Results For Quarter Ending June 30, 2009 Q G ,: July 17, 2009
Results For Quarter Ending June 30, 2009 Q G ,: July 17, 2009
Results For Quarter Ending June 30, 2009 Q G ,: July 17, 2009
Q g th,, 2009
July 17, 2009
Presentation structure
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Business strategy
• Industry
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
2
Performance highlights‐ Q1FY10
Overall financial performance
Overall financial performance
¸ Quarterly Income at Rs2.57bn up 37% qoq
¸ EBIDTA margin for the quarter was 37.4%, as compared to 30.3% in the previous quarter
¸ PBT and PAT were at Rs816.9 mn, and Rs516.8mn, up 180% qoq and 104% qoq respectively
Equities
¸ Overall market share on the NSE stood at 3.63% compared to 3.53% in the previous quarter
¸ Average daily volumes stood at Rs32.25 bn as compared to Rs19.16 bn in Q4FY09, an increase of 68% qoq
¸ Strategic agreement with Interactive Brokers LLC will provide India Infoline clients access to 80 exchanges
across 18 countries
across 18 countries
Life Insurance
¸ Commenced business for several insurance companies including Max New York Life Insurance, MetLife,
Reliance Life Insurance, Birla Sunlife
, and Kotak Life Insurance
¸ Annualized Premium Income mobilized stood at Rs.38.40 crores
¸ While the outlook of the business will remain linked with the industry fortune, the company’s position as a
broker will improve over next few quarters
Credit and Finance
Credit and Finance
¸ Re‐commenced Mortgage business in June 2009 given easing of credit markets
¸ Book size Rs9.22bn at the end of June 2009
Wealth Management
¸ Assets under management crossed Rs20 bn
¸ Increased the base for families under advisory
¸ Applied to the FSA in United Kingdom for licence
3
Performance in pictures‐ Q1FY10
Performance review
Revenues (Rs Mn) EBITDA (Rs Mn)
6,088.8
15,000 6,000
4,364.6
10 000
10,000 4 000
4,000
5,000 2,000
- -
Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10
PBT (Rs Mn) EBITDA margin (%)
9,000 40% 37% 37%
8,168.6
7,770.3
8,000
32%
7,000 6,733.8
30%
26%
6,000
23%
5,000 4,535.5
20%
4,000
2,909.3
3,000
10%
2,000
1,000
- 0%
Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10
4
Financial highlights‐ Q1FY10
Rs Mn
Rs Mn Q1FY10
Q1FY10 Q1FY09
Q1FY09 Q4FY09
Q4FY09 Y‐Y
Y‐Y Q‐Q
Q‐Q
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Business strategy
• Industry
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
6
Retail equities
Performance review
¸ Market share on NSE at 3.63% in Q1FY10 as
Market share on NSE at 3 63% in Q1FY10 as
Retail customer base for equity broking
compared to 3.53% in the previous quarter
¸ Average daily turnover up 68% yoy to Rs32.25 bn in 800,000
Number of clients
676,107
Q1FY10 as compared to Rs19.16 bn in the previous 700,000
596,056
quarter
t 600,000
¸ Tie‐up with Interactive brokers will provide clients 300,000
Equities broking (Cash & FAO) IIL market share
2,500 Equities Brokerage Rs Mn (LHS) Av. Daily Vol (Rs.Mn) 40,000 4.5%
NSE Market Share
2150
35,000
2 000
2,000 1914 3.8%
3 8% 3 63%
3.63%
1768 30,000
1585
1483
1,500 25,000 3.2%
1125 1114 1153 20,000 3.03%
1,000 2.6%
15,000
692
10,000 1.9%
500
5,000
1.3%
0 0
Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09
Jun‐07 Sep‐07 Dec‐07 Mar‐08 Jun‐08 Sep‐08 Dec‐08 Mar‐09 Jun‐09
7
Institutional equities
Performance review
¸ Trading for most local institutions and over 100 global investors in India
Trading for most local institutions and over 100 global investors in India
¸ Increased presence in the US markets by hiring of a senior resource stationed in New York
¸ 150+ stocks under coverage, targeting to double coverage universe
¸ In‐depth and thematic printed reports on ‘Gold’, ‘Protectionism’ and ‘India and CHina chartbook’ (a
compendium of 100 charts comparing the 2 economies) were well received by clients
¸ Established credentials in executing large block deals
¸ Deal flow for the Investment banking division expected to improve with improving market sentiments
Research offering
Thematic research that Sizing Up India & China: 100
Sectoral special on Gold with goes far beyond balance charts to compare and
a foreword by ‘Jim Rogers’ sheets and P&L accounts contrast the two economies
8
Insurance
Performance review
¸ Most leading private sector players in Life Insurance industry have recorded a yoy
Most leading private sector players in Life Insurance industry have recorded a yoy decline
¸ Insurance mobilization in Q1FY10 stood at Rs384 mn
¸ Product mix has been significantly changed to increase the contribution of endowment products
¸ Outlook of the business will remain linked with the industry fortunes, but the company’s position as a
broker will improve over next few quarters
Changing product mix Mobilization (Rs Mn)
2,500 Mobilization (Rs mn)
Q1FY09 Q1FY10
1,945
2,000
44%
ENDOWMENT HEALTH ‐
PENSION ULIP 2%
9
Credit and finance
Performance review
Total portfolio size was Rs9 22bn as on June 30th, 2009
¸ Total portfolio size was Rs9.22bn as on June 30 2009
¸ Economy has shown signs of recovery and the demand for credit also is picking up
¸ Have resumed secured lending against the security of residential and commercial property
Number of disbursals Portfolio break‐up
1,574 Q1FY09 Q1FY10
1,600 Secured loans
1,416
Unsecured loans
1,229
10%
1 200
1,200 16% 18% 17%
17%
800 12%
587
528 471
433
368
400 29
291
106 54% 56%
15 28
0
Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Personal Loan Mortagage Loan
Margin Funding LAS/Debenture 10
Wealth management
Performance review
¸ Assets under management crossed Rs20 bn
Assets under management crossed Rs20 bn with increased traction for Family office offering
with increased traction for Family office offering
¸ Products include structures notes, NABARD and bonds, and long‐dated options
¸ Growing domestic and international presence
¸ Created markets for primary/secondary NABARD bonds, Long‐dated options and FCCBs
I I F L P r i vate We a l t h ’s P ro d u c t P ro p o s i t i o n
11
Recent awards and accolades
Performance review
12
Presentation structure
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Business strategy
• Industry
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
13
The journey so far
Corporate overview
Ê Housing Finance
registration
Ê IIFL Wealth
launched Ê In‐principle approval
for Mutual Fund
Ê Insurance broking
approval Ê Venture Capital license
p
300 Ê FII registration
Ê ‘Best Broker’ award
Revenues EBITDA PBT PAT
256
250 241
200 Ê CLSA team joins
Ê Formed IIFL (Asia)
USD Mn)
Pte Ltd
Ê Launched online
150 trading
(U
Ê Li ti
Listing on
Ê Became corporate NSE, BSE Ê DGCX
agent for ICICI Ê Launched membership 106 101
Prudential Ê Commodities proprietary
100 broking
Ê Started trading platform
Ê Launched 71 73
Ê Launched distribution of Ê Launched PMS
financial products
financial products proprietary
p p y 55 55
www.indiain
i di i
platform for 48
50 foline.com
online trading 35 36
29
19 2218 19
9 3 8 6 5 12
2 3 4 3 2 2
0
2000 2001 2002 2003 2004 200
2005 2006 200
2007 2008 2009
-50
14
Vision and strategy
Business Strategy
gy Vision Customer Strategy
gy
¸ Focus on core ¸ Drive customer stickiness
TO BECOME THE
competence in financial through quality
MOST RESPECTED COMPANY IN
services THE FINANCIAL SERVICES SPACE
advice, best value and a
¸ Multiple products and
d l hf l
delightful experience
diverse revenue streams ¸ Cutting‐edge proprietary
ensure de‐risked ¸ Shareholders: High technology for
businesses
businesses OC O
ROCE, ROE execution back office
execution, back‐office
¸ Asset‐heavy or long‐
and customer service
¸ Customers: Value and
gestation businesses experience ¸ Wide, multi‐modal
through separate JVs/
through separate JVs/ network serving as one
network serving as one‐
¸ Employees: Rewards and
group companies stop shop to customers
growth
15
Corporate structure
India Infoline Ltd.
(Bloomberg: IIFL IN)
India Infoline
India Infoline India Infoline India Infoline IIFL Wealth
Media & IIFL (Asia) Pte. IIFL Ventures
Investment Marketing Commodities Management IIFL Realty Ltd. IIFL Capital Ltd.
Research Ltd. Ltd.
Services Ltd. and Services Ltd. Ltd. Ltd.
Services Ltd.
* The above chart does not cover all group companies
16
Management team with proven track record
Corporate overview
¸ Attract and build a team with impeccable academic and professional credentials
Att t d b ild t ith i bl d i d f i l d ti l
¸ Open door, transparent and performance oriented culture
¸ Increasing level of employee ownership
Key Management Personnel
Consumer Finance
Consumer Finance Apul Nayyar
Apul Nayyar Operations Narendra Jain
Narendra Jain
Verticals Corporate Functions
17
Presentation structure
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Business strategy
• Industry
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
18
Well‐diversified financial services company
Business and Strategy
Our service offerings
Equities
• Equities • Wealth management
• Mutual funds • Advisory
Insurance
• Insurance • Financing
Credit & finance
Retail Affluent
CUSTOMER
SEGMENTS
Wealth management
Corporate Institutional
Investment banking
19
Business strategy
Business and Strategy
Focused on financial services De‐risked business model
• Equities Equities Non‐equities
• Consumer finance Retail Institutional
• Investment banking
Investment banking Buy side
Buy‐side Sell side
Sell‐side
• Life Insurance Retail assets Retail liabilities
• Mutual Funds Mass‐affluent HNIs
• Wealth Management India International
STRATEGY
Operational excellence Attract exceptional people with
owner mindset
• Innovative processes powered by • Successful integration of
cutting‐edge technology Institutional equities and Wealth
• Use of technology is all pervasive
Use of technology is all pervasive M
Management teams
tt
• Risk Management has withstood • Building up of the Asset
trial by fire Management team
• Lean and scalable platform with • Entrepreneurial and professional
low fixed costs
low fixed costs environment
• Liberal ‘Ownership‐sharing’
20
How we differentiate ourselves
Business and Strategy
• Promoted by first generation professional entrepreneurs
Managerial depth • Management team unmatched in terms of professional
credentials, experience as well as academic background
• Net worth approximately Rs 16 bn with negligible debt
Well‐capitalized
• Well‐funded to not just weather but take advantage of downturn
• Present at 1,616 business locations, with over 500 own branches
Distribution reach
• Effectively cover 445 cities across India
• The top management is driven by pride and reward of ownership
Owner‐mindset
• To think and work like an owner is part of organization’s DNA
• Only player with proprietary trading platform
Technology edge • Effectively harnessed technology to facilitate processes and provide
superior customer experience
21
Focus going forward
Business and Strategy
Execution to
Execution to Operational
Operational Customer
Customer
Skill development
advisory excellence experience
22
Presentation structure
• Performance highlights
• Business review
• Corporate overview
Corporate overview
• Business strategy
• Industry
Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)
23
Long term macro growth drivers
Industry overview
1 Growing economy‐ India’s GDP expected to grow at 8%, Financial services
likely to grow at 2x GDP
2 Favorable demographics‐ 60% of the population is below 35years of age
about to enter prime age for savings and investing
3 Under‐penetrated market‐ Very low penetration of equity assets as well as
mortgages
4 Capital inflow‐ Indian economy will continue to attract foreign capital owing
to its capacity to absorb capital productively
24
Industry
Total cash market turnover (Rs mn)
Total cash market turnover (Rs mn) Total derivatives market turnover (Rs mn)
Total derivatives market turnover (Rs mn)
600,000 1,200,000
500,000 1,000,000
400,000 800,000
300,000 600,000
200,000 400,000
100,000 200,000
‐ ‐
Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09
Source: NSE, BSE Source: NSE,
8,000
6,717 1,200
7,000
6,000 5,327 1,000
4,940
5 000
5,000 800
4,000 3,264 600
3,000 2,319
400
2,000 1,396 1,496
795 200
1,000
,
‐ ‐
Mar‐03 Mar‐04 Mar‐05 Mar‐06 Mar‐07 Mar‐08 Mar‐09 Jun‐09 Reliance Mutual HDFC Mutual ICICI Prudential UTI Mutual Birla Sun Life
Source: AMFI Fund Fund Mutual Fund Fund Mutual Fund
Source: AMFI
90 80
85 72 80
75 73
50 54
64 63 39
60 59 35
29
48 55 20 19
45 14 16
7 4
52 45
30 37 41 (10) (4) (5)
36 (6) (12)
27 (19) (25) (17) ((18)
(16)
)
15 (23) (23) (23)
15 (40) (27)
(39)
0
(70) (61)
FY04 FY05 FY06 FY07 FY08 FY09 2M FY10
May‐08 Jul‐08 Sep‐08 Nov‐08 Jan‐09 Mar‐09 May‐09
Source: IRDA
Source: IRDA Source: IRDA
Thank you
India Infoline Ltd. All rights reserved. Regd. Off: 75, Nirlon Complex, Off W E Highway, Goregaon (E) Mumbai‐400 063.
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 for
the 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
person from any inadvertent error in the information contained in this publication.
publication The recipients of this report should rely on their own investigations.
investigations IIL and/or
its subsidiaries and/or directors, employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.
27