You should read the following discussion of our financial condition and results of operations together with our restated financial statements included in the Red Herring Prospectus. You should also read the section entitled "Risk Factors " beginning on page 27, which discusses several factors, risks and contingencies that could affect our financial condition and results of operations. The following discussion relates to our Company and is based on our restatedfinancial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year ("Fiscal Year") are to the twelve-month period ended March 31 of that year.
The financial statements have been prepared in accordance with IND AS, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditors dated August 11, 2025 which is included in this Red Herring Prospectus under the section titled "RestatedFinancial Information " beginning on page F-1 to F-33 of this Red Herring Prospectus. The restated financial statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our restated financial statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between IND AS and U.S. GAAP or IFRS as applied to our restated financial statements.
This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements?" beginning on pages 20 respectively, and elsewhere in this Red Herring Prospectus Accordingly, the degree to which the financial statements in this Red Herring Prospectus will provide meaningful information depend entirely on such potential investors level of familiarity with Indian accounting practices. Please also refer to section titled "Presentation of Financial, Industry and Market data " beginning on page 18 of this Red Herring Prospectus.
BUSINESS OVERVIEW
Our Company was originally incorporated as "Optivalue Tek Consulting Private Limited" under the provisions of Companies Act, 1956 vide Certificate of Incorporation dated June 27, 2011 bearing Corporate Identification Number U72200DL2011PTC221539 issued by the Registrar of Companies, Delhi and Haryana. Further, our Company was converted in to a public limited Company pursuant to a special resolution passed by our shareholders at the EGM held on May 22, 2024 and consequently the name of our Company was changed to "Optivalue Tek Consulting Limited" and a fresh certificate of incorporation was issued by the Registrar of Companies, Delhi dated September 16, 2024. As on date of this Red Herring Prospectus, the Corporate Identification Number of our Company is U72200DL2011PLC221539
With over a decade of experience and a global presence spanning industries like Retail, Telecom, Banking, High Tech, and Energy, OptiValue Tek is uniquely positioned to offer a wide range of tailored, high-quality services. Our team brings vast expertise, making us a trusted partner in delivering innovative software solutions and consulting services worldwide.
For detailed information on the business of our Company please refer to "Our Business" beginning on page numbers 118 of this Red Herring Prospectus.
SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR ENDED MARCH 31, 2024
As per mutual discussion between the Board of the Company and BRLM, in the opinion of the Board of the Company there have not arisen any circumstances since the date of the last financial statements as disclosed in the Red Herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:
i. Conversion of the Company from private to a public limited company:
Our Company was converted into a Public Company vide special resolution passed by the Shareholders at the Extra Ordinary General Meeting held on May 22, 2024, and consequently, the name of our Company was changed from "Optivalue Tek Consulting Private Limited" to "Optivalue Tek Consulting Limited"" and a Fresh Certificate of Incorporation dated September 16, 2024 issued by the Registrar of Companies, Delhi bearing CIN U72200DL2011PLC221539.
ii. Change in Registered Office of the Company
Board of Director of our Company have change the registered office of the Company from 3rd Floor, Plot No. 94, Dwarka Sec-13, Metro Station, Near Radisson Blu, New Delhi, South West Delhi, Delhi, Delhi, India, 110078 to Khasra No. 2/2 and 2/1, Chhattarpur Main Road, Near Sai Baba Mandir, Sawan Public School, South West Delhi, South West Delhi, Delhi, India, 110074
iii. Regularization of Independent Director
Shareholder of our Company regularize the appointment of Mr. Ankit Aggarwal and Mr. Sumit Kumar as Independent Director in the Extra Ordinary General Meeting held on November 12, 2024.
iv. Appointment of Managing Director
Shareholder of our Company have appointed Mr. Ashish Kumar as Managing Director of our Company in the Extra Ordinary General Meeting of the Company held on November 07, 2024
v. Resolution to raise fund through the Issue:
The Board of Directors of our Company have approved and authorized to raise the funds by way of Initial Public Offering vide resolution passed in its meeting held on October 25, 2024. Further, the members of the Company in their extra-ordinary general meeting held on November 12, 2024 have approved and authorized to raise the funds by way of Initial Public Offering.
vi. Resolution to raise fund through the Private Placement:
The Board of Directors of our Company have approved and authorized to raise the funds by way of Initial Public Offering vide resolution passed in its meeting held on October 25, 2024. Further, the members of the Company in their extra-ordinary general meeting held on November 12, 2024 have approved and authorized to raise the funds by way of Initial Public Offering.
vii. Resolution to approve Bonus Issue
The Board of Directors of our Company have approved to issue Bonus Shares to the shareholders of the Company vide resolution passed in its meeting held on July 26, 2024. Further, the members of the Company in their extra-ordinary general meeting held on July 30, 2024 have approved and authorized to the issue Bonus Shares.
viii. Further Change in Registered Office of the Company
Board of Director of our Company have change the registered office of the Company from Khasra No. 2/2 and 2/1, Chhattarpur Main Road, Near Sai Baba Mandir, Sawan Public School, South West Delhi, South West Delhi, Delhi, India, 110074 to 607 6th Floor, Surya Kiran Building 19 K G Marg, Connaught Place, Central Delhi, New Delhi, Delhi, India, 110001.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factor" beginning on page 27 of this Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:
• Any adverse changes in central or state government policies.
• Company?s results of operations and financial performance.
• Our ability to attract and retain qualified Personnel.
• Our success depends on the continued services and performance of the members of our management team and other key employees.
• We rely on third party transportation and other logistic facilities at every stage of our business activity including for procurement materials
• Increase in the prices of construction materials and labour & works contact charges.
• Market fluctuations and industry dynamics are beyond our control.
• Failure to adapt to the changing needs of industry and in particular government policies and regulations may adversely affect our business and financial condition;
• Unfavorable economic development.
• Our ability to successfully execute our growth strategies.
• General Economic and Market Conditions.
• Changes, if any, in the regulations / regulatory framework / economic policies in India and / or in foreign countries, which affect national & international finance.
KPI INDICATORS OF OUR COMPANY:
| Particulars | Financial Year ended March 31, 2025 | Financial Year ended March 31, 2024 | Financial Year ended March 31, 2023 |
| Revenue from operations (1) | 5607.85 | 3656.04 | 3884.32 |
| Growth in Revenue from Operations (2) | 53.39% | -6.65% | 33.28% |
| EBITDA(3) | 1671.71 | 838.14 | 475.77 |
| EBITDA (%) Margin(4) | 29.81% | 22.92% | 12.25% |
| EBITDA Growth Period on Period(5) | 99.46% | 76.16% | -42.49% |
| ROCE (%)(6) | 50.26% | 40.28% | 21.59% |
| Current Ratio(7) | 2.90 | 2.50 | 4.59 |
| Operating Cash flow(8) | (400.11) | 395.34 | 259.20 |
| PAT(9) | 1218.60 | 549.16 | 277.32 |
| ROE/ RONW(10) | 38.09% | 31.09% | 22.79% |
| EPS(11) (after considering bonus) | 7.42 | 3.66 | 1.85 |
Notes:
1(1 Revenue from operations is the total re-venue generated by our Company.
(2 Growth in Revenue in percentage, Year on Year
(3 EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses l-4> EBITDA Margin ? is calculated as EBITDA divided by Revenue from Operations
(5) EBITDA Growth Rate Year on Year in Percentage
(6) ROCE: Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders ? equity plus debt
(7 Current Ratio: Current Asset over Current Liabilities
(8) Operating Cash Flow: Net cash inflow from operating activities.
(9) pat is mentioned as PAT for the period
1(10 ROE/RONW is calculated PAT divided by average shareholders ? equity (ii) EPS is mentioned as EPS for the period as adjusted with bonus shares
| KPI | Explanation |
| Revenue from operation | Revenue from Operations is used by our management to track the revenue profile of the business and in turn helps to assess the overall financial performance of our Company and volume of our business. |
| Revenue Growth Rate % | Revenue Growth rate informs the management of annual growth rate in revenue of the company in consideration to previous period |
| EBITDA | EBITDA provides information regarding the operational efficiency of the business |
| EBITDA Margin (%) | EBITDA Margin (%) is an indicator of the operational profitability and financial performance of our business |
| EBITDA Growth Rate % | EBITDA Growth Rate informs the management of annual growth rate in EBITDA of company in consideration to previous period |
| ROCE % | ROCE provides how efficiently our Company generates earnings from the capital employed in the business. |
| Current Ratio | Current ratio indicate the company?s ability to bear its short term obligations |
| Operating Cash Flow | Operating cash flow shows whether the company is able to generate cash from day to day business |
| PAT | Profit after Tax is an indicator which determine the actual earning available to equity shareholders |
| ROE/RONW | It is an indicator that shows how much the company is generating from its available average shareholders? funds |
| EPS | Earning per share is the company?s earnings available of one share of the Company for the period |
SIGNIFICANT ACCOUNTING POLICIES
For Significant accounting policies please refer "Significant Accounting Policies", under Chapter titled Financial Information beginning on page F-1 to F-33 respectively of the Red Herring Prospectus.
CHANGE IN ACCOUNTING POLICIES
Except as mentioned in chapter "Restated Financial Information" on page F-1 to F-33 of this Red Herring Prospectus, there has been no change in the accounting policies during the Fiscal 2025.
RESERVATIONS, QUALIFICATIONS AND ADVERSE REMARKS
There are no reservations or qualifications or adverse remarks in the auditors? report on restated financial statements. SUMMARY OF THE RESULT OF OPERATIONS Our Results of Operations (Financial Statements)
The following discussion on the financial operations and performance should be read in conjunction with the financial results of the company.
| Particulars | For the year ended | |||||
| March 31, 2025 | (%)* | March 31, 2024 | (%)* | March
31, 2023 |
(%)* | |
| Total Revenue: |
||||||
| Revenue from Operations | 5607.85 | 99.30
% |
3,656.04 | 99.54% | 3,884.3
2 |
98.90% |
| Other income | 39.52 | 0.70% | 16.86 | 0.46% | 43.04 | 1.10% |
| Total Revenue |
5647.37 | 100.00
% |
3,672.90 | 100.00
% |
3,927.3
6 |
100.00% |
| Expenses: | ||||||
| Cost of Materials Consumed | 451.49 | 7.99% | 0.00 | 0.00% | 0.00 | 0.00% |
| Consultancy Charges |
2186.67 | 38.72
% |
1,721.12 | 46.86% | 2,659.4
9 |
67.72% |
| Change in inventory | 0.00 | 0.00% | 0.00 | 0.00% | 0.00 | 0.00% |
| Employees Benefit Expenses |
1197.83 | 21.21
% |
1,062.39 | 28.92% | 737.86 | 18.99% |
| Finance costs | 10.20 | 0.18% | 40.07 | 1.09% | 34.15 | 0.87% |
| Depreciation and Amortization Expenses |
42.57 | 0.75% | 54.40 | 1.48% | 60.63 | 1.54% |
| Other expenses | 134.19 | 2.38% | 51.26 | 1.40% | 54.23 | 1.39% |
| Total Expenses |
4022.95 | 71.24
% |
2,929.23 | 79.75% | 3,546.3
7 |
90.30% |
| Profit before extraordinary & exceptional items | 1624.42 | 28.76
% |
743.68 | 20.25% | 380.99 | 9.70% |
| Extraordinary & Exceptional Items | 5.48 | 0.10% | 0.00 | 0.00% | 0.00 | 0.00% |
| Profit before tax | 1618.94 | 28.66
% |
743.68 | 20.25% | 380.99 | 9.70% |
| Tax Expenses | ||||||
| Current tax | 426.65 | 7.55% | 193.21 | 5.26% | 104.13 | 2.65% |
| Deferred Tax | 21.61 | 0.38% | 1.31 | 0.04% | -0.47 | -0.01% |
| Total Tax Expenses | 405.04 | 7.17% | 194.52 | 5.30% | 103.66 | 2.64% |
| Profit for the Year | 1213.90 | 21.49
% |
549.16 | 14.95% | 277.32 | 7.06% |
*(%) column represents percentage of total revenue.
Overview of Revenue and Expenses
Our revenue and expenses are reported in the following manner:
Total Revenues
? Revenue of operations:
Our Company?s revenue is primarily generated from supply of services.
? Other Income:
The Other Income mainly comprises of Interest Income, Miscellaneous Incomes and Sundry balances written off.
Expenses
Our expenses primarily consist of Consultancy Charges, Employee Benefits Expenses, Finance Cost, Depreciation and Amortization Expense and Other Expenses.
? Consultancy Charges
It includes only professional charges or contractual charges paid to individuals or other companies/firms.
? Employment Benefit Expenses
It includes Salaries, wages & bonus, Director?s Remuneration, Contribution to Provident Fund and Other Funds and Staff Welfare Expense related to Employees.
? Finance Costs
Finance cost consist of interest expenses on Borrowings and Loan Processing Charges.
? Depreciation
It includes Depreciation on Laptop, Vehicles, Office Equipment, Furniture, Solar Systems and Building.
? Other Expenses
Other expense includes Office Expenses, Audit & Accounting Expenses, Bank Expenses, Office Expenses, Repair & Maintenance, Sundry Balance Written Off, Staff Welfare Expenses, Interest on GST, Foreign Exchange (Gain)/Loss, Telephone and Internet Expenses, Business Promotion, Fine & Penalty, Forex Exchange Rate Difference, Income Tax Exp FY 20-21, Office Rent, Misc. Expenses, Interest on Income Tax, Travelling expense, PF-Contractor Employee, CSR Expenses, Subscription Expenses, ROC expense, IT and Computer Maintenance expense, Vehicle Maintenance Charges, PF & ESI Expenses and etc.
? Tax Expenses
Tax expense comprises of Current Tax and Deferred Tax.
FINANCIAL YEAR 2024-25 COMPARED WITH THE FINANCIAL YEAR 2023-24 (BASED ON RESTATED FINANCIAL STATEMENTS)
Total Revenue
Our total revenue Increased by ? 1974.47 lakhs i.e. 53.77% to ? 5,647.37 lakhs for the financial year 2024-25 from ? 3,672.90 lakhs for the financial year 2023-24 due to the factors described below:
Revenue from operations
Revenue from operations
Our revenue from operations increased by ?1,951.81 lakhs, i.e. 53.39%, to ?5,607.85 lakhs for the financial year 2024-25 from ?3,656.04 lakhs for the financial year 2023-24. Revenue from operation increased primarily because of increase in Professional consultancy and additional sale of goods as compared to previous financial year. Revenue breakup of the same is as follows: The revenue breakup is as follows:
| Revenue | FY 2024-25 | FY 2023-24 |
| Professional Consultancy | 5127.84 | 3656.04 |
| Sale of Goods | 480.00 | |
| TOTAL | 5,607.85 | 3656.04 |
Other Income
Our other income increased by ?22.66 lakhs, i.e. 134.37%, to ?39.52 lakhs for the financial year 2024-25 from ?16.86 lakhs for the financial year 2023-24. The increase was primarily attributable to higher interest earned on fixed deposits during the year.
EXPENDITURE
Total Expenses
Our total expenses increased by ?1,093.72 lakhs, i.e. 37.36%, to ?4,022.95 lakhs in the financial year ended March 31, 2025, from ?2,929.23 lakhs in the financial year ended March 31, 2024. The increase in total expenses was due to the factors described below:
Cost of Material Consumed
Our cost of materials consumed was ?451.49 lakhs for the financial year 2024-25 as against Nil in the financial year 2023-24. The increase is primarily attributable to commencement of material procurement during the year to support our operational activity, whereas there was no corresponding consumption in the previous year.
Consultancy Charges
Our consultancy charges increased by ?465.55 lakhs, i.e. 27.04%, to ?2,186.67 lakhs for the financial year 2024-25 from ?1,721.12 lakhs for the financial year 2023-24. The increase was primarily attributable to higher engagement of consultants and professional services to support expanded business operations and project requirements during the year.
Employee Benefit Expense
Our employee benefit expenses increased by ?135.44 lakhs, i.e. 12.75% to ?1,197.83 lakhs for the financial year 2024-25 from ?1,062.39 lakhs for the financial year 2023-24. The increase was primarily due to higher salaries and allowances, enhanced gratuity expense and a rise in directors? remuneration, reflecting expanded workforce and improved compensation structures during the year
Finance Costs
Our finance cost decreased by ?29.87 lakhs, i.e. -74.56% to ?10.20 lakhs for the financial year 2024-25 from ?40.07 lakhs for the financial year 2023-24. The decrease was primarily due to repayment of loans, resulting in lower interest expenses during the year, as well as a significant reduction in interest on car loan and overall borrowing costs.
Depreciation and Amortization Expense
Depreciation has decreased by ?11.83 lakhs, i.e. 21.75% to ?42.57 lakhs in the financial year ended March 31,2025 from ?54.40 lakhs in the financial year ended March 31, 2024. The decrease is primarily attributable to the absence of significant additions to Property, Plant and Equipment during the financial year ended March 31,2025 and depreciation has been computed based on the Written Down Value method.
Other Expenses
Our other expenses increased by ?82.93 lakhs, i.e. 161.78% to ?134.19 lakhs for the financial year 2024-25 from ?51.26 lakhs for the financial year 2023-24. The increase was primarily attributable to higher spend on office expenses, business promotion, audit fees, travelling expenses, IT and computer maintenance, CSR activities, and ROC expenses, reflecting expanded business operations and increased compliance requirements during the year.
Profit before extraordinary and exceptional
Profit before extraordinary and exceptional items increased by ?880.75 lakhs, i.e. 118.49%, to ?1,624.42 lakhs for the financial year 2024-25 as compared to ?743.67 lakhs for the financial year 2023-24.
Profit before Tax
Profit before tax increased by ?875.27 lakhs, i.e. 117.66%, to ?1,618.94 lakhs for the financial year 2024-25 as compared to ?743.67 lakhs for the financial year 2023-24. The overall improvement in profitability was achieved due to enhanced operational efficiency and higher revenue during the year.
TAX EXPENSES
Current Tax
Our current tax increased by ?233.44 lakhs, i.e. 120.88%, to ?426.65 lakhs for the financial year 2024-25 from ?193.21 lakhs for the financial year 2023-24. The increase was primarily attributable to higher taxable profits resulting from improved operational performance during the year.
Deferred Tax
Our deferred tax increased by ?20.30 lakhs, i.e. 1,549.62%, to ?21.61 lakhs for the financial year 2024-25 from ?1.31 lakhs for the financial year 2023-24. The substantial increase was mainly due to timing differences arising from depreciation methods and employee benefit provisions between book and tax computations.
Profit after Tax
Profit for the year increased by ?664.74 lakhs, i.e. 120.98%, to ?1,213.90 lakhs for the financial year 2024-25 from ?549.16 lakhs for the financial year 2023-24, primarily as a result of improved operational performance and higher revenue during the year.
FINANCIAL YEAR 2023-24 COMPARED WITH THE FINANCIAL YEAR 2022-23 (BASED ON RESTATED FINANCIAL STATEMENTS)
Total Revenues
? Total Income
Our total revenue decreased by ? 254.46 lakhs i.e. 6.48% to ? 3,672.90 lakhs for the financial year 2023-24 from ? 3,927.36 lakhs for the financial year 2022-23 due to the factors described below:
? Revenue from operations
Our revenue from operations decreased by ? 228.28 lakhs i.e. 5.80% to ? 3,656.04 lakhs for the financial year 2023-24 from ? 3,884.32 for the financial year 2022-23. Revenue from operation decreased primarily because of decreased in Professional consultancy as compared to previous financial year. Revenue breakup of the same is as follows: The revenue breakup is as follows:
| Revenue | FY 2023-24 | FY 2022-23 |
| Professional Consultancy | 3,656.04 | 3,884.32 |
| TOTAL | 3,656.04 | 3,884.32 |
Variation in Profit and Loss Account
The operating revenue of the company increased from ?29.14 crores in FY 2021-22 to ?38.84 crores in FY 2022-23, reflecting a strong growth of 33.29% over the previous year. However, during the same period, the net profit declined from ?5.26 crores to ?2.77 crores, representing a 47% decrease.
This drop in profitability was primarily due to the company?s strategic decision to initiate its business expansion and implement a structured growth plan in FY 2022-23. As part of this strategy, the company significantly ramped up its hiring, increasing its employee count from 28 in FY 2021-22 to 56 in FY 2022-23. Consequently, employee benefit expenses rose from ?2.30 crores in FY 2021-22 to ?7.38 crores in FY 2022-23. In percentage terms, this employee cost grew from 9% of operating revenue in FY 2021-22 to 19% in FY 2022-23.
? Other Income
The other income decreased by ? 26.18 lakhs i.e. 60.82% to ? 16.86 lakhs for the financial Year 2023-24 from ? 43.04 lakhs for the financial year 2022-23. The decrease was mainly due to decrease in the Sundry balance written off and Misc. Income.
EXPENDITURE
? Total Expenses
Total Expenses decreased by ? 617.14 lakhs i.e. 17.40% to ? 2,929.23 lakhs in the financial year ended March 31, 2024, from ? 3,546.37 lakhs in the financial year ended March 31,2023. Our total expenses decreased due to the factors described below:
? Consultancy Charges
The Consultancy Charges decreased by ? 938.38 lakhs i.e. 35.28% to ? 1,721.12 lakhs in the financial year ended March 31, 2024 from ? 2,659.49 lakhs in the financial year ended March 31, 2023. Consultancy Charges decreased primarily because of decreased in Professional Expenses as compared to previous financial year. The operating expense breakup is as follows:
| Revenue | FY 2023-24 | FY 2022-23 |
| Consultancy Charges | - | 9.48 |
| Document Charges | - | - |
| Incurrence | - | - |
| Professional Expense | 1,721.12 | 2,650.01 |
| Total | 1,721.12 | 2,659.49 |
? Employee Benefit Expenses
Employee Benefit Expenses increased by ? 325.83 lakhs i.e. 44.24% to ? 1,062.39 lakhs in the financial year ended March 31, 2024 from ? 736.55 lakhs in the financial year ended March 31,2023. Employee benefit expenses were increase due to increase in salaries, wages & other emoluments, contribution to various statutory funds, Director?s remuneration and staff welfare expenses. These expenses were increased because of increase in employee heads.
? Finance Cost
Finance cost increased by ? 5.91 lakhs i.e. 17.31% to ? 40.07 lakhs in the financial year ended March 31, 2024 from ? 34.15 lakhs in the financial year ended March 31, 2023. Finance Cost primarily increased due to increase in the interest expenses as the borrowings increases.
? Depreciation
Depreciation has decreased by ? 6.23 lakhs i.e. 10.28% to ? 54.40 lakhs in the financial year ended March 31, 2024 from ? 60.63 lakhs in the financial year ended March 31,2023. Depreciation has decreased due to there is no significant increase in Property, Plant and Equipment during the financial year ended March 31, 2024 and depreciation is calculated on the basis of Written- Down Value Basis method
? Other Expenses
Other Expenses decreased by ? 4.29 lakhs i.e. 7.72% to ? 51.26 lakhs in the financial year ended March 31,2024 from ? 55.54 lakhs in the financial year ended March 31,2023. Other Expenses has decreased mainly due to fall in the interest on income tax expense and foreign exchange rate difference expense.
? Profit before Exceptional Items and Tax
Profit before Exceptional Items and Tax has increased by ? 362.69 lakhs i.e. 95.20% to ? 743.68 lakhs in the financial year ended March 31, 2024 from ? 380.99 lakhs in the financial year ended March 31, 2023. Profit before Exceptional Items and Tax has increased due to comparative decrease in total expense than total revenue.
? Profit before Tax
Profit before tax has increased by ? 362.69 lakhs i.e. 95.20% to ? 743.68 lakhs in the financial year ended March 31, 2024 from ? 380.99 lakhs in the financial year ended March 31, 2023. The increase was due to a comparative decrease in total expenses relative to total revenue. This is because there was unbilled revenue in FY 2022-23, on which we booked expenses in that period. However, the revenue was billed in FY 2023-24, leading to a comparative decrease in consultancy expenses in FY 2023-24.
? Tax Expenses
Our total tax expense was increased by ? 90.86 lakhs i.e. 87.64% to ? 194.52 lakhs in the financial year ended March 31, 2024 from ? 103.66 lakhs in the financial year ended March 31, 2023. Total tax expense for the year ended March 31, 2024, stood at ? 194.52 lakhs out of which current year tax is ? 193.21 lakhs and Deferred Tax Liability is ? 1.31 lakhs, the Total Tax expense being 5.30% of the Total Income. Total tax expense was increased due to increase in Net Profit before Tax.
? Net Profit after Tax
Net Profit after Tax has increased by ? 271.84 lakhs i.e. 98.02% to ? 549.16 lakhs in the financial year ended March 31, 2024 from ? 277.32 lakhs in the financial year ended March 31, 2023. The increase was due to a comparative decrease in total expenses relative to total revenue. This is because there was unbilled revenue in FY 2022-23, on which we booked expenses in that period. However, the revenue was billed in FY 2023-24, leading to a comparative decrease in consultancy expenses in FY 2023-24.
The operating revenue of the company for FY 2022-23 was ?38.84 crores, while for FY 2023-24 it stood at ?36.56 crores, reflecting a marginal decrease of approximately 6%. However, the net profit for the same period increased significantly—from ?2.77 crores in FY 2022-23 to ?5.50 crores in FY 2023-24—marking a 98% growth.
This sharp increase in profitability is primarily attributed to the recognition of revenue in FY 2023-24 for services that were actually delivered in FY 2022-23. The delay in revenue recognition was due to the late approval of timesheets by one of the clients. While the costs associated with these services were accounted for in FY 2022-23, the corresponding revenue of approximately ?4 crores was booked in FY 2023-24, thereby positively impacting the profit margin for that year.
FISCAL YEAR ENDED MARCH 31, 2023, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2022 (BASED ON RESTATED FINANCIAL STATEMENTS)
? Total Revenue
Our total revenue increased by ? 989.05 lakhs i.e. 33.66% to ? 3,927.36 lakhs for the financial year 2022-23 from ? 2,938.32 lakhs for the financial year 2022-23 due to the factors described below:
? Revenue from operations
Our revenue from operations increased by ? 970.01 lakhs i.e. 33.28% to ? 3,884.32 lakhs for the financial year 2022-23 from ? 2,914.31 for the financial year 2021-22. Revenue from operation increased primarily because of increase in Professional consultancy as compared to previous financial year. Revenue breakup of the same is as follows: The revenue breakup is as follows:
| Revenue | FY 2023-24 | FY 2022-23 |
| Professional Consultancy | 3,884.32 | 2,914.31 |
| TOTAL | 3,884.32 | 2,914.31 |
? Other Income
The other income increased by ? 19.04 lakhs i.e. 79.30% to ? 43.04 lakhs for the financial Year 2022-23 from ? 24.01 lakhs for the financial year 2021-22. The increase was mainly due to increase in the Miscellaneous Income and Sundry Balance Written Off.
Total Expenses
? Total Expenses
Total Expenses increased by ? 1,358.79 lakhs i.e. 62.11% to ? 3,546.37 lakhs in the financial year ended March 31, 2023, from ? 2,187.58 lakhs in the financial year ended March 31,2022. Our total expenses increased due to the factors described below:
? Consultancy Charges
The Consultancy Charges increased by ? 809.94 lakhs i.e. 43.79% to ? 2,659.49 lakhs in the financial year ended March 31, 2023 from ? 1,849.55 lakhs in the financial year ended March 31, 2022. Consultancy Charges increased primarily because of increase in Professional Expenses as compared to previous financial year. The operating expense breakup is as follows:
| Revenue | FY 2022-23 | FY 2021-22 |
| Consultancy Charges | 9.48 | 9.93 |
| Document Charges | - | 0.23 |
| Incurrence | - | 3.71 |
| Professional Expense | 2,650.01 | 1,835.68 |
| Total | 2,659.49 | 1,849.55 |
? Employee Benefit Expenses
Employee Benefit Expenses increased by ? 506.32 lakhs i.e. 219.92% to ? 736.55 lakhs in the financial year ended March 31, 2023 from ? 23 0.23 lakhs in the financial year ended March 31,2022. Employee benefit expenses were increase due to increase in salaries, wages & other emoluments, contribution to various statutory funds, Director?s remuneration and staff welfare expenses. These expenses were increased because of increase in employee heads.
? Finance Cost
Finance cost increased by ? 15.92 lakhs i.e. 87.38% to ? 34.15 lakhs in the financial year ended March 31, 2023 from ? 18.23 lakhs in the financial year ended March 31, 2022. Finance Cost primarily increased due to increase in the interest expenses as the borrowings increases.
? Depreciation
Depreciation has increased by ? 2.28 lakhs i.e. 3.91% to ? 60.63 lakhs in the financial year ended March 31, 2023 from ? 58.35 lakhs in the financial year ended March 31, 2022. Depreciation has been increased because of increase in PPE in the financial year ended March 31, 2023.
? Other Expenses
Other Expenses increased by ? 24.32 lakhs i.e. 77.90% to ? 55.54 lakhs in the financial year ended March 31, 2023 from ? 31.22 lakhs in the financial year ended March 31,2022. Other Expenses has increased mainly due to increase in the Foreign exchange rate difference.
? Profit before Exceptional Items and Tax
Profit before Exceptional Items and Tax has decreased by ? 369.75 lakhs i.e. 49.25% to ? 380.99 lakhs in the financial year ended March 31,2023 from ? 750.74 lakhs in the financial year ended March 31,2022. Profit before Exceptional Items and Tax has decreased due to higher comparative increase in total expenses than total revenue.
? Profit Before Tax
Profit before tax has decreased by ? 369.75 lakhs i.e. 49.25% to ? 380.99 lakhs in the financial year ended March 31, 2023 from ? 750.74 lakhs in the financial year ended March 31, 2022. Profit before Tax has decreased due to higher comparative increase in total expenses than total revenue.
? Tax Expense
Our total tax expense was decreased by ? 121.00 lakhs i.e. 53.86% to ? 103.66 lakhs in the financial year ended March 31, 2023 from ? 224.67 lakhs in the financial year ended March 31, 2022. Total Tax Expense for the year ended March 31, 2023, stood at ? 103.66 lakhs out of which current year tax is ? 104.13 lakhs and Deferred Tax Asset is ? 0.47 lakhs, the Total Tax expense being 2.64% of the Total Income. Total tax expense was decreased due to decrease in Net Profit before Tax.
? Net Profit After Tax
Net Profit after Tax has decreased by ? 248.75 lakhs i.e. 47.28% to ? 277.32 lakhs in the financial year ended March 31, 2023 from ? 526.07 lakhs in the financial year ended March 31, 2022. The decreased was due to higher comparative increase in total expenses than total revenue.
RELATED PARTY TRANSACTIONS
Related party transactions with certain of our Promoters, directors and their entities and relatives primarily relate to Director?s Remuneration, Salary & Wages, Loan taken and repaid, and Rent of Office. For further details of related parties kindly refer chapter titled "Restated Financial Information" beginning on page F-1 to F-33 of this Red Herring Prospectus.
INFORMATION REQUIRED AS PER ITEM (II) (C) (IV) OF PART A OF SCHEDULE VI TO THE SEBI REGULATIONS:
1. Unusual or infrequent events or transactions
Except as described in this Red Herring Prospectus, during the periods under review there have been no transactions or events, which in our best judgment, would be considered unusual or infrequent.
2. Significant economic changes that materially affected or are likely to affect income from continuing operations
Other than as described in the section titled Risk Factors beginning on page 27 of this Red Herring Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.
3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations
Other than as described in this Red Herring Prospectus, particularly in the sections Risk Factors and Management?s Discussion and Analysis of Financial Condition and Results of Operations on pages 27 and 177, respectively, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income from continuing operations.
4. Income and Sales on account of major product/main activities
Income and sales of our Company on account of major activities derives from Sales of Products and Supply of Services in Water Supply & Management Industry.
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 can be indirectly impacted by an increase in employees benefit costs as the company require more employee in future.
6. Future relationship between Costs and Income
Our Company?s future costs and revenues will be determined by competition, demand/supply situation, Indian/ State Government Policies, foreign exchange rates and interest rates quoted by banks & others.
7. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices.
Increases in our revenues are by and large linked to increases in the volume of business.
8. Total turnover of each major industry segment in which the issuer company operates.
The Company is operating in Water Supply & Management Industry. Relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 110 of this Red Herring Prospectus.
9. Status of any publicly announced new products or business segments.
Our Company has not announced any new services and product and segment / scheme, other than disclosure in this Red Herring Prospectus.
10. The extent to which the business is seasonal
Our business is not seasonal in nature.
11. Competitive Conditions
We face competition from existing and potential competitors which is common for any business. Over a period of time, we have developed certain competitive strengths which have been discussed in section titled Our Business on page 118 of this Red Herring Prospectus.
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