Avonmore Capital & Management Services Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

1. Global and Indian Macroeconomic Overview Global Economy

FY 2025-26 was characterised by a global economy that demonstrated resilience despite a complex operating environment marked by geopolitical tensions, evolving trade policies, uneven monetary-policy normalisation and periodic volatility in energy and commodity markets. Global economic activity remained supported by domestic consumption, continued investment in technology and infrastructure, and the gradual easing of inflationary pressures in several major economies. At the same time, the global economy remained exposed to risks arising from geopolitical developments, changes in trade barriers, financial-market repricing and uncertainty surrounding the pace of monetary easing.

The International Monetary Funds April 2026 World Economic Outlook projected global growth at 3.1% in 2026 and 3.2% in 2027, while noting that the global economy was facing additional uncertainty from the conflict in the Middle East. Global headline inflation was expected to rise modestly during 2026 before resuming its declining trajectory in 2027.

The global inflation environment has nevertheless improved materially compared with the elevated levels witnessed during the earlier part of the decade. The moderation in inflation has allowed monetary authorities in a number of economies to move gradually towards less restrictive policy settings. However, the pace of monetary normalisation remains differentiated across countries, reflecting differences in domestic inflation, employment, fiscal conditions and economic growth. The IMF has also highlighted the importance of restoring fiscal buffers, maintaining price and financial stability and implementing structural reforms.

Geopolitical developments continued to influence global commodity markets. Energy prices remained sensitive to developments in West Asia, while disruptions to shipping routes and supply chains had the potential to increase transportation costs and create renewed inflationary pressures. For emerging economies, fluctuations in crude oil prices, foreign capital flows and global interest rates remain important transmission channels to domestic inflation, exchange rates, liquidity and financing conditions.

Global trade also continued to undergo structural changes. Businesses across sectors are increasingly seeking greater resilience in supply chains, diversification of manufacturing locations and closer integration of technology into production and logistics. This trend presents opportunities for economies such as India, which continue to attract investment in manufacturing, infrastructure, electronics, digital services and other emerging sectors.

Another important feature of the global economy has been the increasing importance of technology and artificial intelligence in investment and productivity. Large-scale investment in data infrastructure, digital platforms, semiconductors and related technologies is creating new investment opportunities while also changing traditional business models. For financial-services businesses, technology is simultaneously improving customer acquisition, analytics, transaction processing and risk management.

Financial markets remained sensitive to changes in expectations around interest rates, inflation and geopolitical developments. Equity markets, bond yields, currencies and commodities experienced periods of heightened volatility as investors reassessed growth and policy expectations. Against this backdrop, financial institutions have increasingly emphasised liquidity management, capital preservation, diversification and disciplined risk management.

Implications for India:

The global environment presents both opportunities and challenges for India. Indias relatively strong domestic demand provides a degree of insulation from weaker external conditions, while global supply-chain diversification can support manufacturing and infrastructure investment. At the same time, India remains exposed to global commodity prices, capital flows, exchange-rate movements and international interest rates. The combination of domestic resilience and global uncertainty therefore reinforces the importance of prudent financial management and diversified business models.

For Avonmore, these conditions have relevance across its businesses. The Financial Services business can benefit from increasing capital-market activity and financialIzation of savings, while market volatility makes disciplined portfolio management important. Infrastructure Advisory can benefit from Indias continuing investment-led growth and expansion of public infrastructure. The NBFC business can participate in the continuing demand for credit, subject to prudent underwriting and funding discipline. The Groups Green Fuel business is aligned with the broader global and domestic movement towards energy security, renewable energy and lower-carbon fuels.

Indian Economy

India remained one of the worlds major high-growth economies during FY 2025-26, supported by resilient domestic consumption, public investment, infrastructure development, increasing formalisation of economic activity and rapid digital adaption. The Economic Survey 2025-26 continues to identify the state of the economy, fiscal consolidation, monetary management and financial intermediation, the external sector and inflation as important pillars of Indias economic framework.

The Indian economy has increasingly demonstrated the ability to combine relatively strong domestic demand with macroeconomic stability. Household consumption, investment activity and government capital expenditure remain important contributors to economic momentum. Public investment in roads, railways, logistics, urban infrastructure, energy and other strategic sectors is also creating multiplier effects across construction, engineering, financial services and allied industries.

Domestic Consumption and Investment

Private consumption remains an important foundation of Indias growth story. Rising formal employment, increasing financial inclusion, expanding digital payments and greater access to financial products are gradually broadening the formal economic base.

At the same time, investment continues to be an important driver of the economic cycle. Government capital expenditure has supported the development of transportation networks, logistics infrastructure, energy systems and urban infrastructure. This investment-led growth creates opportunities not only for construction and engineering companies but also for financial institutions, project advisers, consultants and capital-market intermediaries.

For Avonmore, this has direct relevance to the Infrastructure Advisory business. The continuing requirement for feasibility studies, Detailed Project Reports, technical consultancy, engineering and project-management services provides a structural opportunity for the Groups infrastructure platform.

Inflation and Monetary Environment

Inflation has become more manageable compared with the elevated levels witnessed during the global inflationary cycle. The moderation in inflation provides greater flexibility to monetary authorities while simultaneously supposing household purchasing power and business confidence.

The Reserve Bank of India continues to balance growth considerations with the objective of maintaining price and financial stability. As of July 2026, the RBIs policy repo rate stood at 5.25%, with the Standing Deposit Facility rate at 5.00% and the Marginal Standing Facility rate at 5.50%.

The monetary environment is particularly relevant to NBFCs because interest rates influence both the cost of funding and the demand for credit. A more benign interest-rate environment can support credit demand and improve financing conditions, although the benefits depend on the Companys funding profile, asset pricing and competitive conditions.

For Avonmores NBFC activities, the approach therefore remains focused on risk-adjusted lending rather than volume- led expansion. The Company intends to evaluate lending opportunities where borrower quality, repayment capacity, pricing and funding economics provide an appropriate risk- return balance.

Banking, NBFCs and Financial Intermediation

Indias financial system has undergone significant structural development over the past decade. Banking penetration, digital payments, credit-bureau coverage, formalisation of businesses and financial inclusion have expanded considerably. The NBFC sector continues to complement banks by serving specialised customer segments and providing differentiated credit and financial solutions.

The regulatory framework for NBFCs has also evolved towards stronger governance, risk management, customer protection, reporting standards and capita! discipline. This is encouraging the sector to focus increasingly on sustainable business models, sound underwriting and responsible customer engagement.

The RBIs regulatory focus on financial stability and regulated- entity governance remains important for the Companys NBFC business. The RBIs current framework also places continuing emphasis on financial-sector resilience and the quality of financial intermediation.

For Avonmore, the development ot Indias financial ecosystem creates opportunities across NBFC activities, wealth management, broking, merchant banking, corporate advisory and capital-market operations. Increasing financialization of savings and greater participation by retail and institutional investors can support long-term demand for financial products and advisory services.

Capital Markets and Financialization of Savings

Indias capital markets have become an increasingly important channel for household savings and corporate fund raising. Growing demat penetration, digital investment platforms, mutual funds, systematic investment products and broader financial awareness have increased retail participation.

For companies, the development of capital markets provides multiple avenues for raising equity and debt, undertaking strategic transactions and accessing institutional capital. This creates a supportive environment for financial-services businesses offering investment banking, merchant banking, broking, wealth management and corporate advisory services.

The Companys Financial Services vertical is positioned to participate in this structural development by combining advisory, market-intermediation and relationship-led capabilities.

Infrastructure-Led Growth

infrastructure development remains one of the central pillars of Indias economic strategy. Investments in highways, railways, border infrastructure, logistics, urban infrastructure, renewable energy and related sectors are creating a sustained pipeline of technical and advisory requirements.

The opportunity is not limited to construction expenditure. Infrastructure projects require feasibility assessments, traffic studies, geotechnical investigations, engineering design, Detailed Project Reports, project management, financial structuring and other specialised consulting services.

This environment is particularly relevant to Avonmores Infrastructure Advisory business, which ended FY26 with higher order book ever. The Groups acquisition of Excelling Geo-Engineering Consultant Private Limited has also strengthened its technical capabilities in geotechnical investigation and design.

Accordingly, the continuing public and private investment cycle provides a favourable structural environment tor the Groups Infrastructure Advisory vertical.

Energy Transition, Ethanol and Green Fuel

Indias economic growth is occurring alongside an increasing emphasis on energy security and diversification of the countrys energy mix. The Governments ethanol-blending programme and wider biofuel initiatives have created a growing domestic market for ethanol.

This creates a long-term opportunity for businesses with efficient and scalable ethanol-production capabilities. The Groups Green Fuel initiative through Premier Green innovations Private Limited is aligned with this structural theme.

The commissioning of the Groups 200 KLPD ethanol facility in Odisha and commencement of commercial production in June 2026 provides a platform to participate in Indias expanding ethanol ecosystem. The business also has opportunities to improve overall economics through efficient feedstock utilisation and value-added co-products.

Digitalisation and Formalisation

Digital public infrastructure continues to transform the way businesses and consumers interact with financial institutions. Digital payments, electronic KYC, credit information, online investment platforms and data-driven underwriting are increasing efficiency and reducing transaction friction.

For financial-services businesses, this creates opportunities to improve customer acquisition, turnaround time, service delivery and risk monitoring. For NBFCs in particular, technology can support more efficient underwriting and portfolio monitoring when combined with appropriate governance and data-quality controls.

Avonmores diversified Financial Services and NBFC activities can therefore benefit from the continuing formalisation and digitalisation of Indias financial ecosystem.

External Sector and Currency

Indias external sector remains supported by a diversified services export base, remittances and increasing integration with global trade and investment flows. At the same time, movements in crude oil prices, global interest rates and foreign portfolio flows can influence the Indian rupee and domestic liquidity conditions.

The external environment is therefore an important consideration for businesses exposed to imported inputs, foreign capital markets or globally traded commodities. For Avonmore, the principal implications arise through financial- market conditions, interest rates, investor sentiment and the broader investment cycle rather than through direct dependence on export revenues.

Overall Economic Outlook for India

The medium-term outlook for India remains constructive. The countrys large domestic market, demographic profile, improving physical and digital infrastructure, formalisation of the economy and continuing investment cycle provide a broad foundation for sustained economic expansion.

The principal opportunity for the coming years is to convert this growth potential into productivity-enhancing investment, deeper financial inclusion, stronger capital formation and higher-value economic activity. At the same time, continued attention to inflation, financial stability, external risks and regulatory discipline will remain important.

For Avonmore, the Indian macroeconomic environment provides a favourable backdrop for its diversified business model. Financial Services can participate in the continuing deepening of capital markets; the NBFC business can selectively address credit opportunities; Infrastructure Advisory can benefit from the countrys infrastructure investment cycle; and Green Fuel is aligned with Indias energy-security and clean-energy transition priorities.

Management believes that the combination of Indias domestic growth momentum and these structural sectoral opportunities provides a supportive platform for the Groups medium- to long-term development. The Companys strategy will remain focused on disciplined execution, prudent capital allocation, risk-adjusted growth and strengthening the operating capabilities of each business vertical.

3. About the Company

Avonmore Capital & Management Services Limited ("the Company" / "ACMSL") is a listed, diversified financial services holding company, registered as a Non-Systemically Important, Non-Deposit-Taking Non-Banking Financial Company (NBFC- ND). The Company, together with its subsidiaries, associates and joint ventures, operates across four principal business verticals: (i) Financial Services (wealth advisory, broking, corporate advisory, merchant banking, and debt & equity market operations); (ii) Green Fuel Business, carried out through its joint venture, Premier Green Innovations Private Limited (PGIPL); (iii) infrastructure Advisory Business, carried out through Almondz Global Infra Consultant Limited (AGICL) and its group entities: and (iv) NBFC Activities.

4. Business Segment Review — FY 2025-26 Financial Services

The Financial Services segment - comprising wealth advisory, broking, corporate advisory, merchant banking and debt & equity market operations, carried out inter alia through the Companys broking subsidiary with its wide network of registered sub-brokers — delivered a mixed performance during the year. While earlier quarters benefited from buoyant capital-market activity, the fourth quarter was impacted by mark-to-market losses on the Companys debt and equity book amid market volatility, resulting in a segment loss for the quarter. Management has indicated that a substantial part of this mark-to-market impact reversed in the first quarter of FY27, supported by improving market sentiment.

Green Fuel Business

The Companys green-fuel exposure is held through its joint venture, Premier Green Innovations Private Limited (PGIPL), in which the Company holds an effective economic interest through direct and indirect stakes. PGIPLs Odisha distillery project achieved completion of construction, installation and commissioning during the year, and the facility subsequently commenced commercial production of ethanol (200 KLPD capacity) in June 2026, coinciding with continued expansion of the Governments ethanol-blending programme. Full-scale commercial operations remain contingent on finalisation of offtake/procurement arrangements with Oil Marketing Companies. PGIPL reported improved profitability during the year, aided by softening raw-material prices and better DDGS recovery.

Infrastructure Advisory Business

The Infrastructure Advisory Business, carried out through Almondz Global Infra Consultant Limited (AGICL) and group entities, was the most consistent contributor to growth during the year, supported by an expanding order book. The segment closed FY26 with highest order book ever, and management has guided towards revenue and profitability growth of approximately 18-20% going forward, driven by new DPR, feasibility study and EPC-advisory mandates, including assignments for national and border-road infrastructure agencies. During the year, the Company also completed the acquisition of Excelling Geo-Engineering Consultant Private Limited, strengthening the groups technical capabilities in geotechnical investigation and design.

NBFC Activities

The Companys own NBFC lending book remains a modest contributor to overall revenue and profitability at the current stage, reflecting a calibrated approach to balance-sheet growth. Performance in this segment was comparatively subdued during the fourth quarter, and management continues to evaluate opportunities for measured, risk-calibrated expansion of this business as part of the Companys broader financial-services strategy.

Financial Performance

Your Company has prepared the Financial Statements for the financial year ended March 31,2026 in terms of Sections 129, 133 and Schedule III to the Companies Act, 2013 (as amended) (the "Act") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The total income of your Company on standalone basis was Rs. 1079.82 lakhs as compared to Rs. 2450.85 lakhs for the previous financial year 2024-2025. Profit before tax (PBT) was Rs. 114.08 Lakhs as compared to Rs. 1612.36 Lakhs in the previous financial year 2024-2025. The Companys consolidated total income for the financial year 2025- 26 was Rs. 2450.85 Lakhs as compared to Rs. 18,156.42 Lakhs in the previous financial year 2024-25. Consolidated Profit before tax (PBT) was Rs. 1612.36 Lakhs as compared to Rs. 4,499.86 Lakhs in the previous financial year 2024-25.

Segment-wise performance

	Debt and equity market	Infra Activities - Consultancy and advisory fee	Corporate Activities - Consultancy and advisory fee	Wealth Advisory / Broking activities	Finance activities
- Segment revenue	1,238.00	12,269.90	3,202,10	1,285.00	1,008.00
Revenue from external customers	1,238.00	12,269.90	3,202.10	1,285.00	1,008.00
Segment profit before tax	(1,013)	987.24	1,295	87	512
Segment assets	8,960.00	10,465.70	168.30	4,125.00	9,604.00
Segment liabilities	18.00	4,154.95	64.05	2,029.00	318.00

a) Debt and equity market operations comprises dealing/ trading in securities and bonds which involves exposure to market risk.

b) Consultancy and advisory fees comprises merchant banking, underwriting commission, corporate and infrastructure advisory and loan syndication fees and arranger of debts/bonds, etc. These are mainly in the nature of services involving no or negligible risk. Infrastructure advisory comprises advisory services in relation to infrastructure projects mainly in the nature of services involving no or negligible risk.

c) Wealth / Broking activities comprises commodity broking on various commodity exchanges in the country, stock and share broking on National Stock Exchange of India Limited and Bombay Stock Exchange Limited and other related ancillary services and comprises broking and commission of mutual funds, equity initial public offerings, capital gain bonds, fixed deposits of government undertakings and RBI taxable bonds, etc. These are mainly in the nature of services involving no or negligible risk and Real Estate broking activities.

d) Finance activities comprises granting of loans.

6. Opportunities and Threats

Opportunities

i. Sustained government capital expenditure on national and border-road infrastructure supports a growing addressable market for the Infrastructure Advisory Business.

ii. Expansion of Indias ethanol-blending programme and the commissioning of the Odisha facility position the Green Fuel Business for scaling, subject to finalisation of OMC offtake arrangements.

iii. Continued formalisation of the economy, deepening capital markets, and rising retail participation support medium-term growth in the Financial Services and NBFC segments.

I. Threats

i. Capital-market volatility exposes the Financial Services segments debt & equity operations to mark-to-market risk, as evidenced in Q4 FY26.

ii. Delays in finalisation of OMC procurement tenders could defer full-scale commercialisation of the Green Fuel Business.

iii. Execution risk on infrastructure advisory mandates, including timelines, scope changes and payment cycles with government clients, remains a segment-specific risk.

iv. Geopolitical developments affecting energy prices and global growth could have second-order effects on domestic credit and capital-market conditions.

7. Risks and Concerns

The Companys diversified business model exposes it to segment-specific risks, including market risk in its debt & equity operations, project execution and receivables risk in infrastructure advisory, commissioning and offtake risk in the green-fuel business, and credit risk in its NBFC lending book. The Company seeks to manage these risks through segment- level monitoring, conservative balance-sheet management (reflected in its low leverage), and diversification of revenue across its four business verticals. Concentration in a small number of large infrastructure-advisory clients, including government and quasi-government agencies, and dependence on regulatory/policy timelines (such as OMC tender cycles) remain areas that the Company continues to actively manage.

8. Internal Control Systems and Their Adequacy

The Company has in place internal control systems commensurate with the size and nature of its business and its subsidiaries, designed to ensure the accuracy and reliability of financial reporting, compliance with applicable laws and regulations, and safeguarding of assets. These systems are reviewed periodically by the internal audit function and the Audit Committee of the Board, and are supplemented by statutory and secretarial audits carried out in accordance with applicable requirements under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

9. Human Resources

The Company maintains a lean corporate structure at the holding-company level, with operations across the Financial Services, Infrastructure Advisory, Green Fuel and NBFC segments carried out substantially through its subsidiaries, associates and joint ventures, each of which maintains its own operating and technical teams appropriate to its business. The Company continues to focus on strengthening technical and professional talent across its group entities, including through the acquisition of specialised teams such as Excelling Geo-Engineering Consultant Private Limited during the year,

10. Outlook

Looking ahead to FY27, the Company expects the Infrastructure Advisory Business to remain the primary growth driver, supported by its highest ever order book and continuing government infrastructure spend, with management guiding towards 18-20% growth in this segment. The Green Fuel Business is expected to move towards fuller utilisation as commercial production ramps up and OMC procurement arrangements are finalised. The Financial Services segment has already shown signs of recovery in Q1 FY27, with mark- to-market losses from the previous quarter substantially reversing amid improved market sentiment. The planned amalgamation of four wholly-owned subsidiaries is expected to simplify the Companys corporate structure and improve operating efficiency over time. While the Companys overall outlook remains constructive, performance will remain sensitive to capital-market conditions, execution timelines on infrastructure and green-fuel projects, and the broader macroeconomic and geopolitical environment, including developments in West Asia and their Impact on energy prices.

11. Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or outlook may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied in such statements due to various factors, including but not limited to changes in government regulations, tax regimes, economic and political conditions, capital-market volatility, and other incidental factors, both in India and overseas. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.