Packaging Growth Dents Revenue, Yet Profitability Thrives: A Story of Resilience and Operational Excellence

Growth:
• Packaging business performance was negatively impacted by excess capacity and reduced demand in Europe stemming from the Russia-Ukraine conflict. The combined effects of excess capacity, rising energy costs, EMI costs, and interest rates led to a decline in consumption.
• Revenue for FY23 decreased by 2% compared to the previous year due to a global economic slowdown triggered by macroeconomic disturbances (Russia-Ukraine conflict) and interest rate hikes. Despite the challenges, the company maintained a consistent 5-year CAGR of 9%.
Profitability:
• Excess capacity and aggressive rate hikes by central banks have caused a decline in demand for packaging films as consumers reduce spending to cover higher energy bills and mortgage EMIs. This decline in demand has occurred simultaneously with the entry of new capacity into the market.
• Despite these challenges, Net Profits grew 8% in FY23 due to increased profitability. Operating Expenses fell 6% year-over-year in FY23.
• The year-on-year growth of PAT (ProfitAfter Tax) was 8%, maintaining a 5-year CAGR (Compound Annual Growth Rate) of 12%.