HDFC Securities Limited, one of India’s leading stock broking firms, has announced its unaudited financial results for Q1 FY26. The numbers reveal a concerning trend: both revenue and profit after tax (PAT) have dipped when compared to previous quarters. This decline, however, reflects more than just company-specific issues—it signals a shift in the broader stock broking industry impacted by recent SEBI regulations on F&O trading.
Revenue from Operations (Q1 FY26): ₹728 cr
PAT (Q1 FY26): ₹231 cr
PAT (Q4 FY25): ₹251 cr
PAT (Q1 FY25): ₹292 cr
This sequential and YoY decline in PAT points to structural changes in the market environment rather than internal inefficiencies.
The decline in revenue and profitability is largely attributed to reduced income from the derivatives (F&O) segment, historically a major driver of broker revenues in India. This segment has been severely affected by new SEBI directives implemented in October 2024.
In an attempt to curb rampant speculation in the derivatives market, SEBI introduced major changes:
Lot size of F&O contracts increased — making them more expensive for retail traders.
Limited weekly expiries — now only one expiry per exchange.
These reforms led to a sharp drop in trading volumes, especially in F&O, hitting brokerage earnings across the industry.
HDFC Securities is not alone in facing this revenue slump. Other brokerage firms like Angel One (Angel Broking) have also reported similar financial pressures. The industry, which saw exponential growth during the 2020–2024 bull market fueled by retail participation and high F&O activity, is now entering a consolidation phase.
Despite the current challenges, the long-term outlook for India’s equity markets remains optimistic.
The broader theme of the financialisation of the Indian economy is a structural trend that continues to gain momentum. Key drivers include:
Increasing retail investor participation
Growing financial literacy
Wider adoption of digital trading platforms
Robust regulatory frameworks
As India’s capital markets mature, the temporary dip due to regulatory shifts may eventually be seen as a necessary correction to promote sustainable and healthy market growth.
The Q1 FY26 results of HDFC Securities highlight the immediate impact of SEBI’s reforms on brokerage firms. However, the fundamentals of India’s financial markets remain strong. With increasing formalisation of savings and growing public market participation, the stage is set for long-term growth.
While short-term profitability may face pressure, firms that adapt to the new regulatory regime and diversify their revenue models are likely to thrive in the next phase of India’s capital market evolution.
