Gowra Leasing & Finance Ltd Management Discussions

This Report on Management Discussion and Analysis for FY 2025-26 provide an integrated overview and assessment of your companys strategy, governance, risks and financial performance. It also outlines relevant information on the Companys future outlook and prospects to offer better insights into its activities and progress, reporting principles and framework.

BACKGROUND

Gowra Leasing & Finance Limited (‘GLFL or ‘the Company) is a Non-Systematically Important Non-Deposit taking NBFC registered with the Reserve Bank of India (RBI) and comes under the Base Layer (BL) with reference to Scale Based Regulation (SBR) of RBI. Your company is essentially a loan company categorized by Reserve Bank of India with asset size of less than Rs. 100 Crores. The main business of the company is to extend loans and advances with other lending activities.

MACROECONOMIC OVERVIEW

The Indian economy during the financial year 2025-26 looks stronger and more stable footing, underpinned by resilient economic activity, sustained credit demand and a more balanced interest rate environment. Despite ongoing global challenges, growth remains resilient, supported by policy measures and continued momentum in private sector investment. Notwithstanding these challenges, India recorded robust GDP growth of approximately 7.7% and continued to be one of the fastest-growing major economies in the world.

OPPORTUNITIES AND THREATS

The Non-Banking Financial Company (NBFC) sector has emerged as a vital pillar of Indias financial ecosystem, complementing the traditional banking system by expanding credit access across underserved and niche segments. Over the past two decades, NBFCs have demonstrated strong and sustained growth, driven by rising demand across retail, MSME, infrastructure and consumer financing. Considering lower transaction costs, quick decision making and prompt service standards have given edge to NBFCs from banks. NBFCs role in Indias credit landscape and its increasing relevance in bridging structural financing gaps.

The major challenges faced by NBFCs currently are funding and liquidity management, as they are not allowed to take public deposits for lending activities unlike banks. The NBFCs mostly use their own funds which includes fund raised through equity and have major dependency on borrowing from Directors, Intercorporate Loans and Finance from Banks, though small

NBFCs face difficulties in raising funds from Bank due to banks internal policy imposing lending restrictions to NBFCs.

Balancing various funding sources, managing liquidity effectively and sustaining profitability are ongoing challenges for NBFCs in India. Long pending judgements from the courts and non-performing assets are major risks always surrounding the Lending business. Further, Competition from banks and digital lenders may place pressure on pricing, customer acquisition and market share, particularly in profitable segments.

FUTURE OUTLOOK

NBFCs growth has remained broad-based across consumption, investment and sectoral activity. NBFCs are core drivers of Indias credit ecosystem, outperforming traditional banks and it is expected to continue its growth at a faster pace. The NBFC sector is rapidly transforming to capture massive macroeconomic and structural opportunities and has played an important role in Indias financial system. They are focused on meeting customers demands and aspiration by providing customized financial products and solutions that are delivered efficiently. The growing Indian Market has sufficient lending opportunities but your company believes in aggression with caution and hence intends to extend the credits only after thorough scrutiny of the integrity of the borrowers, repaying capacity and sufficient security along with other due diligence.

During the financial year 2025-26, the Company successfully completed a preferential allotment of 22,93,400 equity shares at an issue price of 120 per equity share, aggregating to 27.52 crore. The proceeds from the said preferential allotment are intended to support the Companys growth plans, strengthen its capital base and meet the increasing demand of funds in its lending business.

Further to strengthen the lending capacity your company is proposing to increasing its borrowing power with the approval of the Shareholders.

RISK MANAGEMENT

For survival and success of any financial business, Risk management is very essential and crucial aspect. NBFCs are exposed to credit risk, liquidity risk, market risk, operational risk and risk of NPA. Comprehensive risk assessment and mitigation is important part of risk management. The Company manages these through a comprehensive risk management framework designed for proactive identification and mitigation. The Board of Directors maintain oversight across all risk categories, supported by team of management that ensure focused supervision and stringent controls.

INTERNAL CONTROL

Internal controls drive disciplined execution, regulatory compliance, and reliable financial reporting. The Company has put in place an adequate internal control system to safeguard all its assets and ensure operational efficiency. The Companys well-defined organizational structure, checks and balances, authority structures across key activities such as lending, collections and compliance monitoring, documented policy guidelines, ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources.

Professional and efficient Audit firm has been placed as Internal Auditors to conduct internal audit and review the operations of the Company periodically. The reports are reviewed by the Audit Committee and the Board of Directors and their suggestions were implemented effectively. As per the requirement of the Company, internal control systems are strengthened and processes were updated.

PERFORMANCE HIGHLIGHTS

During the year your company earned a revenue of Rs. 11.60 crore with a net profit after tax as Rs. 5.81 crore. The company has performed significantly well by marking growth of 51.00% in revenue and 35.34% in Profit after tax as compared to previous year.

DIVIDEND

The Company has not declared dividend for the year ended 31st March, 2026 and intends to plowback the revenue into companys operation to maximize opportunity for growth.

NON-PERFORMING ASSETS

The Company does not have Non-Performing Assets for the year ended 31st March, 2026.

KEY FINANCIAL RATIOS

The details of change of 25% or more as compared to the immediately previous financial year in key financial ratios are as below:

Interest Coverage Ratio: There has been change of -50% due to increase in Interest cost during the year.

Current Ratio: There has been change of 37% due to increase in loans during the year.

Debt Equity Ratio: There has been change of -59% due to increase in unsecured loans during the year.

Operating Profit Margin: There has been change of -29% due to increase in profit during the year.

Net Profit Margin: There has been change of -38% as the interest income has been doubled from the previous year.

CHANGE IN RETURN ON NET WORTH

The Return on Net Worth as compared to the previous financial year has been reduced by 33% mostly due to increase in share capital in the financial year 2025-26 as the Company successfully completed preferential allotment of 22,93,400 equity shares at an issue price of 120 per equity share, aggregating to 27.52 crore to meet the fund required from lending business.

HUMAN RESOURCES

Human capital remains integral to your Company and it firmly believes that Human Capital is its most important asset. It also strives hard to retain its experienced team rich in domain expertise as it recognizes their importance in the growth of the Company. Your company is committed to provide right opportunities to employees to realize their potential. The workforce is aligned with its credit assessment and collections, supporting consistent execution and enabling effective service delivery.

MATERIALITY AND SCOPE

The information included in this report are material to all stakeholders of the company and provides an overview of its business and related activities. The matters disclosed in this report may have substantial impact and can affect the

Companys ability to create value.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contain forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed or implied in these statements due to various factors including economic conditions, regulatory changes, market dynamics and other unforeseen circumstances. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are advised to exercise caution and not to place undue reliance on these forward-looking statements

ACKNOWLEDGEMENT

The Board of Directors extends its sincere appreciation to the Reserve Bank of India (RBI), Bombay Stock Exchange for their continuous support, cooperation and valuable guidance. The Directors also take this opportunity to express their heartfelt gratitude to the Companys Board of Directors, customers, shareholders, employees and bankers for their constant trust and confidence. The Directors also acknowledge the invaluable advice, insights and support received from auditors and statutory authorities, which have been instrumental in the Companys continued growth and success.

		For and on behalf of the Board of Directors of Gowra Leasing & Finance Limited
	Sd/-	Sd/-
Place: Secunderabad	Gowra Lakshmi Prasad	Gowra Srinivas
Date: 27-06-2026	Director	Managing Director
	(DIN: 00268271)	(DIN: 00286986)