IIFLCAPSNSEQ4 FY2022May 4, 2022

IIFL Capital Services Limited

2,658words
53turns
8analyst exchanges
3executives
Management on call
R. Venkataraman
MANAGING DIRECTOR &
Ronak Gandhi
CHIEF FINANCIAL OFFICER - IIFL SECURITIES LIMITED
Anup Varghese
HEAD - INVESTOR RELATIONS
Key numbers — 40 extracted
Rs. 362 Crore
distribution strength. Coming to the quarterly results of March 31, 2022 consolidated revenue was Rs. 362 Crores up 41% Y-o-Y and down 2% Q-o-Q, increase in revenue on a Y-o-Y basis is primarily because of g
41%
h. Coming to the quarterly results of March 31, 2022 consolidated revenue was Rs. 362 Crores up 41% Y-o-Y and down 2% Q-o-Q, increase in revenue on a Y-o-Y basis is primarily because of growth in b
2%
quarterly results of March 31, 2022 consolidated revenue was Rs. 362 Crores up 41% Y-o-Y and down 2% Q-o-Q, increase in revenue on a Y-o-Y basis is primarily because of growth in brokerage income, R
Rs. 156 Crore
% Q-o-Q, increase in revenue on a Y-o-Y basis is primarily because of growth in brokerage income, Rs. 156 Crores against Rs. 124 Crores on a Y-o-Y basis, investment banking grew to Rs. 66 Crores versus Rs. 37
Rs. 124 Crore
venue on a Y-o-Y basis is primarily because of growth in brokerage income, Rs. 156 Crores against Rs. 124 Crores on a Y-o-Y basis, investment banking grew to Rs. 66 Crores versus Rs. 37 Crores and our product
Rs. 66 Crore
kerage income, Rs. 156 Crores against Rs. 124 Crores on a Y-o-Y basis, investment banking grew to Rs. 66 Crores versus Rs. 37 Crores and our product distribution income was Rs. 56 Crores versus Rs. 27 Crores.
Rs. 37 Crore
6 Crores against Rs. 124 Crores on a Y-o-Y basis, investment banking grew to Rs. 66 Crores versus Rs. 37 Crores and our product distribution income was Rs. 56 Crores versus Rs. 27 Crores. On a Q-o-Q basis bro
Rs. 56 Crore
stment banking grew to Rs. 66 Crores versus Rs. 37 Crores and our product distribution income was Rs. 56 Crores versus Rs. 27 Crores. On a Q-o-Q basis brokerage income increased at 8% to Rs. 156 against Rs. 1
Rs. 27 Crore
o Rs. 66 Crores versus Rs. 37 Crores and our product distribution income was Rs. 56 Crores versus Rs. 27 Crores. On a Q-o-Q basis brokerage income increased at 8% to Rs. 156 against Rs. 145 Crores, investment
8%
ion income was Rs. 56 Crores versus Rs. 27 Crores. On a Q-o-Q basis brokerage income increased at 8% to Rs. 156 against Rs. 145 Crores, investment banking increased again sharply to 66 Crores agains
Rs. 156
come was Rs. 56 Crores versus Rs. 27 Crores. On a Q-o-Q basis brokerage income increased at 8% to Rs. 156 against Rs. 145 Crores, investment banking increased again sharply to 66 Crores against 33 Crores
Rs. 145 Crore
Crores versus Rs. 27 Crores. On a Q-o-Q basis brokerage income increased at 8% to Rs. 156 against Rs. 145 Crores, investment banking increased again sharply to 66 Crores against 33 Crores and the distribution
Advertisement
Guidance — 7 items
R. Venkataraman
opening
“With this I come to the end of my talk and we will be more than happy and glad to answer any questions that you have.”
R. Venkataraman
qa
“Yes, as per SEBI guidance 50% is going to value and the stock is collateral.”
R. Venkataraman
qa
“Brokerage yield has been continuously trending downwards, cash is about 7.6 paisa and derivatives will be about 0.10 paisa so it is quite low and this has been virtually unchanged for the last two quarters.”
R. Venkataraman
qa
“So we are carrying a book of about 243 Crores we expect the market relatively higher but it is very difficult for me to give a figure on it.”
Rishikesh Oza
qa
“My first question is any outlook on customer acquisition so like how many do we plan to acquire for FY2023?”
R. Venkataraman
qa
“See we do not have a target like this but you know what has happened is that we played by the year so hopefully we should be in the 1.5 to 2 lakh per quarter number.”
R. Venkataraman
qa
“Yes but obviously if the market conditions change we will also change the target.”
Risks & concerns — 4 flagged
So we are carrying a book of about 243 Crores we expect the market relatively higher but it is very difficult for me to give a figure on it.
— R. Venkataraman
So we are continuing our efforts to sell some of the property and we hope that we should see some results, but another deal is done it is very difficult to say, but yes our aim is to sell.
— R. Venkataraman
Difficult to say, Chennai is a big property because Chennai which is about 2,50,000 square feet so I do not have the numbers right now in front of me.
— R. Venkataraman
See, very difficult to give a figure on revenue growth so I do not want to hazard a guess.
— R. Venkataraman
Advertisement
Q&A — 8 exchanges
Q
If you look at our broker margin funding which is MTF is about Rs. 538 Crores at a gross level and so effectively what has happened is that we have tried to make the entire margin trading funding journey user friendly, so we have now launched BNPL (Buy now pay later) which they did not understand because most of them are buying on various e-commerce websites and we believe that the margin funding is a good tool to have to engage with customers and also it helps in customers taking position in the cash segment. The percentage of customer to avail the margin funding I do not have it right now bu
Vivek Ramakrishnan
That is great thank you and Sir then the only collateral we will have is just stock right if the customer defaults? Yes, as per SEBI guidance 50% is going to value and the stock is collateral. Excellent thank you very much that is all I wanted to know. Thanks a lot good luck.
Q
Hi! Sir, thanks for the opportunity. How much would be the yield on the margin book?
R. Venkataraman
The yield on the margin book is roughly about 14%, 15%. What would be the mix between the retail brokerage and the institutional brokerage? Retail brokerage and institutional is roughly about 50:50. Are there any impact on the yield front in the brokerage side? Brokerage yield has been continuously trending downwards, cash is about 7.6 paisa and derivatives will be about 0.10 paisa so it is quite low and this has been virtually unchanged for the last two quarters. Okay that is it from my side. Thank you.
Q
Hi! Sir, my question is around your major tie-up that you have done and I think that for this quarter you added about 2 million clients I just want to know what percentage of those clients were added through these tie-ups?
R. Venkataraman
No sorry, I will correct one figure because the total number of clients we acquired in last quarter is 2 lakh not 2 million. Coming to the tie-ups, I think these tie-ups are not helping us to acquire customers, but they are more at giving a more holistic and a superior digital experience to the customers. So I cannot say whether the customers are coming because of these tie-ups. I think these tie-ups of course joining us so that they engage with us more and spend more time with us. Alright, thank you.
Q
Hi! Very good afternoon and very happy to see the topline growth that however equally concerned with equally aggressive expenses growth, now the question is how do we see the future as we go forward to the next couple of quarters do you see the expenses growing in line with the revenue growth or there will be any changes?
R. Venkataraman
The question you have raised is very correct because what has happened for us last year is that we saw an increase in manpower as employee cost went up, because both in terms of actual headcount, it went up from roughly 1,928 employees to 2,529 employees and then you also had to take wage inflation as actual employee cost went up because we had an increase in employee variable payout as we had a good year, we also saw some increased expenses because of marketing and technology. Marketing was primarily because we are a lead generation marketing company and we invested to acquire a large number
Q
Good afternoon Sir, thank you for this opportunity. If you can just throw some light on the real estate portion and the progress on that? Thank you.
R. Venkataraman
I will just give you the latest position. We have about 6,23,000 square feet of office space which will spread across Ahmedabad, Andheri, even in Andheri Chandivali, Dadar, we have an office in Pune, Thane, Gurgaon, Hyderabad, Chennai, etc., so if you look at the total space I think we are generating rental income from it roughly about it is about 30% from outside and 70% is consumed in-house. So we are carrying a book of about 243 Crores we expect the market relatively higher but it is very difficult for me to give a figure on it. So we have been making efforts to sell, so in the last two, th
Q
Thank you for providing me the opportunity. Sir I gone through the numbers of active plans last year it was around 3 lakh and now it has been around 11 lakhs and if you go to the total number of addition in total clients, so as compared to that the active client has grown has shown a good growth so what helped in making that plan active?
R. Venkataraman
There are two, three reasons for this one is we were obviously benefited from the buoyant capital market. Second thing is that we had a large set of government customers whom we try to activate using a call and trade facility so we had a call center agent trying to reach out, we also tried to merge them digitally, we also to make sure that we activate them, we also have leverage on the IPO’s to make them active and it is a combination of all these things that helps us to make them active. Okay thank you.
Q
Hi! Sir. My first question is any outlook on customer acquisition so like how many do we plan to acquire for FY2023?
R. Venkataraman
See we do not have a target like this but you know what has happened is that we played by the year so hopefully we should be in the 1.5 to 2 lakh per quarter number. So we should continue the current acquisition you are saying right? Yes but obviously if the market conditions change we will also change the target. What revenue growth are we seeing for this year since we are also increasing our manpower and all? See, very difficult to give a figure on revenue growth so I do not want to hazard a guess. Okay no problem that is it. Thank you.
Q
Hi! Sir my question is on your tie-up with Stockal, so that gives access to around 3500 US stocks can you share the pricing of this?
R. Venkataraman
Sorry I do not have it, it is like basically helping Indian customers to trade in overseas stocks so we do not have a standard pricing structure I do not remember it offhand, so I will get it for you. What brokerage is that right? Yes. Yes, I will get it for you. Thank you. If there are no further questions we will come to the end of this call and I thank the participants for their questions and our investor.relations@iifl.com is the e-mail and if you have any questions please feel free to ask so that they can address all those questions. Thank you so much.
Speaking time
R. Venkataraman
19
Moderator
10
Kartik Sahni
5
Pranay Jhaveri
5
Mudita Nahar
4
Rishikesh Oza
4
Vivek Ramakrishnan
2
Nagesh
2
Sumit Jankar
2
Advertisement
Opening remarks
R. Venkataraman
Good afternoon friends and thank you for joining the Q4 FY2022 analyst call for IIFL Securities. I am R. Venkataraman - Managing Director and Co-Founder, along with me are Ronak Gandhi, CFO and Anup Varghese, who heads the Investor Relationship for the group. I also take this opportunity to wish and hope that all your near-dear ones continue to remain safe. The Indian economy was slowly gathering momentum as it came out of the relatively less virulent COVID wave three although there are fears of a wave four and wave five also on the anvil. We have seen increased activity in equity market since the beginning of the pandemic driven by favorable liquidity in both international and domestic markets, higher internet and digital penetration and increased retail participation. As we speak right now global uncertainties like Ukraine-Russia, higher inflation, fears of higher interest rates continues to cause the shadow in liquidity markets not only in India but across the globe. A quick word on
Advertisement
← All transcriptsIIFLCAPS stock page →