Algoquant Fintech Ltd Management Discussions

Annexure VI

Global Economy Overview

The global economy exhibited resilience amidst mounting challenges of prolonged inflation, elevated interest rates and geopolitical tensions during the financial year. According to the International Monetary Fund (IMF), global GDP growth held steady at 3.2%, mirroring the pace of 2023. While this remained below the pre-pandemic average of 3.8%, it highlighted the underlying strength of economic fundamentals. Notably, advanced economies saw a modest acceleration from 1.6% in 2023 to 1.8% in 2024, while large emerging markets such as India maintained solid momentum, supporting global economic stability.

Several positive macroeconomic indicators underscored the stability of this period. Labor markets across major economies remained robust, with low unemployment rates and a steady rise in nominal wages, particularly in service driven sectors. This supported household consumption and partially countered the effects of past inflation. More importantly, inflation began to ease globally, with headline inflation declining from 6.8% in 2023 to an estimated 5.9% in 2024, with a further fall to 4.5% expected in 2025.

Global financial markets reflected this evolving narrative. Equities posted moderate gains amid improving earnings visibility and lower inflationary trends, while bond markets stabilised as interest rate expectations normalised. However, financial volatility persisted due to geopolitical risks, trade tensions, particularly between the U.S. and China, and uneven growth across regions. Despite these headwinds, strong investment cycles, digital transformation and resilient consumer demand continued to bolster confidence. The outlook for Calendar Year 2025 remains cautiously optimistic, supported by steady macroeconomic fundamentals and improving conditions in both the real economy and financial markets.

Indian Economy Overview

India has emerged as the fastest-growing major economy over the past decade, expanding from US$ 2.1 trillion in 2015 to US$ 4.3 trillion in 2025, surpassing all other major economies in growth rate and solidifying its position as a global economic powerhouse.

This impressive expansion is attributed to a combination of structural reforms, technological advancements and a favourable demographic dividend. Indias focus on digital infrastructure, financial inclusion and manufacturing has fuelled domestic productivity, while its expanding services sector, particularly in IT and financial services, has remained a key driver of growth. Public investments in infrastructure, combined with a push for self-reliance in critical sectors, have also played a crucial role in accelerating economic momentum.

Despite global headwinds, Indias GDP is estimated to grow at 6.5% in FY24-25, reinforcing the strength of the countrys domestic demand. As Indias economy is likely to benefit from the change in global order, it stands to gain momentum as a manufacturing hub for global consumption.

Indias demographic profile is one of the greatest economic strengths, with a current median age of around 28 years, significantly lower than that of developed economies. The country is expected to witness a steady increase in its working-age population, with about 120 million individuals projected to enter the workforce by 2040. This demographic dividend, coupled with rising urbanisation, job creation and digital adoption, is poised to accelerate per capita income. As incomes rise, so too will household savings, with a growing share of these savings expected to move from physical assets

to financial instruments. This shift presents a tremendous opportunity for the financial services industry, as more Indians seek to invest in equities, mutual funds, insurance and other market- linked products to secure and grow their wealth.

Growth of the Indian economy

	FY 22	FY23	FY24	FY 25
Real GDP growth (%)	7.6	9.2	6.4	6.2

Growth of the Indian economy quarter by quarter, FY 2024- 25

	\u01ea1FY24	\u01ea2FY24	\u01ea3FY24	\u01ea4FY24
Real GDP growth (%)	6.5	5.6	6.4	7.4

Stock/Equity Market

The Indian stock market has achieved the position as the fifth biggest stock market in the world joining the ranks of stock market superpowers behind only the United States, China, Japan and Honk Kong. This ascent is the result of robust economic growth, growing investor confidence, and the successful integration of Indian equity markets with the global financial system. Being among the markets across major economies, which have consistently given greater than 10% annualized returns over the last 5-year/10-year/15-year/20-year periods, India remains the favorite of many emerging market investors globally. The Indian equity market has consistently outperformed other asset classes on a long-term basis.

Steady rise in retail investors participation in the Indian equities market is a reflection of the growing interest and confidence in the equity market. This surge is evident through the significant rise in demat accounts and robust inflows into mutual funds. India saw a record of total demat accounts opened at the end of FY 2024-25 stood at 41.1 million bring the total to 192.4 million. In terms of the volumes for FY 2024-25, NSEs average daily turnover (ADT) in cash equity segments stood at 1,12,963 crore, which grew at a robust 72% over the same period last year. NSE crossed around 11 crore individual investors during the year and investor registrations at the NSE have experienced remarkable acceleration in recent times, with 3.6 times jump in the last five years. The strong performance of the Indian markets was a result of strong economic growth, robust corporate results, boosted investor optimism and strong inflows from both domestic and foreign institutional investors. In the last five months, daily new unique investor registrations have consistently ranged between 47,000 and 73,000. This growth has been driven by several key factors, including the rapid advancement of digitization, heightened investor awareness, financial inclusion efforts, and strong market performance.

In 2024, the Nifty 50 index delivered a return of 8.8%, while the Nifty 500 index saw an impressive 15.2% gain. Indian markets have had positive returns for the past nine consecutive year. Over the five-year period ending December 2024, the Nifty 50 and Nifty 500 have generated annualized returns of 14.2% and 17.8%, respectively, further boosting investor confidence. The stake of Foreign Institutional Investors (FIIs) in Indian companies has reached its lowest point in 11 years, standing at approximately 17.7% as of March 31, 2024. This decline is not surprising considering the volatile nature of FII flows into the Indian market. In contrast, Domestic Institutional Investors (DIIs) have seen a surge in their stake, reaching a record high of 16.05% as of March 31, 2024. This increase is driven by net inflows of Rs.1.08 lakh crore (around $13 billion) during the quarter. The flows from foreign investors were largely driven by factors such as inflation and interest rate scenarios in developed markets such as the US and UK, currency movement, the trajectory of crude oil prices, and geopolitical scenario despite which the Indian economy continued to be the fastest- growing major economy in the world. Despite the soaring valuations, most market experts remain optimistic about the long-term growth prospects of Indian equities led by progressive policy reforms, economic stability, and attractive investment avenues.

India fifth largest global equity market

World	Market capitalization (US$ trillion)
US	56,549,774
China	11,870,548
Japan	6,358,159
Hong Kong	5,022,179
India	4,388,733

Sensex surged to record highs in FY24- 25

Source: Moneycontrol

Company Overview

Algoquant Fintech Limited (hereafter referred to as Your Company) has emerged as the torchbearer in the field of algo trading. We offer a variety of financial services, specializing in high-frequency and strategy-based trading across all Indian exchanges, including those for equities, commodities, and currencies. We provide automation in financial transactions across a wide range of asset classes led by different specific technology solutions. We have established ourselves as a true financial giant and are the frontrunners in providing algo trading solutions to clients both in India and abroad. We aim to cater to the new age retail and institutional customers grow and multiply their investments.

Opportunities and Threats Opportunities

Trading in Financial Instruments services will have more opportunities if the long-term economic outlook is favorable.

Growing percentage of discretionary income going to the financial services industry. This places us in a sweet spot to leverage the growth opportunity the sector presents.

Regulatory changes would encourage increased engagement from investors of all types.

Strong Tech Expertise- We are providing hi-tech solutions to our esteemed client. We implement RMS and ensure adoption of automated solutions and digitalized processes. Our algo trading strategy platform is based on algorithmic and quantitative trading solutions and risk monitoring tools Making use of technology to support best practices and procedures.

Threats

Short-term economic slowdown impacting investor sentiments and business activities.

Other assets are becoming more appealing as investment opportunities due to market changes.

Segment?€“ Wise or Product- Wise Performance

The Company is a technology driven trading entity. Involved in Business activities of trading in securities/financial instruments. We are one of the leaders in Low-risk arbitrage and high frequency trading in the Indian Capital Markets.

There is no Segment distribution of business of your company.

Future Outlook and Prospects

As per the records available on the website of the BSE Limited (BSE), the Company has position of top 2000 Companies based on the market capitalization calculated as on the last day of the financial year.

Our focus remained to continuously invest in personnel, technology and improve the size of balance sheet. We are on track to achieve several milestones as per our internal forecasts. The roadmap appears equally encouraging and we are ready to march to the next leg of growth that will demonstrate our growing capabilities at scale as well as expertise in several complex trading strategy. The industry is supportive, and the demand scenario continues to be favorable. Our objective is to continue on this profitable growth journey and deliver sustained value for our stakeholders.

Looking ahead, we remain committed to pursuing excellence, fostering innovation, and delivering sustainable value for all our stakeholders. With a solid foundation and a clear strategic direction, we are well-positioned to capitalize on future opportunities and drive long-term growth and success. We remain committed to establish stronghold in the financial services industry by diversification, retail penetration through algos, retail expansion and expanding our international business.

Risk Management & Concerns

The Company has laid down procedures to inform Board Members about the risk assessment and minimization procedures.

Human Resource Development and Industrial Relations including number of people employed

The Company considers human capital to be a key pillar of growth. Its skilled and professional management team is a strong driving force. The Company ensures a safe, conducive, and productive work environment. The HR policies continually strive towards attracting, retaining, and developing the best talent required for the business to grow.

To provide a constant and consistent connection as well as uninterrupted services, the Company has used technology to promote regular communication in its staff personnels. There were 408 employees working in the company as on the financial year ended on March 31, 2025.

Internal Control System

The Company has adequate internal control procedures commensurate with the size of the Company and the nature of its business. These systems are designed to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized recorded and reported.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements to strengthen the same. The Board of Directors has framed a policy which ensures the orderly and efficient conduct of its business, safeguarding of its assets, to provide greater assurance regarding prevention and detection of frauds and accuracy and completeness of the accounting records of the company.

Further, your Company has adequate internal financial control with reference to its financial statements.

Financial Review and Analysis

The financial performance of the Company for the financial year ended March 31, 2025 is given as under:-

Performance	Year ended 31-03- 2025	Year ended 31-03- 2024
Revenue from operations	23,454.52	15,628.18
Other Income	4.12	31.32
Total Income from operation	23,458.64	15,659.50
Profit before Taxation	3,780.01	3,096.45
Less: Tax Expenses	522.08	614.59
Profit after Tax	3,257.93	2,481.86
Other Comprehensive Income	12.84	2.68
Total Comprehensive Income	3,270.77	2,484.54

(a) 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 thereof:-

S No.	Particulars	FY 2024- 25	FY 2023- 24	Detailed explanation for changes thereof
i.	Interest Coverage Ratio	6.79 times	4.04 times	Due to the company\u2019s improved profitability and a decrease in interest expense this year, we have observed an increase as compared to the previous year.
ii.	Current Ratio	1.73 times	1.21 times	The increase in the current ratio is primarily due to a rise in investments trading shares, along with a decrease in short-term borrowings compared to the previous financial year.
iii.	Net Profit Margin (%)	13.89%	15.85%	Variance is less than 25% therefore no explanation is required.
iv.	Debtors Turnover	NA	NA	-
v.	Inventory Turnover	NA	NA	-
vi.	Debt Equity Ratio	0.29 times	0.89 times	The decrease in the debt - equity ratio is attributable to a reduction in borrowings .
vii.	Return on Net Worth (%)	32.00%	35.91%	Variance is less than 25% therefore no explanation is required.
viii.	Operating Profit Margin (%)	18.90%	26.33%	The decrease in Operating Profit Margin is due to an increase in operating and employee expenses.

Cautionary Statement

Certain Statements in the "Management Discussion and Analysis" describing the Companys objectives, expectations or predictions may be forward looking Actual results could differ materially from those expressed or implied due to various risk & uncertainties. Important factors that could make a difference to the Companys operations include changes in Govt. regulations, tax regimes, economic developments and other factors such as litigation. The company does not undertake to update these statements.

By order of Board of Directors For Algoquant Fintech Limited

sd/- sd/-

Devansh Gupta Dhruv Gupta

Managing Director Director

DIN:06920376 DIN:06920431

Place: New Delhi Date: July 3, 2025