Jyoti Global Plast Ltd Management Discussions

OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended on March 31, 2025, March 31, 2024, March 31, 2023. You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in this Red Herring Prospectus. You should also read the section entitled "Risk Factors" beginning on page 26 of this Red Herring Prospectus, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Jyoti Global Plast Limited (erstwhile "Jyoti Global Plast Private Limited"), our Company. Unless otherwise indicated, financial information included herein are based on our "Restated Financial Statements" for Financial Year ended on March 31, 2023, March 31, 2024, March 31, 2025, included in this Red Herring Prospectus beginning on page 215.

BUSINESS OVERVIEW

Our company is engaged in the business of plastic & FRP (Fiber-Reinforced Polymer) moulding, providing custom solutions based on client-specific requirements for polymer-based products (HDPE-PP grade) such as drums, carboys, jerrycans, barrels, pail buckets, toys, automobile parts, etc. and FRP based products such as drone components and connectors. Our products are used in industries such as pharmaceutical, chemical, food & beverage, lube and industrial oil, adhesives, childcare, automotive, defence and aerospace, etc.

We closely collaborate with our clients to understand their unique requirements, optimizing the manufacturing process to meet their individual needs, offering superior quality and cost-effective solutions. With a commitment to delivering value, our products are crafted using cutting-edge moulding technologies. We leverage advanced blow moulding and injection moulding technologies to produce a wide range of packaging and non-packaging products, including HDPE drums, barrels, jerrycans, bottles, toys etc., and automobile components and defence & aerospace products such as drone components and connectors. Additionally, injection moulding technology is also utilized on a job-work basis for creating durable HDPP-based products such as pail buckets. Presently, we operate two strategically located state-of-the-art manufacturing units which two are located in Rabale, Navi Mumbai. We are proposed to start our proposed manufacturing unit III at Mahad, Raigad. We started commercial production in the year 2005.

Our current combined production capacity is 7,416 MT p.a. One of our promoters, Bhawanji Shah, started the business of manufacturing plastic containers in the year 1990 as a partnership firm, "Jyoti Industries", in Mumbra, Mumbai. In 2004, "Jyoti Polycontainers Private Limited" was incorporated for manufacturing blow-moulded plastic containers. It was operating from Rabale, Navi Mumbai. Keeping up with the growing demand, the company expanded its operations by adding more machines, products and clientele to its arsenal over the years. In 2022, Jyoti Polycontainers Private Limited was renamed to "Jyoti Global Plast Private Limited" to better reflect its vision of operating and diversifying into different sectors. In January of 2025, our company was converted into a public limited company Jyoti Global Plast Limited. Our sustained growth of over 20 years which we have dedicated only to Plastic Engineering has enabled us to offer the widest range of products & solutions under one roof, which are 100% made in India. We run our operations from 2 plants, located at Navi Mumbai, with a dedicated team of over 45 skilled as well as unskilled personnel, serving more than 1000 clients.

Our manufacturing units are equipped with latest technology, advanced automation, and an integrated conveyor system, boasting superior in-house facilities for extrusion, blow-moulding and injection moulding processes, cooling and solidification, quality inspection and product labelling and packaging, ensuring that the highest standards of quality, precision, performance and cost-effectiveness are met across all our products.

Additionally, our in-house logistics network enhances the supply chain, enabling faster deliveries and more cost-effective operations. Furthermore, we utilise specialised quality testing equipment for raw materials and finished goods to ensure compliance with recognized international and Indian quality standards. Our dedicated team of quality-testing personnel tests the products daily on a sampling basis. Operating from our facilities in Navi Mumbai, we cater to various industries such as paint, lubricant, chemical, adhesives, food, oil, toy components etc. Our Company is promoted by Bhawanji Shah, Deven Shah and Hiren Shah. Bhawanji Shah, with his extensive experience in the plastic moulding industry, has played a pivotal role in shaping the companys direction and growth.

He is the founder of Jyoti Industries where he started his entrepreneurship stint in the year 1990. He started manufacturing plastic containers using blow moulding, which later led him to incorporate Jyoti Polycontainers Private Limited in 2004, with Deven Shah and Hiren Shah in the management team. On the other hand, Deven Shah is the Whole Time Director and CEO of the company. He heads the Business Development department at the company, and Hiren Shah is the Managing Director of our company. He oversees the financial management, accounting operations and financial reporting process for the entire organization. Our other promoters include Karan Deven Shah, CFO since 2020, who heads the Finance and Accounts department, and Sainyum Hiren Shah, who leads the Sales and Marketing department.

Financial KPI of our Company

Metric	As of and for the Fiscal
	2025	2024	2023
Revenue From operations ( in Lakhs)	9,348.49	8,725.10	8,919.39
Total revenue ( in Lakhs)	9,379.79	8,796.41	8,935.45
EBITDA ( in Lakhs)	1,165.61	775.00	582.11
EBITDA Margin (%)	12.47%	8.88%	6.53%
Profit after tax ( in Lakhs)	608.06	361.53	232.36
PAT Margin (%)	6.50%	4.14%	2.61%
Return on Equity (ROE) (%)	33.22%	26.87%	22.16%
Debt To Equity Ratio	1.19	1.90	2.05
Interest Coverage Ratio	4.13	3.14	2.82
Return on Capital Employed (ROCE) (%)	22.35%	15.92%	13.42%
Current Ratio	1.03	1.00	1.02
Capital Turnover Ratio	203.50	566.07	277.35

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR:

In the opinion of the Board of Directors of our Company, there have not arisen, since the date of March 31, 2025 as disclosed in this Red Herring Prospectus, any significant developments or any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months.

Principle Components of our Restated Statement of Assets & Liabilities Fiscal 2025 Compared with Fiscal 2024:

				( in lakhs)
Particulars	For the period ended March 31,		Increase/ (Decrease)
	2025	2024	Amount	%
Liabilities
Long- Term Borrowings	228.64	382.03	(153.39)	(40.15%)
Short Term Borrowings	2302.58	2512.93	(210.35)	(8.37%)
Trade payables	769.11	566.14	202.97	35.85%
Assets
Non-current Investments	92.00	56.00	36.00	64.29%
Long term loan and advances	49.77	43.06	6.71	15.58%
Inventories	850.66	474.50	376.16	79.28%
Trade receivables	2139.12	1952.62	186.50	9.55%
Short term loan and advances	76.04	229.00	(152.96)	(66.79%)

Long-Term Borrowings

Long-term borrowings decreased by 153.39 lakhs i.e. 40.15%, from 382.03 lakhs in fiscal 2024 to 228.64 lakhs in fiscal 2025. This decline is primarily due to the repayment of long-term borrowings amounts as companys initiatives to reduce overall debt and improve its debt-to-equity ratio.

Short-Term Borrowings

Short-term borrowings decreased by 210.35 lakhs, representing a 8.37% decline from 2,512.93 lakhs in Fiscal 2024 to 2,302.58 lakhs in Fiscal 2025. This decrease was primarily due to repayment of loans repayable on demand from related parties.

Trade Payable

Trade payables increased by 202.97 lakhs i.e. 35.85%, increased from 566.14 lakhs in fiscal 2024 to 769.11 lakhs in fiscal 2025. The increase was primarily due to higher procurement of goods and services in line with business growth, along with extended credit terms from suppliers. Calculation for trade payable day

Particulars	For year ended March 31,
	2025	2024
Cost of materials consumed	6,083.26	6,163.71
Average Trade Payable	667.62	612.40
Trade Payable Ratio	9.11	10.06
Trade Payable days	40	36

Non-current Investment

Non-current investments comprise the companys investment in mutual funds and investment in equity shares. Investment increased by 36 lakhs i.e. 64.29%, increased from 56.00 lakhs in fiscal 2024 to 92.00 lakhs in fiscal 2025. The Increase was primarily due to increase in investment in mutual funds.

Long-term loans and advances

Long-term loans and advances increased by 6.71 lakhs, representing a 15.58% increase from 43.06 lakhs in Fiscal 2024 to 49.77 lakhs in Fiscal 2025. his increase is primarily on account of higher capital advances given to suppliers for the purchase of fixed assets in line with planned business expansion.

Inventories

The inventory of stock-in-trade increased by 376.16 lakhs, rising from 474.50 lakhs in Fiscal 2024 to 850.66 lakhs in Fiscal 2025. This increase is attributable to a rise in finished goods by 192.17 lakhs and raw materials by 183.99 lakhs.

Trade Receivables

Trade receivables had increased by 186.50 lakhs i.e. 9.55%, rising from 1,952.62 lakhs in fiscal 2024 to 2,139.12 lakhs in fiscal 2025. The increase in trade receivables is primarily due to higher sales during the period and extended credit terms offered to customers.

Short-term loans and advances

Short-term loans and advances decreased by 152.96 lakhs i.e. 66.79%, decline from 229.00 lakhs in fiscal 2024 to 76.04 lakhs in fiscal 2025. This decrease is primarily due to decrease in advance to suppliers.

Fiscal 2024 Compared with Fiscal 2023:

( in lakhs)

Particulars	For the period ended March 31,		Increase/ (Decrease)
	2024	2023	Amount	%
Liabilities
Long- Term Borrowings	382.03	286.32	95.71	33.43%
Short Term Borrowings	2512.93	2097.82	415.11	19.79%
Trade payables	566.14	658.66	(92.52)	(14.05%)
Assets
Non-current Investments	56.00	0.25	55.75	22300.00%
Long term loan and advances	43.06	37.76	5.30	14.04%
Inventories	474.50	340.81	133.69	39.23%
Trade receivables	1952.62	2036.00	(83.38)	(4.10%)
Short term loan and advances	229.00	268.08	(39.07)	(14.57%)

Long-term borrowings increased by 95.71 lakhs, representing a 33.43% rise from 286.32 lakhs in Fiscal 2023 to 382.03 lakhs in Fiscal 2024. This increase was primarily due to a rise in term loans from banks by 104.99 lakhs, partially offset by decrease in reclassification of current maturities of long-term borrowings under short term borrowings by 9.28 lakhs.

Short-Term Borrowings

Short-term borrowings increased by 415.11 lakhs, representing a 19.79% increase from 2,097.82 lakhs in Fiscal 2023 to 2,512.93 lakhs in Fiscal 2024. This increase was primarily driven by increase in working capital by 363.83 lakhs and increase by 384.49 lakhs and 9.28 lakhs due to the reclassification of the current maturities of long-term borrowings amounts due within the next 12 months under short-term borrowings to support business operations.

Trade Payable

Trade payables decreased by 92.52 lakhs i.e. 14.05%, decline from 658.66 lakhs in fiscal 2023 to 566.14 lakhs in fiscal 2024. The decrease is primarily attributable to timely settlement of outstanding dues in order to focus on maintaining healthy suppliers relationships and managing working capital efficiently. Calculation for trade payable day

Particulars	For year ended March 31,
	2024	2023
Cost of material consumed	6,163.71	6,680.56
Average Trade Payable	612.40	777.68
Trade Payable Ratio	10.06	8.59
Trade Payable days	36	40

Non-current Investment

Non-current investments comprise the companys investment in mutual funds and investment in equity shares. Investment increased by 55.75 lakhs i.e. 22,300%, increased from 0.25 lakhs in fiscal 2024 to 56.00 lakhs.

Increase was primarily due to increase in investment in mutual funds by 55.75 lakhs.

Long-term loans and advances

Long-term loans and advances increased by 5.30 lakhs, representing a 14.04% increase from 37.76 lakhs in Fiscal 2023 to 43.06 lakhs in Fiscal 2024. This raising is primarily due to a increase in capital advances to a parties by 5.30 lakhs.

Inventories

The inventory of stock-in-trade increased by 133.69 lakhs, rising from 340.81 lakhs in Fiscal 2023 to 474.50 lakhs in Fiscal 2024. This increase is primarily attributable to a rise in raw materials by 93.86 lakhs, finished goods by 39.83 lakhs.

Trade Receivables

Trade receivables decreased by 83.38 lakhs, representing a 4.10% decline from 2,036.00 lakhs in Fiscal 2023 to 1,952.62 lakhs in Fiscal 2024. This reduction is primarily attributable to improved collection efforts and tighter credit control measures during the year.

Short-term loans and advances

Short-term loans and advances decreased by 39.08 lakhs i.e. 14.57%, decline from 268.08 lakhs in fiscal 2023 to 229.00 lakhs in fiscal 2024. This decrease is primarily due to decrease in loans and advances to employees by 262.09 lakhs and which is offset by increase in advance to suppliers by decrease 225.58 lakhs.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION: Our Companys future results of operations could be affected potentially by the following factors:

1. General economic conditions in India, changes in laws and regulations.

2. Changes in revenue mix, including geographic mix of our revenues.

3. Changes in Fiscal, Economic or Political conditions in India.

4. Increased market fragmentation.

5. Competition with existing and new entrants

6. Technology System and Infrastructure Risks

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, "Annexure IV" beginning under Chapter titled "Financial Information of our Company" beginning on page 215 of this Red Herring Prospectus.

RESULTS OF KEY OPERATIONS

The following table sets forth select financial data from our restated financial statement of profit and loss for the period ended on September 30, 2024, and financial years ended March 31, 2024, 2023 and 2022 the components of which are also expressed as a percentage of total revenue for such period and financial years.

						( in lakhs)
Particulars	For the period ended on
	March 31, 2025	% of Total Income	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income
Revenue from Operations	9,348.49	99.67%	8,725.10	99.19%	8,919.39	99.82%
Other Income	31.30	0.33%	71.31	0.81%	16.06	0.18%
Total Income	9,379.79	100.00%	8,796.41	100.00%	8,935.45	100.00%
Cost Of Materials Consumed	6,275.43	66.90%	6,203.53	70.52%	6,670.58	74.65%
Changes In Inventory of finished goods	-192.17	-2.05%	-39.83	-0.45%	9.98	0.11%
Employee benefit expenses	436.04	4.65%	411.43	4.68%	400.25	4.48%
Finance costs	272.03	2.90%	244.50	2.78%	200.14	2.24%
Depreciation and amortisation expenses	136.12	1.45%	129.06	1.47%	114.01	1.28%
Other Expenses	1,648.14	17.57%	1,358.98	15.45%	1,228.12	13.74%
Total Expenses	8,575.59	91.43%	8,307.67	94.44%	8,623.08	96.50%
Profit Before Tax	804.20	8.57%	488.74	5.56%	312.37	3.50%
Total tax	196.15	2.09%	127.21	1.45%	80.01	0.90%
Profit for the Year	608.06	6.48%	361.53	4.11%	232.37	2.60%

Review of Restated Financials

Revenue from Operations: Revenue from operations consists of Only Sale of Goods and other operating revenue.

	As at March 31, 2025		As at March 31, 2024		As at March 31, 2023
Products	Revenue	% of revenue from operations	Revenue	% of revenue from operations	Revenue	% of revenue from operations
Blow Moulded Plastic Carboy	4,185.91	44.78%	4,291.66	49.19%	4,494.11	50.39%
Hdpe Barrel	3,910.92	41.83%	3,924.85	44.98%	3,962.49	44.43%
Plastic Jerrycane and Bottles	770.99	8.25%	470.24	5.39%	417.24	4.68%
Pail Bucket	263.75	2.82%	2.21	0.03%	0	0.00%
Toys	15.02	0.16%	1.37	0.02%	7.47	0.08%
Others	201.9	2.16%	34.77	0.40%	38.08	0.43%
Total	9,348.49	100.00%	8,725.10	100.00%	8,919.39	100.00%

Other Income: Other income includes Interest on deposits with banks, other interest incomes, profit on sale of fixed assets and other miscellaneous Income. Total Income: Total income comprises of revenue from operations and other income.

Total Expenses: Companys total expenses consist of Cost of material consumed, Changes in inventories of Finished goods, Work-in-progress and Stock-in-trade, Employee benefit expense, Finance cost, Depreciation & Amortisation expenses and other expenses.

Cost of materials consumed: Cost of materials consumed includes opening stock of raw materials, purchases of raw materials less closing stock of raw materials.

Changes in inventories of Finished goods: Changes in inventories consists of costs attributable to an increase or decrease in inventory levels during the relevant financial period in Finished goods.

Employee Benefits Expense: Employee benefit expense includes Directors Remuneration, Salary, wages and bonus and Staff welfare expenses.

Finance Cost: Finance cost includes Interest on borrowings and other borrowings costs.

Other expenses: Other expenses mainly consist of Electricity expenses, Labour expenses, Transportation expenses, Jobwork charges, Rent expenses and Miscellaneous expenses etc.

COMPARISON OF F.Y. 2025 WITH F.Y. 2024:

Revenue from Operations

The Companys revenue from operations in the financial year 2024-25 amounted to 9,348.49 lakhs. This represents 623.39 lakhs or 7.14% increase compared to the previous financial years revenue from operations of 8,725.10 lakhs. The increase in revenue compared to the previous financial year is primarily attributable to higher sales of Plastic Jerrycans and Bottles by 300.75 lakhs, Pail Buckets by 261.54 lakhs, Other Products by 167.13 lakhs, and Toys by 13.65 lakhs. This was partially offset by a decline in sales of Blow Moulded Plastic Carboys by 105.75 lakhs and HDPE Barrels by 13.93 lakhs.

Other Income

Other Income in the financial year 2024-25 decreased by 40.01 lakhs, reaching 31.30 lakhs in comparison to the 71.31 lakhs in the financial year 2023-24.

Cost of material consumed

Cost of material consumed for the financial year 2024-25 amounted to 6,275.43 lakhs constituting 66.90% of total income.

Changes in inventories of Finished goods

There was an increase of 192.17 lakhs for financial year 2024-25 as compared to an increase of 39.83 lakhs for financial year 2023-24, primarily attributable to a higher inventory of finished at the end of financial year 2024-25.

Employee Benefits Expenses

Employee benefit expenses in the financial year 2024-25 increased by 24.61 lakhs or 5.98%, reaching 436.04 lakhs in comparison to the 411.43 lakhs in the financial year 2023-24. This rise was primarily due to increase in Gratuity expenses of 15.28 lakhs, salaries, wages and bonus expenses of 9.78 lakhs and directors remuneration which went up by 1.25 lakhs.

Finance Costs

Finance Costs in the financial year 2024-25 increased by 27.53 lakhs or 11.26%, reaching 272.03 lakhs in comparison to the 244.50 lakhs incurred in the financial year 2023-24. This rise was due to increase in Interest on borrowings which went up by 28.07 lakhs and decrease in other borrowing costs by 0.54 lakhs.

Other Expenses

Other expenses in the financial year 2024-25 increased by 289.16 lakhs or 21.28%, reaching 1,648.14 lakhs in comparison to the 1,358.98 lakhs incurred in the financial year 2023-24. This increase in other expenses was primarily attributed to several factors, including 70.86 lakhs increase in labour expense, 64.83 lakhs increase in job work charges, 60.62 lakhs increase in electricity expense and 55.47 lakhs increase in transportation charges.

Tax Expenses

Tax expenses in the financial year 2024-25 increased by 68.94 lakhs or 54.19%, reaching a total of 196.15 lakhs in contrast to the 127.21 lakhs in the financial year 2023-24 due to increase in payment of Current tax.

Profit after Tax (PAT)

Due to the aforementioned factors, the profit experienced an upswing, primarily driven by the growth in total income and a decrease in total expenses as a percentage of total income. The Profit After Tax (PAT) for the financial year 2024-25 reached 608.06 lakhs. In the financial year 2024-25, PAT constituted 6.48% of the total revenue, in contrast to 4.11% in the fiscal year 2023-24.

Rationale for increase in Profit after Tax (PAT) compared to Revenue from Operation Increase in Sales

The increase in PAT is primarily driven by higher sales volumes, which rose from 6,022 MT in FY 2024 to 6,366 MT in FY 2025, alongside revenue growth. This growth enabled improved operating leverage through better absorption of fixed costs, thereby contributing to enhanced overall profitability.

Small packaging

One of the key growth drivers has been the strategic expansion of the product portfolio into small packaging formats (up to 10 litres). These formats yield higher margins due to their specialised applications and the incorporation of value-added services such as stickering, sleeving, and labelling, which support premium pricing. The company commenced this initiative in FY 2022 23 with small packaging containers for the food industry. Following commercial success, this offering was extended in FY 2023 24 to cover additional sectors, including lubricants and motor oils.

This diversification led to a significant increase in dispatch volumes to premium clients, substantially contributing to both revenue growth and margin enhancement. Small container products achieved a considerably higher average realisation compared to the companys overall average selling price during the year.

New Product Line Pail Buckets

The company introduced a new product line Pail Buckets in March 2024. Focused efforts to scale up production and sales of this product positively contributed to overall revenue growth. Pail Buckets were sold at higher average selling prices compared to the companys overall average for FY 2024 25.

Quantity Discount

The raw material procurement landscape improved significantly with the entry of a new supplier, which led to heightened competition among existing suppliers. This resulted in higher discounts through quantity-based schemes, MoU trade incentives, and introductory offers, thereby reducing overall raw material costs compared to the previous year.

Enhancement in Production Efficiency

To support increased production capacity, the company invested in two new smaller double-station machines during FY 2024. These machines provided key operational advantages:

Zero downtime and double output capacity, significantly improving efficiency.

Increased production at the same fixed cost, thereby lowering per-unit processing costs and enhancing overall profitability.

Other Income

During FY 2025, the company generated additional income through two key avenues that contributed positively to overall profitability. First, higher interest income was earned from bank deposits, enhancing indirect earnings. Second, to optimise utilisation of unused capacity in the large blow moulding segment, the company strategically introduced ancillary services such as mould trial and testing for external parties. These initiatives not only reduced idle time and improved operational efficiency but also provided a direct boost to revenue.

COMPARISON OF F.Y. 2024 WITH F.Y. 2023: Revenue from Operations

The Companys revenue from operations in the financial year 2023-24 amounted to 8725.10 lakhs. This represents 194.29 lakhs or 2.18% decrease compared to the previous financial years revenue from operations of 8919.39 lakhs. The slight decrease in revenue compared to the previous financial year can be attributable to higher raw material prices in previous year leading to increased billing amount which leads to increase the revenue in previous year as compared to current year. The slight decrease in revenue compared to the previous financial year due to decrease in sale of Blow Moulded Plastic Carboy of 202.45 lakhs, decrease in sale of HDPE Barrel of 37.63 lakhs and increase in sale of Plastic Jerrycan and Bottles of 53 lakhs.

Other Income

Other Income in the financial year 2023-24 increased by 55.24 lakhs or 343.87%, reaching 71.31 lakhs in comparison to the 16.06 lakhs in the financial year 2022-23. This increase was primarily due to profit on sale of fixed assets of 26.32 lakhs and Gratuity provision written back of 16.68 lakhs.

Cost of material consumed

Cost of material consumed for the financial year 2023-24 amounted to 6,203.53 lakhs constituting 70.52% of total income.

Changes in inventories of Finished goods

There was a decrease of 39.83 lakhs for financial year 2023-24 as compared to an increase of 9.98 lakhs for financial year 2022-23, primarily attributable to a higher inventory of finished goods at the end of financial year 2023-24.

Employee Benefits Expenses

Employee benefit expenses in the financial year 2023-24 increased by 11.18 lakhs or 2.79%, reaching 411.43 lakhs in comparison to the 400.25 lakhs in the financial year 2022-23. This rise was primarily due to increase in Salary and allowances which went up by 14.50 lakhs, Staff welfare expenses which went up by 5.09 lakhs and decrease in Gratuity expense by 8.14 lakhs.

Finance Costs

Finance Costs in the financial year 2023-24 increased by 44.36 lakhs or 22.16%, reaching 244.50 lakhs in comparison to the 200.14 lakhs incurred in the financial year 2022-23. This rise was primarily due to increase in Interest on borrowings which went up by 56.72 lakhs and decrease in other borrowing cost by 12.37 lakhs.

Other Expenses

Other expenses in the financial year 2023-24 increased by 130.86 lakhs or 10.65%, reaching 1,358.98 lakhs in comparison to the 1,228.12 lakhs incurred in the financial year 2022-23. This increase in other expenses was primarily attributed to several factors, including 80.95 lakhs increase in Job work charges, 74.02 lakhs increase in Electricity expense and 15.27 lakhs increase in Repairs & maintenance expenses.

Tax Expenses

Tax expenses in the financial year 2023-24 increased by 47.20 lakhs or 58.99%, reaching a total of 127.21 lakhs in contrast to the 80.01 lakhs in the financial year 2022-23 due to increase in Current tax.

Profit after Tax (PAT)

The Profit After Tax (PAT) for the financial year 2023-24 reached 361.53 lakhs, marking a increase from 232.37 lakhs in the financial year 2022-23. In the financial year 2023-24, PAT constituted 4.11% of the total revenue, in contrast to 2.60% in the fiscal year 2022-23.

Rationale for increase in Profit after Tax (PAT) compared to Revenue from Operation

1. Impact of Raw Material Price Fluctuation

The primary reason for the decrease in revenue in absolute terms is this Reduction in raw material prices during FY 2023-24 as compared to FY 2022-23. Industry is highly sensitive to raw material costs, which significantly influence the pricing of finished goods.

In FY 2022-23, raw material prices were relatively higher, leading to increased billing amounts which leads increase in revenue. In contrast, during FY 2023-24, raw material prices witnessed a decline, which resulted in lower invoice values for the same.

Despite the lower revenue in absolute terms, the quantity of goods sold and dispatched increased, ensuring operational efficiency and sustained market demand.

Additionally, when raw material prices decrease, we receive a handsome amount of quantity discount when purchasing higher quantities of raw material, which helps in cost reduction from our vender.

2. Pricing Strategy and Margin Optimization

Our company follows a strategic pricing mechanism where we promptly pass on the increased raw material costs to customers when prices rise. However, when raw material prices decline, we adopt a gradual price adjustment approach. This pricing strategy has multiple advantages:

It helps in maintaining stable revenue and profitability by reducing the immediate impact of cost fluctuations.

It allows us to optimize margins, ensuring a gradual and sustainable transition in pricing.

It protects the company from sudden revenue declines while improving profitability over time.

3. Operational Efficiency and Capacity Utilization

Our plant operations are currently running at approximately 89.07% capacity utilization, indicating stable production levels. Additionally, we have strategically focused on replacing lower-margin customers with higher-margin customers. This transition has had the following positive effects:

Enhanced profitability due to better pricing realization.

Improved customer base with a focus on quality orders rather than volume-driven lower-margin sales.

Increased operational efficiency by optimizing production scheduling and reducing wastage.

4. Improvement in Profitability and PAT Growth

The combined effect of lower raw material costs, strategic pricing, operational efficiency, and customer base optimization has directly contributed to the increase in PAT. Some key contributing factors include:

Higher margin realization due to selective customer targeting.

Efficient cost management in procurement and production processes.

Sustained demand and increased volume dispatches, even if absolute revenue figures appear lower due to price reductions.

Effective working capital management, ensuring improved cash flow and financial health.

Cash Flow

The table below summaries our cash flows from our Restated Financial Information for the financial years ended March 31, 2025, 2024 and 2023:

Particulars	FY 2025	FY 2024	FY 2023
Net cash (used in)/ Generated from operating activities	804.87	593.11	(224.65)
Net cash (used in)/ Generated from investing activities	(362.31)	(661.30)	(147.27)
Net cash (used in)/ Generated from finance activities	(635.04)	266.32	270.15
Net increase/ (decrease) in cash and cash equivalents	(192.46)	198.13	(101.77)
Cash and Cash Equivalents at the beginning of the period	205.56	7.43	109.20
Cash and Cash Equivalents at the end of period	13.09	205.56	7.43

Cash Flow from/ (used in) Operating Activities

Net cash used in operating activities for the Fiscal 2025, was 804.87 lakhs and our profit before tax that period was 804.20 lakhs. The difference was primarily attributable to change in working capital of (236.67) lakhs, Finance cost of 272.03 lakhs, Depreciation of 136.12 lakhs, Gratuity provision of 15.28 lakhs, interest income on Fixed deposits of 23.88 lakhs resulting in gross cash used in operations at 966.89 lakhs. We have income tax paid of 162.02 lakhs. Net cash used in operating activities for the Fiscal 2024 was 593.11 lakhs and our profit before tax that period was 488.74 lakhs. The difference was primarily attributable to change in working capital of (120.88) lakhs, Finance cost of 244.50 lakhs, Depreciation of 129.06 lakhs, profit of sale on Fixed assets 26.32 lakhs and Interest income of 19.08 lakhs resulting in gross cash used in operations at 680.07 lakhs. We have income tax paid of 86.96 lakhs. Net cash used in operating activities for the Fiscal 2023 was (224.65) lakhs and our profit before tax that period was 312.37 lakhs. The difference was primarily attributable to change in working capital of (771.38) lakhs, Finance cost of 200.14 lakhs, Depreciation of 114.01 lakhs and Interest income of 12.80 lakhs resulting in gross cash used in operations at (148.90) lakhs. We have income tax paid of 75.75 lakhs.

Cash Flow from/ (used in) Investing Activities

In the Fiscal 2025, our net cash used in investing activities was (362.30) lakhs, which was primarily attributable to Purchase of tangible assets and CWIP of 405.79 lakhs, bank deposits (net) of 62.32 lakhs, purchase of investments of 36.00 lakhs and Interest income on bank deposits of 23.88 lakhs.

In the Fiscal 2024, our net cash used in investing activities was (661.30) lakhs, which was primarily attributable to Purchase of tangible assets and CWIP of 585.60 lakhs, bank deposits (net) of 96.74 lakhs, Purchase of Investments of 56.00 lakhs, Sale of tangible assets amounting to 63.01 lakhs, Interest income of 19.08 lakhs. In the Fiscal 2023, our net cash used in investing activities was (147.27) lakhs, which was primarily attributable to Purchase of tangible assets and CWIP of 167.42 lakhs, Interest income on bank deposits of 12.80 lakhs and bank deposits (net) of 7.35 lakhs.

Cash Flow from/ (used in) Financing Activities

In the Fiscal 2025, our net cash generated from financing activities was (635.04) lakhs. This was primarily due to Finance cost 271.30 lakhs, proceeds/(repayment) of Long term borrowings of (164.45) lakhs, and proceeds/(repayment) of Short term borrowings of (199.29) lakhs. In the Fiscal 2024, our net cash generated from financing activities was 266.32 lakhs. This was primarily due to proceeds/(repayment) of net short term borrowings of 385.17 lakhs, Finance cost of 244.50 lakhs and net proceeds/(repayment) of long-term borrowings of 125.65 lakhs. In the Fiscal 2023, our net cash generated from financing activities was 270.15 lakhs. This was primarily due to net proceeds/(repayment) of short-term borrowings of 612.57 lakhs, Finance cost of 200.14 lakhs and net proceeds/(repayment) of long-term borrowings of (142.28) lakhs.

Related Party Transactions

Related party transactions with certain of our promoter, directors and their entities and relatives primarily relate to remuneration, salary, rent payables, advances and issue of Equity Shares. For further details of related parties kindly refer chapter titled "Restated Financial Statements" beginning on page 215 of this RHP.

Off- Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any entity that have been established for the purposes of facilitating off-balance sheet arrangements. Qualifications of the Statutory Auditors which have not been given effect to in the Restated Financial Statements There are no qualifications in the audit report that require adjustments in the Restated Financial Statements

Qualitative Disclosure About Market Risk Financial Market Risks

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

Interest Rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service obligations in future and our access to funds.

Effect of Inflation

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

Credit Risk

We are exposed to credit risk on monies owed to us by our customers. If our customers do not pay us promptly, or at all, we may have to make provisions for or write-off such amounts.

Information required as per Item 11 (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

1. Unusual or infrequent events or transactions

To our knowledge there have been no unusual or infrequent events or transactions that have taken place during the last three years.

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

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled "Risk Factors" beginning on page 26 of this Red Herring Prospectus. To our knowledge, except as we have described in this Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Income and Sales on account of major Product/main activities.

Income and sales of our Company mainly consists of sale of products from following sectors:

	FY 2025		FY 2024		FY 2023
Sectors	Amount ( in Lakhs)	%of revenue from operations	Amount ( in Lakhs)	%of revenue from operations	Amount ( in Lakhs)	%of revenue from operations
Chemicals	4,667.71	49.93%	3,478.44	39.88%	3,270.69	36.66%
Agro	210.2	2.25%	158.48	1.82%	34.37	0.39%
Adhesives	192.28	2.06%	151.37	1.73%	212.8	2.39%
Edible Oil	293.21	3.14%	337.41	3.87%	198.51	2.23%
Food	506.78	5.42%	425.32	4.87%	445.34	4.99%
Lube & Industrial Oil	1,406.33	15.04%	1,588.29	18.20%	1,595.68	17.89%
Paint	326.22	3.49%	147.87	1.69%	53.17	0.60%
Pharma	336.28	3.60%	783.45	8.98%	1,043.84	11.70%
Cosmetics	80.56	0.86%	128.66	1.47%	153.56	1.72%
Dyes & Pigments	47.01	0.50%	94.92	1.09%	217.2	2.44%
Oxides	520.01	5.56%	466.79	5.35%	484.74	5.43%
Speciality Chemicals	389.6	4.17%	434.57	4.98%	450.38	5.05%
Textile Chemicals	357.28	3.82%	528.16	6.05%	477.06	5.35%
Extra	0	0.00%	-	-	274.56	3.08%
Neutral Alcohol (ENA) Toys	15.02	0.16%	1.37	0.02%	7.49	0.08%
Total	9,348.49	100.00%	8,725.10	100.00%	8,919.39	100.00%

4. Whether the company has followed any unorthodox procedure for recording sales and revenues

Our Company has not followed any unorthodox procedure for recording sales and revenues.

5. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section titled "Risk Factors" beginning on page 26 in this Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

6. 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 revenues are by and large linked to increases in volume of business.

7. Total turnover of each major industry services in which the issuer company operated.

The Company is in the business of, the relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 121 of this Red Herring Prospectus.

8. Status of any publicly announced new products or business services.

Our Company has not announced any new services or business services.

9. The extent to which business is seasonal.

Our Companys business is not seasonal.

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

The % of contribution of our Companys suppliers vis-a-vis the total purchases from operations respectively for the Fiscal 2025, 2024 and 2023 is as follows:

	Top Suppliers as a percentage (%) of total purchases
Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Top 5	48.20%	56.22%	50.11%
Top 10	71.63%	77.97%	76.78%

The % of contribution of our Companys customers vis-a-vis the total revenue from operations respectively for the Fiscal 2025, 2024 and 2023 is as follows:

	Top Customers as a percentage (%) of total sales
Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Top 5	13.97%	16.42%	17.77%
Top 10	21.61%	23.19%	26.11%

11. Competitive conditions.

Competitive conditions are as described under the Chapters titled "Industry Overview" and "Our Business" beginning on pages 121 and 150, respectively of this Red Herring Prospectus.