Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — FY2018 Earnings Presentation
48 slides from Mahindra & Mahindra Financial Services's earnings presentation, March 2018
Slide 1: Mahindra & Mahindra Financial Services Limited FY 2018 Result Update
Mahindra & Mahindra Financial Services Limited FY 2018 Result Update March - 2018 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:+91 2
Slide 2: 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 3: Company Background
Company Background Parentage: Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 1042 billion)*, India‟s largest tractor and utility vehicle manufacturer About MMFSL: MMFSL (Mcap: Rs 315 billion)*, one of India‟s leading non-banking fi
Slide 4: MMFSL Group structure
MMFSL Group structure (1) 80% Mahindra Insurance Brokers Limited (“MIBL”) Mahindra & Mahindra Limited 89%(2) Mahindra Rural Housing Finance Limited 51.19% (“MRHFL”) 49% Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) Mahindra & Mahindra Financial Services Limited 100% Mahindr
Slide 5: Our Journey
Our Journey Commenced housing finance Maiden Retail NCD Issue Long term debt rating business through MRHFL Maiden QIP Issue of Rs. 4.26 Bn of Rs. 1000 crores. upgraded to AAA by Oversubscribed over 7 India Ratings and Raised Rs. 4.14 Bn through JV with Rabobank subsidiary for times over base issue s
Slide 6: Shareholding Pattern (as on 31st March, 2018)
Shareholding Pattern (as on 31st March, 2018) Shareholding Pattern Chart Top 10 Public Shareholders Blackrock Global Funds Asian Dragon Fund 7.29% 11.57% Blackrock Global Funds - Asian Growth Leaders Fund HDFC Standard Life Insurance Company Limited Franklin Templeton Investment Funds 51.19%
Slide 7: 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 7
Slide 8: Auto Industry: Long term growth potential
Auto Industry: Long term growth potential `Expansion in Addressable market with Low Cost of Ownership Decile-wise penetration (Urban versus Rural) 55% 350 44.5% 295 45% 300 272 251 250 35% 200 25% 18.6% 150 94 15% 10.0% 100 73 3.0% 4.5% 5.5% 6.0% 35 39 5% 0.4% 0.8% 1.7% 11.3% 50 26 16 4.0% 0 -5% 0.2
Slide 9: Passenger Vehicles Industry: Overall Demand Drivers
Passenger Vehicles Industry: Overall Demand Drivers FY 07 – FY12 FY 12 – FY 17 FY 17 – FY 22 (P) Small cars and UV expected to continue growth due to new launches Small Cars 14% 2% 8% – 10% Compact UV‟s gained momentum in the back of Large Cars 8% (8%) 4% – 6% aggressive pricing, premium feature
Slide 10: Commercial Vehicles Industry: Overall Demand Drivers
Commercial Vehicles Industry: Overall Demand Drivers FY 12 – FY 17 FY 17 – FY 22 (P) Indian Industry GVA has been tepid for the last five year (~ 5.1%), expected to grow at higher pace in next 5 years MHCV (goods) (3.1%) 6% – 8% Increased outlay for infrastructure and improved NHAI execution LCV
Slide 11: Tractors Industry: Overall Demand Drivers
Tractors Industry: Overall Demand Drivers Industry - Tractors FY 2016 FY 2017 FY 2018 FY 17 – FY 22 (P) Volume Growth Volume Growth Volume Growth Growth Tractors 493,764 (10%) 582,844 18% 711,478 22% 8% – 10% * West India (on the back of lower tractor penetration) and South India (low base) projecte
Slide 12: Auto Industry Volume
Auto Industry Volume Domestic Sales FY18 FY17 Y-o-Y FY16 (Volume in „000) (Nos.) (Nos.) Growth (%) (Nos.) Passenger Vehicles (PVs) Passenger Cars / Vans 2,173 2,103 3% 2,025 UV‟s 1,114 944 18% 764 Commercial Vehicles (CVs) M&HCVs 340 302 13% 302 LCVs 516 412 25% 383 Three Wheelers 640 512 25% 538 Tr
Slide 13: Automobile Finance Market: 5 years Projected Growth
Automobile Finance Market: 5 years Projected Growth@14-16% Growth in New Vehicle Finance Disbursements 5 year CAGR (% growth YoY) FY12E FY13E FY14E FY15E FY16E FY17E FY18P (FY22P) Cars 8% (7%) (6%) 3% 17% 8% 9% 13% – 15% Utility Vehicles 16% 39% (6%) 1% 12% 34% 23% 18% – 20% Source: CRISIL Research,
Slide 14: Housing Finance Growth
Housing Finance Growth Growth in Housing Finance Disbursements 9,519 10,000 Loan Book growth expected to expand at 18% - 20% CAGR 9,000 from Rs. 14.3 trillion (2016-17) to Rs. 33.5 trillion (2021-22). 8,000 7,000 High government support and increasing demand/ 6,000 Rs. Bn. penetration in Tier II
Slide 15: 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 15
Slide 16: 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 17: Extensive Branch Network
Extensive Branch Network Extensive branch network with presence in 27 states and 4 union territories in India through 1,284 offices Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of JK 20 HP 28 35 UC 1,284 PB 30 19 1,108 1,167 1,182 HR Delhi Sikk
Slide 18: 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 19: Break down of estimated value of Assets Financed
Break down of estimated value of Assets Financed Year ended Year ended Year ended Asset Class March – 18 March – 17 March – 16 Auto/ Utility vehicles 26% 28% 30% Tractors 18% 19% 15% Cars 20% 22% 22% Commercial vehicles and Construction equipments 13% 11% 11% Pre-owned vehicles 14% 13% 16% SME and O
Slide 20: Break down of AUM
Break down of AUM As on As on As on Asset Class March – 18 March – 17 March – 16 Auto/ Utility vehicles 27% 30% 31% Tractors 17% 17% 17% Cars 22% 23% 24% Commercial vehicles and Construction equipments 14% 13% 12% Pre-owned vehicles 8% 9% 10% SME and Others 12% 8% 6% As on 31st Mar 18, ~45% of the A
Slide 21: Break down by Geography
Break down by Geography Central CENTRAL West 9% WEST 9% 21% 19% East EAST 23% 23% Loan Assets Disbursement as on Mar 2018 SOUTH For FY2018 South 19% 20% North NORTH 27% 30% NORTH: Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttaranchal; EAST: As
Slide 22: 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 IND AAA Stable Short term debt IND A1+ -- CARE Ratings Outlook Long term and Subordinated debt CARE AAA Stab
Slide 23: 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 (Mar’ 18) Funding Mix by type of Instrument (Mar’ 18) Investor Type Amount (INR mn.) % Share Instrument Type Amount (INR mn.) % Share NCDs 173,864 43% Ban
Slide 24: 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 25: 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 25
Slide 26: Key Financials (Consolidated)
Key Financials (Consolidated) Figures on consolidated basis Total Income Profit after Tax Value of Asset Financed^ Q4 FY 18 Rs 25,066 mn Rs 4,999 mn Rs 128,903 mn 18% 80% 41% Q4 FY 17 Rs 21,326 mn Rs 2,782 mn Rs 91,713 mn FY 18 Rs 85,735 mn Rs 10,239 mn Rs 405,621 mn 19% 100% 20% FY 17 Rs 72,007 mn
Slide 27: Key Financials
Key Financials Figures on standalone basis NPA Total Income Profit after Tax Value of Asset Financed Recognition Q4 FY 18 Rs 20,738 mn Rs 4,245 mn 3 months overdue Rs 118,610 mn 13% 81% 42% Q4 FY 17 Rs 18,427 mn Rs 2,341 mn 4 months overdue Rs 83,764 mn Rs 72,061 mn Rs 8,919 mn 3 months overdue Rs 3
Slide 28: Growth Trajectory
Growth Trajectory Figures on standalone basis Loan Book (Rs. Bn) Revenues (Rs. Bn) 510.04 72.06 423.56 366.62 59.05 62.38 329.33 55.85 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Profit after Tax (1) (Rs. Bn) Book Value Per Share (2) (Rs.) 8.92 8.32 150.6 6.73 4.00 113.9 107.0 99.7 FY15 FY16 FY17 FY18 F
Slide 29: Financial Performance
Financial Performance Figures on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 2.5% 1.8% 1.9% 42.9% 39.7% 36.1% 32.6% 1.0% FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Return on Net Worth (RONW) (%) Asset Quality NPA Recognition 5 months 4 months 4 months 3 months (months)
Slide 30: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in Million) Q4FY18 Q3FY18 Q-o-Q Q4FY17 Y-o-Y Revenue from operations 20,600 18,340 12.3% 18,255 12.8% Less: Finance cost 7,550 7,629 -1.0% 7,137 5.8% NII 13,050 10,711 21.8% 11,117 17.4% Other Income 138 124 11.3% 173 -19.9% Total Income 13,188 10,83
Slide 31: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in Million) FY18 FY17 Y-o-Y FY16 Revenue from operations 71,471 61,739 15.8% 58,532 Less: Finance cost 30,004 28,574 5.0% 26,393 NII 41,467 33,165 25.0% 32,139 Other Income 590 636 -7.2% 519 Total Income 42,057 33,801 24.4% 32,658 Employee benefits e
Slide 32: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in Million) As on Mar 31, 2018 As on Mar 31, 2017 As on Mar 31, 2016 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,229 1,130 1,129 b) Reserves and Surplus 91,802 63,642 59,752 Shareholders' funds 93,031 64,772 60,881 Non-current liabilities a
Slide 33: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in Million) As on Mar 31, 2018 As on Mar 31, 2017 As on Mar 31, 2016 ASSETS Non-current assets a) Fixed Assets 1,197 1,120 1,135 b) Non-current investments 14,579 13,117 9,923 c) Deferred tax assets (Net) 7,939 7,317 5,853 d) Long-term loans and adv
Slide 34: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in Million) FY18 FY17 Y-o-Y FY16 Revenue from operations 85,331 71,462 19.4% 65,539 Less: Finance cost 34,263 31,862 7.5% 28,683 NII 51,068 39,600 29.0% 36,856 Other Income 404 545 -25.9% 436 Total Income 51,472 40,145 28.2% 37,292 Employee benefit
Slide 35: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in Million) As on Mar 31, 2018 As on Mar 31, 2017 As on Mar 31, 2016 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,229 1,130 1,129 b) Reserves and Surplus 97,923 68,471 63,565 Shareholders' funds 99,152 69,602 64,694 Minority Interest 1,439
Slide 36: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in Million) As on Mar 31, 2018 As on Mar 31, 2017 As on Mar 31, 2016 ASSETS Non-current assets a) Fixed Assets 1,524 1,345 1,291 b) Non-current investments 7,766 7,979 6,522 c) Deferred tax assets (Net) 8,232 7,572 5,992 d) Long-term loans and adv
Slide 37: Summary & Key Ratios
Summary & Key Ratios Figures on standalone basis Year ended Year ended Year ended Particulars (Rs. in Million) March – 18 March – 17 March – 16 RONW (Avg. Net Worth) ^ 11.3% 6.4% 11.4% Debt / Equity 4.24:1 5.33:1 4.84:1 Capital Adequacy$ 22.0% 17.2% 17.3% Tier I 16.1% 12.8% 14.6% Tier II 5.9% 4.4% 2
Slide 38: Spread Analysis
Spread Analysis Figures on standalone basis Year ended Year ended Year ended Particulars (Rs. in Million) March – 18 March – 17 March – 16 Total Income / Average Assets 15.0% 15.2% 16.3% Interest / Average Assets 6.2% 7.0% 7.3% Gross Spread 8.8% 8.2% 9.0% Overheads / Average Assets 3.5% 3.5% 3.2% Wr
Slide 39: NPA Analysis
NPA Analysis Figures on standalone basis Particulars (Rs. in Million) As on Mar 31, 2018 As on Mar 31, 2017 As on Mar 31, 2016 Recognition Basis 3 months overdue 4 months overdue 4 months overdue 4 months overdue Gross Non - Performing Assets 46,987 42,336 41,827 32,242 Less: NPA Provisions (incl. I
Slide 40: 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 40
Slide 41: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Year ended Year ended Year ended Particulars (Rs. million) March – 18 March – 17 March – 16 Loans disbursed 27,892 21,162 15,525 No. of Customer Contracts (nos.) 218,572 172,462 125,074 Outstanding loan book 62,476 48,235 32,645 Total income 10,000 7,034 4,954
Slide 42: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Year ended Year ended Particulars (Rs. million) March – 18 March – 17 March – 16 No. of Policies for the Period (nos.) 2,058,613 1,591,796 1,330,929 Total income 2,451 1,742 1,492 Net Premium 17,490 13,644 10,870 PBT 812 817 752 PAT 522 530 485 No. of em
Slide 43: 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 43
Slide 44: Awards and Accolades
Awards and Accolades ■ Mahindra Finance was recognized as Top 19 in Aon Best Employer List 2017 ■ Mahindra Finance has been ranked at 49th position in India‟s Best Companies to Work for, 2017 by The Great Place to Work Institute and Economic Times ■ Mahindra Finance has been appraised and rated at P
Slide 45: 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 45
Slide 46: Conservative Risk Management Policies
Conservative Risk Management Policies Provisioning Norms Duration (months) RBI Norms Duration (months) MMFSL > 4 and <= 14 10% > 3 and <= 11^ 10% > 14 and <= 26 20% > 11 and <= 24 50% > 26 and <= 50 30% > 24 months* 100% > 50 months 50% • The Company considered the estimated realisable value of unde
Slide 47: 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 48: Thank You
Thank You Transforming rural lives across the country 48
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