DC Infotech & Communication Ltd Management Discussions

Forward looking statement

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Company s objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise forward looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company s operations include changes in government regulations, tax laws, economic developments within the country and such other factors globally.

The financial statements are prepared under historical cost convention, on accrual basis of accounting, and in accordance with the provisions of the Companies Act, 2013 (the Act) and comply with the Indian Accounting Standards as pronounced by the Institute of Chartered Accountants of India (ICAI) from time to time. The Management of DC Infotech & Communication Limited has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements, reflect in a true and fair manner, the state of affairs and profit for the year.

The following discussions on our financial condition and result of operations should be read together with our audited financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all references herein to we , us , our , the Company , DC Info are to DC Infotech & Communication Limited .

ECONOMIC OVERVIEW

Global Economic Scenario:

Global growth is expected to remain stable but subdued, with forecasts at 3.3 percent for both 2025 and 2026 below the 2000 19 historical average of 3.7 percent and broadly unchanged from October. Beneath this steady surface, growth paths across economies remain uneven and fragile.

In the third quarter of 2024, global GDP growth missed expectations by 0.1 percentage point, with weaker outcomes in parts of Asia and Europe. China s growth slowed to 4.7 percent year-over-year, as sluggish consumption and property market challenges offset gains from net exports. India also saw a sharper-than-expected slowdown, led by weaker industrial activity. Growth in the euro area stayed muted, especially in Germany, amid persistent manufacturing weakness. Japans output contracted slightly due to temporary supply issues. In contrast, the U.S. economy showed strength, growing 2.7 percent year-over-year, driven by solid consumer demand. IMF staff projections assume existing policies continue, factoring in recent market trends and temporary trade policy uncertainty, while excluding potential policy changes still under debate.

I ndian Economic Scenario:

In India, economic growth in FY24/25 fell short of expectations due to weaker-than-anticipated private investment and public capital expenditures that missed government targets. While the FY24/25 budget emphasized fiscal consolidation, it also introduced tax cuts to bolster private consumption and regulatory reforms aimed at stimulating private investment. GDP growth is now projected to ease from 6.5 percent in FY24/25 to 6.3 percent in FY25/26. Although monetary easing and regulatory improvements are expected to support private investment, their impact will likely be tempered by global economic headwinds and lingering policy uncertainty. On the positive side, tax cuts are expected to strengthen private consumption, and more effective execution of public investment plans should enhance government spending. However, export growth will remain under pressure, constrained by evolving trade policies and a slowdown in global demand.

Source: World Banks South Asia Development Update: Taxing Times, April 2025

INDUSTRY OUTLOOK IN INDIA: / NETWORK EQUIPMENT MARKET OUTLOOK

The network equipment market in India generated a revenue of USD 3,386.6 million in 2023. It is projected to reach a revenue of USD 4,915.6 million by 2030. The market is expected to grow at a Compound Annual Growth Rate (CAGR) of 5.5% from 2024 to 2030. One source also states the CAGR is 5.5% from 2023 to 2030.

In terms of market components, hardware was the largest revenue-generating component in 2023, holding a revenue share of 55.19%. Hardware is also identified as the most lucrative component segment, registering the fastest growth during the forecast period.

India accounted for 2.3% of the global network equipment market revenue in 2023.The market segmentation covered includes components (Hardware, Software, Services), Connectivity (2G/3G, 4G LTE, 5G), Network Type (Public Network, Private Network), and End Users (Telecom Operators,

Enterprises, Public Safety, Healthcare, Retail and e-Commerce, Banking, Financial Services, & Insurance, Government & Defense, Manufacturing, Others). The databook provides a detailed overview of the market, including revenue numbers and major trends from 2018 to 2030. Historical data covers 2018-2022, with 2023 as the base year and 2024-2030 as the forecast period.

The Indian government is taking several initiatives to promote the growth of the IT hardware industry in the country. These initiatives include the Production-Linked Incentive (PLI) scheme, the National Manufacturing Policy, and the Startup India initiative. These initiatives are expected to provide a boost to the

growth of the Indian IT hardware industry by attracting investments, creating jobs, and boosting exports.

DATA CENTRE OUTLOOK IN INDIA:

Indias Data Centre (DC) sector is booming, driven by a large internet user base, the government s data localization push, and AI growth. Although India generates 20% of global data, it holds just 5.5% of global DC capacity, leading to a steep demand-supply gap. Current colo DC capacity stands at 1.35GW (up 38% YoY), yet India s DC density remains among the lowest globally.

To meet rising needs, capacity must reach 5GW by 2030, aligned with 3.3GW already planned by 2028. This will require a $20 billion capex for DCs and another $60 billion for cloud infrastructure, with hyperscalers leading much of the investment. India s lower costs, improving connectivity, and strategic location position it as a future regional data hub

RISE OF GCCS SHIFTING FOCUS FROM COST OPTIMIZATION TO INNOVATION

Beginning in the 1980s with the establishment of pioneering GCCs like Texas Instruments, the initial model centered around utilizing Indias cost-effective workforce for basic IT and back-office operations. However, over the subsequent decades, the landscape has dramatically shifted. GCCs in India have shifted their focus from cost arbitrage to innovation and talent leverage.

Today, India has more than 1,700 GCCs. MNCs are increasingly recognizing India as a crucial hub for not only cost optimization but also bridging the global talent gap and driving innovation. This shift is driven by Indias vast pool of skilled professionals and thriving technology ecosystem, which supports the swift establishment of GCCs. Consequently, GCCs are expanding their functions beyond traditional IT services to encompass advanced areas such as R&D, engineering design, data analytics, and AI.

GCC revenue in India has increased from USD12bn in FY10 to USD64.6bn in FY24 at 12.8% CAGR. The momentum is expected to continue with revenue projected to hit USD110bn by FY30E (9.3% CAGR during FY24-30) due to the expansion of existing GCCs and new GCC establishments.

SURGE IN ER&D GCC REVENUE

India has witnessed strong revenue growth in ER&D GCCs due to changing landscape in the recent years driven by the transformation in PDLCs and support operations of MNCs. These centers are no longer confined to providing basic IT support; they are increasingly focused on complex engineering tasks, research and innovation. This shift is driven by Indias vast pool of highly skilled engineers, cost-competitive environment, and rapidly maturing technology ecosystem. The drivers for increase in spending in Indian ER&D GCCs by MNCs is driven by the following:

Cost optimization: By leveraging Indias cost-effective engineering talent, companies can reduce R&D expenses, freeing up resources for other critical areas.

Enhanced collaboration: GCCs facilitate close collaboration between global R&D teams, enabling seamless knowledge transfer and faster problem-solving.

Accelerated product development: GCCs provide access to a large talent pool, enabling companies to scale their R&D efforts rapidly. This accelerates the development process by allowing for faster development cycles.

Digital transformation: Increasing adoption of digital technologies, such as AI, machine learning, and cloud computing, is driving demand for ER&D services. Indias GCCs are well-positioned to leverage these technologies and provide cutting-edge solutions.

Specialized expertise: India has developed specialized expertise in various engineering domains, including software, hardware, automotive, aerospace, and telecommunications. ER&D GCCs can tap into this expertise, enabling companies to develop cutting-edge products and solutions faster.

ABOUT DC INFOTECH & COMMUNICATION LIMITED

Established in 1998 by Mr. Devendra Sayani & Mr. Chetankumar Timbadia, who between them, have a combined experience of four decades in the field. DC Infotech has been specializing and providing innovative networking, unified communication and data security products and solutions by utilizing the latest technology. Over the years, we have been able to establish ourselves as the leading company and solutions, sales and support of networking UC and security products and services. Our core competency are in understanding existing network and future needs. We excel at first understanding the need and then design and deploy an effective functional network. Also adding to that, we have an exhaustive range of POC appliances and solution for different industry vertical and have done security implementations with major installations pan India.

The idea was and still is to provide innovative networking, security products and solutions by utilizing the latest technology know-how. Today, DC Infotech has established itself as one of the leading architects and solution providers of networking, security and unified communication products and services. The main objective is to be

one step ahead , i.e., to understand the future market needs and trends before they become obvious and to accommodate demands before they occur.

www.dcinfotech.com

FINANCIAL OVERVIEW

The consolidated financial performance of the Company for the financial year ended March 31 st , 2025, is as follows: Total revenue from operations stood at Rs. 555.75 crore for the year ended March 31, 2025, as against Rs. 459.63 crore for the corresponding previous period, an increase of 20.91%, mainly on account of due to strong demand for products like Samsung, Zscaler, Netgear, D-Link, Arbor and Software & Services.

EBITDA for the full year is Rs. 26.23 cr, an increase of 30% year-on-year.

Our Net Profits during this full year is Rs. 14.49 cr, as against profit of Rs. 11.61 cr in FY24.

Net Profit margin stood at 2.61%.

EPS for this period is Rs. 9.51