Photon Capital Advisors Ltd Management Discussions

Industry structure and developments

Your Company has commenced operations in the business of Software Services, Information Technology (IT) and Information Technology Enabled Services (ITES). The Company is actively looking to enter the Data Centre space, either by providing components for Data Centres or by offering critical software services related to Data Centres and allied activities. The IT and ITES industry in India continues to be one of the fastest-growing sectors, driven by digital transformation, cloud adoption, artificial intelligence, and increasing demand for data centre infrastructure. The Indian data centre market is witnessing significant expansion, supported by government initiatives such as the Digital India programme, the Production Linked Incentive (PLI) scheme for IT hardware, and the growing need for domestic data localisation and cloud services. Your Company intends to capitalise on these structural tailwinds by scaling its existing software development and IT consulting operations, while simultaneously evaluating opportunities to provide components and critical software solutions for data centre operations.

Opportunities and threats

The Company sees significant opportunities in the burgeoning demand for software services, IT outsourcing, and data centre infrastructure both within India and globally. The accelerated shift towards digitalisation by enterprises, government entities, and SMEs presents a robust addressable market for the Companys existing IT/ITES service offerings. Additionally, the data centre component and critical software services segment offers avenues for strategic partnerships with domestic and international technology providers as the Company looks to expand into this space. However, the sector is characterised by rapid technological change, intense competition from established IT majors and emerging start-ups, cybersecurity risks, talent attrition, and evolving data protection and privacy regulations. Your Company remains committed to mitigating these threats through continuous investment in technology, talent acquisition, stringent cybersecurity protocols, and adherence to regulatory compliance standards.

Segment-wise or product-wise performance

The Company is presently operating in a single segment comprising Software Services, IT and ITES. During the year under review, the revenue from operations from this segment is Rs. 144.00 lakhs. The Company is actively evaluating entry into the Data Centre space by way of providing components or critical software services related to Data Centres, and will report segment-wise performance accordingly upon commencement of such operations. The Company is in the process of scaling its existing IT/ITES operations, building client relationships, and expanding its service portfolio to drive revenue growth in the forthcoming financial years.

Outlook

Your Company is optimistic about the growth trajectory of the IT/ITES and data centre infrastructure sectors. The outlook for the Companys existing Software Services, IT and ITES business remains positive, underpinned by increasing enterprise digital spend, government-led digital infrastructure projects, and the proliferation of cloud computing. The Company is actively looking to enter the Data Centre space, either by providing components for Data Centres or by offering critical software services related to Data Centres, and intends to report on this strategic initiative as it progresses. The Board and management are actively pursuing strategic initiatives, including talent onboarding, technology partnerships, and client acquisition, to strengthen the existing IT/ITES operations and establish a foothold in the data centre ecosystem.

Risks and concerns

Your Company recognises that the IT/ITES business, and the proposed foray into the Data Centre space, are exposed to a distinct set of risks inherent to the technology sector. These include, inter alia, rapid technological obsolescence, intense competition, cybersecurity threats and data breaches, talent acquisition and retention challenges, client concentration risks, and compliance with evolving data protection regulations such as the Digital Personal Data Protection Act, 2023 and other applicable statutes. The Companys planned entry into the Data Centre component and critical software services space may additionally entail capital expenditure risks, supply chain dependencies, and execution risks associated with new business verticals. Additionally, the Company remains exposed to macroeconomic risks, including foreign exchange volatility, global economic slowdowns, and geopolitical developments that may impact client budgets and investment in technology infrastructure. Your Company is committed to implementing robust risk management frameworks, including stringent information security policies, business continuity planning, diversified client engagement strategies, and prudent financial management, to mitigate these risks effectively.

Internal financial control systems and their adequacy

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

PERFORMANCE REVIEW

Discussion on Financial Performance with respect to Operational Performance.

Total Income: During the year under review your companys Income is Rs. 172.64 Lakhs.

Share Capital: The paid-up share capital as on 31st March, 2026 is Rs. 2,72,06,940/- divided into 27,20,694 fully paid-up equity shares of Rs.10/- each.

Warrants: As on March 31, 2026, there are 19,90,000 convertible warrants which will be converted into equity shares at a later date.

Net Profit: The Companys operating Profit is Rs. 88.88 Lakhs during the year.

Earnings per Share (EPS): The Earning per Share for the Financial Year 2025-26 is Rs.5.73/-.

Your directors are putting continuous efforts to scale the Companys existing Software Services, IT and ITES operations. The management is focused on building a robust order book, enhancing service delivery capabilities, and evaluating entry into the Data Centre space either by providing components or critical software services related to Data Centres, with a view to driving sustainable growth and improved financial performance in the coming years.

Material developments in Human Resources / Industrial Relations front, including number of people employed

The Company is in the process of building its human resource capabilities to support its Software Services, IT and ITES operations and its strategic initiative to enter the Data Centre space. During the financial year under review, the Company has initiated efforts to recruit qualified professionals in software development, IT infrastructure management, and allied technical and administrative functions. As the Company progresses towards entering the Data Centre space, it intends to augment its workforce with specialised talent in data centre operations, component engineering, and critical software services. The Company recognises that human capital is critical to its success and intends to invest in talent acquisition, skill development, and employee retention programmes to build a competent and motivated workforce aligned with its business objectives.

Disclosure of Accounting Treatment

The Company has prepared financial statements which comply with Ind-AS applicable for periods ending on March 31, 2026, together with the comparative period data as at and for the year ended March 31, 2025, as described in the summary of significant accounting policies. Primarily, a treatment different from that prescribed in an Accounting Standard has not been followed in the preparation of financial statements. However, as regards amendments to certain accounting standards, the applicability/effect on the financial statement has been evaluated and been treated accordingly as explained in Notes to the standalone Financial Statements.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanation

During the year on a standalone basis, the significant changes in the financial ratios of the Company, which are more than 25% as compared to the previous year are summarized below:

Financial Ratios	Formula	2025-26	2024-25	Deviation (%)	Reason for Change
Debtors Turnover Ratio (times)	[Revenue from operations / Average Trade receivables]	NA	NA	NA	-
Inventories Turnover Ratio (times)	[COGS / Average Inventories]	NA	NA	NA	-
Interest Coverage Ratio (times)	[EBIT / Finance Cost]	470.17	-63.54	840%	The reason for increase in ratio is due to Increase in Profits
Current Ratio (times)	[Current Asset / Current Liability]	240.59	53.37	351%	The reason for Increase in Bank balance other than Cash & Cash Equivalents
Debt Equity Ratio (times)	[Debt / Shareholders Equity]	NA	NA	NA	-
Operating Profit Margin Ratio (%)	[EBIT / Revenue from Operations]	0.75	NA	100%	The reason for Increase in ratio is due to Increase in Revenue
Net Profit Margin Ratio (%)	[Profit After Tax / Revenue from Operations]	0.62	NA	100%	The reason for increase in ratio is due to increase in Revenue
Return on Net Worth (%)	[Profit for the year (before exceptional items and after tax) / Net Worth]	0.03	-0.07	143%	The reason for increase in ratio is due to increase in Revenue

Cautionary Statement

Statements in this management discussion analysis describing the Companys objectives, projections, estimates, expectations may be forward looking within the meaning of applicable securities-laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could make difference to Companys operations include economic conditions affecting the domestic market and the overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

On behalf of the Board// For PHOTON CAPITAL ADVISORS LIMITED

Sd/- Sreeram Reddy Vanga Chairman & Managing Director DIN: 00654545

Sd/- Dr. Lalitha Palle Director DIN: 08887909

Place: Hyderabad Date: August 08, 2026