10 Year highlights
- Dividend per share has seen a jump in last 3 years from 1.50 to 2.30 for current year, started with and remained constant at 1 rs from 2003-07. CAGR 10%
- Balance sheet size has grown from 3575 to 60979 crore - CAGR of 35%
- Loans - 2695 cr to 48,888 crores - CAGR 38%
- Share holders fund - 1553 cr to 12285 cr - CAGR 12,285 - CAGR 26%
- Borrowings - 2175 cr to 46435 crore - CAGR 41%
- Total income - 459 to 635 cr - CAGR 34%
- PAT - 180 to 1545 cr - 27%
- EPS - 1.80 to 10.20 - CAGR 21%
- Book value 16 to 81 - CAGR 20%
Business Highlight's from Chariman Deepak S Parekh (Same as IDFC)
- As IDFC completes its 15th year, our footprint extends across all major infrastructure sectors. We have funded a fifth of the National Highways being constructed with private participation. Our contribution has helped create more than half of our country’s telecom towers and two-thirds of the wireless subscriber base.
- We have financed more than half of the container cargo capacity addition at Indian ports, and the airports aided by us handle over a fourth of India’s passenger and cargo traffic.
- We have also helped create more than half of India’s private sector thermal and large hydro-generation capacity. Last but not the least, we have the largest renewable portfolio in the country.
Issues with Power Sector
- Notwithstanding the huge increase in capacity addition last year, the power sector is facing a growing crisis of supply arising from domestic fuel availability constraints and the mounting financial losses of the distribution companies (discoms). The present impediments have resulted in about 20 GW of stranded generation
capacity. The mess ailing the sector has reached a point where the initial euphoria of investing in power generation is beginning to wane.
- Ensuring the financial viability of discoms needs tariff reforms and state governments to keep their commitments on subsidy support. With mounting pressures on discoms due to drying up of short-term funds from banks and financial institutions, discoms are looking to restructure loans and facing the imperatives
of tariff revisions. Some State Electricity Regulatory Commissions (SERCs) have raised tariffs in the past year, albeit with delays.
- The subsidy dependence of the discoms is extremely high at ` 43,000 crore, and thus timely disbursement
of subsidy by states is extremely important for maintaining the liquidity position of discoms. In particular, Rajasthan and Andhra Pradesh have defaulted significantly in meeting their subsidy commitments over the last few years.
Issue with Telecom sector
- The telecom sector is illustrative of how the government needs to regain momentum in the policy domain. The cancellation of 122 licenses will impact nearly 70 million subscribers and 8 companies which were new entrants to the telecom market in India. Proactive action on this issue is even more imperative as subscriber
growth has slowed down, and there is limited progress on broadband access.
- Most critical for sustaining growth in the sector is to resolve spectrum related issues. TRAI has already made recommendations on issues of spectrum allocation that emerge from the Supreme Court directives. The much awaited New Telecom Policy now needs to take a definitive view on these recommendations
and provide specific and time-bound policy directions to address the issues.
- The government also needs to immediately respond to the Supreme Court directives with an action plan for re-awarding the 2G licenses while balancing the license fees, consumer interests on tariff issues and overall viability of the sector.
- There is no doubt that private sector operation has grown significantly in Indian ports. The private or non-major ports have grown to account for nearly 42% of total port capacity in India. Moreover, as much as 88% of total container traffic at Indian ports is handled by private players. Until recently, bulk cargo traffic was predominantly operated by Port Trusts themselves and hence was government controlled. Privatization of bulk terminals is picking up; however progress has been slow. As a result, capacity in major ports is stagnating and there is need for greater modernization.
- The regulatory uncertainty due to differential tariff regimes in major ports needs to be resolved. The 2005 tariff guidelines followed by the Tariff Authority for Major Ports (TAMP) provided for three-yearly tariff reviews for private terminals in major ports. These were revised in 2008, with the new guidelines setting
tariffs for the entire concession period. It is important that concessionaires under each of these regimes be brought on a level playing field in terms of tariff regulation. Moreover, the role of TAMP in an increasingly competitive environment and a move towards tariff based competitive bidding should be explored.
- Urgent action is required in the coming year so that we see an improvement in regulatory processes; we make progress in finding the right balance between growth and environmental concerns; we remove the most
troublesome supply bottlenecks; and we make the environment more conducive to private investment in Indian infrastructure. I can assure you of IDFC’s strong continued commitment to building sustainable and inclusive infrastructure in India.
That's a depressing macro environment for the IDFC, isn't it ??
Few more point's on sectors
- Net addition of wireless subscribers dropped by over 50% to about 9 million per month during FY12 compared to approximately 19 million per month in FY11. The fall in net additions was primarily due to urban saturation without a sustained increase in rural penetration as telecom operators slowed the pace of network roll out in rural areas. The wireless subscriber base at the end of March 2012 was 919 million as against 812 million in March 2011 (active subscriber - 74%).
- The overall teledensity increased from 71% in March 2011 to 79% in March 2012. Urban teledensity
reached 169% while rural teledensity stood at 39% by the end of March 2012. The teledensity
growth has slowed down considerably during FY12 as compared to FY11.
- Roll out of 3G services by telecom operators has helped the tower companies increase their tenancies during this year. No major M&A transactions have taken place during the year.
- Broadband penetration continues to be a major challenge for the Indian economy. Broadband subscriber base reached 13.8 million in March 2012 from 11.5 million in March 2011, a growth of almost 15%. National Broadband Policy (NBP) released by the Telecom Regulatory Authority of India (TRAI) in December 2010 had suggested a roadmap to increase the Broadband subscriber base to 75 million connections by 2012 and to 154 million subscribers by 2014. NBP had also envisaged development of National Broadband Network (NBN), an open access optical fibre network connecting all habitation with population of 500 and above, planned to be built with an investment of approximately 60,000 crore by National Optical Fibre Agency, a special organisation proposed to execute this project. The last mile connectivity was to be provided by mix of 3G / 4G network, cable network and wireline broadband. No action has been taken on this front so far.
Sorry Lost patience at this point to learn about the ills of other sector's like transport, railways etc etc... Keeping it for some other day, maybe. Let's move current year Financials
Current Year Financials
- Revenue from operations 6,094.32 compared to 4,524.00 crore in FY11, growth of 34.71%
- Provision and contingencies 283.85 Vs 234.94 crore in FY11. (If the condition is so bad in the sector's to which it lends, shouldn't the contingencies be higher ?)
- PBT 2,201.36 cr. Vs 1,730.44 cr. in FY11. (27.21%)
- Tax of 598.40 cr. Vs 453.30 cr. in FY11.
- PAT of 1,602.96 cr. Vs 1,277.14 cr. in FY11. (25.51%)
- NPAs at 71.43 crore as on March 31, 2012.
- EPS 10.54 Vs .
- Dividend at 2.30 rs per share.
- On February 11, 2012, 84,000,000 Compulsorily Convertible Cumulative Preference Shares having a face value of 100 each (CCCPS), issued by the Company in August 2010, were converted into 47,727,272 equity shares of 10 each at a conversion price of 176 per share. As per the terms and conditions of CCCPS, the Company paid dividend @ 6% p.a. to the preference shareholders, at the time of conversion of CCCPS into equity shares, for the period starting from April 1, 2011 to February 10, 2012.
- Balance Sheet grew by 24% Year on Year (YoY) to reach 60,706 crore and Net Loans at
` 48,185 crore witnessed an increase of 28% YoY. As on March 31, 2012, IDFC’s total
exposure was 69,718 crore, of which Energy was highest 41%, followed by Transportation
28%, Telecommunication 21% and Others 10%.
- During the year, IDFC reduced it's dependence on bank borrowings. More cost-effective sources of borrowings such as Commercial Paper, Bonds, Infrastructure Bonds having tax benefits
under Section 80CCF of the Income-tax Act, 1961, Foreign Currency Loans, were utilised,
which resulted in lower increase in cost of funds.
- During the year, IDFC sold 25% plus one equity share each in IDFC Asset Management
Company Limited and IDFC AMC Trustee Company Limited to Natixis Global Asset Management Asia Pte.
- Out of 20,750,721 options outstanding at the beginning of the current financial year, 1,340,668 options
lapsed on account of resignations and 3,687,948 (EPS goes down from 10.54 to 10.05 when accounted for the option) options were exercised during the year. Additionally, during the year, 22,248,000 options were granted to eligible employees under the Scheme. Accordingly, 37,970,105 options remain outstanding as of March 31, 2012.
Huh , quite an extensive AR. Need to read it again.. they have own some Silver Shield for Excellence in Financial reporting too.