Despite ongoing Middle East crisis creating supply chain disruptions and raw material cost pressures, India's packaging industry remains optimistic about FY27 growth prospects. Uflex Group expects FY27 to perform better than FY26, driven by improved utilisation of recently commissioned capacities, product mix optimisation and additional capacities expected to come online during FY27. However, Sumeet Kumar, Executive Vice President (Finance) at Uflex, acknowledged that it would be premature to provide a clear estimate of the impact on profitability for the current fiscal year as the situation continues to evolve. The crisis has disrupted availability and cost of key raw materials, with EPL Ltd. Managing Director Hemant Bakshi noting that more than 50% of their business comes from contractual customers where there is a clear agreement on pass-through. The ongoing geopolitical tensions involving Iran, the US, and Israel, which began more than three months ago, have disrupted the global economy through supply disruptions and heightened risks in the Strait of Hormuz, a key route for global crude oil shipments.
TCPL Packaging reported export disruptions in the fourth quarter due to shipping challenges linked to the West Asia conflict, with Executive Director Akshay Kanoria stating that shipments were affected by disruptions in West Asia. However, post-ceasefire improvements have seen more vessels sailing, though the situation remains highly uncertain. The company's domestic business continues to perform well, with volume growth outpacing broader consumer market trends in India, helping offset weakness in export markets. Kanoria expressed optimism about a recovery in exports if the situation normalises, adding that any rebound could be swift. On the domestic front, demand remains healthy, though rising fuel prices, rupee depreciation and broader inflationary pressures could affect consumption trends in coming quarters. As of now, the company expects to have a good year for the domestic business.
The Middle East crisis has created significant challenges for packaging companies through disrupted availability of key petrochemical-based inputs and increased logistics costs. EPL Ltd. Managing Director Hemant Bakshi confirmed that the crisis has affected both availability and cost of our key raw materials, with the tube-packaging company proactively navigating the situation while prioritising supply security for customers. Companies are implementing structured approaches to manage cost impacts, with EPL confident that they will be able to manage the cost impact through this crisis given their contractual customer agreements. The industry serves sectors such as FMCG, personal care, pharmaceuticals, and food products, making supply chain disruptions particularly impactful. Crude oil is not used directly in packaging, but it plays a key indirect role because it is the primary raw material for petrochemicals used in plastic-based packaging materials, with key inputs such as polyethylene, polypropylene, polyester films, and nylon being derived from crude oil.
Indian companies have consistently struggled to meet market expectations despite favorable global conditions. According to JM Financial Institutional Securities analysis reported by The Economic Times, Nifty50 earnings per share growth of only 3.4% was achieved in FY25 despite consensus expectations of 15% growth at the start of FY25. Similarly, actual earnings growth of only 4.5% was recorded in FY26 against expectations of 12-15% growth at the start of the fiscal year. Despite these challenges, packaging companies are maintaining optimism about stronger growth prospects in FY27 driven by domestic consumption, capacity expansion and improving product mix.
Despite economic challenges, Indian markets continue to trade at premium valuations. As reported by The Economic Times, foreign portfolio investors have sold Indian stocks worth ₹2.44 trillion so far in 2026, highlighting investor concerns about earnings visibility. The MSCI India index is down 7% in 2026 but trades at a one-year forward price-to-earnings of 20x, representing a premium to Asian peers. According to Yes Securities, India's earnings growth is not as attractive as AI-themed markets like South Korea, which are available at lower multiples.
