IIFL Capital Services Limited , a prominent player in the Indian financial services sector, has reported a robust performance for the first quarter, with significant growth in revenue and strategic expansion in its wealth management division.

Financial Highlights

The company's consolidated revenue stood at Rs. 680.00 crores, marking a substantial 19% increase quarter-on-quarter (QoQ) and a 6% year-on-year (YoY) growth. This performance was driven by strong results across various business segments:

• Institutional and investment banking revenue nearly doubled from the previous quarter.
• Retail brokerage increased by 15% QoQ, despite a 28% YoY decline due to regulatory changes implemented in December.
• Distribution income rose impressively by 37% YoY to Rs. 145.00 crores.
• Other income surged to Rs. 63.00 crores from Rs. 4.00 crores in the previous year, primarily due to mark-to-market gains on BSE shares.

The company's profit after tax (PAT) reached Rs. 176.00 crores, representing a significant 37% increase QoQ, although it was down 4% YoY.

Strategic Shift towards Wealth Management

IIFL Capital Services is actively transforming its retail broking segment into a comprehensive wealth management and financial planning practice. As part of this strategic shift, the company has:

• Added approximately 50 relationship managers (RMs) to its wealth management team.
• Focused on targeting clients with net worth in the ranges of Rs. 5-25 crores and above Rs. 25 crores.
• Increased employee costs by 36% YoY to Rs. 176.00 crores, reflecting the expansion in headcount and recruitment of wealth management professionals.

Market Share and Trading Volumes

Despite regulatory changes affecting expiry dates in the derivatives market, IIFL Capital Services has maintained its market position:

The average daily turnover was Rs. 2,23,232.00 crores, with derivatives accounting for Rs. 2,20,263.00 crores and cash segment at Rs. 2,968.00 crores.

Management Commentary

R. Venkataraman, Managing Director of IIFL Capital Services, commented on the results during the earnings call: "We believe that we are well-placed to succeed in this transformation given the fact that we have a suitable networth, we have a pan-India distribution reach, a critical mass of customers, technology as well as research credentials."

He also highlighted the company's approach to wealth management, stating, "We have to segment our customers because we have a large base of customers with less than 1 crore network and the segment which we are targeting will be say maybe in the 5 to 25, greater than 25 crores."

Future Outlook

While the company refrains from providing specific guidance, management expressed optimism about the deal pipeline in investment banking for the full year, despite potential short-term volatility. The focus on growing the distribution AUM, which stood at Rs. 35,700.00 crores this quarter, remains a key priority for IIFL Capital Services.

As the company continues its strategic transformation, investors and market watchers will be keenly observing the progress of its wealth management initiative and its impact on overall financial performance in the coming quarters.

IIFL Capital Services Limited (formerly IIFL Securities Limited) has announced robust financial results for the first quarter, alongside ambitious growth targets and strategic initiatives aimed at strengthening its market position.

Strong Financial Performance

For the quarter ended June 30, IIFL Capital reported a consolidated revenue of ₹680.40 crore, marking a significant 19% increase quarter-on-quarter. The company's profit after tax stood at ₹175.50 crore, up by an impressive 37% compared to the previous quarter. This strong performance underscores IIFL Capital's resilience and growth trajectory in the dynamic financial services sector.

Key Financial Highlights

Strategic Growth Targets

IIFL Capital has set ambitious growth targets, aiming to achieve:

• A 25% return on equity
• ₹244,000.00 crore in assets under management

These targets reflect the company's confidence in its business model and growth strategies.

Business Segment Performance

The company's institutional broking segment witnessed strong transaction activity for block deals, while the investment banking division continued to secure new mandates. IIFL Capital completed 13 deals across capital markets and private placement/advisory during the quarter.

Strategic Shift and Synergy Focus

R. Venkataraman, Managing Director of IIFL Capital, highlighted the company's strategic direction: "Our long-term strategy is to transform our legacy retail broking business to a wealth management practice, and we are seeing good progress towards the same." This shift aligns with the company's focus on leveraging synergies across its wealth management, equities, and distribution segments.

Corporate Governance and Board Appointments

In a move to strengthen its governance structure, IIFL Capital announced the re-appointment of two Non-Executive Independent Directors:

1. Mr. Anand Shailesh Bathiya for a second term of five years, effective September 22
2. Mr. Viswanathan Krishnan for a second term of five years, effective January 21

These re-appointments are subject to shareholder approval and regulatory clearances.

Business Restructuring

IIFL Capital also disclosed plans to transfer its Portfolio Management Services (PMS) business to IIFL Capital Asset Management Limited, a wholly-owned subsidiary. This move is part of a broader strategy to align business verticals, enhance operational efficiency, and simplify regulatory structures.

Outlook

With its strong Q1 performance, ambitious growth targets, and strategic initiatives, IIFL Capital is well-positioned to capitalize on opportunities in the financial services sector. The company's focus on transforming its retail broking business into a wealth management practice, coupled with its strong institutional broking and investment banking capabilities, sets a solid foundation for future growth.

As IIFL Capital continues to evolve and adapt to market dynamics, investors and stakeholders will be watching closely to see how these strategies unfold in the coming quarters.