Fonebox Retail Ltd Management Discussions

[Pursuant to Regulation 34(2)(e) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]

Your Directors are pleased to present the “Management Discussion and Analysis Report” for the financial year ended 31^st March, 2025.

A. BUSINESS OVERVIEW OF THE COMPANY FONEBOX RETAIL LIMITED

Fonebox Retail Limited is engaged in multi-brand retail selling of Smart Phones and allied accessories from manufacturers like Vivo, Apple, Samsung, Oppo, Realme, Nokia, Narzo, Redmi, Motorola. The company is engaged in multi-brand retail selling of consumer durable home appliances like Laptop, Smart TVs, Air Conditioners, Fridges, etc. from brands like TCL, Haier, Lloyd, Daikin, Voltas, Mi, Realme, OnePlus.

Further, the company operates its retail business with multiple brands. The company have a portfolio of retail stores with different brands. The company had initially started its business operations with brand “Fonebox”, for company owned stores as well as franchise stores. Further, the company have acquired famous mobile phone retail store brands such as “Fonebook” and “My Mobile” vide Business Purchase agreements from their respective owners in the year 2021.

The Company has well experienced and knowledgeable Directors, Key Management Personnel, Accounts team and Sales & Marketing team which are the backbone of Companys growth. The Companys retail stores are offering discounts, incentives, schemes etc. from time to time to increase revenue and profitability. The business of the Company is operating in varieties of franchise model considering win-win situations for Company as well as Franchise Partners. The Company has always tried its best to maintain the trust of its stakeholders including customers and is continuously making its best efforts to increase the turnover and profit of the Company.

The Company continues to grow with its overall performance in the financial year 2024-25. During the year, the company has generated total income of Rs. 34,273.26 Lakh as compared to Rs. 29,760.52 Lakh for the previous financial year. Likewise, profit before and after depreciation was Rs. 711.66 Lakh and Rs. 630.15 Lakh respectively as compared to Rs. 559.81 Lakh and Rs. 477.16 Lakh respectively for the previous financial year. During the year under review, the company recorded Net Profit after taxation of Rs. 454.61 Lakh as compared Rs. 343.16 Lakh for the previous year.

Business Model of the company comprised of two models:

a) Sale through Owned Stores (COCO Model): Under this model, the company sale mobile handsets, mobile accessories and other consumer durable home appliances through its owned stores. The company as on 31^st March, 2025 owns and operates 24 stores strategically located in high-traffic areas across State of Gujarat and 9 stores across Maharashtra. These stores serve as hubs for showcasing the latest smart phones, providing hands-on experiences, and delivering top-notch customer services. Our company directly operates its outlets or facilities. The company is responsible for all aspects of the operation, including staffing, management, maintenance, and overall business strategy.

b) Sale through Franchise Branch Stores (FOCO Model): As on 31^st March, 2025, the company sale mobile handsets, mobile accessories and consumer durable home appliances through 162 franchise retail outlets across the States of Gujarat and Maharashtra. All of 162 franchises, are operating on FOCO model. Under FOCO model, the company gives its brand name to the franchise at a pre-agreed franchise fee for a period of one to five years. In FOCO Model, the company earn 1% of the total turnover achieved by respective franchises, where such stores are operated by franchise owner. The company gives its brand name “Fonebox”, “Fonebook”, or “My Mobile” to the franchise and the store is operated by franchise owner.

B. GLOBAL OUTLOOK OF INDUSTRY IN WHICH COMPANY IS OPERATING

The Company operates in the retail industry of mobile phones, accessories, and electronic products, a sector that continues to evolve rapidly in response to technological innovation, shifting consumer behavior, and digital transformation.

Globally, the demand for smartphones and consumer electronics remains strong, driven by increasing connectivity, adoption of 5G technology, and a growing preference for smart and connected devices. The mobile phone market, along with its ecosystem of accessories such as earphones, smartwatches, power banks, and protective gear has shown sustained growth across both developed and emerging economies.

The consumer electronics retail sector is being shaped by the increasing penetration of e-commerce platforms. However, physical retail stores continue to hold significant relevance, especially in developing markets, due to the need for in-person product experience, after-sales service, and customer trust. The trend toward omnichannel retailing, which integrates online and offline channels, is becoming a key competitive advantage.

In addition, the retail landscape is witnessing increased consumer interest in value-driven purchases, sustainability (such as refurbished or energy-efficient products), and brand loyalty programs. Retailers are investing in advanced technologies including AI-driven inventory systems, digital payments, and customer relationship management (CRM) tools to enhance operational efficiency and deliver a superior customer experience.

Regionally, Asia-Pacific leads in terms of market share and growth potential, fueled by rising disposable incomes, smartphone penetration, and expanding urban centers. India, in particular, represents a high-growth market due to a large, youthful population and growing digital infrastructure.

In conclusion, the global outlook for the mobile phones, accessories, and electronics retail industry remains positive. Companies that are agile, technology-focused, and customer-oriented are well-positioned to benefit from the ongoing digital revolution and the evolving expectations of the modern consumer.

C. INDIAN ECONOMY INTRODUCTION

As per the first advance estimates released by the National Statistical Office, Ministry of Statistics & Programme Implementation (MoSPI), the real gross domestic product (GDP) growth for FY25 is estimated to be 6.4 per cent. From the angle of aggregate demand in the economy, private final consumption expenditure at constant prices is estimated to grow by 7.3 per cent, driven by a rebound in rural demand. PFCE as a share of GDP (at current prices) is estimated to increase from 60.3 per cent in FY24 to 61.8 per cent in FY25. This share is the highest since FY03. Gross fixed capital formation (GFCF) (at constant prices) is estimated to grow by 6.4 per cent. 3 On the supply side, real gross value added (GVA) is also estimated to grow by 6.4 per cent.

The COVID-19 pandemic caused widespread disruptions to economies worldwide. Economic Survey 2023-2024 compared the post-pandemic trends until Q4 FY24 with the pre-pandemic trajectory and concluded that the economy grew briskly enough to avert any permanent loss of output. This section extends the analysis to Q2 FY25 (ending September 2024) with a sectoral view of the economy.

Since the COVID-19 pandemic, judicious fiscal management has helped to rein in general government dis-savings. This assumes greater significance in sustaining the overall savings in the economy. With private corporate savings hovering around 14 per cent of GDP, persistent general government dis-savings could have implied a greater reliance on foreign funding. Prudent fiscal management in the last four years kept the overall savings-investment gap from widening and ensured a comfortable financing of the current account deficit, even though the household saving rate moderated.

The Union governments indicators of fiscal discipline have improved progressively. Quality of expenditure approximated by capital expenditure as a per cent of total expenditure of the union, has continuously improved since FY21.

During April - November 2024, three major facts stand out in union finances. First, following an unprecedented expansion of capital expenditure in the last four years, it remained subdued during Q1 FY25, owing to general elections. However, it rebounded after July despite a reduction in non-debt receipts owing to an increase in the devolution of taxes to states. Until November 2024, defence, railways and road transport accounted for about 75 per cent of the capital expenditure, whereas significant YoY growth occurred in power and food and public distribution. Second, despite the gross tax revenue (GTR) increasing by 10.7 per cent YoY during April-November 2024, the tax revenue retained by the Union, net of devolution to the states, hardly increased. This was because of increased tax devolution, which helped the states to manage their expenditures smoothly. Thirdly, as of November, the deficit indicators of the union were comfortably placed, leaving ample room for developmental and capital expenditure in the rest of the year. (Source: https://www.indiabudget.gov.in/economicsurvey/index.php )

TELECOMMUNICATION SECTOR IN INDIA

Currently, India is the worlds second-largest telecommunications market with a total telephone subscriber base stood at 1,203.69 million in March 2025 and has registered strong growth in the last decade. The Indian mobile economy is growing rapidly and will contribute to Indias Gross Domestic Product (GDP) according to a report prepared by GSM Association (GSMA) in collaboration with Boston Consulting Group (BCG). In 2019, India surpassed the US to become the second-largest market in terms of the number of app downloads.

The liberal and reformist policies of the Government of India have been instrumental along with strong consumer demand in the rapid growth of the Indian telecom sector. The Government has enabled easy market access to telecom equipment and a fair and proactive regulatory framework, which has ensured the availability of telecom services to consumers at affordable prices. The deregulation of Foreign Direct Investment (FDI) norms has made the sector one of the fastest growing and the top five employment opportunity generator in the country. (Source: Telecommunication Industry Report 2025 by IBEF)

D. SMARTPHONES IN INDIA

In 2025, the revenue in the Smartphones market in India is estimated to be US$48.22bn. It is projected to have an annual growth rate of 6.89% from 2025 to 2030 (CAGR 2025-2030). When compared globally, in China generates the highest revenue in the Smartphones market, reaching US$111.9bn in 2025. In terms of per capita income, each person in India is expected to generate a revenue of US$32.94 in 2025.

Looking ahead, the volume in the Smartphones market is forecasted to reach 256.46m pieces units by 2030. Additionally, there is an anticipated volume growth of 4.3% in 2026. Moreover, the average volume per person in the Smartphones market in India is expected to be 0.142 pieces in 2025. Indias smartphone market is experiencing a surge in demand for budget-friendly devices due to the countrys large population and price-sensitive consumer base. (Source: Highlights by Statista https://www.statista.com/outlook/cmo/consumer-electronics/telephony/smartphones/india )

E. EXPANSION AND FUTURE PROPOSAL

The Company launched its SME IPO on January 25, 2024, and successfully raised 2,037 lakhs by issuing 29,10,000 equity shares at 70 per share. The IPO aimed to support expansion into new geographies and drive the next phase of growth. The listing on the NSE SME Emerge Platform enhanced the Companys visibility, brand presence, and access to future opportunities.

The net proceeds were fully utilized for: Working capital requirements, General corporate purposes, and Public issue expenses.

During the year, the Company has demonstrated significant progress in expanding its retail footprint and strengthening its presence in the mobile phones, accessories, and electronic products segment. The Company remains committed to its vision of becoming a leading retail player in the organized electronics retail space across India.

The Company plans to continue its growth trajectory with opening of new stores in high potential markets over the next 12-18 months. The Companys expansion strategy remains centered on customer-centricity, brand alignment and scalable infrastructure supported by its deep understanding of the dynamic consumer electronics retail environment.

F. OPPORTUNITIES

The Company is in the field of technology business and this technology business is getting better and updated day by day so our Company has wide opportunities to grow. Further, Smartphones becoming an essential rather than a luxury commodity. Introduction of 5G network facility in India, adoption of Work from Home Policy by various corporates and high demand of smartphones, smart TVs, air-conditioners etc. also open up doors for the Company to expand its retail chain of mobile phones, its related accessories, audio devices, consumer durable home appliances and other electronic goods across the India.

G. THREATS

The technology business is getting better and updated day by day and such technology upgradation will generally leads to increase in outdated inventories. Further, in case of import of mobile phones, its related accessories, audio devices and consumer durable home appliances in India from other countries, any disruption in production cycle in that particular country might affect entire supply chain. Low entry barriers for new entrants, digital sales giants bring more competition and threats for our Company to remain competitive. Competition from unorganized small players and established players may shrink margins of our Company. The industry in which our Company operates is highly competitive and dynamic.

H. PRODUCT-WISE PERFORMANCE

The Companys business activity falls within a single primary business segment of retail and one reportable geographical segment which is “within India.” Accordingly, the Company is a single segment company in accordance with Accounting Standard 17. During the financial year 2024-25, the Company registered Annual Sales of Rs. 34,047.12 from selling of Mobile phones and accessories which is increased by 17.5 % as compared to Rs. 28,971.54 Lakh in the financial year 2023-24. And the Company registered Annual sales of Rs. 798.04 Lakh from selling of Consumer Durable Home Appliances which is increased by 13.82% against Rs. 701.12 Lakh in the financial year 2023-24.

I. OUTLOOK

The Companys growth is linked to the overall economic trend, technology upgradation, competition from the unorganized small players and well-established players, government policies, inflation trends and disposable income of customers. Our Company is focused on growing its retail business across various products falls under the category of electronic gadgets like mobile phones, related accessories, audio devices and other consumer durable home appliances. The Company is continuously investing much time and efforts towards opening and operating the retail stores of the Company.

We also aim to achieve healthy annual growth in the coming years. As the revenue grows, we expect our EBITDA margins also to improve in the coming years.

J. RISKS AND CONCERNS

Risk is an integral part to any business activity. The Company has laid down a Risk Management Policy which defines the process for identification of risks, its assessment, mitigation measures, monitoring and reporting. There are various types of risks that threaten the existence of our Company like business operations risk, liquidity risks, credit risk, market & industry risk, human resources risk, legal risk, technology risk, political risk etc. As a part of risk assessment and management system, the Audit Committee of the Company generally reviews the Companys Risk Management Policy and to remain in balance with its growing business size and changes in its risk profile.

K. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place adequate internal control system commensurate with the size of its operations to ensure the systematic and efficient conduct of its business, including adherence to Companys policies and procedures, the safeguarding of its assets, the prevention and early detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information.

Internal control systems comprising of policies and procedures are designed to ensure sound management of your Companys operations, safe keeping of its assets, optimal utilization of resources, reliability of its financial information and compliance.

L. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, your Company has achieved its best financial performance in terms of revenue as well as net profits since its incorporation. The financial performance of the Company has been summarized in the Directors Report under the heading ‘Financial Highlights of the Company for the Financial Year 2024-2025.

M. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT

We believe that our employees are the backbone of our organization. We are committed to provide equal opportunities to all our employees and it emphasizes on welfare of its employees and it strives to engage and retain talented workforce at all levels. There exists peaceful and amicable relations with our employees. As on 31^st March, 2025, there are total 93 (Ninety-Three) permanent employees on the pay roll of the Company.

N. 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 THEREOF

Key Financial Ratio	F.Y.2024-25	F.Y.2032-24	% Change
Debtors Turnover Ratio	176.29	129.26	36.39%
Inventory Turnover Ratio	10.03	11.31	(11.36%)
Interest Coverage Ratio	0.04	0.109	(0.069%)
Current Ratio	3.91	4.14	(5.41%)
Debt Equity Ratio	0.10	0.01	1429.23%
Operating Profit Margin (%)	1.92	1.79	(0.13%)
Net Profit Margin (%)	1.33	1.15	15.03%
Return on Net Worth (%)	14.11	21.34	(33.91%)

Remarks for variance more than 25%.

Debtors Turnover Ratio: Movement in ratio is due to decrease in Debtors and increase in Sales. Interest Coverage Ratio: Movement in ratio is due to decrease in Finance Cost. Current Ratio: Not Applcable Debt-Equity Ratio: Movement in ratio is due to increase in Shareholders Equity. Net Profit Margin: Increase in margin is due to increase in Revenue and increase in Net Profit. Return on Net Worth: Decrease in Return on Net worth is due to increase in Shareholders Equity

O. CONCLUSION

The Management Discussion and Analysis Report has been prepared on the basis of available data as well as certain assumptions as to the economic conditions, consumer demands & preferences, government regulations & taxation, natural calamities, political factors and other incidental factors. Actual results may differ from those expressed and implied in this Report. The Company, its Directors and Officers assume no responsibility in respect of the forward-looking statements herein which may undergo changes in the future on the basis of subsequent developments, information, events etc.

By order of Board of Directors,	Sd/-	Sd/-
FOR FONEBOX RETAIL LIMITED	Manishbhai G. Patel	Amitkumar G. Patel
Date: 23/08/2025	Chairman & Director	Managing Director
Place: Ahmedabad	[DIN: 01436792]	[DIN: 08472609]