NBFC funding cost and margin compression
Cost of borrowing at 10.57% with ROA of only 2.42% creates thin margins. Management expects only 15-20 bps reduction over 6 months due to repo rate cuts being gradually transmitted.
SMCGLOBAL / Q3-FY26 / risks
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SMC Global Securities · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
Financing portfolio decline from strategic restructuring
AUM declined from ₹129.1 crore (FY25) to ₹117 crore (9M FY26) due to conscious exit from unsecured SME lending and surrogate programs—portfolio shrinking is described as temporary but duration is uncertain.
Discount broking gestation costs suppressing profitability
SMC's discount broking arm (Stocks Carta) ARPU of ~₹10,000 per active client versus ~₹20,000 for full-service, with heavy marketing spend (12,000 accounts/month) compressing near-term margins despite scale benefits long-term.
Insurance distribution concentration risk
Digital channel contributes only ~1% of insurance policies; 99%+ sourced through POS terminals, agents, and MISPs creates operational leverage risk and limits scalability without brick-and-mortar expansion.