Rockingdeals Circular Economy Ltd Management Discussions

The management of Rockingdeals Circular Economy Limited is pleased to present its analysis report on the performance and future outlook of your company.

Global Economics Review

In 2024, the global economy experienced moderate growth while contending with persistent inflationary pressures and ongoing geopolitical instability. The year was also shaped by several major elections, whose immediate impacts are evident, though their long-term consequences remain uncertain. Monetary policy particularly interest rate shifts in advanced economies remained in sharp focus. Emerging markets delivered mixed results, influenced by commodity price movements and debt vulnerabilities. At the same time, trade frictions and supply chain disruptions continued to weigh on global commerce and investment, while geopolitical volatility persisted.

Technological progress, especially in artificial intelligence and renewable energy, brought both significant opportunities for productivity improvements and challenges linked to workforce transformation. Together, these forces created a dynamic yet uncertain environment for businesses and policymakers alike.

Looking ahead, global growth in 2025 is projected to slow to 2.8%. While inflation is expected to ease further, the pace of decline will likely vary across regions. Geopolitical tensions and trade-related uncertainties will continue to pose material risks. To navigate this environment, a balanced policy mix will be critical one that not only mitigates near-term risks but also strengthens medium-term growth through structural reforms and greater multilateral cooperation.

(Source: Global Economic Outlook, IMF)

Indian Economy

Indias real GDP is estimated to grow at 6.5% in FY 2024 25, reflecting a steady recovery to pre-COVID levels. Although the pace of growth fell short of earlier expectations, India remains one of the fastest-growing major economies. Retail headline inflation eased in line with global disinflationary trends, moderating from 5.4% in FY 2023 24 to 4.6% in FY 2024 25, with sharper deceleration seen in the latter part of the year. Food inflation, while still a key driver of overall price pressures, also began to soften in the final quarter, offering early signs of relief. These trends will continue to be closely monitored.

During the year, the Government allocated more than 11 lakh crore towards capital expenditure, amounting to 3.4% of GDP. The agriculture sector benefitted from a series of schemes and incentives, supporting a gradual recovery in FY 2024 25. Looking ahead, sustained structural reforms at the grassroots level and a continued focus on deregulation are expected to strengthen medium-term growth and enhance Indias competitiveness. rd

INDUSTRY STRUCTURE AND DEVELOPMENT

Re-commerce

Indias recommerce landscape in 2025 continues its robust growth trajectory, driven by the convergence of sustainability imperatives, consumer behavior shifts, and digital enablement. What began as a niche segment has now progressed into a mainstream consumer p ractice, with recommerce increasingly viewed as an integral part of the circular economy.

Environmental Influence:

Heightened awareness around sustainability, amplified by climate change discourse and policy interventions, has spurred adoption. Much like Patagonias Worn Wear and Apples Certified Refurbished models globally, Indian companies are incorporating recommerce to align with their ESG (Environmental, Social, Governance) commitments. The governments emphasis on sustainability under the Extended Producer Responsibility (EPR) regime further strengthens this trend domestically.

Consumer Shift:

Indias Millennials and Gen Z continue to be the leading forces. In 2025, surveys indicate that nearly 70% of Gen Z Indians prefer pre-owned or refurbished options, not only for affordability but also because of perceived authenticity, uniqueness, and eco-consciousness. Thrift shopping, vintage fashion, and refurbished electronics are now aspirational categories.

Economic Drivers:

In a macroeconomic environment where affordability and value-consciousness remain critical, recommerce provides a compelling alternative to new purchases. From smartphones and laptops to furniture and automobiles, price-sensitive Indian consumers find high-quality refurbished products offering significant savings without compromising quality.

Technology as an Enabler:

Indias booming digital ecosystem comprising AI-driven pricing models, authentication tools, and logistics tech has reduced trust gaps significantly. Platforms like Cashify, OLX Autos, Refurbo and QuikrBazaar are expanding reach, while global players such as Amazon Renewed and Flipkarts "2GUD" refurbished marketplace continue to strengthen their foothold. Blockchain-based provenance tracking is being piloted, further enhancing credibility.

Industry Outlook and Growth: rd

According to Boston Consulting Group (BCG) and OLX Autos 2024 report, Indias recommerce sector was valued at $25 billion in 2024 and is projected to cross $35 40 billion by 2025, growing at an annual rate of ~15 20%. On the global stage, the recommerce market is expected to touch $400 billion by 2025 (source: Statista 2024), underscoring the alignment of Indias growth trend with global momentum.

Sector Expansion:

While electronics and fashion remain dominant, 2025 has seen accelerating recommerce activity in categories like furniture, luxury goods, and mobility solutions (EV batteries, used EVs, and auto parts). Start-ups and established retailers are innovating with trade-in programs, subscription-based resale models, and brand-owned recommerce ecosystems.

Conclusion:

Overall, 2025 marks a phase where recommerce in India transitions from being "alternative retail" to mainstream retail." The steadily rising consumer trust, affordability advantage, and environmental alignment make recommerce a resilient and scalable market opportunity. The sectors exponential growth trajectory remains intact, supported by regulatory nudges, consumer enthusiasm, and digital innovation.

Source: BCG OLX Autos Report 2024, Statista Market Data 2024, Industry Aggregated Insights 2025.

OPPORTUNITIES AND THREATS

Opportunities .

Expanding Middle Class and Digital Penetration:

With Indias middle class continuing to expand and over 85.00 Lakhs internet users as of 2025, recommerce platforms have unparalleled opportunities to capture new users. The increasing trust in UPI, digital wallets, and BNPL (Buy Now, Pay Later) is further supporting growth in second-hand and refurbished retail.

Affordability and Value-Oriented Consumption:

Price sensitivity among Indian consumers remains a strong driver. With inflationary pressures in 2025, more households are choosing pre-owned alternatives in fashion, electronics, and automobiles, making recommerce a mainstream choice rather than a fallback option.

Employment Generation and Skill Development:

Recommerce continues to create jobs across digital marketing, last-mile logistics, quality inspection, repair/refurbishment, and customer service. In 2025, new jobs are emerging in AI-based product rd authentication, blockchain provenance tracking, and sustainable logistics, combining skill sets from retail and technology sectors.

ESG Alignment and Circular Economy Potential:

Businesses are embracing recommerce to meet ESG reporting standards encouraged by SEBI and global investors. Second-hand apparel, now growing nearly 5x faster than new clothing sales globally (Statista 2025), directly supports sustainability, resource efficiency, and circular economy principles.

Technological Advancements:

AI, ML, and AR/VR tools have revolutionized the industry. Platforms are leveraging AI-driven dynamic pricing, image-based product matching, and virtual try-ons for fashion. Reverse logistics is also becoming more sophisticated, reducing friction in supply chain operations and transforming recommerce into a formalized, trust-driven sector.

Global Market Alignment:

The global recommerce market is expected to surpass $400 billion in 2025, offering Indian players opportunities to scale internationally through cross-border recommerce platforms and partnerships.

Threats & challenges

Pricing Complexities and Margin Pressure:

Thin margins remain a key hurdle. With rising operational expenses in 2025, including logistics fuel costs and compliance costs under Indias EPR waste management framework, achieving profitability is challenging. The subjective nature of "used" product pricing continues to constrain scalability.

Authentication and Consumer Trust:

Trust remains the backbone of recommerce. Authentication of electronics, luxury fashion, and refurbished auto parts is resource-intensive. While AI-driven authenticity checks are improving, they are not foolproof, and third-party authentication services add to costs and delay velocity of transactions.

Competition Intensification:

The Indian recommerce sector is now highly competitive, with large conglomerates, e-commerce giants (Flipkart, Amazon, Reliance), and niche start-ups all encroaching on market share. This overcrowding poses survival challenges for emerging businesses, especially those lacking scale or differentiated models.

rd

Operational Challenges in Reverse Logistics:

Returns handling, quality checks, and cross-border logistics create inefficiencies and higher costs. Given Indias fragmented logistics infrastructure, ensuring timely, consistent, and cost-effective delivery across Tier-II and Tier-III cities remains a significant challenge.

Regulatory Compliance and Taxation Risks:

As the recommerce industry matures, additional scrutiny from regulators on waste management policies, GST compliance for used goods, and product warranties may increase operational burden for small players. Navigating these evolving frameworks is critical but resource-heavy.

Market Saturation & Brand Cannibalization:

Brands entering recommerce to retain loyal customers sometimes risk cannibalizing sales of new products, creating strategic conflicts. Smaller players face difficulty carving a unique identity in an environment dominated by enterprise-scale recommerce initiatives.

RISK AND CONCERN

The Company has a robust risk management framework to identify and mitigate business challenges. Key risks are:

Availability of Labour: Demand for skilled manpower in refurbishment, logistics, and AI-driven inspection is rising faster than supply. The Company addresses this through upskilling, employee engagement, and productivity enhancement.

Economic Uncertainty: Sluggish global growth, inflation, and supply chain pressures could impact discretionary spending. Mitigation includes portfolio diversification, brand strengthening, and expansion into Tier-II/III markets.

Consumer Trust & Authenticity: Product quality and authenticity remain critical, especially in electronics and luxury categories. The Company ensures trust through AI tools, third-party verification, warranties, and transparent policies.

Intensifying Competition: Entry of large players has intensified price and customer acquisition pressures. Differentiation is pursued through partnerships, technology innovation, and customer loyalty initiatives.

OUTLOOK

The recommerce sector is transitioning from a niche to a mainstream retail segment, driven by a young rd consumer base, affordability, and sustainability imperatives. With Indias internet p enetration crossing 85.00 Lakhs users and growing awareness of the circular economy, the Company expects robust demand across categories such as electronics, fashion, furniture, and mobility solutions.

Technology adoption including AI-driven pricing, authentication tools, and blockchain-based tracking will further strengthen consumer trust and operational efficiency. Expanding into Tier-II and Tier-III markets presents a significant growth opportunity as affordability continues to be a key driver. Further, our Companybelieves in maintain long term relationship with our customers by adding value through innovations, quality assurance and timely delivery of our products which will ultimately enhance our sales. It has been a long and motivating journey towards this pinnacle of success and no efforts are being spared to further strengthen the accomplishments of the company.

INTERNAL CONTROL SYSTEM AND ADEQUACY

Management has overall responsibility for the Companys internal control system to safeguard the assets and to ensure reliability of financial records. The Company has an adequate internal control system commensurate with its size and nature of its business. The Company has a detailed budgetary control system and the actual performance is reviewed periodically and decisions taken accordingly. The Company also conducts regular internal audits to test the adequacy and efficacy of its internal control processes and bring out any deviation to internal control procedures.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

In order to achieve operational excellence and maintain a competitive edge, the Company invests in building and nurturing a strong talented pool by instituting best practices with respect to its employees. The Company makes substantive and sustained efforts towards building an eco-system which promotes the development and advancement of all its employees and employees feel a sense of belonging to the Company and camaraderie with their team, and aspire for individual excellence while contributing to achieve departmental objectives.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Companys Revenue from Operations on a Standalone basis for FY 2024 25 was 5543.51 Lakhs as against 4956.12 Lakhs in the previous year. The Profit before Depreciation Interest and tax is 1061.13 Lakhs as compared to 781.22 Lakhs in the previous year. The Net Profit for the year stood at 544.15 Lakhs as compared to 520.77 Lakhs for the previous year. The Earning per Share has declined to 9.43 as against 11.72 in the Previous Year.

The Companys Revenue from Operations on a Consolidated basis for FY 2024 25 was 5543.51 Lakhs as against 4956.12 Lakhs in the previous year. The Profit before Depreciation Interest and tax is 1050.74 Lakhs as compared to 781.22 Lakhs in the previous year. The Net Profit for the year stood at 533.77 Lakhs as compared to 520.77 Lakhs for the previous year. The Earning per Share has declined to 9.43 rd as against 11.72 in the Previous Year.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS ALONG W ITH EXPLANATION

In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company along with explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year will be termed as significant changes), has been provided hereunder:

S.No.	Particulars	Units	31st March 2025	31st March 2024	% change from March 31, 2024 to Mar 31, 2025	Reason for variation of more than 25%
(i)	Current Ratio	Times	2.85	6.80	(58.14)	Decrease attributed to strategic utilisation of working capital via CC loan, aimed at supporting growth and liquidity.
(ii)	Debt-Equity Ratio	Times	0.18	0.00	7,684.06	Increase reflects prudent leveraging through CC loan to fund operations without equity dilution.
(iii)	Debt Service Coverage ratio	Times	18.77	7.74	142.53	Improved ratio indicates stronger earnings and enhanced ability to service debt, ensuring financial stability.
(iv)	Inventory Turnover ratio	Times	1.54	2.81	(45.04)	Lower ratio due to strategic inventory buildup to meet anticipated demand and avoid stockouts.
(v)	Trade Receivable Turnover Ratio	Times	7.31	12.23	(40.20)	Decline due to selective credit extension to key customers, improving overall profit margins.
(vi)						Reflects improved credit terms
	Trade Payable	Times				from suppliers, enhancing cash
				50.01
	Turnover Ratio		18.03		(63.94)	flow management.
(vii)						Improved capital efficiency,
	Net Capital Turnover Ratio	Times	1.93	1.72	11.85	indicating better utilisation of shareholder funds.
(viii)						Profitability decreased since
	Net Profit ratio	Percentage	9 .82%	10.51%	(6.58)	increase in fixed expenses in higher proportionate than incerease in Sales, which stall stabilise in next year.

(ix)				24.80%	Temporary dip due to
	Return on Equity ratio	Percentage	1 4.40%	(41.93)	reinvestment of profits for long- term growth, expected to normalise.
(x)				21.44%	Reflects focus on margin
	Return on Capital Employed	Percentage	1 6.77%	(21.77)	improvement and capital deployment efficiency.
(xi)	Return on Investment	Percentage	-	- -	NA

CAUTIONARY STATEMENT

Statements in the Management Discussion Analysis describing the Companys objectives, projections, estimates and expectations may be considered as "forward looking statements" within the meaning of applicable securities laws and regulations. The Company cannot guarantee that these assumptions are accurate or will be realized. Actual results could differ materially from those expressed or implied. The Company assumes no responsibility in respect to the forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.