Qualiance International Ltd Management Discussions

You should read the following discussion in conjunction with our restated financial statements attached in the chapter titled “Restated Financial Statements” beginning on page 151. You should also read the section titled “Risk Factors” on page 18 and the section titled “Forward Looking Statements” on page 17 of this 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 dated March 23, 2026 which is included in this 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 IF 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

We are engaged in the design, engineering, manufacture and export of performance garments for institutional, government and brand clients in international markets. We began operations as a partnership firm in 1994 and was incorporated as a company in 2006. Our product portfolio includes military uniforms, tactical outerwear, high-visibility workwear, weather-resistant and all-weather outerwear, police and border patrol uniforms, protective workwear and performance activewear.

We operate a manufacturing facility located in Tiruppur, Tamil Nadu with a total built up area of over 45,000 square feet over a land area of approximately 1,046.31 square meters and an installed capacity of 450,000 garment pieces per annum. The facility supports garment manufacturing activities from raw material sourcing and fabric development through external suppliers to the production of finished garments. Apart from the regular cut and sew operations in the manufacturing cycle, we also carry out specialized processes including seam sealing, bonded construction, ultrasonic welding, laser cutting and lamination

Over the past two decades, we have manufactured garments based on product specifications and compliance requirements of European military, government and institutional buyers. Our operations focus on the production of garments developed based on client specifications and performance requirements. We have maintained relationships with Swiss government and institutional clients. Our revenue from the sale of manufactured products is primarily derived from exports, which accounted for 98.82% for FY 2026, 93.87% for FY 2025 and 87.77% for FY 2024 of our revenue from operations.

Our client base is located across Europe, including Switzerland, and North America, including the United States. We supply garments to the various department of Government of Switzerland and European brands. For all stages of operations from sample development to shipment, we follow quality standards applicable in European markets. Our manufacturing facility includes a quality control system to monitor product standards. All fabrics and accessories used in production comply with international requirements, and test reports from recognized laboratories are obtained to support compliance.

The designs for the technical garments manufactured by the Company are provided by the customers. The Company manufactures such garments in accordance with the designs, specifications, technical drawings, patterns and quality requirements communicated by its customers from time to time. Further, during the design finalization and pre-production stages, the Company may provide design inputs and technical suggestions to its customers based on its knowledge of garment construction, manufacturing processes, and supply-chain and sourcing capabilities relating to fabrics, trims and accessories. However, the final design specifications and approvals remain with the respective customers.

We operate under multiple certifications and compliance frameworks as follows:

ISO 9001:2015	Quality Management Systems
ISO 14001:2015	Environmental Management Systems
ISO 45001:2018	Occupational Health & Safety
ISO 14064-1:2018	Greenhouse Gas emissions quantification and reporting
SA 8000	Social Accountability and workplace practices
SEDEX	SMETA audit standards for supply chain practice
Global Organic Textile Standard (GOTS)	Organic cotton garments
Global Recycle Standard (GRS)	Recycled polyester products

We also hold the status of Two Star Export House issued by the Government of India based on export performance.

Our Company is led by our Promoters, who are first and second generation entrepreneurs with extensive experience in the garment export industry and the technical garment segment. The Company benefits from the leadership of experienced and technically qualified Promoters. Vipul Badani, our Chairman & Managing Director, has over 30 years of experience, while Bhoomin R Badani, our Whole-Time Director & Chief Executive Officer, has more than 15 years of experience in the apparel manufacturing industry. The extensive experience of our Promoters has been instrumental in shaping the Companys vision and growth strategy. We believe that our ability to effectively market our products stems from the clear vision established by our Promoters and senior management, supported by their deep industry knowledge and expertise.

Key Performance Indicators of our Company

( In Lakhs except percentages and ratios)

	As of and for the year ending
Key Financial Performance	FY 2025-26	FY 2024-25	FY 2023-24
Revenue from operations(1)	7,689.11	5,307.24	3,722.94
EBITDA(2)	1,671.67	797.05	486.15
EBITDA Margin(3)	21.74%	15.02%	13.06%
PAT(4)	1,186.90	489.85	283.93
PAT Margin(5)	15.44%	9.23%	7.63%
RoCE(%)(6)	37.33%	21.16%	18.94%
RoE (%)(7)	61.56%	43.07%	85.93%
Net Worth(8)	2,473.65	1,382.25	892.40

Notes:

(1) Revenue from operation means revenue from operating activities

(2) EBITDA is calculated as Profit before tax + Depreciation + Interest Expenses - Other Income+ + Loss on sale of PPE + Assets Discarded (3) ‘EBITDA Margin is calculated as EBITDA as a percentage of revenue from operations. (4) ‘PAT represents total net profit after tax for the period/year available for parent equity shareholder. (5) ‘PAT Margin is calculated as PAT divided by revenue from operations. (6) ‘RoCE is calculated as EBIT divided by capital employed where (i) EBIT means PAT + Tax Expenses + interest expense (ii) Capital employed means Net worth (excluding revaluation reserve) + total current & non-current borrowings + DTL-DTA as appearing in financial statements. (7) ‘ROE is calculated as PAT (excluding of extra ordinary losses) as divided by Net worth (excluding revaluation reserve). (8) ‘Net worth means Equity share capital + Reserves and surplus (including Securities Premium, General Reserve and surplus in statement of profit and loss but excluding Revaluation Reserve).

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of “Statement of Significant Accounting Policies”, please refer to Annexure IV & Annexure V of Restated Financial Statements beginning on page 151 of this Red Herring Prospectus.

Factors Affecting our Results of Operations

1. Export of Knitted and Woven garments constitutes a significant portion of our business for which we do not have long-term sales contracts;

2. Our dependency on a limited number of customers for significant portions of our export revenues;

3. Fluctuations in the cost and availability of raw materials;

4. Adverse changes in domestic or global economic conditions;

5. Competition from existing or new players with greater financial or technological resources;

6. Delays or disruptions in our supply chain or distribution network;

7. Operational risks at our manufacturing facilities, including equipment failures, safety incidents, or compliance lapses;

8. Foreign exchange rate fluctuations impacting exports or imported inputs;

9. Changes in customer preferences or technological advancements that could affect product demand; 10. Any force majeure events, including natural disasters, pandemics, or geopolitical developments. 11. Changes in laws and regulations that apply to the industries in which we operate; 12. Failure to comply with quality standards may lead to cancellation of existing and future orders; 13. Any change in government policies resulting in increases in taxes payable by us; 14. The occurrence of natural disasters or calamities; 15. General economic, political and other risks that are out of our control; 16. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; 17. Companys ability to successfully implement its growth strategy and expansion plans; 18. Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate; 19. Inability to successfully obtain registrations in a timely manner or at all; 20. Occurrence of Environmental Problems & Uninsured Losses; 21. Concentration of ownership among our Promoters.

22. Other factors beyond our control

Discussion on Result of Operations

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements for the financial years March 31, 2026, March 31, 2025 and March 31, 2024.

( in Lakhs)

Particulars	March 31, 2026	% of Total Income	March 31, 2025	% of Total Income	March 31, 2024	% of Total Income
Revenue from Operations	7,689.11	94.98%	5,307.24	96.40%	3,722.94	97.62%
Other Incomes	406.28	5.02%	198.40	3.60%	90.81	2.38%
Total Income	8,095.39	100.00%	5 ,505.64	13,813.75	00.00%	100.
Expenses:
(a) Cost of Material Consumed	3,209.19	39.64%	3,142.27	57.07%	1,460.97	38.31%
(b) Purchase of Stock-in-Trade	-	-	-	-	-	-
(c) Changes in inventories of finished goods work-in-progress	119.36	(997.15)	1 .47%	(18.11) %	116.08	3.
(d) Employee Benefits Expenses	1,729.18	21.36%	1,380.02	25.07%	1,040.56	27.28%
(e) Finance Costs	374.86	4.63%	282.20	5.13%	156.42	4.10%
(f) Depreciation and Amortization	112.32	1	.39% 1	01.51	1 .	84%
Expense
(g) Other Expenses	944.63	11.67%	967.75	17.58%	612.78	16.07%
Total Expenses (a to g)	6,489.53	80.16%	4 ,876.59	8	8.57% 3	473.73
Profit before Exceptional/	1,605.86	19.84%	6 29.06	1	1.43%	340.02
Extraordinary items and tax
Exceptional item & Extraordinary	-	-	-	-	-	-
Items
Profit before Extraordinary Items and tax	1,605.86	19.84%	6 29.06	1	1.43%	340.02
Prior Period Expenses	-	-	-	-	-	-
Profit before tax	1,605.86	19.84%	6 29.06	1	1.43%	340.02
Tax Expense
a) Net Current Tax	436.74	5.39%	54.31	0.99%	-	-
b) Deferred Tax	(17.79)	(0.22%)	84.90	1.54%	56.10	1.47%
Restated Profit for the Period	1,186.90	14.66%	4 89.85	8.90%	283.93	7

Revenue from operations:

Revenue from operations mainly consists of revenue from sale of Goods Manufactured (Knitted and Woven) and Other Operating Revenue.

Other Incomes

Other income comprises of Interest on Deposit, Foreign Exchange Gain/Loss, Sundry Balance Written Back, ROSCTL Receipt, Sample Development Charges and Rebate & Discount received from Suppliers.

Total Expenses:

Total expenses consist of Cost of Material Consumed, Purchases of Stock in Trade, Change in inventories of Finished Goods and WIP, Employee benefits expense, Finance costs, Depreciation and amortization expenses and other expenses.

Cost of Material Consumed

Cost of Material consumed expenses primarily comprises of Purchase of Raw Material such as Accessories, Fabric, Spare Part Purchase and Yarn.

Change in inventories of Finished Goods and Work in progress

Change in inventories of stock in trade comprises of increase/ (decrease) in inventory of finished goods and work in progress and Finished goods mainly consists of Knitted and Woven Garments.

Employee benefits expense:

Employee benefits expense primarily comprises of Salary and Wages and Contribution to Provident Fund and Other Fund and Staff welfare expenses, Mediclaim for Staff, Director Remuneration and Gratuity expenses.

Finance Costs:

Our Finance cost includes Interest expense and Other Borrowing cost.

Depreciation and Amortization Expenses:

Depreciation and Amortization Expenses include Depreciation on Tangible Assets which further comprises of depreciation on Factory Building, Office Premises, Plant and Equipment, Motor Vehicles, Furniture & Fixtures, Computers and Office Equipment.

Other Expenses:

Other Expenses comprises of Other Direct Manufacturing Expense, Repairs & Maintenance, Advertising Charges and Sales Promotion, and Other Expenses which further comprises of Transportation & Freight, Audit Fees, Insurance, Office Expense, Legal & Professional Fees, License Expense, Miscellaneous Expenses, Telephone & Mobile Expenses, Printing & Stationery, Bank Charges, Rent Paid, Membership & Subscription, Postage & Courier Expenses and Travelling & Conveyance Expenses.

FINANCIAL YEAR 2026 COMPARED TO FINANCIAL YEAR 2025

Total Income:

The Total Income increased from FY 24-25 to FY 25-26, driven by an improvement in Revenue from Operations and Other Income. Total income grew by 47.04%, rising from 5,505.64 Lakhs in FY24-25 to 8,095.39 Lakhs in FY 25-26, which was due to growth in Revenue from Operations by 44.88% in FY 25-26 and Other Income which grew by 104.78% in FY 25-26. This overall growth reflects the companys operational performance during the year.

Revenue from Operations

During the financial year 2025-26, the revenue from operations of the Company reported a sales growth of 44.88 % from 5,307.24 lakhs in FY 2024-25 to 7,689.11 Lakhs in FY 2025-26, primarily driven by a 44.44% increase in sale of manufactured goods.

The significant increase in revenue in FY25-26 was due to increase in order volumes from existing customers and increase in manufacturing and supply of higher value products. Revenue from the top 3 customers increased from 4,696.91 lakhs in FY24-25 to 5,909.26 lakhs in FY25-26, representing an increase of 25.81%. During the same period, quantity supplied increased from 3,18,596 pieces in FY24-25 to 3,35,019 pieces in FY25-26, representing an increase of 5.15%. Further, the average realization per piece increased from 1,474.25 in FY24-25 to 1,854.78 in FY25-26, representing an increase of 25.81%.

The Company does not manufacture standardised garments. Products are manufactured based on specifications provided by customers for each order. Accordingly, realization per piece differs across products depending upon factors such as fabric used, accessories used and construction process involved in the manufacturing of the garment.

Top 3 Customer-wise increase was supported by increase in order quantities and average realizations, as detailed below:

Particulars	FY 24-25	FY 25-26	Growth
Quantity Sold (Pcs)	3,18,596	3,35,019	5.15%
Revenue ( in Lakhs)	4,696.91	5,909.26	25.82%
Average Realization per Piece ( )	1,474.25	1,854.78	25.81%

The increase in revenue in FY25-26 was attributable to: (i) increase in order volumes from top three customers

(ii) increase in average realization due to supply of higher value products during FY25-26.

Other Income:

During the financial year 2025-26, the other income of the Company increased by 104.78%, from 198.40 lakhs in FY 2024-25 to 406.28 lakhs in FY 2025-26. This increase was due to a rise in Interest from director which increased by 689.27% from 3.82 lakhs in FY 2024-25 to 30.15 lakhs in FY 2025-26 and Rebate & Discount from Supplier which increased by 935.83% from 1.20 lakhs in FY 2024-25 to 12.43 lakhs in FY 2025-26.

Total Expenses

The total expense for the financial year 2025-26 increases to 6,489.53 Lakhs from 4,876.59 lakhs in the Financial Year 2024-25 representing an increase of 33.08%. Such increase was due to increases in the volume of business operations of the Company.

Cost of Material Consumed

The Cost of Material Consumed comprises of Material Procured during the Year, Inventory at the Commencement and end of the Year. The Cost of Material Consumed for the financial year 2025-26 increases to 3,209.19 Lakhs from 3,142.27 lakhs in the

Financial Year 2024-25 representing an increase of 2.13%. This increase was due to a rise in opening stock of raw material and raw material in transit which increased by 89.46% from 524.46 lakhs in FY 2024-25 to 993.65 lakhs in FY 2025-26.

Change in inventories of Finished Goods and Work in progress

The Change in inventories of Finished Goods and Work in progress comprises of increase/(decrease) in inventory of Finished Goods and Work in progress in business operation. The Change in inventories of Finished Goods and Work in progress for the financial year 2025-26 was 119.36 Lakhs from (997.15) lakhs in the Financial Year 2023-24. The change was due to increase in the opening inventories of Finished Goods and WIP which increased to 1959.93 Lakhs in Financial Year 2025-26 as compared to 962.78 Lakhs in Financial Year 2024-25 representing as increase of 103.57% and decrease in closing inventories of Finished Goods and WIP which decreased to 1,840.58 Lakhs in Financial Year 2025-26 as compared to 1,959.93 Lakhs in Financial Year 2024-25 representing as decrease of 6.09%.

Employee benefits expense:

During the financial year 2025-26, the total Employee Benefits Expenses of the Company increased by 25.30%, from 1,380.02 lakhs in FY 2024-25 to 1,729.18 lakhs in FY 2025-26. This increase was due to increase in Salaries and Wages which increased by 13.83% from 1,241.07 lakhs in FY 2024-25 to 1,412.75 lakhs in FY 2025-26, Staff Welfare increased by 46.12%, increasing from 36.02 lakhs in FY 2024-25 to 52.63 lakhs in FY 2025-26, Contribution to Provident and Other Funds increased by 26.67%, increasing from 48.86 lakhs in FY 2024-25 to 61.89 lakhs in FY 2025-26 and Contribution to Gratuity Expenses increased by 378%, increasing from 16.12 lakhs in FY 2024-25 to 77.04 lakhs in FY 2025-26.

Finance Costs:

During the financial year 2025-26, the Finance cost of the Company increased by 32.84%, from 282.20 lakhs in FY 2024-25 to 374.86 lakhs in FY 2025-26. This increase was due to increase in Interest expenses by 36.56% from 263.01 lakhs in FY 2024-25 to 359.16 lakhs in FY 2025-26.

Depreciation and Amortization Expenses:

Depreciation and Amortization for the financial year 2025-26 stood at 112.32 Lakhs as against 101.51 Lakhs during the financial year 2024-25. The increase in depreciation and amortization was around 10.66 % which was majorly due to addition in Property, Plant and equipment during the year.

Other Expenses:

During the financial year 2025-26, the Other Expenses of the Company decreased by 2.39%, from 967.75 lakhs in FY 2024-25 to 944.63 lakhs in FY 2025-26. This decrease was due to decrease in Printing charges by 86.66% from 5.63 lakhs in FY 2024-25 to 0.75 lakhs in FY 2025-26, Labour/Job Work Charges by 99.32 % from 207.23 lakhs in FY 2024-25 to 1.41 lakhs in FY 2025-26, Packing Expenses by 30.25% from 43.99 lakhs in FY 2024-25 to 30.68 lakhs in FY 2025-26, Bank Charges by 69.21 % from 58.36 lakhs in FY 2024-25 to 17.97 lakhs in FY 2025-26, Local Travelling Expense by 22.69% from 20.12 lakhs in FY 2024-25 to 15.56 lakhs in FY 2025-26, Office Expenses by 46.53% from 2.07 lakhs in FY 2024-25 to 1.11 lakhs in FY 2025-26 and Miscellaneous Expenses by 30.93% from 2.51 lakhs in FY 2024-25 to 1.74 lakhs in FY 2025-26 etc.

Restated Profit before tax:

Profit before tax for the financial year 2025-26 increased to 1,605.86 Lakhs as compared to profit of 629.06 Lakhs in the financial year 2024-25. The increase of 155.28% was majorly due to factors as mentioned above.

Restated profit after tax:

Profit after tax for the financial year 2025-26 increased to 1,186.90 Lakhs as compared to profit of 489.85 Lakhs in the financial year 2024-25. The Companys PAT margin for FY 25-26 stood at 15.44% as compared to 9.23% in FY 24-25 resulting in an increase in margin by 6.21%. The major reason for the increase in margin was due to following reasons:

i. Increase in Revenue from Operations from 5,307.24 lakhs in FY 2024-25 to 7,689.11 lakhs in FY 2025-26, representing a growth of 44.88%, primarily driven by 44.44% increase in sale of manufactured goods.

ii. Increase in Other Income from 198.40 lakhs in FY 2024-25 to 406.28 lakhs in FY 2025-26, representing a rise of 104.78%.This increase was due to increase in interest income from 6.05 lakhs in FY 2024-25 to 30.24 lakhs in FY 2025-26, representing an increase of 400.02%, increase in foreign exchange gain/loss from 191.16 lakhs in FY 2024-25 to 322.62 lakhs in FY 2025-26, representing an increase of 68.77% and increase in rebate & discount from supplier from 1.20 lakhs in FY 2024-25 to 12.43 lakhs in FY 2025-26, representing an increase of 935.83%. iii. Employee benefit expenses, as a percentage of revenue, decreased from 26.00% in FY 2024-25 to 22.49% in FY2025-26, primarily on account of the scaling up of the Companys operations.

Particular	31.03.2026	31.03.2025
Employee Benefit expenses (in Lakhs)	1,729.18	1,380.02
% as revenue	22.49%	26.00%

iv. Finance costs decreased from 5.32% to 4.88% of revenue as the Company paid off unsecured loans, which led to a reduction in finance costs:

Particular	31.03.2026	31.03.2025
Unsecured Loan outstanding (in Lakhs)	12.85	322.81
Finance Cost (in Lakhs)	374.86	282.20
% as revenue	4.88%	5.32%

v. Other Expenses decreased from 18.23% to 12.29% of revenue primarily on account of the scaling up of the Companys operations. Due to all the above reasons and due to higher operational efficiency, increased scale of operations, and better cost absorption during FY 2025-26 there was increase in PAT margin.

FINANCIAL YEAR 2025 COMPARED TO FINANCIAL YEAR 2024

Total Income:

The Total Income increased from FY 24 to FY 25, driven by an improvement in Revenue from Operations and Other Income. Total income grew by 44.36%, rising from 3,813.75 Lakhs in FY24 to 5,505.64 Lakhs in FY 25, which was due to growth in Revenue from Operations by 42.56% in FY 25 and Other Income which grew by 118.47% in FY 25. This overall growth reflects the companys operational performance during the year.

Revenue from Operations

During the financial year 2024-25, the revenue from operations of the Company reported a sales growth of 42.56 % from 3,722.94 lakhs in FY 2023-24 to 5,307.24 Lakhs in FY 2024-25, primarily driven by a 43.10% increase in sale of manufactured goods.

The significant increase in revenue in FY25 was due to increase in order volumes from existing customers and increase in manufacturing and supply of higher value products. Revenue from the top 3 customers increased from 2,607.07 lakhs in FY24 to 4,696.91 lakhs in FY25, representing an increase of 80.16%. During the same period, quantity supplied increased from 1,93,959 pieces in FY24 to 3,18,596 pieces in FY25, representing an increase of 64.25%. Further, the average realization per piece increased from 1,344.14 in FY24 to 1,474.25 in FY25, representing an increase of 9.68%.

The Company does not manufacture standardised garments. Products are manufactured based on specifications provided by customers for each order. Accordingly, realization per piece differs across products depending upon factors such as fabric used, accessories used and construction process involved in the manufacturing of the garment.

Top 3 Customer-wise increase was supported by increase in order quantities and average realizations, as detailed below:

Particulars	FY 23-24	FY 24-25	Growth
Quantity Sold (Pcs)	1,93,959	3,18,596	64.25%
Revenue ( in Lakhs)	2,607.07	4,696.91	80.16%
Average Realization per Piece ( )	1,344.14	1,474.25	9.68%

The increase in revenue in FY25 was attributable to: (i) increase in order volumes from top three customers

(ii) increase in average realization due to supply of higher value products during FY25

Other Income:

During the financial year 2024-25, the other income of the Company increased by 118.47%, from 90.81 lakhs in FY 2023-24 to 198.40 lakhs in FY 2024-25. This increase was due to a rise in Interest on deposit which increased by 290.32% from 0.57 lakhs in FY 2023-24 to 2.23 lakhs in FY 2024-25 and Rebate & Discount from Supplier which increased by 984.30% from 0.11 lakhs in FY 2023-24 to 1.20 lakhs in FY 2024-25

Total Expenses

The total expense for the financial year 2024-25 increases to 4,876.59 Lakhs from 3,473.73 lakhs in the Financial Year 2023-24 representing an increase of 40.38%. Such increase was due to increases in the volume of business operations of the Company.

Cost of Material Consumed

The Cost of Material Consumed comprises of Material Procured during the Year, Inventory at the Commencement and end of the Year. The Cost of Material Consumed for the financial year 2024-25 increases to 3,142.27 Lakhs from 1,460.97 lakhs in the Financial Year 2023-24 representing an increase of 115.08%. This increase was due to a rise in opening stock of raw material and raw material in transit which increased by 142.49% from 216.28 lakhs in FY 2023-24 to 524.46 lakhs in FY 2024-25, material procured during the year increased by 104.14% from 1,769.15 lakhs in FY 2023-24 to 3611.46 lakhs in FY 2024-25 and closing stock of raw material and raw material in transit increased by 89.46% from 524.46 lakhs in FY 2023-24 to 993.65 lakhs in FY 2024-25.

Change in inventories of Finished Goods and Work in progress

The Change in inventories of Finished Goods and Work in progress comprises of increase/(decrease) in inventory of Finished Goods and Work in progress in business operation. The Change in inventories of Finished Goods and Work in progress for the financial year 2024-25 was (997.15) Lakhs from 116.08 lakhs in the Financial Year 2023-24. The negative change was due to increase in the closing inventories of Finished Goods and WIP which increased to 1959.93 Lakhs in Financial Year 2024-25 as compared to 962.78 Lakhs in Financial Year 2023-24 representing as increase of 103.57%.

Employee benefits expense:

During the financial year 2024-25, the total Employee Benefits Expenses of the Company increased by 32.62%, from 1,040.56 lakhs in FY 2023-24 to 1,380.02 lakhs in FY 2024-25. This increase was due to increase in Salaries and Wages which increased by 34.35% from 923.78 lakhs in FY 2023-24 to 1,241.07 lakhs in FY 2024-25, Staff Welfare increased by 152.80%, increasing from 14.25 lakhs in FY 2023-24 to 36.02 lakhs in FY 2024-25, Contribution to Provident and Other Funds increased by 24.55%, increasing from 39.23 lakhs in FY 2023-24 to 48.86 lakhs in FY 2024-25.

Finance Costs:

During the financial year 2024-25, the Finance cost of the Company increased by 80.41%, from 156.42 lakhs in FY 2023-24 to 282.20 lakhs in FY 2024-25. This increase was due to increase in Interest expenses by 75.31% from 150.03 lakhs in FY 2023-24 to 263.01 lakhs in FY 2024-25 and Other Borrowing Costs increased by 199.88% from 6.40 lakhs in FY 2023-24 to 19.19 lakhs in FY 2024-25.

Depreciation and Amortization Expenses:

Depreciation and Amortization for the financial year 2024-25 stood at 101.51 Lakhs as against 86.91 Lakhs during the financial year 2023-24. The increase in depreciation and amortization was around 16.79 % which was majorly due to addition in Property, Plant and equipment during the year.

Other Expenses:

During the financial year 2024-25, the Other Expenses of the Company increased by 57.93%, from 612.78 lakhs in FY 2023-24 to 967.75 lakhs in FY 2024-25. This increase was due to increase Processing charges by 802.70% from 0.24 lakhs in FY 2023-24 to 2.19 lakhs in FY 2024-25, Labour/Job Work Charges by 3276.15 % from 6.14 lakhs in FY 2023-24 to 207.23 lakhs in FY 2024-25, Transportation & Freight by 46.15% from 70.70 lakhs in FY 2023-24 to 103.32 lakhs in FY 2024-25, Testing Charges by 83.76 % from 7.08 lakhs in FY 2023-24 to 13.01 lakhs in FY 2024-25, Factory Expense by 355.74% from 7.66 lakhs in FY 2023-24 to 34.91 lakhs in FY 2024-25, Knitting Charges by 1909.94% from 0.22 lakhs in FY 2023-24 to 4.41 lakhs in FY 2024-25, Foreign Travelling Expenses by 1818.36 % from 0.68 lakhs in FY 2023-24 to 12.95 lakhs in FY 2024-25, certification charges by 257.49 % from 3.30 lakhs in FY 2023-24 to 11.78 lakhs in FY 2024-25, License Fee by 310 % from 0.72 lakhs in FY 2023-24 to 2.97 lakhs in FY 2024-25 etc.

Restated Profit before tax:

Profit before tax for the financial year 2024-25 increased to 629.06 Lakhs as compared to profit of 340.02 Lakhs in the financial year 2023-24. The increase of 85% was majorly due to factors as mentioned above.

Restated profit after tax:

Profit after tax for the financial year 2024-25 increased to 489.85 Lakhs as compared to profit of 283.93 Lakhs in the financial year 2023-24. The Companys PAT margin for FY 24-25 stood at 9.23% as compared to 7.63% in FY 23-24 resulting in an increase in margin by 1.60%. The major reason for the increase in margin was due to following reasons:

i. Increase in Revenue from Operations from 3,722.94 lakhs in FY 2023-24 to 5,307.24 lakhs in FY 2024-25, representing a growth of 42.56%, primarily driven by 43.10% increase in sale of manufactured goods. ii. Increase in Other Income from 90.81 lakhs in FY 2023-24 to 198.40 lakhs in FY 2024-25, representing a rise of 118.47%.This increase was due to increase in interest income from 0.65 lakhs in FY 2023-24 to 6.05 lakhs in FY 2024-25, representing an increase of 835.31%, increase in foreign exchange gain/loss from 86.12 lakhs in FY 2023-24 to 191.16 lakhs in FY 2024-25, representing an increase of 121.98% and increase in rebate & discount from supplier from 0.11 lakhs in FY 2023-24 to 1.20 lakhs in FY 2024-25, representing an increase of 984.30%.

iii. Increase in Closing Stock from 1,487.24 lakhs in FY 2023-24 to 2,953.59 lakhs in FY 2024-25, resulting in an increase of 98.60%. The increase is due to higher levels of raw materials, work-in-progress, and finished goods kept for confirmed orders and expected demand. The increase was due to increase in closing stock of finished goods from 575.21 lakhs in FY 2023-24 to 1,419.19 lakhs in FY 2024-25, representing an increase of 146.73% increase in closing stock of WIP 387.57 lakhs in FY 2023-24 to 540.74 lakhs in FY 2024-25, representing an increase of 39.52% and increase in closing stock of Raw Material and Raw Material in Transit 524.46 lakhs in FY 2023-24 to 993.65 lakhs in FY 2024-25, representing an increase of 89.46%. A part of the finished goods inventory as at 31 March 2025 and 31 March 2024 was sold in the following months. Revenue reported in GSTR returns for April and May 2025 were 1,453.67 lakhs as compared to 475.46 lakhs for April and May 2024, showing an increase of 205.74%. This indicates that a part of the closing inventory was sold after year-end. The higher inventory as on March 2025 was due to completion of orders in March which were dispatched in April and May 2025. The Company follows a system of producing and dispatching goods in bulk based on customer orders. Company also purchased raw materials in advance during FY2024-25 for confirmed and expected orders from customers and increased work-in-progress based on planned production for the next period.

iv. The Companys PAT Margin increased as compared to FY 2023-4 primarily due to increase in order volumes from existing customers and increase in manufacturing and supply of higher value products. Further, during FY 2024-25, orders from the Swiss government segment were executed under the MBAS clothing system following the completion of the transition from the existing clothing system.

Due to all the above reasons and due to higher operational efficiency, increased scale of operations, and better cost absorption during FY 2024-25 there was increase in PAT margin.

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 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 18 of the 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 18, 102 and 204 respectively of this Red Herring Prospectus, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Segment Reporting

Our business activity primarily falls within a single business segment and therefore we do not follow any other segment reporting

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 business is not subject to seasonality. For further information, see “Industry Overview” and “Our Business” on page 89 and 102 respectively of this Red Herring Prospectus.

8. Dependence on single or few customers

During the Fiscal 2026, Fiscal 2025 and Fiscal 2024, our top 10 customers contributed approximately 99.65%, 99.70%, 99.21% and 99.13% of our revenue from operations respectively. Moreover, our revenue from our top customer constituted 56.93% 51.51% and 38.13% of our revenue from operations for the financial year ended at March 31, 2026, March 31, 2025 and March 31, 2024 respectively.

9. Competitive conditions

Competitive conditions are as described under the Chapters “Industry Overview” and “Our Business” beginning on page 89 and 102 respectively of this Red Herring Prospectus.

10. Details of material developments after the date of last balance sheet i.e., March 31, 2026

After the date of last Balance sheet i.e., March 31, 2026, the following material events have occurred:

1. Our Company has approved the Audited Financial Statements for the period ended on March 31, 2026 in the Board meeting dated August 11, 2026.

2. The Company has approved the Restated Financial Statements for the financial year ending March 31 2026, March 31, 2025 and March 31, 2024 in the Board meeting dated August 14, 2026.

3. Our Company has approved this Red Herring Prospectus vide resolution in the Board Meeting dated August 31, 2026.