SMC Global Securities Limited Q2 FY27 Earnings Conference Call Summary

Funding Update

  • On 28th September 2026, company filed Prospectus for public issue of secured, rated, listed, redeemable, non-convertible debentures of ₹1,000 face value each
  • Base size: ₹75 crore with green shoe option of up to ₹75 crore (total ₹150 crore)
  • Issue opened on 5th October 2026 and pre-closed on 9th October 2026
  • Subscription: ₹166.49 crore (oversubscribed over total issue size)
  • Full ₹150 crore retained
  • NCDs allotted on 13th October 2026 and listed on BSE on 14th October 2026

Market Environment Context (Q2 FY27)

  • Nifty 50 ended quarter ~5% lower
  • Foreign investors turned net sellers in September after two months of buying
  • ~90 lakh new demat accounts opened during quarter (strongest since late 2024)
  • Total investor base crossed 24 crore accounts
  • 69 IPOs raised record ₹90,462 crore (largest quarter for primary markets)
  • Monthly SIP contributions reached all-time high of ₹32,490 crore in September 2026
  • SEBI introduced Closing Auction Session for F&O stocks from 3rd August 2026
  • Realigned pre-open session from 7th September 2026
  • RBI's revised framework for bank lending to capital market intermediaries effective from 1st July 2026 (requires full collateralisation)
  • RBI repo rate unchanged at 5.25% in August 2026, raised to 5.50% on 7th October 2026 (post-quarter)

Business Performance Highlights

Consolidated Financials (Q2 FY27):

  • Operational income: ₹532.5 crores (up 20.9% YoY, 3.4% QoQ)
  • EBITDA: ₹101.6 crores (up 20.4% YoY)
  • EBITDA margin: 19.1% (vs 19.2% in Q2 FY26)
  • PAT: ₹28.2 crores (up 34.4% YoY from ₹21 crores)
  • PAT margin: 5.3% (improved 50 bps)

Consolidated Financials (H1 FY27):

  • Operational income: ₹1,047.5 crores (up 21.1% YoY)
  • EBITDA: ₹208.4 crores (up 13.0% YoY)
  • EBITDA margin: 19.9%
  • PAT: ₹65 crores (up 27.6% YoY)
  • PAT margin: 6.2% (improved 30 bps)

Standalone Financials (Q2 FY27):

  • Operational income: ₹256.7 crores (up 18.6% YoY)
  • EBITDA: ₹59.6 crores (up 25.5% YoY)
  • EBITDA margin: 23.2%
  • PAT: ₹9.5 crores (up 50.9% YoY)

Standalone Financials (H1 FY27):

  • Operational income: ₹530.1 crores (up 14.6% YoY)
  • EBITDA: ₹131.2 crores (up 19.6% YoY)
  • EBITDA margin: 24.8%
  • PAT: ₹34.6 crores (up 19.0% YoY)

Segment Performance (Q2 FY27)

Broking, Distribution and Trading:

  • Revenue: ₹288.3 crores (up 19.7% YoY)
  • Segment EBIT: ₹56.1 crores (up 15.0% YoY)

Insurance Broking:

  • Revenue: ₹193.8 crores (up 19.3% YoY)
  • Segment EBIT: ₹4.5 crores (up 7.1% YoY)
  • H1 FY27 gross premium: ₹1,598 crore
  • Policies issued: 5.78 lakh through 16,916 POS agents and 387 motor insurance service providers

Financing (NBFC):

  • Revenue: ₹62 crores (up 33.6% YoY)
  • Segment EBIT: ₹37.6 crores (up 43.0% YoY)
  • AUM: ₹1,031 crore as of September 2026
  • Disbursements: ₹323 crore in H1 FY27 through 41 branches across 7 states
  • Micro-LAP AUM: ₹172 crore (vs ₹121 crore in March 2026)
  • Gold loans AUM: ₹74 crore (vs ₹66 crore in March 2026)
  • NIM: 7.8% in H1 FY27 (vs 7.3% in FY26)
  • PAT: ₹23.3 crore in H1 FY27 (vs ₹24.6 crore in full FY26)
  • Capital adequacy ratio: 46.1%
  • Ratings: ICRA A1+ (short-term), ICRA A and CRISL A with stable outlook (long-term)

Operational Metrics

  • Broking client base (including StoxKart): 14.2 lakh as of September 2026
  • Broking DP AUA: ₹1,66,737 crore (up ~17% from March 2026)
  • Online penetration: 75% (vs 72% at FY26 end)
  • Mutual fund AUM: ₹4,711 crore with 91,145 running SIPs
  • Wealth AUM/AUA: ₹1,464 crore (up ~25% in H1)
  • StoxKart quarterly revenue: north of ₹20 crores

Balance Sheet Position

  • Consolidated net worth: ₹1,358 crores as of September 2026
  • Debt-equity ratio: 1.63x

Management Commentary and Forward Outlook

NBFC Strategy:

  • Moving away from large-ticket LAP and tightening unsecured business loans
  • Building granular, secured retail book in micro-LAP, gold loans and asset finance
  • Unsecured loan book currently at 22.3% of AUM, target to reduce below 15% in about a year
  • Expect AUM to reach ₹1,125-1,150 crore by FY27 end (lower than initial ₹1,300 crore target due to faster rundown of discontinued products)
  • Expect 20 basis point increase in borrowing costs due to RBI rate hike, but negligible NIM impact due to portfolio mix shift
  • More than 90% of borrowing at floating rate

StoxKart:

  • Aiming for more than ₹100 crores revenue in FY27
  • Planning ₹50 crores additional investment primarily for MTF business expansion
  • Break-even not expected in FY27, but maintaining current burn rate

Insurance Broking:

  • Focus on growing health portfolio, expanding corporate portfolio, and scaling reinsurance
  • Monitoring IRDAI consultation paper on economics of insurance distribution (commission caps and expense management limits)

QoQ Profit Decline Explanation:

  • Management cited SEBI's Closing Auction Session implementation from 3rd August 2026 as primary reason
  • Reduced brokerage revenue due to investor losses and lower transactions
  • Treasury operations not profitable due to deficiency of arbitrage strategies
  • SEBI planning modified version in December 2026

Capital Allocation:

  • Group runs 11 business lines across 9 subsidiaries
  • No current plans for exits or partnerships, but open to strategic equity investors if suitable
  • Sufficiently capitalized across all verticals