Propshop Events and Exhibitions Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our Restated Financial Statements for the Financial Years ended on March 31, 2025, 2024 and 2023 including the notes and significant accounting policies thereto and the reports thereon, which appear elsewhere in this Draft Prospectus. You should also see the section titled "Risk Factors" on page no. 23 of this Draft Prospectus, which discusses a number of factors and contingencies that could impact our financial condition and results of operations. The following discussion relates to our Company, unless otherwise stated, is based on Restated Financial Statements.

These Restated 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 Statutory Auditor which is included in this Draft Prospectus under the section titled "Financial Information - Restated Financial Statements" on page no. 179 of this Draft Prospectus. The Restated Financial Statements have been prepared on a basis that differs in certain material respects from generally accepted accounting principles in other jurisdictions, including US GAAP and IFRS. We do not provide a reconciliation of our Restated Financial Statements to US GAAP or IFRS and we have not otherwise quantified or identified the impact of the differences between Indian GAAP and U.S. GAAP or IFRS as applied to our Restated Financial Statements.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements because of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" on page nos.23 and 14 respectively, and elsewhere in this Draft Prospectus.

Accordingly, the degree to which the financial statements in this Draft Prospectus will provide meaningful information depends entirely on such potential investors level of familiarity with Indian accounting practices. Our Financial Year ends on March 31 of each year; therefore, all references to a particular Financial Year are to the 12-month period ended March

31 of that year. Please also refer to section titled "Certain Conventions, Presentation of Financial, Industry and Market Data and Currency of Presentation" on page no. 12 of this Draft Prospectus.

BUSINESS OVERVIEW

Our Company is an ISO 9001:2015 certified company, engaged in the manufacturing of poultry feed, integration and contract farming with poultry farmers. At present, our Company has a production capacity of 66,000 MT per annum of poultry feed which is spread over 0.901 hectare of land, situated in Survey No. 701/1, Gram Memdi, Mhow, Indore, Madhya Pradesh - 452020. Our manufacturing facility is located in a strategic location that provides easy access to raw materials and transportation.

Our Promoters Mr. Avneet Singh Bhatia, Mr. Dilraj Singh Bhatia, Mr. Sumeet Singh Bhatia and Mr. Kawaljeet Singh Bhatia laid down the foundation of our Company in the year, 2017. Our Promoters along with qualified team of professionals including veterinary doctors and lab technicians manage the Companys major operations and guide its strategic choices, are instrumental in our growth. Their industry acumen gives us a competitive advantage, allowing us to increase our presence in existing and target markets, and to identify and capitalize on new avenues for expansion.

We are an integrated poultry enterprise engaged in the hatching, rearing, and marketing of poultry, including day-old chicks, broiler chickens, and poultry feed. Our operations span the full poultry value chain from hatching fertile eggs and raising chicks under controlled bio-secure conditions through third-party partners, to contract farming of broilers and in-house feed production. This integrated model allows us to maintain strict quality control, improve operational efficiency, and ensure consistency across all stages of production. We work with a network of contract farmers and operate a dual-channel feed distribution system that enables us to cater to both internal and external demand across multiple States.

For further details, kindly refer to chapter titled "Our Business" beginning on page no. 123 of this Draft Prospectus.

KEY PERFORMANCE INDICATORS OF OUR COMPANY

The KPIs disclosed below have been used historically by our Company to understand and analyze the business performance, which in result, help us in analysing the growth in comparison to our peers.

( in Lakhs, except EPS, % and ratios)

Key Financial Performance	Financial Year 2025	Financial Year 2024	Financial Year 2023
Revenue from operations (1)	56,630.84	36,867.62	8,787.24
Growth in Revenue from Operations (2)	53.61 %	319.56%	2337.04%

 

Gross Profit (3)	7,037.69	4,635.45	843.10
Gross Margin (4)	12.43%	12.57%	9.59%
EBITDA (5)	1,484.28	840.41	(0.74)
EBITDA (%) Margin (6)	2.62%	2.28%	(0.01%)
EBITDA Growth Period on Period (7)	76.61%	113785.17%	(102.20%)
EBIT (8)	1,422.40	788.59	(41.51)
EBIT Margin (9)	2.51%	2.14%	(0.47%)
ROCE (%) (10)	68.79%	61.10%	(3.97%)
Current Ratio (11)	1.12	1.06	1.23
Operating cash flow (12)	858.63	262.25	131.07
PAT (13)	1113.26	716.77	77.50
ROE (14)	50.95%	66.87%	21.82%
EPS (15)	37.11	23.89	2.58

Notes:

(1) Revenue from operations is the total revenue generated by our Company.

(2) Growth in Revenue from Operations is (Current period revenue - Prior period revenue)/ Prior period revenue. (3) Gross Profit is Revenue from operation-cost of goods sold (i.e. cost of material consumed, stock in trade and change in inventory-Other Income) (4) Gross Margin (%) is calculated as Gross Profit, divided by revenue from operations.

(5) EBITDA = Restated profit/ (loss) for the period/ year plus tax expense/(benefit) plus interest expense plus depreciation and amortization expense less Other Income.

(6) EBITDA Margin is calculated as EBITDA divided by Revenue from Operations.

(7) EBITDA Growth Period on Period is (Current period EBITDA - Prior period EBITDA) I Prior period EBITDA. (8) EBIT = Restated profit/ (loss) for the period/ year plus tax expense/ (benefit) plus interest expense less Other Income. (9) EBIT Margin is calculated as EBIT divided by Revenue from Operations.

(10) ROCE (Return on Capital Employed) (%) is calculated as EBIT divided by average capital employed. EBIT is calculated as EBITDA minus depreciation and amortization expenses. Average Capital employed is calculated as an average of two years of net worth and total debt including lease liabilities.

(11) Current Ratio: Current Asset over Current Liabilities.

(12) Operating Cash Flow: Net cash inflow from operating activities. (13) PAT is mentioned as PAT for the period

(14) RONW is calculated as Restated profit/ (loss) for the period/ year divided by shareholders fund. (15) EPS is the earning per share for the period post bonus.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to the "Note 2" forming Part of the Financial Statements of the Restated Financial Statements under chapter titled "Financial Information" on page no. 179 of this Draft Prospectus.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" on page no. 23 of this Draft Prospectus.

We believe that our financial performance and results of operations are influenced by a number of important factors, some of which are beyond our control, including without limitation, domestic competition, general economic conditions, changes in conditions in the regional markets in which we operate, changes in costs of raw materials and supplies and evolving government regulations and policies. Our operations and financial condition could also be affected by factors such as our ability to implement our growth strategy as regards product expansion, ability to secure government tenders, managing working capital cycles, competitive environment and occurrence of natural calamities in the area we operate.

RESULTS OF OUR OPERATIONS

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements of Company for the Financial Years ended March 31,2025, March 31, 2024 and March 31, 2023:

( in Lakhs)

	Financial Year 2024-25		Financial Year 2023-24		Financial Year 2022-23
	Amount	% of Total Income	Amount	% of Total Income	Amount	% of Total Income
Revenue from Operations	56630.84	99.70%	36867.62	99.51%	8787.24	98.47%
Other Income	168.94	0.30%	181.77	0.49%	136.86	1.53%
Total Income	56799.78	100.00%	37049.40	100.00%	8924.10	100.00%
Cost of Goods sold	49593.15	87.31%	32232.17	87.00%	7944.14	89.02%
Employee Benefits expenses	684.65	1.21%	422.30	1.14%	137.22	1.54%
Finance costs	100.94	0.18%	53.62	0.14%	48.44	0.54%
Depreciation and Amortization expenses	61.88	0.11%	51.82	0.14%	40.77	0.46%
Other expenses	4853.97	8.54%	3356.91	9.06%	702.36	7.87%
Total Expenses	55,294.59	97.35%	36116.82	97.48%	8872.95	99.43%
Profit /(Loss) before tax	1505.18	2.65%	932.58	2.52%	51.15	0.57%
Tax expense:
- Current Tax	380.05	0.67%	207.25	0.56%	-	-
- Deferred Tax	11.88	0.02%	8.56	0.02%	-26.34	-0.30%
-Short/ (excess) provision for tax relating to prior years
Net Tax expenses	391.93	0.69%	215.81	0.58%	-26.34	-0.30%
Profit/(Loss) after tax	1113.26	1.96%	716.77	1.90%	77.50	0.87%

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT

Total Income

Our total income for the Financial Year ended March 31, 2025, March 31, 2024 and March 31, 2023 were amounted to

56799.80 Lakhs, 37049.39 Lakhs and 8924.10 Lakhs, respectively.

Our revenue comprises of:

Revenue from operations

Our revenue from operations comprises of revenue from the sale of our product i.e. commercial broiler and feed sales. Our revenue from operations amounted to 56630.84 Lakhs, 36867.62 Lakhs and 8787.24 Lakhs representing to 99.70%, 99.51% and 98.47% of our total income for Financial Year ended March 31,2025, March 31, 2024 and March 31,2023, respectively.

Other income

Other income comprises of feed processing income and interest on deposits Our other income amounted to 168.94 Lakhs, 181.77 Lakhs and 136.86 Lakhs representing to 0.30%,0.49% and 1.53% of our total income for the Financial Year ended March 31, 2025, March 31, 2024 and March 31, 2023, respectively.

Expenses

Our total expenses for the Financial Year ended March 31,2025, March 31, 2024 and March 31, 2023 amounted to 55294.59 Lakhs, 36116.82 Lakhs and 8872.95 Lakhs, respectively.

Our expenses primarily consist of the following:

Cost of goods sold

Cost of materials consumed and changes in inventory of finished goods amounted to 49593.15 Lakhs, 32232.17 Lakhs, and 7944.14 Lakhs for the Financial Year ended March 31,2025, March 31, 2024 and March 31, 2023, respectively representing to 87.31%, 87.00%, and 89.02% of the total income, respectively.

Employee benefits expense

Employee benefits expenses consist of salaries and wages, contribution to provident fund and other funds, gratuity, directors remuneration and staff welfare expenses. Employee benefits expenses for the Financial Year ended March 31,2025, March 31, 2024 and March 31, 2023 amounted to 684.65 Lakhs, 422.30 Lakhs, and 137.22 Lakhs, respectively which represent to 1.21%, 1.14 %, and 1.54% of our total income, respectively.

Finance Costs

Finance cost consists of interest on borrowings, interest on trade payables, delayed or deferred payment of taxes and other borrowing costs amounted to 100.94 Lakhs, 53.62 Lakhs, and 48.44 Lakhs for the Financial Year ended March 31,2025, March 31, 2024, and March 31, 2023, which represent to 0.18%, 0.14%, and 0.54% of our total income, respectively.

Depreciation and Amortization

Depreciation and amortization represent depreciation on property, plant and equipment. Depreciation and amortization expense amounted to 61.88 Lakhs, 51.82 Lakhs, and 40.77 Lakhs for the Financial Year ended March 31,2025, March 31, 2024, and March 31, 2023, respectively which represent to 0.11%, 0.14%, and 0.46% of our total income, respectively.

Other expenses

Other expenses consist of farm expenses, feedmill expenses and administrative expenses amounted to 4853.97 Lakhs, 3356.91 Lakhs, and 702.37 Lakhs for the Financial Year ended March 31,2025, March 31, 2024, and March 31, 2023, respectively which represent to 8.54%, 9.06%, and 7.87% of our total income, respectively.

Financial Year 2025 compared to Financial Year 2024

Total Income

Our total income increased by 53.31% from 37049.39 Lakhs in Financial Year ended March 31, 2024, to 56799.78 Lakhs in Financial Year ended March 31, 2025, primarily due to an increase in revenue from operations.

Revenue from operations

Our revenue from operations increased by 53.61% from 36867.62 Lakhs in Financial Year ended March 31, 2024, to

56630.84 Lakhs in Financial Year ended March 31, 2025, primarily on account of an increase in number of contracts with farmers for rearing of chicks.

Other Income

The decrease in other income by 7.06% from 181.77 Lakhs in Financial Year ended March 31, 2024 to 168.94 Lakhs in Financial Year ended March 31, 2025 was primarily due to decrease in feed processing income.

Expenses

Total expenses increased by 53.10% from 36116.82 Lakhs in Financial Year ended March 31, 2024, to 55294.59 Lakhs in Financial Year ended March 31, 2025 primarily due to reasons as discussed below:

Cost of goods sold

Cost of materials consumed and changes in inventories increased by 53.86% from 32232.17 Lakhs in Financial Year ended March 31, 2024, to 49593.15 Lakhs in Financial Year ended March 31, 2025, primarily due to increase in volume. It is in line with the increase in revenue from operation.

Employee benefits expense

Employee benefits expense increased by 62.12% from 422.30 Lakhs in Financial Year ended March 31, 2024, to 684.65

Lakhs in Financial Year ended March 31, 2025, primarily due to increase in salaries and wages, and directors remuneration and increase in number of employees during the year.

Finance costs

Finance costs increased by 88.25 % from 53.62 Lakhs in the Financial Year ended March 31, 2024, to 100.94 Lakhs in the Financial Year ended March 31, 2025, primarily due to an increase in interest expense and processing fees.

Depreciation and amortization

Depreciation and amortization expenses increased by 19.41% from 51.82 Lakhs in Financial Year ended March 31, 2024, to 61.88 Lakhs in Financial Year ended March 31, 2025, primarily on account of addition in property, plant and equipment.

Other expenses

Other expenses increased by 44.60% from 3356.91 Lakhs in Financial Year ended March 31, 2024, to 4853.97 Lakhs in Financial Year ended March 31, 2025, primarily due to increase in growing charges paid to the farmers for rearing of chicks.

Profit after tax

The profit after tax increase from 716.77 Lakhs in Financial Year ended March 31, 2024, to 1113.26 Lakhs for Financial Year ended March 31, 2025. The increase in profit after tax and PAT margin for Financial Year 2025 as compared to Financial Year 2024 was primarily on account of increase in revenue from operations by 53.32% from 36867.62 Lakhs to 56630.84 Lakhs.

Financial Year 2024 compared to Financial Year 2023

Total Income

Our total income increased by 315.16% from 8924.10 Lakhs in Financial Year ended March 31, 2023, to 37049.40 Lakhs in Financial Year ended March 31, 2024, primarily due to increase in revenue from operation from 8787.24 Lakhs to

36867.62 Lakhs, and other reasons as discussed below:

Revenue from operations

Our revenue from operations increased by 319.56% from 8787.24 Lakhs in Financial Year ended March 31, 2023, to

36867.62 Lakhs in Financial Year ended March 31, 2024, on account of increase in number of contracted poultry farms resulting in an increase in production of commercial broiler. Further, we also expanded our business in Chhattisgarh State in Financial Year 2023-24 and on account of this number of customers has also been increased. Hence, increase in numbers of customers had a direct positive impact on our production capabilities and consequently sales of our products.

Other Income

The increase in other income by 32.81% from 136.86 Lakhs in Financial Year ended March 31, 2023, to 181.77 Lakhs in Financial Year ended March 31, 2024, Lakhs was primarily due to following reasons:

(a) Interest received from MPEB/Other:

The increase in Interest received from 0.57 Lakhs to 1.48 Lakhs in Financial Year ended March 31,2024 as compared to Financial Year ended March 31,2023 was on account of increased security deposit of MPEB and Mandi Deposit from 13.36

Lakhs to 23.18 Lakhs.

(b) Feed processing charges:

The increase in feed processing charges income from 136.29 Lakhs to 180.29 Lakhs in Financial Year ended March 31,2024 as compared to Financial Year ended March 31,2023, the increase in feed processing charges income on account of increase in market demand and production capabilities.

Expenses

Total expenses increased by 307.04% from 8872.95 Lakhs in Financial Year ended March 31, 2023, to 36116.82 Lakhs in Financial Year ended March 31,2024 primarily due to reasons as discussed below:

Cost of goods sold

Cost of materials consumed increased by 305.74% from 7944.14 Lakhs in Financial Year ended March 31, 2023, to

32232.17 Lakhs in Financial Year ended March 31, 2024, primarily due to increase in raw material consumption in line with increase in revenue form operation.

Employee benefits expense

Employee benefits expense increased by 207.75% from 137.22 Lakhs in Financial Year ended March 31, 2023, to 422.30

Lakhs in Financial Year ended March 31, 2024, primarily due to increase in salaries and wages, gratuity and staff welfare expenses and increase in number of employees during the year.

Finance costs

Finance costs increased by 10.69% from 48.44 Lakhs in the Financial Year ended March 31, 2023, to 53.62 Lakhs in the Financial Year ended March 31, 2024, primarily due to an increase in interest expense and bank charges.

Depreciation and amortization

Depreciation and amortization expenses increased by 27.10% from 40.77 Lakhs in Financial Year ended March 31, 2023, to 51.82 Lakhs in Financial Year ended March 31, 2024, primarily on account of higher asset base as compared to previous Financial Year.

Other expenses

Other expenses increased by 377.95% from 702.36 Lakhs in Financial Year ended March 31, 2023, to 3356.91 Lakhs in Financial Year ended March 31, 2024, on account of the increased revenue.

Profit after tax

The profit after tax increase from 77.50 Lakhs in Financial Year ended March 31, 2023, to 716.77 for Financial Year ended March 31,2024. The increase in profit after tax and PAT margin for Financial Year 2024 as compared to Financial Year 2023 was primarily on account of increase in revenue from operations by 319.56% from 8787.24 Lakhs to 36867.62 Lakhs.

CASH FLOWS

The following table sets forth our cash flows for the period indicated:

( in Lakhs)

Particulars	Financial Year 2024-25	Financial Year 2023-24	Financial Year 2022-23
Net cash flow from/ (used in) operating activities	858.63	262.25	131.07
Net cash flow from/ (used in) investing activities	(129.09)	(24.24)	(3.69)
Net cash flow from/ (used in) financing activities	(193.46)	(236.71)	(169.48)
Net increase/(decrease) in cash and cash equivalents	536.08	1.31	(42.10)
Cash and cash equivalents at the beginning of the year	21.50	20.20	62.30
Cash and cash equivalents at the end of the year	557.58	21.50	20.20

Cash Flows from Operating Activities

Net cash from operating activities for Financial Year 2024-25 was at 858.63 Lakhs as compared to the profit before tax at

1505.18 Lakhs while for Financial Year 2023-24 net cash from operating activities was at 262.25 Lakhs as compared to profit before tax at 932.58 Lakhs.

Net cash from operating activities for Financial Year 2023-24 was at 262.25 Lakhs as compared to the profit before tax at

932.58 Lakhs while for Financial Year 2022-23 net cash from operating activities was at 131.07 Lakhs as compared to the profit before tax at 51.15 Lakhs.

Cash flows from Investment Activities

In the Financial Year 2024-25, the net cash from investing activities was (129.09) Lakhs. This was mainly due to payment towards property, plant and equipment.

In the Financial Year 2023-24, the net cash from investing activities was (24.24) Lakhs. This was mainly due to payment towards property, plant and equipment.

In the Financial Year 2022-23, the net cash from investing activities was (3.69) Lakhs. This was mainly due to payment towards property, plant and equipment.

The year wise details are as under:

( in Lakhs)

Particulars	Financial Year 2024-25	Financial Year 2023-24	Financial Year 2022-23
Purchase of Property, Plant and Equipment (net of subsidy)	(139.39)	(25.72)	(4.26)
Interest earned	1.89	1.48	0.57
Purchase of mutual fund	(1600)	-	-
Sale of mutual fund	1608.41	-	-
Advances Paid	(75.00)

 

Advances Received	75.00
Net cash flow from investing activities	(129.09)	(24.24)	(3.69)

Cash Flows from Financing Activities

In the Financial Year 2024-25, the net cash from financing activities was (193.46) Lakhs. This was on account of repayment of long-term borrowings and interest paid on loans and finance charges.

In the Financial Year 2023-24, the net cash from financing activities was (236.71) Lakhs. This was on account of repayment of long-term borrowings and interest paid on loans and finance charges.

In the Financial Year 2022-23, the net cash from financing activities was (169.48) Lakhs. This was on account of repayment of long-term borrowings and interest paid on loans and finance charges.

The year wise details are as under:

( in Lakhs)

Particulars	Financial Year 2024-	Financial Year 2023-	Financial Year 2022-
	25	24	23
Decrease in Long term borrowings	(125.02)	(205.38)	(229.25)
Increase in Short term borrowings	32.51	22.29	108.21
Interest and finance charges	(100.94)	(53.62)	(48.44)
Net cash flow from financing activities	(193.46)	(236.71)	(169.48)

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

Except as described in this Draft Prospectus, during the period under review there have been no other events or transactions that, to our knowledge, may be described as "unusual" or "infrequent".

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

Other than as described in the section titled "Risk Factors" beginning on page no. 23 of this Draft Prospectus, to our knowledge there are no known significant economic changes that have or had or are expected to have a material adverse impact on revenues or income of our Company from continuing operations.

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

Other than as described in this Draft Prospectus, particularly in the sections "Risk Factors" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on page nos. 23 and 219, respectively, to our knowledge, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our sales, revenues or income from continuing operation.

4. Future changes in relationship between costs and revenues

To the best of our knowledge, there are no future relationship between cost and revenue that would be expected to have a material adverse impact on our operations and revenues. However, any uncertain change in supply chain can affect the profitability of the Company.

5. Increases in net sales or revenue and introduction of new services or increased sales prices. Increases in our revenues are by and large linked to increases in the volume of business.

6. Status of any publicly announced new service or business segment

Our Company has not announced any new services and segment / scheme, other than as disclosed in this Draft Prospectus.

7. Seasonality of business

Our Company is engaged in the manufacturing of poultry feed, integration and contract farming with poultry farmers and our business is not subject to seasonal fluctuation typically seen in consumer-driven markets.

8. Dependence on few customers/ clients

As described in this Draft Prospectus, particularly in the sections "Our Business" on page no. 123, to our knowledge, we are not dependent on few customers/clients.

9. Competitive conditions

We expect to continue to compete with existing and potential competitors. We have, over a period of time, developed certain competitive strengths.

10. Details of significant developments after the date of last balance sheet i.e. March 31, 2025

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