ISL Consulting Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

Indias economic growth is projected to moderate in FY 2024 - 25, with the Reserve Bank of India (RBI), revising its real GDP growth forecast to 6.5%, down from an earlier estimate of 6.7%. This adjustment reflects headwinds from weakening urban consumption, sluggish private investment, and external uncertainties arising from global trade tensions. In response, the RBI reduced the policy repo rate by 25 basis points to 6% and shifted its stance to "accommodative" to support growth. Additionally, CPI inflation is projected at 4%, slightly lower than earlier estimates As per RBI reports, Non-Banking Financial Companies (NBFCs) have continued to play a pivotal role in extending credit and financial services to under-served and unbanked segments of the Indian economy. As of September 2024, the sector maintained a healthy Capital to Risk-Weighted Assets Ratio (CRAR) of 26.1%, well above the regulatory minimum of 15%. The Gross Non-Performing Assets (GNPA) ratio improved further to 3.4%, reflecting a continued strengthening in asset quality. Profitability indicators remained stable, with Net Interest Margin (NIM) and Return on Assets (RoA) at 5.1% and 2.9% respectively. While credit growth moderated to 6.5% during the first half of FY 2024 - 25, following regulatory tightening on certain loan categories, the sector remains resilient, supported by strong capital buffers and prudent risk management practices. Investment and Credit Companies (NBFC-ICCs) continued to demonstrate their critical role in capital formation and credit intermediation during FY 2024-25. They have expanded their operations across capital market investments, funding to MSMEs, and retail financing, helping bridge credit gaps in key economic segments. Building on this momentum, NBFC-ICCs are using their funds to support important sectors, helping the economy grow and making finance more accessible.

OPPORTUNITIES & THREATS

The capital markets continue to serve as a cornerstone for economic advancement, offering a robust platform for mobilizing resources and driving sustainable growth. For a developing economy like India, which requires substantial capital infusion for infrastructure and social development, the role of capital markets is vital and ever-expanding.

Our Company operates in a sector that is both dynamic and opportunity-rich. The capital market offers avenues for raising funds that support expansion, innovation, and long-term value creation. With a strategic approach and diversified investment portfolio, ISL Consulting Limited is well-positioned to harness these opportunities for continued growth. Past investments have laid a solid foundation, and the Company remains committed to identifying and leveraging new avenues that offer attractive returns.

However, the capital market environment is inherently volatile and influenced by various external and macroeconomic factors. While this unpredictability poses certain risks, our management remains vigilant and adaptive, constantly monitoring market trends and regulatory developments. This proactive approach allows us to respond swiftly to changes and realign our strategies accordingly.

In addition, the Companys long-term investment perspective serves as a stabilizing force, enabling us to navigate shortterm market fluctuations with resilience. While external challenges such as geopolitical tensions, economic slowdowns, or policy shifts may impact performance, our diversified approach helps mitigate such risks.

Our strategic focus on sustainability, financial prudence, and investor value continues to drive our performance. The evolving trend toward increased financial participation, advisory services, and capital mobilization further enhances the operational landscape. Backed by a skilled management team and a forward-looking strategy, ISL Consulting Limited is confident in its ability to capitalize on emerging opportunities while effectively managing associated threats.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company operates in single segment, i.e. Securities Trading. The revenue from operations from the aforesaid segment during the year was Rs. 2,447.24 Lakhs.

OUTLOOK

The companys growth prospects are optimistic. The company anticipates expansion and increased profitability in the foreseeable future. It is well-prepared to manage unexpected challenges or exigencies that may arise in the business environment. The company is consistently adding new sources of revenue. This strategy can help reduce reliance on a single revenue stream and enhance overall financial stability. The company is actively managing costs, which can contribute to improved profitability and efficient resource utilization. It has adequate internal financial reporting and control. The company plans to invest in other businesses that exhibit consistent growth prospects and high-quality earnings.

RISK MANAGEMENT & INTERNAL CONTROL SYSTEMS

ISL Consulting Limited recognises that effective risk management is crucial to sustaining business growth and ensuring resilience in a dynamic operating environment. The Company continuously evaluates and enhances its risk management framework to remain aligned with evolving market conditions and regulatory developments. A structured mechanism is in place to proactively identify, assess, and mitigate potential risks that may impact the business operations, financial performance, or regulatory compliance.

To further strengthen this framework, the Company is focused on enhancing its monitoring systems and ensuring that risk controls are not only comprehensive but also efficient and adaptive.

Alongside risk management, the Company has established a sound internal control system designed to safeguard assets, ensure accuracy in financial reporting, and support adherence to statutory and regulatory requirements. The internal controls are periodically reviewed by the management, in consultation with the Statutory Auditors and Internal Auditors, to verify their effectiveness. Critical operational areas are regularly monitored through pre-defined audit procedures, and any observations from audit findings are addressed promptly through corrective action, reflecting the Companys commitment to transparency, accountability, and continuous improvement.

FINANCIAL PERFORMANCE AND OPERATIONAL REVIEW

Directors of your Company are confident in enhancing company performance and delivering better results next financial year, adding value to shareholders. They aim to improve turnover, bottom line, and overall revenue ahead. Financial Highlights with respect to Operational Performance is as under:

(Rupees in Lakhs)

During the financial year 2024-25, the Company recorded Revenue from Operations of ^2,447.24 lakhs as compared to ^2,420.56 lakhs in the previous financial year 2023-24, reflecting a marginal growth. The other Income for the year stood at ^9.53 lakhs, as against ^19.83 lakhs in the previous year. The Total expenses incurred during the financial year increased to ^2,629.70 lakhs from ^2,053.81 lakhs in the previous year, mainly due to an increase in operational and other associated costs.

As a result, the Company reported a Loss after Tax of ^173.11 lakhs for the financial year 2024-25, as against a Profit after Tax of ^309.78 lakhs in the preceding year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

Your Company firmly believes that employees are the most valuable assets and key players of business success and sustained growth. The Company provides to the employees a fair and equitable work environment and support from their peers with a view to develop their capabilities leaving them with the freedom to act and to take responsibilities for the task assigned. Human resources are considered as the most significant and valuable asset for your Company and continuous commitment towards upgrading skills is a vital part of the human resource development programme of your Company.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

The Company has incurred loss during the year and due to adjustment of past years losses, your Company fall short to earn significant sum as return on Net Worth.