Edelweiss June Quarter Net Jumps 41 Per Cent to Rs 78 Crore

Mumbai: Diversified financial services major Edelweiss group on Friday reported a 41 per cent rise in consolidated net profit at Rs 78 crore for the quarter ended June, on the back of higher fee income.

"This is the 11th quarter of consistent growth in our profit barring the exceptional second quarter of last fiscal. The vibrancy in the capital markets in the run-up to the elections and post-Modi victory gave us a good quarter," Edelweiss chairman and group chief executive Rashesh Shah told PTI.

The market activity gained around 40 per cent during the reporting quarter on the back of political optimism, Mr Shah said, adding that as a result, there was an all-round increase in our fee income, led by mutual funds, brokerage and other businesses.

"All this had both our revenue as well as our profits rising during the quarter," Mr Shah added.

Broking income constitutes about 7.4 per cent of the total revenue for the quarter.

He said the group's asset reconstruction business has been clocking around 20 per cent returns. With a balance sheet of over Rs 17,000 crore, Edelweiss ARC is one of the top players in the sector.

Total income rose 31 per cent to Rs 815 crore from Rs 624 crore a year ago, Mr Shah said, adding that net income ex-insurance stood at Rs 89 crore, up 29 per cent from Rs 69 crore.

About successful diversification into all growth areas, he said, "The focus now will be on scaling up businesses,  improving efficiency and productivity, strengthening balance sheet, risk management and compliance, instilling customer-centricity, upgrading technology and building leadership for the future."

Fund-based income, which includes income from credit including housing finance, commodities business and balance sheet management unit operations, rose 30 per cent to Rs 681 crore, he said, adding that fee and commission income rose 29 per cent to Rs 106 crore from Rs 82 crore a year ago.

This includes income from broking, corporate finance advisory, asset management and wealth advisory businesses. Gross premium income from life insurance more than doubled to Rs 23 crore from Rs 11 crore.

Mr Shah further said that he was already in talks with his overseas partners to bring in more equity, which he was hopeful of flowing in following the rise in the FDI cap.

Total credit book stood at Rs 8,829 crore, up from Rs 8,628 crore. Its retail finance includes housing mortgages, rural finance, loans against property and SMEs, book size stood at Rs 2,245 crore, up from Rs 2,090 crore.

Gross NPAs (non-performing assets) stood at 1.12 per cent, while net bad loans sttod at 0.32 per cent.