Edelweiss Capital – Result analysis

It was slowdown in the entire Indian stock broking industry. Edelweiss Capitals‘ volumes were down 26% QoQ, slightly higher than the industry (-17% QoQ). Higher decline in revenues (-38% QoQ) was due to: a) higher derivatives proportion (an industry trend), and b) sharper decline in investment banking revenues (-75% QoQ).

Operating costs (after adjusting for treatment of STT) have declined 55% QoQ. This is significantly higher than the drop in volumes. The company reported a net profit of Rs 63.8 cr a 22.7% decline QoQ and 24.3% below consensus estimates on the street. For the full year, Edelweiss is espected to report EPS of Rs 42.13.