Mudunuru Ltd Management Discussions

For the Financial Year 2025–26

1. Overview

Mudunuru Limited ("Mudunuru" or "the Company"), headquartered in Visakhapatnam with an operational office in Hyderabad, continues its journey as a technology-driven enterprise. Since the strategic acquisition of majority control in 2022, the Company has focused on building sustainable operations in niche IT, consulting, and enterprise digital-communication solutions. FY 2024–25 marked a significant turnaround, with revenue growth and a substantial narrowing of losses. FY 2025–26 has been a year of consolidation and strategic repositioning for the Company. Mudunuru deepened its core enterprise-messaging and system-integration relationships, with transaction volumes increasing across its principal engagements, and continued to develop Mudunuru Messaging Services (MMS), its unified omnichannel communication platform. In parallel, the Companys diversification strategy has been organised around a proposed corporate group platform — internal research, AI and deep-tech innovation, consulting and advisory, and trading, distribution and digital commerce — intended to support nine proposed specialised operating verticals. This is a planning model only: as at the date of this report, no subsidiaries have been incorporated and no binding commitments made. The model is intended to combine common technology, commercial and governance capabilities at group level with focused sector execution through specialised subsidiary companies as and when approved. On an audited basis, FY 2025–26 revenue and profitability reflect the non-recurrence of a large one-off item recognised in FY 2024–25, as explained in Section 9. Management believes that the core client base, the expanding MMS platform, and a phased, capital-disciplined diversification programme provide a foundation for long-term value creation.

2. Industry Structure and Developments

The Indian IT, consulting, and technology-enabled services sector remains resilient, with growth driven by cloud adoption, artificial intelligence, data analytics, and digital transformation across industries. Demand continues to be particularly strong in education, financial services, healthcare, and government digitalisation initiatives — sectors where Mudunuru has established capabilities. Despite global macroeconomic uncertainty, India continues to be a cost-competitive innovation hub, offering meaningful opportunities for specialised, mid-sized players. Alongside the continuing digital transformation of the Indian economy, opportunities are emerging across automation and robotics, electronic security and surveillance, defence technologies, technology-led education, pharmaceutical and healthcare manufacturing, infrastructure and real estate, organised hospitality, and food and consumer products. These sectors form the context for the proposed group structure and specialised operating verticals described in Section 4.

3. Business Performance — Enterprise Messaging, Fintech and Digital Communication Solutions

The Companys core operating segment remains software, system integration, and consulting services, anchored by its enterprise-grade SMS and digital-communication platform serving the banking, PSU, and enterprise sectors (the "Fintech Division"). During FY 2025–26, Mudunuru continued to deepen its relationships with its existing anchor clients, with message volumes increasing across all engagements as compared to the previous year:

• BSNL – Indian Bank: continued system-integration and enterprise-messaging services, with transaction volumes on a rising trend.

• BSNL – Indian Overseas Bank (IOB): continued support for secure, high-volume customer communication, with steady growth in daily SMS volumes.

• BSNL – Canara Bank Regional Rural Banks (RRBs): continued delivery of enterprise-grade SMS infrastructure supporting rural banking digitisation, with rising transaction volumes.

• BSNL – SAIL, ONGC and JPDCL: continued strategic engagement supporting mission-critical enterprise-communication needs of these public sector undertakings and utilities.

• Direct engagements: continued managed SMS services to SMVCBL Bank, APDCH, HFS, Integrated Information Solutions, and other clients across the BFSI and enterprise sectors.

These continuing relationships reinforce Mudunurus position as a trusted technology and system-integration partner for large enterprises and public sector undertakings, built on:

• API integration and system interoperability with banking and enterprise applications;

• End-to-end managed, enterprise-grade messaging platforms engineered for redundancy, security, and regulatory compliance;

• Advanced load balancing and intelligent traffic routing that ensure uninterrupted service during peak demand; and

• Full compliance with applicable regulatory, banking, and data-protection standards, with audit readiness maintained throughout the year.

The Fintech Division is also evaluating additional service lines to be layered onto its in-house platform, with the objective of increasing wallet share with existing clients and onboarding new BFSI and government clients over the medium term. The scale and diversity of these relationships is expected to remain a significant contributor to future revenue and to further strengthen the Companys reputation in delivering mission-critical enterprise-communication infrastructure. During the year, the Company continued to develop and scale Mudunuru Messaging Services (MMS), its unified omnichannel communication platform, which now offers SMS, WhatsApp, Telegram, and email messaging through a single integrated platform. Mudunuru has also been recognised as a Meta Business Partner and has been empanelled with BSNL to offer these messaging services to a wider clientele, further strengthening the Companys position in the enterprise-communication space.

SMS

WhatsApp

Telegram

Email

4. Strategic Diversification — Proposed Group Platform and Specialized Subsidiaries

The Companys calibrated diversification strategy is designed around a clear separation between centralised corporate group capabilities and sector-focused execution. The corporate group platform is intended to provide common research, technology, advisory and commercial services — including AI and deep-tech capabilities applied across every sector — while specialised subsidiary companies would focus on their respective industries. This structure is expected to reduce duplication, improve capital and risk oversight, and enable each vertical to build the licences, partnerships and specialist management required for its sector. The proposed activities described below remain at different stages of study and evaluation. Their implementation will be phased and subject to due diligence, capital availability, applicable licences and regulatory approvals, and Board and, where required, shareholder approval.

Corporate Group Shared Capabilities & Services (Proposed)

These functions are intended to operate at group level and support all specialised subsidiaries once approved and implemented. They are not presented as additional sector verticals.

Internal Research, Technology & Innovation

Internal research and development would support the Companys own businesses rather than operate as a paid external research service. The shared capability is expected to cover AI and machine learning, deep-tech development, product design and engineering, prototyping, testing and validation, intellectual-property development, technology licensing and commercialisation, data analytics, and process automation. Every specialised subsidiary described below is intended to apply these AI and deep-tech capabilities to its own sector-specific products and services, so that AI and technology act as a common thread across the Group rather than a capability confined to any one vertical.

Group Consulting & Advisory Services

The group consulting platform is intended to provide management and strategy, technology, financial and operational advisory; business planning and development; project and programme management; and sector-specific technical support. Centralising these capabilities is expected to give specialised subsidiaries access to a common pool of expertise while preserving operating accountability within each business.

Group Trading, Distribution & Digital Commerce

The group commercial platform is intended to coordinate sourcing, procurement, import, export, wholesale and distribution across technology, pharmaceutical and healthcare, automation and robotics, security, industrial, consumer and FMCG products, and selected commodities. It may also support B2B and direct-to-consumer digital commerce, marketplace operations, and omnichannel sales and fulfilment. E-commerce platform software and enabling technology would sit within Technology Products & Solutions; e-commerce operations would sit within this group commercial platform.

Specialised Subsidiary Companies (Proposed)

The proposed sector businesses are organised, for planning purposes, into nine specialised verticals. Each would be developed, if approved, through a dedicated subsidiary or another Board-approved operating vehicle, supported by the corporate group capabilities described above.

Portfolio at a Glance

4.1 Technology Products & Solutions

Hardware & IoT ? Cybersecurity ? AR/VR ? Commercial Drones ? Software & E-Commerce Platforms

4.2 Automation & Robotics

Vending & Dispensing ? Smart Retail ? Robotic Process Automation ? Industrial & Warehouse Robotics

4.3 Security & Surveillance

CCTV & Video Analytics ? Access Control ? Perimeter Detection ? Security Drones ? Monitoring Systems

4.4 Defence Technologies

Defence Hardware ? Military Drones & Autonomy ? Reconnaissance ? Secure Comms ? Cyber-Defence

4.5 Education & Training

AI & Technology Training ? Digital Skills ? Corporate & Vocational Education ? Learning Solutions

4.6 Manufacturing, Healthcare & Life Sciences

Pharmaceutical Manufacturing ? Contract Manufacturing ? Licensing & Marketing Rights

4.7 Infrastructure & Real Estate

Apartments ? Villas ? Roads & Related Infrastructure ? Property Development & Management

4.8 Hospitality & Accommodation

Hotel & Commercial Properties ? Leasing & Operations ? Rental Management ? Serviced Accommodation

4.9 Consumer Products & FMCG

Packaged & Processed Foods ? Ready-to-Cook Pre-Mixes ? Other Consumer & FMCG Products

4.1 Technology Products & Solutions

This proposed vertical would build on Mudunurus technology and system-integration base across:

• Hardware & IoT

• Cybersecurity

• AR/VR applications

• Commercial drone applications

• Software and digital solutions

• E-commerce platform technology: online storefronts, digital marketplace systems, order and inventory management, omnichannel retail technology, and merchant and customer-engagement solutions.

Security-focused and military drone applications are addressed separately under Sections 4.3 and 4.4. As the Groups primary technology vertical, this business would directly apply the shared research, AI and deep-tech capabilities described above.

4.2 Automation & Robotics

The proposed automation and robotics business would evaluate:

• Automated vending machines and dispensers

• Smart retail and self-service systems

• Robotic process and workflow automation

• Industrial and warehouse robotics

• Service and commercial robots, and custom automation and control systems

Group-level AI, IoT and product-engineering capabilities are expected to provide a common technology foundation for this vertical.

4.3 Security & Surveillance

This proposed vertical would focus on civilian and commercial electronic-security applications, including:

• CCTV and video surveillance

• AI-enabled video analytics

• Access-control and identification systems

• Intrusion and perimeter detection

• Security drones, remote monitoring, and command-and-control systems

Digital cybersecurity remains within Technology Products & Solutions, while military-grade surveillance remains within Defence Technologies. This vertical would draw directly on the Groups shared AI, computer-vision and IoT capabilities for its detection, analytics and monitoring systems.

4.4 Defence Technologies

In support of domestic capability development, the Company proposes to evaluate:

• Defence hardware and systems

• Military drones and autonomous systems

• Military surveillance and reconnaissance

• Secure defence communications

• Cyber-defence technologies and other dual-use applications

Entry into this vertical will be conditional on the required defence, security, export-control and other regulatory approvals. Where permitted, this vertical is expected to draw on the Groups shared AI and deep-tech capabilities, subject always to applicable defence, security and export-control requirements.

4.5 Education & Training

The proposed education vertical would evaluate AI and technology training, digital-skills development, professional and corporate training, vocational and technical education, and educational-technology and learning solutions. The intention is to combine the Groups AI-led technology content and platforms with a focused education-delivery business for students, working professionals and institutions.

4.6 Manufacturing, Healthcare & Life Sciences The Company would evaluate:

• Manufacturing: pharmaceutical and healthcare manufacturing, including formulations and/or active pharmaceutical ingredients, and contract/third-party manufacturing.

• Manufacturing Licensing: manufacturing-licence arrangements with established players.

• Product Licensing & Marketing Rights: in-licensing or marketing-rights arrangements for third-party products.

Product sourcing, wholesale trading and distribution would be coordinated through the group commercial platform rather than duplicated within this vertical. Any manufacturing activity will commence only after the requisite sector licences, quality systems and regulatory approvals are in place. The Groups shared AI and data-analytics capabilities are expected to support quality control, process optimisation and R&D within this vertical over time.

4.7 Infrastructure & Real Estate

The proposed infrastructure and real-estate vertical would evaluate:

• Apartments: residential apartment developments.

• Villas: villas and gated-community developments.

• Roads & Related Infrastructure: civil-infrastructure and road-construction opportunities.

• Property Development & Management: real-estate development and ongoing property management.

Projects may be undertaken directly, through partnerships, or through suitable project-specific vehicles, subject to capital-allocation thresholds and all applicable approvals. Hotel and commercial properties are included under Hospitality & Accommodation. The vertical is expected to draw on Group technology capabilities for project design, planning and management tools as these are developed.

4.8 Hospitality & Accommodation This proposed vertical would cover:

• Hotel & Commercial Properties: hotel and commercial-property leasing, operations and management.

• Rental Management: apartment and villa rental management.

• Serviced Accommodation: serviced and extended-stay accommodation and related hospitality support services.

The Company is evaluating a mix of asset ownership, leasing, and asset-light management models, and has been identifying suitable properties and potential operating partners. The vertical is expected to draw on Group technology capabilities, including AI-enabled demand forecasting and revenue-management tools, as these are developed.

4.9 Consumer Products & FMCG

The proposed consumer-products vertical would evaluate:

• Packaged Foods: branded, shelf-stable packaged food products.

• Processed Foods: value-added processed food products.

• Ready-to-Cook Pre-Mixes: pre-mix and ready-to-cook product ranges.

• Other Consumer & FMCG Products: adjacent food and non-food consumer categories to be identified through further study.

Product selection, branding, manufacturing and route-to-market decisions will follow category-level study, while the Groups trading, distribution and digital-commerce capabilities — including AI-supported demand planning — are expected to support market access.

Routes to Entry and Current Status

Organic / Subsidiary Build- out

Strategic Partnerships / JVs

Licensing / Marketing Rights

Startup Investments / M&A

As at the date of this report, the proposed group-service model and the nine specialised operating verticals remain at the study and evaluation stage. For each vertical, the Company is evaluating the appropriate legal entity, operating model, capital commitment, target or partner, and implementation timeline. Routes to entry may include organic or subsidiary build-out, strategic partnerships and joint ventures, investments in startups, licensing or marketing-rights arrangements, and acquisitions and selective mergers. No binding commitment to a specific route, target or timetable should be inferred unless separately approved and disclosed. Implementation will remain subject to due diligence, capital-allocation discipline, and applicable Board, shareholder and regulatory approvals.

5. Opportunities and Threats

Opportunities

• Continued deepening of enterprise-messaging volumes with existing banking, PSU, and enterprise clients.

• Expanding demand for AI, IoT, automation and robotics, electronic security, digital education and integrated commerce platforms.

• Rising demand for IT-enabled governance, e-learning, and fintech solutions.

• A proposed nine-vertical specialised-subsidiary portfolio supported by shared group capabilities in internal R&D, AI and deep tech, consulting, and trading, distribution and digital commerce.

• Potential for strategic alliances, joint ventures, and global partnerships as the Company scales into new sectors.

Threats

• Competitive pressure from established IT service providers in the core business.

• Margin pressure due to pricing constraints in outsourcing-led engagements.

• Exposure to macroeconomic volatility and regulatory changes across the sectors the Company now intends to operate in.

• Execution and integration risk associated with entering multiple new business verticals concurrently, including the risk that acquisitions or new ventures do not perform as anticipated.

• Sector-specific regulatory and licensing requirements — including, as applicable, pharmaceutical and healthcare licences, defence, security and export-control approvals, drone permissions, real-estate and infrastructure approvals, hospitality licences, and food-safety certification — that may affect the scope and pace of entry.

6. Outlook

Mudunuru remains committed to scaling its core business while evaluating its proposed diversification pipeline. Key elements of the Companys outlook include:

• Continued growth in enterprise-messaging volumes across existing BSNL, banking, and PSU relationships, and onboarding of new BFSI and government clients.

• Expansion into global markets, including the USA, UK, and Southeast Asia.

• Phased development of specialised subsidiaries and selective investments or partnerships in technology-led and other approved growth opportunities, once approved.

• Calibrated progress across the nine proposed specialised operating verticals described in Section 4, supported by shared group research, technology, advisory and commercial capabilities.

• Development of a group-platform and specialised-subsidiary model that combines shared capabilities and controls with focused sector management, supported where appropriate by trusted partners and associates.

With these initiatives, the Company expects continued improvement in operational efficiency in its core business and a gradual, disciplined build-out of new revenue streams, moving the Company progressively towards sustainable, diversified profitability. The pace and scale of diversification will remain subject to available capital, regulatory approvals, and Board oversight.

7. Risks and Concerns

Key risks to the core business include dependency on project-based contracts, technology obsolescence, and foreign-exchange fluctuations. Human-resource retention and skill development remain critical focus areas. The Companys proposed diversification strategy introduces additional risks that management is actively monitoring. These include capital-allocation and funding risk across multiple initiatives; execution and integration risk associated with acquisitions, partnerships and subsidiary operations; group-governance, consolidation and related-party transaction risks; sector-specific licensing, product-quality and compliance requirements; cybersecurity, data-protection and intellectual-property risks; and the need to build or acquire specialist management and technical talent. Management intends to address these risks through phased entry, defined approval thresholds, due diligence, clear subsidiary mandates, group-wide policies and controls, and regular Board and Audit Committee oversight. In view of an ongoing dispute with a client over invoicing and payment for services rendered, the Board of Directors has authorised Mr. M. Madhusudan Raju to pursue recovery efforts and, if unresolved, to initiate necessary legal action to protect the Companys interests. As at the date of this report, the matter remains ongoing.

8. Internal Control Systems and Their Adequacy

The Company has internal control systems commensurate with its present size and complexity. Financial reporting, compliance and operational processes are reviewed by management and the internal and statutory auditors, with oversight by the Audit Committee. As the proposed group structure develops, management intends to strengthen entity-level and consolidated management reporting, delegation-of-authority matrices, capital-allocation controls, related-party transaction governance, cybersecurity and data controls, regulatory compliance monitoring, and performance reporting by subsidiary and vertical. These measures are intended to ensure that the control environment develops in step with the Companys operating scope.

9. Discussion on Financial Performance with Respect to Operational Performance

FY 2024–25 was a turnaround year for the Company, with Revenue from Operations of 620.05 lakhs and a Loss after Tax of 131.05 lakhs. On an audited basis, FY 2025–26 performance, as per the Companys IND AS financial statements, is summarised below:

Particulars ( in Lakhs)	FY 2025–26	FY 2024–25
Revenue from Operations	319.43	620.05
Other Income	8.30	10.45
Total Income	327.73	630.49
Total Expenses	512.58	780.63
Profit / (Loss) Before Tax	(184.85)	(150.14)
Tax Expense (Deferred Tax)	(5.32)	(19.09)
Profit / (Loss) After Tax	(179.53)	(131.05)
Earnings / (Loss) per Share – Basic & Diluted ( )	(0.56)	(0.42)

Revenue from Operations declined to 319.43 lakhs in FY 2025–26 from 620.05 lakhs in FY 2024–25. Management attributes the substantially higher FY 2024–25 figure primarily to non-recurring, one-off project and service-fee income of 270.20 lakhs, which did not repeat in FY 2025–26, rather than to any deterioration in the Companys ongoing client relationships. The Companys recurring enterprise-messaging relationships with its banking, PSU, and other enterprise clients continued to see rising transaction volumes through FY 2025–26, as described in Section 3; revenue from these relationships, excluding the FY 2024–25 one-off item, moved from 349.85 lakhs to 319.43 lakhs year-on-year. The Loss after Tax correspondingly widened to 179.53 lakhs from 131.05 lakhs, as the reduction in revenue was only partly offset by a reduction in total expenses (from 780.63 lakhs to 512.58 lakhs).

The Companys near-term financial priority is to restore Revenue from Operations growth from its core enterprise-messaging business now that the FY 2024–25 one-off service-fee income has fully lapsed, while progressing the diversification initiatives described in Section 4 in a capital-disciplined manner.

10. Human Resources / Industrial Relations

Employees continue to be viewed as key assets of the Company. Employee benefits expense increased to 272.49 lakhs in FY 2025–26 from 233.77 lakhs in FY 2024–25, reflecting continued investment in the Companys workforce. As at the date of this report, Mudunuru employed 25 people. During the year, the Company invested in training, upskilling and leadership development. Workforce planning is also being aligned to the proposed group model, including shared AI, deep-tech, consulting and commercial capabilities and specialist talent for automation and robotics, security and surveillance, defence technologies, education, pharmaceutical manufacturing, infrastructure, hospitality and consumer products. Industrial relations remained cordial during the year.

11. Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, expectations, projections, estimates or predictions — including the proposed corporate group platform, specialised subsidiary structure and diversification initiatives described in Section 4 — may be forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on assumptions and expectations of future events. The proposed initiatives are at varying stages of evaluation and implementation and remain subject to due diligence, availability of capital, regulatory and other approvals, and Board and, where applicable, shareholder approval. Actual results may differ materially due to risks, uncertainties and factors beyond the Companys control. The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements on the basis of subsequent developments, information or events, except as required by applicable law.

	For and on behalf of the Board
	Mudunuru Limited
	Sd/-
Place: Vishakhapatnam	Madhusudan Raju Mudunuru
Date: 04.09.2026	Managing Director
	DIN: 00471678