India Home Loans Ltd Management Discussions

INTRODUCTION Global Overview

Throughout FY26, the global economy continued to grapple with significant challenges, including heightened geopolitical tensions, persistent supply chain disruptions, and ongoing inflationary pressures, which have contributed to a prolonged cost-of-living crisis. By March 2026, the global financial landscape faced additional headwinds due to banking sector turmoil in several advanced economies. This situation raised concerns about potential contagion risks, leading to increased volatility across global markets.

Financial Year 2025-26 was marked by a complex global economic environment characterized by geopolitical tensions, evolving trade policies, moderating inflation, and changing monetary policy across major economies. Ongoing geopolitical conflicts, supply chain disruptions, and fluctuations in commodity and energy prices continued to influence global economic activity and financial markets. These developments resulted in periodic volatility in capital markets and cautious investment sentiment across both developed and emerging economies. global trade experienced a mixed performance during the year as several economies adopted policy measures to strengthen domestic industries while simultaneously pursuing bilateral and multilateral trade agreements to improve market access and diversify supply chains. These developments created both opportunities and challenges for emerging markets, including India.

According to the International Monetary Fund (IMF) - World Economic Outlook (April 2026), the global economy is projected to grow by 3.1% during calendar year 2026 compared with 3.4% in 2025. Growth in advanced economies remained subdued due to tighter financial conditions and slower industrial activity, while emerging market and developing economies continued to demonstrate comparatively stronger economic performance. Global inflation remained above the long-term targets of several central banks despite significant moderation from previous peaks. The IMF projects global headline inflation to increase marginally from 4.1% in 2025 to 4.4% in 2026 before moderating to 3.7% in 2027. Consequently, central banks continued to adopt a balanced and data-driven monetary policy approach to support economic growth while preserving price stability. India continued to distinguish itself as one of the worlds fastest-growing major economies. The IMF projects Indias economic growth at 6.5% for both 2026 and 2027, reflecting the countrys strong macroeconomic fundamentals, resilient domestic demand, sustained public infrastructure investment, expanding digital economy, and continued policy reforms.

India Overview

Indias housing finance market exhibits rapid expansion driven by urbanization, a low mortgage-to-GDP ratio near 12%, and major government policy pushes like Pradhan Mantri Awas Yojana (PMAY-U 2.0), which targets 300 lakh (30 million) additional homes through FY2029. Active loan accounts are heavily concentrated in the affordable housing segment?defined by regulatory caps of ?650 lakh (?65 million) in metros and ?400 lakh (?40 million) in non-metros?where public-sector banks held a 47.33% market share, while specialized Housing Finance Companies (HFCs) capitalize on underserved niches. Within this landscape, micro-cap non-deposit-taking HFCs highlight localized operational realities The wider real estate and ownership of dwellings sector acts as a powerful macroeconomic driver, contributing approximately 7% to Indias annual Gross Value Added (GVA), while the total individual home loan market size has crossed a milestone of ?3,700,000 lakh (?37.00 lakh crore), capturing an 11% share of Indias national GDP amid a robust 7.4% to 7.7% national GDP growth rate for the fiscal year

Real Gross Value Added (GVA) is estimated to grow by 7.7% during FY 2025-26, supported primarily by robust growth in manufacturing and services, while agriculture recorded relatively moderate growth. Strong domestic consumption, increasing capital expenditure, improving employment conditions, and continued infrastructure development remained key drivers of economic expansion. Indias inflation remained well contained during most of the financial year, enabling the Reserve Bank of India (RBI) to gradually shift its monetary policy stance towards supporting economic growth. During FY 2025-26, the RBI reduced the policy repo rate from 6.25% to 5.25% through successive policy rate reductions, improving liquidity conditions and reducing borrowing costs across the financial system.For the housing finance sector, the evolving macroeconomic environment remained favourable. Government initiatives promoting affordable housing, increasing urbanization, rising disposable incomes, improved infrastructure, and growing aspiration for home ownership continued to support long-term demand for residential housing finance. Lower interest rates further enhanced housing affordability and encouraged home loan demand across customer segments.

Housing and Real Estate Market

The housing sector continues to play a pivotal role in Indias economic growth due to its strong linkages with more than 250 allied industries, including cement, steel, construction materials, electrical equipment, consumer durables, and financial services. Besides contributing significantly to Gross Domestic Product (GDP), the sector remains a major source of employment generation and infrastructure development, making it one of the key pillars of the Indian economy.

The Indian residential real estate market remained resilient during FY 2025-26, supported by favourable demographics, rapid urbanization, rising household incomes, increasing nuclear families, and growing aspirations for home ownership. Government initiatives such as Pradhan Mantri Awas Yojana (PMAY 2.0), the SWAMIH Fund, continued focus on affordable housing, and investments in urban infrastructure further strengthened housing demand across various income segments.The implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA) has significantly improved transparency, accountability, and consumer confidence in the real estate sector. Together with increased formalization of the housing market and wider adoption of digital technologies, these reforms have created a more sustainable and well-regulated ecosystem for homebuyers, developers, and lenders. The residential housing market continued to witness healthy demand across major cities during the year. While affordable and mid-income housing remained the largest contributors by volume, premium and luxury housing segments experienced strong momentum, reflecting improving consumer confidence and rising purchasing power. Developers maintained a balanced approach towards new project launches while focusing on timely project execution and quality delivery. The commercial real estate sector also demonstrated resilience, driven by sustained demand from Global Capability Centres (GCCs), technology companies, financial institutions, and multinational corporations. Continued office leasing activity, expanding business operations, and stable occupancy levels supported investment in commercial real estate across key metropolitan markets. The housing finance industry continued to register steady growth during FY 2025-26, supported by favourable interest rates, increasing mortgage penetration, rising housing demand, and improved access to formal credit. Housing Finance Companies (HFCs) and banks continued to play a critical role in expanding home ownership by providing financing solutions across affordable, self-employed, salaried, and semi-urban customer segments. Mortgage penetration in India continues to remain relatively low compared with many developed economies, providing significant long-term growth potential for the housing finance industry. The ratio of housing loans to GDP has steadily improved over the past decade, reflecting increasing financial inclusion, greater formalization of the lending ecosystem, and rising consumer preference for institutional housing finance.The banking and housing finance sectors continued to maintain healthy credit growth during the year. Public Sector Banks, Private Sector Banks, and Housing Finance Companies collectively expanded their housing loan portfolios, supported by improving credit quality, enhanced digital lending capabilities, and stronger risk management practices. Government policy support and a stable regulatory environment further strengthened the long-term outlook for the sector.

The Company

IHLL offers retail home loan product for affordable housing segment. Under this product, loans are offered to the customers for Purchase of home, home improvement, home extension and for construction of a dwelling unit on an owned plot of land. India Home Loan Limited formerly known as (MHFCL) Manoj Housing Finance Company Ltd which was incorporated on 19th Dec 1990 under the Companies Act, 1956 in Maharashtra. During 2008-09, Mr. Mahesh Pujara and Associates took over this company and subsequently, the name of Manoj Housing Finance Company Ltd has been changed to India Home Loan Limited. India Home Loan Limited is a BSE listed company. IHLL specializes on loans to families in the self-employed category where formal income proofs arent easily available and their repayment capacity is appraised based on their cash flows IHLL started full scale operations in February 2018. IHLL offers following products to its customers: (i) home loans; (ii) loan against property; (iii) developer financing. IHLL has started offering affordable housing loans on a pilot basis in FY 2022. IHLL focuses on low risk segments across its portfolio. Individual housing loans, a low risk segment, contribute to more than 70% of the portfolio. Even within the low risk individual housing loans segment, nearly 95% of AUM consists of loans given to salaried and self-employed professionals. Going forward, it intends to increase its presence in self-employed and affordable housing segment with a calibrated risk strategy to cover full spectrum of housing loan market. IHLL is committed to building an optimal mix of housing and non-housing loan portfolio to balance risk and returns. IHLL has created a prudent and differentiated developer financing model with an immaculate portfolio performance. Going forward, IHLL plans to: i) deepen relationship with existing developers; ii) expand reach to new developers with granular exposure strategy; iii) expand its developer financing offerings to new geographies; and iv) create presence with the large developers. IHLL offers highest standards of engagement and service to its retail and corporate customers.

For India Home Loan Limited, these favourable macroeconomic developments provided opportunities to strengthen its retail housing finance portfolio while maintaining prudent risk management practices. The Company continued to focus on serving underserved and emerging customer segments through responsible lending, disciplined credit appraisal, digital process enhancement, and customer-centric service delivery. despite an increasingly competitive lending environment and pressure on lending spreads arising from lower interest rates, India Home Loan Limited remained committed to maintaining asset quality, strengthening its liability profile, improving operational efficiency, and ensuring sustainable long-term growth. The Companys strategy continues to be aligned with Indias expanding housing finance market and the Governments vision of increasing access to affordable housing finance. looking ahead, Indias robust economic fundamentals, stable financial system, supportive regulatory framework, and sustained demand for housing are expected to provide a strong foundation for the continued growth of the housing finance industry. India Home Loan Limited remains well positioned to capitalize on these opportunities while delivering sustainable value to its customers, stakeholders, and shareholders through prudent governance, responsible lending practices, and sound financial management.

However Rising interest rates may reduce affordability and demand for housing loans. IHLL is continuously investing in creating frictionless processes to provide seamless and consistent experience to its customer throughout the loan lifecycle. The Company ended the year with a capital-to-risk weighted asset ratio (CRAR) of 75.02% as on 31st March 26 which is well above the regulatory limits specified by the regulator

IHLL closed FY2026 with an AUM of Rs. 4867 Lakhs & AHS of Rs. 4846 Lakhs.

As on 31 March 2026, IHLLs borrowings stood at Rs. 4815 Lakhs

Using its robust risk management and portfolio monitoring framework, IHLL continued to take enhanced credit costs based on emerging trends across its different portfolios. IHLLs Gross and Net NPA as at 31st March 2026 stood at 2.69% and 1.93% respectively.

The performance highlights for FY 2025-2026 are given in below.

IHLLs Performance Highlights, FY 2025-2026

• Assets under management (AUM): 4867 Lakhs.

• Total Income: Rs. 1481.23 Lakhs

• Net interest income (NII): Increased by 27 % to Rs. 161 Lakhs.

• Profit before tax (PBT): Decreased by 50 % to Rs. 17 Lakhs.

• Profit after tax (PAT): Decreased by 65 % to Rs. 18 Lakhs.

• Capital Adequacy Ratio as of 31st March 2026 was 75.02 %, which is well above the RBI norms.

Business Update Segment-wise or product-wise performance

Home Loans

IHLL offers home loans for ready to move in homes as well as those under construction across Maharashtra, Gujarat and Rajasthan locations in India with an average loan value of Rs. 5 to 10 lakhs. It follows a micro- market presence strategy using a mix of direct and indirect channels.

As at the end of FY2026, the home loans business had AUM of Rs. 4053 Lakhs Loan Against Property

IHLL offers Loans Against Property (LAP) to against mortgage of their properties. The LAP business is operational in Maharashtra, Gujarat and Rajasthan locations across India with an average loan value of Rs. 5 to 15_lakhs

It ended FY 2025-2026 with AUM of Rs. 229 Lakhs

Developer Loans

IHLL offers construction finance to small and mid-size developers with strong track records of timely delivery of projects and loan repayments. It is present in Maharashtra and Gujarat locations across the country. Developer relationships enable IHLL to acquire retail customers for home loans.

Its AUM from developer loans was Rs. 585 Lakhs

Assets Under Management (AUM): A Snapshot

Table 2 breaks down the AUM across the major business verticals.

Table 2 (a): Assets Under Management

(Rs in Lakhs)

AUM	FY2026	FY2025	Growth	AUM Mix
Housing loan	4053	4662	(609)	83%
Loan against property	229	228	1	5%
Other loans	589	71	514	12%
Total	4867	4961	(94)	100%

Financial Performance

(Rs in Lakhs)

Particulars	FY 2026	FY 2025	Change
Interest Income	1465.21	1360.17	105
Interest and finance charges	724.74	764.37	(39.63)
Net interest income	740.47	595.80	144.67
Other Income	16.02	8.67	7.35
Total operating expenses	740.45	550.67	189.82
Pre-provisioning operating profit	16.04	53.84	(37.80)
Loan losses and provisions	(130)	19.14	(20.44)
Profit before tax (PBT)	17.34	34.70	(17.36)
Profit after tax (PAT)	9.64	27.28	(17.64)
Other comprehensive income/ (expenses)	(10.31)	(0.82)	(9.49)
Total comprehensive income	(0.67)	26.46	(27.13)
Earnings per share (EPS) basic, in Rs.	0.07	0.19	(0.12)

Risk Management and Portfolio Quality

As a Housing Finance Company (HFC), IHLL is exposed to credit, liquidity, and interest rate risk. It continues to invest in talent, processes, and emerging technologies for building advanced risk and underwriting capabilities.

IHLL has a well-defined risk governance structure which provides for identification, assessment, and management of risks. Risk management involves making decisions and establishing governance systems that embed and support effective risk process, as well as building an organizational culture that supports agility. The Company has a Risk Management Committee (RMC)

IHLLs balanced approach to portfolio management coupled with a rigorous portfolio review mechanism has enabled it to pick up early warning signals and take corrective actions. IHLLs loan portfolio continues to remain healthy and in the growth mode.

A robust governance framework ensures that board committees approve risk strategies and delegates credit authorities, and robust underwriting practices coupled with continuous risk monitoring ensure that portfolios stays within acceptable risk levels. IHLL follows RBI / NHB prudential norms for asset classifications and Expected Credit Loss (ECL) model prescribed under Ind AS for provisioning.

IHLL calibrates its risk policies and underwriting norms periodically to promptly respond to the changing market scenario.

IHLLs Gross and Net NPA as at 31 March 2026 stood at 2.69% and 1.93% respectively.

Asset Liability Management (ALM)

IHLLs total borrowings stood at Rs. 4815 Lakhs as of 31 March 2026. IHLLs Asset Liability Committee (ALCO) meets as and when required to i) monitor asset-liability mismatches; ii) ensure that there are no imbalances on either side of the balance sheet; and iii) ensure that adequate level of liquidity is maintained.

IHLL has Asset Liability Committee (ALCO) to monitor its asset liability management. Borrowings of the Company are guided by Board approved resource raising policy.

ALCO reviews macroeconomic conditions affecting the housing finance business, liquidity situation and interest rate environment and provides direction to treasury on resource mobilization and fund planning.

The ALM position of the Company is based on the maturity buckets as per the guidelines issued by the regulator from time to time. IHLL assesses behavioralised maturity pattern of its assets and liabilities and maintains adequate liquidity for its business.

Customer Service

Mortgages is a long duration product and a high involvement buying decision for the customer - which involves frequent and regular interactions. To enable a transparent, convenient and hassle-free customer experience, our dedicated team of customer service supported with transparent operations and strong technology infrastructure, helps us to be responsive to our customers thereby maintaining high standards of customer service. Digital communication, continuous customer feedback and transparency remain key focus areas of the Company while engaging with customers.

The Company strives towards improving and strengthening its customer experience by transitioning from query / complaint resolution to first time right delivery to customers. To uphold highest standards of transparency, IHLL has implemented an end-to- end proactive communication framework through life stages of customer journey. IHLL continues to leverage technology to gauge the unstated and emerging service needs of customers.

Human Resources

At IHLL, employees are the most valuable assets. In IHLL, employees performance enhancement, well- being, skill development, growth and engagement remain a key focus area. IHLL fosters a culture of productive empowerment to build an outcome focused organization.

As on 31st March 2026, IHLL had 46 employees.

Internal Control Systems and their Adequacy

IHLL has instituted adequate internal control systems commensurate with the nature of its business and the size of its operations. Internal audit is carried out by external agency to evaluate the adequacy of all internal controls and processes. All significant audit observations and follow-up actions thereon are reported to the Audit Committee. The Audit committee reviews the internal audit reports and the adequacy and effectiveness of internal control.

Fulfilment of the RBI and NHBs norms and standards

IHLL fulfils and often exceeds norms and standards laid down by the RBI as well as NHB relating to the recognition and provisioning of non-performing assets and capital adequacy, etc. The capital adequacy ratio of the Company was 75.02 % as of 31 March 2026, which is well above the regulatory norms

The Reserve Bank of India, vide circular dated 22 October 2020, mandated housing finance companies to have minimum 60% of its assets towards housing finance and 50% of total assets towards housing finance for individuals. As at 31st March 2026 the Company had 42.37% of its total assets deployed towards housing finance and 41.68% towards housing finance for individuals.

Disclosure of accounting treatment

There is no change in the accounting treatment in the Financial Year 2025-2026 as compared to Financial Year 2024-2025. Segment Reporting

The Companys main business is to provide loans for the purchase or construction of residential units. All other activities revolve around the main business. Hence, there are no separate reportable segments.

Key Ratios

Ratios	FY 2026	FY 2025
Debtors Turnover	NA	NA
Inventory Turnover	NA	NA
Interest Coverage Ratio	NA	NA
Current Ratio	2.05	1.74
Debt Equity Ratio	1.12	1.28
Operating Profit Margin (%)	1.09%	2.33%
Net Profit Margin (%)	0.66%	0.98%
Net interest income to average loans	15%	3.45%
Total operating expenses to NII	1.00	0.92
Return on equity (ROE)	(0.25%)	6.39%
Capital to risk-weighted assets ratio (CRAR)	75.02%	75.92%
Tier I	49.87	38.51
Tier II	25.15	19.92
Gross NPA	2.69%	3.22%
Net NPA	1.93%	2.31%
Provisioning coverage ratio (PCR)	174%	142%
EPS - Basic (Rs.)	0.07	0.19
Diluted (Rs.)	0.07	0.19

Cautionary Statement

Some statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied.