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Results
20-Oct-22
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Analysis
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Max Financial Services
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Steady performance with higher margins
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Max
Financial Services has recorded 0.10% decline in income from operations to Rs
9316.09 crore in Q2FY2023. The revenue
of Life Insurance (99.78% of total revenues) segment has gone down 0.14% to Rs
9,301.98 crore. The revenue of Business
Investments (0.22% of total revenues) segment has gone up 44.90% to Rs 20.72
crore.
PBIT of
Life Insurance segment rose 39.96% to Rs 69.17 crore (accounting for 90.07% of
total PBIT). PBIT of Business
Investments segment rose 65.51% to Rs 7.63 crore (accounting for 9.93% of total
PBIT).
The
Capital employed for Life Insurance (31.73% of total) segment has gone up
12.06% to Rs 3166.41 crore. The Capital
employed for Business Investments (68.27% of total) segment has gone up 0.94%
to Rs 6811.30 crore.
Overall
OPM has increased to 0.84% in Q2FY2023 from 0.59% in Q2FY2022, leading to
41.17% rise in operating profit to Rs 77.97 crore. Other expenditure as a percentage of total
income moved down to 99.04% from 99.36% in Q2FY2023. The staff cost as a percentage of total
income increased to 0.13% from 0.06% in Q2FY2023.
Other
income increased 229.95% to Rs 6.5 crore.
Interest cost increased 55.25% to Rs 9.47 crore. Depreciation moved down 3.31% to Rs 1.17
crore. PBT moved up 47.99% to Rs 73.83
crore.
The
effective tax rate increased to 16.55% in Q2FY2023 compared to 4.49% in
Q2FY2022. Provision for tax was expense
of Rs 12.22 crore, compared to Rs 2.24 crore.
Profit after tax rose 29.30% to Rs 61.61 crore.
There
was profit attributable to non-controlling interest of Rs 10.32 crore as
compared to Rs 8.02 crore. The share of
profit of associate were nil in both the periods. Finally, Net profit attributable to owners
moved up 29.42% to Rs 51.29 crore.
Max
Life reported an Embedded Value of Rs 14704 crore, while the Operating Return
on EV (RoEV) over H1FY23 stood at 15.7%. Embedded value per share stood at Rs
426.1 end September 2022.
Business
highlights
During
H1FY23, New Business Premium grew 9% to Rs 3378 crore and Annualised Premium
Equivalent (APE) was up by 2% to Rs 2200 crore driven by strong growth in
proprietary channels. Proprietary channels new business premiums grew by 23%
year-on-year to Rs 773 Crore as result contribution of Proprietary channels to
total new sales increased from 29% to 33% in H1FY23.
The
renewal premium income (including group) rose 14% to Rs 6526 crore, taking the
gross written premium to Rs 9904 crore, an increase of 12% over the half year
of the previous financial year.
New
Business Margin (NBM) rose to 26.7% in H1FY23, an increase of 140 bps. NBM
expanded to 31.4% in Q2FY23, rising 230 bps over corresponding previous quarter
mainly driven by increase in product profitability. Value of New Business (VNB)
grew by 7% to Rs 586 crore in H1FY23.
Max
Life operating expenses (policyholders) to gross premium ratio improved from
15.5% in H1FY22 to 15.1% in H1FY23 due to effective cost management efforts and
higher business growth.
Max
Life delivered a strong performance, and focus on retirement led to growth of
86% in Annuity business in H1 FY23. Max Life Pension Fund Management commenced
business operations in Q2FY23.
Max
Life's assets under management (AUM) were Rs 113352 crore end September 2022, up
13% over the previous year.
Max
Life has secured a new banca partnership with Tamilnad Mercantile Bank (TMB)
for term of 5 years. Also entered into partnership agreements with leading
brokers such as Turtlemint, Bluechip, NJ Brokers, Muthoot Insurance Brokers and
Vkover.
Mohit Talwar, Managing Director, Max Financial
Services Limited, said, “By introducing new innovative products, secular growth
across proprietary channels and balance product mix, we have registered a
strong growth in H1FY23. Our focus lies in continuous growth through strategic
partnerships, accelerate partnership channels growth and improve market share.”
Financial
performance H1FY2023
The
income from operation of Max Financial Services declined 17.55% to Rs 12587.78
crore in H1FY2023. The revenue of Life
Insurance (99.73% of total revenues) segment has gone down 17.60% to Rs
12,565.46 crore. The revenue of Business
Investments (0.27% of total revenues) segment has gone down 80.16% to Rs 34.08
crore.
PBIT of
Life Insurance segment rose 8.49% to Rs 151.93 crore (accounting for 93.59% of
total PBIT). PBIT of Business
Investments segment fell 92.66% to Rs 10.41 crore (accounting for 6.41% of
total PBIT).
The
Capital employed for Life Insurance (31.73% of total) segment has gone up
12.06% to Rs 3,166.41 crore. The Capital
employed for Business Investments (68.27% of total) segment has gone up 0.94%
to Rs 6,811.30 crore.
Overall
OPM has increased to 1.31% in H1FY2023 from 0.92% in H1FY2022, leading to
17.66% rise in operating profit to Rs 164.72 crore. Other expenditure as a percentage of total
income moved down to 98.54% from 98.83% in H1FY2023. The staff cost as a percentage of total
income declined to 0.15% from 0.26% in H1FY2023.
Other
income increased 249.67% to Rs 10.7 crore.
Interest cost increased 203.06% to Rs 18.82 crore. Depreciation moved down 7.75% to Rs 2.38
crore. PBT moved up 14.86% to Rs 154.22
crore.
The
effective tax rate declined to 15.65% in H1FY2023 compared to 37.83% in
H1FY2022. Provision for tax was expense
of Rs 24.13 crore, compared to Rs 50.8 crore.
Profit after tax rose 55.85% to Rs 130.09 crore.
There
was profit attributable to non-controlling interest of Rs 22.44 crore in
H1FY2023 as compared to profit of Rs 22.64 crore in H1FY2022. The share of profit of associate were nil in
both the periods. Finally, Net profit
attributable to owners rose 76.97% yoy to Rs 107.65 crore in H1FY2023.
Max Financial Services
: Consolidated Results
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Particulars
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2209 (3)
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2109 (3)
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Var (%)
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2209 (6)
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2109 (6)
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Var (%)
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2203 (12)
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2103 (12)
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Var (%)
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Income from Operations
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9316.09
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9325.4
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0
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12587.78
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15267.45
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-18
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31181.14
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31273.91
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0
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OPM (%)
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0.84
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0.59
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1.31
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0.92
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1.32
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1.87
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OP
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77.97
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55.23
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41
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164.72
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140
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18
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411.95
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584.38
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-30
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Other Inc.
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6.5
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1.97
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230
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10.7
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3.06
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250
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6.44
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14.11
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-54
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PBDIT
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84.47
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57.2
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48
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175.42
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143.06
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23
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418.39
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598.49
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-30
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Interest
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9.47
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6.1
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55
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18.82
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6.21
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203
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24.74
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0.27
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9063
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PBDT
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75
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51.1
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47
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156.6
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136.85
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14
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393.65
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598.22
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-34
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Depreciation
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1.17
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1.21
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-3
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2.38
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2.58
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-8
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5
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5.32
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-6
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PBT before EO
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73.83
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49.89
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48
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154.22
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134.27
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15
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388.65
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592.9
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-34
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EO
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0
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0
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-
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0
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0
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-
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0
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0
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-
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PBT after EO
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73.83
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49.89
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48
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154.22
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134.27
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15
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388.65
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592.9
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-34
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Tax Expenses
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12.22
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2.24
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446
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24.13
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50.8
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-53
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70.25
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33.15
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112
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PAT
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61.61
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47.65
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29
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130.09
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83.47
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56
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318.4
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559.75
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-43
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Profit attributable to
non-controlling interest
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10.32
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8.02
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29
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22.44
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22.64
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-1
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65.03
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134.36
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-52
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Share of Profit/(Loss)
from Associates
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0
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0
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-
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0
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0
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-
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0
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0
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-
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Net profit attributable
to owners
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51.29
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39.63
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29
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107.65
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60.83
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77
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253.37
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425.39
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-40
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EPS (Rs)*
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5.9
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4.6
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6.2
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3.5
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7.3
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12.3
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* Annualised on
current equity of Rs 69.02 crore, Face value of Rs 2, Excluding extraordinary
items.
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EO : Extraordinary
items, Figures in Rs crore, Source: Capitaline Corporate Database
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