Edelweiss Financial Services has disclosed the Q1 results of FY17, Revenue has increased by 26.97% mainly due to higher credit growth, and net profit has increased by 53% mainly due to higher operating margin.
Credit growth of 29% YoY, from Rs 16,431 Cr in Q1FY16 to 21,129 Cr in Q1FY17.
83.25% of the revenue was achieved through fund based activities and 11.66% from fees and commission and rest generated through life insurance premium. Fund based income increased by 28%, fees and commission revenue by 5% and Life insurance premium by 78% YoY.
Reported quarter operating margin at 61.38% compared to 36.80% for the same quarter last year.
36.72% of PBT has been paid as taxes for the reported quarter where as 39.91% of PBT was paid as taxes for the same quarter previous year.
NPA’s have remained constant compared to previous quarter. For the current reported quarter Gross NPA stood at 1.42% and Net NPA at 0.46% of the advances.
As Edelweiss is one of the leading Asset reconstruction companies in India (as claimed by the company), the current NPA problem with the banks provides an interesting opportunity for Edelweiss to gain, buying assets on the cheap (and hopefully, recovering money)
JP Morgan’s Asset management scheme acquisition is under regulatory approval and might help in boosting Edelweiss’s asset management segment.
The stock gained by 2.11% on the results day. The stock opened at Rs 115.70 and closed at Rs 118.15, Results were announced during the market hours.
Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.
Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.