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Edelweiss Financial Services Limited Concall Highlights

Edelweiss Financial Services Limited Concall Highlights

Published on 17 June 2021

Q4FY21 Highlights: 

 

  • Consolidated revenue for Q4FY21 was Rs 4,481 Cr
  • Consolidated PAT in Q4FY21 was Rs 637 Cr; Ex-Insurance PAT was Rs 702 Cr
  • Fee Income in Q4 FY21 was Rs 543 cr; above pre-Covid levels.
  • Total retail credit collection in Q4 FY21 was Rs 1,120 cr which increase from Rs 1,078 cr in Q3 FY21
  • Increased digital customer engagement has improved total retail collection efficiency to 96% in Mar’21

 

 

FY21 Highlights: 

 

  • Net worth at the end of FY21 is at Rs 8,542 Cr.
  • Customer Assets up 35% YoY to INR 2,80,800 Cr in FY21
  • Liquidity at the end of FY21 is around Rs 6800 cr
  • Scaled down wholesale credit assets in ECL Finance - Wholesale Book down 35% from FY19 levels. Expected to reduce by ~ 50% by March’23; Successful workouts of INR 1,500 Cr in FY21
  • Successfully closed PAG Partnership at a valuation of INR 4,400 Cr; Edelweiss will hold 38.5% stake in EWM with an option to increase it to ~44%
  • Borrowings Declined By 41% YoY; borrowings in FY20 was Rs 33,754 cr which declined to Rs 25,695 cr in FY21
  • Fixed cost in FY20 was around Rs 2,200 cr which declined to Rs 1,700 cr in FY21; YoY decline was 23%.
  • Key saving drivers in FY21 - Fixed people cost which decreased by ~18% driven by process efficiencies; Premises Cost which is lower by ~40%, driven by branch and office space rationalisation

 

 

Business highlights:

 

Edelweiss Group is diversified across 10 key entities

 

1. NBFC (ECL Finance Ltd. & Edelweiss Retail Finance Ltd.):

 

  • Retail collection efficiency improved to 94% in Mar’21.
  • Workouts on-going in wholesale book for recoveries and resolution.
  • Total collections were at ~INR 650 Cr in Q4 FY21 and ~INR 2,050 Cr in FY21
  • Disbursed ~INR 160 Cr in Q4 FY21 and ~INR 350 Cr in FY21.
  • AUM in FY21 was around Rs 10,526 cr.
  • Liquidity in FY21 was around Rs 2,300 cr.
  • Capital Adequacy in FY21 was around 27.5%.
  • Equity in FY21 was around Rs 3,837 cr.
  • Credit Assets in FY21 were around Rs 15,238 cr.
  • PAT in Q4 FY21 was Rs 132 cr and in FY21 was Rs 29 cr.

 

2. Housing Finance (EHFL):

 

  • Maintained collection efficiency of 99% in Mar’21; Collections of ~INR 450 Cr in Q4FY21 and ~INR 1,500 Cr in FY21
  • Disbursed ~INR 250 Cr in Q4FY21 and ~INR 450 Cr in FY21
  • Raised ~INR 1,350 Cr in FY21: Raised ~INR 450 Cr from PCG and other schemes; Securitized book of ~INR 900 Cr
  • Capital Adequacy in FY21 was around 26.5%.
  • AUM in FY21 was around Rs 4,385 cr.
  • PAT in Q4 FY21 was negative while in FY21 it was Rs 4 cr.
  • Net worth in FY21 was around Rs 763 cr.

 

3. Asset Management (Mutual Fund and Alternative Asset Management):

 

  • Crossed INR 10,000 Cr of equity assets
  • Net equity inflows in Q4FY21 of ~INR 2,000 Cr against industry outflows of ~INR 4,500 Cr.
  • MF equity gross sales in Q4 FY21 was around Rs 2,719 cr which grew from Rs 1,522 cr in Q3 FY21.
  • AUM has nearly doubled in FY21; AUM in FY21 was around Rs 55,000 cr.
  • Launched India’s first passively managed low-cost debt index fund
  • Steady annuity income flows from long term asset base; 80% of AUM has tenor of more than 3 years
  • Net revenue in Q4 FY21 was Rs 39 cr and in FY21 was Rs 120 cr.
  • PAT in FY21 was Rs 5 cr.

 

    Alternative Asset Management:

  • FY21 is the largest fund raise year for Alternatives – Raised ~INR 6,600 Cr
  • Closed Infrastructure Yield fund at ~INR 3,300 Cc.
  • Deployed ~INR 2,800 Cr in Q4 FY21 with total deployment of ~INR 4,100 Cr in FY21.

 

4. Asset Reconstruction (EARC):

 

  • Robust recoveries of ~INR 5,400 Cr in FY21 from 179 borrowers; Q4 FY21 recoveries at Rs 1,800 cr.
  • Liquidity position of ~INR 540 Cr as on March 31, 2021
  • AUM in FY21 was around Rs 40,800 cr.
  • PAT in Q4 FY21 was Rs 45 cr and in FY21 was Rs 186 cr.
  • Net revenue in Q4 FY21 was Rs 79 cr and in FY21 was Rs 340 cr
  • Net worth in FY21 was around Rs 2,222 cr.
  • Capital Adequacy in FY21 was around 37.4%.

 

 

 

5. Life Insurance:

 

  • Crossed INR 400 Cr APE milestone for the first time; 25% YoY growth in Individual APE in FY21.
  • Embedded Value as on March ‘21 at INR 1,256 Cr.
  • Solvency ratio in FY21 was 215%.
  • Policies issued in FY21 were 80,200.
  • Policy holder’s AUM in FY21 was around Rs 3,981 cr.
  • Individual Claims settlement ratio at 97%
  • Total business in Q4 FY21 was around Rs 570 cr and in FY21 was Rs 1,866 cr.
  • PAT was negative in FY21 i.e. -Rs 207 cr.

 

 

6. General Insurance:

 

  • 49% YoY Gross Direct Premium Income (GDPI) growth in FY21 against Industry growth of 5%; taking the overall premium growth for FY21 to ~49% YoY.
  • Solvency ratio in FY21 was 209%.
  • Policies issued in FY21 were around 1,88,200.
  • GWP in FY21 was Rs 226 cr.
  • Equity was around Rs 119 cr.
  • First within the industry to rollout open API gateway for the ecosystem of business partners & developers enabling Plug & Play integration
  • Adoption of video-based remote survey app (BOLT) for motors claims stands at 47% in Q4FY21

 

 

7. Wealth management:

 

  • AUA grew 36%YoY; Clients grew 22% YoY.
  • Net revenue in Q4 FY21 was Rs 320 cr and in FY21 was Rs 1,043 cr.
  • PAT in Q4 FY21 was Rs 65 cr and in FY21 was Rs 245 cr.
  • Net worth in FY21 was around Rs 1,563 cr.
  • 63 deals closed across ECM, DCM, and M&A in FY21.
  • Maintained revenue yields within the range of 70-80 bps.
  • Net new money in FY21 was around Rs 8,500 cr.
  • 93% of revenue came from fee income in FY21.

 

 

7. Insurance Broking (Edelweiss Gallagher Insurance Brokers Ltd.): Insurance Broking partnered with Corporates and Insurance Companies to facilitate insurance products for the informal sector and frontline workers during the pandemic, placed premiums of ~INR 800 Cr in FY21.

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