Smartlink Holdings Ltd Management Discussions

Annexure-A

ECONOMIC OVERVIEW

The global economic environment during FY 2025-26 remained challenging due to continued geopolitical tensions, evolving trade dynamics, inflationary pressures, and supply-side disruptions across multiple regions. Ongoing geopolitical conflicts and trade uncertainties continued to impact commodity prices, logistics costs, and business sentiment across industries.

Global growth remained below long-term averages as businesses and governments continued to navigate the impact of geopolitical conflicts, elevated interest rates, trade policy developments and fluctuations in commodity markets.

According to the International Monetary Fund, global GDP growth is projected at approximately 3.1% in 2026, marginally higher than 3.0% in 2025, supported by easing inflation and gradual normalization in supply chains. However, growth recovery remained uneven across regions and below long-term averages.

Although inflationary pressures moderated in certain advanced economies during the year, volatility in commodity prices, particularly copper, gold, silver, and petrochemical derivatives, continued to impact input costs across manufacturing sectors. The electronics and networking industry also witnessed intermittent constraints in semiconductor availability, affecting procurement cycles, pricing, and lead times.

Further, the appreciation of the US Dollar against emerging market currencies, including the Indian Rupee, led to higher import costs for component-dependent industries. These factors continued to influence pricing dynamics and operating margins across the value chain.

The persistence of these factors continues to create uncertainty across global supply chains and may impact business sentiment, capital expenditure cycles, and profitability across industries. Source: IMF World Economic Outlook April 2026.

THE INDIAN ECONOMY

India continued to demonstrate relatively resilient economic performance compared to several major economies, supported by domestic consumption, infrastructure spending, and ongoing digital transformation initiatives.

As per the Federation of Indian Chambers of Commerce and Industry Economic Outlook Survey, GDP growth is projected in the range of 6.8% to 7.2% for FY 2026-27.

Economic activity during the year was supported by:

• Continued domestic consumption

• Ongoing government capital expenditure, particularly in infrastructure

• Expansion in services supported by digital adoption and technology-led investments

Sectoral outlook:

• Agriculture: ~3.7%

• Industry: ~6.6%

• Services: ~7.4%

• Inflation (CPI): ~4.1%

Indias nominal GDP is expected to grow at 10% for FY 26-27 as per Macroeconomic Framework Statement and Medium-term Fiscal Policy cum Fiscal Policy Strategy Statement laid by Union Minister for Finance and Corporate Affairs on the table of the Parliament along with Budget for FY 2026-27.

Source: FICCI Economic Outlook Survey - February 2026.

INDUSTRY OUTLOOK IN INDIA The Indian Networking Industry

Indias IT & Business Services sector continued to witness moderate growth momentum during the year. As per industry estimates and market reports, the sector is expected to witness steady growth over the medium term, supported by cloud adoption, cybersecurity requirements, artificial intelligence, and 5G deployment.

The networking segment, including Ethernet switching, routing, structured cabling, FTTH, and WLAN, continued to see demand across enterprise and broadband segments, although spending patterns remained selective in certain sectors due to cost optimization measures and macroeconomic uncertainty. The enterprise networking market in India is expected to witness moderate growth over the medium term.

THE INDIAN NETWORKING MARKET IN 2025 (Values in usd million)

Particulars	Q1 2025	Growth	Q2 2025	Growth	Q3 2025	Growth	Q4 2025	Growth
Ethernet Switch Market	210	+ 5.0%	220	+ 4.8%	235	+ 6.8%	240	+ 2.1%
Router Market	88	+2.3%	92	+4.5%	95	+3.2%	100	+ 5.3%
WLAN	60	+ 7.1%	65	+8.3%	68	+4.6%	72	+ 5.9%

ESTIMATED INDIAN NETWORKING MARKET IN 2026

(Values in USD million)

Particulars	Q1 2026	Growth	Q2 2026	Growth	Q3 2026	Growth	Q4 2026	Growth
Ethernet Switch Market	250	+ 4.2%	260	+ 4.0%	270	+ 3.8%	280	+ 3.7%
Router Market	104	+4.0%	108	+3.8%	112	+3.7%	116	+ 3.5%
WLAN	78	+ 8.3%	84	+7.5%	90	+7.1%	96	+ 6.7%

Source: Industry estimates, publicly available information and internal analysis

The industry also continued to face challenges arising from:

• Volatility in component prices

• Foreign exchange fluctuations

• Competitive pricing pressures

• Extended customer procurement cycles

• Supply chain constraints in select electronic components

Despite these challenges, long-term demand drivers remain favourable due to increasing digital adoption and growing investments in network infrastructure.

KEY INDUSTRY DEVELOPMENTS 5G Expansion and Fiberisation:

Continued investments in 5G rollout and network densification contributed to demand for fiber connectivity, FTTH solutions, and switching infrastructure, although deployment pace varied across regions and operators. Telecom capital expenditure is estimated at INR 75,000-80,000 crore.

Enterprise Wireless Upgrade Cycle:

Adoption of Wi-Fi 6 and Wi-Fi 6E technologies increased across enterprises, driven by the need for higher bandwidth and network reliability.

Data Centre Growth:

Indias data centre market is expected to witness long-term growth, supporting demand for networking and cabling infrastructure over the medium term.

Policy Support:

Government initiatives, including the Production Linked Incentive (PLI) scheme, continued to support domestic manufacturing and promote a trusted networking ecosystem.

Digital Infrastructure Expansion:

Investments in smart cities, surveillance, and public digital infrastructure continued to support demand for scalable networking solutions across sectors.

Source: Industry reports, publicly available information and internal analysis

GLOBAL AND INDIAN WIRELESS LAN (WLAN) INDUSTRY

The global Wireless LAN market witnessed gradual improvement during the year following a period of correction, supported by selective enterprise investments and ongoing technology upgrades.

As per industry estimates and market reports:

• The global WLAN market recorded moderate growth during 2025

• Adoption of Wi-Fi 6E technologies continued to increase across enterprise deployments

• Wi-Fi 7 adoption witnessed early-stage deployment across select markets

In India, the WLAN market demonstrated improving momentum during 2025. However, year-on-year growth remained moderate due to enterprise spending adjustments and inventory normalization.

While near-term demand visibility remains mixed across certain enterprise segments, long-term demand drivers such as enterprise digitization and continued investment in digital infrastructure are expected to support industry growth over the medium term. Source: Industry reports, publicly available information and internal analysis

BUSINESS OVERVIEW SMARTLINK HOLDINGS LIMITED

Smartlink Holdings Limited has been engaged in the manufacturing of IT Networking and electronic products for over three decades, with capabilities across sourcing, manufacturing, sales, marketing, and support. The Company leverages its industry experience and in-house R&D capabilities to support product development and business growth.

The Companys wholly owned subsidiary, Digisol Systems Limited is into the business of DIGISOL brand of IT Networking products, currently most preferred Indian brand in IT Networking needs for SMB/sMe segments.

DIGISOL SYSTEMS LIMITED

Digisol Systems Limited is an established Indian brand in IT networking, offering a comprehensive range of products across sectors such as Smart Cities, Manufacturing, Real Estate, Healthcare, Telecom, Hospitality, Education, Surveillance, Data Centres, IT, and Retail.

The Companys product portfolio includes:

• Structured cabling solutions

• Fiber optic solutions

• FTTH products

• Managed and unmanaged switches

• Industrial networking products

• Wireless networking products

• Enterprise Wi-Fi solutions

The FTTH portfolio includes GPON, XPON, GEPON, ONUs, OLTs and associated optical infrastructure products.

MANUFACTURING AND SUPPLY CHAIN CAPABILITIES

The Company continues to maintain a strong focus on quality, product compliance and supply chain resilience.

The Company works closely with global component suppliers and to ensure product availability, quality standards and compliance with applicable regulatory requirements.

The Company continuously monitors supplier performance, procurement risks, logistics efficiency and inventory management practices to support business continuity and customer satisfaction.

STRATEGIC PRIORITIES FY 2026-27

The Companys strategic priorities include:

• Expansion of active networking and FTTH product portfolios

• Strengthening enterprise networking offerings

• Enhancing product quality and regulatory compliance

• Increasing market penetration through channel development initiatives

• Improving operational efficiency and supply chain resilience

• Strengthening customer engagement and service capabilities

• Expanding participation in digital infrastructure opportunities

The Company operates as a product-focused organization with capabilities in sales, marketing, and nationwide service support.

During the year, the Company continued to strengthen its active networking portfolio with a focus on compliance and product quality. Over 127 products have been certified under TEC, covering switching and FTTH categories. The Company also received ITSAR Proterm Certification for its Dual Band ONT and certification under the Trusted Telecom Portal (TTP).

The Company continued its partner engagement initiatives through training programs, digital outreach activities, participation in industry events, and channel development initiatives. Structured programs such as the DIGISOL Premium Partners Program continued to support channel relationships and business development.

FINANCIAL PERFORMANCE

i) Standalone Financials

The revenue from operations of the Company for the year ended March 31, 2026 stood at I NR 12,546.81 lakhs as against INR 9,696.51 lakhs in the previous financial year. The total Income stood at INR 14,948.41 lakhs for the year ended March 31,2026 as compared to INR 11,008.81 lakhs in the previous financial year.

The standalone Profit before tax was INR 1,335.14 lakhs as compared to Loss of INR 35.46 lakhs in the previous financial year. The Profit after Tax stood at INR 1,321.99 lakhs as compared to Profit of INR 253.68 lakhs in the previous financial year. The Other Income for the current period includes reversal of impairment loss pertaining to investments in Wholly Owned Subsidiary Digisol Systems Limited recognised earlier to the tune of INR 1,288.36 lakhs on the basis of valuation undertaken by the registered valuer.

Key Financials Ratio:

Particulars	FY 2026	FY 2025	% Change	Reason
Current Ratio	4.01	10.69	-62%	Change on account of higher trade payables
Operating profit Margin (in %)	13.65%	3.35%	307.46%	Improvement on account of reversal of previously recognised impairment on investment in WOS Digisol Systems Limited.
Net Profit Margin (in %)	11%	0.36%	2986%	On account of higher profit during the year.
Return on Net Worth (in %)	6.63%	1.27%	421%	Increase on account of increase in profits during the year
Debt Equity Ratio	0.00	0.00	-	na
Debtors Turnover Ratio	3.86	6.11	-37%	Change on account of higher revenue during the year.
Inventory Turnover Ratio	17.68	16.81	5%	na
Interest Coverage Ratio	34.13	0.48	7010%	Significant improvement on account of lower finance cost due to repayment of loans

ii) Consolidated Financials

The consolidated revenue from operations of the Company for the year ended March 31,2026 stood at INR 26,934.75 lakhs as against INR 21,452.63 lakhs in the previous financial year. The total income stood at INR 27,993.48 lakhs for the year ended March 31,2026 as compared to INR 22,643.64 lakhs in the previous financial year. The consolidated profit before tax was INR 1,763.77 lakhs as compared to INR 533.17 lakhs in the previous financial year.

The profit after tax stood at INR 1,314.55 lakhs as compared to INR 660.51 lakhs in the previous financial year. The improved performance was on account of significantly improved revenue and profitability by its Wholly Owned Subsidiary Digisol Systems Limited.

HUMAN RESOURCES

Smartlink and its subsidiary, Digisol Systems Limited are striving to build and maintain a positive employee experience with high satisfaction and quality of life, so that employees can contribute their best efforts to their work. We as a progressive organization are conscious of our societal, organizational, and human goals and our human values form the backbone of our organization.

The Company recognizes that its employees remain one of its most valuable assets and continue to play a critical role in achieving organizational objectives.

The Companys human resource philosophy focuses on attracting, developing and retaining talent while fostering a culture based on integrity, collaboration, accountability, customer focus and continuous learning.

The Company continues to invest in employee development, leadership capabilities and employee engagement initiatives to support long-term organizational growth.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established internal control systems and processes that are commensurate with the size and nature of its operations.

These controls are designed to provide reasonable assurance regarding:

• Safeguarding of assets

• Reliability of financial reporting

• Compliance with applicable laws and regulations

• Operational efficiency

• Risk management

Smartlink has aligned its current systems of internal financial control with the requirement of the Companies Act, 2013. The Internal Control framework is intended to increase transparency and accountability in an organisations process of designing and implementing a system of internal control. The framework requires the Company to identify and analyse risks and manage requires the Company to identify and analyse risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness. Smartlinks internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorization and ensuring compliance of corporate policies.

Our Values:

• Ethical and Integrity based approach in everything we do

• Value and develop employees for Talent, Initiative and Leadership

• Employee motivation through ownership and empowerment

• Performance and collaboration

• Customer Orientation and delight

Our vision has been to create a committed workforce through Shaping talent management around skills, knowledge sharing practices based upon our value system. The key element of our Human Resource strategy is to Drive HR innovations, to create people culture, and productivity accelerators through a hybrid work culture embedded with employee experience and wellness.

As on March 31,2026, the Smartlink Group has 200+ employees. Smartlink s future success evolves around our ability to attract top talent, retain, and motivate highly qualified technical and management personnel, to approach the VUCA world.

RISK FACTORS

Smartlink invests its surplus funds in various financial instruments like mutual fund, bonds, non-convertible debentures and other securities and thus Smartlink is exposed to credit risk, market risk and interest rate risk.

The Company operates in a dynamic business environment and is exposed to various risks that could impact operations and financial performance.

Technology Obsolescence Risk

Rapid technological changes may impact product relevance and market competitiveness. The Company continuously evaluates emerging technologies and enhances its product portfolio accordingly.

Supply Chain Risk

The Company relies on global supply chains for electronic components and networking products. Supply disruptions, logistics constraints and component shortages may affect procurement and delivery timelines.

Foreign Exchange Risk

Fluctuations in foreign exchange rates may impact procurement costs and profitability due to the Companys dependence on imported products and components.

Regulatory Risk

Changes in regulations relating to telecommunications, product certifications, customs duties and compliance requirements may impact business operations.

Cybersecurity Risk

Increasing digital connectivity exposes businesses to cybersecurity threats that may affect operations, customer confidence and reputation.

Competitive Risk

The networking industry remains highly competitive with participation from both domestic and global players.

THE AUDIT COMMITTEE PERIODICALLY REVIEWS THE FUNCTIONS OF INTERNAL AUDIT

Our management assessed the effectiveness of the Companys internal control over financial reporting (as defined in Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) as of March 31,2026. Based on its evaluation (as defined in section 177 of Companies Act, 2013 and Regulation 18 of LODR Regulations, our audit committee has concluded that, as of March 31,2026, our internal financial controls were adequate and operating effectively.

DISCLAIMER

Certain statements made in this report relating to the Companys objectives, projections, outlook, estimates, etc. may constitute ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from such estimates or projections etc., whether expressed or implied. Several factors including but not limited to economic conditions affecting demand and supply, government regulations and taxation, input prices, exchange rate fluctuation, etc. over which the Company does not have any direct control, can make a significant difference to the Companys operations. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on any forward-looking statements. The MD&A should be read in conjunction with the Companys financial statements included herein and the notes thereto.