Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Investor Presentation (March 2014)
39 slides from Mahindra & Mahindra Financial Services's investor presentation, March 2014
Slide 1: Mahindra & Mahindra Financial Services Limited Analyst Meet March 2014
Mahindra & Mahindra Financial Services Limited Analyst Meet MARCH - 2014 Corporate Office: Regd. Office: Mahindra Towers, 4th Floor, Gateway Building, Apollo Bunder, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 001 India Mumbai 400 018 India Tel: +91 22 2289 5500 Fax: +91 22 2287 5485 Tel: +91 22 66526
Slide 2: Company overview
Company overview Transforming rural lives across the country 2
Slide 3: Background
Background • Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 631 billion)*, one of India’s leading tractor and utility vehicle manufacturers • MMFSL (Mcap: Rs 139 billion)* is one of India’s leading non-banking finance companies foc
Slide 4: MMFSL Group structure
MMFSL Group structure Mahindra & Mahindra Limited 51.20% Mahindra & Mahindra Financial Services Limited (1) 85% 87.5%(2) 49% 100% 100%(3) Mahindra Insurance Mahindra Rural Mahindra Finance Mahindra Business & Mahindra Asset Brokers Limited Housing Finance USA LLC (Joint Consulting Services Managemen
Slide 5: Our Journey Thus Far
Our Journey Thus Far Crossed 3 million cumulative customer contracts Stake sale in MIBL to Inclusion resources pvt. Ltd. QIP Issue of Rs. 8.67 Bn FY 14 Maiden QIP Issue of Rs.4.26 Bn FY 13 JV with Rabobank subsidiary for tractor financing in USA FY 11 Received 12.5% equity participation Commenced ho
Slide 6: Shareholding pattern
Shareholding pattern (as on March 31, 2014) Key Shareholders Cartica Capital Ltd Non ESOP Mutual Institutions Trust Wasatch Emerging Markets Small Cap Fund Funds & 5.1% 0.9% DII TIAA-CREF Institutional mutual funds 1.3% Mahindra JP Morgan SICAV Investment Company & Mahindra Morgan Stanley
Slide 7: Industry overview
Industry overview Transforming rural lives across the country 7
Slide 8: Automobile Finance Market to Grow by 16-18% over the next 5 years
Automobile Finance Market to Grow by 16-18% over the next 5 years Growth in New Vehicle Finance Disbursements CAGR FY13- (Rs. billion) FY11E FY12E FY13E FY14P FY18P FY18P Cars 466 503 508 471 1007 14-16% Utility Vehicles 155 180 251 239 605 18-20% Commercial Vehicles 402 471 414 309 900 16-18% Two-W
Slide 9: Auto Industry Long term growth potential
Auto Industry Long term growth potential Strong prospects in the long-term. FY03-08 FY08-13 FY14P FY13-18P Growth to be driven by increase in income of households and higher CAGR (%) CAGR (%) (%) CAGR (%) passenger vehicle penetration Cars and Uvs 17 12 (6-8) 12-14 Small Cars are expected to rec
Slide 10: Auto Industry Volume
Auto Industry Volume Domestic Sales FY14 FY13 FY12 (Volume in „000) (Nos.) (Nos.) (Nos.) Passenger Vehicles (PVs) Passenger Cars / Vans 1,785 1,874 2,030 UVs 716 791 600 Commercial Vehicles (CVs) M&HCVs 201 269 349 LCVs 432 524 460 Three Wheelers 480 538 513 Source: Crisil 10
Slide 11: Overall Demand Drivers
Overall Demand Drivers Increase in affordability Growth in Addressable Market Entry of New Players and New Model Launches Increase in dealerships and access to Finance Reduction in holding period, which increases the demand for second vehicles Growth in Economic Activity Infrastructure
Slide 12: Business Strategy
Business Strategy Transforming rural lives across the country 12
Slide 13: Business Strategy
Business Strategy Grow in rural and semi urban markets for vehicle and automobile financing Expand Branch Network Leverage existing customers base through Direct Marketing Initiatives Diversify Product Portfolio Broad base Liability Mix Continuing to attract, train and retain talented employees Effe
Slide 14: Extensive branch network
Extensive branch network MMFSL has an extensive branch network with presence in 25 states and 4 union territories in India through 893 offices as of March 31, 2014 – Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of JK 5 HP 15 24 PB UC 10 893 22 HA
Slide 15: Diversified Product Portfolio
Diversified Product Portfolio Loans for auto and utility vehicles, tractors, cars, commercial Vehicle Financing vehicles and construction equipments Pre-Owned Loans for pre-owned cars, multi-utility vehicles, tractors and Vehicles commercial vehicles Loans for varied purposes like project fina
Slide 16: Break up of estimated value of Assets Financed
Break up of estimated value of Assets Financed Year ended Year ended Year ended Asset Class March–14 March–13 March–12 Auto/ Utility vehicles 32% 31% 26% Tractors 20% 19% 20% Cars 22% 24% 26% Commercial vehicles and 11% 14% 17% Construction equipments Pre-owned vehicles and others 15% 12% 11% 16
Slide 17: Break up of AUM
Break up of AUM As on As on Asset Class March – 14 March – 13 Auto/ Utility vehicles 29% 28% Tractors 19% 19% Cars 24% 24% Commercial vehicles and Construction 15% 17% equipments Pre-owned vehicles and others 13% 12% 1. Approximate percentages 2. Dealer Advance/Trade Advance regrouped in Preowned ve
Slide 18: Broad based Liability Mix
Broad based Liability Mix MMFSL believes that its credit rating and strong brand equity enable it to borrow funds at competitive rates Total consortium size of Rs.15.3 Bn comprising several banks Credit Rating CRISIL Outlook Fixed Deposit programme FAAA Stable Short term debt A1+ Stable Long ter
Slide 19: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives Training programs for employees on regular All our offices are connected to the centralised basis data centre in Mumbai through Lease line/HHD 5 days induction program on product knowledge, T
Slide 20: Financial Information
Financial Information Transforming rural lives across the country 20
Slide 21: Key Financials
Key Financials Q4FY14 Vs Q4FY13 (Figures on standalone basis) Total income Profit after Tax Value of Asset Financed Rs 13,706 mn Rs 3,107 mn Rs 58,821 mn 22% 7% 11% Rs 11,256 mn Rs 3,338 mn Rs 66,449 mn FY14 Vs FY13 (Figures on standalone basis) Total income Profit after Tax Value of Asset Financed
Slide 22: Growth Trajectory
Growth Trajectory Figures on standalone basis Loan Book (Rs. Bn) Revenues (Rs. Bn) 296.17 33% 49.53 30% 240.38 38.95 174.98 27.95 FY12 FY13 FY14 FY12 FY13 FY14 Profit after Tax (1) (Rs. Bn) Book Value Per Share (2) (Rs.) 20% 89.6 8.83 8.87 37% 6.20 56.7 47.9 FY12 FY13 FY14 FY12 FY13 FY14 Note : 1 PA
Slide 23: Financial Performance
Financial Performance Figures on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 35.4% 3.9% 4.0% 3.2% 33.0% 32.6% FY12 FY13 FY14 FY12 FY13 FY14 Return on Net Worth (RONW) (3) (%) Asset Quality 22.8% 23.5% Gross NPA Net NPA 4.4% 4.0% 18.6% 3.0% 1.9% 0.6% 0.7% FY12 FY13 FY
Slide 24: Standalone Profit & Loss Statement
Standalone Profit & Loss Statement Year ended Year ended Year ended Particulars (Rs. in Million) March – 14 March – 13 March - 12 Revenue from operations 49,216 38,567 27,681 Other income 314 380 265 Total Revenue 49,530 38,947 27,946 Expenses: Employee benefits expense 2,973 2,234 1,998 Finance cos
Slide 25: Standalone Balance Sheet
Standalone Balance Sheet As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2014 2013 2012 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,127 1,126 1,027 b) Reserves and Surplus 49,815 43,420 28,483 Shareholders' funds 50,942 44,546 29,510 Non-current liabilities a) L
Slide 26: Standalone Balance Sheet (Cont'd)
Standalone Balance Sheet (Cont’d) As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2014 2013 2012 ASSETS Non-current assets a) Fixed Assets 1,195 1,068 989 b) Non-current investments 5,263 3,451 2,131 c) Deferred tax assets (Net) 3,151 2,382 2,012 d) Long-term loans and advances 1
Slide 27: Key Subsidiaries
Key Subsidiaries Transforming rural lives across the country 27
Slide 28: Mahindra Rural Housing Finance
Mahindra Rural Housing Finance Year ended Year ended Year ended Particulars (Rs. million) March – 14 March – 13 March – 12 Loans disbursed 6,306 4,329 2,668 No. of Customer Contracts (Nos) 56,868 61,332 33,172 Outstanding loan book 13,550 8,795 5,352 Total income 2,125 1,404 857 PBT 368 274 161 PAT
Slide 29: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Year ended Year ended Particulars (Rs. million) March – 14 March – 13 March – 12 Total income 1,112 863 465 Net premium 7,384 5,538 4,138 PBT 638 512 201 PAT 420 344 135 No. of Policies for the Period (nos.) 1,068,577 802,829 703,730 No. of employees (no
Slide 30: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Year ended Year ended Year ended Particulars (Rs. in Million) March – 14 March - 13 March - 12 Revenue from operations 52,753 40,950 28,894 Other income 253 179 209 Total Revenue 53,006 41,129 29,103 Expenses: Employee benefits expense 4,945 3,793 3,127 Finance c
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2014 2013 2012 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,127 1,126 1,027 b) Reserves and Surplus 51,810 44,670 29,284 Shareholders' funds 52,937 45,796 30,311 Minority Interest 365 237
Slide 32: Consolidated Balance Sheet (Cont'd)
Consolidated Balance Sheet (Cont’d) As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2014 2013 2012 ASSETS Non-current assets a) Fixed Assets 1,287 1,137 1,028 b) Non-current investments 3,790 2,417 1,472 c) Deferred tax assets (Net) 3,254 2,421 2,033 d) Long-term loans and advanc
Slide 33: Summary & Key Ratios
Summary & Key Ratios Figures on standalone basis Year ended Year ended Year ended Particulars March – 14 March – 13 March – 12 RONW (Avg. Net Worth) 18.6% 23.5% 22.8% Debt / Equity 4.70:1 4.24:1 4.74:1 Capital Adequacy 18.0% 19.7% 18.0% Tier I 15.5% 17.0% 15.1% Tier II 2.5% 2.7% 2.9% EPS (Basic) (Rs
Slide 34: Spread Analysis
Spread Analysis Figures on standalone basis Year ended Year ended Year ended March – 14 March – 13 March – 12 Total Income / Average Assets 17.7% 18.0% 17.7% Interest / Average Assets 7.8% 7.4% 7.0% Gross Spread 9.9% 10.6% 10.7% Overheads / Average Assets 3.3% 3.5% 3.8% Write offs & NPA provisions /
Slide 35: NPA Analysis
NPA Analysis Figures on standalone basis Particulars (Rs. million) March – 14 March – 13 March – 12 Gross Non - Performing Assets 14,057 7,630 5,543 Less: NPA Provisions 8,301 5,030 4,324 Net Non – Performing Assets 5,756 2,600 1,219 Total Assets (Incl. NPA Provision) 318,622 256,067 186,634 Gross N
Slide 36: Key Risk Management Practices
Key Risk Management Practices Transforming rural lives across the country 36
Slide 37: Conservative Risk Management Policies
Conservative Risk Management Policies Provisioning Norms Duration (months) RBI Norms Duration (months) MMFSL 6 and <= 18 10% > 5 and <= 11 10% > 18 and <= 30 20% > 11 and <= 24 50% > 30 and <= 54 30% > 24 months 100% > 54 months 50% Key Risks & Management Strategies Key Risks Management Strategies
Slide 38: Disclaimer
Disclaimer This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Mahindra & Mahindra Financial Services Limited (the “Company”), nor shall it or any part of it or
Slide 39: Thank You
Thank You Transforming rural lives across the country 39
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