Edelweiss Financial Services Ltd Management Discussions

Macro-Economic Review and Outlook

FY26 unfolded against a backdrop of significant geopolitical and economic transition. Beyond the normal ebb and flow of economic cycles, the year was characterised by structural shifts that continued to reshape global trade, investment, and growth patterns. The global economy maintained a trajectory of moderate expansion despite heightened geopolitical tensions, evolving trade corridors, changing supply-chain architectures, and shifting capital flows. These developments accelerated the reconfiguration of economic relationships across regions, creating both new opportunities and emerging risks for businesses operating in an increasingly interconnected world. Growth across advanced economies moderated as the cumulative effects of monetary tightening weighed on consumption and investment, while emerging markets demonstrated relatively stronger resilience, supported by domestic demand.

According to the International Monetary Fund (IMF), global GDP growth is estimated at 3.0% for 2026. While this indicates stable global growth, it also underscores a continued divergence between advanced and emerging economies. Geopolitical tensions and evolving trade patterns remained key sources of uncertainty. Energy markets, in particular, experienced periodic volatility, with crude oil prices approaching $90-100 per barrel during episodes of geopolitical stress. Such volatility continued to pose macroeconomic risks, especially for oil-importing economies. Global trade growth remained moderate amid ongoing supply chain diversification and increasing regionalisation of production networks. In this environment, economies with strong domestic demand and improving infrastructure were better positioned to

Against this backdrop, India remained one of the fastest-growing major economies in FY26 with real GDP growth of 7.7% supported by resilient domestic demand, sustained public investment, and continued strength in the services sector. sustain growth momentum.

Domestic consumption remained the primary driver of economic activity, accounting for nearly 60% of GDP, and was supported by stable rural demand, normal monsoon conditions, and continued urban consumption.

Public investment continued to play a pivotal role in supporting economic momentum. Government capital expenditure is estimated at Rs11.2 trillion in FY26, or around 3.2% of GDP. Investments in transportation, logistics, and energy infrastructure are expected to enhance productivity and support long-term growth.

Policy initiatives aimed at strengthening domestic manufacturing capabilities including Production Linked Incentive (PLI) schemes across 14 sectors have further supported incremental investments and supply chain diversification. The services sector remained the largest contributor to economic output, accounting for 52% of Gross Value Added (GVA), with financial services, technology, and digital platforms continuing to expand steadily.

Inflation moderated sharply in the first half of FY26, reaching a low of 1.55% in July 2025, driven by favourable food prices. It gradually firmed up during the second half, ending FY26 at 3.40% in March 2026, while remaining within the RBIs 4% target throughout the year. The RBI adopted an accommodative monetary policy during FY26, reducing the policy repo rate by 100 bps to 5.25% amid easing inflation and moderating growth. System liquidity remained supportive of credit expansion, while the banking sector continued to exhibit

Indias external sector remained broadly stable despite intermittent pressures from global commodity price volatility. With around 85% of crude oil requirements met through imports, periods of elevated oil prices continued to influence the import bill. However, this was offset by strong services exports and resilient remittance inflows.

strong capitalisation and resilient asset quality. India remained the worlds largest recipient of remittances, with inflows estimated at approximately $135 billion in FY25. Foreign exchange reserves remained comfortable at $688 billion during FY26, providing a buffer against external shocks. The financial system remained stable, with bank credit growth of ~16% YoY in FY26 led by services sector, followed by personal loan segment, agriculture and allied activities, and industry.

Indias economic trajectory continues to be shaped by structural shifts that are deepening the financial ecosystem and expanding opportunities for the financial services sector. Financialisation of household savings is gradually accelerating, supporting growth across capital markets, asset management, insurance, and retirement products. Simultaneously, rapid digitalisation is enhancing financial access, efficiency, and customer engagement, with Unified Payments Interface (UPI) transactions exceeding 240 billion in FY26. The increasing adoption of artificial intelligence and advanced analytics is further transforming the sector by enabling personalised customer experiences, improving operational efficiency, strengthening risk management frameworks, and enhancing decision-making capabilities across financial institutions.

Continued infrastructure investment and supply chain diversification are supporting capital formation across sectors such as logistics, renewable energy, and manufacturing. Alongside increasing formalisation of the economy, these trends are expected to sustain credit demand, particularly across retail, MSME, and housing finance segments. In parallel, digital platforms, AI-enabled analytics, data-driven underwriting, and bank NBFC partnerships are facilitating more efficient credit delivery, improving customer acquisition and servicing capabilities, and expanding access to financial products across

Indias medium-term outlook remains favourable, supported by strong structural fundamentals, policy stability, and continued investment momentum. According to the International Monetary Fund, India is expected to remain the fastest-growing major economy globally, with growth projected at 6.4% over the medium term. underserved segments.

While external risks persist including geopolitical developments, commodity price volatility, and global financial conditions, Indias strong domestic demand base and deepening financial ecosystem provide a

Over the long term, economic progress will be shaped not only by cyclical dynamics but by the strength of institutions, markets, and policy frameworks that channel savings into productive investment. solid foundation for sustained growth.

As Indias economy continues to formalise and deepen, a stronger and more inclusive financial ecosystem supported by innovation, entrepreneurship, and capital formation will play a critical role in sustaining long-term growth.

Industry Structure and Developments

Alternative Assets (Private Credit and Real Assets)

Indias financial ecosystem is undergoing a structural transformation. For decades, household savings were synonymous with traditional bank deposits; today, we are witnessing a decisive migration towards Mutual Funds and Alternative Asset Management. Driven by rising financial sophistication, increasing disposable incomes, and a robust digital infrastructure, Indian investors are aggressively seeking alpha through diverse, non-traditional asset classes.

The Indian Alternative Investment Fund (AIF) space has matured into three distinct pillars:

Public Alternatives: Hedge Funds and Concentrated Public Equity Mandates.

Private Alternatives: Real Assets (Infrastructure/ Real Estate), Private Credit, and Private Equity.

Perpetual Strategies: Yield-generating Vehicles such as Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).

The demand for alternatives is fuelled by a dual-engine growth model:

Explosion of Private Wealth: Indias high-net-worth (HNI) population is growing, with 85,698 individuals having over $10 million in investable assets in 2024, placing India 4th globally. Further, India has UHNI (over $30 million) population of more than 19,800 in 2026. The countrys UHNIs are channeling over 70% of their portfolios into high-growth assets like equities, alternative investments, and private markets.

Institutional Depth: As the corpus of pension funds and insurance companies expand, there is an urgent need for long-term, yield-heavy assets. This institutional "dry powder" is finding a natural home in income-oriented alternative products.

Within Indias Private Alternatives investment landscape, over the last decade Real Assets and Private Credit have provided investors superior risk-adjusted returns leading to development of this market.

By 2030, India is set to become the worlds third-largest economy with a projected GDP of $7.3 trillion. This presents a massive $276 billion opportunity for Alternative Assets, creating an attractive investment $ 7.3 Tn environment. Within this, Real Assets Projected GDP and Private Credit in India are expected to reach 51% of the Indian Alternatives market by 2030 to $140 billion, leading the industrys growth.

Real Assets funds focus on development and monetisation of assets to release productive capital in the country and are a large investment opportunity. This exceptional growth trajectory positions Indias Private Alternative investment space as a preeminent destination for investors seeking risk-adjusted, long- term, high-potential returns.

Private Credit funds look to provide flexible financing solutions for meeting the growth and refinancing requirements for the corporates in India. They are becoming an integral part of the financial ecosystem and are playing an important role in development of debt markets in India. Private Credit delivered through Private Alternative funds with matched asset-liability structures solves a tangible problem for the borrowers.

Mutual Funds

Indias Mutual Fund industry is making significant strides, characterised by consistent growth and promising indicators. With a strong track record of performance and a diverse range of investment options, it is well-positioned to meet the needs of various investors. In FY26, Mutual Funds Industry AUM grew 12%, reaching Rs 73.7 trillion as of 31 March 2026, compared to Rs65.7 trillion as of 31 March 2025.

Asset Reconstruction

The Indian ARC industry enters FY27 within a more codi ed, board-accountable regulatory framework, even as banking system asset quality remains at multi-decade lows. RBIs ARC Directions, 2025 (updated March 10, 2026) emphasise board-approved policies, periodic oversight, outsourcing controls, recovery-agent conduct, fee governance, and tighter settlement norms.

Growth in FY27 will rely less on large corporate NPAs and more on disciplined acquisitions, faster retail recoveries, and selective corporate resolutions.

RBIs June 2026 Financial Stability Report shows bank GNPA improving to 1.8% as of March 2026 and projected at 1.9% by March 2027. ICRA also expects benign GNPAs of 2.0 2.1%, implying a limited pipeline

This growth is fuelled by a combination of factors, including the rising financial literacy among the populace, favourable performance of the stock market, and the convenience of digital investing. Notably, there is a rising involvement of young Indians in equity investments, driven by the desire to build wealth in a changing economic landscape. Technology has played a pivotal role in democratising access to mutual funds, offering simpli ed processes and user-friendly platforms that make investing more accessible to a wider audience.

Looking forward, the outlook for Indias Mutual Fund industry remains promising. With ample opportunities for expansion and the potential to attract new investors, the industry is poised for further growth. As more participants enter the market and innovative products emerge, we anticipate an exciting journey of wealth creation and financial empowerment. While challenges may arise, the resilience and adaptability of Indias Mutual Fund industry position it for continued success in the years ahead. With a strong foundation and a commitment to innovation, the industry is well-equipped to navigate obstacles and capitalise on emerging opportunities, driving sustained growth and prosperity for investors. of fresh large corporate stress, though pockets of risk remain in unsecured retail, MSMEs, and segments exposed to global shocks. Over the past decade, the overall composition of banking exposure has undergone significant changes. Credit growth is now led by the personal loan segment, which constituted 35% of the overall bank credit as of December 2025. In contrast, the industry segment has now decreased to 23%. For ARCs, this shift favours smaller-ticket but faster-turning retail, SME, secured MSME, and NBFC-originated assets over traditional large corporate exposures.

Credit growth is expected to remain healthy but moderate. CRISIL forecasts ~13% growth in FY27, led by MSME and retail; CareEdge estimates 13.0 14.5%, with deposit growth lagging at 11 12%, keeping credit-deposit ratios elevated. ICRA projects a more conservative 11.0 11.7% growth. Overall, the credit cycle remains constructive, though funding constraints and external risks could influence lending patterns and future stress. NBFC trends further support ARC sourcing.

ICRA expects retail AUM growth of 17 19% in FY26 and 16 18% in FY27, crossing Rs30 lakh crore, with pro tability at 2.3 2.5%.

Growth will be led by gold loans, vehicle nance, personal loans, and select SME segments, with manageable pressure in micro nance and unsecured

MSME Finance

The MSME sector remains a key pillar of Indias economy, contributing meaningfully to GDP, manufacturing output, exports, and employment generation. With around 9 crore MSMEs registered on the Udyam portal, the sector continues to benefit from formalisation, technology adoption, and policy support, which are expected to further strengthen its role in Indias growth trajectory over the medium term.

The Union Budget 2026 27 reinforced the Governments focus on scaling and strengthening MSMEs through measures such as the Rs10,000 crore SME Growth Fund, enhanced credit support mechanisms, mandatory TReDS onboarding for CPSE payments, and additional capital infusion into MSME-focused funds.

Despite strong policy support, a large MSME credit gap of Rs25 30 trillion persists, creating significant opportunity for formal lenders, particularly as secured retail. This sustains opportunities in granular, NBFC-originated stressed assets.

Recovery performance within ARCs is improving. CRISIL expects cumulative SR recovery rates to reach 90-92% in FY27 (vs. 83-85% in FY26, 68% in FY25). Retail recoveries are projected at 80-85%, with shorter timelines of 2.5 4 years vs. 5 6 years for corporates. This supports a strategy balancing selective wholesale exposures with higher-churn retail portfolios.

Overall, ARCs ability to adapt to regulation, diversify toward retail stress, and leverage operational and technological capabilities will be critical to sustaining growth and value creation.

MSME lending continues to improve through better underwriting, digital data usage, and collateral-backed lending structures.

NBFCs remain integral to this ecosystem, complementing banks by addressing niche, underserved, and semi-formal MSME segments. Their agility, regional depth, and customised product structures position them well to serve rst-time borrowers, self-employed customers, and small enterprises with evolving credit needs. NBFCs have also been at the forefront of leveraging digital public infrastructure, alternative credit assessment models, and co-lending arrangements, enabling faster turnaround times and broader financial inclusion.

With the RBI having cumulatively reduced policy rates since early 2025 and maintaining a stable monetary stance, borrowing costs have moderated, supporting liquidity conditions for NBFCs. While near-term margin pressures persist due to competitive pricing and higher funding costs, the overall sector outlook remains stable, underpinned by adequate capitalisation, improving asset quality, and disciplined growth strategies.

Housing Finance

The Indian housing nance sector continues to grow steadily, supported by resilient housing demand, rising urbanisation, and improving mortgage penetration. Individual housing loans stood at Rs37.2 lakh crore as of September 2025, growing 9.5% YoY, while disbursements remained healthy at Rs4.4 lakh crore in H1FY26. The housing loan-to-GDP ratio has steadily increased over the past decade, though mortgage penetration in India still remains below peer economies, indicating significant long-term growth potential. Housing prices have also remained rm across major cities, reflecting underlying demand strength.

The operating environment remains supportive, aided by government initiatives such as PMAY and infrastructure-led development in Tier II and III markets.

Regulatory support through priority sector lending norms, along with increasing digitisation, improved underwriting capabilities, and better data availability, continues to strengthen the reach and efficiency of formal housing finance.

Life Insurance

The life insurance industry delivered a landmark performance in FY26.

For the first time, new business premiums crossed the

Rs4-trillion mark, ending the year at Rs4.6 trillion, a 15.7% YoY growth. The Individual APE followed suit, recording a double-digit growth of 10% to reach Rs1.3 trillion.

While macroeconomic conditions will continue to influence sector growth, the medium-term outlook remains constructive.

Affordable housing, in particular, continues to be a key structural growth opportunity driven by urbanisation, rising aspirations, and underserved customer segments. Affordable Housing Finance Companies are well positioned to address this gap through specialised underwriting models, deeper regional presence, and customer-centric distribution.

At Nido, affordable housing remains central to our strategy, with a strong focus on Tier II and III markets through smaller ticket-size lending, doorstep servicing, simpli ed processes, and analytics-driven underwriting aimed at expanding access to formal credit.

While retail policy volumes grew by a modest 4.7% to 2.8 crore, the surge in premium value highlights a shift towards higher ticket sizes. Regulatory momentum defined the year. GST on life insurance premiums was removed, a significant policyholder-friendly move that improved affordability. The Sabka Bima Sabki Raksha Act raised the FDI limit in insurance to 100%, while also strengthening policyholder protection and improving ease of doing business. Bima Sugam, IRDAIs digital insurance marketplace, moved from blueprint to live platform, simplifying how consumers discover and purchase insurance. The industry has also begun preparations for adopting Ind AS 117, the new insurance accounting standard. This shift aligns India with global norms such as IFRS 17.

The year also saw considerable consolidation. Piramal Finance divested its entire stake in Shriram Life Insurance. Future Generali rebranded as Generali Central following Central Bank of Indias stake acquisition. Bajaj Finserv completed its buyout of Allianzs stakes, taking full ownership of its insurance ventures. Angel One entered the life insurance space through a joint venture with Singapore-based LivWell,

General Insurance

The Indian general insurance sector recorded YoY growth of 9.3% in FY26, a significant increase from the 6.2% growth seen in the previous year.

The growth reflects a more supportive market environment, alongside the industrys continued focus on operational ef ciency, cost discipline, and alignment with IRDAIs vision of a transparent and technology-driven ecosystem. Insurers continued to focus on reducing operational inef ciencies, maintaining cost discipline, and enhancing customer service.

Private general insurers maintained their leadership position with a stable market share of around 52%.

Standalone Health Insurers (SAHI) expanded their presence, increasing market share to 13.6% from 12.5% last year, driven by rising demand for retail health products. Public sector general insurers and specialised signalling continued interest from new-age financial services players.

With low penetration levels, India continues to present vast market opportunity. With its unique demographic advantage, digital grit, and a progressive regulatory landscape, the sector is expected to maintain a steady growth corridor of 10 12% over the medium term.

PSU insurers experienced a slight decline in their market share at 30.5% and 3.5% respectively.

Motor insurance grew by 9.2% YoY, supported by volume growth; however, insurers faced margin pressure due to pricing competition and rising repair costs. Health insurance reported robust growth of 15.4%, primarily led by retail demand. At the same time, the push for regulatory standardisation added stress to underwriting margins and loss ratios. The Fire Insurance segment saw a 13.4% increase, supported by volume growth affected by premium rate softening and increased competitive intensity. Crop insurance, despite a degrowth by 27.2%, continued to contribute approximately 6.5% of total industry premiums, remaining a strategically significant line of business due to its rural outreach and EOM benefits.

The industry began preparations for adopting Ind AS 117, the new insurance accounting standard. Insurers initiated system alignments and operational updates to ensure a smooth transition and regulatory compliance.

The Indian general insurance industry remains fundamentally resilient. Regulatory reforms introduced during FY26 are expected to enhance governance structures, improve customer outcomes, and strengthen the sectors long-term sustainability. Continued investment in digital infrastructure, innovation, and customer-centric practices will be critical in navigating future growth opportunities.

Edelweiss Outlook

While global markets continue to contend with geopolitical uncertainties, evolving trade dynamics and interest-rate volatility, Indias structural growth drivers remain intact, creating a conducive environment for long-term financial services businesses.

Against this backdrop, Edelweiss remains focused on executing its strategy of building scalable, diversified, and capital-efficient financial-services franchises. Over the past several years, Edelweiss has systematically transformed its business mix, strengthened its balance sheet, reduced legacy exposures, and invested in building long-duration businesses across asset management, credit, and insurance businesses. As these investments mature, Edelweiss is increasingly positioned to benefit from operating leverage, improving profitability and value-unlocking opportunities.

Edelweiss enters FY27 with strong momentum across its diversified businesses, supported by improving profitability, operating leverage and disciplined execution. The Alternatives platform is expected to remain a key growth driver, benefiting from robust fundraising, increasing institutional participation, and value-unlocking initiatives, including the proposed EAAA IPO. The Mutual Fund business remains well positioned for growth, driven by increasing retail participation and SIP flows, with continued emphasis on investment performance, distribution reach, digital capabilities, and product diversification. The Insurance businesses are approaching a critical inflection point and are expected to achieve breakeven in FY27, supported by continued scale-up, improving operating efficiencies, and a maturing business franchise. ARC business remains focused on optimising capital deployment across opportunities with attractive risk-adjusted returns, while driving recoveries and resolutions to support strong profitability and return on equity. MSME and Housing Finance businesses are well positioned to capitalise on favourable industry dynamics, supported by sustained growth in disbursements, expanding customer reach, and disciplined risk management. Concurrently, Edelweiss remains focused on reducing corporate net debt, enhancing capital efficiency and unlocking value through strategic monetisation and partnership opportunities. These initiatives are expected to strengthen earnings quality, improve financial flexibility and support long-term shareholder value creation.

Opportunities

The financial services industry in FY27 is expected to be shaped by the interplay of structural growth drivers including a strengthening investment cycle, continued nancialisation of savings, digital transformation and cyclical factors such as asset quality trends, funding conditions, and evolving regulatory requirements.

Infrastructure, Manufacturing and Investment Cycle

Indias growth outlook continues to be supported by sustained public infrastructure spending, manufacturing expansion, energy transition initiatives, and improving private sector capital expenditure. Government programs aimed at strengthening domestic manufacturing and enhancing logistics and infrastructure are expected to drive incremental investments across the economy. The continued expansion of infrastructure, industrial, renewable energy, and urban development projects is creating significant financing requirements. This presents opportunities for financial institutions across project nance, structured credit, working capital nancing, capital market fundraising, and advisory services. The increasing scale and complexity of investment projects is also driving demand for alternative financing solutions, including private credit and infrastructure-focused investment vehicles. Financial institutions with diversi ed financing capabilities and capital market access are well positioned to benefit from this evolving investment cycle.

Financialisation of Household Savings and Wealth Creation

India is witnessing a steady expansion of its af uent and high-net-worth investor base, supported by economic growth, rising entrepreneurship, increasing nancialisation of household savings, and greater participation in capital markets. Growing financial wealth is driving demand for a wider range of investment, advisory, and wealth management solutions. This trend presents significant opportunities for wealth managers, asset managers, and financial intermediaries to offer diversi ed investment products, including portfolio management services, alternative investment funds, structured solutions, and global investment opportunities. Institutions with strong advisory capabilities, product breadth, and distribution networks are well positioned to benefit from the evolving wealth landscape.

Technology-Led Transformation of Financial Services

The increasing adoption of digital technologies, data analytics, automation, and arti cial intelligence is reshaping the financial services landscape. Technology-enabled distribution, underwriting, servicing, and risk management are enhancing operational ef ciency, improving customer experience, and enabling more informed decision-making.

The continued evolution of digital ecosystems and platform-based engagement models presents opportunities for financial institutions to expand customer reach, improve productivity, reduce operating costs, and strengthen risk management capabilities. Institutions that effectively leverage technology and data-driven insights are well positioned to achieve scalable growth and sustainable competitive differentiation.

Threats

Global Financial Market Volatility

Global macroeconomic uncertainties, including shifts in interest rate cycles across major economies, geopolitical tensions, trade policy developments, and commodity price volatility, may contribute to periods of heightened market uncertainty. Such conditions can influence global capital flows, currency movements, market liquidity, and investor sentiment across asset classes. In an increasingly interconnected financial system, prolonged volatility may impact investment activity, funding availability and costs, asset valuations, and overall risk appetite. These factors could, in turn, affect credit demand, capital market activity, and the operating environment for financial institutions, necessitating greater focus on risk management, liquidity planning, and capital allocation.

Technology Disruption and Evolving Competitive Landscape

Rapid advances in technology continue to transform the financial services industry, enabling new business models, digital distribution channels, and data-driven customer engagement. Fintech rms and technology-enabled competitors are increasingly leveraging innovation to enhance customer experience, improve operating ef ciency, and expand access to financial services. As technology becomes increasingly central to customer acquisition, risk management, and service delivery, financial institutions that are unable to adapt to changing customer expectations or invest effectively in digital capabilities may face increased competitive pressures and potential loss of market share.

Regulatory Tightening

Regulators globally and in India are increasingly focused on strengthening oversight across the financial system, with greater emphasis on consumer protection, digital lending practices, leverage and capital adequacy, and governance standards. While these measures enhance the resilience and transparency of the financial ecosystem, they also raise compliance requirements and operational expectations for financial institutions. As a result, rms may need to balance growth ambitions with stronger risk management frameworks and regulatory discipline.

Performance Highlights

FY26 was a year of strong execution and strategic progress for the company. While the reported financials reflect the impact of one-time exceptional items, including GST-related adjustments and the implementation of the new labour code, the underlying operating momentum remained steady.

The Company continued to strengthen its profitability while advancing its transformation into a more diversified and capital-efficient financial services platform. During the year, key strategic milestones were achieved, including acquisition of 10% stake by WestBridge Capital in the mutual fund business, as well as the sale of a 4.4% stake in EAAA, reinforcing the strength and growth potential of these franchises.

Across businesses, performance was robust and aligned with strategic priorities. The Alternative Asset Management business reported a 32% YoY growth in FPAUM to Rs44,710 crore, supported by strong fund-raising of Rs10,855 crore, up 64% YoY. The Mutual Fund business witnessed healthy growth in equity AUM, which increased by 25% YoY to Rs78,000 crore, while the SIP book expanded by 58% YoY to Rs623 crore. The Asset Reconstruction business delivered recoveries of Rs8,590 crore, with the share of retail assets in capital employed rising to 29%. In the MSME segment, disbursements tripled YoY to Rs1,051 crore, alongside a calibrated reduction in the wholesale book by 30% YoY increasing by 8.2% YoY to Rs1,750 crore, reflecting a shift towards granular lending.

The Housing Finance business maintained its growth trajectory, with disbursements increasing by 27% YoY to Rs2,171 crore and AUM growing by 16% YoY to Rs4,906 crore. In the Insurance segment, General Insurance gross written premium grew by 28% YoY to Rs1,294 crore, with 872,901 policies issued during the year, marking a 47% YoY increase. The Life Insurance business reported a 6% YoY growth in gross premium to Rs2,221 crore, while AUM increased by 11% YoY to Rs10,425 crore. The insurance businesses remain on track to achieve breakeven by FY27, with combined losses for the year ended March 2026 reducing by 23% over the past two years, reflecting improving operating leverage and scale benefits.

The Company reported a consolidated Profit After Tax (PAT) before minority interest of Rs680 crore for FY26, reflecting resilient underlying performance supported by steady operating momentum and disciplined execution. Total income for the year increased to Rs10,865 crore, compared to Rs9,519 crore in FY25, driven by growth across key business segments as well as gains arising from strategic stake sale transactions.

Interest income grew modestly by 2.8% YoY to Rs2,767 crore in FY26, as against Rs2,690 crore in FY25, in line with the Companys strategic shift towards asset-light retail credit models. The insurance businesses continued their growth trajectory, with net premium income increasing by 8.2% YoY to Rs2,835 crore in FY26 from Rs2,620 crore in FY25, indicating sustained business momentum.

Total expenses for FY26 stood at Rs9,962 crore, an increase of 14.3% over Rs8,717 crore in FY25. Finance costs declined by 1.8% to Rs2,492 crore from Rs2,537 crore in the previous year, supported by effective liability management, while other operating expenses remained broadly stable, reflecting improved operating ef ciency and scalability. During the year, the Company adopted a prudent approach towards risk recognition and provisioning. Impairments, including changes in valuation of credit-impaired loans, increased to Rs1,700 crore in FY26 from Rs507 crore in FY25. This included prudent management overlay and conservative provisions of Rs1,400 crore recognised in Q3FY26, considered on stress-tested scenarios considering macroeconomic uncertainties and evolving geopolitical conditions, revised cash flows, and cautious asset quality assessment.

On the balance sheet front, consolidated net debt decreased to Rs10,430 crore as of March 31, 2026, from Rs11,170 crore in the previous year. The Company maintained adequate liquidity throughout the year, with available resources averaging approximately 38% of total borrowings. The Company remains focused on further optimising its capital structure and reducing corporate net debt going forward.

The diluted Earnings Per Share (EPS) improved to Rs7.15 in FY26 from Rs5.81 in FY25, supported by both operating performance and value-unlocking initiatives. The book value per share stood at Rs49 as at the end of FY26. The Board of Directors has recommended a nal dividend of Rs1.50 per equity share, resulting in a total dividend of Rs1.50 per equity share for FY26, subject to shareholder approval.

Liquidity and ALM Pro le

We ensure that an adequate liquidity cushion is maintained to take care of all maturing liabilities with a focus on optimum revenue generation from liquid assets.

At the end of FY26, we maintained available liquidity of Rs 6,488 crore. This included overnight liquid assets of Rs2,412 crore, high-quality liquid assets of over Rs3,725 crore which can be liquidated within a short span (if the need arises), and undrawn committed bank credit lines of Rs351 crore.

Over the years, we have demonstrated a strong track record of fundraising from both retail and institutional lenders. With the help of public issues and our retail borrowing programmes, we have increased the proportion of funding through retail sources from 52% to 63% in the past one year.

On the asset side, we continue to focus on and reorient our balance sheet towards retail growth. As wholesale recoveries remain slightly slower than anticipated, we have optimised the tenure and focused on medium to long-term borrowings. Long-term borrowings now stand at 69% of the total debt.

All these steps have ensured that we maintain a positive ALM gap across all time buckets.

Analysis of Significant Changes in Financial Ratios

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, below is the additional information in respect of the financial parameters that are applicable to our company.

Details of significant changes in key financial ratios:

Debt Equity Ratio

The Debt Equity Ratio as on March 31, 2026 stood at 3.11 times (vs 3.02 times as on March 31, 2025). Excluding the liquid treasury assets that we hold for liquidity management; the Net Gearing Ratio is 1.81 times as on March 2026 (vs 1.89 times as on March 31, 2025)

Pro t Before Tax Margin (%)

The Pro t Before Tax Margin for FY26 was 7.6% compared to 8.4% in FY25.

Net Pro t Margin (%)

The Pro t After Tax Margin for FY26 stood at 6.3% compared to 5.6% for FY25.

Other parameters, namely Debtors Turnover, Inventory Turnover, Interest Coverage Ratio, and Current Ratio, are not applicable to our Company.

Details of any changes in Return on Net Worth as compared to the previous financial year:

Return on Net Worth, i.e. Return on Equity (RoE), Post MI on consolidated basis for FY26 stood at 11.9% compared to 8.2% for FY25.

The distribution of earnings among these businesses

Business	Year Ended March 2026	Year Ended March 2025
Alternative Asset Management	265	230
Mutual Fund	85	53
Asset Reconstruction	350	385
NBFC	14	55
Housing Finance	23	19
General Insurance	(57)	(48)
Life Insurance	(159)	(127)
Operating Business PAT	520	566
Of which Exceptional Items in Businesses*	(143)	0
Operating Business PAT w/o Exceptional Items	663	566
Corporate PAT	161	(31)
EFSL Consolidated PAT (Pre MI)	680	536
(Less) Minority Shareholders PAT	134	137
EFSL Consolidated PAT (Post MI)	547	399

*Exceptional Items include ESOP expenses and one-time Labour Code impact across businesses and GST impact in Life Insurance

Alternative Asset Management

EAAA India Alternatives Limited (EAAA), is one of the leading alternatives platforms in India, with an AUM of

~ Rs72,700 crore as of March 31, 2026. With over 16 years of experience, EAAA operates a diversi ed, multi-strategy platform focusing on Real Assets and Private Credit among other strategies. We cater to a diverse client base of global and domestic institutional clients, UHNIs, HNIs, and family of ces.

Our Fee paying AUM has grown at a CAGR of 25% over last 5 years. During the year, we have raised Rs10,855 crore. This strong business performance helped in the rise of Total Revenue which rose 23% YoY to Rs964 crore in FY26 and a Pro t After Tax of Rs265 crore. With strong governance and focus on robust risk management, the total deployment was Rs8,257 crore, and realisation was ~Rs11,800 crore across strategies in FY26.

Real Assets

EAAAs Real Assets strategy invests in infrastructure and commercial real estate assets with low counterparty risk and long residual tenures. The sub-strategies include Infrastructure Yield, Commercial Real Estate Yield, Perpetual Capital (InvITs), and Energy Transition. Real Assets FPAUM grew YoY by 35% to Rs25,403 crore. The maiden Energy Transition Fund completed its first close in FY26 and the fundraise currently stands at

~ Rs1700 crore where we onboarded the European

Investment Bank (EIB) as an anchor investor of the fund. Energy Transition Fund offers investors a long-term investment vehicle and an opportunity to participate in Indias sustainable energy transition. The Infrastructure and Real Assets Fund (IRAF) also completed its nal close with a fundraise of Rs2,494 crore. The second fund of EAAAs Infrastructure Yield Strategy moved closer to full deployment with a marquee deal by acquiring ve fully operational Hybrid Annuity Model (HAM) road assets from the Ashoka Group, spanning ~1,600 lane-km across 5 Indian states. This transaction represents a significant milestone in the planned acquisition of Ashokas 11-road HAM portfolio. Anzen (Energy InvIT) Preferential issue: Commitments received for the full issue amount Rs696 crore and Citius (Transport InvIT) successfully completed its IPO in April 2026, with the issue consisting entirely of a fresh offer of Rs1,105 crore.

EAAAs Infrastructure Yield Fund also won the "Best Overall Performance of the Year 2026" at the IVCA Alternate Capital Excellence Awards.

Private Credit

EAAAs Private Credit strategy offers tailored credit solutions to corporates, projects, or sponsors underserved by traditional credit providers.

The sub- strategies include Performing Credit, Special Situations, Real Estate Credit, and Investment Grade Credit. Private Credit FPAUM grew YoY by 29% to Rs19,307 crore. In FY26, Private Credit strategy saw significant expansion with a fundraise of Rs4,153 crore across multiple funds. This growth builds upon the momentum of the previous scal year, highlighted by the successful fund raise of SSIF Rs3,080 crore, EAAA was also part of the "PDI Top 200 Private Debt Fundraisers" for the 5th consecutive year in 2025.

EAAA is a scaled and experienced player in the large and expanding Indian Real Assets and Private Credit market. We have a diversi ed, multi-strategy platform offering a wide range of alternative investment products, accompanied by a consistent track record. We serve a diverse and longstanding client base with significant potential to scale their commitments.

Industry Accolades

Beyond our fundraising and performance accolades, EAAA Alternatives continues to gain global and regional recognition. The rm was named "Asset Management Company of the Year - India (Domestic)" in the Market Category by Asian Investor. Furthermore, at the LACP

Mutual Fund

At Edelweiss Mutual Fund, our values are centered around creating simple yet innovative solutions that genuinely address the needs of our investors. Our core product philosophy embodies simplicity, boldness, pioneering innovation, and a customer- first approach. We prioritise making complex financial concepts accessible, empowering investors to make con dent, informed decisions. Our diverse product portfolio, including equity, debt, balanced, and liquid funds, caters to various financial goals and risk appetites.

Our technology- enabled institutional platform, dedicated portfolio operating and management platform, and comprehensive risk management systems further solidify their position. Additionally, EAAA is led by a seasoned management team with extensive industry experience, which contributes to our continued success.

We remain well-positioned for sustained growth in FY27. Our strategy encompasses expanding and deepening our client base across geographies by leveraging our in-house coverage team and global distribution platform. We aim to further develop our product offerings, particularly those related to income and yield strategies, and continue to leverage technology to improve our operational ef ciency, client experience, and strengthen our competitive position. Additionally, we focus on active asset management by building on our operational capabilities and utilising technology, delivering sustained investment performance, and portfolio differentiation. Furthermore, we aim to strengthen our employee value proposition to attract and retain talent.

2024/25 Vision Awards, EAAA earned a "Technical Achievement Award" and a "Gold Award" for our Annual Report 2025, which was ranked among the Top 100 reports worldwide.

Committed to innovation, we strive to set industry benchmarks with our inventive solutions, consistently enhancing our offerings to deliver superior value. Our experienced team ensures consistent performance, maintaining our reputation as a top-tier asset management company.

Our growth journey is anchored by a solid foundation and driven by three distinct investment capabilities that de ne our excellence. Our fundamental investing strategies, guided by the FAIR framework, delve deeply into market fundamentals to unearth high-potential opportunities. Our factor-based quantitative investing strategies leverage comprehensive data analysis to pinpoint lucrative investment opportunities. Lastly, our xed-income strategies use the CLEAR framework and target high-quality assets that provide sustainable and resilient returns. We have a robust risk management framework serving as a strong foundation in which these aspects are rmly grounded.

Our exceptional investment team, with over 300 years of collective experience, equips us to navigate market complexities and seize opportunities with con dence. Our focus has always been on strengthening our internal investment processes and how they are communicated to customers and distribution partners. This commitment is reflected in our performance, with consistent (Q1/Q2) fund performance for our Long-Only & Hybrid Funds in the 3/5-year horizon.

This dual focus on process excellence and stakeholder trust builds strong relationships ampli es our impact in the investment community, and forms the bedrock of our sustained growth and success. As a result of these factors, we have established

Asset Reconstruction

Edelweiss ARC plays a significant role in managing stressed assets in India, with AUM of Rs9,230 crore as of March 2026. We prioritise sound governance, compliance, and risk oversight to uphold transparency and build trust, essential in navigating the challenges of stressed assets.

EARC uses a multi-pronged approach to resolve stressed assets, primarily aiming to Revive or Reconstruct viable businesses that need additional funding. Depending on the speci cs of each asset, we also consider settlement, enforcement of security interests, and resolution through IBC to achieve the best outcomes for stakeholders. We continue to seek out potential turnaround situations based on borrowers with sound pro les and adequate cash flow and collateral backing. Our medium-term strategy involves making acquisitions at a steady pace while also exploring ourselves as a trusted and reputable asset management company. We are the 13th largest AMC in the country and continue to be one of the fastest growing among the top 15 Mutual Fund houses in the industry. Pro tability of this business grew by 60% YoY to Rs85 crore in FY26.

We manage an AUM of Rs1.58 lakh crore as on March 2026, a growth of 12% over the AUM of Rs1.42 lakh crore a year ago. Our AUM of BHARAT Bond crossed Rs 1 lakh crore as on March 2026, a growth of 24%.

Our Equity and Hybrid AUM grew by 25% in FY26 to Rs78,000 crore in assets, from Rs62,500 crore as on March 2025. We had the best year ever in equity flows with Gross Equity flows of over Rs25,000 crore and Net Equity flows of Rs16,000 crore.

This was supported by a strong growth in our SIP book with 58% YoY growth to Rs623 crore. We catered to 37.2 lakh active folios in FY26, compared to 25.5 lakh at the end of FY25, an increase of 46% YoY vs industry growth at 17%. We were the among the first AMCs to launch a Hybrid Long-Short Strategy SIF during the year. partnerships with investors, where our initial investment can be as low as 2.5% on certain deals, allowing us to focus on fee-based income. Our experienced and skilled team is a key factor in our strong market position and consistent performance over time.

Our acquisitions continue to focus on operating assets that have the potential for revival. Acquisition momentum picked up in FY26, during which we successfully acquired assets with an aggregate book value of Rs6,544 crore for a consideration of Rs493 crore. Of this, EARC has invested Rs430 crore. During the financial year 2025-26, the Companys recovery performance remained strong and continued to demonstrate our conviction and commitment towards resolving, reconstructing, and reviving stressed assets. The Company recovered Rs8,590 crore during the financial year.

Of the total recoveries achieved, Rs725 crore, representing 8%, was contributed by the retail portfolio.

The Board reviewed and approved the write-down of AUM undertaken in line with the policy. In the FY26 the Company wrote down Rs1,091 crore of AUM while also recovering Rs36 crore from prior write-downs, resulting in a net write-down of Rs1,055 crore. These adjustments are aligned with current recovery projections and the trusts waterfall mechanism. Importantly, this write-down had no adverse impact on the Companys pro tability, as adequate provisions were prudently made earlier through fair valuation. This approach reinforces the Companys strong financial discipline and ensures that the reported results accurately reflect the underlying asset quality without any further impact on earnings.

Building on the strong performance of our retail portfolio in recent years, FY26 further reinforced our strategic emphasis on this segment.

NBFC

Our NBFC business continues to focus on responsible, risk-adjusted growth, with MSME lending as a core strategic pillar. We remain committed to building a diversi ed, granular, and technology-led lending franchise, offering both secured and selective unsecured solutions tailored to the evolving needs of micro and small enterprises.

During FY26, our MSME business witnessed improving loan origination momentum, supported by stronger sourcing, enhanced underwriting frameworks, and deeper engagement across priority SME segments. We continued to focus on asset quality, prudent risk selection, and portfolio granularity, ensuring resilience across business cycles. Technology remains central to our operating model, enabling faster credit decisions, improved customer experience, and tighter early warning and monitoring mechanisms.

ECLF aims to bridge the credit gap faced by MSMEs by leveraging technology to offer customised and exible financial solutions.

Retail assets continued to be the cornerstone of our acquisition strategy, with 100% of acquisitions in Q1, Q2, and Q4 coming from retail. This unwavering focus highlights the sustained momentum and confidence in the retail platform.

15% of total FY26 acquisitions attributable to corporate assets, and the remaining 85% was driven by retail. This disciplined allocation underscores our intent to deepen geographic diversi cation, broaden the mix of retail asset types, and strengthen the resilience of our portfolio.

The continued skew towards retail is aligned with our objectives of enhancing cash flow stability, improving risk-adjusted returns, and supporting long-term value creation. FY26 thus marks another year of consistent execution, reinforcing retail as a key growth engine and a critical driver of overall portfolio valuation.

In the MSME segment, total disbursements for FY26 stood at Rs1,051 crore, while total AUM of NBFC segment was Rs3,269 crore as of March 31, 2026.

As part of our strategic transition towards a more granular and scalable MSME portfolio, we continued to optimise legacy exposures. Recoveries remain on track, and the provision is expected to be progressively written back to equity over the medium term. The balance sheet continues to remain well-capitalised with a comfortable liquidity position, providing adequate headroom for growth.

Looking ahead, we expect MSME disbursement momentum to strengthen further, driven by:

Expansion in secured MSME products, including launch of new product categories.

Continued investments in digital origination, data-driven credit models, and risk governance.

Portfolio optimisation and gradual run-down of the discontinued wholesale lending book through recoveries.

With such huge funding requirement across Indias MSME ecosystem, we see significant opportunity to scale our Priority Sector Lending (PSL)-aligned MSME offerings.Our strategic objective remains to establish ourselves as a trusted, long-term financial partner for

Indias micro and small enterprises by delivering simpli ed, exible, and reliable credit solutions.

Our vision is to be a trusted financial partner to the micro, small, and medium enterprises in their growth journey to success.

Housing Finance

Nido Home Finance is a focused affordable housing nance platform catering to underserved low- and middle-income segments through a diversi ed product suite, including home purchase, self-construction, home improvement loans, and loans against property, along with selective developer nancing. The Company operates through a network of 68 branches structured on a hub-and-spoke model, enabling deep market penetration across metros and non-metros and strengthening last-mile connectivity.

The business continues to scale with a focus on nancially underserved segments, reflected in a customer mix where 39% of the portfolio comprises

Life Insurance

FY26 was a year of deliberate and disciplined progress for Edelweiss Life Insurance (ELI), marked by steady execution amid a challenging external environment shaped by geopolitical uncertainties and evolving regulatory dynamics. Against this backdrop, ELI continued to advance with clarity of purpose and new-to-credit borrowers, 68% of accounts are from non-metro markets, and 53% of incremental sourcing during the year was from self-employed customers.

During the year, the Company announced a Rs2,100 crore strategic investment, including a primary capital infusion of Rs1,500 crore from institutional investors, marking a significant milestone. This is expected to strengthen the capital base and support disciplined growth, with continued emphasis on underwriting rigour, asset quality, and risk management. In parallel, the Company has undertaken targeted investments in technology, people, and processes to enhance execution capability and improve operating ef ciency.

The company reported disbursements of Rs2,171 crore, with an AUM of Rs4,906 crore as of March 31, 2026. The Company maintains stable fundamentals, with a CRAR of 28.8%, Net NPA of 1.9%, and collection ef ciency of 99.5%. Going forward, the Company remains well positioned to scale in the affordable housing segment, supported by a strengthened capital base and continued focus on sustainable growth, asset quality, and operational ef ciency.

delivering sustained growth. Performance during the year was anchored in strengthening customer trust and delivering consistent outcomes, reflected in AUM crossing Rs10,000 crore to reach Rs10,425 crore, alongside sustained delivery of value through the 14th consecutive year of bonus payouts.

ELI maintained a strong customer-centric focus, reflected in a Claim Settlement Ratio of 99.31% with zero dependency and continued enhancement of service capabilities through initiatives such as Insta Claims, which accounted for 37% of total claims. Customer experience metrics remained robust, with Net Promoter Score improving to 71 and grievance ratios declining to 1.28%.

Growth remained steady, with Individual APE at

Rs605 crore and Gross Premium at Rs2,221 crore, supported by a balanced product mix tilted toward long-duration traditional products.

Distribution expansion and productivity improvements remained key priorities, with a strengthened multi-channel architecture spanning ~71,000 advisors, 94 branches, and over 2,500 partner counters.

ELI maintained a disciplined focus on product mix and quality of business, as reflected in stable PAR

General Insurance

Zuno continued to be amongst the fastest growing private insurers in FY26, with its GDPI growing at 23% as compared to general insurance industry growth of 8%. In our key product segment, Motor Insurance, the company grew at a significantly faster pace than

Zuno achieved a remarkable 27% growth in Motor segment GDPI for FY26, compared to the industrys modest 9% increase. industry. However, the Health segment saw at growth, while the broader industry recorded 15% growth in this area. Throughout the year, we remained committed to prioritising customer-centricity, which is reflected in our strong Net Promoter Score (NPS) of 56 in FY26. Enhancing customer trust and improving service responsiveness were central to our strategy and drove many of our initiatives. We continue to expand our revenue and service partnerships across both motor and health segments, staying vigilant to new developments contribution and improvement in long-pay mix. Concurrently, investments in technology and digital capabilities further strengthened operational resilience, improved service ef ciency, ensured regulatory readiness, and enhanced data-driven decision-making, while also reinforcing the Companys cybersecurity and Risk Management framework.

Customer awareness and financial inclusion initiatives continued to be advanced through targeted campaigns and on-ground outreach, reaching over 50,000 individuals. In parallel, sustained focus on people and culture led to measurable progress in talent development, internal mobility, and diversity, with continued recognition as a Great Place to Work.

Looking ahead, ELI remains focused on scaling growth through distribution expansion and productivity gains, driving cost ef ciencies, strengthening product innovation, and maintaining disciplined sales quality, with a clear objective of achieving pro tability in FY27 and building a strong foundation for long-term growth. and trends within these markets. Our client base since inception has grown impressively, now exceeding 15 million customers. In terms of business accomplishments during FY26, we made significant progress along several key vectors of differentiation.

A major highlight was the launch of an industry- first base motor insurance product embedded with Pay- How-You-Drive (PHYD) features. This innovative offering enables customers to monitor their driving scores and compare themselves against peers, encouraging safer driving habits, reducing claim ratios, and deepening policyholder engagement. These products were supported by agile development processes, allowing us to accelerate our go-to-market capabilities.

On the distribution front, we focused heavily on digitally enabling partner onboarding using API-led frameworks, which reduced integration timelines and increased operational ef ciency. Our re insurance line showed impressive growth of 16% during FY26, outperforming the industry, which experienced 13% growth. We also implemented automated reconciliation of policy bookings across digital platforms, minimising manual errors, improving reporting accuracy, and strengthening financial controls.

Proactive measures were undertaken to optimise Expenses of Management (EOM) through automation, lean operational models, and process rationalisation, while ensuring adherence to regulatory norms. Our robust internal compliance and audit framework remained vigilant in monitoring the effects of digital and operational initiatives on governance and statutory obligations. Our efforts and achievements have been recognised across industry forums as we received multiple awards in FY26.

Governance

Across all businesses, the Company remains committed to maintaining high standards of governance, extending beyond regulatory compliance to encompass ethics and values. Governance is viewed as a framework that reinforces trust, accountability, legitimacy, competence, and respect for the rule of law, which are considered essential to building a transparent and fair organisational culture.

The Board plays a central role in ensuring that these governance standards are embedded across the organisation. Its focus on ethical conduct, integrity, transparency, and fairness provides oversight over behaviour, processes, and decision-making at all levels. To ensure consistent governance practices, the

Risk Management

Risk management continues to remain a fundamental pillar of the Companys governance framework and long-term strategy. As a diversified financial services group operating across asset management, asset reconstruction, insurance, and credit, the Company operates in an environment characterised by evolving macroeconomic conditions, regulatory developments,

Looking ahead, and in line with regulatory priorities on financial inclusion, customer empowerment, and digitisation, we are committed to driving digital innovation and cost ef ciency through scalable technologies.

We will continue to introduce usage-based and behaviour-linked products that support financial prudence and personalised pricing. At the same time, we aim to deepen partnerships across ecosystems to widen distribution and enhance insurance accessibility. Maintaining strong governance around expenses of management, regulatory compliance, and operational excellence will remain a top priority as we move forward.

Company has established clear rules governing individual and entity-level conduct. These include policies on conflicts of interest, insider trading, and the handling of sensitive information. Technology is used to support governance processes and enable effective oversight, including in remote and hybrid working environments, while maintaining compliance requirements.

The Companys governance approach reflects its commitment to stakeholders, including customers, employees, shareholders, and the communities it serves. By upholding governance principles, the Company seeks to strengthen trust, accountability, and adherence to high standards across its operations.

technology-led disruption, and changing customer expectations.

The Company follows a comprehensive Enterprise Risk Management (ERM) framework that enables identification, assessment, monitoring, and mitigation of risks across businesses and functions.

The Framework is designed to support sustainable growth by embedding risk considerations into strategic decision-making, business planning, capital allocation, and operational processes.

The Companys Risk Management approach is anchored around an 11-Risk Framework comprising Business Risk, Reputational Risk, Market Risk, Credit Risk, Technology and Cyber Risk, Physical and Infrastructure Risk,

Fraud Risk, Operational Risk, Liquidity Risk, People Risk, and Regulatory Risk. The framework provides a structured approach for evaluating existing and emerging risks, establishing appropriate mitigation measures, and strengthening resilience across the organisation.

Technology risk, particularly cyber security, remains an area of focus. Increasing reliance on digital systems has heightened exposure to cyber threats, which have the potential to disrupt operations, compromise information, and affect stakeholder confidence. To address this, investments have been made in strengthening IT infrastructure, implementing cyber resilience protocols, conducting employee awareness programmes, and enabling real-time monitoring. The adoption of artificial intelligence, automation and analytics is enhancing operational efficiency, risk assessment, and decision-making, supported by evolving governance around data, models, and responsible technology usage.

The rapid mainstreaming of Artificial Intelligence (AI), and more specifically generative AI and agentic AI systems, has introduced a new class of enterprise risks that the Company actively monitors and addresses within its ERM framework. While AI offers significant opportunities to enhance productivity, customer experience, underwriting, fraud detection, and risk analytics, it also brings with it novel vulnerabilities that require deliberate governance, technical safeguards and human oversight as threat actors are increasingly leveraging AI to scale, automate, and sophisticate their attacks. The Company is evaluating AI-powered defensive capabilities including behavioural analytics and anomaly detection which uses machine learning to detect and respond to threats at machine speed.

The Company recognises risks arising from AI model bias. These risks can result in erroneous decisions and hence the Company is developing a Responsible AI governance framework to minimise bias risk.

The regulatory landscape around AI is evolving rapidly, both globally and in India, with growing emphasis on transparency, accountability, fairness, and consumer protection. The Company is closely tracking developments including sectoral guidance from financial services regulators and is aligning its AI adoption roadmap.

The enactment of the Digital Personal Data Protection Act, 2023, has introduced enhanced requirements for data privacy and protection. Compliance with the Act is treated as a risk management priority. The Company has initiated a group-wide programmme to align with these requirements, including updates to data governance policies, appointment of Data Protection Officers where applicable, and strengthening internal audit mechanisms. Cyber security and data protection are regarded as integral components of responsible governance.

Internal Control Systems and Their Adequacy

Internal Financial Controls

The internal controls at Edelweiss are well-established and robust which are commensurate with the nature of its businesses, size and scale, and complexity of its operations to ensure orderly and efficient conduct of business. These controls have been designed to ensure assurance with regards to maintaining proper accounting controls, substantiation of financial statements and adherence to Ind AS requirements, safeguarding of resources, prevention and detection of frauds and errors,

Independent Audit and Assurance

The internal auditors of Edelweiss follow standards on internal audit, along with guidelines issued by the regulators, and ensure compliance with section 138 of the Companies Act 2013, read with Rule 13 of the Companies (Accounts) Rules, 2014, as amended and notified from time to time. The Internal Audit function operates under ensuring operating effectiveness, reliability of financial reporting, compliance with applicable regulations and relevant matters under the requirements of the Companies Act 2013.

The internal control framework of Edelweiss continues to follow the assurance practices like the COSO framework, assurance on process ef ciency, and reliability of internal controls being aligned to risks identified in Risk Control Self-Assessment (RCSA), etc. to strengthen the overall system. the supervision of the Audit Committee of the Board. The internal audits are carried out by external professionals who provide independent view and assurance by assessing the adequacy and effectiveness of internal controls, compliance to internal and external guidelines, and risk management practices across Edelweiss.

Technology

The Company continued to advance its technology agenda during the year, leveraging digital capabilities to enhance operational efficiency, strengthen scalability, and support innovation across the enterprise.

Technology investments remained focused on improving business productivity, enabling data-driven decision-making, and building a future-ready operating platform aligned with the Companys growth aspirations.

As part of these efforts, the Company strengthened its financial reporting and consolidation capabilities through the implementation of an integrated reporting platform, enhancing process automation, accuracy, and timeliness of financial information. The initiative has improved the efficiency of reporting workflows and provided management with greater visibility to support informed decision-making. The Company continued to enhance its digital capabilities through the implementation of knowledge management and content solutions, enabling employees to access and use information more effectively. It also expanded the use of Artificial Intelligence (AI) and Generative AI by creating a secure framework to support the development and deployment of innovative solutions across business and support functions. These efforts contributed to greater operational efficiency, improved access to knowledge, increased automation, and better-informed decision making. To foster a culture of innovation and digital adoption, targeted learning and capability-building programmes were conducted to enhance employee awareness and practical application of emerging technologies.

Recognising the increasing importance of cyber resilience in a rapidly evolving digital environment, the Company continued to strengthen its cybersecurity, data privacy, and digital governance framework during the year. Significant focus was placed on enhancing cyber resilience through advanced threat detection, proactive security monitoring, strengthened infrastructure protection, improved incident management capabilities, and disaster recovery preparedness. The Company also implemented governance mechanisms to support the secure and responsible adoption of AI technologies, while maintaining robust controls around data protection and enterprise risk management. In addition, data privacy initiatives were advanced to strengthen compliance readiness, enhance visibility over personal data processing, and establish a stronger foundation for privacy governance in line with evolving regulatory requirements. The Company also continued to drive compliance with applicable cybersecurity and resilience regulations through ongoing control enhancements, policy reviews, audits, and risk management activities.

The Company remains committed to maintaining robust safeguards to protect customer information, business-critical systems, and digital assets, while ensuring compliance with applicable regulatory requirements. The continued focus on technology modernisation, AI-led innovation, cyber resilience, and responsible adoption of emerging technologies is expected to enhance operational agility, support sustainable growth, and strengthen the Companys ability to serve customers securely and efficiently in an increasingly digital financial services landscape.

Human Resources

At Edelweiss, our people continue to be the cornerstone of our success. They power our vision, shape our growth, and build enduring relationships with stakeholders. Anchored in our core values, we nurture a vibrant and inclusive culture that enables every individual to excel.

Talent

We are committed to attracting, developing, and retaining top talent through a holistic approach. Our agile and collaborative environment supports professional growth while recognising achievements through meaningful reward programmes. With optimised work design, exible processes, and focused reskilling initiatives, we prepare our teams for future success.

A strong sense of community is encouraged through interactive engagements, team-building activities, and social events, reinforcing a culture of belonging. Our performance management framework provides clarity, ongoing feedback, and continuous development, aligning individual aspirations with organisational goals.

Workplace

Our workplace is founded on collaboration, flexibility, and inclusivity. We encourage cross-team interactions and provide exible work arrangements to support productivity and work-life balance. Employee wellbeing continues to be a key priority, supported by robust safety protocols and regular health and wellness initiatives. Transparency and fairness remain central to our culture,

Leadership

We invest in leaders early. We back them with clarity and conviction. Over time, weve built a system where personal empowerment and decentralised decision-making are not ideals, they are operating principles. We are committed to continuous learning, offering structured development programmes to

Wellbeing

A thriving workforce is grounded in holistic wellbeing, spanning physical, mental, emotional, and social dimensions. Our employees benefit from competitive leave policies, enhanced mediclaim coverage, and easily accessible wellness resources. In times of need, reinforced through an open-door policy and a zero-tolerance approach to discrimination, harassment, or bullying. We comply with POSH regulations and require comprehensive training to uphold these principles. Our commitment to diversity, equity, and inclusion (DEI) ensures every individual feels respected and valued, fostering a workplace where everyone can thrive. empower employees at every career stage, currently leadership cohort comprises 3% of the workforce. With 6,194 employees, including 26% women, we continue to build an inclusive and forward-looking organisation where talent and leadership drive a stronger future. our 24/7 Central Incident Room offers immediate support along with continued assistance. Our outreach programmes foster resilience, ensuring every employee has the tools and support they need to succeed both personally and professionally.

Cautionary Statement

Cautionary Statement/Statements made in this Annual Report may contain certain words or phrases that are forward-looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Limited or any of its subsidiaries and associates ("Edelweiss"). Actual results may vary from such statements contained in this report due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India and outside India, volatility in interest rates and in the securities market, new regulations and Government policies that may impact the businesses of Edelweiss as well as the ability to implement its strategy. The information contained herein is as of the date referenced and Edelweiss does not undertake any obligation to update these statements. Edelweiss has obtained all market or industry data and other information from sources believed to be reliable or through its internal estimates unless otherwise stated, although its accuracy or completeness cannot be guaranteed. Some part of the report relating to business-wise financial performance, balance sheet, asset books of Edelweiss, and industry data herein is reclassi ed/regrouped based on Management estimates and may not directly correspond to published data. The numbers have also been rounded off or approximated in the interest of easier understanding. Prior period or other gures have been regrouped/reclassi ed/re-casted wherever necessary. FY18, FY19, FY20, FY21, FY22, FY23, FY24, FY25, and FY26 numbers are as per Ind AS whereas the rest are as per IGAAP. All information in this presentation has been prepared solely by the company and has not been independently veri ed by anyone else.