Palred Technologies Ltd Management Discussions

FOR THE YEAR 25-26

The Company has three subsidiaries, Paired Electronics Private limited (formerly known as Paired Online Technologies Private Limited} (PEP), Palred Technology Services Private Limited (PTS) and Palred Retail Private limited (PRP). Palred together with its subsidiaries, is hereinafter referred to as “the Group."

The Company is a Public Limited Company incorporated and domiciled in India having its registered office in Hyderabad, Telangana. The Company is listed on Bombay Stock Exchange and National Stock Exchange of India Limited.

1. SUBSIDIARIES:

Paired Electronics Private Limited (PEP)

Palred Electronics Private Limited, through its flagship brand pTron, continues to build on its vision of delivering smart digital accessories to Indian consumers at value-driven prices. The Company operates across product categories including TWS, wired and wireless headphones, Bluetooth Speakers, Power Banks, Cables, Chargers, IT accessories, auto accessories and personal care accessories. pTron products are distributed through a mix of online marketplaces, offline retail channels, quick-commerce platforms and B2B partnerships.

FY2025-26 was a year of continued consolidation and operational improvement, as the Company navigated a challenging market environment while strengthening its focus on margins, in-house manufacturing, product portfolio optimisation and channel diversification.

Economic and Industry Overview

The Indian consumer electronics industry continued to face a challenging environment during FY2025-26. Cautious consumer spending, intense competition and significant pricing pressure across e-commerce platforms affected demand and margins in value-focused categories. The audio category, particularly TWS, continued to experience saturation, aggressive discounting and price-led commoditisation.

At the same time, utility-led accessories such as Power Banks, Cables and Chargers remained relatively resilient. Quick- commerce platforms also continued to gain relevance for fast- moving accessories, offering an efficient route to meet immediate and need-based consumer demand.

Against this backdrop, pTron continued to focus on product quality, cost control, in-house manufacturing and disciplined channel expansion.

Performance Overview

The performance of pTron in FY2025-26 reflected continued pressure on the top line. Revenue was lower than the previous year, primarily due to demand and pricing pressure in certain core categories. However, the Company achieved a meaningful improvement in margins through sharper product selection, SKU rationalisation, tighter cost control and increased in-house manufacturing.

As a result, losses reduced despite lower revenue. Audio products, including TWS, speakers and over-the-ear headphones, remained the largest category for pTron. Power Banks continued to be an important utility-led category. During the year, the Company also ventured into IT accessories, auto accessories and personal care accessories to broaden its portfolio and create additional growth opportunities.

The Company further strengthened its in-house manufacturing capabilities at its Nacharam facility, Hyderabad. Several products across existing and newly introduced categories are now manufactured in-house, enabling better control over quality, costs, lead times and supply-chain responsiveness.

Amazon and Flipkart continued to be the largest sales channels for pTron. The Company also increased its presence through quick-commerce platforms such as Swiggy Instamart and Zepto, along with other online, offline and B2B channels.

Key Financial Highlights:

• Revenue: Total revenue declined by 8.64% year-on-year, reflecting weaker performance in certain core segments

• Profitability: The Company reported a consolidated net loss of Rs.751.82 lakhs, compared to Rs.1033.20 Lakhs in the previous year. Despite the decline in revenue, the loss reduced due to improved margins, tighter cost control, SKU rationalisation and increased in-house manufacturing.

• Margins: Margins improved during the year, supported by better product mix, local assembly, sourcing efficiencies and reduction in low-contribution products.

Business Strategy

In FY2025-26, pTron continued to focus on the following core pillars:

1. Manufacturing Efficiency: Strengthening in-house manufacturing to improve quality, cost control, supply-chain responsiveness and lead times.

2. Channel Diversification: Expanding through major marketplaces, quick-commerce platforms, offline distribution and B2B partnerships.

3. Product Portfolio Optimisation: Rationalising low-performing SKUs, strengthening relevant categories and expanding into IT accessories, auto accessories and personal care accessories.

4. Cost and Marketing Rationalisation: Managing procurement, inventory, logistics and marketing expenditure with focus on return on investment and contribution margins.

Segment-wise Performance

• Audio: Audio products, including TWS, speakers and over- the-ear headphones, remained the largest category. The TWS category continued to face high competition, lower average selling prices and aggressive discounting.

• Power Banks: Power Banks continued to show relatively stable demand, supported by utility-led consumption and demand for fast-charging products.

• Speakers: Speakers continued to contribute to the portfolio through value-focused offerings and product improvements.

• Cables and Chargers: Demand remained relatively steady, supported by replacement and upgrade cycles.

• New Categories: IT accessories, auto accessories and personal care accessories were introduced to broaden the product portfolio and create new growth opportunities.

Marketing and Promotional Activities

Marketing efforts were managed in a targeted and ROI-driven manner. Focus areas included digital campaigns, marketplace visibility, quick-commerce campaign alignment, influencer-led product promotion and selective offline activity.

The Company continued to balance brand visibility with disciplined expenditure and focused on improving returns from marketing investments.

Risks and Concerns

The Company continues to monitor key risks that could impact its performance going forward:

• Demand saturation and aggressive discounting in value- focused consumer-electronics categories.

• Depreciation of the Indian Rupee, which may increase the cost of imported components, raw materials and finished goods.

• Increase in logistics and freight costs due to exchange-rate movements, fuel prices and supply-chain conditions.

• Fluctuations in the prices of electronic components, batteries, packaging materials and other raw materials.

• Inventory and product-obsolescence risk arising from changing consumer preferences and short product cycles.

• Product returns, quality concerns and marketplace policy changes that may affect margins and customer experience.

Outlook

pTron will continue to focus on improving margins while progressively increasing revenue. The Company will strengthen in-house manufacturing, improve the product and channel mix, scale relevant new categories and deepen its presence across quick commerce, offline distribution and B2B channels.

While the market environment remains competitive, the Company believes that the operational measures implemented during the year provide a stronger foundation for sustainable improvement.

Conclusion

FY2025-26 was a year of continued challenge as well as operational improvement for pTron. While revenue was lower than the previous year, improved margins and reduced losses reflect the benefits of the Companys actions on portfolio rationalisation, cost control and in-house manufacturing. The Company remains committed to building a stronger, more efficient and sustainable business.

Paired Technology Services Private Limited (PTS)

PTS offers a bouquet of Products through its brand “Xmate” that is exclusively available on Amazon.in. Xmate Sells products like Bluetooth headsets, Bluetooth speakers, wired headsets, chargers and cables, Computer Accessories, Cameras & Camera Accessories etc. The brand faced many challenges since inception because of high advertisement costs and competition from other big brands. The Company was not able to achieve desired growth and it continues to make losses. Hence, the Company has decided to exit “Xmate” brand business.

Paired Retail Private Limited (PRP)

Palred Retail Private Limited owns ecommerce website, ptron. in and www.LatestOne.com that specialize in selling of tech and mobile accessories such as Bluetooth speakers and headsets, cables, power banks, headsets, smart watches, fashion accessories etc.

FINANCIAL PERFORMANCE:

A. Sources of Funds

1. Equity Share Capital

As on 31st March 2026, the Company has only one class of issued shares - Equity Shares of Par value of Rs. 10/- per share. The Authorised Capital of the Company is Rs. 35,00,00,000/- (Thirty Five Crores) divided into (a) 2,80,38,800 (Two Crore Eighty Lacs Thirty Eight Thousand Eight Hundred Only) shares of Rs. 10/- (Rupees Ten Only) each and (b) 6,96,120 (Six Lakhs Ninety Six Thousand One Hundred and Twenty) Preference Shares of Rs.100/- each. The Paid up Equity Share Capital of the Company as on date of this report is Rs. 12,23,25,660 (Twelve Crores Twenty Three Lakhs Twenty Five Thousand Six Hundred and Sixty) divided into 1,22,32,566 Equity Share of Rs. 10/- per share.

2. Other Equity:

2.1. Securities Premium Account:

The balance in Securities Premium Account as on March 31, 2026 was Rs. 9670.30 Lakhs as compared to the balance in Securities Premium Account as on March 31, 2025 was Rs. 9670.30Lakhs.

2.2. Capital reserve:

On a Standalone and Consolidated Basis, the Balance as at March 31, 2026, amounted to Rs. 142.80 Lakhs which was the same as previous year.

2.3. General Reserve:

On a Standalone and Consolidated Basis, the balance as at March 31, 2026 stood at Rs. 1325.24 Lakhs which is the same as previous year.

2.4. Retained Earnings:

On a Standalone Basis, the balance as at March 31, 2026 stood at Rs. (5385.23) as compared to Rs. (5600.11) Lakhs in previous year. On a Consolidated Basis, the balance as at March 31, 2026 stood at Rs. (8052.36) as compared to Rs. (7520.35) as Lakhs in previous year.

3. Liabilities:

3.1. Non-current Liabilities:

Particulars	Standalone	Consolidated
	2026	2025	2026	2025
Other Financial liabilities	3.65	8.70	105.09	148.10
Employee benefit obligations	14.71	11.63	69.52	66.56
Total	18.36	20.33	174.61	214.66

The Company provides for gratuity for employees in India as per the Payment of the Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionally for 15 days salary multiplied for the number of the years of service. The gratuity plan is unfunded.

3.2. Current Liabilities:

Particulars	Standalone	Consolidated
	2026	2025	2026	2025
Financial Liabilities
Borrowings	0	0	6084.22	5587.78
Lease Liabilities	6.00	6.00	59.03	95.82
Trade payables	0	0	5728	0
Other Financial liabilities	178.98	126.27	1079.42	905.90
Other Current liabilities	46.25	98.23	60.44	124.39
Employee benefit obligations	0.47	2.51	18.87	3.63
Total Current Liabilities	231.70	233.01	7359.26	6,717.52

On standalone basis, the Company has increased its total current liabilities to Rs. 231.70 Lakhs stood as on 31st March, 2026 as compared to Rs. 233.01 Lakhs in the previous year.

On consolidated basis, the Company has decreased its total current liabilities to Rs. 7359.26 Lakhs stood as on 31st March, 2026 as compared to Rs. 6717.51 Lakhs in the previous year.

B. Application of Funds:

1. Non- Current Assets:

Particulars	Standalone	Consolidated
	2026	2025	2026	2025
Property plant & Equipment	2.34	2.43	85.44	110.82
Right of use of Assets	8.52	13.39	138.05	216.94
Goodwill (Consolidation)	0	0	0	0
Intangible Assets	0	0	12.23	1.86
Financial Assets Investments Deposits	1100.00	1100.00	41.49	64.24
Other non- current assets	313.43	366.29	386.19	439.91
Total Non-Current Assets	1424.29	1482.11	663.40	833.76

Investments in Subsidiaries/ associates

Paired Electronics Private Limited (formerly known as Paired Online Technologies Private Limited):

During the period under report, the Company has not invested in Palred Electronics Private Limited.

The Company holds 78.17% stake in the said subsidiary.

Palred Technology Services Private Limited:

During the period under report, the Company has not invested in Palred Technology Services Private Limited.

The Company holds 100% stake in the said subsidiary.

Palred Retail Private Limited:

During the period under report, the Company has not invested in Palred Retail Private Limited.

The Company holds 83.71% stake in the said subsidiary.

2. Current Investments, Cash and Cash Equivalents:

On a standalone basis, balance in current investments is Rs. NIL Lakhs as at March 31, 2026 and March 31, 2025. The cash and bank balance stand at Rs. 5856.38 Lakhs as at March 31, 2026 as compared to Rs. 5528.77 Lakhs as at March 31, 2025.

On a consolidated basis, balance in current investments is Rs. NIL Lakhs as at March 31, 2026 and March 31, 2025. The cash and bank balance stand at Rs. 5922.25 Lakhs as at March 31, 2026 as compared to Rs. 5582.77Lakhs as at March 31, 2025.

III. RESULTS OF OUR OPERATIONS:

1. Income:

On a standalone basis, the Company has earned Rs. 150.00 Lakhs as Income from Operations & Rs. 384.52 Lakhs as Other Income from Dividend and interest from non-trade investments.

On a Consolidated basis, the Company has earned revenues of Rs. 7720.47 Lakhs from operations and Rs. 479.99 Lakhs from other income sources.

As on date of this report, the Company did not invest anything in Palred Electronics Private Limited, Palred Retail Private Limited & Palred Technology Services Private Limited. The Investment in Subsidiaries has Net carrying Value Rs. 1100.00 Lakhs as on date.

Palred Electronics Private Limited (formerly known as Palred Online Technologies Private Limited) has earned a total revenue of Rs. 7795.59 Lakhs in FY 2025-26 as compared to Rs. 8587.29 Lakhs in FY 2024-25 resulting in 10.16% decrease in net revenue year on year basis.

Palred Technology Services Private Limited has earned a total Revenue of Rs. 15.75 Lakhs as compared to NIL in FY 2024-25 resulting in 100% increase in net revenue year on year basis.

Palred Retail Private Limited has earned a total Revenue of Rs. 18.78 Lakhs in F.Y. 2025-26 as compared to Rs. 0.87 Lakhs in FY 2024-25 resulting in to increase of 95.37% in Net Revenue.

Thus on a consolidated basis, the total revenue of the Company is Rs. 8,200.46 Lakhs compared to Rs. 8,976.62 Lakhs in previous year.

2. Expenditure:

On a Standalone Basis, the expenditure incurred towards employee benefit expenses is Rs. 74.87 Lakhs as against Rs. 73.88 Lakhs of previous year and Other Expenses are Rs. 79.15 Lakhs as against Rs. 76.97 Lakhs of previous year.

On a Consolidated Basis, the Total Expenditure is Rs. 8844.10 Lakhs as against Rs. 9838.71 Lakhs of previous year.

3. Operating Profit:

On a standalone basis, the company has earned operating profit of Rs.374.60 Lakhs as against profit of Rs. 381.37Lakhs in previous year.

On a Consolidated Basis, the company has incurred operating loss of Rs. (744.41) Lakhs as compared to Loss of Rs. (1,036.65) Lakhs of previous Year.

4. Depreciation and Amortisation:

On a standalone basis, we provided Rs. 4.95 Lakhs and Rs. 5.04 Lakhs for the years ended March 31, 2026 and March 31, 2025 respectively.

On a consolidated basis, we provided Rs. 108.17Lakhs and Rs. 123.35 Lakhs for the years ended March 31, 2026 and March 31, 2025 respectively.

5. Net Profit/Loss after tax:

On a standalone basis, the company has earned net profit of Rs.274.29 Lakhs as against Profit of 203.78 lakhs in previous year. On a Consolidated Basis, the company has incurred net loss of Rs. (751.82) Lakhs as compared to loss of Rs. (1033.20) Lakhs of previous Year.

6. Liquidity:

On a standalone basis, the company has operations in F.Y. 202526. The Company has utilized Rs. 43.58 Lakhs from investing activities during 2025-2026 compared to generation of Rs. 38.80 Lakhs during 2024-2025. The Company has also gained Rs. (50.91) Lakhs from operating activities during 2025-2026 compared to Rs. (27.42) Lakhs utilized during 2024-2025.

On a Consolidated Basis, the net cash used in operations is Rs. 45.59 Lakhs as against 1353.72 Lakhs net cash used in previous Year.

7. Related Party Transactions:

These have been discussed in detail in notes to the standalone Financial Statements in Annual report.

8. Events occurring after Balance Sheet Date- NIL

IV. STRATERGY, OUTLOOK, OPPORTUNITIES AND THREATS:

A. Objective and Strategy:

Palred Group aims to become a market leader in various products of Consumer Electronics business in India. The Company aims to achieve this unique position by combination of following factors:

i. Creation of Innovative Products that are geared towards customer needs and that can be produced economically

ii. Focus on enhancing customer benefit in terms of products and services as well as on close consumer contact

iii. Proactive identification of future needs and technical applications

iv. High value addition through combination of technology, systems & processes

v. Simplification of a complex business involving continuously changing products and thousands of stock keeping units (SKU)/items.

vi. End-to-end integration and implementation of Systems, Processes and Automation for efficient and scalable operations.

vii. High quality Products backed by warranty

viii. Steady and continuous development of brand (PTron)

b. Outlook, Risks and Concerns:

The Consumer Products Industry has been experiencing very intense competition for many years and we are operating in a market that is changing very quickly. The Customers have many options to choose from large and established brands and this may result in loss of our market share affecting the profitability. We are dependent on number of contract manufacturers and component suppliers. There may be a situation where these manufacturers and component suppliers may fail to supply the required products / parts which may adversely impact our cash flows and profitability. We are also subject to risks associated with geographical tensions & foreign exchange fluctuations.

The Company is taking all appropriate measures to mitigate and safeguard the Company from above risks.

B. Intellectual Property Infringement:

As product development depends on the intellectual property created by its employees, we need to ensure that the same do not infringe any other proprietary technology rights. We have intellectual property rights to take care of trade secrets, copyright and trademark laws and confidentiality agreements for our employees, third parties offering only limited protection. The steps taken by us as well as laws of most advanced countries do not offer effective protection of intellectual property rights. Third parties could claim infringement of property rights against the Company or also assert the same against our customers, which would require protracted defence and costly litigations on behalf of our customers.

C. Risks and risk management and their implementation:

The systematic analysis, evaluation and management of potential risks are decentralized within the Palred Group. Every organizational unit is responsible for detailing its own risk register, which it must then use to establish countermeasures for managing risks. The purpose is to identify and avert potential damage to the company at an early stage. All registers are centrally coordinated and aggregated so the Management Team has an overview at all times of the most significant risks and the measures being taken to manage them. Within the scope of independent audits, the Audit Department monitors the individual corporate entities with regard to early risk identification and compliance management by performing random inspections. The Management Team is informed directly and immediately of the findings.

The risks of procuring certain parts and components, product compliance and IT security are among the most important issues for which the Palred Group is taking countermeasures. IT security risks are addressed through technical and organizational measures. Effective customer management minimize the impact of potential defaults on receivables.

Financial Performance

Prudent Financial Planning, effective resource allocation and tight financial control have ensured that the cash flows of the Company remain healthy. The ability of the Company to raise credit remains unimpaired.

V. INTERNAL CONTROL SYSTEMS AND ADEQUACY:

The Company has adopted strong and automated internal business controls and a process framework that is not only adequate for its current size of operations but can effectively support increases in growth and complexity across our business operations. A well established and empowered system of internal financial audits and automated control procedures ensures prudent financial control, flexibility in terms of process changes to enable course correction.

Internal auditors submits reports and updates to the audit committee of the Board, which conducts frequent reviews and provides direction and operational guidance on new processes to be implemented to further enhance efficiencies within the Company.

The Company is in the process of implementing Enterprise Resource Planning along with various business controls which would have automatic internal control systems to identify errors and also provide better MIS.

VI. HUMAN RESOURCES:

A. Objective and Strategy:

Capability building, Talent Management and Employee Engagement remain the key focus of your companys Human Resource Strategy. Your Company has continued to build on its capabilities in getting the right talent to support the different technology areas. They are backed by robust management training schemes, hiring of key management personnel, and sales training.

Human Resources are the most valuable asset for the Company and Palred Technologies continues to seek, retain and enrich the best available talent. The Human Resource plays an important role in the growth and success of the Organization. Your Company has maintained cordial and harmonious relations with all the employees.

The Company provides an environment which encourages initiative, innovative thinking and rewards performance. The Company ensures training and development of its personnel through succession planning, job rotation, on-the-job training and various trainings and workshops.

B. Culture, Values and Leadership

Your Company has a written code of conduct and ethics to make employees aware of ethical requirements and Whistle Blower Policy for reporting violations, if any.

Your Company has internal structured succession planning to take care of loss of any member of senior management or other key management personnel. Since inception your Company is committed to developing next generation leaders and conduct personality development and development work of skills acquired by them over the years. Your Company encourages an “Equal Employment Opportunity Policy” which discourages discrimination for employment on account of sex, race, colour, religion, physical challenge and so on.

As the Company operates in a niche industry that requires high techno functional expertise. The employees constantly need to enhance their technical and functional knowledge and so regular training sessions on specific technical skills and domain knowledge were conducted.

VII. CAUTIONARY STATEMENT:

Statements in the “Management Discussion and Analysis” describing the companys objectives, estimates, expectations or projections may be “forward looking statements” within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations; include Government regulations, patent laws, tax regimes, economic developments within India and countries in which the Company conducts business, litigation and other allied factors.

VIII. DETAILS OF SIGNIFICANT CHANGES (I.E., CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN THE KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREOF:

Particulars	Standalone basis	Remarks
	2025-26	2024-25
Debtors Turnover Ratio	0	0	There are no trade receivables as at the balance sheet date.
Inventory Turnover Ratio	0	0	There is no Inventory
Interest Coverage Ratio	0	0	There is no Finance Cost.
Current Ratio	25.30	23.74	Improvement in current ratio is due to creation of additional fixed deposits.
Debt Equity Ratio	0	0
Operating Profit Margin Ratio	(0.06)	2.54	During the year, there is no exceptional adjustments like reversal of impairment on Investments held by the Company.
Net Profit Margin Ratio	1.83	0.38	Impairment on Non-current assets has led to Decrease in profits in previous year

 

Particulars	Consolidated basis	Remarks
	2025-26	2024-25
Debtors Turnover Ratio	2.91	3.70	The decrease in the ratio was primarily due to lower revenue during the year.
Inventory Turnover Ratio	115	3.09	The decrease in the ratio was primarily due to higher inventory levels and lower turnover during the year.
Interest Coverage Ratio	-0.31	-0.53	The ratio improved primarily due to a reduction in finance costs and lower losses during the year.
Current Ratio	1.46	1.60	There was no significant change in the ratio compared to the previous year.
Debt Equity Ratio	1.41	115	The increase was primarily due to higher borrowings and a reduction in equity.
Operating Profit Margin Ratio	-0.68	-0.03	The decline was primarily due to lower revenue and deterioration in operating profitability.
Net Profit Margin Ratio	-010	-0.12	The ratio improved primarily due to a reduction in net losses during the year.

Return on Net Worth:

Particulars	Standalone basis	Consolidated Basis
	2025-26	2024-25	2025-26	2024-25
Return on Net Worth	3.97	5.64	-0.18	-0.20

There is decrease in Return in Return on Net Worth ratio on standalone basis is due to increase in shareholders net worth. On Consolidated basis, the ratio improved marginally due to a reduction in losses compared to the previous year.

IX. DISCLOSURE OF ACCOUNTING TREATMENT:

During the preparation of Financial Statement of FY. 2025-26 the treatment as prescribed in an Accounting Standard has been followed by the Company. There is no discrepancy in Accounting Treatment as followed by the Company in current financial year as compared to previous financial year.