Aeonx Digital Technology Ltd Management Discussions

For the Financial Year 2025-26

Cautionary Statement

Statements made under this section describing the Companys projections, estimates and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in government regulations, tax laws and other statutes and incidental factors. The information provided in the Economy Outlook and Industry Scenario Outlook sections is based on our internal study, which is without prejudice.

Although the expectations are based on reasonable assumptions, the actual results might differ.

Economy Outlook

The global economy enters 2026 on a steadier footing, navigating an environment defined by technological acceleration, an accelerating adoption of artificial intelligence and continuing geopolitical and trade-policy uncertainty. While the structural shifts in global supply chains of recent years persist, energy and commodity markets have largely stabilised and inflationary pressures have continued to ease, even as central banks remain vigilant.

According to the International Monetary Funds World Economic Outlook Update of January 2026, global growth is projected at approximately 3.3% in 2026, a modest upward revision supported by technology investment, accommodative financial conditions and private-sector adaptability. The United States retains moderate momentum on the back of consumer spending and innovation, China continues to emphasise domestic consumption and technology self-reliance, and the Euro area, though facing structural headwinds, is seeing rising investment in green energy and Al-driven automation.

India remains a bright spot in the global growth story. As per the First Advance Estimates of the National Statistical Office (NSO), Indias real GDP is estimated to grow by 7.4% in FY 2025-26, up from 6.5% in the previous year, driven by robust domestic demand, sustained infrastructure investment, a resilient services sector and a thriving digital economy. Consumption, accounting for over half of GDP, continues to expand, while exports are diversifying into high-value manufacturing and technology services.

Indias digital transformation trajectory continues to accelerate-spurred by record data consumption, the deepening rollout of 5G, pervasive cloud adoption, the mainstreaming of generative and agentic AI across sectors, and government-led initiatives such as Digital India, the IndiaAI Mission and the Semiconductor Mission. Enterprises are aggressively moving toward cloud-native, AI- embedded and automation-led business models, creating fertile ground for technology partners like AeonX Digital to deliver transformative solutions.

Industry Scenario Outlook

Digital Technology Services

The fiscal year 2025-26 reinforces an inflection point for digital technology services. The convergence of cloud computing, artificial intelligence, IoT and industry-specific SaaS products continues to redefine operational models. Businesses are prioritising platform-led transformation over isolated technology deployments, seeking partners who can integrate strategy, execution, applied AI and managed services under one accountable relationship.

AeonX Digital is positioned as a next-generation transformation partner, delivering end-to-end solutions that blend SAP expertise, multi-cloud engineering, in-house AI innovation and niche industry products to meet sector-specific demands - particularly in source-to-pay, distribution management, travel and expense, logistics and manufacturing digitalisation. The Company holds SAP Gold Partner, AWS Advanced Tier Partner, Google Cloud Select Tier Partner and Claude (Anthropic) Select Tier Services Partner status, giving it accountable reach across the enterprise technology stack.

Cloud Computing

The cloud market in India and globally continues its rapid expansion, with hybrid and multi-cloud strategies becoming the norm. Enterprises are adopting Al-powered cloud architectures to enhance scalability, resilience and operational agility. AeonX Digitals Cloud Transformation Practice offers:

- Cloud migration and modernisation with zero-downtime execution.

- Cloud-native application development for business agility.

- Managed cloud services with security, compliance and cost optimisation, unified through the Companys CloudLedger FinOps and Multi-cloud Management Services acrossAWS, Google Cloud and SAPBTP.

- Industry-specific SAP-on-Cloud, RISE with SAP, GROW with SAP and Al-on-Cloud deployment expertise.

Artificial Intelligence & Automation

AI is no longer experimental - it is foundational to competitive advantage. From generative and agentic AI to predictive maintenance in manufacturing, AI is reshaping cost structures and the speed of innovation. During the year, the Company deepened its AI capabilities and advanced Hanuman AI, its own multi-tenant, agentic enterprise AI platform powered by HanuMan, a proprietary, fine-tuned large language model built and self-hosted in-house - reducing dependence on foreign frontier models, which are retained only as a controlled fallback. AeonX Digitals AI capabilities span:

- Generative and agentic AI for decision-making, including enterprise agents such as KYE (Know Your Employee), an HR Assistant, AB AP Code Studio and a SAP Basis Agent delivered through Hanuman AI.

- Predictive analytics for supply chain and asset management.

- Al-driven invoice, procurement and expense automation.

- Industry 4.0 enablement through IIoT data intelligence and the Companys DataSetu / ConnectX integration layer.

Niche Product Services

With a strong and expanding portfolio of proprietary solutions, AeonX Digital delivers highly specialised, domain-specific platforms that integrate seamlessly with ERP and cloud ecosystems. The Companys nine proprietary products span procurement, distribution, expense control, logistics, manufacturing, analytics, integration and customer engagement - enabling measurable efficiency andROI for clients:

- SupplierX - intelligent Source-to-Pay; OrderX - intelligent Distribution Management; Xpense - intelligent Travel & Expense.

- Logystix - intelligent Logistics Operations; ManuFex - intelligent Production Planning & Execution (with the inhouse FlexMRPT engine).

- AeonXIQ - AI analytics & decision intelligence; SetuMove - connected enterprise movement; DataSetu - enterprise data integration; CRM-360 -360 deg customer relationship management.

These products cater to procurement, expense control, logistics optimisation, production planning and customer engagement, and are increasingly delivered as scalable, subscription-based SaaS offerings.

Segment-wise Performance

The Company operates predominantly in a single business segment - enterprise digital technology products and services. Segment-wise performance of the Company is included in the performance of the Company and its subsidiaries as disclosed elsewhere in this Annual Report and the financial statements.

Opportunities, Threats, Risks and Concerns Opportunities

- Surging demand for Al-enabled cloud transformation across industries.

- Expansion potential in niche SaaS platforms for procurement, distribution, expense, logistics and manufacturing automation.

- First-mover advantage in Al-powered ERP extensions, agentic enterprise AI and industry-specific GenAI applications built on the Companys in-house model.

- Exporting digital solutions and products from India to global markets, leveraging cost efficiency and domain expertise. Threats

- Rapid technology evolution may shorten product lifecycles, demanding accelerated innovation

- Intensifying competition from hyperscalers, global consulting giants and specialised start-ups

- Geopolitical instability affecting supply chains and cross-border service delivery.

Risks

- Cybersecurity and data-privacy risks amplified by AI and cloud proliferation.

- Regulatory changes in AI governance, data residency and industry-specific compliance could require rapid adaptation. Concerns

- Talent availability in AI, cloud and cybersecurity remains a bottleneck.

- Balancing rapid innovation with profitability during global macroeconomic fluctuations.

Futuristic Scope for AeonX Digital

Looking ahead, AeonX Digital aims to:

- Expand Al-driven industry solutions with predictive and prescriptive intelligence, and scale the Hanuman AI platform and its in-house language model across enterprise use-cases.

- Grow platform-as-a-service offerings for SupplierX, OrderX, Xpense, Logystix and ManuFex to scale globally.

- Invest in edge AI and IoT integration for manufacturing and logistics.# Develop sovereign-cloud and industry-compliant AI models for manufacturing, mills and mining and retail sectors.

Details of Significant Changes in Key Financial Ratios:

Particulars	FY 25-26	FY 24-25
Debtors Turnover Ratio (Number of Days)* (Avg Debtors/Sale )	47	104
Interest Coverage Ratio* (EBIT/Interest )	-	-
Current Ratio (CA/CL)	3.16	5.10
Operating Profit Margin (in %)* (EBIT )/net revenue	-1.76%	17.93%
Net Profit Margin (in %)* Net Profit/ net revenue	-2%	12%
Return on Capital Employed ( in % )* EBIT/Capital Employed	-2%	10%

* Change in ratios is due to decrease in profitability and volume as compared to previous years.