Hexagon Nutrition Ltd Management Discussions

OPERATION

The following discussion is intended to convey the managements perspective on our financial condition and results of operations for Fiscals 2025, 2024 and 2023. Unless otherwise stated, the financial information in this section has been derived from the Restated Consolidated Financial Information.

Our financial year ends on March 31 of each year. Accordingly, references to “Fiscal 2025", “Fiscal 2024" and Fiscal 2023", are to the 12-month period ended March 31 of the relevant year.

Our Restated Consolidated Financial Information have been prepared in accordance with Ind AS, Section 26 of the Companies Act, the SEBIICDR Regulations and the Guidance Notes issued by ICAI. Ind AS differs in certain material respects from Indian GAAP, IFRS and U.S. GAAP. Accordingly, the degree to which our financial statements will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Ind AS. As a result, the Restated Consolidated Financial Information may not be comparable to our historical financial statements.

We have included various operational andfinancial performance indicators in this Draft Red Herring Prospectus, many of which may not be derivedfrom our Restated Consolidated Financial Information or otherwise be subject to an examination, audit or review by our auditors or any other expert. The manner in which such operational and financial performance indicators are calculated and presented and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions. Investors are accordingly cautioned against placing undue reliance on such information in making an investment decision and should consult their own advisors and evaluate such information in the context of the Restated Consolidated Financial Information and other information relating to our business and operations included in this Draft Red Herring Prospectus.

This Draft 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 forwardlooking statements as a result of various factors, including those described below and elsewhere in this Draft Red Herring Prospectus. For further information, see “Forward-Looking Statements" on page 27. Also read “Risk Factors" and “-Significant Factors Affecting our Results of Operations and Financial Condition " on pages 38 and 422 respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.

Unless the context otherwise requires, in this section, references to “we", “us", “our", “the Company" or “our Company" refers to Hexagon Nutrition Limited and our Subsidiaries on a consolidated basis.

Unless otherwise indicated, industry and market data used in this section has been derived from the report titled “Industry Report on Indian Nutrition and Wellness Industry " by CARE Analytics and Advisory Private Limited dated March 31, 2025 (CARE Report), which has been commissioned and paidfor by our Company in connection with the Offer. Unless otherwise indicated, all financial, operational, industry and other related information derived from the CARE Report and included herein with respect to any particular year, refers to such information for the relevant calendar year. CARE was appointed by our Company and is not connected to our Company, our Directors, our Promoters, our Key Managerial Personnel, Senior Management or BRLMs. A copy of the CARE Report is available on the website of our Company at www.hexasonutrition.com. For further information, see ‘Risk Factor - 46 - Certain sections of this Draft Red Herring Prospectus contain information from the CARE Report which we commissioned and purchased and any reliance on such information for making an investment decision in the Offer is subject to inherent risks. on page 76. Also see ‘Certain Conventions, Presentation of Financial, Industry and Market Data and Currency of Presentation on page 23.

OVERVIEW

We are a nutrition company offering a only holistic nutrition player that offers products across a whole range starting with micronutrient premixes, right up to therapeutic and clinical products (Source: CARE Report). We are also one of the largest premix players in India, offering customised vitamin and mineral premixes to leading Indian and multinational FMCG companies. It is also one of the largest licensed suppliers of Micronutrient Powders (MNPs) under UN programmes, supporting global food fortification and public health initiatives (Source: CARE Report). Our product portfolio addresses a broad spectrum of nutritional aspects such as fortification of foods, therapeutic nutrition, clinical nutrition and alleviation of malnutrition. We are a fully

integrated company engaged across the value entire chain, right from research and product development to manufacturing and marketing, with a focus on quality.

Key Operational and Financial Metrics

(Z in million expect otherwise specified)

Financial Metrics	As at and for the year ended
	March 31, 2025	March 31, 2024	March 31, 2023
Revenue From operations (? in Million)?	3,249.29	2,977.31	2,785.01
Total revenue (? in Million)	3,312.87	3,046.21	2,816.46
EBITDA (? in Million)?	400.72	248.77	171.74
EBITDA Margin (%)(d)	12.33%	8.36%	6.17%
Profit after tax (? in Million)	243.77	122.14	58.24
PAT Margin (%)?	7.36%	4.01%	2.07%
Return on Equity (ROE) (%)f	10.47%	7.21%	3.50%
Debt To Equity Ratio?	0.14	0.21	0.32
Interest Coverage Ratio?	9.54	5.70	3.82
Return on Capital Employed (ROCE) (%)(i)	17.06%	11.12%	5.94%
Current Ratio?	3.49	2.98	1.93
Net Working Capital Turnover Ratio?	2.48	2.51	2.59
Capacity Utilization (%)?	30.03%	29.53%	31.07%
Number of customers served(m	456	491	462
Number of repeated customers?	294	284	246
Revenue from top 10 customers?	1490.49	1453.69	1271.29
Branded nutrition products (B2C Segment segment)	920.94	710.65	626.99
wise Premix formulations Revenue (B2B2C segment)	1,546.95	1,333.13	1,527.99
RUFs/ MNPs (ESG	778.44	930.74	627.83

segment)

Notes:

a) As certified by Statutory Auditors of our Company by way of certificate dated September 23, 2025. The Audit committee in its resolution dated September 23, 2025 has confirmed that the Company has not disclosed any KPIs to any investors at any point of time during the three years preceding the date of this Draft Red Herring Prospectus other than as disclosed in this section.

b) Revenue from Operations means the Revenue from Operations as appearing in the Restated Consolidated Financial Statements.

c) EBITDA refers to earnings before interest, taxes, depreciation, amortization and gain or loss from discontinued operations. EBITDA excludes other income but includes reversal ofpro-vision of doubtful debts.

d) EBITDA Margin refers to EBITDA during a given period as a percentage of revenue from operations during that period.

e) PAT Margin quantifies our efficiency in generating profits from our revenue and is calculated by dividing our net profit after taxes but before other comprehensive income by our total revenue.

f) Return on equity (RoE) is equal to profit after tax excluding preference dividend for the year divided by the average shareholders equity as on reporting date and is expressed as a percentage.

g) Debt to equity ratio is calculated by dividing the total debt by shareholders equity.

h) Interest Coverage Ratio measures our ability to make interest payments from available earnings and is calculated by dividing EBIT by interest cost payment.

i) RoCE (Return on Capital Employed) (%) is calculated as profit before tax plus finance costs divided by total equity plus non-current liabilities and current liabilities.

j) Current Ratio is a liquidity ratio that measures our ability to pay short-term obligations (those which are due within one year) and is calculated by dividing the current assets by current liabilities.

k) Net Working Capital Turnover Ratio quantifies our effectiveness in utilizing our working capital and is calculated by dividing

our revenue from operations by our working capital (i.e., current assets less current liabilities).

l) Capacity Utilisation (%) is the percentage of installed production capacity actually used during the period.

m) Number of Customers Served indicates the total customers reached through the companys products or services in the period.

n) Number of repeated customers represents customers who have made repeat purchases during the reporting period, indicating recurring business.

o) Revenue generated from Top 10 customers of the company on consolidated basis.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Our business, results of operations and financial condition are affected by a number of factors, some of which are beyond our control. This section sets out certain key factors that we believe have affected our business, results of operations and financial condition in the past or which we expect will affect our business, results of operations or financial condition in the future. For a detailed discussion of certain factors that may adversely affect our business, results of operations and financial conditions, see “Riskfactors” beginning on page 38.

Cost and availability of raw materials.

We are focused on holistic nutritional products like branded nutrition products (B2C), premix formulation (B2B2C), ready to use foods and micro nutrient powder with in-house manufacturing and research and development. Some of the raw materials we require for production of our products includes but are not limited to Vitamin D2 40 MIU/GM pure crystals, Vitamin A Palmitate 1.7 MIU/gm, Folic Acid (Vitamin B9) Halal, Thiamine Mononitrate Halal, Palmolein oil and whey protein hydroslate (WPH). During the Fiscals 2025, 2024 and 2023, the cost of materials consumed, purchase of stock-in-trade and changes in inventories of finished goods and stock-in-progress aggregated to ? 1,805.29 million, ? 1,799.04 million and ? 1,681.56 million respectively and accounted for 54.51 %, 59.06% and 59.70% of our total income, respectively.

The availability and price of raw materials is subject to a number of factors beyond our control including overall climatic and economic conditions, production levels, supply demand and competition for such materials, production and transportation cost, taxes and duties, international relations between India and nations from which we source raw materials, labour costs, labour unrest and natural disasters. Interruption, or a prolonged shortage, in the supply of raw materials may result in our inability to operate our production facilities at optimal or required capacities, leading to a decline in production and sales. In addition, while competition for procuring raw material may result in an increase in raw material prices, our ability to pass on such increases in overall operational costs may be limited. Furthermore, any increase in the cost of raw materials which results in an increase in prices of our products, may reduce demand for our products and thereby affect our margins and profitability. Additionally, considering the shelf life of some of our raw materials, we are required to procure and warehouse such raw materials. However, if such warehoused raw materials get spoilt, and if we are unable to procure the required quantities in time, it will affect production levels, consequently impacting our results of operations and financial conditions.

Product mix

Our revenue and profit margins vary depending on our product mix. Our product offerings include a wide variety of products categorised under our 3 (three) segments i.e., branded nutrition products, premix formulations and ESG segment. The success of our business depends upon our ability to identify emerging market trends and offer differentiated product offerings to our customers. If we are unable to correctly identify market trends or if we are unable to increase production to the required levels, we may lose ground to our competitors, which could adversely affect our financial condition. As we continue to increase our focus on growing our business in India and globally, we expect the relative proportion of revenue contribution from sales of our high margin products to increase in the future. While we believe that we are well placed to capitalize on the growing consumer demand for health and wellness nutrition, if we are unable to maintain and/or expand our premium product range, in keeping with market trends and demands, we may lose market share to our competitors and that may adversely impact our results of operations.

Operating costs and efficiencies

Given the nature of our business, operating costs and efficiencies are critical to maintaining our competitiveness and profitability. Our profitability is partially dependent on our ability to spread fixed production costs over higher production volumes. We continually undertake efforts to reduce our costs, such as negotiating volume discounts, outsourcing non-critical processes like blending of lower margin premix formulations and rationalising our labour. Our ability to reduce our operating costs in line with customer demand is subject to risks and uncertainties, as our costs depend, in part, on external factors beyond our control. We also incur certain costs in order to ensure that the products that we supply to our customers are of high quality. Such costs relate to matters such as capital expenditure, testing and validation, systems deployment and rejection and re-working of products. Quality control is critical to our operations and a failure to adhere and maintain, our stringent quality standards, could result in us incurring significant liability.

Capacity Utilization

Our capacity utilization is dependent upon our ability to optimally manage our manufacturing facilities, which are subject to various operating risks, including those beyond our control, such as the breakdown and failure of equipment or industrial accidents, severe weather conditions and natural disasters. We have been working towards optimum capacity utilization and increasing operational efficiencies for our business. Further, we continuously strive to attain cost efficiency, enhanced productivity and product excellence through technological innovation and optimum deployment of resources. Strengthening internal processes, work flow and optimizing manpower utilization through multi-skills training are the key focus areas for us. For instance, our installed production capacity per month in two shift operation for premix including dry and oil premix, clinical nutrition and RUF/MNP are 877.50 MT, 110 MT and 739.65 MT, respectively at consolidated level. Our capacity utilisation in financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 is set out below.

Sr. Financial	Description	Dry	Liquid	MNP	RUF	Clinical
No Year		premix	Premix	(1 gm & 8		Nutrition
				gm)
	Installed capacity per month in Two shift	835.00	42.50	59.65	680.00	110.00
FY 20241 2025	operation (MT)
	Actual Production (MT)	259.20	7.96	5.99	193.88	51.71
	Capacity utilisation (%) Installed capacity per	31.04	18.72	10.04	28.51	47.01
	month in Two shift	835.00	42.50	59.65	680.00	110.00
FY 20232 2024	operation (MT)
	Actual Production (MT)	193.75	7.59	3.40	267.01	38.34
	Capacity utilisation (%)	23.20	17.87	5.70	39.27	34.85
	Installed capacity per month in Two shift	835.00	42.50	59.65	340.00	110.00
FY 20223 2023	operation (MT)
	Actual Production (MT)	191.82	6.96	14.15	184.33	33.67
	Capacity utilisation (%)	22.97	16.37	23.72	54.21	30.60

Any significant malfunction or breakdown of our machinery may entail repair and maintenance costs and cause delays in our operations. If we are unable to repair malfunctioning machinery in a timely manner or at all, our facilities may not be able to operate at desired utilization levels or our operations may be suspended until we procure machinery to replace the same. Moreover, 18 employees are affiliated with trade unions and any disruptions in work due to disputes with our work force could have a significant impact on our results of operation and financial condition.

Competition

International and domestic competition may adversely affect our business and results of operations. Some of our competitors may have greater financial, technical and managerial resources, greater access to raw materials and customers, better know-how and superior manufacturing facilities than we have. We are a pure-play research- oriented nutrition company and the only company that offers products across fortification, therapeutic and clinical nutrition products under one roof. We do not have a direct comparable, however, we do face competition from various domestic and multi-national companies across our Branded Nutrition Products (B2C) and Premix Formulations (B2B2C). Our competition is summarized below:

Clinical Nutrition and Abbott Healthcare Pvt Ltd., Modi Mundipharma Private Limited, Zydus Wellness

Wellness Nutrition Segment Limited, Nestle India Limited

Premix Segment Firmenich Aromatics Production (India) Private Limited, Sudeep Nutrition Private

Limited, P D Navkar Bio-Chem Private Limited, AQC Chem Lab Private Limited, Stern Ingredients India Private Limited, Nagase India Private Limited, Glanbia Performance Nutrition (India) Private Limited

ESG RUTF/RUSF Segment Nutrivita Foods Private Limited, Compact India Limited, Soma Nutrition Labs Private

Limited, Nuflower Foods and Nutrition Private Limited, Nutriset SAS

424

Brand reputation and goodwill

We believe that our brand plays a role in the success of our business and sustains customer loyalty. The ability to differentiate our brand and products from that of our competitors through our promotional, marketing and advertising initiatives is an important factor in attracting customers. There can be no assurance that our brand name will not be adversely affected in the future by actions that are beyond our control including customer complaints or adverse publicity from any other source in India and abroad. Any damage to our brand name, if not immediately and sufficiently remedied, could have an adverse effect on our reputation, competitive position in India and abroad, business, financial condition, results of operations and cash flows.

Any negative publicity, including as a result of adverse claims or public and/or defamatory statements relating to our food quality and/or service in any of our businesses would materially and adversely affect our brand, our reputation and our corporate image, or otherwise affect our ability to conduct our business in the ordinary course.

Maintaining and enhancing our brand image may also require us to undertake significant expenditures and make investments in areas such as innovation in our offerings, advertising and marketing, through media and other channels of publicity, and towards employee development and training. If our initiatives in any of these areas are not effectively implemented or our products fail to find acceptance with our existing and potential customers resulting in loss of customer confidence in our brand for any reason, our ability to attract and retain customers could be adversely affected.

SIGNIFICANT ACCOUNTING POLICIES

The notes to our Restated Consolidated Financial Information included those discussed in the section titled “Restated Consolidated Financial Information” on page 337 contain a summary of our significant accounting policies.

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS Income

Our total revenue comprises of Revenue from operations and Other income.

Revenue from operations

Revenue from operations includes sale of a wide variety of products under our 3 segments i.e., branded nutrition products, premix formulations, and RUFs and MNPs. Our revenue is generated through domestic sales in India and exports.

Other Income

Other income primarily comprises of interest income, applicable net gain/ (loss) on foreign exchange, profit on sale of investments, fair value of investments through P&L and miscellaneous income which comprises of insurance claim received, interest on Electricity Board deposit, scrap sales and sundry balance written back.

Expenses

Our expenses primarily comprise of cost of material consumed, purchase of stock-in-trade, changes in inventories of finished goods and work-in-progress, employee benefit expenses, finance costs, depreciation and amortisation expense and other expenses.

Cost of Materials Consumed

Cost of materials consumed comprises of difference in closing balance vis-a-vis opening balance of raw material Purchase of raw material and packing costs.

Purchase of stock-in-trade

The purchase of stock-in-trade comprises of purchase of primarily the Raw Material without any processing. Changes in inventories of finished goods and work-in-progress

Changes in inventories of finished goods, work-in-progress comprises of difference in closing balance vis-a-vis opening balance of finished goods and stock-in-trade.

Employee benefit expense

Employee benefit expenses comprises of salaries, wages and allowances, contribution towards provident fund and ESIC, gratuity and leave encashment, employee stock option scheme (ESOP), employee welfare, training and other amenities, employees food and beverage expenses.

Finance costs

Finance cost consists of interest on term loan, interest on working capital loan, lease obligation and other financial charges such as LC opening charges, foreign bank collection charges on customer collection, Working capital renewal charges etc.

Depreciation and Amortization Expense

Depreciation and amortization expense consists of depreciation on property, plant and equipment, plant and equipment at R&D facilities. Further it also consists of amortisation of right to use assets and amortisation of intangible assets.

Other Expenses

Our other expenses primarily comprises (A) manufacturing expenses which includes stores and spares consumed, power and fuel, repair to building, repairs to plant and machinery, repairs and maintenance - other, security charges, labour charges, testing analysis charges and other factory expenses (B) administrative and general overheads which majorly includes travelling expenses, legal and professional expenses, consultancy charges, insurance, rent, rates & taxes, vehicle expenses and other general administrative overheads and ( C ) selling and distribution overhead which majorly includes freight and forwarding expenses, sales promotion advertising and membership expenses, brokerage & commission and other sales overheads.

Tax expenses

Tax expense comprises of current tax, deferred tax and tax for earlier years. Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with applicable tax rates and the provisions of applicable tax laws. Deferred tax liability is recognized based on the difference between taxable profit and book profit due to the effect of timing differences.

RESULTS OF OPERATIONS

The following table provides certain information with respect to our results of operations for the Fiscal 2025, Fiscal 2024 and Fiscal 2023 from our Restated Consolidated Financial Information and each item as a percentage of total income for the periods indicated.

Particulars	For the year ended on
	March 31, 2025	% of Total Income	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income
Revenue from operation	3,249.29	98.08	2,977.31	97.74	2,785.01	98.88
Other income	63.58	1.92	68.90	2.26	31.45	1.12
Total Income	3,312.87	100.00	3,046.21	100.00	2,816.46	100.00

FISCAL 2025 COMPARED TO FISCAL 2024

Total Income

Our total income increased by 8.75% from ? 3,046.21 million in Fiscal 2024 to ? 3,312.87 million in Fiscal 2025,

primarily due to an increase in our revenue from operations.

Revenue from operations

Our Revenue from operations increased by 9.14% from ? 2,977.31 million in Fiscal 2024 to ? 3,249.29 million in

Fiscal 2025. This growth was primarily attributable to the following factors:

(i) An increase in domestic sale of products by 14.58% from ? 1,096.46 million in Fiscal 2024 to ? 1,256.28 million in Fiscal 2025 primarily due to improved demand in the domestic market driven by enhanced brand visibility, deeper market penetration, expansion in distribution channels and increase in reach through e-commerce platforms;

(ii) An increase in export sale of products by 5.96% from ? 1,878.06 million in Fiscal 2024 to ? 1,990.06 million in Fiscal 2025 primarily on account of sustained demand from our international customers and continued focus on strengthening our global presence; and

(iii) An increase in Export Benefits and Other Incentives from ? 2.79 million in Fiscal 2024 to ? 2.95 million in Fiscal 2025 primarily as a result of higher export turnover during the year, making us eligible for increased benefits under applicable government incentive schemes.

Particulars	For the year ended on
	March 31,	% of	March 31,	% of	March 31,	% of Total
	2025	Total	2024	Total	2023	Income
		Income		Income
Cost of material Consumed	1,580.03	47.69	1,378.99	45.27	1,813.85	64.40
Purchases of Stock-inTrade	74.48	2.25	334.34	10.98	81.65	2.90
Changes in inventories of Finished Goods and work -in- progress	150.78	4.55	85.71	2.81	(213.94)	(7.60)
Employee Benefits Expenses Finance Cost	419.07	12.65	396.91	13.03	411.46	14.61
	39.46	1.19	41.47	1.36	33.44	1.19
Depreciation and Amortisation Cost	87.68	2.65	81.18	2.66	75.51	2.68
Other Expenses	616.26	18.60	536.22	17.60	468.23	16.62
Total Expenses Profit Before	2,967.76	89.58	2,854.82	93.72	2,670.20	94.81
Exceptional Items and Tax	345.11	10.42	191.39	6.28	146.26	5.19
Loss / (Profit) on Sale of Plant and Equipment	(0.81)	(0.02)	0.17	0.01	0.23	0.01
Provision/(Reversal) for doubtful debts	8.76	0.26	(3.80)	(0.12)	15.86	0.56
IPO Related Expenses	0.00	0.00	0.00	0.00	35.93	1.28
Profit Before Tax	337.16	10.18	195.02	6.40	94.24	3.35
Tax Expenses	93.39	2.82	72.88	2.39	36.00	1.28
Current Tax	96.05	2.90	71.79	2.36	44.56	1.58
Deferred Tax Expense/(Credit)	(2.66)	(0.08)	1.09	0.04	(8.56)	(0.30)
Profit (Loss) for the Year	243.77	7.36	122.14	4.01	58.24	2.07

Other income

Our other income decreased by 7.72% from ? 68.90 million in Fiscal 2024 to ? 63.58 million in Fiscal 2025, primarily due to decrease in interest income from ? 7.25 million in Fiscal 2024 to ? 4.79 million in Fiscal 2025 primarily due to lower surplus funds kept in fixed deposits, consequent to deployment of funds towards operational and business requirements, decrease in miscellaneous income from ? 15.95 million in Fiscal 2024 to ? 12.09 million in Fiscal 2025 on account of reduced non-recurring income streams and decrease in Applicable Net Gain/(Loss) on Foreign Exchange from ? 29.96 million in Fiscal 2024 to ? 21.31 million in Fiscal 2025 due to reduced volatility in currency exchange rates and lesser favorable movement in exchange rates. These declines were partially offset by an increase in profit on sale of investments, which increased by ? 9.70 million in Fiscal 2025, due to optimized timing of liquidation of short-term investments in mutual funds and other marketable securities.

Cost of material consumed

The cost of material consumed increased by 14.58% from ? 1,378.99 million in Fiscal 2024 to ? 1,580.03 million in Fiscal 2025, and as a percentage of total income, it increased from 45.27% to 47.69%. This increase was primarily attributable to change in product mix, increase in input prices of certain key ingredients and an adverse currency movements which led to an overall increase in cost of material consumption as a percentage of total income.

Purchases of stock-in-trade

Purchases of stock-in-trade decreased significantly by 77.72% from ? 334.34 million in Fiscal 2024 to ? 74.48 million in Fiscal 2025, and as a percentage of total income, declined from 10.98% to 2.25%. This decrease was primarily due to reduction in high sea sales and purchase of raw material products and rationalization of low- margin traded product portfolio.

Changes in inventories of Finished Goods and work -in- progress

Changes in inventories of finished goods and work-in-progress increased from ? 85.71 million in Fiscal 2024 to ? 150.78 million in Fiscal 2025, and as a percentage of total income, from 2.81% to 4.55%. This represents a reduction in inventory levels of finished goods and work in progress on account of execution of higher dispatches & order fulfilment and optimised inventory management.

Employee Benefits Expenses

Employee benefit expenses increased by 5.58% from ? 396.91 million in Fiscal 2024 to ? 419.07 million in Fiscal 2025. The increase was primarily due to higher salaries, wages, and allowances, which rose from ? 362.02 million in Fiscal 2024 to ? 384.82 million in Fiscal 2025, on account of annual salary revisions, performance-based incentives, and an increase in headcount to support business expansion. Contributions towards Provident Fund and ESIC also increased from ? 11.47 million in Fiscal 2024 to ? 12.15 million in Fiscal 2025, in line with the rise in overall compensation costs. Gratuity expenses increased marginally from ? 10.34 million in Fiscal 2024 to ? 10.86 million in Fiscal 2025, reflecting actuarial valuation adjustments. Further, there was a reversal of provision for leave encashment amounting to ? 0.86 million in Fiscal 2025 as compared to an expense of ?3.65 million in Fiscal 2024, this was due to lower encashment claims, as the exit of high-value employees resulted in a reduced actuarial valuation for leave encashment. Additionally, expenses related to employee welfare, training, and other amenities, including food and beverages increased, reflecting the Companys continued focus on employee engagement and workplace benefits.

Finance Cost

Finance cost decreased marginally by 4.86% from ? 41.47 million in Fiscal 2024 to ? 39.46 million in Fiscal 2025. This reduction was primarily due to a decrease in interest on working capital borrowings, which declined from ? 18.68 million in Fiscal 2024 to ? 14.86 million in Fiscal 2025, as a result of better working capital management and lower average utilization of credit limits. Interest on term loans increased from ? 8.51 million in Fiscal 2024 to ? 10.73 million in Fiscal 2025, reflecting drawdown of additional long-term borrowings during the year. Interest

on lease obligations remained relatively stable, decreasing slightly from ? 1.78 million in Fiscal 2024 to ? 1.72 million in Fiscal 2025. Other financial charges decreased marginally from ? 12.50 million in Fiscal 2024 to ? 12.15 million in Fiscal 2025, in line with lower bank and processing charges. The overall decline in finance costs is reflective of improved capital efficiency and disciplined financial management.

Depreciation and Amortisation Cost

Depreciation and amortisation expense increased by 8.01% from ? 81.18 million in Fiscal 2024 to ? 87.68 million in Fiscal 2025. This increase was primarily driven by a higher depreciation charge on property, plant, and equipment, which rose from ? 77.86 million in Fiscal 2024 to ? 86.07 million in Fiscal 2024, due to capitalisation of new assets during the year in connection with capacity expansion and upgradation of manufacturing facilities. Amortisation of right-of-use assets decreased from ? 2.70 million in Fiscal 2024 to ? 1.24 million in Fiscal 2025. Amortisation of intangible assets decreased marginally from ? 0.62 million in Fiscal 2024 to ? 0.37 million in Fiscal 2025, owing to reduced carrying value of intangible assets. The overall increase in depreciation expense reflects continued investment in infrastructure to support operational growth.

Other Expenses

Other expenses increased by 14.93% from ? 536.22 million in Fiscal 2024 to ? 616.26 million in Fiscal 2025, primarily due to an increase across manufacturing, administrative and selling & distribution cost components in line with expanded operations.

Manufacturing expenses increased from ? 147.72 million in Fiscal 2024 to ? 153.83 million in Fiscal 2025, primarily on account of higher power and fuel expenses, which rose from ? 31.40 million in Fiscal 2024 to ? 35.85 million in Fiscal 2025, due to increased production activity. Labour charges also increased from ? 55.64 million in Fiscal 2024 to ? 64.42 million in Fiscal 2025, reflecting higher manpower deployment and wage adjustments in line with the scale of operations. Additionally, there was an increase in repairs and maintenance costs and other factory-related overheads, driven by routine upkeep and operational expansion.

Administrative and general expenses increased from ? 192.46 million in Fiscal 2024 to ? 211.58 million in Fiscal 2025, primarily due to a rise in consultancy charges, which grew from ? 32.86 million in Fiscal 2024 to ? 54.31 million in Fiscal 2025, owing to higher engagement of professional advisors and strategic consultants during the year. Travelling and conveyance expenses also increased from ? 44.25 million in Fiscal 2024 to ? 50.77 million in Fiscal 2025, in line with expanded business operations and greater employee mobility. The overall increase was further supported by higher electricity charges, increased spending on software, IT maintenance, and other general administrative expenses.

Selling and distribution expenses increased from ? 196.04 million in Fiscal 2024 to ?250.85 million in Fiscal 2025, primarily due to a rise in freight and forwarding charges from ? 83.16 million in Fiscal 2024 to ?110.00 million in Fiscal 2025, reflecting higher sales volumes and increased dispatches. Expenditure on sales promotion, advertising, and brand visibility also rose from ?50.12 million in Fiscal 2024 to ?65.44 million in Fiscal 2025, in line with the Companys continued focus on market expansion and brand-building initiatives. Additionally, brokerage and commission expenses increased from ?38.14 million in Fiscal 2024 to ?45.03 million in Fiscal 2025, corresponding with broader distribution reach and growth in sales turnover.

Profit Before Exceptional Items and Tax

Profit before exceptional items and tax increased by ? 153.72 million, or 80.32%, from ? 191.39 million in Fiscal 2024 to ? 345.11 million in Fiscal 2025. This was mainly due to higher revenue and controlled expenses.

Profit Before Tax

The exceptional items for Fiscal 2025 was ? 7.95 million as against ? (3.63) million in Fiscal 2024. As a result the PBT for Fiscal 2025 reduced to ? 337.16 million and increased to ? 195.02 million in Fiscal 2024.

Tax Expense

Total tax expense increased by ?20.51 million, or 28.14%, from ? 72.88 million in Fiscal 2024 to ?93.39 million

in Fiscal 2025. The increase was due to an increase in current tax by ? 24.26 million.

Profit (Loss) for the Year

For the various reasons discussed above, profit for the year increased by ? 121.63 million, or 99.58%, from ?122.14 million in Fiscal 2024 to ?243.77 million in Fiscal 2025. Profit after tax as a percentage of total income stood at 7.36% for Fiscal 2025, compared to 4.01% for Fiscal 2024. The increase in PAT margin can be attributed to the growth in business operations, while fixed costs remained constant.

FISCAL 2024 COMPARED TO FISCAL 2023

Total Income

Our total income increased by 8.16% from ? 2,816.46 million in Fiscal 2023 to ? 3,046.21 million in Fiscal 2024, due to an increase in our Revenue from operations and Other income.

Revenue from operations

Our Revenue from operations increased by 6.90% from ? 2,785.01 million in Fiscal 2023 to ? 2,977.31 million in Fiscal 2024. This growth was primarily attributable to the following factors:

(i) Decrease in domestic sale of products by 9.05% from ? 1,005.44 million in Fiscal 2023 to ? 1,096.46 million in Fiscal 2024 primarily due to sluggish market demand;

(ii) An increase in export sale of products by 5.67% from ? 1,777.37 million in Fiscal 2023 to ? 1,878.06 million in Fiscal 2024 primarily on account of expansion into new international markets and increased demand from existing overseas customers; and

(iii) An increase in Export Benefits and Other Incentives from ? 2.20 million in Fiscal 2023 to ? 2.79 million in Fiscal 2024 primarily as a result of higher export turnover during the year, making us eligible for increased benefits under applicable government incentive schemes.

Other income

Our other income increased by 119.08 % from ? 31.45 million in Fiscal 2023 to ? 68.90 million in Fiscal 2024, primarily due to increase in interest income from ? 4.91 million in Fiscal 2023 to ? 7.25 million in Fiscal 2024 primarily due to higher surplus funds , increase in miscellaneous income from ? 4.72 million in Fiscal 2023 to ? 15.95 million in Fiscal 2024 on account of increased non-recurring income streams, increase in Applicable Net Gain/(Loss) on Foreign Exchange from ? 12.52 million in Fiscal 2023 to ? 29.96 million in Fiscal 2024 due to favorable movement in exchange rates, increase in profit on sale of investments, which increased by ? 1.80 million in Fiscal 2024, due to optimized timing of liquidation of short-term investments in mutual funds and other marketable securities and increase in Fair Value of Investments Through P&L by ? 4.64 million in Fiscal 2024.

Cost of material consumed

The cost of material consumed decreased by 23.97% from ? 1,813.85 million in Fiscal 2023 to ? 1,378.99 million in Fiscal 2024, and as a percentage of total income, it decreased from 64.40% to 45.27%. This decrease was primarily attributable to change in product mix and decrease in purchase as a result of higher inventory at closing of Fiscal FY 2023.

Purchases of stock-in-trade

Purchases of stock-in-trade increased significantly by 309.48% from ? 81.65 million in Fiscal 2023 to ? 334.34 million in Fiscal 2024, and as a percentage of total income, increased from 2.90% to 10.98%. This increase was primarily due to procurement directly done on high seas basis for better margins.

Changes in inventories of Finished Goods and work -in- progress

Changes in inventories of finished goods and work-in-progress increased from ? (213.94) million in Fiscal 2023

to ? 85.71 million in Fiscal 2024, and as a percentage of total income, from (7.60) % to 2.81%. This represents a significant reduction in inventory levels on account of execution of higher dispatches & order fulfilment and optimised inventory management in Fiscal 2024.

Employee Benefits Expenses

Employee benefit expenses decreased by 3.54% from ? 411.46 million in Fiscal 2023 to ? 396.91 million in Fiscal 2024. The decrease was primarily due to decrease in salaries, wages, and allowances, which decreased from ? 373.40 million in Fiscal 2023 to ? 362.02 million in Fiscal 2024, on account of decrease in headcount. Contributions towards Provident Fund and ESIC also decreased from ? 13.37 million in Fiscal 2023 to ?11.47 million in Fiscal 2024, in line with the decrease in salary expenses. Gratuity expenses increased marginally from ? 9.45 million in Fiscal 2023 to ? 10.34 million in Fiscal 2024, reflecting actuarial valuation adjustments. Further, leave encashment increased marginally from ? 3.14 million in Fiscal 2023 to an expense of ?3.65 million in Fiscal 2024, due to increased encashment claims. Additionally, expenses related to employee welfare, training, and other amenities, including food and beverages, decreased, due to cost optimization measures undertaken by the Company.

Finance Cost

Finance cost increased by 24.01% from ? 33.44 million in Fiscal 2023 to ? 41.47 million in Fiscal 2024. This was primarily due to a increase in interest on working capital borrowings, which increased from ? 15.15 million in Fiscal 2023 to ? 18.68 million in Fiscal 2024, as a result of higher working capital and average utilization of credit limits. Interest on term loans increased from ? 4.78 million in Fiscal 2023 to ?8.51 million in Fiscal 2024, reflecting drawdown of additional long-term borrowings during the year. Interest on lease obligations remained relatively stable, increasing slightly from ? 1.73 million in Fiscal 2023 to ? 1.78 million in Fiscal 2024. Other financial charges increased marginally from ? 11.78 million in Fiscal 2023 to ? 12.50 milli on in Fiscal 2024, in line with higher bank and processing charges.

Depreciation and Amortisation Cost

Depreciation and amortisation expense increased by 7.51% from ? 75.51 million in Fiscal 2023 to ? 81.18 million in Fiscal 2024. This increase was primarily driven by a higher depreciation charge on property, plant, and equipment, which rose from ? 72.99 million in Fiscal 2023 to ? 77.86 million in Fiscal 2024, due to capitalisation of new assets during the year in connection with capacity expansion and upgradation of manufacturing facilities. Amortisation of right-of-use assets increased from ? 1.93 million in Fiscal 2023 to ? 2.70 million in Fiscal 2024, primarily due to additions in right-of-use assets. Amortisation of intangible assets increased marginally from ? 0.59 million to ? 0.62 million, owing to increased carrying value of intangible assets. The o verall increase in depreciation expense reflects continued investment in infrastructure to support operational growth.

Other Expenses

Other expenses increased by 14.52% from ? 468.23 million in Fiscal 2023 to ? 536.22 million in Fiscal 2024, primarily due to an increase across manufacturing, administrative and selling & distribution cost components in line with expanded operations.

Manufacturing expenses increased from ? 131.32 million in Fiscal 2023 to ? 147.72 million in Fiscal 2024, primarily on account of higher power and fuel expenses, which rose from ? 26.17 million to ? 31.40 million, due to increased production activity. Additionally, there was an increase in Repairs to Plant and Machinery by ? 7.05 million and an increase of ? 8.84 million in Testing & Analysis charges. Other factory -related overheads also increased, driven by routine upkeep and operational expansion.

Administrative and general expenses increased from ? 157.09 million in Fiscal 2023 to ? 192.46 million in Fiscal 2024, primarily due to a rise in consultancy charges, which grew from ? 16.17 million in Fiscal 2023 to ? 32.86 million in Fiscal 2024, owing to higher engagement of professional advisors and strategic consultants during the year. Legal & professional charges also increased from ? 19.39 million in Fiscal 2023 to ? 29.33 million in Fiscal 2024, in line with expanded business operations. The overall increase was further supported by increased spending on software, IT maintenance, increase in Bad debts and other general administrative expenses.

Selling & distribution expenses increased from ? 179.82 million in Fiscal 2023 to ? 196.04 million in Fiscal 2024, primarily due to a rise in sales promotion, advertising expenses & membership fees from ? 34.76 million in Fiscal 2023 to ? 50.12 million in Fiscal 2024, reflecting the Companys continued focus on market expansion and brandbuilding initiatives. Additionally, brokerage and commission expenses increased from ? 24.19 million in Fiscal 2023 to ? 38.14 million in Fiscal 2024, corresponding with broader distribution reach and growth in sales turnover.

Profit Before Exceptional Items and Tax

Profit before exceptional items and tax increased by ? 45.13 million, or 30.86%, from ?146.26 million in Fiscal 2023 to ?191.39 million in Fiscal 2024. This was mainly due to higher revenue and controlled expenses.

Profit Before Tax

The exceptional items for Fiscal 2024 was ? (3.63) million as against ? 52.02 million in Fiscal 2023. As a result the PBT for Fiscal 2023 reduced to ? 94.24 million in Fiscal 2023 and increased to ? 195.02 million in Fiscal 2024.

Tax Expense

Total tax expense increased by ? 36.88 million, or 102.44%, from ? 36.00 million in Fiscal 2023 to ?72.88 million in Fiscal 2024. The increase was due to an increase in current tax by ? 27.23 million and increase in deferred tax expense/(credit) by ? 9.65 million.

Profit (Loss) for the Year

For the various reasons discussed above, profit for the year increased by ? 63.90 million, or 109.72%, from ?58.24 million in Fiscal 2023 to ?122.14 million in Fiscal 2024. Profit after tax as a percentage of total income stood at 4.01% for Fiscal 2024, compared to 2.07% for Fiscal 2023. The increase in PAT margin can be attributed to the growth in business operations, while fixed costs remained constant.

Cash Flows

The following table sets forth certain information relating to our cash flows under Ind AS for the Fiscal 2025, Fiscal 2024 and Fiscal 2023:

Particulars	For the year ended	For the year ended	For the year ended
	March 31, 2025	March 31, 2024	March 31, 2023

 

Net Cash from Operating Activities	377.94	233.80	(0.01)
Net Cash from Investing Activities	(226.85)	37.13	(187.04)
Net Cash used in Financing Activities	(192.39)	(191.27)	69.86
Net increase/ (decrease) in cash and cash equivalents	(41.30)	79.66	(117.19)
Cash and Cash Equivalents at the beginning of the period	193.53	113.87	231.06
Cash and Cash Equivalents at the end of the period	152.23	193.53	113.87

Net cash generated from operating activities

Net cash generated from operating activities in the Fiscal 2025 was ? 377.94 million and our profit before tax that period was ? 337.16 million. The difference was primarily attributable to Depreciation of ? 87.68 million, Interest Income of ?(4.79) million, Interest paid of ? 39.46 million, Remeasurement of post employment benefit obligation of ? (0.80) million, Provision/(Reversal) for doubtful debts of ? (8.76) million, Provision for Bad Debts and Expected Credit Loss (ECL) of ?(2.51) million, Loss/(Gain) on Sale of Property, Plant and Equipments of ? (0.81) million and thereafter change in working capital of ? 39.97 million respectively, resulting in gross cash generated from operations at ? 470.77 million. We have income tax paid of ? 92.83 million.

Net cash generated from operating activities in the Fiscal 2024 was ? 233.80 million and our profit before tax that period was ? 195.02 million. The difference was primarily attributable to Depreciation of ? 81.18 million, Interest Income of ?(7.25) million, Interest paid of ? 41.47 million, Remeasurement of post employment benefit obligation of ? 3.10 million, Provision/(Reversal) for doubtful debts of ? 3.80 million, Provision for Bad Debts and Expected Credit Loss (ECL) of ?1.32 million, Loss/(Gain) on Sale of Property, Plant and Equipments of ? 0.17 million and thereafter change in working capital of ? (14.01) million respectively, resulting in gross cash generated from operations at ? 298.67 million. We have income tax paid of ? 64.87 million.

Net cash generated from operating activities in the Fiscal 2023 was ?(0.01) million and our profit before tax that period was ?94.24 million. The difference was primarily attributable to Depreciation of ?75.51 million, Interest Income of ?(4.91) million, Interest paid of ?33.44 million, Remeasurement of post employment benefit obligation of ? 3.63 million, Provision/(Reversal) for doubtful debts of ? (15.86) million, Provision for Bad Debts and Expected Credit Loss (ECL) of ?(2.15) million, Loss/(Gain) on Sale of Property, Plant and Equipments of ? 0.23 million, Employee Stock Option of ? 0.69 million and thereafter change in working capital of ? (139.70) million respectively, resulting in gross cash generated from operations at ? 40.79 million. We have income tax paid of ? 40.80 million.

Net cash generated from / (used in) Investing Activities

In the Fiscal 2025, our net cash used in investing activities was ? (226.85) million. This was primarily due to Increase in Purchases of Property, Plant and Equipment, Intangibles & Capital Work in Progress of ? (95.25) million, Redemption/(Investment) in current Mutual Funds of ? (133.83) million, Interest Income of ? 4.79 million, Investment in bank deposit of ? (2.56) million during the said year.

In the Fiscal 2024, our net cash generated from investing activities was ? 37.13 million. This was primarily due to Increase in Purchases of Property, Plant and Equipment, Intangibles & Capital Work in Progress of ? (149.93) million, Redemption/(Investment) in current Mutual Funds of ? 117.06 million, Interest Income of ? 7.25 million, Investment/(Redemption) in/of bank deposit of ? 62.75 million during the said year.

In the Fiscal 2023, our net cash used in investing activities was ? (187.04) million. This was primarily due to Increase in Purchases of Property, Plant and Equipment, Intangibles & Capital Work in Progress of ? (64.03) million, Redemption/(Investment) in current Mutual Funds of ? (68.42) million, Interest Income of ? 4.91 million, Investment in bank deposit of ? (59.50) million during the said year.

Net cash generated from / (used in) Financing Activities

In the Fiscal 2025, our net cash used in financing activities was ? (192.39) million. This was primarily due to Dividend paid of ? (50.00) million, (Repayment)/ Proceeds from Long-Term Borrowings of ? (13.52) million, (Repayment)/ Proceeds from Short-Term Borrowings of ? (89.41) million, Interest / Finance Charges of ? (39.46) million during the said year.

In the Fiscal 2024, our net cash used in financing activities was ? (191.27) million. This was primarily due to (Repayment)/ Proceeds from Long-Term Borrowings of ? 47.30 million, (Repayment)/ Proceeds from Short-Term Borrowings of ? (197.10) million, Interest / Finance Charges of ? (41.47) million during the said year.

In the Fiscal 2023, our net cash generated from financing activities was ? 69.86 million. This was primarily due to Dividend paid of ? (18.41) million, Proceeds from issue of Share Capital of ? 0.13 million, Share Premium Account of ? 2.47 million, (Repayment)/ Proceeds from Long-Term Borrowings of ? 4.52 million, (Repayment)/ Proceeds from Short-Term Borrowings of ? 114.59 million, Interest / Finance Charges of ? (33.44) million during the said year.

LIQUIDITY AND CAPITAL RESOURCES

We fund our operations primarily with cash flow from operating activities and borrowings / credit facilities from banks. Our primary use of funds has been to pay for our working capital requirements and capital expenditure and for the expansion of our manufacturing facilities. We evaluate our funding requirements regularly considering the cash flow from our operating activities and market conditions. In case our cash flows from operating activities do not generate sufficient cash flows, we may rely on other debt or equity financing activities, subject to market conditions.

The Group held cash and cash equivalents with credit worthy banks of ? 152.23 million as at 31 March 2025, ? 193.53 million as at 31 March 2024, ? 113.86 million as at 31 March 2023. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be good.

We have long term borrowings and long-term lease liability of ? 71.04 million and ? 19.80 million as of March 31, 2025 respectively and Short term borrowing and short term lease liability of ? 194.96 million and ? 1.48 million as of March 31, 2025 respectively as per restated consolidated financial information.

CONTINGENT LIABILITIES

As of period ended March 31, 2025, March 31, 2024, March 31, 2023 the estimated amount of contingent

liabilities are as follows:			(? in million)
Particulars	For the Year ended March 31, 2025	For the Year ended March 31, 2024	For the Year ended March 31, 2023
Contingent liabilities Capital Commitments (to	-	-	0.24
the extent not provided for)	6.88	29.01	40.74
Corporate Guarantee	788.50	748.00	756.29
Bank Guarantee	54.16	18.65	16.16
Statutory Dues	27.09	27.47	26.48
Total	876.63	823.13	839.91

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or which we believe reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, operating results, liquidity, capital expenditure or capital resources.

RELATED PARTY TRANSACTIONS

We enter into various transactions with related parties in the ordinary course of business. For further information relating to our related party transactions, see “Restated Consolidated Financial Information-Note-39-Related Party Transactions” on page 388.

RESERVATIONS, QUALIFICATIONS, ADVERSE REMARKS, EMPHASIS OF MATTERS AND OTHER MATTERS BY AUDITORS

There have been no reservations/qualifications/adverse remarks/emphasis of matters highlighted by our Statutory Auditors in their audit reports on the audited financial statements as of and for the years ended March 31, 2025, 2024 and 2023 except as stated below:

Period		Reservations, qualifications, adverse remarks or matters of emphasis	Companys response to reservations, qualifications, adverse remarks or matters of emphasis, including any corrective measures		Impact on the financial statements and financial position of the Company
Financial year ended March 31, 2025		Hexagon Nutrition Proprietary Limited (Subsidiary of the Company): Reservations: Nil Qualifications: Nil Adverse remarks: Nil Emphasis of Matters : We draw attention to Note 17 to the annual financial statements, which indicates that the company incurred a net	The Management is taking action for reviving of the business.		Not Applicable
Period	Reservations, qualifications, adverse remarks or matters of emphasis			Companys response to reservations, qualifications, adverse remarks or matters of emphasis, including any corrective measures	Impact on the financial statements and financial position of the Company
Financial year ended March 31, 2024	profit of Rand (“R”) 32,112 during the year ended March 31, 2025 and, as of that date, the companys total liabilities exceeded its total assets by R 7,244,638.The note states that these events or conditions, along with other matters as set forth in Note 17 to the annual financial statements, indicate that a material uncertainty exists that may cast significant doubt on the companys ability to continue as a going concern. Our opinion is not modified in respect of this matter. Hexagon Nutrition Proprietary Limited (Subsidiary of the Company): Reservations: Nil Qualifications: Nil Adverse remarks: Nil			The Management is taking action for reviving of the business.	Not Applicable
Financial year ended March 31, 2023	Emphasis of Matter : We draw attention to Note 18 to the annual financial statements, which indicates that the company incurred a net loss of R(2,252,336) during the year ended 31 March 2024 and, as of that date, the companys total liabilities exceeded its total assets by R7,267,750.The note states that these events or conditions, along with other matters as set forth in Note 18 to the annual financial statements, indicate that a material uncertainty exists that may cast significant doubt on the companys ability to continue as a going concern. Our opinion is not modified in respect of this matter. Hexagon Nutrition Proprietary Limited (Subsidiary of the Company ): Reservations: Nil Qualifications: Nil Adverse remarks: Nil			The Management is taking action for reviving of the business	Not Applicable
	Emphasis of Matter : We draw attention to Note 18 to the annual financial statements, which indicates that the company incurred a net loss of R(3,487,738) during the year ended 31 March 2023 and, as of that date, the companys total liabilities exceeded its total assets by R5,024,414.The note states that these events or conditions, along with other matters as set forth in Note 18 to the annual financial statements, indicate that a material uncertainty exists that may cast significant doubt on the companys ability to continue as a going concern. Our opinion is not modified in respect of this matter.