Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q3 FY2023 Earnings Presentation
54 slides from Mahindra & Mahindra Financial Services's earnings presentation, Feb 3, 2023
Slide 1: Exchange filing cover letter for earnings presentation
3rd February 2023 To, BSE Limited, (Security Code: 532720) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001 National Stock Exchange of India Ltd., (Symbol: M&MFIN) Exchange Plaza, 5th Floor, Plot No. C/1, “G” Block, Bandra - Kurla Complex, Bandra (East), Mumbai – 400 051 Dear Sir/Mada
Slide 2: Quarter Result Update December 2022
Mahindra & Mahindra Financial Services Limited Quarter Result Update December - 2022 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 Tel: +91 22 6652 6000 Fax
Slide 3: Transforming rural lives across the country
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 4: Executive summary (1/2)
Executive summary (1/2) Key Highlights ▪ Disbursement of ₹ 14,467 Cr. for the quarter, growth of 80% YoY ▪ Strong Asset Growth with Loan Assets* at ₹ 77,344 Cr.; YoY growth of 21.0%; Sequential growth of 4.8% ▪ Continuing trend of asset quality improvement with sequential reduction in GS 3 (GS 3 at
Slide 5: Executive summary (2/2)
Executive summary (2/2) Asset Quality ▪ Provision coverage maintained @ 59.0% in Dec-22 ▪ Continued with a healthy Collection Efficiency at 95% during Q3FY23 in line with Q3FY22 IRACP migration ▪ As of Q3FY23, GNPA (IRACP) was higher by approximately ₹ 1,277 crores in comparison to GS 3 (IND-AS) ▪ D
Slide 6: Business Strength
Business Strength Capital Adequacy Gross Stage-3 Stage 3 - Coverage Ratio 27.8% 11.3% 58.1% 58.2% 59.0% 23.3% 23.8% 23.4% 7.7% 53.2% 6.7% 5.9% Dec-21 Mar-22 Sep-22 Dec-22 Dec-21 Mar-22 Sep-22 Dec-22 Dec-21 Mar-22 Sep-22 Dec-22 Well capitalized Asset Quality under control Prudent 5
Slide 7: On path to achieving Vision 2025: Progress (9M FY23)
On path to achieving Vision 2025: Progress (9M FY23) Stable asset quality 2x AUM New business contribution: GS-3 < 6% 15% 9M FY23: 9M FY23: 9M FY23: GS-3: 5.9% AUM Growth: 19%* New Business: 5%+ Maintain NIMs ~7.5% Operating leverage: Cost to RoA ~2.5% Assets ~2.5% 9M FY23: 9M FY23: 9M FY23: NIMs: 7
Slide 8: Financial Information - Standalone
Executive Summary Financial Information - Standalone Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 9: Disbursement and Collection Trends
Disbursement and Collection Trends on standalone basis Historical Disbursements (INR crores) Q1 Q2 Q3 Q4 FY/ YTD FY 2023 9,472 11,824 14,467 - 35,764 FY 2022 3,872 6,475 8,032 9,202 27,581 FY 2021 2,733 4,028 6,270 5,970 19,001 Collection Efficiency^ Oct Nov Dec Q3 Q2 Q1 FY 2023 91% 96% 98% 95% 97%
Slide 10: Break down of Disbursements
Break down of Disbursements on standalone basis Nine-month ended Nine-month ended Year ended Asset Class Dec – 22 Dec – 21 March – 22 Auto/ Utility vehicles 34% 35% 34% Tractors 12% 19% 16% Cars 17% 20% 19% Commercial vehicles and Construction equipments 11% 5% 8% Pre-owned vehicles 16% 17% 18% SME
Slide 11: Break down of Business Assets
Break down of Business Assets on standalone basis Nine-month ended Nine-month ended Year ended Asset Class Dec – 22 Dec – 21 March – 22 Auto/ Utility vehicles 33% 32% 32% Tractors 15% 17% 16% Cars 20% 22% 22% Commercial vehicles and Construction equipments 11% 13% 12% Pre-owned vehicles 12% 10% 11%
Slide 12: Break down by Geography
Break down by Geography on standalone basis Dec 2022 9M F2023 18% 10% 20% 10% Dec 2021 9M F2022 15% 10% 16% 12% 19% 19% 23% 20% 19% Business Assets Disbursement * 22% 26% 20% 29% 31% 30% 31% CENTRAL EAST NORTH SOUTH WEST CENTRAL EAST NORTH SOUTH WEST NORTH: Chandigarh, Delhi, Haryana, Himachal Prade
Slide 13: Broad Based Liability Mix
Broad Based Liability Mix on standalone basis All figures in INR crores Funding Mix by Investor Category Funding Mix by type of Instrument Dec’ 22 Sep’22 Mar’22 Dec’ 22 Sep’22 Mar’22 Investor Type Instrument Type Amount % Share % Share % Share Amount % Share % Share % Share Banks / Dev. Institutions
Slide 14: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR crores Cumulative Inflow Cumulative Outflow Cumulative Mismatch % 1,00,000 140% 85,729 120% 80,000 73,726 67,436 100% 58,319 60,000 80% 40,880 40,000 60% 27,973 26,417 18,895 40% 17,547 20,000 11,316 7,270 5,626 8,723 20% 3,548 - 0% Upto Upto Up
Slide 15: Key Financials
Key Financials on standalone basis Disbursement Total Income Profit after Tax Q3 FY 23 Rs. 14,467 crores Rs. 2,892 crores Rs. 629 crores 80% 14% 30% Q3 FY 22 Rs. 8,032 crores Rs. 2,543 crores Rs. 894 crores 9M FY 23 Rs. 35,764 crores Rs. 7,999 crores Rs. 1,300 crores 95% 10% 235% 9M FY 22 Rs. 18,380
Slide 16: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. crores) Revenues (Rs. crores) 73,416 10,245 10,517 9,719 64,993 59,947 60,445 58,278 7,999 7,252 FY20 FY21 FY22 9M FY22 9M FY23 FY20 FY21 FY22 9M FY22 9M FY23 Pre-Provisioning Operating Profit (Rs. crores) Profit after Tax (2) (Rs. crores) 1,3
Slide 17: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 41.0% 37.3% 2.1% 35.8% 33.8% 28.2% 1.3% 1.3% 0.7% 0.4% FY20 FY21 FY22 9M FY22 9M FY23 FY20 FY21 FY22 9M FY22 9M FY23 Return on Net Worth (RONW) (2) (%) Asset Quality (%) Gross Stage 3 Net Stage 3 11
Slide 18: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) Q3FY23 Q2FY23 Q-o-Q Q3FY22 Y-o-Y FY22 Revenue from operations (A) 2,863 2,586 11% 2,528 13% 9,658 Less: Finance cost (B) 1,242 1,069 16% 951 31% 3,920 NII (C= A+B) 1,621 1,517 7% 1,577 3% 5,738 Other Income (D) 29 23 24% 14 154% 61 Total I
Slide 19: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) 9MFY23 9MFY22 Y-o-Y FY22 Revenue from operations (A) 7,935 7,215 10% 9,658 Less: Finance cost (B) 3,243 2,984 9% 3,920 NII (C= A+B) 4,692 4,231 11% 5,738 Other Income (D) 65 37 75% 61 Total Income (E=C+D) 4,757 4,268 11% 5,799 Employee ben
Slide 20: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in crores) As on Dec 31, 2022 As on Dec 31, 2021 As on Mar 31, 2022 ASSETS Financial Asset a) Cash and cash equivalents 251 337 328 b) Bank balance other than (a) above 3463 3,530 3,823 c) Derivative financial instruments 66 27 d) Trade Receivables 33 6 9 e)
Slide 21: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in crores) As on Dec 31, 2022 As on Dec 31, 2021 As on Mar 31, 2022 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 117 203 182 b) Payables i) Trade payables 1,082 683 955 ii) Other payables 47 24 50 c) Debt Securiti
Slide 22: Summary & Key Ratios
Summary & Key Ratios on standalone basis Nine-month ended Nine-month ended Year ended Particulars Dec – 22 Dec – 21 March – 22 RONW (Avg. Net Worth) - annualised 10.9% 3.5% 6.5% Debt / Equity 4.33:1 3.80:1 3.57:1 Capital Adequacy 23.4% 26.8% 27.8% Tier I 20.5% 23.3% 24.3% Tier II 2.9% 3.5% 3.5% EPS
Slide 23: Spread Analysis
Spread Analysis on standalone basis Quarter ended Quarter ended Quarter ended Nine-month ended Nine-month ended Year ended Particulars Dec – 22 Sep – 22 Dec – 21 Dec – 22 Dec – 21 March – 22 Total Loan Income / Average 13.7% 13.4% 14.7% 13.5% 13.8% 13.8% Business Assets Total Income / Average Assets
Slide 24: Stage 3 - Analysis
Stage 3 - Analysis on standalone basis Particulars (Rs. in crores) except figures in % Dec 31, 2022 Sep 30, 2022 Dec 31, 2021 Mar 31, 2022 Mar 31, 2021 Business Assets (including Provisions) 77,344 73,817 63,944 64,961 64,608 Gross Stage 3 4,589 4,942 7,223 4,976 5,786 Less: Stage 3 ECL Provisions 2
Slide 25: Credit Charge
Credit Charge on standalone basis Particulars (Rs. in crores) Q3FY23 Q2FY23 Q3FY22 9MFY23 9MFY22 FY22 FY21 Stage-1 Provisions (75) 59 (39) 52 (45) 22 (127) Stage-2 Provisions (99) (123) (270) (482) 562 295 119 Stage-3 Provisions (169) (281) (437) (183) 490 (462) 1,572 Provisions – P&L Charge (343) (
Slide 26: Stage Wise Provisioning
Stage Wise Provisioning on standalone basis Stage-Wise Assets and Provisioning As on 31st Dec 2022 As on 30th Sep 2022 As on 31st Mar 2022 Rs. in crores Business Assets Provisions & Business Assets Provisions & Business Assets Provisions & (Amount and %) Coverage (Amount and %) Coverage (Amount and
Slide 27: Financial Information - Consolidated
Executive Summary Financial Information - Consolidated Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 28: Key Financials
Key Financials on consolidated basis Disbursement Total Income Profit after Tax Q3 FY 23 Rs. 14,911 crores Rs. 3,353 crores Rs. 664 crores 75% 12% 33% Q3 FY 22 Rs. 8,520 crores Rs. 2,986 crores Rs. 992 crores 9M FY 23 Rs. 37,028 crores Rs. 9,296 crores Rs. 1,396 crores 92% 9% 168% 9M FY 22 Rs. 19,33
Slide 29: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) Q3FY23 Q2FY23 Q-o-Q Q3FY22 Y-o-Y FY22 Revenue from operations (A) 3,324 3,011 10% 2,974 12% 11,318 Less: Finance cost (B) 1,373 1,192 15% 1,070 28% 4,418 NII (C= A+B) 1,951 1,819 7% 1,904 3% 6,900 Other Income (D) 29 18 55% 11 (16%) 83 T
Slide 30: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) 9MFY23 9MFY22 Y-o-Y FY22 Revenue from operations (A) 9,236 8,452 9% 11,318 Less: Finance cost (B) 3,616 3,364 7% 4,418 NII (C= A+B) 5,620 5,088 10% 6,900 Other Income (D) 59 50 17% 83 Total Income (E=C+D) 5,679 5,138 11% 6,983 Employee b
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in crores) As on Dec 31, 2022 As on Dec 31, 2021 As on Mar 31, 2022 ASSETS Financial Asset a) Cash and cash equivalents 599 466 765 b) Bank balance other than (a) above 4,133 3,693 4,062 c) Derivative financial instruments - 67 27 d) Trade Receivables 100
Slide 32: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in crores) As on Dec 31, 2022 As on Dec 31, 2021 As on Mar 31, 2022 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 117 204 182 b) Payables i) Trade payables 1,198 843 1,113 ii) Other payables 47 24 51 c) Debt Secu
Slide 33: Key Subsidiaries
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 34: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Year ended Particulars (Rs. in crores) Q3FY23 Q3FY22 9MFY23 9MFY22 March – 22 Loans disbursed 444 488 1,264 951 1,602 No. of Customer Contracts (nos.) 12,229 23,806 41,110 45,412 75,327 Loans & Advances (net) 6,835 7,030 6,835 7,030 7,029 Total income 338 353 9
Slide 35: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Particulars (Rs. in crores) Q3FY23 Q3FY22 9MFY23 9MFY22 March – 22 No. of Policies for the Period (nos.) 9,96,025 5,25,623 21,47,352 12,71,491 18,63,160 Net Premium 979 610 2,350 1,538 2,360 Total income 123 97 306 234 348 PBT 18 24 29 42 70 PAT 13 18 22
Slide 36: Company Overview
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 37: Company Background
Company Background Parentage: Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 1.68 trillion)* About MMFSL: MMFSL (Mcap: Rs 294 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban secto
Slide 38: MMFSL Group structure
MMFSL Group structure (1) 80% Mahindra Insurance Brokers Limited (“MIBL”) Mahindra & Mahindra Limited 98.43%(2) Mahindra Rural Housing Finance Limited (“MRHFL”) 52.16% 49% Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) 51%(3) Mahindra Manulife Investment Management Mahindra
Slide 39: Our Journey
Our Journey Maiden Retail NCD Issue of Rs. Commenced Housing Finance 1000 crores business through MRHFL Oversubscribed over 7x of base QIP Issue of Rs. 426 crores issue size of Rs. 250 crores Raised Rs. 414 crores through JV with Rabobank subsidiary for tractor Maiden issue of ECB Private Equity fin
Slide 40: Shareholding Pattern (as on December 31, 2022)
Shareholding Pattern (as on December 31, 2022) Shareholding Pattern Top 10 Public Shareholders ▪ Life Insurance Corporation Of India. India 7.82% ▪ Wishbone HDFC Life Fund, Insurance Ltd. Company Limited ▪ HDFC Life Fund, Wishbone Insurance Ltd. Company Limited 23.76% ▪ HDFC Trustee Company Ltd . 52
Slide 41: Business Strategy
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 42: Business Strategy
Business Strategy Grow in rural and semi urban markets by providing financing, investment and insurance solutions Expand Branch Network Leverage existing customers base through Direct Marketing Initiatives Diversify Product Portfolio: Nurture new businesses of Digital Finance and Leasing Broad base
Slide 43: Transformation priorities
Transformation priorities 1 Stabilize Asset Quality Focus on bringing the volatility down 2 Recharge Growth Build high quality diversified business 3 Strengthen Tech & Digital Data informed thinking 4 Future Ready Human Capital High Performing Organisation 42
Slide 44: Sustainable profitable growth: Vision 2025
Sustainable profitable growth: Vision 2025 Stable asset quality 2x AUM New business contribution: GS-3 < 6% 15% Maintain NIMs ~7.5% Operating leverage: Cost to RoA ~2.5% Assets ~2.5% 43
Slide 45: Extensive Branch Network
Extensive Branch Network ◼ Extensive branch network with presence in 27 states and 7 union territories in India through 1,386 offices ◼ Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of 2 1388 1384 1386 21 1322 38 27 1182 28 35 15 2 893 3 116 150 42
Slide 46: Diversified Product Portfolio
Diversified Product Portfolio ▪ Loans for auto and utility vehicles, tractors, cars, commercial vehicles and construction Vehicle Financing equipments Pre-Owned Vehicles ▪ Loans for pre-owned cars, multi-utility vehicles, tractors and commercial vehicles ▪ Loans for varied purposes like project fina
Slide 47: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives ▪ Foster a Digital Learning ecosystem that drives a culture of ▪ Next gen API commissioned for scaling partnerships, integrating anytime-anywhere learning. fintech ecosystem & create enterprise wide
Slide 48: Credit Rating
Credit Rating MMFSL believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates Credit Rating India Ratings Outlook Long term and Subordinated debt (incl. MLD); Bank Facilities; IND AAA Stable Fixed Deposit Programme IND PP-MLD AAA emr Short term debt IND
Slide 49: Awards & CSR Initiatives
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 50: Awards & Accolades, CSR Initiatives
Awards & Accolades CSR Initiatives ■ Ranked 54th among India Best Companies to Work 2021 by Great Place to ■ To further solidify our adherence towards the well-being of the driver Work ® Institute communities, your Company successfully completed the Phase I of its flagship program – ‘Swabhimaan’ imp
Slide 51: Risk Management Policies
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Transforming rural lives across the country Awards & CSR Initiatives Risk Management Policies
Slide 52: Risk Management Policies
Risk Management Policies Provisioning Norms Stage Description Provision Mechanism Stage 1 0- 30 days past due PD * LGD * Stage 1 Asset Stage 2 > 30 to <= 90days past due PD * LGD * Stage 2 Asset Stage 3 > 90 days past due LGD * EAD of Stage 3 Asset* The Company may also make additional management ov
Slide 53: 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 54: Thank You
Thank You Transforming rural lives across the country
Mahindra & Mahindra Financial Services — Q3 FY2023 Earnings Presentation on 6ix