Edelweiss Financial dips 7% on disappointing Q1 results

The stock dipped 7% to Rs 303 on the BSE in intra-day trade after the company reported a lower-than-expected 31% YoY growth in consolidated net profit at Rs 2.64 billion in June quarter.

Edelweiss Financial Services dipped 7% to Rs 303 on the BSE in intra-day trade after the company reported a lower-than-expected 31% year on year (YoY) growth in consolidated net profit at Rs 2.64 billion in June quarter (Q1FY19).

The company’s insurance business reported a net loss of Rs 460 million during the quarter against loss of Rs 240 million in year ago quarter. Excluding insurance, net profit grew 37% on YoY basis.

The company’s Balance Sheet Management Unit (BMU), Corp & other segment reported a net loss of Rs 140 million against net profit of Rs 370 million in previous year quarter. The BMU had challenging quarter due to markdowns in G-Secs portfolio, the company said in a statement.

The company’s net interest income (NII) increased by 14% at Rs 13.25 billion against Rs 11.60 billion in the corresponding quarter of previous fiscal.

The brokerage firm Emkay Global Financial Services expected net profit of Rs 2.71 billion on NII of Rs 15.22 billion for the quarter.

The reported asset quality indicators deteriorated marginally with gross non-performing assets (NPA) at 1.75% of overall advances in Q1FY19, as compared to 1.71% as on Q1FY18 and net NPAs at 0.74% against 0.61% in previous year quarter. Gross NPA and net NPA stood at 1.75% and 0.70%, respectively, as of FY18.

During the calendar year 2017, shares of Edelweiss Financial Services had outperformed the market by surging 205% as compared to 28% rise in the S&P BSE Sensex.

Thus far in the current calendar year 2018, the stock has underperforming the market by gaining 2% against 11% rise in the benchmark index.

At 10:40 am; the stock was trading 5% lower at Rs 312 on the BSE, as compared to 0.2% rise in the Sensex. The trading volumes on the counter nearly doubled with a combined 2.48 million equity shares changed hands on the BSE and NSE so far.