The following discussion is intended to convey the managements perspective on our financial condition and results of operations for Fiscals 2025, 2024, and, 2023 and should be read in conjunction with “Restated Financial Information” on page 253.
This Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Red Herring Prospectus. For further information, see “Forward-Looking Statements” on page 18. Also see “Risk Factors” and “ Significant Factors Affecting our Results of Operations and Financial Condition” on pages 31 and 311, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.
Our Companys Fiscal commences on April 1 and ends on March 31 of the immediately subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information for Fiscals 2025, 2024 and 2023 included herein is derived from the Restated Financial Information, included in this Red Herring Prospectus. For further information, see “Restated Financial Information” on page 253. In this section, we have compared our financial information as of and years ended March 31, 2025, March 31, 2024 and March 31, 2023.
Further, names of certain customers have not been included in this Red Herring Prospectus either because relevant consents for disclosure of their names were not available or in order to preserve confidentiality.
Unless otherwise indicated, industry and market data used in this section has been derived from the industry report titled “Global Market Overview of the Industrial Gases” dated June 3, 2025 (the “F&S Report”) prepared and issued by F&S, appointed by us pursuant to an engagement letter dated May 20, 2024 and exclusively commissioned and paid for by us to enable the investors to understand the industry in which we operate in connection with the Offer. The data included herein includes excerpts from the F&S Report and may have been re-ordered by us for the purposes of presentation. Unless otherwise indicated, financial, operational, industry and other related information derived from the F&S Report and included herein with respect to any particular calendar year/ Fiscal refers to such information for the relevant calendar year/ Fiscal. A copy of the F&S Report is available on the website of our Company at www.ellenbarrie.com/investors. For further information, see “Risk Factors Industry information included in this Red Herring Prospectus has been derived from an industry report prepared by F&S exclusively commissioned and paid for by us for such purpose.” on page 51. Also see, “Certain Conventions, Presentation of Financial, Industry and Market Data - Industry and Market Data” on page 16.
OVERVIEW
For details regarding the overview of the Company, see “Our Business Overview” on page 182.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Our relationships with our key customers
Our results of operations significantly depend on our relationships with customers. We classify our customers as (i) bulk customers, to whom we supply liquified gases through cryogenic tankers, (ii) package customers, to whom we supply compressed gases in cylinders, and (iii) onsite customers (including customers to whom we offer our operations and maintenance services). In connection with the sale of gases, we have established long-standing relationships with customers across industries and as of March 31, 2025, our top five and 10 customers have been associated with us for an average of 8.4 years and 7.7 years, respectively.
The table below sets forth certain information relating to contribution by our top, top five and top 10 customers in terms of sale of gases to our revenue from operations in the years indicated:
Customer concentration within sale of gases |
Amount ( million) | 2025 Percentage of Revenue from Sale of gases, related products and services (%) | Amount ( million) | Fiscal 2024 Percentage of Revenue from Sale of gases, related products and services (%) | Amount ( million) | 2023 Percentage of Revenue from Sale of gases, related products and services (%) |
| Top 1 | 273.23 | 9.34% | 245.24 | 10.84% | 158.07 | 8.35% |
| Top 5 | 1,001.73 | 34.25% | 668.85 | 29.57% | 497.06 | 26.26% |
| Top 10 | 1,377.26 | 47.09% | 926.27 | 40.95% | 710.90 | 37.56% |
Further, four of our nine manufacturing facilities are located at the sites of our customers and the products manufactured at these onsite facilities are supplied exclusively to the respective customers at prices stipulated within the contracts. Although we have longstanding relationships with our key customers, any adverse developments in such relationships could adversely affect our business and results of operations.
Demand for industrial gases in India
We manufacture a wide variety of industrial gases, including oxygen, nitrogen, argon, helium, hydrogen, carbon dioxide, nitrous oxide and acetylene. We primarily supply our gases for industrial use in industries such as steel, pharmaceuticals and chemicals, healthcare, engineering and infrastructure, railway, aviation, aerospace and space, petrochemicals (including oil and gas), defence and others (including power and energy, metal production, animal husbandry and electronics). Consequently, the demand for our products is dependent on macroeconomic conditions in India and directly affected by factors affecting these industries. While our business tends to benefit from increased consumer confidence in the overall economy, adverse macroeconomic conditions and other factors affecting these end use industries may affect the demand for our products and otherwise adversely affect our results of operations.
Manufacturing capacity and capacity utilization
We seek to maintain optimum levels of capacity utilization and an appropriate standard of quality at our manufacturing facilities in order to sustain the growth of our operations. Attaining and maintaining this level of utilization and quality requires considerable expense and planning. Our capacity utilization is affected by market conditions as well as by the product requirements of, and procurement practice followed by our customers. In the event that we are unable to optimize our production process and use of equipment, we may not be able to achieve optimum levels of capacity utilization at our manufacturing facilities, resulting in operational inefficiencies and our financial condition and results of operations may be adversely affected. For details of the volume of products that we manufactured and our capacity utilization during Fiscals 2025, 2024 and 2023, see “Our Business Capacity and Capacity Utilization” on page 201.
Our results of operations are also affected by our product mix. In general, a higher percentage of sale of gases such as argon will have a positive impact on our revenues as such products tend to have higher prices and profit margins than other products.
Our expansion plans
We operate nine facilities across East, South and Central India, as of March 31, 2025. We also have one facility under construction a new plant being set up in Uluberia, West Bengal. This plant in Uluberia, West Bengal is to be commissioned in October 2025 with a capacity of 220 TPD for merchant use. We have recently undertaken an expansion of 170 TPD at our existing capacity at the site of one of our customers, a major steel manufacturing company in India, in Kharagpur, West Bengal, with effect from January 23, 2025. Further, we propose to undertake additional capacity expansion through a liquid ASU and cylinder filing station to be commissioned in North India in December 2025, with a capacity of 220 TPD, and an additional plant to be commissioned in West Bengal in October 2025, with a capacity of 250 TPD. Through our additional facilities, particularly in North India, we increase our access to customers and establish our presence as a national player in industrial gases.
We expect that our expansion plans will allow us to meet the anticipated increase in demand for industrial gases in the future, enable us to supply growing markets more efficiently and drive growth. However, in the event that there is an oversupply of industrial gases in the markets in which we operate, we may be required to reduce production volumes and may not be able to realize the benefits of expanding our manufacturing capacities.
Our expansion plans will result in an increase in our capital expenditure (pertaining to payments made for purchases of property, plant and equipment, including capital work in progress) which was 692.21 million, 870.04 million and 949.44 million in Fiscals 2025, 2024 and 2023, respectively. The actual amount and timing of our future capital requirements may differ from estimates as a result of, among other things, unforeseen delays or cost overruns in developing our facilities, changes in business plans due to prevailing economic conditions, unanticipated expenses and regulatory changes. To the extent our planned expenditure requirements exceed our available resources, we will be required to seek additional debt or equity financing. Additional debt financing could increase our interest costs and require us to comply with additional restrictive covenants in our financing agreements.
Power and transportation costs
Our manufacturing operations require adequate supply of electricity and we source most of our electricity requirements from local power authorities and we also purchase power from power exchanges from time to time. Our power expenses constitutes the largest component of our cost structure and set forth below are our power expenses in the corresponding years:
Particulars |
Fiscal | |||||
| Amount ( million) | 2025 Percentage of Revenue from Operations (%) | Amount ( million) | 2024 Percentage of Revenue from Operations (%) | Amount ( million) | 2023 Percentage of Revenue from Operations (%) | |
| Power expenses | 749.15 | 23.97% | 776.62 | 28.82% | 739.73 | 36.07% |
Owing to the energy-intensive nature of our manufacturing operations, any fluctuation in energy prices could impact our results of operations. Any shortage or non-availability of power could result in temporary shutdown of a part, or all, of our operations at the facility experiencing such shortage. Such shutdowns could, particularly if they are for prolonged periods, have an adverse effect our business, results of operations and financial condition. Any failure on our part to obtain alternate sources of power, fuel, or water, in a timely manner, and at an acceptable cost, may cause a slowdown or interruption to our production process.
Further, we transport our products using cryogenic tankers, cylinders, and pipelines. We own the tankers and cylinders, and the trucks on which tankers are placed for distribution are owned and operated by third party logistics companies, with whom we have entered into agreements. The third parties are the owners of the transportation vehicles, and are responsible for compliance with applicable law, including those relating to the use of motor vehicles on public roads, the carriage of goods and the transportation of inflammable and explosive gases. We may also be affected by an increase in fuel costs, as it will have a corresponding impact on freight charges levied by our third party transportation providers. Set forth below are our transportation charges in the corresponding years:
Particulars |
Fiscal | |||||
| 2025 | 2024 | 2023 | ||||
| Amount ( million) | Percentage of Revenue from Operations (%) | Amount ( million) | Percentage of Revenue from Operations (%) | Amount ( million) | Percentage of Revenue from Operations (%) | |
| Transportation | ||||||
| 303.59 | 9.72% | 280.25 | 10.40% | 264.43 | 12.89% | |
| charges |
As such, timely, safe and cost-efficient transportation of our products to our customers is expedient for our business and operations.
MATERIAL ACCOUNTING POLICIES
Our material accounting policies are set forth below.
Classification between current and non-current
We present our assets and liabilities in the Restated Statement of Assets and Liabilities based on current/ non-current classification. An asset is treated as current when it is:
a) Expected to be realised or intended to be sold or consumed in normal operating cycle b) Held primarily for the purpose of trading c) Expected to be realised within twelve months after the reporting period, or d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current. A liability is current when:
a) It is expected to be settled in normal operating cycle b) It is held primarily for the purpose of trading c) It is due to be settled within twelve months after the reporting period, or d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
We classify all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. We have identified twelve months as our operating cycle.
Use of estimates
The preparation of Restated Financial Information in conformity with Ind AS requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities as at the Restated Statement of Assets and Liabilities date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Restated Statement of Assets and Liabilities date. The estimates and assumptions used in the Restated Financial Information are based upon our managements evaluation of the relevant facts and circumstances as at the date of the Restated Financial Information. Actual results could differ from these estimates.
Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized in the year in which the estimates are revised and in any future years affected.
These Restated Financial Information have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in the Restated Financial Information.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Freehold land is carried at historical cost. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to us and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to Restated Statement of Profit and Loss (including other comprehensive income) during the year in which they are incurred.
Advances paid towards the acquisition of property, plant and equipment outstanding at each Restated Statement of Assets and Liabilities date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress.
Depreciation methods, estimated useful lives
We depreciate property, plant and equipment over their estimated useful lives using the straight line method. The estimated useful lives of assets are as follows:
Property, plant and equipment |
Useful Life |
| Buildings | 5 to 30 years |
| Computers | 6 years |
| Electrical Installations | 10 years |
| Furniture and Fixtures | 10 years |
| Vehicles | 8 to 10 years |
| Office Equipment | 5 years |
| Plant and Machinery (including Cryogenic Vessels) | 25 years |
| Plant and Machinery on Operating Lease (including Cryogenic Vessels) | Lower of 25 years or Contract period |
Note: Leasehold improvements are amortized over the lease period, which corresponds with the useful lives of the assets. The residual values are not more than 5% of the original cost of the asset.
Depreciation on addition to property, plant and equipment is provided on pro-rata basis from the date of acquisition. Depreciation on sale/deduction from property, plant and equipment is provided up to the date preceding the date of sale, deduction as the case may be. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in Restated Statement of Profit and Loss (including other comprehensive income) under Other Income.
Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted prospectively, as appropriate.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de-recognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Restated Statement of Profit and Loss (including other comprehensive income) when the item is derecognized.
Other Intangible Assets
Software costs are included in the Restated Statement of Assets and Liabilities as other intangible assets when it is probable that associated future economic benefits would flow to us. In this case they are measured initially at purchase cost and then amortised on a straight-line basis over their estimated useful lives.
Intangible assets |
Useful life |
| Computer software | 3 years |
Intangible assets with finite lives are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end. "Intangible assets with indefinite useful lives are not amortised. Such intangible assets are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Restated Statement of Profit and Loss (including other comprehensive income). when the asset is derecognised."
Trade and other payables
These amounts represent liabilities for goods and services provided to us prior to the end of the financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.
Foreign currency transactions
Functional and presentation currency
Items included in the Restated Financial Information are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency). The Restated Financial Information are presented in Indian rupee (“INR”), which is our functional and presentation currency.
Transactions and balances
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains/Losses arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Restated Statement of Profit and Loss (including other comprehensive income).
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date and the exchange differences are recognised in the Restated Statement of Profit and Loss (including other comprehensive income).
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
Fair value measurement
We measure financial instruments, such as, derivatives at fair value at each Restated Statement of Assets and Liabilities date.
"Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
a) In the principal market for the asset or liability, or b) In the absence of a principal market, in the most advantageous market for the asset or liability accessible to us.
The principal or the most advantageous market must be accessible to us. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
We use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Our management determines the policies and procedures for fair value measurement such as derivative instrument.
All assets and liabilities for which fair value is measured or disclosed in the Restated Financial Information are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
a) Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities b) Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. c) Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
Revenue from contracts with customers
Sale of goods
We recognise revenue from contracts with customers when it satisfies a performance obligation by transferring control of promised good to a customer. Performance obligation in respect of sale of product is satisfied at a point in time which usually occurs upon receipt of goods by the customer. At that point, the customer has full discretion over the channel and price to sell the products, and there are no unfulfilled obligations that could affect the customers acceptance of the product. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied."
Variable consideration:
We recognize revenue from the sale of goods measured at the transaction price of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. If the consideration in a contract includes a variable amount, we estimate the amount of consideration to which we will be entitled in exchange for transferring the goods to the customer.
The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved." Goods are often sold with volume and price discounts based on aggregate sales over a 12 months period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume and price discounts. Accumulated experience is used to estimate and provide for the discounts, using the most likely method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. A liability is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are generally made with a credit term of 30-90 days, which is consistent with market practice. Any obligation to provide a refund is recognised as a provision. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
Sales Return:
We account for sales returns accrual by recording an allowance for sales returns concurrent with the recognition of revenue at the time of a product sale."
Sale of Services
In respect of sale of services, performance obligation is satisfied over time when the entity renders services to customers. Revenue from services rendered is recognised as the services are rendered and is booked based on agreement / arrangements with the concerned parties.
Revenue from construction contracts
Revenue from construction/project related activity is recognised as follows:
We generally have fixed price contracts in respect of which contract revenue is recognised over time to the extent of performance obligation satisfied and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents the cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs.
When Contract revenue recognized till date exceed progress billing, the excess is shown as unbilled revenue. For contracts where progress billings exceed the contract revenue till date, the excess is shown as contract liability. Amounts received before the related work is performed are included as a liability as advance from customer.
Payment terms agreed with a customer are as per business practice and there is no financing component involved in the transaction price."
Other Operating Revenue
Interest Income
For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (“EIR”). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, we estimate the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in other income in the Restated Statement of Profit and Loss (including other comprehensive income)."
Dividend Income
Dividend income is recorded when the right to receive payment is established.
Export Benefit
Revenue from export benefits arising from Duty entitlement pass book (DEPB scheme), duty drawback scheme, merchandise export incentive scheme are recognised on export of goods in accordance with their respective underlying scheme at fair value of consideration received or receivable."
Contract Balances
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If we perform by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. The receivables represent our right to an amount of consideration that is unconditional.
Contract liability
A contract liability is the obligation to transfer goods or services to a customer for which we have received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before we transfer goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when we perform under the contract.
Trade Receivable
A trade receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
Government grants
The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with and the grants will be received. Grants related to assets are treated as deferred income and are recognized as other operating income in the Statement of Profit & Loss on a systematic and rational basis over the useful life of the asset. Grants related to income are recognized on a systematic basis over the periods necessary to match them with the related costs which they are intended to compensate and are deducted from the expense in the Statement of Profit & Loss.
Additionally, the manner in which a grant is received does not affect the accounting method to be adopted in this regard. Thus a grant is accounted for in the same manner whether it is received in cash or as a reduction of a liability to the government. Consequently, the deferrals of basic custom duty and goods and service tax pursuant to the Manufacturing and Other Operations in Warehouse Scheme (MOOWR Scheme) in accordance with the Customs Act of 1962 has been considered as an interest free loan from Government. Accordingly, this has been recognised and measured in accordance with Ind AS 109, Financial Instruments.
Taxes
Tax expense for the year, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the year.
Current income tax
Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the year/period end date. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax
Deferred income tax is provided in full, using the Restated Statement of Assets and Liabilities approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in Restated Financial Information. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the year and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognized in Restated Statement of Profit and Loss (including other comprehensive income), except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Leases
Our role as a lessee
Our lease asset classes primarily consist of leases for long-term period. We assess whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, we assess whether: (i) the contract involves the use of an identified asset (ii) we have substantially all of the economic benefits from use of the asset through the period of the lease and (iii) we have the right to direct the use of the asset.
At the date of commencement of the lease, we recognize a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, we recognize the lease payments as an operating expense on a straight-line basis over the term of the lease.
Lease liabilities include the net present value of the following lease payments:
a) fixed payments (including in-substance fixed payments), less any lease incentives receivable b) variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date amounts expected to be payable by the group under residual value guarantees c) the exercise price of a purchase option if the group is reasonably certain to exercise that option, and d) payments of penalties for terminating the lease, if the lease term reflects the group exercising that option."
Right-of-use assets are measured at cost comprising the following:
a) the amount of the initial measurement of lease liability b) any lease payments made at or before the commencement date less any lease incentives received c) any initial direct costs d) restoration costs.
Right-of-use assets are generally depreciated over the shorter of the assets useful life and the lease term on a straight-line basis. If we are reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying assets useful life.
Lease liability and ROU asset have been separately presented in the Restated Statement of Assets and Liabilities and lease payments have been classified as financing cash flows.
Our role as a lessor
When assets are leased out under a finance lease, the present value of minimum lease payments is recognised as a receivable. The difference between the gross receivable and the present value of receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method before tax, which reflects a constant periodic rate of return.
In respect of assets given on operating lease, the lease rental income is recognised in the Restated Statement of Profit and Loss (including other comprehensive income) on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
Inventories
Basis of Valuation
Inventories are valued at lower of cost and net realizable value after providing cost of obsolescence, if any. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. The comparison of cost and net realizable value is made on an item-by-item basis.
Method of Valuation
Cost of raw materials has been determined by using moving weighted average cost method and comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventories to their present location and condition." Cost of finished goods and work-in-progress includes direct labour and an appropriate share of fixed and variable production overheads and taxes as applicable. Fixed production overheads are allocated on the basis of normal capacity of production facilities. Cost is determined on moving weighted average basis. Cost of traded goods comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventories to their present location and condition.
Valuation of finished goods and traded goods are valued at cost or net realizable value whichever is less. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
Provision of obsolescence on inventories is considered on the basis of managements estimate based on demand and market of the inventories."
Impairment of non-financial assets
We assess at each year end whether there is any objective evidence that a non financial asset or a group of non-financial assets is impaired. If any such indication exists, we estimate the assets recoverable amount and the amount of impairment loss.
An impairment loss is calculated as the difference between an assets carrying amount and recoverable amount. Losses are recognized in Restated Statement of Profit and Loss (including other comprehensive income) and reflected in an allowance account. When we consider that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through Restated Statement of Profit and Loss (including other comprehensive income).
The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).
Provisions and contingent liabilities
Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Restated Statement of Assets and Liabilities date.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within our control or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
Cash and cash equivalents
Cash and cash equivalents in the Restated Statement of Assets and Liabilities comprise balance with banks, cash on hand, cheques/ draft on hand and short-term deposits net of bank overdraft with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include balance with banks, cash on hand, cheques/ draft on hand and short-term deposits net of bank overdraft."
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
a) at amortized cost; or b) at fair value through other comprehensive income; or c) at fair value through profit or loss. d) The classification depends on the entitys business model for managing the financial assets and the contractual terms of the cash flows.
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method (EIR).
Fair value through other comprehensive income (“FVOCI”): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Restated Statement of Profit and Loss (including other comprehensive income). When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Restated Statement of Profit and Loss (including other comprehensive income) and recognized in other gains/ (losses). Interest income from these financial assets is included in other income using the effective interest rate method.
Fair value through profit or loss (“FVTPL”): Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in other income.
Equity instruments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, we may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. We make such election on an instrument- by-instrument basis. The classification is made on initial recognition and is irrevocable.
If we decide to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, we may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
Impairment of financial assets
In accordance with Ind AS 109, Financial Instruments, we apply an expected credit loss (“ECL”) model for measurement and recognition of impairment loss on financial assets that are measured at amortized cost and FVOCI.
For recognition of impairment loss on financial assets and risk exposure, we determine whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12 month ECL.
Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the year end.
ECL is the difference between all contractual cash flows that are due to us in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
In general, it is presumed that credit risk has significantly increased since initial recognition if the payment is more than 30 days past due.
ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the Restated Statement of Profit and Loss (including other comprehensive income). In Restated Statement of Assets and Liabilities ECL for financial assets measured at amortized cost is presented as an allowance, i.e. as an integral part of the measurement of those assets in the Restated Statement of Assets and Liabilities. The allowance reduces the net carrying amount. Until the asset meets write off criteria, we do not reduce impairment allowance from the gross carrying amount.
Derecognition of financial assets
A financial asset is derecognized only when:
a) the rights to receive cash flows from the financial asset is transferred or b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the financial asset is transferred then in that case financial asset is derecognized only if substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized."
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the Restated Statement of Profit and Loss (including other comprehensive income).
Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in Restated Statement of Profit and Loss (including other comprehensive income) when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the Restated Statement of Profit and Loss (including other comprehensive income).
Borrowing Cost: Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Restated Statement of Profit and Loss (including other comprehensive income) as finance costs.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Restated Statement of Assets and Liabilities where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event we or our counterparty default, face insolvency or bankruptcy.
Employee Benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are recognized in respect of employees services up to the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Restated Statement of Assets and Liabilities.
Other long-term employee benefit obligations
Defined contribution plan
Provident Fund: Contribution towards provident fund is made to the regulatory authorities, where we have no further obligations. Such benefits are classified as Defined Contribution Schemes as we do not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Restated Statement of Profit and Loss (including other comprehensive income).
Employees State Insurance Scheme: Contribution towards employees state insurance scheme is made to the regulatory authorities, where we have no further obligations. Such benefits are classified as Defined Contribution Schemes as we do not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Restated Statement of Profit and Loss (including other comprehensive income).
Defined benefit plans
Gratuity
We provide for gratuity, a defined benefit plan (the “Gratuity Plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary. Our liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the other comprehensive income in the year in which they arise.
The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The estimated future payments which are denominated in a currency other than INR, are discounted using market yields determined by reference to high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Restated Statement of Profit and Loss (including other comprehensive income).
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the Restated Statement of Assets and Liabilities. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost."
Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining our earnings per share are the net profit or loss for the year after deducting preference dividends and any attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The Board of directors monitors the operating results of all product segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss and is measured consistently with profit and loss in the Summary Statements.
The operating segments have been identified on the basis of the nature of products/services. Further:
a) Segment revenue includes sales and other income directly identifiable with / allocable to the segment including inter - segment revenue. Expenses that are directly identifiable with / allocable to segments are considered for determining the segment result. b) Expenses which relate to the Group as a whole and not allocable to segments are included under un-allocable expenditure. c) Income which relates to the Group as a whole and not allocable to segments is included in unallocable income. d) Segment results includes margins on inter-segment sales which are reduced in arriving at our profit before tax. e) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the Group as a whole and not allocable to any segment. f) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated business. "
All amounts disclosed in Restated Financial Information and notes have been rounded off to the nearest thousands as per requirement of Schedule III of the Act, unless otherwise stated.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in the accounting policies of the Company during the last three Fiscals.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
Income
Our total income comprises (i) revenue from operations, and (ii) other income.
Revenue from Operations
Revenue from operations comprise (i) sale of gases and related products, comprising sale of manufactured products and sale of stock-in-trade; (ii) sale of services including facility fees, operation and maintenance charges; (iii) revenue from construction contracts; and (v) other operating revenues (net) comprising interest income on finance lease arrangement.
Other Income
Other income primarily comprises (i) interest income on bank deposits and others; (ii) profit on sale of property, plant and equipment (net); (iii) gain on fair valuation of investments; (iv) net gain/loss on foreign currency transactions; and (v) liabilities and provisions written back.
Expenses
Our expenses comprise (i) cost of materials consumed; (ii) purchase of stock-in-trade; (iii) changes in inventories of finished goods and stock-in-trade; (iv) power expenses; (v) employee benefits expense; (vi) finance costs; (vii) depreciation and amortization expense; and (viii) other expenses.
Cost of Materials Consumed
Cost of materials consumed primarily includes change in inventories of raw material (primarily calcium carbide and other gases) and purchase of raw materials for our manufacturing processes.
Purchase of Stock-in-Trade
Purchase of stock-in-trade relates to costs incurred for the procurement of inventories.
Changes in Inventories of Finished Goods and Stock-in-Trade
The changes in inventory of finished goods and stock-in-trade is the difference between opening stock and closing stock of the finished goods and stock-in-trade.
Power Expenses
Power expenses refer to expenses on power consumed less power subsidy received.
Employee Benefits Expenses
Employee benefit expenses primarily include salaries, bonus and wages, contribution to provident fund and other funds and staff welfare expenses.
Finance Cost
Finance cost includes interest expenses on term loans, cash credit, unsecured loan, lease liability, unwinding of asset restoration cost, less interest expenses capitalised and other borrowing cost.
Depreciation and Amortisation Expense
Depreciation and amortisation expense comprises: (i) depreciation on property, plant and equipment; (ii) depreciation on right-of-use assets; and (iii) amortisation of intangible assets.
Other Expenses
Other expenses comprise: (i) consumption of stores; (ii) repairs and maintenance on plant and machinery; (iii) transportation charges; (iv) selling and distribution expenses; (v) rent; (vi) rates and taxes; (vii) insurance expenses; (viii) travelling and conveyance expenses; (ix) auditors remuneration; (x) cost audit fees; (xi) bank charges; (xii) legal and professional expenses; (xiii) bad debts written off; (xiv) provision for doubtful debts; (xv) sundry balance written off; (xv) directors sitting fees; (xvi) CSR expenditure; and (xvii) miscellaneous expenses.
RESULTS OF OPERATIONS
The following table sets forth select financial data from our restated statement of profit and loss for Fiscal 2025, 2024 and 2023, the components of which are also expressed as a percentage of total income for such years.
Particulars |
Fiscal |
|||||
| 2025 | 2024 |
2023 |
||||
| ( million) | Percentage of Total Income (%) | ( million) |
Percentage of Total Income (%) | ( million) | Percentage of Total Income (%) | |
Income |
||||||
Revenue from operations |
3,124.83 |
89.68% |
2,694.75 | 92.86% | 2,051.07 | 91.68% |
| Other income | 359.49 | 10.32% | 207.28 | 7.14% | 186.03 | 8.32% |
Total Income |
3,484.32 | 100.00% | 2,902.03 |
100.00% | 2,237.10 |
100.00% |
Expenses |
||||||
Cost of materials consumed |
31.94 | 0.92% | 38.28 |
1.32% | 41.14 |
1.84% |
Purchase of stock-in-trade |
333.02 | 9.56% | 533.77 |
18.39% | 222.23 |
9.93% |
Changes in inventories of finished goods & stock-in- trade |
(7.78) | (0.22)% | (23.18) |
(0.80)% | (4.58) |
(0.20)% |
Power expenses Employee benefits expense |
749.15 227.55 | 21.50% 6.53% | 776.62 160.56 |
26.76% 5.53% | 739.73 144.05 |
33.07% 6.44% |
| Finance costs | 171.40 | 4.92% | 80.27 | 2.77% | 35.48 | 1.59% |
Depreciation and amortization expense |
207.20 | 5.95% | 100.13 |
3.45% | 113.79 |
5.09% |
| Impairment loss | 21.29 | 0.61% | 46.38 | 1.60% | 63.20 | 2.83% |
| 324 |
Particulars |
( million) | 2025 Percentage of Total Income | Fiscal 2024 ( million) | Percentage of Total Income | ( million) | 2023 Percentage of Total Income |
| (%) | (%) | (%) | ||||
| on financial | ||||||
| assets | ||||||
| Other expenses | 672.30 | 19.30% | 547.02 | 18.85% | 509.42 | 22.77% |
Total expenses |
2,406.07 | 69.05% | 2,259.85 | 77.87% | 1,864.46 | 83.34% |
Profit Before |
1,078.25 | 30.95% | 642.18 | 22.13% | 372.64 | 16.66% |
Tax |
||||||
Tax expense: |
||||||
| Current tax | 191.05 | 5.48% | 119.86 | 4.13% | 107.53 | 4.81% |
| Prior year taxes | 2.28 | 0.07% | - | - | 4.73 | 0.21% |
| Deferred tax | 52.03 | 1.49% | 69.43 | 2.39% | (21.04) | (0.94%) |
Total tax expense |
245.36 | 7.04% | 189.29 | 6.52% | 91.22 | 4.08% |
Profit for the year |
832.89 | 23.90% | 452.89 | 15.61% | 281.42 | 12.58% |
Fiscal 2025 compared to Fiscal 2024
Total Income
Total income increased by 20.06% to 3,484.32 million in Fiscal 2025 from 2,902.03 million in Fiscal 2024, due to an increase in our revenue from operations and other income.
Revenue from Operations
Revenue from operations increased by 15.96% to 3,124.83 million in Fiscal 2025 from 2,694.75 million in Fiscal 2024, primarily due to increases in the sale of manufactured products and revenue from construction contracts. Revenue from the sale of manufactured products increased to 2,167.02 million in Fiscal 2025 from 2,015.11 million in Fiscal 2024, on account of an increase in the volume of products sold and an increase in the average selling price of products. Additionally, sale of services including facility fees, operation and maintenance charges increased to 523.65 million in Fiscal 2025 from 260.47 million on account of an increase in onsite customers and revenue generated from such customers.
This was partially offset by a decrease in revenue from construction contracts to 200.28 million in Fiscal 2025 from 332.68 million in Fiscal 2024.
Other Income
Other income increased by 73.43% to 359.49 million in Fiscal 2025 from 207.28 million in Fiscal 2024, primarily as a result of increase in interest income on others to 269.55 million in Fiscal 2025 from 148.11 million in Fiscal 2024, on account of an increase in financial investments made by us during Fiscal 2025, and an increase in liabilities and provisions written back to 4.85 million in Fiscal 2025 from nil in Fiscal 2024.
Total Expenses
Our total expenses increased by 6.47% to 2,406.07 million in Fiscal 2025 from 2,259.85 million in Fiscal 2024.
Cost of Materials Consumed
Cost of materials consumed decreased by 16.56% to 31.94 million in Fiscal 2025 from 38.28 million in Fiscal 2024, due to a decrease in consumption of calcium carbide to 22.78 million in Fiscal 2025 from 29.33 million in Fiscal 2024. This was partially offset by an increase in cost of materials consumed for gases to 9.16 million in Fiscal 2025 from 8.95 million in Fiscal 2024 on account of an increase in its average purchase price.
Purchase of Stock-in-Trade
Purchase of stock-in-trade decreased significantly to 333.02 million in Fiscal 2025 from 533.77 million in Fiscal 2024 on account of decrease in revenue generated from project engineering services.
Changes in Inventories of Finished Goods and Stock-in-Trade
Changes in inventories of finished goods and stock-in-trade was (7.78) million in Fiscal 2025, as compared to (23.18) million in Fiscal 2024. This was primarily due to an increase in stock-in-trade inventories at the beginning of the year to 66.86 million in Fiscal 2025 from 51.09 million in Fiscal 2024, and an increase in stock-in-trade inventories at the end of the year to 71.33 million in Fiscal 2025 from 66.86 million in Fiscal 2024.
Power Expenses
Power expenses decreased by 3.54% to 749.15 million in Fiscal 2025 from 776.62 million in Fiscal 2024.
Employee Benefits Expenses
Employee benefits expenses increased by 41.72% to 227.55 million in Fiscal 2025 from 160.56 million in Fiscal 2024 primarily due to an increase in salaries, bonus and wages to 219.57 million in Fiscal 2025 from 156.60 million in Fiscal 2024 on account of (i) an increase in the scale of our operations; (ii) increase in the number of our employees from 250 as of March 31, 2024 to 281 as of March 31, 2025; and (iii) annual increments during Fiscal 2025.
Finance Cost
Finance cost increased significantly to 171.40 million in Fiscal 2025 from 80.27 million in Fiscal 2024 primarily due to increases in (i) interest expense on term loans to 114.12 million in Fiscal 2025 from 34.52 million in Fiscal 2024 on account of an increase in term loan availed by us during Fiscal 2025; (ii) interest expense on cash credit loan to 47.74 million in Fiscal 2025 from 31.80 million in Fiscal 2024 on account of an increase in working capital borrowings availed by us during Fiscal 2025; and (iii) interest expense on unsecured loan to 23.76 million in Fiscal 2025 from 14.18 million in Fiscal 2024 on account of an increase in interest rates.
Depreciation and Amortization Expense
Depreciation and amortization expense increased by 106.93% to 207.20 million in Fiscal 2025 from 100.13 million in Fiscal 2024. This was a result of an increase in depreciation expense on property, plant and equipment to 200.04 million in Fiscal 2025 from 90.45 million in Fiscal 2024. This was primarily because the depreciation expenses pursuant to capitalisation of plant and machinery during the fourth quarter of Fiscal 2024 was accounted for in Fiscal 2025.
Impairment loss on financial assets
Impairment on loss of financial assets decreased by 54.10% to 21.29 million in Fiscal 2025 from 46.38 million in Fiscal 2024 primarily due to decrease in allowance for credit losses to 12.29 million in Fiscal 2025 from 44.10 million in Fiscal 2024.
Other Expenses
Other expenses increased by 22.90% to 672.30 million in Fiscal 2025 from 547.02 million in Fiscal 2024, primarily due to increases in (i) transportation charges to 303.59 million in Fiscal 2025 from 280.25 million in Fiscal 2024 on account of an increase in delivery schedules pursuant to an increase in sales to bulk and package customers during Fiscal 2025; (ii) repairs and maintenance (plant and machinery) to 41.21 million in Fiscal 2025 from 20.23 million in Fiscal 2024 on account of an increase in our operations; (iii) contractual labour charges to 99.12 million in Fiscal 2025 from 18.29 million in Fiscal 2024 on account of expenses incurred on contract labour due to increase in number of contract labourers engaged by us; (iv) legal and professional expenses to 26.32 million in Fiscal 2025 from 16.02 million in Fiscal 2024; and (v) miscellaneous expenses to 49.61 million in Fiscal 2025 from 30.49 million in Fiscal 2024. This was partially offset by a decrease in corporate social responsibility expenses to 5.65 million in Fiscal 2025 from 20.16 million in Fiscal 2024.
Tax Expense
Tax expense increased to 245.36 million in Fiscal 2025 from 189.29 million in Fiscal 2024. This primarily constituted an increase in current tax to 191.05 million in Fiscal 2025 from 119.86 million in Fiscal 2024 primarily on account of increase in the restated profit before tax, and an increase in prior year taxes to 2.28 million in Fiscal 2025 from nil in Fiscal 2024.
Profit for the Year
As a result of the foregoing, our profit for the year increased by 83.91% to 832.89 million in Fiscal 2025 from 452.89 million in Fiscal 2024.
Fiscal 2024 compared to Fiscal 2023
Total Income
Total income increased by 29.72% to 2,902.03 million in Fiscal 2024 from 2,237.10 million in Fiscal 2023, due to an increase in our revenue from operations and other income.
Revenue from Operations
Revenue from operations increased by 31.38% to 2,694.75 million in Fiscal 2024 from 2,051.07 million in Fiscal 2023, primarily due to increases in the sale of manufactured products and revenue from construction contracts. Revenue from the sale of manufactured products increased to 2,015.11 million in Fiscal 2024 from 1,699.40 million in Fiscal 2023, on account of an increase in the volume of products sold and an increase in the average selling price of products. Further, revenue from construction contracts increased to 332.68 million in Fiscal 2024 from 50.17 million in Fiscal 2023, primarily on account of an increase in revenue from project engineering services due to an increase in the projects received from customers during Fiscal 2024.
Other Income
Other income increased by 11.42% to 207.28 million in Fiscal 2024 from 186.03 million in Fiscal 2023, primarily as a result of increase in interest income on others to 148.11 million in Fiscal 2024 from 82.71 million in Fiscal 2023, on account of an increase in financial investments made by us during the Fiscal 2024. This was partially offset by a decrease in gain on fair valuation of investments to 41.43 million in Fiscal 2024 from 88.61 million in Fiscal 2023.
Total Expenses
Our total expenses increased by 21.21% to 2,259.85 million in Fiscal 2024 from 1,864.46 million in Fiscal 2023.
Cost of Materials Consumed
Cost of materials consumed decreased by 6.95% to 38.28 million in Fiscal 2024 from 41.14 million in Fiscal 2023, due to a decrease in consumption of gases to 8.95 million in Fiscal 2024 from 14.39 million in Fiscal 2023 on account of a decrease in the consumption of certain raw materials including carbon-dioxide. This was partially offset by an increase in cost of materials consumed for calcium carbide consumed to 29.33 million in Fiscal 2024 from 26.75 million in Fiscal 2023 on account of an increase in its average purchase price.
Purchase of Stock-in-Trade
Purchase of stock-in-trade increased significantly to 533.77 million in Fiscal 2024 from 222.23 million in Fiscal 2023 due to an increase in the volume of our sales.
Changes in Inventories of Finished Goods and Stock-in-Trade
Changes in inventories of finished goods and stock-in-trade was (23.18) million in Fiscal 2024, as compared to (4.58) million in Fiscal 2023. This was primarily due to an increase in stock-in-trade inventories at the beginning of the year to 51.09 million in Fiscal 2024 from 45.72 million in Fiscal 2023, and an increase in stock-in-trade inventories at the end of the year to 66.86 million in Fiscal 2024 from 51.09 million in Fiscal 2023.
Power Expenses
Power expenses increased by 4.99% to 776.62 million in Fiscal 2024 from 739.73 million in Fiscal 2023 due to an increase in expenses on power consumed on account of an increase in production volume of oxygen and nitrogen.
Employee Benefits Expenses
Employee benefits expenses increased by 11.46% to 160.56 million in Fiscal 2024 from 144.05 million in Fiscal 2023 primarily due to an increase in salaries, bonus and wages to 156.60 million in Fiscal 2024 from 138.72 million in Fiscal 2023 on account of (i) an increase in the scale of our operations; (ii) increase in the number of our employees from 200 as of March 31, 2023 to 250 as of March 31, 2024; and (iii) annual increments during Fiscal 2024.
Finance Cost
Finance cost increased significantly to 80.27 million in Fiscal 2024 from 35.48 million in Fiscal 2023 primarily due to increases in (i) interest expense on cash credit to 31.80 million in Fiscal 2024 from 1.58 million in Fiscal 2023 on account of an increase in working capital borrowings availed during Fiscal 2024; (ii) interest expense on unsecured loan to 14.18 million in Fiscal 2024 from 2.24 million in Fiscal 2023 on account of an increase in unsecured borrowings availed during Fiscal 2024; and (iii) interest expense on term loans to 34.52 million in Fiscal 2024 from 31.42 million in Fiscal 2023 on account of an increase in term loans availed during the Fiscal 2024. This was partially offset by a decrease in other borrowing costs to 8.88 million in Fiscal 2024 from 11.65 million in Fiscal 2023.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased by 12.00% to 100.13 million in Fiscal 2024 from 113.79 million in Fiscal
2023. This was a result of a decrease in depreciation expense on property, plant and equipment to 90.45 million in Fiscal 2024 from 104.69 million in Fiscal 2023. This was primarily because the depreciation expenses pursuant to capitalisation of plant and machinery during the fourth quarter of Fiscal 2024 to be accounted for in Fiscal 2025.
Other Expenses
Other expenses increased by 7.38% to 547.02 million in Fiscal 2024 from 509.42 million in Fiscal 2023, primarily due to increases in (i) transportation charges to 280.25 million in Fiscal 2024 from 264.43 million in Fiscal 2023 on account of an increase in delivery schedules pursuant to an increase in sales to bulk and package customers during Fiscal 2024; (ii) consumption of stores to 111.78 million in Fiscal 2024 from 97.53 million in Fiscal 2023; (iii) travelling and conveyance expenses to 22.95 million in Fiscal 2024 from 12.76 million in Fiscal 2023; and (iv) corporate social responsibility expenses to 20.16 million in Fiscal 2024 from 9.32 million in Fiscal 2023 on account of increase in expenditure on corporate social responsibility initiatives due to regulatory requirements.
Tax Expense
Tax expense increased significantly to 189.29 million in Fiscal 2024 from 91.22 million in Fiscal 2023. This primarily constituted an increase in current tax to 119.86 million in Fiscal 2024 from 107.53 million in Fiscal 2023 primarily due to a corresponding increase in the restated profit before tax, and an increase in deferred tax charge to 69.43 million in Fiscal 2024 from deferred tax credit of 21.04 million in Fiscal 2023.
Profit for the Year
As a result of the foregoing, our profit for the year increased by 60.93% to 452.89 million in Fiscal 2024 from 281.42 million in Fiscal 2023.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed the expansion of our business and operations through a combination of internal accruals and external borrowings.
Cash Flows
The following table sets forth certain information relating to our cash flows in the years indicated:
( million)
Particulars |
Fiscal | ||
| 2025 | 2024 | 2023 | |
| Net cash generated from operating activities | 42.75 | 437.47 | 387.47 |
| Net cash used in investing activities | (569.30) | (1,217.10) | (1,142.34) |
| Net cash generated from financing activities | 519.20 | 674.84 | 865.98 |
| Net (decrease) / increase in cash and cash equivalents | (7.35) | (104.79) | 111.11 |
Cash and cash equivalents at the end of the year |
1.81 | 9.16 | 113.95 |
Operating Activities
Fiscal 2025
Net cash generated from operating activities was 42.75 million in Fiscal 2025. In Fiscal 2025, our profit before tax was 1,078.25 million, primarily adjusted for changes in interest income of 269.25 million, depreciation and amortization expense of 200.90 million and finance costs of 170.65 million. Operating profit before working capital changes was 1,169.79 million in Fiscal 2025. Primary adjustments in operating assets and liabilities comprised an increase in other current liabilities of 53.29 million, and an increase in trade receivables of 413.31 million. Income tax paid (net of refunds) during Fiscal 2025 was 73.76 million.
Fiscal 2024
Net cash generated from operating activities was 437.47 million in Fiscal 2024. In Fiscal 2024, our profit before tax was 642.18 million, primarily adjusted for changes in interest income of 153.32 million, depreciation and amortization expense of 91.39 million, finance costs of 80.27 million and impairment loss on financial assets of 46.38 million. Operating profit before working capital changes was 670.47 million in Fiscal 2024. Primary adjustments in operating assets and liabilities comprised a decrease in other current liabilities of 88.38 million, and an increase in trade receivables of 89.86 million. Income tax paid (net of refunds) during Fiscal 2024 was 60.68 million.
Fiscal 2023
Net cash generated from operating activities was 387.47 million in Fiscal 2023. In Fiscal 2023, our profit before tax was
372.64 million, primarily adjusted for changes in interest income of 84.58 million, depreciation and amortization expense of 105.73 million, gain on fair value of investments of 88.61 million, finance costs of 35.48 million and impairment loss on financial assets of 63.20 million. Operating profit before working capital changes was 407.61 million in Fiscal 2023. Primary adjustments in operating assets and liabilities comprised an increase in other current liabilities of 202.87 million, and an increase in trade receivables of 92.27 million. Income tax paid (net of refunds) during Fiscal 2023 was 107.98 million.
Investing Activities
Fiscal 2025
Net cash used in investing activities in Fiscal 2025 was 569.30 million, primarily due to purchase of property, plant and equipment, including capital work in progress of 692.21 million and investments made during the year (net) of 230.22 million. This was partially offset by interest income received of 266.92 million.
Fiscal 2024
Net cash used in investing activities in Fiscal 2024 was 1,217.10 million, primarily due to purchase of property, plant and equipment, including capital work in progress of 870.04 million and investments made during the year (net) of 525.16 million. This was partially offset by interest income received of 154.31 million.
Fiscal 2023
Net cash used in investing activities in Fiscal 2023 was 1,142.34 million, primarily due to purchase of property, plant and equipment, including capital work in progress of 949.44 million, investments made during the year (net) of 94.51 million and loans given during the year of 210.31 million. This was partially offset by interest income received of 82.83 million.
Financing Activities
Fiscal 2025
Net cash generated from financing activities in Fiscal 2025 was 519.20 million, primarily on account of proceeds from non-current borrowings of 725.92 million and proceeds from current borrowings (net) of 102.22 million which was partially offset by finance costs paid of 156.63 million and repayment of non-current borrowings of 144.16 million.
Fiscal 2024
Net cash generated from financing activities in Fiscal 2024 was 674.84 million, primarily on account of proceeds from non-current borrowings of 546.00 million and proceeds from current borrowings (net) of 274.84 million which was partially offset by finance costs paid of 73.07 million and repayment of non-current borrowings of 62.87 million.
Fiscal 2023
Net cash generated from financing activities in Fiscal 2023 was 865.98 million primarily on account of proceeds from non-current borrowings of 604.33 million and proceeds from current borrowings (net) of 299.61 million, which was partially offset by finance costs paid of 28.87 million.
INDEBTEDNESS
As of March 31, 2025 we had total borrowings of 2,452.96 million. The following table sets forth the maturity profile of our borrowings based on contractual undiscounted payments as of March 31, 2025:
| Particulars | Total | Within 1 Year | 1 5 Years | More than 5 Years | |
| ( million) | |||||
| Borrowings | 2,452.96 | 985.71 | 1,110.70 | 356.55 |
For further information on our outstanding indebtedness, see “Financial Indebtedness” on page 334.
CONTINGENT LIABILITIES AND COMMITMENTS
The table below sets forth our contingent liabilities and commitments as of March 31, 2025:
( in million)
Nature of Contingent Liability |
As at March 31, 2025 |
Contingent Liabilities: |
|
Tax Disputes |
|
| Central Excise Duty, Service Tax and Goods and Service Tax | 41.29 |
| Income Tax | 25.42 |
Nature of Contingent Liability |
As at March 31, 2025 |
Other Matters |
|
| Supplier Claims | 35.00 |
Total |
101.71 |
Notes:
1. Forums where tax disputes are pending, as at March 31, 2025 are summarized below:
Name of statute |
Nature of |
As at |
Period which the amount relates |
Forum where dispute pending |
Dues |
March 31, 2025 |
(Financial Year) |
||
( in million) |
||||
Finance Act, 1994 |
Service Tax |
5.93 |
2012-2013 to 2017-2018 |
Additional Commissioner |
(CGST and Central Excise) |
||||
Central Excise Act, 1944 |
Central Excise |
26.67 |
2006-2007 to October 2016 |
Assistant Commissioner (T&R) |
(CGST and Central Excise) |
||||
Central Excise Act, 1944 |
Central Excise |
0.11 |
2003-2004 |
Commissioner (CGST and |
Central Excise) |
||||
Central Excise Act, 1944 |
Central Excise |
7.96 |
2013-2014 to 2016-2017 |
Additional Commissioner |
(CGST and Central Excise) |
||||
Goods And Service Tax Act, 2017 |
Goods and Service |
0.62 |
2021-2022 |
Adjudicating Authority |
Tax |
||||
Income Tax Act, 1961 |
Income Tax |
25.42 |
2013-2014 |
Commissioner of Income Tax |
(Appeals) |
2. A supplier has preferred a claim against the Company for about 35 million for non-acceptance of delivery which has been disputed by the Company. Additionally, the Company has filed a suit for damages against the supplier for failure to meet contractual obligations. This matter is pending at various stages before the courts. The management of the Company remains fairly confident of a favorable outcome and therefore, does not foresee any material financial liability devolving on the Company and accordingly, no provision has been made.
For further information of our contingent liabilities as at March 31, 2025 as per Ind AS 37, see “Restated Financial Information Note 40. Contingent liabilities and Commitments” on page 292.
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
We do not have any off-balance sheet arrangements, derivative instruments or other relationships with other entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. The table below provides details of our aggregate related party transactions and the percentage of such related party transactions to our revenue from operations in the years indicated:
( million, except percentages) |
|||
Particulars |
Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Absolute sum of all Related Party Transactions* | 103.38 | 104.58 | 40.28 |
| Revenue from Operations | 3,124.83 | 2,694.75 | 2,051.07 |
| Absolute sum of all Related Party Transactions* | |||
| as a Percentage of Revenue from Operations | 3.31% | 3.88% | 1.96% |
*
Including debits, credits and balance sheet transactions without netting off.AUDITOR OBSERVATIONS
There are no qualifications, reservations and adverse remarks by our Statutory Auditors in our Restated Financial Information.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, credit risk and liquidity risk. Our senior management oversees the management of these risks. Our senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk governance framework for us. Our Board of Directors reviews the policies for managing each risk.
Credit Risk
Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Our Company has a policy of dealing only with credit worthy counter parties and obtaining sufficient collateral, where appropriate as a means of mitigating the risk of financial loss from defaults. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables, investments, cash and cash equivalents, derivatives and financial guarantees provided by our Company.
Financial Instruments and Cash Deposits
Credit risk from balances with banks and financial institutions is managed by our treasury department and investment of surplus
330 funds are made only with approved counterparties.
Liquidity Risk
Liquidity risk refers to the risk that we cannot meet our financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. We monitor our risk of a shortage of funds by estimating the future cash flows. We have obtained fund and non-fund based working capital lines from various banks. Furthermore, we have access to funds from debt markets through commercial paper programs, non-convertible debentures and other debt instruments. We invest our surplus funds in bank fixed deposit and in mutual funds, which carry no or low market risk.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Financial instruments affected by market risk include loans and borrowings in foreign currencies.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relates primarily to our long term debt obligations with floating interest rates. We carry our borrowings primarily at variable rate.
CAPITAL EXPENDITURE
Our capital expenditure (pertaining to payments made for purchases of property, plant and equipment, including capital work in progress) was 692.21 million, 870.04 million and 949.44 million in Fiscals 2025, 2024 and 2023, respectively.
SIGNIFICANT ECONOMIC CHANGES
There are no significant economic changes that materially affect or are likely to affect our income from continuing operations.
UNUSUAL OR INFREQUENT EVENTS OF TRANSACTIONS
Other than as disclosed in this Red Herring Prospectus, there have been no “unusual” or “infrequent” events or transactions that have in the past or may in the future affect our business operations or future financial performance.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been affected and we expect will continue to be affected by the trends identified above in “ - Significant Factors Affecting our Results of Operations and Financial Condition” and the uncertainties described in “Risk Factors” beginning on pages 311 and 31. To our knowledge, except as described or anticipated in this Red Herring Prospectus, there are no known factors which we expect will have an adverse impact on our revenues or income from continuing operations.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in “Risk Factors”, “Our Business” and “Managements Discussion and Analysis of Financial Condition and Results of Operations” on pages 31, 182 and 311, respectively, there are no known factors that might affect the future relationship between costs and revenues.
NEW PRODUCTS OR BUSINESS SEGMENTS
We have not announced and do not expect to announce in the near future any new business segments.
COMPETITIVE CONDITIONS
We operate in a competitive environment. See “Our Business”, “Industry Overview” and “Risk Factors” on pages 182, 138 and 31, respectively, for further information on competitive conditions that we face.
SEASONALITY/ CYCLICALITY OF BUSINESS
Our Companys business is not seasonal in nature.
SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2025 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
Except as disclosed in this Red Herring Prospectus, no circumstances have arisen after March 31, 2025 which may adversely affect or are likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months.
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+91 9892691696
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