GeojitBNP vs IndBullSec

Geojit BNP Paribas Financial Services vs Indiabulls Securities
BSE: 532285 NSE: GEOJITBNPP BSE: 532960 NSE: IBSEC

Balance sheet point of view (2009-10)
India Bulls Securities is having high capital gearing.
from shareholder point of view IBSEC (FV Rs 2) as against the book value of 9.56 has borrowed rs 13.50 and invested the same as
NFA 3.08
NCA 2.25
Invst 18.00
whereas GBNPPFSL (geojit bnpparibas financial services which is now owned by BNP) has a book value of Rs 14.03 (Fv re1) and has nil borrowings
investing the same as
NFA 1.78
NCA 5.56
Invst 6.69 (majority in subsidiary companies)

In short IBSec will give high returns when the main business (broking) and return from investment portfolio is greater than amount required to service the borrowings.
Geojit BNP wil give high returns when the main business is performing well

Both perform well in bullish market. IBSEC will have high beta and will outsmart the Index when in bullish as well as bearish market ie., more joys and more pains

Profit and Loss Account review (2009-10) support my Balance sheet point of view

Particulars GBNPP IBSEC
(per share data in Rs)
TIncome 12.75 14.99
OPBIDT 3.09 5.50
NP 2.54 2.66

OPM (%) 24.2 36.6
NPM (%) 19.9 17.8

In short IBSec will gave high returns Operating profit due to financial gearing however as the return was not enough to outsmart the service the borrowings.
The net returns were lesser than Geojit BNP

Geojit available at 32.05 is having a PE mutiple of 12.60
IBSec available at 26.05 is having a PE mutiple of 9.79