Pioneer Investcorp Ltd Management Discussions

OPPORTUNITIES AND THREATS Opportunities

Overall outlook for the Indian economy remains positive: we expect investments to see a turnaround and thrust the economy into sustainable growth. India will likely grow at a moderate pace of 6.8% in FY26, as the global economy is projected to grow at 2.3%. Growth in the next year will likely pick up on account of stable inflation, decline in unemployment, strong public investment outlays, vitality of the services sector, which benefitted from robust local demand for consumer services and strong external demand for the countrys business services exports.

Supply Chain Disruptions is the biggest risk to the positive outlook. Escalation of the conflict in the Middle East, tariff wars, financial stress, persistent inflation and a slowdown in international trade are downside risks for global growth. New commodity price spikes from geopolitical shocks––and supply disruptions or more persistent underlying inflation could prolong tight monetary conditions

According to the World Bank report, Global growth is expected to slow to 2.3% in 2025, the weakest since 2008 outside of recessions, driven by rising trade tensions, especially the ongoing U.S. tariff war, persistent policy uncertainty, and escalating geopolitical conflicts, including in the Middle East.

Emerging markets and developing economies (EMDEs) face subdued investment, with FDI inflows down over 50% from their 2008 peak. Efforts to reduce poverty and close income gaps remain inadequate. Risks include worsening trade restrictions, financial stress, and climate shocks.

A modest recovery is projected in 2026–27, but global output will likely remain below earlier expectations. Addressing these challenges requires coordinated global action to ease trade tensions and support conflict-affected and debt-stressed regions. EMDEs must also focus on fiscal resilience, inflation control, and structural reforms to unlock sustainable growth

In 2025, India became the worlds fourth-largest economy, led by strong domestic reforms and the Aatmanirbhar Bharat vision. Real GDP grew by 6.5%, with nominal GDP tripling over the past decade to _331.03 lakh crore. India remains the fastest-growing major economy, with projected growth of 6.3%–6.8% in 2025–26.

Exports rose 76% over the decade to US$ 825 billion, while services exports more than doubled. FDI inflows reached US$ 1.05 trillion, and digital payments surged, with UPI processing 172 billion transactions in 2024. Inflation averaged 5% over the past decade, down from 8.2% earlier, with retail inflation at 4.6% in 2024–25. Robust infrastructure growth, supportive policies, and rising investment continue to drive Indias transformation into a global economic powerhouse.

The Company both at standalone and consolidated level rely on its Fee Income and on Income from trading in Securities

The Company continued to emphasize its core business of Investment banking both in equity and debt and its trading and investment activities in Government Securities, corporate bonds as well as in equities, which may improve companys performance and results in near future.

At a macro level, geopolitical developments and rising global financial instability could affect the favourable combination of growth and inflation outcomes currently anticipated. At the micro level, there are "potential risks" to growth that arise out of the Red Sea Crisis (Supply Chain Disruptions), which could create drought conditions. Further technology expansions amongst the financial market intermediaries is a concern and can thus impact the performance of the company. The company is primarily exposed to interest rate risk, liquidity risk and operational risks.

The Companys internal control policy and systems which are commensurate with its size and the nature of its operations, are regularly updated and modified by the Board of Directors of the Company. These updated policies provide accurate financial and operational information, in compliance with applicable statutes, safeguarding assets, executing transactions with proper authorization, and ensuring compliance with corporate policies.

During the year end under review, both Financial as well as operational performance of the Company and the Group as a whole, has been affected for the reasons mentioned above in the segment wise performance.

There was no major senior management change both at Company and Group level. Innovative initiatives and steps by Companys Human Resource Department has succeeded in retaining its Key human resources which resulted in lower attrition both at Company and Group level.

The details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, mentioned in note no. 41 forming part of Notes to accounts.