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Economic crisis takes its toll on brokerages
BS Reporter in Mumbai | January 14, 2009 12:02 IST
In what is the toughest quarter in four years, brokerages are facing the heat once again, if quarterly numbers reported by Motilal Oswal Financial Services and Kochi-based Geojit Financial Services [Get Quote] are any indicator.
Motilal Oswal Financial Services has posted a net profit of Rs 20.4 crore (over Rs 204 million), a sharp drop of 62 per cent compared to the corresponding period of the previous year. The fall is attributed to the tough market conditions.
The drop in net profit on a quarter-on-quarter basis is 25 per cent. The financial services firm has posted an income of Rs 96.2 crore (over Rs 962 million), registering a decline of 30 per cent over the previous quarter and a fall of 59 per cent over the corresponding period of the previous year.
Kochi-based Geojit Financial Services has posted profit after tax of Rs 38.63 crore (over Rs 386.3 million) after the company received Rs 40 crore (Rs 400 million) as compensation from BNP Paribas for discontinuing the commodity business. Without this, the firm would have made a loss of Rs 1.37 crore (Rs 13.7 million), down from a profit of Rs 5.2 crore (Rs 52 million) in the second quarter of 2008-09.
Geojit's joint venture in Saudi Arabia has started pilot operations and hence the share of expenses from inception to the tune of Rs 3.7 crore (Rs 37 million) is consolidated in the third quarter, which again had an adverse impact on the profitability.
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