Gretex Corporate — Q3 FY26 earnings call

Call held 19 Jan 2026

Management summary

Gretex Corporate Services Limited reported a strong Q3 FY26 with total income of INR 54.8 crores and PAT of INR 6.9 crores, driven by robust execution in its merchant banking and broking segments. The company maintained a healthy pipeline of 20 active IPOs and 26 market-making mandates, while also expanding into alternative investments with a proposed AIF. Despite a SEBI financial penalty of INR 15 lakhs and acknowledged volatility in EBITDA margins, management expressed confidence in achieving 40-45% PAT margin for FY26, focusing on mainboard IPOs for more stable revenue.

Highlights

  • Total income for Q3 FY26 stood at INR 54.8 crores, reflecting sustained business activity.

  • EBITDA for Q3 FY26 was INR 12.3 crores, demonstrating strong sequential improvement in operating profitability.

  • EBITDA margin for Q3 FY26 was 22.4%, underscoring inherent operating leverage.

  • PAT for Q3 FY26 was INR 6.9 crores, with PAT margin improving to 12.5%, reflecting healthy bottom line conversion.

  • Maintained a strong and well-balanced pipeline with 20 active IPOs under execution (14 SME IPOs, 6 mainboard IPOs) and 26 active market-making mandates.

  • Successfully completed listing of several client companies and received In-Principle approvals for others, indicating robust IPO pipeline.

  • Proposed investment in a CATEGORY II AIF with a 50% partnership interest and a target corpus of up to INR 100 crores, expanding into alternative investments.

Concerns

  • SEBI imposed a financial penalty of INR 15 lakhs, though management stated no operational ban.

  • Acknowledged significant volatility in EBITDA margins, explained as inherent to the business model.

  • Anticipation of more uneven or lumpy revenue recognition in upcoming quarters due to longer execution cycles of mainboard IPOs.

  • SME IPO market sentiments are 'not very good,' potentially leading to fewer listings compared to the previous year.

Key financials

2 periods

Q3 FY26

  • Total Income
    ₹54.8 Cr
  • EBITDA
    ₹12.3 Cr
  • EBITDA Margin
    22.4%
  • PAT
    ₹6.9 Cr
  • PAT Margin
    12.5%

9M FY26

  • Total Income
    ₹144.8 Cr
  • EBITDA
    ₹34.2 Cr
  • EBITDA Margin
    23.6%
  • PAT
    ₹20.7 Cr
  • PAT Margin
    14.3%

What they filed

Q1 FY27: revenue up 72.7%, net profit up 1200.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue94 66 60 22 80 −15%42 −36%35 −42%38 +73%
EBITDA17 -12 -12 2 32 +88%0 +100%10 +183%17 +750%
Net profit15 1 -21 1 13 −13%7 +600%7 +133%13 +1200%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • M&A Bahutex Ventures LLP (AIF) Joint venture · Announced · Consideration ₹[object Object] (cash) · AUM ₹100 Cr

    Expand presence in alternative investment space and complement existing capital markets platform.

    Gretex Corporate Services Limited will hold a 50% partnership interest as a designated partner. Capital commitment of INR 2.5 crores is not expected to impact dividend distribution.

    No. We are committing only the 2.5% as a capital commitment of the overall fund that we are raising. That is INR2.5 crores overall. And obviously, this INR2.5 crores is not going to stop this dividend distribution. So, hopefully, this dividend distribution can be there. This is not going to impact our AIF investment as well.

Guidance & targets

Profitability

  • Consolidated PAT Margin Profitability · Q4 FY26 · Medium confidence 40-50%
    See, we are expecting in this quarter, I mean this current quarter because if you remember right now is the report which I just read out. So, we have mentioned that we have got an approval of three companies. Approval is already there in our hand. Remaining three, four companies we are also expecting approval by this month only and hope to list all the companies within this quarter only. So, once we will have all the listing in place, so definitely what I have proposed last quarter, we will be able to reach this quarter.

    — Alok Harlalka

  • Annual EBITDA Margin Profitability · FY26 · High confidence 20-22%
    at the end of the year, our EBITDA margin will be 20% to 22%, which is the past record of 2-3 years.

    — Alok Harlalka

  • Annual PAT Margin Profitability · FY26 · High confidence 40-45%
    This year, we are expecting 40% to 45% PAT margin, considering all four quarters put together.

    — Alok Harlalka

Business Strategy

  • SME IPOs vs. Main Board Focus Business Strategy · Going forward · High confidence Gradually decrease SME IPOs, focus on Main Board
    So, what I remember that in first call, when we have internally discussed that we will be reducing the, I mean, SME IPOs gradually. We will be transforming our entire business model to the Main Board focused.

    — Alok Harlalka

What to watch in Q4 FY26

Consolidated PAT Margin Achievement

Q4 FY26
Current 12.5% (Q3 FY26)
Target 40-50%

Why it matters

This is a significant jump in profitability targeted for the next quarter, dependent on successful listings.

See, we are expecting in this quarter, I mean this current quarter because if you remember right now is the report which I just read out. So, we have mentioned that we have got an approval of three companies. Approval is already there in our hand. Remaining three, four companies we are also expecting approval by this month only and hope to list all the companies within this quarter only. So, once we will have all the listing in place, so definitely what I have proposed last quarter, we will be able to reach this quarter.

Risks & concerns

  • SME IPO market fatigue and reduced listings

    medium

    Signs of SME IPO fatigue and normalizing subscription numbers could lead to fewer listings compared to the previous year, although Gretex will not reduce fees.

    Analyst acknowledged

  • Uneven revenue recognition from mainboard IPOs

    medium

    Longer execution cycles for mainboard IPO mandates are expected to result in more uneven or lumpy revenue recognition in upcoming quarters.

    Analyst acknowledged

  • EBITDA margin volatility

    low

    Significant quarter-on-quarter volatility in EBITDA margins is inherent to the business model, as major revenue is recognized only upon listing events.

    Analyst acknowledged

Q&A highlights

8 direct
SEBI penalty and operational ban Direct
Yes, there is no ban apart from this financial liability which SEBI has charged to us. There is no ban as such and even no ban is going to have later on as well.

Clarifies that the INR 15 lakhs SEBI penalty is a financial liability only and does not impose any operational restrictions or ban on the company.

Asked by Parth Patel

Achievement of 40-50% PAT margins Direct
See, we are expecting in this quarter, I mean this current quarter because if you remember right now is the report which I just read out. So, we have mentioned that we have got an approval of three companies. Approval is already there in our hand. Remaining three, four companies we are also expecting approval by this month only and hope to list all the companies within this quarter only. So, once we will have all the listing in place, so definitely what I have proposed last quarter, we will be able to reach this quarter.

Provides a specific timeline (Q4 FY26) for achieving a significant profitability target, contingent on successful listings.

Asked by Parth Patel

AIF capital commitment and dividend impact Direct
No. We are committing only the 2.5% as a capital commitment of the overall fund that we are raising. That is INR2.5 crores overall. And obviously, this INR2.5 crores is not going to stop this dividend distribution. So, hopefully, this dividend distribution can be there. This is not going to impact our AIF investment as well.

Confirms the company's capital commitment to the new AIF (INR 2.5 crores) and assures that it will not negatively impact dividend distribution.

Asked by Vikrant Verma

AIF investment focus and safeguards against conflict of interest Direct
Yes. Yes. They will be separate in all the team. I mean, the investment managers, everyone are the separate entity. So, obviously, conflicts of interest are there. But definitely, yes. First of all, we are not going to invest only in such pre-IPO where Gretex is involved. This fund is going to invest in some other transition where Gretex is not involved.

Details the AIF's primary focus on pre-IPO investments and outlines measures to prevent conflicts of interest, such as separate teams and investing in companies not involved with Gretex.

Asked by Vikrant Verma

Uneven revenue recognition from mainboard IPOs Direct
Yes. Definitely, yes.

Management confirms that the longer execution cycles of mainboard IPOs will lead to more uneven or lumpy revenue recognition, setting investor expectations.

Asked by Vikrant Verma

SME IPO fatigue and impact on merchant banking fees Direct
So, definitely we are not decreasing our fees, whatever we are charging. So, there is no, I mean, compromising in terms of our fees. If market is doing very poor, it doesn't mean our efforts has gone down. Even our efforts has gone more if the market is not doing well.

Clarifies that despite potential SME IPO market fatigue, Gretex will not reduce its merchant banking fees, asserting that their efforts increase in challenging market conditions.

Asked by Tejpal Singh

Volatility in EBITDA margins Direct
This listing happens, I mean the business model what we have, once company gets listed, that time only we will get major revenue. It's not everyday listing happening. It's not like that. So, that's the reason this EBITDA margin keeps volatile.

Explains that the inherent nature of the merchant banking business, where revenue is recognized upon listing, causes the observed volatility in EBITDA margins.

Asked by Shania Jain

Impact of SEBI's increased eligibility criteria for merchant bankers Direct
Yeah so, to be very honest, this is a very good step which SEBI has taken. It's not like that I'm asking for myself. It is about this entire industry. So, definitely, because this listing, I mean, whichever company wanted to list, they need to go to merchant bank like us. So, it is always important to have such people only who has the knowledge, who has that capabilities to do the right, I mean, disclosure has to happen.

Management views stricter SEBI norms as positive for the industry, ensuring quality players, and implies Gretex is well-prepared for such changes.

Asked by Rohan Mehta

2 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Gretex Corporate Services Limited reported a resilient operating performance for Q3 FY26, with total income reaching INR 54.8 crores. The company achieved an EBITDA of INR 12.3 crores, translating to an EBITDA margin of 22.4%, indicating strong sequential improvement in operating profitability. Profit after tax stood at INR 6.9 crores, with the PAT margin improving to 12.5%, reflecting healthy bottom-line conversion.

Nine-Month FY26 Performance Highlights

For the nine months ended December 31, 2025, Gretex reported a total income of INR 144.8 crores and income from operations of INR 143.7 crores. EBITDA for this period was INR 34.2 crores, resulting in an EBITDA margin of 23.6%. The profit after tax for 9M FY26 was INR 20.7 crores, with a PAT margin of 14.3%, demonstrating consistent profitability despite varying market conditions.

Robust IPO and Market-Making Pipeline

The company maintains a strong and balanced pipeline, with 20 active IPOs currently under execution, comprising 14 SME IPOs on NSE Emerge and BSE platforms, and 6 mainboard IPO mandates. Additionally, its market-making business manages 26 active mandates, with 14 on NSE Emerge/BSE SME platforms and 12 from institutional clients, indicating growing scale and depth in its operations.

Expansion into Alternative Investment Funds (AIF)

Gretex is expanding its presence in the alternative investment space through a proposed investment in a CATEGORY II AIF. This AIF, to be sponsored and managed by Bahutex Ventures LLP, will see Gretex Corporate Services Limited holding a 50% partnership interest. The fund aims for a target corpus of up to INR 100 crores, aligning with evolving investor preferences for alternative investment products.

Recent Listings and IPO Pipeline Development

During the quarter, Gretex successfully completed the listings of Flywing Simulator Training Centre Limited, MPK Steel India Limited, and Munish Forge Limited. The company also secured In-Principle approvals for SSG Furnishing Solutions Limited, Vama Wovenfab Limited, and Shreyas Fabtech Limited, and filed DRHPs for Brandman Retail Limited, Sureflo Techcon Limited, and Acetech E-Commerce Limited, highlighting a robust IPO pipeline.

Strategic Shift Towards Mainboard IPOs

Management indicated a strategic shift to gradually reduce focus on SME IPOs and transition the business model towards mainboard IPOs. This move is aimed at achieving more stable revenue and reducing risk, as SME IPOs require a minimum 5% investment as a market maker. The company plans to focus on mainboard IPOs while selectively undertaking SME IPOs.

SEBI Regulatory Environment and Fee Structure

Gretex views SEBI's potential increase in eligibility criteria for investment bankers as a positive step to strengthen the industry by ensuring only capable players. Despite signs of SME IPO fatigue and normalizing subscription numbers, management stated they would not reduce merchant banking fees, asserting that their efforts increase when market conditions are challenging.

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