Marg Techno-Projects Ltd Management Discussions

1. COMPANY OVERVIEW

Marg Techno Projects Limited (MTPL or the Company) is a public limited company incorporated under the Companies Act, 1956 on July 2, 1993. The Company is headquartered in Surat, Gujarat and its equity shares are listed on the Bombay Stock Exchange (BSE). The Company is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC) under Certificate of Registration No. 01.00071 dated November 4, 1998.

The Company is primarily engaged in providing financial services through a portfolio comprising unsecured personal loans, unsecured business loans and secured loans against gold jewellery. The Company continues to focus on responsible credit delivery, prudent underwriting, customer service and technology-enabled lending processes.

During FY 2025 26, the Company continued its transition towards a larger and more diversified lending platform, with particular emphasis on scaling its lending operations while maintaining appropriate controls over credit quality, liquidity and capital.

2. ECONOMIC AND INDUSTRY ENVIRONMENT

The Indian economy remained resilient during FY 2025 26, supported by domestic consumption, investment activity, improving financial-sector conditions and continued formalisation of economic activity. The Economic Survey 2025 26 highlighted the resilience of Indias growth environment and the increasing role of non-bank channels in meeting the financing requirements of the economy.

The financial services sector continued to benefit from increasing formalisation, greater penetration of digital financial services and rising demand for credit from individuals, self-employed borrowers and small businesses. At the same time, lenders continued to operate in an environment requiring disciplined credit underwriting, effective collections, prudent liquidity management and strong regulatory compliance.

The NBFC sector continues to play an important role in complementing the banking system by serving customer segments and geographies where differentiated underwriting, customer engagement and faster credit delivery can create value. The growing importance of non-bank financing channels provides opportunities for well-governed NBFCs with focused business models and disciplined risk management.

The Company believes that the medium- to long-term opportunity for NBFCs remains favourable, particularly in retail, self-employed and MSME-oriented lending, provided growth is supported by sound underwriting standards, adequate capital and robust risk-management systems.

3. INDUSTRY OUTLOOK

Indias financial ecosystem continues to evolve towards greater formalisation and technology-led delivery of credit. Increasing digital adoption, improved availability of customer information and expanding financial inclusion are creating opportunities for lenders to serve customers more efficiently.

The MSME and self-employed segments remain important contributors to Indias economic activity and continue to require timely access to formal credit. This creates a meaningful opportunity for specialised NBFCs capable of combining local market understanding with technology-enabled underwriting and monitoring.

Gold-backed lending also remains an important secured-credit segment because of its relatively simple collateral structure, customer familiarity and ability to provide liquidity to borrowers against an established asset. However, this segment requires disciplined collateral valuation, appropriate loan-to-value management, secure custody and continuous compliance with applicable regulatory requirements.

The Company intends to participate selectively in these opportunities while maintaining a balanced approach between growth and asset quality.

4. OPPORTUNITIES

4.1 Growth in Retail and Self-Employed Credit

The increasing formalisation of household and small-business financial activity presents opportunities for NBFCs to expand access to organised credit. Customers who may not always be adequately served by traditional banking channels can represent an important addressable market for appropriately designed NBFC products.

4.2 MSME and SME Financing

Small businesses and self-employed customers continue to require flexible and timely working-capital and business-financing solutions. The Company sees potential to further develop its MSME and SME lending capabilities through disciplined credit assessment and customer-centric products.

4.3 Gold-Backed Lending

Gold loans remain an important component of the Companys lending capabilities. The secured nature of the product can provide an additional avenue for controlled portfolio growth, subject to appropriate valuation, LTV discipline, documentation, custody and recovery processes.

4.4 Technology and Digital Lending

Technology continues to provide opportunities to improve sourcing, customer onboarding, credit assessment, documentation, collections and portfolio monitoring. The Company intends to progressively leverage technology to improve operational efficiency and customer experience while ensuring that digital initiatives remain subject to appropriate risk and regulatory controls.

4.5 Financial Inclusion

The Company believes that there remains considerable potential to expand formal credit access to underserved and underbanked customers. A combination of local market knowledge, responsible underwriting and technology-enabled delivery can enable the Company to participate in this opportunity in a measured manner.

5. CHALLENGES AND RISKS

The lending business inherently involves credit, liquidity, interest-rate, operational, regulatory, technology and concentration risks.

As the Company expands its loan portfolio, maintaining asset quality will remain a key management priority. Rapid growth without adequate underwriting, monitoring and collection infrastructure can increase credit costs and adversely affect profitability.

The unsecured lending portfolio requires particular focus on borrower selection, income assessment, repayment capacity, fraud prevention and collection effectiveness. Similarly, gold lending requires strict controls relating to valuation, custody, documentation, security and collateral realisation.

The Company also remains exposed to changes in regulatory requirements, funding costs, competitive intensity and broader economic conditions. Management continues to monitor these factors and believes that disciplined growth, adequate capitalisation and effective risk management are essential to sustainable expansion.

6. BUSINESS PERFORMANCE

FY 2025 26 was a year of significant expansion in the Companys lending operations.

The Companys gross loan portfolio increased from 32.55 crore as at March 31, 2025 to 57.71 crore as at March 31, 2026 , representing growth of approximately 77.3% . The increase reflects the expansion of the Companys lending activities during the year.

The portfolio at March 31, 2026 comprised approximately 52.55 crore of unsecured loans and 5.29 crore of secured loans , including gold loans. Standard assets stood at approximately 57.66 crore , while the balance comprised sub-standard and doubtful assets.

The increase in the loan book demonstrates the Companys ability to scale its lending operations. Going forward, management intends to place equal, if not greater, emphasis on the quality and sustainability of growth rather than growth in loan book size alone.

7. FINANCIAL PERFORMANCE

The Companys financial performance improved materially during FY 2025 26.

Revenue from operations was 683.69 lakh ( 6.84 crore) in FY 2025 26 compared with 520.25 lakh ( 5.20 crore) in FY 2024 25, representing growth of approximately 31.4% .

Interest income, which constitutes the principal component of the Companys operating income, increased from 503.50 lakh ( 5.04 crore) in FY 2024 25 to 672.41 lakh ( 6.72 crore) in FY 2025 26, representing growth of approximately 33.5% .

The Companys total income increased to 692.75 lakh ( 6.93 crore) from 540.75 lakh ( 5.41 crore) in the previous year.

Finance costs increased from 216.41 lakh to 265.54 lakh , reflecting the higher scale of the Companys borrowing and lending operations. Employee benefit expenses were 110.21 lakh , while depreciation, amortisation and impairment expenses were 13.33 lakh . Total expenses stood at approximately 535.56 lakh .

Profit before tax increased substantially to 157.19 lakh ( 1.57 crore) compared with 45.14 lakh ( 0.45 crore) in FY 2024 25. Profit after tax increased to 99.19 lakh ( 0.99 crore) from 41.33 lakh ( 0.41 crore) , representing growth of approximately 140% .

The improvement in profitability reflects the expansion of the lending business and growth in interest income, supported by the Companys strong management and controlled cost structure.

8. KEY FINANCIAL INDICATORS

Particulars	FY 2025 26FY 2024 25Change
Gross Loan Portfolio	57.71 crore	32.55 crore+77.3%
Interest Income	6.72 crore	5.04 crore	+33.5%
Revenue from Operations	6.84 crore	5.20 crore	+31.4%
Total Income	6.93 crore	5.41 crore	+28.1%
Profit Before Tax	1.57 crore	0.45 crore	+248.3%
Profit After Tax	0.99 crore	0.41 crore	+140.0%

Particulars	FY 2025 26FY 2024 25Change
Finance Costs	2.66 crore	2.16 crore	+22.7%
EPS	0.88	0.58	+51.7%

The audited financial statements report basic and diluted EPS of 0.88 per share for FY 2025 26 compared with 0.58 per share in FY 2024 25.

9. CAPITAL AND FUNDING

The Company strengthened its equity base during FY 2025 26. Paid-up equity share capital increased from 10.00 crore to 14.20 crore , with 42 lakh additional equity shares issued during the year.

Other equity increased substantially during the year. Securities premium increased from 1.60 crore to 18.40 crore , while the reserve maintained under Section 45-IC of the RBI Act increased from 47.57 lakh to 67.57 lakh .

As at March 31, 2026, total shareholders equity stood at approximately 34.62 crore , compared with approximately 12.64 crore as at March 31, 2025. The increase in the Companys capital base provides a stronger foundation for supporting future business growth while maintaining appropriate regulatory capital levels.

Borrowings, other than debt securities, stood at 26.96 crore as at March 31, 2026 compared with 22.09 crore as at March 31, 2025. The Company did not have any default in repayment of borrowings or interest.

The Companys debt-equity ratio improved materially from 1.76x to 0.78x , reflecting the substantial strengthening of the equity base during the year.

Management will continue to maintain a prudent approach towards leverage and funding diversification, with borrowing decisions aligned with portfolio growth, liquidity requirements and regulatory capital considerations.

10. ASSET QUALITY

Asset quality remains a key management priority as the Company scales its lending operations.

As at March 31, 2026, the Companys gross loan portfolio stood at 57.71 crore . Standard assets amounted to approximately 57.66 crore , while sub-standard assets amounted to 19.22 lakh and doubtful assets amounted to 60.28 lakh . Provisions reported against the portfolio amounted to 74.72 lakh .

Management believes that continued strengthening of underwriting, collection and portfolio-monitoring capabilities will be critical to maintaining asset quality as the loan book expands.

11. PORTFOLIO MIX

During FY 2025 26, the Companys portfolio experienced a significant shift towards unsecured lending.

At March 31, 2026, unsecured loans stood at approximately 52.55 crore , compared with 20.37 crore at March 31, 2025. Gold loans stood at approximately 5.11 crore , compared with 11.68 crore in the previous year.

The change in portfolio composition reflects the Companys increased focus on unsecured lending during the year. Given the higher inherent credit risk associated with unsecured lending, management will continue to focus on underwriting quality, borrower assessment, collection infrastructure, fraud controls and portfolio diversification.

The Company intends to maintain a balanced approach to secured and unsecured lending, based on risk-adjusted returns, customer demand, funding availability and regulatory requirements.

12. RISK MANAGEMENT

Risk management forms an integral part of the Companys business strategy.

The principal risks faced by the Company include:

Credit Risk

Credit risk represents the possibility of financial loss arising from a borrowers inability or unwillingness to meet contractual obligations. The Company manages this risk through borrower assessment, credit appraisal, documentation, repayment-capacity analysis, portfolio monitoring and collection processes.

Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its financial obligations as they fall due. The Company monitors cash flows, borrowing maturities and funding requirements to maintain adequate liquidity.

Interest Rate Risk

Changes in interest rates can affect borrowing costs, lending yields and margins. The Company monitors the maturity and pricing characteristics of its assets and liabilities and seeks to manage interest-rate exposure prudently.

Operational Risk

Operational risk may arise from inadequate or failed internal processes, people, systems or external events. The Company continues to strengthen its processes, controls, technology infrastructure and monitoring mechanisms.

Regulatory and Compliance Risk

As an RBI-regulated NBFC and listed entity, the Company operates within a comprehensive regulatory framework. Compliance with applicable RBI, SEBI, Companies Act and other statutory requirements remains a key management priority.

Technology and Cyber Risk

Increasing digitisation of financial services creates opportunities for efficiency but also increases exposure to cyber threats, data-security risks and technology failures. The Company continues to focus on appropriate technology controls, access management and data protection practices.

13. INTERNAL CONTROL SYSTEMS

The Company maintains an internal control framework commensurate with the size and nature of its operations.

The internal control environment includes controls relating to financial reporting, lending operations, collections, authorisations, documentation, accounting, regulatory compliance and safeguarding of assets.

The Companys internal audit function provides an additional layer of oversight and assists management and the Board in identifying areas requiring improvement. The statutory auditors have also reported on the adequacy and effectiveness of internal financial controls over financial reporting.

The Company continues to strengthen its internal control framework as its business and loan portfolio expand.

14. CAPITAL ADEQUACY AND FINANCIAL DISCIPLINE

The Company maintains an actively managed capital base to support the risks inherent in its business and monitors capital adequacy in accordance with applicable RBI requirements. The audited financial statements state that the Company complied with applicable externally imposed capital requirements during the reporting period.

The significant increase in shareholders equity during FY 2025 26 has improved the Companys financial leverage profile and provides greater capacity to support measured growth.

The Company remains committed to maintaining adequate capital buffers and ensuring that future expansion is supported by an appropriate combination of internal accruals and external funding.

15. HUMAN RESOURCES

People remain an important component of the Companys growth and operating capabilities.

As the lending platform expands, the Company recognises the importance of strengthening capabilities across credit, sales, collections, operations, compliance, technology and risk management.

The Company continues to focus on employee development, accountability, process orientation and alignment of individual performance with organisational objectives.

Employee benefit expenses during FY 2025 26 amounted to 110.21 lakh , compared with 107.55 lakh in FY 2024 25.

16. TECHNOLOGY AND DIGITAL TRANSFORMATION

Technology is increasingly important to the Companys lending model.

The Company intends to progressively use technology across customer onboarding, documentation, credit assessment, loan servicing, collections, portfolio monitoring and management information systems.

The objective is not merely to digitise existing processes but to create a more efficient, controlled and scalable operating model. Technology adoption will continue to be undertaken with due consideration to information security, customer protection, data privacy and applicable regulatory requirements.

17. CORPORATE GOVERNANCE AND REGULATORY CULTURE

The Company recognises that sustainable growth in financial services requires strong governance, transparency and accountability.

The Board and management remain committed to maintaining appropriate governance standards and ensuring compliance with applicable statutory and regulatory requirements.

The Companys approach is to pursue growth while maintaining appropriate checks and balances across credit, operations, finance, compliance and risk functions.

The Company also recognises that responsible lending and customer protection are fundamental to maintaining long-term stakeholder confidence.

18. OUTLOOK AND WAY FORWARD

FY 2025 26 represents an important phase in the Companys development. The significant expansion in the loan portfolio, improvement in operating income and substantial increase in profitability demonstrate the Companys ability to scale its lending activities.

Going forward, the Companys strategy will focus on quality growth, stronger risk management, prudent capital utilisation and improved operating efficiency .

The Company intends to further develop its presence in retail, self-employed, MSME and SME lending, while continuing to evaluate opportunities in secured lending, including gold-backed finance.

Managements focus will remain on:

Scaling the loan portfolio in a measured manner; Improving customer acquisition and retention; Strengthening credit underwriting and portfolio monitoring; Improving collection efficiency; Maintaining appropriate asset-quality standards; Diversifying funding sources; Maintaining adequate capital and liquidity buffers;

Leveraging technology to improve scalability and operational efficiency; and

Ensuring continued compliance with applicable regulatory requirements.

The Company believes that sustainable value creation will depend not merely on the pace of loan-book growth, but on the Companys ability to generate risk-adjusted returns while maintaining strong asset quality, adequate capital and disciplined governance .

Management remains cautiously optimistic about the Companys medium- to long-term prospects and believes that the platform developed during FY 2025 26 provides a sound foundation for the next phase of growth.

19. CAUTIONARY STATEMENT

This Management Discussion and Analysis contains certain statements relating to the Companys future business prospects, growth plans, strategies and expectations which may constitute forward-looking statements. These statements are based on current expectations, assumptions and available information and are subject to various risks and uncertainties.

Actual results may differ materially from those expressed or implied in such forward-looking statements due to factors including changes in economic conditions, interest rates, credit quality, regulatory environment, competition, availability and cost of funds, customer behaviour, technology risks and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of future events or otherwise, except as may be required under applicable laws and regulations.