Diensten Tech Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENT:

Global Economic Review

The global economy in FY 2024-25 faces a complex and uncertain landscape. GDP growth is now forecasted at 2.8%, revised downward from earlier estimates due to escalating trade tensions and rising tariffs, particularly by the U.S. This growth rate remains well below the historical average of ~3.7% (2000-2019).

• Advanced economies are expected to grow modestly at 1.4%, while emerging and developing markets may register 3.7% growth.

• Global headline inflation is projected to ease to 4.2% in 2025 from 5.9% in 2024, although core inflation remains sticky in advanced economies.

Rising trade distortions are visible in the surge of global trade restrictions·from 1,100 in 2019 to over 3,000 annually in the past two years. As a result, world trade growth is expected to decelerate to 1.7% in 2025, compared to 3.3% in 2024.

Despite these headwinds, enterprises are accelerating investment in AI integration, cloud migration, and cybersecurity, driven by the dual imperatives of modernization and risk mitigation.

Indian Economic Review

India is firmly positioned on a high-growth path, with projections indicating that it will become the worlds third-largest economy, achieving a USD 5 trillion GDP milestone within the next three years.

This remarkable progress is driven by:

• Robust domestic demand and resilient private consumption

• Key structural reforms, including the successful implementation of GST

• Strategic infrastructure investments and policy-driven improvements in the ease of doing business

• Stable macroeconomic environment facilitated by effective inflation control measures by the RBI With an emphasis on human capital development, digital innovation, and institutional efficiency, India is set to achieve a USD 7 trillion GDP by 2030. This journey is not only about economic expansion but also about enhancing the quality of life and creating inclusive growth opportunities for its citizens.

Indias stable policy framework, strong demographic dividend, and expanding digital ecosystem continue to make it a favourable destination for global investments and a beacon of sustained economic potential.

Indian Staffing Industry Overview

Indias flexi staffing industry continues to demonstrate strength and adaptability. In FY 2024-25, the sector added approximately 1.39 lakh new formal jobs, reflecting a 9.7% YoY growth. Although this marks a slowdown from 15.3% in FY 2023-24, it highlights the industrys resilience amid a dynamic economic backdrop.

Key Sectoral Contributors: FMCG, e-commerce, healthcare, retail, logistics, banking, and manufacturing·all of which rely heavily on staffing flexibility to manage operational agility.

• General staffing remains the dominant engine of growth, with consistent demand seen even in tier-2 and tier-3 cities.

• The IT flexi staffing segment, having contracted by 4.4% YoY in FY 2023-24, is showing promising signs of recovery. The segment, valued at USD 4.9 billion, is forecasted to grow at a 7% CAGR through FY 2026, led by contract-based hiring and stabilizing global IT services demand.

Impact Beyond Numbers:

• Over 1.8 million formal jobs created by ISF member firms.

• Plays a key role in formalizing the informal workforce, enhancing access to social security, wage protection, and career development.

• Champions gender diversity, providing flexible work opportunities to a growing number of women in the workforce.

• Focused on upskilling and reskilling, enabling workforce transitions into permanent client roles.

In summary, the industry stands out as a resilient, inclusive, and transformative force in Indias employment landscape.

Indian Flexi Staffing Industry Snapshot (FY 2024-25)

1. Job Creation Slows but Remains Strong

• FY 2023-24: 15.3% YoY growth

• FY 2024-25: 9.7% YoY growth

Despite moderation, the industry added ~1.39 lakh formal jobs this year.

2. IT Flexi Staffing Bounces Back

• After a -4.4% contraction in FY 2023-24, the segment is projected to grow at a 7% CAGR through FY 2026.

Project-based hiring & global IT stability are key drivers of this recovery.

Discussion on Financial Performance with Respect to Operational Performance

During the financial year 2024-25, the Company achieved substantial revenue growth with total turnover reaching Rs64.88 Crores, compared to Rs40.97 Crores in FY 2023-24.

Correspondingly, the Net Loss reduced from Rs2.78 Crores in the previous year to Rs2.12 Crores in the current year. This performance underscores the Companys strategic execution, improved service delivery, and optimized operational expenditure.

The rising top line coupled with narrowing losses indicates a positive trajectory, laying a strong foundation for future profitability and enhanced shareholder value.

Financial Performance

• FY 2024-25:

Turnover: Rs64.88 Cr Net Loss: Rs2.12 Cr

• FY 2023-24:

Turnover: Rs40.97 Cr Net Loss: Rs2.78 Cr

Despite a higher turnover, the company significantly reduced its net loss, reflecting improved operational efficiency and cost controls.

OPPORTUNITIES AND THREATS

Opportunities	Threats
• Growth in Economy and Flexible Work Models- Rising demand for temporary, contract, and freelance staffing presents a major growth area.	• Economic Uncertainty and Recession Risks- Economic downturns typically lead to hiring freezes and reduced staffing demand.
• Digital Transformation & Automation - Adoption of Al-based recruitment tools and applicant tracking systems (ATS) can enhance efficiency and scalability.	• Regulatory and Compliance Challenges- Labor laws, contractor classification issues, and GDPR/ data privacy regulations can increase risk and cost.
• Expansion into Emerging Markets - Developing economies with growing labor forces offer untapped staffing opportunities.	• Increasing Competition and Price Pressure- Low barriers to entry and numerous players drive down margins and increase client churn.
• Upskilling and Reskilling Services- Providing training and career development services adds value and opens new revenue streams.	• Technological Disruption- Automation and AI-driven hiring tools may disintermediate traditional staffing models
• Government and Corporate DEI Initiatives- Diversity, equity, and inclusion policies increase demand for diverse talent sourcing services.	• Cybersecurity Risks- Data breaches involving candidate or client information can result in reputational and financial harm.

Diensten Tech Ltd (DTL) is a leading IT service organisation that delivers high-quality solutions to businesses. DTL equips its clients to prosper in the digital era, emphasizing managed services, professional staffing services, digital content solutions, and corporate training.

We categorize our services in these major business segments:

1) Contract and Contract-to-hire Services

2) Professional staffing

3) It and Infrastructure Services

4) Learning Solutions

5) Managed Services

6) Statement of work services

IT Professional Solution Services

The IT Professional Solution Services segment remains the flagship and primary revenue generator for Diensten Tech Ltd., accounting for approximately 99% of the total revenue for the financial year ended March 31, 2025.

Under this segment, the Company delivers a wide range of services including:

• IT Staff Augmentation

• IT Consultancy

• Software AMC

These services span across multiple industries including:

• Information Technology & Telecom

• Banking and Financial Services

• Automotive & Engineering

• Healthcare, Retail, and Entertainment

The post-pandemic environment has reshaped workforce models across the globe. Organizations- large or small-are increasingly opting for agile, contract-based staffing solutions to manage regulatory unpredictability and business volatility. DTL enables such businesses with tailored workforce solutions that:

• Support operational scalability without long-term headcount commitments

• Provide skilled professionals during peak workloads

• Ensure business continuity with minimal disruptions

To further ensure quality and transparency, Internal Audit Reports are routinely shared with Senior Management to initiate timely and appropriate corrective measures.

DTLs ability to deploy domain-specific, contract-based IT talent makes it a trusted partner in a rapidly changing business landscape.

Risk and Concern

The Company operates in an environment shaped by both internal and external uncertainties. While robust governance and operational controls are in place, the following risks could materially influence our business performance and strategic outcomes:

1. Competitive Landscape

The rise of agile players and global staffing firms presents risks to our market share, pricing power, and customer retention.

2. Macroeconomic and Policy Factors

Shifts in Indias fiscal and regulatory environment, interest rates, and government policy frameworks may affect demand cycles and operational flexibility.

3. Sectoral Adaptability

The inability to effectively recalibrate to sector-specific changes, particularly in areas like Agrochemical and tech-based resourcing, can weaken client confidence and revenue sustainability.

4. Capital Market Volatility

Uncertainty in domestic and global capital markets can impact funding accessibility, business valuations, and overall investor sentiment, thereby influencing growth trajectories and strategic investments.

The Company maintains a proactive risk management approach, regularly reviewing both external threats and internal controls to ensure business continuity and financial resilience.

Risk Assessment Matrix

• Macroeconomic and Policy Changes rank highest in potential impact.

• Capital market volatility and competitive pressures also pose significant threats.

• Sectoral adaptability, especially with fast-evolving industries, remains a critical challenge.

Human Resource and Industrial Relations

As on March 31, 2025, Diensten Tech Ltd. employed a robust team of professional forming the backbone of its business operations. The workforce is a well-structured blend of seasoned professionals and emerging young talent, fostering an agile and scalable organizational culture.

We recognize that our employees are our most strategic assets. Their domain knowledge, commitment, and service delivery excellence continue to enhance the Companys reputation in a competitive market.

The Company places continuous emphasis on Human Resource Development (HRD) through initiatives that include:

• Structured professional skills training

• Safety practice awareness

• Reinforcement of social and ethical values

• Engagement programs promoting innovation and inclusivity

Throughout FY 2024-25, employee relations remained positive and harmonious. The management and workforce maintained a collaborative, goal-aligned approach, strengthening morale and driving the Companys strategic agenda forward.

Business Outlook

Diensten Tech Ltd. is a next-generation IT consultancy firm, uniquely positioned to support enterprises in their digital transformation journey. With a focus on building smarter, future-ready organizations, the Company offers end-to-end professional solutions across diverse sectors through a collaborative and innovation-driven approach.

Key pillars of our business model include:

• IT Skilled Staffing Solutions

• IT Training & Development

• Corporate Learning Modules

• Capacity Building Initiatives

• Consulting on Digital Enablement

Despite a competitive industry landscape, the Company remains confident in its strong fundamentals and is focused on:

• Operational efficiencies

• Technological integration

• Client-centric innovation

This forward-looking stance will continue to enhance our market relevance and revenue growth. Core Business Services & Strategic Focus Areas

• IT Skilled Staffing and IT Support & Consultancy remain the strongest focus areas.

• Corporate Training and Capacity Building continue to scale with increasing demand for enterprise learning and transformation.

KEY FINANCIAL RATIOS:

Details of significant changes in Key Financial Ratios and any changes in Return on Net Worth of the Company (on standalone basis) including explanations therefore are given in notes to the financial statements which forms part of this Annual Report.

CAUTIONARY STATEMENT:

Statements included in this Management Discussion and Analysis and Directors Report that describe the Companys objectives, plans, expectations, projections, estimates, strategies, or future performance are "forward-looking statements" within the meaning of applicable securities laws and regulations, including but not limited to the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, as amended.

These forward-looking statements reflect the Companys current views and are based on certain assumptions and expectations of future events. They involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to differ materially from those expressed or implied in such statements. Key influencing factors include, but are not limited to:

Changes in domestic and global economic conditions,

Government policies, regulatory developments, and fiscal reforms,

Industry trends and sectoral shifts,

Technological changes and operational challenges,

Exchange rate fluctuations and inflationary pressures, and Competitive dynamics and market demand.

While the Company believes the assumptions underlying these statements are reasonable, such statements should not be interpreted as guarantees of future performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Readers and investors are therefore cautioned not to place undue reliance on these forwardlooking statements.

BY ORDER OF THE BOARD, For DIENSTEN TECH LIMITED Sd/- VIPUL PRAKASH DIN: 01334649 Chairman Cum Managing Director Address : 204/1, Neb Valley Sainik Farms, Neb Sarai, New Delhi-110068 Place: New Delhi Date: August 12, 2025