Crescentis Capital Ltd Management Discussions

This Management Discussion and Analysis (MD&A) should be read in conjunction with the Companys Audited Financial Statements and accompanying notes.

About the Company - An Overview & Brief History

Crescentis Capital Limited (formerly known as Som Datt Finance Corporation Limited) is a Non-Deposit taking Non-Banking Financial Company (NBFC-ND) registered with the Reserve Bank of India (RBI), categorised as an Investment and Credit Company (ICC). As per the Reserve Bank of India (Non-Banking Financial Companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025, the Company is classified under Base Layer (NBFC-BL). The equity shares of the Company are listed on the Bombay Stock Exchange (BSE Limited or BSE).

The Company has a corporate lineage dating back to its incorporation on October 19, 1993, as a public limited company under the Companies Act, 1956. The Company commenced business shortly thereafter on November 03, 1993, initially operating from Kolkata, West Bengal, with a focus on financial services and investment activities. The Companys ownership and management structure has undergone two significant transformations over the years, each of which necessitated corresponding jurisdictional and administrative realignments.

In 2019, control shifted from the erstwhile Som Datt promoter group to a new promoter family - Mr. Kuldip Rathee and Mrs. Vijay Rathee of ASK Automotive Limited, marking the first major change in stewardship, leading to the relocation of its registered office from West Bengal to the National Capital Territory of Delhi in February 2021.

A second transition in promoter and management control was formally completed in July 2023, following receipt of requisite regulatory approvals and completion of the SEBI-mandated open-offer process, ushering in a renewed strategic direction. Subsequently, the Company relocated its Registered Office from the National Capital Territory of Delhi to Telangana in August 2024.

Historically, the Company has been engaged in proprietary investments in stocks and securities, which formed the core of its business model for many years. With the commencement of lending operations in the financial year 2025-26 under the new leadership, the Company has begun its transition into a broader and more diversified financial services platform. Reflecting this change in ownership and strategic direction, the Companys name was also changed from Som Datt Finance Corporation Limited to Crescentis Capital Limited, marking the beginning of a new phase in its corporate journey.

Macro-Economic Overview and Outlook

During 2025-26, the global economy continued to face significant headwinds, with geopolitical tensions and energy-market volatility emerging as key risks to growth. The escalation of conflict involving Iran and parts of West Asia led to bouts of disruption in crude oil and gas supplies and higher freight and insurance costs along key maritime routes. Against this backdrop, the International Monetary Fund (IMF), in its April 2026 World Economic Outlook, projects global growth under the reference forecast is projected at 3.1% in 2026 and 3.2% in 2027, moderating from the stronger pace of about 3.4% recorded during 2024-25. The IMF also notes that medium-term global growth is expected to settle below its historical average of 3.7% (2000-2019), reflecting the drag from geopolitical tensions, elevated energy prices, and tighter financial conditions.

India, however, remains one of the fastest-growing major economies, even as it is not fully insulated from these external shocks. According to IMF estimates, Indias real GDP growth is projected at around 6.5% in FY2025-26, after an estimated 7.6% in FY2024-25, supported by robust domestic demand, strong investment activity, and continued policy support. The Economic Survey and other multilateral assessments broadly place Indias growth in the 6.4%-7.0% range over the near term, while also flagging risks from higher crude oil prices, global financial-market volatility and weaker external demand. As a large net importer of crude, a sustained increase in oil prices due to the West Asia conflict could exert pressure on inflation, the current account deficit and, to a lesser extent, fiscal balances, although Indias comfortable foreign exchange reserves and prudent macro-prudential policies provide important buffers.

On the monetary policy front, the Reserve Bank of India (RBI) adopted an accommodating approach to support growth. Following cumulative rate cuts totalling 125 basis points throughout 2025, the RBI lowered the policy repo rate from 6.50% down to 5.25%, holding it steady at this lower threshold through the latter part of FY2025-26 while shifting to a neutral stance. In its April 2026 Monetary Policy statement, the RBI has projected real GDP growth for FY2026-27 at around 7.0% and CPI inflation close to the 4.0% target, with risks tilted to the upside due to volatile crude oil prices and global supply disruptions. High-frequency indicators such as GST collections, e-way bills, power demand and air passenger traffic continue to point to resilient domestic activity, even as policymakers remain vigilant to evolving global and geopolitical risks.

Financial Services Sector Overview and Outlook

According to the Ministry of Finance, Indias financial system witnessed a strong credit expansion in the last fiscal year 2025- 26, with non-food bank credit growing by 15.9% year-on-year, a sharp acceleration from 10.9% in the previous year. Aggregate outstanding credit rose to 212.9 lakh crore, reflecting an increase of 29.2 lakh crore driven by broad-based demand across sectors. The growth momentum was supported by a favourable interest-rate environment, the governments sustained capital-expenditure push, and improved private-sector investment sentiment. Credit expansion remained diversified, led by the services sector, followed by personal loans, agriculture, and industry. Lending to NBFCs grew by over 26%, with NBFCs accounting for a rising share of incremental system credit, reflecting their expanding role in retail and MSME financing. Overall, FY26 marked one of the strongest credit growth periods in recent years, underscoring the resilience of Indias domestic economy and the banking sectors continued role in supporting investment, consumption, and employment generation despite global uncertainties.

Asset quality across the financial system remained stable during FY2025-26, with the Reserve Bank of Indias Financial Stability Report December 2025 (FSR December 2025), noting a continued improvement in the Gross NPA ratio of Scheduled Commercial Banks to around 3.2% and strong capital adequacy of 16.8% across banks and NBFCs. Credit-rating agencies also reported a favourable upgrade-to-downgrade ratio during FY26, supported by strengthened balance sheets, improved collections, and prudent risk management practices, as highlighted in CRISILs Credit Quality Review (April 2026) and ICRAs Credit Quality Trends (March 2026).

Looking ahead, the outlook for FY2026-27 remains constructive. CRISIL, in its Credit Quality Review (April 2026), expects system-wide credit growth to remain in the 13-15% range, supported by a stable interest-rate environment, easing inflationary pressures, and sustained public and private capex momentum. As per ICRAs Credit Quality Trends, March 2026, NBFCs are projected to maintain healthy growth, although competitive intensity from banks, heightened regulatory scrutiny in unsecured lending, and elevated funding costs will necessitate disciplined credit selection and robust collections infrastructure. The RBIs FSR December 2025 also highlights that strong capital buffers and resilient asset quality provide a supportive backdrop for continued credit expansion into FY27.

For NBFCs expanding into lending, including your Company, the FY26 operating environment was characterised by strong demand in retail and MSME segments, rising formalisation, and wider adoption of digital underwriting and collections models. While CRISIL highlights continued momentum in secured retail and MSME lending, ICRA points to emerging stress in small-ticket unsecured loans, reinforcing the need for prudent underwriting and early-warning mechanisms. The RBI FSR December 2025 also underscores the need for prudent credit selection amid global geopolitical uncertainty and elevated crude-oil prices, even as the NBFC sector remains well-capitalised and resilient.

Business Environment, Opportunities and Threats

Your Company continues to derive value from its portfolio of listed equity investments, where dividends and capital appreciation remain important contributors to financial performance. Strong earnings delivery by underlying investee companies, supported by Indias robust macroeconomic fundamentals, can enhance returns; however, any weakness in profitability, dividend payouts, or market valuations may adversely impact the Companys revenue stream. Equity-market performance remains sensitive to global risk sentiment, foreign capital flows, and sector-specific developments.

During the fiscal 2025-26, Indias equity markets were influenced by resilient domestic growth, rising global investor interest, and Indias increasing weight in global indices such as the MSCI Emerging Markets Index (from approximately 7.5% in 2010 to structural highs in early 2025 before normalizing near 12% in 2026). At the same time, intermittent volatility persisted due to geopolitical tensions, crude-oil price fluctuations, and periodic corrections driven by global monetary conditions. These dynamics present both opportunities for long-term value creation and risks arising from short-term market movements.

With the commencement of lending operations in FY26, Crescentis Capital now participates in Indias expanding credit ecosystem, particularly in segments with strong structural demand. Opportunities arise from the growing financing needs of MSMEs, increased adoption of renewable-energy solutions such as solar rooftop systems, and rising credit demand from healthcare ecosystem participants such as small hospitals, medical-equipment suppliers, pharmaceutical dealers and other associated players. These sectors benefit from formalisation, digital adoption, and supportive government policies, creating a favourable environment for disciplined, secured, and cash-flow-backed lending.

However, the lending business also introduces new risks. Heightened competition from banks and larger NBFCs, evolving regulatory expectations, particularly around unsecured and small-ticket exposures, and elevated funding costs require prudent credit selection and strong risk-management practices. MSME borrowers remain sensitive to economic cycles, working-capital pressures, and supply-chain disruptions, while renewable-energy and healthcare segments may face project-execution risks or policy-driven variability. Maintaining robust underwriting standards, continuous portfolio monitoring, and a resilient collections infrastructure will be critical to managing these risks effectively.

Overall, the dual-engine model - equity investments and a growing, well-diversified lending portfolio - positions your Company to capitalise on Indias long-term growth trajectory while navigating market, credit, and regulatory uncertainties with discipline.

STRENGTHS	CHALLENGES
• Dual-engine model: equity investments + lending	• Equity returns exposed to market volatility
• Focus on secured, cash-flow-backed MSME, renewable and healthcare loans	• Lending business at an early stage
	• Limited operating history vs. larger NBFC peers
• Strong capital position and prudent governance	• Sensitivity to funding-cost movements
• Digital underwriting and collections
OPPORTUNITIES	THREATS
• Rising MSME credit demand	• Competition from banks and large NBFCs
• Growth in renewable-energy financing (solar rooftops)	• Regulatory scrutiny on unsecured/small-ticket lending
• Expanding healthcare ecosystem financing	• MSME vulnerability to economic cycles
• Favourable long-term India macro and equity-market outlook	• Market volatility, crude-oil risks, global uncertainties

Risk Management Framework - Overview

The Company has instituted a structured and appropriate risk-management framework aligned with the size and complexity of its operations in line with the Reserve Bank of Indias regulations. As a Base Layer NBFC engaged in both investment and lending activities, the framework ensures that risks are identified, assessed, monitored and mitigated in a disciplined and forward-looking manner.

Risk governance is anchored by the Board of Directors, supported by the Risk Management Committee (RMC) comprising the Managing Director, CEO, CFO and Head of Business Development. The RMC oversees the Companys overall risk profile, risk appetite, internal controls, and compliance with regulatory requirements. The Company follows the Three-Lines-of-Defence model, with business functions owning risks, the RMC providing oversight, and the Audit Committee supported by internal and external audits forming the third line.

Risks are identified through ongoing business processes and departmental self-assessments, covering both normal and stressed scenarios. Mitigation measures include Board-approved policies, defined exposure limits, Early Warning Signal (EWS) tracking, stress testing, ALM monitoring, IT and cybersecurity controls, and a structured compliance framework. Key risk categories include credit risk, investment risk, liquidity and financial risk, operational risk, technology risk, and regulatory and compliance risk. Risk exposures and mitigation measures are periodically reviewed by the RMC and reported to the Board.

The Company aims to maintain a prudent risk appetite consistent with its capital strength, business strategy and regulatory expectations, while fostering a culture of risk awareness, accountability and compliance across all levels of the organisation.

Risk and Concerns

Your Companys risk profile has evolved in FY26 with the continuation of its equity-investment activities and the commencement of lending operations. The Companys investment-related risks remain closely tied to the performance of underlying investee companies, market movements, and macroeconomic conditions.

With the expansion into MSME, renewable-energy (solar rooftop), healthcare-ecosystem, and working-capital lending, the Company is now additionally exposed to credit, operational, and regulatory risks inherent to NBFC activities. The Company has strengthened its risk-management framework to address these new exposures through disciplined underwriting, cash-flow-based assessments, and enhanced monitoring mechanisms.

Investing in the stock market carries various risks. Some of the key risks are mentioned below, along with their causes and the mitigants that the Company enforce:

Investment-Related Risks

Risk Type	Definition	Cause / Effect / Impact	Mitigant
Market / Systematic Risk	Arises from overall market conditions. It affects all stocks and is beyond individual company control.	Economic downturns, geopolitical tensions, and global events impact stock prices.	Diversify across different sectors and stocks to reduce dependencies.
Liquidity Risk	Liquidity risk refers to the ease of buying or selling a stock without significantly affecting its price.	Stocks with low trading volumes and free float may cause difficulty in execution.	Focus on liquid stocks and avoid illiquid ones by continuously monitoring the relevant data.

Investment-Related Risks

Risk Type	Definition	Cause / Effect / Impact	Mitigant
Company-Specific Risk	Pertains to individual companies and their unique challenges.	Management changes, legal disputes, industry disruptions, or poor operational/financial performance.	Research companies thoroughly, diversify across sectors, and avoid overconcentration.
Interest Rate Risk	Interest rate changes impact stock prices indirectly. Higher rates can reduce corporate profits and make bonds more attractive.	When rates rise, stock valuations may decrease due to higher interest rates.	Stay informed about central bank policies and consider the overall economic environment.
Currency Risk	Currency fluctuations can affect returns in the case of foreign investments.	Exchange rate movements can amplify gains or losses.	Do not invest in foreign markets/ stocks.
Volatility Risk	Refers to price fluctuations. Stocks can experience sudden and significant swings.	Various reasons as explained above.	Maintain a long-term perspective, avoid panic selling, and focus on fundamentals.

With the commencement of lending activities, the Company is exposed to the following additional risks:

Lending-Related Risks

Risk Type	Definition	Cause / Effect / Impact	Mitigant
Credit Risk	Risk of borrower default or delayed repayment.	MSME cash-flow volatility; project delays in renewable/solar; emerging stress in small-ticket unsecured loans.	Cash-flow-based underwriting, combination of secured structures, borrower due diligence, early-warning systems.
Concentration Risk	Overexposure to specific sectors or geographies.	Early-stage lending book may naturally cluster in types of customers, products or geographic segments.	Portfolio diversification, calibrated ticket sizes, exposure caps.
Operational Risk	Risks from processes, systems, or human error.	Rapid scale-up, documentation lapses, fraud, process gaps.	Digital workflows, maker-checker controls, internal audits, staff training.
Regulatory & Compliance Risk	Risks from evolving RBI norms for NBFCs.	Scrutiny on unsecured lending, KYC/AML compliance, governance expectations.	Strict adherence to RBI guidelines, periodic policy updates, Board oversight.
Funding & Interest Rate Risk	Impact of rising borrowing costs on margins.	Higher funding costs during tightening cycles; ALM mismatches.	Prudent ALM management, diversified funding sources, risk aligned pricing.
Sector Specific Risk	Risks arising from industry-specific characteristics of borrowers.	Cyclicality in MSME cash flows; project-execution delays impacting borrower viability.	Sector-aligned underwriting; collateralisation; continuous monitoring of borrower and sector performance.

Your Company recognises that both equity-investment and lending activities carry inherent market, credit, operational, and regulatory risks. By maintaining disciplined underwriting, prudent diversification, and continuous monitoring across both portfolios, the Company seeks to safeguard stakeholder interests while supporting sustainable, long-term growth. The risk-management framework will continue to evolve in line with business expansion and the broader financial landscape.

Internal Control Systems and Their Adequacy

The Company has put in place an adequate system of Internal Controls that is commensurate with its size, requirements and the nature of operations. It ensures operational efficiency and accuracy in financial reporting and compliance with applicable laws and regulations.

An independent specialised agency serves as the Internal Auditor, submitting quarterly reports to the Audit Committee. The Committee reviews internal audit observations and takes corrective actions when needed. Statutory Auditors, Internal Auditors, and the Audit Committee have unrestricted access to necessary information and records.

Human Resources

While the Companys current operations do not necessitate significant human resources, we have employed qualified and experienced personnel to meet organisational requirements effectively. As the business expands, particularly with the growth of lending operations, the Company will augment its human resources in line with operational needs. Including the two Executive Directors, the Companys permanent workforce stood at 13 as at the end of March 31, 2026.

Segment-wise or Product-wise Performance

The Company is engaged primarily in the NBFC business. Its operations fall under financing and investment activities, which are considered to constitute a single reportable segment in accordance with Ind AS 108 - Operating Segments. The Company operates in a single geographical segment, i.e., domestic. During the year, the Company continued its investment activities and also commenced lending operations in MSME, renewable-energy and other secured and unsecured business-loan segments. However, the Chief Operating Decision Maker (CODM) reviews the Companys operations as a single, integrated business. Accordingly, there are no distinct reportable segments or product-specific performance disclosures applicable for FY2025-26.

Financial Performance, Key Ratios and Details of Significant Changes

This report should be reviewed alongside the Companys financial statements, notes to accounts, and other information provided in this Annual Report. The key financial parameters and ratios are presented below:

Key Financial Parameters:	Unit	FY26	FY25	YoY %
Interest income	Rs. lakhs	325.21	0.08	*
Investment income	Rs. lakhs	(176.83)	(302.56)	*
Total income	Rs. lakhs	154.60	(302.21)	*
Total expenses	Rs. lakhs	474.97	279.68	69.8%
Net profit/(loss)	Rs. lakhs	(252.63)	(542.24)	*
Net worth	Rs. lakhs	7,604.32	2,977.47	155.4%
Net loans#	Rs. lakhs	4,595.34	Nil	*
Investments	Rs. lakhs	3,980.35	2,693.85	47.8%
Borrowings	Rs. lakhs	1,448.65	Nil	*
Total assets	Rs. lakhs	9,125.02	3,022.17	201.9%

*Certain fields are intentionally left blank as they are not meaningful or not comparable due to commencement of lending operations in FY26.

#Net loans = gross loan portfolio (4,643.05 lakhs) minus provisions (32.34 lakhs) and Ind AS adjustment for unamortised processing fee (15.37 lakhs).

Key Financial Ratios	FY26(%)	FY25(%)
Operating profit or EBIT margin	-189.04%	*
Net profit margin	-163.41%	*
Return on average net worth	-4.77%	-16.63%
Return on average capital employed	-4.20%	-16.63%
Return on average assets	-4.16%	-16.45%
Gross NPAA	0.34%	-
Net NPAA	0.26%	-
Debt to equity	0.19x	-

*Certain fields are intentionally left blank as they are not meaningful or not comparable due to commencement of lending operations in

FY26.

AGross NPA and Net NPA: denominator is gross loan portfolio.

Income Profile:

• With the commencement of lending operations in June 2025, the Company recorded interest income of 325.21 lakhs in FY26, compared to a negligible amount in FY25, which was interest on fixed deposits with banks.

• Investment income remained negative, which was primarily attributed to the recognition of net loss amounting to 216.16 lakhs due to adverse movements in the market prices of equity investments. This comprised an unrealised loss of 485.47 lakhs from changes in the fair value of investments, partially offset by a realised gain of 269.31 lakhs on the sale of certain equity investments and mutual funds during the year. These unrealised losses are notional in nature and reflect the fair valuation of financial instruments in accordance with Ind AS 109 as of the reporting date, i.e., March 31, 2026.

• Consequently, total income turned positive at 154.60 lakhs in FY26, compared to a negative 302.21 lakhs in FY25.

Expenses and Profitability:

• Total expenses increased to 474.97 lakhs, primarily driven by employee additions, operational and technology infrastructure to scale lending activities, provisioning for loan losses and borrowing costs.

• As a result, the Company reported a net loss of 252.63 lakhs, significantly lower than the FY25 loss of 542.24 lakhs, indicating an improving earnings trajectory as the business transitions from an investment-only model to a lending-led NBFC.

Balance Sheet Expansion:

• The Companys balance sheet expanded meaningfully during the year 2025-26, with total assets increasing to 9,125.02 lakhs, driven by the creation of a 4,595.34 lakhs net loan book and higher investments.

• Net worth increased to 7,604.32 lakhs, supported by capital infusion of 4,903.91 lakhs through rights issue concluded in July 2025. The issue garnered overwhelming participation from investors and was oversubscribed by more than 123%.

• Your Company efficiently utilised its investment book by pledging certain of its investment securities with large financial institutions and availing Loan Against Securities facilities. Borrowings outstanding stood at 1,448.65 lakhs to support lending operations and meet working capital requirements, resulting in a conservative debt to equity ratio of 0.19x as at March 31, 2026.

Asset Quality:

• With lending operations scaling through FY26, the Company reported Gross NPA of 0.34% and Net NPA of 0.26%, reflecting prudent underwriting, a predominantly secured lending approach, and the healthy performance of an early-stage loan book.

Return Ratios and Profitability Margins:

• Return ratios ? RoNW, RoCE, and RoA ? and profitability margins remained negative during FY26, reflecting the early stage of lending operations and the impact of mark-to-market losses on the investment portfolio. The combination of operating expenses and initial credit cost provisioning also weighed on margins.

• However, all key ratios and margins show material improvement compared to FY25, indicating a gradual trajectory toward profitability as the loan book expands and operating leverage strengthens.

Ratios such as debtor turnover, inventory turnover, interest coverage ratio, and current ratio are not applicable to the nature of the Company.

Cautionary Statement

Statements in this MD&A Report regarding the Companys projections, estimates, and expectations have been made in good faith and may constitute forward-looking statements under applicable laws and regulations. Actual results may differ significantly from those expressed or implied due to various unforeseen factors. Key developments that could impact the Companys operations include industry downturns (both global and domestic), significant changes in Indias political and economic environment, applicable statutes, and ongoing litigations.

	For Crescentis Capital Limited.
	(Formerly known as Som Datt Finance Corporation Ltd)
	Subba Rao Veeravenkata Meka	Bhavanam Ruthvik Reddy
Place : Hyderabad	Managing Director	Whole Time Director & CEO
Date : May 29, 2026	DIN: 07173955	DIN: 08372627