EDELWEISS FINANCIAL MULTIBAGGER POTENTIAL STOCK D09M10Y2014

Edelweiss Financial Services is a leading conglomerate started from scratch by a group of professionals led by Mr. Rashesh Shah, an indian financial services industry veteran. Established in the earlier part of the last decade, the company was engaged in a single vertical, capital markets, until year 2007. For more info check, https://www.edelweissfin.com/    

Since the last few years, Edelweiss has strategically moved into multiple adjacent areas/verticals in the financial services industry. The company is into five different (and related) verticals: Credit(loans), Financial markets, Asset management, Life insurance and Commodities.    

PRESENT DAY NUMBERS   
CMP on Day09 Oct2014: Rs 48            Market cap: 3674 crores         BV: 36            FV: 1           
Revenue FY14: 2546 cr (FY13 2177 cr)                Net profit FY14: 220 cr (FY13 178 cr)   
EPS: 3.1 (FY13: 2.3)        

MULTIBAGGER POTENTIAL         
1. Consolidated revenues of Edelweiss grew by 17% during FY 2014 which is quite significant considering the difficult market conditions.
2. PAT grew by 23% in what can be regarded as one of the most challenging year in recent times.
3. Edelweiss is present in all the major indian cities with 216 offices, including 6 international locations.
4. Over 5 lakh clients are served by around 4000 employees of the company across both retail and wholesale services.
5. A share buy back announced earlier during this year indicates the confidence of the promoters in the future prospects of the company.   

INTERESTING INFO  
1. Edelweiss Tokio life insurance company registered a rise of 102% in gross premiums over previous year FY2013
2. Edelweiss was ranked first in IPO distribution during FY2014 in Retail and HNI categories
3. Over 100 indian corporates and around 500 institutional (both global and local) investors participated in the annual India conference organized by Edelweiss
4. NBFC subsidiary ECL finance Ltd had a successful maiden NCD public issue of 500 CR in January 2014
5. Company has been maintaining a healthy dividend payout of around 28%    

MY TAKE        
Starting with a single pillar, Edelweiss Financial today is standing on 5 pillars. The transformation from a single vertical to 5 verticals was done slowly, measured and with good planning, backed by excellent execution. The company has competent and proven top management, adequate and capable middle management, to take this organization to the next level.   

India, as an economy, will be one of the fastest growing in the world over the next 5 - 10 years. Whether this grows at 6, 7 or 8%; this will create a massive middle class (bigger than the population of few developed countries put together). This will create the need for a wide range of financial services. 
Edelweiss is well equipped to capture this opportunity and transform itself into a significant financial services powerhouse. This company has the ability to scale. This belongs to Warren Buffett philosophy: Great Quality business at a reasonable price.   

A fine potential multibagger!!   

Disclosure: I own shares in Edelweiss financial  

You can contact me via zorbayogi9@gmail.com