Roshan Packages Limited (PSX: RPL), a leading manufacturer of corrugated and flexible packaging material, has navigated a volatile operating environment over recent years, balancing growth ambitions with financial discipline. Incorporated in 2002 as a private limited company and converted into a public limited entity in 2016, the company operates across corrugation, flexible packaging, and partially integrated paper manufacturing, serving a diversified customer base nationwide.
Between 2019 and 2024, Roshan Packages experienced significant fluctuations in performance, reflecting both macroeconomic shifts and industry-specific dynamics. Early in the period, the company delivered strong topline growth, with revenue rising sharply on the back of volume expansion and improved capacity utilization at its corrugation and flexible plants. Although operating margins improved during this phase, elevated finance costs and taxation pressures resulted in net losses, albeit sharply reduced compared to earlier years.
The onset of the COVID-19 pandemic disrupted demand, leading to a temporary decline in revenues and volumes. However, aggressive cost rationalisation allowed Roshan Packages to significantly improve margins. Enhanced efficiency measures and tighter controls helped the company return to profitability, marking a turning point in its earnings trajectory. This recovery accelerated in the immediate post-COVID period as demand from e-commerce, food delivery, and consumer goods surged, driving a strong rebound in revenues and margins. Lower interest rates during this phase also eased finance costs, supporting net profitability.
Subsequent years saw revenue growth continue, supported by higher dispatch volumes and improved pricing. However, the operating environment became increasingly challenging as rupee depreciation, rising energy tariffs, and higher imported raw material costs began to weigh on margins. Despite healthy topline growth, profitability came under pressure, with higher finance costs eroding net earnings. As monetary tightening intensified and inflationary pressures persisted, the company adopted a more selective customer strategy, focusing on top-tier clients. While this approach helped protect margins, it resulted in lower volumes and softer revenue growth.
By FY24, Roshan Packages demonstrated improved financial discipline. Revenue growth slowed, but profitability recovered as exchange losses declined, other income strengthened, and deleveraging efforts reduced finance costs. Operating margins improved, gearing fell sharply, and earnings showed a meaningful recovery, highlighting management’s focus on balance sheet strength and operational efficiency.
In FY25, the company delivered a mixed but stabilising performance amid subdued demand and limited pricing flexibility. Net revenue declined year-on-year to Rs9.66 billion, reflecting softer volumes across both corrugated and flexible packaging segments as customers remained cautious in a slow economic environment. Despite this contraction, revenue resilience was notable given persistent inflation, indicating that demand softness rather than aggressive competition drove the decline.
Gross margins edged lower due to higher input costs, particularly kraft paper and polymer-linked materials, which could not be fully passed on to customers. Lower capacity utilisation further weighed on cost absorption. Operating expenses increased, driven by higher administrative and employee costs, as well as ongoing investments in compliance, quality, and sustainability. Nevertheless, disciplined control over selling and distribution expenses helped contain the overall impact on operating profitability.
At the bottom line, profitability stabilised. Although profit before tax declined due to weaker operating earnings, a sharp reduction in finance costs supported net results. Lower leverage, easing interest rates, and a more normalised tax charge helped cushion the decline, allowing the company to remain profitable with earnings per share of Rs0.99. While earnings fell compared to FY24, the company avoided the sharp volatility seen in earlier cycles.
Operationally, Roshan Packages continues to benefit from a diversified manufacturing footprint, including corrugated plants in Lahore and Karachi, flexible and co-extruded film facilities in Lahore, and a paper mill subsidiary that provides partial backward integration. This structure enhances supply reliability, cost control, and customer reach. The company has also intensified its focus on sustainability, expanding solar energy usage, strengthening FSC Chain of Custody compliance, and increasing the use of recycled materials. These initiatives support long-term cost optimisation and align the company with evolving customer and regulatory expectations.
Looking ahead, Roshan Packages’ outlook depends on a gradual recovery in domestic demand and improved capacity utilisation. While near-term pricing power may remain constrained, any volume normalisation could support margin recovery through better fixed-cost absorption. With lower finance costs, a disciplined balance sheet, and continued investment in efficiency and sustainability, the company appears positioned for a more stable earnings trajectory as market conditions improve. Overall, FY25 represents a year of consolidation, laying the groundwork for potential recovery in the medium term.
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