Indian Infotech and Software Ltd Management Discussions

The Management Discussion and Analysis Report for the year ended 31^st March, 2026 as stipulated under Regulation34(2) read with Schedule V of SEBI (LODR) Regulations 2015 have been included in consonance with the Code of Corporate Governance as approved by The Securities and Exchange Board of India (SEBI). Investors are cautioned that these discussions contain certain forward looking statements that involve risk and uncertainties including those risks which are inherent in the Companys growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this report consequent to new information or developments, events or otherwise.

The operational performance and future outlook of the business has been reviewed by the management based on current resources and future development of the Company.

ECONOMIC OVERVIEW OF FINANCE INDUSTRY:

Macroeconomic Overview

The global economy continued to demonstrate resilience into 2026, with the International Monetary Funds World Economic Outlook (January 2026 update) projecting global GDP growth at around 3.3% for 2026. Advanced economies are expected to grow modestly at approximately 1.5%-1.6%, while emerging markets and developing economies are projected to expand faster at about 4.0%, led by India and parts of Southeast Asia.

Global inflation, after showing signs of moderation, is now expected to remain elevated due to recent energy shocks, with the OECD projecting world inflation of around 4.0%-4.2% in 2026, driven primarily by geopolitical tensions and commodity price volatility.

Geopolitical tensions (notably in Eastern Europe and the Middle East), ongoing realignment of global supply chains (nearshoring and diversification), and tightening financial conditions continue to shape the macroeconomic landscape.

Recent global outlooks by institutions such as the IMF and World Bank indicate a slight moderation in growth expectations for 2026 (in the range of ~2.6%-3.1% depending on scenario assumptions) due to persistent inflationary pressures, trade uncertainties, and monetary policy tightening.

Indian Economy Overview

India continued to demonstrate strong economic momentum in FY 2026, reinforcing its position as one of the fastestgrowing major economies globally. As per data released by the National Statistical Office (NSO) and the Economic Survey 2025-26, real GDP growth for FY 2026 is estimated at approximately 7.4%-7.6%, with nominal GDP expanding by around 8.0%-8.6% during the year.

Quarterly performance remained robust, with GDP growth sustaining momentum across the year, supported by resilient domestic demand and investment activity. The Reserve Bank of India (RBI), in its latest assessments, maintained a positive outlook, with earlier projections in the range of 6.5%-6.8%, while actual outturns have exceeded these estimates, reflecting stronger-than- expected economic performance.

Indias macroeconomic fundamentals remained stable, supported by moderating inflation, which averaged at historically low levels during FY 2026 due to favorable supply conditions and policy interventions. Labour market indicators also showed improvement, with strengthening employment conditions and increasing labour force participation contributing to overall economic resilience.

Growth during the year continued to be driven by strong private consumption, sustained government capital expenditure -particularly in infrastructure sectors such as roads, railways, and logistics-robust investment activity, and ongoing digital transformation. Additionally, India benefitted from steady foreign investment inflows and a wellcapitalized and resilient financial system, reinforcing the countrys medium-term growth outlook despite global uncertainties.

Reserve Bank of India (RBI) Insights

The Reserve Bank of India (RBI) maintained its focus on preserving macroeconomic and financial stability during FY 2026. The policy repo rate was largely maintained at around 6.50% for a significant part of the year, reflecting the central banks calibrated approach to balancing inflation control with growth support.

Monetary policy continued to be guided by a cautious and data-dependent stance, transitioning gradually from the earlier "withdrawal of accommodation" towards a more neutral posture as inflationary pressures eased. Headline CPI inflation moderated during the year and broadly remained within the RBIs tolerance band, averaging around 4.5%-5.0%, supported by favorable base effects and supply-side interventions.

The RBIs policy approach remained anchored on ensuring durable price stability while supporting economic momentum. Liquidity conditions were managed prudently to ensure adequate system liquidity without fuelling inflationary pressures. Overall, the central banks measured and forward-looking policy stance contributed to sustaining macroeconomic stability amid evolving global and domestic uncertainties.

Key highlights from the RBI Financial Stability Report (2026):

- The Indian banking sector continued to strengthen its balance sheet, with the Gross Non-Performing Asset (GNPA) ratio improving further to around ~2.0%-2.3% as of March 2026, remaining at multi-year lows and expected to stay broadly contained over the medium term.

- The Reserve Bank of India (RBI) continued to intensify regulatory oversight of Non-Banking Financial Companies (NBFCs), with a sharper focus on liquidity management, asset quality, governance standards, digital lending ecosystems, and consumer protection frameworks.

- Recent regulatory guidance has emphasized prudent and responsible credit growth, strengthened risk management practices, and accelerated adoption of technology, including enhanced supervisory frameworks for digital lending and fintech-driven business models.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The NBFC sector continued to play a pivotal role in Indias credit ecosystem in FY 2026, supported by strong demand from reta il and MSME segments. Industry estimates indicate that total NBFC credit outstanding has crossed approximately 60-62 trillion by FY 2026, reflecting steady expansion over the previous year. Credit growth moderated to around 12%-14% during FY 2026, compared to higher growth levels in earlier periods, as lenders adopted a more calibrated and risk-conscious approach amid evolving regulatory expectations.

Key sectoral trends during the year include:

• Digitalisation: NBFCs continued to accelerate digital adoption across the customer lifecycle, resulting in enhanced customer experience, faster onboarding, and improved transparency. Customer satisfaction levels remained high, with widespread acceptance of digital platforms.

• Asset Quality: Asset quality metrics remained stable, with GNPA ratios largely contained and significantly improved compare d to historical cycles, supported by strengthened underwriting practices and better risk management frameworks.

• Growth Drivers: Retail segments—particularly vehicle finance, consumer loans and MSME lending—continued to drive asset growth, aided by NBFCs deep penetration in Tier 2 / Tier 3 markets and underbanked regions.

• Liability Profile: The sector maintained a well-diversified liability mix, supported by access to bank borrowings, capital markets, and securitisation, thereby ensuring adequate liquidity and funding resilience.

NBFCs also continued to drive innovation in credit assessment models, fintech partnerships, and data-driven lending, enabling deeper financial inclusion, especially in rural and semi-urban markets. This growth, however, was accompanied by enhanced regulatory oversight, particularly in areas such as digital lending practices, governance standards, and customer protection, reinforcing the sectors long-tenn sustainability and stability.

NBFCs Credit to GDP Ratio

The credit growth of NBFCs which has trended above Indias GDP growth historically, is expected to continue to rise at a fast er pace. NBFCs have shown remarkable resilience and gained importance in the financial sector ecosystem, growing from less than Rs 2 trillion AUM at the turn of the century to Rs. 48 trillion at the end of FY25. During FY19 to FY25, NBFC credit is estimated to have witnessed a growth at CAGR of 13.2%. NBFCs AUM as of FY19 was approximately Rs. 23 trillion which has grown at a 6 year CAGR of 13.2% to Rs. 48 trillion as of FY25. Rapid revival in the economy is expected to drive consumer demand in FY26, leading to healthy growth in NBFCs

NBFC credit to grow at 15-17% between FY25 and FY28

Indian NBFC sector

Non-banking financial companies have become a structurally important part of Indias credit system. Their assets under management are projected to cross ?50 Lakh Crores by FY 2026-27, by when non-bank lenders are expected to hold around 18 to 19% of overall credit.

Key growth drivers

Last-mile distribution

NBFCs reach customer segments and geographies that sit outside the operating focus of larger banks, small-ticket borrowers, self-employed households, and semi-urban and rural markets. That focus has converted into share gains, with NBFCs accounting for 41% of new personal loan disbursements by value in early 2026, against 27% two years earlier.

Digital underwriting on the India stack

Aadhaar authentication, electronic KYC and the Account Aggregator framework have cut onboarding costs and time across the sector. By end-December 2025, the Account Aggregator framework carried 2.61 billion financial accounts enabled for data sharing and 252.9 million users with MUFG ed accounts, letting NBFCs run cash-flow-based credit decisions at scale without manual document collection.

Co-lending and partnerships

Bank-NBFC co-lending matured further through the year, freeing balance sheet capacity at NBFCs while giving banks structured access to NBFC origination and servicing depth in priority-sector and small-ticket lending.

Funding-cost stability

Liquidity support from the Reserve Bank through open market operations and forex swaps, together with the rate cycle, held the wholesale funding backdrop steady for highly-rated NBFCs through the year, a direct benefit to scale lenders carrying strong credit ratings.

FINANCIAL PERFORMANCE OF THE COMPANY

Financials for the last years at a glance

PARTICULARS	Year Ended
	31-03-26	31-03-25
	Audited	Audited
1 Income
Revenue from operations
(i) Interest Income	1,323.69	1,383.68
(ii) Dividend Income	1.35	3.85
(iii) Rental Income	-
(iv) Fees and commission Income	-
(v) Net gain on fair value changes	-
(vi) Net gain on derecognition of financial instruments under amortised cost category	-	-
(vii) Sale of Shares	5,085.73	2,555.27
(viii) Sale of services	-
(ix) Sale of Right Share	0.03
(x) Other revenue from operations	-
1 Other income	-
Total other revenue from operations	-
Total Revenue From Operations	6,410.80	3,942.80
Other income
Total income	6,410.80	3,942.80
2 Expenses
Cost of Shares consumed
Purchases of Shares	3,878.45	1,533.50
Changes in inventories - Shares	1,441.92	492.31
Employee benefit expense	27.81	17.23
Finance costs	-
Depreciation, depletion and amortisation expense	-
Fees and commission expense	-
Net loss on fair value changes	-
Net loss on derecognition of financial instruments under amortised cost category	-	-
Impairment on financial instruments	-
(f) Other expenses
1 Bad Debts	-
2 Other Expenditure	876.28	2,566.82
Total other expenses	876.28	2,566.82
Total expenses	6,224.45	4,609.85
3 Total profit before exceptional items and tax	186.34	667.05
4 Exceptional items
5 Total profit before tax	186.34	667.05
7 Tax expense
8 Current tax	47.97	24.85
9 Deferred tax	-
Tax of earlier years	-
10 Total tax expenses	47.97	24.85
11 Net movement in regulatory deferral account balances related to profit or loss and the related deferred tax movement		-
12 Net Profit Loss for the period from continuing operations	138.38	691.90
13 Profit (loss) from discontinued operations before tax
14 Tax expense of discontinued operations
15 Net profit (loss) from discontinued operation after tax
16 Share of profit (loss) of associates and joint ventures accounted for using equity method
17 Total profit (loss) for period	138.38	691.90
18 Other comprehensive income net of taxes
19 Total Comprehensive Income for the period	138.38	691.90
20 Total profit or loss, attributable to
Profit or loss, attributable to owners of parent
Total profit or loss, attributable to noncontrolling interests
21 Total Comprehensive income for the period attributable to
Comprehensive income for the period attributable to owners of parent
Total comprehensive income for the period attributable to owners of parent non-controlling interests
22 Details of equity share capital
Paid-up equity share capital	16744	12670.00
Face value of equity share capital	1.00	1.00
23 Details of debt securities
24 Reserves excluding revaluation reserve	14348.79	13,818.33
25 Earnings per share
i Earnings per equity share for continuing operations
Basic earnings per share from continuing operations	0.0083	-0.0546
Diluted earnings per share from continuing operations	0.0200	-0.0546
ii Earnings per equity share for discontinued operations
Basic earnings per share from discontinued operations
Diluted earnings per share from discontinued operations
ii Earnings per equity share
Basic earnings per share	0.0083	-0.0546
Diluted earnings per share	0.0200	-0.0546

SUBSIDIARY COMPANY:

As there are no subsidiaries of the Company, Investment made in Subsidiaries is NIL.

SEGMENT-WISE PERFORMANCE:

The Company operates in single reported segment with main business of Finance and Share Trading activity.

RISKS AND CONCERNS:

a) Credit Risk: Credit risk is basically the risk of loss due to the failure of a borrower/counterpart to meet the contractual obligation of repaying his debt. The risk could be on account of some erroneous sourcing done by the Company or because the customer might be facing some issues which do not permit him to make the repayment even if he wanted to.

Measures: Before sanctioning loans, the Company performs a thorough background check of the potential customers, to avoid any chances of fraud and default. The checks include field investigation, credit checks and tele-verification. Implementation of multistep Customer verification, Hygiene Dashboard, Early Warning System, PD-LGD Models, Portfolio management etc. can be measures to mitigate credit risk.

b) Operational Risk: Operational risks are those which arise as a result of incompetent or failed internal processes, people and systems or from external events.

Measures: The constant skill development and training programs form the core of the employees training programmes. In line with the Companys objective to automate the processes thereby minimizing errors and strengthening the duediligence mechanisms, the Company undertakes digitalization initiatives at par with best of industry standards. The Company has CRMC, ORMC, OVRMC, PPAC committees to have checks on policies and to correct loopholes. Document Movement, Storage and Retrieval, Non-Compliance Reporting Policy, Internal audits, Technology Infrastructure etc. are other measures to control operational risk.

c) Compliance Risk: Risk potential on account of changes in laws, regulations or interpretations that cause business losses.

Measures: Compliance Risk mitigation is the process of developing and implementing controls such as standards, policies, procedures and guidelines to prevent or minimize compliance risks. The Companys operations would be affected by any changes in the regulatory environment. The process of mitigation includes Circulation of compliance checklist, Audit committee and Board reviews on status of compliance, proactively monitoring and identifying new and changes in relevant laws, regulations, circulars, notifications, etc. reviewing of compliance policies, resolution of conflicts between policies and statutory enactments and/or regulations from time to time.

d) Reputation Risk: Reputation Risk is the risk to earnings and capital arising from adverse perception of the image of the company, on the part of customers, counterparties, shareholders, investors and regulators.

Measures: Strict adherence to the Fair Practice Code, a well-defined Grievance Redressal Mechanism, good customer connects, and Delinquency Management helps to mitigate the reputational risk.

e) Strategic Risk: Strategic Risk is the risk to earnings and capital arising from lack of responsiveness to changes in the business environment and/or adverse business decisions, besides adoption of wrong strategies and choices.

Measures: Major Factors which cover in monitoring strategic risk are the changes in its competitive environment, Regulatory environment, Technology changes, Product profiling, Business planning and Strategic Planning. The factors mentioned above include how well the company is adapting to new technology, pace of product diversification, pace of adapting to regulatory changes, resilience to competitors changes, smooth budget allocation, governance, and involvement of the Board.

f) Liquidity Risk: Liquidity Risk arises largely due to maturity mismatch associated with assets and liabilities of the Company. Liquidity risk stems from the inability of the Company to fund increase in assets, manage unplanned changes in funding source s and meet financial commitments when required.

Measures: A well-defined contingency funding plan, maintaining a portfolio of high-quality liquid assets, employing rigorous cash flow forecasting, and ensuring diversified funding sources to mitigate liquidity risk

Other Risks Climate change risk, Political risk, Environment, Social and Governance Risk, Vendor Management Risk etc. are few other risks which affect a financial institution.

Measures: Various risk assessments and stress testing forecast the effect that may occur during such adverse conditions, hence proper planning and implementation mitigate such risks to an extent.

INTERNAL CONTROL SYSTEM & ADEQUACY:

The company has adequate internal control system commensurate with its size and business. The company Com- plied with all applicable statutes, policies, procedures, listing requirements and management guidelines. It Adheres to applicable accounting standards and polices.

Indian infotech has robust internal audit Programme, where the internal auditors, an independent firm of chartered accountants, conduct a risk-based audit with a view to not only test adherence to laid down policies and procedures but also to suggest improvements in processes and systems. Their audit program is agreed upon by the Audit Commit- tee. Internal audit observations and recommendations are reported to the Audit Committee, which monitors the implementation of such recommendations.

HUMAN RESOURCE:

The Company has excellent combination of experienced and talented employees. The Company also undertakes on regular basis various training Programmes to keep its employees updated on new technical developments and information which directly results in optimum capacity utilization and cost effectiveness. The Companys relation with its employees continues to be cordial. The Company always reciprocates commitment to its employees in order to motivate them to perform the best.

FULFILLMENT OF RBI NORMS AND STANDARDS:

The Company continues to fulfill all applicable norms and standards laid down by the Reserve Bank of India pertaining to prudential norms, income recognition, accounting standards, asset classification as applicable to NBFCs (ND) except few, explanation pertaining to which has been provided in Boards report.

Road Ahead

The future of Non-Banking Financial Companies (NBFCs) in India is poised for significant growth and transformation. To capitalize on emerging opportunities, NBFCs need to focus on enhancing financial literacy and fostering responsible borrowing and saving behaviours. With technology becoming more integral to daily life, the risk of cyber fraud and unscrupulous activities increases. By empowering individuals with financial knowledge, NBFCs can drive sustainable and responsible economic growth, ensuring that all segments of society benefit from financial advancements.

CAUTIONARY STATEMENT:

Statements in foregoing paragraphs of this report describing the current industry structure, outlook, opportunities, etc., may be construed as "forward looking statements", based on certain assumptions of future events over which the Company exercises no control. Therefore, there can be no guarantee as to their accuracy. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that may be implied by these forward looking statements.