IIFL Finance March Quarter profit plunges 81% to Rs 59 crore

The company, which is mainly engaged in financing and investment business, had logged a profit of Rs 305.89 crore in January-March, 2018-19.

IIFL Finance on Friday reported 81 percent plunge in March quarter consolidated net profit at Rs 58.91 crore due to provisions related to COVID-19.

The company, which is mainly engaged in financing and investment business, had logged a profit of Rs 305.89 crore in January-March, 2018-19.

Income during March quarter, 2019-20 was down at Rs 1,322.64 crore from Rs 1,441.34 crore in the year-ago period, IIFL Finance said in a regulatory filing.

In 2019-20, the net profit was down by 37 percent to Rs 503.47 crore, while the income fell by 5.2 percent to Rs 4,820.73 crore.

On standalone basis, the net profit during January-March last fiscal dipped by 92 percent to Rs 16.67 crore from Rs 196.27 crore in year-ago same period.

Income in the quarter fell to Rs 782.13 crore from Rs 848.21 crore in the same period of the preceding fiscal.

In 2019-20, the standalone net profit fell by 67 percent to Rs 148.80 crore as against Rs 451.02 crore in the previous year. Income too was down at Rs 2,629.88 crore from Rs 2,962.59 crore.

The company's board at its meeting held on May 28 approved raising up to Rs 10,000 crore by issuing bonds on a private placement basis. Besides, it cleared a proposal to raise Rs 5,000 crore by issuing bonds (non convertible debentures) to the public in one or more tranches.

For 2019-20, the company has declared and paid an interim dividend of Rs 2.25 per equity share. The same is considered as final, it said in the filing.

IIFL Finance said it has opted for the lower tax rate of 22 percent (plus surcharge and cess).

These financial results are prepared on the basis that the company would avail the option to pay income tax at the lower rate, it said.

" Consequently, the opening deferred tax asset (net) has been measured at the lower rate, with a one-time charge of Rs 86.54 crore to the statement of Profit & Loss during the quarter ended September 30, 2019 and the same has been restated during the quarter ended March 31, 2020 resulting into a gain of Rs 49.38 crore pursuant to the merger of India Infoline Finance with the company on March 30, 2020 with appointed date as April 1, 2018," it added.

The company said it has separately incorporated  estimates, assumptions and judgments specific to the impact of the COVID-19 pandemic based on early indicators of moratorium and delayed payments metrics observed along with an estimation of potential stress on probability of defaults and exposure at default.

"Accordingly, the company has measured additional impairment loss allowance on loans and other assets and recognised the incremental impairment provision for Rs 217.12 crore in the standalone financial results which is adequate in the view of the company considering the current information available," it said.

In addition, while assessing the liquidity situation, the company has taken into consideration certain assumptions with respect to repayments of loan assets, sale of loan assets and undrawn committed lines of credit, based on its past experience which have been adjusted for current events, it added.

The company's impairment loss allowance estimates are inherently uncertain due to severity and duration of the pandemic and, as a result, actual results may differ from these estimates as on the date of approval of these standalone financial results.

The company will continue to monitor any material changes to the future economic conditions.

IIFL Finance stock was trading 1.56 percent down at Rs 62.95 on BSE.

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