Sundaram Multi Pap Ltd Management Discussions

GLOBAL ECONOMY

During FY 2025-26, the global economy faced renewed uncertainty following the heightened geopolitical tensions arising from the outbreak of conflict in the Middle East. While technology-driven investment, accommodative financial conditions, a weaker US dollar, and supportive fiscal and monetary policies provided early momentum, the conflict emerged as a significant headwind, impacting commodity markets, inflation expectations, and financial stability. Global economic growth is projected to slow to 3.1% in 2026 and 3.2% in 2027, compared with approximately 3.4% in 2024-25. Over the medium term, growth is expected to settle near 3.2%, remaining lower than the historical average of 3.7% (2000-19).

Compared to the January 2026 World Economic Outlook (WEO) Update, the 2026 growth forecast has been downgraded by 0.2 percentage points, while the 2027 forecast remains unchanged. Meanwhile, forecasts for global headline inflation have been revised upward, with inflation now expected to peak at 4.4% in 2026 before declining to 3.7% in 2027.

The global economic outlook is characterized by considerable divergence across regions. Advanced economies are expected to remain relatively resilient, whereas emerging market and developing economies face heightened vulnerability to commodity price shocks, supply chain frictions, and evolving trade dynamics. Significant downside risks persist, including further geopolitical escalation, energy market disruptions, trade tensions, and uncertainty surrounding the pace of productivity gains from artificial intelligence. In response to this volatile environment, the Company is closely monitoring global developments and proactively managing its operations and supply chain strategies to mitigate the impact of inflationary pressures and protect profitability.

(Source: IMF Report on World Economic Report, April 2026)

INDIAN ECONOMY

Indias Gross Domestic Product (GDP) growth accelerated to 7.7% in FY 2025-26, compared with 7.1% in FY 2024-25, exceeding the earlier estimate of 7.6% released in February 2026. The strong performance was supported by robust manufacturing activity and a recovery in contact-intensive services. However, the Reserve Bank of India (RBI) projects GDP growth to moderate to 6.6% in FY 2026-27, reflecting downside risks associated with geopolitical tensions in West Asia which leads to increase in fuel prices and supply disruptions and the possibility of a below-normal monsoon.

Sectoral performance remained mixed during the year. The manufacturing sector recorded strong growth of 10.7%, up from 9.3% in the previous fiscal year, reflecting improved industrial activity and investment. The contact-intensive services segment, comprising trade, repair, hotels, transport, and communication, expanded by 11.0%, compared with 6.6% in FY 2024-25, supported by sustained consumer demand and increased mobility. In contrast, the agriculture and allied sectors moderated to 3.0% growth from 4.2% in the previous year, highlighting the sectors continued vulnerability to climatic conditions.

As of April 2026, India remained the worlds sixth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). Domestic consumption continues to be the primary driver of economic activity, accounting for nearly 70% of GDP, making India one of the worlds largest consumer markets. The digital economy contributed an estimated 11.7% of GDP, with its value expected to exceed US$1 trillion by 2029, reflecting the countrys ongoing digital transformation. Additionally, approximately 63% of Indias population resides in rural areas, contributing around 46% of national GDP, underscoring the significance of rural demand in supporting long-term economic growth.

OUTLOOK

Despite global uncertainties, including geopolitical tensions, trade realignments, and volatile commodity markets, the Indian economy is expected to remain among the worlds fastest-growing major economies. Continued policy focus on fiscal discipline, manufacturing, digital transformation, and ease of doing business is expected to further strengthen the countrys longterm growth prospects.

The paper industry continues to play a vital role in promoting literacy, education, dissemination of information, and sustainable packaging solutions, making it an essential contributor to economic development. Rising demand from sectors such as e-commerce, pharmaceuticals, and consumer goods is expected to support steady growth in paper and packaging consumption. Indias demographic advantage, expanding middle class, increasing urbanization, and rapid adoption of digital technologies continue to create significant opportunities across industries. Government initiatives promoting manufacturing, infrastructure development, circular economy practices, and sustainability are expected to enhance competitiveness and attract further investments.

As businesses adapt to evolving global supply chains and changing market dynamics, innovation, operational efficiency, and sustainable business practices will remain critical drivers of longterm success. With a stable macroeconomic environment, improving investment climate, and continued policy support, Indias economic outlook for 2026 and beyond remains positive, offering significant opportunities for businesses to grow and create long-term value.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The education sector is a foundational pillar for individual empowerment and societal advancement, playing a critical role in driving economic growth, fostering social equity, and enriching cultural identity. Supported by a growing youth population, rising household incomes, and climbing literacy levels, Indias school education sector continues to flourish rapidly. Simultaneously, rapid technological advancements and evolving learning methodologies are driving a profound digital transformation, offering innovative and scalable solutions to meet diverse learning needs. As a result of this continuous expansion and modernization, Indias higher education system has grown remarkably to become one of the largest and most dynamic networks globally.

The Indian stationery market has registered substantial growth in the past few years owing to the growing urban population, and increasing demand for stationery products in the private and public sector, along with growing government initiatives in improving the education system. According to the report, India Stationery Market Outlook, 2027-28, the Indian Stationery market is anticipated to grow at more than 8% CAGR during 2022-28. The rise in digital content surrounding stationery products and its use has also introduced an entirely new breed of influencers and reviewers.

The total market of stationery is made from paper stationery and non-paper stationery products. Paper stationery market is further segmented into products for office use and non-office use. Non-paper stationery segment covers products such as writing instruments, office products, colors and other adhesive & technical instruments. In short, stationery market includes products like, notebooks, paper for office, pens, non-paper for office, pencils, colors and much more types. Among this entire category, apart from dominating paper stationery, non-paper stationery category is contributed major market share. Further, among the non-paper stationery segment, writing instruments constitute the largest share, including pens, pencils and other related products. All these leads to the one conclusion that evolving digitalization has not yet proved to be a threat for the stationery products as considering the growth potential of the industry.

In the forthcoming years, the Indian stationery industry is anticipated to exhibit consistent growth. This growth in the industry will be supported by various factors, including increasing educational spending and the steady introduction of innovative products.

Initiatives of the Indian Government in the Field of Education:

Numerous initiatives have been undertaken by the Government and other social welfare institutions to promote Right to Education such as:

> Pradhan Mantri Vidyalaxmi (PM-Vidyalaxmi) Scheme-

The PM-Vidyalaxmi Scheme aims to ensure that no student is deprived of the opportunity to pursue higher education due to financial constraints. Under this scheme, financial assistance is provided through loan for higher education in domestic institutions.

> Make in India- is a major national initiative designed to transform the country into a global manufacturing and innovation hub, promotes local manufacturing and drives self- reliance among stationery producers.

> Union Budget 2026-27- Raised the total allocation to the Ministry of Education by 8.27%, boosting school infrastructure, digital learning, and institutional capacity. This sustained investment continues to directly expand enrollment and drive aggregate demand for student stationery.

> ‘National Education Policy (NEP) 2020- The National Education Policy envisions an education system rooted in Indian ethos that contributes directly to transforming India sustainably into an equitable and vibrant knowledge society, by providing high-quality education to all, and thereby making India a global knowledge superpower. NEP aims to uplift vulnerable, underprivileged, and underrepresented populations through education. The intent is to provide worldclass education to all children, regardless of where they live or the economic background, they come from.

Rising inclination towards pursuing higher studies have resulted in opening up of newer and better avenues thereby infusing higher demand and enhancing stationery industry growth prospects.

E-LEARNING

The Indian e-learning and educational technology sector has matured into a structural component of the national education system. Driven by the parameters of the National Education Policy (NEP), the industry has shifted away from the temporary solutions of the past and toward permanent, integrated hybrid delivery models. This evolution is heavily backed by expanding infrastructure. According to the recent data from the Ministry of Educations UDISE+ report shows that internet connectivity in Indian schools has reached 63.5% (as per 24-25). Consequently, formal academic frameworks have digitised entire operational pipelines, extending from automated cloud enrolment and administrative workflows to scalable, remote student evaluation and proctored assessment systems.

At a Macroeconomic level, high-speed 5G network expansion and low-cost mobile data have pushed digital learning deep into tier-2, tier-3, and rural markets. While traditional K-12 supplemental tutoring and competitive test preparation continue to represent significant market volume, the current fiscal year highlights accelerated growth in professional upskilling, corporate vocational training, and institutional B2B enterprise software platforms. By utilizing cloud infrastructure, localized multi-lingual content, and early deployments of AI-driven adaptive learning path software, the e-learning industry acts as a vital tool to bridge historical systemic issues, including regional teacher shortages, infrastructure gaps, and unequal distribution of educational resources across the Country.

BUSINESS REVIEW/STATE OF THE COMPANYS AFFAIRS

Sundaram was established in 1985 as a manufacturer of school and office paper stationery products. Over the years, our unwavering commitment to quality, innovation, and customer satisfaction has enabled us to achieve consistent year-on-year growth and establish ourselves as one of the trusted brand in the stationery industry.

At Sundaram, we believe in fostering creativity through quality. Every product is designed to inspire students, professionals, and creators to start fresh, think boldly, and embrace endless possibilities. With Sundaram, every page is the beginning of something new.

We design, manufacture, and market a wide range of stationery products from exercise notebooks, long books, notepads, scrapbooks, drawing and graph books for students to office & corporate stationery and printing, writing, and packaging papers. Sundaram started with a bold vision: to offer the best products at revolutionary prices while championing ethical and socially conscious business practices. Our mission is to make education accessible to everyone by delivering high-quality stationery and ensuring customer satisfaction at every step.

Even in a digital-first world, we continue to believe in the timeless value of paper. At Sundaram, we are committed to delivering durable, reliable, and affordable stationery to every corner of India championing quality in every page because a book can be a window to the world a child has imagined.

With a wide range of over 250 products today Sundaram sells more than 5 lakh books everyday through its strong distribution network of 15000 dealers and distributors.

With strong branding and extensive market reach, Sundaram is not only a leading stationery brand in Maharashtra but also a favourite across India. The brand Sundaram stands for trust, quality products and for a legacy. As it is rightly said, "Education is the strongest weapon" and we want to deliver quality products at the best rates to the entire country.

We envision a world where buying stationery is effortless and delightful ? leaving customers satisfied and confident. We firmly believe everyone deserves access to quality educational materials, and our vision is to ensure every child has a reliable book to learn from.

SUNDARAM is mainly in the Business of School & Office stationery as well as E-learning segment. The enormous size of school and paper stationery industry of India makes it one of the most important sectors of Indian Economy. Increasing economic growth, high literacy rate, more government spending on Education, Growing Population, Urbanization, higher proportion of young adults, better living standards, shift in focus from inexpensive to quality products etc. are some major factors that are driving the paper stationery business to flourish. The governments emphasis on education is the primary driver of growth in the notebook industry.

E-CLASS

E-Class is an innovative learning solution developed by our company to make studies easier, more engaging, and more effective for students. It is designed to enhance conceptual understanding, improve academic performance, and help students achieve better results.

E-Class offers comprehensive digital educational content for students of Maharashtra State Board from Standards 1 to 10, covering all subjects. The content is available in English, Marathi, Semi-English, Hindi, and Urdu mediums and is fully aligned with the latest Maharashtra State Board syllabus.

As education continues to evolve and students face increasing academic challenges, E-Class provides a smarter way to learn. Research shows that visual learning significantly improves understanding and retention compared to reading text alone. Keeping this in mind, we have transformed traditional textbook content into engaging audio-visual and animated lessons that explain every chapter and concept in a simple, interactive, and comprehensive manner.

E-Class is committed to promoting quality education by making the learning process more effective, enjoyable, and technology- driven. Our innovative learning platform enriches both teaching and learning experiences by combining educational excellence with modern digital technology. Our objective is to go beyond the limitations of conventional textbooks and create a dynamic learning environment for todays students.

EDZAM

Edzam is our comprehensive digital learning platform, available as both a mobile application and a web portal. It provides students with a complete learning ecosystem featuring:

• Interactive audio-visual learning content

• Chapter-wise assessments and practice tests

• Extensive question banks

• Performance analytics and progress reports

• Personalized learning support

Edzam empowers students to learn at their own pace while enabling parents and educators to monitor academic progress effectively. Through E-Class and Edzam, we are committed to empowering students with quality digital education, nurturing confident learners, and contributing to the vision of a digitally empowered India.

OUTLOOK ON OPPORTUNITIES AND THREATS

The paper industry has occupied a prestigious position, among the various manufacturing enterprises, in view of its significant contribution to the Society. With close to one-third of Indias population being under the age of fifteen, the country has a remarkable growth opportunity for the education sector. The outlook of this industry remains bright in light of growing middle- class population coupled with thriving income levels, boost in "Beti Padhao" campaign, increase in variety of courses offered by colleges and universities, growing emphasis of the Government, and more. However, accessing quality education and financial commitment to education development continues to remain challenging. The demand is expected to grow on account of an anticipated pick- up from the education sector with improving literacy rates and growing enrolment as well as increasing number of schools and colleges. Improving literacy rates, rising circulation and an increasing number of newspapers and magazines is expected to support growth in demand.

On the other hand, there is a sharp rise in the number of internet users has boosted the demand for e-learning platforms and courses. The global e-learning market has seen a tremendous increase in demand for content designed to meet remote learning needs. Anyone from anywhere in the world can access self- paced learning modules offered by educational institutions. The educational institutions are collaborating with suppliers to leverage e-learning and expand their students reach. This indeed leads to more opportunities for the supply side of the e-learning industry. Important emerging trends like e-classrooms, micro learning, mobile learning and social learning are driving exponential growth in the market.

The e-learning companies in India are striving to replace the traditional education system with the modern education system by adopting latest educational technologies. The e-learning companies in India are working effectively with the government, and educational boards to make the cloud platform prevalent. Besides, by adopting learning analytics or big data analytics, these e-learning companies are helping online course providers design custom-made courses, ensure self-regulation of learners, conduct frequent auto-graded quizzes, and make grades and learning progress accessible to students. Thus, the evolution and rising awareness regarding latest technologies will increase the adoption of e-learning in the Indian market, thereby pushing growth in the online education market in India.

RISKS AND CONCERNS

The risk is always the part and parcel of any business activity. The Company operates in a highly competitive environment that is subject to innovation and varying level of resources available to each player in this segment of business. The Companys risk management strategy focuses on identifying and mitigating potential risks that could impact the business. The common risks inter alia, are Risk to Company Assets and Property, Employees Related Risks, Foreign Currency Risks, Risks associated with Non-Compliance of Statutory enactments, Competition Risks, Operational Risks, Business risk, Technology obsolescence, Investment risks, Retention of talent risks and risks associated with Expansion of facilities. Business risks, inter-alia, further include financial risk, political risk, fidelity risk, legal risk. Immense competition is faced by the company from the international players and unorganized sectors.

The education system in India is evolving so as the content for the learning. The Company is constantly reviewing the risk that would impact its business adversely. Costs of raw material and inflationary pressure also increase the cost of manufacturing, but the availability of raw material from the suppliers at the right time and at the right price has enabled the company to reduce the cost of manufacturing. For Inflationary pressures and its impact, the company has taken suitable cost control steps.

The Companys Compliance Risk and Integrity Risk is reduced by adherence to all laws and regulations and by employing a rigorous verification process. We have a robust reporting structure in place, extending from business line executives to the Audit Committee and the Board of Directors. An expert team conducts an annual internal audit, scrutinising key elements of corporate operations, followed by thorough reviews by internal auditors, the Audit Committee, and the Board of Directors. The Audit Committee consistently assesses the suggestions put forth by internal auditors and proposes measures to bolster internal controls.

The Companys Human Risk is minimal as it enjoys a harmonious industrial relationship in the manufacturing units of the Company. Lack of clarity on future Government policy continues to be an area of major concern for the industry. The exact impact of this cannot be evaluated until the proposed changes are actually introduced and implemented.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Companys internal control system is reliable, efficient and crucial to the success of our Company. We review our numerous segments and sales operations with the help of the internal control system. We have deployed an effective internal control system, through which we review our sales operations and numerous business activities. This system assures proper maintenance of internal audit controls, like observing various operations, protecting assets and complying with regulations. The yearly internal audit covers important areas of business operations identified by a team of experts. Each area is reviewed by internal auditors, the Audit Committee and the Board. The Audit Committee considers the inputs from the internal auditors and recommends ways to enhance the internal controls, time and again.

Disclosure on Internal Financial Control and their adequacy & brief description on performance with respect to operational performance is given in Directors Report.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

( in Lakhs)

Particulars	2025-2026	2024-2025
Total Revenue	13,920.38	12,940.50
Operating Expense	13,125.56	12,580.79
EBITDA	836.38	189.11
EBITDA Margin	6.01	1.46
Depreciation	364.02	433.67
PAT	317.95	(512.07)
Capital Employed	9,407.66	9,291.05
EBIT	472.36	(244.56)
ROCE	4.08	(2.01)
Net worth	9,069.21	8,753.78

Revenue: Our Companys overall total income increased to Rs.13,920.38 Lakhs for 2025-26 from Rs.12,940.50 Lakhs for 2024- 25. This increase in revenue mainly attributed to the sustained efforts of the management and the successful expansion of the companys business operations on a PAN India basis.

Expenses: Our Companys overall expenses increased to Rs.13,643.99 Lakhs for 2025-26 from Rs.13,281.97 Lakhs for 2024-25. This increase in expenses can be attributed mainly to the increase in business volume as seen from increase in revenue.

Profit / (Loss): Our Company has incurred profit of Rs.317.95 Lakhs for FY 2025-26 as against the loss of Rs.512.07 Lakhs in FY 2024-25.

Net Worth: Our Companys net worth increased to Rs.9,069.21 Lakhs for 2025-26 from Rs. 8753.78 Lakhs for 2024-25.

HUMAN RESOURCES / INDUSTRIAL RELATIONSHIP

Human Resources are one of the most important ingredients to fuel future growth and progress of the organization. The Company therefore strives to align human resource policy and initiatives to meet business plans. Companys focus on promoting wellbeing of its employees, providing safe and congenial work environment. There are 476 employees on the payroll as on March 31, 2026. Training of employees to maintain high level of motivation is an ongoing process. Career development opportunities are provided at all levels and across all functions. In Challenging Business Environment, Company & its Management has maintained healthy and cordial relationships with all the Stakeholders.

CHANGES IN KEY FINANCIAL RATIOS

Pursuant to the provisions of Regulation 34(3) of SEBI (LODR) Regulations 2015 read with Schedule V part B (1) details of changes in Key Financial Ratios are given as hereunder:

Sr. No.	Ratio		Year Ended
			March 31, 2026	March 31,2025
1	Debtors Turnover Ratio	Times	9.32	9.13
2	Inventory Turnover Ratio	Times	1.50	6.16
3	Interest Coverage Ratio	Times	2.79	(0.28)
4	Current Ratio	Times	2.93	2.45
5	Debt Equity Ratio	Times	0.42	0.54
6	Operating Profit Margin	%	2.02	(2.68)
7	Net Profit Margin	%	2.32	(4.02)
8	Return on Net Worth		3.50	(5.82)

The significant improvement in Operating Profit Margin, Net Profit Margin, Interest Coverage Ratio and Return on Net Worth is primarily attributable to higher sales, improved operating efficiencies, better product mix, effective cost optimisation measures and the Company returning to profitability during FY 2025-26.

DISCLOSURE OF ACCOUNTING TREATMENT

The Financial Statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). The details of accounting treatment are given in Significant Accounting policies of the Financial Statements.

CAUTIONARY STATEMENT

Statements in this Management s Discussion and Analysis detailing the Companys objectives, projections, estimates, expectations or predictions are "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, finished goods prices, stock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government policies, regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labor negotiations.

For and on behalf of the Board of Directors
Sundaram Multi Pap Limited
Sd/-	Sd/-
Amrut P. Shah	Shantilal P. Shah
DIN:00033120	DIN: 00033182
Chairman & Managing Director	Whole-time Director
Date: August 13, 2026
Place: Mumbai