Inflame Appliances Ltd Management Discussions

The following discussion provides an overview of the operational and financial performance of the Company during the financial year 2025—26, along with the managements perspective on the future outlook. The analysis is based on current economic and industry conditions and may vary based on future developments, changes in government policies, and market dynamics.

Global Economy:

The global economy remained resilient during 2025 despite heightened geopolitical tensions, evolving trade policies and volatility in energy markets. According to the International Monetary Fund (IMF), global GDP growth is projected at 3.0% in 2025 and 3.1% in 2026. Although inflation eased across several advanced economies and financial conditions improved, the IMF continues to highlight trade uncertainty, geopolitical risks and fiscal pressures as key challenges to the global economic outlook.

India registered one of the highest GDP growths in the World in 2025, making the IMF revise the GDP growth projections for the calendar year 2026 in the backdrop of robust private consumption, rapid expansion of high value services, lower US tariffs, and stronger momentum from 2025.

Favorable Industry Trends

The global kitchen appliances industry continued to witness steady growth during FY 2025—26, supported by rising urbanization, increasing disposable incomes, changing consumer lifestyles, and growing investments in residential housing. The increasing adoption of modular kitchens, smart home solutions, and premium home interiors continued to drive demand for modern kitchen appliances . Consumers increasingly preferred smart, energy-efficient, and multifunctional products that offer enhanced convenience, improved functionality, and space optimization. Technological advancements, including IoT-enabled and connected appliances, coupled with supportive energy-efficiency initiatives across various countries, further accelerated product innovation and market growth. According to Fortune Business Insights, the global kitchen appliances market was valued at USD 268.31 billion in 2025 and is projected to grow from USD 287.66 billion in 2026 to USD 502.07 billion by 2034, registering a CAGR of 7.21% during the forecast period. Asia Pacific remained the largest regional market with a 33.14% market share in 2025, driven by rapid urbanization, increasing consumer spending, and rising demand for innovative kitchen appliances.

Industry Challenges

Despite favorable industry fundamentals, the global kitchen appliances industry continues to face challenges arising from the relatively high cost of smart appliances, increasing maintenance and repair expenses, and intense competition from regional and local manufacturers. In addition, fluctuations in raw material prices and evolving consumer expectations require manufacturers to continuously invest in product innovation, operational efficiency, and cost optimization to sustain long-term growth and competitiveness.

Source: Fortune Business Insights — Kitchen Appliances Market Size, Share &Industry Analysis (2026—2034).

Indian Economy:

India remained one of the fastest-growing major economies during FY 2025—26, supported by strong domestic demand, sustained public investment, resilient manufacturing activity and stable macroeconomic fundamentals. According to the Economic Survey 2025— 26, Indias growth continued to be driven by healthy household consumption, government capital expenditure and improving private investment, despite uncertainties in the global economy.

Favourable Industry Trends

The Indian kitchen appliances industry continued to demonstrate strong growth during FY 2025—26, supported by rising disposable incomes, rapid urbanization, increasing nuclear families, and changing consumer lifestyles. Growing demand for modular kitchens, premium home interiors, and convenience-oriented cooking solutions continued to drive the adoption of kitchen appliances. According to Mordor Intelligence, the Indian kitchen appliances market was valued at USD 11.41 billion in 2025 and is estimated to grow from USD 12.22 billion in 2026 to USD 17.24 billion by 2031, registering a CAGR of 7.12% during the forecast period. The continued expansion of organized retail and e-commerce, increasing penetration of smart and energy-efficient appliances, and Government initiatives such as the Production Linked Incentive (PLI) Scheme for white goods and Bureau of Energy Efficiency (BEE) star-labelling norms are further strengthening the domestic manufacturing ecosystem and supporting long-term industry growth.

Industry Challenges

Despite the favourable outlook, the industry continued to face challenges during the year due to geopolitical conflicts and global trade uncertainties, which contributed to volatility in crude oil prices and increased logistics and transportation costs. Fluctuations in the prices of key raw materials such as steel, aluminium, copper, plastics, and electronic components also impacted manufacturing costs across the industry. In addition, intense market competition, rapid technological advancements, and price-sensitive consumer demand continue to require manufacturers to focus on operational efficiency, supply chain resilience, product innovation, and cost optimization to sustain profitability and competitiveness.

Source: Mordor Intelligence — *India Kitchen Appliances Market — Growth, Trends & Forecast (2026—2031).

4. Diversification into Electric and Hybrid Appliances

Consumer interest in induction cooktops, electric chimneys, and energy-efficient solutions opens avenues for portfolio diversification beyond traditional gas-based appliances.

5. Export Market Potential

Growing demand for quality and competitively priced kitchen appliances in emerging markets, particularly across Africa, the Middle East, and Southeast Asia, along with global supply chain diversification, presents significant export growth opportunities for Indian manufacturers.

Threats:

1. Crude Oil and Raw Material Price Volatility:

Fluctuations in crude oil prices continue to influence transportation, packaging, and logistics costs, while volatility in steel, aluminum, copper, glass, plastics, and electronic components can impact manufacturing costs and operating margins.

2. Intense Industry Competition:

The market remains highly competitive with the presence of domestic manufacturers, multinational brands, and low-cost imports, requiring continuous investments in innovation, product quality,

branding, and customer service.

3. Rapid Technological Changes:

Accelerating technological advancements require manufacturers to continually invest in research and development to meet evolving consumer

expectations for smart, connected, and energy- efficient appliances.

4. Geopolitical Tensions and Trade

Uncertainty:

Ongoing geopolitical conflicts in regions such as the Middle East and Eastern Europe have disrupted global shipping routes and trade flows, resulting in volatility in freight costs and supply chains.

5. Regulatory and Compliance Requirements:

Increasing quality standards, product safety regulations, and energy-efficiency requirements necessitate continuous investments in product testing, certification, and compliance, thereby increasing operational costs.

The Indian kitchen appliances industry continued to demonstrate resilient growth during FY 2025—26, supported by rising urbanization, increasing disposable incomes, expanding residential housing, and changing consumer lifestyles. The industry comprises a well-established ecosystem of organized domestic manufacturers, multinational brands, and OEM/ODM manufacturers catering to both residential and commercial customers through traditional distribution channels, organized retail, and rapidly expanding e- commerce platforms. According to Mordor Intelligence, the Indian kitchen appliances market was valued at approximately USD 11 .41 billion in 2025 and is projected to reach USD 17.24 billion by 2031, registering a CAGR of 7.12%, reflecting the sectors robust longterm growth potential.

The industry witnessed continued growth in demand for kitchen chimneys, built-in hobs, cooktops, and other modern cooking appliances, driven by increasing adoption of modular kitchens, premium housing developments, and changing consumer preferences towards aesthetically designed and technologically advanced kitchens. The modular kitchen market has emerged as one of the fastest- growing segments, with an estimated market size of USD 0.65 billion in 2025 and an expected CAGR of 21.16% through 2031, creating sustained demand for integrated kitchen appliances and built-in cooking solutions.

The shift towards premium appliances remained a defining trend during the year, as consumers increasingly preferred smart, connected, and energy-efficient appliances featuring IoT connectivity, AI-enabled functionalities, touch controls, auto-clean technology, and enhanced safety features. At the same time, manufacturers continued to invest in product innovation, automation, localization of manufacturing, and supply chain resilience to improve operational efficiency and meet evolving consumer expectations. The continued implementation of the Bureau of Energy Efficiency (BEE) Standards & Labelling Programme further encouraged replacement demand by promoting the adoption of energy-efficient appliances.

The distribution landscape also continued to evolve with the expansion of organized retail and digital commerce. Organized retail accounted for over 54% of Indias home appliance sales in 2025 and is expected to continue gaining market share, while online retail has become an increasingly important sales channel, supported by wider product availability, attractive financing options, and improved installation and after-sales services. These developments have enabled manufacturers to strengthen their omnichannel presence and improve penetration across Tier II and Tier III cities.

Overall, favourable demographic trends, increasing modular kitchen adoption, rising consumer aspirations, technological innovation, and the continued shift towards premium and energy-efficient products are expected to support the long-term growth of the Indian

kitchen appliances industry. Companies that continue to focus on innovation, product quality, operational excellence, and customercentric solutions are expected to be well positioned to capitalize on the evolving opportunities in this dynamic industry.

Source https: / / www.mordorintelligence .com / industry-reports/india-modular-kitchen-market?utm

LED Lights, PCB and Switches, Clear glass packaging which are available in neighbouring states which results in lower logistic costs. Our manufacturing units are located in states we believe offers potential market for our products thus reducing the logistical costs associated with delivery. The strategic location helps to market the product in the neighbouring States and also exports to foreign countries.

Proven and Experienced Management Team

Our Promoter has vast experience in the industry. We believe that our senior management team has extensive experience in the commissioning of and operating manufacturing capacities, finance, sales, business development and strategic planning in the industry. The vision and foresight of our management enables us to explore and seize new opportunities and accordingly position ourselves to introduce new products to capitalize on the growth opportunities in the Kitchen Appliances Industry. We believe that the demonstrated ability and expertise of our management team for committed asset investment and use of cutting-edge technology results in growing capacities and rising production levels with better

cost management and enhanced process efficiency has translated into our quality product, increasing profitability and improved margins which gives us a competitive edge.

Research and Development

Right from the beginning our Company has believed in research and development which has benefited our company to lay a technical foundation and the capability that allows the Company to offer customized solutions to the customers. A facilitated design and research and development department enables a continuous study of the customer feedback and related technology to make the necessary upgradation. In house facilities for designing and delivering world class products along with infrastructure to manufacture most of Chimney and sheet metal components make us the most desirable manufacturer in the country.

Extensive Distribution Network

Inflame envisage to capture 40% market share in the next 5 years by expanding its manufacturing facilities to multiple strategic locations covering major regions of India. The State government of Telangana decided to provide support to startups in the form of grants for their innovative solutions that have the potential to address the local and social issues in rural areas. In this regard, Company is Set-up a new manufacturing plant in Hyderabad, Telangana and commercial production has been already started in June 2023 & a proposed new centralized R&D lab in Panchkula, Haryana.

Product-Wise Performance

During the financial year 2025—26, our Company continued to strengthen its position in the kitchen appliance industry, with a focused specialization in the manufacturing of Kitchen Hoods, Built in Appliances, Gas Hobs, and LPG Stoves. The Company achieved a substantial increase in total sales, rising by 44% to ^152 Cr, as compared to ^106 Cr in the previous financial year 2024—25.

Our commitment to quality, innovation, and operational efficiency remains at the core of our strategy. This is reflected in our sustained investments in state-of-the-art machinery, a highly skilled workforce, and comprehensive in-house manufacturing capabilities. These elements collectively ensure streamlined production processes, product consistency, and customer satisfaction.

Outlook

The Company continues to strengthen its competitive position through continuous innovation, investments in advanced manufacturing technologies and backward integration. Its integrated manufacturing capabilities for kitchen appliances, including chimneys, hobs and gas stoves, enable it to deliver high-quality products while improving operational efficiencies and enhancing customer value.

The Company remains focused on developing technologically advanced kitchen appliances by leveraging emerging technologies such as artificial intelligence (AI), Internet of Things (IoT) and connected product features. Through continued investments in research & development, product innovation and manufacturing infrastructure, the Company aims to expand its product portfolio, strengthen its presence in the domestic market and explore opportunities in international markets.

Going forward, the Companys strategic priorities include enhancing manufacturing capacity, increasing automation, improving operational efficiencies, expanding its premium product portfolio and strengthening its distribution network. Backed by its customer-centric approach, manufacturing excellence and focus on innovation, the Company is well positioned to capitalize on the long-term growth opportunities in the kitchen appliances industry and create sustainable value for its stakeholders.

Our Business Strategy

Quality Assurance

Inflame is a prominent manufacturer of modern kitchen appliances in India. Inflame offers exceptional value in its futuristic products. A dedicated Design and R&D lab to produce innovative, energy-efficient products managed by a team of industry professionals. We endeavour to maintain the quality of our products, and follow strict procedures to ensure quality control, timely delivery and competitive prices. The company intends to strengthen its product development effort by leveraging skills of its employees which will help to increase the sales of the Company and retain customers.

Automation of Glass Manufacturing

* Implemented a fully integrated automated glass processing line, seamlessly connecting glass cutting, four-side edge grinding, automatic hole drilling, and subsequent processing operations through robotic automation.

* Installed advanced robotic arms to automate material handling between process stages, significantly reducing manual intervention while improving operational efficiency.

* Achieved substantial manpower optimization, resulting in enhanced productivity, lower process variability, and improved workplace safety.

* Enhanced dimensional accuracy, consistency, and product aesthetics through precision-controlled automated processing.

* Commissioned a state-of-the-art in-house automated frosted glass production line, strengthening manufacturing capabilities, reducing dependence on external vendors, and ensuring superior quality control.

* The automation initiative has resulted in higher throughput, reduced cycle time, improved first-pass yield, and consistent premium product finish, further strengthening the Companys manufacturing competitiveness.

Key Benefits

* Increased manufacturing productivity.

* Improved process consistency and repeatability.

* Reduced manual handling and labor dependency.

* Superior product quality and aesthetic appearance.

* Lower rejection and rework levels.

* Enhanced customer satisfaction through consistent premium finish.

To Build-Up a Professional Organization

We believe in transparency, commitment and coordination in our work, with our suppliers, customers, government authorities, banks, financial institutions etc. We have a blend of experienced and sufficient staff for taking care of our day-to-day operations. We also consult with external agencies on a case-to-case basis on technical and financial aspects of our business. We wish to make it sounder and stronger in times to come.

Development of New Product for Both Domestic and Overseas Markets

Our Company is continuously looking out for improvements in our regular products and developing new products for the domestic and overseas markets. We have introduced various new products like Electrical Chimney, Glass Hobs, Oven Toaster Grill and other Cooking Ranges and we are now in the process of introducing newer in coming years. These products will furthe r enhance our Companys product portfolio to be offered to our customers. We would be creating a separate division to create an overseas market for its products.

Optimal Utilization of Resources

The Company continues to optimize resource utilization through continuous improvement in manufacturing processes, increased automation and backward integration of key manufacturing activities. Regular reviews of production systems and operational processes help identify bottlenecks, improve productivity and enhance cost efficiencies. The Companys continued investments in technology, infrastructure and process improvements support efficient utilization of resources, strengthen quality control and enhance overall manufacturing capabilities.

The Company operates in a competitive and dynamic business environment and is exposed to various business and operational risks. Key risks include intense market competition, fluctuations in raw material prices, foreign exchange volatility, supply chain disruptions, changing consumer preferences, and evolving regulatory requirements.

To mitigate these risks, the Company focuses on product innovation, operational efficiency, backward integration, cost optimization, quality enhancement and continuous monitoring of market and regulatory developments. The Company remains committed to strengthening its competitive position and achieving sustainable long-term growth.

The Company has established adequate internal control systems commensurate with the nature, size and complexity of its business. These controls are designed to ensure the orderly and efficient conduct of operations, safeguarding of assets, accuracy and reliability of financial reporting, and compliance with applicable laws, regulations and internal policies.

The Company has a well-defined delegation of authority and standardized operating procedures to ensure effective monitoring and control over business processes. The internal control framework is periodically reviewed and strengthened to address changing business requirements and ensure operational efficiency. The Management believes that the existing internal control systems are adequate and effective for the Companys operations.

Key highlights of the standalone and consolidated financial performance for the year ended March 31, 2026, are summarized as follows:

* Comparative figures for the consolidated financial statements as at and for the year ended March 31, 2025 have not been presented, as the Company had no subsidiaries during FY 2024-25. The subsidiaries were incorporated during FY 2025-26.

The Company continues to maintain cordial and harmonious industrial relations across all levels. We recognize that our employees are our most valuable asset, and their dedication, skill, and commitment have been pivotal in driving the Companys growth and expansion.

As of March 31, 2026, the Company had a total workforce of 150 employees. We have consistently fostered a culture of inclusivity, collaboration, and performance, while ensuring a safe and conducive work environment.

Our approach to human resources emphasizes merit-based recruitment, diversity, and equal opportunity. The Company is committed to building a diverse and inclusive workforce and continues to provide opportunities for professional development, skill enhancement, and employee engagement.

Going forward, the Company will continue to invest in human capital, focusing on employee well-being, training initiatives, and fostering a high-performance culture aligned with our strategic objectives.

Details of significant changes in key financial ratios, along with detailed explanations:

Disclosure of Accounting Treatment

The financial statements of the Company have been prepared in accordance with Accounting Standard ("AS") notified under the Companies (Accounting Standards) Rules, 2021 read with section 133 of the Companies Act, 2013.

Cautionary Statement

Statement in this report describing the Companys objectives projections estimates and expectation may constitute "forward looking statement" within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumption and expectations of future events. These Statements are subject to certain risk and uncertainties. The Company cannot guarantee that these assumption and expectations are accurate or will be realized. The actual results may different from those expressed or implied since the Companys operations are affected by many external and internal factors which are beyond the control of the managem ent. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments information or events.