EverestIMS Technologies Ltd Management Discussions

(6) Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percentage of revenue from operations. ⁽⁷⁾ PAT is calculated as Profit After Tax for the year.

For details in respect of Statement of Significant Accounting Policies, please refer to "Restated Consolidated Financial Information" beginning on page 234 of this Red Herring Prospectus.

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" beginning on page 23 of this Red Herring Prospectus. Our results of operations and financial conditions are affected by numerous factors including the following:

1. General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies;

2. Our ability to respond to technological changes;

3. Adverse natural calamities having significant impact on regions where we operate;

4. Our ability to attract and retain qualified personnel;

5. Inability to promptly identify and respond to changing customer preferences or evolving trends;

6. Any change in government policies resulting in increases in taxes payable by us;

7. Changes in laws and regulations that apply to the industries in which we operate.

8. Our ability to grow our business;

9. General economic, political and other risks that are out of our control;

10. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; 11. Companys ability to successfully implement its growth strategy and expansion plans; 12. Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate; 13. Inability to successfully obtain registrations in a timely manner or at all; 14. Occurrence of Environmental Problems & Uninsured Losses; 15. Conflicts of interest with affiliated companies, the promoter group and other related parties; 16. Any adverse outcome in the legal proceedings in which we might get involved; and 17. Concentration of ownership among our Promoters.

The following discussion on results of operations should be read in conjunction with the Restated Consolidated Financial Information for the financial years ended on March 31, 2026, March 31, 2025, and March 31, 2024.

Revenue from operations mainly consists of revenue from sale of software products, sale of services and sale of hardware products.

Our other income primarily comprises of interest received from banks, profit on redemption of mutual funds, interest on IT refund, forex exchange gain, sundry balances written off and miscellaneous income.

Our expenses consist of direct operating expenses, employee benefits expenses, finance costs, depreciation & amortization expenses and other expenses.

Our Direct Operating Expenses comprises of Purchases of goods and services.

Our employee benefits expense primarily comprises of salaries, contribution to PF & ESIC, gratuity expense, leave encashment expense, staff welfare expense and ESOP perquisite expenses.

Our finance cost includes LC discounting charges and interest on late payment of taxes.

Depreciation and amortization expense includes depreciation on assets other than leasehold assets and amortization on intangible assets.

Our other expenses include audit fees, onsite services & travelling expenses, marketing expenses, lease rentals, power & electricity charges, professional charges, postage & courier, printing & stationery, office expenses, local travelling, rates & taxes, telephone charges, repairs & maintenance, bank charges, loss (gain) on foreign currency fluctuation, CSR expenses, donation and loss on write off of fixed assets.

During the Financial Year ended March 31, 2026, Revenue from operations were 6,512.39 Lakhs. Revenue from Operations for the financial year ended March 31, 2025 stood at 5,654.30 Lakhs representing an increase of 15.18%. The increase is mainly attributed to increase in export of software license, domestic revenue from sale of service and domestic sale of hardware products.

During the Financial Year ended March 31, 2026, other income was 79.08 Lakhs. For financial year ended March 31, 2025, it was 123.79 Lakhs representing a significant decrease of 36.12%. This decrease was mainly attributable to a reduction in profit on redemption of mutual funds, reduced miscellaneous income and reversal of leave encashment provision.

The Total Expenses for the Financial Year ended March 31, 2026 stood at 4,827.85 Lakhs. The total expenses represented an increase of 24.02% as compared to previous year which was 3,892.66 Lakhs. The rise in total expenses was mainly due to an increase in direct operating expenses, depreciation & amortization expenses and other expenses.

Our Company has incurred 862.44 Lakhs as Direct Operating Expenses for the Financial Year ended March 31, 2026. It stood at 283.72 Lakhs during the financial year ended March 31, 2025, representing a significant increase of 203.98%. The increase was primarily due to the bundling of software with hardware sale during the Financial year ended March 31, 2026, which led to higher direct operating expenses associated with such sales.

Our Company has incurred 2,204.25 Lakhs as Employee benefits expense for the Financial Year ended March 31, 2026. It stood at 2,337.96 Lakhs during the financial year ended March 31, 2025, representing a decrease of 5.72%. This decrease was primarily due to the increase in the capitalization of employee-related product development costs during the Financial Year ended March 31, 2026 resulted in a corresponding decrease in employee costs recognized in the statement of profit and loss.

Finance costs for the Financial Year ended March 31, 2026 was 1.94 Lakhs. For financial Year ended March 31, 2025, it was 2.45 Lakhs, representing a decrease of 20.82%, which is due to the decrease in interest on delayed payment of taxes.

Depreciation for the Financial Year ended March 31, 2026 was 570.28 Lakhs. For the financial year ended March 31, 2025, it stood at 378.25 Lakhs, representing an increase of 50.77% primarily on account of increase in the capitalization of employee-related product development costs, addition of data processing units, servers and networks and other office equipments during the year resulting in an increase in depreciation expense during the financial year.

Other Expenses for the Financial Year ended March 31, 2026 stood at 1,188.94 Lakhs. For Financial Year ended March 31, 2025, other expenses were 890.28 Lakhs. The increase of 33.55% was due to increase in onsite services & travelling expenses, marketing expenses, lease rentals, professional charges, postage and courier, office expenses, local travelling, telephone charges, repairs & maintenance, bank charges, CSR expenses, donation and loss on write off fixed asset.

As a result of the foregoing factors, our profit for the Financial Year ended March 31, 2026 decreased by 6.66% to 1,313.93 Lakhs from a profit of 1,407.70 Lakhs in the Financial Year ended March 31, 2025. The decrease was primarily attributable to the increase in direct operating expenses, depreciation and amortization expenses and other expenses.

During the Financial Year ended March 31, 2025, the revenue from operations were 5,654.30 Lakhs. Revenue from Operations for the financial year ended March 31, 2024 stood at 4,522.80 Lakhs representing an increase of 25.02%. The increase was primarily attributed to rise in sale of software products.

During the Financial Year ended March 31, 2025, the other income of 123.79 Lakhs representing a significant increase of 218.55% compared to 38.86 lakhs in the previous year. This growth in other income was primarily driven by higher gain on the redemption of mutual funds, reversal of leave encashment provision and increased interest received from banks, as well as a rise in miscellaneous income. These factors collectively contributed to the rise in other income.

The total expenses for the Financial Year ended March 31, 2025 amounted to 3,892.66 Lakhs represented an increase of 26.50% as compared to 3,077.26 Lakhs in the previous financial year. This increase in total expenses was primarily driven by higher direct operating costs, an increase in employee benefit expenses, elevated depreciation and amortization charges, and a rise in other expenses. The overall growth in expenses is in line with the Companys expanded scale of operations during the year.

For the financial year ended March 31, 2025, the Company incurred 283.72 lakhs as direct operating expenses, reflecting a significant increase of 57.65% compared to 179.97 lakhs in the previous year. This rise was primarily attributable to higher purchases of goods and services, in line with the Companys expanded business activities.

This includes increased costs related to IT consulting and support services, as well as commission and service fees.

Our Company has incurred 2,337.96 Lakhs towards Employee benefits expense for the Financial Year ended March 31, 2025, representing an increase of 24.56% compared to 1,876.90 lakhs in the previous financial year.

The increase was primarily driven by higher salary payouts, increased contributions to Provident Fund (PF) and Employees State Insurance Corporation (ESIC), elevated staff welfare expenses, and the recognition of ESOP perquisite expenses during the FY 2025.

Finance costs for the Financial Year ended March 31, 2025, was 2.45 Lakhs reflecting a substantial decrease of 90.76% compared to 26.52 lakhs in the previous financial year. This sharp decline was primarily due to a significant reduction in Letter of Credit (LC) discounting charges and lower interest expenses arising from delayed tax payments during the year.

Depreciation and amortization expense for the Financial Year ended March 31, 2025, was 378.25 Lakhs representing an increase of 46.91% compared to 257.47 lakhs in the previous financial year. This increase was primarily attributable to higher depreciation on property, plant and equipment (excluding leasehold assets), as well as increased amortization of intangible assets during the year.

Other Expenses for the Financial Year ended March 31, 2025, stood at 890.28 Lakhs. For Financial Year ended March 31, 2024, other expenses were 736.40 Lakhs. The increase of 20.90% was due to increase in audit fees, lease rentals, professional charges, postage & courier, printing & stationery, office expenses, local travelling, rates & taxes, repairs & maintenance and CSR expenses.

As a result of the foregoing factors, the Companys profit for the Financial Year ended March 31, 2025 increased by 29.97% to 1,407.70 Lakhs compared to 1,083.08 Lakhs in the Financial Year March 31, 2024.

1. Unusual or infrequent events or transactions

Except as disclosed in this Red Herring Prospectus, there are no unusual or infrequent events or transactions in our Company.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

There have been no significant economic changes that have materially affect or are likely to materially affect income from continuing operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under chapter titled "Risk Factors" beginning on page 23 of this Red Herring Prospectus, to the best of our knowledge there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues

Except as disclosed in the chapters titled "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Conditions and Results of Operations" on pages 23, 146 and 278respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Total turnover of each major industry segment in which our Company operates

The Company operates in a single industry segment, i.e. software products and services, offering both Software as a Service (SaaS) and on-premise solutions. Accordingly, the total turnover pertains to this single segment, and no separate segment-wise disclosure is applicable.

6. Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter "Our Business" beginningon pages 146, our Company has not announced any new product or service.

7. Seasonality of business

Our business is not subject to any seasonality. For further information, see "Our Business" beginningon pages 146.

8. Dependence on single or few customers

Our business does not rely on any single customer or vertical. We serve a diverse customer base spread across multiple industries and geographies. For further details, refer "Risk Factors" beginningon page 23 of this Red Herring Prospectus.

9. Competitive conditions

We operate in a competitive market. We serve a diverse customer base spread across multiple industries and geographies and do not rely on any single customer or vertical. For further details, refer "Risk Factors" beginning on page 23 of this Red Herring Prospectus

Except as mentioned in this Red Herring Prospectus, no circumstances have arisen since the date of last financial statement until the date of filing this Red Herring Prospectus, which materially and adversely affect or are likely to affect the operations or profitability of our Company, or value of its assets, or its ability to pay its liability within next twelve months. Our Company has approved the Red Herring Prospectus vide resolution in the Board Meeting dated September 21, 2026.