B N Rathi Securities Ltd Management Discussions

Annexure-8

Introduction

In the financial year 2024, B.N. Rathi Securities Limited continued to strengthen its market position despite a volatile economic environment. Our commitment to leveraging technology and enhancing client experiences has been central to our strategy, resulting in robust financial and operational performance.

During the year the company raised its capital through preferential issue for the incremental working capital.

Economic Environment

The global economy faced significant headwinds, including geopolitical tensions and inflationary pressures. Domestically, the economic recovery post-pandemic provided opportunities for growth in the stock broking sector. Regulatory changes aimed at enhancing market transparency also influenced our operating environment.

Industry Overview

The stock broking industry witnessed increased participation from retail investors, driven by heightened market awareness and digital access. Competition intensified with the entry of discount brokers offering low-cost trading solutions. Technological innovation, particularly in fintech, reshaped client expectations and service delivery models. We being corporate member of the National Stock Exchange of India Limited (NSE) in the Capital Market, Future & Option and Currency Derivative Segments, the Bombay Stock Exchange (BSE) in the Capital Market and Future & Option Segment, Multi Commodity Exchange (MCX) and DP services with CDSL, we stand first in bringing new compliance implementations to make ourselves complied in all areas.

Financial Performance

Our revenue grew year-on-year, primarily driven by increased trading volumes and higher client acquisition.

Risk Management

We identified market volatility, regulatory changes, and cybersecurity threats as key risks. Our robust risk management framework includes real-time monitoring of trading activities, regular compliance audits, and comprehensive cyber security protocols to mitigate these risks. We have been fashioning our own responses to these challenges and we believe that we can turn them into opportunities, which can unlock growth for us in the future.

Opportunities

1. Growing Financial Services industrys share of wallet for disposable income.

2. Regulatory reforms would aid greater participation by all the class of investors.

3.Everage in technology and digital transformation to enable best practices and process. Threats

1. Slowdown in global liquidity flows

2. Intense competition from local and global players.

3. Geo-global tensions Strategic Initiatives

During the year, we invested in upgrading our trading platform, enhancing its speed and reliability. We also launched an Algo service, catering to the growing demand for automated investment solutions.

Corporate Governance

Our commitment to strong corporate governance is reflected in our boards composition, which includes a diverse mix of experienced professionals. Regular board meetings, a strong internal audit function, and adherence to regulatory requirements are pillars of our governance framework.

Future Outlook

Looking ahead, we anticipate continued growth in retail investor participation. Our focus will be on expanding our market share through innovative products, strategic partnerships, and sustained investments in technology. While challenges such as market volatility remain, we are confident in our ability to navigate them and deliver value to our stakeholders.

Details of significant changes

Particulars	Formulae	As at March 31, 2024	As at March 31, 2023	% Change	Reason for Variance
(i) Current Ratio	Current assets / current liabilities	1.37	1.30	5.30%	-
(ii) Debt Equity Ratio	Total Debt / Share holders Equity	2.42	2.82	(13.99%)	-
(iii) Interest Coverage Ratio	EBIT / Interest Expense	17.84	7.32	143.80%	Improved due to debt reduction and significant decrease in interest expense
(iv) Return on equity (%)	Net profit after tax/Share holders Equity	17.33%	18.76%	(7.60%)	-
(v) Debtors Turnover Ratio	Credit Sales / Average Account Receivables	4.88	4.39	11.01%	-
(vi) Net Working Capital turnover ratio	Credit Sales / Working Capital	0.89	1.19	(25.13%)	Declined due to increase in current assets
(vii) Net Profit Ratio(%)	N et profit after tax/ Total Sales	21.67%	18.53%	16.95%	-
(viii) Return on Capital employed (%)	Operating Profit / Capital Employed [OP=EBIT]	24.64%	30.39%	(18.91%)	-

Conclusion

In conclusion, our Company is well-positioned to capitalize on emerging opportunities in the stockbroking industry. Our strong financial foundation, strategic initiatives, and commitment to excellence ensure a promising future for the company and its stakeholders.

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.

	For S.S. Reddy & Associates
	Practicing Company Secretary
	Sd/-
	S. Sarveswara Reddy
	Practicing Company Secretary
	M.NO. 12619; C.P. No: 7478
Place: Hyderabad	UDIN:F012619F000351419
Date: 11.05.2024	Peer Review Cer. No.: 1450/2021