Cil Securities Ltd Management Discussions

Industry Structure & Developments

Membership of Company with Stock Exchange(s)
Clearing cum Trading Member:					Trading Member
	Cash Market	Future & Options	Mutual Fund Service System	Securities Lending & Borrowing Mechanism	Currency Derivative Segment	Commodities Segment
NSE	/	/	/	/	*	-
BSE	/	/	-	/	-	-
MCX	-	-	-	-	-	/

*Note-The Company, at its Board Meeting held on 09 th May, 2026, approved the voluntary surrender of the Currency Derivatives including IRF segment of NSE.

The Company provide services in diversified Financial Services:

(i) Merchant Banker—Category I

(ii) Registrar & Share Transfer Agent-Category I

(iii) Depository Participant - CDSL

(iv) Depository Registrar- CDSL/ NSDL

(v) Providing Broking Services to Retail, high Networth Clients and Institutional Clients

The Company follows all the rules and regulations of the respective exchange(s); Depositories & SEBI. Opportunities and Threats

The Company being a player in the financial market, the performance of the Company largely depends on the National and Global Capital Markets. Your Company continues to work on cost effective solutions through the application of technology. We believe that implementation of technology can unlock growth for us in the future.

Opportunities

• Regulatory reforms would aid greater participation by all the class of investors.

• Leverage technology to enable best practices and processes.

• Increased retail participation in capital markets.

Threats

• Slowdown in global liquidity flows

• Intense competition from local and global players.

• Unfavorable economic conditions

Segment Wise or Product Wise Performance

The Company carries on Stock Broking which is its core activity, besides undertaking other Capital Market activities. The segment wise performance of the Company is as under:

(Rs. in Lakhs)

SEGMENT	GROSS INCOME
	31st March, 2026	31st March, 2025
Securities Dealings & Broking	668.42	879.86
Merchant Banking	0.90	10.35
Registrar & Share Transfer Agent	126.55	59.62
Demat& Depository	22.82	25.21
Consultancy Fee	17.41	7.80

The key financial ratios are as under:

Particulars	Financial year 2025-26	Financial Year 2024-25	% change	Reasons for change/Explanation
Current Ratio	3.22	2.35	+ 37.02%	The increase is primarily due to higher level of current assets, reflecting an improved short term liquidity position
Debt Equity Ratio	NA	NA	-	Not applicable as the company continues to operate without any significant debt exposure
Net Profit Margin (%)	19.96	20.94	-4.82%	The marginal decline is due to slightly lower profitability amid adverse market conditions.
Return on Equity Ratio (%)	5.05	6.57	-23.14%	The decline is attributable to a reduction in net earnings, influenced by overall market volatility and reduced investor participation.

Financial Performance with Respect to Operational Performance

During the financial year 2025-26, the Company reported revenue from operations of Rs 836.10 lakhs, a decline of 14.93% from Rs. 982.84 lakhs in FY 2024-25. EBIT stood at Rs. 226.23 lakhs (PY: Rs.290.85 lakhs), and EBT was Rs 223.08 lakhs (PY: Rs. 275.88 lakhs). Net Profit declined by 19.02%, from Rs.206.10 lakhs to Rs.166.88 lakhs.

During the financial year 2025-26, the Company reported a decline of 19.02% in net profit compared to the previous year, primarily due to industry-wide factors affecting the stock broking sector. The period witnessed moderation in trading volumes, particularly in the derivatives segment, coupled with reduced retail investor participation driven by market volatility and cautious sentiment. Additionally, regulatory tightening, including stricter margin requirements and reduced leverage, impacted trading activity and revenue generation. The industry also continued to face intense competition from discount brokers, leading to pressure on brokerage yields. Further, increased compliance and technology-related costs contributed to higher operational expenses. Despite these challenges, the Company maintained stable operations and continued to focus on strengthening its systems, compliance framework, and client base, positioning itself for sustainable long-term growth.

Outlook

The outlook for the stock broking industry remains cautiously optimistic, supported by strong domestic economic fundamentals, increasing financialization of savings, and continued growth in retail investor participation over the long term. However, near-term challenges such as regulatory tightening, evolving margin norms, and intermittent market volatility may continue to impact trading volumes and brokerage revenues. Additionally, ongoing geopolitical tensions in the Middle East have contributed to global market uncertainty, volatility in crude oil prices, and cautious investor sentiment, which may indirectly affect capital market activity. Notwithstanding these factors, structural drivers including rising demat account penetration, digital adoption, and expansion of capital markets are expected to provide growth opportunities. The Company remains focused on leveraging technology, enhancing client engagement, diversifying revenue streams, and maintaining robust risk and compliance frameworks to navigate these challenges and position itself for sustainable growth in the coming years.

Challenges, Risk, Concern

The Company faces normal business challenges of market competition in its business and needs to continuously seek attractive growth opportunities. The Company adopts suitable business strategies to counter these challenges.

As a part of the overall risk management strategy, the Company consistently insures its assets and generally follows a conservative financial profile by following prudent business practices.

Internal Control System and their adequacy

The Company has a proper and adequate internal control system commensurate with its size and nature of business to meet the following objectives:

• Providing assurance regarding the effectiveness and efficiency of operations;

• Efficient use and safeguarding of resources;

• Compliance with policies, procedures and applicable laws and regulations;

• The systems are IT enabled which facilitate effective checks and tight monitoring of all parameters and control on continuous basis.

The Audit Committee actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening measures from time to time.

Risk assessment reports received from various departments are reviewed periodically and steps are initiated for elimination whenever needed.

Human Resource Development

The Company has a group of able and experienced employees. The Company believes that the quality of its employees is the key to its success in the long run. The Company continues to have cordial relations with its employees and provides personal development opportunities for all round exposure to them. As on 31 st March, 2026, Company had 38 employees.

	By Order of the Board of Directors of CIL SECURITIES LIMITED
Registered office 214, Raghava Ratna Towers,	Krishna Kumar Maheshwari
Chirag Ali lane, Abids	Managing Director
Hyderabad-500 001	DIN: 00223241
Place: Hyderabad Date: 10 th August, 2026