Ace Software Exports Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Overview of the Industry Global Economic Overview

FY 2025-26 will likely be remembered as the year the global economy learned to grow despite uncertainty rather than because uncertainty faded. Trade frictions, tariff realignments, and geopolitical flashpoints that dominated headlines through the year did not translate into the broad slowdown many had feared at its outset. Instead, economies adapted — front-loading activity, redirecting supply chains, and leaning on technology to absorb cost pressures rather than pass them downstream.

The IMFs January 2026 update placed global growth at 3.3% for the year, a figure that undersells how uneven the path to get there actually was. Growth was not evenly distributed so much as it was reallocated — advanced economies delivered steady but unspectacular expansion, while the real momentum concentrated in a handful of emerging markets, India chief among them, that combined domestic consumption strength with export resilience.

If there is a single thread that ties the years economic story together, it is this: technology stopped being a side character in macroeconomic narratives and became one of its authors. Enterprise investment in AI and automation did not merely track economic growth this year- in several markets, it drove it, as businesses used technology spend to offset labour cost inflation, talent shortages, and softening discretionary budgets. This shift matters enormously for a company like ours: the same forces reshaping GDP tables are reshaping client demand at the ground level, turning what used to be a purely macroeconomic backdrop into a direct commercial tailwind.

Inflation, for its part, continued its slow retreat toward central bank comfort zones across most major economies, though the US remained a conspicuous holdout-a reminder that "return to normal" is proving to be a longer and more uneven journey than initially projected. Downside risks have not disappeared; they have simply changed character, shifting from pure trade-war anxiety toward questions about whether current technology- driven optimism is itself overextended.

Indian Economic Overview

If FY 2025-26 had a defining shift for Indias technology sector, it wasnt a growth number — it was a change in what India is being asked to do for the world. For two decades, Indias pitch to global enterprises was cost. This year, that pitch quietly flipped to capability.

Indias broader economy provided a strong tailwind, with growth outpacing the previous year and services leading the expansion, aided by robust domestic demand, continued infrastructure investment, and steady progress on digital public infrastructure and ease-of-doing-business reforms. This macro strength gave technology and services companies room to invest rather than merely defend margins.

The clearest evidence of change came from the Global Capability Centre boom. Indias GCCs-once seen as back-office cost centres — have expanded rapidly in both scale and scope, increasingly running core product engineering, AI, and analytics functions rather than routine support work. Many of the GCCs launched this year were built AI-first from day one, a marked departure from the transactional, cost-driven centres of a decade ago. This shift reflects a broader repositioning of India from being an execution destination to becoming a genuine innovation and decision-making hub for global enterprises.

Layered on top of this was the industry-wide move toward AI adoption. Enterprise technology spending, even amid broader economic caution, was redirected toward resilience, productivity, and AI-native capabilities rather than being cut back-what industry body NASSCOM termed a "reset, not a slowdown." Agentic AI moved from experimentation to live deployment across a large share of leading technology providers, reshaping how work gets delivered and priced.

Taken together, the Indian growth story this year was not simply about growing faster — it was about growing differently, with the sectors centre of gravity shifting steadily toward higher-value, AI-led, and capability- driven work. That structural shift matters more for the industrys future than any single quarters headline growth figure.

1. Company Overview.

The Company is a technology-driven enterprise engaged in providing comprehensive Information Technology (IT) services and developing innovative software products that enable businesses to accelerate their digital transformation journey. With a strong emphasis on quality, innovation, and customer-centricity, the Company delivers scalable, secure, and value-driven technology solutions to clients across diverse industries.

The Companys service portfolio includes software development, application maintenance and support, IT consulting, cloud solutions, digital transformation, enterprise application development, system integration, and managed IT services. Alongside its service offerings, the Company develops and delivers proprietary software products designed to improve operational efficiency, enhance business processes, and address industry-specific challenges through advanced technology.

Recognizing the transformative potential of emerging technologies, the Company has made Artificial Intelligence (AI) a strategic focus area. It continues to invest in AI-driven research, product innovation, intelligent automation, machine learning, data analytics, and generative AI solutions to help organizations optimize operations, improve decisionmaking, and create enhanced customer experiences. The Company remains committed to integrating advanced technologies into its products and services to meet the evolving needs of the digital economy.

During the financial year 2025-26, the Company continued to strengthen its technology capabilities, expand its portfolio of software products and IT services, and enhance its focus on AI-enabled solutions. The Company remained committed to operational excellence, continuous innovation, and customer satisfaction while exploring new business opportunities in emerging technologies and digital ecosystems.

Supported by an experienced leadership team, a skilled workforce, and a strong commitment to innovation, the Company is well-positioned to capitalize on opportunities arising from the rapid evolution of the global technology landscape. Going forward, the Company will continue to invest in advanced technologies, strengthen its AI capabilities, support innovative startups, and deliver sustainable growth while creating long-term value for customers, shareholders, employees, and society at large.

2. Startup Ecosystem and innovation

The Company actively supports the startup ecosystem by identifying and collaborating with high-potential technology ventures. Through strategic investments, mentorship, and technology partnerships, the Company aims to nurture innovative business ideas, accelerate product development, and contribute to the growth of emerging enterprises. This initiative enables the Company to stay at the forefront of technological advancements while fostering innovation and creating long-term value for all stakeholders.

3. Strategic Acquisition

During the financial year 2025-26, the Company completed the acquisition of QeLearn Private Limited (formerly known as Theia Education Private Limited) for a consideration of 517.94 Crore, marking a significant milestone in the Companys strategic growth journey.

QeLearn is an Education Technology (EdTech) company engaged in developing innovative digital learning solutions aimed at enhancing students core language and communication skills, particularly in reading, listening, and writing. Its technology- driven learning platform is designed to deliver an engaging and personalized learning experience, helping learners strengthen essential academic and professional competencies.

The acquisition aligns with the Companys long-term strategy of expanding its technology portfolio and strengthening its presence in high-growth digital sectors. By integrating QeLearns capabilities with the Companys expertise in Information Technology, software products, and Artificial Intelligence, the Company aims to develop enhanced learning solutions, drive innovation in the education technology ecosystem, and create long-term value for customers and stakeholders.

The acquisition is expected to broaden the Companys product offerings, unlock cross-selling opportunities, and support sustainable growth by leveraging synergies across technology, product development, and digital innovation.

4. investment

As part of its long-term growth strategy and commitment to innovation, the Company operates QeMFG as its wholly owned subsidiary, dedicated to developing next-generation manufacturing technology solutions. QeMFG is focused on transforming conventional manufacturing operations through intelligent digital solutions that enhance productivity, efficiency, and operational excellence.

Currently in its early stages of development, QeMFG is developing its flagship product, SmartPPS (Smart Production Planning & Scheduling), an advanced solution designed to help manufacturing organizations transition from manual production planning to intelligent and automated scheduling. The platform aims to optimize production planning, improve resource utilization, enhance scheduling accuracy, reduce operational inefficiencies, and support data-driven decision-making across manufacturing processes.

5. Expansion through Wholly Owned Subsidiary in the UAE

As part of its global expansion strategy, the Company has incorporated QeDigital Gulf Software Services - FZCO, a wholly owned subsidiary in the United Arab Emirates (UAE). The establishment of this subsidiary marks a significant milestone in the Companys international growth journey and reinforces its commitment to expanding its presence in the Gulf Cooperation Council (GCC) region and other global markets.

QeDigital Gulf Software Services - FZCO is a technology and digital transformation company focused on delivering advanced solutions in Artificial Intelligence (AI), data engineering, intelligent automation, enterprise software, and digital transformation. The subsidiary is dedicated to helping organizations enhance operational efficiency, accelerate innovation, and achieve sustainable business growth through intelligent systems, advanced analytics, and scalable digital products tailored to the evolving needs of businesses across the Gulf region and international markets.

The incorporation of the UAE subsidiary strengthens the Companys global delivery capabilities, enhances its ability to serve international clients, and provides a strategic platform for expanding its technology offerings in high-growth markets. This initiative aligns with the Companys long-term vision of becoming a trusted global technology partner by delivering innovative, customer-centric, and future-ready digital solutions.

6. Our Products Rotawiz

RotaWiz is an all-in-one workforce management and rostering platform built primarily for Australian NDIS providers, aged care organizations, allied health clinics, and disability support services. It helps care providers manage employees, clients, schedules, compliance, billing, and day-to-day operations from a single cloud-based platform.

Smart PPS

Smart PPS helps manufacturing and engineering businesses go digital with smart ERP, IoT, AI, automation, and eCommerce solutions. From production planning to shopfloor monitoring, we deliver tools that improve efficiency, reduce downtime, and drive growth across diverse industrial sectors

GroBro.AI

GroBro.AI is an AI-powered personalized reading and literacy platform designed to improve childrens reading comprehension, vocabulary, and critical thinking. Rather than offering the same books to every learner, GroBro assesses each childs reading ability using its proprietary GroQuotient (GQ) Test, then delivers a personalized reading journey with age- and skill- appropriate books, interactive activities, AI-assisted learning, and progress tracking. It is built for students, parents, schools, and CSR education initiatives.

QQQe

QQQe is an AI-powered Shopify growth and eCommerce automation platform developed by AQe Digital. Instead of simply displaying store analytics, it analyzes a Shopify store, identifies the most critical growth issues, prioritizes them based on business impact, and recommends actionable improvements that help increase conversions and revenue. It acts like a virtual eCommerce growth consultant for Shopify merchants.

Calrik

Calrik is an online appointment scheduling and calendar automation platform that helps individuals, teams, and businesses schedule meetings without the back-and- forth of emails, phone calls, or messages. By sharing a personalized booking link, invitees can choose an available time, and Calrik automatically schedules the meeting, updates calendars, and sends notifications.

7. Opportunities, Threats, Risks and Concerns

The Information Technology industry continues to offer significant growth opportunities driven by increasing adoption of Artificial Intelligence (AI), cloud computing, digital transformation, automation, data analytics, and enterprise software solutions across industries. The Companys diversified portfolio of IT services, software products, AI-driven solutions, strategic investments, and expanding global presence positions it to capitalize on these emerging opportunities.

At the same time, the industry remains highly competitive and is characterized by rapid technological advancements, evolving customer expectations, pricing pressures, and the continuous need for innovation. Cybersecurity threats, data privacy regulations, talent acquisition and retention challenges, and changes in the global economic and regulatory environment may impact business operations and growth.

The Company also recognizes risks associated with technology obsolescence, project execution, new product development, investments in emerging businesses, and expansion into international markets. To address these challenges, the Company has established a robust risk management framework and continues to invest in innovation, cybersecurity, employee development, operational excellence, and regulatory compliance. With its diversified business model, experienced management team, and customer-centric approach, the Company remains well-positioned to manage risks effectively and pursue sustainable long-term growth.

8. Discussion on Financial Performance with respect to Operational Performance

The financial performance of the Company for the year under review, in relation to its operational performance, has been discussed in detail in the Directors Report, which forms part of this Annual Report.

9. Internal Control System and their Adequacy.

The Company has established a comprehensive internal control framework that is commensurate with the scale, nature, and complexity of its business operations. The framework is designed to safeguard the Companys assets, ensure the accuracy and reliability of financial and operational information, promote operational efficiency, and ensure compliance with applicable laws, regulations, and internal policies.

10. Key features of the Companys internal control framework include:

• Clearly defined authority levels and delegation of powers across various management levels to ensure accountability and effective decisionmaking.

• A structured internal audit mechanism that periodically evaluates the adequacy and effectiveness of internal controls, operational processes, and risk management practices.

• Robust systems for financial reporting, compliance monitoring, risk assessment, and timely flow of information to support informed decision-making.

• Continuous monitoring and review of internal controls to identify areas for improvement and strengthen the overall governance framework.

The Audit Committee of the Board regularly reviews the observations and recommendations of the internal auditors, monitors the implementation of corrective actions, and provides strategic oversight to ensure the continued effectiveness of the Companys internal control environment. Based on such reviews, the management believes that the Companys internal control systems are adequate and operating effectively.

11. Human Resources/industrial Relations

The Company recognizes that its employees are fundamental to its long-term success and competitive advantage. It is committed to building a workplace that encourages innovation, collaboration, continuous learning, and professional excellence, enabling employees to contribute effectively towards the Companys strategic objectives.

The Company focuses on attracting, developing, and retaining skilled talent by providing opportunities for career growth, knowledge enhancement, and a supportive work environment. It also promotes a culture of integrity, accountability, diversity, and mutual respect, ensuring that employees remain engaged and motivated to deliver value to customers and stakeholders.

During the year, industrial relations remained harmonious and cordial across the organization, reflecting the Companys commitment to maintaining a positive, transparent, and employee-centric work culture.

12. Ratio Analysis

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations 2018, the company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios.

The company has identified the following ratios as key financial ratios;

	Standalone		Consolidated
	F.Y. 2025-26	F.Y. 2024-25	F.Y. 2025-26	F.Y. 2024-25
Operating Profit Margin	23.85	29.45	28.83	35.45
Net Profit Margin	15.55	20.17	7.84	17.74
Debt-Equity Ratio (Times)	0.03	0.00	0.12	0.06
Current Ratio (Times)	7.94	29.85	2.86	5.75
Return on net worth	2.10	2.99	3.70	5.98
EPS	1.69	3.12	3.33	7.49
Price Earnings Ratio	96.09	99.71	48.77	41.54