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Religare Enterprises posted a consolidated net loss during the quarter ended December 2010 due to high expenditure and interest charges.
It reported a net loss of Rs 98.45 crore for the third quarter of the current fiscal against a net profit of Rs 21.8 crore in the corresponding year-ago quarter.
Though the company's total income surged 74 per cent during the quarter to Rs 715.5 crore (Rs 412.9 crore), its total expenses almost doubled. The rise in expenses was mainly due a rise in its operating costs.
Religare had acquired three companies outside India and this had led to operating expenses rising this quarter, said an official with the company. “With the new acquisitions we spent on hiring a lot of people as well. This quarter the revenue has not gone up in proportion to our expenditure.”
Religare had acquired Hong Kong-based equity firm, CJE, the UK operations of South Africa-based BJM and Aviate Global Asia during the December quarter.
Employee costs during the quarter more than doubled to Rs 269 crore. Interest charges soared 187 per cent to Rs 229 crore from Rs 79 crore. The company official said that this was on account of the rise in the interest rates during the quarter.
“The interest rates, which were 7.5 per cent during the previous quarter, are now at around 9 per cent. The borrowing for our NBFC has also gone up. The interest cost has gone up phenomenally during the quarter. We will start passing on this cost to the consumers soon,” he added.
The borrowings of the company rose from Rs 6,000 crore to Rs 8,500 crore.
The company saw a rise in all its important revenue segments. Incomes from finance, investment, financial advisory services, broking-related services, insurance and asset management business saw huge rises.
On a standalone basis, the company reported a net profit of Rs 0.35 crore against a net loss of Rs 4.4 crore in the corresponding year ago quarter. Total income rose to Rs 41.4 crore (Rs 18 crore).
The share price of Religare Enterprises closed down marginally by 0.85 per cent at Rs 499.4 on Tuesday on the BSE.
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