Ravelcare Ltd Management Discussions

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Draft Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act. Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factors.

BUSINESS OVERVIEW

Our Company operates through a digital first distribution model in the beauty and personal care segment ("BPC") offering a range of haircare, skincare, and bodycare products. Our current operations are built around a direct-to-consumer (D2C) approach, supported by e-commerce and data-driven product development processes. Our products are sold through multiple channels including our website, major online marketplaces such as Amazon, Flipkart and Myntra and quick commerce platform i.e. Blinkit. The percentage of repeat orders was 32.55%, 22.12% and 16.81% during the financial years ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively. Our revenue from operations for Financial Year ended March 31, 2025, March 31, 2024 and March 31, 2023 was 2,497.89 lakhs, 2,208.78 lakhs and 349.36 lakhs respectively.

Our Key Performance Indicators for the last three Fiscals are as follows:

Key Performance Indicator	Financial Year 2025	Financial Year 2024	Financial Year 2023
Revenue from Operations	2,497.89	2,208.78	349.36
EBITDA	681.88	665.34	50.95
EBITDA Margin (%)	27.30%	30.12%	14.58%
PAT	524.76	502.41	41.53
PAT Margin (%)	21.01%	22.75%	11.89%
ROE (%)	67.97%	193.78%	(306.44)%
ROCE (%)	68.30%	133.03%	105.97%
Website visitors (actuals)	50,21,230	43,15,875	6,84,368
Marketing Efficiency Rate (%)	32.65	22.68	35.02
Return on Ad spent (ROAS)	3.06	4.41	2.86

Explanation for KPI metrics

KPI	Description
Revenue from Operations	Revenue from operations represents the total turnover of the business as well as provides information regarding the year over year growth of our Company
EBITDA	EBITDA provides information regarding the operational efficiency of the business and is considered by the management as an important element to monitor business growth in absolute term irrespective of the sales mix.
EBITDA Margin (%)	EBITDA Margin is an indicator of the operational profitability and financial performance of our business.
PAT	Profit after tax provides information regarding the overall profitability of the business.
PAT Margin (%)	PAT Margin is an indicator of the overall profitability and financial performance of our business in reference to the turnover.
ROE (%)	RoE provides how efficiently our Company generates profits from shareholders? funds
ROCE (%)	RoCE provides how efficiently our Company generates earnings from the capital employed
	in the business.
Website visitors	Number of visitors on the website of the company during the financial year
Marketing efficiency rate	Marketing Efficiency Ratio (MER%) represents the percentage of advertising expenditure relative to revenue from operations. It is calculated as advertising spend divided by revenue from operations, expressed as a percentage
Return on Ad spent (ROAS)	Return on Advertising Spend (ROAS) represents the ratio of revenue from operations generated per unit of advertising investment. It is calculated by dividing revenue from operations by advertising spend.

FACTORS AFFECTING OUR RESULT OF OPERATIONS

Except as otherwise stated in this Draft Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

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

? We may not be able to sustain our historical growth rates, and our historical performance may not be indicative of our future growth or financial results.

? Any change in government policies resulting in increases in taxes payable by us.

? We have entered into related party transactions in the past and may continue to do so in the future.

? Our ability to retain our Key Management Personnel and other employees.

? Changes in laws and regulations that apply to the industries in which we operate.

? Company?s ability to successfully implement its growth strategy and expansion plans.

? Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate.

? Conflicts of interest with the promoter group and other related parties.

? Failure to successfully upgrade our product portfolio, from time to time.

? We may face significant competition in our business. An inability to compete effectively may lead to loss of business or reduced operating margins.

? Price of raw materials procured by vendors

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to the chapter titled "Restated Financial Statements" beginning on page 149 of this Draft Red Herring Prospectus.

RESULTS OF OUR OPERATIONS:

Particulars	For the year ended March 31, 2025	% of Total Income	For the year ended March 31, 2024	% of Total Income	For the year ended March 31, 2023	% of Total Income
Revenue from Operations	2,497.89	98.74	2,208.78	99.14	349.36	100.00
Other Income	31.77	1.26	19.10	0.86	0.01	0.00
Total Income	2,529.66	100.00	2,227.88	100.00	349.37	100.00
Expenditure
Purchase of stock in trade	619.37	24.48	628.96	28.23	139.96	40.06
Change in Inventories	(103.34)	(4.09)	20.16	0.91	(63.54)	(18.19)
Employee Benefit Expenses	87.03	3.44	84.55	3.79	25.42	7.28
Finance Costs	0.41	0.02	1.24	0.06	0.25	0.07
Depreciation and Amortization Expenses	9.88	0.39	2.33	0.10	0.07	0.02
Other Expenses	1,212.95	47.95	809.76	36.35	196.56	56.26
Total expenses	1,826.30	72.20	1,547.00	69.44	298.73	85.51
Restated profit/(Loss) before Exceptional and Extraordinary Item and Tax	703.36	27.80	680.88	30.56	50.64	14.49
Exceptional Item	-	-	-	-	-	-
Restated profit/(Loss) before Extraordinary Item and Tax	703.36	27.80	680.88	30.56	50.64	14.49
Extraordinary Item	-	-	-	-	-	-
Restated profit/(Loss) before Tax	703.36	27.80	680.88	30.56	50.64	14.49
Tax Expenses
- Current Tax	181.56	7.18	180.12	8.08	9.07	2.59
- Deferred Tax	(2.96)	(0.12)	(1.64)	(0.07)	0.04	0.01
Total Tax Expense	178.60	7.06	178.48	8.01	9.11	2.61
Restated profit/(Loss) after Tax	524.76	20.74	502.41	22.55	41.53	11.89

KEY COMPONENTS OF COMPANY?S PROFIT AND LOSS STATEMENT

? Revenue from operations: Our revenue of operation comprises of revenue sale of our products.

? Other income: Other income comprises of other non-operating income such as interest on FD, dividend income, net gain on Capital gain on sale of equities, other cash bank, balance written off.

? Expenses: Our expenses include purchase of stock in trade, change in inventories, employees benefit expenses, Finance costs, depreciation and amortisation expense and other expenses.

? Purchase of stock in trade: Purchases of stock in trade comprises of purchases of major products such as Finished Products, packaging bags, packaging boxes, packaging material.

? Change in Inventories: Changes in inventories denotes the difference between opening and closing balance of stock in trade.

? Employee benefits expense: The employees benefit expenses included salary & wages, gratuity expenses, staff welfare expenses and directors remuneration and PT and ESIC expenses.

? Finance cost: The finance cost includes other borrowing cost.

? Depreciation and amortization expense: Depreciation includes depreciation on Property, Plant & Equipment.

? Other Expenses: Other Expenses mainly includes marketing and advertisement, selling and distribution expense, travelling expenses, professional fees, expenses, payment getaway fee, printing and stationery, website platform expenses, research and development expenses, rent expenses, etc.

Financial year 2025 compared with financial year 2024

Total Income

Total income for the financial year 2024-25 was 2,529.66 Lakhs whereas in financial year 2023-24 it was

2,227.88 Lakhs representing an increase of 13.55 %. The reason of such increase was due to increase in the volume of sales of our products, Interest on FD, and Net gain on foreign currency transactions and translation. The total income consists of revenue from operations and other income.

Revenue from Operations

During the financial year 2024-25 the net revenue from operation of our Company increased to 2,497.89 Lakhs as against 2,208.78 Lakhs in the financial year 2023-24 representing an increase of 13.09% which was due to increase in the sale of our products.

Other Income

During the financial year 2024-25 the other income of our Company increased to 31.77 Lakhs as against 19.10 lakhs in the financial year 2023-24 representing an increase of 66.32% which was due to increase in interest income and Some capital gain on on Sale of Listed shares.

Purchase of stock in trade

During the financial year 2024-25 the purchase of stock in trade of our Company decreased to 619.37 Lakhs as against 628.96 Lakhs in the financial year 2023-24 representing a decrease of 1.53%. The decrease was primarily due to improved procurement terms and better pricing negotiated with vendors during the year.

Change in Inventories

During the financial year 2024-25 the change in inventories of our Company increased to (103.34) Lakhs as against 20.16 lakhs in the financial year 2023-24 representing an increase of 612.48 % which was the increase in inventory levels was due to the Company?s decision to maintain higher stock availability to meet anticipated demand and avoid potential order delays.

Employee Benefit Expenses

During the financial year 2024-25 the employee benefit expenses of our Company increased to 87.03 Lakhs as against 84.55 lakhs in the financial year 2023-24 representing an increase of 2.94 % which was primarily due to increase in salaries and wages and director?s remuneration.

Finance Costs

During the financial year 2024-25 the finance cost of our Company decreased to 0.41 Lakhs as against 1.24

Lakhs in the financial year 2023-24 representing decrease of 67.21 % which was due to decrease in interest on GST and tax.

Depreciation and Amortization Expenses

During the financial year 2024-25 the depreciation of our company was 9.88 Lakhs as against 2.33 Lakhs during the financial year 2023-24 representing increase of 324.42% primarily due to increase in the gross block of tangible assets.

Other Expenses

During the financial year 2024-25 the other expenses of our company increased to 1212.95 Lakhs as against

809.76 Lakhs during the financial year 2023-24. The increase in other expenses was 49.79 % which was due to increase in professional fees, Rent, Research and Development costs, increase in marketing and advertisement expenses, website platform expense.

Restated profit/(loss) before tax

During the financial year 2024-25 the Profit before tax increased to 703.36 Lakhs as against 680.88 Lakhs during the financial year 2023-24. The increase in Profit before tax was around 3.30 %.

Tax Expenses

During the financial year 2024-25 tax expenses of our company increased to 178.60 Lakhs as against 178.48

Lakhs during the financial year 2023-24.

Restated profit/(loss) after tax

As a result of the foregoing factors, our profit after tax for the year increased by 4.45 % from net profit 502.40 lakhs in financial year 2023-24 to net profit of 524.76 Lakhs in financial year 2024-25.

Financial year 2024 compared with financial year 2023

Total Income

Total income for the financial year 2023-24 was 2,227.88 Lakhs whereas in financial year 2022-23 it was 349.37 Lakhs representing an increase of 537.68 % which was due to increase in the volume of sale of products and other income. The total income consists of revenue from operations and other income.

Revenue from Operations

During the financial year 2023-24 the revenue from operation of our Company increased to 2,208.78 Lakhs as against 349.36 Lakhs in the Financial Year 2022-23 representing an increase of 532.23% which was due increase in sale of products

Other Income

During the financial year 2023-24 the other income increased to 19.10 Lakhs as against 0.01 Lakhs in the

Financial Year 2022-23 representing an increase of 1,95,248.83 % which was primarily due to increase in interest on FD.

Purchase of stock in trade

During the financial year 2023-24 the cost of stock in trade of our Company increased to 628.96 Lakhs as against 139.96 Lakhs in the financial year 2022-23 representing an increase of 349.37 % which was due to increase in the purchase of products This was primarily due to an expansion in product range and higher order volumes, resulting in increased procurement of finished goods from third-party vendors.

Change in Inventories

During the financial year 2023-24 the inventory of our company increase to 20.16 Lakhs as against (63.54) lakhs in the financial year 2022-23 representing an increase of 131.74% which was due to strategic inventory management in response to sales trends.

Employee Benefit Expenses

During the financial year 2023-24 the employee benefit expenses of our Company increased to 84.55 Lakhs as against 25.42 lakhs in the financial year 2022-23 representing an increase of 232.57 % which was primarily due to increase in salaries & wages, gratuity and directors? remuneration.

Finance Costs

During the financial year 2023-24 the finance cost of our Company increased to 1.24 Lakhs as against 0.25 in the financial year 2022-23 representing increase of 399.21% which was primarily due to increase in borrowing cost.

Depreciation and Amortization Expenses

During the financial year 2023-24 the depreciation of our company increased to 2.33 Lakhs as against 0.07

Lakhs during the financial year 2022-23. The increase in depreciation was around 3083.40 % which was due to gross block of tangible assets

Other Expenses

During the financial year 2023-24 the other expenses of our company increased to 809.76 Lakhs as against

196.56 Lakhs during the financial year 2022-23. The increase in other expenses was around 311.96% which was mainly due to increase in marketing and advertisement expenses, selling and distribution expenses, Logistics charges , professional fees, payment gateway fee.

Restated profit/(loss) before tax

During the financial year 2023-24 the Profit before tax increased to 680.88 Lakhs as against 50.64 Lakhs during the financial year 2022-23. The increase in Profit before tax was around 1244.62 %.

Tax Expenses

During the financial year 2023-24 tax expenses of our company increased to 178.48 Lakhs as against 9.11

Lakhs during the financial year 2022-23.

Restated profit/(loss) after tax

As a result of the foregoing factors, our profit after tax for the year increased by 964.63 % from net profit of

41.53 Lakhs in financial year 2022-23 to net profit 502.40 lakhs in financial year 2023-24.

Cash Flows

Particulars	For the year ended March 31
	2025	2024	2023
Net Cash from Operating Activities	(55.03)	642.90	100.29
Net Cash from Investing Activities	118.11	(691.67)	(1.16)
Net Cash used in Financing Activities	(4.22)	(37.96)	(1.38)

Cash Flows from Operating Activities

Net cash from operating activities for financial year 2024-25 was at (55.03) lakhs as compared to the Profit Before

Tax at 524.76 lakhs while for financial year 2023-24 net cash from operating activities was at 642.90 lakhs as compared to the Profit Before Tax at 502.40 lakhs.

Net cash from operating activities for financial year 2023-24 was at 642.90 lakhs as compared to the Profit Before

Tax at 502.40 lakhs while for financial year 2022-23 net cash from operating activities was at 100.29 lakhs as compared to the Profit Before Tax at 47.19 Lakhs.

Cash Flows from Investment Activities

In the financial year 2024-25, the net cash from investing activities was 118.11 lakhs. This was mainly due to in Investment in term deposits, purchase of equity instruments.

In the financial year 2023-24, the net cash from investing activities was (691.67) lakhs. This was on due to sale of equity instruments and Investment in term deposits.

In the financial year 2022-23, the net cash from investing activities was (1.16) lakhs. This was on due to purchase of property plant and equipment.

The details are as under (Year-wise)

Particulars	2025	2024	2023
(Purchase)/Sale of Property, Plants and Equipment	(4.14)	(23.18)	(1.16)
(Purchase)/Sale of equity instruments	(220.42)	(79.26)	-
Purchase of mutual funds	(3.02)	-	-
Investment in Term Deposit	320.72	(608.34)
Interest received	23.68	19.09	-
Dividend received	1.29	0.02	-
Net cash from investing activities	118.11	(691.67)	(1.16)

Cash Flows from Financing Activities

In the financial year 2024-25, the net cash from financing activities was (4.22) lakhs. This was on account of proceeds from short-term borrowings.

In the financial year 2023-24, the net cash from financing activities was (37.96) lakhs. This was on account of proceeds from short term borrowings.

In the financial year 2022-23, the net cash from financing activities was (1.38) lakhs. This was on account of repayment of short-term borrowings and interest and other borrowings.

The details are as under: (Year-wise)

Particulars	2025	2024	2023
Proceeds from Short term Borrowings	(3.81)	(36.72)	-
Repayment of Short-term Borrowings	-	-	(1.13)
Interest and other borrowings	(0.41)	(1.24)	(0.25)
Net cash flow from financing activities	(4.22)	(37.96)	(1.38)

OTHER MATTERS

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.

Significant economic changes affecting income from continuing operations

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

Known trends or uncertainties impacting sales, revenue, or income

Apart from the risks as disclosed under Section "Risk Factors" beginning on page 25 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.

Future changes in the relationship between costs and revenues

Other than as described in the sections "Risk Factors", "Our Business" and "Management?s Discussion and Analysis of Financial Conditions and Results of Operations" on pages 25, 107 and 189 respectively of this Draft 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.

Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices

Increases in our revenues are by and large linked to increases in the volume of business.

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

Our business activity primarily falls within a single business segment i.e. Beauty and personal care, as disclosed in "Restated Financial Statements" on page 149 of this Draft Red Herring Prospectus, we do not follow any other segment reporting.

Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter "Our Business", on page 107 of this Draft Red Herring Prospectus our Company has not announced any new product or service.

Seasonality of business

Our business is not subject to seasonality.

Any significant dependence on a single or few suppliers or customers

Our Company is significantly dependent on a few suppliers. For further details, refer to the chapter titled "Risk factors" on page 25 of Draft Red Herring Prospectus.

Competitive Condition

Competition is faced by our company from other existing manufacturers of personal and beauty care products. We engage with our competitors on a regional or product line basis which is unorganized. We believe that the principal factors affecting competition in our business include client relationships, reputation, the abilities of employees, market focus and the relative quality and price of the services and products.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL PERIOD

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Draft Red Herring Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the business activities, except as disclosed below:

The Company has approved the Restated Financial Statements for the financial year ending March 31, 2025, March 31, 2024, and March 31, 2023 in the Board meeting dated July 29, 2025.

The issue has been authorized by our Board of Directors pursuant to a resolution passed at its meeting held on June 16, 2025 and by our Shareholders pursuant to a special resolution passed pursuant to the Companies Act, 2013 at the Extra Ordinary General meeting held on June 16, 2025 to raise funds by making an Initial Public Offering.

Our Company has approved the Draft Red Herring Prospectus vide resolution in the Board Meeting dated July 30, 2025.