Matrix Geo Solutions Ltd Management Discussions

The environment, the industry, and the year

Compliance note. Management Discussion and Analysis is mandatory for the Company under Regulation 34(2)(e) of the SEBI Listing Obligations and Disclosure Requirements Regulations, with content set by Schedule V Part B. The exemption at Regulation 15(2) for entities listed on the SME platform covers Regulations 17 to 27 and Schedule V Parts C, D and E. The MD&A has been structured with reference to the applicable requirements of Regulation 34(2)(e) read with Schedule V Part B.

Geospatial services in India sit downstream of public infrastructure capital expenditure. When capital allocation rises, survey demand rises ahead of construction, because the survey precedes the detailed project report and the detailed project report precedes the tender.

Three things shaped the operating environment in FY2025-26: capital allocation, a set of regulatory mandates that replaced discretionary survey with compulsory survey, and positioning infrastructure that lowered the cost of achieving survey-grade accuracy at scale. The second of those is the most consequential. Discretionary survey is deferred when budgets tighten. Compliance survey is not, and it recurs on a fixed cycle.

Positioning infrastructure changed alongside the rules. The Survey of India continuously operating reference station network now comprises 1,034 permanent stations providing network corrections at approximately three centimetres, which lowers the cost of achieving survey-grade accuracy across large areas and expands the geography over which high-accuracy work is economic.

The Company operates in a single reportable business segment. Sector analysis of revenue is presented in the corporate overview and is not repeated here. The material movements were mining, which rose from 12.08% to 28.17% of revenue on the Rule 34A compliance cycle, roads at 167.9% growth, and power at a contraction of 28.5% on project timing.

Revenue from operations grew 81.50% to Rs 40.10 Crore. EBITDA rose 62.0% to Rs 13.25 Crore at a margin of 33.04%. Profit After Tax rose 73.21% to Rs 10.06 Crore at a margin of 25.08%. Basic earnings per share were Rs 7.95 against Rs 5.42. EBITDA margin moved from 37.03% to 33.04%. The movement is a cost-mix effect. Other operating expenses rose from Rs 2.09 Crore to Rs 6.41 Crore as field mobilisation, deployment and subcontracted delivery scaled with volume, while employee benefits expense rose 9.2%.

Schedule V Part B(i) requires disclosure of changes of 25 per cent or more against the immediately previous financial year in the ratios listed below, with detailed explanation.

Return on Net Worth was 23.06% in FY2025-26 against 34.89% in FY2024-25, a decline of 33.9%. The decline is a function of the denominator. Net worth increased by Rs 40.20 Crore on the initial public offering completed on 30 September 2025, with the proceeds arriving in the second half of the year and therefore carried for part of the period against a full year of earnings. Profit After Tax grew 73.21% over the same period.

The order book stood at Rs 12.12 Crore at 31 March 2026, entirely signed. Unbilled backlog reduced from Rs 22.9 Crore to Rs 12.1 Crore over the year, which is the arithmetic behind 81.53% revenue growth in a year when the closing order book fell: work converted to revenue faster than it was booked into backlog.

Trade receivables stood at Rs 37.65 Crore against revenue from operations of Rs 40.10 Crore. The domestic collection cycle runs 180 to 200 days, which is the prevailing condition for consulting and survey work executed for government and public sector clients, where payment is released against verified milestones and departmental sanction rather than against invoice date.

International contracts settle in 15 to 45 days. International revenue rose from 6.25% to 28.78% of the total during the year, so each rupee of revenue moved offshore converts to cash roughly four times faster than its domestic equivalent.

Rs 19.08 Crore of the Rs 40.20 Crore raised had been deployed by 31 March 2026. The dominant application was working capital, which funds earnest money deposits and performance guarantees required at bid stage and released only on completion. Equipment procurement has been deliberately paced against a hardware cycle in rapid transition. The undeployed balance of Rs 21.12 Crore is held in fixed deposit.

Rs 19.08 Crore of the Rs 40.20 Crore raised had been deployed by 31 March 2026. The dominant application was working capital, which funds earnest money deposits and performance guarantees required at bid stage and released only on completion. Equipment procurement has been deliberately paced against a hardware cycle in rapid transition. The undeployed balance of Rs 21.12 Crore is held in fixed deposit.

The Company is targeting operating revenue of Rs 65 Crore for FY2026-27 at Profit After Tax margins of 20 to 25 per cent. External licensing of the Companys four software platforms begins in the same year. Delivery against this depends on public capital allocation holding, on conversion of the bid pipeline at or near historical tender win rates, and on receivable cycles not extending beyond current experience. This paragraph and the targets above are forward-looking statements and are subject to the cautionary statement below.

The Company has established an adequate system of internal controls, commensurate with the size, scale and complexity of its operations. These controls are designed to ensure the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The internal control systems are reviewed periodically by the management to assess their effectiveness and adequacy. Based on such reviews and the observations of the statutory/internal auditors, the management believes that the Companys internal control systems were adequate and operating effectively during the year under review. No material weaknesses in the internal controls were observed that would require significant corrective action.

Headcount of 104 at 31 March 2026 is confirmed and growth of 30.0% over two years is confirmed.

Statements in this Management Discussion and Analysis describing the Companys objectives, estimates, expectations and projections may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These are based on assumptions and expectations of future events, and actual results may differ materially from those expressed or implied.

Factors that could cause a difference include government capital allocation and public sector payment cycles, regulatory approvals and airspace restrictions, weather and seasonality in field operations, the pace of technology change in acquisition hardware, tender outcomes, and the Companys ability to convert its software platforms into licensed revenue. The Company undertakes no obligation to update any forward-looking statement.