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Emkay Global Financial Services Ltd

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BSE Code : 532737 | NSE Symbol : EMKAY | ISIN : INE296H01011 | Industry : Stock/ Commodity Brokers |


Chairman's Speech

We offer a wide spectrum of financial services under one roof and have evolved to provide equity research/broking, commodity and currency advisory and broking, equity capital market and merchant banking, debt advisory, asset management, and wealth management, thereby providing 360? offerings.

Dear Shareholders,

As we reflect upon the last year, we would first like to convey our heartfelt gratitude and extend warm wishes to you. We are glad our Company has completed yet another successful year of business operations and take the privilege of presenting our 28'h Annual Report for the financial year FY 2022. It is a matter of pride for us that our 360? offerings across financial solutions clocked in healthy performances backed by robust customer service on the back of our advanced technological platforms.

Macro-economic Overview

The macro-economic scenario around the globe and India, since the pandemic began, has been fraught with many uncertainties and upheavals. During 2021-22, many countries reimposed the mobility restrictions. Many Indian states followed suit, especially after recording an astronomical number of infections and a rising death toll caused by the second wave and omicron variant of Covid-19. Further, the geopolitical tension between Russia and Ukraine added fuel to the fire, with crude prices crossing US$ 120/barrel at one point. This sparked the fears of recession because such high prices were unsustainable in the long-term. Central banks around the globe are tightening their monetary policies and raising interest rates to combat the rising inflationary pressures. These moves caused the bond prices to dive south as yields climbed north - indicating the grim possibility of a global recession. The global growth outlook looks cautious, with India being no exception where the Q4 recorded the slowest pace in the year, while according to the National Statistics Office (NSO), the Indian economy grew by 8.7%, which is a little lesser than the earlier projections of 8.9%.

These events have helped drive a shift in the traditional Indian mindset towards investing. They have created an ambient ground for increasing the adoption of contemporary savings which has led to growth in investment of Mutual Funds, Wealth Management, Estate Planning, Equity Broking and many other solutions.

Savings and investments have got further impetus as life has slowly begun returning to normalcy, and the shock impact of the Covid-19 pandemic has started wearing off.

Industrial Landscape

The economic developments have brought about a significant change in the mindset of Indian investors. It has led them to lean more and more towards the investment options that give returns more closely linked to the market against the traditional, and mostly fixed returns-bearing investment instruments such as bank fixed deposits (FDs), endowment insurance plans, gold, real estate, bonds & debentures.

During the year, the Nifty and Sensex remained volatile. Although they've showcased tremendous recovery from last year, higher inflation and geo-political tensions have dented the growing market. The IPO market showcased a robust performance and 52 Indian corporates launched their IPO, where they've raised an all-time high of Rs.1,11,417 crore. As the number of IPOs continuously grows, it widens the opportunity for our Company to provide lead role services. With increasing financial literacy and various initiatives of investor education, the number of Demat accounts is also increasing. The number has increased by 63% in the past 12 months to 89.7 million in FY 2022, compared to the last financial year.

The increase in the number of Demat accounts opening - a proxy for individual retailers trading in the stock markets - along with the net investment figures of foreign investors, highlights the growth trend clearly. This growth was further led by easier digital on-boarding of customers and higher returns delivered by the Equity market compared to other Asset classes.

Also, the Domestic Mutual Fund Investors pumped in net investments in Equity and Debt markets to the tune of Rs.95,378 crore, compared to Rs.4,804 crore by Foreign Institutional Investors (FIIs) in FY 2022, showcasing the strength of domestic investors to continue building the capital markets.

Our Journey of 360? offerings

Our journey began with a 20-member team in a 300 square feet office more than 27 years ago. We started as a standalone brokerage house. Today, we have grown into an all-round financial services company. We offer a wide spectrum of financial offerings under one roof and have evolved to provide equity research/broking, commodity and currency advisory and broking, equity capital market and merchant banking, debt advisory, asset management, and wealth management. Thereby, providing 360? offerings.

Operational Overview

Our Company registered a robust performance in the current financial year, demonstrating our operational efficiencies. We witnessed an overall growth, with all our business strategies working simultaneously, translating into an all-encompassing 360? growth for us.

Emkay's revenue from broking and allied services grew from Rs.10,764 Lac to Rs.14,020 Lac, indicating a 30% growth in the segment, driven by growing average daily turnover in both cash and derivative segments.

Asset Management revenue grew by 32% and stood at Rs.1,414 Lac. Wealth AUMs of Emkay Global grew to Rs.1,96,666 Lac. Our PMS+AIF AUMs stood at Rs.77,017 Lac - showcasing a growth of 10% as compared to the previous fiscal year.

Our Wealth Management revenue grew by 58% from Rs.476 Lac to Rs.752 Lac. Our Investment Banking division closed the year as a BRLM for 6 QIPs out of 28 QIPs concluded in FY 2022, meaning that every fourth QIP in the market was managed by Emkay. Emkay Investment Managers distributed proceeds across the previous AIF offerings (Emkay Emerging Stars Fund - Series I, II & III) to the tune of 15% of outstanding units. This was well-received by investors and advisors and it also makes Emkay Emerging Stars Fund among the few pioneering funds to do so.

Revenue from others segments, including Treasury, showcased a colossal growth of 191%, from Rs.3,868 Lac to Rs.11,243 Lac.

Leveraging Technology

Technology and innovation are critical components of our differentiation, and we continue to invest in technology as a strategic enabler. We have always advocated the adoption of disruptive technologies that support our innovative business model, thereby, enriching our products. This approach increases the appeal of our offerings to the technologically savvy clientele and enhances their experience.

Our Company has a robust technological infrastructure which helps scale up our business. Over the years, we have built a reliable platform for our valuable client base backed by our state-of-the-art trading technology platform which is easily accessible. We have leveraged our technological prowess and built a scalable and sustainable digital business model. Our comprehensive financial product suite and expert perspectives cater to the evolving needs of our clients. We help investors achieve their goals through innovative digital platforms while enhancing their wealth creation journey.

For Our People and Community

Our talent pool of 495 employees is the most valuable asset for Emkay Global. Our Research team comprising nearly 40 members, has a combined experience of over 200 years. This experience and expertise is what helps our clients build a strong portfolio. We are fully committed to the development and well-being of our employees.

With a strong framework of policies, we emphasise promoting human rights and countering gender bias and racial discrimination. We seek to create a balanced, and harmonious work culture where every individual gets an opportunity to thrive and contribute to achieving the organisation's goals.

Our commitment to caring for the communities is embedded deeply into our investment and functional policies. With ESG investing gaining prominence, we believe in promoting good Environment, Social & Governance (ESG) standards in the companies we invest in. In line with this thought, our Institutional Equities team also organised a Renewable Energy conference during the last quarter of FY 2022, which was attended by 65 individual participants and 45 funds. Many similar events were carried out alongside during the year.

On a concluding note, we would like to reiterate our commitment to all our stakeholders to strive to further build on our 360? financial service provider position, while becoming the most preferred employer, the most innovative wealth creator, and a socially responsible entity with the best corporate governance practices. Looking to capitalise on the momentum that we have gathered, we seek to continue honing our capabilities and conviction of consistently giving investors good returns on their investments. We are sincerely grateful for the support of our entire team and the guidance of the Board of Directors in this endeavour. We also thank all our stakeholders for their continued trust and confidence that propels us to be better every day, year-after-year.

Best wishes,

Krishna Kumar Karwa Prakash Kacholia

Managing Directors.