Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q2 FY2018 Earnings Presentation
53 slides from Muthoot Finance's earnings presentation, September 2017
Slide 1: Financial Results Q2 FY 2018
Financial Results Q2 FY 2018 September 2017 MUTHOOT FINANCE LIMITED
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position,
Slide 3: Muthoot Finance: Driving Inclusive Growth
MUTHOOT FINANCE: DRIVING INCLUSIVE GROWTH o India’s largest gold financing company (by loan portfolio) o Trusted pan-India brand in the gold loans sector; revolutionised India’s gold banking o Our intervention has empowered millions of people across the social pyramid Multiple service offerings CORE
Slide 4: MFIN - A Glimpse
MFIN - A GLIMPSE 29 152 tonnes States/Union territory presence Gold jewellery kept as security 4,200+ 200,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 22,000+ 130,000+ Team members Customers served every day ` 276,080 mn Loan Assets Under Management (
Slide 5: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 74% stake 23.63 2.51 NSE Ticker MUTHOOTFIN (%) Shareholding as on September 30, 2017 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on September 30, 2017) ` 189,754 million 73.86 4
Slide 6: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 Dividend (% )* 60 60 60 45 60 First Interim Dividend (%) 60 40 40 30 - - Second Interim Dividend (%) - 20 20 - Final Dividend (%) - - 20 10 45 Dividend Payout Ratio (%) 20.30 29.50 35.36 28.59 1
Slide 7: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4287 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 13 6 Himachal Pradesh 5 Chandigarh Punjab 8 175 62 East West Uttarakhand 21 Haryana Delhi 15 126 219 North South Rajasthan Uttar Pradesh Assam 132 19 155 Bihar 17 (
Slide 8: Digital Initiatives
DIGITAL INITIATIVES Digital convenience for new gen & Millennium Customer acquisition Aadhaar based Electronic KYC Direct Credit Facility • Biometric KYC verification - Convenience • Loan proceeds credited to bank • No further KYC documents –Paperless account • Aadhar • NEFT/RTGS/IMPS mode of bank •
Slide 9: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 10% of our active Gold loan Customers are transacting Online Muthoot Online iMuthoot App Mobile App • Our online services has now been re-branded to • Launched in Nov’16 has about 2.50 lakhs Muthoot Online, from WebPay earlier. downloads. • Customers can
Slide 10: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth Sep-17 Jun-17 Mar-17 Sep-16 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Share Capital 3,996 3,995 3,995 3,991 0 0 Reserves & Surplus 69,248 64,688 61,169 57,901 20 7 Total 73,244 68,683 65,164 61,892 18 7
Slide 11: Assets
ASSETS Core focus continues to be gold loan Gross Loan Assets under management Sep-17 Jun-17 Mar-17 Sep-16 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross loan assets under 276,080 278,517 272,785 274,564 1 (1) management Break-up of Gross Loan Assets
Slide 12: Liabilities
LIABILITIES Stable sources of funding Sep-17 Jun-17 Mar-17 Sep-16 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures 16,288 21,058 25,190 32,692 (50) (23) (Muthoot Gold Bonds) Secured Non-Convertible 49,909 55,359 37,098 32,69
Slide 13: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY YoY QoQ H1 FY H1 FY Q2 FY Q2 FY Q1 FY Growth Growth Growth FY 2017 2018 2017 2018 2017 2018 (%) (%) (%) INCOME Interest Income 30,143 26,278 15 16,385 13,526 21 13,758 19 56,546 Other Income 542 592 (8) 314 336 (7) 228 38 921 Total 30,685 2
Slide 14: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in billion) 300 274 272 278 275 260 270 244 243 233 240 216 210 180 157 150 120 90 73 60 33 30 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Mar-17 Jun-17 Sep-17 13
Slide 15: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 152 152 160 150 149 142 137 134 140 131 118 120 112 100 80 66 60 39 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Mar-17 Jun-17 Sep-17 14
Slide 16: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Mar-17 Jun-17 Sep-17 East 1 2 3 4 5 6 6 7 7 7 7 8 West 5 8 8 10 11 13 15 17 18 18 19 19 North 14 15 15 17 19 22 22 22 23 23 23
Slide 17: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 66.39 63.69 63.32 64.82 64.23 63.20 65 57.55 56.93 55.01 55 45.74 50.63 45 33.50 35 25 15 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Mar-17 Jun-17 Sep-17 16
Slide 18: Yield on Loan Assets and NIM
YIELD ON LOAN ASSETS AND NIM Yearly (%) Quarterly (%) 26.00 26.00 24.00 24.00 23.59 21.67 22.34 21.43 22.00 22.00 21.87 20.27 20.29 19.72 20.29 21.66 19.31 20.06 20.00 20.00 19.94 19.72 16.55 18.00 18.00 14.46 16.00 16.00 12.74 14.00 14.00 11.39 12.30 11.41 11.69 11.07 11.17 11.38 12.00 10.81 12.00
Slide 19: Interest Spread
INTEREST SPREAD Yearly (%) Quarterly (%) 26 26.00 24 24.00 23.59 21.67 22.34 21.66 22 21.43 21.87 22.00 19.94 19.72 20.27 19.72 20 19.31 20.29 20.29 20.00 20.06 18 18.00 14.88 16 16.00 12.78 14 14.00 12.20 12.42 10.73 11.88 10.85 10.77 11.88 11.53 10.85 12 10.93 10.80 10.90 9.33 9.52 10.14 12.00 9.0
Slide 20: Return on Average Loan Assets
RETURN ON AVERAGE LOAN ASSETS Attractive returns over the years Yearly (%) Quarterly (%) 7.00 7.00 6.50 6.54 6.50 6.00 6.00 5.84 5.50 5.50 5.00 5.12 4.40 4.47 4.21 5.00 4.50 4.24 4.45 4.05 4.50 4.38 4.00 3.49 4.00 3.50 3.22 3.03 3.32 3.50 3.00 3.00 2.50 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-
Slide 21: Non-Performing Assets & Bad Debts
NON-PERFORMING ASSETS & BAD DEBTS Non-Performing Assets (` in million) Sep-17 Jun-17 Mar-17 Sep-16 Gross Non-Performing Assets 12,593 6,279 5,621 6,016 Provision For Non-Performing Assets 1,571 1,019 1,019 1,019 Net Non-Performing Assets 11,021 5,260 4,602 4,997 % of Gross NPA on Gross Loan Assets 4
Slide 22: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile (%) 3 Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 16,288 mn (7%) 7 15 Secured Non-Convertible Debentures – Listed – ` 49,909 mn (22%) 2 22 Borrowings from Banks/Fis - ` 103,695 mn (46%) 5 Subordinated Debt – ` 11,026 mn (5%) Sub
Slide 23: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Very strong degree of safety with regard to timely CRISIL 40,000 CRISIL A1+ payment of financial obligation and carry lowest credit risk ICRA 40,000 ICRA A1+ Very
Slide 24: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly Quarterly 60,000 56,546 60,000 53,641 50,000 49,077 48,130 50,000 45,280 42,703 40,000 40,000 30,143 26,278 30,000 30,000 22,983 20,000 16,385 20,000 13,526 13,758 10,775 10,000 10,000 6,062 0 0 Q2 FY 2018 Q2 FY 2017 Q1 FY 2018 H1 FY 201
Slide 25: Operating Expenses to Average Loan Assets
OPERATING EXPENSES TO AVERAGE LOAN ASSETS Operational efficiency over the years Yearly (%) Quarterly (%) 8.50 8.50 8.00 8.00 7.50 7.50 7.00 7.00 6.50 6.50 6.02 6.00 6.00 5.45 5.63 5.50 5.50 5.25 5.01 5.10 5.00 4.72 5.00 4.85 4.80 4.46 4.28 4.44 4.50 4.50 4.02 4.08 4.00 4.00 3.50 3.50 Mar-09 Mar-10 M
Slide 26: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (` in Millions) Quarterly (` in Million) Q2 FY Q1 FY Q1 FY H1 FY H1 FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 2018 2017 2018 2018 2017 Personnel Expenses 7,280 6,418 6,304 5,917 5,453 4,145 2,209 1,169 1,884 1,896 1,773 3,657 3,745 Rent 1,808 1,
Slide 27: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (%) Quarterly (%) Q2 FY Q2 FY Q1 FY H1 FY H1 FY Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 2018 2017 2018 2018 2017 Personnel Expenses 48 49 53 52 52 49 43 43 44 57 56 49 58 Rent 12 13 14 14 12 12 12 11 10 14 16 12 14 Advertisement 3 5 5 6 5 10 13 1
Slide 28: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) Q2 FY Q2 FY Q1 FY H1 FY H1 FY (Based on Income) Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 2018 2017 2018 2018 2017 Interest expense to 39.92 46.31 48.71 53.08 52.34 52.10 44.83 43.49 29.28 42.83 38.08 33.29 42.83 Gross Income Selling, gener
Slide 29: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Average Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Q2 FY Q2 FY Q1 FY H1 FY H1 FY Loan Assets) 2018 2017 2018 2018 2017 Interest income to avg. 21.43 19.72 19.30 20.27 21.66 22.34 19.72 19.94 23.59 20.29 20.06 21.87 20.29 loan asset
Slide 30: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly PBT PAT Quarterly PBT PAT 20,000 19,210 20,000 18,000 18,000 16,000 15,114 16,000 14,000 13,312 13,168 14,000 13,045 11,936 11,798 12,000 10,279 12,000 10,042 10,000 10,000 7,612 8,052 8,861 8,000 8,000 7,527 8,92
Slide 31: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 80,000 73,244 68,683 70,000 65,164 61,892 60,000 56,192 50,835 50,000 42,646 37,356 40,000 29,257 30,000 20,000 13,344 10,000 5,845 3,712 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Mar-16 Sep-16 Mar-17 Jun
Slide 32: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly (%) Quarterly (%) 55 30 48.10 51.52 50 25.60 45 25 23.27 20.98 41.90 19.65 40 19.21 20 35 33.90 30.15 15 30 25 19.44 10 20 19.50 15 5 14.35 15.13 10 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 0 Q2
Slide 33: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Sep-17 Jun-17 Mar-17 Sep-16 Capital Adequacy Ratio 26.49 25.61 24.88 23.67 Tier-I 23.64 22.65 21.78 20.95 Tier-II 2.85 2.96 3.10 2.72 32
Slide 34: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside Q2 FY 2018 Q2 FY 2017 Q1 FY 2018 H1 FY 2018 H1 FY 2017 FY 2017 Earnings per share (`) - Basic 11.36 7.44 8.79 20.15 14.21 29.56 - Diluted 11.27 7.38 8.76 20.03 14.09 29.45 Sep-17 Jun-17 Mar-17 Sep-16 Book Value per share
Slide 35: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Sep-17 Jun-17 Mar-17 Sep-16 Outside Liabilities 251,228 249,141 241,966 243,582 Cash & Bank Balances 19,649 21,063 15,343 16,181 Tangible Networth 73,243 68,626 65,104 61,839 Capital Gearing 3.16 3.32 3.48 3.68 34
Slide 36: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28000 25,351 24,881 25,012 22,882 23,961 24,205 23,391 22,781 22,756 23000 18000 16,688 13000 9,745 8000 5,979 3000 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Mar-17 Jun-17
Slide 37: Our Subsidiary
OUR SUBSIDIARY & Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company 36
Slide 38: Asia Asset Finance PLC – An Overview
ASIA ASSET FINANCE PLC – AN OVERVIEW Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance on December 31, 2014 . As on Sep 30, 2017, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio stands a
Slide 39: Products
PRODUCTS o Fixed Deposits o Mortgage Loans o Leasing o Factoring o Business Loan o Short Term Loans o Personal Loan o Micro Finance o Group Personal Loan o Loan against Gold Jewellery o Corporate Loans 38
Slide 40: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 39
Slide 41: Key Financial Parameters
Key Financial Parameters (LKR in millions) Particulars H1 FY 2018 Q2 FY 2018 Q1 FY 2018 Q2 FY 2017 FY 2017 LKR / INR 0.42313 0.42313 0.41706 0.44498 0.42113 Number of branches 17 17 17 15 15 Number of Employees 481 481 449 410 448 Loan AUM (LKR) 9,494 9,494 9,082 8,053 8,662 Capital Adequacy Ratio (
Slide 42: Our Subsidiary
OUR SUBSIDIARY Muthoot Homefin Muthoot Finance 41
Slide 43: Muthoot Homefin – An Overview
MUTHOOT HOMEFIN – AN OVERVIEW Muthoot Homefin (India) Limited is a Housing Finance Company registered with The National Housing Bank (NHB). It became a wholly owned subsidiary of Muthoot Finance Ltd in Aug’17. MHIL focuses on extending affordable housing finance and targets customers in Economically
Slide 44: Business Performance
Business Performance (` in millions) Particulars H1 FY 2018 Q2 FY 2018 Q1 FY 2018 Q2 FY 2017 FY 2017 Number of branches 14 14 11 8 9 Number of Sales Offices 110 110 110 39 110 Number of Employees 167 167 135 77 111 Loan AUM (`) 8,296 8,296 5,957 946 4,408 Capital Adequacy Ratio (%) 44 44 27 115 36 T
Slide 45: Business Performance
Business Performance Particulars Q2 FY 2018 Q1 FY 2018 Q2 FY 2017 FY 2017 Disbursement (`) 2,461 1,584 513 4,158 Borrowings (`) 6,346 4,850 91 2,178 Debt Equity Ratio (%) 3.23 5.27 0.11 2.47 Yield on Advances (%) 12.23 12.67 11.94 12.74 Interest Spread (%) 3.70 3.55 2.25 3.31 NIM (%) 5.62 6.38 10.81
Slide 46: Financial Highlights
• Disbursements in H1 FY 2018: Rs 4,053 mn. Loan Book as on Sep 30, 2017: Rs 8,296 mn • Average Ticket Size in H1 FY 2018: Rs.1.0 mn Financial • Business Presence: Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Kerala, Presence in 29 locations • ROA for Q2 FY 2018: 2.72%, ROE for Q2 FY 2018: 12
Slide 47: Our Subsidiary
OUR SUBSIDIARY 46
Slide 48: Muthoot Insurance – An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in Sep 2016. MIBPL is an unlisted private limited company holding a licence to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various ins
Slide 49: Key Business Parameters and Key Financial Parameters
Key Business Parameters (` in millions) Particulars H1 FY 2018 Q2 FY 2018 Q1 FY 2018 Q2 FY 2017 FY 2017 Premium Collection (` ) 37 216 157 189 697 Number of Policies 432,729 216,428 216,301 139,008 566,282 Key Financial Parameters (` in millions) H1 FY 2018 Q2 FY 2018 Q1 FY 2018 Q2 FY 2017 FY 2017 T
Slide 50: Our Subsidiary: Belstar Investment and Finance
&) OU R SU BS IDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 49
Slide 51: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As of Sep 2017 , Muthoot Finance holds 64.60% in BIFPL . BIFPL was incorporated on January 1988 at Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as “NBFC-MFI” by RBI eff
Slide 52: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars H1 FY 2018 Q2 FY 2018 Q1 FY 2018 Q2 FY 2017 FY 2017 Number of branches 198 198 172 103 155 Number of Employees 1,383 1,383 1,240 828 1,093 Gross Loan AUM (`) 7,968 7,968 6,652 3,986 5,759 Capital Adequacy Ratio (%) 17 17 20 21 17 Total Revenue (`)
Slide 53: Registered Office
REGISTERED OFFICE 2nd Floor, Muthoot Chambers Opposite Saritha Theatre Complex Banerji Road, Kochi Kerala – 682 018. India Tel: (91484) 2394712 Fax: (91484) 2396506 CIN: L65910KL1997PLC011300 RBI Reg No: N 16.00167 EMAIL (Individual & Corporate Investors) investors@muthootfinance.com (Institutional