Detailed Narrative
Industry Dynamics and Operating Environment
The capital markets remained constructive with healthy participation, resilient trading activity, and increasing digital adoption, contributing to a stronger broking ecosystem. The insurance sector showed steady momentum driven by penetration and demand across products, transitioning towards advisory-led digital distribution. However, the financing and NBFC segment faced challenges with moderated credit growth, tighter underwriting, and focus on risk management, leading to uneven outcomes across participants.
Q3 FY26 Consolidated Financial Performance
SMC Global Securities reported a consolidated operational income of ₹494.8 crores in Q3 FY26, showing sequential improvement. EBITDA for the quarter stood at ₹102.1 crores, translating to an EBITDA margin of 20.6%, which improved by 140 basis points quarter-on-quarter. Profit after tax reached ₹30.8 crores, marking a significant 46.8% quarter-on-quarter increase, with a PAT margin of 6.2%. For the nine months ended FY26, consolidated revenue was ₹1,360.0 crores, EBITDA ₹286.7 crores, and PAT ₹81.8 crores.
Broking, Distribution, and Trading Segment Performance
This segment's Q3 FY26 revenue grew by 17.3% year-on-year to ₹286.6 crores, with EBIT increasing by 13.9% year-on-year to ₹66.4 crores. The company's network comprised 2,154 authorized persons across 413 cities and 6,485 financial distributors. Broking DP AUA reached ₹1,64,217 crores, and mutual fund AUM stood at ₹4,768 crores as of 9M FY26. Management expects overall broking growth in the range of 10% to 14% and noted that 70% of business comes from online channels, with a focus on integrating algo trading.
Financing NBFC Segment Strategy and AUM
The financing NBFC segment reported Q3 FY26 revenue of ₹48.4 crores, down from ₹71.2 crores in Q3 FY25. The 9M FY26 AUM was ₹1,107 crores, with a secured portfolio ratio of 69.42% and collection efficiency of 97.96%. The company's ROA was 2.42% and NNPA level 1.99%. The decline in AUM from ₹1,291 crores in FY25 was attributed to a conscious decision to churn the portfolio, shifting from LAP to Micro LAP. The Micro LAP portfolio is currently ₹80 crores and is targeted to grow to ₹125 crores by March end FY26.
Insurance Broking Segment Growth
The Insurance Broking segment demonstrated strong growth momentum, with Q3 FY26 revenue increasing by 22.2% year-on-year to ₹81.1 crores. Segment EBIT rose by 52.4% year-on-year to ₹3.2 crores, reflecting improved operating efficiency. The business issued 8,25,638 policies and generated a gross premium of ₹2,236 crores in 9M FY26. Digital sourcing is minimal at 0.01%, with an average POS acquisition cost of approximately ₹1,000. Management confirmed no commission pressure but noted a 15.25% GST impact from October 1st.
Mutual Fund AUM Outlook and Cost of Borrowing
Mutual Fund AUM saw a decent increase, with 21% of net inflows coming from SIP and 80% of the AUM being in equity. The company plans to grow AUM by 20-25% over the next couple of years, targeting over ₹6,000 crores by the end of FY27. Regarding the cost of borrowing, currently at 10.57%, management expects a 15-20 basis point reduction in the next six months, with a 10-20 basis point impact from MCLR-based loans anticipated by the June quarter due to recent repo rate cuts.