Delaplex Ltd Management Discussions

1. INDUSTRY AND MARKET OVERVIEW

The global technology services industry continued to evolve rapidly during FY 2025-26, shaped by the convergence of Artificial Intelligence (AI), cloud computing, data engineering, automation, cybersecurity and digital transformation. Enterprises across industries increasingly viewed technology not merely as an enabler of operations, but as a strategic lever for productivity, resilience, customer experience and business growth.

The technology spending environment remained selective, with enterprises placing greater emphasis on measurable business outcomes, productivity improvement, cost optimisation and faster return on technology investments. At the same time, the adoption of AI progressed from experimentation towards broader deployment, increasing demand for solutions that combine strong data foundations, cloud capabilities, application modernisation and intelligent automation.

The continued adoption of cloud-native architectures, enterprise applications, data analytics and intelligent automation is also creating opportunities for specialised technology companies that can combine domain knowledge with technology expertise. The increasing deployment of connected systems and distributed computing is further expanding the opportunity landscape for edge computing and digital infrastructure.

Within India, the continued development of digital infrastructure, technology-led public initiatives and enterprise digitisation is supporting a favourable environment for technology service providers. Across global markets, customers are increasingly seeking partners capable of delivering integrated, outcome-oriented solutions rather than fragmented technology services.

These structural trends are aligned with Delaplexs strategy of combining technology expertise, domain capabilities and a global delivery model to address evolving customer requirements.

2. DELAPLEX - BUSINESS OVERVIEW

Delaplex Limited is a technology-driven enterprise engaged in software development, technology consulting, supply chain consulting and technology innovation services. The Company enables enterprises to modernise technology environments, improve operational efficiency and accelerate digital transformation.

The Companys service portfolio spans custom software development, cloud and digital transformation, Artificial Intelligence and Machine Learning, data analytics, enterprise application development, automation, supply chain optimisation and technology consulting.

Delaplex operates across India, Europe and North America and serves customers across a range of industries, including healthcare, retail, logistics, finance, manufacturing and other technologyintensive sectors.

The Company follows a flexible global delivery model that combines onsite and offshore capabilities across its delivery centres. This model enables Delaplex to leverage global talent, optimise delivery costs, execute projects across time zones and provide customers with scalable delivery capabilities.

During FY 2025-26, Delaplex continued to strengthen its business platform through a combination of organic capability building, geographical expansion, acquisitions, strategic partnerships and investments in new technology-led business opportunities.

3. STRATEGIC AND BUSINESS DEVELOPMENTS

FY 2025-26 represented an important phase in Delaplexs evolution, with the Company continuing to expand beyond its established technology services business into higher value solutioning and digital infrastructure opportunities.

Expansion of Edge Computing and Micro Data Centre Capabilities

The Company continued to build its presence in digital infrastructure and edge computing through its strategic association with BSNL. The initiative provides Delaplex with an opportunity to participate in the development and deployment of Edge Micro Data Centre solutions and address the growing need for distributed computing infrastructure.

The initiative progressed during the year, including the development of micro data centre operations in Hyderabad and advancement of engagements with PSUs and enterprise customers. The Company intends to leverage these capabilities to create integrated infrastructure, data and technology solutions for enterprise and government customers.

Blueberry Systems - International Expansion and Integration

The integration of Blueberry Systems Limited, United Kingdom, into Delaplex Software Limited strengthened the Companys presence in the UK and European markets.

The acquisition has expanded the Groups geographic footprint while providing access to additional technology capabilities, including AI-enabled low-code platforms. The integration is also expected to support greater cross-selling, operational collaboration, capability sharing and customer acquisition across international markets.

Blueberry therefore represents both a geographical expansion opportunity and a strategic capability enhancement for the Group.

Celestia Crew Consultancy

Celestia Crew Consultancy strengthens Delaplexs capabilities in Workforce Management (WFM), Human Resource Management Systems (HRMS) and enterprise consulting.

The business complements the Companys existing technology and supply chain capabilities and creates opportunities to provide more integrated solutions to customers. During the year, the business continued to contribute to the Groups performance and made progress in developing direct customer relationships.

Consulting and New Business Capabilities

The Companys Hyderabad-based strategic consulting division continued to support the expansion of its consulting and technology solutioning capabilities. The focus remains on combining domain expertise with technology capabilities to address complex enterprise requirements and create higher- value customer engagements.

4. INDUSTRIAL STRUCTURE AND BUSINESS LANDSCAPE

The technology services industry remains highly competitive and continues to undergo significant structural change. Enterprises are simultaneously seeking to modernise legacy environments and develop new digital capabilities, resulting in sustained demand for software development, cloud transformation, data platforms, cybersecurity, automation and AI-led solutions.

The industry comprises a broad spectrum of participants, including global technology services companies, specialist consulting firms, software product companies, platform providers, SaaS companies, data analytics businesses and niche technology solution providers.

For customers, the choice of technology partner increasingly depends on a combination of domain expertise, technical capabilities, speed of execution, scalability, cost efficiency, security and measurable business outcomes.

This environment presents opportunities for Delaplex to differentiate itself through its combination of technology capabilities, supply chain expertise, global delivery model, emerging AI capabilities and customer-oriented solution development.

5. GLOBAL DELIVERY MODEL

Delaplexs global delivery model remains an important competitive advantage.

The Company combines onsite and offshore resources to provide flexibility in project execution, access to a broader talent pool and cost-efficient delivery. Projects can be distributed across locations depending on customer requirements, project complexity, skill availability and commercial considerations.

The ability to operate across geographies and time zones enables Delaplex to provide scalable support, improve delivery responsiveness and optimise resource utilisation.

The Company continues to focus on strengthening its talent pool, cross-skilling and upskilling employees, and enhancing delivery capabilities in emerging technologies.

6. OPPORTUNITIES AND GROWTH DRIVERS

Artificial Intelligence and Automation

AI is becoming increasingly embedded in enterprise technology environments. Customers are seeking to move from experimentation towards practical applications that improve productivity, automate processes, enhance analytics and support decision-making.

Delaplex is strengthening its capabilities in AI, Machine Learning, automation and data analytics and intends to increasingly integrate these capabilities into its technology and consulting engagements.

Cloud and Digital Transformation

The continued adoption of hybrid and multi-cloud architectures, application modernisation and cloud-native development remain an important structural growth opportunity.

Delaplexs cloud and digital transformation capabilities position the Company to support customers across application development, modernisation, infrastructure and technology transformation initiatives.

Data and Analytics

Enterprises are increasingly focused on building strong data foundations, improving data governance and converting data into actionable insights.

The Companys capabilities in data engineering, analytics and technology consulting provide a foundation for expanding its participation in data-led transformation engagements.

Edge Computing and Digital Infrastructure

The growing requirement for real-time processing, distributed applications and lower-latency infrastructure is expanding the opportunity for edge computing and micro data centre solutions.

Delaplexs initiatives in this area, including its association with BSNL, provide an opportunity to develop an additional business vertical while complementing the Companys existing data, AI and technology capabilities.

Supply Chain Technology

Supply chain digitisation remains a significant opportunity, particularly across retail, logistics, manufacturing and other industries where customers are focused on improving planning, visibility, workforce productivity and operational efficiency.

Delaplexs supply chain consulting capabilities and associated technology expertise enable the Company to address these requirements through integrated consulting and technology solutions.

Geographical Expansion

The Company continues to focus on expanding its presence in the United States, Europe, MENA and Asia-Pacific markets.

The international footprint created through Blueberry Systems provides an additional platform for customer access in Europe, while the Company continues to develop partnerships and sales capabilities across other targeted geographies.

7. STRENGTHS AND COMPETITIVE POSITIONING

Delaplex believes its key strengths include:

Integrated technology capabilities: A broad portfolio spanning software development, cloud, AI, data, automation and technology consulting.

Domain expertise: Established capabilities in supply chain, workforce management and enterprise technology solutions.

Global delivery model: Flexible onsite-offshore execution capabilities supporting cost-efficient and scalable delivery.

Technology-led positioning: Continued investments in emerging technologies, AI capabilities and solution accelerators.

Agile operating model: Ability to design and deliver customised solutions for customers across different industries and geographies.

Growing global footprint: Presence across India, North America and Europe providing opportunities for broader customer engagement.

8. FINANCIAL PERFORMANCE

The following table summarises the financial performance of Delaplex Limited for FY 2025-26 and FY 2024-25:

Consolidated Financial Performance

Particulars	FY26	FY25	YoY
Revenue from Operations	6,889.44	6,754.39	2.00%
Other Income	417.81	255.76	63.36%
Total Income	7,307.25	7,010.15	4.24%
EBITDA / PBITDA	1,711.88	1,596.34	7.24%
Profit Before Tax	1,634.77	1,557.03	4.99%
Profit After Tax & Minority Interest	1,283.90	1,220.33	5.21%
Basic EPS ( Rs.)	14.17	13.33	6.30%

Standalone Financial Performance

Particulars	FY26	FY25	YoY
Revenue from Operations	5,677.03	5,576.01	1.81%
Other Income	561.13	330.69	69.69%
Total Income	6,238.16	5,906.70	5.61%
EBITDA / PBITDA	1,338.47	1,418.40	(5.64%)
Profit Before Tax	1,263.96	1,383.68	(8.65%)
Profit After Tax	944.55	1,033.64	(8.62%)
Basic EPS ( Rs.)	10.37	11.35	(8.63%)

The consolidated business remained resilient during the year, with Total Income increasing by 4.24% to Rs.7,307.25 Lakhs. Consolidated EBITDA increased by 7.24% to Rs.1,711.88 Lakhs, while Profit After Tax and Minority Interest increased by 5.21% to Rs.1,283.90 Lakhs.

Standalone revenue from operations grew by 1.81%. However, standalone EBITDA and profit after tax moderated during the year, reflecting higher depreciation and amortisation, increased finance costs and higher operating expenses associated with business expansion and capability investments.

At the consolidated level, the stronger performance of the Groups businesses and the benefits of strategic expansion supported the improvement in profitability.

9. REVENUE ANALYSIS

Revenue from operations increased during FY 2025-26 on both standalone and consolidated bases.

Standalone revenue from operations increased from Rs.5,576.01 Lakhs in FY25 to Rs.5,677.03 Lakhs in FY26, representing growth of 1.81%.

Consolidated revenue from operations increased from Rs.6,754.39 Lakhs to Rs.6,889.44 Lakhs, representing growth of 2.00%.

The Companys revenues continue to be predominantly international in nature. Growth during the year was supported by continued customer engagement, expansion of capabilities and demand for software development, digital transformation and technology consulting services.

The Groups broader revenue base also reflects the contribution and integration of its subsidiaries and new business initiatives.

10. COST AND EXPENDITURE ANALYSIS

Employee benefit expenses remained the largest component of the Companys operating cost base, consistent with the people-intensive nature of technology services.

Consolidated employee benefit expenses declined from Rs.4,191.26 Lakhs in FY25 to Rs.4,030.38 Lakhs in FY26. On a standalone basis, employee benefit expenses declined from Rs.3,678.67 Lakhs to Rs.3,385.47 Lakhs.

The reduction reflects continued focus on resource utilisation, workforce productivity, cross-skilling and cost discipline.

Depreciation and amortisation increased materially during the year. Standalone depreciation and amortisation increased from Rs.32.27 Lakhs to Rs.60.02 Lakhs, while consolidated depreciation and amortisation increased from Rs.35.67 Lakhs to Rs.62.53 Lakhs. The increase reflects investments in technology infrastructure, software assets and office facilities.

Other expenses increased on a standalone basis as the Company continued to invest in business development, technology, professional services and expansion-related activities. On a consolidated basis, the increase remained comparatively moderate.

The Company remains focused on balancing growth investments with disciplined cost management and maintaining operating efficiency.

11. OTHER INCOME AND FINANCE COST

Other income increased significantly during FY26.

Standalone other income increased from Rs.330.69 Lakhs in FY25 to Rs.561.13 Lakhs in FY26, while consolidated other income increased from Rs.255.76 Lakhs to Rs.417.81 Lakhs.

The increase was primarily supported by higher interest income on surplus funds, treasury income and other non-operating receipts. The Company continues to follow a prudent treasury management approach with a focus on capital preservation, liquidity and efficient deployment of surplus funds.

Finance costs increased during the year from Rs.2.45 Lakhs to Rs.14.49 Lakhs on a standalone basis and from Rs.3.64 Lakhs to Rs.14.58 Lakhs on a consolidated basis. Despite the increase, finance costs remain a relatively small component of the overall cost structure.

12. PROFITABILITY

The consolidated EBITDA increased from Rs.1,596.34 Lakhs in FY25 to Rs.1,711.88 Lakhs in FY26, reflecting an improvement in operating profitability despite moderate revenue growth.

Consolidated Profit Before Tax increased from Rs.1,557.03 Lakhs to Rs.1,634.77 Lakhs.

Profit After Tax and Minority Interest increased from Rs.1,220.33 Lakhs to Rs.1,283.90 Lakhs, while Basic EPS increased from Rs.13.33 to Rs.14.17.

On a standalone basis, EBITDA moderated from Rs.1,418.40 Lakhs to Rs.1,338.47 Lakhs. Profit Before Tax declined from ^1,383.68 Lakhs to Rs.1,263.96 Lakhs, while Profit After Tax declined from Rs.1,033.64 Lakhs to Rs.944.55 Lakhs.

The standalone moderation was primarily influenced by higher depreciation and amortisation, finance costs and operating expenditure associated with the Companys continued investments and business expansion.

At the consolidated level, the performance of the Groups subsidiaries and strategic initiatives helped offset these pressures and supported continued growth in profitability.

13. BALANCE SHEET AND CAPITAL STRUCTURE

Delaplex continues to maintain a financially resilient balance sheet.

The authorised share capital of the Company remains Rs.10 crore, divided into 1 crore equity shares of Rs.10 each. The paid-up equity share capital as of March 31, 2026 remained unchanged at Rs.9.11 crore, comprising 91.10 lakh equity shares of Rs.10 each.

The Company continues to operate with a conservative capital structure, supported primarily by shareholders funds and internally generated resources. The absence of significant external debt provides financial flexibility and enables the Company to evaluate growth opportunities while maintaining balance-sheet discipline.

The Companys net worth has continued to be supported by retained earnings and profitability.

14. INTANGIBLE ASSETS AND TECHNOLOGY INVESTMENTS

Technology and intellectual capital remain central to Delaplexs business model.

The consolidated carrying value of intangible assets, including goodwill, stood at Rs.2,079.02 Lakhs as of March 31, 2026 compared with Rs.1,444.49 Lakhs as of March 31, 2025.

The increase was primarily attributable to changes in the carrying value of UK assets and continued development of the Delaplex application platform and Blueberry Systems platforms.

The Company continues to invest in technology infrastructure, software assets, digital platforms and related capabilities to support scalability, innovation and delivery excellence.

15. WORKING CAPITAL MANAGEMENT

Efficient working capital management remains an important operational priority.

Trade receivables primarily comprise amounts due from customers for software development, technology consulting and related services. The Company follows a disciplined approach to customer credit assessment, monitoring of outstanding receivables and timely collections.

Management continues to monitor receivables, payables, cash balances and other current assets with the objective of maintaining liquidity while supporting business growth.

The Companys working capital practices are designed to maintain an appropriate balance between customer relationships, operational requirements and cash-flow discipline.

16. LIQUIDITY AND TREASURY MANAGEMENT

The Company maintains adequate liquidity to meet operational requirements, support capital expenditure and pursue strategic business initiatives.

Cash and cash equivalents are managed through a prudent treasury framework focused on capital preservation, liquidity and financial flexibility. Surplus funds are deployed in accordance with approved policies while maintaining sufficient liquidity for operational and strategic requirements.

The Company believes its current financial position provides an appropriate foundation to support its growth initiatives.

17. OPPORTUNITIES AND THREATS

Opportunities

AI-led Transformation: Increasing enterprise adoption of AI provides opportunities to expand into AI-enabled applications, analytics, automation and intelligent business solutions.

Cloud and Application Modernisation: Continued migration towards cloud and modern technology architectures supports demand for application development, modernisation and managed technology services.

Edge Computing: Increasing demand for real-time and distributed computing creates opportunities for the Companys Edge Micro Data Centre initiatives.

Digital Supply Chain: The digitisation of logistics, retail and supply chain operations creates opportunities for technology-enabled consulting and transformation solutions.

Geographical Expansion: The Companys presence in the United States, Europe and India provides a platform to expand into additional markets and deepen relationships with multinational and enterprise customers.

Threats

Rapid Technology Evolution: The pace of technological change requires continuous investment in skills, platforms and innovation. Failure to adapt could affect competitiveness.

Intense Competition: The technology services market remains highly competitive, with global technology companies, specialised service providers and emerging technology platforms competing across overlapping segments.

Macroeconomic Conditions: Global economic slowdowns, geopolitical developments and changes in enterprise technology budgets can affect customer decision-making, project commencement and discretionary spending.

Cybersecurity and Data Risks: Cybersecurity incidents, data breaches and technology vulnerabilities could result in operational, financial, legal and reputational consequences.

Talent Availability: Access to skilled technology professionals remains important for scaling the business and maintaining delivery quality.

Client Concentration: Dependence on a limited number of significant customers can create volatility if individual customers reduce spending, delay projects or change vendor strategies.

18. RISK MANAGEMENT

Delaplex operates in a rapidly evolving technology environment and is exposed to operational, financial, market, technology, cybersecurity, regulatory and people-related risks.

The Company follows an integrated risk management approach designed to identify, assess, monitor and mitigate material risks.

Key areas of risk include:

• Technology evolution and potential obsolescence

• Cybersecurity and data privacy

• Project execution and delivery

• Resource utilisation and talent retention

• Client concentration and changing customer requirements

• Foreign exchange and liquidity

• Cost pressures and macroeconomic uncertainty

• Intellectual property and contractual risks

• Regulatory and compliance requirements

• Scalability and innovation risks

The Company continues to strengthen project governance, resource planning, cybersecurity preparedness, internal controls, compliance monitoring and business continuity practices to manage these risks.

Management believes that the Companys diversified capabilities, global delivery model, investment in technology and focus on operational discipline provide a strong foundation to manage these risks. The Board continues to review the Companys risk landscape and mitigation framework periodically.

19. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Delaplex recognises that an effective internal financial control framework is essential to the reliability of financial reporting, safeguarding of assets, prevention and detection of fraud and errors, and compliance with applicable laws and regulations.

The Company has established internal financial controls covering financial reporting, authorisation mechanisms, segregation of duties, access controls, accounting processes and periodic review of financial information.

The internal control framework is supported by documented processes, defined authorities, system- based controls and regular monitoring.

The Companys internal audit mechanism, together with management review and statutory audit processes, provides oversight of the effectiveness of internal financial controls.

Based on the assessments undertaken during the year, the Company believes that its internal financial controls over financial reporting were adequate and operating effectively as of March 31, 2026.

20. HUMAN CAPITAL AND ORGANISATION

People remain central to Delaplexs ability to deliver technology-led solutions.

The Company continues to invest in technical capability development, cross-skilling and upskilling across emerging technologies, including Artificial Intelligence, Machine Learning, cloud and data technologies.

Delaplexs global delivery model is supported by a combination of experienced professionals and specialised technology teams across its operating locations.

The Company remains focused on developing a future-ready workforce, strengthening leadership capabilities and maintaining an environment that supports continuous learning, innovation and customer-centric execution.

21. OUTLOOK AND STRATEGY FOR GROWTH

The Company believes the medium- to long-term opportunity for technology-led transformation remains attractive.

Delaplexs growth strategy is centred on five key priorities:

1. Global Market Expansion

Deepening the Companys presence across the United States, Europe, MENA and Asia-Pacific markets through customer acquisition, partnerships and targeted business development.

2. AI and Technology-led Innovation

Accelerating the development and commercialisation of AI-enabled platforms, automation capabilities, data solutions and technology accelerators.

3. Integration and Synergy Creation

Maximising the potential of Blueberry Systems and the Companys consulting businesses through greater integration, capability sharing, cross-selling and operating synergies.

4. Scaling Edge and Digital Infrastructure

Building the Companys presence in Edge Computing and Micro Data Centre solutions through strategic partnerships and customer deployments.

5. Disciplined and Profitable Growth

Maintaining financial discipline, prudent capital allocation and operational efficiency while investing in technology, people and capabilities required for long-term growth.

The Company remains focused on strengthening the quality of its revenue base, expanding its solutioning capabilities, increasing customer value and building a scalable platform for sustainable growth.

22. CONCLUSION

FY 2025-26 was a year of steady financial progress accompanied by continued strategic investment in the future of the business.

While revenue growth remained moderate, the Company continued to strengthen its technology capabilities, expand its international footprint, integrate acquisitions and develop new opportunities across AI, digital transformation, consulting and edge infrastructure.

The consolidated performance remained resilient, with improvement in EBITDA, Profit Before Tax, Profit After Tax and Earnings Per Share.

Going forward, Delaplex will remain focused on converting its technology capabilities and strategic initiatives into sustainable business growth, while maintaining financial discipline, operational excellence and a strong focus on customer outcomes.

The Company remains committed to creating long-term value for its customers, employees, shareholders and other stakeholders.