Glance Finance Ltd. Other Financial Services. . Company Overview. Company Fundamentals. Key Strengths. CMP Rs BSE Code BSE ID

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1 Other Financial Services Nov 15, 2012 CMP Rs BSE Code BSE ID GLANCE High/Low 1Y (Rs.) 35.15/ Average Volume (3M) 279 Market Cap (Rs. Cr.) 6 Shareholding % Sep-12 Jun-12 Promoters DIIs # FIIs # Public & Others Stock Chart ( Relative to Sensex) Nov May Nov-12 Glance Finance Sensex Stock Performance (%) 1M 6M 1Yr Glance Finance Sensex Financials FY09 FY10 FY11 Revenue Y-o-Y % 14.5% EBITDA Y-o-Y % -4.2% Net Profit Y-o-Y % 66.9% EPS (Dil.) EBITDA Margin 36.9% 23.4% 19.6% Net Profit Margin 24.8% 18.1% 26.3% P/E(x) 12.4x 8.4x 5.1x Financial year ends at March 31. All figures in Rs. crore except for per share data # FIIs- Foreign Institutional Investors Glance Finance Ltd.. Company Overview Glance Finance Limited is a Non-Banking Financial Company, mainly engaged in money-market operations and other financial activities. It was incorporated as a private limited company on September 21, 1994 and was later converted to a public limited company on September 28, The company is involved in trading of securities, commodities, financing, financial and accounting consultancy services. Besides, the company has a partnership firm called Zenstar Impex. It is primarily engaged in providing advisory and consultancy services and funded activities. Over the years, the company has provided customized services to various business houses in different industries in India and abroad. Company Fundamentals EBITDA margin declined The revenue of the company has been increasing steadily. In FY11, the revenue of the company stood at Rs. 4.5 crore, compared to Rs. 3.9 crore in FY10, a growth of 14.5%. However, increase in employee cost and other expenditure have affected the margin of the company. EBITDA margin decreased from 23.6% in FY10 to 19.6% in FY11. Considerable increase in net profit Despite rising rate of fixed deposits and other traditional savings instruments, coupled with intense pressure on the brokerage income, the company has managed to achieve significant growth in net income. The company s net profit has increased to Rs 1.2 crore in FY11 from Rs 0.7 crore in FY10. Company is looking for restructuring activity The company has recently implemented few measures to strengthen its internal controls and also laid down procedures for risk assessment and minimization. Management has also indicated that the company is looking for methods of monitoring the profit centres for the company and business activities of each division. Key Strengths - Healthy revenue growth - Strong internal control and risk assessment methods # DIIs- Domestic Institutional Investors Initiative of the BSE Investors Protection Fund -1-

2 Company Business Glance Finance Limited is a Non-Banking Financial Company, mainly engaged in money market operations and other financial activities. It was incorporated as a private limited company on September 21, 1994 and was later converted to a public limited company on September 28, The company is involved in trading of securities, commodities, financing, financial and accounting consultancy services. Besides, the company has a partnership firm called Zenstar Impex. The company is primarily engaged in providing advisory and consultancy services and funded activities. Over the years, the company has provided customized services to various business houses in many industries in India and abroad. Primary Line of Business: Business Trading Advisory & Consultancy Services Leasing & Financing Securities Commodities Money Market Initiative of the BSE Investors Protection Fund -2-

3 Industry Overview Over the years, there has been a considerable expansion of the Indian financial market. This has been the result of various financial market reforms undertaken by the regulators, introduction of innovative financial instruments in recent years and the entry of sophisticated domestic and international players. The private sector participation in sectors such as banking, asset management and brokerage has contributed to the development and modernisation of the financial services sector. Introduction of new products and expansion of delivery channels helped non-banking financial services sector, such as equities, derivatives and commodities brokerage, residential mortgage and insurance service witness significant growth rates. The capital markets have also undergone substantial reforms in regulation and supervision, particularly the establishment and empowerment of SEBI. Moreover, screen-based nation-wide trading, dematerialization and electronic transfer of securities, rolling settlement and derivatives trading have improved both the regulatory framework and efficiency of trading and settlement. In India, the primary segment of the capital markets has also been witnessing a surge in activities driven by factors like the strong fundamentals of the Indian economy, a buoyant secondary market, revival of structural reforms by the Government and an investor-friendly framework provided by the market regulator. Financial brokerage market in India is going through sweeping changes with new players looking to be a part of the highly-competitive brokerage market, characterized by dwindling brokerage and exponential growth of brokers and sub-brokers. The fortune of the brokerage industry is closely linked to the performance of the capital market turnover which, in turn, depends on the performance of the equity market and economic conditions. The industry benefited when impressive Indian GDP growth boosted investors confidence, thus resulting in increased participation in the equity markets. Strengths Increased income levels in Tier-II cities. Huge market potential given the under penetration of equities as an investment avenue among Indian investor community. A more flexible cost structure arising from the increasing reliance on the franchisee model. Challenges Increasing cost of regulatory compliances. Greater dominance of the foreign brokerage houses in the institutional broking segment. Protecting brokerage yields and market share in the highly-competitive and fragmented equity brokerage industry. With the industry having passed through rough phases during and , the profitability of the brokerage houses came under intense pressure with the brokerage income getting adversely impacted and the turnover declining amid falling stock prices and average brokerage yield. Many existing players have been forced to reduce operations due to lack of revenues while others are surviving on the basis of consolidation. Rising rate of fixed deposits and other traditional saving instruments due to turbulent Indian market conditions are acting as major challenges for the market. Global uncertainties have also put huge pressure on the market. Competitor Analysis We have compared Glance Finance Limited with its closest peer in the domestic market. Company Year End CMP M Cap Revenue EBIT Margin Glance Finance Ltd. Mar % Indo Asia Finance Mar % Source: Capitaline, BSE, Market cap and Revenue in Rs. crore. CMP as on 15 Nov 12 EPS P/E Initiative of the BSE Investors Protection Fund -3-

4 Summary Financials Particulars (Rs. Crore) FY09 FY10 FY11 Net Sales Other Op. Revenue Total Revenue Growth (%) % 14.5% Cost of Goods Sold Gross Profit Employee Cost Other Expenditure EBITDA Growth (%) % -4.1% Depreciation EBIT Profit Finance Cost Other Income Exceptional Items PBT Growth (%) % 62.7% Income Tax Profit after Tax Extra Ordinary Items Net Profit Growth (%) % 66.9% Rep. Basic EPS Rep. Diluted EPS Equity Capital Face value Ratio Analysis FY09 FY10 FY11 Margins EBITDA Margin (%) 36.9% 23.4% 19.6% Net Profit Margin (%) 24.8% 18.1% 26.3% Valuation P/E (x) P/BV (x) Profitability ROCE (%) RONW (%) 6.9% 9.2% 13.5% Solvency Ratio Debt/ Equity Ratio (x) Interest Cover (x) #Bifurcation of long and short term debt is not available for FY09, FY10 and FY11 Initiative of the BSE Investors Protection Fund -4-

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