Indo Thai Securities Ltd Management Discussions

Global Economy

The global economic outlook for 2026 remains broadly stable, with growth expected to be supported by resilient consumer demand, easing inflationary pressures and continued technological advancements. However, ongoing geopolitical tensions, including the Russia-Ukraine conflict, developments in West Asia and evolving U.S.-China relations, continue to pose risks to global growth through their potential impact on inflation, trade flows and financial market stability.

Against this backdrop, central banks are expected to maintain a cautious approach towards monetary policy, balancing growth considerations with inflation management. Fiscal prudence is also likely to remain a priority for several economies as governments seek to manage debt levels amid an uncertain macroeconomic environment.

For the financial services and capital markets sector, continued economic growth, increasing retail participation, digital transformation and rising adoption of technology-driven investment platforms are expected to support market activity. Further, advancements in Artificial Intelligence (AI), data analytics and automation are likely to enhance operational efficiencies, customer engagement and investment decision-making across the financial ecosystem.

Developing economies, including India, are expected to benefit from favourable demographics, increasing financial inclusion and rising household participation in capital markets. Meanwhile, growing investor awareness, regulatory reforms and continued digitisation of financial services are expected to create long-term growth opportunities for the stock broking industry.

Indian Economic Environment

India continued to demonstrate strong macroeconomic resilience in FY26, with real GDP growth estimated at approximately 7.6%, maintaining its position among the fastest-growing major economies globally. Growth was primarily driven by robust domestic demand, supported by improving consumption, continued formalisation of the economy and stable macroeconomic conditions.

Private consumption remained a key driver, with Private Final Consumption Expenditure (PFCE) growing by 7.7% Y-o-Y (at constant prices), reflecting improving purchasing power and a supportive policy environment. These trends, along with rising financial awareness, are increasingly translating into higher household participation in formal financial markets.

Indias financial ecosystem continued to strengthen, underpinned by improving macro fundamentals, disciplined fiscal management and a stable banking sector. Fiscal deficit moderated to approximately 4.4% of GDP, while strong foreign exchange reserves provided resilience against external financial volatility.

This improving macroeconomic and financial stability is increasingly being reinforced by rapid digitisation of the economy. Enhanced digital infrastructure is expanding financial access, deepening market participation and supporting inclusive growth across geographies. Smartphone penetration of 76% in rural areas and 86% in urban areas amongst 15 years and above population coupled with significant reduction in mobile data costs of nearly 97% since 2014, led to over 4x jump in internet connections of over 1 billion by December 2025. This is materially expanding access to digital financial services.

Industry Structure and Developments

The Indian capital market continued to demonstrate resilience during FY 2025-26 despite global geopolitical tensions, ongoing conflicts in various regions, fluctuating commodity prices, inflationary pressures, and changing monetary policies across major economies. While periods of volatility impacted investor sentiment, Indias strong economic fundamentals, growing retail participation, and increasing financialization of household savings continued to support long-term growth in the securities market.

The Indian securities industry witnessed continued expansion in investor participation, growth in demat accounts, increased adoption of digital investment platforms, and rising interest in diversified investment products. The shift of household savings from traditional assets towards financial instruments such as equities, mutual funds, alternative investment funds, and portfolio-based investment solutions continued to strengthen the long-term outlook of the financial services sector.

Economic Overview

India remained one of the fastest-growing major economies during FY 2025-26. Strong domestic consumption, infrastructure spending, increasing digital adoption, and favorable demographic trends continued to support economic growth despite global uncertainties.

The increasing participation of retail investors, growing awareness regarding wealth creation, and deeper penetration of financial products across Tier-II and Tier-III cities have created significant opportunities for financial intermediaries and investment service providers.

Regulatory Developments

The regulatory environment continued to evolve with a focus on investor protection, market integrity, risk management, and transparency.

Key developments impacting the securities industry included:

• Changes in Securities Transaction Tax (STT) structure impacting trading volumes across certain segments.

• Revised Bank Guarantee and collateral requirements for market intermediaries.

• Enhanced compliance and risk management requirements prescribed by market regulators.

• Continued regulatory focus on algorithmic trading, investor protection, and technology-driven market supervision.

• Increased governance and disclosure requirements for market participants.

While these developments may result in increased compliance costs and operational adjustments, they are expected to strengthen the long-term stability and credibility of Indias capital market ecosystem.

Business Overview

Indo Thai Securities Limited is a diversified financial services company engaged in stock broking, depository participant services, distribution of financial products, investment advisory, and allied financial services.

The Company continues to focus on expanding its presence across emerging financial services segments while maintaining strong governance standards, prudent risk management practices, and a client-centric approach.

Financial Performance Review

FY 2025-26 has been a landmark year for the Company. Despite market volatility and regulatory challenges, the Company recorded its highest-ever profitability since inception on both a standalone and consolidated basis.

The strong performance was driven by:

• Growth in core broking operations.

• Increased client participation across market segments.

• Expansion in Assets Under Management (AUM) and Asset under Custody.

• Research Analysts Services.

• Improved operational efficiencies.

• Strengthening of distribution and advisory businesses.

• Continued focus on cost optimization and risk management.

The Companys strong financial position and healthy capital base provide a solid foundation for future expansion initiatives.

Assets Under Management (AUM)

The Company witnessed healthy growth in Assets Under Management during the year, reflecting increasing investor confidence and the growing acceptance of professionally managed investment solutions.

The expansion of AUM has been supported by:

• Enhanced client acquisition and retention.

• Increasing participation from high-net-worth individuals (HNIs).

• Growth in wealth management and advisory activities.

• Rising demand for diversified investment solutions.

The Company believes that AUM growth will continue to be a key driver of recurring revenues and longterm value creation.

SEGMENTWISE PERFORMANCE

^ Equity Segment:

The Companys turnover in the equity segment was Rs 406.43 Crores in BSE and Rs. 4925.55 Crores in NSE consisting essentially of secondary market equity, currency, derivatives and broking.

The annual turnover recorded by the Company in this segment for the financial year 2025-26 amounts to Rs. 8013.39 Crores.

Y Currency Derivatives Segment:

The total turnover for the Company for the currency derivatives segment has been Rs. 31.09 Crores.

Y Mutual Fund Segment:

The Company has recorded the Asset under Management as on 31^st March 2026 of Rs. 271 crores for the Assets Mutual Fund Distribution Business.

Y Income from Depository Operations:

Your Company is a Depository Participant with Central Depository Services (India) Limited ("CDSL"), providing services of dematerialization, rematerialisation and settlement of trades through market transfers and off market transfers. Our income from depository operations for the financial year ended 31^st March, 2026 are Rs. 33.47 lakhs.

Y Commodity Segment:

The annual turnover recorded by the company in Commodity segment for the financial year 2025-26 amounts to Rs. 16821.22 Crores.

Opportunities and Threats

Opportunities

The Indian financial services sector continues to offer significant growth opportunities driven by increasing financialization of savings, rising retail investor participation, digital transformation, and growing demand for diversified investment products.

The key opportunities available to the Company include:

• Expansion of wealth management services catering to High Net Worth Individuals (HNIs), Ultra-HNIs, and emerging affluent investors.

• Growth in Assets Under Management (AUM) through increased investor awareness and preference for professionally managed investment solutions.

• Expansion into Alternative Investment Funds (AIFs), portfolio management services, and other specialized investment products.

• Increasing adoption of technology-driven investment platforms and digital financial services.

• Opportunities arising from international financial services and cross-border investment activities through GIFT City operations.

• Growing demand for investment research, advisory services, and customized financial solutions.

• Empanelment of Institutional Clients.

• Enhanced participation of retail investors from Tier-II and Tier-III cities supported by digital onboarding and financial inclusion initiatives.

Threats

The Company operates in a highly competitive and regulated environment and faces certain external threats that may impact its business performance.

Key threats include:

• Adverse movements in domestic and global capital markets resulting in reduced investor participation and lower trading volumes.

• Frequent regulatory and taxation changes affecting market sentiment and operational processes.

• Increasing competition from fintech companies, discount brokers, and technology-enabled financial service providers.

• Cybersecurity risks, data protection challenges, and technology disruptions.

• Global geopolitical tensions, economic slowdowns, inflationary pressures, and fluctuations in interest rates.

• Market concentration risks arising from changes in investor preferences and product demand patterns.

• Increasing compliance requirements leading to higher operational and regulatory costs.

Outlook

Indias long-term capital market growth story remains strong, supported by increasing financialization, rising investor participation, digital adoption, and favorable economic fundamentals.

The Company remains focused on expanding its presence across high-growth segments including wealth management, Institutional Desk, Alternative Investment Funds (AIFs), research services, algorithmic trading, and international financial services through GIFT City.

With a strong balance sheet, record profitability, growing AUM, experienced management team, and commitment to innovation and governance, Indo Thai Securities Limited is well-positioned to capitalize on emerging opportunities and create sustainable long-term value for its stakeholders.

Risks and Concerns

The Companys business remains exposed to various risks inherent to the financial services industry. These include market risks arising from fluctuations in capital markets, liquidity risks, operational risks, regulatory and compliance risks, information technology and cybersecurity risks, and risks associated with changing investor behaviour and competitive dynamics.

The key risks and concerns include:

• Market volatility and fluctuations in trading volumes.

• Changes in regulatory policies, taxation frameworks, and compliance requirements.

• Increased competition from established market participants and technology-driven financial service providers.

• Cybersecurity threats, data breaches, and information technology disruptions.

• Operational and process-related risks.

• Reputational risks and client retention challenges.

• Global economic uncertainties, geopolitical developments, and adverse macroeconomic conditions.

The Company has implemented a comprehensive risk management framework designed to identify, assess, monitor, and mitigate risks. The Board of Directors, Audit Committee, Risk Management function, and senior management periodically review the risk profile of the Company and take appropriate measures to strengthen internal controls and risk mitigation mechanisms.

Internal Control Systems and Their Adequacy

The Company has established adequate internal control systems commensurate with the size, scale, and complexity of its operations. These controls are designed to safeguard assets, ensure accuracy and completeness of accounting records, promote operational efficiency, and ensure compliance with applicable laws and regulations.

The internal control framework is periodically reviewed by the management, internal auditors, Audit Committee, and the Board of Directors to ensure its effectiveness and adequacy.

REVIEW OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

1. Sources of funds/ Application of funds

(a) Share Capital:

At present, the Company has only one class of shares i.e. equity shares of face value of Rs.1/- each. The Companys authorized share capital is Rs. 15,00,00,000, divided into 15,00,00,000 equity shares of Rs. 1/- each. The issued, subscribed and paid up capital is Rs. 12,86,18,190 as on 31^st March, 2026.

(b) Reserves & Surplus:

(i) Security Premium Reserve& Retained Earnings:

The balance in Securities Premium Account & Retained Earnings including premium received on issue of equity shares and warrants convertible into equity shares on preferential basis as on 31^st March, 2026 amounted to Rs. 26,983.08 Lakhs, the balance reported in previous year was Rs 16,672.08 Lakhs.

2. Shareholders Funds (NET WORTH)

The total Shareholders Funds is Rs. 28,269.26 Lakhs as on 31^st March, 2026. The balance reported in previous year was Rs. 17,841.28 Lakhs

3. Prices on exchanges during the year:

The Companys shares high and low prices in BSE & NSE are as under:

Exchange	High		Low
	Price per Share (Rs.)	Date	Price per Share (Rs.)	Date
BSE	2199	17.07.2025	144	03.09.2025
NSE	2212	17.07.2025	143.65	03.09.2025

4. Deferred Tax Assets / Liabilities

We recorded Rs. 624.12 Lakh deferred tax assets as on 31^st March, 2026 as compared to Rs. 2.81 Lakhs deferred tax liabilities during the previous year.

5. Trade Receivables

There is an increase in trade receivables of the Company as compared to previous year. The figure of trade receivables was reported at Rs. 691.92 Lakhs as on 31^st March, 2026 which was Rs. 1841.09 Lakhs as on 31^st March, 2025.

6. Cash & Cash Equivalents

The Cash & Cash Equivalents of the Company has decreased as compared to previous financial year and reached at Rs. 186.97 Lakhs on 31^st March, 2026 which was Rs. 53.19 Lakhs in previous year.

7. Revenue

Total revenue from operations has been reported Rs. 10,374.35 Lakhs as on 31^st March, 2026 as compared to Rs. 2,671.86 Lakhs on 31^st March, 2025.

8. Earnings Per Share

The earnings per share for the financial year 2025-26 is Rs. 5.44/- (Basic) and 5.33/-(Diluted) in comparison to figure reported for financial year 2024-25 i.e. Rs 0.89/- (Basic) and 0.87/- (Diluted).

9. Key Financial Ratios

Ratio	March 31, 2026	March 31, 2025	Change in %	Explanation
Current Ratio (In times)	2.96	2.16	37.04	The increase in the Current Ratio is mainly on account of an increase in current assets as at the reporting date vis-a-vis current liabilities. Current assets stood at ?22,861.59 lakhs, whereas current liabilities were ?7,732.37 lakhs, indicating improved liquidity and working capital management during the year.
Debt Service Coverage Ratio (%)	(9.95)	(0.47)	(2017.02)	The Debt Service Coverage Ratio for the year is negative, primarily due to negative total debt service of T773.86 lakhs during the year. Although the Company generated net operating income of T7,698.69 lakhs, the debt servicing obligations, including interest and principal repayments, resulted in a negative coverage position, thereby reflecting inadequate cash flows for servicing debt during the year.
Return on Equity (%)	29.00	7.29	297.81	The Return on Equity improved during the year primarily due to higher net income of ?6,685.99 lakhs generated during the year, with an average equity base of ?23,055.28 lakhs. The increase reflects improved profitability and efficient utilization of shareholders funds.
Inventory Turnover Ratio (In times)	147.31	28.42	418.33	The Inventory Turnover Ratio improved during the year primarily due to cost of inventory amounting to ?2,959.17 lakhs in relation to an average inventory of ?1,194.31 lakhs. The increase reflects faster movement of inventory and improved inventory management during the year.
Debtors Turnover Ratio (In times)	44.68	178.79	(75.01)	The Debtors Turnover Ratio decreased during the year despite turnover of ?10,347.35 lakhs in relation to average trade receivables of ?1,266.50 lakhs. The decline is primarily due to a relatively higher increase in average trade receivables as compared to the growth in turnover, indicating a slower rate of collection of receivables during the year.
Trade Payables Turnover Ratio (In times)	75.21	79.95	(5.93)	The Trade Payables Turnover Ratio decreased during the year primarily due to expenses amounting to ?907.55 lakhs in relation to a higher average trade payables balance of ?4,404.57 lakhs. The increase in average trade payables compared to the level of expenses resulted in a marginal decline in the turnover ratio, indicating relatively slower settlement of trade payables during the year.
Net Capital Turnover Ratio (In times)	353.73	316.62	11.72	The Net Capital Turnover Ratio improved during the year primarily due to turnover of ?10,347.35 lakhs in relation to an average working capital of ?10,028.00 lakhs. The marginal increase in turnover relative to the working capital base resulted in an improvement in the efficiency of utilization of net working capital during the year.
Return on Capital Employed (%)	31.87	1.92	1,559.90	The Return on Capital Employed improved during the year primarily due to EBIT of ?7,787.50 lakhs generated in relation to an average capital employed of ?24,436.71 lakhs. The increase reflects improved operating profitability and efficient utilization of capital employed during the year.
Return on Investment (%)	88.97	51.51	72.72	The Return on Investment improved during the year primarily due to investment income of ?9,243.58 lakhs in relation to an average investment base of ?11,476.25 lakhs. The increase reflects higher returns generated from investments during the year.
Net Profit Margin (%)	63.73	29.95	112.79	The Net Profit Ratio improved during the year primarily due to net profit of ?6,685.99 lakhs generated in relation to revenue from operations of ?10,347.35 lakhs. The increase reflects improved profitability and better margin realization during the year.
Operating Profit Ratio	84.06	46.96	79	The Operating Profit Ratio improved during the year primarily due to operating income of ?8,697.67 lakhs generated in relation to revenue from operations of ?10,347.35 lakhs. The increase reflects improved operating efficiency and better control over operating costs during the year.
Interest Coverage Ratio	38.54	16.08	157.24	The Interest Coverage Ratio improved during the year primarily due to operating income of ?8,697.67 lakhs in relation to finance costs of ?225.66 lakhs incurred during the year. The increase reflects strong earnings capacity to meet interest obligations.
Return on Net worth	29.00	7.29	297.81	The Return on Equity improved during the year primarily due to higher net income of ?6,685.99 lakhs generated during the year, with an average equity base of ?23,055.28 lakhs. The increase reflects improved profitability and efficient utilization of shareholders funds.

DEVELOPMENTS IN HUMAN RESOURCES

At Indo Thai, our relentless focus is on attracting, retaining and nurturing the best of talents to lead the organization towards achieving its strategic goals. We ensure a work culture free of discrimination and bias and provide equal opportunity to all.

In the past, training was the only planned way of developing human resources. But now Human Resource Development (HRD) has emerged as an interdisciplinary and integrated approach to the development of human resources.

In the organizational context, human resource development may be described as a continuous and planned process by which employees of an organization are helped to:

(a) Acquire or sharpen capabilities required to perform various functions associated with their present or expected future roles.

(b) Develop their general capabilities as individuals and discover and exploit their own inner potential for their own and/or organizational development purpose.

(c) Develop an organizational culture in which superior-subordinate relationships, teamwork and collaboration among sub-units are strong and contribute to the professional well-being, motivation and pride of employees.

HRD for Indo Thai in brief is transformation of potential human resources into kinetic human resources for optimization of the potential capacity of employees. Human rather than capital is the key to development. HRD is needed by any organization that wants to grow continuously.

The scope of HRD is not limited to the development of the organizational role of the employees but extends to the individuals inner feelings, genius and latent potentialities of those working in the organization. Individuals in an organization have unlimited potential for growth and development and this can be multiplied and channelized through systematic efforts. The company views human resources as the total knowledge, skills, creative, abilities, talents and aptitudes of an organizations workforce as well as the values, attitudes and beliefs of the individual involved.

The highest standards of safety and precautionary measures were established, Work from Home concept was initiated wherever possible. In order to uphold the values of ethical conduct and compliance, the Company ensured all employees followed a detailed and structured training and awareness to familiarize themselves with the standards and expectations on ethics. During these difficult times, the Company reached out to the disadvantaged and weaker sections of society and provided assistance through our CSR program. The Indo Thai family consists of 105 employees including 9 Key Managerial Personnel.

CAUTIONARY STATEMENT

This report contains several forward-looking statements that involve risks and uncertainties, including, but not limited to, risks inherent in Indo Thais growth strategy, acquisition plans, dependence on certain businesses, dependence on availability of qualified and trained manpower, economic conditions, government policies and other factors. The companys actual results, performances or achievements could thus differ materially from those expressed or implied in such forward-looking statements. This report should be read in conjunction with the financial statements included herein and the notes annexed thereto.