Edelweiss Financial slumps on recording loss of Rs 69 cr in Q3 FY21

Edelweiss Financial Services tumbled 4.22% to 68.05 after the company reported a consolidated net loss of Rs 69.72 crore in Q3 FY21 compared with net profit of Rs 16.71 crore in Q3 FY20.

Total income during the quarter declined by 17.3% year-on-year (YoY) to Rs 2191.34 crore. The NBFC's operation profit dropped by 91.9% to Rs 26.18 crore in the third quarter from Rs 321.46 crore in the same period last year.

Provisions and write-offs declined 51.9% to Rs 105.96 crore in Q3 December 2020 from Rs 220.48 crore in Q3 December 2019.

The company recorded a pre-tax loss of Rs 135.17 crore in Q3 FY21 as against a pre-tax profit of Rs 51.50 crore in Q3 FY20. It wrote back current taxes aggregating to Rs 45.85 crore in the December 2020 quarter.

The company said its fee income during the quarter at Rs 477 crore was back to the pre-Covid level and there is strong traction across wealth management, asset management and ARC (asset reconstruction company). Customer assets rose 17% YoY to Rs 2.65 lakh crore in the third quarter.

"We had a calibrated approach on the book growth in our NBFCs which led to lower revenue from credit. All our other businesses continue to do well," Edelweiss said.

Edelweiss said it recorded robust recoveries of Rs 2,200 crore in Q3FY21 in the asset reconstruction, even with IBC suspension.

Rashesh Shah, Chairman and CEO, Edelweiss Financial Services, said: FY21 has been a year of re-set. Throughout the year, including in Q3, we have focused on fortifying each of our businesses with growth capital, ring-fenced governance structures and operational independence. Our balance sheet is strong with robust equity, lower debt and ample liquidity. Capital adequacy in all entities is at high levels. We are focusing on getting future ready for FY 22 and beyond.

Edelweiss Group operates ten entities across NBFC, housing finance, wealth management, asset management, asset reconstruction, life insurance, general insurance and insurance broking.

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