Haryana Capfin Ltd Management Discussions

ECONOMY

The global economy grew at 3.1% in 2024, marginally slower than the previous year. Global growth continued to face headwinds from persistent geopolitical tensions, disruptions in global supply chains, elevated energy prices, and tight monetary policies adopted by major economies to curb inflation. Although inflation showed signs of cooling, high interest rates and cautious consumer sentiment prevailed across major markets.

In contrast, India’s economic performance remained strong, supported by resilient domestic demand, healthy corporate earnings, and robust infrastructure investments. The Indian economy recorded a growth rate of 7.2% in FY 2024-25, as per the Reserve Bank of India (RBI), reflecting continued momentum from the previous year. 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 Indian financial services sector remained vibrant during FY 2024-25, supported by macroeconomic stability, increased credit penetration, and strong capital markets. The Government of India’s continued thrust on infrastructure, digital transformation, and formalization of the economy contributed positively to the sector.

The Union Budget 2024-25 reiterated the government’s focus on capital expenditure with an allocation of Rs. 11.11 lakh crore, reflecting an 11.1% increase over the previous year. This created multiplier effects across various sectors, spurring credit demand and business activity.

The Indian equity markets continued their upward trajectory during the year, buoyed by positive investor sentiment, strong retail participation, and a favorable policy environment. IPO activity remained robust, with companies leveraging market conditions to raise growth capital. Financial services, infrastructure, manufacturing, and technology were among the key contributors.

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.

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

The Company’s risk management framework focuses on identifying, evaluating, and mitigating key business risks. During FY 2024-25, 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.

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.

KEY FINANCIAL RATIOS

Type of Ratio	F.Y. 2023-24	F.Y. 2024-25	Change
(I) Debtors Turnover	NA	NA	-
(ii) Inventory Turnover	NA	NA	-
(iii) Interest Coverage Ratio	NA	NA	-
(iv) Current Ratio	56.53	NA	-
(v) Debt Equity Ratio	0	0	-
(vi) EBIDTA Margin (%)	86.02	91.98	6.94
(vii) Net Profit Margin (%)	64.16	69.33	8.06
(viii) Return on Net Worth (RoNW)	0.70	1.55	121.42

The Current ratio of financial year 2024-25 is not available due to re-grouping of figures.

RoNW saw a significant rise, reflecting higher returns on equity base.

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 : 3rd September, 2025	Whole-time Director	Director
	DIN- 02208891	DIN- 02249672