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Q1 performance: Better show by brokerages during trying times

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But reasons vary for reporting higher net profits by them

Despite the slowdown in the equity markets, brokerages have reported better profits in the quarter gone by compared with the June 2011 quarter. However, different verticals have contributed to the increase in net profits of each.

Take for instance, India Infoline. The company’s net profit almost doubled to Rs 52.21 crore in the June 2012 quarter compared with Rs 27.31 crore in same quarter last year. Its income from financing and investing increased to about Rs 408.26 crore from Rs 182.79 crore (in June 2011).

Nirmal Jain, Chairman, IIFL, said, “Our core businesses of equities and financial products distribution continue to face headwinds. But the overall performance has shown satisfactory growth, helped by steady growth in consumer finance business and tight cost controls.”

Edelweiss Financial Services’ consolidated net profit increased by about 20 per cent to Rs 39.78 crore in the June 2012 quarter. Its total income increased to Rs 527.50 crore (Rs 367.80 crore). The significant increase in its income came from its interest and treasury business. This income almost doubled to Rs 445.62 crore (Rs 296.91 crore).

“We have also recorded some growth in our bottomline in each of the last three quarters.

“This is a result of significant diversification that we have achieved in our businesses and revenue streams.

“We continue to nurture our new retail businesses with plans for scale up of retail finance and life insurance on track,” said Rashesh Shah, Chairman and CEO, Edelweiss Financial Services. “We expect the headwinds to persist in the first half of the current year and see growth returning gradually thereafter,” he added.

JM Financial also reported an increase in its net profits by about 45 per cent to Rs 35.3 crore for the June quarter. Its income increased to Rs 245.43 crore (Rs 206.94 crore). A significant increase in revenues was from its ‘interest and other income from fund based activities.’

Motilal Oswal Financial Services’ consolidated net profit marginally dropped to Rs 20.23 crore in June 2012 from Rs 21.19 crore in the same period last year. This can be partly attributed to the drop in revenue from financing and other activities to Rs 13.95 crore from Rs 33.14 crore (June 2011). However, the income from asset management and advisory business increased to Rs 15.65 crore from Rs 10.48 crore.

priya.s@thehindu.co.in

(This article was published in the Business Line print edition dated August 18, 2012)
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