Gamco Ltd Management Discussions

Management Discussion and Analysis Report for the year ended 31 st March 2026

Industry structure and developments, opportunities and threats, segment wise performance

Indian economic review

The Indian economys real GDP grew at 7.7% in FY26, compared to 7.1% in FY25. This growth was driven by strong consumption and increasing investments, reaffirming Indias position as the fastest-growing major economy.

Indias Real GDP at Constant Prices was estimated at H323.12 lakh crore in FY 2025-26, compared with H299.89 lakh crore in FY 2024-25.

Growth of the Indian economy

	FY23	FY24	FY25	FY26
Real GDP growth (%)	7.0*	7.2	7.1	7.7

E: Estimated. Note: FY24 figure restated under new base year 2022-23. (Source: MoSPI)

* The FY23 figure (7.0%) is from the old base year series (2011-12) as the new series back-data for FY23 will only be available after December 2026.

Growth of the Indian economy quarter by quarter, FY 2025-26

	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26
Real GDP growth (%)	6.7	8.4	7.8	7.8

Note: Q2 revised upward from 8.2% and Q3 from 7.35% under the new base year 2022-23 series released February 27, 2026. Q4 remains an estimate. (Source: MoSPI)

Inflation, policy and currency dynamics Inflation remained benign through much of FY26, with full-year CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment.

However, macro stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.88% during FY26 - its steepest fall since FY12 - touching H94.83 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Capital flows and market behaviour

Foreign portfolio investors remained risk-averse, withdrawing a record H1.8 trillion during FY26 - the largest outflow in 36 years. However, strong domestic institutional inflows of H8.50 trillion provided a crucial counterbalance, highlighting the growing maturity and depth of Indias domestic capital markets.

Indias market capitalisation declined 8 percent year on year in FY26 to $4.5 trillion from $4.83 trillion in FY25, marking the sharpest drop since FY23. The BSE Sensex declined 7 percent or 5,467 points in FY26, against a gain of 5.1 percent or 3,763 points, in FY25. Similarly, the Nifty 50 fell 5 percent, or 1,188 points, in FY26, compared to a gain of 5.3 percent or 1,192 points, in FY25. against a gain of 5.34 percent, or 1,192 points, in the corresponding period. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures under Donald Trump, which weighed on global investor sentiment.

Gold prices surged 64.1% during FY26 reflecting global risk aversion and safe-haven demand.

Indias net direct tax collections rose 5.12% y-o-y to H23.40 lakh crore in FY26, though this fell short of the Revised Estimate of H24.21 lakh crore by approximately H80,000 crore. Corporate tax collections came in at H10.99 lakh crore against a target of H11.09 lakh crore, while personal income tax (including STT) stood at H12.41 lakh crore against a target of H13.12 lakh crore - the larger of the two misses, partly reflecting the income tax relief extended to the middle class in the Union Budget 2025-26

Banking sector

Indias banking sector reflected improving financial health, with the gross non-performing asset ratio declining to a robust 2.1 percent as of September 2025, indicating stronger asset quality and disciplined lending practices. This stability was mirrored in profitability metrics, as scheduled commercial banks reported a return on assets of 1.3 percent and a return on equity of 12.5 percent during the first half of 2025-26, underscoring sustained operational efficiency and a healthier balance sheet trajectory.

Indias growth story

Real Gross Value Added (GVA), which measures economic output excluding taxes and subsidies, grew

7.9% in FY26, compared with 7.3% in FY25. At current prices, nominal GVA rose 9.1% to H314.87 lakh crore from H288.54 lakh crore a year earlier.

The tertiary services sector remained a key growth driver, expanding by 9.0 percent in FY26 and increasing its share in nominal gross value added to

54.3 percent from 52.8 percent in FY25, supported by broad-based momentum across segments.

During FY26, financial, real estate, IT and professional services grew by 9.9 percent, while trade, hotels, transport, communication and broadcasting recorded a strong 10.1 percent growth, and public administration and other services expanded by

5.8 percent.

The secondary sector grew 9.1 percent, accelerating from 8.0 percent in the previous year, driven by manufacturing alongside construction growth of

7.1 percent. This combination of services-led scale and manufacturing acceleration is shaping a more balanced and resilient economic structure.

Consumption and investment

During FY26, Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) maintained above-7% growth, reflecting a well-balanced demand composition across household spending and investment activity.

Growth catalysts

Policy-led consumption boost: The Union Budget FY27s tax relief measures-particularly income tax exemptions up to H12 lakh-are expected to stimulate discretionary spending and reinforce consumption-led growth.

Anticipatory Pay Commission impact: The 8 th Pay Commission, though expected to be implemented from FY28, is already shaping consumer sentiment, creating a forward consumption impulse.

Monetary stability: The Reserve Bank of Indias calibrated stance, with the repo rate at 5.25%, balances inflation risks with growth support, ensuring macroeconomic stability.

Credit expansion: Improved banking health and liquidity conditions are expected to sustain strong credit growth across MSMEs, housing, and retail segments.

Fiscal prudence with growth focus: The Union Budget maintains fiscal discipline while prioritising infrastructure, MSME support, skilling, and innovation-key levers for long-term productivity.

Indian equity market overview

In the fiscal year 2024-25, Indian equities demonstrated resilience amid mixed global and domestic cues. Benchmark indices ended the period

modestly higher, reflecting underlying strength despite persistent volatility. Both the BSE Sensex and NSE Nifty 50 delivered positive returns for the year, supported by sustained domestic participation and gains across key sectors.

Foreign portfolio investment (FPI) flows into Indian equities in 2025 were historically weak, with FPIs withdrawing an estimated around H1.6 lakh crore, marking one of the most significant net outflows on record. Nonetheless, this outflow did not derail equity performance, indicating growing maturity and increased absorption of risk by domestic institutions and retail investors.

Market breadth and participation improved into early 2026, with renewed FPI interest in segments such as financials, capital goods, and energy, reflected in foreign net inflows in 2026 a notable shift after months of selling pressure.

Yields from key sectors, particularly financial services, helped cushion broader market pressures. Overall, although benchmarks experienced episodes of volatility in early 2026 including short-term declines linked to geopolitical events - key domestic indicators have remained robust.

OUTLOOK

Indias economic outlook remains positive, supported by resilient domestic consumption, improving earnings, a strengthening credit cycle and supportive fiscal and monetary policies. Despite global uncertainties arising from trade tensions, interest rate movements and elevated energy prices, India is expected to remain one of the fastest-growing major economies. Growth is likely to be driven by domestic demand, private investment, infrastructure spending and expanding global trade linkages, with banking, services, real estate and other key sectors providing further momentum. Low inflation, GST rationalisation, structural reforms, tax incentives and Indias favourable demographic profile are expected to support productivity and economic activity. While near-term risks remain, Indias strong macroeconomic fundamentals and sustained policy support provide a favourable foundation for continued growth through FY26 and 2026.

FINANCIAL OVERVIEW WITH RESPECT TO OPERATIONAL PERFORMANCE

Analysis of the profit and loss statement Revenues: Revenues from operations registered a increase from H27,878.56 in FY 2025-26 to H5096.94 Lakh in FY 2024-25.

Margins: EBITDA for the year is H (2529.81) Lakh as against H1,539.68 Lakh in FY 2024-25. EBITDA margin of the Company decreased to (9.07) % in FY 2025-26 from 30.21% in FY 2024-25. The profit

after tax excluding exceptional items of the Company was H(4499.94) Lakh in FY 2025-26 compared to H516.28 Lakh in FY 2024-25. The total Comprehensive income net off Tax for the FY 2025-26 was H7017.31 as compared to H548.90 in FY 2024-25.

Analysis of the balance sheet

Sources of funds: The capital employed by the Company increased to H38983.77 Lakh as of 31 st March 2026 from H18,800.66 Lakh as of 31st March 2025. The debt-equity ratio of the Company stood at

2.32 in FY 2025-26 compared to 2.33 in FY 2024- 25.

Key ratios and numbers

Particulars	FY 2025- 26	FY 2024- 25
EBITDA/turnover	(9.07)	30.21
Debt-equity ratio	2.32	2.33
Net profit margin (%)	(16.14)%	10%
Book value per share (H)	23.38	10.50
Earnings per share (H)	(8.33)	0.96

*Adjusted for share split and bonus share issued during the FY 2025-26

OPPORTUNITIES

Deepening rural penetration: Expanding into underserved rural and semi-urban markets offers significant growth potential through increasing financial awareness and demand for accessible credit.

Urban expansion and product diversification: Urbanisation, SME growth and rising incomes provide opportunities to expand the customer base and diversify financial products.

Digital transformation: Adoption of digital platforms, data analytics and AI-driven processes can improve efficiency, risk assessment, customer reach and service delivery.

Favourable regulatory environment: Strengthened regulatory and governance standards can enhance transparency, stakeholder confidence and long-term business stability.

Strategic partnerships: Partnerships with banks, fintechs and financial institutions, including co-lending arrangements, can support business expansion and optimise capital deployment.

Financial inclusion: Government initiatives supporting MSMEs, affordable housing and priority sectors offer opportunities to expand the lending portfolio while contributing to financial inclusion.

RISKS AND CONCERN

Intense competition: Competition from banks, fintechs and other NBFCs may impact market share, margins and profitability.

Higher cost of funds: Dependence on market borrowings may result in higher funding costs, particularly during rising interest rate and tight liquidity conditions.

Regulatory changes: Evolving regulations, capital requirements and compliance standards may increase costs and operational complexity.

Macroeconomic and credit risks: Economic slowdown and sectoral stress may affect credit demand, asset quality and provisioning requirements.

Liquidity and funding risks: Dependence on external borrowings may create liquidity challenges during periods of market volatility.

Technology and cybersecurity risks: Cyber threats, data breaches and system disruptions may affect operations and customer confidence.

Concentration risk: Exposure to specific sectors, geographies or borrower segments may increase vulnerability to localized economic stress.

Business Strategy

The Company intends to broaden its footprint in the financial services space by entering segments such as factoring, lease financing, venture capital funding, and road transport finance. It also proposes to strengthen its presence in securities-backed lending through products like loans against shares, margin funding, IPO financing, and promoter funding. Going forward, the Company aims to diversify its lending portfolio and capitalize on emerging opportunities across the financial services sector to drive sustainable growth.

KEY RISKS AND UNCERTAINTIES

The Companys risk management framework is subject to continuous oversight and periodic evaluation by the management team. Credit risk is addressed through well-defined underwriting standards that assess the borrowers profile, intent, and repayment capability. Interest rate and liquidity risks are managed by closely monitoring asset-liability maturity profiles and funding patterns. Operational risks, including process lapses, fraud, and system-related disruptions, are mitigated through strong internal controls, structured processes, and regular reviews to ensure effectiveness.

INTERNAL CONTROL FRAMEWORK AND EFFECTIVENESS

The company continually upgrades its internal control systems to align with best practices suitable for its size and operations. The Audit Committee, along with the Internal Audit team, regularly evaluates these systems to ensure effectiveness in a dynamic business environment. This enhances transparency, accountability, and overall management efficiency.

As a small-sized listed NBFC under the Bombay Stock Exchange (BSE), the company remains committed to strong governance and operational integrity.

HUMAN RESOURCES TALENT AND CULTURE

The Company regards its human resources as vital contributors to long-term success and places strong emphasis on their continuous development. It focuses on enhancing employee capabilities through targeted training initiatives aligned with evolving business requirements and market dynamics, while fostering a merit-based culture of performance recognition and rewards. Industrial relations remained cordial during

the year. As of March 31, 2026, the Company had a total workforce of 8 employees.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of the applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic and political conditions in which the Company operates interest rate fluctuations, changes in Government/RBI regulations, Tax laws, other statutes and incidental factors.