Khandwala Securities Limited reported a standalone net profit of ₹8.49 lakh for the quarter ended June 30, 2026 (Q1FY26), marking a sharp reversal from a net loss of ₹58.58 lakh in the same period of FY25. This turnaround signals improved operational efficiency and stronger fee generation, which matters to investors tracking the firm’s return to profitability after consistent losses in recent quarters. Revenue from operations stood at ₹226.68 lakh, up from ₹114.20 lakh in Q1FY25, while total expenses decreased to ₹250.57 lakh from ₹188.39 lakh in the prior year, aided by lower other expenses despite higher finance costs.

The Board of Directors, meeting on August 10, 2026, approved the unaudited financial results pursuant to Regulation 30 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The results were reviewed by the Audit Committee and subjected to a limited review by the Statutory Auditors, Pravesh Agarwal & Associates, in accordance with Regulation 33 of the SEBI LODR Regulations. The Board also decided to convene the 33rd Annual General Meeting on September 18, 2026, through Video Conferencing or Other Audio-Visual Means.

Financial Performance Highlights

The company’s profitability was primarily driven by its fee-based operations, which generated a segment result of ₹60.07 lakh, compared to a loss of ₹6.19 lakh in Q1FY25. In contrast, investment/stock operations recorded a minor loss of ₹0.43 lakh. Total comprehensive income for the period was ₹8.49 lakh, with earnings per share (basic and diluted) at ₹0.06, compared to a loss per share of ₹0.38 in the previous year.

Segment-wise Analysis

Fee-based operations contributed ₹222.34 lakh to total revenue, accounting for nearly 98% of operational income. This segment’s assets stood at ₹2,154.18 lakh, while liabilities were ₹488.77 lakh. Investment/stock operations saw minimal revenue contribution of ₹4.33 lakh but maintained capital employed at ₹474.55 lakh. The consolidated results, including associate Trumonee Financial Limited, mirrored the standalone performance with a net profit of ₹8.43 lakh.

What the Numbers Show

The most critical insight from Q1FY26 is the decoupling of expense growth from revenue growth. While revenue nearly doubled compared to Q1FY25, total expenses increased by only 33%, largely due to controlled employee benefits and reduced other expenses. However, finance costs rose to ₹8.17 lakh from ₹4.08 lakh, indicating higher borrowing or interest-bearing liabilities. The turnaround is operationally driven rather than reliant on other income, which suggests sustainable improvement in core brokerage and advisory activities. Investors should monitor whether this margin expansion persists as market volatility impacts investment operations.

Khandwala Securities received an administrative warning letter from the Securities and Exchange Board of India (SEBI) dated June 09, 2026, regarding violations of disclosure norms in a draft offer document. The regulator identified lapses in the documentation for the initial public offering of ArMee Infotech Limited, specifically concerning the independent auditor's examination report. The company stated that this communication has no impact on its financial, operational, or other activities.

The warning follows the submission of a draft offer document dated February 26, 2025, by Khandwala Securities. SEBI observed that the "Financial Information" section lacked the independent auditor's examination report on restated consolidated financial information. This omission was a violation of Regulation 24(2)(b) of the SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018, read with Clause 11 of Part A of Schedule V of the same regulations.

Consequently, the offer document was returned by SEBI. The regulator noted that the omission constituted a failure to exercise reasonable care and due diligence, leading to non-compliance with Regulation 24(3) of the ICDR Regulations and Regulation 13 of the SEBI (Merchant Bankers) Regulations, 1992.

Details of the SEBI Communication

The administrative warning letter was received by the company on June 10, 2026. The correspondence directed the company to improve its compliance standards to prevent recurrence and warned that future enforcement action could follow if such lapses continued.

In response to the communication, Khandwala Securities stated it would ensure compliance with the regulations and exercise due caution to avoid the recurrence of such events. The company has been advised to disclose the letter to the recognized stock exchanges and place it before the board of directors in the upcoming meeting.