Anand Rathi Share And Stock Brokers Ltd (ARSSBL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Anand Rathi Share And Stock Brokers Ltd Q2 and H1 FY '27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star
Moderator: then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Diwakar Pingle from E&Y for the opening remarks. Thank you, and over to you, sir.
Diwakar Pingle (Ernst & Young): Thank you. Good evening, and welcome to the Q2 and H1 FY '27 earnings call of Anand Rathi Share and Stock Brokers Limited. The company has published its results and uploaded the investor presentation to stock exchanges and its website. Before we begin, a disclaimer. Some statements made on today's call may be forward-looking in nature. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those
Moderator: I'm sorry to interrupt you, Mr. Diwa Mr. Pingle, but your voice is low. Thank you.
Diwakar Pingle (Ernst & Young): Such statements are based on management's current beliefs and assumptions and on information presently available to the management. Participants are cautioned not to place undue reliance on these forward-looking statements while making investment decisions. To take us through the results and answer your questions today, we have with us Mr. Pradeep Gupta, Chairman and Managing Director; Mr. Roop Kishor Bhutara, Whole Time Director; Mr. Tarak Shah, Chief Financial Officer; and other members of the management team. I will now hand call over to Mr. Gupta for his opening remarks. Thank you, and over to you, sir.
Pradeep Gupta (Anand Rathi Share And Stock Brokers Ltd): Thank you, Diwakar. Good evening to all, and a warm welcome to our Q2 and H1 financial year '27 earnings call. We all are experienced as certain environment of our capital market due to geopolitical tension, rising interest rate, persistent inflationary pressure, and impact of El Nino across various global economies. As a result of this, market sentiment in our country has remained relatively subdued. Before discussing our performance for the period, the secondary market, sorry, the secondary market continued to exhibit some turbulence during the reporting period. The Nifty 50 declined by 5.22% on a quarterly basis and 1.3% on half-yearly basis, including a 6% correction in September. The weakness was more pronounced in several large cap and sectoral indices, reflecting a more cautious risk environment and softer market sentiment. However, beneath this short-term volatility, the structural drivers of India's capital market remained firmly intact. The quarter witnessed significant deepening of India's capital market, supported by rising investor participation across the primary market, direct equities, and mutual funds. IPO activity remained buoyant during the quarter, with 108 companies raising over 90,000 crore, reflecting stronger issuer confidence and healthy pipeline of businesses seeking access to public market. The mutual fund industry quarterly average asset under management increased by approximately 3.5% from 84.2 lakh crore in Q1 '27 to 87 lakh crore in Q2 FY '27. While closing AUM moderated to 82.64 lakh crore in September, largely reflecting debt fund outflow and market movement, it remained to 9.3% higher year-on-year basis. Investor commitment to systematic investment plan, which is SIPs, also remained exceptionally strong. SIP contributing across the 10 crore milestone in August '26, with monthly SIP inflows reaching to 32,490 crore in September '26, extending the trend of sustained retail participation and reinforced the growing preference for long-term wealth creation through financial assets. The primary market presented an even stronger picture. After a measured Q1 '27, which witnessed 46 mainboard and SME IPOs raising approximately 6,567 crore, active accelerated sharply in Q2 FY '27, with as many as 108 IPO raising absolute approximately 90,000 crore during the second quarter. Consequently, first half of '27 recorded
Pradeep Gupta (Anand Rathi Share And Stock Brokers Ltd): 44 mainboard IPO which raised almost 96,585 crore. Which is compared with 186 IPOs raising 71,000 approximate crore in first half representing almost 36% growth in capital raising. Finally, it is encouraging to see the retail investor participation in capital markets continue to strengthen with net addition to 31.1 lakh Demat accounts during September 26 with overall Demat account base in India nearly about 24 crore versus 22.5 crore at the beginning of the year, which represents almost 7% growth in the interim period. This broadening investor base is also driving increased adoption of financing-led investment solutions with industry margin trading facilities book growing by almost 41% year-on-year to 1,56,261 crore as on 12th October 26. Together these trends underscore the growing maturity of India's capital markets. These developments reinforce the long-term opportunities for Anand Rathi Share and Stock Brokers Ltd company as investors increasingly seek integrated broking, finance and distribution solutions. During the quarter, our MTF book grew by 38% year-on-year basis to 1,490 90 9 99 crore asset under management, which has increased by almost 29% year-on-year. Our asset management has grown by 29% to 9,000 99,990 million while asset under custody grew by almost 13% year-on-year to almost 1.15 trillion. These metrics reflect deeper client engagement and continue trust in our platform. We also continue to witness a gradual evolution in our revenue mix, while broking and related services remain a significant contributor to overall revenue. Non-broking business has steadily increased in their contribution over the years, improving the diversification and resilience resilience of our earning profile. Our investment in technology and digital capabilities continue to deliver strong outcomes. Digital platform contributed 36% of brokerage income in first half of 27 reflecting continuous focus on building a seamless, scalable digital ecosystem. Looking ahead, we remain focused on scaling our financing and distribution business, increasing engagement with existing clients and further strengthening the contribution of recurring revenue streams. We continue to target margin trading book size for approximately 1,750 to 1,800 crore by the year financial year 27 and there is going to be a growth of about 40% in AUM of our distribution business by the end of the current financial year. With that, I would now hand over the call to Mr. Roop Bhootra, whole-time director, who will take you through all the detailed financial and operating performance of the company. Over to Mr. Roop.
Roop Kishor Bhutara (Anand Rathi Share And Stock Brokers Ltd): Thank you, Pradeep ji. Good evening, everybody. So, building on the healthy business momentum highlighted earlier, our company delivered a steady financial performance during the quarter. Revenue from operations increased 20% year-on-year to 2,732 million in quarter two of financial year 27, while the first half revenue from operations grew 21% year-on-year to 5,193 million. PAT grew 50% year-on-year to 419 million in quarter two of 27 with a margin of 15%. For first half, PAT before exceptional items increased 60% year-on-year to 810 million, while profit after tax
Roop Kishor Bhutara (Anand Rathi Share And Stock Brokers Ltd): After exceptional item, it stood at 653 million, representing growth of 29% year on year. The growth came from continuous momentum across our broking and non-broking businesses. Broking and related services revenue increased to 1,551 million during the quarter from 1,158 million in Q2 FY26, reflecting a Y-o-Y growth of 34%. While first half broking and related services income grew to 2,831 million from 2,267 million in first half of '26, reflecting a 25% Y-o-Y growth. Equity cash continue to account for a majority 52% share of broking revenues during the quarter and half-year period, reflecting our focus on delivery led and client-centric participation. Within the non-broking segment, interest income from margin trading facility increased 36% year on year to 496 million during Q2 of '27, while first half of '27 MTF interest grew 43% year on year to 924 million. Distribution income stood at 327 million during the quarter 2 of FY27 and 603 million in first half of '27, respectively. Further, our distribution AUM has increased to 99,990 million, with an Y-o-Y in rise of 29%. The continuous expansion of these businesses is improving earnings visibility and is strengthening the quality of our revenue profile. As of 30th September '26, we have achieved an MTF book value of 14,993 million against our year-end guidance of 17 1,500 to 18,000 million. So, on overall basis, we have already achieved almost 57% of our target in first half of the financial year. Further, our distribution AUM grew by 29% as of September '26, compared to again the March '26 overall guidance 40%. So, in both these segments, we were able to do better than the target whatever we have set for ourselves. Client engagement remained healthy during the period. Total clients increased to approximately 10.5 lakh as of September '26. Around 55% of our clients have been associated with us for more than 3 years, reflecting the strength of our relationship and the trust reposed in the Anand Rathi brand. Additionally, 71% of our active clients are located across Tier 2 and Tier 3 cities, providing us with a broad and diversified franchise. As of September 30, 2026, our pan-India network comprise 99 branches and 1,071 authorized person across 314 cities. This extensive distribution network continues to support client acquisition, engagement, and servicing across geographies. We remain focused on maintaining a prudent risk management framework while supporting business growth. Our debt-equity ratio stood at 1.02 as of September 30th, '26, and we continue to maintain disciplined leverage and adequate liquidity as we scale our MTF and other growth initiatives. Going forward, our priorities remain clear: deepen client relationship, increase product penetration, strengthening technology-led services delivery, and maintain a balanced mix of broking and non-broking revenues. I am happy to share with all of you that the last quarter, we have achieved our highest-ever revenue as well as highest-ever profitability. Thank you, and now we can open the floor for the questions. Thanks.
Moderator: Thank you so much. Ladies and gentlemen, we'll now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of Saket Kapoor from Kapoor & Company, please go ahead.
Saket Kapoor (Kapoor & Company): Yeah. Namaskar, sir. Hope I'm audible? Yeah,
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