Nukleus Office Solutions Ltd Management Discussions

Management Discussion and Analysts Report

For the Financial Year Ended March31,2025

1. Overview of the Business and Economic Environment

Nukleus Office Solutions Limited (the Company 11 ) operates in the fast-evolving segment of co-working, managed, flexible, and virtual office space solutions. The Compa ny caters to the g rowing needs of corporates, startups, SMEs, and professionals who are increasingly opting for hybrid, scalable, and cost-effective workspace options.

FY 2024-25 was a landmark year For the Company, marked by the successful completion oF its Initial Public Offering { IPO) and listing on the BSE SME Platform in March 2025. This milestone reflects the

confidence of stakeholders and positions Nukleus for accelerated growth and greater public visibility

On the macroeconomic front, Indias GDP growth of around 7% and strong service sector momentum supported business expansion and entrepreneurial activity. The workplace ecosystem in India is undergoing structural transformation driven by digitization, flexibility, and decentralization of work. These trends underpin the increasing demand For coworking and managed office spaces.

2. Financial Performance Highlights

The Company delivered strong financial performance in FY 2024-25, backed by centre-level operational efficiency, improved occupancy, and expansion of client portfolio:

Particulars	FY 2024-25 (Rs, in Lakhs)	FY 2023-24 (Rs. In Lakhs)
Revenue from Operations	2870.52	1712.76
Other Income	13.72	3.65
Total Income	2004.24	1716.41
Total Expenses	2609.01	7556.42
Profit Before Tax	274-43	159.98
Tax Expense	60.21	40.27
Profit After Tax	206.21	119.72

3. Industry Structure &. Developments

The Indian fiexibte workspace market has witnessed strong momentum and is projected to grow at a CAGR of over 15% between 2023-28. India is currently the second-largest flexible workspace market in theAPAC region.

Key Developments:

- Hybrid work culture: Corporates are shifting to hybrid models, resulting in greater adoption of managed a nd on-demand workspaces.

- Enterprise demand: Enterprises account for -50% of co-working occupiers in India, marking a shift from freelancer/sta rtup dependency.

- Tier il & HI cities: Growing demand beyond metros, especially in cities like Jaipur, Indore, Lucknow, and Bhubaneswar.

- Technology integration: Automation, real-time access, energy efficiency, and visitor management platforms are becoming critical differentiators.

5, Business Strategy and Key Initiatives

The Company s long-term growth strategyfbcuseson:

- Geographical Expansion

- Digital Transformation

- Customer Retention £ Experience

- Brands Institutional Relationships

- Sustainability Initiatives

6. Risk Management and Concerns

The Company has a structured risk management framework overseen by the Audit Committee and Board of Directors. Key risks include lease dependency, client concentration, operational risks, regulatory compliance, and data security- Mitigation measures include audits, diversification, and robust IT systems.

7. Outlook for FY 2025-26

With rising cost pressure in traditional office formats, more businesses are turning to hybrid, virtual, and managed office solutions. Key plans include expanding centres, onboarding enterprise clients, enhancing platforms, and improving ARPD.

8. Internal Control Systems and Their Adequacy

Nukleus has implemented a comprehensive internal control system aligned with its operational complexity. Controls cover finance, procurement, compliance, IT security, and are periodically reviewed by auditors and the Audit Committee.

9. Human Resource Development

As of March 31, 2025, the Company employed a skilled team across key departments. HR policies focus on professional development, incentive structures, and fostering a performance- based culture.

SWOT Analysis

STRENGTHS

* Asset-light, scalable business model

* Strong client relationships and centre-level profitability

* Tech-enabled workspace solutions

* Well-diversified service mix (flexible,

* virtual, managed spaces)

WEAKNESSES

• Dependencyon lease/rental agreements

• Limited geographic diversification (focus on Tier-i markets)

• High sensitivity to real estate cost inflation

OPPORTUNITIES

* Penetration into Tier-11 markets

* Increasing demand from large enterprises

¦ Expansion of virtual office and business address services

¦ Strategic partnerships with aggregators £ REITs

* Integration of ESC practices

THREATS

• Intense competition from PE/VC-funded operators

• Regulatory risks (zoning, safety, lease norms)

• Macroeconomic uncertainty

• Rapid technological disruptions

10. E5G and Corporate Citizenship

The Company undertook digital transformation, energy-efficient upgrades, CSR efforts in education and livelihoods, and adopted paperless workflows to strengthen its sustainability efforts.

Cau denary Statement

Statements in this MDAR relating to the Company s objectives, projections, estimates, expectations, or predictions may be forward-looking statements. Actual results may differ materially due to economic conditions, government pol icies, market factors, and other risks.