- Consolidated Profit After Tax (including OCI): INR1,021 crore, up by 52% year on year.
- Consolidated Operating Net Revenue: INR1,133 crore, up by 32% year on year.
- Return on Equity: 44%.
- Consolidated Operating Profit After Tax: INR431 crore, up by 41% year on year.
- Assets Under Advice: INR5 lakh crore at the end of June '24.
- Wealth Management Business Profit After Tax: INR177 crore, up by 69% year on year.
- Asset and Private Wealth Business Profit After Tax: INR157 crore, up by 30% year on year.
- Capital Markets Business Profit: INR57 crore.
- Housing Finance Profit: INR28 crore.
- Net Worth: INR9,784 crore as of June 30, up by 41% year on year.
- Wealth Management Business Net Revenues: INR530 crore, up by 42% year on year.
- Assets Under Advice in Wealth Management Business: INR265,000 crore, up by 105% year on year.
- Distribution AUM: INR26,171 crore, up by 42% year on year.
- Distribution Net Sales: INR1,449 crore for the quarter.
- Cash Market Share: Increased by 186 basis points year on year to 8%.
- Futures and Options Market Share: Grew by 225 basis points year on year to 9.5%.
- Clients Acquired: 150,000 in the first quarter.
- Business Locations Covered: 2,500+ locations, encompassing 98%+ of all PIN codes in the country.
- Capital Market Business Net Revenues: INR134 crore.
- Investment Banking Deals Completed: Six deals with an issue size of nearly INR5,400 crore.
- Asset and Private Wealth Business Net Revenues: INR385 crore, up by 32% year on year.
- Asset Management Business AUM: INR87,580 crore as of June 30, up by 70% year on year.
- Asset Management Business Net Revenues: INR164 crore, up by 46% year on year.
- Gross Sales in Asset Management: INR8,840 crore for the first quarter, up by 4 times year on year.
- Net Flows in Asset Management: Positive INR5,021 crore in the first quarter.
- Mutual Fund AUM: INR60,500 crore, up by 81% year on year.
- Alternate AUM: INR27,000 crore+, up by 50% year on year.
- AIF AUM: Crossed INR12,000 crore mark.
- New SIPs Added: 570,000 in the first quarter.
- SIP Flows: INR1,200 crore for the first quarter.
- SIP AUM: INR14,600 crore.
- Private Equity Business Fee Earning AUM: INR10,640 crore.
- Private Wealth AUM: INR138,800 crore, up by 65% year on year.
- Private Wealth Net Revenues: INR185 crore, up by 27% year on year.
- Home Finance Business Profit: INR28 crore.
- Home Finance AUM: INR4,122 crore, up 9% year on year.
- Home Finance Disbursements: INR252 crore for the quarter, up by 171% year on year.
- Net Interest Income in Home Finance: INR83 crore, up 9%.
- Yield on Advances: 14%.
- Cost of Funds: 8.4%.
- Spreads: 5.6%.
- Sales RMs Strength: 951, up by 117% year on year.
- Gross NPAs: 1.17%.
- Net NPAs: 0.63%.
- Net Gearing: 2 times.
- Capital Adequacy: 46.5%.
- Return on Assets: 2.6% in the first quarter.
- Total Equity Investments: Over INR7,000 crore, up 47% year on year.
- Cumulative Equity XIRR: 19.6%.
Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated profit after tax, including OCI, was INR1,021 crore for the quarter, up by 52% year on year.
- Consolidated operating net revenue stood at INR1,133 crore, up by 32% year on year.
- Return on equity stood at 44%.
- Assets under advice crossed the INR5 lakh crore mark at the end of June '24.
- Wealth management business profit after tax stood at INR177 crore, up by 69% year on year.
Negative Points
- Sequential dip in distribution income due to higher insurance income in the previous quarter.
- Net interest income at INR185 crore remained largely flat on a QoQ basis.
- Higher operating expenses due to an increase in RM count, with 31% of RMs having less than three years of experience.
- Sequential decline in brokerage revenues due to lower overall volumes.
- Impact of new transaction charges regulation expected to be around INR40 crore annually.
Q & A Highlights
Q: Distribution income has seen a sequential dip. Can you explain that? Also, the net interest income at INR185 crore-odd is largely flat on a QoQ basis. Is it due to lending yields dropping? Lastly, does the capital markets business now consist of [IV and IE] business?
A: Sequentially, Q4 revenues of the distribution business included higher insurance income, which is typical for that quarter. On a YoY basis, insurance distribution revenues have grown. The NII is flat due to lower lending exposure and higher liquidity maintained during the election period. The capital market segment now includes institutional equities and investment banking business.
Q: Can you provide the one deputy number in the housing finance business? Also, what regulation impacts the derivative segment, and how do we foresee the impact on OpEx? Lastly, what is the net new money in the wealth management business for this quarter?
A: The one deputy number in housing finance is 5.7%. The impact of new regulations on transaction charges is estimated at INR40 crore annually, which is minimal. The net new money in the wealth management business for this quarter is INR5,000 crore.
Q: You mentioned the term "transformation" frequently. What major changes are you planning?
A: We aim to provide more holistic financial solutions to our broking and distribution clients, similar to what we offer in our private wealth business. This includes a dedicated team to enhance client relationships and offer comprehensive financial advice.
Q: Is there a digital plan to catch up with competitors?
A: Yes, the RISE Super App is our digital proposition encompassing all our offerings. We are investing significantly in technology and digital initiatives, including AI, to improve client engagement and operational efficiency.
Q: Can you explain the sequential decline in wealth management profits despite market highs?
A: The decline is due to higher insurance revenues in Q4 and lower overall volumes in brokerage revenues. Additionally, Q4 included annual carry income from our alternate assets, which is not present in Q1.
Q: How are you planning to use AI, and will it be developed in-house or outsourced? Also, do you have plans for algorithmic and high-frequency trading for retail investors?
A: We are developing AI in-house to improve business analytics and customer touchpoints. For trading, we have third-party vendor tie-ups for algos and high-frequency trades and are developing strategies for retail clients.
Q: How will the new STT charges impact your business?
A: The impact of increased transaction charges is estimated at INR40 crore annually, which is minimal. Historically, STT rate increases have not significantly impacted market volumes.
Q: Can you quantify your digital spending and its expected impact?
A: We have spent around INR150 crore on technology and digital initiatives, including AI and security enhancements. This investment aims to improve productivity, customer engagement, and compliance with regulatory requirements.
Q: What is the impact of the new regulation on transaction charges and lot sizes in derivatives?
A: The impact on transaction charges is estimated at INR10 crore per quarter. We are awaiting SEBI's final guidelines on lot sizes, but historically, such changes have had short-term impacts with long-term alignment.
Q: How do you plan to address the sequential decline in wealth management profits?
A: The decline is due to seasonal factors like higher insurance revenues in Q4 and lower brokerage volumes in Q1. We expect these to normalize over the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
