Ladderup Finance Ltd Management Discussions

GLOBAL ECONOMIC OUTLOOK

The global economy has performed better than previously anticipated, although the earlier front-loading of trade is showing signs of moderating. The economic environment continues to evolve amid changing trade policies, geopolitical developments, and financial market volatility. According to the International Monetary Fund (IMF) World Economic Outlook (WEO) (January 2026), global growth is expected to remain stable at 3.3% in 2026 and 3.2% in 2027, following growth of 3.3% in 2025. Global headline Inflation is expected to moderate from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, supported by easing price pressures and improved supply conditions. Continued investment in technology and artificial intelligence (AI), supportive fiscal and monetary policies, and favorable financial conditions are expected to sustain global growth.

Asia is expected to remain a key contributor to global growth, with the IMFs April 2026 regional outlook estimating regional GDP growth of 4.4% in 2026 and 4.2% in 2027. Despite challenges from geopolitical tensions, trade uncertainties, and elevated energy prices, China and India are expected to account for a significant share of regional expansion. Chinas growth is estimated at 5.0% in 2025 and is expected to moderate to 4.4% in 2026, while Indias economy is expected to grow by 6.5% in both 2026 and 2027, following stronger growth in FY 2025.

Inflation in emerging Asia is expected to increase from an estimated 1.1% in 2025 to 2.6% in 2026, reflecting a gradual normalization of price pressures.

INDIAN ECONOMY OVERVIEW

India continued to maintain its position as one of the worlds fastest-growing major economies. While the IMF estimates Indias real GDP growth at 7.6% for FY2025–26, the RBI projects growth to moderate to 6.9% in FY2026–27, reflecting the impact of the West Asia conflict, higher input costs and supply chain disruptions in the Strait of Hormuz. Economic momentum was supported by increased infrastructure spending, tax rationalisation measures, lower crude oil prices and a stable inflation environment. Headline CPI followed a downward trajectory during the year, reaching a historic low of around 0.25% in October, primarily due to a correction in food prices, before edging up to 0.71% in November, underscoring sustained price stability across broad consumption baskets. Indias external sector remained favourable, with total exports reaching a record US$863.11 billion in FY2025–26. Continued focus on trade agreements, manufacturing, digital transformation and infrastructure development is expected to strengthen Indias integration with global markets. Capital markets remained supported by domestic investor participation, healthy corporate fundamentals and regulatory measures undertaken by SEBI and the RBI. The Union Budget 2026–27 proposed a record public capital expenditure of Rs 12.2 lakh crore, reflecting an 11.5% year-on-year increase, with significantly higher allocations for public housing and defense.

Inflation remained contained during the year, supported by easing food inflation and stable core inflation trends, enabling supportive monetary conditions and improved credit availability. Strong GST collections, expanding digital payments through UPI, healthy foreign exchange reserves, and continued investment inflows further reflected the resilience of the Indian economy.

BUSINESS & FINANCIAL PERFORMANCE OF THE NBFC SECTOR AND CAPITAL MARKET

The Non-Banking Financial Company (NBFC) sector continued to play a pivotal role in Indias financial ecosystem during FY2025–26 by expanding credit access across retail, MSME, vehicle finance, housing finance and other underserved segments. The sector demonstrated resilience, supported by sustained retail credit demand, improving liquidity conditions, increasing digital adoption, stable asset quality and prudent risk management, reinforcing its contribution to financial inclusion and economic growth.

The operating environment remained broadly supportive during the year. The Reserve Bank of India (RBI) maintained the repo rate at 5.25%, with the Standing Deposit Facility (SDF) rate at 5.00%, and the Marginal Standing Facility (MSF) rate and Bank Rate at 5.50%. The RBI retained its neutral policy stance, reflecting a balanced approach amid heightened geopolitical uncertainties, supply-side disruptions and elevated energy prices. While headline inflation remained below the target level, the central bank emphasized the need for policy flexibility in view of potential risks arising from commodity price volatility and adverse weather conditions. The NBFC sector continues to enjoy strong structural growth prospects. According to CRISIL Ratings, NBFC assets under management (AUM) are expected to grow by 18–19% during FY2026 and FY2027, crossing Rs 50 lakh crore by March 2027, driven by healthy consumption demand and continued expansion across retail lending segments. Similarly, ICRA expects retail NBFC AUM (excluding housing finance companies) to grow by 16–18% in FY2027, supported by sustained demand for vehicle finance, gold loans, personal loans and MSME credit.

Capital markets witnessed mixed trends during FY2025–26. Foreign Institutional Investors (FIIs) remained net sellers, recording net equity outflows of approximately Rs 1.80 lakh crore, reflecting moderation in corporate earnings expectations and global market uncertainties. Consequently, consensus Nifty 50 earnings per share (EPS) growth estimates for FY2025–26 were revised downward from around 12.5% to approximately 5.9%, which weighed on investor sentiment during the year.

Despite near-term challenges, the medium-term outlook for Indian capital markets remains constructive. Bloomberg consensus estimates project Nifty 50 earnings growth of around 15% for FY2026–27, supported by improving corporate profitability and Indias resilient macroeconomic fundamentals. A sustained recovery in earnings, coupled with strong domestic demand and a stable policy environment, is expected to enhance investor confidence and reinforce Indias attractiveness as a long-term investment destination.

Looking ahead, the NBFC sector is well positioned to sustain its growth momentum, supported by favorable demographic trends, increasing formalization of credit, digital innovation, improving funding conditions and disciplined risk management. These factors are expected to strengthen the sectors role in deepening financial inclusion while contributing meaningfully to Indias long-term economic growth.

BUSINESS STRATEGIES & FINANCIAL PERFORMANCE OF THE COMPANY

Ladderup Finance Limited ("LFL") is a residuary Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI) as a Non-Deposit taking Non-Systemically Important NBFC i.e. Core Investment Company and is listed on BSE Limited. The Company is primarily engaged in making medium- to long-term investments in listed and unlisted securities across diversified sectors, including financial services, healthcare, retail, packaging, QSR, information technology, infrastructure, energy, oil & gas, and real estate.

The Companys diversified portfolio of strategic and financial investments has demonstrated resilience across market cycles and continues to support its long-term value creation strategy. The Company remains focused on identifying attractive investment opportunities while maintaining a disciplined investment approach. Given the nature of its business, financial performance in any particular year may not fully reflect the underlying value of its investment portfolio, as gains and losses are recognized upon the sale of investments. Detailed information on the Companys financial performance is provided in the Financial Statements and the Boards Report.

The Company have one Subsidiary Company and one Joint Venture Company; the financial performance of those Companies is as follows:

FINANCIAL PERFORMANCE OF LADDERUP ASSET MANAGERS PRIVATE LIMITED (FORMERLY LADDERUP WEALTH MANAGEMENT PRIVATE LIMITED (SUBSIDIARY COMPANY)

Ladderup Asset Managers continued to deliver strong performance during FY 2025–26, driven by sustained growth in Assets Under Management (AUM), consistent investment performance, and a client-centric approach focused on comprehensive financial planning, risk assessment, and customized investment solutions. The Company remains committed to capital preservation while seeking to enhance long-term client returns across asset classes.

During the year under review, the Companys subsidiary, Ladderup Asset Managers Private Limited, incorporated Ladderup Fund Management IFSC Private Limited in GIFT City, Ahmedabad. Consequent to its incorporation on 28 May 2025, Ladderup Fund Management IFSC Private Limited became a step-down subsidiary of the Company. Accordingly, the financial results of the IFSC entity have been included in the consolidated financial statements of the Company from the date of its incorporation.

For FY 2025–26, the Company reported a consolidated Tax (PAT) of Rs 281.86 lakhs, as compared to Rs 512.47 lakhs in the previous financial year. The standalone Profit after Tax (PAT) of Rs 297.94 Lakhs, as compared to 317.11 in the previous financial year.

Subsequently, the close of FY 2025–26, on 14 April 2026, the Company completed the acquisition of Jericho Ventures Private Limited, further strengthening its strategic growth initiatives and expanding its capabilities. The Company remains committed to adopting industrys best practices and delivering value through integrity, transparency, and professional excellence.

FINANCIAL PERFORMANCE OF WATERPROOF CORPORATION PRIVATE LIMITED (WACO), (JOINT VENTURE COMPANY)

Waterproof Corporation Private Limited (WACO) is one of Indias leading manufacturers of adhesive tapes and the countrys largest producer of premium Gummed Paper Tapes and allied products. The Company serves industries including packaging, plywood, and gypsum boards through its manufacturing facility in Mumbai, supported by in-house research, engineering, and manufacturing

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

capabilities. It also operates a state-of-the-art PET preform manufacturing plant at Umbergaon, Gujarat. The facility manufactures a wide range of PET preforms and CSD caps for applications such as packaged drinking water, carbonated soft drinks, edible oils, and juices, using advanced fully automatic HUSKY and ENGEL injection moulding machines.

During FY 2025–26, the Company reported continued growth in its financial performance, with total revenue of Rs 7320.11 lakhs as compared to Rs 8,398.49 lakhs in the previous financial year. Profit Before Tax (PBT) stood at Rs 622.26 lakhs, as against Rs 759.49 lakhs in FY 2024–25, reflecting sustained business growth.

OPPORTUNITIES AND THREATS FOR THE COMPANY

OPPORTUNITY

- Growing retail participation and increasing financial awareness.

- Digital transformation and use of technology-driven investment solutions.

- Opportunities arising from Indias economic growth and emerging sectors.

- Potential for strategic investments and corporate restructuring opportunities.

THREATS

- Regulatory changes and increasing compliance requirements.

- Market volatility and fluctuations in investment valuations.

- Rising competition from financial institutions and fintech platforms.

- Technology, cybersecurity and talent-related challenges.

The Company continues to monitor these factors and has implemented appropriate risk management practices to support sustainable growth.

RISK MANAGEMENT AND CONCERN

The Company has established comprehensive policies and processes for the identification, assessment, monitoring and mitigation of various risks, including business, strategic, operational, financial and compliance-related risks.

The Board of Directors, supported by the Risk Management Committee, regularly reviews and monitors the key risks faced by the Company and evaluates the effectiveness of the measures implemented for their mitigation. The management also periodically reviews the risk management framework, policies and procedures and takes appropriate steps to strengthen controls and improve systems, wherever required.

Risk and compliance with update reports are regularly placed before the Audit Committee and the Board of Directors for their review and consideration. Based on such reviews, appropriate corrective and mitigating measures are undertaken or recommended to ensure that identified risks are effectively managed and that the Company continues to operate within its defined risk appetite and in compliance with applicable laws and regulations.

HUMAN RESOURCES

The Company recognises its employees as a key driver of sustainable growth and remains committed to attracting, developing and retaining the right talent aligned with its business objectives. The Human Resources function focuses on structured training and development initiatives, including both in-house and external programmes, to enhance the knowledge, skills and capabilities of employees across all levels.

The Company strives to provide a conducive, supportive and professional work environment, along with the necessary infrastructure and resources to enable employees to perform effectively. Equal emphasis is placed on both monetary and non-monetary aspects of employee development, engagement and well-being.

The Companys key Human Resources initiatives include effective manpower planning aligned with business requirements, identification of training and development needs, continuous skill enhancement, employee engagement, retention initiatives, and appropriate reward and recognition programmes. These initiatives are aimed at fostering a culture of learning, performance and professional growth while supporting the Companys long-term business strategy.

INTERNAL CONTROL AND THEIR ADEQUACY

The Companys internal control system is designed to ensure operational efficiency, protection and conservation of resources, accuracy and promptness in financial reporting and compliance with laws and regulations.

The Company, being in the lending and investment industry, has put in place an adequate internal control system to safeguard all assets and ensure operational excellence. The system also meticulously records all transaction details and ensures regulatory compliance. The Companys internal control system is commensurate with the size, nature, and operations of the Company.

DISCLOSURE OF ACCOUNTING TREATMENT

Your company follows the same accounting procedure and makes the financial statement as per the accounting standard, IND – AS, as well as the other laws applicable with respect to financial statements. Your company has not changed its accounting policy. However, changes in the accounting treatment.

Effective April 1, 2024, the company has decided to apply the Fair Value Through Profit or Loss (FVTPL) method for its investments. This change aims to provide investors with a more transparent view of the companys financial performance.

Further, effective October 1, 2025, the company has introduced a classification policy:

1. Current Investments – All securities not intended to be held long-term will be classified as inventory under financial assets and treated as stock-in-trade (securities held for trading).

2. Long-Term Investments – Securities intended to be held for more than one year, whether listed or unlisted.

CAUTIONARY STATEMENT

This Management Discussion and Analysis Report may contain forward-looking statements relating to the Companys objectives, plans, projections, estimates and expectations. These statements are based on current assumptions and are subject to various risks and uncertainties.

Actual results may differ materially due to changes in economic and market conditions, geopolitical developments, interest rates, regulatory frameworks, including those of the Government, RBI, SEBI and tax authorities, and other unforeseen factors.

The Report also contains information sourced from publicly available reports and publications of regulatory authorities and industry bodies. The Company does not undertake any obligation to update or revise such statements, except as required under applicable laws and regulations.