GNG Electronics Ltd Management Discussions

The global economy remained resilient during 2025, despite persistent geopolitical tensions, trade policy uncertainty and elevated financial market volatility. However, an increasingly complex global environment, marked by geopolitical conflicts, evolving trade relationships and fluctuations in energy prices, continues to weigh on the outlook. According to the

IMF, global GDP growth is projected at 3.0% in 2026 and 3.4% in 2027. Emerging market and developing economies are expected to remain key contributors to global growth, supported by relatively stronger domestic demand and investment activity, with Asia continuing to be an important engine of global economic expansion.

Source: IMF, World Economic Outlook Update, July 2026 P - Projection.

India maintained a strong growth trajectory in FY26, demonstrating resilience amid an uncertain global environment marked by geopolitical tensions, shifting trade patterns and financial market volatility. Economic activity remained supported by healthy domestic consumption, continued government-led capital expenditure and broad-based momentum across the manufacturing and services sectors. These drivers, together with ongoing structural reforms and stable macroeconomic fundamentals, enabled India to retain its position among the worlds fastest- growing major economies.

During the year, the National Statistics Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), introduced a revised national accounts series, adopting FY 2022-23 as the new base year to better reflect changes in the structure and composition of the Indian economy. Under the revised series, Indias real GDP grew by 7.7% in FY 2025-26, compared with 7.1% in FY 2024-25. Nominal GDP expanded by 8.9%, underscoring the sustained pace of economic activity across the country.

Note: FY26 is Provisional Estimate (MoSPI); FY27P-FY28P are IMF projections. GDP series uses the revised base year FY2022-23.

Indias macroeconomic expansion is fundamentally driven by a growing, youthful population and robust consumer dynamics, with the nation becoming the worlds most populous as its demographic climbed to 1.44B in CY24. This massive demographic dividend expands the labor force, boosts baseline productivity, and accelerates innovation. Reflecting its consumer- demand-driven structure, private consumption accounts for over 60% of GDP and total consumer spending is on track to surpass US$ 4T by CY30. This structural growth is reinforced by state-backed infrastructure capital expenditures, such as roads and railways, along with synchronised public and private investments. Indias growth momentum remains stable for FY27, with GDP expansion forecasts of 6.5% from the IMF and 6.6% from the RBI.

Indias economic landscape remains highly supportive of digital penetration, fueled by widespread technological integration, automation, and public- sector digital literacy initiatives. Concurrently, public policies and framework drafts, such as the National Resource Efficiency Policy (NREP) and Extended Producer Responsibility (EPR) guidelines by the Central Pollution Control Board (CPCB), have brought circular economy principles to the forefront of corporate planning.

- Digital Access and Infrastructure: Accelerated internet connectivity and digital penetration across education, healthcare, and automation workflows necessitate continuous hardware upgrades.

- Access to Core Technology Updates: Rising corporate and retail demand for software, data processing, and digital tools requires modern configurations without heavy capital expenditure.

- Economic Value Realisation: Refurbished units match new-unit performance and aesthetics while costing less than half the price.

- Growing AI adoption increasing demand for computing capacity

By extending the operational lifecycle of IT assets, refurbishment reduces raw material extraction and energy use, directly contributing to SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action).

At COP28, ~200 countries committed to capping global temperature rise at 1.5C, including tripling renewable energy capacity to 11,000 GW by CY30 and pursuing net-zero pathways by CY50 - commitments that position product reuse as a key lever for emissions and waste reduction.

A new laptop consumes ~1,200 kg of mined and processed materials and generates ~250-330 kg of CO2e emissions, with production accounting for 80% of lifetime emissions. A refurbished laptop avoids these manufacturing emissions entirely, preventing 250-330 kg of CO2e per unit and keeping electronics out of landfills.

GNG Electronics Limited is Indias largest refurbisher of laptops and desktops and among the largest refurbishers of ICT devices globally, with significant presence across India, the United States, Europe, Africa and the Middle East. Operating under the Electronics Bazaar brand, the Company has established an integrated business model spanning the entire refurbishment value chain, from sourcing and secure IT asset disposal to refurbishment, quality assurance, sales, warranty and after-sales support. The Company has built a strong reputation for delivering reliable,

premium-quality refurbished ICT devices backed by credible and reliable warranty of 1-3 years. .

The Companys portfolio includes laptops, desktops, tablets, servers, premium smartphones, mobile workstations and accessories, each refurbished through rigorous quality processes to deliver like-new performance and aesthetics. By offering refurbished laptops at nearly one-third the cost of new devices GNG Electronics makes premium technology affordable for enterprises, SMBs, institutions and consumers while maintaining high standards of quality and reliability.

Revenue from operations increased by 34.0% year-on- year to 1,891.1 crore in FY26, compared with 1,411.1 crore in FY25. The growth was supported by sustained demand for refurbished ICT devices, expansion of the customer base and the Companys growing presence across domestic and international markets.

EBITDA increased by 58.9% to 200.5 crore in FY26, compared with 126.2 crore in FY25, significantly outpacing revenue growth. Consequently, the EBITDA margin expanded by 166 basis points to 10.6%, from 8.9% in the previous year. The improvement reflected operating leverage, disciplined execution and enhanced profitability across the business.

Profit after tax increased by 91.2% to 132.0 crore in FY26, compared with 69.0 crore in FY25. The PAT margin improved by 209 basis points to 7.0%, from

4.9% in FY25, reflecting the enhanced gross margins flowing to the bottom line.

Basic earnings per share stood at 11.58 in FY26, compared with 7.09 in FY25, reflecting the substantial improvement in profitability during the year.

Return on Equity stood at 26.83% as of March 31, 2026, compared with approximately 35% in the previous year. The moderation was primarily attributable to the expansion in the Companys equity base following its IPO.

Our business, results of operations and financial condition are affected by several risk factors, summarised below along with our principal mitigating measures.

The Company maintains internal control systems commensurate with the size, scale and complexity of its operations, designed to safeguard assets, prevent and detect fraud and error, and ensure the accuracy and timely preparation of financial information.

Internal audit is carried out in accordance with a risk- based annual plan approved by the Audit Committee, covering key processes. Audit observations, management responses and the status of corrective actions are reviewed by the Audit Committee along with the adequacy and effectiveness of the internal control system. The Company also has in place a Vigil Mechanism and a Code of Conduct, and utilisation of the Net Proceeds of the Issue is monitored in accordance with applicable SEBI Listing Regulations. The Board is of the opinion that the internal control systems were adequate and operating effectively during the year under review, and no material weakness was observed.

The Company recognises that its people are central to sustaining quality and scale across the refurbishment value chain. Given the technical nature of its operations, particular emphasis is placed on building and retaining a skilled technician base, and structured training programmes are conducted covering hardware diagnostics and repair, quality grading, data sanitisation protocols and safety practices. Technicians are also trained on best refurbishment practices to ensure consistency of standards across facilities. The Company follows a structured performance management process linked to defined key result areas, supported by internal career progression and periodic skill assessment.

As on March 31, 2026, the Company had 2148 employees.

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be ‘forward-looking statements within the meaning of applicable securities laws & regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand, supply, and price conditions in the domestic & overseas markets in which the Company operates, changes in Government regulations, tax laws & other statutes, and other incidental factors. The Company assumes no responsibility in respect of forward-looking statements, which may be amended or modified in the future.