The following discussion is intended to convey managements perspective on our financial condition and results of operations for the period ended December 31, 2023 and for the financial years ended March 31, 2023, 2022 and 2021. One should read the following discussion and analysis of our financialcondition and results of operations in conjunction with our section titled "Financial Statements " and the chapter titled "FinancialStatement" on page 169 of the Draft Red Herring Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page 26 of this Draft Red Herring Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer the chapter titled "Forward-Looking Statements " on page 18 of this Draft Red Herring Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derived from the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-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 Bikewo Green Tech Limited, our Company. Unless otherwise indicated, financial information included herein are based on our Restated Financial Statements the period ended December 31, 2023 and for the financial years ended March 31,
2023, 2022 and 2021 included in this DraftRed Herring Prospectus beginningon page 169 of this Draft Red Herring Prospectus
BUSINESS OVERVIEW
We are an electric two-wheeler retailer in India. We commenced our business operations in 2016 and our revenue from operations have been steady since then. Our Company since its incorporation had been engaged in the business of buying and selling of used four wheelers from authorised dealers of reputed automobile brands ("New Car Dealers"). As part of our pre-owned vehicle sale business, we procure used cars from New Car Dealers, who are approached by prospective customers, who wish to sell or exchange their existing vehicles for a new vehicle. Post procuring used cars through such channels, we further display them for sale at various sites/ park and sell outlets of our designated used car dealers. We act as an intermediate channel between the New Car Dealers and our designated park and sell used car lots, by supplying the used cars for sale and earning a margin during the sale of such cars. We have created a small network which undertakes every element of automobile buying from searching for a vehicle, creating buying requirements, price discovery, booking, certification to purchase and financing and doorstep delivery. In the year 2022, with the advent of electrical vehicles in India, in order to capitalise the opportunities and potential offered by the industry segment, we diversified our business operations by venturing into marketing and selling of electric vehicles and sold franchise of our brand to ten dealers during the first quarter of FY 2022, for opening and operating our stores in Andhra Pradesh and Telangana.
Our electric vehicle business focuses on capturing the opportunity arising out of electrification of mobility in India by creating a multi-brand channel for EV two wheelers by offering franchise under our brand in the Tier - I, Tier-II and Tier-III cities. Our business model focuses on creating a dealership chain across Tier-II and Tier-III cities for setting up retail spaces which ensures high visibility and easy accessibility to customers. We focus on deepening our presence in the regions we operate in before venturing into new markets which has led us to establish brand presence in Telangana, Andhra Pradesh, Tamil Nadu, Maharashtra and Gujarat markets. In addition to our defined cluster-focused expansion strategy, our dealership model helps us build a chain of dealers who are residents of the region in which we operate and therefore are able to penetrate the markets through their market understanding and familiarity with the area and the target customers. This enables the target customers to identify with our brand as well as with our product portfolio and aids our understanding of the market segment and the customer demand preference. We believe that this approach also enables us to achieve significant market share and dominance in the markets we operate. We plan to continue to deepen our store network in Telangana, Andhra Pradesh, Tamil Nadu, Maharashtra and Gujarat; and also, gradually plan to expand our network in Rajasthan, Kerala, Karnataka and West Bengal in pursuing our defined cluster-focused expansion strategy.
SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED FINANCIALS
After the date of last Audited accounts i.e. December 31, 2023, the Directors of our Company confirm that, there have not been any significant material developments.
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factor" beginning on page 26 of this Draft Red Herring Prospectus. Our results of operations and financial conditions are affected bynumerous factors including the following:
1. As part of our growth strategy, we intend to expand our business operations to geographical areas in which we have limited operation history. We cannot assure you that our expansion plans will be profitable or that such expansion will not adversely affect our business, results of operations and financial condition.
2. We significantly rely on trading and dealerships of multi-brand Electric Vehicles, and any interruption in the said business segment may adversely affect our business and results of operations.
3. We depend on our dealers for a significant portion of our revenue, and any decrease in revenues or sales from any one of our key intermediaries may adversely affect our business and results of operations.
4. Our Company is dependent on external suppliers for its product requirements. Any delay or failure on the part of the external suppliers to deliver products, may materially and adversely affect our business, profitability and reputation.
5. A large part of our revenues is dependent on a limited number of brands. The loss of any of our major brands or a decrease in the supply or volume from such brands, will materially and adversely affect our revenues and profitability.
6. We operate in a competitive industry and our market share may be adversely impacted in case we do not keep ourselves appraised of the latest consumer trends and technology and if we fail to compete effectively in the markets in which we operate.
7. Our inability to promptly identify and respond to changing customer preferences or evolving trends may decrease the demand for our merchandise among our customers, which may adversely affect our business.
8. Our stores are concentrated mainly in Telangana and Andhra Pradesh, and we generate majority of our retail sales from our stores in these states. Any adverse developments affecting our operations in these states could have an adverse impact on our revenue and results of operations.
9. We may in the future face potential liabilities from lawsuits or claims from third parties, should they perceive any deficiency in the products we sell in our stores. We may also face the risk of legal proceedings initiated against our Company which may result in loss of business and reputation.
10. Any failure to maintain quality of customer service, products and deal with customer complaints and to further attract and retain customers and maintain consistency in customer service could materially and adversely affect our business and operating results.
DISCUSSION ON RESULT OF OPERATION
Our Significant Accounting Policies
For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled "Restated Financial Statements"beginning on page 169 of the Draft Red Herring Prospectus.
Overview of Revenue & Expenditure
Our revenue and expenses are reported in the following manner:
Revenues
? Revenue of operations
Our Companys revenue is primarily generated from the sale of electronic two-wheeler vehicle and income earned from rendering services.
? Other Income
Our other income mainly consists of sales commission, insurance commission etc.
| Particulars | For the period ended | |||
| December 31, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Income | ||||
| Revenue from operations | 1,482.27 | 1,987.22 | 1,380.60 | 2,272.26 |
| Revenue from Services | 317.78 | 69.64 | - | - |
| As a % of total Income | 99.60% | 99.76% | 99.20% | 98.89% |
| Other Income | 7.16 | 5.01 | 11.11 | 25.46 |
| As a % of Total Income | 0.40% | 0.24% | 0.80% | 1.11% |
| Total Revenue | 1,807.20 | 2,061.86 | 1,391.71 | 2,297.71 |
Expenditure
Our total expenditure primarily consists of Purchases of stock in trade, Employee Benefit Expenses, Finance Costs, Depreciation and amortization expenses and Other Expenses.
? Purchases of stock in trade
It includes purchases of electronic two-wheeler vehicle which form part of the stock in trade.
? Employment Benefit Expenses
It includes wages, salaries and bonus, directors remuneration, contributions to welfare funds, provision for gratuity and other expenses.
? Finance Costs
Our finance costs mainly include finance charges and interest.
? Depreciation
Depreciation includes depreciation and amortization.
? Other Expenses
It includes Rent, Advertisement and marketing charges, Digital Marketing charges, Printing and Stationery, Insurance, Digital Marketing expenses, Telephone and internet charges, office maintenance, travelling charges, repairs and maintenance, electricity charges, Bank Charges, Business Promotion, consultancy charges, Payment to Auditor, Discount given, Courier & Postage Charges, Transport charges, Packing charges, Dealer activity reimbursement charges
RESULTS OF OUR OPERATION
(? In Lakhs)
| Particulars | 31-Dec-23 | 31-Mar-23 | 31-Mar-22 | 31-Mar-21 |
| Incomes: | ||||
| Revenue from Operations | 1,800.04 | 2,056.85 | 1,380.60 | 2,272.26 |
| % of total revenue | 99.60% | 99.76% | 99.20% | 98.89% |
| % Increase/(Decrease) | - | 48.98% | -39.24% | - |
| Other income | 7.16 | 5.01 | 11.11 | 25.46 |
| % of total revenue | 0.40% | 0.24% | 0.80% | 1.11% |
| % Increase/(Decrease) | - | -54.94% | -56.36% | - |
| Total Revenue | 1,807.20 | 2,061.86 | 1,391.71 | 2,297.71 |
| % Increase/(Decrease) | 48.15% | -39.43% | ||
| Expenses: | ||||
| Changes in inventories of finished goods | -23.56 | -229.19 | -180.19 | 91.84 |
| Particulars | 31-Dec-23 | 31-Mar-23 | 31-Mar-22 | 31-Mar-21 |
| % of total revenue | -1.30% | -11.12% | -12.95% | 4.00% |
| % Increase/(Decrease) | - | 27.19% | -296.20% | - |
| Cost of Services consumed | 1,464.66 | 2,048.42 | 1,224.18 | 1,772.35 |
| % of total revenue | 81.05% | 99.35% | 87.96% | 77.14% |
| % Increase/(Decrease) | - | 67.33% | -34.10% | - |
| 87.26 | 122.73 | 111.52 | 153.65 | |
| % of total revenue | 4.83% | 5.95% | 8.01% | 6.69% |
| % Increase/(Decrease) | - | 10.05% | -27.42% | - |
| Other Expenses | 61.81 | 47.76 | 124.71 | 191.08 |
| % of total revenue | 3.42% | 2.32% | 8.96% | 8.32% |
| % Increase/(Decrease) | - | -61.71% | 17.82% | - |
| Total Expense | 1,590.17 | 1,989.71 | 1,280.22 | 2,208.92 |
| % of total revenue | 87.99% | 96.50% | 91.99% | 96.14% |
| % Increase/(Decrease) | - | 55.42% | -42.04% | - |
| Profit before Interest, Depreciation and Tax | 217.03 | 72.14 | 111.49 | 88.79 |
| % of total revenue | 12.01% | 3.50% | 8.01% | 3.86% |
| Depreciation and amortization Expenses | 25.35 | 32.97 | 30.64 | 6.01 |
| % of total revenue | 1.40% | 1.60% | 2.20% | 0.26% |
| % Increase/(Decrease) | - | 7.61% | 409.61% | - |
| Profit before Interest and Tax | 191.68 | 39.18 | 80.86 | 82.78 |
| % of total revenue | 10.61% | 1.90% | 5.81% | 3.60% |
| Financial Charges | 23.56 | 27.50 | 58.72 | 22.15 |
| % of total revenue | 1.30% | 1.33% | 4.22% | 0.96% |
| % Increase/(Decrease) | - | -53.17% | 165.07% | - |
| Profit before Tax and Extraordinary Expenses | 168.12 | 11.68 | 22.13 | 60.63 |
| % of total revenue | 9.30% | 0.57% | 1.59% | 2.64% |
| Extraordinary Expenses | - | - | - | - |
| % of total revenue | - | - | - | - |
| % Increase/(Decrease) | - | - | - | - |
| Restated Profit/(Loss) before tax | 168.12 | 11.68 | 22.13 | 60.63 |
| % of total revenue | 9.30% | 0.57% | 1.59% | 2.64% |
| % Increase/(Decrease) | - | -47.24% | -63.49% | - |
| Tax expenses/(income) | ||||
| Current Tax | 36.99 | 0.92 | 4.39 | 14.68 |
| Provisions for Deferred Tax | 0.19 | 0.96 | 2.56 | -1.32 |
| Total tax expenses | 37.18 | 1.88 | 6.95 | 13.36 |
| % of total revenue | 2.06% | 0.09% | 0.50% | 0.58% |
| Restated profit/(loss) after Tax | 130.94 | 9.80 | 15.19 | 47.27 |
| % of total revenue | 7.25% | 0.48% | 1.09% | 2.06% |
| % Increase/(Decrease) | - | -35.47% | -67.87% | - |
FISCAL YEAR ENDED MARCH 31, 2023 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022 Income
Total revenue has increased by Rs670.14 Lakhs and 48.15%, from Rs1,391.71 Lakhs in the fiscal year ended March 31, 2022 to Rs2,061.86 Lakhs in the fiscal year ended March 31, 2023. The increase in revenue was on account of increase in sale of electronic two-wheeler vehicle and services provided by the Company.
Expenditure
Total Expenditure increased by Rs709.49 Lakhs and 55.42%, from Rs1,280.22 Lakhs in the fiscal year ended March31, 2022 to ? 1,989.71 Lakhs in the fiscal year ended March 31, 2023. Overall expenditure was increased mainly due to increase cost of material consumed or due purchase of electronic two-wheeler vehicle for sale purposes.
Cost of material Consumed
Cost of Material Consumed increased by ? 824.24 Lakhs and 67.33%, from Rs1,224.18 Lakhs in the fiscal year ended March31, 2022 to ? 2,048.42 Lakhs in the fiscal year ended March 31, 2023. Cost of Services consumed was increased
mainly due to increase volume of operations.
Employee Benefit Expenses
Employee Benefit Expenses in terms of value and percentage increased by Rs11.21 Lakhs and 10.05% from Rs111.52 Lakhs in the fiscal year ended March 31, 2022 to Rs122.73 Lakhs in the fiscal year ended March 31, 2023. Overallemployee cost was increased due to general increment in salary and incentives to employees.
EBIDTA
Profit before exceptional & extraordinary items and Tax has decreased by Rs39.35 Lakhs and 35.29% from Rs111.49 Lakhs in the fiscal year ended March 31, 2022 to Rs72.14 Lakhs in the fiscal year ended March 31, 2023. Profit before exceptional & extraordinary items and Tax was increased due to increase higher cargo handling and increase volume of operations.
Finance Costs
Finance Costs in terms of value and percentage decreased by ? 31.22 Lakhs and 53.17% from ? 58.72 Lakhs in the fiscal year ended March 31, 2022 to ? 27.50 Lakhs in the fiscal year ended March 31, 2023. Finance Costs was decreased mainly due to repayment of borrowings.
Depreciation & Amortization Expenses
Depreciation in terms of value increased by Rs2.33 Lakhs and 7.61% from ? 30.64 Lakhs in the fiscal year ended March 31, 2022 to ? 32.97 Lakhs in the fiscal year ended March 31, 2023. Increase in depreciation is due to increase in assets andis general in nature.
Other Expenses
Other Expenses in terms of value and percentage decreased by ? 76.96 Lakhs and 61.71% from ? 124.71 Lakhs in the fiscal year ended March 31, 2022 to Rs47.76 Lakhs in the fiscal year ended March 31, 2023. Other Expenses was decreased mainly due to decrease in Rent, Advertisement and marketing charges, Digital Marketing charges, Printing and Stationery, Insurance, Digital Marketing expenses, Telephone and internet charges, office maintenance, travelling charges, repairs and maintenance, electricity charges, Bank Charges, Business Promotion, consultancy charges, Payment to Auditor, Discount given, Courier & Postage Charges, Transport charges, Packing charges, Dealer activity reimbursement charges
Net Profit after Tax and Extraordinary items
Net Profit has decreased by Rs10.46 Lakhs and 47.24% from profit of ? 22.13 Lakhs in the fiscal year ended March 31, 2022 to profit of ? 11.68 Lakhs in the fiscal year ended March 31, 2023. Net profit was increased due to increase in revenue from operations and increase in profit margins.
FISCAL YEAR ENDED MARCH 31, 2022 COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2021 Income
Total revenue has decreased by Rs906 Lakhs and 39.43%, from Rs2,297.71 Lakhs in the fiscal year ended March 31, 2021 to Rs1,391.71 Lakhs in the fiscal year ended March 31, 2022. The decrease in revenue was on account of decrease in sale of electronic two-wheeler vehicle and decrease in volume of operations.
Expenditure
Total Expenditure increased by Rs928.70 Lakhs and 42.04%, from Rs2,208.92 Lakhs in the fiscal year ended March31, 2021 to Rs1,280.22 Lakhs in the fiscal year ended March 31, 2022. Overall expenditure was decreased mainly due to decrease in purchases of electronic two-wheeler vehicle for sale purposes.
Cost of Services Consumed
Cost of Services Consumed decreased by Rs548.17 Lakhs and 30.93%, from Rs1,772.35 Lakhs in the fiscal year ended
March31, 2021 to Rs1,224.18 Lakhs in the fiscal year ended March 31, 2022. Cost of Services consumed was decreased mainly due to increase volume of operations.
Employee Benefit Expenses
Employee Benefit Expenses in terms of value and percentage decreased by Rs42.13 Lakhs and 27.42% from Rs153.65 Lakhs in the fiscal year ended March 31, 2021 to Rs111.52 Lakhs in the fiscal year ended March 31, 2022. Overall employee cost was decreased due to retrenchment of employees.
Other Expenses
Other Expenses in terms of value and percentage decreased by Rs66.37 Lakhs and 34.73% from Rs191.08 Lakhs in the fiscal year ended March 31, 2021 to Rs124.71 Lakhs in the fiscal year ended March 31, 2022. Other Expenses was decreased mainly due to decrease in Commission & Incentives Expenses and Professional Fees.
EBIDTA
Profit Before Exceptional & Extraordinary Items and Tax has increased by Rs22.70 Lakhs and 25.57% from Rs88.79 Lakhs in the fiscal year ended March 31, 2021 to Rs111.49 Lakhs in the fiscal year ended March 31, 2022. Profit before Exceptional & Extraordinary Items and Tax was increased due to decrease in overall expenses.
Finance Costs
Finance Costs in terms of value and percentage increased by Rs36.57 Lakhs and 165.07% from Rs22.15 Lakhs in the fiscal year ended March 31, 2021 to Rs58.72 Lakhs in the fiscal year ended March 31, 2021. Finance Costs was increased mainly due to increase in overall borrowings and interest expenses.
Depreciation & Amortization Expenses
Depreciation in terms of value increased by Rs24.62 Lakhs and 409.61% from ? 6.01 Lakhs in the fiscal year ended March 31, 2021 to ? 30.64 Lakhs in the fiscal year ended March 31, 2022. Increase in depreciation is general in nature.
Net Profit after Tax and Extraordinary items
Net Profit has decreased by Rs32.08 Lakhs and 67.87% from profit of Rs47.27 Lakhs in the fiscal year ended March 31, 2021 to profit of Rs15.19 Lakhs in the fiscal year ended March 31, 2022. Net profit was increased due to increase in revenue from operations and decrease in other expenses.
Cash Flows
(Amount f in lacs)
| Particulars | For the year ended March 31, | ||
| 2023 | 2022 | 2021 | |
| Net Cash from Operating Activities | 267.49 | 262.67 | 211.40 |
| Net Cash from Investing Activities | (183.66) | (377.36) | (410.82) |
| Net Cash used in Financing Activities | (82.03) | 98.45 | 212.97 |
Cash Flows from Operating Activities
Net cash from operating activities for fiscal 2023 was at ? 267.49 lacs as compared to the Profit Before Interest, Depreciation and Tax at Rs72.14 lacs, while for fiscal 2022, net cash from operating activities was at Rs262.67 lacs as compared to the Profit Before Interest Depreciation and Tax at Rs111.49 lacs. For fiscal 2021, the net cash from operating activities was Rs211.40 lacs compared to Profit before Interest, Depreciation and Tax of Rs88.79 lacs.
Cash Flows from Investment Activities
Net cash from investing activities for fiscal 2023 was at ? (183.66) lacs due to additions in increase in Fixed Assets, while for fiscal 2022, net cash from investing activities was at ? (377.36) lacs due to investment in Fixed Assets. For fiscal 2021, the net cash from investing activities was ? (410.82) lacs.
Cash Flows from Financing Activities
Net cash from financing activities for fiscal 2023 was at ? (82.03) lacs due to interest payment, while for fiscal 2022, net cash from financing activities was at ? 98.45 lacs due to higher amount of borrowings. For fiscal 2021, the net cash from financing activities was Rs212.97 lacs due to interest payment
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