Nature of the Disclosure

Transcript of the H1 FY27 Earnings Conference Call for Rikhav Securities Limited, submitted to the exchange pursuant to Regulation 30(6) read with point 15(b) of Para A Part A of Schedule III of the SEBI (LODR) Regulations, 2015.

Key Quantitative Figures (H1 FY27)

  • Total Income (Consolidated): INR 869.07 Crores
  • EBITDA (Consolidated): INR 24.47 Crores
  • Profit After Tax (Consolidated): INR 13.60 Crores
  • Earnings Per Share (EPS): INR 3.55
  • Total Trading Volume Handled: Over INR 73,000 Crores (across equity, F&O, and commodity segments)
  • Advisory Vertical Contribution: INR 3.15 Crores
  • Current MTF Book Size: INR 15 Crores
  • Institutional Brokerage (H1): INR 0.50 Crores

Dates of Action

  • Earnings Call Date: November 06, 2026
  • Transcript Filing Date: November 12, 2026
  • Digital Marketing Launch Target: April 2027 (post-March '27)
  • API Access for Clients: Planned for next quarter (Q3 FY27)

Parties Involved

  • Management Participants: Mr. Hitesh Lakhani (Chairman & MD), Mr. Deep Lakhani (Head of Technology)
  • Moderator: Ms. Pooja Mapade from Kirin Advisors
  • Institutional Clients Empanelled: LIC, GIC, and approximately 15 banks/institutions.
  • Institutional Head: Mr. Santosh (20 years of experience)

Purpose & Stated Rationale

The call was held to discuss the company's financial performance for the first half of FY27 and its business strategy. The management's stated focus is on building a more scalable and diversified platform by shifting capital towards stable, recurring income streams and reducing dependency on volatile proprietary trading.

Business Performance & Strategy Details

Operating Environment (H1 FY27)

Management described H1 FY27 as a difficult period due to the continuing conflict in West Asia, sustained selling by Foreign Portfolio Investors (FPIs) which kept frontline indices broadly flat, and a revision in the Securities Transaction Tax (STT) on derivatives from April 2026. This revision moderated F&O volumes industry-wide and narrowed spreads for arbitrage strategies.

Financial Performance Overview

The company reported the stated consolidated figures. The moderation in operating margins was attributed to increased expenses from higher financial costs due to SEBI regulations, investment in new IT hardware/software, increased STT, and a standard increase in employee expenses under new labour laws, while revenue did not increase proportionately in the weak market.

Growth Strategies & Updates

  • Institutional Broking: Defined as a key growth lever. The company is empanelled with LIC (expecting ~INR 1.5 Cr brokerage/year), GIC, and the SBI Group. It aims to add 12-15 institutions yearly and targets institutional brokerage revenue of INR 5 Crores within two years, with INR 3-4 Crores expected next year.
  • ETF Market Making: The company has recently commenced ETF market making and plans to add more AMC partners.
  • Technology & Digital Expansion: Initiatives include automating KYC and onboarding with AI, developing the "Rikhav Plus" mobile/app platform (currently with 18,000 created logins and ~10,000 daily active users), and planning a digital marketing push via Meta and Google Ads starting April 2027. API-based access for clients is planned for the next quarter.
  • Geographic Expansion: Expanding beyond Maharashtra and Gujarat into UP, Punjab, and Rajasthan in a measured manner, primarily through new branches rather than an aggressive franchisee model due to SEBI compliance risks.
  • Product Expansion: Exploring mutual fund distribution, PMS distribution, and AIF distribution to cater to HNI clients.

Proprietary Trading & Risk Management

The proprietary trading desk employs algorithm-driven arbitrage and delta hedging strategies. The company has reduced its direct equity market exposure and shifted funds towards algo-trading, considered safer. Risk is managed through an automated VAR-based system that analyzes risk exposure on an order-to-order basis.

Margin Trading Facility (MTF)

The MTF book is currently at INR 15 Crores. Growth is selective and based on rigorous risk analysis of client and script exposure. The company expects a 50% jump to INR 25-30 Crores in the next year if market conditions are good.

Forward-Looking Commentary

Management expects the market to stabilize and improve in the second half of FY27. The long-term outlook for India's capital markets is confident, driven by financialization of savings, growing retail/DII participation, and digital adoption.

Targets provided:

  • Expects 20-25% yearly growth from existing business.
  • Targets INR 10 Crores brokerage from institutional and other businesses within two years.
  • Aims for net surplus from institutional business starting next year.

Capital & Funding

Management indicated that while there is adequate liquidity today, a capital augmentation initiative may be considered in March or April 2027 if market conditions improve, to support the growth of MTF, institutional broking, and other services.

#Tags: #RikhavSecurities #EarningsCall #H1FY27 #SEBIDisclosure #FinancialUpdate #Neutral