Net up by 121%
Edelweiss Capital for the fourth quarter ended Mar'08 reported 230% increase in income from operations at Rs 323.21 crore. Low other income and coupled with high interest and other operational cost the gross profit for the quarter was restricted to 149% to Rs 149.84 crore. Finally the PAT after minority interest settled at Rs 82.55 crore, up by 121% on y-o-y.
Edelweiss Capital Limited is one of India's largest growing diversified financial services companies. The businesses of the Edelweiss Group include investment banking, institutional equities, private client broking, asset management, wealth management, insurance broking and wholesale financing to corporate, institutional and high net worth individual clients. The company has built strong corporate, institutional & investor relationships backed by a research-driven approach & a proven ability to capitalize on emerging market trends. Edelweiss believes in a unique model of employee ownership and leveraging a strong partnership culture. It operates from 43 offices in 19 Indian cities.
Consolidated Financial: Q4FY08 results
For the fourth quarter ended Mar'08, Income from operations increased by 205% to Rs 404.08 crore. The fee and commission income increased by 93% to Rs 144.49 crore, the income from arbitrage increased by 193% to Rs 134.27 crore, the income from investment and dividend increased by 163% to Rs 16.77 crore and the interest income increased largely from Rs 5.72 crore to Rs 108.55 crore on y-o-y basis.
The other income for the quarter stood at Rs 1.70 crore compared to Rs 3.24 crore in the corresponding previous quarter, restricting the total income to Rs 405.78 crore, up by 199%. Interest expenses increased to Rs 82.94 crore from Rs 7.36 crore in the corresponding previous quarter; also other expenses increased to Rs 173.00 crore, an increase of 153% on account of higher staff cost and other operational cost. Thus restricting the Gross profit to increase by 149% to Rs 149.84 crore. Depreciation increased by 228% to Rs 3.28 crore and further with the provision for tax increasing by 140% to Rs 52.63 crore the Net profit before minority interest stood at Rs 93.93 crore, an increase of 152% on y-o-y. After considering minority interest of Rs 11.38 crore (Rs 0.09 of income in Q4FY07), the final PAT stood at Rs 82.55 crore, a y-o-y increase of 121%.
Consolidated: FY08 results
For the year ended Mar'08, the income from operation increased by 195% to Rs 1086.78 crore. The other income declined by 39% to Rs 2.08 crore leading the total income to increase by 193% to Rs 1088.86 crore. With interest expenses and other expenses increasing by 228% to Rs 634.85 crore, the gross profit got restricted to Rs 154% growth at Rs 454.01 crore. Further with the depreciation increasing by 92% to Rs 7.31 crore and tax provision increasing by 138% to Rs 154.02 crore, the PAT before minority interest increased by 166% to Rs 292.68 crore. the PAT after minority interest settled at Rs 273.24 crore after accounting a minority interest of Rs 19.44 crore, up by 149%.
Business Update – Edelweiss Capital Group ("the Group")
The group net worth now stands in excess of INR 2,300 cr. The strong and liquid balance sheet of the company is a key differentiator and enables the Company to support the growth of different business lines and also maintain sufficient liquidity cushion. While overall revenues have posted a robust growth of 193% during FY08, a particular outstanding feature is the strong growth of fee and commission revenues from INR 144.49 cr in Q4FY08 over INR 74.46 cr in the corresponding quarter last year in spite of a severe slowdown in volumes in the domestic capital markets.
All the established businesses continued to grow well and the new businesses have secured a strong foundation despite market volatility in recent times. The Investment Banking business has successfully closed 32 transactions in FY08. Some of the notable transactions include Open Offer and Investment in Deccan Aviation by the UB Group, investment by Citigroup Venture Capital in SVIL Mines, investment by General Atlantic in IBS Software Services Private Limited, Qualified Institutional Placements for Phoenix Mills,SouthIndian Bank and Bank of India and the Initial Public Offerings of Take Solutions, Kolte Patil Developers, eClerx Services, GSS America etc.
Our strong franchise in the Mid-market space is reflected in our number one rank in Bloomberg League Tables for Mid-cap Private Equity transactions in CY2007 and number one rank in Prime Database League Tables for Mid-market IPOs in CY2007.
In addition to these transactions, the Real Estate and Infrastructure Advisory businesses also had significant deal closures. In a period of slowdown in activity in the IPO market, we witnessed a strong demand for our advisory services in Investment Banking imparting stability to revenues.
The Group's Equities Broking business continues to show robust growth both in the Institutional and HNI client segments. The Research coverage has expanded to include 215 stocks across 19 sectors accounting for 70% of the total market capitalization. Our differentiated and thematic research distinguishes Edelweiss from other players and provides unmatched insights into Indian capital markets to our large institutional client base.
The Group has also achieved significant growth in its newer businesses, viz., Alternate Asset Management, Wholesale Financing and Wealth Management. Alternative Asset Management business covers alternate asset classes like Real Estate, Private Equity and multi-strategy fund. Despite the turbulence in the last quarter, the performance of these funds has been reasonably stable. The total assets under management/advice (including our associates') now stand at about USD 625 million.
Edelweiss Capital Limited has recently received final regulatory approval from the Securities & Exchange Board of India (SEBI) to start its mutual fund business. Registration has been granted to Edelweiss Mutual Fund and approval has been granted for Edelweiss Asset Management Limited to act as investment manager to Edelweiss Mutual Fund. Edelweiss plans to shortly launch niche schemes and use this growth engine for building up a stable retail customer base.
The newly started business of Wholesale Financing continues to grow well and has already built up an asset base of about INR 900 crore as at March 08. The interest income from financing business is now growing into a distinct contributor to our revenue streams besides diversifying it. It has grown to INR 141 cr in FY08 compared to INR 7 cr in FY07. During the year under review, the Edelweiss Group employee strength has grown from 755 (as of March 31, 2007) to 1,618 as of March 31, 2008. Our hiring also continues to be strong, setting the trajectory for future growth. We are also investing significantly in internal leadership development.
The scrip of Edelweiss Capital currently trades at Rs 807/-
1 comment:
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