Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q2 FY2024 Earnings Presentation
53 slides from Mahindra & Mahindra Financial Services's earnings presentation, Oct 27, 2023
Slide 1: Cover letter to stock exchanges
Mahindra & Mahindra Financial Services Ltd. Mahindra Towers, 4th Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 Fax: +91 22 24984170 +91 22 24984171 27th October 2023 To, BSE Limited (Scrip Code: 532720) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001
Slide 2: Quarter Result Update September 2023
Mahindra & Mahindra Financial Services Limited Quarter Result Update September - 2023 Regd. Office: Corporate Office: Gateway Building, Apollo Bunder, Mahindra Towers, 4th Floor, Mumbai-400 001, India Dr. G. M. Bhosale Marg, Worli, Tel: +91 22 2289 5500 Mumbai-400 018, India Fax:+91 22 2287 5485 Tel
Slide 3: Providing financial solutions to Emerging India
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 4: Executive summary (1/3)
Executive summary (1/3) Key Highlights ✓ Asset Growth momentum sustained with Loan Book* at ₹ 93,723 Cr.; YoY growth of 27.0%; Sequential growth of 8.1% ➢ Market share position maintained in Tractors, Pre-owned vehicles, Passenger vehicles and Three-wheelers ✓ Asset Quality (GS-3) sustained at 4.3%
Slide 5: Executive summary (2/3)
Executive summary (2/3) Asset Quality ✓ Asset Quality: Improvement continued across Stage 3 and Stage 2 ➢ Gross Stage 3 maintained at 4.3% (Q1 FY24 - 4.3%; Q2FY23 - 6.7%) ➢ Gross Stage 2 improved to 5.7% (Q1 FY24 – 6.4%; Q2FY23 - 9.7%) ✓ Provision coverage on Stage-3 assets at 61.2% (against @ 60.1%
Slide 6: Business Strength
Business Strength Capital Adequacy Gross Stage-3 Stage 3 - Coverage Ratio 23.8% 6.7% 61.2% 22.5% 60.1% 21.2% 4.5% 59.5% 4.3% 4.3% 58.2% 18.7% Sep-22 Mar-23 Jun-23 Sep-23 Sep-22 Mar-23 Jun-23 Sep-23 Sep-22 Mar-23 Jun-23 Sep-23 Well capitalized Asset Quality under control Prudent 5
Slide 7: On path to achieving Mission 2025: Progress (H1 FY24)
On path to achieving Mission 2025: Progress (H1 FY24) New Business Stable Asset Quality 2x AUM* Contribution GS-3 < 6% 15% H1 FY24: 4.3% H1 FY24: 1.44x* H1 FY24: ~6% Operating Leverage Maintain Cost To RoA NIMs ~7.5% Assets ~2.5% ~2.5% H1 FY24: 6.6% H1 FY24: 2.8% H1 FY24: 1.2% * Refers to growth ove
Slide 8: Financial Information – Standalone
Providing financial solutions to Emerging India Executive Summary Financial Information – Standalone Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 9: Disbursement and Collection Trends
Disbursement and Collection Trends on Standalone Basis Historical Disbursements (INR crores) Q1 Q2 Q3 Q4 FY/YTD FY 2024 12,165 13,315 - - 25,480 FY 2023 9,472 11,824 14,467 13,778 49,541 FY 2022 3,872 6,475 8,032 9,202 27,581 Collection Efficiency^ Q1 Jul Aug Sep Q2 Q3 Q4 FY FY 2024 94% 96% 96% 97%
Slide 10: Break down of Disbursements
Break down of Disbursements on Standalone Basis Half Year ended Half Year ended Year ended Asset Class (Rs. Crores) Q2 FY 24 Q2 FY 23 Y-o-Y Y-o-Y Sep – 23 Sep – 22 March – 23 Auto/ Utility vehicles 5,117 (38%) 4,151 (35%) 23% 9,384 (37%) 7,251 (34%) 29% 16,496 (33%) Tractors 1,280 (10%) 1,143 (10%)
Slide 11: Break down of Business Assets
Break down of Business Assets on Standalone Basis Half Year ended Half Year ended Year ended Asset Class Sep – 23 Sep – 22 March – 23 Auto/ Utility vehicles 33% 31% 33% Tractors 13% 14% 14% Cars 19% 20% 20% Commercial vehicles and Construction equipments 11% 11% 11% Pre-owned vehicles 12% 11% 12% SM
Slide 12: Break down by Geography
Break down by Geography on Standalone Basis Sep 2023 H1 FY 2024 18% 16% 10% Sep 2022 10% H1 FY 2023 18% 10% 21% 10% 20% 19% Business 23% 21% Disbursement * 20% 19% 19% Assets 20% 30% 30% 34% 32% CENTRAL EAST NORTH SOUTH WEST CENTRAL EAST NORTH SOUTH WEST NORTH: Chandigarh, Delhi, Haryana, Himachal P
Slide 13: Broad Based Liability Mix
Broad Based Liability Mix on Standalone Basis Funding Mix by Investor Category Funding Mix by type of Instrument Sep’ 23 Jun’ 23 Mar’23 Sep’ 23 Jun’23 Mar’23 Investor Type Instrument Type Amount % Share % Share % Share Amount % Share % Share % Share Banks / Financial NCDs 21,487 25.2% 25.9% 26.7% 48
Slide 14: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR crores 1,20,000 180% Cumulative Inflow Cumulative Outflow Cumulative Mismatch% 1,00,234 160% 1,00,000 86,035 140% 81,286 80,000 71,191 120% 100% 60,000 44,382 80% 40,000 30,540 30,080 60% 21,312 18,457 40% 20,000 16,440 9,387 6,486 9,282 20% 3,4
Slide 15: Key Financials
Key Financials on standalone basis Disbursement Total Income Profit after Tax Q2 FY 24 Rs. 13,315 crores Rs. 3,240 crores Rs. 235 crores 13% 24% 48% Q2 FY 23 Rs. 11,824 crores Rs. 2,609 crores Rs. 448 crores H1 FY 24 Rs. 25,480 crores Rs. 6,366 crores Rs. 588 crores 20% 25% 12% H1 FY 23 Rs. 21,296 c
Slide 16: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. crores) Revenues (Rs. crores) 89,948 10,517 11,056 79,455 9,719 69,564 59,947 60,445 6,366 5,108 FY21 FY22 FY23 H1 FY23 H1 FY24 FY21 FY22 FY23 H1 FY23 H1 FY24 Pre-Provisioning Operating Profit (Rs. crores) Profit after Tax (2) (Rs. crores) 1,9
Slide 17: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 42.1% 41.8% 42.0% 2.3% 35.8% 1.7% 28.2% 1.3% 1.2% 0.4% FY21 FY22 FY23 H1 FY23 H1 FY24 FY21 FY22 FY23 H1 FY23 H1 FY24 Return on Net Worth (RONW) (2) (%) Asset Quality (%) Gross Stage 3 Net Stage 3 12
Slide 18: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) Q2FY24 Q1FY24 Q-o-Q Q2FY23 Y-o-Y FY23 Revenue from operations (A) 3,212 3,085 4% 2,586 24% 10,929 Less: Finance cost (B) 1,566 1,451 8% 1,069 47% 4,577 NII (C= A+B) 1,646 1,634 1% 1,517 8% 6,352 Other Income (D) 28 41 -30% 23 22% 127 Total
Slide 19: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) H1FY24 H1FY23 Y-o-Y FY23 Revenue from operations (A) 6,297 5,072 24% 10,929 Less: Finance cost (B) 3,017 2,001 51% 4,577 NII (C= A+B) 3,280 3,071 7% 6,352 Other Income (D) 69 36 94% 127 Total Income (E=C+D) 3,349 3,107 8% 6,479 Employee be
Slide 20: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in crores) As on Sep 30, 2023 As on Sep 30, 2022 As on Mar 31, 2023 ASSETS Financial Asset a) Cash and cash equivalents 251 383 250 b) Bank balance other than (a) above 1,742 3,277 2,582 c) Derivative financial instruments - 22 - d) Trade Receivables 19 17 2
Slide 21: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in crores) As on Sep 30, 2023 As on Sep 30, 2022 As on Mar 31, 2023 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 268 226 181 b) Payables i) Trade payables 919 766 1,126 ii) Other payables 38 22 40 c) Debt Securiti
Slide 22: Summary & Key Ratios
Summary & Key Ratios on standalone basis Half Year ended Half Year ended Year ended Particulars Sep – 23 Sep – 22 March – 23 RONW (Avg. Net Worth) - annualised 6.9% 8.9% 12.1% Debt / Equity 5.01:1 4.28:1 4:39:1 Capital Adequacy 18.7% 23.8% 22.5% Tier I 16.7% 20.5% 19.9% Tier II 2.0% 3.3% 2.6% EPS (B
Slide 23: Spread Analysis
Spread Analysis on standalone basis Quarter ended Quarter ended Quarter ended Half Year ended Half Year ended Year ended Particulars Sep -23 Jun -23 Sep -22 Sep – 23 Sep – 22 March – 23 Total Loan Income / Average Business Assets 13.1% 13.3% 13.4% 13.1% 13.4% 13.5% Total Income / Average Assets 12.6
Slide 24: Stage 3 - Analysis
Stage 3 - Analysis on standalone basis Particulars (Rs. in crores) except figures in % Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Mar 31, 2023 Mar 31, 2022 Business Assets (including Provisions) 93,723 86,732 73,817 82,770 64,961 Gross Stage 3 4,024 3,770 4,942 3,717 4,976 Less: Stage 3 ECL Provisions 2
Slide 25: Credit Charge
Credit Charge on standalone basis Particulars (Rs. in crores) Q2FY24 Q1FY24 Q2FY23 H1FY24 H1FY23 FY23 FY22 Stage-1 Provisions 78 64 59 142 127 117 22 Stage-2 Provisions 10 77 (123) 88 (383) (651) 295 Stage-3 Provisions 188 72 (281) 259 (14) (680) (462) Provisions – P&L Charge 276 213 (345) 489 (270)
Slide 26: Stage Wise Provisioning
Stage Wise Provisioning on standalone basis Stage-Wise Assets and Provisioning As on 30th Sep 2023 As on 30th Jun 2023 As on 31st Mar 2023 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
Providing financial solutions to Emerging India Executive Summary Financial Information – Consolidated Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 28: Key Financials
Key Financials on consolidated basis Disbursement Total Income Profit after Tax Q2 FY 24 Rs. 13,881 crores Rs. 3,863 crores Rs. 287 crores 13% 28% 42% Q2 FY 23 Rs. 12,297 crores Rs. 3,029 crores Rs. 492 crores H1 FY 24 Rs. 26,380 crores Rs. 7,500 crores Rs. 649 crores 19% 26% 11% H1 FY 23 Rs. 22,232
Slide 29: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) Q2 FY 24 Q1FY24 Q-o-Q Q2FY23 Y-o-Y FY23 Revenue from operations (A) 3,833 3,583 7% 3,011 27% 12,699 Less: Finance cost (B) 1,703 1,597 7% 1,192 43% 5,094 NII (C= A+B) 2,130 1,986 7% 1,819 17% 7,605 Other Income (D) 30 54 -44% 18 65% 133
Slide 30: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) H1FY24 H1FY23 Y-o-Y FY23 Revenue from operations (A) 7,416 5,913 25% 12,699 Less: Finance cost (B) 3,300 2,244 47% 5,094 NII (C= A+B) 4,116 3,669 12% 7,605 Other Income (D) 84 30 178% 133 Total Income (E=C+D) 4,200 3,699 14% 7,738 Employ
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in crores) As on Sep 30, 2023 As on Sep 30, 2022 As on Mar 31, 2023 ASSETS Financial Asset a) Cash and cash equivalents 465 556 587 b) Bank balance other than (a) above 1,967 3,485 3,480 c) Derivative financial instruments 22 - d) Trade Receivables 168 77
Slide 32: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in crores) As on Sep 30, 2023 As on Sep 30, 2022 As on Mar 31, 2023 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 268 226 181 b) Payables i) Trade payables 1,134 894 1,246 ii) Other payables 38 22 40 c) Debt Secu
Slide 33: Subsidiary Financials
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 34: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Year ended Particulars (Rs. in crores) Q2FY24 Q2FY23 H1FY24 H1FY23 March -23 Loans disbursed 482 425 771 821 2,004 Loans & Advances (net) 6,625 6,927 6,625 6,927 6,845 Total income 331 328 673 657 1,350 PBT 15 42 -15 44 26 PAT 12 31 -11 34 22 Net-worth 1,472 1,
Slide 35: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Particulars (Rs. in crores) Q2FY24 Q2FY23 H1FY24 H1FY23 March -23 No. of Policies for the Period (nos.) 5,83,086 6,35,351 11,12,920 11,51,327 29,10,954 Net Premium 864 743 1,708 1,370 3,420 Total income 289 94 453 183 427 PBT 38 8 62 11 46 PAT 29 6 46 8
Slide 36: Mahindra Ideal Finance Limited
Mahindra Ideal Finance Limited Year ended Particulars (in LKR Mn) Q2FY24 Q2FY23 H1FY24 H1FY23 March -23 Loans disbursed 3,225 2,208 4,963 4,416 9,907 Loans & Advances (net) 6,563 6,357 6,563 6,357 7,124 Total income 588 460 1,149 857 1,924 PBT* 90 59 168 105 248 PAT 30 18 55 33 87 Net-worth 2,890 2,
Slide 37: Company Overview
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 38: Company Background
Company Background Parentage Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (M.Cap: Rs 1.87 trillion)* About MMFSL MMFSL (M.Cap: Rs 333 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban secto
Slide 39: MMFSL Group structure
MMFSL Group structure Mahindra & Mahindra Limited 52.16% Mahindra & Mahindra Financial Services Limited 100%(1) 98.43%(2) 49% 51%(3) 51%(3) 58.2%(4) Mahindra Insurance Mahindra Rural Mahindra Finance Mahindra Manulife Mahindra Manulife Mahindra Ideal Brokers Limited Housing Finance USA LLC Investmen
Slide 40: Our Journey
Our Journey Long term debt rating upgraded to Long term debt Equity AAA by India rating upgraded to participation of Ratings and AAA by CRISIL 12.5%by NHB in Brickwork. Maiden issue of MRHFL QIP Issue of Rs. Maiden Retail ECB Crossed 9 million 426 crores CARE Ratings NCD Issue of undertaken. cumulat
Slide 41: Shareholding Pattern (as on Sep 30, 2023)
Shareholding Pattern (as on Sep 30, 2023) Shareholding Pattern Top 10 Public Shareholders 7.78% ▪ Life Insurance Corporation of India ▪ HDFC Life Insurance Company Limited ▪ HDFC Mutual Fund 25.84% ▪ ICICI Prudential Mutual Fund 52.16% ▪ Kotak Funds – India Midcap Fund ▪ Kotak Mahindra Mutual Fund.
Slide 42: Business Strategy
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 43: Business Strategy
Business Strategy Deepen presence in emerging India – age, Diversify product portfolio: Nurture & Scale SME, income, aspiration, digital behaviour digital finance, leasing and foray into other lending / ₹ non-lending financial solutions Strengthen risk culture and governance within the Grow wallet s
Slide 44: Transformation priorities
Transformation priorities 01 02 Stabilize Asset Quality Recharge Growth Focus on bringing the volatility Build high quality diversified down business 03 04 Future Ready Human Capital Strengthen Tech & Digital High Performing Organisation Data informed thinking 43
Slide 45: Sustainable profitable growth: Mission 2025
Sustainable profitable growth: Mission 2025 New Business Stable Asset Quality 2x AUM Contribution GS-3 < 6% 15% Operating Leverage Maintain Cost To RoA NIMs ~7.5% Assets ~2.5% ~2.5% 44
Slide 46: Extensive Branch Network
Extensive Branch Network ▪ Extensive branch network with presence in 27 states and 7 union Coverage territories in India through 1,368 offices ▪ Branches have authority to approve loans within prescribed guidelines Central East North 2 21 South West 27 36 2 Branch Network as of 34 28 13 2 116 3 42 1
Slide 47: Diversified Product Portfolio
Diversified Product Portfolio Vehicle Financing Pre-Owned Vehicles SME Financing Loans for auto and utility vehicles, tractors, cars, Loans for pre-owned cars, multi-utility vehicles, Loans for varied purposes like project finance, commercial vehicles and construction tractors and commercial vehicle
Slide 48: 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 49: Credit Rating
Credit Rating India Ratings Outlook Long term and Subordinated debt (incl. MLD); IND AAA Stable Bank Facilities; Fixed Deposit Programme IND PP-MLD AAA Short term debt IND A1+ - CRISIL Ratings Outlook Long term and Subordinated debt; Bank Facilities; CRISIL AAA Stable Fixed Deposit Programme Short t
Slide 50: Awards & CSR Initiatives
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 51: Awards & Accolades
Awards & Accolades Best Financial Inclusion Initiative Happiest Workplace for Women India’s Best Companies to Work Validation of SBTI Targets Amongst Best Places to Work in India 50
Slide 52: CSR Initiatives
CSR Initiatives Training New Drivers Road Safety training Scholarships for Drivers’ children Nanhi Kali: Educational support Skill Development for Disability affected Women Empowerment Mahindra Hariyali Water conservation Money Gyaan Se Jeevan Asaan CSR Campaign - To create awareness about key theme
Slide 53: Thank You
Providing financial solutions to Emerging India Thank You
Mahindra & Mahindra Financial Services — Q2 FY2024 Earnings Presentation on 6ix