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Alankit Ltd Management Discussions

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Apr 2, 2025|10:39:45 AM

Alankit Ltd Share Price Management Discussions

Annexure- 5.1

The global economy is anticipated to strengthen in 2025 as uncertainties diminish and major Western central banks are expected to lower interest rates towards the end of 2024. India has emerged as the fastest-growing economy in the world and is expected to be one of the top three economic powers over the next decade, backed by its robust democracy and strong partnerships. As India races to clinch the third spot in terms of GDP, the consumer market is also set to become the worlds third-largest by 2027.

Further India has successfully navigated multiple economic shocks in recent years, solidifying its position as one of the fastest growing major economies in the world. The IMF has raised Indias economic growth forecast to 6.8% for 2024-25 and 6.5% for 2025-26, up from its previous forecast of 6.7% for 2024. The growth in GDP during the year 2023-24 is estimated at 7.6 % as compared to 7.0% in 2022-23.

India is a unique emerging market in the globe due to its unique skills and competitive advantage created by knowledge-based services. The Indian services industry, which is supported by numerous government initiatives like smart Cities, clean India, and digital India is fostering an environment that is strengthening the services sector.

INDUSTRY STRUCTURE AND DEVELOPMENTS

E-Governance Industry Overview

India has been consistently improvising its e-governance capabilities, and now, state governments, universities, service providers, app developers, and scientists are also working on improving the access to e-governance and are increasing the acceptability among Indians.

The latest UN e-Government Survey rankings have placed India at the 100th rank out of 193 countries for the year 2020. India has transformed the middle to the high-EDGI (e-Government Development Index) level group, "reflecting improved online presence regulated by strategies linking digital policies to national development." Indias EDGI score is 0.5964 in the year 2020. Indias E-Participation Index Rank is 29 and the E-Participation Index Value is 0.8571 for the year

Over the years, a large number of initiatives have been undertaken by various State Governments and Central Ministries to usher in an era of e-Government. Sustained efforts have been made at multiple levels to improve the delivery of public services and simplify the process of accessing them.

E-Governance in India has steadily evolved from computerization of Government Departments to initiatives that encapsulate the finer points of Governance, such as citizen centricity, service orientation and transparency. Lessons from previous e -Governance initiatives have played an important role in shaping the progressive e-Governance strategy of the country. Due cognizance has been taken of the notion that to speed up e-Governance implementation across the various arms of Government at National, State, and Local levels, a programme approach needs to be adopted, guided by common vision and strategy. This approach has the potential of enabling huge savings in costs through sharing of core and support infrastructure, enabling interoperability through standards, and of presenting a seamless view of Government to citizens.

COMPANY OVERVIEW

Alankit Limited is a prominent provider of Financial and e-Governance Services, dedicated to delivering innovative solutions to millions of citizens across India. Our commitment to customer-centricity shapes our strategy, organizational structure, and investment decisions. We continually seek new opportunities to add value to our services, investing in capabilities, reskilling our workforce, and launching innovative products and platforms to meet evolving market demands.

Maintaining a high standard of quality, Alankit offers a consolidated platform for various services, ensuring ease of access for our clients. Our growth strategy includes expanding our presence domestically and internationally, aiming to establish a footprint in more cities in India and forge partnerships globally.

Our strategic objective is to build a sustainable organization that remains relevant to our clients, creates growth opportunities for our employees, generates profitable growth for investors, and contributes positively to the communities we serve. As a market leader, we monitor industry trends closely, leveraging our expertise to drive change and seize opportunities across our business segments.

Alankit leads digital transformation efforts by embracing modern core technologies, harnessing artificial intelligence, and automating business operations. These advancements help our clients thrive in the digital age. Our efforts have been recognized by well-known organizations, highlighting our commitment to delivering excellent customer service. We work closely with various government departments in India to ensure transparency and efficiency in delivering multiple services.

Headquartered in Delhi, Alankit Limited operates through a wide PAN India network, supported by a professional team. With a customer base exceeding 100 million, we continue to grow by expanding our service offerings each year. Our primary services include Manpower Services, PAN Centre, Digital Signature Certificate, Business Correspondent (BC) services, ID card printing, GSP (GST Suvidha Provider), ITR Services, Aadhaar Services, Ayushman Bharat Yojana, and more. Alankit acts as the crucial link between the government and citizens, ensuring seamless service delivery. Our strategies are aligned with our vision and mission, driving us towards achieving our ultimate goals.

VISION STATEMENT

To become a distinguished and quality-driven service provider in the sectors we serve, setting benchmarks for excellence and innovation in the industry.

MISSION STATEMENT

To be a customer-centric organization focused on building trust through unmatched standards of service excellence. Alankit Limited remains optimistic about its growth prospects, despite challenges in the macroeconomic landscape. We believe that our strategic priorities and commitment to operational excellence position us well to capitalize on significant opportunities within the e-Governance services industry.

Alankit leads digital transformation by leveraging modern core technologies, harnessing artificial intelligence, and automating business operations, enabling our clients to thrive in the digital age. Our accomplishments and commitment to superior customer service have been recognized by esteemed organizations.

The company works closely with various government departments in India to ensure transparency and efficiency in delivering a range of services to the public. With over two decades of experience, Alankit Limited is renowned for its expertise in sectors such as Manpower Services, PAN Centre, Digital Signature Certificates, Business Correspondent (BC) services, ID card printing, GSP (GST Suvidha Provider), ITR Services, Aadhaar Services, Ayushman Bharat Yojana, and more.

Identity and Access Management (IAM) - Smart ID

The use of Smart ID cards as the primary means of authentication for individuals has rapidly grown in the country. In response to the increasing demand for plastic cards, Alankit, serving as the national distributor and recognized OEM for IDP, offers instant printing solutions for plasti c ID cards. The company distributes millions of various card types, including voter ID cards, Aadhaar cards, and health cards. Over the years, Alankit has achieved significant sales of ID card printers, supporting this growing market.

Attestation Services (MEA)

The Ministry of External Affairs (MEA), Government of India, has entrusted Alankit with the responsibility of managing the administrative functions of Attestation and Apostille services across India. We offer a range of services, including MEA Attestation, Apostille Attestation, and HRD Attestation, among others, ensuring a streamlined and efficient process for our clients.

Business Correspondent (Kiosk Banking)

The global advancement in technology and the rapid evolution of the digital payment system have created significant opportunities for financial inclusion, benefiting underprivileged communities and fostering business growth for banks. As a Business Correspondent, Alankit has entered the financial inclusion space in collaboration with Indias leading banks, including Industrial Development Bank of India (IDBI), State Bank of India (SBI), Punjab National Bank (PNB), Central Bank of India (CBI), Bank of Baroda (BoB), Union Bank of India (UBI), and UCO Bank.

Alankit assists these banks in extending their reach to underserved populations at a significantly reduced cost. The company provides mainstream financial services by enrolling customers and facilitating transactions at Customer Service Points (CSPs) using remote biometric-enabled technology for Kiosk Banking. This approach not only enhances access to banking services but also promotes financial inclusion across the nation.

GST Compliance Solutions

Alankit, a premier integrated service provider, is renowned for its innovative GST solutions, supported by a robust nationwide network. The company offers comprehensive GST services for Application Service Providers (ASPs), including high availability management of the API gateway, GSTN failure handling, enriched APIs, and callbacks through the Platinum Gateway. In addition, Alankit provides GST Registration and Consultancy Services, ensuring ease of doing business and transparency.

To promote seamless implementation of the GST regime across various business sectors in India, Alankit has launched three key GST solutions through mobile and web-based interfaces:

API Solutions (Pass Through)

GST Smart Muneemji Software

e-Raahi & e-Invoicing

Cloud-based ERP (Billing & e-Invoicing)

Integrated GST Compliance Solutions with any ERP (SAP, Oracle, Microsoft Nav., etc.)

These solutions aim to increase compliance and raise awareness among business entities, ensuring they are equipped with the necessary tools for efficient GST management.

PAN Services

With over a decade of experience, Alankit provides efficient and cost-effective PAN Card services through digital channels. The company simplifies operations for the government by offering a range of services, including the acceptance of fresh PAN applications, processing requests for changes or corrections in PAN particulars, and instant PAN issuance. These services are available across India, making it convenient for individuals and businesses to manage their PAN -related needs.

Manpower and Staffing Management - Alankit provides customised solutions for all types of manpower & staffing services. Our competent staffing services division assists majorly Government departments in finding people who will meet the unique needs of their organisations and enhance business agility. Alankit is a name to reckon with when it comes to providing exemplary Manpower & Staffing services.

Alankit offers learning & development training programs to create an effective organizational learning strategy matched with a business strategy. Our team of experts has designed the course to empower you to acquire strategies to deliver compelling learning solutions. Through our refined role and competencies of the T&D function, we nurture talents and help you achieve your goals.

Digital Signature Certificate - Alankit, via one of its subsidiary companies, Verasys Technologies, provides path-breaking and maverick eSign or electronic signature-related solutions. At Alankit, the dedicated team of professionals strives to stay relevant with a market- driven approach to execute solutions that address our customers needs and enhance their ease of operations.

Payment Solutions - In order to harness our cutting-edge technology and ensure a smooth gateway process, Alankit specialises in providing card payment solutions to businesses of all sizes. Having years of expertise and sound knowledge in the payment domain, we have established a standard of excellence in state-of-the-art technology and innovation.

Alankit takes pride in mentioning that is is an enlisted credential partner with MOSIP and have become part of an ecosystem invested in building foundational digital ID systems that are trustworthy, secure, efficient, and interoperable, while being customized to specific needs.

National Insurance Repository (NIR) - Everyone wants to attain financial security in their lives, and saving alone is not enough; safeguarding assets with insurance policies has become critical. Alankit is a pioneer in the insurance broking industry, providing a full range of insurance services, from satisfying clients insurance needs to advising, settling claims, and managing risk. The Company has the requisite scale to deliver solutions by addressing the specific insurance needs of the clients. As a leading Insurance Broker, we aim to be the best in our chosen fields by making an individuals life and corporate processes less risky by letting out higher risk through insurance coverage. Our commitment is to provide a simple and efficient service for accessing all insurance policies through a single portal, as well as a secure payment gateway. The two major types of insurance that are catered under our umbrella are:

Life Insurance Non-Life Insurance

Ayushman Bharat - At Alankit, we offer cost-effective and secure e-card printing solutions for your e-Ayushman Bharat Card under the PMJAY scheme. Our card printers are packed with industry-leading innovations that make desktop ID card printing simple and economical. As the PMJAY Service Agent (PSA) of Ayushman Bharat The objective of the scheme is to cater to the financial needs of the vulnerable and underprivileged sections of the society. This scheme host a variety of benefits such as:

Covers all hospitalisation expenses with cashless transactions to beneficiaries

Pre and post-hospitalisation costs

Can be used by all family members

No cap on family size, age, or gender

Pre-existing conditions are included from day one

Paper-To-Follow (P2F) - Alankit assists in implementing and maintaining the Paper to Follow (P2F) Process for the Cheque Truncation System through its extensive network of offices, which is an NPCI initiative to condense the clearing cycle for swifter cheque clearance. In order to maintain CTS running smoothly, NPCI has recommended using an agency structure to manage the P2F process at each of the Grid CTS facilities on its behalf. In addition, in times of need, the firm simplifies the procedures enabling Indian individuals to have easier access to their money.

Aadhaar Services - With an extensive industry experience, Alankit has exhibited its prowess in providing efficient Aadhaar services to Indian citizens, in a simple and fast manner. With its network of branches spanning PAN India, Alankit has successfully enrolled millions o f citizens under the scheme so far.

Atal Pension Yojana - Atal Pension Yojana (APY) is an initiative of Government of India to convert pension-less society into pensioned society. The objective of APY is to encourage people to save small amounts during their productive years which will enable them to draw pension in the old age. APY is based on defined benefit for providing minimum guaranteed pension ranging from Rs. 1000 to Rs. 5000 p.m.

Scanning & Digitization - Recordxpert.com, a web-based health and wellness portal from Alankit Limited, aims at securing and leveraging health records of the users to provide hassle free healthcare services. Its membership allows the users to store their health records and other health information online and access it anywhere, anytime. Having accurate health records and complete past information helps the healthcare providers to provide more effective treatment while reducing the chances of medical errors.

OUR STRENGTH

(i) Experienced execution team & associates

(ii) Good reputation and Brand Image

(iii) Significant Experience

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has devised a robust internal control framework to safeguard the Company keeping in view the size and complexity of operations.

The Company reviews and tests the robustness of the internal control system, covering all functions and business areas, at regular intervals.

The system is responsible for assuring compliance with operating systems, internal policies, and legal requirements, and suggesting improvements to systems and processes.

OPPORTUNITIES

Government Initiatives: The various policies issued and initiatives taken by the Central and State Government will pave the way for rising of E governance Sector.

Digital Transformation

As consumers increasingly rely on digital platforms for easy access, querying and engagement with prospective brands and services, ensuring meaningful presence across online channels is critical. Your Company is investing substantial time and resources to develop compelling content and presence across various social media platforms, web and mobile applications. These engagements are viewed as meaningful investments to convince and retain consumers towards our brand and services and build long-term relationships.

Expanding Market Reach

Increasing the reach in rural markets by putting sharper focus on increasing mind share and market share will be important. Companies would need to expedite their rural distribution strategy, keep consumers engaged with new offerings and drive the premiumization strategy to adapt to the changing landscape. Through the cluster-based approach, that is powered by data and technology, your Company has made deeper penetration into newer markets, unleashed growth potential and created a transparent planning process.

THREATS

There are several threats associated with the Business of the Company such as:

Threat of new entrants in the market.

Economic Volatility.

Even in the presence of the above said threats we continue to remain optimistic about the long term growth of the Business Environment and the Opportunities.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year, your Company recorded total revenue of Rs. 12928.72 lakhs as compared to Rs. 10993.46 lakhs in previous year. The Profit after tax for the year stood at Rs. 1547.29 lakhs as against previous years Rs. (418.92) lakhs.

Further Your Companys Net Sales/Income from Operation has increased by 16.09%. The Directors are making continuous efforts to increase Profitability of the Company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT- INCLUDING NUMBER OF PEOPLE EMPLOYED

Alankit implements industry wide best practices and adheres to new developments in human resource management. To ensure transparency at the workplace for employees, Alankit has institutionalized its processes across all functions and hierarchies. With employees being the companys primary asset, Alankit provides employee benefits in line with industry standards. Through intensive engagement and training initiatives, it also enables employees with technical and functional capabilities, while keeping them abreast with the latest technology and industry trends.

Alankits dynamic and fast paced work environment is present across 12 Group Companies and 3 divisions-Governments to Citizen Services, Financial Services and Life Care Services. The company operates through a wide network of 22 Regional Offices across India and 3 overseas offices at London, Dubai and Singapore.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

The key financial ratio for the Financial Year 2023-24 and changes therein as compared to the immediately preceding financial year are as under:

a. Trade Receivables Turnover ratio: Net credit sales/Average Account Receivable. The ratio for the year was 1.90 (times) as against 1.76 (times) in the previous financial year. This year this ratio has been increased due to the increase the collection.

b. Debt Service Coverage ratio: EBIT / Interest Expense. The ratio for the year was 7.28 (times) as against 1.73 (times) in the previous year. This ratio has been increased in the due to increasing revenue.

c. Current Ratio: Current Assets/ Current Liabilities. This ratio for the current financial year was 1.85 (times) as compared to 2.15 (times) in the previous year. The ratio has been increased due to increase in short term debts.

d. Debt-Equity ratio: Total Debt/ Shareholders Equity. This ratio for the year was 0.08 (times) as against 0.07 (times) in the previous year. This ratio has been increased due to increasing borrowing.

e. Net Profit Margin: Net Profit/Total Revenue from operations for the current financial year was 12.22 % as against -3.84 % in the previous financial year, due to increasing revenue and cost reduction.

OUTLOOK

Alankit Limited maintains an optimistic outlook on its growth prospects for the upcoming year, despite the prevailing challenges in the macroeconomic landscape. The company firmly believes that its strategic priorities and commitment to operational excellence will position it to leverage significant opportunities within the E Governance services industry

CAUTIONERY STATEMENT

This Management Discussion and Analysis (MD&A) contains forward-looking statements that are subject to inherent risks and uncertainties, which could cause actual results to differ materially from our expectations. Factors such as market conditions, economic factors, regulatory changes, and unforeseen events may adversely impact our financial performance and business operations. Readers are advised to carefully review the information provided, consider the risk factors disclosed in our filings, and not place undue reliance on forward-looking statements as they are based on current expectations and may change.

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