Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — Q1 FY20 Earnings Presentation
48 slides from Aditya Birla Capital's earnings presentation, Aug 2, 2019
Slide 1: Cover letter to stock exchanges
I. L_-l_l PROTECTING ADITYA BIRLA ’1 &ICAPITAL CAPITAL INVESTING FINANCING PROTEETING INVESTING FINANCING ADVISING ADVISING Ref: No. No. ABCL/SD/MUM/2019-20/AUG/03 2"dd August, r August, 2019 BSE Limited The National Stock Exchange Exchange of India Ltd Phiroze Jeejeebhoy Jeejeebhoy Towers, Exchange
Slide 2: Investor Presentation: Financial Results Q1 FY20
Investor Presentation FINANCIAL RESULTS – Q1 FY20 PROTECTING INVESTING FINANCING ADVISING MUMBAI 2nd August 2019 A Leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 3: Table of contents
ADITYA BIRLA Table of contents „CAPITAL adityabirlacapital.com 1 | Overview Pg. 3 - 6 2 | Business-wise Performance Pg. 7 - 42 3 | Consolidated Financials & Other Annexures Pg. 43 - 47 NOTE 1: The financials of Aditya Birla Capital Ltd are consolidated financials prepared based on Ind AS unless othe
Slide 4: Robust all-round performance
ADITYA BIRLA Robust all-round performance CAPITAL adityabirlacapital.com Figures in Rs Crore PROTECTING INVESTING FINANCING 5% 2% 16% 1,404 2,53,965 61,998 1,343 2,49,270 53,584 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Premium1 AAUM2 Lending Book3 1 | 30% Ind. APE4 growth in Life Insurance, 1
Slide 5: Key Financials
Key Financials C O N S O L I D AT E D 1 Figures in Rs Crore FY 18-19 Quarter 1 FY 19-20 ∆ LY% Businesses (Aggregated on 100% basis) (PY) (CY) 16% 27% NBFC 335 401 20% 270 Asset Management 146 175 20% 3,962 Life Insurance 22 25 13% 3,424 213 Housing 13 39 ~3x General Insurance Broking 15 24 59% Stock
Slide 6: Strong profitability track record over 5 years
ADITYA BIRLA Strong profitability track record over 5 years CAPITAL adityabirlacapital.com Figures in Rs Crore PBT (IndAS) PBT (IGAAP) CAGR: 21% 1,913 29% 552 1,554 1,150 427 995 849 727 FY14 FY15 FY16 FY17 FY18 FY19 Q1 FY19 Q1 FY20 Our Investment journey over last 5 years PBT Track- record (on 100%
Slide 7: The ABC platform
ADITYA BIRLA The ABC platform CAPITAL adityabirlacapital.com • • • Diversified set of Multiple businesses at Ability to transport best in World of opportunities for businesses meeting different stages of scale class practices from one employees; Ability to distinct customer needs business to the oth
Slide 8: Aditya Birla Finance Limited
Aditya Birla Finance Limited PROTECTING INVESTING FINANCING ADVISING 7
Slide 9: Diversified portfolio with value accretive growth
ADITYA BIRLA Diversified portfolio with value accretive growth „CAPITAL adityabirlacapital.com Figures in Rs Crore ■ SME + Retail + HNI ■ Large + Mid Corporate ■ Others Loan book grew by 13% y-o-y 44,408 50,171 2% 3% Loan book shift 50% 47% SME + Retail grew by 25% y-o-y underway Continue to diversi
Slide 10: Multiple products catering to a range of customer needs
Multiple products catering to a range of customer needs Figures in Rs Crore SME (Grew 20% y-o-y) Retail (Grew 36% y-o-y) HNI + Others % Mix 25% 27% 27% 12% 13% 15% 12% 13% 11% 4% 2% 2% 13% 7% 7% 11% 17% 27% 23% 11% 14% 26% 21% 23% 55% 53% 48% 24% 23% 23% 83% 73% 77% 35% 40% 41% 39% 38% 40% Q1 F Y 1
Slide 11: Multiple products catering to a range of customer needs
ADITYA BIRLA Multiple products catering to a range of customer needs „CAPITAL adityabirlacapital.com Figures in Rs Crore Large & Mid Corporate (Grew 6% y-o-y) % of total book ATS Typical Nature of Transactions % Mix 50% 47% 47% TL/WCDL CY: ~50 ▪ Appraisal based on business cash flows along with 20%
Slide 12: Strong focus on growth with quality of loan book
ADITYA BIRLA Strong focus on growth with quality of loan book „CAPITAL adityabirlacapital.com Figures in Rs Crore Secured loan book at ~80% of total Stage-wise assets and ECL Provisioning Primarily focused on cash flow based underwriting Asset Quality FY19 Q1 FY20 Maintaining robust asset quality Gr
Slide 13: Consistent margin expansion across quarters
ADITYA BIRLA Consistent margin expansion across quarters „CAPITAL adityabirlacapital.com Optimised borrowing cost in a hardening interest rate environment 8.25% 8.24% 8.26% 7.96% 8.04% Cost of 7.84% +42bps Borrowing Factors contributing to margin expansion: ▪ Increasing product mix towards retail an
Slide 14: Well matched ALM with diversified borrowing mix
ADITYA BIRLA Well matched ALM with diversified borrowing mix „CAPITAL adityabirlacapital.com ALM optimised for liquidity and costs Diversification across instruments and investors Cumulative Outflows ■ Cumulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% 77% 77% Term Loan 36% Bank 37% 37% 40%
Slide 15: Strategic Priorities
Strategic Priorities Diversified product & ▪ Continue to focus on SME & Retail sectors to drive growth customer strategy ▪ Recently launched new products in the retail consumer loan segment ▪ Expand physical footprint in smaller cities with lean branches leading to lower ticket sizes Build a broad-b
Slide 16: Key Financials – Aditya Birla Finance Limited
ADITYA BIRLA Key Financials – Aditya Birla Finance Limited CAPITAL adityabirlacapital.com Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Lending book 44,408 50,171 Net Interest Income (Incl. Fee Income) 541 694 28% Average yield (Incl. Fee Income) 11.74% 1
Slide 17: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited PROTECTING INVESTING FINANCING ADVISING 16
Slide 18: Value accretive growth
ADITYA BIRLA Value accretive growth „CAPITAL adityabirlacapital.com Figures in Rs Crore Lending book at ~Rs 11,830 Cr 11,827 Overall growth 29% y-o-y Strong growth 9,176 Affordable book at ~ Rs. 1700 Cr in Lending Book Improvement in Cost Income Ratio y-o-y Q1 FY19 Q1 FY20 Led by scale and operating
Slide 19: Systematic approach to build a healthy portfolio mix
Systematic approach to build a healthy portfolio mix Segment Mix (%) Margin accretive customer mix 9% 7% CF 25% 23% 30% 7% 14% LAP ■ Salaried 60% Affordable 59% 56% Non-Salaried 70% ■ Home Loans 40% Q1 FY19 Q1 FY20 Home Loans Affordable ATS: Rs 53 Lacs (LY: Rs 69 Lacs) ATS for Affordable Home Loans
Slide 20: Pan India distribution network
ADITYA BIRLA Pan India distribution network „CAPITAL adityabirlacapital.com Stable Geographic Mix (%) Focus on increasing reach and building retail granularity Home Loan Book Home Loan Book (Metros) (Non-Metros) 37% 40% 60% 4,116 16% 3,905 14% 13% 3,358 19% 19% 2,577 29% 28% Q1 FY19 Q1 FY20 Q1 FY19
Slide 21: Maintaining margins through interest rate cycles
Maintaining margins through interest rate cycles Optimised borrowing cost in a hardening 8.41% 8.45% 8.31% interest rate environment 7.90% 8.00% Cost of Borrowing Maintained margins across interest rate cycles Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Yield • NIM (incl. Fees) Demonstrating ability to
Slide 22: Prudent asset liability management
ADITYA BIRLA Prudent asset liability management CAPITAL adityabirlacapital.com Optimised ALM for liquidity and cost Diversification in borrowing mix and investor profile Cumulative Outflows ■ Cumulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% 85% 62% Term Loan 76% Bank 78% 18% 18% NCD 11% M
Slide 23: Key Financials – Aditya Birla Housing Finance Limited
ADITYA BIRLA Key Financials – Aditya Birla Housing Finance Limited „CAPITAL adityabirlacapital.com Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Lending book 9,176 11,827 29% Average yield (Incl. Fee Income) 10.04% 10.59% Interest cost / Avg. Loan book 7.
Slide 24: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited PROTECTING INVESTING FINANCING ADVISING 23
Slide 25: Profitable growth aided by robust asset mix
ADITYA BIRLA Profitable growth aided by robust asset mix „CAPITAL adityabirlacapital.com Figures in Rs Crore 2,70,360 Maintained domestic AAUM1 Market Share 2,67,175 7,671 6,646 Overall Domestic AAUM market share2 at 10.52% (PQ: 10.57%) 2,25,176 10,084 1,60,239 1,61,491 1,45,824 Fixed Income AAUM1 m
Slide 26: Continued focus on retail expansion
ADITYA BIRLA Continued focus on retail expansion CAPITAL adityabirlacapital.com Figures in Rs Crore Retail + HNI AUM1 at Rs ~1,25,000 Crore Increasing HNI 141111111011101 , 1.3x 1,25,403 ■ Retail 1,21,539 Retail AUM grew ~1.7x over 2 years Retail 94,826 4 74,298 70,444 Penetration 61,779 (AUM) 33,04
Slide 27: Balanced Distribution Network
Balanced Distribution Network AAUM Sourcing Mix (%) Continue to strengthen distribution network Overall Equity 300 > 75% of locations in B-30 cities; Plan to further 19% 19% Locations expand in B-30 cities Direct 44% 45% 22% 21% _. 13% ■ National Distributor 15% 17% 16% 88 Increasing presence throug
Slide 28: Key Financials – Aditya Birla Sun Life AMC Limited
ADITYA BIRLA Key Financials – Aditya Birla Sun Life AMC Limited „CAPITAL adityabirlacapital.com Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Domestic AAUM 2,49,270 2,53,965 Domestic Equity AAUM 89,031 92,474 4% Alternate and Offshore Equity AAUM 10,234 9
Slide 29: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited PROTECTING INVESTING FINANCING ADVISING 28
Slide 30: Fast growing franchise with significant value creation
Fast growing franchise with significant value creation Figures in Rs Crore Individual FYP1 grew by 30% y-o-y 1411M 35% 100. 294 Significantly higher than industry growth 227 Industry2: 15% | Private2: 23% | Top 4 Private2: 29% 41 162 Individual Balanced distribution mix FYP1 Growth J Partnership con
Slide 31: Focus on value accretive product mix
ADITYA BIRLA Focus on value accretive product mix „CAPITAL adityabirlacapital.com Figures in Rs Crore Improving Product Mix Improvement in VNB Margins1 5% 9% 8% 37.2% 34.4% Gross VNB grew 19% y-o-y Protection 107 Gross VNB 23% 30% 35% Non-Par Net VNB Margin at (7.8)% 90 36% Par 24% 25% ■ ULIP Q1 FY1
Slide 32: Balanced sourcing strategy
ADITYA BIRLA Balanced sourcing strategy „CAPITAL adityabirlacapital.com Figures in Rs Crore Driving growth through partnerships and Partnership Channel Proprietary Channel 148 operating leverage in proprietary 147 147 Ind. FYP ▪ 9 Banca tie-ups incl. large banks viz. HDFC Bank, 80 DCB and KVB ▪ Pan
Slide 33: Focus on quality of business
Focus on quality of business Continuous improvement in persistency across periods Persistency 41. 41. 41. 41. 41. +6% 72% 78% +4% 61% 65% +2% +5% +3% 13th Month persistency at 78% (PY: 72%) Ratios1 54% 55% 46% 51% HDFC Bank experience will lead to further improvement I 1 • m _ 41% 44% 13th month 25t
Slide 34: Fund performance
ADITYA BIRLA Fund performance CAPITAL adityabirlacapital.com Assets under management Fund Performance across categories Internal Benchmark • Fund 41,011 9% 37,582 8% 8% 7% 10% 9% 10% 9% 9% 8% 7% 7% 35,180 I Q1FY18 Q1FY19 Q1FY20 1 Yr 5 Yr 1 Yr 5 Yr 1 Yr 5 Yr Assure Enhancer Maximiser (Debt Fund) (Bal
Slide 35: Key Financials – Aditya Birla Sun Life Insurance Limited
ADITYA BIRLA Key Financials – Aditya Birla Sun Life Insurance Limited CAPITAL adityabirlacapital.com Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Individual First year Premium 249 322 29% Group First year Premium 393 188 Renewal Premium 625 751 20% Total
Slide 36: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited PROTECTING INVESTING FINANCING ADVISING 35
Slide 37: Strong growth led by retail
Strong growth led by retail Figures in Rs Crore GWP doubled with increasing retail mix , 1.9x 143 Retail GWP Mix: 64% (PY: 61%) Strong GWP IL 51 Group 76 growth led by Retail 29 92 Retail 3.7+ million lives covered 47 Grew ~ 4x y-o-y (PY: 1 million lives) Q1 FY19 Q1 FY20 Focus on Improved retail Cla
Slide 38: Significantly scaled up distribution and provider network
Significantly scaled up distribution and provider network One of the largest 3rd party distribution capacities Jun‘18 Jun’19 • 10 Banca tie-ups incl. large banks like HDFC Bank, Axis Bank /Am /Am • 10,000+ bank branches through Banca channel Branches hi hi 59 59 • Monthly utilization of available ca
Slide 39: Expanding market through customer value proposition
Expanding market through customer value proposition Comprehensive Product suite enabling traditional & non traditional customer acquisition Expanding the Market Comprehensive Product Suite Outcome Active Health / Assure - Industry Younger customer base 1st incentivized wellness product Customer Segm
Slide 40: Driving value through diversification
Driving value through diversification Increase in geographic outreach across 850+ cities 32% 39% Geographical Non-metro GWP contributing 39% Diversification (% non-metro) Q1 FY19 Q1 FY20 Share of high margin fixed benefit product at a 61% healthy 17% Banca 54% sourcing % of Retail GWP Banca channel
Slide 41: Key Financials – Aditya Birla Health Insurance Limited
Key Financials – Aditya Birla Health Insurance Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters1 FY 18-19 FY 19-20 Retail Premium (PY) 47 (CY) 92 * 2.0x Group Premium Gross Written Premium Revenue 29 76 77 51 143 146 * 1.9x Combined Ratio 190% 146% Profit Before Tax (65) (65) A
Slide 42: Other Financial Services businesses
ADITYA BIRLA „CAPITAL adityabirlacapital.com Other Financial Services businesses
Slide 43: Other Financial Services Businesses
Other Financial Services Businesses Figures in Rs Crore Quarter 1 Key Performance Parameters FY 18-19 FY 19-20 Other Financial Services Businesses1 (PY) (CY) Aggregate Revenue 165 186 Aggregate Profit Before Tax 3 21 General • Premium placement grew y-o-y by 16% to Rs 1,162 Crore Insurance • Revenue
Slide 44: Annexure A Consolidated Financials
ADITYA BIRLA „CAPITAL adityabirlacapital.com Annexure A Consolidated Financials
Slide 45: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Figures in Rs Crore Quarter 1 ∆ LY% Consolidated Profit & Loss FY 18-19 FY 19-20 (PY) (CY) Revenue 3,063 3,646 19% Profit Before Tax (before share of profit/(loss) of JVs 282 378 Add: Share of Profit/(loss) of associate and Joint ventures 51 59 Profit B
Slide 46: Aditya Birla Capital Limited
PROTECTING INVESTING FINANCING ADVISING Aditya Birla Capital Limited CIN: L67120GJ2007PLC058890 Regd. Office: Indian Rayon Compound, Veraval – 362 266, Gujarat Corporate Office: One Indiabulls Centre, Tower 1, Jupiter Mills Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai – 400 013 Websi
Slide 47: Disclaimer
ADITYA BIRLA Disclaimer „CAPITAL adityabirlacapital.com The information contained in this presentation is provided by Aditya Birla Capital Limited (“ABCL or the Company”), formerly known as Aditya Birla Financial Services Limited, to you solely for your reference. Any reference herein to "the Compan
Slide 48: Glossary
ADITYA BIRLA Glossary „CAPITAL adityabirlacapital.com ▪ AAUM – Quarterly Average Assets under Management ▪ HL – Home Loan ▪ Q3 – October – December ▪ ALM – Asset Liability Management ▪ JV – Joint Ventures ▪ Q4 – January – March ▪ ATS – Average Ticket Size ▪ LAP – Loan Against Property ▪ Rs – Indian