Mangal Credit & Fincorp Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

About Mangal Credit & Fincorp Limited

Mangal Credit and Fincorp Limited (MCFL) is a professionally managed, publicly listed Non-Banking Financial Company (NBFC), listed on both BSE Limited and the National Stock Exchange of India. Since commencing retail lending operations Post-COVID, MCFL has remained focused on making credit more accessible, transparent, and responsive to the needs of individuals, entrepreneurs, and small businesses.

Over the years, MCFL has built a lending branches anchored in trust, disciplined underwriting, and long-term customer relationships. Under the leadership of Founder Meghraj Jain and Executive Director FHardik Jain, the organisation has pursued steady growth while maintaining a strong focus on prudent risk management, sound governance, and responsible lending practices.

The lending portfolio comprises secured products, including Gold Loans, Loans Against Property (LAP), and MSME Loans, and Personal Loan, designed to address the diverse financing requirements of customers across retail and business segments.

Today, MCFL serves customers through a network of 30 branches across three states in India. Backed by a strong capital base, an experienced management team, and a long-term growth vision, the organisation continues to expand its reach responsibly while advancing financial inclusion and creating sustainable value for customers, shareholders, employees, and the communities it serves.

Economic Overview

Global Economy

The global economy demonstrated remarkable resilience during CY 2025 despite navigating an increasingly complex and uncertain environment. Escalating geopolitical conflicts, evolving trade policies and persistent supply chain disruptions continued to challenge global commerce, while volatility in Source: IMFs World Economic Outlook, April2026

Outlook: 2026

Looking ahead, the global economy is expected to remain resilient but cautious amid renewed geopolitical tensions, particularly in West Asia, and continued uncertainty surrounding global energy supplies and trade flows. Elevated risks to oil, LNG, LPG and fertiliser supplies may keep inflationary pressures and supply chain disruptions in focus. Against this backdrop, the IMF projects global growth to moderate to 3.1% in energy prices and financial markets added to macroeconomic uncertainty. Even so, strong labour markets, supportive fiscal policies and accelerating investments in artificial intelligence and digital technologies helped sustain economic momentum across several regions.

Countries also strengthened their resilience by diversifying trade relationships, enhancing energy security and reconfiguring supply chains, enabling the global economy to adapt more effectively to external shocks. As a result, global economic growth improved to 3.4% in CY 2025, compared with 3.3% in the previous year. Advanced economies expanded by 1.9%, supported by easing financial conditions and recovering consumer demand, while Emerging Market and Developing Economies maintained robust growth of 4.4%, driven by resilient domestic consumption, infrastructure investments and sustained manufacturing activity. Meanwhile, global headline inflation moderated to 4.1%, reflecting the cumulative impact of monetary tightening and gradually easing supply- side pressures, although inflationary trends remained uneven across major economies.

Growth Projections

CY 2026, before improving modestly to 3.2% in CY 2027.

Encouragingly continued efforts toward diplomatic engagement, diversification of energy sources and stronger regional cooperation are expected to improve supply chain stability and supporta more balanced global recovery. Advanced economies are projected to grow by 1.8%, while Emerging Market and Developing Economies are expected to expand by

3.9%, supported by resilient domestic demand and sustained infrastructure investment. Policymakers are also expected to maintain a prudent balance between inflation management, fiscal discipline and long-term economic resilience, laying the foundation for more sustainable global growth.

Indian Economy

India remained one of the worlds fastest-growing major economies in FY 2025-26, supported by resilient domestic demand, sustained public investment and a reform-driven policy environment. According to the Ministry of Statistics and Programme Implementation (MoSPI), real GDP grew 7.6%, while Gross Value Added (GVA) increased 7.9% to 7294.91 lakh crore, reflecting broad-based economic strength.

Growth was led by the services sector, while manufacturing gained momentum through infrastructure spending, the Production Linked Incentive (PLI) Scheme and the Make in India initiative. Continued formalisation, improving competitiveness and deeper integration into global supply chains further strengthened Indias growth story. Industrial activity also remained healthy, with the Index of Industrial Production (IIP) rising 4.1% in March 2026, led by manufacturing and mining.

Despite geopolitical tensions, volatile energy prices and global trade disruptions, India demonstrated resilience through diversified sourcing, expanding domestic manufacturing and stronger trade partnerships. The PLI Scheme has attracted nearly 72.16 lakh crore of investments across 14 strategic sectors, reinforcing Indias manufacturing ambitions.

Macroeconomic conditions also improved during the year. Easing inflation enabled the RBI to lower the repo rate to 5.25%, supporting liquidity and credit growth, while Indias exports are expected to approach US$1 trillion in FY 2026-27, reflecting the countrys growing competitiveness in global markets.

Domestic Macro-Economic Scenario

	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024	FY2025	FY2026
Real GDP growth (%)	6.5	3.9	(5.8)	9.7	7	7.6	6.5	7.6
CPI inflation (%)	3.4	4.8	6.2	5.5	6.7	5.1	4.6	2.1
WPI inflation (%)	4.3	1.7	1.3	13	9.4	0.4	2.3	0.7
Merchandise exports (%, G&S)	9.1	(5.0)	(7.5)	44.8	6.3	(3.7)	0.1	0.9
Merchandise imports (%, G&S)	10.3	(76)	(16.6)	55.3	16.6	(5.5)	6.2	7.6
Current account balance (% of GDP)	(2.1)	(0.9)	0.9	(1.2)	(2.0)	(TO)	(11)	(0.6)
Exchange rate (INR/$ - avg.)	69.9	70.9	74.2	74.5	80.4	82.8	84.5	88.3
10-year yield (%- March-end)	7.5	6.9	6.3	6.8	7.3	7.1	6.6	7,0

Source: Department of Economic Affairs(DEA), Ministry of Statistics and Programme Implementation (MoSPI), RBI

Outlook

Indias growth outlook remains among the strongest globally, with the RBI projecting 6.9% real GDP growth for FY 2026-27, supported by resilient domestic consumption, rising private investmentand sustained public capital expenditure. Continued improvements in digital infrastructure, manufacturing capabilities and ease of doing business are expected to strengthen the countrys long-term growth trajectory and support its aspiration of becoming a developed economy by 2047.

The Union Budget FY 2026-27 reinforces this vision through a record capital expenditure allocation of 712.2 lakh crore, with significant investments directed towards transportation networks, urban infrastructure, power transmission and logistics. These investments are expected to enhance productivity, improve connectivity and create a strong multiplier effect across the economy.

While global geopolitical tensions, evolving trade policies and external financial conditions continue to pose near-term risks, Indias macroeconomic fundamentals remain robust. Moderating inflation, improving rural consumption, supportive policy measures and continued progress under initiatives such as Make in India and the PLI Scheme are expected to strengthen manufacturing, boost exports and sustain the countrys longterm growtli momentum.

Industry Overview

Indian Financial Services Industry

Indias financial services sector continued to demonstrate resilience and structural strength during FY 2025-26, supported by a stable macroeconomic environment, proactive regulatory measures and sustained progress in financial inclusion. Strengthening banking fundamentals, expanding digital financial infrastructure and healthy capital market activity reinforced the sectors ability to support economic growth while widening access to formal financial services across the country.

The Reserve Bank of India (RBI) maintained a supportive policy stance during the year through calibrated monetary easing and liquidity-enhancing measures. The reduction in policy rates and cash reserve requirements improved system liquidity, encouraged credit expansion and created a favourable environment for investment and consumption. At the same time, continued regulatory focus on prudential risk management and financial stability strengthened confidence across the financial system.

Indias banking sector remained well-capitalised, with improving asset quality, healthy profitability and robust capital buffers reflecting the resilience of the countrys financial institutions. Supported by favourable economic conditions and sustained demand across retail, MSME and corporate segments, bank credit expanded by 14.1% as of March 2026, reflecting broad- based growth in financing activity.

Capital markets also maintained strong momentum, driven by sustained domestic investor participation, healthy primary issuances and increasing retail engagement. Simultaneously, Indian households continued to diversify their investment portfolios, with a growing preference for equities and mutual funds alongside traditional savings instruments, highlighting the ongoing financialisation of household savings and the increasing maturity of the countrys financial ecosystem.

Technology continued to reshape the financial services landscape. Rapid adoption of digital payments, mobile banking, fintech solutions and digital lending platforms has enhanced accessibility, improved operational efficiency and accelerated financial inclusion across both urban and rural markets. Supported by progressive regulatory initiatives and expanding digital public infrastructure, Indias financial ecosystem is becom ing more integrated, efficient and customer-centric.

Outlook

Indias financial services industry enters the next phase of growth on the back of strong macroeconomic fundamentals, a well-regulated financial system and increasing digital adoption. Continued expansion of formal credit, rising financial inclusion and greater participation in capital markets are expected to support sustained growth across banking, non-banking financial companies (NBFCs) and other financial institutions.

Going forward, technology is expected to remain a key catalyst for transformation, with artificial intelligence, data-driven underwriting and digital customer engagement improving efficiency and expanding access to financial services. At the same time, strengthening cyber resilience, consumer protection, governance standards and responsible innovation will remain central to preserving trust and ensuring long-term financial stability.

Supported by progressive policy reforms, expanding digital infrastructure and rising credit demand, Indias financial services sector remains well positioned to play a pivotal role in supporting the countrys long-term economic aspirations while creating significant opportunities across the broader financial ecosystem.

Non-Banking Financial Companies (NBFC) Industry

The Non-Banking Financial Company (NBFC) sector continued to reinforce its position as a vital pillar of Indias financial ecosystem during FY 2025-26, complementing the banking sector by expanding access to formal credit across retail borrowers, MSMEs, first-time borrowers and underserved customer segments. Through their deep customer reach, specialised underwriting capabilities and ability to offer customised financial solutions, NBFCs continue to bridge critical credit gaps while advancing financial inclusion and supporting inclusive economic growth. Supported by resilient economic growth, increasing formalisation and rising credit demand, the sector maintained healthy momentum while placing greater emphasis on portfolio quality, operational efficiency and prudent risk management.

Credit demand remained broad-based across secured and retail lending segments, with gold loans, MSME finance, loan against property (LAP) and other retail lending categories witnessing sustained demand. While lenders adopted a more measured approach towards unsecured lending amid evolving regulatory and macroeconomic conditions, the overall shift towards secured lending and disciplined underwriting strengthened the sectors resilience and enhanced the quality of loan portfolios.

While banks continue to dominate Indias financial system, NBFCs play a complementary role by serving customer segments and financing requirements that often remain underserved by traditional banking channels. Their specialised product offerings, faster credit appraisal processes and flexible operating models enable them to address diverse financing needs across individuals, small businesses and emerging entrepreneurs, thereby strengthening the overall credit ecosystem.

NBFCs continued to strengthen their underwriting standards, collection mechanisms and portfolio monitoring frameworks, resulting in improved credit discipline and greater balance sheet resilience. Supported by diversified funding sources, comfortable capitalisation and adequate liquidity buffers, the sector remained well positioned to address expanding credit requirements while navigating evolving market conditions.

Digital transformation emerged as a key catalyst for the industrys evolution, supported by rapid adoption of digital public infrastructure, mobile connectivity and fintech partnerships. Increasing use of e-KYC, digital documentation, Al-enabled underwriting, alternative data analytics and automated loan origination has significantly improved credit assessment, accelerated loan disbursement and enhanced customer experience. These capabilities are enabling NBFCs to extend formal credit to previously underserved borrowers while improving operational efficiency and scalability.

Outlook

The outlook for Indias NBFC industry remains positive, supported by favourable macroeconomic fundamentals, increasing formalisation of the economy and sustained demand for retail and MSME credit. Rising financial inclusion, expanding digital infrastructure and supportive policy initiatives are expected to create significant long-term opportunities across gold loans, MSME finance, personal loans, loan against property and other secured lending segments.

Going forward, digital lending, technology-driven innovation and data-led credit evaluation are expected to redefine the industrys operating landscape by improving efficiency, expanding customer reach and enabling more informed lending decisions. Combined with disciplined risk management, diversified funding strategies and a supportive regulatory framework, these developments position NBFCs to play an increasingly important role in strengthening Indias financial ecosystem, fostering inclusive growth and supporting the countrys long-term economic aspirations

Atthesame time, the industry continues to operate in an evolving global environment. Geopolitical uncertainties, volatility in crude oil prices and inflationary pressures could tighten liquidity conditions, increase funding costs and affect the repayment capacity of certain borrower segments, particularly MSMEs and retail customers. This reinforces the importance of prudent underwriting, strong liquidity management and continuous portfolio monitoring to sustain asset quality and long-term growth.

MSME Finance Industry

Micro, Small and Medium Enterprises (MSMEs) continue to form the backbone of Indias economy, serving as key drivers of entrepreneurship, employment generation and inclusive economic growth. According to the Union Budget 2026-27, India has over 7.47 crore MSMEs, employing more than 32.8 crore people, making the sector the countrys second-largest source of employment after agriculture. MSMEs contribute approximately 31.1% of Indias GDP, 35.4% of manufacturing output and 48.6% of the countrys exports, underscoring their vital role in strengthening industrial development, fostering innovation and enhancing Indias global competitiveness.

The sector continues to benefit from a supportive policy environment focused on improving formalisation, expanding access to finance and enhancing ease of doing business. Digital initiatives such as the Udyam Registration Portal and Udyam Assist Platform have enabled the formal registration of over 7.3 crore enterprises, significantly improving access to institutional credit, government support schemes and formal financial services. At the same time, increasing adoption of technology, digital tools and deeper integration into domestic and global value chains are enhancing productivity, competitiveness and long-term growth prospects across the MSME ecosystem.

As MSMEs continue to expand, their financing requirements are becoming increasingly diverse, driving the evolution of Indias MSME lending ecosystem. MSME credit outstanding reached approximately Rs.67.6 lakh crore as of December 2025, reflecting sustained demand for business finance across the country. A key structural shift is also underway, with lenders increasingly complementing traditional collateral-based lending through cash flow-based underwriting. The use of GST data, banking transaction history, digital documentation and alternative data sources is enabling more informed credit assessment, faster loan approvals and improved access to finance for businesses with limited formal credit histories.

NBFCs continue to play a complementary role alongside banks by serving customer segments that often remain underserved by traditional financial institutions. Their specialised lending expertise, customer-centric approach, faster decision-making and deeper presence across semi urban and rural markets enable them to bridge financing gaps for small businesses and emerging entrepreneurs. At the same time, digital lending platforms, fintech partnerships and technology-driven credit assessment are improving customer onboarding, accelerating loan origination and delivering a more seamless borrowing experience, further strengthening access to formal credit across the MSME ecosystem.

Outlook

The outlook for Indias MSME sector remains positive, supported by favourable economic fundamentals, increasing formalisation, rising entrepreneurial activity and continued policy support. Government initiatives such as the Rs.10,000 crore MSME Growth Fund, enhanced support under the Self-Reliant India (SRI) Fund, and wider adoption of digital receivables financing platforms are expected to improve capital availability, liquidity and credit access across the sector.

As businesses increasingly transition towards formal credit channels, advances in digital lending, data-driven underwriting and technology-enabled credit assessment are expected to improve financial inclusion while enabling faster and more efficient credit delivery. Supported by an evolving regulatory framework, growing integration with domestic and global value chains and sustained demand for business finance, the MSME sector is well positioned to drive entrepreneurship, manufacturing growth and employment generation while creating significant long-term opportunities for lenders.

Source: Union Budget 2026-27, Ministry of Finance: Ministry of MSME: Economic Survey2025-26

Gold Loan Industry

Indias gold loan industry witnessed exceptional growth during FY 2025-26, driven by rising gold prices, increasing demand for secured credit and growing preference for organised lending channels. According to the Reserve Bank of India (RBI), outstanding gold loans increased from approximately 212.4 lakh crore in March 2025 to 218.6 lakh crore in March 2026, reflecting a robust 50.4% year-on-year growth. Gold- backed financing has evolved beyond being an emergency funding option and is increasingly being utilised by individuals, self-employed professionals, traders and micro and small businesses seeking timely access to working capital and shortterm liquidity. The products ability to offer quick disbursement, minimal documentation and flexible borrowing against an existing asset has reinforced its position as one of the fastest- growing segments within Indias retail lending landscape.

Elevated gold prices further strengthened the industrys momentum by enhancing the value of pledged collateral, enabling borrowers to access higher loan amounts against the same quantity of gold. At the same time, geopolitical uncertainty and economic volatility reinforced golds appeal as asafe-haven asset, increasing its importance not only as a store of wealth but also as a reliable source of secured financing. While higher gold prices moderated jewellery demand in certain segments, they also accelerated the adoption of gold-backed lending as borrowers increasingly preferred secured credit over unsecured alternatives.

Indias gold loan industry continues to benefit from increasing formalisation and a gradual shift from informal borrowing to organised lending institutions. According to the World Gold Council, Indian households hold an estimated 25,000 tonnes of gold, yet only around 12% of these holdings have been monetised through organised lenders. This significant under penetration presents a substantial long-term opportunity for the industry. Growing financial awareness, wider acceptance of regulated lending institutions and increasing use of gold as a productive financial asset are expected to further expand the organised gold loan market.

Technology is also reshaping the industry through digital loan processing, doorstep servicing, faster customer onboarding and enhanced credit assessment, making gold loans more accessible and convenient across urban, semi urban and rural markets. Increased competition among banks, NBFCs and fintechs is driving continuous improvements in customer experience, operational efficiency and service delivery further strengthening the industrys growth trajectory.

The regulatory landscape has continued to evolve with measures aimed at strengthening transparency customer protection and prudent lending practices. These initiatives are expected to promote responsible growth, improve governance standards and reinforce confidence in the organised gold loan ecosystem.

Outlook

The outlook for Indias gold loan industry remains highly favourable, supported by sustained demand for secured credit, increasing financial inclusion and continued formalisation of the lending ecosystem. With a vast stock of household gold remaining largely untapped by organised lenders, the sector offers significant headroom for long-term expansion.

Continued digital innovation, expanding distribution networks and a supportive regulatory framework are expected to improve accessibility enhance customer experience and strengthen operational efficiency across the industry. As borrowers increasingly prefer transparent, regulated and secured financing solutions, the organised gold loan industry is well positioned to play an increasingly important role in Indias retail credit ecosystem while creating sustained growth opportunities in the years ahead.

Source: RBI, Financial Stability Report (June 2026), Sectoral Deployment of Bank Credit: CRISIL Ratings: ICRA

Personal Loan Industry

Personal loans have emerged as one of the fastest-growing segments of Indias retail credit market, driven by rising consumer aspirations, increasing formalisation of credit and rapid digitalisation of the lending ecosystem. According to the Reserve Bank of India (RBI), the outstanding personal loan portfolio expanded from approximately Rs.6 lakh crore in FY21 to around T14 lakh crore in FY25, reflecting thegrowing preference for formal credit to meet consumption, healthcare, education, travel and other personal financing needs. The increasing acceptance of credit among younger consumers, coupled witli rising disposable incomes and changing lifestyle preferences, continues to support long-term demand for personal loans.

Technology has fundamentally transformed the personal lending landscape, making credit more accessible, faster and customer-centric. Digital onboarding, paperless documentation, instant credit assessment and automated loan approvals have significantly reduced turnaround times and enhanced customer experience. At the same time, lenders are increasingly leveraging alternative data sources, including banking transactions, digital payment behaviour and other non- traditional data, to strengthen credit assessment and expand access for new-to-credit borrowers who may have limited formal credit histories.

The personal loan market has also become increasingly competitive, with banks, NBFCs and fintech companies continuously innovating to address diverse customer requirements. Flexible repayment options, customised loan products and seamless digital journeys have widened access across urban, semi-urban and rural markets. NBFCs, in particular, continue to play an important role by serving customer segments that are often underserved by traditional banks through faster decision-making, customer-centric offerings and technology-enabled lending platforms.

Following a phase of rapid expansion, the industry has transitioned towards a more balanced and sustainable growth trajectory. Regulatory measures introduced by the RBI, coupled with lenders increased focus on prudent underwriting, portfolio quality and responsible lending practices, have strengthened the resilience of the personal loan ecosystem. This shift reflects the industrys emphasis on sustainable growth while maintaining sound credit discipline.

Outlook

The outlook for Indias personal loan industry remains positive, supported by favourable demographics, rising financial inclusion, increasing digital adoption and growing consumer confidence. As digital lending platforms continue to evolve and data-driven credit assessment becomes more sophisticated, lenders are expected to further improve accessibility, operational efficiency and customer experience.

At the same time, stronger regulatory oversight, disciplined risk management and responsible lending practices are expected to support sustainable long-term growth. With rising consumer aspirations, expanding formal credit penetration and continued innovation across the lending ecosystem, the personal loan segment is well positioned to remain an important driver of Indias retail credit market.

Source: RBI, CRISIL

Loan Against Property

Loan Against Property (LAP) has emerged as an important secured lending solution, enabling individuals, self-employed professionals, traders and MSMEs to unlock the value of their residential or commercial properties to meet business expansion, working capital and personal funding requirements. Offering relatively competitive borrowing costs and flexible end-use compared to unsecured loans, LAP has become an increasingly preferred financing option for borrowers seeking larger credit limits while preserving liquidity.

The LAP market has witnessed healthy growth in recent years, supported by rising demand for secured credit, increasing property ownership and the continued expansion of Indias MSME sector. As of FY26, the outstanding secured MSME loan portfolio in the form of LAP is estimated at approximately T12.2 lakh crore, highlighting the segments growing importance within the countrys secured lending ecosystem. The increasing formalisation of businesses through initiatives such as GST and Udyam Registration has improved financial transparency, enabling lenders to assess borrower creditworthiness more effectively and expand credit access to a wider pool of eligible borrowers.

Financial institutions are increasingly strengthening their focus on secured lending, with LAP emerging as an attractive asset class that offers a balanced combination of growth potential and portfolio quality. Backed by tangible collateral, the product provides greater resilience while helping borrowers access timely credit for business growth and other productive purposes. This has made LAP an increasingly important financing avenue for entrepreneurs and small businesses that may have limited access to conventional credit channels.

Technology is also transforming the LAP ecosystem. Digital onboarding, streamlined documentation, faster property assessment, automated credit evaluation and technology- enabled portfolio monitoring are improving operational efficiency and reducing turnaround times. These advancements areenabling lenders to deliver a faster.more seamless customer experience while strengthening underwriting standards and risk management practices.

Outlook

The outlook for Indias Loan Against Property market remains positive, supported by sustained demand from MSMEs, self- employed individuals and small businesses, alongside the increasing preference for secured lending across the financial sector. Continued formalisation of the economy, wider adoption of digital lending technologies and improving financial records are expected to further expand access to credit and strengthen borrower confidence.

As lenders continue to prioritise portfolio quality, disciplined underwriting and technology-driven credit assessment, the LAP segment is well positioned to maintain sustainable longterm growth while playing an increasingly important role in supporting entrepreneurship, business expansion and Indias evolving secured credit landscape.

Source: RBI, SIDBI, CRISIL, ICRA, CareEdge, Ministry of MSME. and Economic Survey2025-26

Business Overview

FY 2025-26 was another year of steady progress for Mangal Credit and Fincorp Limited. Supported by healthy demand for secured retail credit and disciplined business execution, the Company recorded total disbursements of 783,469 lakh during the year, while its loan book grew to 742,868 lakh, reflecting a robust 46% year-on-year increase.

Growth was accompanied by a continued focus on portfolio quality and responsible lending. With prudent underwriting and consistent collection efforts, the Company maintained a Gross NPA of 1.29%, demonstrating the resilience of its lending model even as the business expanded. Today, Mangal Credit and Fincorp Limited serves over 4,875 customers through a network of 30 branches, further strengthening its presence across its operating markets.

The Company also continued to enhance its operating processes, improve customer service, and build a stronger foundation for future growth. With a diversified secured lending portfolio, experienced leadership, and a disciplined approach to execution, Mangal Credit and Fincorp Limited remains well positioned to pursue sustainable growth while creating lasting value for all stakeholders.

MSMEs form the backbone of Indias economy, driving entrepreneurship, employment, and economic activity across the country. Access to timely finance remains critical for their growth, making this segment an important focus area for Mangal Credit and Fincorp Limited.

During the year, the Company continued to strengthen its presence in the MSME lending business by expanding its distribution network to 6 new branches across 2 states. This wider reach, combined with a customer-centric approach and prudent credit assessment, enabled the Company to serve a growing base of businesses across its operating markets.

As on March 31,2026, the MSME loan portfolio stood at 710,822 lakh, accounting for 26% of the Companys total Assets Under Management (AUM). The portfolio continued to demonstrate healthy asset quality, supported by disciplined underwriting and consistent collection efforts. Going forward, the Company remains focused on expanding its MSME portfolio responsibly while supporting the growth aspirations of Indias small businesses.

Gold Loan

The Gold Loan business has been one of the strongest growth engines for Mangal Credit and Fincorp Limited. Over the last three years, the portfolio has expanded at a healthy CAGR of 61% and demonstrates the Companys ability to build a scalable and resilient lending business.

As on March 31,2026, the Gold Loan portfolio stood at 720,813 lakh, registering a growth of 70% over the previous year and accounting for 49% of the Companys total AUM. Growth was supported by a multi-channel sourcing model that combines branch-based lending, Loan-at-Home services, and digital channels, making credit more accessible and convenient for customers.

With an expanding branch network, deeper customer relationships, and a differentiated distribution model, the Gold Loan business continues to strengthen its presence across existing markets while supporting the Companys overall growth.

Loan Against Property

Loans Against Property (LAP) continues to be an important financing solution for Indias MSMEs, enabling businesses to unlock the value of their assets without disrupting ownership. The product serves a wide range of funding requirements, including business expansion, working capital, and other growth-oriented investments.

Mangal Credit and Fincorp Limited has steadily expanded its presence in this segment with astrong focus on Tier II and Tier III markets where demand for secured business credit continues to grow. A relationship-led approach, combined with prudent credit assessment and flexible loan structures, has enabled the Company to build a high-quality secured lending portfolio.

As on March 31, 2026, the LAP portfolio stood at 79,651 lakh, registering a growth of 79% over the previous year and contributing 23% to the Companys total AUM. Portfolio quality remained healthy during the year, supported by disciplined underwriting and consistent collection efforts.

Personal Loan

The Personal Loan business caters to the financing needs of self-employed individuals, professionals, and salaried customers seeking quick and convenient access to credit. The Company follows a selective lending approach, balancing business growth with disciplined risk management and portfolio quality.

As on March 31, 2026, the Personal Loan portfolio stood at 71,031 lakh, contributing 2% to the Companys total AUM. During the year, the portfolio grew by 71%. The Company also continued to strengthen its digital lending capabilities, with a greater focus on mobile application-based personal loans to simplify the borrowing experience and reduce turnaround times. Supported by prudent underwriting and effective collection practices, the business continues to maintain a disciplined approach to unsecured lending.

Key Developments in FY 2025-26

1. Expansion into New Markets

The Company expanded its branch network across Maharashtra, Gujarat and Rajasthan, strengthening its presence in high-potential markets. This wider footprint has helped it get closer to customers, particularly MSMEs, self- employed individuals and retail borrowers, while laying the foundation for future growth.

2. Stronger Funding Platform

The Company broadened its funding base by securing additional bank facilities and raising capital through listed, rated secured NCDs. Continued promoter support further strengthened the balance sheet, providing greater financial flexibility to support expansion.

3. Broader Product Offering

During the year, the Company introduced partially secured loan products backed by assets such as LIC policies, machinery, shares, deposits and mutual funds. These additions expanded the range of financing solutions available to customers while maintaining a disciplined approach to credit and risk management.

4. Enhanced Governance and Compliance

The Company continued to strengthen its governance framework by enhancing internal controls, lending practices and customer protection measures. It also aligned its processes with evolving RBI guidelines, reinforcing its focus on responsible and transparent lending.

5. Entry into Insurance Distribution

Registration as an IRDAI Corporate Agent marked an important strategic milestone. This opens up opportunities to offer health, life and general insurance products, creating an additional avenue to deepen customer relationships, subject to regulatory approvals.

6. Better Customer Experience

The Company focused on making the borrowing journey simpler and faster by streamlining documentation, improving loan turnaround times and strengthening customer su pport and grievance resolution. Continued investment in technology and process improvements also enhanced operational efficiency.

Key Challenges Faced in FY 2025-26

1. Balancing Growth with Asset Quality

As the loan portfolio expanded, maintaining asset quality remained a key priority. The Company continued to focus on prudent underwriting, disciplined collections and close portfolio monitoring to ensure that growth did not come at the expense of credit quality.

2. Managing Higher Cost of Funds

A changing interest rate environment led to higher borrowing costs during the year. The Company responded by diversifying its funding sources, strengthening lender relationships and actively managing its asset-liability profile to protect margins.

3. Intensifying Competition

Competition from banks, NBFCs and fintech players continued to increase across the secured lending market. This required the Company to differentiate itself through faster service, stronger customer relationships and consistent execution.

4. Scaling Operations Efficiently

The ongoing expansion of branches, technology infrastructure and workforce increased operating costs. Ensuring that growth remained efficient and well-governed across all locations was an important management focus during the year.

5. Keeping Pace with Regulatory Changes

The regulatory landscape for NBFCs continued to evolve, with greater emphasis on customer protection, fair lending and compliance. The Company invested in strengthening its governance, processes and customer-facing practices to remain fully aligned with these expectations.

6. Managing Gold Price Volatility

Fluctuations in gold prices continued to influence the gold loan business by affecting both customer demand and collateral values. The Company addressed this through prudent valuation practices, conservative lending norms and continuous monitoring of collateral.

Financial Analysis

Particulars (Tin lakh)	FY 2025-26	FY 2024-25
Total Revenue from Operation	6,990	4,958
Interest Income	6,701	4,804
Interest Expense	3,192	1,839
Total Operating Expenditure	1,389	1,068
Profit Before Tax	2,086	1,821
Net profit after tax before OCI	1,531	1,307
Total PAT Inclusive OCI & Exceptional Item	2,078	1,454
EPS (In 7.)	7,46	6.68
Networth	16,617	13,997
Cash and Cash Equivalents	2,715	1,184
AUM	42,868	29,456
CRAR	33.84%	41.15%
Debt to Equity	1.90x	1.41
Interest Income to Average Loan assets	18.78%	18.55%
Total Operating Expenditure to Average AUM	3.84%	4.12%
ROA	4.29%	5.06%
GNPA	1.29%	1.19%
NNPA	0.78%	0.66%
Provision Coverage Ratio (PCR) includes Management Provision	82.64%	84.42%

• Total Revenue saw a41% growth, reaching 76,990 lakh in FY 2025-26 as compared to 74,958 lakh in FY 2024-25.

• Interest Income from Operations increased by 39% to

Rs. 6,701 lakh in FY 2025-26 from Rs.4,804 lakh in the prior year.

• Profit After Tax (PAT) before OCI rose to Rs.1,531 lakh in FY 2025-26, up from Rs.1,307 lakh in FY 2024-25.

• Loan Assets under Management (AUM) grew by 46% year-over-year, amounting to Rs.42,868 lakh in FY 2025-26, compared to Rs.29,456 lakh in FY 2024-25.

• Net Interest Income (Nil) was up by 24%, totalling Rs.3,756 lakh in FY 2025-26 against -13,035 lakh in the previous year.

• Gross Non-Performing Assets (GNPA) increased to 1.29% in FY 2025-26 from 1.19% in FY 2024-25.

• Net Non-Performing Assets (NNPA) increased to 0.78% in FY 2025-26 versus 0.66% in FY 2024-25.

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

The Companys Return on Net Wortli decreased from 10.90% in FY 2024-25 to 9.97% in FY 2025-26. The decrease was primarily due to a proportionately higher increase in net worth as compared to the increase in profitability during the year, from \ 1,454 lakh in FY 2024-25 to x2,078 lakh in FY 2025-26. The consistent accretion of profits to reserves also resulted in growth in Net Worth from Rs.13,997 lakh in FY 2024-25 to -116,617 lakh in FY 2025-26. The improvement in RoNW demonstrates the Companys ability to generate enhanced returns for shareholders through efficient utilisation of capital and sustained earnings growth.

Risk Management

Anticipated Challenge	Risk Description	Mitigation Strategy
Credit &Asset Quality Risk	Weakening borrower repayment capacity, fraud, economic slowdown or collateral shortfalls may increase delinquencies, NPAs and credit losses.	Conservative underwriting, collateral-based lending, strict LTV discipline, early-warning monitoring, regular portfolio review and robust collection practices.
Liquidity & Funding Risk	Funding constraints or liquidity mismatches may affect business continuity, growth and financial flexibility.	Board-approved liquidity policy, ALCO oversight, diversified funding, calibrated NCD issuances, prudent liquidity buffers, ALM monitoring and disciplined liability management.
Interest Rate Risk	Asset-liability repricing mismatches may impact margins and profitability during changing interest rate cycles.	ALCO oversight, balanced asset-liability positioning, duration gap analysis, interest rate sensitivity monitoring and risk-based pricing.
Market Risk	Market fluctuations may affect investment values, funding costs and future cash flows.	Prudent investment policy, portfolio duration management and periodic market risk assessment.
Regulatory & Conduct Risk	Regulatory changes and evolving compliance requirements may increase operational and governance risks.	Strong compliance framework, fair practices, customer disclosures, grievance redressai, outsourcing oversight and periodic policy reviews.
Operational Risk	Process failures, human errors, system disruptions or external events may lead to financial and reputational losses.	Standard operating procedures, maker-checker controls, segregation of duties, transaction monitoring, internal audits, contingency planning and employee training.
Technology, Data & Cybersecurity Risk	Cyber threats, data breaches and technology failures may disrupt operations and compromise information security.	Investment in secure digital infrastructure, cybersecurity controls, access management, data protection, vendor oversight, disaster recovery and employee awareness.
Increasing Competition	Intensifying competition may pressure customer acquisition, pricing, margins and market share.	Customer-centric service, faster turnaround, transparent pricing, digital capabilities, product innovation and market expansion.
Geographic Concentration Risk	Regional concentration may expose the Company to localized economic or environmental disruptions.	Geographic diversification, phased expansion and disciplined local underwriting.
Gold Price & Collateral Risk	Gold price volatility or collateral valuation changes may reduce security coverage and increase credit risk.	Conservative LTVs, prudent valuation, periodic collateral reviews, insurance where applicable and timely recoveries.

Opportunity

Financial Inclusion &Tier-2+ Expansion

Indias rising digital adoption, smartphone penetration, and improving financial literacy across rural and semi-urban markets open vast opportunities to serve the underserved. Expanding credit access in these regions can drive inclusive growth while unlocking a large, untapped borrower base.

Rising MSME & Retail Credit Demand

The continued expansion of Indias MSME ecosystem and growing aspirations in retail lending segments present strong avenues for growth. The Companys diverse product suite- ranging from personal and professional loans to LAP, vehicle finance, and gold loans—positions it well to capitalise on this rising demand.

Digital Transformation & Fintech Collaborations

Adoption of Al-driven underwriting, data analytics, and mobile- first engagement platforms, along with strategic partnerships with fintechs, will enhance operational efficiency, lower acquisition costs, and enable the delivery of faster, more personalised financial solutions.

Product Innovation & Portfolio Diversification

Introducing new financial solutions—such as education loans, consumer durables financing, insurance-linked offerings, and working capital products—provides an opportunity to diversify income streams, deepen customer relationships, and reinforce market positioning.

Affordable LAP (Loan Against Property)

The growing demand for small-ticket, affordable LAP solutions in semi-urban and emerging markets offers the Company an attractive avenue to empower individuals and small businesses, while maintaining a secured lending focus that strengthens asset quality.

Emerging Opportunities in EV Financing

Indias accelerating electric vehicle adoption, supported by government incentives and rising consumer awareness, creates a strong growth opportunity. Building specialised financing products for two-wheelers, three-wheelers, and commercial EVs will enable the Company to capture early- mover advantage in this high potential segment.

Threats

Regulatory & Compliance Pressures

Evolving NBFC regulations and heightened compliance requirements could materially impact operational dynamics, increase costs, and demand continuous adaptation to new regulatory frameworks.

Competitive & Technological Disruptions

The rapid rise of banks, fintech players, and digital-first NBFCs offering faster decision-making, personalised customer journeys, and aggressive pricing strategies poses a significant risk to customer retention, lending margins, and market positioning.

Macroeconomic & Credit Risks

Global geopolitical uncertainties, inflationary pressures, and domestic economic slowdowns, particularly in MSME and allied sectors, may dampen credit demand while elevating credit risk, leading to potential stress on asset quality and NPA management.

Portfolio Quality and Delinquency

The Company has implemented a rigorous risk management framework encompassing risk identification, assessment, treatment, monitoring, and reporting. This comprehensive approach has significantly reduced delinquencies.

The Companys Gross Non-Performing Assets (GNPA) ratio stands at 1.29% in the current year as against 1.19% in FY 2024- 25, and a slight increase in Net NPA from 0.66% in FY 2024-25 to 0.78% in FY 2025-26. The increase reflects the challenging operating environment and evolving credit conditions across certain borrower segments. Moving forward, MCFL is committed to further enhancing its portfolio monitoring, database management, and information reporting capabilities.

Human Resources

People are our key pillars of strength. This belief was further strengthened as our people showed tremendous resilience and extraordinary commitment during the pandemic times to bring the Company back to its core performance. The company has adopted people practices that enable us to attract and retain talent in an increasingly competitive market; and to foster a work culture that is always committed to providing the best opportunities to employees to realize their potential. The company is committed as an equal opportunity employer. The company works on concept of ‘Do More Earn More and rewards people for their performance and contribution which are anchored on metricized work deliverables and directly reflected in their earning potential.

MCFL has a strong orientation to learning and development. All employees, from a new joiner to a tenured one, are provided tailored learning opportunities as per their role, level, and specific focus area. In line with its business transformation strategy, the Company has made significant changes to its employee policies and practices. Performance Management is tlie most critical tool in the Company to drive performance and productivity & accordingly given utmost importance. This is the most important part of FIR, where a manager gives his team members feedback, evaluates their work, and compensates them appropriately. Goal setting, self-assessment, managerial evaluation and review, and overall assessment with feedback are all parts of the annual performance management process. Along with its growth strategy, the Company is developing an effective human resource strategy to assist it in managing its growth. The number of employees employed as on 31^st March, 2026 stood at 142.

Internal Control System and its Adequacy

The Company has adopted policies and procedures for the governance of orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. The Companys internal control systems are commensurate with the nature of its business, the size and complexity of its operations. The internal control system is supported by an internal audit process for reviewing the design, adequacy, and efficacy of the Companys internal controls, including its systems and processes and compliance with regulations and procedures. Internal Audit Reports are discussed with the Management and are reviewed by the Audit Committee of the Board, which also reviews the adequacy and effectiveness of the internal controls in the Company.

Key Regulatory Ratios

MCFLs key regulatory ratios compared to the minimum requirements of the RBI are provided in table below -

	Actual as on March 31,2026	As per RBI Stipulation
CRAR-Tier1	33.84%	15%
CRAR-Overall	33.84%	15%
Leverage Ratio	1.9	7
ALM (Cumulative)	8.94%
0-7 Days	96%	-10%
8-15 Days	76%	-10%
16-30 Days	24%	-20%

Cautionary Statement

Some forward-looking statements in this Management Discussion and Analysis Report may be based on various assumptions about the companys current and future business strategies as well as the environment in which it operates. Due to risk and uncertainties, actual results could significantly or materially differ from those that were indicated or inferred. These risks and uncertainties include the impact of domestic and international political and economic circumstances, the volatility of interest rates and the stock market, new rules and government initiatives that could have an impact on the Companys businesses, and the capability to carry out its business strategies. The Company does not have any obligation to amend these statements; the information provided here is current as of the date indicated. Even though the accuracy or completeness cannot be guaranteed, the Company has gathered all market data and other information from sources it believes to be dependable or from its own internal estimations.