The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by the Securities and Exchange Board of India (SEBI), prudential norms issued by Reserve Bank of India, Ind AS i.e. Indian Accounting Standards prescribed by the Institute of Chartered Accountants of India and the Generally Accepted Accounting Principles in India. Our Management accepts responsibility for the integrity and objectivity of these financial statements. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner and reasonably present our state of affairs, profit / loss and cash flows for the year.
Global Economic Performance
As per IMF, Global economy is expected to grow at 3.3% both in CY 2025 and CY 2026. As per the International Monetary Fund (IMF) (World Economic Outlook – April 2025), global GDP growth is projected at 2.8% in CY 2025 and 3.0% in CY 2026 as compared to 3.3% projected in January 2025 for both CY 2025 and CY 2026. Global growth numbers have been revised on account of swift escalation of trade tensions and high levels of policy uncertainty Intensifying downside risks. Global inflation is projected at 4.3% in CY 2025 and 3.6% in CY 2026. Furthermore, the risks to inflation remain significant going forward, with the likely tariffs being imposed by the United States (US) on imports. US GDP grew at an annualized and seasonally adjusted 2.8% in the third quarter of 2024 from 3.0% in the second quarter on account of further decrease in residential fixed investment and downturn in private-inventory investment. The US GDP grew at an annualized rate of 2.4% in the fourth quarter of 2024 driven by increase in consumer and government spending, partially offset by a decrease in investment. The Euro areas GDP rose 0.1% in the fourth quarter of 2024 vs growth of 0.4% in the previous quarter.
The Indian Economy
India is expected to remain one of the fastest growing economies in the world despite challenges posed by geopolitical instability. In May 2025, the National Statistical Office (NSO), in its first revised estimates of national income, estimated the countrys real gross domestic product (GDP) to have expanded 6.5% year-on-year in Fiscal 2025. The Indian economy was among the fastest-growing even before the Covid-19 pandemic. In the years leading to the global health crisis, which disrupted economic activities, the countrys economic indicators improved gradually owing to strong local consumption and lower reliance on global demand. The Trump Administration in the US announced a host of tariffs on products such as automobile, automobile parts, steel and aluminium in the first three months of CY 2025. On April 5, 2025, the US announced an additional tariff of 10% on nearly all countries in addition to the existing tariffs. China and the European Union announced retaliatory tariffs on the US. On April 9, 2025, the US government paused differential tariffs for most countries for 90 days, excluding China, which faced a higher tariff of 125 percent. The introduction of tariffs on major global economies is expected to increase downside risks on global growth. India is expected to remain one of the fastest growing economies in the world. Going forward, the expectation of slower global growth, along with anticipated reciprocal tariffs on India after three months, is likely to exert downside risks to CRISILs 6.5% growth forecast for Fiscal 2026. Uncertainty about the duration and frequent changes in tariffs could also hinder domestic investments. Interest rate cuts, income tax relief and easing inflation are expected to provide tailwinds to domestic consumption in Fiscal 2026, while the expected normal monsoon will support agricultural incomes. Moreover, the anticipated decline in global crude oil prices, resulting from a potential global slowdown, is expected to provide additional support to domestic growth.
Over the past three fiscals (Fiscals 2022 to 2024), the Indian economy has outperformed its global counterparts by witnessing a faster growth. In the IMFs April 2025 update, it raised the GDP growth forecast for India highlighting Indias improved prospect for private consumption particularly in rural areas. Going forward as well, IMF projects that Indian economy will remain strong and would continue to be one of the fastest growing economies.
NBFC Sector
Over the past decade, banking credit growth lagged systemic credit growth for several years as NBFCs grew at a much faster pace. However, the NBFCs suffered a blow after IL&FS defaulted in September 2018. NBFCs not having the advantage of size, rating and/or parentage had to grapple with a liquidity crisis and as raising funding became difficult. Initially, post the IL&FS crisis, banks were expected to fill the space left out by NBFCs.
In the fourth quarter of Fiscal 2020 and the first quarter of Fiscal 2021, with the outbreak COVID-19 pandemic, challenges had intensified for both banks and NBFCs. NBFCs were hit harder in terms of demand, and they also turned cautious as they lend to borrowers with relatively weaker credit profile. In the second half of Fiscal 2021, the Indian economy showed signs of improvement, the effect of which was seen in the credit growth.
In Fiscal 2022, the second wave of the COVID-19 pandemic led to weak demand for credit in the first quarter of the year. However, the pace of credit recovered, with overall credit growing by 9% and retail credit increasing by 11.3% year-on-year as of March 2022. With the effect of COVID-19 waning, vaccination coverage progressively improving, the situation and growth improved further.
The credit growth of NBFCs which has trended above Indias GDP growth historically, is expected to continue to rise at a faster pace. NBFCs have shown remarkable resilience and gained importance in the financial sector ecosystem, reaching Rs. 412,000,000 lakhs at the end of Fiscal 2024. During fiscals 2019 to 2024, NBFC credit is estimated to have witnessed a growth at CAGR ~11%. Rapid revival in the economy is expected to drive consumer demand in Fiscal 2025, leading to healthy growth in NBFCs.
Going forward, CRISIL MI&A expects NBFC credit to grow at 15-17% between Fiscal 2024 and Fiscal 2027 driven by growth in retail segment, and MSME loans in the wholesale segment continuing to be the primary drivers.
BUSINESS REVIEW
Your Company is a NBFC registered with the RBI to carry out NBFC activities under Section 45(IA) of the Reserve Bank of India Act, 1934 and it is engaged primarily in the business of investing/trading in securities and advancing need-based loans. The Company is also involved in providing fund based financial services and funding solutions to the Indian Corporate, institutions, MSMEs etc.
FINANCIAL REVIEW
On standalone basis, your Company earned the gross income of Rs.522.41 lakhs as against Rs. 469.32 lakhs in the previous year. The total expenditure during the year under review was Rs. 402.62 lakhs as against Rs. 332.04 lakhs in the previous year. The Net Profit after tax before OCI was Rs. 81.23 lakhs as against Net Profit after tax before OCI of Rs. 90.35 lakhs in the previous year.
On consolidated basis, your Company earned the gross income of Rs 536.78 lakhs as against Rs 477.31 lakhs in the previous year. The total expenditure during the year under review was Rs 405.47 lakhs as against Rs 334.68 lakhs in the previous year. The Net Profit after tax before OCI was Rs 84.85 lakhs as against Net profit after tax before OCI of Rs 86.18 lakhs in the previous year.
KEY FINANCIAL RATIOS
Sr. No. |
Ratio |
31.03.2025 |
31.03.2024 |
31.03.2023 |
Key Ratio Analysis |
1 |
Debtors Turnover Ratio |
- |
- |
- |
|
2 |
Inventory Turnover Ratio |
- |
- |
- |
|
Interest Coverage Ratio |
2.42 |
3.01 |
0.11 |
On a standalone basis, the Interest Coverage Ratio is 2.42 in FY 2025, indicating |
|
3 |
a stable ability to meet interest obligations, slightly lower than 3.01 in FY 2024 |
||||
4 |
Current Ratio |
14.96 |
29.23 |
17.86 |
On a standalone basis, the Current Ratio is 14.96 in FY 2025, reflecting a comfortable liquidity position, compared with 29.23 in FY 2024. |
5 |
Debit Equity Ratio |
0.03 |
0.06 |
0.11 |
On a standalone basis, the Debt- Equity Ratio of 0.03 in FY 2025 indicates a strong equity base, with continued reduction in borrowings |
6 |
Operating profit Margin |
0.41 |
0.44 |
0.03 |
On a standalone basis, the Operating Profit Margin is 0.41 in FY 2025, remaining healthy and broadly in line with previous years |
7 |
Net Profit Margin |
0.17 |
0.20 |
(0.29) |
On a standalone basis, the Net Profit Margin stands at 0.17 in FY 2025, maintaining profitability while slightly lower than FY 2024. |
Risks and Challenges
The Indian NBFC sector, while growing steadily, faces a range of emerging and structural challenges. Regulatory tightening by the RBI, including increased risk weights on unsecured loans and stricter supervision under the Scale-Based Regulation (SBR) framework, has impacted capital requirements and raised borrowing costs. These measures have particularly affected NBFCs engaged in retail and microfinance lending, forcing many to recalibrate their business models. Asset quality remains a key concern, especially in the microfinance segment, where rising delinquencies and elevated credit costs have eroded profitability. Unsecured personal loan portfolios, which expanded rapidly in recent years, are also showing early signs of stress, necessitating tighter underwriting standards. Funding continues to be a challenge, with some NBFCs facing reduced access to bank funding and increased dependence on market instruments like NCDs and commercial paper. This shift introduces liquidity and refinancing risks, especially in volatile rate environments. Moreover, asset-liability mismatches persist in segments such as housing and vehicle finance. The sector also faces intensified competition from FinTech lenders and co-lending arrangements with banks, which, while innovative, can compress margins and increase operational complexity. Cybersecurity and fraud risks have risen alongside digital adoption, highlighting the need for stronger tech infrastructure and governance frameworks.
Lastly, macroeconomic uncertainties and evolving ESG expectations are reshaping long-term risk profiles. NBFCs exposed to climate-sensitive sectors must prepare for environmental and social risk disclosures, adding to their compliance burden.
Despite these challenges, well-capitalized and tech-forward NBFCs remain resilient, with continued growth opportunities in underserved markets. However, prudent risk management, digital transformation, and regulatory agility will be critical for sustainable performance in FY2025–26 and beyond.
OPPORTUNITIES AND THREATS
The Indian financial sector is currently undergoing a transformative phase, presenting a wide range of opportunities as well as notable challenges. On the opportunity front, rapid digitization and the rise of fintech companies have revolutionized the way financial services are delivered, significantly enhancing accessibility and efficiency. Initiatives such as the Unified Payments Interface (UPI), the account aggregator framework, and the upcoming Central Bank Digital Currency (CBDC) are reshaping the ecosystem. Financial inclusion continues to progress, supported by government schemes like Jan Dhan Yojana and the expansion of microfinance and small finance banks into semi-urban and rural areas. The rising middle class, increasing urbanization, and growing awareness of financial products have further boosted demand for banking, insurance, and investment services. Additionally, regulatory support from institutions like the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Insurance Regulatory and Development Authority of India (IRDAI) has contributed to greater transparency and investor confidence. The push for green finance and infrastructure development has also opened up new avenues for long-term capital mobilization, particularly in ESG investing and project finance.
However, the sector also faces several threats that could impact its stability and growth. Rising non-performing assets (NPAs), especially in the MSME and unsecured lending segments, remain a concern, potentially eroding bank profitability and capital buffers. Cybersecurity risks have escalated with the increased reliance on digital platforms, making banks and financial institutions more vulnerable to fraud, data breaches, and systemic disruptions. Global economic uncertainties—such as geopolitical tensions, Global tariff policies, and volatile capital flows—can affect currency stability and foreign investment. Inflationary pressures and fluctuating interest rates may also lead to reduced credit demand and tighter monetary conditions. Additionally, the regulatory landscape, while improving, can be complex, especially for emerging fintech firms that face ambiguity and compliance challenges. Overexposure to specific sectors like real estate or infrastructure also poses a risk of concentrated credit stress, which may affect the broader financial system if not managed prudently. Despite these challenges, the Indian financial sector remains resilient and is well-positioned to harness emerging opportunities with continued reforms, innovation, and prudent risk management.
Opportunities
1) Digital Transformation & Fintech Boom
Indias financial sector is experiencing rapid digital transformation, driven by the rise of fintech innovations such as UPI, digital wallets, neo-banking, and AI-powered financial services. These technologies have significantly improved financial inclusion, especially in rural and semi-urban areas, by making banking and financial services more accessible and efficient. Government initiatives like Digital India and regulatory support from the RBI have further accelerated this growth. While the fintech boom presents vast opportunities, it also brings challenges like cybersecurity risks and the need for strong regulatory oversight.
2) Financial Inclusion
Financial inclusion in India has significantly advanced in recent years, driven by initiatives like the Pradhan Mantri Jan Dhan Yojana, Aadhaar-based services, and the expansion of digital banking. These efforts have brought millions of previously unbanked individuals into the formal financial system, especially in rural and remote areas. Access to basic banking, credit, insurance, and pension services has improved, promoting economic participation and social empowerment. However, challenges such as financial literacy, digital access, and last-mile connectivity still need to be addressed for truly inclusive growth.
3) Rising Middle Class & Urbanisation
Indias rising middle class and rapid urbanization are key drivers of growth in the financial sector. With increasing incomes, better education, and growing aspirations, there is a higher demand for banking, credit, insurance, and investment products. Urbanization is also leading to greater adoption of digital financial services, especially among younger, tech-savvy consumers. This shift is expanding the customer base for financial institutions and creating opportunities for innovation and product diversification tailored to evolving urban lifestyles.
4) Regulatory Support & Reforms
Regulatory support and reforms have played a vital role in strengthening Indias financial sector. Institutions like the RBI, SEBI, and IRDAI have introduced measures to enhance transparency, improve governance, and promote financial stability. Reforms such as the Insolvency and Bankruptcy Code, stricter NPA recognition norms, and support for fintech innovations have increased investor confidence and market efficiency. Continued regulatory efforts are fostering a more resilient, inclusive, and technology-driven financial ecosystem.
5) Infrastructure and Green Finance
Infrastructure and green finance are emerging as key focus areas in Indias financial sector. With the governments push for large-scale infrastructure development and a transition to clean energy, there is growing demand for long-term, sustainable financing. Financial institutions are increasingly supporting projects in renewable energy, transportation, and urban development through green bonds and ESG-linked investments. This shift not only supports economic growth but also aligns Indias financial system with global sustainability goal.
Threats
1) Rising Non-Performing Assets (NPAs)
Rising Non-Performing Assets (NPAs) remain a major challenge for Indias financial sector, particularly in segments like MSMEs, unsecured retail loans, and agriculture. High NPAs impact the profitability and lending capacity of banks and NBFCs, leading to tighter credit conditions. Despite improvements through mechanisms like the Insolvency and Bankruptcy Code (IBC) and asset reconstruction efforts, sustained economic stress and global uncertainties continue to pressure asset quality. Addressing NPAs effectively is crucial for maintaining financial stability and supporting economic growth.
2) Cybersecurity Risks
Cybersecurity risks have become a growing concern in Indias financial sector due to the rapid adoption of digital banking and fintech services. With increasing reliance on online transactions and data-driven platforms, financial institutions face threats such as data breaches, phishing attacks, and ransomware. These risks not only compromise customer trust but can also disrupt operations and lead to financial losses. Strengthening cybersecurity infrastructure and regulatory oversight is essential to safeguard the digital financial ecosystem.
3) Global Economic Uncertainty
Global economic uncertainty poses significant risks to Indias financial sector, as factors like geopolitical tensions, trade disruptions, and fluctuating commodity prices impact capital flows and currency stability. Changes in global interest rates and inflation can affect foreign investment and borrowing costs, creating volatility in financial markets. Navigating these external challenges requires robust risk management and policy measures to maintain resilience and support sustainable growth.
4) Inflation and Interest Rate Volatility
Inflation and interest rate volatility present key challenges for Indias financial sector. Rising inflation can erode purchasing power and increase costs, while fluctuating interest rates impact borrowing and lending activities. Higher rates may reduce credit demand and squeeze profit margins for banks and financial institutions. Managing these uncertainties is critical for maintaining economic stability and fostering steady growth in the sector.
5) Regulatory Overlap & Compliance Burden
Regulatory overlap and compliance burden pose challenges for Indias financial sector, as multiple regulators like RBI, SEBI, and IRDAI oversee different segments, sometimes leading to overlapping rules and complex requirements. This can increase costs and operational difficulties, especially for emerging fintech firms and smaller institutions. Streamlining regulations and improving coordination among regulators are essential to enhance efficiency and foster innovation.
6) The rapid developments in Artificial Intelligence (AI) and its usage are also both an opportunities and threats for the industry.
ADEQUACY OF INTERNAL CONTROLS
Your Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that transaction are authorised, recorded and reported correctly. The Company has an extensive system of internal control which ensures optimal utilisation and protection of resources, its security, accurate reporting of financial transactions and compliances of applicable laws and regulations as also internal policies and procedures. Your Company has in place, an adequate internal control and internal audit system managed by qualified and experienced people. Main objective of the system is to safeguard the Companys assets against loss through unauthorised use and pilferage, to ensure that all transactions are authorised, recorded and reported correctly and timely, to ensure various compliances under statutory regulations and corporate policies are made on time and to figure out the weaknesses persisting in the system and suggest remedial measure for the same. The Company has continued its efforts to align all its processes and controls with best practices in these areas. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2024-25.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES
Your Company continues to lay great stress on its most valuable resource - people. Continuous training, both on the job and in an academic setting, is a critical input to ensure that employees at all levels are fully equipped to deliver a wide variety of products and services to the rapidly growing customer base of your Company. It is our endeavour to create an environment where people can use all of their capabilities in support of the business. Therefore, your Company encourages its employees to balance their work and personal responsibilities. The Company is actively working on developing a culture driven by the collective spirit of experience and companywide ownership. Assignment, empowerment and accountability will be the cornerstone of the people-led processes.
BUSINESS OUTLOOK
KJMC Financial Services Limited is expanding its investment activities in listed and unlisted equity, bonds, REITs, etc., both directly and through Portfolio Management Services (PMS) and Alternative Investment Fund (AIF) schemes, in addition to trading in indices. Apart from investment and trading activities, KJMC Financial Services Limited has also broadened its loan offerings through the following verticals :
1. KJMC Financial Services Limited can enter into loan transaction through which the transferor transfers all or part of its economic interest in loan exposure to the Company (transferee) without the actual transfer of loan or contract wherein the Company (transferee) provides the fund to the transferor to the extent of economic interest.
2. Loan against Property: These loans will be advanced against fully constructed residential and/or commercial units with an occupation certificate. Repayment will be from the sale of these units.
3. MSME Loans: KJMC Financial Services Limited will also be offering Loans against Property to SMEs, MSMEs against mortgage of their residential and commercial properties. This product will help clients address funding requirements for both personal and business needs. Clients leverage the economic worth of their property without giving away ownership.
4. Need-based Working Capital Loans: The company is offering need-based working capital loans to the MSMEs / Proprietorships / Individuals for meeting short-term bridge finance, either unsecured / secured by shares, personal guarantees etc.
Talent Management:
We believe that investing in our employees is critical to our long-term success and we will continue to prioritize talent management in years to come focusing on creating a highly engaged and motivated employee base.
We aim at improving the recruitment process, enhancing the boarding experience, investing in training and development as well as creating career development plans or succession plan higher growth.
At KJMC, we promote an atmosphere of inclusion, by encouraging the next level of employees to take higher responsibilities. Managers along with Human Resources formulate a customized grooming and orientation of high potentials, by carefully planning their work experiences. Their skills and capabilities are developed through further training and mentoring.
Client Asset Safeguarding:
Transparency: Maintaining transparency with clients about potential risks and the steps being taken to mitigate risk factors which enhances trust and confidence.
CAUTIONARY STATEMENT
Management discussion and analysis report contains statements which are forward looking based on assumptions. Actual results may differ from those expressed or implied due to risk and uncertainties which have been detailed in this report. Several factors as listed in this report could make significant difference to the Companys operations. Investors, therefore, are requested to make their own independent judgments and seek professional advice before taking any investment decisions.
Sources:
1. International Monetary Fund (IMF) (World Economic Outlook – April 2025)
2. CRISIL Intelligence
3. RBI, Company reports, CRISIL MI&A.
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