GEOJITFSLNSEQ2 FY23November 02, 2022

Geojit Financial Services Limited

3,238words
47turns
7analyst exchanges
5executives
Management on call
C.J. George
- MANAGING DIRECTOR, GEOJIT FINANCIAL SERVICES LIMITED
Satish Menon
EXECUTIVE DIRECTOR, GEOJIT FINANCIAL SERVICES LIMITED
Jones George
- EXECUTIVE DIRECTOR, GEOJIT FINANCIAL SERVICES LIMITED
Mini Nair
CHIEF FINANCIAL OFFICER, GEOJIT FINANCIAL SERVICES LIMITED
Liju Johnson
- COMPANY SECRETARY, GEOJIT FINANCIAL SERVICES LIMITED
Key numbers — 40 extracted
Rs. 112.2 crore
open for Q&A. In terms of total income for the quarter 2 September ended FY '22-'23, we have done Rs. 112.2 crore, which is 10% higher than the June quarter and 12% lower than the same quarter last year. In term
10%
total income for the quarter 2 September ended FY '22-'23, we have done Rs. 112.2 crore, which is 10% higher than the June quarter and 12% lower than the same quarter last year. In terms of total exp
12%
ber ended FY '22-'23, we have done Rs. 112.2 crore, which is 10% higher than the June quarter and 12% lower than the same quarter last year. In terms of total expenses, it is at Rs. 81.08 crore, whic
Rs. 81.08 crore
June quarter and 12% lower than the same quarter last year. In terms of total expenses, it is at Rs. 81.08 crore, which is 10% higher than the June quarter and 9% higher from the same quarter last year. In te
9%
terms of total expenses, it is at Rs. 81.08 crore, which is 10% higher than the June quarter and 9% higher from the same quarter last year. In terms of distribution of revenue, brokerage and broker
Rs. 75.42 crore
In terms of distribution of revenue, brokerage and brokerage-related activities, the revenue was Rs. 75.42 crore, which is 8% up from the June quarter and 16% down from the previous year. In terms of revenue fr
8%
of revenue, brokerage and brokerage-related activities, the revenue was Rs. 75.42 crore, which is 8% up from the June quarter and 16% down from the previous year. In terms of revenue from the financ
16%
age-related activities, the revenue was Rs. 75.42 crore, which is 8% up from the June quarter and 16% down from the previous year. In terms of revenue from the financial product distribution, we have
Rs. 23.22 crore
from the previous year. In terms of revenue from the financial product distribution, we have done Rs. 23.22 crore, which is 23% up from the June quarter and 18% up from the previous year. Financial product dis
23%
terms of revenue from the financial product distribution, we have done Rs. 23.22 crore, which is 23% up from the June quarter and 18% up from the previous year. Financial product distribution is spl
18%
ial product distribution, we have done Rs. 23.22 crore, which is 23% up from the June quarter and 18% up from the previous year. Financial product distribution is split into 2 portions primarily: Mut
Rs. 17.95 crore
us year. Financial product distribution is split into 2 portions primarily: Mutual fund, which is Rs. 17.95 crore, up 11% and 18%; and insurance income of Rs. 4.66 crore, which is up 129% from the June quarter a
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Guidance — 7 items
C. J. George
qa
“So, we will be open to the idea of acquiring that stake as and when they're ready to offer us.”
Varun Bang
qa
“Meanwhile, how do you think the liquid investment in the company will be utilized?”
Pranav Tendulkar
qa
“So, what is our plan to take this 20,000 to 1 lakh, 2 lakh, 3 lakh or 5 lakh using technology?”
Anil
qa
“And what are the desired outcomes you may hope to achieve in short to medium term?”
Jones George
qa
“In the coming months, we will be doing a complete overhaul of our other trading platforms as well as our Customer 360 platform called MyGeojit.”
Jones George
qa
“So, in the next 1 year, there is a vision that we have set in which there will be a lot of new releases as well as new offerings in terms of Smartfolios.”
C.J. George
qa
“So, the target that you are talking about, around that figure is what we have internally fixed, but this will not be done in 2 years' time.”
Q&A — 7 exchanges
Q
Sir, the first question is on Geojit Technologies, where we have 65% stake. Sir, what is the opportunity you see there outside what is there for Geojit Financial? And do you have plans to buy out the entire stake from BNP? And how do you think we are placed there given the business from BNP is almost 0 now?
C. J. George
I'm C.J. George here, I will take this question. It is true that most of the business of Geojit Technologies is now coming from Geojit Financial Services. We are on the lookout for expanding this business outside Geojit. It's also true that the BNP Paribas business, that is the business where we used to export software to the European units of BNP Paribas has now stopped. With regard to your question on whether we are planning to buy back the stake from BNP Paribas, I can only say that as and when BNP Paribas approaches us, we will take a view depending on the valuation and depending on the op
Q
Sir, my question pertains to the initiatives that we have taken on the STEPS. And could you please throw some light in the outlook, what are action plans regarding this? And also, can you please provide the status of Geojit IFSC opened in Gujarat GIFT City?
C.J. George
I will take this question. With regard to STEPS, this is a financial planning platform. We have ambitious plans with regard to this business, but we need to be reminded of the fact that this is a long-term business. This is unlikely to grow into a big business in the immediate future because it is a fee-based business where we collect only fee and no brokerages, no commissions, so you know how the industry is. So, we have currently 5 offices. From 5 offices, qualified financial planners have started giving investment advisory service to clients. We prepare financial plans for them. I can only
Q
Sir, just for comparison sake, Angel One is adding, say, 13 lakh customers per quarter. ICICI Securities is adding 4.5 lakh new customers per quarter, and we are around 20,000. So, what is our plan to take this 20,000 to 1 lakh, 2 lakh, 3 lakh or 5 lakh using technology? And do we have these plans?
C.J. George
Pranav, I will answer one part of this question. Number one, we are still not in the space of discount broking. So, we have one limitation with regard to attracting customers using the discount broking model. But at the same time, I can very well say that these customers who we are acquiring currently, these are in the same segment of customers that we have been acquiring in the past also where customer relationship continues for years and years. And then if you look at the yield from these customers, the yield also is significantly high compared to the industry. I agree with the observation t
Q
I have a question regarding is there any possibility that the brokerage rates will eventually raise from the current level for the industry as a whole? If so, how long it will take? If not, what would be our priorities and strategies to counter these new age players?
C.J. George
I will take this question. Even today, if we take the yield, particularly the delivery yield, that is the significant part of our business. The delivery yield, even with this competition, continues to be steady. This is the observation that Satish made in the beginning itself. So, we have also seen, for some of our products, brokerage rates going up. I cannot make any observation with regard to industry. From our experience, what we have seen is, if we have a product or if we have a service that is convincingly in a position to create wealth for the customers, customers are willing to pay for
Q
Sir, in your perspective, how important this branch addition is going to be from next few years’ perspective? And will our growth be linked branch expansion or with digitization we can grow business even without opening new branches?
C.J. George
These are 2 different verticals the way we look at it. So, branch capability is basically for building relationships that is enabling us in cross-selling. So, what we have seen is the nearer we are to the customers, the deeper the relationship is. And we are able to sell new products to those customers, of course, if the products are good. And then our yield is also relatively better. So, these offices, which we opened recently, 29 offices, these are not offices in cities and major towns. These are offices in semi-urban areas, in rural Tamil Nadu and rural Kerala where we are seeing an opportu
Q
I will come back in the queue.
Satish Menon
If there are no further questions, close it? Yes. We can then conclude, Satish, if there are no more questions.
Q
Thank you, everyone, for joining this call. If you have any further questions, you can contact the company secretary, and we'll be happy to answer them. Thank you very much. Have a nice day.
C.J. George
Thank you very much. Thank you.
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Speaking time
C.J. George
10
Moderator
9
Varun Bang
9
Satish Menon
8
C. J. George
3
Saji John
2
Pranav Tendulkar
2
Anil
2
Mini Nair
1
Jones George
1
Opening remarks
Satish Menon
Thank you, Michelle, and a very warm good evening to everyone, and welcome to this Geojit Financial Services Quarter 2 Investment Call. In this call, we have Mr. C.J. George, Managing Director; myself, Executive Director; Jones George, Executive Director; and Ms. Mini Nair, CFO of the company; and Liju Johnson, Company Secretary. Before we open into Q&A, I'll just take you through the broad numbers of quarter 2, then we can open for Q&A. In terms of total income for the quarter 2 September ended FY '22-'23, we have done Rs. 112.2 crore, which is 10% higher than the June quarter and 12% lower than the same quarter last year. In terms of total expenses, it is at Rs. 81.08 crore, which is 10% higher than the June quarter and 9% higher from the same quarter last year. In terms of distribution of revenue, brokerage and brokerage-related activities, the revenue was Rs. 75.42 crore, which is 8% up from the June quarter and 16% down from the previous year. In terms of revenue from the financia
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