India’s brokerage industry has undergone a silent but powerful transformation over the last five years. Several listed brokerage firms delivered stunning sales growth of over 30 percent CAGR, riding a historic boom in retail participation, derivatives trading, and mutual fund distribution. But in 2025, the narrative changed sharply.
A sweeping regulatory overhaul by SEBI disrupted the very revenue engines that fueled this growth, triggering sharp corrections in brokerage stocks. What once looked like unstoppable compounders are now being re-rated by the market not because growth disappeared, but because the rules of the game changed.
This shift has created an unusual situation where some of India’s fastest-growing brokerage companies are now trading at significantly lower valuations.
The Top 5 Brokerage Stocks That Grew 30 Percent Plus in Five Years
Among listed brokers with a market capitalization above ₹1,000 crore, these five companies stand out for their exceptional long-term sales growth.
Angel One
Five-year sales CAGR of 48 percent, yet the stock is down 17.3 percent over the last year.
Share India Securities
Five-year sales CAGR of 45 percent, but the stock has corrected sharply by 46.3 percent.
Nuvama Wealth Management
Five-year sales CAGR of 40 percent and the only stock in the list that is up 4.3 percent in the past year.
Monarch Networth Capital
Five-year sales CAGR of 36 percent, with shares down 28.1 percent.
Master Trust
Five-year sales CAGR of 34 percent, while the stock has declined 30.7 percent.
At first glance, this divergence between strong long-term growth and weak recent stock performance looks confusing. The explanation lies in regulation, not demand.
Why Brokerage Stocks Look “Cheap” After 2025
The correction across brokerage stocks is not driven by a collapse in India’s equity culture. Instead, it is the result of multiple structural changes that directly hit broker profitability.
The End of Hidden Exchange Rebates
In October 2024, SEBI introduced the “true-to-label” fee structure. Brokers are now required to pass on exchange transaction charges exactly as billed.
Earlier, high-volume brokers earned substantial rebates from exchanges, which quietly boosted profits. This income stream has now disappeared, forcing a reset in earnings expectations.
Crackdown on Derivatives Trading
SEBI tightened the futures and options framework by increasing contract sizes and limiting weekly expiries. This move reduced speculative activity, especially among retail traders.
For discount brokers that depended heavily on derivatives volumes, the impact on commissions was immediate and visible.
Mutual Fund Commission Compression
A reduction of 10 to 15 basis points in total expense ratios across mutual fund categories has lowered distributor payouts. For brokers building annuity-style income through mutual funds, margins have narrowed.
Rising Compliance and Technology Costs
New frameworks such as blocked-fund mechanisms and direct securities settlement have raised operating and compliance expenses. Brokers now need to spend more just to maintain regulatory compliance.
What Is Really Happening Inside Each Company
Angel One
Angel One remains one of India’s fastest-scaling retail platforms, with a client base exceeding 34 million. However, the loss of transaction fee rebates hit hard. Q2 FY26 profit dropped to ₹212 crore from ₹423 crore year-on-year. The company is now pushing aggressively into wealth management, advisory services, and lending to reduce dependence on pure broking income.
Share India Securities
Known for technology-driven and customized trading solutions, Share India saw Q2 FY26 revenue fall sharply to ₹341 crore from ₹453 crore. The firm is now expanding its margin trading book and launching a new portfolio management service to stabilize earnings.
Nuvama Wealth Management
Nuvama stands apart from the pack. Its early pivot toward wealth management and recurring advisory income helped cushion the regulatory shock. This diversification explains why its stock has remained resilient while peers corrected sharply.
Monarch Networth Capital
With a mix of broking and advisory services, Monarch has also explored offshore opportunities through its GIFT City presence. Still, near-term growth has been affected by tighter brokerage payout norms.
Master Trust
A smaller but fast-scaling digital player, Master Trust operates platforms like Agnik and mtWealth. Slower trading volumes and regulatory changes led to weaker Q2 FY26 performance, keeping the stock under pressure.
Valuations Reveal Market Caution
The valuation gap among brokerage stocks tells an important story.
Angel One and Nuvama trade at premium P/E multiples of around 29 and 25 respectively, reflecting their scale and diversified business models.
In contrast, Master Trust, Share India, and Monarch trade at P/E ratios between 12 and 16. The market is clearly discounting uncertainty around their earnings stability under the new regulatory environment.
The Bigger Picture for Investors
India’s long-term trend of financialization of savings remains intact. Millions of new investors continue to enter the market every year.
What has ended is the era of easy profits driven by hidden rebates and hyper-active derivatives trading.
Going forward, brokerage firms with diversified revenue streams, strong advisory businesses, and predictable annuity income are likely to outperform. Pure volume-driven models will face greater earnings volatility and tighter valuation ceilings.
This regulatory reset may feel painful in the short term, but it could ultimately lead to a more transparent and sustainable brokerage ecosystem.
Disclaimer
This article is for informational and educational purposes only. It does not constitute investment advice, stock recommendations, or a solicitation to buy or sell any securities. Stock market investments are subject to market risks. Readers should consult a qualified financial advisor before making any investment decisions.
