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The markets may have touched new peaks but broking business is yet to see a revival if the September quarter results are anything to go by. Five brokerages saw a sharp y-o-y decline in the income generated from broking activities.
India Infoline reported Rs 82 crore in income from capital market activities in Q2, 38% lower than the year-ago period. Motilal Oswal Financial Services saw revenues from broking and related activities fall 12% y-o-y to Rs 76 crore.
JM Financial, which provides a wide range of investment services, made Rs 25 crore from its broking business in Q2, 7% lower than the year-ago period.
Broking revenues made up only 10% of the Mumbai-based companys total income of Rs 246 crore.
Emkay Global Financial Services made Rs 20 crore from transactional and advisory services in Q2, 25% lower than year-ago period.
The broking revenues of Religare Enterprises were 26% down y-o-y to Rs 74 crore.
Experts attribute the slump to the absence of retail investors from markets. The falling volumes in secondary markets and increasing skew towards F&O segments put pressure on broking business. The NSEL episode further dampened the business mood among non-institutional investors, said Nimesh Kampani, chairman, JM Financial Group, in a press release. Cash market volumes have plummeted to more than four-year lows.
Apart from retail investors, domestic institutional investors (DIIs) have also been largely cautious on markets. In the year-to-date, DIIs have sold off Rs 56,939 crore worth of equities. In the September quarter, they have been net sellers of Rs 4,065 crore worth of shares.
According to data compiled by Sebi, the total number of registered brokers fell below 10,000 in May this year, the first time in the last four years.
Experts hope the new Cabinet Committee on Investment can bring some cheer. Markets might get some cheer in coming months with the new cabinet committee possibly turning the wheels of some stalled projects, said Motilal Oswal, CMD, Motilal Oswal Financial Services in a press release.