The Nifty gained 6.3% during the quarter, while the Nifty Capital Markets Index surged 23%, supporting mark-to-market gains across the sector.
According to Supratim Datta, Vice President at Jefferies India, the performance gap will be driven by business mix. “The stock businesses are going to do better than the flow businesses,” he said, adding that AMCs are likely to benefit from higher other income and will be better placed to absorb the impact of lower expense ratios.
Among AMCs, Nippon Life India Asset Management is expected to be the biggest market share gainer, while Aditya Birla Sun Life AMC could see the largest decline. Investors will closely watch whether fund houses have successfully passed on the impact of total expense ratio (TER) rationalisation across the value chain.
For brokers, lower options trading activity is expected to weigh on revenues. However, Jefferies believes growth in margin funding books and rising adoption of Bombay Stock Exchange could partly offset the slowdown. Dutta also noted that the absence of margin trading book delinquencies seen in the previous quarter should support broker profitability.
Exchanges such as Multi Commodity Exchange of India Limited (BSE) and Multi Commodity Exchange of India Limited (MCX) are also expected to report muted sequential earnings as average daily trading volumes eased from March highs. “You will see the ADTO going down considering the fact that volatility has cooled off, so that will weigh on the overall growth of this segment,” Dutta said.
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Wealth managers are expected to remain the most resilient segment, while registrars and transfer agents (RTAs) should continue to benefit from non-mutual fund revenue growth. However, Jefferies remains cautious on depositories, citing slower initial public offering (IPO) activity, price deflation and muted folio growth as key risks.
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