Saksoft Ltd Management Discussions

Management Discussion and Analysis

Global economic review

Overview: Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably.

The growth in advanced economies remained steady at 1.7% from 2023 to 2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1 % in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026 respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements. The Monetary Policies announced by the Governments over the World, helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US Government threatened to impose tariffs on Countries exporting to the US unless those Countries lowered tariffs for the US to export to their Countries. This enhanced Global Trade and markets uncertainty and emerged as the largest singular uncertainty in 2025. In view of this, The World Bank projected global economic growth at 2.7 per cent for 2025 and 2026, factoring the various economic uncertainties.

Regional growth (%)	2024	2023
World Output	3.2	3.3
Advanced Economies	1.7	1.7
Emerging and Developing	4.2	4.4
Economies

(Source: IMF, KPMG, =ress Information 3ureau BBC, India Today!

Performance of the major economies, 2024 United States: Reported GDP growth of 2.8% in 2024 compared to 2.9% in 2023.

China: GDP growth was 5.0% in 2024 compared to 5.2% in 2023.

United Kingdom: GDP growth was 0.8% in 2024 compared to 0.4% in 2023.

Japan: GDP growth was 0.1% in 2024 compared to 1.9% in 2023.

Germany: GDP contracted by 0.2% in 2024 compared to a 0.3% decline in 2023.

(Source: CNBC, China Briefing, ons.gov.uk, Trading Economics, Reuters)

Outlook:

The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some Countries announcing reciprocal tariffs on US exports to their Countries. This is likely to stagger Global Economic Growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks.

(Source: IMF, Unted Nations)

Indian economic review

Overview

The Indian economy was projected to grow at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four-year low dueto a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy.

Indias nominal GDP (at current prices) was 7331 trillion in FY 2024-25 (7301.23 trillion in FY 2023-24). The nominal GDP per capita increased from 72,15,936 in FY 2023-24 to 72,35,108 in FY 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened by 2.12?% against the US dollar in FY 2024-25, closing at 785.47 on the last trading day of FY25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar).

Inflationary pressures eased, with CPI inflation averaging 4.63?% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in FY 2024-25, was the lowest since the pandemic, catalysing savings creation.

Indias Foreign Exchange reserves stood at a high of $676 billion as of April 04, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualized rating upgrade rate 14.5% exceeded the decade- long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross inward Foreign Direct Investment revived in FY25, rising 20.6% YoY from $51.8 billion in the first eight months of FY24 to $62.5 billion during the same period in FY25. Flowever, the net Foreign Direct Investment in India declined from USD 7.84 billion in the first nine months of FY24 to USD 1.18 billion in the corresponding period in FY25, followed increased repatriation and investments by Indian firms across international geographies.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5

E: Estimated

(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, FY 2024-25

	Q1 FY25	Q2 FY25	Q3 FY25	Q4FY25
Real GDP growth (%)	6.5	5.6	6.2	7.4

E: Estimated

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross Non-Performing Assets (NPA) for Scheduled Commercial Banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services are projected to reach $800 billion in FY 2024-25, up from $778 billion in the previous Fiscal Year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports were expected to grow 2.2% YoY, reaching $446.5 billion.

Indias net GST collections increased 8.6%, totalling 719.56 akh crore in FY 2024-25. Gross GST collections in FY 2024-25 stood at 722.08 lakh crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The Industrial Sector was expected to grow 6.2%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew an estimated 7.3% in FY25 (9.0% in FY24), driven by Public Administration, Defence and other

Services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY25, compared to 8.6% in FY24. Meanwhile, the Construction Sector expanded at ~8.6% in FY25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY25, with growth projected at 4.3%, which was lower than 12.3% in FY24. Moreover, due to lower public spending in the early part of the year, Government Final Consumption Expenditure (GFCE) is anticipated to have slowed to 3.8% in FY25, compared to 8.1 % in FY24.

The Agriculture Sector growth was estimated at 3.8% in 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in 2023-24).

From a demand perspective, private final consumption expenditure at constant prices was forecast to grow 7.3%, indicating a rebound in rural demand and stronger consumer confidence.

The Nifty 50 and SENSEX recorded their weakest annua performances in FY 25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of $3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the Mutual Fund (MF) Industry jumped 23% or Rs 12.3 lakh crore in Fiscal 2025 to settle at Rs 65.7 lakh crore. At close of FY25, the total number of folios had jumped to nearly 23.5 crore, an all-time peak. During last Fiscal, average monthly Systematic Investment Plan (SIP) contribution jumped 45% to Rs 24,113 crore.

Foreign Portfolio Investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately $20 billion by year-end. However, there was significant selling pressure in the last guarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook: India is expected to remain the fastest-growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other Countries. The following are some key growth catalysts for India in FY26.

Tariff-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the USs high tariffs give New Delhi a competitive advantage in the American Market over other

Suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel Imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget FY 2025-26: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasizing Agriculture, MSMEs, Investment, and Exports as the four primary Growth Engines. With a Fiscal Deficit target of 4.4% of GDP, the Government reinforced Fiscal prudence while allocating ?11.21 lakh crore for Capital Expenditure (3.1% of GDP) to drive Infrastructure Development. The February 2025 Budget marked a shift in approach, with the Government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to ?12 lakh annually will be fully exempt from income tax. Economists estimate that the resulting ?1 lakh crore in tax savings could boost consumption by ?3-3.5 lakh crore, potentially increasing the nominal Private Final Consumption Expenditure (PFCE) by 1.5-2% of its current ?200 lakh crore.

Pay Commission impact: The 8^th Pay Commissions awards could lead to a significant salary revision for nearly ten million Central Government Employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7^th Pay Commission more than tripled its monthly salaries, raising the range from 77,000 to 790,000 to ?18,000 to 712.5 lakh, triggering a widespread ripple effect.

Monsoons: The India Meteorological Department predicted an above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias Consumer Price Index-based retail inflation in March 2025 eased to 3.34 per cent, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions: In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. Elowever, under its new leadership, the RBI has prioritized restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Global IT industry

The Global Information Technology (IT) market was valued at USD 11,681.64 billion in 2024 and is projected to reach USD 29,886.75 billion by 2033, growing at a Compound Annual Growth Rate (CAGR) of 11.0% during the forecast period from 2025 to 2033.

This robust growth is being fueled by several key drivers, most notably the rising demand for digital solutions and technologies across various industries. As organizations increasingly embrace digital transformation, IT services have become crucial in helping businesses adapt and thrive in a rapidly evolving digital landscape. Major industry players are heavily investing in innovative IT products and services to meet these shifting demands, further propelling market momentum.

In addition, technological advancements are reshaping the IT sector. Breakthroughs in IT infrastructure, Cloud Computing, and Cybersecurity are accelerating growth, as Companies place greater emphasis on digitalization, data protection, and remote working capabilities. The ongoing evolution of technology standards, coupled with the critical need for effective digital transformation, continues to drive widespread adoption of cutting-edge IT solutions, reinforcing the markets upward trajectory.

The global IT services market is experiencing robust growth, driven by the increasing adoption of digital technologies such as Al, Machine Learning, and Cloud Computing across various industry verticals. This market growth is further fuelled by the rising demand for cybersecurity solutions and data analytics, as businesses seek to enhance data security and leverage big data for improved decision-making. The IT services industry is witnessing a surge in demand from Small and Medium Enterprises (SMEs), which are increasingly relying on IT services for digital transformation and to compete effectively in the global market.

Regionally, North America has been a dominant player, but the Asia Pacific region is expected to experience the fastest growth, driven by increased IT spending and the integration of advanced technologies by businesses.

The market overview indicates that the IT services market is poised for continued expansion, with trends like Cloud Services, loT, and Automation shaping the future of the industry.

(Source: Mordor Intelligence, Business Research Insights)

Worldwide IT spending forecast (Millions of U.S. Dollars)

	2024 Spending	2024 Growth (%) 1	2025 Spending	2025 Growth (%) I
Data Center Systems	329,132	39.4	405,505	23.2
Devices	734,162	6.0	810,234	10.4
Software	-	7.20	1,246,842	14.2
IT Services	-	5.6	1,731,467	9.0
Communications Services		2.3	1,423,746	3.8
Overall IT	5,114,771	7.7	5,617,795	9.8

Source: Gartner (January 2025)

IT Service Industry

The IT service market is poised for a significant revenue surge, with estimated revenues of USD 1,512.00 billion by 2025. Within this market, IT outsourcing is expected to dominate, with an estimated market volume of USD 591.20 billion in the same year. The Compounded Annual Growth Rate from 2025 to 2029 is expected to be 5.58%, resulting in a market volume of USD 1,879.00 billion by 2029. The average spend per employee in the IT services market is estimated to reach USD 420.90 by 2025.

The United States is expected to generate the highest revenue, reaching USD 550.30 billion in 2025. The United States leads the worldwide IT services market with a strong emphasis on Cloud Computing and Digital Transformation initiatives.

The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totalling USD 138.6 billion up from USD 124.7 billion last year. Indias IT industry is likely to hit the USD 350 billion mark by 2026 and contribute 10% towards the Countrys Gross Domestic Product. Indias IT export revenue rose by 9% in constant currency terms to USD 194 billion in FY23. Exports from the Indian IT services industry stood at USD 199 billion in FY24. The export of IT services had been the major contributor, accounting for more than 53% of total IT exports (including hardware).

Technologies such as blockchain technology, edge computing, and quantum computing were gaining traction. The IT industry was evolving to incorporate emerging innovations which was driving demand for specialized IT services, contributing to the market growth. The rise of remote and hybrid work models had led to increased reliance on IT solutions that support collaboration, communication, and productivity. Tools like video conferencing, project management software, and secure remote access are in high demand, which is significantly driving the IT services market growth.

(Source: IBEF, Polaris Market Research, Statista)

The digital transformation

Digital transformation involves the seamless integration of digital technologies into every aspect of an organization, fundamentally reshaping how businesses operate and deliver value to their customers. This transformation spans a wide array of technologies, including Cloud Computing, Artificial Intelligence (Al), Machine Learning, Big Data Analytics, and the nternet of Things (loT).

The digital transformation market is experiencing rapid growth, driven by the rising demand for automation and digital solutions across sectors such as healthcare, financial technology (Fintech), retail e-commerce, manufacturing, transportation, and logistics. More than just a technological shift, digital transformation requires a cultural evolution- encouraging organizations to become more agile, innovative, and focused on customer experience.

It is an ongoing journey that demands sustained commitment and investment. Companies that effectively embrace digital transformation stand to gain substantial advantages, including enhanced customer satisfaction, greater operational efficiency, and stronger capabilities for innovation.

The global digital transformation market was valued at USD 1,070.43 billion in 2024 and is expected to grow at a 28.5% CAGR from 2025 to 2030. The increasing adoption of Cloud Computing drives this growth, enabling businesses to scale efficiently, reduce IT costs, and enhance agility. Key cloud service providers like AWS, Microsoft Azure, and Google Cloud fuel this transformation with Al-powered analytics, Cybersecurity solutions, and automation tools.

The Indian digital transformation market size is estimated at USD 108.42 billion in 2025, and is expected to reach USD 276.95 billion by 2030, at a CAGR of 20.63% during the estimated period 2025-2030. North America dominated the global market with a share of 44.49% in 2023. The U.S. digital transformation market is anticipated to grow significantly, reaching an estimated value of USD 2.39 trillion by 2032, driven by rising adoption and investment in Cloud Infrastructure, loT, and 5G.

The global digital transformation market in the BFSI (Banking, Financial Services, and Insurance) sector is projected to reach USD 215 billion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 15.8% over the forecast period. The key factor driving this growth is the need for the finance sector to integrate cutting-edge Al-based solutions to become more consumer-centric. The key market drivers for digital transformation in the BFSI sector include the need to improve customer experience, increase operational efficiency, and reduce costs. Opportunities for exploration and capture abound in areas such as Artificial Intelligence, Blockchain, and Omnichannel Banking. Recent trends have seen a surge in the adoption of mobile banking, cloud computing, and data analytics, leading to increased digitization and automation which aim to provide faster, more secure, and transparent payment processes.

Currently, customers expect to be able to conduct their business, do their work, and live their lives using the latest technology advances. They expect this ability from wherever they are, anytime they want to, using the device of their choice, and with all the supporting information and personalized content they need close at hand. The ultimate goal of digital transformation is to meet these expectations.

Every organizations digital transformation implementation is unique. It can begin with a single focused technology project or as a comprehensive enterprise-wide initiative. It can range from integrating digital technologies and solutions into existing processes and products to reinventing processes and products or creating entirely new revenue streams by leveraging emerging technologies.

With more than two decades of experience in providing customized IT solutions, Saksoft has established itself as a reliable global partner serving a wide range of industries. Through its focus on digital transformation, the Company enables organizations to enhance operational efficiency, modernize their IT infrastructure, and improve system management-ultimately boosting productivity and strategic alignment. As the IT landscape continues to evolve, Saksoft remains well-positioned to capitalize on emerging opportunities, drawing on its agility and forward-thinking approach to fuel innovation and sustainable growth.

(Source: Mordor Intelligence, IBM, Fortune Business Insights, KBV research, Market Research Future, Precedence research, Grand view research)

Sectoral strengths

Talent pool: India possesses a vast and skilled IT workforce, distinguished by exceptional technical expertise and innovative problem-solving capabilities.

Cost competitiveness: The Indian IT services industry offers cost-effective solutions, providing a significant competitive edge over many other regions.

Global presence: Indian IT services Companies have established a strong presence in global markets, with a reputation for delivering high-quality services.

Domain expertise: With diverse domain knowledge, Indian IT services Companies can provide specialized and tailored IT services that cater to specific industry requirements.

Sectoral weaknesses

Infrastructure challenges: India faces significant infrastructure hurdles, including inadequate internet connectivity, unreliable power supply, and limited transportation options, which can impede the growth of the IT sector.

Cultural and language barriers: Language differences and cultural nuances can create obstacles in communication and collaboration with global clients, potentially affecting the delivery of IT services.

Sectoral opportunities

Rising demand for emerging technologies: The increasing adoption of cloud computing, big data analytics, and other emerging technologies presents a significant opportunity for growth and innovation in the IT sector.

Digital transformation drive: The accelerating trend of digital transformation across various industries creates a vast potential for IT service providers to offer tailored solutions and support businesses in their transformation journeys.

Untapped markets and potential: Emerging markets and untapped geographies offer a significant opportunity for IT businesses to expand their customer base, introduce new products and services, and establish a strong global presence.

Strategic partnerships and collaborations: The IT sector is poised for growth through partnerships and collaborations with other businesses, enabling companies to leverage each others strengths, drive innovation, and deliver comprehensive solutions to clients.

Sectoral threats

Intensifying competition: The IT sector faces increasing competition from established players, emerging start-ups, and new entrants, which can lead to market share erosion and downward pressure on pricing.

Technological uncertainty: Rapid technological advancements and shifting trends create uncertainty, making it challenging for IT Companies to anticipate and adapt to changing market demands.

Regulatory risks: Changes in Government regulations, policies, and laws can significantly impact the IT sector, affecting business operations, profitability, and overall growth prospects.

Cybersecurity concerns: The rising threat of cybersecurity breaches and data compromises poses a significant risk to IT Companies, potentially damaging their reputation, eroding customer trust, and resulting in financial losses.

Company overview

Saksoft Limited, incorporated in 1999, has established itself as a reliable global partner for mid-tier Companies in the USA and Europe, specializing in digital transformation solutions. The Companys comprehensive service portfolio encompasses digital engineering, testing and quality assurance, as well as cutting-edge solutions focused on cloud, mobility, Internet of Things (loT), Data, and Business Intelligence (Bl). To address the evolving needs of its clients, Saksoft has developed a flexible business model, emphasizing its Inch wide, mile deep approach to craft mission-critical, industry-specific solutions. With a significant global presence, Saksoft boasts five Wholly- Owned Subsidiaries and seven step-down Subsidiaries spanning the US, Europe, and Singapore.

We provide technology services to Companies in the industry verticals of BFS, Logistics and Emerging Verticals. We help our clients with Application Engineering, Quality Assurance &. Testing, Data Analytics, Cloud, Infrastructure and Cyber Security Services.

Revenue break-up (FY25)

Vertical-wise

BFS - 30%

Emerging Verticals- 46%

Logistics - 13%

Commerce -11%

Offshore vs onsite

Offshore- 55%

Onsite- 45%

Strengths

Experienced leadership and skilled team

The Company thrives under the visionary leadership of its founder, who brings over two decades of experience in the Banking and Financial Services Sector. This strong foundation is further reinforced by a team of proficient IT professionals managing diverse technologies and global operations within a structured organizational framework—ensuring the consistent delivery of high-quality solutions and services.

Trusted digital transformation partner

Recognized as a reliable partner in digital transformation, the Company specializes in modernizing legacy systems and implementing intelligent automation, with a particular emphasis on application development. This expertise has driven a robust Compound Annual Growth Rate (CAGR) of 18% over the past three years, while also fostering long-term client relationships through exceptional service delivery.

Niche market focus and diversified clientele

The Company strategically targets niche verticals such as BFS, Logistics. Serving a broad spectrum of clients with annual revenues ranging from USD 200 million to USD 3 billion, this focused approach has resulted in steady growth across all sectors-most notably in Logistics, Fintech, and Telecommunications.

Strong human capital

Business growth is driven by a dedicated, passionate, and highly skilled workforce with diverse and advanced capabilities. This talent base empowers the Company to consistently deliver exceptional customer experiences, maintain a competitive edge, and foster innovation in an ever- evolving market landscape.

Challenges

Client and geographic concentration: Saksofts revenue is focussed on certain geographies, with a majority of its income (around 66%) generated from clients located in the USA and Europe during FY25.

The Companys top 20 clients accounted for a significant portion of its total Operating Income, with the top ten customers contributing around 59% during the same period. Saksoft has built a strong client base and maintains ongoing relationships with repeat customers.

Company verticals Banking and Financial Services

Key growth drivers

• Saksoft is a trusted one-stop partner for FinTech companies, offering comprehensive services from design- led conceptualization to ongoing application support.

• The Company leverages innovative technologies to deliver futuristic FinTech solutions that transform user experiences, ensure robust data security, and provide actionable insights.

• Its team of experts possesses extensive product engineering knowledge, enabling ittocrafttaiIored solutions that meet the unigue needs of FinTech businesses.

• With in-depth understanding of the FinTech landscape, the Company designs solutions that addresses industry- specific challenges, capitalizes on emerging trends, and drives business growth.

• Emergence of new technologies such as blockchain and decentralized finance.

Operational matrix

• Contributes 30% to total revenues

• Revenue mix is USA 11 % and Asia-Pacific and others 19%

• 5 clients in the USD 1 Million-plus and 2 clients in the USD 0.5 Million-plus account.

Emerging Verticals Key growth drivers

• Widespread availability of affordable high-tech devices such as computers and smartphones

• Reduced data costs

• Accelerated rollout of 5G networks

• Growing number of mobile subscribers

• Increasing demand for high-speed data connectivity

• Rapid adoption of advanced and emerging technologies

Operational matrix

• Contributes 46% to total revenues

* Revenue mix is Europe is 21% and Asia-Pacific and others 10% and 15% in USA

• 8 clients in the USD 1 Million-plus

Logistics

Key growth drivers

• Growing adoption of cloud-based services

• Rising demand for cost-efficient logistics and supply chain solutions

• Increasing emphasis on sustainable or green logistics practices

* Emergence of integrated and interconnected business ecosystems

Operational matrix

? Contributes 13% to total revenues

? Revenue mix is USA is 9% and Asia-Pacific and others 3% and 1 % in Europe

• 1 client in the USD 1 Million-plus and 2 clients in the USD 0.5 Million-plus account

Commerce Key growth drivers

• Implementation of cross-border trade and consumer protection regulations

• Growing consumer preference for online shopping platforms

• Rising popularity of super apps that enable users to shop across multiple retailers within a single application

• Expansion of innovative payment methods, such as QR codes and biometric authentication, enhancing customer convenience and trust

• Emerging trends like live shopping and commerce in the metaverse are creating more personalized and immersive shopping experiences

Operational matrix

• Contributes 11 % to total revenues

* Revenue mix is USA 7%, Asia-Pacific and others 3% and Europe 1%

• 1 client in the USD 1 Million-plus and 2 clients in the USD 0.5 Million-plus account

Key financial ratios

Regional growth (%)	FY24-25	FY 23-24
Operating Profit Margin (%)	17	18
PAT margin (%)	12	13
Debt-eguity ratio	0.06	0.02
Interest cover (x)	17.70	37.32
Return on Capital Employed (%)	23	26
Return on Net Worth (%)	18	19
Debtors turnover ratio (days)	74	67
Earnings Per Share (Rs.)	8.21	7.66
Current Ratio (x)	1.77	2.01
Inventory Turnover Ratio	NA	NA

ANNEXURE-8

Risk Management

Saksoft recognizes the critical importance of risk management in todays rapidly evolving business landscape. As a pioneering IT services company, we acknowledge the broad range of risks that can impact our operations, objectives, and sustainability.

At Saksoft, we adopt a proactive and meticulous approach to risk management, identifying and mitigating potential threats to enhance our resilience and adaptability safeguard our assets and Intellectual Property, confidently capitalize on emerging opportunities, our commitment to effective risk management is the cornerstone of our long-term success and sustainability in the dynamic IT services sector.

Key risk areas and mitigation strategies

We address and mitigate various risks, including:

Talent retention risk: The competition for IT talent is increasing, resulting in higher attrition rates.

Mitigation: Saksoft is an employee-centric organisation which provides employee benefits, engagement and training and development programs.

Geo-political risk: Adverse political and geographical risks could cause service disruption, potentially impacting regions, customers or verticals that are important for the Company.

Mitigation: Saksofts entry into a new region, vertical or customer only takes place after passing through the risk assessment filter or framework.

Competition risk: The IT services industry is highly competitive in both domestic and international markets.

Mitigation: Saksoft is nimble and responds quickly to industry changes by adopting new digital tools that strengthens its competitiveness

Currency risk: The risk of currency fluctuations is an ongoing challenge depending on global and economic dynamics.

Mitigation: Saksoft mitigates this risk through hedging strategies, protecting against sudden forex fluctuations.

Information and Cybersecurity risk: Cybersecurity breaches may lead to loss of critical assets and sensitive information.

Mitigation: Strengthening Cybersecurity systems through regular security audits, penetration testing, vulnerability

assessments, employee training and implementing advanced security technologies.

Regulatory risk: Non-compliance with local laws and regulations in the Countries where Saksoft operates could result in financial penalties or even business discontinuation.

Mitigation: Saksoft actively monitors policy changes and maintains real-time updates on regulatory developments to ensure full compliance with all applicable local laws and standards.

Cloud computing risk: Data loss due to outages or system failures presents a potential operational threat.

Mitigation: Saksoft has implemented robust data access and control protocols to safeguard sensitive information. The Company also conducts regular testing and updates of its disaster recovery and business continuity plans to ensure readiness for unexpected disruptions.

Internal control systems and their adequacy

Saksoft had established a robust and intricate Internal Control Framework to ensure the efficient use and protection of resources, as well as compliance with policies, procedures, and statutory requirements. This framework is supported by well-documented guidelines and procedures for authorization, approvals, and audits, which extensively cover all aspects of financial and operational controls.

The Company Internal Audit Framework is well-established, covering financial controls, operational controls, and all units, functions, and departments. Additionally, we maintain an efficient financial reporting system, ensuring accuracy and transparency. Our Internal Audit team, comprising senior members from various functional departments, including Key Managerial Personnel, actively evaluates and improves various functions and activities.

The Internal Audit team engages in active review of Internal Controls, operating systems, and procedures. Furthermore, our Internal Audit cell supports the Audit Committee and facilitates independent review of Internal Controls, operating systems, and procedures by External Auditors, ensuring a rigorous and transparent Governance structure.

Cautionary Statement

The statements made in this section are forward-looking and describe the Companys objectives, projections, expectations, and estimations. These statements are based on certain assumptions and expectations of future events, but the Company cannot guarantee their accuracy or realization. Actual results may differ materially from those expressed or implied due to external factors beyond the Companys control. The Company disclaims any responsibility to publicly update, modify, or revise any forward-looking statements in light of new developments, information, or events.