Hypersoft Technologies Ltd Management Discussions

Industry context, financial performance and risk management

Ma g Discussion & Analys Industry Structure and Development

The global Information Technology (IT) services industry continues to expand steadily, with the market estimated at approximately USD 1.6-1.8 trillion in 2025-26 and projected to grow at a compound annual growth rate of approximately 8-9% over the coming years, driven by accelerated cloud adoption, enterprise- wide digital transformation, rising demand for cybersecurity and data protection, and the increasing integration of artificial intelligence and automation across business functions. Nine out of ten organizations globally are expected to increase their IT budgets, reflecting sustained enterprise investment in technology infrastructure and services notwithstanding macroeconomic headwinds. During the year under review, the Company significantly expanded its global footprint through the acquisition of NX Global Pte. Ltd. (along with its step-down subsidiaries) and Nexus Innovate Pte. Ltd. (along with its step- down subsidiary), both established players in the technology and business consulting space with operations across Singapore, the Asia-Pacific region, and the United States. This has enabled the Company to transition from a primarily India-focused IT services provider into a diversified, internationally present group with delivery capabilities across multiple markets, including the establishment of a US Branch during the year, which commenced contributing meaningfullyto revenue. The Company believes that its enhanced geographic diversification, combined with an expanded service portfolio spanning IT consulting, ERP/SAP implementation, and business process support, positions it to participate in the broader industry trend toward integrated global delivery models, at a time when global enterprise IT spending continues to grow steadily.

Source: Grand View Research, “IT Services Market Size, Share & Trends Report, 2026-2033"; ViinSoft IT Budget Survey, 2025.

Opportunities

U Access to new client relationships, sectors, and geographies (particularly the USA and Asia-Pacific) through the acquired subsidiaries, reducing dependence on any single market;

. Cross-selling opportunities by combining the Companys existing IT and support services offerings with the acquired entities consulting, ERP, and SAP capabilities;

. Establishment of the US Branch as a platform for a dedicated Offshore Delivery Center and Global Capability Center model, enabling the Company to serve international clients more competitively;

. Continued global demand for digital transformation, cloud adoption, cybersecurity, and Al-driven automation, supported by rising enterpriseIT budgets;

. Ability to leverage the skilled talent pool and existing client base of the acquired subsidiaries to undertake larger and more complex projects. The IT and ITeS consulting sector is positioned for robust growth, driven by accelerating demand for digital transformation across all industries. Key opportunities include advising organizations on cloud adoption, Al integration, and automation; the need for cybersecurity services as cyber threats rise; and the surge in sustainability and ESG consulting, which allows firms to help businesses achieve regulatory compliance and implement green IT solutions. Expansion into new markets, such as Tier-2 cities, and sector-specific specialization (e.g., healthcare, financial services) also present significant avenues for growth. Threats Major threats for IT and ITeS consulting include rapid technological change, which requires continual investment in new capabilities and retraining of personnel to remain competitive. Cybersecurity risks, such as data breaches and ransomware, represent ongoing business hazards, especially as clients move to complex cloud-based environments. Consultants face pressure from commoditization and fee scrutiny, with clients demanding transparent pricing and ROI, sometimes favoring tech-enabled platforms or boutique firms over traditional models. Recruitment and retention of skilled talent remains difficult due to a global shortage and competition among firms, while evolving regulations such as those governing Al and data privacy create

Outlook

Having significantly expanded its scale and geographic presence during the year through the acquisitions of NX Global Pte. Ltd. and Nexus Innovate Pte. Ltd., the Company is focused on consolidating these acquisitions, integrating operations across its India, Singapore, Asia-Pacific, and US operations, and driving operational synergies through shared technology platforms and streamlined processes. The Company will continue to focus on strengthening its service portfolio, deepening client relationships across its expanded geographic base, and building on the momentum in revenue and profitability achieved during FY 2025-26. The outlook for IT and IT consulting companies is mixed but evolving rapidly. Growth is expected to continue, driven by strong demand for digital transformation, Al-led solutions, and diversification into new markets like Australia, the Middle East, and India. However, the industry is undergoing a structural shift as Al reshapes traditional consulting models, moving engagements toward outcome-based and technology-driven services. Despite this, macroeconomic uncertainties especially in the U.S. and structural headwinds in markets like India could limit growth to more modest levels of 4-5% in the medium term. Success will depend on how well firms balance Al adoption, geographic diversification, and agility in adapting business models. The Board remains cautiously optimistic about the Companys growth trajectory, subject to prevailing industry and macroeconomic conditions.

Risks and Concerns

The rapid rise of Al and automation is disrupting traditional delivery models, reducing the need for large workforces and creating pressure to reskill employees while raising questions of over-reliance and quality control. Economic slowdowns in key markets like the U.S. and Europe, coupled with geopolitical uncertainties, are causing clients to cut back or delay spending, leading to revenue volatility. At the same time, intense competition, rising wage costs for niche skills, and a shift toward outcome-based contracts creates pressure on margins. Internal Control Systems and Their Adequacy

The Company has a proper and adequate system of internal controls, commensurate with the size, scale and complexity of its operations. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from unauthorized use or disposition, alongside operational controls and fraud risk controls covering the entire spectrum of internal financial controls. Discussion on Financial Performance During FY 2025-26, the Company delivered a strong improvement in both operational and financial performance, driven largely by the commencement of operations through its newly established US Branch and continued growth in exportand domestic service revenues. Revenue

The Companys Revenue from Operations increased to \36.14 Crore in FY 2025-26, as against 8.05 Crore in FY 2024-25, registering a growth of approximately 349%. This growth was driven by:

. Export Sale of Services increasingto 14.12 Crore (FY 2024-25:%3.61 Crore);

. Domestic Sale of Services increasing to 6.63 Crore (FY 2024-25:34.44 Crore); and

. Revenue from the US Branch 0f%15.39 Crore, contributed for the first time during the year.

Including Other Non-Operating Income of 27.31 Lakh, Total Income for the year stood at \36.41 Crore, as against38.11 Crore in the previous year.

Key Financial Ratios Significant Changes (25% or more)

The table below sets out the key financial ratios of the Company for FY 2025-26 as compared to FY 2024-25, together with explanations for variances exceeding 25%, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors, assisted by the Audit Committee, oversees the Companys risk management framework, which is designed to identify, assess, monitor and mitigate risks that could affect the achievement of the Companys business objectives. The Companys risk management mechanism is commensurate with its size, scale and the complexity of its now-international operations, and the Board is of the view that there are no elements of risk which, in its opinion, threaten the existence of the Company.

The Companys Internal Control System, together with its Internal Auditors, Statutory Auditors and Audit Committee, provides ongoing assurance over the design and operating effectiveness of these mitigation measures. A more detailed discussion of specific opportunities and threats facing the Companys business appears in the Management Discussion & Analysis section of this report.