Aditya Birla Money : Annual Report for the Financial Year 2022-23

BUSINESS SNAPSHOT

FY'23 - HIGHLIGHTS

OUR OFFERINGS - 3600

SOLUTIONS FOR WEALTH CREATION

Dear Members,

The fi nancial year 2022-23 began on a challenging note, even as the global economy hoping to recover aer two years of the pandemic, followed by Russia Ukraine confl ict. The ongoing confl ict in Ukraine signifi cantly impacted the world economy in many ways, including energy prices, trade, investments, geopolitical tensions, and humanitarian impact. Amid the war, coupled with other factors, the three largest economies - United States, European Union and China almost stalled on economic growth, with Europe going almost to the brink of recession.

On the other hand, India managed to clock economic growth above 7% for FY23, as per the RBI. While services led the growth,

CHAIRMAN'S MESSAGE TO

SHAREHOLDERS

manufacturing also made a comeback when most parts of the count witnessed the liing of Covid restrictions. Aided by economic growth, the Government saw its tax mop-up swell by 12% on a YoY basis. As a result, India's Tax-GDP ratio stood around 11%, a sharp rise from the 8% levels during the pre-GST era. Overall, the Indian economy remained resilient throughout FY23, despite numerous domestic and global headwinds. Most sectoral parameters crossed their pre-pandemic levels. While pandemic scars seem to be healing, the disruption caused by Russia- Ukraine has pushed up commodity prices leading to a rise in infl ation, necessitating policy action and a possible downward ra in growth. Stubborn infl ation has led central banks going in for consistent interest rate hikes. Besides, higher prices

of commodities have impacted consumer demand, impacting the profi tability of the corporates.

One of the most signifi cant pain points of most large global economies was the rising interest rates in the wake of decadal high infl ation. Moreover, tightening moneta policy is expected to drag on economic activity and employment in most major economies in 2023.

India wasn't the only economy that suffered the double shocks of war and infl ation, and the entire world GDP saw signifi cant pressures, at least in the fi rst half of the year. Accordingly, world GDP is forecasted to have grown between 1.6% - 1.8% as per the latest World Bank report. Infl ation, which was at the heart of the economic woes, moderated through the year, but a sustained decline to central bank targets does not seem imminent. For instance, infl ation in the US has moderated from north of 9% to 5% but is still way above the 2% target of the US Fed. Consequently, the US central bank's policy rate is now in a target range of 4.75% - 5.00%, the highest level in 15 years, and more notably, it was near zero in early 2022.

As far as China was concerned, it was under strict lockdowns in many parts of the count because of its zero Covid policy for most of the pandemic. However, it disbanded its zero Covid policy at the start of 2023. China's growth will be under the spotlight as it reopens aer ending most of its strict Covid restrictions that were in place for nearly three years. As a result, it grew at a multi-decade low (ex 2020) of 3% in 2022.

Refl ecting on the resilience of the Indian economy, we can say that the Indian equity markets have managed to hold the fort with relatively minor damage than many large markets (both developed & emerging). For the full year, Niy gave a return of -0.6%, with midcaps gaining marginally by 1.15% with mixed performances elsewhere in the global markets (US -9.3%, China +0.6%, Europe +10.6%). The Indian market's resilience necessitates notice as it came in the face of the ongoing Russia- Ukraine confl ict, aggressive moneta policy, high infl ation rate,

porate group crisis.

markets, FIIs were net crore, while DIIs were led by sustained infl ows

.

have become a formidable

This has been a signifi cant

owever, for the year, the

ip to 25mn vs 35mn in FY

but fl attish markets. As

ination of price and time to the bourses gradually.

NSE dropped around 20%

in the F&O trading by

and low transaction costs segment. This impacted

volumes in the cash segment, with monthly cash segment ADTO of NSE clocking Rs.53,434cr, which was a 20% drop on a YoY basis. However, the derivatives segment ADTO jumped by a staggering 125% in FY23 to ₹153.5 Lakh crore.

Regarding the bond market, India's 10Yr Yield averaged around 7.3% during the year, refl ecting rate increases by the RBI. However, the entire year saw a continued hardening of the yields due to heightened infl ationa concerns and the RBI sucking out excess liquidity from the system.

The outlook for global economic front is uncertain in FY24. While the war continues, keeping the supply side tight, the global rate-tightening cycle is ending. While infl ation's drop may become slower, it will likely provide some solace towards the end of the year. However, the impact of ravaging infl ation and the higher trajecto of rates must be gauged and remains one of the most critical uncertainity. As far as India is concerned, we are expected to grow by 7% as per various government agencies' estimates.

For the year, the Company recorded Total Revenue of Rs 278.79 Crs in FY 2022-23 compared to Rs 233.93 Crs FY 2021-22, an increase of 19.20% YoY led by higher interest income. The Profi t Before Tax stood at ₹46.68 Crore for FY 2022-23 compared to ₹35.68 Crore in FY 2021-22, an increase of 30.83% YoY. The Company constantly strive for product innovations to elevate customer experience and promote customer delight. The Company launched the new trading app in Sep '22 for active traders with 2 lakhs + downloads for seamless and faster execution and interactive charting tools & analysis. Also, we launched Integrated third-party adviso platforms offering DIY assistance for customers to make informed decisions based on benchmark model portfolios for their equity-led wealth creation journey.

The Company also ventured in to, "FPD (Financial Product Distribution)", in Oct-22 to distribute all fi nancial products targeting mass and affluent customers.

The Company continues to empower its customers with DIY services by adding 10 more services to the WhatsApp self-service platform. It also continued its efforts to educate customers on the various aspects of investing/ trading vide research-led webinars and the creation of instructional videos.

In this era of higher interest rates, global macroeconomic uncertainty and constant indust dynamics, the Company is committed to being a leader and role model in all facets of its business by striving to be the best in class.

As we advance, the three key factors that shall drive the Company's growth and ensure sustainability are digital transformation, diversifying revenue streams and a wider reach and customer base.

Yours Sincerely,

GOPI KRISHNA TULSIAN

Chairman