Iykot Hitech Toolroom Ltd Management Discussions

For the Financial Year ended 31^st March, 2025

This Management Discussion and Analysis Report presents a detailed overview of the operational and financial performance of the Company for the financial year 2024-25, along with the industry outlook, opportunities, risks, and internal controls, in accordance with the provisions of the Companies Act, 2013 and Regulation 34(3) read with Schedule V of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015.

1. Industry Structure and Developments Economic Overview:

The Indian economy remained resilient in FY 2024-25 amidst global uncertainties, inflationary pressures, and interest rate volatility. With a projected GDP growth of approximately 6.8% for FY25, India continues to be among the fastest-growing major economies. Government-led reforms, infrastructure spending, and incentives under the PLI scheme continue to boost the manufacturing sector.

Industry Overview:

The Home and Kitchen Appliances industry in India has been witnessing robust growth due to rising disposable incomes, increasing urbanization, and changing consumer lifestyles. Consumers are increasingly opting for technologically advanced and energy- efficient appliances. The push for "Make in India” and favorable policy initiatives are expected to further support domestic manufacturing.

Your company, having ventured into contract and part manufacturing of kitchen and home appliances under the brand ZADASTAR, is well-positioned to benefit from these macro trends.

2. Opportunities and Threats Opportunities:

• Rising Demand for home appliances due to urbanization and lifestyle changes.

• Increasing trend of outsourced manufacturing by global and domestic brands.

• Brand recognition potential through ZADASTARs unique offerings.

• Export potential with quality and cost competitiveness.

• Policy support under "Atmanirbhar Bharat” and production-linked incentives. Threats:

• Intense competition from established brands with strong distribution networks.

• Volatility in raw material prices affecting cost structures.

• Technological obsolescence if not upgraded regularly.

• Dependency on consumer sentiment and economic cycles.

• Risk of supply chain disruptions due to global uncertainties or geopolitical factors.

3. Segment-wise or Product-wise Performance

As of now, the Company operates in a single business segment - the manufacturing [contractual and part-based] and marketing of kitchen and home appliances under the brand ZADASTAR.

The revenue from operations increased significantly from Rs.133.38 Lakhs in FY 2023- 24 to Rs.501.26 Lakhs in FY 2024-25, indicating strong traction in the product line and growing market acceptance.

4. Outlook

The Company remains optimistic about the future growth prospects driven by expansion in product lines, increased brand awareness of ZADASTAR, and enhanced customer outreach through digital and retail channels. Strategic investments in technology, product development, and supply chain efficiencies are expected to drive sustainable growth and improve profitability.

The Company is exploring new B2B partnerships, expanding its manufacturing capacity, and investing in R&D to meet evolving consumer needs.

5. Risks and Concerns

Key risks faced by the Company include:

• Operational Risks: Delay in supply chain or production cycles can impact delivery schedules.

• Financial Risks: Continued losses may strain working capital and limit funding flexibility.

• Market Risks: Dependence on a single segment and early-stage brand may limit scale in the short term.

• Compliance and Regulatory Risks: The Company operates in a regulated environment and must adhere to safety, environmental, and quality norms.

The Company regularly reviews its risk management framework to mitigate these risks effectively.

6. Internal Control Systems and their Adequacy

The Company has established an adequate system of internal controls to ensure:

• Efficiency and accuracy of accounting and financial reporting.

• Compliance with statutory requirements.

• Protection of assets from unauthorized use or loss.

The internal control systems are periodically reviewed by the Audit Committee and the Board of Directors to ensure adequacy and operational effectiveness. Independent internal audits are conducted to evaluate the functioning and suggest improvements, wherever necessary.

7. Discussion on Financial Performance with respect to Operational Performance

During FY 2024-25, the Companys revenue from operations grew significantly by over 275%, from Rs. 133.38 Lakhs to Rs. 501.26 Lakhs, indicating substantial operational expansion and improved market traction.

Despite the increase in revenue, the Company reported a net loss of Rs. [104.54) Lakhs, compared to Rs. [198.69] Lakhs in the previous year. The losses were primarily due to:

• High operational and administrative expenses associated with the scale-up phase.

• Continued investments in branding and product development.

• Initial inefficiencies in manufacturing and distribution, which are being streamlined.

The reduction in net loss compared to the previous year reflects positive operational leverage, and the Company expects a turnaround as revenue scales further.

8. Material Developments in Human Resources / Industrial Relations Front, including number of people employed

The Company considers its human capital as a key driver of success. During FY 2024- 25, it focused on building a competent and motivated team across manufacturing, quality control, sales, and marketing.

As of 31^st March 2025, the Company employed 10 employees across various functions. Key initiatives included:

• Talent acquisition in product design and marketing teams.

• Skill development and training programs for production staff.

• Introduction of performance-based incentives and employee engagement programs.

Industrial relations remained cordial throughout the year.

9. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

The said details with respect to details of significant changes in key financial ratios are given in Note No. 7 of the notes forming part of audited financial statements of the Company for the year ended 31^st March 2025.

Cautionary Statement:

This report contains forward-looking statements that are based on the beliefs and assumptions of the management. Actual results may differ materially from those expressed due to various economic, operational, and environmental factors.

Place: Chennai	By and on behalf of Board of Directors
Date: 04th August 2025	For Iykot Hitech Toolroom Limited
	Sd/-	Sd/-
	Likhitta Dugar	Velli Paramasivam
	Whole-Time Director	Director
	(DIN:09768742)	(DIN:09766538)