Wallfort Financial Services Ltd Management Discussions

During Financial Year 2025, the Indian economy grew at a stable rate of 6.3%. This was lower than the previous year due to factors such as lower demand caused by prevailing global uncertainties and slowdown in the infrastructure and construction sector due to the elections. In cognisance of this slowdown, the RBI has in its latest MPC meeting, reduced the repo rates by 50 bps and CRR by 1% to boost demand and credit growth in the economy. With the elections over, the infrastructure and construction activity are expected to pick up strongly in the coming years which will have a positive impact on the economic growth.

While domestically things are stable, there remains a considerable uncertainty with respect to the international environment, especially due to the ongoing Ukraine-Russia war, tensions in the Middle-East and the reciprocal tariffs proposed by the USA on most countries. A higher tariff for India could impact Indias exports to the USA and also have some spillover effects on the demand in the locally. On the bright side, India and the USA are close to finalising a trade deal which is expected to be in the mutual interest of both the countries. On the banking side, the credit growth remains resilient, however, some banks have started witnessing an increase in slippages and provisions. Despite this, the banking system remains largely stable.

As per the charts extracted from the IMFs World Economic Outlook Report of April 2025, the charts are clearly indicative of a considerable fall in inflation over the last 2 years. Going forward, barring an uncertain events, inflation is expected to further fall and stabilise and normal levels. However, a further reduction will also depend on the US reciprocal tariffs. Higher tariffs could lead to higher inflation. The world has been facing consequtive challenges since the beginning of the war in Ukraine. This has significantly impacted the consumer confidence globally as is reflected from the chart. India has not been an exception to this issue. While India is growing faster than the rest of the world, the consumer confidence has been affected here too. Now with reciprocal tariffs, the impact on the global economic growth, inflation and consumer confidence remains to be seen.

With Indias demographics, stable government and strong banking & financial system, it seems well placed to navigate this volatile environment and come out bigger and stronger. With respect to its stock markets, Indias slower GDP growth in comparison to the previous year had impacted the performance in its benchmark indices. The Nifty50 & SENSEX ended this financial year on a slightly positive note owing to a stable economic and political environment, with significant downward pressures during the second half of the financial year. The BSE SENSEX increased by around 4.6 per cent in FY 2025 while the broader Nifty50 index of the National Stock Exchange (NSE) increased by around 4.7 per cent. The FY 2025 has been a much weaker year in comparison to FY 2024 due to the base effect and a sluggish environment. The FY 2026 is expected to be relatively better if the global environment stabilises.

OPPORTUNITY

l Positive long-term economic outlook will lead to opportunity for financial services l Increased digitalisation allowing AMCs to expand services and improve penetration l Growing popularity of SIPs, with large-scale campaigns improving outreach. l Regulatory reforms would aid greater participation by all class of investors l Corporates looking at consolidation / acquisitions / restructuring opens out opportunities for the corporate advisory business

We are very pleased to inform you that your company is now servicing 118 Institutional Clients and look forward to become one of the premier brokerage houses for Institutions/ Corporates /Banks and FIIs in years to come. With a positive outlook on DII and Mutual Funds Flows we look forward to generating more business and servicing even more institutional clients.

THREAT

l Short term economic slowdown impacting investor sentiments and business activities l Credit risk, interest rate risk, liquidity risk and operational risks are the major risks the company faces. l? High employee turnover and attraction of fresh talent continues to be a challenge. l? Regulatory reforms would aid greater participation by all class of investors l? Increased intensity of competition from local and global players.

STRENGTH

Strong Brand Name

We are enhancing our service capabilities, providing good quality research and efficient market information to our clients. With a strong brand name Wallfort is a well-established brand among institutional investors in India and Broking Community. Wallfort believes that its brand is associated with high quality research and advice as well as corporate values like integrity and excellence. The company intends to leverage its brand to grow its businesses, build relationships and attract and retain talented individuals.

Experienced Top Management

The top management team comprises qualified and experienced professionals, with a successful track record is in charge of the corporations goals, policies, and procedures.

Strong Risk Management

Strong Risk Management Risk exposure is monitored and controlled through a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems. Risk management department analyses this data in conjunction with the companys risk management policies and takes appropriate action where necessary to minimize risk.

RISK AND CONCERN

l Impact of markets on our revenues and investments, sustainability of the business across cycles sharp movements in prevailing interest rates in the market. l Risk that a client will fail to deliver as per the terms of a contract with us or another party at the time of settlement. l Risk due to uncertainty of a counterpartys ability to meet its financial obligations to us. l Inability to conduct business and service clients in the event of a contingency such as natural calamity, breakdown of infrastructure, etc.

OUTLOOK

While we continue to remain highly optimistic on Indias medium to long term growth story, our views on its capital markets in the near term is cautious. The shift in consumer saving patterns away from term deposits and into capital markets have led to substantial inflows into equities driving some segments of the market into a bubble territory. At current juncture, it is the economy running to catch up to the valuations set by its capital markets. With this in perspective, we believe the performance of indices will be moderated for the time being as the earnings catch up to the valuations.

The FY 2025 was an eventful year with so many elections in different parts of the world, including in India and USA. The war in Ukraine continues to rage on and the environment in the Middle-East remains tense. We have entered FY 2026 with many existing issues and some new ones. It remains to be seen how the world economies will cope up with the reciprocal tariffs imposed by the USA. The inflation, which had been coming off, might start inching upwards depending upon the intensity of the reciprocal tariffs. This issue has led to strained relations between different countries.

The population ageing in different parts of the world along with increased levels of debt in many advanced economies are expected to decrease spending power, at the same time, the increasing prevalence of AI is expected to create some turmoil in the job markets. Amidst these issues, India seems fairly well placed considering its demographics, financial stability and political stability.

As for stock markets, the key indexes SENSEX/NIFTY50 have given muted returns during FY 2025. Going forward, return creation will depend on how quickly the world is able to deal with the current phase of policy uncertainty and if the Government of India is able to continue its slew of reforms and create jobs in its third term too.

RISK MITIGATION

Although the Company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion.

In todays challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are changing regulations, competition, business risk, technology obsolescence, retention of talent, and expansion of facilities. Business risk, inter alia, further includes financial risk, political risk, fidelity risk, and legal risk. As a matter of policy, these risks are assessed and steps are taken to mitigate the same.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has appointed M/s. Rashmi Jain & Associates., Chartered Accountants as the Internal Auditors as mandated under Section 138 of the Companies Act, 2013 who examine and ensure that internal checks and control procedures are adequate. They also ensure proper accounting, records authorization, control of operations and compliance with law.

An appropriate and adequate system of internal controls exist in your Company to ensure that all assets are safeguarded and protected against loss or from misuse or disposition, and that the transactions are authorized, recorded and reported suitably. Internal control systems ensure effectiveness of operations, accuracy and promptness of financial reporting and observance with laws & regulations. The internal control is supplemented on an ongoing basis by an extensive internal audit which is conducted each year by and independent audit firm.

The internal audit report along with management comments thereon are reviewed by the Audit Committee of the Board comprising of independent and non-executive Directors on a regular basis. Implementation of the suggestions is also monitored by the Audit Committee. The internal controls are designed to ensure that the financial and other records of the Company are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

FINANCIAL PERFORMANCE Amount in Thousands

Particulars	For the year ended 31 March, 2025	For the year ended 31 March, 2024
Revenue from Operations	3,33,550.96	5,08,062.24
Other Income	2,603.13	953.22
Total Income	3,36,154.09	5,09,015.45
Finance Cost	1,683.88	1,666.34
Employees Benefit Expense	48,411.98	39,354.33
Depreciation and Amortization Expense	4,359.92	3,776.14
Other Expense	1,32,919.83	99,976.00
Total Expense	1,87,357.61	1,44,772.81
Profit Before Tax	1,48,778.48	3,64,242.64
Current Tax	34,276.49	50,287.22
Defered Tax Charge/(Credit)	(5,269.13)	17,839.28
Short/(Excess) Provision for tax for earlier years	(277.31)	-
Total Tax Expense	28,730.05	68,126.50
Profit After Tax	1,20,048.43	2,96,116.14

a) INCOME

The Companys revenue from operations stood at INR 33.36 crore compared to INR 50.81 crore in the previous year. Other income stood at INR 26.03 lacs compared to INR 9.53 lacs in the previous year.

b) EXPENDITURE

Total expenditure for the year increased by 29.42% to INR 18.74 crore, as against INR 14.48 crore in the previous year. Employee benefit expenses for the year were INR 4.84 crore as against INR 3.94 crore in the previous year an increase of 23.01%.

Depreciation for the year increased to INR 43.60 lacs as against INR 37.76 lacs in the previous year a increase of 15%. Other expenses for the year were INR 13.29 crore as against INR 10 crore in the previous year - a decrease of 33%.

c) PROFIT AFTER TAX

The Profit for the year stood at INR 12 crore as against INR 29.61 crore in the previous year - an decrease of 59.46%.

DEVELOPMENTS IN HUMAN RESOURCES

It is your Companys belief that people are at the heart of corporate and constitute the primary source of sustainable competitive advantage. The trust of your Companys human resource development efforts, therefore, is to create a responsive and market driven organization. Your Company continues its focus on strengthening competitiveness in its business. Your directors look forward to the future with confidence. The Company has followed a conscious policy of providing training to management staff through in-house and external programs for upgrading personal and technical skills in relevant areas of functional disciplines.

SIGNIFICANT CHNAGES IN KEY FINANCIAL RATIOS (25% or MORE)

Additional regulatory requirement under (WB) (xvi) of Division III of Schedule III amendment disclosure of ratios, is not applicable to company as it is in broking business and not an NBFC registered under section 45-IA of Reserve Bank of India Act, 1934.

CHANGES IN RETURN ON NETWORTH

Return on Networth	2024-25	2023-2024
	7.42%	19.86%

 

	By Order of the Board
	For Wallfort Financial Services Limited
	Sd/-
	Ashok Bharadia
Date: 12/08/2024	Chairman & Managing Director
Place: Mumbai	(DIN 00407830)