IIFL Finance (IIFL) Q4 10/11 earnings summary

Executive summary

• FY2010-11 consolidated income rose 31.1% to ₹14.74bn and EBITDA increased 38.7% to ₹6.07bn, driven mainly by financing and credit growth; higher borrowing costs pressured profit.

• Consolidated net profit after minority interest was ₹2.11bn, down from ₹2.32bn; broking yields faced industry-wide pressure as trading shifted toward lower-yield derivatives.

• Business expanded through Singapore and Sri Lanka broking launches, mutual fund approval, wealth growth and a doubled loan book.

Financial highlights

• Consolidated revenue increased 31.1% to ₹14.739bn from ₹11.239bn; EBITDA rose 38.7% to ₹6.068bn from ₹4.373bn.

• Consolidated PBT declined to ₹3.128bn from ₹3.547bn; net profit before minority interest fell 8.3% to ₹2.147bn, while net profit after minority interest was ₹2.111bn.

• Interest and financial charges increased to ₹2.358bn from ₹291.4mn as borrowing levels and costs rose.

• Standalone revenue was ₹7.996bn versus ₹6.982bn; standalone PAT fell to ₹1.224bn from ₹1.520bn.

Outlook and guidance

• Long-term outlook cited Indian national income growth above 8% in real terms and financial services sector growth at 1.5–2x national income growth.

• Singapore and Sri Lanka broking subsidiaries were expected to scale up; UK and Dubai advisory, wealth and distribution subsidiaries were expected to begin operations in FY2011-12.

• Priorities included launching domestic mutual fund schemes, expanding secured gold and healthcare lending, and growing wealth advisory and overseas reach.

• Management described the balance sheet as relatively under-leveraged versus NBFC peers, with capacity to fund near-term growth without fresh equity capital.