SKP banks on wide client base

When most of the broking houses are experiencing the pinch from the post-January market meltdown, Kolkata-based SKP Securities has managed to defy prophets of doom.

According to Naresh Pachisia, managing director of SKP Securities, brokerages with diversified client profile and portfolio did not suffer as much as the market. "Since there is a decline in the volume in the market the margins are bound to be impacted but having a diversified client base ensures insulation against market volatility to a greater extent," he said.

The retail participation might have taken a beating with the market fall but on the other side the mutual fund investors who are mostly long term players, are proactively buyers under such conditions.

Most of the regional players have suffered on the account of not having a diversified client base, he claimed.

As a part of the diversification exercise, the company has divided its business into two channels in a 55:45 ratio, between broking and distribution with the former enjoying the higher share.

"We would give a greater thrust in the distribution business with a particular emphasis on the life insurance products, as presently this wing largely comprises mutual funds," Pachisia said.

Commenting on the recent market turmoil he said the market was facing an acute case of the event risk which largely constitutes the global events.

"Given the present market dynamics I don't see any further downside the market have seen the bottom," Pachisia said.

However, he added that the preferred sectors might change with the surge in the market.

He was bullish on the sectors like consumer durables and infrastructure sectors.

The company is expecting a revenue income of Rs 15 crore by the end of this fiscal, against Rs 10.5 crore reported in the corresponding quarter last year.