S A Tech Software India Ltd Management Discussions

The Management Discussion and Analysis (MD&A) provides an overview of SA Tech Software India Limiteds business environment, industry dynamics, opportunities, risks, and strategic priorities during FY 2025-26. The year witnessed continued acceleration in digital transformation, enterprise AI adoption, and the expansion of Global Capability Centers (GCCs), creating new opportunities for technology- led organizations. SA Tech remains focused on delivering sustainable value through innovation, operational excellence, customer-centricity, talent development, and strong corporate governance.

Industry Structure & Developments

Global Capability Centres (GCCs) continue to redefine the global operating model for enterprises, evolving from traditional support functions into strategic centres driving innovation, product engineering, artificial intelligence (AI), digital transformation, and business resilience. Organizations are increasingly leveraging GCCs to accelerate technology adoption, strengthen engineering capabilities, and improve operational agility.

India has further reinforced its position as the worlds preferred destination for GCCs, supported by a highly skilled workforce, a mature technology ecosystem, competitive operating environment, and strong digital infrastructure. The country now hosts nearly 2,000 GCCs employing over 2.1 million professionals, with continued investments from global enterprises across technology, healthcare, manufacturing, financial services, retail, and other high-growth sectors.

The GCC ecosystem is witnessing a significant shift toward high-value capabilities such as Generative AI, cloud modernization, cybersecurity, platform engineering, advanced analytics, and digital product development. Enterprises are increasingly establishing centers that own end-to- end business functions, research and development, innovation programs, and global engineering mandates, further strengthening Indias position as a strategic innovation hub.

The industry observations in this section are based on publicly available market information, industry reports, and management s assessment of customer demand across technology services, Global Capability Centers, and digital transformation initiatives.

Key industry trends include:

? Generative AI & Intelligent Automation: Organizations are rapidly integrating Generative AI, AI-powered assistants, and intelligent automation to improve productivity, enhance customer experiences, and accelerate innovation.

? Expansion of GCC Mandates: GCCs are assuming greater ownership of product engineering, digital platforms, enterprise applications, cybersecurity, and AI-driven transformation initiatives.

? Cybersecurity & Digital Trust: Increasing regulatory requirements and evolving cyber threats continue to drive investments in cybersecurity, governance, data privacy, and resilient digital infrastructure.

? Cloud & Platform Modernization: Enterprises continue to accelerate cloud adoption, application modernization, and platform engineering to improve scalability and business agility.

? Talent Transformation: Growing demand for AI, cloud, cybersecurity, and digital engineering capabilities is encouraging organizations to invest significantly in workforce upskilling and continuous learning.

? Growing Mid-Market Adoption: The GCC model is increasingly being adopted by mid-sized enterprises seeking access to specialized talent, innovation, and cost-efficient global operations.

SA Techs strategic focus on Global Capability Centers, AI-led transformation, digital engineering, product engineering, and managed services positions the Company to capitalize on these evolving opportunities. Its customer-centric delivery approach, robust governance framework, and deep technology expertise continue to strengthen its competitive position in a rapidly evolving market.

Opportunities and Threats

The continued evolution of the global technology landscape presents significant opportunities for the Company to expand its capabilities, strengthen customer relationships, and create long-term stakeholder value. At the same time, the Company remains mindful of industry challenges and continuously adapts its strategies to mitigate emerging risks.

Opportunities

1. AI-Led Enterprise Transformation: The increasing adoption of Artificial Intelligence (AI), Generative AI, and intelligent automation is driving enterprise demand for technology partners capable of delivering scalable, AI-enabled solutions. The Company continues to strengthen its AI-led service offerings to support clients in accelerating their digital transformation journeys.

Global Capability Centers (GCCs): As enterprises continue to establish and expand GCCs in India, demand remains robust for advisory, talent, engineering, and operational support services. The Company is well-positioned to support organizations across the GCC lifecycle through flexible engagement models.

3 Product Engineering and Digital Engineering: Growing investments in digital products, cloud-native platforms, software modernization, and engineering innovation continue to create opportunities for specialized technology service providers.

4. Managed Services and Long-Term Engagements: Increasing preference for outcome-based managed services presents opportunities to establish long-term client relationships while delivering operational excellence, business continuity, and measurable business value.

5 Industry Diversification: Continued technology adoption across healthcare, manufacturing, financial services, retail, and emerging digital sectors provides opportunities for revenue growth and portfolio diversification.

6. Technology Talent Availability: Indias strong technology talent ecosystem continues to provide access to skilled professionals across AI, cloud computing, cybersecurity, data engineering, and enterprise technologies, enabling the Company to address evolving customer requirements.

Threats

1. Intense Industry Competition: The technology services industry remains highly competitive, with global IT service providers, consulting firms, GCC operators, and niche technology players competing for clients, projects, and skilled talent.

2. Rapid Technological Changes: The accelerated pace of technological advancements, particularly in AI and automation, requires continuous investment in upskilling, innovation, and service transformation. Failure to adapt quickly may impact competitiveness.

3. Cybersecurity and Data Privacy Risks: Increasing cyber threats, evolving data protection regulations, and heightened customer expectations regarding information security could lead to operational, financial, and reputational risks if not effectively managed.

4. Talent Acquisition and Retention: The demand for highly skilled professionals in emerging technologies remains strong. Challenges in attracting, retaining, and developing specialized talent may impact delivery capabilities and project execution.

5. Macroeconomic and Geopolitical Uncertainty: Economic slowdowns, inflationary pressures, geopolitical developments, changes in trade policies, and global business uncertainties may influence client spending patterns and technology investments.

6. Client Concentration and Budget Rationalization: Delays in customer decision-making, reductions in discretionary technology spending, or changes in client priorities may impact revenue growth and project pipelines.

7. Regulatory and Compliance Requirements: Evolving domestic and international regulatory frameworks, including data privacy, labor, tax, and technology-related regulations, may increase compliance obligations and operational costs.

By leveraging emerging opportunities while proactively addressing these challenges, the Company continues to strengthen its foundation for sustainable growth, operational resilience, and long-term value creation for stakeholders.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company s operations are organized into two principal business segments, namely IT Consulting and GCC Services. During FY 202526, IT Consulting contributed 57.55% of total revenue, while GCC Services accounted for 36.46%. IT Consulting remained the primary revenue-generating segment, while GCC Services delivered strong segment contribution, reflecting operational efficiency and the growing importance of GCC-led engagements. The balanced revenue mix across business segments enabled the Company to maintain steady operational performance during the year.

Sr. No.	Segment	Revenue (Rs Lakhs)	Revenue %	Segment Contribution / Profit (Rs Lakhs)*	Contribution %
1	Domestic IT Consulting	5,672.38	50.58%	1,037.39	31.88%
2	Export IT Consulting	782.12	6.97%	Included in IT Consulting	-
	Total IT Consulting	6,454.50	57.55%	1,037.39	31.88%
3	Global Capability Center (GCC)	4,089.51	36.46%	2,094.44	64.34%
4	Other / Common Revenue	671.29	5.99%	671.29	20.64%
	T otal Revenue	11,215.30	100.00%	3,803.12	116.86%
5	Common Corporate Expenses	-	-	(4,374.35)	(134.44%)
	Net Profit Before Tax	-	-	315.99	100.00%

OUTLOOK

The long-term outlook for the technology services industry and the Global Capability Center ecosystem remains positive, supported by continued enterprise investments in digital transformation, Artificial Intelligence, cloud technologies, cybersecurity, and engineering innovation.

Looking ahead, SA Tech will continue to focus on:

? Strengthening its Global Capability Center capabilities and strategic advisory services.

? Expanding AI-led solutions, digital engineering, and product engineering offerings.

? Growing long-term managed services engagements across key industries.

Investing in talent development, technology capabilities, and operational excellence. Enhancing customer relationships through innovation, quality, and scalable delivery models.

With its strong technology expertise, customer-centric approach, experienced leadership, and commitment to innovation, the Company remains well-positioned to capitalize on emerging market opportunities while delivering sustainable growth and long-term value for all stakeholders.

RISK MANAGEMENT & CONCERNS

The Company maintains a comprehensive Risk Management Framework designed to identify, assess, monitor, and mitigate strategic, operational, financial, technological, regulatory, and reputational risks.

Key business risks and the corresponding mitigation measures are summarized below:

1. Increasing competition within the technology services and GCC ecosystem may lead to pricing pressure, margin compression, and increased efforts to retain customers and skilled talent.

Mitigation Measures:

? Focus on delivering high-value, differentiated service offerings and specialized technology solutions.

? Strengthening client relationships through consistent service quality and customer satisfaction.

? Diversify revenue streams across industries, geographies, and service lines.

? Enhance operational efficiency through process optimization and technology-led automation.

? Continuously invest in innovation and capability development in emerging technologies.

2. Talent acquisition and retention in specialized technology domains, which may increase talent acquisition costs

Mitigation Measures:

? Implement competitive compensation and performance-linked incentive programs.

? Invest in employee learning, upskilling, reskilling, and leadership development initiatives.

? Create a positive work environment with clear career progression opportunities.

? Strengthen employee engagement and retention programs to reduce attrition.

? Build a talent pipeline through partnerships with educational institutions and strategic recruitment initiatives.

3. Capital-intensive nature of the business resulting in pressure on working capital requirements, which may hamper business growth if adequate funding is not available

Mitigation Measures:

? Maintain disciplined working capital management through effective monitoring of receivables and payables.

? Improve cash flow planning and forecasting processes.

? Strengthen relationships with banks, financial institutions, and other funding partners to ensure timely access to capital.

? Optimize resource utilization and control operating costs to improve liquidity.

? Explore alternative sources of funding and capital infusion opportunities to support future growth plans.

These measures are regularly reviewed by the management to ensure that the Company remains resilient and well positioned to address evolving business risks and opportunities.

INTERNAL CONTROL SYSTEMS & ADEQUACY

The Company has established an effective internal control framework that supports sound governance, operational efficiency, financial reporting integrity, and regulatory compliance.

Key elements of the framework include:

? Clearly defined policies, processes, and delegated authority structures.

? Risk-based internal audit mechanisms and periodic management reviews.

? Strong information security controls and compliance-driven operating practices.

? Continuous monitoring of operational and financial controls.

? Ongoing improvements in governance and compliance processes to support business growth.

The Companys internal control systems are regularly reviewed to ensure their adequacy and effectiveness in line with the evolving business environment.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

? During FY 2025-26, the Company reported revenue from operations of Rs11,215.30 lakhs as against Rs9,950.42 lakhs in the previous year, registering a growth of approximately 12.71%. The Company recorded a Net Profit of Rs216.74 lakhs during the year compar ed to Rs. 743.75 lakhs in FY 2024-25. The reduction in net profit margins is the result of increase expenditure towards sales and marketing, the company intends to continue to investing in sales and marketing for long term sustainability and growth. As a result of above the company has recorded increase of revenue of 12.71%.

? The IT Consulting segment remained the largest contributor to revenue, accounting for 57.55% of total operating revenue, while the GCC segment contributed 36.46%, reflecting a diversified revenue mix and balanced business portfolio.

? The Company has received an observation letter conveying no objection from the Stock Exchange in connection with the proposed merger with Mindpool Technologies Limited, marking an important milestone in the ongoing merger process.

? The Companys subsidiary, SAT Leasing (India), completed its initial year of operations and made encouraging progress in client acquisition and establishing its presence in the operational leasing market.

? During the year, the Company continued to strengthen its GCC capabilities by expanding delivery operations in India, enabling enhanced scalability, operational efficiency, and technology-led service delivery for global customers.

? These developments collectively underscore the Companys focus on operational excellence, business expansion, and long-term value creation for all stakeholders.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

People continue to be the Company s greatest strength and a key driver of sustainable growth and long-term success. The Company remains committed to fostering an inclusive, collaborative, and performance-oriented workplace that encourages innovation, continuous learning, and professional development.

During the year, the Companys employee strength increased from 401 employees as at March 31, 2025, to 547 employees as at March 31, 2026 reflecting business growth, expansion of service delivery capabilities, and strengthening of operational capacity.

The Company continued to invest in capability development through structured technical training programs, leadership development initiatives, and continuous learning opportunities focused on emerging technologies such as Artificial Intelligence (AI), cloud computing, cybersecurity, data analytics, and digital engineering. These initiatives are aimed at enhancing employee competencies and preparing the workforce to meet evolving client and industry requirements.

Employee engagement remained a key area of focus throughout the year. Various initiatives were undertaken to promote collaboration, employee well-being, recognition, diversity, inclusion, and a positive workplace culture. The Company also continued to strengthen its performance management and talent development practices to support employee growth and organizational effectiveness.

Industrial relations remained cordial and harmonious throughout the year. There were no significant industrial disputes affecting business operations, and the Company continues to maintain constructive relationships with its employees while fostering an environment of trust, innovation, accountability, and high performance.

The Company believes that its people-centric approach, combined with continuous investment in talent development and employee engagement, will continue to support operational excellence and sustainable business growth.

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 EXPLANATIONS THEREFORE

The Companys operations are organized into two principal business segments, namely IT Consulting and GCC Services. During FY 202526, IT Consulting contributed 57.55% of total revenue, while GCC Services accounted for 36.46%. The GCC segment delivered the highest segment contribution, demonstrating strong operational efficiency, while IT Consulting continued to be the primary revenue-generating segment. The balanced revenue mix across business segments enabled the Company to maintain steady operational performance during the year

Financial Ratios	31-Mar-26	31-Mar-25	% Change	Reason for change
(a) Current Ratio	2.00	3.15	-36.7	Significant increase in Current Liabilities during the year
(b) Debt-Equity Ratio	0.66	0.28	132.86	Additional borrowings availed during the year.
(c) Debt Service Coverage Ratio	0.95	0.21	363.84	Decrease in Profitability of the company
(d) Return on Equity Ratio	0.05	0.29	-81.8	Decrease in Profitability of the company
(e) Inventory turnover ratio	Nil	Nil	Nil	Nil
(f) Trade Receivables turnover ratio	4.80	5.20	-7.67	-
(g) Trade payables turnover ratio	14.25	18.49	-23.62	-
(h) Net capital turnover ratio	3.85	2.94	30.86	Increase in Sales of the company
(i) Net profit ratio	0.02	0.07	-74.15	Lower profitability during the year
(j) Return on Capital employed	0.10	0.27	-63.55	Decrease in operating profit (PBIT)
(k) Return on investment.	0.10	0.06	68.23	Increase in Investment during the year

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREFORE

Financial Ratios	31-Mar-26	31-Mar-25	% Change	Reason for change
Return on Net Worth	0.08	0.24	-0.68	Return on Net Worth declined significantly during FY 2025-26 primarily due to lower profitability

ESG - ENVIRONMENT, SOCIAL & GOVERNANCE

SA Tech remains committed to responsible and sustainable business practices by integrating environmental, social, and governance (ESG) principles into its operations.

Environment: The Company continues to encourage responsible resource utilization through energy-efficient operations, digital-first business practices, responsible waste management, and initiatives aimed at reducing its environmental footprint.

Social: The Company remains committed to creating positive social impact through employee development, diversity and inclusion, community engagement, skill development initiatives, and responsible corporate citizenship.

Governance: Strong corporate governance, ethical business conduct, regulatory compliance, transparency, and effective Board oversight continue to form the foundation of the Companys governance framework.

The Company believes that sustainable business practices are integral to long-term value creation and stakeholder confidence.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements have been prepared in accordance with the applicable Indian Accounting Standards (Ind AS), the provisions of the Companies Act, 2013, and other applicable statutory requirements.

Cautionary Statement Statements made in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may constitute forward-looking statements 1 within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various risks and uncertainties, including changes in economic conditions, government policies, market dynamics, technological developments, and other factors beyond the Companys control. The Company undertakes no obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. Annexure- V