Indergiri Finance Ltd Management Discussions

Indergiri Finance Limited is a limited company domiciled and incorporated in India and its shares are publicly traded on the Bombay Stock Exchange Ltd. (BSE). The Company is presently classified as a Non-Banking Financial Company duly registered with the Reserve Bank of India. The Company is engaged into the business of financial services, working capital loans, project finance, Business Loan, Equipment Loan etc.

This Management Discussion and Analysis Report contain forward-looking statements which are based on certain assumptions, risks, uncertainties and expectations of future events. The actual results, performance or achievements can differ materially from those projected in any such statements depending on various factors including: the demand supply conditions, change in government regulations, tax regimes, economic development within the country and abroad and such other incidental factors over which, the Company does not have any direct control. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on basis of any subsequent developments, information or events.

This Report is framed in compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations").

The Indian economy maintained steady momentum in FY 2025-26, supported by resilient domestic demand, strong financial markets, and stable monetary policy. The capital markets witnessed moderate volatility driven by global macro-economic factors, but overall liquidity remained supportive.

The NBFC sector, particularly investment NBFCs, played an important role in channelizing capital into equities, debt securities, and other financial instruments. Regulatory oversight by the RBI continued to strengthen, with a focus on governance, transparency, and financial discipline across NBFC layers.

Non-Banking Financial Companies play a vital role in the financial sector of our economy along with other financial institutions. They largely extend support to the Micro, Small and Medium Enterprises (MSMEs) which get benefitted due to their strategic operational techniques coupled with lower costs of delivery, lower restrictions on customers etc. Over the years, NBFCs have emerged as an alternate choice and at times the first choice for several customers who need short term/ medium term financing. The NBFCs work under strict regulations of the RBI and reach out to even those sectors which the Banks cannot reach.

There are many structural shifts that are reshaping the global economy, including growing fragmentation in trade, rapid technological disruption, ongoing climate change and protracted geopolitical hostilities. The Indian economy and the financial system, however, continue to exhibit resilience, aided by strong macroeconomic fundamentals and a robust financial system. Despite a broad deceleration in bank credit growth, the share of credit to the micro, small and medium enterprises (MSME) sector in total non-food bank credit has been growing steadily and its growth has outpaced that in other sectors during 2025-26 at 17.7 percent, which is extraordinarily strong and indicates a promising prospect for rising output and employment in the nation.

The governments credit guarantee schemes improved flow of credit to the MSME sector, especially vulnerable enterprises, with approximately Rs. 6.28 lakh crore guaranteed under two flagship schemes, viz., the Credit Guarantee Fund for Micro Units (CGFMU) and the Emergency Credit Line Guarantee Scheme (ECLGS). The NPA ratio in both schemes remains contained despite the riskiness of borrowers.

The announcement of large tariffs by the US administration in April, 2025 has set in motion a new paradigm in trade and economic policy. Besides, geopolitical risks remain elevated. Against this backdrop, near-term global financial stability risks have increased. Globally, risks associated with elevated public debt and possibilities of further corrections in asset prices remain high.

According to the Financial Stability Report of the RBI (June, 2025), policy uncertainty and unpredictability may continue to influence global growth. International agencies, including the IMF, the OECD and the World Bank, have revised their respective growth projections downwards. The World Economic Outlook (WEO) released by the International Monetary Fund (IMF) in April, 2025 also indicates that a series of new tariff measures by the United States and countermeasures by its trading partners have brought the effective tariff rates to levels not seen in a century. This on its own is a major negative shock to growth.

All this is going to give impetus to the Indian economy and service sector, in particular. The Company expects to benefit from the favourable economic outlook for the Indian and global economy.

The Company operates in single business segment i.e. NBFC. As the Company is only in one line of business, product wise disclosure of performance is not required to be made.

The market turbulence in the month of April was a stark reminder of how existing vulnerabilities in the global financial system are amplified by sudden shocks. Though financial markets have stabilised after this episode, they remain volatile and highly sensitive to economic and geopolitical developments.

There are many structural shifts that are reshaping the global economy, including growing disparity of tariffs in trade, technological disruptions, climate change concerns and prolonged geopolitical hostilities. They make economic forecasts difficult and policy interventions challenging. However, in this global turmoil, the Indian economy continues to be a key driver of global growth. Growth momentum is buoyed by strong domestic growth drivers, sound macroeconomic fundamentals and prudent policies. According to the April 2025 edition of the IMFs World Economic Outlook, Indias economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a solid lead over global and regional peers.

The Management of the Company is looking for a steady growth of the Company and aims at maximising the shareholders wealth by way of earning maximum profits at low investment costs. The Company is cautiously optimistic in its outlook for the year 2026-27. The outlook for the business of the Company is also discussed in the Directors Report.

The Company is providing financial, Business Loans, Medical Equipments loans and undertakes wide spectrum of activities and therefore has a well-diversified portfolio of services provided. Currently, there are no risks faced by the Company.

The Company has an Internal Control System, commensurate with the size and nature of its operations. During the year, controls were tested and no material weakness in design and operation were observed. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies.

A detailed discussion on financial performance with respect to operational performance has been presented in the Directors Report.

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognises the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation. Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

The details of the applicable key financial ratios are given in Notes to the Financial Statements.

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). The details of accounting treatment are given in Significant Accounting policies at note no. 1, 2 & 3 of the Financial Statements.