Micropro Software Solutions Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Company Management is pleased to present before the members of the Company, the Management Discussion & Analysis Report ("MDAR") of the Companys business for the financial year 2024-2025.

Management Discussion and Analysis Report for the year under review giving detailed analysis of the Companys operations, segment-wise performance etc., as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given herein below and forms part of this report.

OUTLOOK

With a legacy of over three decades, MICROPRO has consistently delivered successful IT projects across medium and large enterprises. Backed by a team of skilled IT professionals, we serve a robust client base of over 4,000 customers in India and the UAE. We empower our clients to craft and implement effective digital transformation strategies.

Our vision is to evolve into a globally respected organization that delivers best-in-class business solutions through advanced technology, driven by highly competent professionals. Our actions are guided by a deep-rooted value system built on Client Value, Leadership by Example, Integrity and Transparency, Fairness, and Excellence.

Our strategic objective is to develop a resilient and sustainable enterprise that continues to align with our clients evolving priorities, creates rewarding career opportunities for our employees, delivers consistent value to our investors, and makes meaningful contributions to the communities in which we operate.

Looking ahead, the Company is committed to leveraging its deep domain expertise to scale its its solutions in the healthcare IT segment and strengthen recurring revenue streams. With flagship solutions like HospyCare (next-generation Hospital Information Management System) and PharmaZip and other Strategic projects, we aim to expand our share in the healthcare IT segment as well as in other key sectors..

Our long-term strategic priorities include:

• Driving product innovation and modernization

• Strengthening our presence in global markets

• Deepening engagement with Government and Public Sector Units (PSUs)

• Integrating AI, ML into our core product offerings

GLOBAL ECONOMIC TRAJECTORY:

The global economy in 2024 continued to face significant challenges and opportunities shaped by various economic, geopolitical, and policy-driven factors. Global GDP growth is expected to moderate, with a growth rate of 3.3% according to the ‘World Economic Outlook published by International Monetary Fund (IMF). Growth varies across regions, with advanced economies experiencing slower expansion, while emerging markets, particularly in Asia, maintain relatively stronger growth momentum.

Geopolitical instability, notably the ongoing conflict between Russia and Ukraine, disruptions in global supply chains, and trade tensions between major economies like the U.S. and China, continue to impact global economic stability. Additionally, climate change policies and shifting regulatory landscapes influence investment decisions across industries.

Global inflation is improving, projected at 5.7% in 2024, down from 6.7% in 2023. Advanced economies are expected to reach this target faster than emerging markets and developing economies, where the decrease may be slower. Inflation in advanced economies should average 2.6% in 2024, likely reaching target levels by late 2025. Emerging markets will see a slower, though positive, trend.

The Eurozone, however, saw slower growth of 0.9%, including a slight decline in Germany. Emerging markets, especially in Asia, maintained stronger growth, reaching 5.3% overall, driven by technology and infrastructure investment. Chinas economy expanded by 5.0%, helped by government policies and a recovering property market

The global economy is expected to grow steadily, with a projected 2.8% expansion in 2025 and 3.0% in 2026. This outlook is supported by strong performances from the United States and major emerging economies.

Global disinflation continues, though some regions stagnate due to high inflation. Global inflation is projected to fall to 4.4% in 2025 and 3.5% in 2026, with advanced economies reaching targets first. Monetary policies remain divergent.

OVERVIEW OF INDIAS ECONOMIC TRAJECTORY AND GROWTH PILLARS:

Indias economy continues to demonstrate resilience in face of global challenges and steady expansion based on its intrinsic strengths, maintaining its position as the fastest-growing major economy. The real GDP is estimated at 6.5% in FY 2024-25 according to the Second Advance Estimates, following an impressive 9.2% growth in FY 2023-24. This sustained momentum reflects the countrys strong economic fundamentals, policy support, growing services sector and domestic demand, reinforcing confidence in Indias long-term growth prospects. The Governments strategic reforms, substantial investments in both physical and digital infrastructure, and initiatives such as Make in India and the Production-Linked Incentive (PLI) scheme have been instrumental in enhancing the countrys growth trajectory and self-reliance.

India is now the worlds fifth-largest economy by nominal GDP and third-largest by Purchasing Power parity (PPP). The government aims for a $5 trillion economy by FY2027-28 and $30 trillion by 2047, driven by infrastructure investment, reforms, and technology adoption. Reflecting this commitment, the budget allocated for capital investment in the forthcoming financial year (202526) has risen to Rs. 11.21 lakh crore, which accounts for 3.1% of GDP. According to industry reports, the global IT services market was valued at approximately USD 1.3 trillion, with strong demand across BFSI, healthcare, retail, and public sectors. Generative AI and process automation were key themes driving innovation and transformation in business models.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Fiscal 2025 unfolded against a backdrop of heightened uncertainty, shaped by fluctuating interest rates, geopolitical tensions, and election activities across key global markets. These external factors coincided with a period of structural transformation within the technology services industry. The global economy continued to face headwinds, with rising protectionist policies disrupting trade dynamics and contributing to an overall sense of instability. Persistent inflation and elevated interest rates further dampened consumer confidence and curtailed discretionary spending.

The Indian Information Technology (IT) industry continues to be a cornerstone of economic growth and technological innovation, playing a pivotal role in digitizing core sectors of the economy. Within this dynamic landscape, the healthcare and pharmaceutical software segment has emerged as one of the fastest-growing verticals, driven by the increasing adoption of digital health technologies, regulatory compliance requirements, and demand for integrated, scalable, and cloud- based healthcare IT solutions. The Government of Indias thrust on initiatives such as Ayushman Bharat Digital Mission (ABDM), the National Digital Health Blueprint (NDHB), and increasing investments in healthcare infrastructure have accelerated the need for Electronic Health Records (EHR), Hospital Information Management Systems (HIMS). Similarly, the pharmaceutical sector is witnessing a strong digital transformation push to improve supply chain efficiency, ensure regulatory compliance, and leverage real-time analytics.

Internationally, the demand for interoperable healthcare solutions is rising, supported by global efforts to enhance data sharing, patient engagement, and cost-effective care delivery models. The UAE, African nations, and Southeast Asia, in particular, are adopting healthcare digitization at an unprecedented pace, presenting export opportunities for Indian IT players with proven domain expertise.

The Company, leveraging over three decades of experience in developing and implementing healthcare and pharma software solutions, is well-positioned to benefit from these industry trends. With strong regulatory tailwinds, increasing digital penetration, and rising expectations for patientcentric and data-driven solutions, the industry outlook remains optimistic. Companies offering agile, scalable, and secure solutions with strong customer support are expected to gain significant competitive advantage. In this evolving ecosystem, the Company has strategically positioned itself by offering domain-specific solutions, including pharmacy distribution management, hospital management systems, ERP and strategic public sector projects.

OPPORTUNITIES AND THREATS:

OPPORTUNITIES:

The growing emphasis on digital healthcare transformation, both in India and internationally, presents significant opportunities for the Company. Government-led initiatives such as the Ayushman Bharat Digital Mission (ABDM), increased public-private partnerships, and greater regulatory push for digital recordkeeping have created a favorable environment for the adoption of healthcare IT solutions. Similarly, the pharma sector is rapidly embracing digital tools to enhance supply chain transparency, ensure real-time compliance, and optimize distribution channels. The rising demand for cloud-based platforms provides a strong growth trajectory for the Companys products like HospyCare and PharmaZip, especially in emerging markets such as the Middle East, Africa, and Southeast Asia.

THREATS:

Despite the positive outlook, the Company faces certain challenges. Rapid technological changes require continuous innovation and investment in R&D. Data privacy regulations and cybersecurity risks are becoming increasingly stringent, demanding robust compliance frameworks. Competition from both domestic and global players, including new-age tech startups, may lead to pricing pressures and require differentiation through superior service and value delivery. Rapid advancements in technology require continuous upskilling and adaptation. Companies that fail to keep pace with technological changes risk becoming obsolete. Despite improvements, there are still infrastructure challenges in certain regions of India, such as inconsistent power supply and internet connectivity. These issues can affect the efficiency and reliability of IT services. The Company remains focused on risk mitigation through diversification, process optimization, and product innovation.

RISKS AND CONCERNS

To manage risks with the ultimate goal of maximising stakeholders value, the company has an integrated and organised enterprise risk management process. At Micropro, the risk management process typically entails risk identification, assessment, prevention, prioritisation, and monitoring. With the aid of this technique, the Company is better able to take informed decisions about the creation of opportunities, effectively manage risks to acceptable levels, and enhance confidence in the accomplishment of its desired goals and objectives.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

We manage regulatory compliance by monitoring and evaluating our internal controls and ensuring that we are in compliance with all relevant statutory and regulatory requirements. There can be no assurance that deficiencies in our filings will not arise in the future, or that we will be able to implement, or continue to maintain, adequate measures to rectify or mitigate any deficiencies in our internal control.

The Company implemented suitable controls to ensure its operational, compliance, and reporting objectives. The Company has adequate policies and procedures in place for its current size as well as its future growing needs. These policies and procedures play a pivotal role in the deployment of the internal controls. They are regularly reviewed to ensure both relevance and comprehensiveness and compliance is ingrained into the Management review process.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

During the year under review the Company has earned standalone total revenue (including other income) of Rs. 2,208.83 lakhs for the year 2025 as compared to Rs. 2,228.31 lakhs for the financial year 2024. loss after Tax at Rs. 104.69 lakhs in the financial year 2025 as compared to profit of Rs. 310.87 lakhs for the financial year 2024.

The consolidated total revenue (including other income) of Rs. 2,488.16 lakhs for the year 2025 as compared to Rs. 2,228.31 lakhs for the financial year 2024. loss after Tax at Rs. 184.74 lakhs in the financial year 2025 as compared to profit of Rs. 310.87 lakhs for the financial year 2024.

(Amount in Rs. Lakhs except EPS)

Description	Standalone 31.03.2025	Standalone 31.03.2024	Consolidated 31.03.2025	Consolidated 31.03.2024
Revenue from operations	2,032.58	2,148.25	2311.91	2,148.25
Other Income	176.25	80.06	176.25	80.06
Total Income	2,208.83	2,228.31	2,488.16	2,228.31
Purchase of Stock- in- trade	377.92	228.73	641.33	228.73
Purchases of Services	519.77	202.99	519.77	202.99
Changes in Inventories of Stock-in-trade	39.07	-7.10	39.07	-7.10
Employee benefits expense	926.22	832.69	943.32	832.69
Finance costs	30.27	70.49	30.45	70.49
Depreciation and amortisation expense	204.71	90.51	206.12	90.51
Other expenses	228.65	365.63	305.93	365.63
Profit before tax	(117.78)	444.38	(197.83)	444.38
Less: Tax Expenses	(13.09)	133.51	(13.09)	133.51
Profit / (Loss) for the year ended	(104.69)	310.87	(184.74)	310.87
Earning per equity share (Basic and Diluted)	(0.73)	2.61	(1.29)	2.61

SEGMENT-WISE PERFORMANCE:

IT Services: The total revenue from IT Services during the year is Rs. 1580.63 Lacs as compared to Rs. 1,847.88 Lacs of the previous year.

Trading: The total revenue from Trading during the year is Rs. 451.95 Lacs as compared to Rs. 300.37 Lacs of the previous year.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

S. No. Ratio	Numerator	Denominator	FY 2024 25	FY 2023 24	Variance in %	Reason for Variance if more than 25%
1 Current Ratio	Current Assets	Current Liabilities	6.22	6.05	2.81%
2 Debt- Equity Ratio	Total Debt	Shareholders Funds	0.00	0.08	-100%	Debt repaid fully
3 Debt Service Coverage Ratio	Earnings for debt service = Profit after tax + Depreciation + Interest	Debt Service = Interest + Principal repayments of term loans	4.30	6.69	-35.70%	Due to loss incurred during the year.
4 Return on Equity Ratio	Profit after tax	Average Shareholders Funds	-0.02	0.10	122.31%	Due to loss incurred during the year.
5 Inventory Turnover Ratio	Net Sales (excl. commission and support services)	Average Inventory	18.00	9.94	81.10	Inventory decreased substantially
6 Trade Receivables Turnover Ratio	Net Sales	Average Trade Receivables	1.44	1.57	8.57%	-
7 Trade Payables Turnover Ratio	Net Purchases	Average Trade Payables	4.43	4.98	11.07%	-
8 Net Capital Turnover Ratio	Net Sales	Working Capital = Current Assets - Current Liabilities (excl. current maturities of long term debt)	0.73	0.60	22.41%	-
9 Net Profit Ratio	Profit before tax	Net Sales	-0.06	0.21	-128%	There is loss as compared to profit in the previous year.
10 Return on Capital Employed	Earning before interest and tax	Capital Employed = Net worth + Total debt	-0.02	0.10	-118.8%	There is loss as compared to profit in the previous year..
11 Return on Investment	Profit before tax	Average Total Assets	-0.02	0.11	-299%	There is loss as compared to profit in the previous year & Average Total Assets have increased as compared to previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The Company has a committed and dedicated workforce with high enthusiasm. The Company maintained cordial and harmonious relations with its employees throughout the year. Various employee engagement initiatives and training programs were undertaken to enhance productivity, skill development, and overall job satisfaction.

As on March 31, 2025, the total number of employees on the rolls of the Company stood at 135. The Company continues to focus on attracting and retaining talent, and is committed to fostering a positive and inclusive work environment to support its long-term growth strategy.