Hinduja Global Solutions Ltd Management Discussions

Annexure ‘D to the Directors Report

Overview

The financial statements and the associated notes to accounts for the financial year ending 31st March 2025 (FY 2025) have been prepared in compliance and the requirements of the Companies Act, 2013 (the Act), and other related and associated guidelines issued by the Securities and Exchange Board of India (SEBI), along with the generally accepted accounting norms, under Indian Accounting Standards (Ind-AS) reporting format, and co-opting all the amendments and revisions from time to time. HGS management accepts responsibility for the integrity and objectivity of these financial statements as well as for the various other estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect truly and fairly, to capture the form and substance of the transactions and reasonably present your Companys state of affairs, profits and cash flows of the year.

Macroeconomic Trends

(All references is this section are for calendar years 2024 , 2025 and 2026)

The global economy entered 2024 with cautious optimism, as signs of stabilization emerged following an extended period of unprecedented shocks. Inflation gradually receded from multi-decade highs, albeit unevenly across regions, while labor markets broadly normalized, with unemployment and vacancy rates returning to prepandemic levels. Global GDP growth remained relatively stable, averaging around 3% across quarters, with output converging toward potential.

This emerging stability, however, is now being challenged by significant shifts in global trade and economic policy. These developments have reintroduced considerable uncertainty into the macroeconomic environment and are testing the resilience of the global economy. Trade- related uncertainty has risen sharply, reflecting varying national exposures to protectionist measures, financial linkages, and evolving geopolitical dynamics.

These headwinds are materializing amid a broader loss of economic momentum. Recent indicators point to weaker- than-expected real activity, with a notable deceleration in global GDP growth in the fourth quarter of 2024. Progress on disinflation has slowed, and in several economies, inflation has once again moved above central bank targets. While services inflation remains on a downward trajectory, it continues to exceed pre-inflation surge levels, and core goods inflation has shown signs of resurgence.

Looking ahead, the global outlook is increasingly clouded by elevated policy uncertainty, persistent geopolitical tensions, and structurally embedded challenges such as high sovereign & corporate debt and subdued productivity growth. These factors have prompted the multi-lateral organizations to revise downward their global growth projections, with the International Monetary Fund now expecting growth at 2.8% for 2025 and 3% for 2026, down 50 basis points and 30 basis points, respectively from earlier projections done in January 2025.

Organisation	Earlier Projections		Latest Updates		Latest Projections Month
	2025	2026	2025	2026
World Bank	2.7%	2.7%	2.7%	2.7%	Jan-25
OECD	3.3%	3.3%	3.1%	3.0%	Mar-25
IMF	3.3%	3.3%	2.8%	3.0%	Apr-25
UN	2.8%	-	2.4%	-	May-25

Given the cautious outlook for global economic growth, greater collaboration among countries within the global trading system is expected to shape how shared concerns are addressed. This is likely to be accompanied by a continued focus on strengthening supply chain resilience, evolving regulatory frameworks to support more dynamic product and labour markets, and sustained efforts to upgrade workforce skills.

(Source: IMFs World Economic Outlook, World Bank, OECD Economic Outlook, World Economic Situation and Prospects)

Economies where HGS operates

India - Resilient despite Global Headwinds

Indias economic landscape in FY2025 continued to exhibit resilience, with GDP growth rate projected between 6.2% to 6.6% by leading global financial institutions. Deloitte estimates annual GDP growth between 6.3% and 6.5% for FY2025; OECD projecting 6.4%; while the IMF forecast is relatively conservative at 6.2%. Despite lower GDP growth rate compared to last year, most of the multilateral agencies believe that India will be the fastest growing economy next year as well, underscoring a delicate balance between shifting global trade dynamics and sustained efforts to bolster domestic consumption.

The IMF projects India to become the fourth-largest economy by 2025, with its nominal GDP reaching $4.187 trillion. However, the IMF, World Bank, and Moodys have slightly revised down their FY2026 growth forecasts to 6.2% and 6.3% respectively, citing global headwinds and domestic policy uncertainties. Conversely, the Asian Development Bank (ADB) maintains a stronger outlook, forecasting 6.7% growth for 2025 and 6.8% for 2026.

Several factors are expected to propel Indias economic expansion. These include the positive impact of tax incentives, a more manageable inflation environment, and stable global oil prices. Additionally, lower borrowing rates and increased liquidity within the financial system are expected to foster investment and consumption. A more predictable global environment towards the end of the year is also anticipated to boost overall sentiment. The underlying strength of Indias economy is further supported by robust domestic demand, a favorable demographic dividend, and ongoing structural reforms aimed at enhancing productivity and improving the investment climate.

Despite the generally optimistic outlook, India faces notable challenges. Uncertainty in global trade networks, particularly the risk of increased tariff barriers on Indian goods exports to key markets like the United States, could pose negatively impact. Geopolitical tensions, as highlighted by Moodys, also introduce an element of risk. The World Banks assessment points to underperformance in private investment and shortfalls in public capital expenditure targets in the current fiscal year, which could constrain growth. Furthermore, a constrained export demand due to shifting global trade dynamics and slowing international growth remains a concern.

Overall, Indias economic trajectory remains positive, driven by robust domestic fundamentals and reform momentum, but it must navigate a complex global environment marked by economic uncertainties and evolving trade policies.

(Source: Deloitte, OECD, IMF, Asian Development Bank, Media reports)

USA - Growth Faces Rising Uncertainty and Trade Policy Risks

The US economic outlook reflects a delicate balance between underlying resilience and growing uncertainty. Strong consumer spending and sustained business investment continue to support growth, but the broader environment remains volatile, shaped by shifting global trade dynamics and evolving domestic policies.

Trade policy remains a key variable. EY-Parthenon projects that rising US tariffs could slow real GDP growth to 1.1% in both 2025 and 2026, while placing recession risk at 45% over the next 12 months. This cautious view stems from declining consumer and business sentiment, now at lows not seen since the 1980s. The US economic outlook reflects a delicate balance between underlying resilience and growing uncertainty.

Deloittes Q1 2025 forecast presents a more optimistic baseline, assuming moderate tariff increases, continued deregulation, and federal spending restraint. Under this scenario, GDP is expected to grow by 2.6% in 2025 and 2.1% in 2026. However, Deloitte also outlines a wide range of possible outcomes, depending on policy shifts, trade agreements, and inflation trends.

The Conference Boards May 2025 update echoes concerns over trade-related risks. While recent tariff reductions on Chinese imports offer some relief, they still forecast short-term headwinds to growth, inflation, and employment. Moreover, expectations for Federal Reserve rate cuts have been scaled back, with only two reductions likely this year.

Overall, while core economic fundamentals remain intact, the outlook is increasingly shaped by policy uncertainty and fragile sentiment. Growth is expected to moderate, and the risk of recession - though not assured - is becoming more pronounced.

(Source: Deloitte, EY Parthenon, The Conference Board)

Canada - Trade risks cast shadow over growth

Canada entered 2025 on an uncertain footing, with trade tensions - particularly with the US - casting a long shadow over growth, investment, and employment. Economic projections indicate GDP growth is forecast between 1.2% and 1.7%, with a marked slowdown anticipated in the latter half of the year. Business investment remains subdued, particularly in manufacturing and infrastructure, a consequence of elevated interest rates, persistent inflation, and the prevailing uncertainty surrounding trade policy. This hesitation in capital spending reflects not merely the direct risk of tariffs, but a broader reluctance in the face of unpredictable regulatory environments.

Given its export-driven nature, Canadas economy is particularly vulnerable to a cooling US economic outlook and the potential imposition of tariffs. The deep economic integration between the two nations means that such disruptions could ripple across investment, supply chains, and employment. The Bank of Canada, having paused its rate cuts at 2.75% in April, may consider further easing to support job growth, even if inflation remains above its target. Balancing the risk of inflation with the imperative to support economic growth remains a critical policy challenge.

The most significant threat to this outlook is the potential for a broad 25% US tariff. While S&P Global Ratings baseline assumes a more moderate 10% average tariff, a more severe outcome could depress GDP growth below 1%. Furthermore, the removal of exemptions under the Canada-United States-Mexico Agreement (CUSMA) could lead to a lasting 3% reduction in Canadas GDP by 2030. To mitigate these risks, strategic responses include reinforcing CUSMA, actively expanding trade ties with other international partners, implementing targeted fiscal stimulus, and addressing critical labor shortages in priority sectors.

(Source: S&P Global, Deloitte and Bank of Canada)

United Kingdom - Period of tempered growth

The UK is currently navigating a complex and challenging landscape, with various independent forecasts pointing towards a period of subdued growth in the coming years. Projections from leading economic bodies such as KPMG and the EY ITEM (Independent Treasury Economic Model) Club highlight significant headwinds, primarily stemming from global trade disruptions and pervasive market uncertainties.

KPMGs latest UK economic outlook projects a GDP growth rate of 0.8% for both 2025 and 2026. This modest expansion could be further curtailed by the potential impact of imposed tariffs, which are expected to dampen overall economic activity. The report also anticipates a near-term rise in inflation, peaking at around 3.6% by autumn, before gradually receding to meet the Bank of Englands 2% target by mid-2026. Despite this inflationary blip, KPMG foresees interest rates remaining above their neutral level, with three further cuts penciled in for 2025 and an additional two in 2026, which should provide some stimulus to the economy. The underlying economic picture in the first half of 2025 is characterized by weak growth prospects across numerous sectors, putting additional pressure on public finances given the UKs fiscal framework and limited headroom.

Echoing this cautious sentiment, the EY ITEM Club Spring Forecast has also revised down its GDP growth expectations, predicting 0.8% for 2025 and 0.9% for 2026. Their analysis underscores that global trade disruption and market uncertainty are fostering a more cautious environment for both businesses and consumers, thereby limiting spending. A key concern highlighted is the assumption of the US operating with an average tariff rate of over 20% for much of the world, which is expected to challenge UK exports and weaken demand for goods. While a return to a more moderate GDP growth of 1.5% is now forecast for 2027, rather than 2026, gradual interest rate cuts are anticipated to provide support for capital expenditure growth.

The independent forecasts compiled by HM Treasury (containing 17 forecasts) projects GDP growth of 0.8% for 2025 and 1% for 2026. The gradual reduction in interest rates is seen as a key mechanism to bolster both business investment and household consumption, offering a degree of optimism amidst the prevailing economic challenges.

(Source: KPMG, EY, HM Treasury by Government of the UK)

The Philippines - Strong growth trajectory

The Philippine economy continues to exhibit robust and sustained growth, with GDP expanding by 5.7% in 2024 and projected to maintain a strong trajectory over the next two years. The World Bank expects Philippine GDP growth at 6.1% in 2025, up from 6.0% in 2024. Asian Development Bank (ADB) similarly projects GDP growth of 6.0% in 2025 and 6.1% in 2026. This resilient performance is underpinned by substantial investments in infrastructure, progressive structural reforms, vigorous growth in services exports, and steadfast private consumption bolstered by significant remittances from overseas Filipino workers. The economys predominant domestic orientation further insulates it from the adverse impacts of global trade tensions, enhancing its stability in an uncertain international environment.

On the fiscal front, the government has made commendable strides in strengthening fiscal discipline. The budget deficit is expected to contract to 3.6% of GDP by 2026, driven by enhanced tax collection mechanisms and prudent expenditure management. Despite these achievements, the economy faces notable risks that could impede its growth trajectory. Domestic political uncertainties, potential escalations in global trade tensions, and rapid technological advancements threatening the sizable outsourcing sector pose significant challenges.

(Source: World Bank, European Chamber of Commerce of the Philippines, Asian Development Bank, Fitch Ratings)

Jamaica - Focusing on fiscal prudence

Jamaicas economy has made significant strides in recent years, supported by disciplined fiscal management, strategic structural reforms, and a strong monetary policy framework. The World Bank underscores the nations significant achievements in lowering its debt-to- GDP ratio, advancing social indicators, and bolstering macroeconomic stability. The World Bank projects 1.7% growth for Jamaica in 2025. Despite global challenges, such as geopolitical disruptions, Jamaica has maintained a steady recovery, propelled by strong performances in tourism, remittances, and service exports.

The Bank of Jamaica reports that inflation has stabilized within target ranges, supported by proactive monetary tightening and flexible exchange rate policies. The central bank remains committed to ensuring price stability while creating an environment conducive to sustainable economic growth.

In February 2025, Fitch Ratings reaffirmed Jamaicas long-term foreign currency rating at BB with a Positive Outlook, citing the governments steadfast commitment to fiscal prudence, a declining public debt trajectory, and a robust external position underpinned by substantial international reserves. Nevertheless, challenges persist, including vulnerability to external shocks, elevated crime rates, and climate-related risks.

Overall, Jamaicas economic outlook remains cautiously optimistic, supported by a strong policy framework and sustained reform momentum. To maintain this positive trajectory, the country must address structural constraints, strengthen resilience to climate change, and continue fostering investor confidence through consistent and effective macroeconomic governance.

(Source: World Bank, Fitch Ratings)

Colombia - Persistent productivity stagnation

Colombias economy has maintained macroeconomic stability, supported by strong institutional frameworks. However, persistent productivity stagnation has constrained sustained growth. The World Bank projects GDP growth of 2.4% in 2025, and up to 2.9% by 2027.

The economy started 2025 strongly, with first-quarter growth reaching 2.7%, exceeding earlier projections. Robust household consumption, bolstered by public spending, drove this performance. Key sectors contributing to growth included agriculture, which surged by 7.1% year-on-year, alongside services such as entertainment and transport, and a modest industrial recovery. However, declines in mining and construction continued to weigh on overall growth.

Despite this positive start, challenges remain. Fixed investment grew modestly at 1.8%, hampered by weaknesses in housing and construction. While exports increased by 2.4%, a sharp 11.9% rise in imports resulted in net exports detracting from GDP Full-year 2025 growth forecasts range between 2.3% and 2.6%. Regulatory and political uncertainties continue to dampen private investment, while a constrained fiscal environment and global uncertainties pose risks to export performance.

(Source: World Bank, BBVA Research)

Australia - Building on strong rebound

Australias economy is positioned for steady growth in 2025, building on a strong rebound in late 2024. KPMG forecasts real GDP to expand by 2.0% in the year ahead, with both headline and core inflation expected to stabilize around 2.9%. In response to the improving inflation outlook, the Reserve Bank of Australia is anticipated to begin easing monetary policy early in the year, with the cash rate projected to average 3.6%, signaling a shift towards a more accommodative stance.

The agricultural sector, a vital pillar of the economy, is navigating a complex landscape. A strengthening domestic economy, moderating inflation, and shifting global trade dynamics offer fresh opportunities - but also pose renewed challenges for both producers and lenders. While some agricultural exports, such as almonds and fruits, are poised for growth, broader trade uncertainties and tariff risks remain. Moodys analysis outlines a range of scenarios for the sector, highlighting the need for adaptive and strategic lending practices. Financial institutions will be central to supporting the sectors resilience - aligning financing with seasonal cash flows, utilizing risk analytics to mitigate exposure to global disruptions, and proactively addressing climate-related risks.

Together, these dynamics suggest a year of solid economic performance for Australia in 2025, supported by measured growth and a resilient, forward-looking agricultural sector.

(Source: KPMG, Moodys)

INDUSTRY OVERVIEW

Global IT & Business Process Management

After facing two consecutive years of subdued growth, the global IT and Business Process Management (BPM) industry initiated 2024 with promising signs of recovery emerging in the first half. This sector, which has undergone significant disruption with the advent of Generative AI (GenAI) and advanced automation, is now strategically reorienting itself. New benchmarks for operational excellence are being established, with a sharp focus on process efficiency, heightened accountability, and enhanced adaptability. While these initial “green shoots” of recovery were visible, the momentum was difficult to sustain. This was largely due to a confluence of geopolitical developments and persistent uncertainty surrounding trade tariffs, which collectively impacted the spending behaviors of government, corporate, and broader business segments.

However, the outlook for a full-fledged recovery appears increasingly optimistic, driven by the rapid and widespread adoption of AI tools. According to a recent analysis by Gartner, GenAI spending is poised for an unprecedented surge across all core markets and their associated submarkets in 2025. This indicates that GenAI is not merely an incremental technological advancement but rather a truly transformative force that will reshape virtually every aspect of IT spending markets. The implication is clear: AI technologies are set to become an increasingly integral, indeed foundational, component of both business operations and consumer products in the near future.

Looking ahead in 2025, two major catalysts are expected to fuel robust IT spending: the escalating investment in GenAI and continued prioritization of Information Security. Gartners forecasts paint a compelling picture, projecting worldwide IT spending to reach $5.61 trillion, representing a substantial 9.8% increase from 2024. A dominant share of this projected growth is attributed directly to GenAI spending, which is anticipated to surge by an astonishing 76.4%, totaling an estimated $644 billion in 2025. This significant uptick in GenAI expenditure in 2025 will be predominantly driven by the pervasive integration of AI capabilities directly into hardware platforms, including servers, smartphones, and PCs, with a substantial 80% of GenAI spending allocated to these hardware components. Furthermore, the demand for AI-optimized servers is expected to skyrocket, easily doubling spending on traditional servers in 2025 and reaching an impressive $202 billion. This reflects a clear industry shift towards leveraging specialized hardware to maximize the performance and potential of AI technologies.

Worldwide GenAI Spending ($ Million)	2024		2025
	Spending	% Growth	Spending	% Growth
Services	10,569	177.0	27,760	162.6
Software	19,164	255.1	37,157	93.9
Devices	1,99,595	845.5	3,98,323	99.5
Servers	1,35,636	154.7	1,80,620	33.1
Overall GenAI	3,64,964	336.7	6,43,860	76.4

(Source: Gartner - Mar 2025)

Indian IT/BPM Market

The Indian Information Technology (IT) and Business Process Management (BPM) industry continues to demonstrate strong and sustained growth, reinforcing its position as a global hub for technology, innovation, and digital transformation. This momentum is underpinned by accelerating digital adoption across industries, increased enterprise technology spending, and strategic investments in next-generation capabilities.

According to NASSCOMs Strategic Review FY2025, the overall Indian technology sector is expected to reach revenues of US$ 283 billion, reflecting a 5.1% year-overyear growth. Export revenues are anticipated to grow by 4.6% to US$ 224 billion, while the domestic market is poised to expand by 7.0%, reaching US$ 58.2 billion. NASSCOMs Annual Enterprise CXO Survey 2025 indicates continued optimism for calendar year 2025, with growth expected to be driven by increased investments in AI-led digital transformation, cloud-native architectures, and cybersecurity solutions.

The BPM segment, a key pillar of the broader tech ecosystem, had estimated revenues of US$ 54.6 billion in FY2025. Exports continue to dominate, accounting for approximately 90% of the industrys revenues, with North America and Europe remaining the principal markets. The BPM sector is evolving rapidly, moving beyond traditional service delivery towards value-added, outcome-based models. Process transformation initiatives, powered by AI, cloud platforms, and real-time analytics, are enhancing operational efficiencies and improving customer experiences.

Further reinforcing the positive outlook, Gartner forecasts that total IT spending in India will grow by 11.1% year- over-year to US$ 161.5 billion in 2025. Software and IT services are expected to lead this expansion, with projected growth rates of 16.9% and 11.2%, respectively. The adoption of generative AI, cloud migration, and digital consulting services are key drivers of this upward trajectory. In parallel, end-user spending on information security is projected to rise by 16.4%, reaching US$ 3.3 billion in 2025, fueled by heightened cyber threats, regulatory requirements, and the proliferation of cloud- based operations. Notably, security services are expected to record the fastest growth at 19%. By 2028, Gartner estimates that 40% of IT services contracts will include integrated security components, underscoring the central role of cybersecurity in enterprise IT strategy.

The concurrent growth of the IT and BPM industries, supported by robust technological innovation and a dynamic policy environment, continues to elevate Indias stature in the global digital economy. The sectors strategic pivot toward high-value, technology-enabled services positions it well to capture emerging opportunities and drive long-term value creation.

(Source: NASSCOM, Gartner and media reports)

The CX Market

The Customer Experience (CX) landscape is set for a dynamic transformation in 2025, fueled by rapid technological innovation, rising customer expectations, and a strategic focus on delivering tangible value. Emerging trends point to a decisive shift towards hyperpersonalization, intelligent automation, and frictionless omnichannel engagement - anchored by strong data protection measures and a growing emphasis on enhancing employee experience.

As outlined in KPMGs India CX report for 2025, customer experience is now viewed as a key lever for value creation. Companies are increasingly acknowledging that superior CX not only accelerates growth but also strengthens profitability and mitigates risk. By streamlining customer acquisition, deepening loyalty, and driving renewals, CX becomes a catalyst for sustainable expansion. It enhances profitability by elevating the perceived value of offerings, enabling competitive differentiation, and reducing acquisition costs through improved conversions and word-of-mouth advocacy. Moreover, a well-executed CX strategy builds trust, stabilizes revenue streams, and supports the successful launch of new products or services, thereby reducing exposure to business volatility.

AI and Automation at the Core

Artificial intelligence is poised to redefine customer engagement, moving well beyond basic automation. AI- powered systems are enabling organizations to anticipate customer needs, offer highly personalized experiences, and foster deeper loyalty. The capabilities of AI now extend to designing adaptive, end-to-end customer journeys - ranging from virtual retail try-ons to real-time dynamic pricing models - signaling a shift towards more intelligent, responsive interactions across sectors.

Evolving Dynamics

The contact center of 2025 will be a digitally advanced hub, characterized by seamless AI integration, cloud- based operations, and robust data analytics. Hybrid models combining on-site and remote work will dominate, underpinned by tools that enhance collaboration, productivity, and customer insights. Voice technology and conversational AI will further humanize interactions, offering more intuitive and effective support experiences. Real-time data analysis will empower agents to deliver context-aware, personalized service at scale.

A Holistic Approach to Experience

Customer experience strategies are increasingly embracing a broader perspective that includes sustainability, employee well-being, and responsible data stewardship. Organizations are investing in employee experience as a direct driver of customer satisfaction, recognizing that empowered teams are critical to delivering exceptional service. Omnichannel integration is expected to mature, offering customers a seamless journey across digital and physical touchpoints. Simultaneously, data privacy and security will remain top priorities, with businesses committing to transparent and secure handling of customer information. Proactive service models, guided by predictive analytics, will enable businesses to resolve issues before they escalate - enhancing satisfaction and loyalty.

Organizations that align CX with business strategy, technology, and purpose will be best positioned to create meaningful differentiation and long-term value.

(Source: KPMG, NASSCOM, media reports)

Digital Media & Entertainment and Telecom

The media and entertainment (M&E) industry is undergoing a profound transformation, shifting from traditional formats to digital platforms and fundamentally altering how content is consumed. Valued at US$32.21 billion in 2025, the global M&E market is projected to expand to US$46.89 billion by 2030, reflecting a robust compound annual growth rate (CAGR) of 7.8%. In this evolving landscape, traditional M&E players are grappling with intensifying competition for consumer attention, premium content, and advertising revenue. The primary challengers are subscription video-on-demand (SVOD) services, social video platforms, and hyperscale technology companies. Digital media trends further reveal that consumers - especially younger audiences - are now distributing their screen time more evenly across television, movies, streaming platforms, social media, and gaming.

In the Indian context too, the rapid rise of digital media is emerging as the dominant force driving the industry. In 2024, the sector registered a 3.3% growth, reaching a valuation of Rs. 2.5 trillion (approximately US$29.4 billion), with digital media contributing a significant 32% to overall revenues. This growth momentum is expected to continue, with the industry projected to expand by 7.2% in 2025, reaching Rs. 2.7 trillion (US$31.6 billion), and maintaining a strong compound annual growth rate (CAGR) of 7% to reach Rs. 3.1 trillion (US$36.1 billion) by 2027.

The rise of digital media has fundamentally reshaped the way content is created, distributed, and monetized. This shift is enabling the industry to respond more effectively to diverse consumer needs - ranging from information and entertainment to escapism, self-expression, and aspiration. At the heart of this transformation lies the exponential growth of digital advertising, which surged by 17% to Rs. 700 billion, accounting for 55% of total advertising revenues. This reflects a broader industry trend: a growing reliance on digital platforms not only for audience engagement but also as critical drivers of commercial success.

The ongoing digital revolution underscores the Indian M&E sectors adaptability, resilience, and innovative spirit. As newer technologies and platforms continue to emerge, the industry is well-positioned to evolve in response to changing consumer behavior and media consumption patterns. From streaming and social media to immersive experiences and personalized content, Indias M&E landscape is set to thrive - and is poised for sustained growth, creative disruption, and long-term relevance in a fast-changing global market.

HGS Verticals

Banking, Financial Services and Insurance (BFSI)

The Banking, Financial Services, and Insurance (BFSI) sector is experiencing a transformative technological evolution, propelled by shifting customer expectations, competitive dynamics from FinTech innovators, and the urgent need for enhanced operational efficiency and robust security. This digital transformation transcends mere system upgrades, representing a fundamental reimagining of how financial services are conceptualized and delivered.

The rapid adoption of cutting-edge technologies is further propelling this momentum. Global enterprise IT spending in the banking and investment services market is forecast to increase by 8.0% in 2024 to $742 billion in constant U.S. dollars, according to Gartner. Spending is expected to see a five-year CAGR of 8.7% to exceed an estimated $1 trillion by 2028. This surge underscores the industrys focus on building resilient, future-ready infrastructure aimed at enhancing operational efficiency, fortifying cybersecurity, and delivering seamless, customer-centric experiences.

As the ecosystem continues to evolve, the fintech sector is poised to unlock unprecedented opportunities, driving innovation and advancing financial inclusion at scale. This evolution has disrupted conventional models by leveraging cutting-edge technology to deliver agile, customer- focused solutions. FinTechs strengths in innovation, seamless user experiences, and niche offerings have compelled traditional institutions to accelerate their digital strategies. This has fostered a vibrant ecosystem of both competition and collaboration, with many established players forging strategic partnerships with FinTechs to integrate innovative capabilities and enhance service offerings.

Looking ahead to 2025, several pivotal technology trends are expected to redefine the BFSI landscape. Artificial Intelligence (AI) and Machine Learning (ML) are at the forefront, evolving from foundational automation to enabling hyper-personalized customer experiences, sophisticated fraud detection, advanced risk management, and predictive analytics. AI-driven cybersecurity is equally vital, providing real-time threat intelligence and anomaly detection to counter an increasingly complex threat environment.

Cloud computing continues to serve as a cornerstone, delivering the scalability, flexibility, and cost-efficiency required to drive rapid innovation and deploy new digital services. This underpins the rise of composable banking, empowering institutions to dynamically assemble modular services, thereby enhancing agility and accelerating the launch of innovative products.

Hyper-automation, integrating robotic process automation (RPA) with AI and ML, is revolutionizing back-office operations by minimizing errors, optimizing processes, and enabling employees to focus on high-value, strategic initiatives. The proliferation of real-time payment systems is meeting the demands of a dynamic digital economy, ensuring instantaneous, transparent, and secure transactions.

Looking ahead, embedded finance will gain prominence, seamlessly integrating financial services into nonfinancial platforms to create intuitive, invisible banking experiences. Blockchain technology will further mature, driving efficiencies in secure transactions, smart contracts, and supply chain finance, while reinforcing trust and transparency. Data privacy and regulatory compliance will remain paramount, with institutions adopting advanced privacy-enhancing technologies to navigate an evolving regulatory landscape.

In 2025 and beyond, the BFSI sectors success will hinge on institutions ability to strategically align technological advancements with customer expectations, regulatory imperatives, and operational excellence. By fostering an agile, secure, and customer-centric ecosystem, forwardthinking organizations will lead the charge in shaping the future of financial services.

(Source: Gartner, Media reports)

Mobile and Telecommunications

The mobile and telecommunications sector is on the cusp of a pivotal shift, spurred by rapid advancements, shifting user expectations, and decisive strategic moves by industry players.

Deloitte projects global revenues to reach approximately US$1.53 trillion in 2024 - a 3% increase from the prior year; while PwC expects a compounded annual growth rate (CAGR) of 2.9% through 2024-2028. Key areas of focus include the adoption of generative AI, early-stage planning for 6G, careful rollout of emerging capabilities, and an uptick in mergers and acquisitions aimed at driving profitability. Substantial prospects lie in expanding fixed broadband and mobile services, particularly in developing regions. Meanwhile, 5G is expected to become the primary mobile standard by 2026, with strong revenue potential in fixed wireless access (FWA) and private network applications. Investment is increasingly flowing toward fiber infrastructure and edge computing to support growing bandwidth and low latency requirements.

Organizations are accelerating the use of AI and automation to enhance operations and customer interactions, with increasing attention on ethical and responsible deployment. The expansion of 5G will continue to underpin smart infrastructure and IoT ecosystems, while groundwork for 6G is being laid. At the same time, closing the talent gap in highly technical domains such as AI and next-generation networks remains a pressing concern.

Nevertheless, progress is not without hurdles. EY outlines several major risks for the sector in 2025, including a failure to adequately respond to evolving expectations around privacy, security, and public trust - particularly as AI becomes more embedded in services. Talent acquisition and cultural alignment are also cited as priority areas, with leadership recognizing the need to build future-ready organizations. Moreover, while digital modernization holds immense potential, suboptimal execution could impede the desired impact, even as automation, cloud- native architectures, and AI are expected to serve as key enablers of efficiency and scale.

In essence, the telecom landscape is entering a decisive phase, marked by forward-looking investments, structural shifts, and heightened responsibility in execution. Players that align innovation with accountability and workforce readiness will be best positioned to lead in this evolving environment.

(Source: KPMG, Deloitte, PwC, EY-FICCI report, media reports)

Consumer and Retail

The retail and consumer industry is experiencing a period of rapid transformation in 2025, driven by shifting consumer expectations, economic volatility, and the need for operational resilience. Despite global uncertainties, including geopolitical tensions and lingering inflation, the sector is poised for growth, with the global retail market projected to reach $35.2 trillion this year. Analysts highlight a return to cautious optimism, as improving household finances and stabilizing interest rates create a more favourable environment, yet consumers remain wary after recent economic shocks. Retailers are responding by focusing on taking market share, protecting margins, and innovating to capture new revenue streams.

Technology is at the heart of this industry evolution, fundamentally reshaping how retailers operate and engage with consumers. AI and machine learning are now central to delivering hyper-personalized customer experiences, enabling predictive analytics, tailored recommendations, and dynamic pricing strategies that drive both engagement and conversion rates. Retailers are also leveraging automation and robotics to streamline warehouse management, inventory tracking, and instore operations, resulting in greater efficiency and cost reduction. While the adoption of cloud computing provides the scalability and agility needed to manage vast amounts of data, support omnichannel retailing, and enable realtime decision-making across the value chain.

Omnichannel integration has become a strategic imperative, as consumers expect seamless experiences across online, in-store, and mobile platforms. Retailers are investing in unified digital platforms to ensure consistent engagement at every touchpoint, using composable commerce to standardize experiences and differentiate themselves from competitors.

The industrys future is increasingly data-driven, with cloud and edge computing fuelling smarter, faster decisions from supply chain management to customer service. Digital traceability and sustainability initiatives are gaining traction, as consumers demand greater transparency and eco-conscious practices from brands. Leading analysts agree that success in 2025 will require retailers to be bold, agile, and innovative, embracing technology not just to adapt, but to proactively shape the future of retail and consumer engagement.

(Source: PwC, Deloitte, media reports)

Government & Public Sector

Governments worldwide are rapidly transforming through technology to deliver faster, more accessible, and personalized public services. Innovations like AI, cloud computing, and automation are boosting efficiency, reducing costs, and enabling data-driven decisionmaking.

In the UK, despite annual digital spending of around ?26 billion, many public services remain undigitized, leading to lower citizen satisfaction and inefficiencies. To address this, the UK government has launched a comprehensive digital reform plan focusing on joining up public services, harnessing AI for public good, strengthening digital infrastructure, and investing in digital skills and leadership. This plan aims to create a more efficient, user-centric government that delivers better outcomes, reduces costs, and improves public trust by 2025.

A key focus in the UK is the adoption of artificial intelligence and data-driven decision-making to modernize service delivery. The government is establishing an AI adoption unit to build capacity and embed AI responsibly across departments. Additionally, initiatives like GOV.UK One Login are simplifying access to services for millions of users, while efforts to replace legacy IT systems with modern cloud-based platforms are underway to enhance security and agility. The government is also prioritizing digital talent acquisition and upskilling civil servants to ensure sustainable transformation.

In Canada, similar trends are observed with a strong emphasis on digital innovation to improve citizen services and government efficiency. Public sector leaders are actively engaging in international forums and summits focused on digital transformation, data strategies, and AI integration. These efforts highlight a growing recognition that technology is essential to meet rising citizen expectations for accessible, transparent, and responsive government services.

(Source: GOV.UK, KPMG, media reports)

Business Overview

HGS is a global leader in optimizing the customer experience lifecycle, digital transformation, business process management, and digital media ecosystem, HGS is helping its clients become more competitive every day. HGS core BPM business combines automation, analytics, and artificial intelligence with deep domain expertise, focusing on digital customer experiences, back-office processing, contact centers, and HRO solutions.

HGS digital media business, NXTDIGITAL (www. nxtdigital.in), is Indias premier integrated Digital Delivery Platforms Company delivering services via satellite, digital cable, and broadband to over 6 million customers across 1,500 cities and towns.

Part of the multi-billion-dollar conglomerate Hinduja Group, HGS takes a “globally local” approach. HGS has 18,347 employees in nine countries, including 32 delivery centers, making a difference to some of the worlds leading brands across verticals. For the year ended March 31,2025, HGS had total income of Rs. 4,958.8 crore (US$ 586.1 million).

FY 2025 Consolidated revenue profile Revenue by Origination

US-originated revenue accounted for 30.2% of operating revenues. US-originated revenues are delivered from centres based out of US, India, Philippines, Jamaica, Colombia, South Africa and Canada.

Revenue originating from India were at 37.0% while UK originated business was at 13.1% of operating revenue. UK-originated revenues are delivered from centres based out of UK, US, Philippines, India and South Africa.

Operating revenue originating from Canada were at 11.6%; and 8.1% from Jamaica, Philippines and Australia.

Digital Media Business revenues originate from India while BPM revenues originate from US, UK, Canada, Jamaica, Philippines, India and Australia.

• Offshore/ near-shore Revenue

The offshore/near-shore Revenues (Originating in one country and delivered from another country) account for 26.2% of operating revenues.

• Voice to Non-Voice Revenue Mix

Voice revenues accounted for 39.0%, Back Office 17.1% and Digital 43.9% of operating revenues.

• Revenue by Vertical

Tech, Media & Telecom: 53.7%, Consumer & Retail: 12.7%, Banking and Financial Services: 16.5%, Public Sector: 9.5% , Health & Life science: 3.8% and Others: 3.8%.

Discussion on Financial Position

Property, Plant, Equipment and Intangible assets

The net block of assets (Tangible assets and Intangible assets) as of March 31,2025 is Rs. 8,858 million as compared to Rs. 8,516 million in March 31, 2024, representing an absolute Increase of Rs. 341 million during the year under review and in percentage terms, it was 4.01%.

The Right to use asset balance as on March 31, 2025 is Rs. 10,190 million. The Right to use asset balance as of March 31, 2024 was Rs. 9,226 million.

The Capital work-in progress balance as on March 31, 2025 is Rs. 88 million. The capital work-in progress balance as of March 31, 2024 was Rs. 81 million.

The Intangible assets under development balance as on March 31, 2025 is Nil. The Intangible assets under development balance as of March 31, 2024 was Rs. 54 million.

The Investment property balance as on March 31, 2025 is Rs. 220 million. The investment property balance as of March 31, 2024 is Rs. 225 million.

Goodwill

As of March 31, 2025, goodwill is Rs. 9,954 million as compared to Rs. 9,596 million in March 31, 2024. Goodwill is tested for impairment.

Investments

It mainly comprises of Non-Convertible Debentures, Quoted investments in equity instruments and Treasury bills at overseas location. As of March 31, 2025, investments were Rs. 36,432 million as compared to Rs. 32,997 million in March 31, 2024.

Loans (Non-current)

As of March 31, 2025, amount of Rs. 15 million of loans to third parties. The same as of March 31, 2024, was Rs. 15 million. These loans are made on normal commercial terms and conditions and at market rate and are carried at amortized cost.

Other financial assets (Non-current)

It comprises of security deposit, margin money deposit and other long-term deposits. As of March 31, 2025, the amounts were Rs. 794 million compared to Rs. 596 million in March 31, 2024.

Deferred tax assets (net) [DTA]

DTA as of March 31, 2025 were Rs. 1,024 million as compared to Rs. 2,581 million in March 31, 2024.

Income tax assets (net)

As of March 31, 2025, amounts were Rs. 3,284 million as compared to Rs. 4,615 million in March 31, 2024.

Other non-current assets

Other non-current assets include capital advance, prepaid expenses, balance receivable from government authorities, loans & advances and other receivables. As of March 31, 2025, the amounts were Rs. 385 million as compared to Rs. 385 million in March 31, 2024.

Inventory

Inventory consists of Stock of network cable, equipment and traded goods and other Media Inventory. As of March 31, 2025, inventory were at Rs. 259 million as compared to Rs. 166 million in March 31, 2024.

Trade receivables

As of March 31, 2025, trade receivables from the customers were at Rs. 7,645 million as compared to Rs. 7,446 million in March 31, 2024, after making allowance/ provision for doubtful debts.

Cash and Bank balances

As of March 31, 2025, cash and bank balances were at Rs. 8,559 million as compared to Rs. 8,815 million in March 31,2024.

Loans (Current)

As of March 31, 2025, loan amount was Rs. 19,296 million out of which loans to related parties were of amount Rs. 4,132 million that were given for working capital finance. The Loan amount as of March 31, 2024, were at Rs. 22,256 million out of which loans to related parties were of amount Rs. 10,100 million that was given for working capital finance, and the balance represents loans given to a third party that are now re-classified as Current Loans. These loans are made on normal commercial terms and conditions and at market rate.

Other financial assets (Current)

It comprises of security deposit, interest accrued, derivative gains, lease receivable and other receivables. As of March 31, 2025, the amounts were Rs. 1,760 million as compared to Rs. 1,709 million in March 31, 2024.

Other current assets

The Other Current Assets comprises of balance with government authorities, Employee advances, vendor advances, prepaid expenses and other assets. As of March 31, 2025, the amounts were Rs. 2,955 million as compared to Rs. 1,967 million on March 31,2024.

Share Capital

The authorized share capital of the Company is Rs. 79.85 million comprising of 79.85 million equity shares of Rs. 10 each and 0.15 million 1% participatory redeemable noncumulative preference shares of Rs. 10 each. The paid- up share capital as of March 31, 2025 was Rs. 465.20 million and as of March 31,2024 was Rs. 465.20 million.

In FY 2023-24, the Company had bought back 6 million equity shares of Face Value of Rs 10 each (i.e. Rs. 60 million) at a price of Rs. 1,700 per equity share by utilising its Securities premium reserve, General Reserve and Retained Earnings.

Share application money pending allotment

The Share application money pending allotment of the Company as at March 31, 2025 and March 31, 2024 was Nil.

Other Equity

The other Equity of the Company increased from Rs. 74,412 million in March 31, 2024 to Rs. 76,616 million in March 31, 2025.

Non-Controlling Interest

The non-controlling interest as of March 31, 2025 is Rs. 1,467 million as compared to Rs. 1,547 million on March 31, 2024.

Borrowing (Non-current)

As of March 31,2025, the total long-term borrowings were Rs. 3,301 million as compared to Rs. 1,335 million in March 31, 2024.

Lease liability

In accordance with Ind AS 116, HGS discounted lease payments using the applicable incremental borrowing rate as at the inception of the lease for measuring the lease liability. As of March 31, 2025, the non-current and current portion of the lease liability was Rs. 4,177 million and Rs. 3,386 million respectively. As on March, 31, 2024, the non-current and current portion of the lease liability was at Rs. 4,641 million and Rs. 3,367 million respectively.

Other financial liabilities (Non-current)

Other non-current financial liabilities as of March 31,2025 were Rs. 50 million as compared to Rs. 90 million as on March 31, 2024.

Provisions (Non-current)

Provision comprises of pension obligation, gratuity and Compensated absences (as per actuarial valuation performed by an independent actuary)& Others. As of March 31, 2024, the provisions were Rs. 2161 million as compared to Rs. 595 million on March 31, 2024.

Deferred tax liabilities (net) [DTL]

DTL as of March 31,2025 were Rs. 221 million as compared to Rs. 689 million in March 31, 2024. Major components of DTL are due to temporary differences to the Property, Plant, Equipment, unabsorbed depreciation and Hedge reserve.

Contract liabilities (Non-current)

It mainly comprises of Income received in advance from customers. As of March 31, 2025, contract liabilities are Rs. 3 million as compared to Rs. 5 million in March 31, 2024.

Borrowing (Current)

As of March 31, 2025, total short-term borrowings were Rs. 8,568 million as compared to Rs. 11,724 million in March 31, 2024.

Trade Payables

As of March 31,2025, the trade payables were at Rs. 5,091 million as compared to Rs. 2,964 million in March 31,2024.

Other current financial liabilities

Other current financial liabilities consist of Interest accrued, capital creditors, deferred consideration payable, unpaid dividend employee related payables and derivative loss. As of March 31, 2025, those amounts were at Rs. 3,407 million as compared to Rs. 6,104 million in March 31,2024.

Provisions (Current)

Provision includes provision for CSR, Gratuity and leave encashment liabilities (as per actuarial valuation performed by an independent actuary). As of March 31, 2025, provisions were Rs. 369 million as compared to Rs. 339 million in March 31, 2024.

Contract liabilities (Current)

It mainly comprises of income received in advance from customers. As of March 31, 2025, the amounts were at Rs. 489 million as compared to Rs. 527 million in March 31, 2024.

Current tax liabilities

As at March 31, 2025, the amount was Rs. 593 million and as at the end of March 31, 2024, the amount was Rs. 1,166 million.

Other current liabilities

Other current liabilities comprise of advance from customers, statutory dues payable and other payables. As of March 31, 2025, the amounts were Rs. 1,359 million as compared to Rs. 1,277 million in March 31,2024.

Operational Review

During the financial year under review, the Company has been communicating to all its stakeholders, that the focus of the company is to grow its profitable businesses, reprice or exit unprofitable accounts, generate free cash flows, undertake cost rationalization from time to time, improve return ratios. FY 2025 has seen operating revenue reducing by 4.6% with operating EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization and excluding Other Income) reducing by 27.7%.

Compared to FY 2024, Digital Media business operating revenues grew by 17.8% while BPM operating revenues reduced by 11.3% in FY 2025. The drop in BPM operating revenues is due to reduction in revenue relating to low margin onshore business. Some onshore clients have migrated to high margin offshore delivery locations, in line with HGS strategy of growing offshore business.

Other Income grew by 17.5% mainly due higher interest income on tax refunds, investments of surplus funds, and gains from foreign exchange fluctuations.

Further, PBT (Profit Before Tax and after Depreciation, Interest Expense) was at Rs. 598 million in FY 2025 as compared to Rs. 1,105 million in FY 2024. This drop was primarily on account of drop in Operating EBITDA.

Tax Expense for FY 2025 was Rs. 1,777 million as compared to negative tax charge of Rs. 207 million in FY 2024.The steep increase is primarily on account of additional deferred tax expense.

In view of the increase in the deferred tax expense, the Company reported a net loss of Rs. 1,178 million from Continuing Operations as compared to Profit After Tax of Rs. 1,312 million in FY 2024.

After taking into account PAT from Discontinued Operations, the Company reported an overall PAT of Rs. 1,007 million for FY 2025.

As on March 31, 2025, company has treasury surplus of Rs. 63,547 million comprising cash & bank balances, loans given and investments in debentures. Total borrowings at the end of FY 2025 stood at ^11,869 million.

Key Financial Ratios

Ratios	FY 2025	FY 2024
Debtors Turnover	5.84	6.25
Current Ratio	3.21	2.33
Debt Equity Ratio	0.15	0.17
Interest Coverage Ratio	3.54	4.51
Operating Profit Margin	5.8%	5.8%
Net Profit Margin(including discontinued operations)	2.0%	2.6%

The above ratios represent the key financial ratios, as applicable to the consolidated financial statements of HGS. Current Ratio and Net Profit Margin is significant, (as defined under the SEBI Listing Regulations i.e., over 25% variation compared to previous year).

Current Ratio was up due to higher short-term investments done in non-convertible bonds and loan repayments to related parties.

Return on net worth during the financial ended March 31, 2025 is 1.3% as compared to 1.7% for the year ended March 31,2024, primarily due to decrease in revenue from operations (as mentioned above) and higher deferred tax expense.

Human Capital

As of March 31, 2025, HGS reported a headcount of 18,347 employees across the nine countries in which it operates.

At HGS, our people-first philosophy is not just a value - its a strategic imperative. We are deeply committed to cultivating an inclusive, empowering workplace where employees thrive, and exceptional client experiences naturally follow. This belief drives our focus on human capital as a cornerstone of our long-term strategy.

Our approach centers on attracting, retaining, and inspiring top-tier talent by offering meaningful opportunities for both career advancement and personal development. Through comprehensive training programs, structured mentorship, and clearly defined growth pathways, we equip our teams with the skills and confidence to excel - particularly in areas such as customer experience, automation, artificial intelligence, analytics, and essential soft skills.

HGS continues to embrace a hybrid work model, supported by intelligent digital tools like recruitment chatbots, mobile-optimized platforms, and engagement initiatives tailored for flexible work environments. These innovations ensure seamless collaboration and sustained productivity across geographies.

We also prioritize employee well-being through flexible work arrangements, wellness programs, and employee assistance initiatives that promote work-life balance and mental health. These efforts are instrumental in reinforcing our reputation as an employer of choice - one that values its people and invests in their success.

By embedding a culture of inclusion, growth, and care into every aspect of our operations, HGS continues to attract high-quality talent and drive sustainable success in every market we serve.

Compliance

HGS has implemented a robust Compliance framework to identify, assess, monitor, control and report compliance status with respect to the applicable laws and regulations specific to the geography in which it provides services. Applicable laws and regulations, including Employment and Labour laws, in countries where the Company operates and any changes to the said laws and regulations are reviewed periodically for their compliance. The Board reviews the compliance status of all the laws and regulations applicable to the Company on a quarterly basis, based on the compliance certificates submitted by the CEO and the CFO.

Awards and recognitions

HGS brand awareness continued to increase in FY2025 with several significant awards and recognitions by leading analysts and organizations in our industry.

Awards Won

• Winner in the category of Customer Experience Excellence through Digital Transformation at the Confederation of Indian Industry (CII) DX Awards 2024

• Winner in the category of Best Use of Innovation in Customer Service at the Customer Fest Leadership Awards 2024

• Winner in the category of Innovative Service of the Year at the Business Innovation Awards 2024

• Stevie? Awards for Sales & Customer Service 2024

Gold Winner in the category of New Contact Center Solution

Silver Winner in the category of Best Use of Technology in Customer Service

Bronze Winner in the category of Innovation in Customer Service - Computer Industries

Bronze Winner in the category of Achievement in Customer Service Automation

• Silver Award Winner in the category of Innovative Use of Technology in Customer Service - Financial Services Industries at the Asia-Pacific Stevie Awards 2024

• HR Asia Awards 2024

Winner in the Best Companies to Work for in Asia - Philippines Chapter

Winner in Diversity, Equity & Inclusion Award

• Winner in the category of Gender Equality Champion - PAN India at the Employee Federation of India (EFI) - Confederation of Indian Industry (CII) Awards 2024

• Named among the Top 50 Data Analytics Team at the OnCon Icon Awards 2024

• Winner in the category of Best Facial Recognition Team at the AI Breakthrough Awards 2024

• Winner in the category of Most Impactful Save Water Initiative of the Year at the Indian CSR Awards 2024

• Winner in the category of Best Achievement in Operational Excellence to deliver an outstanding Customer Experience Excellence at the Business Transformation & Operational Excellence Awards 2024

• Recognized for 20 Most Innovative Practices in Women Returnee programs at the AccelHERate and DivHERsity Awards 2025

• Recognized with Great Place to Work? Certifications for:

HGS Philippines

HGS Canada

• Recognized as Bronze Employer for LGBT+ Inclusion by the India Workplace Equality Index (IWEI) 2024

Analyst Recognition

ISG

• Recognized as a Leader in the “ISG Contact Centre Customer Experience Services Provider Lens™ Study - US for Digital Operations, Intelligent Agent Experience, Intelligent CX (AI & Analytics).

• Recognized as a Rising Star in the “ISG Contact Centre Customer Experience Services Provider Lens™ Study - EMEA” for the Intelligent Agent Experience & Intelligent CX (AI & Analytics).

• Recognized in the “The Booming 15 - Service & Technology Provider Standouts - Americas” in the ISG Index 2Q 2024 & 3Q 2024- Managed Services and As-a-Service Market Insights.

• Recognized in the “The Booming 15 - Service & Technology Provider Standouts - APAC” in the ISG Index 1Q 2024 - Managed Services and As-a-Service Market Insights.

Everest Group

• HGS secured mentions as one of the prominent players in the Everest Group “Creating Value with a Purpose: Impact Sourcing State of the Market 2024” report.

• Recognized as a Major Contender in the Everest Group “Sales Services PEAK Matrix Assessment 2024” in the B2C segment.

• HGS recognized as a Major Contender in the

Everest Group “Customer Experience Management (CXM) Services PEAK Matrix? Assessment 2024” - Americas & EMEA region.

• Included in the Everest Group “Top 50 BPS Service Provider 2024”. Its a global list of the 50 largest third- party providers based on their BPS revenue and year-on-year growth

Forrester

• HGS is acknowledged in the Forrester report

“Deepfakes: The Hidden Threat CMOs Cant Ignore” for its valuable research collaboration and contributions.

Quadrant

• Recognized as “Strong Contender” in Quadrant

Solutions SPARK Matrix: CX Management Services, 2024.

• Recognized as “Strong Contender” in Quadrant

Solutions SPARK Matrix: Contact Center Outsourcing Services, 2024.

Avasant

• Recognized as Disruptors in the Avasant “CX Center Business Process Transformation 2024-2025 RadarView”.

Competitive Advantage

HGS is dedicated to delivering exceptional technology solutions through a verticalized lens - meeting clients where they are and elevating them to where they need to be. By aligning our capabilities around key industries like BFSI, Retail, and Telecom, HGS ensures that every strategy, solution, and service is tailored to the unique demands of each sector.

From helping financial institutions personalize service journeys to enabling retailers to scale digital planning and supporting telecom clients in reducing churn through AI, HGS delivers technology-forward outcomes backed by sector-specific expertise. This vertical alignment fuels operational efficiency enhances compliance-readiness, and accelerates digital maturity, ensuring our clients remain agile in fast-moving markets.

While expectations for intelligent, responsive service continue to rise, HGS mission remains constant: to implement technology that helps customers create frictionless experiences that transform peoples lives. Our “human plus digital” philosophy prioritizes personalization, speed, and trust, anchored by powerful platforms like HGS Agent X and reinforced by one of the most experienced global delivery teams in the industry.

From a Digital Media perspective, the industry continues to battle headwinds, mainly due to changing customer preferences. Whilst linear TV faces erosion - with migration to OTT at the top of the pyramid and free television at the bottom end, our innovative strategies of “solution” bundling are helping our retention efforts. We have a low customer acquisition cost due to already invested infrastructure in both fibre and satellite - which covers all of India, without exception. Our unique Prepaid business model that we leverage for both B2B and B2C segments ensures there are no revenue leakages; and we have in this year, renewed our focus on leveraging our DTV customer base for growing our broadband business.

Your Company also has long-standing relationships with franchisee partners or LMOs (Last Mile Owners), who are a very integral part of the distribution process, as well as excellent and long-lasting relationships with vendors including broadcasters. It allows us to provide customers with bundled or combination packages consisting of video, data and value-added services. Our award-winning NXTHUB concept of a plug-and-play facility continues to expand to Tier II & Tier III locations in India, offering LMOs a cost-effective solution to connect their customers to over 650 television channels seamlessly.

Given the success of our broadband push, our broadband service “ONE” has made strong inroads into Tier III and rural markets last fiscal. Indias 4th largest private ISP has over a million customers today in 350 cities and towns - delivering broadband with speeds up to 1,000 Mbps. We continue to leverage our relationships for competitive advantage - supporting our growing fraternity of Strategic Alliance Partners, who account for a significant portion of our business.

As a digital media business, your Company has looked to continue to build its competitive edge - being the first platform to leverage our infrastructure, our advanced technology, our vast partner network and expertise to support corporates with cutting edge solutions from CelerityX. Our enterprise-grade mesh connectivity “NetX”, our network-as-a-solution “OneX” and our broadband- over-satellite service “SkyX” provide corporates with a single window for end-to-end connectivity solutions.

This myriad of solutions from HGS across the entire customer lifecycle spectrum - from cutting edge CX solutions to all-pervasive digital media services - clearly gives us a strong platform to remain and grow as a preferred partner in industry.

Investing in Tech Capabilities

To thrive in todays digital-first environment and build for the future, HGS continually embraces technology and data to foster a dynamic human-digital ecosystem. This strategic approach drives agility, innovation, and sustainable growth.

HGS continues to modernize legacy systems through investments in advanced technologies, following our mantra to invent to simplify. Were streamlining processes and tools to ensure rapid adaptability and seamless customer experience across industries.

• End-to-End Digital Expertise: Weve invested in critical capabilities required for intelligent experiences: tech modernization, Al-driven analytics & insights, intelligent optimization, cloud, cybersecurity, FinOps & DevOps, contact center transformation, and social care & content. This framework supports scalable, efficient digital solutions for our global clients.

• AI & Generative AI: Our innovation labs across India, the Philippines, and the US are building AI and GenAI solutions across verticals from automating CX workflows to sentiment analysis. In October 2024, we launched the AI Hub in Manila to accelerate the development of cutting-edge digital tools that enhance both internal processes and client-facing operations.

• Cybersecurity Capabilities: In FY2025, HGS significantly expanded its cybersecurity suite, introducing proactive, AI and automation-driven offerings to detect and respond to threats, manage risk, and ensure compliance. These services help safeguard client environments at both enterprise and retail levels, supporting secure, digital transformations aligned with evolving threat landscapes.

• HGS Agent X: Our proprietary contact-center platform continues its growth trajectory, now implemented across 20+ global clients. It delivers transformative outcomes - improving efficiencies, boosting agent productivity, and enabling clients to simplify workflows via smart analytics and automation.

Each investment reinforces HGS commitment to building a robust human-digital ecosystem, one that consistently delivers innovation, efficiency, and growth for our clients and stakeholders.

Risk and Concerns

The year witnessed multiple challenges and emerging risks with our business and operations across all geographies that we operate in. The dynamic nature of the business presents newer and more challenging risks. HGS has put in place a robust risk management framework covering all our businesses. risk framework for acquired businesses are aligned with the existing framework and are integrated at an entity level, strengthening the risk management process.

The business continues to face significant challenges as listed below, though not an exhaustive list.

• The outsourcing industry is being transformed by the recent innovations in Artificial Intelligence and Automation, bringing in substantial newer challenges and emerging risks.

• Talent supply chain management becomes very crucial in an ever-changing technological landscape demanding frequent upgrade of talent and skills.

• Talent retention and attrition related risks.

• Complex and evolving legislations due to emerging and fast evolving legal and regulatory controls in all regions that HGS operates in, with specific emphasis on AI technologies. Other compliance regulations like geo specific Data Privacy regulations, Wages, Immigration etc.

• Heightened risk of increased frequency and intensity of Offensive Cyber-attacks, compromising businesses

• Increased frequency and more sophisticated attacks in the form of ransomware, phishing, smishing etc., despite having strong cyber security controls in place.

• Potential changes in the economic policies of the governments and local bodies like TRAI, changes in Tax laws etc, thereby impacting business operations.

• Global geopolitical and macroeconomic events impacting demand and supply.

• Competitive pricing in the markets and segments that we operate in.

• Volatility in currency exchange rate fluctuation

• Increase in minimum wages across geographies that HGS operates in impacting its profitability.

• HGS efforts to comply with various laws may impose significant costs and challenges that are likely to increase over time. Failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in impairment to our reputation in the marketplace and HGS could incur substantial penalties or litigation.

HGS has designed and established a robust ERM (Enterprise Risk Management) framework comprising of practices related to identification, assessment, monitoring, and mitigation of risks to its business. ERM practices enables HGS to leverage upcoming market opportunities effectively through risk-oriented assessment and mitigation methods that minimize adverse impact of risks. HGS ERM objectives include risk management of areas related to strategic factors (both external and internal), operations, finance, client and market space, technology, and human resources. Our risk practices seek to enhance long term competitive advantage. Risk management processes are monitored, reviewed, and revised as appropriate to adapt to the changing global risk scenario and landscape. The Risk Management Committee reviews on a periodical basis, the identified risks and actions taken to mitigate them.

Risk Categories

HGS ERM framework considers the following categories of risks across various levels of the organization and geographies viz., enterprise level, business unit level, account level:

1. Strategic: Risks emanating out of the choices we make in industry and markets, resources and delivery models which can potentially impact the strategic objectives of the company. Decisions involving mergers, acquisitions, divestures, joint ventures, and other macroeconomic changes could impact the organization performance

2. Counterparty: Risks arising out of our association with external entities for conducting business. These include clients, vendors, and business partners.

3. Operations: Risks inherent to business operations, including those relating to service delivery to clients, human resources, information security, cyber security, intellectual property, physical security, and business activity disruptions. This also includes Sustainability (Environmental, Social and Governance) risks on account of uncertain social or environmental event or condition that, if it occurs, can cause significant negative impact on the company.

4. Finance: Risks impacting the financial performance of the company viz. treasury, taxes as per statutory laws in each country of operation, accounting and reporting, foreign exchange fluctuations and pension fund obligations

5. Regulatory & Compliance: Risks due to inadequate compliance with regulations, contractual obligations and violations leading to litigation and loss of reputation.

HGS Risk Management Practices

Risk management practices include identification of risks, impact and consequence analysis, evaluation of risks, mitigation, and monitoring of risks along with reporting and disclosures. Business planning and strategy is integrated with risk management is an ongoing activity.

Risk identification and Impact Analysis

The procedures have been developed for identifying risks through focus group meetings, interviews, questionnaires, historic data analysis, probability forecasting, control assessment, analysis of uncertainties, what-if scenario analysis, business environment, internal audit findings, assessment of the operations and learnings from incident analysis. HGS has guidelines that provide instructions in carrying out impact-consequence analysis for the identified risk.

Risk Evaluation: Risk criteria have been established in deciding the magnitude of risk to the company. Key risk indicators and thresholds have been identified to evaluate the risks. The risk criterion includes costs, performance objectives, reputation, and regulatory compliance. The risk levels are determined using the potential impact, likelihood of occurrence and the risk exposure.

Risk Mitigation & Monitoring: Identified top risks are tracked to assess residual risks levels and likelihood of occurrence. Analysis, exposure, and assessment of top risks are carried out periodically with emerging risks if-any being included. Mitigation plans are finalized, owners are identified, and progress of mitigation actions are monitored and reviewed. The Committee reports to the Board of Directors on the effectiveness of risk management across the enterprise.

Risk Reporting and Disclosures: Risks impacting achievement of business objectives, movement of risk levels, impact and mitigation status are reported and discussed with the Committee periodically. This Committee further reports to the Board through periodic updates highlighting key risks, their impact and mitigation status.

Incorporating risk management with planning and strategy: Business strategy and planning consider the identified risks and mitigation action as an input for the development of strategy and annual business plan.

Internal Controls

As a business philosophy, HGS management believes in growth with a strong governance system and mechanism in place. HGS has a proper and adequate system of internal controls, commensurate with its size and business operation to ensure timely and accurate financial reporting in accordance with the applicable accounting standards, safeguarding of assets against unauthorized use or/ and disposition and compliance with all the applicable regulatory laws and Company policies.

The Company documents all the policies and procedures and from time to time updates the same, which need to be complied with. There is a clear demarcation of roles and responsibilities at various levels of the organization. Internal Control System aims to ensure that business operations function efficiently; that applicable laws, rules and regulations as well as all the policies/ procedures are complied with and there is reliability and consistency of reported accounting and financial data. The Internal Auditors review the internal control systems on an ongoing basis for its effectiveness and suggests necessary changes, which are duly incorporated. The Internal audit reports are also reviewed by the Audit Committee of the Board.

Based on the current structure of internal financial controls and compliance systems established and maintained by the Company, work performed by the Statutory, Internal external consultants and Secretarial Auditors, including audit of internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by the Management, the Board is of the opinion that the Companys internal financial controls were adequate anc effective during FY 2025.

Audit Trail

The Ministry of Corporate Affairs (MCA) vide its notification No. GSR 206(E) dated March 24, 2021, has issued the “Companies (Audit and Auditors) Amendmen Rules, 2021” read with sub-section 3 of Section 143 o the Companies Act, 2013 introducing new Rule 11(e) new Rule 11(f) and new Rule 11(g) and deleting Rule 11(d). This requirement is applicable from April 1, 2023 Based on management assessment and work performed by external consultants, the Board noted that the Holding

Company and its subsidiary companies incorporated in India have used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective softwares.

Cautionary Statement

Some of the statements or certain statements in the above paragraphs of MDA, describing the Companys objectives, expectations, predictions and assumptions may be forward looking in nature, and within the meaning of the applicable Securities Laws and Regulations. The actual financial and non-financial results may differ materially from those expressed herein, important factors that could influence the Companys operations include global and economic conditions affecting demand, supply, price conditions, change in Government regulations, tax policies and regimes, other statutes and other factors such as litigation and industrial relations.