5paisa Capital Limited (5PAISA) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I am [ Motala, ] moderator for the conference call. Welcome to 5paisa Capital Limited Q2 FY '27 Earnings Conference Call. [Operator Instructions] Please note this conference is recorded. I would now like to hand over the floor to Mr. Gaurav Seth. Thank you, and over to you, sir.

Hello. Can you all hear me?

Yes, sir.

Good afternoon, everyone, and welcome to 5paisa Capital Quarter FY '26-'27 Earnings Call. Before I get into the numbers, I wanted to say a few words about the purpose and the objective by which 5paisa was formed many years back as one of the earliest discount brokerages in the country. When we started 5paisa, we wanted any Indian with a phone to be able to invest in the market at a fair cost in a completely digital manner with support as good as a traditional broker. So that was our original vision. That is what still drives us to this game, and we keep fixing things that slow our customers down, and we keep adding products as their needs grow. To give you an example, more than 95% of the customers who joined us this quarter opened their accounts completely on their own, which is in a DIY fashion. A lot of our work in this quarter went into preparing for the year ahead. We want our growth to come from customers who enjoy using the product. The new 5paisa Trading and Investing app is the biggest step in that direction. We have rebuilt a ground up with robust back-end APIs, a completely new OMS and RMS system, powering a fast, low latency front end. Orders now go through in a single swipe traders can build auction position directly from the auction chain and also use an AI system known as Ask AI for research, portfolio analysis, trading and investing insights, and we are also going to launch something related to IPO in the near future. Collateral from share mutual funds and ETFs is now managed in one place and withdrawals up to 2 lakh each customer's account almost instantly. During this quarter, we capitalized about INR 62 million of costs on this build, and we expect to pay it off over the next several years. Coming to our performance. We serve 53.4 lakh customers today, added close to 51,600 new ones during the quarter and have more than 24 million app users. Revenue for the quarter was INR 865 million or INR 86.5 crores. For the first half, revenue grew 13% to about INR 1,750 million. Allied broking income grew 25% year-on-year and other operating income grew 18%. Net profit was INR 7.1 crores lower than quarter 1 because we choose to keep investing in technology products and brands even though trading activity was lower across the board. It was a soft quarter for the overall market. Derivatives volume dropped after the gas rollout and active NSE clients came at about INR 46 million overall. Our average daily turnover was INR 2.59 trillion, reflected the same trend. That said, the long-term picture is still very encouraging. India added roughly 16 million demat accounts in the first half and domestic funds and households continue to own a larger share of listed companies. We see it as a phase in the cycle, and we are using this time to build a stronger business. The rights issue has significantly strengthened our balance sheet. Our net worth now is INR 1,360 million or INR 1,136 crores compared with INR 650 crores at the end of March 2026. This gives us room to grow our client funding business, and we are doing it carefully. Average funding book is about INR 480 crores spread across a large number of clients rather than concentrated in a few clients. Mutual fund assets on the platform now are at INR 2,095 crores. We've also contributed to add to our product range with the AlgoSpace, which is our trading platform. Everyday traders can run ready-made automated strategies across cash, futures and options, which earlier required coding knowledge. For our most active traders, we offer [ Xstream ] APIs, colocation and the F&O 360 platform. Trendlyne is a company that we acquired will bring research theme baskets and portfolio enhance directly to the 5paisa app. A few words on artificial intelligence. We believe we change what customers expect from an investing and how quickly we can build what they need. Customers are already using it to research stocks, open interest, chart patterns, check the health of the portfolios and build option strategies. Within the company, that changed the way our engineering design and services team work. You will see it in every product we launch from here on. To sum up, our purpose remains the same. We are investing for the long term, and we believe our best years are still ahead of us. Thank you for your continued support. Now happy to take any questions. Thank you.

[Operator Instructions] The first question comes from Mahesha Tolani from [ Gold Water. ]

Sir, my question was on the acquisition of Trendlyne. Could you shed some light on how you plan to position the platform going forward? Integration to 5paisa or will it continue to operate? How do you see this acquisition creating synergy with the [indiscernible]