Regency Fincorp Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

OVERVIEW:

This report is an integral part of the Boards Report and covers management perspective on economic environment, industrial scenario, business performance, opportunities, threats, risks & concern, internal control etc. during the Financial Year 2025-2026.

Regency Fincorp Limited ("the Company") is a NonDeposit Taking Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India. The Company is engaged in providing financial services with a focus on underserved and underbanked segments, including women borrowers, Micro, Small and Medium Enterprises (MSMEs), small businesses and customers requiring credit for agriculture and allied activities. The Company continues to pursue a customer-centric and technology-enabled lending approach with the objective of expanding access to formal credit while maintaining prudent underwriting and risk management practices.

During the period under review, the Indian financial services sector continued to demonstrate resilience despite a challenging global environment characterized by geopolitical tensions, elevated commodity prices, volatility in financial markets and uncertainty surrounding global trade and monetary policy. Against this backdrop, Indias domestic demand, infrastructure activity, financial inclusion initiatives and growing digital adoption continued to provide a supportive environment for the NBFC sector.

The Company remains focused on strengthening its lending franchise, diversifying its loan portfolio, improving operational efficiencies and expanding its digital lending capabilities. The Company is also focusing on building its secured lending portfolio, particularly in the MSME segment, while maintaining appropriate credit appraisal, collection and portfolio monitoring mechanisms.

The Companys strategy is centered around responsible and sustainable growth, with emphasis on:

• Expanding its presence in the MSME and underserved credit segments;

• Increasing the contribution of secured lending to the overall loan portfolio;

• Leveraging technology to improve customer acquisition, credit assessment, disbursement and collection processes;

• Maintaining prudent asset-liability management and adequate liquidity;

• Diversifying sources of funding through banking relationships and capital market instruments;

• Strengthening risk management and portfolio monitoring systems; and

• Maintaining regulatory and governance standards applicable to an RBI-regulated NBFC.

The Companys business model is expected to benefit from the continuing formalisation of the Indian economy, increasing penetration of digital financial services, rising credit requirements of MSMEs and greater demand for organised sources of finance. At the same time, the Company remains conscious of risks arising from borrower leverage, asset quality, interest-rate movements, liquidity conditions and changes in the regulatory environment.

The Company believes that a disciplined approach to growth, supported by technology, responsible lending practices and strong risk management, will enable it to participate meaningfully in the expanding Indian credit market.

This section should be read in conjunction with the Companys Financial Statements, including the accompanying schedules, notes, and other relevant information provided elsewhere in this Annual Report. Further, in the preparation of financial statements no separate Accounting Treatment has been followed other than that of prescribed in the Accounting Standards.

1. Economy Review

Global Economy

The global economy continues to expand, although the growth outlook remains uneven across regions. According to the International Monetary Funds July 2026 World Economic Outlook Update, global growth is projected at 3.0% in 2026 and 3.4% in 2027, compared with an average growth rate of around 3.5% during 2024-25. The IMF has highlighted the impact of geopolitical tensions and the associated energy shock, while also noting that technology-related investment and artificial intelligence-led activity are providing support to certain economies.

The global economic environment continues to be shaped by several important factors:

Geopolitical and Energy Risks

Geopolitical tensions and disruptions in energy supply have resulted in increased uncertainty in global commodity markets. Higher crude oil and energy prices can contribute to inflationary pressures, particularly in energy-importing economies. For India, which remains significantly dependent on imported crude oil, sustained increases in global energy prices may affect inflation, the current account balance, currency markets and domestic interest rates.

Global Inflation and Interest Rates

Although inflation has moderated from the peaks witnessed during the earlier global inflationary cycle, the pace of disinflation remains uneven. Central banks continue to balance the objectives of price stability and economic growth. Changes in global interest-rate expectations can affect capital flows, currency markets and the cost and availability of funding.

For financial institutions, global monetary policy remains relevant as changes in international interest rates can influence domestic liquidity, bond yields and investor sentiment.

Global Trade and Supply Chains

International trade continues to face uncertainty arising from geopolitical developments, trade- policy changes and supply-chain disruptions. The World Bank has projected global growth of 2.5% in 2026, down from 2.9% in 2025, and has highlighted significant downside risks arising from geopolitical tensions, commodity-market disruptions and weaker global investment.

These developments may affect export-oriented industries and businesses that are dependent on imported raw materials. However, Indias large domestic market and relatively diversified economic structure provide an important buffer against external shocks.

Technology and Digital Transformation

Technology remains an important source of productivity and economic growth. Investments in artificial intelligence, digital infrastructure, cloud technology and financial technology are transforming business models across industries.

The financial services sector continues to benefit from rapid adoption of digital payments, digital customer onboarding, automated credit assessment and technology-enabled collection mechanisms. This trend provides opportunities for NBFCs to improve customer reach, reduce operating costs and enhance credit monitoring.

Implications for the Company

For Regency Fincorp Limited, the global environment presents both opportunities and risks. While global uncertainty may result in volatility in interest rates, liquidity and commodity prices, Indias domestic growth and expanding formal credit ecosystem provide a favourable underlying market for the Companys lending business.

The Company will continue to monitor global developments, particularly interest-rate movements, crude oil prices, currency volatility and global liquidity conditions, and assess their potential impact on borrowing costs, asset quality and funding availability.

Indian Economy

The Indian economy continues to remain one of the stronger-performing major economies globally, supported by domestic consumption, infrastructure spending, improving formalization and expanding financial inclusion.

According to a Reuters poll conducted in July 2026, Indias real GDP growth is expected to moderate to approximately 6.6% in FY 2026-27, following estimated growth of 7.7% in FY 2025-26. While the expected moderation reflects higher energy prices and relatively cautious private investment, the projected growth rate continues to indicate a comparatively resilient domestic economy.

The Reserve Bank of India, in its August 2026 monetary policy review, maintained the policy repo rate at 5.25%, reflecting a cautious approach towards inflation and global uncertainties while recognizing the resilience of domestic economic activity.

Domestic Demand

Domestic consumption continues to remain a key driver of Indias economic activity. Rising formal employment, increasing digitalisation, improving access to financial services and government-led infrastructure development are supporting economic activity across several sectors.

For NBFCs, resilient domestic demand supports credit requirements among individuals, small businesses and MSMEs. The expansion of formal financial services into previously underserved segments also provides opportunities for responsible credit growth.

MSME Sector

The MSME sector remains an important contributor to Indias economic activity, employment generation and entrepreneurship. MSMEs require timely access to working capital, business expansion finance, equipment finance and other forms of credit.

The increasing formalisation of MSMEs, wider adoption of digital payments, improved availability of financial information and technology-enabled underwriting are creating opportunities for lenders to serve this segment more efficiently.

For Regency Fincorp Limited, the MSME segment represents an important area of growth. The Company intends to leverage its lending experience and technology capabilities to provide appropriately structured credit while maintaining disciplined underwriting and portfolio monitoring.

Inflation

Inflation continues to remain an important macroeconomic variable for the financial sector.

Indias retail inflation increased to 4.45% year- on-year in July 2026, primarily driven by food- price pressures, while remaining within the RBIs tolerance band of 2%-6%.

Persistent food or energy inflation may influence household disposable income and borrower repayment capacity. It can also affect the monetary-policy environment and consequently the cost of funds for financial institutions.

The Company will continue to closely monitor inflationary trends and their potential impact on borrowers, credit demand and funding costs.

Interest Rates and Liquidity

Interest rates have a direct impact on NBFCs through both borrowing costs and customer demand for credit. The RBIs decision to maintain the repo rate at 5.25% provides a degree of stability to the interest-rate environment, although future movements will depend on inflation, energy prices, domestic growth and global developments.

The Company continues to focus on maintaining an appropriate asset-liability profile, diversifying funding sources and ensuring adequate liquidity to support its business requirements.

Financial Inclusion and Digital Lending

Indias rapid adoption of digital financial services is transforming the delivery of credit. Digital customer onboarding, electronic documentation, data-driven credit assessment, automated underwriting and digital collection mechanisms are improving the efficiency and reach of financial institutions.

The continued development of Indias digital financial infrastructure is expected to support the expansion of formal credit to individuals and MSMEs. For the Company, technology-enabled lending provides an opportunity to expand its customer base while improving turnaround times and operational efficiency.

Outlook for the Indian Economy

The medium- to long-term outlook for the Indian economy remains constructive, supported by domestic consumption, infrastructure investment, financial inclusion, digitalisation, entrepreneurship and the formalisation of economic activity. Fitch Ratings has maintained Indias sovereign rating at BBB- with a stable outlook and projected real GDP growth of approximately 6.4% for FY 2026-27, while highlighting Indias strong growth fundamentals and macroeconomic resilience.

However, risks remain from geopolitical tensions, elevated energy prices, inflationary pressures, global trade uncertainty, currency volatility and potential changes in global financial conditions.

Against this backdrop, the Company believes that the Indian financial services sector continues to offer meaningful growth opportunities. Regency Fincorp Limited intends to pursue these opportunities through a calibrated expansion of its lending business, greater focus on secured MSME lending, technology-enabled operations, diversified funding sources and robust risk management.

The Company remains committed to maintaining a balance between growth, asset quality, liquidity, profitability and regulatory compliance, thereby creating sustainable longterm value for its stakeholders.

2. Industry Structure and Developments:

Indias financial sector continued to demonstrate resilience and sustained growth during FY 2025-26, supported by strong domestic

demand, improving economic activity, increasing formalization of financial services and rapid digital adoption. Indias real GDP growth was estimated at 7.4% for FY 2025-26, while the services sector remained a key driver of economic expansion, recording estimated growth of 9.1%. Financial, real estate and professional services also recorded strong growth of approximately 9.9%, highlighting the continued importance of financial intermediation in supporting the broader economy.

Non-Banking Financial Companies (NBFCs) continued to play an important role in the Indian financial ecosystem by complementing the banking sector and addressing the credit requirements of underserved and underbanked segments. NBFCs remained significant providers of credit to MSMEs, self-employed individuals, small businesses, retail borrowers and other emerging segments, supported by their customer-centric approach, specialised lending capabilities and ability to reach customers in geographically and economically diverse markets.

During FY 2025-26, the NBFC sector continued its transition towards a more regulated, technology-enabled and risk-focused operating environment. The Reserve Bank of Indias Scale-Based Regulation (SBR) framework continued to provide the overarching regulatory structure for NBFCs, with entities classified into Base Layer, Middle Layer, Upper Layer and Top Layer based on their size, activities and risk profile. Regency Fincorp Limited, being a Base Layer NBFC, continued to operate within the prudential and governance framework applicable to its regulatory classification, while maintaining focus on responsible lending, sound credit practices, effective risk management and regulatory compliance.

The regulatory environment during the year continued to emphasise:

Strengthening of governance, compliance and risk management frameworks across regulated entities;

Responsible and transparent lending practices, including appropriate disclosure of interest rates, charges and other material terms to borrowers;

Strengthening of KYC, customer due diligence and monitoring requirements;

Greater oversight of outsourcing arrangements, Lending Service Providers and recovery practices;

Enhanced focus on data privacy, cybersecurity, information technology controls and operational resilience;

Strengthening of customer grievance redressal and borrower protection mechanisms; and

Greater supervisory focus on the quality of credit underwriting, asset quality and concentration risks.

Digital transformation continued to reshape the NBFC industry during FY 2025-26. Technology- enabled lending, digital KYC, automated credit assessment, API-based integrations, digital documentation and electronic disbursement mechanisms gained further importance in improving customer experience and operational efficiency. The increasing adoption of technology has enabled NBFCs to expand their geographical reach and improve turnaround time while also creating greater opportunities for data-driven credit assessment and monitoring. At the same time, cybersecurity, data protection, fraud prevention and responsible use of customer data remained critical areas of focus.

RBIs digital-lending framework continues to require regulated entities to maintain transparency in pricing, ensure appropriate consent-based data collection and exercise oversight over Lending Service Providers and Digital Lending Apps.

The MSME financing segment continued to present significant growth opportunities for NBFCs. The increasing formalisation of small businesses, greater adoption of digital payment systems and growing demand for working capital and secured business finance supported the need for specialised lending solutions. NBFCs remained well positioned to serve such segments through customised products, faster credit assessment and relationship-driven lending models.

The sector also witnessed continued emphasis on asset quality, capital adequacy, liquidity management and cost-efficient operations. While the operating environment remained supportive, NBFCs continued to face challenges relating to cost of funds, competition, credit risk, asset quality, regulatory compliance and cybersecurity. Accordingly, prudent underwriting standards, portfolio diversification, effective collection mechanisms and robust risk management remained essential for sustainable growth.

In this evolving industry environment, Regency Fincorp Limited continues to focus on measured and sustainable business expansion, strengthening its secured lending portfolio, enhancing its technology-enabled lending capabilities and serving the credit requirements of MSMEs, self-employed individuals and other underserved customer segments. The Company remains committed to maintaining a compliance-first approach, prudent credit practices and robust risk management while leveraging technology to improve operational efficiency, customer reach and overall service delivery.

The Company believes that the continued expansion of the Indian economy, increasing formalisation of credit, growth in MSME financing requirements and rapid digital transformation of financial services provide a favourable long-term operating environment for NBFCs. Regency Fincorp Limited remains focused on capitalising on these opportunities while maintaining appropriate risk controls, regulatory discipline and sustainable growth parameters.

3. Opportunity and Threats:

The Indian financial services sector continues to offer significant opportunities for NBFCs, supported by increasing formalization of the economy, rising credit penetration, financial inclusion, digitalization and the growing financing requirements of MSMEs and small businesses.

3.1 Opportunity

Growing Credit Demand from MSMEs

MSMEs continue to represent a significant opportunity for financial institutions due to their financing requirements for working capital, business expansion, machinery, equipment and other productive purposes. Access to timely and appropriately structured credit remains an important requirement for smaller businesses.

Regency Fincorp Limited intends to leverage its experience in serving underserved segments and strengthen its presence in the MSME financing market. The Companys focus on secured MSME lending provides an opportunity to build a relatively diversified and sustainable loan portfolio while maintaining appropriate risk controls.

Expansion of Secured Lending

The Company sees considerable potential in expanding its secured lending portfolio. Secured financing can provide customers with access to larger and appropriately structured credit while enabling the lender to maintain additional risk mitigation through underlying collateral.

The Companys strategy of increasing its focus on secured MSME and other secured lending products is expected to support portfolio quality, customer retention and long-term scalability.

Financial Inclusion

A substantial section of Indias population and small-business ecosystem continues to require access to formal and organized credit. The expansion of banking infrastructure, digital financial services and formal economic activity is bringing more borrowers into the organized financial system.

This creates opportunities for NBFCs such as Regency Fincorp Limited to serve customers who may not always be adequately serviced by traditional banking channels.

Digital Lending and Technology

Technology is increasingly transforming the lending lifecycle, from customer acquisition and onboarding to credit assessment, documentation, disbursement and collection. RBIs digital lending framework provides a structured regulatory framework for digital lending activities and requires regulated entities to maintain appropriate customer-protection and compliance standards.

The Company can leverage its technology- enabled lending platform to improve turnaround time, enhance customer experience, strengthen credit assessment and reduce operational inefficiencies.

Data-driven underwriting and digital monitoring can also enable the Company to identify early warning signals and improve portfolio management.

Diversification of Funding Sources

Access to diversified and stable funding remains an important competitive factor for NBFCs. The Company has an opportunity to strengthen its funding profile through a combination of bank finance, capital-market instruments and other permitted sources of funding.

A diversified funding profile can reduce dependence on any single source, improve liquidity management and support the Companys planned expansion of its loan book.

Increasing Formalization of the Economy

The continued formalization of businesses through GST registration, digital payments, banking transactions and improved availability of financial information is creating better opportunities for lenders to assess the financial profile of small businesses.

This trend can support more data-driven underwriting and enable NBFCs to expand credit to customers who were historically dependent on informal sources of finance.

Growth of Digital Financial Infrastructure

Indias rapid development of digital financial infrastructure is creating opportunities for financial institutions to improve reach and operational efficiency. Digital onboarding, electronic documentation, automated processes and technology-enabled collections can enable NBFCs to serve customers across wider geographies without proportionately increasing their physical infrastructure.

Regency Fincorp Limited intends to utilize technology as an important component of its growth strategy and customer servicing model.

Scope for Product Diversification

The evolving credit requirements of individuals, entrepreneurs and MSMEs provide opportunities for the Company to develop and offer appropriately structured lending products across selected segments.

The Company may evaluate opportunities in areas such as MSME finance, secured business loans, working capital requirements, agriculture and allied activities, consumer finance and other identified segments, subject to risk-return considerations and applicable regulatory requirements.

Positive Long-Term NBFC Outlook

The NBFC sector continues to benefit from strong underlying credit demand. CRISIL has indicated that NBFC credit growth may experience short-term volatility but that robust fundamentals and credit demand should continue to support growth, with retail segments remaining an important driver.

The Companys relatively focused business model and emphasis on underserved customer segments provide an opportunity to participate in this structural growth while maintaining a disciplined approach to risk.

3.2 Threats

While the Company sees significant opportunities in the Indian credit market, its business remains exposed to various financial, operational, regulatory and macroeconomic risks. The Company continuously monitors these risks and takes appropriate measures to mitigate their potential impact.

Credit and Asset Quality Risk

Credit risk remains one of the principal risks for an NBFC. Deterioration in the financial position of borrowers, economic slowdown, business disruption, unemployment, adverse agricultural conditions or other unforeseen circumstances may affect borrowers repayment capacity.

As the Company expands its loan portfoli, maintaining prudent credit appraisal, adequate collateral coverage, continuous portfolio monitoring and effective collection mechanisms will remain critical.

Competition

The NBFC sector is highly competitive, with banks, large NBFCs, fintech companies and other financial institutions operating across overlapping customer segments.

Increasing competition may put pressure on interest spreads, customer acquisition costs and underwriting standards. The Company will therefore focus on customer service, technology, product suitability, prudent pricing and efficient operations to maintain its competitive position.

Interest Rate Risk

Changes in interest rates can affect the Companys borrowing costs, lending rates and net interest margins. A rise in market interest rates may increase the cost of funds and adversely affect profitability if the increase cannot be adequately passed on to borrowers.

The Company seeks to manage this risk through appropriate asset-liability management, diversification of funding sources and periodic review of lending and borrowing rates.

Liquidity and Funding Risk

NBFCs are dependent on continued access to funding to meet disbursement requirements and repayment obligations. Any disruption in capital- market conditions, reduction in bank funding, increase in borrowing costs or deterioration in investor sentiment could affect the availability and cost of funds.

The Company therefore places importance on maintaining adequate liquidity, appropriate asset-liability matching and diversified funding relationships.

Regulatory and Compliance Risk

The NBFC sector is subject to extensive regulation and supervision by the Reserve Bank of India. Regulatory requirements relating to capital adequacy, governance, provisioning, asset classification, fair practices, digital lending, customer protection and reporting may evolve from time to time.

The Companys operations may therefore require continuous adaptation to changes in the regulatory environment. The Company remains committed to maintaining appropriate compliance systems and strengthening its governance and risk-management framework.

The RBIs Scale Based Regulation frameork has further increased the importance of proportionate governance, risk management and regulatory compliance for NBFCs.

Cybersecurity and Technology Risk

Increasing dependence on digital platforms exposes financial institutions to cybersecurity threats, data breaches, system failures, fraud and other technology-related risks.

The Company recognizes cybersecurity and daa protection as important components of its digital lending strategy and will continue to strengthen system controls, access management, monitoring and technology infrastructure.

Concentration Risk

Rapid growth in a particular product, geography, borrower category or customer segmnt may result in concentration risk. Any adverse development affecting a particular industry, region or borrower group could consequently have a disproportionate impact on the Companys portfolio.

The Company intends to manage this risk through appropriate portfolio diversification, exposre limits, geographic diversification and periodic portfolio reviews.

Economic and Geopolitical Uncertainty

Changes in domestic and global econmic conditions, geopolitical tensions, commodity prices, inflation, exchange rates and global financial-market conditions can indirectly affect borrowers and financial institutions.

A slowdown in economic activity could reduce credit demand and increase borrower stress, while higher inflation or commodity prices could affect the cash flows of MSMEs and individual borrowers.

Operational Risk

The Companys growth and increasing use of technology may increase operational complexity. Errors in processes, inadequate internal controls, fraud, system downtime or human error may adversely affect operations.

The Company continues to strengthen its internal control framework, risk-management systems, audit mechanisms and process-level controls to minimise operational risks.

Talent and Human Resource Risk

The financial services sector requires specialised capabilities in credit underwriting, risk management, technology, collections, compliance and treasury operations. Competition for experienced professionals may increase employee acquisition and retention costs.

The Companys ability to attract, retain and develop qualified personnel will remain important for successful execution of its growth strategy.

3.3 Companys Approach to Opportunities and Threats

The Company believes that sustainable growth in the NBFC sector requires an appropriate balance between business expansion and risk management. Accordingly, Regency Fincorp Limited intends to pursue growth opportunities selectively, with particular emphasis on secured lending, MSMEs, technology-enabled credit delivery and financial inclusion.

The Company will continue to strengthen its credit underwriting framework, portfolio monitoring, collection mechanisms, liquidity management, cybersecurity and regulatory compliance systems.

The Companys strategy is therefore to grow responsibly rather than pursue growth at the cost of asset quality, while maintaining adequate capital, liquidity and risk buffers.

The management remains confident that the Companys focus on underserved customer segments, secured lending, technology- enabled operations and diversified funding can provide a sustainable platform for long-term growth, subject to prevailing economic, regulatory and market conditions.

4. Risk Management and Concerns:

The Company has implemented a formal Risk Management Policy and constituted a Risk Management Committee (RMC) during FY 2025-26 in accordance with RBIs Scale-Based Regulatory framework.

Company has established a structured risk management framework for identification, assessment, monitoring and mitigation of key risks associated with its operations, including credit, liquidity, operational, market, technology and compliance risks. The RMC regularly reviews key risk indicators, portfolio performance, liquidity position, regulatory compliance and emerging risks, and ensures that appropriate mitigation measures are undertaken in a timely manner. The Company follows a prudent credit underwriting process covering customer assessment, repayment capacity, credit history and security, wherever applicable, along with continuous monitoring of the loan portfolio and effective collection mechanisms. The Company also maintains appropriate liquidity and asset-liability management practices and continues to strengthen its internal controls, technology infrastructure and compliance systems. During the year, no significant deterioration in asset quality was observed, and the Company remained focused on maintaining portfolio quality while pursuing sustainable and responsible growth. Going forward, the Company will continue to strengthen its risk management framework in line with the evolving regulatory environment and changing business conditions.

5. Recent Trend and Future Outlook:

NBFCs have emerged as important constituents of Indias financial ecosystem and continue to play a significant role in expanding formal credit to underserved and underbanked segments. Their ability to combine customer-centric lending, faster decision-making, specialised products and regional market understanding has enabled NBFCs to address financing requirements that may not always be adequately served through traditional banking channels.

During FY 2025-26, the NBFC sector continued to evolve towards a more technology-driven, risk-focused and customer-centric operating model. Increasing formalisation of the economy, growing digital adoption and rising credit requirements of MSMEs, self-employed individuals and emerging consumer segments have created significant opportunities for NBFCs. The sector continues to benefit from its ability to offer customised financing solutions, faster turnaround times and wider last-mile reach.

Digital transformation has become a key differentiator in the NBFC industry. Technology- enabled underwriting, digital KYC, automated credit assessment, data analytics, API-based integrations and digital collection mechanisms are increasingly being adopted to improve operating efficiency and customer experience.

NBFCs are also leveraging Al-based tools and alternative data sources to strengthen credit assessment, reduce processing time and improve portfolio monitoring.

The MSME segment remains one of the most significant growth opportunities for the NBFC industry. In India MSME credit market a substantial credit gap continues to exist in the segment. NBFCs, with their specialized underwriting capabilities and ability to provide customized products, are well positioned to bridge this financing gap.

Secured lending, particularly secured MSME and Loan Against Property (LAP) financing, is gaining increasing importance as lenders seek to balance growth with prudent risk management. The combination of collateral- backed lending, disciplined underwriting and technology-enabled credit assessment provides NBFCs with an opportunity to achieve sustainable growth while maintaining asset quality.

Regulatory developments have further strengthened the NBFC operating environment. The continued implementation of the Reserve Bank of Indias Scale-Based Regulatory framework has placed greater emphasis on governance, risk management, customer protection, responsible lending, compliance and operational resilience. This regulatory evolution is expected to encourage stronger and more sustainable business models across the sector.

Against this backdrop, Regency Fincorp Limited is strategically positioned to participate in the evolving NBFC landscape. The Company has been strengthening its focus on secured MSME lending while simultaneously developing its digital lending capabilities. As of March 2026, the Company had an AUM of ?261 crore, with secured lending forming a significant component of its portfolio. The Company is also leveraging Al-based technology across credit scoring, lead generation and loan processing to improve efficiency and customer experience.

The Company believes that the combination of Indias growing MSME financing requirements, increasing financial inclusion, digital transformation and demand for secured credit provides a favourable long-term opportunity. Regency Fincorp intends to deepen its presence in existing markets, expand into high-MSME- density geographies, strengthen technology-led underwriting and scale its secured MSME portfolio.

Looking ahead, the Company aims to build a scalable and well-capitalised NBFC with a strong focus on MSMEs and underserved communities. Its stated growth strategy includes scaling secured MSME/LAP lending, expanding the branch network, introducing additional financing products, leveraging AI-based underwriting and digital platforms, diversifying funding sources and maintaining strong capital adequacy.

The Company has set an ambitious long-term vision of achieving AUM of ?3,000 crore or more by FY2030, supported by geographic expansion, technology-led underwriting, financial inclusion and a disciplined approach to capital and risk management.

We believe that NBFCs that combine prudent risk management, strong capitalisation, technology adoption, efficient operations and customer-centric products will be well placed to deliver sustainable growth. Regency Fincorp Limited remains committed to pursuing responsible and profitable growth while strengthening its position as a technology- enabled NBFC focused on secured MSME lending and financial inclusion.

Internal Control Systems and their Adequacy:

The Company maintains a well-documented internal control system aligned with its scale and complexity. The Internal Auditor reviews operations and reports directly to the Audit Committee. No material weaknesses were observed during the year. Compliance with statutory and regulatory requirements was regularly monitored.

6. Financial Performance with respect to operational performance:

S no Financial Results	Amount (In Lakh)
1 Total Income	4,005.14
2 Profit After tax (PAT)	1,341.68
3 Net Worth	16049.41
4 Earning Per Share (EPS )	1.67

The Companys capital structure strengthened following preferential allotments and warrant conversions during the year, enabling business expansion and balance sheet growth. A detailed financial analysis is provided in the Directors Report and audited financial statements.

7. Material developments in Human Resources/Industrial Relations front, including the number of people employed:

The Company has undertaken employees development initiatives, which have very positive impact on the morale and team spirit of the employees. The company has continued to give special attention to human resources and overall development.

8. Details of Significant Changes in Key Financial Ratios:

Particulars	FY 2025-26	FY 2024-25	% change
Debtors Turnover	NIL	NIL	-
Inventory Turnover	NIL	NIL	-
Interest Coverage Ratio	2.77	1.84	50.54
Current Ratio	2.7	2.25	20.00
Debt Equity Ratio	0.57	0.40	42.50
Operating Profit Margin	86.04	38.22	125.11
Net Profit Margin	38.93	24.93	56.15
Return on Net Worth	-	4.08	-

Cautionary Statement:

Statement in this Management Discussion and Analysis Report, Describing the Companys objectives, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

For and on behalf of the Board of Directors
Regency Fincorp Limited
Sd/-	Sd/-
Gaurav Kumar	Sarfaraz Mallick
Managing Director	Whole Time Director
DIN:06717452	DIN: 10255433
Date: 2nd Setpember, 2026
Place: Zirakpur