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* In 1QFY27, we estimate 14%/15% YoY growth in aggregate revenue/PAT of non-lending financial companies under our coverage. On the capital market front, Nifty recovery (+7% sequentially) does most of the heavy lifting for AUM-linked businesses, while a reduction of derivative volumes has impacted market activity-linked businesses.

* On the insurance front, despite geopolitical headwinds, GST tailwind continues to support growth while impacting profitability to a certain extent, especially for life insurers. Diving deep beneath the surface, factors like flows, yields, regulation and cost cycles are all pulling in different directions across our coverage.

* For AMCs, flows are relatively muted sequentially, while average AUM is expected to inch up, in line with Nifty movement, which should drive a slight sequential uptick in management fees. However, the more interesting kicker is other income, where the mark-to-market (MTM) benefits would provide a 34% sequential boost to PAT.

* MTM benefit flatters top line of wealth managers, but a possible shift in the flow mix toward debt in the geopolitical-uncertainty-plagued quarter would likely be an impact (revenue growth at 18% YoY). On top of this, margins could see some pressure due to pay hikes and hiring ramp-up. However, operational leverage from scale as well as highmargin institutional business should offset high costs (PAT growth at 14% YoY).

* On a sequential basis, derivative volumes have come down from the last quarter’s peak (option premium ADTO down 11% QoQ), impacting the performance of exchanges and brokers (offset by cash ADTO up 13% QoQ). Demat account openings have slowed but the bigger overhang for this segment is yet to show impact – the RBI's proprietary trading rule implemented from Jul’26 brings in a structural risk that could reshape earnings.

* Intermediaries are likely to post revenue/PAT growth of 23%/9% YoY. For depositories, issuer charges should be the standout line item this quarter given the strong IPO market during most of FY26, translating into robust folio additions, along with a recovery in transaction revenue, driven by better cash market volumes. The MF-linked story of RTAs would mirror AMCs with respect to QAAUM growth, but yield compression continues to bite. The real swing factor for RTAs, though, will be non-MF traction.

* For life insurers, Apr’26 started strong but May’26 lost momentum; hence, we expect a steady quarter with APE growth at 10% YoY. The YoY margin story is a genuine push-pull game, with mix tailwinds from protection and non-par gaining share offset by the GST impact, leaving VNB margins flat YoY.

* In general insurance, health insurance is the one segment with no asterisks this quarter. Premium growth has been strong (health at 20%+ YoY; motor stable at ~10% YoY) and profitability should improve further on the back of combined ratio gains plus a healthy assist from investment income.

* Our top picks in the capital markets space are HDFC AMC and NUVAMA WEALTH. Within insurance, SBILIFE is our preferred play.

Cash market remains resilient; F&O activity moderates

* Cash market activity remained healthy during 1QFY27, with cash ADTO rising to ~INR1.5t in Apr'26 and May'26 (vs. ~INR1.3t in 4QFY26), supported by higher retail participation, before moderating to ~INR1.4t in Jun'26.

* F&O activity softened during the quarter, with notional ADTO remaining below 4QFY26 levels (down 6% MoM in Apr'26; broadly flat in May'26/Jun'26). Options premium ADTO also moderated in 1Q, falling to Feb'26 levels in Apr'26 and May'26 before declining further in Jun'26. Consequently, the premium-toturnover ratio declined during 1QFY27 after peaking in Mar'26. ? BSE continued to gain market share, with its share in F&O notional turnover improving to over 49% (vs. ~46% in 4QFY26) and options premium turnover rising to over 34% (vs. ~30% in 4QFY26).

* Incremental demat additions moderated to 2.3m/2.2m in Apr'26/May'26 (vs. a monthly average of 2.9m in 4QFY26).

* Commodity derivatives activity remained volatile during the quarter. Futures ADTO fluctuated across months (down 22% MoM in Apr’26, up 16% MoM in May'26, and down ~8% MoM in Jun'26). Options notional ADTO surged, driven by heightened volatility in natural gas and metals, resulting in a lower premiumto-notional turnover ratio (~0.9% in 1QFY27 vs. ~1.9% in 4QFY26).

* Among listed players, ANGEL ONE and GROWW are expected to report muted revenue growth due to softer F&O activity despite resilient cash market volumes. MTF books are expected to remain strong, while customer acquisition costs are likely to stay high during the quarter owing to IPL. BSE is expected to benefit from continued momentum in transaction fee income, while weaker trading volumes are likely to weigh on MCX's revenue and profit growth.

* Depositories could see subdued QoQ growth owing to slower demat additions, partly offset by healthy cash market activity. For CDSL, impact of revisions in KYC charges will be vital, and for NSDL, sustaining payments recovery will be the key.

Asset and wealth management: Resilient AUM growth; transaction revenues remain subdued

* Mutual fund AUM expanded during 1QFY27, surpassing INR83t at the end of May'26, with equity AUM reaching a record high of INR48.2t. Net equity flows (including hybrids) jumped to INR590b in Apr'26 before moderating to INR335b in May'26, while SIP inflows have been steady around INR310b.

* For AMCs, we expect QAAUM growth and yields to remain broadly stable in 1Q. Higher treasury income, aided by favorable MTM gains, should support overall profitability.

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

* Wealth managers are expected to witness steady net inflows and broadly stable ARR yields. However, transaction-driven revenues are likely to remain subdued amid a volatile market environment.

Life Insurance: Steady APE growth with largely flat margins YoY

* In Apr’26/May’26, private life insurers saw 22%/12% YoY growth in individual APE, while group APE surged 113%/24%, leading to total APE growth of 42%/14%. Accordingly, factoring in modest growth for Jun’26, expect double-digit YoY growth for MAXLIFE, CANHLIFE, and IPRULIFE in 1QFY27, while HDFC LIFE and SBI LIFE are likely to witness single-digit growth.

* We expect the impact of the loss of ITC on VNB margins to be mitigated by a 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.

General Insurance: Health segment remains strong, while motor sees consistent growth; combined ratios to improve YoY

* In Apr’26/May’26, the general insurance segment recorded 8%/9% YoY growth in GWP. The health segment reported 22%/14% YoY growth in Apr’26/ May’26, while the motor segment maintained a consistent growth trajectory of 12-16% YoY.

*  For ICICIGI, premium growth lagged the industry in Apr’26 but outperformed the industry with 12% growth in May’26. This growth in May’26 was supported by a growth in the motor TP segment and gains in both retail and health segments. The fire segment has been declining for the last two months.

* STARHEAL posted 20%+ premium growth, while all other SAHIs saw 40%+ YoY growth in Apr’26/May’26. Niva Bupa continued to post strong 30%+ YoY growth, aided by 45+% YoY growth in retail health, but group health saw a slight decline.

* Strong growth in health premiums and stable motor premiums should benefit the industry and boost PB Fintech’s core online/new business premiums (30%+ YoY).

* Continued momentum in fresh business, operational efficiencies, and green shoots from claim efficiency initiatives will drive YoY improvement in the combined ratio across the industry.

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