Geojit Financial Services Ltd (GEOJITFSL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '27 earnings conference call of Geojit Financial Services Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements do not guarantee future performance and may involve risks and uncertainties that are difficult to predict. 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 management's opening remarks.
Moderator: Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Satish Menon, Executive Director, Geojit Financial Services Limited. Thank you, and over to you, sir.
Satish Menon (Geojit Financial Services Limited): Thank you, operator. Good day, everyone, and thank you for joining for Geojit Financial Services Q2 and H1 FY '27 earnings call. Joining me on the call today are Mr. C. J. George, Executive Chairman, Mr. Jones George, Managing Director, Miss Mini Nair, CFO, Mr. Jayakrishnan Sashidharan, CIO, Mr. Roby Roychoudhury, CEO of Private Wealth, and Mr. Liju Johnson, Company Secretary. I will begin with a brief overview of the operating environment and and our business performance, after which I will take you through the financial performance for the quarter and for the first half of FY '27. First is on the operating environment and the strategic direction. Of course, the second quarter was marked by was marked by volatility and corrections in the India Indian capital market, particularly during the month of September. In this environment, our focus remained on maintaining customer engagement, supporting disciplined investing, and continuing to build diversified, relationship-led wealth platform. As on September-end, we had a network of 529 offices compared to 525 in Q1. Our client base increased to 17.25 lakhs, and we added 61,657 clients in the half year. Our recurring revenue business continued to build scale. Recurring revenue AUM reached 26,737 crores in H1, which is split across mutual fund, overseas AUM, Smartfolio, PMS, and AIF. This is compared to 23,230 at the end of FY '26. Our lending book stood at 780 crores as of end of Q2 compared to 735 crores a year back. It is consists of margin trading facility and loan against shares and mutual funds. These businesses complement our core broking franchise and broaden the range of solutions available to our clients. Recurring income in H1 is 40% of total income, which has grown consistently over the last few years. Just for comparison, recurring income was 24% of the total income in FY '23. Now, it is 40%. Coming to the Q2 and half year performance. Revenue from operations in Q2 was 165.82 crores, which is up 2.5% Y-on-Y and up 3.38% sequentially. EBITDA was 36.7, while profit before tax stood at 20.62. For H1, revenue from operations increased by 6.72%, and EBITDA stood at 78.23 crores. The half-year performance reflects top-line resilience alongside higher operating costs and lower transaction linked activity in the cash market. The quarter's performance reflects a combination of factors. Of course, subdued activity in the cash market affected the transaction-linked income, while distribution income and growth in fee-earning AUM provided support. We continue to invest in people, technology, and distribution capabilities to strengthen customer acquisition, SIP mobilization, and service delivery. These investments are intended to build capacity and improve productivity over time.
Satish Menon (Geojit Financial Services Limited): and, of course, higher incentive in line with the growth of distribution business. In terms of customer assets and gross inflows, customer assets stood at 1.12 lakh crore as of September end. Sequentially, reported customer assets were broadly stable. Healthy gross inflows continued during the quarter. But market correction, especially in the month of September, offset some of the underlying inflows. We believe it is important to distinguish between the flow of the investments into the platform and market-linked changes in the valuation of existing assets. Gross inflows remained healthy throughout our investment offerings, supported by healthy customer engagement and our distribution network. While the market movements can affect quarter end AUM, the underlying inflow momentum and continued participation through SIP remain important indicators of customer engagement and we continue to strengthen our field force. In the mutual fund distribution business, our SIP book reached 156 crores and the number of SIP clients is approximately 1.78 lakhs. For the wealth management business, annual ARR net flow, which comprises of net flows in mutual fund, third-party products, and insurance, stood at 583 crores in quarter two. For H1, it stood at 1,189 crores. These measures provide an indication of net addition to recurring revenue linked products. They should be considered alongside gross inflows, redemptions, and market-related valuation changes. Mutual fund AUM stood at 18,449 crore excluding the JV. We are continuing to strengthen our field force capabilities and customer outreach to reach, to support our SIP acquisition and deeper product engagement. 79% of our mutual fund income comes from clients who have been with us for five % five years and plus. In terms of our asset management business, it continues to grow. PMS, AIF AUM stood at 2,018 crores, 2018, as of September end compared to 1449 crores end of March, which is a growth of 39% over March. Asset management net inflows increased to 322 crores in quarter two compared to 71 crores in the same period last year. For the half year, asset management inflows stood at 408 crores. We view this improvement in net flows alongside the growth in AUM and client numbers as an encouraging indicator of momentum of business for our asset management business. Within our alternative investment offering, Geojit yield plus category 3 AIF, with an absolute return strategy, had an AUM of 248 crores as of September end, compared to 22 crores a year back. In insurance business, we recorded a gross premium of 175 crores in quarter two. Insurance remains an important part of our broader wealth proposition and supports cross-selling and deeper client relationship. In the GCC, we continue to engage with NRI clients amid evolving investment preferences and a wait and watch environment. We have observed that attractive FCNR deposit offering and market conditions were influencing the allocation of investments across products. Rupee movement and global investment opportunities have also shaped client preferences including interest rates in the US. We have not noticed any any major redemptions in our overseas market. We continue to monitor client activity and market sentiments while maintaining our focus on customer engagement. Technology remains a key enabler for our transformation. We are investing on our platform, IT capabilities to improve the client journey, supporting digital onboarding, and strengthening our analytics and operational efficiency. To conclude, quarter two FY27 was a challenging quarter for the capital market. Nevertheless, we continue to see healthy inflows, growth in recurring revenue AUM, and a significant improvement in asset management net flows. Of course, market-linked valuation movements
Satish Menon (Geojit Financial Services Limited): our reported customer assets, along with subdued cash market activity. Our priorities remain to deepen customer relationships, expand SIP and product penetration, and continue to invest in technology. We believe that a broader recurring revenue base, supported by our distribution network and client client relationships, will help us build a more resilient and scalable business over the long term. With that, I would like to thank you for your continued interest in Geojit. Thank you very much. Over to operator for Q&A.
Moderator: Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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 will wait for a moment while the question queue assembles.
Moderator: The first question is from the line of Daksh Prashar from De Sola do Research. Please go ahead.
Daksh Prashar (De Sola do Research): Hi sir, am I audible?
Satish Menon (Geojit Financial Services Limited): Yes, you're audible.
Daksh Prashar (De Sola do Research): Okay, sir. So, my first question is, sir, given that only a small percentage of our active clients hold more than one product, what specific cross-selling strategies have been deployed to increase product penetration across our existing client base? That's my first question, sir.
Satish Menon (Geojit Financial Services Limited): Okay. So we have close to 20% of our clients who have invested through us in more than one product. And primarily that is brokerage and mutual fund, which is which is the overlapping one. We have right now penetrated less than 5% of our clients for life insurance and less than 3% for health insurance. Our first focus, of course, is to penetrate more in mutual funds and then we have a lot of scope to do in insurance as for both insurance, life as well as in health.
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