SMC Global Securities Navigates Market Headwinds with Diversified Strategy in Q2/H1 FY26

SMC Global Securities Limited, a prominent player in India's financial services sector, recently announced its Q2 and H1 FY26 earnings, revealing a period of strategic adjustments amidst evolving market dynamics. The company reported a consolidated operational income of Rs. 865.2 crores for H1 FY26. However, profitability metrics saw a notable decline, with consolidated EBITDA at Rs. 184.5 crores (21.3% margin) and Profit After Tax (PAT) at Rs. 50.9 crores (5.9% margin), down from 27.2% and 11% respectively in H1 FY25. This performance reflects broader industry challenges, particularly in the broking and financing segments.

The broking and capital market industry experienced a phase of consolidation during Q2 FY26, influenced by tighter F&O margin norms, revised expiry cycles, and heightened global uncertainty. This environment led to softer trading volumes and a cautious stance from retail investors, impacting broking and distribution revenues. Similarly, the financing (NBFC) segment faced moderation, with revenue at Rs. 97.3 crores for H1 FY26. The company's Asset Under Management (AUM) stood at Rs. 1,088 crores, with a collection efficiency of 98.47%. Despite these challenges, the insurance broking division emerged as a key growth driver, with revenue growing by 21% year-on-year to Rs. 278.3 crores in H1 FY26. This growth was fueled by robust performance in both life and general insurance, supported by rising financial awareness and digital adoption.

Strategic Adjustments and Segmental Focus

SMC Global's management highlighted several strategic priorities to navigate the current environment. In the broking segment, the company is deepening partnerships with PSU and private banks, expanding its digital reach through upgraded trading platforms, and increasing customer engagement via research-driven advisory tools. These initiatives aim to capitalize on expanding retail penetration and improving financial literacy. The insurance broking division continues to leverage its extensive network of 16,245 Point of Sales (POSs) and 370 Motor Insurance Service Providers (MISPs), supported by digital channels like smcinsurance.com.

In the NBFC segment, the company is undertaking a conscious rebalancing of its lending portfolio. It is discontinuing low-spread LAP products and shifting focus towards Micro LAP. Additionally, underwriting policies for unsecured business loans (SME working capital term loans) have been tightened, with plans to reduce this exposure from over 50% of AUM to below 25% over the next year. This move is expected to enhance asset quality and risk management, even as Gross Non-Performing Assets (GNPA) stood at 3.6% and Net Non-Performing Assets (NNPA) at 2.5% for H1 FY26.

Outlook and Management Commentary

Looking ahead, SMC Global's management expressed optimism for H2 FY26. They anticipate market conditions to improve, especially in the derivative segments, and expect business growth to recover. The company is hopeful of achieving a consolidated PAT of Rs. 90 to 100 crores in H2 FY26, contingent on supportive market conditions. The insurance segment is particularly expected to show further improvement, with Q4 typically being a strong quarter. The management emphasized that their diversified business model, strong digital ecosystem, and nationwide reach position them well to capture opportunities as market activity normalizes and investor participation strengthens.

SMC Global Securities is clearly focused on adapting to regulatory changes and market realities. The strategic shift towards a more resilient NBFC portfolio, coupled with the robust performance of its insurance arm and ongoing digital initiatives in broking, underscores a disciplined approach to navigating a challenging financial landscape. The company's commitment to strengthening its technology foundation and expanding its distribution network aims to build a stronger, future-ready franchise.