Genus Paper & Boards Ltd Management Discussions

The Management Discussion and Analysis Report pertaining to the financial condition and operational results contains forward-looking statements that are based on certain assumptions and expectations of future events. While the Company believes these assumptions and expectations to be reasonable, there can be no assurance that they will prove accurate or materialize as anticipated. Although the Management has considered various risk factors in its assessment, future uncertainties may arise beyond the scope of current perceptions or projections.

ECONOMY OF INDIA- AN OVERVIEW

Since last few years, Indias economic performance continues to demonstrate strength and momentum. The Country recorded a real GDP growth rate of approximately 6.4% in FY 2024 25, as per the First Advance Estimates released by the National Statistics Office (NSO). While this marks a moderation from 8.2% growth seen in the previous fiscal year, India remains the fastest-growing major economy globally, outperforming peers amid persistent global uncertainties.

Forecasts from one of the leading global financial institutions and the IMF Project Indias growth to remain robust, with estimates ranging between

6.4% and 6.7% for FY 2025–26. This strength is supported by a buoyant services sector, improved agricultural output and steady private investment. Globally, economic recovery remains uneven. The World Bank anticipates global growth to slow to 2.3% in 2025, citing trade tensions, policy uncertainty, and geopolitical risks as key headwinds. While major election cycles and anticipated rate cuts in advanced economies may offer some relief, challenges such as the ongoing Russia Ukraine conflict, sluggish consumption in the US and Europe, and inflationary pressures continue to weigh on sentiment.

India, however, is expected to benefit from improved capital inflows, a rebound in exports and policy-driven reforms. Inflation concerns persist, particularly around energy and food prices, but are projected to ease in the latter half of the next fiscal year, assuming no major external shocks.

PREDOMINANCE OF PULP AND PAPER INDUSTRY IN INDIA

Indias paper industry is one of the Countrys oldest and the most promising manufacturing sectors, with roots tracing back to the era of handcrafted manuscripts. Today, it plays a vital role in supporting the National Economy, further contributing to promote employment, education, improve productivity and environmental sustainability, therefore building new opportunities in Indian Market.

The pulp and paper industry in India is predominantly driven by the packaging segment, which accounts for over half of the sectors revenue. Paper products serve a wide range of applications—from writing and printing to packaging, tissue papers, hygiene products and disposable items such as paper cups, face wipes, etc.

Pulp, the fibrous base material derived from wood, agro-residues, or recycled fiber, is the foundation of paper production. Paper is a thin material which is basically derived from pulp. Indias paper and pulp market is amongst the fastest growing globally, fueled by rising demand for packaging, writing and printing paper (WPP), and specialty grades.

GROWTH, OPPORTUNITIES AND THREATS

The paper industry in India presents a mix of both opportunities and challenges, whereas growth is majorly fueled by increasing demand, government initiatives and technological advancements, particularly in sustainable products and packaging. However, rising raw material costs, supply chain issues and market competition pose certain threats. Adapting to digital disruption and focusing on sustainability are crucial for long-term success. Additionally, the industrys environmental impact and sustainability concerns pose significant adopt eco-friendly practices and reduce their carbon footprint.

The main opportunities for paper industry in India can be understood as below:

• Growing Domestic Demand:

Increasing literacy rate and expanding e-commerce are driving demand for paper products like educational materials, packaging and hygiene products.

• Export Potential:

India can leverage its growing paper production capacity to become a significant particularly in the specialty paper and packaging sectors.

• Government Initiatives:

Supportive government policies and incentives for sustainable practices and technological advancements can further boost the industry.

• Technological Advancements:

Investing in advanced machinery, automation and digital solutions can improve efficiency,

• Specialty Papers:

The demand for specialty papers, like those used in packaging, labeling and functional applications, presents significant opportunities.

• Sustainability Focus:

Growing consumer awareness and preference for sustainable products are creating opportunities for eco-friendly paper production and packaging solutions. Some of the threats which are faced by paper industry in India are enumerated under:

• Rising Raw Material Costs:

Fluctuations in the cost of raw materials like wood pulp and recycled paper can impact profitability.

• Supply Chain Disruptions:

Challenges in sourcing raw materials and distributing finished products can disrupt production and increase costs.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT (Contd.)

• Market Fragmentation:

The Indian paper market is fragmented, with numerous small and medium-sized players, making it difficult to achieve economies of scale and compete with larger international players.

• Digital Disruption:

The increasing shift towards digital media and online content poses a long-term threat to the demand for traditional paper products.

• Competition:

The Indian paper industry faces competition from imports, particularly from countries with lower production costs.

• Environmental Concerns:

Increasing focus on sustainability and environmental regulations can increase compliance costs and limit production capacity for some players.

• Skilled Labor Shortage:

Difficulty in findings killed labor in certain areas of paper production can hinder growth and innovation.

OUTLOOK

In todays world, the demand for paper, as a packaging material is prominently linked to the prevalent economic conditions. The packaging industry in India has played a significant role in recent years in advancing innovation and range of manufacturing sectors, including the FMCG and agricultural industries. This industry continues to have a reasonably moderate prospect in India during next few years as the demand of paper and paper products grow in line with the GDP growth. The expansion of the middle class, enhancements made to the supply chain, and the emergence of e-commerce in recent times are the primary factors responsible for the growth of the packaging industry in India. The nations increasing focus on food safety and quality is projected to fuel the food processing sector, which will increase demand for packaging.

While India is a significant producer of paper products, it also imports certain types market demands and quality requirements. This includes specialty papers, high-grade paperboard, and newsprint varieties not readily available domestically.

RISKS AND CONCERNS

The Company faces a variety of risks across both internal operations and external environments. To proactively manage and mitigate these risks, a structured framework of systems, procedures and review mechanisms has been implemented. The Indian paper industry faces risks from raw material scarcity, high production costs, and intense competition from imports.

As part of its comprehensive risk management policy, the Company follows an integrated approach to risk assessment and mitigation, ensuring continued vigilance and preparedness.

Given that the paper industry is classified among the highly polluting sectors, the Company remains committed to environmental responsibility.

Both of its manufacturing units operate in full compliance with the zero-discharge policy and consistently adhere to the provisions of the Environment Protection Act, 1986 and other applicable environmental regulations.

COMPANYS PERFORMANCE-PRESENT AND FUTURE

The Company has taken proactive measures to ensure the uninterrupted continuation of operations, with a strategic focus on preparedness for unforeseen circumstances. It has implemented comprehensive cost control initiatives across the organization, aimed primarily at preserving liquidity. Furthermore, the Company successfully fulfilled its business commitments and financial obligations during the previous financial

In addition, it has expanded its product portfolio by diversifying into new segments such as writing and printing paper, whiteboard, and cupboard board, alongside its existing focus on packaging and duplex board—positioning itself for broader market traction and sustainable growth.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

(Rs. in Lakh)

Financial Highlights	2024-25
Gross Sales	84,914.58
Net Sales	84,914.58
Other Income	163.42
Profit before Tax (PBT)	819.32
Profit afterTax (PAT)	807.94
EPS (Basic & Diluted) (in Rs.)	0.31

The Company posted Net sales of Rs. 84,914.58 Lakh and the Net profit after tax stands atRs. 807.94 Lakh.

Ratios:

The Company has maintained a healthy capital structure as is evident from its debt to equity ratio which is as follows:

S. No.	Particulars	March 31, 2025	March 31, 2024
1	Debtors Turnover	10.51	10.55
2	Inventory Turnover	4.89	4.22

 

3	Interest Coverage Ratio	1.97	2.08
4	Current Ratio	1.14	1.09
5	Debt Equity Ratio	0.77	0.68
6	Operating Profit Margin (%)	0.01%	0.87%
7	Net Profit Margin (%)	0.01%	0.87%
8	Return on Net Worth	1.68%	1.24%

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has put in place strong internal control system to ensure its assets are protected and all transactions are properly approved, recorded and reported. Each year begins with a well-structured business plan, followed by detailed quarterly budgets for revenue and capital. These budgets are used to regularly compare actual performance, and any differences are promptly addressed.

The internal control system is backed by regular reviews from management and independent chartered accountants, who assess how well these controls are working. Their reviews help confirm that the systems in place are effective and reliable.

Internal audits cover various operational processes and ensure that policies and procedures are being followed, important systems are functioning properly, and company assets are safe. Audit reports are submitted to the Audit Committee, which reviews the internal control system and discusses audit findings and recommendations. Additionally, the Statutory Auditors regularly engage with the Audit Committee to share their insights and track progress on improvements.

HUMAN RESOURCES

The Company is supported by a dedicated, well-established and highly satisfied workforce. Recognizing that human capital is one of its most valuable assets, the Company consistently endeavors to attract and retain top-tier professional and technical talent. It places strong emphasis on strategic human resource management and skill development, firmly believing that a capable and motivated workforce is the cornerstone of operational excellence and sustainable business growth.

These people-centric practices have enabled the Company to maintain an attrition rate below the industry average. The management follows a process-driven approach, investing in regular training and capacity-building initiatives through succession planning, on-the-job learning and focused workshops. The progress achieved during the year is a direct reflection of the collective commitment and hard work of the entire team.

Industrial relations remained harmonious throughout the year. Safety, welfare and employee development across all levels continue to be areas of key focus, reinforcing the Companys commitment to building a resilient and future-ready organization.

CAUTIONARY STATEMENT

Statements in this "Management Discussion and Analysis" are describing the Companys "forward looking statements" within the meaning of applicable 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, raw material availability and prices, cyclical demand, changes in Government regulations, environmental laws, tax regimes, economic developments within India and abroad and other factors such as litigation, industrial relations and other unforeseen events. The Company assumes no responsibility in respect of forward looking statements made herein which may undergo changes in future on the basis of subsequent developments, information or events.