Libord Finance Ltd Management Discussions

Libord Finance Limited is a limited company domiciled and incorporated in India and its shares are publicly traded on the Bombay Stock Exchange Ltd. (BSE). The Company is presently classified as a Non-Banking Financial Company duly registered with the Reserve Bank of India. The Company is engaged into the business of financial services, working capital loans, project finance, syndication of loans, corporate advisory services, financial consultancy etc.

This Report contains forward-looking statements which are based on certain assumptions, risks, uncertainties and expectations of future events. The actual results, performance or achievements can differ materially from those projected in any such statements depending on various factors including: the demand supply conditions, change in government regulations, tax regimes, economic development within the country and abroad and such other incidental factors over which, the Company does not have any direct control. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on basis of any subsequent developments, information or events.

This Management Discussion and Analysis Report is framed in compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations").

INDUSTRY STRUCTURE AND DEVELOPMENTS

Non-Banking Financial Companies play a vital role in the financial sector of our economy along with other financial institutions. They largely extend support to the micro, small and medium enterprises (MSMEs) which get benefitted due to their strategic operational techniques coupled with lower costs of delivery, lower restrictions on customers etc. Over the years, NBFCs have emerged as an alternate choice and at times the first choice for several customers, who need short term/ medium term financing. The NBFCs work under strict regulations of the RBI and reach out to even those sectors which the Banks cannot reach.

Non-banking finance companies (NBFCs) are an integral part of the Indian financial ecosystem. NBFCs reach out to millions of individuals and Micro, Small and Medium Enterprises across the country having no or limited access to secured and unsecured credit lines by commercial banks and other development financial institutions. NBFCs integrate such people and firms with the financial mainstream of our economy. NBFCs are able to develop a ground-level understanding of their customers profile and their credit needs and provide innovative and customised products to satisfy their clients needs and so they are a preferred source of credit line compared to traditional banks. They have a niche particularly in the low income/asset segment of individuals and corporates and also among the first time seekers of credit who have not borrowed from any financial institution in the past. NBFCs thrive well in those areas too where banking and institutional credit financial services have limited ground presence.

OPPORTUNITIES

According to the Economic Survey 2026, While the year-on-year growth trend in credit for industry and services has demonstrated a moderate increase in financial year 2025-26 compared to the previous year, yet the bank credit to the MSME sector has continued to show momentum and remains robust. In November 2025, bank credit to this sector increased by 21.8 per cent compared to a 13 per cent increase in November 2024. Within the MSME sector, the credit extended to the micro and small enterprises has registered an increase of 24.6 per cent (YoY) in November 2025, up from 10.2 per cent in November 2024. The expansion has been driven by sustained retail demand, MSME lending, renewed credit flows to NBFCs and a gradual pickup in corporate borrowing.

The financial year 2025-26 ended with robust year-on-year (y-o-y) non-food credit growth of 15.9%, compared to 10.9% in the corresponding period in 2025. The aggregate credit outstanding in March 2026 reached Rs.212.9 lakh crore, Rs.29.2 lakh crore higher than the previous year.

Amidst a low-interest rate environment, Government aided Capex cycle supported by timely structural reforms, private investments are crowding-in and boosting domestic credit demand, indicative of growing confidence among corporate as well as individual borrowers on Indian economy.

Credit growth in FY 2025-26 has been broad-based led by services sector, followed by personal loan segment, agriculture and allied activities, and industry. The Services sector credit, that contributes 28% to the overall credit, recorded a robust expansion of 19.0% y-o-y. The surge was primarily driven by high demand from segments like Non-Banking Financial Companies, trade, and commercial real estate. The personal loan segment with 33% share in overall credit, expanded by 16.2% in FY 2025-26, which is 455 bps higher than credit growth (11.7%) registered a year ago. Growth remained steady in the housing segment, while vehicle loans and loans against gold jewellery continued to show strong momentum.

Credit growth in Agriculture and Allied Activities sector accelerated to 15.7% in the year 2025-26 compared to 10.4% growth registered previous year, reflecting sustained rural demand and formalization of rural credit. Credit deployment to the industrial sector expanded at almost double rate to 15.0%, vis-a-vis 8.2% growth registered last year driven largely by Infrastructure, Basic Metal and Metal Products, Chemicals and Chemical Products, Petroleum, Coal Products, and Nuclear Fuels sectors. Micro and Small industries registered a 33.1% y-o-y growth in the year 2025-26 which was 3.7 times higher than previous year. Similar positive trends are witnessed for medium-scale industries where credit expanded by 21.7% y-o-y.

Robust credit growth demonstrates the resilient domestic economic environment and envisages enhanced appetite for credit across sectors of the Indian economy. Strong credit growth results in corporates and individuals availing credit facilities for business expansion and acquiring durable goods, further accelerating industrial activity by additional capacity building through investment in fixed assets, generating more employment opportunities.

The Reserve Bank of Indias Financial Inclusion Index (FI-Index) for the year ending March 2025 stands at 67.0, up from 64.2 in March 2024 reflecting increased access and usage of financial services.

Public Sector Banks (PSBs) continued to register strong financial performance during FY 2025-26, reflecting sustained business growth, improved asset quality, record profitability and strong capital position. The improved performance demonstrates the resilience, stability and enhanced institutional capacity of PSBs in supporting the credit needs of a fast-growing Indian economy. Asset quality of PSBs improved significantly during FY 2025-26, with Gross NPA ratio (Non-Performing Assets) declining to 1.93% and Net NPA ratio to 0.39% as on 31.03.2026, reflecting historically low levels of stressed assets.

The aggregate business of PSBs increased to Rs.283.3 lakh crore as on 31.03.2026, registering growth of 12.8% over the previous year. Aggregate deposits rose by 10.6% y-o-y to Rs.156.3 lakh crore, reflecting continued depositor confidence and strong resource mobilisation by PSBs. Gross advances registered growth of 15.7% y-o-y and reached Rs.127 lakh crore, indicating sustained credit demand across sectors of the economy.

Improved asset quality, healthy credit expansion and higher income contributed to improved profitability of PSBs during FY 2025-26. Aggregate operating profit reached f3.21 lakh crore, while aggregate net profit increased by 11.1% y-o-y to a historic high of f1.98 lakh crore, marking the fourth consecutive year of aggregate profitability for PSBs.

Against the challenging global backdrop surrounded by geo-economic fragmentation and geo-political pressures, the Indian economy has shown remarkable resilience and has been one of the fastest growing major economies in the world. Indian banking sector, the primary engine of economic growth is at best of its health with a well-capitalized balance sheet, historically low impaired assets and sustained profitability, augments the growth potentials of the economy. The persistent government effort in democratising and formalising credit has been resulting in broad based credit growth in the economy.

As per the Provisional Estimates (PE) of Gross Domestic Product (GDP) released by the National Statistical Office (NSO), the real GDP (at constant 2022-23 prices) is estimated to attain a level of Rs.323.12 lakh crore during FY 2025-26 as compared to the First Revised Estimates of f299.89 lakh crore in FY 2024-25, registering a robust growth of 7.7%. Nominal GDP (at current prices) is estimated at f346.36 lakh crore against f318.07 lakh crore in the previous year, reflecting a growth of 8.9%.

Despite the global turmoil, thus, the Indian economy remained resilient in the year 2025-26. Even as the net external demand remained soft, private consumption and fixed investment contributed significantly to overall growth. On the supply side, estimated real GVA growth of 7.9 per cent was driven by buoyant services sector and robust manufacturing activity.

The Reserve Bank of India, in its monetary policy statement has observed that sustained momentum in services sector, persisting impact of GST rationalisation, rising capacity utilisation in manufacturing, and healthy balance sheets of financial institutions and corporates may continue to support domestic demand and the real GDP grow at 6.9 per cent in the current financial year 2026-27 even as further escalation of the conflict, its continuation over a wider geographical spread and uncertainty regarding the damage to the energy infrastructure pose downside risks to the domestic growth outlook. However, Indian economy may continue to be resilient as the CPI inflation for the financial year 2025-26 is projected to be at 4.6 per cent which is well within the comfort zone from the monetary policy perspective.

An update to the World Economic Outlook (April 2026) released by the International Monetary Fund (IMF), has revised Indias growth for the year 2025 to 7.6 percent which is higher by 1.0 percentage point relative to its previous WEO (October, 2025). For the year 2026, the growth rate has been revised upward moderately by 0.3 percentage point to 6.5 percent, led by positive contributions from the carryover of the strong 2025 outturn and the decline in additional US tariffs on Indian goods from 50 to 10 percent, which outweigh the adverse impact of the Middle East conflict.

THREATS

In a world already weakened by rising rivalries, unstable supply chains and prolonged conflicts at risk of regional spill over the global economy is confronting systemic, deliberate and far-reaching global consequences, making the economic environment uncertain and fragile. According to the Global Risks Report, 2026 published by the World Economic Forum, the centrality of Geo-economic confrontation in the global risks landscape is the top risk featured and it is likely to be so over the two-year time horizon till the year 2028.

As global risks continue to spiral in scale, interconnectivity and velocity, the current year 2026 marks an age of competition. As cooperative mechanisms crumble, with governments retreating from multilateral frameworks, stability appears to be under siege. A contested multipolar landscape is emerging where confrontation is replacing collaboration, and trust, which is fundamental to any degree of cooperation, seems to be losing its value. The multilateral system is under pressure. Declining trust, diminishing transparency and respect for the rule of law, along with heightened protectionism, are threatening longstanding international relations, trade and investment and increasing the propensity for conflict.

Thus, the global economy is facing many threats and challenges. According to the Economic Survey 2026, there has been a shift from rules-based globalisation to geopolitical fragmentation, marked by strategic trade, supply-chain weaponisation, volatile capital flows, and rising resource nationalism, making access to critical minerals, energy, technology, and finance increasingly uncertain.

The outbreak of the conflict in West Asia has led to severe disruption of global supply chains. This poses an unprecedented challenge for the global economy due to expectation of higher prices and lower global growth. Given such a scenario in the global economy, the Reserve Bank of India (RBI) may have tough time trying to balance the twin objectives of the monetary policy, i.e., the need to keep inflation under control while at the same time, minimising the impact of the incidental tightening measures on growth.

The hardening of the sovereign bond yields due to inflation fears and recent corrections in equity valuations have also indicated deepening of the turmoil in global financial markets. Besides, strengthening of the US dollar has exerted pressure on currencies of major economies. Further intensification of the conflict, its prolongation and widening geographical spread remain the key downside risks to the global outlook. Further escalation of the conflict, its continuation over a wider geographical spread and uncertainty regarding the damage to the energy infrastructure pose severe risks to the domestic growth outlook as well.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company operates in single business segment i.e. NBFC. As the Company is only in one line of business, product wise disclosure of performance is not required to be made.

OUTLOOK

The Management of the Company is looking for a steady growth of the Company and aims at maximising the shareholders wealth by way of earning maximum profits at low investment costs. The Company is cautiously optimistic in its outlook for the year 2026-27. The outlook for the business of the Company is also discussed in the Directors Report.

RISKS AND CONCERNS

The Company is providing financial, corporate and management consultancy and undertakes wide spectrum of activities and therefore has a well-diversified portfolio of services provided. Currently there are no risks faced by the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size and nature of its operations. During the year, controls were tested and no material weakness in design and operation were observed. These have been designed to ensure the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets from unauthorised use, the prevention and detection of frauds and errors, ensuring accuracy and completeness of the accounting records, timely preparation of financial information and compliance with applicable statutes.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

A detailed discussion on financial performance with respect to operational performance has been presented in the Directors Report. HUMAN RESOURCE DEVELOPMENT

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognises the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation. Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

DETAILS OF KEY FINANCIAL RATIOS

The details of the applicable key financial ratios, as applicable, are given in Notes to the Financial Statements.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). The details of accounting treatment are given in Significant Accounting policies at note no. 1 & 2 of the Financial Statements.