Millworks Technologies Limited Management Discussions

OPERATIONS

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be Forward looking statement within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factor.

BUSINESS OVERVIEW

We are a precision engineering company engaged in the manufacture of machined components, sheet metal parts, and integrated assemblies used in mission-critical applications across the railways, aerospace, defence, and semiconductor sectors. Our operations are undertaken under Build-to-Print (BTP) and Build-to-Spec (BTS) engagement models and include both full-scope manufacturing as well as job-work arrangements. Under the BTP (Build-to-Print) model, manufacturing is carried out in accordance with customer-provided drawings and technical specifications, while under the BTS (Build-to-Spec) model, customers specify functional and performance requirements and our Company undertakes manufacturing to meet such specifications. This dual model enables us to support a diverse array of customer needs from strict adherence to design intent to more collaborative, performance-driven development. Incorporated in 2021, our Company has developed into a multi-sector engineering enterprise with manufacturing capabilities spanning precision machining, sheet metal fabrication, sub-assembly, and related processes. We primarily supply to Original Equipment Manufacturers (OEMs) Our quality systems and process controls are designed to meet rigorous industry standards, ensuring that every component and assembly we supply performs reliably in the most demanding environments.

As of March 31, 2026, we operate four manufacturing facilities located in Bengaluru, Karnataka. Our facilities are equipped with CNC machining centres, including 3-axis, 4-axis, and 5-axis machines, CNC turning and turn-mill centres, wire EDM machines, fibre laser cutting systems, CNC press brakes, welding equipment, and designated areas for assembly and inspection.

Our revenues from operations for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024 were 14876.7 lakhs, 2,210.01 lakhs and 938.60 lakhs, respectively. The corresponding EBITDA and profit after tax for these periods are set out in the section titled Financial Information beginning on page 184 of this Red Herring Prospectus.

FINANCIAL KPIs of the Company:	For the year ended March 31,
Particulars
	2026	2025	2024
Revenue from Operations ( in Lakhs) (1)	14,876	2,210	938
Growth in Revenue from Operations (%)	573.	135.	429.
Total income (2)	15,339	2,241	939
EBITDA ( in Lakhs) (3)	5,630	788	277
EBITDA Margin (%) (4)	36.	35.	29.
	3,706
Profit After Tax ( in Lakhs) (5)		524	195
PAT Margin (%) (6)	24.	23.	20.
Net worth (7)	8,266	2,331	232
Return on Equity (RoE \u201d ) (%) (8)	69.	40.	144.
Return on Capital Employed (RoCE \u201d ) (%) (9)	56.	23.	38.
Net Asset Value Per Share (Post bonus) ( ) (10)	64	19	2
Debt- Equity Ratio (11)	0	0	1

Notes:

(1) Revenue from operations represents the revenue from sale of service & product & other operating revenue of our Company as recognized in the Restated financial information.

2) Total income includes revenue from operations and other income.

(3) EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived at by obtaining the profit before tax/ (loss) for the year / period and adding back interest cost, depreciation, and amortization expense. (4) EBITDA margin is calculated as EBITDA as a percentage of total income. (5) Restated profit for the period / year. (6) PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations. (7) Restated Net-worth of the company is calculated as share capital plus total reserves & surplus. (8) Return on Equity is calculated as Profit after tax, as restated, attributable to the owners of the Company for the year/ period divided by average equity. Average equity is calculated as average of opening and closing balance of total equity (Shareholders funds) for the year. (9) Return on capital employed calculated as Earnings before interest and taxes divided by capital employed as at the end of respective period/year. (Capital employed calculated as the aggregate value of Tangible net-worth, total debt and deferred tax liabilities) (10) Net asset value per share calculated as Total net-worth divide by total no of outstanding shares.

(11) Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long-term and short-term borrowings. Total equity is the sum of share capital and reserves & surplus.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Except as otherwise stated in this Red Herring Prospectus and the Risk Factors given in the Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

1. Our revenues have exhibited significant fluctuations in the past and may continue to vary in the future, which may adversely affect our business, financial condition and results of operations.

2. Our high level of trade receivables relative to our revenue from operations indicates elongated working capital cycles and exposes us to collection risks, which may adversely affect our liquidity and financial condition.

3. A substantial portion of the Company s revenue for the period March 31, 2026 was derived from its first/top customer.

Accordingly, any reduction, delay, or termination of business from such customer, or the loss of such customer for any reason, could materially and adversely affect the Company s revenues, profitability, financial condition.

4. Dependency on Certain Business Partners for Defense Sector Project Execution.

5. Our Company has some instances of non-compliances and delayed in compliances with some statutory provisions of the Companies Act 2013 and delayed compliance may attract penalties against our company which could impact the financial position of us to that extent.

6. We are dependent on a few customers for a significant portion of our revenues. Further we generally do not enter into long-term arrangements with our customers and any failure to continue our existing arrangements could adversely affect our business and results of operations.

7. The markets in which our customers compete are characterized by sectors specific to the industries which we cater to, and their rapidly changing preferences and other related factors including lower manufacturing costs. Accordingly, we may be affected by any disruptions in the industry which can adversely impact our business, financial condition, results of operations, cash flows and prospects.

8. Any failure to compete effectively in the highly competitive global industry of high precision and critical components manufacturing could have a material adverse effect on our business, results of operations, financial condition, cash flows and future prospects.

9. Our Company had negative cash flows during certain fiscal years in relation to our operating, investing and financing activities. Sustained negative cash flows in the future would adversely affect our results of operations and financial condition.

10. Our business is working capital intensive. Any insufficient cash flows from our operations or inability to borrow to meet our working capital requirements, it may materially and adversely affect our business and results of operations.

SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2026 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS

The Directors confirm that there have been no other events or circumstances since the date of the last financial statements as disclosed in the Red Herring Prospectus which materially or adversely affect or is likely to affect the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next twelve months.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a) BASIS OF ACCOUNTING AND PREPARATION OF STANDALONE RESTATED FINANCIAL STATEMENTS

The restated summary statement of standalone assets and liabilities of the Company as at March 31, 2026, March 31, 2025, and March 31, 2024 and the related restated summary statement of standalone profits and loss and cash flows for the year ended March 31, 2026, March 31, 2025, and March 31, 2024 (herein collectively referred to as ( Restated Summary Statements ) have been compiled by the management from the standalone audited Financial Statements of the Company for the year ended on March 31, 2026, March 31, 2025 and March 31, 2024 approved by the Board of Directors of the Company. Restated Summary Statements have been prepared to comply in all material respects with the provisions of Part

I of Chapter III of the Companies Act, 2013 (the Act ) read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018

( ICDR Regulations ) issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) ( Guidance Note ). Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the BSE in connection with its proposed SME IPO. The Company s management has recast the Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated Summary Statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 (the 2013 Act), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles in India.

All assets and liabilities have been classified as current or non-current as per the Company s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current non-current classification of assets and liabilities.

b) USE OF ESTIMATES

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses, during the reporting year. Examples of such estimates include estimates of provision for slow moving and obsolete stock, provision for doubtful trade receivables, provision for warranty. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) CURRENT & NON-CURRENT CLASSIFICATION

All assets and liabilities are classified into current and non-current.

Assets:

An asset is classified as current when it satisfies any of the following criteria:

a) It is expected to be realised in, or is intended for sale or consumption in, the Companys normal operating cycle; b) It is held primarily for the purpose of being traded; c) It is expected to be realised within 12 months after the reporting date; or d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.

Liabilities:

A liability is classified as current when it satisfies any of the following criteria:

a) It is expected to be settled in the Companys normal operating cycle; b) It is held primarily for the purpose of being traded; c) It is due to be settled within 12 months after the reporting date; or d) The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

e) OPERATING CYCLE

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out above which are in accordance with the Schedule III to the Act. Based on the nature of services and the time between the acquisition of assets for providing of services and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current & non-current classification of assets and liabilities.

f) PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS

(i) Property, Plant & Equipment

Property, Plant and Equipment would be stated at the cost of acquisition or construction, less accumulated depreciation. All costs incurred in bringing the assets to its working condition for intended use to be capitalized.

Subsequent expenditures related to an item of Property, Plant and Equipment are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Property, Plant and Equipment acquired in a used condition are initially recognised at their fair value as on the date of acquisition, including directly attributable costs necessary to bring the asset to its working condition for its intended use. Such assets are depreciated over their remaining useful lives as estimated by the management, in accordance with Schedule II of the Companies Act, 2013.

(ii) Intangible Assets

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises of its materials, service costs and other direct related expenses (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the company.

g) DEPRECIATION / AMORTISATION

The depreciation is computed by considering the useful life of the asset as per Schedule II of the Companies Act, 2013 under Straight Line Method (SLM). If the Management s estimate of the useful life of a fixed asset at the time of the acquisition of the asset or of the remaining useful life on a subsequent review is different from the aforesaid schedule, depreciation is provided at the applicable rate based on such different useful life as per the advice obtained from a competent technician.

Intangibles assets are amortized over their estimated useful life on Straight Line Method.

Goodwill on acquisition are amortized on straight line method basis over five years in pursuance of provisions of AS 14 - Accounting for Amalgamations.

Depreciation on Property, Plant and Equipment acquired in a used condition is provided on a straight-line basis over the remaining useful life of the asset, as estimated by the management, in accordance with Schedule II of the Companies Act, 2013.

h) INVENTORIES

Inventories comprises of Raw Material, Work-in-Progress and Finished Goods. Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out principle.Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Finished goods and work-in-progress are valued at lower of cost and net realizable value. The cost of finished goods and work-in-progress includes raw material costs (net of recoverable taxes), direct cost of conversion and proportionate allocation of indirect costs incurred in bringing the inventories to their present location and condition.

i) IMPAIRMENT OF ASSETS

The Company periodically assesses whether there is any indication that an asset or a group of assets comprising a cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset or group of assets that do not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than it carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of profit and loss. If at the balance sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined; if no impairment loss had been recognised.

j) INVESTMENTS

Non-current investments are carried at cost less any other-than-temporary diminution in value, determined on the specific identification basis.

Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually for each investment. Cost of investments sold is arrived using average method.

k) FOREIGN CURRENCY TRANSLATIONS

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Any income or expense on account of exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account in the year in which it arises.

l) BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.

m) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The Company recognizes a provision when there is a present obligation as a result of past (or obligating) event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation.

n) REVENUE RECOGNITION

Sale of Goods

Revenue from sale of goods is recognised when control of the goods is transferred to the customer, which, under the

Company s Ex-Factory terms, occurs at the time the goods are made available at the Company s premises and are ready for dispatch. At this point, the significant risks and rewards of ownership are transferred to the customer.

Accordingly, revenue from both domestic and export sales is recognised when the goods are made available at the factory gate, in accordance with the agreed terms of sale and contractual arrangements with customers.

Insurance claims are accounted on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

Sale of Services

Revenue is primarily recognised from engineering services rendered on Time and Material contract basis. Revenue from fixed price contracts is recognised using the proportionate completion method, which is determined relating the actual project cost of work performed to date to the estimated total project cost for each period.

o) OTHER INCOME

Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right to receive such income is established.

p) TAXES ON INCOME

Income taxes are accounted for in accordance with Accounting Standard (AS-22) Accounting for taxes on income , notified under Companies (Accounting Standard) Rules, 2021. Income tax comprises of both current and deferred tax. Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

q) CASH AND BANK BALANCES

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Other Bank Balances are short-term balance (with original maturity is more than three months but less than twelve months).

r) EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue that have changed the number of equities shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share or increase the net loss per share. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

s) EMPLOYEE BENEFITS

Defined Contribution Plan:

Contributions payable to the recognised provident fund, which is a defined contribution scheme, are charged to the statement of profit and loss.

Defined Benefit Plan:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employee. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has been made in the books as per actuarial valuation done as at the end of the year/period.

t) SEGMENT REPORTING

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under unallocated revenue / expenses / assets / liabilities .

RESULTS OF OUR OPERATIONS

Based on Financial Statements of Profit & Loss as Restated

(Amount in lakhs)

Particulars	For the year ended March 31, 2026	% of Total**	For the year ended March 31, 2025	% of Total**	For the year ended March 31, 2024	% of Total**
INCOME
Revenue from Operations	14,876.70	96.98%	2,210.01	98.58%	938.60	99.90%
Other Income	462.97	3.02%	31.79	1.42%	0.96	0.10%
Total Revenue (A)	15,339.67	100.00%	2,241.80	100.00%	939.56	100.00%
EXPENDITURE
Cost of Materials Consumed	7,595.53	49.52%	1,062.00	47.37%	253.32	26.96%
Direct expenses	997.76	6.50%	435.78	19.44%	269.25	28.66%
Changes in Inventories of Work-In-Progress &
	(34.51)	-0.22%	(503.72)	-22.47%	(92.10)	-9.80%
Finished Goods
Employee Benefits Expenses	888.07	5.79%	385.44	17.19%	204.53	21.77%
Finance Costs	340.06	2.22%	68.10	3.04%	31.45	3.35%
Depreciation & Amortisation Expenses	295.23	1.92%	31.17	1.39%	10.47	1.11%
Other Expenses	227.43	1.48%	54.96	2.45%	24.78	2.64%
Total Expenses (B)	10,309.57	67.21%	1,533.73	68.42%	701.70	74.68%
Profit before exceptional items and tax (C)	5,030.10	32.79%	708.07	31.58%	237.86	25.32%
Exceptional items (D)	7.13	0.05%	-	0.00%	-	0.00%
Profit before tax (C-D)	5,022.97	32.74%	708.07	31.58%	237.86	25.32%
Tax Expense/ (benefit)
(a) Current Tax Expense	1,579.50	10.30%	191.54	8.54%	40.31	4.29%
(b) Deferred Tax	(262.92)	-1.71%	(8.37)	-0.37%	2.14	0.23%
Net tax expense / (benefit)	1,316.58	8.58%	183.17	8.17%	42.45	4.52%
Profit/(Loss) for the year/Period	3,706.39	24.16%	524.90	23.41%	195.41	20.80%

Components of our Profit and Loss Account

Income

Our total income comprises of revenue from operations and other income.

Revenue from Operation

The Revenue from operations as a percentage of our total income was 96.98%, 98.58% and 99.90% for the Financial Years ended March 31, 2026, March 31, 2025 and March 31, 2024 respectively.

(Amount in Lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Revenue from Sale of Products
-Domestic Sales	8,487.39	1,539.05	652.62
-Export Sales	4,085.92	665.57	285.98
Revenue from Sale of Services
-Domestic Sales	2,300.00	-	-
Other Operating Income: Duty Drawback	3.39	5.39	-
TOTAL	14,876.70	2,210.01	938.60

Other Income

Our other Income consists of Interest on Deposits, Interest on Inter-corporate deposits, Gain on Foreign currency, Rental Income and Sundry Balances Written Back.

(Amount in Lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Interest on fixed deposit income	2.94	3.43	-
Interest on Inter-corporate deposits	12.13	0.07	-
Gain on Translation of foreign currency balances	441.00	23.71	0.93
Rental Income	5.85	-	-
Sundry Balances Written Back	1.05	4.58	0.03
TOTAL	462.97	31.79	0.96

Expenditure

Our total expenditure primarily consists of Cost of material consumed, Direct expenses, Employee benefit expenses, finance costs, Depreciation and Other Expenses.

Cost of material consumed

Our cost of material consumed comprises of Purchases of materials.

Direct expenses

Our direct expenses comprise of Freight expense, Labour & Service Charges, Rent, Power & Fuel and Factory Maintenance expenses.

Employee Benefit Expenses

Our employee benefits expense comprises of Salaries and wages, Staff Welfare, Directors Remuneration, Contribution to Provident fund, Leave Enhancement Expenses and Provision for Gratuity.

Finance costs

Our Finance cost expenses comprise of Interest Expenses, bank and loan processing charges, Interest on MSME Dues and other finance costs.

Other Expenses

Our other expenses primarily comprise of Auditors remuneration, Travelling & Conveyance, Rates & Taxes, Professional and Consultancy Charges, Insurance, Building Repair and Maintenance, Sales Commission, Security charges, Miscellaneous Expenses, Sundry balance written off etc.

(Amount in Lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Administrative Expenses
Audit Fee	15.00	5.00	2.00
Insurance	4.46	1.61	0.30
CSR expenses	7.40	-	-
Professional and Consultancy Charges	47.22	11.64	3.18
Sundry balance written off	69.60	6.61	5.86
Repairs and Maintenance - Building	10.28	5.37	7.22
Rates & Taxes	26.06	1.27	0.78
Travelling & Conveyance	24.56	6.72	0.98
Sales Commission	7.45	3.20	-
Security charges	10.99	10.16	4.02
Miscellaneous Expenses	4.41	3.38	0.44
Total	227.43	54.96	24.78

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

Fiscal 2026 compared with fiscal 2025

Revenue from Operations

The Revenue from Operations of our company for fiscal year 2026 was 14,876.7 Lakhs against 2,210.01 Lakhs for Fiscal year 2025. An increase of 573.15% in revenue from operations. This increase was primarily attributable to the huge increase in the revenue from Defence sector from 150.08 lakhs in Fiscal 2025 to 10,325.82 Lakhs in Fiscal 2026. Contributing 69.41% of the total revenue. The Railways sector also increased from 1,503.60 lakhs in Fiscal 2025 to 3,517.19 Lakhs in Fiscal 2026 remained strong at 23.65%.

Other factors that affected the increase in revenue is as follows:

Quality Assurance: As a manufacturer for high-precision sectors like Defence and Aerospace, the company maintains strict quality standards. The growth of the Quality Team has been vital in winning repeat business.

Capacity Expansion: Revenue growth was supported by the expansion of the Companys manufacturing facilities. Following the establishment of its first two units in 2023 and the addition of a sheet metal unit in 2024, the Company further expanded its manufacturing capacity with the commissioning of Unit-4 in Fiscal 2026, enabling it to cater to the increased order volume.

Technological Investment: The company invested 1,050.26 lakhs in plant and machinery in Fiscal 2025 and an additional 839.59 lakhs during fiscal 2026. While the 2025 investment was not fully available for that entire year, its current utilization is now driving growth.

Skilled Workforce Expansion: The increase in the skilled workforce from 120 employees in Fiscal 2025 to 159 employees in Fiscal 2026 strengthened the Companys manufacturing and execution capabilities, contributing to the growth in revenue from operations.

Macro-Economic Factors: Global geopolitical changes have increased Defence spending, which has positively impacted the company s order book.

Other Income

The other income of our company for fiscal year 2026 was 462.97 Lakhs against 31.79 for Fiscal year 2025. The increase of 1356.34% in other income. This increase in other income was primarily driven by foreign exchange gains from year-end fluctuations in foreign currency rates.

Total Income

The total income of the Company increased to 15,339.67 lakhs in Fiscal 2026 from 2,241.80 lakhs in Fiscal 2025, representing an increase of 584.26%. The increase was primarily driven by higher revenue from operations, supported by expanded manufacturing capacity through the commissioning of a new sheet metal and fabrication unit and increased order execution, particularly in the defence sector. Additionally, other income increased due to foreign exchange gains arising from exchange rate fluctuations.

Expenditure

Cost of material consumed

The Cost of Materials Consumed increased from 1,062.00 lakhs in Fiscal 2025 to 7,595.53 lakhs in Fiscal 2026, an increase of 615.21%, primarily due to the significant growth in revenue from the defense segment. The increase was mainly driven by supplies of drone kits, which involve high-value electronic components and specialized materials, resulting in higher material consumption in line with the increased scale of operations.

Direct Expenses

In Fiscal 2026, the Company incurred direct expenses of 997.76 lakhs as compared to 435.78 lakhs in Fiscal 2025, representing an increase of 128.96%. The increase was primarily due to the rent expense of the new plant of approximately 79 lakhs and higher job work charges, which increased to 279.49 lakhs (approximately 148%) as the Company engaged local job workers to support timely execution of increased customer orders.

Employee Benefit Expenses

In Fiscal 2026, the Company incurred employee benefit expenses of 888.07 Lakhs against 385.44 Lakhs expenses in fiscal 2025. An increase of 130.40%. This growth was primarily due to This growth was primarily due to an expansion in headcount from approximately 120 employees in Fiscal 2025 to 159 in Fiscal 2026. Additionally, enhanced salary packages across the workforce contributed to the overall increase in line with business expansion.

Finance Costs

Finance costs increased to 340.06 lakhs in Fiscal 2026 from 68.10 lakhs in Fiscal 2025, representing an increase of 399.35%. The increase was primarily due to additional borrowings from banks and financial institutions to meet working capital requirements and finance new machinery acquisitions. Interest on these borrowings increased by 343% from 35.32 lakhs to 156.62 lakhs in Fiscal 2026, while interest on MSME dues increased from 4.75 lakhs to 61.14 lakhs due to the identification of additional MSME creditors during the year.

Other Expenses

Other expenses increased to 227.43 lakhs in Fiscal 2026 from 54.96 lakhs in Fiscal 2025, representing an increase of 313.81%, primarily in line with the significant growth in revenue from operations. However, other expenses as a percentage of total revenue declined to 1.48% in Fiscal 2026 from 2.45% in Fiscal 2025, indicating improved operational efficiency and cost management despite the higher scale of operations.

Profit before exceptional items and tax

Our Company had reported a Profit before exceptional items and tax for the Fiscal 2026 of 5,030.10 Lakhs against 708.07 Lakhs in Fiscal 2025. An increase of 610.40%. This substantial rise was primarily driven by significant growth in revenue from operations, supported by higher order execution, particularly in the defence sector, and improved operating leverage. Although material consumption, direct expenses and finance costs increased in line with the expanded scale of operations, the substantial growth in revenue resulted in higher profitability during the year.

Profit before Tax

Our Company reported a profit before tax of 5,022.97 lakhs in Fiscal 2026 as compared to 708.07 lakhs in Fiscal 2025, representing an increase of 609.39%. The increase was primarily driven by significant growth in revenue from operations, supported by higher order execution, particularly in the defence sector, and improved operating leverage. Although material consumption, direct expenses and finance costs increased in line with the expanded scale of operations, the substantial growth in revenue resulted in higher profitability during the year. Further, an exceptional item of 7.13 lakhs, relating to the impact of the implementation of the new Labour Code, has been considered in arriving at the profit before tax for Fiscal 2026.

Profit after Tax

Profit after tax for the Fiscal 2026 were at 3,706.39 Lakhs against profit after tax of 524.90 Lakhs in fiscal 2025, An Increase of 606.11%. This substantial rise was primarily driven by significant growth in revenue from operations, supported by higher order execution, particularly in the defence sector, and improved operating leverage. Although material consumption, direct expenses and finance costs increased in line with the expanded scale of operations, the substantial growth in revenue resulted in higher profitability during the year.

Fiscal 2025 compared with fiscal 2024

Revenue from Operations

The Revenue from Operations of our company for fiscal year 2025 was 2,210.01 Lakhs against 938.60 Lakhs for Fiscal year

2024. An increase of 135.46% in revenue from operations. This increase was primarily attributable to the commissioning of a new sheet metal and fabrication unit during FY 2024-25, which contributed to expanded production capacity, alongside the onboarding of new customers across key segments. The new unit enabled the Company to undertake additional custom fabrication projects and product sales, driving volume growth through higher orders and market share gains in the manufacturing sector.

In Fiscal 2025, revenue reached a milestone of 2,210.01 lakhs with a total of 46 customers.

Sector Distribution: Railways ( 1,503.60 lakhs), Semiconductors ( 445.43 lakhs), Defence ( 150.08 lakhs), and Aerospace ( 105.51 lakhs).

Customer Loyalty: Revenue from repeat customers was 1,843.90 lakhs. This 2.85x increase in repeat orders is a strong sign of market confidence.

Efficiency: The AOV grew to 48.04 lakhs. Installed capacity increased by 57,358 hours, and utilized capacity grew by

66,210 hours.

Other Income

The other income of our company for fiscal year 2025 was 31.79 Lakhs against 0.96 for Fiscal year 2024. The increase of

3,211.46% in other income. This increase in other income was primarily driven by foreign exchange gains from year-end fluctuations in foreign currency rates, along with higher interest income from new fixed deposits.

Total Income

The total income of the company for fiscal year 2025 was 2,241.80 Lakhs against 939.56 Lakhs of total income for Fiscal year 2024 with an increase of 138.60% in total income. The increase in total income for FY 2024-25 was primarily driven by revenue growth from the commissioning of a new sheet metal and fabrication unit, alongside new customer onboarding. This expanded production capacity enabled additional custom fabrication projects, boosting volumes, orders, and market share in manufacturing. Other income rose due to year-end foreign exchange gains on USD-INR fluctuations and higher interest from new fixed deposits.

Expenditure

Cost of material consumed

In Fiscal 2025, cost of material consumed were 1,062.00 Lakhs against 253.32 Lakhs of Cost of material consumed in fiscal 2024. An increase of 319.23%. This rise was primarily driven by higher turnover, which expanded from 9.38 Crores to 22.01

Crores, scaling material procurement in direct proportion. Additionally, onboarding new project-based customers contributed to elevated material consumption to support expanded operations.

Direct Expenses

In Fiscal 2025, the Company incurred Direct expenses of 435.78 Lakhs against 269.25 Lakhs of Direct expenses in fiscal 2024. An increase of 61.85%. An increase of 58.70% this uptick was primarily driven by the addition of a new factory facility, which elevated maintenance and rent costs. Other direct expenses, including electricity and labour charges, also increased in line with higher turnover and expanded operations.

Employee Benefit Expenses

In Fiscal 2025, the Company incurred employee benefit expenses of 385.44 Lakhs against 204.53 Lakhs expenses in fiscal 2024. An increase of 88.45%. This growth was primarily due to an expansion in headcount from approximately 90 employees in Fiscal 2024 to 120 in Fiscal 2025. Additionally, enhanced salary packages across the workforce contributed to the overall increase in line with business expansion.

Finance Costs

The finance costs for the Fiscal 2025 were 68.10 Lakhs while it was 31.45 Lakhs for Fiscal 2024. An increase of 116.53%. This increase was due to - This uptick was primarily attributable to borrowings from banks and NBFCs for the purchase of new machinery, which elevated interest expenses. Additionally, associated processing charges and bank fees contributed to the overall growth in finance costs. This growth was primarily driven by borrowings from banks and NBFCs to fund the purchase of new machinery, resulting in higher interest expenses. Associated processing charges and bank fees further contributed to the overall increase in finance costs.

Other Expenses

In fiscal 2025, our other expenses were 54.96 Lakhs and 24.78 Lakhs in fiscal 2024. An increase of 121.76%. This growth was primarily driven by higher professional and consultancy charges, along with elevated travel expenses that supported revenue expansion through new business development. Additionally, the commissioning of a new facility contributed to increased security charges.

Profit before Tax

Our Company had reported a profit before tax for the Fiscal 2025 of 708.07 Lakhs against profit before tax of 237.86 Lakhs in Fiscal 2024. An increase of 197.69%. This substantial rise was primarily driven by higher turnover, leveraging increased operational scale and efficiencies.

Profit after Tax

Profit after tax for the Fiscal 2025 were at 524.90 Lakhs against profit after tax of 195.41 Lakhs in fiscal 2024, An Increase of 168.62%. This increase was due to this growth was primarily attributable to higher turnover, driving improved operational profitability.

Summary of profitability for the financial years ended on March 31, 2026, 2025 and 2024:

(Amount in Lakhs)

Particulars	Fiscal 2026	Fiscal 2025	Fiscal 2024
Profit for the year	3,706.39	524.90	195.41
Revenue from Operations	14,876.70	2,210.01	938.60
	24.91%	23.75%	20.82%

The increase in Profit After Tax (PAT) over the years is primarily driven by substantial growth in revenue from operations, improvement in product mix, and operating leverage arising from scale expansion.

Revenue from operations increased from 938.60 lakhs in FY 2023-24 to 14,876.70 lakhs in FY 2025-26. The higher scale of operations resulted in improved absorption of fixed and semi-fixed manufacturing overheads.

Total expenses as a percentage of revenue reduced from 74.68% in FY 2023-24 to 67.21% in FY 2025-26, leading to improvement in operating margins.

The key operational factors contributing to improved profitability include:

1. Reduction in direct expenses as a percentage of revenue from 28.66% in FY 2023-24 to 6.50% in FY 2025-26, primarily due to improved production efficiencies, optimisation of labour and service costs, and change in product mix towards higher value-added products.

2. FY 2023-24 was a team build-up year for the Company. Subsequently, employee cost efficiency improved, with employee benefits expense reducing to 5.79% of revenue in the fiscal 2026 as compared to 21.77% in fiscal 2024, reflecting improved manpower productivity and stabilisation of the workforce following the expansion phase.

3. Increase in depreciation due to capacity addition was adequately absorbed by the higher revenue base.

The improvement in PAT margin from 20.80% in FY 2023-24 to 24.16% in FY 2025-26 is attributable to operational efficiencies, improved product mix, and economies of scale. The improvement is linked to structural business expansion and operational optimisation rather than non-recurring factors.

Cash Flows

(Amount in lakhs)

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025	For the year ended March 31, 2024
Net Cash Flow from/ (used in) Operating Activities	(1,076.29)	(291.89)	65.28
Net Cash Flow from/ (used in) Investing Activities	(1,627.02)	(977.14)	(268.81)
Net Cash Flow from/ (used in) Financing Activities	2,717.46	1,327.03	199.74

Cash Flows from Operating Activities

1. For the year ended March 31, 2026, net cash used in operating activities was 1,076.29 Lakhs. This comprised of the net profit before tax of 5,022.97 Lakhs, which was primarily adjusted for Depreciation and Amortisation expense of 295.23 akhs, Interest Cost of 312.23 Lakhs, Interest income of 15.07 Lakhs, Gratuity & Leave encashment Provision of 20.20 Lakhs, Unrealised Foreign Exchange Loss of 363.79 Lakhs, Sundry balance Written back of 1.05 Lakhs and Sundry balance written off of 69.60 Lakhs. The resultant operating profit before working capital changes was 5,347.45 Lakhs, which was primarily adjusted for an increase in Trade Receivables of 12,893.84 Lakhs, inventories of 395.40 Lakhs, Other Non-Current Assets of 144.08 Lakhs, Trade Payables of 6,787.14 Lakhs and Other Liabilities of 148.24 Lakhs. Additionally, there was a decrease Loans and Advances of 122.77 Lakhs, and Other Current Assets (Including Other Bank balances) of 68.16 Lakhs,

Cash used in operations was 959.56 Lakhs, which was further increased by direct tax paid for 116.73 Lakhs, resulting into net cash flow used in operating activities of 1,076.29 Lakhs.

2. For the year ended March 31, 2025, Net cash flow used in operating activities was 291.89 Lakhs. This comprised of the net profit before tax of 708.07 Lakhs, which was primarily adjusted for Depreciation and Amortisation expense of 31.17 Lakhs, Interest Cost of 49.37 Lakhs, Interest income of 3.50 Lakhs, Gratuity & Leave encashment Provision of 14.19 Lakhs, Unrealised Foreign Exchange Loss of 14.80 Lakhs, Sundry balance Written back of 4.58 Lakhs and Sundry balance written off of 6.61 Lakhs. The resultant operating profit before working capital changes was 786.53 Lakhs, which was primarily adjusted for an increase in Inventories of 390.19 Lakhs, Trade Receivables of 484.24 Lakhs, Other Non-Current Assets of 91.08 Lakhs, Loans and Advances of 100.91 Lakhs and Other Current Assets (Including Other Bank balances) of 133.50 Lakhs. There was an increase in Trade Payables of 242.63 Lakhs and decrease in other Liabilities of 35.67 Lakhs.

Cash used in operations was 206.43 Lakhs, which was increased by direct tax paid of 85.46 Lakhs, resulting into net cash flow from operating activities of 291.89 Lakhs.

3. For the year ended March 31, 2024, Net cash flow from operating activities was 65.28 Lakhs. This comprised of the net profit before tax of 237.86 Lakhs, which was primarily adjusted for Depreciation and Amortisation expense of 10.47 Lakhs, Interest Cost of 29.31 Lakhs, Gratuity & Leave encashment Provision of 4.94 Lakhs, Unrealised Foreign Exchange Loss of 0.50 Lakhs, Sundry balance Written back of 0.03 Lakhs and Sundry balance written off of 5.86 Lakhs. The resultant operating profit before working capital changes was 278.91 Lakhs, which was primarily adjusted for an increase in Inventories of 216.20 Lakhs, Trade Receivables of 124.74 Lakhs, Other Non-Current Assets of 32.00 Lakhs and Loans and Advances of 53.13 Lakhs, Trade Payables of 115.46 Lakhs and Other Liabilities of 89.50 Lakhs.

Cash generated from operations was 66.80 Lakhs, which was reduced by direct tax paid of 1.52 Lakhs, resulting into net cash flow from operating activities of 65.28 Lakhs.

Cash Flows from Investment Activities

For the year ended March 31, 2026, net cash used in investing activities was 1,627.02 Lakhs, which primarily comprised of cash used for purchase of property, plant & equipment and intangible assets of 779.36 Lakhs, Interest income received of 2.94 Lakhs, Investment in shares of 575.06 Lakhs, Payment in respect of Business Acquisitions of 196.05 lakhs and Inter-corporate deposits of 79.49 Lakhs.

For the year ended March 31, 2025, net cash used in investing activities was 977.14 Lakhs, which primarily comprised of cash used for purchase of property, plant & equipment and intangible assets of 930.57 Lakhs, Interest income received of 3.43 Lakhs, Payment in respect of Business Acquisitions of 10.00 lakhs and Inter-corporate deposits of 40.00 Lakhs.

For the year ended March 31, 2024, net cash used in investing activities was 268.81 Lakhs, which primarily comprised of cash used for purchase of property, plant & equipment and intangible assets of 268.81 Lakhs.

Cash Flows from Financing Activities

For the year ended March 31, 2026, net cash flow from financing activities was 2,717.46 Lakhs, which primarily comprised of proceeds from issue of fresh shares during the period of 2,229.35 Lakhs and Proceeds from Borrowing of 1,101.59 Lakhs, partially offset by repayment of borrowings of 362.40 Lakhs and interest cost paid of 251.08 Lakhs.

For the year ended March 31, 2025, net cash flow from financing activities was 1,327.03 Lakhs, which primarily comprised of proceeds from issue of fresh shares during the period of 865.63 Lakhs and Proceeds from Borrowing of 2,628.91 Lakhs, partially offset by repayment of borrowings of 2,122.89 Lakhs and interest cost paid of 44.62 Lakhs.

For the year ended March 31, 2024, net cash flow from financing activities was 199.74 Lakhs, which primarily comprised of proceeds from Borrowing of 1,182.52 Lakhs, partially offset by repayment of borrowings of 956.11 Lakhs and interest cost paid of 26.66 Lakhs.

OTHER MATTERS

2. Unusual or infrequent events or transactions

Except COVID-19 or any such kind of pandemic and as described in this Red Herring Prospectus, there have been no other events or transactions to the best of our knowledge which may be described as unusual or infrequent .

3. Significant economic changes that materially affected or are likely to affect income from continuing Operations

Other than as described in the Section titled Financial Information and chapter titled Management s Discussion and Analysis of Financial Conditions and Results of Operations , beginning on Page 182 and 197 respectively of this Red Herring Prospectus, to our knowledge there are no significant economic changes that materially affected or are likely to affect income from continuing Operations.

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

Apart from the risks as disclosed under Chapter titled Risk Factors beginning on page no. 29 in this Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

5. Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known

Our Company s future costs and revenues will be determined by demand/supply situation, both of the end services as well as the government policies and other economic factors.

6. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or increased sales prices.

Increases in revenues are by and large linked to increases in volume of business and also dependent on the price realization on our products/services.

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

Relevant Industry data and, as available, has been included in the chapter titled Industry Overview beginning on page no. 97 of this Red Herring Prospectus.

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

Our business is dependent on few clients. Our top 10 customers contributed 92.06%, 88.01%, and 93.71% of revenue from operations for F.Y. ending on 2025-26, 2024-25 and 2023- 24 respectively.