Starteck Finance Ltd Management Discussions

Management Discussion and Analysis Report for the fiscal year ended March 31, 2026.

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 2025-26 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, registered with Reserve Bank of India (RBI) under section 45-IA of the Reserve Bank of India Act, 1934. Pursuant to the scale based regulatory framework for NBFCs notified by RBI, the company is covered under the category of Base Layer NBFC ("NBFC-BL"). The company serves the financing needs of 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 with Loan Book of Rs. 345.80 crore as of 31st March,2026.

INDUSTRY STRUCTURE AND DEVELOPMENTS

GLOBAL ECONOMIC OVERVIEW

The global economy in FY2026 operated in an environment marked by elevated geopolitical uncertainties, persistent trade fragmentation and relatively tight financial conditions, which continued to weigh on economic activity across regions. Global output was mainly supported by continued expansion in technology-related investment, and the growing contribution of services trade to global growth.

However, the global environment remained fragile amid escalating geopolitical tensions. The outbreak of war in the Middle East disrupted energy supplies and trade flows, temporarily elevating fuel and food prices. Intensifying tariff wars between major economies have disrupted trade flows, increased costs and added friction to global commerce. Policy uncertainty has compounded this fragmentation further. These trade and policy pressure are now transmitting into financial markets. Financial market correction particularly in AI-driven valuations and increasing inflation could severely disrupt the current stability. Investment patterns continued to evolve, driven by rapid advancements in artificial intelligence, digital infrastructure, and strategic supply chains. Financial markets remained volatile, yet capital flows adapted to shifting conditions, underscoring the systems flexibility. Concerns around energy security, crude oil supply and commodity market volatility continued to affect business confidence. The trajectory for FY 2026 and ahead will therefore depend on how these interconnected forces evolve, determining whether the current stabilization transitions into renewed expansion or remains constrained by deepening structural and geopolitical headwinds.

INDIAN ECONOMIC OVERVIEW

The Indian economy continued to demonstrate resilience during FY 2026, maintaining its position among the fastest-growing major economies despite escalating geopolitical tensions, global trade disruptions, technology shift and volatility in commodity markets. Economic activity remained well-supported by domestic drivers, with real GDP growth for FY 2026 is likely to be 7.6% underpinned by healthy consumption trends, sustained government expenditure on infrastructure and steady momentum across industrial and service sectors.

Industrial growth was aided by ongoing infrastructure investments and policy-led initiatives, while services activity remained broad-based, driven by financial services, trade, logistics and digital-led segments.

Indias external position remained stable, supported by strong services exports, steady remittance inflows and comfortable foreign exchange reserves of over USD 700 billion, which provided resilience against global uncertainties. Fiscal indicators remained robust, with GST collections growing 8.3% to 22.3 lakh crores in FY2026, reflecting sustained economic activity, improved compliance and ongoing formalisation.

Overall, the macroeconomic environment remained stable, anchored by strong domestic fundamentals, prudent policy measures and continued economic momentum.

Non-Banking Financial Companies (NBFC) Industry

The Non-Banking Financial Company (NBFC) sector in India continued to demonstrate resilience in FY2026, maintaining its role as a critical pillar of credit delivery. The industry expanded steadily, supported by strong demand across retail and commercial segments.

Overall growth remained healthy, with NBFCs AUM (excluding government-owned NBFCs) estimated to grow at 18-19% and cross 50 lakhs crores in FY 2027. Credit demand remained broad-based across retail and commercial lending segments. Loan Against Property (LAP) and secured MSME financing constituted nearly 15% of industry AUM. Growth in certain unsecured lending segments moderated as NBFCs adopted a more cautious stance towards credit origination and portfolio expansion, reflecting the gradual shift towards calibrated growth, portfolio quality and prudent risk management practices. The sector also witnessed an increasing emphasis on secured lending.

In line with this expanding role, NBFC credit as a proportion of GDP has increased steadily over the past decade from 8.9% in FY2015 to 14.6% in FY2025.

FINANCIAL PERFORMANCE

Standalone Financial Performance: The Companys loan portfolio is at Rs. 345.80 Crore in FY 2026 from Rs. 261.79 Crore in FY 2025 and investments Rs. 271.13 Crore in FY 2026 from Rs. 196.20 Crore in FY 2025. During the year under consideration, your Companys total income including other income is Rs. 45.73 Crore in FY 2026 as compared to Rs. 33.27 Crore in FY 2025 . The Net Profit after tax is Rs. 17.16 Crore compare to profit of Rs. 10.04 Crore in the previous years.

SEGMENT WISE PERFORMANCE

The Company operates in single business vertical i.e. financing activities, hence the requirement of segment-wise reporting is not applicable.

OUTLOOK

The Company aims to expand its presence in India/Bharat by strengthening its distribution network, investing in digital ecosystems, and enhancing customer engagement through data driven insights.

The Company remains committed to financial inclusion, innovation, and disciplined growth, creating long term stakeholder value and ensuring that the companys expansion is underpinned by rigorous risk management and margin discipline.

OPPORTUNITIES AND THREATS

India continued to stand out as a key anchor of global growth, registering a expected GDP of 7.6% in FY 2025-26. The strength of the economy remains rooted in domestic demand, with consumption and investment together providing a stable growth base. Private consumption remains the primary driver, supported by rising real disposable incomes, stable employment conditions, and improving rural and urban demand. Favourable agricultural output and policy measures, including tax rationalisation, have further strengthened household spending, enabling consumption to remain steady despite external uncertainties.

The services sector is estimated to grow by 9.1% in FY 2025-26, maintaining its position as the primary driver of economic growth. The expansion reflects broad-based strength across service segments, supported by rising demand, increasing formalisation, and continued digital adoption, reinforcing its contribution to overall economic activity.

Indias financial services sector entered FY 2025-26 on a stronger and more stable footing, underpinned by resilient economic activity, sustained credit demand and a more balanced interest rate environment. The central bank has highlighted that the banking system remains well-capitalised and adequately liquid, even as credit and deposit growth normalised from the elevated levels seen in the previous year.

RISK AND CONCERNS

The Company has established a comprehensive risk management architecture aligned with global best practices, underpinned by structured controls and defined governance mechanisms.

• Risk Identification: Identify potential risks through systematic analysis, assess underlying drivers and evaluate impact.

• Risk Assessment: Evaluate risks across scenarios to determine likelihood and severity.

• Risk Mitigation and Response: Implement appropriate strategies to mitigate, or eliminate risks and undertake only such transactions permissible under applicable laws including the RBI guidelines.

• Continuous Monitoring: Track the risk environment to detect emerging threats and ensure timely action. Monitor regulatory compliance through internal audit system.

• Process Enhancement: Continuously renew frameworks to improve electiveness, adapt to evolving conditions and responsive to business environment.

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.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

As an NBFC, the Company is exposed to credit, liquidity, operational and market risks, and continues to invest in talent, processes and emerging technologies to strengthen its risk management capabilities. These efforts have supported stable risk metrics despite a challenging operating environment.

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 and corrective action taken.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

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, 2026, 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. The Company invests in continuous learning and development initiatives to support career growth and skill by internal and external agencies enhancement.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Particulars	Numerator	Denominator	31st March, 2026	31st March, 2025	% Variance
Current Ratio	Current Asset	Current Liabilities	0.95	1.13	-15.41%
Debt-Equity Ratio	Total Debt	Total Equity	1.48	1.06	40.25%
Debt Service Coverage Ratio	Earnings before debt services	Debt Services	0.11	0.12	-11.13%
Return on Equity Ratio	Net profit after tax	Average Shareholder equity	7.61%	5.01%	52.06%
Inventory turnover ratio	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable
Trade Receivables turnover ratio	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable
Trade payables turnover ratio	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable
Net capital turnover ratio	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable
Net profit ratio	Net profit after tax	Revenue from Operation	51.42%	33.87%	51.82%
Return on capital employed	Profit before interest and taxes	Capital employed	16.66%	13.28%	25.52%
Return on Investment	Income from Investment	Cost of Investment	4.47%	5.58%	-19.79%

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis describing the Companys objectives and predictions may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effects of economic and political conditions.

In India, volatility in interest rates, new regulations and government policies that may impact the Companys business as well as its ability to implement the strategy. The Company does not undertake to update these statements.