Financial Technologies Q2 net profit drops by over 61 per cent

Financial Technologies (India) Ltd on Saturday posted an over 61 per cent drop in standalone net profit at Rs 27.01 crore in the second quarter after making a provision for its investment in embattled subsidiary National Spot Exchange Ltd (NSEL).

The Jignesh Shah-led FTIL had reported a profit of Rs 69.55 crore in the corresponding quarter a year ago, it said in a regulatory filing.

FTIL said that following developments at NSEL, it made a provision towards "dimunition other than temporary in value of long term investment of Rs 44.99 crore for its investment in NSEL".

The group was plunged into a crisis in August after the government asked NSEL to halt trading in some contracts due to violation of norms. The exchange is grappling with the settlement of dues worth Rs 5,600 crore.

"Profit has come down mainly because of the value of long-term investment made by FTIL in NSEL has come down after the payment crisis," an analyst said.

Income from operations fell to Rs 92.61 crore in the quarter ended September 31 from Rs 124.98 crore as revenue from its software business declined. Expenses rose to Rs 68.16 crore from Rs 55.28 crore a year earlier.

FTIL, the holding company for the Shah-led group, also operates a network of exchanges globally. In India, it has set up the Multi Commodity Exchange of India Ltd, the MCX Stock Exchange Ltd and NSEL.

The company said it gave NSEL a one-time bridge loan of Rs 179.4 crore to pay dues to small investors. A total of 212.6 crore of loans, including interest, has to be recovered from NSEL.

The company declared a second interim dividend of Rs 2 per share, payment of which will be made on December 20.