bio-based materials, and sustainable packaging solutions. Growing environmental awareness and regulatory initiatives are encouraging greater use of recycled content, including recycled PET (rPET), while driving investments in circular economy practices and innovative packaging technologies.

Flexible packaging continues to gain market share, particularly in food, beverage, personal care, and e-commerce applications. Its ability to extend shelf life, reduce transportation costs, and provide customized packaging solutions has made it a preferred choice for manufacturers. Growing demand for packaged foods, confectionery products, and convenience-driven consumer goods is expected to further support the long-term growth of the flexible packaging industry.

The global rigid plastic packaging market is estimated at USD 272 billion in 2026 and is projected to reach USD 317 billion by 2031, growing at a CAGR of approximately 3.1%. Growth is being driven by rising demand from the food & beverage, pharmaceutical, personal care, and e-commerce sectors, along with increasing focus on product safety, convenience, and sustainability. PET, HDPE, and PP continue to be the most widely used materials due to their durability, lightweight properties, and recyclability. Growing investments in recycling infrastructure, adoption of recycled plastics, and sustainability initiatives are further shaping the industrys evolution.

Technological advancements in manufacturing processes, including injection molding and thermoforming, are enhancing production efficiency, design flexibility, and product performance. At the same time, demand for recyclable and environmentally friendly packaging solutions is accelerating the transition toward more sustainable packaging formats.

The Indian rigid plastic packaging market is estimated at USD 3-3.5 billion in 2026 and is expected to witness robust growth over the medium term, supported by rising consumption, rapid urbanization, expanding organized retail, and increasing demand from the food & beverage, pharmaceutical, and personal care industries. Strong growth in e-commerce and consumer goods, coupled with greater emphasis on sustainable packaging solutions, is expected to further drive adoption of rigid packaging products such as bottles, jars, containers, caps and closures.

Indias chemical industry is the 6th largest globally and 3rd largest in Asia, contributing around 7% to GDP and accounting for 2.5% of global chemical sales. The sector, which comprises over 80,000 products and exports to more than 175 countries, is expected to reach US$ 300 billion by 2028, while chemical and petrochemical demand could rise to US$ 1 trillion by 2040. Growth is being driven by strong demand across specialty chemicals, agrochemicals, and polymers, supported by increasing industrialization, urbanization, import substitution opportunities, and expanding exports.

Indias chemical industry remains a key pillar of the economy, ranking as the 6th largest chemical producer globally and 3rd largest in Asia, while contributing nearly 7% to Indias GDP. The sector is expected to surpass US$ 300 billion by 2030, driven by strong demand from agriculture, pharmaceuticals, textiles, automotive, and consumer industries. Supported by rising domestic consumption, capacity expansions, and supply chain diversification, chemical and petrochemical demand in India is projected to reach US$ 1 trillion by 2040. Continued investments in chemical infrastructure, including PCPIR projects such as Dahej, along with growing export opportunities and increasing focus on specialty chemicals, are expected to further strengthen the sectors long-term growth prospects.

The global chemical industry market size is currently valued between $5.3 trillion and $6.0 trillion and is projected to grow at a CAGR of roughly 3.8% to 7.5% over the next decade.

India is a globally significant player in the chemicals industry, with strong capabilities across agrochemicals, dyes, pigments, specialty chemicals, and petrochemicals. The country is among the worlds leading producers of agrochemicals and contributes significantly to global production of dyestuffs and dye intermediates. Supported by a largely de-licensed regulatory framework, robust manufacturing capabilities, and increasing integration into global supply chains, India has emerged as a preferred sourcing destination under the "China+1" strategy. A strong export presence, growing specialty chemical capacity, and rising focus on sustainable and high-value chemical products continue to strengthen Indias position in the global chemicals value chain.

The company concluded the financial year 2025-26 on a robust note, marking a year of consistent performance. In FY 2026, the company achieved a commendable 20.9% revenue growth and 23.4% growth in Profit After Tax (PAT) compared to FY 2025. Key growth in drivers included the rising demand for products such as Intermediate Bulk Containers (IBC), etc. The demand in industrial packaging products, fueled by the shifting of the chemical manufacturing base from China to other Asian countries, including India. Additionally, the increased exports of chemicals, specialty chemicals, and pharmaceuticals from India played a pivotal role in accelerating growth, positioning the company to capitalize on the evolving global market dynamics.

Dahej Plant: A strong volume growth of 20.9% in FY26 was supported by the successful commencement of operations at our Greenfield facility in Dahej, Gujarat, which began in FY24. This facility manufactures key packaging products, including Plastic Containers and Intermediate Bulk Containers (IBCs). Building on this momentum, we have further expanded capacity, aiming to boost overall productivity and to meet rising demand.

Lote-Parshuram: We are establishing a state-of-the-art Greenfield manufacturing facility at Lote-Parshuram in the MIDC area, specializing in I BCs, Plastic Drums, and Jerry Cans. Strategically located to serve industries like agrochemicals, Solar/PV Chemicals, fruit and juice sectors, and more, the plant will offer a cost advantage through advanced technology. The company has been allotted possession of the site, and the project is on schedule for completion in Q2FY 2027.

During FY26, the Company undertook a significant capital expenditure of Rs. 93.99 million, reflecting its continued commitment to operational excellence and capacity enhancement. This investment was directed towards plant automation, debottlenecking initiatives at existing facilities, and strategic expansion at the Dahej Unit, including the installation of an additional production line for Intermediate Bulk Containers (IBCs) to cater to the robust and growing demand in the western region.

> Raw material availability

We have faced no significant challenges in sourcing our primary raw materials. Polyethylene (PE) granules, derived from petroleum and natural gas, remain the cornerstone input across all our business segments. A substantial portion of these granules is imported from neighboring countries, with the balance procured from domestic manufacturers. Our procurement strategy is a balanced mix of open-market purchases and both short- and long-term supply agreements, ensuring stability and cost efficiency. As the global focus on sustainability intensifies, the landscape for recycled plastics continues to evolve. Despite this shift, we anticipate sustained and potentially rising demand for virgin polyethylene, driven by both regulatory developments and quality considerations. Countries such as China, India, Vietnam, Indonesia, the United States, and regions across Europe are increasing investments in recycling infrastructure, which is expected to support long-term demand equilibrium within the market.

The Company is exposed to fluctuations in polymer prices which are determined by the supply and demand in the Indian and international markets. Since polymers are crude derivatives, the prices also tend to follow crude prices which are volatile, and this volatility has an effect on Companys income and net profit.

At the core of our Human Resource philosophy lies a deep commitment to continuous learning and employee development. We foster a culture where every team member regardless of their position is encouraged and expected to pursue ongoing personal and professional growth. Continuous learning is not just a value but a prerequisite for employment within our organization. We are dedicated to offering meaningful, realistic career development opportunities that empower employees to evolve alongside the business, aligning both market dynamics and individual aspirations.

Our talent strategy emphasizes long-term capability building, ensuring that our workforce remains agile and the future ready. To support this, we provide structured training programs, upskilling initiatives, and internal mobility opportunities that inspire innovation and adaptability. Industrial relations are managed with a localized and structured approach. Responsibility rests with site- level management at factories and warehouses, ensuring direct engagement and quick resolution of issues. Matters requiring escalation are addressed at regional or national levels, in full compliance with local labor laws and best practices, fostering a collaborative and respectful workplace environment.

The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances.

Internal control is an important component of the Companys operations and addresses all those operating methods and procedures whose objective it is to ensure:

- the reliability and integrity of the Companys financial and management information,

- effective and profitable operations that are in line with the Companys strategy,

- that the Companys assets are protected,

- that applicable legislation, guidelines, regulations, agreements and the Companys own governance and operating guidelines are complied with.

Internal Auditors comprising of professional firms of Chartered Accountants have been entrusted the job to conduct regular internal audit at all units/location and report to the management the observation, if any. The Audit findings are reported on quarterly basis to the Audit Committee of the Board.

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectation may be "forward-looking" within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied. Companys operations may be impacted by various factors, including its reliance on telecommunication and information technology systems, government policies, and other influences. The Company disclaims any liability for consequences arising from decisions based on these statements and does not undertake to update them in the future.