Spectrum Talent Management Ltd Management Discussions

Economic Overview

Global Economy¹

The global economy remained resilient during CY 2025 despite geopolitical tensions, evolving trade dynamics and persistent macroeconomic challenges. Significant consumer expenditure, consistent technological investments and favourable financial conditions, facilitated a global GDP expansion of approximately 3.4%.

Growth remained inconsistent, with advanced economies registering a rate of 1.9%, indicating moderate economic conditions amid elevated inflation and restrictive monetary policies, while Emerging Market and Developing Economies (EMDEs) expanded by 4.3%, driven by strong domestic demand and sustained infrastructure investments. Global inflation moderated to approximately 4.1%, supported by easing supply-side pressures and monetary tightening measures. Trade and investment flows remained stable amid geopolitical fragmentation, regulatory policy and commodity market volatility.

Outlook

The global GDP economy is projected to moderate to 3.1% CY 2026 before improving to 3.2% in CY 2027. Global headline inflation is estimated to reach 4.4% in CY 2026, primarily driven by surging energy prices and geopolitical disruptions, before reducing to 3.7% in CY 2027 as monetary conditions stabilise and supply-side pressures ease.

The medium-term outlook remains subject to uncertainties arising from geopolitical conflicts, trade and supply chain disruptions, elevated public debt levels, and commodity market volatility. However, consistent technological advancements, particularly in Artificial Intelligence (AI) and digital transformation, structural reforms, along with the transition towards renewable energy, are expected to bolster productivity and economic resilience while promoting sustainable global growth.

Indian Economy

India remained one of the fastest-growing major economies in FY 2025-26 amid geopolitical tensions, trade disruptions and commodity price volatility. Supported by strong domestic demand, sustained government expenditure and investment activity, real GDP grew by 7.7%, while Gross Value Added (GVA) expanded by 7.9% during the year.

Extensive growth was primarily driven by the secondary and tertiary sectors, which expanded by 8.8% and 9.3%, respectively, while manufacturing emerged as a key growth driver, registering a growth of 10.7%. In terms of expenditure, Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) increased by 7.7% and 8.2%², respectively, indicating favourable consumption and sustained investment momentum. The services sector promoted economic expansion, with services exports reaching an all-time high of USD 387.6 billion in FY 2025-26, registering a growth of 13.6%, accelerated by robust performance in financial, professional and technology-led services.

Outlook³

The Indian economy is expected to maintain steady growth despite global uncertainties. According to the Reserve Bank of India (RBI), real GDP growth for FY 2026-27 is projected at 6.6%, with quarterly growth estimated at 6.6% in Q1, 6.3% in Q2, 6.5% in Q3 and 6.8% in Q4. Consumer Price Index (CPI) inflation is forecasted at 5.1% for FY 2026-27, with quarterly inflation predicted at 4.2%, 5.1%, 5.9% and 5.4%, respectively.

Growth is expected to be propelled by resilient private consumption, sustained investment activity, optimised capacity utilisation, sustained credit flows and government capital expenditure. However, global supply-chain disruptions, financial market volatility and weather-related uncertainties pose significant risks to the long-term growth outlook.

Industry Overview

Staffing Industry

Global⁴

The global recruitment and staffing industry plays a vital role in promoting workforce mobility and addressing evolving talent requirements across industries. Driven by emerging skill demand, adoption of flexible staffing models and outsourced recruitment solutions, the global market was valued at approximately USD 538.59 billion in 2025.

The industry consistently leverages evolving employment patterns and the increasing utilisation of technology-enabled recruitment processes, including digital platforms and data-driven hiring solutions. Businesses are progressively relying on temporary staffing, project-based hiring and specialised recruitment services to address skill shortages and enhance workforce agility. The market is projected at approximately USD 626.67 billion by 2033, registering a CAGR of 1.91%, propelled by the surging demand for skilled professionals, increasing workforce mobility and the consistent formalisation of staffing services across global markets.

Indian⁵

Indias staffing and recruitment industry consistently benefits from the expansion of the formal economy and heightened demand for skilled talent across sectors. The greater adoption of temporary, contract and project-based staffing models is enabling the progress of organised staffing services and enhancing workforce flexibility.

Additionally, the industry is undergoing rapid digital transformation, with 75-85% of mid-to-large enterprises using Applicant Tracking Systems (ATS), 60-70% adopting AI-based resume screening tools, and 65-75% leveraging video interviewing platforms. Despite increasing utilisation, contract staffing accounts merely for an approximate 1% of Indias net workforce, as compared to 2.2% in Europe and Asia-Pacific, indicating significant growth potential.

The long-term outlook remains favourable, supported by greater formalisation of employment and escalating demand for specialised talent. The number of flexi workers in India is projected to reach 10 million by 2030, while the countrys Global Capability Centre (GCC) ecosystem is expected to exceed 2,100 centres, employing around 2.5 million professionals, thereby generating substantial opportunities for organised staffing and recruitment services.

Indian Flexi Staffing Industry⁶

Indias flexi staffing industry exhibited steady growth in FY 2025-26, reflecting the increasing adoption of flexible workforce models across industries and the growing relevance of organised staffing solutions in the countrys employment ecosystem. The industry has emerged as a key contributor to formal employment generation by enabling businesses to address evolving talent requirements while providing structured employment opportunities to a diverse workforce.

The industry recorded an 8% year-on-year growth (YoY) in terms of new employment during the year, expanding the formal flexi workforce by approximately 1.18 lakh. Consequently, the net members of the Indian Staffing Federation (ISF) increased to 1.91 million workers, reinforcing the sustained recognition of organised flexi staffing solutions across sectors.

IT Staffing Industry

Global⁷

The global IT staffing industry expanded consistently in 2025, driven by substantial investments in cloud computing, AI, cybersecurity and digital transformation initiatives. Organisations prioritised specialised talent acquisition to address skill shortages, thereby accelerating technology-led business transformation. This reinforces the surging demand for IT staffing services.

The global IT staffing market was valued approximately at USD 123.30 billion in 2025. The industry witnessed strong demand for software developers, cloud professionals, cybersecurity experts and data specialists, reflecting the emerging requirements for technical capabilities across enterprises. Software developers accounted for 37.05% of the market in 2025, while the Banking, Financial Services, and Insurance (BFSI) sector remained the largest end-user industry, registering 24.15% of total demand.

The global IT staffing industry is forecasted to maintain stable progress, promoted by sustained investments in cloud migration, AI, cybersecurity and enterprise digital transformation initiatives. The market is projected to increase from USD 127.75 billion in 2026 to approximately USD 152.47 billion by 2031, recording a CAGR of 3.61% during the period. Driven by strong professional skill demand, AI-related roles are estimated to grow at 11.75% CAGR, while healthcare IT staffing is expected to be the fastest-growing end-user segment with a 10.25% CAGR through 2031. The transition towards outcome-based, project-driven engagement is expected to facilitate long-term growth.

Global IT Staffing Market

CAGR: 3.61% (2026-2031)

Indian

Indias information technology industry demonstrated sustained resilience in 2025, propelled by increasing investments in digital transformation, cloud computing, AI and cybersecurity solutions. As a key sector in employment generation and technology-led innovation, the industry leveraged consistent demand for digital services across domestic and global markets.

The industrys steady hiring momentum was driven by a 16% increase in IT job demand, primarily accelerated by the expansion of Global Capability Centres (GCCs), digital transformation initiatives and substantial investments in emerging technologies. Hiring activity remained robust across roles in AI, data analytics, cloud computing and cybersecurity, indicating the evolving technology requirements of enterprises.⁸

Indias IT industry is expected to maintain its growth momentum in 2026, with robust talent acquisition particularly for professionals with specialised digital and emerging technology skills, while GCCs and technology-led enterprises are expected to drive sustained talent demand. The increasing adoption of automation, generative AI and digital engineering solutions will transform workforce requirements and accelerate the industrys transition towards high-value and skill-intensive technology services.⁹

Indias MSME Sector¹⁰

As a cornerstone of the countrys economic and entrepreneurial ecosystem, Indias Micro, Small and Medium Enterprises (MSME) sector plays a significant role in fostering innovation, promoting inclusive growth and expanding business opportunities across manufacturing, trading and service activities. MSMEs have progressively emerged as key contributors to economic growth by supporting local supply chains and encouraging grassroots entrepreneurship.

The sector is undergoing a gradual transformation, driven by increasing digital adoption and the growing adoption of technology-led business solutions. Enterprises are leveraging digital tools for accounting, inventory management,complianceandcustomer engagement, thereby enhancing operational efficiency and strengthening decision-making capabilities.

The formalisation and prioritisation of financial discipline and process standardisation ensures a favourable MSME ecosystem. Consistent digital transformation and enhanced operational efficiency in enterprises will enable the MSME sector to accelerate entrepreneurship while fostering innovation and ensuring sustainable economic growth. The sustained focus on technology adoption and business scalability will be instrumental in generating new opportunities for small businesses, thereby improving their contribution to the countrys economic development.

Key Budget Takeaways for MSME Sector Expansion – Union Budget 2025-26¹¹

Revision in MSME Classification Criteria

To facilitate business expansion and improvecapitalandmarketaccessibility, the investment and turnover thresholds for MSME classification have been strategically enhanced. The investment limits have been augmented by 2.5 times, while turnover limits have been doubled, enabling enterprises to scale operations without forfeiting MSME benefits.

Enhanced Credit Guarantee for MSMEs

The credit guarantee cover for micro and small enterprises has been increased from H5 crore to H10 crore, thereby facilitating an additional credit flow of H1.5 lakh crore over the next five years. Additionally, export-oriented MSMEs will benefit from enhanced guarantee support for term loans extending to H20 crores.

Customized Credit Cards for Micro Enterprises

A new customized credit card scheme has been introduced for micro enterprises registered on the Udyam Portal, providing a credit limit of H5 lakh. The Government aims to issue 10 lakh credit cards during the first year, thereby improving working capital accessibility and promoting business expansion.

Support for Start-ups and First-Time Entrepreneurs

The Budget proposes a latest Fund of Funds (FoF) of H10,000 crore to strengthen the startup ecosystem. Furthermore, a dedicated scheme will provide term loans of up to H2 crore to 5 lakh for first-time women, Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs over the next five years, promoting entrepreneurship and financial inclusion.

Focus on Labour-Intensive Industries

The Government has announced sector-specific initiatives for labour-intensive industries, particularly footwear, leather and toy manufacturing. The Focus Product Scheme (FPS) for the footwear and leathersectorisexpectedtogenerate 22 lakh employment opportunities, thereby ensuring an approximate turnover of H4 lakh crore.

Manufacturing and Clean Technology Initiatives

Launch of the National Manufacturing Mission will provide the necessary policy support and guidance for industries under the Make in India initiative. Additionally, the Budget strategically prioritises clean technology initiatives, encompassing domestic production of solar photovoltaic cells, EV batteries, wind turbines and high-voltage transmission equipment, thereby fostering new opportunities for MSMEs operating in emerging sectors.

Budgetary Augmentation for the MSME Ministry

The budget allocation for the Ministry of MSME has been increased to H23,168.15 crore for FY 2025-26, reinforcing the Governments sustained focus on bolstering the MSME ecosystem through enhanced to financial accessibility, technology adoption and entrepreneurship development initiatives.

Strengthening Formalisation and Employment Generation

As of February 2025, the Udyam Portal had facilitated the registration of over 5.93 crore MSMEs, generating employment for more than 25.18 crore individuals. The consistent focus on formalisation and digitalisation is expected to enhance institutional support and accelerate the sectors long-term growth momentum.

Export¹²

MSMEs are strengthening their participation in international trade, driven by greater integration into global value chains and efficient export capabilities. The value of MSME reached an approximate H12.39 lakh crore in 2025, while the number of exporting MSMEs was estimated at 1.73 lakh enterprises, highlighting the growing contribution of small businesses to Indias export ecosystem.

Company Overview

Spectrum Talent Management Limited (STML) is a leading manpower solutions provider with over 17 years of industry experience, offering a comprehensive range of solutions encompassing recruitment, staffing, workforce management, payroll, onboarding, compliance management and talent advisory services. The Company has established a diversified service portfolio comprising Global Search and Selection, Recruitment Process Outsourcing (RPO), general staffing, apprentice solutions, IT staff augmentation and managed services, enabling it to address the evolving workforce requirements across industries.

Over the years, Spectrum has established a strong domestic and international presence with operations spanning India, the United States and the United Arab Emirates (UAE), backed by an extensive talent network and technology-enabled delivery capabilities. The Company is committed to deliver tailored and scalable workforce solutions and has established long-standing relationships with clients across multiple sectors. Leveraging its industry expertise, structured processes and customer-centric approach, Spectrum consolidates its position as a reliable talent solutions partner and remains strategically poised to capitalise on the emerging organised staffing demand and recruitment services.

Strategic Expansion through Apt Companies

The acquisition of Apt Companies LLC, a U.S.-based IT staffing and workforce solutions company, signifies a key milestone in Spectrums global expansion strategy. It enhances the Companys capabilities in technology staffing while strengthening its presence in the North American market and expanding its service offerings in specialised talent solutions. The integration of Apt Companies is expected to accelerate Spectrums long-term growth by extending its international footprint and enhancing its expertise in the rapidly emerging technology staffing segment.

Service Portfolio

Service Offering	Scope	Key Value Proposition
General Staffing	Flexible staffing across temporary, contract and permanent hiring, covering flexi and industrial staffing, skilling, compliance management, apprenticeships and payroll administration.	Enables organisations to scale workforce capacity, manage compliance risk and improve operational efficiency through an integrated staffing model.
Recruitment Process Outsourcing	End-to-end and selective recruitment outsourcing through onsite and offsite teams, project-based hiring and recruiter-on-demand models for India and overseas markets.	Improves hiring efficiency, expands access to skilled talent and provides a scalable, technology-enabled approach to workforce planning.
Global HR Services	Global local recruitment, US staffing and remote workforce delivery, connecting international clients with skilled professionals through an India-based delivery model.	Provides cost-effective access to global talent pools through tailored matching and efficient, technology-supported recruitment processes.
Retaspect	Retail-focused HR, productivity, technology, learning and trade marketing solutions, including a mobile application for field and store-level operations.	Helps retailers improve sales, customer satisfaction and operational efficiency through integrated technology and workforce solutions.
Speraspect	IT staffing, offshore development, digital transformation, product engineering, managed IT services and IT consulting for businesses across industries.	Helps organisations build, scale and optimise technology capabilities through specialised talent and end-to-end IT delivery.
Expandrum	End-to-end setup and management of offshore infrastructure and Global Capability Centres, covering entity setup, compliance, infrastructure and workforce.	Enables faster time-to-market and operational certainty through single-partner accountability across real estate, compliance, IT and staffing.
Rankaspect	Performance marketing, paid advertising, lead generation, search engine optimisation and digital presence management for brand and demand generation.	Drives measurable ROI and stronger brand authority through data-driven, full-funnel digital marketing programmes.

Financial Performance

(H Million)

Particulars	FY25	FY26
Revenue from Operations	12,701.35	14,504.19
Other Income	32.51	37.98
EBITDA	114.67	178.86
EBITDA Margin (%)	0.90%	1.23%
PAT	72.38	122.58
PAT Margin (%)	0.57%	0.85%
Net Worth	1,453.58	1,561.75
Cash Flow from Operations	(669.77)	684.34
Cash Flow from Investing Activities	(83.52)	(433.31)
Cash Flow from Financing Activities	390.08	(81.95)
Debt to Equity (x)	0.22	0.18
Current Ratio (x)	2.62	2.37
BV (H)	62.95	67.63

Key Ratios

Particulars	March 2025	March 2026	Variance (%)
Current Ratio (x)	2.62	2.37	-9.62
Debt Equity Ratio (x)	0.22	0.18	-19.70
Debt Service Coverage Ratio (x)	9.26	4.15	-55.21
Return on Equity (%)	4.56	7.39	62.10
Inventory Turnover Ratio (x)	116.88	101.60	-13.08
Trade Receivables Turnover Ratio (x)	13.04	12.04	-7.64
Trade Payables Turnover Ratio (x)	1320.13	1232.72	-6.62
Net Capital Turnover Ratio (x)	8.91	11.31	26.99
Net Profit Ratio (%)	0.62	0.80	28.81
Return on Capital Employed (%)	4.72	7.62	61.37
Return on Investment (%)	NA	NA	NA

Human Resource

Spectrum Talent Management Limited (STML) prioritises its employees as the cornerstone of its long-term success and a key driver of innovation and sustainable growth. The Company is committed to fostering a dynamic and collaborative work environment that promotes consistent learning, professional development and employee well-being. With a people-centric approach, Spectrum focuses on attracting, nurturing and retaining talent by offering diverse career opportunities, structured training initiatives and a supportive workplace culture that encourages growth and innovation.

The Company emphasises sustained employee engagement by ensuring creating an inclusive workplace that promotes teamwork and collaboration. Through various employee engagement initiatives, team-building activities and cultural programmes, Spectrum strives to foster a positive and motivating work environment that ensures employee satisfaction and organisational belonging. The Companys focus on work-lifebalance,employeerecognition and a positive workplace culture is instrumental in developing a highly engaged and committed workforce.

The Company remains dedicated to empower future-ready talent by encouraging continuous skill enhancement while offering its employees with opportunities to work across diverse industries and projects. The Company upholds integrity, collaboration and professional excellence, thereby bolstering its position as a strong talent-driven organisation, transforming manpower and staffing industry solutions.

Risk and Mitigation Strategies

Risk Category	Description	Mitigation Strategy
Talent Risk	Inability to attract, develop and retain skilled professionals may hinder service delivery and business growth.	Focus on talent acquisition through diversified recruitment channels, employee engagement initiatives and continuous learning and upskilling programmes to strengthen retention and career progression.
Technology Risk Competition Risk	Rapid technological advancements and evolving digital HR solutions may impact the Companys competitiveness. Significant competition from domestic and international staffing and human capital management companies may exert pressure on growth and profit margins.	Sustained investments in technology, digital capabilities and strategic collaborations to deliver innovative and integrated workforce solutions. Strengthen client relationships, enhance service offerings, expand market presence and focus on innovation and operational excellence.
Credit Risk	Delayed customer payments and counterparty defaults may adversely impact liquidity and working capital management.	Prudent credit evaluation, consistent receivable monitoring and disciplined collection processes to ensure timely recoveries and minimise credit exposure.
Macroeconomic Risk	Economic slowdown, geopolitical volatilities, inflationary pressures and evolving hiring trends may affect demand for staffing and recruitment services.	Maintain a diversified client portfolio, adopt a flexible business model and strengthen customer and candidate engagement to enhance business performance.

Risk Mitigation Approach

The Company has established a structured risk management framework encompassing risk identification and assessment, implementation of preventive controls, consistent monitoring and periodic review and reporting mechanisms. The Board and senior management proactively oversee the risk landscape, ensuring the necessary integration of mitigation measures into the Companys governance operations, thereby facilitating informed decision-making to safeguard business continuity and drive sustainable growth.

Internal Control Systems and Their Adequacy

TheCompanymaintainsarobustInternal Control System (ICS) in alignment with the Companies Act, 2013. The Company has put in place a robust Internal Control System thoughtfully designed to match the scale, complexity, and nature of its operations. Guided by the Board of Directors, a comprehensive framework of internal financial controls, supported by well-defined policies and procedures, ensures smooth and efficient functioning. These controls are aimed at safeguarding assets, ensuring compliance with laws and regulations, preventing fraud, maintaining accuracy in accounting, and enabling timely and reliable financial reporting.

In accordance with Section 177 of the Companies Act and Regulation 17 of the SEBI (LODR) Regulations, 2015, our Audit Committee, comprising three members, including two independent directors, regular interval of statutory provision to review internal audit reports. These reviews are vital for identifying key audit observations and evaluating the robustness of our financial controls, internal systems, risk management practices, and compliance processes. To ensure these insights lead to meaningful action, our internal auditor conducts regular follow-up reviews, helping drive timely and effective implementation of recommendations.

Both the Statutory Auditors and the Audit Committee have consistently reaffirmed the adequacy and reliability of our internal financial controls throughout the year, underlining their effective and seamless functioning in support of accurate and transparent financial reporting.

Cautionary Statement

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be "forward looking statements" within the meaning of applicable securities laws & regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand-supply and price conditions in the domestic & overseas markets in which the Company operates, changes in the government regulations, tax laws & other statutes & other incidental factors.