MOS Utility Ltd Management Discussions

Source: IMF, World Economic Outlook, April 2026 and July 2026 Update.

The IMFs broader message for the year was that countries need to work together to maintain a stable and predictable trade environment while addressing policy gaps and structural imbalances at home. For India, an economy with a large domestic demand base, limited direct exposure to the conflict zone and a rapidly deepening digital services sector, this environment has been comparatively benign.

India retained its position as the fastest-growing major economy during FY 2025-26. As per the Provisional Estimates released by the Ministry of Statistics and Programme Implementation, real GDP grew 7.7% in FY 2025-26 against 7.1% in FY 2024-25, reaching Rs 323.12 lakh crore at constant prices. Nominal GDP rose 8.9% to Rs 346.36 lakh crore. Real Gross Value Added grew 7.9%, up from 7.3% in the preceding year.

These estimates are the first full-year numbers on the new national accounts series, the base year having been revised from 2011-12 to 2022-23 in February 2026. The revision aligns Indias national accounts with the structure of a rapidly changing economy and improves the coverage of newer services, including digital services.

Source: MoSPI, Provisional Estimates of Annual GDP for FY 2025-26, June 2026.

Growth was broad-based. Manufacturing expanded 10.7% against 9.3% a year earlier, and the contact-intensive trade, repair, hotels, transport and communication segment accelerated to around 11% from 6.6%. Gross fixed capital formation, the principal proxy for investment activity, grew 8.2% against 6.4%, pointing to continued capacity creation and infrastructure build-out. Financial, real estate and professional services again grew in double digits.

Monetary conditions remained supportive. Following a cumulative 150 basis points of easing between February and August 2025 and a further 25 basis point cut in December 2025, the Reserve Bank of India held the repo rate at 5.25% through the reviews in 2026, with the standing deposit facility at 5.00% and the marginal standing facility and Bank Rate at 5.50%, and retained a neutral stance. Inflation stayed benign for most of the year. For FY 2026-27, the Reserve Bank has projected real GDP growth of 6.6%, moderating from the FY 2025-26 outturn on account of geopolitical risk and monsoon-related uncertainty.

Indias transition to a digital-first economy continued to gather pace. The Governments vision of presence-less, paperless and cashless transactions, backed by consent, under the Digital India programme has now been substantially realised in the payments layer. Unified Payments Interface processed 24,161.69 crore transactions worth Rs 314.23 lakh crore during FY 2025-26, against 18,586.60 crore transactions worth Rs 260.56 lakh crore in FY 2024-25. The registered user base stood at 55.49 crore as at June 2026. India today accounts for close to half of global real-time payment transaction volumes. UPI completed ten years of operations in April 2026, over which period annual volumes have risen roughly twelve-thousand-fold. Person-to-merchant transactions account for a little under two-thirds of volumes, and the overwhelming majority of merchant payments are for small tickets, which is precisely the segment in which assisted, agent-led fintech models such as the Companys operate.

India is home to well over 2,000 active fintech ventures and has produced one of the largest cohorts of fintech unicorns outside the United States and China. Funding of more than USD 2.2 billion was committed across over 100 deals in the first half of calendar 2026, with lending and payments together attracting the bulk of that capital and a clear tilt towards later-stage, revenue-visible businesses. Two fintech public issues and a large secondary transaction during the same period indicate a maturing market in which liquidity and exits are becoming as important as primary fundraising.

The regulatory cycle has been the defining feature of the past two years. The Reserve Banks Digital Lending Directions, tightened payment aggregator norms, and successive strengthening of transaction security have raised the compliance bar. The effect has been

consolidating: well-capitalised platforms with genuine compliance infrastructure have gained share, while businesses that depended on regulatory arbitrage have exited. For an established, regulated participant such as MOS Utility, this shift is a structural advantage.

Digital lending has consolidated into a single, more transparent ecosystem, with lenders, analytics providers and regulators operating on integrated platforms and clearer disclosure, data-storage and recovery norms. Distribution is increasingly moving to tier-ll and tier- ill markets, where assisted models retain a decisive advantage over app-only ones.

InsurTech continues to attract investment, with artificial intelligence and machine learning enabling personalised cover, faster underwriting and quicker claims settlement. WealthTech has broadened well beyond the metros, with advisory, broking and financial planning services being adopted by first-time investors in smaller cities.

Embedded finance is the clearest structural trend of the year: payments, credit, insurance and investment products are increasingly distributed through platforms whose primary business is something else. Payment platforms have evolved into financial super-apps, using transaction relationships and data to cross-sell credit, insurance and investments, and thereby improving unit economics. Artificial intelligence has moved from pilot to production in fraud detection, risk scoring, reconciliation and customer servicing. Government-led initiatives, including the Inter-Ministerial Steering Committee on Fintech and GIFT City, continue to support a policy- enabled environment, and the Union Budget for 2026-27 increased outlays on cybersecurity, payment resilience and compliance technology.

The Indian banking sector continued to expand through FY 2025-26, supported by strong economic growth, rising disposable incomes and easier access to credit. Deposit mobilisation remained the principal constraint on credit growth for much of the year, with term deposits outpacing current and savings account balances and the credit-to-deposit ratio remaining elevated. The sustained easing cycle of 2025 and the pause through 2026 have kept funding costs stable and supported transmission to borrowers, with externally benchmarked loans repricing faster than MCLR-linked facilities.

Digital adoption within the banking system deepened further, with the number of banks live on UPI continuing to rise and the platform now accounting for the large majority of retail digital payment volumes. The Reserve Bank has advanced its Framework for Responsible and Ethical Enablement of Artificial Intelligence in finance, which seeks to harness artificial intelligence in financial services while managing model, governance and infrastructure risk. Alongside this, the National Payments Corporation of India has issued the Comprehensive UPI Information Security Framework and a Mobile Application Security Framework, and has introduced risk-based transaction limits, safeguards against unauthorised mobile number changes and stronger application security requirements. These measures raise the operating standard for every participant in the ecosystem, and the Company has aligned its systems accordingly.

Indias travel and tourism sector maintained strong momentum. As per the World Travel & Tourism Council, the sector contributed USD 263.6 billion to the Indian economy in 2025 and supported 46.2 million jobs, growing 7.3% against a global average of 4.1%. For 2026, the Council projects growth of 8.5%, taking the contribution to USD 286.1 billion, employment to 48.1 million and the sectors share of GDP to 6.7% from 6.6%. Over the coming decade the sector is forecast to nearly double to USD 527 billion, moving India from the tenth-largest travel and tourism economy in the world to fourth. Domestic travel remains the mainstay of this growth, which is directly relevant to the Companys assisted travel booking business in smaller towns.

The logistics sector continues to expand on the back of infrastructure status, the National Logistics Policy and PM GatiShakti, and accelerating digital adoption through the Unified Logistics Interface Platform. Industrial and warehousing absorption remains strong, and the formalisation of last-mile delivery and cash-handling continues to create adjacencies for agent-led networks that already handle cash and documentation at the retail point.

Indias general insurance industry closed FY 2025-26 with gross direct premium income of about Rs 3.36 lakh crore, up 9% year on year, with gross written premium up 10% to about Rs 3.44 lakh crore. Private insurers, including standalone health insurers, led the expansion. Motor and health together continue to account for over 70% of sector premiums. Industry commentary points to similar high single-digit growth in FY 2026-27, with sharper focus on underwriting discipline, and longer-range forecasts suggest premiums could rise from about Rs 3.6 trillion in 2026 to about Rs 5.4 trillion by 2030. Low penetration outside the metros continues to make assisted, physically supported distribution the most effective route to first-time buyers, which is the segment the Company serves.

Cash collections nonetheless remain significant in semi-urban and rural India. This is not a transitional inefficiency to be designed away but the core of the Companys addressable market: the last-mile agent converts cash into a compliant digital transaction, and earns on doing so. As smartphone penetration widens, auto-pay adoption grows and biller onboarding becomes mandatory, the segment is expected to sustain double-digit growth, with artificial intelligence adding predictive consumption alerts, smart reminders and fraud detection to both the consumer experience and biller collection efficiency.

• Growing digital economy: sustained expansion of digital financial services in India continues to widen the addressable market.

• Expansion into new markets: significant headroom remains in under-served rural and semi-urban geographies where assisted models outperform app-only distribution.

• Technological advancement: artificial intelligence, machine learning and analytics can be applied to risk, fraud detection, reconciliation, servicing and agent productivity.

• Digital public infrastructure: UPI, Aadhaar-based authentication and the Account Aggregator framework lower onboarding cost and enable new products on the existing agent base.

• Government initiatives: continued policy support for digital payments and financial inclusion, and higher budgetary outlays on payment resilience and compliance technology.

• Regulatory consolidation: a higher compliance bar favours established, regulated participants and reduces competition from unregulated operators.

• Rising financial literacy: growing awareness of digital financial services supports adoption of higher-value products through the existing network.

• Intense competition: strong competition from established financial institutions, large payment platforms and newer fintech entrants.

• Regulatory change: further changes in payments, lending or data regulation could require operational restructuring and additional compliance cost.

• Cybersecurity risk: increased exposure to cyber-attack, data breach and transaction fraud as the digital footprint expands.

• Margin compression: aggressive pricing and the persistence of zero-MDR arrangements in parts of the payments stack constrain per-transaction economics.

• Geopolitical and economic uncertainty: conflict-driven commodity price volatility and slower global growth could affect consumer spending and service uptake.

• Technological obsolescence: rapid change could render existing platforms and service architectures outdated if reinvestment is not sustained.

MOS Utility Limited is an established participant in the Indian digital fintech market, operating a unified open API and wallet platform that brings banking, utility, travel, entertainment and insurance services onto a single interface for its distribution network. The Companys model converts ordinary retail locations into fintech service points, enabling agents to offer money transfer, Aadhaar- enabled payment services, micro ATM, cash management, utility bill payments and recharges, travel bookings and insurance to customers who would otherwise remain outside the formal digital economy.

The Companys distribution network of agents, distributors, master distributors and MOS Seva Kendras extends across India, including rural and remote locations. This physical last mile, combined with a single technology platform, is the Companys principal source of differentiation: it delivers a seamless experience for the end customer while maximising the earning potential of each partner. Through its association with institutions such as IRCTC, SBI, NSDL and BOI, and its alignment with the Vocal for Local agenda, the Company continues to empower local entrepreneurs while extending secure financial access and reliable government-backed payments.

During the year the Company continued to invest in platform capability, compliance infrastructure and the strengthening of its group structure, positioning itself for the next phase of growth in regulated payments and assisted financial services.

Standalone figures. Per-share figures for all years are stated on the current face value of Rs 2 per share and are adjusted for the change in the number of shares. FY 2024-25 figures are as restated in accordance with Ind AS 8.

The Company delivered a further year of growth in FY 2025-26. Revenue from operations rose to Rs 24,107.35 lakhs from Rs 20,794.16 lakhs in the previous year, an increase of about 16%. Other income increased to Rs 653.61 lakhs, taking total income to Rs 24,760.96 lakhs. Profit after tax rose to Rs 1,486.69 lakhs from Rs 1,118.82 lakhs, an increase of about 33%, and earnings per share improved to Rs 0.58 from Rs 0.44. Net worth strengthened to Rs 12,265.88 lakhs, and book value per share improved to Rs 4.76.

Margins improved through the year as the mix shifted towards higher-yield services and cost discipline was maintained; the operating profit margin in the fourth quarter was the strongest of the year. Finance cost increased, reflecting higher working capital utilisation to support settlement float and business expansion. During the preparation of the financial statements the Company identified prior period errors and omissions, and in accordance with Ind AS 8 the comparative amounts for the prior period have been restated. The statutory auditors have issued an unmodified opinion on both the standalone and the consolidated financial results.

• Impact of regulatory change; the fintech industry operates in a dynamic regulatory environment. Changes in financial regulation, compliance requirements or government policy could materially affect the Companys operations, and adjusting to such shifts may involve additional compliance cost and operational restructuring.

• Data protection: the Company handles large volumes of sensitive personal and financial information. Adherence to data protection and privacy law, including the framework being operationalised under the Digital Personal Data Protection Act, remains a critical requirement; non-compliance could result in penalties, financial liability and reputational damage.

• Licensing and authorisation: several lines of business depend on continued authorisation, sponsorship or partnership with regulated entities. Any withdrawal, non-renewal or adverse change in such arrangements could disrupt the affected business line.

• Increased risk of cyber attack: expansion of the Companys digital presence increases exposure to data breach, intrusion and fraudulent activity, which could compromise customer trust and disrupt transactions.

• Investment in cybersecurity: safeguarding against these threats requires sustained investment in security frameworks, monitoring and incident response, including compliance with the security frameworks issued by the National Payments Corporation of India. Failure to strengthen defences proactively could lead to operational setbacks and financial loss.

• Economic slowdown: a broader slowdown or reduction in consumer spending may affect demand for the Companys services and, in turn, revenue and profitability.

• Global volatility and conflict: heightened geopolitical volatility, including the West Asia conflict and its effect on commodity prices, can disrupt financial flows and create uncertainty in planning.

• Financial market volatility: fluctuations in domestic and global markets may influence investment returns, funding availability and business sentiment.

• Intense competition: the sector continues to see strong competition from emerging startups as well as established players. Sustained innovation and differentiation are essential to protect and grow market share.

• Price wars and margin pressure: aggressive pricing by competitors may exert downward pressure on commissions and margins, potentially requiring pricing adjustments that affect profitability.

• Scalability of technology: as the Company expands, its technology infrastructure must remain scalable, resilient and efficient. Lapses could lead to service disruption and customer dissatisfaction.

• Adaptation to technological change: the rapid evolution of financial technology demands continuous adaptation; an inability to keep pace could reduce operational efficiency and weaken competitive positioning.

• Dependence on the agent network: the business model depends on the reach, activity and conduct of a distributed agent network. Attrition, fraud or non-compliance at the agent level could affect revenue and expose the Company to reputational and regulatory risk.

• Counterparty and settlement risk: the Company carries settlement float and depends on banking and switch partners for transaction completion; failure or delay at a counterparty could affect liquidity and service continuity.

Comprehensive training and development programmes have been designed to equip employees with the knowledge and competencies required in an evolving fintech and services ecosystem. Alongside skill-building, the Company places strong emphasis on employee well-being, diversity and inclusion, and works to create a supportive workplace that fosters collaboration and high performance.

Looking ahead, the Company remains committed to advancing its human capital strategy through structured recruitment, continuous learning and leadership development. This approach positions MOS Utility Limited not only as an employer of choice but also as an agile organisation capable of delivering sustainable growth.

The Company maintains an internal control framework commensurate with the scale, nature and complexity of its business operations. These controls are designed to ensure accuracy and reliability in financial reporting, safeguard the Companys assets,

support efficient operational management and maintain compliance with applicable laws and regulations.

Internal audits are conducted at regular intervals to evaluate the effectiveness of these systems independently. Findings and recommendations are reported to the Audit Committee, which reviews them in detail, and corrective measures are implemented promptly to address any deviations observed. During the year, the Company reviewed and strengthened its financial reporting processes following the identification of prior period errors, and has taken steps to reinforce controls over recognition, measurement and disclosure. This structured mechanism ensures that risks are monitored effectively and that operational and financial discipline is upheld across the organisation.

Certain statements made in this Management Discussion and Analysis, including those relating to the Companys objectives, outlook, expectations and projections, may constitute forward-looking statements within the meaning of applicable laws and regulations. These are based on assumptions and assessments made by the management in the light of information available at the time of reporting.

Actual results may differ materially from those expressed or implied in such statements due to a number of factors beyond the Companys control, including but not limited to changes in the regulatory environment, economic conditions, market dynamics and the successful implementation of business strategies. The Company undertakes no obligation to publicly update or revise these forward-looking statements to reflect subsequent developments, events or circumstances, unless required under applicable law.

The Management of MOS Utility Limited presents this analysis of the Companys performance for the financial year ended 31st March, 2026.