IIFL Finance (IIFL) Q4 12/13 earnings summary

Executive summary

• FY13 consolidated income reached a record ₹26.65bn and PAT ₹2.79bn; diversified lending and financial-services activities reduced reliance on cyclical equity broking.

• Consumer finance generated ~68% of income, while equity broking contributed 13% of total income in the chairman’s revenue-mix discussion.

• Scale included a ₹131bn balance sheet, ₹19.6bn consolidated net worth, 2.1mn customers and 3,820 locations.

Financial highlights

• Consolidated income rose 41.3% YoY to ₹26.65bn; EBITDA increased 73% to ₹13.54bn, PBT rose 100.7% to ₹4.00bn and PAT before minority interest rose 105.3% to ₹2.79bn.

• Consolidated PAT was ₹2.793bn vs ₹1.361bn in FY12; no exceptional item was recorded in FY13.

• Financing and investing income advanced 66.6% to ₹18.17bn; broking and related income rose 1.2% to ₹5.53bn; marketing and distribution income increased 18.8% to ₹2.89bn.

• Standalone income was ₹5.50bn vs ₹6.39bn, while standalone PAT rose to ₹958.1mn from ₹633.0mn; FY12 included a ₹143.6mn gain on a business slump sale.

Outlook and guidance

• Lending outlook was supported by under-penetrated credit, housing demand and healthcare-financing needs; stable or lower interest rates and easing liquidity were expected to support loan demand.

• Gold-loan demand faced pressure from sharply lower gold prices, higher import levies and recent restrictions on bank financing.

• Broking outlook remained cautious near term amid weak market sentiment and a new commodities transaction tax; low retail participation and long-term economic growth supported longer-term potential.

• AIF pooled-fund management was expected to expand; further mutual-fund schemes, including liquid and debt products, were planned.

• Management cited long-term opportunity from favorable demographics and low financial-product penetration, while monitoring regulatory change and seeking new growth engines within financial services.