Rikhav Securitie — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

Rikhav Securities Limited reported a total income of Rs. 386.67 crores and a profit after tax of Rs. 17.75 crores for H1 FY26. The company is focused on expanding its margin trading facility, which has a book size of Rs. 10 crores and is expected to grow by 30-40% every half year. Digital transformation, including a mobile app enhancement due in 3 months, is key to achieving its 20-25% year-on-year growth target and over Rs. 100 crores PAT in 5 years.

Highlights

  • Total income for H1 FY26 stood at Rs. 386.67 crores, reflecting steady operational progress.

  • Profit after tax for H1 FY26 was Rs. 17.75 crores.

  • The Margin Trading Facility (MTF) has grown to a book size of Rs. 10 crores and is projected to grow by 30-40% every half year.

  • Rikhav Securities actively supports 40-45 SME IPOs annually, contributing to market liquidity and depth.

  • The company targets a 20-25% year-on-year growth, driven by digital initiatives and expanding client reach.

Concerns

  • Mobile app active users are currently low at 1,500 to 1,800, though enhancements are underway.

  • The company has reduced its exposure in the SME segment over the last 6 months due to volatility, indicating a cautious approach.

  • An analyst noted a significant revenue increase but perceived a fall in profit, which management clarified as profit margin volatility due to business mix.

Key financials

  1. Total Income ₹386.67 Cr
  2. EBITDA ₹25.96 Cr
  3. Profit After Tax ₹17.75 Cr

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue93 225 380 1,596
EBITDA62 -37 19 -2
Net profit51 -27 18 1
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
  • Liquidity Undrawn ₹5 Cr Sanctioned fund for MTF from Tata Capital is 5 crores. Approximately 160 crores is held as bank FD for margin purposes with the exchange.
    Just now, we have deployed our fund. And we have sanctioned the fund for MTF from the Tata Capital. 5 crores sanction is there. If the size is growing, then we can have additional line for the funding of the MTF. ... It is not cash. Cash means it is a bank FD which was given to the exchange for the margin purpose.

Guidance & targets

Volume

  • MTF segment growth Volume · every half year · Medium confidence 30-40%
    We expect this segment to grow by 30% to 40% every half year as we expand participation and optimizing leverage management.

    — Hitesh Lakhani

Overall Company Growth

  • Year-on-year growth Overall Company Growth · year-on-year · High confidence 20-25%
    at Rikhav we expect 20-25% year-on-year growth, driven by ongoing digital initiatives, expanding client reach and operational efficiency improvement.

    — Hitesh Lakhani

Profitability

  • Return on capital from MTF Profitability · next year · Medium confidence 15-20%
    It is between 15% to 20%. Straightaway interest is about (+14%) brokerage for debt clients. With brokerage it is 15% to 20%.

    — Hitesh Lakhani

  • Profit after tax Profitability · Next 5 years · Medium confidence >100 crores
    Next 5 years, we can have more than 100 crores profit after tax.

    — Hitesh Lakhani

Digital Initiatives

  • Mobile app enhancement completion Digital Initiatives · within the next 3 months · High confidence Completed
    The final stage of enhancement for the app will be completed within the next 3 months, enabling a fully integrated real-time trading and client service experience.

    — Hitesh Lakhani

  • UPI handles accreditation Digital Initiatives · within 2 to 3 months · High confidence Implemented
    So, let's say UPI handles are now being accredited by the banks and itself, which will give us a brokering, what do you say, extension at the end. So that will be implemented within 2 to 3 months out.

    — Deep Lakhani

Revenue

  • Overall revenue growth Revenue · 2-3 years, year on year · Medium confidence 25-30%
    Overall, it's 25% to 30%, year on year.

    — Hitesh Lakhani

Client Acquisition

  • Growth in number of clients Client Acquisition · next years · Medium confidence 25-30%
    At least 25% to 30% growth in number of clients.

    — Hitesh Lakhani

Institutional Business

  • Institutional business growth Institutional Business · within 1.5 to 2 years · Medium confidence Profitable growth
    we can definitely grow the institutional business within 1.5 to 2 years in a profitable model.

    — Hitesh Lakhani

What to watch in Q3 FY26

Mobile app enhancement completion

within 3 months
Current Final stage underway
Target Completed

Why it matters

Crucial for seamless client experience, digital acquisition, and integrated real-time trading capabilities.

The final stage of enhancement for the app will be completed within the next 3 months, enabling a fully integrated real-time trading and client service experience.

Risks & concerns

  • Volatility in SME market making

    medium

    The company has reduced its exposure in the SME segment over the last 6 months due to its volatile nature.

    Management acknowledged

  • General stock market risks

    medium

    The company acknowledges inherent risks in the stock market but expresses confidence in overcoming them due to 25-30 years of experience.

    Management acknowledged

  • Market conditions affecting per user revenue

    low

    Per user revenue is largely dependent on market conditions, and the company currently lacks a direct mechanism to improve it.

    Management acknowledged

  • Profit margin volatility despite revenue growth

    low

    An analyst noted a 300% revenue increase but perceived a profit fall; management clarified this was profit margin volatility, explaining that revenue includes brokerage and prop trading turnover, which can fluctuate.

    Analyst clarified

Q&A highlights

8 direct
Liquidity and fair pricing in SME market with low volumes Direct
We are providing both the side quotes. So, whenever anybody wants to buy the shares from that quote, they can buy. And if they want to sell the shares, then they can sell. So, we provide both the quotes.

Explains the company's mechanism for ensuring liquidity and fair pricing in the SME market, addressing a key operational challenge.

Asked by Sakshi Shinde

MTF book growth, average loan size, interest rate, and repayment behavior Direct
Per user, it is between 20 to 50 lakhs average.

Provides specific operational details on the Margin Trading Facility, a new and growing segment for the company.

Asked by Sakshi Shinde

Funding for MTF growth Direct
Just now, we have deployed our fund. And we have sanctioned the fund for MTF from the Tata Capital. 5 crores sanction is there. If the size is growing, then we can have additional line for the funding of the MTF.

Clarifies the current funding source and future expansion strategy for the MTF business.

Asked by Sakshi Shinde

Client retention and reasons for clients leaving Direct
Means, up till today, mostly none of the clients are left. If the client wants to leave or close account, then our RN will pursue them and whatever the problem they face, we try to solve that problem and on that way, we retain the client.

Highlights the company's proactive approach to client retention and problem-solving to minimize churn.

Asked by Ishita Patel

SME market making participation and selection criteria Direct
For the selection of the SME market making, one, we depend on the merchant bankers. And second, we preliminary examine the company and maybe possible sometimes we visit the company and we meet the promoters.

Details the due diligence process for participating in SME IPOs, an area of active involvement for Rikhav Securities.

Asked by Anshul

Ensuring consistent profitability and managing liquidity in volatile SME market making Direct
That's why since last 6 months, we have reduced the exposure in SME segment.

Reveals a strategic decision to reduce exposure in a volatile segment, demonstrating risk management in practice.

Asked by Anshul

Impact of recent SEBI or exchange changes on business economics Direct
It is somewhat some adverse effect in overall business, but we manage very well. So, we retain the growth. The recent changes affect every broker.

Acknowledges the impact of regulatory changes but asserts the company's ability to manage and maintain growth.

Asked by Abhishek Sharma

Cyber and data security measures and improvements Direct
So, for cyber security and this thing, we have a basic security patch that rolls out every three months for our app and this thing. You could see on the Logon Play Store. For the secondary trading diode system, that is kind of a vendor-based system. We have a system audit, cyber audit that is regulated by SEBI as well as some guidelines issued by the cyber cell.

Provides detailed insights into the company's cybersecurity framework and compliance, crucial for a financial services firm.

Asked by Abhishek Sharma

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

Rikhav Securities Limited reported a total income of Rs. 386.67 crores for the first half of FY26. During the same period, the company achieved an EBITDA of Rs. 25.96 crores and a profit after tax of Rs. 17.75 crores. This performance is attributed to steady operational progress and continuous efforts to enhance efficiency, scalability, and service quality.

Margin Trading Facility (MTF) Expansion and Returns

The company's recently commenced margin trading facility (MTF) has rapidly grown to a book size of Rs. 10 crores, demonstrating healthy momentum. Management projects this segment to grow by 30-40% every half year. The expected return on capital from the MTF business is estimated to be between 15% to 20%.

Digital Transformation and Client Acquisition

Rikhav Securities has successfully rolled out its online account opening process and a mobile application designed for seamless portfolio access. The final stage of app enhancement, promising a fully integrated real-time trading and client service experience, is expected to be completed within the next 3 months. The company aims for 25-30% growth in client numbers, leveraging both digital channels and personalized engagement.

Strategic Growth Outlook and Long-term Profitability

The company anticipates a 20-25% year-on-year growth, driven by ongoing digital initiatives, expanding client reach, and operational efficiency improvements. Looking ahead, Rikhav Securities targets achieving over Rs. 100 crores in profit after tax within the next 5 years. This ambitious goal is supported by strategic capital reallocation towards scalable, technology-led, and high-yield business verticals.

SME Market Making and Risk Management

Rikhav Securities actively supports 40-45 SME IPOs annually, playing a role in enhancing liquidity and market depth. However, due to the inherent volatility in this segment, the company has strategically reduced its exposure in SME market making over the past 6 months. Selection for SME market making relies on merchant bankers and preliminary company examinations, including promoter meetings.

Cybersecurity and Regulatory Compliance

The company emphasizes its robust technology infrastructure and automated risk management. It implements a basic security patch for its mobile app every three months and conducts regular system and cyber audits regulated by SEBI. Furthermore, UPI handles accreditation, which will enhance brokering capabilities and security, is expected to be implemented within 2-3 months.

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