GVP Infotech Ltd Management Discussions

The discussion hereunder covers the financial results of GVP Infotech Limited for the financial year 2025-26 and its business outlook for the future. Certain statements in the Management Discussion and Analysis Report section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

Overview about Company

GVP Infotech Limited ("the Company") is an RBI-authorized Payment Aggregator engaged in providing digital payment processing and payment aggregation services to merchants and businesses. The Company is a relatively new participant in the payment processing industry and commenced its commercial operations effectively during FY 2024. Accordingly, FY 2025-26 represents an important phase in the Companys transition from initial establishment of its payment infrastructure and merchant ecosystem towards business expansion and scaling of transaction volumes.

During FY 2025-26, the Company continued to strengthen its payment processing platform, merchant onboarding capabilities, banking and payment network relationships, technology infrastructure, transaction monitoring systems and operational processes. The Company focused on providing reliable, secure and technology-driven payment acceptance and settlement solutions to its merchant base.

The Companys principal business vertical during the year remained Payment Aggregation and Digital Payment Processing, under which it facilitates electronic payment transactions between customers and merchants through various available payment channels and payment instruments.

The Company is progressively developing its merchant ecosystem with particular focus on small and medium-sized merchants, businesses requiring digital payment acceptance solutions and merchants seeking technology-enabled payment collection and settlement services. Industry structure and developments.

Our strengths

We believe that we are well positioned for the principal competitive factors in our business. With experience in managing the systems and workings with enterprises, we believe we are uniquely positioned to help them steer through their technology transformation with our technological Framework.

Our competition

We see intense competition in traditional services, a rapidly changing marketplace and the emergence of new players in niche technology areas

Industry structure and developments

Indias digital payments industry has evolved rapidly from a cash-driven ecosystem to a technology-enabled landscape comprising banks, Payment Aggregators ("PAs"), fintech companies, card networks, digital wallets, UPI participants and other technology providers. Growth in smartphones, affordable internet, digital literacy, e-commerce and government initiatives has accelerated digital payment adoption.

UPI and QR-based payments have emerged as key drivers, particularly among retail merchants and small businesses. The industry is also adopting automated reconciliation, fraud detection, data analytics, API integrations and AI-enabled risk management to improve efficiency and security.

The sector is regulated by the Reserve Bank of India ("RBI"), with a focus on KYC/AML, merchant due diligence, escrow and settlement, customer protection, cybersecurity and operational resilience. Increasing formalisation, e-commerce growth and the expansion of SMEs are expected to create further opportunities for digital payments.

Against this backdrop, the Company, as an RBI-authorised Payment Aggregator, is positioned to benefit from this growth. Having commenced commercial operations effectively during FY 2024, the Company is focused on expanding its merchant network, strengthening its technology and payment infrastructure, improving processing and settlement capabilities, and delivering secure and reliable digital payment solutions.

Major opportunities of the Company are as follows

- Wide experience in executing various government IT contracts.

- Track record of successful execution of projects.

- Increase in IT-Automation and digitalization in government sector.

- Financial Technologies sector.

- Expansion of Merchant Base

- Small Merchant and QR-based Ecosystem

- Growth in Digital Commerce

- Expansion of Payment Products and Services

- Technology and Data-led Services

- Partnerships and Ecosystem Development

Major Threats/Challenges to the Company are as follows

- Intense Industry Competition

- Regulatory Changes.

- Cyber Fraud and Increasing Sophistication of Attacks

- Dependence on Banking and Payment Infrastructure

- Pricing Pressure and Margin Compression

- Merchant Acquisition and Retention

- Scalability

Segment-wise or product-wise performance:

The principal areas of business performance during FY 2025-26 may be summarised as follows:

1. Payment Aggregation and Merchant Acquiring Services:

The Company continued to expand its merchant onboarding and transaction processing activities during the year. The business model is principally transaction-driven, wherein growth in the number of active merchants, transaction volumes, transaction value, transaction frequency and associated processing income are key drivers of revenue.

The Company has continued to focus on improving merchant acquisition, transaction success rates, settlement efficiency, reconciliation and customer support. The management believes that the Companys relatively new position in the industry provides significant scope for expanding its merchant base and transaction volumes in the coming years.

2. UPI and Digital Payment Processing:

UPI continues to be one of the principal drivers of Indias digital payments ecosystem. NPCI data reflects the substantial scale of UPI adoption, with monthly UPI transaction volumes continuing to remain at very high levels.

The Company is positioning its payment processing infrastructure to participate in this expanding digital payments ecosystem and to facilitate convenient payment acceptance for its merchant network.

3. QR-based Payment Acceptance:

The Company has also been developing solutions for onboarding merchants through QR-based payment acceptance. This segment provides an opportunity to cater particularly to small retailers, local businesses and other merchants that require simple, low-cost and easily deployable digital payment acceptance solutions.

d. Technology-enabled Payment Solutions

The Company continues to invest in technology, payment infrastructure, transaction monitoring, reconciliation and reporting capabilities. The objective is to provide merchants with a secure and scalable payment processing environment while maintaining operational reliability and regulatory compliance.

Overall Performance:

As the Company is still in the initial stages of scaling its Payment Aggregation business, management considers growth in transaction processing volumes, active merchant base, transaction success rate, settlement efficiency and recurring transaction-based revenue to be key operating indicators.

The Company expects that increasing merchant acceptance of digital payments, continued growth in UPI and other electronic payment instruments and increasing formalisation of small and medium-sized businesses will support the expansion of its payment processing business.

Outlook:

The Company remains focused on building a scalable, secure and compliant Payment Aggregation platform. As the business matures, management expects greater merchant acquisition, increasing transaction volumes, improved operating leverage and expansion of transaction-linked revenues.

The Company proposes to follow a measured growth strategy, balancing business expansion with regulatory compliance, cybersecurity, transaction risk management and operational resilience.

The Companys objective is to establish itself as a reliable and technology-driven participant in Indias rapidly evolving digital payments ecosystem.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The company has adequate internal control systems commensurate with its size and operations to ensure orderly and efficient conduct of business while safeguarding the assets, quality, safety, procurements, finance and accounts and reducing and detecting error.

RISK & CONCERNS:

Risk Management is a critical exercise for all organizations, particularly with the companies dealing in technology sector which is uncontrollable due to hardware and software failure, human error, spam, viruses and malicious attacks, as well as natural disasters such as fires, cyclones or floods. However, the main aim of risk management is to identify and analyze the risks through a structured Risk-Benefit Analysis as and mitigate the risks wherever possible.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The financial performance of the Company is described in the Directors Report under the head "Financial Result" and "Review of Operations".

Key Financial Ratios:

The key financial ratios for Financials are as per the below table:

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof: Due to Profit Margin Reduced

During the year under review the revenue of the Company increased from Rs. 569.02 Lakhs to Rs. 648.27 Lakh, an increase of 13.93%. However, the company incurred the loss due to new business vertical for PA-PG business cost incurred for IT infrastructure. Further the business development cost is higher as compared to revenue. Multiple reasons contributed to this lower performance. Increased Operating Costs to expand its operations to meet the growing demand for software development services, such as employee salaries and infrastructure expenses.

The IT and software development sector is highly competitive, with numerous companies vying for clients and projects. In such a competitive environment, companies may offer competitive pricing or discounts to win contracts, which impacts profit margins.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATION FRONT:

The Company routinely undertakes employee development activities keeping in mind the professional requirement of the employee as well as the growth of the company.

The Company has embarked on the path to formalize its commitments and is perhaps the one of the companies in India in the technology sector to move in this direction. This is not only going to result in better integration within the supply chain but also offers a significant competitive edge in marketing our products in the developed markets across the word.

The industrial relations were cordial throughout the year with no incidence of strike or lockouts.

Disclosure of Accounting Treatment:

Not applicable to the period under review.

CAUTIONARY NOTE:

Certain statements in the Management Discussion and Analysis section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Directors envisage in terms of their future performance and outlook. Investors are cautioned that this discussion contains forward looking statement that involve risks and uncertainties including, but not limited to, risks inherent in the Companys growth strategy, dependence on certain businesses, dependence on availability of qualified and trained manpower and other factors discussed. The discussion and analysis should be read in conjunction with the Companys financial statements and notes on accounts.

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.