Anand Rathi Share and Stock Brokers shares drop 6% after Q2 results. What’s spooking investors?

Shares of Anand Rathi Share and Stock Brokers dropped around 6% on Wednesday even after the company reported a 50% YoY jump in consolidated net profit to Rs 41.94 crore for the July-September quarter of the ongoing FY27, from Rs 27.9 crore reported in the same period last year.

Anand Rathi Share and Stock Brokers announced its Q2 results in the post-market hours of Tuesday, reporting more than 20% YoY increase in revenue from operations to Rs 273 crore in Q2 FY27, from Rs 227 crore in Q2 FY26. The company’s interest income, meanwhile, rose around 9% YoY to nearly Rs 106 crore during the quarter under review.

Why are Anand Rathi Share and Stock Brokers shares falling?

Despite the rise in net profit and revenue, the shares of the company fell to Rs 512 apiece on Wednesday morning. This may have been due to pressure on margin as expenses increased around 14% YoY to Rs 216 crore during the quarter under review, driven by a 31% YoY increase in employee benefit costs. EBITDA margin dropped 423 bps to 36.5%.


Its assets under management (AUM) increased more than 29% YoY to Rs 9,999 crore while MTF book jumped over 38% YoY to Rs 1,499 crore during the second quarter of the ongoing financial year 2027. EBITDA stood at Rs 99.9 crore, with an EBITDA margin of 37%. The company said it saw broad-based growth across business segments during the quarter, with non-broking revenue rising 21% YoY.

Also read | Anand Rathi Share and Stock Brokers Q2 results: Profit jumps 50% YoY to Rs 42 crore, revenue rises 20%

What Anand Rathi Share and Stock Brokers management said

The quarter was characterised by heightened market volatility arising from geopolitical issues and regulatory changes, said Pradeep Gupta, Chairman and Managing Director of Anand Rathi Share and Stock Brokers. Despite these headwinds, investor participation remained resilient, supported by sustained domestic inflows and continued growth in mutual fund assets, he added.

"Against this backdrop, we delivered a steady performance…reflecting sustained business momentum amid volatile market conditions," the executive noted, adding that growth was driven by healthy traction across both our broking and non-broking businesses.

Anand Rathi Share and Stock Brokers Whole-time Director Roop Kishor Bhootra meanwhile said the company delivered a resilient operating performance during the quarter, reflecting the strength of its balanced and scalable business model. "We continued to expand our trail-based revenues, which now cover 76% of our employee costs, further strengthening the resilience and visibility of our earnings profile. Our performance continued to benefit from multiple growth drivers. Notably, 55% of our clients have been associated with us for more than three years, reflecting the strength of our longstanding client relationships. MTF interest income increased by 36.3% YoY to Rs 49.6 crore, while distribution income rose to Rs 32.7 crore during the quarter. The growing contribution from these businesses reflects our progress in building a diversified earnings profile with a higher share of recurring and non-broking revenues," he added.

Going forward, the company will remain focused on deepening client relationships, strengthening technology infrastructure, and broadening product and advisory capabilities. These efforts will support sustainable growth and create long-term value for all stakeholders, Bhootra said.

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Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.