Repco Home Finance Ltd Management Discussions

1. MACROECONOMIC AND INDUSTRY STRUCTURE & DEVELOPMENTS: A. Macroeconomic Outlook

The global economy continued to demonstrate resilience during 2025 with 3.4% 3.4% growth despite a series of significant geopolitical and economic disruptions. However, a fresh military conflict in the Middle East, escalating since the end of February 2026, has introduced renewed uncertainty into the global economic environment. This development represents the latest in a succession of geopolitical events that have reshaped international relations and heightened regional tensions across major economies.

The conflict has affected global markets through elevated commodity prices, particularly energy and food, while also influencing inflation expectations and increasing volatility across financial markets. Emerging market and developing economies that are dependent on commodity imports remain particularly vulnerable, especially where currency depreciation amplifies imported inflation pressures.

The broader economic implications will depend substantially on the duration, intensity, and geographic spread of the conflict, all of which remain uncertain at this stage. The latest disruption also comes at a time when the global trading system continues to adjust to changes in United States trade policies introduced over the past year. In response, several countries have accelerated bilateral and regional trade negotiations to strengthen economic partnerships and diversify trade relationships.

Despite these challenges, global economic activity has remained relatively stable. Prior to the onset of the Middle East conflict, the global economy had performed better than anticipated, with global growth in the fourth quarter of 2025 reaching an annualized rate of 3.9% 3.9% . The International Monetary Fund (IMF) has projected global growth at 3.3% 3.3% for 2026 and 3.2% 3.2% for 2027, indicating a moderate but resilient growth trajectory amid persistent geopolitical and macroeconomic uncertainties.

Against the backdrop of global volatility, the Indian economy continued to exhibit strong macroeconomic resilience and remained one of the fastest- growing major economies globally.

Although higher energy prices and supply chain disruptions arising from geopolitical tensions exerted pressure on economic activity worldwide, Indias economic fundamentals remained robust.

Indias resilience has been supported by several structural strengths, including substantial foreign exchange reserves, moderate inflation levels, predominantly rupee- denominated public debt, a well- capitalized banking system, and ongoing efforts toward trade diversification. These factors have helped cushion the economy against external shocks and maintain macroeconomic stability.

Economic growth remained strong throughout 2025, building upon the momentum achieved during the post- pandemic recovery period. Growth was healthy in the first quarter and strengthened further during the subsequent quarters. In response to evolving economic conditions, the Reserve Bank of India adopted an accommodative monetary stance by reducing policy interest rates and easing liquidity conditions to support growth. Additionally, macroprudential measures introduced in earlier periods were selectively relaxed as underlying financial conditions improved.

On the fiscal front, the Union Budget for FY2026 announced significant tax relief measures aimed at supporting household consumption and sustaining economic momentum. These measures, combined with ongoing structural reforms and policy initiatives, contributed positively to domestic demand and investment activity.

During the year, global trade dynamics remained fluid and uncertain. United States reciprocated higher tariffs on India. This development came as a surprise to global markets and led to downward revisions in growth forecasts for certain export- oriented sectors. Despite these external challenges, Indias economic growth trajectory remained resilient, supported by continued structural reforms, policy interventions, improving domestic demand, and strong underlying macroeconomic fundamentals.

The outlook for the Indian economy continues to remain favorable. Inflationary pressures are relatively contained, agricultural prospects remain supportive due to favorable rainfall patterns, and external sector vulnerabilities are manageable given low external liabilities and comfortable foreign exchange reserves.

The banking sector remains healthy, liquidity conditions are adequate, credit growth continues at a stable pace, and corporate balance sheets remain strong. The overall flow of funds to the commercial sector also continues to support investment and economic activity.

Reflecting confidence in the underlying strength of the economy, the World Bank has projected real GDP growth of 6.6% 6.6% for FY2026- 27 for India, indicating continued recovery momentum and sustained economic expansion despite prevailing global uncertainties. The provisional estimates of Indias GDP is 7.70% 7.70% for FY2025- 26.

(Charts on GDP Growth and Quarter-wise Indias GDP Growth Movement are included in the document)

Reference: World Economic Outlook: Global Economy in the Shadow of War, April 2026. Source-Ministry of Statistics and Programme Implementation

B. Real Estate & Housing Industry Outlook

The real estate sector continues to play a significant role in Indias economic growth trajectory. The sector remains an important pillar of the services economy while maintaining strong interlinkages with allied industries such as construction, cement, steel, financial services, and housing finance.

Over the years, the sector has undergone a meaningful structural transformation driven by a series of policy and regulatory reforms aimed at improving transparency, accountability, and formalization. Key initiatives such as the implementation of the Real Estate (Regulation and Development) Act (RERA), introduction of the Goods and Services Tax (GST), and the Governments "Housing for All" mission have strengthened institutional confidence and improved governance standards across the industry.

In parallel, several demand- side initiatives have enhanced housing affordability and improved access to financing. Measures including interest subvention schemes under Pradhan Mantri Awas Yojana (PMAY- Urban), establishment of the Affordable Housing Fund, lower interest rate regimes during the post- pandemic period, and streamlined credit appraisal and disbursement processes have collectively supported sustained growth in housing demand.

Urban infrastructure development has also emerged as a significant growth catalyst for the sector. Government- led initiatives such as the Smart Cities Mission and the Urban Infrastructure Development Fund (UIDF) have accelerated infrastructure creation and improved connectivity across Tier 2 and Tier 3 cities, thereby expanding the geographic base of residential demand and creating new growth opportunities for developers.

Supported by these structural reforms and favorable macroeconomic conditions, the real estate sector entered a sustained growth cycle beginning September 2021 following the COVID- 19 disruption. The recovery was driven by improved consumer sentiment, rising preference for ownership- led housing demand, and increased allocation of household savings toward physical assets, particularly residential real estate.

The sectors momentum has continued through recent quarters, aided by improving affordability levels, stable financing conditions, and moderating inflationary pressures. Housing sales volumes have consistently remained above pre- pandemic levels witnessed during FY2022- FY2024, reflecting sustained end- user demand across key markets.

The housing finance segment has also recorded robust expansion, underlining the increasing financialization of residential demand. Outstanding individual housing loans increased from approximately Rs. 10 lakh crore as of March 2015 to over Rs. 37 lakh crore by March 2025. Consequently, housing loans as a percentage of GDP increased from nearly 8% 8% to over 11% 11% during the same period, reflecting deeper mortgage penetration, enhanced credit accessibility, and growing formal participation within the housing ecosystem.

Overall, the long- term outlook for the Indian real estate sector remains positive, supported by favorable demographics, urbanization trends, rising income levels, continued policy support, and sustained infrastructure development across emerging urban centers.

C. Housing Finance Industry Outlook

The Indian housing finance sector has witnessed sustained growth over the past decade, supported by the Governments continued focus on "Housing for All", favorable demographic trends, increasing urbanization, rising aspirations for home ownership, and the deepening reach of the financial sector. The sector has also benefited from policy initiatives such as the Pradhan Mantri Awas Yojana (PMAY) and interest- linked subsidy schemes, which have improved affordability and expanded access to formal housing credit across underserved segments. Reflecting this structural momentum, the ratio of outstanding individual housing loans to GDP increased from 8.0% 8.0% in FY2014- 15 to 11.2% 11.2% in FY2024- 25, indicating the growing penetration of housing finance in the Indian economy.

Banks and Housing Finance Companies (HFCs) continue to play a pivotal role in supporting housing credit growth through a diversified suite of loan products catering to varied borrower segments. Between March 2023 and September 2025, the aggregate outstanding individual housing loan portfolio of Banks and HFCs increased from Rs. 28.26 lakh crore to Rs. 37.18 lakh crore, registering a compound annual growth rate (CAGR) of 7.35% 7.35% . On a year- on- year basis, outstanding individual housing loans grew by 9.5% 9.5% as of September 2025. Further, disbursements by primary lending institutions during H1 FY2025- 26 increased to Rs. 4,36,051 crore as against Rs. 4,14,580 crore in the corresponding period of the previous year, reflecting resilient demand across housing categories.

While banks continue to dominate the overall housing finance market, particularly in the higher- ticket and premium home loan segments, the competitive landscape differs meaningfully in the affordable housing space. In lower ticket- size loans, specialized HFCs with strong regional franchises, deep customer understanding, customized underwriting capabilities, and extensive last- mile distribution networks have emerged as key market participants. These institutions have been instrumental in extending formal housing credit to economically weaker sections, self- employed borrowers, and customers operating in the informal economy, thereby bridging the affordability gap and expanding financial inclusion. As of September 2025, nearly 44% 44% of the outstanding individual housing loan portfolio of HFCs comprised loans in the ticket- size category ranging from up to Rs. 2 lakhs to Rs. 25 lakhs, underscoring the sectors strong focus on affordable housing finance.

The affordable housing finance segment is expected to maintain healthy growth momentum, with Assets Under Management (AUM) projected growth to stabilize at around 20% 20% in FY2026- 27. Growth is expected to be driven by sustained end- user demand, continued urban migration, favorable demographics, increasing formalization of borrower income profiles, and ongoing government support through subsidy- linked schemes and affordable housing initiatives.

At the same time, yields across the sector are expected to moderate during FY2026- 27 as the transmission of policy rate cuts gradually reflect in lending rates. This may exert some pressure, particularly for lenders with a higher proportion of floating- rate portfolios. Nevertheless, overall profitability for affordable housing finance players is expected to remain resilient, supported by multiple factors including improved operating leverage, rising contribution from non- interest income streams such as direct assignment (DA) transactions, and a calibrated increase in the share of higher- yielding products such as Loan Against Property (LAP). Collectively, these factors are expected to partly offset margin compression and support earnings growth across the sector.

2. REGULATORY CHANGES

The Reserve Bank of India (RBI) has introduced a variety of regulations applicable to Housing Finance Companies (HFCs) and other Non- Banking Financial Companies (NBFCs) to unify the laws that apply to HFCs/NBFCs and banks. The following are examples of these regulations:

Strengthening of Governance and Compliance Framework SEBI, through amendments to the Listing Obligations and Disclosure Requirements Regulations, has further strengthened the governance framework applicable to listed entities by prescribing enhanced eligibility and reporting structure requirements for the Compliance Officer. The revised framework emphasizes greater accountability and alignment of the compliance function with senior management and Board oversight mechanisms.

Further, RBI issued amendments to the Credit Risk Management Directions applicable to NBFCs/HFCs, significantly expanding the scope of related party and connected lending regulations. The revised framework introduces enhanced governance requirements relating to lending to promoters, directors, Key Managerial Personnel ("KMPs"), specified employees and related entities, along with stricter conflict management, approval, monitoring and disclosure requirements. These measures are expected to strengthen credit governance standards and reinforce prudent lending practices across the sector.

Customer Due Diligence and KYC Compliance RBI also introduced amendments to the Know Your Customer ("KYC") Directions, 2016, with a greater focus on customer outreach, periodic updating processes and audit trail maintenance. The revised directions provide additional timelines for periodic KYC updating for low- risk customers and mandate structured customer communication mechanisms, including advance intimations and reminders through multiple channels. The amendments are aimed at improving customer convenience while ensuring continued compliance with regulatory requirements.

Credit Information Reporting Framework During the year, RBI strengthened the credit information reporting architecture through amendments to the Credit Information Companies framework. The revised directions require more frequent reporting of borrower data, including incremental updates and overdue position changes, thereby enhancing the accuracy, timeliness and reliability of credit information available within the financial system. The framework also places increased emphasis on data quality, correction timelines and integration of CKYC identifiers.

Sector Support Measures In view of global trade disruptions and the resultant stress on export- oriented sectors, RBI introduced temporary trade relief measures for eligible borrowers. The framework permits regulated entities, including HFCs, to provide repayment relief, moratorium support and extended export credit tenor to eligible standard accounts. These measures are intended to support viable businesses facing temporary cash flow disruptions while preserving overall financial stability.

3. SWOT ANALYSIS OF THE COMPANY

STRENGTHS

Adequate capitalisation profile.

Strong profitability ratios.

Strong presence in South India and a significant Brand in Tamil Nadu.

Diversified products cater to all segments of customers.

Loyal Customer base.

Strong in house sales team.

A sound collection team

Minimal attrition in senior management, reflecting stable leadership team

Robust credit appraisal system and risk management system

WEAKNESSES

Moderate digital transformation compared to peers.

Finding and retaining exceptional talent can be challenging.

Restricted borrowing profile.

Geographical concentration of credit exposure.

OPPORTUNITIES

Credit demand across the majority of customers to remain healthy.

Healthy profitability, notwithstanding some margin and borrowing cost pressures.

Increase in Housing demand due to continued initiatives by GoI for affordable housing.

Underserved semi- urban and rural markets

THREATS

Competitive pressures to remain elevated, especially from banks.

Rise in Borrowing costs and stress on margins.

Inadequate access to commensurate funding at competitive rates.

Attrition of managerial personnel.

4. OUTLOOK

In FY2025- 26, our company has aimed to capitalize on the momentum established in FY2024- 25, navigating the evolving economic landscape with strategic initiatives and a focus on sustainable growth.

With cumulative disbursements of around Rs. 39,995.32 crores and an AUM of Rs. 15,879.68 crores as of FY 2025- 26, we continue to serve over 1.14 lakh active customers. Expanding across 12 states and one union territory, our 242 touchpoints cater to tier- 2 and tier- 3 cities, fulfilling homeownership dreams. This milestone is a testament to the trust and support of our valued customers, investors, vendors, credit rating agencies, analysts, and employees, whose contributions have shaped Repco Home Finance into a trusted brand that turns aspirations of homeownership into reality. As we embrace the future, we remain committed to sustained growth, ensuring greater accessibility and impact for years to come.

Strategic Focus Areas

Loan Book Composition: The Company will continue to maintain an optimal blend of salaried and non- salaried loans, ensuring a balanced risk profile and catering to diverse customer segments. Maintain a balanced portfolio with a slight tilt towards salaried professionals, ensuring a healthy risk profile and aligning with industry peers.

Non- Housing Portfolio: The non- housing book will be maintained around 35% 35% , aligning with our strategic diversification goals.

Geographical Expansion: Efforts will be intensified to deepen penetration in Andhra Pradesh, Karnataka, Telangana and Western part of India, enhancing brand presence and tapping into underserved markets through new branch openings.

Customer Acquisition & Upticking Ticket Size: Focus on acquiring creditworthy customers and increasing ticket sizes, aligning with the upward trend in average loan amounts driven by rising property prices, leveraging the regulators dispensation risk weight etc.

Fee- Based Income: Cross- selling initiatives will be emphasized to enhance fee- based income streams, contributing to revenue diversification.

Net Interest Margin (NIM) & Spread: Efforts will be made to maintain consistent NIM and spread levels, ensuring profitability amidst market fluctuations.

Asset Quality: Prioritize asset quality through stringent credit assessments and proactive recovery measures.

Digitization: Ongoing digitization efforts will aim to improve turnaround times and process efficiencies, enhancing customer experience and operational effectiveness.

Throughout the year, the Company has achieved significant advancements across various departments, strengthening its overall operational capabilities and efficiency.

Operational Enhancements

Technological Implementation: During FY26, the Company advanced its digital transformation by deploying HRMS, Audit Management, Treasury Management, a Customer Portal, Fixed Asset, an Enterprise Data Warehouse and the Expected Credit Loss framework, resulting in greater process automation, improved data availability and faster, data driven decision making. The Company also strengthened its security posture with Privileged Access Management and multi factor authentication, enhanced email protection, and implemented an enterprise backup and recovery framework to ensure business continuity and disaster recovery readiness.

Recovery Efforts: The Company intensified its recovery efforts by systematically attending to all its NPA accounts and following the remedies available under the SARFAESI Act. More than 3,422 notices were issued during the year (FY2025- 26). This assisted in bringing the borrowers up for discussion and ultimately reducing the NPA numbers. The actions would continue.

Regional Optimization: The Company has implemented localized file processing by establishing region- level operations and deploying technical and legal resources to enhance turnaround time (TAT) and operational efficiency.

The Company remains confident that the strategic measures implemented will contribute to enhancing its performance over the medium to long term, fostering sustainable growth and operational excellence.

Technological Integration: The adoption of AI- driven credit scoring and digital platforms will enhance our ability to assess and serve a broader customer base, particularly in underserved segments.

By aligning our strategies with these market dynamics, we aim to strengthen our position in the housing finance sector, delivering value to our stakeholders and contributing to the broader goal of translating aspirations of people to own a house into reality.

5. CORPORATE OVERVIEW

The Company operates in two business segments: Individual Home Loans and Home Equity. For individual borrowers in the salaried and non- salaried (selfemployed professional and self- employed non- professional) segments, the Company offers a range of customized home loan products to meet their specific needs.

(Diagram showing Construction or Purchase (Dream Home Loan, Composite Loan, Fifty Plus Loan, NRI Housing Loan, Plot loan, Repco Privilege , Green Home, Easy Home, Advantage, Home 25) and Repair and Renovation/Extension/Multipurpose loans (Home Makeover Loan, Super Loan), and HOME EQUITY (Prosperity loan, New Horizon Loan, Commercial Real Estate (CRE) Loan, Repco Nivaran Plus Loan))*

As of March 31st 31 st , 2026, about 67.22% 67.22% of the loan book constituted housing loans with the remaining about 32.78% 32.78% non- housing loans. All loans extended by the Company are to retail clients. The Company has a proportionate segmental mix of salaried and non- salaried customers, constituting 47% 47% and 53% 53% of the outstanding loan book, respectively. This mix of customers helps in maintaining the balance between the profit margin and credit cost.

6. GEOGRAPHIC PRESENCE

The Company has 242 points of presence as of March 31st 31 st , 2026, which included 32 satellite centers and 210 branch outlets. We are present in 12 states as well as a Union Territory. We also have two asset recovery branches.

In FY2025- 26, the Company established eight new branches across Karnataka, Madhya Pradesh, Tamil Nadu and Telangana in addition to one new satellite centers in Tamil Nadu. During the year, the Company also converted thirteen satellite centers to branches. Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Kerala, Maharashtra, Odisha, West Bengal, Gujarat, Madhya Pradesh, Jharkhand, Rajasthan, and the Union Territory of Puducherry are all part of the Companys retail network.

(Map showing state/UT distribution and a table showing Network counts: Tamil Nadu 122, Karnataka 32, Maharashtra 20, Andhra Pradesh 19, Telangana 16, Gujarat 9, Kerala 7, Rajasthan 7, Madhya Pradesh 5, West Bengal 2, Puducherry 1, Jharkhand 1, Odisha 1, Total 242)

The Companys sources of customer acquisition are customer walk- ins, referrals, Direct Selling Agents (DSA), and Direct Sales Trainees (DST). Majority of the sales is through in house sales team, walk in customers and referrals.

7. RISK MANAGEMENT

The Companys business activities expose it to various risks, including Credit risk, Operational risk, Interest Rate risk, Liquidity risk, Reputational risk, Compliance risk and Solvency risk. Risk management forms an integral part of the Companys business. The objective of the Companys risk management system is to identify, assess, measure, manage and suggest ways to quantify the risks and control/mitigate various types of risks involved in each area of activity.

The Company recognizes that the identification of risk is the most crucial function in managing and mitigating the risk. The Company identifies the risks in each function/activity by taking inputs from all the departments and by analyzing gaps in the existing processes and procedures. The overall responsibility of identifying, monitoring, and evaluating risks lies with departmental heads and executive management. The Company analyzes risks in terms of consequence and likelihood of its impact. The analysis considers a range of potential outcomes and the possibility of those consequences occurring.

The Companys risk management committee, comprising the Chief Risk Officer and other senior management team members, meets regularly to assess the adequacy of the existing risk management system and discuss emerging risks, operational or otherwise. The Company has constituted a Board Level Committee for Risk Management. The Board reviews the risk management practices of the Company and assists the Company in its efforts.

(I) Rigorous credit appraisal keeps credit risk mitigated The Companys credit approval process is organized and defined and comprises a well- established protocol for complete credit evaluation. The process, which happens at the branch, Regional and Head Office level, ensures a high level of checks. A preliminary appraisal is performed by the branch manager, assisted by branch- level valuers, and lawyers. The same is again revalidated at the Regional Office level up to a certain threshold before sanction and at Head Office level above the threshold limit. Each borrower is rated based on a dynamic credit scoring model comprising over 15 parameters, including credit bureau score, carrying different weights. Credit bureau scores are tracked and taken seriously, and proposals with scores below a threshold limit without justifications are not onboarded. Apart from that, we are now capturing and analyzing granular characteristics of loan accounts, identifying patterns and behaviors, and making the credit underwriting process more effective. Pricing of a loan comprises of a minimum lending rate plus premium to loan specific characteristics like quantum, risk and deviations. All efforts are made to ensure that our pricing covers the risk we underwrite, and we believe that this pricing discipline will generate consistent and superior return ratios. To limit the magnitude of credit risk, prudential limits are laid down on various aspects of credit such as individual borrower- wise limits for housing loans and loan against properties, etc. The Loan to Value (LTV) ratio is fixed for different categories of loans taking into account the regulatory prescriptions. Further combination of advanced analytics, proactive monitoring, and scenario- based assessments like Vintage curve analytics, Migration matrix, Portfolio analysis etc is carried out and reported to committees on periodical basis to ensure portfolio quality and business sustainability.

(II) Operational risk is mitigated using various tools Operational risk includes the risk of loss due to internal system, process, or people failures or external occurrences. The Company has put in place various controls to mitigate operational risks. An ongoing monitoring of loan accounts is ensured by the credit monitoring department at the head office that tracks, among other things, the repayment capacity of the borrower, cash flow adequacy and proper valuation for the security etc. and informs process owners immediately. Credit review team, checks at random, if the approval by the sanctioning authority is in line with the Credit Policy of the Company. Credit offsite team at Head Office checks loan documentation and ensures compliance to loan sanction conditions before giving disbursement clearance. Operational risk is also being monitored through introduction of RCSA and specific Key Risk Indicators (KRIs) for each line of business activity. KRIs are objective measures used to track the current risk and control environment and can act as early warning signals to potential risk and control issues. They form part of periodical Operational Risk Management Reporting to the Board level committees. Post sanction of the loan, our Customer Service Department takes feedback from the customers on their onboarding experience.

Inspection of each branch based on Risk Based Internal Audit system is performed by the internal inspection team at regular intervals. Concurrent audit is done at key branches identified in terms of outstanding loans and NPAs by retired senior officials of banks entrusted with special duty. Senior Company officials also make surprise visits to branches to check if all processes and best practices are followed. Apart from that, we take the help of external Risk Containment Unit to perform KYC documents check and risk checks on all plot loans and other loans of ticket size higher than Rs. 50 lakhs for non- documented income profile. Our Recovery team starts following up with customers and takes action when an account defaults on payment.

To improve operational efficiency, quarterly board level discussions are held on reports shared by recovery officers, external audit firm, internal Inspection team and the Operations team, who oversee monitoring of the Companys offsite transactions and KYC- related compliance. New learning is put to use immediately.

Performance review of all branch personnel is undertaken twice a year by the senior management team.

(III) Interest rate risk is mitigated by matching maturity and repricing of assets and liabilities The Company has formulated Asset- Liability Management (ALM) policy, which lays down mechanisms for assessing various types of risks and dynamically altering the asset liability portfolio to manage such risks. The maturity profile of assets and liabilities are monitored on an ongoing basis by Asset Liability Management Committee (ALCO) - a strategic decision- making body constituted by the Board, to mitigate the risks arising from cash flow mismatches, comprising of the Managing Director, Chief Operating Officer, Chief Development Officer, Chief Business Officer, Chief Financial Officer, Chief Risk Officer and a other senior members of the Company. In addition, the Company has put in place an efficient and transparent interest rate transmission policy in the form of Minimum Lending Rate (MLR), which is reviewed every month and applicable immediately on all new loans. The frequency of pricing reset for the existing loans is three months.

At any point in time, an optimal balance between short- term and long- term borrowings is maintained in sync with the extant asset and liability profile. Most long- term borrowings and on- lending happen at floating rates, which act as a hedge when interest rate volatility is high.

(IV) Liquidity Risk is mitigated by ensuring availability of regular funding sources to enable uninterrupted lending activity by the Company Management of liquidity risk is the ability of a Company to meet debt obligations as they become due, without adversely affecting the Companys financial condition. This assumes significance on account of the fact that liquidity crisis, even at a single institution, can have systemic implications. The cost incurred in maintaining sufficient liquidity is adequately incorporated in the internal product pricing, performance measurement and new product approval process for all material business lines, products and activities. Therefore, management of liquidity involves optimization of cost of liquidity and profitability of the Company. Maturity based cash flow mismatches (traditional maturity gap) in the balance sheet positioning are identified as a potential source of liquidity risk and they are being measured by following a flow approach on a regular basis. For measuring the net funding requirements under various time buckets, maturity profile as suggested by RBI/NHB is used and the cumulative deficits in each time bucket is monitored vis- a- vis. the pre- determined tolerance levels. The funding requirement and deployment of surplus funds are monitored regularly. In addition to the above, we adhere to the guidelines on Liquidity Coverage Ratio (LCR), which stood at 187.60% 187.60% as on March 31st 31 st , 2026 as against the regulatory prescription of 100% 100% .

(V) Solvency risk is mitigated by keeping liquid investments To mitigate solvency risk, the Company has an investment policy in place. The idea is to create and maintain an emergency buffer to be used in the unlikely event that things go out of hand. During the year ending March 2026, the Company made multiple investments in short- term fixed deposits with Banks, Government securities and Liquid Mutual Funds. The value of short- term investments at the end of the year was Rs.210.29 crores. In addition, the Company had a bank balance to the tune of Rs.97.01 crores. The total liquidity was about 1.88% 1.88% of the balance sheet size as of March 31st 31 st , 2026.

8. BORROWING PROFILE

The Company has funding sources spread across three verticals viz. refinance from NHB, term loans and working capital loan facilities from Repco Bank and other banks. The Company has also issued Non- Convertible Debentures (NCDs), Commercial Papers (CPs) and Pass - Through Certificates (PTC) during the year.

As of March 31st 31 st , 2026, 85.5% 85.5% of the Companys borrowings were by way of borrowings from Commercial Banks, 6.2% 6.2% by way of refinancing from the National Housing Bank (NHB), 5.4% 5.4% from Repco Bank, 1.2% 1.2% by way of Commercial Papers, 1% 1% from Non- Convertible Debentures and 0.7% 0.7% from Securitization - PTC

As of March 31, 2026, 1.31% 1.31% of overall borrowings were on a fixed rate basis and 98.69% 98.69% on floating rate basis. The average tenor on borrowing was 8.4 years.

Borrowing source	Rs. crores
National Housing Bank	758.42
Repco Bank	659.01
Commercial Banks	10,440.09
Commercial Papers	147.70
Non-Convertible Debentures	125.00
Pass-Through Certificates	84.97
Total	12,215.19

Excluding interest accrued and EIR Adjustment

(Bar chart showing Change of Borrowings from March 2025 to March 2026) (Line chart showing Weighted average borrowing rate and Cost of borrowings)

9. CREDIT RATING

The Companys short- term and long- term debt facilities are rated by two rating agencies - CareEdge Ratings & ICRA Limited.

The long- term facilities include both Companys term loan facilities with banks and other financial institutions.

The Companys Non- Convertible Debentures facility is rated AA- (Stable) rating by ICRA Limited. The Company has also issued Pass - Through Certificates in FY26 with senior tranche pool rating of AAA (SO).

During the year FY2025- 26, rating agencies ICRA Limited & CareEdge Ratings reaffirmed AA- (Stable) rating assigned to Companys term loan facilities and A1+ rating assigned to Companys Commercial Paper facility.

10. CAPITAL ADEQUACY

RHFIs Capital Adequacy Ratio (CAR) as of March 31st 31 st , 2026, was 36.66% 36.66% consisting of Tier- 1 capital of 36.23% 36.23% & Tier- 2 capital of 0.43% 0.43% .

(Bar chart showing Capital Adequacy Ratio for March 31, 2025: Tier 1 36.41%, Tier 2 0.68%; March 31, 2026: Tier 1 36.23%, Tier 2 0.43%)

11. ASSET QUALITY

Over the years, the Company has developed robust risk management systems & processes in all areas of operations like loan origination, credit appraisal, loan disbursement, and collection & recovery. The new Loan Lifecycle Management System (LLMS) software introduced during the year also facilitates improving our monitoring mechanism.

The Company was successful in bringing down its Gross- Nonperforming Assets (GNPA) numbers significantly. Delinquency of a few accounts is unavoidable considering the Companys exposure to unorganized sector. To strengthen its provision coverage for any unexpected credit losses in its stage 3 accounts, the Company has retained most of the provisions released due to recoveries made during the year. NPAs (Stage- 3) has decreased to 2.55% 2.55% (Rs. 405.25 crores excluding Interest Accrued) of the overall loan book as of March 31st 31 st , 2026, compared to 3.26% 3.26% (Rs. 472.91 crores excluding interest accrued) in the previous year.

The Provision Coverage Ratio on Stage- 3 assets stood at about 54.9% 54.9% (Excluding accrued interest) as of March 31st 31 st , 2026. About 98.5% 98.5% of the loans in Stage- 3 were under various stages of SARFAESI as of March 31st 31 st , 2026.

12. INVESTMENTS

Repo Micro Finance Limited (RMFL) was incorporated in 2007 as Repco MSME Development & Finance Ltd. and registered as an NBFC with the Reserve Bank of India in 2010. Later, it was classified as an NBFC- MFI in December 2013. The company is promoted by Repatriates Cooperative Finance & Development Bank Ltd. (Repco Bank), which is a Government of India enterprise. RMFL is engaged in the activity of extending loans to economically backward women through the Women SelfHelp Group for income generation purposes. The main objective of the company is to assist poor women in their upliftment by promoting entrepreneurship and providing microcredit and finance in different loan cycles at reasonable rates of interest. Upscaling the underprivileged through financial inclusion and the creation of first- generation entrepreneurs.

The Company held investments in the equity of this unlisted associate Company, RMFL, to the extent of Rs. 31.6 crores (3,16,00,000 equity shares of Rs.10/- each) as of March 31st 31 st 2026. During FY2025- 26, we have received Rs. 3.79 Crore in the form of dividend from Repco Micro Finance Limited.

13. OPERATIONAL HIGHLIGHTS & PERFORMANCE SUMMARY

The Company ended the year with a resilient balance sheet, higher provision cover, and strong capital levels. The Companys primary business is housing finance. All other activities of the Company revolve around the main business.

During the year, the Company remained focused on preserving the quality of the balance sheet. Business performance in the last quarter was meaningfully better as the consumer confidence of our target group started showing an improvement. The values of FY25 are restated because of deferred tax liability on special reserve reversal and impact of implementation of daily interest rest method as advised by NHB.

A. Business Summary (Rs. Crores)

Particulars	Sanctions*	Disbursements*
Q1 FY2025-26	907	829
Q2 FY2025-26	1,206	1,069
Q3 FY2025-26	1,087	1,064
Q4 FY2025-26	1,320	1,186
Total	4,519	4,148

*Numbers round off to near Crore

B. Return on Assets Tree The ratio of income and expenses to average loan assets

Metric	FY 2023-24	FY 2024-25	FY 2025-26
Net interest margin	5.2%	5.3%	5.4%
Other income	0.1%	0.0%	0.0%
Non-interest expenses	1.3%	1.5%	1.7%
Credit cost	0.0%	(0.3%)*	(0.2%)*
Income Tax	1.0%	0.9%	0.9%
Return on assets	3.0%	3.2%	3.0%

Percentages rounded off to one digit.

(Bar charts showing Sanctions (Rs. Crores), Quarterly Sanctions & Disbursements (Rs. Crores), ROA Tree - FY2025-26, Disbursements (Rs. Crores), Loan Book (Rs. Crores), Income from Operations (Rs. Crores), Net Interest Income (Rs. Crores), Profit after Tax (Rs. Crores), Net Owned Funds (Rs. Crores), Debt (Rs. Crores), Gross NPA (%) , Net Interest Margin (%), Return on Assets (%), Return on Equity (%)#, Leverage (X), and Return on Equity (%) and Leverage (X))*

14. INTERNAL AUDIT & CONTROL

The Company has put in place organized and effective internal control systems in sync with nature of business and scale of operations. The Company has implemented "Risk based Internal Audit" methodology as per guidelines specified by Reserve Bank of India (RBI).

Risk Based Internal Audit (RBIA) is an internal audit methodology which is primarily focused on assessing the inherent risk involved in the activities or system and provide assurance to the management that risk is being managed within the defined risk appetite level.

RBIA team was further strengthened to intensify the thrust on evaluation of branches and department/process to ensure that the functioning is in consonance with carefully formulated and well documented policies of the Company, in order to plug loopholes and improve customer service.

Details of the audit report of Branch Audit, Concurrent Audit and Departmental Audit are placed before Audit Committee of the Board on a quarterly basis for review. The report of standalone Information Security (IS) audit of IT systems by external IT auditors and special audit for evaluating the efficiency and effectiveness of existing internal control system are reviewed by Audit Committee as well as IT strategy committee periodically. The operation and performance of Audit department are reviewed by Audit Committee of the Board.

Evaluation of the effectiveness and appropriateness of Internal Control systems and their compliance, the robustness of internal processes, policies, accounting procedures, and compliance with laws and regulations are the goals of these efforts. Stringent policies are in place to ensure that the assets and properties of the Company are utilized in the best interest.

15. INFORMATION TECHNOLOGY

Technology & Digital Transformation During FY26, the Company continued to make substantial progress in its digital transformation journey, with a strong emphasis on operational efficiency, risk management, and technology- driven governance.

Out of 19 applications envisaged under the phased digital transformation program (Phase I - 8 and Phase II - 11), 18 applications have been successfully deployed and are operational. During FY 2025- 26, the Company implemented seven critical systems, including the Human Resource Management System (HRMS), Audit Management System, Treasury Management System, Customer Portal, Fixed Asset System (covering Accounts Receivable, Accounts Payable, and Procure- to- Pay), Enterprise Data Warehouse (EDW), and Expected Credit Loss (ECL) framework. These implementations have significantly enhanced process automation, data availability, and decision- making capabilities across functions.

The Company has also progressed with in- house development initiatives, including the phased rollout of Re- KYC and Anti- Money Laundering (AML) solutions. These initiatives are expected to further strengthen regulatory compliance, improve customer lifecycle management, and enhance risk monitoring mechanisms.

Information Security & IT Infrastructure The Company has undertaken several initiatives to strengthen its cybersecurity posture and IT infrastructure resilience.

Privileged Access Management (PAM) solution has been implemented to enforce robust access controls across critical systems. The deployment of multi- factor authentication has enhanced security around privileged accounts and reduced the risk of unauthorized access.

In the area of email security, the implementation of Domainbased Message Authentication, Reporting and Conformance (DMARC) has improved protection against phishing and spoofing attacks, while also providing enhanced visibility into email communication channels.

To ensure data integrity and business continuity, a comprehensive backup and recovery framework has been established through the deployment of an enterprise- grade backup solution. This has strengthened the Companys ability to efficiently manage backup and restoration of databases and virtual environments, thereby improving disaster recovery preparedness.

Further, a Data Loss Prevention (DLP) solution has been implemented to safeguard sensitive information. The system enables data classification at the user level and enhances monitoring and control over data movement, thereby reinforcing the Companys data security and compliance framework.

16. HUMAN RESOURCES

To achieve its long- term goals, the Company thinks that recruiting, developing, and keeping a quality team is essential. In order to do this, the Company gives staff members the internal and external training they need, to stay current on industry benchmark practices in the home finance sector. 565 employees took part in 46 training programs during the course of the year.

The Organization has created jobs that are efficient, meaningful, and engaging through the use of strategic job design (KRA and KPI), extending career paths, manageable skill sets, and internal talent pools to establish long- term talent access. Because of the ever- changing nature of the sector, the Company actively responds to employee needs, embraces flexible work arrangements, and provides a professional work environment while upholding positive working relationships. Throughout the year, the Company hired 104 new staff members. As of March 31st, 2026, the Company had 1384 employees on its rolls.

	For and on behalf of the Board of Directors
	Sd/-
	Managing Director T Karunakaran & CEO
Date : 21 st May, 2026	DIN: 09280701
Place : Chennai