Broking firms continued to face challenges in the third quarter (Q3) of FY12 as the equity markets remained uncertain. They saw lesser client activity as compared to the quarters before.
The Q3 results have seen net profits of listed broking firms falling by more than 30 per cent. “Not only was the impact felt on the retail broking business, but the impact was also seen in case of mutual funds, insurance and PMS businesses. However, the month of January has been better as markets have picked up, we expect client participation to increase,” said Mr Vinay Agrawal, Executive Director — Equities Broking, Angel Broking.
Motilal Oswal
In the one-year period ending December 2011, the benchmark indices fell by around 24 per cent.
The net profit for the company on a year-on-year basis declined 38 per cent to Rs 26 crore from Rs 42 crore. The income of the firm also saw a decline of about Rs 56 crore from Rs 164 crore to Rs 108 crore.
According to the results data sourced from the BSE data, the employee costs of the company this quarter stood at Rs 275.2 crore, 17 per cent less than Rs 331 crore during the same quarter last year. The total expenditure of the company reduced by 27 per cent to Rs 72 crore in the December 2011 quarter.
Geojit BNP Paribas
The south-based brokerage firm saw its net profit fall 57 per cent to Rs 5.4 crore from Rs 12.7 crore from the corresponding year.
The expenditure of the company fell on the back of reduced employee costs and operating expenses. The total expenditure saw a 22 per cent drop to Rs 49 crore.
The income of the firm stood at Rs 51.3, down from Rs 76 crore.
Edelweiss Capital
Edelweiss Capital recorded a 53 per cent decrease in its net profit to Rs 30 crore from Rs 64.6 crore. However, the expenditure and the income of the firm increased, although marginally, during this quarter. While the income rose 2.3 per cent, expenditure rose 1.5 per cent.
Edelweiss is the only listed brokerage firm to have announced an interim dividend.
Emkay Global
The company saw its net profit reduce by 80 per cent during the one-year period ending December 2011. The net profit of the company fell from Rs 5 crore to Rs 1 crore. The income of the company also fell 20 per cent to Rs 30.8 crore from Rs 38.7 crore.
The company's expenditure declined by five per cent to Rs 29 crore as at end December 2011 quarter from Rs 30 crore in the corresponding quarter the year before.
The employee cost of the company has come down marginally from Rs 13.6 crore to Rs 13 crore. The expenditure from depreciation of assets of the company increased during the period to Rs 1.5 crore from Rs 1 crore.