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    Anand Rathi Share and Stock Brokers Limited

    ARSSBL
    Financial Services·15 Jan 2026
    Management Summary

    Anand Rathi reported a strong Q3 FY26 with consolidated revenue up 21% Y-o-Y to ₹2,482 million and PAT soaring 72% Y-o-Y to ₹370 million. Key growth drivers included a 48% Y-o-Y increase in Assets Under Custody and a 46% Y-o-Y surge in the MTF book with zero NPAs. The company also significantly improved its debt-equity ratio to 0.59, while navigating a subdued market environment and focusing on strategic revenue diversification and technology integration.

    Highlights

    5

    • Total consolidated revenue from operations stood at ₹2,482 million for Q3 FY26, representing a 21% year-on-year growth.

    • PAT for Q3 FY26 was ₹370 million, reflecting a 72% year-on-year growth and 15% PAT margin.

    • Total assets under custody (AUC) grew at a healthy rate of about 48% compared to the corresponding period last year, reaching ₹1,058 billion.

    • MTF book surged by as much as about 46% Y-o-Y to ₹12,317 million, with zero NPAs reported.

    • Debt-equity ratio improved significantly to 0.59 as of December 31, 2025, down from 2.36 as of December 31, 2024.

    Concerns

    3

    • Indian capital markets had a 'rough ride' in financial year 26, with Sensex and Nifty delivering 'lackluster gains' and 'underperforming other significant global peers.'

    • Sustained selling by foreign investors, citing concerns over weak earnings, stretched valuations, and currency volatility, resulted in subdued benchmark indexes.

    • The distribution segment saw a sequential decline in Q3, attributed to subdued market conditions and aggressive marketing by teams in the prior quarter.

    Key financials

    Single quarter

    09 metrics
    1. 01Revenue from Operations2,482 Mn+21%YoY
    2. 02EBITDA1,012 Mn+32%YoY
    3. 03EBITDA Margin41%
    4. 04PAT370 Mn+72%YoY
    5. 05PAT Margin15%

    Segment breakdown

    Broking and Related Services
    52% Revenue Contribution1,287 Mn Revenue
    Distribution Income
    251 Mn Revenue38% Y-o-Y Growth
    Interest on MTF
    438 Mn Revenue46% Y-o-Y Growth
    Non-Broking Business (Distribution + MTF Interest)
    28.0% Revenue Contribution
    List

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Debt

    Debt disclosed

    Liquidity

    Liquidity disclosed

    Bank balance is primarily held in FDs for regulatory margin purposes, including own and client money, and is not available for discretionary allocation.

    Guidance & targets

    3
    CategoryTargetPriority
    Volume
    MTF Book Size
    ₹1,500 crores
    		High
    Volume
    Assets Under Management (AUM)
    ₹9,500-10,000 crores
    		Medium
    Revenue
    Revenue Mix (Broking vs Non-broking)
    50%-50%
    		High

    LI/GI Commission Revenue Contribution

    Q4 FY26
    CurrentMiniscule part
    TargetGood amount of revenue

    Why it matters

    New revenue stream, important for diversification and overall growth, indicating successful integration of the corporate agency license.

    LI, GI commission we have started generating, but that consists of a very miniscule part because as you know🎣, last quarter only we procured the license and started the activity... from this month or this quarter, we are expecting good amount of revenue from there also.

    How to verify

    key_financials.segment_breakdown[name='Distribution income'].metrics[label='Revenue']

    Risks & concerns

    2
    RiskSeverity

    Market volatility and subdued market conditions

    Indian capital markets experienced 'lackluster gains' and 'sustained selling by foreign investors' in FY26, impacting overall revenue and distribution segment performance. Management aims to mitigate this through revenue diversification. — Both acknowledged

    medium

    Competition and margin pressure in broking

    Analyst raised concerns about rising competition and margin pressure in the broking segment. Management's strategy involves optimizing cost structures through automation and technology, and improving productivity. — Analyst acknowledged

    medium

    Q&A highlights

    7

    “our model is a kind of a phygital model. And on a phygital model, what we are trying to do is more of a relationship management business... We are incorporating AI tools also in those platforms over a period of time.”

    Details the company's strategy for leveraging technology and AI to enhance client engagement and service delivery in a rapidly evolving market, focusing on a hybrid 'phygital' model.

    asked by Sucrit Patil

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 FY26 Financial Performance Overview

    Anand Rathi reported a strong Q3 FY26, with total consolidated revenue from operations growing 21% year-on-year to ₹2,482 million. EBITDA increased by 32% year-on-year to ₹1,012 million, achieving a healthy 41% margin. Profit After Tax (PAT) saw a significant 72% year-on-year growth, reaching ₹370 million with a 15% PAT margin, demonstrating robust profitability despite challenging market conditions.

    02

    Robust Growth in Assets and MTF Book

    The company continued to show strong growth in key asset metrics. Total assets under custody (AUC) expanded by 48% year-on-year, reaching ₹1,058 billion. The Margin Trading Facility (MTF) book also demonstrated significant growth, surging 46% year-on-year and 13.6% quarter-on-quarter to ₹12,317 million as of December 31, 2025. Notably, the MTF book maintained a clean record with zero NPAs.

    03

    Strategic Revenue Diversification and Client Engagement

    Anand Rathi's diversified revenue model saw broking and related services contributing 52% (₹1,287 million) of Q3 FY26 revenue, while non-broking businesses (distribution and MTF interest) accounted for 28%. Distribution income grew 38% year-on-year to ₹251 million, and interest on MTF surged 46% year-on-year to ₹438 million. The active client base stood at 158,601 in Q3 FY26, with 55% engaged for over three years, and 71% of active clients originating from Tier-2 and Tier-3 cities, highlighting strong client relationships and broad geographical reach.

    04

    Strengthening Capital Structure and Efficiency

    The company significantly improved its capital structure, with the debt-equity ratio moving to 0.59 as of December 31, 2025, a substantial reduction from 2.36 as of December 31, 2024. This improvement was attributed to the utilization of IPO proceeds to reduce the loan book, which also led to a simultaneous reduction in finance costs. Management emphasized continuous investment in technology, allocating about 1.5-2% of investments towards tech upgrades to enhance efficiency and reduce costs.

    05

    Outlook on Distribution and New Revenue Streams

    While the distribution segment experienced a sequential decline in Q3, management expects a rebound, with the impact of current Assets Under Management (AUM) growth (₹83,688 million, up 32% Y-o-Y) anticipated to reflect in revenue over the next 2-3 quarters. The newly acquired corporate agency license for Life Insurance and General Insurance (LI/GI) is expected to contribute a 'good amount of revenue' starting from Q4 FY26, further diversifying revenue streams.

    06

    Long-term Strategic Goals and Market Volatility Mitigation

    Anand Rathi has set clear long-term targets, aiming for an MTF book size of ₹1,500 crores by the end of FY26 and Assets Under Management (AUM) between ₹9,500-10,000 crores. A key strategic objective is to achieve a 50%-50% revenue mix between broking and non-broking businesses by March 2027. This diversification strategy is intended to stabilize earnings and reduce the company's vulnerability to market volatility🌐, which was noted as a challenge in FY26.

    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.