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India Infoline LimitedResults for Year and Quarter ended March 31, 2010

April 24, 2010

• Performance highlights

• Business review

• Corporate overview

• Industry update

Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)

Results for Year and Quarter ended March 31, 2010 2

3

Performance highlights – Financial Year, 2009-10

Overall consolidated financial performance Annual Income at Rs11,239 mn, up 28% yoy PBT and PAT at Rs3,547 mn and Rs2,320 mn, up 62% yoy and 60% yoy respectively EBIDTA margin for the year was 39% as compared to 33% in the previous year

Broking

Average daily turnover up 57% in FY10 to Rs35 bn Overall market share in NSE was 3.8% in FY10 Commodities brokerage registers 47% increase yoy

Life Insurance Life insurance distribution income at Rs536 mn, up 11% yoy In FY10, the relative share of pension products have increased from 32% to 35%

Investment Banking During the year, our Investment Banking team advised and managed more than 10 transactions including the

Cox & Kings IPO, Infinite Computer Solutions IPO and the Gammon India QIP Income from Investment Banking increased 16 times to Rs 388 mn, as against Rs 23 mn in FY09

Credit and Finance Book size in FY10 increased to Rs16.3 bn from Rs9.6 bn Loan growth likely to accelerate in the next year on the back of improving macro-economic scenario

Wealth Management Assets under advisory over Rs 50 bn – spanning over 1,000 families Wide gamut of products meeting risk - return profiles for all segments

Results for Year and Quarter ended March 31, 2010

4

Financials: Over the years


30%

39% 40%

33%

39%

33%

39%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

FY04 FY05 FY06 FY07 FY08 FY09 FY10

Income (Rs mn)

Profit after tax (Rs mn) EBITDA Margin (Rs mn)

Return on average equity (%)

75217

492

756

1,5991,448

2,320

0

500

1000

1500

2000

2500


380 773

2,180

4,257

10,236

8,775

11,239

-

2,000

4,000

6,000

8,000

10,000

12,000


44%40%

29%

18%

10%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

FY05 FY06 FY07 FY08 FY09 FY10

5

Financial Highlights – Financial Year, 2009-10

Rs Mn FY10 FY09 Y-Y

Income from operations 11,228.9 8,750.7 28.3%

Other income 9.9 24.2 (59.7%)

Total Income 11,238.8 8,775.0 28.1%

A. Direct cost 1,675.9 1,211.7 38.3%

B. Employee cost 3,179.0 2,737.0 16.1%

C. Administration expenses 2,010.8 1,903.6 5.6%

EBITDA 4,373.1 2,922.7 49.6%

Interest 291.4 331.8 (12.2%)

Depreciation & amortisation 534.6 396.0 35.0%

Profit / (Loss) before tax 3,547.1 2,194.9 61.6%

Provision for taxation 1,206.7 621.5 94.2%

Profit/(Loss) after tax before minority 2,340.3 1,573.4 48.8%

Minority Interest 20.6 125.2 (83.6%)

Profit/(Loss) after tax 2,319.8 1,448.2 60.2%


6

Financial Highlights: Jan – Mar Quarter, 2009-10

Rs Mn Q4FY10 Q4FY09 Y-Y Q3FY10 Q-Q

Income from operations 3,094.7 1,678.7 84.4% 2,893.8 6.9%

Other income 3.2 2.6 21.1% 3.5 (8.3%)

Total Income 3,097.9 1,681.3 84.3% 2,897.3 6.9%

A. Direct cost 505.1 195.9 157.8% 423.8 19.2%

B. Employee cost 971.8 632.6 53.6% 828.3 17.3%

C. Administration expenses 592.0 416.3 42.2% 516.4 14.6%

EBITDA 1,029.0 436.5 135.7% 1,128.9 (8.9%)

Interest 118.3 22.8 417.8% 10.4 1041.4%

Depreciation & amortisation 119.0 122.7 (3.1%) 150.0 (20.7%)

Profit / (Loss) before tax 791.7 290.9 172.2% 968.5 (18.2%)

Provision for taxation 268.4 31.2 760.3% 341.7 (21.5%)

Profit/(Loss) after tax before minority 523.3 259.8 101.5% 626.8 (16.5%)

Minority Interest 1.3 6.9 (81.3%) 31.8 (95.9%)

Profit/(Loss) after tax 522.0 252.9 106.5% 595.0 (12.3%)


7

Income composition

Rs Mn FY10 FY09 Y-Y

Equities brokerage & related 6,148.3 4,539.2 35.4%

Financing and Investment 2,917.9 2,654.1 9.9%

Marketing and online media 658.7 706.4 (6.7%)

Life Insurance distribution 536.4 481.5 11.4%

Commodities brokerage & related 248.3 169.2 46.8%

Wealth and Mutual fund advisory 331.6 177.1 87.3%

Merchant Banking 387.8 23.3 1566.8%

Other income 9.8 24.2 (59.7%)

Total Income 11,238.8 8,775.0 28.1%


Q4FY10 Q4FY09 Y-Y Q3FY10 Q-Q

1,474.7 978.5 50.7% 1,510.2 (2.4%)

968.5 345.2 180.5% 598.4 61.8%

253.9 168.6 50.6% 203.0 25.1%

196.3 89.3 119.9% 135.8 44.6%

68.4 42.3 61.8% 67.5 1.3%

76.4 54.5 40.2% 94.3 (18.9%)

56.6 0.3 19298.3% 284.8 (80.1%)

3.1 2.6 21.1% 3.5 (8.3%)

3,097.9 1,681.3 84.3% 2,897.3 6.9%


• Business review


• Industry update

8Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)


9

Equities

Market share on NSE maintained at 3.8% in FY10

Average daily turnover up 57% yoy in FY10 to Rs35.02bn

Present in over 2,300 business locations through branches and sub-brokers

IIFL Securities Pte Ltd, our Singapore-based subsidiary, received in-principle approval for Securities Trading and Clearing memberships from Singapore Exchange (SGX)

Our first Global Investors’ Conference at Mumbai - ‘Enterprising India’ had a participation of more than 450 Fund Managers, over 70 corporates, world renowned economists and thought leaders

IIL market share on NSEEquities broking (Cash & FAO) in Rs mn


10

Research

150+ stocks under coverage

Our in-depth, thematic research has been well received. Our recent research reports include:

An on-the-ground assessment of NREGA and how it is transforming 'Rural India'

The Great Collapse: How China’s high-speed rail network will transform travel in the country

A perspective on India's spirit of enterprise – 'Enterprising India', conveyed through interviews with 41 enterprising Indians

China Oil - study of our large neighbour’s quest for energy security

Market Mantra, our daily comprehensive retail product covers market outlook, latest news, economy snapshot, personal finance insights, event notes, management meets, research ideas, etc

Research offerings – a few reports printed this quarter

A close look at India’shuge and fast-growing

rural economy

Market Mantra is a comprehensive daily retail

product

A tribute to India’s spiritof enterprise: we

interview 41 achievers

The Great Collapse: HowChina’s high-speed railnetwork will transformtravel in the country


A study of our largest neighbour’s quest for energy

security

11

Insurance

Life insurance distribution income for the year stood at Rs536.4 mn, up 11.4% yoy

In FY10, the relative share of pension products have increased from 32% to 35%

The private sector insurance companies witnessed a marginal volume growth (est 7% yoy)

Uncertain regulatory environment can result in head winds for the industry

Changing product mix Income (Rs mn)


216

593

1,009

481536

0

200

400

600

800

1000

1200

FY06 FY07 FY08 FY09 FY10

45%

1%21%

32%

FY09

54%

1%

35%

10%

FY10

Endowment Health Pension ULIPGuaranteed return ULIPs

12

Credit and Finance

The loans portfolio as on March 31, 2010 stood at Rs16.3 bn

In FY10, mortgages contribute to 42% of the lending book, followed by margin funding, LAS and personal loans at 36%, 16% and 6% respectively

Net NPAs on the books continue to remain less than 1%

Loan growth likely to accelerate on the back of improving macro-economic scenario

Loan Portfolio (Rs bn) Portfolio break-up


9.4 9.6

16.3

0

2

4

6

8

10

12

14

16

18

FY08 FY09 FY10

13

Wealth Management

Assets under advisory over Rs 50 bn – spanning over 1,000 families

Successfully sold real estate NCD transactions to large non-institutional clients

Innovative products structured on the fixed income side including NCDs, NABARD, Structured Notes and co-lending transactions

Have been building a robust platform covering various products supported by an advisory


Asset Advisory

Real Estate, Structured Real Estate, Structured Products, Derivatives

Mutual Funds and PMS

International Products

Fixed Income

Equity Advisory and Equity Advisory and Research Aggregation

Centralized Broking Desk

NBFC and Credit Services

PLATFORM

14

Investment Banking

Income from Investment Banking stood at Rs 387.8 mn, as against Rs23.3 mn at the end of FY09

Sole BRLM for the ongoing Rs774.4 mn Talwalkars IPO

During the year, our team advised and managed more than 10 transactions including the IPOs of Cox & Kings, Infinite Computer Solutions and the QIPs of KSK Energy Ventures and Emami

IPORs6,100mn

Cox & Kings India Ltd. Sole BRLM

2009

QIP Rs. 3,100 mn

Emami Ltd.2009BRLM

Secondary Placement Rs. 1,056 mn

Everest Kanto Cylinder Ltd.

2009

QIPRs3,042mn

Gammon India Ltd. –BRLM2009

QIP Rs5,159mn

KSK Energy VenturesBRLM2009

IPO Rs1,898 mn

Infinite Computer Solutions

BRLM2010

QIPRs6,760mn

Cipla Ltd.Co-BRLM

2009

Acquisition of AMS Division of Caryaire

Equipments India Pvt Ltd. By Flakt Woods

Sole Advisor2009

Deal Snapshot: FY10


IPO

Member of the Syndicate

DQ Entertainment(International) Ltd.

2010

Rs.1,282mn

Rs.30,165mn

Member of the Syndicate

Adani Power Ltd.

2009

IPO

15

Group brand identity changed to IIFL

Brand identity of the group changed from India Infoline to IIFL

This was communicated via a well-received multi-media advertising campaign

We have retained Ogilvy & Mather as our advertising agency

‘IIFL’ campaign


• Business review


• Industry update

16

Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)


17

Evolution

1995 Commenced operations as an Equity Research firm

1997

Launched research products of leading Indian companies, key sectors and the economy

Client included leading FIIs, banks, consulting firms and companies

1999 Launched www.indiainfoline.com

2000 Launched online trading through www.5paisa.com Started distribution of life insurance and mutual fund

2003 Launched proprietary trading platform Trader Terminal for retail customers

2004 Acquired commodities broking license Launched Portfolio Management Service

2005 Maiden IPO and listed on NSE, BSE

2006 Acquired membership of DGCX Launched Wealth Advisory Services

2007 Commenced institutional equities business under IIFL Formed Singapore subsidiary, IIFL (Asia) Pte Ltd

2008 Launched IIFL Wealth Transitioned to insurance broking model

2009 Acquired registration for Housing Finance SEBI in-principle approval for Mutual Fund Venture Capital license

2010 Received in-principle approval for Securities Trading and Clearing memberships from SGX

Revenues (Rs mn)

EBITDA (Rs mn)

PAT (Rs mn)


380 7732,180

4,257

10,2368,775

11,239


114 303869

1412

4022

2923

4373


75 217492

756

1599 1448

2320


18

Business Model

• Institutional equities

• Derivatives

• Investment banking

• Corporate debt

• Wealth management

• Advisory• Financing

• Equities• Mutual funds• Insurance

Retail Affluent

InstitutionalCorporate

CUSTOMERSEGMENTS

Our service offerings

Equities

Insurance

Credit & finance

Wealth management

Asset Management

Investment banking


19

Corporate Structure

India Infoline Ltd.(Bloomberg: IIFL IN)

India Infoline Commodities

India Infoline Investment

Services

India InfolineMedia & Research Services

IIFL RealtyIIFL (Asia) PteIIFL Wealth

Management

Moneyline Credit

India Infoline Housing Finance

India Infoline Distribution

Co.

India Infoline Insurance

Brokers

IIFL VenturesIIFL Capital

* The above chart does not cover all group companies

India Infoline Marketing& Services

India Infoline Insurance Services


20

Vision and Strategy

Focus on core competence in financial services

Ensure de-risked business through multiple products and diverse revenue streams

Asset-heavy or long-gestation businesses through separate JVs/ group companies

Drive stickiness through high quality research & service

Maintain cutting-edge proprietary technology

Wide, multi-modal network serving as one-stop shop to customers

Business Strategy Customer Strategy

Vision

“To become the Most Respected Company in the financial services space”

Attract exceptionally talented and driven people

Ensure conducive environment

Liberal Ownership-sharing

People Strategy


21

Management Team

Team with impeccable academic and professional credentials Open door, transparent and performance oriented culture Increasing level of employee ownership

Corporate FunctionsVerticals

Institutional Equities

Investment Banking

Consumer Finance

Retail Broking

Wealth Management

International Operations

H. Nemkumar

Ajit Menon, Donald D’Souza

Apul Nayyar

Nandip Vaidya

Karan Bhagat

Bharat Parajia

Management Team

Finance

Compliance

Operations

Audit & Risk

Human Resources

Technology

Kapil Krishan

R Mohan

Narendra Jain

Upendra Jaiswal

Capt Rahul Sharma

Sankarson Banerjee

Offshore Asset ManagementDeepesh Pandey, Manish Srivastava

Insurance Distribution Sateesh Kumar

Chairman and Managing Director Nirmal Jain Executive Director R. Venkataraman


22

Corporate governanceEminent independent directors of group companies

Sat Pal Khattar

A.K. Purwar

Nilesh Vikamsey

Kranti Sinha

M. N. Singh

Non-executive Director

Independent Director




• Chairman of the Khattar Holding Group of Companies• Member of Presidential Council of Minority Rights • Chairman of the Board of Trustee of Singapore Business Federation

• Joined State Bank in 1968 and became chairman in 2002• Became Chairman of Indian Banks Association in the year 2005-06• Received CEO of the year’ and ‘Outstanding Achiever of the year’ award

• Chartered Accountant and partner of Khimji Kunverji & Co• Part of the Managing Council and heading the Corporate Members

Committee of the Chamber of Tax Consultants (CTC)

• Director and Chief Executive of LIC Housing Finance Limited -1998 to 2002 • Concurrently was the MD of LICHFL Care Homes• Served as Deputy President of Governing Council of Insurance Institute

• Joined the ‘Indian Police Service’ in 1967• Worked as the chiefs of the crime branch of Mumbai Police, State CID and

Anti-Corruption Bureau

Name Designation Brief Profile

34%

18%

21%

27%

Promoters &Promoters

group

Public/Others

FIIs, VCsMFs, UTI, FIs, Banks

Category-wise shareholding (%)

Board Committees Key Role

Audit Committee Supervise financial reporting process and ensurecompliance with statutory requirements

Compensation Committee

Review compensation of Executive & Non – Executive Directors and senior employees

Share Transfer & Investor Grievance

Review investor grievances and ensure redressal to the satisfaction of the shareholders

Board Committees


23

How we differentiate ourselves

• Promoted by first generation professional entrepreneurs• Management team unmatched in terms of professional credentials, experience as

well as academic backgroundManagerial depth

• Net worth approximately Rs 16 bn with negligible debtWell-capitalized

• Present at over 2,300 business locations, with over 500 own branches• Effectively cover over 450 cities across India

Distribution reach

• The top management is driven by pride and reward of ownership• To think and work like an owner is part of organization’s DNA

Owner-mindset

• Uniquely placed with proprietary front, mid and back office software• Effectively harnessed technology to facilitate processes and provide superior

customer experienceTechnology edge

• De-risked and diversified business model across multiple revenue streams• Multiple products across all segments of financial services

De-risked


24

Awards and accolades

BEST MARKET ANALYST 2009

Best Analyst awards in the ‘Oil

& Gas’ and ‘Commodities’

sectors at the Zee Business for 2009

BROKER QUALITY RATING

CRISILBQ1

BROKER QUALITY GRADING 2009

Awarded BQ1 Broker Quality rating (highest

rating) from CRISIL

BEST BROKERAGE 2009

Amongst the top 3 for ‘Best

Brokerage’ in India by AsiaMoney for

2009

INDIA’S MOST VALUABE CEOs 2009

Nirmal Jain ranked second in ‘India’s

Most Valuable CEOS’ by Business

World for 2009

BEST BROKER –INDIA 2008

MOST IMPROVEDBROKERAGE – INDIA

2008

FASTEST GROWING BROKING HOUSE

2008



• Business review


• Industry update

25Unless otherwise mentioned, facts and figures in this presentation refer to those for the India Infoline group (consolidated)


26

5

10

15

20

25

30

35

Apr-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10

Institutional Share of Cash Mkt Volume Quarterly Average(%)

Equities

Institutional Share of cash market volumesTotal cash market turnover (USD bn)

Delivery volumes (%)

Source: Bloomberg, IIFL Research

Total derivatives market turnover (USD bn)

Source: Bloomberg, IIFL Research. Based on provisional data from the exchanges



-

2

4

6

8

10

Jan-06 Aug-06 Mar-07 Oct-07 Jun-08 Jan-09 Aug-09 Mar-10

Daily cash mkt turnover (US$bn) Quarterly Average

-

5

10

15

20

25

30

Jan-06 Aug-06 Mar-07 Oct-07 Jun-08 Jan-09 Aug-09 Mar-10

Daily derivatives mkt turnover (US$bn) Quarterly average

20

25

30

35

40

45

50

55

60

Jan-07 Jul-07 Jan-08 Aug-08 Feb-09 Sep-09 Mar-10

Delivery Volume Quarterly Average(%)


27

15

2736 37

52

59 56

85

7364 63

48

41 44

0

15

30

45

60

75

90

105

FY04

FY05

FY06

FY07

FY08

FY09

11M

FY1

0

(%)Private Players LIC

Insurance

Upto February 2009, Source: IRDA

Source: IRDA

578343

181111

9666

5349

221186511

0 100 200 300 400 500 600 700

APE growth yoy (%) – February 2010

APE market share (%) – February 2010APE yoy growth (%) – February 2010

Annual life insurance premiums in USD bn (2008)

Source: IRDA

Source: IIFL Research


(27)

(16)

4

(23) (25)

(9)(5)

(15)

30

14

63

14 18

(18)

(5)

14 16 9

29 35

12

45

34

54

(7)

41

(30)

(15)

0

15

30

45

60

75

Feb-

09

Mar

-09

Apr-

09

May

-09

Jun-

09

Jul-0

9

Aug-

09

Sep-

09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb-

10

(%) Private Players LIC

(30) (20) (10) - 10 20 30

ICICI PrudentialSBI Life

Bajaj AllianzHDFC Standard

Reliance LifeBirla Sunlife

Max New YorkTata AIG

Kotak Mah OM Met Life

Total private playersLIC

Insurance Industry (%)

28

-

200

400

600

800

1,000

1,200

Reliance Mutual Fund

HDFC Mutual Fund

ICICI Prudential

Mutual Fund

UTI Mutual Fund

Birla Sun Life Mutual Fund

(Rs bn)

Mutual Funds

Top 5 AMCs contribution (Rs bn) – March 2010Total AUM for the industry (Rs bn) – March 2010

March 2010, Source: AMFI March 2010, Source: AMFI

AUM as a % of GDP across countries (2008)AUM comparison across countries in USDbn (Q2FY09)

Source: IIFL Research Source: IIFL Research* India AUM as on Dec-09 was 177USDbn


795 1,396 1,496

2,319 3,264

5,327 4,940

7,490

-

2,000

4,000

6,000

8,000

10,000

Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10

(Rs bn)

10,027973

624607592574

328255

105562

0 2,000 4,000 6,000 8,000 10,000 12,000

USAustralia

BrazilUK

JapanHK

ChinaKorea

IndiaTaiwanRussia

(US$ bn)

96.3

70.3

39.7

26.9

22.7

14.2

12.0

8.7

7.4

0.1

0 20 40 60 80 100 120

Australia

US

Brazil

Korea

UK

Taiwan

Japan

India

China

HK (%)


29

327

426

22

248

4

5

1

6

-

2

4

6

8

10

-

100

200

300

400

500

FY07 FY08 FY09 FY10

Capital raised via IPO's Average Deal Size (rhs)(Rs bn) (Rs bn)

Capital raising and Fund flows

FDI inflows (till Dec 2009)

Source: Bloomberg, IIFL ResearchSource: Bloomberg, IIFL Research

Portfolio Flows have turned positive from the start of FY10

Capital raised through QIPs (Rs bn)


Capital raised through IPOs (Rs bn)



35

38

41

44

47

50

53-6

-4

-2

0

2

4

6

Jan-

08

Mar

-08

May

-08

Jul-0

8

Sep-

08

Nov

-08

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov

-09

Jan-

10

Mar

-10

Net FII flows

0

5

10

15

20

25

30

35

40

FY08 FY09 FY10

4Q 3Q 2Q 1QGross FDI inflows (US$bn)

50

257

2

380

-

2

4

6

8

10

-

100

200

300

400

500

FY07 FY08 FY09 FY10

Capital raised via QIP's Average Deal Size (rhs)

(Rs bn) (Rs bn)

Source: RBI, CMIE, IIFL Research

30

Thank you

Published in April 2010. © India Infoline Ltd 20010-11.

India Infoline Ltd. All rights reserved. Regd. Off: 75, Nirlon Complex, Off W E Highway, Goregaon (E) Mumbai-400 063.Tel.: +(91 22)4007 7000 Fax: 2685 0451.

This report is for information purposes only and does not construe to be any investment, legal or taxation advice. It is not intended as an offer or solicitation forthe purchase and sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your responsibility alone and IndiaInfoline Ltd (hereinafter referred as IIL) and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences of suchaction taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, but do not represent thatit is accurate or complete. IIL or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to anyperson from any inadvertent error in the information contained in this publication. The recipients of this report should rely on their own investigations. IIL and/orits subsidiaries and/or directors, employees or associates may have interests or positions, financial or otherwise in the securities mentioned in this report.

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