Greencrest Financial Services Ltd Management Discussions

ANNUAL OVERVIEW AND OUTLOOK

India entered FY 2025-26 as one of the worlds fastest-growing major economies and the year reinforced that position. Real GDP is estimated to have expanded at a robust pace of 7.6% in FY 2025-26, as highlighted in the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) review of April 2026, with growth remaining broad-based across consumption, investment and sectoral activity. Private Final Consumption Expenditure expanded contributing the largest share of GDP, reflecting stable urban demand and a gradual recovery in rural consumption. Gross Fixed Capital Formation rose, sustaining investment levels at around 30% of GDP, driven by infrastructure creation, manufacturing expansion and capacity additions. Services remained the primary growth engine, while industrial growth also strengthened, aided by infrastructure activity, construction momentum and improved capacity utilisation.

Underlying this aggregate performance, the rural economy provided an important stabilising force. Food grain production reached record levels for the FY 2025-26 crop year supported by a normal monsoon and improved crop yields. With agriculture contributing around 15-16% of GDP and supporting around 45% of the workforce, this was critical to rural income stability and consumption demand. Strengthened procurement operations, continued MSP support and direct benefit transfers supported rural liquidity during the year. Tractor sales, two-wheeler demand and FMCG volumes pointed to a gradual synchronisation of rural and urban consumption trends. Stable agricultural output also helped moderate food inflation during the fiscal year.

Narrowing to the macroeconomic policy environment, the inflation and interest rate picture shifted meaningfully during the year, with direct relevance to credit markets. CPI inflation remained subdued for much of 2025, enabling the RBI to ease the policy repo rate to 5.25% by December 2025. However, as noted in the April 2026 MPC review, the narrative and outlook have changed. Amid rising global commodity prices and renewed supply-side uncertainties stemming from the West Asia conflict, the RBI adopted a more vigilant outlook. Consequently, the MPC maintained the repo rate at 5.25% with a neutral stance, shifting focus to balance durable growth support with strict price stability against imported inflation risks. Liquidity conditions remained adequate, supported by open market operations and calibrated regulatory measures. Stable rates and improving liquidity supported credit off take across retail, MSME and corporate segments. System-wide credit growth remained healthy, with MSME lending expanding at a faster pace, reflecting formalisation and enhanced credit penetration.

The Union Budget FY 2026-27 sustained capital expenditure at approximately 12.2 Lakh Crore, while strengthening MSME credit guarantee frameworks, digital infrastructure and skilling initiatives. These measures are structurally positive for credit demand, entrepreneurship and employment generation.

Looking ahead, India is positioned to transition from cyclical recovery to a phase of more durable, structurally anchored expansion. Domestic demand is likely to remain the principal growth driver, supported by improving income dispersion across urban and rural segments, sustained public investment in infrastructure and a gradual broadening of private capital formation. Economy-wide formalisation, deepening digital integration and policy emphasis on manufacturing competitiveness and MSME development are expected to strengthen productivity and supply-side capabilities. For financial services institutions operating in this environment, the combination of a growing credit-seeking population, improving asset quality and a supportive policy backdrop present a compelling medium-term opportunity.

INDUSTRY OVERVIEW

Indias NBFC sector is on a sustained growth trajectory, with assets under management (AUM) expected to surpass 50 Lakh Crore in FY 2026-27 excluding government-owned NBFCs, as per CRISIL Ratings. NBFC credit growth has historically outpaced Indias GDP growth and this trend is expected to continue. The AUM growth trajectory reflects both its expanding relevance and demonstrated resilience within Indias financial ecosystem.

For FY 2025-26, the credit growth of NBFCs is estimated at 16.7% year on year, a slight moderation from 18.4% in FY 2024-25. Amid declining interest rates, NBFCs faced intense pricing competition from banks, particularly in housing, auto and MSME loans. However, NBFCs gained significant ground in the consumer durable segment, with their market share surging to 59% in FY 2025-26. While banks remained dominant in wholesale lending, NBFCs leveraged rising disposable income and rate cuts to drive retail expansion.

The near-term outlook remains constructive. For FY 2026-27, momentum is expected to gain further pace in specialised segments like Consumer Durable financing, with NBFC market share projected to reach 63%. Growth trajectories will nonetheless vary across segments, shaped by risk calibration, regulatory oversight and funding access. Balance sheet strength and funding diversification remain the critical differentiators.

MSME, housing and auto financing continue to be the bedrock of NBFC credit. Credit outstanding to MSMEs is estimated at 51 Tn in FY 2025-26 (across the system), with NBFCs playing a vital role through digital lending and government credit guarantee schemes. The MSME finance landscape clocked a CAGR of 20.7% between FY 2021-22 to FY 2025-26, propelled by formalisation and GST data-based lending.

OPPORTUNITIES & THREATS

Opportunities

Rising credit demand in Tier 2, 3 and rural markets.

Cross-sell potential through the existing customer base to a wide range of products and services. Growth in secured lending including LAP and gold loans. Growing digital adoption enabling cost efficiencies and wider reach.

Robust credit underwriting and collection capabilities enabling competitive risk-adjusted returns for customers with minimal or no credit history.

Challenges

Regulatory tightening for NBFCs impacting capital and compliance requirements. Competitive intensity from banks, fintechs and other NBFCs. Macroeconomic volatility affecting borrower cash flows and asset quality. Interest rate fluctuations impacting spreads and funding costs.

Exposure to economically sensitive segments such as commercial vehicles and MSME lending creates higher sensitivity to economic cycles and asset quality fluctuations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company has an Internal Audit team that is responsible for independently evaluating the adequacy and effectiveness of all internal control designs and implementation, risk management, systems and processes. Internal Audit team is manned by appropriately skilled, experienced and qualified personnel. The Internal Audit plan is also aligned with the business objectives of the Company which is reviewed and approved by the Audit Committee.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year under review, the Company earned revenue from operations of 3,811.76 lakh, along with other income of 2.38 lakh, taking the total income for the year to 3,814.14 lakh. While the Companys total income exceeded its total expenses, resulting in a net profit for the year, the revenue generated from operations played a meaningful role in meeting the day-to-day operational and financial requirements of the Company. This, in turn, helped reduce the Companys dependence on additional borrowings from the Directors and from banks/financial institutions to fund its working capital and other requirements.

The management remains focused on improving operational efficiency, expanding revenue streams and exercising tighter control over costs, with the objective of strengthening the Companys overall financial performance in the coming years. These efforts are also aimed at progressively reducing the Companys reliance on external sources of finance and building a more self-sustaining operational and financial structure going forward.

RISKS AND CONCERNS

Greencrest Financial Services Limited (GFSL) has exposures in various line of business. GFSL are exposed to specific risks that are particular to their respective businesses and the environments within which they operate, including market risk, competition risk, credit risk, liquidity and interest rate risk, human resource risk, operational risk, information security risks, regulatory risk and macro-economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

MARKET RISK

The Company has quoted investments which are exposed to fluctuations in stock prices. Greencrest continuously monitors market exposure in equity and, in appropriate cases, also uses various derivative instruments as a hedging mechanism to limit volatility.

LIQUIDITY AND INTEREST RATE RISK

The Company is exposed to liquidity risk principally, because of lending and investment for periods which may differ from those of its funding sources. Management team actively manages asset liability positions in accordance with the overall guidelines laid down by various regulators. The Company may be impacted by volatility in interest rates in India which could cause its margins to decline and profitability to shrink. The success of the Companys business depends significantly on interest income from its operations. It is exposed to interest rate risk, both as a result of lending at fixed interest rates and for reset periods which may differ from those of its funding sources. Interest rates are highly sensitive to many factors beyond the Companys control, including the monetary policies of the RBI, deregulation of the financial sector in India, domestic and international economic and political conditions and, inflation. As a result, interest rates in India have historically experienced a relatively high degree of volatility.

The Company seeks to match its interest rate positions of assets and liabilities to minimize interest rate risk. However, there can be no assurance that significant interest rate movements will not have an adverse effect on its financial position.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its success is deeply embedded in the success of its human capital. During 2025-26, the Company continued to strengthen its HR processes in line with its objective of creating an inspired workforce. The employee engagement initiatives included placing greater emphasis on learning and development, launching leadership development programme, introducing internal communication, providing opportunities to staff to seek inspirational roles through internal job postings, streamlining the Performance Management System, making the compensation structure more competitive and streamlining the performance-link rewards and incentives.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

There is no material development in Human Resources, Industrial Relations front etc. during the year under review.

KEY FINANCIAL RATIOS AND RETURN ON NET WORTH

Under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to disclose significant changes (i.e. change of 25% or more as compared with the immediately previous financial year) in financial ratios, including debtors turnover, inventory turnover, interest coverage ratio, current ratio, debt equity ratio, operating profit margin and net profit margin or sector-specific equivalent ratios, as applicable and details of any change in Return on Net Worth as compared with the immediately previous financial year along with a detailed explanation thereof.

None of the financial ratios shows significant changes i.e. a variation of 25% or more compared with the immediately preceding financial year.

Return on Net Worth was in line, during the year, primarily on account of its activities in Capital Market as well as Interest Income on unsecured Loan.

OTHER DISCLOSURES IN TERM OF SCHEDULE V OF SEBI LODR REGULATIONS, 2015

Disclosures in regard to following aspects, have been provided in Notes to Account, forming part of Annual Report – a. Debtors Turnover b. Inventory Turnover c. Interest Coverage Ratio d. Current Ratio e. Debt Equity Ratio f. Operating Profit Margin (%) g. Net Profit Margin (%) or sector-specific equivalent ratios, as applicable.

h. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.]

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company.

COMPLIANCE

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Compliance Department of the Company continues to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Companys Board of Directors and the Companys Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis.

The Company has complied with all requirements of regulatory authorities. No penalties/strictures were imposed on the Company by stock exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years.

By order of the Board
For Greencrest Financial Services Limited

S/d-
Sushil Parakh
DIN: 02596801
Managing Director

Kolkata, September 1, 2026
Registered Office :
8, Ganesh Chandra Avenue
Saha Court, 1 st Floor
Kolkata-700 013