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* In 2QFY27, we estimate 14%/15% YoY growth in aggregate revenue/PAT of nonlending financial companies under our coverage.

* During the quarter, CAS (implemented in Aug’26) has reset F&O activity and weak market sentiment (Nifty down 5% QoQ) has weighed on cash volumes, while macro volatility has created a strong tailwind for commodities. Steady flows have supported AMCs/wealth managers, offset by MTM losses. Insurance growth remains healthy, with mix improving margins. The bigger medium-term overhang is the IRDAI consultation paper on commissions and EoM, which could reshape distribution economics.

* Brokers and exchanges have been impacted by a sharp reset in F&O after CAS and weak cash volumes, offset by record-high commodity volumes (strong quarter for MCX). However, expanding MTF book and other non-broking revenue streams should offset the impact on broking revenue.

* Gradual recovery in derivative options from the new base seen in Aug’26 (premium ADTO up 22% in Sep’26, albeit well below 1Q levels) and recovery in demat openings witnessed during the quarter should benefit the industry in 2HFY27.

* For AMCs, the core story remains intact, with equity AAUM at a record INR51.8t and SIP flows holding around INR320b. QAAUM growth and yields should support management fees, although volatile markets could weigh on other income. Wealth managers should similarly benefit from stable flows and ARR yields, while robust IPO activity should boost transactional income.

* Intermediaries are likely to post revenue/PAT growth of 22%/8% YoY. For depositories, issuer charges should be the key revenue driver given strong IPO activity during the quarter, while transaction revenue would be impacted by weak cash market volumes. The continued growth in AUM of AMCs should also benefit the trajectory of RTAs, with additional benefits coming in from non-MF traction. ? Life insurance growth is moderating but the mix remains favorable, with non-linked and protection gaining traction. We expect APE growth in high-single to lowdouble digits, while VNB margin should expand YoY for most players. In general insurance, health remains the key growth engine with 20%+ growth, while stable motor growth and improving claims/operating efficiency should support combined ratios.

* The key new variable is regulation. IRDAI’s proposed changes to commissions and EoM limits could materially alter distribution economics (takeaways), making it a key monitorable for the entire insurance ecosystem until the final regulation is announced. While the current story for insurance brokers like PB Fintech and Turtlemint remains strong, potential commission caps could materially impact future earnings, reflected in the stock movements since the paper was released.

* Our top picks in the capital markets space are 360 ONE, KFin and SBI Funds Management. Within insurance, SBILIFE and CANHLIFE are our preferred plays.

CAS dents F&O momentum; macro environment boosts commodity

* Cash ADTO declined to ~INR1.3t in Jul-Aug’26 (vs. ~INR1.5t in 1QFY27) and further to ~INR1.2t in Sep’26, reflecting the impact of weak market sentiment and softer retail activity.

* Implementation of CAS framework from 1st Aug’26 resulted in a plunge in F&O activity, with notional ADTO declining 22% MoM in Aug’26 (down 9% MoM in Jul’26). However, Aug’26 volumes seem to be a new base, with Sep’26 notional ADTO growing 10% MoM. Options premium ADTO also moderated in 2Q, falling 14%/19% MoM in Jul’26/Aug’26 before growing 22% MoM but still significantly below 1Q level.

* In the options premium turnover, the market share of NSE/BSE has largely been in the 70%/30% range, though the recent listing of NSE exclusively on BSE’s platform has resulted in an increase in cash ADTO and market share for BSE to an all-time high in Sep’26.

* While market activity was weak, incremental demat additions improved to 2.9m/3.3m in Jul'26/Aug'26 (vs. a monthly average of 2.3m in 1QFY27).

* Commodity derivatives activity benefitted from the volatile macroeconomic conditions during the quarter, with both futures and options ADTO achieving a new peak in Aug’26, driven by energy and metals, which also drove growth in premium ADTO for the quarter.

* We expect ANGEL ONE and GROWW to report sequential decline in revenue growth due to softer F&O activity and slight slowdown in cash volumes, offset by expanding MTF book and strong commodity activity. Absolute costs are expected to decline sequentially amid IPL effect in last quarter, though weaker revenue will impact margins.

* BSE is expected to witness the impact of weak volumes in transaction fee income, which will also contribute to a sequential decline in profitability. On the other hand, all-time high trading volumes will result in the best-ever quarter for MCX with respect to revenue and profitability.

* Depositories are expected to report healthy issuer services revenue, driven by higher corporate and IPO activity in 2Q, while transaction income is likely to decline QoQ, impacted by lower cash-market activity

Asset and wealth management: Flow momentum remains stable

* Mutual fund AUM expanded during 1QFY27, surpassing INR88t at the end of Aug'26, with equity AAUM reaching a record high of INR51.8t. Net equity flows (including hybrids) moderated to INR362b in Jul'26 before expanding to INR394b in Aug'26, while SIP inflows have been steady around INR320b.

* For AMCs, QAAUM growth is expected to remain in single digits, while yields are likely to remain broadly stable in 2Q. Other income is expected to decline, impacted by volatile market conditions, weighing on overall profitability.

* CAMS and KFin are expected to report healthy sequential growth in non-MF revenue, while MF servicing revenue and yields may remain broadly stable.

* Wealth managers are expected to witness steady net inflows and broadly stable ARR yields. Transaction-driven revenue is likely to witness sequential growth backed by robust IPO activity during the quarter. Improving RM productivity and operational efficiency will be vital for CI ratio improvement.

Life Insurance: Growth trajectory moderates; margins to expand YoY

* In Jul’26/Aug’26, private life insurers saw 8%/15% YoY growth in individual APE, while group APE improved 11%/4%, leading to total APE growth of 9%/13%. Factoring in stable growth for Sep’26, we expect CANHLIFE to witness strong growth among listed peers, while HDFCLIFE, IPRULIFE and LIC should witness low double-digit YoY growth and MAXLIFE and SBILIFE should post high single-digit growth.

* We expect the continued tilt toward non-linked products, rising demand for term products, and higher attachment rates. Across our coverage, VNB is likely to grow in double digits, except for HDFC Life and SBI Life, which are anticipated to see single-digit growth.

* The recent consultation paper, which aims to lower insurance costs by reducing commission caps and tighten EoM computation, is expected to have significant ramifications across the ecosystem, once implemented.

General Insurance: Health strong and motor stable; consultation paper on commissions brings uncertainty in distribution economics

* In Jul’26/Aug’26, the general insurance segment recorded 6%/10% YoY growth in GWP. The health segment reported 26%/18% YoY growth in Jul’26/Aug’26, while the motor segment maintained a consistent growth trajectory of 10-14% YoY.

* For ICICIGI, premium growth lagged the industry in 2Q, declining 3% in Jul’26 and stable in Aug’26, largely owing to a decline in the fire segment. Retail health witnessed strong growth and motor maintained its momentum.

* STARHEAL posted ~20% premium growth, while all other SAHIs saw 30%+ YoY growth in Jul’26/Aug’26. Niva Bupa continued to post strong 30%+ YoY growth, aided by 45%+ YoY growth in retail health, while group health saw 3%/17% growth in Jul’26/Aug’26.

* Strong growth in health premiums and stable motor premiums should benefit the industry. On the other hand,strong fresh business growth, operational efficiency and claim efficiency initiatives should benefit combined ratios across the industry.

* The recent consultation paper by IRDAI to revamp commissions and revisit EoM limits could disrupt the near-term operations of insurers and distributors. While the current growth trajectory of brokers like PB Fintech and Turtlemint Fintech remains strong, the future looks uncertain with the possible capping on commissions. On the other hand, the new EoM limits for general and life insurers are significantly lower compared to the current industry level, and hence, this is a key monitorable, along with the workaround related to the new distribution economics.

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