Pune E - Stock Broking Ltd (PESB) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to the Pune E- Stock Broking H1 FY27 conference call hosted by Go India Advisors. 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 this conference, 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 Ms. Sakshi Shah from Go India Advisors. Thank you, and over to you, ma'am.
Sakshi Shah (Go India Advisors): Thank you. Good evening, everyone, and welcome to the H1 FY27 earnings call of Pune E- Stock Broking Limited. We have on the call Mr. Vrajesh Shah, Chairman and Managing Director, Mr. Ronak Jhaveri, Whole-time Director, and Mr. Arpit Shah, CFO. We must remind you that the discussion on today's call may include certain forward-looking statements and must therefore be viewed in conjunction with the risk that the company faces. May I now request the management to take us through the business outlook and financials, subsequent to which we will open the floor for Q&A. Thank you, and over to you, Vrajesh sir.
Vrajesh Shah (Pune E - Stock Broking Ltd): Yeah. Good evening, everyone. A very, very warm welcome to the H1 FY27 earning call of Pune E- Stock Broking Limited. We are delighted to host our very first earning call and appreciate you thinking, taking some time to join us today. Thank you for being here. When we incorporated this company in 2007, we were beginning, with the belief that financial market should be built on trust. And our tagline also, "Your trust is our capital." It was not created merely to sound good. It reflected what we wanted this institution to stand for. In our business, technology can make transactions faster, products can make our platform wider, and capital can help a business grow. But none of this can replace the trust that a client places in you when they make a financial decision. That belief is stayed with the every phase of our journey. With that, I hand over to, call to Mr. Ronak Jhaveri, our Director.
Ronak Jhaveri (Pune E - Stock Broking Ltd): Good evening, everyone. Thank you for joining us today. We have seen market rise, fall, change direction, and change character. We have seen technology reshape the way people invest, regulations reshape the way brokers operate, and new generations of investor enter the market. Through all of it, one thing has remained constant. Our responsibility is to keep earning the confidence of the people who choose to do business with us. And the big, backbone of this business has always been our people. The relationships our team build, the care with which they serve clients, the discipline with which they manage risk, and ownership they take every day, are what we, what have brought PESB to where it is today. Our platforms, our product matters, but it is our people who bring our promise to life. The market environment in the first half of FY27 was not an easy one. Much of the pressure came from the developments beyond our borders.
Ronak Jhaveri (Pune E - Stock Broking Ltd): The conflict in West Asia, which broke out in March, kept crude oil prices high. And in September, Brent rose from below $90 to nearly 110 per barrel. The US Federal Reserve raised rates, the 10-year G-sec bond yield touched its highest level since 2007, and the rupee came under pressure. Foreign investors were net sellers of more than 2.3 lakh crore in the cash market between April to September '26. NIFTY fell about 6% in December alone, in September alone, and ended just around 1% up for the first half of the year. These are not just market statistics for us. They describe the uncertainty that investors, business, and market intermediaries had to navigate. When markets become volatile, confidence is tested. Investors become more selective, activity can slow, and every participant has to be thoughtful about how they deploy capital and manage risk. Yet, what stood out to us was the resilience of Indian investors. Over the same six months, domestic institutions bought close to 3.9 lakh crore of equities. The monthly SIP contribution reached a record of over 32,400 crore in September, which turns out to around 3.9 lakh crore yearly investment. In earlier cycles, a sell-off of this size may have pushed many retail investors to the sidelines. This time, they stayed invested. We see this as a meaningful change in the way India is participating in its financial markets. Savings are increasingly finding their way into financial assets, and investors are becoming more enduring part of the market. That gives us confidence not because markets will always move in one direction, but because the underlying participation is becoming broader and more consistent. For the broking industry, however, the challenge is also structural. The the way people trade and invest is changing. SEBI's measures on future and options more than halved option volumes in 2026 and reduced the number of individual F&O traders by about fifth. And in April this year, higher Securities Transaction Tax on derivatives added to the pressure. We do not see this simply as a difficult phase to wait out. We see as a signal to evolve. Activity is moving towards cash market and funded positions. Industry's margin trading book grew from over 1.4 lakh crore at the end of June to about 1.6 lakh crore by the end of September. And India now has more than 24 crore demat accounts. For us, the message is clear. The future of broking cannot depend only on opening more accounts or on the volumes of a single product. It will depend on how meaningfully we serve each client with our research, advice, funding, technology, and wider range of financial products. We are building relationships that remain valuable across market cycles, not relationships that depend only on a busy trading day. There are also opportunities emerging alongside these challenges. The primary market told a very different story from the secondary market. Mainboard IPOs raised a record 94,200 crores in the first half of across 78 issues. This is 35% higher than last year. Including the listing of NSE itself, and with SME issues, the total IPO fund raise crossed over 1 lakh crore. Indian companies continue to look for capital to fund their next phase of growth. This creates a meaningful opportunity for our merchant banking business. Insurance is another large, underpenetrated opportunity with the sector
Ronak Jhaveri (Pune E - Stock Broking Ltd): opens for 100% foreign investment, more capital and more products will come into the market. But a wider choice also creates a greater need of guidance. People do not just need access to products, they need help understanding which product is right for them. That is where a trusted financial relationship can make a real difference. When we look back at the journey, I do not see a company that has stood still. I see a company that has tried to respond to each new phase of the market, while holding on to the same founding belief. We became direct member of BSE and NSE from 2008. In 2016, the acquisition of Pune Stock Exchange and Vraj Share Services brought us a network of more than 120 sub-brokers. In the year 2020, we introduced our Aero trading app and more than 70% of our execution moved online. We got listed on the BSE SME platform in 2024. In 2025, we entered merchant banking business and launched our CAT 3 AIF. This year, we have added insurance distribution to our growing platform. Each of these steps, each of these steps came from recognizing that our clients' needs were changing. We wanted to be more present not just because not just when they placed a trade, but across more their more of their financial journey. We are still on that journey, and we know that building a diversified platform takes time, commitment, and the right people. Today, we serve more than 65,000 clients, of whom more than 17,000 are traded clients. And together, they hold more than 9,000 crore of assets in the demat held with us. We hold SEBI registration as a research analyst, merchant banker, and market maker. These numbers represent more than scale. They represent relationship built over time and a responsibility that we take seriously. Broking and MTF remain our foundation. Our MTF book has crossed 100 crore and is fully collateralized by our client shares and cash. We are growing it carefully because we believe the quality of the book matters more than its size. We are also building open API-based algorithm trading platform for retail investors, so that clients can automate their strategies on our platform. Research is at the heart of PESB. Our team of MBAs, CAs, economist, and CFAs works on high conviction, fundamentally-backed ideas. Our curated equity basket allow clients to invest in a research team with a single order. We believe that informed participation is more valuable than activity of its own sake. Our mutual fund distribution business works with 36 AMCs and more than 500 schemes, serves more than 1,600 investors with overall AUM of over 240 crores. Our SIP book is over 1.5 crores. This is a capital-light, fee-based, and a recurring business. With 65,000 investors already on our platform, there is a meaningful opportunity to serve more of their investment needs over time. The PESB Alpha Fund, our Category 3 AIF launched in November 2025, now manages around 55 crore rupees. PESB itself has invested 15 crore in the fund. We believe in standing alongside our clients and our own investment reflects that conviction. Our merchant banking division, launched in 2025, is backed by an experienced team with strong expertise in IPOs, regulatory compliance, and capital markets. We support companies through the entire listing journey, from the readiness review and due diligence to regulatory filing,
Ronak Jhaveri (Pune E - Stock Broking Ltd): With the primary markets as active it is we believe it has the potential to scale and contribute meaningfully to our bottom line. In insurance our subsidiary Pune Finvest received its IRDAI corporate agency approval in July this year. And we began advisory operations in September under our brand, Cora Insure. The idea behind Cora Insure is simple. We don't sell insurance we help people choose it. We are beginning with our own 65,000 invest clients and are empanneling leading lives and general insurance to serve them. Our GIFT City presence gives our clients access to international markets including U.S stocks, while Pune Finvest also gives us an NBFC platform for secured lending. Together these initiatives are part of the same large larger ambition to make PESB a more complete financial service partner to its clients. Against this backdrop, I'm pleased with the way PESB has performed. Our consolidated revenue from operations grew around 30% to 34.2 crores, EBITDA grew by 31% to 22.3 crores and net profit grew almost 37% to 14.3 crores, our highest for any first half of the year. Our net profit margin improved to 41.7% compared with the previous half net profit at around 50%. These numbers matter to us, but so does the quality of the progress behind them. We have continued to serve our clients, invest in our team, and build business for the future even as the market environment remained demanding. Arpit will take you through the financial performance in detail later on. So, where are we heading from here? Our priorities are clear. We aim to sustain double-digit profit growth, improve our return ratios, grow to more than 1 lakh customer by 2027, and see wealth merchant banking and insurance contribute meaningfully to the bottom line. We will work this we will work towards this by opening flagship branches in high visibility locations, growing the MTF book carefully, scaling algo trading for retail investors, and building our GIFT City, merchant banking, secured lending and insurance business. We are consciously We are conscious that every new business comes with its own learning curve. We will not pursue growth at any cost. We will build with discipline, invest where we see clear opportunity, and remain mindful of the trust our clients and shareholders place in us. Our aim is not simply to become a larger company, it is to become more relevant, dependable and enduring financial partner. I began by speaking about our tag line, 'Your trust is our capital.' After all these years, I believe those words are even more relevant today. The market will continue to change, products will evolve, regulations will change and new challenges will emerge. We cannot control every market cycle, but we can control how we respond to it with integrity, preparedness and a long-term view. Over the years in the market, I have learned that clients remember who stood by them in difficult times and so do shareholders. I want to thank our employees, clients, partners and shareholders for continuing to place their confidence with us. The strength of PESB has always come from its people and relationships they build. We started in 2007 with a belief in trust. As we look ahead, that belief remains our compass. We will keep evolving, keep earning that trust, and keep building PESB for the future. With that, I hand over to our CFO, Mr. Arpit Shah, who will take you through financial performance. Thank you.
Arpit Shah (Pune E - Stock Broking Ltd): speak with you on our first earnings call. As an SME listed company, PESB reports its results every half-year, so you will hear from us on these calls twice a year. All the numbers I discuss are consolidated unless I say otherwise. Revenue from operations for H1 FY '27 was 34.2 crores, up 29.6% from 26 crores in H1 FY '26, and up 24% from 27.5 crores in H2 FY '26. After a year in which industry volumes fell, our top-line is growing again. Profit before tax was 19.1 crores, up 38.8% from 13.7 crores. Profit after tax was 14.3 crores, up 36.8% from 10.4 crores in H1 FY '26 and up 50.1% from 9.5 crores in H2 FY '26, our highest for any half-year. Our net profit margin improved 220 basis points to 41.7%. On a standalone basis, profit after tax was 13.4 crores against 9.3 crores a year ago. Our balance sheet has also grown strong stronger over the half-year. Total equity stood at 225 crores on 30th September '26 against 180.6 crores in March. Apart from the profit for the half, this reflects the conversion of warrants into 18 lakh equity shares and the issue of 16 lakh new convertible warrants at 234 each, on which 25% of the subscription amount has been received. We also paid a final dividend of Re. 1 per share for FY '26. This gives us a strong capital base to keep growing the MTF book and our newer businesses. Short-term borrowings were 65 crores against 47 crores in March, and are used mainly to fund MTF book, while long-term borrowings came down to just 0.6 crores. Our MTF book is now over 100 crores and remains fully collateralized by client stocks, holdings and cash. For FY '26, our consolidated return on equity was 12.2% and our return on capital employed was 14.2%. Improving return ratios is clear priority for us. As our capital-light business businesses in wealth, merchant banking and insurance contribute more, we expect these ratios to move up steadily. We will remain focused on ensuring that growth translates into stronger and more sustainable returns on the capital entrusted to us. To sum up, H1 FY '27 has been a period of growth for PESB, while we have continued to invest in the people and capabilities needed for our next phase. We remain conscious of capital discipline and the quality of our earnings. Thank you. I now request the moderator to open the floor for questions.
Moderator: Thank you very much. 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 please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Mukul Darda, an Individual Investor. Please go ahead.
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