It's the turn of brokerage stocks to be in the limelight! If one notices, Indian brokerages have been attracting a lot of global investors. Just recently, BNP Paribas picked up a stake in Geojit Financial. Bank of Muscat too came shopping to India and bought a stake in Mangal Keshav Securities. E-Trade also picked up 20 per cent stake in IL&FS. And Citigroup Global Mkts (Mauritius) bought 5 per cent in India Infoline [Get Quote].

And global names like Citibank, Prudential and Maquaire have already started operating in India. It is also said that Merrill Lynch, Morgan Stanley and UBS may enter retail broking.

Experts say financial services in India will see a growth of 25 per cent in the next five years. Buoyant capital markets have been driving the brokerage business. The consolidation phase in the broking industry is expected to continue.

Sajiv Dhawan of JV Capital Services agrees. "I think the action is going to stay there for sometime to come. It's an industry, which everyone knows is going to consolidate over the next two-three years," he says.

Looking at the valuations, everyone, even brokers will think that it's pretty highly valued and the valuations just aren't justified, but according to Dhawan, there is still a lot of buzz and a huge potential of takeovers and acquisitions in this space.

"We have had a buy on the sector and individual stocks as more a trading call rather than from valuation outlook," he says. He therefore suggests, "Stay invested, though it is a bit of a higher risk sector, especially if you are a good momentum trader, considering the recent run up."

MD of Omniscient Securities, Kamlesh Shroff too believes that brokerage big boys like India Infoline and Indiabulls Financial Services [Get Quote] are the ones that will stand to benefit the most because not too many brokerages are listed.

So how should one play brokerage stocks now? "If one has to take a pick between Indiabulls and India Infoline, I think they have run reasonably far in time in terms of the results that came in last time. So I would probably wait," suggests Shroff. "But correction would be a good opportunity to get into brokerage businesses," he quickly adds.

For more on markets & business, log on to www.moneycontrol.com