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Ladies and gentlemen, good day, and welcome to the Q4 FY '22 Earnings Conference Call of Geojit Financial Services Limited. We have with us today from the management, Mr. C.J. George, Managing Director and CEO; Mr. Satish Menon, Executive Director; Mr. A. Balakrishnan, Executive Director; Mr. Jones George, Executive Director; Ms. Mini Nair, Chief Financial Officer; and Mr. Liju K. Johnson, Company Secretary. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Satish Menon, Executive Director. Thank you, and over to you, sir.
Thank you, Margaret. Good morning to everyone who have joined this call and a warm welcome from Geojit. We have already uploaded the presentation, the shareholders' presentation to the exchanges website as well as in our website. You can go through the presentation in detail as per your convenience. Just to kick start the call, I will talk about some numbers, and then we can open for Q&A. In terms of the operational income for the quarter ended March '22, we have done INR 122.8 crores, which is 5% down from the December quarter and 1% up from the same quarter previous year. In terms of total income, it is INR 500.29 crores, which is 18% up Y-o-Y, that is compared to the financial year '21. In terms of PBT for the quarter ended March '22, we did INR 46.15 crores, which is 3% down from the same quarter last year. In terms of full year for FY '22, the PBT is INR 202.31 crores, which is 22% up from FY '21. PAT is 5.8, 4% down from the previous year same quarter. And for the full year, the PAT is INR 154.42 crores, which is up 22% from the previous year. This was the best year for Geojit's history in terms of both sales as well as in terms of profit. The income is split into 3 major categories: equity and equity-related; financial product distribution, which has been our focus for a few years now and that has seen a very good traction in these years, we will come to the details when there is Q&A; and software and other operational income. In terms of equity and equity-related income for the quarter ended March, we had INR 82.78 crores, which is 7% down from the same period last year. And for the full year, INR 355.25 crores, which is 11% up. This is primarily due to the decline in volumes in the normal stock markets primarily coming from the cash market. The split of the income for brokerage is given there in the presentation. Out of INR 82.78 crores, INR 63.99 comes from pure brokerage, INR 7.32 crores come from depository and INR 11.47 crores come from interest, all put together INR 82.78 crores. The highlight of this quarter as well as for the full year is the financial product income. Last quarter, we did INR 25.22 crores, coming from both mutual fund and insurance, which have seen robust growth both for the quarter as well as for the year. Financial product income is up 35% Y-o-Y, of which mutual fund is 34% up and insurance is 33% up in the quarter. And for the full year, it is INR 81.45 crores, which is 42% up from the last financial year. Mutual fund is up 42% to INR 61.08 crores and insurance 18.03 crores of income, which is up 33%. Software income has seen a 15% growth Y-on-Y on the quarter, INR 3.3 crores. And for the full year, software income is INR 12.10 crores, which is 25% up. So in total, income, I have just said 1% up from the last year quarter and for the full year 17% up, total income including the nonoperational income. Quite a few details have been given in the presentation in terms of number of clients, in terms of mutual fund inflows, mutual fund clients. I'm sure you would have gone through it. And of course, if there are any questions, we'll be happy to answer. Margaret, this is what I wanted to say. We can now open for Q&A.
[Operator Instructions] The first question is from the line of Chander Bhatia from Seers Fund Management.
Congratulations for a good set of number and for crossing INR 500 crores as sales and INR 150 crore as profit. So I have a couple of questions. First question is regarding the merger of Geojit Investment with the parent company. So will it have any impact with regard to reduction in cost or with regard to benefits of carryforward losses or any other thing.
You would like to take this?
Chander, this is C.J. George. There will not be any impact at all. This was a nonoperational company. So we -- and this company has some capital in the balance sheet. So it will not have any significant impact on P&L, this company has never been seriously operational in the past.
Okay. And sir, my second question is about an update on wealth management business. Is there any direction or a number of offices the company has opened and the plan for the current year?
Yes. Can I take this?
Yes, please, Satish.
So in terms of wealth management business, currently, we have now 4 offices in Kerala, 2 in Cochin, 1 in Trivandrum, 1 in Calicut. And the proposal is to open 2 more offices in the State of Kerala as of now and then go ahead to nearer places like Coimbatore, Chennai and Bangalore. Right now, we have 4 offices. We have made a small start of around INR 300 crores of AUM. And it looks like as of now in terms of costing, we are making money there also, even though it is the first year of operation.
Okay. This is really helpful. And sir, what is the cash in the books as on 31st March? And my other question pertains to other expenses, which are higher by around INR 3.5 crores in this quarter, if I compare to the previous quarter. So is there any one-off or it is a normal expenditure for the quarter?
Okay. I request our CFO, Mini Nair to state how much is the cash in the group as well as the other expenses details?
The other expenses, there is not too much big variances here. The major variances are the increase based on the marketing expense, which was focused effort. Management asked me to increase the branding and the marketing activities of the company. And another area which the expense increased is in the software expenses. The company is investing a digitization for future growth. These are the 2 major areas where the expenses have gone up.
And cash?
Total cash -- the client cash is around INR 400 crores average and on funds around INR 300 crores and INR 250 crores to INR 300 crores range.
Maybe if you can find out what is the cash in the group or basically that is the normal question which comes in?
Cash in the group will be around INR 700 crores.
[Operator Instructions]
Let me come in and supplement the answer of CFO. While CFO was talking about the cash, cash utilization is going up because our margin lending book is growing. So there has been a significant deployment of cash in the financial year. We see that going up, [ that's Tier 2 ].
[Operator Instructions] The next question is from the line of Sumit Jankar from Motilal Oswal Financial Services.
Sir, I wanted to ask what is the current cash market share and derivatives market share in terms of turnover?
So the cash market share for the last quarter was 0.73 percentage. And the delivery -- F&O was 0.004. In terms of our total volume -- in terms of our total income, F&O from the last quarter was around 22 percentage of total income, balance 78% of income comes from our cash market, of which primary income concern our delivery business.
Okay. So the F&O contributes to 22%, right?
Yes.
Okay. So is there any growth in S&O contribution from last year to this year?
Yes, there has been a small increase compared to what F&O was providing last year. Just give me a minute. I will find out. Yes. It was 17 percentage last year FY '21. Now it is become 21. Now it is 21 percentage.
This has not been our focus area and we may not focus on -- although the market is very big and growing, our analysis has found that the retail investors are losing money in derivatives trading and a lot of speculation that is going on. So this will not be a focus area for us. We will continue to focus on long-time wealth creation for our clients who are doing delivery business through us.
[Operator Instructions] The next question is a follow-up from the line of Chander Bhatia from Seers Fund Management.
One question is about the plan for addition of employees and whether that addition is likely to be on the marketing side or it is also on the other verticals? And the second question is the gross inflow and net inflow in mutual fund AUM for the quarter.
Satish, are you taking this question?
Ladies and gentlemen, we lost the line of Mr. Menon, actually. Please give me a moment while I call him back. Ladies and gentlemen, thank you for patiently waiting. We have Mr. Satish Menon reconnected. And sir, we have Mr. Bhatia in the question queue. I'm not sure if you heard his question.
I'm sorry, I got disconnected. Bhatia sir, can you please come again?
Mr. Bhatia, if you could repeat your question?
Yes. So sir, my question is about the plan to add a number of employees for the current year. And in which vertical you want to add, whether on marketing sales or on IT sales? And the second question is about gross inflow and net inflow in the mutual fund distribution side for the quarter?
Thank you, Bhatia sir. Apologies for cutting off. So in terms of employees, yes, we plan to hire 350-plus people in this financial year. And most of them would be in the sales side. We also have a plan to hire close to 75 to 100 people in the technology side that will be part of Geojit Technologies. Mr. Balakrishnan, my colleague can give more details on the technology side. On the retail fund inflow, I will complete the mutual fund inflow, then I can hand over to Balakrishnan on the employees on the technology side. On the mutual fund inflow, sir, in the financial year '22, the gross inflow was INR 1,739 crores, and outflow was 72% of it. Hence, the net inflow is around INR 492 crores. And if you see the same last year, last year, it was a negative inflow of INR 101 crores. This year, it has become positive inflow of INR 492 crores. Mr. Balakrishnan, can you please add --
Let me comment here, Mr. Bhatia. We are opening 28 offices also. These are largely in semi-urban places in Kerala and Tamil Nadu. 6 of these 28 are operational, and the balance offices will be operational by the end of second quarter. So the projected number of employees also include the incremental recruitment for the offices that we are now planning.
And sir, follow-up questions. Generally, how many employees will you be having in one office, which you're about to open?
These are -- internally, we call it micro offices. These are offices where we have only 2 to 3 people. But these are in large semi-urban [ place ], where we are seeing a lot of potential investors. This is to build a relationship with increasing number of our potential customers.
This is Balakrishnan. Regarding Geojit Technologies, we have at this point in time around 160 people and we will be adding more people. This company as a stand-alone entity is profitable. We do a lot of development work for Geojit Financial Services and its subsidiary companies and also do some external work. For that, actually, this year, we will be planning around addition of 100-plus employees.
Sir, do you see that growth in investment business also for the current year in your technology arm?
Yes, technology is a part and parcel of Geojit Financial Services growth by and large. Even this year also, 45% of the development effort has gone into this subsidiary, remaining only in our side. So this is an ongoing engagement with the Geojit as well as outside. There is -- and you know today, I see it's an important thing, there's a lot of demand on IPO's.
Okay, sir. Sir, what could be the kind of cost you expect to increase on your employee vertical because of increase in number of employees?
This question Bhatia-ji, s for GFSL or you're talking about the Technology for the --
For the entire company.
So average Bhatia-ji, you can look at around INR 3 lakh, INR 3.5 lakh per employee.
Okay, sir. And it can be as well accordingly because it will be spread over the years?
Yes.
Technology might be a little costlier, Balakrishnan, sir?
Yes, yes. Technology will be costlier. It can go up to INR 4 lakh, INR 4.5 lakh per annum, average.
[Operator Instructions]
I think there are no further questions, Margaret.
We don't have anyone in queue, sir.
Okay. MD, sir, do you want to make any final comments? Or we can close the call?
No, we can close the call because today is a holiday and then despite being a holiday --
People have joined.
Yes, people have joined. We are thankful to all of you. We didn't want to wait until Monday. That is why we wanted to hold this conference today. Thank you very much. In case you have any more questions, feel free to contact us directly. We'll be very happy to give clarification here with all you are looking for. Thank you.
Thank you. Of course, the presentation details are already available in the exchange website as well as in our website. So please feel to look into it. And as MD said, we are always here to answer questions. Margaret, we can officially close the call.
Thank you. On behalf of Geojit Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.