Modern Shares profit falls 15% as costs rise year on year

Modern Shares and Stockbrokers Limited reported unaudited profit of Rs 13.54 lakh for the quarter ended September 30, 2026, down 15% from Rs 15.90 lakh a year earlier. Total income declined to Rs 98.49 lakh from Rs 103.55 lakh, while total expenses increased to Rs 80.37 lakh from Rs 78.86 lakh.

Why did Modern Shares' September-quarter profit decline?

Modern Shares' profit declined because income fell by Rs 5.06 lakh while expenses rose by Rs 1.51 lakh year on year. Profit before tax for the quarter ended September 30, 2026 was Rs 18.12 lakh, compared with Rs 24.69 lakh in the quarter ended September 30, 2025, and post-tax profit was Rs 13.54 lakh against Rs 15.90 lakh.

The year-on-year decline differed from the sequential movement. Profit increased from Rs 5.95 lakh in the quarter ended June 30, 2026 to Rs 13.54 lakh in the September quarter, while profit before tax increased from Rs 7.03 lakh to Rs 18.12 lakh. The September-quarter tax charge comprised Rs 5.40 lakh of current tax and Rs 0.34 lakh of deferred tax, partly offset by a Rs 1.16 lakh excess provision for earlier years.

For the half year ended September 30, 2026, Modern Shares reported profit of Rs 19.49 lakh, compared with Rs 30.80 lakh in the corresponding prior-year half year. Half-year profit before tax decreased to Rs 25.15 lakh from Rs 44.04 lakh, as total income declined to Rs 185.20 lakh from Rs 202.60 lakh.

How did Modern Shares' income mix change in the September quarter?

Modern Shares' total income fell to Rs 98.49 lakh in the quarter ended September 30, 2026 from Rs 103.55 lakh a year earlier, despite an increase in brokerage and commission income. Brokerage and commission income rose to Rs 78.25 lakh from Rs 77.39 lakh and was also above Rs 59.86 lakh in the June 2026 quarter.

The largest year-on-year change was in profit on trading, which declined to Rs 2.87 lakh from Rs 10.21 lakh. Interest income decreased to Rs 19.61 lakh from Rs 20.03 lakh, dividend income remained Rs 0.31 lakh, and the net loss on fair value changes narrowed to Rs 2.55 lakh from Rs 4.39 lakh.

For the six months ended September 30, 2026, brokerage and commission income was Rs 138.11 lakh, compared with Rs 151.04 lakh a year earlier. Interest income was Rs 39.00 lakh against Rs 39.85 lakh and trading profit was Rs 5.37 lakh against Rs 11.39 lakh, while the period recorded a Rs 2.41 lakh net gain on fair value changes.

Which costs increased for Modern Shares during the quarter?

Modern Shares' total expenses increased to Rs 80.37 lakh in the September 2026 quarter from Rs 78.86 lakh a year earlier, led by administrative and other expenses. Administrative and other expenses rose by Rs 5.97 lakh to Rs 36.83 lakh from Rs 30.86 lakh, while finance cost increased to Rs 1.04 lakh from Rs 0.66 lakh.

Employee benefit expense declined to Rs 41.61 lakh from Rs 43.08 lakh, and depreciation, amortisation and impairment decreased to Rs 0.89 lakh from Rs 0.96 lakh. The September 2025 quarter included a Rs 3.30 lakh net loss on fair value changes within expenses, whereas no amount was reported in that expense line for the September 2026 quarter.

In the half year ended September 30, 2026, total expenses were Rs 160.05 lakh, compared with Rs 158.56 lakh in the prior-year period. Administrative and other expenses rose to Rs 73.35 lakh from Rs 64.80 lakh, while employee benefit expense decreased to Rs 83.35 lakh from Rs 87.84 lakh and finance cost rose to Rs 1.59 lakh from Rs 0.93 lakh.

What did Modern Shares disclose about its review, segments and litigation?

Modern Shares said its audit committee reviewed and its board approved the unaudited standalone results on October 30, 2026. B D G & Co LLP conducted a limited review under Regulation 33 of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements Regulations, 2015, and said nothing had come to its attention to indicate a material misstatement.

Modern Shares reported no separate reportable segment under Indian Accounting Standard 108 on operating segments. Earnings per share, not annualised, were Rs 0.43 for both basic and diluted measures in the September 2026 quarter, compared with Rs 0.49 in September 2025 and Rs 0.17 in June 2026.

The filing also disclosed a pending case involving Bata India Limited. Modern Shares said the Court of Small Causes at Bombay directed the fixing of mesne profit in T.E. Suit No. 146/192 of 2009, and that Bata India Limited's appeal to the High Court of Bombay remained pending as of October 30, 2026.

Conclusion

Modern Shares' September-quarter result combined a Rs 0.86 lakh year-on-year rise in brokerage and commission income with lower trading profit and higher administrative costs. Trading profit fell by Rs 7.34 lakh to Rs 2.87 lakh, while administrative and other expenses increased by Rs 5.97 lakh to Rs 36.83 lakh, contributing to the reduction in profit before tax to Rs 18.12 lakh.

The next disclosed matter to watch is the pending High Court of Bombay appeal involving Bata India Limited, which Modern Shares said remained unresolved on October 30, 2026. Subsequent results will also show whether brokerage and commission income, reported at Rs 138.11 lakh for the half year ended September 30, 2026, changes alongside trading profit and administrative expenses.