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Edelweiss Financial Services Limited FY15 Audited ResultsTotal Income Rs. 3,912 cr, up 53% YoY; Profit after Tax Rs. 329 cr, up 49% YoY | ||
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May 15, 2015 14:21 IST
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India Edelweiss Financial Services Limited, India’s leading diversified financial services company, declared its audited, consolidated results for the Financial Year 2014-15 ended March 31, 2015 today.
FY15 Highlights:
Total Dividend @ Rs. 1.00 per share (FV Rs. 1 per share) for FY15, subject to approval
Q4FY15 Highlights:
Edelweiss has constantly pursued the strategy of synergistic diversification of its businesses to become a large and respected Financial Services firm with businesses across all growth areas in the financial services sector. We have de-risked the business model by diversifying across businesses, asset classes, client segments, markets and geographies to reduce volatility and build sustainability in performance. This has helped us build a diversified financial services business group in a nonbanking company structure. With the diversification phase complete in FY12, we have focused on scaling up businesses, improving efficiency and productivity, strengthening balance sheet, risk management and compliance, instilling customer-centricity, upgrading technology and building leadership, thereby bringing Edelweiss to a future ready status. Our diversification strategy and focus on these areas have resulted in our performance recording significant growth in our revenues and net profit which have grown at a CAGR of 33% and 37% respectively in the past three years even though the business environment in a major part of these years was one of the most challenging ones.
Speaking on the occasion, Mr. Rashesh Shah, Chairman and CEO, Edelweiss Financial Services Limited said: “FY15 saw market sentiments improving and optimism about gradual return of growth setting in. Liquidity continued to be comfortable during the year with easing of short term interest rates helped by RBI’s reduction in Repo rates. Inflation is under control and external vulnerability has reduced significantly, though currencies are volatile. At the same time, credit growth, corporate earnings, and investment continue to be sluggish. We believe with macro-economic indicators improving, we may see return of growth in the second half of FY16.
Our long-term strategy of diversifying across businesses, asset classes and client segments continues to bear fruits as demonstrated by consistent improvement in our financial and business indicators. Increasingly our profits are being contributed by multiple businesses and we have reduced concentration risk in this in our efforts to make the profits more sustainable.
For the year as a whole, our net profit is higher by 49% and our return on tangible equity exinsurance is at 15.6% compared to 12.3% for FY14. Our focus going forward continues to be on improving capital and operating efficiency, achieving scale in retail businesses, improving sustainability in our performance, strengthening balance sheet, risk and compliance, nurturing leadership, building a customer-centric culture and upgrading technology for future growth.”
Dividend: Board of Directors recommends a final dividend of Rs. 0.20 per share for FY15 (FV Rs. 1 per equity share). Earlier during the year, the company had declared and paid interim dividend of Rs. 0.80 per equity share. The total dividend for FY15, therefore, works out to Rs. 1.00 per equity share (FV Rs. 1).
FY15 Financial Highlights:
The diversified revenue mix has successfully helped us achieve improvement in our performance on a sustained basis despite volatile environment.
Balance Sheet, ALM and Liquidity Management:
Business Highlights: Operations of Edelweiss are organised around four broad business groups – Credit business including Retail & Agri Finance, Agency business including Financial Markets, Asset Management and Commodity & Agri services, Life Insurance and BMU operations
Brief highlights of our business performance are as under:
Credit business of Edelweiss offers five broad products – Mortgages including housing finance, loan against property and real estate finance, Structured Collateralised Credit to corporates, Distressed Assets Credit, SME and Agri financing, and Loan against securities, rural finance & other loans. Total credit book of the group stands at Rs. 15,036 cr at the end of this year compared to Rs. 8,953 cr at the end of previous year, a growth of 68%.
Among the above products, housing mortgages including small-ticket housing loans, rural finance, loans against property and SME finance are offered under the umbrella of Retail Finance. As at the end of this year, Retail Finance had a book size of Rs. 2,900 cr (Rs. 2,090 cr at the end of FY14), up 39%. Its assets under management were at Rs. 3,242 cr at the end of FY15 including securitised assets. It had a client base of over 41,000 (16,000 at the end of FY14) in 36 cities and ~750 villages (22 cities and ~400 villages at the end of FY14). Retail Finance business continues to be a significant growth area for Edelweiss going forward.
The Structured Collateralized loans extended to corporate clients had an outstanding of Rs. 5,991 cr (Rs. 3,926 cr at the end of FY14) and were adequately secured with an average collateral cover of over 2.3 times at the end of this year.
Edelweiss Distressed Assets business is conducted through Edelweiss ARC which scaled up its portfolio to over Rs. 20,300 cr at the end of FY15 and is now the leading ARC in the country. Edelweiss group’s support to the ARC by way of debt capital amounted to around Rs. 1,226 cr at the end of the year and is a part of our credit portfolio. We are excited about the ARC opportunity as it helps in releasing productive assets for the Nation’s economy and reduces the burden on commercial banks.
SME financing business includes loans to small and medium enterprises for their business requirements and had an outstanding of Rs. 762 cr at the end of FY15 compared to Rs. 403 cr at the end of FY14.
During FY15, we have also diversified our loan offerings by extending finance against agri commodities as a part of our overall agri services business. As at the end of FY15, the agri financing book had an outstanding of Rs. 183 cr. We had over 120 warehouses under our management at the end of March 2015. We see this business as a large, scalable and untapped opportunity in India.
The asset quality of the overall credit book continued to remain under control with Gross NPLs at 1.31% and Net NPLs at 0.38%. We continue to focus on risk management and achieving growth in the book without diluting risk standards.
Our NBFC subsidiary ECL Finance Limited continued to add medium to long term liabilities during FY15 with the successful completion of public offerings of secured NCDs of Rs. 800 cr and unsecured Tier II Bonds of Rs. 400 cr. It also added Rs. 350 cr through private placement of Tier II Bonds during FY15 with banks. Its net worth as on March 31, 2015 was Rs. 1,737 cr with a Capital Adequacy Ratio of 17.8% including Tier I Ratio of 11.7%. With the significant addition of medium to long term liabilities including Tier II capital, it is well placed to grow its asset book with confidence in future.
Our Agency businesses include Financial Markets, Fixed Income Advisory, Asset Management and Commodity & Agri services businesses.
- Financial Markets: Financial Markets businesses include Institutional and Retail broking, Corporate Finance & Advisory, Wealth Management, Financial Planning advisory and Financial Products Distribution.
- Institutional Broking business continued to be among the market leaders and perform in line with the industry. Our Research covers 208 stocks across 24 sectors representing over 75% of market capitalization. During the quarter, we held our flagship India Conference in Mumbai with the “Celebrating the Vision” theme. The conference met with tremendous response with participation of around 100 Indian Corporates and over 500 global and Indian institutional investors facilitating over 3,200 meetings among them.
- Corporate Finance & Advisory business significantly scaled up its activities during the year despite low activity levels in markets. It handled 17 transactions in the year compared to eight in FY14. With this, Edelweiss was Ranked 1st in IPOs by issue amount with over 65% market share in FY15 (source: Prime Database).
- Retail Financial Market business continued to scale up its market share with the total retail client base over 4,55,000 (4,27,000 at the end of FY14). The AuAs of the Wealth Management business were around Rs. 10,000 cr at the end of FY15 (Rs. 4,800 cr at the end of FY14). Our customized research for retail clients covers 54 Indian companies across 11 sectors.
The online trading portal www.edelweiss.in continued to be one of the most popular sites with cumulative number of unique visitors crossing 1.4 cr with 18 cr page views over 11.6 cr visits till March 31, 2015. Our alternate channel for trading via Edelweiss Mobile Trader app continued to be among the highest rated apps on Google Play Store with a Review Rating of 4.2 out of 5.
Edelweiss continued to be a major distributor in public issues of equities and debt in FY15. We were ranked 1st in IPO distribution during FY15 in Retail and HNI (NIB) categories with around 20% and 50% market share of the amount procured respectively. We were also ranked 1st in NCD issues distribution with around 20% market share of the amount procured in FY15 (source: Prime Database as on May14, 2015).
Fixed Income Advisory business offers advisory services for debt capital placement with public or institutions, debt syndication and debt restructuring for corporates. It significantly scaled up its business in FY15 and continued to be among leading debt arrangers in the country as is evident from the following highlights:
Global Asset Management business comprises of four lines of businesses – Illiquid Alternatives, Liquid Alternatives, Retail Asset Management and Asset Reconstruction. - AuMs/AuAs under Illiquid Alternatives business were over Rs. 1,400 cr at the end of FY15 spread over four funds.
- During FY15, Edelweiss acquired Forefront Capital Management, a high net worth focused Asset Management Company in the Liquid Alternatives strategies space. This acquisition further strengthens and diversifies Edelweiss’ presence in the asset management business. This business crossed AuMs/AuAs of Rs. 500 cr by the end of FY15. Forefront Alternative Equity Scheme, an absolute return equity fund launched in August 2014 on the Category III Alternative Investment Fund platform is one of the best performing funds in its category.
- Retail Asset Management business managed 11 funds across Equity, Debt and Liquid schemes, with average AuMs of over Rs. 750 cr during the fourth quarter. It has since crossed the total AuMs of Rs. 1,000 cr. It had an active base of over 18,300 investors (12,300 at the end of FY14) and a distributor base of over 3,400 at the end of the year. The AMC conducted 90 Awareness Programmes till the end of FY15 as a part of SEBI – AMFI initiative for enhancing investor awareness. Focus of this business continues to be on building investment capabilities and creating a track record.
Edelweiss set up its commodities business about seven years ago in order to diversify across adjacent asset classes. The expected financialisation of commodities markets in India will act as a growth driver for this strategically important business.
We see agri commodities and services business as a significantly large and untapped opportunity in India. Edelweiss’ approach to this business is comprehensive - it has been our endeavour to diversify across commodity buckets while also intensifying our presence throughout the value chain. This approach involves creating a comprehensive setup that offers services ranging from procurement, quality assaying and certification, warehousing, collateral management and trading & distribution. The state-of-the-art precious metals refinery set up in Ahmedabad as a part of our precious metals business started commercial production in Q4FY15.
Edelweiss expanded its addressable retail markets by launching Edelweiss Tokio Life Insurance (ETLI) in 2011. It was started in partnership with Tokio Marine of Japan, one of the oldest and largest Insurance companies globally.
ETLI is one of the fastest growing life insurance companies in India. Winner of Rising Star Insurer Award in 2013, it continues to scale up its business with a focus on enhancing quality of business with a focus on the customer. Gross premium of the business was Rs. 86 cr in Q4FY15 compared to Rs. 50 cr in Q4FY14. The gross premium for FY15 is Rs. 193 cr compared to Rs. 111 cr in the corresponding last year. Its networth at the end of FY15 is Rs. 568 cr. It continues to expand its distribution footprint across agency and alternate channels. Its presence is spread across 59 branches across 49 major cities in India. The agency channel force has also scaled up with the total number of Personal Financial Advisors crossing 10,000 by the end of this year compared to around 7,000 a year ago.
ETLI funds have been rated top performers by Morningstar. 5 of 6 individual ULIP funds have been rated 5 Star as on March 31, 2015. Its focus on consistent top performance places it well to leverage the renewed customer interest in ULIP offerings.
- Edelweiss’ presence covers 240 offices in 125 cities including eight international offices. Together with a strong network of over 4,800 Authorized Persons and Sub-brokers, Edelweiss presence covers almost all major cities in India.
- The total number of employees at the end of the quarter stands at 5,555 compared to 4,001 a year ago as we have stepped up hiring for future growth as well as for strengthening the organisation in line with the growth.
- The client base of Edelweiss group across its diversified businesses is over 5,72,000 at the end of FY15 compared to 4,97,000 a year ago. In addition, our Depository Participants maintain over 2,83,000 Demat accounts compared to 2,62,000 accounts as at the end of FY14.
- We continue to strengthen compliance function, invest in processes that enhance efficiencies, adopt new technologies and improve risk management. We are also investing in building a customer-centric culture and nurturing leadership among our employees to prepare them for future responsibilities.
- Edelweiss has been awarded the “My FM Stars of the Industry Jury Special Award for Excellence in BFSI Sector 2015” during the fourth quarter.
- EdelGive Foundation is the philanthropic initiative of Edelweiss Group with the mission to leverage its resources with a view to empowering social entrepreneurs and organisations towards achieving sustainable social change. It has so far financially supported over 60 organisations till date impacting over 260,000 lives.
During the quarter, EdelGive launched Mumbai Marathon campaign which motivated over 40 Edelites to participate in the Marathon run and raise funds to the tune of Rs. 1.4 cr.
About Edelweiss Financial Services Edelweiss is one of India’s leading diversified Financial Services Groups. Edelweiss offers a large range of products and services spanning across asset classes and consumer segments. Its businesses are broadly divided into Credit Business (including Mortgages, Structured Collateralised Credit, Retail Finance, Distressed Assets Credit and Agri Finance), Agency Business (including Financial Markets, Asset Management and Commodity & Agri Services), Life Insurance and Balance Sheet Management Unit operations. Edelweiss revenue for FY15 stands at Rs. 3,912 crore with an asset base of Rs. 27,000 crore. Its net profit for FY15 is Rs. 329 crore which has grown at a 37 % CAGR over last 3 years and 30% CAGR over last 10 years.
The group’s research driven approach and proven history of innovation has enabled it to foster strong relationships across corporate, institutional and individual clients. The group has sizeable presence in large retail segment through its businesses such as Life Insurance, Housing Finance, Mutual Fund and Retail Broking. It serves its 5,72,000 strong client base through 5,555 employees and 240 offices (including eight international offices) in 125 cities. Together with over 4,800 strong network of Sub-Brokers and Authorized Persons, Edelweiss group has presence across all major cities in India.
Edelweiss Financial Services trades under the symbols NSE: EDELWEISS, BSE: 532922, Bloomberg: EDEL.IN, Reuters: EDEL.BO. To learn more about the Edelweiss Group, please visit www.edelweissfin.com.
Edelweiss Financial Services Limited Corporate Identity Number: L99999MH1995PLC094641
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Media Contact Details
Shailendra Maru
Edelweiss Financial Services Limited +91 22 4063 5418 Mona Kwatra
Edelweiss Financial Services Limited +91 22 4040 7545 |
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