Financial Performance Summary

H2 FY26 Financial Results:

  • Total Income: INR 1,604 crores
  • EBITDA: INR 6.57 crores
  • PAT: INR 1.20 crores
  • Earnings Per Share: INR 0.31

Full Year FY26 Financial Results:

  • Total Income: INR 1,991 crores
  • EBITDA: INR 32.53 crores
  • PAT: INR 18.96 crores
  • Earnings Per Share: INR 4.95

Key Factors Impacting Profitability

  • Loss of approximately INR 20-23 crores from cash market shares of old investments
  • Unrealized profit of INR 4.33 crores from SLBM transactions not recognized in financial statements (expected to realize in coming quarters)
  • Higher depreciation expenses due to technology investments
  • Tax adjustment of approximately INR 75-80 lakhs
  • Market volatility impact of INR 8-10 crores due to US-Iran war affecting valuations

Business Operations and Strategy

Technology Investment:

  • INR 5.40 crores invested in computer software systems and technology enhancement initiatives
  • Upgraded to low-latency trading systems and algo trading capabilities
  • Enhanced cybersecurity infrastructure with monthly audits and fail-safe systems

Market Making and Business Diversification:

  • Reduced SME segment exposure to 30% of previous levels (current value INR 20-25 crores)
  • Changed strategy to sell SME stocks within one week of listing
  • Started ETF market making with Kotak Mutual Fund
  • Planning to add 2-3 more mutual funds for market making
  • Expanding institutional brokerage through empanelment with banks, FDIs, and FPIs

Geographic Expansion:

  • Recently opened branches in Lucknow, Nashik, and Gorakhpur
  • Planning 8-10 franchise branches annually with cautious expansion approach
  • Focus on expanding beyond core markets of Maharashtra and Gujarat

Client Metrics:

  • Active client base: 12,500 clients
  • New clients added in H2: 2,500 clients
  • Total customers: 25,000
  • Quarterly active clients: 10,000-12,000
  • Daily active traders: 2,000-2,500 clients
  • Client float: INR 100-120 crores
  • Average revenue per user: INR 5,000-6,000 (brokerage component)

Risk Management and Compliance

  • Algorithm and VaR-based risk management framework
  • Reduced cash market investment exposure from ~INR 100 crores to target of INR 50 crores
  • Compliance with SEBI cybersecurity frameworks through third-party audits
  • No cybersecurity breaches reported in FY26

Regulatory Impact Assessment

  • Acknowledged short-term impact on derivatives volumes from recent SEBI regulations
  • Believes regulations are beneficial for long-term market health by protecting retail traders

Future Outlook and Guidance

  • FY27 growth target: 20% growth in brokerage and client base
  • FY27 growth target: 20-25% growth in algo trading and delta hedging income
  • Full-year FY27 PAT guidance: Approximately INR 40 crores
  • Planning to start digital marketing campaigns in upcoming quarter

Management Participants

  • Mr. Hitesh Lakhani - Chairman and Managing Director
  • Mr. Rajendra Shah - Whole-time Director and Chief Financial Officer
  • Mr. Deep Lakhani - Head Technology

Conference Call Moderator

  • Mr. Parth Acharya - Kirin Advisors Private Limited