Infollion Research Services Ltd Management Discussions

[Disclaimer: This document may contain statements about expected future events and predictions of your Company, which are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate as several factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred herein]

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

The tailwinds for the industry remain as strong as ever and there are no major changes on the regulatory side. In continuation with the past trends, the contingent staffing industry is increasingly adopting the marketplace model with new marketplaces coming up in every function or skill. This transformation follows a pattern observed across various sectors, such as travel and food, where conventional inventory-led approaches have given way to dynamic marketplace frameworks. This strategic pivot in the staffing industry underscores the paradigm shift towards agility, specialization, and the gig economy. As businesses seek more flexible and on-demand talent solutions, the emergence of marketplace-driven staffing presents a compelling avenue for enhanced efficiency and adaptability. This transition resonates with broader trends shaping industries across the spectrum, where digital platforms and marketplace dynamics have proven to be pivotal in shaping the modern business landscape.

Beyond the conventional white collared contingent staffing segment, the gig-economy has witnessed a growing prominence as the business landscape continues to evolve. This paradigm shift has led to the emergence of the B2B human cloud segment, where businesses engage with skilled professionals on a flexible, project-based basis. This trend reflects the changing dynamics of work relationships and the increasing emphasis on agility and specialization.

The convergence of these trends underscores the dynamic nature of contemporary business interactions. Organizations across industries are adapting to the evolving workforce landscape, leveraging the gig economy and exploring the potential of peripheral marketplaces to enhance their offerings and stay relevant in an ever-changing environment.

Improved economic conditions in India are bolstering the industry by fostering a more conducive business environment for consulting and investment activities. Rising investor confidence and increased corporate demand for strategic insights are driving the growth of B2B human cloud companies as businesses seek specialized knowledge to navigate favourable economic prospects. Major contributors include -

- Overall healthy growth in the GDP

- Increased commercial & economic growth

- Rapid adoption of globalization, digital-first approach

One of the key observations is increased usage of the global experts by Indian consumers and increased adoption of our services by large and mid-tier companies. This is largely driven by the voracious hunger of Indian companies for frontier knowledge and cutting edge technologies available globally.

B. OPPORTUNITIES AND THREATS:

Opportunities

• Globalization of the Talent Pool: The B2B human cloud offers access to a vast global talent pool, enabling businesses to tap into specialized skills from different geographical locations, thereby reducing saturational dependencies.

• Scalability and Flexibility: B2B human cloud businesses can easily scale their operations up by tapping into peripheral marketplace models, without significant overhead costs and commitments associated with full-time employees, providing operational flexibility.

• Cost Efficiency: Engaging freelance experts on a project basis can be cost-effective, as businesses can reduce expenses related to benefits, office space, and training, while still accessing top-tier talent.

• Growing Market: The human cloud allows businesses to source highly specialized skills for short-term projects, leading to improved project outcomes and the ability to address complex challenges with precision.

Threats

• Data Security and Privacy: Sharing sensitive business information with freelance experts can lead to concerns about data security and privacy breaches, especially when working with remote professionals.

• Dependency on Technology: The success of the human cloud industry relies heavily on technology platforms and digital connectivity. Technical glitches, cybersecurity threats, or platform outages can disrupt operations.

• Regulatory Changes: Any legal or regulatory changes can impact our business operations and may impact the revenues from operation.

• Revenue Concentration: Our revenues from operations are highly dependent on a limited number of clients.

Changes in fiscal, monetary, foreign policies can also have an impact on the business owing to fluctuations in interest rates, foreign exchange rates, and taxes.

C. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Companys business activities fall within a single primary business segment. Accordingly, disclosures under AS -17 "Segment Reporting" are not required to be made.

D. OUTLOOK:

a. Business Outlook

Our market assessment indicates that India continues to experience strong and broad-based growth, supported by new client acquisition as well as the expansion of existing relationships. This performance is consistent with our projections and reinforces the long-term potential of the market as it moves toward greater maturity. Strengthening network effects suggest that the industry is likely to consolidate around a single leading player, and we are positioning ourselves to capture that role. Concurrently, our incremental servicing costs are declining, even as we deliver enhanced value to our clients and experts.

Globally, the market continues to expand at a measured pace, with adoption rates steadily rising, though the trajectory remains more moderate compared to Indias rapid growth. Operationally and financially, our performance has remained resilient, with key metrics consistently tracking within the expected range over the past several years. Looking ahead, we see significant opportunity in further leveraging our expert network across a wider set of use cases, enabling us to enhance both operational efficiency and the overall value we deliver.

At a company level, we have seen progress in the US geography with almost a quarter of our business being generated by experts from that geo. We have started to maintain a semi-permanent presence with frequent travel of executives and is likely to pay rich dividends over the next few years. We have started taking baby steps in MENA, EU and SEA geographies as well. This can be a growth driver down the line once we are able to increase the network base in these geographies.

b. Technological perspective

This year, and likely over the next few years, one of the focus areas on the tech front was deeper integration with client workflows with the help of APIs, webhooks etc. This has not only helped us automate process workflows like sharing of profiles, identification of profiles, scheduling, logging etc which not only help us save precious man-hours but also makes the business stickier.

We expect Artificial Intelligence to play a larger role at Infollion as well as the Industry in general. We have experimented with a marketplace of AI agents to perform market & equity research, with scrapers of freely available public data, pay per use proprietary data sources etc. This marketplace will use deep integration with our existing expert network platform to add a data layer of transcripts and recordings. On similar lines, we are also experimenting with voice bots which can conduct interviews thereby freeing up analyst time and increasing the market size of the industry.

After encouraging results of our value chain maps as a standalone product, we have moved up a notch and will integrate them deeply into our core expert network platform where 3rd parties including clients can make their own value chains.

c. New Business Initiatives

We have been strategically exploring and evaluating opportunities where we can leverage our existing supply or demand side synergetic to our current businesss strengths as well as completely new opportunities where we can reuse our technology and learnings of operating a marketplace into a completely different set of supply and demand. One of such initiatives is our Huksa service line - technofunctional L&D programs for Corporates. With longer term engagements with Corporates in mind, were leveraging the supply-side with renowned experts, creating a hook by offering LMS solutions to clients, instructional design, LMS administration, course creation and course delivery services to experts, and offering unique deep-domain courses for mid-to-senior level professionals.

While this was at an experimental stage last year, our conviction towards this model has increased substantially. It is likely to move on to a full fledged business unit with a dedicated team of instructional designers, sales & operations and a BU head in the upcoming years.

As a consequence of our foray in L & D, Managed training services is an area that is the next in line for exploration and experimentation. Given the synergies and size of the market, this makes it a very attractive proposition in the longer run.

d. Key Growth Drivers

i. Increased need for access to information

The expert networking industry is thriving due to the increasing need for real-time insights in evolving markets. Expert networks offer access to direct expertise, help speed up research for businesses, private equity firms, and researchers, while also enabling meeting demands for specialized/ deep knowledge for very specific projects. By cultivating a network of experts with deep domain knowledge and experience, expert networks are becoming the go-to resources for clients seeking highly specialized insights and solutions within a specific sector.

ii. Voice bot interviews & AI

With advancements in AI and maturity of technologies in text to speech segment, Integration of voice bots into the picture is likely to increase the market size of the industry by freeing up analyst time for higher value tasks. This will also lead to deeper integration into client workflows thereby resulting in stickier business.

iii. Globalization and Remote Work

The surge in remote work has led to a remarkable rise in freelancing, both in the developed countries like the U.S. and in developing countries like India. This trend is expected to continue owing to the increasing adoption of digital workplaces. Fields like computer programming, marketing, IT, and business consulting are prominent in the freelance market. The convenience and reliability of specialized networks enable freelancers to efficiently connect with clients globally, reducing the need for traditional client-finding methods. As globalization grows, expert networks play a crucial role in easily sourcing needed talent, enhancing their market presence.

iv. Demand for Micro-Consulting, Diverse Service Offerings

The increasing popularity of micro-consulting, where clients seek quick and focused insights on specific topics, plays to the strengths of expert networks. By providing on-demand access to experts for concise consultations, expert networks, like Infollion, attract clients

who require targeted expertise without the need for long-term commitments. Demand for diverse service offerings such as webinars, workshops, private expert panels, knowledge tours, among others have also increased propelling the growth of expert networks that are well-positioned to offer these services with minimal effort, thus adding parallel revenue streams.

v. Entrepreneurial Mindset

The gig economy empowers individuals to become entrepreneurs and build their brand. Freelancers can market their skills, develop a portfolio, and establish a personal brand that attracts clients. Businesses can access a global pool of talent without the overhead costs associated with full-time employees. Freelancers can offer competitive rates due to lower overhead and operational expenses.

vi. Expansion into L&D

Our new service line Huksa in the Learning & development segment, along with end to end Managed training services, will help unlock opportunities in the mid-tier company and large corporations. This will increase the addressable market size of our offerings multifold while leveraging the supply side of our existing expert network.

E. RISK AND CONCERNS:

The Company understands that it operates in a competitive and challenging environment and its business and operations are subject to a variety of risks and uncertainties like operational risks, financial risks, hazard related risks, market-related risks and strategic risks amongst others.

The Company has a well-defined system in place to reduce its operational risks and has a Risk Management Policy in place that helps in the identification, assessment and monitoring of risks and also helps to mitigate and manage the identified risks.

The Company strives to promote a proactive approach in risks reporting and management. This involves reviewing operations of the organization, identifying potential threats to the organization and the likelihood of their occurrence and then taking appropriate actions to address the most likely threats.

a. Internal Controls

The Company has internal control systems in place appropriately tailored to the size and nature of its business, designed to ensure operational efficiency, safeguard assets, adhere to established policies and procedures, prevent and detect errors and fraud, maintain compliance with internal standards and applicable laws, and ensure the accuracy and reliability of financial statements and reporting.

To reinforce our internal controls, we have enhanced our compliance training programs and introduced improved checks during engagements between Experts and Clients. These programs are designed to ensure that all employees understand and become fully aware of the industrys boundaries and expectations, enabling them to identify and mitigate potential issues before they escalate.

With evolving regulatory requirements and industry best practices, we have proactively updated our compliance processes and internal controls, providing clearer guidelines on information sharing, expert vetting processes, MNPI management and post-engagement feedback.

Additionally, Companys internal financial controls cover key areas such as revenue reporting and recognition, fixed assets, finance and accounts, taxation, treasury, HR & Payroll, and Procurement. These controls ensure that all transactions are executed with proper authorization, accurately recorded and reported, and that assets are safeguarded against unauthorized use. Additionally, compliance with corporate policies is closely monitored. The Audit Committee regularly interacts with the Statutory Auditors and Management to address matters related to financial reporting and internal controls within its terms of reference.

By continuously investing in our compliance infrastructure, we ensure that our operations remain transparent, accountable, and aligned with the highest ethical standards.

F. FINANCIAL PERFORMANCE

SUMMARY OF CONSOLIDATED PROFIT AND LOSS

FOR THE YEAR ENDED 31ST MARCH 2025

PARTICULARS	31-03-2025	31-03-2024
Income From Operations
I Revenue from operations	7730.32	5174.83
II Less: Cost of Sales i.e. Fee to Experts	(4202.70)	(2784.48)
III Gross Profit	3527.62	2390.35
IV Other Non-Operating Income	220.84	156.52
V Other Operating Expenses
(a) Employee benefits expenses	(1723.47)	(1140.43)
(b) Depreciation and amortisation expenses	(1.66)	(0.43)
(c) Finance costs	(38.66)	(13.38)
(d) Other expenses	(338.40)	(235.99)
Total Other Operating Expenses	(2102.20)	(1390.24)
VI Profit before exceptional and extraordinary items and tax (III-IV)	1646.27	1156.63
VII Exceptional items	-	-
VIII Profit before extraordinary items and tax ( V- VI)	1646.27	1156.63
IX Extraordinary Items	-	-
X Profit before tax (VII- VIII)	1646.27	1156.63
XI Less: Tax Expense:	(402.12)	(299.83)
XI Profit / (Loss) After Tax (IX-X)	1244.15	856.80
XVI Earning per equity share:
(1) Basic()	12.84	8.84
(2) Diluted()	12.83	8.84

SUMMARY OF STANDALONE PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2025

PARTICULARS	31-03-2025	31-03-2024
Income From Operations
I Revenue from operations	7730.32	5174.83
II Less: Cost of Sales i.e. Fee to Experts	(4202.70)	(2784.48)
III Gross Profit	3527.62	2390.35
IV Other NonOperating Income	223.76	156.52
V Other Operating Expenses
(a) Employee benefits expenses	(1723.47)	(1140.43)
(b) Depreciation and amortisation expenses	(1.66)	(0.43)
(c) Finance costs	(36.69)	(13.38)
(d) Other expenses	(348.66)	(235.99)
Total Other Operating Expenses	2110.48	(1390.24)
VI Profit before exceptional and extraordinary items and tax (III-IV)	1640.91	1156.63
VII Exceptional items	-	-
VIII Profit before extraordinary items and tax ( V- VI)	1640.91	1156.63
IX Extraordinary Items	-	-
X Profit before tax (VII-VIII)	1640.91	1156.63
XI Less: Tax Expense:	(402.12)	(299.83)
XI Profit / (Loss) After Tax (IX-X)	1238.78	856.80
XVI Earning per equity share:
(1) Basic()	12.78	8.84
(2) Diluted()	12.78	8.84

a. CFOs comments

• Revenue from Operations

During FY 2024-25, the company recorded a strong growth of 49% in consolidated revenue, reaching 7,951.17 lakh. This includes operating revenue of 7,730.32 lakh and non-operating income of 220.84 lakh. Non-operating income mainly comprised interest earned on fixed deposits and returns from investments in short-term liquid funds.

• Cost of Sales

This represents the fees paid to experts during the year, which serve as the companys direct expenses. The cost of sales remained broadly in line with FY 2024-25, enabling the company to sustain healthy gross margins.

• Gross Profit

Gross profit increased by 48% and stood at 3,527.62 lakh, resulting in a strong gross margin of 46%.

• Employee Benefit Expenses

Employee-related costs were consistent with the prior year, accounting for about 22% of total revenue. Following the IPO, the company invested further in human resources to support execution of the strategic objectives outlined in the offer documents.

• Depreciation & Amortization

Given the companys asset-light business model, fixed assets remained minimal, resulting in negligible depreciation and amortization expenses.

• Other Expenses

Administrative and other expenses were maintained at around 4% of total revenue and showed a trend similar to the previous financial year.

• Tax Expense

As the company is eligible for a lower tax rate under Section 115BBA of the Income Tax Act, 1961, tax has been computed in accordance with the applicable provisions.

• EBITDA

EBITDA grew by 45% year-on-year, reaching 1,465.75 lakh, with a healthy EBITDA margin of 20%.

• Net Profit

Net profit also rose by 45%, amounting to 1,244.15 lakh, translating into a strong net margin of 16% for FY 2024-25.

• Cash Flows

Operating cash flows stood at 562.32 lakh, aided by improved debtor collection cycles while maintaining a disciplined payment schedule. Net cash used in investing activities was 150.76 lakh, largely directed towards technology upgrades and software development initiatives, as highlighted in the IPO offer documents.

b. Changes in Key Financial Ratios

PARTICULARS	31-03-2025	31-03-2024
(a) Current Ratio,	9.12	9.07
(b) Return on Equity Ratio	26.07%	31.73%
(c) Net capital turnover ratio,	1.65	1.97
(d) Net profit ratio,	15.65%	16.07%
(e) Return on Capital employed,	34.14%	42.44%
(f) Operating Profit Margin	21.21%	21.95%
(g) Trade Receivables Turnover Ratio	5.40	6.10
(h) Trade Payables Turnover Ratio	84.95	38.37

Note: Reason for change of 25% or more as compared to the immediately previous financial year in the key financial ratios:

(a) Trade Payables Turnover Ratio

The Trade Payables Turnover Ratio improved by 121%, reflecting the companys enhanced efficiency in settling payments to experts and other vendors in a timely manner.

c. Change in Return on Net Worth

PARTICULARS	31-03-2025	31-03-2024
Return on Net Worth	23.02%	20.70%

G. PEOPLE & CULTURE

Our success is anchored in the strength of our talent pool and the depth of our research expertise. We continue to focus on attracting and retaining high- calibre professionals whose capabilities enable us to consistently deliver precise expert matching in line with evolving client needs. This focus not only enhances client confidence but also sharpens our ability to anticipate industry shifts, thereby fuelling innovation, growth, and market leadership.

We are committed to positioning ourselves as an employer of choice and a leading job creator within the B2B human cloud industry. Over the past year, our workforce has expanded. We are expanding our team and this expansion supports our 24x7 operating model, with teams now working seamlessly across multiple time zones to serve both domestic and international clients with agility and consistency.

Equally important is our investment in talent development. Through structured mentorship programs, advanced learning platforms, and a culture that encourages collaboration and continuous improvement, we are creating an environment where employees can realize their full potential.

a. Organizational Development

As our global expansion progresses, we continue to encounter organizational and operational challenges that accompany scale. While 24-hour operations have become a day-to-day reality, the more strategic complexity lies in aligning leadership structures. Geo leaders and service line heads are accountable for the full spectrum of functions within their remit, while functional leaders drive the sharing of expertise, best practices, and standards across geographies and business units. This dual requirement creates natural tension within a matrix structure, demanding clarity of ownership, effective collaboration, and careful balancing of local agility with global consistency.

To address these dynamics, we are evolving our reporting frameworks to capture synergies, strengthen knowledge exchange, and maintain accountability, while continuing to adapt to the diverse needs of our clients and teams. In the initial years, we are likely to lean towards agile teams while slowly incorporating best practices and learnings from functions and domain expertise.

b. Employee Growth

One of our key principles has been to prioritise and nurture home-grown talent who can grow along the company. We follow structured programs, with well defined eligibility criteria, training and breakout controls at each level. The executives get involved at each level and this helps our people to think for the long term, learn,grow as well as explore crossfunctional roles within the organisation.

Last year, we started a training program MAP for our middle management and are very proud of what we have achieved so far. We almost doubled the size of our core functions over the last 2 FYs while increasing effectiveness at a per person level. The number of managers as well as the team working in the US timezone doubled in even less time. Training, especially of mid-managers was a core focus, we developed a plan, executed it, and we are already seeing green shoots. At this stage, we can expand our frontlines to almost 1.5 to 2 times with little or no expansion of the middle management. We would look back at the MAP programs with satisfaction as a job well done.

This program was further developed and in the upcoming year we will be rolling out a full fledged 9-12 month training course with internal and external trainers, spread across 6 modules to cover every aspect of the role. In addition to this, we have put to good use the institutional knowledge we have acquired from our L& D vertical. This program will now boast of intuitive instructional design delivered on our own LMS.

c. Employee Engagement

During the year, we reimagined our employee engagement approach by moving beyond piecemeal initiatives to introduce a year-long program spanning fine arts, performing arts, literary pursuits, and sports. To foster greater collaboration, the organization was divided into groups with representation from different teams, enabling cross-functional interaction and strengthening bonds beyond day-to-day work structures. Belonging to the same group throughout the year created a growing sense of attachment and team spirit, while allowing individuals to contribute in areas where they excel.

These collective efforts culminated in our flagship Sports and Cultural Days, which not only showcased talent but also deepened engagement, collaboration, and a sense of belonging across the organization.

H. OTHER DISCLOSURES:

I. DISCLOSURE OF ACCOUNTING TREATMENT:

The disclosure relating to accounting treatment has been mentioned in NOTE NO. 19: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS of the Audited Financial Statement for the FY ended March 31, 2025 enclosed herein below. The same has not been explained under this disclosure to avoid repetition of information.

II. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT:

There are no shares lying in the Demat Suspense Account.

III. DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING LISTED ENTITIES:

The Company has not entered into any such agreements which requires disclosures under clause 5A of paragraph A of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.