Edelweiss Capital Ltd., a leading investment banking and brokerage house, reported a lower consolidated net profit for the fourth-quarter, hurt by higher interest rates, liquidity crunch and severe slowdown in economic activity.
The results for the quarter also impacted due to continued investments in incubating new businesses - life insurance and retail, and depreciation on new office property.
On a stand-alone basis, the company reported a higher net profit for the quarter under review.
Consolidated Results
The Mumbai-based company reported a fourth-quarter consolidated net profit, after minority interest and profit of associates, of Rs.38.76 crore, compared with the Rs.43.26 crore in the fourth-quarter of 2011, a ten percent decline. On a per-share basis, earnings for the quarter fell by 11 percent to Re.0.50 from the Re.0.56 per share of the corresponding quarter last year.
Quarterly total income from operations grew by 23 percent to Rs.469.36 crore from the Rs.381.48 crore in the prior year quarter, while 'other income' was Rs.5.63 crore, compared with the Rs.1.10 in the preceding-year quarter.
During the quarter, income from 'Fee and Commission' amounted to Rs.92.27 crore, while that of 'Interest and Treasury' was Rs.365.48 crore. Income for the quarter from 'Premium from Life Insurance Business' 'stood at Rs.7.49 crore, whereas 'Other Operating Income, totaled Rs.4.12 crore.
For the fiscal year, Edelweiss Capital's consolidated net profit, after minority interest and profit of associates, declined by 45 percent to Rs.127.74 crore from the Rs.233.02 crore last year. Total income, including other income, rose by 15 percent to Rs.1,661.15 crore from the Rs.1,439.19 crore in 2011.
Stand-alone Results
The company posted a fourth-quarter stand-alone net profit of Rs.15.55 crore, higher by 14 percent than the Rs.13.63 crore reported for the same period last year. On a per-share basis, quarterly earnings rose by 11 percent to Re.0.20 from the Re.0.18 per share in the corresponding quarter last year.
Total income, including other income, was Rs.53.05 crore, compared with Rs.111.52 crore of the corresponding quarter last year, reflecting a 52 percent decline.
For the fiscal year, the company's stand-alone net profit was Rs.68.64 crore, up by 17 percent from the Rs.58.72 crore in 2011. Total revenue, including 'other operating income' for the period, fell by 53 percent to Rs.207.29 crore from the Rs.439.55 crore a year ago. .
The company's board recommended a final dividend of Re.0.30 per equity share of Re.1 each for the fiscal year 2012, to be paid between August 06 and 11 this year.
Chairman and Chief Executive Officer M. Rashesh Shah said, "During the year high interest rates, liquidity crunch and severe slowdown in economic activity impacted the performance of India Inc. High crude prices and gold imports put pressure on exchange rates. Lack of credible government action coupled with continuing Eurozone financial crisis worsened the challenging operating conditions. All these forces acting in concert made FY12 a tough year though the fourth quarter environment was better than the rest of the year."
He added, "Our profitability needs to be viewed in the backdrop of impact of challenging environment together with costs that we have consciously incurred to incubate new businesses - life insurance and retail. We have stabilized most of our businesses and are well placed to capture our share of growth when headwinds abate. We expect the operating environment to gradually improve with the interest rates easing and we see growth returning in the latter half of FY13."
At the BSE, Edelweiss Financial Services closed Wednesday's trading at Rs.27.40, down 1.26 percent from the previous close.
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