Starteck Finance Ltd Management Discussions

Starteck Finance Limited presents its Management Discussion and Analysis Report for the fiscal year ended March 31, 2025. OVERVIEW

The Management Discussion and Analysis Report has been prepared in accordance with the provisions of Regulation 34(2)(e) of Listing Regulations, read with Schedule V(B) thereto, with a view to provide an analysis of the business and Financial Statements of the Company for FY 2024-25 and should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included in the Report.

Starteck Finance Limited (‘the Company) was incorporated in August, 1985. The Company currently operates as a Non-Deposit taking, Non-Systemically Important (“ND-NSI”) registered with Reserve Bank of India (RBI). It serves the financing needs the various corporates having presence in urban and semi-urban areas of India. The Company has a diversified lending portfolio across Retail, SMEs and Commercial customers.

The global economy navigated a complex landscape influenced by geopolitical shifts, trade fluctuations and inflationary pressures in 2024. Despite persistent challenges, proactive policies and continued investments in key sectors strengthened stability and resilience. The global economy grew by 3.5% in 2023, with a slight slowdown to 3.3% in 2024. Advanced economies grew at a steady 1.7% in 2023 and at 1.8% in 2024, constrained by high interest rates. Meanwhile, Emerging Markets and Developing Economies (EMDEs) expanded by 4.7% in 2023 and 4.3% in 2024. Heightened supply chain vulnerabilities prompted businesses and governments to reevaluate trade dependencies and implement strategic measures to enhance economic stability.

Several countries introduced tariffs on global trade in March 2025, followed by retaliatory actions that disrupted international trade, increased inflation, and slowed economic growth. Higher import costs are expected to raise consumer prices in many regions. The global economy is projected to grow steadily at 2.8% in 2025 and 3.0% in 2026, supported by stable performance in both advanced and emerging markets. Growth in advanced economies is likely to stay modest at 1.4% in 2025 and 1.5% in 2026, influenced by domestic demand and different policy approaches. Meanwhile, emerging markets such as China and India are expected to show stronger growth of 3.7% in 2025 and 3.9% in 2026, despite global uncertainties and recent trade tensions. Even so, economies are expected to stay resilient by adopting new technologies and implementing strategic policy measures.

India continued to be one of the fastest-growing major economies, driven by strong domestic demand, structural reforms and supportive policies. In recent years, the countrys rapid economic expansion enabled it to surpass the UK, making it the worlds fifth-largest economy. However, in FY2025, global uncertainties, rising geopolitical tensions and persistent inflationary pressures contributed to a slowdown in overall economic growth. According to the second advance estimates from the Ministry of Statistics and Programme Implementation (MOSPI), Indias economy grew by 6.5% y-o-y in FY2025, compared to 9.2% in the previous year.

Inflationary pressures remained a key concern in FY2025, driven by global supply chain disruptions and commodity price volatility. In response, the RBIs Monetary Policy Committee (MPC) reduced the repo rate by 25 basis points in two successive cuts, bringing it down to 6% as of April 2025, while continuing with an accommodative stance. Consumer Price Index (CPI) inflation is expected to average 4.9% in FY2025, down from 5.4% in the previous year, and is projected to ease further to 4.0% in FY2026.

NBFCs has always been an important component of the financial sector and has seen higher credit growth over the past few years. The NBFC sector in India is expected to grow due to several factors like governments commitment to financial inclusion, sectors digital transformation, regulatory changes that aim to ensure the sectors stability and prevent excessive risk-taking and also due to impressive growth projections.

With strategic moves by industry leaders, the market is set to expand further. NBFCs are leveraging their superior understanding of regional dynamics and customized products and services to expedite financial inclusion in India. Lower transaction costs, quick decision making, customer orientation and prompt service standards have typically differentiated NBFCs from banks. NBFCs have demonstrated agility, innovation, and frugality to provide formal financial services to millions of Indians.

Standalone Financial Performance: The Companys loan portfolio is at INR 261.79 Crs in FY 2025 from INR 229.20 Crs in FY 2024 and investments INR 196.20 Crs in FY 2025 from INR 130.79 Crs in FY 2024. During the year under consideration, your Companys total income including other income is INR 33.27 Crs as compared to INR 28.34 Crs in the previous years. The Net Profit after tax is INR 10.04 Crs against the profit of INR 10.38 Crs in the previous years.

The Company operates within one business segment i.e. financing activities, hence the requirement of segment-wise reporting is considered irrelevant.

The Company aims to expand its presence in Emerging India and unlock the full potential of financial services. The Company recognises that volatility in the operating environment poses significant challenges to global enterprises. Periodic assessments are undertaken to ensure the effectiveness of these measures, with corrective actions and process enhancements implemented as necessary. The Company remains focused on simplifying finance for its customers while leveraging its capabilities to drive profitable growth.

India has made significant progress from being classified as a fragile economy in the 2010s to emerging as a key driver of global growth, even as the rest of the world faces economic uncertainties. Two key factors supporting this growth are the countrys demographic dividend and its expanding middle-income population. Currently, around 30% of Indias population falls within the middle-income category, contributing approximately 48% of total domestic consumption. This segment is expected to grow to 40% of the population and will be dominated by the working age population with a high propensity to spend, including leveraged spending. Additionally, policy reforms focused on infrastructure development, manufacturing expansion and export growth are expected to create more employment opportunities, further increasing the size of the middle-income group and improving living standards.

A significant portion of large NBFCs relies on bank borrowings to support credit growth. Any disruption in this funding channel can have a cascading impact, affecting not only NBFC credit expansion but also key sectors such as MSMEs, real estate and low-income households, where NBFCs play a crucial role. Ensuring smooth access to low-cost funding is essential for NBFCs to maintain the last-mile flow of credit across the economy. NBFCs are expected to develop a deeper domestic debt market and strengthen their ability to raise public deposits to diversify funding sources and reduce dependence on bank borrowings.

Your Company operates in a highly dynamic and regulated market environment and is exposed to a range of risks including market volatility, intense competition, regulatory changes, and technological disruption. As an NBFC, the Company is exposed to credit, liquidity, market and interest rate risk.

To address these concerns, the Company has in place cybersecurity, compliance automation and employee training to mitigate both internal and external risks. Regular audits, surveillance tools and scenario-based stress testing help strengthen operational resilience.

The Company has an adequate system of internal controls to ensure accuracy of accounting records, compliance with all laws and regulations and compliance with the rules, procedures and guidelines prescribed by the management. An extensive internal audit is carried out by independent firm. Post audit reviews are also carried out to ensure follow up on the observations made.

During the year under review, there has been no material development on the Human Resource/Industrial Relations front during the year. As on March 31, 2025, there were 5 employees employed by the Company. The Company places significant importance to its human capital. The Company commends the commitment, dedication and competence shown by its employee in all aspects of business.

Note: 1. Investment in sovereign gold bond increased which have low coupon rate hence the ROI have come down.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the companys objectives, projections, estimates and expectations may be “forward-looking statements” within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied depending on the economic conditions, government policies and other incidental factors which are beyond the control of the management. The Company is not under any obligation to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events.