Dhan parent posts Rs 905 crore revenue, profit falls 20%

Key Takeaways

• Raise Securities revenue rose 14% to Rs 905 crore in FY26, but profit fell 20% to Rs 326 crore
• F&O trading accounts for 70% of income, leaving the company exposed to SEBI's tightening rules
• The company's net worth jumped 55% to Rs 916 crore, earning an ICRA A+ rating with stable outlook

Raise Securities, the company behind trading platform Dhan, reported Rs 905 crore in net operating income for FY26, a 14% jump from Rs 795 crore the previous year. Profit, however, fell 20% to Rs 326 crore, down from Rs 408 crore in FY25. The culprit: higher marketing spend, team expansion, and what ICRA called "one-off non-recurring expenses."

The numbers come from a fresh ICRA ratings report that paints a mixed picture. Revenue is growing, the balance sheet is stronger, and Dhan now ranks as India's ninth-largest broker by active NSE clients. But the profit margin compression signals the cost of scaling in a crowded, increasingly regulated market.

Why did profit drop despite revenue growth?

ICRA pointed to three factors behind the expense spike. First, elevated marketing spend. Dhan is competing against entrenched players like Zerodha and Groww, plus newer entrants like Trackk and Sahi. Acquiring customers in Tier 1, 2, and 3 cities requires ad budgets that eat into margins.

Second, team expansion. Scaling operations means hiring engineers, compliance officers, and support staff. Third, the report mentions "one-off non-recurring expenses" without specifying what they covered. The net profit margin still came in at 36%, which remains healthy compared to most fintech startups burning cash. But it's down from over 51% in FY25.

The F&O dependency problem

Here's the number that matters most: 70%. That's the share of Raise Securities' net operating income that comes from derivatives trading, specifically retail futures and options. The company's derivatives turnover exploded from Rs 0.58 lakh crore in FY23 to Rs 11.87 lakh crore in FY26.

That growth looks impressive until you consider the regulatory trajectory. SEBI has been tightening rules on F&O trading. The securities transaction tax (STT) on options recently increased. ICRA's analysts flagged this directly: "The revenue stream remains sensitive to regulatory risks."

“Given the recent hike in securities transaction tax, the industry could witness a moderation in derivatives trading volumes, which could exert pressure on the performance of securities brokers with high reliance on derivatives-driven broking income, including Raise Securities.”

— ICRA Rating Report

This isn't unique to Dhan. Most Indian discount brokers share the same vulnerability. Zerodha's Nithin Kamath has spoken repeatedly about how F&O volumes drive the economics of low-cost brokerages. When regulators clamp down, everyone feels it.

What's going right for Raise Securities?

Despite the profit dip, the company's fundamentals look solid. Net worth surged 55% year-on-year to Rs 916 crore. Total assets expanded 72% to Rs 3,375 crore. The margin trading facility (MTF) book more than doubled to Rs 505 crore, a 133% increase.

Commodities trading volumes rose 67% to Rs 3.43 lakh crore, driven by bullion derivatives activity. ICRA assigned an A+ rating with stable outlook to Raise Securities' bank facilities and reaffirmed an A1+ rating for commercial paper.

Liquidity remains comfortable. The company reported Rs 86 crore in unencumbered cash, Rs 35 crore in liquid investments, and access to Rs 97 crore in additional funding lines. That's against debt repayment obligations of Rs 210 crore.

Where does Dhan stand in the brokerage race?

As of March 31, Raise Securities held 2.3% of active clients on the National Stock Exchange, making Dhan the ninth-largest broker in India by that metric. The platform launched in 2021 under founder Pravin Jadhav, who previously built Paytm Money.

Raise became a unicorn last October after raising $120 million from Hornbill Capital, MUFG Bank, Beenext, and existing investors. The broader Raise Group, which now includes insurance broking and wealth management, reportedly posted consolidated net profit of around Rs 330 crore in FY26.

The competitive field is crowded. Zerodha remains the dominant player. Groww has been expanding aggressively into mutual funds and other products. Upstox and 5paisa hold significant market share. Newer players like Trackk and Sahi are chipping away at the margins.

Can the growth strategy survive regulatory headwinds?

The question isn't whether Dhan can grow. It clearly can. The question is whether spending heavily on marketing and team expansion makes sense when your primary revenue driver faces structural pressure.

ICRA's assessment is cautiously positive. The "resilient" performance and "strong client additions" get noted. But the phrase "sensitive to regulatory risks" appears more than once. The implication: if SEBI continues tightening F&O rules, the current growth trajectory isn't guaranteed.

For now, Raise Securities has the balance sheet strength to weather a slowdown. The A+ rating reflects that. But investors watching the discount brokerage space should pay attention to how quickly these companies can diversify revenue beyond derivatives.

Frequently Asked Questions

What is Raise Securities' revenue for FY26?

Raise Securities reported net operating income of Rs 905 crore in FY26, up 14% from Rs 795 crore in FY25.

Why did Dhan parent company's profit fall in FY26?

Profit declined 20% to Rs 326 crore due to elevated marketing spend, team expansion, one-off expenses, and a tighter regulatory environment for derivatives trading.

What percentage of Raise Securities revenue comes from F&O trading?

Approximately 70% of the company's net operating income comes from derivatives trading, primarily retail futures and options.

What is Dhan's market share among Indian brokers?

As of March 2026, Dhan holds 2.3% of active clients on the NSE, making it India's ninth-largest broker by that measure.

What rating did ICRA assign to Raise Securities?

ICRA assigned an A+ rating with stable outlook to Raise Securities' bank line facilities and reaffirmed an A1+ rating for commercial paper.

Source: Tech-Economic Times / ET