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India Infoline Limited
Results for Quarter ended December 31, 2010
February 5, 2011
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• Performance highlights
• Business review
•
• Industry update
2
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010
8/6/2019 31585254 IIFL Q3FY11 Analyst Presentation
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Performance highlights – Quarter ended Dec 31, 2010
For the quarter, Income stood at `4,596 mn, up 59% yoy and 35% qoq
EBIDTA margin was 47.8% as compared to 39.9% in the previous quarter
PAT stood at `671 mn up 13% yoy and 24% qoq
Equities Broking and related
Average daily turnover was around `62 bn, up 66 % yoy, up 34 % qoq
IIFL market share in NSE was 4.2% during the quarter
The Wealth Management business continues to grow. The assets under advisory are over `150 bn
During the quarter, our Investment Banking team handled Qualified Institutional Placements (QIPs) of
three mid‐sized companies
Financing and Investing
The aggregate loan book size increased to around `30 bn from `25.7 bn in the last quarter
NPAs on the book continue to remain less than 1%
Insurance, Marketing and Distribution
Insurance premium mobilization in the quarter was around `666 mn, up 7 % yoy
During the quarter, share of ULIP has increased from 8% to 26%
3Results for Quarter ended December 31, 2010
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Financial highlights: Quarter ended Dec 31, 2010
` Mn Q3FY11 Q2FY11 Q‐Q Q3FY10 Y ‐Y
Equities, Broking and related income 1,870.1 1,634.0 14.5% 1,929.1 (3.1%)
Financing and Investing income 2,253.3 1,252.7 79.9% 598.4 276.6%
. . . . .
Other
income 1.8
5.4 (66.5%) 3.5 (47.9%)
Total Income 4,596.3 3,399.1 35.2% 2,897.3 58.6%
A. Direct cost 695.7 444.6 56.5% 423.8 64.2%
B. Employee cost 1,041.8 986.8 5.6% 828.2 25.8%
C. Administration expenses 659.8 610.1 8.1% 516.4 27.8%
EBITDA 2,199.0 1,357.6 62.0% 1,128.9 94.8%
Interest 1,042.3 385.3 170.5% 10.4 9969.4%
Depreciation and amortization 150.6 155.3 (3.0%) 150.0 0.4%
Profit / (Loss) before tax 1,006.1 817.0 23.1% 968.5 3.9%
Provision for taxation 322.7 267.5 20.6% 341.7 5.6%
Profit/(Loss) after tax before minority 683.4 549.5 24.4% 626.8 9.0%
Minority Interest 12.8 8.1 58.6% 31.7 (59.6%)
Profit/(Loss) after tax 670.6 541.4 23.9% 595.1 12.7%
4Results for Quarter ended December 31, 2010
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Financial highlights: April to December, 2010
` Mn 9MFY11 9MFY10 Y ‐Y
Equities, Broking and related income 5,047.4 5,370.8 (6.0%)
Financing and Investing income 4,603.8 1,949.4 136.2%
, . . .
Other
income 9.0
6.6
35.9%Total Income 11,055.3 8,140.8 35.8%
A. Direct cost 1,617.7 1,170.8 38.2%
B. Employee cost 2,948.3 2,207.1 33.6%
C. Administration expenses 1,842.5 1,418.8 29.9%
EBITDA 4646.8 3344.1 39.0%
Interest 1,710.5 173.1 888.2%
Depreciation and amortization 460.0 415.6 10.7%
Profit / (Loss) before tax 2,476.3 2,755.4 (10.1%)
Provision for taxation 802.9 938.3 14.4%
Profit/(Loss) after tax before minority 1,673.4 1,817.1 (7.9%)
Minority interest 29.9 125.0 (76.0%)
Profit/(Loss) after tax 1,643.5 1,692.1 (2.9%)
5Results for Quarter ended December 31, 2010
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• Performance highlights
• Business review
•
• Industry update
6
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010
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Equities
ar e s are on ncrease o . n
Average daily turnover up 66% yoy in Q3FY11 to around `62 bn
Present in over 2,700 business locations through branches and sub‐brokers
We launched of our latest version of the Trader Terminal which has a lightning fast execution speed,
world class user interface and a single‐click access to our world‐class research
Average Daily Turnover (` mn) Market share on NSE (in %)
7Results for Quarter ended December 31, 2010
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Commodities
ommo es mar e s are ncrease o . n
Average daily turnover up 79% yoy in Q3FY11 to around `8 bn
The commodities market turnover has increased by 12% over the last quarter
Average Daily Turnover (` mn) Market share (in %)
6,547
7,801
7,000
8,000
9,000
2.0%
2.1%
2.0%
2.2%
4,367
4,660
5,206
4,000
5,000
6,000
1.6%1.7%
1.8%
1.6%
1.8%
1,000
2,000
3,000
1.2%
1.4%
8Results for Quarter ended December 31, 2010
‐
Dec 09 Mar 10 June 10 Sep 10 Dec 10
1.0%
Dec 09 Mar 10 June 10 Sep 10 Dec 10
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Research
Over 150 stocks under coverage Our in‐depth, thematic research has been well received. Our recent research reports include:
INCH Chartbook: Sizing Up India and China
– ’
consumption
Singapore Commodities – A detailed report on three leading Singapore‐based commodity
traders
IIFL’s 2nd Global Investors’ Conference, ‘Enterprising India II’ is scheduled to be held in Mumbai
this month. We have received an overwhelming response from global investors, corporates and
eminent
leaders –
Black Diamond: Adetailed analysis of India’s coal industry
Discover Sri Lanka: Aprimer on this promising
market
Rigorous companyresearch that goes far
beyond the basics
INCH Chartbook:Sizing Up India and
China
High on Gas: How naturalgas will transform India’s
energy consumption
Three leadingSingapore-based
commodity traders
9Results for Quarter ended December 31, 2010
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Insurance
Insurance premium mobilization in Q3FY11 was around 666 mn, up 7% yoy
During the quarter, share of ULIP has increased from 8% to 26% due to launch of new low
charge products by manufacturers
e c anges ma e y t e regu ator w ene t t e consumers an strengt en t e un amenta s
of the industry in the long term
Changing product mix Marketing and Distribution income (` mn)
Q2FY11 Q3FY11600
8%
18%1%
26% 366.4
479.0
417.0
.
471.1
400
500
73% 73%
1%
100
200
10
Guaranteed return ULIPs ULIP Pension Health
Results for Quarter ended December 31, 2010
0
Dec
09 Mar
10 Jun
10 Sep
10 Dec
10
Endowment
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Financing and Investing
e oans por o o as on ecem er , ncrease o aroun n
99% of the loan portfolio is secured against collateral of mortgages, shares, debentures and
other securities
Mortgages contri ute to 52% o t e en ing oo , o owe y margin un ing, oan against
securities and personal loans at 27%, 20% and 1% respectively
‐
Q2FY1129.730
35
Q3FY11
2%
43%
21%
12.0
16.3
19.5
.
15
20
25
52%
20%
34%
5
10 27%
11
Margin Funding LAS/DebentureDec 09 Mar 10 Jun 10 Sep 10 Dec 10
Results for Quarter ended December 31, 2010
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Financing and Investing
s on e oo s con nue o rema n ess an
Net interest margin and loan spreads, both are at healthy levels
During the quarter, we commenced Healthcare Financing. The products being offered include
‐ , ,
finance on existing equipment
Net Interest Margin and Loan Spread (%) Gross and Net NPA (%)
0.8%0.8%
0.9%
Gross NPA Net NPA
16%
NIM Spread
0.6%
0.7%
0.5%
0.5%
0.5%
0.7%
0.4%0.4%
0.5%
0.6%
0.7%.
12.8%
10.3%
7.2%8%
10%
12%
14%
0.1%
0.2%
0.3%
.
7.6%7.0%
4.9%
2%
4%
6%
12
0.0%
FY10 Q1FY11 Q2FY11 Q3FY11
Results for Quarter ended December 31, 2010
0%
FY10 Q1FY11 Q2FY11 Q3FY11
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Wealth management
Introduced Family Office – A multi‐manager investment platform offering a complete wealth
structuring solution including inter‐generational transfer, to clients
Have continuousl invested in u radation of s stems technolo and rocesses and built a
robust platform supporting multiple asset classes
Product Platform
Debt
Bonds & Other Debt
Equity
Direct Equity
Real Estate
RE Advisory
Cash
Cash & Cash
Equivalents
Debt Mutual Funds
Debt Structured
Products
Debt Managed A/c’s
Equity Mutual Funds
Equity Managed A/c’s
Equity Structure
Products
(Discretionary PMS)
(DPMS)(DPMS)
Private Equity
Transactions
Managed Accounts
(Discretionary PMS)Loan Assignments
13Results for Quarter ended December 31, 2010
Separate Demat
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Investment banking
‐
sized companies
The company continues to invest in strengthening its investment banking team and infrastructure
Deal Snapshot: 9MFY11
GDRQIPQIP
Cox
&
Kings
India
Ltd.
,. ,
Vardhman
Textiles
Ltd.
. ,
Tilaknagar
Industries
Ltd.
RightsIPORs 774mn
IPORs 2,000mn
2010
BRLMSole BRLMBRLM
Videocon
Industries Limited
,
Talwalkars Better Value
Fitness Limited
Parabolic Drugs Limited
2010
14Results for Quarter ended December 31, 2010
Lead Manager
2010
Sole BRLM
2010Member of the
Syndicate
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International Operations
commence ro ng opera ons n o om o an ngapore
The company donated its entire first week commissions from trading operations in SGX to
Community Chest, Singapore
IIFL receive FSA License in Lon on, UK or a vising on investments an arranging ea s in
investments for eligible counterparty and Professional Investors
Our international footprintIIFL Securities research products
INCH Chartbook: Three leading
New York
London
China
ngapore- asecommodity traders
Dubai
Singapore
Colombo
15Results for Quarter ended December 31, 2010
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• Performance highlights
• Business review
•
• Industry update
16
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010
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Evolution
Income
` mn1995
Commenced
operations
as
an
Equity
Research
firm
1997 Launched research products of leading Indian
companies, key sectors and the economy
Client included leading FIIs, banks and companies
Launched www.indiainfoline.com
9,280 8,775
11,239 11,055
2000 Launched online trading through www.5paisa.com
Started distribution of life insurance and mutual fund
2003 Launched proprietary trading platform Trader Terminal
for retail customers
742
2,021
,
FY05 FY06 FY07 FY08 FY09 FY10 9MFY11
2004 Acquired commodities broking license
Launched Portfolio Management Service
2005
Maiden
IPO
and
listed
on
NSE,
BSE
1,599
1,448
2,320
1,643
2006 Acquired membership of DGCX
Commenced the lending business
2007 Commenced institutional equities business under IIFL
Formed Singapore subsidiary, IIFL (Asia) Pte LtdNetworth (` mn)
217492
756
FY05 FY06 FY07 FY08 FY09 FY10 9MFY11
14,892 15,447 16,053 17,9952008 Launc e IIFL Wea t
Transitioned to insurance broking model
2009 Acquired registration for Housing Finance
SEBI in‐principle approval for Mutual Fund
17
5221,943
3,251
FY05 FY06 FY07 FY08 FY09 FY10 H1FY11
2010 Received membership of the Singapore Stock Exchange
Received membership of the Colombo Stock Exchange
Results for Quarter ended December 31, 2010
9MFY11
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Business Model
• Wealth management
• Financial advisory
•
Our service offerings• Equities, commodities broking
• Mutual funds distribution
• Insurance distribution
Retail Affluent
qu es
Insurance
•Loans
CUSTOMER
SEGMENTS
Credit & finance
InstitutionalCorporate
Asset management
• Institutional equities
• Derivatives• Investment banking
• Corporate debt
Investment banking
18Results for Quarter ended December 31, 2010
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Corporate Structure
India Infoline Ltd.(Bloomberg: IIFL IN)
India Infoline
Commodities
India Infoline
Investment
Services
India Infoline
Media &
Research
Services
IIFL RealtyIIFL (Asia) PteIIFL Wealth
Management
IIFL VenturesIIFL Capital
India Infoline
Marketing
& Services
Moneyline
CreditIndia
Infoline
Housing
Finance
India
Infoline
Distribution
Co.
India
Infoline
Insurance
Brokers
India
Infoline
Insurance
Services
19
* The above chart does not cover all group companies
Results for Quarter ended December 31, 2010
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Vision and Strategy
Vision
“To become the Most Respected Company in the financial services space”
Continuously assimilate, Drive stickiness through high
Business
Strategy Customer
Strategy Attract exceptionally
People
Strategy
knowledge to power
superior financial decisions
Focus on core competence in
Maintain cutting‐edge
proprietary technology
Wide multi‐modal network
Ensure conducive
environment
‐
financial services
Ensure de‐risked business
through multiple products
serving as one‐stop shop to
customers
an verse revenue streams
20Results for Quarter ended December 31, 2010
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Management Team
eam w mpecca e aca em c an pro ess ona cre en a s
Open door, transparent and performance oriented culture
Increasing level of employee ownership
Management Team
Chairman and Managing Director Nirmal Jain Executive Director R. Venkataraman
Institutional Equities
Investment Banking
H. Nemkumar
Ajit Menon, Donald D’Souza
Finance
Compliance
O erations
LP Aggarwal
R Mohan
Retail Broking
Wealth Management
Nandip Vaidya
Karan Bhagat
Audit & Risk
Human Resources
Upendra Jaiswal
Capt Rahul Sharma
International
Operations Bharat
Parajia Technology Sankarson
Banerjee
Offshore Asset ManagementDeepesh Pandey, Manish
Srivastava
Insurance Distribution Mukesh Kumar Singh
21
Corporate FunctionsVerticals
Results for Quarter ended December 31, 2010
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Corporate governanceEminent independent directors of group companies
A.K. Purwar Independent Director• Joined State Bank in 1968 and became chairman in 2002
• Became Chairman of Indian Banks Association in the year 2005‐06
• Received CEO of the year’ and ‘Outstanding Achiever of the year’ award
Name Designation Brief Profile
Nilesh
Vikamsey Independent Director
• Chartered Accountant and partner of Khimji Kunverji & Co
• Part of the Managing Council and heading the Corporate Members
Committee of the Chamber of Tax Consultants (CTC)
• Director and Chief Executive of LIC Housing Finance Limited ‐1998 to 2002
M. N. Singh
n epen en rec or
Independent Director
• oncurren y was e o are omes
• Served as Deputy President of Governing Council of Insurance Institute
• Joined the ‘Indian Police Service’ in 1967
• Worked as the chiefs of the crime branch of Mumbai Police, State CID and
Anti‐Corruption Bureau
Category‐wise shareholding (%)
Board Committees Key Role
Board Committees
11.7%
MFs, UTI,Audit Committee Supervise financial reporting process and ensure
compliance with statutory requirements
Compensation
Committee
Review compensation of Executive & Non – Executive
Directors and senior employees
31.3%
27.0%
Promoter &
Promoter
Group
Public &
FI,
Banks
FIIs
22
are rans er
Investor Grievance
ev ew nves or gr evances an ensure re ressa o
the satisfaction of the shareholders
Results for Quarter ended December 31, 2010
30.0%
Others
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How we differentiate ourselves
• Promoted by first generation professional entrepreneurs
• Highly qualified and experienced Management teamManagerial depth
• Net worth approximately `18 bn
• Significant
unutilized
capacity
to
leverage
Well‐capitalized
,
• Global footprint covers Colombo, Dubai, New York and SingaporeDistribution reach
• The top management is driven by pride and reward of ownership‐
• To think and work like an owner is part of organization’s DNA
• Uniquely placed with proprietary front, mid and back office software
• Effectivel harnessed technolo to rovide su erior customer ex erienceTechnology edge
• De‐risked and diversified business model across multiple revenue streams
• Multiple products across all segments of financial servicesDe‐risked
23Results for Quarter ended December 31, 2010
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• Performance highlights
• Business review
•
• Industry update
24
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
Results for Quarter ended December 31, 2010
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Equities
Source: Bloomberg, IIFL Research
Institutional Share of cash market volumes Increasing share of derivatives turnover in market
Source: Bloomberg, IIFL Research
25
Source: Bloomberg, IIFL Research. Based on provisional data from the exchanges Source: Bloomberg, IIFL Research
Results for Quarter ended December 31, 2010
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Insurance
APE market share (%) – Dec 2010APE yoy growth (%) – Dec 2010
Source: IRDA
APE growth YTD yoy (%) – Dec 2010 Annual life insurance premiums in USD bn (2008)
Source: IRDA
11
8
6
5
1
1
111
96
66
53
49
22
26
Source: IRDA
578
343
181
0 100 200 300 400 500 600 700Source: IIFL Research
Results for Quarter ended December 31, 2010
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Mutual funds
– –
Source: AMFI
AUM by asset class (` bn)
Source: AMFI
Domestic equity MFs have seen net outflows YTD (` bn)
27
Source: IIFL ResearchSource: AMFI
Results for Quarter ended December 31, 2010
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Capital raising and Fund flows
Capital raised through QIPs (` bn) Capital raised through IPOs (` bn)
FDI inflows (US$bn)Net FII flows (US$bn)
Source: Bloomberg, IIFL Research Source: Bloomberg, IIFL Research
28
Source: Bloomberg, IIFL Research Source: RBI, CMIE, IIFL Research
Results for Quarter ended December 31, 2010
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Thank you
Published in February 2011. © India Infoline Ltd 20010‐11.
India Infoline Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B‐23, Thane Industrial Area, Wagle Estate, Thane – 400604.
Tel.: +(91 22)4007 7000 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 or solicitation forthe purchase and sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your responsibility alone and India
Infoline Ltd (hereinafter referred as IIL) and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences of such
action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, but do not represent that
it is accurate or complete. IIL or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any
29
. .
its subsidiaries and/or directors, employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.