Anand Rathi Profit Jumps 50% as Non-Broking Revenue Takes Charge
The brokerage's Q2 FY27 profit soared on the back of a 36% jump in margin trading income and steady distribution revenue, highlighting its diversification success.
Anand Rathi Share & Stock Brokers posted a 50.3% YoY jump in Q2 FY27 profit, outpacing a 20.3% revenue rise. Growth was driven by its non-broking segments, particularly margin trading and distribution income.
For Anand Rathi Share & Stock Brokers, the story of the September quarter is one of diversification paying off. Amid market volatility, the firm's deliberate shift away from pure-play broking delivered a standout result: profit surged 50% from a year ago, far outpacing a solid 20% rise in revenue.
The numbers show a clear acceleration. Profit after tax reached ₹41.94 crore, up 50.3% year-on-year and a sharp 79.6% from the June quarter. Revenue from operations grew to ₹273.21 crore. The net profit margin expanded to 15.4%, a 310 basis point improvement from Q2 FY26.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 273.21YoY +20% | 246.10 | 227.20 |
| Profit (₹ Cr) | 41.94YoY +50% | 23.35 | 27.90 |
| Net Profit Margin | 15.4%YoY +25% | 9.5% | 12.3% |
Why Profit Growth Outpaced Revenue
The driver was a powerful mix of non-broking revenue streams. According to The Economic Times, interest income from the Margin Trading Facility (MTF) business rose 36% year-on-year to ₹49.6 crore. Distribution income also climbed to ₹32.7 crore. This growth in higher-margin, recurring income allowed profit to leap even as total expenses rose a contained 13.7%.
The performance marks a strong recovery from the previous quarter, where reported profit was weighed down by a one-off exceptional expense. CNBC-TV18 reported that profit before exceptional items for the first half grew nearly 60% to ₹81 crore, underscoring the underlying operating strength.
The Outlook Built on Recurring Income
Management's commentary, cited by the same outlets, points to resilience. Chairman Pradeep Gupta noted resilient investor participation despite volatility, supported by domestic inflows and mutual fund growth. The firm's strategy is bearing fruit: trail-based revenues now cover 76% of employee costs, providing earnings visibility.
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The focus remains on deepening client relationships and technology. With assets under management and custody growing by 29% and 13% respectively, the platform for future fee-based income is expanding. The company's guidance for its wealth management arm, reported by Investing.com, remains unchanged, suggesting confidence in hitting full-year targets.
Key Points
- Profit after tax jumped 50.3% year-on-year to ₹41.94 crore, significantly outpacing a 20.3% rise in revenue.
- Growth was led by non-broking segments, with MTF interest income up 36% and distribution income also rising.
- The net profit margin expanded 310 basis points to 15.4%, reflecting improved operating leverage.
- Underlying performance is strong, with H1 profit before exceptional items up nearly 60% year-on-year.
- Assets under management and custody continued to grow, supporting the shift towards recurring revenue.
Hexa Perspective
The quarter demonstrates the earnings power of Anand Rathi's diversified model when its non-broking engines fire. The 36% surge in MTF income is particularly telling, showing client engagement beyond mere trading. For this momentum to hold, market volatility must not severely dent the MTF book or mutual fund inflows that feed distribution.
The valuation, at a 40% discount to the industry PE, may reflect the market's historical preference for high-volume discount brokers. This quarter's quality of earnings—profit growth driven by sticky income—could challenge that view if sustained. The key watchpoint is whether broking revenue can stabilise, allowing the non-broking mix to keep lifting overall margins.
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