Rationale

While arriving at the rating, ICRA has taken a consolidated view of PhillipCapital (India) Private Limited (PCPL), its subsidiaries and its Group company, Phillip Finance & Investment Services India Private Limited (PFISIPL), given the linkage between the companies with a common management and complementary product portfolios. PCPL is primarily engaged in securities broking while PFISIPL serves as the lending arm and provides loan against share (LAS) facilities to PCPL’s retail clientele. The two companies are together referred to as the Phillip Group India (PGI) or the Group hereafter. The rating continues to factor in PGI’s experience in capital markets and the securities broking industry, its established position in the institutional segment, and the benefits accruing by virtue of being a part of the Singapore-based Phillip Group, which has significant experience in the financial services industry. Besides broking income, the Group’s revenue profile remains supported by interest income, fee income and gains from the bond warehousing and investment-cum-trading book. PGI’s profitability remains adequate, with an average return on equity (RoE) of 14.4% over FY2021–FY2025, though some moderation was observed in H1FY2026, where RoE declined to an estimated 9.1%, reflecting the lingering impact of subdued trading volumes following industry-wide headwinds in H2FY2025. The rating also considers the Group’s adequate capitalisation and liquidity profile. The rating, however, remains constrained by the modest scale of operations, and high dependence on capital markets with limited revenue diversification. It also factors in the exposure to credit and market risks, given the nature of the underlying assets (LAS accounts for a predominant share of the portfolio), and the concentrated resource profile.