Praruh Technologies Ltd Management Discussions

You should read the following discussion in conjunction with our restated financial statements attached in the chapter titled "Financial Information of the Company" beginning on page no. 180 You should also read the section titled "Risk Factors" on page no 29 and the section titled "Forward Looking Statements" on page no 22 of this Draft Red Herring Prospectus, which discusses a number of factors and contingencies that could affect our financial condition and results of operations. The following discussion relates to us, and, unless otherwise stated or the context requires otherwise, is based on our Restated Financial Statements.

Our financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations and restated as described in the report of our auditor which is included in this Draft Red Herring

Prospectus under "Financial Statements". The Restated Financial Information has been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. Our financial year ends on March 31 of each year, and all references to a particular financial year are to the twelve-month period ended March 31 of that year.

Business Overview

Our Company was originally incorporated as a Private Limited Company under the name of "Praruh Private Limited" on November 15, 2019 under the provisions of the Companies Act, 2013 with the Registrar of Companies, Central Registration Centre. Further pursuant to a resolution passed by our shareholders at extra ordinary general meeting held on February 15, 2024, name of our Company was changed from "Praruh Private Limited" to "Praruh Technologies Private Limited" and a fresh Certificate of Incorporation pursuant to change in name of the Company dated March 22, 2024 was issued by the Registrar of Companies, Central Registration Centre. Subsequently our Company was convertd into Public Limited pursuant to resolution passed by our shareholders at extra ordinary general meeting held on March 24, 2024 and a fresh Certificate of Incorporation pursuant to conversion into public limited dated June 27, 2024 issued by the Registrar of Companies, Central Processing Centre. The Corporate Identification Number of our Company is U72900UP2019PLC123393.

Praruh means to grow. The company was founded with the goal of assisting businesses in growing by addressing their unique IT and data needs through end-to-end system Integration solutions and exceptional service experience. The company provides turnkey solutions and best practices in ICT systems and infrastructure to a wide range of industries and organizations.

Praruh is a leading ICT system integration firm dedicated to transforming businesses and driving growth through comprehensive technology solutions. The company specializes in a broad spectrum of services, including Hardware, Applications, Data Centre, Networking, Storage, Security, Audio-Video Integration and Collaboration Solutions. By offering turnkey solutions and leveraging best practices in ICT systems and infrastructure, Praruh addresses the diverse needs of various industries and organizations, ensuring that each solution is both effective and aligned with the clients business strategy.

What sets Praruh apart is its consulting-led approach, which combines deep technical expertise with a focus on exceptional service delivery. The companys extensive investment in developing technical capabilities, support infrastructure, and engineering services allows it to manage complex IT projects with precision. This commitment is particularly evident in its data center consolidation projects and similar initiatives, where Praruhs expertise proves invaluable.

Service quality is a cornerstone of Praruhs philosophy. The company boasts a highly certified and trained team of consulting sales and services professionals who provide 24/7 support, ensuring that any IT challenge is met with prompt and effective solutions. This dedication to service excellence has earned Praruh a strong reputation across both the private and public sectors, where its turnkey solutions have consistently delivered maximum value and satisfactionPromoters of our company are Mr. Vishal Prakash, Mr Amar Deep Sharma and Mr. Rahul. Our promoters have rich experience of more than 18 years, 18+ years and 17 years respectively. For detailed information on our

Promoters and Promoters Group, please refer to Chapter titled "Our Promoters & Promoters Group" beginning on page no 172 of this Draft Red Herring Prospectus.

Human capital is a strong focus for our Company, with our employee strength expanding to a team of over 47 employees and the employee are skilled in their respective field.

FINANCIAL SNAPSHOT

The following table sets forth a breakdown of our revenue from operations, as well as other key performance indicators, for the periods indicated:

(Amount in lakh, except EPS, % and ratios)

Particulars	Financial Year ended March 31, 2024	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022
Revenue from operations (1)	6143.82	2796.70	2026.06
Revenue CAGR (%) from F.Y. 2021-2024(2)		44.74%
EBITDA(3)	1049.68	317.71	208.10
EBITDA (%) Margin(4)	17.09%	11.36%	10.27%
EBITDA CAGR (%) from F.Y. 2021-2024(5)		66.34%
EBIT(6)	974.71	311.41	202.38
ROCE (%)(7)	61.27%	63.86%	77.06%
Current ratio(8)	1.01	1.20	1.17
Operating cash flow(9)	215.85	103.36	(162.83)
PAT(10)	654.48	216.25	146.04
PAT Margin (11)	10.65%	7.73%	7.21%
Net Worth (12)	1136.75	482.27	256.03
ROE/ RONW(13)	57.57%	44.84%	57.04%
EPS(14)	327.24	173.00	307.45

Note:

(1) Revenue from operations is the revenue generated from operations by our Company. (2) Revenue CAGR: The three-year compound annual growth rate in Revenue. [(Ending Value/Beginning Value) ^ (1/N)]-1

(3) EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses - Other Income (4) EBITDA Margin is calculated as EBITDA divided by Revenue from Operations (5) EBITDA CAGR: The three-year compound annual growth rate in EBITDA. [(Ending Value/Beginning Value) ^ (1/N)]-1 (6) EBIT is Earnings before Finance Cost and taxes.

(7) ROCE: Return on Capital Employed is calculated as EBIT divided by capital employed, which is defined as shareholders equity plus long-term debt. (8) Current Ratio: Current Asset over Current Liabilities (9) Operating Cash Flow: Net cash inflow from operating activities (10) PAT is mentioned as profit after tax for the period. (11) PAT Margin is calculated as PAT for the period/year divided by revenue from operations. (12) Net Worth means the aggregate value of the paid-up share capital and reserves and surplus of the company. (13) ROE: Return on Equity is calculated as PAT divided by average shareholders equity (14) EPS: Earning per share is calculated as PAT divide by Weighted No. of equity shares.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to Note 2 of Restated Financial Statements beginning on page no 180 of this Draft Red Herring Prospectus.

Factors Affecting our Results of Operations

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section titled "Risk Factors" on page no 29 of this Draft Red Herring prospectus. The following is a discussion of certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

Any adverse changes in central or state government policies;

1. Any qualifications or other observations made by our statutory auditors which may affect our results of operations;

2. Loss of one or more of our key customers and/or suppliers;

3. An increase in the productivity and overall efficiency of our competitors;

4. Our ability to maintain and enhance our brand image;

5. Our reliance on third party suppliers for our raw materials;

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

7. Changes in technology and our ability to manage any disruption or failure of our technology systems;

8. Changes in political and social conditions in India or in countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

9. The performance of the financial markets in India and globally;

10. Occurrences of natural disasters or calamities affecting the areas in which we have operations; 11. Market fluctuations and industry dynamics beyond our control;

12. Our ability to compete effectively, particularly in new markets and businesses; 13. Changes in foreign exchange rates or other rates or prices;

14. Inability to collect our dues and receivables from, or invoice our unbilled services to, our customers, our results of operations; 15. Other factors beyond our control;

16. Our ability to manage risks that arise from these factors;

17. Changes in domestic and foreign laws, regulations and taxes and changes in competition in our industry; 18. Termination of customer contracts without cause and with little or no notice or penalty; and

19. Inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals or noncompliance with and changes in, safety, health and environmental laws and other applicable regulations, may adversely affect our business, financial condition, results of operations and prospects.

Result of Operations

The following table sets forth select financial data from restated profit and loss accounts for the financial year(s) ended on March 31, 2024, March 31, 2023 and March 31, 2022 and the components of which are also expressed as a percentage of total income for such periods.

( in Lakh, except for percentage)

Particulars	For the year ended	% of Total Revenue	For the year ended	% of Total Revenue	For the year ended	% of Total Revenue
	March 31, 2024		March 31, 2023		March 31, 2022
Revenue from operation	6,143.82	99.64	2796.70	99.72	2026.06	99.90
Other income	22.05	0.36	7.73	0.28	1.93	0.10
Total Income	6,165.87	100.00	2804.43	100	2027.99	100.00
(I + II)
Cost of Services Consumed	3199.81	51.89	1370.32	48.86	545.52	26.90
Purchase	1409.40	22.85	783.30	27.93	1111.99	54.83
Changes in Inventories of	-	-	-	-	3.57	0.17
Finished Goods
Employee benefits expense	316.23	5.13	168.17	6.69	91.63	4.51
Finance Cost	100.51	1.63	21.68	0.77	5.61	0.27
Depreciation and amortization expense	74.97	1.21	6.31	0.22	5.72	0.28
Other expenses	190.74	3.09	164.92	5.88	67.18	3.31
Total Expenses	5291.67	85.82	2514.71	89.66	1831.22	90.29
Profit / (Loss) before Tax	874.20	14.17	289.72	10.33	196.77	9.70
Tax Expenses	219.10	3.55	73.94	2.64	51.28	2.53
Deferred tax	(0.63)	-0.01	0.47	0.02	0.54	0.03
Net Profit after tax	654.48	10.61	216.25	7.71	146.04	7.20

Main Components of our Profit and Loss Account

Revenue from operations:

Revenue from operations mainly consists of revenue from sale of services.

Other Income:

Our other income primarily comprises of Interest Income and other non-operating income.

Expenses:

Companys expenses consist of Cost of materials Consumed, Purchase Cost, Change in Inventory, Finane Cost Employee benefits expense, Depreciation expenses and other expenses.

Employee benefits expense:

Our employee benefits expense primarily comprises of Salaries, wages & bonus expenses, gratuity expenses, Staff welfare expenses etc.

Depreciation and Amortization Expenses:

Depreciation includes depreciation on Furniture & Fixtures, Office Equipment, and Computer Equipment etc.

Other Expenses:

Our other expenses consist of Business Promotion Expenses, Festival Expenses, DS Charges, Electricity, Meeting & Refreshment Expenses, Insurance Charges, Office Expenses, Office Rent, Internet & Telephone expenses, Audit Fees, Professional & Consultancy Fees, Traveling and Conveyance, and Miscellaneous Expenses etc.

RESULTS OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 2024

Total Income:

Total income for the period starting from April 1, 2023 to March 31, 2024 stood at 6165.87 Lakhs. The total income consists of revenue from the sale of services goods & export of services and the other income.

Revenue from Operations

During the period, the net revenue from operation of our Company was 6143.82 Lakhs. The main contribution to the revenue from operations is the sale of Services, goods and export of services.

During the period, the other income of our Company stood at 22.05 Lakhs. The main components of the other income are interest income and liabilities no longer required (written off).

Employee benefits expense:

During the period, our employee benefits expense was 316.23 Lakhs for the year ended March 31, 2024, which included salaries, wages and bonus of 294.53 Lakhs and gratuity, perquisite, employee insurance, PF, ESI and staff welfare expenses of 21.70 Lakhs.

Depreciation and Amortization Expenses:

During the period, the Depreciation and amortization charges of our Company stood at 74.97 Lakhs for the period ended March 31, 2024.

Other Expenses:

Our other expenses for the for the year ended March 31, 2024 amounted to 183.74 Lakhs, which primarily included business promotion & marketing 13.86 lakhs, meeting and refreshment expenses 23.97 lakhs, office expenses

13.33 lakhs, office rent 19.08 lakhs, professional fee 33.02 lakhs and travelling and conveyance expenses 64.15 lakhs

Restated profit after tax:

As a result of the above factors, our restated profit after tax for the year ended March 31, 2024 was 654.48 Lakhs

FISCAL 2024 COMPARED WITH FISCAL 2023

Set forth below is a discussion of our results of operations for financial year ended March 31, 2024 over March 31, 2023

Total Income:

Total income increased from 2804.43 Lakh in year ended March 31, 2023 to 6165.87 Lakhs in year ended March 31, 2024 with a resultant increase of 119.86% in year ended March 31, 2024 mainly due to restricting of business.

Revenue from Operations:

Total reveue from operations increased from 2796.70 Lakh in year ended March 31, 2023 to 6143.82 Lakhs in year ended March 31, 2024 with a resultant increase of 119.68% in year ended March 31, 2024 mainly due to restricting of business.

Other Income:

Other Income increased from 7.73 Lakhs in year ended March 31, 2023 to 22.05 Lakhs in year ended March 31, 2024 with a resultant increase of 185.25% in year ended March 31, 2024

Cost of Matetial Consumed:

Our Cost of material consumed increased from 1370.32 Lakhs in year ended March 31, 2023 to 3199.81 Lakhs in year ended March 31, 2024 with a resultant increase of 133.51% in year ended March 31, 2024

Purchase:

Our Purchases increased from 783.3 Lakhs in year ended March 31, 2023 to 1409.40 Lakhs in year ended March

31, 2024 with a resultant increase of 79.93 % in year ended March 31, 2024

Employee benefits expense:

Employee Benefit Expenses increased from 168.17 Lakhs in year ended March 31, 2023 to 316.23 Lakhs in year ended March 31, 2024 with a resultant increase of 88.04 % in year ended March 31, 2024 mainly due to increase in the salaries including incentives.

Depreciation and Amortization Expenses:

Depreciation and amortization incurred in year ended 6.31 Lakhs in year ended March 31, 2024 with a resultant increase of 1088.11 % in year ended March 31, 2024 due to increase in the asset base of the company i.e. purchase of land and building plant and equipment.

Other Expenses:

Other expenses increase from 164.92 Lakhs in year ended March 31, 2023 to 190.74 Lakhs in year ended March 31, 2024 with a resultant increase of 15.65% in year ended March 31, 2024.

Restated profit after tax:

Net Profit after tax increased from 216.25 Lakhs in year ended March 31, 2023 to 654.48 Lakhs in year ended March 31, 2024 with a resultant increase of 202.64 % in year ended March 31, 2024.

FISCAL 2023 COMPARED WITH FISCAL 2022

Set forth below is a discussion of our results of operations for financial year ended March 31, 2023 over March 31, 2022

Total Income:

Total income increased from 2027.99 Lakh in year ended March 31, 2022 to 2804.43 Lakhs in year ended March 31, 2024 with a resultant increase of 38.29% in year ended March 31, 2023 mainly due to restricting of business.

Revenue from Operations:

Total reveue from operations increased from 2026.06 Lakh in year ended March 31, 2022 to 2796.70 Lakhs in year ended March 31, 2023 with a resultant increase of 38.04% in year ended March 31, 2024 mainly due to restricting of business.

Other Income:

Other Income increased from 1.93 Lakhs in year ended March 31, 2022 to 7.73 Lakhs in year ended March 31, 2024 with a resultant increase of 299.73% in year ended March 31, 2023

Cost of matetial Consumed:

Our Cost of material consumed increased from 545.52 Lakhs in year ended March 31, 2022 to 1370.32 Lakhs in year ended March 31, 2023 with a resultant increase of 151.20% in year ended March 31, 2023.

Purchase:

Our Purchases decreased from 1,111.9 Lakhs in year ended March 31, 2022 to 783.30 Lakhs in year ended March

31, 2023 with a resultant decrese of 29.56 % in year ended March 31, 2023.

Employee benefits expense:

Employee Benefit Expenses increased from 91.63 Lakhs in year ended March 31, 2022 to 168.17 Lakhs in year ended March 31, 2023 with a resultant increase of 83.54 % in year ended March 31, 2024 mainly due to increase in the salaries including incentives.

Depreciation and Amortization Expenses:

Depreciation and amortization incurred in year ended 6.31 Lakhs in year ended March 31, 2023 with a resultant increase of 10.17 % in year ended March 31, 2023 due to increase in the asset base of the company i.e. purchase of equipment.

Other Expenses:

Other expenses increase from 67.18 Lakhs in year ended March 31, 2022 to 164.92 Lakhs in year ended March 31, 2023 with a resultant increase of 145.49 % in year ended March 31, 2023.

Restated profit after tax:

Net Profit after tax increased from 146.04 Lakhs in year ended March 31, 2022 to 216.25 Lakhs in year ended March 31, 2023 with a resultant increase of 48.08 % in year ended March 31, 2023.

CASH FLOWS

The following table sets forth certain information relating to our cash flows in the periods indicated:

( in Lakhs)

Particulars	FY 2023-24	FY 22-23	FY 21-22
Net Cash flow from/ (used in) operating Activities	215.85	103.36	(162.83)
Net cash flow from/ (used in) investing activities	(1378.77)	(149.75)	(3.60)
Net cash flow from/ (used in) financing activities	1171.42	50.96	138.97
Cash and cash equivalents at the beginning of the period	7.21	2.65	30.11
Cash and cash equivalents at the closing of the period	15.71	7.21	2.65

Cash Flows from Operating Activities

For Financial Year Ended March 31, 2024

Net cash generated for operating activities was 215.85 Lakhs in March 31, 2024. Profit before tax was 874.20 Lakhs in March 31, 2024. Adjustments primarily consisted of depreciation of 74.97 Lakhs.

Our operating cash flow before working capital adjustments was 791.17 Lakhs in March 31, 2024. The working capital adjustments in March 31, 2024 included, decrease in Long term provisions 8.31 lakhs, Increase in other non current assets (56.93) lakhs, Increase in Trade payables 152.58, Increase in other current liabilities 40.71 lakhs, Increase in Trade Receivable (658.17) Lakhs, Decrease in Current Tax laiblities (175.05) lakhs, Increase in Other Current Assets (52.84) Lakhs.

For Financial Year Ended March 31, 2023

Net cash generated for operating activities was 103.36 Lakhs in March 31, 2023. Profit before tax was 289.72 Lakhs in March 31, 2023. Adjustments primarily consisted of depreciation of 6.31 Lakhs.

Our operating cash flow before working capital adjustments was 283.41 Lakhs in March 31, 2023. The working capital adjustments in March 31, 2023 included, Increase in Long term provisions 0.84 lakhs, Increase in other non current assets (7.14) lakhs, Increase in Trade payables 122.70, Increase in other current liabilities 23.64 lakhs, Increase in Trade Receivable (245.66) Lakhs, Decrease in Current Tax laiblities (81.73) lakhs, Increase in Other Current Assets (5.31) Lakhs.

For Financial Year Ended March 31, 2022

Net cash used in operating activities was (162.83) Lakhs in March 31, 2022. Profit before tax was 196.77 Lakhs in March 31, 2022. Adjustments primarily consisted of depreciation of 5.72 Lakhs.

Our operating cash flow before working capital adjustments was 190.69 Lakhs in March 31, 2022. The working capital adjustments in March 31, 2022 included, Increase in Long term provisions 1.15 lakhs, Increase in other non current assets (53.26) lakhs, Increase in Trade payables 603.46, Increase in other current liabilities 45.08 lakhs, Increase in Trade Receivable (907.47) Lakhs, Decrease in Current Tax laiblities (43.53) lakhs, Decrease in Inventory

3.57 lakhs, Increase in Other Current Assets (14.67) Lakhs.

Cash Flows from Investment Activities

For Financial Year Ended March 31, 2024

Net cash used for investing activities for the year ended March 31, 2024 was ( 1378.77) Lakhs. This was primarily due to purchase of Fixed Assets of 1155.59 Lakhs and increase in non Current Investment 281.17 Lakhs, sale of fixed assets 57.98

For Financial Year Ended March 31, 2023

Net cash used for investing activities for the year ended March 31, 2023 was ( 149.75) Lakhs. This was primarily due to acquisition of fixed assets 4.47 interest & increase in non Current Investment 145.28 Lakhs.

For Financial Year Ended March 31, 2022

Net cash used for investing activities for the year ended March 31, 2022 was ( 3.60) Lakhs. This was primarily due to acquisition of fixed assets 3.60

Cash Flows from Financing Activities

For Financial Year Ended March 31, 2024

Net cash used in financing activities for the year ended March 31, 2024 was 1171.42 Lakhs, primarily due to increase in long term borrowing 448.74 Lakhs and decrease in short term borrowings 722.68 Lakhs.

For Financial Year Ended March 31, 2023

Net cash used in financing activities for the year ended March 31, 2023 was 50.96 Lakhs, primarily due to increase in equity 10.00 Lakhs due to increase in long term borrowing ( 1.22) Lakhs and decrease in short term borrowings

42.18 Lakhs

For Financial Year Ended March 31, 2022

Net cash used in financing activities for the year ended March 31, 2022 was 138.97 Lakhs, primarily due to increase in equity 9.00 Lakhs due to increase in long term borrowing ( 1.40) Lakhs and decrease in short term borrowings

131.38 Lakhs

Related Party Transactions

Related party transactions with certain of our promoters, directors and their entities and relatives primarily relates to remuneration, salary, loan and Issue of Equity Shares. For further details of related parties kindly refer chapter titled "Financial Statement as Restated" beginning on page no 180 of this Draft Red Herring Prospectus.

Information required as per Item (II) (C) (iv) of Part A of Schedule VI to the SEBI Regulations:

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. Except as disclosed in this Draft Red Herring Prospectus, there are no unusual or infrequent events or transactions in our Company.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

There are no significant economic changes that may materially affect or likely to affect income from continuing operations.

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

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

4. Future changes in relationship between costs and revenues

Other than as described in the sections "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on page nos 29, 122 and 209 respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Total turnover of each major industry segment in which our Company operates

The Company is operating in IT services industry. Relevant industry data, as available, has been included in the chapter titled "Industry Overview" beginning on page 97 of the Draft Red Herring Prospectus.

6. Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter "Our Business", our Company has not announced any new product or service.

7. Seasonality of business

Our Companys business is not seasonal in nature.

8. Competitive conditions

Competitive conditions are as described under the Chapters "Industry Overview" and "Our Business" beginning on page nos. 97 and 122 respectively of this Draft Red Herring Prospectus.

9. Details of material developments after the date of last balance sheet i.e., March 31, 2024.

After the date of last Balance sheet i.e., March 31, 2024, the following material events have occurred:

Resolution passed for approving the Initial Public Offer (IPO).

Conversion from a private limited company into a public limited June 27, 2024

Board Meeting held on August 21, 2024

Extraordinary General Meeting held on August 24, 2024.