Dalal Street Investments Ltd Management Discussions

Company Overview & Economy Analysis

Global economy faces heightened uncertainty due to geopolitical tensions in west Asia although the 2-week truce between US and Iran offers hope of early resolution of the conflict. Before the start of conflict in west Asia, growth in India too had held up well on the back of fiscal (income tax and GST cuts) and monetary (lowering of interest rates) stimulus. High frequency indicators have steadily improved over the last few months with rural demand continuing to hold up well and urban demand too showing signs of uptick. Inflation remains well anchored and though it is expected to rise from here on due to rise in crude oil and other commodity prices and adverse base effect, it is unlikely to increase significantly. RBI has projected an average inflation of 4.6% in FY27.

Looking ahead, the medium-term outlook for the Indian economy seems optimistic. This optimism is driven by policy continuity, benefits from production-linked incentive schemes, opportunities arising from shift in the global supply chain and the likely boost to private consumption due to income tax relief and lower borrowing cost. However, the flare up in geo-political tensions remains a key risk to growth this year.

The global economy today faces unprecedented uncertainty as supply chains get disrupted leading to rise in general increase in prices and lower growth. Given the global uncertainties, the importance of stock selection increases even more.

Over medium to long term, optimism on Indian equities remain, considering key trade deals, attractive domestic growth outlook, healthy corporate profitability and supportive pro-growth policies like income tax and GST relief to consumers and renewed reform momentum. However, near-term risks include risk of elongated conflict in West Asia and cyclical moderation in corporate earnings.

Source for various data points: Bloomberg, NSDL, CMIE, RBI, Kotak Institutional Research, World Bank, Daily valuation provided by ICRA/CRISIL

As per estimates by the National Statistical Office (NSO) and guidance from the Reserve Bank of India (RBI), Indias GDP growth for FY26 is expected to be in the range of 7.4 - 7.6%, reflecting strong and broad-based economic momentum, despite global uncertainties such as geopolitical tensions and fluctuating commodity prices. This growth has been underpinned by strong government spending on infrastructure, including roads, railways and digital connectivity, as well as policy initiatives aimed at boosting manufacturing, such as the PLI schemes. The services sector continues to be the backbone of the economy, contributing more than half of GDP, with IT, financial services and telecom playing leading roles. At the same time, manufacturing has been gaining traction, supported by efforts to position India as a global supply chain alternative.

Overall, the Indian economy still presents a compelling picture of growth combined with certain manageable complexities. Its trajectory is shaped by a balance of domestic strengths and external vulnerabilities, with long-term prospects underpinned by resilient domestic demand, prudent fiscal policies, demographic dividend, accelerating digital transformation, infrastructure transformation and ongoing policy reforms. Retail investors continued to dominate market flows, supported by rising financial awareness and digital penetration.

Non-Banking Financial Companies (NBFCs) play a pivotal role in Indias financial ecosystem, catering to a wide spectrum of borrowers including MSMEs and financially underserved populations thereby advancing financial inclusion and generating employment across the country.

In FY 2026-27, the sector is expected to benefit from supportive macroeconomic measures. Budgetary tax reliefs and sustained repo rate cuts are likely to increase disposable income and enhance loan eligibility, offering a tailwind to credit expansion. Strategic public investments and digital lending innovations are also set to drive operational efficiency and sustained growth across the NBFC landscape.

With the RBIs supportive regulatory framework and initiatives aimed at promoting financial inclusion and literacy, the financial services sector showed sustained growth.

The Total Revenue for the financial year under review was Rs. 60.51 lakhs as against Rs. 55.00 lakhs for the previous financial year, but there was a decrease in the other income as compared with the last financial year. Hence, there is a loss after tax to the extent of Rs. 1.26 lakhs for the financial year under review as against the profit of Rs. 13.83 lakhs reported for the previous financial year.

Our Other Income comprises of income from investments which are generated from retained surpluses. Other Income was Rs. 29.88 lacs in FY 25-26 as compared to Rs. 62.60 lacs in FY 24-25.

There were no material changes and commitments affecting the financial position of the Company, between the end of the financial year and the date of this Report.

KEY FINANCIAL RATIOS

Particulars	FY26	FY25
a) Debt Service Coverage ratio (%)	1.30	2.65
b) Net Profit (%)	(2.09)	25.15
c) Return on Capital Employed (%)	0.62	3.00
d) Return on Investment (%)	(2.51)	17.10
e) Current Ratio	1.41	0.51
f) Debt Equity Ratio	0.21	0.36

OPPORTUNITY AND THREATS

The Indian industry across all sectors continues to undergo structural transformation, driven by increasing financialisation of savings, rapid digital adoption, evolving regulatory frameworks and changing investor behaviour. While the sector offers significant long-term growth potential supported by favourable demographics and rising market participation, it also faces challenges arising from competitive intensity, regulatory developments and market-linked volatility. In this dynamic environment, the ability to adapt, innovate and maintain robust risk management practices will be critical for sustained growth.

Increasing Retail Participation

India continues to witness a steady expansion in its investor base, with growing participation from Tier 2 and Tier 3 cities. Improved financial literacy, widespread smartphone penetration and seamless digital onboarding processes are driving this trend, creating a large and underpenetrated market opportunity. However, under the Threats, the presence of discount brokers and technology-led platforms has intensified competition, leading to pricing pressures and margin compression. Differentiation through value-added services and customer experience has become increasingly critical.

Risk Management & Internal Control System

The financial statements have been prepared and presented on going concern basis and in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (the Act) and other relevant provisions of the Act, as amended from time to time.

Industry & Outlook

Digital innovation and distribution expansion are further accelerating adoption. Fintech platforms, direct channels and seamless onboarding processes have made mutual funds more accessible, particularly in beyond-metro markets. This widening reach is enabling deeper penetration and fostering a more diversified investor base, which in turn enhances the resilience of the overall ecosystem.

A supportive regulatory framework continues to reinforce investor confidence. While regulatory changes may create near-term pressures, they contribute to the long-term sustainability and credibility of the industry. Overall, the industry is well positioned for continued expansion, supported by financialisation of savings, increasing formalisation of the economy and a growing preference for disciplined investing. The next phase of growth will be defined not only by scale but also by deeper investor engagement and the ability to serve a broader and more diverse investor base.

Your Company is taking continuous efforts to generate the growth drivers, considering the strategic priorities and keeping a track on information technology developments and compliances thereon.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis, describing our Companys objectives, outlook, opportunities, and expectations may constitute "Forward Looking Statements" within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied expectations or projections, among others. Several factors make a significant difference to our Companys operations including the government regulations, taxation and economic scenario affecting demand and supply, natural calamity and other such factors over which our Company does not have any direct control.

DALAL STREET INVESTMENTS LIMITED

Regd. Office: 409, Dev Plaza S V Road, Opp Fire Brigade Andheri West Mumbai 400 058.

Tel: +91 22 2620 1233

Email id: info@dalalstreetinvestments.com

CIN No:- L65990MH1977PLC357307

Website: www.dalalstreetinvestments.com