Takyon Networks Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRIAL STRUCTURE AND DEVELOPMENTS:

Takyon Networks Limited is engaged in providing comprehensive networking and IT infrastructure solutions to a diverse range of clients, including government agencies and corporate enterprises. The Company offers a wide range of technology solutions and services covering IT networking, data centre solutions, IT security and surveillance, cloud and managed services. The Company also provides maintenance and technical support services to its clients through formal maintenance and support contracts.

The Indian Information Technology and IT infrastructure services industry continues to evolve with increasing adoption of digital technologies, cloud computing, data centres, cybersecurity solutions and connected infrastructure across government and corporate sectors. The growing emphasis on digital transformation, secure IT infrastructure, data protection and business continuity is creating opportunities for technology solution providers with integrated capabilities.

The industry is also witnessing increasing demand for reliable, scalable and secure technology infrastructure, along with professional technical support and managed services. Continued technological advancements and increasing dependence on digital systems are expected to support the growth of the IT infrastructure and networking solutions sector.

BUSINESS OVERVIEW

Takyon Networks Limited is engaged in providing end-to-end networking and IT infrastructure solutions to government agencies and corporate enterprises. The Companys service portfolio includes IT networking solutions, data centre solutions, IT security and surveillance, cloud and managed services.

The Company also provides maintenance and support services through formal contracts, enabling clients to receive ongoing technical assistance, system maintenance and support. Through its integrated range of technology solutions and technical expertise, the Company focuses on delivering reliable, scalable and efficient IT infrastructure solutions aligned with the requirements of its clients.

The Company continues to focus on strengthening its service capabilities, maintaining customer relationships, improving service delivery and expanding its presence across relevant market segments.

FINANCIAL PERFORMANCE

During the financial year 2025-26, the Company recorded standalone total income of Rs. 7,205.55 lakhs as compared to Rs. 9,975.76 lakhs in the previous financial year, representing a decline in total income during the year under review.

The standalone Profit Before Tax (PBT) stood at Rs. 381.68 lakhs as compared to Rs. 889.52 lakhs in the previous year, while the standalone Profit for the Period stood at Rs. 306.59 lakhs as against Rs. 638.15 lakhs in the previous year. The standalone Earnings Per Equity Share (EPS) stood at Rs. 2.76 as compared to Rs. 6.06 in the previous year.

On a consolidated basis, the Company recorded total income of Rs. 7,279.60 lakhs as compared to Rs. 10,347.70 lakhs in the previous year. Consolidated Profit Before Tax stood at Rs. 460.28 lakhs as against Rs. 966.48 lakhs in the previous year, while consolidated Profit for the Period stood at Rs. 365.42 lakhs as compared to Rs. 695.75 lakhs in the previous year. The consolidated Earnings Per Equity Share stood at Rs. 3.29 as compared to Rs. 6.61 in the previous year.

The performance during the year reflects a moderation in revenue and profitability compared with the previous year. The Company continues to focus on strengthening its operational capabilities, improving business efficiencies, optimizing costs, enhancing service delivery and pursuing sustainable growth opportunities with a view to improving margins and creating long-term value for its stakeholders.

OPERATIONAL PERFORMANCE

During the year under review, the Company continued to focus on delivering comprehensive networking and IT infrastructure solutions to its clients. The Company remained engaged in providing IT networking, data center, IT security and surveillance, cloud and managed services, along with maintenance and technical support services.

The Companys focus on technical expertise, service quality, timely execution and ongoing customer support has enabled it to cater to the evolving technology requirements of government agencies and corporate enterprises.

The Company continues to strengthen its operational capabilities and service delivery processes with a view to improving efficiency, enhancing customer satisfaction and maintaining competitiveness in the rapidly evolving IT infrastructure sector.

SALES AND MARKETING INITIATIVES

The Company continues to focus on strengthening its market presence and expanding its customer base through the following initiatives:

• Market Expansion: The Company continues to explore opportunities across government and corporate segments and various geographical markets to expand its customer base and enhance market penetration.

• Solution Enhancement: The Company focuses on strengthening its portfolio of networking, data centre, security and surveillance, cloud and managed services in line with evolving customer requirements and technological developments.

• Customer Engagement: The Company emphasizes long-term customer relationships by providing reliable technology solutions, technical expertise, maintenance support and timely service delivery through formal contracts and ongoing engagement.

• Integrated Service Offerings: The Company continues to provide comprehensive technology solutions and support services, enabling clients to address multiple IT infrastructure requirements through an integrated service approach.

OPPORTUNITIES AND THREATS

Opportunities:

The Company operates in a technology-driven industry with growth opportunities arising from:

• Increasing adoption of digital transformation and IT infrastructure across government and corporate sectors.

• Growing demand for networking, data centre and secure IT infrastructure solutions.

• Increasing focus on cybersecurity, IT security and surveillance and protection of digital assets.

• Rising adoption of cloud computing and managed IT services.

• Growing requirement for maintenance, technical support and managed services to ensure continuity and reliability of IT infrastructure.

• Opportunities to expand the Companys presence across government institutions, corporate enterprises and other emerging market segments.

• Continuous technological advancements creating opportunities for development and adoption of new technology solutions.

Threats and Challenges:

The Company continues to monitor and manage various industry-related challenges, including:

• Rapid technological changes requiring continuous enhancement of technical capabilities and service offerings.

• Increasing competition from established domestic and international IT solution providers.

• Cybersecurity threats and evolving security requirements.

• Dependence on availability of skilled technical and IT professionals.

• Pricing pressures and changing customer requirements.

• Dependence on technology vendors and fluctuations in the cost and availability of technology products and equipment.

• Increasing regulatory and compliance requirements relating to data security, privacy and information technology.

OUTLOOK:

The Company remains optimistic about the growth prospects of the IT infrastructure and technology solutions sector. Increasing digitalisation, adoption of cloud services, demand for secure IT infrastructure and growing dependence on technology across government and corporate enterprises are expected to provide opportunities for the Company.

Going forward, the Company will continue to focus on strengthening its technology and service capabilities, expanding its customer base, enhancing service quality and developing long-term customer relationships. The Company remains committed to delivering reliable and efficient IT infrastructure solutions and creating sustainable value for its stakeholders.

RISK AND CONCERNS:

The Company operates in an industry influenced by rapid technological developments, competitive pressures, cybersecurity risks, availability of skilled manpower, vendor dependencies and changing customer requirements.

To effectively manage these risks, the Company continues to focus on:

• Technology and Service Enhancement: Continuously strengthening its technology capabilities and service offerings to remain aligned with evolving market and customer requirements.

• Cybersecurity and Information Security: Maintaining appropriate security practices and controls to address evolving cybersecurity risks and protect information and IT infrastructure.

• Customer and Vendor Relationships: Strengthening relationships with customers and technology partners to ensure timely delivery of solutions, technical support and availability of required products and services.

• Skilled Workforce: Developing and retaining technical and professional resources with appropriate skills and expertise to support the Companys operations and service delivery.

• Operational Efficiency: Continuously improving operational processes and resource utilisation to enhance service quality, efficiency and profitability.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has established an internal control framework commensurate with the size and nature of its operations. The internal control systems are designed to support operational efficiency, compliance with applicable laws and regulations, safeguarding of assets and reliability of financial reporting.

The effectiveness of internal controls is periodically reviewed through internal assessments, statutory audits and management reviews. Necessary improvements are undertaken, wherever required, to strengthen the control environment and mitigate identified risks.

HUMAN RESOURCES:

The Company recognises its employees as an important contributor to its business and remains committed to developing a skilled, motivated and engaged workforce. Given the technology-driven nature of its operations, the Company focuses on developing technical capabilities and maintaining an environment that encourages learning, collaboration and professional development.

The Company continues to support skill enhancement and professional growth of its employees while maintaining a productive and supportive workplace environment. The Company believes that the capabilities and expertise of its employees are essential for delivering quality technology solutions and technical support to its clients and for achieving sustainable organisational growth.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The Company, along with its subsidiary is engaged in providing end-to-end networking and IT infrastructure solutions, including IT networking, data center, security and surveillance, cloud and managed services. The Group operates as a single reportable business segment. The performance of the Group for the financial year 2025-26 is summarized below:

				(Amount in Lakhs)
PARTICULARS	STANDALONE		CONSOLIDATED
	31/03/2026	31/03/2025	31/03/2026	31/03/2025
Revenue From Operations	7,043.71	9,940.13	7,105.25	10,312.07
Other Income	161.84	35.63	174.35	35.63
Total Income (Revenue)	7,205.55	9,975.76	7,279.60	10,347.70
Less: Expenses
Total Expenses	6823.88	9086.25	6819.32	9381.22
Net Profit/Loss before exceptional and extraordinary items and tax	381.68	889.52	460.28	966.48
Less: Exceptional Items	0.00	00.00	00.00	00.00
Profit before extraordinary items and tax	381.68	889.52	460.28	966.48
Less: Extraordinary Items	00.00	00.00	00.00	00.00
Profit before tax	381.68	889.52	460.28	966.48
Less: Tax Expenses
i. Current tax expense	87.29	258.66	107.07	278.02
ii Earlier Year tax expense	-14.39	-	-14.39	-
iii. Deferred tax	2.18	-7.29	2.18	-7.29
Liability/(Assets)
Profit/Loss for the period from continuing Operations	306.59	638.15	365.42	695.75
Profit/Loss from discontinuing operations	0.00	0.00	0.00	0.00
Tax expense of discontinuing operations	0.00	0.00	0.00	0.00
Profit/Loss from discontinuing operations (after tax)	0.00	0.00	0.00	0.00
Profit/Loss transferred/adjusted to General Reserve	0.00	0.00	0.00	0.00
Basic earnings per equity share	2.76	6.06	3.29	6.61
Diluted earnings per equity share	2.76	6.06	3.29	6.61

Key Observations:

1. Revenue Overview: During the financial year under review, the Company recorded standalone total income of Rs. 7,205.55 lakhs as compared to Rs. 9,975.76 lakhs in the previous financial year. Revenue from operations stood at Rs. 7,043.71 lakhs as against Rs. 9,940.13 lakhs in the previous year.

The standalone Profit Before Tax stood at Rs. 381.68 lakhs as compared to Rs. 889.52 lakhs in the previous year, while the Profit for the Period stood at Rs. 306.59 lakhs as against Rs. 638.15 lakhs in the previous year. The basic and diluted Earnings Per Share stood at Rs. 2.76 per equity share as compared to Rs. 6.06 per equity share in the previous year.

On a consolidated basis, the Company recorded total income of Rs. 7,279.60 lakhs as compared to Rs. 10,347.70 lakhs in the previous year. Consolidated Profit Before Tax stood at Rs. 460.28 lakhs as against Rs. 966.48 lakhs in the previous year, while consolidated Profit for the Period stood at Rs. 365.42 lakhs as compared to Rs. 695.75 lakhs in the previous year. The consolidated basic and diluted Earnings Per Share stood at Rs. 3.29 per equity share as compared to Rs. 6.61 per equity share in the previous year.

The financial performance during the year reflects a moderation in revenue and profitability as compared with the previous year. The Company continues to focus on strengthening its operational capabilities, improving efficiencies, optimizing costs and pursuing sustainable business opportunities with a view to enhancing long-term performance and stakeholder value.

Discussion on financial performance with respect to operational performance:

1. Revenue Analysis:

Revenue from operations stood at Rs. 7,043.71 lakhs during the financial year 2025-26 as compared to Rs. 9,940.13 lakhs in the previous financial year, representing a decrease of Rs. 2,896.42 lakhs, or approximately 29.14%.

Other income increased to Rs. 161.84 lakhs from Rs. 35.63 lakhs in the previous year. Accordingly, total standalone income stood at Rs. 7,205.55 lakhs as compared to Rs. 9,975.76 lakhs in the previous year.

The Company remained focused on maintaining business continuity, strengthening operational efficiency and pursuing opportunities for sustainable growth.

2. Profit Before Tax:

The standalone Profit Before Tax stood at Rs. 381.68 lakhs during the financial year 2025-26 as compared to Rs. 889.52 lakhs in the previous year, representing a decrease of Rs. 507.84 lakhs, or approximately 57.09%.

On a consolidated basis, Profit Before Tax stood at Rs. 460.28 lakhs as compared to Rs. 966.48 lakhs in the previous year, representing a decrease of Rs. 506.20 lakhs, or approximately 52.37%.

The Company continues to focus on prudent cost management, operational efficiencies and strengthening its business fundamentals.

3. Finance Cost

Standalone finance cost during the year stood at Rs. 190.06 lakhs as compared to Rs. 251.57 lakhs in the previous year, representing a reduction of Rs. 61.51 lakhs, or approximately 24.45%.

On a consolidated basis, finance cost stood at Rs. 190.67 lakhs as compared to Rs. 243.58 lakhs in the previous year, representing a reduction of Rs. 52.91 lakhs, or approximately 21.71%.

The reduction in finance cost reflects a lower finance cost burden during the year under review.

4. Depreciation and Amortization:

Depreciation and amortization expense stood at Rs. 58.40 lakhs during the financial year 2025-26 as compared to Rs. 68.47 lakhs in the previous year, representing a decrease of Rs. 10.07 lakhs, or approximately 14.71%.

The decrease in depreciation and amortization expense reflects the depreciation charge applicable to the Companys asset base during the year.

5. Taxations

The standalone current tax expense for the year stood at Rs. 87.29 lakhs as compared to Rs. 258.66 lakhs in the previous year.

The standalone earlier years tax expense amounted to Rs. (14.39) lakhs during the year, as compared to Nil in the previous year.

The standalone deferred tax expense amounted to Rs. 2.18 lakhs as compared to Rs. (7.29) lakhs in the previous year.

On a consolidated basis, current tax expense stood at Rs.107.07 lakhs as compared to Rs. 278.02 lakhs in the previous year, while the earlier years tax expense amounted to Rs. (14.39) lakhs during the year as compared to Nil in the previous year. The consolidated deferred tax expense amounted to Rs. 2.18 lakhs during the year as compared to Rs. (7.29) lakhs in the previous year.

The tax expenses for the year are in accordance with the applicable tax provisions and the taxable profits of the Company.

6. Profit for the Period

Standalone Profit for the Period from continuing operations stood at Rs. 306.59 lakhs during the financial year 2025-26 as compared to Rs. 638.15 lakhs in the previous year, representing a decrease of Rs. 331.56 lakhs, or approximately 51.96%.

Consolidated Profit for the Period from continuing operations stood at Rs. 365.42 lakhs as compared to Rs. 695.75 lakhs in the previous year, representing a decrease of Rs. 330.33 lakhs, or approximately 47.48%.

The Company continues to focus on improving operational efficiencies, strengthening margins and implementing appropriate business strategies to support sustainable growth.

7. Earnings per Share:

The standalone basic and diluted Earnings Per Share decreased from Rs. 6.06 per equity share in the previous year to Rs. 2.76 per equity share during the financial year 2025-26.

Similarly, consolidated basic and diluted Earnings Per Share decreased from Rs. 6.61 per equity share in the previous year to Rs. 3.29 per equity share during the year under review.

The movement in EPS is primarily reflective of the change in profitability during the year.

SUMMARY AND CONCLUSIONS:

1. Revenue Growth: The Company witnessed a moderation in revenue during the year under review compared with the previous year. Despite the moderation, the Company continued to focus on strengthening its service capabilities, maintaining customer relationships, improving service delivery and pursuing sustainable business opportunities.

2. Operational Efficiency: The Company continued to focus on operational efficiency, prudent cost management and effective utilization of resources. The management remains committed to improving business processes, enhancing service delivery and strengthening the Companys operational capabilities.

3. Depreciation Management: Depreciation and amortization expenses decreased during the year under review. The Company continues to focus on effective utilization and management of its asset base in line with its operational requirements and business objectives.

4. Tax Management: The Company continues to maintain appropriate tax compliance and prudent financial management in accordance with applicable laws and regulations. The management remains focused on maintaining financial discipline and efficient management of the Companys resources.

5. Final Profitability: The Company witnessed moderation in profitability during the year compared with the previous year. The management continues to focus on improving operational efficiencies, optimizing costs, enhancing service delivery and pursuing sustainable business opportunities with a view to strengthening the Companys financial performance.

6. Earnings per Share: The movement in earnings per share during the year reflects the change in the Companys profitability. The Company remains focused on strengthening its business operations, improving efficiencies and creating sustainable long-term value for its shareholders.

Overall, the financial performance of the Company for the year ended 31st March, 2026 reflects a moderation in revenue and profitability compared with the previous year. The Company continued to maintain focus on its core business of providing end- to-end networking and IT infrastructure solutions, while strengthening its service capabilities, customer relationships and operational processes. The Company remains committed to improving efficiency, enhancing service delivery, optimizing costs and pursuing sustainable growth opportunities for long-term value creation for its stakeholders.

MATERIAL DEVELOPMENT IN HUMAN AND OTHER RESOURCES/ INDUSTRIAL RELATIONS FRONT:

During the financial year 2025-26, the Company continued to focus on strengthening its human resources and developing the skills and capabilities required to support its technology-driven and service-oriented business operations. The Company recognizes its employees as an important contributor to the achievement of its business objectives and remains committed to fostering a professional and supportive work environment.

Talent Acquisition and Development: The Company continued to focus on attracting and retaining competent and skilled personnel. Emphasis was placed on employee development, skill enhancement and continuous learning to support the evolving requirements of the Companys networking, IT infrastructure, data center, security and surveillance, cloud and managed services businesses.

Employee Engagement and Retention: The Company continued to promote a positive and professional workplace environment through effective communication, employee engagement and appropriate welfare initiatives. The Company remains focused on employee motivation, development and retention to support operational effectiveness and continuity.

Industrial Relations: Industrial relations remained cordial and harmonious throughout the year under review. The Company maintained a constructive working environment and encouraged effective communication and cooperation among employees.

Health, Safety and Workplace Environment: The Company continued to give due importance to maintaining a safe, healthy and conducive workplace environment. Appropriate practices are followed to promote employee well-being and workplace safety in accordance with applicable requirements.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore:

Ratio	FY 2025-26	FY 2024-25	Change in Ratio	Reason for change
Current Ratio	4.10	1.47	178.43%	Change in ratio due to Payment of Trade Payables & ShortTerm Borrowing
Debt-Equity Ratio	0.13	0.37	-65.26%	Change in ratio due to repayment of borrowing
Debt Service Coverage Ratio (DSCR)	1.34	1.99	-32.74%	Change in ratio due to decrease in EBITDA
Return On Equity Ratio	24.80%	90.90%	-72.71%	Change in ratio due to decrease in Profit after Tax
Inventory T/O Ratio	6.70	6.42	4.27%	NA
Trade Receivables T/O Ratio	1.54	2.09	-26.59%	Change in ratio due to decrease in revenue
Trade Payables T/O Ratio	2.85	2.47	15.40%	NA
Net Capital T/O Ratio	2.44	4.76	-48.78%	Change in ratio due to decrease in revenue
Net Profit Ratio	4.38%	6.42%	-31.84%	Change in ratio due to decrease in revenue
Return On Capital Employed	9.33%	25.55%	-63.50%	Change in ratio due to decrease in Net Profit & Issue of Equity Shares

Disclosure of Accounting Treatment:

The financial statements have been prepared on accrual basis under the historical cost convention, in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards specified under section 133 of The Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 and with the relevant provisions of the Companies Act, 2013, to the extent applicable.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosures of an item or information in the financial statements are made relying on these estimates. Any revision to accounting estimates is recognized prospectively.