Manglam Infra & Engineering Ltd Management Discussions

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the Year ended on March 31, 2024, March 31, 2023 and March 31, 2022. You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Red herring Prospectus. You should also read the section entitled "Risk Factors" beginning on page 31 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 twelvemonth period ended March 31 of that year. In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers to Manglam Infra & Engineering Limited (erstwhile Partnership firm "Manglam Associates"), our Company. Unless otherwise indicated, financial information included herein are based on our "Restated Financial Statements" for Financial Year ended on March 31, 2024, March 31, 2023 and March 31, 2022 included in this Red herring Prospectus beginning on page 188.

BUSINESS OVERVIEW

Our Company was originally formed as a partnership firm under the Indian Partnership Act, 1932 in the name and style of "Manglam Associates" pursuant to partnership deed dated February 17, 2010 between Yogendra Kumar Singh, Ajay Verma, Nisha Singh and Seema Verma. The partnership firm was then converted into Public Limited company under part I (Chapter XXI) of the Companies Act, 2013 in the name and style of Manglam Infra & Engineering Limited vide Certificate of Incorporation dated July 20, 2023, was issued by the Registrar of Companies, Central Registration Centre. The corporate identification number of our Company is U43900MP2023PLC066771. The initial subscribers to the Memorandum of Association of our Company are Yogendra Kumar Singh, Ajay Verma, Nisha Singh, Seema Verma, Dinesh Kumar Tripathi, Munish Verma and Sanika Singh. We are an infrastructure consultancy company, and our core business is providing project management consultancy services which includes detailed project reports (DPRs), Supervision and quality control (SQC), and operation & maintenance (O & M) for Highways/Roads, Bridges, Tunnels, Buildings/Urban development. We undertake various project independently as well as through Joint ventures and MoUs with other players in this industry. As on date of the Red herring Prospectus, we cater to various state governments of Madhya Pradesh, Jammu & Kashmir, Bihar, Arunachal Pradesh, Jharkhand, Himachal Pradesh, Uttar Pradesh, Manipur, Nagaland, Maharashtra, Assam, Rajasthan, Uttarakhand and Haryana and central government and have completed total 127 projects out of which 116 projects are undertaken on an independent basis and 11 projects are undertaken through Joint ventures and MoUs. Currently, we have 45 on-going projects out of which 22 projects are being undertaken on an independent basis and 23 projects are being undertaken through Joint ventures and MoUs. We are a team of more than 300 qualified professionals, with experience ranging between 7 to 15+ years. In alignment with our business requirements, we also occasionally engage third-party service providers for specific contracts on need basis. Our Order Book, comprising anticipated revenues from the unexecuted portions of existing contracts (including signed contracts for which all pre-conditions to entry into force have been met and letters of acceptance issued by the client prior to execution of the final contract) as of May 31, 2024, was 7,890.87 Lakhs. Our total revenue and net profit as restated in the financial statements have shown positive CAGR in last three Financial Years.

Our total revenue has increased from 2,678.36 lakhs for Fiscal 2022 to 4,050.79 lakhs for Fiscal 2024, at a CAGR of 22.98%. Our net profit as restated has increased from 332.96 lakhs for Fiscal 2022 to 676.41 lakhs for Fiscal 2023, at a CAGR of 42.53%. Our promoters, Ajay Verma and Yogendra Kumar Singh collectively bring more than 33 years of technical experience to our organization in the field of Infrastructure Consultancy Engineering Services. Their role as the guiding force has been paramount in the successful execution of our business strategies over the years. Their industry knowledge, understanding, track record, and relationships within the sector have played a pivotal role in the growth of our business. Moreover, these attributes provide us with a competitive edge, enabling the expansion of our geographical footprint. Simultaneously, their strategic insights have empowered us to explore new avenues for future growth.

Table set forth below is bifurcation of our revenue under our business verticles:

( in lakhs)

Business Verticals	FY 2024		FY 2023		FY 2022
	Amount	%	Amount	%	Amount	%
Detailed Project Report
Highways/Roads	202.00	5.02%	1,167.25	33.9 %	607.78	23.55%
Bridges	13.73	0.34%	10.84	0.31%	56.72	2.20%
Buildings/Urban	37.24	0.93%	17.19	0.50%	-	-
Development
Supervision and quality control
Highways/Roads	2080.55	51.70%	1,442.24	41.9%	1,386.05	53.70%
Bridges	889.45	22.10%	445.26	12.94%	135.44	5.25%
Buildings/Urban	73.62	1.83%	41.55	1.21%	131.95	5.11%
Development
Operational and	719.13	17.87%	317.56	9.23%	263.21	10.20%
maintenance
Water Supply	8.64	0.21%	-	-	-	-
Total	4,024.36	100%	3,441.88	100%	2,581.16	100%

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, 2024, 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.

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 188 of the 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, 2023, and financial years ended March 31, 2023, 2022 and 2021 the components of which are also expressed as a percentage of total revenue for such period and financial years

Particulars			For the year ended on
	March 31, 2024	% of Total Income	March 31, 2023	% of Total Income	March 31, 2022	% of Total Income
Revenue from operation	4024.36	99.35	3,441.88	98.96	2,581.16	96.37
Other income	26.43	0.65	36.26	1.04	97.20	3.63
Total	4050.79	100.00	3,478.14	100.00	2,678.36	100.00
Revenue
Consultancy	1447.64	35.74	1325.78	38.12	1047.83	39.12
Expenses
Employee	1004.65	24.80	832.09	23.92	701.26	26.18
Benefits
Expenses
Finance Cost	36.58	0.90	58.29	1.68	52.22	1.95
Depreciation	99.13	2.45	78.20	2.25	50.25	1.88
and
Amortisation
Cost
Other	534.28	13.19	414.07	11.90	362.59	13.54
Expenses
Total	3122.29	77.08	2,708.43	77.87	2,214.15	82.67
Expenses
Profit Before	928.50	22.92	769.71	22.13	464.21	17.33
Tax
Tax Expenses	252.10	6.22	215.55	6.20	131.25	4.90
Profit (Loss)	676.41	16.70	554.16	15.93	332.96	12.43
for the Year

Review of Restated Financials

Revenue from Operations: Revenue from operations mainly consists of sale of services by way of 1) Detailed Project Report of Bridges, Roads & Industrial Development; 2) Supervision & Quality Control services of Bridges, Roads, O&M, RAMS, Industrial Development & Buildings. Other Income: Other income includes interest income on fixed deposits, interest income on Income Tax Refund, profit from sale of fixed assets, Discount, and Miscellaneous income. Total Income: Our total income comprises of revenue from operations and other income. Total Expenses: Companys total expenses consist of Employee benefit expenses, finance costs, depreciation and amortization expenses, other expenses. Employee Benefits Expense: Employee benefit expense includes Salary & Wages, Director remuneration, Staff Welfare Expenses, contribution to provident fund. Finance Cost: Finance cost includes bank charges and interest expense. Other expenses: Other expenses mainly consist of legal and professional charges, rent expense, electricity and fuel expense, office expense, travelling and conveyance, repair and maintenance expense.

COMPARISON OF F.Y. 2024 WITH F.Y. 2023:

Revenue from Operations

The Companys revenue from operations the financial year 2023-24 is 4,024.36 lakhs. This represents 582.48 lakhs or 16.92% increase compared to the previous financial years total income of 3441.88 lakhs.

Most of the revenue came from offering Detailed Project Report of Roads and Supervision & Quality control of Bridges, Roads and O&M. The main reason for this was receipt of supervision projects by our Company wherein higher margins were quoted by us. In addition, there was no corresponding increase in expenses on account of COVID.

Other Income

Other Income in the Financial Year 2023-24 shrunk by 27.11%, reaching 26.43 lakhs in comparison to the 36.26 lakhs incurred in the Financial Year 2022-23. This decline was primarily due to decrease in miscellaneous income of 10.27 lakhs.

Consultancy Expenses

Consultancy expenses in the Financial Year 2023-24 increased by 9.19%, reaching 1447.64 lakhs in comparison to the 1325.78 lakhs incurred in the Financial Year 2022-23.

Employee Benefits Expenses

Employee benefit expenses in the Financial Year 2023-24 increased by 20.74%, reaching 1004.65 lakhs in comparison to the 832.09 lakhs incurred in the Financial Year 2022-23. This rise in employee expenses primarily stemmed from increases in salaries and wages, which went up by 151.74 lakhs.

Finance Cost

Finance cost in the Financial Year 2023-24 decreased by 37.24%, reaching 36.58 lakhs in comparison to the

58.29 lakhs incurred in the Financial Year 2022-23. The decrease of the Finance Charges is on account decrease in Interest on capital to erstwhile partners by 33.09 lakhs in the FY 2022-23.

Depreciation and Amortisation Expenses

Depreciation and amortization in the Financial Year 2023-24 surged by 20.93%, reaching 99.13 lakhs in comparison to the 78.20 lakhs incurred in the Financial Year 2022-2 3. This increase in depreciation was a result of acquiring fixed assets.

Other Expenses

Other expenses in the Financial Year 2023-24 increased by 29.03%, reaching 534.29 lakhs in comparison to the 414.07 lakhs incurred in the Financial Year 2022-2 3. This rise in other expenses was primarily attributed to several factors, including 40.51 lakhs increase in Rent expense, 25.60 lakhs increase in Pre incorporation expenses, 16.34 lakhs increase in electricity and fuel expense.

Tax Expenses:

Tax expenses increased by 16.96%, reaching a total of 252.10 lakhs in the financial year 2023-24, in contrast to the 215.55 lakhs in the financial year 2022-23. This notable increase in tax expenses can be primarily attributed to 23.48 lakhs rise in current tax payments.

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 2023-24 reached 685.34 lakhs, marking a notable increase from 554.16 lakhs in the financial year 2022-23. In the financial year 2023-24, PAT constituted 16.92% of the total revenue, in contrast to 15.93% in the fiscal year 2022-23.

COMPARISON OF F.Y. 2023 WITH F.Y. 2022:

Revenue from Operations

The Companys revenue from operations the financial year 2022-23 is 3,441.88 lakhs. This represents 860.72 lakhs or 33.35% increase compared to the previous financial years total income of 2,581.16 lakhs.

Most of the revenue came from offering Detailed Project Report of Roads and Supervision & Quality control of Bridges, Roads and O&M. The main reason for this was receipt of supervision projects by our Company wherein higher margins were quoted by us. In addition, there was no corresponding increase in expenses on account of COVID.

Other Income

Other Income in the Financial Year 2022-23 shrunk by 62.7%, reaching 36.26 lakhs in comparison to the

97.20 lakhs incurred in the Financial Year 2021-22. This decline was primarily due to decrease in miscellaneous income of 59.27 lakhs.

Consultancy Expenses

Consultancy expenses in the Financial Year 2022-23 increased by 26.53%, reaching 1325.78 lakhs in comparison to the 1047.83 lakhs incurred in the Financial Year 2021-22.

Employee Benefits Expenses

Employee benefit expenses in the Financial Year 2022-23 increased by 18.66%, reaching 832.09 lakhs in comparison to the 701.26 lakhs incurred in the Financial Year 2021-22. This rise in employee expenses primarily stemmed from increases in salaries and wages, which went up by 139.87 lakhs.

Finance Cost

Finance cost in the Financial Year 2022-23 increased by 11.62%, reaching 58.29 lakhs in comparison to the 52.22 lakhs incurred in the Financial Year 2021-22. The increase of the Finance Charges is on account increase in Interest expense by 4.93 lakhs in the FY 2022-23.

Depreciation and Amortisation Expenses

Depreciation and amortization in the Financial Year 2022-23 surged by 55.62%, reaching 78.20 lakhs in comparison to the 50.25 lakhs incurred in the Financial Year 2021-22. This increase in depreciation was a result of acquiring fixed assets.

Other Expenses

Other expenses in the Financial Year 2022-23 increased by 14.20%, reaching 414.07 lakhs in comparison to the 362.59 lakhs incurred in the Financial Year 2021-22. This rise in other expenses was primarily attributed to several factors, including ssss 31.53 lakhs increase in Rent expense, 20.70 lakhs increase in Electricity and Fuel expenses, 4.70 lakhs increase in Repair and Maintenance expense, 4.56 lakhs increase in Insurance expenses, and 10.60 lakhs increase in Miscellaneous expenses.

Tax Expenses:

Tax expenses increased by 64.23%, reaching a total of 215.55 lakhs in the financial year 2022-23, in contrast to the 131.25 lakhs in the financial year 2021-22. This notable increase in tax expenses can be primarily attributed to 87.93 lakhs rise in current tax payments.

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 2022-23 reached 554.16 lakhs, marking a notable increase from 332.96 lakhs in the financial year 2021-22. In the financial year 2022-23, PAT constituted 15.93% of the total revenue, in contrast to 12.43% in the fiscal year 2021-22.

Cash Flow

The table below summaries our cash flows from our Restated Financial Information for the period ended September 30, 2023, and for the financial years ended on 2024, 2023, and 2022:

Particulars	FY 2024		FY 2023		FY 2022
Net cash (used in)/ Generated from operating activities	85.49		447.47		365.76
Net cash (used in)/ Generated from investing activities	(239.32)		(135.48)		(234.40)
Net cash (used in)/ Generated from finance activities	200.82		(321.55)		(122.33)
Net increase/ (decrease) in cash and cash equivalents	46.99		(9.56)		9.03
Particulars		FY 2024		FY 2023		FY 2022
Cash and Cash Equivalents at the beginning of the period		2.27		11.83		2.80
Cash and Cash Equivalents at the end of period		49.26		2.27		11.83

Cash Flow from/(used in) Operating Activities

For fiscal 2024, to net cash from operating activities was 85.49 lakhs as compared to Profit Before Tax of 928.51 lakhs. For fiscal 2023, net cash from operating activities was at 447.47 lakhs as compared to Profit Before Tax of 769.71 lakhs while for fiscal 2022, net cash from operating activities was at 365.76 lakhs as compared to Profit Before Tax of 464.21 lakhs.

Cash Flow from/(used in) Investing Activities

For the fiscal 2024, to net cash used in investing activities was 239.32 lakhs due purchase of 260.77 lakhs and interest on FD of 21.45 lakhs. For fiscal 2023, net cash used in investing activities was

135.48 lakhs due to purchase of fixed assets, while for fiscal 2022, net cash used in investing activities was 234.40 lakhs due to purchase of fixed assets.

Cash Flow from/(used in) Financing Activities

For the fiscal 2024, to net cash from financing activities was 200.82 lakhs due to increase in long term and short-term borrowing of 221.40 lakhs. For fiscal 2023, net cash used in financing activities was 321.55 lakhs due to withdrawal of capital. For fiscal 2022, net cash used in financing activities was

122.33 lakhs due to withdrawal of capital.

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 other than shut down of business due to COVID-19.

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 31 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 consists of sale of services by way of Detailed Project Report, Supervision & Quality Control services, O&M.

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 31 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 92 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 customers:

The % of contribution of our Companys customers vis-?-vis the total revenue from operations respectively as of for the period ended for the Fiscal 2024, 2023 and 2022 are as follows:

Particulars	Top Customers as a percentage (%) of revenue of operations
	Fiscal 2024	Fiscal 2023	Fiscal 2022
Top 5	92.09%	93.52%	84.01%
Top 10	99.36%	99.85%	97.60%

11. Competitive conditions.

Competitive conditions are as described under the Chapters titled "Industry Overview" and "Our Business" beginning on pages 92 and 107, respectively of this Red herring Prospectus