Tirupati Fincorp Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT</dhhead>

The financial year 2024-25 marked a transformative period for Tirupati Fincorp Limited, characterized by significant business expansion, operational challenges, and strategic repositioning. Despite achieving unprecedented revenue growth of over 2,200%, the company faced profitability challenges, reflecting the evolving nature of our business model and market dynamics

INDUSTRY OVERVIEW

Financial Services Industry

The Indian financial services sector continues to be a cornerstone of economic growth, driven by digital transformation, financial inclusion initiatives, and regulatory reforms. The sectors resilience and adaptability have been tested through various economic cycles, emerging stronger with enhanced digital capabilities and expanded reach.

Key Industry Trends:

Digital Transformation: Accelerated adoption of fintech solutions and digital payment systems

Financial Inclusion: Expanding reach to underserved segments through innovative products

Regulatory Evolution: Enhanced compliance frameworks and prudential norms

Capital Market Growth: Increased retail participation and institutional investments

NBFCs in India

NBFCs have emerged as critical intermediaries in Indias financial ecosystem, bridging the gap between traditional banking and specialized financial services. The sector has demonstrated remarkable resilience and continues to play a vital role in credit intermediation.

Sector Highlights:

Growth Trajectory: Industry poised for 10-12% loan growth in FY 2024-25

Asset Quality: Improvement in collection efficiency and lower restructured portfolios

Regulatory Framework: Enhanced governance standards under RBIs revised guidelines

Technology Integration: Increased adoption of AI/ML for credit assessment and risk management

ABOUT COMPANY

Tirupati Fincorp Limited (TFL) is an Indian non-banking financial company. It carry on business of an investment company and engage in business of holding, selling, buying or otherwise dealing in shares, debentures, debenture stocks, bonds, units, all kinds of negotiable instruments and all kinds of securities issued or guaranteed by Indian or Foreign Governments, States, Dominions, Sovereigns, Municipalities or Public Authorities or bodies and shares, stocks, debentures, debenture-stocks, bonds, obligations and securities issued and guaranteed by any company, corporation, firm or person whether incorporated or established in India.

Company also functions in managing investments and acting as Brokers, Merchant Bankers, Commission Agents, Managers and advisers to the issue and making investments to movable, immovable properties.

We invest money (not amounting to Banking Business) against personal guarantee or against the security of leasehold and freehold land, shares, securities, stocks, merchants and other property and assets and generally to lend and other property and assets and generally to lend and advance money to such persons, firms or Companies and upon such terms and subject to such conditions as may seem expedient.

OPPORTUNITIES AND STRATEGIC OUTLOOK

Growth Opportunities

1. Digital Financial Services: Leveraging technology for enhanced service delivery

2. Investment Banking: Expanding advisory and capital market services

3. Wealth Management: Developing comprehensive financial planning solutions

4. Strategic Partnerships: Collaborating with fintech and traditional financial institutions

Market Positioning

The company is strategically positioned to capitalize on:

Financial Inclusion: Reaching underserved market segments

Technology Adoption: Digital transformation in financial services

Regulatory Evolution: Adapting to new compliance frameworks

Market Growth: Expanding Indian financial services sector

Reports from the World Bank indicate that Non-Banking Financial Institutions act as critical pillars contributing to macroeconomic stability and sustained economic growth and prosperity, due to their ability to finance firms and individuals at a reasonable cost, reduce volatility by providing multiple sources to finance and park funds and enable creation of a competitive environment characterized by a diverse array of products. This has been proven time and again in developed markets. Non-Banking Finance Companies (NBFCs) continue to play a critical role in making financial Services accessible to a wider set of Indias population and are emerging as strong intermediaries in the retail finance space. Going forward, one should expect NBFCs to further strengthen their presence in retail finance and grow at a reasonably healthy pace.

THREATS

The biggest challenge before NBFCs is that they are facing stiff competition from banks and financial institutions, due to their ability to raise low-cost funds which enables them to provide funds at a much cheaper rate. More stringent capital adequacy norms have been stipulated by RBI for NBFCs which is making it difficult for them to give cheaper finance.

Ever-increasing competition from commercial counterparts whose capacity to absorb losses is higher, counter-party failures, and recommendations being made to increase the purview of monitoring by regulatory authorities increase the threat of losing the essence of Non-banking Finance Companies which are specifically designed to reach out and finance certain target groups.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE OF THE COMPANY

The Company is a Non-Banking Finance Company (NBFC). It is engaged in the business of financing which is the only segment in the Company. Hence, the results for the year under review pertain to only financing activity.

FINANCIAL PERFORMANCE

The details of the financial performance of the Company is given below:

(Rs. In lakhs)

Particulars	For the year ended 31-Mar-25	For the year ended 31-Mar-24
Total Revenue	11,069.58	473.51
Total Expense (Excluding Depreciation)	11,152.71	-426.6
Gross Profit before depreciation and tax	-83.12	46.91
Depreciation	-	-
Net Profit before tax	-83.12	46.91
Tax Expense	-0.75	-15.5
Net Profit After Tax	-82.37	31.4

Earning Per Shares (EPS)

Basic	(1 .63)	0 .64
Diluted	(1 .63)	0 .64

During the year under review, the Company generated total revenue of Rs. 11,069.58 Lakhs as compared to 473.51 Lakhs in the previous financial year. The Company has incurred a loss of Rs.(82.37)Lakhs during the financial year. The directors are continuously looking for new avenues for the future growth of the Company.

FINANCIAL PERFORMANCE ANALYSIS

Revenue Performance Analysis

Revenue Analysis: Total Revenue Growth and Composition Breakdown for FY 2024-25

The company achieved exceptional revenue growth of 2,237.77%, with total revenue increasing from 473.51 lakhs to 11,069.58 lakhs. This transformation was primarily driven by securities trading activities, which contributed 84.3% of total revenue.

Financial Performance Comparison

Financial Perf FY23-25

Lakhs

Financial Performance Comparison: FY 2023-24 vs FY 2024-25

The comparative analysis reveals the dramatic scale of business expansion, though accompanied by proportionate increase in expenses, resulting in operational challenges.

Fin. Assets Non-Fin. Asst Borrowings Trade Payab. Other Liab. Equity

Balance Sheet Composition FY 2024-25: Assets vs Liabilities & Equity The balance sheet reflects substantial growth across all major components:

Key Metrics	FY 2024-25 (Lakhs)	FY 2023-24 (Lakhs)	Growth %
Total Assets	20,941.72	5,500.47	280.73%
Loans Portfolio	18,637.80	4,929.00	278.13%
Total Borrowings	19,573.00	4,779.99	309.48%
Total Equity	585.83	569.11	2.94%

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Corporate Governance Framework

Board Structure: Balanced composition of executive and independent directors

Committee Oversight: Specialized committees for audit, risk, and nomination

Transparency: Comprehensive disclosure and stakeholder communication

Ethics Framework: Code of conduct and whistleblower policies

Internal Control Systems

Financial Controls: Regular audits and compliance monitoring

Operational Controls: Process standardization and documentation

IT Security: Cybersecurity measures and data protection

Risk Monitoring: Continuous assessment and mitigation strategies

BUSINESS SEGMENT PERFORMANCE

Revenue Diversification Strategy

The companys revenue composition underwent fundamental transformation:

1. Securities Trading (84.3%): Emerged as primary revenue driver

2. Interest Income (8.3%): Traditional lending business maintained steady contribution

3. Other Income (7.4%): Diversified income sources including investments

Operational Highlights

Loan Portfolio Growth: 278% increase to 18,637.80 lakhs

Investment Activities: Strategic investments of 1,500.01 lakhs

Trading Operations: Substantial increase in securities trading volumes

Workforce Stability: Maintained 16 permanent employees

Management Discussion And Analysis Report

RISK AND CONCERNS

Key Risk Categories

1. Credit Risk: Enhanced due diligence processes for loan portfolio

2. Market Risk: Comprehensive monitoring of securities exposure

3. Operational Risk: Robust internal controls and process automation

4. Liquidity Risk: Active asset-liability management

5. Regulatory Risk: Proactive compliance monitoring

Risk Mitigation Strategies

Portfolio Diversification: Balanced exposure across segments

Technology Integration: Advanced risk analytics and monitoring

Regular Assessment: Quarterly risk review and stress testing

Compliance Framework: Comprehensive regulatory adherence

HUMAN RESOURCES

Equipping the Company with an engaged and productive workforce is essential to our success. We look for commitment, skills and innovative approach in people. In assessing capability, we consider technical skills and knowledge that have been acquired through experience and practice, along with mental processing ability, social process skills and their application. We continue to invest in developing a pipeline of future talent and nurture them. As part of this process, we provide development and training opportunities to our workforce, which motivates and encourages them to grow in their work. As on March 31, 2025, the Company had 16 permanent employees. The Company has been maintaining cordial and healthy Industrial Relations, which has helped to a great extent in achieving the upper growth.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THERETO:

As disclosed in the notes to financial statements.

DISCLOSURE OF ACCOUNTING TREATMENT:

The Companys board of directors are responsible for the matters stated in section134 (5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The board of directors are also responsible for overseeing the Companys financial reporting process.

CONCLUSION

Financial Year 2024-25 represented a watershed moment for Tirupati Fincorp Limited, marked by unprecedented growth in business scale and operational complexity. While the company successfully expanded its revenue base by over 2,200%, the focus now shifts to achieving sustainable profitability and operational excellence.

The management remains committed to building a robust, technology-enabled financial services platform that creates long-term value for all stakeholders. With a strong foundation, experienced leadership, and clear strategic vision, the company is well-positioned to navigate future challenges and capitalize on emerging opportunities in Indias dynamic financial services landscape.

The upcoming regulatory clarity and business model optimization initiatives are expected to drive the next phase of sustainable growth and profitability.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements based on current expectations and assumptions. Actual results may differ materially from those expressed or implied due to various factors including economic conditions, regulatory changes, market volatility, and other business risks. The company cannot guarantee the accuracy of these projections and advises stakeholders to exercise appropriate caution when making investment decisions.