The weakness in cash-market activity comes amid foreign investor selling and global uncertainty stemming from the war and elevated oil prices, which have weighed on market sentiment. Reduced participation in equities has added to the pressure on trading volumes for brokers.
For Angel One, gross income from cash and derivatives brokerage accounted for 60% of total gross income in the June quarter (Q1FY27), according to its investor presentation. For Groww, cash and derivatives brokerage contributed 73.3% of total income in the same quarter.
“Capital market companies do benefit from operating leverage, but its true potential is realised when revenue growth drives profitability rather than dependence on controlling operating expenses. In certain quarters, such as the current one, stock broking companies may struggle to show operating efficiency and sustain profitability, which could result in a decline in profits,” said Lalit Deo, research analyst at Equirus Securities.Groww has the highest number of unique client codes (UCCs) at 4.4 crore as of April 26, as per the National Stock Exchange data. UCCs mean the total number of traders registered with the broker. Angel One had the second-highest number of UCCs at 3.9 crore at the beginning of FY26.
However, growth in other business segments could cushion the impact of lower equity trading volumes, analysts said.
Shrikant Chouhan, head of equity research at Kotak Neo, said steady expansion in brokers’ margin trading facility (MTF) books, along with strong commodity orders, could offset some of the pressure from falling equity-market participation.