HDFC securities expects low-broking arm Sky to turn in profit FY27

HDFC Securities' Low-Cost Broking Arm Sky to Turn Profitable by FY27.

Expert Analysis:

• Customer Acquisition and Growth: HDFC Securities’ discount broking platform, HDFC Sky, acquired over 1.1 million customers in 13 months, contributing to a total of 1.2 million new customers this fiscal.

• Total Client Base and Active Clients: The company’s total client base now stands at 6.1 million, with 1.4 million active clients.

• Profitability Plans for HDFC Sky: HDFC Sky is expected to become profitable in FY25 and break even by FY27, without increasing the Rs 20 per order charge for retail customers.

• Margin Funding Business: The margin funding business, with a book size of Rs 7,500 crore, generates 13-15% monthly interest.

• Revenue and Net Income for FY24: HDFC Securities expects a revenue of Rs 3,300 crore and net income of Rs 1,165 crore for FY24, up from Rs 950 crore last year.

• No IPO Plans: The company has no plans for an IPO, citing strong profits and a Rs 1,000 crore rights issue raised last year.

• Market Outlook for Nifty in 2025: Relli predicts modest returns, with the Nifty potentially reaching 26,580 points, currently trading at 23 times FY25 earnings and 20.5 times FY26 estimates.