Goenka Business & Finance Ltd Management Discussions

The global economy in 2025-2026 has shown resilience but slowed growth, uneven regional recovery, persistent inflation pressures, and heightened uncertainty due to geopolitical and energy shocks.

Global trade performed better than expected in 2025 due to early shipments ahead of tariffs and strong services exports, but growth is projected to slow in 2026 as temporary drivers fade and policy uncertainty persists. Investment remains subdued across most regions, constrained by high debt, limited access to affordable finance, and elevated borrowing costs, particularly in emerging markets and developing economies.

Monetary policy tightening by central banks, particularly in the United States and Europe, led to a cautious investment climate. However, a relatively stable global financial system, easing supply chain bottlenecks, and digital acceleration in financial services contributed to improved investor confidence in the second half of the fiscal year

• Indian Economic Overview

India remained the fastest-growing major economy for the fourth consecutive year, with real GDP growth estimated at 7.4% and Gross Value Added (GVA) at 7.3% in 2025-26, driven primarily by domestic consumption and investment demand. The medium-term growth potential is projected at 7%, with FY27 forecasts ranging from 6.8% to 7.2% . Retail inflation declined sharply from 4.6% in 2024-25 to 1.7%, supported by favorable agricultural output and lower food prices, enhancing real purchasing power

• Industry Overview - NBFC Sector

NBFCs continue to play a pivotal role in Indias credit delivery architecture, particularly for underbanked segments and MSMEs. The sector showed steady growth in FY 202526, supported by favorable economic conditions, strong retail credit demand, and regulatory stability.

The RBIs Scale-Based Regulation (SBR) framework continued to guide differentiated supervision based on size, risk, and systemic importance. The sector also witnessed improved asset quality, increased adoption.

Indias banking sector was reported to be in its healthiest state in decades, validated by the IMF-World Bank FSAP 2025. Gross NPAs were at 2.2% and Net NPAs at 0.5%, while bank credit growth accelerated to 14.5% year-on-year, indicating strong credit demand and financial stability of digital lending platforms, and enhanced governance practices.

Despite challenges such as rising cost of funds and intensified competition from banks and fintechs, NBFCs with strong risk management and liquidity positions outperformed the market average.

• Company Overview - Goenka Business & Finance Ltd.

Goenka Business & Finance Ltd., a Reserve Bank of India-registered NBFC, is engaged in the business of:

- Providing secured and unsecured loans, and

- Investing in equity, debt, and other financial instruments.

The Companys business strategy is anchored in its core competencies of prudent credit evaluation, operational efficiency, regulatory compliance, and investment discipline.

In FY 2025-26, the Company has outperformed and has turned in to profit making company with tremendous operational performance. The Company gained Net Proft After Tax of Rs. 4.61 Crore against Net Loss of Rs. 33 Lakhs during the preceding year During the year, the company remained focused on improving its loan book quality, optimizing return on investment, and maintaining conservative risk exposure. It continued to comply with all applicable regulations issued by RBI, SEBI, and other statutory authorities.

• Financial Performance Highlights (Standalone)

in Lakhs)

Note: For further details, refer to the standalone financial statements forming part of the Annual Report.

• Risk Management

The Company has a robust Risk Management Policy that identifies and addresses key business risks, including credit, market, liquidity, interest rate, compliance, and operational risks. The Audit Committee and the Board periodically review and monitor the effectiveness of the risk mitigation framework to ensure alignment with the Companys strategic objectives and regulatory landscape.

• Internal Control Systems and Adequacy

The Company has established an effective system of Internal Financial Controls (IFC) commensurate with its size and operations. These controls ensure the integrity of financial reporting, safeguard assets, and ensure compliance with applicable laws and regulations. The internal audit function operates independently and reports to the Audit

Committee.

• Human Resources

The Company believes that its success lies in the capabilities and commitment of its employees. Various employee development initiatives, including training and upskilling programs, were undertaken during the year. The Company ensures a safe and inclusive work environment. An Internal Complaints Committee (ICC), as per the Sexual Harassment of Women at Workplace Act, 2013, is in place. No complaints were received during the financial year 2025-26.

• Outlook

The outlook for NBFCs remains cautiously optimistic for FY 2026-27, supported by stable macroeconomic indicators, rising demand for credit from retail and MSME segments, and increased digital penetration. Goenka Business & Finance Ltd. aims to leverage technology, improve operational efficiency, and maintain prudent underwriting to drive sustainable and profitable growth.

With a focus on regulatory compliance, strong governance, and stakeholder value creation, the Company is well-positioned to navigate emerging opportunities and challenges in the financial services sector

Details of significant changes in key financial ratios are as given below:

Certain statements in this report concerning the Companys future prospects may be "forward-looking statements," within the meaning of applicable laws and regulations. The actual performance may differ materially from such expectations or projections due to economic conditions, regulatory changes, and other external factors.