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    Anand Rathi Share and Stock Brokers Limited

    ARSSBL
    Financial Services·15 Apr 2026
    Management Summary

    Anand Rathi reported strong Q4 FY26 results with significant PAT growth of 125.7% and robust full-year distribution income growth of 44.1%. The company's MTF book expanded 61% YoY while maintaining zero NPA, and its debt-equity ratio improved substantially. However, the MTF book experienced a sequential decline in Q4 due to regulatory changes and market sentiment, and full-year broking revenue saw a slight dip.

    Highlights

    5

    • Q4 FY26 consolidated revenue from operations grew 28.1% YoY to ₹2,557 million.

    • Q4 FY26 PAT surged 125.7% YoY to ₹416 million.

    • Full year FY26 distribution income showed strong growth of 44.1% YoY, reaching ₹1,129 million.

    • MTF book grew 61% YoY to ₹11,019 million as of March 31, 2026, with zero NPA maintained.

    • Debt-equity ratio improved significantly to 0.62 from 1.8, enhancing financial flexibility.

    Concerns

    2

    • MTF book saw a downfall of 10.53% in Q4 FY26, missing the FY26 target of ₹15,000 million, primarily due to RBI policy changes and bearish market sentiment.

    • Full year FY26 broking revenue dipped slightly by 6.8% compared to the previous year, standing at ₹4,755 million.

    What Changed2

    vs Q1 FY27

    Guidance items5 → 6 (+1)Risks discussed6 → 5 (-1)
    Key financials

    Metrics

    21

    Periods

    3

    Headline

    5
    • Assets Under Custody (AUC)
      9,44,155 Mn
      YoY+16%
    • Margin Trading Facility (MTF) Book
      11,019 Mn
      YoY+61%
    • Assets Under Management (AUM)
      77,876 Mn
      YoY+21%
    • Debt-Equity Ratio
      0.62 ratio
    • Total Client Base Growth
      12.7%

    Q4 FY26

    8
    • Revenue from Operations
      2,557 Mn
      YoY+28.1%
    • EBITDA
      1,103 Mn
      YoY+51.4%
    • PAT
      416 Mn
      YoY+125.7%
    • EBITDA Margin
      43.2%
    • PAT Margin
      16.2%

    FY26

    8
    • Revenue from Operations
      9,322 Mn
      YoY+10.2%
    • EBITDA
      3,796 Mn
      YoY+21.9%
    • PAT
      1,293 Mn
      YoY+24.8%
    • EBITDA Margin
      40.7%
    • PAT Margin
      13.8%

    Segment breakdown

    Q4 FY26 Revenue Mix
    47% Broking Segment53% Non-Broking Segment
    FY26 Revenue Mix
    51% Broking Segment49% Non-Broking Segment
    FY26 Broking Mix
    51% Equity Cash41% F&O8% Other
    Q4 FY26 Broking Mix
    49% Equity Cash41% F&O10% Other
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Debt

    Debt disclosed

    Dividend

    ₹5/share (interim)

    Liquidity

    Liquidity disclosed

    We were preserving cash in last quarter because of various RBI guidelines, though it is being postponed to another quarter, but the requirement of margin was greater and we were preserving cash for addressing those kind of a requirement, which were earlier being met by various different bank financing or NBFC financing.

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue Mix
    Broking vs Non-Broking Revenue Split
    50-50
    		High
    Non-Broking Growth
    Non-Broking Revenue Growth
    40-45%
    		Medium
    Broking Growth
    Broking Revenue Growth
    15%
    		Medium
    Overall Revenue Growth
    Overall Revenue Growth
    15-20%
    		Medium
    MTF Book Size
    MTF Book Size
    ₹15,000 million
    		Low
    Debt-Equity Ratio
    Debt-Equity Ratio
    1.5
    		High

    What to watch in Q1 FY27

    5

    MTF Book Growth

    next quarter
    Current₹11,019 million (down 10.53% QoQ)
    TargetResumption of growth towards previous targets

    Why it matters

    MTF book growth was impacted by regulatory changes and market sentiment; its recovery is key for interest income.

    However, we saw a downfall in MTF book by 10.53% in quarter ended March '26. The main reasons behind this are as follows - Changes in RBI policy for capital market intermediaries. The change in policy reduced the avenues available from the banks to meet the working capital requirement of the company. As a result, we had to control our growth in MTF book.

    Risks & concerns

    5
    RiskSeverity

    RBI Policy Changes Impacting MTF Funding

    Changes in RBI policy reduced avenues from banks for meeting working capital requirements, impacting MTF book growth. — Management acknowledged

    medium

    Bearish Market Sentiment and Nifty Decline

    Nifty fell by almost 15% in Q4 FY26, leading to adverse investor sentiment and caution, impacting MTF book. — Management acknowledged

    medium

    Geopolitical Tensions and Global Economic Headwinds

    FY26 was a challenging year for global economies and financial markets due to ongoing geopolitical tensions and shifting trade dynamics. — Management acknowledged

    medium

    Regulatory Measures by SEBI

    SEBI's proactive measures to strengthen risk management and investor protection caused short-term adjustments for some participants. — Management acknowledged

    low

    Competitive Pressures on MTF Yields

    Analyst raised concerns about potential competitive pressures on MTF yields, though management stated they are not currently facing significant pressure. — Analyst acknowledged

    low

    Q&A highlights

    7

    “By way of providing them various different investment products suitable to that particular investor. And what we are trying to do, we have created a basket of products suitable to specific customer segments. As we are catering to almost all categories of customers, we have created a basket and providing them along with the broking platform which is being provided to those who are interested in probably broking directly by themselves on investment side or probably trading on investment-based trading, not future and options largely.”

    Analyst sought clarity on how the company plans to grow its broking and wealth management business, acquire new clients, and leverage digital platforms.

    asked by Sucrit D Patil

    2 min read6 chapters

    Detailed Narrative

    01

    FY26 Performance Overview and Key Financials

    Anand Rathi reported a strong Q4 FY26 with consolidated revenue from operations at ₹2,557 million, marking a 28.1% YoY growth. PAT for the quarter surged by 125.7% YoY to ₹416 million, with an EBITDA margin of 43.2%. For the full year FY26, consolidated revenue stood at ₹9,322 million (up 10.2% YoY), EBITDA at ₹3,796 million (up 21.9% YoY), and PAT at ₹1,293 million (up 24.8% YoY). The full-year EBITDA and PAT margins were 40.7% and 13.8% respectively.

    02

    Strategic Focus on Diversified Revenue and Digital Transformation

    The company continues its strategic focus on a balanced revenue mix, targeting a 50-50 split between broking and non-broking segments. Non-broking businesses, including Margin Trading Facility (MTF) and distribution income, are steadily increasing their contribution. Management emphasized a 'phygital' operating model, combining relationship-led service with robust digital capabilities, with approximately 60% of broking customers already using their digital platform. Investments in technology platforms and process automation are ongoing to enhance customer engagement and team productivity.

    03

    MTF Business and Asset Quality

    The MTF book grew by 61% YoY to ₹11,019 million as of March 31, 2026. Despite a previous target of ₹15,000 million for FY26, the MTF book saw a 10.53% sequential decline in Q4 FY26. This was attributed to RBI policy changes affecting working capital avenues from banks and bearish market sentiment. However, the company maintained a zero NPA on its MTF book, reflecting judicious underwriting practices. Interest income from the MTF book for FY26 was ₹1,515 million, a 32.6% YoY growth.

    04

    Distribution Business Expansion and Client Engagement

    Distribution income for FY26 amounted to ₹1,129 million, demonstrating a strong 44.1% YoY growth, driven by an expanded product basket and improved cross-selling. The company has broadened its offerings to include mutual funds, PMS, AIF, structured products, bonds, and insurance. Client loyalty remains a key strength, with approximately 42% of active clients associated for over five years, and 83% of active clients being over 30 years of age, a demographic considered attractive for higher investable surplus.

    05

    Capital Structure Improvement and Shareholder Returns

    The company significantly improved its debt-equity ratio to 0.62 as of March 31, 2026, down from 1.8 a year prior, providing enhanced financial flexibility. Management aims to restrict this ratio to a maximum of 1.5. The company also proposed a dividend of INR 5 per share, subject to shareholder approval, reflecting confidence in its financial performance and commitment to shareholder returns.

    06

    Regulatory Environment and Market Outlook

    FY26 was characterized as a challenging year due to global economic headwinds and geopolitical tensions, leading to sustained FII outflows and heightened market volatility🌐. Despite this, the long-term structural drivers of the Indian market remain intact, evidenced by the steady rise in demat accounts to 22.2 crores by February 2026. SEBI's regulatory measures, while causing short-term adjustments, are seen as foundational for a more transparent and resilient capital market ecosystem.

    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.