Reliance Capital’s Q4 profit flat at Rs267 crore
It saw higher revenue from lending to companies, and general insurance and commercial finance businesses
Mumbai: Reliance Capital Ltd, the non-banking financial company owned by billionaire Anil Ambani, on Friday reported a marginal increase in net profit in the quarter ended March.
Profit rose 1% to ₹ 267 crore in the three months from ₹ 265 crore in the year ago, the company said, reporting higher revenue from lending to companies, and the general insurance and commercial finance businesses.
Adjusted for a ₹ 75 crore profit from the life insurance business in the year ago, the profit rose 41% from ₹ 190 crore, it said.
“Till last year we used to account for the life insurance profit only in the fourth quarter, but this year we account for it in two tranches on a half-yearly basis; hence, last year’s profit has to be adjusted," a company spokesperson said.
Revenue increased to ₹ 1,788 crore from ₹ 1,666 crore. The firm also reported a ₹ 2 crore loss on “sale/merger of subsidiaries" in the quarter versus a ₹ 40 crore profit in the year-ago period. It did not give details of the loss.
Revenue from lending to companies increased to ₹ 390 crore from ₹ 335 crore while revenue from general insurance increased to ₹ 680 crore from ₹ 594 crore, according to results released on the stock exchanges.
Sam Ghosh, chief executive officer at Reliance Capital, said profit growth was driven by the company’s asset management, commercial finance and general insurance businesses.
“We are seeing good business on the debt side in the asset management and even in commercial lending through which we lend to mainly to small and medium enterprises (SMEs)," Ghosh said.
The company’s yield on advances improved to 15.5% in 2014 from 14.20% in 2013, resulting in the improvement in net interest margin (NIM) to 5.5% from 4.5% in 2013. NIM is the difference between interest earned from loans and that paid on funds.
Ghosh expects the company to maintain NIM at the current level even in this fiscal. The company is in talks with “two-three" foreign companies to sell a 26% stake in the general insurance company.
“We are awaiting for the election results to conclude the deal," Ghosh said.
Reliance Capital shares dropped 1.69% to close at ₹ 349.15 per share on Friday on BSE while the benchmark S&P BSE Sensex lost 0.06% to close at 22,403.89 points. The results were announced after market hours.
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