SW Investments Ltd Management Discussions

OVERVIEW

The Management Discussion and Analysis Report has been prepared in accordance with the provisions of Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule V Para 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 elsewhere in the Report and Annual Accounts FY 2025-26. The objective of this Report is to convey the Managements perspective on the external environment and Service industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during FY 2025-26. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (SEBI) from time to time.

The global economy remained resilient during FY 2025-26, recording moderate growth despite persistent challenges. Strong technology-led investments and stable demand in the services sector supported economic activity, while elevated interest rates and geopolitical uncertainties continued to weigh on global sentiment. As the year progressed, the outlook became increasingly cautious, with downside risks gaining prominence.

Monetary policy is gradually transitioning from a phase of synchronised tightening to cautious easing. While policy rates in major advanced economies remain elevated relative to prepandemic norms, central banks have begun to signal a shift towards supporting growth as inflation risks recede. Fiscal policy, however, remains constrained by elevated debt levels, limiting the scope for broad-based stimulus.

Geopolitics has re-emerged as a central macro variable. The escalation of tensions in West Asia, particularly disruptions around the Strait of Hormuz, has reintroduced volatility in energy markets and global trade routes. A sustained disruption could materially alter inflation dynamics and weaken global growth through higher input costs and reduced trade flows. In aggregate, the global economy appears stable but fragile- supported by cyclical tailwinds, yet exposed to structural and geopolitical fault lines.

According to the IMFs April 2026 update, global growth is expected to be at around 3.1% in 2026 and 3.2% in 2027, revising its 2026 forecast downward by 0.2 percentage points from the January 2026 update, primarily reflecting the impact of the Middle East conflict on commodity markets, inflation expectations and financial conditions. In contrast, the World Bank presents a more cautious assessment, projecting growth at 2.6% in 2026 with only a modest improvement thereafter. The divergence reflects differing assumptions on trade normalisation, fiscal support, and the durability of private investment. What is clear, however, is that the post-pandemic recovery remains incomplete, particularly across several emerging and developing economies where income levels have yet to fully recover.

Global inflation remains on a disinflationary path, although the pace of moderation has become uneven across regions. The easing in price pressures continues to be supported by the lagged impact of past monetary tightening, normalisation of Management Discussion & Analysis supply chains and softer labour-market conditions in several economies. However, renewed geopolitical risks and the impact of the Middle East conflict on commodity markets have complicated the inflation outlook. In its April 2026, the IMF projected global headline inflation at 4.4% in 2026, before easing to 3.7% in 2027, noting that inflation is expected to rise modestly in 2026 before resuming its decline in 2027.

During FY 2025-26, Indias capital markets continued to strengthen their position as one of the worlds fastest growing financial ecosystems. Building on three decades of structural reforms, the market has evolved from the digitisation and modernisation phase of the 1990s to a mature and diversified ecosystem supported by robust regulatory oversight, advanced market infrastructure, and increasing investor participation. The widespread adoption of dematerialised securities, electronic trading platforms, and efficient settlement systems has significantly enhanced market transparency, accessibility, and operational efficiency.

Indias capital markets are now characterised by growing institutional participation, expanding retail investor interest, and greater integration with global financial markets. Domestic institutional investors, including mutual funds, insurance companies, and pension funds, continue to provide stable capital flows, while initiatives such as the inclusion of Indian government securities in global bond indices, the development of GIFT City, and the increasing adoption of REITs, InvITs, green bonds, and other innovative financial instruments are broadening investment opportunities. Supported by continued regulatory reforms, digital innovation, and a resilient macroeconomic environment, Indias capital markets remain well- positioned to support long-term capital formation, economic growth, and the countrys aspiration to emerge as a leading global financial hub.

Your Company is committed to addressing the changes boosted by its strengths in market position, agile execution capabilities, robust early warning systems and extensive use of analytics for risk mitigation and resource allocation. It will ensure to take advantage of the tailwinds that may emerge during the course of the year. The stringent regulatory norms governing the functioning of the business sector and certain government restrictions acts as hindrance in smooth functioning of Business.

• Robust regulatory framework and strong investor protection measures implemented by SEBI and depositories.

• Rapid growth in demat accounts, reflecting increasing retail investor participation.

• Highly digitised market infrastructure with efficient trading, settlement, and depository systems.

• Strong growth in IPOs, mutual fund investments, and systematic investment plans (SIPs), driving market liquidity.

• Increasing adoption of technology-enabled investment platforms, improving accessibility and operational efficiency.

• Expanding participation from domestic institutional investors, reducing dependence on foreign capital flows.

• Corporate bond market remains relatively underdeveloped, resulting in continued dependence on equity and bank financing.

• Retail participation is still concentrated in equities, with limited penetration in debt and other investment products.

• Revenue of market intermediaries remains highly dependent on trading volumes and market sentiment.

• Financial literacy and capital market penetration remain relatively low in rural and semi-urban regions.

• High dependence on technology infrastructure increases operational and cyber risk exposure.

• Growing investor awareness and increasing financial inclusion are expected to expand the investor base.

• Rising disposable incomes and increasing preference for financial assets over traditional savings will support market growth.

• Expansion of digital platforms and fintech innovations will enhance customer acquisition and service delivery.

• Inclusion of Indian government securities in global bond indices is expected to attract higher foreign investment.

• Growing demand for wealth management, investment advisory, and value-added depository services offers new revenue opportunities.

• Market volatility arising from domestic and global economic uncertainties, geopolitical developments, and changes in investor sentiment.

• Frequent regulatory and compliance changes may increase operational costs and affect profitability.

• Cybersecurity threats, data breaches, and technology failures may disrupt operations and impact investor confidence.

• Fluctuations in interest rates, inflation, liquidity conditions, and foreign capital flows may adversely affect trading activity and capital market performance.

• Increasing margin requirements and regulatory measures in derivatives and trading segments may impact transaction volumes and brokerage revenues.

The Company is engaged in investment activities during the year under review, hence the requirement of segment-wise reporting is considered irrelevant.

SW Investments Limited being an investment company seeks opportunities in the capital market. The strategic initiatives undertaken by the Company are currently in their initial phase, and FY 2026-27 marks the beginning of its transformation from a traditional brokerage business to a technology-driven digital brokerage platform. Leveraging its established relationships with fintech companies and banking partners, the Company aims to strengthen its market presence, enhance customer experience, and capitalise on the growing opportunities in Indias evolving financial services and capital markets ecosystem.

The Company has adequate capital and financial resources to run its business operations and has adequate internal financial reporting and control.

The Company is an Investment Company holds 780.20 lakhs of its assets in form of investment in Equity shares and Debentures. The thrust of the business is to hold and continue to hold securities in various companies.

The Company has established a robust internal control framework commensurate with the nature, size, and complexity of its business operations. The framework is designed to safeguard assets, ensure the accuracy and reliability of financial and operational information, enhance operational efficiency, and ensure compliance with applicable laws, regulations, and internal policies.

The Company has implemented well-defined policies, standard operating procedures, and an appropriate delegation of authority to ensure effective monitoring and control of business activities. Adequate checks and balances, along with clearly defined approval mechanisms, are in place to ensure the proper authorization and recording of financial and operational transactions. The management periodically reviews the internal control systems to ensure their continued effectiveness and alignment with evolving business and regulatory requirements.

Total Income from Operations: Rs. 42.79 lakhs ( 23.03 lakhs in FY 2024-25)

Profit Before Tax: Rs. 31.56 Lakhs ( 10.63 lakhs in FY 2024-25)

Net Profit: Rs. 23.62 Lakhs ( 7.96 lakhs in FY 2024-25)

Basic EPS: Rs. 2.62 ( 0.88 in FY 2024-25).

The Company firmly believes that its employees are its most valuable asset and a key driver of operational excellence and sustainable growth. It is committed to fostering a safe, inclusive, and performance-driven work environment that encourages collaboration, innovation, and continuous learning. The Companys culture is guided by its core values of Integrity, Collaboration, Agility, Respect, Excellence, and Simplicity, which form the foundation of its business practices and employee engagement.

Readers are cautioned not to place undue reliance on these forward-looking statements, as actual outcomes may vary materially from those anticipated. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required under applicable laws and regulations.