Munoth Financial Services Ltd Management Discussions

MANAGEMENT DICUSSION AND ANALYSIS (MD &A)

Industry Structure and developments:

The Indian capital markets serve an important tool for economic development, facilitating institutional capital formation, promoting the financialisation of household savings, and driving structured wealth creation. Throughout the financial year 2025-26, the Indian macroeconomic environment demonstrated resilience amidst tightening global financial conditions and persistent regional geopolitical tensions. While domestic indices faced periods of volatility and valuation moderation following regulatory interventions aimed at checking speculative market behavior, the broader capital market infrastructure remained structurally healthy. Individual and retail investor participation has been steady and supported by sustained inflows via Systematic Investment Plans (SIPs) and digital brokerage accounts. The continuous expansion of technology architecture across clearings, depositories, and exchange platforms has further integrated domestic savings into formal financial systems resulting in market expansion

Opportunities & Threats Opportunities:

The digitization of financial products present significant growth channels. High traction in advanced digital financial infrastructure allows financial services firms to widen their geographic and retail client acquisition footprints cost-effectively. Opportunities are also expanding within the institutional broking business as public sector banks and domestic insurance institutions increasingly seek resilient, digitally compliant partners for transaction executions.

Threats: levated valuations and policy developments in major global markets have heightened the likelihood of persistent foreign institutional investor (FII) outflows. Furthermore, a substantial shift or correction in market sentiment could heavily disrupt trading volumes and negatively affect revenues from stock broking and depository operations.

Concerns, Risk and outlook

The companys operations remain tightly linked to the capital market segment, making it highly sensitive to sectoral shifts. Key near-term concerns include elevated domestic and global interest rates, inflationary pressures impacting corporate margin growths, and continuous selling pressure from institutional investors.

The outlook for the upcoming periods remains cautiously constructive. While shorter-term volatility may persist as past market excesses factor into modern security pricing, the stabilization of retail inflows provides a fundamental backstop against extreme price corrections.

Adequacy of Internal Controls:

The Company maintains an extensive and well-structured internal control system tailored to ensure that its capital market activities align regularly with prudent business policies and regulatory frameworks. This governance structure ensures full compliance with statutory guidelines issued by the Securities and Exchange Board of India (SEBI) and the stock exchanges. The internal control policies strictly regulate risk exposure in managing existing client bases and expanding into new commercial advisory networks. Furthermore, the Audit Committee continuously reviews the adequacy and effectiveness of these internal control frameworks on a regular basis, evaluating reporting structures, operational risks, and policy implementations to protect corporate assets and maintain financial reporting integrity.

Financial Performance:

REVIEW OF BUSINESS OPERATIONS:

During the financial year 2025-26, the Companys total revenue has decreased to INR 41.41 lakhs from INR 58.28 lakhs in the previous financial year.

The Company has made a loss of INR 111 Lakhs in the current financial year as against a loss of INR 36.02 Lakhs in the last financial year.

Stock Broking:

Income from stock broking operations has decreased to INR 38.21 Lakhs from INR 47.54 Lakhs in the previous financial year.

The Company provides institutional broking business and is empanelled with public sector banks and insurance companies.

Depository participant:

As a Depository Participant the company offers facilities to both institutional and retail investors to maintain their investments in securities in electronic form. Income from Depository operations has decreased to INR 3.17 Lakhs from INR 5.57 Lakhs in the previous financial year.

Merchant Banking & Portfolio Management Services:

The Company surrendered its Portfolio Management Services registration granted by SEBI during the financial year, The Companys MBD division is providing valuation services in accordance with the requirement of the various acts/statutory requirements.

FUTURE PROSPECTS

The company will continue to focus on Institutional and retail Broking business.

Human Resource Development:

The Company has a team of able and experienced professionals and the Company considers that the main strength is its human resources, who create a climate to suit its growth and excellence.

Cautionary Statement

Statements in the Management Discussion and Analysis regarding the Companys objectives, estimates and expectations are within the scope of applicable laws and regulations. Actual performance might differ from those either expressed or implied.

	For and on behalf of the Board of Directors
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Place : Chennai	Jaswant Munoth	Vikas Munoth
Date : 29-05-2026	Managing Director	Whole Time Director
	(DIN : 00769545)	(DIN : 00769366)