Consolidated Finvest & Holdings Ltd Management Discussions

ABOUT CONSOLIDATED FINVEST & HOLDINGS LIMITED Consolidated Finvest & Holdings Limited ("CFHL" or "Company"), registered with the Reserve Bank of India ("RBI") as a non-deposit taking Base Layer Non-Banking Financial Company ("NBFC") is engaged in lending and Investment mainly in group Companies.

GLOBAL ECONOMY

According to current market research conducted by the CMI Team, the Global NBFC Market is expected to record a

CAGR of 2.15% from 2025 to 2033. In 2025, the market size is projected to reach a valuation of USD 218.98 Trillion. By 2033, the valuation is anticipated to reach USD 265.19 Trillion.

Non-banking financial companies are financial institutions, which render banking services without having a license to operate banking. These companies provide a wide array of financial services such as loans and advances, asset financing, microfinance, investment services, and insurance, among others.

The role of NBFCs is crucial in the whole financial system, particularly in markets where traditional banking services are limited or not sufficient. The bank can cater to both retail customers and big corporations while being flexible, with access that would not normally be possible using a traditional bank.

Global trade grows and thus needs more trade finance solutions to drive such activity through instruments like letters of credit, export credit, and import financing. To that extent, NBFCs typically fill in the void and provide these facilities, particularly to SMEs.

INDIAN ECONOMY AND OUTLOOK

Indias economic performance in FY 2024-25 reflects a consistent and robust growth trajectory, with the nations Gross Domestic Product (GDP) growing by 6.5%, thereby solidifying its status as the fastest-growing major economy.

The Reserve Bank of Indias prudent, accommodative monetary policy, which includes an interest rate reduction, has further spurred both investment and consumption. In addition, a marked improvement in manufacturing output and resilient urban consumption have further invigorated the economic momentum. While global trade uncertainties remain an external risk, Indias intrinsic economic strength, coupled with policy interventions and robust private sector investments, is set to underpin continued growth.

GDP Growth(in %)

FY 2020-21	FY 2021-22	FY 2022-23	FY 2023-24	FY 2024-25
(6.6)	8.7	7.0	7.2	6.5

The Indian economy is projected to experience a growth rate ranging from 6.3% to 6.8% in FY 2025-26, driven by transformative structural reforms, digital evolutions, and a rising wave of consumer demand. Initiatives such as Make in India and the Production-Linked Incentive (PLI) schemes are strengthening the manufacturing sector, channelling significant investments into key sectors like electronics, semiconductors, and renewable energy. In parallel, large-scale infrastructure projects spanning highways, ports, and smart city developments are expected to enhance economic activity and generate substantial employment prospects. With continued policy support and strategic investments, India is well-positioned to sustain its growth trajectory, solidifying its role as a global economic powerhouse.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Indias financial services sector plays a critical role in driving the countrys economic growth by providing a wide spectrum of financial and allied services to a large consumer cross-section. The Sector comprises commercial banks, insurance companies, NBFCs, housing finance companies, co-operatives, pension funds, mutual funds and other smaller financial entities. In India, the market for financial services sector is still largely untapped. Financial services sector is poised to grow eventually on the back of strong fundamentals, adequate liquidity in the economy, significant government and regulatory support, and the increasing pace of digital adoption. Digital technology, which has transformed the way business is conducted across the world, is projected to be one of the major drivers for the growth of this sector in India as well. Greater use of digital technology is helping the sector to lower transaction cost, generate higher productivity and reach unexplored markets in the financial ecosystem.

The Non-Banking Financial Companies (NBFC) sector continues to serve as an indispensable pillar in Indias financial framework, playing a pivotal role in enhancing financial inclusion and broadening access to credit. As of FY 2024-25, the sector has expanded to approximately USD 350 Billion, marking a consistent increase from the previous years USD 326 Billion. As per ICRA, The growth of the sectors Assets Under Management (AUM) is forecasted to moderate, with year-on-year growth projections for FY 2024-25 and FY 2025-26 ranging between 13-15%, a decline from the robust 17% recorded in previous two Financial Years.

Overall NBFC credit stood as about 52 Trillion in December 24, 2024 and is set to exceed 60 Trillion by FY 2026.

STRENGTH

Non-Banking Financial Companies ("NBFCs") remain one of the most important pillars for ushering financial inclusion in India, reaching out to a hitherto under/ unserved populace and in the process leading to "formalization" of the credit demand. NBFCs cater to the needs of both the retail as well as commercial sectors and, at times, have been able to develop strong niches with their specialized credit delivery models that even larger players including banks, have found hard to match. NBFC play a key role in providing funds to the weaker sections of the society. As against traditional banks, NBFCs supply long-run credit to trade and commerce industry. NBFCs cater to a wide variety of customers – both in urban and rural areas. They finance projects of small-scale companies, which is important for the growth in rural areas. They also provide small-ticket loans for affordable housing projects. All these helps promote inclusive growth in the country.

WEEKNESS, RISKS, THREATS & OPPORTUNITIES

Company is a NBFC, having investment in group companies, which are strategic investments and exposed to risk associated with the performance of the group companies and also have investments in mutual funds. The Company will continue to focus on making long term strategic investments in various new ventures promoted by Group, besides consolidating the existing investments through further investments in the existing companies. The company is confident to improve its performance on the strength of its long experience and its strong emphasis on the fundamentals.

The Company is also exposed to interest risk and credit risk. However prudent business and risk management practices followed by a company over the years helps it to manage the normal industry risk factors, which inter-alia includes economic / business cycle, besides the interest rate volatility and credit risk.

The Company is confident of managing these risks by observing a conservative approach in lending and investments.

RISK MANAGEMENT

The risk management is an imperative strategic priority, safeguarding the interests of customers, employees, shareholders, and organization, all while fostering sustainable growth. The Company effectively mitigates market risk through a well-structured set of policies and procedures, which undergo regular reviews to ensure strict adherence to industry norms and regulatory frameworks. The Company consistently monitors market risks and strengthens its loan portfolio. Due to methodical approach of the company it is able to identify, assess, manage, and mitigate risks across various departments.

FUTURE PROSPECTS AND OUTLOOK OUTLOOK OF THE SECTOR

India has a huge proportion of un-banked and underbanked consumers and businesses. Hence, there is a lot of potential for NBFCs, which can still be tapped for future growth. The NBFCs are being recognized as being vital for the growth of Indian economy. NBFCs are here to stay and play an important role in economic growth and financial inclusion. As Indias economy grows, the requirement for credit will rise more than proportionately. We need both banks and NBFCs to rise to the occasion and power the economy with free flowing credit lines. NBFCs with robust business models, strong liquidity mechanisms and governance & risk management standards are poised to reap the benefit of the market opportunity.

The future of NBFCs in India looks promising. Despite occasional economic slowdowns, the sector continues to expand and improve operations. NBFCs have outperformed banks in year-on-year growth rates due to lower operating expenses, allowing them to offer competitive interest rates.

OUTLOOK OF THE COMPANY

Outlook of the Company in coming years will better as the Company is having investments in group companies and few blue-chip companies and future outlook/ performance of the stock market is in bullish trend.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an adequate and effective system of internal controls for its various business processes, with regard to operations, financial reporting, compliance with applicable laws and regulations, etc. Clearly defined roles and responsibility for all managerial positions gives strength to the internal control system of the organization. Internal audits are done at regular intervals to ensure that responsibilities are executed effectively. Audit Committee of the Board of Directors on quarterly basis reviews the adequacy and effectiveness of internal control systems and suggests measures for improvement of the existing control system and strengthen the control in view of changing business needs and safe guarding the assets of the Company against significant misuse or Loss from time to time.

The company regularly conducts internal audits and checks to ensure that the responsibilities are executed effectively and that adequate systems are in place. The audit findings are reported on a quarterly basis to the Audit committee of the Board headed by a non-executive independent Director.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

The company is having sufficient industry professionals to carry out its operations and follows good management practices. These are basically its human resources assets which is integral to the Companys ongoing success. They have played a significant role and enabled the Company to deliver superior performance year after year. Company employs two employees to look after the business and administration of the Company. Board of Directors of the Company is also actively involved in the day-to-day functions of the Company.

OPERATIONAL AND FINANCIAL PERFORMANCE

Details of Financial Results and Operations of the Company are given as under:

(Rs. In Lakhs)

	Year ended
	31-03-2025	31-03-2024
Total Income	7143	5169.11
Profit before Tax, Exceptional Items	7088	5090
Profit before Tax and Exceptional Items	7088	5090
Less:
i) Exceptional items	-	-
ii) Provision for Taxation	(3777)	444
Profit/(Loss) for the Year after tax	10828	4646
Less: (Loss) from Discounting operations	(1)	-
Add: Other Comprehensive Income/(Loss)	11101	1834
Total Comprehensive Income	21928	6480
EPS (Basic and Diluted)	33.49	14.37

DETAILS OF SIGNIFICANT CHANGE IN KEY FINANCIAL RATIOS (Standalone):

Ratios	F.Y. 2024-25	F.Y. 2023-24	% Change over previous year	Formula used
Interest Coverage Ratio	0	2120%	100%	EBIT/INTEREST
Operating Profit Margin	99.23%	98.47%	0.01%	Gross Profit /Total Income
Net Profit Margin	151.27%	89.87%	0.69%	Net Profit /Total Income
Return on Net worth	10.54%	5.75%	0.83%	Net Profit /Net worth

Explanation:

Change of more than 25% in the above key financial ratios has occurred as the Company earned exceptionally high net profit mainly due to deferred tax credit availed and high change in the fair value of shares during F.Y. 2024-25 as compared to F.Y. ended 31.03.2024. Further there was no finance cost during F.Y. 2024-25

CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis Report may contain certain ‘forward-looking statements based on various assumptions about the Companys present and future business strategies and the environment in which it operates. Actual results may differ substantially or materially from those expressed or implied due to risk and uncertainties. These risks and uncertainties include the national and global effects of economic conditions, political conditions, volatility in interest rates, changes in regulations and policies impacting Companys businesses and other related factors. The information contained herein is as referred to. The Company does not undertake any obligation to update these statements. The Company has obtained the data and information referred here from sources believed to be reliable or from its internal estimates, the accuracy or completeness of which cannot be guaranteed.

For and on behalf of the Board
(Sanjiv Kumar Agarwal)	(Geeta Gilotra)
Managing Director	Director
(DIN: - 01623575)	(DIN: 06932697)
Dated: 30th June, 2025
Place: New Delhi