Kundan Edifice Ltd Management Discussions

BUSINESS INTRODUCTION

Our Company entered into assembly and sale of lighting products in Fiscal 2014. Once current Promoter, Divyansh Gupta took control of our Company since Fiscal 2016 we have focused our business operations into manufacturing, assembly and sale of light emitting diode ("LED") strip lights and since then, while we believe we are one of the trusted electronics manufacturing services ("EMS") Company for our customers by providing end-to-end solutions in our area of operation. As an EMS Company, we are primarily an original design manufacturer ("ODM") and design, develop, manufacture and supply products to customers who then further distribute these products under their own brands. We also work with our customers to develop, manufacture and supply products that are designed by our customers. We focus on unconventional form of lighting products i.e., LED strip lights that have varied application across industries such as real estate, railways, automobiles, decorative lighting, etc. We provide lighting solutions to some of the key electrical and electronic manufacturing brands in India. The LED strip lights or the flexible linear lights as a concept is replacing the traditional lighting like bulbs, tube lights and many other kinds of lights since the flexible linear lights have indoor as well as outdoor application.

We have over 7 years of experience in EMS sector. Since Fiscal 2016, we have expanded our product portfolio within our primary product, customer base and gained technological expertise in designing and manufacturing of our products. We have a history of high customer retention. In the Fiscal 2023, the Fiscal 2022, the Fiscal 2021, we derived approximately 65.65%, 65.31% and 62.27% respectively, of our restated revenues from operations from repeat customers (defined as customers from which we have had revenues in the past three fiscal years). In Fiscal 2022, we enjoyed relationships of over three years with 5 out of these top ten customers.

Our R&D department focuses on product designing, tools and mould designing, electronic circuit designing and prototype designing. Our R&D department independently develops ODM designs and verifies and develops OEM designs received from customers and converts such designs into deliverable products by improving the designs, recommending suitable raw materials and testing of trial products.

Our manufacturing operations are a key driver of our business. We have one manufacturing and assembly facilities in the state of Maharashtra with located in Vasai (collectively "manufacturing facilities"). Our modern and state-of-art manufacturing facilities are equipped with high quality machinery, assembly lines and full power backup that enable us to meet the quality requirements of our customers in a timely manner. In line with our focus to provide end- to-end product solutions and to develop better control on our supply chain and improve our margins, we have backward integrated some of our major manufacturing processes, such as SMT lines, moulding machines, extrusion lines and other related processes. We have equipped our facilities to improve our cost efficiency, reduce dependency on third -party suppliers and provide better control on production time and quality of critical components used in the manufacturing of products. As on March 31, 2025 we employ over 330 employees in our manufacturing facilities, including contract workers.

Further, in our manufacturing operations, we aim to adopt the best available environment, health and safety practices and also engage with our suppliers to promote new approaches to reduce our environmental impact. We maintain an ongoing audit system, including both internal and external quality audits, designed to help identify and mitigate risks. Our facilities are ISO 9001:2015 (quality management system).

The global lighting market has been growing, with a value of USD 128.76 billion in 2024. It is further projected to reach USD 260.48 billion by 2034, with a CAGR of 3.7%.

This growth is fuelled by various factors, including the widespread adoption of LED lights. Valued for their energy efficiency and durability, LED lights have become a preferred choice for both residential and commercial applications. They offer a plethora of options in terms of wattages, colours and designs, catering to diverse illumination needs. Moreover, the off-grid solar sector is witnessing significant growth, with LEDs playing a crucial role in solar systems, serving millions of users worldwide.

In the construction industry, the demand for artificial lighting is driving market growth, particularly in developing regions like Asia-Pacific, Latin America, the Middle East and Africa. Increased construction activities, supported by Government initiatives to provide accommodation and ensure safety at construction sites, are boosting the demand for lighting equipment. Additionally, in the industrial sector, decorative lighting elevates the overall ambience and boosts employee satisfaction.

Furthermore, a noticeable trend towards intelligent lighting systems is driven by the necessity for energy efficient and cost-effective lighting solutions. These systems incorporate smart LED fixtures with built-in sensors that automatically adjust lighting levels according to natural daylight and occupancy.

The global EMS industry was valued at $609.79 billion in 2024 and this market is projected to grow from USD 648.11 billion in 2025 to USD 1033.17 billion by 2032, reflecting a CAGR of 6.90% over the forecast period.

The Indian lighting market is experiencing rapid growth, propelled by technological advancements and the increasing adoption of LED lighting. The market was valued at USD 4.93 billion in 2025 and is projected to reach USD 6.77 billion by 2030, clocking in a CAGR of 6.55%.

The market segmentation reveals significant opportunities. LED lighting dominates the light source segment due to its energy efficiency and cost-effectiveness. The commercial sector holds a significant market share, driven by the expanding corporate sector and the hospitality industrys need for attractive and functional lighting. Within distribution channels, wholesalers and electricians hold a substantial market share, reflecting the traditional distribution structure within India. However, the emergence of online retail and direct sales channels presents a significant future growth opportunity. Major players like Signify, Havells, Syska, Wipro, and Bajaj Electricals are actively competing, shaping market dynamics through innovation and brand recognition. The markets future trajectory will likely be influenced by technological advancements in smart lighting, IoT integration, and the increasing adoption of sustainable lighting solutions.

LED lights are gaining prominence over traditional lighting solutions due to their energy efficiency and durability, making them increasingly popular for residential, commercial and outdoor lighting applications. The shift towards LED lighting is further propelled by Government initiatives, such as the Street Lighting National Programme (SLNP) and the Unnat Jyoti by Affordable LEDs for All (UJALA) scheme. These initiatives aim to promote energy efficient lighting solutions and result in significant energy and cost savings for consumers.

Additionally, the commercial sector is witnessing a surge in demand for smart lighting solutions as businesses seek to minimise electricity expenses. Smart lighting systems, including smart LED bulbs, offer features like automated scheduling, customisable lighting options and energy efficient operation. These qualities make them an appealing choice for commercial buildings, airports and smart city projects focussed on reducing both carbon footprints and operational costs.

The Government of India has implemented numerous initiatives to create the comprehensive development of the Electronics System Design and Manufacturing (ESDM) sector within the country. These efforts include the development of core components such as chipsets and the establishment of an enabling environment to facilitate global competitiveness in the EMS industry.

The company is putting continuous efforts to attain further efficiencies. Further, the Company is confident that in spite of the challenges and competition in the industry it will perform more better in view of the strong fundamentals of the Company. The Company is expecting to enhance its presence globally to rationalize its significance by entering into the new alliance.

Long-term relationships with leading industry customer Strong focus on R&D

Experienced Promoter Directors with extensive domain knowledge

Well Established manufacturing facility designed to serve multiple products range Strong and consistent financial performance

Improve and increase operational efficiencies Optimal utilization of resource

Expand into new product lines

Enhance customer base by entering new geographies Focus on quality

Continue to focus on ODM /OEM model

Along with manufacturing of LED lighting, KEL will also be getting hands-on experience for technologies like:

Artificial Intelligence (AI) Internet of things (IOT) Mechanical Automation Li-Fi

Block chain

The Companys revenues from operations in FY 2024-2025 is Rs. 9819.71 Lakh as compared to Rs. 8423.24 Lakh in the FY 2023-24. Profit Before Tax is Rs. 1053 . 22 Lakh 2024-2025 as compared

435.70 Lakh in FY 2023-2024. Profit After Tax is Rs. 786.09 Lakh 2024-2025 as compared 300.25 Lakh in FY 2023-2024.

The company believes that employees are pivotal to our success, possessing vast knowledge and innovative capabilities. We aim to create an environment where every employee can contribute to the companys performance, excel in their roles, and grow professionally. Our focus is on recruiting skilled talent, enhancing competencies through training and development, and recognizing and rewarding leadership and performance.

Employees are encouraged to strive for excellence and maintain a customer-focused approach, with a goal of achieving high performance and accuracy consistently. The company offers challenging and fulfilling opportunities to maximize employee potential, ensuring they grow alongside the company.

Health, safety, and environmental concerns remain our top priorities. We conduct periodic audits, both internally and with external agencies, to identify gaps and implement continuous improvements, ensuring a safe workplace for all employees.

The company has robust internal controls to ensure transactions are authorized, recorded, and reported accurately, and to safeguard assets. These controls are supported by comprehensive policies and procedures and are regularly reviewed by the internal auditor, who reports to management and the audit committee. The company also promotes a work environment that encourages performance, customer focus, and innovation, while maintaining high standards of quality and integrity.

The Company is exposed to normal industry risk factors. The Company manages these risks, by maintaining a prudent financial profile and by following healthy business and risk management practices.

Statements in the Management Discussion and Analysis regarding the Companys objectives, projections, estimates, and expectations are forward-looking and subject to risks and uncertainties. Actual results may differ materially due to factors such as global and Indian demand-supply conditions, finished goods prices, changes in government regulations and policies, tax regimes, and economic conditions in India and other countries where the Company operates. The Company does not commit to updating these forward-looking statements.