Mehta Securities Ltd Management Discussions

To, The Members/ Shareholders,

Economic Review

Global Economy

In 2024-25, the global economy showcased remarkable resilience despite facing persistent inflationary pressures, high interest rates, and heightened geopolitical uncertainties. As reported by the International Monetary Fund (IMF), the worlds GDP growth held steady at 3.2%, matching the pace of 2023-24. Although this figure remained slightly below the pre-pandemic average of 3.8%, it underlined the inherent strength of economic fundamentals. Advanced economies recorded a modest improvement, with growth rising from 1.6% in 2023 to 1.8% in 2024, while large emerging markets like India continued to demonstrate strong momentum, helping anchor global stability.

Several favorable macroeconomic indicators reinforced this stability. Labor markets in most major economies stayed firm, with unemployment rates remaining low and nominal wages increasing, especially in service-oriented industries. This rise in income sustained household spending, offsetting some of the drag from earlier price shocks. On a brighter note, global inflation witnessed a downward trajectory—slipping from 6.8% in 2023 to an estimated 5.9% in 2024-25, with further moderation to 4.5% projected in 2025-26.

The smooth shift from persistently high inflation to a more stable price environment, without triggering widespread recessionary effects, stood out as a major accomplishment in macroeconomic management. This progress gave central banks the flexibility to recalibrate from aggressive monetary tightening toward more balanced approaches, laying the groundwork for sustainable long-term growth.

Financial markets mirrored these evolving dynamics. Stocks gained moderately on the back of stronger earnings visibility and easing price pressures, while bond markets steadied as interest rate forecasts normalized. Nonetheless, volatility continued, driven by ongoing geopolitical risks, trade disputes—particularly between the U.S. and China—and uneven growth across different regions. Encouragingly, strong capital investments, rapid digital adoption, and resilient consumer activity continued to instill confidence.

Looking ahead to 2025-26, the outlook remains cautiously optimistic. With steady macroeconomic fundamentals and improving conditions in both real and financial markets, the global economy appears well-positioned to sustain its forward momentum, albeit amid lingering external uncertainties

Indian Economy

Over the past decade, India has emerged as the fastest-growing major economy, with its GDP rising from US$ 2.1 trillion in 2015 to US$ 4.3 trillion in 2025. This remarkable growth outpaces all other major economies, firmly establishing India as a global economic powerhouse.

The expansion has been driven by a combination of structural reforms, technological progress, and a favorable demographic profile. Strong emphasis on digital infrastructure, financial inclusion, and manufacturing has boosted domestic productivity, while the expanding services sector—particularly IT and financial services—has continued to play a pivotal role. Large-scale public investments in infrastructure, coupled with a push for self-reliance in key industries, have further accelerated growth momentum.

India now stands on the verge of surpassing Japan (GDP US$ 4.4 trillion) to become the worlds fourth-largest economy by the third quarter of 2025. At the current pace, it is also projected to overtake Germany (GDP US$ 4.9 trillion) by 2027–28, positioning itself as the third-largest economy globally. This rise is supported by prudent macroeconomic policies, a resilient banking system, and steady fiscal consolidation. Inflation has largely remained within the RBIs target range despite occasional food price pressures, while the financial sector shows renewed strength with non-performing assets at multi-year lows.

Even amid global uncertainties, Indias GDP is forecast to grow at 6.5% in FY2024–25, underscoring the robustness of domestic demand. With global supply chains undergoing a shift, India is well-placed to strengthen its role as a manufacturing hub for international consumption, further enhancing its global economic standing.

Industry Structure and Developments

Broking industry has undergone was changes and evolvement in past decade led by disruptions from discount brokers, buoyancy in equity markets, digitalization and increased interest among various investor groups. Indian brokerage industry has been undergoing structural shift from percentage led business model to flat brokerage & subscription-based model. Discount brokers continued to gain majority of incremental clientele as well as market volume.

Recent trends clearly suggesting consumer preference shifting towards tech-oriented less service drive product offering i.e. discount brokerage plans, traditional brokers have now started launching their own discount plans in order to attract clients. We believe this is because of focused service offerings wherein traders need not bear cost burden of other services like advisory, research etc which is offered as a whole bunchy by traditional brokers. Top traditional brokers too have started to offer discount plans. Your company keeps seeking for opportunities in the capital market to capitalize on the dynamic industry trend.

Opportunities and Threats

Opportunities

• Increasing per-capita GDP

• Opportunity to cross sell services

• Opening of financial sectors in India along with introduction of innovative products

• Law retails penetration of financial services/product in India.

• Extensive distribution reach and strong brand recognition

• Changing demographic profile of the Country in the favor of the young

• Adequate capitalization to support medium-term growth plans.

Threats

• Regulatory Changes

• Execution risk

• Higher exposure to semi-formal and informal sector

• Competition from local and multinational players

• Inflationary pressure, slowdown in policy making and reduction in household saving in financial products

• Attraction and retention of human Capital

• Increasing competition from local and global players

• Online fraud & Scams

• Lack of Financial Knowledge

Risks and Concerns

The Companys performance remains inherently linked to macroeconomic factors and capital market growth trajectories. External variables such as international policy shifts, volatile commodity prices, fluctuations in global bond yields, and sector-specific disruptions, including banking and financial sector loopholes, continue to pose challenges. Nevertheless, Indias investor-friendly regulatory framework and positive investor sentiment offer resilience. The Company proactively addresses risks through robust compliance, strategic adaptability, and ongoing monitoring of global and domestic developments

Internal Control Systems and Their Adequacy

The Company has implemented proper system for safeguarding the operations/business of the Company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements.

The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. The Company has internal audit and verification at regular intervals. The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of company.

Discussion On Financial Performance with Respect to Operational Performance

The financial performance of the Company for the financial year 2024-25 is described in the Directors Report under the head "Financial Performance".

Material Developments in Human Resources

The cordial employer- employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

Cautionary Statement

Statement in this management discussion and analysis report, describing the Companys objectives, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws or regulations. Actual results may differ materially from those either expressed or implied. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Disclosure of Accounting Treatment

In preparation of financial statements, a treatment as prescribed in an Indian accounting standard has been followed.

	For and on behalf of Board of Directors,
	Sd/-	Sd/-
Place: Ahmedabad	Bhavna D. Mehta	Dhaval D. Sheth
Date : 06th September, 2025	Chairperson & Managing Director	Director
	(DIN: 01590958)	(DIN: 02418261)