Magellanic Cloud Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT </dhhead>

I. OVERVIEW

The global economic landscape in the current financial year (2024-25) continues to evolve, shaped by the lingering effects of past geopolitical events, persistent inflationary pressures, and the ongoing adjustments from globally synchronized monetary policy tightening.

While the world largely averted a severe recession in the preceding period, demonstrating resilience in the banking system and robust performance in major emerging markets, the momentum has been uneven. We observe continued vigilance regarding global growth projections, with a focus on navigating potential headwinds such as geopolitical uncertainties and evolving trade dynamics. The Euro area, for instance, continues to grapple with subdued consumer sentiment and the residual impact of energy price volatility, affecting interest-rate- sensitive sectors. Our strategy for 2024-25 remains attuned to these global shifts, prioritizing agility and strategic adaptation.

II. MCLOUD’S BUSINESS:

An Overview

Mcloud is a leading IT services, consulting, and business solutions organization. We maintain a strong global presence, leveraging deep domain expertise across multiple industry verticals. Our comprehensive portfolio of offerings spans consulting and service integration, application services, digital transformation services, cloud services, engineering services, cognitive business operations, and proprietary products and platforms.

Strategy for Sustainable Growth.

Mcloud consistently navigates through successive technology cycles, continually transforming and adapting to build relevant new capabilities. We remain committed to helping our clients realize the full benefits of innovative technologies, driving

their business evolution and digital adoption.

Our strategy for sustainable growth in 2024-25 is centered on anticipating market needs and investing in future-ready solutions.

III. MCLOUDS STRATEGIC RESPONSES TO OPPORTUNITIES AND THREATS:

Opportunities and Threats:

The following represent key opportunities and inherent strengths for the Company in the current financial year:

Continued investment in skill building, certifications, credentials, IP, and accelerators:

We are committed to enhancing our human capital and technological assets to stay ahead in a competitive market.

Strong growth in cloud migration and transformation revenues: The accelerating trend of cloud adoption continues to present significant revenue expansion opportunities.

Preferred partner to clients seeking to use cloud-native capabilities to power their business transformation: Our expertise positions us as a trusted advisor for clients digital journeys.

Expansion of addressable market: We are

actively exploring new sectors and geographies to broaden our market reach.

IV. CHANGES IN KEY FINANCIAL RATIOS:

Pursuant to provisions of Regulation 34 (3) of SEBI (LODR) Regulation, 2015 read with Schedule V part B(1) details of changes in Key Financial Ratios is given hereunder:

*Previous year’s Figures have been regrouped / rearranged wherever necessary

V. RISK AND CONCERNS

Operating in the dynamic IT services industry, the Company faces various risks, including those arising from rapid technological changes, evolving client demands, and intense competition. Forex risks are a significant consideration, as the Companys exposure to foreign currency fluctuations could impact its Rupee earnings.

We continuously monitor these external factors to mitigate potential adverse effects on our operations and financial performance.

The Company maintains robust internal control procedures, commensurate with its size and the nature of its business. These procedures cover critical areas such as the purchase of stores, raw materials, components, plant and machinery, equipment, and other assets, as well as the sale of goods and services.

Furthermore, the Company has an active Audit Committee that provides periodic oversight of the internal control procedures. The Audit Committee remains accessible to all employees, fostering an environment where recommendations for procedural improvements are encouraged and considered.

VI. DISCUSSION ON FINANCIAL PERFORMANCE OF THE COMPANY:

The detailed financial performance for the financial year 2024-25 will be comprehensively presented in the Audited Financial Statements forming part of this Annual Report.

The overview financial performance of the Company are as follows:

During the year under review, the Standalone total Income was INR 8,476.32 lakhs as against INR 7,734.06 lakhs for the corresponding previous year.

Total Comprehensive income for the period was INR 1363.54 lakhs as against 1822.72 lakhs in the corresponding previous year.

VII. INDUSTRIAL RELATIONS AND HUMAN RESOURCES:

The Company places paramount importance on its relationship with its employees, recognizing it as vital to sustained success. We are dedicated to ensuring that all employees feel valued and are continuously endeavoring to cultivate an environment and culture that empowers every individual to contribute their best and maximize their potential.

We ensure that our employees remain competent through ongoing education, skill development, targeted training programs, and practical experience. Throughout the year, we strive to maintain cordial relations between management and employees, fostering an atmosphere of harmonious working conducive to achieving the Companys business objectives. The Company is poised to motivate each of its employees to perform to the fullest extent possible and to appropriately reward their excellence.

VIII. CAUTIONARY STATEMENT

Statements in this report and Corporate Governance Report read together with the Directors Report and financial statement describing the Companys objectives, projections, estimates, expectations and predictions, may be “forward looking statements”. Actual results may differ from those expressed or implied due to variations in prices of raw materials, seasonal demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and other incidental factors.