Aditya Birla Money Ltd Management Discussions

OVERVIEW

The Indian economy continues to be one of the fastest growing major economies in the world characterised by a mix of strong domestic demand, structural reforms and increasing global integration. The economy demonstrated resilience during FY26 despite evolving global uncertainties, geopolitical tensions, tight global financial conditions and shifting trade dynamics. Despite these headwinds, India remains well-positioned in its growth trajectory towards becoming a $5 trillion economy in the medium term and $10 trillion over the longer horizon, supported by a large population, a rising middle class and rapid urbanisation.

As per estimates by the National Statistical Office (NSO) and guidance from the Reserve Bank of India (RBI), Indias GDP growth for FY26 is expected to be in the range of 7.4-7.6%, reflecting strong and broad-based economic momentum, despite global uncertainties such as geopolitical tensions and fluctuating commodity prices. This growth has been underpinned by strong government spending on infrastructure, including roads, railways and digital connectivity, as well as policy initiatives aimed at boosting manufacturing, such as the PLI schemes. The services sector continues to be the backbone of the economy, contributing more than half of GDP, with IT, financial services and telecom playing leading roles. At the same time, manufacturing has been gaining traction, supported by efforts to position India as a global supply chain alternative.

Inflation has remained a key macroeconomic variable, generally managed within a moderate range through monetary policy actions by the RBI. The RBI has focused on balancing growth and price stability, especially in the face of external shocks like rising oil prices. The inflation rate rose to 3.4% in March26, marking the largest inflation rate in over a year, despite coming below median market expectations of 3.48%.

On the fiscal side, the government has continued to prioritise capital expenditure while working toward fiscal consolidation. Investments in infrastructure, logistics and energy transition have been central to long-term growth strategies. Tax reforms, digitisation of financial systems and initiatives such as GST have improved transparency and efficiency in revenue collection. Policy measures, including GST rationalisation, income tax rate cuts and the cumulative interest rate reduction of 125 bps by RBI, are expected to further support consumption. The Government is targeting a fiscal deficit at 4.4% of GDP for FY26 with a target of bringing it down to 4.3% of GDP in FY27.

Indias external sector remained robust, with foreign exchange reserves at comfortable levels, providing a strong buffer against global volatility. Global Trade remains an important component of the economy, with exports of services, particu larly IT and business continues to face challenges such as a trade deficit, dependence on energy imports and exposure to global demand cycles. Efforts to diversify exports and strengthen domestic manufacturing are ongoing. While merchandise exports faced some pressure due to global demand moderation, US tariff threats and the ongoing Middle East tensions, services exports continued to support overall exports, reinforcing Indias position as a key global services hub.

Despite strong fundamentals, the Indian economy faces structural challenges, including employment generation for its large workforce, income inequality and rural-urban disparities. Agricultural productivity and labour market reforms remain areas requiring sustained attention. Additionally, global risks such as geopolitical tensions, supply chain disruptions and shifts in global monetary policy continue to influence economic stability.

Looking ahead, still the economic outlook for India remains positive, supported by strong macroeconomic fundamentals, a stable financial system, sustained policy support and expectations of a normal monsoon.

Overall, the Indian economy still presents a compelling picture of growth combined with certain manageable complexities. Its trajectory is shaped by a balance of domestic strengths and external vulnerabilities, with long-term prospects underpinned by resilient domestic demand, prudent fiscal policies, demographic dividend, accelerating digital transformation, infrastructure transformation and ongoing policy reforms.

GLOBAL ECONOMIC OUTLOOK

FY26 was a defining year for the global economy, marked by a cautiously stabilising environment as countries navigated the after effects of prolonged monetary tightening, moderating inflation, evolving geopolitical developments especially in the Middle East, AI disruption and persistent protectionist trade trends. According to the IMF, global GDP growth is projected at 2.9% in CY26, marginally improving from 2.8% in CY25, with advanced economies continuing to experience relatively slower growth, while emerging markets particularly India and Southeast Asia are expected to sustain stronger momentum and remain key drivers of global expansion.

The US is expected to remain a key anchor of global growth, while continuing to play a central role in managing inflation dynamics. The Federal Reserve is expected to maintain a cautious, data- dependent monetary policy stance through CY27, with any adjustments to policy rates likely to depend on the trajectory of inflation and labour market conditions. While headline inflation is expected to gradually move towards the Federal Reserves target, policymakers are expected to remain vigilant in view of persistent inflationary pressures and evolving global uncertainties. While headline inflation has moderated to around 2.4%, core inflation is expected to remain relatively sticky above 3%, necessitating a cautious policy approach amid moderating consumer demand, easing labour market conditions and tighter financial environments.

In Europe, economic activity has remained subdued in CY25, constrained by structural challenges in industrial production, weak consumer sentiment and residual energy-related pressures. The European Central Bank has shifted towards an accommodative stance, having already reduced policy rates by over 200 bps to around 2.4%, with further calibrated easing expected to support recovery.

Meanwhile in Asia, Japans transition away from its negative interest rate regime marks a structural shift, with monetary policy expected to gradually normalise following its first-rate hike in 17 years in CY24, supported by improving wage growth and stable inflation. Chinas growth outlook remains moderate, weighed down by ongoing stress in the real estate sector, subdued domestic consumption and elevated youth unemployment. Despite continued policy support through targeted fiscal measures and credit easing, investor sentiment is expected to remain cautious.

Geopolitical risks are expected to persist into CY26, with ongoing tensions including the US-Israel-Iran war affecting the Strait of Hormuz, prolonged Russia-Ukraine conflict, developments in the Israel-Hamas region and disruptions in the Red Sea continuing to impact global trade flows and logistics. Commodity markets are likely to remain volatile, with crude oil prices expected to hover in the range of US$100-120 per barrel, reflecting supply- side constraints and geopolitical risk premiums. Heightened uncertainty is also expected to sustain demand for safe-haven assets, with gold having risen by 35%+ over the TTM.

A key development shaping the global landscape in CY26 is the continued impact of protectionist trade measures led by the US and the aftereffects from the US-Israel-Iran war. Tariffs imposed across major trading partners including India and China triggered retaliatory actions and heightened the risk of disruptions in global supply chains, accelerating the decoupling of global trade systems, before the Supreme Court verdict on the tariffs were announced. On the other hand, continued tensions in the Middle East could massively disrupt the global supply chain. The implications across economies and industries remain uncertain, as policy directions continue to evolve. The growing adoption of friendshoring strategies, tighter export controls on critical resources and the formation of regional trade blocs further highlight the ongoing shift toward economic fragmentation. Reflecting these headwinds, the WTO has projected global trade volume growth at a modest 3.3% in CY26, indicating only a gradual recovery amid persistent geopolitical and policy uncertainties. At the same time, bilateral negotiations between the United States and select partners including India are progressing, suggesting a gradual move toward strategic trade realignments.

The global outlook for CY26 remains finely balanced, with the IMF projecting global GDP growth at 2.9% in 2026, reflecting a

marginal improvement over the previous year. While continued disinflation and a gradual shift toward monetary easing provide some support to growth, downside risks remain elevated, including potential escalation in geopolitical conflicts, retaliatory trade actions, energy market volatility and rising cyber threats. On the upside, coordinated policy responses, easing of key geopolitical tensions and sustained investments in supply chain diversification and digital infrastructure could support a more stable recovery trajectory. In this environment, stakeholders across financial markets, businesses and governments will need to remain agile, maintaining a focus on policy flexibility and strategic risk management to navigate the evolving global landscape.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian broking industry continued its strong momentum in FY26, building on the high base of the previous year, albeit with a more moderated growth trajectory amid regulatory tightening and evolving global conditions. The industry remained supported by sustained activity across both primary and secondary markets, healthy retail participation and continued inflows into equity mutual funds, although volatility in global markets led to intermittent fluctuations in trading volumes.

The Indian broking industry entered a phase of consolidation in FY26 after the sharp expansion seen in previous years, amid regu latory changes and volatile market conditions. Market activity remained supported by continued retail participation and mutual fund inflows, although trading intensity moderated during the year. Retail broking firms continued to enhance their offerings through digital initiatives. The rise of discount brokers, supported by zero- brokerage models, e-KYC processes, UPI integration and user- friendly platforms, has further improved accessibility to capital markets. Investor participation remained structurally strong, with total demat accounts crossing 21.6 crore till Dec25, with 2.35 crore new accounts added during the year, reflecting continued financialisation of savings. On the primary market front, activity showed signs of moderation compared to the peak of FY25. In the SME segment alone, 257 companies raised Rs 11,658 crore in FY26, indicating continued but more measured capital market activity.

Retail investors continued to dominate market flows, supported by rising financial awareness and digital penetration. However, active participation saw some moderation, with NSE active investor accounts declining to 4.58 crore in FY26 from 4.92 crore in FY25, reflecting the impact of market volatility and weaker sentiment. Despite this, mutual fund participation remained robust, with SIP inflows staying strong at over Rs 31,000 crore per month, reaching a record Rs 32,087 crores in March 2026, highlighting continued retail commitment to long-term investing. While foreign portfolio investors (FPI) flows remained volatile, strong domestic institutional and retail participation provided resilience to the markets, reinforcing the ongoing shift toward domestic ownership. Despite headwinds from regulatory tightening, geopolitical tensions and global macro uncertainty, Indian equity markets demonstrated structural resilience, although benchmark returns moderated, with total return indices reflecting marginal to negative returns in FY26, indicating a phase of consolidation following strong gains in prior years.

FINANCIAL PERFORMANCE

The Companys Revenue from Operations grew to Rs 468.59 crore in the FY 25-26 compared to Rs 453.15 crore in FY 24-25, an increase of 3% y-o-y mainly led by higher interest income, and net gain on fair value changes.

The profit after tax stood at Rs58 crore for the year ended 31 st March 2026, as compared to Rs74 crore in the previous financial year, a decrease of 21%.

SEGMENTAL PERFORMANCE

The Company has identified its business segments as reportable segments. The segment wise revenue breakdown is as follows:

Industry Vertical	Segment Revenue (Rs in Lakhs)		YOY Revenue	Segment Margin (%)
	FY 26	FY 25	Growth %	FY 26	FY 25
Broking	35,532	37,002	(4)	7.0	17.4
Wholesale	11,039	7,998	38	45.0	35.9
debt market
Others	288	315	(9)	(17.6)	(30.0)

OUTLOOK

The World Bank has significantly upgraded its economic outlook for India, raising the projected growth rate from 6.3% to 6.6% for the 2026-27 financial year. This positive revision is anchored by a surge in private consumption, which now accounts for over 60% of the national GDP and is being fuelled by tax rationalisation and rising household incomes.

The Indian economy in the financial year 2026-27 (FY27) is positioned as a resilient global outlier, characterised by a transition from rapid post-pandemic recovery to a phase of steady, high- quality growth. While the World Bank recently adjusted its growth forecast to 6.6% (down from a potential 7.2% due to external shocks), India remains the fastest-growing major economy and the primary engine of South Asia.

The FY27 outlook is anchored by robust internal fundamentals that have effectively cushioned the economy against global headwinds. Real GDP growth is projected between 6.6% and 7.2%. Private consumption, which now constitutes over 60% of the GDP, is a critical pillar. This is supported by GST 2.0 reforms and tax rationalisation that have boosted disposable incomes and rural demand. The Services sector continues to lead with an expected GVA growth of around 9.1%, particularly in financial, professional and Al-led digital services. Manufacturing is bolstered by high public capital expenditure (targeting 3.4% of GDP) and the expansion of Global Capability Centres (GCCs).

FY27 marks a super-cycle for Indian trade, with several landmark agreements coming into force:

India-UK FTA is expected to be operational by May 2026 and this Comprehensive Economic and Trade Agreement (CETA) grants duty-free access to 99% of Indian exports. Key beneficiaries include textiles, footwear and gems and jewellery. Similarly India-EU Trade Pact dubbed as the Mother of all Agreements, it reached a major milestone in early 2026. While full ratification may take time, it aims to eliminate duties on 99.5% of Indian exports, significantly enhancing global competitiveness.

India has maintained disciplined fiscal and monetary policies. In 2026, inflation has trended toward historic lows, averaging below 2% earlier in the year, though pressure remains from global energy prices. The government is successfully narrowing the fiscal deficit toward a target of 4.4% of GDP, supported by buoyant tax revenues and strategic asset monetisation.

Despite the positive outlook, several substantial downside risks persist, out of which one of the major is ongoing conflict in West Asia is the most significant threat, potentially disrupting global energy supplies and shipping routes like the Red Sea corridor. A disruption in Gulf economies could lower remittances (which account for 38% of Indias inflows) and put further pressure on the Rupee. Also, unpredictable US tariff policies and high interest rates in developed markets continue to weigh on export-oriented sectors like IT.

The outlook for FY2026-27 is one of cautious optimism. Indias ability to maintain a 6.6%+ growth rate while navigating global energy volatility and trade shifts underscores its growing economic maturity. The successful implementation of the UK and EU trade pacts will be the ultimate litmus test for Indias ambition to become a global manufacturing and services hub.

Structural policy initiatives such as Aatmanirbhar Bharat, Make in India, DigitalIndiaand Production Linked Incentive (PLI) schemes are expected to further enhance manufacturing competitiveness, attract investments and strengthen Indias position in global supply chains. Additionally, initiatives promoting healthcare, tourism and domestic consumption are expected to contribute to broad-based economic expansion.

While external risks, including geopolitical tensions and global trade policy shifts, warrant close monitoring, Indias growth outlook remains robust, driven by strong domestic demand, favourable demographics and ongoing structural reforms.

OPPORTUNITY AND THREATS

The Indian stock broking industry continues to undergo structural transformation, driven by increasing financialisation of savings, rapid digital adoption, evolving regulatory frameworks and changing investor behaviour. While the sector offers significant long-term growth potential supported by favourable demographics and rising market participation, it alsc faces challenges arising from competitive intensity, regulatory developments and market-linked volatility. In this dynamic environment, the ability to adapt, innovate and maintain robust risk management practices will be critical for sustained growth.

OPPORTUNITIES:

a. Increasing Retail Participation

India continues to witness a steady expansion in its investor base, with growing participation from Tier 2 and Tier 3 cities. Improved financial literacy, widespread smartphone penetration and seamless digital onboarding processes are driving this trend, creating a large and underpenetratec market opportunity.

b. Continued Financialisation of Savings

A gradual shift from traditional savings instruments to market-linked products such as equities, mutual funds and ETFs is supporting long-term growth in the broking industry Rising SIP inflows and increased awareness of wealth creatior through capital markets are key enablers.

c. Digital Transformation and Fintech Integration

Technology remains a key differentiator, with brokers leveraging advanced platforms, data analytics, artificia intelligence and automation to enhance customer experience improve operational efficiency and drive engagement Integration with digital infrastructure such as UPI and Account Aggregator frameworks further strengthens accessibility.

d. Diversification of Investment Products

Increasing investor interest in a wider range of financia instruments, including ETFs, REITs, InvITs, fixed income products and global investing avenues, presents opportunities for brokers to expand their product offerings and diversify revenue streams.

e. Supportive Regulatory Ecosystem

Regulatory initiatives aimed at improving transparency investor protection and market efficiency continue to strengthen investor confidence. Streamlined processes anc enhanced governance frameworks are expected to support sustainable industry growth over the long term.

f. Strong Macroeconomic and Demographic Drivers

Indias robust economic outlook, favourable demographics expanding middle class and increasing disposable incomes

provide a strong structural foundation for growth in financial services and capital market participation.

THREATS:

a. Market Volatility and Global Uncertainties

Fluctuations in global financial markets, geopolitical tensions, interest rate movements and macroeconomic uncertainties may impact investor sentiment, trading volumes and overall market activity.

b. Intense Competition and Pricing Pressure

The presence of discount brokers and technology-led platforms has intensified competition, leading to pricing pressures and margin compression. Differentiation through value-added services and customer experience has become increasingly critical.

c. Evolving Regulatory Landscape

Ongoing regulatory changes, including margin norms, risk management frameworks and investor protection measures, while strengthening the ecosystem, may increase compliance requirements and operational complexity.

d. Cybersecurity and Technology Risks

Increased digital adoption exposes the industry to risks such as cyber threats, data breaches and system disruptions. Continuous investment in robust IT infrastructure and cyber security frameworks is essential.

e. Customer Retention and Engagement

With low switching costs and multiple platform choices, retaining and actively engaging clients remains a challenge. Sustained engagement requires continuous innovation, advisory capabilities and personalised offerings.

f. Dependence on Market Activity

A significant portion of broking revenues remains linked to trading volumes and market performance. Periods of subdued market activity or prolonged downturns may adversely impact revenue streams.

In navigating these opportunities and challenges, the Company remains focused on strengthening its digital capabilities, enhancing customer experience, maintaining strong compliance standards and adopting a prudent risk management approach to drive sustainable growth in the evolving market landscape.

RISK AND CONCERNS

The nature of the Companys operations exposes it to a range of risks, including market risk, credit risk, operational risk and IT & Cyber Security risk, which continue to remain key focus areas in FY 2025-26. The Company has established a comprehensive Risk Management Framework, supported by well-defined policies and procedures, to systematically identify, assess, monitor and mitigate risks in a timely and effective manner. This framework is periodically reviewed and strengthened to remain aligned with evolving market dynamics and regulatory requirements.

Market risk continues to be a significant area of focus, given the volatility observed in both domestic and global markets during the year. Geopolitical developments, fluctuations in interest rates, inflationary trends and movements in global capital flows have contributed to uncertainty in the financial markets, impacting investor sentiment and trading activity.

With the increasing adoption of digital platforms and higher volumes of online transactions, cybersecurity and data privacy risks have become more prominent. The Company continues to prioritise system resilience, data protection and robust IT infrastructure to safeguard against cyber threats and ensure uninterrupted operations.

The evolving regulatory landscape, including changes in margin requirements, enhanced risk management norms and increased compliance obligations, has added to operational complexity. While these measures strengthen market integrity, they require continuous monitoring and agile implementation to ensure compliance.

The industry is also witnessing heightened competitive intensity, driven by the growth of technology-led platforms and pricing pressures, which may impact margins and client acquisition and retention.

Further, the Companys revenue streams remain largely linked to market activity and trading volumes. Any prolonged slowdown in capital markets or reduced investor participation may have an impact on business performance.

To address these risks, the Company continues to strengthen its surveillance systems, risk monitoring processes and internal controls in line with regulatory guidelines. Focus areas during the year include enhanced automation in risk management, continuous improvement in operational controls and fostering a culture of proactive risk awareness across the organisation.

The Company remains committed to maintaining a robust risk management framework to ensure business resilience, regulatory compliance and long-term value creation for all stakeholders.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has in place an adequate internal audit framework to monitor the efficacy of internal controls with the objective of providing the Audit Committee and the Board of Directors with an independent and reasonable assurance on the adequacy and effectiveness of the organisations risk management, internal controls and governance processes. The framework is commensurate with the nature of the business and the size, scale and complexity of its operations.

In addition, the Company goes through periodic internal audits both through its internal team and external auditors, which includes branch and franchisee audits as well as all operations control. All the audit and inspection reports are placed at the Audit Committee meetings. Key issues are specifically brought to the attention of the Audit Committee and deliberated in detail along with the action plan for closure.

HUMAN RESOURCES

Our focus remains on enhancing organisational effectiveness and enriching the employee experience. Anchored in the organisations long-term strategic priorities, ABMLs People Strategy is designed to build a capable, engaged and growth ready workforce. The strategy is driven by four core levers-Capacity Building, Capability Development, Career Progression and Retention-and is further strengthened by a sharp focus on Employer Branding, Talent Acquisition Excellence and Rewards & Recognition.

Our hiring strategy emphasised diversification of sourcing channels, increased digitalisation of recruitment processes and the creation of deeper bench strength across critical business areas including Bank Channel, Institutional Business, PMS, Research and Marketing. An enhanced employer branding strategy aligned with our groups Employer Value Proposition (EVP) and strengthened employer branding initiatives significantly enhanced talent attraction and hiring effectiveness.

Capability building remained a key priority. We deepened functional and leadership capabilities through focused interventions, customised multiproduct knowledge programmes and targeted development initiatives for frontline and managerial talent. In parallel, specialised learning interventions in AI and data analytics were introduced to equip teams for evolving business and industry requirements.

To ensure learning on the job, we have launched AI Bot & AI roleplay accessible anytime, anywhere, ensures ongoing knowledge enhancement & skill development without disrupting daily tasks. Live complex cross functional and geography projects, peer-peer learning environment, buddy mechanisms are key tools to ensure on the job learning.

We encourage learning via mentoring or coaching, to bring this to life we enabled cross-functional project teams led by senior management to exemplify collaboration and partnerships that inspires trust thus strengthening our collective commitment to our shared values and organisational goals.

To enable visible and sustainable career growth, internal promotions-especially for Front Line Managers (FLMs) and above-were expanded, alongside increased internal mobility across roles and functions. These initiatives were aimed at strengthening career visibility, accelerating readiness for larger roles and retaining critical organisational talent.

A multipronged retention strategy was implemented with particular focus on entry level talent. This was supported by robust employee engagement platforms such as HR Connect forums, continuous feedback mechanisms including Employee Net Promoter Scores (eNPS) and periodic focused group discussions. Structured retention plans were deployed to optimise time in role and build a more agile, fungible workforce with enhanced career pathways.

We further strengthened our performance driven culture through refinements in incentive structures, external benchmarking of rewards and implementation of a comprehensive Rewards & Recognition framework covering both primary and secondary functions. Longterm incentive programmes were expanded to reinforce sustained motivation and retention of key talent. Additionally, targeted sales and cross-sell contests were introduced to improve quality lead generation, enhance productivity and support revenue growth during periods of market volatility.

Overall, the HR function remains committed to enabling business success by building a future ready workforce aligned with the organisations strategic ambitions.

As on 31 st March 2026, the total employees on the Companys rolls stood at 885.

KEY FINANCIAL RATIOS

The key financial ratios are given below:

Particulars	FY26	FY25
a) Operating Profit Margin (%)	17	22
b) Net Profit Margin (%)	12	16
c) Return on Net Worth (%)	22	37
d) Interest Coverage Ratio	2	2
e) Current Ratio	1	1
f) Debt Equity Ratio	7	7

CAUTIONARY NOTE

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results may be different from those expressed or implied since the Companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.