Pune e-Stock Broking Ltd Management Discussions

Annexure 2

Management Discussion and Analysis: Management Discussion & Analysis Executive Summary

Pune E-Stock Broking Limited delivered robust financial performance in FY25 despite challenging market conditions, with standalone Profit After Tax reaching INR 15.05 Crores, representing a 30% increase over the previous year. The Companys strategic pivot toward margin funding and technology-enabled services positioned it well to capitalize on evolving market dynamics while maintaining strong liquidity and risk management standards.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Capital Markets Overview

The Indian capital markets witnessed significant regulatory changes and structural shifts during FY25. BSE Sensex gained approximately 13% during FY25, reaching new highs. Average Daily Trading Value (ADTV) in cash segment remained resilient above INR 95,000 Crores. Foreign Portfolio Investment (FPI) outflows were offset by strong domestic institutional participation.

SEBI implemented stricter norms on derivatives trading, including higher Securities Transaction Tax (STT) on options. Weekly expiry restrictions on index options led to ~50% reduction in F&O volumes. Introduction of enhanced margin requirements and risk management measures.

Industry Landscape

Equity cash volumes remained resilient in FY25, but index-option turnover halved after SEBIs curbs on weekly expiries and higher STT, compressing industry brokerage yields. Meanwhile, margin-funding assets for retail investors grew sharply as brokers pivoted to leveraged cash products. SEBIs risk-containment measures drove a steep fall in speculative option volumes; monthly F&O turnover contracted from INR 11.4 trillion (Oct 24) to INR 5.8 trillion (Feb 25) before partial recovery in March. Cash-market ADTV, however, held above INR 95,000 crore as domestic institutions and SIP-oriented retail investors cushioned foreign outflows. Margin-funding AUM for the top 10 brokers grew 38% YoY to INR 19,000 crore.

Stock Broking Industry Trends

There has been shift from volume-based to value-added services including advisory, research, and margin financing. There has been growing importance of margin trading facilities (MTF). Few players are providing integration of insurance, mutual funds, and alternative investment products. Market share has been consolidating among top brokers & price competition continues with discount brokers with technology and customer service becoming key differentiators.

Further there has been enhanced KYC and AML requirements with stricter segregation of client funds and securities compliance requiring improved risk management and surveillance systems.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Core Broking Services

Cash Segment: Brokerage income from cash segment remained stable despite market volatility. Market share maintained in key trading centers. Client addition focused on quality over quantity.

Derivatives Segment: F&O volumes were impacted by regulatory changes.

Proprietary Trading: Net trading income contributed significantly to profitability & risk-adjusted returns maintained through disciplined position management.

Depository Services: Steady growth was observed in demat account base.

Margin Financing: MTF book is continuously increasing. Further focus is on book expansion with increased risk management framework strengthened.

OUTLOOK AND FORWARD-LOOKING STATEMENTS

Establishing Category III Alternative Investment Fund (AIF) to increase product offerings for clients & increasing reach. Further company is in process of obtaining Merchant Banking License from SEBI & Insurance Broking with IRDAI.

For and on behalf of the Board of Directors