IIFL to launch AMC in second-half of the year

Broking firm India Infoline reported marginal decline in net reports at Rs 46 crore for quarter-ended March 2011, compared to Rs 52.2 crore for the same period last year. The income from operations rose to Rs 367.4 crore against Rs 309.5 crore, year-on-year.

Speaking to CNBC-TV18, executive director R Venkataraman said the company registered significant growth in financing income. "Higher interest costs have impacted net income margins this time around," he said.

Venkataraman said the board has given an in-principle approval for setting up an asset management company. "The AMC will be up and running in the second-half of 2011," he said.

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: What are your net interest margins like for this quarter? What is your outlook on your numbers?

A: For the quarter that went by, we have seen a significant growth in the financing income. The financing income has also been impacted by increase in the net interest cost.

For the quarter, the interest cost has increase significantly. Therefore, there has been some impact on the net interest margins for this quarter.

We have seen overall tightening in the monetary policy. The RBI governor last week increased a rise by about 50 basis points. We would see further tightening on the interest cost going ahead.

Q: Can you give us a break- now of your revenues and profits for your various divisions?

A: Our income for the full year on a consolidated basis year-on-year (YoY) has increased about 31% to 14.73 billion. Earnings before interest tax depreciation and amortisation (EBITDA), has increased by 38.7% to about 6 billion. The profit before tax has fallen by 11% to 3.1 billion because of an increase in interest cost.

On the line by line item for income, we have seen marginal decline in equities, broking and related income to about 6.6 billion. Financing investment income has increased to about 6.1 billion by 111%.

The marketing income has gone up about 42%. We have seen net increase of about 31% YoY. The financing and interest income has increased significantly in this year.

Q: You have received approval to start your mutual fund operations. Could you share the timeline with us?

A: We have got the in-principle approval for launching AMC. At this moment, we are still designing different products and will be applying to the regulator for formal launch. As and when we get it, we will launch it. We should be active towards the second half of this year.