SMC Global Securities Limited (SMCGLOBAL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Q1F527 Earnings Conference Call of SMC Global Securities Limited, hosted by XP4 Advisory. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gautam Kothari from XP4EDYC. Thank you, and over to you, Mr. Kothari. Thank you.

Good evening, everyone, and thank you for joining us on the Q1FI27 Earnings Conference for All Occupancy Global Securities Limited. Joining us today on the call are Mr. Subhashjand Agarwal, Chairman and Managing Director, SMC Group, Mr. Mahit Sri Gupta, Vice Chairman and Managing Director, SMC Group, Dr. D.K. Agarwal, Chairman and Managing Director, SMC Capital, Mr. Ajay Ghar, Director and CEO, SMC Global Security Limited. Mr. Anurad Bansan, full-time director, SMC Global. Mr. Himanshal Gupta, director and CEO of Moneywise Financial Services Limited. Mr. Shruti Agarwal, full-time director, SMC Global Securities Limited. Mr. Pranay Agarwal, director and CEO, Chalks Kat. Mr. Rohit Nair, Group CFO. Before we begin, please note that today's discussion may include forward-looking statements. which reflects the company's current views and expectations. These statements are subject to risk and uncertainty, and actual results will differ materially. A detailed statement is provided on the second-last page of the earnings presentation, which is available on the stock exchange and the company's website as well. With that, I now invite Mr. Subhash Agarwal to share his opening remarks. Over to you, sir.

Thank you, Mr. Gotam Kathari. Good evening, everyone, and warm welcome to the call. Thank you. Thank you. Thank you. Indian equity markets remain roguely resilient despite Thank you. Tenancing market integrity and industrial production. Thank you. Both life and low life. Yes, around financial protection. Health and Retail Institute. The industry also continues to benefit from the long term. Thank you. With respect to the financing and NBFC segment, the operating environment during Q1 FY27 remained stable. Thank you. Thank you. The industry also continues to witness a preference for store lending segments with asset quality trends remaining broadly stable. We believe well-capitalized institutions with diversified lending portfolios and strong risk management policy. Thank you. The operating environment continues to evolve across our business. Thank you. Q1 FY27, our consolidated operational income stood at Rs. 515.1 crores, representing a YOY growth of 21.2 percent, abhita for the quarter VAT, Rs. 10. Thank you. Thank you. Business continues to scale with Cumulative Mutual Fund ABM reaching to Rs. 4,787 crore. 2,129 active SIPs. Get a point, got it. It's true that you beat. F.Y. Witness a constructive operating environment across Our diversified business model and continued investments in technology and risk management enabled us. Thank you.

And a very good evening to everyone on the call. Thanks. I'll take you through our financial and operational performance briefly, as details have already been covered by our chairman, sir. For the current quarter, ended June 26, our consolidated operational income stood at 515.1 crores, representing a YOY growth of 21.2%. EBITDA for the quarter was 107 crores, up 6.9% YOY, with an EBITDA margin of 20.9%. Profit after tax came in at 36.7 crores, as against 30 crores in Q1 FY26, representing a healthy 22% growth YOY. On a standalone basis, Q1 FY27 operational income stood at 273.4 crores, up 11.1% YOY, with an EBITDA of 71.5 crores at a margin of 26.4 crores. 100 basis points. Pat for the quarter was 25.1 crores. We can now turn to the segment-wise performance. We have three segments. In this segment, Q1 FY27 revenue grew 15.1%. It's rising by 17.6% by OI. Healthy revenue growth was supported by its payable market activity, which sustained client engagement across our core businesses, while the improvement in EBIT... Thank you. In the financing NBFC segment, Q1 FY27 revenues would act $46,000. A bit of 20. Moderated financial performance reflects our calibrated approach to growth amidst an evolving operating environment. Our strong capital position, predominantly secured loan portfolio, healthy collection efficiency, Thank you. Thank you. A solid foundation for sustainable long-term growth. The quarter also witnessed continued progress across our key operating metrics. The assets under advice in our broking business increased to... Thank you. Thank you. ...diversified business model, the resilience of our customer franchise, and our disciplined approach to execution. We remain focused on enhancing operational efficiency, strengthening our digital capabilities, deepening customer engagement... Across our business business.

We continue to support We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Once again, a reminder to all the participants that you may press star and 1 to ask a question. The first question comes from the line of Manish Bhandari with Quantum Shares Private Limited. Please go ahead.

Hello, I'm Ardwin. Thank you so much for the opportunity, firstly. My first question is that the previous guidance has suggested approximately 25% growth in NBSC AUM. So, could you please elaborate on the reasons for the variance between the expected and actual performance, and by what time can we expect it to materialize?

Hi, Manish. Very good afternoon. I am Anshu Bhukta, Director and CEO of Moneywise Financial Services. The AUM that we chose at 1,025 crores for the new quarter versus 1,118 crores for the quarter ended March 31, 2026. So there is a slight decline in the AUM. However, we are working on the product strategy that I... Thank you. The product that we had tightened was on Sikmo Business School. So, these are the two products which are pulling down the EUM growth. However, for the full year, we still have to close the chosen EUM at about... Thank you.

What is the next five-year target for AUM growth and how fast this growth can be achieved?

So, we, our aim is to, you know, increase at a year of about...

Understood. And just one more follow-up question from my side that within the AU on which Loan category is performing well?

That's what I was coming to. So, you know, with the, you know, change in the product focus, now gradually the book is shifted. Even at the end of quarter end. And even year on year...

Sorry for interrupting. Speaker, we cannot hear you. Can you come a little closer and talk?

We are saying that apart from, you know, the increase in fixed load lending, our yields and margins are also going up.

So, just one more question from my side, that the insurance broking was the fastest-growing business during Q1, right? So, what are the key factors driving this strong performance?

Hi, Manish. Thank you for your question. This is Sakshi Mehta, CFO at SMC Insurance. So, basically, general... Non-life insurance was the major factor for the Y&Y growth. So non-life insurance is a major factor for the strong growth in SMT shop. Okay.

Okay. Got it. Understood. Thank you. I still have a few more questions, but I'll reach in the queue later. Thank you.

Thank you. A reminder to all the participants that you may press star and want to ask a question. Once again, a reminder to all the participants that you may press star and want to ask a question. Next question comes from the line of Aditya Dhar with Gab Investments. Please go ahead.

Hello. Am I audible?

Yes, you are audible.

Thank you for the opportunity. Just had a couple of questions. So, regarding our broking revenue business, so we saw a steady growth during the Q1 FY27, despite a moderated derivative environment. What were the key drivers for the growth during the quarter?

Yeah. Hi, this is Ajay Dhar, Director, CEO of S&C Global. So, basically, this quarter one has been a bit better. Nifty and Sensex grew almost 6 to 7 percent. And though SPI sold around 1.5 lakh crore, but DII was more than 2 lakh crore. So, and geopolitical crisis... Have been settling down. So, again, the U.S.-Iran issue raised, but during the quarter, the crude price has gone down, and we have seen that increase in the cash market business. So, delivery-based business, MTF, our MTF book has increased from 760 crore to more than 900 crore, MTF and T-plus size book. And the cash market, brokerage percentage. The call has increased from 45% to 55%, and we have seen some reduction into derivatives revenue. So, I think there is a segmental shift from derivatives to cash market, and people are holding the stocks and bullish about the Indian economy, and in time to come, the Indian... The actors are very, very strong, and because of geopolitical crisis and crude crisis, some industries are there. Might be much better.

We saw that it also grew during the quarter. So, what are the basic reasons or the initiatives which the company took for the expansion of our wealth management and the distribution business?

Hi, this is Anurag Barsal. As far as distribution business is concerned, we have renewed our strategic focus on mutual fund distribution with the objective of accelerating AEM growth. Key initiatives undertaken include enhanced product training for employees and distributors, investor awareness initiatives, and extensive adoption of our digital distribution platform that is Easy Invest. And these efforts have yielded encouraging results. Our mutual fund, AEM, grew from 4,294 crores as on March 26 to 4,787 crores as on 30 June, representing a growth of approximately 11.5%. While a portion of this group... By net mobilization resulting from our focus. Supporting Sustainable Group. We increase our focus on HNIs and family offices, and tie-ups with the quality third-party manufacturers is the priority. Anybody would like to add?

I think that's it.

Thank you.

Thank you so much for the answer, sir. I have two questions regarding the insurance business as well. Sir, regarding visa and revenue growth, which remains strong for our insurance business, but EBIT moderated during this quarter. Could you elaborate on the investment banking, investments being made in technology, people, and distribution, and when you expect the operational leverage to improve?

Hi, thank you for your question. This is Sakshi. So, basically, we are primarily investing in manpower, wherein corporate and life insurance is manpower, cost is increasing. And we expect the operating leverage in the future quarters, wherein results are slow.

Thank you. And the last question, basically, if you could just help me understand, the gross premium reached around 760 gross approximately during the quarter. Which product segments in the insurance business basically and the customer categories contributed the most to the growth?

The major segment is non-life insurance, which contributes approximately 90% of the total premium.

Okay. Thank you so much.

Thank you.

Thank you. A reminder to all the participants that you may press star and want to ask a question. Once again, a reminder to all the participants that you may press star and want to ask a question. Next question comes from the line of Yes Chaudhary from Investor. Please go ahead.

Sir, I would like to understand, like, what is the future outlook of the company for next five years? Not this year or next year, but for next five years, where do you see the company and what are the growth outlooks?

Mr. Yes, future outlook, since our country, India, is very bright, we are growing at 7% per annum, GST. And even when a company is growing, the most beneficiary is the main financial industry. And even within the financial industry, capital market future is very, very great. And among the country market industry, we are one of the leading players, and we are having all the segment under country market. SMC is a good brand, and we have more than 4,000 employees. We have present in more than around 400 cities. We have a good network, 200 branches. We are having all the membership in all stock exchange clearing members. So we are having a very great future, and we are growing at a CSGR of 20% year to year. And we will further grow better than this. We are quite hopeful in five-year time, SMC will have very bright chances to grow. We are putting all good efforts in growing our company.

Thank you. But internally, I would like to understand, internally, have you guys set any particular target that you want to reach in quantitative-wise also, that you want to reach X amount of revenue in the next five years or so?

You see, currently, our revenue is around more than 2,000 crores. So, we grow 20%. So, we will have revenue in five-year time around 6,000 to 8,000 crores. Last year, it is 103 crore. We are expecting 170 crore.

Nice, nice. Thank you so much. Thank you so much.

Thank you. A reminder to all the participants that you may press star and want to ask a question. Next question comes from the line of Manish Mandali with QuantumShares Private Limited. Please go ahead.

Yeah, hello. Thank you for the opportunity once again. What I wanted to ask is that a few of our peers are developing, you know, AI-enabled automation models within their app and their digital ecosystem, their website, etc. So, do we also have plans for the same? Since I noticed that in our presentation, we are working towards something similar like investments in AI. That's what was mentioned. So, could you throw some light on it?

Yeah, hi. Hi, I'm Shruti, and I'm leading the technology. So, see, what we have done over the last six months is we have created a complete base of our AI enablement that we expect in future to come. And there are a few AI-based initiatives that we have already launched within the app. Our speaker, sir.

Sorry for interrupting your voices, breaking, sinking in between. Can you come a little closer to the mic and speak? Thank you.

Am I audible now?

Yes, please go ahead.

Thank you. Thank you. and that will give script analysis, comparing scripts, you know, trend on the... And we will be launching these videos.

Thank you, thank you. So, one more question from my side. From an investor's perspective, I'm asking that how should we look at SMC over the next three to five years? While the broking and trading and distribution, insurance broking, all these businesses are witnessing a healthy growth, the NBFC business has remained under pressure. So what are the, you know, key co-drivers that investors should focus on and what is team management's broader strategy to enhance the company's overall consolidated performance and, you know, create long-term shareholder value?

Yeah, basically, as of today, technology, we are investing a lot of money on technology, AI, and automation, our whole infrastructure, and so, secondly, you can say user-friendly products and user-friendly apps. So, we are developing all this, and... Chargers are also considering the main market. We are very competitive. And we are working hard for achieving all this. So we will, SMC is having very good.

Understood, sir. Thank you so much.

A reminder to all the participants that you may press star and want to ask a question. Once again, a reminder to all the participants that you may press star and want to ask a question. Next question comes from the line of Aditya Dhar with Cab Investments. Please cover.

Hello. Thanks again for the opportunity. I had just a question regarding the StocksCarts performance. So, could you just give us an update regarding the StocksCarts performance and how is the platform basically contributing towards the customer acquisition, engagement, and overall broking revenue?

Hi, this is Premier Rewal. So, just to answer your question, last five quarters were really good for us. In terms of revenue, we managed to quadruple our revenue year on year. If you compare Q1 2025 to Q1 2026, so it contributed around 20 crores. In Q1, in 2026, we contributed 20 crores in terms of revenue. As number of clients, so we opened around 26,000 clients in the quarter, and these were all subscription clients. So we have a plan called Smart Trader Plan, which is really working well for us, and these clients are paying us an upfront subscription for the trading software, and are subsequently trading on our software. So, this model is very new to the industry, and this is kind of mimicking the subscription culture which has, you know, which has really taken up in our country. So, we are really hopeful that it will be a really sizable business going forward and will contribute tremendously to S&P's overall revenues.

Understood. Sir, regarding our distribution footprint, basically it continues to expand on quarter-on-quarter basis. So, what opportunities do you see for increasing the cross-selling across the broking wealth management and insurance and the financial products?

See, we are continuously working on improving our cross-selling across businesses as well as products. To begin with, and to take benefit, we have integrated some of the products on our broking mobile app, for example, mutual fund, and other products are also being integrated. Those are in pipeline, and as they get integrated, we are very hopeful that this will further unlock the true potential of cross-selling within our network in time to come. That's it. Thank you.

Understood. So, sir, just a question regarding the NBFC business. So, we are basically seeing that interest rate environment is currently a bit volatile. How do you expect the funding cost and net interest margins to trend over the remainder of FI20, sir?

Yeah, hi, Himanshu Gupta here. So, regarding the interest rate, so basically, you know, in the current quarter, We had a reduction in our rated cost of fund by around 25 basis points. The effect is coming came even on the existing borrowings that we had already taken, wherein the annual reset was due, and the cash borrowings that we took were also at a lower rate. So, in all, we had a reduction of 25 basis points on the borrowing cost. And as far as the NIM is concerned, so we are, you know, increasing the blended yield of our AUM by, you know, focusing on high-yielding retail products. So overall, we expect the NIM to grow gradually over the coming years.

And last question, sir. Looking ahead, what are the key strategic priorities for the remainder of FY27? And with business article, do you expect to be the primary growth driver for the company?

Yeah, you see, we have three segments. First, our booking, distribution and trading. Second, insurance. Third, NBFC, broadly. And we have other businesses also, as an investment banking and other products. So, we are expanding in all products, and moreover, we are... We are very optimistic about our gift city businesses. This is expanding, so in years to come, gift city is having good prospects, and we are a major player in gift city. Secondly, as I told you earlier, we are investing in technology, and we are improving our technology very well, and we are using artificial intelligence. Thank you. I have the small case and our research base. I'm going to do it, and welcome to the call, and welcome to the call, and welcome to the Broking, discount brokerage arm of our SMC is doing extremely well. They are adding good clients every month, and their revenue is increasing this year. Thank you very much.

Thank you so much, sir, and all the best for the future, sir.

Thank you. A reminder to all the participants that you may press star and want to ask a question. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I now hand the conference over to Mr. Mahesh C. Gupta for closing comments.

Thank you for joining us today. We trust this session has helped address your questions and provide clarity on our performance for the quarter. For any additional information or follow-ups, please feel free to reach out to our investor relations partners at XB4 Advisory. We appreciate your continued engagement and look forward to connecting with you again in the next quarter. Thank you very much.

On behalf of SMC Global Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.