CSM Technologies Limited

About CSM Technologies Limited

For details in relation to our business overview, see “Our Business-Overview” on page 227. Significant Factors Affecting our Financial Condition and Results of Operations Our results of operations and financial condition are affected by a number of important factors including: Ability to enhance operating efficiency through investments in technology 378 As emerging technologies like AI and blockchain evolve rapidly, customers expect continuous innovation. IT companies like CSM, need to constantly invest in R&D to provide cutting-edge solutions, which can strain resources. Clients across various industries expect highly tailored solutions. Developing customized solutions that address the unique needs of each industry or client requires significant investment in R&D and client-specific consultations (Source: CARE Report). Our results of operations have been, and will continue to be, affected by our ability to improve our operating efficiency, especially through investment in technology. As our business continues to grow, it is essential to improve operating efficiency to maintain the competitiveness of our platform. We intend to continue to design and develop customised solutions tailored to the specific needs, operational processes, and regulatory environments of each industry and client. This often necessitates significant investment in research and development, detailed client-specific consultations, and iterative solution design. Such engagements typically involve longer lead times, higher upfront costs, and allocation of specialised resources, without any assurance that the client will ultimately award the project or that the solution will achieve the desired outcomes. The table below sets forth our R&D expenses and such expenses as a percentage of revenue from operations for the period and years indicated For the nine months period Particulars Fiscal 2025 Fiscal 2024 Fiscal 2023 ended December 31, 2025 R&D expenses (₹ in lakhs) 105.72 158.16 137.60 76.91 R&D expenses as a percentage 0.64 0.79 0.70 0.48 of our revenue from operations In the future, we will continue to invest in technology to further enhance our operations, which may increase our expenditure or operating costs but will improve our operating leverage, cost efficiency and service quality. Our continued improvement of our platform is paramount to our customer experience, driving our ability to attract and retain customers, improve subscriptions, and generate revenues. Going forward, we intend to continue to prudently invest resources in technology in a cost-effective manner to support the long-term growth of our business. Ability to retain and expand existing customer relationships by continuing to bid for and wining projects floated by our customers. Over the years, we have invested and successfully delivered numerous projects for agencies such as Odisha Computer Application Centre (OCAC)-Government of Odisha, JSW Steel Limited, Varanasi Smart City Limited, Odisha Bridge and Construction Corporation Limited, Chhattisgarh Infotech Promotion Society, Department of Steel and Mines, Government of Odisha, Inspira Enterprise India Limited, Spatial Planning & Analysis Research Centre Private Limited, Chhattisgarh Infotech Promotion Society and Inspira Enterprise India Limited, resulting in long-standing relationships with various government agencies and enterprises in the process, which enables us to execute projects efficiently and to the satisfaction of our clients. Our ability to increase sales to existing customers will depend on a number of factors, including the size of our sales force and professional services teams, customers’ level of satisfaction with our services and professional services, pricing, economic conditions and our customers’ overall budget and spending levels. We have developed a suite of proprietary technology platforms and patented solutions that enhance our ability to deliver scalable, efficient, and compliant digital solutions across sectors. These in-house innovations strengthen our competitive position and support our long-term engagement model with government and enterprise clients. The following table sets forth the percentage of revenue from operations contributed by our top 3, top 5 and top 10 customers for the periods indicated: 379 For the nine months period ended Fiscal 2025 Fiscal 2024 Fiscal 2023 December 31, 2025 Contribution from top Revenue Revenue Revenue Revenue As a % of As a % of As a % of As a % of Customer from from from from Revenue Revenue Revenue Revenue operations operations operations operations from from from from (in ₹ (in ₹ (in ₹ (in ₹ Operations Operations Operations Operations lakhs) lakhs) lakhs) lakhs) Top 3 6,721.81 40.62 10,099.87 50.69 11,282.14 57.35 9,369.85 58.40 Top 5 8,624.74 52.12 12,696.58 63.72 13,408.59 68.16 11,193.08 69.77 Top 10* 11,516.68 69.58 15,452.96 77.56 15,933.38 81.00 13,127.65 81.82 *Our top ten customers include Department of Steel & Mines, Odisha, Chhattisgarh Infotech Promotion Society, Inspira Enterprise India Limited, Spatial Planning & Analysis Research Centre Private Limited and Odisha Bridge and Construction Corporation Limited. Names of balance customers have not been provided either because relevant consents for disclosure of their names were not available or in order to preserve confidentiality. While we have established long-standing relationships with several of our customers, the majority of projects in our industry are awarded through a competitive bidding process. As such, we are required to meet prescribed qualification criteria and submit commercially competitive bids to secure contracts. We cannot assure you that we will always qualify to participate in tenders, or that our bids, once submitted, will be successful. Our ability to retain existing customers and attract prospective customers depends, among other factors, on the competitiveness and flexibility of our pricing model. If we are unable to appropriately adjust our pricing in response to market conditions, customer expectations, or competitive pressures, we may lose business opportunities or face customer attrition. Such developments could adversely affect our revenue growth, profitability, and overall business operations. Our ability to deepen and expand the portfolio of services we offer while maintaining our high standard of quality We plan to continue to enhanc