P S Raj Steels Ltd Management Discussions

You should read the following discussion in conjunction with our restated consolidated financial statements and restated standalone financial statement ("restated financials statements") attached in the chapter titled "Financial Information of the Company" beginning on page 231 You should also read the section titled "Risk Factors" on page 26 and the section titled "Forward Looking Statements" on page 16, which discusses a number of factors and contingencies that could affect our financial condition and results of operations. The following discussion relates to us, and, unless otherwise stated or the context requires otherwise, is based on our Restated financial Statements.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditor dated September 02, 2024 which is included in this Draft Red Herring Prospectus under "Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelve-month period ended March 31 of that year.

BUSINESS OVERVIEW

Our Company was originally incorporated as ‘P S Raj Steels Private Limited as a private limited company under the Companies Act, 1956 on November 09, 2004 pursuant to a Certificate of Incorporation bearing CIN U27109HR2004PTC035523 issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana. Thereafter, our Company was converted into a public limited company from a private limited company pursuant to a special resolution passed by the shareholders of our Company on May 17, 2024 consequent to which the name of our Company changed from ‘P S Raj Steels Private Limited to ‘P S Raj Steels Limited and a fresh Certificate of Incorporation bearing no. U27109HR2004PLC035523 was issued by the Registrar of Companies, NCT of Delhi and Haryana ("RoC") on August 06, 2024.

For further details on the change in the name and the registered office of our Company, see "Our History and Certain Other Corporate Matters" beginning on page 190.

We are a one of the growing & leading manufacturers & supplier of Stainless-Steel Pipes & Tubes in India.

Our product offerings include:

Outer Diameter (OD) Pipes (from inch to 18 inches);

Nominal Bore (NB) Pipes (from 3/8 inch to 18 inches);

Section Pipes (square, rectangular and oval shapes);

Slotted Pipes.

We take pride in offering an extensive array of over 250 standard sizes and providing customized solutions tailored to customer preferences. This makes us one of the manufacturers in India to manufacture such wide range of product sizes. In addition to our core manufacturing operations, as on March 31, 2024 approximately 30% of our revenue comes from trading in Stainless-Steel Coils & Strips, Sheets & Plates, and Bars. For detailed descriptions of our products and their size ranges, please refer to page 165.

Product Applications

Our products serve a wide range of sectors, with 70% used in fabrication and 30% in industrial applications. Key sectors include railways, furniture, households, gate railing, door frames, rice plants, sugar mills, food processing and heat exchanger etc.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

In the opinion of the Board of Directors of our Company, there have not arisen, since the date of the last financial statements disclosed in this Draft Red Herring Prospectus i.e., March 31, 2024, any significant developments or any circumstance that materially or adversely affect or are likely to affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months except as follows:

1. Re-appointment of Mr. Deepak Kumar as Managing Director on April 19, 2024.

2. Re-appointment of Mr. Gaurav Gupta as Whole-time Director on April 19, 2024.

3. Appointment of Ms. Nikita Gupta as Non-executive Director on April 19, 2024.

4. Appointment of Mr. Vinod Kumar as Chief Financial Officer on August 30, 2024.

5. Appointment of Ms. Suman as Company Secretary & Compliance Officer August 30, 2024.

6. Appointment of Mr. Alok Kumar Jain as Independent Director on September 05, 2024.

7. Appointment of Mr. Dinesh Vinayak as Independent Director on September 05, 2024.

8. Appointment of Mr. Raj Kumar Dewan as Independent Director on September 05, 2024.

9. Constitution of Audit Committee, Stakeholders Relationship Committee & Nomination and Remuneration Committee on September 05, 2024.

10. A Charge is created by way of hypothecation with the HDFC Bank Limited having Charge Id 100928481 on May 27, 2024 whereby the Company was granted a loan facility of Rs. 25,00,000/- for the purpose of meeting cost of acquiring a motor vehicle.

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 26. Our results of operations and financial conditions are affected by numerous factors including the following:

Important factors that could cause actual results to differ materially from our expectations include, among others:

Increased competition in Steel and Allied Products Industry and allied products.

Fluctuations in operating costs;

Our failure to keep pace with rapid changes in technology;

Our ability to meet our capital expenditure requirements;

Our dependence on our key personnel, including our Directors and senior management;

Our ability to successfully implement our business strategy and plans;

General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies;

Changes in political and social conditions in India, the monetary and interest rate policies of India and other countries;

Changes in government policies and regulatory actions that apply to or affect our business;

Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

The performance of the financial markets in India and globally;

The occurrence of natural disasters or calamities;

Other factors beyond our control;

Our ability to manage risks that arise from these factors.

DISCUSSION ON RESULT OF OPERATION

The following discussion on results of operations should be read in conjunction with the restated financial results of our Company for the year ended March 31, 2024, 2023 and 2022.

Principal Components of Statement of Profit and Loss

Income

Our total income comprises revenue from operations including other operating income & other income as mentioned below:

Revenue from Operations

Our revenue from operations primarily includes sale of S S Sheet and Coils and S S Pipes and Tubes. Other Operating income include income from job work income and income from other services such as organising product exhibitions for our dealers in various cities. Other Income mainly includes interest earned on delayed payment from customer and interest earned on security deposit.

Expenses

Our total expenses include the below mentioned expenses:

Cost of Revenue Operations

The Cost of Material Consumed primarily includes expenses related to purchases of raw material & other related goods for manufacturing finished good

Purchase Stock in Trade.

The Purchase Stock in Trade primarily includes expenses related to purchases of raw material exclusively for trading purpose.

Changes in Inventories (Finished goods & Work-in-Process)

Changes in Inventories includes the finished goods and work-in-progress at the beginning of the year and finished goods and work-in-progress at the end of the year.

Employee benefit expenses

Our employee benefit expense primarily includes salaries and staff welfare expenses, Contribution to provident and other funds, directors remuneration and perquisites.

Finance Cost

Our finance costs primarily include interest, other borrowing cost and bank charges.

Depreciation and Amortization Expense

Our depreciation and amortization primarily include depreciation of plant and equipment, computer and office equipment.

Other Expenses

Our other expenses primarily include expenditure incurred on Job Work Expenses, Power & Fuel, Commercial Discounts, Freight Outward, Rent, Salary & Wages (Factory), Travelling & Conveyance, Sales & Promotion Expenses & Miscellaneous expenses.

Tax Expense

Our tax expenses primarily include current tax, deferred tax and adjustment for tax of earlier years.

Results of Operations based on Restated Standalone Financial Statement

The following table sets forth select financial data from our restated statement of profit and loss & the components of which are also expressed as a percentage of total income.

(Rs. in Lakhs)

Particulars	For the year ended 31st March 2024	% of Total Income	For the year ended 31st March 2023	% of Total Income	For the year ended 31st March 2022	% of Total Income
I) Incomes
Revenue from Operations	29,774.93	100.00%	22,542.65	99.99%	17,971.82	99.90%
Other Income	1.46	Negligible	1.63	0.01%	17.57	0.10%
II) Total revenue	29,776.39	100.00%	22,544.28	100.00%	17,989.39	100.00%
III) Expenses
Cost of Revenue Operations	18,479.65	62.06%	19,386.54	85.99%	16,123.95	89.63%
Purchase Stock in Trade	8,768.60	29.45%	2,236.73	9.92%	531.37	2.95%
Changes in inventories of Finished goods, work-in- progress and others	472.78	1.59%	-636.44	-2.82%	-139.33	-0.77%
Employee benefit expenses	136.19	0.46%	104.97	0.47%	137.6	0.76%
Finance costs	152.17	0.51%	127.85	0.57%	121.91	0.68%
Depreciation and amortization expense	82.41	0.28%	80.32	0.36%	94.02	0.52%
Other expenses	837.61	2.81%	756.13	3.35%	647.5	3.60%
Total Expenses	28,929.41	97.16%	22,056.09	97.83%	17,517.02	97.37%
Profit Before Tax	846.98	2.84%	488.19	2.17%	472.37	2.63%
Tax Expense
Current Tax	216.89	0.73%	127.78	0.57%	125.69	0.70%
Deferred Tax	-6.2	-0.02%	-4.78	-0.02%	-10.4	-0.06%
Total Taxes	210.69	0.71%	123	0.55%	115.29	0.64%
Profit for the Period	636.29	2.14%	365.19	1.62%	357.08	1.98%

Income

The table below sets forth details in relation to our revenue for Fiscal 2024 and Fiscal 2023:

Particulars	Fiscal 2024	Fiscal 2023	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Sale of products (a)
-Finished Goods	20,899.35	20,278.28	3.06%
-Trading Goods	8,866.13	2,260.47	292.23%
Other Operating Income (b)
-Job Work Income	0.96	0.69	39.13%
-Other Services	8.49	3.21	164.49%
Other Income (c)	1.46	1.63	-10.43%
Total Revenue (a+b+c)	29,776.39	22,544.28	32.08%

The Company earns primarily earns its revenue from sale of product i.e. S S Pipes and Tubes and trading of raw material i.e. S S Sheet and Coils. The Other operating revenues include revenue from job work and other services. Other Services refer to the income earned through partly reimbursement of expenses by Jindal Stainless Limited on conducting dealer exhibition across the country to push sales.

Our revenue from operations increased by Rs. 7,232.28 lakhs or 32.08% to Rs. 29,774.93 lakhs for Fiscal 2024 as compared to Rs. 22,542.65 lakhs for Fiscal 2023. This increase in revenue from operations was primarily due to increase in trading revenue.

Our revenue from sale of products i.e. S S Pipes and Tubes increased by Rs. 612.44 lakhs or 3.02% to Rs. 20,890.72 lakhs for Fiscal 2024 as compared to Rs. 20,278.28 lakhs for Fiscal 2023. The increase in the sale was also due to growing domestic market.

The trading revenue i.e. sale of raw material (S S Sheet and Coils) increased by Rs. 6,614.29 lakhs or 292.61% to Rs. 8,874.76 lakhs for Fiscal 2024 from Rs. 2,260.47 lakhs in Fiscal 2023. The increase trading revenue is primarily attributable to addition of new customers and large sale made to one of the related parties/ group entities i.e. Steelmint Industries Private Limited. The sales to Steelmint Industries Private Limited increased by Rs. 4,523.75 lakh or 1092.02% to Rs. 4,938.01 lakh in F.Y. 2024 as compared to Rs. 414.26 lakh in F.Y. 2023.

Revenue from other operating income includes job work income and income from other services. Our Revenue from other operating income increased by Rs. 5.55 lakhs or 142.31% to Rs. 9.45 lakhs for Fiscal 2024 as compared to Rs. 3.90 lakhs for Fiscal 2023, which primarily attributable in increase in revenue from Other Services as shown above in the table.

Other income marginally decreased by Rs. 0.17 lakhs or 10.15% to Rs. 1.46 lakhs for Fiscal 2024 compared from Rs. 1.63 lakhs for Fiscal 2023. This decrease in other income was primarily due to decrease in interest income on delayed payment by customer and security deposit.

Expenses

The table below sets forth details in relation to our total expenses for Fiscal 2024 compared to our total expenses for Fiscal 2023:

Particulars	Fiscal 2024	Fiscal 2023	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Cost of Material Consumed	18,479.65	19,386.54	(4.68%)
Purchase Stock in Trade	8,768.60	2,236.73	292.03%
Changes in Inventories of Finished goods and Work- in-process	472.78	(636.44)	(174.29%)
Employee Benefits Expense	136.19	104.97	29.74%
Finance Cost	152.17	127.85	19.02%
Depreciation	82.41	80.32	2.60%
Other Expenses	837.61	756.13	10.78%
Total Expenses	28,929.41	22,056.09	31.16%

Our total expenses increased by Rs. 6,873.32 lakhs or 31.16% to Rs. 28,929.41lakhs for Fiscal 2024 compared to Rs. 22,056.09 lakhs for Fiscal 2023. This was primarily attributable to:

Cost of Material Consumed

The table below sets forth details in relation to our cost of materials consumed for the periods indicated below:

Particulars	Fiscal 2024	Fiscal 2023	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Opening Stock	3,185.85	1,372.58	132.11%
Add: Purchases	16,675.69	21,199.81	(21.34%)
Less: Closing Stock	1,381.90	3,185.85	(56.62%)
Cost of Material Consumed	18,479.64	19,386.54	(4.68%)

Our cost of materials consumed decreased by Rs. 906.89 lakhs or 4.68% to Rs. 18,479.65 lakhs for Fiscal 2024 compared to Rs. 19,386.54 lakhs for Fiscal 2023. However, the revenue from sale of goods increased by Rs. 612.44 lakhs or 3.02% to Rs. 20,890.72 lakhs for Fiscal 2024 as compared to Rs. 20,278.28 lakhs for Fiscal 2023. The decrease in Cost of Material Consumed is mainly attributable to cooling commodity prices in F.Y. 2024 as compared to F.Y 2023. The moderate commodity prices helped Company to save cost and increase profit margin.

Purchase Stock in Trade

The Purchase Stock in Trade primarily includes expenses related to purchases of raw material exclusively for trading purpose. The Purchase Stock in Trade increased by Rs. 6,531.87 lakhs or 292.03%to Rs. 8,768.60 lakhs for Fiscal 2024 compared to Rs. 2,236.73 lakhs for Fiscal 2023. The increase in Purchase Stock in Trade is in line with the increase in trading revenue.

Change in inventories of finished goods and work-in-progress

The table below sets forth details in relation to changes in inventories for the periods indicated below:

Particulars	Fiscal 2024	Fiscal 2023	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Opening Stock of Finished Goods	1,138.10	391.73	190.53%
Opening Stock of work-in-progress	105.97	215.90	-50.92%
Total (a)	1,244.07	607.63	104.74%
Closing Stock of Finished Goods	753.49	1,138.10	(33.79%)
Closing Stock of work-in-progress	17.81	105.97	(83.19%)
Total (b)	771.30	1,244.07	(38.00%)
Changes in Inventories (a-b)	472.78	(636.44)	(174.29%)

Our inventory level for finished goods in Fiscal 2024 had decreased by Rs. 384.61 lakhs i.e. from Rs. 1,138.10 lakhs in Fiscal 2023 to Rs. 753.49 lakhs in Fiscal 2024. The level of work in progress had decreased by Rs. 88.16 lakhs i.e. from Rs. 105.97 lakhs in Fiscal 2023 to Rs. 17.81 lakhs in Fiscal 2024. Together inventory of Finished Goods and Work-in-progress decreased 38.00% between F.Y. 2024 and F.Y 2023 which is in line with the increase in revenue from operation in the same period.

Employee benefits expense

Our employee benefits expense increased by Rs. 31.22 lakhs or 29.74% to Rs 136.19 lakhs for Fiscal 2024 from Rs. 104.97 lakhs for Fiscal 2023. The increase is primary due to increase in salary to the employees. Further, as a percentage of our revenue from operation, the cost of employee benefit expenses also decreased to 0.46% in Fiscal 2024 from 0.47% in Fiscal 2023.

Other expenses

Our other expenses increased by Rs. 81.48 lakhs or 10.78% to Rs. 837.61 lakhs for Fiscal 2024 as compared to Rs. 756.13 lakhs for Fiscal 2023. This increase was primarily due to increase in Job charges, Insurance expenses, Freight Inward, Freight Outward, Sales & Promotion Expenses and Rent. Further, as a percentage of our revenue from operation, the other expenses also decreased to 2.81% in Fiscal 2024 from 3.35% in Fiscal 2023.

EBITDA

For the reasons described below, our EBITDA increased by Rs. 385.20 lakhs, or 55.32% to Rs. 1,081.56 lakhs for Fiscal 2024 from Rs. 696.36 lakhs for Fiscal 2023.

Finance costs

The table below sets forth details in relation our finance cost for the periods indicated below:

Particulars	Fiscal 2024	Fiscal 2023	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Interest expense on
(i) Bank	148.97	127.86	16.51%
(ii) Others	3.19	-	100.00%
Finance cost	152.17	127.86	19.01%

Our finance costs increased by Rs. 24.31 lakhs or 19.01% to Rs. 152.17 lakhs for Fiscal 2024 compared to Rs. 127.86 lakhs for Fiscal 2023. This increase was primarily due to increase in the interest cost for utilising working capital requirement in F.Y, 2024.

Depreciation and Amortisation Expense

Our depreciation and amortisation expense increased by Rs. 2.09 lakhs or 2.60% to Rs. 82.41 lakhs for Fiscal 2024 compared to Rs. 80.32 lakhs for Fiscal 2023. This increase was due to purchase of plant & machinery amounting to Rs. 55.01 Lakh in F.Y. 2024.

Profit before Tax

Our profit before tax increased by Rs. 358.79 lakhs or 73.49% to Rs. 846.98 lakhs for Fiscal 2024 as compared to Rs. 488.19 lakhs for Fiscal 2023. This increase was on account of increased revenue from operations, cooling raw material cost, cost rationalization and better realizations.

Tax Expenses

Our tax expenses increased by Rs. 87.69 lakhs or 71.29% to Rs. 210.69 lakhs for Fiscal 2024 compared to Rs. 123.00 lakhs for Fiscal 2023. The increase in tax expenses during Fiscal 2023 is mainly on account of increase in current tax by Rs. 89.11 lakhs, or 69.74% to Rs. 216.89 lakhs for Fiscal 2024 from Rs. 127.78 lakhs for Fiscal 2023 The increase in current tax was primarily on account of increase in taxable income for Fiscal 2024.

As a result of the foregoing factors, our profit for the year increased by Rs. 271.10 lakhs or 74.24% to Rs. 636.29 lakhs for Fiscal 2024 compared to Rs. 365.19 lakhs for Fiscal 2023.

The Company recorded growth of 32.08% in revenue from operation between F.Y 2024 and F.Y. 2023.

The Company efforts to rationalize cost and cooling raw material prices have resulted in higher profit margin. Total expenses to revenue from operation was 97.16% in F.Y. 2024 compared to 97.83% in F.Y. 2023.

FISCAL 2023 COMPARED TO FISCAL 2022

Income

The table below sets forth details in relation to our revenue for Fiscal 2023 and Fiscal 2022:

Particulars	Fiscal 2023	Fiscal 2022	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Sale of products (a)
-Finished Goods	20,278.28	17,380.76	16.67%
-Trading of Goods	2,260.47	536.85	321.06%
Other Operating Income (b)
-Job Work Income	0.69	54.21	(98.73%)
-Other Services	3.21	-	100.00%
Other Income (c)	1.62	17.57	(90.78%)
Total Revenue (a+b+c)	22,544.28	17,989.39	25.32%

The Company earns primarily earns its revenue from sale of product i.e. S S Pipes and Tubes and trading of raw material i.e. S S Sheet and Coils. The Other operating revenues include revenue from job work and other services. Other Services refer to the income earned through partly reimbursement of expenses by Jindal Stainless Limited on conducting dealer exhibition across the country to push sales.

Our revenue from operations increased by Rs. 4,570.83 lakhs or 25.43% to Rs. 22,542.65 lakhs for Fiscal 2023 as compared to Rs. 17,971.82 lakhs for Fiscal 2022. This increase in revenue from operations was primarily due to increased sales of our products resulting from a robust growth in domestic demand and increase in trading revenue.

Our revenue from sale of products increased due to increase in sale of S S Pipes and Tubes by Rs. 2897.52 lakhs or 16.67% to Rs. 20,278.28 lakhs for Fiscal 2023 from Rs. 17,380.76 lakhs in Fiscal 2022. The increase in the revenue from sale of product is attributable to the robust domestic demand.

The trading revenue i.e. sale of raw material (S S Sheet and Coils) increased by Rs. 1,723.62 lakhs or 321.06% to Rs. 2,260.47 lakhs for Fiscal 2023 from Rs. 536.85 lakhs in Fiscal 2022. The increase trading revenue is primarily attributable to addition of new customers and sale made to one of the related parties/ group entities i.e. Steelmint Industries Private Limited. The sales to Steelmint Industries Private Limited increased by Rs. 414.26 lakh or 100.00% to Rs. 414.26 lakh in F.Y. 2023 as compared to nil in F.Y. 2022.

Our Revenue from other operating income decreased by Rs. 50.31 lakhs or 92.81% to Rs. 3.90 lakhs for Fiscal 2023 as compared to Rs. 54.21 lakhs for Fiscal 2022, the primary reason for such sharp fall is that the Company has discontinued focus to earn revenue from job work and solely focus to manufacture its core products.

Other income decreased by Rs. 15.95 lakhs or 90.75% to Rs. 1.63 lakhs for Fiscal 2023 compared from Rs. 17.57 lakhs for Fiscal 2022. This decrease in other income was primarily due to onetime gain from disposal of Property, Plant and Equipment od Rs. 15.57 lakhs in F. Y. 2022.

Expenses

The table below sets forth details in relation to our total expenses for Fiscal 2023 compared to our total expenses for Fiscal 2022:

Particulars	Fiscal 2023	Fiscal 2022	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Cost of Material Consumed	19,386.54	16,123.95	20.23%
Purchase Stock in Trade	2,236.73	531.37	320.94%
Changes in Inventories of Finished goods and Work- in-process	(636.44)	(139.33)	356.79%
Employee Benefits Expense	104.97	137.60	-23.71%
Finance Cost	127.85	121.91	4.87%
Depreciation	80.32	94.02	-14.57%
Other Expenses	756.13	647.50	16.78%
Total Expenses	22,056.09	17,517.02	25.91%

Our total expenses increased by Rs. 4,539.08 lakhs or 25.91% to Rs. 22,056.09 lakhs for Fiscal 2023 compared to Rs. 17,517.02 lakhs for Fiscal 2022. This was primarily attributable to:

Cost of Material Consumed

The table below sets forth details in relation to our cost of materials consumed for the periods indicated below:

Particulars	Fiscal 2023	Fiscal 2022	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Opening Stock	1,372.58	1,964.54	-30.13%
Add: Purchases	21,199.81	15,531.99	36.49%
Less: Closing Stock	3,185.85	1,372.58	132.11%
Cost of Material Consumed	19,386.54	16,123.95	20.23%

Our cost of materials consumed increased by Rs. 3,262.59 lakhs or 20.23% to Rs. 19,386.54 lakhs for Fiscal 2022 compared to Rs. 16,123.95 lakhs for Fiscal 2022. This increase in Cost of Material Consumed is primarily due growth in revenue from operations and price fluctuation of the raw material.

Purchase Stock in Trade

The Purchase Stock in Trade primarily includes expenses related to purchases of raw material exclusively for trading purpose. The Purchase Stock in Trade increased by Rs. 1,705.36 lakhs or 320.94% to Rs. 2,236.73 lakhs for Fiscal 2023 compared to Rs. 531.37 lakhs for Fiscal 2022. The increase in Purchase Stock in Trade is in line with the increase in trading revenue.

Change in inventories of finished goods and work-in-progress

The table below sets forth details in relation to changes in inventories for the periods indicated below:

Particulars	Fiscal 2023	Fiscal 2022	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Opening Stock of Finished Goods	391.73	355.48	10.20%
Opening Stock of work-in-progress	215.90	112.82	91.37%
Total (a)	607.63	468.30	29.75%
Closing Stock of Finished Goods	1,138.10	391.73	190.53%
Closing Stock of work-in-progress	105.97	215.90	(50.92)%
Total (b)	1,244.07	607.63	104.74%
Changes in Inventories (a-b)	(636.44)	(139.33)	356.79%

Our inventory level for finished goods in Fiscal 2023 had increased by Rs. 746.37 lakhs i.e. from Rs. 391.73 lakhs in Fiscal 2022 to Rs. 1,138.10 lakhs in Fiscal 2023. The level of work in progress had decreased by Rs.109.93lakhs i.e. from Rs. 215.9 lakhs in Fiscal 2022 to Rs. 105.97 lakhs in Fiscal 2023. The increase in inventory of finished good is mainly due to higher production on account of robust demand.

Employee benefits expense

Our employee benefits expense decreased by Rs. 32.62 lakhs or 23.71% to Rs. 104.97 lakhs for Fiscal 2023 from Rs. 137.60 lakhs for Fiscal 2022. The decrease primary due to decrease in salaries paid to the employees as well as amount incurred on staff welfare also decreased simultaneously.

Other expenses

Our other expenses have increased by Rs. 108.63 lakhs or 16.78% to Rs. 756.13 lakhs for Fiscal 2023 as compared to Rs. 647.50 lakhs for Fiscal 2022. This increase was primarily due to increase in Job work charges, Rent and Commercial Discounts. The Company started giving Commercial discounts from F.Y 2023 which amounted to Rs. 179.10 lakh in F.Y. 2023, however, the Company discontinued Commission on sales from F.Y. 2023 which amounts to Rs. 109.81 lakh in F.Y. 2022. Further, as a percentage of our revenue from operation, the other expenses decreased to 3.35% in Fiscal 2023 from 3.60% in Fiscal 2022.

EBITDA

For the reasons described above, our EBITDA decreased marginally by Rs. 8.05 lakhs, or 1.17% to Rs. 696.36 lakhs for Fiscal 2023 from Rs. 688.30 lakhs for Fiscal 2022.

Finance costs

The table below sets forth details in relation our finance cost for the periods indicated below:

Particulars	Fiscal 2023	Fiscal 2022	%
	(In Lakhs)	(In Lakhs)	Increase/(decrease)
Interest expense on
(i) Bank	127.86	119.23	7.23%
(ii) Others	-	2.68	(100.00%)
Bank Charges	-	-	-
Finance cost	127.86	121.91	4.88%

Our finance costs decreased by Rs. 5.95 lakhs or 4.88% to Rs. 127.86 lakhs for Fiscal 2023 compared to Rs. 121.91 lakhs for Fiscal 2022. This increase in the finance cost is in line with the increase in the total borrowing of the Company.

Depreciation and Amortisation Expense

Our depreciation and amortisation expense decreased by Rs.13.70 lakhs or 14.57% to Rs. 80.32 lakhs for Fiscal 2023 compared to Rs. 94.02 lakhs for Fiscal 2022. The Company had disposed Property, Plant and Equipment amounting to Rs.117.87 lakhs in F.Y 2023 and added Property, Plant and Equipment amounting to Rs. 66.73 lakhs resulting in the net decrease in the Property, Plant and Equipment in F. Y 2023.

Profit before Tax

Our profit before tax has increased by Rs. 15.81 lakhs or 3.35% to Rs. 488.19 lakhs for Fiscal 2023 as compared to Rs. 472.37 lakhs for Fiscal 2023. The marginal increase in the profit before tax is due to higher provision for gratuity made in the F.Y. 2022 and higher cost of raw material.

Tax Expenses

Our tax expenses increased by Rs. 7.71 lakhs or 6.69% to Rs. 123.00 lakhs for Fiscal 2023 compared to Rs. 115.29 lakhs for Fiscal 2022. The increase in tax expenses during Fiscal 2023 is mainly on account of increase in current tax by Rs. 2.09 lakhs, or 1.66% to Rs. 127.78 lakhs for Fiscal 2023 from Rs. 125.69 lakhs for Fiscal 2022. The increase in current tax was primarily on account of increase in taxable income for Fiscal 2023.

Profit for the Year

As a result of the foregoing factors, our profit for the year marginally increased by Rs. 8.10 lakhs or 2.27% to Rs. 365.19 lakhs for Fiscal 2023 compared to Rs. 357.08 lakhs for Fiscal 2022.

On restatement of financials, the Company accounted for provisions of gratuity which were not provided in the audited financial statements. The same has been disclosed below

(Rs. in lakhs)

Particulars	For the year ended March 31,
	2024	2023	2022
Profit / (Loss) after Tax (as per audited financial statements) (i)	633.67	370.84	371.68
Add/(Less): Adjustments on account of -
Provision for Gratuity	-	7.55	19.52
Tax Adjustments on above	(2.62)	(1.90)	(4.91)
Previous period Tax adjustments	-	-	-
Total Adjustments (ii)	(2.62)	5.65	14.60
Restated Profit/ (Loss) (i+ii+iii)	636.29	365.19	357.08

The increase in Profit After Tax (PAT) by 2.27% is primarily due to the higher provisions made for gratuity in the financial year (FY) 2022, which amounted to Rs. 19.52 lakh, compared to Rs. 7.55 lakh booked in FY 2023. When the provision for gratuity is accounted for, the base for comparison is reduced, making the growth in PAT appear higher. However, if provision for gratuity and the tax thereon is not considered, our profit for the year decreased by Rs. 0.84 lakhs or 0.23% to Rs. 370.84 lakhs for Fiscal 2023 compared to Rs. 371.68 lakhs for Fiscal 2022. The decrease in profit is primarily attributable to higher cost of raw material. The cost of goods sold as a percent of revenue was 93.10% in F.Y. 2023 as compared to 91.90% in F.Y. 2022. Further, the profit margin for F.Y. 2023 were 1.62% as compare to 1.99% in F.Y. 2022 .

CASH FLOW BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS

(In Lakhs)

Particulars	FISCAL
	2024	2023	2022
Net cash generated from operating activities	487.30	256.18	41.70
Net cash (used in)/generated from investing activities	(61.58)	(94.29)	97.15
Net cash (used in)/generated from financing activities	(423.99)	(162.67)	(135.16)
Net change in Cash and cash equivalents at the end of the year	1.73	(0.79)	3.69

For further details, kindly refer chapter titled "Financial Statement" on page 231.

Ratios	March 31, 2024	March 31, 2023	March 31, 2022
Current Ratio	2.28	1.44	1.79
Debt-equity ratio	0.58	0.74	0.83
Debt service coverage ratio	0.56	0.34	0.35
Return on Equity	20.79%	15.03%	17.29%
Working capital turnover ratio	11.25	10.64	9.92
Net profit margin (%)	2.14%	1.62%	1.99%
Return on capital employed	20.64%	14.56%	15.75%

Methodology:

1. Current Ratio = Current Asset / Current Liability 2. Debt-Equity Ratio = Total Debt / Total Equity

3. Debt Service Coverage Ratio = EBITDA / (Interest + Long term Borrowing Repayment) 4. Return on Equity Ratio = Profit After Tax / Total Equity

8. Working Capital Turnover Ratio = Revenue from Operations / (Current Asset - Current Liability) 9. Net Profit Ratio = Profit After Tax / Revenue 10. Return on Capital Employed= EBIT/ (Ner Worth + Total Debt)

OTHER MATTERS

1. Unusual or infrequent events or transactions

Except as described in this Draft 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 26, to our knowledge there are no known significant economic changes that materially affected or are likely to affect income from continuing operations.

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

Other than as described in the section titled Risk Factors beginning on page 26, to our knowledge there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

4. Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by multiple factors such as industry preferences, economic activity, government policies and demand of our products.

5. The extent to which material increase/decrease in net revenue are due to increase/decrease in sale of our products.

Increase/Decrease in revenues are by and large linked to increase/decrease in volume of business activities carried out by the Company.

6. Total turnover of each major industry segment in which the issuer company operates.

The Company is operating in Steel and Allied Products Industry and relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 122.

7. Status of any publicly announced new products or business segments

Our Company has not announced any new products or segment, other than through this Draft Red Herring Prospectus.

8. The extent to which the business is seasonal

Our Company business is not seasonal in nature.

9. Any significant dependence on a single or few clients.

Our business is dependent on few clients. Our top five customers contributed 43.10%, 42.56%, and 33.06% of total revenue from operations for F.Y. 2023-24, 2022-23 and 2021-22 respectively.

10. Competitive Conditions

We face competition from existing and potential competitors which is common for any business. We have, over a period of time, developed certain competitive strengths which have been discussed in section titled "Our Business" on page 155.