Odyssey Technologies Ltd Management Discussions

Pursuant to Regulation 34(3) and Para B of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the amendments thereof, details of the Management discussion and analysis are given below:

Industry structure and development

The industry went through the threat of a massive upheaval during the year. We say the ‘threat of because what actually happened on the ground was very little of what was forecast. Nonetheless, the uncertainty about the direction of the industry continues. The promised, sentient AI (AGI?) seems to have receded but has also shaken the several branches of the IT industry in its wake. It is hard to say at this point if the damage will be permanent or the IT services industry will again shake the dust off and stride towards a new affluence.

Similarly, there has been a lot of noise about Quantum computing and its threat to the security of the networks and data. As we said in last years analysis it is the Governments that are investing or building up this sunrise technology and it is as it should be. However, the quantum scare lobby has its own attractive slogans like ‘harvest now and decrypt later and getting the industry to lobby around that. As with all slogans, there is a minuscule amount of truth in it but in our opinion, does not have any substance for the most part.

Whichever way the industry turns, your company does not see a major threat to its plans and operational models. While we see the AI tools as impacting security by making the attacks more specific and formidable, they do not seem to be helping any in defending against such attacks. It would still not stop a part of our industry from using AI as a marketing ploy and we have already started seeing AI enabled firewalls, AI enabled virus scanners and so on.

Despite the changes in the industry and infusion of intelligent tools, individual human beings and their organizations will continue to be the components that make up the society. They will have to necessarily communicate among themselves.

The components also should have to be individually identified. Thus identity and message integrity will continue to be the essential pillars of society regardless of any technology the future might bring in. As long as these are essential to the structure of our industry and general society, your company will have a meaningful role to play.

Opportunities and Challenges

The company has continued its efforts to operationalize its xorkee framework and the applications therein, primarily the email security services. Being a conceptually new service, it was and continues to be an uphill challenge to gain acceptability in the different sectors. The year 2025-26 saw the acceptance of our secure email service by a few choice educational institutions and we are redoubling the efforts to extend it to the whole of the country during this year.

This is also reflected in the increase in advertising and marketing company intends to increase the investment in these areas significantly during the ensuing year. While the last quarter of

2025-26 saw us focusing in Tamil Nadu, we intend to broad base our efforts covering the entire country during the current year. In addition, we will also make serious efforts to find partners and channels in other countries where the situation is conducive.

The growth and adoption of AI also underscores the need for security of the kind your company offers (and only your company offers for now) and once we overcome the initial resistance born of its unfamiliarity the opportunity space expands significantly.

The resistance to adoption is the only major challenge we are facing. Obsolescence or duplication of this technology by AI is not considered a credible threat in this space. Nor do we believe that newer competitors can arise fast enough to significantly impact our progress.

Product-wise performance

A major portion of the companys revenue still accrued from the legacy products. ‘xorkee and related services saw reasonable user adoption but the revenue from them is around 8%.

The total revenue for the year was 273.02 million rupees. 90.13% of the revenue came from product related services and 9.87% from product licenses.

Of the service revenue, 16.10% from customization and implementation and the rest from Annual Maintenance, onsite services and xorkee subscription.

The product revenue is composed of 77.89% from Snorkel and Crypta, 4.26% from Certrix and eSign, 7.35% from Xorkee and 10.50% from AltaSigna as well as a number of variants of AltaSigna like the NPCI eMandate application.

Outlook

The company remains quite optimistic about the xorkee offerings. We believe that during the year the revenue from xorkee will surpass the license and service revenue from the legacy products.

The companys xorkee offerings have already gained the reputation of being the most user and customer friendly in the market and adoption has been gaining pace. The company remains extremely optimistic in its outlook.

Risks and Concerns

Quantum computing continues to be the only credible though distant technological threat. Competition from players offering inferior technologies but throwing a significant resources into the market will also be a matter of concern. The wars in West Asia will also have some demoralizing influenceon the market, even if they do not have a direct impact on the Indian market.

The attacks on the various infrastructural components both by private and state-sponsored attacks continues to be another risk factor and is further accentuated by the global political uncertainty. We continue to strengthen and depend on our operational processes to make our operations resilient.

As stated above the company has increased the number of sales and marketing personnel during the year and the enhancement will continue this year. Training the force and extending the companys reach within the market continues to be a challenge.

Regulatory measures in the country and outside also can be a matter of concern.

Internal Control Systems

Internal control systems continued to function as effectively as in the past. Top management and the Board of Directors and the Committees thereof continue to be actively involved in ensuring that all controls work as intended.

Financial and Operations Performance

There is a marginal revenue growth of 0.16% with the operating profit margin at 15.49%. The total expenditure during the year was Rupees 248.22 million against 242.35 million last year. The PBT for the year stays at 54.16 million as against 58.28 million last year, a decrease of 7.08%. The tax provision is lower this year at 13.92 million instead of the last years

14.97 million. This has resulted in the net profit of 40.23 million as against 43.31 million last year, a decrease of 7.11%.

The cost of manpower stood at 196.96 million compared to 192.80 million last year, and continues to be the major cost component for the company.

The Company has identified the following as key financial ratios.

Ratios where there has been a significant change from FY 2024-25 to 2025-26 are explained below:

Decline in operating profit margin and Return on networth is due to the marginal increase in sales coupled with significant increase in selling and promotional expenses during the year. The long sales cycle in closing some of the enterprise orders for xorkee services has contributed to the meagre growth in sales.

Decreased current ratio is caused by increase in current liabilities as compared to the previous year.

The improvement in Days Sales Outstanding (DSO) is the result of effective collection methods implemented during the year.

The debt-equity ratio and the debt service coverage ratio are not applicable to the Company since there are no borrowings.

Research and Development

The company continued to spend a substantial portion of its efforts and resources on R & D. In the matter of cryptographic key enabling and usage Odyssey has gained a valuable advantage over other players and it is only the Research efforts that will help us to maintain that advantage.

Human Resources Development

There were one hundred and seventy eight employees in the rolls of Odyssey. Last year the figure stood at one hundred and seventy one. The attrition levels were under control. This has also had the effect of increasing the companys expenditure by way of a raised compensation. The company feels that it should keep up the increased investment in its developmental resources to fully exploit the opportunities available to it at this juncture.