quarterly results - q1 fy09 (apr-...

Quarterly Results - Q1 FY09 (Apr- Jun’08)July 29, 2008

Presentation structure

• Performance highlights- Q1 FY09

• Business review

• Corporate overviewCorporate overview

• Industry overview

2Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)

Performance highlights – Q1FY09

Financial performance highlights

Highlights

GroupGroupQuarterly Income at Rs 2.7bn, up 102% yoyQuarterly net profit before tax* at Rs 777mn, up 126% yoyQuarterly net profit after tax* at Rs 495mn, up 127% yoyEBIDTA margin for the quarter was 37.1% compared to 33.5% in Q1FY08

Equities brokingAverage daily equity trading turnover in Q1FY09 was Rs 23.7bn, up 70% yoyMarket share on NSE up to 3.9% in Q1FY09 compared to 3% in Q1FY08Won the ‘Best Broker India’ a ard b FinanceAsia maga ineWon the ‘Best Broker, India’ award by FinanceAsia magazine

InsuranceInsurance mobilization Rs 806mn up 44% yoyReceived in-principle approval from IRDA for direct broker license

Other businessesCommodities average daily volumes Rs 2.2bn, up 49% yoyFinance and credit income up 241% yoyFi t d t l h d b IIFL W lth i d h l i First product launched by IIFL Wealth received an overwhelming response

* before exceptional items

Performance highlights – Q1FY09

Financial highlights

Rs Mn Q1FY09 Q1FY08 Y-Y (%) Q4FY08 Q-Q (%) FY08

f 2 684 0 1 320 9 103% 3 833 1 30% 10 201 2

YoY performance QoQ performance

Income from operations 2,684.0 1,320.9 103% 3,833.1 -30% 10,201.2 Equities brokerage & related 1,584.9 691.8 129% 1,913.9 -17% 5,880.4 Financing and Investment 649.8 190.6 241% 1,113.7 -42% 1,937.5 Marketing and online media 175.8 161.7 9% 313.6 -44% 839.1 Life Insurance distribution 155.6 199.4 -22% 230.6 -33% 1,009.3 Commodities brokerage & related 49.9 39.3 27% 47.7 5% 166.4 gWealth and Mutual fund advisory 63.5 36.6 74% 79.5 -20% 207.1 Merchant Banking 4.4 1.5 195% 134.1 -97% 161.5 Others 6.5 13.2 -51% 9.0 -28% 34.7 Total Income 2,690.5 1,334.1 102% 3,842.1 -30% 10,235.9

A Direct Cost (561 9) (280 6) 100% (785 4) 28% (2 169 8) A. Direct Cost (561.9) (280.6) 100% (785.4) -28% (2,169.8) B. Employee Cost (626.2) (346.1) 81% (806.0) -22% (2,425.7) C. Administration Expenses (504.1) (260.6) 93% (573.8) -12% (1,618.2)

EBITDA 998.3 446.8 123% 1,677.0 -40% 4,022.1 Interest (136.2) (44.0) 209% (668.7) -80% (912.6) Depreciation & Amortisation (85.0) (59.4) 43% (80.9) 5% (282.0)

Profit/ (Loss) before tax 777.0 343.4 126% 927.3 -16% 2,827.5

Provision for Tax/ FBT (243.1) (125.0) 94% (236.9) 3% (898.0) Minority interest (38.6) - - (31.6) 22% (40.4) y ( ) ( ) ( )

Profit/ (Loss) before exceptional items 495.4 218.4 127% 658.9 -25% 1,889.2 Exceptional items (net of tax) - (290.4) - (290.4) Profit/ (Loss) after exceptional items 495.4 (72.1) - 658.9 -25% 1,598.8

Corporate overview

Highlights of Q1FY09

Received

in-principle approval

India Infoline was named the ‘Best Broker’ in India by the FinanceAsia magazine as a part of its annual survey of

2008 f th fi i l i

India Infoline, the largest corporate agency for ICICI

Prudential in India, received the in-principle approval from

IRDA for its direct broker license. India Infoline can now

ff t h i f for a direct broker

license from IRDA

2008 of the financial services firms in Asia

offer customer a choice of insurance products across

multiple life insurance companies

India Infoline’s broking, dematand softwareand software

development services have received the coveted ISO

27001:2005 international certification during the

year. The certification has been awarded by TUV, the

The first product launched by IIFL Wealth, Nifty-linked

capital protected debentures, raised Rs

183Croes, which is the largest single-day listing of its kind

5

y ,reputed German certification

authority.

single day listing of its kind



• Business review




Business review

Broking

Turbulent markets due to rising global and domestic uncertainties have impacted volumesMarket share on NSE risen to 3 9% in Q1FY09 as against

Retail customer base for equity broking

495,636 500,000

600,000

Market share on NSE risen to 3.9% in Q1FY09 as against 3.5% in previous quarter and 3% in Q1FY08Total volumes fallen by 7% as against 17% on the NSEWon the ‘Best Broker’ award by FinanceAsia magazineAverage daily turnover declined 11% qoq to Rs 23.7bn

438,864

200 000

300,000

400,000

,

Continue to expand network and invest in technology, systems and processes 75,000

150,000

-

100,000

200,000

FY06 FY07 FY08 Q1FY09

Equities broking (Cash & FAO)

Equities Brokerage Rs Mn (LHS)

Av. Daily Vol (Rs.Mn)

IIL market share

3 94%

4.5% NSE Market Share2152

192235000

40000

2000

2500

3.94%

2.6%

3.2%

3.8%

568 606 641 693

1128

1922

1585

15000

20000

25000

30000

1000

1500

2000

1.92%

1.3%

1.9%

Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08

568 499606

0

5000

10000

0

500

Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08

Business review

Insurance

Received in principle direct broker license from IRDAExpect to activate broking license and deactivate agency arrangement by the end of August 2008Th b ki li ill ll d d d i ll f i dThe broking license will allow us to expand product range and increase cross sell of insurance productsWe have been the largest Corporate agent of ICICI Prudential (I Pru). We expect our healthy relationship with iPru to continue and grow.Multiple sales channels used– branches/ corporate sales, tele-sales and seminar salesInvestments in technology and call centers continues, in anticipation of strong growth in the business

Life Insurance- Issuances for Trailing Four Quarters

Figures in Rs Mn

3 597 3,7253,901

4,1514,468

4,744

4000

4500

5000

Branch

Life Insurance- multi-channel distribution

3,597 3,725

1500

2000

2500

3000

3500

4000

Customer DirectMarketing

CorporateSales

0

500

1000

Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08

SeminarSales

Business review

Credit and Finance

Retail and property loan portfolio size of Rs6.2bn in Q1FY09 vis-à-vis Rs 3.3bn at previous quarter end70% of portfolio in Mortgage loans; 30% in personal loans and business loansPresent in 31 key locations across India, 15 new locations plannedProduct range includes Business loans, Promoter loans, Mortgages and Loans against sharesEnvironment is challenging as inflation accelerates and economic growth deceleratesEmphasis on foolproof systems for credit policy and underwriting

Number of disbursalsDisbursal volume (Rs Mn)

1 800

2,000 Business loans Personal loans Mortgage loans 1,400 Business loans Personal loans Mortgage loans

600

800

1,000

1,200

1,400

1,600

1,800

400

600

800

1,000

1,200

-

200

400

600

Q2FY08 Q3FY08 Q4FY08 Q1FY09

-

200

400

Q2FY08 Q3FY08 Q4FY08 Q1FY09

Business review

Wealth & mutual fund advisory

Fusion of ownership and management as IIFL Wealth is co-owned by key management teamReward structure of management team aligns IIFL Wealth with the client…‘.We are on client’s side’R i d h l i fi d Nif E hReceived an over whelming response to our first product- Nifty EnhancerAbility to customize products meeting specific mandatesIIFL Wealth’s unique ‘Marquee Client proposition’ enables complete advisory across assets for client’s portfolioAssets mobilized by India Infoline Group for mutual fund investment and wealth advisory crossed Rs2000 crores as at Q1-FY09.Team size of 70 qualified and experienced wealth advisors.

Asset return spectrum Products launched

Nifty EnhancerCapital protection and leveraged return based on Nifty performance

Twenty- TwentyCapital protection and 20% guaranteed return on flat Nifty post one-year else 20% incremental returns on Nifty post two years

Capital protection and 50% guaranteed return on flat Nifty post 3 years else Fifty- Nifty return on flat Nifty post 3-years else reduction in returns by 1.75 times negative % Nifty

Business review

Investment banking

Business has been affected by adverse equity market conditionsWe are sanguine about medium term prospects, and there is a healthy pipelineBRLM f N T k I di L d I i i l P bli Off iBRLM for Nu Tek India Ltd Initial Public OfferingStrong placement capabilities across institutional, high net worth and retail investorsSeparate and focused attention on SMEs

Asset management

A li d t SEBI f i i i l l t t A t M g t CApplied to SEBI for an in-principle approval to set up an Asset Management CompanyWe have been one of the leading pan-India distributors for all asset management companiesCurrent mutual fund penetration is low and has a huge potential to growA recent McKinsey study on Indian Asset Management industry estimates retail segment of the industry to grow at a CAGR of 35 to 45%.The study also concludes that distribution (our key strength) will be the prime driver of growth



• Business review




Corporate overview

300

IIFL Wealth launched

Insurance broking approval

Our evolution

256

250

Revenues EBITDA

PBT PAT

‘Best Broker’ award

150

200

CLSA team joins

Formed IIFL (Asia) Pte Ltd

106101

71

100

150

Listing on NSE, BSE

Launched proprietary

DGCX membership

Pte Ltd

(US

D M

n)

Launched online trading

Became corporate agent for iPru

2 3 4 39

19

55

3 822

35

2 618

29

71

2 512

19

4850 Launched

www.indiainfoline.com

Commodities broking

Launched PMS

proprietary trading platform

agent for iPru

Started distribution of financial products

Launched proprietary platform for online trading

2 2 2

-50

0

2000 2001 2002 2003 2004 2005 2006 2007 2008

13

Corporate overview

Corporate structure

India Infoline LtdEquity broking Investment BankingEquity broking, Investment Banking

India InfolineInvestment Services

LtdNBFC for financing

India Infoline Commodities LtdCommodities broking

IIFL (Asia)Pte Ltd

International operations

India InfolineMedia & Research

Services LtdEquity research, Portal

& Online Media

India Infoline Marketing

Services LtdInsurance distribution

IIFL Wealth Management LtdWealth Management

IIFL Realty LtdReal Estate

India Infoline Housing Finance LtdMoneyline Credit Ltd India Infoline

Distribution Co LtdIndia Infoline

Insurance Brokers Ltd

India Infoline Insurance Services LtdHousing Finance Ltd Distribution Co Ltd Insurance Brokers Ltd

(Corporate agency)

14

The above chart does not cover all group companies

Corporate overview

Attract and build a team with impeccable academic and professional credentialsOpen door, transparent and performance oriented culture

Management team with a proven track record

Increasing level of employee ownershipInvested in systems and processes with culture of audit

Board of Directors

Executive Directors

Ni l J i

Non-executive Directors

S t P l Kh tt

Independent Directors

A K P

Institutional Equities

Investment Banking

Consumer Finance

Retail Broking

Wealth Management

International Operations

•Nirmal Jain•R Venkataraman

•Sat Pal Khattar •A. K. Purwar•Nilesh Vikamsey•Kranti Sinha

Finance Compliance Operations Audit Human Resources Technology

• H. Nemkumar• A. Dange• V. Jagannath

• Ajit Menon• D. D’Souza

• Apul Nayyar • Mukesh Singh • Karan Bhagat• Yatin Shah

•Bharat Parajia

15

• Kapil Krishan

p

• R. Mohan

p

• Narendra Jain • S. Sandh

Resources

• Capt.R.Sharma

Technology

• Titus G.

Corporate overview

Pan-India presence

A multi-channel network spread over 350 cities and towns comprising 838 business locationsEffectively covering all Metros Class A and Class B

Well entrenched across India

Effectively covering all Metros, Class A and Class B towns and a few Class C townsWell-developed infrastructure of Zonal and Area offices for efficient administration and controlBranches networked with ‘best-in-class’ infrastructure –VSAT MPLSVSAT, MPLSRegionally balanced and well-diversified geographical presence.

India Infoline business locations

758

838

800

900

568

300

400

500

600

700

4580

152

0

100

200

2004 2005 2006 2007 2008 Q1FY09

Corporate overview

India Infoline identities

Retail broking Insurance Mutual FundsRetail broking Insurance Mutual Funds

Institutional Equities Investment Banking Wealth Management

Credit and Finance



• Business review




Industry overviewIndustry overview

Industry overview

51.760 Penetration(%)

Financial products penetration Markets performance

25,000 7000Sensex Nifty(RHS)

0.6 3.3 4.111.5 12.6

10

20

30

40

50

10,000

15,000

20,000

3000

4000

5000

6000

Sensex Nifty(RHS)

0Non-life

premiumsas % of

GDP

Credit cards as % of

bankablepopulation

Life insurancepremiums

as % ofGDP

Mutual fundAUM as %

of GDP

Consumer Loans as% of GDP

Loans as % of GDP

Source: IIFL research, RBI, IRDA

0

5,000

Mar-06 Jun-06 Sep-06 Dec-06Mar-07 Jun-07 Sep-07 Dec-07Mar-08 Jun-08

0

1000

2000

Source: BSE, NSE

Rising demat accounts

14

15 Demat accounts (mn)

Average daily turnover on the rise

100000

120000 NSE Turnover (Rs Crs)

8

9

10

11

12

13

40000

60000

80000

100000

56

7

8

Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08

Source: NSDL, CDSL

0

20000

Apr-0

5

Jun-

05

Aug-

05

Oct

-05

Dec

-05

Feb-

06

Apr-0

6

Jun-

06

Aug-

06

Oct

-06

Dec

-06

Feb-

07

Apr-0

7

Jun-

07

Aug-

07

Oct

-07

Dec

-07

Feb-

08


Industry overview

Initial public offerings Preferential equity

600 140Amount mobilized (Rs mn) No. of issues(RHS) Amount raised (Rs Mn) No. of issues (RHS)250 14000

300

400

500

60

80

100

120

100

150

200

6000

8000

10000

12000

Source: Prime Database

0

100

200

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08*0

20

40

Source: Prime Database

0

50

2000-01 2002-03 2004-05 2006-07

0

2000

4000

2001-02 2003-04 2005-06 2007-08

Consumer loans penetration

45,000

50,000

12

14Consumer loans (Rs bn) GDP(Rs bn)

Penetration(%)

Insurance penetration(%)

3 8

4.5

4.5

5.0 Life insurance Non-life insurance

15,000

20,000

25,000

30,000

35,000

40,000

4

6

8

10

2.63.0

3.8

1.5

2.0

2.5

3.0

3.5

4.0

Source: RBI, IMF, IIFL Research

0

5,000

10,000

FY05 FY06 FY07 FY08E0

20.6 0.6 0.6 0.6

0.0

0.5

1.0

FY05 FY06 FY07 FY08(E)Source: IIFL research


HNWI wealth forecast (USD tn) Commodities- MCX gaining dominance

Industry overview

1 200 000 NCDEX MCX70 N th A i E A i P ifi

600,000

800,000

1,000,000

1,200,000 NCDEX MCXTurnover (Rs Crs)

13.95.1

6.2

10.3

1.31.4

1.7

3.4

0.80.9

1.0

1.7

30

40

50

60

70 North America Europe Asia-PacificLatin America Middle East Africa

-

200,000

400,000

Q1FY07 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q4FY08

10.2 11.3 11.716.3

9.4 10.1 10.6

13.57.68.4 9.54.2

3

0

10

20

30

2005 2006 2007 2012(F)

At 7.7% Global growth

Derivatives gaining currency

1 800 000

2,000,000 Cash Futures & Options

Turnover (Rs Crs)

Source: Cap Gemini World Wealth Report, 2008

Mutual funds AUM

6,000 AUM (Rs bn)

600 000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000 Turnover (Rs Crs)

2,000

3,000

4,000

5,000

0

200,000

400,000

600,000

Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07Dec-07

Source: AMFI

-

1,000

Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Jun-08

Thank you

Published in July 2008. © India Infoline Ltd 2008-09.

India Infoline Ltd. All rights reserved. Regd. Off: 75, Nirlon Complex, Off W E Highway, Goregaon (E) Mumbai-400 063.Tel.: +(91 22)6677 5900 Fax: 2685 0451.

This report is for information purposes only and does not construe to be any investment, legal or taxation advice. It is not intended as an offer orsolicitation for the purchase and sale of any financial instrument. Any action taken by you on the basis of the information contained herein is yourresponsibility alone and India Infoline Ltd (hereinafter referred as IIL) and its subsidiaries or its employees or directors, associates will not be liable inany manner for the consequences of such action taken by you. We have exercised due diligence in checking the correctness and authenticity of theinformation contained herein, but do not represent that it is accurate or complete. IIL or any of its subsidiaries or associates or employees shall not bein any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this publication

22

in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this publication.The recipients of this report should rely on their own investigations. IIL and/or its subsidiaries and/or directors, employees or associates may haveinterests or positions, financial or otherwise in the securities mentioned in this report.

quarterly results - q1 fy09 (apr-...

Documents