Aditya Birla Money Ltd

Dear shareholders,

I am pleased to inform that your company reported highest ever revenue from operations at ?390 Crore, up 48% y-o-y and net profit at ?53 Crore, up 56% y-o-y for FY24. During the year, inflation in India (as also across the world) cooled down although it continued to remain higher than RBI comfort zone. Nevertheless, by March 2024, CPI inflation in India fell to 4.9% compared to highs of 7.4% seen in September 2022. Energy prices continued to remain high in FY24 as brent crude oil price broadly remained firm (over $80/bbl). Towards the end of FY24, crude oil prices were further supported by conflict between Israel and Hamas. The ongoing conflict in the Middle East region does impact the world economy in many ways, including energy prices, trade, investments, geopolitical tensions and humanitarian impact. Despite these factors, India's real GDP growth in FY24 is estimated to have grown at 7.3% compared to 7.2% in FY23, as per the first advance estimates of national income released by the National Statistical Office. Aided by economic growth, the direct tax collection increased 18% y-o-y to ?19.6 Trillion. As a result, India's Tax-GDP ratio stood around 11%, a sharp rise from the 8% levels during the pre-GST era. Overall, the Indian economy remained resilient through FY24, despite numerous domestic and global headwinds. While inflation has come off globally during FY24, the disruption caused by geopolitical conflicts has pushed up commodity prices which have delayed interest rate cuts. Looking ahead, higher commodity prices are likely to impact consumer demand and impact the profitability of manufacturing units.

One of the most significant pain points for most large global economies was the rising interest rates in the wake of decadal high inflation. Nevertheless, despite high inflation, the US real GDP remained resilient in 2023 growing at 2.5% on a y-o-y basis. However, tighter monetary policy may remain a drag on economic activity and employment in most major economies in 2024. World GDP is forecasted to have grown at 3.2% in 2023 and is expected to growth at 3.2% each during 2024 and 2025 as per IMF. Inflation, which was at the heart of the economic woes, moderated through the year, but a sustained decline to central bank targets does not seem imminent. For instance, inflation in the US has moderated from 9.0% in June 2022 to 3.5% by March 2024 but is still way above the 2% target of the US Fed. Consequently, the US central bank's policy rate is now in a target range of 5.25% - 5.50%, the highest level in 15 years, and more notably, it was near zero in early 2022. As far as China was concerned, it continues to face slowdown in its GDP growth. IMF projects China's economic growth would drop to 4.6% in 2024, down from its 5.2% growth in 2023, and fall further to 3.4% by 2028. Its real estate investment is likely to fall 30% to 60% in the next ten years relative to 2022 levels.

Reflecting on the resilience of the Indian economy, we can say that the Indian equity markets have managed to outperform most other large markets. For FY24, Nifty increased by 29% while midcap index was up 60% and small cap index jumped by staggering 70%.

Despite high inflation and upcoming central elections, the Indian market's resilience necessitates notice even as it came in the face of the ongoing Iran- Israel conflict, aggressive monetary policy, high inflation rate and high commodity prices. Regarding capital flows in the equity markets, FIIs and DIIs were net buyers to the tune of ?2.0 lakh Crore and ?2.1 lakh Crore, respectively. DII buying was led by sustained inflows into mutual funds from retail investors (Gross SIP flows stood at all time high at ?19,271 Crore in March 2024). Retail investors held their nerves and have become a formidable force in the domestic equity markets. This has been a significant positive for the broking industry. The total number of demat accounts in India has reached a new high of 15.1 Crore as of 31^st March 2024. During FY24, the number of demat account added stood at 3.7 Crore compared to ?2.5 Crore in FY23. Banks' balance sheets have improved remarkably over the past two years and they are ready to fund the next leg of corporate capex over the coming years.

Between April 2023 and March 2024, the average daily turnover in the cash segment jumped over 98%, which showcases the strong demand for equity among investors. Overall, the monthly cash segment ADTO of NSE clocked ?82,406 Crore in FY24 compared to ?53,434 Crore in FY23, representing an increase of 54% on a y-o-y basis. Regarding the bond market, India's 10 year yield fell ~30bps to 7.1% by end of FY24, reflecting likely fall in interest rate over the coming one year. During H1FY24, the bond yields increased while it fell towards the end of the year. The outlook on global economic front is uncertain in FY25. While the geopolitical issues continue to keep the supply side tight, the global rate-tightening cycle is ending. Inflation has likely peaked out and is expected to moderate further during FY2024-25. However, the impact of ravaging inflation and the stickiness of high interest rates must be gauged and remains one of the most critical uncertainties. As far as India is concerned, India's GDP growth is likely to grow by 7% in FY25 as per RBI.

During FY24, your Company recorded Total Revenue of ?395 Crore compared to ?279 Crore in FY23, an increase of 42% y-o-y mainly led by higher interest income, higher fees and commissions. The Profit Before Tax stood at ?69 Crore for FY24 compared to ?47 Crore for FY23, an increase of 48% y-o-y. Your Company constantly strives for product innovations to elevate customer experience and promote customer delight. During September 2022, your Company had launched the new trading app for seamless and faster execution and interactive charting tools and analysis - the benefits of which has accrued in FY24 and are likely to continue going forward. Also, we had launched Integrated third- party advisory platforms offering DIY assistance for customers to make informed decisions based on benchmark model portfolios for their equity-led wealth creation journey. In August 2023, Insurance Regulatory and Development Authority of India granted the license to your Company to venture into Corporate Agency business as corporate agent and to distribute products of Life Insurance, Health Insurance & General Insurance. Your Company continued its efforts to educate customers on the various aspects of investing/trading vide research- led webinars and the creation of instructional videos. In this era of higher interest rates, global macroeconomic uncertainty and constant industry dynamics, your Company is committed to being a leader and role model in all facets of its business by striving to be the best in class. As we advance, the three key factors that shall drive your Company's growth and ensure sustainability are digital transformation, diversifying revenue streams and a wider reach and customer base.