Jay Jalaram Technologies Ltd Management Discussions

"Annexure - A"

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

The Directors have pleasure in presenting the "Management Discussion and Analysis Report" for the financial year ended 31st March, 2024

A. OVERVIEW OF THE COMPANY "JAY JALARAM TECHNOLOGIES LIMITED":

Jay Jalaram Technologies Limited ("the Company") has established itself as Indias premier mobile retail chain. From a modest start with just four stores in the year 2012, the Company has experienced exponential growth, now operating over 220 retail locations nationwide. This remarkable expansion underscores the strength of its business model and ability to excel in a highly competitive market.

Operating under four distinct brands - KORE, EROK, Simron, and General Electronics - allows the Company to effectively target different market segments. The Companys success is built upon a diverse and comprehensive product portfolio. It offers a wide range of smartphones and mobile accessories from industry-leading brands, including Apple, Samsung, Oppo, Realme, Nokia, Vivo, Xiaomi, Honor and OnePlus. This extensive selection ensures that customers have access to cutting-edge mobile technology across various price points.

In response to evolving customers needs, the Company has broadened its product offerings to include a wide array of consumer durable electronics goods. Its inventory now features smart TVs, air conditioners, refrigerators, and coolers from renowned brands such as TCL, Haier, Daikin, Voltas, Mi, Honor and Realme. This has solidified the Companys position as a key player in the broader consumer electronics retail market.

In August 2023, the Companys Kore Mobile brand secured a significant sponsorship deal with the Ireland Cricket Team for their series against India. This move demonstrates the Companys commitment to expand brand awareness and explore innovative marketing avenues in the sports sector.

To drive digital retail growth, the Company has acquired 59% stake in Hear More Techlife Pvt. Ltd. and also incorporated a new subsidiary, Techgrind Solutions Private Limited during the financial year 2023-24. This initiative aims to expand its presence in software & website business, mobile phones related accessories business and audio-video devices business.

Looking ahead, the Company is focusing on the following strategies to enhance its market position and profitability:

1. Expanding the branch network across India

2. Adopting an asset-light model through franchisee model

3. Diversifying into higher-margin electronic products

4. Developing larger format stores of 2,000 square feet or more to enhance customer experience

While currently in a capex-intensive phase, the Company anticipates significant margin growth from FY25 onwards, driven by these above strategic initiatives.

As it continues to adapt the market trends and expand its offerings, the Company is able to maintain its position in the consumer durable electronics retail landscape in India.

During the financial year 2023-24, the Company achieved total standalone Operating Revenue of Rs. 53,871.85 lakh against Rs. 24,920.48 lakh in the previous year, thereby registered an increase of 116.17% as compared to the previous year. The Company also registered the standalone Net Profit after tax of Rs. 486.21 lakh in the current year against Rs. 250.95 lakh in the previous year, thereby registered an increase of 93.75% in the Net Profit as compared to the previous year.

B. OVERVIEW OF THE GLOBAL ECONOMY:

• Steady growth and disinflation:

The global economic outlook for the coming years presents a picture of steady but modest growth, accompanied by a gradual easing of inflationary pressures. Despite earlier predictions of a global recession, the world has navigated through pandemic-related disruptions, geopolitical conflicts, and a significant inflation surge without major economic crises.

According to the International Monetary Fund ("IMF"), the world economy is projected to maintain a consistent growth rate of 3.2% in both 2024 and 2025, with most indicators pointing towards a soft landing scenario. The overall stability, however, masks divergent trends between advanced economies and emerging markets. Advanced economies are expected to see a slight acceleration in growth, moving from 1.6% in 2023 to 1.7% in 2024 and

1.8% in 2025. In contrast, emerging market and developing economies are anticipated to experience a modest slowdown, decelerating from 4.3% in 2023 to 4.2% in both 2024 and 2025. (Source: World Economic Outlook Report, April, 2024 issued by IMF).

• Positive response of financial markets to easing Central Bank Policies and emerging economic recovery:

The financial markets have responded positively to the prospect of Central Bank with tighter monetary policies, improved conditions and increased capital flows to many emerging markets. The economic recovery has been marked by strong employment growth in numerous regions. These developments reflect both resilient demand and favorable supply-side factors, including the fading of earlier energy price shocks and improvements in labor supply. (Source: World Economic Outlook Report, April, 2024 issued by IMF).

• Navigating inflation and economic divergence:

While inflation trends are generally encouraging, there are areas of concern, particularly in the services sector where inflation remains stubbornly high. There is also notable divergence in economic performance across countries, with some major economies facing fiscal sustainability issues.

The pace of economic convergence for middle and lower income countries has slowed, raising concerns about persistent global economic disparities. There are also potential upside risks, such as the possibility of faster- than-expected inflation declines or productivity boosts from technological advancements like artificial intelligence.

Looking forward, policymakers face the complex task of fine-tuning monetary policy to ensure a smooth landing for inflation while simultaneously addressing medium-term fiscal consolidation. The implementation of supplyenhancing reforms and the promotion of multilateral cooperation will be vital in tackling global challenges, mitigating the risks of economic fragmentation, and fostering sustainable development and growth. This multifaceted approach underscores the intricate balance required to navigate the current economic landscape and work towards a more equitable global economy. (Source: World Economic Outlook Report, April, 2024 issued by IMF).

C. OVERVIEW OF THE INDIAN ECONOMY:

• Growth of Indian Economy:

According to the International Monetary Fund ("IMF"), the Indian economy has grown by 7.8% in 2023 higher than 6.8% in 2022. Further, the Indian economy is projected to grow by 6.8% in 2024 and 6.5% in 2025 with continuing strength in domestic demand and a rising working-age population.

In contrast, growth in emerging and developing Asia is expected to fall from an estimated 5.6% in 2023 to 5.2 % in 2024 and 4.9 % in 2025, a slight upward revision compared with the January 2024. The emerging market and developing economies are expected to grow by 4.2% in both 2024 and 2025. (Source: World Economic Outlook Report, April, 2024 issued by IMF).

• Strong growth and upward revision of forecast:

Indian economy is showing strong growth and resilience in 2024, according to recent United Nation ("UN") projections. The UN has significantly revised its growth forecast for India upwards, now predicting an economic expansion of 6.9% in 2024, up from the 6.2% estimate made earlier this year. This substantial increase reflects Indias impressive economic performance and positive outlook. This shows India as one of the fastest-growing major economies globally, highlighting its economic strength and potential in the face of various global economic challenges.

https://economictimes.indiatimes.com/news/economy/indicators/un-raises-indias-2024-growth-forecast-to-6-9/ articleshow/110217077. cms ?from=mdr)

• Driving forces behind economic expansion:

The main driving forces behind economic expansion are strong public investment and resilient private consumption. The governments commitment to increase capital investment while gradually reducing the fiscal deficit demonstrates a balanced approach to economic management. This strategy appears to be paying off, as evidenced by the improved labor market indicators and higher labor force participation. While external factors such as subdued global demand may impact overall merchandise exports.

• Positive outlook for FY 2024 and FY 2025:

Overall, Indias economic outlook for FY 2024 and FY 2025 appears positive, with steady growth projected and key economic indicators showing improvement. The countrys ability to maintain this growth trajectory will likely depend on continued strong domestic demand, successful navigation of global economic challenges, and sustained focus on key growth drivers like public investment and private consumption.

• Interim Union Budget FY 2024-25:

The Central Government ("government") has unveiled its interim budget ("Budget") for the upcoming fiscal year 2024-25, presenting a comprehensive financial roadmap for the nation. This budget outlines projected expenditures, anticipated receipts, economic growth forecasts, and key fiscal targets, reflecting the governments economic priorities and strategies for the coming year. The government is focusing on long-term economic development and infrastructure growth. The budget is framed against a backdrop of expected economic growth, with nominal GDP projected to expand by 10.5% in 2024-25.

Overall, this interim budget for 2024-25 presents a careful balance between fiscal prudence and economic stimulus. The government aims to achieve its fiscal targets while supporting key sectors of the economy. The emphasis on capital expenditure and new initiatives suggests a forward-looking approach, seeking to lay the groundwork for sustained economic growth in the coming fiscal year and beyond.

D. INDUSTRY STRUCTURE AND DEVELOPMENTS:

• Global Smartphones Market:

According to the Counterpoint Technology Market Research, a global research firm specialized TMT Industry (i.e. Technology, Media and Telecom), the Global smartphone shipments in 2024 are expected to increase by 3% to reach 1.2 billion units. The market seems to have bottomed out, and we expect low-single-digit YoY increases in the longer term. Unlike 2023, emerging markets such as India and the Middle East and Africa (MEA) are expected to drive the global smartphone markets growth in 2024, supported by the budget-economy segment.

• Indian Smartphones Market:

According to the data and statistics of the "India Brand Equity Foundation", the smartphone market in India is projected to grow to US$ 90 billion by 2032 and this growth is fueled by a flourishing economy and changing demographics driving consumer demand.

Indias position in the global smartphone manufacturing landscape has strengthened considerably. In FY 202223, Indias exports of mobile phones doubled from US$ 5.45 billion in 2021-22 to US$ 11.12 billion, cementing Indias position as the 2nd largest mobile manufacturer in the world. The governments ambitious National Policy on Electronics 2019 targets production of one billion mobile handsets valued at US$ 190 billion by 2025, with 600 million handsets valued at US$ 100 billion expected to be exported.

The "Make in India" initiative has been pivotal in boosting domestic smartphone production. According to Counterpoints Make in India service, shipments of "Made-in-India" smartphones reached over 152 million units in 2023.

Various major companies, including but not limited to the following, are making significant investments in the Indian smartphone market:

- Vivo India has already invested US$ 291.09 million and plans to invest more to increase its manufacturing capacity in India.

- Apple also is planning to increase its manufacturing production outside of China. Apple wants to move more than 18% of its iPhone production to India by 2025, up from 7% in 2023.

- Lenovo has also announced that it is considerably expanding its local manufacturing capabilities in India across product categories such as PCs, laptops and smartphones, to satisfy rising consumer demand.

https://www.ibef.org/industry/consumer-durables-presentation

• Global Consumer Durables Market:

In 2024, the revenue generated in the Consumer Electronics market worldwide amounted to US$950.00 billion and it is projected that the market will experience an annual growth rate of 2.90% from 2024 to 2029 (CAGR 20242029). Further, it is predicted that by 2029, the volume of the Consumer Electronics market is expected to reach 9,007.00 million pieces. (Source: https://www.statista.com/outlook/cmo/consumer-electronics/worldwide )

• Indian Consumer Durables Market:

The Indian Appliances and Consumer Electronics (ACE) market is predicted to reach at approximately US$ 17.93 billion by 2025. Indias consumer electronics and home appliances market is set to grow by US$ 2.3 billion between 2022 and 2027, registering a CAGR of 1.31%. This growth is reflected across various segments of consumer durables. By 2025, Indias Consumer Electronics and Appliances Industry is predicted to be the fifth- largest in the world.

With robust growth, India aims to achieve electronics manufacturing worth US$ 300 billion by FY26. This growth spans across various segments including televisions, air conditioners, refrigerators, washing machines and electric lamps & Lighting fittings including tubes. This growth is fueled by increasing disposable incomes, technological innovation, rising popularity of smart appliances, a significant shift towards online sales, increased focus on after-sales service, rapid urbanization, and the availability of easier financing options.

The governments Production Linked Incentive (PLI) scheme has been particularly impactful, attracting investments and boosting domestic manufacturing capabilities in the sector. (Source: https://www.ibef.org/industry/consumer- durables-presentation)

E OPPORTUNITIES:

• Rising disposable income and growing middle class:

Rapidly growing in the standard of living and disposable income level of middle class is not just increasing the purchasing power but also shifting consumer preferences towards premium and technologically advanced products. The aspirational buying behavior of this demographic is driving demand for high-end smartphones and smart home appliances.

• Climate-Driven demand and energy efficiency:

Rising temperatures are catalyzing the Refrigeration and Air Conditioning ("RAC") market. Growth in the RAC market is accompanied by a shift towards energy-efficient models, driven by both consumer awareness and government regulations. Manufacturers are innovating with inverter technology and eco-friendly refrigerants, creating a new sub-segment of green appliances.

• Untapped market potential:

The low penetration rates across various segments present immense growth opportunities which offers a runway for sustained high growth rates in future with potential for market leaders to establish strong brand loyalty among first-time buyers.

• Segment-Specific growth and premiumization:

- Refrigerator market in India is projected to reach to US$ 6.7 billion by FY26

- Air Conditioner market in India is projected to reach to US$ 9.8 billion by FY26.

- According to Morgan Stanley report, owing to a thriving economy and demographic shifts driving consumer demand, the markets for smartphones could triple to US$ 90 billion by 2032.

https://www.ibef.org/industry/indian-consumer-market

• India Smart TV Market:

The India Smart TV Market has experienced significant growth in recent years, with its size valued at USD 11.53 Billion in 2023. Projections indicate continued expansion, with an expected CAGR of 16.57% from 2024 to 2030, potentially reaching USD 33.72 billion by 2030.

https://www.maximizemarketresearch.com/market-report/india-smart-tv-market/22314

Television has long been a cornerstone of entertainment in India, evolving into the modern Smart TV era. These advanced devices offer integrated internet connectivity, providing access to streaming services, on-demand content, and compatibility with wireless devices. Operating on Android systems, Smart TVs enable easy access to popular OTT platforms and social media apps, often featuring voice command capabilities. Smart TV penetration has also been increased, particularly in semi-urban and rural regions.

• Government Initiatives and Make in India:

The Indian government has recently modified the Production Linked Incentive ("PLI") Scheme for White Goods to enhance domestic manufacturing of consumer durables like air conditioners and LED lights. The PLI Scheme for White Goods aims to establish a comprehensive ecosystem for manufacturing components and sub-assemblies for ACs and LED lights in India. This initiative seeks to position India as a key player in global supply chains.

White Goods refer to heavy consumer durables or large home appliances, which were traditionally available only in white. They include appliances such as washing machines, air conditioners, stoves, refrigerators, etc. The white goods industry in India is highly concentrated.

The White Goods PLI Scheme is set to run for a duration of seven years, spanning from the fiscal year 2021-22 to 2028-29, with a total budget of INR 62.38 billion (approx. US$831.27 million). This substantial investment underscores the governments commitment to promoting domestic manufacturing and advancing the Make in India initiative in the white goods sector.

https://www.india-briefing.com/news/white-goods-manufacturing-in-india-changes-to-the-pli-scheme-29854.html/ F THREATS:

• Supply Chain issues:

Disruptions in domestic and global supply chains affect the availability and cost of smartphones, its related accessories and consumer durable electronic goods, leading to potential inventory shortages and increase in their prices.

• Technological obsolescence:

Rapid technological advancements make devices obsolete faster, impacting long-term sales and sustainability as consumers frequently upgrade to the latest models. The rapid pace of technological changes in the mobiles and electronics industry necessitates continuous adaptation and innovation. Failure to keep up with the latest trends and technologies could make the companys offerings less attractive to consumers.

• Import dependency:

Heavy reliance on imports for components exposes the market to geopolitical risks and fluctuating trade policies, which can affect supply stability and cost structures.

• Competition:

Intense competition in the retail market for smartphones, its related accessories and consumer durable electronic goods, maintaining the market share could become increasingly challenging. The Companys reliance on various suppliers for different product segments makes it vulnerable to supply chain disruptions. Any issues with suppliers, such as delays or shortages, could adversely affect inventory levels and sales.

• Government rules and regulations:

Additionally, changes in government regulations, import & export policies or tax structures could impact the Companys cost structure and profitability. Moreover, tariffs, trade restrictions or geopolitical tensions could affect the availability and cost of imported products, influencing the Companys pricing strategy and margins.

• Consumer taste and preferences:

Changes in consumer taste and preferences, such as an increased demand for online shopping or a preference for new brands, could impact the Companys traditional retail model.

G SEGMENT-WISE PERFORMANCE:

The segment wise performance of the Company is briefly described herein below.

• Electronic Gadgets

During the financial year 2023-24, the Company registered Annual Sales of Rs. 51,328.79 lakh which is increased by 143.76% in the current year, against Rs. 21,057.03 lakh in the previous year thereby contributing 95.28% to the total turnover of the Company.

• Electric Vehicles

During the financial year 2023-24, the Company registered Annual Sales of Rs. 309.79 lakh, which is decreased by 87.59% in the current year, against Rs. 2,495.96 lakhs in the previous year thereby contributing 0.58% to the total turnover of the Company.

H. OUTLOOK:

The Companys growth is linked to the overall economic trend, technology upgradation, competition from the local players and well-established players, inflation trends and disposable income of customers. The 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 electronic goods. The Company is continuously investing much time and efforts towards opening and operating the retail stores of the Company.

I. 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 the Company like business operations risks, liquidity risks, logistic risks, market & industry risks, human resources risks, legal risks, technology risks, political risks etc. As 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.

J. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an adequate system of internal controls to ensure that all the assets are safeguarded and insured. Necessary checks and controls are in place to ensure that transactions are properly verified, adequately authorized, correctly recorded and properly reported. The management maintains adequate internal financial control systems encompassing its entire business operations, statutory compliances and financial reports.

K. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

For the year ended 31st March, 2024, the Company has achieved better financial performance in terms of revenue as well as net profits compared to all its previous years. The financial performance of the Company has been summarized in the Boards Report under the heading "Financial Performance of the Company".

L. 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 we emphasizes on welfare of our employees and we strives to engage and retain talented workforce at all levels. There exists peaceful and amicable relations with our employees. As on 31.03.2024, there are total 248 permanent employees on the pay roll of the Company.

M. 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:

Particular	FY 2023-24	FY 2022-23	o/ Change	Explanations for significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios:
(a) Current Ratio (in times)	1.76	2.29	-23.32%	NA
(b) Debt-Equity Ratio (in times)	1.62	0.84	93.12%	This ratio increased due to increase in debt during the year.
(c) Debt Service Coverage Ratio (in times)	0.27	0.51	-47.12%	This ratio decreased due to increase in debt service during the year.
(d) Return on Equity Ratio (in percentage)	18.66%	14.61%	27.75%	This ratio increased due to increase profit during the year.
(e) Inventory turnover ratio (in times)	8.30	8.66	-4.17%	NA
(f) Trade Receivables turnover ratio (in times)	87.06	86.36	0.81 %	NA
(g) Trade payables turnover ratio (in times)	23.91	13.82	73.03%	This ratio increased due to increase in Net purchases during the year.
(h) Net capital turnover ratio (in times)	10.91	8.16	33.77%	This ratio increased due to increase in Net sales during the year.
(i) Net profit ratio (in percentage)	0.90%	1.01%	-10.37%	NA
(j) Return on Capital employed (in percentage)	12.97%	10.89%	19.04%	NA
(k) Return on investment (in percentage)	1.59%	0.17%	825.26%	This ratio increased due to increase in interest income during the year.
(l) Interest Coverage Ratio Ratio (in times)	2.93	4.88	-39.80%	This ratio decreased due to increase in Debt during the year.
(m) Operating Profit Margin (in percentage)	1.98%	2.28%	-13.16%	NA

N. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Particular	FY 2023-24	FY 2022-23	% Change	Reason for change
Return on Net Worth (in percentage)	18.66%	14.61%	27.75%	This ratio increased due to increase in net profit during the year.

O. CONCLUSION:

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward-looking statements. Actual results may differ substantially or materially from those expressed or implied due to various factors like economic conditions, consumer demands & preferences, government regulations & policies, tax laws, natural calamities, interest rates and other incidental factors. The Company, its Directors and Officers assume no responsibility in respect of the forward-looking statements contained herein which may undergo changes in the future on the basis of subsequent developments, information, events etc. The Company does not intend to update these statements.

	For and on behalf of the Board
	Kamlesh Varjivandas Thakkar
Place : Ahmedabad	Chairman & Managing Director
Date : 29th May, 2024	DIN:05132275