Edelweiss Financial Services Q3 net jumps 52% at Rs 2.36 billion

PAT growth has been at a CAGR of 38% for past 27 quarters

Edelweiss Financial Services (EFS) registered a net profit of Rs 2.36 billion for the quarter ended December 31, 2017, up by 52 per cent, as against Rs 1.55 billion in the corresponding quarter of the previous year.

On a sequential basis, Edelweiss’ net profit increased from Rs 2.09 billion in the second quarter or September 2017 to Rs 2.35 billion by December end.

Total revenue from operations rose to Rs 20.85 billion during Q3 FY18, up by three per cent as against Rs 20.17 billion in the previous corresponding quarter. On a year-on-year (y-o-y) basis, total revenue up by 30 per cent from Rs 16.1 billion in Q3 FY17. 

EFS Chairman and Chief Executive Officer Rashesh Shah says, “This quarter, our consolidated PAT (profit after tax) grew 52 per cent, while our balance sheet grew only 31 per cent. This has been a great vindication of our bank-like diversified model, which gives us consistent profitability in a capital-efficient manner.”      

The total assets under management (AUM) and assets under advisement (AUA) rose from Rs 1,430 billion in Q2 FY18 to Rs 1,612 billion at the end of Q3 FY18. The balance sheet assets rose by Rs 10 billion, from Rs 478 billion in Q2 to Rs 488 billion in Q3.

The fund-based income and fee-based income for EFS up by 23 per cent to Rs 13.86 billion and 44 per cent to Rs 5.14 billion respectively, on a y-o-y basis.

AUAs of the wealth management business grew by 58 per cent to Rs 84.7 billion in Q3 FY18 from Rs 53.7 billion in Q3 FY17.  While the total AUM of the asset management grew by 51 per cent, from Rs 17.2 billion in Q3 FY17 to Rs 26 billion in Q3 FY18.

The retail credit book size has risen from Rs 11.78 billion in Q2 FY18 to Rs 14.2 billion in Q3 FY18, while the corporate credit book increased by Rs 0.91 billion, from the previous corresponding quarter to Rs 16.3 billion in Q3 FY18. In the small and medium business, loan segment originations are up 156 per cent, and in the retail mortgage, orginations up 247 per cent during Q3 FY18, on a y-o-y basis.

Edelweiss Asset Reconstruction Company (ARC) is the country’s largest ARC with a capital of Rs 5.54 billion, and distressed assets (credit) worth Rs 38.6 billion.

In terms of the life insurance business segment, individual business policies issued increased by 2,455 from 12,105 in Q2 FY18 to 14,560 in Q3 FY18. The net premium income for this segment stands at Rs 1.21 billion, group premiums at Rs 0.52 billion and net loss at Rs 1.36 billion.

Asset quality remained under control as gross non-performing loans (NPL) stands at 1.74 per cent and net NPLs at 0.66 per cent for the quarter ending December 2017. Gross NPL was at the same level during Q2 FY18, while N-NPL has come down by 2 basis points from 0.68 per cent.                                                                                

Consolidated return on equity stands at 17.4 per cent, which is lower than 18.3 per cent as of Q2 FY18, whereas, the consolidated return on assets has stayed the same at two per cent. 

EFS allotted 54,562,488 equity shares through qualified institutional placement (QIP) to eligible qualified institutional buyers (QIB) at a price of Rs 280 per equity share, totalling Rs 15.28 billion.

Capital adequacy ratio is at 19.2 per cent, while the groups' debt/equity ratio stands at a comfortable 4:3.

At a meeting of EFS’ board members on January 23, 2018, the board announced an interim dividend of Rs 1.05 per equity share on face value of Rs 1 per equity share for the financial year 2017-18.

On Monday, Edelweiss Financial Services' scrip on BSE closed 1.9% higher at Rs 294.55.