Exato Technologies Ltd Management Discussions

<dhhead>MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS </dhhead>

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Draft Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factor

BUSINESS OVERVIEW

Our Company was incorporated as "Exato Technologies (OPC) Private Limited" on May 18, 2016. It was converted into a private limited company and the name was changed to "Exato Technologies Private Limited" on January 05, 2018. Subsequently, it was converted into a public limited company and renamed as "Exato Technologies Limited" on July 31, 2025. The Corporate Identification Number (CIN) of the Company is U74999UP2016PLC228280.

We are a Customer Transformation Partner that helps businesses improve how they serve and communicate with their consumers. Our offerings are built around Customer Experience-as-a-Service (CXaaS) and AI-as-a-Service, helping organizations enhance customer engagement, streamline operations, and achieve measurable business outcomes.

We create solutions that make customer service smarter, faster, and more efficient by leveraging technologies such as artificial intelligence (AI), automation, and cloud platforms. Our tools include virtual assistants, automation features, and customer sentiment analysis, enabling companies to manage interactions across multiple channels i.e phone, chat, email, and others in a seamless manner. These solutions reduce costs and response time while improving the customer experience.

Since our inception in 2016 as a contact-center systems integrator, we have expanded into broader customer engagement and digital transformation services. We have served over 150 clients, including several from the ET500 list. More than 40% of our revenues are derived from long-term service contracts exceeding five years (around sixty months), reflecting continuity and stable client relationships.

We operate with a team of over 60 engineers in India, delivering solutions to both international clients and domestic enterprises, ensuring the presence across global and Indian markets.We serve clients in the USA, Singapore, and other international markets, supported by delivery partnerships while also catering to enterprises within India. Our business is further supported by technology partnerships with NICE Ltd., Acumatica, and Mitel, enabling us to provide customer experience, ERP, and unified communication solutions.

Our capabilities are demonstrated by the trust placed in us by leading enterprises across industries. We work with MakeMyTrip, RBL Bank, IGT Solutions Pvt. Ltd., IKS, and WNS, delivering customer experience solutions that are scalable, resilient, and outcome-driven. These associations reflect our ability to design and implement reliable CX platforms that enhance customer engagement, improve service efficiency, and create measurable business impact across travel, banking, IT-enabled services, and business process management sectors.

Our unique value proposition lies in delivering integrated AI, automation, and CX solutions that reduce implementation timelines through the work of our dedicated in-house data science team.

We have consistently grown in terms of our revenues over the past years our revenues from operation were 7,276.27 lakhs in F.Y.2022-23, 11,390.73 lakhs in the FY 2023-24 and 12,422.95 lakhs in the FY 2024-25. Our Net Profit after tax for the above- mentioned periods are 505.63 lakhs, 530.55 lakhs and 975.65 lakhs respectively.

 

FINANCIAL KPIs OF THE COMPANY:

	Exato Technologies Limited
Performance	Fiscal 2025	Fiscal 2024	Fiscal 2023
Revenue from operations (1)	12,422.95	11,390.73	7,276.27
Growth in revenue from operations (%)	9.06%	56.55%	73.56%
Total Income (2)	12,616.06	11,490.78	7,313.11
EBITDA (3)	1,596.31	907.19	611.58
EBITDA Margin (%)(4)	12.65%	7.89%	8.36%
PAT (5)	975.65	530.55	505.63
PAT Margin (%) (6)	7.85%	4.66%	6.95%
RoNW (%) (7)	23.04%	19.64%	23.29%
Return on Average Equity(8)	28.15	21.78	32.08
RoCE (%) (9)	26.41%	23.17%	21.29%
Debt- Equity Ratio (10)	0.75	0.61	0.29

 

Notes:

 

(1) Revenue from operations represents the revenue from sale of service & product & other operating revenue of our Company as recognized in the Restated financial information.

(2) Total income includes revenue from operations and other income.

(3) EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived at by obtaining the profit before tax/ (loss) for the year / period and adding back interest cost, depreciation, and amortization expense. (4) EBITDA margin is calculated as EBITDA as a percentage of total income. (5) Restated profit for the period / year margin is calculated as restated profit for the period / year divided by revenue from operations. (6) PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations. ⁽⁷⁾ Return on net worth is calculated as Net profit after tax, as restated, attributable to the owners of the Company for the year/ period divided by Net worth at the end of respective period/year. Net worth means aggregate value of the paid-up equity share capital and reserves & surplus.

(8) RoAE is calculated as Net profit after tax divided by Average Equity.

 

(9) Return on capital employed calculated as Earnings before interest and taxes divided by capital employed as at the end of respective period/year. (Capital employed calculated as the aggregate value of total equity, total debt and deferred tax liabilities) ⁽¹⁰⁾ Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long-term and short-term borrowings. Total equity is the sum of share capital and reserves & surplus

FACTORS AFFECTING OUR RESULT OF OPERATIONS

Except as otherwise stated in this Draft Red Herring Prospectus and the Risk Factors given in the Draft Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

 

Regulatory Framework

We have obtained all regulatory permissions which are necessary to run our business, Further, some of the approvals are granted for fixed periods of time and need renewals, which are obtained in the course of business, however, there may be change in statutory regulations at any time which cannot be predicted by us. There can be no assurance that the change in regulations will not impact our operations in the future.

 

Ability of Management

Our success depends on the continued services and performance of the members of our management team and other key employees. Competition for senior management in the industry is intense, and we may not be able to retain our existing senior management or attract and retain new senior management in the future. The loss of any member of our senior management or other key personnel may adversely affect our business, results of operations and financial condition.

 

Market & Economic conditions

India is one of the largest economies and is growing at a rapid pace. But in this globalised economy, all the businesses face an uncertain level of volatility from unexpected global events which ranges from global pandemics to wars, to weather changes to supply chain disruption, which may change the economic dynamics and the purchasing capability of the end customers. At the time of market slowdown, the demand falls which has adverse impact on our business.

 

Competition

We compete with a range of players in the highly competitive CX industry, including large multinational corporations as well as specialized boutique firms. The market is characterized by price wars, rapid technological advancements, and the constant need for innovation to stay ahead. These factors present significant challenges for our company, as they can erode profit margins and make it difficult to differentiate our offerings.

 

Significant Developments after March 31, 2025 that may affect our Future Results of Operations

The Directors confirm that there have been no other events or circumstances since the date of the last financial statements as disclosed in the Draft Red Herring Prospectus which materially or adversely affect or is likely to affect the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next twelve months.

 

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

The restated consolidated summary statement of assets and liabilities of the Company as at March 31, 2025, March 31, 2024 and 2023 and the related restated summary statement of profits and loss and cash flows for the year ended March 31, 2025, March 31, 2024 and 2023 herein collectively referred to as ("Restated Summary Statements") have been compiled by the management from the audited Consolidated Financial Statements of the Company for the year ended on March 31, 2025, March 31, 2024 and 2023 approved by the Board of Directors of the Company. Restated Summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the "Act") read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations") issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) ("Guidance Note"). Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the BSE Limited in connection with its proposed SME IPO. The Company’s management has recast the Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated Summary Statements.

The Restated Consolidated Financial Statements are prepared and presented under the historical cost convention and evaluated on a going concern basis using the accrual system of accounting in accordance with the accounting principles generally accepted in India (Indian GAAP) and the requirements of the Companies Act, including the Accounting Standards as prescribed by the Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of Companies (Accounts) Rules, 2014.

The financial statements of the Company and its subsidiary companies have been combined on a line-byline basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses as per Accounting Standard 21 "Consolidated Financial Statements" notified by Companies (Accounting Standards) Rules, 2021.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles in India.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current non-current classification of assets and liabilities.

 

b) USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

 

c) PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS

(i) Property, Plant & Equipment

All Property, Plant & Equipment are recorded at cost including taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the asset to its intended use.

 

(ii) Intangible Assets

Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. d) DEPRECIATION / AMORTISATION

Depreciation on fixed assets is calculated on a Written - Down value method using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013. Individual assets cost of which doesn’t exceed Rs. 5,000/- each are depreciated in full in the year of purchase.

Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the benefits to accrue. Intangible assets are amortized on straight line method basis over 10 years in pursuance of provisions of AS-26. e) INVENTORIES

Inventories comprises of stock in trade being Licenses and Hardware components.

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out principle. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

 

f) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

 

g) INVESTMENTS:

Non-current investments are carried at cost less any other-than-temporary diminution in value, determined on the specific identification basis.

Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually for each investment. Cost of investments sold is arrived using average method.

 

h) FOREIGN CURRENCY TRANSLATIONS

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

 

(ii) Measurement of foreign currency items at the Balance Sheet date

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

 

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise. Investments in shares of foreign subsidiaries are not restated at the end of the year.

 

i) BORROWING COSTS

Borrowing Costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalization of such asset is added to the cost of the assets. j) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

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 in the control of the company or a present obligation that arises from past event 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.

 

k) REVENUE RECOGNITION

Revenue is recognised on accrual basis unless otherwise stated.

Revenue from the sales of hardware components is recognized when the significant risk and rewards of ownership of the goods have passed to the buyer, usually on delivery of the hardware components and revenue from the sales of licenses is recognized when it is delivered and installed and is measured at fair value of consideration received/receivable, net of return and allowance, discounts, volume rebates and cash discount.

Revenue from services is recognised based on services rendered to clients as per the terms of specific contracts. The sales of services are recorded at invoice value, net of GST, trade discount, and rebates, where applicable. l) OTHER INCOME

Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right to receive such income is established.

 

m) TAXES ON INCOME

Income taxes are accounted for in accordance with Accounting Standard (AS-22) "Accounting for taxes on income", notified under Companies (Accounting Standards) Rules, 2021. Income tax comprises of both current and deferred tax.

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax is recognized for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. At each Balance Sheet date, The Company re-assesses unrecognized deferred tax assets, if any. In case of unabsorbed losses and unabsorbed depreciation, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that can be realized against future taxable profit. At each balance sheet date the Company reassesses unrecognized deferred tax assets.

Minimum Alternative Tax credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period. n) CASH AND BANK BALANCES

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Other Bank Balances are short-term balance ( with original maturity is more than three months but less than twelve months).

 

o) EARNINGS PER SHARE

Basic earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

 

p) EMPLOYEE BENEFITS

Short-term employee benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentives.

 

Defined Contribution Plan:

In respect to retirement benefit in the form of Provident fund, the Company’s Contribution paid/payable under the schemes is recognized as an expense in the period in which the employee renders the related service. The Company’s contributions towards provident fund, which are being deposited with the Regional Provident Fund Commissioner, are charged to the Statement of Profit and Loss.

 

Defined Benefit Plan:

The Company provides 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. The Company’s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each reporting period. Actuarial losses/gains are recognized in the Statement of Profit and Loss in the period in which they arise.

Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term employee benefits and the accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as other long term employee benefits. The Company’s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial Losses / Gains are recognized in the Statement of Profit and Loss in the year in which they arise.

The company has adopted leave policy with effect from April 01, 2024.

 

q) SEGMENT REPORTING

Since the company is operating on one segment, Segment reporting is not applicable to the company.

 

Based on Financial Statements of Profit & Loss as Restated

	Consolidated		Consolidated		Consolidated
Particulars	For the year ended 31st March, 2025	% of Total**	For the year ended 31st March, 2024	% of Total**	For the year ended 31st March, 2023	% of Total**
	( in lakhs)		( in lakhs)		( in lakhs)
INCOME
Revenue from Operations	12,422.95	98.47%	11,390.73	99.13%	7,276.27	99.50%
Other Income	193.11	1.53%	100.05	0.87%	36.84	0.50%
Total Revenue (A)	12,616.06	100.00%	11,490.78	100.00%	7,313.11	100.00%
EXPENDITURE
Purchases of Licenses and Hardware components	8,871.46	70.32%	9,282.62	80.78%	5,872.55	80.30%
Direct expenses	0.64	0.01%	1.77	0.02%	2.17	0.03%
Changes in Inventories of Work-In-Progress & Finished Goods	134.74	1.07%	(364.92)	(3.18%)	(133.61)	(1.83%)
Employee Benefits Expenses	1,121.01	8.89%	1,156.66	10.07%	646.08	8.83%
Finance Costs	202.16	1.60%	126.89	1.10%	100.02	1.37%
Depreciation & Amortisation Expenses	60.12	0.48%	23.26	0.20%	17.34	0.24%
Other Expenses	874.25	6.93%	491.43	4.28%	305.94	4.18%
Total Expenses (B)	11,264.38	89.29%	10,717.71	93.27%	6,810.49	93.13%
Profit before tax	1,351.68	10.71%	773.07	6.73%	502.62	6.87%
Tax Expense/ (benefit)
(a) Current Tax Expense	402.91	3.19%	255.19	2.22%	88.19	1.21%
(b) Deferred Tax	(26.88)	(0.21%)	(12.67)	(0.11%)	(3.01)	(0.04%)
(c) MAT Credit Entitlement	-	0.000%	-	0.00%	(88.19)	(1.21%)
Net tax expense / (benefit)	376.03	2.98%	242.52	2.11%	(3.01)	(0.04%)
Profit/(Loss) for the year	975.65	7.73%	530.55	4.62%	505.63	6.91%

 

**%Total refers to Total Revenue

Note: The above figures are based on the Audited Restated Consolidated Financial Statements of the Company.

 

Components of our Profit and Loss Account

Income

Our total income comprises of revenue from operations and other income.

 

Revenue from Operations

The Revenue from operations as a percentage of our total income was 98.47%, 99.13% and 99.50% for the Financial Years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively.

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024	For the year ended 31 March 2023
Sale of Hardwares	1,431.82	2,429.37	1,239.27
Sale of Software	7,492.60	7,202.31	4,054.91
Sale of Services	3,498.53	1,759.05	1,982.09
TOTAL	12,422.95	11,390.73	7,276.27

 

Other Income

Our other Income consists of Interest on Deposits, Interest on Income Tax Refund, Rebate and discount, Unclaimed Liability Written back and Miscellaneous income.

Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024	For the year ended 31 March 2023
Interest Income on FD	62.86	54.90	18.50
Interest on Income Tax Refund	-	4.44	7.66
Unclaimed Liability Written Back	130.17	-	9.44
Rebate and discount	-	40.71	1.24
Miscellaneous Income	0.08	-	-
TOTAL	193.11	100.05	36.84

 

Expenditure

Our total expenditure primarily consists of Purchases, Direct expenses, Changes in Inventories, Employee benefit expenses, Finance costs, Depreciation and Other Expenses.

 

Purchases

Our purchases comprises of Purchases of Licenses and Hardware Components.

 

Direct expenses

Our direct expenses comprise of Freight expense, Tender Cost, Transit Insurance and other direct expenses.

 

Employee Benefit Expenses

Our employee benefits expense primarily comprises of Salaries, Staff Welfare, Directors Remuneration, Gratuity expense, Employees Group Health Insurance, and Contribution to Provident fund & other fund.

 

Finance costs

Our Finance cost expenses comprise of Interest Expenses, Loan Processing Charges, Bank Charges, BG Commission Charges and Loan foreclosure Charges.

 

Other Expenses

Our other expenses primarily comprise of Auditors remuneration, Advertisement and Business Promotion Expenses, Balance written off, Travelling & Conveyance, Rent expense, Rates & Taxes, Professional Fee, Office Expenses, CSR expenses, Repair & Maintenance, etc.

Particulars	For the year ended 31 March, 2025	For the year ended 31 March, 2024	For the year ended 31 March, 2023
Auditors Remuneration
-Statutory audit	4.80	4.18	2.50
-Tax audit	1.00	1.00	0.75
Business Promotion Expenses	112.45	38.12	35.68
Balance written off	226.39	0.63	1.28
Commission & Brokerage	1.75	-	2.25
Conveyance Expenses	15.67	10.47	9.26
Car Lease Rental Expenses	62.80	62.40	21.00
Donation Expenses	0.11	0.51	-
Electricity Expenses	6.64	6.14	3.01
Forex Gain Loss	8.80	13.81	44.76
Festival Expenses	1.60	6.07	0.41
Freight Outward Charges.	5.53	4.74	3.44
Hotel, Boarding and Lodging Expenses	33.47	14.98	5.00
Loss on sale of car	-	-	0.84
Office Expenses	29.82	13.12	19.86
Office Rent	60.66	49.48	33.19
Postage & Courier Expenses	0.54	1.48	0.35
Printing and Stationery	2.44	0.84	1.25
Professional Fee	93.25	108.42	41.27
Repair & Maintenance	7.63	4.12	7.73
Software Service Charges	7.68	12.54	3.94
Statutory Fee	11.77	1.99	1.35
Staff Recruitment Expenses	-	1.62	1.49
Travelling and Conveyance (Domestic)	124.70	60.66	32.73
Travelling and Conveyance (Foreign)	35.33	62.98	26.00
Insurance	2.35	0.13	2.12
CSR Expenses	11.30	6.92	-
Telephone, Internet & Domain Charges	5.77	4.08	4.48
TOTAL	874.25	491.43	305.94

 

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

 

Fiscal 2025 compared with Fiscal 2024 Revenue from Operations

The Revenue from Operations of our company for Fiscal year 2025 was 12,422.95 Lakhs against 11,390.73 Lakhs for Fiscal year 2024. An increase of 9.06% in revenue from operations. This increase was due to the company received significant additional orders from its existing customers, reflecting their continued trust and satisfaction with our services. In addition, we were also able to onboard new customers during the year, which contributed to the incremental revenue. The combined effect of higher repeat business and new customer acquisition has resulted in the overall increase in turnover for FY 2024 25.

 

Other Income

The other income of our company for Fiscal year 2025 was 193.11 Lakhs against 100.05 for Fiscal year 2024. The increase of 93.01% in other income. This increase was due to higher interest earned on fixed deposits and balances written off.

 

Total Income

The total income of the company for Fiscal year 2025 was 12,616.06 Lakhs against 11,490.78 Lakhs of Total income for Fiscal year 2024 with an increase of 9.79% in total income. This increase was primarily due to significant additional orders received from existing customers. In addition, the company successfully onboarded new customers during the year, which contributed to incremental revenue. Furthermore, higher interest earned on fixed deposits and balances written off also supported the overall increase in total income.

 

Expenditure

Purchases

In Fiscal 2025, Purchases were 8,871.46 Lakhs against 9,282.62 Lakhs of Purchases in Fiscal 2024. A decrease of 4.43%. This decrease was due to due to the execution of certain high-margin projects, which enabled the company to achieve higher turnover with comparatively lower material consumption. Furthermore, the company received increased discounts and rebates from vendors during the year, reflecting stronger supplier relationships and effective negotiation of commercial terms.

In addition, better procurement planning, improved inventory management, and optimization of resources contributed to lowering the purchase requirement without impacting project execution. These initiatives ensured cost efficiency and supported the company’s strategy of focusing on profitability and sustainable growth.

 

Direct Expenses

In Fiscal 2025, the Company incurred Direct expenses of 0.64 Lakhs against 1.77 Lakhs of Direct expenses in fiscal 2024. A decrease of 63.84%. This decrease was due to Company’s conscious efforts to optimize resources to the maximum extent possible. Through effective cost-control measures, better allocation of manpower, and improved operational efficiency, the Company was able to reduce direct costs substantially, despite an increase in turnover and revenue during the year.

 

Changes in Inventories

In Fiscal 2025, the Changes in Inventories amounted to 134.74 Lakhs against (364.92) Lakhs of changes in inventories in fiscal 2024. Due to the variation is primarily on account of a decrease in the value of closing stock as on 31.03.25. This strategic approach ensured that resources were better utilized, and the decrease in closing stock value was aligned with the Company’s operational requirements and turnover growth during FY 2024 25.

 

Employee Benefit Expenses

In Fiscal 2025, the Company incurred employee benefit expenses of 1,121.01 Lakhs against 1,156.66 Lakhs expenses in Fiscal 2024. A decrease of 3.08%. This reduction was primarily on account of capitalization of certain manpower expenses under Intangible Assets (Work-in-Progress).

By allocating specific employee costs directly attributable to the development of intangible assets, the Company ensured proper accounting treatment in line with applicable standards. While overall manpower strength and operational requirements remained stable to support business growth, the capitalization of eligible expenses resulted in a lower charge under Employee Benefit Expenses for the year.

 

Finance Costs

The finance costs for the Fiscal 2025 were 202.16 Lakhs while it was 126.89 Lakhs for Fiscal 2024. An increase of 59.32 %. This increase was due to higher borrowings availed during the year to support increased business operations and working capital requirements.

 

Other Expenses

In Fiscal 2025, our other expenses were 874.25 Lakhs against 491.43 Lakhs in Fiscal 2024. An increase of 77.90%. This increase was due to the following reasons:

1. Higher Office Rent: Expansion of office facilities to support growing operations led to an increase in rental expenses.

2. Travelling & Conveyance: Additional travel and conveyance costs were incurred in connection with the execution of new projects and customer requirements.

3. Business Promotion: Increased expenditure on business promotion activities was undertaken to strengthen market presence and drive business growth.

These increases reflect the Company’s strategic focus on expansion, customer engagement, and positioning for long-term growth.

 

Profit before Tax

Our Company had reported a profit before tax for the Fiscal 2025 of 1,351.68 Lakhs against profit before tax of 773.07 Lakhs in Fiscal 2024. An increase of 74.85%. This increase was primarily driven by "the following factors:

1. Increase in Revenue from Operations: Higher turnover was achieved due to additional orders from existing customers as well as successful onboarding of new customers.

2. Increase in Other Income: Growth in other income was mainly contributed by higher interest earned on fixed deposits and balances written off.

3. Decrease in Purchases: Execution of high-margin projects, coupled with better vendor terms and rebates, led to a reduction in purchase costs despite growth in turnover.

4. Decrease in Employee Benefit Expenses: Capitalization of certain manpower costs under Intangible Assets (Work-in-Progress) resulted in lower employee expenses reported during the year.

The combined effect of revenue growth, enhanced other income, and effective cost optimization measures translated into a robust improvement in profitability for FY 2024 25.

 

Profit after Tax

Profit after tax for the Fiscal 2025 were at 975.65 Lakhs against profit after tax of 530.55 Lakhs in fiscal

2024, An Increase of 83.89%. This increase was primarily driven by increase in Profit Before Tax, as explained in the above paragraph.

Fiscal 2024 compared with Fiscal 2023

 

Revenue from Operations

The Revenue from Operations of our company for Fiscal year 2024 was 11,390.73 Lakhs against 7,276.27 Lakhs for Fiscal year 2023. An increase of 56.55% in revenue from operations. This increase was due to significant additional orders received from existing customers & onboarded several new customers during the year, which further contributed to incremental revenue.

 

Other Income

The other income of our company for Fiscal year 2024 was 100.05 Lakhs against 36.84 for Fiscal year 2023. The increase of 171.58% in other income. This increase was due to higher interest income from fixed deposits owing to larger deposit balances and better treasury management, along with additional rebates and discounts received from OEMs as a result of the Company’s improved business performance and stronger partnerships with OEMs.

 

Total Income

The total income of the company for Fiscal year 2024 was 11,490.78 Lakhs against 7,313.11 Lakhs of total income for Fiscal year 2023 with an increase of 57.13% in total income. This increase was primarily due to higher revenue from operations, supported by improved market demand and enhanced execution of orders along with increased interest income from fixed deposits and additional discounts received from OEMs.

 

Expenditure

 

Purchases

In Fiscal 2024, Purchases were 9,282.62 Lakhs against 5,872.55 Lakhs of Purchases in Fiscal 2023. An increase of 58.07%. This increase was due to corresponding increase in operational revenue during the year, which necessitated higher procurement of products and services to meet enhanced customer demand. The significant growth in orders from existing customers, along with the addition of new customers, resulted in increased project execution and, consequently, higher purchase requirements.

 

Direct Expenses

In Fiscal 2024, the Company incurred Direct expenses of 1.77 Lakhs against 2.17 Lakhs of Direct expenses in fiscal 2023. A decrease of 18.43%. This decrease was due to due to better allocation of manpower and improved operational efficiency.

 

Changes in Inventories

In Fiscal 2024, the Changes in Inventories amounted to (364.92) Lakhs against (133.61) Lakhs of changes in inventories in fiscal 2023 due to increase in the value of closing stock as on 31.03.2024. This higher closing stock was maintained to meet the requirements of upcoming projects and to support the new pipeline of business opportunities added during the year.

 

Employee Benefit Expenses

In Fiscal 2024, the Company incurred employee benefit expenses of 1,156.66 Lakhs against 646.08 Lakhs expenses in fiscal 2023. An increase of 79.03%. This increase was due to onboarding highly skilled resources to cater to the requirements of both new and existing priority customers and projects.

The expansion of manpower strength was undertaken to ensure timely execution of projects, enhance service delivery, and strengthen customer satisfaction. These strategic investments in talent acquisition reflect the

Company’s focus on building strong capabilities to support its growth trajectory and long-term business objectives.

 

Finance Costs

The finance costs for the Fiscal 2024 were 126.89 Lakhs while it was 100.02 Lakhs for Fiscal 2023. An increase of 26.86%. This increase was due to increase due higher borrowings availed during the year to support increased business operations and working capital requirements.

 

Other Expenses

In fiscal 2024, our other expenses were 491.43 Lakhs and 305.94 Lakhs in fiscal 2023. An increase of 60.63%. This increase was due to the following factors:

1. Car Lease Rentals: Higher car lease rental expenses incurred for key senior employees.

2. Office Expansion: Additional rental costs due to expansion of office facilities to support growing operations.

3. Professional Fees & Charges: Increase in professional consultancy fees and related charges to support business requirements.

4. Travelling & Conveyance: Higher domestic and foreign travel expenditure incurred in connection with project execution and customer engagements.

The overall increase in other expenses was aligned with the Company’s business expansion and operational growth initiatives undertaken during the year.

 

Profit before Tax

Our Company had reported a profit before tax for the Fiscal 2024 of 773.07 Lakhs against profit before tax of 502.62 Lakhs in Fiscal 2023. An increase of 53.81%. This increase was primarily due to the following factors:

1. Increase in Revenue from Operations Significant additional orders from existing customers along with onboarding of new customers, leading to strong revenue growth.

2. Higher Other Income Increase in income from interest on fixed deposits and other non-operational sources.

3. Operational Efficiency Better allocation of manpower and improved cost management, resulting in reduced direct expenses relative to turnover.

4. Strategic Investments in Manpower Though employee benefit expenses increased due to hiring of skilled resources, this was aligned with revenue growth and supported higher-margin project execution.

 

Profit after Tax

Profit after tax for the Fiscal 2024 were at 530.55 Lakhs against profit after tax of 505.63 Lakhs in fiscal 2023, An increase of 4.93%. This increase was primarily due to increase in Profit Before Tax, as explained in the above paragraph.

 

Cash Flows

Particulars	For the year ended March 31, 2025	For the year ended March 31, 2024	For the year ended March 31, 2023
Net Cash Flow from / (used in) Operating Activities	1,266.02	(1,444.42)	1,023.98
Net Cash Flow from / (used in) Investing Activities	(1,168.18)	(513.43)	4.47
Net Cash Flow from / (used in) Financing Activities	1,883.41	919.51	464.87

 

Cash Flows from Operating Activities

1. In Fiscal 2025, Net cash flow from operating activities was 1,266.02 Lakhs. This comprised of the net profit before tax of 1,351.68 Lakhs, which was primarily adjusted for Interest expense of 184.51 Lakhs, Gratuity provision of 44.38 Lakhs, Leave encashment of 40.36 Lakhs, Interest income of 62.86 Lakhs, Unspent liabilities and provisions written back of 130.17 Lakhs, and Depreciation and Amortisation expense of 60.12 Lakhs. The resultant operating profit before working capital changes was 1,488.02 Lakhs, which was primarily adjusted for an increase in Trade Receivables of 818.06 Lakhs, Loans and Advances of 130.11 Lakhs, and Other Assets (including other bank balances) of 77.50 Lakhs, along with a decrease in Inventories of 134.74 Lakhs. Additionally, there was an increase in Trade Payables of 787.93 Lakhs and in Other Current Liabilities & Provisions of 107.76 Lakhs.

Cash generated from operations was 1,492.78 Lakhs, which was reduced by Income Tax paid of 226.76 Lakhs, resulting in a net cashflow from operating activities of 1,266.02 Lakhs.

2. In Fiscal 2024, Net cash flow used in operating activities was (1,444.42) Lakhs. This comprised of the net profit before tax of 773.07 Lakhs, which was primarily adjusted for Interest expense of 110.86 Lakhs, Gratuity provision of 48.19 Lakhs, Interest income of 59.34 Lakhs, and Depreciation and Amortisation expense of 23.26 Lakhs. The resultant operating profit before working capital changes was 896.04 Lakhs, which was primarily adjusted for an increase in Trade Receivables of 1,761.21 Lakhs, Inventories of 364.92 Lakhs, and Other Assets (including other bank balances) of 605.73 Lakhs, along with a decrease in Loans and Advances of 253.85 Lakhs. Additionally, there was an increase in Trade Payables of 158.27 Lakhs and in Other Current Liabilities & Provisions of 230.02 Lakhs.

Cash generated from operations was (1,193.68) Lakhs, which was further reduced by Income Tax paid of 250.74 Lakhs, resulting in a net cashflow used in operating activities of (1,444.42) Lakhs.

3. In Fiscal 2023, Net cash flow from operating activities was 1,023.98 Lakhs. This comprised of the net profit before tax of 502.62 Lakhs, which was primarily adjusted for Interest expense of 91.62 Lakhs, Gratuity provision of 10.43 Lakhs, Interest income of 26.16 Lakhs, Unspent liabilities and provisions written back of 9.44 Lakhs, Loss on sale of assets of 0.84 Lakhs, and Depreciation and Amortisation expense of 17.34 Lakhs. The resultant operating profit before working capital changes was 587.25 Lakhs, which was primarily adjusted for a decrease in Trade Receivables of 485.39 Lakhs and in Other Assets (including other bank balances) of 96.30 Lakhs, an increase in Inventories of 133.61 Lakhs and in Loans and Advances of 180.21 Lakhs, an increase in Trade Payables of 262.40 Lakhs, and a decrease in Other Current Liabilities & Provisions of 16.18 Lakhs.

Cash generated from operations was 1,101.34 Lakhs, which was reduced by Income Tax paid of 77.36 Lakhs, resulting in a net cashflow from operating activities of 1,023.98 Lakhs.

 

Cash Flows from Investment Activities

1. For the year ended March 31, 2025, net cash used in investing activities was 1,168.18 Lakhs, which primarily comprised of cash outflow in Purchase of property, plant & equipment and intangible assets under development of 1,231.04 Lakhs and partly offset by cash inflow of 62.86 Lakhs from interest income received.

2. For the year ended March 31, 2024, net cash used in investing activities was 513.43 Lakhs, which primarily comprised of cash outflow in Purchase of property, plant & equipment and intangible assets under development of 568.33 Lakhs and partly offset by cash inflow of 54.90 Lakhs from interest income received.

3. For the year ended March 31, 2023, net cash generated from investing activities was 4.47 Lakhs, which primarily comprised of cash outflow in Purchase of property, plant & equipment and intangible assets under development of 23.03 Lakhs and partly offset by cash inflow of 18.50 Lakhs from interest income received and 9.00 Lakhs from Sale of property, plant & equipment.

 

Cash Flows from Financing Activities

1. For the year ended March 31, 2025, Net cash flow from financing activities was 1,883.41 Lakhs, which primarily comprised of proceeds from borrowings of 1,803.84 Lakhs and proceeds from issue of shares (net of issue expenses) of 556.73 Lakhs, partly offset by repayment of borrowings of 292.65 Lakhs and finance cost paid of 184.51 Lakhs.

2. For the year ended March 31, 2024, Net cash flow from financing activities was 919.51 Lakhs, which primarily comprised of proceeds from borrowings of 1,218.64 Lakhs, partly offset by repayment of borrowings of 188.27 Lakhs and finance cost paid of 110.86 Lakhs.

3. For the year ended March 31, 2023, Net cash flow from financing activities was 464.87 Lakhs, which primarily comprised of proceeds from issue of shares (net of issue expenses) of 669.81 Lakhs and proceeds from borrowings of 166.63 Lakhs, partly offset by repayment of borrowings of 279.95 Lakhs and finance cost paid of 91.62 Lakhs.

 

OTHER MATTERS

 

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, to our knowledge, 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.

 

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

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations’ and the uncertainties described in the section entitled "Risk Factors" beginning on page no. 34 of the Draft Red Herring Prospectus. To our knowledge, except as we have described in the Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

 

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

Apart from the risks as disclosed under Chapter titled "Risk Factors" beginning on page no. 34 in this 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, in case of events such as future increase in labour or material costs or prices that will cause a material change are known

Our Company’s future costs and revenues will be determined by demand/supply situation and government policies.

 

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

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

 

6. Total turnover of each major industry segment in which the issuer company operated.

Relevant Industry data and, as available, has been included in the chapter titled "Industry Overview" beginning on page no. 111 of this Draft Red Herring Prospectus.

 

7. The extent to which business is seasonal.

Our business is not seasonal in nature.

 

8. Any significant dependence on a single or few suppliers or customer

Our business is dependent on few clients and few technological partners which are covered under Chapter titled "Risk Factors" beginning on page no. 34 in this Draft Red Herring Prospectus.