Dhruva Capital Services Ltd Management Discussions

FY 2026 represents the fiscal year 2025-26, from 1 April 2025 to 31 March 2026, and analogously for FY 2025 and previously such labelled years.

GLOBAL ECONOMY

The global economy is proving more resilient than anticipated despite persistent trade tensions and policy uncertainty, according to the World Banks latest Global Economic Prospects report. Global growth is projected to remain broadly steady over the next two years, easing to 2.6% in 2026 before rising to 2.7% in 2027, an upward revision from the June forecast. The resilience reflects better-than-expected growth-especially in the United States, which accounts for about two-thirds of the upward revision to the forecast in 2026. Even so, if these forecasts hold, the 2020s are on track to be the weakest decade for global growth since the 1960s. The sluggish pace is widening the gap in living standards across the world, the report finds: at the end of 2025, nearly all advanced economies enjoyed per capita incomes exceeding their 2019 levels, but about one in four developing economies had lower per capita incomes.

In 2025, growth was supported by a surge in trade ahead of policy changes and swift readjustments in global supply chains. These boosts are expected to fade in 2026 as trade and domestic demand soften. However, the easing global financial conditions and fiscal expansion in several large economies should help cushion the slowdown, according to the report. Global inflation is projected to edge down to 2.6% in 2026, reflecting softer labor markets and lower energy prices. Growth is expected to pick up in 2027 as trade flows adjust and policy uncertainty diminishes.

In 2026, growth in developing economies is expected to slow to 4% from 4.2% in 2025 before edging up to 4.1% in 2027 as trade tensions ease, commodity prices stabilize, financial conditions improve, and investment flows strengthen. Growth is projected to be higher in low-income countries, reaching an average of 5.6% over 2026-27, buoyed by firming domestic demand, recovering exports, and moderating inflation. However, this will not be sufficient to narrow the income gap between developing and advanced economies. Per capita income growth in developing economies is projected to be 3% in 2026-about a percentage point below its 2000-2019 average. At this pace, per capita income in developing economies is expected to be only 12% of the level in advanced economies.

OVERVIEW OF THE INDIAN ECONOMY

Indias economic journey over the past few years has been marked by remarkable growth and a steady rise in its position on the global stage. After overtaking the United Kingdom (UK) to become the fifth largest economy in Q1 FY23, India has continued this upward trajectory to surpass Japan in June 2025 to become the fourth largest economy in the world. With a nominal Gross Domestic Product (GDP) of Rs. 3,31,03,000 crore (US$ 3.78 trillion), Indias growth reflects a combination of strong domestic demand and policy reforms positioning the country as a key destination for global capital.

Further, India is projected to reach a GDP of Rs. 4,26,45,000 crore (US$ 5 trillion) by 2027 and is on course to surpass Germany by 2028. Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

For India, 2026 will be the year of resilience in domestic demand, decisive reforms in fiscal, monetary, and labour policies, and recalibrations in trade policies

Three of the biggest global risks for India in 2026 will come from:

US tariff policies and the conclusion of the India-US trade deal, which remains unpredictable.

Chinas slow recovery and its dominance in critical minerals, which India must monitor as it recalibrates its relationship with Beijing.

Geopolitical tensions in Central Asia that could disrupt commodity prices and key logistics routes, including the Red Sea corridor.

Domestically, the three biggest risks that need to be monitored are:

Poor transmission of policy rate cuts to credit growth.

A resurgence of inflation as demand picks up fast (and core has been above 4%).

Possible implications of lower tax revenues for fiscal consolidation this year.

Market Overview

Indias Real Gross Domestic Product (GDP) or GDP at Constant Prices stood at Rs. 47.89 lakh crore (US$ 544.20 billion) in Q1 of FY26, up from Rs. 44.42 lakh crore (US$ 504.77 billion) in Q1 FY25, registering a growth rate of 7.8%. Nominal GDP or GDP at Current Prices for the same period was estimated at Rs. 86.05 lakh crore (US$ 977.84 billion), compared to Rs. 79.08 lakh crore (US$ 898.64 billion) in the corresponding quarter of the previous year, showing a growth rate of 8.8%.

As on October 14, 2025, India is home to 123 unicorns, with six new startups achieving unicorn status in 2025.

Indias current account recorded a deficit of Rs. 21,288 crore (US$ 2.37 billion) in Q1 FY26 (April-June), compared to Rs. 76,282 crore (US$ 8.6 billion) in the same period of FY25, according to the Reserve Bank of India (RBI). The improvement reflects a narrower merchandise trade gap and steady growth in service exports. Exports fared remarkably well during the pandemic and aided recovery when all other growth engines were losing steam in terms of their contribution to GDP. Going forward, the contribution of merchandise exports may waver as several of Indias trade partners witness an economic slowdown. According to Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles Mr. Piyush Goyal, Indian exports are expected to reach US$ 1 trillion by 2030.

Indias near-term outlook

In its latest World Economic Outlook report, the IMF said Indias economy is now expected to grow by 7.3% in FY26, up 0.7 percentage points from its earlier estimate. The upgrade reflects better-than-expected growth in the third quarter and continued strength in the fourth quarter of the current fiscal year.

The International Monetary Fund (IMF) has raised its growth forecast for Indias economy in fiscal year 2026 by 0.7 percentage points to 7.3%, pointing to strong economic momentum. However, it expects growth to moderate to around 6.4% over the following two financial years as temporary cyclical factors ease.

The IMFs revised outlook follows an update by Indias National Statistics Office (NSO), which earlier this month raised its estimate for growth in the year ending March 31 to 7.4%. This was higher than the governments initial projection of 6.3% to 6.8%, reinforcing the view that the economy has performed better than expected.

INDUSTRY OVERVIEW OF

THE NON-NBANKING FINANCE SECTOR

Indias insurance industry is one of the fastest-growing sectors, driven by rising incomes, financial awareness, and supportive regulations. It ranks as the fifth largest life insurance market among emerging economies, growing 32-34% annually. The industry comprises 74 companies (26 life insurers and 35 non-life insurers) with LIC as the sole public life insurer and six public sector non-life insurers. GIC Re is the only national reinsurer. Distribution channels include corporate and individual agents, brokers, surveyors, and third-party administrators, with digital adoption expanding rapidly.

Indias insurance penetration remained strong at 3.7% in FY25, with non-life insurance maintaining a steady 1.0% share and life insurance continuing to contribute significantly at 2.7%. Insurance density increased from US$ 95 in FY24 to US$ 97 in FY25, led by higher life insurance density, reflecting improving insurance awareness and deeper market penetration. Government reforms, including 100% FDI, new product approvals without IRDAI nod, and digital distribution initiatives, have strengthened the sector. The pandemic highlighted insurances role in financial security, boosting demand for life, health, and SME products.

Today, Indias insurance industry is a dynamic mix of traditional and digital channels, innovative products, and growing private sector participation. With strong regulatory support and rising awareness, it is poised for continued growth, attracting domestic and foreign investments while advancing financial inclusion.

MARKET SIZE

The India insurance market attained a value of USD 359.12 Billion in 2025 and is projected to expand at a CAGR of 11.70% through 2035. The market is further expected to achieve USD 1085.85 Billion by 2035. Digitally enabled public infrastructure of the government, increasing the uptake of MSME insurance products, and growth in parametric insurance for climate change exposure are prompting insurance companies to offer tailor-made technologically powered insurance products in emerging markets.

Key Market Trends and Insights:

AI-driven underwriting and claims automation improve fraud detection, operational efficiency, personalized policies, and faster customer service across insurers nationwide.

Digital-first insurance distribution through fintech partnerships, embedded insurance, and omnichannel platforms expands accessibility, affordability, and customer engagement across India.

Innovative specialized products including climate, cyber, wellness-linked, and parametric insurance address evolving consumer risks and regulatory priorities.

Market Size & Forecast:

Market Size in 2025:	USD 359.12 Billion
Projected Market Size in 2035:	USD 1085.85 Billion
CAGR from 2026 to 2035:	11.70%
Fastest-Growing Regional Market:	South India

Types of Loans offered by NBFCs to Small Businesses

NBFCs play a vital role in addressing the financing needs of small businesses by offering a wide range of credit solutions tailored to their operational and growth requirements. The key loan products include:

Working Capital Loans: Short-term financing to meet day-to-day operational expenses such as inventory purchases, salaries, and supplier payments.

Business Term Loans: Medium- to long-term loans for business expansion, capacity enhancement, modernization, and capital expenditure.

Machinery and Equipment Loans: Financing for the purchase of machinery, equipment, and other productive assets to improve operational efficiency.

Commercial Vehicle Loans: Loans for the acquisition of commercial vehicles used for logistics, transportation, and business operations.

Loan Against Property (LAP): Secured loans provided against residential or commercial property to meet business funding requirements.

Technologies defining a new paradigm for FinTechs and NBFC

The financial services landscape is undergoing rapid transformation, driven by technological advancements that are reshaping customer expectations, operational efficiency, and risk management. FinTechs and NBFCs are increasingly leveraging digital technologies to enhance service delivery, improve credit assessment, strengthen compliance, and expand financial inclusion. Key technologies driving this transformation include:

Artificial Intelligence (AI) and Machine Learning (ML): AI and ML are enabling advanced credit underwriting, predictive analytics, fraud detection, portfolio monitoring, customer segmentation, and personalized financial solutions, leading to faster and more accurate lending decisions.

Digital Lending Platforms: End-to-end digital loan origination systems, e-KYC, e-signatures, automated documentation, and instant loan disbursement have significantly improved customer experience while reducing turnaround time and operational costs.

Alternative Data Analytics: The use of alternative data sources, including digital payment history, GST records, bank statement analysis, utility payments, and transaction data, has enhanced credit assessment for borrowers with limited formal credit histories.

Cloud Computing: Cloud-based infrastructure provides scalability, flexibility, cost efficiency, and enhanced business continuity while enabling rapid deployment of new products and seamless integration with digital ecosystems.

Application Programming Interfaces (APIs): API-based integrations facilitate secure connectivity with banks, payment gateways, account aggregators, credit bureaus, and government platforms, enabling faster customer onboarding and real-time data exchange.

Company overview

The Company is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI) under Section 45-IA of the Reserve Bank of India Act, 1934, and is engaged in the business of investment and financing. The Company holds a Certificate of Registration bearing Registration No. 10.00098, dated 1 September 1999, and is classified as an NBFC that does not accept public deposits.

The Company primarily focuses on providing financial assistance through loans and investments while maintaining prudent lending practices and effective risk management. It remains committed to delivering customer-centric financial solutions, strengthening asset quality, and creating long-term value for all stakeholders through sustainable business growth.

The Company operates independently and is neither a subsidiary of any holding company nor does it have any subsidiary company. Its standalone business model enables the management to focus on operational efficiency, disciplined capital allocation, regulatory compliance, and sustainable profitability.

During the Financial Year 2025 26, the Company continued to operate in compliance with the applicable provisions of the Companies Act, 2013, the Reserve Bank of India Act, 1934, the Master Directions issued by the RBI for NBFCs, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other applicable laws and regulations. The Company remains committed to maintaining robust governance practices, strengthening its internal control framework, embracing technology-driven processes, and pursuing sustainable growth while safeguarding the interests of its shareholders and other stakeholders.

Dhruva Capital Services Limited Announced Launch of NeoMoney Digital Lending Application on Google Play Store.

NeoMoney

Owned and operated by Dhruva Capital Services Limited , NeoMoney is a technology-enabled digital lending application developed to provide eligible customers with a seamless, secure and fully digital borrowing experience. The platform facilitates end-to-end digital loan processing, including customer onboarding, verification, loan application, approval, disbursement and repayment management through a user-friendly interface.

The successful publication of NeoMoney on the Google Play Store represents a significant milestone in the Companys ongoing digital transformation journey and its commitment towards enhancing financial inclusion through technology-driven financial services. The application has successfully completed Googles review and compliance requirements and is now available for download by the public.

The highlights of the financial results for the year ended March 31, 2026 and the corresponding figure for the previous year are as under: (Rs in Lakhs except EPS)

	Fiscal
Particulars
	2025-26	2024-25
Revenue from Operations	310.94	212.74
Other Income	1.65	25.78
Total Income	549.52	238.66
Total Expenditure	258.03	68.28
Profit before tax	183.99	170.38
Current Tax	18.35	44.29
Income tax Adjustment	-	-
Deferred Tax Adjustment	3.64	-
Profit after Tax	162.01	(110.84)
Basic Earnings per share (in )	2.25	(2.73)

KEY RATIOS
Particulars	FY 2026	FY2025
Revenue (Rs. in Lacs)	310.94	212.74
Net Profit After Tax (Rs. in Lacs)	162.01	126.09
Earnings per share (in Rs.)	2.25	(2.73)
EBITDA (Rs. in Lacs)	227.75	170.38
Net Profit Margin (%)	36.65	59.26
Return on Net worth	7.74	(2.73)
Current Ratio (times)	3.33	11.45
Debtors Turnover(times)	-	6.85
Debt-equity (times)	-	106.44
Interest Coverage Ratio(times)	-	3408

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis report detailing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

Important factors that could make a difference to the Companys operations include global and Indian demand supply conditions, raw material prices, finished goods prices, cyclical demand and pricing in the Companys products and their principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries with which the Company conducts business and other factors such as litigation and / or labor negotiations.