Small brokers will struggle to sustain themselves, says R Venkataraman

SIP flows should stabilise and return to their previous growth path as fears of intense trade wars fade after six months of Trump's presidency and 20 days of India-Pakistan tensions

Rising compliance costs and the need for higher investments in technology are pushing up operational expenses for the broking industry, says R Venkataraman, managing director at IIFL Capital. In an email interview with Puneet Wadhwa, he explains that brokers will also need to add more revenue streams (wealth management, distribution, etc.) to counter the pressure in the broking segment. Edited excerpts:

 

Have the 2024-25 January–March quarter earnings lifted market confidence?

 

IIFL Nifty earnings estimates were downgraded between March 31 and May 12 by 4.8 per cent for 2025-26 (FY26) and 3.5 per cent for 2026-27. The cuts were driven by