Equippp Social Impact Technologies Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Directors take pleasure in presenting the Management Discussion and Analysis Report for the year ended March 31st, 2024.

1. Industry structure and developments

The past year can be characterized as one of resilience, marked by slower growth in services revenue due to challenging market dynamics that persisted throughout the year. High interest rates and multi-decade high inflation in key markets, combined with a volatile geopolitical landscape, impacted enterprise spending decisions and budget allocations. NASSCOM reports a sharp decline in growth for tech service providers, dropping from 7-8% in FY22 to 3-4% in FY23, as companies continue to reduce discretionary spending and focus on maximizing returns from previous investments. The conversion of deal bookings into revenue was sluggish, with ongoing pressure on margins for large deals.

Looking ahead to FY24, various research firms and industry bodies suggest the industry is on the verge of

a rebound, with expectations of gradual improvement. However, this recovery may not reach the historical growth averages, influenced by a mild recession, easing monetary policies, and increased private capital ex- penditures aimed at exploring new markets and innovative offerings. Geopolitical uncertainties remain a key factor to monitor. There is anticipated growth in spending across cloud services, IT modernization, digital customer experience, and digital engineering projects. Generative AI is becoming a significant focus area for enterprises worldwide, with key applications in data summarization, assisted problem-solving, code genera- tion, and translation.

Estimates indicate that global enterprise IT spending is likely to reach USD 3.7 trillion in 2024. The BFSI sector will continue to lead IT services spending, driven by the ongoing expansion of digital capabilities in financial services organizations, with IT spending expected to surpass USD 1.3 trillion by 2027. The Life Sciences and Healthcare segment is projected to grow steadily, with IT spending expected to exceed USD 350 billion by 2027. IT spending in the Communications, Media, and Entertainment (CME) segment is also expected to recover, reaching USD 885 billion by 2027

2. Opportunities and Threats

The current market landscape presents significant growth potential, with IT spending across key sectors like BFSI, Life Sciences, Healthcare, and Communications expected to surge in the coming years. The rise in demand for cloud services, IT modernization, digital customer experience, and generative AI offers immense opportunities for EQUIPPP Social Impact Technologies Limited to innovate and expand its influence. How- ever, challenges such as high interest rates, inflation, and geopolitical uncertainties could impact enterprise spending decisions. To navigate these risks, EQUIPPP Social Impact Technologies Limited is proactively incorporating innovative technological strategies to mitigate business risks and capitalize on emerging op- portunities, ensuring sustained growth in this dynamic environment.

3. Segment wise analysis Of Financial and Operational Performance

Evolved in 2021 as an NSE mainboard-listed entity through NCLT, EQUIPPP (Expression of Equity Interest in Public and Private Partnerships) facilitates, as the name suggests, the evolution of Public-Private Part- nerships between governments, organizations, local bodies, social impact investors, CSR foundations, and others.

It enables interconnection and collaboration on sector-wise and geography-wise interests and challenges,

offering suitable and customized solutions powered by technology and finance.

The business model of EQUIPPP is structured around two verticals: the IP vertical and the IT vertical.

The IP business model for EQUIPPP focuses on finance and technology-powered solutions, with a phased rollout of capabilities based on a long-term strategic vision. This strategy is driven by two mirror-image sub- sidiaries: EQUIPPP DESI (Finance) and EQUIPPP 3.0 Labs (Technology).

In the current environment, where local and state governments face fiscal stress due to FRBM constraints, financing development priorities is experiencing a liquidity crunch. This situation presents an excellent busi- ness opportunity for EQUIPPP to offer innovative solutions powered by finance and technology.

Pairing the book-building and enterprise solutions of EQUIPPP with a dedicated financing arm will have a mutually synergistic effect and create a multiplier effect on EQUIPPP, through the revenue and impact gener- ated both from the platform and from the financing arm.

Thus, through the fully owned subsidiary, "EQUIPPP DESI Investments Pvt. Ltd." (DESI), EQUIPPP pro- vides strategic consulting and funding vehicles to capitalize on this opportunity.

Technology plays a crucial role. Along with book-building and collaboration, it can assist in sourcing, impact measurement, and intelligence. This is powered by the EQUIPPP 3.0 Labs.

As a business, EQUIPPP DESI serves as a mirror image of EQUIPPP and is currently the primary business enabler for the company. As a separate legal entity, DESI can effectively navigate the regulatory landscape and create a transparent channel for financing impactful projects.

The IT vertical is being developed organically at both the parent company and subsidiary levels. Inorganic growth is also being explored by combining synergies with a few identified entities that have recurring rev- enues and established customer bases, which complement EQUIPPPs PaaS, book-building, and enterprise solutions.

4. Outlook, risks and concerns

The markets consumption of technology and related services can vary significantly on a quarterly basis. Ex- ternal factors, including economic and political conditions, changes in regulatory frameworks, and advance- ments in technology and product development, can have a substantial impact on EQUIPPP Social Impact Technologies Limited.

To address these challenges, EQUIPPP Social Impact Technologies Limited utilizes advanced analytical methods and proactive strategies to identify and mitigate the associated risks.

5. Internal control systems and their adequacy

The Company has established effective internal controls and governance frameworks, ensuring that its inter- nal control systems are adequate. Other sections of this report further detail and elaborate on the adequacy of these systems

6. Human Resources

Our policies, procedures, and methods are designed to attract, engage, empower, and retain the most skilled professionals in the field. We are focusing on process improvement, automation, and the introduction of pro- active approaches, such as upskilling opportunities, to enhance employee engagement and retention.

As mentioned in the previous report, through a strategic agreement with a design and technology firm, EQUIPPP is leveraging services from a network of retainers and empaneled members. Additionally, new teams have been added to the subsidiaries EQUIPPP DESI and EQUIPPP 3.0 Labs, considering the net worth and other financial factors of the parent company.

7. Ratios