ICICI Direct: Edelweiss Financial’s Continuous Divestment in Key Subsidiaries Continues

ICICI Direct Report

Edelweiss Financial Services Ltd. reported a weak set of Q1 FY21 numbers wherein the company reported a consolidated loss of Rs 264 crore mainly due to impairment of Rs 145 crore and muted performance in credit and insurance business.

In credit business, the wholesale lending book de-grew 18% QoQ to Rs 10953 crore. Advances de-growth led to dip in net revenue by 92% QoQ to Rs 95 crore.

Muted topline and higher provisions led to a loss worth Rs 156 crore.

In retail credit (approximately 55% of overall loan book), Edelweiss Housing Finance Ltd. growth was stable with loan book at Rs 4490 crore, up 3.8% QoQ.

Edelweiss Retail Finance Ltd. loan growth came at Rs 1312 crore, down 5% QoQ.

Amid Covid-19 Asset Reconstruction Company Ltd. business reported healthy asset under management (AUM) growth of 53.5% QoQ at Rs 66300 crore and recoveries at Rs 470 crore.

For Asset management company business, AUM was at Rs 29400 crore with gross revenue at Rs 25 crore (yield at 0.08%).

Higher operating costs marred Edelweiss Asset Management Ltd.’s profit after tax growth and led it to come in at Rs 2 crore.

The company plans to grow its equity AUM to approximately Rs 10000 crore within the next 12-18 months.

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