Bhadora Industries Ltd Management Discussions

RESULTS OF OPERATIONS

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended on March 31, 2025, March 31, 2024 and March 31, 2023. You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Red Herring Prospectus. You should also read the section entitled "Risk Factors" beginning on page 29 of this Red Herring Prospectus, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Bhadora Industries Limited, our Company. Unless otherwise indicated, financial information included herein are based on our "Restated Financial Statements" for Financial Year ended on March 31, 2023, March 31, 2024, and March 31, 2025, included in this Red Herring Prospectus beginning on page 226.

BUSINESS OVERVIEW

We are engaged in business of manufacturing of industrial cables which provide efficient electricity transmission and distribution solutions to the government discoms and EPC companies which cater to the diverse electrical connectivity needs of various industrial sectors. We operate under brand name of "Vidhut Cables". With over three decades of experience in cable industry, we have consistently evolved to meet the dynamic requirements of the industry. We started with production of Polyvinyl Chloride (PVC) cables, and we later expanded our range to include Low Voltage (LV) cables, LT Arial Bunched Cables, Cross-Linked Polyethylene (XLPE) cables. These products are designed for specific functions in electricity transmission and distribution. Each product serves a specific function in electricity transmission, from reliable power distribution in low voltage applications to high-performance cables used in overhead power lines. We ensure all our cables meet industry standards for safety and performance, while also staying aligned with the technology and requirements of the sector.

For detailed information on our business activities, please refer to section titled "Our Business" on page 153 of this Red Herring Prospectus.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR:

In the opinion of the Board of Directors of our Company, there have not arisen, since the date of September 30, 2024 as disclosed in this Red Herring Prospectus, any significant developments or any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION:

Our Companys future results of operations could be affected potentially by the following factors:

1. General economic conditions in India, changes in laws and regulations.

2. Changes in revenue mix, including geographic mix of our revenues.

3. Changes in Fiscal, Economic or Political conditions in India.

4. Increased market fragmentation.

5. Competition with existing and new entrants

6. Technology System and Infrastructure Risks

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, "Annexure IV" beginning under Chapter titled "Financial Information of our Company" beginning on page 226 of the Red Herring Prospectus.

RESULTS OF KEY OPERATIONS

The following table sets forth select financial data from our restated financial statement of profit and loss for the financial years ended March 31, 2025, 2024 and 2023, the components of which are also expressed as a percentage of total revenue for such period and financial years.

( in lakhs)

Particulars	For the year ended		For the year ended		For the year ended
	March 31, 2025	% of Total Income	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income
Revenue From Operations	11,011.18	99.47%	8,139.32	97.74%	1,844.03	98.04%
Other Income	58.14	0.53%	188.16	2.26%	36.82	1.96%
Total Income	11,069.33	100.00%	8,327.48	100.00%	1,880.85	100.00%
Cost of material consumed	8,484.68	76.65%	6,517.30	78.26%	1,584.49	84.24%
Changes in inventories of finished goods and work-in- progress	(61.21)	-0.55%	165.06	1.98%	(46.75)	-2.49%
Employee Benefits Expenses	356.61	3.22%	219.92	2.64%	47.46	2.52%
Other Expenses	533.02	4.82%	558.26	6.70%	155.28	8.26%
Finance Cost	274.99	2.48%	172.95	2.08%	95.58	5.08%
Depreciation and Amortisation	34.05	0.31%	24.85	0.30%	22.05	1.17%
Expense
Total Expense	9,622.13	86.93%	7,658.34	91.96%	1,858.10	98.79%
Profit Before Tax	1,447.19	13.07%	669.14	8.04%	22.75	1.21%
Current Tax	360.59	3.26%	171.61	2.06%	5.43	0.29%
Deferred Tax Expense/(Credit)	7.92	0.07%	2.02	0.02%	-0.74	-0.04%
Total tax	368.51	3.33%	173.63	2.09%	4.69	0.25%
Profit for the Year (A)	1,078.68	9.74%	495.51	5.95%	18.06	0.96%

Review of Restated Financials

Revenue from Operations: Revenue from operations consists of sale of products. Sale of Products includes various wide range of industrial cables.

Other Income: Other income includes Interest income, Commission income, Discount received and other non- operating income.

Total Income: Our total income comprises revenue from operations and other income.

Total Expenses: Companys total expenses consist of Cost of material consumed, Changes in inventories of Finished goods, WIP and Stock-in-trade, Employee benefits expenses, Finance cost, Depreciation and Amortization expense, and Other expenses.

Changes in inventories of Finished goods, WIP and Stock-in-trade: Changes in inventories consists of costs attributable to an increase or decrease in inventory levels during the relevant financial period in Finished goods, WIP and Stock-in-trade.

Employee Benefits Expense: Employee benefit expense includes Salaries and Wages, Contributions to provident and other funds, Labour welfare, and Directors remuneration.

Finance Cost: Finance cost includes Interest expense and other bank charges.

Other expenses: Other expenses mainly consist of Manufacturing and Direct expenses like Power and Fuel, Transportation Expenses and other expenses like Travelling expenses, Sales Commission, Insurance expenses.

COMPARISON OF F.Y. 2025 WITH F.Y. 2024:

Revenue from Operations

The Companys revenue from operations for the financial year 2024-25 amounted to 11,011.18 lakhs, marking an increase of 2,871.86 lakhs or 35.28% over the previous years revenue of 8,139.32 lakhs. This growth was primarily driven by a significant increase in revenue from EPC contracts, which rose by 3,891.45 lakhs or 64.52% compared to the previous year. However, this was partially offset by a decline in revenue from Government Discoms, which fell by 1,019.60 lakhs or 48.37% in FY 2024-25. Despite the decline in Discom revenue, the overall net increase in revenue stood at 35.28%.

Other Income

Other income for the financial year 2024-25 decreased by 130.02 lakhs or 69.10%, falling to 58.14 lakhs from 188.16 lakhs in the previous year. This decline was primarily due to the absence of commission income, which had amounted to 157.31 lakhs in the previous year. The discount received in FY 2024-25 also declined by 61% from the previous year, amounting to 4.97 lakhs as compared to 12.80 lakhs in FY 2023-24. However, interest income in FY 2024-25 increased significantly to 39.93 lakhs, marking a rise of 28.50 lakhs or 249% from the previous years amount of 11.43 lakhs.

Cost of Material consumed

Cost of material consumed for the year ended March 31, 2025, amounted to 8,484.68 lakhs constituting 76.65% of total income.

Changes in inventories of Finished goods, WIP and Raw materials

There was a decrease of 226.27 lakhs for the year ended March 31, 2025, as compared to an increase of 211.81 lakhs for Fiscal 2024, primarily attributable to a higher inventory of Finished goods at the end of FY 24-25.

Employee Benefits Expenses

Employee benefit expenses in the financial year 2024-25 increased by 136.68 lakhs or 62.15%, reaching 356.61 lakhs in comparison to the 219.92 lakhs in the financial year 2023-24. This rise was primarily due to increase in Salary and wages and Directors remuneration which went up by 82.22 lakhs (or 46%) and 46.00 lakhs (or 176.92%) respectively.

Finance Costs

Finance Costs in the financial year 2024-25 increased by 102.04 lakhs or 59.00%, reaching 274.99 lakhs in comparison to the 172.95 lakhs incurred in the financial year 2023-24. This rise was primarily due to increase in Interest on term loans and overdraft which went up by 104.81 lakhs or 73.53%.

Depreciation and amortization expenses

Depreciation and amortization for the year ended March 31, 2025 were 34.05 lakhs representing 0.31% of total income for that period.

Other Expenses

Other expenses in the financial year 2024-25 decreased by 25.24 lakhs or 4.52%, reaching 533.02 lakhs compared to 558.26 lakhs incurred in the financial year 2023-24. This decrease is primarily attributable to a reduction in interest to creditors by 27.47 lakhs, a decrease in penalty on delayed sale deliveries by 18.50 lakhs, a decline in sales commission by 25.23 lakhs, and a reduction in legal & professional charges by 7 lakhs. However, part of this decrease was offset by an increase in business promotion expenditure by 13.46 lakhs and an increase in travelling expenses by 38.72 lakhs.

Tax Expenses

Tax expenses for the year ended March 31, 2025 were 368.51 lakhs which formed 0.07% of total income. Current tax expenses of 360.59 lakhs and deferred tax expense of 7.92 lakhs were incurred.

Profit after Tax (PAT)

The Profit After Tax (PAT) for the financial year 2024-25 reached 1,078.68 lakhs, marking an increase of 583.17 lakhs from 495.51 lakhs in the financial year 2023-24. In the financial year 2024-25, PAT constituted 9.74% of the total revenue, in contrast to 5.95% in the fiscal year 2023-24.

Rationale for increase in Profit After Tax (PAT) compared to total income.

Revenue has increased from 8,139.32 lakhs to 11,011.18 lakhs, representing 35.28% change in revenue. Moreover, there is an increase in PAT from 495.51 lakhs to 1,078.68 lakhs, representing 117.69% change. The reason for this growth is attributable to companys strategic shift in private sectors EPC contracts from traditionally low margin government contracts. As a result, this change has provided better margins due to more flexible pricing and less stringent budgetary constraints compared to government sectors project.

Below is the revenue bifurcation which represent shift from government sector to private sector over the past 3 years.

	Fiscal 2025		Fiscal 2024		Fiscal 2023
Particulars	Revenue from Operations	% of Total Revenue from Operations	Revenue from Operations	% of Total Revenue from Operations	Revenue from Operations	% of Total Revenue from Operations
EPC Contracts	9,922.76	90.12%	6,031.31	74.10%	868.74	47.11%
Government Discoms	1,088.42	9.88%	2,108.02	25.90%	975.29	52.89%
Total	11,011.18	100.00%	8,139.33	100.00%	1,844.03	100.00%

The significant increase in PAT margin in FY 2024 and the stub period can be attributed to several factors that have collectively contributed to improved profitability for the company:

1. Shift to Higher-Margin EPC Contracts: One of the most significant factors for the increase in PAT margin is the companys strategic shift from low-margin government Discom contracts to higher-margin private sector EPC (Engineering, Procurement, and Construction) contracts. This shift was reflected in the revenue mix, with the percentage of supplies to private EPC contractors rising to 74% in FY 2024 compared to just 47% in FY 2023. EPC contracts generally offer better pricing flexibility, allowing the company to negotiate higher prices for its products. This has resulted in improved profitability as these contracts typically involve larger orders and more complex projects, contributing higher value compared to government contracts that are typically characterized by fixed pricing and competitive bidding.

2. Operational Efficiency & Cost Optimization: The company has also focused on improving its operational efficiency, leading to lower manufacturing costs. This has been achieved through better production processes, economies of scale, and more streamlined operations. In addition, effective cost control measures, such as optimized raw material procurement and reduced overhead expenses, have helped the company improve its margins. By leveraging its existing production capacity more efficiently, the company has been able to reduce per-unit costs, thereby improving profitability even as revenue grew.

3. Product Mix & Premium Offerings: The companys focus on higher-value segments has been another important factor in boosting PAT margin. As the demand for premium cables in sectors such as infrastructure development and renewable energy has increased, the company has been able to charge higher prices for these specialized products. This has led to an improvement in both the average selling price and the overall profit margin. The strong demand in these high-growth sectors has enabled the company to expand its product offering and generate higher margins from these premium products.

4. Impact of the Revamped Distribution Sector Scheme (RDSS): Although the company has shifted away from direct government contracts, it has continued to benefit from the Revamped Distribution Sector Scheme (RDSS). Under RDSS, private EPC contractors procure cables for projects aimed at modernizing Indias power distribution infrastructure. This shift has allowed the company to remain actively involved in the government-driven RDSS projects while focusing on the more profitable private EPC segment. The RDSS-driven demand, coupled with the companys strategic focus on EPC contracts, has significantly contributed to the increase in sales and margins.

Strong Revenue Growth & Better Capacity Utilization: Finally, higher revenue in FY 2024 and the stub period led to better absorption of fixed costs, which had a direct impact on improving operating margins. The increase in production volumes, driven by the higher demand from both EPC contracts and RDSS projects, allowed the company to utilize its fixed asset base more efficiently.

COMPARISON OF F.Y. 2024 WITH F.Y. 2023:

Revenue from Operations

The Companys revenue from operations in the financial year 2023-24 is 8,139.32 lakhs. This represents 6,295.29 lakhs or 341.39% increase compared to the previous financial years revenue from operations of 1,844.03 lakhs. This increase can be attributed to several key factors which are stated below:

1. Increased Demand for Cables:

o Infrastructure Growth and Government Initiatives: The Indian government has been increasingly focusing on infrastructure development, including renewable energy projects, smart cities, and the expansion of the power distribution network. These efforts have significantly increased demand for electrical cables, a primary product in energy, construction, and industrial sectors.

o Revamped Distribution Sector Scheme (RDSS): The RDSS, introduced by the Indian government, has been a major driver for increased demand in the power sector, where cables are a critical component. The scheme is designed to enhance the financial sustainability of electricity distribution companies, requiring upgrades to the existing infrastructure, which in turn drives the demand for quality cables.

2. Vendor Approvals & Market Expansion

o Securing Approvals for Multiple States: Over the last few years, the company has expanded its geographical footprint by securing vendor approvals from several state utilities and government bodies. This has allowed the company to participate in a wider array of government and private sector projects.

o Wider Market Reach: The approval from key government and private sector agencies has enabled the company to penetrate new markets and diversify its customer base. This has led to increased sales and larger contracts, contributing significantly to revenue growth.

3. Shift Towards EPC Contracts Under RDSS

o Focus on EPC Contracts: With the shift under RDSS to award contracts to EPC companies, the demand for electrical cables has surged. EPC contractors are predominantly private sector players, which has resulted in a higher share of revenue from the private sector.

o Strong Industry Relationships: The company has established strong, long-term relationships with major EPC players, making it a preferred supplier for cable requirements in large-scale infrastructure projects. This has resulted in increased orders and a consistent revenue stream from these private sector contracts.

4. Recovery from Pandemic Disruptions

o Post-pandemic, the industry has seen a rebound, with infrastructure projects that were delayed due to the COVID-19 pandemic now coming back online. This has contributed to increased demand and, consequently, higher revenues in the FY 2023 and FY 2024 periods.

Revenue Contribution Over the Last 3 FYs & Stub Period

The following table provides a detailed breakdown of revenue and its bifurcation between private sector (EPC) and government contracts for the last three fiscal years (FY 2023, FY 2024) and the stub period.

Segment	As at September 30, 2024	As at March 31, 2024	As at March 31,
	( in lakhs)	( in lakhs)	2023 ( in lakhs)
Private Sector (EPC)	3905.00	6031.31	868.74
Government	671.75	2108.02	975.29
Total Revenue	4576.76	8139.32	1844.03

Private Sector (EPC): The revenue contribution from the private sector has seen significant growth, rising from 47% in FY 2023 to 85% in FY 2024, driven by an increased share of EPC contracts under the RDSS scheme. The surge in private sector projects, particularly in renewable energy and infrastructure, has substantially contributed to the overall revenue increase.

Government Sector: The governments share of total revenue has decreased, from 53% in FY 2023 to 15% in FY 2024. While government projects remain a significant contributor, the shift towards private sector-driven EPC contracts has resulted in a relative decline in government revenue share.

Revenue Growth: The total revenue has grown considerably from 1844.03 lakhs in FY 2023 to 8139.32 lakhs in FY 2024, demonstrating a strong recovery and growth trajectory. The increase in EPC projects, along with the governments focus on infrastructure development, has been instrumental in driving this growth.

Bifurcation of Projects Undertaken by the Company in the Last 3 FYs and Stub Period

Below is a detailed breakdown of the number of projects undertaken by the company, segregated by private sector (EPC) and government contracts over the past three fiscal years and the stub period.

Fiscal Year / Stub Period	Private Sector (EPC) Projects	Government Projects	Total Projects
FY 2023	6	16	22
FY 2024	18	15	33
Stub Period (FY 2025)	20	3	23

Private Sector Projects: The number of private sector (EPC) projects undertaken by the company has witnessed a significant rise from 6 projects in FY 2023 to 18 projects in FY 2024, reflecting the shift towards more EPC-driven initiatives. The companys participation in renewable energy, infrastructure, and commercial projects has contributed to this growth.

Government Projects: The number of government projects has remained relatively stable, but their contribution to total projects has decreased as a percentage of overall revenue. Government projects tend to be larger, but with the increasing focus on private sector participation in infrastructure, the overall number of government projects has seen slower growth.

In conclusion, the combination of favourable government schemes like RDSS, an increased share of EPC contracts, successful market expansion, and technological innovations has led to the substantial increase in revenue for the company in FY 2023, FY 2024, and the stub period.

Other Income

Other Income in the financial year 2023-24 increased by 151.34 lakhs or 411.03%, reaching 188.16 lakhs in comparison to the 36.82 lakhs incurred in the financial year 2022-23. This increase was primarily due to commission income of 157.31 lakhs and discount received of 12.80 lakhs.

Cost of Material Consumed

Material consumption expenses for the financial year 2023-24 amounted to 6,517.30 lakhs constituting 78.26% of total income.

Changes in inventories of Finished goods, WIP and Raw materials

There was an increase of 165.06 lakhs for Fiscal 2024 as compared to an decrease of 46.75 lakhs for Fiscal 2023, primarily attributable to a lower inventory of Finished goods at the end of Fiscal 2024.

Employee Benefits Expenses

Employee benefit expenses in the financial year 2023-24 increased by 363.35%, reaching 219.92 lakhs in comparison to the 47.46 lakhs incurred in the financial year 2022-23. This rise in employee expenses primarily stemmed from increases in Salaries and Wages, which went up by 139.41 lakhs and directors remuneration by 26.00 lakhs.

Finance Costs

Finance Costs in the financial year 2023-24 increased by 80.95%, reaching 172.95 lakhs in comparison to the 95.58 lakhs incurred in the financial year 2022-23. This rise in finance costs primarily stemmed from increases in Interest expense which went up by 62.44 lakhs and other bank charges which went up by 14.93 lakhs.

Depreciation and amortization expenses

Depreciation and amortization in the financial year 2023-24 increased by 12.70%, reaching 24.85 lakhs in comparison to the 22.05 lakhs incurred in the financial year 2022-23. The increase in depreciation was primarily due to addition in assets.

Other Expenses

Other expenses in the financial year 2023-24 increased by 259.53%, reaching 558.26 lakhs in comparison to the 155.28 lakhs incurred in the financial year 2022-23. This increase in other expenses was primarily attributed to several factors, including 176.16 lakhs increase in transportation expenses, 33.74 lakhs increase in Power and Fuel expense, 12.06 lakhs increase in Loading and Unloading expenses and 13.79 lakhs increase in Legal and Professional Charges.

Tax Expenses

Tax expenses increased by 3,602.13%, reaching a total of 173.63 lakhs in the financial year 2023-24, in contrast to the 4.69 lakhs in the financial year 2022-23.

Profit after Tax (PAT)

Due to the aforementioned factors, the profit experienced an upswing, primarily driven by the growth in total income and a decrease in total expenses as a percentage of total income. The Profit After Tax (PAT) for the financial year 2023-24 reached 495.51 lakhs, marking a notable increase from 18.06 lakhs in the financial year 2022-23. In the financial year 2023-24, PAT constituted 5.95% of the total revenue, in contrast to 0.96%% in the financial year 2022-23.

Rationale for increase in Profit After Tax (PAT) compared to total income.

Revenue has increased from 1,844.03 lakhs to 8,139.32 lakhs, representing 341.39% change in revenue. Moreover, there is an increase in PAT from 18.05 lakhs to 495.52 lakhs, representing 2645.41% change. The reason for this enormous growth is attributable to companys strategic shift in private sectors EPC contracts from traditionally low margin government contracts. As a result, this change have provided better margins due to more flexible pricing and less stringent budgetary constraints compared to government sectors project.

Below is the revenue bifurcation which represent shift from government sector to private sector in FY 24 in contrast to FY 23.

	Fiscal 2024		Fiscal 2023
Particulars	Revenue from Operations	% of Total Revenue from Operations	Revenue from Operations	% of Total Revenue from Operations
EPC Contracts	6,031.31	74.10%	868.74	47.11%
Government Discoms	2,108.02	25.90%	975.29	52.89%
Total	8,139.33	100.00%	1,844.03	100.00%

The companys involvement in the Revamped Distribution Sector Scheme (RDSS) has driven revenue growth by boosting demand for electrical cables in renewable energy and power distribution. The scheme ensures steady orders, supported by ongoing investments in the power and utilities sector.

Furthermore, the increase in margins during the reporting period can be attributed to a reduction in material consumption and a decrease in other expenses as a percentage of total income compared to the previous fiscal year.

The cost of materials consumed constituted 84.24% of total income in Fiscal Year 2023, which declined to 78.26% of total income in Fiscal Year 2024. Similarly, other expenses decreased from 8.26% of total income in Fiscal Year 2023 to 6.70% in Fiscal Year 2024. These improvements reflect the companys enhanced operational efficiency, better cost management practices, and a focus on optimizing resource utilization, thereby strengthening profitability.

The companys strategic shift from traditionally low-margin government contracts to higher margin private sector EPC contracts has resulted in a substantial increase in Profit After Tax (PAT) relative to its total income. This shift has led to both improved profitability and operational efficiency, as detailed below:

1. Higher Margins in EPC Contracts:

Government Contracts:

o Fixed Pricing & Competitive Bidding: Government contracts, especially in the power and infrastructure sectors, often operate under fixed pricing models. These contracts are typically awarded through competitive bidding, which can result in low margins due to price pressure. The governments tendering processes, while stable, are usually designed to keep costs low, thus reducing potential profitability.

o Price Regulations & Slow Payment Cycles: Government contracts also tend to have rigid pricing structures and slower payment cycles, further limiting profitability.

Private Sector EPC Contracts:

o Negotiable Pricing & Better Payment Terms: In contrast, private sector EPC contracts often allow for more flexibility in pricing. The company can negotiate better margins, especially with large-scale infrastructure projects where the demand for quality cables is high. EPC contracts also typically come with better payment terms, ensuring improved cash flow.

o Higher Value Orders: Private sector projects often involve larger contracts with higher project values. These projects demand more sophisticated, higher-quality cables, which the company can supply at higher margins. As a result, revenue from these projects is more profitable and contributes positively to the bottom line.

2. Revenue Shift from Government Contracts to EPC Contracts:

The data below shows the significant shift in the companys revenue mix over the last three fiscal years and the stub period:

Sector	Stub Period ( in lakhs)	% Contrib ution	FY 2023-24 ( in lakhs)	% Contri bution	FY 2022- 23 ( in lakhs)	% Contrib ution	FY 2021- 22 ( in lakhs)	% Contrib ution
Private Sector(EPC)	3,904.8 8	85.32%	6,031.31	74.10 %	868.74	47.11%	174.91	11.98%
Government Sector	671.95	14.68%	2,108.02	25.90 %	975.29	52.89%	1,284.86	88.02%
Total Revenue	4,576.8 3	100%	8,139.32	100%	1,844.03	100%	1,459.77	100%
PAT ( in lakhs)	393.32		495.52		18.05		-5.7
PAT Margin (%)	8.60%		6.10%		1.00%		-0.40%

Revenue Growth from EPC Contracts: As shown in the table, the revenue contribution from private sector EPC contracts has significantly increased. In FY 2021-22, EPC contracts contributed only 12% of the total revenue. By FY 2023-24, this contribution rose to 85% in the stub period, demonstrating the companys strategic focus on higher-margin projects.

Decline in Government Contracts: In contrast, the revenue from government contracts has decreased sharply from 88% in FY 2021-22 to 15% in the stub period. This reduction in reliance on government contracts has allowed the company to focus on more profitable private sector projects.

3. Improved Operational Efficiency:

Cost Control: The shift to EPC contracts has enabled better control over costs, as these projects allow for more favourable payment terms and greater flexibility in pricing. The companys ability to manage overhead costs and optimize its supply chain for high-value projects has contributed to a reduction in overall expenses, improving profitability.

Higher-Value Projects: As EPC contracts tend to be larger, they often involve economies of scale, meaning the company can spread fixed costs over a larger project base. This increases the gross margin and improves the overall profitability, even if the increase in project volume requires a higher level of resources.

4. PAT Growth & Margin Improvement:

Increase in PAT: As a result of the strategic shift toward EPC contracts, the companys Profit After Tax (PAT) has seen a substantial increase. The PAT has grown from a loss of 5.7 lakhs in FY 2021-22 to positive figure of 495.52 lakhs in FY 2023-24, reflecting a major improvement in profitability.

PAT Margin: Correspondingly, the PAT margin has significantly improved. In FY 2021-22, the PAT margin was negative (-0.40%), indicating poor profitability due to heavy reliance on low-margin government contracts. By FY 2023-24 (stub period), the PAT margin surged to 8.60%, showcasing the positive impact of the higher-margin private sector EPC contracts.

Cash Flow

The table below summaries our cash flows from our Restated Financial Information for the financial years ended on 2025, 2024, and 2023:

( in lakhs)

Particulars	FY 2025	FY 2024	FY 2023
Net cash (used in)/ Generated from operating activities	233.67	280.83	122.29
Net cash (used in)/ Generated from investing activities	(729.97)	(36.80)	56.77
Net cash (used in)/ Generated from finance activities	744.63	(238.52)	(212.38)
Net increase/ (decrease) in cash and cash equivalents	248.36	5.51	-33.34
Cash and Cash Equivalents at the beginning of the period	28.14	22.63	55.97
Cash and Cash Equivalents at the end of period	276.50	28.14	22.62

Cash Flow from/(used in) Operating Activities

Net cash generated from operating activities in the Fiscal 2025 was 233.67 lakhs and our profit before tax that period was 1447.20 lakhs. The difference was majorly attributable to depreciation and amortisation of 34.05 lakhs, finance costs of 274.99 lakhs, and thereafter change in working capital of (1003.02) lakhs respectively, resulting in gross cash generated from operations at 602.18 lakhs. We have income tax paid of 368.51 lakhs.

Net cash generated from operating activities in the Fiscal 2024 was 280.83 lakhs and our profit before tax that period was 669.15 lakhs. The difference was majorly attributable to depreciation and amortisation of 24.85 lakhs, finance costs of 172.95 lakhs, and thereafter change in working capital of (465.15) lakhs respectively, resulting in gross cash generated from operations at 454.46 lakhs. We have income tax paid of 173.63 lakhs.

Net cash generated from operating activities in the Fiscal 2023 was 122.27 lakhs and our profit before tax that period was 22.75 lakhs. The difference was majorly attributable to depreciation and amortisation of 22.05 lakhs, finance costs of 95.58 lakhs and thereafter change in working capital of 97.86 lakhs respectively, resulting in gross cash generated from operations at 126.96 lakhs. We have income tax paid of 4.69 lakhs.

Cash Flow from/(used in) Investing Activities

In the Fiscal 2025, our net used in investing activities was (729.97) lakhs, which was for Payments for acquisition of property, plant and equipment of (729.97) lakhs.

In the Fiscal 2024, our net used in investing activities was (36.80) lakhs, which was primarily for Payments for acquisition of property, plant and equipment of 59.11 lakhs, Sale of investments of 22.31 lakhs during the said period.

In the Fiscal 2023, our net used in investing activities was 56.77 lakhs, which was primarily for Payments for acquisition of property, plant and equipment of 7.27 lakhs, Sale of investments of 64.04 lakhs during the said period.

Cash Flow from/(used in) Financing Activities

In the Fiscal 2025, our net cash generated from financing activities was 744.63 lakhs. This was primarily due to net increase in short/long term borrowings of 1019.61 lakhs, and adjustment of finance costs of 274.99 lakhs.

In the Fiscal 2024, our net cash generated from financing activities was (238.52) lakhs. This was primarily due to net decrease of short/long term borrowings of 65.57 lakhs and adjustment of finance costs of 172.95 lakhs.

In the Fiscal 2023, our net cash used in financing activities was 212.38 lakhs. This was primarily due to net decrease from short/long term borrowings of 116.83 lakhs and adjustment of finance costs of 95.58 lakhs.

Information required as per Item 11 (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

1. Unusual or infrequent events or transactions

To our knowledge there have been no unusual or infrequent events or transactions that have taken place during the last three years other than shut down of business due to COVID-19.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page 29 of this Red Herring Prospectus. To our knowledge, except as we have described in this Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Income and Sales on account of major product/main activities

Income and sales of our Company mainly consists of sale of industrial cables.

4. Whether the company has followed any unorthodox procedure for recording sales and revenues

Our Company has not followed any unorthodox procedure for recording sales and revenues.

5. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section titled "Risk Factors" beginning on page 29 in this Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

6. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.

Increases in revenues are by and large linked to increases in volume of business.

7. Total turnover of each major industry services in which the issuer company operated.

The Company is in the business of, the relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 134 of this Red Herring Prospectus.

8. Status of any publicly announced new products or business services.

Our Company has not announced any new services or business services.

9. The extent to which business is seasonal.

Our Companys business is not seasonal.

10. Any significant dependence on a single or few suppliers or customers.

The % of contribution of our Companys suppliers vis-a-vis the total revenue from operations respectively for the Fiscal 2025, 2024 and 2023 is as follows:

Particulars	Top Suppliers as a percentage (%) of total purchases
	Fiscal 2025	Fiscal 2024	Fiscal 2023
Top 5	56.35%	67.82%	80.03%
Top 10	78.82%	79.57%	93.72%

The % of contribution of our Companys customers vis-a-vis the total revenue from operations respectively for the Fiscal 2025, 2024 and 2023 is as follows:

Particulars	Top Customer as a percentage (%) of total purchases
	Fiscal 2025	Fiscal 2024	Fiscal 2023
Top 5	71.65%	75.06%	72.68%
Top 10	86.92%	89.79%	88.95%

11. Competitive conditions.

Competitive conditions are as described under the Chapters titled "Industry Overview" and "Our Business" beginning on pages 134 and 153, respectively of this Red Herring Prospectus.