Capitaline

Analyst Meet / AGM 30-Jan-18

Conference Call

IDFC

Focus on simplifying structure to unlock shareholders value

IDFC conducted a conference call on 30 January 2018 to discuss the financial results of the company for quarter ended December 2017. Sunil Kakar, MD & CEO addressed the call:
Highlights:

The company has posted 4% growth in its net profit to Rs 588 crore in 9MFY2018. The balance Sheet size has moved up 4% to Rs 125629 crore, while net worth rose 6% to Rs 11326 crore end December 2017.
On the banking business front, the customer base has accelerated to 2.4 million end December 2017 from 1.2 million end December 2016. The bank has branch network of 127 branches up from 74 branches a year ago. Number of BC branches grew to 356 and micro ATMS to 13070 end December 2017. Gross retail and corporate assets moved up 9% to Rs 67488 crore. CASA increased by 373% to Rs 4254 crore from Rs 900 crore, a year ago. Fees and commissions increased by 27% to Rs 138 crore in Q3FY2018.
The banking business has continued to maintain its stressed assets at steady level for past many quarters.
Post Capital First merger with IDFC Bank, the holding of the company in IDFC bank is expected to decline below 40% to around 37.5% and company is proposing to raise it to 40% through secondary market purchases. As per the company, investments of around Rs 750 crore are required to raise its shareholding in the IDFC Bank to 40%, which would be available from internal accrual and cash in the subsidiaries.
The mutual fund segment has emerged as the 7th fastest growing AMC among the Top 15 AMCs, fifth fasted in equity and sixth fasted in fixed income. The Average AUM crossed Rs 70000 crore end December 2017. The mutual fund business has 10 funds with AUM more than Rs 2000 crore. The SIP inflows stands at Rs 100 crore per month.
The mutual fund is showing improving performance with 61% of funds in quarter 1 or 2 in respective peer group.
The AMC has received the AIF license from the SEBI and is expected to be launched soon.
IDFC Infrastructure Finance (formerly known as IDFC IDF) outstanding portfolio stood increased to Rs 3969 crore end December 2017 from Rs 3297 crore end September 2017 and Rs 2683 crore end March 2017. The borrowings were at Rs 3351 crore. Capital Adequacy ratio was strong at 21.07%. The company has healthy disbursements pipeline and robust asset quality. The company expects annual loan growth of 25-30%.
IDFC Alternatives has total AUM of Rs 17716 crore across 9 funds in 3 asset classes end December 2017. About 86 investments have been made across funds.
IDFC Securities exhibited increase in market share in MF segment. The company has healthy deal pipeline in Investment banking segment.
All the business of the company are showing good business growth, while the company expects all business to sustain growth momentum.
The company would focus on simplifying its structure to unlock the value for shareholders. It would look at divesting of assets to monetize value, invest for growth and strategic partnerships.

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