Haryana Capfin Ltd Management Discussions

ECONOMY

In 2025, the global economy grew at an estimated rate of 3.4% despite significant turbulence. The year was marked by record increases in U.S. tariffs and heightened trade policy uncertainty, a raft of trade deals the impact of which is yet to play out, and a surge in AI linked investments. Key factors impacting economic activity included the weaponisation of trade, and the ongoing transition towards technology-driven growth, particularly in North America and Asia.

Global economic growth is projected to slow down with a growth rate of 3.1% in 2026 before recovering to 3.2% in 2027. Advanced economies are expected to grow by 1.8% in 2026, while growth in emerging market and developing economies is projected at 3.9%. Global headline inflation is projected to increase to 4.4% in 2026 and 3.7% in 2027, pausing its previous decline due to higher energy and food prices.

In contrast, India s economic performance remained strong, supported by resilient domestic demand, healthy corporate earnings, and robust infrastructure investments. The secondary sector, including manufacturing and construction, remained the key growth driver, supported by government capital expenditure and private sector participation.

India retained its position as the fifth-largest economy in the world in nominal GDP terms and the third-largest economy in terms of Purchasing Power Parity (PPP), showcasing its growing role in the global economy.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The NBFCs have played a pivotal role in the Indian financial sector for decades, offering services such as loans and advances, acquiring shares/ stocks/ bonds/debentures/securities issued by the government or local authority, and other market instruments.

As per RBI reports, Non-Banking Financial Companies (NBFC) sector remained resilient during FY 2025-26, supported by strong capital buffers, healthy profitability and improving asset quality. The India capital market is experiencing robust expansion, driven by rising retail investor participation, digital transformation of financial services, and strong domestic economic fundamentals. The market benefits from a growing middle class with increasing disposable income, enhanced regulatory frameworks supporting investor protection, and expanding financial literacy initiatives. Digital transformation has revolutionized market access, enabling millions of new investors to participate through user-friendly mobile trading applications and seamless electronic know-your-customer (KYC) processes .The Indian economy s real GDP grew at 7.7% in 2025-26, compared to 7.1% in 2024-25. This growth was driven by strong consumption and increasing investments, reaffirming India s position as the fastest growing major economy. India continued to remain among the fastest growing large economies during FY 2026, supported by domestic demand, infrastructure-led investments and rising digital adoption. The RBI has projected GDP growth to moderate to approximately 6.6% in FY 2026-27, reflecting downside risks from the geopolitical situation in the Middle East and the possibility of a below-normal monsoon.

NBFCs, including companies like Haryana Capfin Limited, benefited from the overall economic recovery and increased credit demand. However, they also faced regulatory tightening under the RBI s Scale-Based Regulation (SBR) framework aimed at strengthening financial stability and risk management.

PERFORMANCE

The Company operates in single segment which is to invest, deal etc. in securities. During the year under review, your Company has earned income in the form of dividends, interest on Loan and profit on sale of investments. Total revenue from operations of the Company during the year was Rs. 643.64 lakh as against Rs. 752.96 lakh in the previous year. Profit before tax during the year was Rs. 1201.94 lakh as against Rs. 692.56 lakh in the previous year. Profit after tax was Rs. 976.15 lakh as against Rs. 522.09 lakh in the previous year.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company continues to maintain a sound and effective internal control framework, in compliance with the provisions of the Companies Act, 2013. Internal controls have been designed to ensure:

Efficient and orderly conduct of business,

Safeguarding of assets,

Prevention and detection of frauds and errors,

Accuracy and completeness of accounting records, and

Timely preparation of financial information.

Internal Auditors of the Company, continued to provide periodic reports. These were reviewed by the Audit Committee, which took appropriate actions to further strengthen the internal financial control systems.

OPPORTUNITIES & THREATS

Opportunities:

Government policies such as Make in India , PLI schemes, and increased infrastructure investment continue to present growth avenues for financial service providers.

Ongoing digitization and the rise of financial inclusion in rural and semi-urban areas open new market opportunities.

Expansion of capital markets and growing retail investor base provide further scope for growth in the financial intermediary segment.

Threats:

The global macroeconomic environment remains uncertain due to geopolitical tensions, inflationary pressures, and supply chain disruptions.

Increased regulatory oversight for NBFCs and changing compliance requirements may affect operational flexibility.

Intensifying competition from fintech players and traditional financial institutions may put pressure on margins.

Despite these challenges, the Company remains cautiously optimistic and is proactively exploring new avenues while mitigating potential risks.

RISK MANAGEMENT

Your Company follows a risk management process for identification, categorization and prioritization of various risks like operational, financial, legal and other business risks. The Chief Financial Officer aided by the Internal Auditor reviews the effectiveness of the process at regular intervals and reports the same to the Audit Committee.

The Company s risk management framework focuses on identifying, evaluating, and mitigating key business risks. During FY 2025 26, the Company further enhanced its approach by:

Improving risk assessment tools to capture emerging risks,

Strengthening of risk controls,

Ensuring compliance with the updated regulatory norms under RBI s SBR Framework.

The Company continues to maintain a prudent and proactive risk culture to safeguard stakeholder interests while supporting growth.

OUTLOOK

The India capital market outlook remains positive, supported by strong economic fundamentals, favorable demographic trends, and continued regulatory reforms. The market generated a revenue of USD 3.8 Billion in 2025 and is projected to reach USD 6.8 Billion by 2034, growing at a compound annual growth rate of 6.27% from 2026-2034.

HUMAN RESOURCES

Haryana Capfin Limited continues to recognize the critical role of human capital in achieving its strategic objectives. During the year, efforts were made to attract and retain skilled professionals, develop leadership talent, and promote a culture of accountability and continuous learning.

Training and development programs were conducted to enhance employee competencies in line with evolving business needs. HR policies were aligned with best practices to promote diversity, collaboration, and performance-driven culture.

As on 31st March, 2026, there were 12 permanent employees of the Company.

KEY FINANCIAL RATIOS

Type of Ratio	F.Y. 2024-25	F.Y. 2025-26	Change%	Remarks
(i) Debtors Turnover	NA	NA	-	-
(ii) Inventory Turnover	NA	NA	-	-
(iii) Interest Coverage Ratio	-	130.36	100%	Due to increase in finance cost
(iv) Current Ratio	88.06	0.89	-98.98%	Due to increase in borrowings.
(v) Debt Equity Ratio	-	0.07	100%	Due to increase in borrowings.
(vi) EBIDTA Margin (%)	91.98%	186.74%	103.00%	Due to increase in other income.
(vii) Net Profit Margin (%)	69.33%	151.66%	118.72%	Due to increase in other income.
(viii) Return on Net Worth (RoNW)	1.55%	3.09%	118.66%	Due to increase in other income

CAUTIONARY NOTE

Statement made in the Management Discussion and Analysis Report describing the company s objectives, projections, estimates, expectations may be Forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied.

Important factors that could make a difference to the Company s operations include economic conditions affecting demand supply and price conditions in the markets in which the company operates, changes in the government regulations, tax laws & other statutes and other incidental factors.

For and on behalf of the Board of Directors

Haryana Capfin Ltd.

Place : Gurugram	Shruti Raghav Jindal	Vijay Kaushik
Dated : 10 August, 2026	Whole-time Director	Director
	DIN- 02208891	DIN- 02249672