Prudent Q2 FY27: Consolidated PAT Up 34% YoY To ₹71.7 Cr As Margins Expand

Consolidated PAT came in at ₹71.70 Cr, up 33.9% YoY from ₹53.54 Cr, on revenue of ₹388.73 Cr, up 21.6% YoY from ₹319.79 Cr; basic EPS was ₹17.32 versus ₹12.93 a year ago. Against our pre-result preview, which flagged expected revenue of ₹340–360 Cr and PAT of ₹70–75 Cr with a Street consensus Buy (6-7 analysts, median target ₹3,050), the quarter beat on revenue and landed within the expected PAT band — consistent with the flows-and-margin story the Street was watching after Q1's 44% YoY PAT surge. Operating margin (EBITDA/revenue-from-operations) expanded to 26.44% from 22.57% a year ago and from 25.62% in Q1 FY27, as commission-and-fee expense ran at 54.4% of revenue from operations — below the 56.2% steady-state management flagged on the July concall. Net profit margin, however, slipped sequentially to 18.27% from 20.29% in Q1 FY27 even as it expanded YoY from 16.32%. That QoQ dip is not an operating issue: other income fell to ₹3.80 Cr from an unusually elevated ₹20.83 Cr in Q1 FY27, and this swing alone accounts for the entire QoQ PAT decline (-4.1%, to ₹71.70 Cr from ₹74.76 Cr) despite revenue growing 11.8% QoQ — the core distribution business in fact grew PAT faster than revenue on a YoY basis. On prior guidance, results are mixed: commission payout improved versus the guided steady-state, but employee benefit expense grew 30.8% YoY (₹43.08 Cr vs ₹32.95 Cr), running ahead of the 22-24% FY27 growth band guided last quarter. The 88 bps gross-yield level and the ~30-branch FY27 addition plan aren't verifiable from this filing, which carries no segment/AUM disclosure or accompanying press release — management's own framing of the quarter is absent from the document. Same-day board actions included a ₹6.53 Cr rights-issue investment into wholly-owned subsidiary Prutech Financial Services to meet SEBI portfolio-manager net-worth norms (a first visible draw on the ₹650 Cr acquisition treasury flagged last quarter) and a 1,190-share ESOP allotment at ₹2,632 exercise price. Going into Q3, the swing factors are whether employee costs moderate back toward the guided 22-24% band, whether other income normalizes further after Q1's spike, and how the Prutech capital deployment progresses against the ₹650 Cr treasury pool.