Diversification helps brokers tide volatility

Brokers, in general, have been hit hard by dwindling cash market volumes

Despite the volatility in the equity market, shares of brokerage firms that have diversified their business model have rallied handsomely in the past year. Shares of Motilal Oswal Financial Services, Edelweiss Financial Services and IIFL Holdings have all doubled in the past one year against the Sensex’s 23 per cent gain.

These firms have benefited from the thematic rally in stocks of non-banking financial companies (NBFCs) for most of last year. For these entities, broking activities are no longer the mainstay as they have diversified into lending, private wealth management, asset management and even insurance.  

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