Poonawalla Fincorp Ltd

and Chief Executive Officer

Executing Change with Precision

DEAR STAKEHOLDERS,

As I present my first Annual Report as Managing Director and CEO of Poonawalla Fincorp, I am pleased to report that we have made considerable progress with conviction in the road ahead, and have strengthened the Company through robust risk, governance, and business models.

FY 2024-25 was a pivotal year— both transformative in its ambition and foundational in its execution. What we undertook was not an incremental change, but a holistic strengthening across various vectors including business, risk, compliance, audit, digital journeys, and AI.

When I joined this organisation, we laid out a clear plan: to drive a full-spectrum transformation across people, products, platforms and processes. We remain committed to a risk-first approach, deep domain capability, and a technology-driven operating model.

I am happy to report that we are now firmly in execution mode—and the outcomes speak for themselves.

ADVANCING AS A MULTIPRODUCT LENDER TO MEET DIVERSE CUSTOMER NEEDS

We launched six new businesses - Personal Loan Prime Digital 24x7 for salaried professionals, Education Loan, Commercial Vehicle Loan, Shopkeeper Loan,

Gold Loan, and Consumer Durable Loan, ahead of the guidance we had previously shared. These businesses have added incremental domain expertise to the Company and created opportunities for our employees to gain exposure to different businesses both on the product and risk side, distributions, and risk metrics. The response to these products in the market has been highly encouraging, with a visible impact on daily and monthly business run rates, fuelling continued growth and excellence.

CULTURE - HIGH PERFORMANCE, CONTINUOUS IMPROVEMENT

As we laid down a strong foundation by expanding our product portfolio, we continue to build a culture driven by high performance and high intensity, and deep expertise across our leadership team. We have brought together an elite retail lending team, comprised of specialists for every product and programme, backed by exceptional risk management expertise.

We are embedding the mindset of an athlete into our workplace, led by resilience, determination, and a commitment to continuous improvement. These qualities serve as the fundamental building blocks of our culture.

BUILDING AN INTELLIGENT PLATFORM TO CREATE A COMPETITIVE EDGE

Looking ahead, our journey towards becoming the smartest Company is gaining momentum, with technology providing a strong competitive edge. We are driving innovation through AI, digital journeys, and risk analytics, which are emerging as three key differentiators in assessing customers with speed and agility.

We have launched 25 AI initiatives, combining AI with human intelligence to drive efficiency and innovation across functions. Our four-year partnership with TIH at IIT Bombay will further accelerate AI- driven transformation, shaping the future of our organisation.

Additionally, our expertise in developing 24x7 digital journeys with enhanced experiences for customers is set to be a game- changer, enhancing our edge in personal loans and business loans. We are confident that this transformative step will redefine the customer experience and firmly position us as a leader in digital lending solutions in the next 4-6 quarters.

BALANCING INNOVATION WITH A RESPONSIBLE RISK AND GOVERNANCE

As we advance our efforts in AI and digital journeys, we remain deeply committed to managing risks responsibly and the highest standards of governance.

Leveraging the strong expertise of our seasoned leadership team, we have developed robust product and risk expertise across asset classes. This is further supported by AI- powered risk analytics, empowering our teams with actionable data and insights across the entire business spectrum, right from sourcing and underwriting to collections.

This commitment to responsible risk is matched by equally strong discipline in governance and execution. We implemented AI-based early warning systems, and enhanced internal audit protocols. These initiatives are helping institutionalise proactive risk visibility.

DEEPENING OUR FOOTPRINT WITH PURPOSE AND RESPONSIBILITY

As we continue to strengthen our footprint in the fast-growing lending segment, our governance- first, risk-first, and customer-first approach continues to guide us. By simplifying lending and enhancing experiences, we remain committed to creating customer delight and lasting relationships.

Our commitment to embracing this mindset has been key to delivering on our promises and strengthening customer trust.

STRATEGIC INVESTMENTS AND FINANCIAL PERFORMANCE

Our AUM grew by 42.5% year-on- year to ^35,631 Crore, underscoring the momentum across our portfolio.

We reported a 23% YoY growth in Net Interest Income (including fee and other income) to ^2,708 Crore and a steady Pre-Provision Operating Profit of ^1,417 Crore.

The growth was achieved while absorbing ^71 Crore of one-time Opex and continued investments in new products. Our PAT stood at ^(98) Crore as a function of onetime strategic provisioning of ^666 Crore on erstwhile STPL portfolio, one-time expenses and investments in new products.

For this financial year, we are confident of robust AUM growth and healthy profits. We are building a sustainable profitable model for years.

OUR ESG COMMITMENT

On the ESG front, we took concrete steps to align with SEBI's BRSR Core framework. Our commitment to transparency and accountability remains strong, with governance as a core pillar.

Environmentally, we reduced our ecological footprint through sustainable waste management and encouraged responsible water and energy usage among stakeholders.

Socially, we advanced diversity, equity, and inclusion through progressive policies and targeted training. Customer-centricity remains central to our ethos, complemented by active CSR initiatives that uplift the communities we serve.

NEXT PHASE FORWARD

I am pleased to share that the Company is well-poised and ahead of the curve for sustained growth. We have outlined a clear roadmap of building blocks, backed by well- calibrated risks.

Our priorities are clear. We are strengthening the building blocks and focusing on all our businesses to drive AUM growth this financial year. While we are looking at a healthy growth in profits. The core aim for us is to diversify risk through multiple products and create a sustainable profit model, that's what we are striving to achieve through the initiatives outlined above.

Thank you for your continued trust.