Over the past 11 years, the monocarton packaging industry in India has undergone a significant transformation. What started as a steady growth journey backed by increasing demand across consumer segments has now evolved into a highly competitive and strategically driven sector. Companies – both large and mid-sized – have not only expanded revenues but also invested in technology, automation, and sustainable packaging formats. Yet, the road hasn’t been smooth. Profitability challenges, rising input costs, pandemic-induced disruptions, and hyper-competition have tested the industry’s resilience. Here’s an in-depth look at how the sector has evolved between FY 2013-14 and FY 2023-24.

Strong revenue growth, broad-based participation

Between FY 2013-14 and FY 2023-24, the combined revenue of 25 leading monocarton packaging companies in India grew from Rs 2,430 crore to over Rs 7,800 crore, clocking a healthy compound annual growth rate of around 12.36%. This growth was not driven by a few dominant players alone. While major companies like Parksons Packaging and TCPL maintained a solid upward trajectory, several mid-sized firms, such as Pragati Pack, also played a critical role, reflecting that the momentum was spread across the spectrum.

Profit margins: a different story

Despite robust revenue growth, the industry has struggled to significantly improve profitability. Over the past 11 years, the net profit margins of these 25 companies have remained largely stagnant, hovering around 3.9% in FY 2013-14 and inching up to just 4.1% by FY 2023-24. The best performance came in FY 2022-23, when margins peaked at 5.7%, only to slide back to 4.1% the following year.

The decline was not due to lack of business, but rather a cocktail of operational and market pressures – fluctuating raw material prices, rising wages, and a marketplace where margins are razor-thin due to intense competition.

Pandemic impact – mild but measurable

Like most industries, the monocarton packaging sector wasn’t immune to the effects of COVID-19. FY 2020-21 saw a slowdown, but interestingly, revenues still grew by 4%, showing how essential packaging proved to be during uncertain times. While some companies struggled, others that served critical sectors such as food, healthcare, and hygiene saw strong demand. Several companies leveraged their presence in essential packaging categories to thrive during this phase.

However, profitability took a hit during the same year, driven by heightened competition, supply chain disruptions, and inflation in input costs.

Bounce-back and operational recalibration

The year after the pandemic (FY 2022-23) saw a dramatic rebound. The total revenue of the 25 companies surged by 25% to reach Rs 7,850 crore, while profits hit an all-time high of Rs 448 crore. This sharp turnaround was not just a result of market recovery but also of companies adapting fast – adopting leaner operating models, digitizing workflows, and investing in process automation.

Mid-tier companies, in particular, emerged sharper and more focused by cutting waste, optimizing plant productivity, and recalibrating their cost structures.

Recent slowdown and cost pressures

However, the momentum couldn’t be sustained into FY 2023-24. Revenues dipped slightly to Rs 7,800 crore while profits dropped significantly to Rs 320 crore. The fall in profit, despite relatively flat raw material prices, pointed to deeper structural concerns.

Labor costs have risen from 9% to over 11% of operating revenue over the last decade. With talent becoming harder to retain and wage inflation mounting, many firms found themselves stretched thin. Furthermore, hyper-competition in the market has left little room for pricing flexibility.

Understanding the cost structure

Raw materials continue to account for more than half of the overall cost base. While paperboard and other input prices have remained relatively stable in recent years, the industry remains vulnerable to sudden spikes. Local converters frequently raise concerns over high board costs, whereas domestic mills highlight the threat of cheaper imports and material dumping by suppliers from other Asian countries.

Labor cost escalation has also emerged as a serious concern – driven by not just wage hikes, but also the need to retain technically trained manpower, especially in printing, quality control, and finishing operations.

Technology and expansion – a strategic pivot

In response to changing market demands, several companies have doubled down on capacity expansion and technology upgrades. Companies like Pragati Pack and Sain Packaging have made notable investments in longer-format offset printing presses, inline finishing units, and automation tools to enhance speed, consistency, and quality.

These moves are not just aimed at improving efficiency but also at capturing more business from high-growth segments like personal care, pharmaceuticals, and premium FMCG categories where packaging plays a key branding role.

The sustainability shift – paperizing the future

As environmental awareness grows among brands and consumers alike, monocarton packaging has started to benefit from the wider push toward paper-based and recyclable packaging formats. Many startups and D2C brands are choosing paperboard-based packaging over flexible plastic options for their eco-friendly appeal and premium feel.

There’s also growing interest in developing barrier-coated paper and paperboard solutions that can replace plastic laminates while offering the same protection, especially in dry food, confectionery, and personal care categories. While the shift is gradual, it marks a meaningful step toward making paper-based cartons the first choice for sustainable retail packaging.

Realignment for the next growth phase

The Indian monocarton packaging industry has matured into a complex, competitive, and innovation-driven sector. While revenue growth remains on track, sustaining profitability is the next big hurdle. Rising labor costs, limited pricing power, and intense competition are forcing players to constantly innovate and optimize.

Yet, there’s reason for optimism. With sustained investment in automation, digitization, and sustainable materials, the sector is well-positioned to serve the evolving needs of brands across e-commerce, healthcare, food, and premium retail. What’s clear is that the future will favor players who can combine cost discipline with agility, technology with sustainability, and capacity with creativity.