B N Rathi Securities Ltd Management Discussions

Introduction

In the financial year 2024-25, our company navigated a complex and evolving market landscape marked by regulatory tightening, economic uncertainty, and shifting investor behavior. Amid these challenges, we focused on operational resilience and digital innovation, allowing us to maintain business momentum and strengthen our position within the Indian stock broking industry. Our strategic emphasis on client-centric solutions and technology-driven services helped us sustain performance while preparing for long-term growth.

Economic Environment

The global economic environment during FY 2024-25 remained uncertain, shaped by persistent geopolitical tensions, elevated inflation levels, and tightening monetary policies across major economies. These factors contributed to increased market volatility and cautious investor sentiment worldwide.

On the domestic front, while India continued its post-pandemic recovery with steady GDP growth and resilient consumption, the financial markets faced headwinds from regulatory reforms and liquidity constraints. For the stockbroking industry, this presented a mixed landscape·offering new avenues for participation but also demanding greater agility and compliance from intermediaries.

Industry Overview

As a corporate member of the National Stock Exchange of India Limited (NSE) in the Capital Market, Futures & Options, and Currency Derivatives segments, the Bombay Stock Exchange (BSE) in the Capital Market and Futures & Options segments, the Multi Commodity Exchange (MCX), and as a Depository Participant with CDSL, we have proactively adapted to these changes. We have implemented new compliance measures to align with regulatory requirements and continue to innovate our service offerings to meet the evolving needs of our clients.

Financial Performance

In the financial year 2024-25, our financial performance reflected the dual impact of evolving market dynamics and proactive strategic adjustments. While revenue growth remained modest, it was underpinned by steady trading volumes in the cash segment and continued client acquisition, particularly among retail investors.

The year also brought significant regulatory interventions·including changes to the equity derivatives framework, revised transaction charges, and enhanced compliance requirements·which impacted overall market turnover and increased operational costs across the broking industry. Despite these challenges, our diversified service offerings and prudent risk management allowed us to cushion the revenue impact from reduced activity in the F&O segment.

Our focus on enhancing technology infrastructure and expanding digital client engagement channels helped maintain a stable contribution from ancillary services such as depository operations, distribution of investment products, and research-driven advisory.

Risk Management

During FY 2024-25, the operating environment was shaped by heightened market volatility, evolving regulatory frameworks, and growing cyber threats·all of which posed critical risks to business continuity and investor confidence.

Our comprehensive risk management framework is designed to address both systemic and operational risks. Key elements include:

Real-time surveillance of trading activities to detect and prevent anomalies.

Periodic internal audits and compliance checks to ensure adherence to evolving SEBI guidelines and exchange regulations.

Advanced cybersecurity protocols to safeguard client data and ensure platform integrity amid increasing digital threats.

We have been proactive in responding to these risks through internal process enhancements, greater automation, and strategic compliance investments. These responses not only strengthen our operational resilience but also position us to capitalize on shifts in market expectations and investor behaviour.

Strategic Initiatives

In response to the shifting market dynamics and evolving investor expectations, we undertook key strategic initiatives during FY 2024-25 to strengthen our technological backbone and broaden our service offerings.

Platform Modernization: Significant investments were made to upgrade our core trading infrastructure, improving platform speed, reliability, and scalability. This initiative aimed at delivering a seamless and responsive experience across all user interfaces·desktop, mobile, and API-based systems.

Algorithmic Trading Services: Recognizing the growing interest in data-driven and automated investment strategies, we launched our Algo Trading platform. This caters to both advanced retail traders and institutional clients seeking high-frequency and rules-based execution solutions.

Process Digitization: Internal operational processes were increasingly digitized to improve turnaround time, reduce manual intervention, and ensure greater regulatory compliance.

Corporate Governance

We continued to uphold our commitment to the highest standards of corporate governance, recognizing its critical role in ensuring transparency, accountability, and long-term stakeholder trust.

Board Composition: Our Board comprises a diverse and experienced mix of professionals, including Independent Directors, who bring valuable industry insights and governance expertise.

Audit and Oversight: The internal audit function remains independent and robust, conducting periodic reviews across operational and compliance areas to ensure regulatory adherence and identify process improvement opportunities.

Ethical Conduct and Compliance: We strictly comply with the regulations laid out by SEBI, the stock exchanges, and other statutory bodies. Training programs and awareness sessions are regularly held to instill a strong compliance culture across all levels of the organization.

Our governance framework is continuously reviewed and enhanced to meet evolving regulatory expectations and align with global best practices.

Future Outlook

Looking ahead, we expect retail investor participation to remain a key growth driver, supported by increasing financial literacy, digital access, and regulatory initiatives aimed at deepening market penetration.

Our strategic focus will be on:

Expanding market share by offering differentiated investment products tailored to evolving investor needs.

Forging strategic partnerships with fintechs, research providers, and ecosystem enablers to enhance value-added services.

Sustained investment in technology, with emphasis on automation, analytics, and user experience to drive scalability and operational efficiency.

While macroeconomic headwinds such as market volatility, interest rate uncertainty, and global geopolitical risks may pose near-term challenges, we remain confident in our agility and preparedness to adapt. Our robust risk management framework, client-centric approach, and disciplined execution strategy position us to deliver long-term value to all stakeholders.

Particulars	Numerator	Denominator	March 31, 2025	March 31, 2024	Variance	Reasons for variation in excess of 25%
a) Current ratio	Current assets	Current liabilities	0.71	0.53	33.81%	Decrease in the customer balances has resulted in increase in current ratio.
b) Debt Equity ratio	Total debt	Total equity			NA
c) Debt service coverage ratio	Earnings available for debt services	Total interest and principal repayments	NA	NA	NA
d) Return on Equity ratio / Return on Investment ratio	Net profit after tax	Equity	0.14	0.17	(16.66%)
e) Inventory Turnover ratio	Sales	Average inventory	NA	NA
f) Trade receivables turnover ratio	Total sales	Average Trade receivables	3.50	4.82	(27.49%)	Increase in Trade receivables during the current year has resulted in decrease in trade receivable turnover ratio.
g) Trade payables turnover ratio	Total purchases	Average Trade payables	1 0.53	10.34	(1 . 06 %)
h) Net capital Turnover ratio	Sales	Working capital	(1.13)	(0.56)	100.96%	The decline in customer balances has led to a reduction in working capital, which in turn has resulted in a lower working capital turnover ratio
i) Net profit ratio	Net profit after tax	Sales	5.25	0.22	( 7. 16 %)
j) Return on capital employed	Earnings before interest and taxes (EBIT)	Capital employed	0.21	0.25	(16.36%)
k) Return on Investment	Realised and Unrealised Gain on investments	Average Investments	0.15	-0.10	(248.98%)	The increase in realized and unrealized gains this year, compared to losses in the previous year has resulted in increase in return on investment

Conclusion

In conclusion, our Company stands well-positioned to harness the emerging opportunities within the evolving stockbroking industry. Backed by a solid financial foundation, forwardlooking strategic initiatives, and an unwavering commitment to operational excellence and compliance, we are confident in our ability to deliver sustained value to our clients, shareholders, and all stakeholders.

As we navigate a dynamic market environment, our focus on innovation, risk management, and customer-centricity will continue to drive growth and reinforce our leadership in the sector.

Cautionary Statement

The statements made in this report describe the Companys objectives and projections that may be forward looking statements within the meaning of applicable laws and regulations. The actual results might differ materially from those expressed or implied depending on the economic conditions, government policies and other incidental factors, which are beyond the control of the Company.