Aryaman Capital Markets Ltd Management Discussions

Annexure III

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Indias capital markets have undergone significant transformations in recent years, driven by technological advancements, regulatory reforms, and growing investor participation. The countrys equity market has seen remarkable growth, with the benchmark indices reaching new highs, driven by strong corporate earnings, economic reforms, and foreign investor inflows.

The fixed income market in India has also evolved, with the introduction of new instruments and platforms, such as the Bharat Bond Exchange and the India International Bullion Exchange. Additionally, the currency market has seen increased activity, with the Indian rupee becoming more widely traded.

Furthermore, Indias commodity markets have expanded, with the launch of new exchanges and products, such as the India International Crude Oil Exchange. The countrys market infrastructure has also been upgraded, with the introduction of new trading platforms, clearing and settlement systems, and depositories.

Key trends in Indias capital markets include the growing adoption of digital technologies, increasing investor focus on environmental, social, and governance (ESG) factors, and the expanding role of institutional investors. Additionally, the governments initiatives to promote financial inclusion and literacy are expected to drive further growth in the market.

Overall, Indias capital markets are poised for continued growth and evolution, driven by regulatory reforms, technological advancements, and increasing investor participation. As the market continues to develop, it is essential to stay informed about the latest trends and developments to navigate the landscape effectively.

CAPITAL MARKET:

India is 4th largest market by Market Cap. Indias domestic equity markets continues to rank fourth-largest globally with over $4.0 Tn on market cap.

Table: India is the 4th largest market by Market Capitalization.

Country	US$ Tn Market Cap
USA	59.3
China	7.8
Japan	5.6
India	4.4
United Kingdom	3.9

Robust Stock Market Performance in FY25

The Indian stock market ended FY 2025 with modest gains, despite substantial FPI outflows in the second half. The Nifty delivered positive returns for its investors in FY 2024-25, outperforming certain Asian indices such as the Nikkei 225 and the Korea Composite Stock Price Index. Hang Seng remained at the top of the leaderboard, delivering a staggering 39.8% return.

The NSE and BSE midcap and Smallcap indices closed the FY 2024-25 on a strong note, driven by market rebound, increased retail investor participation, and attractive valuations. The Nifty Midcap150 and Nifty500 rose by 7.6% and 5.4% respectively. The BSE Smallcap index increased by 8%, while the midcap index increased by 5.6%. In comparison, the Sensex increased by 5.1% over the same period. Despite earlier concerns over valuations and volatility, renewed optimism in the broader market supported gains in these segments.

Strong Addition to Investor Base continues.

Indias economic transformation over the past few decades is a narrative of rapid growth and evolving financial landscapes. Central to this story is the rise of capital markets, catalyzing capital formation for the real economy, enhancing the financialization of domestic savings, and enabling wealth creation. Investor participation has been a contributor, with the number of investors growing from 2.3 crore in FY15 to 19.2 crore in FY25, increasing at a CAGR of 23% for the decade.

The financial year 2025 was marked by significant shifts and milestones. The new income tax bill was proposed, foreign institutional investor outflows reached new highs, and India witnessed its largest-ever initial public offering in the form of the Hyundai Motor India IPO. Alongside this, Narendra Modi secured a third term, while

Donald Trumps return to power introduced fresh tariff policies that stirred global uncertainty. During the year

FY25, the Indian capital market has witnessed strong outflows by FIIs in the secondary market (across the year). However, FIIs primary inflows (mainly IPOs) compensated the outflows to a major extent in the initial 9 months till Dec24. However, the sharp outflows in the 4th Quarter of FY25 in the secondary market, with a lower number of IPOs, led the yearly number to fall to negative territory. DIIs flows have supported the market and didnt let the market witness the fall, which otherwise would have been seen.

MACRO-ECONOMIC OVERVIEW

India:

Real GDP or GDP at Constant Prices is estimated to attain a level of 178 lakh crore in FY25, against the First Revised Estimate of GDP for the year FY24 of 167.50 lakh crore. The total expenditure that the government is expected to spend in FY26 is 50.65 lakh crore. When compared to the last financial year, this has increased by 7.4%. Real GDP has been estimated to grow by 6.5% in FY25. Nominal GDP is expected to witness a growth rate of 9.9% in FY25. Both growth rates are revised upward from their respective First Advance Estimates.

Global Economy:

In FY25, the global economy experienced moderate growth, influenced by persistent inflationary pressures, tight monetary policies in developed markets, and geopolitical uncertainties. These factors contributed to cautious consumer spending and disrupted global trade flows. Amid trade uncertainties, global growth is expected to slow to 2.3% in 2025 from 2.7% in 2024.

The US economy has been resilient, driven by strong growth in the services sector, a robust labour market, and high real wages. Europe, including the UK, has faced softer growth due to the war in Ukraine, high energy prices, and slowdowns in manufacturing and services. Chinas growth was weaker than expected, with a slowdown in the real estate sector and industrial activity. The Asia-Pacific region is projected to be the fastest-growing.

The automotive industry faced significant challenges amid these macroeconomic headwinds. High interest rates and tighter credit conditions in key markets such as the US and Europe dampened consumer demand, particularly in the mass market segment.

OPPORTUNITIES

The need for superior quality and process execution.

Increasing disposable income and investment in financial products. ?

Acceptance of a new and innovative range of financial products creates an opportunity to innovate in the financial services space. ?

Rise in urban youth awareness about the benefits of investment. ?

Need for leadership in sophisticated solutions to enable our clients to optimize the efficiency of their businesses. ?

Constant upgradation of the technology enables us to emerge as a leader in this fast-paced financial services environment.

Consolidation/acquisitions/restructuring opens out opportunities for the corporate advisory business.

THREATS:

Enhanced competition from both local and global players and the rise of disruptive business models in financial services and the emergence of new technology, the company runs the risk of obsolescence.

A dependence on technology and third-party platforms exposes us to threats posed on the internet, such as virus attacks leading to execution failures and disclosure of client information.

Our business operations have a heavy reliance on technology and servers to execute trades on the exchanges. This may lead to a threat due to execution risk.

Our business is exposed to macroeconomic changes and operates in a highly regulated industry. Its performance not only depends on a slowdown in global liquidity flows but also on a change in regulatory frameworks.

BUSINESS PERFORMANCE:

1) REVIEW OF OPERATIONS:

The Total Income of the Company stood at 7733.62 lacs for the year ended March 31, 2025, as against 3432.04 lacs in the previous year. The Company reported a net profit of 2,293.11 lacs for the year ended March 31, 2025, compared to a net profit of 645.53 lacs in the previous year.

2) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The company has an Internal Control System commensurate with its requirements and size of business to ensure that the assets and interests of the company are safeguarded. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid down system and policies, are comprehensively and frequently monitored by your companys management at all levels of the organization. The company has established well-defined policies and processes across the organization covering all major activities, including authority for approvals. In all cases where monetary decisions are involved, various limits and authorities are in place.

The Companys internal controls are structured in a manner that ensure reasonable assurance about recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance with corporate policies, laws and accounting standards.

With a strong monitoring system in place, the Company has an Audit Committee, the details of which have been provided in the Corporate Governance Report. The Audit Committee of the Board of Directors review the existing audit procedures and internal systems of control on an ongoing basis, keeping in mind the organizations requirements, growth prospects and ever-evolving business environment. They also review the internal audit findings and recommendations and ensure that corrective measures are implemented. Suggestions for improvement are considered and the Audit Committee follows up on the implementation of corrective actions.

3) RISKS AND CONCERN:

Risk is an integral part of the business and we aim at delivering superior shareholder value by achieving an appropriate balance between risks and returns. The financial services industry is subject to a continuously evolving legislative and regulatory environment due to increasing globalization, integration of world markets, newer and more complex products & transactions and an increasingly stringent regulatory framework.

Our senior management identifies and monitors the risks on an ongoing basis and evolves processes/systems to monitor and control the same to contain the risks to minimum levels. Periodic monitoring by our officials helps in identifying risks at in early stage. If required, a risk event update report is periodically placed before the Board of Directors of the Company.

Regulatory framework, focused on maintaining controls on domestic businesses, but even inadvertently creating a more favorable regulatory environment for global entities operating in India is a matter of concern. We actively participate in dialogue in industry bodies and with regulators to point these out and to recommend appropriate changes.

4) RISK MANAGEMENT:

Aryaman Capital Markets Limited has instituted a comprehensive Risk Management Policy in alignment with the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy aims to identify, assess, treat, and monitor risks that may potentially impact the Companys operations or objectives. It applies across all business areas and is overseen by the Board of Directors, with specific roles assigned to the Audit Committee and Independent Directors. The management follows a structured four-step process risk identification, assessment, treatment, and continuous monitoring to ensure timely mitigation of threats. Furthermore, the policy mandates the development of internal control systems, regular audit reviews, insurance evaluations, and compliance monitoring. The Board ensures that these processes remain effective and aligned with applicable laws and emerging regulatory changes, with provisions for regular review and amendment of the policy as needed.

5) KEY RATIOS

PARTICULARS	2024-25	2023-24	Change in ratios in %
Current ratio	2.02	1.35	50.08%
Debt- Equity Ratio	0.36	1.12	-67.79%
Debt Service Coverage Ratio	1.40	1.71	-18.02%
Inventory Turnover Ratio	3.02	1.49	102.33%
Debtors Turnover Ratio	413.39	232.37	77.90%
Interest Service Coverage Ratio	8.48	2.99	183.32%
Long-term debt to working capital	N.A.	N.A.	N.A.
Bad debts to accounts receivable ratio	N.A.	N.A.	N. A
Current liability ratio	0.86	0.95	-9.22%
Total debts to total assets	0.24	0.51	-52.57%
Return on Equity Ratio	0.39	0.19	109.06%
Trade Payable Turnover Ratio	116.29	3,696.57	-96.85%
Net Capital Turnover Ratio	2.18	1.94	12.46%
Net Profit Ratio	0.31	0.20	51.86%
Return on Capital Employed	0.29	0.13	125.35%
Return on Investment	0.31	0.14	112.69%

REASONS FOR MORE THAN 25% VARIANCE

RATIOS WITH VARIANCE	REASONS FOR VARIANCE
MORE THAN 25%
Debt Service Coverage Ratio	Not Applicable
Inventory Turnover Ratio	Due to higher revenue from the sales turnover Ratio.
Debtor Turnover Ratio	Due to higher revenue from Operations.
Interest Service Coverage Ratio	Due to higher Earnings before interest and taxes
Return on Equity Ratio	Due to higher Net profit after tax, tax-exceptional items, and an increase in average total equity
Trade Payable Turnover Ratio	Due to higher average Trade payables
Net Capital Turnover Ratio	Not Applicable
Net Profit Ratio	Due to higher Net profit after tax, tax-exceptional items
Return on capital employed	Due to higher Profit Before interest, Tax & Exceptional items
Return on Investment	Due to higher Dividend and interest income

6) HUMAN RESOURCES:

Aryaman Capital Markets Limited is part of a dynamic and progressive group that actively fosters a challenging work environment and encourages Entrepreneurship. With trust being the critical part of our business belief, we lay a strong emphasis on integrity, teamwork, innovation, performance and partnership. Our professional staff with diverse backgrounds brings varied talent, knowledge and experience to the Group, helping our businesses to remain competitive, achieve greater success and newer milestones. Our management team and board of directors are resolved to do what we believe is best for our shareholders, clients, and associates.

At Aryaman Capital Market Limited, we recruit for skill, experience, right attitude, commitment and diversity. However, the one common trait that runs through the DNA of every employee is entrepreneurship. We encourage our employees to act as owners, partners and managers of their individual functions while providing a conducive environment for them to be creative and productive.

7) OUTLOOK:

The new initiatives undertaken are in early stages and FY 2026 marks the beginning of a transition of the business from a pure traditional brokerage into a new generation digital brokerage. It will leverage its relations with multiple fintech and bank partners to capitalize on the growing financial services opportunity in India.

8) SAFE HARBOUR:

This document contains statements about expected future events, financial and operating results of the businesses, which are forward-looking. By their nature, forward-looking statements require businesses to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of Aryaman Capital Market Limiteds Annual Report, FY2024-25.