SMC Global Securities Q4 FY26: Q4 rebound, while the group resets its lending engine

SMC Global Securities closed Q4 FY26 with a sharp year-on-year recovery in profitability, even as the year overall reflected a tougher operating environment for leveraged and market-linked financial businesses. Consolidated operational income in Q4 FY26 was INR 516.9 crore, up 22.6% YoY and 4.5% sequentially. EBITDA rose to INR 89.7 crore, up 42.6% YoY, with margin improving to 17.4%. Profit after tax for the quarter came in at INR 21.5 crore versus INR 4.1 crore in Q4 FY25.

For the full year FY26, the picture was more mixed. Consolidated operational income increased 5.7% to INR 1,876.9 crore. EBITDA stood at INR 376.4 crore with a margin of 20.1%, while PAT was INR 103.2 crore. Management explicitly said FY26 margins compressed at the consolidated level, driven by higher finance costs and a deliberate slowdown in the financing business.

A year shaped by regulation, volatility, and a business-model pivot

Management described FY26 as a transition year for the broking industry. Regulatory measures such as higher STT on F&O, true-to-label charges, and the participation framework continued to affect derivatives volumes. Q4 also saw heightened volatility, with a sharp equity market correction in March 2026 and a market-infrastructure technical disruption that temporarily affected trading activity.

Despite these headwinds, management pointed to a constructive direction in regulation, citing SEBI circulars intended to ease doing business for brokers and rationalise reporting requirements. Over the longer term, the company believes structural tailwinds remain intact, with retail participation and SIP flows continuing to expand.

Financial snapshot

Note: FY26 PAT and EBITDA were stated to be lower YoY due to higher consolidated finance costs (INR 221.3 crore) and calibrated financing activity.

Broking and distribution: stabilising around cash, delivery, and digital

The largest operating segment remains Broking, Distribution and Trading. For FY26, segment revenue was INR 1,089.2 crore, up 4.3% YoY. In Q4 FY26, revenue rose 19.3% YoY to INR 286.8 crore, while segment EBIT improved sharply by 66.6% YoY to INR 60.9 crore. Management attributed the Q4 improvement to operating leverage and improved cost efficiency, even as the full-year revenue growth stayed modest due to the moderated derivatives backdrop.

Operationally, the client base expanded to 13.39 lakh accounts as of FY26, including Stoxkart. DP AUA increased 23.96% to INR 1,42,703 crore. The distribution business scaled to INR 4,294 crore of mutual fund AUM with 94,392 active SIPs. Management also disclosed the monthly SIP contribution at around INR 25.69 crore, based on an average SIP size of INR 2,722 and 1,900 to 2,000 SIPs sourced per month.

A notable trend discussed in Q&A was the increasing relevance of commodities. Management stated an approximate brokerage mix: equity cash around 50%, futures and options around 40%, and commodity around 10%. They added that commodity contribution was earlier around 4% to 5%, and has now risen to about 10%, with expectations of gradual further increase supported by new product introductions.

Insurance broking: strong top-line and a strategic expansion into reinsurance

Insurance broking delivered one of the strongest growth prints in FY26. Segment revenue rose 17.1% YoY to INR 667.5 crore, and Q4 FY26 revenue grew 29.8% YoY to INR 208.1 crore. Segment EBIT for FY26 was INR 14.3 crore, up 4.8% YoY, while Q4 segment EBIT was INR 4.5 crore, up 6.7% YoY.

Management addressed the slower EBIT growth versus revenue directly. They said the business is investing in distribution capacity and technology infrastructure, in part to support the next phase of growth following an important category upgrade. During FY26, the insurance business moved from a direct broker to a composite broker category, which now permits entry into the reinsurance segment. Management called this a meaningful new growth revenue opportunity going forward.

In Q&A, the insurance team also indicated that about 90% of revenue is currently from general insurance, and that general insurance will continue to be the major contributor, while life insurance revenue is expected to grow in coming years. On outlook, management stated an expectation of about 15% growth over the next financial year, supported by both physical and digital selling and the reinsurance addition.

Financing (NBFC): growth moderated by design, with metrics positioned for the next cycle

The most deliberate change in the group during FY26 was the financing business strategy. Management described the operating environment for NBFCs as challenging, with elevated funding costs, tighter underwriting, and caution in unsecured and microfinance-linked segments.

NBFC AUM stood at INR 1,119 crore as of March 2026, down from INR 1,291 crore a year ago. FY26 disbursements were INR 720.05 crore, materially lower than FY25. Management emphasised this was a conscious choice to slow origination in segments showing early stress, rather than a constraint.

On performance, Q4 FY26 NBFC segment revenue was INR 43.3 crore, up 6% YoY, with segment EBIT of INR 21.2 crore, up 18.6% YoY. However, for the full year, segment revenue declined 15.1% to INR 188.9 crore, segment EBIT declined 26.2% to INR 102.2 crore, and PAT moderated to INR 24.6 crore from INR 46.3 crore in FY25.

The company highlighted portfolio quality and capital strength as key outcomes of this strategy: secured AUM at 76.71%, GNPA at 3%, NNPA at 2%, collection efficiency at 98.63%, and CRAR at 43.2% which management said is the strongest in four years. NIM moderated to 7.3% from 8.2% in FY25, reflecting the elevated funding cost environment.

In Q&A, management provided more granularity on the product shift. It stated that fresh disbursement in SME LAP was discontinued and unsecured business loan disbursements were reduced materially, while disbursements in secured products such as microLAP, gold loan and asset finance increased. They also stated that excluding LAP and unsecured business loans, disbursements grew to INR 614 crore in FY26, and they expect this figure to go above INR 800 crore in the next year.

On guidance, management said it expects AUM to grow around 15% to 20% during the year.

Capital and funding: diversification through NCDs

Funding costs were a key theme in management commentary at the consolidated level. The CFO disclosed consolidated finance costs of INR 221.3 crore in FY26 as a driver of margin compression.

In Q&A, management also discussed diversification of borrowings through non-convertible debentures. It stated the NBFC raised about INR 25 crore of fresh NCDs and the broking entity raised about INR 150 crore of fresh NCDs. The stated intent was to diversify borrowing sources and reduce reliance on banks, aligned with the RBI’s broader intent for corporates to reduce dependency on bank borrowing.

What to watch from here

SMC Global’s FY26 narrative is not a single-track growth story. It is a reset year. The group’s fee-based businesses, especially insurance broking and distribution, delivered strong momentum and helped offset pressures from funding costs and a lending slowdown. At the same time, the financing business appears to be deliberately repositioned toward secured, diversified products, with management expecting a return to measured growth.

The next phase will likely hinge on three execution checkpoints: sustaining broking profitability in a post-regulation derivatives landscape, converting the composite broker upgrade into tangible reinsurance-linked revenue, and scaling the NBFC book without diluting the asset-quality metrics the company has highlighted as its core achievement in FY26.