Shreenath Investment Company Ltd Management Discussions

Industry Structure and Developments:

Global economic overview

The global economy remained resilient in the year 2024 (Calendar Year 2024), expanding at 3.2% (as per IMF World economic outlook, Apr25). The rapid rise in trade tensions and heightened policy uncertainty are likely to exert a substantial drag on global economic activity. It is estimated to grow by 2.8% in CY2025 and 3% in CY2026, much below the historical average of 3.7% (2000-19) due to global challenges on various fronts. While strong real income growth and lower interest rates boosted activity, weaker government spending, sluggish consumer confidence, and external demand fluctuations restrained growth in some regions.

In advanced economies, the U.S. growth forecast for CY2025 is expected to slow down to

1.8%, on account of greater policy uncertainty, trade tensions and softer demand momentum, whereas the euro area is expected to grow at 0.8%, before rising to 1.4% in 2026 as financial conditions improve. Other advanced economies see stable growth, with recovering incomes offset by trade uncertainties. In emerging markets and developing economies, growth is expected to slow down to 3.7% in 2025 due to various trade measures in recent times. On the back of the recently implemented tariffs and prolonged trade policy uncertainty, Chinas growth was revised downward to 4% in 2025. Indias growth to remain stable at 6.2% in 2025 and 6.3% in 2026 supported by private consumption, particularly in rural areas.

Indian economic overview

India retained its position as the 5th largest economy, maintained its status as the fastest growing amongst large economies and is expected to be the third largest economy by 2027 (crossing GDP of $5 Tn) after USA and China. The Indian economy is expected to grow by 6.2% in CY25.

The Indian economy has been digitalising at a remarkable pace over the last decade.

By 2030, Indias digital economy is projected to contribute nearly one-fifth of the countrys overall economy, outpacing the growth of traditional sectors. According to the State of Indias Digital Economy Report 2024, India is the 3rd largest digitalised country in the world in terms of economy-wide digitalization, and 12th among the G20 countries in the level of digitalisation of individual users.

The Union Budget 2025-26 strikes a balance between sustaining economic growth and maintaining fiscal discipline. By streamlining regulations, supporting MSMEs, and boosting investments and exports, the budget outlines a clear roadmap toward Viksit Bharat 2047. The budgets emphasis on sectors including tourism, healthcare, and manufacturing will catalyse job creation. The commitment to fiscal consolidation, with a targeted fiscal deficit of 4.4% for FY26, strengthens Indias path to debt sustainability. These measures are expected to stabilize the macroeconomic environment, encouraging private sector participation and investment. Overall, the budget lays a strong foundation for long-term economic resilience and growth.

Outlook

India to remain relatively insulated against the global shocks in the near future and continue to grow strongly. The structural long-term growth story for India remains intact driven by favourable demographics and stable governance. According to the IMFs World Economic Outlook Report, India is expected to maintain its position as the fastest-growing major economy, Growth will be driven by continued expansion in the services sector and a boost in manufacturing, supported by government efforts to enhance infrastructure and streamline tax policies.

Segment-wise or product-wise performance:

The Company primarily operates in single business and geographical segment

As compared to the previous reporting period, the company has shown an increase in income.

The Company, with superior Investment idea, will focus on positioning the revenues and lead towards high growth path in future.

Risks, Concerns and Threats

It must be understood that a risk-free investment does not exist, but investment funds vary between being low risk and high risk. Even cash held with a financially secure bank is exposed to inflation risk (the risk that rising prices will erode the real value or purchasing power of the cash held on deposit) and counterparty risk (the risk that the bank is unable to meet its financial obligations, i.e. return a depositors money).

Internal control systems and their adequacy:

Your Company ensures that appropriate risk management limits, control mechanisms and mitigation strategies are in place through its efficient and effective Internal Control System and the same completely correspond to its size, scale and complexity of operations. The Company strives to put several checks and balances in place to ensure that confidentiality is maintained. Effective procedures and mechanisms are rolled out by a full-fledge Internal Audit System to ensure that the interest of the Company is safeguarded at all times. In addition to this, the Risk Assessment policy of the organization is reviewed on a quarterly basis by the Audit Committee / Board of Directors of your Company to ensure that its robustness is reinforced in keeping with the requirements of a dynamic business environment.

Discussion on financial performance with respect to operational performance:

Total income achieved during the year under review is Rs. 829.86 lakhs as against Rs. 6302.54 Lakhs in the previous year. After all Expenses, Depreciation and Taxation, the net profit of the Company is Rs. 225.54 lacs as against the profit after tax of Rs. 267.89 Lacs in the previous year.

Cautionary Statement:

Your Company endeavours to perform and attempt to deliver the best at all times. However, the statements made in this report describing the Companys objectives, expectations or predictions shall be read in conjunction with the government policies as issued and amended from time to time, the micro as well as macroeconomic scenario prevailing at that time, global developments and such other incidental factors that may extend beyond the control of the Company and Management.

Keeping this in view, the actual results may materially vary from those expressed in the statement.

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

The Company continuously strives to attract and retain the best talent from the local markets, clearly define their roles and responsibilities, create an inspiring and rewarding work environment, imparting training to them and creating development opportunities for increasing employee knowledge and efficiency to make them future ready and create career opportunities within.

The Company is committed in ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. In strongly believes in maintaining the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

Details of any changes in Return on Net Worth as compared to the immediately previous financial year:

Return on Net Worth, the company continues to maintain healthy return on net worth in FY 25 at 10.21%