Yashraj Containeurs Ltd Management Discussions

Yashraj Containeurs Ltd. ("YCL" or "the Company") recognises that sound Corporate Governance is fundamental to sustainable growth, responsible business conduct and long-term value creation. The Company is committed to conducting its affairs with transparency, integrity, accountability and fairness, in accordance with applicable provisions of the Companies Act, 2013, SEBI regulations and other statutory requirements.

The Company continues to strengthen its governance practices, internal processes and disclosure standards with a view to protecting stakeholder interests and maintaining their trust and confidence. The Board and Management remain committed to upholding high standards of ethical conduct and compliance across the organisation.

INDIAN ECONOMY

The Indian economy continued to demonstrate resilience during FY 2025-26, supported by robust domestic demand, improving investment activity, infrastructure development and continued policy support for manufacturing and economic growth. As per the Economic Survey 2025-26, Indias real GDP is estimated to grow by 7.4% during FY 2025-26, reflecting the strength of domestic economic fundamentals.

The industrial sector remained an important contributor to economic activity during the year. Manufacturing recorded strong momentum, with growth of 8.4% during the first half of FY 2025-26, supported by resilient demand and improved capacity utilisation. Construction activity also remained supported by sustained public capital expenditure and ongoing infrastructure development.

The Governments continued focus on strengthening domestic manufacturing, improving logistics and infrastructure, enhancing supply-chain efficiency and promoting investment is expected to provide a supportive environment for industrial and manufacturing businesses.

The economic environment, however, continues to be influenced by global uncertainties, geopolitical developments, commodity price movements, trade-related developments and supply-chain disruptions. The Companys focus remains on operational efficiency, prudent cost management and maintaining strong customer and supplier relationships to navigate these external factors.

INTERNAL CONTROL SYSTEMS

The Company has established an adequate internal control framework commensurate with the size, scale and nature of its operations. The internal control systems are designed to ensure operational efficiency, safeguarding of assets, prevention and detection of irregularities, regulatory compliance and accuracy and reliability of financial reporting.

The Companys internal controls are periodically reviewed through internal audit processes, management reviews and other monitoring mechanisms. The Audit Committee periodically reviews the adequacy and effectiveness of the internal control framework and considers significant observations and recommendations arising from audit processes.

Wherever required, appropriate corrective and improvement measures are undertaken to strengthen processes and controls. The Company remains focused on continuously improving its internal control environment and ensuring effective implementation across its operations.

THE BUSINESS

YCL is engaged in the manufacturing of steel drums and barrels used for storage and transportation across various industrial applications. The Companys products cater to diverse industries where durable, reliable and safe packaging solutions are required.

The demand for industrial drums and barrels is closely linked to the performance of end-user industries such as chemicals, lubricants, paints, agrochemicals, manufacturing and other industrial sectors. The Companys focus remains on maintaining product quality, operational efficiency, customer service and compliance with applicable standards.

Given the industrial nature of its operations, the Company places significant emphasis on workplace safety, operational discipline and preventive measures. Key operational risks may include fire hazards, equipment-related incidents, manual handling injuries and material or product degradation.

The Company seeks to mitigate these risks through:

Use of appropriate material-handling equipment and safety measures; Regular training and awareness programmes for employees; Periodic safety inspections and emergency preparedness measures; Preventive maintenance of plant, machinery and equipment; Implementation and monitoring of standard operating procedures; and Compliance with applicable health, safety, environmental and regulatory requirements.

The Company continues to review its manufacturing and operating processes with the objective of improving productivity, safety, quality and operational efficiency.

INDUSTRY SCENARIO & REGULATORY DEVELOPMENTS

Indias manufacturing and industrial ecosystem continued to expand during FY 2025-26, supported by domestic demand, infrastructure investment and policy measures aimed at strengthening manufacturing capabilities. The Economic Survey 2025-26 noted strong industrial activity during the year, with manufacturing emerging as a key driver of industrial growth.

The industrial packaging segment continues to derive demand from sectors such as chemicals, lubricants, paints, agrochemicals, food processing and waste management. Growth in manufacturing activity and the expansion of industrial and logistics infrastructure are expected to support the long-term requirement for industrial packaging solutions.

At the same time, the industry remains exposed to fluctuations in steel and other raw material prices, energy and transportation costs, competitive pricing pressures and evolving customer requirements.

The policy environment during FY 2025-26 continued to place emphasis on manufacturing competitiveness and deeper integration with global value chains. The National Mission on Manufacturing announced under the Union Budget 2025-26 aims to strengthen Indias manufacturing capabilities, competitiveness and global integration, with a particular focus on technology, infrastructure, skills and MSMEs.

Key factors influencing the industry include:

Continued growth in domestic manufacturing and industrial production; Expansion of infrastructure and logistics capabilities; Increasing focus on domestic value addition and supply-chain resilience;

Greater emphasis on environmental sustainability and responsible waste management;

Increasing adoption of technology and process automation; and Evolving regulatory and compliance requirements applicable to industrial and environmental practices.

YCL continues to monitor developments in the regulatory and business environment and remains focused on maintaining compliance, improving manufacturing processes and strengthening its competitive position.

THREATS & OPPORTUNITIES

Opportunities

The Company believes that the following factors may provide opportunities for future growth: Growing demand from chemical, agrochemical, lubricant and other industrial sectors; Expansion of domestic manufacturing and industrial activity; Increasing requirement for safe, durable and reliable industrial packaging; Opportunities to expand the Companys customer base and geographical presence; Potential growth in export markets supported by Indias manufacturing competitiveness; Opportunities to develop customised and value-added packaging solutions; Increasing emphasis on reusable, recyclable and environmentally responsible packaging; and

Opportunities arising from diversification of global supply chains and the increasing adoption of a "China+1" sourcing strategy.

Threats

The Companys business may be affected by various industry and external risks, including: Volatility in steel, fuel and other input costs; Competitive intensity and pricing pressure from existing and new market participants;

Substitution by alternative packaging solutions such as IBCs, flexi tanks and other bulk transportation systems in certain applications;

Changes in environmental, safety and other regulatory requirements; Dependence on demand from key end-user industries; Supply-chain disruptions and availability of key raw materials; Changes in domestic and global economic conditions; and Geopolitical developments and their impact on trade, logistics and commodity prices.

The Company follows a structured approach to identifying and managing business risks. The Board and Management periodically review key risks and assess appropriate mitigation measures. These include strengthening supplier and customer relationships, improving operational efficiencies, monitoring input costs, diversifying the product and customer base and undertaking appropriate technology and process improvements.

SUPPORT FROM GOVERNMENT & REGULATORS

The Government of India continues to focus on strengthening the manufacturing and MSME ecosystem through initiatives aimed at improving infrastructure, enhancing access to finance, promoting entrepreneurship, supporting technology adoption and increasing the competitiveness of Indian businesses.

During FY 2025-26, policy initiatives continued to focus on strengthening Indias manufacturing capabilities, improving logistics and infrastructure, supporting MSMEs and enhancing Indias integration with global value chains. The National Mission on Manufacturing is one such significant initiative aimed at accelerating industrial growth and improving manufacturing competitiveness.

The Company continues to monitor applicable government schemes, incentives and support measures available to eligible enterprises and evaluates such opportunities based on applicable eligibility criteria. YCL remains committed to complying with applicable laws, regulations and guidelines issued by the Government and relevant regulatory authorities.

CAUTIONARY STATEMENT

This report may contain certain statements concerning the Companys objectives, expectations, estimates, projections and future plans that may constitute forward-looking statements. Such statements are based on the Companys current expectations, assumptions and assessments and are subject to various risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed or implied.

These factors may include, among others, changes in economic and business conditions, government policies and regulations, demand conditions, competition, fluctuations in raw material and energy prices, availability of labour and other resources, technological developments, supply-chain disruptions, geopolitical developments and other factors beyond the Companys control.

The Company assumes no obligation to publicly update or revise any forward-looking statements, except as may be required under applicable laws and regulations.