Share India Securities Ltd

NSE:SHAREINDIA

Q1-2026 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to Q1 FY '26 Earnings Conference Call of Share India Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Kumar Sharma from Adfactors PR Investor Relations team. Thank you, and over to you, sir.

[Amit Kumar Sharma]

Thank you, Batya. Good evening, everyone. On behalf of the entire management, I thank all the participants present on the call and wish you a very warm welcome to our Q2 earnings conference call.

To guide us through the results today, we have with us the senior management team of Share India Securities Limited, represented by Mr. Kamlesh Shah, Managing Director; Mr. Sachin Gupta, CEO; and Whole-Time Director, Mr. Rajesh Gupta, Director; Mr. Abhinav Gupta, President, Capital Markets; and Mr. [indiscernible] Tiwari, who will join us as the Head of the Wealth Tech division.

Before we begin, please note that this conference may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. We will commence the call with the opening brief by Mr. Kamlesh Shah Managing Director followed by the business highlights from Mr. Sachin Gupta, CEO and Whole-time Director. After this, we will open the forum for the Q&A. With that, I will now hand over the call to Mr. Shah to share his opening comments. Over to you, sir. Thank you.

[Kamlesh Shah, executive]

Hello. Thank you, Amit. Good evening, everyone. I welcome you all to the first investor call to share the performance of the company for quarter 1 financial year '25, '26. Currently, we are witnessing a lot of headwinds, mainly because of the external factors and tariff-like issues. However, the industry in the first quarter has been experiencing supportive development that we are positively influencing our performance. A trend that is now clearly being realized -- we are especially excited by the immense potential yet to be unlocked within the financial service sector.

Below are the detailed financial results for quarter 1 2025, 2026. First, we will discuss stand-alone performance for the quarter 1. Quarter-on-quarter comparison is really very exciting. The total revenue from the operation for quarter 1 was INR 273 crores compared to INR 188 crores for quarter 1, 2025. Impressive 45.6% increase quarter-on-quarter basis. Profit before tax and profit after tax for quarter 1 financial year '26 was INR 89 crores, and INR 69 crores compared to INR 17 crore and INR 16 crores for quarter 4 of financial year 2025. This represents a significant increase of 427% in profit before tax and whooping 324% increase in profit after tax quarter-on-quarter basis, highlighting our strong operational efficiency.

Coming to year-on-year comparison for the stand-alone results. Total revenue from the operation was INR 273 crores compared to INR 324 crores for quarter 1 financial year 2025, showing a decline of 16% year-on-year basis. Strictly speaking, year-on-year basis comparison, does not give any comparable solutions because the situation in quarter 1, '25 was different. And thereafter, we had a lot of development on [indiscernible] on the tariff front, on these [indiscernible] and many other disturbances which has affected the performance of last 2 quarters of the last financial year. However, we have workup that particular situation. And now we are on a better footing.

Profit before tax and profit after tax for quarter 1 financial year '26 were INR 89 crores and INR 69 crores compared to INR 94 crores in -- INR 94 crores and INR 72 crores for quarter 1 financial year '25, showing a decline of approximately 6%. Earnings per share for the quarter on a stand-alone basis stood at INR 3.15 on face value of INR 2 per share. Reflecting healthy profitability per share. Coming to the consolidated financial numbers. Quarter-on-quarter comparison, the total revenue from the operation for quarter 1 financial year '26 on consolidated basis was INR 341 crores compared to INR 240 crores in the last quarter, making a substantial 42.57% increase compared to the previous quarter.

For quarter 1 financial year, profit before tax was INR 111 crores and profit after tax was INR 84 crores compared to profit before tax of INR 23 crore and profit after tax of INR 19 crores in the previous quarter. This reflects approximately 379% increase in profit before tax and 353% increase in profit after tax quarter-on-quarter basis, demonstrating robust growth across our consolidated entities.

Coming to the year-on-year comparison, the total revenue from the operation for quarter 1 was INR 341 crores compared to INR 414 crore a decline of 17.5% Y-o-Y basis. Profit before tax for quarter 1 financial year '26 was INR 111 crores compared to INR 131 crores in the in the quarter 1 of financial year '25, and profit after tax is INR 84 crores in quarter 1 [indiscernible] '26 compared to INR 103 crores for financial year '25, showing a decline of approximately 18%.

Earnings per share for the quarter has been recorded as INR 3.86 on face value of INR 2 per share. We have declared a dividend of INR 0.30 per share on the face value of INR 2 per share. The company has shown strong performance and significant rebound from last quarter's result across all the segments. We are very pleased with the results and we believe this sets a positive tone for the rest of financial year. The past few years have marked our transition from traditional broker to full-fledge tech financial service provider. The company has remained focused and taken the right steps with the right people to achieve this transformation.

Carrying this legacy forward, we are now venturing into new segment of wealth tech a comprehensive technology-driven product design to solve all classes of investors. In line with this exciting development, we are pleased to announce that Mr. [indiscernible] a well known in the industry has been interested with the responsibility of this project. And we welcome Mr. [ Prabhakar Tiwari ] to Share india family. He is with us on this conference call. So he will give you detail of the project, and Sachin will give you overall view of the developments and the new initiatives that we have taken and the way forward. I would like to acknowledge exceptional contribution of the team led by Mr. Sachin Gupta, CEO for their efforts in creating opportunities and converting them into results, which has significantly contributed to the historic growth of Share India as a group.

To conclude, I would like to reiterate our commitment to growing sustainably and creating robust ecosystem that provide sustainable long-term growth opportunity for all of our stakeholders. Thank you. With these words, I would like to hand over the proceeding to Mr. Sachin Gupta. Thank you.

[Sachin Gupta, executive]

Thank you, Kamlesh. Thank you for the detailed presentation about the Q1 results. Good afternoon, everyone. Thanks for taking time out for this con call. As Kamlesh has said quarter 1, especially being a very [indiscernible] quarter as we have seen a good rebound on the Q4 of the last financial year. And this particular quarter was very happening quarter for the company like a lot of new initiatives and steps have been taken. We were trying since last -- some months and many years. And all these steps are forward-looking and towards the commitment to our investors where we say that [indiscernible] here to be a more stabilized company focusing on the diversified revenues and run by the hardcore professionals, [indiscernible] are by hardcore professionals.

So what we see in this particular financial year. First of all, I would like to highlight that [indiscernible] book which work drop to INR 186-odd crores by Q4 last financial year has jumped by around 40% in this quarter, and we have closed the book around INR 315 crores. So the [indiscernible] gives us more stability in our revenues. So that also has still increasing the penetration towards the retail side of the business. And so the core pace of [indiscernible] and this market the way market is growing. So this particular financial year, we can see the [indiscernible] book is growing at least 20% or maybe 30% from here on. And another thing that we achieved is we closed the INR 100 crore NCD [indiscernible] in this quarter, which was at 10.75%. And the best part is a lot of institutional indications, retailers and HNI has participated in [indiscernible] and our [indiscernible] very, very well accepted in the market. That's the first time in our history that we came up this kind of [indiscernible], and this was well accepted, and this opened a new door for the company. For the further fundraiser for in the future.

And another big step towards our future is, we got the permission from the SEBI for the PLS license which we explained in the last quarter that we have applied, but we got the permission from the SEBI. And luckily, as we are committed to work with the professionals. I cannot name the professionals right now, but that will be disclosed in coming months. So one guy from the industry having more than 18 year of experience with different [indiscernible] funds and hardcore guy of this industry has agreed join us [indiscernible] will be launched by September, by September 1, [indiscernible] will be launched on the PLS side. So this is a very the forward-looking steps, we were looking to enter into the fund management system, where AIF and PMS should be part of our revenue and product offering.

So PMS is the first step. Once we get stabilized with it. Definitely, we have [indiscernible] in our mind. Going further, we might go towards the ASR also. PMS, as I said, again, will be run by the professional team and we are focused in coming years, we also become a good revenue stream for the company and stabilizing the overall revenue for the Share India.

And going for another project, which we announced in this quarter is [indiscernible]. [indiscernible] is a project that Kamlesh explained, is a project towards wealth tech company we want to launch. Mr. [indiscernible] as you already know had joined hands with Share India. It's now Wealth Tech startup for Share India and for [indiscernible]. So the idea is that [indiscernible], we are seeing also net digit belong to the Indian retailers. So if India is going to grow by sharing would not be a part of that growth by offering at least some products for the retailers Primarily, we are a B2B company. And I appreciate my management board that they gave us a permission to enter into the hardcore [indiscernible] business. It's very tough for any B2B company to enter into B2C. So you encourage to do that and the management and Board showed that courage [indiscernible]. We have seen a growth of [indiscernible] accounts per month to 100,000 account per month. He has seen all the journey -- years planned and [indiscernible] commitment towards the business.

And now the [indiscernible] this project, and we believe [indiscernible] will explain in his comments afternoon that when we will commence the business.

Our goal is to -- it's not only the broking. It's not only the is doing. So it's a complete financial product with broking with wealth products, with financing with everything. So next 10 years, as I said, we believe that if we somehow counter this, this will further stabilize and it will stabilize. It will help us grow more what we are expecting with only one way of B2B business. So you guys can see that Share India is constantly taking steps every quarter towards entering into the B2C space of the country, like institutional business got started, PMS now MTF, project. So mutual [indiscernible] will be taking the lead in mutual [indiscernible] also now that product will also be offered to the clients via this project.

And as I said, [indiscernible] we have so much regulatory challenges in last financial year, especially Q3 and Q4. So we believe that those things are now stabilizing a bit and business is picking up, which is shown in the results of Q1. So broadly that regulator is already done with the changes. So if there are no much on the regulatory side, so we believe this particular financial year will make somewhere 20%, 25% growth based on last financial year.

One more thing I want to add here that we got permission from the SEBI and exchanges for the merger of [indiscernible]. This is another big thing which was stuck with the regulatory approval from the exchanges and the SEBI. We just received it 15 days back. And going further, [indiscernible] is going to be a great acquisition. We are expert in SF trading side and quant trading side. So they will again now will move to the NCLT. And I hope in the next 6 months, this merger -- this financial merger will happen. And with the [indiscernible] coming in our base, it will again boost our revenues from the different line of business, which we are not doing right now. Again, focus is on stabilization and growth go.

So this is from my side, and thank you for giving me this chance to explain about the quarter and the future growth. Thank you very much. And [indiscernible], over to you, if you can please explain about the project growth. Thank you, guys.

[Unknown Executive]

Good evening, everyone. I am delighted to join today's earnings call alongside the sharing leadership team. I am from Prabharkar Tiwari with more than 2 decades of leadership roles across finance, consumer and technology. In my last role as [indiscernible] Growth Officer of [indiscernible], I had the privilege to work alongside the management there to scale NGL1 to #3 top 3 brokerage in the country, and transform a traditional brokerage house to a full stack fintech platform.

I extend a warm welcome to our investors, analysts and valued partners, as I talk about it [indiscernible] today. Over the past few months, I have had the privilege of working closely with the team at Share India to work towards building our next big growth engine, Project [indiscernible], Share India's wealth tech venture. I would like to briefly share our vision and why we believe it is a game changer for both Share India and our investors.

India's wealth management space is at an inflection point, with over 80 million to 100 million plus mass and emerging affluent investors seeking holistic wealth guidance beyond trading. In Tier 2 cities, represent a massive white space and differentiated market entry opportunity. Project grown leverages share India strength in institutional trading infrastructure AI Algo-led tools and strong compliance DNA while expanding into wealth tech, capturing a broader share of clients and their investable capital from INR 1 million to INR 10 crores.

Unlike single product brokers or legacy wealth platforms, project [indiscernible] is designed as a bundled AI-algo-driven wealth platform, seamlessly integrating trading, investing, advisory and credit, especially for underserved Tier 2, 3, 4 geographies in India. I am glad to share with the investors that we have assembled a founding team with the fintech and tech experience from firms like Angel, [indiscernible], Google, among others. And this is just a start. More people are supposed to join us in coming quarters.

Our early surveys and pallet with 1,000-plus retail investors confirm the strong appetite for an integrated wealth platform, which project [indiscernible] in [indiscernible] to build over time, starting from a strong NBP in next 6 to 9 months. In short, Project [indiscernible] is designed to future proof share India's growth diversify revenue beyond trading fee and capture the next wave of India's wealth creations. Project [indiscernible], in my opinion, is not just a growth driver but a reflection of share India's ability to innovate and lead. We look forward to welcome your questions during the Q&A. Thank you, and I will hand it back to [indiscernible], who will open to Q&A.

[Operator]

[Operator Instructions] The first question is from the line of Ritesh Sakarya an individual investor. As there is no response from the current participant, we will move to the next question. The next question is from the line of Nihar Shah an individual investor.

[Unknown Attendee]

Can you break down the performance as also work vertical is working [indiscernible] which segments are contributing more to the top line and how are the margin expansion?

[Sachin Gupta, executive]

This particular quarter, what we saw that, as I said, MPS interest income getting stabilized are going up. Broking business has shown good growth. And the major growth has come from the [indiscernible] size. And it in last quarter when the numbers came down, so the commentary from our side was -- there was some notional M2M losses which we need to book in the balance sheet. That number has recovered a bit. So putting everything together, some recoveries from the investment side, our business gaining -- in stabilized and MPS and broking side. All things have been improving the margins and the numbers.

Also from also primary market activities have picked up in this quarter -- in the last quarter. So everything put together has contributed. I don't know if I have missed something, can you please add?

[Unknown Executive]

Sure, sir. So thanks a lot for your question, ma'am. So Sachin has explained in last couple of quarters, there has been a lot of flux in terms of the regulatory landscape changing. As continuously said in our con calls, we now see some sort of stability coming into the system. And as you can see, the brokering numbers, started stabilizing and seen some marginal growth as well. Major improvement that has happened has happened in terms of that fact that the interest income by the virtue of MTF income has sort of started taking a leg up, which is a very healthy sign because in the long-term scenario, we believe the interest income would be a very major component of a broking component specifically.

Also by the virtue of the cost-cutting measures that we had done internally in the last quarter, have ensured that the cost element remains same while the business has started recurring in this quarter. And as Sachin said, along with it some benefit of the interest or the investment benefits that were there in terms of losses last quarter has started coming up on the improvement side, which has lead to a margin expansion, both at the EBITDA level and PAT level.

[Unknown Attendee]

And sir, I also wanted to know about the new client acquisitions or any targets you have set for this year? And can you explain on [indiscernible]?

[Rajesh Gupta, executive]

Ma'am, we have been very continuously talking about client acquisition and [indiscernible] has been a very beneficial product for us in terms of acquiring clients while that product has been now in line for almost a year now. As discussed on this call, we believe there's a lot more space apart from just broking in terms of client acquisition with [indiscernible] on board, we believe that the Wealth DIY and the wealth technology especially would be a game changer from the long-term scenario. We are not trying to compete on a quarter-on-quarter basis with other broking houses on we believe building a sustainable new digital platform with much more capability beyond the broking, would be a game changer and a better customer acquisition strategy in the longer run. Prabharkar, if you can just want to add some point.

[Unknown Executive]

I want to add something here. So with the intent of expanding our offline retail business. Share India has opened branches in the [indiscernible] cities, secpially in Kolkata, Ahmedabad, Delhi itself and Patna. And we are focusing on all the cities and opening our own branches. So the intent is to serve the clients with -- for the equity services and wealth product also. So our base is expanding in terms of more wealth products like [indiscernible] and [indiscernible] are selling and also equity products.

And secondly, [indiscernible], I told we are also doing a really good [indiscernible]. So number of clients, they are going up. Intent is also to expand our own base in the different parts of the country. And in the offline side, so we primarily focus on giving -- offering multiple products to the retail customers now.

[Operator]

The next question is from the line of Mayank Sharaf, an individual investor.

[Unknown Attendee]

So the first question was regarding your project [indiscernible]. It was very well explained by Mr. Prabharkar. I just wanted to know if you have some growth plans, if you could share some insights?

[Unknown Executive]

Thank you, sir. I mean that's the most relevant question. And I mean with the kind of Share India setup that we are incubating this wealth tech venture, we believe this will play a large role in expanding not just the revenue top line for Share India, but also increase the margin expansion, which is required. And we also believe that this will have a complementary and catalytic impact on other businesses of Share India.

So in terms of growth plan, I mean, I'm not in a position to share a specific number at this juncture. But we will move very fast. And the reason for the sale is that we are -- we have assembled a very filet as a part of this start-up venture of Share India, who are coming from a very mature scale fintech experience, and Share India already has a lot of expertise around trading compliant DNA, regulatory know-how. So I believe we'll hit the ground running. And I expect our MVP to be out in 6 to 9 months. And when I say MVP, mostly the minimum viable product, people look at a few key features with minimal resources as they go to the market. But our MVP will be very strong and we will be testing multiple revenue driving features and customer acquisition features as we go to the market.

And in my opinion, as we start progression from MVP, you will see the impact of this venture, both on the top line and bottom line of Share India very soon.

[Unknown Attendee]

I have L other question. like what are your views on the turnover at the exchange level, given the regulations around derivative gain?

[Sachin Gupta, executive]

Sir, do you want or should I answer?

[Abhinav Gupta, executive]

Yes. I mean you can start and then if there is anything left than I'll chime in.

[Sachin Gupta, executive]

So we have seen that exchanges volumes and overall market volumes are coming down because of the regulatory challenges and the spikes and [indiscernible] so many things are happening in the industry. So as we plan the regulatory changes, believe that they are stabilizing a bit, and regulatory is also of the view. And now they have changed their view under very accommodative in their starts and listening to the industry. So going further, we believe that changes to be more innovative in offering more products.

And like I said, people in [indiscernible] that again, they are trying the strategy because with the current [indiscernible] environment. So not exactly the kind of volumes we were having like 6 months ago. But yes, volumes will not drop from here. And they will start going up in maybe 1 quarter or 2. But it's hard to comment that then we can see the exact numbers were happening 6 months ago. But yes, since a little bit better from here. I think we have always hit the bottom from the volume side. And the changes are very positive that in coming 2 to 3 quarters, exchanges volume will be far better from here on.

[Kamlesh Shah, executive]

Here, I would like to add lines. We have emerged from the regulatory headwinds. We have used this difficult time to consolidate and to take new initiative. We have brought our revenue stream, so that we are more sustainable. And each vertical [indiscernible] revenue to the organization or on the consolidation basis. We believe that the last leg of disruption mainly the tariff war will also only get resolved as government is proactively tackling this issue, and we are taking new initiatives like increasing our stake in metropolitan exchange. And this is just not investment, but this will also provide us one more platform where we can expand our activity, we can get new products and this will add to our turnover.

So I think the difficult time should be behind us. And there would be stability in the turnover. And going forward, we feel that this year could be better as Sachin has already pointed out, we'll have decent growth this year.

[Unknown Executive]

Also, I would just like to add as explained by both Sachin and Kamlesh along with just the stability into the ecosystem. We believe the new innovative product being offered by different exchanges across the board would be really helpful for [indiscernible] going forward?

[Operator]

The next question is from the line of Kunal Chaudry an individual investor.

[Unknown Attendee]

I have one question regarding a shareholding pattern as I can see like in the last few years, like for years, there is a continuous reduction in the promoter shares, Okay. Can I know the reason behind this?

[Unknown Executive]

I think the reduction that you had been seeing across has been very marginal, and that has to do with a couple of factors. Number one, the acquisition strategy that the company employed from 2017 to 2020 and specifically because there was a right issue that was brought out in 2023, which was fully subscribed by the second half of '25 fiscal year. I think because of that, there was some dilution. The promoters have not sold any shares. And I think if you see from the last couple of quarters, the shareholding pattern was on the stability factor.

Just to answer your question in a more pointed way. The promoters have not sold shares. I think all the dilution has been because of either acquisitions or new capital being issued to new investors.

[Unknown Attendee]

And I have one more question regarding the cash flow statement. There are like the last 2 year financing loans like [indiscernible], there is a negative cash flow from operating activity. So -- can I like -- is there any -- and but this on March 2025, the cash flow on the operating activity becomes positive and it becomes like INR 6 crores.

[Unknown Executive]

Yes. So I think you are talking about the full year. You need to understand that ours is a financial company all the money invested into the FDs or any other investment product is also taken as an operating cash flow -- cash outflow. And hence, basis of that, you might see a negative operating cash flow. But I think for a finance company, just looking at pure play cash flow from operations would not be a right metric, because a lot of related are classified as operating activities and taken in a negative cash outflow. So you need to --

[Unknown Attendee]

But if you compare like before 2023, it was continuously positive side, like INR 400 crores, INR 230 crores, INR 68 crores. Okay. But since like March 2023 it was minus INR 170 crores then March [indiscernible] or minus INR 300 crores.

[Unknown Executive]

See, I think it is only because of some investments that might...

[Sachin Gupta, executive]

I think that is because of the investment earlier we not used to do any investments. So we did some strategic investments in last 2 years. Like Master like [indiscernible] like MSCI, I think that is the primary reason.

[Unknown Executive]

But I think those amount would be smaller. I think it has to be a larger context. I think we can address it on a one-on-one at a later time. But as I said, cash outflow from operations for a financial company, not the right metric completely to look at.

[Sachin Gupta, executive]

Second thing, here, I would like to clarify that all the investment that we have made are all business investment. I mean it is not pure investment. And these are our strategic investment, which will pay rich dividends in terms of [indiscernible] of our business activity and getting like-minded brokers onboard and to broaden our revenue streams. And like MSCI, Master Share -- and [indiscernible] all are from the same industry. So what we are focusing at partly because of the merchant banking activity also, we need to invest something in the company that where we have merchant bankers to the market makers for the SME segment. So all the investments are related to business, and these are going to be paying rich dividends in coming months.

[Operator]

[Operator Instructions] The next question is from the line of Trisha Shah, an individual investor.

[Unknown Attendee]

I have a couple of questions. First one being what steps being taken to scale our insurance and mutual fund distribution business, especially in the Tier 2 and [indiscernible] cities?

[Unknown Executive]

Okay. You want to ask both or should we start the answer, ma'am?

[Unknown Attendee]

Maybe you can a start, I can go on with other questions not related to the same business, so.

[Unknown Executive]

Yes. So I think your question is around regarding the mutual fund and the insurance business. As we said, as Sachin has already said, we had opened our branches. We are going both offline and online in both these products. Offline we are opening branches in the major epicenters of the business, including Kolkata, Patna and Delhi branch itself, where we are just not trying to cater to the broking part of, but go beyond broking and into the other part of businesses, including both insurance and mutual fund.

Insurance business, we do a lot of cross synergy from our merchant banking business as well because we get a lot of clientele those businesses and are able to cross-sell a lot of other products by those [indiscernible].

Also, in terms of insurance and mutual fund both as Prabharkar is there, we believe, while we had different suit available with us in both in terms of mutual fund, insurance and other products as well. I think that is what we are trying to accumulate into a single impact and offer to our clients in a digital version. So the acquisition strategy is both physical and digital, along with cross-selling from the other synergies that we get from the other business divisions.

[Unknown Attendee]

Understood. And sir, my other question is on our institutional client base currently are having it at around 140-odd clients. So how are we planning to grow that institutional base beyond that?

[Unknown Executive]

Yes. So ma'am, from an institutional clientele, you are absolutely right, we currently have an [indiscernible] of 144 clients over there. I think we have seen a massive growth in this business in the last 2 years that we have started as a business. And now we see some sort of stability there. But as you said, we currently see easily a growth by being a nascent player and being very tech-enabled in terms of different product suite of in-house tech capabilities. We believe we will continue to acquire customer and gain market share in this. But being a different kind of nature, the clientele would be not as high what you would expect in a retail business.

But easily, even from current levels, we expect on every quarter to grow by 20,30 clients easily.

[Kamlesh Shah, executive]

See here see here, I would like to clarify, don't -- I mean the client for institution business is something different. These are all FII, PII and domestic institutions. That number will be like this only. In fact, this is a great achievement that within a year of operation, we could have 140 institutions working with us. This cannot be compared with the retail clients. Retail client is different. These are institutional clients, and to acquire 140 clients, I mean, institutions toward our [indiscernible] platform that itself is a credit and the [indiscernible] performing very well. Normally, it takes about 3 years [indiscernible], but we have a pleasure of getting breakeven in the [indiscernible] itself. So the [indiscernible] extremely well.

And it has opened up some opportunity. And going forward, we will do even [indiscernible].

[Operator]

The next question is from the line of Ashish Jindal an individual investor.

[Unknown Attendee]

Sir, as of now, most of our revenue and profits come from proprietary [indiscernible] all other businesses. It's quite small in comparison. So I wanted to ask you how should we see your business 5 years down the line? I'm assuming that the proprietary business will continue to then a good ROE. But what to do with all of this cash now, what businesses can you scale because. I do not think that market will give good valuations to the proprietary desk part of the business. What proportion of our PAT can we expect to come from other businesses 5 years down the line?

[Unknown Executive]

I just want to clarify a couple of points before you start, I'll hand. So sir, thanks a lot for your question. I think I'll clarify that not most of our revenue -- I mean, you might -- it might seem from a revenue perspective that most of our revenues come from proprietary trading. But at the bottom line level, not more than 50% or 55% of our profitability comes from proprietary trading that profitability comes from all the other segments combined. So just to clarify on that. But Sachin, sir, you can start and then we will all follow up.

[Sachin Gupta, executive]

Yes. So the point your making is,you guys can easily see and it is very notable that in last 3 years, we are making very [indiscernible] first in different vertical to go away -- to start revenues with the -- in B2B business into different verticals, like merchant banking business advance, NBFC business, institutional desk, insurance side of the business. So all these things we are [indiscernible] 3 years, and every 6 months, we are trying to add some more verticals where we can enter into the retail side of the overall business side.

So like MPS business has started 1.5 years back. Retail branches now we are opening. Now we have started attributing wealth products to the sub-brokers also. So all these things. So if you can see last year. Merchant banking dividend did really well, even if this year, merchant banking we have two mandate of main board IPOs. So the quality of company is far, far better. So we are growing in every vertical slowly and gradually. So growth is in a very organic process. We cannot be very aggressive. It can backfire also. Every vertical is led by some professional. Like we have a separate CEO of insurance, he has full independence to drive his own vertical. Abhinav is doing [indiscernible]. [indiscernible] different guys are with having lots of experience in items diversifying into different verticals and leading in their own vertical.

So that's why the [indiscernible] this year, the bottom line was around 80%, 85%. Now it has come down to 55% as Abhinav explained. So going for that, again, in this quarter only, we are starting PLS -- and the project loan is already, as I and [indiscernible], Prabharkar is sitting here. If intent was not there, then for [indiscernible], then [indiscernible] these things would not be happening. So what we are doing, we are keeping a close control over our cash flows, the cash flows we are generating by our [indiscernible] business. We are using those cash flows to diversify into other verticals where we are serving to the clients, maybe B2B and now B2C also. So I think this is a best case scenario and best strategy and extreme rare case where you see a hardcore B2B company working into different verticals.

And now our goal is not that we are not only focusing on the growing our PAT numbers, [indiscernible]. Our focus is stabilization and participation into different aspects of this business. So that intent is clearly shown since last 3 years. And going further, we'll go deeper into it. And with the people like [indiscernible], the project [indiscernible], PMS, all the things. And now AI is also in our city. So we are planning for it after 1 year maybe. So [indiscernible] and you will not see any big names and big addition on top side. Correct. So all these things we are doing and intent is there. And also use of this cash flow is a fabulous strategy, I think our management has done and going further, we are hopeful that revenue from the profit -- overall revenue grow even the revenues from profit will also grow. But percentage of [indiscernible] revenue should drop to 30%, 35% next 3 to 4 years. That's for my side.

[Abhinav Gupta, executive]

Can I add some few. We have a unique business model. We are focusing on underway solutions and automation. And if you want to break up the revenue out of INR 100 that we earn on the consolidated basis, 25% to 30% comes from the subsidiaries. We have about 8 to 10 subsidiaries, which contribute positively to the consolidated revenue. Out of the balance, INR 70, INR 45, INR 50 is contributed currently by the [indiscernible] and 20%, 25% is contributed by the retail investors. Now we have net worth of INR 2,400 crores as of June, and also the [indiscernible] also gives us opportunity to earn money out of the surplus fund that we have.

And [indiscernible] is a door to attract customers, whatever strategies we use for our business. We offer the same to the clients. We offer the same platform to our clients. We also offer the strategies so that they get affected and they get complete business solutions, and that is where the -- not many clients or the HMI or the brokers are coming to us and joining our platform. In addition to that, the new initiatives that we have taken on PMS side on [indiscernible], -- and the reason on the retail side, [indiscernible], all this will rightly increase our revenue still from the retail investment to a higher side as Sachin has already explained.

[Unknown Attendee]

Sir, just to add on that part, like all of our businesses are good cash generating businesses. So can we like anticipate that 3 years down the line 4 year down the line, the company be a good dividend paying company?

[Sachin Gupta, executive]

We have restricted our dividend payout to 12% of the PAT on a stand-alone basis because we need constantly for expanding our business activity and increase our foothold in the industry. But whenever we have surplus funds or whenever we feel that funds are not generating more revenue than the [indiscernible] we will definitely reconsider our policy and increase the payout ratio. But right now, as we have mentioned earlier also, that we are opening new stream like MTS and other things where we require more fund -- and we have currently [indiscernible] book of around INR 300 crores, which we may take it up to INR 1,000 crores. So this is all part of investment. This is a growing company, and we have a lot of business opportunity and with the kind of diversification and the business verticals that we have created it gives very good opportunity for us to gain [indiscernible] funds available with us. And that is why we are conservative on the dividend payout policy.

[Operator]

The next question is from the line of Kathy Devani from Aditya Birla Capital.

[Unknown Analyst]

Sir, just I wanted to ask one question. So in the consolidated revenue, which we are seeing for Q1 FY '26. So there is a component for net gain on fair value changes like which has spiked up a lot during the quarter from last quarter, which Q4 FY '25. Can you explain what is the reason for this increase, which we can see?

[Unknown Executive]

Sachin, you want to take a start?

[Sachin Gupta, executive]

I will just start then, Abhinav, please take it. So the component you are seeing is the combination of two sides, one is of prop income and another is the change in the investment value of -- from the last quarter. So as I explained earlier, because this quarter was good for our overall [indiscernible] business, the [indiscernible] number has gone up. And as I explained in the last quarter, there was a fair value loss of INR 40 crores because of the drop in the market. So that particular fair value is around INR 16 crores. So overall, it's a combination of two things, prop income and change in the fair value. So that's why the number has gone up. Abhinav, you can take.

[Abhinav Gupta, executive]

Yes. So ma'am, thank for your question. I think the number you -- as you said, is the net gain in fair value change and explained by Sachin is a combination of both incomes, which is proprietary income and investment income. Proprietary income we were doing around INR 250 crores a quarter before all the regulation happening and that number started dropping because of all the regulatory tightening that was happening. And as explained on this call earlier that we have just from the regulatory headwinds. So the proprietary income essentially from all the -- because of the tightening in the derivative market had dropped in the last quarter. Along with that, we also had a double pad because of the inventory loss on the investment that we had. And as sir said, this quarter has been good in terms of both the growth of the derivative business again coming into the 4, where we see even at a consolidated exchange level, we now see that volumes being stable. And we being a pioneer in terms of the technology are able to capture a better market share in the entire equation.

And also we have recouped some of the inventory losses that we had to take on the banshee last year. So that's why from a quarter-on-quarter perspective, you see a very big jump. But if you look at it from a year-on-year perspective, you would see stability into the system.

[Unknown Analyst]

So out of this INR 218 crores, which is there. So how much would be for the fair value changes and how much will be for prop income?

[Abhinav Gupta, executive]

So on a rough estimate basis, as Sachin said in the last quarter, we took an impact of around INR 40 crores in this line item. And of this INR 40 crores, we have recouped around INR 16 crores in this line item this quarter.

[Unknown Analyst]

Yes. Okay. So INR 16 crores will be the change in fair valuing and balance would be from prop income?

[Sachin Gupta, executive]

Yes.

[Operator]

Thank you. Ladies and gentlemen, this was the last question. I now hand the conference over to Mr. Kamlesh Shah for the closing comments.

[Kamlesh Shah, executive]

Thank you, and over to you, sir. Yes. Thank you for participation large number. Your inputs are very valuable to us. And this also gives us insight into our business and we try to explore all the opportunities that are coming in our way. And with the expanding team, we are confident that we are best placed and the unique business model that we have gives us also an edge in securing business. So thank you for your inputs. And thank you for your support. It is your support that is -- you have a lot of confidence to us, and it's an energy for us. And -- going forward also, we look forward for your support. And thank you again for attending this investor meet. Yes, thank you very much.

[Operator]

On behalf of Share India Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.