Himalaya Nutravedics India Ltd Management Discussions

*Rounded off to the closest decimal.

The total revenue, comprising both revenue from operations and other income, has risen to 4,312.03 lakhs in FY 2025-26, from 2,099.69 lakhs in FY 2024-25. This represents an increase of 105.37% for the said period, mainly driven by an increased sale of products by 105.86%.

The revenue from operations has increased to 4,306.75 lakhs in FY 2025-26, from 2,099.65 lakhs in FY 2024-25. This represents an increase of 105.12% for the said period which is primarily consist increase in sales expansion of customer base and higher utilisation capacities. This growth is driven by a significant demand of Softgel Capsules and medicated oils by 109.68% and 127.92% respectively.

The Company witnessed significant traction in its manufacturing and marketing operations due to increased demand from existing customers as well as onboarding of new customers across various geographical regions. The growing acceptance of the Companys products in the nutraceutical and Ayurvedic segments also contributed positively to sales growth.

Further, the Company expanded its product reach and strengthened its distribution network, resulting in improved order inflows and repeat business from institutional and trade customers. Higher production efficiency and better operational utilisation enabled the Company to cater to the increased demand effectively without major operational constraints.

The other income of the company for FY 2025-26 increased to 5.28 Lakhs as against 0.04 Lakhs in FY 2024-25 i.e. Other Income increased significantly. This was mainly due to increase in Interest Income.

The total expenses for the FY 2025-26 were increased to 3,563.90 Lakhs from 1,874.86 Lakhs in FY 2024-25 i.e., total expenses increased by 90.09%. The reasons for change are discussed below:

Cost of Material Consumed and Purchases of Goods

The total cost of material consumed have increased to 2,590.72 lakhs in FY 2025-26 from 1,376.04 lakhs in FY 2024-25 i.e. the above expense increased by 88.27%. The total expenses in material consumed increased in absolute figures due to increase in scale of operations during the fiscal year primarily contributed by increase in purchase cost by 117.07% and increase in packaging cost by 465.94%.

The growth in revenue and increased demand for the Companys products, particularly Softgel Capsules and

Medicated Oils, resulted in higher procurement of raw materials and packaging materials to support manufacturing requirements. Purchase cost increased by 117.07%, mainly due to higher production activity, increased sales volumes, and procurement of a larger quantity of raw materials.

Further, packaging material expenses increased by 465.94%, primarily on account of increased sales volumes, expansion in product offerings, higher utilisation of branded packaging components, and enhanced focus on product presentation and compliance-related packaging requirements. The increase in packaging cost was also supported by the Companys growing presence across new geographical markets and customer segments.

Change in Inventories of Finished Goods & WIP

There was net increase in inventories of Finished Goods & WIP of 15.45 Lakhs for FY 2025-26 against net decrease of 79.44 Lakhs in FY 2024-25. This change is mainly due to the increase in production and operational activities during the year, resulting in a higher level of finished goods and WIP at the end of the FY 2025-2026. The company maintained higher inventory levels to support growing business operations and future sales demand.

In line with the substantial growth in revenue and demand for the Companys products, the Company maintained higher levels of finished goods and WIP inventory to ensure uninterrupted supply, timely execution of orders, and efficient servicing of customers across various regions. The increase in inventory levels was also necessary to support the expanded product portfolio and growing business operations.

Further, higher closing inventory levels reflect the Companys strategic approach towards maintaining adequate stock availability to meet anticipated future demand and support continued business growth.

The Employee Benefit Expenses for the FY 2025-26 was decreased to 276.44 Lakhs from 293.51 Lakhs for the FY 2024-25 i.e., employee benefit expenses decreased by 5.82%. This decrease was mainly due to rationalisation of employee strength to enhance operational efficiency.

The Finance Cost for the FY 2025-26 was increased to 34.95 Lakhs from 31.89 Lakhs for the FY 2024- 25 i.e., expenses increased by 9.61% due to increase in Interest Expense as working capital loan increase from 24.19 lakhs in FY 2024-25 to 32.81 lakhs in FY 2025-26.

The Depreciation and amortization expense for FY 2025-26 was 32.54 Lakh, whereas in FY 2024-25, it was

42.34 Lakhs i.e., decreased by 23.14% which is primarily due to decrease in depreciation of tangible and intangible assets in line with the previous Fiscal.

Other Expenses increased to 613.80 Lakhs for FY 2025-26 from 210.53 Lakh for FY 2024-25, showing an increase of 191.55% mainly due to increase in Rent, Technical/Legal/Prof/Consultancy Charges, Marketing Expenses, Commission Expenses.

The increase in expenses was mainly driven by higher Rent expenses due to expansion of operational infrastructure and facilities to support increased production and business activities. Further, Technical, Legal, Professional and Consultancy Charges increased on account of advisory, compliance, regulatory, business development, and strategic expansion-related activities undertaken during the year.

Marketing Expenses and Commission Expenses also witnessed substantial growth owing to increased promotional activities, expansion into new geographical markets, strengthening of distribution channels, and higher sales generation efforts undertaken by the Company. The increase in these expenses was aligned with the

Companys strategy to scale operations, enhance market presence, and support the significant growth in revenue during the year.

The restated Profit before Tax for FY 2025-26 was increased to 748.13 Lakhs as against 224.83 Lakhs in FY 2024-25 i.e., profit before tax increased by 232.75%. This increase was mainly due to increase in revenue.

Total Tax Expenses

The total tax expense for FY 2025-26 increased to 9.16 Lakhs as against 1.65 Lakhs in the FY 2024-25. This increase was mainly due to increase in restated Profit Before tax from 224.83 Lakhs in FY 2024-2025 to

748.13 Lakhs in FY 2025-2026.

The restated Profit after Tax for FY 2025-24 increased to 738.97 Lakhs as against 223.18 Lakhs in the FY 2024-25. This increase was mainly due to increase in Profit before Tax and Taxation Benefits.

The total revenue, comprising both revenue from operations and other income, has risen to 2,099.69 lakhs in

FY 2024-25, from 1,442,88 lakhs in FY 2023-24. This represents an increase of 45.52% for the said period, mainly driven by an increased penetration in south Indian states.

The revenue from operations has increased to 2,099.65 lakhs in FY 2024-25, from 1,442.56 lakhs in FY 2023-24. This represents an increase of 45.55% for the said period which is primarily consist of domestic sales. This growth is driven by a significant demand of Softgel Capsules and Medicated Oils and addition of new customers resulted into higher revenue in the fiscal year 2024-25.

The increase in revenue was primarily driven by growth in domestic business operations and improved sales performance across key product categories. The Company witnessed higher demand for Softgel Capsules and Medicated Oils during the year, supported by addition of new customers and strengthening relationships with existing customers. Further, increased market penetration, broader customer reach, and improved order volumes contributed to the overall growth in revenue from operations during FY 2024-25.

The other income of the company for FY 2024-25 decreased to 0.04 Lakhs as against 0.32 Lakhs (in FY 2023-24 i.e. Other Income decreased by 87.50%. This was mainly due to decrease in Other Non-Operating Income.

The total expenses for the FY 2024-25 were increased to 1,874.86 Lakhs from 1,383.43 Lakhs in FY 2023-24 i.e., total expenses increased by 35.52%. The reasons for change are discussed below:

Cost of Material Consumed and Purchases of Goods

The total cost of material consumed have increased to 1,376.04 lakhs in FY 2024-25 from 904.22 lakhs in FY

2023-24 i.e. the above expense increased by 52.18%. The total expenses in material consumed increased in absolute figures due to increase in scale of operations during the fiscal year. The Company experienced higher utilisation of production capacity owing to increased demand for its products, which resulted in greater consumption of input materials. The rise in material consumption expenses was therefore in line with the expansion of business operations and growth in revenue during FY 2024-25.

Change in Inventories -of Finished Goods & WIP

The inventories of Finished Goods & WIP increased by 79.44 Lakhs for FY 2024-25 against increase of 57.55

Lakhs in FY 2023-24. This change is mainly due to the increase in production and operational activities during the year, resulting in a higher level of finished goods and WIP at the end of the FY 2024-2025. The Company maintained adequate inventory levels of finished goods and WIP to support smooth business operations, ensure timely delivery of products, and meet anticipated sales requirements. The increase also reflects the Companys operational growth and expanded manufacturing activities during FY 2024-25.

The Employee Benefit Expenses for the FY 2024-25 was decreased to 293.51 Lakhs from 302.36 Lakhs for the FY 2023-24 i.e., employee benefit expenses decreased by 2.93%. This decrease was mainly due to rationalisation of employee strength to enhance operational efficiency.

The Finance Cost for the FY 2024-25 was increased to 31.89 Lakhs from 18.37 Lakhs for the FY 2023- 24 i.e., expenses increased by 73.62% due to increase in Interest Expense as working capital loan increase from 98.33 lakhs in FY 2023-24 to 113.51 lakhs in FY 2024-25.

The Depreciation and amortization expense for FY 2024-25 was 42.34 Lakh, whereas in FY 2023-24, it was 16.04 Lakhs i.e., increased by 163.97% which is primarily due to purchase of Fixed Assets.

Other Expenses increased to 210.53 Lakhs for FY 2024-25 from 199.99 Lakh for FY 2023-24, showing an increase of 5.27% mainly due to increase in Rent, Technical/Legal/Prof/Consultancy Charges, Marketing Expenses, Commission Expenses.

The restated Profit before Tax for FY 2024-25 was increased to 224.83 Lakhs as against 59.46 Lakhs in FY

2023-24 i.e., profit before tax increased by 278.12%. This increase was mainly due to increase in revenue.

The total tax expense for FY 2024-25 decreased to 1.65 Lakhs as against 16.85 Lakhs in the FY 2023-24. This decrease was mainly due to opting Section 80IAC of Income Tax Act, 1961 making it eligible to claim benefit of 100% tax exemption on profits for eligible startups in India.

The restated Profit after Tax for FY 2024-25 increased to 223.18 Lakhs as against 42.60 Lakhs in the FY

2023-24. This increase was mainly due to increase in Profit before Tax and Taxation Benefits.

The table below summarizes our cash flows from our restated for financial years ended March 31, 2026, March 31, 2025 and March 31, 2024:

Operating Activities

- In Financial Year 2025-26, Net cash used in operating activities was 383.44 Lakhs. This comprised of the profit before tax of 748.13 Lakhs, which was majorly adjusted for depreciation and amortization expenses of 32.54 Lakhs, finance cost of 34.95 Lakhs. The resultant operating profit before working capital changes was 810.94 Lakhs, which was again adjusted for changes in working capital requirements.

- In Financial Year 2024-25, Net cash used in operating activities was 139.11 Lakhs. This comprised of the profit before tax of 224.83 Lakhs, which was majorly adjusted for depreciation and amortization expenses of 42.34 Lakhs, finance cost of 31.89 Lakhs. The resultant operating profit before working capital changes was 299.05 Lakhs, which was again adjusted for changes in working capital requirements.

- In Financial Year 2023-24, Net cash used in operating activities was 55.10 Lakhs. This comprised of the profit before tax of 59.46 Lakhs, which was majorly adjusted for depreciation and amortization expenses of 16.04 Lakhs, finance cost of 18.37 Lakhs. The resultant operating profit before working capital changes was 93.87 Lakhs, which was again adjusted for changes in working capital requirements.

- In Financial Year 2025-26, Net cash used in Investing activities was 5.79 Lakhs which primarily comprised of cash used for the purchase of property, plant and equipment of 6.98 Lakhs, Net of Purchase of Investments of 3.50 Lakhs and Interest and Dividend Received of 4.69 Lakhs.

- In Financial Year 2024-25, Net cash used in Investing activities was 22.60 Lakhs which primarily comprised of cash used for the purchase of property, plant and equipment of 21.10 Lakhs and Net of Purchase of Investments of 1.50 Lakhs.

- In Financial Year 2023-24, Net cash used in Investing activities was 109.80 Lakhs which primarily comprised of cash used for the purchase of property, plant and equipment of 107.96 Lakhs and Net of Purchase of Investments of 1.84 Lakhs.

- In Financial Year 2025-26, Net cash generated from financing activities was 527.05 Lakhs, which predominantly was on account of decrease in Short term Loans and Advances of 1.37 Lakhs, Proceeds from Short Term Borrowings of 391.23 Lakhs, Repayment of Long Term Borrowings of 54.00 Lakhs and payment of finance charges of 34.95 Lakhs.

- In Financial Year 2024-25, Net cash generated from financing activities was 143.88 Lakhs, which predominantly was on account of decrease in Short term Loans and Advances of 6.34 Lakhs, Repayment of Short Term Borrowings of 139.13 Lakhs, Repayment of Long Term Borrowings of 8.44 Lakhs and payment of finance charges of 31.89 Lakhs.

- In Financial Year 2023-24, Net cash generated from financing activities was 184.24 Lakhs, which predominantly was on account of decrease in Short term Loans and Advances of 11.26 Lakhs, Proceeds from Short Term Borrowings of 128.92 Lakhs, Proceeds from Long Term Borrowings of 62.43 Lakhs and payment of finance charges of 18.37 Lakhs.

For further information, please refer "Annexure 29 - Related Party Transaction" under section "Restated Financial Statement" beginning from page no. 231 of this Draft Red Herring Prospectus.

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

We are currently exposed interest to rate risks to the extent of outstanding loans. However, any rise in future borrowings may increase the risk.

We are affected by inflation as it has an impact on operating cost, staff costs etc. In line with changing inflation rates, we rework our margins so as to absorb the inflationary impact.

1. Unusual or infrequent events or transactions

Except as described in this Draft Red Herring Prospectus, there have been no other events or transactions to the best of our knowledge which may be described as "unusual" or "infrequent".

2. Significant economic changes that materially affected or are likely to affect income from continuing operations. Our business has been subject to economic changes, 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. 26 of the Prospectus. To our knowledge, except as we have described in the 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 sales, revenue or income from continuing operations.

Apart from the risks as disclosed under the Section titled "Risk Factors" beginning on page no. 26 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 the relationship between costs and revenues, in case of events such as a future increase in labour or material costs or prices that will cause a material change, are known.

Our Companys future costs and revenues will be determined by the demand/supply situation, government policies and other economic factor.

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.

Other than as disclosed in this section and in "Business Overview" on page no. 164. We have not announced and do not expect to announce in the near future any new business segments.

6. Segment Reporting.

Our business activity primarily falls within a single business and geographical segment, other than as disclosed in "Restated Financial Statement" on page no. 231 we do not follow any other segment reporting.

7. Status of any publicly announced new products or business segments.

Except as disclosed in the Chapter "Business Overview", on page no. 164, our Company has not announced any new product or service.

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

We face competition from existing and potential competitors which is common for any business. We have, over a period, developed certain competitors who have been discussed in section titles "Business Overview" beginning on 164.