NIS Management Ltd Management Discussions

Industry and Business Overview

NIS Management Limited ("the Company") operates in the security and facility management services industry, which is predominantly manpower-driven and requires a high degree of operational discipline, workforce management, regulatory compliance, customer servicing and continuous monitoring of service quality.

The Company is engaged in providing security guarding services, facility management services and allied services to customers across various sectors. The Company also undertakes integrated and specialised service requirements, including technology-enabled and allied solutions, depending upon the requirements of its customers.

The security and facility management industry continues to evolve from traditional manpower-based security and housekeeping arrangements towards integrated facility management, technology-enabled security, electronic surveillance, CCTV solutions, workforce management systems and bundled service offerings. Increasing outsourcing by corporates, institutions, industrial establishments, infrastructure companies, government organisations and other establishments provides a continuing opportunity for organised service providers.

The industry, however, remains highly competitive and is characterised by significant dependence on human resources. The ability to recruit, train, deploy and retain suitable personnel, while maintaining statutory compliance and service quality, remains critical to sustainable growth. The Company continues to strengthen its operational capabilities and customer relationships and is exploring opportunities to provide integrated, technology-enabled and value-added solutions to its customers. The Company believes that its experience in the sector, established customer relationships and operational capabilities provide a sound foundation for pursuing future growth opportunities.

Business Performance and Operational Overview

During the financial year 2025-26, the Company continued to focus on strengthening its core security and facility management operations while pursuing opportunities for business expansion and diversification.

TheCompanyremainedfocusedonmaintainingservicequality, ensuring timely deployment of manpower, strengthening customer relationships and improving operational efficiency. Considering the manpower-intensive nature of the business, effective workforce planning, employee deployment, attendance monitoring, statutory compliance and cost control continue to remain key elements of the Companys operating strategy.

The Company also continued to evaluate opportunities for expanding its service portfolio and moving towards integrated solutions rather than operating solely as a traditional manpower service provider. The Company believes that combining manpower-based services with technology-enabled solutions can enhance customer value, improve monitoring and create opportunities for deeper and longer-term customer relationships.

The Company is also focusing on strengthening its geographical presence and improving the scalability of its operating model. The Management believes that replication of successful operating models across locations, supported by appropriate technology and management systems, can contribute to sustainable growth.

Financial Performance

The financial performance of the Company during the financial year ended 31 March 2026 reflects continued growth in business operations.

Standalone Financial Performance

The Company recorded total income of Rs.413.78 crore during FY 2025-26 as compared with Rs.376.07 crore during FY 2024-25, representing an increase of approximately 10.03%. Revenue from operations increased from Rs.373.93 crore in FY 2024-25 to Rs.411.44 crore in FY 2025-26, representing a growth of approximately 10.03%.

The increase in revenue from operations reflects the continued expansion of the Companys business and its ability to retain and develop its customer base while pursuing additional business opportunities.

The Companys focus during the year remained on balancing growth with operational efficiency, cost management, statutory compliance and service delivery. Given the manpower-intensive character of the business, the Management continues to monitor employee-related costs, deployment efficiency, operating overheads and other costs closely.

Consolidated Financial Performance

At the consolidated level, the Group continued to record growth in its operating revenue.

Consolidated revenue from operations increased from Rs.402.17 crore in FY 2024-25 to Rs.433.40 crore in FY 2025-26, representing an increase of approximately 7.76%. The consolidated performance reflects the contribution of the Companys business operations together with the activities of its subsidiaries and group entities. The Management continues to evaluate the performance of each business vertical with a view to improving operational efficiency, strengthening synergies and creating sustainable value for stakeholders.

Overall, the Company remains focused on achieving profitable growth through a combination of organic business development, customer retention, geographical expansion, service diversification, operational efficiencies and technology adoption.

Key Financial and Operating Drivers

The Companys financial performance is influenced by several factors, including: • growth in the number and size of customer contracts; • retention and renewal of existing contracts; • deployment of security personnel and facility management manpower; • prevailing minimum wages and other statutory employee-related costs; • employee productivity and deployment efficiency; • competitive pricing in tenders and contracts; • customer mix and geographical distribution; • ability to provide value-added and integrated services; • technology adoption and process automation; and • effective management of working capital and operating expenses.

The Management continues to monitor these factors closely and take appropriate operational measures to support sustainable growth.

Opportunities

The Company believes that the security and facility management industry offers significant opportunities for organised and professionally managed service providers. Increasing outsourcing of non-core activities by corporates, institutions, industrial establishments, infrastructure projects, government organisations and other establishments is expected to support demand for professional security and facility management services.

The Company sees opportunities in the following areas: a. Outsourcing of Security and Facility Management Businesses are increasingly outsourcing non-core activities to specialised service providers in order to improve operational efficiency and focus on their core activities. This creates opportunities for established security and facility management companies with the ability to provide reliable and compliant services. b. Integrated Facility Management Customers are increasingly seeking integrated service arrangements under which multiple facility-related requirements can be managed through a single service provider. The Company intends to leverage its existing capabilities to pursue opportunities in integrated facility management and bundled service offerings. c. Technology-enabled Security Solutions Technology is increasingly becoming an integral part of the security industry. CCTV surveillance, electronic security systems, monitoring solutions, workforce management systems, dashboards, digital reporting and other technology-enabled solutions can complement traditional manpower-based security services.

The Company intends to continue exploring technology-enabled solutions that can improve service quality, monitoring, transparency and customer experience. d. Government and Institutional Opportunities Government departments, public sector organisations, infrastructure projects, educational institutions, healthcare establishments and other large institutions continue to outsource security and facility management requirements. Participation in appropriate tenders and institutional contracts provides opportunities for expanding the Companys customer base. e. Geographical Expansion The Company believes that expansion into new geographical markets, together with strengthening its presence in existing markets, can provide additional opportunities for growth. The Management will continue to evaluate opportunities based on market potential, customer requirements, operating economics and availability of appropriate infrastructure. f. Cross-selling and Value-added Services The Companys existing customer relationships provide opportunities to offer additional services and integrated solutions. The Company intends to explore opportunities for increasing the share of business derived from existing customers by offering complementary and value-added services.

Threats and Risks

The Companys operations are subject to various business, operational, financial and regulatory risks. The principal risks relevant to the Companys business include the following:

Competition Risk

The security and facility management industry is competitive and includes both organised and unorganised service providers. Aggressive pricing by competitors, particularly in tender-based contracts, may exert pressure on margins. The Company seeks to address this risk by focusing on service quality, customer relationships, operational efficiency, compliance and value-added solutions rather than relying solely on price-based competition.

Manpower Availability and Retention

The Companys operations are substantially dependent upon the availability of trained and suitable manpower. Employee attrition, shortages of personnel, absenteeism and challenges in recruitment can affect service delivery.

The Company continues to focus on recruitment, workforce management, deployment planning and employee engagement to address these challenges.

Regulatory and Statutory Compliance

The industry is subject to various labour, employment, social security, licensing and other statutory requirements. Non-compliance may result in financial, operational and reputational consequences.

The Company places significant emphasis on statutory compliance and monitoring of applicable requirements across its operations.

Customer Concentration

A portion of the Companys business is dependent upon key customers. Loss, non-renewal or reduction in business from a significant customer may adversely affect revenue and profitability.

The Company seeks to mitigate customer concentration risk through customer diversification, expansion into new markets and development of additional business opportunities.

Pricing Pressure

Tender-based contracts and competitive bidding may result in pricing pressure. The Company continues to evaluate contracts based on commercial viability, cost structures, customer requirements and long-term business potential.

Technology Risk

The security industry is undergoing technological transformation. Failure to adopt appropriate technologies may affect competitiveness and customer expectations. The Company is accordingly evaluating technology-enabled solutions, digital processes, dashboards, automation and other initiatives aimed at improving operational efficiency and service delivery.

Economic and Business Environment

Changes in economic conditions, business activity, inflation, government expenditure and overall market conditions may influence demand for outsourced services.

The Company seeks to maintain operational flexibility and cost discipline to respond appropriately to changes in the business environment.

Internal Control Systems and Adequacy

The Company has established internal financial and operational controls commensurate with the nature, size and complexity of its business.

The internal control framework is designed to provide reasonable assurance regarding the reliability of financial reporting, safeguarding of assets, prevention and detection of errors and irregularities, compliance with applicable laws and regulations, and efficient conduct of business operations. The Company has an internal audit mechanism which assists the Management and the Audit Committee in periodically reviewing financial, operational and process-related controls.

Internal audit observations are placed before the appropriate management and governance forums for consideration and necessary corrective measures.

The Company continues to strengthen its internal control environment with particular emphasis on process standardisation, maker-checker controls, documentation, statutory compliance, vendor management, accounting processes, asset verification, receivable monitoring and effective utilisation of enterprise systems.

The Management believes that the internal control systems are being continuously strengthened in line with the Companys growing scale of operations.

Human Resources and Industrial Relations

Human resources constitute a critical component of the Companys business model. The Companys ability to recruit, train, deploy and retain personnel is essential for maintaining service quality and meeting customer commitments.

The Company continues to focus on manpower planning, recruitment, employee deployment, training, statutory compliance and employee welfare.

The Company recognises that employee engagement, timely payment of wages and statutory dues, training and appropriate supervision are important for maintaining workforce stability and customer satisfaction.

The Company seeks to maintain harmonious industrial relations and an environment that supports operational discipline and employee productivity.

Technology and Digital Transformation

The Company recognises technology as an important enabler for improving the scalability and efficiency of its business. During the year, the Company continued to work towards strengthening its technology and digital capabilities, including development of recruitment-related systems, ERP modules, dashboards and other technology-enabled processes.

The Company has also initiated steps towards digital transformationandcontinuestoevaluatetechnologysolutions that can improve recruitment, workforce management, operational monitoring, management reporting and customer servicing.

The Management believes that technology-led process improvements can reduce manual intervention, enhance transparency, strengthen controls and provide management with timely information for decision-making.

Operational Efficiency

As the Companys business is substantially manpower-driven, operational efficiency remains a key determinant of profitability.

The Company continues to focus on improving manpower utilisation, deployment efficiency, supervisory mechanisms, process standardisation, cost control and technology-assisted monitoring.

The Management is also focused on strengthening the operating processes required to support the Companys increasing scale of operations while maintaining service quality and compliance standards.

Outlook

The Management remains cautiously optimistic about the Companys growth prospects.

The Companys growth strategy is focused on strengthening its core security and facility management business while progressively increasing its presence in integrated facility management, technology-enabled security solutions and other allied services.

The Company intends to pursue growth through:

• strengthening existing customer relationships;

• acquiring new customers and contracts;

• expanding geographical presence;

• participating in suitable institutional and government opportunities;

• increasing the scope of integrated facility management services;

• expanding technology-enabled solutions;

• improving manpower productivity and operational efficiency;

• strengthening digital and ERP-enabled processes;

• improving internal controls and governance mechanisms; and

• maintaining financial discipline while pursuing growth. The Company will continue to evaluate opportunities prudently, taking into account commercial viability, execution capabilities, customer requirements and the overall business environment.

Forward-looking Statement

This Management Discussion and Analysis contains certain forward-looking statements relating to the Companys business, prospects, growth strategies and industry outlook. Such statements are based on the Managements current expectations, estimates, assumptions and assessment of the business environment.

Actual results may differ materially from those expressed or implied in such statements due to various factors, including changes in economic conditions, competitive intensity, regulatory requirements, manpower availability, wage levels, customer requirements, pricing conditions, technology developments and other risks and uncertainties that may affect the Companys operations.

The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, changes in assumptions or otherwise, except as may be required under applicable laws and regulations.

Overall Management Perspective

FY 2025-26 was a year of continued business growth for the Company. Standalone revenue from operations increased to Rs.411.44 crore from Rs.373.93 crore, while consolidated revenue from operations increased to Rs.433.40 crore from Rs.402.17 crore in the previous financial year.

The Management remains focused on building upon this growth by strengthening the Companys core business, expanding its geographical and customer base, improving operational productivity, enhancing internal systems and controls, and progressively adopting technology-enabled solutions.

The Companys objective is to achieve sustainable and profitable growth while maintaining service quality, regulatory compliance, customer satisfaction and financial discipline. The Management believes that the Companys operating experience, customer relationships, service capabilities and ongoing technology and process initiatives provide a strong foundation for its future development.

Declaration signed by the chief executive officer stating that the members of Board of directors and senior management personnel have affirmed Compliance with the code of conduct of board of directors and senior management Since, our Company falls in the ambit of SME Listed entity; hence compliance with the provisions of declaration signed by the chief executive officer stating that the members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management shall not apply to the Company and it does not form the part of the Annual Report for the financial year 2025-26.

Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance

Since, our Company falls in the ambit of SME Listed entity; hence compliance with the provisions of Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall not apply to the Company and it does not form the part of the Annual Report for the financial year 2025-26.

Details of Significant Changes in Key Financial Ratios

Ratio	FY 26 2025-	FY 25 2024-	Variance in %	Reason for variance by more than 25%
Current Ratio (in times)	2.59	2.30	11%	NA
Debt-Equity Ratio (in times)	0.42	0.55	-30%	Decreased due to reduction in borrowings and increase in shareholders equity during the year
Debt service coverage ratio (in times)	2.47	2.36	6%	NA
Return in equity ratio (%)	-1	7	789%	Declined due to losses incurredduring the year.
Inventory turnover ratio (in times)	222.93	321.63	-44%	Decreased due to increase inaverage inventory
Trade Receivables Turnover Ratio (in times)	3.19	3.25	-2%	NA
Trade payables turnover ratio (in times)	4.66	5.38	-15%	NA
Net capital turnover ratio (in times)	2.93	3.36	-15%	NA
Net profit ratio (%)	-	5	1185%	Negative during the year due to losses incurred and decline in overall profitability
Return on capital employed (%)	1	18	-1178%	Decreased significantly dueto lower EBIT and losses incurred during the year
Return on investment (%)	-	-	-	NA

Cautionary Statement

The statements in the "Management Discussion and Analysis Report" section describes the company objectives, projections, estimates, expectations, and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.

	For and on behalf of the Board of Directors
	NIS Management Limited
	Sd/-	Sd/-
	Debajit Choudhury	Rina Choudhury
	Managing Director	Whole Time Director
	DIN: 00932489	DIN: 00881320
Registered Office:
1st Floor, Fl-1A(W)
489 Madurdaha, Kalikapur
Kolkata- 700 107
Dated: 2nd September, 20