Cello World Ltd Management Discussions

The global economy grew by approximately 3% in 2024, demonstrating moderate resilience amid persistent headwinds. Although the recovery was uneven across regions, several economies remained robust thanks to strong domestic demand, easing in ation, and responsive policy actions.

Advanced economies posted growth of 1.8%, driven by improving labor market conditions and a gradual shift toward favourable monetary policies. Countires like United States outpaced all the expectations, underpinned by solid consumer spending and investment activity. However, Europe experienced subdued growth due to sluggish industrial performance and tighter credit conditions. Japan and the UK registered modest improvements, constrained by weak external demand and cautious consumer behavior.

Emerging markets drove global growth in 2024, expanding by 4.2%. India led with 6.8% growth, fueled by strong consumption, public investment, and digital and green sector momentum. Chinas recovery slowed as it pivoted toward high-tech and clean energy.

Global trade rose 2.3%, though recovery remained incomplete amid evolving supply chains. A major setback came with sweeping tariffs, initiated by the U.S. and met with global retaliation, culminating in near-universal tariffs from April 2, 2025—raising trade barriers to century-high levels and stalling economic momentum.

Monetary policy remained focused on in ation control, while easing pressures enabled more balanced moves. Governments ramped up investment in infrastructure, digital ecosystems, and human capital, reinforcing the foundations for long-term growth. Despite external shocks, structural resilience is beginning to emerge.

(Source: International Monetary Fund)

Real GDP Growth (in %)

*Note: E - Estimated, P - Projected

(Source: International Monetary Fund) https://ww-w . i m f . o r g / e n / P u b l i c a t i o n s / W E O / I s -sues/2025/04/22/world-economic-outlook-april-2 025)

Global growth is expected to slow to 2.8% in 2025, rebounding slightly to 3.0% in 2026—0.8 percentage points below the IMFs earlier forecast and well under the 2000–2019 average of 3.7%. The downgrade reflects intensifying trade con icts, broad

U.S. tariffs, and rising geopolitical uncertainty.

U.S. in ation is revised up by 1 point for 2025 due to persistent service costs and tariff-driven goods in ation. The UKs outlook rose 0.7 points on regulated price shifts, while the euro area remains unchanged. Emerging markets show mixed trends: in ation has eased in Asia, remains low in

China, but rose in Russia and Ukraine amid ongoing instability. Latin America shows varied revisions, with increases in Brazil and Venezuela offset by a downward shift in Argentina.

India is projected to remain the worlds fastest-growing major economy in 2024-25, with real GDP projected to rise by 6.50% in 2024-25. This expansion is powered by solid domestic demand, a thriving services sector, and revitalized manufacturing industry. Additionally, government measures like the Production-Linked Incentive (PLI) scheme and Atmanirbhar Bharat have provided a strong policy push for domestic value addition, particularly across sectors such as pharmaceuticals, engineering, and select high-tech industries.

Indias GDP Growth Rate (in %)

Note: For India, data and forecasts are presented on a

scal year basis, with FY 2024-25 (starting in April 2024) shown in the 2024 column. Indias growth projections are 6.5% in 2025 and 6.2% in 2026 based on calendar year.

(Source: International Monetary Fund) https : //www.imf.org / en /Publications/WEO/Is-s u e s / 2 0 2 5 / 0 4 / 2 2 / w o r l d - e c o n o m i c - o u t-look-april-2025) Agriculture has consistently bolstered Indias economy, thanks to favorable monsoon patterns, expanded irrigation efforts, and strengthened procurement policies. Meanwhile, the services sector continues to lead growth, with key contributions from transportation, communication, Finance, and hospitality. Notably, rural demand has been buoyed by stable in ation, rising farm incomes, and targeted welfare initiatives.

Monetary policy has turned supportive, with the RBI cutting the repo rate by 25 basis points in both February and April 2025, bringing it to 6.00%, its first rate cuts since 2020. These moves aim to stimulate domestic growth amid contained in a-tion and persistent global trade pressures, including U.S.-led tariff escalations. (Source :https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/0BULL22042025F03F83AE118C4B3B84E6 62D980C8DE33.PDF) Indias macroeconomic stability has been further supported by a notable moderation in retail in a-tion. According to data from the Press Information

Bureau, retail in ation eased to 4.6% in FY2024-25, down from 5.4% in 2023-24 and 6.7% in FY 2022-23. This steady disin ation has been driven by improved food supply dynamics, prudent monetary policy management, and a favorable base effect. With in ation remaining within the RBIs comfort zone, the central banks Monetary Policy Committee has adopted an accommodative stance, indicating scope for additional policy support should macroeconomic conditions warrant it. (Source :https://pib.gov.in/FactsheetDetails.aspx-?Id=149209&reg=3&lang=1)

Indias economic outlook remains positive, driven by resilient domestic demand, ongoing structural reforms, and significant investments across key sectors. Strong fundamentals such as including a young workforce, rapid urbanization, and growing digital integration are reshaping the economy, spurring innovation, and enhancing productivity. The services sector continues to grow steadily, while emerging areas like clean energy, health-care, and advanced manufacturing are opening new avenues for expansion.

The governments Viksit Bharat 2047 vision outlines a transformative path focused on human capital, infrastructure development, and technology-led inclusive growth. However, maintaining geopolitical stability, especially in light of tensions with neighboring Pakistan, will be crucial to sustaining momentum. With sound macroeconomic management, India is well-placed to leverage these strengths for long-term, sustainable growth.

The Indian Consumerware market, comprising Consumer Houseware and Consumer Glassware segments, has shown softer growth during the year 2024 - 25. This year brought with it a unique set of challenges that tested industries, economies, and businesses across the globe. Speci cally for Indian consumerware market, muted consumer demand remained a key challenge throughout the year. However, reducing raw material prices aided in such dif cult market scenario.

The Consumer Houseware segment encompasses a range of products including hydration, cook-ware, insulated ware, lunch bofixes, storage containers, small kitchen appliances, and cleaning products. On the other hand, the Consumer Glassware segment includes opalware, glassware, and porcelain products. In recent years, online channels and quick commerce have been gaining traction while of ine channels like brick-and-mortar stores, supermarkets, and hypermarkets still dominate the market. The market contribution from e-commerce is playing a pivotal role in shaping the Consumer-ware markets channel segmentation. The market share from e-commerce is to reach 12% by the end of FY 2026-27.

Another significant trend in the industry is the transition from unbranded to branded products. The branded segment market has showcased remarkable growth in the Consumerware market share. This branded play is further benefited by a shift of consumer preference towards premium quality products.

Outlook

Looking ahead, the Indian Consumerware market is poised for a brighter outlook and significant growth, projected to achieve a CAGR of 6.9%be-tween FY 2022-23 and FY 2026-27, reaching at

565 billion. The growth is supported by favourable demographics, including shifting dynamics in kitchen responsibilities and a rise in the number of working women. A significant rise in the purchasing power of the individuals supported by new favourable tax regimes and lower borrowing cost. These strategic move by the government is expected to boost the consumption and will lead towards recovery in overall demand scenario. Various other factors are also driving the growth which includes increased discretionary spending and improved product availability through online platforms, quick commerce and multi-brand outlets. Moreover, a shift towards innovative and creative products will be a key driving factor for the industry.

The industry is expected to witness another shift, with branded products market share in the Consumerware industry increasing to 67% by FY 2026-27, from 61% in FY 2022-23. This transition will offer a safe and high-quality product that is in line with cutting-edge technology.

In recent years, the stationery industry performance remained in line with the previous year due to slower demand for stationery products. Although conventional paper-based products like notebooks, registers, and copier paper remain the major players, there is a growing trend towards environmentally friendly, customized, and technologically enabled stationery solutions.

The Indian stationery market is divided into two main segments: paper stationery and non-paper stationery products. Within the paper industry, products can be categorised into notebooks and papers, with notebooks holding the larger share by value. On the non-paper side, products include writing instruments, office supplies, and art and crafts products, with writing instruments being the largest contributor to this segment. [Source :https://www.wrightresearch.in/encyclpe dia/chapter-report/chapter-1-introduction-to-indi-an-stationery-sector-2025/]

Apart from paper-based products, the Indian stationery market encompasses a diverse range of non-paper essentials that support learning, work, and creative pursuits. These include writing instruments, office supplies, art materials, and emerging digital tools. Growth in this segment is fuelled by evolving consumer preferences, hybrid work models, and rising interest in hobbies and design-oriented products.

The Indian stationery sector is set for long-term growth, driven by educational reforms, digital integration, and changing consumer expectations. Growing consciousness around sustainability is accelerating interest in recyclable and eco-conscious products. Simultaneously, demand for premium and personalised stationery is rising, particularly among younger, urban consumers. On the global front, export opportunities are expanding as Indian manufacturers leverage e-commerce platforms and international distribution networks. Looking ahead, market leadership will depend on focused product innovation, institutional partnerships, and a strengthened digital and retail presence.

The writing instrument market is the second largest category in the Indian stationary market after the paper category. In India writing instruments includes pens, pencils, markers, and highlighters, with pens being the largest revenue contributor of the total writing instrument revenue of 80 billion in FY 2024-25. India also exports its writing instruments, with the United States and the United Arab Emirates being major destinations for these exports.

Being a fragmented industry, Indian writing instrument is dominated by a combination of domestic and foreign players, with both organized and unorganized market players driving the growth of the industry. However, the organised players control the market with strong brand recall, distribution channels, and marketing efforts. In contrast, the unorganized market, consisting of small-scale producers and local retailers, has a major share, providing cost-effective options which attract price-conscious consumers.

Organized players benefit from economies of scale, strong brand equity, and widespread retail reach, while the unorganized segment competes on pricing and agility in addressing local market needs. Leading brands leverage expansive distribution networks and strategic school tie-ups to strengthen their presence in the education sector.

Meanwhile, premium brands target af uent consumers with high-quality products, placing a strong emphasis on innovation in ink technology, design, and sustainability.

[Source : https://www.wrightresearch.in/encyclo pedia/chapter-report/chapter-1-introduction-to-indian-stationery-sector-2025/]

Indias writing instruments industry is poised to experience healthy sales growth, buoyed by an increase in overall demand from the education sector as well as corporates and institutions. The corporate and institutional stationery sector has witnessed a high demand for branded office supplies and corporate gifting options, generating new streams of revenue for stationery producers. While competition remains intense, the industry continues to present significant growth opportunities. Expansion into rural markets, consolidation within the e-commerce space, and a focused approach toward niche premium segments will be crucial for future success. Collaborations with educational institutions, corporate partnerships, and sustained investment in technological advancements will serve as key drivers of differentiation and competitiveness. Looking ahead, the industry is expected to undergo increased consolidation, with mergers, acquisitions, and strategic alliances playing a pivotal role in shaping its evolution.

This segment is gaining momentum among students, hobbyists, and creative professionals. Covering products such as paints, brushes, sketchbooks, and DIY kits, it is expected to grow at a CAGR of 12%, driven by rising interest in creative pursuits, school-level art programs, and content creation.

Indias furniture market has nearly doubled over the past decade, reaching about USD_22_billion and claiming the title of the fourth-largest globally and second-largest in Asia-Paci c after China. It also ranks among the fastest-growing markets, with strong expansion projected through 2025–26—propelled by rapid urbanisation, a rising middle class with higher disposable incomes, large-scale investment in residential and commercial infrastructure, pro-business government policies, and the modernisation of retail, including the growth of organised stores and e-commerce. Indias furniture market is undergoing a profound transformation—evolving from a fragmented, largely unorganised sector into a consolidated, competitive landscape. Driven by rapid urbanisation, a burgeoning middle class, and integration with global markets, manufacturers and retailers are aggressively pursuing scale and ef ciency.

The markets shift is fueled by the entry of international brands which bring technological innovation, streamlined supply chains, and global-quality standards. Meanwhile, domestic organised players are expanding their physical and digital presence, further accelerating consolidation. This industry reflects a broader shift toward ef ciency, professional retailing, and consumer-focused design, marking a pivotal moment for Indias furniture sector.

Metropolitan hubs like Mumbai, Delhi, and Benga-luru are driving strong demand—particularly for sleek, contemporary furnishings tailored to new homes and office spaces. Urban consumers are increasingly choosing branded, quality-certi ed furniture over unorganised alternatives, thanks to the convenience, variety, and con dence enabled by organised retail and digital platforms. At the same time, plastic furniture is gaining traction in semi-urban and rural areas, valued for its affordability, durability, and low maintenance.

The India furniture market size is projected to grow by a CAGR of ~8%. Urban migration, steady real-estate completion, and government housing schemes combine with rising digital adoption to keep demand on a healthy upward path. Organized retailers strengthen brand trust by pairing deep in-store ranges with augmented-reality visualizers that reduce product returns and support profitable e-commerce. At the same time, the largely informal vendor base sustains price competition, prompting formal players to expand mid-range assortments and local assembly to hold costs.

As a company, were strategically positioned to capitalize on growing market opportunities by expanding our reach, enhancing both digital and omnichannel capabilities, and driving continuous innovation to meet evolving consumer preferences. Embracing sustainability, operational ef cien-cy, and a consumer-centric mindset, we are con -dent in delivering strong growth and sustainable value creation well into 2026 and beyond.

The rapid rise of e-commerce—including ultra-rapid "quick commerce"—is transforming the industry by creating new touchpoints and engagement opportunities. Platforms offering deliveries within minutes are rede ning consumer expectations, enabling us to meet todays demand for convenience and speed while reinforcing brand loyalty and incremental sales.

Cello forti es its risk mitigation strategies through proactive measures that empower it to navigate unforeseen events or challenges adeptly. This approach ensures that the Company is well-prepared to respond effectively to any potential obstacles that may arise along its journey.

Consolidated Financial Highlights ( in Crores)

Key Financial Ratios

Cellos continuous addition of new and differentiated products to its portfolio has been instrumental in boosting sales and expanding its market share. To support this growth, the Company has implemented strategies to extend its sales and distribution network, enhance customer wallet share, establish partnerships with additional distributors, and fortify the brand presence. In the financial year of 2024-25, the Companys capital expenditures totalled 171.45 crores, with approximately 114.09 crores allocated to capital work in progress.

During the reporting year, the Company bolstered its manufacturing capabilities by successfully commencing glass manufacturing facility with an installed annual capacity of 20,000 tonnes, overseen by its subsidiary, Cello Consumerware Private Limited, situated in Falna, District Pali, Rajasthan.

Cello has implemented various IT solutions and has integrated automation & technology into its design, manufacturing, and distribution processes to boost ef ciency and ensure cost-effective quality. Cello has automated manufacturing facilities which enable quick production of large volumes at competitive costs. The Company has implemented an enterprise resource planning (ERP) system for its consumer houseware, moulded furniture, and allied products, and is extending it to its writing instruments and stationery categories. This ERP system integrates different functional areas for better communication, productivity, and decision-making ef ciency. It also manages the Companys supply chain, tracks consumer demands, and helps maintain optimum inventory levels.

To enhance productivity and ef ciency, Cello has consistently upgraded its automation and technological infrastructure. The sales team utilises ERP software and secondary sales software to monitor real-time movement and market trends, facilitating strategic and agile expansion in response to consumer preferences.

Cello rmly believes that its people are its key competitive advantage. The Companys employees contribute a wealth of multi-sectoral experience, technological expertise, and domain knowledge. Its HR culture is characterised by its ability to challenge traditional norms to improve competitiveness. The Company consistently makes decisions that align with employees professional and personal goals, striving to achieve an ideal work-life balance that fosters pride in being associated with Cello.

As of March 31, 2025, the Company employs 5701 individuals, with 34.45% being female. The attrition rate, based on the Last Twelve Months (LTM), was 20.12% at the end of FY 2024-25 marking a notable decrease from the 24% recorded at the end of the previous scal year.

The Company has established a comprehensive system to ensure the utmost accuracy in all operations and effective management of potential risks. This encompasses robust monitoring of the Companys financial assets to safeguard them from unauthorised access. A dedicated team conducts regular inspections to ensure compliance, while a robust system accurately tracks expenses. Such an efficient system is vital for the Companys success and bolsters stakeholder con dence in meeting regulatory and legal requirements.

Cautionary statement

The statements in the Management Discussion and Analysis section describing the Companys objectives, projections, estimates, and predictions may be considered forward-looking statements. All statements that address expectations or predictions about the future, including, but not limited to, statements about the Companys strategy for growth, product development, market positioning, expenditures, and financial results, are based on certain assumptions and expectations of future events. Cello World Limited cannot guarantee that these assumptions and expectations are accurate or will be realised. The Companys actual results, performance, or achievement may, thus, differ materially from those projected in such forward-looking statements. Cello assumes no responsibility to publicly amend, modify, or revise any forward-looking statement based on any subsequent developments, information, or events. To avoid duplication and repetition, certain heads of information required to be disclosed in the Management Discussion and Analysis, have been included in the Boards Report.