Dharni Capital Services Ltd Management Discussions

1. Global Economic Overview:

Global economic activity in FY 2024-25 remained moderately resilient despite challenges arising from geopolitical tensions, monetary policy lags, and uneven recovery paths. According to the IMF World Economic Outlook (April 2025), global GDP growth was estimated at 3.2%, a marginal improvement over the previous year.

Key trends:

• Inflationary pressures receded in advanced economies, enabling early interest rate cuts.

• The U.S. and Eurozone showed stable consumption and labour markets, though growth slowed.

• Chinas economy stabilized with around 4% growth, driven by fiscal support and export diversification.

• Continued Russia-Ukraine conflict and Middle East tensions pressured commodity markets, particularly oil and grains.

2. Indian Economic Overview

India retained its position among the fastest-growing major economies, recording 6.4% GDP growth in FY 2024-25. Growth was supported by:

• Strong consumption and urban demand

• Government-led infrastructure and capex

• Stable financial sector performance

Headline CPI inflation averaged 4.9%, within RBIs target range. As inflation cooled further in early 2025, the RBI reduced the repo rate to 5.50%, supporting credit expansion and investment sentiment.

Fiscal metrics remained healthy:

• GST collections rose by 12.3% year-on-year.

• Government capital expenditure was 3.4% of GDP.

• CAD remained below 1%, supported by service exports and capital inflows.

3. Financial Markets Overview

3.1 Money Market

Indias money markets remained stable in FY 2024-25 with:

• Gradual easing in short-term interest rates post the repo rate cuts.

• Improved liquidity conditions in H2FY25 due to RBIs open market operations.

• Robust demand for Treasury Bills and Commercial Papers, reflecting confidence in short-term instruments.

• Call money rates hovered near the policy rate (5.5% by March 2025), indicating smooth monetary transmission.

The shift toward a more accommodative policy stance toward the end of the fiscal year provided relief to borrowers and improved systemic liquidity.

3.2 Equity Markets

The Indian equity markets had another landmark year, driven by robust corporate earnings, macroeconomic stability, and strong retail and institutional participation.

Key developments:

• Nifty 50 surged by 21.5%; BSE Sensex gained 19.8% in FY 2025.

• Mid cap and Small cap indices outperformed benchmarks, continuing the broad-based rally.

• Market capitalization of BSE-listed companies reached 390 lakh crore (~US$ 4.7 trillion).

• Over 80 mainboard IPOs raised around US$ 9.2 billion, led by tech, infra, and BFSI sectors.

• SEBI reforms such as optional T+0 settlement, risk-based KYC, and enhanced disclosure norms improved transparency and investor protection.

Strong domestic inflows via mutual funds and SIPs offset intermittent foreign selling due to global volatility.

3.3 Mutual Funds

Indias mutual fund industry continued its rapid expansion:

• Assets Under Management (AUM) rose 23% to 65.74 lakh crore as of March 2025.

• Retail folios crossed 18.6 crore; total investor folios at 23.45 crore, indicating growing financial awareness.

• SIP contributions hit a record monthly inflow of 25,926 crore in March 2025.

• Equity inflows for the year stood at over 4.17 lakh crore, supported by market optimism and systematic investment culture.

There was significant uptake in passive funds, sectoral/thematic funds, and hybrid strategies. AMCs continued to expand into Tier II & III cities, backed by digitization and regulator-led investor awareness drives.

4. Companys Performance Overview 4.1 Standalone Financials

• Revenue (including other income): 722.39 lakhs

• Net Profit After Tax: 321.55 lakhs

(Previous Year: Revenue 925.94 lakhs : PAT 293.85 lakhs)

Despite lower revenues, the Company improved profitability through cost optimization, digital enablement, and refined focus on high-margin offerings.

4.2 Consolidated Financials

• Revenue (including other income): 913.79 lakhs

• Net Profit After Tax: 385.23lakhs

(Previous Year: Revenue 957.47 lakhs : PAT 310.71 lakhs)

The consolidated performance demonstrates strong operational fundamentals and strategic resilience, with consistent profitability growth despite a subdued topline.

The Company remains committed to delivering value through its capital services offerings including:

• Investment structuring and consulting

• Portfolio and wealth advisory

• Transaction support and capital raising

5. Sector Outlook and Strategic Priorities Emerging Opportunities

• AI/ML adoption in investment advisory and portfolio construction

• Growth in green finance, ESG products, and structured investments

• Expanding retail participation through digital wealth platforms

• Indias deepening integration into global bond and equity indices Key Risks

• Policy uncertainty and global capital flow volatility

• Rising household leverage

• Geopolitical shocks affecting investor sentiment

6. Strategic Direction for FY 2025-26

Area	Strategic Focus
Digital Transformation	Scale fintech capabilities and client-facing digital infrastructure
Product Innovation	Expand in structured, ESG-compliant and hybrid investment products
Client Diversification	Target MSMEs, HNIs, and new-age digital entrepreneurs
Operational Efficiency	Streamline internal systems, enhance compliance, reduce costs
Talent & Governance	Invest in skilled professionals and strengthen risk management

7. Conclusion

FY 2024-25 was a year of strategic consolidation and financial prudence for the Company. Backed by Indias stable macroeconomic environment, maturing capital markets, and increasing investor participation, the Company is well-positioned to pursue its growth agenda in FY 2025-26.

The management remains focused on innovation, transparency, and long-term value creation for its stakeholders.

CAUTIONARY STATEMENT

This document contains some statements about expected future events, financial and operating results of Dharni Capital Services Limited, which are forward looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements.