Indian Brokerage Firms Post Profit Growth in September Quarter Despite Declining Market Activity

Major Indian brokerage firms have reported strong year-on-year profit growth for the September quarter, defying a broader slowdown in market activity. Growth was largely supported by increased contributions from margin funding and ancillary business segments.

During the July-September quarter, the combined average daily equity cash-market turnover on the NSE and BSE fell by 11.7 per cent sequentially to ₹1.29 lakh crore. Market sentiment and trading activity were weighed down by rising global bond yields, foreign investor outflows, higher oil prices, and regulatory changes. Additionally, the introduction of the closing auction session in August coincided with a decline in derivatives turnover.

Billionbrains Garage Ventures, the parent company of Groww, reported a 54 per cent year-on-year increase in consolidated profit after tax (PAT) to ₹725.65 crore. Its revenue from operations rose 47.4 per cent to ₹1,501.53 crore. Groww noted that the contribution of equity derivatives to revenue declined to 45 per cent from 57 per cent a year earlier, a shift it attributed to market adjustments following the introduction of the closing auction session. The company also registered growth in its margin trading facility (MTF) and wealth businesses.

Angel One posted a 58.2 per cent rise in consolidated PAT to ₹335 crore, while gross revenue grew 18.9 per cent to ₹1,427 crore. Its client base expanded by 17.3 per cent. Angel One stated that its profitability growth reflected operating leverage and an expanding earnings base, although the total number of orders processed fell to 366 million from 406 million in the previous quarter. However, its average client funding book grew 40.5 per cent year-on-year to ₹7,450 crore, and gross broking income accounted for roughly 55 per cent of revenue, down from nearly 60 per cent a year prior.

Other established players also reported positive results. HDFC Securities recorded a 26.3 per cent year-on-year rise in profit after tax to ₹264.66 crore, with revenue from operations increasing by 37.6 per cent to ₹964.61 crore. Kotak Securities registered a profit of ₹348 crore for the September quarter. Anand Rathi Share and Stock Brokers saw its PAT increase by 50.3 per cent to ₹41.94 crore, alongside a 20.3 per cent rise in revenue from operations to ₹273.21 crore, bolstered by a 36 per cent increase in interest income from its MTF business to ₹49.6 crore.

Not all firms experienced growth during the quarter. 5paisa Capital reported an 11.8 per cent increase in revenue from operations to ₹86.46 crore, but its PAT fell by 25.5 per cent to ₹7.06 crore. Similarly, Geojit Financial Services posted lower earnings, with consolidated PAT declining by about 26 per cent year-on-year to ₹16.54 crore, even as revenue from operations rose slightly by 2.6 per cent to ₹165.82 crore.

"The financial performance of brokerages this quarter highlights a crucial shift toward diversification. Even as traditional trading volumes and derivatives activity faced headwinds from regulatory changes and market sluggishness, firms with robust margin trading facilities and wealth businesses managed to sustain healthy earnings. This demonstrates that modern financial platforms are building resilience by expanding their revenue streams beyond core broking income." — Dr. Shishir Gupta, Founder & CEO, StartupLanes