SMC Global: PAT +23% YoY on broking gains, but NBFC segment slips, margin compresses

SMC Global Securities reported consolidated total income of ₹515.6 Cr and PAT of ₹36.74 Cr for Q1 FY27, up 21.2% and 22.7% year-on-year respectively (vs ₹425.1 Cr revenue and ₹29.95 Cr PAT in Q1 FY26). Sequentially, revenue was flat (-0.4% QoQ) but PAT jumped 71.2% QoQ from ₹21.46 Cr in Q4 FY26 — the gap is largely a tax effect: the effective tax rate fell to 21.1% this quarter from 26.8% in Q4 FY26, while it was roughly flat year-on-year (21.9% in Q1 FY26), meaning the YoY profit growth is operationally driven and tracks PBT growth of 21.5% closely, but the QoQ jump overstates the underlying operating improvement.

The topline growth was uneven across the three reportable segments. Broking, distribution & trading — the core segment — grew revenue 15.0% YoY to ₹316.3 Cr with segment profit up 17.6% to ₹74.31 Cr. Insurance broking revenue surged 44.4% YoY to ₹167.27 Cr, comfortably beating management's guided 15% growth for the segment, but segment profit there fell 32.3% YoY to just ₹1.64 Cr, indicating sharp margin compression in that business even as volumes grew. The Financing (NBFC) segment moved the other way — revenue fell 8.6% YoY to ₹46.46 Cr and profit fell 8.5% to ₹26.13 Cr — which sits against management's Q4 FY26 guidance of a FY27 recovery in financing with 15–20% AUM growth and disbursements above ₹800 Cr; this filing does not disclose AUM or disbursement figures directly, so that specific guidance cannot be confirmed, but the segment's revenue and profit trend does not show the guided recovery yet. At the consolidated level, operating margin (PBT/revenue from operations, ex-finance cost and impairment) came in near 20.2%, up from roughly 17.4% in Q4 FY26 but down from roughly 23.6% a year ago — a year-on-year compression that the flat-to-slightly-improved net margin (7.13% vs 7.03% YoY) masks, since it was cushioned by the steady effective tax rate rather than an operating improvement. Employee costs (+16.5% YoY to ₹101.6 Cr) and other expenses (+21.4% YoY to ₹39.7 Cr) both grew faster than the topline, which runs counter to the cost-optimization language in management's prior guidance.

The stock went into the print at ₹75.46, up 3% over the past month of trading.

For context: this is the highest quarterly PAT in the last 6 quarters on our records.

No exceptional items in current or comparative quarters — EPS ₹1.75 (bonus-adjusted for Nov-2025 share issue)

Standalone PAT of ₹25.12 Cr grew a slower 10.0% YoY (vs consolidated's 22.7%), a divergence of more than 3 percentage points — the gap indicates that subsidiaries, particularly the insurance broking and financing units, are contributing disproportionately to the group-level growth story relative to the parent entity's own broking operations. No consensus/street estimates for this specific quarter could be located given limited analyst coverage of the stock; no formal management press release accompanied this filing beyond the board-outcome intimation, so the results cannot be cross-checked against fresh management commentary at this time (the Q1 FY27 earnings call was scheduled for the following day).