Silicon Rental Solutions Ltd Management Discussions

1. PRIMARY BUSINESS OF THE COMPANY

Our Company was incorporated as ‘Silicon Rental Solutions Private Limited under the Companies Act, 2013, pursuant to a certificate of incorporation dated January 28, 2016, issued by the RoC, Mumbai having CIN as U74999MH2016PTC272442. Thereafter, our Company was converted from a private limited company to a public limited company, pursuant to a special resolution passed by the shareholders of our Company on July 06, 2022 and the name of the Company was changed from "Silicon Rental Solutions Private Limited" to "Silicon Rental Solutions Limited" vide fresh certificate of incorporation dated July 22, 2022 issued by the ROC, Mumbai. The Corporate identification number of our Company is L74999MH2016PLC272442. Further the Company has issued share pursuant to Initial Public Offer (IPO) and listed on SME platform of BSE LTD on October 10, 2022.

Our Company is an IT equipment outsourcing company, engaged in providing end to end IT equipment on a rental and returnable basis in India. We provide laptops, desktops, printers, servers and other peripherals like CCTV cameras, projectors, storage devices etc. on rental basis mainly to small, medium and large corporate. Based on the clients IT requirements, we offer them tailor-made rental schemes that suit their requirements. By providing the IT rental services to our customers, we provide them with the flexibility and advantage to acquire the requisite equipment that they need to maximize their productivity without compromising their IT budget. In addition, we also sell the used IT equipment to clients as per their requirements.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

As of 2025, Indias Information Technology (IT) and Information Technology Enabled Services (ITeS) and sector remains a global leader, serving as a key driver of economic growth, technological innovation, and employment generation. The sectors contribution to Indias GDP is substantial, with projections suggesting it could account for 10% of the GDP by 2026.

One of the notable emerging trends within the industry is the rapid expansion of the IT equipment rental and trading segment. This sub-sector has evolved into a critical component of the broader IT ecosystem in India, gaining momentum due to several contributing factors:

1. Demand for Cost-Effective and Flexible IT

Infrastructure: With businesses focusing on capital efficiency, renting IT hardware provides a low-CAPEX, scalable model. This is particularly attractive to SMEs and startups, which can avoid upfront investments and scale hardware needs as operations grow.

2. Rapid Growth of the Startup and Project Economy: Indias vibrant startup ecosystem and increase in project-based work have created a strong use case for short- and medium-term rentals. Whether for a 6-month pilot, new office setup, or contractual project, rentals offer a plug-and-play solution without long-term financial commitments.

3. Faster Technology Obsolescence: With rapid advancements in cloud computing, AI, ML, and IoT, IT hardware becomes obsolete faster. Renting allows companies to stay current with the latest technology without being burdened by outdated equipment.

4. Government-Led Digitization Initiatives:

Programs like Digital India, make in India, and Startup India are fuelling tech adoption across industries, including education, healthcare, and governance. As digital infrastructure grows, so does the need for accessible and deployable IT hardware a gap effectively filled by rental models.

5. Green IT and Circular Economy Alignment:

As sustainability becomes a boardroom priority, renting IT equipment supports reuse, recycling, and waste reduction, aligning with ESG goals and promoting circular economy practices. This is especially appealing to corporates and MNCs focused on reducing e-waste.

6. Flexibility:Tax Rentals are treated as operational expenses (OPEX) and can be fully deducted from taxable income, unlike capital purchases which require depreciation. This offers companies improved cash flow management and tax benefits.

7. Availability of Value-Added Services: Rental firms in India now offer not just hardware, but bundled services like AMC (Annual Maintenance Contracts), software licensing, installation, insurance, and helpdesk support, making them reliable end-to-end partners.

8. Increased Venture Capital and Investor Backing: The sector is attracting private equity and venture capital investments, fuelling innovation, expansion, and professionalization. This has led to the emergence of national rental networks with standardised SLAs and transparent pricing.

9. Hybrid and Remote Work Models: The post-pandemic work culture shift has driven demand for decentralized device deployment, where businesses can rent and deliver laptops/desktops across cities for remote employees, contract workers, or temporary setups.

10. Compliance and Security Needs: IT rentals are well-suited for enterprises that need pre-configured, policy-compliant devices to meet internal IT governance or external regulatory standards (e.g., in BFSI, healthcare, or defence sectors), without investing in large internal IT teams.

11. Education and Skill Development Demand:

Schools, colleges, and training institutes across Tier 2 and Tier 3 cities are increasingly turning to IT lab rentals as a way to offer digital learning without bearing the full cost of infrastructure ownership.

In 2025, the IT equipment rental and trading market in India is poised for further growth, driven by the ongoing digital transformation across sectors. The industry is expected to play an increasingly important role in supporting businesses with scalable, efficient, and cost-effective IT infrastructure solutions. This segment is not only catering to domestic demand but is also expanding its footprint globally, contributing to Indias status as a leading hub for IT services and solutions.

3. COMPETITIVE STRENGTHS

1. Comprehensive and Customizable IT Solutions

i) Proven ability to deliver cost-effective, integrated IT solutions tailored to specific customer requirements.

ii) Extensive portfolio of latest high-end equipment , including laptops, desktops, printers, servers, and refurbished IT assets.

iii) Access to all major global brands such as

HP, Dell, Lenovo, Apple, Asus, Intel, AMD, Gigabyte, SonicWall, D-Link, and Cisco.

iv) Flexible rental schemes, curated to suit varying business needs across industries and scales.

2. Pan-India Presence with a Diverse Client Base

i) Deep experience serving a wide spectrum of industries, including logistics, BPO, pharmaceuticals, e-commerce, education, IT services, insurance, research, and media & entertainment.

ii) In FY 2024–25, served 250+ clients across 16 states and 3 Union Territories, reflecting our strong domestic presence and operational reach.

3. Seasoned Leadership and Skilled Operations Team

i) Led by a qualified and experienced management team with decades of expertise in the IT hardware and services space.

ii) Strong focus on talent acquisition and training fostering employee loyalty, retention, , and quality performance.

iii) Top management with 30+ years of experiencein the IT industry. iv) Over 10% of the workforce has been with the company for 20+ years, a testament to our stable and experienced talent pool.

4. Strong and Enduring Customer Relationships

i) Ability to deliver bespoke solutions aligned with specific client objectives, industry norms, and operational needs.

ii) A proven track record of high-quality, cost-efficient service delivery over the years.

iii) Focused on maximizing client productivity while optimizing IT budgets, ensuring measurable business value and long-term satisfaction.

4. GROWTH STRATEGIES

1. Continue to Expand Our Customer Base i) Leverage the rising demand for IT hardware rentals to grow our PAN-India customer footprint, while nurturing long-term relationships with existing clients. ii) Attract high-value enterprise clients through targeted marketing, enhanced service offerings, and value-driven engagement strategies. iii) Adapt and expand services proactively to meet evolving business needs capture new , verticals, and drive sustained revenue growth.

2. Strengthen Presence in Tier 2 and Tier 3 Cities i) Capitalize on our operational expertise to expand into underserved Tier 2 and Tier 3 markets , enabling businesses with cost-efficient IT infrastructure. ii) Provide scalable rental models to help growing enterprises in these regions access quality hardware without high capital investments. iii) Establish direct operations and local partnerships to deepen reach and improve service delivery in emerging markets.

3. Focus on Emerging Technologies and Solutions i) Stay ahead of market trends by continuously tracking and adopting cutting-edge technologies. ii) Upgrade existing IT inventory regularly to meet modern performance standards and enhance customer experience. iii) Expand offerings into high-demand areas such as cybersecurity, software licensing, networking solutions, and enterprise tools. iv) Establish an in-house R&D team to develop customized IT solutions and drive innovation in service delivery, automation, and integration.

4. Optimal Utilization of Resources i) Improve internal by streamlining technical workflows,logistics, and servicing protocols. ii) Invest in the development of robust systems and technology platforms to ensure seamless operations, tracking, and reporting. iii) Conduct regular policy reviews and process audits to eliminate bottlenecks and enhance productivity across departments.

5. Targeted Marketing and Positioning i) Reinforce our value proposition as a one-stop solution provider for all IT hardware and support needs. ii) Align marketing strategies to focus on customer-specific requirements , delivering tailored solutions. iii) Emphasize value-added services such as AMC, warranty handling, insurance, installation, and remote support to build trust. iv) Continuously update and diversify our product and service portfolio in line with market trends and client feedback.

v) Ensure timely, responsive support to solidify our reputation and foster long-term customer confidence.

6. Strategic Partnerships and Alliances i) Proactively pursue new partnerships and collaborations with OEMs, distributors, managed service providers, and system integrators to enhance offerings. ii) Explore co-branded ventures and strategic alliances to enter new markets, strengthen technical capabilities, and offer bundled hardware-software solutions.

5. OPPORTUNITIES

The IT rental industry is poised for growth, driven by various market trends, technological advancements, and changing business needs. Here are some key opportunities and the outlook for the IT rental space in the near future:

1. Increased Demand for Flexible Solutions a. Shift to Remote and Hybrid Work: The rise of remote and hybrid work models has increased demand for flexible IT solutions. Companies are looking to rent equipment rather than invest in expensive, permanent assets to support a distributed workforce. b. Short-Term Projects and Events: Organizations running short-term projects, events, or training sessions often prefer renting IT equipment to avoid long-term capital expenditure.

2. Growth in Startups and SMEs a. Cost-Effective Solutions: Startups and small to medium-sized enterprises (SMEs) often have limited budgets and prefer renting IT equipment to manage cash flow better. This trend is likely to continue as more startups emerge in the tech space. b. Scalability Needs: SMEs that are scaling rapidly may find renting IT equipment advantageous to meet their evolving needs without significant upfront investment.

3. Sustainability a. E-Waste Reduction: As sustainability becomes a priority, companies are looking for ways to reduce e-waste. Renting IT equipment allows for more efficient use of resources, as equipment can be reused by multiple customers.

4. Technological Advancements a. Demand for Cutting-Edge Technology: Companies want access to the latest technology without the commitment of ownership. This includes high-end servers, VR/AR equipment, and specialized software, which they can rent for specific projects. b. IoT and AI Integration: As Internet of Things (IoT) devices and AI-driven technology become more prevalent, there is an opportunity to offer these as part of rental packages, catering to businesses looking to experiment with new tech without heavy investment.

5. Customization and Managed Services a. Tailored Solutions: Offering customized rental packages based on specific industry needs, such as pre-configured laptops for software development or high-performance workstations for design work, can differentiate your services. b. Managed IT Services: Combining equipment rental with managed IT services, such as technical support, software management, and cloud integration, can create a more comprehensive offering and generate additional revenue streams.

6. Education and E-Learning a. Online Learning Tools: The education sector, particularly institutions and e-learning platforms, may require temporary IT solutions for remote learning, testing, and virtual classrooms. b. Government and Nonprofit Partnerships: Partnering with governments or nonprofits to provide IT equipment for educational initiatives, especially in underserved areas, can be a significant growth area.

7. Evolving Consumer Behavior a. Subscription Models: The growing preference for subscription-based services across various industries can be leveraged to offer IT equipment on a subscription basis, providing predictable revenue streams. b. On-Demand Rentals: Catering to the gig economy and freelancers who require high-performance IT equipment on an ad-hoc basis can open new avenues for business.

6. INDUSTRY OUTLOOK

1. Steady Growth Trajectory: The IT rental industry is poised for sustained growth , driven by an increasing number of businesses opting for rental-based models to maintain agility and financial flexibility in their IT infrastructure.

2. Innovation-Driven Demand: With the rapid pace of technological advancement organizations are , under constant pressure to stay updated. Renting enables them to access the latest hardware without high capital outlay making it a preferred , choice in innovation-focused environments.

3. Global and Emerging Market Expansion: There is a significant opportunity for international expansion, especially in emerging economies where businesses face cost pressures and may view rentals as a practical alternative to outright purchases.

4. Service Quality as a Differentiator:Companies that focus on delivering high-quality service, including reliable equipment, technical support, and flexible terms, will likely thrive in this competitive landscape.

In summary, the IT rental industry is well-positioned for growth, with numerous opportunities driven by changing business practices, technological advancements, and a growing focus on sustainability and flexibility

7. RISKS AND CONCERNS

As an IT rental company, your business faces several risks and concerns that can impact operations, profitability, and reputation. Heres an overview of the major ones:

1. Equipment Damage and Loss a. Damage: Rented equipment might be returned damaged, leading to repair costs and downtime. b. Theft or Loss: Equipment could be stolen or lost, especially in high-risk areas, resulting in financial loss.

2. Obsolescence a. Rapid Technological Changes: IT equipment quickly becomes outdated. Keeping up with new technology can be costly.

3. Customer Default Risks a. Non-payment: Some customers may default on payments, leading to financial losses. b. Credit Risk: Extending credit to customers poses a risk if they fail to pay on time or at all.

4. Market Competition a. Pricing Pressure: Intense competition may force you to lower prices, squeezing margins. b. Market Saturation: The IT rental market can be saturated in certain areas, making it hard to differentiate your services.

5. Supply Chain Disruptions a. Vendor Dependence: Relying on specific vendors for IT equipment can be risky if they face supply chain issues. b. Global Events: Events like pandemics, geopolitical tensions, or natural disasters can disrupt the supply chain, affecting your ability to procure and deliver equipment.

6. Environmental Concerns a. E-Waste Management: Disposing of or recycling outdated equipment in an environmentally friendly way is becoming increasingly important. b. Regulatory Compliance: Complying with environmental regulations related to e-waste can be challenging and costly.

Addressing these risks through robust risk management strategies, insurance, and operational best practices is essential for sustaining and growing your business.

8. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

In addition to the above, the Company has formulated a Vigil Mechanism (Whistle Blower Policy) for its Directors and Employees for reporting genuine concerns about unethical practices and suspected malpractices.

9. SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE

The Company is engaged in the business of Rental of IT Equipments like laptops, desktops, printers, servers and other peripherals like CCTV cameras, projectors, storage devices etc. with the flexibility to sell these products to the customers. The company also offers software solutions and transformation services (System Integration) to clients and have deployed own software solutions at various institutions in India and other regions also.

10. DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respect with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.

11. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company has reported total revenue of Rs. 10193.89 Lakhs for the current year as compared to Rs. 6324.96 Lakhs in the previous year. The Net Profit for the year under review amounted to Rs. 1320.00 Lakhs in the current year as compared to Profit incurred in last year amounting Rs. 1,289.83 Lakhs.

12. PROFIT MARGINS

	Segments
Particulars	Sale of	Sale of
	Goods	Services
Revenue	3604.33	6589.56
Operating Profit	172.95	2709.37
Operating Profit Margins	4.80%	41.12%

13. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

We believe that our employees are key contributors to our business success and thus we focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and background that would be an asset for its kind of business. As on March 31, 2025, our Company has employed 46 employees at various levels of the Organization which is commensurate with the size, nature and operations of the Company.

14. DETAILS OF KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR

				Explanation for any change
	As at	As at		in the ratio by more than
Ratios			Variance
	31.03.2025	31.03.2024		25% as compared to the
				preceding year.
Debtors Turnover Ratio	3.75	3.70	0.05	NA
Interest Coverage Ratio	26.52	37.12	(10.60)	Higher profitability
Current ratio	6.51	4.04	2.46	Increase in Current Assets
Debt- equity ratio	0.05	0.09	(0.05)	Repayment of Term Loan
Operating Profit Margin (%)	18.60	28.12	(9.52%)	Due to higher trading of goods
Net Profit Margin (%)	0.13	0.20	(0.07)	Due to higher trading of goods
Debt service coverage ratio	47.47	69.78	(22.31)	Repayment of Term Loan
Return on equity ratio	1.26	1.26	0.00	NA
Inventory turnover ratio	0.00	-	0.00	NA
Trade receivables turnover ratio	3.75	3.70	0.05	NA
Trade payables turnover ratio	NA	NA	NA	NA
Net Capital turnover ratio	2.76	3.28	(0.53)	NA
Net profit ratio	0.13	0.20	(0.07)	NA
Return on capital employed	0.18	0.26	(0.08)	NA
Return on investment	NIL	NIL	NIL

15. DISCLOSURES

During the year the Company has not entered into any transaction of material nature with its promoters, the Directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interest of the Company at large.

16. FORWARD-LOOKING STATEMENT

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic, and natural calamities over which we do not have any direct/indirect control.