Domestic broking firms reap benefits of foraying into non-core businesses
For the three months to June, Edelweiss, IIFL and Geojit BNP Paribas saw a net profit growth of 20%, 91% and 97%, respectively, over the year-ago period. Motilal Oswal’s net profit declined 4.5% to R20.23 crore from R21.19 crore a year ago. Religare Enterprises swung from a loss of R149 crore to a profit of R24 crore in the same period.
“Despite challenging conditions, we achieved growth in topline as well as bottomline year on year. This is a result of significant diversification that we have achieved in our businesses and revenue streams,” said Rashesh Shah, chairman and CEO, Edelweiss Financial Services. Edelweiss’ total credit book stood at R4,336 crore at the end of the first quarter compared with R2,611 crore in the same period last year, a growth of 66%. Shah added that the firm planned to scale up its retail finance and life insurance businesses.
It was a similar story for IIFL. “Our core businesses of equities and financial products distribution continue to face headwinds. But the overall performance has shown satisfactory growth, helped by steady growth in consumer finance business and tight cost controls," said Nirmal Jain, chairman, IIFL.
According to estimates by rating agency Crisil,
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