• Consolidated PAT Growth: 35% year-over-year to INR210 crore.

• Ex-Insurance PAT: INR163 crore for the quarter.

• Customer Assets: INR2.23 trillion, 12% year-over-year growth.

• Alternate Asset Management AUM Growth: 20% growth in ARR AUM.

• Mutual Fund Equity AUM Growth: 60% CAGR.

• Insurance Business Investment: INR3,700 crore cumulative capital invested.

• Credit Business Equity: INR7,500 crore with a 5% collective ROE.

• Corporate Debt: Reduced to INR5,500 crore, targeting below INR3,000 crore in 18 months.

• ERC Recoveries: INR2,800 crore in the first half of the year.

• Zuno Insurance Growth: 27% growth compared to industry growth of 8-9%.

• Life Insurance APE: INR130 crore for the quarter.

• Life Insurance AUM: INR8,700 crore.

• Persistency Rate: 78%.

• Claim Settlement Rate: 98.8%.

• Warning! GuruFocus has detected 1 Warning Sign with BOM:532922.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Edelweiss Financial Services Ltd (BOM:532922) reported a 35% year-over-year growth in consolidated PAT, reaching INR210 crore.

• The company's customer base has expanded to over 9 million, with total customer assets growing by 12% year-over-year to INR2.23 trillion.

• The asset management segment, particularly the EAAA, showed strong performance with a 20% growth in ARR AUM and a 70% growth in PAT CAGR over four years.

• The company is actively working on reducing corporate debt, with plans to bring it down from INR5,500 crore to below INR3,000 crore in the next 18 months.

• Edelweiss Financial Services Ltd (BOM:532922) is exploring strategic options for value unlock through stake sales or IPOs in its asset management and mutual fund businesses within the next 18 months.

Negative Points

• The Indian economy experienced a slowdown in Q2, impacting overall market conditions.

• The insurance businesses are still incurring losses, with breakeven expected only by FY27.

• The credit businesses are achieving only about 5% collective ROE, indicating a need for improvement in capital allocation and efficiency.

• The ARC business is facing restrictions from the RBI, preventing the acquisition of new assets, which could limit growth opportunities.

• The wholesale book in the NBFC segment has been reduced by 34%, indicating a strategic shift but also reflecting challenges in maintaining growth in this area.

Q & A Highlights

Q: Are the proceeds from the Nuvama stake sale being used for debt repayment, and can we expect a decline in debt in Q3? A: Yes, the remaining stake sale is earmarked for debt reduction, whether it happens in Q3 or Q4.