About the company: 

Financials

The Co. was established in 1994 and entered the equity broking segment in 2000. Subsequently, it diversified its offerings by undertaking derivatives trading in 2007, currency trading in 2008, and commodities trading in 2012.

In 2016, it was registered as a Mutual Fund Advisor with AMFI, and in 2018 it registered as a Category I Merchant Banker & Portfolio Manager with SEBI. In 2020, it moved from the SME platform to the BSE Main Board.

Share India Securities Ltd is a financial services provider that utilizes technology to offer customized capital market-based solutions to clients. It provides financial products and personalized services to retail and corporate clients, including equity broking, currency and commodity derivatives, depository participant services, mutual fund advisory, and distributorship.

Product/Service Offerings

• Broking & Depository: This involves Equity/Derivatives, Currency, Commodity, and Algo Trading.

• Merchant Banking: This includes IPO, Valuation, Advisory, and M&A.

• NBFC: This encompasses SME Loans and Personal Loans.

• Insurance: This includes General Insurance and Life Insurance.

• Other: Overseas trading and wealth management services.

Revenue Mix - FY23

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Presence and client base

The co. has a PAN India presence with 61 branches of NBFC business and, 293 sub-brokers/franchisees. Having a client base as:

Broking- 38,270

NBFC- 67,880

Mutual Fund- 7,176

Institutional- 102

M&A and new launches

On Mar 24, the company acquired Silverleaf Capital Services. This technology-driven HFT company leverages mathematical modeling and integrated trading capabilities to provide innovative solutions like Low Latency Statistical Arbitrage, Market Making, and Research Project support. The board also approved the merger of Silverleaf Capital with the company.

In FY24, the co. they launched the Algo Platform – uTrade Algos for automated trading.

Management Profiling

Mr. Parveen Gupta (Chairman & Managing Director)

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He is the Chairman and Managing Director of the Share India group, a veteran in the stock markets with over 31 years of experience, and he oversees strategy and finance at the group level.

Mr. Kamlesh Vadilal Shah (Managing Director)

He is the Managing Director of Share India Securities Limited and has over 27 years of experience in the financial markets & understanding of legal & regulatory compliance. He is an Accredited Chartered Accountant and a Certified NISM, NCFM & MCCP. He is the President of the Association of National Exchanges Members of India and serves on the BSE & India INX advisory committee.

Mr. Sachin Gupta (Chief Executive Officer & Whole-Time Director)

He is the promoter and CEO of Share India Securities, his customer-first approach has led to the retail internet-based trading platform and subsequent plans to launch cutting-edge technologies for trading.

Market share of stock brokers

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Financials

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Looking at the sales figures it is visible that the topline of the company has grown at a 5-year CAGR of 48.4% with an average growth rate of 52.4% in the last five financial years, the company has also shown a staggering operating profit margin of 44.0% in FY24 with an average OPM of 37.0%, the company has also maintained a healthy net profit margin 29.0% in FY24.

75% of the topline comes from the proprietary trading business and 15% comes from commission and fee income suggesting that the brokerage business of the company has little contribution.

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Looking at the quarterly figures the evident thing is that the Q1 of each FY is a down quarter where the sales figures are lower as compared to Q4 of the previous year having said that the company has consistently recorded a 20%+ growth in Q4 of the previous three financial years and in its latest con call management is focused on increasing its retail clients 2 lakh+ in next 2-3 years and also the company is heavily investing in technological support and new innovative products. 

This is expected to enhance their Algo trading capabilities and retail offerings, which in turn will drive growth and client acquisition company has taken new initiatives such as uTrade Algo and MTS (Multilateral Trading System) for which the company has set an internal target of Rs 500 Cr in 3 years and for which they have also incorporated a subsidiary named Silverleaf Capital Services.

Peers

​When compared to its peers on a q-o-q basis Share India has the lowest topline figure thus on a small basis it has registered the second highest average growth rate of 11.0% over the last twelve quarters and has the reasonable average OPM and NPM of 40.0% and 27.0% respectively.

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KPIs

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Let’s look at some of the ratios one by one

• The company's ROE is on the lower side among its peers. This is due to the reduction of contribution from the equity multiplier, as the company has been able to maintain its net profit margin. 

  
  

• If we examine the variance between the company's gross interest income and net interest income, it's apparent that the company has a higher interest burden compared to peers such as Angel One and IIFL Securities.

  
  

• All the other peers earn the majority of their revenue from commissions and fees an average of 83% while Share India earns 15% from this source, on the contrary, Share India earns more than 75% of its revenue from its trading business.

  
  

• Share India’s financial position is characterized by high liquidity, with 70% of its assets consisting of cash and cash equivalents, compared to HDFC's significantly lower 6%.

  
  

​Client base (Brokerage*)

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Investment in Technology

Key points from Con-call Q1FY25

• The total number of Demat accounts in the country reached 16.2 Cr and 42 Lakh accounts were added this month.

  
  

• Short-term challenges in the budget such as a rise in STT in F&O and an increase in capital gain tax.

  
  

• Product Utrade algo launched 8 months back, but it still has a very small customer base, and the management is very optimistic about this product.

  
  

• As per them the internal strategies they are providing on the platform, 80% of the people are making money.

  
  

• As per them, this is a push product and only 1,500 active users are using the platform at least once a month.

  
  

• 2 years back they started merchant banking services and helped 9 companies get listed and for the year FY25 they are targeting around 15-18 companies.

  
  

• Last year they also started MTF (Margin Trade Funding) increasing retail participation.

  
  

• Next year they are also planning to open an AIF and PMS services. The company is focusing on creating diversified revenue streams.

  
  

• When asked about tax increments the management believed that this would not affect them in the long run but may pose some concern in the short term.

  
  

• They have pledged 37.5% of their shares but have not borrowed any money on it instead they have pledged the shares to obtain margin.

  
  

• When asked about the operating margin, they explained that the OPM has decreased due to the company's diversification and increased employee expenses. They are also making significant investments in marketing. The addition of new business areas and personnel will take time to yield results. Based on this, the management anticipates that margins will return to normal by the end of this year.

Projections

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As per the latest con call held by the company, the management has given a growth guidance of 20% CAGR growth over the next 5 years and maintaining an average NPM of 30% over a similar period thus the above projections of topline and bottom line have been made as per the management guidance. This growth maintains the same share price next year the share will be available at a P/E of 11.3x. But if we take the bottom-line growth of 25% the share will be available at a P/E of 13.5x.

Valuation

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Technical

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