Ravelcare Ltd Management Discussions

For the Financial Year ended 31st March, 2026

Pursuant to Regulation 34(2)(e) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management of Ravelcare Limited ("Ravelcare", "Ravel", "the Company") presents its analysis of the industry, business performance and outlook for the financial year ended 31st March, 2026 ("FY26", "the year under review").

ECONOMIC SCENARIO

Global

The global economy remained on a path of modest but uneven recovery during the year under review. Inflationary pressures moderated across major economies, allowing central banks to ease monetary conditions gradually, although geopolitical developments and trade policy uncertainty continued to inject volatility into commodity prices, freight costs and currency markets. Consumer demand in developed markets stayed resilient in services while discretionary goods consumption remained selective, with consumers increasingly gravitating towards value, efficacy and trusted brands.

India

India continued to be among the fastest growing major economies, supported by robust domestic consumption, sustained public capital expenditure, healthy credit growth and a stable macroeconomic framework. Moderating retail inflation and improving rural sentiment supported a gradual broadening of consumption. Digital infrastructure, expanding UPI adoption, deepening e-commerce and quick commerce penetration, and rising smartphone usage in Tier II and Tier III cities continued to reshape how Indian consumers discover and purchase brands. These structural drivers are directly relevant to the Company, whose business model is built on digital-first consumer engagement and direct-to-consumer distribution.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Beauty and Personal Care in India

Indias Beauty and Personal Care (BPC) industry is one of the most attractive consumption categories in the country, with industry estimates placing the market at approximately USD 28-30 billion, growing in high single digits annually. Growth is being propelled by rising disposable incomes, urbanisation, greater grooming consciousness across genders and age cohorts, and the influence of social media and content-led discovery. Within the broader market, premiumisation is a defining trend: consumers are trading up from mass commodity products to specialised, efficacy-led and ingredient-transparent offerings across haircare and skincare.

The Rise of Digital-First and D2C Brands

The direct-to-consumer (D2C) segment of Indian BPC is growing meaningfully faster than the overall market, with online-first brands capturing a disproportionate share of incremental category growth. Consumers increasingly prefer D2C brands for product customisation, ingredient transparency, direct engagement and rapid innovation cycles. The strategic interest of large FMCG majors and global players in acquiring digital-first Indian BPC brands during the year validates the durability of this channel shift and the value being created by focused, digitally native companies.

Personalisation as a Structural Trend

Globally and in India, personalised beauty is emerging as a distinct sub-category, enabled by diagnostic technology, data analytics and flexible manufacturing. Consumers with specific hair and skin concerns are increasingly unwilling to accept one-size-fits-all formulations. The Company believes it is among the early movers in India in personalised haircare and skincare, and that this positioning provides a durable differentiation against both legacy FMCG brands and undifferentiated D2C entrants.

OPPORTUNITIES AND THREATS

Opportunities

Premiumisation and specialisation: Consumers are migrating from commodity personal care to targeted, concern-led solutions such as hair fall control, anti-dandruff regimes, barrier repair and pigmentation correction, which is precisely the space the Company operates in.

Clinical and derm-grade positioning: Rising consumer trust in science-led, actives-based formulations creates headroom for the Companys clinical haircare range and its upcoming derm-grade skincare range.

Repeat-led revenue model: Personal care is a consumable category with natural replenishment cycles. The Companys personalisation engine and customer lifecycle programs are designed to convert first purchases into long-duration repeat relationships, improving customer lifetime value.

Expanding distribution frontier: The emergence of quick commerce and the continued strength of e-commerce marketplaces open new shelves for standardised, concern-led products, alongside the Companys own website.

Deepening digital penetration: Growth of e-commerce and digital payments in Tier II and Tier III India expands the Companys addressable market without proportionate expansion in physical distribution costs.

Threats

Intense competition: The Indian BPC and D2C landscape is highly competitive, with well-funded startups, legacy FMCG players and global entrants competing for the same digital consumer, which exerts pressure on customer acquisition costs.

Rising digital media costs: The Companys customer acquisition is predominantly through digital advertising platforms. Auction-driven inflation in digital media costs can compress marketing efficiency and margins.

Platform and channel concentration: Dependence on a limited set of advertising and commerce platforms exposes the Company to changes in their algorithms, policies and commercial terms.

Input cost volatility: Prices of specialty actives, packaging materials and logistics are subject to inflation and supply disruptions.

Regulatory evolution: Changes in cosmetics regulations, labelling norms, advertising standards and data protection law may increase compliance costs.

COMPANY OVERVIEW AND BUSINESS MODEL

Ravelcare Limited is a digital-first personal care company operating in personalised haircare and skincare. The Companys core proposition is that hair and skin needs differ from person to person, and that superior outcomes require formulations matched to the individual. This proposition is delivered through a proprietary online diagnostic quiz that captures each consumers hair and skin profile, concerns, lifestyle and environmental factors, and maps them to tailored product regimes. During the year under review, the Company achieved a significant corporate milestone with the successful completion of its Initial Public Offering and the listing of its equity shares on the BSE SME platform in December 2025. The IPO comprised a fresh issue of 18,54,000 equity shares of face value Rs. 10 each at an issue price of Rs. 130 per share, aggregating to Rs. 2,410.20 Lakhs. The listing strengthens the Companys governance framework, institutional credibility and access to capital for its next phase of growth. The Company has served over 6,00,000 customers since inception and has accumulated over 1,00,000 product reviews, a consumer feedback base that directly informs product development and reformulation decisions.

Business Model Strengths

Direct consumer relationships: By selling predominantly through its own website and leading e-commerce marketplaces, the Company owns the customer relationship, first-party data and post-purchase engagement, without dependence on multi-layered offline distribution.

Data-led product development: A review and feedback base of over 1,00,000 consumer reviews is systematically mined to identify unmet needs, guide reformulations and prioritise new launches.

Full-funnel digital marketing capability: Performance marketing, influencer and creator partnerships, and lifecycle marketing across WhatsApp and other channels are managed with in-house expertise, enabling rapid iteration and cost discipline.

PRODUCT PORTFOLIO AND INNOVATION

Personalised Haircare (Core Range)

The Companys flagship personalised haircare range comprises shampoos, conditioners, hair masks, scalp treatments and serums, customised across hair textures, scalp conditions and concerns including hair fall, dandruff, frizz and damage repair. During the year, the Company undertook a structured reformulation program for its core shampoo range, driven by systematic analysis of consumer feedback. The program focused on upgraded surfactant systems designed to improve mildness, sensory experience and efficacy across concern categories, benchmarked against leading global personalised beauty brands.

Ravel PRO: Clinical Haircare

During the year, the Company developed Ravel PRO, a clinical, actives-led haircare line targeting consumers with acute and specific scalp and hair concerns. The range comprises dedicated product lines for concerns such as hair fall, damage repair, dandruff, anti-grey, hair growth and scalp health, including targeted serums and scalp ampoules. The range was launched in June 2026, subsequent to the year end. Ravel PRO extends the Companys addressable market into the premium clinical efficacy segment and commands higher realisations than the core range.

Since Ravel PRO products address targeted concerns through standardised formulations, the range is well suited for listing across all major e-commerce marketplaces and quick commerce platforms such as Blinkit, unlocking distribution channels beyond the Companys own website. Over time, this range is also expected to enable the Companys entry into offline retail, further widening distribution reach.

Ravel Derm-Grade Skincare (Under Development)

The Company is currently developing a derm-grade skincare range on a prescription-per-person model, planned for launch by the end of the current calendar year. The portfolio under development spans cleansers, serums, moisturisers, sunscreens and targeted treatments addressing concerns such as barrier repair, pigmentation, acne and anti-aging, formulated with clinically recognised actives. The skincare range is strategically significant: since the Companys revenue today is predominantly haircare-led, skincare will open substantial cross-sell opportunities within the existing customer base and meaningfully increase the lifetime value of every acquired customer.

Technology and Personalisation Infrastructure

The Company continued to invest in its proprietary quiz-based recommendation engine, which powers diagnosis and product mapping on its digital storefront. Ongoing investments in data analytics, marketing automation and business intelligence dashboards strengthen the Companys ability to measure unit economics, channel efficiency and cohort behaviour with precision.

FINANCIAL PERFORMANCE

The financial statements of the Company have been prepared in accordance with applicable Accounting Standards and the provisions of the Companies Act, 2013. Key financial highlights for the year under review are set out below:

Particulars (Rs. in Lakhs)	FY 2025-26	FY 2024-25	Change (%)
Revenue from Operations	2,695.43	2,497.89	7.9%
Other Income	8.29	31.91	(74.0%)
Total Income	2,703.72	2,529.80	6.9%
Total Expenses	1,996.47	1,826.44	9.3%
EBITDA	714.36	713.24	0.2%
Depreciation and Amortisation	7.11	9.88	(28.0%)
Profit Before Tax	707.25	703.36	0.6%
Tax Expense	191.85	194.80	(1.5%)
Profit After Tax	515.40	508.56	1.3%

Revenue from operations grew by 7.9% to Rs. 2,695.43 Lakhs in FY26 from Rs. 2,497.89 Lakhs in FY25. Profit After Tax stood at Rs. 515.40 Lakhs as against Rs. 508.56 Lakhs in the previous year, translating into a net profit margin of 19.1%. The Company maintained healthy profitability even while continuing to invest substantially in customer acquisition, with advertising and promotion remaining the largest cost line, and while absorbing the incremental costs of operating as a listed entity.

The Company remains entirely debt-free, with no borrowings from banks or financial institutions as at the year end. Net worth strengthened to Rs. 3,740.84 Lakhs as at 31st March, 2026 from Rs. 1,034.34 Lakhs a year earlier, driven by the IPO proceeds and internal accruals. The balance sheet position, comprising the IPO proceeds deployed in bank deposits pending utilisation and capital work-in-progress towards the manufacturing unit, provides the Company with significant financial flexibility to fund its growth agenda.

SEGMENT-WISE PERFORMANCE

The Company operates in a single reportable business segment, namely personal care products. Accordingly, segment-wise disclosure requirements under AS-17 are not applicable. Within the portfolio, personalised haircare remained the predominant contributor to revenue during the year, with the clinical haircare range and the upcoming skincare range positioned as the key growth vectors going forward.

GROWTH STRATEGY: CUSTOMER ACQUISITION AND LIFETIME VALUE

The Companys central strategic priority at this stage of its journey is the aggressive acquisition of new customers. Digital customer acquisition costs across the BPC industry are structurally rising as competition for the same digital consumer intensifies, and Management believes customers acquired today will be materially cheaper than customers acquired in future years. The economics of this strategy rest on the Companys repeat behaviour: the Company currently enjoys a repeat rate in excess of 35%, which means the cost of acquiring a customer is recovered not merely on the first order but across a stream of repeat purchases over the customers lifetime. The strategic focus is therefore on getting the consumer to try Ravel once, after which the personalisation experience, product efficacy and lifecycle engagement programs work to retain them. This strategy compounds further with portfolio expansion: with revenue today primarily driven by haircare, the launch of the skincare range will create significant cross-sell opportunities within the existing customer base, increasing the lifetime value of every customer already acquired and improving the return on all past and future acquisition spend. In support of this strategy, the Company also plans to invest significantly in activating influencer and creator partnerships at scale. These partnerships are expected to deliver net new reach beyond the audiences addressable through performance advertising alone, and to build brand credibility across diverse consumer cohorts through authentic, creator-led advocacy.

MARKETING, DISTRIBUTION AND CUSTOMER ENGAGEMENT

The Company follows a full-funnel digital marketing approach spanning performance advertising on leading digital platforms, influencer and creator partnerships, content-led education and conversion-optimised landing experiences. During the year, the Company deepened its lifecycle marketing capability, deploying WhatsApp-based journeys across the customer lifecycle covering onboarding, replenishment reminders, reorders and win-back programs, thereby improving repeat purchase behaviour and customer lifetime value. Distribution is currently predominantly digital, through the Companys own website and leading e-commerce marketplaces. This channel architecture provides nationwide reach, granular measurement of marketing return, and direct ownership of consumer data, while keeping fixed distribution costs low. With the launch of the Ravel PRO

range, the Companys distribution footprint is set to widen across marketplaces and quick commerce platforms, with offline retail as a future avenue.

RISKS AND CONCERNS

The Company has an established process for identification, assessment and mitigation of risks. Key risks and mitigation approaches are summarised below:

Customer acquisition cost risk: Rising digital media costs can compress marketing efficiency. The Company mitigates this through continuous creative testing, diversification across acquisition channels, growth of organic, creator-led and referral traffic, and lifecycle programs that raise repeat revenue share.

Concentration risk: Dependence on a limited number of digital platforms for advertising and sales is mitigated through channel diversification, an owned website-led model, expansion into marketplaces and quick commerce, and a growing base of first-party customer data.

Supply chain and input cost risk: The Company works with multiple vetted contract manufacturers and suppliers for actives and packaging, maintains appropriate inventory buffers for critical inputs, and periodically reviews sourcing arrangements to manage cost and continuity.

Product and regulatory risk: All formulations comply with applicable cosmetics regulations and quality standards. The Company follows structured stability, safety and quality assurance protocols with its manufacturing partners.

Technology and cyber risk: As a digital-first business, the Company depends on the availability and security of its technology infrastructure. Access controls, data backups and platform-level security measures are maintained, and data privacy practices are aligned with applicable law including the Digital Personal Data Protection Act, 2023.

Key person and talent risk: The Company continues to strengthen its leadership bench, institutionalise processes and deploy performance-linked incentive structures to attract and retain talent in critical functions.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has internal control systems commensurate with its size, scale and the nature of its operations. These controls are designed to ensure orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The control framework covers procurement, inventory, revenue, marketing spend authorisation, payroll and statutory compliance. The Companys accounting software maintains an audit trail (edit log) facility in accordance with applicable requirements. The Audit Committee of the Board periodically reviews the adequacy and effectiveness of internal controls, observations of the auditors and the corrective actions taken. During the year, following its listing, the Company further strengthened its governance and compliance framework in line with the requirements applicable to listed entities.

INFORMATION TECHNOLOGY AND DIGITAL INFRASTRUCTURE

Technology is central to the Companys business model. The proprietary diagnostic quiz and recommendation engine, e-commerce storefront, marketing automation stack, WhatsApp commerce journeys and internal analytics dashboards together constitute the Companys digital backbone. During the year, the Company invested in business intelligence tooling to track profitability, channel-level marketing efficiency and cohort behaviour in near real time, sharpening capital allocation decisions on marketing spend.

HUMAN RESOURCES

The Company regards its people as central to its ability to compete in a fast-moving category. As on 31st March, 2026, the Company had 23 permanent employees. During the year, the Company strengthened its team across performance marketing, creative strategy, content, operations and supply chain, and introduced structured, outcome-linked incentive frameworks for key growth roles to align individual rewards with company performance. Industrial and employee relations remained cordial throughout the year.

OUTLOOK

The Company enters FY27 with a substantially broader product platform and a materially stronger balance sheet than a year ago. The strategic agenda for the near term rests on four pillars:

Aggressive customer acquisition: Scaling acquisition investment while acquisition costs remain favourable relative to their expected future trajectory, with a repeat rate in excess of 35% underwriting the lifetime value of each acquired customer.

Scaling Ravel PRO: Driving distribution, awareness and trial for the clinical haircare range launched in June 2026, including expansion across marketplaces and quick commerce platforms, with offline retail as a future distribution avenue.

Launching derm-grade skincare: Completing development and launching the skincare range by the end of the current calendar year, unlocking cross-sell into the existing haircare customer base and raising customer lifetime value.

Creator-led brand building: Significant activation of influencer and creator partnerships to deliver net new reach and build credibility across diverse consumer cohorts. Management remains confident of the structural growth opportunity in Indian personalised beauty and personal care, and believes the Company is well positioned to capture a disproportionate share of this opportunity through its differentiated model, consumer data depth and disciplined execution.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may constitute forward-looking statements within the meaning of applicable securities 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 economic conditions affecting demand and supply, price conditions in domestic markets, changes in government regulations and tax laws, and other incidental factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.