The Management Discussion and Analysis Report (MDA) is an integral part of, and is to be read along with, the Companys financial statements. The report has been prepared by the Management with the purpose of providing a descriptive explanation, from the Managements perspective, of the Companys performance during the year under review, its financial condition, business environment, opportunities, risks and future prospects. This report should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information contained elsewhere in this Annual Report.
The Companys financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules thereunder and other applicable provisions of the Companies Act, 2013, and the applicable regulations and guidelines issued by the Securities and Exchange Board of India (SEBI).
Some of the information contained in this MDA may contain forward-looking statements. These forward-looking statements may include, among others, statements regarding the Companys plans, objectives, strategies, costs, business prospects, financial performance and the assumptions underlying any of the foregoing. Such statements are based on information available to the Company as on the date of this report and are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied in such forward-looking statements owing to various factors, many of which may be beyond the Companys control. The Company does not undertake any obligation to publicly update or revise any forward-looking statement except as may be required under applicable laws and regulations.
Adtech Systems Limited is a leading solution provider in the electronic security and surveillance industry. The Company provides integrated and cost-effective electronic security solutions to its customers, supported by technical expertise and after-sales service.
The Company is a Public Limited Company having its Registered Office in Chennai, Tamil Nadu. The Companys equity shares are listed on Metropolitan Stock Exchange of India Limited (MSEI), Mumbai and BSE Limited. The Companys equity shares were listed on BSE Limited with effect from 19th June 2024.
The Company operates primarily in the electronic security and surveillance solutions space and has developed expertise in providing solutions for Electronic Article Surveillance (EAS), anti-shoplifting systems, access control, CCTV, footfall counting, display security, electronic locks, digital signage and related retail security applications.
The Company has also been progressively expanding its product portfolio to address emerging customer requirements. During the year under review, the Company continued to focus on developing its capabilities in RFID-based solutions for retail inventory management and related applications. The Company has invested in people, systems and research and development capabilities in this area and has also strengthened its in-house software development capability.
The Companys accounting policies have been consistently applied, except where a newly issued accounting standard is initially adopted or a change in an existing accounting standard requires a corresponding change in the accounting policy hitherto in use.
The global economy during 2025-26 continued to operate in an environment characterised by geopolitical tensions, trade fragmentation, energy-market uncertainties and rapid technological transformation. While global economic activity has remained resilient, the outlook continues to be subject to significant uncertainties.
The global economic environment is also witnessing rapid adoption of artificial intelligence, automation and digital technologies, which are influencing investment patterns, productivity and business models across industries. At the same time, geopolitical developments and disruptions to global trade and energy supplies continue to pose risks to supply chains and input costs.
1. Geopolitical conflicts and their impact on global trade and energy markets;
2. Monetary policy decisions of major central banks;
3. Energy and commodity price movements;
4. Trade policies, tariffs and increasing trade fragmentation;
5. Developments in the Chinese economy and other major emerging markets;
6. Supply-chain diversification and regionalisation of manufacturing;
7. Rapid technological developments, particularly in artificial intelligence, automation and digitalisation; and
8. Climate-related events and the transition towards sustainable economic activity.
The International Monetary Fund, in its July 2026 World Economic Outlook Update, projected global growth of 3.0% in 2026 and 3.4% in 2027. While the global economy has demonstrated resilience, geopolitical tensions, energy-price volatility, inflationary pressures and financial-market repricing remain important risks to the outlook.
Against this backdrop, businesses are increasingly focusing on supply-chain resilience, technology adoption, cost optimisation and diversification of sourcing. These developments are relevant to the electronic security and technology solutions industry in which the Company operates.
The Indian economy continued to demonstrate resilience during FY 2025-26 despite the challenging global environment. Strong domestic consumption, investment activity, infrastructure development, digitalisation and improving business confidence continued to support economic growth.
As per the provisional estimates released by the National Statistical Office, Indias real GDP grew by 7.7% during FY 2025-26, reflecting the continued strength of the domestic economy. The Economic Survey 2025-26 had earlier estimated real GDP growth at 7.4% and projected continued economic momentum in FY 2026-27.
earlier estimated real GDP growth at 7.4% and projected continued economic momentum in FY 2026-27.
The principal factors supporting Indias economic growth include:
1. Strong domestic consumption and improving purchasing power;
2. Continued Government expenditure on infrastructure and capital projects;
3. Increasing private-sector investment;
4. Expansion of digital infrastructure and digital payments;
5. Growth in manufacturing and services;
6. Increasing formalisation of the economy;
7. Continued policy support for domestic manufacturing and investment;
8. Growth of technology-driven businesses and start-ups; and
9. Increasing integration of India with global value chains.
The continued growth of organised retail, digital commerce, warehousing and supply-chain infrastructure is also expected to create opportunities for technology providers offering security, inventory management, automation and asset-tracking solutions.
The Companys business is closely linked with developments in the retail, commercial and industrial sectors. The continued expansion of organised retail and increasing emphasis on loss prevention, inventory visibility, operational efficiency and technology-enabled retail management provide opportunities for the Companys existing EAS business as well as its emerging RFID solutions.
The electronic security industry continues to evolve with the increasing adoption of technology across retail, commercial, industrial and institutional establishments. The growth of organised retail, expansion of retail chains into Tier II and Tier III cities, increasing focus on loss prevention and the need for effective asset and inventory protection continue to support demand for electronic security solutions.
The industry is also witnessing a gradual transition from standalone security products towards integrated technology solutions. Customers are increasingly looking for solutions that combine security, data, automation, inventory visibility and operational efficiency.
In the retail segment, EAS continues to remain an important loss-prevention technology. At the same time, RFID is emerging as an important technology for inventory management, item-level identification, stock visibility and supply-chain efficiency. The convergence of EAS, RFID, software and data-driven retail solutions is expected to create new opportunities for companies having technical expertise and established relationships with organised retailers.
The Company believes that the Indian market offers considerable long-term potential for electronic security, RFID and related technology solutions, supported by the continuing expansion of organised retail and increasing technology adoption.
The Company has established a significant presence in the electronic security and surveillance segment and has a long-standing relationship with several prominent retailers and corporate customers across India.
During FY 2025-26, the Companys turnover stood at Rs. 4,634.82 lakhs as compared to Rs. 4,774.93 lakhs in the previous year. The decline in revenue was relatively moderate; however, profitability was impacted during the year.
The principal reason for the decline in sales and profitability was the reduction in orders from one of the Companys major EAS customers following changes in the customers procurement arrangements. The Company also witnessed a decline in its Commercial and Industrial business during the year. These factors affected the overall revenue mix and operating profitability of the Company.
Notwithstanding these challenges, the Company continues to focus on strengthening its existing EAS business, improving product competitiveness, expanding its customer base and identifying new technology-driven opportunities.
A significant area of focus for the Company is the development of RFID solutions for retail inventory management and related applications. During the year, the Company continued to invest in RFID capabilities, including recruitment of personnel, procurement of systems, research and development and establishment of an in-house software development team. The Company has also commenced development of its own RFID-related software and solution capabilities.
The Company has already received a few initial orders for RFID solutions. Although these orders are presently of relatively small value, the Management believes that the RFID business has significant potential and expects the division to progressively scale up. Based on the current level of customer interest, development activities and business opportunities under evaluation, the Company is targeting revenue of approximately Rs. 5 crore from the RFID division over the forthcoming period.
The Company is also pursuing opportunities to strengthen its technology portfolio through collaborations and strategic relationships with technology providers and industry participants. The Management believes that the combination of the Companys established customer relationships, technical expertise and new technology initiatives will provide a platform for sustainable growth over the medium to long term.
The Company will continue to focus on cost competitiveness, product quality, customer service, technology upgradation and prudent working-capital management while pursuing opportunities in both its existing and emerging business segments.
The Company is engaged in providing sophisticated solutions in the electronic security and surveillance segment. Increasing awareness regarding loss prevention, asset protection, inventory management and operational efficiency is driving the adoption of technology-based solutions across retail, commercial and industrial establishments.
The continuing expansion of organised retail, particularly into smaller cities and towns, provides opportunities for the Companys EAS and related retail-security solutions.
The increasing adoption of technology for inventory visibility and supply-chain management also provides a significant opportunity for RFID-based solutions.
The Company has the advantage of an established presence in the retail-security industry, long-standing customer relationships, technical expertise and experience in implementing integrated solutions. The Company is also strengthening its capabilities through in-house software development and investment in new technologies.
The RFID opportunity represents an important avenue for future growth. The Companys investments in people, systems, research and development and software capabilities are intended to enable it to offer more comprehensive RFID solutions rather than merely supplying hardware. The Company expects that its existing relationships with organised retailers can provide opportunities for cross-selling and adoption of RFID solutions.
At the same time, the industry remains highly competitive, with competition from both organised and unorganised players. Aggressive pricing by competitors can exert pressure on margins and customer retention. Rapid technological developments also require continuous investment in product knowledge, technical capabilities and R&D.
The Companys business also remains exposed to fluctuations in the prices of imported products and components, foreign exchange movements, freight costs, supply-chain disruptions and changes in international trade conditions. Since a portion of the Companys products and components are sourced internationally, changes in the cost of imports may affect margins, particularly where such increases cannot be fully passed on to customers.
The Company seeks to address these challenges through continuous evaluation of products and suppliers, diversification of its product portfolio, cost optimisation, strengthening of customer relationships and adoption of appropriate technology.
The Companys business depends significantly on the continued services and performance of its Management, technical personnel, engineering team, sales personnel and other key employees. The loss of key personnel or an inability to attract and retain suitably qualified professionals could adversely affect the Companys ability to execute projects and expand its business.
The Company operates in a technology-driven industry and therefore needs to continuously review and upgrade its product portfolio in line with changing customer requirements. Rapid technological changes may result in existing products becoming less competitive or obsolete. The Company seeks to mitigate this risk through continuous technology evaluation, product development and investment in new technology areas such as RFID and software solutions.
The industry is also subject to intense price competition. Predatory pricing or aggressive competition may result in pressure on selling prices and profit margins. The Company seeks to address this through appropriate product selection, cost competitiveness, technical expertise and quality after-sales support.
The Company is also exposed to risks arising from fluctuations in foreign exchange rates, import costs, freight charges and availability of imported products and components. Supply-chain disruptions or delays in the availability of products could affect project execution and customer commitments.
Working capital management is another important area of business risk. The Company may have to commit resources towards procurement, project execution and deployment before receiving corresponding payments from customers. Delays in customer payments or cancellation or postponement of projects could therefore result in additional working-capital requirements.
The Companys future growth also depends upon its ability to successfully develop new products and markets, attract new customers, manage resources effectively and maintain appropriate operational and financial controls. Investments in new technologies, including RFID and software development, involve execution and market-adoption risks. The Company seeks to manage these risks through phased investment, customer engagement, continuous evaluation of market opportunities and prudent financial management.
Input costs may also increase due to fluctuations in commodity prices, logistics costs, foreign exchange rates and other external factors. Inability to pass on such increases to customers due to competitive pressures may affect profitability.
Competition may adversely impact the Companys business and financial performance. The electronic security industry remains highly competitive and includes both organised and unorganised participants. Competitive pricing, changes in customer preferences, technological developments and the entry of new participants may affect market share and margins.
The Company continuously monitors these risks and takes appropriate measures to mitigate their impact.
The Company has established internal control systems commensurate with the size, nature and complexity of its operations. The objective of the internal control framework is to safeguard the Companys assets and interests, ensure reliability of accounting data, maintain appropriate checks and balances and support compliance with applicable laws and regulations.
The Companys internal controls are supported by documented policies, procedures, management reviews and an internal audit mechanism. The internal audit function independently reviews the adequacy and effectiveness of internal controls and periodically reports its observations and findings to the Audit Committee.
The Audit Committee reviews the internal audit reports and also holds discussions with the Statutory Auditors, Internal Auditors and the Management on matters relating to internal controls, financial reporting and compliance.
The Management believes that the Companys internal control systems are adequate and appropriate for its present scale of operations.
Sale and service of electronic surveillance systems, security solutions and accessories constitute the major portion of the Companys income.
The Companys Total Income during FY 2025-26 was Rs. 4,764.48 lakhs as compared to Rs. 4,890.04 lakhs during FY 2024-25.
The Companys Total Expenses during FY 2025-26 were Rs. 4,288.06 lakhs, as against Rs. 4,235.09 lakhs in the previous year. The major components of expenditure were as follows:
| Particulars | FY 2025-26 (Rs. in lakhs) | FY 2024-25 (Rs. in lakhs) |
| Purchase Cost | 2,747.20 | 2,720.06 |
| Employee Benefit Expenses | 792.65 | 783.69 |
| Finance Charges | 13.52 | 27.23 |
| Depreciation | 65.37 | 73.37 |
| Other Expenses | 669.31 | 630.73 |
| Total Expenses | 4,288.06 | 4,235.09 |
The Companys turnover during FY 2025-26 was Rs. 4,634.82 lakhs, as compared to Rs. 4,774.93 lakhs in FY 2024-25, representing a decline of approximately 2.93%.
Profit before tax during FY 2025-26 was Rs. 478.41 lakhs, as compared to Rs. 581.65 lakhs in the previous year. Profit after tax was Rs. 342.37 lakhs, as against Rs. 437.95 lakhs in FY 2024-25.
The decline in profitability was primarily attributable to the reduction in orders from one of the Companys major EAS customers following changes in the customers procurement arrangements and the decline in the Commercial and Industrial business. The resulting change in the business mix, together with competitive pricing pressures and the Companys cost structure, impacted operating margins during the year.
Finance charges during the year were lower at Rs. 13.52 lakhs as compared to Rs. 27.23 lakhs in the previous year. Depreciation also reduced to Rs. 65.37 lakhs from Rs. 73.37 lakhs.
The Company continues to focus on improving operational efficiency, optimising costs, strengthening its customer base and developing new technology-led revenue streams, particularly in the emerging RFID business.
The Company continues to operate primarily in the electronic security and surveillance solutions business. The principal product and solution areas include Electronic Article Surveillance (EAS), anti-shoplifting systems, access control, CCTV, footfall counting, display security, electronic locks, digital signage and other related solutions.
During FY 2025-26, the Companys existing EAS business continued to constitute a major part of its operations. The Company also continued to develop its RFID business as an emerging growth area, particularly for retail inventory management and related applications.
The RFID business is presently in the development and early commercialisation stage. The Company has invested in systems, personnel, R&D and in-house software capabilities and has commenced receiving initial customer orders.
The Company operates primarily in India and accordingly does not have any other significant geographical segment requiring separate disclosure.
The Company considers its employees to be one of its most valuable assets. The Companys business is knowledge- and technology-intensive and therefore depends significantly on the technical expertise, experience and commitment of its employees.
During FY 2025-26, the Company strengthened its human resources in areas relevant to its future growth, particularly technology, engineering and RFID-related activities. The Company has also strengthened its in-house software development capabilities as part of its initiative to develop RFID-based solutions.
The Company continues to provide appropriate training and development opportunities to its employees to keep them abreast of technological developments and industry requirements. The Company maintains a reasonable remuneration structure and provides incentives and career-development opportunities to attract and retain competent personnel.
Industrial relations during the year remained cordial.
The Company had a total manpower of 85 employees as on 31st March 2026, as compared to 100 employees as on 31st March 2025. The change in manpower was in line with the Companys operational requirements and business conditions during the year.
The Management places on record its appreciation for the contribution and dedicated efforts of all employees during the year under review.
For and on behalf of the Board of Directors
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