IIFL Finance (IIFL) Q4 09/10 earnings summary

Executive summary

• FY10 consolidated revenue rose 28.0% to Rs. 11,238.7 mn; EBITDA increased 49.6% to Rs. 4,373.1 mn and net profit after minority interest reached Rs. 2,319.9 mn.

• Growth was led by equities broking, wealth advisory and investment banking, while the lending book expanded to Rs. 16.3 bn.

• Priorities included expanding wealth and lending, building the investment-banking pipeline, improving digital trading and pursuing international market access.

Financial highlights

• Consolidated income was Rs. 11,238.7 mn versus Rs. 8,775.0 mn in FY09; profit before tax rose to Rs. 3,547.2 mn from Rs. 2,194.9 mn.

• Consolidated net profit after tax was Rs. 2,340.5 mn; after Rs. 20.6 mn minority interest, net profit was Rs. 2,319.9 mn versus Rs. 1,448.2 mn in FY09.

• Standalone income increased to Rs. 6,981.9 mn from Rs. 4,921.3 mn; standalone net profit was Rs. 1,520.2 mn versus Rs. 1,058.3 mn.

• Consolidated interest expense declined to Rs. 291.4 mn from Rs. 331.8 mn; depreciation rose to Rs. 534.6 mn from Rs. 396.0 mn.

Outlook and guidance

• Medium- to long-term outlook remained positive; management expected the Indian economy to return to an 8%+ growth trajectory, supporting financial-services demand.

• Broking priorities: increase online client penetration, refine Trader Terminal and technology infrastructure, improve service, and broaden research coverage.

• Lending plans included tailoring products, speeding application processing while maintaining credit checks, and using the housing-finance subsidiary to pursue mortgage and securitisation opportunities.

• Wealth plans included geographic expansion into mass affluent clients, new risk-return products and further client-needs training; investment banking aimed to expand deal flow and geographic coverage.