Brokerage disappoints Edelweiss, net dips 60% to Rs 26 cr

Mumbai: Investments in new businesses aprat from low income in brokerage business dented Edelweiss Financial Services net profit by 60 percent to Rs 26.32 crore for the second quarter as its results posted today showed.

The company had posted a net profit of Rs 66.10 crore during the July-September period of the last fiscal.

Total income rose marginally by 2.45 percent to Rs 385.32 crore compared to Rs 376.14 crore in the corresponding period last year.[caption id="attachment_110778" align="alignleft" width="380" caption="Edelweiss takes a dip in profits. Image courtesy Edelweiss"][/caption]

"The bottomline was affected due to a significant slow down in the capital markets, investments made in incubating new Businesses--life insurance and retail business, depreciation in our office property. Collective impact of these at PAT level is about Rs 12 crore," said Edelweiss Group chief operating officer Himanshu Kaji.

On segment basis, the company registered a revenue of Rs 276 crore from interest and treasury income, accounting for 73 percent of the total income. Similarly, agency fee and commissions, which include broking, investment banking, asset management and distribution business, stood at Rs 105 crore during this quarter.

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Referring to the drop in agency income, Kaji said, "Due to difficult economic environment, there is a drop in capital markets activity which in turn affects the fee based income of the company. However, we are hopeful that situation will improve in the next two to three quarters on the capital

markets front."

He further said the company's new ventures like life insurance and housing finance are in an expansion mode.

Edelweiss Group is into life insurance, housing finance, asset management, credit and capital markets including investment banking and brokerage services, and is present in 146 cities.

PTI