Moschip Technologies Ltd Management Discussions

GLOBAL ECONOMY

The global economy demonstrated significant resilience in 2024, expanding by 3.3% despite persistent inflationary pressures, tighter monetary policy, and widespread geopolitical instability, as per the International Monetary Fund (IMF) World Economic Outlook, April 2025. Developed nations benefitted from resilient labour markets and steady demand for services, while countries like India continued to anchor growth among emerging economies.

Looking ahead, the IMF forecasts a moderation in global GDP growth to 2.8% in 2025 before showing a modest recovery to 3.0% in 2026. Growth in advanced economies is expected to decelerate further, while emerging and developing markets—particularly in Asia—are projected to maintain momentum at 3.7%.

Annual GDP growth in the US is projected to slow from its strong recent pace, to be 2.2% in 2025 and 1.6% in 2026. Euro area GDP growth is projected to be 1.0% in 2025 and 1.2% in 2026, as heightened uncertainty keeps growth subdued. Growth in China is projected to slow from 4.8% this year to 4.4% in 2026, as reported by the Organisation for Economic Co-operation and Development (OECD)s March 2025 outlook.

However, global risks remain high due to rising protectionism, regional conflicts, and fragmented trade channels. Inflation trends have begun to stabilise, though unevenly. Advanced economies may see inflation hover around 2.5% in 2025, while developing nations could see it ease to 5.5%, according to the OECD. Core inflation especially in services—continues to challenge central banks, many of which are still treading cautiously.

INDIAN ECONOMY

India maintained its position as the worlds fastest-growing major economy in FY 2025, with GDP projected at 6.5% as per the National Statistical Office (NSO), Second Advance Estimates, February 2025. This growth was driven by strong manufacturing output, services expansion, and continued investment in infrastructure and digital systems. Despite global headwinds, Indias macroeconomic fundamentals remain stable. Inflation is within the central banks tolerance band, the fiscal deficit is on a consolidation path, and foreign exchange reserves remain robust. Importantly, India has benefitted from its diversified trade relationships, increased domestic manufacturing under the Atmanirbhar Bharat initiative, and growing participation in global value chains.

Looking ahead to FY 2026, the Reserve Bank of India (RBI)s April 2025 Monetary Statement has projected real GDP growth at 6.5%. The growth is expected due to stable inflation, rising incomes, and a normal monsoon, which will support consumption in both rural and urban areas. Government policy support—such as the Production-Linked Incentive (PLI) scheme, Design Linked Incentive (DLI) Scheme, and expanded digital services—will likely sustain Indias growth momentum even amid global uncertainty.

GLOBAL SEMICONDUCTOR INDUSTRY

The global semiconductor industry is experiencing significant growth, fuelled by emerging technologies like AI, 5G, and the Internet of Things (IoT), and also by increasing demand from consumer electronics, automotive, and cloud computing sectors. Key trends include supply chain resilience, advanced packaging, and the push for sustainability.

Key Drivers

Technological advancements:

5G: Driving demand for advanced chips in networking infrastructure and mobile devices.

AI: Accelerating the need for specialised chips (GPUs, TPUs, etc.) for machine learning, data analytics, and various AI applications like autonomous driving, healthcare, and finance.

IoT: Leading to increased demand for semiconductors in devices ranging from smart homes to industrial automation.

Expansion of data centres and cloud computing: Fuelling the demand for high-performance and energy-efficient semiconductors.

Electrification and autonomous driving in the automotive sector: Creating a need for advanced semiconductors for various features like ADAS, electric powertrains, and infotainment systems.

Government support and incentives: Favourable government policies and investments in key markets like the US and China are boosting domestic chip manufacturing and supply chain diversification.

Increased R&D and manufacturing investment: Semiconductor companies are investing heavily in research and development and expanding manufacturing capabilities to meet the growing demand.

Challenges and Considerations

Supply chain vulnerabilities: Geopolitical tensions and reliance on specific regions for manufacturing create risks of disruptions.

Talent shortages: The industry faces a shortage of skilled professionals in design and manufacturing.

Technological complexity and rising costs: Moving to smaller process nodes requires significant investments and poses challenges for smaller firms.

Sustainability: Semiconductor manufacturing is energy and resource-intensive, requiring focus on sustainable practices

INDIAN SEMICONDUCTOR INDUSTRY

Indias chip market poised to scale $110 billion by 2030

India is transforming from a consumer to a key manufacturer in the global semiconductor value chain, with the chip market expected to reach $100-110 Billion by 2030. This transformation is driven by strategic initiatives by the government, including the India Semiconductor Mission (ISM), the SEMICON India Programme, and global partnerships like iCET. The Indian semiconductor market was estimated at ~$38 Billion in 2023, $45-50 Billion in 2024-2025, and is expected to reach $63 Billion by 2026 and $100-110 billion by 2030.

The government has initiated a programme to train 85,000 engineers in advanced semiconductor and electronics manufacturing. Madhya Pradesh has commenced its first IT campus, backed by an investment of 150 Crore over the next six years, to support end-to-end manufacturing of IT hardware and electronic products.

Indias market is expected to occupy a substantial portion of the global semiconductor market, with India contributing to the three primary pillars of the semiconductor manufacturing supply chain: equipment, materials, and services.

Indias Role in the Global Semiconductor Landscape

India is emerging as a significant player in the global semiconductor industry, with projections for its market to exceed $100 Billion by 2030. This growth is supported by:

Government initiatives: Programmes like ISM and SEMICON India are providing financial support and incentives for the semiconductor ecosystem.

Growing domestic demand: Indias electronics production is booming, driven by a rising middle class and increasing adoption of electronic devices.

Strong design talent pool: India possesses a substantial base of skilled semiconductor design engineers.

Strategic partnerships: Collaborations with countries like the US and Singapore are strengthening Indias position in the global supply chain.

The India Semiconductor Mission

The India Semiconductor Mission (ISM) was approved by the Union Cabinet in December 2021. With an outlay of 76,000 Crore, the programme aims to provide financial support for investments in semiconductor fabrication, display manufacturing, and chip design to strengthen Indias integration into global electronics value chains. Envisioned to be led by global experts in the Semiconductor and Display industry, ISM aims to build a strong semiconductor and display ecosystem, positioning India as a global hub for electronics manufacturing and design, while serving as the nodal agency for the efficient and seamless implementation of semiconductor and display schemes.

Schemes under ISM

Semiconductor Fabs

The scheme for setting up semiconductor fabs in India shall extend fiscal support of up to 50% of the project cost on a pari passu basis to the approved applicants.

Display fabs

The scheme for setting up display fabs in India shall extend fiscal support of up to 50% of the project cost on a pari passu basis to the approved applicants.

Compound Semiconductor & ATMP

TheSchemeforsettingupofCompoundSemiconductors/ Silicon Photonics/Sensors (including MEMS) Fabs/ Discrete Semiconductors Fab and Semiconductor ATMP/OSAT facilities in India shall extend fiscal support of 50% of capital expenditure to Compound Semiconductors/ Silicon Photonics/Sensors (including MEMS) Fabs and Semiconductor Packaging (ATMP/OSAT) units.

Design Linked Incentive Scheme

The Design Linked Incentive Scheme aims to offer financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design(s) for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems and IP Cores and semiconductor-linked design(s) over a period of 5 years.

ISM is driven by the Indian government in collaboration with various industry associations, research organisations, and educational institutions. It operates under the guidance of the Ministry of Electronics and Information Technology (MeitY) and other relevant government bodies. ISM is crucial for strengthening Indias position in the semiconductor market, which is expected to reach $63 Billion by 2026. With these initiatives, India seeks to build a self-reliant electronics ecosystem, lessen its reliance on imports, and establish itself as a significant contributor to the global semiconductor supply chain.

Source: Ministry of Electronics and Information Technology (MeitY)

COMPANY OVERVIEW

MosChip Technologies Limited is a leading silicon and product engineering services company with over two decades of experience delivering end-to-end product design and development — from concept to complete systems. As a trusted partner for silicon, product, and AI/ ML engineering, we combine deep domain expertise with a global delivery model to help businesses accelerate innovation and transformation.

With a team of 1,400+ engineers and domain specialists across India and the US, our capabilities span ASIC and mixed-signal IP design, FPGA design, verification and validation, embedded systems, IoT solution design, digital systems, computer vision, and AI/ML integration. We work across industries including semiconductors, industrial and home automation, automotive, media and entertainment, consumer electronics, telecommunications, networking, data centres, and healthcare.

Headquartered in Hyderabad, India, and publicly traded, MosChip is committed to being the preferred technology partner throughout the entire product lifecycle, delivering comprehensive, best-in-class solutions on time that enable our clients to achieve their business and operational goals.

Some Major Areas of Development

Development of Indigenous HPC Processor Aum

Design, development and delivery of an HPC SoC based on 5nm technology to the Centre for Development of Advanced Computing (CDAC).

The design and development of a High-Performance Computing (HPC) Processor System on a Chip (SoC), based on Arm® architecture and TSMCs advanced 5nm technology node, represents a significant leap forward in semiconductor technology and high-performance computing capabilities. This project aims to create a state-of-the-art semiconductor device that integrates multiple advanced components onto a single chip, thereby advancing the frontiers of computing technology.

The HPC SoC will combine high-speed CPU cores, high-speed interface IPs, and high-bandwidth memory on a single chip, streamlining the computing architecture and improving system performance by reducing latency and improving data transfer speeds. This integration will enable efficient parallel processing, power for complex tasks, and rapid access to large datasets.

Market Impact and Opportunities: The HPC SoC is ideal for complex tasks like scientific simulations, artificial intelligence, and large-scale data processing. This will open significant opportunities in domestic and international markets.

Smart Energy Meter IC

A Smart Energy Meter IC is an advanced integrated circuit designed for precise and efficient measurement of energy consumption. It offers accurate data collection for various types of energy such as electricity, gas, or water. Equipped with real-time monitoring capabilities, it allows users to track their energy usage continuously, helping identify patterns and areas for potential savings. The IC also features built-in communication interfaces like Zigbee, Wi-Fi, or Bluetooth, enabling seamless data transfer to central systems or user devices for enhanced accessibility and analysis.

It supports load management to optimize energy use and integrates with smart grids for improved energy distribution. Security features such as encryption safeguard against tampering, while the ICs low power consumption contributes to overall energy efficiency. By integrating with smart home or building management systems, it provides a comprehensive solution for modern energy monitoring and management.

The Indian Ministry of Electronics and Information Technology (MeitY) has approved the Semiconductor Design Linked Incentive (DLI) scheme for the development of a smart energy meter IC for India and overseas markets. The DLI scheme aims to offset disabilities in the domestic semiconductor industry and strengthen the semiconductor chip design ecosystem. The Centre for Development of Advanced Computing (CDAC) is responsible for implementing the scheme as a Nodal Agency.

The Design Linked Incentive (DLI) Scheme aims to offer financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design(s) for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design(s).

Smart energy meter IC market is expected grow at 7% CAGR reaching ~60 million units in India and ~2 billion units in Overseas Global Market by 2028.

DLI is an excellent policy initiative by the Government of India that helps Indian companies build IP cores, SoCs, and Systems and develop world-class semiconductor products for domestic and overseas markets to realize the vision of an Atmanirbhar Bharat in the semiconductor industry.

MosChip DigitalSky GenAIoT™

MosChip DigitalSky GenAIoT™ is a first-of-its-kind, comprehensive digital solutions suite designed to fast-track the creation of connected, intelligent products. Built with modular, reusable architecture, it fuses IoT, EdgeAI, Generative AI, workflow automation, cloudification, security, and application modernisation into a unified accelerator suite. It dramatically reduces development complexity, shortens time to market, and enhances operational efficiency by providing pre-built components for device onboarding, analytics, and automation.

Tailored for industries such as smart homes, automotive, healthcare, manufacturing, energy, and consumer electronics, MosChip DigitalSky GenAIoT™ empowers enterprises with scalable, future-ready solutions. Its flexible, no-lock-in model combines cognitive intelligence, adaptive edge security, and unified orchestration, enabling enterprises to innovate across the entire product lifecycle from hardware to AI-driven insights and operations automation.

Other competitive strengths

Member of TSMCs Design Center Alliance (DCA) enabling us to access cutting-edge technology that enhances our ability to offer turnkey ASIC solutions across the globe.

MosChip Academy of Silicon Systems & Technologies is a dedicated training and innovation Center aimed at fostering the technical skills and expertise necessary for the growth and advancement of MosChip. The institute focuses on enhancing skill sets related to silicon and software. These courses offer hands-on experience to bridge the industry-academia gap.

Our leadership team possesses the required expertise to execute complex projects involving advanced technology nodes, showcasing strong engineering capabilities. With little or no leadership attrition in recent years, we have built a foundation of trust and stability. This continuity has strengthened our ability to deliver on strategic initiatives and maintain a competitive edge. The consistency in leadership has been a key factor in driving innovation and growth.

With an average employee age of 28 years, MosChip mirrors the youthful demographic of India, aligning us with the nations growth trajectory. This dynamic workforce brings energy, innovation, and adaptability, positioning us to contribute significantly to the evolving tech landscape.

As we advance, our young talent pool will play a crucial role in shaping the future of the semiconductor industry. MosChip is well-poised to be an integral part of the Semiconductor and Software growth story.

Human Resource Management

Talent management is a key element of our strategic framework, ensuring a supportive work environment through competitive compensation and career development opportunities. Moschip is the preferred employer for both entry-level and lateral hires. We follow an analytics-driven, agile hiring ecosystem that enables global scaling while maintaining local nuances in building a heterogeneous workforce.

Emphasising diversity and inclusion, we foster a culture where employees feel valued, with 32% of the workforce being women. The average employee age is 28 years, aligning closely with Indias median age of 28 years. Our attrition is lower than the industry average of 20%, highlighting our strong employee retention and operational efficiency.

We are dedicated to fostering growth by creating a future-ready workforce and promoting lifelong learning. Every Moschip associate is encouraged to take charge of their learning and career growth. On-the-job training and access to the latest technologies, facilitated by partnerships with Tier-I semiconductor players globally, are central to employee advancement. We have increased our fulfillment through internal talent pools by re-skilling and making trainees ready for deployment.

In line with this, we have implemented several ESOP plans, which have been crucial in aligning employee efforts with organisational outcomes. The plans have effectively incentivised senior management, high performers, and future talent, enhancing talent retention and fostering an ownership mindset, and have been instrumental in attracting new hires, especially for leadership roles.

Nurturing Talent

This year, we deepened our commitment to nurturing fresh talent by expanding our campus hiring initiatives across premier institutions. We believe that the energy, creativity, and curiosity of young professionals are vital to driving innovation and sustaining long-term growth, ultimately cultivating future leaders.

Employee Well-being: A Culture of Care

Recognising that employee well-being is foundational to organisational success, we conducted a series of holistic wellness sessions throughout the year. These initiatives were designed to support physical health, mental resilience, and emotional balance across all levels. By prioritising well-being, we continue to build a workplace where people feel valued, supported, and inspired.

Risk Management

Risk Description	Risk Impact	Risk Mitigation
Volatile Global, Political, and Economic Environment (R)	The volatility of geo-political events and macroeconomic changes, like wars, adverse trade policies and continuing high inflation in major economies can impact client spending and also squeeze liquidity.	Active monitoring of the changing geo-political landscape, ensuring business continuity plans and strengthening internal controls against secondary risks continue.
	The US and China trade conflict has the potential to threaten internal security and defense. The risk of conflict in Taiwan poses a risk to the semiconductors industry.
	Risks to service delivery, business continuity, cybersecurity, sanctions compliance and human rights in geo-politically sensitive zones may increase costs and impact revenue growth.
Recessions	MosChip\u2019s operations may be adversely affected due to increased interest rates, inflation, increased energy and labour costs, supply chain delays, and geo-political instability	Monitoring and review by the management.
		Stringent implementation of Business Continuity Plans.
		Regular communication with customers and vendors.
		Setting up rigorous and innovative talent acquisition plans to mitigate talent hiring challenges.
		Mandating appropriate health and safety norms and advisories.
Currency Risk	Volatility in functional currency (INR) against major currencies may cause fluctuation in the reported revenue, profitability/margins, which may impact stakeholder perceptions of the underlying business momentum and profitability	At present, a significant portion of MosChip\u2019s revenue is generated in USD and makes cash payouts in INR. Despite the depreciation of the rupee, this arrangement has not adversely affected the company.
		The management regularly evaluates the hedging policy to minimise the impact of exchange rate volatility.
Attrition Risk	In a knowledge industry, growth is dependent on the ability to attract, develop, inspire, and retain talent. New emerging technology areas also require niche skill sets, and talent scarcity in the industry may result in attrition in these areas.	Huge investments in talent development with a focus on re-skilling programmes to adapt to new and emerging technologies have been made, which will continue at a rapid pace.
Intellectual Property Risk	The risk of inadequate protection of the intellectual property rights of our customers can lead to reputational	Robust data security protection and controls to prevent unauthorised access and/or transfer.
	damage and litigation. Risk of infringement of IP of customers, suppliers, partners and alliance	Strict physical access controls for employees across customer centres and secure areas.
	organisations associates may lead to potential liabilities, increased litigation and reputation impact.	Regular internal audits to comply with customer requirements of confidentiality and data protection.

Risk Description	Risk Impact	Risk Mitigation
Competition Risks	The competitive landscape exerts pricing pressures and demands continual investments to strengthen physical and digital infrastructure, tools, platforms, skills, competencies, and product and service portfolios.	There is a focus on providing higher value and differentiated services and venturing into new business models.
Compliance Risks	We are exposed to various laws and regulations.	MosChip has an in-house compliance team that monitors compliance.
		The team receives updates on changes in regulations from specialist consultants and circulates the same internally.
Litigation Risks	Litigation risks might arise from commercial disputes, alleged violation of IPR, personal data/ information breach incidents/claims and employment related matters.	Strong processes, controls and governance for compliance to contractual obligations, information security, and IP policy.
	Our growing scale and visibility also increase the likelihood of being targeted by unfounded legal claims.
	These lead to reputation risk, legal expenses, and adverse rulings can result in substantive damage.
Data Protection and Privacy Compliance	In a connected world, businesses are highly vulnerable to cyberattacks, leading to loss of data and damage to reputation	MosChip has a stringent cybersecurity policy that ensures the timely resolution of incidents.
		There is consistent focus on keeping up to date with regulatory changes, training and awareness for all stakeholders and strong governance at regional and enterprise levels.
		As a DCA (Design Center Alliance) member of TSMC, we undergo various security audits at regular intervals to meet client requirements.

MosChip Group Financial Performance Review

(Rs. in Lakh)

Particulars	FY25	% of Revenue	FY24	% of Revenue	% of Growth Y-O-Y
Income from Operations	46,684	100.00	29,391	100.00	59
EBITDA	6,006	12.80	3,621	12.20	66
PAT	3,346	7.10	988	3.30	239

We delivered our strongest financial performance to date in FY 2025, setting new records across revenue and profitability metrics. Consolidated revenue from operations stood at 46,684 Lakh reflecting an impressive 59% increase from 29,391.43 Lakh in FY 2024. This growth is primarily attributable to an increase in revenue from the semiconductor segment at 13,213 Lakh and 4,079 Lakh from the embedded systems segment.

Revenue Growth

Over the last five years, the Company has sustained robust revenue growth momentum with a CAGR of 45%.

Operating Profit

Operating Profit (EBITDA) increased to 6,006 Lakh in FY 2025 as compared to 3,621 Lakh in the previous year.

This increase primarily attributable to increase in income from operations by 17,293 Lakh, which is partially offset by increase in employee benefits by 4,385 Lakh and operating cost by 11,449 Lakh.

The Operating Profit of the Company has grown at a CAGR of 62% in the last Five years, from 866 Lakh to 6,006 Lakh.

Profit After Tax

PAT increased to 3,346 Lakhs in FY 2025 as compared to 988 Lakh in the previous year. This increase primarily attributable to increase in EBITDA by 2,385 Lakh and finance cost by 146 Lakh, which is partially offset by a decrease in depreciation by 134 Lakh. PAT has grown at a CAGR of 54% in the last Five years from (915) Lakh to 3346 Lakh.

Market Capitalisation

MosChips market capitalisation has grown from 36, 101 Lakh in FY 2021 to 3,50,491 Lakh in May 2025.

Net Worth

MosChips Net Worth has grown at a CAGR of 58% in the last Five years from 5,294 Lakh to 32,808 Lakh. It is mainly attributed to organic and inorganic initiatives and profitable growth over the years.

Key Financial Ratios

Particulars	FY 2025	FY 2024
Current Ratio (no. of times)	2.38	1.71
Debt-Equity Ratio (no. of times)	0.06	0.26
Debt Service Coverage Ratio (no. of times)	4.26	1.02
Return on Equity	11.20%	5.17%
Trade Receivables Turnover Ratio	5.19	3.54
Trade Payables Turnover Ratio	9.93	4.23
Net Capital Turnover Ratio	4.33	5.33
Net Profit Ratio	7.17%	3.36%
Return On Capital Employed (ROCE)	11.8%	5.12%

Notes:

• A decrease in the Debt-Equity ratio is due to the issue of equity shares on a preferential basis

• A decrease in ROE is on account of the issue of equity shares on a preferential basis.

• An increase in trade payable turnover ratio is on account of an increase in operations compared to the previous year

Internal Control Systems and Their Adequacy

MosChip Technologies has implemented a robust internal control system designed to support the scale and complexity of its growing operations. This framework ensures accountability, financial discipline, and compliance with applicable regulations.

The internal control environment is anchored on the following core elements:

A well-defined organisational structure with clearly assigned roles, responsibilities, and reporting hierarchies;

Documented policies and standard operating procedures that govern key financial, operational, and compliance-related activities;

Quarterly internal audits conducted by an independent internal audit function to assess control effectiveness, identify gaps, and recommend improvements;

Oversight by the Audit Committee of the Board, which monitors the implementation of audit findings on quarterly basis and ensures timely corrective actions.

The statutory auditors have also independently audited the internal financial controls over financial reporting as of 31 st March 2025. They have opined that adequate internal controls over financial reporting exist and that such controls were operating effectively.

Cautionary Statement

This report contains forward-looking statements based on current expectations, assumptions, and projections about future events. These statements involve risks and uncertainties that could cause actual results to differ materially. Readers are advised to consider these factors carefully.

MosChip Technologies is under no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments, or otherwise. While the Company remains confident in its strategy, it acknowledges that external factors—such as global economic conditions, regulatory changes, or technological disruptions—may impact performance in unpredictable ways.

For and on behalf of the Board of Directors

Place: Hyderabad	K. Pradeep Chandra
Date: 30 th July, 2025	Director and Chairman
	Din: 05345536