Why Geojit Financial Services Share Price is Rising

Just like cricket fans on the edge of their seats as the final wicket falls, investors around the world hold their breath as the quarterly results season rolls in.

Quarterly financial statements are like a company's scorecard. They offer a glimpse into a company's health and its potential for future. One company currently capturing investor attention is Geojit Financial.

Since releasing its results on 13 July 2024, the company's share price is on a tear. It rallied 17.9% in just five days. In fact, today it reached a new 52-week high of Rs 125.6.

Let's delve deeper into Geojit Financials' Q1 results and see what's driving this bullish sentiment.

#1 Strong Financial Performance

In Q1 FY25 Geojit Financial Services demonstrated robust financial performance, driven by significant growth in its segment assets.

Remarkably, the company's total assets under maintenance have surpassed Rs one trillion mark. It reached Rs 1,033.6 billion (bn). This milestone is a testament to the trust the company commands in the market.

The financial services segment assets increased from Rs 13.2 bn to Rs 20.8 bn year-on-year (YoY). Similarly, the software services segment assets rose from Rs 1.8 bn to Rs 2.2 bn over the same period.

During Q1 the total income of the company saw a substantial rise, increasing from Rs 365.2 million (m) to Rs 406.8 m. This increase is attributed to higher revenue generation from core operations.

The company's revenue from operations grew significantly, supported by increased interest income and fees.

Interest income rose from Rs 23.2 m to Rs 38.8 m YoY, indicating a successful expansion in its lending and investment activities. Fees and commission income also saw a substantial increase from Rs 83.7 m to Rs 138.5 m, showcasing the company's ability to attract and retain a larger customer base.

Net profit of the company also saw an impressive surge. It grew from Rs 76.5 m to Rs 113.2 m YoY, indicating better cost management and efficiency.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) also showed strong growth, rising from Rs 204.8 m to Rs 251.6 m, showcasing improved operational performance.

#2 Announcement of Rights Issue

Geojit Financial Services has announced a fund-raising initiative through a rights issue, aiming to raise up to Rs 2 bn.

A rights issue is a method through which companies can raise additional capital by offering new shares to existing shareholders, typically at a discount to the current market price.

The specifics, including the record date for eligibility, will be disclosed in due course on the company's website and through stock exchange notifications.

The announcement of the rights issue positively impacted the company's share price. This is because investors generally perceive rights issues as a sign of future growth and expansion.

The additional funds are expected to bolster the company's capital base, enabling it to undertake new projects and strengthen its financial position.

What Next?

Geojit Financial Services is poised for growth, with several strategic initiatives lined up.

The company plans to transfer its securities broking business and related activities to Geojit Investments, a wholly owned subsidiary. This move aims to comply fully with applicable regulations and streamline operations.

Geojit it's expanding its market presence and enhancing customer experience through innovative financial products and services.

The company's strategy includes leveraging advanced technology platforms such as Flip, TraderX, Smartfolios, and FundsGenie, which are designed to cater to diverse customer needs and are scalable to meet evolving demands.

Furthermore, Geojit aims to deepen its partnerships and joint ventures in the GCC region, enhancing its service offerings for Non-Resident Indians (NRIs) and other international clients.

The company's emphasis on financial planning, asset management, and comprehensive investment solutions is expected to drive long-term growth and create substantial value for its stakeholders.

How Geojit Financial Services Share Price has Performed Recently

In the past five days, Geojit Financial Services share price has rallied 16.8%. In the last month, it is up 16.5%.

In 2024, so far its share price has surged 48% and its up 152.1% in the last one year.

The stock touched its 52-week high of Rs 125.6 on 16 July 2024 and a 52-week low of Rs 45 on 17 August 2023.

About Geojit Financial Services

Geojit Financial Services is an investment services company in India headquartered in Kochi, Kerala. It operates a network of offices across India and the middle east.

It was the first company in India to launch online-trading facilities, develop franchise models of sub-broking, form joint ventures in west Asia, and the first to begin commodity futures trading in pepper, cardamom, gold, and silver in India.

The product offerings of the company include equities and derivatives to mutual funds, life and general insurance, commodities derivatives, and portfolio management services.

BNP Paribas, C J George, founder and Managing Director of Geojit, Kerala State Industrial Development Corporation (KSIDC), and Rekha Rakesh Jhunjhunwala are the prominent shareholders of the company.

It has an extensive presence in the GCC region via joint ventures and partnerships: Barjeel Geojit Financial Services LLC in UAE, BBK Geojit Business Consultancy and Information (KSCC) in Kuwait, and QBG Geojit Securities LLC in Oman.

The company also has presence in Bahrain through a business partnership with Bank of Bahrain and Kuwait.

To know more about the company, check out its factsheet and quarterly results.

You can also compare the company with its peers:

Geojit Financial Services vs Prime Securities

Geojit Financial Services vs Monarch Networth Capital

Geojit Financial Services vs Amrapali Capital

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...