Liotech Industries Ltd Management Discussions

<dhhead>MANAGEMENT’S DISCUSSION AND ANALYSIS</dhhead>

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with us restated financial information as of for the financial years ended March 31,2025, March 31, 2024, and March 31, 2023. Our Restated Financial Statements have been derived from our audited financial statements and restated in accordance with the SEBI ICDR Regulations and the ICAI Guidance Note. Our financial statements are prepared in accordance with Indian GAAP, including the schedules, annexures and notes thereto and the report thereon, included in the section titled "Restated Financial Statements" on page 159 of this Draft Prospectus Unless otherwise stated, the financial information used in this section is derived from the restated financial statements of our Company.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the sections titled "Risk Factors" and "Forward-

Looking Statements" on pages 24 and 15 respectively, of this Draft Prospectus.

These financial statements have been prepared in accordance with Indian GAAP. Indian GAAP differs in certain significant respects from U.S. GAAP, IFRS and Ind AS. We have neither attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Draft Prospectus nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS or Ind AS. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with the Companies Act, Indian GAAP and the SEBI ICDR

Regulations. Any reliance on the financial disclosure in this Draft Prospectus, by persons not familiar with Indian Accounting Practices, should accordingly be limited.

References to the "Company", "we", "us" and "our" in this chapter refer to Liotech Industries Limited (formerly known as Liotech Industries Private Limited), as applicable in the relevant fiscal period, unless otherwise stated

OVERVIEW OF OUR BUSINESS

Our Company specializes in the production of hardware structures and accessories, including door kits, a wide range of hinges (including cut & butt, parliament, W, Z, and duck hinges), gate hooks, aldrop, locks, handles, tower bolts, and shelf bottoms. We offer a diverse selection of products, with over 150 distinct specifications, that cater to various industries such as housing, infrastructure, agriculture, automotive, electricity, cement, mining, solar energy, and general engineering. We adhere to a business-to-business (B2B) operational framework. Aside from our production operations, we also engage in the trading of supplementary products such as door stoppers, magnets, table brackets, bed lifters, and bell magnets.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section entitled "Risk Factors" on page 24 of this Draft Prospectus. The following are certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

Growth of industries in which our products are used as raw materials and inputs;

Ability to maintain cordial relationships with our customers and suppliers;

Forecasting and assessing market demand of our products;

Ability to effectively manage the supply chain including storage, handling and logistics;

Introduction of new products and further optimize the product offerings;

Ability to arrange the products for our customers as per their specifications and requirements;

Effectively manage our working capital cycle and access to capital at reasonable cost.

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies have been applied consistently to the periods presented in the Restated Financial Statements. For details of our significant accounting policies, please refer section titled "Restated Financial Satements" on page 159 of this Draft Prospectus.

OUR ASSETS AND LIABILITIES

The following table sets forth select financial data derived from our Restated Summary Statement of Assets and Liabilities as on financial year ended March 31, 2025, 2024 and 2023:

(Rs. In Lakhs)

	As on the financial year ended March 31
Particulars	2025	2024	2023
Liabilities
Long-term Borrowings	129.57	197.44	113.47
Short-term Borrowings	292.32	157.47	24.91
Trade Payables	365.14	327.53	16.24
Assets
Non-current Investments	-	-	-
Long-term Loans and Advances	-	-	-
Inventories	715.23	436.15	85.62
Trade Receivables	590.71	486.29	62.66
Short-term Loans and Advances	9.74	57.57	22.33

Financial Year 2025 compared to Financial Year 2024

Long-term Borrowings

Long-term borrowings declined from 197.44 lakh as of March 31, 2024 to 129.57 lakh as of March 31, 2025, reflecting scheduled repayments of term loans during the year. The reduction is in line with the company’s objective to progressively deleverage while funding expansion through a balanced mix of internal accruals and working capital facilities.

Short-term Borrowings

Short-term borrowings increased from 157.47 lakh at the end of March 31, 2024 to 292.32 lakh at the end of March 31, 2025, primarily to meet elevated working capital requirements driven by higher inventory levels and trade receivables in line with the 46% year-on-year revenue growth. These borrowings, mainly in the form of cash credit and other short-term facilities, ensured operational liquidity during a period of sustained business expansion.

Trade Payables

Trade payables rose from 327.53 lakh as on March 31, 2024 to 365.14 lakh as on March 31, 2025, reflecting increased procurement volumes to support higher production. While the growth is more moderate than the prior year, supplier credit continues to play a key role in funding the working capital cycle. The company remains committed to maintaining strong supplier relationships by balancing negotiated credit terms with timely payments.

Inventories

Inventories grew from 436.15 lakh at the close of March 31, 2024 to 715.23 lakh at the close of March 31, 2025, driven by higher levels of raw materials, work-in-progress, and finished goods to support increased order volumes and ensure continuity in deliveries. This also includes strategic stocking of key inputs to mitigate supply chain disruptions and price volatility in metals. Management continues to focus on improving inventory turnover while aligning stock levels with demand forecasts.

Trade Receivables

Trade receivables increased from 486.29 lakh as on March 31, 2024 to 590.71 lakh as on March 31, 2025, consistent with higher sales volumes during the year. The company continues to extend competitive credit terms to customers in line with industry practice while strengthening credit monitoring and collection processes to keep the receivable cycle within targeted limits

Short-term Loans and Advances

Short-term loans and advances decreased from 57.57 lakh at the end of March 31, 2024 to 9.74 lakh at the end of March 31, 2025, largely due to the recovery of supplier advances and other operational advances provided in the previous year. This reduction reflects the company’s focus on tightening working capital management and minimizing funds locked in non-revenue generating advances.

Financial Year 2024 compared to Financial Year 2023

Long-term Borrowings

Long-term borrowings increased from 113.47 lakh as of March 31, 2023 to 197.44 lakh as of March 31, 2024, reflecting the drawdown of term loans to finance capacity expansion and acquisition of new plant and machinery during the year. This funding supported the scale-up of operations and is aligned with our long-term growth strategy. The company remains focused on maintaining a balanced capital structure, and repayments are structured to match cash generation from operations.

Short-term Borrowings

Short-term borrowings rose sharply from 24.91 lakh at the end of March 31, 2023 to 157.47 lakh at the end of

March 31, 2024. The increase was driven by higher working capital requirements to support the significant revenue growth achieved during the year, alongside higher inventory and receivable levels. These borrowings, primarily in the form of cash credit and working capital facilities, provided flexibility to meet operational funding needs while ensuring timely delivery to customers.

Trade Payables

Trade payables grew from 16.24 lakh as on March 31, 2023 to 327.53 lakh as on March 31, 2024, in line with the expansion of procurement volumes to support higher production. The increase also reflects extended credit terms negotiated with suppliers, which helped to partially fund the working capital cycle during a year of rapid scale-up. The company continues to prioritize timely settlement of dues while optimizing supplier credit to manage liquidity efficiently.

Inventories

Inventories increased from 85.62 lakh at the close of March 31, 2023 to 436.15 lakh at the close of March 31, 2024, driven by higher raw material stocking, work-in-progress, and finished goods to support increased sales volumes and ensure timely order fulfilment. The growth in inventories also reflects strategic stocking of key materials to mitigate supply chain risks and price volatility. The company remains focused on optimizing inventory turnover to balance sales readiness with efficient working capital use.

Trade Receivables

Trade receivables rose substantially from 62.66 lakh as on March 31, 2023 to 486.29 lakh as on March 31, 2024, in line with the significant increase in sales. The higher receivable balance also reflects extended credit terms to key customers in competitive market conditions. Management is committed to strengthening credit appraisal processes and collection mechanisms to maintain healthy receivable cycles and minimize the risk of overdue accounts.

Short-term Loans and Advances

Short-term loans and advances increased from 22.33 lakh at the end of March 31, 2023 to 57.57 lakh at the end of March 31, 2024, primarily on account of higher advances to suppliers and other operational advances related to the expanded scale of operations. These advances are closely monitored to ensure timely realization or settlement and to support uninterrupted production and service delivery.

RESULTS OF OUR OPERATIONS

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements of Company for the financial year ended March 31,2025, March 31, 2024, and March 31, 2023.

RESULTS OF OUR OPERATIONS

(Amount in lakhs)

Particulars	For the year ended March 31, 2025	% of Total Income	For the year ended March 31, 2024	% of Total Income	For the year ended March 31, 2023	% of Total Income
INCOME
Revenue from
	4,067.78	99.98%	2,786.30	99.97%	849.58	100.00%
Operations
Other Income	0.84	0.02%	0.73	0.03%	-	0.00%
Total Income(A)	4,068.62	100.00%	2,787.03	100.00%	849.58	100.00%
EXPENDITURE
Cost of Material Consumed	3,508.93	86.24%	2,534.74	90.95%	735.40	86.56%
Changes in inventories of Stock in Trade,	(244.37)	-6.01%	(306.75)	-11.01%	(28.75)	-3.38%
Finished Goods, WIP
Employee benefits expense	120.69	2.97%	94.89	3.40%	40.08	4.72%
Finance costs	32.02	0.79%	13.60	0.49%	6.66	0.78%
Depreciation and amortization expense	64.84	1.59%	53.36	1.91%	35.84	4.22%
Other expenses	26.31	0.65%	18.30	0.66%	15.52	1.83%
Total Expenses(B)	3,508.44	86.23%	2,408.14	86.41%	804.75	94.72%
Profit before exceptional items and tax(A-B)	560.18	13.77%	378.89	13.59%	44.83	5.28%
Prior Period Adjustments	-	0.00%	-	0.00%	0.55	0.06%
Profit before tax	560.18	13.77%	378.89	13.59%	44.28	5.21%
(i) Current tax	140.80	3.46%	95.07	3.41%	10.70	1.26%
(ii) Deferred tax	2.99	0.07%	1.91	0.07%	(0.92)	-0.11%
(iii) MAT Credit Entitlement	-	0.00%	-	0.00%	-	0.00%
(iv) Short/Excess provision written off	-	0.00%	(10.70)	-0.38%	-	0.00%
Profit for the year	416.39	10.23%	292.61	10.50%	34.51	4.06%

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT

Total Income

Our total income for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 amounted to 4,068.62 lakhs, 2,787.03 lakhs and 849.58 lakhs, respectively. Our revenue comprises:

Revenue from Operations

Our revenue from operations comprises revenue generated from the sale of our products i.e. Door kit, Parliament Hinges, Cut & Butt Hinges, W, Z & Duck Hinges. Revenue from operations amounting to 4,067.78 lakhs, 2,786.30 lakhs, and 849.58 lakhs which constituted 99.98%, 99.97%, and 100.00% of our total income for the financial years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively.

Other Income

Other income primarily includes interest income, insurance claims, and other incidental receipts. Our other income accounted for 0.02%, 0.03%, and 0.00% of total income for the financial years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively.

Expenses

Total expenses amounted to 3,508.44 lakhs, 2,408.14 lakhs, and 804.75 lakhs for the financial years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively, which comprise of the following:

Cost of Material Consumed

FY>Cost of material consumed primarily relates to the purchase of raw materials used in our operations. These expenses amounted to 3,508.93 lakhs, 2,534.74 lakhs, and 735.40 lakhs for the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023, respectively, representing 86.24%, 90.95%, and 86.56% of total income.

Change in Inventories of Stock in Trade, Finished Goods & WIP

Change in inventories amounted to - 244.37 lakhs, - 306.75 lakhs, and - 28.75 lakhs for the years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively, accounting for -6.01%, -11.01%, and -3.38% of total income.

Employee Benefits Expense

Employee benefits expense, comprising salaries, wages, and other related expenses, stood at 120.69 lakhs, 94.89 lakhs, and 40.08 lakhs for the financial years ended March 31 2025, March 31, 2024, and March 31, 2023, respectively, accounting for 2.97%, 3.40%, and 4.72% of total income.

Finance Costs

Finance costs include interest on borrowings and related charges, amounting to 32.02 lakhs, 13.60 lakhs, and 6.66 lakhs for the financial years ended March 31 2025, March 31, 2024, and March 31, 2023, respectively, constituting 0.79%, 0.49%, and 0.78% of total income.

Depreciation and Amortization

Depreciation and amortization expenses stood at 64.84 lakhs, 53.36 lakhs, and 35.84 lakhs for the financial years ended March 31 2025, March 31, 2024, and March 31, 2023, respectively, which accounted for 1.59%, 1.91%, and 4.22% of total income.

Other Expenses

Other expenses, including office administration, business development, and other operating costs, were 26.31 lakhs, 18.30 lakhs, and 15.52 lakhs for the financial years ended March 31 2025, March 31, 2024, and March 31, 2023, respectively representing 0.65%, 0.66%, and 1.83% of total income.

Financial Year 2025 compared to Financial Year 2024

Total Income:

Our total income increased by 45.99% from 2,787.03 lakhs in the financial year ended March 31, 2024 to 4,068.62 lakhs in the financial year ended March 31, 2025. This growth was driven primarily due to increased product volume from existing customers and new customers. The company has also additionally invested into capacity additions by purchasing of new plant and machinery & factory building amounting to 309.83 lakhs. Installed capacity increase from 1512 MT to 2428.56 MT. which indicated strong sales momentum across our product lines. While this rapid scaling underscores market demand and management’s ability to execute, it has been accompanied by substantial rises in inventories, receivables, and trade payables, indicating heavier working-capital requirements and a growing dependence on supplier credit.

Revenue from Operations:

Revenue from operations grew by 45.97% from 2,786.30 lakhs in financial year ended 31st March 2024 to 4,067.78 lakhs in financial year ended March 31st 2025. This reflects robust growth in customer demand, increased market penetration, and an expanded product portfolio. This increase in revenue is likely driven by higher production volumes, onboarding of significant new customers, and the commissioning of fresh capacity, as evidenced by sharp increases in PPE and raw material consumption.

Other Income:

Other income slightly increased from 0.73 lakhs in financial year ended March 31, 2024 to 0.84 lakhs in Financial Year ended March 31, 2025, accounting for 0.02% of total income. This primarily includes interest income and other incidental receipts.

Expenditure:

Total expenses increased by 45.73% from 2,408.14 lakhs in financial year ended March 31, 2024 to 3,508.44 lakhs in financial year ended March 31, 2025. This increase is largely in line with the growth in revenues, indicating proportionate expense control.

Cost of Material Consumed:

Cost of material consumed rose from 2,534.74 lakhs in financial year ended March 31, 2024 to 3,508.93 lakhs in financial year ended March 31, 2025, representing 86.24% of total income. Materials being the single largest cost component, as is typical in hardware and steel-related manufacturing, and its absolute value has risen in line with revenue growth, reflecting the higher production volumes achieved during the year. The material cost as a percentage of revenue reduced marginally during the period, benefiting from economies of scale and inventory management initiatives.

Changes in Inventories of Stock in Trade, Finished Goods & WIP:

Change in inventories was ( 244.37) lakhs in financial year ended March 31, 2025, compared to ( 306.75) lakhs in financial year ended March 31, 2024. The positive change in inventories indicates a reduced build-up of stock in FY 2025 compared to FY 2024.

Employee Benefits Expense:

Employee benefits expenses increased from 94.89 lakhs in Financial Year ended March 31, 2024 to 120.69 lakhs in Financial Year ended March 31, 2025. The increase was primarily attributable to the expansion of our workforce to support higher production volumes and our continued investment in human resources. This expense category includes salaries and wages.

Finance Costs:

Finance costs rose from 13.60 lakhs in Financial Year ended March 31, 2024 to 32.02 lakhs in Financial Year ended March 31, 2025 due to increased borrowings to support operational and capital expansion. The increase is primarily driven by company’s increased reliance on borrowings to fund capacity expansion and working capital requirements in line with rapid business growth and by higher utilization of short-term borrowings.

Depreciation and Amortization Expense:

Depreciation expenses increased from 53.36 lakhs in Financial Year ended March 31, 2024 to 64.84 lakhs in Financial Year ended March 31, 2025, primarily due to additions to fixed assets including machinery and plant facilities. This is consistent with the reported capex numbers and PPE growth. Capitalization for capacity expansion is evident. Monitor asset utilization to ensure return on new assets justifies depreciation.

Other Expenses:

Other expenses increased from 18.30 lakhs in financial year ended March 31, 2024 to 26.31 lakhs in financial year ended March 31, 2025, primarily due to higher administrative, utility, and business development expenditures, in line with our business scale-up.

Restated Profit/ (Loss) Before tax:

Profit before tax increased from 378.89 lakhs in financial year ended March 31, 2024 to 560.18 lakhs in financial year ended March 31, 2025, the increase in PBT can also be attributed to improvement of gross margins and proportionate reduction in employee benefits expenses and depreciation and amortisation expenses as percentage of total income during FY 2024-25.

Tax Expenses:

Tax Expenses mainly consists of Current Tax, Deferred Tax (credit)/charge and Prior Year Tax. The current tax expense has increased to 86.28 lakhs in FY 2024-25 from 143.79 in FY 2023-24. This is primarily because the Profit before Tax (PBT) has increased from 378.89 Lakhs in FY 2023-24 to 560.18 lakhs in FY 2024-25. A higher profit before tax resulted in a higher tax liability.

Restated Profit/ (Loss) after tax:

Restated Profit after tax increased by 42.3% from 292.61 lakhs in Financial Year ended March 31, 2024 to 416.39 lakhs in Financial Year ended March 31, 2025, reflecting strong revenue growth and improved expense management, with the profit margin remaining steady at around 10%. This improvement was driven primarily by strong revenue expansion of ~46%, stable gross margins supported by economies of scale, and disciplined control over operating expenses, which helped sustain EBITDA margin, as well as due to reversal of short/excess Income Tax provision written off in last year give the additional margin of 0.38% which will set off in current year against current year operational efficiency and fixed cost spread over the revenue which will improve the PAT margin.

Financial Year 2024 compared to Financial Year 2023

Total Income

Our total income grew by 228.00%, from 849.58 lakhs in the Financial Year ended March 31, 2023, to 2,787.03 lakhs in the Financial Year ended March 31, 2024. This substantial growth was mainly attributable to the introduction of a new product line and a corresponding increase in production capacity. The capacity enhancement was made possible through funds raised via the issuance of shares and the sanction of additional working capital limits, along with a loan for the purchase of new machinery. The commissioning of this machinery enabled higher production volumes, which directly contributed to the significant rise in revenue from operations.

Revenue from operations

Our revenue from operations increased by 227.79%, from 849.58 lakhs in the Financial Year ended March 31, 2023, to 2,786.30 lakhs in the Financial Year ended March 31, 2024. This significant growth was primarily driven by an infusion of capital, both in the form of equity and short-term debt (i.e., Cash Credit), which enabled the Company to meet its growing working capital requirements. As part of our expansion strategy, we also invested 160.66 lakhs in plant and machinery, enhancing our production capacity. The revenue growth was further supported by an increase in sales volumes, the introduction of a new product portfolio, and geographical expansion into the eastern region of India, which contributed approximately 29.48% of our total revenue from operations during the year.

Other Income

Other income increased from nil in financial year ended March 31, 2023 to 0.73 lakhs in financial year ended March 31, 2024, representing ancillary income streams which majorly includes interest income.

Expenses

Total expenses rose by 199.23% from 804.75 lakhs in financial year ended March 31, 2023 to 2,408.14 lakhs in financial year ended March 31, 2024, mainly due to increased cost of materials, labor, and other operational costs aligned with our scale-up.

Cost of Material Consumed

Cost of Sale of Products increased from 735.40 lakhs in financial Year ended March 31, 2023 to 2534.74 lakhs in financial Year ended March 31, 2024 primarily due to increase in sales volume which leads to increase in purchase of raw materials of different category of hardware products such as Stainless Steel, Brass, Aluminium, Iron, S.S. Rods, S.S. Sheets, S.S. Coil SS Patti. Raw materials remain the dominant cost driver, typical for steel/hardware-based manufacturing. Material cost as a percentage of revenue was broadly stable, reflecting some efficiency gains and better procurement leverage.

Change in inventories of Stock In Trade, Finished goods & WIP

Inventory changes increased significantly from (28.75) lakhs in financial year ended March 31, 2023 to - 306.75 lakhs in financial year ended March 31, 2024, reflecting an increase in stock held primarily due to increase in closing Stock in trade and inventory build-up to meet future demand.

Employee Benefits Expense

Employee benefits expenses more than doubled from 40.08 lakhs in financial year ended March 31, 2023 to 94.89 lakhs in financial year ended March 31, 2023 to due to general increase in salary & wages. This increase also reflects recruitment to support higher production, capacity operations, and administrative functions.

Finance Costs

Finance costs increased from 6.66 lakhs in financial year ended March 31, 2023 to 13.60 lakhs in financial year ended March 31, 2024 primarily due to increase in secured borrowings from banks on account of increase in OD/CC facilities in line with overall increase in business operations of the Company during the year and also due to capitalization of new machinery to support expansion.

Depreciation and amortization

Depreciation and amortisation expenses increased from 35.84 lakhs in financial year ended March 31, 2023 to 53.36 lakhs in financial year ended March 31, 2024 on account of addition of new fixed asset mainly plant & machinery as compared to previous financial year.

Other Expenses

Other expenses increased by from 15.52 lakhs in financial year ended March 31, 2023 to 18.30 lakhs in financial year ended March 31, 2024 primarily on account of an increase in the power & fuel charges, business development expense, office expense, Insurance expenses, miscellaneous expenses. The increase in other expenses is generally in line with expansion in our business operations.

Restated Profit/ (Loss) Before tax:

Profit before tax increased from 44.28 lakhs in financial year ended March 31, 2023 to 378.89 lakhs in financial year ended March 31, 2024, the increase in PBT can also be attributed to improvement of gross margins due to change in Product mix of manufacturing to trading from 68.30% to 73.35% and proportionate reduction in employee benefits expenses, finance cost and depreciation and amortisation expenses as percentage of total income during FY 2023-24.

Tax Expenses:

Profit before tax increased from 44.28 lakhs in the Financial Year ended March 31, 2023, to 378.89 lakhs in the Financial Year ended March 31, 2024. This growth was driven by improved gross margins resulting from higher sales volumes, along with a proportionate reduction in employee benefit expenses, finance costs, and depreciation and amortisation expenses as a percentage of total income during FY 2023 24.

Restated Profit/ (Loss) after tax:

Our revenue from operations grew by 227.79% from 849.58 lakhs in FY 2022 23 to 2,786.30 lakhs in FY 2023 24, driven by capital infusion (equity and short-term debt), capacity expansion, higher sales volumes, new product introductions, and entry into the eastern region of India. Consequently, our Restated Profit after Tax rose by 747.82% from 34.51 lakhs to 292.61 lakhs, aided by an improved product mix and better absorption of fixed costs.

Cash flows

The following table sets forth our cash flows for the period indicated:

 

 

 

(Amount in lakhs)

	For the year ended March 31,
Particulars	2025	2024	2023
Net Cash from Operating Activities	262.04	(51.51)	(71.25)
Net Cash from Investing Activities	(320.43)	(228.08)	(45.81)
Net Cash used in Financing Activities	34.96	302.93	57.53

Operating Activities

Financial Year 2024-25

Our net cash generated from operating activities was 262.04 Lakhs for the financial year ended March 31,2025.

Our operating profit before changes in working capital changes was 656.21 lakhs which was primarily adjusted against increase in trade receivables by (101.42) lakhs, loans and advances by 50.68 lakhs, inventories by (279.08) lakhs, and trade payable 37.61 lakhs and other current liabilities & provisions by 43.50 lakhs, respectively.

Financial Year 2023-24

Our net cash generated from operating activities was (51.51) Lakhs for the financial year ended March 31,2024. Our operating profit before changes in working capital changes was (445.12) lakhs which was primarily adjusted against increase in trade receivables by (423.63) lakhs, loans and advances by (36.43) lakhs, inventories by (350.53) lakhs, and trade payable 311.29 lakhs and current liabilities & provisions by 85.85 lakhs, respectively.

Financial Year 2022-23

Our net cash used in operating activities was (105.65) lakhs for the financial year ended March 31, 2023. Our operating profit before changes in working capital changes was (177.53) lakhs, which was primarily adjusted against increase in loans and advances by 36.86 lakhs, loans and advances by 23.75 lakhs, inventories by (43.44) lakhs, and trade payable (175.57) lakhs and current liabilities & provisions by 10.50 lakhs, respectively.

Investing Activities

Financial Year 2024-25

Our net cash used in investing activities was (320.43) lakhs for the year ended March 31, 2025. It was on account of purchase of Property, Plant & Equipment amounting to 321.27 lakhs, and off-setted against interest income of 0.84 lakhs.

Financial Year 2023-24

Our net cash used in investing activities was (228.08) lakhs for the financial year ended March 31, 2024. It was on account of purchase of Property, Plant & Equipment amounting to 228.81 lakhs, and off-setted against interest income of 0.73 lakhs.

Financial Year 2022-23

Our net cash used in investing activities was (45.81) lakhs for the financial year ended March 31, 2023. It was on account of increase in Property, Plant & Equipment amounting to 45.81 lakhs.

Financing Activities

Financial Year 2024-25

Net cash used in financing activities for the financial year ended March 31, 2025 was 34.96 lakhs which was on account of payment of long-term borrowings of (67.87) lakhs, proceeds of short term borrowing of 134.85 and settled off by finance cost of (32.02) lakhs.

Financial Year 2023-24

Net cash used in financing activities for the financial year ended March 31, 2024 was 302.93 lakhs which was on account of proceeds from issuance of equity shares amounting to 100 lakhs. short term & long-term borrowings amounting to 216.53 lakhs and settled off by finance cost of (13.60) lakhs.

Financial Year 2022-23

Net cash generated from financing activities for the financial year ended March 31, 2023 was 57.53 lakhs which was on account of increase in short term & long-term borrowings amounting to (35.81) lakhs & of proceeds from issuance of equity shares amounting to 100 lakhs and finance cost of 6.66 lakhs.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rates. In the normal course of business, we are exposed to certain market risks including interest risk.

Interest rate risk

Interest rate risk results from changes in prevailing market interest rates, which can cause a change in the fair value of fixed-rate instruments and changes in the interest payments of the variable-rate instruments. Our operations are funded to a certain extent by borrowings. Our current loan facilities carry interest at variable rates as well as fixed rates. We mitigate risk by structuring our borrowings to achieve a reasonable, competitive cost of funding. There can be no assurance that we will be able to do so on commercially reasonable terms, that our counterparties will perform their obligations, or that these agreements, if entered into, will protect us adequately against interest rate risks.

Liquidity risk

Adequate and timely cash availability for our operations is the liquidity risk associated with our operations. Our Company’s objective is to all time maintain optimum levels of liquidity to meet its cash and collateral requirements. We employee prudent liquidity risk management practices which inter-alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

Credit Risk

We are exposed to the risk that our counterparties may not comply with their obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities, primarily from trade receivables.

We consider our customers to be creditworthy counterparties, which limits the credit risk, however, there can be no assurance that our counterparties may not default on their obligations, which may adversely affect our business and financial condition.

Material Frauds

There is no material frauds committed against our Company in the last three financials year.

Unusual or Infrequent Events or Transactions

Except as described elsewhere in this Draft Prospectus, there have been no events or transactions to our knowledge which may be described as "unusual" or "infrequent".

Significant economic/regulatory changes

Government policies governing the sector in which we operate as well as the overall growth of the Indian economy has a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations.

There are no significant economic changes that materially affected our Company’s operations or are likely to affect income except as mentioned in the section titled "Risk Factors" on page 24 of this Draft Prospectus.

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 the section titled "Risk Factors" and chapter titled "Managements Discussion and Analysis of Financial Conditions and Results of Operations" on pages 24 and 194, respectively, of this Draft

Prospectus, to our knowledge there are no known trends or uncertainties that have or are expected to have a material adverse impact on our income from continuing operations.

Future changes in the relationship between costs and revenues

Other than as described in the section titled "Risk Factors" and chapter titled "Management’s Discussion and Analysis of Financial Conditions and Results of Operations" on pages 24 and 194 respectively, and elsewhere in this Draft Prospectus, there are no known factors to our knowledge which would have a material adverse impact on the relationship between costs and income of our Company. Our Company’s future costs and revenues will be determined by demand/supply situation, government policies and other economic factors.

New products or Business segments

Except as disclosed in this Draft Prospectus, we have not announced and do not expect to announce in the near future any new products/ services or business segment.

Competitive Conditions

We expect competition in our business from existing and potential competitors to intensify. We face competition from both organised and unorganised players in the market. We believe our expertise and quality service offerings with distinguished experience will be key to overcome competition posed by such players. We believe that the principal factors affecting competition in our business include client relationships, reputation, and the quality and pricing of our services.

Seasonality of Business

Except as mentioned in this chapter, our business is not subject to seasonal variations.

Significant Dependence on a Single or Few Suppliers or Customers

For the financial year ending March 31, 2025, 2024, and 2023, our top five customers accounted for 61.25%, 69.40% and 90.30%, respectively, and our largest customer accounted for 14.38%, 15.89% and 64.98% of our revenue from operations, respectively.

For the financial year ending March 31, 2025, 2024, and 2023, our top five supplier accounted for 82.28%, 90.60% and 96.07%, respectively, and our largest supplier accounted for 25.16%, 27.28% and 57.29% of our Total Purchase of Products, respectively.