OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
You should read the following discussion in conjunction with our Restated Consolidated Financial Information included herein for the Fiscal 2025, 2024 and 2023, including the related notes, schedules and annexures on page 227. Our Restated Consolidated Financial Information has been prepared in accordance with Ind AS, Section 26 of the Companies Act, the SEBI ICDR Regulations and the Guidance Note. 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 and financial performance indicators in this Draft Red Herring Prospectus, many of which may not be derived from 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 discussion and analysis contain forward-looking statements that reflect our current views with respect to future events and our financial performance, which are subject to numerous risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements.
You should also read "Forward-Looking Statements" and "Risk Factors" on pages 22 and 32, respectively, which discuss a number of factors and contingencies that could affect our business, financial condition and results of operations. Our Financial Year ends on March 31 of each year and accordingly, references to Financial Year, are to the 12-month period ended March 31 of the relevant year and for the six-month period of April to September
2024 .Unless the context otherwise requires, in this section, references to "we", "us", "our", "the Company" or "our Company" refers to HY-Tech Engineers Limited.
Unless otherwise indicated, industry and market data used in this section has been derived from industry publications, in particular, the report titled "Industry Research Report on Hydraulic Fittings Industry" dated September 2025 ("CARE Report"), prepared and issued by CARE Analytics and Advisory Private Limited
("CARE") and exclusively commissioned and paid for by us in connection with the Offer. Unless otherwise indicated, 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. For more information, see "Risk Factor 36 Certain sections of this Draft Red Herring Prospectus disclose information from the CARE Report which has been prepared exclusively for the Offer and commissioned by our Company and paid for by our Company exclusively in connection with the Offer, and any reliance on such information for making an investment decision in the Offer is subject to inherent risks." on page 56. Also see, "Currency Conventions, Currency of Presentation, Use of Financial Information, Industry and Market Data" on page 19.
Overview
For details in relation to our business overview, competitive strengths, business strategies and business operations, please see "Our Business" beginning on page 177.
Significant Factors Affecting Our Financial Conditions and Results of Operations
Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" beginning on page 32 of this Draft Red Herring Prospectus. The following is a discussion of certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations.
Revenue Mix Across Geographies and Customer Segments
Our financial performance is also influenced by the composition of our revenue across geographies and customer categories. We derive revenues from both domestic and international markets, with exports contributing approximately 28.30% and domestic sales contributing 71.71% of our revenue in Fiscal 2025. Similarly, sales to direct customers including OEMs constitute approximately 88.61% of our total revenue in Fiscal 2025, while the balance is derived from distributors. Variations in this mix can influence our realisations, working capital cycle, and margin profile. Export contracts may carry higher margins but are subject to currency risk and stricter delivery and quality compliance. On the other hand, domestic sales may offer lower logistics costs and faster turnaround. Shifts in this composition due to global demand, geopolitical changes, or customer diversification can have a bearing on our operating metrics and risk profile.
Sectoral Demand Cycles and Customer Industry Performance
We derive a significant share of our revenue from supplying engineered components, primarily hydraulic fittings and assemblies, to OEMs and distributors catering to construction equipment, earthmoving machinery, agricultural machinery, and industrial hydraulics sectors. Consequently, our performance is closely linked to the investment and replacement cycles, regulatory frameworks, and infrastructure outlays in these industries. A slowdown in capital expenditure or equipment demand in these sectors due to economic downturns, regulatory constraints, or global supply chain disruptions could adversely impact order volumes, plant utilisation, and revenue visibility.
Dependency on Key Customers
Our business model is built on longstanding, relationship-driven contracts with select domestic and international customers. For Fiscal 2025, approximately 26.00% of our revenues were attributable to our top five customers. While this enables operational stability and backward integration, it also exposes us to concentration risk. A loss of business from any of these customers due to insourcing strategies, cost rationalisation, change in vendor qualification norms, or shift in component design could materially affect our revenue and profitability. Expanding our customer base, product applications, and end-user industries remains a key strategic priority.
Input Cost Volatility and Raw Material Procurement
Raw materials, primarily black steel and mild steel, constitute a significant portion of our cost of production. We also use small quantities of other metals such as brass, though their contribution is not material. Prices of these inputs are subject to fluctuations driven by global supply-demand dynamics, trade policies, and currency movements. While we typically include price variation clauses in our customer contracts, negotiation lags or limited pass-throughs particularly in export agreements may occur. As a result, input price volatility can impact our gross margins and working capital requirements.
We generate a material portion of our revenues from exports to global OEMs and distributors in Europe and North America, denominated primarily in USD and EUR. Adverse fluctuations in currency exchange rates may impact our receivables, pricing competitiveness, and overall profitability. As we do not engage in active hedging or offsetting imports, our foreign currency exposure remains unhedged, making our margins susceptible to volatility in exchange rates. Accordingly, effective management of forex risk remains important to preserve profitability.
Operational Efficiency and Capacity Utilisation
Our operating leverage and cost structure are directly influenced by the level of capacity utilisation across our Manufacturing Facilities located in Maharashtra and Madhya Pradesh. Sub-optimal utilisation due to unanticipated demand variations, machine breakdowns, unplanned maintenance or shift inefficiencies can lead to under-absorption of fixed overheads and impact our EBITDA margins. We continue to invest in lean manufacturing initiatives, production line balancing, and preventive maintenance protocols to drive throughput and yield optimisation.
Execution of Capital Expenditure Plans
As part of our growth strategy, we have undertaken capital expenditure towards enhancing automation, increasing machining capacity, and integrating testing infrastructure to meet higher precision and quality standards. Timely implementation and commissioning of these investments are critical to avoiding cost overruns, bottlenecks, and delayed customer qualification. Our ability to manage these investments efficiently impacts not only future revenue scalability but also working capital deployment and asset turnover.
Compliance with Government Regulations and Industry Standards
Our business is subject to various regulatory requirements under environmental, labour, industrial safety, and export-import laws. In addition, we must adhere to stringent customer audit requirements, particularly for overseas accounts, including quality certifications (such as ISO/TS standards) and traceability norms. Any lapse in compliance, delay in statutory approvals (such as CTO/CTE under pollution control norms), or changes in regulatory framework (such as duties, labour codes, or emission standards) may increase our compliance costs or result in disruptions to operations or customer relationships.
Exposure to Uncertain Tariff Structures in Key Export Markets
Our business has material exposure to export markets, particularly to OEMs and distributors in North America and Europe. The tariff and trade policy regimes in these jurisdictions are subject to periodic changes driven by geopolitical developments, bilateral trade negotiations, and domestic policy shifts. Such changes may include the imposition of new or higher import duties, withdrawal of preferential trade access, or the introduction of non-tariff barriers such as technical compliance norms or documentation requirements.
Any adverse change in tariff structures or import policies whether specific to our product categories or part of broader trade measures may affect the price competitiveness of our exports, impact customer ordering patterns, and exert pressure on our margins. Since such changes are largely beyond our control and may be introduced with limited advance notice, they pose an inherent risk to our pricing strategy and volume commitments.
We continuously monitor trade developments through industry networks and customer feedback, but remain exposed to the unpredictability of tariff regimes, which could materially impact our export performance and overall financial results.
Non-GAAP Measures
In evaluating our business, we consider and use certain non-GAAP financial measures and statistical information, which are not required by, or presented in accordance with, Ind AS or any other generally accepted accounting principles. These non-GAAP financial measures and statistical information are not a measurement of our financial performance or liquidity under Ind AS or any other generally accepted accounting principles and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the year or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS or any other generally accepted accounting principles. We compute and disclose such non-GAAP financial measures and statistical information as we consider such information to be useful measures of our business and financial performance, and because such measures are frequently used by securities analysts, investors and others to evaluate the operational performance of companies such as us. These non-GAAP financial measures and other statistical information may not be computed on the basis of any standard methodology that is applicable across the industry and, therefore, may not be comparable to financial measures and statistical information of similar nomenclature that may be computed and presented by other companies.
Certain of our non-GAAP financial measures and statistical information (referred to as KPIs) are disclosed in
" Basis for Offer Price Key Performance Indicators (KPIs)" on page 123.
Significant Accounting Policies
3.1. Current and non-current classification
The Group classifies its assets and liabilities in the Restated Consolidated Statement of Assets and Liabilities as current or non-current based on their nature. An asset is treated as current if it meets any of the following criteria:
Expected to be realised or intended to be sold or consumed in normal operating cycle.
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period, or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
A liability is classified as current if it:
It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Group classifies all other assets and liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities, respectively.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle.
3.2. Functional and presentation of currency
The Restated Consolidated Financial Information are presented in Indian Rupees ( ), which is the Groups functional and presentation currency. All amounts have been rounded to the nearest million with two decimals, unless otherwise indicated.
3.3. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs
All assets and liabilities for which fair value is measured or disclosed are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:
Level 1: Unadjusted quoted price in active markets for identical assets and liabilities. Level 2: Inputs other than quoted prices that are observable for the asset or liability. Level 3: Unobservable inputs for the asset or liability.
For assets and liabilities that are recognised in the Restated Consolidated Statement of Asset and Liabilities at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy.
Fair values have been determined for measurement and / or disclosure purpose using methods as prescribed in
"Ind AS 113 Fair Value Measurement".
3.4. Use of estimates, assumptions and judgements
The preparation of these Restated Consolidated Financial Information is in conformity with the recognition and measurement principles of Ind AS requires management to make judgments, estimates and assumptions in application of accounting policies that affect the reported balances of assets and liabilities, disclosure of contingent liabilities as on the date of Restated Consolidated Financial Information and reported amounts of income and expenses for the periods presented. The Group based its assumptions and estimates on parameters available when the Restated Consolidated Financial Information were prepared. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.
Key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Significant estimates and critical judgement in applying these accounting policies are described below:
3.4.1. Significant estimates
i) Impairment of non-financial assets (tangible and intangible)
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or Cash Generating Units (CGUs) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. In determining the fair value less costs to disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.
ii) Defined benefit obligations
The cost of the defined benefit gratuity plan, other defined benefit plan and other post-employment plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, expected returns on plan assets and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases, discount rate and return on planned assets are based on expected future inflation rates for India.
iii) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the statement of asset and liabilities cannot be measured based on quoted price in active markets since they are unquoted, their value is measured using valuation technique including the discounted cash flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
iv) Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Groups past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Further, the Group also evaluates risk with respect to expected loss on account of loss in time value of money which is calculated using average cost of capital for relevant financial assets. v) Income tax and deferred tax
Deferred tax assets are not recognised for unused tax losses as it is not probable that taxable profit will be available against which the losses can be utilised. Significant management judgement/estimate is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
vi) Provision for Inventories
Management reviews the inventory listing on a periodic basis. This review involves comparison of carrying value of aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to be made in the restated consolidated financial information for any obsolete slow-moving items and net realisable value. Management is satisfied that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.
3.5. Property, Plant and Equipment and Depreciation
Recognition and measurement
Property, plant and equipment are stated at their cost of acquisition. Cost of an item of property, plant and equipment includes purchase price including non - refundable taxes and duties, borrowing cost directly attributable to the qualifying asset, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and the present value of the expected cost for the dismantling/decommissioning of the asset.
Parts (major components) of an item of property, plant and equipments having different useful lives are accounted as separate items of property, plant and equipments.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group. All other repair and maintenance costs are recognised in statement of profit and loss as incurred.
Capital work-in-progress comprises of cost incurred on property, plant and equipment under construction / acquisition that are not yet ready for their intended use at the Balance sheet. Advance paid towards the acquisition of PPE outstanding at each reporting date is classified as Capital Advances under "Other Non-Current Assets" and assets which are not ready for intended use as on the date of Financial Statement are disclosed as "Capital Work in Progress".
Depreciation and useful lives
Depreciation on the property, plant and equipment (other than capital work in progress) is provided on a written down value method (WDV) over their useful lives which is in consonance of useful life mentioned in Schedule II to the Companies Act, 2013 or useful lives as determined based on internal technical evaluation. Depreciation for certain identified is computed on based on useful lives, determined based on internal technical evaluation as follows:
| Type of asset | Useful lives estimated by the management (years) |
| Buildings | 30 Years |
| Plant & Machinery | 15 Years |
| Office equipment | 3 6 Years |
| Furniture and Fixtures | 10 Years |
| Vehicles | 8 Years |
Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted prospectively.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
291 de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is de-recognised.
3.6. Leases
As per Ind AS 116 "Leases", the determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. A lessee does not have the right to use an identified asset if, at inception of the contract, a lessor has a substantive right to substitute the asset throughout the period of use.
The Group accounts for the lease arrangement as follows, where the Group entity is the lessee:
The Group applies single recognition and measurement approach for all leases, except for short term leases and leases of low value assets. On the commencement of the lease, the Group, in its statement of asset and liabilities, recognize the right of use asset at cost and lease liability at present value of the lease payments to be made over the lease term.
Subsequently, the right of use asset is measured at cost less accumulated depreciation [calculated on straight line method] and any accumulated impairment loss. Lease liability are measured at amortized cost using the effective interest method. The lease payment made, are apportioned between the finance charge and the reduction of lease liability, and are recognised as expense in the Statement of Profit and Loss.
Lease deposits given are a financial asset and are measured at amortized cost under Ind AS 109 since it satisfies Solely Payment of Principal and Interest (SPPI) condition. The difference between the present value and the nominal value of deposit is considered as prepaid rent and recognised over the lease term. Unwinding of discount is treated as finance income and recognised in the Statement of Profit and Loss.
3.7. Intangible assets and amortisation
Recognition and measurement
Intangible assets are recognized only if it is probable that the future economic benefits attributable to asset will flow to the Group and the cost of asset can be measured reliably. Intangible assets are stated at cost of acquisition/development less accumulated amortization and accumulated impairment loss if any.
Cost of an intangible asset includes purchase price including non - refundable taxes and duties, borrowing cost directly attributable to the qualifying asset and any directly attributable expenditure on making the asset ready for its intended use.
Intangible assets under development comprises of cost incurred on intangible assets under development that are not yet ready for their intended use as at the Balance Sheet date.
Amortization and useful lives
Computer softwares are amortized in 3 years on Written Down Value (WDV). Amortization methods and useful lives are reviewed at each period and financial year end and adjusted prospectively.
In case of assets purchased during the period/year, amortization on such assets is calculated on pro-rata basis from the date of such addition.
3.8. Impairment of non-financial assets
The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal /external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of a) fair value of assets less cost of disposal and b) its value in use. Value in use is the present value of future cash flows expected to derive from an assets or Cash-Generating Unit (CGU).
Based on the assessment done at each balance sheet date, recognized impairment loss is further provided or reversed depending on changes in circumstances. After recognition of impairment loss or reversal of impairment loss as applicable, the depreciation charge for the asset is adjusted in future periods to allocate the assets revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life. If the conditions leading to recognition of impairment losses no longer exist or have decreased, impairment losses recognized are reversed to the extent it does not exceed the carrying amount that would have been determined after considering depreciation / amortization had no impairment loss been recognized in earlier years.
3.9. Inventories
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
Raw materials and components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Costs are determined on weighted average basis.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of work-in-progress and finished goods are determined on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
3.10. Revenue recognition
The Group recognizes revenue from contracts with the customers based on five step model defined in Ind AS 115. The Group satisfies a performance obligation and recognizes revenue over time, if any of the conditions given in Ind AS 115 satisfies; else revenue is recognized at point in time at which the performance obligation is satisfied.
Revenue is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenues are recognized to the extent it is probable that the economic benefits will flow to the Group and the revenue & costs, if applicable, can be measured reliably.
(a) Performance Obligation
The Group derives its revenue from selling products in the form of Steel Fittings.
The Group is required to assess each of its contracts with customers to determine whether performance obligation is satisfied over time or at a point in time in order to determine the appropriate method for recognizing of revenue. The Group has assessed that based on the contracts entered into with the customers and the provisions of relevant laws and regulations, the Group recognizes the revenue over time only if it satisfies the criteria given in IND AS 115. Where the criteria as per IND AS 115 are not met, revenue is recognized at a point in time.
The Group satisfies its performance obligation when the control over the goods is transferred to the customer or benefits of the services being provided is received and consumed by the customer.
In cases where the Group determines that performance obligation is satisfied at a point in time, revenue is recognized when the control over the goods is transferred to the customer or benefits of the services being provided is received and consumed by the customer. The Group considers that the customer has obtained the control of promised goods or services; when the goods have been dispatched/delivered to the destination as per terms of the contract or services has been provided and consumed by the customer as per agreed terms and the Group has unconditional right to consideration.
(b) Transaction Price
The Group is required to determine the transaction price in respect of each of its contracts with customers. Contract with customers for sale of goods or services are on a fixed price.
For allocating the transaction price, the Group measured the revenue in respect of each performance obligation of contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In making judgment about the standalone selling price, the Group also assesses the impact of any variable consideration in the contract, due to discounts or penalties, the existence of any significant financing component and any non-cash consideration in the contract.
(c) Discounts, Rebates & Incentive to Customers
The Group accounts for volume discounts, rebates and pricing incentives to customer as a reduction of revenue based on the ratable allocation of the discounts / rebates to each of the underlying performance obligation that corresponds to the progress made by the customer towards earning that discounts, rebates or incentive. The Group also recognizes the liability based on the past performance of the customers fulfilling the criteria to get the discounts, rebates or incentive and the future outflow of the same is probable. If it is probable that the criteria for the discounts will not be met or if the amounts thereof cannot be estimated reliably, then the discount is not recognised until the payment is probable and the amount can be estimated reliably. The Group accounts for discounts, rebates and pricing incentives in the year of payment where customer qualifies for the same and wherein provision was not made due to Groups inability to make reliable estimates based on the available data at reporting date.
(d) Export incentives
Income from export incentives is accounted for on export of goods if the entitlements can be estimated with reasonable assurance and conditions precedent to claim are fulfilled.
(e) Tooling income
Revenue from tooling income is recognized at the point in time when the control of the die is transferred, which is generally on receipt of customers approval (referred to as production parts approval process or PPAP) as per the terms of the contract.
(f) Sale of services
Revenue from sale of services is in nature of job work on customer product which normally takes 1 4 days for completion and accordingly, revenue is recognized when products are sent to customer on which job work is completed. The normal credit period is 60 days.
(g) Trade Receivables
A receivable represents the groups right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
3.11. Recognition of Dividend Income and Interest Income
(a) Interest income
For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is included in other income in the statement of profit and loss.
(b) Dividends
Dividend income is recognised when the Groups right to receive the payment is established, which is generally when shareholders approve the dividend.
(c) Other income
Other incomes are accounted on accrual basis, except interest on delayed payment by debtors and liquidated damages which are accounted on acceptance of the Groups claim.
3.12. Government Grants and Subsidies
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.
Government grants are recognised in the Statement of Profit and Loss on a systematic basis over the years in which the Group recognizes as expenses the related costs for which the grants are intended to compensate or when performance obligations are me.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in Statement of Profit and Loss in the period in which they become receivable.
Government Grant relating to asset is reduced from the carrying value of the relevant assets. Such grant is then gets recognized in the Statement of Profit and Loss over the useful life of the depreciable asset by way of a reduced depreciation charge.
Government grants in the nature of export incentives are accounted for in the period of export of goods if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim are reasonably expected to be fulfilled.
3.13. Foreign currency transaction
Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. As at the Balance Sheet date, foreign currency monetary items are translated at closing exchange rate. Exchange difference arising on settlement or translation of foreign currency monetary items are recognised as income or expense in the year in which they arise.
Foreign currency non-monetary items which are carried at historical cost are reported using the exchange rate at the date of transactions.
3.14. Employee benefits
Short term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized as an expense at the undiscounted amount in the Restated Consolidated Statement of Profit and Loss of the year in which the employee renders the related service. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Post-employment benefits & other long-term benefits a. Defined contribution plan
The defined contribution plan is a post-employment benefit plan under which the Group contributes fixed contribution to a Government Administered Fund and will have no obligation to pay further contribution. The Groups defined contribution plan comprises of Provident Fund, Labor Welfare Fund Employee State Insurance
Scheme, National Pension Scheme, and Employee Pension Scheme. The Groups contribution to defined contribution plans are recognized in the Restated Consolidated Statement of Profit and Loss in the period in which the employee renders the related service.
b. Defined benefit plans
The Group has defined benefit plans comprising of gratuity and other long-term benefits in the form of leave benefits. The Groups obligation towards gratuity liability is unfunded. The present value of the defined benefit obligations and other long term employee benefits is determined based on actuarial valuation using the projected unit credit method. The rate used to discount defined benefit obligation is determined by reference to market yields at the Balance Sheet date on Indian Government Bonds for the estimated term of obligations.
For gratuity plan, re-measurements comprising of (a) actuarial gains and losses, (b) the effect of the asset ceiling (excluding amounts included in net interest on the net defined benefit liability) and (c) the return on plan assets (excluding amounts included in net interest on the post-employment benefits liability) are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Re-measurements are not reclassified to statement of profit and loss in subsequent periods.
Gains or losses on the curtailment or settlement of defined benefit plan are recognized when the curtailment or settlement occurs.
Actuarial gains or losses arising on account of experience adjustment and the effect of changes in actuarial assumptions for employee benefit plan other than gratuity are recognized immediately in the Restated Consolidated Statement of Profit and Loss as income or expense.
Compensated absences
A liability is recognised for benefits accruing to employees in respect of privilege leave in the period the related service is rendered at the amount benefits expected to be paid in exchange for that service.
3.15. Borrowing cost
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the respective asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset which necessarily takes a substantial period of time to get ready for its intended use or sale. Ancillary cost of borrowings in respect of loans not disbursed are carried forward and accounted as borrowing cost in the year of disbursement of loan. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest expenses calculated as per effective interest method, exchange difference arising from foreign currency borrowings to the extent they are treated as an adjustment to the borrowing cost and other costs that an entity incurs in connection with the borrowing of funds.
3.16. Taxes on income
Tax expenses for the year comprises of current tax, deferred tax charge or credit and adjustments of taxes for earlier years. In respect of amounts adjusted outside profit or loss (i.e., in other comprehensive income or equity), the corresponding tax effect, if any, is also adjusted outside profit or loss.
Current tax is measured at the amount of tax expected to be payable on the taxable income for the year and any adjustments to the tax payable or receivable in respect of previous years as determined in accordance with the provisions of the Income Tax Act,1961 that have been enacted or subsequently enacted at the end of the reporting period.
Current tax assets and current tax liabilities are offset when there is legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis or simultaneously.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxation authority.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which such deferred tax assets can be utilized. In situations where the Group has unused tax losses and unused tax credits, deferred tax assets are recognised only if it is probable that they can be utilized against future taxable profits. Deferred tax assets are reviewed for the appropriateness of their respective carrying amounts at each Balance Sheet date.
At each reporting date, the Group re-assesses unrecognised deferred tax assets. It recognises previously unrecognised deferred tax assets to the extent that it has become probable that future taxable profit allows deferred tax assets to be recovered.
3.17. Cash & cash equivalent
Cash and cash equivalents include cash in hand, bank balances, deposits with banks (other than on lien) and all short term and highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.
3.18. Statement of cash flows
Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.
3.19. Provisions, contingent liabilities, contingent assets
A provision is recognised when the Group has a present obligation (legal or constructive) as a result of past event 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. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
A contingent asset is not recognised but disclosed in the Restated Consolidated Ind AS Financial Information where an inflow of economic benefit is probable.
Our capital commitments were comprised primarily of commitment given/ purchase orders issued for purchase of property, plant and equipment (net of advance given and material already supplied).
3.20. Earnings per share
Basic earnings per share is computed using the net profit for the year attributable to the shareholders and weighted average number of shares outstanding during the period/year. The weighted average numbers of shares also include fixed number of equity shares that are issuable on conversion of compulsorily convertible preference shares, debentures or any other instrument, from the date consideration is receivable (generally the date of their issue) of such instruments.
Diluted earnings per share is computed using the net profit for the year attributable to the shareholder and weighted average number of equity and potential equity shares outstanding during the year including share options, convertible preference shares and debentures, except where the result would be anti-dilutive. Potential equity shares that are converted during the year are included in the calculation of diluted earnings per share, from the beginning of the year or date of issuance of such potential equity shares, to the date of conversion.
3.21. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.
3.22. Non-Current Assets held for sale.
Non-current assets classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell.
3.23. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Since, trade receivables do not contain significant financing component they are measured at transaction price.
3.23.1. Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition): the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are subsequently measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in profit or loss and is included in the "Other income" line item.
Investments in equity instruments at FVTOCI
On initial recognition, the Group can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the
‘Reserve for equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.
A financial asset is held for trading if:
It has been acquired principally for the purpose of selling it in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or
It is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.
Dividends on these investments in equity instruments are recognised in profit or loss when the Groups right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably. Dividends recognised in profit or loss are included in the
‘Other income line item.
Financial assets at fair value through profit or loss (FVTPL)
Investments in equity instruments are classified as at FVTPL, unless the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘Other income line item. Dividend on financial assets at FVTPL is recognised when the Groups right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Impairment of financial assets
The Group recognizes loss allowances using the expected credit loss (ECL) model based on ‘simplified approach for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the twelve-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of profit and loss.
For Trade Receivables, the Group uses the simplified approach permitted by Ind AS 109 Financial Instruments which requires expected life time losses to be recognized from initial recognition of receivables.
De-recognition of financial asset
The Group de-recognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the assets carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.
On de-recognition of a financial asset other than in its entirety (e.g., when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.
3.23.2. Financial liability and equity instrument
Classification as debt or equity
Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs. Repurchase of the Groups own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Groups own equity instruments.
Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL. However, financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Group, and commitments issued by the Group to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognised by the Group as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
it has been incurred principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading or contingent consideration recognised by the Group as an acquirer in a business combination to which Ind AS 103 applies, may be designated as at FVTPL upon initial recognition if: such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Groups documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘Other income line item.
However, for non-held-for-trading financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liabilitys credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss, in which case these effects of changes in credit risk are recognised in profit or loss. The remaining amount of change in the fair value of liability is always recognised in profit or loss. Changes in fair value attributable to a financial liabilitys credit risk that are recognised in other comprehensive income are reflected immediately in retained earnings and are not subsequently reclassified to profit or loss.
Gains or losses on financial guarantee contracts and loan commitments issued by the Group that are designated by the Group as at fair value through profit or loss are recognised in profit or loss.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the ‘Finance costs line item. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability or (where appropriate) a shorter period, to the gross carrying amount on initial recognition.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantee contracts issued by the Group are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:
the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 18.
Compound financial instruments
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that does not have an equity component. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and the equity components, if material, in proportion to their initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Reclassification
The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The management determines change in the business model as a result of external or internal changes which are significant to the
Groups operations. A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Group does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
De-recognition of financial liabilities
The Group de-recognises financial liabilities when, and only when, the Groups obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in profit or loss.
3.24. Dividend Payable
The final dividend on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Holding Companys Board of Directors
3.25. Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time.
As at March 31, 2025, MCA has not notified any new Standard or amended any existing standard which are applicable to the Company.
Changes In Accounting Policies
There have been no changes in our accounting policies during Fiscal 2025, 2024 and 2023.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
Total Income
Our total income comprises our revenue from operations and other income.
Revenue from Operations
Our revenue from operations is primarily derived from the sale of hydraulic equipment. We manufacture and offer a diverse portfolio of over 10,000 Stock Keeping Units (SKUs), which find application across a wide range of industries including construction, agriculture, automotive, injection moulding, and other hydraulic systems.
We generate revenue by supplying these products to various Original Equipment Manufacturers (OEMs) operating within these sectors. Product pricing is determined based on multiple factors such as the criticality of the application, material composition, and technical specifications.
Our reported revenue is presented net of applicable taxes.
Other Income
Other income primarily comprises of (i) interest income from bank and others; (ii) Net gain on fair valuation of financial instruments (FVTPL); (iii) Gain on Sale of Investment; (iv) Dividend income from Investments; (v) Foreign Exchange Gain (Net); (vi) Gain on sale of property, plant and equipment (Net); (vii) Reversal of Provisions and (viii) miscellaneous income.
Expenses
Our expenses comprise (i) cost of raw materials and components consumed; (ii) changes in inventories of finished goods and work in progress; (iii) manufacturing expenses; (iv) employee benefits expenses; (v) finance costs; (vi) depreciation and amortization expenses; and (vii) other expenses.
Cost of raw materials and components consumed
Our primary raw material is MS Steel rods which we procure from domestic open market. During fiscal 2025, 2024 and 2023 calculated as a percentage of total revenue, cost of raw material and component consumed was 35.50%, 35.73% and 34.70% respectively.
Changes in Inventories of Finished Goods and Work-in-Progress
Changes in inventories of finished goods and work in progress represents the difference between the opening and closing stock of finished goods and work in progress during the financial year.
Manufacturing Expenses
Manufacturing expenses comprises of (i) Consumption of stores, spare parts and loose tools; (ii) Chemical, oil and lubricant; (iii) Consumption of packing materials; (iv) Job work charges; (v) Power and fuel; (vi) Contract labour charges; (vii) Repairs and maintenance Machinery: (viii) Testing and inspection charges; (ix) Measurement instrument; and (x) Factory expenses.
During fiscal 2025, 2024 and 2023 calculated as a percentage of total revenue, manufacturing expenses were 23.12%, 24.32% and 22.27% respectively. The various components of our manufacturing expenses are as follows-
| Particulars | For the financial year ended March 31, 2025 | % of total expenses | For the financial year ended March 31, 2024 | % of total expenses | For the financial year ended March 31, 2023 | % of total expenses |
| Consumption of stores, spare parts and loose tools | 34.03 | 8.83% | 32.04 | 9.33% | 33.52 | 10.99% |
| Chemical, oil and lubricant | 31.06 | 8.06% | 25.70 | 7.49% | 28.07 | 9.20% |
| Consumption of packing materials | 28.74 | 7.46% | 24.59 | 7.16% | 22.82 | 7.48% |
| Job work charges | 126.51 | 32.83% | 110.01 | 32.05% | 93.36 | 30.61% |
| Power and fuel | 60.85 | 15.79% | 52.45 | 15.28% | 45.30 | 14.85% |
| Contract labour charges | 77.03 | 19.99% | 70.25 | 20.46% | 58.17 | 19.07% |
| Repairs and maintenance - Machinery | 18.68 | 4.85% | 16.89 | 4.92% | 13.60 | 4.46% |
| Testing and inspection charges | 1.25 | 0.32% | 0.99 | 0.29% | 0.93 | 0.30% |
| Measurement instrument | 3.50 | 0.91% | 6.38 | 1.86% | 4.31 | 1.41% |
| Factory expenses | 3.70 | 0.96% | 3.97 | 1.16% | 4.94 | 1.62% |
Total expenses |
385.35 | 100.00% | 343.27 | 100.00% | 305.02 | 100.00% |
Employee Benefits Expense
Employee benefits expenses primarily comprise of (i) salaries, wages and bonus; (ii) contribution to gratuity, provident and other funds; and (iii) staff welfare expenses.
During fiscal 2025, 2024 and 2023 calculated as a percentage of total revenue, employee costs were 12.19%, 13.63% and 12.04% respectively. Finance Costs
Finance cost primarily comprises of (i) interest to banks; (ii) interest to others; and (iii) Foreign currency loan exchange loss.
During fiscal 2025, 2024 and 2023 calculated as a percentage of total revenue, finance costs were 2.89%, 2.04% and 3.38% respectively
Depreciation and Amortization Expense
Depreciation and amortization expenses comprises (i) depreciation of property, plant and equipment; and (ii) amortisation of intangible assets.
During fiscal 2025, 2024 and 2023 calculated as a percentage of total revenue, Depreciation and Amortization costs were 6.06%, 5.20% and 4.47% respectively.
Other Expenses
Other expenses primarily comprises (i) rent, rates and taxes; (ii) repairs and maintenance; (iii) Travelling and conveyance; (iv) Printing and stationery; (v) Communication expenses; (vi) Vehicle expenses; (vii) insurance; (viii) Export expenses; (ix) Transport outward; (x) Commission on sales; (xi) Security charges; (xii) Payment to Director; (xiii) Legal and professional fees; (xiv) rates & taxes; (xv) Subscription and membership fees; (xvi) CSR expenses; (xvii) Auditors remuneration; (xviii) Bad Debts Written Off; (xix) Investment Written Off; (xx) Advances given written off; (xxi) Office expenses; (xxii) Provision for Advances given; (xxiii)Bank Charges; (xxiv) Provision for expected credit losses (Net); (xxv) Provision for impairment of Investments; (xxvi) Provision for doubtful debts; (xxvii) Sundry balances written off (Net); (xxviii) Net Loss on fair valuation of financial instruments (FVFPL); and (xxix) Miscellaneous expenses.
During fiscal 2025, 2024 and 2023 calculated as a percentage of total revenue, other expenses were 6.56%, 8.41% and 6.25% respectively
Tax expenses
Our tax expense for the period represents the tax payable on the current periods taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities and taxes related to earlier periods.
Discussion on Results of Operations
The following tables sets forth select financial data from our restated consolidated statement of profit and loss for the financial years 2025, 2024 and 2023, the components of which are also expressed as a percentage of total income for such years:
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||
| Particulars | in Million | % of Total Income | in Million | % of Total Income | in Million | % of Total Income |
Income |
||||||
| Revenue from operations | 1,613.82 | 96.81 | 1,377.08 | 97.55 | 1,333.36 | 97.37 |
| Other income | 53.25 | 3.19 | 34.65 | 2.45 | 36.08 | 2.63 |
Total income |
1,667.07 | 100.00 | 1,411.73 | 100.00 | 1,369.44 | 100.00 |
Expenditure |
||||||
| Cost of materials consumed | 591.77 | 35.50 | 504.36 | 35.73 | 475.21 | 34.70 |
| Changes in inventories of finished goods and work- in-progress | -33.75 | -2.02 | -7.27 | -0.51 | -10.63 | -0.78 |
| Manufacturing Expenses | 385.35 | 23.12 | 343.27 | 24.32 | 305.02 | 22.27 |
| Employee benefit expenses | 203.23 | 12.19 | 192.43 | 13.63 | 164.87 | 12.04 |
| Finance Cost | 48.12 | 2.89 | 28.74 | 2.04 | 46.30 | 3.38 |
| Depreciation and Amortization | 101.07 | 6.06 | 73.39 | 5.20 | 61.23 | 4.47 |
| Other Expenses | 109.36 | 6.56 | 118.78 | 8.41 | 85.62 | 6.25 |
Total expenses |
1,405.15 | 84.29 | 1,253.70 | 88.80 | 1,127.62 | 82.36 |
| Less: Exceptional Item | - | 0.00 | - | 0.00 | - | 0.00 |
| Less: Share in net loss of associate | - | 0.00 | - | 0.00 | - | 0.00 |
Profit before tax |
261.94 | 15.71 | 158.03 | 11.19 | 241.82 | 17.66 |
| Total tax expense | 65.75 | 3.94 | 42.07 | 2.98 | 61.80 | 4.51 |
Net Profit for the year |
196.19 | 11.77 | 115.96 | 8.21 | 180.02 | 13.15 |
Fiscal 2025 compared with Fiscal 2024
Total Income
Total income increased by 255.34 million or 18.09%, from 1,411.73 million in Fiscal 2024 to 1,667.07 million in Fiscal 2025. The growth was primarily driven by an increase in revenue from operations, which rose by 236.74 million, supported by strong growth in domestic sales and improved capacity utilisation. Additionally, other income increased by 18.60 million during the year, led by one-time gains on sale of land and higher interest income, further contributing to the overall growth in total income.
Revenue from Operations
Revenue from operations increased by 236.74 million, or 17.19%, from 1,377.08 million in Fiscal 2024 to 1,613.82 million in Fiscal 2025. This growth was primarily attributable to higher product sales, with domestic sales increasing from 864.45 million in Fiscal 2024 to 1,095.72 million in Fiscal 2025, reflecting expanded demand from both OEMs and distributors. Export sales remained broadly stable at 456.32 million in Fiscal 2024 and 456.70 million in Fiscal 2025. The increase in domestic volumes was driven by deeper customer engagement and addition of new customers in priority sectors. The growth in domestic market in Fiscal 2025 is as follows:
( in million)
Distribution Channel |
Market | Fiscal 2025 | Fiscal 2024 | % of growth |
Direct Customer |
Domestic | 1,022.25 | 846.22 | 20.80% |
Distributor |
Domestic | 134.87 | 74.54 | 80.93% |
Grand Total |
1,157.12 | 920.76 | 25.67% |
Other Income
Other income increased by 18.60 million or 53.68%, from 34.65 million in Fiscal 2024 to 53.25 million in
Fiscal 2025. The increase was primarily driven by a significant gain on sale of property, plant and equipment amounting to 26.88 million in Fiscal 2025 as compared to 1.85 million in the previous year indicating a onetime monetization of fixed assets. Additionally, interest income from banks and others rose to 12.48 million in Fiscal 2025 from 5.94 million in Fiscal 2024, supported by improved surplus deployment. Foreign exchange gain also increased modestly to 9.92 million in Fiscal 2025 from 6.10 million in Fiscal 2024. These gains were partially offset by the absence of reversals of provisions (such as impairment of investments or doubtful debts), which contributed 11.02 million in Fiscal 2024 but were nil in Fiscal 2025. The overall increase in other income was therefore primarily attributable to the one-time gain on sale of assets and increased interest accruals.
Total Expenditure
Total expenses increased by 151.44 million, or 12.08%, from 1,253.70 million in Fiscal 2024 to 1,405.14 million in Fiscal 2025. Total expenses as a percentage of total income declined from 88.81% in Fiscal 2024 to 84.29% in Fiscal 2025, reflecting improved operating leverage and better absorption of fixed costs on account of higher revenues.
The increase in overall expenditure was primarily driven by a 87.41 million in Fiscal 2025 due to rise in the cost of materials consumed, attributable to higher production volumes and input price variations. Manufacturing expenses increased by 42.08 million in Fiscal 2025, largely on account of higher job work charges, increased power and fuel consumption, and plant-related overheads in line with operational scale-up. Employee benefit expenses rose by 10.80 million in Fiscal 2025, primarily due to additions to the workforce and routine annual wage adjustments. Depreciation and amortization expenses increased by 27.68 million in Fiscal 2025, following capital expenditure incurred for capacity enhancement during the year. Finance costs also rose by 19.38 million in Fiscal 2025, reflecting higher working capital utilization. These increases were partially offset by a reduction in other expenses by 9.42 million in Fiscal 2025, mainly due to the absence of non-recurring items such as bad debt write-offs and investment impairments recorded in the previous year. Additionally, change in inventory contributed 26.48 million in Fiscal 2025, driven by a build-up in closing stock of work-in-progress and finished goods in anticipation of upcoming customer dispatches.
Cost of Materials Consumed
Cost of raw materials and components consumed increased by 87.41 million, or 17.33%, to 591.77 million in Fiscal 2025 from 504.36 million in Fiscal 2024. This increase is directly correlated with the 17.19% growth in revenue from operations during the year, reflecting a scale-up in production to meet higher order volumes.
Purchases of raw materials rose significantly to 614.95 million in Fiscal 2025 from 474.67 million in the previous year, indicating increased input requirements in line with expanded manufacturing output. Additionally, a higher year-end inventory level from 55.45 million in Fiscal 2024 to 78.63 million in Fiscal 2025 contributed to the reported consumption, as inventory accumulation was undertaken to support anticipated dispatches. These trends collectively reflect a ramp-up in production activity aligned with business growth and improved capacity utilization.
Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade
Changes in inventories of finished goods and work-in-progress amounted to (33.75) million in Fiscal 2025 as compared to (7.27) million in Fiscal 2024. This was primarily due to an increase in closing inventory levels, which rose to 188.49 million in Fiscal 2025 from 154.74 million in Fiscal 2024. The buildup was driven by higher volumes of work-in-progress inventory, which increased to 98.58 million in Fiscal 2025 from 87.95 million in Fiscal 2024, and finished goods inventory, which increased to 89.91 million in Fiscal 2025 from 66.79 million in Fiscal 2024, reflecting ongoing production and anticipated dispatches for customer orders in the subsequent period.
Manufacturing Expenses
Manufacturing expenses increased by 42.08 million or 12.26%, from 343.27 million in Fiscal 2024 to 385.35 million in Fiscal 2025. As a percentage of total income, manufacturing expenses declined from 24.32% in Fiscal 2024 to 23.12% in Fiscal 2025, indicating improved cost absorption on higher revenue base. The increase in absolute terms was primarily driven by a 16.50 million in Fiscal 2025 rise in job work charges (from 110.01 million to 126.51 million), reflecting partial outsourcing of machining activities to manage capacity and lead times. Power and fuel expenses increased by 8.40 million in Fiscal 2025 (from 52.45 million to 60.85 million), owing to higher production volumes and elevated energy rates. Additional cost escalations were observed in contract labour charges (up by 6.78 million), packing materials (up by 4.15 million), and chemicals, oils, and lubricants (up by 5.36 million), consistent with the overall operational ramp-up to support increased order execution. The various components of our manufacturing expenses are as follows:
| Particulars | For the financial year ended March 31, 2025 | % of total expenses | For the financial year ended March 31, 2024 | % of total expenses |
| Consumption of stores, spare parts and loose tools | 34.03 | 8.83% | 32.04 | 9.33% |
| Chemical, oil and lubricant | 31.06 | 8.06% | 25.70 | 7.49% |
| Consumption of packing materials | 28.74 | 7.46% | 24.59 | 7.16% |
| Job work charges | 126.51 | 32.83% | 110.01 | 32.05% |
| Power and fuel | 60.85 | 15.79% | 52.45 | 15.28% |
| Contract labour charges | 77.03 | 19.99% | 70.25 | 20.46% |
| Repairs and maintenance - Machinery | 18.68 | 4.85% | 16.89 | 4.92% |
| Testing and inspection charges | 1.25 | 0.32% | 0.99 | 0.29% |
| Measurement instrument | 3.50 | 0.91% | 6.38 | 1.86% |
| Factory expenses | 3.70 | 0.96% | 3.97 | 1.16% |
Total expenses |
385.35 | 100.00% | 343.27 | 100.00% |
Employee Benefits Expense
Employee benefit expenses increased by 10.80 million or 5.61%, from 192.43 million in Fiscal 2024 to 203.23 million in Fiscal 2025. The increase was primarily on account of higher salaries, wages and bonus, which rose by
5.95 million from 168.64 million in Fiscal 2024 to 174.59 million in Fiscal 2025, as well as an increase in staff welfare expenses by 3.12 million. Additionally, contributions to provident and other funds rose by 0.88 million, and gratuity expense increased by 0.85 million. These increases reflect the impact of annual wage revisions, addition of operational staff, and statutory benefit accruals. The various components of our employee benefit expenses are as follows-
| Particulars | For the financial year ended March 31, 2025 | % of total employee cost | For the financial year ended March 31, 2024 | % of total employee cost |
| Salaries, wages and bonus | 174.59 | 85.91% | 168.64 | 87.64% |
| Contributions to Gratuity, provident and other funds | 15.06 | 7.41% | 13.33 | 6.93% |
| Staff welfare expenses | 13.58 | 6.68% | 10.46 | 5.44% |
Total employee cost |
203.23 | 100.00% | 192.43 | 100.00% |
Finance Costs
Finance costs increased by 19.38 million or 67.43%, from 28.74 million in Fiscal 2024 to 48.12 million in
Fiscal 2025. This increase was primarily due to higher interest expenses on bank borrowings, which rose from 21.87 million in Fiscal 2024 to 38.59 million in Fiscal 2025. The rise in interest cost corresponds with an increase in working capital utilization and term loans availed during the year. As per the balance sheet, cash credit borrowings increased to 172.89 million as on March 31, 2025 from 171.09 million as on March 31, 2024, while long-term secured borrowings increased to 222.36 million from 197.29 million during the same period. Additionally, a foreign currency loan exchange loss of 1.86 million was incurred during the year, as compared to 0.05 million in the previous fiscal.
Depreciation and Amortization Expense
Depreciation and amortization expense increased by 27.68 million or 37.72%, from 73.39 million in Fiscal 2024 to 101.07 million in Fiscal 2025. This increase is primarily due to gross capital additions of 197.73 million made during the year, notably in plant and machinery, dies, and other production-supporting infrastructure. These additions were undertaken to enhance production capacity at the companys facilities. The increase was partially offset by disposals of 31.44 million. As a result, the net carrying amount of property, plant and equipment rose from 557.69 million as of March 31, 2024, to 641.04 million as of March 31, 2025.
Other Expenses
Other expenses decreased by 9.42 million or 7.93%, from 118.78 million in Fiscal 2024 to 109.36 million in Fiscal 2025. The decrease was primarily due to the absence of bad debts written off of 16.03 million and investment write-offs of 4.00 million, which were incurred in the previous year. This reduction was partially offset by increases in legal and professional fees from 13.95 million to 17.28 million, commission on sales from 14.07 million to 17.05 million, and transport outward expenses from 14.85 million to 18.17 million.
Excluding the one-off items, other expenses largely remained in line with operational growth.
Profit Before Tax
Profit before tax increased by 103.91 million or 65.75%, from 158.03 million in Fiscal 2024 to 261.94 million in Fiscal 2025, primarily driven by growth in revenues and improved operating leverage, notwithstanding the increase in finance and depreciation expenses. As a percentage of total income, PBT improved from 11.19% in Fiscal 2024 to 15.71% in Fiscal 2025, reflecting enhanced profitability on account of better cost absorption, stable input cost ratios, and disciplined overhead management.
Tax Expense
Total tax expense increased by 23.68 million or 56.29%, from 42.07 million in Fiscal 2024 to 65.75 million in Fiscal 2025, in line with the increase in taxable profits. The effective tax rate (calculated as total tax expense as a percentage of profit before tax) stood at 25.10% in Fiscal 2025, as compared to 26.62% in Fiscal 2024, reflecting a marginal decline due to variation in allowable deductions and timing differences under applicable tax laws.
Profit for the Year
Net profit increased by 80.23 million, from 115.96 million in Fiscal 2024 to 196.19 million in Fiscal 2025, with profit after tax (PAT) margin improving from 8.21% to 11.77%. The key contributors to this improvement are as follows:
Rationale for improvement in Profitability in Fiscal 2025
Operating Leverage:
Revenue from operations increased by 236.74 million (17.19%) year-on-year, while total expenses rose by 151.47 million (12.08%). This differential supported better absorption of fixed overheads, including depreciation
(which increased by 27.68 million) and finance costs (which increased by 19.38 million), enabling expansion in operating margin.
Revenue Mix Contribution:
Domestic sales increased by 231.27 million, from 864.45 million in Fiscal 2024 to 1,095.72 million in Fiscal 2025, representing a 26.75% rise. Export revenue remained nearly flat at 456.70 million, compared to 456.32 million in the previous year. Higher domestic volumes particularly from OEMs and distributor channels contributed to improved plant utilization and scale efficiencies.
Stable Raw Material Cost Ratio:
Cost of materials consumed increased from 504.36 million in Fiscal 2024 to 591.77 million in Fiscal 2025 (up 17.33%), in line with revenue growth. As a percentage of total income, material cost remained stable at 35.73% in FY24 and 35.50% in FY25, indicating effective pricing strategies and cost containment amid input volatility.
Expense Optimization:
Other expenses declined from 118.78 million in Fiscal 2024 to 109.36 million in Fiscal 2025, primarily due to the absence of non-recurring charges such as bad debts of 16.03 million and investment write-offs of 4.00 million recorded in the previous year. Despite business scale-up, overheads remained within a controlled range.
Improved Cash Flow Management:
Operating cash flow stood at 170.16 million in Fiscal 2025, compared to 186.77 million in Fiscal 2024. Inventory increased by 33.55 million and trade receivables reduced by 42.68 million, indicating better receivables turnover and proactive inventory planning. Short-term borrowings remained largely stable ( 172.89 million vs 171.09 million), reflecting disciplined working capital management despite capex-related long-term borrowing increase of 25.31 million.
Fiscal 2024 compared with Fiscal 2023
Total Income
Total income increased by 42.29 million or 3.09%, from 1,369.44 million in Fiscal 2023 to 1,411.73 million in Fiscal 2024. The growth was primarily attributable to an increase in revenue from operations, supported by higher domestic sales and export incentives. The increase was partially offset by a marginal decline in other income during the year.
Revenue from Operations
Revenue from operations increased by 43.72 million, or 3.28%, from 1,333.36 million in Fiscal 2023 to 1,377.08 million in Fiscal 2024. This growth was primarily driven by higher product sales, with domestic revenue increasing from 817.90 million to 864.45 million, reflecting improved order flow from OEMs and expanding engagement with distributors. Export revenue remained stable, moving from 455.52 million in Fiscal 2023 to 456.32 million in Fiscal 2024, aided by steady demand from key overseas customers. Overall, revenue growth was modest, supported by incremental customer additions and broader sales volumes, though capacity utilization remained broadly stable year-over-year at approximately 70.00%.
Other Income
Other income decreased marginally by 1.43 million, or 3.96%, from 36.08 million in Fiscal 2023 to 34.65 million in Fiscal 2024, and remained largely stable over the period. Other Income for Fiscal 2023 was primarily attributable to a foreign exchange gain of 21.22 million, as compared to 6.10 million in Fiscal 2024. Interest income was broadly stable at 6.90 million in Fiscal 2023 and 5.94 million in Fiscal 2024. The decline in
Fiscal 2024 was partially offset by a reversal of doubtful debts amounting to 11.02 million.
Total Expenditure
Total expenses increased by 126.08 million or 11.18%, from 1,127.62 million in Fiscal 2023 to 1,253.70 million in Fiscal 2024. As a percentage of total income, total expenses increased from 82.34% in Fiscal 2023 to 88.81% in Fiscal 2024, reflecting margin pressure due to higher input and operating costs. The increase was primarily driven by a rise in the cost of materials consumed, which increased by 29.15 million from 475.21 million to 504.36 million on account of higher procurement volumes and reduced year-end inventory levels. Manufacturing expenses rose by 38.25 million to 343.27 million, led by increased job work charges and higher energy costs. Employee benefit expenses increased by 27.56 million to 192.43 million, primarily due to wage revisions and headcount expansion to support capacity ramp-up. Depreciation and amortization expense rose by 12.16 million to 73.39 million due to capital additions, while other expenses increased by 33.16 million, mainly on account of one-time charges such as bad debts and investment write-offs. These increases were partially offset by a reduction in finance costs of 17.56 million, attributed to the absence of foreign exchange loss and lower interest outgo during the year.
Cost of Materials Consumed
Cost of raw materials and components consumed increased by 29.15 million or 6.13%, to 504.36 million in Fiscal 2024 from 475.21 million in Fiscal 2023. This increase was primarily attributable to higher procurement volumes, with purchases rising from 465.28 million in Fiscal 2023 to 474.67 million in Fiscal 2024, in line with the growth in revenue from operations. Additionally, a reduction in closing inventory from 85.14 million in Fiscal 2023 to 55.45 million in Fiscal 2024 resulted in a higher reported consumption for the year. The overall increase in raw material costs is reflective of the ramp-up in manufacturing activity to support increased order execution and incremental growth in sales.
Changes in Inventories of Finished Goods, Work-in-Progress and Stock in Trade
Changes in inventories of finished goods and work-in-progress amounted to (7.27) million in Fiscal 2024 as compared to (10.63) million in Fiscal 2023. The relatively lower change was due to a smaller increase in closing inventory levels, which rose to 154.74 million in Fiscal 2024 from 147.47 million in Fiscal 2023. Within this, finished goods inventory decreased from 75.57 million in Fiscal 2023 to 66.79 million in Fiscal 2024, while work-in-progress inventory rose from 71.90 million in Fiscal 2023 to 87.95 million in Fiscal
2024. The trend reflects steady production activity and alignment of inventory build-up with dispatch schedules at year-end.
Manufacturing Expenses
Manufacturing expenses increased by 38.25 million or 12.54%, from 305.02 million in Fiscal 2023 to 343.27 million in Fiscal 2024. As a percentage of total income, manufacturing expenses increased from 22.27% in Fiscal 2023 to 24.32% in Fiscal 2024, reflecting a marginally higher cost burden relative to revenue, primarily due to increased outsourcing and energy costs.
The increase was mainly driven by a 16.65 million rise in job work charges (from 93.36 million in Fiscal 2023 to 110.01 million in Fiscal 2024), indicating increased reliance on outsourced machining and processing.
Power and fuel expenses increased by 7.15 million (from 45.30 million in Fiscal 2023 to 52.45 million in Fiscal 2024), while contract labour charges rose by 12.08 million, consistent with the expansion in production scale. Additionally, packing material consumption increased by 1.77 million and chemicals, oils, and lubricants decreased by 2.37 million The various heads of manufacturing expenses are as follows-
( in million)
| Particulars | For the financial year ended March 31, 2024 | % of total expenses | For the financial year ended March 31, 2023 | % of total expenses |
| Consumption of stores, spare parts and loose tools | 32.04 | 9.33% | 33.52 | 10.99% |
| Chemical, oil and lubricant | 25.70 | 7.49% | 28.07 | 9.20% |
| Consumption of packing materials | 24.59 | 7.16% | 22.82 | 7.48% |
| Job work charges | 110.01 | 32.05% | 93.36 | 30.61% |
| Power and fuel | 52.45 | 15.28% | 45.30 | 14.85% |
| Contract labour charges | 70.25 | 20.46% | 58.17 | 19.07% |
| Repairs and maintenance - Machinery | 16.89 | 4.92% | 13.60 | 4.46% |
| Testing and inspection charges | 0.99 | 0.29% | 0.93 | 0.30% |
| Measurement instrument | 6.38 | 1.86% | 4.31 | 1.41% |
| Factory expenses | 3.97 | 1.16% | 4.94 | 1.62% |
Total expenses |
343.27 | 100.00% | 305.02 | 100.00% |
Employee Benefits Expense
Employee benefit expenses increased by 27.56 million or 16.72%, from 164.87 million in Fiscal 2023 to 192.43 million in Fiscal 2024. The increase was primarily attributable to higher salaries, wages and bonus, which rose by 22.80 million from 145.84 million in Fiscal 2023 to 168.64 million in Fiscal 2024. Staff welfare expenses increased by 3.01 million, while contributions to provident and other funds rose by 1.75 million. These increases were driven by wage revisions, onboarding of personnel for expanded operations (including the Kawthe unit), and applicable statutory accruals. The components of employee benefit expenses are as follows-
| Particulars | For the financial year ended March 31, 2024 | % of total employee cost | For the financial year ended March 31, 2023 | % of total employee cost |
| Salaries, wages and bonus | 168.64 | 87.64% | 145.84 | 88.46% |
| Contributions to Gratuity, provident and other funds | 13.33 | 6.93% | 11.58 | 7.02% |
| Staff welfare expenses | 10.46 | 5.44% | 7.45 | 4.52% |
Total employee cost |
192.43 | 100.00% | 164.87 | 100.00% |
Finance Costs
Finance costs decreased by 17.56 million or 37.93%, from 46.30 million in Fiscal 2023 to 28.74 million in Fiscal 2024. This decrease was primarily due to reduction in foreign exchange loss, which was from 0.05 million in Fiscal 2024 to 9.25 million in Fiscal 2023.As per the balance sheet, cash credit borrowings rose to 171.09 million as on March 31, 2024, from 33.35 million as on March 31, 2023, and long-term secured borrowings increased to 197.29 million from 130.13 million during the same period. Additionally, a foreign currency loan exchange loss of 0.05 million was incurred during Fiscal 2024, as compared to 9.25 million in the previous year.
Depreciation and Amortization Expense
Depreciation and amortization expense increased by 12.16 million or 19.86%, from 61.23 million in Fiscal 2023 to 73.39 million in Fiscal 2024. The increase was primarily driven by gross capital additions of 296.67 million during the year, particularly in plant and machinery and related infrastructure, including additions for the new Kawathe facility. This was partially offset by asset disposals amounting to 32.53 million. As a result, the net carrying value of property, plant and equipment increased from 345.97 million as of March 31, 2023 to 557.69 million as of March 31, 2024.
Other Expenses
Other expenses increased by 33.16 million or 38.73%, from 85.62 million in Fiscal 2023 to 118.78 million in Fiscal 2024. The increase was primarily attributable to one-time charges, including bad debts written off amounting to 16.03 million and investment written off of 4.00 million. Additionally, legal and professional fees increased from 8.91 million in Fiscal 2023 to 13.95 million in Fiscal 2024, and outward transport expenses rose from 11.00 million in Fiscal 2023 to 14.85 million in Fiscal 2024, reflecting overall business expansion. Commission on sales also decreased from 15.47 million in Fiscal 2023 to 14.07 million in Fiscal
2024. These increases were in line with scale-up in operations and broader market outreach initiatives undertaken during the year.
Profit Before Tax
Profit before tax decreased by 83.79 million (34.65 %), from 241.82 million in Fiscal 2023 to 158.03 million in Fiscal 2024. As a share of total income, Profit before tax fell from 17.66 % to 11.19 % over the same period. The decline resulted from increases in input and operating costs raw-material expenses, manufacturing overheads, and employee costs which outpaced revenue growth and reduced operating margins. Charges for bad debts and investment write-offs recorded under other expenses further reduced profit.
Tax Expense
Total tax expense decreased by 19.73 million, or 31.93%, from 61.80 million in Fiscal 2023 to 42.07 million in Fiscal 2024. The decrease was primarily due to a reduction in current tax by 26.90 million, partially offset by an increase in deferred tax expense of 7.17 million. As a percentage of profit before tax, the effective tax rate stood at 25.56% in Fiscal 2023 and 26.62% in Fiscal 2024, indicating a marginal increase despite lower absolute tax outgo, owing to reduced pre-tax profits.
Profit for the Year
Profit for the year decreased by 64.06 million or 35.58%, from 180.02 million in Fiscal 2023 to 115.96 million in Fiscal 2024. Profit after tax (PAT) margin declined to 8.21% in Fiscal 2024 from 13.15% in Fiscal 2023, representing a contraction of 4.94 percentage points. This decline was primarily driven by higher raw material costs, increased operational overheads, and one-time charges, which more than offset the modest growth in total income.
Rationale for decrease in Profit Margin in Fiscal 2024
The reduction in net profit during Fiscal 2024 was primarily attributable to the following factors:
Raw Material Cost Increase Relative to Revenue:
The cost of materials consumed increased by 29.15 million or 6.13%, from 475.21 million in Fiscal 2023 to 504.36 million in Fiscal 2024, while revenue from operations grew by 43.72 million or 3.28% during the same period. Consequently, material cost as a percentage of revenue rose from 34.70% to 35.73%, reflecting higher procurement rates and variation in the product mix delivered. The differential growth between cost and revenue contributed to a reduction in gross margin.
Increase in Employee Benefit Expenses:
Employee benefit expenses increased by 27.56 million or 16.72%, from 164.87 million in Fiscal 2023 to 192.43 million in Fiscal 2024, due to salary revisions and an increase in workforce to support operations.
Rise in Other Expenses:
Other expenses increased by 33.16 million or 38.73%, from 85.62 million in Fiscal 2023 to 118.78 million in Fiscal 2024. The increase was primarily attributable to bad debts written off amounting to 16.03 million, investment write-offs of 4.00 million, a 5.04 million increase in professional fees, and a 3.85 million rise in transportation charges.
Cash Flows
The following table sets forth certain information relating to our cash flows under Ind AS for the period ended for the fiscal 2025, fiscal 2024 and fiscal 2023.
(All amounts in million)
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Net cash (used in)/ generated from operating activities | 170.16 | 186.77 | 310.13 |
| Net cash (used in)/ generated from investing activities | (133.96) | (355.18) | (57.32) |
| Net cash (used in)/ generated from financing activities | (34.97) | 166.02 | (254.49) |
| Net increase/ (decrease) in cash and cash equivalents | 1.24 | (2.39) | (1.67) |
| Cash and Cash Equivalents at the beginning of the period | 6.04 | 8.43 | 10.10 |
| Cash and Cash Equivalents at the end of the period | 7.28 | 6.04 | 8.43 |
Net cash generated from operating activities
Fiscal 2025
During Fiscal 2025, net cash generated from operating activities amounted to 170.16 million, as against a profit before tax of 261.94 million. The difference was primarily attributable to non-cash adjustments including depreciation of 101.07 million and finance costs of 48.12 million, partially offset by interest income of 11.65 million.
Working capital movements also impacted cash flows: inventories increased by 56.93 million, trade and other payables increased by 32.48 million, while trade receivables decreased by 89.74 million. After accounting for income tax paid of 59.53 million, the net cash generated from operating activities stood at 170.16 million.
Fiscal 2024
During Fiscal 2024, net cash generated from operating activities was 186.77 million as against a profit before tax of 158.03 million. The difference was primarily on account of non-cash adjustments such as depreciation and amortization of 73.39 million and finance costs of 28.74 million, partly offset by interest income of 5.39 million and a gain on disposal of property, plant and equipment amounting to 1.85 million.
Working capital changes had a mixed impact on cash flows. Trade receivables decreased by 51.89 million, inventories increased by 22.22 million, and trade and other payables declined by 80.81 million. After accounting for income tax payments of 52.78 million, the Company generated 186.77 million in net cash from operating activities during the year.
Fiscal 2023
During Fiscal 2023, net cash generated from operating activities stood at 310.13 million, compared to a profit before tax of 241.82 million. The increase was driven by non-cash items including depreciation of 61.23 million and finance costs of 46.30 million, offset by interest income of 6.66 million and fair value gains of 6.74 million on financial instruments.
Working capital changes contributed positively: inventories were broadly stable, while trade and other payables increased by 36.27 million. However, there was a reduction in trade receivables by 29.40 million. After adjusting for tax payments of 77.99 million, the net cash from operating activities totalled 310.13 million for
Fiscal 2023.
Net cash used in investing activities
Fiscal 2025
Net cash used in investing activities was 133.96 million in Fiscal 2025. This was primarily attributable to capital expenditure of 154.11 million, representing investments in new plant and machinery, dies, and automation assets. The outflow was partially offset by 38.32 million received from the sale of property, plant, and equipment, indicating selective monetization of older assets. Additionally, interest income earned during the year amounted to 1.17 million and dividend income stood at 0.08 million. However, a 9.42 million investment outflow towards financial instruments contributed to the overall net outflow.
Fiscal 2024
Net cash used in investing activities was 355.18 million in Fiscal 2024, primarily due to capital expenditure of 286.39 million towards property, plant and equipment, largely for capacity expansion and automation. This was partially offset by proceeds of 4.40 million from the sale of fixed assets and 3.00 million from redemption of investments. Interest income earned during the year was 5.38 million, and there was a one-time gain of 3.00 million on sale of investments. Dividend income remained nominal at 0.14 million. Overall, the significant investment in fixed assets led to a net outflow from investing activities.
Fiscal 2023
Net cash used in investing activities was 57.32 million in Fiscal 2023. The Company incurred capital expenditure of 135.42 million, which was partially offset by 21.24 million received from the sale of assets. Interest and dividend income totalled 6.66 million and 0.09 million respectively. Additionally, there was a fair value gain of 50.11 million from financial instruments measured at FVTPL, reducing the net investing outflow. No investments were redeemed during the year.
Net cash generated from/ used in financing activities.
Fiscal 2025
Net cash used in financing activities was 34.97 million. The Company availed long-term borrowings of 56.56 million to support capex, while repaying 31.91 million of existing term loans. Short-term borrowings increased marginally by 1.80 million. Interest payments during the year amounted to 55.83 million, reflecting increased borrowing costs. A dividend of 5.59 million was paid during the year. The increase in debt drawdown was offset by higher finance cost, resulting in net outflow.
Fiscal 2024
Net cash generated from financing activities was 166.02 million in Fiscal 2024. This was driven by net proceeds from borrowings: 116.57 million from long-term borrowings and 130.01 million from short-term facilities. These were partly offset by repayments of long-term loans totalling 50.25 million. Finance costs paid during the year amounted to 24.72 million. A final dividend of 5.59 million was also paid during the year.
The overall inflow reflects increased leverage to support capital expenditure and working capital needs.
Fiscal 2023
Net cash used in financing activities amounted to 254.49 million in Fiscal 2023. The Company repaid 144.40 million of long-term borrowings and had a net outflow of 130.46 million from short-term borrowings. These were partially offset by fresh long-term borrowings of 66.37 million. Interest payments stood at 42.27 million. Dividend paid during the year was 3.73 million. The overall cash outflow reflects debt servicing and partial deleveraging.
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.
FINANCIAL INTEBTEDNESS
The following is the certain information relating to our outstanding indebtedness as of July 31, 2025, on a Consolidated basis:
(All amounts in million)
| Nature of Borrowing | ||
Secured Borrowings |
||
| Fund based facilities | ||
| Term loans | 372.50 | 220.09 |
| Vehicle loans | 10.00 | 2.75 |
Total (A) |
382.50 | 222.84 |
| Working capital Limits | ||
| - Cash Credit | 220.00 | 118.05 |
Total (B) |
220.00 | 118.05 |
Total Fund based (C)= (A) + (B) |
602.50 | 340.89 |
Non-Fund based facilities |
||
| Letter of Credit | 120.00 | 81.39 |
| Bank Guarantee | 1.50 | 0.83 |
| Forward Contracts | 100.00 | - |
Total Non-Fund Borrowings (D) |
221.50 | 82.22 |
Total Borrowings (E)= (C) + (D) |
824.00 | 423.11 |
For further and detailed information on our indebtedness, see "Risk Factor - We are required to comply with certain restrictive covenants under our financing agreements. Any non-compliance may lead to, amongst others, accelerated repayment schedule, enforcement of security and suspension of further drawdowns, which may adversely affect our business, results of operations, financial condition and cash flows." on page 52 and
" Financial Indebtedness" on page 323 of this Draft Red Herring Prospectus
CAPITAL COMMITMENTS, OTHER COMMITMENTS AND CONTINGENT LIABILITIES
As of March 31, 2025, the estimated amount of Capital commitments, other commitments and contingent liabilities are as follows:
As at March 31, 2025, the Group had capital commitments of 6.71 million (March 31, 2024: 40.89 million; March 31, 2023: 66.01 million), net of advances, towards the procurement of property, plant and equipment.
Contingent Liabilities
| Claims against the Group/ disputed liabilities not acknowledged as debts | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| Disputed GST Demand | - | 1.51 | 2.63 |
Other commitments
The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Group towards Employment and Post Employment Benefits. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Group will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its Restated Consolidated Financial Information in the period in which the Code becomes effective and the related rules to determine the financial impact are published.
For further information on our contingent liabilities and commitments, see "Note 40 Contingent Liabilities" under the chapter "Restated Consolidated Financial Information" on page 277.
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.
CAPITAL EXPENDITURES
For Fiscal 2025, 2024, and 2023, our capital expenditure towards additions to property, plant and equipment, capital work-in-progress, other intangible assets, and intangible assets under development amounted to 301.77 million, 359.95 million, and 166.81million, respectively. The following table sets forth our non-current assets for Fiscals indicated:
( in million)
Particulars |
Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Tangible | 197.46 | 295.43 | 78.35 |
| Intangible | 0.27 | 1.04 | 1.24 |
Total |
197.73 | 296.47 | 79.59 |
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 47 Related Party Transactions" on page 281 of this Draft Red Herring Prospectus.
Reservations, Qualifications and Adverse Remarks by the statutory auditors
There are no reservations, qualifications and adverse remarks by our Statutory Auditors since incorporation.
Details of Default, if any, including therein the amount involved, duration of default and present status, in repayment of statutory dues or repayment of debentures or repayment of deposits or repayment of loans from any bank or financial institution
Other than those discussed under "Risk Factors" beginning on page 32, there have been no defaults in payment of statutory dues or repayment of debentures and interest thereon or repayment of deposits and interest thereon or repayment of loans from any bank or financial institution and interest thereon by the Company for the Fiscal 2025, Fiscal 2024 and Fiscal 2023.
Material Frauds
There are no material frauds, as reported by our statutory auditor, committed against our Company, since incorporation.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Financial Risk Management
The Groups Board of Directors has overall responsibility for the establishment and oversight of the Groups risk management framework. The board of directors is responsible for developing and monitoring the Groups risk management policies. The Groups risk management policies are established to identify and analyze the risk faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the
Groups activities. The Groups Board of Directors oversees how management monitors compliance with the Groups risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Board of Directors is assisted in its oversight role by internal audit team. Internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Board of Directors.
The Group has exposure to the following risks arising from financial instruments:
Credit risk.
Liquidity risk.
Market risk
Credit risk:
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, Loans and Advance given and other financial instruments.
Trade receivable and Loans and Advances
Customer credit risk is managed by each business unit subject to the Groups established policy, procedures and control relating to customer credit risk management. To manage trade receivable, the Group periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 51. The Group does not hold collateral as security. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
The Company uses a provision matrix whereby trade receivables are considered doubtful based on past trends where such receivables are outstanding for more than a year. The allowance for lifetime expected credit loss on customer balances for the year ended March 31, 2025 and March 31, 2024 and March 31, 2023 is not material.
| Particulars | Not due | 0-180 days | 181-365 days | >365 | Total |
As at March 31, 2025 |
|||||
| Gross Carrying amount | 302.13 | 156.80 | 3.95 | 8.45 | 471.33 |
| Expected Credit Rate | - | 5% | 9% | 74% | |
| Expected credit loss | - | 7.13 | 0.37 | 6.27 | 13.77 |
| Carrying Amount of Trade | 301.13 | 149.68 | 3.58 | 2.17 | 457.56 |
| Receivable (Net) | |||||
As at March 31, 2024 |
|||||
| Gross Carrying amount | 193.06 | 171.76 | 6.93 | 7.33 | 379.08 |
| Expected Credit Rate | - | 4.56% | 9% | 23% | |
| Expected credit loss | - | 7.83 | 0.62 | 1.65 | 10.10 |
| Carrying Amount of Trade Receivable (Net) | 193.06 | 163.93 | 6.31 | 5.68 | 368.99 |
As at March 31, 2023 |
|||||
| Gross Carrying amount | 272.15 | 137.27 | 11.64 | 24.24 | 445.30 |
| Expected Credit Rate | - | 0.00% | 9% | 30% | - |
| Expected credit loss | - | - | 1.03 | 7.33 | 8.36 |
| Carrying Amount of Trade Receivable (Net) | 272.15 | 137.27 | 10.61 | 16.92 | 436.94 |
Particulars |
Total |
As at April 1, 2022 |
3.73 |
| Provided during the year | 4.63 |
As at April 1, 2023 |
8.36 |
| Provided during the year | 1.74 |
As at April 1, 2024 |
10.10 |
| Provided during the year | 3.67 |
As at April 1, 2025 |
13.77 |
The Company considers the probability of default upon initial recognition of loan and advances and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the group compares the risk of a default occurring on the loan as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.
Investment in Shares and Mutual Funds, Cash and cash equivalents and Other Bank Balances:
Credit risk from investment in Shares, Mutual Funds and balances with banks and financial institutions is managed by the management in accordance with the Groups policy. For financial instruments, the Group attempts to limit the credit risk by only dealing with reputable banks and financial institutions and mutual funds having high credit-ratings assigned by credit-rating agencies. The Group monitors changes in credit risk by tracking published external credit ratings
The exposure to credit risk for Equity listed mutual fund and securities through FVTPL at the reporting date was as follows:
| March 31, 2025 | March 31, 2024 | March 31, 2023 | ||||
| Particulars | Carrying Values | Fair Values | Carrying Values | Fair Values | Carrying Values | Fair Values |
Through fair value through profit or loss |
- | - | - | - | - | - |
| Investment in shares and mutual funds | 17.23 | 17.23 | 8.14 | 8.14 | 7.25 | 7.25 |
Total |
17.23 | 17.23 | 8.14 | 8.14 | 7.25 | 7.25 |
Impairment on cash and cash equivalents and other bank balances has been measured on a 12- month expected loss basis and reflects the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.
Liquidity risk:
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Groups liquidity risk management policies include to, at all times ensure sufficient liquidity to meet its liabilities when they are due, by maintaining adequate sources of financing from banks at an optimised cost whenever considered appropriate. In addition, processes and policies related to such risks are overseen by senior management. The Groups senior management monitors the Groups net liquidity position through rolling forecasts on the basis of expected cash flows. The Group also monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade payables.
(i) Maturities of financial liabilities:
The following are the remaining contractual maturities of financial liabilities at the reporting date:
| Particulars | Not due and Less than 1 year | 1 to 5 year | Above 5 years | Total |
March 31, 2025 |
||||
| Borrowings | 206.48 | 188.77 | 40.00 | 435.25 |
| Trade payables | 157.50 | 8.47 | - | 165.97 |
| Other financial liabilities | 38.31 | 13.98 | - | 52.29 |
As at March 31, 2024 |
||||
| Borrowings | 202.67 | 165.71 | 40.00 | 408.38 |
| Trade payables | 126.93 | 6.56 | - | 133.49 |
| Other financial liabilities | 35.39 | 12.80 | - | 48.19 |
As at March 31, 2023 |
||||
| Borrowings | 90.63 | 81.43 | 40.00 | 212.06 |
| Trade payables | 214.30 | - | - | 214.30 |
| Other financial liabilities | 30.43 | 9.37 | - | 39.80 |
Financing arrangements
The Group has sufficient sanctioned line of credit from its bankers / financiers (including overdraft facility) commensurate to its business requirements. The Group reviews its line of credit available with bankers and lenders from time to time to ensure that at all point of time there is sufficient availability of line of credit. The Group pays special attention to the net operating working capital invested in the business. In this regard, as in previous years, considerable work has been performed to control and reduce collection periods for trade and other receivables, as well as to optimise accounts payable with the support of banking arrangements to mobilise funds
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Group is exposed in the ordinary course of business to risks related to Interest rate, foreign currency exchange rate and prices
Interest Rate Risk
The groups main interest rate risk arises from long-term borrowings with variable rates, which expose the group to cash flow interest rate risk.
Breakup of Borrowings
| Particulars | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| Fixed rate instruments | |||
| - Borrowings | 43.29 | 45.50 | 57.15 |
| Floating rate instruments | |||
| - Borrowings | 391.96 | 362.88 | 154.91 |
Total |
435.25 | 408.38 | 212.06 |
Interest rate Sensitivity Analysis
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Groups profit before tax and on other component on equity is affected through the impact on floating rate borrowings, is as follows:
| Impact on profit before tax | ||||
| Effect | Increase/ (decrease) in basis points | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| INR Increase | 100 | (3.92) | (3.63) | (1.55) |
| INR - (Decrease) | (100) | 3.92 | 3.63 | 1.55 |
| Impact on equity | ||||
| Effect | Increase/ (decrease) in basis points | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| INR Increase | 100 | (3.92) | (3.64) | (1.54) |
| INR - (Decrease) | (100) | 3.92 | 3.64 | 1.54 |
Foreign currency risk
The Company is subject to the risk that changes in foreign currency values impact the Companys export, import and other payables
The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US Dollar (USD), Euro (EUR) & Great Britain Pound (GBP)
The carrying amounts of the Groups foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
| Particulars | Currency | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 | |||
| In foreign currency | In INR | In foreign currency | In INR | In foreign currency | In INR | ||
| Advance to | US$ | - | - | 0.01 | 16.94 | - | - |
| Suppliers | Euro | - | - | 0.19 | 0.71 | - | - |
| GBP | 0.01 | 0.41 | 0.01 | 0.41 | - | - | |
| Trade receivable | Euro | 0.19 | 17.28 | 0.35 | 31.82 | 0.55 | 48.78 |
| US$ | 1.77 | 150.73 | 1.61 | 133.71 | 1.75 | 143.47 | |
| Term loan from Bank - FCNR | US$ | 0.77 | 65.56 | 1.11 | 91.96 | 0.61 | 49.97 |
Foreign currency sensitivity analysis:
The following details demonstrate the Groups sensitivity to a 1% increase and decrease in the INR against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items as tabulated above and adjusts their translation at the period end for a 1% change in foreign currency rates. A positive number below indicates an increase in profit or equity and vice-versa.
| Impact on profit or loss | Currency | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
INR Weakens by 1% |
||||
| US$ | - | (0.17) | - | |
| Trade payable | Euro | - | (0.01) | - |
| GBP | (0.00) | (0.00) | - | |
| Euro | 0.17 | 0.32 | 0.49 | |
| Trade receivable | ||||
| US$ | 1.51 | 1.34 | 1.43 | |
| Term loan from Bank FCNR | US$ | (0.66) | (0.92) | (0.50) |
INR strengthens by 1% |
||||
| US$ | - | 0.17 | - | |
| Trade payable | Euro | - | 0.01 | - |
| GBP | 0.00 | 0.00 | - | |
| Euro | (0.17) | (0.32) | (0.49) | |
| Trade receivable | ||||
| US$ | (1.51) | (1.34) | (1.43) | |
| Term loan from Bank FCNR | US$ | 0.66 | 0.92 | 0.50 |
Commodity price risk
The Groups activities are exposed to steel price risks and therefore its overall risk management program focuses on the volatile nature of the steel and cement market, thus seeking to minimize potential adverse effects on the
Groups financial performance on account of such volatility. The risk management committee regularly reviews and monitors risk management principles, policies, and risk management activities.
Equity Price risk
The Group is mainly exposed to the price risk due to its investment in shares and mutual funds. The price risk arises due to uncertainties about the future market values of these investments. These are exposed to price risk. The Groups exposure to equity shares and mutual fund price risk arises from movement of price of related shares and mutual fund units measured at fair value through profit and loss.
Price risk sensitivity analysis:
0.10% increase or decrease in prices will have the following impact on profit/ (loss) before tax and on other components of equity
| Impact on profit or loss and other equity | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| Price-increase by 0.10 % | 0.02 | 0.01 | 0.01 |
| Price-decrease by 0.10 % | (0.02) | (0.01) | (0.01) |
Capital management
The Group manages its capital to ensure that it will be able to continue as a going concern so, that they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce cost of capital. The Group manages its capital structure and make adjustments to, in light of changes in economic conditions, and the risk characteristics of underlying assets. In order to achieve this overall objective, the Groups capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by equity. Net debt is calculated as total borrowing (including current and non-current terms loans as shown in the balance sheet).
The Group monitors capital using Total Debt to Equity. The Groups Total Debt to Equity are as follows:
| Particulars | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| Total debt* | 435.25 | 408.38 | 212.06 |
| Total capital (total equity shareholders fund) | 1,012.51 | 822.16 | 713.03 |
| Net debt to equity ratio | 0.43 | 0.50 | 0.30 |
* Total debt = non-current borrowings + current borrowings
The Group has complied with externally imposed capital requirements during the year ended March 31, 2025, March 31, 2024 and March 31, 2023.
An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:
1. Unusual or infrequent events or transactions
Except as otherwise disclosed in this Draft Red Herring Prospectus, there have been no unusual or infrequent events or transactions that may affect the financial statements or operating results, including but not limited to significant changes in accounting policies, one-time items of income, or discretionary reductions in major expense categories.
2. Significant economic changes that materially affected or are likely to affect income from continuing operations.
Except as disclosed under "Risk Factors" beginning on page 32, there have been no significant economic or macroeconomic changes that have materially affected or are expected to materially affect our income from continuing operations.
3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.
Other than those discussed under "Risk Factors" beginning on page 32 there are no known trends or uncertainties that have had, or are reasonably expected to have, a material adverse impact on our revenue or income from continuing operations. To our knowledge, except as discussed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that are expected to have a material adverse impact on revenues or income of our Company.
4. Future changes in relationship between costs and revenues
Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis of
Financial Condition and Results of Operations" on pages 32, 177 and 286 respectively, to our knowledge, there are no known factors that may adversely affect our business prospects, results of operations and financial condition.
5. Increases in net sales or revenue and Introduction of new products or services or increased sales prices
Changes in revenue in the last three Fiscals are as described in " Fiscal 2025 compared to Fiscal 2024", and
" Fiscal 2024 compared to Fiscal 2023" above on pages 305 and 308, respectively.
6. Status of any publicly announced New Products or Business Segment
Except as otherwise disclosed in this Draft Red Herring Prospectus in the section "Our Business" beginning on page 177. We have not announced and does not currently anticipate announcing any new product lines or business segments in the near future.
7. Total Turnover of Each Major Industry Segment in Which the Issuer Operates
Our Company operates in a single operating segment namely, hydraulic fittings. Since we operate in a single operating segment, separate segment reporting has not been made under Ind-AS 108. For further information, see "Restated Consolidated Financial Information Note 44 Operating Segments" on page 293.
8. Seasonality of business
Our Companys business is not seasonal or cyclical in nature.
9. Any Major Dependence on a single or few suppliers or customers
We depend on a limited number of suppliers for our revenue and operations. For details, see "Risk Factors no.3
We are dependent on our suppliers for raw materials used in our manufacturing processes. Any shortages, delay or disruption in the supply of the raw materials we use in our manufacturing process may have a material adverse effect on our business, financial condition, results of operations and cash flows." on page 35. We have in the past derived a major portion of our revenue from a limited number of customer groups and may derive a major portion of our revenue from such customers. For details, see "Risk Factors no.1 We are dependent on a few customers for a major portion of our revenues. We do not enter into long-term arrangements with our customers and any failure to continue our existing arrangements with such customers could adversely affect our business and results of operations. We do not enter into long term arrangements with our customers however we have relationship with most of our customers for more 10 years. failure to continue our existing arrangements with such customers could adversely affect our business and results of operations" on page 32.
10. Competitive conditions:
We operate in a competitive environment. See "Our Business", "Industry Overview" and "Risk Factors" on pages 177, 137 and 32, respectively, for further information on competitive conditions that we face.
11. Material developments after March 31, 2025 that may affect our future results of operations
Except as disclosed elsewhere in this Draft Red Herring Prospectus, there have been no significant developments after March 31, 2025, the date of the last financial statements contained in this Draft Red Herring Prospectus, to the date of filing of this Draft Red Herring Prospectus, which materially and adversely affects, or is likely to affect, our trading or profitability, or the value of our assets, or our ability to pay our liabilities within the next 12 months.
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