OF FINANCIAL CONDITION AND RESULTS OF 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 187. You should also read the section titled "Risk Factors" on page 35 and the section titled "Forward Looking Statements" on page 21 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 June 28, 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
Incorporated in 2008, our Company is primarily engaged in manufacturing of wide range of sustainable packaging and promotional bags made out of cotton and jute. We are engaged in the export of these bags globally. During the Fiscal 2025, we exported our products to more than 27 countries. Our major export market is European Union, USA, Japan, and South East Asia and Mexico, etc. With the awakening of global market where more and more measures are being taken to reduce the use of plastics, we address to the alternate solution to use products which are sustainable, reusable and biodegradable, like bags made out of cotton or jute which are eco-friendly.
We offer a variety of eco-conscious cotton and jute bags, our offerings include:
Recycled Cotton Bags Made from Pre and Post-consumer waste, these bags help reduce textile waste while offering durability and style. Organic Cotton Bags Produced from cotton grown without pesticides or fertilizers, these bags are gentle on the environment and perfect for conscious consumers. Fairtrade Cotton Bags These bags are crafted from cotton that meets Fairtrade certification standards, ensuring ethical labor practices and fair wages for farmers producing such cotton. Conventional Cotton Bags A classic, affordable option made from traditional cotton, combining functionality and simplicity. Jute Bags A sustainable alternative made from natural jute fibers, perfect for carrying heavier loads while still being eco-friendly. Moreover, our offerings include textile made up articles like aprons.
We are OEMs catering to packaging solutions of various customers like: Super Markets and Retail chains, Wholesalers and Promotional companies. We customize our products as per the customer requirements with screen printing, embroidery, labelling, sizing etc. Our customer base is divided into two major segments i.e. (i) Functional where major customers are Retailers/Wholesalers and Supermarkets and (ii) Promotional where major Customers are Promotional companies and Corporate Gifting agencies. During the Fiscal 2025 we sold our products to 55 number of customers addressing to functional requirements and 32 number of customers addressing to promotional requirements. As on June 30, 2025, we have an outstanding order book for supply for cotton and jute bags worth Rs 8809.67 lakhs from around 63 number of customers.
As on date of this Draft Red Herring Prospectus, we are currently operating from our three factories as follows:
? Factory I Barasat Unit: situated at Village Khilkapur, Noapara, Mirhati, Daripukur, 24 Parganas (N), West Bengal 700125 with a constructed area admeasuring 68,262 sq. ft,
? Factory II Badu Unit II: situated at 187/A, Badu Road, P.O. Badu, PS-Madhyamgram, N
24 Parganas, West Bengal 700128 with a constructed area admeasuring 1,11,015.00 sq. ft. ? Factory III Ahmedabad Unit I: situated at 103/B/3, 1846, Taluka Sanand, Vasna, Chancharvadi, Ahmedabad, Gujarat - 382213 with a constructed area admeasuring 37,982 sq. Ft.
Our factories are audited by our customers as per Business Social Compliance Initiative (BSCI) standard. It is a global social compliance framework and the BSCI audit is recognized by major European Supermarkets & retail chains. The products manufactured by us conform to stringent quality standards and we have been accredited with various quality certifications to conform product quality. We have comprehensive in-house capabilities of designing and manufacturing wide variety of bags. Our manufacturing activities involve fabric cutting, printing, sewing and stitching, packaging etc. for onward usage by our customers in the relevant industry. Along with in house manufacturing capabilities, we also outsource some of the manufacturing activities like stitching on jobwork as per the demand requirements. Over the years our company has obtained various certifications and registrations that facilitate our business and help us secure export orders in conformity with International standards like:
? Our Company is accorded the status of Three Star Export House by Directorate General of Foreign Trade for a period of five years effective from October 01, 2023 to March 31, 2028 in accordance with the provisions of the Foreign Trade Policy, 2023, ? Our Company has received the Authorised Economic Operator MSME Certificate T2 MSME certificate from the Indian Customs Authority, which acknowledges our commitment to securing the international supply chain and our adherence to the World Customs Organizations (WCO) Safe Framework of Standards. ? Our Company has obtained registration cum membership Certificate from Export Promotion Council for Handicrafts (EPCH) and Jute Products Development and Export Promotion Council (JPDEPC) and Federation of Indian Export Organisations (FIEO). ? Moreover, our Factory I has received various certifications like: It is audited and found to be in conformity with the Global Recycled Standard (GRS), Organic Content Standard (OCS) and Global Organic Textile Standard (GOTS) It is accredited with ISO 9001:2015 and ISO 14001:2015 for Manufacture and Export of Jute and Cotton Bags. It is granted the right to use the trademark under OEKO-TEX? STANDARD 100 certification where textiles are tested for harmful substances. It sets the benchmark for textile safety, from yarn to finished product. It is in compliance with the Fairtrade standards and FLOCERT certification requirements.
Our promoters Sudarshan Saraogi, Saurabh Saraogi and Shradha Saraogi and Gunjal Saraogi, have around 26 years, 22 years 12 years and 8 years of experience respectively, in the field of manufacturing of bags, and they have been instrumental in the growth of our business. We have received the below mentioned prestigious awards in the past that bear testimony to the faith our customers have in us and our ability to successfully serve and meet their requirements.
Key Performance 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) | 26928.70 | 27218.58 | 30366.06 |
| EBITDA(2) | 2999.05 | 3394.29 | 3056.98 |
| EBITDA Margin(3) | 11.14% | 12.47% | 10.07% |
| PAT | 1882.25 | 2258.90 | 1885.68 |
| PAT Margin(4) | 6.99% | 8.30% | 6.21% |
| Net Worth (5) | 8844.51 | 7170.03 | 4911.14 |
| Return on Net Worth (6) | 21.28% | 31.50% | 38.40% |
| RoCE (%)(7) | 21.14% | 26.45% | 29.97% |
*Not Annualized |
Notes:
(1)
Revenue from Operations means the Revenue from Operations as appearing in the Restated Financial Statements (2)EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses(3)
‘EBITDA Margin is calculated as EBITDA divided by Revenue from Operations(4)
‘PAT Margin is calculated as PAT for the period/year divided by revenue from operations.(5)
Net worth means the aggregate value of the paid-up share capital and reserves and surplus of the company. (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 equity plus total borrowings {current & non-current}.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 243 of this draft Red Herring Prospectus.
Factors Affecting our Results of Operations
1. General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies;
2. Inability to anticipate and respond to changes in the industry trends, particularly in fashion, and changing customer preferences in a timely and effective manner; 3. inability to obtain raw materials, finished products and packing material of the required quality and quantity, at competitive prices;
4. Failure to successfully upgrade our product portfolio, from time to time;
5. Any change in government policies resulting in increases in taxes payable by us;
6. Our ability to retain our key managements persons and other employees;
7. Changes in laws and regulations that apply to the industries in which we operate.
8. Our ability to grow our business;
9. Our ability to make interest and principal payments on our existing debt obligations and satisfy the other covenants contained in our existing debt agreements; 10. General economic, political and other risks that are out of our control;
11. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; 12. Companys ability to successfully implement its growth strategy and expansion plans; 13. Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate; 14. Inability to successfully obtain registrations in a timely manner or at all;
15. Occurrence of Environmental Problems & Uninsured Losses;
16. Conflicts of interest with affiliated companies, the promoter group and other related parties; 17. Any adverse outcome in the legal proceedings in which we are involved;
18. Concentration of ownership among our Promoter;
19. The performance of the financial markets in India and globally; 20. Global distress due to pandemic, war or by any other reason.
Discussion on Result of Operations
The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the financial years ended on March 31, 2025, 2024 and 2023.
| ( In Lakhs) | ||||||
| Particulars | March 31, 2025 | % of Total Income | March 31, 2024 | % of Total Income | March 31, 2023 | % of Total Income |
| Revenue From Operations | 26,928.70 | 98.62% | 27218.58 | 97.01% | 30366.06 | 97.74% |
| Other Income | 378.06 | 1.38% | 840.31 | 2.99% | 700.84 | 2.26% |
Total Revenue |
27,306.76 | 100.00% | 28058.89 | 100.00% | 31066.90 | 100.00% |
Expenditure |
||||||
| Cost of Material consumed | 14,546.49 | 53.27% | 15651.39 | 55.78% | 17032.03 | 54.82% |
| Purchase of Stock in Trade | 141.43 | 0.52% | 232.38 | 0.83% | 228.97 | 0.74% |
| Changes in inventories of finished goods and work-in-progress | (918.31) | (3.36)% | (342.70) | (1.22)% | 294.52 | 0.95% |
| Employee benefit expense | 819.83 | 3.00% | 697.68 | 2.49% | 628.87 | 2.02% |
| Financial costs | 247.74 | 0.91% | 200.34 | 0.71% | 254.86 | 0.82% |
| Depreciation and amortization expense | 285.51 | 1.05% | 312.98 | 1.12% | 312.69 | 1.01% |
| Other expenses | 9,669.25 | 35.41% | 8446.25 | 30.10% | 9859.12 | 31.74% |
Total Expenditure |
24,791.94 | 90.79% | 25198.32 | 89.81% | 28611.06 | 92.10% |
Profit/(Loss) Before Tax |
2,514.82 | 9.21% | 2860.57 | 10.19% | 2455.83 | 7.90% |
Tax Expense: |
||||||
| (a) Current tax expense for current year | 646.62 | 2.37% | 712.12 | 2.54% | 647.00 | 2.08% |
| (b) Deferred tax | (14.05) | (0.05)% | (34.00) | (0.12)% | (42.22) | (0.14)% |
| (c) Income Tax of Earlier Years | 0.00 | 0.00% | (0.18) | 0.00% | 73.66 | 0.24% |
Total Tax Expense |
632.57 | 2.32% | 677.94 | 2.42% | 678.44 | 2.18% |
Net Profit and loss as restated |
1,882.25 | 6.89% | 2182.63 | 7.78% | 1777.39 | 5.72% |
| Profit / (Loss) for the year of the Associates | 0.00 | 0.00% | 76.27 | 0.27% | 108.29 | 0.35% |
Profit/(Loss) for the period |
1,882.25 | 6.89% | 2258.90 | 8.05% | 1885.68 | 6.07% |
Revenue from operations:
Revenue from operations mainly consists of revenue from sale of finished product and stock in trade which is mainly cotton and jute shopping bags to various countries outside India.
Other Incomes
Other income primarily comprises of Interest Income, Franchisee Fee, Foreign Exchange Gain and Loss, Profit on sale of Property, Plant & Equipment, Speculative Gain / Loss-Share Trading-Intraday, Profit on sale of Investments etc.
Total Expenses:
Total expenses consist of operating cost like Cost of Material consumed, Purchases of stock in Trade, Change in inventories of finished goods and work in Progress, Employee benefits expense, Finance costs, Depreciation and amortization expenses and other expenses.
Cost of Material consumed:
Cost of Material consumed expenses primarily comprises of Purchase of Raw Material which are Fabric, Accessories, Packing and Printing material.
Cost of Purchases of stock in Trade:
Cost of Purchases of stock in Trade primarily comprises of Purchase of fabric and accessories.
Change in inventories of finished goods and work in progress:
Change in inventories of finished goods comprises of increase/ (decrease) in stock of finished goods and work in progress.
Employee benefits expense:
Employee benefits expense primarily comprises of Salaries, Wages and Bonus including Director remuneration, Staff welfare expenses, Contribution to PF & ESI and Gratuity Expenses.
Finance Costs:
Our Finance cost includes Interest expenses on Other Loan, Interest on Bank Loan and Bank charges including processing fees.
Depreciation and Amortization Expenses:
Depreciation includes depreciation on Building, Plant and Machinery, Furniture and Fixture, Vehicles, Office Equipments and Computers.
Other Expenses:
Other Expenses consists of Expenses like: Job Work Expenses, Carriage Inward, Rent, Freight, Power & Fuel Expenses, Loading & unloading Expenses, Insurance Charges, Packing and Forwarding Expenses, Selling & Distribution Expenses, Repair & Maintenance Expenses, Commission expenses, Travelling Expenses, Professional & Consultancy Expenses, Payment to Auditor, Rates & taxes, CSR Expenses, Miscellaneous Expenses etc.
FINANCIAL YEAR 2025 COMPARED TO FINANCIAL YEAR 2024
Total Income:
Total income for the financial year 2024-25 stood at Rs. 27,306.76 Lakhs on a standalone basis as compared to Rs. 28,058.89 Lakhs on a consolidated basis for the financial year 2023-24, representing a decrease of 2.68%. The decrease in Total Income was mainly attributable to a reduction in other income. Furthermore, a decline in other operating revenues, particularly from RoDTEP/RoSCTL licenses and sale of scrap, also contributed to the overall reduction in Total Income.
Revenue from Operations
During the Financial year 2024-25 the revenue from operation of our Company decreased to Rs. 26,928.70 Lakhs as against Rs. 27,218.58 Lakhs in the Financial Year 2023-24 representing a decrease of 1.07 %. The main reason of decrease was due to decrease in the sales of goods from Rs. 25,523.44 Lakhs in the Financial Year 2023-24 to Rs. 25,401.44 Lakhs in the financial year 2024-25 which was majorly due to decrease in sale of Stock in trade in financial year 2024-25. Additionally, a decline in other operating revenues, particularly from RoDTEP/RoSCTL licenses and sale of scrap, also contributed to the overall reduction in Revenue from operations.
Other Income:
During the financial year 2024-25 the other income of our Company decreases to Rs 378.06 Lakhs as against Rs. 840.31 lakhs in the Financial Year 2023-24 representing a decrease of 55.01 % which was due to decrease in income from (i) Foreign Exchange Gain and Loss of Rs. 256.51 lakhs in the financial year 2024-25 as compared to Rs. 368.90 lakhs in financial year 2023-24 which amount to decrease of 30.47%, (ii) Profit on sale of Property, Plant & Equipment Nil in the financial year 2024-25 as compared to Rs. 425.83 lakhs in financial year 2023-24 which amount to decrease of 100.00%, (iii) Reversal of bad & Doubtful Debt considered good Nil in the financial year 2024-25 as compared to Rs. 10.17 lakhs in financial year 2023-24 which amount to decrease of 100.00%, (iv) Speculative Gain / Loss-Share Trading-Intraday of Rs. 0.68 Lakhs in the financial year 2024-25 as compared to Rs. 2.53 lakhs in financial year 2023-24 which amount to decrease of 72.95%.
Total Expenses
The total expense for the financial year 2024-25 decreased to Rs. 24,791.94 Lakhs from Rs. 25,198.32 lakhs in the Financial Year 2023-24 representing a decrease of 1.61%. Such decrease was due to decrease in business operations of the Company.
Cost of Raw Material consumed
The Cost of material consumed for the financial year 2024-25 decreased to Rs. 14,546.49 lakhs from Rs. 15,651.39 lakhs in the Financial Year 2023-24 representing a decrease of 7.06%. Such decrease was due to increase in closing stock of Raw Material & Spare parts from Rs 1,966.63 lakhs in financial year 2023-24 to Rs 2,470.51 lakhs in financial year 2024-25 representing a decrease of 25.62 %.
Purchase of Stock in Trade
The Total Purchase of Stock in Trade for the financial year 2024-25 decreased to Rs. 141.43 lakhs from Rs. 232.38 lakhs in the Financial Year 2023-24 representing a decrease of 39.14%.
Change in inventories of finished goods, work-in-progress and Stock in trade
Our Change in inventories of finished goods comprises of increase/decrease in finished goods, work in progress and stock in trade. The closing inventories of finished goods increased for the financial year 2024-25 was Rs 712.59 lakhs as compared to Rs 307.19 lakhs in the Financial Year 2023-24 representing an increase of 131.97% while the closing inventories of work in progress increased for the financial year 2024-25 was Rs 1,499.93 lakhs as compared to Rs 987.11 lakhs in the Financial Year 2023-24 representing an increase of 51.95 %. This was primarily due to higher level of closing stock of work in progress at end of financial year 2024-25 as compared to financial year 2023-24. Also the closing inventories of stock in trade was Rs 0.09 lakhs for the financial year 2024-25 which was Nil in financial year 2023-24.
Employee benefits expense:
Our Company has incurred Rs. 819.83 Lakhs as Employee benefits expense during the financial year 2024-25 as compared to Rs.697.68 Lakhs in the financial year 2023-24. The increase of 17.51% was mainly due to increase in Salaries wages and Bonus of Rs. 765.19 lakhs in the financial year 2024-25 as compared to Rs. 660.77 lakhs in financial year 2023-24 which amount to increase of 15.80 %.
Finance Costs:
Our Company has incurred Rs. 247.74 Lakhs as finance cost during the financial year 2024-25 as compared to Rs. 200.34 Lakhs in the financial year 2023-24. The increase of 23.66 % was due to increase in interest to bank which was Rs 113.75 lakhs in financial year 2023-24 as compared to Rs 176.70 in financial year 2024-25 representing an increase of 55.34%.
Depreciation and Amortization Expenses:
Depreciation for the financial year 2024-25 stood at Rs. 285.51 Lakhs as against Rs. 312.98 Lakhs during the financial year 2023-24.
Other Expenses:
Our Company has incurred Rs. 9,669.25 Lakhs during the Financial Year 2024-25 on other expenses as against Rs.8,446.25 Lakhs during the financial year 2023-24. There was an increase of 14.48% mainly due to
(i) Increase in Sub-contracting /Job Work Expenses by 13.99% from Rs. 5,544.53 lakhs in financial year 2023-24 to Rs. 6,320.08 lakhs in financial year 2024-25, (ii) Increase in Freight Expenses by 364.08% from Rs. 133.19 lakhs in financial year 2023-24 to Rs. 618.10 Lakhs in financial year 2024-25,
(iii) Increase in Repair and Maintenance of Plant and machinery by 91.81% from Rs. 32.04 lakhs in financial year 2023-24 to Rs. 61.45 Lakhs in financial year 2024-25,
(iv) Increase in Discount allowed by 138.74 % from Rs. 27.20 lakhs in financial year 2023-24 to Rs. 64.94 Lakhs in financial year 2024-25,
(v) Increase in Carriage Outward Expenses by 756.63 % from Rs. 0.36 lakhs in financial year 2023-24 to Rs. 3.07 Lakhs in financial year 2024-25,
(vi) Increase in Payment to auditors for other audit fees & certification fees Expenses by 509.09% from Rs. 0.66 lakhs in financial year 2023-24 to Rs. 4.02 Lakhs in financial year 2024-25
(vii) Increase in filling fees Expenses by 86,716.53% from Rs. 0.02 lakhs in financial year 2023-24 to Rs. 16.50 Lakhs in financial year 2024-25
(viii) Increase in Payment to auditors for other audit fees & certification fees Expenses by 509.09% from Rs. 0.66 lakhs in financial year 2023-24 to Rs. 4.02 Lakhs in financial year 2024-25
(ix) Increase in CSR Expenses by 54.53% from Rs. 25.20 lakhs in financial year 2023-24 to Rs. 38.94 Lakhs in financial year 2024-25
(x) Increase in Miscellaneous Expenses by 36.23% from Rs. 58.83 lakhs in financial year 2023-24 to Rs. 80.14 Lakhs in financial year 2024-25 etc.
Restated Profit before tax:
Net profit before tax for the financial year 2024-25 decreased to Rs. 2,514.82 Lakhs as compared to Rs 2,860.57 Lakhs in the financial year 2023-24. The decrease of 12.09 % was majorly due to factors as mentioned above.
Restated profit after tax:
Our profit after tax for the year decreased by 16.67 % from profit of Rs, 2,258.90 lakhs in financial year 2023-24 to profit Rs. 1,882.25 lakhs in financial year 2024-25. Consequently, our PAT Margin decreased to 6.99 % in financial year 2024-25 from 8.30 % in financial year 2023-24. There has been a decrease in PAT Margin in FY 24-25 as compared to FY 23-24 due to factors like:
Other Income for the financial year 2024-25 decreased to 1.38% of Total Income as compared to 2.99% of total income in the Financial Year 2023-24 a decrease to 1.61% in PAT margin. Other income of the company decreased due to decrease in Foreign Exchange Gain and Loss from Rs. 368.90 lakhs in financial year 2023-24 to Rs. 256.51 lakhs in financial year 2024-25 and decrease in Profit on sale of Property, Plant & Equipment from Rs. 425.83 lakhs in financial year 2023-24 to Rs. Nil in financial year 2024-25.
Financial costs for the financial year 2024-25 Increased to 0.91% of Total Income as compared to 0.71% of total income in the Financial Year 2023-24 an increase to 0.20% in PAT margin. This increment in finance cost was due to additional use of CC loan.
Other Expenses for the financial year 2024-25 increased to 35.41% of Total Income as compared to 30.10% of total income in the Financial Year 2023-24 an increase to 5.31% in PAT margin. Such increase was majorly due to increase in subcontracting/job work expenses, Repair and maintenance expenses of Plant and machinery, Discount allowed, Carriage outward and commission expenses etc.
FINANCIAL YEAR 2024 COMPARED TO FINANCIAL YEAR 2023
Total Income:
Total income for the financial year 2023-24 stood at Rs 28,058.89 Lakhs whereas in Financial Year 2022-23 the same stood at Rs. 31,066.90 Lakhs representing a decrease of 9.68 %. The Total income decreased due to reduction in job work operations which led to decrease in sale of finished products. Further there was reduction in other operating revenues majorly, freight and handling charges which further led to decrease in Total Income.
Revenue from Operations
During the Financial year 2023-24 the revenue from operation of our Company decreased to Rs. 27,218.58 Lakhs as against Rs. 30,366.06 Lakhs in the Financial Year 2022-23 representing a decrease of 10.37 %. The main reason of decrease was due to decrease in the sales of goods from 28,202.40 Lakhs in the Financial Year 2022-23 to Rs. 25,523.44 Lakhs in the financial year 2023-24. The company witnessed major reduction in sales of bags made from conventional cotton. This reduction was due to reduction in market demand for cotton bags made out of Conventional cotton.
Other Income:
During the financial year 2023-24 the other income of our Company increased to Rs 840.31 Lakhs as against Rs. 700.84 lakhs in the Financial Year 2022-23 representing an increase of 19.90 % which was due to increase in income from (i) Interest Income of Rs. 26.40 lakhs in the financial year 2023-24 as compared to Rs. 4.20 lakhs in financial year 2022-23 which amount to increase of 528.15%, (ii) Profit on sale of Property, Plant & Equipment of Rs. 425.83 Lakhs which was done in year 2023-24, (iii) Profit on sale of Investments of Rs. 6.39 Lakhs which was done in year 2023-24, (iv) Speculative Gain / Loss-Share Trading-Intraday of Rs. 2.53 Lakhs in year 2023-24 which was not there in year 2022-23, (v) Reversal of bad & Doubtful Debt considered good of Rs. 10.17 lakhs were recorded in year 2023-24 only.
Total Expenses
The total expense for the financial year 2023-24 decreased to Rs. 25,198.32 Lakhs from Rs. 28,611.06 lakhs in the Financial Year 2022-23 representing a decrease of 11.93 %. Such decrease was due to decrease in business operations of the Company.
Cost of Raw Material consumed
The Cost of material consumed for the financial year 2023-24 decreased to Rs. 15,651.39 lakhs from Rs. 17,032.03 lakhs in the Financial Year 2022-23 representing a decrease of 8.11%. Such decrease was due to increase in purchase of Raw Material & Spare parts from Rs 16,975.07 lakhs in financial year 2022-23 to Rs 15,727.64 lakhs in financial year 2023-24 representing a decrease of 7.35 %.
Purchase of Stock in Trade
The Total Purchase of Stock in Trade for the financial year 2023-24 increased to Rs. 232.38 lakhs from Rs. 228.97 lakhs in the Financial Year 2022-23 representing an increase of 1.49%.
Change in inventories of finished goods
Our Change in inventories of finished goods comprises of increase/decrease in finished goods and work in progress. The closing inventories of finished goods for the financial year 2023-24 was Rs 307.19 lakhs as compared to Rs 345.81 lakhs in the Financial Year 2022-23 representing a decrease of 11.17 % while the closing inventories of work in progress for the financial year 2023-24 was Rs 987.11 lakhs as compared to Rs 605.79 lakhs in the Financial Year 2022-23 representing an increase of 62.95 %. This was primarily due to higher level of closing stock of work in progress at end of financial year 2023-24 as compared to financial year 2022-23.
Employee benefits expense:
Our Company has incurred Rs. 697.68 Lakhs as Employee benefits expense during the financial year 2023-24 as compared to Rs. 628.87 Lakhs in the financial year 2022-23. The increase of 10.94% was due to increase in Salaries wages and Bonus of Rs. 660.77 lakhs in the financial year 2023-24 as compared to Rs. 587.90 lakhs in financial year 2022-23 which amount to increase of 12.40 %.
Finance Costs:
Our Company has incurred Rs. 200.34 Lakhs as finance cost during the financial year 2023-24 as compared to Rs. 254.86 Lakhs in the financial year 2022-23. The decrease of 21.39 % was due to decrease in interest on loans and Bank Charges.
Depreciation and Amortization Expenses:
Depreciation for the financial year 2023-24 stood at Rs. 312.98 Lakhs as against Rs. 312.69 Lakhs during the financial year 2022-23. The increase in depreciation was around 0.09% which was due to addition in Vehicles, Computers, Capital WIP and Office Equipments.
Other Expenses:
Our Company has incurred Rs. 8,446.25 Lakhs during the Financial Year 2023-24 on other expenses as against Rs. 9,859.12 Lakhs during the financial year 2022-23. There was a decrease of 14.33% mainly due to
(i) Decrease in Job work expenses by 8.96% from Rs. 6,088.80 lakhs in financial year 2022-23 to Rs. 5,543.44 lakhs in financial year 2023-24,
(ii) Decrease in Freight Exp by 82.99% from Rs. 782.86 lakhs in financial year 2022-23 to Rs. 133.19 Lakhs in financial year 2023-24,
(iii) Decrease in Repair and Maintenance by 71.74% from Rs. 344.94 lakhs in financial year 2022-23 to Rs. 97.49 Lakhs in financial year 2023-24,
(iv) Decrease in Rates and Taxes by 88.24 % from Rs. 66.67 lakhs in financial year 2022-23 to Rs. 7.84 Lakhs in financial year 2023-24,
(v) Decrease in Professional & Consultancy Expenses by 7.29 % from Rs. 222.92 lakhs in financial year 2022-23 to Rs. 206.67 Lakhs in financial year 2023-24,
(vi) Decrease in Miscellaneous Expenses by 23.71% from Rs. 77.12 lakhs in financial year 2022-23 to Rs. 58.83 Lakhs in financial year 2023-24 etc.
Restated Profit before tax:
Net profit before tax for the financial year 2023-24 increased to Rs. 2,860.57 Lakhs as compared to Rs 2,455.83 Lakhs in the financial year 2022-23. The increase of 16.48 % was majorly due to factors as mentioned above.
Restated profit after tax:
Our profit after tax for the year increased by 19.79 % from profit of Rs, 1,885.68 lakhs in financial year 2022-23 to net profit Rs. 2,258.90 lakhs in financial year 2023-24. Consequently, our PAT Margin increased to 8,30 % in financial year 2023-24 from 6.21 % in financial year 2022-23. There has been an increase in PAT Margin in FY 23-24 as compared to FY 22-23 due to factors like:
Other Income for the financial year 2023-24 increased to 2.99% of Total Income as compared to 2.26% of total income in the Financial Year 2022-23 - adding to 0.73% in PAT margin. Other income of the company increased due to Profit on sale of Property, Plant & Equipment for Rs. 425.83 lakhs derived majorly from sale of land.
1. Financial costs for the financial year 2023-24 decreased to 0.71% of Total Income as compared to 0.82% of total income in the Financial Year 2022-23- adding to 0.1 1% in PAT margin. This reduction in finance cost was due to changes in the interest rate for Bank loan from SBI. 2. Other Expenses for the financial year 2023-24 decreased to 30. 10% of Total Income as compared to 31.74% of total income in the Financial Year 2022-23 - adding to 1.64% in PAT margin. Such decrease was majorly due to decrease in subcontracting/job work expenses, Repair and maintenance expenses, Bad debts written off and Provision for bad & Doubtful Debt etc.
FINANCIAL YEAR 2023 COMPARED TO FINANCIAL YEAR 2022
Total Income:
Total income for the financial year 2022-23 stood at Rs 31,066.90 Lakhs whereas in Financial Year 2021-22 the same stood at Rs. 20,041.71 Lakhs representing an increase of 55.01 %. The main reason of increase was increase in the volume of business operations of the company. Pursuant to optimum utilization of Factory II and increase in job work operations, the company increase its volume of business leading to increase in revenue from operations. Further there was in increase in other income on account of increase in from Foreign Exchange gain and loss and Reversal of GST which further increased the Total income of the company for FY 22-23.
Revenue from Operations
During the financial year 2022-23 the net revenue from operation of our Company increased to Rs. 30,366.06 Lakhs as against Rs. 19,844.90 Lakhs in the Financial Year 2021-22 representing an increase of 53.02%. The main reason of increase was due to increase in the sales of finished goods by 61.21% from 17,324.57 Lakhs in the Financial Year 2021-22 as compared to Rs. 27,928.64 Lakhs in the financial year 2022-23. The increase in revenue was mainly due to increased operations in Factory II which started during FY 21-22 and was operating under optimum capacity in FY 22-23. Further the company expanded its job work operations in FY 22-23 compared to FY 21-22 due to surge in orders. Thus, increased orders was fulfilled with increased capacity and job work operations leading to increase in revenue from operations.
Other Income:
During the financial year 2022-23 the other income of our Company increased to Rs 700.84 Lakhs as against Rs. 196.81 lakhs in the Financial Year 2021-22 representing an increase of 256.11% which was due to increase in income from
(i) Foreign Exchange gain and loss of Rs. 626.23 lakhs in the financial year 2022-23 as compared to Rs. 162.85 lakhs in financial year 2021-22 which amount to increase of 284.54% as we are almost 100% export entity so increased revenue led to increased foreign exchange gain
(ii) Reversal of GST of Rs.70.41 lakhs in the financial year 2022-23.
Total Expenses
The total expense for the financial year 2022-23 increased to Rs. 28,611.06 Lakhs from Rs. 19,502.78 lakhs in the Financial Year 2021-22 representing an increase of 46.70 %. Such increase was due to increase in business operations of the Company.
Cost of Raw Material consumed
The Cost of material consumed for the financial year 2022-23 increased to Rs. 17,032.03 lakhs from Rs. 11,503.13 lakhs in the Financial Year 2021-22 representing an increase of 48.06%. Such increase was due to increase in purchase of Raw Material & accessories from Rs 12,473.98 lakhs in financial year 2021-2022 to Rs 16,975.07 lakhs in financial year 2022-2023 representing an increase of 36.08%.
Purchase of Stock in Trade
The Total Purchase of Stock in Trade for the financial year 2022-23 decreased to Rs. 228.97 lakhs from Rs. 322.33 lakhs in the Financial Year 2021-22 representing a decrease of 28.96%.
Change in inventories of finished goods
Our Change in inventories of finished goods comprises of increase/decrease in finished goods and work in progress. The closing inventories of finished goods for the financial year 2022-23 was Rs 345.81 lakhs as compared to Rs 580.96 lakhs in the Financial Year 2021-22 representing a decrease of 40.48%. The closing inventories of work in progress for the financial year 2022-23 was Rs 605.79 lakhs as compared to Rs. 665.16 lakhs in the Financial Year 2021-22 representing a decrease of 8.93%. This was primarily due to lower level of closing stock at end of financial year 2022-23 compared to financial year 2021-22.
Employee benefits expense:
Our Company has incurred Rs. 628.87 Lakhs as Employee benefits expense during the financial year 2022-23 as compared to Rs. 507.73 Lakhs in the financial year 2021-22. The increase of 23.86% was mainly due to increase in Salaries, Wages and Bonus to Rs. 587.90 lakhs in the financial year 2022-23 as compared to Rs. 476.00 lakhs in financial year 2021-22 which amount to increase of 23.51 %.
Finance Costs:
Our Company has incurred Rs. 254.86 Lakhs as finance cost during the financial year 2022-23 as compared to Rs. 194.30 Lakhs in the financial year 2021-22. The increase of 31.17 % was due to increase in Interest to bank and Bank Charges.
Depreciation and Amortization Expenses:
Depreciation for the financial year 2022-23 stood at Rs. 312.69 Lakhs as against Rs. 323.08 Lakhs during the financial year 2021-22. The decrease in depreciation was around 3.22% which was due to sale of Building and Plant & Machinery.
Other Expenses:
Our Company has incurred Rs. 9,859.12 Lakhs during the Financial Year 2022-23 on other expenses as against Rs. 7,230.80 Lakhs during the financial year 2021-22. There was an increase of 36.35% mainly due to
(i) Increase in Job work expenses by 38.57% from Rs. 4,393.91 lakhs in financial year 2021-22 to Rs. 6,088.80 lakhs in financial year 2022-23,
(ii) Increase in Carriage inward by 15.11% from Rs. 371.94 lakhs in financial year 2021-22 to Rs. 428.14 Lakhs in financial year 2022-23,
(iii) Increase in Repair and Maintenance by 210.26% from Rs. 111.18 lakhs in financial year 2021-22 to Rs. 344.94 Lakhs in financial year 2022-23,
(iv) Increase in Rates and Taxes by 1108.57 % from Rs. 5.52 lakhs in financial year 2021-22 to Rs. 66.67 Lakhs in financial year 2022-23,
(v) Increase in Travelling Expenses by 535.36 % from Rs. 20.87 lakhs in financial year 2021-22 to Rs. 132.57 Lakhs in financial year 2022-23,
(vi) Bad Debt written off which came in financial year 2022-23 of Rs. 52.44 Lakhs,
(vii) Increase in Packing and Forwarding Expenses by 32.42 % from Rs. 332.30 lakhs in financial year 2021-22 to Rs. 440.03 Lakhs in financial year 2022-23,
(viii) Increase in Power & Fuel Expenses by 50.09 % from Rs. 177.51 lakhs in financial year 2021-22 to Rs. 266.41 Lakhs in financial year 2022-23,
(ix) Increase in Rent Expenses by 153.84 % from Rs. 272.05 lakhs in financial year 2021-22 to Rs. 690.57 Lakhs in financial year 2022-23 etc.
Restated Profit before tax:
Net profit before tax for the financial year 2022-23 increased to Rs. 2455.83 Lakhs as compared to Rs 538.92 Lakhs in the financial year 2021-22. The increase of 355.69% was majorly due to factors as mentioned above.
Restated profit after tax:
Our profit after tax for the year increased by 391.15% from profit of Rs. 383.94 lakhs in financial year 2021-22 to net profit Rs. 1885.68 lakhs in financial year 2022-23. Consequently, our PAT Margin expanded to 6.21 % in financial year 2022-23 from 1.93% in financial year 2021-22.
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
The impact of COVID 19 pandemic which occurred in past affected the supply chain in our business operations and accordingly, the financial position of the company. Any unusual or infrequent events like: COVID 19, if occurred in future may affect the future operations and performance of the 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 35 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 "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 35, 130130 and 241 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 company operates in a single product segment.
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 is not subject to seasonality. For further information, see "Industry Overview" and "Our Business" on pages 112 and 130 respectively.
8. Dependence on single or few customers
During the year ended FY 2024-25, FY 23-24 and FY 22-23 our top 10 customers contributed to 57.80%, 67.50% and 63.69% of our revenue from operations. For further information, see "Risk Factors" on page 35 of this Draft Red Herring Prospectus.
9. Competitive conditions
Competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" beginning on pages 112 and 130 respectively of this Draft Red Herring Prospectus.
10. Details of material developments after the date of last balance sheet i.e. March 31, 2025
After the date of last Balance sheet i.e. March 31, 2025, the following material events have occurred after the last audited period
1. A resolution in the meeting of Board of Directors dated June 28, 2025 was passed for authorizing the Board of Directors to raise funds by making an Initial Public Offering.
2. A special resolution in the Extra-ordinary General meeting dated July 21, 2025 was passed for authorizing the Board of Directors to raise funds by making an Initial Public Offering.
3. The Company has approved the Restated Financial Statements for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023 in the Board meeting dated June 28, 2025.
4. The Company has approved the Draft Red Herring Prospectus vide resolution in the Board Meeting dated August 08, 2025.
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