Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q3 FY2021 Earnings Presentation
50 slides from Mahindra & Mahindra Financial Services's earnings presentation, Jan 28, 2021
Slide 1: Cover letter to stock exchanges on investor presentation
Mahindra & Mahindra Mahindra FINANCE 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 28th January, 2021 The General Manager-Department of The Manager-Listing Department, Corporate Service
Slide 2: Quarter Result Update December 2020
Mahindra & Mahindra Financial Services Limited Quarter Result Update December - 2020 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 957 billion)* About MMFSL: MMFSL (Mcap: Rs 212 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban sector
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”) 52.16% 49% Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) 51%(3) Mahindra Manulife Investment Management Mahindra
Slide 6: Our Journey
Our Journey Commenced housing finance Maiden Retail NCD Issue business through MRHFL Maiden QIP Issue of Rs. 4.26 Bn of Rs. 1000 crores. Oversubscribed over 7 JV with Rabobank subsidiary for times over base issue size Completed Rights Raised Rs. 4.14 Bn through Issue of Rs. 3089 Private Equity tract
Slide 7: Shareholding Pattern (as on December 31, 2020)
Shareholding Pattern (as on December 31, 2020) Shareholding Pattern Top 10 Public Shareholders Life Insurance Corporation Of India 10.84% HDFC Life Insurance Company Limited Wishbone Fund, Ltd. 15.48% Government Pension Fund Global 52.16% Valiant Mauritius Partners Offshore Limited 21.22%
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 Q3FY21 Q3FY20 Y-o-Y 9MFY21 9MFY20 Y-o-Y (Volume in ‘000) (Nos.) (Nos.) Growth (%) (Nos.) (Nos.) Growth (%) Passenger Vehicles (PVs) Passenger Cars / Vans 522 476 10% 1,028 1,291 (20%) UV’s 376 309 22% 749 827 (9%) Commercial Vehicles (CVs) M&HCVs 51 54 (5%) 80 176
Slide 10: Automobile Finance Market: 5 years Projected Growth
Automobile Finance Market: 5 years Projected Growth Segment-wise growth in disbursement FY 14 E CAGR FY 20 E FY 21 (P) FY 22 (P) FY 23 (P) CAGR (Rs. Bn.) FY 14 – FY 20 (Rs. Bn.) (Rs. Bn.) (Rs. Bn.) (Rs. Bn.) FY 20 – FY 23 (P) Passenger vehicle 696 8% 1,128 973 1,170 1,340 6% Commercial vehicle 319 9
Slide 11: Housing Finance Growth
Housing Finance Growth Housing Portfolio Size and Market Share Housing credit growth expected to slow down post Covid-19. Rs. Tn. HFCs Banks 25 Housing Credit outstanding to grow by 3%-5% in FY21 and 7%- 21.3 9% in FY22. 20 18.5 Growth Rate of Banks to be double of HFC in FY 21 due to lower 15 1
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 27 states and 7 union territories in India through 1,246 offices Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of 2 20 27 35 1,284 1,321 1,322 20 1,182 1,246 34 17 3 2 73 39 126
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: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives All our offices are connected to the centralised data centre in Training programs for employees on regular basis Mumbai through Lease line/tablets 5 days induction program on product knowledge,
Slide 17: Break down of Disbursements
Break down of Disbursements on standalone basis Nine months ended Nine months ended Year ended Asset Class Dec – 20 Dec – 19 March – 20 Auto/ Utility vehicles 35% 28% 29% Tractors 20% 16% 15% Cars 21% 20% 19% Commercial vehicles and Construction equipments 5% 17% 17% Pre-owned vehicles 10% 15% 16% S
Slide 18: Break down of Business Assets
Break down of Business Assets on standalone basis As on As on As on Asset Class December – 20 December – 19 March – 20 Auto/ Utility vehicles 30% 27% 27% Tractors 17% 17% 17% Cars 22% 21% 21% Commercial vehicles and Construction equipments 17% 18% 19% Pre-owned vehicles 9% 10% 10% SME and Others 5%*
Slide 19: Break down by Geography
Break down by Geography on standalone basis West Central 16% 12% 14% 10% South East Loan Assets Disbursement 24% 20% 27% 18% 9M FY2021 as on December, 2020 North 29% 30% NORTH: Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttaranchal; EAST: Aruna
Slide 20: 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 and Subordinated debt (incl. MLD); Bank Facilities Stable IND PP-MLD AAA emr Short term debt IND A1+ -- CARE Ratings Outlo
Slide 21: Broad Based Liability Mix
Broad Based Liability Mix on standalone basis All figures in INR million Working Capital Consortium Facility enhanced to Rs. 20,000 mn. comprising several banks Funding Mix by type of Instrument (Dec’20) Funding Mix by type of Instrument (Dec’20) Investor Type Amount (INR mn.) % Share Instrument Typ
Slide 22: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR billion 800 200% Cumulative Inflow Cumulative Outflow Cumulative Mismatch % 180% 700 668 576 160% 600 521 140% 500 453 120% 400 100% 300 300 80% 198 188 60% 200 130 116 40% 100 76 99 62 26 36 20% 0 0% Upto Upto Upto Upto Upto Upto Upto 1 month 2
Slide 23: Financial Information - Standalone
Company Overview Industry Overview Business Strategy Financial Information - Standalone Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 22
Slide 24: Key Financials
Key Financials on standalone basis Total Income Profit after Tax Disbursement Q3 FY 21 Rs. 25.75 billion Rs. -2.74 billion Rs. 62.70 billion 2% NA 36% Q3 FY 20 Rs. 26.16 billion Rs. 3.65 billion Rs. 97.78 billion 9M FY 21 Rs. 78.79 billion Rs. 1.85 billion Rs. 130.31 billion 4% 73% 49% 9M FY 20 Rs.
Slide 25: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. Bn) Revenues (Rs. Bn) 102.45 649.93 654.94 88.10 612.50 621.24 75.69 78.79 66.85 485.47 FY18 FY19 FY20 9MFY20 9MFY21 FY18 FY19 FY20 9MFY20 9MFY21 Profit after Tax (2) (Rs. Bn) Book Value Per Share (3) (Rs.) 15.57 184.0 180.1 10.76 176.6 9.06 1
Slide 26: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 2.6% 39.8% 39.7% 2.2% 38.0% 37.3% 26.9% 1.3% 1.3% 0.33% FY18 FY19 FY20 9MFY20 9MFY21 FY18 FY19 FY20 9MFY20 9MFY21 Return on Net Worth (RONW) (2) (%) Asset Quality (%) Gross NPA Net NPA 15.2% 9.76% 9
Slide 27: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in Million) Q3FY21 Q2FY21 Q-o-Q Q3FY20 Y-o-Y FY 20 Revenue from operations (A) 25,418 26,129 -2.7% 25,806 -1.5% 100,979 Less: Finance cost (B) 11,583 12,216 -5.2% 12,088 -4.2% 48,288 NII (C= A+B) 13,835 13,913 -0.6% 13,718 0.9% 52,691 Other Income (D
Slide 28: Standalone Profit & Loss Account
Standalone Profit & Loss Account Nine months ended Nine months ended Particulars (Rs. in Million) Y-o-Y FY20 Dec – 20 Dec – 19 Revenue from operations (A) 77,952 74,610 4.5% 100,979 Less: Finance cost (B) 36,445 35,393 3.0% 48,288 NII (C= A+B) 41,507 39,217 5.8% 52,691 Other Income (D) 841 1,084 -22
Slide 29: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in Million) As on Dec 31, 2020 As on Dec 31, 2019 As on Mar 31, 2020 ASSETS Financial Asset a) Cash and cash equivalents 12,516 3,685 6,768 b) Bank balance other than (a) above 23,600 7,140 7,490 c) Derivative financial instruments 166 129 929 d) Trade Recei
Slide 30: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in Million) As on Dec 31, 2020 As on Dec 31, 2019 As on Mar 31, 2020 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 1,001 425 402 b) Payables i) Trade payables 8,238 8,288 6,063 ii) Other payables 205 278 294 c) Deb
Slide 31: Summary & Key Ratios
Summary & Key Ratios on standalone basis Nine months ended Nine months ended Year ended Particulars Dec – 20 Dec – 19 March – 20 RONW (Avg. Net Worth) ^ 1.9% 8.3% 8.1% Debt / Equity 4.04:1 5.28:1 5.23:1 Capital Adequacy 26.4% 19.6% 19.6% Tier I 21.9% 15.4% 15.4% Tier II 4.5% 4.2% 4.2% EPS (Basic) (R
Slide 32: Spread Analysis
Spread Analysis on standalone basis Nine months ended Nine months ended Year ended Particulars Dec – 20 Dec – 19 March – 20 Total Loan Income / Average Business Assets 14.7% 14.7% 14.9% Total Income / Average Assets 13.9% 14.4% 14.5% Interest / Average Assets 6.4% 6.7% 6.8% Gross Spread 7.5% 7.7% 7.
Slide 33: NPA Analysis
NPA Analysis on standalone basis Particulars (Rs. in Million) except figures in % As on Dec 31, 2020 As on Dec 31, 2019 As on Mar 31, 2020 Business Assets (including Provisions) 665,254 680,179 680,890 Gross NPA (Stage 3) 66,426 57,733 57,467 Less: ECL Provisions (Stage 3) 24,313 13,214 17,802 Net N
Slide 34: Collection Efficiency, Moratorium and Restructuring
Collection Efficiency, Moratorium and Restructuring on standalone basis Collection Efficiency^ October November December Quarter 3 FY 2021 82% 84% 96% 88% FY 2020 88% 95% 95% 93% ^ Computed as (Current month demand collected + Overdues collected)/(Current month demand due for the month) Moratorium A
Slide 35: Stage Wise Provisioning and Covid-19 Management overlay
Stage Wise Provisioning and Covid-19 Management overlay on standalone basis Stage-Wise Assets and Provisioning Particulars As on 31st Dec 2020 As on 30th Sep 2020 (Rs. in Million) Business Assets % Provisions % of BA Business Assets % Provisions % of BA Stage - 1 Assets 505,004 75.91% 7,550 1.5% 578
Slide 36: Financial Information - Consolidated
Company Overview Industry Overview Business Strategy Financial Information - Consolidated Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 35
Slide 37: Key Financials (Consolidated)
Key Financials (Consolidated) on consolidated basis Total Income Profit after Tax Disbursement Q3 FY 21 Rs. 29.93 billion Rs. -2.23 billion Rs. 65.37 billion 3% NA 36% Q3 FY 20 Rs. 30.81 billion Rs. 4.75 billion Rs. 102.16 billion 9M FY 21 Rs. 91.32 billion Rs. 5.61 billion Rs. 134.04 billion 3% % 3
Slide 38: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in Million) Q3FY21 Q2FY21 Q-o-Q Q3FY20 Y-o-Y FY 20 Revenue from operations (A) 29,580 30,351 -2.5% 30,461 -2.9% 118,830 Less: Finance cost (B) 13,118 13,685 -4.1% 13,514 -2.9% 53,906 NII (C= A+B) 16,462 16,666 -1.2% 16,947 -2.9% 64,924 Other Income
Slide 39: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Nine months ended Nine months ended Particulars (Rs. in Million) Y-o-Y FY20 Dec – 20 Dec – 19 Revenue from operations (A) 90,497 87,820 3.0% 118,830 Less: Finance cost (B) 40,815 39,599 3.1% 53,906 NII (C= A+B) 49,682 48,221 3.0% 64,924 Other Income (D) 825 743 11.
Slide 40: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in Million) As on Dec 31, 2020 As on Dec 31, 2019 As on Mar 31, 2019 ASSETS Financial Asset a) Cash and cash equivalents 17,171 4,014 5,372 b) Bank balance other than (a) above 31,448 7,140 4,568 c) Derivative financial instruments 166 129 100 d) Trade Rec
Slide 41: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in Million) As on Dec 31, 2020 As on Dec 31, 2019 As on Mar 31, 2019 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 1,001 425 770 b) Payables i) Trade payables 9,812 9,294 11,143 ii) Other payables 205 278 342 c)
Slide 42: Key Subsidiaries
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 41
Slide 43: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Nine Months ended Nine Months ended Year ended Particulars (Rs. million) Q3FY21 Q3FY20 December – 20 December – 19 March – 20 Loans disbursed 2,671 4,372 3,728 14,652 18,764 No. of Customer Contracts (nos.) 11,558 21,387 14,622 74,050 95,523 Loans & Advances (n
Slide 44: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Nine Months ended Nine Months ended Year ended Particulars (Rs. million) Q3FY21 Q3FY20 December – 20 December – 19 March – 20 No. of Policies for the Period (nos.) 444,286 606,261 978,443 1,698,407 2,233,711 Net Premium 5,231 5,872 12,105 14,890 20,791 Total income
Slide 45: Awards & Accolades
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 44
Slide 46: Awards and Accolades
Awards and Accolades ■ Awarded the Indian Oil Logistics Award CV Financer of the Year 2019; ■ Awarded the 1st position for Excellence in Cost Management – 2018 at the 16th National Awards for “Excellence in Cost Management – 2018” in Banking, Financial Services and Insurance Category; ■ Awarded the
Slide 47: Risk Management Policies
Company Overview Industry Overview Business Strategy Financial Information Key Subsidiaries Awards & Accolades Risk Management Policies Transforming rural lives across the country 46
Slide 48: 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 49: 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 50: Thank You
Thank You Transforming rural lives across the country 49
Mahindra & Mahindra Financial Services — Q3 FY2021 Earnings Presentation on 6ix