IC Electricals Company Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended March 31, 2026, the financial year ended March 31, 2025 and the financial year ended March 31, 2024. One should read the following discussion and analysis of our financial condition and results of operations in conjunction with our section titled “Financial Statements” and the chapter titled “Financial Information” on page 310 of the Red Herring Prospectus. This discussion contains forwardlooking statements, reflects our current views on future events and our financial performance, and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled “Risk Factors” on page 22 of this Red Herring Prospectus. Actual results could differ materially from those contained in any forward-looking statements. For further details regarding forward-looking statements, kindly refer to the chapter titled “Forward-Looking Statements” on page 20 of this Red Herring Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derivedfrom the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12 months ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to “we”, “us” or “our” refers to IC Electricals Limited, our Company. Unless otherwise indicated, financial information included herein is based on our Restated Financial Statements for the financial year 2026, 2025 & 2024 included in this Red Herring Prospectus beginning on page 310 of this Red Herring Prospectus.

BUSINESS OVERVIEW

Our Company is involved in the business of providing advanced engineering solutions to Indian Railways. It offers a broad range of electronic products such as regulators, battery chargers, emergency lights, inverters, microprocessor-based control systems, and vigilance control devices, compliant with the latest technical standards. Our Company also manufactures key railway components including alternators, traction motors, and permanent magnet alternators with controllers. Additionally, it executes turnkey railway electrification projects, encompassing the design, supply, erection, testing, and commissioning of 25 kV AC overhead equipment and traction substation systems.

For further details, please refer to the chapter titled “Our Business” on page 207 ofthis Red Herring Prospectus.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

As per mutual discussion between the Board of the Company and BRLM, in the opinion of the Board of the Company there have not arisen any circumstances since the date of the last financial statements as disclosed in the Red Herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:

• The Board of Directors of our Company has approved and passed a resolution on May 22, 2025, to authorize the Board of Directors to raise the funds by way of Initial Public Offering.

• The Shareholders of our Company have approved and passed a resolution on June 18, 2025, to authorize the issue by way of Initial Public Offering.

• The board of directors of our company appointed Mr. Rahul Verma as Whole Time Director, w.e.f. June 05,

2024.

• The Shareholders of our company re-appointed Mr. Sunil Kumar Verma as Managing Director w.e.f. December 10, 2024.

• The board of directors of our company appointed Mr. Nitin Sarup Chowdhary as Additional, Independent Director w.e.f. December 27, 2024.

• The board of directors of our company considered resignation of Mr. Nitin Sarup Chowdhary as Additional, Independent Director w.e.f. March 22, 2025.

• The board of directors of our company appointed Mr. Nitin Sarup Chowdhary as Additional, Independent Director w.e.f. March 22, 2025.

• The ‘cessation/resignation and simultaneous ‘appointment of Mr. Nitin Sarup Chowdhary on March 22, 2025 was purely a procedural reappointment. Accordingly, Form DIR-12 was filed to give effect to this procedural requirement.

• The Shareholders of our company appointed Mr. Bhaskar Reddy Dasari as Independent Director w.e.f. December 27, 2024.

• The board of directors appointed Mr. Subodh Kumar as Company Secretary & Compliance officer of the Company w.e.f. November 25, 2024.

• The board of directors appointed Mrs. Davisha Verma as Chief Financial Officer of the Company w.e.f. November 25, 2024.

• The Board of Directors of the Company has re-designated Mr. Sanjai Vishwakarma from Executive Director to Non-Executive Director with effect from April 4, 2025.

• The board of directors appointed Mr. Sanjay Pandey as Additional Independent Director of the Company w.e.f. April 24, 2025.

• The Shareholders of our Company regularised Mr. Nitin Sarup Chowdhary as Independent Director of the Company w.e.f. May 17, 2025.

• The Shareholders of our Company regularised Mr. Bhaskar Reddy Dasari as Independent Director of the Company w.e.f. May 17, 2025.

• The Shareholders of our Company regularised Mr. Sanjay Pandey as Independent Director of the Company w.e.f. June 18, 2025.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled

“Risk Factor” beginning on page 22 of this Red Herring Prospectus. Our results of operations and financial

conditions are affected by numerous factors including the following:

• Changes, if any, in the regulations / regulatory framework / economic policies in India and/or in foreign countries, which affect national & international finance.

• Companys results of operations and financial performance;

• Performance of Companys competitors;

• Significant developments in Indias economic and fiscal policies;

• Failure to adapt to the changing needs of the ayurvedic industry and in particular government policies and regulations may adversely affect our business and financial condition;

• Volatility in the Indian and global capital markets.

DISCUSSION ON RESULT OF OPERATION

Based on Restated Standalone Financial Statement

(Amount in Lakhs, except %)

S. No. Particulars	For the Period ending 31st March 2026	% of total income	For the Period ending 31st March 2025	% of total income	For the Period ending 31st March 2024	% of total income
I Revenue from operations	14,392.78	99.64%	12,148.16	99.71%	9,921.78	99.70%
II Other Income	51.43	0.36%	35.58	0.29%	30.01	0.30%
III Total Income (I+II)	14,444.21	100.00%	12,183.74	100.00%	9,951.79	100.00%
IV Expenses:
Cost of Consumption	8,644.25	59.85%	8269.86	67.88%	6,133.80	61.64%
Changes In Inventory	-307.79	-2.13%	-210	-1.72%	345.51	3.47%
Direct Expense	1,308.98	9.06%	574.89	4.72%	500.68	5.03%
Employee benefits expense	1,191.36	8.25%	957.41	7.86%	986.52	9.91%
Other expenses	857.20	5.93%	616.37	5.06%	643.31	6.46%
Depreciation and amortization expense	74.99	0.52%	42.53	0.35%	43.24	0.43%
Finance Cost	792.53	5.49%	686.18	5.63%	696.1	6.99%
Total Expenses	12,561.52	86.96%	10,937.23	89.77%	9,349.15	93.94%
VII Profit before tax	1,882.69	13.04%	1,246.50	10.23%	602.63	6.06%
VIII Tax Expenses
(I) Current Tax	489.66	3.39%	319.3	2.62%	156.99	1.58%
(III) Excess Provision made / (reversed) for previous years	0.12	0.00%	-	-	-	-
(III) Deferred Tax	-9.54	-0.07%	-1.05	-0.01%	-16.28	-0.16%
Total Tax Expenses	480.25	3.32%	318.25	2.61%	140.71	1.41%
IX Profit for the year (VII- VIII)	1,402.45	9.71%	928.26	7.62%	461.92	4.64%
X Earning Per Equity Share:
Basic & Diluted (Rs.)	10.45		7.21		4

Based on Restated Consolidated Financial Statement

(Amount in Lakhs, except %)

S. No. Particulars	For the Period ending 31st March 2026	% of total income	For the Period ending 31st March 2025	% of total income	For the Period ending 31st March 2024	% of total income
I Revenue from operations	14,304.15	99.46%	12,188.59	99.59%	9,924.92	99.50%
II Other Income	77.02	0.54%	50.29	0.41%	49.94	0.50%
III Total Income (I+II)	14,381.17	100%	12,238.88	100.00%	9,974.85	100.00%
IV Expenses:
Cost of Consumption	8,644.24	60.11%	8269.88	67.57%	6,162.80	61.78%
Change In Inventories	-466.63	-3.24%	-237.53	-1.94%	269.5	2.70%
Direct Expense	1,312.99	9.13%	576.4	4.71%	553.2	5.55%
Employee benefits expense	1,227.68	8.54%	991.31	8.10%	1,001.94	10.04%
Finance Cost	808.06	5.62%	696.12	5.69%	697.26	6.99%
Depreciation and amortization expense	77.97	0.54%	46.78	0.38%	45.48	0.46%
Other expenses	884.17	6.15%	631.72	5.16%	641.87	6.43%
V Total Expenses	12,488.49	86.84%	10974.68	89.67%	9372.05	93.96%
VI Profit before tax	1,892.68	13.16%	1,264.20	10.33%	602.81	6.04%
VII Tax Expenses
(I) Current Tax	492.44	3.42%	324.24	2.64%	157.03	1.64%
(II) Excess Provision made / (reversed) for previous years	0.12	0.00%	-	-	-	-
(III) Deferred Tax	-9.79	-0.07%	-1.53	-0.01%	-16.48	-0.17%
Total Tax expenses	482.77	3.36%	322.71	2.63%	140.55	1.47%
VIII Profit for the year (Before adjustment of minority interest) (VI-VII)	1,409.90	9.80%	941.49	7.69%	462.25	4.63%
IX Adjustment of minority Interest	2.28	0.02%	4.43	0.05%	9.32	0.09%
X Profit to be transferred to Reserve and Surplus (VIII- IX)	1407.63	9.79%	937.06	7.66%	452.94	4.54%
XI Earning Per Equity Share:
Basic & Diluted (Rs.)	10.49		7.28	-	3.92	-

Items for Restated Financial Statements Our Significant Accounting Policies

For Significant accounting policies please refer to “Significant Accounting Policies", under the Chapter titled Restated Financial Statements beginning on page 310 of the Red Herring Prospectus.

Overview of Revenue & Expenditure

The following discussion on the results of operations should be read in conjunction with the Restated Financial Statements for the Financial year ended March 31, 2026, March 31, 2025 & March 31, 2024.

Our revenue and expenses are reported in the following manner:

Revenues

• Revenue from operations

Our companys source of revenue is primarily generated sale of manufactured electrical component and via railway electrification and maintenance work.

• Other Income

Other income includes interest income & other operating revenue.

Expenditure

Our total expenditure primarily consists of consumption of Raw material, direct manufacturing cost, change in inventory, Employee Benefit expenses, Finance cost, Depreciation and amortization expenses, other expenses.

• Consumption of Material

Consumption of Material includes changes in the stock of raw materials and purchases during the year.

• Change in Inventory

Change in Inventory includes changes in the finished goods and work in progress during the year.

• Employment Benefit Expenses

Our employee benefits expense primarily comprises salaries, wages, incentives, staff welfare expenses; and directors remuneration. Contribution to ESI & PF including Long Term Benefits.

• Finance Cost

Our Finance Cost includes interest expenses and loan processing bank charges on secured & unsecured loans from banks, NBFC and other financial institutions

• Depreciation and Amortization Expenses depreciation and amortization expenses on tangible & intangible fixed assets majorly include depreciation on plant & machinery, vehicles, furniture and fixtures, buildings and fire extinguisher, electrical equipment, office equipment, computers and printers, tools, mobile instruments and research and development & know how.

• Other Expenses

Other Expenses majorly include audit fees, advertisement expenses, freight, insurance, technical, legal, professional exp, rent, repair, travelling, brokerage & commission, security, vehicle hire charges, printing & stationery & miscellaneous expenses.

FISCAL YEAR ENDED MARCH 31, 2026, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2025 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

• Total Income

Total income for the financial year 2025-26 stood at Rs. 14,444.21 Lakhs whereas in the financial year 202425 it stood at Rs 12,183.74 Lakhs representing an increase of 18.55%.

Reason: The increase in the total income of the company is due to a significant increase in the revenue of the company, general growth in the business operations of the Company along with an increase in other income.

Revenue from operations

Revenue from operations for the financial year 2025-2026 stood at Rs. 14,392.78 Lakhs whereas for the financial year 2024-2025 stood at Rs. 12,148.16 Lakhs representing an increase of 18.48%.

Reason: Theres an increase in “revenue from operation” on account of an increase in “sale of goods”, due to business growth.

The company has an unbilled revenue of Rs 2,111.36 Lakhs in FY 2025-26. The company is into railways electrification business which is performed in milestone basis. In FY 2025-26, the company has performed certain work which is completed as per the milestone determined in the contract which was not billed to the railways by the company. The same amount is being reflected in Unbilled revenue which is billed in FY 202627 by the company to railways. The same pattern of the work is observed for the future years.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Sale of Goods	8,499.74	6,588.14
Sale of Service	3,781.68	4,723.54
Unbilled Revenue	2,111.36	836.48
Total	14,392.78	12,148.16
Year on Year Increase/(Decrease)	18.48%

• Other Income

Other income for the financial year 2025-2026 stood at Rs. 51.43 Lakhs whereas for the financial year 20242025 stood at Rs. 35.58 Lakhs representing an increase of 44.56%.

Reason: The other income is Primarily driven by higher interest income and profit on sale of fixed asset. This increase is attributable to a significant rise in fixed deposit holdings with banks during the year.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Interest Income	43.87	35.58
Profit on sale of Fixed Assets	7.57	-
Total	51.43	35.58

Expenditure

• Total Expenses

Total expenses for the financial year 2025-2026 stood at Rs. 12,561.30 whereas for the financial year 20242025 stood at Rs. 10,937.23 Lakhs representing an increase of 14.85%

Reason: The increase in account of the increase in the cost of consumption, direct expenses, and employee benefit expenses, finance cost, Depreciation and other expenses.

• Cost of Consumption

The Cost of Consumption for the Financial Year 2025-2026, stood at Rs. 8,644.25 Lakhs whereas in Financial Year 2024-2025, stood at Rs. 8,269.86 Lakhs representing an increase of 4.53%.

Reason: The raw material consumption of the company has mainly increased due to increase in revenue during the year:

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Opening Stock of Raw Material	6,260.50	5,549.95
Add- Purchase During the years	9,438.93	8,980.41
Less- Closing Stocks of Raw Material	7,055.19	6,260.50
Total	8,644.25	8,269.86

• Change in Inventories

Change in Inventories for the Financial Year 2025-26, stood at Rs. (307.79) Lakhs Whereas in Financial Year 2024-25, stood at Rs. (210.00) Lakhs representing a decrease of 46.57%.

Reason: The percentage decrease in change in inventories due to increase in closing stock in the FY 2025.

(Amount in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Opening Stock of Finished Goods	1,278.63	1,021.84
Opening Stock of WIP	549.74	596.53
Less: Closing Stock of Finished Goods	1,223.65	1,278.63
Less: Closing Stock of WIP	912.51	549.74
Total	(307.79)	(210.00)

• Direct Expenses

Other Direct Expenses for the Financial Year 2025-26, stood at Rs. 1308.98 Lakhs Whereas in Financial Year 2024-25, stood at Rs. 574.89 Lakhs representing an increase of 127.69%.

Reason: The increase in other direct expenses of the company is mainly due to an increase in job work charges, freight & cartage inward & packing materials which is in proportionate to increase in turnover of the company.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Job Work Charges	1,019.59	328.13
Freight & Cartage Inward	160.33	126.67

• Employment Benefit Expenses

Employee benefit expenses for the financial year 2025-26 stood at Rs. 1191.36 Lakhs whereas for the financial year 2024-25 stood at Rs. 957.41 Lakhs representing an increase of 24.44%%.

Reason: The increase in employee benefit expenses during the year was primarily attributable to the annual revision in employee compensation in line with normal business practices. In recognition of improved employee productivity and operational efficiencies, the Company provided enhanced remuneration, which contributed to improved business performance and margins. Additionally, the Company expanded its workforce by approximately 10% compared to FY 2024-25 to support the growth in its business operations, resulting in a corresponding increase in employee costs..

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Salaries, wages and incentives	1,047.86	826.13
Total	1,047.86	826.13

• Finance Cost

Finance costs for the financial year 2025-26 stood at Rs. 792.53 Lakhs whereas for the financial year 202425 stood at Rs. 686.18 Lakhs representing an increase of 15.50%.

Reason: The increase in the Companys finance costs during the year was primarily attributable to the enhancement of its working capital facilities to support the growth in business operations and the higher utilisation of fund-based and non-fund-based credit limits. In addition, the Company availed additional business loans from financial institutions to meet its operational and expansion requirements, resulting in an increase in finance costs as compared to the previous financial year..

• Depreciation and Amortization Expenses

The depreciation and amortization expenses for the financial year 2025-26 stood at Rs. 74.99 Lakhs whereas for the financial year 2024-25 stood at Rs. 42.53 Lakhs representing a decrease of 76.34%.

Reason: The change in depreciation expense is primarily attributable to the movement in the Written Down Value (WDV) of the Companys fixed assets. Further, certain capital additions were made towards the end of the previous financial year and during FY 2025-26, resulting in a proportionate depreciation charge in the year of acquisition and a full-year depreciation impact in FY 2025-26

(Amount in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Opening balance	269.99	250.45
Addition	104.83	62.07
Deletion	0.43	-
Depreciation	74.99	42.53
Ending balance of fixed assets	299.40	269.99

• Other Expenses

The other expenses for the financial year 2025-26 stood at Rs. 857.20 Lakhs whereas for the financial year 2024-25 stood at Rs. 616.37 Lakhs representing an increase of 39.07%.

Reason: There is an increase in ‘Other expenses because of the increase in freight and cartage outward, insurance charges, rent, rates and taxes, repair & maintenance, travelling & conveyance, security expenses and vehicle hire, as shown below:

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Freight & cartages Outward	80.96	75.35
Insurance Charges	61.14	42.58
Rent, rates and taxes	145.24	82.39
Repair & maintenance	22.29	0.67
Travelling & conveyance	135.72	77.12
Security Expenses	87.90	57.85
Vehicle Hire Charges	142.88	78.48

• Restated Profit before Tax

The restated profit before tax for the financial year 2025-26 stood at Rs. 1,882.69 Lakhs whereas for the financial year 2024-25 stood at Rs. 1,246.50 Lakhs representing an increase of 51.04%.

• Tax Expenses

The Tax Expenses for the financial year 2025-26 stood at Rs. 480.25 Lakhs out of which the Current Tax was Rs. 489.66 Lakhs, Excess Provision made / (reversed) for previous years 0.12 Lakhs and the Deferred Tax being Rs. (9.54) Lakhs whereas in the Financial Year 024-25 stood at Rs. 318.25 Lakhs out of which the Current Tax was Rs. 319.30 Lakhs and the Deferred Tax being Rs. (1.05) Lakhs representing an increase of 50.90%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax which was Rs. 1,246.50 Lakhs in the financial year 2024-25 but in financial year 2025-26 it came to Rs. 1,882.91 Lakhs.

• Restated Profit after Tax

The restated profit after tax for the financial year 2025-2026 stood at Rs. 1,402.45 Lakhs whereas for the financial year 2024-2025 stood at Rs. 928.26 Lakhs representing an increase of 51.08%.

Reason for change in the Revenue from operation and Profit after tax

(Amount in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Revenue from Operation	14,392.78	12,148.16
Change in %	18.48%
Expenses	12,561.30	10,937.23
Change in %	14.85%
Profit after tax	1,402.45	928.26
Pat Margin in %	9.75%	7.64%

Increase in PAT Justification:

IC Electricals Limited witnessed a significant increase in Profit after Tax by 51.11%, reaching Rs. 1,402.45 Lakhs from Rs. 928.26 Lakhs in the previous year. This increase is attributed to the following:

• The improvement in the Companys gross profit margin was primarily driven by the growth in revenue from operations, resulting in enhanced economies of scale. During the year, the electronic division recorded a significant growth of approximately 70% in sales, increasing from Rs. 2,568.00 lakhs in the previous financial year to Rs. 4,371.67 lakhs in FY 2025-26. Being the largest contributor to the Companys gross profit and generating an average gross profit margin of approximately 45%, which is higher than that of the other business divisions, the increased contribution of the electronic division to the overall revenue mix had a favourable impact on the Companys gross profitability.

The order book of the company has registered a sharp growth of almost 54% which has helped the company to increase its turnover in FY 2025.

(Amount in Lakhs)

Particulars	FY25	FY26
	Audited	Audited
Opening Order Book	11,711.14	10,134.37
New Orders Added	10,571.39	21,821.01
Orders Executed	12,148.16	14,392.78

• The company is focusing on better cost management as the total expenses of the company as compared to sales declined by 3% in FY2026.

(Amount in Lakhs)

Particulars	FY25	FY26
	Audited	Audited
Sales	12,148.16	14,392.78
Total Expenses	10,937.23	12,561.52
Percentage	90%	87.27%

1. the increase in the Companys Profit After Tax (PAT) for FY 2025-26 was also supported by improved working capital management. Efficient cash flow planning enabled the Company to make timely and early payments to its suppliers, thereby availing cash discounts from creditors, which contributed positively to the overall profitability during the year.

2. The Companys profitability improved due to the execution of higher-margin contracts. Further, the Electronic Division, which comprises a mix of product supply and services, generates relatively higher margins, and its increased contribution positively impacted the overall profitability of the Company.

Cash flow from Operating Activity

Reasons for negative cash flow from operating activity

The cash flow from operation for the FY 26 (1,146.02) & for the FY25 (827.99) representing an increase of 38.41%.

Reason:

The increase in negative cash flows from operating activities was primarily attributable to a higher level of trade receivables during the year. As a significant portion of the Companys sales is generated in the last quarter of the financial year, outstanding receivables tend to be higher at the balance sheet date, resulting in a temporary increase in working capital requirements and a corresponding impact on operating cash flows.

Other Receivables

The other receivable is 3,390.65 lakhs for the financial year 25-26 and is Rs. 2,359.04 Lakhs for the FY24-25 Reason for increase in other receivables:

(Amount in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Current Maturity of Railways (Earnest money deposit)	516.46	848.21
Unbilled Revenue	2,111.36	836.48
FDR with Bank (Held as a Margin Money and as a Collateral Security with Banks)	762.82	674.35

The increase in other receivables was primarily attributable to the growth in unbilled revenue. As a significant portion of the Companys operations relates to contractual projects, particularly in the railway sector, a substantial part of the work executed during the year could not be billed before the financial year-end despite the completion of the relevant contractual milestones. Consequently, such amounts have been recognised as unbilled revenue and are expected to be billed in the subsequent financial year.

Trade Payable

The trade payable is Rs. 3,663.73 Lakhs for the FY25-26 and Rs. 3,409.56 Lakhs for the FY24-25.

Reason for increase in trade payable:

The increase in trade payable has increased due to major purchases happens in the last month of the FY 2025-26. The details of Trade payables are as follows:

(Amount in lakhs)

Particulars	FY 2025-26	FY 2024-25
Total outstanding dues from micro enterprises & small enterprises	621.41	1,601.45
Total outstanding dues of creditors other than micro enterprises & small enterprises	3,042.32	1,808.11

FISCAL YEAR ENDED MARCH 31, 2025, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2024 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

• Total Income

Total income for the financial year 2024-25 stood at Rs. 12,183.74 Lakhs whereas in the financial year 202324 it stood at Rs. 9,951.79 Lakhs representing an increase of 22.43%.

Reason: The increase in the total income of the company is due to a significant increase in the revenue of the company general growth in the business operations of the Company. The company is having 3 divisions manufacturing of electronic components for railways, rotating motor division and EPC work for railways electrification.

• Revenue from operations

Revenue from operations for the financial year 2024-2025 stood at Rs. 12,148,16 Lakhs whereas for the financial year 2023-24, it stood at 9,921.78 Lakhs representing an increase of 22.44%.

Reason: The increase in the total income of the company is due to a significant increase in the revenue of the company general growth in the business operations of the Company. The company is having 3 divisions manufacturing of electronic components for railways, rotating motor division and EPC work for railways electrification. A substantial portion of the companys annual turnover occurs in the last quarter of the financial year.

The company secures orders through a bidding process conducted by the railways. Contracts are awarded based on the lowest bid, subject to meeting the required technical and financial qualifications. The company benefits from preferential consideration in contract awards due to its longstanding legacy and specialized expertise in product manufacturing.

The company has an unbilled revenue of Rs 836.48 Lakhs in FY 2024-25. The company is into railways electrification business which is performed in milestone basis. In FY 2024-25, the company has performed certain work which is completed as per the milestone determined in the contract which was not billed to the railways by the company. The same amount is being reflected in Unbilled revenue which is billed in FY 202526 by the company to railways. The same pattern of the work is observed for the future years.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Sale of Goods	6,588.14	5,246.30
Sale of Service	4,723.54	4,675.48
Unbilled Revenue	836.48	-
Total	12,148.16	9,921.78
Year on Year Increase/(Decrease)	22.44%

• Other Income

Other income for the financial year 2024-2025 stood at Rs. 35.58 Lakhs whereas for the financial year 202324, it stood at Rs. 30.01 Lakhs representing an increase of 18.56%.

Reason: primarily driven by higher interest income. This increase is attributable to a significant rise in fixed deposit holdings with banks during the year.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Interest Income	35.58	30.01
Total	35.58	30.01

Expenditure

• Total Expenses

Total expenses for the financial year 2024-2025 stood at Rs. 10,937.23 whereas for the financial year 202324, it stood at Rs. 9,349.15 Lakhs representing an increase of 16.99%

Reason: The increase in account of the increase in the cost of consumption, direct expenses, and employee benefit expenses.

• Cost of Consumption

The Cost of Consumption for the Financial Year 2024-2025, stood at Rs. 8,269.86 Lakhs whereas in Financial Year 2023-24 it stood at Rs. 6,133.80 Lakhs representing an increase of 34.82%.

Reason: The raw material consumption of the company has mainly increased due to increase in purchases during the year and due to opening stock of raw material of the company shown as follows:

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening Stock of Raw Material	5,549.95	4,451.51
Add- Purchase During the years	8,980.41	7,232.23
Less- Closing Stocks of Raw Material	(6,260.50)	(5,549.95)
Total	8,269.86	6,133.80

• Change in Inventories

Change in Inventories for the Financial Year 2024-25, stood at Rs. (210.00) Lakhs Whereas in Financial Year 2023-24 it stood at Rs. 345.51 Lakhs representing a decrease of 160.78%.

Reason: The percentage decrease in change in inventories due to increase in closing stock in the FY 2025.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening Stock of Finished Goods	1,021.84	1,371.95
Opening Stock of WIP	596.53	591.93
Less: Closing Stock of Finished Goods	1,278.63	1,021.84
Less: Closing Stock of WIP	549.74	596.53
Total	(210.00)	345.51

• Other Direct Expenses

Other Direct Expenses for the Financial Year 2024-25, stood at Rs. 574.89 Lakhs Whereas in Financial Year 2023-24 it stood at Rs. 500.68 Lakhs representing an increase of 14.82%.

Reason: The percentage increase in other direct expenses of the company is in line with FY 2024. The absolute amount has increased due to an increase in job work charges, freight & cartage inward & packing materials which is in proportionate to increase in turnover of the company.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Job Work Charges	328.13	294.15
Freight & Cartage Inward	126.67	74.85
Packing Materials	29.69	15.50

• Employment Benefit Expenses

Employee benefit expenses for the financial year 2024-25 stood at Rs. 957.41 Lakhs whereas for the financial year 2023-24, it stood at Rs. 986.52 Lakhs representing a decrease of 1.84%%.

Reason: The decrease in ‘Employee Benefit Expenses is attributed to efficient resource management and economies of scale. The company optimized its workforce in alignment with production requirements, offering exit options to redundant employees, which led to a reduction in overall salaries, wages, and incentives. Conversely, enhanced performance incentives were provided to high-performing employees, contributing to improved productivity

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Salaries, wages and incentives	826.13	891.98
Total	826.13	891.98

• Finance Cost

Finance costs for the financial year 2024-25 stood at Rs. 686.18 Lakhs whereas for the financial year 202324, it stood at Rs. 696.10 Lakhs representing a decrease of 1.43%.

Reason: This was primarily due to an efficient working capital management and decline in ROI on the working capital limits of the company. The company is banking with PNB for its working capital limits. In FY 2025, the Rate of interest on working capital limits has been reduced by 2% approximately which has reduced the finance costs.

• Depreciation and Amortization Expenses

The depreciation and amortization expenses for the financial year 2024-25 stood at Rs. 42.53 Lakhs whereas for the financial year 2023-24, they stood at Rs. 43.24 Lakhs representing a decrease of 1.65%.

Reason: This decrease is primarily due to the reduction in the Written Down Value (WDV) of fixed assets. Additionally, asset additions were made towards the end of the year, resulting in a minimal impact on depreciation expense for FY 2024-2025.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening balance	250.45	288.38
Addition	62.07	6.07
Deletion	-	0.76
Depreciation	42.53	43.24
Ending balance of fixed assets	269.99	250.45

• Other Expenses

The other expenses for the financial year 2024-25 stood at Rs. 605.37 Lakhs whereas for the financial year 2023-24, it stood at Rs. 643.31 Lakhs representing a decrease of 5.90%.

Reason: There is a decrease in ‘Other expenses because of the decrease in rent, rates and taxes, repair & maintenance, travelling & conveyance, business promotion expenses tender charges, vehicle hire charges, rebate & discount and miscellaneous expenses, The other expenses have declined due to better economies of scale and efficient management of resources, as shown below:

		(Amounts in Lakhs)
Particulars	FY 2024-25	FY 2023-24
Rent, rates & taxes	82.39	93.40
Repair & Maintenance	0.67	22.31
Travelling & Conveyance	77.12	112.27
Business Promotion	28.30	31.95
Tender Charges	0.95	5.67
Vehicle Hire Charges	78.48	117.08
Rebate & Discount	-	11.36
Miscellaneous	18.57	85.72

• Restated Profit before Tax

The restated profit before tax for the financial year 2024-25 stood at Rs. 1,246.50 Lakhs whereas for the financial year 2023-24, it stood at Rs. 602.63 Lakhs representing an increase of 106.84%.

• Tax Expenses

The Tax Expenses for the financial year 2024-25 stood at Rs. 318.25 Lakhs out of which the Current Tax was Rs. 319.30 Lakhs and the Deferred Tax being Rs. (1.05) Lakhs whereas in the Financial Year 2023-24 it stood at Rs. 140.71 Lakhs out of which for current tax being Rs. 156.99 Lakhs and deferred tax being Rs. (16.28) Lakhs representing an increase of 126.18%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax which was Rs. 602.63 Lakhs in the financial year 2023-24 but in financial year 2024-25 it came to Rs. 1,246.50 Lakhs.

• Restated Profit after Tax

The restated profit after tax for the financial year 2024-2025 stood at Rs. 928.26 Lakhs whereas for the financial year 2023-24, it stood at Rs. 461.92 Lakhs representing an increase of 100.95%.

Reason for change in the Revenue from operation and Profit after tax

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Revenue from Operation	12,148.16	9,921.78
Change in %	22.44%
Expenses	10,937.23	9,349.16
Change in %	16.99%
Profit after tax	928.26	461.92
Pat Margin in %	7.64%	4.66%

Increase in PAT Justification:

IC Electricals Limited witnessed a significant increase in Profit after Tax by 100.95%, reaching Rs. 928.26 Lakhs from Rs. 461.92 Lakhs in the previous year. This increase is attributed to the following:

• The substantial increase of 22% in the sales of the company has led to improvement in economies of scale. The company has registered growth in all its divisions including:

1. Electronic Division

2. Rotating Machines Division

3. Railways Electrifications Divisions

The order book of the company has registered a sharp growth of almost 54% which has helped the company to increase its turnover in FY 2025.

(Amount in Lakhs)

Particulars	FY25	FY24
	Audited	Audited
Opening Order Book	11,711.14	14,771.47
New Orders Added	10,571.39	6,861.44
Orders Executed	12,148.16	9,921.77

• The company is focusing on better cost management as the total expenses of the company as compared to sales declined by 4% in FY2025.

(Amount in Lakhs)

Particulars	FY24	FY25
	Audited	Audited
Sales	9,921.78	12,148.16
Total Expenses	9,349.15	10,937.23
Percentage	94%	90%

3. Improved working capital management enabled the company to avail cash discounts by making early payments to creditors, which is a key factor contributing to the increase in Profit After Tax (PAT) for FY 2025. As a result, the companys creditor holding period significantly decreased from 269 days to 140 days during the year.

4. The companys employee cost declined from Rs. 986 Lakhs in FY 2024 to Rs. 957 Lakhs in FY 2025. As a percentage of total sales, employee cost reduced from 9.94% to 7.88% during the year. This improvement is attributable to effective resource management and the efficient deployment of employees to achieve optimal production levels.

5. The company has also achieved a reduction in other expenses, which declined by approximately 1.5% as a proportion of total sales compared to FY 2024. Other expenses accounted for 6.48% of total sales in FY 2024, which decreased to 5.07% in FY 2025, reflecting improved cost efficiency.

The company has secured certain contracts with improved profit margins compared to previous engagements. The REC division, which integrates both product supply and service components, contributes positively to overall

FISCAL YEAR ENDED MARCH 31, 2026, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2025 (BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS)

• Total Income

Total income for the financial year 2025-26 stood at Rs. 14,381.17 Lakhs whereas in the financial year 202425 it stood at Rs. 12,238.88 Lakhs representing an increase of 17.50%.

Reason: The increase in the total income of the company is due to increase in revenue from operations and other income.

Revenue from operations

Revenue from operations for the financial year 2025-2026 stood at Rs. 14,304.15 Lakhs whereas for the financial year 2024-2025 stood at Rs. 12,188,59 Lakhs representing an increase of 17.36%.

Reason: The major reason for growth in sales is due to increase in sale of product by the company and due to unbilled revenue.

A significant portion of the Companys operations relates to contractual projects, particularly in the railway sector, a substantial part of the work executed during the year could not be billed before the financial year- end despite the completion of the relevant contractual milestones. Consequently, such amounts have been recognised as unbilled revenue and are expected to be billed in the subsequent financial year.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Sale of Goods - Domestic	7,901.75	6,051.62
Sale of Goods - Export	509.36	576.95
Sale of Service	3,781.68	4,723.54
Unbilled Revenue	2,111.36	836.48
Total	14,304.15	12,188.59
Year on Year Increase/(Decrease)	17.36%

• Other Income

Other income for the financial year 2025-2026 stood at Rs. 77.02 Lakhs whereas for the financial year 20242025 stood at Rs. 50.29 Lakhs representing an increase of 53.14%.

Reason: The other income is Primarily driven by higher interest income, profit on sale of fixed asset and due to other operating revenue.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Interest Income	44.05	35.62
Forex Gain (Loss)	11.90	5.94
Duty Draw Back and Other Income	7.57	8.73
Other operating revenue (Duty Drawback and Other Income)	13.50	-
Total	77.02	50.29

Expenditure

• Total Expenses

Total expenses for the financial year 2025-2026 stood at Rs. 12,488.19 Lakhs whereas for the financial year 2024-2025 stood at Rs. 10,974.68 Lakhs representing an increase of 13.79%

Reason: The increase is on account of the increase in the cost of consumption, direct expenses, employee benefit expenses, finance cost, depreciation and other income.

• Cost of Consumption of Material

The Cost of Consumption for the Financial Year 2025-2026, stood at Rs. 8,644.24 Lakhs whereas in Financial Year 2024-2025, stood at Rs. 8,269.88 Lakhs representing an increase of 4.53%.

Reason: The raw material consumption of the company has mainly increased due to increase in revenue of the company.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Opening Stock of Raw Material	6,577.68	5,867.13
Add- Purchase During the years	9,438.93	8,980.43
Less- Closing Stocks of Raw Material	(7,372.37)	(6,577.68)
Total	8,644.24	8,269.88

• Change in Inventories

Change in Inventories for the Financial Year 2025-26, stood at Rs (466.63) Lakhs Whereas in Financial Year2024-25, stood at Rs. (237.53) Lakhs representing an decrease of 96.45%.

Reason: The percentage decrease in change in inventories due to increase in closing stock in the FY 2026.

(Amount in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Opening Stock of Finished Goods	1,382.17	1,097.85
Opening Stock of WIP	549.74	596.53
Less: Closing Stock of Finished Goods	1,486.02	1,382.17
Less: Closing Stock of WIP	912.51	549.74
Total	(466.63)	(237.53)

The change in the Companys inventory levels was primarily attributable to an increase in the closing stock of finished goods and work-in-progress. As a significant portion of the Companys operations is executed during the last quarter of the financial year, certain products and contract-related inventories could not be billed or dispatched to the Railways before the year-end. Consequently, these inventories remained on hand at the balance sheet date, resulting in higher closing inventory levels. Such inventory is expected to be billed and realised in the subsequent financial year in the normal course of business.

• Direct Expenses

Direct Expenses for the Financial Year 2025-26, stood at Rs. 1,312.99 Lakhs Whereas in Financial Year 202425, stood at Rs. 576.40 Lakhs representing an increase of 127.79%.

Reason: The increase in other direct expenses of the company is mainly due to an increase in job work charges, freight & cartage inward, packing materials and consumption of stores and spares.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Job Work Charges	1,016.87	328.13
Freight & Cartage Inward	166.50	127.54
Packing Materials	25.87	29.69
Consumption of stores & Spares	63.19	53.56

The direct expenses of the company have actually Increased on percentage to sales

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Percentage of Direct expenses to sales	9.18%	4.73%

The increase in direct expenses during the year was primarily attributable to higher job work costs incurred in the contractual division. As several major projects progressed towards completion during FY 2025-26, the requirement for outsourced construction and execution activities increased. Since a significant portion of such work is carried out through external contractors, the corresponding job work expenses increased during the year.

• Employment Benefit Expenses

Employee benefit expenses for the financial year 2025-26 stood at Rs. 1,227.68 Lakhs whereas for the financial year 2024-25 stood at Rs. 991.31 Lakhs representing a increase of 23.84%.

Reason: The increase in employee benefit expenses during the year was primarily attributable to the annual revision in wages and salaries in line with normal business practices. The Company also rewarded employees for improved productivity and operational efficiencies, which contributed to enhanced business performance and margins. Additionally, the expansion of the workforce by approximately 10% compared to FY 2024-25 to support growing business operations further contributed to the increase in employee benefit expenses.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Salaries, wages and incentives	1,069.04	826.55
Total	1,069.04	826.55

• Finance Cost

Finance costs for the financial year 2025-26 stood at Rs. 808.06 Lakhs whereas for the financial year 202425 stood at Rs. 696.12 Lakhs representing decrease of 16.08%.

Reason: The increase in the Companys finance costs during the year was primarily attributable to the enhancement and higher utilisation of working capital facilities to support the growth in business operations. In addition, the Company availed additional borrowings from financial institutions to meet its operational

and business expansion requirements. These factors collectively contributed to the increase in finance costs as compared to the previous financial year.

• Depreciation and Amortization Expenses

The depreciation and amortization expenses for the financial year 2025-26 stood at Rs. 77.97 Lakhs whereas for the financial year 2024-25 stood at Rs. 46.78 Lakhs representing an increase of 66.67%.

Reason: The change in depreciation expense is primarily attributable to the movement in the Written Down Value (WDV) of the Companys fixed assets. Further, certain capital additions were made towards the end of the previous financial year and during FY 2025-26, resulting in a proportionate depreciation charge in the year of acquisition and a full-year depreciation impact in FY 2025-26.

(Amount in LakhS)

Particulars	FY 2025-26	FY 2024-25
Opening balance	280.65	265.48
Addition	104.83	62.07
Deletion	20.97	0.12
Depreciation	57.43	46.78
Ending balance of fixed assets	307.08	280.65

• Other Expenses

The other expenses for the financial year 2025-26 stood at Rs. 884.17 Lakhs whereas for the financial year 2024-25 stood at Rs. 631.72 Lakhs representing an increase of 39.96%.

Reason: The other expenses have increased in line with increase in turnover of the company as compared to FY 2024-25.

(Amounts in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Freight & cartages Outward	80.96	75.35
Insurance Charges	62.92	42.75
Director Sitting Fees	10.50	11.00
Technical, Legal & professional expenses	53.66	89.49
Rent, rates and taxes	145.24	82.39
Repair & maintenance	22.29	0.67
Travelling & conveyance	148.28	84.43
Brokerage & Commission	18.19	19.00
Business Promotion Expenses	32.19	28.30
Security Expenses	87.90	57.85
Vehicle running Expenses	143.90	80.59
Miscellaneous Expenses	18.61	21.97

• Restated Profit before Tax

The restated profit before tax for the financial year 2025-26 stood at Rs. 1,892.68 Lakhs whereas for the financial year 2024-25 stood at Rs. 1,246.20 Lakhs representing an increase of 49.71%.

• Tax Expenses

The Tax Expenses for the financial year 2025-26 stood at Rs. 482.77 Lakhs out of which the Current Tax was Rs. 492.44 Lakhs and the Deferred Tax being Rs. (9.79) Lakhs and excess provision made/(reversed) for previous year 0.12 lakh whereas in the Financial Year 2024-25 stood at Rs. 322.71 Lakhs out of which the Current Tax was Rs. 324.24 Lakhs and the Deferred Tax being Rs. (1.53) Lakhs representing an increase of 49.60%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax which was Rs. 1,246.20 Lakhs in the financial year 2024-25 but in financial year 2025-26 it came to Rs. 1,892.98 Lakhs.

• Restated Profit after Tax

The restated profit after tax for the financial year 2025-2026 stood at Rs. 1,409.90 Lakhs whereas for the financial year 2024-2025 stood at Rs. 941.49 Lakhs representing an increase of 49.75%.

Reason for change in the Revenue from operation and Profit after tax

(Amount in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Revenue from Operation	14,304.15	12,188.59
Change in %	17.36%
Expenses	12,488.19	10,974.68
Change in %	13.79%
Profit after tax	1,409.90	941.49
Pat Margin in %	9.86%	7.72%

Increase in PAT Justification:

IC Electricals Limited witnessed a significant increase in Profit after Tax by 49.78%, reaching Rs. 1409.90 Lakhs from Rs. 941.49 Lakhs in the previous year. This increase is attributed to the following:

• The improvement in the Companys gross profit margin was primarily driven by the growth in revenue from operations, resulting in enhanced economies of scale. During the year, the electronic division recorded a significant growth of approximately 70% in sales, increasing from Rs. 2,568.00 lakhs in the previous financial year to Rs. 4,371.67 lakhs in FY 2025-26. Being the largest contributor to the Companys gross profit and generating an average gross profit margin of approximately 45%, which is higher than that of the other business divisions, the increased contribution of the electronic division to the overall revenue mix had a favourable impact on the Companys gross profitability

Due to better working capital management, the company is able to get cash discounts from creditors by paying them early which is the other major reasons for increase in PAT of the company for FY2026.

The improvement in the Companys profitability was primarily driven by the execution of contracts with higher margins compared to those undertaken in previous years. In addition, the Electronic Division, which comprises a combination of product supply and related services, generates relatively higher margins, and its increased contribution to the overall business had a favourable impact on the Companys profitability.

Cash flow from Operating Activity

Reasons for negative cash flow from operating activity

The cash flow from operation for the FY26 (1,109.55) & for the FY25 (965.40) representing an increase of 14.93%.

Reason: The increase in negative cash flows from operating activities during the year was primarily attributable to a higher level of trade receivables. As a significant portion of the Companys sales is generated during the last quarter of the financial year, collections from such sales are typically realised in the subsequent period. Consequently, trade receivables remained elevated at the balance sheet date, leading to a temporary increase in working capital requirements and an adverse impact on operating cash flows.

Other Receivables

The other receivable is 3,668.27 lakhs for the financial year 25-26 and is Rs. 2,636.30 Lakhs for the FY24-25 Reason for increase in other receivables:

The major reason for increase in the Other Receivables is due to increase in unbilled revenue. The company major sales happen in the last quarter of every financial year. The unbilled revenue majorly contributes towards the contracting side of the business. The company in the contractual division has performed the work but not able to bill the same in current Financial Year. The same will get billed in the FY 2025-26.

(Amount in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Current Maturity of Railways (Earnest money deposit)	793.91	1,125.47
Unbilled Revenue	2,111.36	836.48
FDR with Bank (Held as a Margin Money and as a Collateral Security with Banks)	762.82	674.35

Trade Payable

The trade payable is Rs. 3,867.47 Lakhs for the FY25-26 and Rs. 3,612.94 Lakhs for the FY24-25.

Reason for increase in trade payable:

The increase in trade payable has increased due to major purchases happens in the last month of the FY 2025-26. The holding period of trade payables has declined from 155 days in FY 2024-25 to 150 days in FY 2025-26

The details of Trade payables are as follows:

(Amount in lakhs)

Particulars	FY 2025-26	FY 2024-25
Total outstanding dues from micro enterprises & small enterprises	621.41	1,601.45
Total outstanding dues of creditors other than micro enterprises & small enterprises	3,246.06	2,011.49

FISCAL YEAR ENDED MARCH 31, 2025, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2024 (BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS)

Revenues

• Total Income

Total income for the financial year 2024-25 stood at Rs. 12,238.88 Lakhs whereas in the financial year 202324 it stood at Rs. 99,74.85 Lakhs representing an increase of 22.81%.

Reason: The increase in the total income of the company is due to a significant increase in the revenue of the company general growth in the business operations of the Company. The company is having 3 divisions manufacturing of electronic components for railways, rotating motor division and EPC work for railways electrification.

• Revenue from operations

Revenue from operations for the financial year 2024-2025 stood at Rs. 12,188.59 Lakhs whereas for the financial year 2023-24, it stood at 9,924.92 Lakhs representing an increase of 22.81%.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Sale of Goods - Domestic	6,051.62	4,300.63
Sale of Goods - Export	576.95	974.03
Sale of Service	4,723.54	4,650.26
Unbilled Revenue	836.48	-
Total	12,188.59	9,924.92
Year on Year Increase/(Decrease)	22.81%

Reason for Increase in Revenue from Operation

Revenue from operations for the financial year 2024-2025 stood at Rs. 12,188.59 Lakhs whereas for the financial year 2023-24, it stood at 9,924.92 Lakhs representing an increase of 22.81%.

The increase in the total income of the company is due to a significant increase in the revenue of the company general growth in the business operations of the Company. The company is having 3 divisions manufacturing of electronic components for railways, rotating motor division and EPC work for railways electrification. The major turnover of the company happens in last quarter of the financial year.

The company procures orders on the basis of bidding done to railways. The company awards the orders on the basis of lowest bid. The award has been done on the basis of technical and financial qualifications. The company enjoys the priority in awarding contracts due to their legacy and specialisation in manufacturing of products. The order book of the company for the last 2 years has increased substantially as the company as getting more and more orders. The details of same are provided below.

(Amount in Lakhs)

Particulars	FY24	FY25
	Audited	Audited
Opening Order Book	14,771.47	11,711.14
New Orders Added	6,861.44	10,571.39
Orders Executed	9,921.77	12,148.16
Outstanding Order Book	11,711.14	10,134.37

• Other Income

Other income for the financial year 2024-2025 stood at Rs. 50.29 Lakhs whereas for the financial year 202324, it stood at Rs. 49.94 Lakhs representing an increase of 0.71%.

Reason: The increase in ‘Other Income is primarily attributable to higher interest income. However, this was partially offset by a decline in export realization forex gains and other operating revenues consisting sales of duty drawback. As a result, the overall increase in other income was limited to 0.71%.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Interest Income	35.62	29.99
Forex Gain (Loss)	5.94	1.71
Duty Draw Back and Other Income	8.73	18.24
Total	50.29	30.01

Expenditure

• Total Expenses

Total expenses for the financial year 2024-2025 stood at Rs. 10,974.68 whereas for the financial year 202324, it stood at Rs. 9,372.05 Lakhs representing an increase of 16.99%

Reason: The increase in total expenses on account of the increase in the cost of consumption, direct expenses, and employee benefit expenses.

• Cost of Consumption

The Cost of Consumption for the Financial Year 2024-2025, stood at Rs. 8,269.88 Lakhs whereas in Financial Year 2023-24 it stood at Rs. 6,162.80 Lakhs representing an increase of 34.19%.

Reason: The company operates through three divisions: manufacturing electronic components for railways, the rotating motor division, and the REC division handling railway electrification contracts. The REC division contributes approximately 40% to the companys total turnover. Due to the longer duration of EPC contracts and dependency on site availability provided by the Railways, the REC division experiences an extended stock holding period.

The increase in raw material consumption is primarily attributable to a rise in the companys closing inventory. Meanwhile, purchases have remained relatively stable, constituting approximately 74% of sales over the past two years, shown as follows.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening Stock of Raw Material	5,867.13	4,768.69
Add- Purchase During the years	8,980.43	7,261.23
Less- Closing Stocks of Raw Material	(6,577.68)	(5,867.13)
Total	8,269.88	6,162.80

• Change in Inventories

Change in Inventories for the Financial Year 2024-25, stood at Rs. (237.53) Lakhs Whereas in Financial Year 2023-24 it stood at Rs. 269.50 Lakhs representing a decrease of 188.14%.

Reason: The percentage decrease in change in inventories due to increase in closing stock in the FY 2024.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening Stock of Finished Goods	1,097.85	1,371.95
Opening Stock of WIP	596.53	591.93
Less: Closing Stock of Finished Goods	1,382.17	1,097.85
Less: Closing Stock of WIP	549.74	596.53
Total	(237.53)	269.50

• Direct Expenses

Direct Expenses for the Financial Year 2024-25, stood at Rs. 576.40 Lakhs Whereas in Financial Year 202324 it stood at Rs. 553.20 Lakhs representing an increase of 4.19%.

Reason: The percentage increase in other direct expenses of the company is in line with FY 2024. The absolute amount has increased due to an increase in job work charges, freight & cartage inward & packing materials which is in proportionate to increase in turnover of the company and also decline in consumption of stores & spares.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Job Work Charges	328.13	294.15
Freight & Cartage Inward	127.54	125.89
Packing Materials	29.69	15.51
Consumption of stores & Spares	53.56	65.58

The direct expenses of the company have actually reduced on percentage to sales due to better resource management and increase in economies of scale.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Percentage of Direct expenses to sales	4.71%	5.55%

• Employment Benefit Expenses

Employee benefit expenses for the financial year 2024-25 stood at Rs. 991.31 Lakhs whereas for the financial year 2023-24, it stood at Rs. 1001.94 Lakhs representing a decrease of 1.06%.

Reason: Employee benefit expenses decreased as a result of efficient resource management and the realization of economies of scale. The company optimized its workforce in alignment with production requirements, which included the strategic exit of redundant position leading to a reduction in overall salaries, wages, and incentives. At the same time, the company rewarded high-performing employees with enhanced incentives, aligning compensation with productivity improvements, shown as follows.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Salaries, wages and incentives	826.55	905.58
Total	826.55	905.58

• Finance Cost

Finance costs for the financial year 2024-25 stood at Rs. 696.12 Lakhs whereas for the financial year 202324, it stood at Rs. 697.26 Lakhs representing decrease of 0.16%.

• Depreciation and Amortization Expenses

The depreciation and amortization expenses for the financial year 2024-25 stood at Rs. 46.78 Lakhs whereas for the financial year 2023-24, they stood at Rs. 45.48 Lakhs representing an increase of 2.88%.

Reason: the increase is primarily attributable to the higher Written Down Value (WDV) of fixed assets. As the additions to fixed assets were made towards the end of the financial year, their impact on depreciation for FY 2024-25 remained minimal.

(Amount in Lakhs.

Particulars	FY 2024-25	FY 2023-24
Opening balance	265.48	291.12
Addition	62.07	20.60
Deletion	0.12	0.76
Depreciation	46.78	45.48
Ending balance of fixed assets	280.65	265.47

• Other Expenses

The other expenses for the financial year 2024-25 stood at Rs. 631.72 Lakhs whereas for the financial year 2023-24, it stood at Rs. 641.87 Lakhs representing a decrease of 1.58%.

Reason: There was a marginal decrease in certain components of ‘Other Expenses, including rent, rates and taxes, repair and maintenance, travel and conveyance, business promotion, tender charges, vehicle hire, rebates and discounts, and miscellaneous expenses. However, this reduction was offset by an increase in outward freight and cartage, as well as insurance expenses, driven by the expansion of business operations. As a result, overall ‘Other Expenses registered a modest increase of 1.58%.

The other expenses have declined due to better economies of scale and efficient management of resources.

(Amounts in Lakhs)

Particulars	As at 31st March 2025	As at 31st March 2024
Freight & cartages Outward	75.35	18.58
Insurance Charges	42.75	25.83
Director Sitting Fees	11.00	-
Technical, Legal & professional expenses	89.49	61.14
Rent, rates and taxes	82.39	93.40
Repair & maintenance	0.67	22.34
Travelling & conveyance	84.43	116.60
Brokerage & Commission	19.00	2.72
Business Promotion Expenses	28.30	31.95
Security Expenses	57.85	33.08
Vehicle running Expenses	80.59	117.29
Miscellaneous Expenses	21.97	71.74

• Restated Profit before Tax

The restated profit before tax for the financial year 2024-25 stood at Rs. 1,246.20 Lakhs whereas for the financial year 2023-24, it stood at Rs. 602.81 Lakhs representing an increase of 109.72%.

• Tax Expenses

The Tax Expenses for the financial year 2024-25 stood at Rs. 324.24 Lakhs out of which the Current Tax was Rs. 324.24 Lakhs and the Deferred Tax being Rs. (1.53) Lakhs whereas in the Financial Year 2023-24 it stood at Rs. 140.55 Lakhs out of which for current tax being Rs. 157.03 Lakhs and deferred tax being Rs. (16.48) Lakhs representing an increase of 129.60%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax which was Rs. 602.81 Lakhs in the financial year 2023-24 but in financial year 2024-25 it came to Rs. 1,246.20 Lakhs.

• Restated Profit after Tax

The Company recorded a significant improvement in Profit After Tax, increasing by 103.67%, from Rs. 462.26 lakhs to Rs. 941.49 lakhs.

Increase in PAT Justification

a. Improved Economies of Scale

The 22.81% increase in sales allowed better absorption of fixed overheads, contributing to improved profitability across divisions.

b. Effective Cost Reduction and Efficiency Measures

Although revenue increased substantially, total expenses grew at a lower rate, improving cost ratios:

(Amount in Lakhs)

Particulars	FY 2024-	FY 2023-
Sales	12,188.59	9,924.92
Total Expenses	10,974.68	9,372.05
Expenses as % of Sales	90%	94%

This 4% reduction in expenses as a percentage of revenue was driven by:

1. Improved Working Capital and Cash Discount Benefits

• Better receivable turnover and cash flow management enabled early payments to vendors.

• The Company availed cash discounts, directly contributing to improved profitability.

2. Reduction in Employee Benefit Expenses

Employee cost decreased from Rs. 1,001.94 lakhs to Rs. 991.31 lakhs (down 1.06%) due to:

• Optimised manpower based on production demands.

• Phase-out of redundant positions with minimal impact on overall workforce (less than 1%).

• Enhanced incentives to high-performing employees, leading to higher productivity.

• Improved resource allocation and deployment efficiencies.

3. Reduction in Other Operating Expenses

Other expenses decreased from Rs. 641.87 lakhs to Rs. 631.72 lakhs (down 1.58%), mainly due to:

• Lower rental, rate & taxes, travel, repairs, tender charges, and business promotion costs.

• Reduced vehicle hire and discount expenses.

• Partially offset by higher outward freight & cartage and insurance costs, attributable to expanded operational activities.

c. Improvement in Contract Mix and Higher-Margin Business

• The Company executed higher-margin contracts in FY 2025, particularly in the REC/EPC division.

• Many REC projects include both product supply and onsite services, providing better blended margins.

• Execution of higher-value electrification packages contributed to overall profitability growth.

Cash flow from Operating Activity

Reasons for negative cash flow from operating activity

The cash flow from operation for the FY24 (147.48) & for the FY25 (965.40) representing a decrease of 554.60%.

The decline in operating cash flow is mainly due to increase in other receivables and decrease in Trade payable which is shown as below:

(Amount in Lakhs.)

Particulars	FY 2024-25	FY 2023-24
(Increase) / Decrease in Other Receivables	(1,382.74)	(11.91)
Increase / (Decrease) Trade Payables	(1,583.12)	571.71

Other Receivables

The other receivable is 2,636.30 lakhs for the financial year 24-25 and is Rs. 1,270.22 Lakhs for the FY 23-24 Reason for increase in other receivables:

Other current assets for FY 2024-25 include the current maturity of railway earnest money deposits, unbilled revenue, and fixed deposits (FDRs) held with banks as margin money and general security

The current maturity of earnest money deposits increased from Rs. 699.79 lakhs in FY 2023-24 to Rs. 1,125.47 lakhs in FY 2024-25, primarily due to their reclassification from non-current to current assets.

Unbilled revenue amounting to Rs. 836.48 lakhs was recognised since the related work had been completed but could not be certified and invoiced by the concerned authorities before the end of FY 2024-25.

FDRs with banks, maintained as margin money and general security, also rose from Rs. 570.43 lakhs in FY 2023-24 to Rs. 674.35 lakhs in FY 2024-25.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Current Maturity of Railways (Earnest money deposit)	1,125.47	699.79
Unbilled Revenue	836.48	-
FDR with Bank (Held as a Margin Money and as a Collateral Security with Banks)	674.35	570.43

Trade Payable

The trade payable is Rs. 3,612.94 Lakhs for the FY24-25 and Rs. 5,196.06 Lakhs for the FY 23-24.

Reason for decrease in trade payable:

The company has started given more advances to the trade payables; it increases from Rs. 546.80 Lakhs in FY 23-24 to Rs. 724.72 Lakhs in FY 24-25 and getting trade discount or timely delivery or proper supply of good quality raw materials. Similarly, trade payables to other creditors declined from Rs. 3,095.12 lakhs in FY 202324 to Rs. 2,011.49 lakhs in FY 2024-25.

The total outstanding trade payables to Micro and Small Enterprises (MSEs) of IC Electricals Company decreased from Rs. 2,100.94 lakh in FY 2024 to Rs. 1,601.45 lakh in FY 2025. This reduction is primarily due to timely clearance of dues during the year.

The Company continues to comply with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, and there have been no delays in payments to MSE vendors beyond the prescribed timelines.

The details of Trade payables are as follows:

(Amount in lakhs)

Particulars	FY 2024-25	FY 2023-24
Total outstanding dues from micro enterprises & small enterprises	1,601.45	2,100.94
Total outstanding dues of creditors other than micro enterprises & small enterprises	2,011.49	3,095.12

INFORMATION REQUIRED AS PER ITEM (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:

1. Unusual or infrequent events or transactions:

Except as described in this Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.

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

Other than as described in the section titled Risk Factors beginning on page 22 of this Red Herring Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company 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 as described in this Red Herring Prospectus, particularly in the sections Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 22 and 312, respectively, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income from continuing operations.

4. Income and Sales on account of major product/main activities:

Income and sales of our Company on account of major activities derives from the business of sale of ayurvedic products to end consumers.

5. Future changes in relationship between costs and revenues, in case of events such as future increase in

marketing or advertisement costs or prices that will cause a material change are known:

Our Companys future costs and revenues can be indirectly impacted by an increase in marketing and advertising costs as the company is required to continuously advertise and market on various platforms to promote its products with a view to increase its sale.

6. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by competition, demand/supply situation, Indian Government Policies, and interest rates quoted by banks & others.

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

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

8. Total turnover of each major industry segment in which the issuer company operates

The Company operates in the Electrical & Electronic Component Industry. Relevant industry data, as available, has been included in the chapter titled “Our Industry” beginning on page 151 of this Red Herring Prospectus.

9. Status of any publicly announced new products or business segments:

Our Company has not announced any new services and product and segment / scheme, other than disclosure in this Red Herring Prospectus.

10. The extent to which the business is seasonal:

Our business does not depend to a certain extent on the seasonal, environmental and climate changes.

11. Competitive Conditions

We face competition from existing and potential competitors, which is common for any business. Over a period of time, we have developed certain competitive strengths which have been discussed in section titled Our Business on page 207 of this Red Herring Prospectus.