Bharat Bhushan Finance & Commodity Brokers Ltd Management Discussions

A. ECONOMIC OVERVIEW

1. Global Economy

The global economy in FY 2025 is projected to experience modest growth, with the International Monetary Fund (IMF) forecasting a real GDP expansion of 3.2%. This outlook reflects a balance between persistent challenges, such as elevated inflation, geopolitical tensions, and trade uncertainties, and the resilience demonstrated by major economies. Notably, the United States continues to lead in economic performance, while the Eurozone and the United Kingdom face headwinds from high interest rates and subdued consumer sentiment.

2. Domestic Economy

Indias economic outlook for FY 2025 remains strong, with growth projections ranging from 6.5% to 7.00%, as estimated by key institutions such as the IMF and World Bank. These consistent forecasts reflect confidence in Indias robust domestic demand, infrastructure investment, and policy stability.

However, despite this positive trend, the Indian capital markets have shown signs of volatility. This is largely due to global economic uncertainties, geopolitical tensions, and fluctuating foreign investment flows. While the broader economy remains resilient, such external pressures have led to cautious investor stock indices, and increased market sensitivity to global events. Going forward, a stable macroeconomic environment combined with structural reforms can help sustain investor confidence and market performance.

B. INDUSTRY STRUCTURE AND DEVELOPMENTS - CAPITAL MARKET

The Indian capital market experienced a significant correction in the latter part of FY 2024-25. The First half of the year saw a rapid upowing in the share markets which hits life time high with nifty closing at 26216 on September 2016, However this Momentum could not be sustained and the market started declining since October 2025, in fact from October 2025 til January 2025 the share Market continued to decline Thus Nifty had 5 consecutive negative months.this was last witnessed in 1996 which was 29 year earlier .fortunately in March 2025 the market came out of this continuous falling trend.

Key Reasons for Downturn in share market It began quietly, with quarterly earnings from marquee companies falling short of expectations. Mid- and small-cap stocks, which had been riding a wave of optimism, suddenly looked overvalued. Then came a string of heavy foreign institutional investor (FII) outflows—over ?4 lakh crore exited Indian equities—as global funds shifted focus to Chinas newly announced stimulus and more attractive valuations abroad.

By November, concerns deepened with rising U.S. bond yields, making American assets more appealing and drawing capital away from emerging markets like India. Trade tensions flared up in January 2025 when the U.S. announced sweeping tariffs, sending shockwaves through global markets and impacting export-linked Indian sectors. At home, inflation was creeping up, the rupee was weakening, and geopolitical tensions with Pakistan stirred fresh anxiety.

Panic slowly replaced confidence. Margin calls hit retail investors. Sentiment broke. What started as a valuation correction turned into a broad-based sell-off. But beneath the turbulence, Indias fundamentals remained intact. While this phase shook even seasoned investors, it also reminded markets that corrections are not collapses—theyre pauses, resets, and sometimes, necessary reality checks.

IPO & Mutual Fund Activity:

While the first half of FY25 saw vibrant IPO activity and strong mutual fund inflows, momentum slowed in the second half. Uncertainty from geopolitical developments and broader market correction led to reduced retail participation in new fund offers and a decline in systematic investment plans.

A. FINANCIAL PERFORMANCE

In the current year the Company has incurred a small loss of Rs. 19.85 lakhs . This loss is largely on account of the continuous fall in share market for five months in a row from October 2024 to February 2025, However recovery in share market has commenced from March 2025. We are reasonably confident that this is a one off event and the company will report profits for FY 2025-26

B. SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company is engaged primarily in the business of investment and accordingly there are no separate reportable segments.

C. FUTURE PROSPECTS AND OUTLOOK

The outlook for Indian equity markets in FY 2025-26 carries a sense of cautious optimism. The economy is on a steady growth path, corporate earnings are picking up, and key sectors like banking, healthcare, and infrastructure are showing promise. At the same time, high valuations, global uncertainties, and fickle foreign flows remind us not to get carried away. Investors may need to tread carefully, focusing on quality and fundamentals rather than chasing momentum. While the road ahead may be uneven, the long-term story for India remains strong—this could be a year for selective, patient investing.

D. OPPORTUNITIES & THREATS Opportunities:

• Indias Growth Rate

• Financial Inclusion

• Increased retail participation in capital markets

• Announcement of Right Issue, Bonus issue and merger & Acquisitions

Threats

• Continuing war between Russia & Ukrain and India & Pakistan

• Inflationary pressures and economic slowdown

• Fiscal deficit and current account deficit

• Propectionist policies by developed economies.

E. RISK MANAGEMENT

Risk Management is an on-going process. Effective risk management is therefore critical to any organizational success. Globalization with increasing integration of markets, newer and more complex products and transactions and an increasingly stringent regulatory framework has exposed organizations to and integrated approach to risk management. Timely and effective risk management is of prime importance to our continued success. The sustainability of the business is derived from the following:

a) Identification of the diverse risks faced by the Company.

b) The evolution of appropriate systems and processes to measure and monitor them.

c) Risk Management through appropriate mitigation strategies within the policy framework.

d) Reporting these risk mitigation results to the appropriate managerial levels.

There is the risk of loss from credit defaults or failed systems, processes or procedures. These may be attributed to human failure or technical problems given the increase use of technology and staff turnover. Our Company has placed suitable mechanisms to effectively reduce such risks. All these risks are continuously analysed and reviewed at various levels of management.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has robust internal controls systems (including Internal Financial Controls) that ensure that transactions are properly authorised, recorded and reported, apart from safeguarding its assets and timely preparation of reliable financial and management information. The internal control system ensures compliance with all applicable laws and regulations facilitates optimum utilization of resources and protect the Companys assets and investors interests.

The Companys documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources.

The Company has a vigil mechanism/ whistle blower policy to address fraud risk. The Audit Committee of the Board regularly reviews significant audit findings of the Internal Audit system covering operational, financial and other areas.

G. HUMAN RESOURCES

The Company continues to give priority to its human assets. The Company is also continuously working to create and nurture an atmosphere which is highly motivated and result oriented.

CAUTIONARY STATEMENT

The statement in the Management Discussion & Analysis describing the Companys objectives, projections, estimate, expectations are ‘forwardlooking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include economic conditions affecting demand/supply and price movements in the domestic and overseas share markets in which the Company invests, changes in the government regulations, tax, corporate and other laws.