Mudra Financial Services Ltd Management Discussions

The Directors of Mudra Financial Services Limited are pleased to present the Management Discussion & Analysis ("MD & A") Report for the year ended 31st March, 2024.

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

The company is engaged in the business of rendering all kinds of financial services including granting of loans and advances to various segments of industry.

B. OPPORTUNITIES AND THREATS:

NBFCs, Banks and various financial lenders are facing the threat of increase in Non-performing assets which had resulted in a slowing credit growth. However, the demand for credit has been increasing gradually due to various measures taken by the RBI and the Government to increase liquidity in the market. This bodes well for NBFC’s as newer opportunities for lending may be available.

C. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Company had a total income from operations of Rs.9,364.67(in"000") during the current year as compared to Rs.6,035.14 (in"000") earned in the previous year. During the year under review, the company has earned Profit after Tax of Rs. 2,987.61 (in"000") as compared to Profit after Tax of Rs. 1,006.80 (in"000") in immediately preceding financial year.

D. SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE:

The Company’s main business is providing financial assistance independently and to make investment in shares, equity mutual funds, etc. All the activities of the Company are related to its main business. As such there are no separate reportable segments.

E. OUTLOOK:

In the present era of digital revolution, technology has been leaving its incredible mark in several areas, including finance. The Directors believe every Company with a captive user base will begin to offer customized financial products to them. These financial products will be offered based on user data and have gathered on the basis of the user’s actions on its platform. Technology’s involvement is proving to be beneficial at providing efficiency gains by calculating credit scores based on machine learning algorithms, alternative data points such as social media footprints, call records, shopping histories, payments to utility service providers and various other data points. This data combined with traditional data such as CIBIL scores and bank statements will form the basis of new age credit underwriting. MFSL is extremely bullish on the fintech industry and sees this to be the inflection point in the lending industry of India.

F. RISKS AND CONCERNS:

The Company is mainly exposed to risks arising out of counterparty failures, funding and asset concentration, interest rate movement and risks pertaining to liquidity and solvency, as any other financial sector player. It is also exposed to market risk in the form of reduction in value of its investments and fall in returns due to dip in the investee Company’s performance. As a result today’s operating environment demands a rigorous and integrated approach to risk management, which the Company has incorporated in its strategic and operating decisions.

G. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY:

The Company is following a proper and adequate system of internal controls in respect of all its activities including safeguarding and protecting its assets against loss from unauthorized use or disposition. Further, all transaction entered into by the company are fully authorised, recorded and reported correctly.

H. MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:

The relationship with the staff with all levels remained cordial during the year.

I. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO:

During the year under review, there were no significant changes in Key Financial Ratios of the Company as compared to previous financial year.

J. CAUTIONARY STATEMENT:

Statement in the Management Discussion and Analysis describing the Company’s objectives, expectations, estimates or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement due to external factors. The company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.