Allied Digital Services Ltd Management Discussions

Industry Overview

GLOBAL ECONOMY AND INDIAN ECONOMY

The global economy proved resilient through FY26, even as growth remained modest and unevenly distributed. The International Monetary Fund projects world output to grow 3.0% in 2026 and 3.4% in 2027, following an estimated outturn of 3.3% in 2025. Advanced economies continued to expand at a measured pace, while momentum in emerging market and developing economies is expected to ease to about 3.8% in 2026 before recovering.

The disinflation stalled, with global headline inflation projected to rise from 4.1% in 2025 to 4.7% in 2026 before easing again in 2027. Two forces defined the year. The outbreak of conflict in the Middle East weighed on energy importers and lifted commodity prices, while accelerating investment in the global technology cycle, led by intelligence, supported activity in economies positioned within the technology value chain. Trade policy shifts, elevated geopolitical tension and higher-for-longer interest rates remained the principal risks to the outlook.

India retained its position among the fastest-growing major economies. Real gross domestic product is estimated to have grown 7.7% in FY 2025-26, up from 7.1% in the previous year, with nominal GDP growth of 8.9%. Growth was supported by a broad-based recovery in domestic demand, with private final consumption expenditure rising 7.7% of recent years has and gross fixed capital formation, the principal measure of investment activity, growing 8.2%. Retail inflation moderated to among its lowest levels in years, averaging 1.7% between April and December 2025, the softest reading since the current consumer price index series began, allowing the Reserve Bank of India to reduce the policy repo rate through the year. Indias combined merchandise and services exports reached a record of about US$863 billion in FY 2025-26, led by an 8.7% rise in services exports, while the Government sustained its infrastructure push with a capital expenditure outlay of 11.21 lakh crore for the year and a further increase to 12.2 lakh crore budgeted for FY 2026-27. These gains, underpinned by macroeconomic stability, continued structural reform and favourable demographics, reinforced Indias standing as a rising global economic force.

The technology sector remained a bright spot within a cautious global economy. Worldwide IT spending is projected to reach US$6.37 trillion in 2026, an increase of 14.2% over 2025, with data centre systems and infrastructure-as-a-service the fastest-growing segments as investment in artificial intelligence infrastructure accelerates. IT services, comprising application and infrastructure implementation and managed services, is expected to exceed US$1.87 trillion. Enterprise-wide digital transformation, the scaling of generative and agentic AI, and sustained demand for cloud migration, cybersecurity and hybrid infrastructure continue to drive this expansion.

India continued to consolidate its position as a global technology hub. The countrys technology sector is estimated to have crossed US$315 billion in revenue in FY 2025-26, a growth of 6.1%, with exports of about US$246 billion and AI-related revenue estimated at US$10 billion to US$12 billion. The year was described as an inflection point, with artificial intelligence moving from experimentation to function-specific deployment and reshaping delivery models across the sector. The domestic market continues to benefit from: - Government-led investment in digital public infrastructure, including public service and defense platforms.

- Rapid enterprise adoption of AI and automation across business functions.

- A continued rise in cybersecurity demand as geopolitical tension and cross-border threats grow.

Automation and AI are now central to enterprise service operations, while the Government continues to invest in digital public infrastructure and AI capability for public agencies, institutions and enterprises. The Company has embedded an AI-first approach across its business, extending AI-Ops into customer operations, building agentic AI solutions and equipping its teams with AI tools to strengthen internal efficiency.

Against this backdrop, the Companys

FY 2025-26 performance reflects a deliberate shift from traditional IT services toward AI-enabled managed services, cybersecurity, digital engineering, smart infrastructure and global delivery expansion. The following sections discuss how these market conditions translated into business performance, strategic priorities, operating initiatives, people practices, ESG commitments and key risks for the Company.

Source: IMF, World Economic Outlook Update, July 2026, MoSPI, Provisional Estimates of National Income 2025-26; Economic Survey 2025-26; Reserve Bank of India; Ministry of Commerce and Industry; Union Budget 2026-27, Gartner, Worldwide IT Spending Forecast, July 2026, NASSCOM, Technology Sector in India: Strategic Review 2026,

Our Business

Allied Digital Services Limited (hereafter the Company or ADSL), headquartered in Mumbai and established in 1995, has evolved from one of Indias early third-party infrastructure support providers into a global IT consulting and services company. The Company built its foundation in infrastructure management services through multi-year annuity contracts and now delivers managed services, systems integration, digital workplace services, enterprise infrastructure transformation, cybersecurity, digital engineering, smart infrastructure and AI-Ops-led automation solutions across more than 70 countries.

The Companys business model is increasingly shifting from conventional technology services toward platform-led, AI-enabled and outcome-oriented engagements. Its capabilities across managed services, digital workplace, cybersecurity, cloud, smart infrastructure, digital engineering and automation allow it to serve customers across the full technology lifecycle-from consulting and design to implementation, operations, governance and continuous improvement. This integrated model supports recurring revenue, customer stickiness, cross-selling opportunities and participation in larger transformation programmes across enterprise and government markets.

The financial year was challenging for the IT industry, primarily due to several macroeconomic factors, including the conflict in the Middle East, immigration-related challenges in the US and US tariff announcements. Against this environment, the Company delivered its highest-ever annual revenue of 968 crore, reflecting growth of about 20% over the previous year, and closed the year at an exit run rate of 1,000 crore after posting revenue of 268 crore in the fourth quarter. This performance was supported by broad-based growth across India and international markets, meaningful additions in enterprise and government business, disciplined execution of large contracts and increasing traction for AI-enabled, cybersecurity, smart infrastructure and managed services offerings.

Key business wins during the year included the following:

A leading global pharmaceutical company headquartered in Europe awarded the Company a five-year end-user services contract for its global operations.

A leading New York-based fashion brand awarded Allied Digital a global end-user services contract.

The Company secured a three-year enterprise infrastructure services contract from a large premium investment-management company based in New York, USA.

The Company received a five-year subcontract to provide service desk and end-user field services for a well-known global offshore oil drilling company operating out of Texas, USA.

A leading insurance company in India awarded the Company a five-year contract for end-user services, asset management, the Digital Desk platform and AI-enabled automation.

The Company is delivering a five-year end-user service desk contract for a leading global IT services and consulting company.

The Government of Maharashtra awarded the Company a five-year comprehensive safe-city project, including a command centre, for an industrial zone.

The Company enters FY2026-27 with a healthy pipeline of sizeable opportunities and expects several active deals to progress toward closure in the early quarters. With AI-led solutions, refined business models and an anticipated improvement in macroeconomic conditions by the end of the second quarter, the Company expects its opportunity pipeline to strengthen through the remainder of the financial year. Section 2 therefore establishes the foundation for the subsequent discussion on technology trends, managed services, Digital Desk, growth drivers and business outlook, showing how the Companys operating momentum is being converted into a broader transformation agenda.

Technology Trends

Across industries, large and mid-sized enterprises have moved decisively to make AI operational within their businesses. Data-centred solutions have moved to the centre of enterprise technology, agentic AI is gaining rapid acceptance, and AI tools are now embedded in everyday knowledge work. Building on the maturity of large language models and the use of retrieval-augmented and generative AI, enterprises are increasingly adopting agentic AI to support contextual decision-making.

Enterprises across the globe are increasingly investing in AI to reduce operating costs, improve end-user experience and strengthen decision-making. At the same time, they recognise that AI adoption must be supported by robust governance, cybersecurity and compliance frameworks. Data sovereignty has also become a core requirement, driving demand for local data centres, sovereign cloud environments and secure infrastructure for AI workloads.

These trends create significant opportunities for Allied Digital in data-centre build, cloud migration, technology operations and managed services.

AI has become central to enterprise transformation. Many organisations have already piloted focused AI use cases and deployed leading large language model platforms for employee and organisational productivity.

The next phase is broader process transformation, where AI assistants and automation capabilities are embedded into end-to-end workflows through agentic AI architectures. In enterprise IT services, end-user support and IT operations are among the areas most likely to be transformed by these solutions.

Several established technology companies now offer agentic AI platforms,whilemanysmaller are packaging fast-track AI solutions focused on enterprise automation. Leading large language models, including Anthropic Claude, gained prominence during the year. In parallel, computer-vision-based AI is gaining traction in manufacturing, large-scale supply chains, insurance and citizen-security solutions. Allied Digital has built its own agentic AI platform architecture and is developing ready-to-deploy use cases for faster customer adoption. Cybersecurity continues to remain a priority for enterprises as regulatory, operational and geopolitical risks increase. The Digital Personal Data Protection Act is expected to gain prominence as compliance deadlines approach for large and medium-sized organisations, while operational technology security remains critical for manufacturing, FMCG and industrial businesses. Allied Digital has expanded its cybersecurity portfolio beyond OT security to include comprehensive consulting, assessment, implementation and DPDP-readiness support.

New applications are increasingly being prototyped, developed and tested using AI platforms and AI-based automation agents. Cybersecurity practices are also evolving through AI-enabled application agents and API integrations. As a result, AI governance is emerging as a critical enterprise IT priority. Data classification, data governance and data security are becoming standard requirements for application upgrades, while multi-cloud strategy, workload migration and cloud FinOps continue to remain in demand. Smart manufacturing is evolving from IoT-enabled monitoring to AI-driven autonomous operations. In this model, IoT acts as the data and connectivity layer, while AI enables cognitive analytics, predictive decision-making and closed-loop automation.

Emerging use cases include autonomous maintenance, closed-loop process optimisation, dynamic digital twins and flexible robotics. These developments create opportunities for the Company to extend its digital engineering, computer vision and automation capabilities into manufacturing and industrial environments.

The Company has embarked on a 10x growth strategy, targeting sustained annual growth of more than 25% over the long term. To support this ambition, ADSL is pursuing a multi-pronged strategy focused on geographic expansion, AI-first service transformation, data-centre opportunities, public-place technologies, computer vision, digital twins and global cybers ecurity consulting.

Managed IT Services Business Highlights

Enterprises are increasingly seeking AI-enabled operations to reduce IT costs over time while improving service quality. Although the Company continues to deliver large global contracts effectively, customers remain focused on cost optimisation. The Company is responding by balancing pricing discipline, margin protection and AI-led delivery efficiencies to create value for both customers and the Company. From an operations perspective, the Company continues to manage costs innovatively while preserving employee benefits and complying with statutory requirements. For India-based enterprises, FY2025-26 was a challenging year, with cost control and selective AI implementation remaining key priorities. Investment in cybersecurity also increased during the year. The Company acquired several marquee and well-known customers, delivering high-value and transformative managed services. It is also actively managing attrition and training employees in broader, future-oriented skills to strengthen delivery capability.

The Company s AI-first strategy within managed services is gaining momentum. Digital Desk has been integrated with additional asset-management tools, and the Companys agentic AI architecture is being deployed for customers. AI-based infrastructure operations have been rolled out for selected customers to accelerate diagnostics, root-cause analysis and resolution. The Company is also implementing advanced workflow technologies driven by AI agents to accelerate IT automation, developing AI-enabled security tools and partnering with companies such as Salesforce and enterprise AI platform providers to support AI-led process transformation.

From an overall technology- practice perspective, the Company has realigned its capabilities into five focused service towers:

- Enterprise infrastructure IT services (including cloud)

- Digital Engineering Services (Smart cities, Computer Vision, IoT)

- Digital transformation - AI and Automation projects

- Cybersecurity services and network solutions

- Digital workplace services and solutions

Across these practice areas, the Company continues to adopt emerging technologies, develop next-generation solutions and train its teams to deliver at scale.

As competition intensifies customers remain focused on cost optimisation, the Company is refining its pricing, delivery and operating models to remain agile and commercially competitive. The marketing and sales teams continue to track evolving market demand, helping the Company align its offerings with customer priorities and prepare for future growth opportunities.

Master Systems Integration (MSI) - Smart City Solutions Highlights

ADSLs Master Systems Integration and Smart City Solutions business brings together consulting, solution design, digital infrastructure deployment, enterprise applications, integrated command-centre implementation and long-term operations support. The Company entered this segment through the Pune Pimpri-Chinchwad City Surveillance Project, a pioneering safe-city initiative designed to strengthen public safety, support law enforcement, improve traffic-violation analysis and enable rapid incident investigation through a 24x7 video-surveillance and security command centre. The project included infrastructure build, operations and maintenance, and established the Companys execution credentials in large-scale urban technology programmes.

The Company continues to pursue smart city, safe city and industrial-zone opportunities by leveraging its domain experience, command-centre expertise, systems-integration capability and ability to manage complex stakeholder environments. These capabilities position ADSL to participate in technology-led public infrastructure programmes that improve citizen safety, operational visibility and urban governance.

FY 2025-26 was an important year for this business, with the Company strengthening its presence in safe-city and industrial surveillance opportunities through the following order:

- A significant safe-city order from the Government of Maharashtra for industrial zones.

The Company is also extending its digital engineering capabilities into computer-vision-led enterprise solutions. By combining IoT, video analytics and AI-based image intelligence, it is helping customers improve shop-floor visibility, productivity, safety monitoring and operational decision-making. This creates an opportunity to expand the smart-city capability base into adjacent enterprise and industrial use cases.

In FY 2025-26, approximately 20% of the Companys revenue was generated through smart city projects acquired from government customers. This reinforces the segments relevance as a meaningful growth vertical and provides a strong platform for future opportunities in safe cities, industrial surveillance, computer vision and integrated public infrastructure solutions.

Digital Desk

Digital Desk, the Companys AI-Ops-based ITSM and ESM no-code and low-code platform, continued to evolve during the year as a strategic platform for enterprise service management, automation, endpoint governance and AI-enabled operations. Key enhancements included the following:

- Adoption of agentic AI architecture to improve end-user experience, automate routine tasks and strengthen operational responsiveness.

- Augmentation of the unified endpoint management solution to provide integrated endpoint control, compliance monitoring, patching, automation, self- healing and asset tracking.

- Integration of IoT platform capabilities to support command-and-control solutions for enterprise and infrastructure environments.

- Development of new cybersecurity tools to support intelligent SAST and DAST scans, strengthening secure-application assessment capabilities.

- Digital Desk is certified by CERT-In and PinkVERIFY.

- Enhancement of next-generation workflow engines that can be driven by AI agents to support complex, customized and automated enterprise workflows.

- Expansion of ready-to-deploy use cases on the Digital Desk Bot Platform to accelerate customer adoption and improve time-to-value.

These enhancements position Digital Desk as an important enabler of the Company s AI-first managed services strategy. By combining service-management workflows, automation, endpoint intelligence, cybersecurity assessment and bot-led engagement, the platform strengthens service quality, improves operational efficiency and supports the Companys move toward platform-led managed services.

Financial Highlights

The key financial highlights of the company for the financial year ended March 31, 2026 are given below:

(INR in Lakhs)

Particulars		Standalone			Consolidated
	2025-26	2024-25	Y-o-Y Change	2025-26	2024-25	Y-o-Y Change
Revenue	38,782	36,615	5.92%	96,791	80,707	19.93%
EBIDTA	5,511 *	5,407	1.92%	11,234 *	9,870	13.82%
PBT	3,345 *	2,972	12.55%	8,063 *	6,077	32.68%
PAT	(81)	1,073	-107.55%	3,552	3,211	10.62%

* Excluding one-time provision of Rs. 36 crores in FY26

Revenue

Sustaining its operational momentum during the year, the company successfully renewed key agreements and secured high-volume Smart/Safe City project contracts, driving a 19.93% year-over-year increase in consolidated revenue to INR 96,791 lakhs alongside a steady 5.92% growth on a standalone basis.

EBIDTA

On a standalone basis, EBITDA saw a marginal improvement of 1.92% compared to the previous year. Consolidated EBITDA margin expanded significantly by 13.82%, driven by strong operational efficiencies across the group.

Profitability

The enterprise achieved robust profitability growth in its consolidated performance, which successfully mitigated compressed standalone margins caused by operational challenges in overseas markets.

Key Financial Ratios

Particulars	Standalone		Consolidated
	2025-26	2024-25	2025-26	2024-25
Debtors Turnover (times)	3.69	3.91	3.81	4.30
Inventory Turnover (times)	3.69	3.65	12.10	10.42
Interest Coverage Ratio (times)	5.37	5.68	6.39	8.33
Current Ratio (times)	1.67	2.43	2.52	3.02
Debt Equity Ratio (times)	0.25	0.14	0.58	0.15
Operating Profit Margin (%)	5%	15%	7.78%	8.56%
Net Profit Margin (%)	-	-	3.67%	3.98%
Return on Equity (%)	-	-	5.29%	5.08%

Overall working capital performance was mixed. A mild deceleration in debtor collections was successfully offset by a sharp, favourable expansion in consolidated inventory velocity, reflecting strong underlying product demand and highly optimized stock liquidation.

Interest coverage contracted due to lower standalone profits and the deployment of additional credit facilities during the current year.

Working capital current ratios normalized downward across the enterprise, yet liquid asset buffers remain completely secure and ahead of benchmarks.

The enterprise strategically increased leverage by securing additional financing facilities during the current year to fund our long-term project pipeline and accelerate group-level growth.

Standalone margins faced an acute contraction from input cost pressures, whereas consolidated profit margins demonstrated strong structural resilience.

The parents break-even performance lowered standalone returns, but robust subsidiary earnings expanded the consolidated Return on Equity.

Key Drivers of Growth

The Companys growth agenda is supported by a combination of market-facing opportunities and internal capability-building initiatives. AI-first service transformation, strengthened sales and marketing, strategic partnerships, geographic expansion, innovation-led platforms, cybersecurity and compliance-led demand, mature service governance and a clear long-term roadmap together form the foundation for sustainable growth. These drivers are designed to expand addressable markets, improve customer outcomes, strengthen delivery efficiency and support the Companys transition toward higher-value, platform-led and outcome-oriented services.

The following growth drivers are expected to support the Companys medium- and long-term expansion:

1 AI-First Strategy

The Company has advanced its AI-first strategy by developing the first version of its agentic

AI architecture and piloting it with selected customers. The combination of automation and AI is expected to improve customer return on investment by enhancing productivity, accelerating resolution, improving service quality and enabling more predictive operations. The Company is augmenting advanced workflow capabilities to transform IT processes and enable autonomous virtual agents. It has also evaluated multiple AI platforms and is training personnel to support broader enterprise AI adoption, systems integration and automation of non-IT processes. Voice-to-text and text-to-voice technologies are being assessed to enable more effective first virtual AI agents. More than 100 key resources have been trained in AI, supporting both customer-facing transformation and internal productivity improvement.

2 Strengthened Sales and Marketing

The Company has strengthened its sales and marketing engine to support future revenue growth. During the year, it added senior sales leadership in the US, expanded the sales organisation and appointed a new leader for the India managed services business. The Company has also enhanced its digital presence through a refreshed website, broader social-media engagement and improved brand outreach. Internally, the global implementation of Salesforce has strengthened lead tracking, pipeline management, deal analysis and sales governance. These initiatives are expected to improve market visibility, customer engagement and conversion discipline.

3 Strategic Global Partnerships

The Company continues to build strategic partnerships with leading global technology players to expand its solution portfolio, strengthen market access and improve customer value. The recent addition of IBM as a strategic partner has already contributed to a large FMCG opportunity, and the Company is actively pursuing several additional opportunities through this collaboration. Such partnerships are expected to support scale, credibility and access to larger transformation engagements.

4 Geographic Expansion

The Company is actively expanding into newer geographies to increase addressable markets and diversify growth opportunities. It is evaluating partnerships in Japan, has established new partnerships in Mauritius to address opportunities in Mauritius and Africa, and continues to explore inorganic growth opportunities globally. These initiatives are intended to strengthen regional presence, improve customer proximity and support long-term international expansion.

5 Innovation-led Platforms and Solutions

Innovation remains central to the Companys growth model. Digital Desk, the Companys proprietary low-code and no-code enterprise service-management platform, continues to be enhanced with new capabilities and now manages more than 6 million support tickets annually while maintaining an average first-time resolution rate of approximately 87%. The Companys AIM 360 cybersecurity framework has also been extended through an assessment platform aligned with NIST-based industry controls. In addition, AI-enabled software development is accelerating solution creation, while computer-vision applications are being expanded beyond smart cities into enterprise environments. The Company is also developing new business models and innovative pricing structures to remain competitive and responsive to customer needs.

6 Cybersecurity and Compliance-led Demand

Cybersecurity, data protection and regulatory compliance are expected to remain important growth drivers. Increasing focus on the Digital Personal Data Protection Act, OT security, enterprise risk management and secure AI adoption is creating demand for advisory, assessment, implementation and managed security services. The Companys AIM 360 capabilities, cybersecurity consulting practice and compliance-oriented solutions position it to address these requirements across India and global markets.

7 Excellent Service Maturity

The Companys mature service-governance model remains a key differentiator in delivering high-quality technology services at scale. Its delivery framework is supported by established best practices, maturity models, Centres of Excellence and a skilled, diverse workforce. The Company supports more than 5 million assets globally across enterprise environments and delivers services in more than 15 languages, combining global scale with local responsiveness. Continuous customer feedback, operational learning and governance refinement help improve service delivery, customer experience and execution consistency. This service maturity strengthens customer stickiness, enhances the Companys reputation and supports repeat and long-term business opportunities.

8 Clear Roadmap for the Future

ADSL has evolved into a mature IT services company with capabilities across digital solutions, managed services, cybersecurity, smart infrastructure, AI-enabled automation and enterprise transformation. Supported by future-focused leadership, the Company has defined a clear roadmap for the next three to five years, aligned with its longer-term ambition to build a business ten times its current scale. This roadmap links the Companys growth priorities to AI-first services, Digital Desk, cybersecurity, smart infrastructure, global expansion, operational excellence and strategic partnerships. It enables disciplined allocation of goals, investments and resources, supporting a structured path toward sustainable growth and stronger competitive positioning.

Human Resource

Human Resources continues to play a central role in supporting the Companys global expansion, service-delivery scale and transformation agenda. The HR function enables efficient resource planning, rapid mobilisation for new initiatives, workforce engagement and capability development across geographies. Its focus is to strengthen the Companys core talent base, support delivery continuity and build future-ready skills across all business verticals.

The Company is proud to have again received Great Place to Work recognition this year, reflecting its employee-centric culture and sustained focus on customer service. This recognition reinforces the Companys standing alongside large global organisations in workplace practices. Talent acquisition remains one of the most important challenges in winning deals at cost-effective pricing. Although resource attrition has remained reasonably low, it continues to require attention. The HR department has been instrumental in deploying smart global and domestic talent-acquisition models, directly contributing to better control over operating costs.

The Company has expanded its talent-recruitment capabilities by strengthening local, global and third-party support across regions.

To enhance people capabilities and internal competencies for advanced technology areas, it has implemented training and development programmes, cross-functional collaboration, internal mobility, career-development pathways and a culture of continuous learning and innovation. The global HR team has also supported the appointment of new leadership roles and scaled recruiting capacity.

The Company is also investing in a state-of-the-art training and competency-based skill-management platform. This platform is expected to support structured skill upgrades, improve hiring efficiency and provide managers with better visibility into workforce capability, skill gaps and development priorities across the organisation.

The Company undertakes multiple employee-engagement initiatives to foster a positive, inclusive and performance-oriented work environment. These include employee feedback mechanisms, wellness programmes, team-building activities, learning opportunities and career-growth initiatives. The Company also provides competitive compensation and benefits, including healthcare support, retirement-related benefits, paid time off, flexible work arrangements and career-advancement opportunities. To support employee well-being, it offers wellness programmes, counselling support, stress-management initiatives and employee assistance programmes. Diversity, equity and inclusion remain important elements of ADSLs people philosophy. The Company fosters a work culture where employees feel valued, respected and included, supported by fair and unbiased selection and promotion processes. As a global organisation, the Company prioritises local leadership and talent across its offices and seeks to build teams that reflect varied backgrounds, cultures and perspectives. Its US operations, with a diverse workforce across multiple communities, further reinforce the Companys global and inclusive character.

The Companys sustained people-related initiatives have helped maintain attrition below the industry average, supporting workforce stability, stronger team dynamics and smoother project execution. A stable and engaged workforce also contributes to improved productivity, higher employee morale, better customer delivery and stronger organisational competitiveness. From an India perspective, the total number of permanent employees as of March 31, 2026 was 2091. The Company conducted 104 induction training programmes and allocated 208 hours to training, reinforcing its focus on structured onboarding, capability development and workforce readiness.

Government Initiatives

The Government of India has been a key enabler of technology adoption, advancing initiatives across digital infrastructure, digital payments, cybersecurity, the start-up ecosystem and Make in India. These initiatives continue to create substantial opportunities, and the Company has aligned its efforts with the Governments vision of a digitally empowered and secure nation.

Digital Infrastructure

The Government has sustained its focus on building a digital India and implementing smart cities to improve public service delivery, complemented by dedicated national programmes to expand AI capability for public agencies, institutions and enterprises. Indias digital economy, as measured by the Ministry of Electronics and Information Technology, accounted for 11.74% of national income in 2022-23 and is projected to approach one-fifth of GDP by 2030, growing at nearly twice the pace of the overall economy. Leveraging its capabilities, the Company continues to participate in smart-city programmes as a Master Systems Integrator, with deep expertise across integrated command-and-control centres, surveillance infrastructure and 14 smart-city programmes, and has extended this expertise into international markets.

Digital Payments

The Government continues to drive digital payments and financial inclusion through the Unified Payments Interface (UPI), which processed a record 24,162 crore transactions worth 314 lakh crore in FY 2025-26, up from 18,587 crore transactions in the previous year, with about 55 crore users onboarded. The Company supports financial inclusion through its FinoAllied platform, which enables small and medium banks to digitise their services and extend them to under-served populations, with the potential to expand into adjacent sectors such as insurance .

Source: MeitY, Estimation and Measurement of Indias Digital Economy; Ministry of Finance and NPCI, July 2026; Press Information Bureau and DPIIT, February 2026.

Cybersecurity

Both the Government and the Company recognise the importance of cybersecurity in safeguarding data, and the Government continues to strengthen national capabilities through capacity-building programmes in cyber law and digital forensics. The Company is at the forefront of these efforts, developing programmes to enhance security for banks and corporations. Its AIM 360 framework provides comprehensive cybersecurity solutions to protect critical data assets, and the Company has deepened its expertise across advanced tools and platforms, including operational technology security, supporting several significant engagements.

Start-up Support

Start-ups remain central to the nations growth in the digital era, and the Government continues to support them with favourable policies, incentives and funding. India is now home to more than 200,000 DPIIT-recognised start-ups, and in February 2026 the Government revised its start-up recognition framework, doubling the turnover threshold and introducing a dedicated deep-technology category. The Company actively supports start-ups by assisting in the development and implementation of their ideas, and collaborates with selected non-profit organisations to advance technology-enabled initiatives.

Make in India

Following Operation Sindoor and continuing US tariff pressures, the Government has increased its focus on Make in India across electronics, software, devices and IT to strengthen self-reliance and security. This creates opportunities in safe cities, cybersecurity and data-driven government solutions. The Company supports the Governments Make in India initiative by empowering domestic enterprises with digital competencies, and its Digital Desk service-management platform has delivered measurable value across a range of Indian companies through integrated services.

The ESG Initiative Highlights

Environmental, Social and Governance (ESG) refers to the Companys approach to managing its environmental impact, social responsibilities and ethical governance practices. The Companys ESG initiatives include measuring and reporting activities that support environmental stewardship, social contribution and responsible corporate governance.

ADSL has adopted equitable governance and plays an active role in public-facing technology initiatives such as smart cities. Our Company has been documenting these activities but intends to formalize and report them in accordance with the global ESG metrics framework. ESG facilitates overall top-line growth, attracts talent, reduces costs, and fosters consumer confidence. As sustainability is incorporated into their governance and fundamental values, organizations with excellent ESG practices receive a higher reputation score and face less risk. Due to recent and ongoing global challenges, such as geopolitical stability (such as the US-Iran war, US tariff enforcements, global disputes), climate change, unethical business practices, food scarcity, soil pollution, and starvation, the current fiscal year has been challenging. All of this contributes to greater economic disparity, sustainability issues, and long-term effects on the planet. Therefore, ESG must be adopted to contribute to the current and future well-being of the planet, the surrounding community, and to ensure the organisation is run fairly.

It enhances investors confidence in our Companys long-term sustainability planning and identifies any unforeseen risks. ESG reports include both qualitative and quantitative data pertinent to their three primary topics.

Environmental

Combating Climate Change

ADSL has partnered with the SankalpTaru Foundation under CSR iniative to undertake a tree plantation drive across all its office locations in Mumbai, Pune, and Kolkata, reinforcing its commitment to environmental sustainability and a greener future.

Reducing Carbon Emissions

ADSL remains committed to environmental sustainability by adopting various energy-saving measures across its facilities. These initiatives include optimising natural light and ventilation, utilising energy-efficient lighting and equipment, and promoting responsible resource usage among employees. The Company continuously tracks and evaluates electricity consumption to identify opportunities for improvement and enhance energy efficiency. Furthermore, ADSL actively manages supply chain risks related to electronic products procured from OEMs while supporting sustainable mobility through carpooling programmes and remote working practices.

Preserving Biodiversity, Improving Air and Water Quality, Combating Deforestation, or Responsibly Managing its Waste

As part of its commitment to sustainability, ADSL collaborates with NGO partners to implement effective e-waste management practices, fostering responsible recycling and disposal of electronic assets. The Company is also advancing cloud migration projects that enhance technology efficiency while reducing energy consumption and operational costs.

By enabling clients to modernise their IT environments, ADSL contributes to improved resource utilisation, lower carbon footprints, and long-term environmental sustainability.

Responsibly Using Resources and its Supply Chain

As part of its environmental stewardship efforts, ADSL encourages sustainable consumption practices by providing filtered drinking water facilities and reducing reliance on single-use plastic bottles across its locations. In parallel, the Company actively monitors and manages supply chain risks related to electronic equipment sourced from OEMs, reinforcing its commitment to responsible procurement and long-term sustainability.

Social

Nurturing People and Workplace

ADSL places significant emphasis on employee wellbeing, development, and engagement.

The Company has implemented comprehensive HR policies and ensures their accessibility through digital platforms. Regular employee communications help keep the workforce informed and connected. ADSL also invests in various training, health and safety, wellness, engagement, and recognition initiatives aimed at enhancing employee experience and fostering a positive workplace culture. The Company strongly believes that nurturing and developing talent is an ongoing responsibility of every manager, creating an environment that supports continuous growth and long-term success.

Gender, Disability Parity Initiatives

ADSL is dedicated to building a diverse, inclusive, and equitable workforce. The Company maintains a gender-neutral approach across its employment practices and is committed to providing equal opportunities for all. ADSL also supports the inclusion of persons with disabilities by fostering an accessible and accommodating workplace, ensuring that every employee is treated with dignity, respect, and fairness.

Employee Engagement

ADSL champions diversity and equal opportunity across its workforce, creating an environment where employees can thrive and contribute meaningfully. The Companys Core Value Pyramid places Ethics and Integrity at the highest level, reinforcing its commitment to responsible business conduct and the philosophy of walking the talk. To strengthen employee engagement and transparency, ADSL regularly publishes newsletters and communication updates, ensuring employees remain informed about key business developments, initiatives, and achievements.

Data Protection and Privacy

ADSL places cybersecurity and data protection at the forefront of its business and operational strategy. The Company not only delivers comprehensive cybersecurity solutions to its clients but also implements rigorous security practices across its own operations. Continued compliance with internationally recognised standards, such as ISO 27001, ISO 20000, and SOC 2, underscores its commitment to safeguarding information assets and maintaining operational resilience. Through its dedicated Centre of Excellence, ADSL actively promotes cybersecurity innovation and excellence while undertaking regular awareness programmes on cyber hygiene, data privacy, and information security to strengthen organisational preparedness and resilience.

Social

Community Involvement

- ADSL is committed to creating meaningful social impact through initiatives focused on health, well-being, education, and community development. The Company supports programmes aimed at alleviating hunger, poverty, and malnutrition, while promoting the welfare of underserved and vulnerable communities. Demonstrating its commitment to public health, ADSL employees actively participated in a three-day blood donation drive at the Andheri SEEPZ-SEZ office in Mumbai.

- ADSL encourages employee participation in community health initiatives. Employees across the organisation, including the Marketing division, actively contributed to blood donation camps, supporting efforts to strengthen healthcare resources and promote community well-being.

- As a leading Master System Integrator (MSI) for Smart City initiatives, ADSL plays a pivotal role in leveraging technology to enhance urban living and drive sustainable societal development. The Company delivers citizen-centric solutions that strengthen public safety, improve water and waste management, optimise transportation systems, and enhance urban security. Through innovative technology-driven initiatives, ADSL is committed to improving the quality of life for communities and building smarter, safer, and more connected cities.

Human Rights and Labour Standards

ADSL is committed to full compliance with all applicable statutory regulations and labour laws, ensuring responsible and ethical business operations.

Governance

Internal Controls

ADSL maintains a robust framework of internal controls and employee engagement mechanisms designed to foster transparency, ethical conduct, and open communication across the organisation, including:

- A comprehensive Whistleblower Policy that encourages the reporting of concerns in a confidential and transparent manner.

- Accessible employee grievance redressal and support services available through both online and offline channels.

- An Open-Door Policy that promotes open communication, collaboration, and trust across all levels of the organization.

- Structured onboarding programmes to effectively communicate Company policies, the Code of Conduct, and ADSLs Core Value Pyramid.

Policies, Principles, and Procedures Governing Leadership, Board Composition, Executive Compensation, Audit Committee Structure and Shareholder Rights

Regular leadership town halls and continuous employee communications to strengthen transparency, engagement, and organisational alignment.

Our Company this year plans to actively formalise these initiatives in a global measurable report

ADSL Active Role in Global ESG Initiatives

The Company continues to strengthen its sustainability capabilities by engaging with sustainability leaders, improving energy conservation, optimising water consumption and implementing more efficient waste-management practices. Its energy-conservation efforts have contributed to approximately 20% year-on-year savings, while tree-planting initiatives support broader environmental stewardship. These actions demonstrate the Companys commitment to measurable ESG progress, sustainability and resource efficiency.

Along with these endeavors, our Company has remained dedicated to leveraging technology tobenefit all financial inclusion, and promote sustainable and responsible use of resources.

Risks, Concerns and Threats

Volatile Global Outlook

Given its global footprint, diversified service portfolio and increasing participation in large transformation programmes, the Company is exposed to macroeconomic, geopolitical, regulatory, cybersecurity, delivery, talent and contract-management risks.

Interest-rate movements, currency fluctuations, trade and tariff pressures, geopolitical conflict and energy-price volatility can influence customer spending, delivery costs and supply-chain stability across markets. The Company addresses these risks through quarterly management reviews, internal audits, proactive risk monitoring, supply-chain de-risking and operating discipline across business units.

Technology

Technology-led change presents both opportunity and execution risk. Developments in Industry 4.0, agentic AI, connected infrastructure, cloud, cybersecurity and digital engineering require continuous investment in skills, platforms and delivery models. The Company mitigates this risk by maintaining structured technology-practice plans, investing in research and development across geographies, expanding AI and cybersecurity capabilities, and continuously training its teams to support emerging customer requirements.

AI is a defining growth opportunity for enterprises, but it also introduces governance, privacy, data-security, ethical-use and accountability risks. Organisations that scale AI without adequate controls may expose sensitive information, create operational vulnerabilities or weaken decision governance. Allied Digital is addressing this risk through AI training, internal policy development, responsible solution design and a formal

AI usage framework aligned with its AI-first strategy.

Cybersecurity remains one of the most critical risks for managed service providers and technology-services companies. As the Company executes larger and more complex contracts, it continues to strengthen data protection, operational resilience, contractual safeguards and cyber-insurance coverage. Its cybersecurity approach is supported by layered monitoring, employee awareness, controlled access, continuous patching, vulnerability scanning and contractual risk management.

- The Companys IT assets and network environment are monitored on a 24x7x365 basis using leading cybersecurity tools to detect and respond to external threats, malware, phishing attempts and intrusion risks.

- Weekly security updates, alerts and awareness checklists are issued to employees to reinforce cyber hygiene and risk awareness.

- The Company follows industry practices for authentication, access control and device binding to reduce unauthorized-access risk.

- Devices, systems and technology assets are regularly upgraded and patched to maintain compliance with current security requirements.

- The Digital Desk platform and Company websites are periodically scanned for vulnerabilities, and identified security patches are addressed on priority.

- Customer contracts are continuously reviewed for security obligations, risk allocation and insurance adequacy.

The Company also recognises that emerging technologies such as AI and blockchain must be deployed with appropriate governance, privacy and sustainability considerations. It is refining its AI governance policy and progressing toward compliance with Indias Digital Personal Data Protection Act, thereby strengthening its ability to address customer and regulatory expectations around responsible technology adoption.

Compliance Risk

As the Company operates across multiple countries, compliance with applicable legal, regulatory, labour, tax, data-protection and contractual requirements remains a critical priority. Non-compliance may result in legal exposure, financial penalties, operational disruption or reputational impact. The Company manages this risk through defined ownership across sales, business units and corporate functions, periodic monitoring of regulatory changes, engagement of third-party specialists in selected jurisdictions and continued maintenance of key certifications and standards such as ISO, CMMI and PinkVERIFY. The Company has also upgraded core enterprise platforms including SAP and Salesforce, and continues to prepare for enhanced data-privacy obligations under the Digital Personal Data Protection Act.

Delivery Risk

Delivery risk arises when service commitments, quality standards, response timelines or customer expectations are not met. In a highly competitive managed-services market, customers expect continuous improvement, automation-led efficiency and measurable value. The Company mitigates this risk through shift-left automation, analytical dashboards, disciplined pricing, delivery governance, routine-task automation and active monitoring of service performance. Payment delays remain a global operational concern, and the finance team continues to manage receivables through structured follow-up while maintaining cash-flow discipline.

Contract Management

Contract-management risk may arise from unclear scope, changing customer expectations, complex delivery dependencies or evolving commercial terms. The Company mitigates this risk by standardising contract structures where appropriate, strengthening contract administration, improving understanding of customer environments and continuously refining new and existing contracts in line with business conditions, service obligations and risk-allocation requirements.

Employee Related Risk

As a service-centric and talent-driven organisation, the Companys ability to attract, develop and retain specialised talent is essential to its competitiveness. Attrition, skill scarcity and changing workforce expectations can affect delivery continuity and cost efficiency. The Company mitigates these risks through cross-training, global and domestic recruitment models, collaboration with internal and external recruiters, leadership strengthening, skill-development programmes and close delivery oversight to ensure customer commitments remain unaffected.

Internal Control Systems

Internal controls enable timely identification, assessment and correction of operational irregularities and support accurate reporting, asset protection and sound governance. The Company has strengthened controls across Finance, Sales, Legal, Human Resources and delivery operations, supported by formal internal audit processes and internal checks and balances.

Greater emphasis has been placed on customer credit assessment, profitability review, disciplined contract closure, delivery alerts, automation and system health monitoring. The Company s certified and regularly updated quality-management system further supports delivery consistency, customer confidence and long-term operational resilience.

Disclosure of Accounting Treatment

The Financial Statements of our Company have been prepared in accordance with the procedure and process provided for in the applicable Accounting Standards. There was no alternative treatment adopted in the preparation of the Financial Statements during the year under review.

Business Outlook

Strategic Value Creation:

The Companys value-creation agenda is anchored in five strategic priorities:

AI-led service transformation, cybersecurity and compliance-led growth, smart infrastructure and digital engineering, global delivery expansion and operational discipline. These priorities are mutually reinforcing. AI and automation improve service quality and cost efficiency; cyber security and compliance strengthen customer trust; smart city and digital engineering capabilities expand addressable markets; international partnerships support geographic diversification; and mature delivery governance helps maintain execution discipline. Together, these initiatives position the Company to move beyond traditional IT services toward higher-value, platform-led and outcome-oriented solutions, supported by investments in Digital Desk, agentic AI architecture, AIM 360 cyber security capabilities, smart infrastructure solutions and global talent development.

The Company enters FY 2026-27 with a strengthened strategic foundation, a diversified portfolio of business verticals and a clear focus on innovation-led growth across India and international markets. Its operating model continues to be reinforced through disciplined risk monitoring, stronger delivery governance, refined pricing models, broader strategic partnerships and sustained investment in AI-led service transformation. Together, these priorities position the Company to pursue opportunities across managed services, cybersecurity, AI-oriented data centres, smart manufacturing, smart infrastructure, digital engineering and selected start-up incubation initiatives.

The Company believes that growing enterprise adoption of data science, automation and artificial intelligence will create significant opportunities over the medium term. Its existing order book remains under active execution, and the opportunity pipeline continues to be encouraging across managed services, smart and safe city solutions, cybersecurity, cloud, integrated solutions and AI-enabled automation. Several smart city contracts are currently underway, with multiple projects completed or approaching completion. The Company is also strengthening its cybersecurity, cloud and integrated-solutions capabilities in the US, creating a broader platform to serve existing customers, deepen partner relationships and pursue new enterprise opportunities.

The Company expects macroeconomic conditions to stabilise gradually from the second quarter of FY 2026-27, which should support improved demand visibility. Future growth is expected to be supported by rapid AI adoption, the

Companys emerging AI platform architecture, cybersecurity and compliance requirements, large outsourcing renewals, geographic expansion, new sales models and strengthened leadership initiatives. The Company will continue to develop agile talent-acquisition models, enhance delivery capability, pursue strategic partnerships in Japan, the Middle East and Mauritius, and leverage its ESG initiatives to strengthen brand credibility and stakeholder trust. With these priorities, the Company remains positioned to advance its long-term growth agenda while maintaining focus on operational discipline, customer value and sustainable expansion.

Cautionary Statement

The statement in the Management Discussion and Analysis Report cannot be construed as holding out any forecasts, projections, expectations, invitations, offers, etc. within the meaning of applicable securities, laws and regulations. This report basically seeks to furnish information, as laid down within the different headings to meet the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.