Standard Capital Markets Ltd Management Discussions

"ITS VISION IS TO EVOLVE INTO A DIVERSIFIED FINANCIAL SERVICES GROUP WITH A PAN-INDIA PRESENCE,

DEDICATED TO DELIVERING COMPREHENSIVE, LIFE-CYCLE FINANCIAL SOLUTIONS TO ITS CUSTOMERS."

INDUSTRY STRUCTURE & DEVELOPMENT

The Indian NBFC sector continues to be a critical component of the financial system, serving the underserved segments. The implementation of the Reserve Bank of Indias Scale-Based Regulation (SBR) framework has introduced a more supe enhancing the resilience and transparency of the sector. structuredrisk-basedclassification and

The business of the Company is that of a Non-Banking Finance Company (NBFC). NBFCs have innovated over time and found ways to address the debt requirements of every segment of the society. The sector has evolved from being fragmented and informally governed to being well regulated and in many instances adopted best practices in innovation, governance and risk management. NBFCs provides a variety of services including fund -based and fee-based activities and cater to retail and non- retail markets and niche segments. NBFCs are generally regarded to be complementary to banks and are often able to offer better services and products to their customers. Observing the importance of NBFCs in India, Reserve Bank of India has issued regulatory framework with the objective to harmonize it with Banks and Financial Institutions.

NBFCs have always played an important role in promoting financial inclusion in India. They have been complementing and supplementing the banking sector in reaching out credit and fill the gaps in availability of financial services to the un-banked segments and underserved area of the society.

The biggest contribution of NBFCs is their ability to cater to the needs of the Micro, Small & medium Enterprises (MSMEs) which form the cradle of Entrepreneurship and innovation in India. NBFCs innate ability to understand their customers needs and accordingly innovate to offer customized products make them the perfect conduit for credit delivery to MSMEs.

OPPORTUNITIES & THREATS

Non- Banking Finance Companies have always given tough competition to the public sector banks which traditionally held large share in the market but are now facing problem of their soaring Non- Performing Assets (NPAs). (MSMEs) which form the cradle of Entrepreneurship and innovation in India. NBFCs innate ability to understand their customers needs and accordingly innovate to offer customized products make them the perfect conduit for credit delivery to MSMEs.

Opportunities	Threats
• Expanding Credit Demand: With strong economic growth, rising consumption, and increasing penetration of financial services, there is sustained demand for credit across retail, SME, and corporate segments.	• Regulatory Changes: Stringent compliance requirements, higher capital adequacy norms, and evolving regulatory frameworks may increase operational and compliance costs.
• Digital Transformation: Rapid adoption of digital platforms, fintech collaborations, and data analytics provide opportunities to enhance customer reach, improve risk assessment, and deliver efficient services.	• Asset Quality Risks: Rising NPAs in the sector, particularly in unsecured lending and stressed industries, remain a concern and may impact profitability.

 

Opportunities	Threats
• Financial Inclusion Initiatives: Government schemes and regulatory focus on financial inclusion create avenues to serve underbanked and unbanked segments, particularly in rural and semi-urban areas.	• Liquidity Pressures: Dependence on external borrowings and fluctuations in funding availability could affect the liquidity position of NBFCs.
• DiversificationPotential: Opportunities exist to expand productofferings such as structured finance, housing loans, microfinance, and co-lending partnerships with banks. Inflationary	• Competitive Intensity: Increasing competition from banks, fintechs, and new-age digital lenders may pressure margins and market share.
• Regulatory Support: RBIs proactive measures to strengthen the NBFC sector, including liquidity support frameworks and harmonization of norms, provide a stable environment for long-term growth.	• Macroeconomic Uncertainty: trends, interest rate volatility, and global economic disruptions could impact credit demand and repayment capacity of borrowers.
	• Cybersecurity Risks: Growing dependence on digital channels exposes NBFCs to technology and data security risks.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company operates in only single segment; hence segment wise or product wise performance is not applicable.

OUTLOOK AND FUTURE PROSPECT

The Indian economy continues to demonstrate resilience, driven by robust domestic demand, government-led infrastructure spending, and rapid digital adoption across sectors. The Non-Banking Financial Company (NBFC) sector is expected to play a pivotal role in supporting credit growth, financial inclusion, and last-mile delivery of financial services.

The overall outlook of the industry has improved during the financial year 2024-25 and is an upcoming market to get better opportunities for the Company. Reserve Bank of India with an objective to bring NBFCs into the ambit of well-regulated finance industry, have issued a number of circulars and regulatory clarity after the public discussion. These regulations are framed to address the regulatory gaps and arbitrage. The industry has also responded positively towards these regulations in order to understand and address the associated risk better. Also regulated environment boosts the confidence of customer and increases credibility of the industry. In the medium term, opportunities are expected to diversification into new financial products, and deeper penetration in semi-urban and rural markets.

At the same time, the Company remains vigilant of challenges such as rising interest rates, competitive pressures from banks and fintechs, and evolving regulatory requirements. A prudent risk management framework, strong governance practices, and focus on sustainable growth will remain central to the Companys strategy. Overall, the outlook for the NBFC sector remains positive, with long-term prospects underpinned by Indias structural growth story and increasing demand for innovative and inclusive financial solutions.

SCML is engaged in lending business and is exposed to the following key risks:

1. Credit Risk:

This is the risk associated of recovery of capital from counterparty. The Company has a robust credit risk framework in place which includes sectoral guardrails, strong policy and compliance framework, comprehensive due-diligence and risk assessment process, prudent approval process, robust monitoring process and strong governance to mitigate the risk..

2. Market Risk:

This is the risk associated with adverse market movements. The Company has robust monitoring process to track key market parameters to contain interest rate risk, concentration risk and risk associated with asset liability mismatch through internal risk models which is reviewed by the relevant committee from time to time to take appropriate actions.

3. Operational Risk:

This is the risk associated with inadequate processes and internal controls. The Company has robust processes and strong compliance framework in place to mitigate the same. Our audit and compliance team periodically monitor the adequacy of processes, ensure adherence to the same and strengthen the internal controls.

4. Liquidity Risk:

The Company has adopted a cautious approach towards liquidity management. We maintain adequate liquidity to meet any unforeseen event. In addition, we adhere to strict internal guidelines to appropriately manage Asset Liability Mismatch (ALM) and remain compliant with the regulatory requirements.

5. Compliance Risk

Compliance risk is exposure to legal penalties, financialforfeiture and material loss an organization faces when it fails to act in accordance with industry laws and regulations, internal policies or prescribed best practices.

6. Technology Risk:

Technology is rapidly changing the way financial services entities operate and is a key disruptor for the industry.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has its own process driven framework for internal financial controls. The Board is of the opinion that the Company has sound internal financial controls commensurate with the nature and size of its business operations; wherein controls are in place and operating effectively and no material weaknesses exist.

The Internal Auditors periodically review and evaluates the adequacy of the control system and processes including in particular, internal financial controls as required under the Companies Act, 2013, ensure strict adherence to processes and procedures as well as to prescribed regulatory and legal framework and suggest improvements. The internal auditors have expressed their satisfaction about the adequacy of the control systems and the manner in which the Company is updating and strengthened its internal audit systems and procedures to meet the challenging requirements of the business.

thereon are reported by the Internal Auditors to the Audit Committee.Significant

The Audit Committee & Board of Directors reviews the internal audit reports and the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Companys operations continue to be mainly focused in the area of NBFC activities- financing and Inter- Corporate Investments. The relevant significant financial highlights of the Company are mentioned below:

Particulars	For the year ended March 31, 2025	For the year ended March 31, 2024
Revenue from operations	6424.92	3096.76
Total Revenue	10077.65	3096.77
Profit Before Tax	3154.52	1503.37
Profit after Tax	2834.71	1071.01
KEY FINANCIAL RATIOS
Particulars	For the year ended March 31, 2025	For the year ended March 31, 2024
Debt Equity Ratio	3.21%	1.54%
Interest Coverage Ratio	1.54%	1.95%
Operating Profit Margin	32.12%	49.15%
Net Profit Margin	28.13%	34.58%
Return on Net worth	11.02%	13.94%

OPERATIONAL HIGHLIGHTS a. Disbursement

The Company offers a wide range of Business Loans, Personal Loans and Education Loan. Disbursement in Financial Year 2024-25.

b. Assets Under Management (AUM)

During the period under review, the AUM of the Company stood at 1,31,885.49 Lakhs as on March 31, 2025 against 42,331.80 Lakhs as on March 31, 2024.

c. Performance review

SCML India aspires to scale up the business through strategic initiatives and leveraging strong foothold in the Commercial

Finance Business. The Commercial Finance Business is committed to being a complete financial solutions partner to its customers, through high quality service and innovative products, which provide value to its customers.

Going forward, SCML plans to grow its MSME business as well as a continued focus on Educational Loans. Additionally, it continues to focus on high NIM (Net Interest Margin) products, increase customer acquisition, especially through expanding its customer Durables Loans business, balancing its product mix, ramping up fee based income, optimizing operating costs and improving collection efficiency for further enhancing its profitability. Standard Capital also plans to leverage analytics capabilities to explore opportunities in the market and offer unique products and solutions to new as well as existing customers. There are plans to automate several processes to ensure Quick Turnaround.

HUMAN RESOURCES

The Company always regards human resources as its most valuable asset and ensures friendly work environment for its employees to excel. In an increasingly competitive market for talent, Standard Capital Markets Limited continues to focus on attracting and retaining right talent. It is committed to provide right opportunities to employees to realise their potential.

DISCLAIMER

Certain Statements in the Management Discussion and Analysis Report describing the Companys view about the industry, expectations, objectives, etc may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Internal & External Factors like changes in government regulations, tax laws and other factors such as industrial relations and economic developments, etc. may further influence the Companys operations which are beyond the control of the management. The Company is not under any obligation to publicly amend, modify or revise any forward- looking statement on the basis of any subsequent developments, information or events.

	For and on behalf of Board of Directors of
	Standard Capital Markets Limited
Date: 05/09/2025
Place: New Delhi
	Anshita Sharma	Ram Gopal Jindal
	Director	Managing Director
	DIN: 09706011	DIN: 06583160