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Rikhav Securities Limited — Q4 FY26 earnings call

Call held 29 May 2026

Company page: Rikhav Securities share price, financials & guidance record

Management summary

Rikhav Securities reported a mixed FY26, with strong overall income but profitability impacted by losses from old cash market investments and volatile market conditions. The company made significant investments in technology and is expanding its institutional client base. Management expressed optimism for FY27, projecting substantial growth in brokerage and algo trading, while acknowledging challenges in SME liquidity and the short-term impact of new SEBI regulations.

Highlights

FY26 total income of INR1,991 crores and PAT of INR18.96 crores, with EPS of 4.95.
H2 FY26 total income of INR1,604 crores and PAT of INR1.20 crores, with EPS of 0.31.
Strategic investment of INR5.40 crores in computer software and technology enhancement, improving operational scalability and efficiency.
Successful onboarding of institutional clients including Kotak Mutual Fund, Bank of India, RBL Bank, and 8-10 FPIs.
Strong growth outlook with 20% expected growth in brokerage and cliental, and 20-25% in algo trading and delta hedging income for FY27.

Concerns

Profitability impacted by a loss of INR18-23 crores from cash market shares of old investment in FY26.
SME inventory became difficult to liquidate due to weak post-listing liquidity, leading to reduced exposure.
Short-term volume impact on derivatives due to recent SEBI regulations.
Branch expansion is considered a 'very risky business' due to compliance challenges, leading to a cautious approach of 8-10 franchisee branches per year.

Key financials

2 periods

H2 FY26

Total Income
₹1,604 Cr
EBITDA
₹6.57 Cr
PAT
₹1.2 Cr
EPS
₹0.31

FY26

Total Income
₹1,991 Cr
EBITDA
₹32.53 Cr
PAT
₹18.96 Cr
EPS
₹4.95

What they filed

₹ Cr · quarterly

Line item	Q2 FY25	Q4 FY25	Q2 FY26	Q4 FY26
Revenue	93	225	380	1,596
Expenses	31	262	361	1,598
EBITDA	62	-37	19	-2
Margin	66%	-16%	5%	0%
Other income	3	7	7	9
Interest	3	3	2	4
Depreciation	0	0	0	1
Profit before tax	62	-34	24	2
Tax rate	18%	-21%	25%	48%
Net profit	51	-27	18	1
EPS	16.91	-7.05	4.64	0.31

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.

Capital allocation

high confidence

Capex ₹5.4 Cr
- Computer software system and technology enhancement initiative ₹5.4 Cr
During FY26, we continue to strengthen our technology and operational infrastructure through investment of approximately INR5.40 crores towards computer software system and technology enhancement initiative.

Guidance & targets

Profitability

Unrealized SLBM profit realization Profitability · coming quarters · High confidence INR4.33 crores

Additionally, unrealized profit of INR4.33 crores from SLBM transactions has not been recognized in financial statements and is expected to realize in the coming quarters.

— Hitesh Lakhani

Growth

Brokerage and cliental growth Growth · FY27 · High confidence 20%

We expect around 20% growth in brokerage and the cliental and around 20% to 25% growth in the algo trading and delta hedging income.

— Hitesh Lakhani
Algo trading and delta hedging income growth Growth · FY27 · High confidence 20% to 25%

— Hitesh Lakhani

Revenue

Full year revenue Revenue · March 2027 · Low confidence INR40 crores

March 27, it is a full year around INR40 crores.

— Hitesh Lakhani

Branch Expansion

New franchisee branches Branch Expansion · every year minimum · Medium confidence 8 to 10

That branch expansion we expect not much, but every year about 8 to 10 branch, branch or franchises say. It is not exactly branch, it's a franchisee. 10 to 12 branch every year minimum we want to start because in a branch expansion, there is a very risky proposal because nowadays there is a compliance is a much more harder in a branch environment.

— Hitesh Lakhani

What to watch in Q1 FY27

Realization of unrealized SLBM profit

coming quarters

Current INR4.33 crores unrealized

Target Realization in coming quarters

Why it matters

This unrealized profit is expected to boost future profitability and was a factor in current period's reported PAT.

Additionally, unrealized profit of INR4.33 crores from SLBM transactions has not been recognized in financial statements and is expected to realize in the coming quarters.

Risks & concerns

Loss from old cash market investments
high

Profitability impacted by a loss of INR18-23 crores from cash market shares of old investment in FY26.

Management acknowledged
Volatile market conditions
medium

Volatile market conditions witnessed during certain periods of the year impacted profitability.

Management acknowledged
SME inventory liquidation difficulty and weak post-listing liquidity
medium

SME inventory became difficult to liquidate, leading to a reduction in exposure to INR20-25 crores and a change in trading strategy.

Management acknowledged
Impact of SEBI regulations on derivatives volumes
medium

Recent SEBI circulars are expected to have a short-term impact on derivatives trading volumes.

Management acknowledged
High risk and compliance challenges in branch expansion
medium

Branch expansion is considered a 'very risky proposal' due to increased compliance requirements, leading to a slow and cautious approach.

Management acknowledged
Risks in AI agent adoption ('hallucinating')
low

Cautious approach to AI-led analytics due to concerns about AI agent 'hallucinating' and data integrity, requiring human intervention.

Management acknowledged

Q&A highlights

6 direct, 1 evasive

Profitability decline and pressure on PAT/margins Direct

There are basically what the investment made in cash market one and half year before from that shares we booked the loss to the around of INR18 crores to INR20 crores. And there is a unrealized profit of around INR4 crores to INR4.5 crores on the SLBM segment which will realize in April. Mainly two reasons is there and small is the depreciation is around more INR30 lakhs more.

Clarifies the primary reasons for the decline in profitability, attributing it to investment losses and unrealized gains, providing context for the financial performance.

Asked by Avik Bhattacharya

SME inventory liquidation difficulty and exposure reduction Direct

So that's why we have reduced the exposure in SME segment. We have reduced very considerably. We reduced the exposure. We are just... Compared to last year, it is 30% only. It is around INR20 crores to INR25 crores.

Highlights a key risk area (SME market liquidity) and management's proactive steps to mitigate it by significantly reducing exposure and changing trading strategy.

Asked by Avik Bhattacharya

Cybersecurity framework and measures Direct

So our infrastructure is divided into two networks in itself. The whole arbitrage desk works as an internal official network which is not exposed to any network outside my office premises. So anyone needs to access it has to come in physically and have his credentials through. The trading platform that is exposed to our clients out, which is back office and front office, that is accessed through an open network out, but those end points we cover through a basic audit that happens monthly towards our system where we take all the necessary end-of-life descriptions and everything out for each OS that we manage.

Provides detailed insight into the company's robust cybersecurity architecture, including network segmentation, regular audits, fail-safes, and backup systems, which is critical for a financial services firm.

Asked by Raj Shah

Current active client base and ARPU Direct

So current active base is -- currently active base is around 12,500 clients, plus 2,500 clients is added in this half year. Around, I think so INR5,000 to INR6,000. But in the same thing, actually, if you know, 50% revenue is from this INR5,000 to INR6,000 is the amount of brokerage we have earned, but the float income also it is more than the brokerage.

Offers specific metrics on client acquisition, active client numbers, and average revenue per user (ARPU), breaking down the ARPU sources between brokerage and float income, which is key for understanding revenue drivers.

Asked by Raj Shah

Roadmap for AI-led analytics, fraud detection, and advisory capabilities Partial

So given the AI based automation and this thing, we are, have started it, but we have started it in a regulated way just because of the main issue of the AI agent kind of hallucinating all over the place for the same audit. So we have started it, but not engaged it thoroughly just because we need a vetting of human intervention to have a proper response through it.

Reveals the company's cautious but ongoing approach to AI adoption, highlighting regulatory concerns and the need for human oversight to ensure data integrity and service credibility.

Asked by Vidhi Purohit

Impact of recent SEBI regulations on derivatives volumes, profitability, and client activity Direct

From the recent circular, we think there is a short-term impact on our volume, but we think it is good for the overall market condition in long term because the retail traders who lost their money in short term trading, they save the money and they invest. So the fundamental base of the investor will improve. Short term definitely it was affected in a volume of the business.

Addresses the impact of regulatory changes, acknowledging a short-term negative effect on volumes but framing it as a long-term positive for market health and investor behavior.

Asked by Vidhi Purohit

Increased expenses, specifically 'purchase of stock-in-trade' and accounting changes Evasive

We have changed the accounting system since October 2024. Up to October 2024, we have shown as an investment. So, it was not included in the purchase for the financial year '24-'25 for the half year and next half year we have shown this turnover as a turnover as a purchases. So that figure is not comparable. You send me this query specifically via email, I will reply to you in writing.

Management's response indicates a significant accounting change that makes current figures non-comparable to previous periods, and a reluctance to provide immediate clarification, raising questions about financial transparency and comparability.

Asked by Aniket Madhwani

Branch expansion strategy and associated risks Direct

That branch expansion we expect not much, but every year about 8 to 10 branch, branch or franchises say. It is not exactly branch, it's a franchisee. 10 to 12 branch every year minimum we want to start because in a branch expansion, there is a very risky proposal because nowadays there is a compliance is a much more harder in a branch environment.

Outlines the company's conservative approach to physical expansion, citing high risks and compliance challenges in the current environment, which impacts growth strategy.

Asked by Priya Jain

2 min read 6 chapters

Detailed narrative

FY26 Financial Performance Overview

For the full fiscal year 2026, Rikhav Securities reported a total income of INR1,991 crores, with an EBITDA of INR32.53 crores and a Profit After Tax (PAT) of INR18.96 crores, resulting in an Earnings Per Share (EPS) of 4.95. The second half of FY26 saw a total income of INR1,604 crores, EBITDA of INR6.57 crores, and PAT of INR1.20 crores, with an EPS of 0.31. Profitability was notably impacted by a loss of INR18-23 crores from cash market shares of old investments and volatile market conditions.

Strategic Investments in Technology and Infrastructure

The company invested approximately INR5.40 crores in computer software systems and technology enhancement initiatives during FY26. This investment, while contributing to higher depreciation expenses, significantly strengthened operational scalability, backend efficiency, and overall technology capabilities for long-term growth. The robust technology infrastructure includes a low-latency, high-efficiency trading ecosystem with strong direct architecture and automated monitoring.

Business Diversification and Market Making Capabilities

Rikhav Securities has diversified its platform across equity broking, derivatives trading, commodities broking, market making, and proprietary trading. The company continues to support liquidity creation in the SME capital market ecosystem and has started market making in ETFs with Kotak Mutual Fund, with plans to expand to two or three more mutual funds. Proprietary trading, driven by algorithm-based arbitrage and delta hedging, also contributes significantly to revenue.

Client Acquisition and Institutional Engagement

The company's active client base stands at around 12,500, with an additional 2,500 clients added in the last half-year. Quarterly active clients range from 10,000 to 12,000, and daily active traders are between 2,000 and 2,500. Rikhav Securities has successfully onboarded institutional clients such as Kotak Mutual Fund, Bank of India, RBL Bank, and 8-10 FPIs, with plans to empanel with SBI and LIC, indicating a focus on expanding its institutional presence.

Digital Strategy and Client Acquisition

The company utilizes a digital-first onboarding infrastructure, including Aadhaar-based e-KYC, with an account opening cost of INR60-70 per account and an overall cost of INR500. While digital marketing has not yet commenced, the company plans to launch it after the current quarter, acknowledging its importance for attracting newer generations like Gen Z. Currently, client acquisition relies heavily on existing networks and relationship-based approaches.

Outlook and Growth Drivers for FY27

For FY27, Rikhav Securities anticipates approximately 20% growth in both brokerage and cliental, and a 20-25% growth in algo trading and delta hedging income. The company aims to open 8-10 franchisee branches annually, albeit cautiously due to high compliance requirements and associated risks. Management remains positive on the long-term outlook for India's capital market ecosystem, driven by increasing retail participation and financial savings.

This is an AI-generated summary of a publicly available earnings call transcript.

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