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Edelweiss Financial Services has recorded 3% decline in the net profit, on consolidated basis, to Rs 232.39 crore for the quarter ended March 2019. Total income increased 14% to Rs 2936.48 crore in the quarter ended March 2019. Interest expense increased 20% to Rs 1221.04 crore, while other expenses (including staff cost, provisions and other expenses) moved up 18% to Rs 1172.18 crore. Ensuing Gross Profit declined 5% to Rs 548.84 crore in Q4FY2019.
Depreciation increased 15% to Rs 40.60 crore, while provisions dipped 59% to Rs 102.61 crore allowing PBT to jump 36% to Rs 405.63 crore. Effective tax rate surged to 39.3% in Q4FY2019 from 28.4% in Q4FY2018. After minority interest of Rs 13.93 crore, the net profit of the company has declined 3% to Rs 232.39 crore in the quarter ended March 2019.
Book value of the company stood at Rs 82.35 per share at end March 2019.
The consolidated Capital Adequacy Ratio for Edelweiss Group is 17.8% as on March 2019.
Business performance
Credit Business:
At the end of FY19, book size of Retail Credit was Rs 18075 crore. The book now equals Corporate Credit book. The Corporate Credit book was Rs 18055 crore. Total Credit Book including Distressed Credit stood at Rs 43510 crore at the end of FY19.
The asset quality of the overall credit book continued to remain under control with Gross NPAs at 1.87% and Net NPAs at 0.83%.
Distressed Credit business has capital employed of Rs 7380 crore and Distressed Credit recoveries were Rs 7019 crore for FY19. Edelweiss ARC continues to be the largest Asset Reconstruction Company in the country.
Franchise and Advisory Businesses:
The AuA of the Wealth Management business grew to Rs 106000 crore at the end of FY19.
Asset Management business comprises Alternative Asset Management and Mutual Fund. The total AuM of Asset Management business grew to Rs 37000 crore at the end of FY19.
Leading player in the Private Debt space with funds across Real Estate Credit, Distressed Credit and Structured Debt. Closed 2nd Distressed Credit fund at $1.3 bn - one of the largest in Asia. The company is looking to raise $1 bn under Structured Debt Fund. The company has deployed 50% of funds raised across Alternative Asset funds.
Capital Markets:
Institutional Broking business continued to be among the market leaders and performed in line with the industry. Research covers 260 stocks across 30 sectors. Edelweiss continued to be a major distributor in public issues of equities and debt. It ranked No. 1 ECM (IPO + QIP) Banker by deals done in FY19 - Leading domestic bank for QIP in FY19 with market share of 47% (value terms). It also ranked amongst top 10 arrangers - private placement of debt and ranked 1st as Merchant Banker for public issue of bonds - 96% market share in Q4FY19
Life Insurance:
Edelweiss Tokio Life Insurance is one of the fastest growing life insurance companies in India. It continues to scale up its business with the objective of enhancing quality of business and focus on customer. All Edelweiss Tokio (individual and group) ULIP funds have been providing superior returns. The company follows the agency-led multi-channel distribution approach with emphasis on productivity with a focus on building direct capability specifically online. It continues to expand its distribution footprint across agency and alternate channels with presence across 121 branches in 93 locations and the agency channel force of 43600 Personal Financial Advisors.
General Insurance:
General Insurance crossed Rs 100 crore premium in first full year of operations.
Balance Sheet Management Unit (BMU)
BMU manages the Group's liquidity like a commercial bank, while simultaneously managing the Balance Sheet and ensuring that maturing liabilities are repaid smoothly. It also manages key components of the Balance Sheet, monitors interest rate sensitivity in the portfolio and takes pre-emptive steps to mitigate any potential liquidity risks. Its focus continues to be on strengthening the Balance Sheet by reducing dependence on short-term market borrowings, diversifying sources of borrowings, maintaining a matched ALM profile and maintaining adequate liquidity. The consolidated Capital Adequacy Ratio for Edelweiss Group is 18.0% as on 31st March 2019.
Annual Financial Performance
For the year ended March 2019 (FY2019), the company has reported 22% rise in total income at Rs 10797.66 crore. Interest expense moved up 22% to Rs 4722.23 crore, while other expenses galloped 28% to Rs 3805.35 crore. Ensuing Gross profit increased 13% to Rs 2358.10 crore. Depreciation rose 27% to Rs 131.63 crore. Provisions declined 23% to Rs 482.76 crore. PBT increased 29% to Rs 1743.71 crore. Effective tax rate stood at 40% in compared to 38%. The final bottomline of the company improved 15% to Rs 995.17 crore in FY2019.
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