Digidrive Distributors Ltd Management Discussions

(ANNEXURE ‘A TO THE BOARDS REPORT)

Digidrive Distributors Limited (‘Digidrive or ‘the Company) is a Company that is a part of the RP-Sanjiv Goenka Group that distributes Carvaan, a portable music player from Saregama India Limited. Carvaan comes with preloaded music, including classic Hindi songs and devotional tracks, and works without the need for an internet connection. The Company focuses on both retail and online sales, offering different Carvaan models like Carvaan Gold (premium) and Carvaan Mini (compact). Digidrive aims to provide users with a blend of nostalgic and modern music experiences.

ECONOMIC OVERVIEW

In 2024, the global economy rose by 3.2%, marking a moderate recovery from the slowdown experienced in previous years. Growth remained below the historical average of 3.7%, recorded between 2000 and 2019. Yet, key improvements were seen in stabilising energy prices, easing global inflation and restoring supply chain efficiencies. Advanced economies experienced slower growth due to high interest rates, sluggish consumer spending, and subdued industrial activity. However, labour markets in major economies remained robust, supporting household incomes and helping maintain consumption levels. Emerging markets and developing economies showcased relatively stronger expansion, driven by domestic demand and government support measures. Commodity-exporting nations benefitted from favourable terms of trade. At the same time, many Asian economies capitalised on their manufacturing strength and services exports to sustain momentum. Nevertheless, external vulnerabilities, including currency depreciation and elevated debt levels, continued to persist as risks.

According to the International Monetary Fund (IMF), global inflation moderated from 5.7% in 2023 to 4.2% in 2024, as energy prices stabilised and supply chain disruptions gradually resolved. Core goods inflation returned to pre-pandemic levels in many regions, but services inflation stayed high, especially in advanced economies like the United States and the Euro area. In several emerging markets, inflation persisted due to factors like food price volatility and currency depreciation. Nonetheless, the overall disinflation trend has provided central banks with room to cautiously adjust policies, balancing between sustaining economic recovery and maintaining price stability.

Amid a moderating global growth environment, India remained a pillar of resilience and expansion. While advanced and emerging economies struggled with weak growth and persistent challenges, India maintained strong momentum, reinforcing its position as one of the fastest-growing major economies in the world. In 2024-25, Indias GDP is estimated to rise by 6.5%, far exceeding the global average and contributing significantly to global economic expansion. Resilient domestic demand, a thriving services sector, and sustained government-led investments in infrastructure and manufacturing supported this robust performance. The agriculture sector rebounded with a projected growth of 3.8%, aided by favourable monsoons and targeted government initiatives. These initiatives include increased budgetary allocation, National Mission for Sustainable Agriculture, and the Pradhan Mantri Krishi Sinchai Yojana, among others. The industrial sector is anticipated to expand by 6.2%, led by the expected improvement in sub-segments like construction, manufacturing and key utilities. The services sector continued to drive overall growth, rising by 7.2%. Factors fuelling this expansion include robust financial, real estate, and professional service performances.

Retail inflation eased to 4.9% from April 2024 to December 2024, driven by stable food and fuel prices. This enabled the RBI to lower interest rates for the first time in nearly five years, supporting domestic demand. The fiscal deficit target was reduced to 4.9% of GDP for 2024-25, reflecting fiscal consolidation alongside an infrastructure capital outlay of Rs. 11.21 Lac Cr in the 2025-26 Union Budget. This focus on infrastructure is likely to spur economic activity and employment.

In 2025-26, Indias economy is projected to grow between 6.3% and 6.8%, supported by structural reforms, digital transformation, and rising consumption. Initiatives like Make in India and the Production-Linked Incentive (PLI) schemes are fostering a robust manufacturing ecosystem, attracting significant investments in key sectors like electronics, semiconductors, and renewable energy. Large-scale infrastructure projects like highways, ports, and smart cities are set to further boost economic activity and job creation. With continued policy support and strategic investments, India is well-positioned for sustained growth in the foreseeable future, solidifying its place as a global economic powerhouse.

INDUSTRY OVERVIEW

Global E-commerce Industry Review

The global e-commerce industry is experiencing remarkable growth, reaching USD 26.8 Trillion in 2024. It is further projected to reach USD 214.5 Trillion by 2033, registering a CAGR of 25.83% from 2025 to 2033. This growth is fuelled by rising internet penetration, increased smartphone usage and consumers preference for seamless online shopping. Advanced digital payment solutions, including digital wallets and buy-now-pay-later options, are further accelerating this momentum. Furthermore, artificial intelligence (AI) and data analytics are enhancing customer experiences, streamlining transactions, and driving greater customer engagement and loyalty.

Advancements in logistics and last-mile delivery services also contributed to global e-commerce growth, enabling faster and more reliable product fulfilment. These advancements are helping businesses meet growing consumer expectations for speed, convenience, and efficiency. In addition, cross-border e-commerce continues to gain momentum, aided by enhanced global infrastructure and favourable regulatory developments that are allowing businesses to enter international markets^{3 & 4}.

Indian E-Commerce Industry Review

Indias e-commerce sector is undergoing a transformation, emerging as one of the fastest-growing markets globally. Rising internet penetration, affordable smartphones, and increasing digital payments are fuelling this growth. According to Deloitte, the industry is expected to expand at a 21% CAGR, reaching USD 325 Billion by 2030.

A major force behind this growth is the rapid evolution of Indias digital payment ecosystem, particularly the Unified Payments Interface (UPI). UPI has revolutionised the way consumers transact online by offering a seamless, secure, and instant payment solution. The Reserve Bank of Indias Payment System Report shows that UPI accounted for 83% of the countrys total payment volume by the end of 2024, a remarkable jump from 34% in 2019. This surge in digital payments has significantly boosted consumer confidence, accelerating the shift towards online shopping nationwide. Greater digital access has also expanded e-commerce into Tier II and Tier III cities, which accounted for nearly 60% of Indias online shopper base in 2024. Affordable smartphones, low-cost data, and improved logistics networks have made e-commerce more accessible in these areas. Recognising this potential, e-commerce platforms and direct-to-consumer (D2C) brands are expanding their presence, tailoring offerings to suit regional preferences and driving the next wave of industry growth.

Meanwhile, technological innovations are enhancing customer experience and setting new benchmarks for convenience. E-commerce platforms are increasingly harnessing AI, machine learning (ML), and augmented reality (AR) to offer personalised recommendations, virtual try-ons, and voice-assisted shopping. These advancements are making online shopping more intuitive and engaging, increasing customer loyalty and encouraging repeat purchases.

Government initiatives are playing a crucial role in fostering this digital revolution. Programmes like Digital India and the Open Network for Digital Commerce (ONDC) are democratising access to e-commerce by empowering small and medium enterprises (SMEs) to participate in the digital economy. By simplifying digital adoption and enabling broader market access, these initiatives are helping create a more inclusive and competitive e-commerce ecosystem. Indias e-commerce sector is on a steady growth trajectory, driven by continuous innovation, supportive policy frameworks and a rapidly expanding digital consumer base. As technology becomes more accessible and businesses use data-driven strategies, the industry is poised to redefine the future of retail and contribute significantly to the nations economic progress⁵.

Distribution Industry Review

The global distribution industry is evolving rapidly, driven by technological advancements, rising e-commerce demand, and increasing globalisation. In 2024, the global logistics market was valued at USD 3,931.8 Billion and is projected to record a 7.2% CAGR, potentially surpassing USD 5,951.0 Billion by 2030. Surging e-commerce continues to reshape distribution as consumers demand faster and more reliable deliveries. To meet these expectations, companies are optimising last-mile delivery services and adopting advanced logistics solutions. Besides speed, there is an increasing focus on sustainability, with distributors investing in eco-friendly packaging, route optimisation, and alternative energy-powered transportation to reduce carbon emissions. Indias distribution industry reflects many of these global trends while charting its own growth trajectory. Fuelled by economic expansion, rising e-commerce penetration and infrastructure development, Indias logistics and supply chain sector is poised for significant growth. In 2024, Indias logistics market generated USD 228.4 Billion in revenue. It is further anticipated to reach USD 357.3 Billion by 2030, clocking in a CAGR of 7.7% between 2025 and 2030. Thethird-partylogistics(3PL)sectorcontributessignificantly to the aforementioned growth. This sector is projected to expand by USD 16.77 Billion from 2023 to 2028, registering a CAGR of 9.45%. Within this dynamic distribution ecosystem, the master distribution model is gaining traction. It provides streamlined and efficient channels for brands to expand their market reach and further improve supply chain efficiency. Technology and policy reforms are key enablers of Indias distribution growth. Logistics providers are adopting automation, AI, and IoT to enhance efficiency and meet the complex needs of e-commerce fulfilment. Master distributors are also utilising these technologies to improve inventory management, enable real-time tracking, and offer data-driven insights that support better decision-making. Furthermore, initiatives like the National Logistics Policy aim to streamline operations, reduce logistics costs, and foster greater connectivity across the distribution ecosystem⁷.

COMPANY OVERVIEW

As a part of the esteemed RP-Sanjiv Goenka Group, Digidrive Distributors Limited (also referred to as ‘Digidrive, and ‘The Company) upholds the Groups legacy of trust, innovation, and excellence. The Company operates as a master distributor for various retail products across leading digital marketplaces, with a focus on Saregama Carvaan—the iconic digital audio player from Saregama India Limited. Pre-loaded with 5,000 timeless songs, Carvaan seamlessly blends nostalgia with modern technology, featuring Bluetooth connectivity, FM/AM radio, and an easy-to-use interface. Digidrive ensures the products extensive availability through both online and offline channels, bringing Carvaan to millions of consumers across the country. In addition to its core distribution business, the Company operates an e-commerce marketplace that enables merchants to create customisable online storefronts. The platform offers mobile applications, digital catalogues, content management, payment integration, and fulfilment services, enabling businesses to engage customers across multiple channels. Digidrive also owns Open Media Network Private Limited, publisher of OPEN, a widely read weekly magazine featuring current affairs and in-depth features. The magazine offers a diverse range of content, including investigative journalism, thought-provoking opinion pieces, interviews with influential personalities, and analyses of politics, culture, and society. OPEN also features lifestyle articles, book and film reviews, as well as trend stories, making it a comprehensive source of information and perspectives for discerning readers.

With a focussed distribution model and the backing of the RP-Sanjiv Goenka Group, Digidrive will continue to play a key role in expanding the presence of Saregamas products across digital and physical retail channels in India.

Financial Performance and Key Financial Ratios (Standalone)

Particulars	2023-24	2024-25	Variance
Revenue from Operations (Rs. in Lacs)	3,910	2,784	(1,126)
EBITDA (Rs. in Lacs)	600	705	105
PAT (Rs. in Lacs)	434	525	91
EBITDA Margin (in %)	15	25	10%
PAT Margin (in %)	11	19	8%
Debtors Turnover Ratio (%)	11.53	10.23	(1.3)
Current Ratio (%)	7.12	4.80	(2.32)
Return on Capital Employed (%)	2.47	2.34	(0.13)
Return on Net Worth (%)	2.46	2.34	(0.12)
Net Profit Ratio (%)	13.61	18.85	5.24

Note: The above key financial ratios are for the Company as a standalone entity and changes in these Ratios are not significant as defined under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 i.e. change in 25% compared to previous year.

STRENGTHS

Advanced and Scalable Technology

Digidrive employs advanced and scalable technology that enables the Company to support a diverse range of products and services. Its modular and customisable e-commerce solutions are designed to handle large transaction volumes with minimal downtime. This robust technological platform allows Digidrive to effectively deliver services across multiple media, channels, and customer interfaces. These interfaces include digital downloads, streaming services, and application frameworks for supply chain and inventory management.

Strong Corporate Lineage of the RP-Sanjiv Goenka Group

As part of the esteemed RP-Sanjiv Goenka Group, the Company benefits from the Groups legacy of trust, innovation, and adherence to sound corporate governance practices. This affiliation enhances market credibility, supports business development efforts, and provides a strong foundation for exploring new opportunities and sustained growth.

Experienced Leadership and Motivated Workforce

The Companys leadership team focuses on building a sustainable, long-term business model. With deep e-commerce and retail sector expertise, the management team is well-positioned to anticipate evolving consumer trends and capture strategic growth opportunities. Digidrive also places a strong emphasis on its talented and motivated workforce, whose skills and dedication enable it to respond swiftly to market changes and deliver superior customer experiences. Committed to fostering a culture of continuous learning, the Company invests in initiatives aimed at developing employee expertise and capabilities.

STRATEGY

Strengthening Technology Infrastructure

Digidrive is enhancing its technology to improve efficiency and support new business opportunities. The Company plans to establish a dedicated data centre to improve system performance, ensure secure data management, and deliver faster, personalised services to customers. Additionally, Digidrive aims to upgrade its software capabilities and provide APIs to third-party service providers, enabling seamless integration with partner applications and expanding its value-added service offerings.

Expanding the Product Portfolio

Building on its expertise in digital distribution, Digidrive plans to diversify its product portfolio beyond Saregamas physical products. On this front, the Company is exploring opportunities to manage the distribution of additional products across digital marketplaces.

Forging Strategic Partnerships

Digidrive intends to collaborate with brands looking to grow their online sales through targeted campaigns, curated offers, and bundled products. By aligning with online marketplace strategies, especially during festive sales and promotional events, Digidrive aims to increase its reach and customer engagement.

Growing the Customer Base

Digidrive is committed to expanding its customer base by focusing on experience, competitive pricing, and unique product offerings. The Company plans to target niche segments, foster customer loyalty, and capitalise on affiliate networks and referral programmes to drive cost-effective customer acquisition and cross-selling opportunities.

OPERATIONAL REVIEW

Economic and Industry Scenario in India

Indias economy remains one of the fastest-growing in the world, with the IMF projecting a steady GDP growth rate of 6.5% for both 2025 and 2026. Strong domestic consumption, rising infrastructure investments, and a resilient agricultural sector are driving this momentum. Such positive macroeconomic trends create a favourable environment for businesses like Digidrive, which operates in the digital marketplace and publishing sectors. However, global trade uncertainties, geopolitical tensions, and inflationary pressures pose potential risks. Any adverse shifts in Indias economic conditions, such as fluctuations in procurement costs or regulatory changes, could directly impact the Companys revenues and overall operational performance.

Technological Advancements and Adaptation to New Trends

The rapid evolution of technology in Indias digital and media sectors continues to reshape consumer behaviour and industry dynamics. AI is now a significant driver of change, enabling businesses to offer hyper-personalised recommendations, automate content creation, and use real-time analytics for improved customer engagement. Also, in publishing, AI is streamlining workflows, enhancing content delivery, and improving user experiences. Digidrive recognises the importance of staying ahead of these technological trends. Continuous investment in technology infrastructure and the adoption of scalable digital solutions will be essential to maintaining competitiveness in a fast-changing environment.

Competitive Arena

Indias media and publishing industry is witnessing heightened competition from both domestic and global players. Companies are diversifying their reach through digital platforms, social media channels, television, and radio to capture and retain consumer attention. Major mergers, strategic partnerships, and the rise of influencer-driven content are reshaping the competitive environment. Additionally, recent regulatory scrutiny—such as the Competition Commission of Indias investigations into price collusion among major media and advertising firms—highlights the complex challenges in the market. To navigate these challenges, Digidrive must focus on product differentiation, customer loyalty initiatives, and strategic collaborations aligned with changing consumer preferences.

Result of Operations

A detailed overview of the Companys financial performance has been provided elsewhere in the Boards Report.

Risk Management

The Company is exposed to credit, and liquidity risks arising from its business operations, investments, and financing activities. The Board of Directors holds overall responsibility for establishing and monitoring a comprehensive risk management framework to effectively address these risks.

Credit Risk

Impact	Mitigation
Credit risk arises from the potential default by counterparties	Digidrive manages credit risk through established policies,
on their obligations, leading to financial loss. The Company	including credit approvals, setting limits, and monitoring
primarily faces this risk through unsecured trade receivables	customer creditworthiness. Overdue balances are regularly
generated from customer sales.	reviewed based on factors like the age of dues and the
	counterpartys payment history.
Liquidity Risk
Impact	Mitigation
Liquidity risk refers to the Companys potential inability	The Company effectively manages liquidity risk by maintaining
to meet its financial obligations as they fall due under	sufficient cash reserves, holding marketable securities, and
contractual terms.	securing access to dependable credit facilities. It regularly
	monitors cash flow projections and the availability of adequate
	liquid assets to meet its financial obligations.
Economic Risk
Impact	Mitigation
Digidrives operational performance is closely linked to	The Company continuously monitors economic trends and
Indias economic conditions, as it primarily trades products	market dynamics to make informed operational and strategic
in digital marketplaces and publishes magazines for the	decisions. By using technology to improve operational efficiency
domestic market. Key factors like GDP growth, inflation,	and customer engagement, the Company aims to build
demographic changes, wealth levels, economic cycles, and	resilience against economic uncertainties and sustain long-term
technology adoption directly impact consumer demand.	profitability.
Any adverse changes in these factors, including fluctuations
in procurement costs, could affect the Companys revenue
and profitability.
Technology Risk
Impact	Mitigation
The Companys financial performance is closely tied to	Digidrive invests in technology upgrades and regularly enhances
its ability to adapt to technological advancements and	its digital platforms to stay aligned with market trends. The
evolving trends in the digital marketplace and publishing	Company closely monitors consumer behaviour and social
sector. Rapid changes in consumer preferences, driven	media dynamics to swiftly adapt its product offerings and
by social media trends and shifting lifestyles, require	marketing strategies.
continuous monitoring and agility. Failure to anticipate
and respond to these changes may impact the Companys
growth prospects and revenue streams.

Competition Risk

Impact	Mitigation
Digidrive faces intense competition in the magazine	The Company continuously diversifies distribution channels
industry from both national and international media players.	and strengthens its digital presence to remain competitive.
Competitors use multiple channels, including publishing	It adopts innovative marketing strategies and explores new
houses, television, digital news platforms, social media, and	revenue streams to attract and retain readers. Regular market
radio, to expand their reach, attract consumers, and capture	analysis helps the Company respond proactively to shifting
advertising revenue. This competitive environment can	industry dynamics and consumer preferences.
impact the Companys circulation, readership, and overall
revenue.

Human Resources

Digidrive values its human capital as a key driver of operational efficiency and business growth. In turn, the Company fosters a collaborative and inclusive work environment that encourages skill development and continuous learning. Talent acquisition, retention, and development remain strategic priorities, supported by employee-focussed policies and performance-linked incentives. By investing in its people, Digidrive aims to strengthen productivity and innovation, while maintaining excellence in customer service. As of March 31, 2025, the Company employed 8 individuals.

Prevention of Sexual Harassment

In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has an Internal Complaints Committee to address workplace harassment concerns. During the year under review, no complaints were received or remained pending under this framework.

Adequacy of Internal Financial Controls with Reference to Financial Statements

The Company has implemented robust internal financial control systems across its operations to ensure effective governance and risk management. These controls facilitate the orderly and efficient conduct of business activities, ensure strict compliance with Company policies, safeguard assets, and help prevent as well as detect frauds or errors. They also help maintain accurate and complete accounting records, enabling the timely preparation of reliable financial statements.

Alongside employing internal expertise, the Company engages both internal and external auditors periodically to review and strengthen its control framework. These systems are regularly assessed and upgraded to align with evolving industry standards and best practices.

Cautionary Statement

The Management Discussion and Analysis (MD&A) section often includes statements about future prospects. These statements, which address both known and unknown risks and uncertainties, can lead to significant differences between actual outcomes and the predictions made. The reports estimates rely on the Companys assumptions, which consider the most recent internal and external data. However, keep in mind that the underlying factors behind these assumptions can change over time, potentially affecting the estimates. It is essential to recognise that ‘forward-looking statements apply only to the date they are made and reflect the Companys current intentions, beliefs, or assumptions. The Company is not obligated to revise or update these statements based on new information or future events.