E to E Transportation Infrastructure Ltd Management Discussions

OPERATIONS

You should read the following discussion in conjunction with our restated financial statements attached in the chapter titled " Financial Information of the Company " beginning on page 184. You should also read the section titled " Risk Factors " on page 28 and the section titled " Forward Looking Statements " on page 20 of this Draft Red Herring Prospectus, which discusses a number of factors and contingencies that could affect our financial condition and results of operations. The following discussion relates to us, and, unless otherwise stated or the context requires otherwise, is based on our Restated Financial Statements.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditor dated September 18, 2025 which is included in this Draft Red Herring Prospectus under " Financial Statements " . The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelve-month period ended March 31 of that year.

BUSINESS OVERVIEW

We are an ISO 9001:2015 certified company, operating as a system integrator for rail engineering solutions across mainline, urban transit, and private siding segments. With over 15 years of experience, we offer comprehensive rail engineering services for railway infrastructure projects, providing customized solutions for designing, procurement, installation and testing of rail signaling & tele-communication systems, track electrification and turnkey projects involving civil and track components, both in India and in select international markets. Our client base includes Zonal Railways, public sector undertakings (PSUs) under Indian Railways, large-scale manufacturers, corporate entities with their privately owned rail sidings and infrastructure development companies. Our integrated offerings include design, consultancy, procurement, supply chain solutions, system integration, installation and operations & maintenance services across a wide spectrum of railway infrastructure projects focusing on railway signal modernization and automation initiative.

Since our incorporation in Financial Year 2010, we have successfully completed diverse projects including railway signaling and telecommunication, railway electrification, design, construction for railway tracks, operation and maintenance of the railway and urban transit projects. Some of major projects includes CBTC signaling system for Hyderabad Metro and Nagpur Metro, signaling and telecommunication modernization for siding works for Vizag Steel Plant, NUPPL Power plant, UPVRNL at Hardwaganj, Electronic Interlocking system modernization for Hosur Salem, Gujrat Pipavav port limited siding expansion with DFCC connectivity, Railway Electrification and Signaling system upgradation for South Western Railway for Kadur Chikmagalur as part of 100% electrification initiative of Indian Railway, platform screen door installation for Mumbai metro line 3 and Chennai Metro Phase 1. Further, over a span of last five financial years (FY 2021 to FY 2025), we have completed around 17 contracts relating to designing, procurement, installation and testing of rail signaling & telecommunication systems, private sidings and track electrification.

As of June 30, 2025, we have order book (unfulfilled portion of the original order) comprising 49 ongoing contracts, with a total order value of 43,964.38 Lakhs pending to be completed. These ongoing contracts span various segments, including signaling and telecommunication, electrification, civil infrastructure, and system integration, and are currently at different stages of execution. Our proven track record in executing complex projects across multiple disciplines demonstrates our readiness to take part in future rail infrastructure tenders. Below is the segment-wise order book (unfulfilled portion of the original order) as on June 30, 2025 -

(Amt in Rs. Lakhs)

Service division	Order value	Amount booked till June 30, 2025	Balance amount*
Signalling and Telecommunications (S&T)	69,327.02	41,500.48	27,826.53
Overhead Electrification (OHE)	16,668.91	9,332.43	7,336.48
Tracking Projects and System Integration	11,133.35	2,403.08	8,730.28
Others	82.09	11.00	71.09
Total	97,211.37	53,246.99	43,964.38

*among the order book mentioned above order book amounting to Rs. 13000 lakhs has been received through JV partner. As of 30th June 2025, the pending execution value stands at Rs. 43,964.38 lakhs. This represents the unfulfilled portion of the original order value of INR 97,211.37 lakhs. Out of this total, an amount of INR 53,246.99 lakhs has already been recognized as revenue.

To enhance the safety and efficiency of train operations, signalling systems are being modernized with the latest technologies, including Kavach, Electronic Interlocking, and Automatic Signalling. (Source - Industry Data). Government has been taking steps for modernization of the signalling system to enhance the safety and efficiency of train operations. To take advantage of these initiatives we have established E2E Rails Engineering Design and Research Center (EDRC) for undertaking research and testing activities in railway engineering. The centre is equipped with a team of engineers and designers equipped with advanced tools for electrification modelling, and configuration tools for Electronic Interlocking (EI) systems, for undertaking activities relating to signalling & telecommunication, electrification & electronic interlocking design etc. Further, we have incorporated a wholly owned subsidiary company i.e. Nova Control Tecnologix Private Limited with an objective to actively engage in the business of designing, development and manufacturing of products required in the railway signalling and telecommunication business. This subsidiary has been created to achieve the vision of getting " Atmanirbhar " and also contribute on the Make in India initiative. In the inception itself Nova Control Tecnologix Private Limited have entered into an agreement with Tata Elxsi for designing and co-develop Automatic Train Protection System (Kavach) to address the requirements of Indian Railways Industry as well as international markets.

We follow a structured approach to project execution, balancing in-house capabilities with selective outsourcing to ensure timely delivery and adherence to quality standards. While our core activities such as design, engineering, and system integration are managed internally, we outsource certain execution components such as civil works, fabrication, and installation to qualified subcontractors and vendors. All outsourced activities are monitored through quality control processes, supervisory oversight, and compliance with project specifications and safety protocols. This enables us to optimize resource allocation, scale operations across multiple sites, and maintain consistency in delivery while ensuring that each project meets the technical and regulatory requirements of our clients.

Our workforce as of July 31, 2025 consisted of 425 full time employees on a standalone basis which position us to undertake growing number of large scale projects. As of the date of this Draft Red Herring Prospectus, our ongoing projects are spread across different states, which includes Andhra Pradesh, Assam, Bihar, Chhattisgarh, Delhi, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Tamil Nadu, Telangana, Uttar Pradesh, West Bengal. To ensure efficient project execution and localized coordination, we have established Project Implementation Units (PIUs) across these locations. These PIUs are responsible for managing and executing projects within their assigned regions, which helps to manage resources effectively, maintain coordination with clients, and ensure timely execution of projects across diverse geographies.

We cater to a broad client base in India, including Zonal railways, public sector undertakings (PSUs) under Indian Railways and its affiliates, large-scale manufacturers and infrastructure development companies under our private sector clients. Our projects span key segments such as railway mainline, urban transit (including metro systems), and private sidings for industrial customers. Breakup of our revenue from Government and Non-government entities is as follows:-

(Amount in Lakhs)

Classification	For the year ending March 31, 2025		For the year ending March 31, 2024		For the year ending March 31, 2023
	Amount	%	Amount	%	Amount	%
B2G (From Government clients)	16,266.39	64.86	12,542.33	73.70	4,094.89	30.43
B2B (From Other than government
	8,814.51	35.14	4,475.67	26.30	9363.27	69.57
clients)
Total Revenue	25,080.90	100.00	17,018.01	100.00	13,458.16	100.00

We also form project-specific joint ventures and consortiums with other infrastructure and construction companies. In particular, when a project requires us or our consortium partners to meet specific eligibility requirements in relation to certain projects, including requirements relating to specific types of experience and financial resources, we enter into such partnerships or consortiums with other infrastructure and construction companies. As on date of this Draft Red Herring Prospectus, we operate along with our five wholly owned Subsidiaries and three Joint Venture partners. For further details refer " Our Subsidiaries and Joint Ventures " and History and certain Corporate matters " beginning on page 155 & 148.

Our Company has established a consistent track record of financial performance and growth. Our revenue from operations on consolidated basis for the Financial Year 2023, Financial Year 2024 and Financial Year 2025 aggregated to 13458.16 lakhs, 17018.01 lakhs and 25080.90 lakhs, respectively. Our net profit was 777.06 lakhs, 971.41 lakhs and 1437.37 lakhs, respectively, for the same periods. Our revenue from operations has increased at a CAGR of 36.51% from 13458.16 lakhs in the Financial Year 2023 to 25080.90 lakhs in the Financial Year 2025, and our net profit has increased at a CAGR of 36.01% from 777.06 lakhs in the Financial Year 2023 to 1437.37 lakhs in the Financial Year 2025. Our EBITDA for Financial Year 2023, Financial Year 2024 and Financial Year 2025 aggregated to 1327.70 lakhs, 1834.42 lakhs and 2656.86 lakhs, respectively.

Key Indicators of our Company

( In Lakhs except percentages and ratios)

Key Financial Performance	FY 2024-25	FY 2023-24	FY 2022-23
Revenue from operations (1)	25,080.90	17,018.01	13,458.16
EBITDA (2)	2,656.86	1,834.42	1,327.70
EBITDA Margin (3)	10.59%	10.78%	9.87%
PAT (4)	1,437.37	971.41	777.06
PAT Margin (5)	5.73%	5.71%	5.77%
RoE(%) (6)	15.72%	15.67%	14.59%
RoCE (%) (7)	15.69%	15.68%	14.21%
Debt Equity Ratio (8)	0.57	0.91	0.75
Working Capital (9)	16,607.99	11,560.78	8,499.77

Notes:

(1) Revenue from operation means revenue from sales, service and other operating revenues (2) EBITDA is calculated as Profit before tax + Depreciation + Finance Cost - Other Income (3) EBITDA Margin is calculated as EBITDA divided by Revenue from Operations (4) PAT is calculated as Profit before tax Tax Expenses (5) PAT Margin is calculated as PAT for the period/year divided by revenue from operations. (6) Return on Equity is ratio of Profit after Tax and Average Shareholder Equity

(7) Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as Shareholders Fund + Long term borrowing + Short term borrowing+ Deferred Tax Liability.

(8) Debt Equity Ratio is calculated as short term borrowings + Long term borrowings divided by shareholders fund. (9) Working Capital is calculated as total current assets less current liabilities (excluding short term borrowings).

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of " Statement of Significant Accounting Policies " , please refer to Annexure IV of Restated Financial Statements beginning on page 217 of this Draft Red Herring Prospectus.

Factors Affecting our Results of Operations

1. Changes in focus, laws and regulations or Government policies relating to the Railway infrastructure sector..

2. Changes in requirements, specifications and design standards prescribed by Indian Railways, metro corporations, or other government agencies may increase costs or delay project execution.

3. Adverse developments in the states where our project sites are located (including policy changes, regional unrest, or disruptions in approvals).

4. Loss of any of our major customers, including central and state government entities, public sector undertakings (PSUs) or large private clients.

5. Any slowdown in railway infrastructure spending or adverse developments in the overall transportation and logistics sector.

6. Interruptions in the supply of steel, cement, signaling equipment, electrical components, or other critical materials and machinery.

7. Our ability to retain key managerial personnel, engineers, and skilled manpower.

8. Failure to adopt or keep pace with rapid technological advancements in signaling, electrification, track laying, or digital railway systems.

9. Our ability to meet interest and principal repayment obligations on our existing debt and comply with financial covenants.

10. Our ability to successfully implement growth strategies, and diversify into allied infrastructure segments.

11. Delays or inability to obtain mandatory approvals, licenses, and clearances from government, regulatory, or railway authorities may hinder timely execution of projects.

12. Occurrence of environmental hazards, accidents at project sites, or uninsured losses.

13. Any adverse legal, regulatory, or arbitration proceedings initiated against our company, promoters, directors, or key managerial personnel.

14. Macroeconomic factors such as slowdown in infrastructure spending, changes in budgetary allocations to the railways sector, fluctuations in interest rates, inflation, or political and economic instability may adversely impact our business and growth.

Discussion on Result of Operations

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the years ended on March 31, 2025, March 31, 2024, and March 31, 2023.

( In Lakhs)

			For the Year Ended On
Particulars	March 31, 2025	% of Total Income	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income
INCOME
I. Revenue from operations	25,080.90	98.82%	17,018.01	98.65%	13,458.16	99.18%
II. Other income	300.73	1.18%	232.17	1.35%	111.43	0.82%
III. Total Income (I+II)	25,381.63		17,250.17		13,569.59
IV. Expenses:
Purchase of stock-in-trade	16,173.61	63.72%	11,602.01	67.26%	8,437.51	62.18%
Changes in inventories of stock-in-trade	-126.29	-0.50%	12.09	0.07%	-7.32	-0.05%
Employee benefits expense	2,385.76	9.40%	1,501.10	8.70%	1,049.29	7.73%
Finance costs	1,241.33	4.89%	702.66	4.07%	497.36	3.67%
Depreciation and amortization expense	97.39	0.38%	59.40	0.34%	14.37	0.11%
Other expenses	3,760.92	14.82%	1,963.42	11.38%	2,521.56	18.58%
Total expenses	23,532.73	92.72%	15,840.69	91.83%	12,512.77	92.21%
V. Profit Before exceptional and extraordinary items and
	1,848.90	7.28%	1,409.49	8.17%	1,056.82	7.79%
Tax (III-IV)
less: Exceptional items
VI. Profit/(loss) before extraordinary items and tax	1,848.90	7.28%	1,409.49	8.17%	1,056.82	7.79%
Less: Extraordinary items
VII. Profit/(loss) before tax	1,848.90	7.28%	1,409.49	8.17%	1,056.82	7.79%
VIII. Tax expenses
Current Tax	491.87	1.94%	365.49	2.12%	225.45	1.66%
Deferred Tax	-42.08	-0.17%	18.31	0.11%	16.68	0.12%
IX. Profit /(Loss) for the year	1,399.11	5.51%	1,025.69	5.95%	814.69	6.00%
X. Share of profit/(loss) from Associate Enterprises	38.26	0.15%	-54.27	-0.31%	-37.63	-0.28%
XI. Profit /(Loss) for the year	1,437.37	5.66%	971.41	5.63%	777.06	5.73%

Revenue from Operations

Our revenue from operations is primarily derived from railway infrastructure projects awarded by Indian Railways, metro rail corporations, public sector undertakings, and other government and private sector clients. The scope of work under these contracts typically includes the supply of materials, installation, testing and commissioning of signalling & Telecommunication systems, track works, and overhead electrification (OHE) works etc. The Company works as a System Integrator in the railway infrastructure sector, wherein revenue is recognized based on the progress of work executed in line with contractual milestones. This includes project execution, procurement and supply of key components to on-site installation and successful commissioning of the systems.

Other Income

Other income primarily comprises interest earned on bank deposits, loans and advances extended to related parties, income tax refunds, and other non-operating income.

Purchases of Stock-in-Trade

This head includes purchases of materials required for signalling and telecommunications systems, railway track works, OHE (Overhead electrification projects). The cost of material is closely linked to the scale of project execution, and any fluctuations in raw material procurement directly impact this expense line.

Employee Benefits Expense

Employee benefits expense includes salaries, wages, allowances, incentives, bonuses, contributions to provident and other employee welfare funds, gratuity, and staff welfare expenditure. As a project-driven organization, the Company s human resources including engineers, technical experts, and skilled workforce play a vital role in timely execution, making this a significant cost component.

Finance Costs

Finance costs primarily consist of interest on borrowings, bank charges, and commissions. Given the capital-intensive nature of the railway infrastructure business, efficient management of borrowing costs and working capital is critical to sustaining profitability.

Depreciation and Amortization Expense

Depreciation and amortization expense represents depreciation on tangible fixed assets and amortization of intangible assets.

Other Expenses

Other expenses comprise operational and administrative costs, including sub-contracting expenses, professional fees, travelling and conveyance, rent, rates and taxes, freight inward charges, insurance, security charges, provisions for advances, miscellaneous expenses, repairs and maintenance, CSR expenditure, printing and stationery, power and fuel, consumption of stores and spares, communication costs, and provision for warranty expenses.

Financial Performance Highlights for the Year Ended on March 31, 2025 (Based on Restated Consolidated Financial Statements)

Total Income

Total income for the period ended on March 31, 2025 stood at 25381.63 Lakhs, which includes revenue from operation amounting to 25,080.90 lakhs and other income of 300.73 lakhs.

Revenue from Operations

During the year ended on March 31, 2025 revenue from operations stood at 25080.90 Lakhs. The revenue from operations includes the supply of materials, installation, testing and commissioning of Signalling & telecommunication systems, track works, and overhead electrification (OHE) works etc. The revenue from operation represents 98.82% of the total revenue of the Company.

Other Income

During the year ended on March 31, 2025, other income was 300.73 Lakhs. Major portion of the other income includes interest income on bank deposits.

Purchases of Stock-in-Trade

During the year ended on March 31, 2025, Purchase of Stock-in-trade was 16173.61 Lakhs. This includes purchases of materials required for signalling and telecommunications systems, railway track works, OHE (Overhead electrification projects).

Employee benefits expenses

Our Company has incurred 2385.76 Lakhs as employee benefits expense for the year ended on March 31, 2025. Employees benefit cost represent approx. 9.40% of the total revenue of the company as human resources including engineers, technical experts, and skilled workforce are critical for the timely and efficient project execution.

Depreciation and amortization expenses

Depreciation and amortization for the Year ended March 31, 2025 was 97.39 Lakhs. Depreciation represents approx. 0.38% of our total revenue as we operate on an asset light model.

Other expenses

Other Expenses for the year ended March 31, 2025 stood at 3760.92 Lakhs. The major components of other expenses includes sub-contracting expenses, travelling and conveyance, professional fees, rent, rates and taxes and freight charges.

Restated Profit before tax:

The Company reported Restated profit before tax for year ended March 31, 2025 of 1848.90 Lakhs.

Restated profit after tax:

The Company reported Restated profit after tax for Year ended March 31, 2025 of 1437.37 Lakhs including profit from associate amounting to 38.26 Lakhs.

Comparison of Financial Year 2025 with Financial Year 2024 (Based on Restated Financial Statements)

Total Income

Our total income has increased by 47.14% to 25381.63 lakhs in fiscal 2025 from 17250.17 lakhs in Fiscal 2024. The total income has increased as the revenue from the operations has increased from 17,018.01 Lakhs in FY 2024 to 25,080.90 Lakhs in FY 2025, reflecting a growth of 47.38%. This increase was primarily driven by execution and billing of orders during FY 2025, along with the completion of works relating to projects already in progress. Further, the other income also increased from Rs. 232.17 Lakhs in FY 2024 to 300.73 Lakhs in FY 2025, an increase of approx. 29.53%.

Revenue from Operations

Revenue from Operations increased from 17,018.01 Lakhs in FY 2024 to 25,080.90 Lakhs in FY 2025, reflecting a growth of around 47.38%. The major increase in revenue during this period was due to Company s continued eligibility to participate in direct railway tenders, which further strengthened its project pipeline and execution capabilities and eligibility to participate in projects relating to private sidings (B2B), particularly with large corporates that own and maintain their own railway sidings. This increase was primarily driven by execution and billing of orders during FY 2025, along with the completion of works relating to projects already in progress.

Other Income

Other Income increased from 232.17 Lakhs in FY 2024 to 300.73 Lakhs in FY 2025, an increase of 68.56 Lakhs which is around 29.53% as compared to the previous year. The increase was mainly on account of higher interest income on bank deposits which increased from Rs. 189.47 lakhs in fiscal year 2024 to Rs. 246.64 lakhs in fiscal year 2025, and interest on loans and advances to related parties which increased from Rs. 42.30 lakhs in FY2024 to Rs. 53.57 lakhs in FY2025.

Expenses

Our total expenses have increased by 48.56 % to 23532.73 lakhs in Fiscal 2025 from 15840.69 lakhs in Fiscal 2024. The main reason for increase is due to increase in purchase of stock in trade, employee benefit expense, finance cost, depreciation and other expenses, for details of the increase is mentioned below.

Purchase of Stock-in-Trade

Purchase of Stock-in-Trade increased from 11,602.01 Lakhs in FY 2024 to 16,173.61 Lakhs in FY 2025, representing an increase of approx. 39.40%. This increase is directly linked to the scale of project execution, with material procurement undertaken as per the Bill of Quantity schedules in respect of ongoing contracts. Further, our tender include supply and installation of material along with project execution work. The material to revenue ratio was 64.49% of the revenue in Fiscal year 2025 as against 68.17% of the revenue in the fiscal year 2024 pursuant to change in the composition of material supply and sub-contracting charges during the Fiscal year 2025.

Employee benefits expenses

Employee Benefit Expenses increased by 58.93% during FY 2025, primarily due to an increase in headcount necessitated by higher execution requirements. The workforce expanded from 258 employees in FY 2024 to 379 employees in FY 2025, in line with the company s execution needs for existing projects and expansion of its order book.

Finance cost

Finance Costs increased from 702.66 Lakhs in FY 2024 to 1,241.33 Lakhs in FY 2025, an increase of around Rs. 538.67 Lakhs representing around 76.66%. This was mainly attributable to higher interest on borrowings which increased form Rs. 651.97 lakhs in FY2024 to Rs. 973.04 lakhs in FY2025 and an increase in bank charges and commission from Rs. 50.69 lakhs in FY2024 to Rs. 268.29 lakhs in FY2025, arising from additional working capital facilities availed during the year to support project execution.

Depreciation and amortization expenses

Depreciation and Amortization increased from 59.40 Lakhs in FY 2024 to 97.39 Lakhs in FY 2025, representing an increase of around Rs. 37.99 Lakhs representing 63.95%. The increase was due to capitalization of new fixed assets and intangible assets during the year amounting to Rs. 372.15 lakhs.

Other expenses

Other expense has increased from 1963.42 lakhs in FY 2024 to 3760.92 Lakhs in FY 2025. The increase is mainly due to increase in subcontracting expenses, rates and taxes, professional fees, rent security charges, travelling and conveyance, insurance and security charges. However, certain expenses like repairs and maintenance and freight inwards has shown a decreasing trend. Sub-contracting charges are proportional to the completion and execution of orderbook and consequently revenue of the company. During FY 2024 subcontracting expenses was 782.14 Lakhs, which has been increased to 2312.58 lakhs in FY 2025. Rates and taxes and rent has increased by Rs. 129.91 Lakhs in FY 2025, as the company was required to rent properties for its project site for the purpose of temporary storing of products and residence for the employees like site manager. Professional fees which represents Audit fees, various form filing fees and other professional fees increased from 242.99 lakhs in FY 2024 to 324.47 Lakhs in FY 2025. These other expenses have increased on account of new orders received and execution of new project sites.

Tax Expenses

Increase in the tax expenses is on account of increase in the revenue and resulting profits of the company.

Restated Profit after Tax

The Restated profit after tax of the company increased from 971.41 lakhs in the Fiscal 2024 to 1437.37 lakhs in the Fiscal 2025 representing an increase of 47.97 %. The increase in the PAT was the resultant of the increase in Total income of the company from 17250.17 Lakhs in FY 2024 to 25381.63 Lakhs in FY 2025, which is an increase of 47.38%. Further the increase in total expense from 15840.69 lakhs in FY 2024 to 23532 Lakhs in FY 2025 which is an increase of 48.56%. However, the PAT margin of the company has marginally increased along with increase in revenue from 5.63% in FY2024 to 5.66% in FY2025.

Comparison of Financial Year 2024 with Financial Year 2023 (Based on Restated Financial Statements)

Total Income

Our total income is increased by 27.12 % to 17250.17 lakhs in Fiscal 2024 from 13,569.59 lakhs in Fiscal 2023. The total income has increased majorly due to increase in Revenue from operations of the company increased from 13,458.16 Lakhs in FY 2023 to 17,018.01 Lakhs in FY 2024, representing a growth of 26.45%. Also, the other income rose from 111.43 Lakhs in FY 2023 to 232.17 Lakhs in FY 2024, representing an increase of 108.36%.

Revenue from Operations

Revenue from Operations increased from 13,458.16 Lakhs in FY 2023 to 17,018.01 Lakhs in FY 2024, representing a growth of 3,559.85 Lakhs i.e. 26.45% as compared to the previous year. The improvement was primarily driven by execution and billing of orders during the year, along with completion of works relating to projects already in progress. Further, the major increase in revenue during this period was primarily on account of the Company becoming eligible to participate directly in railway tenders. This expanded eligibility enabled the Company to bid for and execute projects directly with Indian Railways, resulting in higher order inflows and revenue recognition compared to the previous year.

Other Income

Other Income rose from 111.43 Lakhs in FY 2023 to 232.17 Lakhs in FY 2024, i.e. an increase of Rs. 120.74 Lakhs representing an increase of 108.36%. The increase was mainly attributable to higher interest income on bank deposits which increased from Rs. 109.59 lakhs in fiscal year 2023 to Rs. 189.47 lakhs in fiscal year 2024, and interest on loans and advances to related parties which increased to Rs. 42.30 lakhs in FY2024.

Expenses

Our total expenses have increased by 26.60% to 15840.69 lakhs in Fiscal 2024 from 12512.77 lakhs in Fiscal 2023. The main reason for increase is the increase in total expense is due to increase in purchase of stock in trade by 37.51% which is an increase of 3164.50 lakhs, Employee benefit expense which increased from 1049.29 lakhs in FY 2023 to 1501.10 lakhs in FY 2024, Depreciation and amortization cost increased by 45.03 lakhs and other expense has reduced from 2521.56 lakhs in FY 2023 to 1963.42 lakhs in FY 2024, which is a reduction of 22.1% as compared to FY 2023.

Purchase of Stock-in-Trade

Purchase of Stock-in-Trade increased from 8437.51 Lakhs in FY 2023 to 11602.01 Lakhs in FY 2024, representing an increase of approx. 37.51%. This increase is directly linked to the scale of project execution, with material procurement undertaken as per the Bill of Quantity schedules in respect of ongoing contracts. Further, our tender include supply and installation of material along with project execution work. The material to revenue ratio was 68.17% of the revenue in Fiscal year 2024 as against 62.69% of the revenue in the fiscal year 2023 pursuant to change in the composition of material supply and sub-contracting charges during the Fiscal year 2024.

Employee benefits expenses

Employee Benefit Expenses increased from 1,049.29 Lakhs in FY 2023 to 1,501.10 Lakhs in FY 2024, an increase of Rs 451.81 Lakhs representing around 43.06% as compared to previous year. The increase was primarily due to a rise in headcount, driven by the manpower requirements of ongoing projects, new orders received, and expansion initiatives.

Depreciation and amortization expenses

Depreciation and Amortization increased from 14.37 Lakhs in FY 2023 to 59.40 Lakhs in FY 2024, representing an increase of 45.03 Lakhs i.e. 313.36%. This increase was on account of capitalization of new fixed assets amounting to Rs. 194.48 lakhs during the year.

Other expenses

Other Expenses decreased from Rs. 2,521.56 Lakhs in FY2023 to Rs. 1,963.42 Lakhs in FY 2024, showing a decline of 558.14 Lakhs i.e a decrease of 22.13%. Subcontracting expenses, rates and taxes, professional fees, rent, security charges, travelling and conveyance, and insurance forms the major portion of the other expenses. Subcontracting charges, which are directly proportional to execution and completion of projects, decreased to 782.14 Lakhs in FY 2024 from Rs. 1214.40 Lakhs in FY 2023. Rates and taxes and rent reduced by approx. Rs. 42.33 Lakhs due to rentals of project sites, temporary storage facilities, and leased spaces for project staff. Professional fees decreased from 455.77 Lakhs in FY 2023 to 242.99 Lakhs in FY 2024, covering audit fees, statutory filings, and other advisory services.

Tax Expenses

Current tax increased by 58.51% from 242.13 lakhs in Fiscal 2023 to 383.80 lakhs in Fiscal 2023. Such increase is the resulting factor of increased profits.

Restated Profit after Tax

The Restated profit after tax of the company increased from 777.06 lakhs in the Fiscal 2023 to 971.41 lakhs in the Fiscal 2024 representing an increase of 25.01%. The increase in the PAT was the resultant of the increase in Total income of the company from 13569.59 Lakhs in FY 2023 to 17250.17 Lakhs in FY 2024, which is an increase of 27.12 %. Further the increase in total expense from 12512.77 lakhs in FY 2023 to 15840.69 Lakhs in FY 2024 which is an increase of 26.60%. However, the PAT margins marginally reduced from 5.73% in FY2023 to 5.63% in FY2024.

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

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. Except as disclosed in this Draft Red Herring Prospectus, there are no unusual or infrequent events or transactions in our Company.

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

There are no significant economic changes that may materially affect or likely to affect income from continuing operations.

3. 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 " Risk Factors " beginning on page 28 of the Draft 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.

4. Future changes in relationship between costs and revenues

Other than as described in the sections " Risk Factors " , " Our Business " and " Management s Discussion and Analysis of Financial Condition and Results of Operations " on pages 28, 122 and 226 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Segment Reporting

Our business activity primarily falls within a single business and geographical segment, other than as disclosed in " Restated Financial Statements " on page 184 we do not follow any other segment reporting

6. Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter " Our Business " , our Company has not announced any new product or service.

7. Seasonality of business

Our business and revenue from operations are subject to seasonal variations and cyclicality. Our sales and results of operations may vary by fiscal quarter to other fiscal quarter. For further information, see " Industry Overview " and " Our Business " on pages 111 and 122, respectively of this Draft Red Herring Prospectus.

8. Dependence on single or few customers

Our business is dependent on limited number of customer including Indian Railway and its affiliates. For details please refer to " Risk Factor " on page 28.

9. Competitive conditions

Competitive conditions are as described under the Chapters " Industry Overview " and " Our Business " beginning on pages 111 and 122, respectively of this Draft Red Herring Prospectus.

10. Details of material developments after the date of last balance sheet i.e. March 31, 2025

Except as mentioned below, there is no material development that has taken effect after the date of last Balance sheet i.e. March 31, 2025

1. The Board of Directors in their meeting held on August 25, 2025 allotted 1,20,41,280 Bonus equity shares in the ratio of 32:1 i.e. Thirty-Two (32) Equity shares for every one (1) Equity share held by each shareholder.

2. We have changed the designation of Anshul Gupta from Non-Executive Independent Director to Non-Executive Non-Independent Director of the Company with effect from September 18, 2025 vide a board resolution dated September 18, 2025 and Special Resolution passed in the Extra-Ordinary General Meeting held on September 19, 2025.

3. We have passed a Board resolution in the meeting of the Board of Directors held on September 18, 2025 authorizing the Board of Directors to raise funds by making an Initial Public Offering.

4. We have passed a special resolution in the Extra Ordinary General meeting held on September 19, 2025 authorizing the Board of Directors to raise funds by making an Initial Public Offering.

5. The Board approved incorporation of a wholly owned subsidiary, Nova Control Tecnologix Private Limited, for R&D and commercialization of safety-critical infrastructure products

6. The Board has approved and giving corporate guarantee for the borrowing of term loan by Nova Control Tecnologix Private Limited (Wholly owned Subsidiary) amounting Rs. 1800 lakhs on dated August 26, 2025.