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Religare Enterprises Ltd.

BSE: 532915 Sector: Financials
NSE: RELIGARE ISIN Code: INE621H01010
BSE 14:44 | 23 May 25.50 0.10
(0.39%)
OPEN

26.55

HIGH

26.55

LOW

25.00

NSE 14:39 | 23 May 25.30 0.05
(0.20%)
OPEN

26.00

HIGH

26.00

LOW

24.20

OPEN 26.55
PREVIOUS CLOSE 25.40
VOLUME 7369
52-Week high 54.30
52-Week low 17.05
P/E
Mkt Cap.(Rs cr) 553
Buy Price 25.15
Buy Qty 20.00
Sell Price 25.45
Sell Qty 1.00
OPEN 26.55
CLOSE 25.40
VOLUME 7369
52-Week high 54.30
52-Week low 17.05
P/E
Mkt Cap.(Rs cr) 553
Buy Price 25.15
Buy Qty 20.00
Sell Price 25.45
Sell Qty 1.00

Religare Enterprises Ltd. (RELIGARE) - Chairman Speech

Company chairman speech

Dear Shareholders

I have the privilege of communicating with you after a gap of several years and I wantto take this opportunity to put the last few years in perspective. Since its inceptionthe promoters had intended Religare to be run by professional management under the overallinsight and guidance by the Board of Directors of the Company. Taking this further onApril 06 2010 both Shivinder and I stepped down from the Board entrusting oversight inaddition to management to a professional team without being involved in the management ordecision-making process of the Company to allow Religare to become what was envisioned asa "professionally managed professionally supervised" company. The concept wasahead of its time and we were willing to be patient for it to work as anticipated.However when Shivinder and I returned to the Board of Directors on July 29 2016 owing toconcerns we had about the performance of the Company we noted that the concerns anddisappointment were similarly echoed across the Board of Directors. In this backdrop Iwould have preferred a better set of circumstances to report on Religare's performance.

Nonetheless in last one year Religare has focussed on working towards its strategicpriorities. During the year Religare completed its exit from the India Asset Managementjoint venture; the Wealth Management business was divested as it fell outside Religare'score focus area; the exit from the Global Asset Management business was completed andconsequently Religare's exposure to markets outside India is now negligible. After thecompletion of FY17 Religare has entered into an agreement to divest its holdings in theHealth Insurance business subject to regulatory approvals and customary closingconditions. Health Insurance is a business that Religare has nurtured through the crucialformative phase leveraging the collective experience of the group but in the longer-terminterest of the business decided to hand it to a new set of owners who are best placed tosteer it through its next phase of growth. The transaction when complete will mark yetanother successful exit by Religare.

Complementing the sharper strategic focus Religare has embarked on a consolidation oflegal entities by initiating the process of merger of eleven subsidiaries into ReligareEnterprises Limited. The merger is expected to be completed during FY18 and will improvecapital allocation increase efficiencies and reduce costs.

The NBFC business operated by Religare Finvest Limited (RFL) resolutely faced thechallenges that came its way during the year. On the back of the deteriorating creditenvironment across sectors of the economy RFL experienced higher delinquenciesparticularly in certain large accounts against which it took an exceptional write-off ofnearly'519 crore net of tax. To preserve the strength of the RFL balance sheet additionalequity of '560 crore was infused into RFL during the year. However as a matter ofprudence RFL decided to conserve its capital and restricted fresh disbursements.Consequently the results were subdued:

RFL's overall book size as at March 31 2017 declined by nearly 24% year-on-year andstood at '13974 crore; revenue for the year at '2417 crore declined by 4% while PBTbefore exceptional items declined from '437 crore to '283 crore. There was some cheer inthe affordable housing finance segment though: RFL's subsidiary Religare HousingDevelopment Finance Corporation Limited added five branches to its network taking thetotal to 35 and on the back of disbursements of '438 crore took its loan book as atMarch 312017 to '1016 crore.

Religare Health Insurance Company Limited (RHICL) clocked Gross Written Premium of '726crore year-on-year growth of 44% and the business has achieved breakeven during theyear. Religare acknowledges the contribution of the RHICL team in bringing the business tothe stage where Religare can profitably exit and wishes them well in their journey aheadunder the new owners.

The Retail Broking business operated under Religare Securities Limited (RSL)continued to focus on better execution and improvement of profitability. While there was amarginal dip in aggregate revenues during the year for the Retail Broking businessaggregate PAT before exceptional items grew by nearly 35% to '31 crore during FY17.

On a consolidated basis reported revenue was '3841 crore a year-on-year decline of15% which was largely on account of absence of the Life Insurance and Asset Managementrevenues and also reflected the mixed performance in the continuing businesses. Reportednet loss increased from '48 crore to '174 crore: while divestments in the Asset Managementbusiness during the year yielded significant gains the provisions in the Lending businessweighed heavily on the final outcome.

As Religare continues on the path of consolidation it will have a smaller footprint inthe near term but will transform into a more agile business. I look forward to yourcontinued support through this journey.

With best wishes

Malvinder Mohan Singh