Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q2 FY2020 Earnings Presentation
46 slides from Mahindra & Mahindra Financial Services's earnings presentation, Oct 22, 2019
Slide 1: Cover letter to stock exchanges: Investors/Analysts' Presentation
Mahindra FINANCE Mahindra & Mahindra Financial Services Ltd. Mahindra Towers, 4th Floor, Dr. G. M. Bhosale Marg, Worh Mumbai 400 018 India Tel: +91 22 66526000 Fax: +91 22 24984170 +91 22 24984171 22nd October, 2019 The General Manager-Department of The Manager-Listing Department, Corporate Services
Slide 2: Quarter Result Update September 2019
Mahindra & Mahindra Financial Services Limited Quarter Result Update September - 2019 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 66526000 Fax
Slide 3: Transforming rural lives across the country
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 2
Slide 4: Company Background
Company Background Parentage: Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 741 billion)*, India’s largest tractor and utility vehicle manufacturer About MMFSL: MMFSL (Mcap: Rs 211 billion)*, one of India’s leading non-banking fin
Slide 5: 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”) 51.19% 49% Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) Mahindra & Mahindra Financial Services Limited 100%(3) M
Slide 6: Our Journey
Our Journey Commenced housing finance Maiden Retail NCD Issue Raised Rs. 2147 Long term debt rating business through MRHFL Maiden QIP Issue of Rs. 4.26 Bn of Rs. 1000 crores. crores from upgraded to AAA by Oversubscribed over 7 Tranche 1 of the India Ratings and Raised Rs. 4.14 Bn through JV with Ra
Slide 7: Shareholding Pattern (as on 30th September, 2019)
Shareholding Pattern (as on 30th September, 2019) Shareholding Pattern Chart Top 10 Public Shareholders 7.95% HDFC Life Insurance Company Limited Life Insurance Corporation Of India Kotak Funds - India Midcap Fund 15.26% Valiant Mauritius Partners Offshore Limited 51.19% Blackrock Global F
Slide 8: Industry Overview
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 7
Slide 9: Auto Industry Volume
Auto Industry Volume Domestic Sales 1HFY20 1HFY19 Y-o-Y FY19 FY18 Y-o-Y (Volume in ‘000) (Nos.) (Nos.) Growth (%) (Nos.) (Nos.) Growth (%) Passenger Vehicles (PVs) Passenger Cars / Vans 818 1,169 (30%) 2,219 2,174 2% UV’s 516 575 (10%) 1,159 1,115 4% Commercial Vehicles (CVs) M&HCVs 123 191 (36%) 39
Slide 10: Automobile Finance Market: 5 years Projected Growth
Automobile Finance Market: 5 years Projected Growth Segment-wise growth in disbursement FY 14 (Rs. Bn.) CAGR FY 14 – FY 19 FY 19 (E) (Rs. Bn.) CAGR FY 19 – FY 24 FY 24 (P) (Rs. Bn.) Passenger vehicle 696 8% 1,032 10% - 12% 1,747 Commercial vehicle 351 20% 859 5% - 7% 1,171 Two wheelers 140 18% 309 1
Slide 11: Housing Finance Growth
Housing Finance Growth Rs. Tn. Housing Portfolio 30 Banks HFCs HFC's 5 Year CAGR Growth momentum in the sector expected to slow 24.1 18%-19% 25 down. However, demand side fundamentals remain 20 strong. 14.8 16.1 15 Share of loans from Banks to increase as over the 11.8 medium term. Liquidity con
Slide 12: Business Strategy
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 11
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 Extensive branch network with presence in 28 states and 5 union territories in India through 1,337 offices Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of 1,284 1,321 1,337 1,182 893 547 436 256 Mar'05 Mar'08 Mar'11 Mar
Slide 15: 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 16: Break down of estimated value of Assets Financed
Break down of estimated value of Assets Financed Half Year ended Half Year ended Year ended Asset Class Sep – 19 Sep – 18 March – 19 Auto/ Utility vehicles 27% 23% 25% Tractors 16% 18% 18% Cars 19% 20% 20% Commercial vehicles and Construction equipments 17% 18% 19% Pre-owned vehicles 18% 14% 14% SME
Slide 17: Break down of AUM
Break down of AUM As on As on As on Asset Class Sep – 19 Sep – 18 March – 19 Auto/ Utility vehicles 26% 25% 26% Tractors 17% 17% 17% Cars 20% 21% 21% Commercial vehicles and Construction equipments 19% 15% 18% Pre-owned vehicles 9% 8% 9% SME and Others 9%* 14% 9% As on 30th September19, ~42% of the
Slide 18: Break down by Geography
Break down by Geography WEST CENTRAL WEST CENTRAL 15% 10% 13% 11% Loan Assets EAST SOUTH Disbursement EAST SOUTH as on Sep, 2019 26% 20% for H1 FY2020 25% 20% NORTH NORTH 29% 31% NORTH: Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttaranchal; EA
Slide 19: 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 IND AAA Long term (including MLD) and Subordinated debt Stable IND PP-MLD AAA emr Short term debt IND A1+ -- CARE Ratings Outlook Long term
Slide 20: Broad Based Liability Mix
Broad Based Liability Mix Working Capital Consortium Facility enhanced to Rs. 20,000 mn. comprising several banks Funding Mix by Investor profile (Sep’19) Funding Mix by type of Instrument (Sep’19) Investor Type Amount (INR mn.) % Share Instrument Type Amount (INR mn.) % Share Banks/ NCDs 180,515 31
Slide 21: ALM Position
ALM Position Cumulative Mismatch Cumulative Surplus (%) - Positive (INR cr.) 14,000 300% 12,876 12,000 250% 10,000 9,265 9,637 200% 8,000 6,995 6,484 6,614 6,075 150% 6,000 100% 4,000 2,000 50% - 0% Upto Upto Upto Upto Upto Upto Upto 1 month 2 months 3 months 6 months 1 year 3 years 5 years As on 30
Slide 22: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives Training programs for employees on regular basis All our offices are connected to the centralised data centre in Mumbai through Lease line/HHD 5 days induction program on product knowledge, bus
Slide 23: Financial Information
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 22
Slide 24: Key Financials
Key Financials Figures on standalone basis Total Income Profit after Tax Value of Asset Financed Q2 FY 20 Rs 25,409 mn Rs 2,518 mn Rs 97,470 mn 18% 34% 10% Q2 FY 19 Rs 21,455 mn Rs 3,814 mn Rs 108,556 mn H1 FY 20 Rs 49,534 mn Rs 3,202 mn Rs 203,453 mn 21% 51% 4% H1 FY 19 Rs 40,851 mn Rs 6,504 mn Rs
Slide 25: Key Financials (Consolidated)
Key Financials (Consolidated) Figures on consolidated basis Total Income Profit after Tax Value of Asset Financed Q2 FY 20 Rs 29,365 mn Rs 2,636 mn Rs 102,775 mn 16% 39% 12% Q2 FY 19 Rs 25,216 mn Rs 4,350 mn Rs 116,796 mn H1 FY 20 Rs 57,749 mn Rs 3,721mn Rs 213,734 nn 20% 51% 6% H1 FY 19 Rs 48,236 m
Slide 26: Growth Trajectory
Growth Trajectory Figures on standalone basis Loan Book (Rs. Bn) Revenues (Rs. Bn) I-GAAP IND-AS I-GAAP IND-AS 637.93 88.10 612.50 554.81 72.06 510.04 485.47 66.85 62.38 423.56 49.53 40.85 FY17 FY18 FY18 FY19 H1FY19 H1FY20 FY17 FY18 FY18 FY19 H1FY19 H1FY20 Profit after Tax (1) (Rs. Bn) Book Value Pe
Slide 27: Financial Performance
Financial Performance Figures on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) I-GAAP IND-AS I-GAAP IND-AS 2.6% 2.2% 2.3% 42.9% 39.8% 41.2% 1.9% 39.7% 38.0% 35.2% 1.0% 0.9% FY17 FY18 FY18 FY19 H1FY19 H1FY20 FY17 FY18 FY18 FY19 H1FY19 H1FY20 Return on Net Worth (RONW) (
Slide 28: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in Million) Q2FY20 Q1FY20 Q-o-Q Q2FY19 Y-o-Y FY19 Revenue from operations 24,864 23,940 4% 21,097 18% 87,229 Less: Finance cost 12,022 11,282 7% 9,310 29% 39,445 NII 12,842 12,658 1% 11,787 9% 47,784 Other Income 545 185 195% 358 53% 869 Total Income
Slide 29: Standalone Profit & Loss Account
Standalone Profit & Loss Account Half year ended Half year ended Particulars (Rs. in Million) Y-o-Y FY 19 Sep – 19 Sep – 18 Revenue from operations 48,804 40,383 21% 87,229 Less: Finance cost 23,304 17,797 31% 39,445 NII 25,500 22,586 13% 47,784 Other Income 730 468 56% 869 Total Income 26,230 23,05
Slide 30: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in Million) As on Sep 30, 2019 As on Sep 30, 2018 As on Mar 31, 2019 ASSETS Financial Asset a) Cash and cash equivalents 4,148 2,243 5,017 b) Bank balance other than (a) above 7,213 1,271 4,568 c) Derivative financial instruments 116 635 100 d) Trade Receiva
Slide 31: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in Million) As on Sep 30, 2019 As on Sep 30, 2018 As on Mar 31, 2019 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 528 2 770 b) Payables i) Trade payables 7,782 11,360 9,795 ii) Other payables 252 - 342 c) Debt Sec
Slide 32: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Half year ended Half year ended Particulars (Rs. in Million) Y-o-Y FY19 Sep – 19 Sep – 18 Revenue from operations 57,358 48,006 19% 103,717 Less: Finance cost 26,085 20,098 30% 44,323 NII 31,273 27,908 12% 59,394 Other Income 391 230 70% 592 Total Income 31,664 28,
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in Million) As on Sep 30, 2019 As on Sep 30, 2018 As on Mar 31, 2019 ASSETS Financial Asset a) Cash and cash equivalents 4,447 2,626 5,372 b) Bank balance other than (a) above 7,213 1,271 4,568 c) Derivative financial instruments 116 636 100 d) Trade Recei
Slide 34: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in Million) As on Sep 30, 2019 As on Sep 30, 2018 As on Mar 31, 2019 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 528 2 770 b) Payables i) Trade payables 9,081 12,268 11,143 ii) Other payables 252 - 342 c) Debt
Slide 35: Summary & Key Ratios
Summary & Key Ratios Figures on standalone basis As per IND-AS Half year ended Half year ended Year ended Particulars (Rs. in Million) Sep – 19 Sep – 18 March – 19 RONW (Avg. Net Worth) 5.9% 13.3% 15.2% Debt / Equity 5.25:1 4.66:1 4.84:1 Capital Adequacy$ 19.7% 21.0% 20.3% Tier I 15.2% 16.1% 15.5% T
Slide 36: Spread Analysis
Spread Analysis Figures on standalone basis As per IND-AS Half year ended Half year ended Year ended Particulars (Rs. in Million) Sep – 19 Sep – 18 March – 19 Total Income / Average Assets 14.4% 14.6% 14.7% Interest / Average Assets 6.8% 6.4% 6.6% Gross Spread 7.6% 8.2% 8.1% Overheads / Average Asse
Slide 37: NPA Analysis (As per IND-AS)
NPA Analysis (As per IND-AS) Figures on standalone basis Particulars (Rs. in Million) except figures in % As on Sep 30, 2019 As on Sep 30, 2018 As on Mar 31, 2019 Total Assets (including Provisions) 727,275 627,495 689,410 Gross NPA (Stage 3) 52,038 56,389 40,706 Less: ECL Provisions (Stage 3) 10,17
Slide 38: Key Subsidiaries
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 37
Slide 39: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Accounting Basis As per IND-AS Half year ended Half year ended Year ended Particulars (Rs. million) Sep – 19 Sep – 18 March – 19 Loans disbursed 10,281 16,019 25,811 No. of Customer Contracts (nos.) 52,663 110,575 171,187 Outstanding loan book 80,127 72,410 76,
Slide 40: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Accounting Basis As per IND-AS Half year ended Half year ended Year ended Particulars (Rs. million) Sep – 19 Sep – 18 March – 19 No. of Policies for the Period (nos.) 1,092,146 1,101,241 2,265,146 Net Premium 9,018 8,598 19,238 Total income 1,578 1,419 3,234 PBT 23
Slide 41: Awards & Accolades
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 40
Slide 42: Awards and Accolades
Awards and Accolades ■ Ranked 8th Rank, in the India’s Best Companies to Work 2019- a study by Economic Times, felicitated by The Great Place to Work Institute® ■ Ranked 11th among the Best Large Workplaces in the Asia’s Best Workplaces 2019 list by The Great Place to Work Institute® ■ Awarded Aon B
Slide 43: Risk Management Policies
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 42
Slide 44: 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* *Fair valued at reporting date PD – Probability of
Slide 45: 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 46: Thank You
Thank You Transforming rural lives across the country 45
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