Broking industry likely to achieve all-time high revenues and net profits in FY24: ICRA
- IBEF
- January 16, 2024
The broking industry is poised for record-breaking revenues and net profits in FY24, driven by resurging investor confidence, as per an ICRA report. Analysing 29 prominent brokerage firms in H1FY24, the report reveals a substantial 20% annualized growth in net operating income, supported by heightened market activity. The aggregate profitability of the sample set improved significantly, with a 24% annualized increase in net profit and a robust return on equity of 27% in H1 FY2024. Projections indicate an 18-22% YoY revenue expansion and a 22-25% increase in net profits for FY24.
The report highlights the recovery of secondary market returns in the current fiscal, fuelled by sustained domestic investor participation and renewed interest from foreign institutional investors. The possibility of further foreign portfolio investor inflows enhancing secondary market returns is not ruled out, considering indications of rate cuts by major central banks in the near to medium term. Mr. Deep Inder Singh, Vice President – Financial Sector Ratings at ICRA, notes the expansion of the active National Stock Exchange (NSE) client base in recent months, driven by a revival in primary market activity and improving secondary market returns. The report suggests that the retail participation trajectory is expected to remain robust in the near term, supported by a healthy initial public offering pipeline, record equity assets under management, and systematic investment plan counts registered by the mutual fund industry in the current fiscal year.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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