You should read the following discussion of our financial condition and results of operations in conjunction with our Restated Consolidated Financial Information included in this Draft Red Herring Prospectus as of and for the years ended March 31, 2025, 2024 and 2023, including the related notes, schedules and annexures on page 307. Our Restated Consolidated Financial Information have been derived from our audited financial statements and restated in accordance with the relevant provisions of the Ind AS, Section 26 of the Companies Act, 2013, the SEBI ICDR Regulations and the Guidance Note. Ind AS differs in certain material respects from IFRS and U.S. GAAP. For further details see "Risk Factors Internal Risk Factors Our Company has prepared financial statements under Indian Accounting Standards. Certain differences exist between Indian Accounting Standards and other accounting guidance" on page 69.
This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with respect to future events and financial performance. Actual results may differ from those anticipated in these forward-looking statements as a result of factors such as those set forth under "Forward-looking Statements" and "Risk Factors" beginning on pages 29 and 31, respectively.
We have included certain non-GAAP financial measures and other performance indicators relating to our financial performance and business in this Draft Red Herring Prospectus, each of which are supplemental measures of our performance and liquidity and are not required by, or presented in accordance with Ind AS, Indian GAAP, IFRS or U.S. GAAP. Further, such measures and indicators are not defined under Ind AS, IFRS or U.S. GAAP, and therefore, should not be viewed as substitutes for performance, liquidity or profitability measures under Ind AS, IFRS or U.S. GAAP. The manner in which such operational and financial performance indicators are calculated and presented, and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions. Investors are accordingly cautioned against placing undue reliance on such information in making an investment decision and should consult their own advisors and evaluate such information in the context of the Restated Consolidated Financial Information and other information relating to our business and operations included in this Draft Red Herring Prospectus.
Unless otherwise indicated or the context otherwise requires, industry and market data used in this section have been extracted from the report titled "Indian Renewable Energy Report" dated August 2025 prepared and issued by Crisil Intelligence (formerly known as CRISIL Market Intelligence & Analytics), a division of Crisil Limited (the "CRISIL Report") and the report titled
"Industry Report on Standby Power and DG Market" dated August, 2025 prepared and issued by Frost & Sullivan (India) Private Limited ("F&S Report"), which have been commissioned by our Company exclusively in connection with the Offer. CRISIL and F&S were appointed pursuant to engagement letters entered into with our Company dated March 25, 2025 and April 2, 2025, respectively. Copies of the CRISIL Report and the F&S Report are available on the website of our Company at https://www.powericaltd.com/investor-relations from the date of the Red Herring Prospectus until the Bid/ Offer Closing Date. The CRISIL Report and F&S Report are not a recommendation to invest or disinvest in any company covered in the reports. Prospective investors are advised not to unduly rely on the CRISIL Report or F&S Report. For further details and risks in relation to the CRISIL Report and the F&S Report, see "Risk Factors Internal Risk Factors Industry information included in this Draft Red Herring Prospectus has been derived from industry reports commissioned by us, and paid for by us for such purpose" on page 67.
Our fiscal year ends on March 31 of each year, and all references to a particular Fiscal are to the 12 months ended March 31 of that year. Unless otherwise indicated, or if the context otherwise requires, in this section, references to "the Company" or "our Company" are to Powerica Limited on a standalone basis, and references to "we", "us", "our" and "Powerica Group" are to Powerica Limited, its Subsidiaries and Associate on a consolidated basis.
OVERVIEW
For details in relation to our business overview, competitive strengths, business strategies and business operations, please see "Our Business" beginning on page 229.
PRESENTATION OF FINANCIAL INFORMATION
The restated financial information of our Company together with our Subsidiaries and its associate (the "Group") comprise of Restated Consolidated Statement of Assets and Liabilities as at March 31, 2025, March 31, 2024 and March 31, 2023, the Restated Consolidated Statement of Profit and Loss (including other comprehensive income), the Restated Consolidated Statement of Cash Flows and the Restated Consolidated Statement of Changes in Equity for the years ended March 31, 2025, March 31, 2024 and March 31, 2023 and the summary of material accounting policies and explanatory notes (collectively, the "Restated Consolidated Financial Information").
The Restated Financial Information have been compiled from the audited financial statements of our Group as at and for the years ended March 31, 2025, March 31, 2024 and March 31, 2023, prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Our results of operations and financial condition are affected by a number of important factors including:
Demand for power in India
Changes in the price of oil, coal and other energy sources as well as the availability and reliability of grid-generated power affects the demand for power and our DG sets. As demand for grid-generated power has increased, we have experienced corresponding increases in demand for our DG sets. We believe that DG sets offer energy availability and relative mobility allowing for relatively easier deployment at customer sites. However, demand for our DG sets may be affected by changes in the price of diesel and the emergence of alternative fuel generator sets, such as biodiesel generator sets. Similarly, we may experience a decline in demand for our MSLG generator sets if the price of oil or cheaper heavy fuel grades such as heavy fuel oil, low sulphur heavy stock and light diesel oil were to increase. In addition, increased levels and greater reliability of grid-generated power may also affect demand for our generator sets. With respect to our Wind Power Business, the relative attractiveness and demand for wind power can be affected by the cost of electricity generated by conventional resources, such as oil, coal and other fossil fuels, and other renewable sources such as solar, biomass and hydroelectric power. Consequently, any adverse change in the demand for power may affect our results of operations and financial condition.
Our relationship with Cummins India and Hyundai
Since our inception in 1984, we have formed a long standing relationship with Cummins, as one of their OEMs, by offering diesel generator solutions and have maintained a relationship with them for over four decades. We supply a wide range of DG sets that utilise Cummins engines and alternators, under a non-exclusive General Supply Agreement dated June 11, 2025 with Cummins India. In Fiscal 2025, Cummins India was one of the leading engine manufacturers in the MHP and HHP ranges of DG sets in India (Source: F&S Report).
As an OEM, we leverage Cummins extensive range of engines to design and develop DG sets for a variety of applications across multiple industries. Our collaboration with Cummins extends to integration and testing of DG products in response to ongoing technological and regulatory developments, particularly those concerning environmental and emission standards. Our ability to meet customer demand and maintain profitability is influenced by Cummins production capacity, supply terms, and pricing decisions, since these factors directly affect the pricing and availability of our DG sets. Additionally, in our MSLG business, we have established a non-exclusive association with Hyundai since 2014, which strengthens our presence in both primary power and emergency or high base load applications for continuous process industries. All Hyundai-sourced MSLG enquiries for India are channelled through us, positioning us to capture ongoing growth opportunities in the segment. For further details of our relationship with Cummins and Hyundai, see "Our Business Strengths Collaborations and Alliances with Established Industry Players" on page 234.
While we continue to diversify our revenue streams, the performance of our Generator Set Business division and the demand for Cummins and Hyundai products in India continue to have a material impact on our operational and financial results.
Impact of weather and seasonality on our operations
Weather conditions can have a significant effect on our Wind Power Business. The profitability of our wind power assets is directly correlated to wind conditions at our asset sites. Variations in wind conditions occur because of fluctuations in wind currents on a daily, monthly and seasonal basis and, over the long-term, as a result of more general climate changes. In particular, wind conditions are generally tied to the monsoon season in India and are affected by the strength of each particular monsoon season. During the period from March to September, which includes the monsoon season in several parts of India, we generate a majority of our annual production during this period. Weather patterns are likely to have an influence on wind patterns in the states in which we operate and, consequently on the resources generated by our wind power assets.
Achieving success in renewable energy project auctions
We participate in government-run auctions to secure new renewable energy projects, adopting a selective and strategic approach to bidding. Our decisions are based on a thorough assessment of several key factors, ensuring that we focus on opportunities that align with our strategic and financial objectives.
Before bidding, we evaluate the creditworthiness of the off-taker, local business conditions, government policies, land availability, and the quality of renewable resources at the project site (such as irradiation or wind levels). We also consider capital costs, payment cycles, grid infrastructure, and the competitive landscape. Additional considerations include whether the project meets our internal return thresholds, the availability of essential infrastructure (such as transmission systems, water supply, roads, and communications networks), and any auction-specific requirements on bid size.
Our strong track record in delivering large-scale renewable energy projects gives us a competitive edge in identifying and pursuing the most attractive opportunities. However, we place bids only in auctions where the policy framework, incentives, and off-taker credit profile meet our requirements. While our experience and expertise position us well, there is inherent uncertainty in the outcome and timing of project awards. Auction rules and market dynamics may also shift, adding further unpredictability. As we move forward, our continued success will depend on our ability to compete effectively, participating selectively in auctions that match our commercial, strategic, and risk criteria, and securing winning bids.
Operation and Maintenance of our Projects
Our wind power projects operate under a hybrid O&M model that combines long term service agreements with turbine manufacturers and our own in-house operational capabilities. This approach is designed to ensure the efficient, reliable and cost effective functioning of our wind power projects. Our principal turbine suppliers, Vestas and GERI, provide operations and maintenance services under comprehensive long term contracts that typically range from five to 10 years. In some cases, these contracts include complimentary service periods of two to three years. In addition to support from the original equipment manufacturers, we have developed a dedicated in-house team that oversees maintenance activities across all project sites.
Our results of operations depend significantly on our ability to maximise electricity generation from our wind power projects by maintaining high availability and minimising both planned and unplanned project downtime. Planned outages occur for inspections, regulatory compliance, and necessary maintenance activities, and their number and duration can affect our operating results. Where feasible, we seek to schedule these activities during periods when wind speeds are relatively low at the relevant project in order to reduce the impact on generation volumes. Unplanned outages, even when covered by insurance, may still reduce project availability and have a negative effect on our overall performance.
Government Policies and Initiatives
Government policies and initiatives play an important role in supporting clean energy and enhancing the economic feasibility of developing such projects. In recent years, India has implemented a range of policies and subsidies to promote clean energy. Several of our Operational Wind Power Projects benefit from both central government and state-level schemes, which provide a long-term advantage and contribute to the projects viability. These regulatory initiatives have contributed to growth in overall demand for clean energy, including for power generated by our Operational Wind Power Projects. Regulation also influences the revenue model applicable to these projects, shaping how we structure agreements and forecast returns. The GoI has consistently expressed support for clean energy, and has signalled its intention to continue strengthening these measures. Looking ahead, the introduction of additional regulatory requirements or incentives has the potential to further increase demand for clean energy and may influence future power prices.
The adoption of advanced emission control technologies, such as selective catalytic reduction, diesel particulate filters, and electronic fuel injection systems, has led to a notable price hike of 15 20% for CPCB IV+ compliant DG sets compared to their CPCB II counterparts. (Source: F&S Report) This is reflective of increased manufacturing costs and the use of BS-VI compliant low-sulphur diesel. (Source: F&S Report) In addition to the technology costs, the implementation of CPCB IV+ norms has introduced longer development cycles and more rigorous certification processes, further contributing to price escalation. (Source: F&S Report) Manufacturers are now required to undergo extended testing protocols, emissions validation, and type approval procedures through accredited agencies such as ARAI and ICAT. (Source: F&S Report) These added steps increase lead times and operational overheads, as suppliers must adapt their supply chains, invest in new tooling and training, and ensure compliance at every stage of production. (Source: F&S Report) Recognising the increasing demand for environmentally sustainable technologies and stricter regulatory requirements, our Associate, Platino Automotive, has directed investment towards the development and commercialisation of advanced RECDs.
Availability of skilled labour
We are heavily dependent on highly trained engineers and other skilled labour. The availability of skilled labour and trained engineers will be crucial for our operations and as we expand our Generator Set Business and Wind Power Business. As of March 31, 2025, our manufacturing, projects, design and engineering team of our Generator Set business consisted of 455 personnel and the operations, technical, project development and site management team of our Wind Power Business consisted of 126 personnel. For a functional breakdown of our workforce, please see "Our Business Human Resources" on page 257.
The power industry in general experiences sustained high demand and intense competition for skilled talent, making the attraction and retention of engineers, qualified staff, and other highly skilled employees a key focus area for both our Generator Set Business as well as our Wind Power Business. As we expand and our brand gains recognition across our existing and target markets, we anticipate increased engagement with skilled professionals offering diverse career opportunities within our organisation. While we are committed to investing in competitive remuneration, career development programmes, and a positive work culture to support the continued growth of our team and the achievement of our business objectives, our ability to attract and retain suitable skilled personnel will be crucial. Our ongoing efforts to attract and retain skilled personnel will contribute to the strength of our operations and our ability to capitalise on new opportunities in the market.
Competition
The Generator Set Business is subject to intense competitive conditions, with respect to the technology, design, economy and quality of generator sets. There are a number of competitors that possess a similar level of expertise, range of products and services and cost structure, some of our competitors may have greater financial resources, access to more advanced technology, larger research and development budgets or greater market penetration.
The Wind Power Business is also subject to intense competitive conditions. Our competitors may have access to more suitable wind sites or lower financing sources, or may enjoy incentives which are not available to us. Consequently, if competition in our lines of business intensifies, we may experience increased pressure on our growth and profitability.
MATERIAL ACCOUNTING POLICIES
Below is a list of the material accounting policies adopted in the preparation of the Restated Consolidated Financial Information.
Property, plant and equipment
Recognition and measurement: Freehold land is carried at historical cost. All other items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located. The cost of a self- constructed item of property, plant and equipment comprises the cost of materials and direct labour, and other cost directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.
Capital work-in-progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as other non-current assets.
All identifiable revenue expenses including interest incurred in respect of various projects/ expansion, net of income earned during the project development stage prior to its intended use, are considered as pre-operative expenses and disclosed under capital work-in-progress. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Subsequent expenditure: Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Depreciation: Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives prescribed under Schedule II to the Companies Act, 2013 using the diminishing balance method except in respect of the following category of assets, and is recognised in the restated consolidated statement of profit or loss. Freehold land is not depreciated.
| Particulars | Estimated Useful Life |
| Improvements on Leased Premises | Over the period of lease |
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which the asset is ready for use (disposed of).
Intangible Assets
Recognition and measurement: Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the assets will flow to the Group and the cost of the assets can be measured reliably. Intangible assets are stated at cost or acquisition less accumulated amortisation and impairment loss, if any. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
Amortisation: Software is amortised over a period of 3 years on straight line basis from the date they are available for intended use, subject to impairment test. Rights of way are amortised over the period of agreement of right to use which ranges from 25 years to 99 years. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
De-recognition: Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the restated consolidated statement of profit and loss when the assets is de-recognised.
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets: Group classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss, on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
Initial recognition and measurement: All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement: For the purpose of subsequent measurement, financial assets are classified in two broad categories: (i) Financial assets at fair value (FVTPL /FVTOCI); and (ii) Financial assets at amortised cost.
When assets are measured at fair value, gains and losses are either recognised in the statement of profit and loss (i.e. fair value through profit or loss (FVTPL)), or recognised in other comprehensive income (i.e. fair value through other comprehensive income (FVTOCI)).
Financial Assets measured at amortised cost (net of any write down for impairment, if any): Financial assets are measured at amortised cost when asset is held within a business model, whose objective is to hold assets for collecting contractual cash flows and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest. Such financial assets are subsequently measured at amortised cost using the effective interest rate ("EIR") method less impairment, if any. The losses arising from impairment are recognised in the Statement of profit and loss.
Financial Assets measured at Fair Value through Profit or Loss ("FVTPL"): Financial assets under this category are measured initially as well as at each reporting date at fair value with all changes recognised in profit or loss.
Financial Assets measured at Fair Value through Other Comprehensive Income ("FVTOCI"): Financial assets under this category are measured initially as well as at each reporting date at fair value, when asset is held within a business model, whose objective is to hold assets for both collecting contractual cash flows and selling financial assets. Fair value movements are recognized in the other comprehensive income.
Investment in Equity Instruments: Equity instruments which are held for trading are classified as at FVTPL. All other equity instruments are classified as FVTOCI. Fair value changes on the instrument, excluding dividends, are recognised in the other comprehensive income. There is no recycling of the amounts from other comprehensive income to profit or loss.
Investment in Debt Instruments: A debt instrument is measured at amortised cost or at FVTOCI. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of profit and loss.
De-recognition of Financial Assets: A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or Group has transferred its rights to receive cash flows from the asset.
Impairment of Financial Assets: In accordance with Ind AS 109, the Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets that are debt instruments and trade receivables.
Financial Liabilities
Classification: Group classifies all financial liabilities as subsequently measured at amortised cost or FVTPL.
Initial recognition and measurement: All financial liabilities are recognised initially at fair value and, in the case of loans, borrowings and payables, net of directly attributable transaction costs. Financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.
Subsequent measurement: Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
De-recognition of Financial Liabilities: A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
Derivative Financial Instrument: Group uses derivative financial instruments, such as forward currency contracts to mitigate its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Hedge Accounting
The Group uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Group designates such forward contracts in a cash flow hedging relationships by applying the hedge accounting principles. These forward contracts are stated at fair value at each reporting date. Changes in fair value of these forward contracts that are designated and effective as hedges of future cash flows are recognized directly in (OCI) and accumulated in ‘Cash Flow Hedge Reserve Account under Other Equity, net of applicable deferred income taxes and the ineffective portion is recognized immediately in the Statement of Profit & Loss. Amounts accumulated in the ‘Cash Flow Hedge Reserve Account are reclassified to the Statement of Profit & Loss in the same period during which the forecasted transaction affects Statement of Profit & Loss. Hedge accounting is discontinued when the hedging instrument expires or is terminated, or exercised or no longer qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedging instrument recognised in ‘Cash Flow Hedge Reserve Account is retained until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognised in ‘Cash Flow Hedge Reserve Account is immediately transferred to the Statement of Profit and Loss.
Impairment of Non-Financial Assets
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognised in the Restated Consolidated Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Restated Consolidated Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of accumulated amortisation or depreciation) has no impairment loss been recognised for the asset in prior years.
Inventories
In case of our Company and Subsidiary outside India: Raw materials are valued at lower of cost (on weighted average basis) or estimated net realisable value. Cost for this purpose includes basic cost of materials and all identifiable direct cost and includes taxes and duties and is net of eligible credits under GST schemes.
Finished goods are valued at lower of cost or estimated realisable value. Cost for this purpose comprises of Raw Material cost and proportionate overheads allocated on the assumption of normal operating capacity.
Traded goods are valued at lower of cost or estimated realisable value.
Work-in-progress are valued at estimated cost.
Goods and materials in transit are valued at actual cost incurred up to the date of balance sheet. Materials and other items held for use in production of inventories are not written down, if the finished products in which they will be used are expected to be sold at or above cost.
In case of our Indian Subsidiaries: Work-in-Progress includes internal development cost, external development cost, construction costs, overheads, borrowing costs, development/construction materials and are valued at cost/estimated cost.
Cash and Cash Equivalent: Cash and Cash Equivalents comprise of cash on hand and cash at bank including fixed deposit/highly liquid investments with original maturity period of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Cash Flow Statements
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flow from operating, investing and financing activities of Group are segregated.
Foreign Currency Transactions
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Date of transaction for determining the exchange rate for translation would be earlier of:
The date of initial recognition of the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration, and
The date that the related item is recognised in the financial statements.
Monetary items denominated in foreign currencies at the year-end are re-measured at the exchange rate prevailing on the balance sheet date. Non-monetary foreign currency items are carried at cost.
Any income or expense on account of exchange difference either on settlement or on restatement is recognised in the Restated Consolidated Statement of Profit and Loss except for:
Exchange differences on translation or settlement of long term foreign currency monetary items in respect of loans borrowed before April 1, 2016 at rates different from those at which they were initially recorded or reported in the previous financial statements, insofar as it relates to acquisition of depreciable assets, are adjusted to the cost of the assets and depreciated over remaining useful life of such assets.
Revenue Recognition
Revenue from contracts with customers for sale of goods and provision of services. Revenue from contracts with customers is recognized when control of the goods and services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods and services.
The Group satisfies a performance obligation and recognizes revenue over time, if one of the following criteria is met:
a) The Groups performance does not create an asset with an alternate use to the Group and the Group has as an enforceable right to payment for performance completed to date.
b) The Groups performance creates or enhances an asset that the customer controls as the asset is created or enhanced.
c) The customer simultaneously receives and consumes the benefits provided by the Groups performance as the Group performs.
For performance obligations where one of the above conditions are not met, revenue is recognized at the point in time at which the performance obligation is satisfied.
Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty.
The Group assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. Taxes collected on behalf of the government are excluded from revenue. Revenue is recognized to the extent it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably.
Variable consideration includes volume discounts, price concessions, liquidity damages, incentives, etc. The Group estimates the variable consideration with respect to above based on an analysis of accumulated historical experience. The Group adjust estimate of revenue at the earlier of when the most likely amount of consideration we expect to receive changes or when the consideration becomes fixed.
Sale of Products
Performance obligation in case of Revenue from sale of goods is satisfied at a point in time and is recognized when the performance obligation is satisfied and control as per Ind AS 115 is transferred to the customer. The Group collects GST on behalf of the Government and, therefore, these are not economic benefits flowing to the Group. Hence, they are excluded from revenue. Revenue is disclosed net of discounts, incentives and returns, as applicable.
Rendering of Services
Performance obligation in case of erection contracts is satisfied over the period of time. Since the group creates an asset that the customer controls as the asset is created and the group has an enforceable right to payment for performance completed to date if it is meets the agreed specifications. Revenue from such contracts, where the outcome can be estimated reliably and 10% of the project cost is incurred, is recognized under the percentage of completion method by reference to the stage of completion of the contract activity. The stage of completion is measured by input method i.e. the proportion that costs incurred to date bear to the estimated total costs of a contract. The total costs of contracts are estimated based on technical and other estimates. In the event that a loss is anticipated on a particular contract, provision is made for the estimated loss. Contract revenue earned in excess of billing is reflected under as "Unbilled Revenues" and billing in excess of contract revenue is reflected under "Contract Liabilities".
Dividend income is recognised when right to receive dividend is established. Interest income is recognised on effective interest method. Insurance and other claims are recognised as a revenue on certainty of receipt on prudent basis.
Sale of Certified Emission Reductions ("CERs") is recognised as income on the delivery of the CERs to the customers account as evidenced by the receipt of confirmation of execution of delivery instructions.
Employee Benefits
In the case of our Company and Subsidiaries in India:
All employee benefits payable wholly within twelve months rendering service are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex gratia are recognised during the period in which the employee renders related service.
Defined benefit plans
Group provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment with Group.
Liabilities with regard to Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the Projected Unit Credit Method.
In case of our Company, the Company fully contributes all ascertained liabilities to the Powerica Limited Employees Group Gratuity
Assurance Scheme (the "Trust"). Trustees administer contributions made to the Trust and contributions are invested in a scheme with Life Insurance Corporation of India as permitted by laws of India.
The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme. The group recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Actuarial gains and losses are recognised in full in the other comprehensive income for the period in which they occur. The effect of any plan amendments are recognized in the restated consolidated statement of profit and loss.
Defined contribution plans
Contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits. Group pays provident fund contributions to publicly administered provident funds as per local regulations. Group has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
Compensated absences
Group has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised liability at the present value of the defined benefit obligation at the balance sheet date.
Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.
In case of our Foreign Subsidiary:
All employee benefits payable wholly within twelve months rendering service are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex gratia are recognised during the period in which the employee renders related service.
Provision for employees end of service benefits is made in accordance with the respective Country labour laws and is based on the current remuneration and period of service at the end of the reporting period. Provision is made for estimated liability for employees entitlement to annual leave as a result of services rendered by the employees up to the end of the reporting period.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Lease
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in Ind AS 116.
Group as a lessee
The Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate standalone price of the non-lease components.
Right-of-Use Assets: The Group recognizes right-of-use as set representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of- use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the restated consolidated statement of profit and loss.
Lease Liabilities: The Group measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate cannot be readily determined, the Company uses incremental borrowing rate. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Group is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The group recognises the amount of the remeasurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in restated consolidated statement of profit and loss.
Short-term leases and leases of low-value assets: The Group has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.
The Group as a lessor: Leases for which the Group is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
Earnings Per Equity Share
Basic earnings per equity share is computed by dividing the restated net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Income Taxes
Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the restated consolidated statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.
Current income tax: Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred income tax: Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.
The Group offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Dividends to Shareholders
Annual dividend distribution to the shareholders is recognised as a liability in the period in which the dividends are approved by the shareholders. Any interim dividend paid is recognised on approval by Board of Directors. Dividend payable and corresponding tax on dividend distribution is recognised directly in equity.
Provisions, Contingent Liabilities, Contingent Assets and Commitments
Provisions are recognised when Group has a present obligation (legal or constructive) as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If there is any expectation that some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any virtually certain reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Contingent liability is disclosed in the case of: possible obligation which will be confirmed only by future events not wholly within the control of the Group, or present obligations arising from past events where it is probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent liabilities are not recognised in the financial statements. Contingent assets are neither recognised nor disclosed in the financial statements.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
Fair Value
The Group measures financial instruments at fair value in accordance with the accounting policies mentioned above. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or,
In the absence of a principal market, in the most advantageous market for the asset or liability
All assets and liabilities for which fair value is measured or disclosed in the restated financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 inputs that are unobservable for the asset or liability
For assets and liabilities that are recognised in the financial statements on a recurring basis, Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker
("CODM") of our Company. The CODM is responsible for allocating resources and assessing performances of the operating segments of the Company.
Business Combinations Common control business combinations includes transactions, such as transfer of subsidiaries or businesses, between entities within a group. Business combinations involving entities or businesses under common control shall be accounted for using the pooling of interests method.
The pooling of interest method is considered to involve the following:
i) The assets and liabilities of the combining entities are reflected at their carrying amounts.
ii) No adjustments are made to reflect fair values, or recognise any new assets or liabilities. The only adjustments that are made are to harmonise accounting policies.
iii) The financial information in the financial statements in respect of prior periods should be restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. However, if business combination had occurred after that date, the prior period information shall be restated only from that date.
iv) The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee
Recent accounting pronouncement issued but not made effective
The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has notified Ind AS 117 Insurance Contracts and amendments to Ind AS 116 Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. April 1, 2024. The Group has reviewed the new pronouncements and based on its evaluation has determined that it does not have any significant impact in its financial statements.
CHANGES IN ACCOUNTING POLICIES
There have been no changes in our accounting policies during the Fiscals 2025, 2024 and 2023.
PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
Total Income
Total income comprises: (i) revenue from operations; and (ii) other income.
Revenue from operations
Revenue from operations comprises: (i) sale of products; (ii) income from services; and (iii) other operating revenue.
Sale of products. Revenue from sale of products includes revenue from sale of manufactured goods consisting of diesel generator sets and components; stock in-trade representing the sale of traded goods which we purchase and sell to customers; revenue from sale of electricity generated from our wind power projects and generation based incentive in respect of our wind IPP business.
Income from services. Income from services includes revenue from erection, installation and other services rendered with respect to our diesel generator sets and MSLGs, and revenue from project development contracts and other services rendered comprising our wind EPC business.
Other operating revenue. Other operating revenue includes income from leasing; export benefits and other incentives; scrap sales and others.
Other income
Other income primarily includes net gain on sale of property, plant and equipment, net gain on financial assets measured at fair value through profit or loss ("FVTPL"), interest income from investments, interest income on bank and other deposits, net exchange variation gains, rent income, write-back of provision for doubtful debts and miscellaneous income.
Total expenses
Total expenses comprises: (i) cost of raw materials consumed; (ii) purchase of stock-in-trade; (iii) changes in inventories of finished goods, work-in-progress and stock-in-trade; (iv) employee benefits expense; (v) finance costs; (vi) depreciation and amortization expense; and (vii) other expenses.
Cost of raw materials consumed
Cost of raw materials consumed comprises costs incurred towards the purchase of all raw materials and components for our generator sets business.
Purchase of stock-in-trade
Purchase of stock-in-trade comprises of cost of goods purchased such as accessories, components and materials in respect of generator set business and wind EPC business.
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Changes in inventories of stock in trade, finished goods and work in progress represent the difference between the opening and closing stock of finished goods, work in progress and stock-in-trade.
Employee benefits expenses
Employee benefit expenses comprise expenditure towards employee remuneration and benefits including salaries, wages, bonus and allowances, contributions to the provident fund and other funds, defined benefit plan expenses and staff welfare expenses.
Finance costs
Our finance costs comprise mainly interest expenses, fees, LC discounting charges, commissions and other incidental borrowing costs.
Depreciation and amortization expense
Depreciation and amortization expenses comprises depreciation on property, plant and equipment; right-of-use assets and amortization on intangible assets.
Other expenses
Other expenses primarily comprise project development contracts; erection expenses; operation and maintenance charges, labour charges, freight outward, travelling expenses, legal and professional charges, conveyance and petrol expenses and miscellaneous expenses.
RESULTS OF OPERATIONS FOR THE FISCALS 2025, 2024 AND 2023
The following table sets forth certain information with respect to our results of operations on a consolidated basis for the Fiscals 2025, 2024 and 2023, the components of which are also expressed as a percentage of total income for such periods.
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | |||
| ( in crores) | (% of Total Income) | ( in crores) | (% of Total Income) | ( in crores) | (% of Total Income) | |
| Income | ||||||
| Revenue from operations | 2,653.27 | 97.87 | 2,210.00 | 93.77 | 2,378.26 | 98.18 |
| Other income | 57.66 | 2.13 | 146.77 | 6.23 | 44.16 | 1.82 |
| Total income | 2,710.93 | 100.00 | 2,356.77 | 100.00 | 2,422.42 | 100.00 |
| Expenses | ||||||
| Cost of raw materials consumed | 1,787.69 | 65.93 | 1,419.18 | 60.22 | 1,267.34 | 52.32 |
| Purchase of stock-in-trade | 12.50 | 0.46 | 25.78 | 1.09 | 307.86 | 12.71 |
| Changes in inventories of finished goods, work-in-progress | 14.00 | 0.52 | (7.22) | (0.31) | (6.92) | (0.29) |
| and stock-in-trade | ||||||
| Employee benefits expenses | 114.28 | 4.22 | 113.46 | 4.81 | 94.84 | 3.92 |
| Finance costs | 32.20 | 1.19 | 40.53 | 1.72 | 56.01 | 2.31 |
| Depreciation and amortisation expenses | 116.46 | 4.30 | 127.98 | 5.43 | 135.51 | 5.59 |
| Other expenses | 388.17 | 14.32 | 296.33 | 12.58 | 367.74 | 15.18 |
| Total expenses | 2,465.30 | 90.94 | 2,016.04 | 85.54 | 2,222.38 | 91.74 |
| Profit/(loss) before share of profit/(loss) of Associate | 245.63 | 9.06 | 340.73 | 14.46 | 200.04 | 8.26 |
| Share of profit/(loss) of Associate (net of tax) | 9.03 | 0.33 | (0.02) | 0.00 | (14.19) | (0.59) |
| Profit/(loss) before tax | 254.66 | 9.39 | 340.71 | 14.46 | 185.85 | 7.67 |
| Tax expense | ||||||
| Current tax | 92.93 | 3.43 | 76.17 | 3.23 | 32.76 | 1.35 |
| Deferred tax charge (credit) | (14.10) | (0.52) | 38.43 | 1.63 | 57.32 | 2.37 |
| MAT credit entitlement | - | - | - | - | (32.54) | (1.34) |
| MAT credit entitlement of earlier years | - | - | - | - | 21.86 | 0.90 |
| Profit/(loss) after tax | 175.83 | 6.48 | 226.11 | 9.60 | 106.45 | 4.39 |
| Other comprehensive income | ||||||
| Other comprehensive income to be reclassified to profit or loss in subsequent years: | ||||||
| The effective portion of gain & losses on hedging instruments in a cash flow hedge | 0.22 | 0.01 | 0.47 | 0.02 | (0.33) | (0.01) |
| Income tax effect on above | (0.08) | 0.00 | (0.16) | (0.01) | 0.12 | 0.00 |
| Net other comprehensive income to be reclassified to profit or loss in subsequent years | 0.14 | 0.01 | 0.31 | 0.01 | (0.21) | (0.01) |
| Other comprehensive income not to be reclassified to profit or loss in subsequent years: | ||||||
| Re-measurement gains (losses) on defined benefits plans | (1.27) | -0.05 | (1.31) | (0.06) | (0.92) | (0.04) |
| Income tax effect on above | 0.44 | 0.02 | 0.46 | 0.02 | 0.32 | 0.01 |
| Net other comprehensive income not to be reclassified to profit or loss in subsequent years | (0.83) | -0.03 | (0.85) | (0.04) | (0.60) | (0.02) |
| Other comprehensive income for the year, net of tax, attributable to the owners of the Company | (0.69) | -0.03 | (0.54) | (0.02) | (0.81) | (0.03) |
| Total comprehensive income for the year, net of tax, attributable to the owners of the Company | 166.12 | 6.13 | 225.74 | 9.58 | 105.64 | 4.36 |
| Profit/(loss) for the year attributable to: | ||||||
| -Owners of the company | 166.82 | 6.15 | 226.28 | 9.61 | 106.45 | 4.39 |
| -Non-controlling interests | 9.01 | 0.33 | (0.17) | (0.01) | - | 0.00 |
| Profit/(loss) for the year | 175.83 | 6.49 | 226.11 | 9.60 | 106.45 | 4.39 |
| Earnings/(loss) per equity share (EPS) | ||||||
| Basic and diluted earnings per equity share of 5 each (in ) | 15.26 | 0.56 | 18.46 | 0.78 | 6.32 | 0.26 |
Fiscal 2025 Compared to Fiscal 2024
Income
Our total income increased by 15.03% from 2,356.77 crores for Fiscal 2024 to 2,710.93 crores for Fiscal 2025.
Revenue from operations. Our revenue from operations increased by 20.06% from 2,210.00 crores in Fiscal 2024 to 2,653.27 crores in Fiscal 2025. This growth was primarily due to the following factors:
Revenue from HHP DG sets increased by 24.46%, driven by a 20.74% rise in volumes and a 3.08% improvement in per unit realisation.
Revenue from LHP and MHP DG sets increased by 6.11%. This was driven by a 27.50% rise in per unit realisation, partially offset by a 16.77% decrease in volumes. Effective July 1, 2024, the Central Pollution Control Board ("CPCB") mandated the use of CPCB IV+ compliant DG sets, which achieve higher realisation due to technological advancements. The transition from CPCB II to CPCB IV+ compliance required around three months to implement, which temporarily affected volumes.
Revenue from the sale of other components relating to generator sets increased by 41.84%.
Revenue from erection, installation and other services relating to our generator sets grew by 30.30%.
Revenue from project development contract services in our EPC for BoP business increased by 137.02%. This significant growth was primarily due to milestone-based revenue recognised for services provided for the following projects:
- land acquisition and development of a 174.90 MW wind power project, and land aggregation services for a 50 MW solar power project, both at Khambaliya, Gujarat, for Airpower Wind Farms Private Limited;
- acquisition of land for a 150 MW solar power project and a 411.50 MW wind power project, both at Beed, Maharashtra, for Torrent Solar Power Private Limited; and
- construction of a 7.2 km, 400 kV transmission line, and a 220/400 kV substation for Torrent Solar Power Private Limited.
This overall increase in revenue from operations was partially offset by a 7.02% decline in revenue from the sale of electricity generated by our wind power projects, primarily due to fluctuations in wind velocity leading to reduced electricity generation.
Other income. Other income decreased by 60.71% from 146.77 crores in Fiscal 2024 to 57.66 crores in Fiscal 2025. This decline was primarily due to:
A 81.34% reduction in net gain on the sale of property, plant and equipment. In Fiscal 2024, we sold 16 WTGs from wind power IPP projects in Tamil Nadu, resulting in a one time gain of 85.25 crores.
A decrease in net gain on financial assets measured at fair value through profit or loss (FVTPL), mainly due to lower appreciation in the market value of investments compared to the previous financial year.
Expenses
Cost of raw materials consumed. Cost of raw materials consumed increased by 25.97% from 1,419.18 crores for Fiscal 2024 to 1,787.69 crores for Fiscal 2025 due to increase in purchase of raw materials procured for the increase in manufactured goods. Further, the price of engines which forms the major cost, used in our LHP and MHP DG sets increased due to technological changes mandated due to implementation of CPCB IV+ compliances.
Purchase of stock-in-trade. Purchase of stock-in-trade decreased by 51.51% from 25.78 crores for Fiscal 2024 to 12.50 crores for Fiscal 2025, primarily due to reduction in purchase of traded goods during the year.
Changes in inventories of finished goods, work-in-progress and stock-in trade. Changes in inventories of finished goods, work-in-progress and stock-in trade amounted to 14.00 crores in Fiscal 2025, as compared to (7.22) crores in Fiscal 2024. This was primarily attributable to an increase in inventory of finished goods, work in progress and stock in trade at the end of the year to support increase in manufacturing activities.
Employee benefit expense. Our employee benefit expense increased by 0.72% from 113.46 crores for Fiscal 2024 to 114.28 crores for Fiscal 2025 primarily as a result of an increase in the number of employees from 819 as of March 31, 2024 to 877 as of March 31, 2025 and increments given to employees during the year. The increase in employee benefit expenses was partially offset by decrease in commission paid to the executive directors.
Finance cost. Our finance costs decreased by 20.55%, from 40.53 crore in Fiscal 2024 to 32.20 crore in Fiscal 2025. In Fiscal 2025, we began construction of the Orchid Phase 1 project at Khambaliya, Gujarat, for which we discounted letters of credit (acceptances). The discounting charges incurred during the construction period were capitalised as part of the cost of the qualifying asset, in line with Ind AS 23 Borrowing Costs. There was no corresponding capitalisation of interest or discounting costs in Fiscal 2024. In addition, we repaid part of our term loans and certain letters of credit (acceptances) during Fiscal 2025.
Depreciation and amortization expense. Our depreciation and amortization expenses decreased by 9.00% from 127.98 crores for Fiscal 2024 to 116.46 crores for Fiscal 2025. The decrease in depreciation expense is attributable to the diminishing balance method due to which depreciation reduces over the assets useful life.
Other expenses. Other expenses increased by 30.99% from 296.33 crores for Fiscal 2024 to 388.17 crores for Fiscal 2025. This increase was primarily attributable to increase in project development contract cost by 60.41 crores in line with increase in revenue; increase in operation and maintenance charges by 7.86 crores, primarily on account of completion of 2 years maintenance free period for WTGs installed and general increase. Further there was an increase in labour charges and erection expenses on account of increase in erection, installation and other services rendered for our Generator Set Business.
Profit before tax. For the reasons discussed above, we recorded a restated profit before tax of 254.66 crores for Fiscal 2025 as compared to 340.71 crores for Fiscal 2024.
Total tax expense. Our total tax expense decreased by 31.21% from 114.60 crores for Fiscal 2024 to 78.83 crores for Fiscal 2025. This decrease was primarily attributable to lower profit before tax. Further, the tax charge was lower primarily on account of reversal of deferred tax liability arising from the reduction in written down value (WDV) under the Income Tax Act and reduction in net gain on financial assets measured at fair value through profit or loss (FVTPL).
Profit for the year. For the various reasons discussed above, we recorded a restated profit after tax of 175.83 crores for Fiscal 2025 as compared to 226.11 crores for Fiscal 2024.
Fiscal 2024 Compared to Fiscal 2023
Income
Our total income decreased by 2.71% from 2,422.42 crores in Fiscal 2023 to 2,356.77 crores for Fiscal 2024.
Revenue from operations. Our revenue from operations decreased by 7.07% from 2,378.26 crores in Fiscal 2023 to 2,210.00 crores in Fiscal 2024. The key factors contributing to this change were as follows:
Revenue from HHP DG sets increased by 16.57%, due to a 15.27% rise in volumes and a 1.13% improvement in per unit realisation.
Revenue from LHP and MHP DG sets grew by 17.30%, driven by a 3.24% increase in volumes and a 13.62% increase in per unit realisation.
The CPCBs mandate to adopt CPCB IV+ compliant DG sets, which are more expensive due to advanced technology, prompted some customers to purchase CPCB II engines before the implementation deadline. Anticipating price increases, these customers aimed to reduce costs, resulting in prebuying that led to higher sales volumes in Fiscal 2024.
The increase in revenue from manufactured goods was partially offset by a decrease in sales of stock-in-trade for MSLG. In Fiscal 2023, we delivered eight MSLG sets valued at 325.26 crores, following a successful bid for the delivery and installation of these 6.3 MW sets for Nuclear Power Corporation of India Limited ("NPCIL"); this delivery was fulfilled in Fiscal 2023.
There was a further decrease in revenue from project development contracts, as the majority of work for contracts in hand was completed in Fiscal 2023, with only the remaining portion delivered in Fiscal 2024.
Revenue from erection, installation and other services rendered for our diesel generator sets increased by 24.91%.
Revenue from electricity generated and sold from our wind power projects increased by 6.20%, primarily due to higher wind velocity resulting in greater electricity generation.
Other income. Other income increased by 232.36% from 44.16 crores in Fiscal 2023 to 146.77 crores in Fiscal 2024, mainly due to:
A 577.67% increase in net gain on the sale of property, plant and equipment. In Fiscal 2024, we sold 16 WTGs from wind power IPP projects in Tamil Nadu, resulting in a gain of 85.25 crores.
A significant increase in net gain on financial assets measured at fair value through profit or loss (FVTPL), compared to the previous year, due to greater appreciation in the market value of investments.
Expenses
Cost of raw materials consumed. Cost of raw materials consumed increased by 11.98% from 1,267.34 crores in Fiscal 2023 to 1,419.18 crores in Fiscal 2024, primarily due to increase in purchase of raw materials procured for the increase in manufactured goods.
Purchase of stock-in-trade. Purchase of stock-in-trade decreased by 91.63%, from 307.86 crore in Fiscal 2023 to 25.78 crore in Fiscal 2024. This significant reduction is largely due to fulfilling a contract for delivery and installation of eight MSLG sets of 6.3 MW each for NPCIL in Fiscal 2023. The procurement and delivery for these sets was completed in that year.
Changes in inventories of finished goods, work-in-progress and stock-in trade. Changes in inventories of finished goods, work-in-progress and stock-in trade amounted to ( 7.22) crores in Fiscal 2024, compared to ( 6.92) crores in Fiscal 2023. This was primarily attributable to an increase in inventory of finished goods, work in progress and stock in trade at the end of the year to support increase in manufacturing activities.
Employee benefit expense. Our employee benefit expense increased by 19.63% from 94.84 crores in Fiscal 2023 to 113.46 crores in Fiscal 2024, primarily as a result of an increase in the number of employees from 764 as of March 31, 2023 to 819 as of March 31, 2024 and increments given to employees during the year.
Finance cost. Our finance costs decreased by 27.64% from 56.01 crores in Fiscal 2023 to 40.53 crores in Fiscal 2024, primarily as a result of a decrease in interest expenses from 29.92 crores for Fiscal 2023 to 15.23 crores for Fiscal 2024 on account of a decrease in outstanding indebtedness during Fiscal 2024 and a decrease in other borrowing costs from 26.09 crores for Fiscal 2023 to 25.05 crores for Fiscal 2024.
Depreciation and amortization expense. Our depreciation and amortization expenses decreased by 5.55% from 135.51 crores in Fiscal 2023 to 127.98 crores in Fiscal 2024. The decrease in depreciation expense is primarily attributable to the diminishing balance method due to which depreciation expense reduce over the assets useful life. Further, during Fiscal 2024, our Company had sold 16 WTGs of wind power IPP projects in Tamil Nadu, for which depreciation was only charged for few months in Fiscal 2024.
Other expenses. Other expenses decreased by 19.42% from 367.74 crores in Fiscal 2023 to 296.33 crores in Fiscal 2024. This decrease was primarily attributable to decrease in expenses towards project development contract on account of completion of major work of the contracts in hand during Fiscal 2023.
Profit/(loss) before tax. For the reasons discussed above, we recorded a restated profit before tax of 340.71 crores for Fiscal 2024, compared to 185.85 crores for Fiscal 2023.
Total tax expense. Our total tax expense (current and deferred) increased by 27.22% from 90.08 crores in Fiscal 2023 (current tax 32.76 crores plus deferred tax 57.32 crores) to 114.60 crores in Fiscal 2024 (current tax 76.17 crores plus deferred tax 38.43 crores), primarily attributable to changes in taxable profit and deferred tax calculations. Dyring the year Fiscal 2023, our Company had commissioned 51.3 MW wind power projects. The property, plant and equipment for the said projects was eligible for additional depreciation under the Income Tax Act, making us liable for lower a corporate tax rate under MAT in Fiscal 2023.
Profit for the year. For the various reasons discussed above, we recorded a restated profit after tax of 226.11 crores for Fiscal 2024, compared to 106.45 crores for Fiscal 2023.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2025, our cash and cash equivalents, other bank balances and current investments were 397.76 crores. Our financing requirements are primarily for:
implementation of new wind power projects;
increasing capacities / modification of our manufacturing unit for our DG set units; financing and servicing of our debt obligations; funding working capital needs; and maintenance and operation of projects; general corporate overheads.
We have primarily funded our growth through equity funding, bank borrowings, and internal cash flows. Our main uses of cash have been, and will continue to be, supporting growth, particularly through long-term investments and the development of wind power projects. We plan to meet our ongoing liquidity and capital requirements using these same sources. We consistently monitor our funding levels to ensure we can meet the financial needs of our projects across construction, development, and operational phases.
CASH FLOWS
The following table sets forth certain information relating to our cash flows for the Fiscals 2025, 2024 and 2023:
| Particulars | Fiscal 2025 | Fiscal 2024 ( in crores) | Fiscal 2023 |
| Net cash generated from operating activities | 256.44 | 283.36 | 237.98 |
| Net cash (used in) investing activities | (345.78) | (13.73) | (79.55) |
| Net cash generated from/ (used in) financing activities | 85.57 | (267.79) | (164.80) |
| Net increase/(decrease) in cash and cash equivalents | (3.77) | 1.84 | (6.37) |
| Cash and cash equivalents at the beginning of the year | 25.17 | 23.33 | 29.70 |
| Cash and cash equivalents at the end of the year | 21.40 | 25.17 | 23.33 |
Operating Activities
Net cash generated from operating activities was 256.44 crores for Fiscal 2025. Our restated profit before tax was 254.66 crores for Fiscal 2025. Adjustments included depreciation of 116.46 crores and interest expense of 32.20 crores, which were partially offset by a net gain on sale of property, plant and equipment of 16.25 crores and a net gain on financial assets measured at FVTPL of 15.98 crores. Provision for doubtful advances and sundry balances written off contributed 2.52 crores and 0.15 crores, respectively. Operating profit before working capital changes stood at 356.40 crores for Fiscal 2025. During Fiscal 2025, changes in working capital primarily comprised a decrease in inventories of 62.67 crores and an increase in other current liabilities of 18.44 crores, which were partially offset by an increase in trade receivables of 79.85 crores and a decrease in trade payables of 41.58 crores. Other notable movements included a decrease in other current assets of 15.78 crores and a decrease in other current financial liabilities of 9.00 crores. After net direct taxes paid of 57.31 crores, net cash generated from operating activities totalled
256.44 crores for Fiscal 2025. This movement was primarily attributable to reduction in inventory and trade payables in Fiscal 2025 as compared to Fiscal 2024. Our Company has procured higher inventory on credit to cater to anticipated surge in demand for CPCB II compliant DG sets before the implementation of CPCB IV+ norms.
Net cash generated from operating activities was 283.36 crores for Fiscal 2024. For Fiscal 2024, restated profit before tax was 340.71 crores. Significant adjustments included depreciation of 127.98 crores and net profit on sale of property, plant and equipment of 87.08 crores, offset by net gain on financial assets measured at FVTPL of 45.14 crores. Operating profit before working capital changes was 370.77 crores in Fiscal 2024. Working capital movements for Fiscal 2024 included an increase in inventories of 66.13 crores and trade receivables of 59.39 crores, offset by increases in trade payables of 69.69 crores and other current liabilities of 23.27 crores. After net direct tax payments of 60.21 crores, net cash generated from operating activities for Fiscal 2024 was 283.36 crores. This inflow was mainly supported by increase in Trade Payables on account of higher procurements of CPCB II compliant DG sets to cater to anticipated surge in demand before the implementation of CPCB IV+ norms.
Net cash generated from operating activities was 237.98 crores for Fiscal 2023. Restated profit before tax for Fiscal 2023 was 185.85 crores, with adjustments such as depreciation of 135.51 crores and interest expense of 56.01 crores, offset by net gains on financial assets measured at FVTPL and on sale of property, plant and equipment of 7.35 crores and 12.85 crores, respectively. Working capital changes for Fiscal 2023 featured an increase in other current assets of 40.35 crores and a decrease in trade payables of 32.92 crores, partially offset by a decrease in inventories of 51.88 crores. After net direct tax payments of 22.74 crores, net cash generated from operating activities was 237.98 crores for Fiscal 2023.
Investing Activities
Net cash used in investing activities was 345.78 crores for Fiscal 2025, primarily consisting of capital expenditure on property, plant and equipment (including capital advances) of 332.26 crores and purchase of non-current investments of 28.74 crores, which were partially offset by proceeds from the sale of property, plant and equipment of 25.68 crores, interest received of 15.61 crores and changes in ownership interest in subsidiary without loss of control amounting to 6.29 crores. Additional outflows included the purchase of intangibles of 1.12 crores and purchase of current investments of 16.96 crores, together with an increase in bank balances other than cash and cash equivalents of 14.28 crores.
Net cash used in investing activities was 13.73 crores for Fiscal 2024, primarily consisting of capital expenditure on property, plant and equipment of 252.27 crores and purchase of intangibles of 0.95 crores, which were largely offset by proceeds from the sale of property, plant and equipment of 124.14 crores, and interest received of 9.37 crores, and net proceeds from current investments of 94.25 crores. Other inflows included changes in non-current investments of 11.73 crores.
Net cash used in investing activities was 79.55 crores for Fiscal 2023, primarily consisting of purchase of current investments of 123.96 crores, capital expenditure on property, plant and equipment of 58.64 crores and purchase of non-current investments of 20.98 crores, which were partially offset by proceeds from sale of property, plant and equipment of 15.25 crores, and interest received of 19.10 crores, loans given to associate and inter-corporate deposits received of 17.99 crores and 70.00 crores, respectively, and a decrease in bank balances other than cash and cash equivalents of 4.45 crores.
Financing Activities
Net cash generated from financing activities was 85.57 crores for Fiscal 2025, primarily consisting of proceeds from borrowings of 182.22 crores, which was partially offset by repayment of borrowings of 58.94 crores and interest paid of 36.04 crores, as well as payment of lease liabilities (including interest) of 1.67 crores.
Net cash used in financing activities was 267.79 crores for Fiscal 2024, primarily consisting of repayment of borrowings of 311.57 crores and buy back of equity shares of 108.43 crores, which was partially offset by proceeds from borrowings of 200.29 crores. Other significant outflows included interest paid of 47.85 crores and payment of lease liabilities (including interest) of 0.23 crores.
Net cash used in financing activities was 164.80 crores for Fiscal 2023, primarily consisting of repayment of borrowings of 246.96 crores and interest paid of 57.35 crores, which was partially offset by proceeds from borrowings of 139.51 crores.
INDEBTEDNESS
As of July 31, 2025, our total secured outstanding borrowings (fund-based and non-fund-based) stood at 1,012.60 crores. Our debt/equity ratio as of March 31, 2025 was 0.28. For further details regarding the terms of our borrowings see, "Financial Indebtedness" on page 381.
Our financing agreements with lenders contain a range of covenants and conditions. Several of these agreements require us to obtain lender consent before undertaking specific activities or entering into certain transactions. Failure to comply with these conditions or to secure the necessary consents could have significant adverse consequences for our business and operations. For further details, see the section titled
"Risk Factors Internal Risk Factors We are required to comply with certain restrictive covenants under our financing agreements. Any non-compliance may lead to, amongst others, accelerated repayment schedule and suspension of further drawdowns, which may adversely affect our business, results of operations, financial condition and cash flows" on page 46.
CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS
The following table sets forth our contingent liabilities as of March 31, 2025:
| Claims against the Company not acknowledged as debts | March 31, 2025 |
| a) Sales Tax demand disputed, contested in appeal | 0.01 |
| Amount paid there against and shown as Advances Recoverable | Nil |
| b) Service Tax demand disputed, contested in appeal | 0.90 |
| Amount paid there against and shown as Advances Recoverable | 0.02 |
| c) Goods and Service Tax demand disputed, contested in appeal | 9.62 |
| Amount paid there against and shown as Advances Recoverable | 0.16 |
| d) Custom Duty demand disputed, contested in appeal | 0.37 |
| Amount paid there against and shown as Advances Recoverable | 0.03 |
| d) Income Tax demand disputed, contested in appeal | 0.69 |
| Amount paid there against and shown as Advances Recoverable | Nil |
| e) Corporate Guarantee given to bank | 15.65 |
| f) Claims against the Company not acknowledged as debts | 1.09 |
| g) Letter of Credit Outstanding not acknowledged as debts * | 54.80 |
* The Group has disclosed the entire amount of contingent liabilities of subsidiaries in line with Ind AS 110 requirements. Non-controlling interests share is not separately disclosed as contingent liabilities are not recognized in the balance sheet.
Off-Balance Sheet Commitments and Arrangements
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
Capital Commitments
The following table sets forth the estimated amount of contracts remaining to be executed on capital account and not provided for as of the periods indicated:
| Commitments | As at | ||
| March 31, 2025 | March 31, 2024 | March 31, 2023 | |
( in crores) |
|||
| Estimated amounts of contracts remaining to be executed on capital/revenue account and not provided for, net of advances | 157.10 | 377.89 | 121.19 |
The following table sets forth a summary of the maturity profile of our contractual obligations as of March 31, 2025:
( in crores)
| Other contractual obligations | Total | Payable within 1 year | more than 1 years |
| Debt obligations | |||
| Non-Current Borrowings | 235.77 | Nil | 235.77 |
| Current Borrowings | 65.03 | 65.03 | Nil |
| Non-Current Lease Liabilities | 9.73 | Nil | 9.73 |
| Current Lease Liabilities | 1.35 | 1.35 | Nil |
| Trade Payables | 263.58 | 263.58 | Nil |
| Other Current Financial Liabilities | 296.40 | 296.40 | Nil |
| Total | 871.86 | 626.36 | 245.50 |
For further information on our contingent liabilities, see "Restated Consolidated Financial Information Note 40" on page 342.
Except as disclosed in the Restated Financial Information or elsewhere in this Draft Red Herring Prospectus, there are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we believe are material to investors.
CAPITAL EXPENDITURE
In the Fiscals 2025, 2024 and 2023, our capital expenditure represents additions in property, plant and equipment plus additions to capital work-in progress. The details of capital expenditure are set forth in the table below:
| Particulars | March 31, 2025 | March 31, 2024 | March 31, 2023 |
( in crores) |
|||
| Addition to Property Plant and Equipment: | 31.99 | 18.78 | 362.14 |
| Add: Closing Capital Work in Progress | 352.23 | 23.45 | 4.40 |
| Less: Opening Capital Work in Progress | 23.45 | 4.40 | 320.38 |
| Total | 360.77 | 37.83 | 46.16 |
NON-GAAP MEASURES
Certain measures including EBIT, EBITDA, EBITDA Margin, EBITDA from Generator Sets Business, EBITDA from Wind Power Business, Net Debt/Equity, Net Debt/EBITDA, Return on Capital Employed ("ROCE"), Return on Equity ("RoE"), Net Asset Value, Net Worth, Return on Net-worth, and Net Asset Value per share (together, "Non-GAAP Measures"), presented in this Draft Red Herring Prospectus are supplemental measures of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS, U.S. GAAP or any other GAAP. In addition, these Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance. For further information see "Risk Factors We have included certain Non-GAAP Measures, industry metrics and key performance indicators related to our operations and financial performance in this Draft Red Herring Prospectus that are subject to inherent measurement challenges. These Non-GAAP Measures, industry metrics and key performance indicators may not be comparable with financial, or industry-related statistical information of similar nomenclature computed and presented by other companies. Such supplemental financial and operational information is therefore of limited utility as an analytical tool for investors and there can be no assurance that there will not be any issues or such tools will be accurate going forward." on page 69.
For a reconciliation of the above Non-GAAP Measures used by us to the most directly comparable financial measure prepared in accordance with Ind AS, see "Other Financial Information Reconciliation of Non-GAAP measures" on page 379.
RELATED PARTY TRANSACTIONS
We enter into various transactions with related parties in the ordinary course of business. These transactions principally include issue of preference shares; redemption of preference shares; investments made; investment sold; loan given; loan repaid; interest income; rent income; sales; purchases; services rendered and managerial remuneration.
For further information relating to our related party transactions, see "Restated Consolidated Financial Information Note 52" on page 360.
SUMMARY OF RESERVATIONS OR QUALIFICATIONS OR ADVERSE REMARKS OF AUDITORS
There are no qualifications or emphasis of matters for Fiscal 2025, 2024 and 2023. However, there are certain statements or comments included in the annexure to the auditors report issued under Companies (Auditors Reports) Order, 2020, which do not require any adjustment or have not been adjusted for in the Restated Financial Information. For further information, see "Restated Consolidated Financial Information Note 60" on page 373.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to various types of market risks during the normal course of business. Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk and commodity risk. We are exposed to credit risk, liquidity risk and market risk.
Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities (primarily trade receivables) and from our financing activities. Customer credit risk is managed by each business unit subject to our established policy, procedures and control relating to customer credit risk management. We extend credit only to customers based on our past dealings and outstanding customer receivables are being monitored by individual business managers located in those geographies. Typically, an appropriate letter of credit / bank guarantee is obtained from the customers to cover the risk. As of March 31, 2025, 2024 and 2023, our current trade receivables were 399.26 crores, 318.49 crores and 262.28 crores, respectively. The concentration of credit risk is limited due to the fact that our customer base is large. We do not have any single customer representing more than 5% of our total balance of trade receivables.
Liquidity risk
Liquidity risk is the risk that we may not be able to meet our present and future cash and collateral obligations without incurring unacceptable losses. Our approach to managing liquidity is to ensure, as far as possible, that we will have sufficient liquidity to meet our liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: interest rate risk, currency risk and other price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Financial instruments affected by market risk include borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments. Our activities expose us to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. We use derivative financial instruments such as foreign exchange contracts and options to manage our exposures to foreign exchange fluctuations, as per foreign exchange exposure policy adopted by us.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The currencies in which these transactions are primarily denominated are US dollars. At any point in time, we cover foreign currency risks by taking appropriate hedges as a percentage of our foreign currency exposure, in accordance with the policy as approved by the Board. We use forward exchange contracts to mitigate our currency risk, most with a maturity of less than one year from the reporting date. In respect of other monetary assets and liabilities denominated in foreign currencies, our policy is to ensure that our net exposure is kept to an acceptable level by buying or selling foreign currencies through swaps and forwards.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in market interest rates relates primarily to the long-term debt obligation with floating interest rates. The risk is managed by us by maintaining an appropriate mix between fixed and floating rate borrowings. The use of interest rate swaps are also entered into, especially to hedge the floating rate borrowings or to convert the foreign currency floating interest rates to the domestic currency floating interest rates.
Other price risk
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk for us arises from financial assets such as investments in equity instruments, liquid mutual funds, debt mutual funds and bonds. We are exposed to price risk arising mainly from investments in debt mutual funds, equity instruments, debentures and bonds recognised at FVTPL. As of March 31, 2025, the carrying value of such debt mutual funds, equity instruments, debentures and bonds recognised at FVTPL was 366.06 crores (March 31, 2024: 333.41 crores and March 31, 2023: 383.30 crores).
Unusual or Infrequent Events or Transactions
Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
KNOWN TRENDS OR UNCERTAINTIES
Our business has been affected and we expect that it will continue to be affected by the trends identified above in "- Significant Factors Affecting Our Results of Operations and Financial Condition" and the uncertainties described in the section "Risk Factors" on pages 385 and 31, respectively. To our knowledge, except as disclosed in this Draft Red Herring Prospectus, there are no known factors which we expect to have a material adverse effect on our income.
FUTURE RELATIONSHIP BETWEEN COST AND INCOME
Other than as described in "Risk Factors" and this section, there are no known factors that might affect the future relationship between cost and income.
SUPPLIERS
We rely on Cummins and Hyundai as key suppliers for our DG sets and MSLG businesses, respectively. In our Wind Power Business, our principal suppliers and service providers for wind turbine generators, as well as O&M services, are Vestas and GERI.
For further details, please see "Risk Factors Internal Risk Factors We have historically relied, and may continue to rely, on Cummins India and our top five suppliers for a significant portion of our materials and components. If these key suppliers fail to deliver the required quantities, meet delivery schedules, or adhere to specified quality standards or technical specifications, our business operations and financial condition could be adversely affected" on page 34.
COMPETITIVE CONDITIONS
We expect to continue to compete with existing and potential competitors. For details, please refer to the discussions of our competition in the sections "Risk Factors" and "Our Business" on pages 31 and 229, respectively.
SEASONALITY AND CYCLICALITY OF BUSINESS
Our revenues and results may be affected by seasonal factors. For example, inclement weather, including during the monsoon season, may delay or disrupt production and shipment of our goods. Further, some of our customers may have businesses, which may be seasonal in nature, and a downturn in demand for our products by such customers could reduce our revenue during such periods.
Revenue from our Operational Wind Power Projects is closely linked to electricity generation, which is largely determined by environmental and weather conditions at our project sites. Weather variability and seasonality can significantly influence power output and, consequently, profitability. Our investment decisions for each renewable project are informed by detailed on-site assessments of historical and expected environmental conditions. Despite these efforts, operational outcomes for renewable energy projects may still fluctuate due to natural seasonal and annual weather cycles. In addition, long-term shifts arising from climate change or other external developments, such as human-induced events, may affect power generation. The availability of wind directly influences electricity production. Factors such as cloudy weather, sandstorms, heavy rainfall, or insufficient wind can all lead to decreased output. For further information, see "Risk Factors Internal Risk Factors The performance of our Operational Wind Power Projects is significantly affected by seasonality, regulatory requirements, and environmental and physical conditions, all of which are subject to variability and unpredictability. Any adverse changes to these may negatively impact our business, financial condition, results of operations, and cash flows." on page 37.
NEW PRODUCTS OR BUSINESS SEGMENTS
Except as disclosed in "Our Business" on page 229, we have not announced and do not expect to announce in the near future any new products or business segments.
SIGNIFICANT DEVELOPMENTS AFTER MARCH 31, 2025 THAT MAY AFFECT OUR FUTURE RESULTS OF OPERATIONS
Except as disclosed elsewhere in this Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since March 31, 2025 that could materially and adversely affect or are likely to affect, the trading or profitability, or the value of our assets or our ability to pay our liabilities within the next 12 months.
Subsequent to March 31, 2025, the shareholders of our Company, by way of a resolution dated May 21, 2025, approved the issuance of bonus shares in the ratio of 3:1 for each equity share of face value 5 each. For further information, see "Restated Consolidated Financial Information Note 42" on page 342.
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