Anand Rathi Share and Stock Brokers Limited — Q4 FY26 earnings call

Call held 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

  • 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

  • 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.

Key financials

3 periods

Headline

  • 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
  • Total Client Base Growth
    12.7%

Q4 FY26

  • 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%
  • Distribution Income
    353 Mn
    YoY +34.3%
  • Interest Income from MTF
    432 Mn
    YoY +50.2%
  • Broking Revenue
    1,201 Mn
    YoY +14.5%

FY26

  • 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%
  • Distribution Income
    1,129 Mn
    YoY +44.1%
  • Interest Income from MTF
    1,515 Mn
    YoY +32.6%
  • Broking Revenue
    4,755 Mn
    YoY -6.8%

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

  • 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

Capital allocation

high confidence
  • Debt Debt disclosed
    Our debt equity ratio stood at 0.62 as of March 31st, 26, compared to 1.8 as of March 31st, 25. This reflects a meaningful improvement in our capital structure and provide us with enhanced financial flexibility to support growth, particularly in scalable business
  • Dividend ₹5/share (interim)
    I am pleased to inform that we propose a dividend of INR5 per share, subject to approval from shareholders.
  • 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.
    Over a period of time, we will be again active to get those funding and financing from various different routes and again the extra or spare funding available for the company will start expanding our MTF book.

Guidance & targets

Revenue Mix

  • Broking vs Non-Broking Revenue Split Revenue Mix · long term · High confidence 50-50
    Our strategic direction remains clear and unchanged. As guided earlier, we are fully focused on maintaining a balanced revenue mix with a targeted revenue split of 50-50 between non-broking and broking segments and growing both the segments at a steady growth rate.

    — Pradeep Gupta

Non-Broking Growth

  • Non-Broking Revenue Growth Non-Broking Growth · first few years · Medium confidence 40-45%
    Right now, for first few years, I personally believe that our non-broking should be able to grow somewhere around 40% to 45% growth, which we have shown right now this year also.

    — Pradeep Gupta

Broking Growth

  • Broking Revenue Growth Broking Growth · first few years · Medium confidence 15%
    And in broking side, since it is a market-denominated factor, but still we will be able to grow somewhere around 15% or so in a broking revenue.

    — Pradeep Gupta

Overall Revenue Growth

  • Overall Revenue Growth Overall Revenue Growth · year-on-year basis · Medium confidence 15-20%
    Based on that particular growth factor, I personally feel that overall revenue number what we are trying and aiming to achieve is somewhere around 15% to 20% growth year-on-year basis.

    — Pradeep Gupta

MTF Book Size

  • MTF Book Size MTF Book Size · FY26 · Low confidence ₹15,000 million
    As shared in earlier calls, we have guided towards achieving an MTF book size of 15,000 million by financial year '26. Participant may recall that we had reached an MTF book of 12,317 million as of December '25. However, we saw a downfall in MTF book by 10.53% in quarter ended March '26.

    — Roop Bhootra

Debt-Equity Ratio

  • Debt-Equity Ratio Debt-Equity Ratio · long term · High confidence 1.5
    And our endeavour is there that we want to restrict ourselves up to max 1.5 kind of debt equity ratio.

    — Roop Bhootra

What to watch in Q1 FY27

MTF Book Growth

next quarter
Current ₹11,019 million (down 10.53% QoQ)
Target Resumption 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

  • RBI Policy Changes Impacting MTF Funding

    medium

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

    Management acknowledged

  • Bearish Market Sentiment and Nifty Decline

    medium

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

    Management acknowledged

  • Geopolitical Tensions and Global Economic Headwinds

    medium

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

    Management acknowledged

  • Regulatory Measures by SEBI

    low

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

    Management acknowledged

  • Competitive Pressures on MTF Yields

    low

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

    Analyst acknowledged

Q&A highlights

6 direct
Broking and Wealth Management Business Growth Strategy Direct
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

Risk Management in Broking and Advisory Business Direct
At our end, we have restricted this particular basket with our internal committee towards the selection of the stocks to less than 1,000 stocks in total. And many of the stocks where we have increased the margins as compared to whatever exchange is charging in form of the MTF book, we are conservative and we have increased the margin level from our side.

Analyst inquired about the company's strategy to manage risks like market volatility, compliance changes, and credit risk while maintaining profitability.

Asked by Sucrit D Patil

Sustainability of MTF Yields Amidst Competition Partial
As of now, at Anand Rathi, we are not facing much of a pressure on that count because there is already a good pent-up demand available with us and we will keep on addressing. ... In terms of yields, I think there might be a possibility, but as of now, we are trying to maintain those yields which we have been able to generate so far.

Analyst questioned the sustainability of MTF yields given increasing competition, prompting management to acknowledge potential future pressure but affirm current stability.

Asked by Diwakar Pingle

Broking Revenue Growth and Market Beta Direct
So in your growth strategy, I just wanted to understand, do you expect this to play out as a function of market beta that as we move towards a more normalized situation from where we are in the geopolitical scenario? Or I mean how would you be thinking in terms of active clients, etcetera, and what are you doing to maybe build upon that part of the business, that the active clients vis-a-vis the number of trades that they are putting in or the value that they are putting in?

Analyst sought clarification on the drivers of the 15% broking revenue growth target, specifically asking about market conditions and active client engagement.

Asked by Swarnabh Mukherjee

Broking Business Mix (Cash vs. Derivatives) and STT Impact Direct
Why I am saying that, if you really look at our share revenue mix, which is your second question also, between cash and derivatives, it is split into 50-50. So we are largely denominated looking at cash market segment broking business.

Analyst asked for a breakdown of broking revenue between cash and derivatives and the impact of STT increases, which management clarified as a 50-50 split with a focus on cash.

Asked by Swarnabh Mukherjee

Impact of RBI Regulation Change on Prop Book Direct
Now coming back to your RBI book on a prop side, just to clarify you, in this company, we do not deal with proprietary book. We do not have a single pie on a proprietary activity in this book. So that rules and regulations are not at all impacting us in this company.

Analyst inquired about the impact of RBI regulation changes on the company's proprietary book, to which management clarified they do not engage in proprietary trading.

Asked by Swarnabh Mukherjee

Attribution of AUM/AUC Growth Direct
So these AUMs which we are talking about, that AUM or AUC, that increase is there from -- I can say more from our existing client base. At the same time, we are continuously adding new client base also. Total number, I can say total number of client side if I will say, then we have increased last financial year our total client base by 12.7% in total number.

Analyst sought to understand whether the growth in AUM/AUC was driven by new client acquisition or increased engagement from existing clients.

Asked by Swarnabh Mukherjee

2 min read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.
View original transcript

More Financial Services earnings calls