Saksoft Ltd Management Discussions

Global economic review

Overview

The global economy operated in a challenging environment during 2024 and 2025, shaped by geopolitical tensions, elevated interest rates, evolving trade dynamics and uneven regional growth. Despite these headwinds, global activity remained resilient, supported by steady services-sector performance and stable consumer demand across major economies. Global GDP growth has been estimated at 3.3% in 2024 and 3.4% in 2025.

Higher tariffs, supply chain disruptions and tighter financial conditions affected global trade flows and business confidence across major economies. In addition, geopolitical tensions and concerns over a possible closure of the Strait of Hormuz led to volatility in global crude oil prices, further increasing uncertainty across energy and commodity markets.

Emerging Markets and Developing Economies (EMDEs) grew faster than advanced economies, at 4.5% in 2024 and 4.4% in 2025, driven by strong domestic demand and infrastructure investment. Advanced economies recorded growth of 1.8% and 1.9% over the same period, supported by easing inflation and consumption but weighed down by weak manufacturing and tighter financial conditions.

Global inflation is expected to increase marginally from 4.1% in 2025 to 4.4% in 2026, driven by higher energy and food prices, before easing to 3.7% in 2027 as commodity prices stabilise and supply conditions improve.

World Output (Real GDP, Annual % change)

Regional Growth	2024	2025	2026E	2027E
World Output	3.4	3.4	3.1	3.2
Advanced Economies	1.8	1.9	1.8	1.7
EMDEs	4.5	4.4	3.9	4.2

Source: IMF April 2026 Report

Performance of the major economies, 2025

United States: GDP growth moderated from 2.8% in 2024 to 2.1% in 2025 due to softer demand and tighter financial conditions.

China: Growth remained stable at 5.0% in both 2024 and 2025, supported by exports and manufacturing activity.

United Kingdom: GDP growth improved from 1.1% in 2024 to 1.3% in 2025, supported by easing inflation and improving consumer confidence.

Japan: Growth recovered from a contraction of 0.2% in 2024 to an expansion of 1.2% in 2025, supported by resilient domestic demand and accommodative monetary policy.

Germany: The economy contracted by 0.5% in 2024 before recovering marginally with 0.2% growth in 2025 amid weak manufacturing and export demand.

Outlook

The global economic outlook remains broadly cautious, due to ongoing geopolitical tensions, trade uncertainties and volatility in energy and commodity prices. However, growth is expected to be supported by improving financial conditions and steady consumer demand across major economies. Global growth is projected to moderate to 3.1% in 2026 and improve to 3.2% in 2027. Emerging markets are likely to continue outperforming advanced economies, driven by strong domestic demand and infrastructure development. Emerging Market and Developing Economies (EMDEs) are expected to grow by 3.9% in 2026 and by 4.2% in 2027, while advanced economies are projected to grow by 1.8% in 2026 and by 1.7% in 2027. In addition, increasing adoption of Artificial Intelligence (AI) is expected to enhance productivity and create new growth opportunities across sectors. However, evolving trade policies, geopolitical risks and financial market volatility may continue to influence global trade flows and business confidence in the near term.

Source: https://www.imf.org/-/media/files/publications/ weo/2026/april/english/text.pdf

https://www.weforum.org/stories/2026/04/imf-

downgrades-global-growth-and-other-finance-news-to-

know/

Indian Economic Review

Overview

India remained one of the fastest-growing major economies, with GDP growth rising to 7.6% in FY 2026 from 7.1% in FY 2025 (Base year 2022-23), driven by strong domestic demand and steady consumer spending. This broad-based economic growth was supported by resilient domestic consumption, strong public and private investments, healthy manufacturing activity and robust services exports.

Indias nominal GDP, or GDP at current prices, is estimated to reach Rs. 345.47 trillion in FY 2026, compared to Rs. 318.07 trillion in FY 2025, reflecting a growth rate of 8.6%.

The rupee weakened sharply in FY 2026, declining by about 11%, mainly due to higher oil prices and continued outflow of foreign capital from the country.

Indias retail inflation, based on the All India Consumer Price Index (CPI) with base year 2024, stood at 3.48% in April 2026 on a Y-O-Y basis. Rural inflation was recorded at 3.74%, while urban inflation stood lower at 3.16% during the same period. The rise was mainly driven by higher food prices, while stable fuel costs and easing core inflation helped keep overall price pressures under control. Despite the

marginal increase, inflation remained within a comfortable range, indicating a broadly stable price environment. In India, inflation is expected to remain near the RBIs target levels, supported by stable food prices, although crude oil price volatility and geopolitical tensions may continue to pose inflationary risks. According to the RBI Monetary Policy report, inflation is expected to rise to 4.6% in FY 2027.

Indias foreign exchange reserves increased from USD 686.06 billion as of May 2, 2025, to USD 696.99 billion as of May 08, 2026, reflecting continued strengthening in the countrys external position, even amid geopolitical tensions and rising crude oil prices.

Gross Foreign Direct Investment (FDI) inflows increased in FY 2026, reaching USD 90 billion, up from USD 80.61 billion in FY 2025. Net Foreign Direct Investment (FDI) also turned positive to USD 4.6 billion in February 2026, marking the highest level in nearly 4 years and signalling a recovery in foreign investment sentiment.

Growth of the Indian economy

	FY 2024	FY 2025
Real GDP Growth (%)	7.2	7.1

Source: MOSPI

Growth of the Indian economy quarter by quarter, FY 2026

	Q1 FY 26	Q2 FY 26	Q3 FY 26	Q4 FY 26
Real GDP	6.8	6.7	7.0	7.2
Growth (%)

Source: MoSPI Second Advance Estimates Report

Bank credit growth is expected to moderate to 11.0-11.7% in FY 2027 from 15.9% in FY 2026, according to ICRA (Information and Credit Rating Agency), due to geopolitical uncertainties and higher crude oil prices. However, Public Sector Banks (PSBs) are likely to remain stable, with Gross Non-Performing Assets (GNPA) levels at 2.0-2.1% and Return on Assets (RoA) around 1.5% in FY 2027.

Indias exports of goods and services increased 4.2% year-on-year (Y-O-Y) to USD 860.1 billion in FY 2026 from USD 825.3 billion in FY 2025, driven by strong demand for engineering goods, electronics and petroleum products. Merchandise exports also rose to USD 441.8 billion from USD 437.7 billion in the previous year, supported by improved manufacturing activity and steady growth across key export sectors despite global trade challenges and weaker external demand.

Indias net GST collections increased 7.3% YoY to Rs. 2.11 trillion in FY 2026. Gross GST collections in April 2026 stood at a record Rs. 2.43 trillion, up 8.7% YoY.

Real Gross Value Added (GVA) is estimated to rise to Rs. 294.40 trillion in FY 2026 from Rs. 273.36 trillion in FY 2025, reflecting a 7.7% growth rate. The expansion is

driven by strong services, steady domestic demand and improved industrial activity, with the industrial sector expected to grow 6.2% compared to 5.9% in FY 2025.

The sectoral growth between FY 2025 and FY 2026 shows a mixed trend across the economy. Mining and quarrying slowed sharply from 11.7% to 4.1%. Manufacturing strengthens from 9.3% to 11.5%, while utilities such as electricity, gas and water supply moderate from 2.9% to 1.5%. Trade, hotels, communication and related services record strong growth, rising from 6.6% to 10.1%. Financial, real estate, IT and professional services remain broadly stable at around 10%, while public administration, defence and other services improve from 5.0% to 5.8%.

On the consumption side, both Private Final Consumption Expenditure (PFCE) and Private Investment grew by over 7.7% in FY 2026, compared to 5.8% in FY 2025, reflecting strong consumer spending and continued investment activity.

Indian equity markets remained weak in FY 2026, with the Nifty 50 declining by 5.1% and the Sensex declining by nearly 7%. This was driven by global uncertainties, geopolitical tensions, higher crude oil prices, continued foreign portfolio investor (FPI) outflows and pressure on the rupee. In contrast, gold performed strongly as a safe- haven asset, delivering returns of around 48% during the year amid heightened global volatility. The government has more than doubled the gold import duty to 15% (from 6%), aiming to curb imports and reduce the widening current account deficit, amid cautious global conditions. The hike is expected to push domestic gold prices higher and potentially affect jewellery demand, with industry bodies warning of a rise in grey-market activity.

The Indian mutual fund industry continued to see strong investor participation in FY 2026, with average AUM increasing 12.2% Y-O-Y to Rs. 73.73 trillion in March 2026 from Rs. 65.74 trillion in March 2025. Monthly SIP contributions crossed Rs. 0.32 trillion for the first time, with inflows reaching Rs. 32,087 crore in March, reflecting a strong Y-O-Y growth of 23.8%. Specialised Investment Funds (SIFs) also grew sharply to Rs. 10,620 crore in March 2026 from Rs. 4,892 crore in December 2025, driven by net inflows and hybrid strategies. In FY 2026, the total number of folios grew, taking the total folio count to 27.39 crore.

FPIs remained under pressure in FY 2026, with sustained net selling in Indian equities amid global uncertainty, high interest rates and geopolitical tensions, reducing their share to a 14-year low. However, strong domestic institutional investor participation helped stabilise the market.

Outlook

The Indian economy is expected to remain strong in FY 2027, supported by healthy domestic demand, continued investments, infrastructure development and supportive government policies. Although growth may moderate slightly to around 6.9% in FY 2027, India is still

expected to remain one of the worlds fastest-growing major economies. Continued focus on manufacturing, digitalisation and capital expenditure is likely to support long-term economic growth despite global uncertainties.

Tariff-based competitiveness: Indias tariff rationalisation measures are strengthening the global competitiveness of domestic industries by lowering input costs, improving operational efficiency and creating a more predictable trade environment. These reforms are supporting integration into global value chains, attracting foreign investments and promoting export-oriented growth across sectors.

Union budget 2026-27: The Union Budget FY 2027 focuses on supporting economic growth while maintaining fiscal discipline. The governments total expenditure for FY 2027 is estimated at Rs. 53.47 trillion, while total receipts excluding borrowings are projected at Rs. 36.52 trillion. The economy is expected to grow at a nominal rate of 10.1%, which should help improve revenues and support overall stability. The budget gives priority to key areas such as agriculture, increased credit access for Micro, Small and Medium Enterprises (MSMEs) and exporters and attracting private investment through policy reforms and higher Foreign Direct Investment (FDI) limits in selected sectors. It also places strong emphasis on infrastructure development through Public-Private Partnerships (PPPs), logistics upgrades and improved connectivity. In addition, the government has focused on social sectors such as healthcare, education and skill development to promote more inclusive and balanced long-term growth.

Repo rate: In FY26, the Monetary Policy Committee (MPC) moved from a tightening stance to an easing cycle, opting for an extended pause to balance subdued underlying inflation with strong domestic growth. After a 25 basis point cut in December 2025, the repo rate remained unchanged at 5.25% in FY 2026. The policy stance is expected to remain neutral, providing flexibility to adapt swiftly to evolving macroeconomic conditions, including potential global supply chain disruptions and ongoing geopolitical uncertainties.

Monsoon: The India Meteorological Department (IMD) has projected a slightly below-normal southwest monsoon for 2026, influenced by evolving global weather patterns and changing oceanic conditions. Factors such as a possible El Nino effect and Indian Ocean conditions are expected to influence rainfall distribution during the season.

Source: https://www.pib.gov.in/PressReleasePage. aspx?PRID=2212087&reg=3&lang=1

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2260203&reg=3&lang=1

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2252272&reg=3&lang=1

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2212087&reg=6&lang=1

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2212087&reg=6&lang=1

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2240065&reg=3&lang=2

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2246819&reg=3&lang=2

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2233518&lang=1&reg=6

https://www.mospi.gov.in/uploads/latestReleases/ latest release 1772189865181 f040336d-bc57-4aed- b80f-586d9ccb279e Press Note on New Series of GDP Estimates with Base Year 2022-23 27022026.pdf

https://www.amfiindia.com/uploads/AMFI Monthly Note Mar 2026 1f0a1f5c48.pdf

https://nsearchives.nseindia.com//web/ mediaattachment/2026-04/Market Pulse April 2026.pdf

https://prsindia.org/files/budget/budget parliament/2025/Union Budget Analysis 2025-26.pdf

https://www.mospi.gov.in/uploads/PressRelease/CPI%20

Press%20Release%20of%20April%202026.pdf

https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/

PR36179ED854C2504530A4E69A95E76CF144.PDF

https://internal.imd.gov.in/press release/20260415 pr 4893.pdf

https://www.icra.in/CommonService/ OpenMediaS3?Key = ca854669-9cc6-454f-a869- 0463215ac30a

https://www. insightsonindia.com/2025/09/15/ rationalising-tariffs-for-a-competitive-india/

https://rbidocs.rbi.org.in/rdocs/Wss/PDFs/2T

090520257BFEF7FCFDBE4453803D6BB3B079873C.PDF

https://rbidocs.rbi.org.in/rdocs/Wss/PDFs/2T

150520263345E27F772948918F1EDB72FB6A3F96.PDF

https://www.amfiindia.com/uploads/AMFI Monthly Note Mar 2026 1f0a1f5c48.pdf

Industry Overview

Global Information Technology (IT) industry

The global IT market is estimated at approximately USD 14.4 trillion in 2026 and is expected to grow to nearly USD 36.8 trillion by 2035, registering a CAGR of around 11% during the forecast period.

Growth is being driven by rising investments in digital transformation, cloud computing, cybersecurity, automation and data-driven technologies across industries. The increasing adoption of artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT) and advanced analytics is further creating new opportunities for the industry, particularly as businesses continue to adapt to hybrid and remote working models.

Worldwide IT spending is projected to reach USD 6.31 trillion in 2026, reflecting a strong growth of 13.5% over 2025. Data centre systems spending is projected to rise significantly to USD 787.99 billion in 2026, while software spending is expected to reach USD 1.44 trillion, driven by growing demand for AI-powered applications and

advanced analytics platforms. IT services spending is likely to increase to USD 1.87 trillion as enterprises focus on consulting, managed services and application modernisation. Spending on devices and communication services is also expected to grow steadily, supported by hybrid work models and expanding digital connectivity.

Worldwide IT Spending Forecast (USD million)

	2025 Spending	2025 Growth (%)	2026 Spending	2026 Growth (%)
Data Center Systems	505,634	51.6	787,990	55.8
Devices	791,663	9.7	856,189	8.2
Software	1,254,449	12.8	1,443,621	15.1
IT Services	1,715,650	6.2	1,870,197	9.0
Communications Services	1,296,409	3.3	1,358,553	4.8
Overall IT	5,563,805	10.5	6,316,550	13.5

Source: Gartner (April 2026)

Regionally, North America is expected to retain its leadership position throughout the forecast period, accounting for nearly 37.6% of the global IT market. Asia-Pacific is also emerging as one of the fastest-growing regions, driven by rapid enterprise digitisation, expanding internet penetration, growing cloud adoption and increasing investments in AI and digital infrastructure.

Generative AI is transforming the way businesses operate by improving automation, software development, customer engagement and decision-making processes. Organisations are increasingly moving from pilot projects to large-scale AI implementation, leading to higher investments in AI- ready infrastructure, advanced computing capabilities and digital platforms.

The IT services industry remains central to enterprise transformation. Rising data complexity, rapid AI integration and the shift toward platform-based business models are driving demand for agile, outcome-oriented solutions. Service providers are playing a critical role in improving operational efficiency, strengthening business resilience and supporting long-term digital competitiveness.

Source: https://www.gartner.com/en/newsroom/press- releases/2026-04-22-gartner-forecasts-worldwide-it- spending-to-grow-13-point-5-percent-in-2026-totaling-6- point-31-trillion-dollars

https://www.businessresearchinsights.com/market-

reports/information-technology-it-market-108885

IT Service Industry

India continues to strengthen its global position in IT and business services, contributing around 11.6% of global IT revenue while leveraging its large, skilled talent base, cost competitiveness and growing digital capabilities. The global IT services market is valued at approximately USD 1.61 trillion in 2025 and is projected to reach around USD 3.17 trillion by 2035, expanding at a CAGR of 7.01%

during 2026-2035. Cloud-based delivery models and AI- enabled IT operations are accelerating enterprise adoption of scalable, cost-efficient service frameworks. Within this, the global IT services outsourcing market is valued at USD 661.96 billion in 2025, before growing significantly to around USD 1,345.48 billion by 2034, registering a CAGR of 8.20% from 2025 to 2034.

Organisations are increasingly relying on IT service providers for application management, infrastructure modernisation and security compliance. North America remains the leading regional market, supported by strong technological ecosystems and high enterprise IT spending.

IT spending in India is projected to reach USD 176.3 billion in 2026, a 10.6% increase from 2025, according to Gartner, Inc.s latest forecast. This growth is driven by strong enterprise investments in IaaS, consulting and application modernisation, along with the rapid expansion of Global Capability Centres (GCCs) and access to a skilled, cost- efficient talent pool.

Cloud modernisation remains a major industry trend, with enterprises accelerating investments in hybrid and multi-cloud environments, AI-ready infrastructure, edge computing and platform engineering. Companies are also focusing on FinOps and cloud cost optimisation while modernising legacy applications and strengthening data management capabilities to support scalable digital ecosystems. The industry is also witnessing a shift toward outcome-based and managed service models, supported by AI-enabled automation, predictive operations and selfhealing infrastructure. IT service providers are increasingly embedding AI into service delivery to improve operational efficiency, reduce costs and enhance scalability, while addressing the growing demand for digital transformation and intelligent enterprise solutions.

Source: https://www.precedenceresearch.com/it-services- market

https://www.precedenceresearch.com/it-services-

outsourcing-market

https://www.gartner.com/en/newsroom/press- releases/2025-11-18-gartner-forecasts-india-it-spending- to-exceed-176-billion-us-dollars-in-2026

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2240065&reg=3&lang=2

https://www.gartner.com/en/newsroom/press-

releases/2026-04-22-gartner-forecasts-worldwide-it-

spending-to-grow-13-point-5-percent-in-2026-totaling-6-

point-31-trillion-dollars

Digital Transformation

Digital transformation is reshaping business operations by integrating advanced technologies into core processes to improve efficiency, strengthen customer engagement and support long-term growth. Organisations across industries are increasingly adopting Artificial Intelligence (AI), Generative AI, Cloud Computing, Automation, Data Analytics, Cybersecurity and the Internet of Things (IoT) to modernise legacy systems, improve agility and enable faster, data-driven decision-making. This shift is fostering more innovation-led, customer-centric business models that can adapt to rapidly evolving market conditions.

Indias expanding capabilities in artificial intelligence and digital technologies are further strengthening its position in global digital services. According to the Stanford AI Index Report 2025, India ranks second globally in AI skill penetration, supported by a large pool of digital talent. The countrys technological readiness has also improved significantly, rising from 48^th in 2022 to 36^th in 2024 in the United Nations Conference on Trade and Development (UNCTAD)s Frontier Technologies Readiness Index. India also remains among the leading countries in cloud infrastructure services, supported by a strong ecosystem of AI developers and technology professionals.

The global digital transformation market is witnessing strong growth, driven by rising demand for automation, intelligent analytics, cloud infrastructure and connected digital platforms across sectors including healthcare, BFSI, retail, manufacturing, logistics and telecommunications. Enterprises are increasingly investing in AI-enabled systems, predictive analytics and real-time monitoring tools to improve operational resilience, flexibility and security, while also strengthening cybersecurity and regulatory compliance frameworks.

The global digital transformation market is projected to grow from USD 2.1 trillion in CY25 to USD 2.54 trillion in CY26 and further to USD 5.01 trillion by CY30, supported by sustained investments in AI, cloud computing, automation technologies and digital infrastructure. Major technology providers such as Amazon Web Services, Microsoft Azure and Google Cloud continue to support this growth through scalable cloud platforms, analytics capabilities, AI solutions and cybersecurity services.

Digital transformation has evolved beyond operational improvement into a broader strategic priority focused on innovation, new business models and enhanced customer experiences. The growing adoption of hybrid and multicloud environments, intelligent workflows and automation platforms is helping organisations improve productivity, optimise costs and accelerate innovation. Businesses are also investing in workforce upskilling and reskilling to build capabilities aligned with an increasingly technology- driven environment.

India is also witnessing rapid digital transformation supported by increasing internet penetration, affordable smartphones and continued investments in digital infrastructure. The Indian digital transformation market is estimated at USD 144.48 billion in CY26 and is projected to reach USD 304.86 billion by CY31, growing at a CAGR of 16.12%. Government initiatives such as Digital India, the expansion of digital public infrastructure and rising enterprise investments in AI, cloud technologies, automation and cybersecurity are accelerating adoption across both enterprises and consumers.

The Banking, Financial Services and Insurance (BFSI) sector is undergoing significant digital transformation, with institutions leveraging AI, cloud computing, automation, blockchain and analytics to improve operational efficiency, strengthen security and enhance the customer experience. Digital banking platforms, digital payments and data-driven financial services are enabling faster, more personalised offerings. According to Market Research Future, the global digital transformation market in BFSI was valued at USD 93.04 billion in 2024 and is expected to reach USD 253.29 billion by 2035, registering a CAGR of 9.53%.

Indias digital transformation journey, driven by the Digital India programme, has substantially improved connectivity and expanded access to digital services nationwide. Investments in broadband, optical fibre networks and 5G infrastructure have strengthened digital inclusion, while Digital Public Infrastructure platforms such as Aadhaar, UPI and DigiLocker have enabled efficient governance, financial inclusion and large-scale service delivery.

Alongside infrastructure development, India is also focusing on digital literacy, innovation and skill development to support broader participation in the digital economy. Initiatives such as the Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA), Digital Infrastructure for Knowledge Sharing (DIKSHA), Study Webs of Active Learning for Young Aspiring Minds (SWAYAM) and the Atal Innovation Mission are strengthening digital capabilities, while programmes such as Common Service Centres (CSCs) and Prime Minister Wi-Fi Access Network Interface (PM-WANI) are improving last-mile connectivity and rural access. Together, these efforts are helping build a more inclusive, digitally empowered economy.

Source: https://www.researchandmarkets.com/

reports/5939230/digital-transformation-market-report

https://community.nasscom.in/communities/digital-

transformation/digital-transformation-trends-every-

business-should-know-2026

https://www.mordorintelligence.com/industry-reports/

india-digital-transformation-market

https://www.marketresearchfuture.com/reports/digital-

transformation-in-bfsi-market-29558

https://www.pib.gov.in/PressReleasePage.

aspx?PRID=2236529&reg=3&lang=2

SWOT Analysis

Sectoral Strengths

• Cost efficiency: The Indian IT services industry continues to offer cost-effective, scalable solutions, providing a significant competitive advantage over many global regions.

• Vast talent pool: India possesses a vast, skilled IT workforce, supported by strong capabilities in Artificial Intelligence (AI), cloud computing, analytics and digital engineering, as well as exceptional technical expertise and innovative problem-solving.

• Global footprint: Indian IT services companies have established a strong presence across international markets, with a reputation for delivering high-quality digital transformation, consulting and technology services.

• Strong domain expertise: With extensive cross-industry knowledge, Indian IT companies provide specialised and customised IT solutions for sectors such as Banking and Financial Services (BFS), healthcare, manufacturing, retail and telecommunications.

Sectoral Weaknesses

• Infrastructure challenges: Despite continued progress, infrastructure gaps, such as inconsistent internet connectivity, limited power supply and transportation constraints in certain regions, may affect operational efficiency and sectoral expansion.

• Talent retention pressures: Rising competition for skilled professionals in advanced technologies, along with high employee attrition, remains a challenge for the IT sector.

Sectoral Opportunities

• Growing adoption of emerging technologies: Increasing enterprise investments in AI, Generative AI, cloud computing, cybersecurity, automation, data analytics and Internet of Things (IoT) technologies are creating significant opportunities for growth and innovation in the IT sector.

• Digital transformation: Accelerating digital

transformation initiatives across industries is generating strong demand for cloud migration, application modernisation, managed services, platform engineering and cybersecurity solutions.

• Expansion of Global Capability Centres (GCCs): India continues to emerge as a preferred destination for GCCs, supported by its large talent pool, digital capabilities and cost competitiveness, creating new opportunities for technology services and innovation-led growth.

• Free trade agreements and bilateral partnerships:

Indias expanding network of FTAs with the UK and the EU and bilateral digital and economic partnerships with the US and New Zealand, is expected to improve market access, ease cross-border service delivery, strengthen data and technology cooperation and create new export opportunities for IT and digital services.

• Government Push: Budget 2026 strengthens Indias IT and digital ecosystem through unified tax reforms, simplified safe-harbour rules and faster Advance Pricing Agreement (APA) mechanisms to improve ease of doing business. It also provides long-term tax incentives for data centres and additional support for manufacturing and logistics to attract global investment.

• Strategic partnerships and ecosystem collaborations:

Partnerships with hyperscalers, technology providers and global enterprises are enabling IT companies to strengthen digital capabilities, expand service offerings and deliver integrated solutions to clients.

Sectoral threats

• Huge competition: The IT sector faces increasing competition from global technology firms, emerging digital service providers and start-ups, which may exert pressure on pricing and market share.

• Fast technological evolution: Continuous advancements in AI and digital technologies require ongoing investments in innovation, reskilling and technology upgrades to remain competitive.

• Cybersecurity and data privacy risks: Increasing cyber threats, ransomware attacks and evolving data protection regulations pose operational, financial and reputational risks for IT companies.

• Global economic uncertainties: Changes in global economic conditions, geopolitical developments and regulatory frameworks may impact enterprise technology spending and outsourcing demand.

Company Overview

Saksoft Limited (hereafter referred to as "Saksoft" or "The Company"), with over 25 years of experience since its establishment in 1999, is a technology and digital transformation services provider serving mid-sized enterprises across the USA and Europe. Over the years, the Company has established itself as a trusted partner in delivering end-to-end digital solutions, including digital engineering, quality assurance, cloud services, mobility, Internet of Things (IoT), cybersecurity, infrastructure management, data analytics and Business Intelligence (BI), enabling clients to modernise their technology landscape and improve business outcomes.

The Company operates with a domain-centric delivery model across Banking and Financial Services (BFS), logistics, commerce and other emerging sectors, allowing it to build deep contextual expertise and deliver tailored, business-critical solutions. Saksoft also maintains a strong global presence through its wholly owned subsidiaries and step-down subsidiaries across the US, Europe and Singapore, which support its ability to serve international clients effectively and consistently.

Revenue break-up (FY 2026)

Vertical-wise

BFS-31%

Emerging Verticals - 47%

Logistics- 14%

Digital Commerce - 8%

Offshore vs onsite

Offshore- 56%

Onsite- 44%

Strengths

Experienced Leadership: Saksoft is guided by its visionary founder with over two decades of experience in the Banking and Financial Services sector. The Company is supported by a well-structured organisation and a highly skilled team of IT professionals who manage diverse technologies and global operations, enabling the consistent delivery of high- quality solutions.

Proven Digital Transformation Expertise: The Company specialises in modernising legacy systems and enabling intelligent automation, with a strong focus on application development. Saksofts technical depth has supported sustained growth, reflected in a robust CAGR of 10% over the past three years, while also strengthening long-term client relationships through reliable delivery.

Marquee Client Portfolio: Saksoft serves clients across BFS and Logistics, working with organisations typically in the USD 200 million to USD 3 billion revenue range. The Companys targeted industry approach, combined with a broad client portfolio, has enabled steady growth across segments, with strong traction in Logistics, Fintech and Telecommunications.

Strong Talent Base: The Company is powered by a dedicated and highly skilled workforce with diverse technological capabilities. This strong human capital foundation supports consistent service excellence, encourages innovation and enhances customer experience in a dynamic market environment.

Challenges

Client and regional concentration: The Companys revenue is primarily concentrated in select geographies, with around

79% of its FY 2026 income from clients in the USA and Europe. Saksofts top 20 clients accounted for a significant share of total revenue from operations contributing to around 70% of revenue and the top 10 customers accounting for about 58% during the same period. Saksoft has built a strong and stable client base and continues to maintain long-term relationships with its repeat customers.

COMPANY VERTICALS

Banking and Financial Services (BFS)

Key growth drivers

• Saksoft remained a trusted one-stop partner for FinTech and BFSI clients, offering end-to-end services from design-led conceptualisation to ongoing application support and managed services.

• The Company continued to witness strong demand for digital engineering, cloud modernisation, infrastructure management, quality assurance, FinOps, CloudOps and DataOps-led solutions.

• It expanded engagements with large banking customers across India and Singapore, further strengthening its presence in key BFSI markets.

• The Company enhanced its capabilities in AI-enabled testing, automation and productivity improvement initiatives, driving higher efficiency and improved delivery outcomes.

• Clients increasingly preferred phased, modular transformation programs over large, upfront discretionary projects, supporting sustained engagement and predictable execution cycles.

• Saksoft leveraged its proprietary AI-led platforms and accelerators, including SakMod, SakCelerate, SakPilot and Quality360, to enable modernisation, integration, Artificial Intelligence for IT Operations (AIOps) and operational optimisation.

Operational matrix

• Contributed 31% of Saksofts total revenues during FY 2026, remaining one of the Companys key business segments.

• Revenue mix: USA ~18%, Asia-Pacific and others 13%.

• Continued to service a mix of large and mid-sized BFSI clients with a strong focus on long-term managed engagements.

Emerging Verticals Key growth drivers

• Continued expansion driven by rapid digital adoption across telecom, hi-tech, Software as a Service (SaaS), utilities, healthcare and other digital-first enterprises.

• Strong growth in demand for cloud migration, data engineering, AI-led analytics, automation and platform modernisation services.

• Increasing adoption of scalable digital platforms and Application Programming Interface (API)-led architectures to support evolving business models and ecosystem integration.

• Rising enterprise focus on operational efficiency, customer experience transformation and intelligent automation across core workflows.

• Growing preference for outcome-based delivery models and managed services, supporting deeper long-term client engagement.

Operational matrix

• Contributed 47% of Saksofts total revenues during FY 2026, remaining the Companys largest business vertical.

• Revenue mix: Europe ~28%, USA 18%, Asia-Pacific and others ~1%.

• Expanded presence across 16+ client accounts, generating annual revenues exceeding USD 1 million each.

Logistics

Key growth drivers

• Increasing adoption of digital supply chain platforms, cloud-based logistics solutions and AI-driven operational systems.

• Rising demand for cost-efficient, scalable and automated logistics management solutions across global enterprises.

• Strong focus on modernising legacy systems to enable real-time visibility, predictive analytics and workflow automation.

• Growing emphasis on Agentic AI-led solutions across the shipment lifecycle, including dispatch, tracking and invoicing workflows.

• Continued shift towards long-term transformation partnerships supported by productivity-led delivery models.

Operational matrix

• Contributed 14% of Saksofts total revenues during FY 2026, remaining a strategically important domain vertical.

• Revenue mix: USA 10%, Asia-Pacific and others 4%.

• Expanded engagement scale within key accounts, including a significant ramp-up in large carrier programs.

Commerce

Key growth drivers

• Rising adoption of digital commerce platforms has been driven by increased online shopping penetration and evolving consumer behaviour.

• Expansion of unified commerce ecosystems, including super apps and omnichannel retail experiences.

• Increasing use of advanced payment technologies, such as QR-based payments and biometric authentication, enhances transaction convenience and trust.

• Continued evolution of cross-border trade frameworks and consumer protection regulations supporting digital commerce growth.

• Emergence of immersive commerce experiences, including live shopping and early-stage metaverse- enabled retail engagement models.

Operational matrix

• Contributed 8% of Saksofts total revenues during FY 2026.

• Revenue mix: USA 5%, Asia-Pacific and others 2%, Europe 1%.

• Continued focus on expanding digital transformation engagements across commerce platform ecosystems and retail technology stacks.

Key financial ratios

Regional Growth (%)	FY 2026	FY 2025
Operating Profit Margin (%)	19	17
PAT margin (%)	14	12
Debt-equity ratio*	0.04	0.06
Interest cover (x)	18.57	17.70
Return on Capital Employed (%)	25	23
Return on Net Worth (%)	18	18
Debtors turnover ratio (days)	72	74
Earnings Per Share (Rs.)	10.42	8.21
Current Ratio (x)*	2.30	1.77
Inventory Turnover Ratio	NA	NA

* - Decrease in Debt-Equity ratio indicates lesser reliance on borrowed funds for operations

* improved current ratio indicates improve in working capital due to effective/better cash collection

RISK MANAGEMENT

Saksoft recognises the importance of risk management in todays fast-changing business environment. The Company understands that various risks can affect its operations, goals and long-term sustainability. As an IT services company, Saksoft remains aware of these challenges and continues to work to manage them effectively.

The Company follows a proactive, structured approach to identify and reduce potential risks, helping it remain resilient and adaptable. Saksoft also focuses on protecting its assets and intellectual property while making the most of new opportunities. Overall, the Companys strong focus on risk management plays an important role in supporting its long-term growth and sustainability in the IT services sector.

Key risk areas and mitigation strategies

Saksoft addresses and mitigates various risks, including:

• Talent retention risk: The Company faces increased competition for IT talent, resulting in higher attrition rates.

Mitigation: Saksoft mitigates this risk by positioning itself as an employee-centric organisation that provides employee benefits, along with strong engagement initiatives and structured training and development programs.

• Geo-political risk: The Company is exposed to geopolitical risk, where adverse political and geographical developments could lead to service disruptions and potentially impact key regions, customers, or business verticals important to the Company.

Mitigation: Saksofts entry into any new region, vertical, or customer segment is undertaken only after it passes through a structured risk assessment framework, ensuring that all expansion decisions are carefully evaluated and aligned with the Companys risk management standards.

• Competition risk: The Company operates in the highly competitive IT services industry across both domestic and international markets, subject to continuous competitive pressures.

Mitigation: Saksoft remains nimble in responding to evolving industry dynamics by rapidly adopting new digital tools, thereby strengthening its overall market competitiveness.

• Currency risk: The risk of currency fluctuations remains an ongoing challenge, influenced by changing global economic conditions and broader market dynamics.

Mitigation: The Company mitigates this risk through hedging strategies, thereby protecting itself against sudden foreign exchange fluctuations.

• Information and Cybersecurity risk: The Company faces the risk that cybersecurity breaches may result in the loss of critical assets and sensitive information.

Mitigation: Saksoft mitigates this risk by strengthening its cybersecurity framework through regular security audits, penetration testing, vulnerability assessments, employee training and the implementation of advanced security technologies.

• Regulatory Risk: The Company is exposed to regulatory risk, where non-compliance with local laws and regulations in the countries where it operates could result in financial penalties or even business discontinuation.

Mitigation: Saksoft actively mitigates this risk by continuously monitoring policy changes and maintaining real-time updates on regulatory developments to ensure full compliance with all applicable local laws and standards.

• Cloud Computing Risk: The Company is exposed to data loss due to outages or system failures, which may pose an operational threat.

Mitigation: Saksoft mitigates this risk through robust data access and control protocols designed to safeguard sensitive information. The Company also undertakes regular testing and periodic updates of its disaster recovery and business continuity plans to ensure preparedness for unforeseen disruptions.

Internal control systems and their adequacy

The Company has put in place a structured Internal Control Framework to ensure the efficient use and protection of resources while also complying with applicable policies, procedures and statutory requirements. Saksoft supports this framework through clearly defined guidelines and processes for authorisations, approvals and audits. Overall, the Companys control system covers both financial and operational areas to ensure smooth governance and effective oversight.

The Company has a well-established internal Audit Framework that covers financial and operational controls across all units, functions and departments. Saksoft also maintains a strong financial reporting system to ensure accuracy and transparency. The Companys internal audit team, which includes senior members from various functional departments and Key Managerial Personnel, regularly reviews and improves different processes and activities across the organisation.

The Companys internal audit team regularly reviews internal controls, operating systems and procedures to ensure they are effective and reliable. Saksofts internal audit function also supports the Audit Committee in strengthening oversight across the organisation. The Company further enables independent reviews by external auditors, which helps maintain a transparent and robust governance framework.

Cautionary Statement

The Management Discussion and Analysis Report contains statements relating to the Companys objectives, projections, estimates and expectations that may be regarded as forward-looking statements under applicable laws and regulations. These statements are based on the Managements current assumptions and expectations regarding future events and are therefore subject to various risks and uncertainties that may cause actual results to differ materially from those expressed or implied. Factors that could influence actual outcomes include changes in economic and business conditions, shifts in business strategies, variations in interest rates, inflation or deflation, fluctuations in foreign exchange rates, competitive pressures and changes in government policies, taxation, regulations, or other statutory requirements. The Management assumes no responsibility to publicly update or revise any forward-looking statements based on new information, future events, or other developments.