Geojit BNP Paribas Registers Sees Tripled Profits In Q3FY13

Kochi-based leading retail stock broking firm, Geojit BNP Paribas Financial Services, came out with its Q3FY13 results on Jan 12, 2013. Following the declaration, the company’s share price has increased by almost 5% and it is trading very close to its 52-week high of Rs 28.75.

For the quarter ended Dec 2012, the company posted a consolidated income of Rs 67.75 crore, up by 15% on a yearly basis. However, the real improvement was visible in its bottomline, which has jumped by three times in the same period. The net profit posted for the quarter was Rs 13 crore as against Rs 4.3 crore posted in the same quarter last year. In this regard, C. J. George, Managing Director of Geojit BNP Paribas, commented, “Improvement in the market conditions and efficient cost management helped the company to report better results for the quarter”.

At the operating level, the company was able to bring down its total expenses as a percentage of the total income from 95% at the end of Q3FY13 to 74.5% in the previous quarter. Its finance cost has also gone down by two-fifth on a yearly basis. All this helped it to post better-than-expected numbers.

Currently, the company’s shares are trading at Rs 27 apiece, discounting its annualised 9MFY13 earnings by 7.2x. Nonetheless, if we exclude the exceptional income to the tune of Rs 36 crore received during the second quarter on account of the sale of its stake in the JV with BNP Paribas for Institutional Broking, the annualised earnings drop to Rs 2.05 per share. The adjusted PE ratio comes out to be 13x, which is in line with that of other listed players like IIFL. Therefore, we do not recommend entering the stock at the current price.