SRG Housing Finance Ltd

Dear Shareholders,

I am delighted to share insights on SRG Housing's robust performance for the financial year 2024-25, driven by steady execution, strategic expansion and a deep commitment to serve the evolving credit needs of our customers. We continued to adopt the latest technologies to drive innovation, enhance operational efficiency and streamline our customer journey, strengthening our capabilities to fufill the diverse homeownership needs of underbanked and underserved segments while driving profitable, sustainable growth.

Despite global challenges, India showed remarkable resilience, delivering steady growth, with real GDP estimated to grow at 6.5% in FY25. Strong domestic demand, increased infrastructure investment and steady performance across the service and agricultural sectors aided the sector's growth. Furthermore, the government's supportive measures to drive digitalization, increase financial inclusion and strengthen the 'Make in India' vision bolstered the economic growth. Though inflation was a concern, the RBI's proactive stance in lowering repo rates eased borrowing costs to some extent, helping both borrowers and lenders.

This positive momentum also benefited the housing finance sector's development in FY25. Showing strong growth potential, supported by long-term structural tailwind, the sector is expected to grow at a 15-16% CAGR between 2024-25 and 2029-30, reaching '77-81 trillion. In FY25, retail loans continued to drive growth for housing finance companies (HFCs) even as wholesale segments followed a cautious path. Improved asset quality, innovative technology-driven credit assessment methods, affordable housing loans and favorable government measures such as 'Pradhan Mantri Awas Yojana' (PMAY) and 'Housing for All', played a key

role in increasing demand for credit. Additionally, rising urbanization, housing shortages, a growing middle class and higher disposable income are fueling home ownership aspirations across segments, positioning HFCs at a crucial growth juncture.

FY25 PERFORMANCE REVIEW

Building on our 25+ year rich legacy, we are proud to have delivered yet another year of outstanding performance, laying a strong foundation for our collective success. Our Total Income stood at ' 154.54 crores, compared to ' 126.66 crores reported in FY24, an increase of 22.01%. We achieved a PAT of ' 24.39 crores, a result of our ongoing efforts to strengthen our core capabilities and enhance cost and operational efficiencies.

Maintaining our strong focus on asset quality, we continued to expand our regional presence through new branch additions in FY25, leading to strong growth in our loan book and disbursements, from both new and existing branches. Our Assets under Management (AUM) grew to ' 759.36 crores in FY25, from ' 601.59 crores in FY24, 26.23% increase. Simultaneously, our Disbursements stood at ' 304.96 crores in FY25 over '283.62 crores in the previous year, indicating a 7.52% increase.

Our Net Interest Income (NII) grew by 23.24% to ' 72.33 crores in FY25 compared to ' 58.69 crores in FY25. However, we saw a slight decrease in our Net Interest Margin (NIM) on aggregate Assets Under Management (AUM) at 10.63% in FY25 over 11.29% in FY24, owing to increase in Finance Cost and due to reduction in average lending rate . Despite this, we continued our focus on maintaining a robust credit quality, reinforcing the continued trust of our lenders, enabling us to maintain a healthy average lending rate of 21.56% and a loan spread of 10.42%, respectively, in the fiscal year. Our Loan sanctions grew from ' 312.07 crores in FY24 to ' 338.51 crores in FY25. Leveraging our robust collection efforts saw a reduction in our Gross NPA and Net NPA at 1.84% and 0.61% in FY25 over 2.29% and 0.69% in FY24, respectively. Sustained credit ratings of BBB Stable (Care) and BBB+ Stable (Acuite) have further strengthened our credibility as a trusted lender in the retail and affordable housing finance landscape.

STRENGTHENING CAPITAL BASE

Committed to responsible lending, we have built enduring relationships with our lending partners over the years. Our stringent underwriting practices that helped mitigate credit and collateral risks, resulting in a healthy LTV ratio of 44.30%. Additionally, we raised ' 194 crores through our balanced and diversified borrowing mix, comprising financial institutions (48%), banks (46%) and National Housing Bank (6%).

To further strengthen our capital structure, we raised ' 80 crores in equity during the fiscal year.

FORTIFYING STRENGTHS

To make affordable housing solutions more accessible across the rural and semi-urban belts of India, we continued to strengthen our core capabilities in FY25.

We continued to improve our product mix in FY25, underscoring our commitment to strengthening our position in the affordable housing segment and solidifying reach in target markets while exploring new geographies. Our housing loan portfolio stood at 73.06% in FY25, up from 68.94% in the previous year, while the share of Loans against Property (LAP) decreased to 26.94% in FY25 from 30.16% in FY24. Through aggressive branch expansion, we increased our branch network from 67 in FY24 to 90 in FY25, enabling us to enhance customer outreach and accessibility.

Committed to making our workforce future ready, we implemented various initiatives to boost employee potential and motivation and strengthened our team strength to over 850 members.

WAY AHEAD

Guided by our core leadership, strengthened capabilities and favorable trends in the affordable housing sector, we are optimistic about what lies ahead.

In FY26, we will continue to focus on expanding our lending portfolio and deepening our presence in underserved markets. We aim to grow our AUM to ~

' 1,000-1,100 crores and achieve loan disbursements of ~400 crores in FY26. Branch expansion continues to be a key pillar of our growth strategy. We plan to open new branches in key locations, including Maharashtra, Karnataka, Tamil Nadu, Telangana, and Andhra Pradesh, increasing our branches to 100 in the coming fiscal year.

Equally focused on profitable growth, we aim to achieve a Return on Assets (ROA) of over 3.5% supported by better resource allocation and optimization.

Our recent capital infusion will play a pivotal role in our ambitious journey, enabling investments in technology, people and infrastructure, while maintaining our strong focus on asset quality and operational discipline, fueling our vision to scale sustainably and responsibly.

As I conclude, I would like to express my heartfelt gratitude to our shareholders, customers, lenders, employees and other stakeholders for their steadfast support and belief in our capabilities to help millions achieve their dream of owning a home while fostering long-term inclusive growth for all.