Satish Menon: Thank you, operator. Good day, everyone, and thank you for joining for Geojit Financial Services Q2 and H1 FY 2027 earnings call. Joining me on the call today are Mr. C.J. George, Executive Chairman, Mr. Jones George, Managing Director, Ms. Mini Nair, CFO, Mr. Jayakrishnan Sasidharan, CIO, Mr. Rahul Roy Chowdhury, CEO of Private Wealth, and Mr. Liju Johnson, Company Secretary. I will begin with a brief overview of the operating environment and our business performance, after which I will take you through the financial performance for the quarter and for the first half of FY27. First is on the operating environment and the strategic direction. The second quarter was marked by volatility and corrections in the Indian capital market, particularly during the month of September. In this environment, our focus remained on maintaining customer engagement, supporting disciplined investing, and continuing to build diversified relationship-led wealth platform.
Satish Menon: As on September end, we had a network of 529 offices compared to 525 in Q1. Our client base increased to 17.25 lakhs, and we added 61,657 clients in the half year. Our recurring revenue business continued to build scale. Recurring revenue AUM reached INR 26,737 crores in H1, which is split across mutual fund, overseas AUM, Smartfolios, PMS, and AIF. This is compared to INR 25,230 crores in the end of FY26. Our lending book stood at INR 380 crores as of end of Q2, compared to INR 735 crores a year back. It consists of margin trading facility and loan against shares and mutual funds. These business complement our core broking franchise and broaden the range of solutions available to our clients. Recurring income in H1 is 40% of total income, which has grown consistently over the last few years.
Satish Menon: Just for comparison, recurring income was 25% of the total income in FY23. Now it is 40%. Coming to the Q2 and half year performance. Revenue from operation in Q2 was INR 165.82 crores, which is up 2.5% year on year and up 3.38% sequentially. EBITDA was INR 36.7 crores, while profit before tax stood at INR 20.62 crores. For H1, revenue from operation increased by 6.72%, and EBITDA stood at INR 78.23 crores. The half year performance reflects top line resilience alongside higher operating costs and lower transaction linked activity in the cash market. The quarter's performance reflects a combination of factors. Subdued activity in the cash market affected our transaction and income. But distribution income and growth in fee-earning AUM provided support. We continue to invest in people, technology, and distribution capabilities to strengthen customer acquisition, SIP mobilization, and service delivery.
Satish Menon: These investments are intended to build capacity and improve productivity over time. Employee benefit expense increased by INR 8.17 crores year on year. This increase was mainly attributable to a higher sales personnel headcount, recruitment for our DIFC subsidiary, and expansion of the IT team to support the technology transformation program. And higher incentive in line with the growth of distribution business. In terms of customer assets and gross inflows, customer assets stood at INR 1.12 lakh crore as of September end. Sequentially, reported customer assets were broadly stable. Healthy gross inflows continued during the quarter. But market correction, especially in the month of September, offset some of the underlying inflows. We believe it is important to distinguish between the flow of new investments into the platform and market-linked changes in the valuation of existing assets.
Satish Menon: Gross inflows remained healthy throughout our investment offerings, supported by healthy customer engagement and our distribution network. While the market movements can affect quarter-end AUM, the underlying inflow momentum and continued participation through SIP remain important indicators of customer engagement. We continue to strengthen our field force. In the mutual fund distribution business, our SIP book reached INR 156 crores, and the number of SIP clients is approximately 1.78 lakhs. For the wealth management business, annual ARR net flow, which comprises of net flows in mutual fund, third-party product, and insurance, stood at INR 583 crores in Q2.
Satish Menon: For H1, it stood at INR 1,189 crores. These measures provide an indication of net addition to recurring revenue and linked products. They should be considered alongside gross inflows, redemption, and market-related valuation changes. Mutual fund AUM stood at INR 18,449 crores excluding the JV.
Satish Menon: We are continuing to strengthen our field force capabilities and customer outreach to support our SIP acquisition and deeper product engagement. 79% of our mutual fund income comes from clients who have been with us for five years and plus. In terms of our asset management business, it continues to grow. PMS AIF AUM stood at INR 2,018 crores as of September end, compared to INR 1,449 crores end of March, which is a growth of 39% over March. Asset management net inflows increased to INR 322 crores in Q2 compared to INR 71 crores in the same period last year. For the half year, asset management inflows stood at INR 408 crores. We view this improvement in net flows alongside the growth in AUM and client numbers as an encouraging indicator of momentum of business for our asset management business.
Satish Menon: Within our alternative investment offering, Geojit Yield+, a Category 3 AIF with an absolute return strategy, had an AUM of INR 248 crores as of September end, compared to INR 22 crores a year back. In insurance business, we recorded a gross premium of INR 175 crores in Q2. Insurance remains an important part of our broader wealth proposition and supports cross-selling and deeper client relationships. In the GCC, we continue to engage with NRI clients amid evolving investment preferences and a wait-and-watch environment. We have observed that attractive FCNR deposit offering and market conditions were influencing the allocation of investment across products.
Satish Menon: Rupee movement and global investment opportunities have also shaped client preferences, including interest rates in the US. We have not noticed any major redemptions in our overseas market. We continue to monitor client activity and market sentiments while maintaining our focus on customer engagement.
Satish Menon: Technology remains a key enabler for our transformation. We are investing in our platforms and IT capabilities to improve the client journey, supporting digital onboarding and strengthening our analytics and operational efficiency. To conclude, Q2 FY27 was a challenging quarter for the capital market. Nevertheless, we continue to see healthy inflows, growth in recurring revenue AUM, and a significant improvement in asset management net flows.
Satish Menon: Of course, market-linked valuation movement affected our reported customer assets, along with subdued cash market activity. Our priorities remain to deepen customer relationship, expand SIP and product penetration, and continue to invest in technology. We believe that a broader recurring revenue base, supported by a distribution network and client relationship, will help us build a more resilient and scalable business over the long term. With that, I would like to thank you for your continued interest in Geojit. Thank you very much.
Satish Menon: Over to operator for Q&A.
Operator: Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Baksh Prasher from Desolado Research. Please go ahead.
Baksh Prasher: Hi, sir. Am I audible?
Operator: Yes, you are audible.
Baksh Prasher: Okay, sir. My first question is, sir, given that only a small percentage of our active clients hold more than one product, what specific cross-selling strategies are being deployed to increase product penetration across our existing client base? That is my first question, sir.
Satish Menon: Well, we have close to 20% of our clients who have invested through us in more than one product, and primarily that is brokerage and mutual fund, which is the overlapping one. We have right now penetrated less than 5% of our clients for life insurance and less than 3% for health insurance. Our first focus, of course, is to penetrate more in mutual funds and then we have a lot of scope to do in both insurance life as well as in health.
Baksh Prasher: Okay. All right, sir. That is really helpful. My second question is about the AIF. AIF this quarter was around INR 322 crores against INR 71 crores a year ago. Were there a few large sum investments or was it broad-based retail inflows?
Satish Menon: No, it is primarily broad-based. Though we have few high tickets, I would like to take you towards our AUM. When we look at our PMS, we cater to the lower segment of HNI in that matter in terms of portfolio per client. For PMS, when we look at 1,750 odd crores, the average size of a client would be 75 odd lakhs.
Baksh Prasher: All right, sir. That is really helpful. Sir, just my last question. How much AUM do we expect from the DIFC and Bajaj AMC to add in the H2 of this year?
Satish Menon: We do not give any forward-looking statement. DIFC is still in a very nascent stage, so it may take time. Nonetheless, we do not give any forward-looking statements, sir.
Baksh Prasher: All right, sir. Thank you so much. That is it from my side. Congratulations on a good set of numbers.
Satish Menon: Thank you.
Operator: Thank you. Next question is from the line of Dhaval Pandya from Areeza India. Please go ahead.
Dhaval Pandya: Hello, am I audible?
Operator: Yes, you are.
Dhaval Pandya: Hello. Good afternoon, sir. First of all, congratulations on good set of numbers. A couple of questions. The revenue grew year, profitability was low. What were the main drivers of this decline in bottom line for Q2 and H1? Hello?
Satish Menon: Yeah. I would request Chairman to answer this.
C. J. George: Sorry, can you please repeat the question?
Dhaval Pandya: Revenue grew year-on-year very well, but bottom line didn't grow as the revenue grew. So what was the main reason behind it?
C. J. George: We had in the past also reiterated that the beginning of this year onwards, we have been investing heavily in terms of technology for technology transformation as well as investment in cybersecurity, et cetera. This also resulted in hiring more number of technology resources, competent senior leadership technology resources. Also, we have been hiring people in the field level for better reach as far as the customer engagement is concerned. These were part of the well-thought-out strategy. What impacted was basically the market.
C. J. George: This hiring in both technology as well as in the field, that also resulted in increase in gross inflows for us. This was a part of a well-thought-out strategy, and we had in the past also indicated that the hiring that is happening with regard to retail sales force as well as the technology transformation investment that we are making.
C. J. George: This is basically to service the clients much better going forward. This is not unexpected. Although today, with regard to hiring sales force, et cetera, it will be relatively muted going forward looking at the market situation as well as the emerging geopolitical situation. This is the reason why the expenditure went up largely.
Dhaval Pandya: Okay. Assuming that the geopolitical situation continues and this Middle Eastern war and all continues, what are your measures to outcome this kind of situation? Because we have seen it in last month that such disruptions has come in the equity markets. What is your thought on it, and how will you see to it that your things won't get affected much?
C. J. George: We will focus on increasing the productivity of our field force, rather than hiring more number of people in this kind of market. To be frank, the recurring income-based products has been our focus area. We will continue to focus on that and increase the cross-sell opportunities within our customer base. Fortunately for us, we have not reached any significant percentage in terms of full potential with regard to the customer base. Our customers are largely long-term clients, second-generation clients, even. The customer stickiness is also very high. This is what we are going to do if the market is turning out to be, particularly geopolitical situation turning out to be risky or challenging going forward.
Dhaval Pandya: Okay. Looking at the current revenue contribution by the recurring business is 40% in the H1 of FY27. How do we look at in the coming years, like in next 3 to 5 years, how do we look at it? Like increasing or staying stagnant or in this range only. How do you look at it?
C. J. George: Our plan is to significantly increase the recurring revenue income. This will eventually take care of the cyclicality risk as far as our cash flows are concerned. This is part of a long-term strategy that we have built in. There is no kind of compromise on that. Also, I must tell you that this is not a short-term strategy on the basis of the geopolitical emerging trends, et cetera. This we have started some time ago, and we continue to focus in that line.
Dhaval Pandya: Okay. That is it from my side as of now. If I have any further questions, I will join back with you. Thank you very much, sir, for answering all the questions.
Satish Menon: Thank you.
Operator: Thank you. Before we take the next question, a reminder to all the participants, anyone who wishes to ask a question may press star and one. Next question is from the line of Jyothish Vijayan from Motilal Oswal. Please go ahead. Mr. Vijayan, your line is unmuted. You may please go ahead with the question. Due to no response, we will take the next question. Next question is from the line of Arvind Singh from Mitra Investments. Please go ahead.
Arvind Singh: Hello, am I audible?
Operator: You are audible.
Arvind Singh: Hi, sir. My first question is that customer assets were broadly stable at INR 1.12 lakh crore despite healthy growth inflow. How much of the movement reflected MTM changes versus new client inflows? Can you shed a light on this?
Satish Menon: One lakh crore is a huge base. If you see September itself, you saw the market going down by 6%. Whereas net inflows, we have already given the numbers in our presentation. When you look at the inflows for the H1 could be INR 1,000 odd crores plus INR 400, INR 1,400 odd crores. But INR 1,400 crores is only 1.4% of INR 1 lakh crore. So it is primarily because of the market volatility and subdued appreciation in the market, where you see that customer assets remain more or less at the same level.
Arvind Singh: Okay. And sir, we are heavily investing in the human resources, so our employee costs are increasing. Can you throw some light on how we are planning to manage human resources or the employee base?
Satish Menon: Yeah, okay. Before I answer this question, just an addition to my answer to the last question. I would just like to give you some data. Even looking at mutual fund, in September beginning or August end, our mutual fund AUM has actually touched INR 20,000 crores. And when you look at September, it has become INR 18,500 crores. From that itself, though we had positive inflows, from that itself you will come to know how the market is affected. So when we talk about mutual fund inflow, that is the actual inflow, actual AUM, which gives us recurring revenue. So that is how the impact has compared to August end or September beginning to September end.
Satish Menon: In terms of employee, I think the Chairman already mentioned, with the market being such, the capital market and the cash market delivery volumes being subdued, we will be very cautious in terms of aggressively increasing the employee count. Our main focus right now is to improve the productivity of the existing employees and having a close look at the cost incurred on these employees. When the market sentiment improves, when the brokerage market improves, we can again go back and look at expansion in the terms of employees. But as of now, we will be cautious, and we will be only selectively increasing the employees. The core idea is to improve the productivity of the existing people rather than going out all to increase the headcount.
Arvind Singh: Okay. Fair. And all the best for your future.
Satish Menon: Thank you.
Arvind Singh: Thank you, sir.
Operator: Thank you. A reminder to all the participants, please press star and one to ask a question. Next question is from the line of Yash Parekh from Patel Investments. Please go ahead.
Yash Parekh: Hi, sir. Thank you so much for the opportunity. Am I audible?
Satish Menon: Yes, you are.
Yash Parekh: Right. So, sir, what measurable benefits should investors expect from technology investments, such as improved client conversion or lower processing cost? Over what time frame should we look at those benefits?
Satish Menon: I would request Jai Krishnan Sasidharan to take this question.
Jayakrishnan Sasidharan: Thank you. The early areas that we have started out are around customer onboarding. We see advantage, one, in terms of customers getting converted from the time they start their journey. We have seen a 15% uptick in the speed at which they convert and also the final closure. That is something that we are seeing as an improvement. The other area that we are looking at, I think you alluded to that question on internal operations on operational efficiencies and things like that. There we have actually driven a lot more focus around customer support and customer success, where we are able to look at high priority areas much faster with the help of technology and to a certain extent leveraging AI as well. Customer support is a big focus area from that perspective.
Jayakrishnan Sasidharan: Coverage of number of tickets, number of responses, all of that have increased dramatically. Automation within our operations, improving customer onboarding, automation at all of those levels have really increased our ability to
Jayakrishnan Sasidharan: support customer onboarding. We also have enabled dealer-assisted order creation for mutual funds and insurance orders. Those are completely technology-enabled. We have leveraged newer channels. We are bringing in newer channels like WhatsApp as well into that. Along with our existing channels, we are also bringing in some of these new channels where customers can have multiple ways to engage with us and put in their requests for orders.
Yash Parekh: Right. And sir, how are the NRI investment preferences, FCNR deposit offerings and currency movements and global opportunities affecting the activity across the GCC business?
Jones George: Hi, this is Jones George. The FCNR, most of the Indian banks did a fantastic job in raising funds from NRIs. And the investment returns were very lucrative, such that the equity returns or the level of risk for equity was not comparable. So we had a lot of challenge in being able to compete with the FCNR product.
Jones George: But subsequent to the closure in August, we have started seeing some bit of inflows. However, the current geopolitical situation in GCC has put people in a wait and watch mode. Along with that, the currency depreciation has also impacted their decision-making. So whatever investments today that they are considering they are largely looking at a dollar-denominated investment portfolio to hedge that risk. However, we have not seen significant redemption pressure, which means they are still patiently waiting for markets to improve.
Yash Parekh: Right. Sir, last question from my end. What are the top priorities for the H2 of this year that the management has set? What indicators should the investors monitor to assess progress on growth, on profitability or any other operating metrics?
C. J. George: I will take this question. I am C.J. George here. H2, we will focus on increase in productivity. As I told in the beginning of the conference, Mr. Menon had told you that the cross-selling opportunity that we are taking advantage is only minimum at this stage. We intend to expand aggressively and increase the focus on cross-selling so that the productivity increase can come within the customer base itself if there are challenges. Depending on the evolution of the market, we will make some changes, but the whole focus will be how to increase the productivity of the people that we have, and the focus area will be to expand on cross-selling opportunities. I am not venturing into giving any numbers to you, but this will be our focus. Thank you.
Yash Parekh: Right, sir. Makes sense. Thank you so much for patiently answering my questions.
Operator: Thank you. Ladies and gentlemen, to ask a question, please press star and 1. Next question is from the line of Manasvini from Oracle Investments. Please go ahead.
[Analyst] (Oracle Investments): Hello, sir. My first question is, EBITDA margins have declined compared with the corresponding period last year. What would you say are the most important drivers for improving margins, especially as now the business scales?
Satish Menon: I think I already answered that when you look at the split, the income has marginally increased by 2-odd percentage, whereas the expenses have gone up. We also mentioned that the expenditure is primarily coming from employee cost and the transformation project for IT. Going ahead also, we had said this some time back, some quarters back, that our focus is to increase our recurring revenue asset so that we are able to predict what kind of income will come in year on year. The focus continues that in terms of expenditure, our EBITDA margin, when you say that there is a big component till today also, which comes from the broking segment, that is the transaction-led business.
Satish Menon: As you know, for the last 3, 6 months or more than that, the business in capital market broking has been slightly subdued. If it remains like this, EBITDA margin for the next 1, 2 quarters also looks to be subdued for us. But you never know and that sentiments in the market changes. If you look at the history of Geojit or in the history of the industry, you might see a 1 year or 2 year lag or subdued capital market, post which it jumps up. So in terms of our present focus, we are looking at increasing our recurring revenue asset.
Satish Menon: That is how it is going to be in terms of EBITDA. We will try to increase the productivity of the people so that EBITDA increases. Rest is on the capital market activity. History will tell us when the capital market activity improves, EBITDA margin also improves.
[Analyst] (Oracle Investments): Okay. Thank you, sir. I joined a bit late, hence might have missed that. Another question that I had is what is management's outlook for, say, transaction-based income, especially given the market volatility, competitive pricing, and even changes in retail participation? What would be our transaction-based income outlook?
Satish Menon: To take you back to history, till 2016, we were only a stockbroker and a large percentage of our revenue used to come only from transaction-based income.
[Analyst] (Oracle Investments): Mm. Yeah.
Satish Menon: Even in those times, we have always focused on long-term delivery business in the capital market. When we look at Geojit capital market business, of our cash market volume, 50% or plus is delivery business. If you look at the split between equities and derivatives in terms of income, derivatives constitute around 20% of the total income, 80% comes from cash, of which 90% comes from delivery business.
Satish Menon: We have been conscious from the start of the company that we will be looking at long-term wealth creation in the capital market, and we will not push or force our clients to do day trading or F&O. Because even before SEBI came out with a report, we understood that when people do leveraged trading, whether it is day trading or F&O, most of them tend to lose money.
Satish Menon: From the start, our objective has been to build long-term wealth for the client and focus mostly on delivery business in the transaction led segment.
[Analyst] (Oracle Investments): Okay. Thank you, sir. That sounds quite positive. One last question that I had was, the monthly SIP book has reached about INR 156 crore. What is the plan to grow SIP mobilization and increase penetration within our existing client base?
Satish Menon: It has grown to INR 156 crore, and from what I understand, we are growing quite fast compared to the industry.
Satish Menon: As I said in my remark, we have 1.78 lakh clients who have SIP running with us. We still have a huge segment to be still tapped for SIP, and that is what the Chairman said. Our objective in the coming quarters would be to increase our recurring inflows through mutual fund, which will be ideally done through SIPs. We have been doing SIPs for the last 10 odd years now. When I spoke about our mutual fund client base, a healthy percentage, 78% of our clients who are with us in mutual fund are more than five years plus, and these are primarily coming through SIPs.
[Analyst] (Oracle Investments): Okay. Thank you, sir. That is all of my questions.
Operator: Thank you. A reminder to all the participants, you may press star and one to ask a question. We will take our next question from the line of Vansh Rathore from JJ Advisory. Please go ahead.
Vansh Rathore: Hello. Good evening to everyone. Sir, I wanted to ask this quarter, the second quarter, we had an insurance gross premium of around INR 175 crore, if I am not wrong. What are the exact steps that we are planning as a company to expand our distribution network and increase our existing clientele to boost revenue rates? That is the first question.
Satish Menon: Like I said a few minutes back, in terms of life and health, we have not even penetrated 5% or 3% respectively in terms of number of clients. We continue our cross-selling objective. In terms of the products available to our employees to sell, fortunately, insurance is a product which does not have a direct bearing on the capital market, though some portion of the sentiments which affects the capital market does not affect the insurance business. More than that, since we have only penetrated less than 5% of our total clients who have insurance, we will continue to approach these clients for cross-selling without giving any future numbers, sir.
Vansh Rathore: Got it, sir. Sir, I had one last question. How is the management balancing capital allocation between tech upgrades, hiring and opening new branches, and for that matter, returning capital to shareholders? How are we doing that?
C. J. George: Thank you. I am C.J. George here. I will take the question.
Satish Menon: Yeah.
C. J. George: Technology investments are must investments that we are undertaking at this stage. In order to gain market edge in terms of the technology platform as well as the features and products that we have, we need to make investments, and some of the legacy investments are being replaced to gain competitive edge in the market.
C. J. George: This is something we are making as an imperative kind of a requirement. With regard to new branches and additional people, et cetera. New branches, I must tell you that we are not expanding aggressively in this kind of market situation. At the same time, you need to remember that our branches are predominantly in the tier 2, tier 3 types of places where the cost is relatively less and our ability to wait is also relatively high.
C. J. George: We are certainly very conscious of the fact that capital allocation has to be very carefully planned. To answer your next question with regard to returning to shareholders, et cetera. At the appropriate moment, depending on some of these strategic opportunities that we are seeing, particularly in this market, we will wait in terms of taking a decision or rather jumping into a decision of giving cash back to shareholders. We are seeing some opportunities strategically. If that doesn't materialize, then we will, of course, look at the opportunity of buyback, et cetera.
Vansh Rathore: Got it, sir.
C. J. George: Thank you.
Vansh Rathore: Sir, are we looking for any international ventures?
C. J. George: No, not at the moment.
Vansh Rathore: Not as of now.
C. J. George: Not at the moment. Except for we had planned a small investment in Bahrain, which was announced, and which is not a very big investment. Other than that, there is no international investment planned at this stage.
Vansh Rathore: We wouldn't mind if there's an opportunity coming up, right?
C. J. George: We are not looking at, we are seeing opportunities in-
Vansh Rathore: Okay.
C. J. George: Opportunities in the country itself. There is a lot of opportunities in the domestic business.
Vansh Rathore: Got it.
C. J. George: Particularly, difficult times are also good when your balance sheet is strong and where there are good opportunities. Domestic market is currently at the appropriate time.
Vansh Rathore: Got it, sir. Thank you so much and all the best, sir. Thank you for answering my question.
C. J. George: Thank you.
Operator: Thank you. Next question is from the line of Vini Jain from Jain Investment. Please go ahead.
Vini Jain: Hello, good evening, sir. I have a couple of questions. The first being, when you combined PMS and AIF AUM, that is around INR 2,000 crores, including a standalone PMS AUM of INR 1,770. What drove the growth and what is the medium-term ambition for this specific business?
Satish Menon: Well, even if you look at the PMS business, PMS business has grown from INR 1,450 crores to INR 1,700 plus crores. AIF, of course, is a new product from our side, which has grown from INR 22 crores last year to INR 248 crores this. We continue to focus on the asset management business. You understand that we service clients with wealth and a section of our clients are HNI clients, where they have the appetite to invest in PMS and AIF. It is one of the main product for us in terms of against mutual fund. So focus for the asset management business is to grow that business, not only in terms of cross-selling, but also in terms of getting new clients from outside.
Satish Menon: When you talk about AIF, in terms of AIF, it is one of the best performing Cat III AIF in the country, which is also used by our wealth management team to get inroads into new HNI clients with this product.
Vini Jain: Got it. In context to your asset management business, the income was around INR 9.83 crores in Q2 and INR 18.4 crores in H1. What drives the conversion of the AUM and the net inflows into the income? What would be your operating leverage that would become more visible?
Satish Menon: I am sorry, you will need to repeat. I have not clearly understood your question.
Vini Jain: My question to you is, the conversion of the AUM and the net flows into the operating income, correct? When could the operating leverage become more visible to us?
Satish Menon: Okay. So in terms of the asset management business, since more than 90%, 95% of the inflows come from the group itself, it is a highly profitable business for us. As of now, we are at INR 2,000 crores. On INR 2,000 crores and INR 18 crores of top line for the H1 with the direct cost, which is not so significant. So profitability, you are already seeing as a part of the consolidated accounts. Going ahead, we intend to grow this aggressively. Going ahead, we will be looking at empaneling third-party distributors also, where though you will get the scale, the EBITDA percentage of this particular business might come down a little bit. As of now, since there are no distribution fees to be paid to a distributor, this is a highly profitable business for us.
Vini Jain: Got it. So my last question to you is, what progress has a DIFC platform made since the launch in terms of client acquisitions and assets and revenue contribution for Geojit?
Satish Menon: Rahul, you want to take that?
Rahul Roy Chowdhury: Yes, Jones, I will take that. Hi, this is Rahul Rajan. So DIFC as Satish also mentioned some time back, we started operations only a couple of quarters back. As a process, DIFC is a very, very regulated entity and any account opening or any kind of business over there takes some bit of lag time. We have already made inroads into around 50 odd relationships from India and GCC. These are all accredited investors of million dollars plus. A lot of interest has already started developing as far as the offerings that are there from DIFC for our customers. This not only helps us get new business and dollar terms which is very much requirement for the HNI and ultra HNI space. But this also helps us acquire a lot of customers in India when we provide that service to our customers.
Rahul Roy Chowdhury: As of now, the revenue contribution from DIFC is not meaningful enough, but when I look at it from a long-term point of view, it is going to add a very, very significant value in order to acquire clients and grow business both in India and in Dubai.
Satish Menon: Just to add, DIFC entity, we have booked an AUM of about $2 million so far.
Vini Jain: Got it. That sounds nice. Thank you. Those are all my questions.
Operator: Thank you. We will take the last question from the line of Shravan Modi from Syndicate Family Office. Please go ahead.
Shravan Modi: Good afternoon, everyone. Thank you so much for the opportunity. My question is regarding, if you see the AIF net flows across distribution products were very strong in H1. Which product categories have contributed most and how sensitive is recurring income to market levels versus net inflows?
Satish Menon: In terms of recurring revenue inflows, a large portion has come through mutual fund. If you look at H1 of the financial year, around INR 400 odd crores has come in the asset management business. Balance has come primarily through mutual fund. Unlike the transaction-led brokerage business, a subdued market doesn't impact the recurring income so much. When I compared the mutual fund AUM in August of beginning of September, it was INR 20,000 crores, and we ended September with close to INR 18,500 crores. You would see that the income is not much affected.
Satish Menon: Unless and until you see a 20% to 30% drop in the total market, you might not see a major impact in the recurring revenue business because the income is a percentage of the AUM and AUM since it is broad, it is spread across so many mutual fund, which is spread across so many stocks. When the market goes down by 6%, even if the AUM goes down by 6%, the percentage of the income which goes down will be logically only 6%. Whereas in the capital market, when the market goes down by 6% to 7%, the volumes might go down by 30% to 40%. That is how we started the call. We continue to invest to increase our AUM so that going ahead also people will be, or we would be able to forecast what kind of consistent revenue this Geojit can get.
Shravan Modi: Right, sir.
Satish Menon: Did I answer your question?
Shravan Modi: Yes sir. Yes, for sure. Thank you so much, sir, for your detailed inputs. That is it from my end and wish you all the best.
Satish Menon: Thank you.
Operator: Thank you. Ladies and gentlemen, that concludes our question and answer session. I now hand the conference over to Mr. Jones George for his closing comments. Over to you, sir.
Jones George: Yeah. Thank you very much everyone for joining our Q2 FY27 earnings call. As Mr. Marin mentioned earlier, we continue to see healthy inflows and our focus will be on enhancing the annual recurring revenue-based business. Until we see stability in the GCC markets or the global geopolitical situation, there will be some pressures in the NRI business. Nevertheless, we will focus on the AUM-based business across all of our client categories. Thank you very much for joining this earnings call.
Operator: Thank you very much. On behalf of Geojit Financial Services Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.
