Flat growth masks strong underlying momentum, cost inflation clouds near-term outlook

Capital markets revenue ₹286 Cr, up 2.5x QoQ but deal sizes compressed ₹40-50 Cr YoY. Overall revenue +0.1% YoY.

Standard loan book grew 22% YoY to ₹4,748 Cr, AUM ₹4,000 Cr up 30%. Claims aligned with actuals.

Achieved 30% YoY AUM growth and 48% disbursement growth. Exceeded prior Q1 target of 28%.

Wealth loan book ₹2,600 Cr (30% YoY), recurring AUM ₹37,000 Cr (16% YoY). Growth solid but revenue impact diluted by broking headwinds.

June-July weak; Sept strong. Management now says momentum 'decent' in October. But September was cherry-picked; overall Q2 revenue still +0.1% YoY.

Management confirmed 15-20% growth for capital markets, 20% loan book growth for private markets, 20-25% AUM for wealth. No upward revision despite earlier Q1 optimism.

Expected ₹250-300 Cr recovery by March, vs prior guidance of steady earnings lift. Timing uncertainty introduced.

Team rationalization underway; profitability recovery delayed to FY28. Near-term NPM pressure continues.

Pipeline ₹130K Cr filed with regulator. June was weak, Sept strong. Primary market interest and FPI participation returned. October 'decent', November expected 'pretty decent'. But deal sizes compressed ₹40-50 Cr this quarter.

Cash is healthy buffer at ₹1K Cr minimum. We will resume borrowing next quarter as yield improves. Management disciplined on risk-adjusted returns, will not chase growth if returns deteriorate.

Market-to-market effect. On steady-state growth basis, will add at 20%+ rates. Recruitment investment will drive growth in double digits over time, not immediately.

NBFC capital stuck; cannot easily exit. NSE stock just listed, locked up for six months. Will revisit buyback after March 2027 when NSE lockup expires. One year creep in capital plans.

Net gain on fair value changes (ARC side), broking revenue lower due to regulatory changes, write-backs ₹231 Cr last year vs ₹15 Cr this year. Half-on-half net revenue is actually ₹357 Cr (FY26) vs ₹582 Cr (FY27)—63% growth. Ignore quarterly volatility.

New cohort: ₹75 Cr per RM. Existing cohort: ₹75-100 Cr per RM (mature). New cohort will be half that initially, but will double on ramp-up. Profitability recovery delayed to FY28.

Yes. 50% from broking (12-15% of total recurring), institutional AUM growth, wealth recurring, and lending recurring. Rest 50% is transactional (M&A, deals, ARC recovery). Both businesses will grow, but transactional will remain volatile.

IPO pipeline ₹183K Cr in Q2 suggests sustained momentum. But deal values compressed ₹40-50 Cr YoY; FY27 implies 12-15% growth, not 20%.

Standard loans grew 22% YoY to ₹4,748 Cr in Q2. Guidance reaffirmed; management disciplined on risk-adjusted returns.

Recurring AUM ₹37K Cr up 16% YoY; recruitment-driven productivity gains expected FY28. Current market volatility may cap near-term growth.

Blended across segments: capital markets (15-20%), private markets (20% loan book), wealth (20-25% AUM), affordable housing (25%+ AUM). FY27 actual +0.1% suggests guidance is 3-5Y forward-looking, not current FY.

Wealth team expansion driving cost inflation; expected to normalize FY28. Operating leverage to drive margin expansion once recruitment cycle completes.

50% of revenue transactional (deals, M&A, capital markets). Q2 saw April-May weakness, Sept strength. Future quarters depend on market sentiment and IPO calendar.

Aggressive hiring (18 months of recruitment underway) is depressing near-term margins. Risk that new RMs do not reach mature RM productivity levels (₹75-100 Cr per RM target) in expected timeframe.

ARC business subject to FVD changes and recovery timing lumpy. Q1 had ₹50+ Cr ARC recovery; Q2 quieter. Expected ₹250-300 Cr recovery by March uncertain.

Wealth management includes broking revenue (12-15% of total recurring). Industry broking commissions lower in H1 vs H2 prior year. Regulatory environment may further compress margins.

Large capital deployed in NBFCs (illiquid); NSE stock just listed and locked up until March 2027. Limits capital deployment flexibility and shareholder returns. Stock trading below NAV but management cannot easily execute buyback.