Anand Rathi Share and Stock Brokers Limited — Q3 FY26 earnings call

Call held 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

  • 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

  • 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

  1. Revenue from Operations 2,482 Mn +21%YoY
  2. EBITDA 1,012 Mn +32%YoY
  3. EBITDA Margin 41%
  4. PAT 370 Mn +72%YoY
  5. PAT Margin 15%
  6. Assets Under Custody (AUC) 1,058 Bn +48%YoY
  7. MTF Book 12,317 Mn +46%YoY
  8. Assets Under Management (AUM) 83,688 Mn +32%YoY
  9. Debt-Equity Ratio 0.59

What they filed

Q1 FY27: revenue up 22.4%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue231 204 200 201 227 −2%248 +22%256 +28%246 +22%
EBITDA86 77 73 75 93 +8%101 +31%110 +51%97 +29%
Net profit33 22 18 23 28 −15%37 +68%42 +133%23 +0%
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.

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% Revenue Contribution

Capital allocation

high confidence
  • Debt Debt disclosed
    • Repayment Loan book reduced due to IPO proceeds, leading to lower finance costs.
    our debt equity ratio, which was earlier there 2.3 plus kind of level that has reduced now to 0.58.
  • 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.
    That bank balance is mainly into FDs which are given to exchange for the margin purpose. It includes our own money as well as the client money, both things on the combined basis, which is compulsory to be kept. So out of this particular thing, nothing can be allocated to anything else.

Guidance & targets

Volume

  • MTF Book Size Volume · end of this financial year (FY26) · High confidence ₹1,500 crores
    We are on track to achieve book size of about 15,000 million by the end of this financial year.

    — Pradeep Gupta

  • Assets Under Management (AUM) Volume · Medium confidence ₹9,500-10,000 crores
    our AUM on a distribution book, which we are trying to acquire or to reach somewhere around 9,500 crores to ₹10,000 crores.

    — Pradeep Gupta

Revenue

  • Revenue Mix (Broking vs Non-broking) Revenue · March 2027 · High confidence 50%-50%
    our endeavor is that first we are going to bring our revenue mix to a 50%-50% level, along with the desired growth path which we are trying to set for ourselves in both the businesses, both the revenue streams, which is broking as well as non-broking... by end of March '27, we will see that we will be able to reach to that level, point number one.

    — Pradeep Gupta

What to watch in Q4 FY26

LI/GI Commission Revenue Contribution

Q4 FY26
Current Miniscule part
Target Good 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.

Risks & concerns

  • Market volatility and subdued market conditions

    medium

    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.

    The Indian capital markets had a rough ride in financial year 26 with the Sensex and Nifty delivering lackluster gains underperforming other significant global peers. There was pressure from sustained selling by foreign investors, citing concerns over weak earnings, stretched valuations, and currency volatility which resulted in benchmark indexes remaining subdued despite brief mid-year rallies. Despite this backdrop, our business continued to grow.

    Both acknowledged

  • Competition and margin pressure in broking

    medium

    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.

    My second question is with regards to margins. With rising competition and margin pressure in broking, what forward-looking steps are you taking to optimize cost structures while still investing in technology and client acquisition?

    Analyst acknowledged

Q&A highlights

6 direct
AI-driven advisory and wealth-tech platforms strategy Direct
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

Optimizing cost structures and margin expansion through technology Direct
Al as well as technological advancement is going to help to reduce our cost further and on which again, as I said, we are constantly looking at it. Many of our processes have been automized so that we are trying to reduce the cost and putting those man hours towards generating revenue or probably skillful work.

Explains how the company plans to maintain and expand margins amidst competition and regulatory pressure by automating processes and improving efficiency through technology and AI.

Asked by Sucrit Patil

Enhancing client self-execution process and product offerings Direct
apart from providing an execution platform, most of our individual or daily kind of research is also available to customers. So a customer who is completely used to the technological world, on app, more specifically mobile app... can do all, flawlessly work on the app, he can definitely go through, research the call, look at our calls.

Highlights the digital capabilities offered to clients for self-service and investment decision-making, expanding beyond traditional broking to various products.

Asked by Sucrit Patil

Distribution segment performance and new LI/GI commission Partial
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.

Addresses the sequential decline in distribution income and provides an outlook on new revenue streams (Life Insurance/General Insurance) and the expected impact of AUM growth on future revenue.

Asked by Aman Dugar

Maintaining margins and broking segment mix given industry headwinds Direct
our endeavor is that first we are going to bring our revenue mix to a 50%-50% level, along with the desired growth path which we are trying to set for ourselves in both the businesses, both the revenue streams, which is broking as well as non-broking... by end of March '27, we will see that we will be able to reach to that level.

Clarifies the company's strategic goal to diversify revenue away from heavy reliance on broking to mitigate market volatility risks and achieve revenue stability.

Asked by Arka Bhattacharjee

Capital allocation for bank balances (FDs) Direct
That bank balance is mainly into FDs which are given to exchange for the margin purpose. It includes our own money as well as the client money, both things on the combined basis, which is compulsory to be kept. So out of this particular thing, nothing can be allocated to anything else.

Explains that a significant portion of the bank balance is regulatory capital for margin purposes, not available for discretionary capital allocation, clarifying liquidity management.

Asked by Arup Dey

Decline in finance cost Direct
we went for IPO and we have generated the money entirely coming into the company side. So naturally, immediately after receipt of that particular money, we will be able to reduce some of our loan... our debt equity ratio, which was earlier there 2.3 plus kind of level that has reduced now to 0.58.

Provides a clear reason for the sequential decline in finance costs, directly linking it to the utilization of IPO proceeds to reduce the loan book and improve the capital structure.

Asked by Aman Dugar

2 min read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

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