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Centrum Capital Ltd.

BSE: 501150 Sector: Financials
NSE: CENTRUM ISIN Code: INE660C01027
BSE 00:00 | 26 Mar 31.85 0.05
(0.16%)
OPEN

32.20

HIGH

32.25

LOW

31.70

NSE 00:00 | 26 Mar 31.85 -0.05
(-0.16%)
OPEN

31.95

HIGH

32.05

LOW

31.55

OPEN 32.20
PREVIOUS CLOSE 31.80
VOLUME 66553
52-Week high 68.00
52-Week low 28.50
P/E
Mkt Cap.(Rs cr) 1,325
Buy Price 31.80
Buy Qty 1271.00
Sell Price 31.85
Sell Qty 210.00
OPEN 32.20
CLOSE 31.80
VOLUME 66553
52-Week high 68.00
52-Week low 28.50
P/E
Mkt Cap.(Rs cr) 1,325
Buy Price 31.80
Buy Qty 1271.00
Sell Price 31.85
Sell Qty 210.00

Centrum Capital Ltd. (CENTRUM) - Chairman Speech

Company chairman speech

Dear Shareholders

Starting out as merchant bankers from a small office in South Mumbai in 1996 Centrumtoday is a well respected and fast growing diversified financial services Group offeringvaried services to institutional and retail clients. All of this has been possible throughthe efforts of all Stakeholders our Team Clients Shareholders Regulators Bankers andBoard of Directors.

FY2018 was a year of action and growth driven by superior execution across allbusiness verticals new technology initiatives geographic expansion acquisitions andstrengthening of our talent pool across levels. The Indian economy is growing rapidly andoffers many opportunities to not only grow our existing businesses but also venture in tonew areas. This combined with our appetite to grow expertise ideas and strongrelationships with key stakeholders will take us further on our growth trajectory. Whilewe continued to grow our core businesses of Investment Banking Wealth Management andStock Broking we successfully strengthened the newer verticals of Lending Insurance andAsset Management. This reinforces our long-term vision of building a robust fee-basedbusiness along with a scalable lending platform. Our goal for FY2019 is to focus on newideas to serve clients better leverage our strengths and grow in a sustained manner.

The Indian economy grew by 7.2% in FY2018 and is one of the fastest growing economiesin the world. The country witnessed the roll out of one of the biggest tax reforms - Goodsand Service Tax (GST). The RBI and the Government are focusing on improving the lendingscenario to boost India's overall credit growth. The Indian equity markets during FY2018posted a return of ~11%. The mid-and-small-cap companies outperformed their larger peersas witnessed by a ~13% increase in the S&P BSE Mid-Cap index and an increase of ~19%in the BSE Small cap index. During the year the Mutual Fund industry had QuarterlyAverage Assets Under Management (QAAUM) amounting to Rs 23.05 lakh crore indicating anover 7-fold increase in a span of 11 years. Given the significant increased interest inequity markets we can assume that equity investments from domestic investors alone arelikely to touch about Rs 2 lakh crores in the current fiscal. This may get a further boostwith the upcoming IPOs as well as the expected public sector divestments by theGovernment. Overall there was robust macro-economic growth during FY2018 and it has alsoled India to remain in a sweet spot for the next year.

On a standalone basis Centrum Capital's Net Profit for FY2018 increased 69% to Rs.633.2 million. At a consolidated level the Group's EBITDA increased 65% to Rs. 1279.7million and the net profit stood at Rs 318.5 million. I am happy to share that effectiveApril 4 2018 our share also listed on the National Stock Exchange. Being listed on bothBSE and NSE brings greater trading volumes.

The year also saw our first acquisition in FirstRand Bank (FRB) India's Micro financeportfolio. This marked our entry in the fast growing micro finance space where we providebusiness loans to the under-served sections of society under the joint liability model. Wewelcomed the 300 strong team of FRB to the Centrum family. They will play a key role inscaling up this business. A number of senior executives joined our team to lead differentverticals during the year. We grew our equity research and wealth advisory teams to offermore investment products to clients. Our lending verticals added services such as realestate and supply chain finance.

In April 2018 we divested our full stake in our Money Exchange business –CentrumDirect Limited. (CDL) to Atlanta based NASDAQ listed Ebix group. CDL is a leaderin currency exchange overseas remittances prepaid travel cards and travelers cheques.The business had seen sustained growth and constantly innovated to meet changing customerneeds. However consolidation and margin pressures were expected to be major disruptors inthis business. With more customers opting for technology enabled platforms EBIX Inc. hadthe right technological capabilities a global footprint and a large resource base tomake an ideal home for CDL. The sale proceeds will provide us with a significant resourcebase to strengthen our core businesses scale up our lending businesses by offering moreproducts and entering new markets along with identifying strategic organic and inorganicgrowth opportunities.

The Wealth Management business had a successful year both in terms of AUM and clientgrowth. AUM grew by 50% y-o-y and the business has expanded its footprint overseas toSouth-East Asia to tap in to the significantly large HNI base there. The business is alsoin the process of forming alliances with banks to offer their HNI clients professionalwealth management and family office services. Our alliance with Lakshmi Vilas Bank onsimilar lines has enabled us to reach out to and offer our services to a large number ofthe Bank's clients. We are very bullish on this business and believe it will be one of ourlargest revenue contributors.

The Institutional Securities business grew by empaneling new franchisees andstrengthening its sales and research teams. Taking advantage of the bullishsentimentintheprimarymarkets our Broking and Investment Banking teams have successfullyadvised multiple transactions during the year. Our research analysts are constantlystudying the markets and identifying investment opportunities. I am happy to share thatour analysts received multiple awards for their excellent research during the year. Due toan overwhelming response from investors and corporates in 2016 our flagship investorconference – Centrum Corporate Connect was extended to a 2-day event in 2017 withover 130 corporates participating in engaging discussions with investors.

Our dedicated debt team has been quite active in the stressed asset resolution area byassisting a number of corporates through CDR OTS JLF and Bilateral restructuring etc.Our Infrastructure Advisory arm too had a successful year and played an instrumental rolein advising several corporate debt restructuring transactions.

During the year our lending businesses of Housing Finance SME and Micro Financewitnessed steady growth. In a short span of one year we built a sizeable lending book andare expanding rapidly across the country. Our Housing Finance business is now present in 5states. Financial Inclusion is a key agenda for the Group and through our lendingbusinesses we are constantly looking to provide finance to the under-served sections ofsociety.

Our Insurance business which was a composite corporate agent received a DirectInsurance Broking license in August 2017. With this license we now offer products fromall general health and life insurance companies in India. This has enabled us to reachout to a larger client base by offering them insurance solutions that cater to theirindividual needs.

As a Group we are always looking to innovate and offer diverse services and investmentoptions to our customers. We started our Asset Management business in early 2017 with thelaunch of our maiden Private Equity Fund – Kalpavriksh. The fund invests in consumermid-sized un-listed companies with a growth potential in Fintech Education Tech andHealthcare. In November 2017 we also launched a new vertical – Centrum Real EstateManagement and Advisory (CREMA) which strategically partners with Developers to providecomprehensive services such as sales & marketing support financing and also worksclosely with Channel Partners and Clients to ensure on time delivery of apartments andlegal support.

Last year we introduced a number of digital initiatives to offer our clients theconvenience of transacting from the comfort of their homes. We launched Centrum Pay –a one stop digital payment solution through which clients could use their mobile phonesto pay utility bills buy flight and movie tickets amongst other services. We alsolaunched a dedicated online forex portal – www.centrumforex. com for clients to buyand sell foreign currencies prepaid travel cards and travelers cheques online. In thecoming year we will further increase our thrust on digital initiatives to offerinnovative and user friendly services. A few projects that we are working on include anonline and application based trading platform for equities and mutual funds a wealthmanagement portal which will focus on goal based investments and an insurance portal topurchase policies online.

The Group currently has a balanced mix of advisory and lending services which enablesus to cross sell multiple services to a single customer. The economy too is offering usmultiple growth opportunities through favorable policy initiatives such as RERA BankingRegulation Bill and GST.

We are constantly on the lookout for new business opportunities and ways to grow ourexisting services through both organic and in-organic routes. We have ambitious plans foreach of our businesses and I am optimistic that with our collective efforts we willachieve all our goals.

I would like to end by expressing my gratitude to all our clients our teamsinvestors bankers regulators and shareholders – for the trust they have reposed inus. My special thanks also go to our Board members for their guidance. We look forward toyour continued support in our growth trajectory as we create long term value for all ourstakeholders.

Yours sincerely

Jaspal Singh Bindra

Executive Chairman