Sagar Systech Ltd Management Discussions

The management is pleased to present its Analysis Report.

A. FINANCIAL REVIEW:

During the financial year 2024-2025, your Company had a profit of Rs. 151 thousand as compared to the loss of Rs. 4,150 thousands in the previous financial year. There was no provision for depreciation required. Details of changes in key financial ratios are as follows:

Particulars	31/03/2025	31/03/2024	% Change	Reason for major variance
1. Interest Coverage Ratio	1.069	-0.863	-223.91	Due to Profit this year
2. Current Ratio	0.587	0.611	-3.78	Increase in Current Liabilities
3. Debt Equity Ratio	0.379	0.192	97.27	Increase in borrowing and due to profit this year
4. Net Profit Margin	0.043	1.720	-97.51	Last years F & O Profit being in negative and due to profit this year

B. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The internal control systems and their adequacy have been discussed in detail in the Directors Report.

C. MACRO ECONOMY: REVIEW AND OUTLOOK:

The Indian macroeconomic landscape is evolving rapidly, shaped by shifting global trends, domestic reforms, and an increasingly tech-driven ecosystem. For companies navigating this terrain, the new fiscal year presents a mix of opportunities and challenges that demand agility, innovation, and strategic foresight. With consumer behaviour adapting to digital norms and sustainability becoming a boardroom priority, businesses must rethink their growth models to stay competitive. Its a moment of recalibration—where resilience matters as much as ambition, and the ability to adapt is more valuable than ever. In Financial year, Indian companies navigated a dynamic economic landscape marked by resilient GDP growth of 6.4%, moderated inflation, and robust export performance. Strong investments in infrastructure and manufacturing, along with rising FDI inflows, signalled growing investor confidence.

The fiscal deficit held steady at 4.8% of GDP, while foreign exchange reserves climbed to $640 billion, bolstering macroeconomic stability. Companies benefited from government-led initiatives such as the PLI scheme and rural development programs, with sectors like technology, green energy, and services gaining momentum. However, challenges from global uncertainties—like oil price fluctuations and geopolitical risks—remain, prompting businesses to focus on innovation, export competitiveness, and supply chain resilience to sustain growth and profitability in the coming year.

In FY 2024–25, Indian companies operated in a macroeconomic environment characterized by resilient growth, moderating inflation, and strong investment momentum, as highlighted by the , , and reports from the , , and . Indias real GDP grew by 6.4%, reaffirming its position as the fastest-growing major economy globally. The emphasized deregulation and infrastructure-led expansion, with capital expenditure rising 38.8% over FY20–FY24. Inflation eased to 4.9% (Apr–Dec 2024), and is projected to align near 4% in FY26. FDI inflows surged 17.9% YoY, reaching $55.6 billion, while exports grew 6%, supported by robust services and manufacturing performance. Industry reports noted strong growth in steel, automobiles, and electronics, with the services sector contributing 55.3% to GVA5. Rating agencies like ICRA and Infomerics highlighted improved credit profiles across sectors, especially in real estate, infrastructure, and NBFCs5. Looking ahead, companies are expected to focus on supply chain resilience, AI-driven productivity, and green transition strategies, while navigating risks from global trade tensions, commodity price volatility, and geopolitical uncertainty

D. OPPORTUNITIES, THREATS AND FUTURE PROSPECTS IN THE CURRENT

MARKET ENVIRONMENT:

Opportunities

In todays dynamic tech landscape, Indian Systech companies stand at a promising intersection of innovation and demand. With initiatives like Digital India, Smart Cities, and the rising adoption of AI and hybrid cloud strategies, theres a golden opportunity to drive transformation across public and private sectors. Companies that specialize in cybersecurity, intelligent automation, and infrastructure management are especially well-positioned to lead. Additionally, the global surge in IT spending offers fertile ground for Indian firms to expand exports and strengthen international partnerships.

AI & Automation Integration: With 75% of Indian enterprises expected to adopt AI by 2025, Systech firms can lead in deploying intelligent automation solutions.

Hybrid Cloud & Edge Computing: 62% of companies plan to implement hybrid cloud strategies, opening doors for infrastructure and service providers.

Cybersecurity Demand: Rising cyber threats have pushed security spending beyond $3.5 billion, creating strong demand for secure systems and services.

Digital India & Smart Cities: Government initiatives like Digital India and Smart Cities offer long-term contracts and public sector tech deployments.

Global IT Spending Surge: With global IT spending rising, Indian Systech firms can expand exports and tap into new markets.

Threats

However, these opportunities come with serious challenges. Rapid technological evolution demands constant upgrades and reinvention, often straining resources and increasing R&D pressure. Competition is intensifying—not just from global giants but also from emerging outsourcing destinations. Regulatory scrutiny over data privacy and cross-border compliance adds complexity, while attrition and talent retention remain persistent pain points, especially with skill gaps in high-demand areas like AI and cybersecurity.

Skill Gaps in Emerging Tech: Shortage of talent in AI, blockchain, and cybersecurity could limit scalability.

Intense Global Competition: Countries like Vietnam and the Philippines are challenging Indias outsourcing dominance.

Rapid Tech Evolution: Fast-paced innovation demands constant reinvention, which can strain resources and R&D budgets.

Data Privacy & Regulatory Risks: Increasing scrutiny over data handling and compliance may impact operations, especially in cross-border services.

Attrition & Talent Retention: High employee turnover in tech roles continues to be a challenge for long-term project continuity.

Future Prospects

Looking ahead, the future holds exciting prospects. Expansion into tier-2 and tier-3 cities could unlock new talent pools and operational efficiencies. Strategic alliances with startups and global tech players can drive innovation and market growth. With sustainability becoming a priority, investments in green technology and ESG-focused systems offer new differentiation. To stay resilient, companies must double down on workforce reskilling and transform internal capabilities to match the pace of digital progress

Expansion into Tier-2/3 Cities: Lower costs and rising digital literacy make smaller cities attractive for talent and operations.

AI-Driven Productivity Gains: Generative AI adoption is expected to boost productivity by 43–45% over the next five years.

Strategic Partnerships: Collaborations with global tech firms and startups can accelerate innovation and market access. Green Tech & ESG Focus: Sustainability and energy-efficient systems are becoming key differentiators in tech procurement.

Reskilling & Workforce Transformation: Investment in training and skilling will be critical to future-proof operations and retain talent.

(Data Sources: World Economic Outlook April 2025, Economic Surveys, International Monetary Fund, Industry and Rating Agency reports)

For and on behalf of the Board of Directors of
SAGAR SYSTECH LIMITED
Meena Babu	Mukesh Babu
Managing Director	Director
DIN: 00799732	DIN: 00224300
Date: 30th July, 2025
Place: Mumbai