Danube Industries Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian IT hardware and electronics distribution market has witnessed sustained growth over the past decade, supported by increased digitization, growth in the service sector, work-from- home adoption, and government initiatives such as "Digital India” and "Make in India.”

The demand for laptops, desktop computers, and accessories like hard disks, SSDs, keyboards, and mouse devices has remained steady, with spikes in sales during corporate procurement cycles and festive seasons. The segment benefits from rapid technological advancements, but it also faces challenges from short product life cycles and high competition.

ABOUT THE COMPANY

Danube Industries Limited (DANUBE) has become one of the fastest growing IT hardware suppliers specializes in the area of Laptops, Gaming, Home Entertainment, Corporate, and School PCs and equipment. Our dedication to providing our customers the most detailed pre-sale product information, and unbeaten after-sales services with our extensive product knowledge, sets us apart from the competitors in the market. Whatever your requirements, buying directly from DANUBE enables you to obtain a higher specified PC and components - for less. All our systems are built to order, delivering the latest components, directly tailored to your needs.

The new website is packed with great information and ideas on leading-edge technologies right for you. You will find a fantastic range of great value offers on every component and part required for your next PC upgrades. Online orders are available to be picked up from our warehouse in Ahmedabad, or book a consultation with our staff to troubleshoot your old PC - or discuss building the PC of your dreams! Our friendly staff is also available to answer all your PC related questions via LiveChat and email.

We want to make your shopping experience as easy as possible, with a credit card, deposit, or cheque/money order payment and complete online order management, real-time help, and shipment tracking available online.

OPPORTUNITIES AND THREATS

Opportunities:

• Rising demand from SMEs, educational institutions, and government departments.

• Increasing adoption of cloud computing, remote working, and IT infrastructure upgrades.

• Expanding e-commerce platforms driving B2C and B2B sales.

• Potential to offer bundled IT solutions, warranty extensions, and AMC (Annual Maintenance Contracts).

Threats:

• Intense price competition from both organized and unorganized sector traders.

• High dependency on imports exposing the business to forex fluctuations.

• Rapid technological change leading to product obsolescence.

• Supply chain disruptions due to geopolitical events or natural calamities.

OUTLOOK:

The profit margins in the industry are under pressure. However, the Company has taken remedial measures. The Company is confident to meet the challenges with its strength in marketing network, its strategic planning, improvement and cost reduction exercise. With gradual acceptance of the GST and other measures, the confidence in the market is growing and the Company is poised to take advantage of improving market conditions.

RISK AND CONCERN

Apart from the high competitiveness in the business of trading of goods, the industry is facing some critical issues and their resultant effect on the long-term perceptive, there are various factors which may pose a challenge for the Company in the sector of the Company. Further, Foreign exchange volatility impacting cost of imported products and Overstocking risk due to fastchanging technology and models will also impact the company business.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal control procedures commensurate with the size and business operations of the company and nature of its business. The internal control system is continuously reviewed by the management to ensure orderly and efficient conduct of business. The system emphasis on the functions of purchase, sales, finance etc. to adhere to the well- defined corporate policies.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company has recorded total sales of Rs. 10966.37 Lakhs as compared to Rs. 8703.38 Lakhs in the previous financial year. The Profit before tax for the period under review is Rs. 166.40 Lakhs as compared to Rs. 136.06 Lakhs in the previous financial year. The Profit after tax during the year under review is Rs. 121.73 Lakhs as compared to Rs. 97.26 Lakhs in the previous financial year.

HUMAN RESOURCES

The Company continued to have cordial and harmonious relations with its employees during the year under review. The Company is taking effective steps for the developments of human resources in various fronts. As on March 31, 2025, the Company has 11 employees on payroll of the Company.

Financial Ratios

Particulars	As at 31-32025	As at 31-32024	% Variance	Reason for Variance
Current Ratio	2.05	1.80	14.20	-
Debt-Equity Ratio	0.39	0.60	-34.91	Current year, Company has issued new Preferential Equity Shares
Debt Service Coverage Ratio	2.43	2.18	11.56	-
Return on equity ratio	4.81%	6.12%	-1.31	-
Inventory Turnover Ratio	6.43	8.91	-27.84	Average Inventory level has been increase during the year
Trade Receivables Turnover Ratio	4.38	4.12	6.36	-
Trade payables Turnover Ratio	9.82	7.23	35.87	Average Inventory level has been increase during the year
Net Capital Turnover Ratio	4.95	8.33	-40.52	Average Inventory level has been increase during the year
Net Profit Ratio	1.11	1.12	-0.01	-
Return on Capital Employed	6.05	9.80	-3.75	-

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report containing the objectives, expectations or predictions of the company may be forward-looking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, Environment regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.