India Infoline’s Q2 profit rises 11% to Rs 14 cr

MUMBAI: India Infoline’s consolidated profit after tax for the second quarter ended September has risen 11% to Rs 14 crore while consolidated revenues have grown 59% to Rs 79.5 crore. On a stand-alone basis, the net profit has grown 51% to Rs 9.88 crore while revenues have climbed 63% to Rs 18.47 crore.

Of the total income from operations for the company, equities brokerage and related income — which forms the biggest chunk — are up by around 48%. The commodities brokerage and life insurance commission has more than tripled. While the online and other media income have doubled, revenues from distribution of mutual funds have almost halved.

During the quarter, the company has added 168 branches. Thus, in the first half of the current financial year, the company has set up 229 new branches, and in the process has more than doubled the number of existing branches. In addition, there are 142 branches in the pipeline.

Which means that the total expenditure for the company has more than doubled to Rs 225 crore, bringing down the operational margin. The EBIDTA margin which was 42.3% in Q2 FY06 has fallen to 31.8% in Q2 FY07.

Nirmal Jain, chairman and managing director, India Infoline, said, “The increased outlay in terms of manpower and establishment costs in the current quarter has affected our margins. The full benefits of this investment will be realised over the next 12-18 months. Our strategy is based on the premise that notwithstanding short-term ups and downs, the long-term growth potential for financial services in India justifies this investment.”

Once a majority of these branches stabilise, India Infoline expects its margins to bounce back to historical average. While declaring its guidance, the company has said it expects to generate — on a consolidated basis — revenues in the range of Rs 380-425 crore (up 74-95%) and PAT in the range of Rs 75-80 crore (up 52-62%) in FY07.