C2C Advanced Systems Ltd Management Discussions

C2C Advanced Systems Limited

For the Financial Year Ended March 31, 2025

1. Industry Dynamics and Indias Defense Outlook

The global defense sector is undergoing a fundamental transition. Traditional force-on-force conflicts are being replaced by asymmetric engagements where outcomes are determined by intelligence superiority, real-time decision-making, cyber dominance, and logistics resilience. Technology integration across platforms, sensors, data, and communications is now the decisive factor in national security.

India stands at the epicenter of this shift . With defense allocations crossing 6 lakh crore (US$79 billion) in FY25, India is now the third-largest defense spender globally . Beyond budget growth, the policy environment has decisively turned toward self-reliance. Nearly 70% of defense capital procurement is reserved for domestic players under the Atmanirbhar Bharat program.

Simultaneously, India is building a strong export posture . Defense exports crossed 20,000 crore (US$2.5 billion) in FY25 and are projected to reach 50,000 crore (US$6 billion) by 2030. This dual thrust import substitution at home and export expansion abroad creates an unprecedented runway for Indian defense innovators.

Three structural shifts define the prognosis for Indias defense sector:

1. Indigenization and Technology Sovereignty o Import bans under Positive Indigenization Lists are opening critical capability gaps for domestic firms to address. o Indigenous companies are being incentivized to design, develop, and own IP across the defense value chain. o For C2C, this aligns directly with our software-first, indigenous platform model , giving us both relevance and long-term defensibility.

2. Ecosystem Modernization o Modern warfare is no longer limited to battlefield combat. Only 30% of warfighting is direct combat , while 70% is ecosystem-driven communications, mobility, logistics, supply chains, maintenance, and cyber-readiness. o Indias planned theatre commands and push for jointness across services demand interoperable command-and-control platforms. o Our MAGI-C4ISR and MAGI-C4IX architectures are designed precisely for this environment, orchestrating sensors, communications, and logistics into a single integrated ecosystem.

3. Dual-Use and Export Orientation o Many defense technologies cybersecurity, industrial control systems, AI-driven decision-making are now equally critical for civilian and industrial applications. o Indias emphasis on exports requires globally interoperable solutions that can integrate with allied systems. o C2Cs dual-use capabilities extend our relevance beyond defense, providing growth resilience while positioning us to contribute to Indias export targets.

Taken together, these shifts create a decade of sustained growth, global integration, and technology-first opportunities for companies like C2C.

2. Company Overview

C2C Advanced Systems is built as a software-first, platform-centric company . Unlike hardware-heavy peers, our strength lies in creating architectures that integrate legacy and next-generation systems , making us both future-ready and backward-compatible.

Our portfolio includes:

MAGI-C4ISR and MAGI-C4IX Platforms Advanced architectures for integrated command, control, communications, intelligence, surveillance, and reconnaissance. Dual-Use Technologies Extending defense innovations into industrial automation, critical infrastructure, and cyber systems. Specialized Technology Centres State-of-the-art facilities for command & control, automation, cybersecurity, and data sciences, enabling continuous innovation and rapid prototyping.

We operate through a business unit based model , where each team is a profit centre accountable for delivery, while also collaborating across projects. This structure fosters entrepreneurship, accountability, and leadership development , creating future-ready leaders within the organization.

3. FY25 Key Developments

Public Listing : Strengthened our financial foundation, broadened our shareholder base, and enhanced visibility in the market. Proof-of-Concept (POC) Demonstrations : Multiple POCs successfully delivered, with several progressing into firm contracts, reinforcing customer trust in our solutions. Dual-Use Expansion : Entry into industrial automation and control systems, diversifying our portfolio and reducing dependency on long defense cycles.

Bengaluru Development Centre : Operationalized a state-of-the-art Command and Control facility, commended by defense personnel for its advanced capabilities. Order Pipeline Growth : Maintained a healthy and growing order pipeline, supported by indigenization momentum and interest from global markets.

4. Value Creation Framework

Our value creation strategy is multi-dimensional , addressing both financial performance and strategic sustainability:

Financial Capital Focused on high-margin growth, disciplined capital allocation, and strengthening shareholder wealth. Intellectual Capital IP-driven growth through proprietary platforms, patents, and scalable architectures. Human Capital Equity-linked rewards, entrepreneurial culture, and continuous skill development to retain top talent. Social Capital Active collaboration with MSMEs, startups, and academia to strengthen Indias defense innovation ecosystem. Environmental Capital Commitment to energy-efficient operations and sustainable defense practices, ensuring long-term environmental responsibility.

5. Long-Term Strategic Themes

Indigenization with Global Integration Delivering platforms deeply aligned with Indias defense priorities, while ensuring global interoperability for exports. Ecosystem-Centric Solutions Addressing the majority of warfare that lies in logistics, networks, and readiness, not just combat. Investing in Future Technologies Building capabilities in AI, autonomous systems, quantum-secure communications, and space-based situational awareness. Dual-Use Expansion Scaling cybersecurity and industrial automation to diversify growth and strengthen resilience.

6. Risks and Mitigation

Procurement Delays Defense contracting cycles are long; mitigated by building a strong dual-use portfolio. Technology Obsolescence Rapid change in AI and cyber technologies; mitigated by modular design and sustained R&D. Geopolitical Risks Supply chain disruptions; mitigated by selective sourcing and in-house development of critical technologies.

Talent Retention High demand for skilled professionals; mitigated through ownership culture and leadership development.

7. Outlook

With Indias defense budget rising, procurement policies favouring indigenization, and global export pathways opening, the outlook for C2C Advanced Systems is exceptionally strong . Our differentiated strategy positions us to:

Convert POCs into long-term contracts.

Scale dual-use offerings into industrial and civilian markets.

Support Indias defense export ambitions by building globally interoperable solutions. Lead in the adoption of future technologies that will define the next generation of warfare.

8. Details of Significant Changes in Key Financials and Ratios

The following analysis presents key financial ratios and their year-over-year changes:

Ratio	FY24	FY25	Change	Explanation
Current Ratio	8.80	4.07	-4.73	Decrease due to increased current liabilities from business expansion and working capital requirements for larger projects
Return on Equity (%)	16.06	14.60	-1.46%	Slight decrease due to substantial equity base expansion while maintaining strong profitability
Net Profit Margin (%)	29.91	25.05	-4.85%	Controlled margin compression due to strategic investments in capability building and market expansion
EBITDA Margin (%)	44.64	35.98	-8.66%	Planned reduction reflecting business scaling, increased operational capacity, and strategic hiring

Key Financial Performance Indicators ( in Lakhs):

Particulars	FY24	FY25	Growth FY24-25
Revenue from Operations	4,106.0	11,511.0	180.3%
EBITDA	1,833.0	4,142.0	126.0%
PAT	1,228.0	2,884.0	134.9%
Total Assets	8,584.0	26,245.0	205.8%
Shareholders Funds	7,646.0	19,759.0	158.5%

9. Conclusion

FY25 was a year of strategic foundation-building . Our platforms are proven, our order pipeline is expanding, and our investments in technology and human capital are future-focused.

We remain committed to creating enduring shareholder value , advancing Indias defense self-reliance, and positioning C2C Advanced Systems as a global leader in software-first defense and industrial platforms .

Our capabilities in architecting complex Defense, security, Industrial platforms is current generation and we are confident of becoming a major player in this segment. Our system integration capabilities is of global standards and is reflected in the projects we are working on globally.

India Defense while vibrant thanks largely to Government initiatives to encourage private sector and innovations through various grants and partnerships, is still at a nascent stage. We anticipate these initiatives to deliver global class and scale opportunities in the future.

We are highlighting some of our successful platforms and system deliveries to provide our shareholders examples of our achievements in 2024-25. We expect each year to add several such offerings so that we emerge as a one stop Technology enterprise- Globally relevant and admired.

Our MAGI-C4ISR platform which integrates seekers, sensors, data and communication is a globally relevant platform and is fully indigenous. It is scalable, configurable, distributed and capable of every integrating every sensor- legacy or modern- Indian or globally sourced. We are continuously working to make it capable incredibly large volumes of data from Air, War, Land, autonomous, Space to deliver situational awareness to our Defense forces. Our aim is to deliver " intelligence at the edge of warfare ".