Emkay Global at over 2-year high on heavy volumes; soars 71% in four weeks

Shares of Emkay Global Financial Services rallied 20 per cent to Rs 130.55, hitting an over two-year high, on the BSE in the intra-day trade on Thursday on the back of heavy volumes amid expectation of strong earnings growth. The stock was trading at its highest level since September 2018.

Till 01:30 pm, a combined 4.7 million equity shares, representing 19 per cent of total equity of Emkay Global, had changed on the NSE and BSE. In comparison, the S&P BSE Sensex was up 0.46 per cent at 53,146 points. In the past four weeks, the stock has zoomed 69 per cent, as compared to a 1.5 per cent risen in the benchmark index.

Emkay Global is engaged in advisory, transactional & other related activities (comprising of broking, distribution of third party products, investment banking, trading in securities & other financial intermediation services) and financing and investment activities.

For the financial year 2020-21 (FY21), the company reported a consolidated net profit of Rs 11.13 crore as against a loss of Rs 12.59 crore in the previous fiscal FY20. Total income grew 22.2 per cent at Rs 165 crore from Rs 135 crore in corresponding fiscal of last year.

All business segments of the company – broking, investment banking, wealth management and asset management – are critically linked to capital markets.

The company’s client base includes marquee foreign institutional investors (FIIs), domestic institutional investors (DIIs), hedge funds, banks, insurance companies, mutual funds, private equity firms, family offices, small and medium-sized enterprises and super high net worth individuals (HNIs).

FY21 witnessed broking firms registering a surge in the number of retail investors from Tier II, III and beyond cities, who aspire for better returns over fixed income securities. With deeper penetration of equity culture, rising disposable incomes, and more population entering the working age bracket, the demand for equity investment will continue to grow further. In this scenario, players with robust digital capabilities will undoubtedly be the direct beneficiaries.

Digital broking firms are poised to grow strongly, underpinned by their advanced technology architecture, seamless digital on boarding journeys, improved customer satisfaction and increased revenues, believe analysts.

Emkay Global, in it FY21 annual report said, during the year the company onboarded a new trading platform and also expanded our horizons by developing multiple in-house algorithms using APIs.

"The company significantly expanded its footprint at the NSE collocation to enable several low-latency/high frequency trading clients. During the last year, the company started processing almost 10x more trades on peak days. The company’s messaging throughput with NSE increased by 50 per cent in the previous year," Emkay Global said.