Share India Securities Limited ($SHAREINDIA)

Ladies and gentlemen, good day, and welcome to the Q4 FY 2026 Conference Call of Share India Securities Limited hosted by Valorem Advisors. [Operator Instructions] I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Share India Securities Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year 2026. Before we begin, let me mention a quick cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial performance for the quarter under review. Now let me introduce you to the management participating with us in today's earnings call. We have with us Mr. Kamlesh Shah, Managing Director; Mr. Sachin Gupta, Chief Executive Officer and Whole-Time Director; and Mr. Abhinav Gupta, President, Capital Markets and Products. Without any delay, I request Mr. Kamlesh Shah to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Madam. Good evening, everyone. On behalf of the entire team, I welcome all investors, analysts and stakeholders to this investor meet. As a Managing Director of the company, I would like to thank you for your continued trust and confidence in us. I would like to briefly present the financial results of the company for the period under review. Despite a challenging business environment, the company has continued to focus on operational stability, financial discipline and growth opportunities. The management has taken necessary steps to maintain efficiency and strengthen overall performance. First, we shall discuss global environment and market context. The global economic environment during the year remained volatile, impacted by geopolitical tensions, global trade uncertainties, fluctuating energy prices and inflationary pressure. We also witnessed continued selling by foreign institutional investors due to global risk reallocations, higher interest rate in developed market and currency movement, which created intermittent pressure on the emerging market, including India. Despite these challenges, the Indian economy continued to demonstrate resilience, supported by strong domestic demand, policy stability and infrastructure-led growth. Amidst these global and domestic challenges, the company remained resilient due to its diversified business model, disciplined risk management practice and strong operational framework. The management continued to focus on client-centric growth, cost optimization and maintaining financial stability, enabling the company to navigate market volatility effectively. Outlook on the Indian capital markets. Looking ahead, I remain optimistic about the Indian capital markets. India continues to stand out as one of the fastest-growing major economies globally. Increasing financialization of savings, rapid expansion of retail participation, digital adoption and sustained economic reforms provide strong structural support to the capital markets. Despite short-term global uncertainty and market volatility, India remains one of the fastest-growing major economy, which is expected to support long-term growth in the financial and capital markets sector. The management remains optimistic about the future opportunities while continuing to maintain a balanced and risk-aware approach. Domestic institutional inflows and retail participations are increasingly balancing the external capital movements. We believe the coming years will offer significant opportunities for well-capitalized diversified financial services organization such as ours. Coming to the financial performance. First, we shall discuss stand-alone financial performance. I'm pleased to report strong growth in our stand-alone performance. For the quarter ended March 2026, revenue stood at INR 383 crores compared with INR 188 crores in corresponding quarter of last year. That shows 103% increase in the revenue. Profit after tax increased significantly to INR 75 crores as against INR 16 crores for the quarter ended March 2025. That shows increase of 368%. Earnings per share improved to INR 17.6 compared with INR 11.7 last year. For the financial year ended March 2026, revenue increased from INR 320 crores to INR 395 crores, 23% increase in the revenue. Profit after tax rose to INR 298 crores compared with INR 247 crores in financial year 2025, that shows an increase of 20%. These numbers reflect improved operational efficiency, expansion across business verticals and disciplined execution of our strategies. Now coming to the consolidated financial performance. Our consolidated results were relatively subdued compared to the stand-alone performance, primarily due to weak market conditions and fair value adjustments relating to the investment held by group companies. For the quarter ended March 2026, Total revenue increased to INR 416 crores compared with INR 239 crores last year. That is an increase of 74%. Profit after tax stood at INR 58 crores versus INR 18 crores in the corresponding quarter. That shows increase of 220%. For the financial year ended March 2026, profit after tax on a consolidated basis stood at INR 324 crores compared to INR 328 crores in financial year 2025. Total revenue marginally increased to INR 1,470 crores compared to INR 1,445 crores in the previous year. While profitability was impacted by valuation adjustments, the underlying operating business remained fundamentally strong. New initiative and future plan. Going forward, our strategic priorities remain clearly defined, continued expansion of our retail business, leveraging technology and wider market penetration across regions, exploration of overseas opportunities. To diversify revenue streams we have expanded our global presence, strengthening wealth management vertical following successful launch of PMS business, along with plans to introduce alternative investment fund to broaden investment offering, development of commodity business, which the management believes will emerge as a significant growth driver in coming years, continued emphasis on operational efficiency, risk management and digital transformation to support sustainable long-term growth and create value for the stakeholders. Key challenges. The industry continues to face certain structural constraints, high transaction costs, and compliance cost, impacting overall margins, frequent regulatory changes requiring continuous operational and system adoption and RBI restriction and tighter norms impacting funding availability for prop business activity. Despite these challenges, the company continues to remain focused on maintaining operational resilience, prudent risk management and identifying growth opportunities in evolving market conditions with strong net worth of INR 2,655 crores.

I'm sorry to interrupt. The line for Kamlesh sir has been disconnected. Please wait while we reconnect. [Technical Difficulty] Ladies and gentlemen, the line of management has been reconnected. Yes sir, you may proceed.

Yes. So we were discussing key challenges. The industry continues to face certain structural constraints, high transaction cost and compliance cost impacting overall margins, frequent regulatory changes requiring continuous operational and system adoption and RBI restriction and tighter norms impacting funding availability for proprietary business activities. Despite these challenges, the company continues to remain focused on maintaining operational resilience, prudent risk management and identifying growth opportunities in evolving market conditions. With strong net worth of INR 2,655 crores as of 31st March 2026, we are well capitalized and competitively positioned to navigate these challenges effectively. Path Forward. With our diversified and sustainable business model, strong balance sheet and experienced leadership team, we are confident of benefiting from improving geopolitical conditions and India's long-term growth story. The company is well positioned to benefit from emerging opportunities across the financial services and capital market ecosystem, while continuing to focus on sustainable value creation for all the stakeholders. Before we conclude, I would like to sincerely thank all our investors, analysts and stakeholders for their continued trust and support. Your confidence motivate us to continue strengthening our business and creating long-term value. Despite evolving market conditions, we remain focused on the disciplined growth, technological advancement and strong governance and client-centric execution. We are confident that the company is well positioned to capitalize on future opportunities in the financial sector. Thank you once again for joining us today and for your valuable time. We look forward to your continued support and association, wishing everyone a great day ahead. Now I would like to hand over to Mr. Sachin Gupta for detailed presentation. Thank you.

Thank you, Kamlesh sir, for the detailed presentation of Q4 results, stand-alone and consolidated. Good evening, everyone. First of all, I would like to thank everyone for joining for this call. As Kamlesh sir explained, overall last financial year, overall industry was in consolidating mode. And as we saw that a lot of geopolitical stress and regulatory reasons that industry is still into consolidation mode, but as Share India, we focus more on diversification and creating new streams of revenue. So I would like to highlight some of the new initiatives we have taken last year and what's the status and what we are planning for the coming year. So as we discussed in the last call, so Kamlesh sir also explained, we started -- the wealth management is one thing which we believe showing some growth in the overall scenario. We are offering new products. And we are selling the third-party products also is the core we have in mind. So in wealth management side, led by Mr. Vijender Nagpal, Charu Sehgal has joined. She will be leading the third-party product selling, and she has already started hiring the team. And the operations will start in first month of Q3. So this year, wealth management team has joined and operations will start for the wealth management as promised earlier. And this is for the third-party product distribution. And PMS, as discussed in the last call, PMS, we have started in this quarter and already PMS has crossed assets of more than INR 100 crores. And PMS is led by Mr. Vikas Singh, who is the fund manager. And the target is of FY '27 is INR 200 crores. So PMS is one thing we were looking to offer to the clients, and we are getting a very good response for the PMS from all the sectors of the clients. And it is helping us in -- the retail network is helping us in a great manner to get the AUM and the target is INR 200 crores by the end of this financial year. Already, we are sitting at INR 100 crores. So AIF is another thing that we want to offer to the client. So AIF CAT III have been applied to the SEBI. We are expecting the approval by end of Q2. And by this financial year, our goal is to start the operations of AIF. So this financial year -- by end of this financial year, wealth management team will start their operations by Q3. PMS already started, and AIF target is start the operations in this financial year. These are the 3 things on the wealth management side. And we informed in the last call that Share India has ventured into debt market. This is another thing which -- where we are focusing. And that market is growing in India these days. Demand for the NCDs and other products is really high. People want to diversify from equity to other debt products and Share India has started a new company called Share India Cred. So this company has also started the operations in Q1 FY '27. So already, we have closed 6 issues till now. And the target is to do at least INR 500 crores worth of issues by FY '27. So that market will give us very smart diversification. Operations already started. And we are hopeful with wealth and debt products, we will get that diversification and new revenue streams with us. Next thing is uTrade. As uTrade is a flagship product, and it's very tough to push the new product to the retailers, but I believe uTrade team and Share India jointly have done a great job. And in FY '26, we have crossed more than 5,000 clients for uTrade. Right now, we have 5,231 clients in uTrade. That's a big benchmark we had crossed. And going further, we believe as the awareness about the algo trading is spreading and Share India is a leader in providing the algo trading platform for the retailers, we believe that going further, uTrade will be very strong and good product. This is our USP especially. Nobody is offering this product. And it is helping a lot of retailers to trade from their offices, from their houses and work from home or whatever they are doing and helping them to create very sensitive new strategies, complex strategies. And also, we are offering some set of 20-odd strategies from the uTrade platform. So this is one product which we believe will catch up really good in the coming year and 5,000 clients is really a mark that we were looking for. So going further, we believe uTrade will also be a good revenue stream for the uTrade and Share India both. And on the retail side, which is, again, the major focus area in the last financial year was retail. So MTF book, I just want to explain that MTF book was INR 239 crores by FY '25, which has grown to INR 424 crores in FY '26. So target for MTF book is INR 650-odd crores by FY '27. So MTF is one thing which these days is in demand. And in last 1.5 months, demand for MTF has gone up. And companies like Share India who are having big network. So MTF is a natural product for us to offer to the retailers. And we believe that going further, this is a very smart diversification and MTF will give us good revenue streams in coming financial year. Especially in retail side, now I would like to inform that we have already started 6 branches in Tier 3 cities. I just want to name some cities. We started a new branch in Hyderabad, Indore, Bhopal, Varanasi, Agra, Raipur and Nagpur. All these branches are up and running. Hyderabad is one showing very good results. These are the 7 branches and 6 more branches we are targeting by end of this financial year. Now when I say these branches, these are company-owned branches where we offer not only broking services, but all the wealth products, third-party products, CMS, tech products, uTrade, MTF and everything. So we have a good product spread to offer from these branches. So our goal is to approach the maximum direct customers as much as possible in Tier 3 cities where people are still struggling to get the right MTF deals, where in Tier 1 cities, a lot of brokers are offering good deals, but in Tier 3 cities, there is still a lot of demand and there is no supply. So we believe that there is a vacuum in that particular side. And going further, all these branches will start giving us good footprint on the ground. And Share India will not stop here. In next 2 to 3 years, we'll be opening at least 30 branches on ground. And the idea is to offer all the products to the direct customers in B2C -- in Tier 3 cities. And on institutional side, again, a great work done by Mr. Kalpesh Parekh and Himani. They both are leading this particular vertical. So in institutional side, so total empanelment of different institutions have gone up from 137 to 186; it's a 35% growth overall and brokerage and other services and fee-based services are showing good results. We are hopeful that going further institutional business will also be one thing where Share India can expect good revenues. And on trading side, our goal is very simple to keeping a very strong grip on our current business, that is the cash cow. But the real growth is coming from the commodity. Last 6 months, commodity has shown very good results like because of the volatility in all the commodities like gold, silver, crude and all because of the geopolitical reasons, which have given very good returns and demand for the commodity products have gone up. Even all the retailers now want to trade in options in crude and NG. So this is also giving a bit of hope that going further commodity will be one product where prop trading and retail, both will give us good revenue. And another thing is Silverleaf. So Silverleaf merger, as last call we spoke, still in NCLT, we hope it's in last leg of the approval. So we should get in a maximum quarter time. Once that is done, then Silverleaf is one thing where we believe going further, our revenues can also be from HFT trading, and it will be another diversified stream for us. So this is the overall overview from noncore business that from trading -- nontrading side, all these efforts and new verticals we started, started showing good results. And going further, we have plans to growth in retail, PMS, wealth distribution, all these sides. So debt market, particularly Share India Cred. So all these things going further, we believe will give good revenue and diversified revenue. This will make Share India a complete financial service company. So next 3 years, our focus will be to increase our business in all these verticals. Also, as Kamlesh sir explained, expanding our footprint in international markets is another thing that we are targeting. So we are hopeful that Share India will be able to handle all the regulatory challenges, which currently we are facing and also the current geopolitical challenges we are facing, that should also be one thing that Share India will be able to absorb very smartly and come out of it. And going further, we see that the future of Indian financial market is really big, like people -- we are experiencing the change in the attitude of the retailers. We just need to offer the products, like earlier it was only mutual funds, now people are more receptive towards new ideas like PMS, AIFs, wealth management product, debt products. So the kind of product spread we have, we are hopeful that we'll be able to be benefited from the retail participation from -- at the India level. So going further, we are hopeful that Share India will do good, and we'll keep you -- keep all the investors informed as and when in the calls. And going further, we are hopeful that Share India will do good. Thank you very much.

Yes, sir. We should begin the Q&A, right?

Yes.

[Operator Instructions] The first question comes from the line of Rohan with Eternal Capital.

Congratulations on the good set of revenue. So just first question is on the margin front. So I see that the margins have fallen quite a lot. And I also understand that this might be a seasonal effect. So every March, I have seen that the margins have taken a dip. But just wanted to understand what this is exactly? And how -- is it going to be sustainable like this in every March quarter? Or how is it? And what are your thoughts on this?

Sachin sir, you want to take it? Should I start?

Abhinav, you start, I will join.

So thanks a lot for your query. I think what you're looking at it from -- purely from a margin perspective is only from a Q4 perspective. It somehow happens in that both the last 2 years, both fiscal year '25 and fiscal year '26, the Q4 has been a little rough. Prior to that, we usually used to have a better market scenario in Q4 earlier. So I think it's more prudent to look at it from an annual perspective. If you look at it from an annual perspective, as guided by us earlier, we have maintained an EBITDA of around 38% plus/minus 2% and a PAT margin of around 22% plus/minus 2%, which I think has been the broader guideline from the management from the very beginning, essentially.

So as Abhinav said, I don't think there is a certain -- any kind of certain thing that Q4 is always tough. It's not like that. Last year and this year, because of the geopolitical reasons, markets were very volatile, and because of which we were seeing certain pressure on the margins and the revenues. But I think that's some kind of scenario where we are seeing that particular volatility in Q4 only. Before last year, Q4 used to be the best quarter for the broking industry because a lot of activities by the retailers happen in Q4, like they opt for better -- more financial products and more investments and so many things. But I don't think so that this scenario will continue. Going further, the only thing in our mind is, all geopolitical, these regulatory things, this will keep on happening. This is part of our business. But to absorb all these challenges, we need to diversify as much as possible so that we don't get stuck in a certain revenue stream, so which you guys must be seeing that company is already pushing it very hard since last 2 years, and retail has started showing good results out of it and PMS and other things. So going further, our focus is to push all these products very hard for next 3 years. And also, as I said, international trading is one thing also in our mind. So our goal is to diversify as much as possible so that we can absorb any kind of challenges so the company can -- company should be able to continue with the current margins. There is nothing like Q4 type of pressure on us.

See. If you see, we have improved a lot compared to the March '25 results. The profit after tax on a standalone basis increased to INR 75 crores against INR 16 crores. Even on a consolidated basis, the profit after tax remained at INR 58 crores compared to INR 18 crores. This shows that the initiative taken by us has played good results. And going forward, we hope that things will improve both on geopolitical front and on capital market front. So let us hope for the best. Thank you.

Current participant has left the queue. We'll move on to the next question. It's from the line of Murtaza with Pinpoint X Capital.

I just have 2 short questions. Firstly, regarding uTrade, as you are planning to go multi-broker with uTrade, have we signed any broker partnerships yet? And what is the current monetization model as in the subscription per user or revenue share or some metric just to understand better.

So first part, I will answer. So as we said in last call that uTrade is planning to go multibroker. So we were in close touch with Motilal and Dhan and some other brokers. But one circular came from SEBI that earlier what used to happen, the software company were able to use the infrastructure of the broker to offer their product. So like their servers, their colocation and other things. So recently, SEBI came up with a circular where if you want to give any kind of services from a third-party vendor, then the vendor has to set up separately for every broker. So that's kind of extremely costly for uTrade at this juncture. So because Share India has also -- no broker want to set up entirely new setup for the uTrade and all the vendors. So everyone is struggling. So only Share India, which were early user and we were having the setup for the uTrade. So now we are like we are pushing uTrade for the retailers. So the third party, so multi-broker setup still is there, but it is facing some challenges because the recent circular by the SEBI. And what was your second question?

So the other question that I wanted to ask is regarding our MTF book. Like this seems to be our biggest growth lever, but it's our biggest cost driver as well. So I just want to understand at what MTF AUM level does this interest spread become meaningfully PAT accretive. I need some commentary to understand this part better.

Abhinav. Can you start, please?

Sure. So I think that would be a very kind of an unfair statement that the entire borrowing that has happened in the last year or so is for the purpose of MTF, it is just though that for the cost element, what you are looking at that the entire borrowing has been in the books for full year, while it takes some time for us to accrue the book over the period of time. So of course, whatever borrowings that you see in the end of fiscal year '26 would contribute completely for the full year fiscal year '27. So that's number one. Number two, the strategy in order to devise a higher margin from the MTF book would be 2 ways. One, we are constantly working in new interest -- new borrowing models, which can be in terms of NCD or in terms of any other borrowing from third parties. Of course, as we more mature into that space going forward, the interest cost for each and every element will continue to come down, and we see significant margins accruing to that effect in this year, fiscal year '27, at least from the borrowings, which could be in a very a few hundred basis points. And we continue to leverage our presence, as the management said, by opening more branches to grow more robust and continue to grow at a higher rate than what we have currently been doing with the vision to get it to INR 650-odd crores by the fiscal year '28.

I want to add something here on the strategy side. So as you rightly said, what is the strategy? So strategy is very simple, to bring the cost down. So for that, we are constantly approaching the different NBFCs, as Abhinav explained rightly. And on the -- to increase the revenue, what we are doing, right now, the major book is through subbrokers, correct, or through mediators. So what we are doing, we are opening direct branches in Tier 3 cities. So when we are funding a client in Delhi, Mumbai, Kolkata, in metro cities, their client is not ready to -- because there is so much supply, client is not ready to pay higher interest. So there, we are more dependent on the churning from the client, right? But in Tier 3 cities, the competition is less and interest rates charged by the sub-brokers are much higher. If you open a direct branch in Tier 3 cities, there you can directly contact the client, remove the mediator and you can charge better interest than in the metros. So that's why we formulated a strategy to open the direct branches in Tier 3 cities where we see MTF demand is much high. Like Kolkata, we opened 2 years back, amazing work done by Kolkata. But yes, there is a challenge of interest rate. But Hyderabad, we started better than Kolkata; Agra, interest rate again higher. Raipur, interest rate was moderate. So likewise, when you go into smaller cities, so you remove the mediators and you directly get in touch with the customers, so your margin goes up. So going further, that's why we have opened -- we decided to open direct branches in the Tier 3 cities. So this is the strategy we are going to adopt for a better NIM in MTF book.

The next question comes from the line of Abhijeet Sakhare with Kotak Securities.

Sir, my first question is that when I look at the broking and trading revenues for the fourth quarter, close to INR 400 crores, if you can break it up between what would be pure brokerage versus, let's say, prop trading income?

Sure. So I'll start with it. Sachin, sir, you can add on to it. So currently, the prop income for full year contributes -- so I'll answer this question in 2 ways; one is looking at it from a revenue perspective and one from a profitability perspective. From a revenue perspective, prop income contributes around 70% of the revenue. But from a profitability perspective, the usual number that it currently is around 50%. So in fiscal year '26, the entire contribution from prop business is for 49%, and that is on a consolidated basis. On a stand-alone basis, that number was around 52%.

I also want to add one thing. So that's very important information. So because of all the efforts done in the last 2 years, especially with the high net worth individuals who are very -- who are looking for algo trading and deploy their funds using sophisticated strategies and algos, so Share India got good penetration and good reputation in that sense, and we are getting good clients. So what has happened, first time, our client turnover is consistently more than 53% and 47% is in proprietary. So that means clients business have taken over by the -- from the prop business. So this has happened first time. So we believe going further, this will further improve. This should go to 60% by end of this financial year. So that will bring more service-based income to the company. And these numbers what Abhinav explained, will keep on improving. And further, our focus is to increase the client base and service business. We believe that these numbers will be much better in coming years.

Got it, sir. Sir, my second question is that similarly, when I look at the ADTO, is it possible to share what would be, let's say, the contribution of options product in that number? I think for the fourth quarter, the number is about INR 109 billion.

Correct. Yes. So your query is on the options for the entire quarter essentially. So options contributed for Q4 around 18% of that number.

Abhinav. Can you explain what is the difference between ADT of last quarter and this quarter? Last FY '25, Q4 and Q4 FY '26?

Okay. So from a Q4 to Q4 perspective, we have seen a significant jump and the major contribution has been due to the commodities. That year, we did around INR 14 billion kind of an ADTO, which has increased to around INR 4,500 to INR 5,000 approximately in Q4. That has been the major increment. Along with it, there has been a slight drop in terms of the future turnover and the option turnover, which option turnover and future turnover we have sort of been able to manage in the times of the regulatory headwinds. Along with it, we have also seen a very significant increase in the cash ADTO as well, which used to be around INR 1,400 or INR 1,500 in Q4, which has now increased to around INR 2,000 for Q4 fiscal year '26.

Okay. Got it, sir. And then finally, any thoughts on what are your views on the RBI, the impact of RBI regulations for the prop side of the business?

Kamlesh sir, can you add?

We are making presentation to RBI. We have already done 2, 3 meetings with RBI. And we have explained in detail why prop desk turnover is necessary. We are basically liquidity provider. So that is very crucial for the market that we continue to have the similar facility that is given to the central part. So for liquidity provider purpose, we are seeking relief under market making or the liquidity provider category with the Reserve Bank of India. We have several meetings with SEBI also on this matter. And SEBI is comfortable. They need a framework for the market making because currently market making is permitted only for illiquid stocks, whereas F&O and liquid stocks do not cover the market-making definition. So we are working and it will take 3, 4 months for SEBI to come out with the solution or the framework and this is actively taken with the Reserve Bank of India. We are hopeful that they would consider. Otherwise, situation will go back to the market like Korea, where everything is drag up and even today, they have not been able to recover. So liquidity provider is very important for the market. In the morning, if someone wants to sell 10 lakh shares of Reliance, they won't find matching bids. So it is only the liquidity provider which gives multiple platforms where they can provide quote in options in futures, in cash market everywhere. So that is how we are taking up the matter with the regulator. Thank you.

But I want to add one thing. What will be the impact on Share India? I tell you, we are in constant touch with the banks, all the banks possible. So we have been classified as a hybrid broker where we qualify for the bank guarantees for the client purpose. And as I said, our turnover is already -- client turnover is exceeding the prop turnover and a constant increase in the client business. So banks are extending bank guarantees for the client business, which will help us a lot. So intraday limits are gone, that's fair. But we believe we'll be able to manage business with the bank guarantees. And so there will be around 20% impact on the overall deposit and limit used by us. But at the bottom line level, we believe impact will not be much because we also believe because so much liquidity will be taken out from the market. So per trade margin will improve. And 20% is not such a big number. So we are hopeful that we'll be able to continue with the same numbers and going further, there will be no materialistic impact on Share India's bottom line. So right now, because of our retail business, we are -- banks are helping us and extending limits -- all banks are extending limits to Share India in terms of bank guarantee. So only impact will be intraday, but we are converting intraday limits also to the bank guarantee. So we are hopeful that we'll be able to manage these crisis.

As Sachinji has already told, on clientele business, there will be no impact because we'll continue to get bank guarantee for the clientele work. And on prop side, we have net worth of INR 2,655 crores on a consolidated basis. So that will also help to achieve our targets in the prop desk side. Thank you.

Sorry to interrupt. Mr. Abhijeet, I would request you to please come back in the queue for further questions. The next question comes from the line of Sanjeev Pandiya with Lancers Impex Private Limited. Please go ahead.

Sir, you talked about some funding constraints from the RBI for your prop book, some emerging constraints that are coming up for prop books. Could you give us some color on that because SEBI also, I thought was -- has mentioned, I don't know whether there's a circular on putting a cap on prop book sizes after the Jane Street scandal?

Kamlesh sir, you want to start?

Yes. There is nothing like that. There is no such cap. In fact, SEBI is with us on this particular issue that the liquidity has to be maintained. And for that, as I mentioned earlier, they are trying to come out with a framework for liquidity provider. So I don't think there is any such circular which restricts prop desk. And I think we are well positioned in the market compared to our competition for achieving goal on both these sides on clientele front as well as on prop desk front.

And RBI constraint?

Yes. So as I said, there is no such circular from the SEBI side to limit the prop business. So nobody can -- if you have money, you can trade. Nobody can stop. But on RBI side, RBI has category -- the 2 main issues that RBI has brought is that no bank limit should be extended for the prop trading. It should only be for the client-based trading because Share India is a hybrid model where we have planted and prop both. So intraday limits are gone from the system so that RBI has disallowed the bank to provide any intraday limits. That's fair. But RBI has allowed the banks to extend the bank guarantees for the client-based business. As we have a sizable client-based business, so we have been classified as a one hybrid broker and banks are already extending bank guarantees to us and all bank guarantees will be renewed rather than new bank guarantees have been offered, and we are already opting for that. So we will convert some intraday limits into the bank guarantees. So that will minimize the impact of the RBI circular. So RBI circular majorly impacting Share India is only intraday facilities, which part of which we are converting into the bank guarantees. So hardly 20% impact in the overall limit will be there from the prop side. But on the bottom line side, I don't think there will be a much impact or there will be any impact because margins per trade margin will improve. So RBI -- this is about the RBI circular.

The next question comes from the line of Urmish Shah with Moneywisers.

Sir, my first question is on the revenue split when we are saying that we will diversify into new initiatives. And so what change in the revenue split can we expect in the next 3 years once the new initiatives kick in and do well for us?

Can you please start?

Yes. So essentially, how we do classify it is that the entire broking piece is calculated together, right? So even if, let's say, for all the diversification, whether that be wealth management or distribution business or whether that -- for that matter, be that MTF, all of it would combine into the share broking business. So whatever drop we see in prop business, essentially a majority of that chunk will get into the share broking business. Internally, share broking business diversification is a number that we don't share. Of course, as we go along, there would be other divisions, which are segregated separately, which are namely NBFC, merchant banking, insurance and technology, which together in fiscal year '26 combined around 7% of the bottom line. Of course, that percentage should also increase. But the majority of the increment will go into the share broking business as a whole.

Can you quantify that increase or...

We can give the ballpark figure, but exactly quantifying the future diversification is...

Yes, I'm just asking for a ballpark figure, sir. I'm just asking for a ballpark figure.

I'll tell you, as Abhinav has explained earlier that right now, we have 52% on the bottom line side and rest is from the -- our allied services, including on the consolidated basis. So as I explained just now that first time we have crossed more than 50%. Consistently, we are doing more than 50% turnover by the client. So what we believe going further, clients turnover will be more than 60% -- at least will to 60% by the end of this financial year and prop turnover will be 40%. And the target of this financial year is at least bottom line side because on revenue side, it's very difficult to comment. Bottom line side, net profit from the client business should be more than 50% or 55% and 45% from the prop side. And because as you said, as for the 3 years, so I tell you one thing, where we are using our capital. We are using our capital on expanding our client business, like MTF book, where we are using our capital, like opening new branches, extending new facilities to the clients. So this is what we are pushing from our side. So because -- prop business is consolidating because of so many regulations and so many changes in the total regulatory system. But client side has consolidated a bit, but now showing some growth in recent past. So we believe going for the next 3 years, Share India, our wish, our goal is 70% business is from clients in the next 3 years and 30% from prop. This is what we are wishing because entire capital and efforts have been put towards increasing our retail business.

Yes, just to add -- just to clarify, 52% of the profitability is on the stand-alone basis. On the consolidated basis, it's 49% already. As Sachin sir said, the goal is to take the prop to around 30% in the next 3 years essentially in terms of profitability.

Sir, next question on the MTF business. I know you explained it before in the previous question also. But when you say that MTF target is around INR 650 crores for FY '27, have I got that figure right?

Yes, yes, perfect.

Yes. So if that is the target and obviously, if this geopolitical situation and this volatility plays out, have you factored that in?

No, we cannot. We don't know. See, we don't know that. See MTF growth is entirely dependent on the market performance. As in last quarter, there was no demand in MTF. And -- but since Q1 of this financial year, again, the market are showing upside and demand. Recent article in newspaper was demand for MTF has gone up again. So MTF definitely depends on the market performance and whatever the reasons -- external reasons are. If market is performing good, demand for MTF goes up. So what we are considering because when we are saying INR 650 crores, our consideration is very simple that outside scenario remains normal and market remains good. If the market remains normal or showing -- so India is one market which has not performed the last year. If you compare to any Asian market, India is the worst performer. So believe this year, geopolitical was stabilized and markets are normal. So my understanding is the kind of network we are having now on ground, demand is high. And there, we believe another INR 200 -- adding INR 200 crores AUM in MTF is not tough. But we cannot assure that as there is a caveat that it depends on the market performance overall. My assessment is only about the kind of network we are spreading. From there, INR 200 crores is not a tough target. We hope we'll achieve it if market -- other things remain normal.

Also I would just -- yes, also, I would like to add. So as Sachin sir already said that this business has some sort of cyclicity attached to it. But we take a lot of pride in the fact that within the Q4, while the market was extremely volatile, so we closed December number at INR 457 crores kind of MTF, which only reduced to INR 424 crores. In the absolute scenario where there was a lot of volatility, the MTF book has not seen a drop of...

Yes, it has stabilized, yes, sir.

Yes. So it has stabilized. So that gives us a lot of comfort in the fact that the kind of network that we have created. And we are sure that even with the cyclicity, the deviation will not be of a very significant nature in numbers. That's number one. Number two, even at a INR 650-odd crores kind of a book, we are not targeting a very significant market share when it comes to the entire only MTF book that is available in India. I think even if we continue to maintain the same kind of market share that we currently do, even then by the virtue of the growth of the retail participation that is happening and the leverage that is happening in the system, we should be able to achieve these kind of numbers what have been stated. Of course, in case there is a drop in the market sentiment, there might be some sort of low single-digit kind of a deviation over there. And third, the network that we are building, as explained by the virtue of hub-and-spoke branches, the wealth management branches, we are absolutely confident that the branch has far much more capacity to absorb that kind of book. Whether that we achieve within -- by the end of this fiscal year or might deviate by a quarter or 2, that depends on market scenarios essentially.

Sir, one question on the NBFC front. Our NIM at 17.64% for FY '26, and it was almost equal to FY '25. So what is the hurdle that we are facing that the NIMs cannot go back to FY '24, FY '23 levels? If you could just give some color on that?

No, see, absolute -- to be honest, speaking NIM is sort of a number that has to be looked in its entirety because at 17% NIM is mostly because we have not taken too much of a leverage. This is a business that we don't see it in terms of NIM specifically because most of the capital that is used for loan disbursement is secured internally from the net worth of that NBFC. So essentially, from a NIM purpose, as we go more secure in nature, we lend towards more secured lending. I only believe that the NIMs will go down while we grow the book essentially in that sense.

Sir, one data point, could you give some color on the average revenue per branch, if that is possible?

Okay. This is a subjective thing because average revenue for every branch depends on the location. Like if you have a branch in Calcutta, revenues can be much, much higher. But if you have a branch in Patna, then you cannot match the revenues, very simple. So the issue is -- so you cannot span it branch and branch basis, what the target is. So target for the Tier 3, every branch has to do at least 10 crore to INR 15 crore MTF in a year, every branch, correct? So let us suppose if we have 30 branches on the ground. So INR 300 crores to INR 500 crores is we are expecting in a year from these branches, correct? So what is happening once you go through Tier 3 cities, your ticket size drops, your risk got spreaded and your margins are better, correct? So what branches will do? So every branch has their own niche on demand, like some branches in Indore, they might do very good business in unlisted market trading or they do good on debt side, but maybe branch in Calcutta, they are doing very good on algo side. So I tell you, Calcutta is a very, very big market. People are doing a lot of options trading. But till now, even with large deep pockets, people are not exposed to algo trading at all. So their algo -- so their Share India is having -- getting good response from the clients. And there, we are only focusing on providing algo trading facility to all these traders. There we are not pushing MTF, not pushing all these products, correct? Because they are hard for equity traders. So every area, you need to understand the geography, you need to understand the demand of that area. And according to that, you need to push the products.

I get that, sir.

Yes.

So to be honest, it's not a metric that we look at it from that perspective, at least from a KPI perspective of our retail team.

Okay. No, I get that, sir. I was just asking why because as you said, Calcutta is a huge market. And just as you showed the example of Patna, Patna obviously won't generate that kind of revenue. So if in the future presentations, that as a suggestion, if you could just incorporate these numbers while at least if region-wise or like if that is possible...

We'll do. For the confidence of the investors, we'll do. Sir, I just want to comment that since last 2 years, we are already commenting on uTrade, we are commenting on retail business, MTF, so many things. But you all can relate that slowly and gradually, we are implementing everything. Like since 2 years, we are doing a lot of efforts with uTrade. First time, uTrade cross 5,000 clients. That's a big achievement for us. It is still not a big number in terms of revenue. Right now, revenue is not the focus. The focus is participation by the retailers in Algo trading. So that there, we have a lead, correct? Why not -- why we are definitely thinking that it can be -- in next 5 years, it can be Zerodha movement for Algo trading for retail. There Share India can take the lead, correct? So we are implementing each and everything slowly and gradually, like wealth management, like PMS, everything. So we particularly believe that we just want to ensure to the investors that our focus is diversified revenues, risk-averted business and catering to the retail side, maybe directly or through the mediators. So point well taken, Abhinav, please note down. We can also give you the better presentation about the different branches and the business they are doing.

The next question comes from the line of Abhijeet Sakhare with Kotak Securities.

Sir, I just wanted to double check the number that you mentioned earlier. Because of this RBI regulation if it goes through, I think the date when it becomes effective is July 1, you are anticipating around 20%, 30% sort of an impact on the prop side of the business.

No, no, I think I'll be very clear. So number one, the number that has been stated in this call is around 20%, that is the number that is -- we are seeing a drop in margin essentially because of that and not the business. As we said, because the margin impact will impact the entire industry, we believe the margin per trade would have a better revenue. So it's like the unit economics will take a different curve. And hence, the impact would be -- remains to be seen, but we anticipate to be much lower than that.

Yes, you mentioned the spreads will widen, so the revenue impact could be lower than that. Sir...

We are expecting, sir, around INR 40,000 crores to INR 50,000 crores worth of capital will be taken out from the market. So that will definitely improve the per trade margin.

Got it, sir. And sir, you mentioned about the market maker regime. Sir, in your view, if indeed we have a new regime introduced by SEBI, do you believe that will offset the impact that comes from the RBI regulation? I'm not clear as to how the market maker regime will offset the impact of the RBI regulations. So my next question was you mentioned about a market maker potential.

I will explain. Kamlesh sir will join. I will explain. So as you said, what will be the impact of -- or whether there will be any impact of such regime. So I'll tell you the difference. So RBI as I said, bank guarantees can be extended to the market makers for the market making activity. So what industry is saying, people who are doing prop trading, especially arbitrage strategies, we are acting as a liquidity provider for the market. right? So rather than using market making, it should be liquidity providers. So people who are providing liquidity into the market, they should not be discouraged from the trading. Once they are discouraged, then the impact cost will be much wider and liquidity will be tough in the market. So what industry is presenting to the RBI that rather than market makers, because there is not as such market makers in India market, you allow the liquidity providers to get the bank guarantee from the bank. What will be the impact? So impact will be people who are doing purely prop and doing arbitrage strategies, they will be able to access the bank guarantee for the business. For them, the impact will be much -- rather impact will be nothing for them, right? Share India is a hybrid model, right? But the brokers who are not hybrid, they are only doing prop, but arbitrage strategies, they should be allowed to take the bank guarantee. The reason is that if the risk 50% is collateral given by the broker for the bank guarantee. And if the risk is less than 50%, why not they should be allowed to get the bank guarantees, that's the whole argument. So once that is done, so the RBI supply impact will be much lesser, and liquidity will be good in the market, unless there will be a challenge of higher impact cost and liquidity in the market. That's the whole concern. But as far as Share India is concerned, Share India has already been classified as a hybrid broker. So there will be no impact of that particular thing on us.

Yes, second thing we have to keep in mind that the existing bank guarantee will continue, I mean, until the expiry. So irrespective of that, the bank guarantee, which we have up to 30th of June would be permitted to continue. So there will be a lesser impact on this year's performance. And let us keep our fingers crossed on the RBI issue. And probably when the next investor presentation happens after the June result, we'll have clarity on the entire issue.

Understood. Sir, one final clarification. Is it a possibility that you're able to renew the bank guarantees before the deadline and then you can continue to use that even though the regulation becomes effective?

Absolutely. I mean that has been submitted and it is all official. So there is absolutely nothing to worry. In fact, as Sachinji has rightly said, we are converting intraday facility into bank guarantees. So the -- our efforts are towards that, that the minimum impact should be there on the -- on this particular front. And with the net worth -- kind of net worth, see, we are better placed than the competition. So we should be able to do. And as I told you, the bank guarantee would be allowed till the expiry. So by up to March 2027, there will be minimum impact.

Ladies and gentlemen, that was the last question for today. I now hand the conference call over to the management for closing remarks.

Sachin, would you like to elaborate something on the Metropolitan Stock Exchange?

So yes, sir, why not? So we have a sizable investment in MSCI as we have invested in the 2 rounds. So MSCI has launched their cash market recently, and it is already up and running. So they are consistently doing more than INR 300 crores to INR 400 crores volume on cash market side on a daily basis. So that's one big thing from the exchange perspective and from our investment perspective. Going further, MSCI has planned to launch their IPO side where all the companies who are getting listed, they will be listed parallelly on MSCI that will give them one more push in the turnover. Also, they will -- they are planning to start their SME segment. So SME companies who are engaging with NSE and BSE, there will be one more exchange who will be allowing SME companies to get listed on their platform. So MSCI is one thing. And also, they are having plans to -- if they get all the regulatory approvals. So they are planning to launch their derivative segment in FY '27 only. So if they go as per they are planning, so we believe MSCI will -- can give us very good returns going further. We are very hopeful the way exchange has planned their future. So that is very bright. And going further, Share India will be one of the beneficiary party from this particular investment.

So that's -- Sachin sir, anything more to add or...

No, I think I'm done. So Kamlesh sir can conclude.

No, no, that's it. I mean we wanted to highlight a new opportunity and new exchange, whereby we get different products. Even on unlisted space, there is a lot of activity, and we look forward to actively play a role in the unlisted segment also. So we are exploring all the new possibilities to see that we have diversified and sustainable business model. Thank you.

So on behalf of Share India, thanks a lot to all the participants. Operator, you now may take over here.

Thank you, sir. On behalf of Share India Securities Limited, that concludes this conference. Thank you for joining.

Thank you, everyone.