Geojit Fin Services Q1 net down 22% on higher marketing cost

Geojit Financial Services today reported a 22 per cent decline in consolidated net profit at Rs 12.7 crore for the June quarter on higher staff expenses and marketing cost coupled with poor stock market activities.

The Kochi-based company had posted a net profit of Rs 16.22 crore in the year-ago period.

The firm, which has completed a year of independent operations after ending its decades of association with the French financial powerhouse BNP Paribas, reported a 4 per cent decline in consolidated revenue at Rs 81.2 crore during the quarter, as its income from the flagship brokerage vertical show lower volume as the stock market remained tepid.

CJ George, founder and managing director, Geojit Financial Services, attributed the poor set of numbers to the decline in stock market activity during the quarter along with higher marketing expenses and hiring in the sales division.

"The decline in stock market activity during the quarter has resulted in a marginal 4 per cent fall in revenue compared to last year. This, along with increased recruitment of sales people and a rise in marketing expenditure, mainly led to a decline in the bottomline to the tune of 22 per cent," said George.

During the quarter, the company's assets under custody and management stood at Rs 37,600 crore, and it added 18,540 new clients.

Geojit, which has the big bull Rakesh Jhunjhunwala and BNP Paribas as key investors, is one of the oldest investment services companies in the country, with a strong presence in the Gulf, serving around 9.5 lakh clients through 515 offices.

It has offices in Saudi Arabia, the UAE, Kuwait and Oman. That apart it is also present in Bahrain through a business partnership with the Bank of Bahrain & Kuwait.

The firm's stock ended 5 per cent lower at Rs 80 apiece on the BSE today, against 0.95 per cent decline in the benchmark.