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New Delhi: India's stock market has recorded an upward trend in the last few years. Earlier, a majority of the people were skeptical about investing in the stock market, however, the scenario has changed, and now millions of new investors from small towns and towns have joined the market. Mobile apps, easy KYC and digital platforms have brought the stock market closer to the common man. At the heart of this whole story are brokerage companies i.e. the platforms through which every purchase and sale takes place.
As trading increased, the earnings of the brokerages also registered strong growth. But after FY25, the picture changed a bit. SEBI's new rules, strictness on derivatives trading and changes in the fee structure put pressure on the earnings of brokerage companies. As a result, many good brokerage stocks, which gave more than 30% growth in 5 years, are trading far below their highs today.
Angel One has shown tremendous growth in the last 5 years. While the company's earnings were Rs 1,289 crore in FY21, it increased to Rs 5,239 crore in FY25. Profit also increased nearly four times. However, with trading slowing down in FY26 and changing the fee rules, the profit has decreased. The stock has fallen about 17 per cent in the last one year. But the increasing share of more than 3.4 million clients and non-metro makes it strong for the long term.
Share India Securities focused on broking as well as technology and new business models. Its earnings increased more than three times between FY21 and FY25. But SEBI's strictness showed effect here too and the stock lost about 46% in a year. The company is now working on PMS, AIF and digital platform 'Project Drone', which gives hope of further growth.
Nuvama Wealth Management increased its focus on wealth management and private clients instead of relying only on trading. Its earnings grew at a CAGR of around 40% from FY21 to FY25. Although the effect of market volatility was shown, the company's stock remained positive in the last one year as well. The strong business mix makes it stand out from others.
Monarch Networth Capital has grown steadily on the basis of broking and advisory. Revenue has more than tripled in 5 years. The new rules put pressure on earnings, but the balance sheet is strong. The stock has fallen 28 percent in a year, making the valuation look attractive.
SEBI's new rules have changed the way brokerage companies earn. Derivatives trading is under pressure in the short term due to strictness, transparency in fees and rising compliance costs. But in the long term, as investments in India increase, strong and diversified brokerage companies may gain momentum again. The question is which company will survive the best in this era of change?
Data Source: FE, Groww
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, gold, silver and crypto assets.)
