01 — At a Glance
The Sharpest Pencil in the Broking Box (With Slightly Bent Eraser)
- 52-Week High / Low₹795 / ₹431
- Q3 FY26 Revenue₹248 Cr
- Q3 FY26 PAT₹37.9 Cr
- TTM EPS₹20.07
- Annualised EPS (Q1–Q3 Avg × 4)₹21.47
- Book Value / Share₹208
- Price to Book2.21x
- Active Clients (Mar FY25)2.21 Lakh
- MTF Book Size (Dec’25)₹123 Cr
- AUM Distribution (Dec’25)₹837 Cr
Flash Summary: Anand Rathi just delivered Q3 FY26 PAT of ₹37.9 crore — up 72% YoY. Revenue is ₹248 crore (+21.9% YoY). TTM EPS is ₹20.07. Stock trades at 26.6x P/E and 2.21x P/BV. The IPO was clean in September 2025. Then March 2026 rolled around like an unwanted audit notice, and suddenly there’s a ₹13 crore off-market share transfer scandal, SEBI penalties, and EY getting hired to poke around the books. Nothing says “growth stock” like a forensic audit before your first annual results as a public company. Nothing.
02 — Introduction
The Broker Who Learned About Compliance From a LinkedIn Post
Anand Rathi is a family-owned, full-service brokerage house that has been around since 1991 — quietly doing the work of helping Indians gamble their savings in the equity markets with marginally better systems than a WhatsApp group. Until September 2025, when they went public and discovered that “public” means people now read your disclosures.
The business model is simple: take commissions from retail, HNI, and institutional traders. Earn interest on margin trading. Distribute mutual funds and collect trail fees. Layer in some insurance broking and wealth management subsidiaries for good measure. Result: reasonably diversified revenue streams that would be boring if the growth wasn’t so spicy.
Q3 FY26 was a confidence-builder. Revenue from operations hit ₹248 crore, up 21.9% YoY. PAT hit ₹37.9 crore, up 72% YoY. EBITDA margin expanded to 41%. On paper, this looked like a stock worth getting excited about. Peers were giving this ₹2,888 crore valuation. Institutional investors were scribbling notes. Then, on February 6, 2026, someone discovered that ₹13 crore of shares had moved in an off-market transaction. On March 16, 2026, an FIR was registered. On March 6, EY was hired for forensic audit. By mid-March, SEBI had imposed a ₹1 crore penalty for cyber-security lapses from 2023-2024. Welcome to public markets, Anand Rathi. Here’s your regulatory spanking.
⚠️ CRISIL Note (Mar 2026): CRISIL A/Stable (Long-term bank loan facility of ₹175 crore) and CRISIL A1 across short-term facilities. Rating remains unchanged despite the fraud disclosure. CRISIL essentially said: “We’ve rated the debt, not the management’s personal conduct.” Fair point, but retail equity investors might feel differently.
03 — Business Model: Khatabook for Stock Markets
How Brokers Make Money While You Lose Sleep (And Rupees)
Anand Rathi makes money in four ways. First: brokerage commissions from retail and institutional traders. Second: interest on margin trading facilities (MTF), where they essentially lend you money to buy stocks so you can lose faster. Third: distribution fees and trail commissions from mutual funds, PMS, and AIFs. Fourth, now entering phase: insurance broking.
The real gem lately is MTF. The margin trading book has exploded from ₹64 crore in Dec FY24 to ₹123 crore in Dec FY25 — that’s a 92% YoY growth. Zero NPAs. Clients borrowing at 18-20% rates to buy ₹1 lakh in stock with ₹30k capital. It’s a win for Anand Rathi, a loss for the retail trader’s long-term wealth, and a regulatory grey area that’ll definitely need more scrutiny going forward.
Their concall in January 2026 revealed management’s explicit intention: get to a 50-50 revenue mix between broking and non-broking by March 2027. Translation: stop being a commission-dependent volatility play, start being an annuity-like recurring revenue machine. Smart positioning. Execution, as they’re now discovering, is the hard part when regulatory bodies are watching your every move.
Broking Revenue52%Q3 FY26 mix
MTF Interest18%growing fast
Distribution Rev10%trail fees
Tier 2/3 Clients71%AUM expansion zone
Fun fact from the concall: “Almost 40% of total broking revenue coming directly where client is executing at his own level” — translation, retail traders doing DIY, which cuts dealer costs but also increases leverage risk. The company sees this as efficiency. Regulators might see this as “underserved retail getting over-leveraged.” Popcorn time.
04 — Financials Overview
Q3 FY26: The Numbers Went Brrr (Before the Scandal)
Result type: Quarterly Results | Q3 FY26 EPS: ₹6.04 | Q1–Q3 Avg EPS: (₹5.27+₹4.56+₹6.04)/3 = ₹5.29 | Annualised EPS: ₹21.16
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 248 | 204 | 227 | +21.9% | +9.3% |
| Operating Profit (EBITDA) | 102 | 77 | 93 | +32.5% | +9.7% |
| EBITDA Margin % | 41% | 38% | 41% | +300 bps | flat |
| PAT | 37.9 | 22 | 29 | +72.3% | +30.7% |
| EPS (₹) | 6.04 | 4.80 | 4.56 | +25.8% | +32.5% |
The Good: PAT is up 72% YoY. Operating leverage is expanding. EBITDA margins hit 41% in Q3. This is exactly what a newly-listed broker should show: rapid profitability growth as scale kicks in. The stock was actually making sense to own at ₹460.
05 — Valuation Discussion: Fair Value Range
What Is This Broker Actually Worth? (Before We Found Out About the ₹13 Cr Oopsie)
