Mangal Compusolution Ltd Management Discussions

1. GLOBAL ECONOMIC OVERVIEW

The global economy remained resilient during FY 2025-26 despite persistent geopolitical tensions, changes in trade policies, elevated uncertainty and uneven growth across major economies. According to the IMFs January 2026 World Economic Outlook Update, global growth was estimated at 3.3% in 2025 and was projected to remain at 3.3% in 2026, supported by technology-related investment, fiscal and monetary support, relatively accommodative financial conditions and the ability of businesses to adapt to changing trade conditions. Global inflation was also expected to moderate from an estimated 4.1% in 2025 to 3.8% in 2026.

The World Banks Global Economic Prospects – January 2026 presented a somewhat more cautious outlook, projecting global growth to moderate to 2.6% in 2026, before improving marginally to 2.7% in 2027. The World Bank highlighted persistent trade tensions, policy uncertainty, elevated debt levels and subdued investment as key challenges to the global growth outlook. At the same time, easing inflation, improving financial conditions, technological investment and greater adaptability of the private sector are expected to provide support to global activity.

The technology sector continued to be an important source of global investment and productivity growth. During FY 2025-26, Artificial Intelligence (AI), cloud computing, data infrastructure, cybersecurity and digital transformation increasingly moved from experimentation towards large-scale enterprise adoption. The IMF observed that technology investment, particularly in AI-related areas, was helping offset some of the negative effects of trade-policy uncertainty. For businesses, the changing global environment is also encouraging greater focus on cost optimisation, operational flexibility and asset-light business models. Enterprises are increasingly evaluating technology expenditure based on utilisation, scalability and return on investment. This environment can support demand for IT equipment rental, leasing and Device-as-a-Service models, particularly where businesses require rapid deployment of technology without significant upfront capital expenditure.

Outlook

The global outlook for FY 2026-27 remains cautiously positive, supported by continued investment in AI, cloud computing, digital infrastructure and automation, although geopolitical tensions, trade restrictions and economic uncertainties remain key risks. For the IT equipment industry, continued digitalisation and demand for flexible, cost-effective technology solutions are expected to support demand for computing devices, servers, networking equipment and related services.

2. INDIAN ECONOMIC OVERVIEW

India continued to demonstrate strong economic resilience during FY 2025-26 despite global trade uncertainties and geopolitical developments. According to MoSPI, Indias real GDP is estimated to have grown by 7.7%, while real GVA is estimated to have increased by 7.9% during the year. Domestic consumption, investment and infrastructure spending remained key drivers of economic activity.

The Economic Survey 2025-26 highlighted stable domestic economic fundamentals, supported by moderating inflation, resilient domestic demand, continued public investment and improving financial-sector conditions. Indias services sector also remained an important contributor to growth, with increasing digitalisation, technology adoption and expansion of Global Capability Centres supporting demand for technology products and services.

Indias technology industry continued its growth trajectory, with NASSCOM estimating the sector to reach approximately US$315 billion in revenue in FY 2025-26, including around US$246 billion in exports. Increasing adoption of AI, cloud computing, data centres, cybersecurity and enterprise digitalisation is expected to further strengthen technology demand.

These developments are favourable for the IT equipment rental and sales industry, as businesses and institutions increasingly require laptops, desktops, servers, networking equipment, projectors and display systems. Flexible rental and leasing models enable customers to access technology with lower upfront investment and greater flexibility for periodic upgrades.

Outlook

The outlook for the Indian economy remains positive, with domestic consumption and investment expected to remain key growth drivers in FY 2026-27. However, global trade uncertainties, geopolitical developments and external economic conditions may continue to pose challenges. The World Bank projects Indias growth at around 6.5% in FY 2026-27, while continued reforms and strong domestic fundamentals are expected to support economic activity.

For the technology and IT equipment industry, continued digital transformation, AI and cloud adoption, growth of data centres and increasing technology requirements are expected to create growth opportunities. The growing preference for flexible and asset-light procurement models, including IT equipment rental and Technology-as-a-Service, is also expected to support industry demand.

Overall, Indias strong domestic fundamentals and expanding technology ecosystem provide a favourable environment for companies engaged in IT equipment rental, sales and maintenance services.

Sources used

• IMF – World Economic Outlook Update, January 2026

• World Bank – Global Economic Prospects, January 2026

• Government of India – Economic Survey 2025-26

• MoSPI – Provisional Estimates of GDP for FY 2025-26

• NASSCOM – Technology Sector in India: Strategic Review 2026

• MeitY – Software Industry Promotion / IT-ITeS Sector

3. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian IT hardware and technology solutions industry witnessed continued growth during FY 2025-26, driven by digital transformation, increasing technology adoption and the growing need for cost-effective and flexible IT infrastructure. Demand for laptops, desktops, servers, networking equipment, projectors, workstations and other technology products remained strong across corporates, start-ups, institutions and other sectors.

The increasing preference for IT hardware rental and leasing models is enabling organisations to optimise capital expenditure, access updated technology and respond efficiently to changing business requirements. The growth of hybrid and remote working, project-based operations, cloud computing, AI, IoT and digitalisation has further supported demand for scalable and flexible IT infrastructure.

Government initiatives promoting digitalisation and technology adoption are expected to provide further opportunities for the sector. However, the industry continues to face challenges including rapid technological obsolescence, competitive pricing, shorter product life cycles, inventory management and fluctuations in global hardware supply chains and prices.

The IT hardware rental and solutions segment therefore presents significant growth opportunities for companies offering reliable products, competitive pricing, flexible rental solutions and efficient customer service.

For Mangal Compusolution Limited, these industry developments provide opportunities to further strengthen its presence in the IT hardware rental and sales segment by offering a comprehensive range of technology products and flexible solutions tailored to the requirements of corporates, enterprises, institutions, start-ups and other customers. The Company remains focused on maintaining service quality, expanding its product offerings, strengthening customer relationships and leveraging the growing preference for flexible technology infrastructure solutions.

4. FINANCIAL PERFORMANCE

The highlights of the Companys performance are as under:

(Amount in lakhs except in EPS)

Particulars	As at 31 st March, 2026	As at 31 st March, 2025
Revenue from Operations	3402.66	2524.05
Other Income	430.05	208.79
Total income	3832.71	2732.84
Total expenditure	3015.86	2151.13
Profit before taxation and exceptional items	816.85	581.71
Exceptional items	-	75.00
Profit before taxation	816.85	656.71
Less: Provision for Taxation
- Current tax	192.15	183.14
- Tax expenses relating to prior years	3.85	25.12
- Deferred tax asset	16.34	(8.42)
Net profit after taxes	604.51	456.87
Earnings per share (Face Value Rs. 10/- each)
Basic	4.44	4.05
Diluted	4.44	4.05

- During the year under review, the Revenue from Operations of the Company is Rs. 3402.66 lakhs as against Rs. 2524.05 lakhs in the previous year;

- Total Income is Rs. 3832.71 lakhs as against Rs. 2732.84 lakhs in the previous year;

- Net profit after taxes is Rs. 604.51 lakhs as against 456.87 lakhs in the previous year;

- The earnings per share in the financial year 2025-26 is Rs. 4.44 per share as against Rs. 4.05 per share for the financial year 2024-25.

Revenue from Operations	Total Income	Net profit after taxes	Earnings per share
3402.66 lakhs	3832.71 lakhs	604.51 lakhs	4.44 per share
2025-26	2025-26	2025-26	2025-26

Compusolution Ltd.

5. SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE

Mangal Compusolution operates in three key verticals:

	FY 2025-26	FY 2024-25
Rental of IT Equipment: Leasing of computers and data processing units	1092.12 lakhs	1310.36 lakhs
Sale of IT Equipment - Sale of Computers and accessories	829.75 lakhs	490.84 lakhs
IT Equipment Maintenance Services - includes revenue from implementation, installation and service charges	1480.79 lakhs	722.86 lakhs

Rental of IT Equipment

1092.12 lakhs

2025-26

829.75 lakhs

2025-26

Sale of IT Equipment

IT Equipment Maintenance Services

1480.79 lakhs

2025-26

6. SWOT ANALYSIS Strengths

Experience rapid solutions with our fast service, delivering efficiency and results at the speed of your business needs.

Ensure peace of mind with our secure payments, safeguarding your transactions with advanced encryption for worry-free financial transactions.

Trust in our success-driven expert team for unparalleled knowledge and proficiency in delivering exceptional outcomes. Unlock quality without breaking the bank – our affordable services make excellence accessible to all.

Weaknesses

Capital and working capital requirements associated with maintaining and upgrading IT hardware inventory.

Rapid depreciation and technological obsolescence of IT assets, requiring periodic replacement and asset optimisation.

Opportunities

Increasing demand arising from digitalisation, hybrid working, AI, cloud computing and high-performance computing. Expansion into new customer segments, geographical markets and project-based rental requirements.

Opportunities to develop strategic partnerships with OEMs and technology providers and offer integrated and customised IT solutions. Rising technology adoption among SMEs, start-ups and institutions creating demand for cost-effective and scalable IT infrastructure.

Threats

Fluctuations in hardware prices, supply-chain disruptions and availability of technology products.

Increasing adoption of alternative models such as device-as-a-service, cloud-based solutions and managed IT services. Macroeconomic uncertainties and changes in customer IT spending that may affect demand for IT hardware solutions.

7. RISKS & CONCERNS

The Company operates in the IT hardware rental and technology solutions industry and is exposed to various business and industry risks, including rapid technological obsolescence, intense competition and pricing pressure, fluctuations in hardware prices and supply chains, asset utilisation and depreciation risks, customer credit and payment risks, working capital requirements, asset damage or loss, changing customer preferences, cybersecurity and data protection concerns, regulatory changes and macroeconomic uncertainties. Any significant changes in technology, customer spending patterns, procurement costs or market conditions may impact the Companys operations, margins and financial performance.

RISK MANAGEMENT

The Company follows a structured and proactive approach to risk management by regularly identifying, evaluating and monitoring key business risks. Appropriate measures are undertaken through prudent inventory and asset management, planned technology upgrades, customer due diligence and credit controls, diversified sourcing, effective receivables monitoring, preventive maintenance, asset tracking, insurance coverage wherever appropriate, and continuous monitoring of market and regulatory developments. The management reviews significant risks periodically and takes suitable corrective and preventive measures to minimise their potential impact on the Companys operations and financial performance.

8. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale, nature and complexity of its operations and regulatory requirements. A comprehensive review of the internal financial controls of the Company was undertaken during the year which covered testing of Process, IT and Entity level controls including review of key business processes for updating Risk Control, Matrices, etc.

Moreover, the Company continuously upgrades its systems and undertakes review of policies, guidelines, manuals, and authority matrix. The internal financial control is supplemented by extensive internal audits, regular reviews by the Management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements, its reporting and other data. The Audit Committee of the Board reviews internal audit reports given along with management responses. The Audit Committee also monitors the implemented suggestions. The Company has, in all material respects, adequate internal financial control over financial reporting and such controls are operating effectively.

9. HUMAN RESOURCES

The Company considers its employees to be an integral part of its growth and success. During FY 2025-26, the Company continued to focus on developing a capable, committed and performance-oriented workforce aligned with its business objectives. The Human Resources function emphasised employee engagement, skill development, capability building and strengthening the internal talent base. The Company also continued to provide a supportive and conducive work environment and undertook appropriate training and development initiatives to enhance employees knowledge, skills and overall effectiveness. The Company remains committed to nurturing talent and fostering a culture of teamwork, continuous learning and professional growth.

Compusolution Ltd.

10. ADDITIONAL DISCLOSURE- RATIOS

Ratio	Current year	Previous year	% of Variance	Reason for Variance (more than 25%)
Current Ratio (times)	1.54	3.62	-57.29%	Due to decrease in current assets during the year.
Debt Equity Ratio (times)	0.42	0.36	15.90%	Due to repayment of borrowings during the year.
Return on equity Ratio (times)	0.14	0.15	-6.79%	Due to increase in shareholders equity during the year
Trade Receivables Turnover Ratio (times)	6.34	3.58	76.91%	Due to increase in revenue during the year.
Trade Payable Turnover Ratio (times)	4.71	3.79	24.22%	Due to increase in purchases during the year
Net Capital Turnover Ratio (times)	3.33	1.03	224.21%	Due to increase in revenue during the year.
Net Profit Ratio (times)	0.18	0.18	-1.85%	NA
Return on Capital Employed (percentage)	0.20	0.19	5.17%	NA

*Ratios to the extent applicable to the Company has been disclosed

11. CAUTIONARY

Statements in this report pertaining to the Companys objectives, projections, estimates, exceptions and predictions are forward-looking statements subject to the applicable laws and regulations. These statements may be subject to certain risks and uncertainties. Important factors that could make a difference to the Companys operations include changes in Government regulations and tax regime, economic developments within India and abroad, financial markets, etc. The Company assumes no responsibility in respect of forward-looking statements that may be revised or modified in future on the basis of subsequent developments, information or events.

The financial statements are prepared in accordance with the Accounting Standards notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The management of the Company has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect a true and fair manner, the state of affairs and profit / loss for the year. The narrative on our financial condition and result of operations should be read together with the notes to the financial statements included in the annual report.