CARE Ratings Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

In 2025, the global economy remained resilient amid heightened geopolitical uncertainties and greater trade-policy fragmentation. The IMF estimates that global GDP rose by 3.4% in 2025, supported by technology-related investment and generally supportive financial conditions, even as growth was lower than the pre pandemic (2000-2019) average. Global Inflation continued to ease from 5.8% in 2024 to 4.1% in 2025, but progress was uneven across countries.

Global uncertainties were further aggravated in 2026 with the outbreak of the conflict in West Asia.

With energy supply chains disrupted and prices rising sharply, the IMF has forecast a cooling of global momentum. Global growth is projected at 3.1% in 2026, while global headline inflation is expected to rise to 4.4% in 2026, reflecting the supply shock.

The outlook is highly uncertain and skewed to the downside. Key risks include a longer or broader conflict that would keep energy and shipping costs high and reaccelerate inflation; renewed tightening of financial conditions; intensifying geopolitical fragmentation and trade restrictions; and high public debt that could limit the ability to cushion shocks.

Source: World Economic Outlook, April 2026, IMF, E-Estimated; P - Projected

https://www.imf.org/en/publications/weo/issues/2026/04/14/world-economic-outlook-april-2026

INDIAS ECONOMIC PERFORMANCE IN FY 2025-26 AND OUTLOOK FOR FY 2026-27

The global economy presented a challenging landscape in FY 2025-26 amid continued tariff-related uncertainties and geopolitical tensions. Despite global turbulence, the domestic economy stayed on a relatively resilient footing, supported by several policy measures such as GST rate rationalisation, income tax reductions and policy rate cuts by the RBI. As a result, the real GDP growth was estimated at 7.6% in FY 2025-26, compared to 7.1% in FY 2024-25. Supported by policy measures aimed at boosting demand, private consumption growth was estimated at 7.7% in FY 2025-26, up from 5.8% in FY 2024-25. Furthermore, fixed investment growth was estimated at 7.1% in FY 2025-26, accelerating from 6.4% in FY 2024-25, buoyed by the governments continued

thrust on capex-led growth. Price pressures in the economy eased, with CPI inflation averaging at 2.1% in FY 2025-26 compared to 4.6% in FY25. Overall, the favourable growth-inflation dynamics boded well for the economy despite persistent external headwinds.

Fund-raising activity showed mixed trends in FY 2025-26, with corporate bond issuances declining by 3.2% while commercial paper issuances rose by 7.2%. Supported by healthy demand conditions and monetary easing, growth in bank credit offtake accelerated to 16.1% in FY 2025-26 compared to 11% growth in the previous year. Industrial credit growth improved to 15% in FY 2025-26 (Vs 8.2% growth last year). Importantly, credit to large industries grew by 8.9% from 6.9% last year. Bank credit offtake of the

services sector stood at 19% in FY 2025-26 as against 12% growth in the previous year. The rising yields on corporate bonds have likely incentivised large industries to prefer bank credit as a source of funding.

While the domestic economy remained steady, pressures on the external sector intensified. The main drag came from the imposition of US tariffs of 50% on Indian exports. The interim trade agreement announced in February 2026 provided some relief, although uncertainty remains. Furthermore, India also advanced its attempts to deepen its global trade ties with the announcement of trade agreements with the EU, the UK, Oman and New Zealand. While merchandise exports remained under pressure, encouraging services trade offered some support to Indias current account position. On the capital flows front, while gross FDI inflows remained healthy, higher repatriation and outward FDI weighed on the net FDI inflows. Furthermore, volatile portfolio flows also added pressure to the capital account. These factors, along with geopolitical uncertainty stemming from West Asia, led to a depreciation of over 10% in the rupee during FY 2025-26.

To summarise, the domestic economy remained on a resilient footing despite the global turbulence. Continued policy support, a benign inflationary scenario and improving demand conditions were supportive of the domestic economic momentum. However, the external position came under pressure amid US tariff concerns and the West Asia crisis. Looking ahead, the impact of hostilities in West Asia on Indias macro fundamentals will warrant close monitoring in FY 2026-27.

COMPANY OVERVIEW

CARE Ratings Ltd (CareEdge Ratings or the Company) holds the prominent position in the financial landscape of the country as Indias second-largest credit rating agency, having established a reliable presence across multiple sectors since its founding in 1993. Over its more than three-decade history, the Company has earned considerable trust within the credit rating industry, underpinned by deep sectoral knowledge and a rigorous analytical approach. Its ratings serve as a key reference point for lenders and investors evaluating creditworthiness.

Beyond core credit ratings, CareEdge Ratings has broadened its offerings to include ESG ratings, research, risk assessment, and advisory services. The Company caters to a wide range of clients spanning manufacturing, infrastructure, banking, and financial services, both domestically and internationally. Committed to transparency and sustainable growth, CareEdge Ratings positions itself as a knowledge-driven organisation, regularly publishing data-backed insights on the Indian and global economy alongside industry research. In doing so, it continues to contribute meaningfully to building market confidence and advancing Indias broader financial ecosystem.

BUSINESS OVERVIEW OF FY 2026

FY 2026 presented a demanding operating environment, shaped by elevated geopolitical uncertainty, evolving trade dynamics and heightened credit risk across several market segments. Against this backdrop, the Company delivered a measured and disciplined performance - one that reflected not only operational resilience but also the enduring strength of its foundational business model. This performance was supported by the strong quality of ratings from the CDR perspective, reinforcing the Companys reputation for analytical rigour, consistency, and credibility.

Simultaneously, it continued to deepen its presence in the securitisation segment, where rigorous credit assessment and structured finance expertise remain critical differentiators. These outcomes were not incidental; they reflect a deliberate, quality-led growth philosophy that prioritises analytical integrity and long-term credibility over short-term volume.

It is worth noting that market volatility, while disruptive for many participants, often validates the essential role of independent credit assessment. The Companys ability to maintain analytical consistency and rating quality through a period of stress further affirmed its position as a trusted partner across the credit ecosystem.

CareEdge Group enters FY 2026-27 with a well-capitalised balance sheet, experienced leadership and a governance framework aligned with evolving best practices. The strategic clarity demonstrated during FY FY 2025-26 - in both domestic operations and the Groups broader global ambitions - establishes a firm foundation for sustained value creation in the years ahead.

BUSINESS PERFORMANCE OF FY 2026

The Ratings business delivered robust performance, supported by deep business outreach, quality of ratings as reflected by low investment-grade defaults, and strong governance standards. Investments in technology continued to enhance operational excellence, including the successful rollout of an end-to-end CRM platform, progress on the next-generation ratings system, and expanded use of AI and machine learning tools to improve efficiency, transparency and analytical depth.

Subsidiaries recorded encouraging progress. CareEdge Africa and CareEdge Nepal delivered strong revenue growth, while CareEdge Analytics and Advisory expanded its presence across analytics, advisory, ESG, valuation and grading services. CareEdge ESG consolidated its leadership in Indias ESG ratings market. CareEdge Global completed its first full year of operations, achieved key regulatory milestones and expanded global sovereign and credit coverage. With the publication of its 45 th sovereign rating, CareEdge Global has emerged as the worlds fourth-largest sovereign rating agency in terms of countries coverage.

RATINGS VERTICAL PERFORMANCE

FY 2025-26 proved to be a challenging year for credit risk, driven largely by external disruptions. In the latter half, Indian corporates faced significant strain from steep US tariffs, while the intensification of the West Asia conflict weighed heavily on oil and gas-linked industries.

The Company closely monitored these developments and responded with timely rating actions to capture the rising risk environment. Consequently, the credit ratio (upgrades to downgrades) eased to 1.93x in H2 FY 2025-26, compared with 2.56x in H1 FY 2025-26. Despite this moderation, the Companys performance - measured by the minimal defaults within investment-grade categories - remained best-inclass, underscoring its strong analytical depth and responsiveness.

Operational excellence was supported by technology and automation, with dedicated initiatives to embed artificial intelligence (AI) and machine learning (ML) into workflows, driving greater precision and efficiency. Even amid global economic headwinds, the team remains confident it can sustain high performance through robust processes, deeper investor engagement, and continuous innovation.

BRAND VISIBILITY AND ENGAGEMENT

During FY 2025-26, the Company strengthened its branding and visibility initiatives, resulting in an enhanced share of voice across key channels. Brand positioning was reinforced through structured outreach efforts, including speaker engagements, knowledge-sharing forums, roundtables, and industry conferences. Focussed, high-quality engagement and deeper media outreach enabled consistent articulation of the Companys perspectives, further strengthening its credibility and positioning as a thought leader. As a result of this strategy, the Company featured in ~ 9,500 media mentions.

During the year, the Company continued to build its thought-leadership platform through InsightEdge, a podcast series that brings together leading voices from corporate finance, banking, economics, and public policy.

The Companys flagship initiatives, CareEdge Conversations and CareEdge Dialogue, featured senior industry leaders and subject-matter experts, deepening engagement with key stakeholders. In addition, new formats such as focussed roundtables, Charcha, witnessed encouraging participation and further enhanced stakeholder interaction.

The Companys knowledge partnerships with leading institutions - including ET MSME Awards, Institutional Investor Advisory Services, MSME Banking Excellence Awards by the Chamber of Indian Micro,

Small & Medium Enterprises, Indian Federation of Green Energy, Assocham, Global Real Estate Brand Awards, AIBI, Ministry of Power, ET Edge, Free Press Journal, and Business Today - further amplified its visibility and influence.

Digital channels played a pivotal role in expanding the Companys reach and strengthening stakeholder engagement. The Companys social media platforms recorded strong traction, with LinkedIn and X generating over 2 million and 7 million impressions, respectively. In parallel, investor relations initiatives continued to deepen engagement with the financial community, supporting transparent communication and informed stakeholder interactions.

During FY 2025-26, the Company hosted 31 webinars, including four global sessions, as part of its structured thought-leadership and stakeholder engagement initiatives. These forums facilitated the dissemination of industry insights, credit perspectives, global developments, and forward-looking assessments across key sectors. Senior leadership participated in approximately 315 industry, media, and knowledge-sharing forums during the year, contributing to industry dialogue and the development of knowledge papers, thematic research reports, and regular sector-specific updates.

EMPHASIS ON TRANSFORMATION The Companys growth strategy continues to be anchored on four pillars: quality-led growth, technology enablement, people capability and market outreach.

Quality-led growth: The Company has consistently delivered strong rating performance and continues to expand coverage of high-quality clients. The Companys rating performance, as measured by the number of investment-grade defaults during the year, remains industry-leading. It reflects the strong analytical capability and timeliness of our rating actions.

Technology: During FY 2025-26, the business teams transitioned to a digitally-enabled client lifecycle by implementing an end-to-end Customer Relationship Management (CRM) platform. The CRM supports the full business lifecycle from origination to engagement management and is integrated with internal applications to enable seamless data flow. The implementation has improved turnaround times, operational efficiency, process discipline and pipeline visibility, and is expected to strengthen sales intelligence and strategic planning over the medium term.

People: An industry-focussed structure across teams has enabled more efficient resource deployment and supported sustained growth in new business acquisitions during FY 2025-26. This has also helped in sharpening sectoral insights and impactful analysis to help decision-making.

Market outreach: During FY 2025-26, the Company continued to strengthen its outreach, with an emphasis on structured, high-quality engagements. Several industry-focussed discussions, such as CareEdge Conversations, CareEdge Dialogue & CareEdge Charcha, were organised. These forums facilitated constructive dialogue among issuers, investors, intermediaries, and policy stakeholders on sector trends, credit dynamics, and emerging risk considerations.

The initiatives undertaken in the previous year translated into measurable progress during FY 2025-26. Actions related to technology adoption, talent development, and brand strengthening contributed to improved agility, operational efficiency, and organisational resilience. These efforts supported the Companys market positioning and reaffirmed its focus on disciplined execution and long-term value creation within the financial services ecosystem.

Going forward, the Company will continue to build on this foundation with a sustained focus on innovation, service quality enhancement and scalable growth. The Company remains committed to responding effectively to evolving client and stakeholder requirements while operating in a dynamic external environment.

SUBSIDIARIES

CARE Ratings (Africa) Private Limited (CareEdge Africa)

In its endeavour to support the development of local currency capital markets within the African Union, the CareEdge Group established the first credit rating agency in Mauritius, CARE Ratings (Africa) Private Limited (CareEdge Africa), in 2014. The entity is licensed by the Financial Services Commission of Mauritius and the Capital Markets Authority of Kenya. In FY 2025-26, CareEdge Africa further expanded its footprint by securing approval from the Capital Markets and Securities Authority in Tanzania to undertake credit rating activities. CareEdge Africa is also recognised by the Bank of Mauritius as an External Credit Assessment Institution (ECAI).

CareEdge Africas shareholders include CARE Ratings, African Development Bank, MCB Equity Fund, and SBM (NFC) Holdings Limited. It has also established a wholly-owned subsidiary, CARE Ratings South Africa (Pty) Limited, in South Africa. In October 2024, CARE Ratings South Africa (Pty) Limited received its credit rating agency licence from the Financial Sector Conduct Authority, the capital markets regulator of South Africa, enabling it to issue credit ratings across corporate bonds, sovereign entities, financial institutions, structured finance instruments, and green and sustainability-linked bonds.

Over a span of 10 years, CareEdge Africa has contributed meaningfully to the development of the debt market and banking sector in Mauritius, bringing about a perceptible qualitative transformation. It continues

to work closely with regulators and stakeholders to enhance awareness and understanding of credit ratings among lenders, investors, and issuers, while reinforcing the value proposition of independent credit assessment. Leveraging high-quality research and insights from its parents operations in India - one of the worlds largest credit rating markets - CareEdge Africa has also supported policy development for the debt market. Over the past decade, CareEdge Africa has assigned ratings to more than 100 prominent private and public sector institutions across Mauritius and South Africa.

CareEdge Africa sustained its strong performance during FY 2025-26. During the year, it assigned ratings to bank facilities and bond issuances aggregating to USD 4 billion, compared with USD 3 billion in FY 2024-25, reflecting a 30% increase in rated debt volumes year-on-year.

In FY 2025-26, in addition to rating bonds and bank facilities, CareEdge Africa achieved a significant milestone by rating the first sustainability-linked local-currency bond issued by a leading Mauritian conglomerate, with participation from a reputed development finance institution based in the United Kingdom.

CARE Ratings Nepal Limited (CareEdge Nepal)

In FY 2025-26, CareEdge Nepal continued to strengthen its market presence through active stakeholder engagement, knowledge-sharing initiatives, and strategic industry participation. CareEdge Nepal worked closely with regulators, financial institutions, and international stakeholders, and conducted multiple sessions on credit ratings, banking performance, hydropower, and the Nepalese economy.

A key highlight of the year was the successful co-organisation of the National Level Capital Market Quiz 2026 under Global Money Week, which promoted financial literacy and strengthened collaboration between academia and industry. Internally, the Company focussed on team development, employee engagement, and organisational alignment through various initiatives.

Despite challenges posed by the turbulent events during the Gen Z protest in September 2025 and the national elections in March 2026, CareEdge Nepal successfully achieved its targets. It maintained its number one position in the credit rating market.

Looking ahead, CareEdge Nepal aims to expand its reach further, strengthen client relationships, and continue investing in its people and capabilities to drive sustainable growth.

CARE Analytics and Advisory Private Limited

CareEdge Analytics

CareEdge Analytics, with over 20 years of domain expertise, has evolved into a FinTech organisation with a strong positioning as a credit technology firm.

CareEdge Analytics specialises in delivering advanced, GenAI-powered risk and compliance solutions to banks and financial institutions through its proprietary AI platform, EdgeAvira.ai.

The EdgeAvira.ai platform is a suite of AI-driven products, including CredEdge (Intelligent Credit Processing), IntellEdge (Intelligent Credit Monitoring), and Kalypto (Regulatory Reporting). CareEdge Analytics offers an end-to-end loan lifecycle management solution that enables the digitisation and automation of the lending process. IntellEdge provides a comprehensive credit monitoring framework that integrates early warning signals, covenant tracking, and stock statement management. Kalypto supports risk and compliance functions by streamlining regulatory reporting and improving overall compliance efficiency.

CareEdge Analytics has successfully deployed its solutions across India, Sri Lanka, and Bhutan, establishing a strong reputation within the banking sector. As a wholly-owned subsidiary of the Company, CareEdge Analytics leverages the parents established expertise and market presence to strengthen its analytics capabilities further and expand its footprint.

With deep domain expertise in credit risk, CareEdge Analytics is well-positioned in the CreditTech space. While continuing to tap into the significant opportunities within the Indian subcontinent, CareEdge Analytics is also expanding its presence in Africa. Backed by a strong focus on innovation and a robust understanding of risk and compliance, CareEdge Analytics remains committed to shaping the future of financial analytics.

CareEdge Advisory

CareEdge Advisory continues to evolve as a knowledge-led platform, enabling clients to make strategic, well-informed decisions through deep sector expertise, rigorous analytics, and integrated advisory solutions. The practice operates across three core areas - Industry Research, Corporate Advisory, and ESG Advisory - offering services such as sector and market research, investment advisory, asset monetisation support, techno-economic viability (TEV) studies, business valuations, analytical assessments, peer benchmarking, grading services, and ESG and sustainability consulting.

Over the years, CareEdge Advisory has developed strong analytical capabilities and domain expertise through diverse engagements spanning infrastructure, energy, manufacturing, financial services, and emerging sectors. This experience enables the delivery of actionable insights supporting capital allocation, strategic planning, sustainability transitions, and long-term value creation.

During the year, the Advisory practice deepened its engagement with corporates, financial institutions, government bodies, and development organisations. ESG and sustainability advisory capabilities were

further strengthened in response to increasing focus on responsible business practices, climate risk management, and sustainability disclosures. With evolving regulatory frameworks, including Business Responsibility and Sustainability Reporting (BRSR) requirements in India, CareEdge Advisory is well-positioned to support organisations in enhancing ESG strategies, reporting, and transition pathways.

The practice also strengthened its thought-leadership and market engagement through sector reports, knowledge publications, expert commentary, and participation in industry forums, reinforcing its position as a credible knowledge partner.

Looking ahead, growth opportunities are expected to be driven by Indias infrastructure expansion, rising capital investments, the Governments long-term vision under Viksit Bharat 2047, and progress towards Net Zero 2070. Increasing emphasis on sustainability integration, climate transition planning, and responsible capital deployment is likely to further drive demand for specialised advisory services.

To capitalise on these opportunities, CareEdge Advisory will continue to invest in talent, enhance its analytics and technology capabilities, deepen its sector expertise, and pursue larger, more complex mandates. It will also focus on expanding its client base, building strategic partnerships, and exploring select international markets where the CareEdge Group has an established presence, while continuing to strengthen thought-leadership through publications, webinars, seminars, and industry engagement.

CARE ESG Ratings Limited (CareEdge ESG)

CareEdge ESG, in FY 2025-26, remained focussed on process stabilisation, the enhancement of review protocols, and the strengthening of internal workflows to support a growing volume of ESG Ratings and SPO engagements. Process automation opportunities were identified and scoped during the year, with implementation planned for FY 2026-27 to improve turnaround times, operational consistency, and long-term scalability, while preserving analytical quality.

The addressable market for ESG ratings remains structurally constrained by the non-mandatory nature of ESG ratings in India. Demand remains concentrated among listed companies, regulated financial institutions, and IPO-bound issuers. However, increasing regulatory emphasis on sustainability disclosures and the expansion of SPO and TPR offerings are creating complementary growth avenues within the broader sustainable finance landscape.

FY 2025-26 marked a decisive acceleration in the CareEdge ESGs thought-leadership and market outreach. The launch of a monthly ESG newsletter, alongside a steady stream of high-impact opinion pieces and thematic insights, deepened engagement across issuers, investors, and market intermediaries.

The articles published received strong traction across media and industry platforms, significantly amplifying the CareEdge ESGs visibility among policymakers, investors, and sustainability practitioners. This was complemented by expanded participation in investor forums, industry bodies, and flagship conferences. Together, these sustained efforts significantly elevated market visibility, reinforced issuer and investor confidence, and firmly positioned the CareEdge ESG as a trusted and influential participant in Indias rapidly evolving ESG and sustainable finance ecosystem.

CareEdge Global IFSC Limited (CareEdge Global)

CareEdge Global represents the CareEdge Groups strategic expansion into global credit assessment, founded on the Groups long-established analytical discipline, research capabilities, and governance standards. During FY 2025-26, CareEdge Global strengthened its position as a provider of global scale ratings for sovereigns, non-sovereign issuers, and debt instruments. CareEdge Global reached significant regulatory and institutional milestones during FY 2025-26.

CareEdge Global is the first global credit rating agency to be licensed by the International Financial Services Centres Authority (IFSCA) and commenced operations in FY 2024-25. During FY 2025-26, CareEdge Global also secured an additional licence from the Authority to provide ESG Ratings and Data Products. CareEdge Global also received accreditation from the Reserve Bank of India, pursuant to the Basel III Capital Regulations, as an External Credit Assessment Institution (ECAI), enabling Indian banks to use its ratings for risk weighting non-resident corporate exposures. Building on this milestone, CareEdge Global has initiated efforts to explore accreditation in select global jurisdictions.

Indias largest bank, State Bank of India, and NSE IX, a 100% subsidiary of the National Stock Exchange of India Limited, announced the acquisition of equity stakes of approximately 10% each in the CareEdge Global, reflecting strong institutional confidence in the companys long-term strategic direction. Furthermore, CareEdge Global strengthened its operational infrastructure during the year by inaugurating a state-of-the-art office in GIFT City.

CareEdge Global continued to scale responsibly from both an analytical and business standpoint. During the year, it expanded its sovereign coverage to 45 countries, representing approximately 85% of global GDP. Within less than two years of operations, CareEdge Global now ranks amongst the top 10 agencies in the world in terms of coverage of sovereigns rated. As of March 31, 2026, CareEdge Globals aggregate rated

debt across corporate, infrastructure, and financial institutions exceeded USD 8 billion, supported by the development of over 10 multi-sector-specific rating criteria. CareEdge Global also secured its maiden global client mandate, along with its first mandates for use of proceeds assessment.

CareEdge Globals sovereign rating outcomes demonstrated ahead-of-the-curve ratings for 18 sovereigns, as reflected in subsequent rating actions by the Big Three global credit rating agencies, which align with our view. Additionally, CareEdge Globals proprietary sovereign rating methodology was independently validated by a reputable academic institution, which concluded that the model is robust and capable of providing timely predictions of credit events.

Market outreach and thought-leadership remained key focus areas throughout the year. CareEdge Global conducted over 200 engagements and participated in more than 20 domestic and international events. A key highlight was the CareEdge Globals flagship event, The Dialogue in New Delhi, which was graced by Shri Piyush Goyal, Honble Minister of Commerce and Industry of India. During FY 2025-26, CareEdge Global published over 30 research reports and hosted four webinars. The launch of its flagship publication, EdgeSphere , has further strengthened the CareEdge Globals research and publication franchise.

Built on the foundational pillars of robust analytical frameworks, strong team and governance, institutional partnerships, and growing market acceptance, CareEdge Global is well-positioned for a stronger year ahead, aligned with the Groups long-term objective of building a resilient and globally relevant risk assessment platform.

To ensure analytical integrity and market trust, CareEdge Global maintains a rigorous governance structure. Its rating processes are overseen by an independent rating committee, comprising experienced international experts in sovereign risk, macroeconomics, capital markets, and credit analysis. Furthermore, CareEdge Global adheres to IFSCA regulatory standards, including norms on Board and committee composition, internal controls, rating governance, and the management of conflicts of interest. During the year, organisational capabilities were further strengthened through team expansion and the commissioning of a new office in GIFT City.

The Board believes that CareEdge Global is aptly positioned to support the CareEdge Groups international strategy, while upholding high standards of analytical rigour, regulatory compliance, and corporate governance.

Financial and Operational Performance

Consolidated Financial Performance

(Rs. in crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Revenue from operations	473.07	402.32	17.59%
Other income	54.81	50.75	8.00%
Total Income (A)	527.89	453.07	16.51%
Expenses
Employee costs	214.67	188.92	13.63%
Depreciation, amortisation & impairment	14.37	11.72	22.61%
Finance costs	2.49	2.11	17.93%
Other costs	61.00	58.05	5.08%
Total Expenses(B)	292.53	260.80	12.16%
Profit Before Tax (A-B)	235.36	192.27	22.41%
Taxes	61.66	52.26	1797%
Profit After Tax	173.70	140.01	24.07%

Consolidated Key Ratios

Details	FY 2025-26	FY 2024-25
Debtors Turnover (in times)	14.10	12.54
Current Ratio (in times)	5.76	7.08
Inventory Turnover	NA	NA
Interest Coverage Ratio	NA	NA
Debt Equity Ratio	NA	NA
Operating Profit Margin (%)	41.73%	38.61%
PAT Margin (%)	32.91%	30.90%
Return on Net worth (%)	18.42%	17.17%

Asset Details

(Rs. in crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Property, plant, equipment, Right to use assets, goodwill & intangibles	169.10	160.34	5.47%
Less: Accumulated depreciation	46.70	41.12	13.58%
Less: Impairment on intangible assets	-	-	N.M.
Net Block	122.40	119.21	2.67%
Depreciation as % Total income	2.72%	2.59%	5.23%
Accumulated depreciation as % gross block	27.62%	25.65%	7.69%

Non-Current & Current Investments

(Rs. in crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Non-Current Investments
Unquoted
Investments in Equity instruments	25.59	25.44	0.57%
Quoted
Investment in Bonds & Debentures	40.75	18.80	116.74%
(A) Total	66.34	44.25	49.94%
Current Investments & Treasury
Quoted
Investment in Mutual Funds & Bonds	20.54	99.09	(79.28%)
Cash and Bank Balances	16.45	20.45	(19.56%)
Fixed Deposits/Liquid funds	812.19	616.64	31.71%
(B) Total	849.18	736.19	15.35%
Grand Total (A) + (B)	915.52	780.43	17.31%

Groups Trade Receivables

(Rs. in crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Ratings & other services (Net)	28.98	23.80	21.77%
Non-Ratings	6.06	8.29	(26.84%)
Total	35.04	32.09	9.18%

Standalone Financial Performance

(Rs. in crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Revenue from operations	387.72	336.68	15.16%
Other income	55.68	51.39	8.35%
Total Income (A)	443.40	388.07	14.26%
Expenses
Employee costs	162.64	146.24	11.22%
Depreciation, amortisation & impairment	9.02	7.94	13.51%
Finance costs	1.59	1.58	0.13%
Other costs	37.69	35.30	6.75%
Total Expenses(B)	210.93	191.06	10.40%
Profit Before Tax (A-B)	232.47	197.01	18.00%
Taxes	58.08	49.02	18.48%
Profit After Tax	174.39	147.99	17.84%

Standalone Key Ratios

Details	FY 2025-26	FY 2024-25
Debtors Turnover (in times)	16.19	14.98
Current Ratio (in times)	6.32	7.75
Inventory Turnover	NA	NA
Interest Coverage Ratio	NA	NA
Debt Equity Ratio	NA	NA
Operating Profit Margin (%)	48.33%	46.08%
PAT Margin (%)	39.33%	38.14%
Return on Net worth (%)	17.73%	17.25%

Asset Details

(Rs. in crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Property, plant, equipment, Right to use assets & intangibles	127.21	127.81	(0.47)%
Less: Accumulated depreciation	35.41	35.00	1.18%
Less: Impairment on intangible assets	-	-	N.M.
Net Block	91.79	92.80	(1.09)%
Depreciation as % Total income	2.03%	2.05%	(0.66)%
Accumulated depreciation as % gross block	27.84%	27.39%	1.65%

Non-Current & Current Investments

(Rs in Crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Non-Current Investments
Unquoted
Investments in Equity instruments	120.57	120.42	0.12%
Investments in Preference Shares	26.50	26.50	N.M.
Quoted
Investment in Bonds	40.70	18.80	116.43%
(A) Total	187.76	165.72	13.30%
Current Investments & Treasury
Quoted
Investment in Bonds & Mutual funds	19.42	99.09	(80.40)%.
Cash and Bank Balances	7.27	17.01	(57.27)%
Fixed Deposits/Liquid Mutual funds	742.60	543.15	36.72%
(B) Total	769.29	659.26	16.69%
Grand Total (A) + (B)	957.05	824.98	16.01%

Groups Trade Receivables

(Rs. in crore)

Details	March 31, 2026	March 31, 2025	Growth (in %)
Ratings & other services (Net)	25.43	22.48	13.13%
Non-Ratings	-	-	N.M.
Total	25.43	22.48	13.13%

OPERATIONAL PERFORMANCE

CareEdge Ratings delivered a healthy performance across both standalone and consolidated entities, driven by stable rating volumes and broad-based growth across segments.

During the year, the Company sustained its market share in debt ratings, reaffirming its position as a consistent and credible credit assessor. This performance reflects sustained market confidence in the Companys analytical rigour, governance standards, and balanced credit approach.

In securitisation, the Company demonstrated resilience and competitive strength. Despite a moderation in overall market volumes, it expanded its market share, reinforcing its leadership in structured finance and its ability to execute effectively across market cycles.

The Company accelerated its digital transformation by implementing an integrated, end-to-end CRM platform covering the entire client lifecycle - from origination to engagement management. The platform has enhanced turnaround times, strengthened process discipline, improved pipeline visibility, and enabled sharper, data-driven decision-making. It is expected to be a key enabler of sales intelligence and strategic growth going forward.

To further institutionalise engagement, the Company has established a dedicated team to drive continuous interaction with key stakeholders, reinforcing its position as a trusted, knowledge-led partner in the financial ecosystem.

OPPORTUNITIES FOR THE CREDIT RATING INDUSTRY

Indias strong macroeconomic fundamentals and policy-driven growth agenda continue to create meaningful opportunities for the credit rating industry. Credit offtake improved in March 2026, with non-food bank credit growth rising to 15.9% year-on-year (y-o-y), compared to 10.9% in March 2025. On the other hand, gross bank credit rose by 16.1% in March 2026 compared to 11.0% last year. Industrial MSMEs rose by 29.6% in March 2026. Corporate bond issuances totalled Rs. 10.8 trillion in FY 2025-26, reflecting the continued depth of the debt capital market and the sustained demand for independent credit assessment. The growing emphasis from investors and stakeholders on independent third-party assessments as a critical input to their decision-making is driving demand for grading and advisory services. Increasing regulatory requirements and stakeholder expectations around ESG are opening complementary avenues, as companies seek support with ESG integration and reporting across domestic and international frameworks including BRSR, GRI, and Integrated Reporting. The expanding role of sustainable finance instruments, including green bonds and sustainability-linked bonds, further widens the addressable market, as demonstrated by the rating of Indias first sustainability-linked local currency bond in Mauritius. Internationally, the adoption and deepening of credit rating practices across African capital markets, and growing engagement in jurisdictions such as Sri Lanka, Bhutan, and Nepal, signal the significant untapped potential for Indian rating agencies to extend their analytical frameworks to emerging and frontier markets.

RISK MANAGEMENT

The main threats to operations are identified, and mitigation measures are put in place. Some of these are elaborated below:

Risk	Description	Mitigation Strategy
Operational Risk	This risk arises from potential deficiencies in human resource management, internal processes, exposure to fraudulent activities, or technology and system disruptions. Such operational lapses could adversely impact business continuity, service delivery quality and overall operational effectiveness.	The Company mitigates these operational risks through a comprehensive control framework. Continuous employee training programmes are undertaken to upgrade skills, foster a positive work environment, and support talent attraction and retention. A detailed Ratings Operations Manual sets out standard operating procedures (SOPs), which are subject to regular audits to ensure consistent compliance. A robust Code of Conduct, introduced at onboarding and reinforced through periodic awareness sessions, governs ethical behaviour, fraud prevention and confidentiality. In addition, the Company maintains a strong information technology security framework, incorporating firewalls, intrusion detection systems, data encryption and periodic penetration testing to identify and address potential vulnerabilities.
Business Risk	This risk pertains to overall economic conditions, particularly the pace of economic growth. A slowdown in the economy tends to suppress investment activity, thereby limiting the expansion of the rating universe.	CareEdge mitigates business risk through diversified rating coverage across sectors and geographies, robust macroeconomic monitoring, and expanding analytical service offerings. Deep business outreach complements the strong analytical guardrails. Strong financial discipline and prudent cost management ensure operational resilience through economic cycles. At the same time, strategic alignment with Indias long-term growth agenda positions the Company to capture opportunities as conditions improve.
Market Intelligence Risk	This risk relates to the potential inability to identify or anticipate early signs of financial stress in rated entities in a timely manner, particularly in respect of debt instruments such as bonds. Delayed or missed detection of credit deterioration or default could adversely impact investor interests and impair the Companys credibility and market confidence.	The Company continues to enhance its market intelligence systems, focussing on strengthening early identification of emerging financial stress among rated entities. These initiatives aim to improve the timeliness and effectiveness of early warning indicators, thereby supporting credit discipline, safeguarding investor interests, and reinforcing the Companys reputation for analytical rigour and risk oversight.
A Market Risk (Investment)	This risk relates to potential erosion in the value of the Companys investment portfolio arising from adverse movements in interest rates. Given the size and composition of CareEdges investment holdings, sudden or sustained changes in market interest rates may impact portfolio valuations and investment returns.	To mitigate this risk, the Company follows a conservative, prudent investment strategy, with capital preservation as its primary objective. The Companys investment policy emphasises disciplined selection of low-risk instruments and prudent portfolio management to maintain a balanced risk-return profile and support stable investment returns.

Risk	Description	Mitigation Strategy
fy Compliance and Other Related Risks	This risk arises due to regulatory structure which we operate.	the CareEdge Ratings software interface maps the in entire workflow in the rating process, assigning the responsibility of various stakeholders and capturing timelines of key activities. The interface also sends out periodic alerts to supervisors on deviations and gives comprehensive MIS reports for monitoring.
		CareEdge Ratings has robust compliance policies and procedures that reflect the regulatory requirements and lay down the organisational and compliance standards for the employees. We also have an internal controls team to look into this on an ongoing basis, including monitoring compliance with various internal and external guidelines. Also, the risk arising from companies not being satisfied with our ratings is possible and we have an appeals committee with an external member chairing the committee. We thus strive to ensure that all our processes are robust so that we are ringfenced well in every respect. As such, all legal and regulatory risks which could potentially impact the company are monitored closely by the compliance & legal and criteria, policy & regulatory affairs functions to mitigate them in coordination with the other functions/departments. Further, periodic audits are undertaken to validate the compliance controls in the organisation to ensure the robustness of the designed controls.
		We are committed to strengthening our systems and processes continuously in line with market requirements and our studies to critically study past instances and identify root causes of sharp rating transitions.
		It may also be noted that a major portion of CareEdge Ratings rating business is driven by regulatory requirements or requires accreditation, recognition or approval from government authorities. CareEdge Ratings is registered with SEBI and is recognised by RBI as an eligible credit rating agency in terms of the Basel-III Capital Adequacy Framework. Also, commercial papers have a mandatory credit rating requirement by RBI. In the event of changes to these regulations or norms, there may be a change in the demand for ratings. SEBI has recently issued guidelines to permit CRAs to carry out rating of financial sector instruments under the purview of any other financial sector regulator. Implementation of the Internal Rating Based (IRB) approach by RBI may make rating non-mandatory to those banks for whom the IRB approach is approved by RBI.

GOVERNANCE AND OVERSIGHT

The majority of the Directors on CareEdge Ratings Board are Independent Directors who bring rich experience in finance, policy making, economics, regulatory affairs, information technology, legal and the insurance industry. This provides advanced guidance to management for making innovative decisions.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

CareEdge Ratings has implemented an internal control framework to ensure all assets are safeguarded and protected against loss from unauthorised use or disposition, and transactions are authorised, recorded, and reported correctly. The framework includes internal controls over financial reporting, which ensure the integrity of the Companys financial statements and reduce the risk of fraud.

The Criteria, Policy and Regulatory Affairs Team and the Internal Controls team issue well-documented operating procedures and authorisations with adequate built-in controls. These are carried out at the beginning of any activity and throughout the process to track major changes. As part of the controls process, they also review the design of key processes from the perspective of control adequacy. The independent internal auditors also conduct an exhaustive audit of the companys operations and procedures, in accordance with SEBIs guidelines. The Companys statutory auditors have audited the financial statements and issued a report on the Companys internal control over financial reporting as defined in Section 143 of the Companies Act, 2013 (the Act). The said report is annexed to the independent auditors report.

DEVELOPMENTS ON THE REGULATORY FRONT

CareEdge Ratings has been actively engaging with regulators on various aspects and has also been at the forefront of meetings of industry bodies such as the Association of Indian Rating Agencies (AIRA). During FY 2025-26, SEBI introduced several important regulatory measures. These include circulars introducing the recognition and operationalisation of the Past Risk and Return Verification Agency (PaRRVA), guidelines on the composition of the internal audit team for CRAs, and the rating of municipal bonds on the Expected Loss (EL) rating scale.

SEBI also amended CRA regulations to formally permit CRAs to carry out rating of financial instruments under the purview of other Financial Sector Regulators (FSRs) or authorities specified by SEBI and issued a circular outlining the obligations of CRAs in this regard. Separately, the RBI issued directions allowing regulated entities to extend partial credit enhancement to enhance the credit rating of bonds. These regulatory initiatives have expanded opportunities, reshaped the functioning of market intermediaries, enhanced

transparency, and strengthened compliance and governance standards within the credit rating industry. The Company has instituted robust systems and processes to ensure compliance with all regulatory requirements. Your company remains committed to maintaining the highest standards of governance and regulatory compliance.

TECHNOLOGY AND DIGITAL ENABLEMENT

During FY 2025-26, CareEdge Group continued to strengthen its technology capabilities to support business scalability, governance, operational efficiency and regulatory compliance. An integrated Customer Relationship Management (CRM) system covering the end-to-end sales lifecycle was implemented during the year. The CRM is seamlessly integrated with enterprise systems, ensuring secure access, data integrity and process continuity. Standardised workflows, centralised sales data and real-time visibility have enhanced transparency, control and pipeline oversight, supporting improved decision-making and customer engagement. Further enhancements leveraging advanced analytics are planned to strengthen sales effectiveness.

The Company upgraded its Machine Learning (ML) models for extracting financial and operational data from public corporate filings. The enhanced models deliver improved accuracy, contextual understanding and compatibility with multiple document formats. Ongoing training has resulted in improved data quality, enhanced analyst productivity and reduced turnaround times. These capabilities are expected to support geographic expansion and expanded sector coverage.

The phased development of the next-generation rating platform continued during FY 2025-26 under an agile delivery framework, in collaboration with a technology partner. Several key modules were successfully deployed, with additional modules planned for implementation in FY 2026-27. The platform is being built on a secure, scalable, cloud native architecture and incorporates advanced AI/ML capabilities to support intelligent document processing and improved analytical decision-making.

Following the launch of a unified Group website in the previous year, initiatives have been undertaken to upgrade the underlying technology stack. Planned enhancements focus on improving design richness, user experience, performance, and scalability.

Key business applications supporting the ratings analyst function were upgraded to address evolving regulatory and compliance requirements, thereby improving operational efficiency. The central document repository was further expanded and integrated as a core component of the new rating platform, strengthening data accessibility, availability and operational resilience.

The Company further enhanced its information security framework by implementing a Managed Security Operations Centre (MSOC) and Brand Monitoring solutions. Business Continuity and Disaster Recovery preparedness was validated through the successful execution of planned and unplanned disaster recovery drills. Organisation-wide information security awareness initiatives, including phishing simulation exercises, were conducted during the year. As part of its cybersecurity roadmap, the Company is progressing towards ISO/ IEC 27001 certification. It plans to further strengthen controls by aligning with the Digital Personal Data Protection (DPDP) framework and implementing Data Loss Prevention (DLP) policies.

Technology infrastructure was successfully established for subsidiary offices in Ahmedabad (GIFT City) and Mumbai, enabling secure, scalable and standardised IT operations.

Adoption of Artificial Intelligence across the organisation increased significantly during FY 2025-26, with usage exceeding 60%, reflecting wider integration of AI-enabled productivity tools across functions. In line with a targeted adoption approach, select AI agents were deployed to support data collection, productivity enhancement and operational efficiency. In parallel, Generative AI proof-of-concept initiatives are being evaluated to assess their potential benefits before broader deployment.

HUMAN CAPITAL AND ORGANISATIONAL

CAPABILITY

A high-quality employee experience remains fundamental to CareEdges performance and long-term competitiveness. Throughout FY 2025-26, the Company continued to focus on its people strategy - on attracting, developing, and retaining exceptional talent at all levels - from seasoned leadership to emerging professionals embarking on their careers. Consistent with

our philosophy that people are our greatest asset, we placed strong emphasis on recognising excellence and celebrating the contributions that drive the organisation forward.

To cultivate a dynamic, future-ready workplace, the Company enhanced its engagement and learning ecosystem through thoughtfully-curated initiatives, including capability-building webinars that fostered connections, broadened perspectives, and reinforced a culture of continuous learning. In parallel, HR policies were refined to reflect contemporary workforce expectations and leading industry standards, further strengthening the Companys positioning as an employer of choice for high-calibre talent.

The impact of these sustained efforts is evident in the steady decline in attrition over the past two years, along with noteworthy improvement in Employee Net Promoter Scores. These indicators underscore the effectiveness of our people-centric approach and reaffirm our commitment to creating an inclusive, empowering, and performance-driven workplace as we enter FY 2026-27.

CAUTIONARY STATEMENT

In accordance with relevant securities laws and regulations, comments in the Management Discussion and Analysis that describe the Companys goals, plans, estimates, or expectations may be deemed to be forward-looking statements. Actual outcomes could significantly vary from those that were stated or indicated. Economic conditions affecting supply and demand, price conditions in domestic and international markets where the Company operates, competitive pressures in these markets, changes in governmental regulations, tax laws and other statutes, as well as incidental factors, are significant variables that could impact results.

Corporate Overview

Statutory Reports

Financial Statements

ANNEXURE - IV

Details pertaining to remuneration of Directors and Key Managerial Personnel (KMP) as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2025-26, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2025-26 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

Sr. No.	Name of the Director/ KMP & Designation	% increase/ (decrease) in Remuneration in the financial year 2025-26	Ratio of Remuneration of each Director/ to median remuneration of employees
1	Mr. Najib Shah* Independent Director	(70%)	0.92:1
2	Mr. V. Chandrasekaran Independent Director	63%	3.24:1
3	Ms. Sonal Desai* Independent Director	(61%)	0.75:1
4	Dr. M Mathisekaran* Independent Director	(62%)	0.65:1
5	Mr. Gurumoorthy Mahalingam Independent Director	38%	2.59:1
6	Mr. Sobhag Mal Jain# Non-Executive Non-Independent Director	6%	0.6:1
7	Mr. Manoj Chugh Independent Director	52%	2.45:1
8	Mr. Mehul Pandya Managing Director & Group CEO	18%	44.95:1
9	Mr. Rajiv Bansal* Independent Director	NA	2.32:1
10	Ms. Indrani Banerjee* Independent Director	NA	2.29:1
11	Dr. Bimal Patel* Independent Director	NA	0.98:1
12	Mr. Jinesh Shah Group Chief Financial Officer	26%	9.94:1
13	Mr. Manoj Kumar CV@ Company Secretary & Compliance Officer	68%	5.56:1

* Mr. Najib Shah, Ms. Sonal Desai and Dr. M. Mathisekaran ceased to be Independent Director of the Company w.e.f. July 10, 2025 upon completion of second term as Independent Director

* Mr. Sobhag Mal Jain resigned as Non-Executive Non-Independent Director of the Company w.e.f. January 27, 2026

* Mr. Rajiv Bansal and Ms. Indrani Banerjee appointed as Independent Director of the Company w.e.f. May 30, 2025 $ Dr. Bimal Patel appointed as Independent Director of the Company w.e.f. November 12, 2025

@ Mr. Manoj Kumar CV appointed as Company Secretary and Compliance Officer w.e.f. September 1, 2024

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2) The percentage increase in the median remuneration of employees in the Financial Year 2025-26:

The median remuneration of employees of the Company during the financial year 2025-26 was 15,00,000/-. The percentage increase in the median remuneration of employees in the financial year stood at 7.13% compared to the financial year 2024-25.

3) Average percentile increases already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in remuneration for financial year 2025-26 over financial year 2024-25 was 11.83%

for employees, excluding the KMPs. In comparison, the average increase in remuneration of KMPs during the same period was 19.70%.

4) The number of permanent employees on the rolls of the Company:

As of March 31, 2026, there were 608 full time employees compared with 598 last year with around 83% of the staff management professionally qualified in the areas of management, CA, CS, legal, economics, engineering etc. holding professional or post graduate degrees.

5) Affirmation that the remuneration is as per the remuneration policy of the Company:

It is hereby affirmed that the remuneration paid is as per the Companys Remuneration Policy for Directors, Key Managerial Personnel and Senior Management.