Industrial & Prudential Investment Company Ltd Management Discussions

INTRODUCTION:

e Company being a Non-Banking Finance Company (NBFC) is primarily engaged in investment in equity shares and mutual funds with a focus on long term capital appreciation and value creation for the shareholders. As a result the Companys Rs.nancial performance is closely linked to capital market dynamics and the underlying performance of its investment portfolio. e Companys investment portfolio is well diversiRs.ed across sectors and comprises investments in fundamentally strong businesses. A disciplined and research-driven investment approach is being followed to generate sustainable returns over the long term while maintaining prudent risk management practices. e Companys portfolio, therefore, has consistently delivered returns exceeding the benchmark indices. e Company continues to beneRs.t from its strong operational and Rs.nancial performance of its strategic holding in KSB Limited. KSB Limited delivered robust results during the year, in line with its strategic objectives. e Company expects continued value creation in the future in line with the current CAPEX cycle growth. e Companys broader portfolio has also performed satisfactorily during the year under review. e management remains conRs.dent in the long-term prospects of its investment portfolio, supported by strong fundamentals and growth potential. e portfolio is periodically reviewed and adjusted, based on market conditions and investment opportunities, with inputs from experienced investment advisors.

PERFORMANCE HIGHLIGHTS

During the year under review, the Company reported steady growth approximately 10% in dividend income which increased to Rs. 20.56 crore from Rs. 18.70 crore in FY 2024 - 25 while ProRs.t aRs.er Tax increased by 5% to Rs 20.43 Crores as against Rs 19.49 Crores. e M2M portfolio return (including unrealised gains) was 3.7% as the over Benchmark NiRs.y return of (3.7)% during the same period.

ECONOMIC OUTLOOK:

Global Economic Outlook 2026:

e year under review began with the US declaring tariRs.s on almost each of their trading partners on April 2, 2025 causing signiRs.cant uncertainty across the world. Many countries negotiated and reached trade agreements for revised tariRs.s with the US. However, this had a very severe impact on the world equity markets which had corrected sharply in Q2 of 2025 followed by the unprecedented news based volatility. As per the International Monetary Fund (IMF) report, the Global growth is expected to moderate at 3.1% in 2026 than 3.4% in 2025 due to higher energy prices and inRs.ation in Q1 & Q2 due to war. In case the current geopolitical turbulence remains ongoing leading to higher energy prices and inRs.ation, it may further impact growth.

INDIAN ECONOMY:

Indias economic growth remained strong at 7.4% in Rs.nancial year 2025-26, despite geopolitical tensions, trade disruptions and uneven global recovery making it a one of the fastest growing major economies. Indias imports and exports recorded steady growth of 4.22% and 6.47%, respectively, reaching $970 billion and $860.09 billion as per Economic Survey 2025-26

Although the RBI MPC survey predicts Indian GDP growth for Rs.nancial year 2026-27 at 6.9% with inRs.ation at 4.6% However, if the geopolitical tensions continue to persist the impact will be higher energy prices, higher inRs.ation and supply chain disruptions, which could impact the growth. e inward remittances to India, which was at record $125 bn inRs.ow in 2025, can also face pressure if the disruptions continue in the Gulf region.

INDUSTRY OVERVIEW

Non-Banking Financial Companies (NBFC) Industry

e company is not engaged in any Rs.nancial activities such as providing loan or credits etc to public and the company also do not borrow any money for its business activities. e business of the Company is to invest in Equities for long term value creation. Accordingly, the Company is not directly exposed to the NBFC environment except the market volatility in the stocks it holds.

COMPANYS STRATEGY AND OUTLOOK

e Company follows a sustainable growth-oriented investment philosophy focused on:

• Long-term equity investments in businesses with strong fundamentals

• DiversiRs.cation across sectors to manage concentration risk

• Allocation to InvITs, REITs, mutual funds, and Rs.xed-income instruments

• Periodic portfolio rebalancing based on macroeconomic trends

RISKS AND MITIGATION

e Company is subject to market risk arising from the geopolitical risks and global trade-related uncertainties which may cause inRs.ation, supply chain disruptions, commodity price volatility and export contraction in some industries. e Companys diversiRs.ed investment approach, disciplined portfolio management, and a focus on fundamentally strong investments with a long term horizon make it less vulnerable. e Company continues to believe that the companies in which it is invested are strong and likely to do well in the medium and long term.

Disclaimer

e information and opinions expressed in this section of the Annual Report reRs.ect the views of Companies management at the time of its publication. ese are intended solely for communication with stakeholders and do not constitute investment advice or solicitation. e Company and its management shall not be held liable for any losses arising from reliance on this report.

	On behalf of the Board of Directors
	Gaurav Swarup
	Chairman & Managing Director
	DIN: 00374298
Date: 22.05.2026
Place: Kolkata
Registered ORs.ce: Paharpur House,
8/1/B Diamond Harbour Road
Kolkata 700027