Comrade Appliances Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian consumer durables industry continued to witness steady growth during FY 202526, supported by rising disposable incomes, urbanisation, increasing household penetration, changing consumer lifestyles and growing demand for technologically advanced and energy-efficient products. The industry broadly comprises consumer electrical and electronic products, including kitchen and cooking appliances, washing machines, refrigerators, air coolers, air conditioners and other household appliances.

The industry is witnessing a gradual shift from the unorganised to the organised sector, supported by increasing consumer awareness, preference for branded products, improved product quality, organised retail and growing penetration of e-commerce. Increasing investments in domestic manufacturing, automation, technology and localisation of components are also expected to strengthen the Indian consumer durables ecosystem.

The Indian consumer durables sector is expected to maintain its growth momentum, supported by increasing consumer spending, replacement demand and increasing penetration in Tier-2, Tier-3, semi-urban and rural markets. Government initiatives supporting domestic manufacturing and localisation are also expected to provide further opportunities to industry participants.

1. Air Cooler Market

The Indian air cooler market was estimated at approximately Rs.12,606 crore in 2025 and is estimated to reach approximately Rs.13,500 crore in 2026. However, the air cooler industry was adversely affected during FY 2025-26 due to an extended and prolonged rainy season, which continued until November 2025, significantly shortening the cooling season. This resulted in a substantial reduction in demand and sales of air coolers during the year.

2. Washing Machine Market

The Indian washing machine market is estimated at approximately Rs.29,960 crore in 2026. The market continues to benefit from rising disposable incomes, urbanisation, increasing appliance penetration, replacement demand and growing consumer preference for convenient and technologically advanced washing machines.

Future Product Expansion - Infrared Cooktop and Air Fryer

As part of its strategy to diversify and expand its product portfolio, the Company is expected to commence manufacturing of Infrared Cooktops and Air Fryers. These products will enable the Company to strengthen its presence in the kitchen appliance segment and cater to the growing consumer demand for modern, convenient, energy-efficient and time-saving cooking solutions.

The proposed product expansion will enable the Company to leverage its existing manufacturing capabilities, technological expertise and customer relationships while entering new product categories and creating additional opportunities for business growth and diversification.

Key Trends and Insights

Despite short-term weather-related challenges in the air cooler segment, the long-term outlook for the consumer durables industry remains positive. The Company continues to focus on product quality, cost efficiency, product innovation and wider market penetration across urban, semi-urban and rural markets.

The Company has over 8 years of experience in the manufacturing sector. Since inception, the Company has continuously expanded its product portfolio and customer base while developing technological expertise in the design and manufacturing of its products.

The Company is supported by an experienced Board of Directors and management team. The management, including Key Managerial Personnel and senior management, possesses relevant experience and expertise in the consumer durables and manufacturing industry, enabling the Company to effectively manage operations and respond to evolving market requirements.

OUR MANUFACTURING PROCESS CHART:

B. OPPORTUNITIES & THREATS

Opportunities

Focus on Energy Efficiency and Sustainability

Increasing consumer awareness regarding energy consumption and environmental sustainability is creating opportunities for manufacturers to develop energy-efficient and environmentally responsible products. The Company sees potential to strengthen its product portfolio through products offering improved energy efficiency, performance and value to consumers

Product Diversification and New Product Development

The Company intends to expand its product portfolio by entering the Infrared Cooktop and Air Fryer segments. These products are expected to enable the Company to leverage its existing manufacturing capabilities and customer relationships while addressing emerging consumer demand for convenient, modern and efficient kitchen appliances.

R&D and Product Development Capabilities

The Companys manufacturing experience and technical capabilities provide a strong foundation for continuous product development, design improvement, component optimisation and enhancement of product quality. These capabilities also provide opportunities to develop customised products and explore potential OEM/ODM business opportunities.

Experienced Management and Execution Team

The Company is supported by a dedicated and experienced management and professional team with knowledge of manufacturing operations and consumer durables. The teams experience enables the Company to respond to customer requirements, manage operations efficiently and pursue new business opportunities.

Threats:

Pressure on mass consumption:

While demand for the premium segment augurs well, demand trends for the mass segment have been under pressure in recent times. Meaningful volumes and scale in a country with Indias demographic structure is only achieved by growth in the mass segment. Unless this picks up in the near term, this could continue to bear pressure on the industry as well as economy as a whole.

Competition from unorganized players:

The presence of several unorganized and regional players in the market presents a notable challenge for consumer electrical brands. These competitors typically provide low-cost alternatives, many of which do not meet stringent quality standards or the fast-changing regulatory norms that larger players comply with. In an ecosystem where enforcement of regulations is lax and consumers willingness to pay more for better quality can be swayed, this poses a threat to the larger organized players.

Supply chain disruptions:

The consumer appliances industry relies on complex supply chains for sourcing raw materials, components and finished products. While there is clearly rising indigenisation of these chains, the industry is unlikely to be completely independent of global sourcing for certain critical items. Challenges such as natural disasters, trade disputes, or geopolitical conflicts can disrupt the supply chain, leading to production delays, increased costs and inventory shortages.

C. RISKS AND CONCERNS Risks:

The primary operating risks that could impact the Company relate to a slowdown in the construction, environment and investment cycles; exposure to seasonality for some of its businesses; competition from Indian and global players; volatile exchange rates; rising interest rates; credit risks; import dependence; procurement concentration risks; volatile commodity prices; changes in tax and other legislations; inflation, especially in the case of fixed price contracts; environment; health and safety; exposure to frauds; inadequate cyber security and changes in technology, which impact the Companys product offerings. In addition, geo-political scenarios also pose a business continuity risk, apart from a general slowdown in the global and local economy which tends to intensify risks faced by the Company.

Concerns:

A confluence of factors on the global and local fronts, such as geo-political equations between countries, the usage of tariff and non-tariff barriers to address trade imbalances and volatility in the prices of crude oil, commodities, currency, and ocean freight, could impact consumer confidence. The Company will continue to closely monitor the macro and micro level trends in the global and Indian economy and will take necessary steps to address these challenges.

D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has focused on internal control systems in true sense. The Company monitors the status of internal control in four areas, viz. reliability of financial reporting, legal compliance, operating effectiveness and efficiency, and protection of assets. In the event an issue is found, the management implements corrective measures to ensure the relevant department performs appropriate and effective internal control operations. The Company also keeps a check on the internal environment, information and communication and internal supervision of the activities of several departments of the Company.

E. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

• Equity Shares:

During the year under review, the Companys Authorized Share Capital is Rs. 11,00,00,000 (Rupees Eleven Crores only) divided into 1,10,00,000 (One Crore Ten Lakhs only) equity shares of Rs. 10/- (Rupees Ten only) and the issued, subscribed and paid up share capital of the company is Rs. 7,77,87,950/- (Rupees Seven Crore Seventy Seven lakhs Eighty Seven thousand Nine Hundred and Fifty only) divided into 77,78,795 (Seventy seven lakh seventy eight thousand seven hundred and ninety five) equity shares of Rs. 10.00/ - (Rupees Ten only) each.

• Total Revenue:

During the year under review, the company has earned total revenue of Rs. 3010.80 Lakhs against Rs. 5731.42 Lakhs in the previous year which is 47.47 % less than the previous year. The loss for the year is Rs. 945.79 Lakhs against Rs. 53.06 Lakhs profit after tax in the previous year.

• Revenue from Operations:

Revenue from operations for FY 2025-26 stood at Rs.3,010.80 lakhs, compared with Rs.5,731.42 lakhs in the previous year, representing a decline of 47.47%. The decline was mainly due to challenging market conditions and the prolonged rainy season, which adversely affected air cooler demand and sales for whole industry.

During the previous season, substantial finished goods inventory remained with customers due to subdued market demand, resulting in lower fresh orders. In addition, demand for plastics base product has been decreased due to high inflation in crude oil prices due to US & Iran conflict. With the commencement of the new season, customer inventory has improved significantly, and the Company is witnessing a stronger order pipeline.

The Directors remain confident of improved performance in the coming years, supported by improving market conditions, operational improvements

• Reserves and Surplus:

The reserves and surplus of the company for the FY2024-25 is Rs. 540.19 Lakhs as against Rs. 1240.73 in the previous financial year.

a. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

Ratios	FY2024-25	FY2025-26	Reason for major deviation
1. Current Ratio	1.26	0.86	NA
2. Debt Turnover Ratio	6.08	2.96	Decrease in total debts (borrowing) caused the significant change in ratio
3. Inventory Turnover Ratio	3.95	1.15	NA
4. Interest Coverage Ratio	1.38	-5.26	NA
5. Debt Equity Ratio	1.19	2.89	NA
6. Net profit Margin	0.01	-0.31	NA
7. Return on Net Worth	2.34	-71.84	Decrease in profits caused the significant change in ratio