Skip to content

    Rikhav Securitie

    544340
    Financial Services·15 May 2025
    Management Summary

    Rikhav Securities Ltd. reported a consolidated total income of INR327.77 crores and a net profit of INR23.67 crores for FY25, with an EPS of INR7.51. The company faced challenges in H2 FY25 due to weakened market sentiment and SEBI regulations, leading to a significant fair valuation loss of INR33.88 crores from reclassifying investments to inventory. Despite these pressures, Rikhav launched new digital platforms and services, and plans to expand its geographical presence, aiming for stable bottom-line growth in the future.

    Highlights

    5

    • Consolidated Total Income for FY25 was INR327.77 crores.

    • Consolidated EBITDA for FY25 was INR34.50 crores, with a margin of 10.53%.

    • Consolidated Net Profit for FY25 was INR23.67 crores, with a net profit margin of 7.22%.

    • Earnings per share (EPS) for FY25 stood at INR7.51 (consolidated) and INR8 (standalone).

    • Successfully launched Margin Trading Facility (MTF) and digital platforms like Meon Aadhaar-based eKYC and Rikhav Plus app.

    Concerns

    4

    • A fair valuation loss of INR33.88 crores was recognized in the P&L due to reclassification of non-current investments to inventory.

    • Operating profit margin for the full year FY25 declined to 8% from previous levels of 50-52%.

    • Market sentiment weakened in H2 FY25, with mid-cap and SME segments declining by 20-25%.

    • Derivatives segment experienced a sharp drop in trading volumes due to recent SEBI regulatory changes.

    What Changed2

    vs Q2 FY26

    Guidance items9 → 3 (-6)Q&A highlights8 → 6 (-2)

    Key financials

    Single quarter

    06 metrics
    1. 01Total Income₹327.77 Cr
    2. 02EBITDA₹34.5 Cr
    3. 03EBITDA Margin10.5%
    4. 04Net Profit₹23.67 Cr
    5. 05Net Profit Margin7.2%

    Guidance & targets

    3
    CategoryTargetPriority
    Profitability
    Bottom-line
    More than FY25 numbers
    		Medium
    Profitability
    Bottom-line stability
    Stable
    		High
    Profitability
    Profit margin
    Increase
    		High

    Segment-wise revenue disclosure

    Next quarter
    CurrentNot disclosed
    TargetTo be disclosed

    Why it matters

    Provides greater transparency into the performance of different business lines and allows for better peer comparison.

    Okay. We will take your suggestion in our record and we will try to give that. We will definitely give it next segment-wise.

    How to verify

    key_financials.segment_breakdown

    Risks & concerns

    4
    RiskSeverity

    Weakened market sentiment in mid-cap and SME segments

    Market sentiment weakened considerably in H2 FY25, particularly in mid-cap and SME segments, showing a decline of nearly 20%-25%. — Management acknowledged

    high

    Sharp drop in derivatives trading volumes due to SEBI regulations

    The derivatives segment experienced a sharp drop in trading volumes, largely driven by recent SEBI regulatory changes. — Management acknowledged

    high

    Impact of investment reclassification on reported profitability

    A fair valuation loss of INR33.88 crores was recognized due to reclassification of non-current investments to inventory, materially impacting reported profitability for FY25. — Management acknowledged

    high

    Decline in operating profit margin

    Operating profit margin for the full year FY25 was 8%, a significant drop from previous levels of 50-52%. — Analyst acknowledged

    high

    Q&A highlights

    6

    “Actually, our major investment in SME segments and mid cap segments, and that segment is reduced, first time in this quarter, nearly about 25%. Actually, that loss is not booked. Only the market value of the script is reduced. So we conservatively provide that in our books. So around INR33 crores is only book loss.”

    Addresses the primary concern about the sharp drop in profitability and explains the impact of market conditions and accounting for valuation losses.

    asked by Ankur Jain

    3 min read6 chapters

    Detailed Narrative

    01

    H2 FY25 Performance and Market Challenges

    The second half of FY25 presented significant challenges for Rikhav Securities, with market sentiment weakening considerably, particularly in the mid-cap and SME segments, which saw a decline of 20-25%. Additionally, the derivatives segment experienced a sharp drop in trading volumes due to recent SEBI regulatory changes. These external headwinds🌐, combined with an internal strategic shift, impacted the company's financial performance, leading to an operating profit margin of 8% for the full year, down from historical levels of 50-52%.

    02

    Strategic Reclassification of Investments

    Rikhav Securities undertook a significant strategic shift by reclassifying certain equity shares from non-current investments (valued at cost) to inventory (valued at fair market value) with effect from October 3, 2024. This change, made for income-tax benefit purposes and to align with dynamic trading intentions, resulted in a fair valuation loss of INR33.88 crores as of March 31, 2025, which was recognized in the profit and loss account. Management clarified that on October 3, 2024, the market value was higher than the cost, and the decline occurred by year-end.

    03

    Digital Initiatives and Client Engagement

    The company has made significant strides in digitalizing its client onboarding and trading infrastructure. Key initiatives include the launch of the Meon Aadhaar-based eKYC platform for simplified customer onboarding and the Rikhav Plus mobile trading app, available on Android and iOS. These platforms aim to strengthen the brand's digital presence, enhance user experience, and facilitate smart investing. Client satisfaction with eKYC is noted, and offline clients are transitioning to online mediums.

    04

    Expansion and New Business Lines

    Rikhav Securities is actively expanding its operations beyond Maharashtra and Gujarat. The company has started four new business lines, including Margin Trading Facility (MTF) for clients and institutional brokerage. They are also focusing on algo trading for both prop and client desks and have upgraded their local servers to co-location servers for better service delivery. Marketing efforts, including digital campaigns and branch relations with CA firms, are planned for the second half of the year to attract new clients.

    05

    Market Making and Proprietary Trading

    Market making constitutes approximately 50% of the company's total business. The selection of new issues for market making is based on factors like merchant maker reputation, past experience, company projections, and visits. The proprietary trading division deploys capital using algorithmic strategies, delta hedging, and arbitrage models, supported by an automated risk management system that includes auto-stop mechanisms for margin limits and defaults. As of March 31, 2025, the post value of shares held was INR145 crores, with a market value of INR116 crores.

    06

    Financial Performance Overview for FY25

    On a consolidated basis for FY25, Rikhav Securities reported a total income of INR327.77 crores. EBITDA stood at INR34.50 crores, reflecting an EBITDA margin of 10.53%. Net profit for the year was INR23.67 crores, resulting in a net profit margin of 7.22%. Earnings per share (EPS) on a consolidated basis was INR7.51. On a standalone basis, total income was INR327.87 crores, EBITDA was INR34.88 crores (10.64% margin), and profit after tax was INR23.93 crores (7.30% margin), with an EPS of approximately INR8.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.