Brokerage firms rally; Motilal Oswal, Edelweiss hit 52-week highs

Emkay Global, Motilal Oswal Financial, JM Financial, Religare Enterprises and Edelweiss were up over 5% each.

Shares of brokerage firms have rallied by up 20% on the BSE in otherwise subdued market on expectation of better than expected earnings for the quarter ended June 30, 2016 (Q1FY17).

Emkay Global Financial Services (up 20% at Rs 83), Motilal Oswal Financial Services (17% at Rs 493), IIFL Holdings (11% at Rs 266), JM Financial (10% at Rs 62.35), Geojit BNP Paribas Financial Services (9.5% at Rs 43.10), Religare Enterprises (6.5% at Rs 294) and Edelweiss Financial Services (5.5% at Rs 87.90) have rallied more than 5% on the BSE in intra-day trade. Of these, Motilal Oswal Financial Services, IIFL Holdings and Edelweiss Financial Services are trading at their respective 52-week highs.

Motilal Oswal Financial Services on Thursday reported a nearly three-fold jump in net profit at Rs 79 crore in Q1FY17, against Rs 28 crore in the same quarter last fiscal. Revenues surged 69% to Rs 351 crore during the quarter under review.

"While we have increased our business volumes, asset mobilisation and client addition, we also improved our market share in some of our businesses," the firm's Chairman and Managing Director Motilal Oswal said in a statement.

"This trend is expected to continue... Strong liquidity on balance sheet allows us to fund investments in new initiatives including housing finance, private equity, etc," he added.

CRISIL, rating agency while assigning the credit rating to the proposed short term debt issue of Edelweiss Financial Services said given the group's established market position in capital market-related segments, it will continue to benefit from the improved operating environment for these businesses, resulting in higher earnings and accruals to capital over the medium term. LINK

Meanwhile, Religare Enterprises today announced that as a part of proposed re-structuring plan, two new wholly owned subsidiaries of the Company namely "Religare Broking Limited" and "Religare Insurance Limited" have been incorporated on July 20, 2016 and July 21, 2016 respectively under Religare Capital Markets (India) Limited, a direct wholly owned subsidiary of the Company.