Broking industry growth moderating after strong FY22, says ICRA


The growth in the domestic broking industry is moderating, following a robust performance during the 2021-22 financial year (FY22). During the first quarter of FY23, the net operating income for the industry fell 10 per cent, while net profits dropped 25 per cent on a quarterly basis, highlights Research in a note.

The change comes on the back of a drop in trading volumes amid heightened market uncertainty. ICRA, however, believes that the outlook for the brokerage industry is stable, though its revenue trajectory and profitability are expected to moderate from the FY22 levels.

The rating agency said that changes in regulations have increased operating capital requirements for the broking industry. “Stricter compliance, technology requirements, and discounted pricing pressures have hurt small brokerages. Discount brokerage houses are estimated to have accounted for about 60 per cent of active clients as of June 2022, up from 2 per cent in March 2016,” it said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor


Source link

Comments are closed.