Munoth Communication Ltd Management Discussions

1. Industry Structure and Development:

The global smartphone market size was valued at USD 457.18 billion in 2021 and is projected to grow from USD 484.81 billion in 2022 to USD 792.51 billion by 2029, exhibiting a CAGR of 7.3% during the forecast period. Based on our analysis, the global market had exhibited a de cline of -7.8% in 2020 as compared to 2019. The global COVID-19 pandemic has been unprec edented and staggering, with smartphones experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels.

A smartphone is a mobile handset that empowers advanced access to internet-based facilities and other digital functions. Platforms including iOS, Android, Windows Phone, and others support a broad range of applications created by third-party originators. Factors such as governmental support to develop telecom infrastructure, budget-centric product launch, growing 5G technology, Artificial Intelligence (Al) and other technologies, and importantly, the increasing disposable income are contributing to market growth.

In the current era, 5G is a trending feature in mobile phones, specifically across the U.S., India, China, South Korea, U.K., Japan, and others. The 5G compatibility is anticipated to replace the existing handset within the next five years. This trend is due to their ease of shift towards embedded services such as cloud storage, content subscription, and access to the high-speed network. For instance, Global System for Mobile Communications (GSMA) stated that, by 2025, 20% of global connections would have 5G connections, with strong development across North America, Asia Pacific, and Europe. The Internet of Things (loT) would bean integral part of the 5G era.

The amplified demand for virtual and augmented reality is also improving the market presence of 5G-compatible mobile handsets. In addition, the availability of low-cost, low-power consumption with fast charging capability is creating top spots across the globe. This, therefore, brightens the smartphone market growth across both developing and developed countries.

2. Segment-Wise Performance:

The company is currently operating in a single segment, i.e., selling and distribution of mobile phones and accessories.

3. Future Plans and Outlook:

The Company will establish a unit to assemble power banks and battery packs as the overall sale of power banks has substantially gone up.

4. Business Operations:

Your Company has made no sales for the year ending 31st March 2025 and 31st March 2024. Further, the Company has made a loss of Rs. 39,48,180/- for the year ending 31st March 2025 as against Rs. 24,18,100/- for the year ending 31st March 2024.

5. Strengths and Weaknesses:

The demand for the handset market is huge, and the governments support for domestic manufacturing will strengthen the industry.

Mobile device adoption among the youth population in the country and the continual decline of prices of mobile phones, smartphones, and tablets are driving the growth of the mobile accessory market in India.Online retailing also plays a significant part, offering the convenience of cash-on-delivery payment options and cheaper offers for various products as compared to physical stores.

However, the mobile handset industry faces problems relating to:High service costs, expensive infrastructure, and government regulations.There is a huge disparity in the mobile accessory market, with several players competing for market share due to Chinese manufacturing infra structure.

6. Opportunities and Threats:

Mobile accessories are also considered a style statement today, and brands are focusing on making them trendy and attractive. There is currently no single brand available in India which manufactures all mobile phone accessories.

Low-cost manufacturing and parallel imports have led to the advent of a huge unorganized market, the size of which is estimated to be about 60%.

7. Outlook, Risks and Concerns:

The rise in disposable income has revolutionized customer buying and spending trends, especially in urban areas. Mobile device adoption amongst the youth population in the country and their spending patterns provide strong stimulus for growth in adoption. The following are the key trends shaping up the outlook of the global mobile phone accessories market:

Key Trends in Indias Mobile Phone Accessories Market:

? Irregular electricity & power distribution infrastructure in India serves as a catalyst for consumption of power banks. In some cases, mobile phone users in India lack proximity to suitable power sources, which further necessitates the use of accessories such as power banks. Buying power banks that could charge multiple devices in a go is trending in the mobile phone accessories market in India. In the span of the next ten years, sales of power banks in India will account for over $350 million in terms of revenues.

? Demand for modular smartphones and mobile phones is likely to increase in India, providing an opportunity for mobile phone accessories that are limited to compatibility with specific device connectors. Furthermore, various products sold as mobile phone accessories in India have been able to attain compatibility with computers and laptops and vice versa, broadening the scope of end-use among consumers.

? Technological advancements are openly welcomed by Indian consumers, triggering an opportunity for sales of other mobile phone accessories such as keyboard attachments, cameras, dongles, selfie sticks, thermal imaging cameras, VR headsets, protective screens, and wireless earbuds, among others. With the surge in sales of related products, the mobile phone accessories market in India is likely to generate over $150 million in revenues.

? Multi-brand stores are trending as the most-preferred distribution channel for buying mobile phone accessories in India. States in North India will continue to dominate by accounting for over 30% of the market revenues, while states in South and West India will collectively account for half of Indias mobile phone accessories revenues in the next ten years.

8. Human Resources/lndustrial Relations:

Your Company considers its Human Resources as its most valuable asset among all other assets of the Company. It has been the policy of the company to promote talent by providing opportunities to develop themselves within the organization. The Company continued to maintain cordial and harmonious relations with its employees.

9. Internal Control System and Adequacy:

Your Company lays emphasis on integrated control systems and accountability and has been maintaining an adequate system in place, commensurate with its size and nature of business.

10. Cautionary Statement:

Statements in the Management Discussion and Analysis regardingthe Companys objectives, estimates, and expectations are within the scope of applicable laws and regulations. Actual performance may differ from those either expressed or implied.