My Mudra Fincorp Ltd Management Discussions

Financial Year 2024-25

1. Macro-Economic and Operating Environment:

India continues to remain one of the fastest growing major economies globally, supported by strong structural fundamentals, progressive reforms, rising consumer demand, and a substantial infrastructure push by the Government of India. Despite persistent global headwinds including inflationary pressures, supply chain disruptions, volatile commodity prices, and geopolitical uncertainties, the Indian economy has demonstrated strong resilience. This is reflected in stable GDP growth, improvement in industrial production, and consistent expansion across the financial services sector.

The Reserve Bank of India (RBI) has adopted a proactive and balanced approach, focusing simultaneously on managing inflation, supporting economic growth and maintaining financial stability.

Structural shifts such as accelerated digital adoption, enhanced financial inclusion, and deepening credit penetration are strengthening operating environment for financial institutions. Within this landscape, Financial Institutions particularly Non-Banking Financial Companies (NBFCs), continues to play a vital role in extending the credit access for individuals, MSMEs, and underserved segments of society.

Against this, Company is strategically positioned to leverage emerging opportunities, strengthen its market presence, and contribute meaningfully to the broader financial ecosystem in the years ahead.

2. Industry Structure and Developments:

India has a diversified financial sector undergoing rapid expansion both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities.

The Government of India has introduced several reforms to liberalise, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises (MSMEs). These measures include launching Credit Guarantee Fund Scheme for MSMEs, issuing guidelines to banks regarding collateral requirements and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by Government and private sector, India is undoubtedly one of the worlds most vibrant capital markets.

The Financial Services Industry has seen major achievements in the recent past. In FY25, a total of around 318 IPO was launched, raising Rs. 1.72 trillion crore (US$ 20.09 billion) (approx.).

The Non-Banking Financial Company (NBFC) sector has emerged as a key pillar of Indias financial ecosystem, complementing the banking sector by catering to niche segments and enabling last-mile connectivity. NBFCs play a critical role in widening credit access, particularly in areas such as personal loans, vehicle financing, loans against property, and MSME financing. Over the last decade, the sector has delivered consistent growth, supported by technology adoption, product innovation, and customer-centric distribution models.

The Indian financial services industry as a whole continues to witness robust growth, driven by rising incomes, expanding financial inclusion, and regulatory reforms. The insurance market is on a strong growth trajectory, supported by increased FDI limits and growing penetration. The fintech sector has seen rapid expansion with thousands of active companies, while digital payments have achieved exponential adoption. Unified Payments Interface (UPI) transactions and mobile wallets have transformed customer behaviour, with digital payments projected to account for a majority of overall transactions in the coming years.

The competitive landscape is evolving quickly, shaped by fintech entrants, changing consumer preferences, and advancements in lending technologies such as AI-driven credit assessment, e-KYC, and paperless onboarding. These innovations are redefining distribution channels, enhancing efficiency, and improving customer experience across the financial ecosystem.

My Mudra Fincorp Ltd. plays a vital role in supporting the credit delivery process by sourcing quality customers, strengthening the distribution network of banks and NBFCs, and providing efficient customer servicing. Leveraging industry developments and its robust operating model, the Company aims to sustain leadership in its chosen segments, deepen partnerships, and continue creating value for stakeholders in the years ahead.

3. Business Overview:

My Mudra Fincorp Limited (the Company) is engaged in providing array of financial solutions catering to individuals and businesses. Established in 2013 and recently converted into a Public Limited Company, we have steadily expanded our footprint and built a strong reputation.

Our business model is built on diversified financial products and strategic partnerships with leading banks and NBFCs in India where we operate as Direct selling partner.

The company follows customer - first approach by leveraging tele-calling, advertising, direct marketing, referrals, networking, supported by phygital strategy to acquire customers.

Our Product Portfolio includes:

• Secured Loans: Home Loans, Loan Against Property (LAP), etc.

• Unsecured Loans: Business Loans, Personal Loans, Professional Loans, etc. and

• Credit Cards: Wide range of offerings from top banks.

4. Outlook:

With a strong capital base, prudent risk management framework, diversified product portfolio, and an experienced leadership team, the Company is well-positioned to strengthen its presence in the rapidly evolving financial services ecosystem. The Company expects to benefit from the structural demand for credit, rising financial inclusion, and increasing acceptance of digital and direct distribution models in DSA segments.

While global macro-economic developments and domestic uncertainties may create near-term volatilities, the medium- to-long term prospects remain favorable. The Company intends to focus on:

• Enhancing customer acquisition through omni-channel strategies, expanding both physical and digital presence.

• Leveraging technology and analytics to drive operational efficiency, improve customer onboarding mechanisms, and enhance customer experience.

• Prudent financial management to maintain a healthy balance sheet and stable liquidity position.

• Strengthening partnerships with leading Banks and NBFCs and Insurance companies to expand product reach and create value-accretive opportunities.

• Sustainable growth with a focus on governance, compliance, and long-term stakeholder value creation.

The Company remains optimistic about its growth trajectory and is confident of reinforcing its position as a trusted and customer-centric financial solutions provider.

5. Opportunities and Threats:

Opportunities:

1. Expanding Credit Demand - Growing middle-class population and rising consumer aspirations in semiurban and rural markets are expected to drive demand for credit and financial products.

2. Policy Support - Government initiatives promoting MSME development, digital lending, and financial inclusion present strong growth enablers for the sector.

3. Digital Transformation - Increasing acceptance of fintech solutions, data-driven credit assessment, and digital loan disbursement mechanisms are creating new avenues for customer acquisition and operational efficiency.

4. Capital Market Access - Access to equity capital through IPO proceeds will further strengthen the Companys balance sheet, enabling expansion of business scale, technology adoption, and strategic growth.

Threats and Challenges:

1. Competitive Intensity - The sector continues to witness strong competition from established NBFCs, commercial banks, and agile fintech players, exerting pressure on margins.

2. Macroeconomic Pressures - Rising inflationary trends, and global uncertainties may increase borrowing costs and impact credit demand.

3. Regulatory Environment - Evolving regulatory frameworks and tightening compliance norms require continuous adaptation and investment in governance.

4. Credit and Concentration Risks - Potential defaults, asset quality pressures, and exposure to concentrated borrower segments remain critical risk factors.

6. Segment-wise / Product-wise Performance:

The Company operates primarily in the lending segment, offering a diversified portfolio of products including Personal Loans, Loans Against Property (LAP), MSME/Business Loans, Home Loans, and Credit Card Distribution.

During the year under review, Personal Loans and MSME Loans emerged as the key growth drivers, reflecting rising credit demand from middle-class households and emerging entrepreneurs. The Loan Against Property segment remained a steady contributor, supported by demand for secured financing, while Home Loans and Credit Card Distribution continued to augment the Companys retail reach.

Backed by digital integration, robust distribution channels, and competitive interest offerings, the Company has been able to deliver a superior customer experience and is well-positioned to strengthen its product-wise performance in the coming years.

While the requirements of Section 133 of the Companies Act, 2013 read with the applicable Accounting Standards relating to segment reporting are not applicable to the Company, management has voluntarily provided this disclosure in the interest of transparency.

7. Financial Performance:

During the year under review, the Company recorded steady growth in revenue and profitability.

(In Lakh)

Particulars	Year ended 31.03.2025	Year ended 31.03.2024
Revenue from operations	8036.52	7107.24
Other Income	30.53	7.11
Total Revenue	8067.05	7114.36
Less: Total Expenses	6855.71	6201.35
Profit/(Loss) before tax	1211.34	913.01
Less: Current Tax	318.30	290.06
Deferred T ax	-7.98	-19.96
Earlier Year Tax Adjustment	0.32	0.32
Profit /(Loss) after tax	901.02	642.59
Transfer to general reserve	NIL	NIL
Balance carried to Balance Sheet	901.02	642.59

During the financial year ending 31st March 2025, the Company recorded a substantial growth in its total turnover, which stood at Rs. 8036.52 lakhs as against Rs. 7107.24 lakhs in the previous financial year. The significant growth in revenue reflects the Companys strong operational performance and its ability to generate sustainable income from ancillary sources, thereby demonstrating its sound financial health.

The Company reported a net profit of Rs. 901.02 lakhs for the year under review, registering a marked improvement over the net profit of Rs. 642.59 lakhs earned during the previous financial year. This increase in profitability is a clear outcome of effective execution of business strategies and improved operational efficiencies. The successful IPO will provide additional capital, reduce debt-equity ratio, and strengthen liquidity position, enabling further growth.

8. Key financial performance:

The key financial ratios for FY [2024-25] are as follows:

Ratio Analysis	Numerator	Denominator	31-Mar-25	31-Mar-24	Variance	Reason for more than 25% variance
Current Ratio	Current Assets	Current Liabilities	7.26	1.95	271.42%	Increase in Cash & Cash equivalents
Debt Equity Ratio	Total Debt (Short Term & Long Term)	Shareholder\u2019s Equity	0.07	0.59	-88.79%	Decrease in debt & Increase in Equity
Debt Service Coverage Ratio	Net Operating Income	Debt Service	5.32	2.97	78.95%	Increase in PBIT and Decrease in Debt & interest
Return on Equity Ratio	Profit for the period	Avg. Shareholders Equity	25.81%	48.69%	-46.99%	Increase in Equity
Inventory Turnover Ratio (In Days)	Cost of Goods sold	Average Inventory	NA	NA	NA	NA
Trade Receivables Turnover Ratio(No of Times)	Net Credit Sales	Average Trade Receivables	5.06	7.19	-29.66%	Increase in Sales
Trade Payables Turnover Ratio (No of Times)	Total Commission Expenses	Average Trade Payables	132.53	152.21	-12.93%
Net Capital Turnover Ratio	Net Sales	Average Working Capital	3.30	8.88	-62.82%	Increase in Capital
Net Profit Ratio	Net Profit	Net Sales	11.21%	9.04%	24.00%
Return on Capital employed	EBIT	Capital Employed *	22.80%	38.81%	-41.25%	Increase in Capital
Return on Investment	Profit After Tax	Avg. of Total Assets	19.64%	27.61%	-28.88%	Increase in Assets

9. Internal Control Systems and Adequacy:

The Company has established a robust internal control systems commensurate with the size, scale and complexity of its business operations. The internal controls are designed to ensure accuracy and reliability of accounting and financial reporting, Compliance with applicable laws, regulations, and internal policies, Safeguarding of assets and efficient utilization of resources. Internal audit is conducted periodically by independent professionals, and findings are reviewed by the Audit Committee to strengthen governance mechanisms.

The companys internal control systems are aligned with its overall strategic objectives and its regulatory obligations under SEBI (LODR Regulations), 2015 and the Companies Act, 2013. The Audit Committee of the Board plays a proactive role in reviewing and reinforcing the adequacy and operating effectiveness of these controls on a periodic basis.

10. Human Resources and Industrial Relations:

The Company regards its human capital as a key enabler of sustainable growth and long-term success. A strong emphasis is placed on fostering a culture of performance, innovation, and customer-centricity. The company undertook several training programs and leadership development programs, and regular employee engagement initiatives were conducted to strengthen collaboration, increased motivation with alignment of the companys objective. The companys HR policies are designed to ensure diversity, equal opportunities, and talent retention. The total employee strength as of March 31, 2025 was 206. Industrial relations remained cordial during the year, fostering a productive work environment.

11. Risks and concerns:

The Company operates in a dynamic regulatory and competitive environment, and its business is subject to various risks which may impact its operations, financial performance, and growth prospects. Key risks and concerns includes:

Dependence on Banking and NBFC Partnerships:

A significant portion of revenue is derived from relationships with Banks and NBFCs. Any termination, non-renewal, or adverse change in these strategic partnerships could materially affect the Companys business, financial condition, and future prospects.

Regulatory and Compliance Risk:

The Companys banking and financial partners are regulated by the Reserve Bank of India (RBI). Any change in RBI policies, monetary regulations, or compliance requirements could adversely affect operations, cash flows, and growth plans. The Company mitigates this risk through strict adherence to regulatory guidelines issued by RBI, SEBI, and other authorities.

Macroeconomic and Market Risk:

Economic fluctuations, including changes in interest rates, inflation, liquidity conditions, and government policies, may influence demand for loans, credit cards, and other financial products. Interest rate volatility, in particular, poses a challenge as it is driven by factors such as RBI monetary policy, global economic conditions, deregulation, and geopolitical developments, which are beyond the Companys control.

Business Environment and Competition:

The Company operates in a highly competitive sector, facing challenges from established NBF Cs, banks, and emerging fintech players. Sustained investment in customer acquisition, technology, and product innovation is critical to maintaining market position.

Despite these risks, the Companys proactive risk management framework, backed by prudent policies, continuous monitoring, and governance oversight, enables it to mitigate adverse impacts and pursue sustainable growth.

12. Cautionary Statement:

This Management Discussion and Analysis (MD&A) contains certain forward-looking statements reflecting the Companys objectives, expectations, estimates, projections, and future plans. These statements are based on current business strategies, operating environment, and assumptions made by the management.

Forward-looking statements are subject to inherent risks and uncertainties, both known and unknown, that could cause actual results, performance, or achievements to differ materially from those expressed or implied. Such risks and uncertainties include, but are not limited to, changes in regulatory requirements, macroeconomic conditions, market dynamics, geopolitical developments, interest rate fluctuations, and the performance of the financial services and real estate sectors in India and globally.

While the Company believes these statements to be reasonable, they should not be construed as guarantees of future performance. The Company does not undertake to update or revise any forward-looking statements, whether due to future events, new information, or otherwise, unless statutorily required.

This MD&A should be read in conjunction with the audited financial statements and notes forming part of the Annual Report for the year ended March 31, 2025.

		By order of the Board
		For My Mudra Fincorp Limited
	Sd/-	Sd/-
Date: August 25, 2025	Abhisek Dhal	Vaibhav Kulshrestha
Place: New Delhi	Whole-time Director	Chairman & Managing Director
	DIN: 08909761	DIN: 06979149