IIFL Finance (IIFL) Q4 07/08 earnings summary

Executive summary

• FY08 consolidated income rose 140% YoY to Rs 10.24bn; PAT increased 111% to Rs 1.60bn, supported by broking growth and expansion into finance, institutional equities and investment banking.

• The model broadened across six financial-services businesses, while the network expanded to 758 locations in 346 cities and employee strength reached 14,105.

Financial highlights

• Consolidated revenue was Rs 10.24bn versus Rs 4.26bn in FY07; PAT after minority interest was Rs 1.60bn versus Rs 756.2mn.

• Consolidated profit before tax was Rs 2.83bn; reported PAT before the exceptional item was Rs 1.93bn, and after the item was Rs 1.64bn before minority interest.

• Basic EPS was Rs 35.65 before and Rs 30.17 after the exceptional item, versus Rs 16.32 in FY07; final dividend proposed was Rs 6/share, up from Rs 3.

Outlook and guidance

• Medium-term Indian financial-services growth outlook was viewed as sound despite near-term volatility; FY09 plans included extending consumer-finance reach to 100 locations and focusing on prime and mid-prime borrowers.

• Wealth management aimed to scale assets under management and pursue a top-three position over the coming years; new differentiated products were planned for HNI clients.

• Insurance plans included seeking an IRDA broking licence, distributing general insurance and adding capacity for higher policy volumes.

• Investment banking planned to expand its team, strengthen M&A capabilities and increase deal origination and execution.