JM Financial’s consolidated revenue is up YoY by 24% and consolidated net profit up by 19% for the quarter ended June 30, 2016
JM Financial’s consolidated revenue is up YoY by 24% and consolidated net profit up by 19% for the quarter ended June 30, 2016.
Mumbai, August 2, 2016: The Board of Directors of JM Financial Limited, at its meeting held today, approved the unaudited financial results for the first quarter ended June 30, 2016.
Summary of Consolidated quarterly results
(Rs. in crore)
|
Particulars
|
Quarter ended
June 30, 2016
|
Quarter ended
June 30, 2015
|
%
increase
|
|
Total income
|
475.43
|
383.02
|
24%
|
|
Profit before tax
|
171.09
|
145.83
|
17%
|
|
Net profit after tax and
before minority interest
|
117.11
|
100.23
|
17%
|
|
Net profit after tax, minority
interest and share of
associates
|
86.09
|
72.35
|
19%
|
The Earnings per share and Diluted Earnings per share, for the said quarter is Rs. 1.09 and Rs. 1.08 respectively (not annualised). The consolidated net worth as at June 30, 2016 stands at Rs. 2,894 crore and the debt equity ratio is 2.3 times.
Nimesh Kampani, the founder and Chairman of JM Financial Group announced his decision to retire from executive role at the Group with effect from September 30, 2016 on his attaining 70 years of age. Mr. Kampani will continue to be the non-executive Chairman for the Group and a director on the Board of Directors of a few Group Companies at JM Financial.
The Board of Directors at their meeting today appointed Vishal Kampani as the Managing Director of JM Financial Limited, the listed holding company with effect from October 1, 2016. Vishal Kampani has been actively engaged with business at JM Financial since last 20 years and is the Managing Director of the Group’s NBFC JM Financial Products Limited and heads the Institutional Securities Business currently. With his appointment as Managing Director of JM Financial Limited, he is set to assume oversight on all the businesses in the Group.
Commenting on the results and financial performance, Mr. Nimesh Kampani, Chairman, JM Financial Group, said…
“Given the improving macroeconomic environment backed by low oil prices, stable currency, normal monsoon and attention to revive investment projects, the country is poised for sustained growth over the long term.
The group’s fund based business has performed well during the quarter. Our focus on asset quality and net interest margin provides a solid foundation to our growth in the fund based business. As the consumption demand for funding increases, we expect to increase our lending book consistently.
We have also enhanced our focus on wealth management business and value added services for our clients. We firmly believe that our skills to deliver differentiated and tailor made solutions to our clients gives us an edge and we continue to leverage on the same.
Technology has become a major enabler for growth in the financial services sector. We have taken some initiatives in the sector. We will also continue to leverage evolving opportunities in the technology-backed platforms.”
Speaking on the change at the helm of the Group, Mr. Kampani said
“I believe that it is important for all businesses to implement a proper succession plan and I am committed to follow the same. With this in mind, I have decided to retire from executive role with effect from September 30, 2016 when I turn 70.
While I will continue to remain an integral part of the Group, it will be in a purely non-executive position as the Chairman of the Group and as a director on the Board of Directors of a few companies.
Vishal will lead the Group strategy in his position as Managing Director of the holding company, JM Financial Limited. The Board will continue to remain actively engaged with the business as always with continued focus on value based and compliant business practices for calibrated growth. All the Business Unit leaders will continue to lead the business working closely with Vishal.
I would, at this juncture in my life, like to spend more time and efforts on socially relevant activities. And surely on the activities that I truly enjoy but never found time for. Accordingly, I
will continue to spearhead the CSR efforts of the Group and the activities of JM Financial Foundation.”
Business Update
Investment banking and securities business:
The Investment Banking business continues to grow with a robust deal pipeline and several mandated transactions under execution. Our approach is relationship driven and we continue to build on areas of competitive advantage and continue to add value to our clients with our advice.
During the quarter, our Investment banking team executed the following deals:
- BRLM for Initial Public Offer of Thyrocare Technologies Limited – Rs 479 crore.
- BRLM for Initial Public Offer of Parag Milk Foods Limited – Rs 750 crore.
- Lead Manager for Unsecured Subordinated Redeemable Non-convertible Debentures of Mahindra & Mahindra Financial Services Limited – Rs 1,000 crore.
- Sole financial advisor to Vertex Group Limited (UK), on the sale of Vertex Customer Management India Ltd, an Indian BPO Company, to Altruist Technologies Ltd, a telecom value added service company.
- Sole financial advisor to TransUnion LLC for increasing its stake in Credit Information Bureau India Limited (CIBIL).
Our Institutional Equities business saw increased client interaction during the quarter.
India continues to attract significant equity flows from both foreign and domestic investors and the Institutional Business is well geared for this opportunity. The business continues to focus on expanding research coverage and deepening client relationships across geographies. Our international offices in Mauritius, Singapore and USA have also helped us to establish new relationships with investors focused on the Indian equity markets.
Investment Advisory and Distribution business offers Wealth Management, Equity Brokerage and Distribution Services.
Wealth Management business offers wealth management services to High Net worth families, Ultra High Net worth families & corporate treasuries and follows model of asset allocation and
custody services. The AUM of our wealth management business stood at Rs. 23,755 crore (excluding custody assets) as on June 30, 2016.
Equity Brokerage business offers equity sales and trading services to High Net worth Individuals, Corporates and Retail clients. This group is supported by technical and fundamental research teams and derivative strategists who generate Investment and Trading Ideas. We have increased our presence to 259 locations spread across 114 cities through a network of branches and franchisees.
In the Distribution business, we have a large network of over 8,300 active Independent Financial Distributors (IFDs) who distribute various financial products across the country. During the quarter, we helped corporates mobilise approximately Rs.1,000 crore in fixed deposit schemes and fixed income products.
Fund based business:
The overall lending book stood at Rs. 7,334 crore as on June 30, 2016. Out of the said lending book, the real estate lending book stood at Rs.5,670 crore and the capital market and other lending book at Rs.1,664 crore. We continued our efforts of diversifying our sources and maturities for our borrowing profile. Our long term borrowing as a proportion of total borrowing stood at approximately 44 % on June 30, 2016. Our commercial real estate funding focus is on Tier - 1 cities, viz., Mumbai, Pune, Bangalore and Chennai. We plan to selectively enter into new geographies to expand our business.
In light of the prevailing stress in the economy, we have been extremely selective and continue to remain focused on the asset quality.
During the last quarter, the asset reconstruction business participated in several NPA auction processes, initiated discussions with banks and also conducted due diligence for acquiring non-performing assets. Bids were submitted for several accounts. No fresh acquisitions were made during the quarter Overall Industry activity was low owing to first quarter of the year
and Banks were awaiting extension of guidelines relating to treatment of loss on sale of assets to ARCs. Nevertheless, we sustained our focus on resolution and recovery of our acquired portfolio and majority of the recovery came from restructured accounts.
National Company Law tribunal (NCLT) & NCLAT have been set up for faster resolution of corporate disputes. NCLT and NCLAT will pave the way for faster implementation of the bankruptcy Law passed in May 2016 and is another positive step towards NPA resolution. The Reserve Bank of India also notified S4A Scheme (Scheme for Sustainable Structuring of Stressed Assets) which aims at financial restructuring of projects having a chance of sustained revival. The Reserve Bank of India also extended the time-frame to spread over the shortfall arising out of sale of bad assets to securitisation companies/ARCs at a price below the net book value to March 2017.
The above augurs well for the industry and shows the commitment of the regulator and Government towards resolving the stretched NPL position. We continue to focus on acquisition of new accounts with revival potential and with the objective of resolution of our acquired portfolio.
Alternative Asset Management:
At the end of the quarter, the combined AUM/AUA of our private equity and real estate funds stood at around Rs.751 crore.
Both the private equity and real estate funds continue to work closely with their portfolio companies to seek exit opportunities.
As on June 30, 2016, the private equity fund had returned an aggregate of 74.90 % of the capital contribution received from its Investors in Indian Rupee terms.
As on June 30, 2016, the domestic scheme of the Real Estate Fund had returned an aggregate of 54% of the capital contribution received by it and the offshore scheme returned 49% of its capital contribution in Indian Rupee terms.
Asset Management:
We offer a bouquet of 17 mutual fund schemes across the risk-return spectrum that caters to the specific needs of both institutional and non-institutional investors. Our risk and fund management framework allows us to effectively manage risk while generating high quartile returns across the product categories that we offer.
The average AUM of our Mutual Fund schemes during the quarter ended June 30, 2016 stood at Rs. 12,756 crore; comprising Rs. 6,253 crore in equity schemes Rs. 6,503 crore in debt schemes.
Awards and Recognitions:
JM Financial Institutional Securities Ltd has emerged as `QIP Dealmaker of the Year’ in the BW-PwC I-banking Survey 2016.
JM Financial Services Limited was recognized as the “Best performing National Financial Advisor- Institutional” at the ‘UTI MF and CNBC TV-18 Financial Advisor Awards 2015-16’.
JM Financial Services Limited was also recognised by National Stock Exchange, amongst the Top 10 performers in the Cash Segment for the year 2015-16.
In the Great Place To Work 2016 survey, JM Financial Asset Management Limited and JM Financial Services Limited featured among the Great Places to work in India.
While JM Financial Asset Management Limited was ranked among Top 100 in India's Best Companies To Work For 2016 category, JM Financial Services Limited was ranked as the best in the Investments Industry category.
-ends-
The unaudited financial results are attached. Both, the press release and unaudited financial results are available on our website www.jmfl.com
About JM Financial
JM Financial is an integrated financial services group offering a wide range of capital market services to its corporate and individual clients. The Group’s businesses include investment banking, institutional equity sales, trading, research and broking, private and corporate wealth management, equity broking, portfolio management, asset management, commodity broking, fixed income broking, non-banking finance products, private equity and asset reconstruction. For more information, log on to www.jmfl.com or contact:
Forward - Looking statements
This press release (‘document’) containing JM Financial Group’s activities, projections and expectations for the future, may contain certain forward-looking statements based upon the information currently available with the Company or any of its subsidiaries and associate companies. The financial results in future may vary from the forward-looking statements contained in this document due to uncertainties and unforeseen events that may impact the businesses of the JM Financial Group. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.
This document is for information purposes only and any action taken by any person on the basis of the information contained herein is that person’s responsibility alone and neither JM Financial Group nor any of their directors or employees will be liable in any manner for the consequences of such actions.