Strong revenue, soft profit — banking drag clouds near-term outlook

Share rose to 17.6% in Q1 vs 14% in Q4 and 15.5% in Q1 FY26

Management stated growth from 2% to ~20% over past 5 quarters

Standalone EBITDA margin 57.8%, down from prior levels; consolidated NPM 17.5%, weak PAT growth of 9.7% vs 65.6% revenue

Management confirmed upfront joining fees peaked; expects normalization from Q2

CFO stated 98 net hires done in FY26, peak completed; FY27 hiring to be cautious. Costs will continue through year.

Q1 FY26 revenue +13.2% (standalone), PAT +7.9%; now consolidated +65.6% revenue but +9.7% PAT—margin collapse due to banking subsidiary low profitability

Only 6 new DPs in Q1 FY27 vs 21 in Q1 FY26; management says prior cohorts are integrating but growth velocity has slowed

Fintech mix of new accounts 2% → 20% YoY, largest gain; however, still only ~2.4 lakh of 12.4 lakh net additions in Q1

Prior guidance said leverage post-peak investment; now management says 'medium term' and investment phase ongoing—no near-term margin relief signaled

Net 98 hires in FY26, now complete. Will be cautious going forward but FY27 costs will reflect prior cohort. Most hiring in technology and cybersecurity; critical for market infrastructure role.

Q1 onboarding peaked with upfront joining fees (pass-through to partner, low margin). Q2+ will normalize to baseline; transaction revenues will build gradually as customers transact.

60k unlisted companies added in last 2 years (33k FY25, 30k FY26); folio count ~14 Cr (up from 11.88 Cr). Unlisted firms are primary driver; have 70%+ market share in unlisted space.

Both: market MTF strength in last 3-6 months and bank brokers gaining cash share. Pledge count up 15% YoY. Benefits structural if MTF holds shorter duration (increases frequency).

Multi-quarter effort: relationship building, customizations, back-office vendor workshops, positive word-of-mouth from existing players, new APIs. 21 DPs onboarded FY26 still integrating; ramp gradual (4 months onboarding + 1-2 months testing before live).

Major gaps closed; APIs now competitive with rivals. Ongoing work: refinement, resilience, automation, frictionless experience. 21 FY26 DPs in various integration stages; will flow accounts as they ramp. Added 6 new DPs in Q1 despite slower pace.

3,600 unlisted companies joined in Q1. Joining fee ₹15k per company; totals ₹5-6 Cr (~25-30% of ₹21 Cr transaction charges).

14 Cr folios now vs 11.88 Cr prior year (YoY basis). Sequential Q4 to Q1 increase not quantified but implied to be modest.

DLT is new, not quantified separately. ~600 issuers on platform. Refusal to break out suggests still immaterial.

Most are exclusive NSDL DPs; all new accounts from them flow to NSDL. Many still in integration stages (4-month onboarding, 1-2 month testing before production). Fintech share jump from 2% to 20% is largely attributable to these cohorts maturing.

Q1 muted IPO activity; management confident activity will accelerate based on pipeline seen. No numeric cap or floor provided.

Reaffirmed from prior call; timeline now pushed to 'medium term' (unclear if 1-2 years or longer). Investments continue; no near-term margin recovery signaled.

Commitment restated; timing 5-7 year cycles for hardware. No capex reduction indicated; expects steady spend through medium term.

Banking revenue ₹334.3 Cr (65% of consolidated total) driven by low-margin onboarding fees; joining fees ₹5-6 Cr out of ₹21 Cr transaction charges are pass-through with limited economics. Q2+ normalization will result in ~₹15-20 Cr revenue headwind if prior onboarding peak not repeated.

Only 6 new DPs added in Q1 FY27 vs 21 in Q1 FY26; slowdown of 71%. Management says 21 FY26 cohort still in integration (4-month onboarding + testing), but reduced pace raises execution risk. Incremental demat market share gains (17.6%) depend on new DP activation.

Prior guidance promised operating leverage post-investment cycle peak. Delivered Q1 shows PAT growth (9.7%) lagging revenue (65.6%) sharply; margins compressing not expanding. Management now says leverage expected 'over the medium term' (1-3 years unclear). Risk is timeline extends, or investments exceed budget, delaying normalization.

FPIs net sellers 3 quarters running; DIIs buying strong but overall IPO activity muted in Q1 (expected to pick up). Renewed geopolitical tensions in July could dampen retail investor participation. 70 lakh demat adds in Q1 is solid but not immune to sentiment swings.

Regulatory expectations on technology resilience are increasing. Management cited both regulatory and market drivers for tech spend. If compliance mandates accelerate (e.g., cyber security, resilience upgrades), capex could exceed planning, further delaying margin recovery.