Megri Soft Ltd Management Discussions

The Management Discussion and Analysis Report, as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report.

>- Overview

Megri Soft Limited ("the Company”) is a listed IT/ITES services and consulting company offering a wide range of digital solutions and web-based products designed to address the evolving needs of the global digital economy. Headquartered in Chandigarh, the Company also operates an IT facility in Mohali and serves clients in India and international markets. As the Company moves forward, it remains committed to enhancing its service portfolio, adopting emerging technologies and strengthening its position in the IT/ITES and digital services sector.

Our service portfolio spans across web design and development, e-commerce solutions, SaaS platforms, mobile app development for iOS and Android, web hosting, domain registration, and advanced web programming. With a strong focus on digital transformation, we also specialize in artificial intelligence (AI) models and applications, accounting outsourcing, and the development of proprietary web tools and software solutions tailored to diverse industry requirements.

In the field of digital marketing, Megri Soft Limited continues to build on its expertise in search engine optimization (SEO), pay-per-click (PPC) advertising, social media management, link building, and comprehensive online reputation management. These services have enabled our clients to expand their digital footprint, attract targeted audiences, and enhance business outcomes.

During the year under review, the Company has actively expanded its IT/ITES service offerings, supported by the rising demand for digital adoption across industries in India and globally. The proliferation of smartphones, tablets, and high-speed connectivity, along with growing reliance on technology-enabled business solutions, has provided significant growth opportunities for our services.

In addition to client services, the Company continues to invest in and operate a portfolio of Indian and international web portals and vortals on varied subjects, strengthening its presence as a digital content and service provider.

>- Industry Structure and Development

The global Information Technology and IT-enabled Services (IT/ITES) industry continues to support digital transformation and innovation across economies and businesses. The industry is characterised by rapid technological advancements, increasing enterprise adoption of cloud computing, mobile technologies and artificial intelligence, and growing reliance on digital platforms to improve operational efficiency and customer engagement.

India remains one of the worlds leading destinations for IT/ITES services, supported by a skilled talent pool, competitive costs and an established record of delivering technology solutions. The Government of Indias focus on digitalisation, expansion of digital infrastructure and promotion of innovation and startups continues to support the industrys development. Rising internet penetration, increasing smartphone usage and the adoption of 5G technology are creating opportunities for businesses to connect with customers and expand their operations.

The digital services segment, covering web development, e-commerce platforms, SaaS solutions, digital marketing and AI-enabled applications, continues to expand. Enterprises in India and international markets are investing in their online presence, data-driven marketing and intelligent automation to remain competitive. This has increased demand for services such as search engine optimisation, social media management, e-commerce enablement and cloud-based solutions, areas in which the Company operates.

At the same time, the industry is undergoing structural changes, with an increased focus on cybersecurity, compliance with data-protection and privacy regulations, and sustainable business practices. Outsourcing models are also evolving, as clients increasingly seek strategic technology partners that can provide innovation, scalability and measurable business outcomes in addition to cost efficiencies.

Overall, the IT/ITES industry remains well positioned for continued growth, supported by domestic demand, global outsourcing opportunities, government initiatives and the ongoing digitalisation of businesses. This environment presents both opportunities and challenges for the Company and requires continuous innovation, operational agility and a clear understanding of client requirements across different markets.

>- Opportunities and Threats

Opportunities

Megri Soft Limited is well positioned to capitalize on the expanding global IT/ITES and digital services market. With its strong technological expertise and service portfolio spanning web development, digital marketing, SaaS, e-commerce, and AI solutions, the Company is prepared to address both domestic and international demand for next-generation digital transformation.

1. Expanding IT Export Market

Indias position as a global IT outsourcing hub provides significant opportunities. Megri Soft Limited, with its track record of delivering quality solutions, is well placed to expand its footprint in international markets.

2. Skilled and Committed Workforce

The Companys pool of highly qualified, English-speaking professionals remains a cornerstone of growth. Their technical competence, adaptability, and commitment to work ethics ensure high standards of delivery, innovation, and client satisfaction.

3. 24x7 Service Advantage

Leveraging its strategic location and time zone advantage, the Company offers round-the-clock services, enabling faster turnaround times and providing added value to global clients. This delivery model strengthens client trust and long-term partnerships.

4. Digital Marketing and Online Visibility

With businesses increasingly focusing on online branding and performance-driven marketing, demand for SEO, PPC, and social media services continues to grow. Megri Soft Limiteds expertise in digital marketing positions it strongly in this high-growth area.

5. E-commerce and Mobile Application Growth

The surge in online shopping, mobile-first customer engagement, and digital payments creates opportunities for customized e-commerce solutions and mobile app development.

6. Artificial Intelligence and SaaS Adoption

The increasing reliance on AI-driven tools, automation, and SaaS platforms provides new avenues for service expansion. Megri Soft Limiteds early adoption of AI and SaaS offerings allows it to serve clients seeking intelligent and scalable solutions.

7. Government and Industry Support

Initiatives such as Digital India, 5G rollout, and policies promoting startups and innovation provide a favorable environment for growth. These reforms further enhance opportunities for IT/ITES providers like Megri Soft Limited.

By combining its technological expertise, strong workforce, global delivery capability, and ability to adapt to emerging technologies, the Company is well placed to sustain growth and deliver long-term value to its stakeholders.

Threats

While the IT/ITES and digital services industry offers vast potential, it also presents certain risks and challenges that may impact growth and operations of Megri Soft Limited. The key threats are as follows:

1. Intense Competition

The IT/ITES sector is highly competitive, with both domestic and international players offering similar services. Price pressures and the constant need to differentiate through innovation could affect profitability and market share.

2. Rapid Technological Changes

The industry is evolving rapidly with emerging technologies such as artificial intelligence, blockchain and cloud automation. Any inability to keep pace with technological developments or make appropriate investments in innovation and workforce capabilities may affect the Companys competitiveness.

3. Cybersecurity and Data Privacy Risks

Increasing reliance on digital platforms brings heightened risks of cyberattacks, data breaches, and compliance requirements with global regulations (such as GDPR and data protection laws in multiple jurisdictions). Failure to safeguard client data could impact reputation and client trust.

4. Talent Retention and Rising Costs

The Companys growth depends significantly on its skilled workforce. Rising demand for qualified IT professionals has led to increased attrition and higher employee costs, which may impact margins and resource continuity.

5. Regulatory and Policy Changes

Changes in domestic and international tax laws, export regulations, visa restrictions, or compliance frameworks can affect business operations, particularly in the IT export segment.

6. Global Economic Uncertainty

Slowdowns in key international markets, currency fluctuations, inflationary pressures, and geopolitical risks may reduce client spending on IT projects and outsourcing, impacting revenues.

7. Client Concentration and Dependency

Dependence on a limited number of clients or geographical markets may expose the Company to revenue volatility arising from project delays, reductions in client budgets or changes in business priorities. The Company seeks to mitigate this risk by diversifying its client base across industries and markets.

Mitigation Measures

<p >Megri Soft Limited actively monitors industry developments, regulatory changes, and emerging technologies to remain agile and adaptive. The Company invests in continuous upskilling of its workforce, adoption of new technologies such as AI and SaaS, and enhancement of cybersecurity frameworks to address evolving risks. By diversifying its client base across geographies and industry sectors, the Company reduces dependency on a limited set of markets. Further, robust governance practices, compliance systems, and a strong focus on innovation help mitigate risks arising from competition, regulatory changes, and global uncertainties.

>- Outlook

Megri Soft Limited is positioned for sustainable growth, supported by its strategic focus on expanding international operations and strengthening its digital services portfolio. The Company has established a presence in key markets and continues to deepen its engagement across Europe, the United Kingdom, the United States, Canada, Australia and New Zealand.

To support its international operations, the Company has a subsidiary in the United Kingdom, which supports its business activities in the UK and European markets. The subsidiary enables Megri Soft Limited to deliver localised and AI-driven digital solutions, including search engine optimisation, IT consulting and performance marketing, tailored to the requirements of European businesses. Its presence in the region enables the Company to improve client engagement, enhance responsiveness and strengthen long-term business relationships.

In the United Kingdom, where the Company has developed its business in SEO and IT services, it continues to broaden its service offerings in response to the evolving requirements of the digital economy. The United States and Canada also remain important markets due to their advanced adoption of technology and demand for digital transformation services. The Company intends to leverage its capabilities in digital marketing, SaaS and IT-enabled services to address the changing requirements of clients in these markets.

The Company also continues to explore growth opportunities in Australia and New Zealand. Increasing digital adoption and the evolving business environment in these markets provide opportunities for the delivery of customised e-commerce, SaaS and digital marketing solutions.

Looking ahead, Megri Soft Limited will continue to focus on innovation, scalability and client-centric service delivery. By diversifying geographically and expanding its technology-driven offerings, the Company remains committed to building a resilient global presence, enhancing shareholder value and strengthening its position as a provider of IT/ITES and digital solutions.

>- Risks and Concerns

Megri Soft Limited operates in a rapidly evolving IT/ITES environment and is exposed to various external and internal risks. Key concerns include dependence on international markets, talent retention, regulatory and compliance requirements across multiple jurisdictions, foreign currency fluctuations, cybersecurity threats and changes in client budgets, any of which may affect the Companys operations and financial performance.

The Company monitors these risks on an ongoing basis and seeks to mitigate them by diversifying its client base, investing in employee development, strengthening data security and maintaining appropriate compliance systems. Although risks cannot be eliminated entirely, the Company continues to review and strengthen its risk-management measures to support business continuity and protect stakeholder interests.

>- Discussion on Financial Performance

The financial statements of the Company have been prepared in accordance with the applicable provisions of the Companies Act, 2013, the rules made thereunder, the Indian Accounting Standards (Ind AS) and the applicable requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Management accepts responsibility for the integrity, accuracy and objectivity of the financial statements and for the estimates and judgements used in their preparation. Such estimates and assumptions have been made on a prudent and reasonable basis to ensure that the financial statements present a true and fair view of the Companys financial position, financial performance and cash flows for the year.

During the year under review, the Company maintained a sound operational and financial position. Through prudent financial management and efficient operations, the Company generated adequate internal resources to support its business requirements and growth initiatives without reliance on external borrowings.

The Company continued to build on its capabilities as a provider of IT/ITES services, search engine optimisation, digital marketing, artificial intelligence solutions, SaaS platforms and web development services. Its focus on expanding service offerings, enhancing digital capabilities and improving operational efficiency enabled it to maintain stable performance in a competitive business environment.

Looking ahead, the Company intends to strengthen its financial and operational position by investing in innovation, expanding its market reach and leveraging the capabilities of its workforce. Combined with prudent financial management, these initiatives are expected to support sustainable growth and long-term value creation for shareholders and other stakeholders.

>- Internal Control Systems and Their Adequacy

The Company has established an internal control framework designed to safeguard its assets, ensure the accuracy and reliability of financial reporting, promote operational efficiency and ensure compliance with applicable laws and regulations. The internal control systems are commensurate with the size, nature and complexity of the Companys operations and are reviewed periodically to assess their adequacy and effectiveness.

The internal control framework includes documented policies, defined levels of authority and standard operating procedures intended to promote effective decision-making and accountability. Periodic reviews and internal audits are conducted to identify risks, evaluate the effectiveness of controls and recommend improvements wherever necessary.

The Audit Committee, in consultation with the Statutory Auditors and Internal Auditors, reviews the adequacy and effectiveness of the Companys internal control systems. The observations and recommendations arising from the audits are placed before the Management and the Audit Committee, and necessary corrective measures are undertaken.

Based on the reviews conducted during the year, the Board is of the opinion that the Companys internal control systems, including internal financial controls over financial reporting, were adequate and operating effectively and were commensurate with the nature and scale of its operations.

>- Material Developments in Human Resources and Environmental Initiatives

Human resources remain central to Megri Soft Limiteds growth strategy. The Company recognises that its performance is driven by the talent, skills and dedication of its workforce. Accordingly, it continues to promote a work environment that supports innovation, learning and professional development. The Company had 26 permanent employees on its rolls as at March 31, 2026.

During the year under review, the Company undertook initiatives to strengthen employee capabilities, including training and skill-development programmes covering emerging technologies, artificial intelligence, digital marketing, SaaS and cloud solutions. Employee engagement and well-being remained a priority, with initiatives aimed at supporting work-life balance, inclusivity, collaboration and open communication.

The Company is also conscious of its responsibility towards the environment and continues to adopt measures aimed at conserving resources, reducing its environmental impact and encouraging digital-first practices to minimise paper consumption. Employees are encouraged to practise energy conservation and responsible waste management.

The Board acknowledges the importance of the Companys employees and its environmental responsibilities and remains committed to strengthening its initiatives in these areas in alignment with its long-term objectives.

Cautionary / Forward-Looking Statement

This Management Discussion and Analysis contains certain forward-looking statements relating to the Companys business strategies, growth prospects, future performance and industry outlook. These statements are based on the Managements current expectations, estimates, projections and assumptions and are subject to known and unknown risks and uncertainties. Actual results, performance or achievements may differ materially from those expressed or implied in such statements.

Factors that may affect the Companys performance include changes in economic conditions, demand for IT/ITES and digital services, technological developments, competitive pressures, regulatory and policy changes, cybersecurity risks, availability and retention of skilled personnel, foreign currency fluctuations and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. These statements do not constitute a guarantee of future performance and should be read in conjunction with the Companys audited financial statements and the accompanying notes.