IIFL Finance (IIFL) Q4 05/06 earnings summary

Executive summary

• FY06 consolidated income rose 182% to Rs 2,180.5 mn; growth spanned broking, insurance, distribution, commodities and online media.

• Consolidated PAT increased 126% to Rs 489.3 mn; EBITDA reached Rs 868.8 mn, up 192%, despite rapid hiring and network expansion.

• Pan-India reach expanded to 177 branches across 19 states; employee strength rose to 4,150 from 1,164.

Financial highlights

• Consolidated revenue Rs 2,180.5 mn vs Rs 772.6 mn; PBT Rs 718.1 mn vs Rs 257.7 mn; PAT Rs 489.3 mn vs Rs 216.8 mn.

• Consolidated EBITDA Rs 868.8 mn vs Rs 297.9 mn; EBITDA margin 39.8%; net revenue growth 182.2% YoY.

• Basic and diluted EPS were Rs 11.51 and Rs 10.98, respectively, vs Rs 8.00 and Rs 7.67.

• Direct costs fell to 26% of income from 31%, while employee costs rose 255% to Rs 366.0 mn.

Outlook and guidance

• Growth strategy targets a larger share of retail financial services through branch additions, technology, cross-selling and a broader advice-to-execution offering.

• Target to reduce equities broking from 65% of revenue to ~35% over five years, while growing insurance, commodities, mortgages and personal loans.

• Management cited India GDP growth above 8%, rising disposable incomes and increasingly complex investment products as demand drivers.