Cellecor Gadgets Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS:

Global Overview of Consumer Electronics Industry:

The global consumer electronics industry is projected to surpass USD 1.1 trillion by 2025, growing at a 6-7% CAGR, driven by advancements in smart and connected devices, AI-powered appliances, and IoT integration. Smart TVs, wearables, and voice-enabled home gadgets are now mainstream, with global smart TV sales expected to cross 250 million units by 2025. Sustainability is a key focus, with brands adopting energy-efficient designs, recyclable materials, and e-waste management initiatives. Premium technologies such as QLED/OLED panels, Dolby Atmos sound, and 8K resolution are reshaping consumer experiences, while omnichannel retail and D2C platforms are driving over 60% of global electronics purchases. Emerging markets, especially Asia-Pacific and Africa, are witnessing double-digit growth due to rising incomes and digital adoption. In line with these global trends, Cellecor Gadgets Limited is strengthening its presence with QLED Smart TVs, AI-enabled home appliances, and a diverse portfolio of 600+ SKUs, maintaining international quality standards under its Make in India strategy.

Indian Consumer Electronics Industry: Overview

The Indian consumer electronics industry is projected to touch USD 45 billion by 2025, growing at a CAGR of 9-10%, driven by rising disposable incomes, digital penetration, and strong demand for smart and connected home solutions. Tier 2 and Tier 3 cities are emerging as major growth drivers, accounting for nearly 55% of sales in categories like TVs and home appliances. Government initiatives such as Make in India and PLI schemes are boosting local manufacturing and reducing import dependency. Smart TVs, air conditioners, and wearables are among the fastest-growing segments, while e-commerce and organized retail contribute significantly to distribution. In this dynamic landscape, Cellecor Gadgets Limited has built a strong presence across 28 states with 65,000+ retail points, 1,800+ distributors, and 8 exclusive stores, offering over 600 SKUs that blend affordability with advanced features, catering to both urban and Bharat 2.0 markets.

2. BUSINESS OVERVIEW

Our Company is engaged in the procurement, branding, and distribution of Smart TVs, home & kitchen appliances, large appliances, smartphones, wearables, soundbars, and Mobile accessories. We sell our products under our flagship brand, i.e., CELLECOR.

Over the years, we have been able to build our presence in India by having 1500+ service centres, 1800+ Distributor, and our products are also present at 65,000+ retail store with 600+ wide range of products and 100 million users Pan India is purchasing a wide range of consumer products at affordable prices through our dealer channels (online as well as offline).

While the Companys proprietary brand continues to be the primary growth driver, our strategic model is not limited to a pure-play brand approach and accordingly we also undertake selective trading and distribution of other brands products, a complementary business vertical that enhances our ability to respond to emerging market trends and regional demand patterns, so far this strategy enabled us to diversify our revenue streams, improve inventory turnover, and sharpen our go-to-market agility—thereby aligning operational execution with evolving consumer dynamics and competitive benchmarks.

Our Mission:

At Cellecor Gadgets Ltd., our mission is to redefine accessibility to technology by delivering innovative, value-driven, and Made-in-India solutions that enhance everyday living. In FY24-25, we have strengthened this mission through launches in premium categories like QLED Smart TVs, fully automatic washing machines, and small kitchen appliances, while maintaining affordability for Bharat 2.0 markets. We are committed to scalable, sustainable growth, powered by advanced R&D, robust local manufacturing partnerships, and a team of passionate professionals who embody ownership, integrity, and innovation.

Our Pillars of Excellence:

Process Excellence In

1. Innovation: We invest heavily in R&D and product development, with over 600 SKUs across categories, introducing AI-enabled appliances, advanced QLED panels, and 5G smartphones to stay ahead of market trends.

2. Quality: Stringent quality checks, collaborations with Dixon Technologies and PG Electroplast, and adherence to global standards ensure every product meets durability and performance benchmarks.

3. Customer Satisfaction: With 65,000+ retail

touchpoints, 1,800 distributors, 11 warehouses, and 8 exclusive brand stores, we guarantee superior service, quick after-sales support, and exceptional buying experiences.

4. Design Excellence: Our products combine aesthetic appeal and ergonomic design, ensuring both beauty and functionality, with a special focus on premium entertainment and lifestyle categories.

5. Competitive Pricing: Leveraging strong procurement networks and local assembly, we deliver high-value products at accessible price points, even in premium categories like QLED Smart TVs.

6. Market Adaptability: With our expansion into small kitchen appliances, laptops, and wearables, we are continuously adapting to consumer trends and digital lifestyle needs.

7. Technological Advancement: We are investing in AI, IoT, and sustainable tech, while gearing up for semiconductor and smart component manufacturing in India through strategic collaborations.

Operational Excellence Through

1. New Corporate Office: In FY24-25, we inaugurated our new corporate office in New Delhi, designed to foster creativity, collaboration, and employee wellbeing.

2. New Warehouse: A state-of-the-art warehouse facility has been added to our logistics network, expanding our capacity to 11 strategically located warehouses for faster delivery.

3. Supply Chain Optimization: We have enhanced

inventory visibility through predictive analytics and real-time tracking, reducing stock-out risks and ensuring quick replenishment.

4. Data-Driven Decision Making: Real-time monitoring and performance analytics guide our operations, enabling cost efficiency and better forecasting.

5. Skilled Workforce Expansion: We hired over 150 experienced professionals across R&D, corporate sales, and marketing to strengthen execution.

6. Strong Governance: Our competent board ensures transparency and alignment with long-term goals while complying with all statutory norms.

7. Inclusive Workplace: Initiatives like the Pink Leave policy and robust POSH frameworks reflect our commitment to a diverse, employee-friendly environment.

8. Regular Reviews: Monthly operational reviews and weekly process audits ensure alignment with KPIs and business targets.

Governance Excellence Through

1. Competent Board of Directors

2. Engage actively with stakeholders to build trust and address concerns.

3. Implement strong oversight and accountability mechanisms.

4. Align governance practices with strategic objectives and goals.

5. Promote diversity and inclusion within governance structures.

6. Extend ethical principles to supply chain management.

7. Compliance with stringent statutory norms.

8. POSH Committee to ensure fair and diverse workplace.

9. Annual Operation Planning meets and Monthly Engagement Reviews.

10. Weekly Internal Reviews with Process Managers and Team Leaders.

3. PRODUCT PORTFOLIO

Our product categories can be classified into the following major categories.

1) Home Appliances: We currently offer four appliances in this category that are rust-free, made of the latest technology, and come in various models and capacities.

a) QLED Smart TVs: Our TVs come with the latest audio (Dolby Audio) and visual technologies (4K Ultra HD). Moreover, our smart TVs come in smaller (24 inches)to bigger sizes (65 inches

b) Air Conditioners: We offer air conditioners with smart technologies like auto clean mode, 4-1 functionalities, power saving mode, and many such features. Our air conditioners come in three different capacities i.e. 1 Ton, 1.4 Ton, and 1.5 Ton.

c) Mixer Grinder and Juicer Mixer Grinder: Cellecor offers four different capacity mixer grinders, along with one juicer mixer grinder. All the mixer grinders are well crafted with the latest technology and powerful motors to meet every households needs.

d) Washing Machines: Available in semi-automatic and fully automatic models, our washing machines ensure powerful cleaning with water and energy efficiency. Designed to handle different load capacities, they make laundry easier for every household.

e) Refrigerators: Designed with smart cooling

technology, our refrigerators keep food fresh longer and come in spacious single and double-door options. With stylish designs and energy efficiency, they perfectly fit modern kitchens.

f) Geysers and Heaters: With quick heating and energy-saving features, our geysers and heaters deliver instant warmth and comfort during winters. Safety features and compact designs make them reliable for everyday use.

g) Air Coolers: High air delivery, large tank capacity, and low power consumption make our air coolers the perfect choice for summer cooling. Easy mobility and durable build ensure long-lasting performance.

2) TWS: Cellecor offers TWS earbuds with more than 15 variants and all of them are specially crafted with precision and technology. It exhibits Noise Cancellation, Environmental Noise Cancellation, auto-connect, long playtime, and water and dust resistance.

3) Smartwatches: We offer a cluster of watches that are futureready, and come in different colors, different strap materials, styles, and health monitoring configurations.

4) Speakers and Soundbars: Our company offers more than five different kinds of speakers that come with extended playtime and are perfect for house parties, Karaoke nights, and many more such occasions.

5) Mobile Phones and Mobile Accessories: Cellecor offers feature phones with longlasting batteries. The company also provides mobile accessories like power banks and wired earphones.

6) Neckbands: We offer cluster of neckbands with long playtime and smart technologies like high bass, water resistance, and many other features.

7) Headphones: The company offers headphones with extended playtime and smart technologies like high bass, water resistance, foldable and portable, and many other features. And one of the headphones comes with light, which is perfect for gaming.

8) Laptops: Our laptops are equipped with the latest processors, high-speed RAM, and long-lasting batteries to deliver seamless performance. Available in multiple screen sizes and configurations, they are perfect for work, study, and entertainment. With sleek designs and lightweight build, they combine power with portability.

4. OUR COMPANYS SWOT ANALYSIS IS:

At Cellecor Gadgets Limited, we continue to focus on cost optimization, premium product innovation, and robust distribution networks to ensure value for money and sustainable growth. With a presence in 28 states, 2 Union Territories, 65,000+ retail points, 1,800+ distributors, and 11 warehouses, we are positioned to meet both urban and rural consumer needs. Our strategy emphasizes Make in India, strong R&D investment, and expanding categories like QLED TVs, Fully Automatic Washing Machines, and Small Kitchen Appliances.

STRENGTHS	WEAKNESSES
• Innovative Product Portfolio: Expanded to 600+ SKUs, including premium Air Conditioners, Coolers, Geysers, Refrigerators, Heaters, Smartphones, and Laptops, offering a wide variety of consumer electronics and appliances.	• High Dependence on Key Management: Strategic decisions are highly centralized with top leadership.
	• Supplier Dependency: Reliance on third-party suppliers for certain components poses potential supply chain risks.
• Operational Efficiency: Adoption of predictive analytics, inventory automation, and streamlined logistics to maintain cost competitiveness.	• Focus on Affordable Pricing: Competitive pricing strategy may limit margins in premium segments.
	• Rapid Scaling Challenges: Expansion to multiple product categories may require higher capital and resource allocation.
• Strong R&D Capabilities: Collaboration with Shenzhen H&T Intelligent Control and Jia Zha Geye Technology
• Brand Recognition: Aggressive marketing campaigns with celebrity ambassador like Kareena Kapoor Khan have enhanced national visibility.
• Efficient Supply Chain: 11 warehouses and partnerships with Dixon Technologies and PG Electroplast, ensure reliable production and delivery.
• Skilled Workforce: Hiring of 150+ senior professionals in FY24-25 to strengthen corporate, R&D, and sales functions.
• Pan-India Presence: Extensive offline and e-commerce networks, with 8 exclusive brand stores, boosting customer touchpoints.
OPPORTUNITIES	THREATS
• Expansion into New Categories: Launch of small kitchen appliances, laptops, and 5G smartphones is creating new revenue streams.	• Intense Competition: Established global players and aggressive pricing by new entrants create margin pressures.
• Rising Demand in Tier 2 & 3 Cities: Bharat 2.0 markets present significant opportunities due to urbanization and increasing purchasing power.	• Economic Fluctuations: Slowdowns in consumer spending due to economic instability can affect sales.
• Strategic Alliances: Partnerships with organized retail chains like Sangeetha Mobiles and PhoneWale Ltd. to increase visibility.	• Regulatory Challenges: Navigating global compliance norms and tariffs for component imports.
• Emerging Technologies: Leveraging AI, IoT, and smart automation to create differentiated, next- gen products.	• Technological Disruption: Rapid technology cycles require constant innovation to stay relevant.

5. OUTLOOK

At Cellecor Gadgets Ltd., FY 2024-25 marks a transformative phase as we continue to scale rapidly, focusing on high- margin categories such as home appliances, wearables, QLED Smart TVs, and small kitchen appliances. We are leveraging our Make in India strategy, expanding our offline and online footprint, and investing in next-gen technologies (AI, loT, and semiconductors) to stay ahead of the curve. With 105% YoY revenue growth in FY25 (^1,025.95 crore) and strong consumer demand, we are targeting ^1,500 crore revenue and ^50 crore PAT in FY26.

Key Strategic Priorities for FY26 and Beyond:

1. Developing Strong Value Propositions:

We are designing affordable yet premium products like QLED TVs, fully automatic washing machines, and small appliances to meet the evolving expectations of modern Indian consumers.

2. Reinventing Service Lines:

Our focus is on customer-centric solutions, aftersales support, and D2C engagement, ensuring a superior experience through both online and offline platforms.

3. Workforce Recalibration and Expertise:

We expanded our team by 150+ professionals in FY25, with a focus on R&D, corporate sales, and e-commerce leadership. Continuous retraining programs ensure a tech-first and agile workforce.

4. Strengthening Retail and Warehousing:

We are expanding our exclusive brand stores beyond 8 outlets and enhancing our warehousing capacity (11 hubs) to improve last-mile delivery and product availability.

6. RISK AND CONCERNS

At Cellecor Gadgets Limited, we recognize that managing risks effectively is critical for long-term sustainability and success in the rapidly evolving consumer electronics industry. We proactively identify potential risks and implement measures to minimize their impact while capitalizing on growth opportunities.

1. Competition Risk:

The consumer electronics sector is marked by

intense competition from both global and domestic brands. With new entrants focusing on aggressive pricing and premium technology, our competitive edge lies in continuous innovation, AI-enabled products, and an expanding premium portfolio (QLED Smart TVs, smartwatches, and appliances). We consistently monitor market trends and invest in R&D to stay ahead.

2. Key People Risk:

Our success is driven by a highly skilled workforce. Retaining talent in a competitive market can be challenging. We address this by offering competitive benefits, growth opportunities, and a supportive culture, reinforced by initiatives like the "Pink Leave" policy for women employees and ongoing skill development programs.

3. Business Disruption or IT System Failure Risk:

IT infrastructure disruptions or cyber threats could affect operations. We have robust disaster recovery plans, cybersecurity protocols, and data protection policies to ensure business continuity.

4. Legal and Regulatory Risk:

Evolving regulations in taxation, import duties, product standards, and e-waste management pose potential risks. Our compliance team ensures adherence to all statutory and environmental guidelines while aligning with Make in India and sustainability initiatives.

5. Technological Risk:

Rapid advancements in electronics, including AI, loT, and 5G technologies, demand quick adaptation. We mitigate this risk by investing in in-house R&D, forming technology alliances (e.g., Shenzhen H&T), and regularly upgrading our product range.

6. Supply Chain Risk:

Global supply chain disruptions, especially in semiconductor components, could delay production. We counter this with multi-supplier partnerships, safety stock management, and local manufacturing tie-ups with OEMs like Dixon Technologies and PG Electroplast.

7. Economic and Market Risks:

Fluctuations in raw material prices, currency volatility, and economic slowdowns can impact margins. Our cost optimization strategies, efficient procurement, and advance payment model (98% of business) ensure financial stability.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Particular	2025	2024
Revenue from operations	10,25,594.58	50,045.44
Other Income	3.25	7.05
Total Income	1,02,597.83	50,052.49
Purchase of stock-in-Trade	1,00,314.15	45,649.43
Change in inventory of finished goods, work-in-progress and stock -in-trade	(11,780.64)	(4,066.19)
Employee benefit expense	2,020.71	1,449.98
Finance costs	1,200.18	739.78
Depreciation and amortization expense	85.51	53.98
Other expenses	6,596.89	4,047.32
CSR Expenditure	18	7
Total Expenses	98,454.80	47,881.30
Profit before exceptional and extraordinary items and tax	4,143.03	2,171.19
Less: Exceptional and Extra Ordinary Items
Profit before tax	4,143.03	2,171.19
Less: Adjustments
-Current tax	1071.17	568.26
-Deferred tax	(18.18)	(6.53)
-Last year excess provision Written Back	-	-
Profit for the Period	3,090.03	1,609.46
Earning per equity share
-Basic	1.45	0.89
-Diluted	1.44	0.89

EBIDTA:

EBIDTA stood at K 5,428.72 Lakhs during the year as against K 2,964.94 Lakhs during the previous year with a considerable increase of K 2,463.77 Lakhs compared to the previous financial year.

Profits & ratios:

The company has incurred a profit of K 3,090.03 Lakhs during the financial year as against a profit of K 1609.46 Lakhs for the corresponding previous year. The basic earnings per share stood at K 1.45 for the current financial year as against K 0.89 for the previous financial year.

Shareholders funds:

There is change in the capital structure of the company during the year under review. There is an allotment of 8000000 equity shares through preferential issue and allotment of 3000000 warrants fully convertible into equity shares through preferential issue the net worth of the company stands at a comfortable position of K 15299.72 Lakhs.

Loan Funds:

The company continues to get the support from its bankers and financial institutions. The secured loans availed by the company stood at K 11,230.67 Lakhs at the end of the financial year.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCE/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

At Cellecor Gadgets Limited, we recognize that our people are the foundation of our success. We are committed to fostering a work environment that promotes innovation, inclusion, and continuous learning. In FY24-25, we undertook several initiatives to enhance employee engagement, well-being, and skill development while scaling our workforce to meet rapid business expansion.

Key Developments in FY24-25:

1. Dynamic Work Environment:

• We have created a vibrant and collaborative workspace, including the inauguration of our new corporate office in New Delhi, designed to inspire creativity and cross-functional collaboration.

• Regular team-building activities, offsite events, and recognition programs have improved employee morale and workplace bonding.

2. Timely Compliance and Benefits:

• We ensure 100% compliance with all statutory requirements (PF, ESIC, and gratuity) and provide employees with timely benefits.

• We introduced new health insurance and wellness programs to support employee well-being.

3. Safe and Inclusive Workplace:

• Our POSH (Prevention of Sexual Harassment) Committee continues to foster a safe and respectful work environment.

• The "Pink Leave" initiative, introduced in FY25, grants one paid leave per month to female employees during their menstrual cycle, emphasizing empathy and inclusivity.

4. Skill Development and Learning:

• We launched specialized training programs in sales, supply chain, and R&D, along with digital capabilitybuilding sessions for mid and senior-level managers.

• Continuous performance reviews and mentorship programs have been implemented to accelerate career growth.

5. Growing Workforce:

• From a handful of employees during inception, we are now a team of over 400 professionals across India.

• We hired 150+ skilled professionals in FY24-25 in critical business areas, including e-commerce, marketing, R&D, and corporate sales, to support our growth plans.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Cellecor Gadgets Limited and its management have established robust Internal Control systems to ensure the accuracy of financial reporting and protect against potential losses or unauthorized use of assets. These controls help in the optimal utilisation of the companys resources while also ensuring that transactions are properly authorized, recorded and reported to the management. The company continually improves and tests its internal control to ensure the effectiveness of management and operating procedures. It adheres to accounting standards and guidelines for maintaining books of accounts and financial statement reporting. To assess the effectiveness of internal controls, independent internal auditors are appointed to conduct risk-based audits throughout the year. The Audit committee of the board of directors receives a summary of the auditors observations and thereon, the necessary corrective measures are undertaken on a prompt basis.

10. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Ratio	Current Period	Previous Period	Variance in %	Reason for variance by more than 25%
Current Ratio	1.76	1.92	8.33%	NA
Debt-Equity Ratio	0.77	0.83	7.22%	NA
Debt service coverage ratio	3.65	3.25	12.5%	NA
Return in equity ratio	19.81%	17.90%	11.22%	NA
Inventory Days	74.68	67.17	-	NA
Trade receivable Days	14.55	13.79	-	NA
Trade payables Days	17.33	12.85	-	NA
Net capital turnover ratio	6.58	5.56	18.16%	NA
Net profit ratio	3.01%	3.22%	0.21%	NA
Return on capital Employed	34.75%	32.84%	6.16%	NA
Return on investment	0.00%	0.00%	0.00%	NA

11. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

The Return on Net worth increased to 19.81% from the previous year Return on Net Worth of 17.90% . During the year, the Company remained focused on strengthening its financial performance through a multipronged strategy centered on revenue growth, cost optimization, and operational excellence. By driving top-line expansion and maintaining a disciplined approach to expense management, we achieved improved profitability. These efforts directly contributed to an increase in net profit, which, coupled with prudent capital deployment, translated into a stronger Return on Equity (ROE). We view ROE as a key measure of value creation for our shareholders, and our performance this year reflects the effectiveness of our strategic initiatives in enhancing shareholder returns.

CAUTIONARY STATEMENT:

The above management discussion and analysis contains certain forward-looking statements within the meaning of applicable security laws and regulations. These pertain to the companys future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals time cost over runs on contracts, government policies and actions with respect to investments, fiscal deficits, regulations