Anand Rathi profit rises as margin funding surges 55%
Anand Rathi Share reported a 71% jump in first-quarter operating profit, driven by a surge in leveraged equity trading, though sequential growth softened due to declining distribution income.
Anand Rathi Share reported profit before an exceptional item of Rs 39.1 crore for the first quarter of fiscal 2027, a 71% increase from Rs 22.8 crore a year earlier. Net profit, after the one-time charge, rose a more modest 2% to Rs 23.4 crore. Revenue from operations grew 22% to Rs 246.1 crore, reflecting broader activity in India's retail equities market.
The primary driver of the annual growth was a sharp expansion in margin funding. The company's margin trading facility book surged 55% year-on-year to Rs 1,331.8 crore, pushing related interest income up 52% to Rs 42.8 crore. This indicates that investors are increasingly seeking leveraged exposure to equities through the brokerage.
Earnings before interest, tax, depreciation and amortisation rose 30% to Rs 97.3 crore, outpacing revenue growth to expand the EBITDA margin to 39.5% from 37.2%. Chairman and MD Pradeep Gupta noted that non-broking revenue grew 43% during the quarter, strengthening what he called the company's balanced revenue profile.
Despite the strong year-on-year headline numbers, the underlying sequential trend points to a softening in demand for certain financial products. Revenue fell 3.7% from the March quarter, while EBITDA dropped 11.8% and its margin narrowed by 362 basis points from 43.2%. Profit before the exceptional item declined 6% quarter-on-quarter.
The quarterly weakness was heavily concentrated in non-core income streams. Distribution income fell nearly 22% sequentially, and other operating income dropped 16%. Core broking revenue provided a counterweight, rising 6.5% from the prior quarter, while margin funding interest income held largely stable.
