PAN HR Solution Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS Global Economic Environment

The global economy remained resilient during FY 2025-26 despite geopolitical uncertainties, changing trade dynamicsandinflationary pressures in certain regions. Businesses across the world continued to focus on operational efficiency, digital transformation and workforce optimisation to improve productivity and maintain competitiveness. The increasing adoption of Artificial Intelligence (AI), automation and technology-driven business processes is also transforming the manner in which organisations manage their workforce and business operations.

Indian Economic Environment

India continued to remain one of the fastest-growing major economies, supported by strong domestic demand, increasing infrastructure development, digital transformation and favourable demographic trends. Government initiatives promoting formal employment, ease of doing business, skill development and digital governance have further strengthened the countrys economic fundamentals.

Rapid growth in sectors such as e-commerce, quick commerce, logistics, manufacturing, warehousing, infrastructure and facility management has significantly increased the demand for organised workforce solutions. Simultaneously, increasing regulatory compliance requirements and greater emphasis on efficient workforce management have encouraged organisations to partner with professional HR service providers.

Human Resource Services Industry

Indias Human Resource Services industry has witnessed significant transformation in recent years. Organisations are increasingly outsourcing recruitment, staffing, payroll management, compliance administration and workforce management functions to specialised service providers in order to improve operational efficiency, ensure regulatory compliance and focus on their core business activities. The organised staffing industry continues to benefit from the formalisation of the Indian workforce, increasing contractual employment, expansion of Global Capability Centres (GCCs), rising compliance requirements and the growing adoption of technology-enabled HR solutions. Digital payroll platforms, automated compliance systems and AI-enabled recruitment tools are further enhancing operational efficiency and service delivery across the industry.

The long-term outlook for the organised staffing and HR outsourcing industry remains positive, supported by Indias favourable demographic profile, expanding organised sector employment and increasing demand for flexible workforce solutions.

PAN HR Solution Limited – Business Overview

PAN HR Solution Limited is engaged in providing integrated workforce management solutions, including manpower outsourcing, staffing, payroll management, facility management and compliance services. The Company delivers customised human resource solutions to clients across multiple industries by combining domain expertise, operational excellence and technology-enabled processes.

During the Financial Year 2025-26, the Company achieved an important milestone by successfully completing its Initial Public Offering (IPO) and listing its Equity Shares on the SME Platform of BSE Limited. The listing has strengthened the Companys capital base, enhanced its corporate governance framework and positioned it for the next phase of sustainable growth. The IPO proceeds are expected to support working capital requirements, enabling the Company to undertake larger customer engagements and strengthen its operational capabilities.

The Company maintained a workforce deployment base exceeding 10,000 personnel across client locations while continuing to provide workforce solutions to leading organisations operating in sectors such as e-commerce, quick commerce, logistics, manufacturing and facility management. The Companys continued focus on operational discipline, customer satisfaction and regulatory compliance enabled it to strengthen its market presence during the year.

The Company remains committed to creating long-term stakeholder value by expanding its service portfolio, strengthening client relationships, enhancing operational efficiency and leveraging technology-driven HR solutions.

2. OPPORTUNITIES AND THREATS Opportunities

Indias evolving employment landscape continues to create significant opportunities for organised HR service providers. Increasing formalisation of employment, growing preference for outsourced workforce solutions and rapid digital transformation are expected to support long-term industry growth.

The Company believes the following factors will continue to drive future growth:

Increasing demand for organised manpower outsourcing and staffing solutions across industries.

Expansion of e-commerce, quick commerce, logistics, warehousing, manufacturing and facility management sectors.

Rising adoption of payroll outsourcing, statutory compliance management and HR administration services by corporates and MSMEs.

Growing focus on labour law compliance and organised workforce management.

Government initiatives promoting employment generation, skill development and workforce formalisation.

Technology-led transformation through digital payroll systems, HR automation and data-driven workforce management.

• Expansion into new geographical markets and industry verticals.

Deployment of IPO proceeds towards working capital expansion and implementation of the Pay & Collect operating model, enabling the Company to undertake larger customer engagements and strengthen long-term business scalability.

Threats

While the industry outlook remains positive, the Company continues to operate in a competitive and evolving business environment. The key challenges that may impact business performance include:

Intense competition from organised and unorganised manpower service providers.

• Changes in labour laws, statutory regulations and taxation policies.

Pricing pressures arising from increasing competition.

• Delay in customer payments leading to higher working capital requirements.

• Rapid technological advancements requiring continuous investment in digital capabilities.

Macroeconomic uncertainties affecting hiring activities across client industries.

• Client concentration and changes in customer business priorities.

The Company continuously monitors market developments and adopts appropriate business strategies to strengthen operational resilience, improve service quality, enhance customer satisfaction and maintain sustainable long-term growth.

3. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

PAN HR Solution Limited operates in the business of providing integrated human resource solutions with a focus on manpower outsourcing, staffing, payroll management, facility management and statutory compliance services. The Companys diversified service portfolio enables it to cater to the evolving workforce requirements of clients across multiple industries.

During the Financial Year under review, the Company continued to strengthen its operational capabilities and customer relationships while maintaining service excellence across its core business verticals. The Company successfully maintained a workforce deployment base exceeding 10,000 personnel across client locations, reflecting the confidence reposed by customers in its service delivery capabilities.

The Companys principal business verticals comprise:

• Manpower Outsourcing Services

Staffing & Recruitment Solutions

• Payroll Management Services

• Facility Management Services

HR Compliance & Workforce Management Solutions

The Companys business continues to be supported by long-standing client relationships, efficient workforce deployment, timely payroll processing and strong statutory compliance practices. During the year, the Company continued servicing clients across e-commerce, quick commerce, logistics, manufacturing and facility management sectors while further strengthening its market presence.

4. OUTLOOK

The outlook for Indias organised human resource services industry remains positive, supported by favourable demographic trends, increasing formalisation of employment, rising demand for flexible workforce solutions and continued expansion across logistics, manufacturing, warehousing and digital commerce sectors.

The successful listing of the Companys Equity Shares on the SME Platform of BSE Limited during FY 2025-26 has marked an important milestone in its growth journey. The strengthened capital base and improved financial position are expected to support the Companys long-term expansion strategy and enhance its ability to undertake larger customer engagements.

Going forward, the Company intends to focus on:

Deployment of IPO proceeds towards working capital expansion.

• Accelerating the transition towards the Pay & Collect operating model.

• Strengthening its presence across high-growth sectors including e-commerce, quick commerce, logistics and industrial services.

• Expanding into new geographical markets and industry verticals.

Increasing the contribution from higher-margin service offerings such as payroll outsourcing, compliance management and HR consulting.

Leveraging technology to improve operational efficiency, service quality and customer experience.

Building long-term customer relationships through customised workforce solutions and reliable service delivery.

The Management remains confident that the Companys scalable business model, experienced leadership team, disciplined execution and customer-centric approach will enable it to capitalise on emerging opportunities and create sustainable value for all stakeholders.

5. RISKS AND CONCERNS

Risk management forms an integral part of the Companys business strategy. The Company continuously identifies, evaluates and manages various risks that may impact its operations while adopting appropriate mitigation measures to minimise their effect.

The major risks identified by the Company include:

Talent Availability Risk

The success of the Companys business depends upon its ability to recruit, deploy and retain skilled manpower. Any shortage of qualified personnel may impact service delivery and business growth.

Mitigation

The Company continuously strengthens its recruitment network, maintains a robust talent pipeline and undertakes regular employee engagement and capability development initiatives.

Regulatory & Compliance Risk

The Company operates in an industry governed by various labour laws, taxation regulations and statutory compliance requirements. Changes in the regulatory environment may impact business operations.

Mitigation

The Company has established comprehensive compliance mechanisms, periodic internal reviews and standard operating procedures to ensure adherence to all applicable laws and regulations.

Customer Credit Risk

The business requires efficient working capital management due to the time gap between employee payouts and customer collections.

Mitigation

The Company follows prudent credit evaluation practices, continuous monitoring of receivables and disciplined collection mechanisms to maintain healthy cash flows.

Technology Risk

Rapid technological advancements require continuous investment in digital systems, payroll automation and workforce management platforms.

Mitigation

The Company continues to invest in technology-enabled processes to improve operational efficiency, payroll accuracy, compliance management and customer service.

Business Competition Risk

The organised staffingindustry remains highly competitive with the presence of established national players as well as regional service providers.

Mitigation

The Company focuses on customer retention, quality service delivery, operational excellence and customised workforce solutions to strengthen its competitive position.

Macroeconomic Risk

Economic slowdown, geopolitical developments or reduced hiring activities across industries may impact demand for workforce solutions.

Mitigation

The Companys diversified customer base across multiple industries helps reduce dependence on any single sector while providing resilience against sector-specific slowdowns.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems commensurate with the size, nature and complexity of its business operations. These systems are designed to ensure the orderly and efficient conduct of business, safeguarding of assets, accuracy of financial reporting, compliance with applicable laws and effective management of operational risks.

Appropriate policies, standard operating procedures and financial controls have been implemented to ensure reliability of financial information, timely statutory compliance and efficient utilisation of resources.

The Audit Committee periodically reviews the effectiveness of internal financial controls, internal audit observations and implementation of corrective measures. Management also undertakes continuous evaluation of internal control processes to strengthen governance standards and operational efficiency.

During the Financial Year under review, the Company maintained internal control systems commensurate with the size, nature and complexity of its operations. The Statutory Auditors have reported an exception relating to reconciliation of certain employee-related payables in their report on Internal Financial Controls over Financial Reporting. The Company is taking appropriate corrective measures to strengthen the reconciliation process.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Financial Year 2025-26 was a significant milestone in the Companys growth journey. During the year, the Company continued to strengthen its operational capabilities, expand its customer base and enhance its service delivery across manpower outsourcing, staffing, payroll management and allied workforce solutions. The successful listing of the Companys Equity Shares on the SME Platform of BSE Limited further strengthened its financial position and reinforced its commitment towards higher standards of corporate governance and transparency.

Revenue Performance

Revenue from operations for FY 2025 26 stood at 23,451.00 Lakhs as against 28,318.88 Lakhs in the previous financial year.

Total income stood at 23,525.76 Lakhs.

Profitability

EBITDA for FY 2025 26 stood at 855.83 Lakhs with EBITDA margin of 3.64%. Profit Before Tax stood at 820.47 Lakhs.

Profit After Tax stood at 750.29 Lakhs.

Net Profit Margin stood at 3.2%.

The Companys profitability reflected improvement in operational discipline, productivity enhancement and cost optimisation initiatives.

BALANCE SHEET POSITION

The Company maintained a healthy financial profile during the year. Net Worth stood at 3,751.18 Lakhs.

Cash and Bank Balance stood at 2,433.61 Lakhs.

The Company maintained a low debt profile and strengthened liquidity position to support future growth opportunities.

OPERATIONAL HIGHLIGHTS

Key operational achievements during FY 2025–26:

Workforce deployment exceeded 10,000 personnel

• Continued servicing leading clients across key industries

• Strengthened payroll and compliance execution capabilities

Improved cost efficiency and operating leverage

Successful completion of IPO and strengthening of capital structure

Continued focus on scalable business expansion

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company firmly believes that its employees are its most valuable asset and the key drivers of sustainable growth. The Company continues to focus on attracting, developing and retaining competent professionals while fostering a performance-oriented, collaborative and ethical work culture.

During the year, the Company strengthened its recruitment processes, employee engagement initiatives and learning and development programmes to enhance employee productivity and service quality. Continuous efforts were made to improve workforce capability, operational efficiency and customer service standards.

The Company maintained cordial industrial relations throughout the year. There were no significant industrial disputes during the Financial

Year and the Company continued to maintain harmonious relations with its employees while ensuring compliance with all applicable labour laws and statutory requirements.

9. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Pursuant to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of significant changes (i.e., change of 25% or more as compared to the immediately preceding financial year) in key financial ratios are provided below:

Particulars	FY 2025-26	FY 2024-25	% Change	Explanation
Debtors Turnover Ratio	28.63	26.16	9.43%	NA
Inventory Turnover Ratio*	Not Applicable	Not Applicable	-	The Company operates in the service industry and does not maintain inventory.
Interest Coverage Ratio	Not Applicable	Not Applicable	-	There is no debt in Company and therefore not applicable
Current Ratio	2.65	1.70	55.76%	Due to more balance in FDR
Debt Equity Ratio	Not Applicable	Not Applicable	-	There is no debt in Company and therefore not applicable
Operating Profit Margin (%)	3.49%	2.42%	19.69%	Core cost reductions overpaced the decline in top linerevenue
Net Profit Margin (%)	3.2%	3.5%	-7.53%	In previous year prior period adjustment were taken

10. CHANGE IN RETURN ON NET WORTH

The Return on Net Worth of the Company stood at 26.96% during the Financial Year 2025-26 as compared to 71.76% in the previous financial year.

The movement in the Return on Net Worth during the year was primarily attributable to ability and changes in the profit increase in Companys net worth following the successfulInitialPublicOffering. The strengthened capital base is expected to support future business growth, enhance operational capacity and create long-term value for stakeholders.

11. CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis Report describing the Companys objectives, expectations, projections, estimates, strategies and future outlook may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, government policies, taxation, regulatory developments, competitive environment, technological changes and other factors beyond the Companys control.

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, except as required under applicable laws.

	For and on behalf of
	Board of Directors of PAN HR SOLUTION LIMITED
	( formerly known as PAN HR SOLUTION PRIVATE LIMITED )
	Sd/-
	Rajeev Kumar
	Chairman and Managing Director
	DIN: 07368623
Date: 20.08.2026
Place: Noida