Anand Rathi Share Stock Brokers Q4 FY26 results: PAT 125.7% jump, EBITDA margin 43.2% latest

Anand Rathi Share and Stock Brokers delivered a sharply improved fourth quarter for FY26, with profit after tax surging 125.7% year-on-year to Rs 41.55 crore and EBITDA expanding 51.4% to Rs 110.33 crore — a set of numbers that stand in notable contrast to the full year picture of a business navigating one of the most difficult market environments in recent memory, where geopolitical tensions, FII outflows, and weak investor sentiment depressed broking revenues even as non-broking segments stepped up strongly to compensate.

Q4 FY26 highlights

Revenue for the quarter came in at Rs 255.66 crore, up 28.1% year-on-year, with the EBITDA margin expanding to 43.2% from 36.5% in Q4 FY25 — a 670 basis point improvement that reflects both the operating leverage of the business and the favourable revenue mix shift toward higher-margin non-broking income streams. The PAT doubling on a year-on-year basis is the headline number and reflects both the revenue growth and the margin expansion flowing through to the bottom line.

The segmental breakdown tells the story of where the quarter’s growth came from. Broking revenue of Rs 120.14 crore grew 14.5% year-on-year — positive but the slowest-growing segment in the quarter. Interest on Margin Trading Facility came in at Rs 43.17 crore, up 50.2% year-on-year, reflecting the rapid expansion of the MTF book. Distribution income of Rs 35.26 crore grew 34.3% year-on-year. Other income from operations at Rs 57.08 crore grew 43.8% year-on-year. The pattern is consistent — every segment except core broking is growing significantly faster than broking itself, and the business has been deliberately repositioning around that reality.

The balance sheet metrics

Assets under management stood at Rs 7,787.60 crore, up 20.6% year-on-year — a strong number that reflects continued client stickiness and growing wallet share in wealth and distribution products despite weak market conditions. The MTF book of Rs 1,101.90 crore grew 60.7% year-on-year, the fastest-growing metric in the entire disclosure and the primary driver of the interest income surge. Assets under custody reached Rs 94,415.50 crore, up 16.0% year-on-year — a scale figure that underscores the breadth of the custody and depository franchise.

The one number that demands attention is active clients at 212,841 — down 3.9% year-on-year. In an environment where the overall retail participation in Indian equity markets has been growing, an active client decline at a broking firm is a meaningful signal. It suggests that the Iran war period’s market volatility, FII outflows of Rs 1.27 lakh crore in 2026, the Nifty’s worst monthly fall since March 2020, and the uncertainty created by Brent crude above $100 have caused some retail clients to step back from active market participation. The MTF book’s 60.7% growth alongside the client count decline creates an interesting juxtaposition — fewer clients, but those remaining are borrowing significantly more to hold positions.

Full year FY26 — the honest picture

The full year numbers reveal the underlying challenge that the strong Q4 partially obscured. FY26 revenue of Rs 932.16 crore grew 10.2% year-on-year — respectable but significantly below the pace of earlier years. EBITDA of Rs 379.58 crore grew 21.9% with the full-year margin expanding to 40.7% from 36.8% — a structural improvement in profitability that is the business’s most significant achievement in a difficult year. PAT of Rs 129.27 crore grew 24.8% year-on-year, a solid outcome given the environment.

The full-year segmental picture is more nuanced. Broking revenue of Rs 475.51 crore actually declined 6.8% year-on-year — the only segment in negative territory and confirmation that the SEBI changes to F&O regulations that took effect in 2025, combined with market volatility and weak sentiment, materially impacted the core transaction business. Against that headwind, MTF interest income grew 32.6%, distribution income grew 44.1%, and other income from operations grew 34.6% — three segments expanding strongly enough to more than offset the broking decline and deliver positive overall revenue growth.

Management commentary

Management acknowledged directly that FY26 was a challenging year due to geopolitical tensions, global uncertainty, FII outflows, and weak investor sentiment — a candid characterisation that aligns with what the numbers show. The strategic response has been to lean into non-broking segments, strengthen client relationships, focus on long-term investing and advisory mandates that generate more durable fee income than transaction-dependent broking revenue, and expand geographic presence — the company now operates across 307 cities.

The 307-city footprint is a distribution moat that positions Anand Rathi differently from purely digital broking competitors. In a market where zero-brokerage discount platforms have taken significant retail market share, a physical presence model in smaller cities serves a client segment that values relationship-based advisory — exactly the segment that has kept its assets invested through the current volatility rather than exiting, as reflected in the AUM growth despite active client decline.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Financial data is sourced from publicly available results disclosures. Readers are advised to consult a SEBI-registered financial advisor before making any investment decisions. Business Upturn is not responsible for any gains or losses arising from decisions made based on this article.