SMC Global Securities Ltd (SMCGLOBAL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Q2 and H1 FY '27 earnings conference call of SMC Global Securities Limited, hosted by Xponentia Advisory. 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, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gautam Sipani from Xponentia Advisory. Thank you, and over to you, Gautam.
Gautam Sipani (Xponentia Advisory): Thank you. Good evening, everyone, and thank you for joining us on the Q2 and H1 FY '27 earnings conference call of SMC Global Securities Limited. Joining us today are Mr. Subhash Chand Aggarwal, who is the Chairman and Managing Director of SMC Group; Mr. Mahesh Gupta, Vice Chairman and Managing Director of SMC Group; Dr. D. K. Aggarwal, which is the Managing Director and the Chairman of the SMC Capitals Limited; Mr. Ajay Garg, who is the Director and
Gautam Sipani (Xponentia Advisory): Group of SMC Global Securities Limited, Mr. Anurag Bansal, Whole Time Director of SMC Global Securities Limited, Mr. Himanshu Gupta, Director and the CEO of Moneywise Financial Services Private Limited, Ms. Shruti Aggarwal, Whole Time Director of SMC Global Securities Limited, Mr. Pranay Aggarwal, Director and CEO of Stoxkart, and Mr. Rohit Nayyar, Group CFO. Before we begin, please note that today's discussion may include forward-looking statements which reflect the company's current views and expectations. These statements are subject to risk and uncertainties, and actual results may differ materially. A detailed safe harbor statement is provided in our earnings presentation available on the stock exchanges and the company's website. With that, I now invite Mr. Subhash Chand Aggarwal to share his opening remarks. Over to you, sir.
Subhash Chand Aggarwal (SMC Global Securities Ltd): Thank you, Gautam. Good evening, everyone, and a warm welcome to all participants. We hope you had the opportunity to review our Q2 and H1 FY '27 financial results and the earnings presentation, both of which are available on the stock exchanges and on our website. Before I discuss our performance during the quarter, I would I would like to share an important funding update. On 28th September 2026, we filed our prospectus for public issue of stored, rated, listed, redeemable, non-convertible debentures of ₹1,000 face value each, with a base size of ₹75 crores and a green shoe option of up to another ₹75 crores, for a total of ₹150 crores. The issue opened on 5th October and drew an excellent response, with subscriptions of ₹166.49 crores, an oversubscription over the total issue size. We we pre-closed the issue on 9th October, and retained the full ₹150 crores. The NCDs were allotted on 13th October, and listed on BSE on 14th October. This response reflects investor trust in our company and it strengthens our liquidity and diversified our our borrowing mix. I thank all our investors and stakeholders for their continued support. Now I take you through each business segments, let me set out the environment we operated in in during the quarter. The July-September quarter tested investor sentiment. The Nifty 50 ended the quarter about 5% lower, and September was a difficult month. With foreign investors turning net seller after two months of buying, yet the underlying engine of Indian market, the domestic investor held firm. Three numbers capture this. Close to 90 lakh demat account were opened during the quarter, the strongest quarterly addition since late 2024, taking the country's investor base past 24 crore accounts. 69 IPOs raised a record ₹90,462 crore, the the largest quarter ever for primary markets, and monthly SIP contributions reached an all-time high of ₹32,490 crore in September, even as markets corrected. Indian households are investing through the cycle, not around it, and that is the structural opportunity our business is built on. The quarter also brought one of the most significant changes to market structure in recent years. From 3rd August, the exchanges introduced the closing auction session for F&O stocks, followed by a realigned pre-open session from 7th September. These changes improve price discovery and market integrity. They also required every broker to re-engineer trading system at short notice. I am pleased to say SMC and Stoxkart were fully live for all the clients from day one. On funding, the RBI's reinstated revised framework for bank lending to capital market intermediary came into effect from 1st July, requiring full collateralization of bank facilities to brokers. This raises the bar on capital and compliance across the country. We believe it favors well-capitalized, diversified intermediary, and SMC entered this framework from a position of strength. The
Subhash Chand Aggarwal (SMC Global Securities Ltd): insurance industry continued to grow at a healthy pace led by health. Non-life premiums grew 9.6% in the April-August period with health insurance now accounting for 44% of non-life premiums. On the regulatory side, IRDA moved insurance intermediary to continuous registrations from 30 July and in September released a consultation paper on the economics of insurance distribution. We are engaging with the consultation and see the direction towards transparency and policyholder outcomes as positive for established compliant intermediaries. For the NBFC sector the quarter was constructive. Credit growth was sustained, asset quality trends were healthy and lenders continue to prefer secured, granular lending. The RBI kept the repo rate unchanged at 5.25% in August, which supported a moderation in funding costs during the quarter. Subsequent to quarter end on 7th October the RBI raised the repo rate by 25 basis points to 5.5%. Speaking about business, our diversified model spanning broking, distribution, insurance and lending delivered consolidated revenue growth of 21% in the first half with profit after tax 28%. Now talking about our three main segments. Our broking franchises run on two set engines: SMC, our full service platform serving investors through advice and relationships; and Stoxkart, our digital-first platform for self-directed traders. This quarter both engines widened what we offer our clients and how we earn from them. Our broking client base, including Stoxkart grew to 14.2 lakh as of September 2026 and broking DP AUA rose to 1,66,737 crore, up about 17% from March 2026. Online penetration of our client base increased further to 75% from 72% at the end of FY26. Mutual fund AUM stood at Rs. 4,711 crore with 91,145 running SIPs and our wealth AUM/AUA grew about 25% in the half year to Rs. 1,464 crore. Stoxkart continues to build a subscription-led model that is distinctive in the industry. To sum up, SMC is broadening its product shelf, Stoxkart is building a recurring revenue base and both are less dependent on derivative volumes than a year ago. Over the last 2 years we have told you that we were deliberately reshaping our lending book, moving away from large ticket LAP and tightening unsecured business loans, and building a granular secured retail book in micro-LAP, gold loans and asset finance. This quarter the results of that strategy are clearly visible in core metrics, yield, asset quality, portfolio mix and cost of funds. Our AUM stood at Rs. 1,031 crore as of September 2026, with disbursements of Rs. 323 crore in the first half through 41 branches across 7 states. Within this, our focus products are growing. Micro-LAP AUM has risen to 172 crore rupees from Rs. 121 crore in March 2026 and gold loans to Rs. 74 crore from 66 crore. NIMs improved to 7.8% in H1 FY27 from 7.3% in FY26 and the NBFC earned a profit after tax of Rs. 23.3 crore in the first half, close to 24.6 crore it earned in the whole year of FY26. Our capital and adequacy ratio strengthened further to 46.1%, giving us
Subhash Chand Aggarwal (SMC Global Securities Ltd): headroom to go. Looking ahead we are mindful that the RBI 25 basis points repo rate hike in October may put some upward pressure on our borrowing cost depending on the pace of transmission and later resize. Our diversified borrowing mix and strong capital base gives us flexibility to manage this. With the run-down of our older product largely behind us we expect growth from our focus products to show more clearly in the coming quarter. In our insurance broking business and the investment we are making in technology across the board, our insurance broking delivered revenue growth of 19.3 19.3% YoY in quarter 2 FY27 and about 30% for the first half. Gross premium for H1 FY27 stood at Rs 1,598 crores with 5.78 lakh policies issued through a network of 16,916 IPOs POS agents and 387 motor insurance service providers. Going forward our focus remains on three areas: growing our health portfolio, expanding our corporate portfolio and scaling reinsurance. Each these each of these deepens our relationship with clients and broadens our revenue base beyond motor. With that, I hand over to our Group CFO, Mr. Rohit Nayar, to take you through the financial performance.
Rohit Nayyar (SMC Global Securities Ltd): Thank you, Subhash ji, and good evening, everyone. Thanks for joining the call. I will now take you through our consolidated performance for the quarter and the half year ended 30th September '26. For the quarter ended September '26 consolidated operational income stood at 532.5 crores, a growth of 20.9% YoY and 3.4% QoQ. EBITDA was 101.6 crores, up 20.4% YoY with an EBITDA margin of 19.1%, broadly stable as compared with 19.2% in Q2 FY26. Profit after tax grew 34.4% to 28.2 crores compared with 21 crores in Q2 FY26, and the PAT margin improved by 50 basis points to 5.3%. For the first half, consolidated operational income stood at 1,047.5 crores, up 21.1% YoY. EBITDA was 208.4 crores, up 13% with a margin of 19.9% and profit after tax was 65 crores, up 27.6% YoY. The PAT margin improved by 30 basis points to 6.2%. On a standalone basis, Q2 FY27 operational income stood at 256.7 crores, up by 18.6% YoY with EBITDA of 59.6 crores, up 25.5% YoY at a margin of 23.2%. The standalone PAT was 9.5 crores, up 50.9% YoY. For the H1 FY27 standalone operational income grew 14.6% to 530.1 crore with EBITDA of 131.2 crores which grew 19.6% year-on-year with a margin of 24.8% and PAT of 34.6 crores, which grew 19% year-on-year. Now coming to our segment performance, the broking, distribution, and trading segment reported revenue of 288.3 crores registering a YoY growth of 19.7% while segment EBIT increased 15% to 56.1 crores. The insurance broking segment delivered revenue of 193.8 crores, up 19.3% YoY, with segment EBIT growing by 7.1% to 4.5 crore. The EBIT performance continues to reflect our investments in manpower, technology, and the reinsurance business. The financing
Rohit Nayyar (SMC Global Securities Ltd): NBFC segments recorded strong growth with revenue increasing by 33.6% YoY to 62 crore and segment EBIT rising by 43% to 37.6 crore supported by higher portfolio yields and a lower cost of funds. For the first half, broking revenue grew 17.2% to 604.6 crore. Insurance broking revenue grew 29.8% to 361.1 crore. And the NBFC revenue grew 11.5% to 108.5 crore. Our balance sheet remains strong. The consolidated net worth stood at 1,358 crore as of September '26 with a debt-equity ratio of 1.63. At the NBFC level, our capital adequacy ratio was 46.1%. Our ratings stand at ICRA A1+ for short-term borrowings, and ICRA A and CRISIL A with a stable outlook for long-term borrowings. In summary, the first half of FY '27 reflects healthy growth in our fee-based businesses, an NBFC book that is now higher yielding and of better quality, and a balance sheet positioned to fund the next phase of growth. We remain focused on financial discipline, operating leverage, and building sustainable returns for our shareholders. With this, we conclude our opening remarks and open the floor for questions. Thank you.
Moderator: Thank you so much, sir. Ladies and gentlemen, we will now begin with a 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 headsets while asking a question. Ladies and gentlemen, we'll wait for a moment while our question queue assembles. Our first question comes from the line of Deval Shah, an individual investor. Please go ahead.
Deval Shah: Hello. Hi, sir. Am I audible?
Moderator: Yes, you are.
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