Amarnath Securities Ltd Management Discussions

The Management Discussion and Analysis Report provides an overview of the Companys operating environment, financial performance, strategic initiatives, risks and opportunities and the outlook for future growth for the financial year ended March 31, 2026 ("FY 2025-26").

The discussion should be read in conjunction with the Companys audited financial statements and related notes forming part of the Annual Report.

1. BUSINESS AND MARKET OVERVIEW

The Indian economy demonstrated strong resilience and continued to maintain a favourable medium- to long-term growth trajectory during FY 2025-26 despite global economic uncertainties, geopolitical developments, fluctuations in commodity prices and changing financial-market conditions.

As per the latest estimates released by the Ministry of Statistics and Programme Implementation (MoSPI), Indias real Gross Domestic Product (GDP) is estimated to have grown by 7.6% during FY 2025-26. The continued expansion of domestic consumption, investment, infrastructure development, manufacturing and services supported overall economic activity during the year.

The Indian financial-services sector continued to play an important role in supporting economic activity through credit intermediation, investment, financial inclusion and digital financial services. Banks, Non-Banking Financial Companies ("NBFCs"), Housing Finance Companies, fintech enterprises and other financial intermediaries continued to contribute to the expansion and formalisation of financial services.

The sector also witnessed continued adoption of technology, digital platforms, data-driven credit assessment and improved risk-management practices. These developments are expected to create opportunities for well-governed financial-services companies with appropriate business models and strong compliance frameworks.

Monetary and Regulatory Environment

The monetary environment became more supportive during the year. The Reserve Bank of India ("RBI") reduced the policy repo rate during FY 2025-26, and the repo rate currently stands at 5.25%. Lower policy rates have the potential to support borrowing conditions, liquidity and economic activity, although the actual benefit to individual financial institutions depends upon transmission, funding costs, asset yields and prevailing market conditions.

The regulatory environment for NBFCs continues to emphasise prudent risk management, corporate governance, capital adequacy, liquidity management, customer protection and effective internal controls. The Company recognises that compliance and governance will remain important components of sustainable growth.

2. COMPANYS BUSINESS AND STRATEGIC DIRECTION

During FY 2025-26, the Board of Directors undertook a detailed assessment of the Companys existing business activities, financial position, regulatory environment and future growth prospects.

The Company is presently evaluating opportunities for diversification and expansion into suitable business activities that are aligned with the expertise of the present management, the Companys financial capabilities and its long-term strategic objectives.

The management believes that the Companys future growth should be based on a prudent combination of regulatory compliance, appropriate risk management, efficient deployment of capital and identification of scalable business opportunities.

The Company will therefore continue to evaluate potential business opportunities on the basis of:

commercial viability;

expected risk-adjusted returns;

capital requirements;

regulatory and compliance requirements;

scalability of the proposed business;

availability of appropriate management and operational resources; and

potential contribution towards sustainable shareholder value.

Any new business initiative or diversification undertaken by the Company will be subject to applicable statutory and regulatory requirements and such approvals as may be necessary.

3. FINANCIAL PERFORMANCE

The financial performance of the Company during FY 2025-26 remained challenging.

The Company reported a Loss Before Tax of ?520.91 Lakhs during FY 2025-26 as compared to a Profit Before Tax of ?27.24 Lakhs during FY 2024-25.

The Companys income during the year continued to be primarily derived from other income sources. The financial results reflect the Companys current operating scale and business position.

In view of the loss incurred during the year, the managements immediate priorities remain prudent financial management, preservation of liquidity, effective monitoring of financial assets, strengthening of internal controls and identification of sustainable avenues for improving future earnings.

The Board continues to monitor the Companys financial performance and strategic position and is evaluating appropriate measures to improve profitability and operational efficiency over the medium to long term.

4. INDUSTRY OUTLOOK

The outlook for Indias financial-services sector remains positive over the medium and long term, supported by economic growth, increasing financial inclusion, digitalisation, formalisation of economic activity and continued demand for diversified sources of finance.

The NBFC sector continues to form an important component of Indias financial system by serving various segments of borrowers and providing specialised financial services. The Economic Survey 2025-26 also reflects the continuing importance of NBFCs and other non-bank channels of finance within the broader financial system.

At the same time, the sector is becoming increasingly competitive and regulated. Sustainable growth will depend on disciplined underwriting, appropriate capital allocation, liquidity management, technology adoption, strong governance and effective regulatory compliance.

The Company intends to participate in this evolving environment selectively and prudently, with emphasis on sustainable business models rather than pursuing growth solely for the purpose of increasing scale.

5. FUTURE GROWTH STRATEGY AND OUTLOOK

The management views the coming years as an important phase for the Companys transformation and potential business expansion.

The Companys future strategy is expected to focus on rebuilding a sustainable earnings base, identifying scalable business opportunities and improving the utilisation of available financial and organisational resources.

A. Business Diversification

The Company is evaluating opportunities to diversify into businesses that are complementary to its existing financial-services capabilities and consistent with its regulatory status.

Potential opportunities may include selected financial-services activities, technology-enabled financial solutions, investment-related activities or other permitted businesses, subject to detailed evaluation and applicable regulatory approvals.

The Company does not intend to enter into any new business merely for the purpose of diversification. Each opportunity will be assessed for its risk-return profile, capital intensity, regulatory requirements and long-term sustainability.

B. Strengthening the NBFC Platform

The Company will continue to evaluate opportunities to utilise its NBFC platform more effectively.

Depending upon market conditions, regulatory requirements and availability of adequate capital and resources, the Company may explore opportunities in selected lending or financial-intermediation segments where it believes it can establish a differentiated and sustainable business model.

The focus will be on prudent underwriting, controlled risk exposure, disciplined collection practices and appropriate portfolio diversification.

C. Technology and Digital Transformation

Technology is expected to play an increasingly important role in the financial-services industry.

The Company intends to evaluate technology-enabled processes for customer acquisition, documentation, monitoring, reporting, risk assessment and operational management wherever commercially and operationally appropriate. Digital processes can potentially improve efficiency, transparency, turnaround times and scalability while also supporting stronger monitoring and control mechanisms.

D. Capital and Resource Optimisation

The Company will focus on efficient deployment of its available capital and resources.

Any future expansion will be undertaken in a phased manner, taking into consideration the Companys financial position, capital requirements, regulatory framework and expected returns.

The management will seek to maintain an appropriate balance between growth, liquidity, risk and profitability.

E. Improving Profitability

Improvement in profitability remains one of the principal objectives of the Companys future strategy.

The management intends to focus on:

developing sustainable sources of operating income;

improving asset utilisation;

controlling operating and administrative costs;

strengthening financial and operational processes;

improving efficiency through technology;

evaluating opportunities with attractive risk-adjusted returns; and

maintaining disciplined financial and risk management.

The Company believes that a gradual improvement in the quality and sustainability of earnings will be more important than short-term expansion in business volumes.

F. Long-Term Value Creation

The Companys strategic objective is to establish a sustainable and scalable business platform capable of generating recurring income and improving shareholder value over the long term.

The management will continue to assess strategic opportunities while maintaining appropriate safeguards relating to regulatory compliance, governance, capital allocation and risk management.

6. RISKS AND OPPORTUNITIES

The Company operates in a dynamic financial environment and is exposed to various internal and external risks. At the same time, Indias economic and financial development presents opportunities for future growth.

Key Risks

Risk	Description
Macroeconomic Risk	Changes in economic growth, inflation, employment, consumption, investment activity and global economic conditions may affect the Companys business prospects and financial performance.
Interest Rate Risk	Changes in interest rates may affect borrowing costs, investment returns, asset yields and the overall profitability of the Company.
Liquidity Risk	Any mismatch between the Companys assets and liabilities or adverse changes in market liquidity could affect its ability to meet financial obligations when due.
Credit Risk	If the Company expands its lending activities, deterioration in the financial position of borrowers or counterparties could result in increased credit losses and adversely affect profitability.
Regulatory Risk	The financial-services industry is subject to extensive regulation. Changes in RBI, SEBI, Ministry of Corporate Affairs or other applicable requirements may increase compliance obligations and operating costs.
Competition Risk	The Company may face competition from banks, NBFCs, fintech companies and other financial-services providers. Competition may affect pricing, margins and customer acquisition.
Technology and Cybersecurity Risk	Increasing digitalisation creates opportunities for efficiency but also exposes financial institutions to technology failures, cyber threats, data-security risks and operational disruptions.
Strategic Execution Risk	The success of the Companys proposed diversification and future growth strategy will depend on appropriate business selection, regulatory approvals, availability of capital, management capabilities, market conditions and effective execution.

Opportunities

The Company believes that Indias continued economic expansion, increasing financial inclusion, digital adoption, formalisation of financial activity and development of non-bank financing channels provide opportunities for sustainable growth.

The Companys future opportunity set may include technology-enabled financial services, selected lending opportunities, specialised financial products and other permitted activities that are aligned with its capabilities and regulatory framework.

7. INTERNAL CONTROL SYSTEMS

The Company maintains an internal control system commensurate with the size, nature and complexity of its operations.

The internal control framework is designed to provide reasonable assurance regarding:

safeguarding of assets;

accuracy and reliability of financial records;

proper authorisation and recording of transactions;

compliance with applicable laws and regulations;

identification and management of financial and operational risks; and

efficient conduct of business operations.

The Directors and management remain actively involved in overseeing the Companys operations and financial position.

Internal audit observations and recommendations, wherever applicable, are reviewed by the management and appropriate corrective measures are undertaken.

The Company will continue to strengthen its internal control, compliance and risk-management framework as its business operations evolve.

8. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

The Companys activities are primarily financial and non-manufacturing in nature. Accordingly, matters relating to industrial pollution, manufacturing emissions and consumption of raw materials are not material to the Companys operations.

The Company nevertheless recognises the importance of responsible business practices and remains committed to ethical conduct, transparency, accountability and compliance with applicable laws and regulations.

The Company seeks to maintain sound corporate governance practices and responsible relationships with shareholders, regulators, employees, customers, business associates and other stakeholders.

9. HUMAN RESOURCES

The Company recognises that competent and responsible personnel are essential to effective governance, regulatory compliance and successful execution of its future business strategy.

As the Company evaluates new business opportunities, it will assess its human-resource requirements and, where necessary, strengthen its management and operational capabilities to support future growth.

The Company intends to build an appropriate organisational structure commensurate with its future business requirements while maintaining operational efficiency and cost discipline.

10. REGULATORY AND GOVERNANCE COMMITMENT

The Company remains committed to complying with applicable provisions of the Companies Act, 2013, RBI regulations and directions applicable to NBFCs, SEBI requirements wherever applicable and other statutory and regulatory requirements.

The management recognises that regulatory expectations relating to corporate governance, risk management, customer protection, financial reporting, internal controls and compliance continue to evolve.

The Company will continue to monitor regulatory developments and take appropriate steps to ensure that its operations remain aligned with applicable requirements.

11. OUTLOOK FOR FY 2026-27 AND BEYOND

The management remains cautiously optimistic regarding the Companys medium- to long-term prospects.

The strong underlying growth of the Indian economy, together with increasing digitalisation and financial inclusion, provides a favourable external environment for financial-services businesses. Indias real GDP growth for FY 2025-26 is currently estimated at 7.6%, providing a supportive macroeconomic backdrop.

The Companys immediate objective for FY 2026-27 will be to strengthen its financial foundation, improve operational efficiency and identify appropriate avenues for generating recurring and sustainable income.

Over the medium term, the Company intends to explore:

Expansion of sustainable income-generating activities;

Selective diversification into complementary businesses;

Better utilisation of the Companys NBFC platform;

Technology-enabled operational improvements;

Prudent deployment of capital;

Strengthening of risk management and compliance systems;

Improvement in profitability and cash-flow generation; and

Creation of sustainable long-term shareholder value.

The management believes that the Companys future growth should be phased, disciplined and risk-adjusted. The Company will prioritise quality of earnings, regulatory compliance and long-term sustainability over rapid expansion.

The management will also continue to evaluate strategic partnerships, investment opportunities and other business initiatives, where appropriate, that may complement the Companys existing capabilities and accelerate sustainable growth. Any such initiative will be undertaken only after considering the Companys financial resources, regulatory requirements, risk profile, commercial viability and long-term impact on shareholders.

12. MANAGEMENTS PRIORITIES

Going forward, the principal priorities of the management are expected to be:

strengthening the Companys financial position;

improving the quality and sustainability of income;

identifying commercially viable business opportunities;

evaluating suitable diversification opportunities;

maintaining adequate liquidity and prudent capital allocation;

strengthening governance, risk management and internal controls;

leveraging technology to improve operational efficiency;

maintaining full regulatory compliance; and

building a sustainable platform for long-term growth and shareholder value creation.

13. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, plans, expectations, projections, estimates or other future developments may constitute forward-looking statements within the meaning of applicable securities laws and regulations.

Such statements are based on certain assumptions and expectations concerning future events and are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, interest rates, liquidity conditions, regulatory developments, market conditions, competition, availability of capital, business risks and other factors beyond the Companys reasonable control. The Companys future growth initiatives, diversification plans and strategic opportunities are subject to detailed evaluation and, where applicable, regulatory and statutory approvals. There can be no assurance that any proposed initiative will be implemented or, if implemented, will achieve the expected results. The Company does not undertake any obligation to publicly update or revise any forward-looking statements as a result of future events or developments, except as may be required under applicable laws and regulations.