The following discussion is intended to convey the managements perspective on our financial condition and results of operations for Fiscals 2025, 2024 and 2023 and should be read in conjunction with "Restated Consolidated Financial Information" on page 284.
This Draft Red Herring Prospectus may include forward-looking statements that involve risks and uncertainties, and our actual financial performance may materially vary from the conditions contemplated in such forward-looking statements as a result of various factors, including those described below and elsewhere in this Draft Red
Herring Prospectus. For further information, see "Forward-Looking Statements" on page 21. Also see "Risk Factors" and " Significant Factors Affecting our Results of Operations and Financial Condition" on pages 37 and 387, respectively, for a discussion of certain factors that may affect our business, financial condition or results of operations.
Our Companys Fiscal commences on April 1 and ends on March 31 of the subsequent year, and references to a particular Fiscal are to the 12 months ended March 31 of that particular year. Unless otherwise indicated or the context otherwise requires, the financial information for the Fiscals 2025, 2024 and 2023 included herein is derived from the Restated Consolidated Financial Information, included in this Draft Red Herring Prospectus.
For further information, see "Restated Consolidated Financial Information" on page 284. In this section, we have compared our consolidated financial information as of and for year ended March 31, 2025, March 31, 2024 and March 31, 2023.
Ind AS differs in certain respects from Indian GAAP, IFRS and U.S. GAAP and other accounting principles with which prospective investors may be familiar. Also see "Risk Factors Significant differences exist between Ind AS and other accounting principles, such as U.S. GAAP and IFRS, which investors may be more familiar with and may consider material to their assessment of our financial condition" on page 80.
Unless otherwise indicated, industry and market data used in this section has been derived from industry publications, in particular, the report titled "Value Added Dairy Products Industry Report" dated July 21, 2025 (the "1Lattice Report") prepared and issued by Lattice Technologies Private Limited, pursuant to an engagement letter dated January 16, 2025. The 1Lattice Report has been exclusively commissioned and paid for by our Company in connection with the Offer. The data included herein includes excerpts from the 1Lattice Report and may have been re-ordered for the purposes of presentation. A copy of the 1Lattice Report will form part of the material documents for inspection and is available on the website of our Company at https://www.milkymist.com/ipo. Unless otherwise indicated, financial, operational, industry and other related information derived from the 1Lattice Report and included herein with respect to any particular year/ Fiscal refers to such information for the relevant Calendar Year/ Fiscal. For further information, see "Risk Factors Certain sections of this Draft Red Herring Prospectus disclose information from the 1Lattice Report which is a paid report and commissioned and paid for by us exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks." on page 76. Also see, "Certain Conventions, Use of Financial Information and Market Data and Currency of Presentation
Industry and Market Data" on page 19.
OVERVIEW
We are a product-led company, exclusively focused on value-added products within the dairy market, dedicated to addressing the diverse and emerging consumer needs for the entire day, from breakfast to dinner. Over the years, we have diversified our product categories to include various value-added dairy products, such as cheese, paneer, butter, curd, ghee, yogurt, ice cream, UHT long-shelf life products, and other products, including frozen foods, RTE and RTC products, as well as chocolates. We offer our products under our umbrella brand ‘Milky Mist, and sub-brand such as ‘SmartChef, ‘Capella, and ‘Misty Lite, and have recently acquired brands such as ‘Briyas and ‘Asal.
We have an integrated farm to retail infrastructure. We source raw milk, our primary raw material, directly from farmers. As of March 31, 2025, we sourced raw milk from 67,615 farmers, located in 22 districts across the states of Tamil Nadu, Andhra Pradesh and Karnataka, all within a 400 kilometres radius from our manufacturing facility at Perundurai, Erode District, Tamil Nadu. We foster long-standing relationships with farmers by eliminating middlemen, providing them with higher realization, and making direct payments every 7 to 10 days, thereby ensuring their loyalty. We procure raw milk through a three-tier structure to ensure quality: farmers deposit milk at our tech-enabled automated milk collection units ("AMCUs") for initial testing, which is then transported to our chilling centers for further analysis, and finally, undergoes additional testing at our manufacturing facility at Perundurai, Erode District, Tamil Nadu before processing.
Our strategically located manufacturing facility in Perundurai, Erode District, Tamil Nadu capitalizes on the regions robust dairy farming community to ensure a consistent supply of high-quality raw milk (Source: 1Lattice Report). Our manufacturing facilities are equipped with advanced machinery (including imported machinery) to ensure the consistent quality of our products and operational efficiency. Our fully-automated production processes enable higher throughput, quality products and improved production timelines. We have also implemented advanced technology in our manufacturing facilities to enhance hygiene and manufacturing efficiency.
We manage our own logistics to ensure that our diverse product range, which requires chilled, ambient, or frozen conditions, maintains its quality from procurement of the raw materials to the point of sale. Our fleet comprises milk vans for transporting milk from farmers to our manufacturing facility at Perundurai, Erode District, Tamil Nadu, reefer trucks with in-built refrigeration for carrying perishable products that require specific temperature control from our manufacturing facilities to distributors, ambient trucks for transporting non-perishable products from our manufacturing facilities to distributors. This helps us maintain the quality and safety of our products throughout the entire supply chain and ensures timely delivery of the products at a lower cost.
We have demonstrated our ability to expand our presence across various regions and achieve leadership positions in certain product categories. Over the years, we have expanded our presence through multiple sales channels. Our sales channels include general trade, modern trade, HoReCa, online platforms (including e-commerce platforms and quick commerce platforms) and our Milky Mist exclusive parlours. In addition, as on the date of this Draft Red Herring Prospectus, we have 108 Milky Mist exclusive parlours across eight states in India, including Tamil Nadu, Andhra Pradesh, and Kerala where consumers can purchase our products, enhancing brand engagement and visibility.
For further details regarding our business operations, see "Our Business" on page 202.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Our business and results of operations are affected by a number of important factors including:
Availability and price of raw milk
Our manufacturing operations are dependent on the supply of large amounts of raw milk, which is the primary raw material used in the manufacture of all our dairy products. Therefore, our ability to source raw milk is a significant factor that drives our results of operations and overall business success. As of March 31, 2025, we sourced raw milk from 67,615 farmers, located in 22 districts across the states of Tamil Nadu, Andhra Pradesh and Karnataka, all within a 400 kilometres radius from our manufacturing facility at Perundurai, Erode District, Tamil Nadu. We procure the majority of raw milk from the state of Tamil Nadu, the details of which are set forth below for the years indicated:
Fiscal 2025 |
Fiscal 2024 |
Fiscal 2023 |
||||
| % of total raw | % of total | Raw milk (in | % of total | |||
| Particulars | Raw milk (in | Raw milk (in | ||||
| milk | raw milk | million | raw milk | |||
| million litres) | million litres) | |||||
| procurement | procurement | litres) | procurement | |||
| Tamil Nadu | 300.08 | 97.68% | 271.77 | 99.62% | 201.18 | 100.00% |
| Others* | 7.12 | 2.32% | 1.03 | 0.38% | - | - |
| Total raw milk | 307.20 | 100.00% | 272.80 | 100.00% | 201.18 | 100.00% |
| procurement | ||||||
*Others include Maharashtra, Karnataka, Telangana and Andhra Pradesh.
As we continue to grow our product portfolio and increase our production capacities, we would need to expand our milk procurement base. Our commitment to enhancing our procurement capabilities is evident through an increase in our automated milk collection units ("AMCUs") and chilling centers. We have increased our AMCUs from 2,852 as of March 31, 2023 to 3,460 as of March 31, 2025. Further, as of the date of this Draft Red Herring Prospectus, we have 21 chilling centres (comprising Milk Chilling Centres and Bulk Milk Coolers). Further, we intend to strengthen our existing relationships with milk farmers and built new relationships through various initiatives including milk quality and quantity based incentives, providing farmers with cattle feed, assisting with veterinary health-care, vaccinations, artificial insemination and facilitating the process of obtaining loans to purchase cattle. We also plan to expand our network by establishing additional tech-enabled automated milk collection units. The availability and price of raw milk is subject to a number of factors beyond our control including seasonal factors, environmental factors, general health of cattle in India and Government policies and regulations. For example, the volume and quality of milk produced is dependent upon the quality of nourishment provided by the cattle feed and could be adversely affected during period of extreme weather. Further, fluctuations in raw milk prices and availability can directly influence our cost of goods sold and overall results of operations and financial condition.
Further, in alignment with the prevailing industry practice, we procure the majority of milk directly from dairy farmers, with whom we have no formal arrangements. The amount of raw milk procured and the price at which we procure such supplies, may fluctuate from time to time in the absence of a formal supply arrangement. Therefore, our relationship with farmers is crucial for maintaining a steady and reliable supply of raw milk, which is essential for our production and operational success. We foster long-standing relationships with farmers by eliminating middlemen, providing them with higher realization, and making direct payments, thereby ensuring their loyalty. We support farmers through initiatives like training in dairy farming, providing cattle feed, promoting clean milk production, offering silage training, supplying fodder seeds, veterinary support, artificial insemination services, and loan assistance for cattle purchase. These efforts help us build strong relationships and ensure high-quality milk.
Introduction of new products to cater to evolving consumer preferences, including through strategic acquisitions
The success of our business and results of operations depend upon our ability to anticipate and identify changes in consumer preferences and offer products that appeal to consumers. Over the years, we have diversified our product categories to include various value-added dairy products, such as paneer, cheese, curd, butter, ghee, yogurt, ice cream, UHT long-shelf life products, and other products, including frozen foods, RTE and RTC products, as well as chocolates. Our diversified product portfolio comprises 23 product categories with 416 SKUs, as of March 31, 2025, to address diverse consumer requirements.
The table below sets forth details of our revenues from the sale of our product categories for the years indicated:
Fiscal 2025 |
Fiscal 2024 |
Fiscal 2023 |
||||
| %of | %of | %of | ||||
| Product Category | Amount | revenue | Amount | revenue | Amount | revenue |
| ( million) | from | ( million) | from | ( million) | from | |
| operations | operations | operations | ||||
| Paneer | 6,936.08 | 29.52% | 5,588.91 | 30.68% | 4,379.64 | 31.41% |
| Cheese | 4,078.33 | 17.36% | 3,472.57 | 19.06% | 2,689.96 | 19.29% |
| Curd | 3,701.04 | 15.75% | 2,991.03 | 16.42% | 2,322.19 | 16.66% |
| Ice-cream | 1,376.78 | 5.86% | 345.15 | 1.89% | Nil** | Nil** |
| Others product categories* | 7,402.80 | 31.51% | 5,818.43 | 31.94% | 4,549.96 | 32.64% |
| Revenue from operations | 23,495.03 | 100.00% | 18,216.09 | 100.00% | 13,941.75 | 100.00% |
*Other product categories includes ghee, butter, chocolate, khova and UHT long-shelf life products. ** We started selling ice-cream in Fiscal 2024.
Summary of key markets which consists of value-added dairy products, RTE / RTC meals and chocolates & confectionery- has shown significant growth over the years, grew from 3.7 trillion in Fiscal 2020 to 6.0 trillion in Fiscal 2025, at a CAGR of 10.3%.(Source: 1Lattice Report)
Summary of key markets
| CAGR (Fiscal | CAGR (Fiscal | ||||
| Fiscal 2020 | Fiscal 2025 | Fiscal 2030 | |||
| Key market | 2020 to Fiscal | 2025 to Fiscal | |||
| (in trillion) | (in trillion) | (in trillion) | |||
| 2025) | 2030) | ||||
| Value-added | 3.4 | 5.5 | 9.9 | 10.1% | 12.5% |
| dairy products | |||||
| Chocolates and | 0.2 | 0.4 | 0.5 | 14.9% | 4.6% |
| confectionery | |||||
| RTE / RTC meals | 0.08 | 0.1 | 0.3 | 4.6% | 24.6% |
| Total | 3.7 | 6.0 | 10.7 | 10.3% | 12.3% |
We constantly seek to develop our research and development capabilities to distinguish ourselves from our competitors to enable us to introduce new products and different variants of our existing products, based on consumer preferences and demand, to capitalise on the expanding TAM. Between April 1, 2022 and March 31, 2025, we introduced 4 product categories, including UHT long-shelf life range of products, ice creams, chocolates and sweetened condensed milk, expanding our market presence and catering to the evolving preferences of consumers for the entire day, from breakfast to dinner.
Further, on average, an individual needs 0.86 to 1.0 grams of protein per kilogram of body weight daily to maintain a healthy lifestyle. However, approximately 80% of the population falls short of their daily protein requirements, with current consumption being around 65-75% of the recommended 0.86-1.0 grams of protein per kilogram of body weight. Additionally, Indias per capita protein consumption is below than global averages. (Source: 1Lattice
Report) Expanding access to affordable, high-quality protein options such as dairy and value-added products can help improve overall health and nutrition outcomes, aligning with global dietary trends. Our product portfolio includes products with protein-enriched contents such as ‘Skyr Yogurt, ‘Greek Yogurt and high protein paneer will help us capitalise on the growing demand for protein-rich dairy products.
The markets for RTE, RTC and frozen foods are experiencing significant growth, driven by changing lifestyles, urbanization, and a preference for ready-made meals, which are seen as time-saving and hassle-free options. Additionally rising population of students and bachelors living away from home who seek convenient meal solutions and the growing number of working women who may not prefer cooking daily boost the popularity of quick and hassle-free meal options. (Source: 1Lattice Report) Our venture into these synergistic product categories has further expanded our addressable market, which will influence our business, results of operations and financial condition. Our product categories also include high margin value-added products such as cheese, cream, yogurt, curd and ice-creams and products with protein-enriched contents, lactose-free alternatives, reduced-salt content, and sugar-reduced choices for diabetics. (Source: 1Lattice Report) Operating in the high-margin value-added category will also influence our business, results of operations and profitability.
Further, we have historically pursued strategic acquisitions in order to increase our product offerings. For example, our Company has entered into an asset purchase agreement dated February 19, 2025 with Briyas Foods Private Limited ("Briyas") and others for the transfer and assignment of certain identified assets from Briyas in relation to its tofu business and a share purchase agreement dated March 29, 2025 with our Promoters, Sathishkumar T, Anitha S, and Asal Food Products Private Limited ("Asal") for acquisition of 100% of the issued and paid-up share capital of Asal by our Company, thereby enabling us to include frozen foods, RTE and RTC products into our product categories. For further details, see "History and Certain Corporate Matters Details of material acquisitions or divestments of business undertaking in the last 10 years" on page 250. We continue to evaluate select acquisition opportunities that expand our opportunities in other end-markets, geographic regions, new customers and new products.
Competition and pricing pressure
We face competition from a number of international, regional and domestic companies. Some of our key peers include Nestle India, Britannia Industries, Tata Consumer Products, Hatsun Agro Products, Parag Milk Foods, Dodla Dairy, Bikaji Foods and Mother Dairy. (Source: 1Lattice Report). For more information, see "Industry Overview" on page 160. Some of our competitors may be larger than us, may have more financial and other resources and have products with greater brand recognition than ours. Our competitors in certain regions may also have better access to raw materials required in our operations and may procure them at lower costs than us. Some of our international competitors may be able to capitalize on their overseas experience to compete in the Indian market. Our diverse product portfolio caters to customers across various segments and the success of our business is dependent on our ability to competitively price our products. Our pricing policy is based on several factors including the cost of operations and raw material, market analysis, including analysis of customer needs and our competitive position and the pricing of certain products in the markets. We seek to offset the effect of this pricing pressure by increasing the efficiency of our manufacturing operations.
Further, we derive a significant portion of our revenues from the sale of our products in South India (comprising of states of Karnataka, Tamil Nadu, Kerala, Andhra Pradesh and Telangana). For further information, see "Risk Factors - We derive a significant portion of our revenue from the sale of our products in South India. Our aggregate revenue from the sale of products in South India accounted for 71.00%, 73.68% and 78.46% of our revenue from operations for Fiscal 2025, 2024 and 2023, respectively. Any adverse developments affecting our operations in South India, could have an adverse impact on our business, financial condition, results of operations and cash flows." on page 39. Any escalation in competitive discounting or our failure to differentiate on non-price attributes could therefore have an impact on our business, results of operations, financial condition and cash flows.
Ability to maintain brand image
We offer our products under our umbrella brand ‘Milky Mist, and sub-brand such as ‘SmartChef, ‘Capella, and ‘Misty Lite, and have recently acquired brands such as ‘Briyas and ‘Asal. We believe that our focus on quality and differentiated offerings has helped us create a brand that resonates strongly with consumers. We spend on advertising across various channels, including traditional advertising, social media campaigns, and digital platforms to enhance our brand equity. In Fiscal 2025, 2024 and 2023, our advertisement and business promotion expenses were 711.32 million, 205.60million and 164.40 million, representing 3.03%, 1.13% and 1.18% of our revenue from operations, respectively. A significant part of our success has been, and will continue to be, dependent on our ability to maintain a strong brand image. For example, we started selling ice-cream in Fiscal 2024 and we believe that our marketing efforts to promote our ice-cream products played an important role in increase the sale of ice-cream which increased from 345.15 million in Fiscal 2024 to 1,376.78 million in Fiscal 2025.
We intend to strengthen our brands through increased advertising. In particular, we intend to leverage the influence of brand ambassadors and strategic sponsorships to enhance our brand visibility. We also intend to implement targeted marketing strategies, such as influencer meetups and events and invest in performance marketing initiatives, including pay-per-click advertising and search engine optimization, to increase online visibility of our brands and products, particularly for our new products, ensuring that they receive maximum exposure and consumer awareness from the outset.
Further, we have deployed visi coolers, ice cream freezers and chocolate coolers across various states in India including Tamil Nadu, Karnataka, Kerala and Telangana. By deploying these units, at retail touchpoints, we aim to create a consistent visual identity across various retail locations, helping us increase our brand recall value and support the cold chain infrastructure needed to maintain product quality at the retail level. We also intend to utilize a portion of the Net Proceeds for deployment of visi coolers, ice-cream freezers and chocolate coolers. For details, see "Objects of the Offer - Deployment of visi coolers, ice cream freezers and chocolate coolers" on page 136. We believe that expanding our network of visi coolers, ice-cream freezers and chocolate coolers will help us increase our revenue, deepen retail penetration and reinforce our brand presence. Our ability to realise the intended return on these capital assets is contingent upon their timely placement at retail touchpoints. Any delay in deployment may defer the revenue we expect them to generate while the continuous depreciation expenses on such assets could have an impact on our profitability.
Distribution Network
Our distribution network plays a crucial role in expanding our market reach and driving our results of operations. We have increased our distribution network from 2,033 distributors as of March 31, 2023 to 3,062 distributors as of March 31, 2025 which are present across 22 states and 5 union territories in India. This growth in our distribution network has enhanced our ability to reach more customers and has contributed to an increase in sales volume, which in turn has improved our revenue and profitability. We are constantly seeking to gain market share and strengthen our position in the Southern region comprising Tamil Nadu, Karnataka, Kerala, Andhra Pradesh and Telangana and establish a stronger presence in other regions by onboarding new distributors. Further, the success of our distribution strategy hinges significantly on our ability to manage our distribution network. This networks performance is linked to our results of operations and financial condition. Efficient and timely distribution of our products is essential for meeting customer demand, maintaining market share and ensuring customer satisfaction. Conversely, any disruption in the distribution network, such as delays in delivery or non-compliance with distribution agreements, can impact our ability to meet customer expectations, potentially leading to lost sales opportunities and a negative effect on our business and results of operations. Therefore, the reliability and effectiveness of our distribution network are pivotal in supporting our business growth.
Our Expansion Plans
Our future results of operations will be affected by our ability to execute our capacity expansion plans and adoption of innovative technology for manufacturing our existing and new products. Over the years, we have invested in capacity building and introducing new product technologies in our manufacturing operations. For details regarding introduction of advanced technology in our manufacturing operations, see "-Our Business Expand our production capacity and augment our procurement capabilities" on page 217.
To cater to the growing demand for our existing products and to manufacture new products, we intend to expand our production capacity at our manufacturing facility at Perundurai, Erode District, Tamil Nadu. To do so, we propose to utilise the Net Proceeds to install and commission: (i) whey protein concentrate and lactose manufacturing plant; (ii) yogurt manufacturing plant with packing line; (iii) cream cheese and fresh cheese manufacturing plants; and (iv) capacity addition in processed cheese by adding continuous cooker and chiplet packing lines. For further details, see "Objects of the Offer - Financing the capital expenditure requirements in relation to the expansion and modernisation of our Perundurai Manufacturing Facility" on page 131. The success of these expansion plans will affect our results of operations and cash flows.
Government Incentives
Our participation in various government incentive programs influences our results of operations and financial condition. We have enrolled in the Remission of Duties or Taxes on Export Products ("RoDTEP") scheme, which aims to reimburse taxes and duties charged at the local, state, and central levels for the transportation of export products. Under this scheme, some of our products are eligible for incentives ranging from 0.50% to 1.00%. Under the Export Promotion Capital Goods ("EPCG") scheme, we are obligated to export goods amounting to a sum equivalent to the duties, taxes, and cess saved on the import of capital goods. Certain of our finished products are also eligible for an incentive of 0.15% under the duty drawback scheme, wherein exporters get a refund on customs duties paid on imported products that are used or incorporated in other products for export. We are also eligible for an interest subvention of 3% over a maximum period not exceeding 8 years from the date of first disbursement inclusive of moratorium of 2 years on repayment of principal, under the Animal Husbandry Infrastructure Development Fund ("AHIDF"). We received our first interest subvention in Fiscal 2024. In Fiscal 2025 and 2024, we have received 183.77 million and 129.34 million under the AHIDF, respectively. We have also entered into Memorandum of Understandings ("MoUs") dated November 23, 2021 and January 8, 2024 with the Government of Tamil Nadu to intensify capital investments amounting to 6,000 million and 5,000 million, respectively. Subsequently, we have received government order dated August 20, 2024 with a capital commitment of 12,770 million, from the Government of Tamil Nadu, for the turnover based subsidiary in the form of reimbursement of 1.75% of the eligible annual turnover for a period of 10 years subject to conditions thereof. These government incentives and subsidies play a crucial role in enhancing our financial performance by reducing costs, increasing profitability, and supporting our growth initiatives.
PRESENTATION OF FINANCIAL INFORMATION
The Restated Consolidated Financial Information of our Company and its Subsidiary (the "Group") comprises the restated consolidated statement of assets and liabilities as at March 31, 2025, March 31, 2024 and March 31, 2022, the restated consolidated statement of profit and loss (including other comprehensive income), the restated consolidated statement of changes in equity, and the restated consolidated statement of cash flows for the years ended March 31, 2025, March 31, 2024 and March 31, 2023, the summary statement of material accounting policies, and other explanatory information, prepared as per the requirement of Section 26 of Part I of Chapter III of the Companies Act, 2013, SEBI ICDR Regulations, and the Guidance Note on ‘Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India, as amended from time to time. The Restated Consolidated Financial Information are derived from our audited consolidated Ind AS financial statements as at and for the year ended March 31, 2025 and the audited special purpose Ind AS consolidated financial statements as at and for the years ended March 31, 2024 and March 31, 2023, prepared in accordance with the Indian Accounting Standards and the Companies Act read with Companies (Indian Accounting Standards) Rules 2015, as amended from time to time, and the other relevant provisions of the Companies Act.
During the Fiscal ended March 31, 2025, our Company acquired Asal Food Products Private Limited in a common control transaction. The Restated Consolidated Financial Information as at and for the years ended March 31, 2025, March 31, 2024 and March 31, 2023 have been prepared after consolidating the entity acquired vide common control transactions in accordance with the requirements of Appendix C to Ind AS 103, Business Combinations which requires the financial information in the financial statements in respect of the prior periods presented to be restated as if the business combination had occurred from the beginning of the earliest period presented in the financial statements, after considering the fact that entities were under common control as of the beginning of the earliest period presented in the financial statements.
MATERIAL ACCOUNTING POLICIES
Below is a list of the material accounting policies adopted in the preparation of the Restated Consolidated Financial Information.
Property, Plant and Equipment
Property, Plant and Equipment (PPE), being fixed assets are tangible items that are held for use in the production or supply of goods or services, or for administrative purposes and are expected to be used for more than a period of twelve months.
Freehold land is carried at cost. All other items of Property, Plant and Equipment (PPE) are measured at cost, less accumulated depreciation and accumulated impairment losses, if any. Financing costs (if any) relating to acquisition of assets which take substantial period of time to get ready for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use.
Initial cost of an item of PPE comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its location and working condition necessary for it to be capable of operating in the manner intended by the Management and estimated costs of dismantling and removing the item and restoring the site on which it is located.
Items such as spare parts, stand-by equipment and servicing equipment are capitalized when they meet the definition of Property, Plant and Equipment.
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.
The carrying amount of an item of PPE is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain/ loss arising from derecognition of an item of PPE is included in the statement of Profit & Loss. The gain or loss arising from the derecognition of an item of PPE would be the difference between the net disposal proceeds, if any, and the carrying amount of the item.
Subsequent costs and disposal: Subsequent expenditure related to an item of PPE is added to its book value only if it increases the future economic benefits from the existing asset beyond its previously assessed standard of performance/life.
All other expenses on existing PPE, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress.
Depreciation: Depreciation on PPE are provided under Straight line method by the holding company and written down value method by the subsidiary company as per the useful lives and manner prescribed under Schedule II to the Companies Act, 2013
The Management believes that the estimated useful lives as per the provisions of Schedule II to the Companies Act, 2013, wherever adopted, are realistic and reflect fair approximation of the period over which the assets are likely to be used. Depreciation on assets is provided using the straight-line method by the holding company and written down value method by the subsidiary company based on rates specified in Schedule II to the Companies Act, 2013 or on estimated useful lives of assets estimated by the management.
Leasehold Improvements thereon are amortised over the primary period of lease or Estimated Useful Life whichever is lower.
Useful Life as per Schedule II of |
|||||||||
| S. No | Asset Category | Estimated Useful Life (Years) |
|||||||
Companies Act, 2013 |
|||||||||
| 1 | Building | ||||||||
| - | Factory | 30 Years |
30 Years |
||||||
| - | Other than Factory | 60 Years |
60 Years |
||||||
Improvements to Leasehold Building |
Term of Lease or Estimated |
||||||||
| 2 | |||||||||
Useful Life whichever is lower |
|||||||||
| 3 | Plant and Equipments |
||||||||
| - | Solar Power Plant | 22 Years |
|||||||
- |
Wind Generation Plant |
22 Years | 22 Years | ||||||
- |
Plant & Machinery |
10 Years | on double |
shift | 10 Years on double shift basis/15 | ||||
basis/15 years |
Years | ||||||||
- |
Crates |
3 Years | 15 Years | ||||||
| 4 | Electrical Equipment |
10 Years | 10 Years | ||||||
| 5 | Computer |
3 Years | 3 Years | ||||||
| 6 | Computer Server |
6 Years | 6 Years | ||||||
| 7 | Furniture & Fixtures |
10 Years | 10 Years | ||||||
| 8 | Office Equipment |
5 Years | 5 Years | ||||||
| 9 | Vehicles |
||||||||
- |
Two Wheeler |
10 Years | 10 Years | ||||||
- |
Four Wheelers |
8 Years/10 Years |
8 Years | ||||||
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, if there has been a significant change in the expected pattern of consumption of future economic benefits embodied in the asset, depreciation is charged prospectively to reflect the changed pattern.
Investment Property
Investment Property acquired by the group is a land or building, held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes; or sale in the ordinary course of business.
Investment properties, are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The building components of Investment properties (if any) are depreciated using the straight-line method over their estimated useful lives.
Intangible Assets and Amortisation
Intangible assets acquired separately by the group are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Computer software licenses are capitalised on the basis of costs incurred to acquire and bring to use the specific software. Operating software is capitalised and amortised along with the related fixed asset.
Intangible assets are recognised only if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
All the Intangible assets are amortised over a period of 6 years.
Gains or losses arising from de-recognition of intangible assets are measured as the difference between the net disposal proceeds and the carrying amounts of the assets and are recognised in the Consolidated statement of Profit and Loss when the assets are derecognised.
Lease
As a lessee
The Groups lease asset classes primarily consist of leases for land and buildings. The Group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Group has substantially all of the economic benefits from the use of the asset throughout the period of the lease and
(iii) the Group has the right to direct the use of the asset.
At the date of commencement of the lease, the Group recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short term and low-value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised. The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Company as a lessor
Assets subject to operating leases are included in PPE. Lease income on an operating lease is recognised in the statement of profit and loss on a straight line basis over the term of the relevant lease except to the extent that the lease payments are structured to compensate for the expected inflationary cost. Costs including depreciation are recognised as an expense in the statement of profit and loss.
Inventories
Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows:
Raw material and packing Material: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on FIFO basis.
Finished goods and work in progress: cost includes cost of direct materials, labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs.
Stores and Spares: Cost is determined on weighted average basis.
Due allowance is estimated and made by the Management for slow moving/non-moving items of inventory, where ever necessary, based on the technical assessment and such allowances are adjusted against the closing inventory value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Cash and Cash Equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.
Government Grants and Export Benefits
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will complied with. When the grant or subsidy relates to revenue, it is recognised as income or is adjusted against the related cost on a systematic basis in profit or loss over the periods necessary to match them with the related costs, which they are intended to compensate.
Where Grant relates to specific fixed assets they are presented in the Balance sheet by showing such grant as deduction from the carrying amount of asset concerned.
Financial Instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contract embodying the related financial instruments.
Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. However, trade receivables and current accounts that do not contain a significant financing component are measured at transaction price.
Subsequent measurement
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Liabilities
Initial recognition and Subsequent measurement:
Financial liabilities are initially measured at fair value, net of transaction costs. The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings:
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are de-recognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
Trade and other payables:
These amounts represent liabilities for goods or services provided to the Company which are unpaid at the end of the reporting period. Trade and other payables are presented as current liabilities when the payment is due within a period of 12 months from the end of the reporting period. For all trade and other payables classified as current, the carrying amounts approximate fair value due to the short maturity of these instruments. Other payables falling due after 12 months from the end of the reporting period are presented as non-current liabilities and are measured at amortized cost unless designated as fair value through profit and loss at the inception.
Fair value measurement
The Group measures financial instruments at fair value at each Balance Sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
a) In the principal market for the asset or liability, or b) In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable, or
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the Financial Statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level Input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Foreign Currencies
The Restated Consolidated Financial Information are presented in in Millions, which is also the Groups functional currency.
Foreign currency transactions
Transactions in foreign currencies are initially recorded by the Group at their respective functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Group uses average rate if the average approximates the actual rate at the date of the transaction.
In preparing the Restated Consolidated Financial Information of the Group, transactions in currencies other than the entitys functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are restated at the rates prevailing at that date.
Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of the Group are recognized as income or expense in the restated consolidated statement of profit and loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is measured based on at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of customer return, various discounts, rebates, schemes offered by the group as a part of the contract. The Group recognises revenue when it transfers control of product or service to a customer.
Revenues and costs relating to sales contracts are recognised as the related goods are delivered, and titles have passed, at which time all the following conditions are satisfied:
the group has transferred to the buyer the control over the goods;
the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the company; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
The Group accounts for discounts and schemes related pricing incentives to customers as a reduction of revenue based on the rateable allocation of the discounts/ incentives to each of the underlying performance obligation that corresponds to the progress by the customer towards earning the discount/ incentive.
Other Operating Revenues comprise of income from ancillary activities incidental to the operations of the Company and is recognised when the right to receive the income is established as per the terms of the contract.
Interest Income:
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset or shorter period, where appropriate to the gross carrying amount of the financial asset or to the amortized cost of a financial asset.
When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in other income in the statement of profit and loss. The expected cash flows are reassessed on a yearly basis and changes, if any, are accounted prospectively.
Employee Benefits
Retirement benefit costs and termination benefits:
(i) Defined Contribution Plan: A defined contribution plan is a post-employment benefit plan under which the group pays specified contributions to a separate entity. The group makes specified monthly contributions towards Provident Fund and Employee State Insurance. The group contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
(ii) Defined Benefit Plan: The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.
Past service cost is recognised in profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
a) service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
b) net interest expense or income; and
c) re-measurement
The group presents the first two components of defined benefit costs in profit or loss in the line item Employee benefits expenses. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the statement of financial position represents the actual deficit or surplus in the Companys defined benefit plans. The group presents the above liability/(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary and also considering whether the holding company will contribute this amount to the gratuity fund within the next twelve months. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
Short-term and other long-term employee benefits:
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the group in respect of services provided by employees up to the reporting date.
Borrowing Costs
Borrowing cost includes interest expense as per Effective Interest Rate (EIR) and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, and share split that have changed the number of equity shares outstanding, without a corresponding change in resources.
Diluted earnings per share is computed by dividing the profit/(loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
Taxation
Income tax expense represents the sum of the current tax and deferred tax.
Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in other comprehensive income/equity and not in the statement of profit and loss.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided, using the balance sheet method, on all deductible temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes and on carry forward of unused tax credits and unused tax loss. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Tax relating to items recognized outside profit or loss is recognised outside profit or loss (either in other comprehensive income or equity).
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred tax assets (including Minimum Alternate Tax credit available) is reviewed at each reporting date and accumulated MAT credit will be derecognised in the year in which the company exercises its option, if any, available under the provisions of the Income tax Act whereby it would be advantageous for the company to avail certain concessions foregoing the MAT credit adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Provisions
Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Significant accounting Judgements, Estimates and Assumptions
In the course of applying the policies outlined in all notes as above, the Group is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apholding from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future period.
Useful Lives of Property, Plant and Equipment
Management reviews the useful lives of property, plant and equipment at least once a year. Such lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs. Accordingly, depreciable lives are reviewed annually using the best information available to the Management.
Provisions and Contingencies
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Taxes
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Allowances for Uncollected accounts receivable and advances
Trade receivables do not carry interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectable. Impairment is made on the expected credit loss model, which is the present value of the cash shortfall over the expected life of the financial assets. The impairment provisions for financial assets are based on assumption about the risk of default and expected loss rates. Judgement in making these assumptions and selecting the inputs to the impairment calculation are based on past history, existing market condition as well as forward looking estimates at the end of each reporting period.
NON-GAAP MEASURES
Gross Profit, Gross Profit Margin (%), EBITDA, EBITDA Margin (%), PAT Margin (%), Return on Equity, Return on Capital employed (%) (together, "Non-GAAP Measures"), presented in this Draft Red Herring
Prospectus are a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS and should not be considered in isolation or construed as an alternative to cash flows, profit for the years/ period or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS. In addition, these Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance.
Reconciliation from Revenue from Operation to Gross Profit and Gross Profit Margin (%)
The table below reconciles revenue from operations to Gross Profit. Gross Profit is calculated by subtracting the aggregate of cost of materials consumed, purchase of stock-in-trade and changes in inventories of finished goods, stock-in-trade and work-in-progress from revenue from operations for the relevant fiscal while Gross Profit Margin is calculated as Gross Profit as a percentage of revenue from operations for the relevant fiscal.
Fiscal 2025 |
Fiscal 2024 |
Fiscal 2023 | ||||||||
| Particulars | ||||||||||
( million, unless otherwise stated) |
||||||||||
| Revenue from operations (A) | 23,495.03 |
18,216.09 |
13,941.75 | |||||||
| Cost of materials consumed (B) | 15,444.57 |
12,802.43 |
9,163.21 | |||||||
| Purchase of stock-in-trade (C) | 510.19 |
490.33 |
497.34 | |||||||
| Fiscal 2025 | Fiscal 2024 |
Fiscal 2023 |
||||||||
| Particulars | ||||||||||
( million, unless otherwise stated) |
||||||||||
| Changes | in | inventories | of | finished |
(421.59) | (761.67) |
(241.58) |
|||
| goods/Work-in-progress/stock-in-trade | (D) |
|||||||||
| Gross Profit (E= A-B-C-D) | 7,961.86 | 5,685.00 |
4,522.78 |
|||||||
| Gross Profit Margin (F= E/A) | 33.89% | 31.21% |
32.44% |
|||||||
Reconciliation from Profit for the year to EBITDA and EBITDA Margin
EBITDA refers to earnings before interest, tax, depreciation and amortization and is calculated as the profit before tax for the fiscal plus depreciation and amortization expense and finance cost for the relevant fiscal while EBITDA Margin is calculated as EBITDA as a percentage of revenue from operations.
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |
| Particulars | |||
( million, unless otherwise stated) |
|||
| Profit for the year (A) | 460.74 | 194.44 | 272.30 |
| Tax expense (B) | 414.71 | 232.41 | 362.41 |
| Depreciation & amortisation expenses | 1,364.64 | 1,074.22 | 804.65 |
| (C) | |||
| Finance costs (D) | 863.37 | 722.23 | 574.58 |
| EBITDA (E = A+B+C+D) | 3,103.46 | 2,223.30 | 2,013.94 |
| Revenue from operations (F) | 23,495.03 | 18,216.09 | 13,941.75 |
| EBITDA Margin (%) (G = E / F) | 13.21% | 12.21% | 14.45% |
Reconciliation from Profit for the year to PAT Margin
The table below reconciles profit for the year to PAT Margin. PAT margin is calculated as profit for the fiscal as a percentage of revenue from operations for the relevant fiscal.
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |
| Particulars | |||
( million, unless otherwise stated) |
|||
| Profit for the year (A) | 460.74 | 194.44 | 272.30 |
| Revenue from operations (B) | 23,495.03 | 18,216.09 | 13,941.75 |
| PAT Margin (C=A/B) | 1.96% | 1.07% | 1.95% |
Reconciliation from Profit for the year to Return on Equity
The table below reconciles profit for the year to return on equity. Return on equity is calculated as profit for the year as a percentage of Average Equity. Average Equity is calculated as average of the total equity at the beginning and at the end of the relevant fiscal. Total Equity is computed as the sum of Equity Share Capital, Instruments entirely equity in nature, and other equity.
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |
| Particulars | |||
( million, unless otherwise stated) |
|||
| Profit for the year (A) | 460.74 | 194.44 | 272.30 |
| Equity share capital (B) | 1,260.00 | 35.00 | 35.00 |
| Instruments entirely equity in nature (C) | 24.57 | 0.68 | 0.68 |
| Other equity (D) | 1,993.36 | 2,784.97 | 2,588.23 |
| Closing Equity (E=B+C+D) | 3,277.93 | 2,820.65 | 2,623.91 |
| Opening Equity (F) | 2,820.65 | 2,623.91 | 2351.63 |
| Average Equity (G=(E+F)/2) | 3,049.29 | 2,722.28 | 2,487.77 |
| Return on Equity (H= A/G) | 15.11% | 7.14% | 10.95% |
Reconciliation from Profit before tax to Return on Capital Employed
The table below reconciles profit before tax to return on capital employed. RoCE is calculated as earnings before interest and taxes ("EBIT") as a percentage of Capital Employed as at the end of the fiscal. EBIT is computed as profit before tax for the fiscal plus finance costs for the relevant fiscal. Capital Employed is computed as the sum of total equity, total borrowings and deferred tax liabilities (net), as at the end of the fiscal.
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||
| Particulars | ||||
( million, unless otherwise stated) |
||||
| Profit before tax (A) | 875.45 | 426.85 | 634.71 | |
| Finance costs (B) | 863.37 | 722.23 | 574.58 | |
| EBIT (C=A+B) | 1,738.82 | 1,149.07 | 1,209.29 | |
| Deferred Tax Liability (D) | 1,180.75 | 929.91 | 785.00 | |
| Short Term Borrowings (E) | 3,443.19 | 3,169.02 | 1,798.31 | |
| Long Term Borrowings (F) | 10,320.57 | 7,198.21 | 6,182.33 | |
| Total Equity (G) | 3,277.93 | 2,820.65 | 2,623.91 | |
| Capital Employed | (H=D+E+F+G) | 18,222.44 | 14,117.80 | 11,389.54 |
| Return on Capital Employed (I= C/H) | 9.54% | 8.14% | 10.62% | |
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
The principal components of our income and expenditure are as follows:
Income
Our income comprise revenue from operations and other income.
Revenue from operations
Revenue from operations comprise: (i) revenue from sale of products, which includes (i) sale of manufactured goods; and (ii) sale of traded goods; and (ii) other operating revenue, which includes (i) freight recovery; and (ii) export incentive.
Other Income
Other income comprise: (i) interest income; (ii) interest on income tax refund; (iii) net gain on foreign currency transactions; (iv) profit on sale of assets (net); (v) rental income from investment properties; (vi) liability written back; (vii) excess provision reversed; (viii) interest income on financial instruments; and (ix) miscellaneous income.
Expenses
Total expenses comprise: (i) cost of materials consumed; (ii) purchases of stock-in-trade; (iii) changes in inventories of finished goods/work in progress/stock-in-trade; (iv) employee benefits expense; (v) finance costs; (vi) depreciation and amortisation expenses; and (vii) other expenses.
Cost of materials consumed
Cost of materials consumed includes materials consumed i.e., raw milk, additives and other consumables and packing material.
Purchases of stock-in-trade
Purchases of stock-in-trade includes cattle feed, milk products and non-milk products such as tofu soy paneer, ready to cook chapathi an parotta.
Employee benefits expense
Employee benefits expense comprises (i) salaries, wages and bonus; (ii) contribution to provident fund and other funds; (iii) gratuity; (iv) leave encashment; and (v) staff welfare expenses.
Finance cost
Finance cost comprises: (i) interest expense; (ii) interest on lease liability; and (iii) other borrowing cost.
Depreciation and amortization expense
Depreciation and amortization expense comprises: (i) depreciation on property, plant and equipment; (ii) depreciation on right of use assets; and (iii) amortisation of intangible assets; and (iv) depreciation on investment properties.
Other expenses
Other expenses primarily include: (i) consumption of stores and spares; (ii) power and fuel (net off self-generation); (iii) water charges; (iv) rent; (v) rates and taxes; (vi) insurance expenses; (vii) logistics expenses; (viii) repairs and maintenance for (a) building; (b) machinery; (c) vehicle; and (d) others; (ix) milk chilling and processing charges; (x) selling and distribution expenses; (xi) security charges; (xii) travelling and conveyance; (xiii) professional and consultancy charges; (xiv) auditors remuneration; (xv) provision for expected credit loss; (xvi) bad debts; (xvii) exchange fluctuation (net); (xviii) CSR expenses; and (xix) miscellaneous expenses including telephone and printing expenses and postal and courier changes.
RESULTS OF OPERATIONS
The following table sets forth certain information with respect to our results of operations on a consolidated basis for the Fiscals 2025, 2024, 2023:
Fiscal 2025 |
Fiscal 2024 |
Fiscal 2023 |
||||
| Percentage | Percentage | |||||
| Percentage of | ||||||
| Particulars | of Revenue | of Revenue | ||||
| ( millions) | ( millions) | Revenue from | ( millions) | |||
| from | from | |||||
| Operations | ||||||
| Operations | Operations | |||||
| Revenue from | 23,495.03 | 100.00 | 18,216.09 | 100.00% | 13,941.75 | 100.00% |
| operations | ||||||
| Other income | 52.90 | 0.23% | 52.46 | 0.29% | 47.79 | 0.34% |
| Total Income | 23,547.93 | 100.23% | 18,268.55 | 100.29% | 13,989.54 | 100.34% |
| Expenses | ||||||
| Cost of materials | 15,444.57 | 65.74% | 12,802.43 | 70.28% | 9,163.21 | 65.72% |
| consumed | ||||||
| Purchases of stock- | 510.19 | 2.17% | 490.33 | 2.69% | 497.34 | 3.57% |
| in-trade | ||||||
| Changes in | (421.59) | (1.79)% | (761.67) | (4.18)% | (241.58) | (1.73)% |
| inventories of | ||||||
| finished goods, | ||||||
| work-in-progress | ||||||
| and stock in trade | ||||||
| Employee benefits | 1,447.88 | 6.16% | 1,157.71 | 6.36% | 824.76 | 5.92% |
| expense | ||||||
| Finance cost | 863.37 | 3.67% | 722.23 | 3.96% | 574.58 | 4.12% |
| Depreciation and | 1,364.64 | 5.81% | 1,074.22 | 5.90% | 804.65 | 5.77% |
| amortization | ||||||
| expense | ||||||
| Other expenses | 3,463.42 | 14.74% | 2,356.45 | 12.94% | 1,731.87 | 12.42% |
| Total Expenses | 22,672.48 | 96.50% | 17,841.70 | 97.94% | 13,354.83 | 95.79% |
| Profit before tax | 875.45 | 3.73% | 426.85 | 2.34% | 634.71 | 4.55% |
| Tax expense | ||||||
| Current tax | 162.11 | 0.69% | 88.15 | 0.48% | 120.88 | 0.87% |
| Deferred tax | 252.72 | 1.08% | 143.65 | 0.79% | 251.65 | 1.81% |
| Earlier years | (0.12) | 0.00% | 0.61 | 0.00% | (10.12) | (0.07)% |
| Total tax expense | 414.71 | 1.77% | 232.41 | 1.28% | 362.41 | 2.60% |
| Profit / (Loss) for | 460.74 | 1.96% | 194.44 | 1.07% | 272.30 | 1.95% |
| the year | ||||||
FISCAL 2025 COMPARED TO FISCAL 2024
Total Income
Total income has increased by 28.90% from 18,268.55 million in Fiscal 2024 to 23,547.93 million in Fiscal
2025 primarily on account of an increase in revenue from operations.
Revenue from Operations
Revenue from operations increased by 28.98% from 18,216.09 million in Fiscal 2024 to 23,495.03 million in Fiscal 2025 mainly on account of an increase in revenue from sale of products from 18,080.83 million in Fiscal 2024 to 23,328.50 million in Fiscal 2025 due to increase in prices and volume. This increase was primarily driven by increase in sale of manufactured goods from 17,554.16 million in Fiscal 2024 to 22,755.97 in Fiscal 2025 and a marginal increase in sale of traded goods from 526.67 million in Fiscal 2024 to 572.53 million in Fiscal 2025.
Our sale of manufactured goods increased primarily due to an increase in the sale of paneer, cheese, curd and ice-cream. The table below sets forth details of our revenues from the sale of such product categories in the years indicated:
Fiscal 2025 |
Fiscal 2024 |
||||
| Product Category | Amount | %of revenue | Amount | % of revenue | |
| ( million) | from operations | ( million) | from operations | ||
| Paneer | 6,936.08 | 29.52% | 5,588.91 | 30.68% | |
| Cheese | 4,078.33 | 17.36% | 3,472.57 | 19.06% | |
| Curd | 3,701.04 | 15.75% | 2,991.03 | 16.42% | |
| Revenue from sale of paneer, cheese | 14,715.45 | 62.63% | 12,052.51 | 66.16% | |
| and curd | |||||
| Ice-cream | 1,376.78 | 5.86% | 345.15 | 1.89% | |
| Others product categories* | 7,402.80 | 31.51% | 5,818.43 | 31.94% | |
| Revenue from operations | 23,495.03 | 100.00% | 18,216.09 | 100.00% | |
*Other product categories includes ghee, butter, chocolate, khova and UHT long-shelf life products.
Other operating revenue also contributed to the growth, increasing from 135.26 million in Fiscal 2024 to 166.53 million in Fiscal 2025, primarily on account of increase in freight recovery from 132.65 million in Fiscal 2024 to 162.53 million in Fiscal 2025 and an increase in export incentives from 2.61 million in Fiscal 2024 to 4.00 million in Fiscal 2025.
Other Income
Other income has increased marginally by 0.84% from 52.46 million in Fiscal 2024 to 52.90 million in Fiscal 2025, mainly on account of an increase in miscellaneous income, which increased from 10.35 million in Fiscal 2024 to 34.44 million in Fiscal 2025 primarily on account of receipt of insurance claims. Additionally, interest increased from 6.27 million in Fiscal 2024 to 9.00 million in Fiscal 2025, and excess provision reversed contributed 3.25 million in Fiscal 2025, compared to nil in Fiscal 2024. These increases were primarily offset by liability written back, which decreased from 25.41 million in Fiscal 2024 to 2.33 million in Fiscal 2025.
Expenses
Total expenses increased by 27.08% from 17,841.70 million in Fiscal 2024 to 22,672.48 in Fiscal 2025, primarily due to an increase to the cost of materials consumed from 12,802.43 million in Fiscal 2024 to 15,444.57 million in Fiscal 2025, increase in employee benefits expense from 1,157.71 million in Fiscal 2024 to 1,447.88 million in Fiscal 2025 and increase in other expenses from 2,356.45 million in Fiscal 2024 to
3,463.42 million in Fiscal 2025.
Cost of materials consumed
Cost of materials consumed increased by 20.64% from 12,802.43 million in Fiscal 2024 to 15,444.57 million in Fiscal 2025, mainly due to an increase in the quantum of materials consumed which includes raw milk, additives and other consumables and packing material.
Purchase of stock-in-trade
Purchase of stock-in-trade has increased by 4.05% from 490.33 million in Fiscal 2024 to 510.19 million in Fiscal 2025, mainly on account an increase in purchases of cattle feed from 334.23 million in Fiscal 2024 to
349.34 million in Fiscal 2025 and an increase in purchase of non-milk products from 131.87 million in Fiscal 2024 to 153.42 million in Fiscal 2025, which was partially offset by a decrease in purchase of milk products of 24.23 million in Fiscal 2024 to 7.43 million in Fiscal 2025.
404
Changes in inventories of finished goods, work-in-progress and stock in trade
Change in inventories of finished goods, work in progress, stock in trade reduced from (761.67) million in Fiscal 2024 to (421.59) million in Fiscal 2025.
Employee benefits expense
Employee benefits expenses increased by 25.06% from 1,157.71 million in Fiscal 2024 to 1,447.88 million in Fiscal 2025, primarily due to an increase in salaries, wages, and bonus from 1,104.20 million in Fiscal 2024 to 1,381.76 million in Fiscal 2025 due to increase in the number of employees and increment during the Fiscal.
Finance cost
Finance cost increased by 19.54% from 722.23 million in Fiscal 2024 to 863.37 million in Fiscal 2025, primarily due to an increase in interest expenses from 813.01 million in Fiscal 2024 (of which interest subvention of 129.34 million was received) to 1,014.65 million in Fiscal 2025 (of which 183.77 million after adjusting for interest subvention received) on account of increase in the borrowings during the year. This was partially offset by a decrease in other borrowing cost from 33.52 million in Fiscal 2024 to 27.63 million in Fiscal 2025.
Depreciation and amortization expense
Depreciation and amortization expense increased by 27.04% from 1,074.22 million in Fiscal 2024 to 1,364.64 million in Fiscal 2025, primarily due to an increase in depreciation on property, plant and equipment from
1,054.18 million in Fiscal 2024 to 1,342.64 million in Fiscal 2025 on account of increase in property, plant and equipment and an increase in depreciation on right of use assets from 17.97 million in Fiscal 2024 to 19.81 million in Fiscal 2025 on account of increase in number of properties taken on lease.
Other expenses
Other expenses increased by 46.98% from 2,356.45 million in Fiscal 2024 to 3,463.42 million in Fiscal 2025, primarily on account of an increase in:
selling and distribution expenses from 520.28 million in Fiscal 2024 to 1,219.63 million in Fiscal 2025 due to increase in business promotion to boost sales.
logistics expenses from 654.88 million in Fiscal 2024 to 814.97 million in Fiscal 2025 due to increase in quantum of procurement and distribution; and
power and fuel expenses (net off self generation) from 402.26 million in Fiscal 2024 to 501.23 million in Fiscal 2025 due to increase in production.
Profit before tax
For the reasons discussed above, our profit before tax was 426.85 million in Fiscal 2024 compared to 875.45 million in Fiscal 2025.
Tax expense
Our total tax expense increased by 78.44% from 232.41 million in Fiscal 2024 to 414.71 million in Fiscal
2025 primarily due to:
an increase in current tax from 88.15 million in Fiscal 2024 to 162.11 million in Fiscal 2025; and
an increase in deferred tax from 143.65 million in Fiscal 2024 to 252.72 million in Fiscal 2025.
This was partially offset by a decrease in earlier years tax expense from 0.61 million in Fiscal 2024 to (0.12) million in Fiscal 2025.
Profit for the year
For the reasons discussed above, our profit for the year was 460.74 million in Fiscal 2025 as compared to profit for the year of 194.44 million in Fiscal 2024.
FISCAL 2024 COMPARED TO FISCAL 2023
Total Income
Total income increased by 30.59% from 13,989.54 million in Fiscal 2023 to 18,268.55 million in Fiscal 2024 primarily on account of increase in revenue from operations.
Revenue from Operations
Revenue from operations increased by 30.66% from 13,941.75 million in Fiscal 2023 to 18,216.09 million in Fiscal 2024 mainly on account of an increase in revenue from sale of products from 13,873.43 million in Fiscal 2023 to 18,080.83 million in Fiscal 2024. This increase was primarily driven by increase in sale of manufactured goods from 13,298.45 million in Fiscal 2023 to 17,554.16 million in Fiscal 2024. This was slightly offset by a decrease in sale of traded goods from 574.98 million in Fiscal 2023 to 526.67 million in Fiscal 2024.
Our sale of manufactured goods increased primarily due to an increase in the sale of paneer, cheese and curd. The table below sets forth details of our revenues from the sale of such product categories in the years indicated:
Fiscal 2024 |
Fiscal 2023 |
||||||
| Percentage of | Percentage of | ||||||
Product Category |
Amount | Amount | |||||
| revenue from | revenue from | ||||||
| ( million) | ( million) | ||||||
| operations | operations | ||||||
| Paneer | 5,588.91 | 30.68% | 4,379.64 | 31.41% | |||
| Cheese | 3,472.57 | 19.06% | 2,689.96 | 19.29% | |||
| Curd | 2,991.03 | 16.42% | 2,322.19 | 16.66% | |||
| Revenue | from | sale | of paneer, | 12,052.51 | 66.16% | 9,391.79 | 67.36% |
| cheese and curd | |||||||
| Ice-cream | 345.15 | 1.89% | Nil** | Nil** | |||
| Other product categories* | 5,818.43 | 31.95% | 4,549.96 | 32.64% | |||
| Revenue from the sale of products | 18,216.09 | 100.00% | 13,941.75 | 100.00% | |||
** We started selling ice-cream in Fiscal 2024.
Other operating revenue also contributed to the growth, increasing from 68.32 million in Fiscal 2023 to 135.26 million in Fiscal 2024, primarily on account of increase in freight recovery from 65.59 million in Fiscal 2023 to 132.65 million in Fiscal 2024.
Other Income
Other income increased by 9.77% from 47.79 million in Fiscal 2023 to 52.46 million in Fiscal 2024, mainly on account of increase in liability written back from 15.89 million in Fiscal 2023 to 25.41 million in Fiscal
2024 and increase in net gain on foreign currency transactions from nil in Fiscal 2023 to 7.14 million in Fiscal
2024. This was slightly offset by decrease in miscellaneous income from 24.27 million to 10.35 million.
Expenses
Total expenses increased by 33.60% from 13,354.83 million in Fiscal 2023 to 17,841.70 million in Fiscal 2024, primarily due to increase in cost of materials consumed from 9,163.21 million in Fiscal 2023 to 12,802.43 million in Fiscal 2024, increase in employee benefits expense from 824.76 million in Fiscal 2023 to 1,157.71 million in Fiscal 2024 and increase in other expenses from 1,731.87 million in Fiscal 2023 to 2,356.45 million in Fiscal 2024.
Cost of materials consumed
Cost of materials consumed increased by 39.72% from 9,163.21 million in Fiscal 2023 to 12,802.43 million in Fiscal 2024 mainly due to an increase in the quantum of materials consumed which includes raw milk, additives and other consumables and packing material.
Purchase of stock-in-trade
Purchase of stock-in-trade decreased marginally by 1.41% from 497.34 million in Fiscal 2023 to 490.33 million in Fiscal 2024, primarily due to decrease in purchase of milk products from 133.59 million in Fiscal
2023 to 24.23 million in Fiscal 2024. This was offset by an increase purchases of cattle feed from 248.03 million in Fiscal 2023 to 334.23 million in Fiscal 2024 and an increase in purchase of non-milk products from 115.72 million in Fiscal 2023 to 131.87 million in Fiscal 2024.
Changes in inventories of finished goods, work-in-progress and stock in trade
Change in inventories of finished goods, work in progress, stock in trade was (241.58) million in Fiscal 2023 compared to (761.67) million in Fiscal 2024.
Employee benefits expense
Employee benefit expenses increased by 40.37% from 824.76 million in Fiscal 2023 to 1,157.71 million in Fiscal 2024, primarily due to an increase in salaries, wages and bonus from 783.37 million in Fiscal 2023 to 1,104.20 million in Fiscal 2024 on account of increase in the number of employees and increment for the year.
Finance cost
Finance costs increased by 25.70% from 574.58 million in Fiscal 2023 to 722.23 million in Fiscal 2024, primarily due to due to an increase in interest expenses from 551.77 million in Fiscal 2023 to 813.01 million in Fiscal 2024 (of which interest subvention of 129.34 million was received) on account of increase in the outstanding borrowings and an increase in other borrowing cost from 17.92 million in Fiscal 2023 to 33.52 million in Fiscal 2024.
Depreciation and Amortization Expense
Depreciation and amortisation expenses increased by 33.50% from 804.65 million in Fiscal 2023 to 1,074.22 million in Fiscal 2024. This increase is primarily on account to the depreciation on property, plant and equipment from 788.18 million in Fiscal 2023 to 1,054.18 million in Fiscal 2024 on account of increase in property, plant and equipment.
Other Expenses
Other expenses increased by 36.06% from 1,731.87 million in Fiscal 2023 to 2,356.45 million in Fiscal 2024, primarily on account of an increase in:
selling and distribution expenses from 332.08million in Fiscal 2023 to 520.28 million in Fiscal 2024 due to increase in business promotion expenses to boost sales.
power and fuel expenses (net off self generation) from 245.84 million in Fiscal 2023 to 402.26 million in Fiscal 2024 due to increase in production.
logistics expenses from 502.62 million in Fiscal 2023 to 654.88 million in Fiscal 2024 due to increase in procurement and distribution.
Profit before tax
For the reasons discussed above, our profit before tax was 634.71 million in Fiscal 2023 compared to 426.85 million in Fiscal 2024.
Tax expense
Our total tax expense decreased by 35.87% from 362.41 million in Fiscal 2023 to 232.41 million in Fiscal
2024 primarily due to:
decrease in current tax from 120.88 million in Fiscal 2023 to 88.15 million in Fiscal 2024; and
decrease in deferred tax from 251.65 million in Fiscal 2023 to 143.65 million in Fiscal 2024.
This was partially offset by an increase in earlier years tax expense from (10.12) million in Fiscal 2023 to 0.61 million in Fiscal 2024.
Profit for the year
For the reasons discussed above, our profit for the year decreased from 272.30 million in Fiscal 2023 as compared to 194.44 million in Fiscal 2024.
LIQUIDITY AND CAPITAL RESOURCES
We have historically financed the expansion of our business and operations through internal accruals and loans availed from banks.
CASH FLOWS
The following table sets forth certain information relating to our cash flows in the years/ per indicated:
The following table sets forth our cash flows and cash and cash equivalents for the years indicated:
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |
| Particulars | |||
| ( millions) | |||
| Net cash flow generated from operating activities | 3,148.57 | 1,402.85 | 1,750.43 |
| (A) | |||
| Net cash used in investing activities (B) | (5,453.34) | (2,899.71) | (3,678.97) |
| Net cash flows from financing activities (C) | 2,331.34 | 1,519.77 | 1,980.07 |
| Net increase in cash and cash equivalents (A+B+C) | 26.57 | 22.91 | 51.53 |
| Cash and cash equivalents at the beginning of the | 113.08 | 90.17 | 38.64 |
| year | |||
| Cash and cash equivalents at the end of the year | 139.65 | 113.08 | 90.17 |
Operating Activities
Fiscal 2025
Net cash from operating activities was 3,148.57 million in Fiscal 2025. In Fiscal 2025, our profit before tax was
875.45 million which was adjusted primarily for depreciation on assets other than right of use assets of
1,344.83 million, finance cost of 1,047.14 million and provision of expected credit loss of 34.56 million, resulting in an operating profit before working capital changes of 3,310.82 million in Fiscal 2025. The difference between the net cash from operating activities and operating profit before working capital changes was primarily attributable to an increase in inventories of 534.31 million, increase in trade receivables of 238.51 million and increase in other assets of 107.12 million which was partially offset by an increase in trade payables of 491.55 million and increase in other liabilities of 386.91 million.
Fiscal 2024
Net cash from operating activities was 1,402.85 million in Fiscal 2024. In Fiscal 2024, our profit before tax was
426.85 million which was adjusted primarily for depreciation on assets other than right of use assets of
1,056.25 million, finance cost of 851.57 million and provision of expected credit loss of 38.28 million, resulting in an operating profit before working capital changes of 2,349.74 million in Fiscal 2024. The difference between the net cash from operating activities and operating profit before working capital changes was primarily attributable to an increase in inventories of 1,028.87 million, increase in trade receivables of 146.73 million and increase in other assets of 169.82 million, which was partially offset by an increase in trade payables of
190.05 million and increase in other liabilities of 282.51 million.
Fiscal 2023
Net cash from operating activities was 1,750.43 million in Fiscal 2023. In Fiscal 2023, our profit before tax was
634.71 million which was primarily adjusted for depreciation on assets other than right of use assets of 790.23 million, finance cost of 574.58 million and provision of expected credit loss of 22.57 million, resulting in an operating profit before working capital changes of 2,013.00 million in Fiscal 2023. The difference between the net cash from operating activities and operating profit before working capital changes was primarily attributable to an increase in inventories of 356.21 million, increase in trade receivables of 92.24 million and increase in other assets of 51.67 million which was primarily offset by an increase in trade payables of 75.95 million and increase in other liabilities of 306.58 million.
Investing Activities
Fiscal 2025
Net cash used in investing activities was 5,453.34 million in Fiscal 2025 primarily due to purchase of property, plant and equipment, including capital work in progress, intangibles under development and capital advance of 5,951.10 million and adjustment for capital creditors and proceeds from sale of assets of 486.64 million.
Fiscal 2024
Net cash used in investing activities was 2,899.71 million in Fiscal 2024 primarily due to purchase of property, plant and equipment, including capital work in progress, intangibles under development and capital advance of 2,919.22 million and adjustment for capital creditors and proceeds from sale of assets of 11.78 million
Fiscal 2023
Net cash used in investing activities was 3,678.97 million in Fiscal 2023 primarily due to purchase of property, plant and equipment, including capital work in progress, intangibles under development and capital advance of 3,915.55 million and adjustment for capital creditors and proceeds from sale of assets of 229.55 million
Financing Activities
Fiscal 2025
Net cash from financing activities was 2,331.34 million in Fiscal 2025 primarily due to proceeds from long term borrowings of 3,024.58 million and interest paid of 1041.14 million.
Fiscal 2024
Net cash used in financing activities was 1,519.77 million in Fiscal 2024 primarily due to proceeds from long term borrowings of 1,521.25 million, proceeds from current borrowings (net) of 864.32 million and interest paid of 845.49 million
Fiscal 2023
Net cash generated from financing activities was 1,980.07 million in Fiscal 2023 primarily due to proceeds from long term borrowings of 2,440.73 million, proceeds from current borrowings (net) of 124.23 million and interest paid of 568.73 million
INDEBTEDNESS
As of March 31, 2025, our total outstanding borrowings amounted to 13,763.76 million on a consolidated basis. For further information on our outstanding indebtedness, see "Financial Indebtedness" on page 375.
MATURITY PROFILE OF FINANCIAL LIABILITIES
The table below summarises the maturity profile of our financial liabilities as at March 31, 2025:
Payment due by period |
||||||
| Particulars | Carrying | Less than 1 | More than 5 | |||
| On Demand | 1-5 years | Total | ||||
| Value | year | years | ||||
| Lease Liabilities | 56.18 | - | 16.87 | 17.69 | 21.62 | 56.18 |
| Borrowings | 13,763.76 | 2,184.08 | 1,259.12 | 6,626.05 | 3,694.51 | 13,763.76 |
| Trade Payables | 944.07 | - | 944.07 | - | 0.00 | 944.07 |
| Other Financial Liabilities | 2,091.91 | - | 1,967.77 | 124.14 | 0.00 | 2,091.91 |
| Total | 16,855.92 | 2,184.08 | 4,187.83 | 6,767.88 | 3,716.13 | 16,855.92 |
WORKING CAPITAL
We require significant amount of our working capital for our business and operations. We have funded our working capital requirements in the past through a combination of internal accruals and external borrowings. The table below sets forth details regarding our working capital and working capital days for the years indicated:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Net Working capital ( million)(1) | 2,699.39 | 2,454.59 | 1,474,77 |
| Working capital days(2) | 42 | 49 | 39 |
(1) Net working capital is computed as aggregate of inventories and trade receivables minus trade payables as at the end of the respective fiscal. (2) Working capital days is calculated as Net working capital for the relevant fiscal divided by revenue from operations for the relevant fiscal multiplied by 365
Also, see "Risk Factors - Our business requires working capital. Any failure in arranging adequate working capital for our operations may adversely affect our business, results of operations, cash flows and financial condition." on page 50.
CONTINGENT LIABILITIES AND COMMITMENTS
The following table below sets forth our contingent liabilities as of March 31, 2025:
| As of March 31, 2025 | |
| Particulars | |
| ( million) | |
| Guarantees given by banks on behalf of our Company | 87.75 |
| Obligation with respect to Export Promotion Capital Goods (EPCG) licenses: | 1,806.00 |
| quantum of duty saved | |
| Disputed statutory liabilities not provided for | 256.24 |
| Disputed other liabilities not provided for | 20.20 |
Notes:
1. During Fiscal 2024, the Company has received a consolidated GST demand for an amount of 161.79 million (excluding penalty and interest) for the period July 2017 to March 2021. The demand includes an amount of 99.31 million for which the company has claimed input credit on capital goods forming part of Property, Plant & Equipments. The Company has disputed these demand and had filed a writ petition before the Madras High Court. A interim stay has been obtained on all further proceedings until the matter is heard. In the opinion of the management, no provision is considered necessary for the above demand. Necessary provisions/ adjustments to the Property, Plant and Equipment would be made, if necessary and differential depreciation would be charged as and when the matter is finally settled.
2. During Fiscal 2025, the Company has received a GST demand for an amount of 44.04 million (excluding penalty and interest) for excess claim of Input tax credit for the period April 2019 to March 2020. The company has disputed these demand and had filed an appeal before the Appellate authority, Hyderabad, Telangana.
3. During Fiscal 2025, the company has received a GST demand for an amount of 50.41million (excluding penalty and interest). The demand related to short payment of GST due to wrong classification of goods, short payment of GST under RCM, irregular availment of input tax credit & non-reversal of ITC on exempted supplies for the period April 2021 to March 2022.
For further information relating to our contingent liabilities, see "Restated Consolidated Financial Information
Note 44 Contingent liabilities and capital commitments" on page 338.
The following table below sets forth our commitments as of March 31, 2025:
| As of March 31, 2025 | |
| Particulars | |
| ( million) | |
| Estimated amount of contracts remaining to be executed on capital account | 2,960.54 |
For further information relating to our contingent liabilities, see "Restated Consolidated Financial Information
Note 44 Contingent liabilities and capital commitments" on page 338.
CAPITAL EXPENDITURES
Below are the additions to the property, plant and equipment during the Fiscals 2025, 2024 and 2023:
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| Particulars | |||||
| ( million) | |||||
| Freehold Land | 48.12 | 14.05 | 11.28 | ||
| Leasehold improvements | 13.14 | 0.00 | 6.22 | ||
| Buildings | 340.69 | 406.30 | 702.42 | ||
| Plant and Machinery | 2,512.16 |
2,663.70 | 2,318.68 |
||
| Office Equipment | 1.89 | 2.27 | 5.67 | ||
| Furniture and Fittings | 6.13 | 1.77 | 6.28 | ||
| Vehicles | 288.44 | 260.86 | 129.26 | ||
| Computers | 7.13 | 4.94 | 10.23 | ||
| Electricals Installations and Fittings | 48.65 | 50.73 | 14.87 | ||
| Total | 3,266.35 |
3,404.62 | 3,204.91 |
||
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
We do not have any off-balance sheet arrangements, derivative instruments or other relationships with other entities that would have been established for the purpose of facilitating off-balance sheet arrangements.
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. These transactions principally include remuneration paid to related parties, consideration paid to related parties for purchase of Equity Shares in relation to acquisition of our Subsidiary and amount paid in relation to professional services provided by the related parties, such as payments made to our Group Company for providing IT services to our Company. For further information on our related party transactions, see "Summary of the Offer Document Summary of Related Party Transactions" and "Restated Consolidated Financial Information- Note- 46 - Related parties disclosures" on pages 30 and 339, respectively.
AUDITORS OBSERVATIONS
While there are no qualifications in auditors report for Fiscals 2025, 2024 and 2023, our statutory auditors have included certain emphasis of matters in their examination reports for Fiscal 2025, 2024 and 2023. See "Risk Factors - Our statutory auditors have included certain emphasis of matters in their examination report on Restated Consolidated Financial Information for Fiscals 2025, 2024 and 2023, and we cannot assure that our financial information for future periods will not contain emphasis of matters." on page 55.
Further, the statutory auditors of our Company and our Subsidiary, Asal Foods Products Private Limited have certain observations in their audit reports for Fiscal 2025, 2024 and 2023 under their reporting requirements under the Companies (Auditors Report) Order, 2020 and Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014
(as amended). See "Risk Factors - There have been certain qualifications and adverse remarks by our Companys and our Subsidiarys statutory auditors in their audit reports for Fiscal 2025, 2024 and 2023 under their reporting requirements under the Companies (Auditors Report) Order, 2020 and Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014 (as amended). We cannot assure you that our auditors reports for any future fiscal periods will not contain such qualifications and adverse remarks." on page 57.
CHANGES IN ACCOUNTING POLICIES IN THE LAST THREE FINANCIAL YEARS
There have been no changes in our accounting policies in the last three Fiscals.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our activities expose us to credit risk, liquidity risk and market risk. Our Board of Directors has overall responsibility for the establishment and oversight of our risk management framework.
Credit Risk
Credit risk is the risk of financial loss to us if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from our receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. We assess the credit quality of the counterparties, taking into account our financial position, past experience and other factors.
Liquidity Risk
Liquidity risk is the risk that the we will not be able to meet our financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirement. The processes and policies related to such risks are overseen by our Board of Directors and Audit Committee.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect our income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency Risk
Our functional currency is Indian Rupees (INR). We undertake transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects our revenue from export markets and the costs of imports. Adverse movements in the exchange rate between the Rupee and any relevant foreign currency results in increase in our overall payables in Rupee terms without us having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in our receivables in foreign currency. In order to hedge exchange rate risk, we have a policy to hedge cash flows (either using natural hedge or an artificial hedge) up to a specific tenure using forward exchange contracts and hedges based on our Internal Foreign Currency Exposure and risk management policy as approved by the management and in accordance with the applicable regulations where we operate.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relates primarily to our debt obligations with floating interest rates and investments.
For further information, see "Restated Consolidated Financial Information Note 48 - Financial instruments - Risk management" on page 345.
SIGNIFICANT ECONOMIC CHANGES
To the knowledge of our management, other than as described in "Risk Factors" and "- Significant Factors Affecting our Results of Operations and Financial Condition" on pages 37 and 387, respectively, there are no other significant economic changes that materially affect or are likely to affect income from continuing operations.
UNUSUAL OR INFREQUENT EVENTS OF TRANSACTIONS
Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no "unusual" or "infrequent" events or transactions that have in the past or may in the future affect our business operations or future financial performance.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been affected and we expect will continue to be affected by the trends identified above in "
Significant Factors Affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors" on pages 387 and 37. To our knowledge, except as described or anticipated in this Draft Red Herring Prospectus, there are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis of
Financial Position and Results of Operations" on pages 37, 202 and 386, respectively, there are no known factors that might affect the future relationship between costs and revenues.
NEW PRODUCTS OR BUSINESS SEGMENTS
Except as set out in this Draft Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new business segments other than in the normal course of business.
COMPETITIVE CONDITIONS
We operate in a competitive environment. See "Our Business", "Industry Overview" and "Risk Factors" on pages
202, 160 and 37, respectively, for further information on competitive conditions that we face.
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
Changes in revenue in the last three Fiscals are as described in " Fiscal 2025 compared to Fiscal 2024" and " Fiscal 2024 compared to Fiscal 2023" above on pages 403 and 406, respectively.
SEGMENT REPORTING
Our business activities are mainly related to processing of milk and manufacturing of milk related products, which are primarily assessed as a single reportable operating segment in accordance with Ind AS 108 "Segment Reporting" by the management. Therefore, there is no reportable segment for our Company as per the requirement of Ind AS 108 "Operating Segments".
SEASONALITY/ CYCLICALITY OF BUSINESS
Our Company business is not seasonable or cyclical in nature. However, our business is dependent on the supply of large amounts of raw milk, and the availability of raw milk is subject to seasonal factors, such as variations in climate, forage availability, and the physiological cycles of dairy animals. These factors can lead to fluctuations in milk production throughout the year. For more details, see "Risk Factors - Our manufacturing operations are dependent on the supply of large amounts of raw milk, with the majority of our raw milk procurement being from the state of Tamil Nadu (97.68%, 99.62% and 100.00% of the total raw milk procurement in Fiscals 2025, 2024 and 2023, respectively). Our inability to procure adequate amounts of good quality raw milk, at competitive prices, or any adverse development in the state of Tamil Nadu affecting the milk supply, may have an adverse effect on our business, results of operations, financial condition and cash flows." on page 37.
SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2025 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
To our knowledge no circumstances have arisen since March 31, 2025, that could materially and adversely affect or are likely to affect, our operations, trading or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.
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