# 1. Financial Performance ## A. Key Figures * **Operating PAT:** **₹554 Cr** (+2%) * **Net Interest Income (NII):** **+13% YoY** * **Loan-book AUM:** **₹6,305 Cr** * **Treasury Investments:** **₹8,957 Cr** as of Sept'25 (+14% YoY) * **Treasury CAGR:** **42% since inception** · **7% inception XIRR** ## B. Revenue & Profit * **Resilient Core Growth:** Annuity-driven businesses underpinned profitability, with Asset and Private Wealth delivering strong double-digit growth for the fourth straight quarter. * **NII Expansion:** Lending book growth and improved spreads fueled solid NII momentum, reflecting effective balance sheet utilization. * **Capital Efficiency:** EPS growth outpaced PAT due to disciplined capital management and high internal cash generation. ## C. Margins & ROE * **Best-in-Class Margins:** Sustained PBT margin above **50%**, supported by a lean cost base and two-thirds variable cost structure in wealth segments. * **Cost Flexibility:** High proportion of variable costs enables dynamic alignment with revenue fluctuations, preserving margins during volatility. ## D. Balance Sheet & Rating * **Historic Credit Upgrade:** Achieved **AA+ long-term rating**—highest for a domestic non-bank capital markets firm—bolstered by recurring revenues and a fortress balance sheet. * **Self-Sustaining Model:** No equity raise since 2007 IPO despite buybacks and dividends, highlighting exceptional financial autonomy and capital discipline. * **Treasury as Strategic Lever:** Treasury book serves as "skin in the game," co-investing across client offerings with majority in mutual funds and selective exposure to alternatives. ## E. Cash Flow & Dividend * **Twin-Engine Strategy:** High-ROE operating businesses generate free cash flow, which is redeployed into the high-growth treasury book, creating a compounding engine. * **Capital Allocation Discipline:** ~80% of operating profits reinvested; consistent **~20% dividend payout** maintained, reinforcing shareholder-friendly policy. --- # 2. AUM & Asset Mix ## A. Key Figures * Private Wealth AUM: ₹1.87 Lakh Cr (3x YoY net sales growth) · AUA: ₹6.7 lakh Cr+ * MF AUM: ₹1.7 lakh Cr (up 46% YoY) · AMC Net Flows: ₹20,011 Cr (+56% YoY) * **Alternates AUM:** **₹33,872 Cr** · **IBEF V First Close:** **₹6,900 Cr** (target: ₹8,350 Cr, ~2x prior fund) ## B. Private Wealth AUM * **Massive Client Scale:** Extensive reach with **45 crore+ customers**, **94 crore+ MF folios**, and **51 crore+ broking accounts**, underpinned by India’s long-term financialization and **USD 100 trillion savings projection by 2047**. * **High-Quality Client Base:** PWM serves **7,000+ families** with ₹1+ crore AUM each, with **20% YoY revenue growth** and **22% PAT growth**, reflecting strong monetization of high-net-worth relationships. * **Sticky Flows:** **~75% of PWM flows** come from existing clients, indicating high retention and deepening wallet share, while new clients represent a scalable pipeline. * **Demat-Led Expansion:** Ongoing **Demat revolution** adds **30–40 million new investors annually**, fueling client acquisition and market penetration. * **Metric Clarity:** Family count now standardized to include only those with **₹1 crore+ AUM**, improving transparency and comparability over time. ## C. Mutual Fund AUM * **Market Leadership in Flows:** **6% MF AUM market share** (record high), with **8% SIP flow share** (all-time high) and **2% net flow share**, signaling strong investor preference and momentum. * **SIP Momentum:** **~17 lakh new SIPs** added in Q2, driving **SIP AUM to ₹28,432 Cr**, reinforcing retail participation and recurring revenue stability. * **Outperformance & Trust:** **91% of AMC AUM outperformed benchmarks** over 3 years, strengthening brand credibility and asset retention. * **Yield Expansion:** Mutual fund yields rose **3 bps YoY to 45 bps** on lower OPEX and favorable conditions, with **stable outlook** absent regulatory shifts. * **Strategic Capital Commitment:** Company has invested **nearly $1 billion** in its AMC and is the **largest investor in every fund**, aligning interests with clients. ## D. Alternates AUM * **Strong Fundraising Momentum:** **IBEF V** achieved first close of **₹6,900 Cr** toward **₹8,350 Cr target**, nearly **double the predecessor fund**, reflecting robust LP confidence. * **Fee-Earning Scale:** **₹16,942 Cr** in fee-earning AUM across growth capital and real estate, providing durable revenue streams. * **Business Model Extension:** Proven success in alternate funds enabling expansion into **Private Credit**, with strong investor appetite and client down-selling potential. * **Segment Realignment:** Reclassification of select real estate assets to **Real Estate Fund Management (Alternates)** better reflects their strategic role in the asset management engine. --- # 3. Segment & Product Performance ## A. Key Figures * **Retail Cash Broking Volumes (ADTO):** ₹2,776 Cr Q2FY26 (1% cash share, 7% F&O, 8% blended) * **Housing Finance Disbursements:** ₹544 Cr (+48% YoY) * **Sales RM Force:** 1,575 RMs (+50% YoY) * GNPA/NNPA as on Sept'25 stands at 1.4%/0.8% respectively. * **Investment Banking Deals:** 39 deals (~₹49,000 Cr value) in H1FY26 * **IB Fee Income Growth:** +65% YoY in Q2FY26 ## B. Wealth Management * **Market Leadership Maintained:** Remains India’s largest broker by cash segment revenue market share despite marginal decline in overall Wealth Management share due to **tough market conditions** and flat Nifty performance. * **Housing Finance Momentum:** Disbursements grew at a robust pace, supported by aggressive RM expansion; profitability expected to accelerate in H2FY26 as new RMs cross deployment threshold. * **Private Wealth Pipeline Strength:** Healthy deal flow across unlisted equity and fixed income, backed by capability investments reducing market dependency. * **Scalable Lending Growth:** Lending book across Wealth and Housing Finance segments on track for **~25% CAGR** expansion in coming years. ## C. Asset Management * **Strategic Differentiation:** Positioned as a full-spectrum Capital Market powerhouse with top-tier rankings—**top 10 in Asset Management**, **#3/#4 in Institutional Equities**, and **#1 in IB deal count** over past year. * **Alternates Business Reclassification:** NII from high-quality real estate credit origination now reported under operating segment, improving transparency and reflecting strategic balance sheet deployment. * **Market Expansion & Share Gain:** Despite rising competition, Alternates inflows industry-wide have risen meaningfully; firm is capitalizing via **pan-India reach**, achieving **meaningful market share growth** and **doubling Private Equity fundraise** versus prior cycle. ## D. Investment Banking * **#1 Franchise Performance:** Ranked #1 in IPOs, QIPs, and Rights Issues by number of deals in H1FY26, underpinned by deep research coverage of **332 companies (73% of market cap)** and a **150+ strong analyst team**. * **Fee Income Acceleration:** IB fee income surged **65% YoY in Q2**, validating strong deal execution and market leadership amid active primary market environment. ## E. Capital Markets * **Regulatory Impact Limited:** Proposed consultation paper may affect only **5%–6% of annual Capital Markets revenue** (estimated at ₹700–800 Cr), indicating low near-term earnings risk. --- # 4. Relationship Managers & Productivity ## A. Key Figures * **Relationship Managers (RMs):** **386** (Private Wealth Management) * **RM Tenure:** **48%** with 3+ years of tenure ## B. RM Headcount * **Streamlined Reporting:** RM count now reflects only relationship managers, excluding broking advisors for industry comparability, with historical data restated; costs continue to include both roles. ## C. RM Tenure & Vintage * **Maturing Workforce:** High share of tenured RMs reflects improved vintage, driving productivity gains and positioning for margin expansion after absorbing ~900 bps of prior margin investment. ## D. Channel Mix * **Cost-Efficient Structure:** Dual-channel model (branch and external wealth managers) optimizes variable cost exposure, with higher cost variability in the external channel enhancing overall cost discipline. --- # 5. Revenue Mix & Recurring Income ## A. Key Figures * **ARR Contribution:** **61%** of total net revenues (**+37%–38% YoY growth**) * **Fee-Based Revenue:** **45%** of total net revenues * **Distribution AUM CAGR:** **36%** (₹11,032 Cr → ₹40,544 Cr, Mar-21 to Sep-25) * **Distribution Net Flows:** **₹3,079 Cr** in Q2FY26 * **Distribution Revenue Growth (H1FY26 vs H1FY25):** **+50%** ## B. Recurring Revenue Transformation * **Strategic Shift Confirmed:** Business model pivot toward **recurring income** is validated by ARR now representing a majority of total revenues, with fee-based streams forming nearly half. * **Wealth Management Resilience:** Distribution revenue growth of 50% in H1FY26 achieved despite **lumpy transaction revenues**, underscoring the stabilizing impact of a growing ARR base. * **ARR as Growth Engine:** Strong YoY ARR expansion continues to drive distribution revenue, even as sequential declines in transaction-based income introduce volatility. ## C. Revenue Mix & Business Model Evolution * **Distribution Rising, Broking Fading:** Distribution’s revenue share has nearly doubled since FY21, while broking’s contribution halved, reflecting structural shift toward asset-based, recurring models. * **Capital Markets Diversification:** Revenue mix shifted from brokerage spikes (e.g., block deals in Q1) to **fee-based investment banking** in Q2, highlighting multi-product resilience. * **Private Wealth Strength:** PWM growth driven by **ultra HNIs and family offices**, which are insulated from F&O regulatory impacts, supports more stable revenue generation. ## D. Market Share & Volume Dynamics * **Revenue Share Leadership:** Despite lower cash ADTO volume share due to **advisory-led caution**, the company maintains **industry-leading cash revenue market share** and high ARPU. * **Cyclical Share Pattern:** Volume share historically contracts in flat/down markets but expands in bull phases, aligning with research-led client engagement model. * **Alternates Expansion:** New **Private Credit fund** in pipeline to accelerate recurring revenue growth in Alternates, with **substantial carry realization** expected post-fund close. --- # 6. Credit & Treasury Risks ## A. Lending Book Quality * **Disciplined Risk Framework:** Strict risk management ensures highly diversified security exposure with no material single concentration. * **Exposure Clarification:** Reports of significant credit exposure to unlisted entities are categorically **inaccurate** and should be disregarded. ## B. Treasury Volatility * **Elevated Volatility:** Treasury results have been erratic—losses in 4Q and 2Q offset by a 1Q gain—diverging from peers’ strong profitability. * **Long-Term Focus:** Despite quarterly swings, management affirms the treasury book’s **long-term compounding trajectory**, citing **42% annual growth** and **7% XIRR over 10–15 years**. * **Market Impact:** Treasury volatility contributed to a **6% market decline**, though granular drivers were not disclosed. ## C. Private Credit Exposure * **Undisclosed Zepto Exposure:** Specific exposure to private credit initiatives like Zepto remains undisclosed, but company underscores **robust risk controls** and capital self-sufficiency. --- # 7. Guidance & Outlook ## A. Key Figures * **Savings Pool Projection:** **USD 126 Tn** over 2022–2047 (from USD 14 Tn) * **Regulatory Impact:** **1%–2%** hit to Group Operating PAT (final rules pending) * **AM Business Impact:** **5 bps** from regulation, largely distributor-passed ## B. Profit Growth Expectation * **Regulatory Overhang:** Group Operating PAT faces **1%–2% headwind** from SEBI consultation, with Capital Markets bearing the bulk of the impact. * **Mitigation Path:** Minimal direct earnings impact expected in Asset Management due to **pass-through of 5 bps cost** to distributors. ## C. Market Share Trajectory * **Structural Growth Runway:** Long-term savings pool expansion and rising **financialisation and equitization** to fuel above-market earnings growth. * **Share Gains on Track:** Consistent annual market share gains of **75–85 bps** despite competitive pressures, underscoring model resilience. * **Growth Visibility:** Capital Markets maintains a **healthy deal pipeline**, supporting expectations for sustained growth and profitability in H2. ## D. Capital Allocation Plan * **Capital-Light Expansion:** Twin-engine model enables **above-market growth without equity raises**, even amid strategic investments.