Geojit Financial Services Ltd Management Discussions

Economic Overview Global Economic Overview

In CY 2024, the global economy demonstrated resilience, recording a growth rate of 3.3%, despite navigating macro headwinds such as ongoing geopolitical tensions, steep inflation, realignment of supply chains, shifting trade patterns and alterations in monetary policies.

In Europe, growth declined as inflation surged, in some economies owing to elevated energy costs and lack of innovation. Chinas economy faced weak consumer demand, industrial oversupply and financial instability with its housing market crisis. Conversely, the US economy maintained steady growth on the back of high employability and consumer demand. Growth in emerging markets remained relatively stable, despite economic strain.

Investor confidence decreased, with gradual rise of bond yields in advanced economies. Global inflation rates have stabilised after a period of general decline, enabling central banks to adopt more expansionary policies. Global average inflation declined from 6.6% in 2023 to 5.7% in 2024. Developed economies achieved their targets of inflation swifter than Emerging Market and Developing Economies (EMDEs).

Outlook

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The global economic growth is expected to moderate to 2.8% in CY 2025 and 3% in CY 2026. Ongoing headwinds can affect the financial markets stability, inducing financial strain and hindering investment and economic growth. Moreover, sustained geopolitical conflicts may give rise to steeper commodity prices, disrupting the downward trend of inflation. Shifting policies under the new US administration have further raised concerns about geo-economic fragmentation, subsequently putting exports at risk.

Emerging economies are expected to drive global growth. The evolving global landscape is predicted to result in development of resilient supply chains and innovative solutions. Supported by technological innovation and ongoing disinflationary trends, the outlook remains cautiously positive for the global economy.

Indian Economic Overview

In the face of ongoing global economic uncertainty, the economy of India exhibited resilience. The economy retained its position as one of the fastest-growing economies in the world. Indias real GDP growth in FY 2024-25 remained stable at 6.5%, with marginal moderation in HI. The nation has surpassed Japan, becoming the fourth-largest economy in the world in gross output.

Some of the key sectors driving this growth are construction, utility services (electricity, gas, water supply and other utilities), finance, real estate, professional services, public administration, defence, including other services.

In overall demand within the economy, Private Final Consumption Expenditure (PFCE) in real terms, augmented by 7.2%, primarily due to a rebound in rural demand. The percentage share of PFCE in GDP (at current prices) is forecast to rise from 60.19% in FY 202324 to 61.38% in FY2024-25, marking an all-time high since FY 2002-03. Gross fixed capital formation (GFCF) at constant prices further hiked by 6.67%, highlighting rebounded investor sentiment towards the second half of the year. Public capital expenditure continued to drive infrastructure development, rising 38.8% between FY 2019-20 and FY 2024-25, thereby, strengthening the foundation for future growth.⁴

In contrast to global volatility, domestic financial markets remained largely stable, with marginal increase in NPAs. While economic growth moderated in H1FY25, the RBI maintained repo rates for three quarters, aiming to align Consumer Price Index (CPI) inflation with its target. Since

February 2025, the Central Bank has declined interest rates from 6.5% to 5.5%, over three reductions, easing liquidity constraints.

On the external front, overall exports of India registered positive expansion in the first nine months of FY 202425 with a year-on-year (YoY) growth of 6.03%. Imports between April-December 2024, further surged by 6.91% YoY Merchandise imports hiked at a higher rate than exports, resulting in heightened merchandise trade deficit. However, rising net service receipts continued to improve current account balance.

Outlook

India has emerged as the worlds fourth-largest economy, with per capita income doubling since 2014.⁵ Despite global headwinds, the way forward remains optimistic, due to ongoing domestic and foreign investments, robust manufacturing growth and improvement in trade and financial services.

With the food inflation shock easing, economic activity is anticipated to improve in the near term. The proactive policies of the government would further lead to bolstered Foreign Direct Investment (FDI). Global disinflation trends are anticipated to have spillover effects and drive local demand. Growth in tier III and IV cities is forecasted to further bolster this demand. Business projections and consumer confidence are likely to stay strong. The income tax relief for salaried individuals announced in the Union Budget is expected to increase the discretionary spending of the expanding middle class, further augmenting consumption.

However, sustained geopolitical conflicts, disruptions in global supply chains and volatile commodity prices could exert inflationary pressures. The protectionist measures undertaken by the RBI, such as the cutbacks in Cash Reserve Ratio, Open Market Operations and Variable Rate Repo auctions, increased liquidity in the banking system, further growing, with an excess of H1.5 lakh crore as of 7^th April 2025.

Despite the potential risks, the Indian economy is predicted to sustain its growth with strengthened fundamentals, ongoing private and public investment, global disinflationary momentum and a stable policy framework.

Industry Overview Indian BFSI Sector

The Indian Banking, Financial Services and Insurance (BFSI) industry is undergoing a significant transformation, fuelled by customer-centric initiatives, technological innovation and an expanding focus on socio-environmental sustainability. Banks are improving service delivery through partnerships, embracing emerging technologies and incorporating data analytics to provide customised financial solutions. This has resulted in notable asset growth in retail, MSME, agriculture, corporate and forex businesses. Additionally, digital platforms are playing a crucial role in strengthening lending efficiency and credit access, specifically for working capital and trade finance. Currently, Indias banking sector is based on a strong foundation of high profitability, capital adequacy and low Non-Performing Assets (NPAs). A hallmark of the industrys transformation has been the scale-up of digital transactions and payment infrastructure. Unified Payments Interface (UPI) transactions have risen to INR 25.1 trillion in value, growing 25% YoY. Further, the India Stack initiative, a complete ecosystem comprising UPI, Aadhaar, Aadhaar Enabled Payment System (AePS), Account Aggregator (AA), e-KYC, Open Credit Enablement Network (OCEN), Open Network for Digital Commerce (ONDC) and Unified Lending Interface (ULI), has been crucial in reinforcing the nations digital public infrastructure. The initiative has earned global recognition for its ability to manage identity, payments and data.

The Unified Payments Interface (UPI), developed by the National Payments Corporation of India (NPCI), has enabled more than 180.5 billion transactions, accounting for ~ 84% of the total digital payments in the country.

Moreover, the Reserve Bank of India (RBI) is streamlining KYC with features such as UPI Lite X for the Central Know Your Customer (CKYC) platform, e-KYC for offline transactions and UPI123Pay, which facilitates digital onboarding via feature phones. Aadhaar and mobile technology integration are further enhancing Indias digital payments system with wider accessibility and convenience. ULI, a new entrant to the credit ecosystem, will simplify credit assessment and disbursement for lenders. These efforts are, therefore, substantially escalating financial inclusion in the digital-first world. Moving forward, Indias digital payments are estimated to reach H395 trillion by FY2025-26.⁹

In credit growth, Non-Banking Financial Companies (NBFCs) have outpaced conventional banks. Assets Under Management (AUM) of NBFCs surged by 20% YoY in FY 25, in contrast to the growth in banks credits valued at 12%. Net interest margins (NIM) of banks and NBFCs remained stable, while Cost-to-Income Ratios (CIR) witnessed marginal gains.

Retail lending continues to be a key facilitator of financial inclusion and profitability, with unsecured lending gaining notable traction. The ratio of unsecured to secured loans in India is 30:70. This is significantly higher than the 10:90 mix in most large economies. Despite the rising unsecured lending, asset quality has shown improvement. Non-Performing Assets have declined from 2.7% to 2.6% for NBFCs and from 2.8% to 2.2% for banks. The recent RBI action to restore risk weights of NBFCs is likely to heighten credit availability substantially in the retail segment, in line with significant credit flow to the NBFCs.

Indias fintech industry is valued at $ 110 billion. It is the third largest in the world and is leading the sectors revolution. Banking assets are projected to exceed $28.5 trillion. The Asset Under Management for mutual funds are expected to exhibit a sixfold rise over the last ten years till the end of 2025. These developments have positioned India as the global leader in fintech adoption, with rapid digitalisation across financial services.

Looking ahead, Indias aim to achieve a $30 trillion GDP by 2047 will require a substantial growth in the financial services sector, with a $4 trillion capital base for banks, one-third of which is to be met via renewed capital deployment. With other financial asset classes growing rapidly, the BFSI sector will play a critical role in supporting Indias economic aspirations.

Capital and Money Markets

The capital markets of India have showcased robust performance, contributing meaningfully to real economy capital formation. In addition, this performance has been vital in improving domestic savings, financialisaton and wealth generation. Further, healthy macroeconomic fundamentals, sound corporate profits, supportive institutional investment, a steady flow of investment from Systematic Investment Plans (SIPs), sustained formalisation, digitisation and enhanced accessibility have contributed to continued market growth. The mainboards registered as the hub of heightened listing activity and investor interest in FY 25, despite market volatility and geopolitical tensions. Notably, Indias share in global IPO listings ascended to 30% in 2024 from 17% in 2023. This resulted in the nation becoming the largest contributor to primary resource mobilisation worldwide. The aggregate resource mobilisation from primary markets (equity and debt) stood at H11.1 lakh crore between April and December 2024, 5% higher than that mobilised throughout FY 24.

Since COVID-19, there has been a significant elevation in individual and household investment in capital markets, both directly (in trading accounts) and indirectly (through

mutual funds). Consistent corporate results, stable macroeconomic parameters, comprehensive technology infrastructure and the confidence generated by the mutual fund system and online investment platforms have further fuelled this trend. As of the end of December 2024, demat accounts have seen a rise of 33% YoY to 18.5 crore, with 11.5 crore unique account holders and 5.6 crore unique mutual fund investors. This has translated into a cycle of strong market returns, drawing in more investors and positioning the securities market as an inclusive platform of wealth creation.

CPI inflation in the money market has dropped sharply. It fell from 6% in October 2024 to a near six-year low of 3.2% YoY in April 2025. This is well-below the RBIs medium-term target of 4%. This broad fall in prices is due to a strong wheat and pulses output, a stable kharif season supported by favourable monsoon, moderating rabi yield predictions and declining commodity prices. The Monetary Policy Committee (MPC) expects inflation to move closer to its target in the near and medium terms. It has lowered its forecast for headline inflation in FY26 to 3.7%, down by 30 basis points. Open Market Operations (OMOs) have propelled an enduring cumulative liquidity of approximately H9.5 lakh crore, resulting in a shift of the banking system liquidity from deficit to a surplus of H1.5 lakh crore by April 2025. Further, the repo rate reduction by the Central Bank to 5.5% is expected to introduce additional liquidity into the economy. However, in response to changing global risks from trade and geopolitics, the RBI is now taking a neutral stance.

Commodities Market

Indias commodities market registered vital growth, with global commodity prices declining by 5.1% in April, by dampening of energy and base metal prices.²¹ The nations largest commodity futures trading platform, Indian Multi-Commodities Exchange (MCX), records a market share of 98.1%. In FY 2024-25, the overall turnover of futures traded on MCX was valued at H70,05,485 crore, with the total notional value of options traded on MCX being H4,95,12,692 crore. Total traded clients in futures and options on MCX underwent an expansion by approximately 40% on a YoY basis, thereby, surging from 9.3 lakh during the last year to 13 lakh in FY 2024-25.²²

Insurance Sector

The rising insurance industry of India, witnessed notable growth of 5% in premium volumes in 2024. The life insurance segment saw a notable shift towards protection and guaranteed return savings products. These offerings now reach around 40% of households, primarily due to the widespread network of the Life Insurance Corporation of India (LIC). Meanwhile, the non-life insurance sector is expected to double its premium-to-GDP ratio over the next two decades.²⁵

The Insurance Regulatory and Development Authority of India (IRDAI) has set an ambitious objective of providing tailored insurance solutions for all citizens by 2047. This vision aims to make the Indian insurance sector globally competitive. To achieve this, the strategy involves rationalisation of the regulatory regime, improving ease of doing business, decreasing compliance rates, introducing State Insurance Plans and accelerating digital adoption. The Indian insurance industry is projected to be the fastest-growing among the Group of Twenty (G20) countries in the near term (2025-2029), with premium volumes surging by 7.3% on average in real terms during each year of the forecast period.

Equity Market

Global equity markets experienced heightened volatility in early April upon the announcement of broad tariffs

on April 2. This resulted in a sharp global liquidation. However, markets rebounded later in the month after a 90-day pause was announced on the tariffs. In the longterm, high risk appetites for equities in emerging markets such as India, demonstrates growing investor confidence and market resilience.²⁶

Domestic equity AUM in India has grown over elevenfold since 2014, reaching approximately $ 391 billion in 2024.²⁷ The market capitalisation of BSE listed companies stands at $ 4.82 trillion as of March, 2025.²⁸ During CY 2024, the mainboard witnessed 90 IPOs while SME board listed 178 IPOs, raising the highest capital in the world worth H 1.67 lakh crore ($ 19.5 billion) and making National Stock Exchange of India the largest exchange in Asia.²⁹

Mutual Funds Sector

The Indian mutual fund industry showcased robust growth, with Assets Under Management (AUM)

crossing H70 lakh crore. This is further anticipated to rise to approximately H100 lakh crore in the near future. Rising number of domestic investors are now the main force behind the market growth, playing a bigger role than foreign institutional investors. The industry has channelled household savings into risk capital, driven by a combination of technology and innovation. Retail participation has surged. The number of investors doubled from 2.9 crore in FY 21 to 5.6 crore as of Dec 2024. The aggregate size of folios, excluding Fund of Funds (FOFs) domestic schemes, rose from 17.8 crore at the end of FY 24 to 22.5 crore in Dec 2024. Retail investors hold mutual fund units worth H18.6 lakh crore as of December 2024.

Mutual fund assets under management (AUM) crossed H66.9 lakh crore in December 2024, marking a 25.3% elevation since March 2024. The segment has registered over 10 crore SIP accounts, with SIP inflows reaching H10.9 lakh crore as of December 2024. Monthly average gross SIP inflows have more than doubled in three years, from H0.10 lakh crore as of September 2021 to H0.235 lakh crore as of August 2024.

Indias Financial Planning and Advisory Industry33

In todays world, information about investment products and implementation platforms is readily available. Many

individuals make investment decisions based on data easily accessible at their fingertips. However, whether these investments are suitable for their specific financial needs is often not evaluated. Gen Z is earning from their very first job, while millennials are already preparing for retirement. Both groups often experience anxiety around day-to-day expense management and find it challenging to invest in proportion to their income levels. These individuals are actively seeking reliable and trustworthy financial advice to help them adopt a disciplined investment approach and build a corpus for their future financial goals.

A 2025 survey* reveals that 48% of Gen Z and 46% of millennials in India feel financially insecure, a significant increase from 30% and 32%, respectively, in the previous year. This indicates that even though individuals are earning, a sense of financial insecurity continues to persist in their lives. There is also a growing concern around early retirement planning and the need to build a strong retirement corpus. As a result, retirement planning is becoming one of the primary financial objectives for both Gen Z and millennials. These growing anxieties are an increase in financial awareness, leading many to recognize the value of fee-based investment advisory services.

Growth Drivers

Major growth driver of Indias financial sector in recent years have been:

Company Overview Background

Geojit Financial Services Limited (GFSL) is an Indian investment service provider with an established presence in the Middle East. Over the years, the Company has diversified its business operations to different parts of the country through branch network and franchisee. The Company provides an extensive range of financial services such as broking in equities, commodities, derivatives, currency futures, custody accounts, distribution of financial products, Private Wealth Services portfolio management services and margin funding, among others.

GFSL also provides services to Non-Resident Indians (NRIs) in Gulf Cooperation Council (GCC) nations. The Companys overseas operations comprise an associate and collaborative ventures located in Oman, Kuwait and UAE. The Companys shares are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited.

GFSLs distribution network includes 500 offices spanning 20 states and three Union Territories (UTs) in India and four GCC nations in the Middle East, including Kuwait, Bahrain, the United Arab Emirates and Oman . At the national level, the Company is well represented in Tier-II and Tier-III cities, with customer assets valued over H 1,00,065 crore as of 31 March 2025.

Financial Performance

In FY 2024-25, the consolidated operational income surged from H614.13 crore to H747.91 crore, while the total revenue reached H749.32 crore, a significant increase from H623.97 crore in FY 2023-24. During this period, Profit Before Tax climbed from H191.97 crore to H222.69 crore. The Profit after tax for the year also saw a notable rise, amounting to H172.49 crore, up from H149.38 crore recorded in FY 2023-24.

Key financial ratios are not applicable, as the Company is primarily engaged in the distribution of financial products and portfolio management services. Accordingly, it prepares its financial statements in compliance with Division III of Schedule III of the Companies Act, 2013.

Segment-wise Performance Equity

The revenue from stock and equity-related income rose by 13%, reaching H423.93 crore in FY 2024-25, up from

H375.42 crore in FY 2023-24. Total brokerage services income also experienced modest growth, rising by 4% to H 295.73 crore in FY 2024-25, compared to H 283.50 crore in the previous fiscal year. Throughout the year, 1,38,563 new customers were acquired, expanding the total client base to 15,20,000. Additionally, assets under management and custody surged to H1,00,065 crore in March 2025, up from H 93,091 crore in March 2024.

Financial Product Distribution

In FY 2024-25, the Companys Mutual Fund distribution income increased by 46% year-over-year to reach H 121.99 crore from H 83.43 crore in FY 2023-24. As of March 31, 2025, the Company had 2,90,682 Mutual Fund Holding Clients. The Mutual Fund Assets Under Management (AUM), including the Overseas Joint Venture, stood at H18,195 crore on March 31, 2025, a significant CAGR of 28% over the past 5 years. Revenue from insurance distribution activities in FY 2024-25 surged to H78.32 crore, a substantial increase from H 66.16 crore in FY 2023-24.

The income from Portfolio Management Services (PMS) witnessed a remarkable 88% year-over-year growth, climbing from H18.57 crore in FY 2024 to H34.99 crore by March 2025. Geojit offers five distinct portfolios - Advantage Portfolio, Dakshin Portfolio, Freedom Portfolio, Ethical Portfolio and Beacon Portfolio.

Key differentiators

• No Entry load. 1% exit load if exiting before 12 months

• Professional management

• No lock-in period

The Companys discretionary portfolios are managed by a dedicated team of professionals in compliance with established investment objectives, risk tolerance, guidelines and regulatory principles. The Companys PMS Portfolios have outperformed their respective benchmarks over the long-term.

During the year, the Company launched its Beacon portfolio- a dynamic flexi-cap portfolio capitalising on the strengths of large, medium and small market

capitalisations. The portfolio aims to facilitate capital appreciation over the medium to long term with a low to moderate risk profile.

Depository Services

Depository services experienced a marginal contraction of 1% during the year, recording H 35.04 crore for FY 2025.

Business Outlook

Geojit Financial Services Limited has an expansive geographical footprint. The Company is present across Tier-II and Tier-III cities, providing comprehensive investment solutions by prioritising affordability and accessibility for all clients through cutting-edge digital solutions. The Company has established sustained customer-relationships with an aim to enhance assistance in developing and maintaining assets on a long-term basis.

One of the Companys key strengths is its efficient advisory service, offered by experienced professionals. Geojit provides research-backed advice and personalised

services to its clients. Through investor education programs, the Company aims to enhance financial awareness among clients about market opportunities.

The Company is well-positioned for achieving sustained growth. This growth is expected to be supported by its hybrid operational model, advisory strength and digital innovations. Technological advancements will be crucial to improving the Companys operational efficiency and customer experience while catering to the requirements of tech-savvy investors. The Companys comprehensive risk management framework further strengthens its capability to deliver long-term value to key stakeholders.

Risk	Description	Mitigation Strategy
Macro economic risk	External factors like economic volatility, evolving customer requirements and market trends can influence profitability and long-term sustainability.	Geojit has developed a strong brand reputation along with extensive market presence in India and the Middle East. Its comprehensive range of services and multiple channels of sales minimise geographical concentration risks.
Product risk	Geojit has a strong brand reputation for offering innovative services. Product launches however, may involve client dissatisfaction, primarily due to substantial investment involvements. A failed product launch can adversely impact the Companys margins.	Geojit offers a comprehensive range of customised financial services through expert professionals who assist clients in strategic investment planning. This fosters long-term relationships and facilitates extensive sale.
Regulatory Risk	The business operates in a strictly regulated environment under the supervision of several authorities. Regulatory amendments or amplified scrutiny might negatively impact the Companys operations. Non-compliance may lead to penalties, reputational damage or withdrawal of licenses.	Geojit functions with a specialised compliance unit that enables real-time assistance in accordance with regulatory amendments. Electronic processes, internal controls and periodic internal reviews are employed to ensure consistent compliance. with industry standards.
Technology Risk	The requirement of perpetual technological upgrades involve the risk of system breakdowns or poor adaptation, which can consequently affect the Companys market competitiveness.	Geojit invests in innovation and technology to maintain world-class standards. This propels operational efficiency while regulating the Companys expenditure.
Competition Risk	The financial service industry is highly competitive and is subject to price hikes. Augmented marketing expenditure may jeopardise growth and profits.	Geojit maintains its competitive edge through product portfolio diversification, customer orientation, technological upgradation and strong brand recognition. Multiple sales channel and extensive market presence bolster the Companys competitiveness.
Operational Risk	Operational risks due to internal process failures, human errors or external reasons including . staff misconduct may cause reputational and financial damage.	The organisation has implemented a structured risk management framework.The framework is supported by periodic audits and efficient information management. A maker/checker mechanism facilitates cross-verification. These processes reduce the scope of errors.

Internal Control Systems

Geojits internal control system is designed to suit its size and scope of operations. It has established well-defined processes, procedures and guidelines and adequate internal information systems for reinforcing internal controls. Each business process has established internal financial controls to enforce compliance with laws and regulations. Such controls comprise in-built checks and balances and mechanisms to secure assets, ensure authorisation for asset use and have proper accounting records. Roles and responsibilities are established throughout the organisation and information flow and monitoring are facilitated.

Geojit Financial Services Limited carries out regular internal audits and reviews and suggestions from internal auditors for improvement of systems and procedures are given serious consideration. The Audit Committee is in charge of the internal control system and reviews results from external and internal auditors. The Audit Committee is also charged with delegating control duties and reviewing approved policies and procedures of the Company to facilitate and efficient running of business operations. After design assessment, management tests controls within all business processes and resolves any operational anomalies. Audit function guarantees reasonable assurance that the operations are efficient and effective, assets are safeguarded, financial information is reliable and applicable laws and regulations are complied with.

Human Resource

The HR policies of the Company place great emphasis on the overall progress and development of its diverse and talented workforce. The Company acknowledges its employees as the primary drivers of success and promotes employee training as a part of its business

strategy. Career development programmes enable holistic development and upward mobility. A culture of productivity and efficiency is promoted by the Company and high-performing employees are rewarded for their sustained efforts.

The Company adheres to the highest ethical, moral and legal business standards. In an event of misconduct, the Company ensures transparency through its redressal policies.

A comprehensive Whistle Blower policy provides an avenue to employees and directors to voice their concerns and report issues that may adversely affect operations, performance, value and the reputation of the Company. This mechanism ensures proper protection against victimisation by providing direct access to the Chairman of the Audit Committee in exceptional circumstances. The policy authorises the Audit Committee of the Board of Directors to conduct necessary investigations.

As of March 31, 2025, the total employee strength of the Company stood at 2550 excluding trainees, casual & contract staff.

Cautionary Statement

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