NIIT Learning Systems Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

COMPANY OVERVIEW

NIIT Learning Systems Limited ("NLSL", "NIIT Learning" or "the Company") (Ticker Symbol: NIITMTS), is the trusted, award-winning L&D and talent partner for the worlds leading companies, and a recognised leader in Al maturity for learning and development. Established in 1981, NIIT Learning helps enterprises build the Al operating model, infrastructure, and fluency that a human + Al workforce demands. The Company pairs Al-powered managed learning with strategic consulting to solve the most complex challenges in learning, talent, skills, and workforce transformation. Across 40+ countries, the Companys experienced learning teams help clients thrive in an Al-first world with Al-first L&D transformation solutions, reskilling employees at scale through intelligent coaching and dynamic simulations embedded directly into the workflow.

NIIT Learnings comprehensive suite of Managed Learning Services and Solutions includes Al-Ready L&D Enterprise Solutions, Custom Content and Curriculum Design, Learning Delivery, Learning Administration, Strategic Sourcing, Learning Technology, Customer Education, Leadership & Professional Skills, HCM Technology Consulting, Digital & IT Skills, and Talent Solutions.

NLSLs Strategic Consulting services are designed to solve the most complex challenges in talent, skills, and workforce transformation. With a team of over 700 experts and the expanded capability of the St. Charles Consulting Group, the Companys consulting services include Learning & Talent Transformation, Strategic Learning & Career Interventions, Talent Technology Advisory, Workforce Skilling, Learner-Centric Experiences, and Learning & Talent Intelligence.

With a Net Promoter Score of 9.65/10, NIIT Learning helps leading companies reimagine their learning ecosystems and increase the business value and impact of learning.

ENVIRONMENT AND STATE OF THE INDUSTRY

Learning and Development (L&D) is seen as a key enabler for business success by enterprises across the world. The World Economic Forums Future of Jobs 2025 report highlighted that 63% of global companies cite skills gaps as a key challenge, while 85% plan to increase workforce upskilling investment, reinforcing the long-term secular demand for Managed Learning Services. Similarly,

Gartners 2025 L&D research found that CEOs continue to prioritise growth through transformation, placing increasing strategic importance on L&D leaders to activate agile, skills-first learning cultures.

Against a backdrop of strong secular demand for L&D services, FY26 unfolded against a dynamic global environment. Geopolitical developments and tariff uncertainties kept enterprises selective in their discretionary spending. Organisations continued to balance cost discipline with the imperative of technology-led transformation, and the pace of demand recovery varied across sectors and geographies.

Large enterprises in North America and Europe, which are NUT Learnings core customer base, remained measured in their L&D consumption, while structural demand for outsourcing and workforce transformation strengthened as organisations sought cost agility and scalable delivery models.

Global corporations demanded greater accountability and efficiency from their L&D spends, expecting those L&D investments to lead to measurable improvements in employee productivity and business outcomes. Outsourcing gained further momentum as companies restructured operating models to drive efficiency and focus on core operations.

The accelerated integration of Generative Al (GenAI) has also emerged as a transformative force in corporate learning. Organisations globally are embedding GenAI in content creation, learning workflows, and performance enablement. Personalised coaching and hyper-realistic, dynamic simulations that are enabled by Al are not only enhancing learner experience but also delivering far superior learning outcomes compared to traditional methods. Adoption of Al-enabled learning has been another factor that has increased the propensity to outsource, given the lack of those capabilities in in-house teams.

MARKET OPPORTUNITY

Annual global spending on corporate training Is around USD 400 billion (Source: Trainingindustry.com).

Internal services account for approximately two-thirds of the learning budgets such as the learning departments salaries, travel costs of the learning staff, administrative costs, non-salary development costs, and non-salary delivery costs. External spending makes up the remaining third and covers standardised courses, tuition reimbursement, and learning platforms.

Over the years, the complexity of training has increased significantly, as have expectations around outcomes. In this context, the level of investment required to deliver high-quality training is often not feasible for internal L&D organisations, particularly as learning and development is not their core function. Moreover, dedicated internal L&D staff are frequently underutilised since training demand tends to fluctuate, while costs remain largely fixed. As a result, the efficiency and effectiveness of in-house training efforts are often inconsistent.

The transformative role of Generative Al (GenAI) in corporate learning accelerated significantly during FY26. Enterprise adoption of Al in L&D moved from exploration to initial deployment, with early movers embedding Al in content creation, personalised learning pathways, and learning analytics. According to Courseras Job Skills Report 2026, Al proficiency is becoming a universal competency for all employees. 53% of Chief Learning Officers (CLOs) in NUT Learnings benchmark report ranked Al-enabled learning as their highest priority.

Outsourcing of proprietary training is underpenetrated, with external spending on Learning Services at less than USD 10 billion per annum, which is less than 3% of overall L&D spend (Source: Trainingindustry.com). This represents a large opportunity for your Company with significant headroom for growth.

The Managed Learning Services market is expected to grow substantially as companies increasingly outsource non-core functions, creating a significant opportunity for Managed Learning Services providers like NLSL to capture a disproportionate share of this expanding market given the Companys proven track record as a training specialist that consistently delivers measurable improvements in both efficiency and effectiveness for our clients L&D operations.

BUSINESS OVERVIEW AND STRATEGY

NLSL operates in the training outsourcing market and is an established leader in Managed Learning Services. Through a differentiated operating model and extensive use of technology, the Company can help clients achieve substantial improvements in learning outcomes, such as reduced time spent for upskilling, improved productivity, improved business results, and an increase in sales with higher predictability. These outcomes are achieved while concurrently reducing costs and shifting the clients cost base from fixed to variable. In addition, NLSL brings unique capabilities that internal training organisations do not possess, and which are inefficient for them to invest in for captive use.

NLSL offers innovative solutions that help clients accelerate business impact. The Companys team of learning professionals helps the worlds leading companies transform their training function through training outsourcing services that reduce costs, add measurable value, and increase business impact, while allowing customers to redirect resources and energy into core business functions.

NLSL provides the following services to its customers:

Managed Learning Services

• Custom Content and Curriculum Design

• Learning Delivery

• Learning Administration

• Strategic Sourcing

• Learning Technology

Specialised Learning Solutions

• Al-Powered L&D Transformation

• Customer Education Services

• HCM Technology and Consulting Services

• Leadership and Professional Skills Training

• Digital and IT Training

• Talent Solutions

Strategic Consulting Services

• Learning & Talent Transformation

• Strategic Learning & Career Interventions

• Talent Technology Advisory

• Workforce Skilling

• Learner-Centric Experiences

• Learning & Talent Intelligence

GROWTH STRATEGY

NLSL sees immense opportunity for growth. The existing market for managed training services is under penetrated. That market is expected to expand further with greater adoption of Al-enabled training, and at the same time, the propensity to outsource will only strengthen due to insufficient in-house capabilities. As one of the largest service providers, with significant investments in Al-enabled offerings, the Company expects to benefit from this expanding opportunity.

NLSL is uniquely positioned to capture a disproportionate share of the outsourced learning services market through its distinctive combination of deep L&D expertise, proven methodologies for measuring ROI and business impact, and a track record of successfully transforming L&D operations for Fortune 500 clients.

Compared with generalist providers and competitors without a dedicated focus on L&D, NLSLs differentiated proposition combines specialised L&D expertise with enterprise-grade delivery capabilities.

The Company integrates Al, technology, content, delivery, and analytics within a unified learning ecosystem, enabling large multinational organisations to undertake complex L&D transformation programmes at scale and drive sustained improvements in effectiveness and efficiency.

NLSL has established a strong position and ‘right to win in the market with a) proprietary learning methodologies grounded in learning science that create predictable outcomes, b) leadership in the use of technology for education, including a leading edge in Al for learning and development, automation of learning processes, gamification, Augmented Reality and Virtual Reality (ARA/R) based simulations and learning analytics, c) end-to-end, multi-shore delivery capability, and d) strong balance sheet and availability of growth capital. Together, these capabilities drive greater business impact and consistent gains in the effectiveness and efficiency of the learning function across the Companys global customer base.

The Companys growth strategy rests on four key pillars:

> Becoming an Al-first business: The Company will continue to embed Al across learning design, delivery, support, and analytics to improve both efficiency and learner outcomes.

> Deepening client relationships: Invest in innovation and relationship building to sell additional services to existing clients, through newer offerings or to newer divisions within the client organisations and improve wallet share.

> Expanding market coverage: The Company will invest in business development and customer acquisition in current markets to win new logos.

> Deploying growth capital: Strategic investments will be made to strengthen and expand capability set, geographical reach, and penetrate desired customer segments, including potential inorganic expansion.

These efforts are underpinned by a strong balance sheet and a culture of execution excellence. With a sharpened strategic focus, operational agility, and commitment to innovation, NLSL is confident in its ability to scale sustainably, deliver stakeholder value, and maintain leadership in a fast-evolving global learning landscape.

INVESTING IN NEW CAPABILITIES

NLSL has a track record of investing in newer capabilities, organically as well as inorganically, to strengthen its domain expertise in training, expand its offerings to clients and enter new areas.

CONSULTING SERVICES

The Company acquired St. Charles Consulting Group in FY23 to expand its services portfolio to include higher value advisory services around Learning Transformation, Talent Strategy & Business Alignment, Employee and Learner Experience Design, Talent & Learning Technology, and Strategic Learning Interventions.

By successfully integrating these offerings and cross-selling them to other clients, NLSL was able to expand its consulting footprint beyond North America, to the UK and EU markets, expanding wallet share and also strengthening its brand to gain a more premium positioning in the market.

AI-ENABLED LEARNING

NLSL was also early in spotting the transformative role of Al in learning and development. Anticipating that internal L&D teams would be overwhelmed by the pace of change and organisational expectations, and would turn to external advisors for assistance, the Company moved quickly to create a dedicated Al learning practice and build out new Al-enabled solutions. At the end of FY26, the Al learning practice had over 100 senior Al and learning science experts engaged in building out a self-improving, Al-based learning platform with three components:

• Al Coach: Replaces passive content delivery with personalised interactive coaching for every learner, whether they are working on long-term career development or preparing for an immediate task - such as a critical client meeting the next day.

• Simulation Manager: Connects the learner to configurable, realistic practice environments featuring Al avatars which interact with the learner dynamically, reacting to the learners words in real time. The Al Coach identifies the right simulation for each learner in real time and custom-configures it to their specific needs.

• Signal Engine: Continuously scans organisation-wide performance data to identify skill gaps which form the basis for creating custom-tailored training modules and simulations, and afterwards, measures the impact of the training. The Signal Engine is what turns the platform from a learning tool into a continuously improving performance system.

The Al Learning Practice is also working on another solution to a problem that is still underappreciated.

Enterprises will soon start grappling with how to enable employees to gain experience and develop the judgement necessary for higher positions, when routine entry-level work, the very foundational ingredient to building that experience and judgement, gets automated by Al. NLSL is developing intellectual property around the concept of synthetic work, to address this problem.

The Companys new Al-enabled offerings have gained market traction and recognition from independent industry analysts. Early adopters of NLSLs Al-enabled services have reported material improvement in outcomes. One client who deployed the Al Coach and Simulation Manager for sales training saw learners grow their individual sales pipeline by an additional USD 1 million on average, over 6 months. Another saw time to proficiency on methodology adoption shrink from 18 months to 6 months. NLSL made material progress on its Al-first strategy: Al-enabled revenue grew from negligible levels to approximately 13% of quarterly revenue (in Q4 FY26), with enterprise-grade Al deployments live across several accounts.

Additionally, NLSL was independently recognised as a Market Leader in the Learning Systems Al Insights 2026 Market Assessment report by Fosway, ranking NLSL highest in the Fosway 9-Grid™ for Digital Learning for its say-do ratio, i.e. the actual delivery of Al capabilities versus what was promised to clients. The Company was also recognised as a Strategic Leader in Managed Learning Services by NelsonHall NEAT.

Subsequent to year-end, NLSL launched a comprehensive suite of Al solutions designed to help enterprises build the Al-ready L&D organisation. Unified under a single framework, the portfolio brings together four integrated areas:

> Reimagining the learning operating model for an

Al-enabled enterprise,

> Building Al-native learning architecture,

>> Developing Al fluency across the enterprise workforce, and

? Preparing leaders to manage a combined human and Al workforce.

Drawing on more than four decades of managed learning experience, the offering gives clients a clear path from Al ambition to execution and reinforces the Companys positioning at the forefront of Al-led learning transformation.

INORGANIC INITIATIVES

In FY26, NLSL completed two strategic acquisitions that significantly expand the Companys geographic footprint, capabilities, and client base:

1. MST Group

On July 9, 2025, NLSL completed the acquisition of MST Investment Holding Company GmbH (MST Group¹), headquartered in Munich, Germany, through its wholly-owned subsidiary NUT (Ireland) Limited. The total acquisition consideration was EUR 22.37 million, comprising EUR 15.35 million of equity consideration and EUR 7.02 million of assumed debt, funded through a combination of internal accruals and term loans. The transaction was structured as an all-cash deal.

MST Group is a leading managed learning services provider in the DACH region (Germany, Austria, and Switzerland), with over 20 marquee clients including BMW, Siemens, Siemens Energy, Zalando, Daimler Truck, MAN, and RWE.

It offers end-to-end learning management services, including its proprietary QuickStart Learning Academy and exTra platform, and operates nearshore delivery from Hungary. The existing leadership team has been retained to ensure continuity and accelerate integration.

The acquisition is strategically significant: it extends NLSLs geographic footprint into the high-value German corporate learning market, Europes largest, and it adds seven Global 1000 clients to the Company. MST Group contributed Rs. 473 million to overall revenue in FY26 post the transaction.

2. SweetRush Inc.

On January 9, 2026, NLSL completed the acquisition of SweetRush Inc., a San Francisco, California-based learning solutions company, specialising in human-centred, Al-enabled learning experiences, through its wholly-owned subsidiary NUT (USA) Inc. The aggregate purchase price is up to USD 26 million including earnout amount payable over the next five years based on performance. Payments are subject to customary adjustments as per terms of definitive agreements. SweetRushs leadership team continues with the business following the transaction.

SweetRush brings distinctive capabilities in immersive and experiential learning, including XR (extended reality), Al-powered content design, certification programmes, and talent solutions, with a strong track record of delivering award-winning learning experiences for Fortune 500 clients. SweetRush operates from the US with a delivery centre in Costa Rica, offering an offshore leverage pathway aligned with NLSLs integrated delivery model. SweetRush reported annualised revenue of approximately USD 22 million at the time of acquisition, with early double-digit EBITDA margins. SweetRush contributed approximately Rs. 389 million to consolidated revenue in Q4 FY26, its first quarter of consolidation.

The acquisition deepens NLSLs position in experiential and Al-led learning, complementing the Companys existing Al-first strategy. Together with MST Group, SweetRush positions NLSL for accelerated growth across the US and European markets, with an enriched capability stack spanning managed learning, consulting, Al, and immersive technologies that few global providers can match at enterprise scale.

PERFORMANCE

FY26 marked a year of strong strategic execution and accelerating growth for NUT Learning Systems Limited. The Company demonstrated continued resilience, driven by a differentiated operating model and strong focus on customer outcomes. It delivered robust top-line performance, driven by new customer additions, ramp-ups in recently signed accounts, expansion of wallet share with existing clients, and a meaningful contribution from the two strategic acquisitions made during the year, i.e. MST Group and SweetRush.

In FY26, the Company delivered 18% year-on-year revenue growth (11 % in constant currency terms). On an organic basis, revenue growth was 13% in reported currency and 7% in constant currency.

DEEPENING CLIENT RELATIONSHIPS

While consumption in some client accounts moderated, the Company continued to deepen relationships on aggregate, expand into new divisions, and sell newer services to grow wallet share. Investments in new capabilities and global delivery allowed the Company to sustain growth momentum.

These investments delivered visible outcomes, with 21 new logos added in FY26. The Company also renewed 12 contracts that completed their term during the year, maintaining a strong track record of renewals. Further,

NLSL expanded the scope of work with 4 clients during the year. NLSLs strong customer relationships and track record of service excellence resulted in a Net Promoter Score (NPS) of 9.65 out of 10, one of the highest in the peer set.

Including these, NLSL ended the financial year with 110 Annuity Clients. Of these, 5 clients contribute revenue of more than USD 10 million, and 8 clients contribute revenue of between USD 5 million and USD 10 million.

In terms of client concentration, the top 5 customers contributed 32% of revenues in FY26, while the top 10 contributed 50% and top 20 contributed 69%.

Strong deal closures resulted in an improved Revenue Visibility, which stood at USD 459 million, up 18% year on year.

CONSOLIDATED FINANCIALS OF THE COMPANY

The consolidated financial summary for FY26 is provided in Table 1 below.

Table 1: FY26 Consolidated P&L

Rs. Million	FY26	FY25	YoY
Net Revenue	19,520	16,533	18%
Operating expenses	15,563	12,770	22%
EBITDA	3,957	3,763	5%
EBITDA%	20.3%	22.8%	(249) bps
Depreciation & Amortisation	764	619	23%
EBIT	3,193	3,144	2%
Other lncome/(Expense)	119	(80)	199 mn
Profit before Tax	3,312	3,064	8%
Tax (Operational)	835	789	46 mn
Profit After Tax	2,477	2,275	9%
PAT%	12.7%	13.8%	(107) bps
Basic EPS (Rs.)	18.09	16.75	8%

Note:

Other Income/ (Expense) includes Treasury Income, other non-operating income/(expense) or exceptional costs including scheme related transitory expenses pertaining to ESOPs of NIIT Limited held by employees of NLSL at the time of demerger, strategic growth & acquisition related expenses including fair value adjustments for Future Earnout liability, Interest expense on loan related to the acquisition and other one-time expenses.

NET REVENUE >

In FY26, revenue was Rs. 19,520 million, up 18% YoY. Constant currency growth was 11 % YoY, with organic constant currency growth of 7% and inorganic contributing approximately 4 percentage points.

OPERATING EXPENSES

Operating Expenses for FY26 were Rs. 15,563 million, up 22% YoY. Increase was ahead of revenue growth due to change in mix, salary increments effective July 1,2025 (approximately 4% YoY), and ongoing investments in sales and marketing and Al capability building. These were partially offset by Al-led productivity improvements.

EBITDA

EBITDA for the year was Rs. 3,957 million, up 5% as compared to Rs. 3,763 million last year. Margin was 20.3% as compared to 22.8%, driven by normalisation of mix due to completion of North American real estate training contract during the year, and planned investments in S&M and new capabilities including Al.

DEPRECIATION

For the year, the Depreciation & Amortisation was Rs. 764 million compared to Rs. 619 million last year. This includes Rs. 209 million in amortisation of acquisition related intangible assets recognised pursuant to purchase price allocation: St. Charles Consulting Group (StC) Rs. 136 million, MST Group Rs. 56 million, and SweetRush Rs. 17 million.

NET OTHER INCOME/(EXPENSE)

Net Other Income/ (Expense) for FY26 was Rs. 119 million compared to Rs. (80) million in FY25. This comprises the following income, less the costs and charges shown:

• Other Income of Rs. 360 million comprising

Z Interest Income (on bank deposits and fixed income investments) of Rs. 322 million, and

Z Miscellaneous Other Income including reversal of provisions, cost recovery for shared services, interest on tax refund and gain on sale of assets of Rs. 38 million

• Finance Costs of Rs. 228 million including

• Interest and other borrowing cost of Rs. 102 million

• Notional charge on fair value adjustment in future acquisition liability related to the acquisitions Rs. 94 million (Rs. 79 million related to StC and Rs. 15 million related to SweetRush)

• Interest charge related to leased premises of Rs. 32 million (recorded under Ind AS 116),

• Foreign exchange loss of Rs. 147 million

Bank Charges of Rs. 45 million

• One-time provision on tax charge related to prior period of Rs. 54 million

• Scheme Related/Transitionary Expenses (demerger-related transition and ESOP costs) of Rs. 17 million

CSR expenses and donation of Rs. 23 million

• Exceptional gain of Rs. 272 million, net of the following:

• Gain from the fair value adjustment in future acquisition liability for StC of Rs. 753 million

• One time cost due to increase in gratuity provisions due to the new wage code cost of Rs. 135 million

• Legal & professional expenses related to inorganic growth initiatives of Rs. 254 million

• Prudent provision of Rs. 92 million against carrying value of minority strategic investment

Table 2: Net Other Income/ (Expense)

Rs. Million	FY26	FY25
Other Income	360	449
Finance Costs	(228)	(208)
Foreign exchange Gain/(Loss)	(147)	(116)
Bank Charges	(45)	(32)
One Time provision related to tax charge for prior period	(54)	-
Scheme Related/Transitionary Expenses	(17)	(45)
CSR & Donation	(23)	(14)
Fair value measurement loss of strategic investment	-	(2)
Exceptional items	272	(111)
Other lncome/(Expense)	119	(80)

TAXES

For FY26, the Company provided for income tax of Rs. 835 million at consolidated level as compared to Rs. 789 million in FY25. The effective tax rate (ETR) for the year was 25.2% vs 25.7% in FY25. The ETR includes the impact of notional expenses included in consolidated accounts.

Table 3: Detailed Analysis of Consolidated Balance Sheet at the End of the Financial Year 2025-26

Rs. Million	31-Mar-26	31-Mar-25
Sources of Funds
Share Capital	275	272
Reserves & Surplus	15,154	11,827
Shareholders Funds	15,429	12,100
Loan Funds	2,674	706
Total Sources of Funds	18,103	12,806
Application of Funds
Net Fixed Assets (with CWIP)	10,619	6,085
Non-Current Investment	380	408
Right-of-use Assets	466	300
Lease Liabilities	(508)	(322)
Deferred Tax Assets net of Liabilities	18	76
Cash & Equivalents	9,366	7,742
Trade Receivables	3,778	2,515
Other Assets	5,853	4,737
Other Liabilities	(11,869)	(8,736)
Total Application of Funds	18,103	12,806

Please note: The analysis in this MD&A does not conform specifically to the Schedule III format. Numbers have been regrouped for analysis.

SHARE CAPITAL

The Share Capital of the Company stood at Rs. 275 million, as compared to Rs. 272 million in FY25. This includes the impact of the issue of 1,395,090 equity shares of Rs. 2 each pursuant to exercise of ESOPs during the year. See note 11 for details.

Reserves And Surplus

Reserves and Surplus stood at Rs. 15,154 million in FY26 as compared to Rs. 11,827 million in FY25. The increase is attributable to profits generated during the year, net of dividend paid (Rs. 411 million), and impact of Foreign Currency Translation Reserve.

LOAN FUNDS >

As on March 31,2026, the Gross Debt of the Company stood at Rs. 2,674 million versus Rs. 706 million last year. Loan Funds increased in FY26 following new term loans raised towards the acquisition of MST Group in Germany (Rs. 1,505 million) and SweetRush Inc. in the USA (Rs. 665 million). As on March 31,2026, the Company had Net Cash Rs. 6,692 million versus Rs. 7,036 million last year.

Fixed Assets

During the year, the Company had total capital expenditure (including change in Capital Work in Progress) of Rs. 448 million. This includes change in amount of intangible assets under development. Capex reflects planned investments in AI/GenAI, platforms, and IT infrastructure refresh. The category-wise addition in fixed assets is given below:

? Products and Platforms	Rs. 363 million
> Building & Equipment	Rs. 56 million
>> Normal capital expenditure:	Rs. 29 million

Table 4: Net Fixed Assets

Rs. Million	As on Mar26	As on Mar25
Property, plant & equipment	292	300
Intangible assets under development	250	100
Goodwill	8,428	4,519
Other Intangible assets	1,649	1,166
Net Block	10,619	6,085

Net Fixed Assets stood at Rs. 10,619 million as on March 31,2026, as compared to Rs. 6,085 million last year. The YoY increase is due to the Intangible assets (including goodwill) recognised on acquisition (Rs. 1,839 million related to MST Group and Rs. 2,168 million related to SweetRush) and capital expenditure for the year, net of depreciation and amortisation of Rs. 764 million. Fixed assets include Rs. 25 million in property, plant and equipment added through acquisitions during the year. The amounts in the table above include impact of change in exchange rates.

Right-of-Use Assets

Right-of-Use Assets as on March 31,2026, stood at Rs. 466 million, as compared to Rs. 300 million last year.

Deferred Tax Assets/Liabilities

As on March 31,2026, the Deferred Tax Assets stood at Rs. 143 million as compared to Rs. 93 million last year. Deferred Tax Assets are created mainly on provisions pertaining to Employee Benefits, differences in carrying value of PPE, and allowances for Expected Credit Loss, all of which are allowed as tax deductible expenses in the year of actual write-off. Deferred Tax Liabilities increased on account of the acquisitions of MST Group and SweetRush.

Table 5: Deferred Tax Assets & Liabilities

Rs. Million	As on Mar26	As on Mar25
Deferred tax liabilities	(124)	(17)
Deferred tax assets	143	93
Net Deferred Tax	18	76

OTHER ASSETS & LIABILITIES

The elements of Net Current Assets were as follows:

Trade Receivables

The total receivables of the Company as on March 31,2026, were Rs. 3,778 million, as compared to Rs. 2,515 million as on March 31,2025. The increase in trade receivables YoY is on account of increase in business volume and change in business mix. Days Sales Outstanding (DSO) increased from 56 last year to 65 as on March 31,2026. Your Company continues to lay strong emphasis on managing and optimising the working capital cycle.

Cash and Bank

The Cash & Cash Equivalents, as on March 31,2026, stood at Rs. 9,366 million compared to Rs. 7,742 million as on March 31,2025.

Table 6: Cash & Equivalents

Rs. Million	As on Mar26	As on Mar25
Liquid Investments	4,933	3,843
Bank Deposits	4,433	3,899
Cash & Equivalents	9,366	7,742

During the year, the cash generation was as follows:

• Cash from Operating activities was Rs. 3,099 million vs Rs. 2,595 million, reflecting strong profitability and healthy cash conversion despite impact of change in business mix.

•Cash from Investing activities for FY26 was Rs. (3,305) million vs Rs. (791) million, driven by the acquisition of MST Group (Rs. 2,148 million) and SweetRush (Rs. 1,011 million) during the year, outflow related to capex of Rs. 444 million net of proceeds from mutual funds and interest received of Rs. 349 million.

• Cash from Financing activities in FY26 was Rs. 1,302 million vs Rs. (727) million last year; includes dividend paid to shareholders (Rs. 411 million at Rs. 3 per share), repayment of term loan instalments related to StC acquisition and new term loans for acquisition of MST Group (Rs. 1,505 million) and SweetRush (Rs. 665 million).

Other Assets

Other Assets increased from Rs. 4,737 million in FY25 to Rs. 5,853 million in FY26. The increase includes the impact of the addition in Other Receivables due to the increase in volume of Strategic Sourcing during the year.

Table 7: Other Assets

Rs. Million	As on Mar26	As on Mar25
Unbilled revenue	840	870
Interest Receivable	13	16
Security Deposits Receivable	52	44
Other Receivables	4,151	3,084
Advances recoverable in cash or in kind	714	583
Advance Tax	81	136
Other Advances	1	2
Inventories	0	1
Other Assets	5,853	4,737

Other Liabilities

Other Liabilities include Trade Payables, Other Financial Liabilities, and Provisions. These have increased from Rs. 8,736 million in FY25 to Rs. 11,869 million in FY26. The increase in Other Payables during the year was driven by the increased volume of Strategic Sourcing during the year. The increase in future acquisition liability includes the impact of the future earnout liability added at closing due to the acquisition of SweetRush and fair value adjustment in StC and SweetRush acquisitions during the year. Please see notes 13(ii), 13(iii), 14 and 15 for details.

Table 8: Other Liabilities

Rs. Million	As on Mar26	As on Mar25
Trade payables	1,319	990
Provisions	356	224
Statutory Dues	580	356
Deferred Revenue	1,458	1,077
Advances from Customers	200	156
Other Payables*	5,359	3,944
Future Acquisition Liability	2,598	1,989
Other Liabilities	11,869	8,736

Other Payables comprise payables on account of Strategic Sourcing for customers and amount payable to employees.

Key Financial Ratios

The Company has identified the following as Key Financial Ratios:

Table 9: Key Financial Ratios

Particulars	FY26	FY25	YoY
Revenue growth (%)	18.1%	6.4%	1165 bps
Operating Profit margin (%)	20.3%	22.8%	(249) bps
Net Profit margin (%)	12.7%	13.8%	(107) bps
Basic EPS (Rs)	18.09	16.75	8%
Debtor Turnover Ratio	6.7	6.9	(3)%
Days Sales Outstanding (DSO) days	65.4	55.5	9.8 days
Debt to Equity Ratio	0.19	0.06	201%
Interest Coverage Ratio	17.8	21.9	(19)%
ROCE	32.7%	38.2%	(546) bps
Current Ratio	1.74	1.88	(7)%

For FY26, revenue grew 18% YoY as compared to 6% in FY25. Excluding contribution of MST Group and SweetRush, which were acquired during the year, growth was 13% YoY (7% in constant currency). EBITDA Margin was 20.3% in FY26 as compared to 22.8% last year. Margins were impacted by change in business mix and planned investments in S&M and capabilities including Al.

In FY26, PAT was Rs. 2,477 million with basic EPS of Rs. 18.09 as compared to Rs. 2,275 million last year with basic EPS of Rs. 16.75. PAT included impact of net other income of Rs. 119 million compared with expenses of Rs. 80 million last year.

Debt to Equity Ratio was higher due to new loans taken during the year for acquisitions. Interest Coverage Ratio decreased YoY from 21.9 in FY25 to 17.8 in FY26. There was an increase in DSO YoY by 9.8 days. Debtor Turnover decreased marginally to 6.7 versus 6.9 last year. The amount of inventory carried by the Company stood at Rs. 0.44 million, which is not material. Current Ratio decreased to 1.74 versus 1.88 last year due to deployment of funds and borrowings for acquisitions.

The details of Return on Net Worth are mentioned in the table below:

Table 10: Return on Net Worth

Particulars	FY26	FY25	YoY
Return on Net Worth (%)	18.8%	20.9%	(208) bps

Return on Net Worth (RoNW) is computed as Profit after Tax divided by Net Worth. Net Worth represents the total of the Companys equity and reserves, excluding capital reserves, hedging reserves, and cumulative translation reserves. RoNW was 18.8% in FY26, as compared to 20.9% in FY25. FY26 reflects the impact of inorganic acquisitions on both net profit (through amortisation of intangibles) and net worth (through goodwill addition). While net profit increased by 9% to Rs. 2,477 million, net worth increased by 21 % to Rs. 13,152 million from Rs. 10,879 million.

Accounting Policies

The Company has selected the accounting policies described in the Notes to Accounts, which have been consistently applied, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2026, and of the Profit or Loss of the Company for the year. The significant accounting policies and practices followed by the Group are disclosed in Note 2 of the Consolidated Financial Statements for the year.

Related Party Transactions

Related Party transactions are defined as transactions of sale/purchase of goods/services made by the Company with Promoters, Directors, Key Managerial Personnel, Subsidiaries, Associates, or other parties in which Promoters or Directors have significant interest/control directly or indirectly, which may have potential conflict of interest with the Company. There were no material transactions during the year under review that were prejudicial to the interests of the Company.

All transactions covered under related party transactions were regularly ratified and/or approved by the Board, the guiding principles being arms length, fairness, and transparency. Please refer to Note 35 of the standalone financial statements and Note 33 of the consolidated financial statements for details of related party transactions during the year.

HUMAN RESOURCES

OVERVIEW

At NIIT, people are central to organisational success. Business growth Is Intrinsically linked to the professional and personal development of every NIITian.

The total number of employees at the end of FY26 stood at 2,546, including the addition of the MST Group team and SweetRush team.

Some of the focus areas during the year included integration of the MST Group team into the NIIT family, advancing internal talent, optimising organisational efficiency, enhancing digital HR capabilities, and cultivating a high-performance, inclusive culture across a more globally diverse and expanded workforce.

STRENGTHEN CAPABILITY BUILDING & UPSKILLING

• Scaled structured manager development and certification journeys across FY25 & FY26, covering 450+ managers.

• Enhanced manager effectiveness through Leadership Pulse, with 96.8% of participants demonstrating improvement in MEI (Manager Effectiveness Index) scores after going through the programme.

^ Strengthened leadership capability through business-aligned learning interventions led by Learning Leaders.

• Accelerated internal talent mobility through Accelerated Career Enhancement (ACE), Talent Readiness, and Internal Job Posting (UP) initiatives.

• Engaged in bi-annual performance conversations through NCMS (NIIT Competency Management System) with 98% of NIITians in India.

Developed entrepreneurship capability in leaders through Catalyst Club.

ADVANCE DIGITISATION & AUTOMATION IN HR

• Launched Phase 2 of SAP SuccessFactors to strengthen governance, improve efficiency, enhance data integrity, and deliver a seamless global employee experience.

• Introduced Converse Al, to build confidence in critical workplace conversations through real-time coaching, feedback, and personalised debriefs.

• Deepened employee listening through Amber, the Al-enabled engagement chatbot.

• Expanded N.AI.RA, the Al chatbot, to the USA for real-time policy and process query resolution.

Rolled out Microsoft Copilot enablement across NIIT to accelerate Al adoption, productivity, and digital capability building (49 sessions, 579 participants).

ELEVATE NIITIAN EXPERIENCE

Strengthened holistic well-being through global sports participation, recreation initiatives, rejuvenation breaks, talent platforms, and mental wellness programmes including Employee Wellness Assistance Program (EWAP) across India.

• Reinforced a high-performance culture through differentiated recognition and meaningful celebrations.

Embedded social impact initiatives into the NIITian experience and culture fabric.

• Enhanced NIITian-family connection through thoughtfully curated "moments that matter" initiatives, including Little NIITian Painting participation.

• Reinforced NIIT spirit and belonging through flagship cultural experiences and celebrations.

•Launched the People-Centric Leadership (PCL) programmes to strengthen inclusive leadership, reduce bias, foster inclusivity, and build positive regard.

OUTCOMES

• Strengthened Employer Brand: Indicators across Amber insights, Employee Satisfaction Scores (ESS), retention trends, and Glassdoor reviews exceeded industry benchmarks, reaffirming NIITs position as an employer of choice.

• Inclusive & Gender-Positive Workforce: Sustained focus on diversity enabled strong female representation across levels and functions, promoting equitable growth opportunities.

Expansion of Inclusion Practices: Disability inclusion efforts were scaled by integrating more persons with disabilities into the workforce, furthering the commitment to equity and accessibility.

INDUSTRY RECOGNITION

• Brandon Hall Awards for the Companys training programmes

Silver award for Excellence in Employee Retention Strategy at Economic Times Human Capital Awards 2026

• Bronze award for Excellence in Rewards & Recognition Strategy at Economic Times Human Capital Awards 2026

•Silver Award for Most Innovative Talent Management Solution at the ET HR World Future Skills Conference 2025 for the Companys Talent Readiness programme

The talent agenda for the next year is aligned with organisational priorities and long-term transformation goals:

LAUNCH

Scale Al-enabled learning and personalised development through Converse Al.

• Drive SuccessFactors Phase 2 adoption, optimisation, and manager enablement.

Expand HR automation and Al-powered insights to improve speed, accuracy, and employee experience.

Strengthen future-ready capabilities in Al, leadership agility, collaboration, and customer-centricity.

REINFORCE

• Accelerate career growth, internal mobility, and succession readiness for critical roles.

• Build stronger internal talent pipelines and prioritise internal hiring where feasible.

• Reinforce the NIITian experience through engagement, inclusion, and culture-building initiatives.

Deepen data-driven people decisions through advanced HR analytics and workforce insights.

SUSTAIN

• Continue strengthening manager capability and people-centric leadership across levels.

• Sustain focused leadership development through Catalyst Club, LDP (Leadership Development Programmes), and MDP (Manager Development Programmes).

• Expand the coaching culture to improve leadership effectiveness and team engagement.

• Sustain high-impact hybrid work practices that enhance productivity and employee experience.

FUTURE OUTLOOK

Looking ahead, NLSL sees a compelling opportunity to lead the global corporate learning market. With two strategic acquisitions completed in FY26, MST Group in the DACH region and SweetRush in the USA, the Company has meaningfully strengthened its geographic reach, capability stack, and client base.

With estimated annual spending of USD 400 billion on L&D, low single-digit penetration and increasing propensity to outsource, training outsourcing continues to represent an immense, multi-year growth opportunity. NLSL, being one of the largest providers of managed training services, is uniquely positioned to benefit from this opportunity as companies seek greater efficiency and effectiveness from their L&D spending.

The Companys growth strategy is focused on deepening existing client relationships, winning new clients, and expanding into new markets and verticals. A broader client base and increasing scale are expected to improve revenue diversification and reduce the impact of volatility within individual accounts, creating a stronger foundation for sustained growth over the medium term.

The Company is committed to maintaining ongoing investments in innovation to ensure customer satisfaction, in advisory services to foster thought leadership, and in sales and marketing to build a global platform for large-scale comprehensive deals aimed at accelerating growth.

FY26 saw strong traction for NLSLs Al-enabled offerings, addition of 21 new logos and 18% growth in Revenue Visibility. With high contract retention, industry-leading NPS, and industry analysts recognition at pole position in Al for learning, NLSL enters FY27 with strong momentum and a clear strategic roadmap, notwithstanding the risk of disruption from geopolitical or macroeconomic volatility.

RISKS AND CONCERNS

NLSL services customers in 40+ countries. As a global enterprise, the Company faces a variety of risks. Key risks include macroeconomic and geopolitical volatility, changes in client spending, customer concentration, and foreign exchange movements. The rapid evolution of Al presents both a significant opportunity and a source of disruption, requiring continued investment and adaptation. The Company also actively manages risks relating to talent, cybersecurity and data privacy, as well as the integration of acquired businesses and the realisation of expected strategic and operational benefits. Risk management is, therefore, an integral part of the Companys core processes and involves recording, monitoring, independent testing, and controlling of the internal functions by establishing the Risk Control Matrix (RCM). The RCM ensures process control, while the Business Risk Management (BRM) framework addresses business objectives and Entity Level Control (ELC) provides comprehensive risk reporting.

NLSL has established a comprehensive Enterprise Risk Management (ERM) framework across the organisation to enhance risk visibility, strengthen governance, and embed a culture of proactive risk management. The framework is aligned with globally accepted standards and leading practices and has been integrated with strategic and operational decision-making processes.

The ERM framework enables systematic identification, assessment, mitigation, monitoring, and reporting of risks that may impact the achievement of the Companys strategic objectives, particularly in an increasingly disruptive global environment. It supports informed decision-making by incorporating risk considerations into all major business decisions. The Companys risk framework encompasses strategic risks, operational risks, financial risks, governance risks, and information technology risks.

STRATEGIC RISK

Risks that may challenge the core assumptions of the Companys business strategy and long-term objectives.

Risks arising from areas such as financial reporting, treasury operations, liquidity management, credit exposures, and asset valuation.

Risks to financial and reputational standing resulting from non-compliance with laws, regulations, internal policies, codes of conduct, or ethical standards.

Risks stemming from internal processes, systems, or human resources that may affect the Companys ability to execute its strategy.

Risks related to system failures, cyber threats, human error, or disruptions caused by natural disasters or pandemics.

The Risk Management Committee, in conjunction with senior management, reviews the risk framework at regular intervals and provides oversight on the effectiveness of controls and mitigation measures. The committee also evaluates the dynamic risk landscape to ensure the framework remains relevant and responsive to emerging challenges. The Committee met twice during FY26 to evaluate risks and discuss updates to the mitigation plan.

Risk-taking remains an inherent aspect of value creation. As such, risk appetite is calibrated across business lines to maintain a balance between pursuing growth opportunities and safeguarding stakeholder interests. The risk-return profile of each business is assessed to maximise long-term, risk-adjusted shareholder value.

ENTERPRISE RISK MANAGEMENT FRAMEWORK

NLSL continues to strengthen its Enterprise Risk Management (ERM) framework, developed in alignment with globally recognised standards such as COSO and ISO 31000. The framework has been tailored to the specific needs of the business, ensuring comprehensive risk identification, assessment, and mitigation strategies are embedded within operational and strategic decision-making.

Risks are proactively identified in consultation with business leaders and prioritised based on potential impact. Key risk areas include customer concentration, competitive dynamics, talent, cybersecurity and data privacy, investment exposures, and foreign exchange volatility. The Company has implemented a robust set of internal controls over financial reporting, which have been assessed to be both adequate and effective in their operation.

At the enterprise level, the risk management approach is designed to address material risks across the organisation, guided by historical experience, prevailing macroeconomic and industry conditions, and future strategic initiatives. Mitigation strategies are developed in tandem with business planning processes, ensuring alignment with operational priorities. Oversight of risk controls and compliance is conducted through the internal Audit and Assurance organisation, with regular updates presented to relevant governance bodies.

Risks are categorised into two principal domains: External Risks and Internal Risks, each with defined mitigation plans. As part of the overall risk management discipline, regular reviews and updates to the risk register are conducted to remain responsive to emerging risks and opportunities.

The Company remains diversified across service offerings and geographies, which helps mitigate sectoral and regional volatility. While customer concentration remains a monitored area, with the top five customers contributing approximately 32% of total revenue in FY26 (vs 33% last year), renewal rates have remained strong, and consistent new client additions (including seven marquee customers through MST Group) have offset concentration risk. The Company now services 110 Annuity Clients globally. This resilience has supported business continuity through macroeconomic uncertainty and ongoing recovery cycles.

To manage technology and Al disruption risks, the Company has launched several Al-led initiatives along with a dedicated team for Al, aimed at innovation, operational enhancement, and long-term competitiveness. These measures are also expected to reduce risks associated with rapid technological change.

In response to environmental risks, sustainability has been embedded into core operations through the adoption of the 3R Principle: Reduce, Reuse, Recycle. Initiatives include increased use of renewable energy, achievement of zero wastewater discharge, and continuous monitoring of fuel usage, hazardous materials, and plastics consumption.

The Companys strong balance sheet and liquidity position provide significant resilience against external shocks and reinforce stakeholder confidence, including that of global clients, partners, and employees. The ERM framework continues to evolve, with risk governance practices reviewed periodically to ensure robustness, relevance, and alignment with long-term strategic objectives.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adopted global practices for evaluating and reporting on internal controls based on its operational experience in multiple countries. It has also implemented one of the leading ERP solutions in its global operations to integrate various facets of business operations, including Human Resources, Finance, Logistics, and Sales. This has enabled the Company to control and monitor its worldwide operations and strengthen its internal controls. The evaluation of internal controls is an integral part of the plan for the Audit & Assurance organisation.

Disclaimer

Statements in this management discussion and analysis describing the Companys views about the industry, objectives, projections, estimates, and expectations may be "forward-looking statements" within the meaning of applicable laws and regulations. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances, or achievements could differ materially from those expressed or implied in such statements. Readers are advised not to place undue reliance on these statements and are encouraged to refer to the Companys audited financial statements and regulatory filings for a more comprehensive view of its performance and position.