Anand Rathi Brokers: ₹21 Cr fraud loss masks 22% revenue growth, ~71% adjusted PAT jump
PAT +2.4% YoY · revenue +22.4% · margins expanding
₹246.1 Cr
+22.4% YoY
₹23.35 Cr
+2.4% YoY
9.47%
-1.8pp YoY
₹3.71
Anand Rathi Share and Stock Brokers' Q1 FY27 print looks flat on the surface but is strong underneath. Consolidated revenue from operations rose 22.4% YoY to ₹246.1 Cr (from ₹201.1 Cr), running ahead of the company's own 15-20% FY27 revenue guidance, while reported consolidated PAT crept up just 2.4% YoY to ₹23.35 Cr. The gap is entirely a ₹21.0 Cr exceptional charge (Note 4) — compensation to two Depository-Participant clients for fraudulent off-market transfers of shares from their demat accounts, which folds in a contingent liability flagged last quarter plus fresh fraud identified this quarter (tying to the June 9 disclosure of an additional ₹9.35 Cr client impact). Stripped of that one-off, operating profit before exceptional and tax jumped to ₹52.4 Cr from ₹30.5 Cr, and adjusted PAT is ~₹39.1 Cr — roughly +71% YoY. So the correct read is a strong operating quarter, not a stalled one.
Q1 FY-2027 vs prior quarters
Margins expanded materially: consolidated operating margin widened to 21.3% from 15.2% a year ago, and adjusted net margin to 15.9% from 11.3%, driven by 22% growth in interest and fee income against slower expense growth and a lower finance cost (₹39.9 Cr). Sequentially the topline dipped 3.7% off a seasonally heavier Q4, and reported PAT fell 44% QoQ purely on the exceptional item — on an adjusted basis the sequential PAT decline is only ~6%, a normal post-year-end softening rather than deterioration. This confirms rather than contradicts the confident, cautiously-optimistic tone management struck on the Q4 concall.
The stock went into the print at ₹581.25, up 7.1% over the past month of trading.
What the summary numbers don't show
EPS (basic) ₹3.71 consolidated / ₹3.73 standalone, unannualised — single 'broking & related services' segment.
Management guides for overall revenue growth of 15% to 20% year-on-year, underpinned by a strategy to achieve a balanced 50-50 revenue mix between broking and non-broking segments. They target aggressive 40-45% growth in the non-broking business and a steady 15% growth in broking revenues. The company plans to continue
— This quarter: beat
The board paired the result with two capital actions: approval of up to ₹500 Cr in NCD issuance (in tranches) and incorporation of a wholly-owned subsidiary in Dubai to serve NRI/HNI clients. Balance-sheet gearing actually eased — debt-to-equity fell to 0.81 from 1.93 a year ago, well inside the 1.5 ceiling management guides to, giving headroom for the new NCD programme and continued MTF book expansion. No formal street consensus exists for this recently-listed small-cap broker (public estimates circulating are for the separate Anand Rathi Wealth entity), so the result is best judged against guidance, which it beat on revenue.
What to watch
W1
Recoveries against the ₹21.0 Cr DP fraud loss — EOW has attached beneficiaries' assets and insurance claims are filed; any write-back would flow through exceptional/other income next quarter.
W2
Whether the 21.3% operating margin holds as revenue tracks toward the 15-20% FY27 guide; adjusted NPM base is now 15.9%.
W3
Deployment of the ₹500 Cr NCD programme and its effect on the 0.81 debt-equity ratio and the ₹39.9 Cr quarterly finance cost.
Unaudited, limited review. In ₹ Millions, converted to Cr (÷10). totalExpenses is pre-exceptional; a ₹20.996 Cr exceptional loss (DP-client fraud compensation, Note 4) sits between operating profit and PBT — PBT after exceptional. Standalone and consolidated near-identical (<1% divergence). Company's own adj-NPM (15.87% cons.) implies ex-exceptional PAT ~₹39.1 Cr.
Informational and educational content only. Not investment advice.