Kratikal Tech Ltd Management Discussions

(Forming part of the Directors Report for FY 2025-26, pursuant to Regulation 34(2)(e) read with Schedule V of SEBILODR Regulations, 2015)

1. Industry Structure and Developments

The Company operates in Indias IT-BPM and cybersecurity industry, both exhibiting strong structural growth. IT-BPM industry revenue is

estimated to reach USD 283 Bn by FY25E (from USD 167 Bn in FY18), a CAGR of ~7.8%. The Indian cybersecurity market has grown from USD

1.98 Bn (CY2019) to an estimated USD 13.60 Bn (CY2025E), driven by rising cyber threats, digital adoption, and government spending on CERT-

In and national cyber infrastructure. The Companys scaled, multi-vertical platform - People Security Management (Threatcop) and

Technology & Process Security Services (AutoSecT) - addresses both human-layer and infrastructure-layer cyber risk.

2. Opportunities and Threats

• Opportunities: sustained double-digit cybersecurity market growth; regulatory tailwinds from CERT-In, RBI/SEBI CSCRF, DPDP Act 2023, GDPR/HIPAA/PCI DSS; rising exports (13.05% of revenue in FY24 to 29.94% in FY26) supported by new US and UAE subsidiaries; proprietary AI-driven product ecosystem enabling a scalable ‘land and expand model.

• Threats: rapidly evolving threat landscape requiring continuous R&D; intensifying competition from global and domestic players; rising customer concentration (Top 10 clients at 31.60% of FY26 revenue); forex exposure from a growing export book; talent retention in a competitive market.

3. Segment-wise / Product-wise Performance

TSAT leads the products vertical (43.19% of revenue, FY26) and VAPT leads services (34.98%). Exports grew to 29.94% of revenue in FY26, led by the UAE, with domestic revenue well spread across Maharashtra, Karnataka, Delhi and Haryana.

4. Outlook

The Company will continue to scale the AutoSecT platform, deepen its US and UAE presence through its overseas subsidiaries, pursue its ‘land and expand approach, and invest in R&D and talent to keep pace with the evolving threat landscape. The Board believes the Company is well positioned to sustain its growth trajectory.

5. Risks and Concerns

• Technology obsolescence and evolving cyber-threats; customer concentration; forex and geopolitical exposure from exports; talent retention; higher receivable levels (turnover ratio down from 6.43x to 5.66x); evolving regulatory requirements; dependency on key promoters/leadership.

6. Internal Control Systems and their Adequacy

Internal financial controls are commensurate with the size and nature of the Companys business, periodically reviewed by the Audit Committee. The Statutory Auditors raised no material observations and reported no instances of fraud under Section 143(12) during the year.

7. Financial Performance Discussion

Revenue more than doubled over FY24-FY26. Margin moderation was driven by strategic investments in US & Middle East expansion. ROE stood at 34.95% and ROCE at 34.35% in FY26 (vs. 66.29% and 56.30% in FY24) reflecting the enlarged equity base post-IPO; Diluted EPS rose from ^4.35 to ^7.85 and NAV/share from ^10.61 to ^29.43 over the same period. The Company remains debt-free.

8. Human Resources

The Company had ~200 employees as of FY26-end, across 24 Indian states and 24 countries. Employee costs rose from ^575.05 lakh (FY24) to ^1,505.04 lakh (FY26). Industrial relations remained cordial, with nil POSH complaints during the year.

9. Significant Changes in Key Financial Ratios (>25%)

10. Cautionary Statement

Statements herein describing the Companys objectives, projections and expectations may be ‘forward-looking statements. Actual results may differ materially due to economic conditions, regulatory changes, competitive intensity and other factors. The Company assumes no obligation to update any forward-looking statement.