1. The company is dependent on a retail licence agreement with Kamdhenu Limited for sale of TMT bars and the agreement is non-exclusive in nature. Pursuant to this Agreement, the company has paid a royalty of Rs. 208.57 lakhs, Rs. 654.83 lakhs, Rs. 610.66 lakhs and Rs. 535.45 lakhs, respectively, representing 0.98%, 0.85%, 0.70% and 0.61% of its total revenue from operations for the three month period ended June 30, 2025 and Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. The agreement has certain restrictions and obligations, such as minimum sales quotas, branding guidelines, packaging, and royalty payments. the company has derived 95.99%, 91.63%, 94.06% and 96.85% of its revenue from operations for the three month period ended June 30, 2025 and Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively from sale of TMT Bars and 100% of the revenue from such sale is only under Kamdhenu Brand. If the retail licence agreement with Kamdhenu Limited is terminated, the company is may face difficulties in retaining its network of distributors and dealers that distribute the company products, which could materially and adversely impact its business, results of operations and financial condition.
2. Its business and profitability are substantially dependent on the availability and cost of the company raw materials and its dependent on third party suppliers for meeting the company raw material requirements which are on purchase order basis. its raw material's consumption accounted for 82.58%, 70.25% 87.86% and 96.63% of the company total expenses for the three months period ended June 30, 2025 and the Fiscals 2025, 2024 and 2023, respectively. Any disruption to the timely and adequate supply of raw materials, or volatility in the prices of raw materials may adversely impact its business, results of operations and financial condition.
3. Royalty payments under the company is agreement dated November 7, 2022, with Kamdhenu Limited may impact its profitability. the company has paid royalty of Rs. 208.57 lakhs, Rs. 654.83 lakhs, Rs. 610.66 lakhs and Rs. 535.45 lakhs, representing 0.98%, 0.85% 0.70% and 0.61%, of its total revenue from operations for the three month period ended June 30, 2025, and Fiscal 2025, Fiscal 2024, and Fiscal 2023, respectively. Any increase in such royalty payments may adversely impact its business, results of operations, and financial condition.
4. he company is derive a significant portion of its revenue from operations from the company top ten customers, with ITS single largest customer contributing 30.19%, 30.11%, 29.09% and 28.55% of its revenue from operations in the three months period ended June 30, 2025, Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. Loss of any of these customers or a reduction in purchases by any of them could adversely affect the company business, results of operations, cash flows and financial condition.
5. The company does not have long-term arrangements with any of the company customers, distributors or dealers. Any termination of its current arrangements with the company customers, distributors or dealers could materially and adversely affect its business, results of operations and financial condition.
6. The company is relies on its distributors for the distribution of the company is TMT Bars with whom the company does not have any exclusive formal arrangement. Any significant loss of the company is distribution network or failure by its distributors to effectively sell or market the company products could have an adverse impact on its business, results of operations, and financial condition.
7. The Company is primarily manufactures TMT bars contributing 95.99%, 91.63% 94.06% and 96.85% of its revenue from operations in the three months period ended June 30, 2025, Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. The demand and pricing of TMT Bars is volatile and sensitive to the cyclical nature of the industries it serves including raw material prices. A decrease in TMT Bar prices or sales may have a material adverse effect on its business, results of operations, prospects and financial condition.
8. The Company has a high debt to equity ratio of 3.78 times, 3.77 times, 4.25 times and 5.28 times for the three months period ended June 30, 2025 and Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively, which denote the company is significant outstanding debt and financial obligations and Its inability to meet the company is financial obligations may limit its ability to pursue the company is business and could adversely affect its business, financial condition, results of operations and cash flows.
9. The company has entered into related party transaction with the company is Group Companies and a few its promoter group companies and will continue to enter into related party transactions. The company is cannot assure you that such transactions, individuals or in the aggregate, will not have an adverse effect on its business, financial condition, cash flows and results of operations.
10. the company has experienced negative operating cash flows of Rs. (2,241.88) lakhs, Rs. (1,793.82) lakhs and Rs. (1,134.76) lakhs during three months period ended June 30, 2025, Fiscal 2025 and Fiscal 2023, respectively .