Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q1 FY2024 Earnings Presentation
51 slides from Mahindra & Mahindra Financial Services's earnings presentation, Jul 28, 2023
Slide 1: Exchange filing letter: Earnings Presentation Q1 FY24
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 28th July 2023 To, BSE Limited, (Scrip Code: 532720) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001 N
Slide 2: Quarter Result Update June 2023
Mahindra & Mahindra Financial Services Limited Quarter Result Update June - 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: +91
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 (1/2)
Executive summary (1/2) Key Highlights ✓ Asset Growth momentum sustained with Loan Book* at ₹ 86,732 Cr.; YoY growth of 28.1%; Sequential growth of 4.8% ➢ Market leadership position maintained for M&M auto and Tractors ✓ Asset Quality (GS-3) continued to be healthy (4.3% vs. 4.5% in Mar-2023) ➢ Stro
Slide 5: Executive summary (2/2)
Executive summary (2/2) Asset Quality ✓ Sustained improvement in Asset Quality across Stage 3 and Stage 2 ➢ Gross Stage 3 at 4.3% in comparison to 8.0% as of Jun-22 ➢ Gross Stage 2 at 6.4% in comparison to 11.7% as of Jun-22 ✓ Provision coverage on Stage-3 assets maintained @ 60.1% in Jun-23 ✓ Colle
Slide 6: Business Strength
Business Strength Capital Adequacy Gross Stage-3 Stage 3 - Coverage Ratio 27.8% 7.7% 8.0% 25.9% 60.1% 59.5% 22.5% 4.5% 4.3% 58.1% 58.1% 21.2% Mar-22 Jun-22 Mar-23 Jun-23 Mar-22 Jun-22 Mar-23 Jun-23 Mar-22 Jun-22 Mar-23 Jun-23 Well capitalized Asset Quality under control Prudent 5
Slide 7: On path to achieving Mission 2025: Progress (Q1FY24)
On path to achieving Mission 2025: Progress (Q1FY24) New Business Stable Asset Quality 2x AUM* Contribution GS-3 < 6% 15% Q1 FY24: 4.3% Q1 FY24: 1.34x* Q1FY24: ~6% Operating Leverage Maintain Cost To RoA NIMs ~7.5% Assets ~2.5% ~2.5% Q1FY24: 6.8% Q1FY24: 2.8% Q1FY24: 1.4% * Refers to growth over Bus
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 FY 2024 12,165 - - - - 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^ Apr May Jun Q1 Q2 Q3 Q4 FY FY 2024 92% 96% 96% 94% - - - - FY 202
Slide 10: Break down of Disbursements
Break down of Disbursements on Standalone Basis Quarter ended Quarter ended Year ended Asset Class June – 23 June – 22 March – 23 Auto/ Utility vehicles 35% 33% 33% Tractors 13% 13% 12% Cars 20% 18% 18% Commercial vehicles and Construction equipments 11% 12% 12% Pre-owned vehicles 17% 16% 17% SME 3%
Slide 11: Break down of Business Assets
Break down of Business Assets on Standalone Basis Quarter ended Quarter ended Year ended Asset Class June – 23 June – 22 March – 23 Auto/ Utility vehicles 33% 32% 30% Tractors 13% 16% 17% Cars 21% 22% 22% Commercial vehicles and Construction equipments 11% 12% 16% Pre-owned vehicles 12% 11% 9% SME 5
Slide 12: Break down by Geography
Break down by Geography on Standalone Basis June 2023 Q1 FY 2024 18% 16% 10% June 2022 11% Q1 FY 2023 16% 10% 19% 11% 20% 19% 19% Business 21% Disbursement * 20% 19% 25% 19% Assets 31% 30% 34% 31% CENTRAL EAST NORTH SOUTH WEST CENTRAL EAST NORTH SOUTH WEST NORTH: Chandigarh, Delhi, Haryana, Himachal
Slide 13: Broad Based Liability Mix
Broad Based Liability Mix on Standalone Basis Funding Mix by Investor Category Funding Mix by type of Instrument Jun’ 23 Mar’23 Jun’22 Jun’ 23 Mar’23 Jun’22 Investor Type Instrument Type Amount % Share % Share % Share Amount % Share % Share % Share Banks / Financial NCDs 20,562 25.9% 26.7% 25.4% 43,
Slide 14: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR crores 1,00,000 95,075 180% Cumulative Inflow Cumulative Outflow Cumulative Mismatch% 81,899 160% 80,000 75,054 140% 65,892 120% 60,000 100% 44,284 80% 40,000 29,946 28,441 60% 20,886 20,000 13,165 14,410 40% 8,195 6,372 9,508 4,099 20% - 0% Upt
Slide 15: Key Financials
Key Financials on standalone basis Disbursement Total Income Profit after Tax Q1 FY 24 Rs. 12,165 crores Rs. 3,125 crores Rs. 353 crores 28% 25% 58% Q1 FY 23 Rs. 9,472 crores Rs. 2,499 crores Rs. 223 crores 14
Slide 16: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. crores) Revenues (Rs. crores) 83,241 10,517 11,056 79,455 9,719 59,947 60,445 63,099 3,125 2,499 FY21 FY22 FY23 Q1 FY23 Q1 FY24 FY21 FY22 FY23 Q1 FY23 Q1 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% 2.3% 39.6% 40.3% 35.8% 28.2% 1.3% 1.4% 1.2% 0.4% FY21 FY22 FY23 Q1 FY23 Q1 FY24 FY21 FY22 FY23 Q1 FY23 Q1 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) Q1FY24 Q1FY23 Y-o-Y FY23 Revenue from operations (A) 3,085 2,486 24% 10,929 Less: Finance cost (B) 1,451 931 56% 4,577 NII (C= A+B) 1,634 1,555 5% 6,352 Other Income (D) 41 12 234% 127 Total Income (E=C+D) 1,675 1,567 7% 6,479 Employee ben
Slide 19: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in crores) As on Jun 30, 2023 As on Jun 30, 2022 As on Mar 31, 2023 ASSETS Financial Asset a) Cash and cash equivalents 245 505 250 b) Bank balance other than (a) above 2,777 3,160 2,582 c) Derivative financial instruments - 55 d) Trade Receivables 17 16 22
Slide 20: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in crores) As on Jun 30, 2023 As on Jun 30, 2022 As on Mar 31, 2023 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 244 206 181 b) Payables i) Trade payables 917 782 1,126 ii) Other payables 26 29 40 c) Debt Securiti
Slide 21: Summary & Key Ratios
Summary & Key Ratios on standalone basis Quarter ended Quarter ended Year ended Particulars Jun – 23 Jun – 22 March – 23 RONW (Avg. Net Worth) - annualised 8.2% 5.7% 12.1% Debt / Equity 4.52:1 3.75:1 4:39:1 Capital Adequacy 21.2% 25.9% 22.5% Tier I 18.9% 22.8% 19.9% Tier II 2.3% 3.1% 2.6% EPS (Basic
Slide 22: Spread Analysis
Spread Analysis on standalone basis Quarter ended Quarter ended Quarter ended Year ended Particulars Jun – 23 Jun – 22 Mar – 23 March – 23 Total Loan Income / Average Business Assets 13.3% 13.7% 13.6% 13.5% Total Income / Average Assets 12.7% 13.0% 13.1% 12.9% Interest cost / Average Assets 5.9% 4.8
Slide 23: Stage 3 - Analysis
Stage 3 - Analysis on standalone basis Particulars (Rs. in crores) except figures in % Jun 30, 2023 Jun 30, 2022 Mar 31, 2023 Mar 31, 2022 Business Assets (including Provisions) 86,732 67,693 82,770 64,961 Gross Stage 3 3,770 5,436 3,717 4,976 Less: Stage 3 ECL Provisions 2,267 3,157 2,210 2,890 Net
Slide 24: Credit Charge
Credit Charge on standalone basis Particulars (Rs. in crores) Q1FY24 Q1FY23 FY23 FY22 Stage-1 Provisions 64 68 117 22 Stage-2 Provisions 77 (260) (651) 295 Stage-3 Provisions 72 267 (680) (462) Provisions – P&L Charge 213 75 (1,214) (145) Write-Offs 313 570 2,213 2,513 Total 526 645 999 2,368 Figure
Slide 25: Stage Wise Provisioning
Stage Wise Provisioning on standalone basis Stage-Wise Assets and Provisioning As on 30th Jun 2023 As on 30th Jun 2022 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 26: Financial Information – Consolidated
Providing financial solutions to Emerging India Executive Summary Financial Information – Consolidated Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 27: Key Financials (Consolidated)
Key Financials on consolidated basis Disbursement Total Income Profit after Tax Q1 FY 24 Rs. 12,500 crores Rs. 3,637 crores Rs. 362 crores 26% 25% 51% Q1 FY 23 Rs. 9,890 crores Rs. 2,914 crores Rs. 240 crores
Slide 28: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) Q1FY24 Q1FY23 Y-o-Y FY23 Revenue from operations (A) 3,583 2,902 23% 12,699 Less: Finance cost (B) 1,597 1,052 52% 5,094 NII (C= A+B) 1,986 1,850 7% 7,605 Other Income (D) 54 12 354% 133 Total Income (E=C+D) 2,040 1,862 10% 7,738 Employe
Slide 29: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in crores) As on Jun 30, 2023 As on Jun 30, 2022 As on Mar 31, 2023 ASSETS Financial Asset a) Cash and cash equivalents 595 905 587 b) Bank balance other than (a) above 3,621 3,426 3,480 c) Derivative financial instruments - 55 - d) Trade Receivables 122 7
Slide 30: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in crores) As on Jun 30, 2023 As on Jun 30, 2022 As on Mar 31, 2023 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 245 206 181 b) Payables i) Trade payables 1,084 923 1,246 ii) Other payables 26 30 40 c) Debt Secu
Slide 31: Subsidiary Financials
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 32: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Year ended Year ended Particulars (Rs. in crores) Q1FY24 Q1FY23 March -23 March -22 Loans disbursed 289 395 2,004 1,602 Loans & Advances (net) 6,626 6,974 6,845 7,029 Total income 342 329 1,350 1,377 PBT -30 2 26 58 PAT -23 2 22 48 Net-worth 1,461 1,456 1,482 1
Slide 33: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Year ended Particulars (Rs. in crores) Q1FY24 Q1FY23 March -23 March -22 No. of Policies for the Period (nos.) 5,29,834 5,02,358 29,10,954 18,63,160 Net Premium 852 635 3,420 2,360 Total income 164 89 427 348 PBT 24 3 46 70 PAT 17 2 34 52 No. of employee
Slide 34: Mahindra Ideal Finance Limited
Mahindra Ideal Finance Limited Year ended Year ended Particulars (in LKR Mn) Q1FY24 Q1FY23 March -23 March -22 Loans disbursed 1,737 1,017 9,907 10,140 Loans & Advances (net) 6,871 6,654 7,124 7,230 Total income 561 396 1,924 1,322 PBT* 79 45 248 401 PAT 25 15 87 239 Net-worth 2,860 2,761 2,835 2,74
Slide 35: Company Overview
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 36: Company Background
Company Background Parentage Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (M.Cap: Rs 1.80 trillion)* About MMFSL MMFSL (M.Cap: Rs 385 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban secto
Slide 37: MMFSL Group structure
MMFSL Group structure Mahindra & Mahindra Limited 52.16% Mahindra & Mahindra Financial Services Limited 80%(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 Investment
Slide 38: 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 39: Shareholding Pattern (as on June 30, 2023)
Shareholding Pattern (as on June 30 , 2023) Shareholding Pattern Top 10 Public Shareholders 6.83% ▪ Life Insurance Corporation of India ▪ HDFC Life Insurance Company Limited ▪ HDFC Mutual Fund 26.95% ▪ SBI Mutual Fund 52.16% ▪ Axis Mutual Fund Trustee Limited. ▪ Kotak Mahindra Trustee Co. Ltd ▪ Gove
Slide 40: Business Strategy
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 41: 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 42: 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 41
Slide 43: 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% 42
Slide 44: Extensive Branch Network
Extensive Branch Network ▪ Extensive branch network with presence in 27 states and 7 union Coverage territories in India through 1,367 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 45: 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 46: 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 47: 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 emr Short term debt IND A1+ - CRISIL Outlook Long term and Subordinated debt; Bank Facilities; CRISIL AAA Stable Fixed Deposit Programme Short term
Slide 48: Awards & CSR Initiatives
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 49: Awards & Accolades
Awards & Accolades 1st NBFC in India to join the United Special Commendation at CSR Happiest Workplace for Women Nations Global Compact Network Journal Excellence Awards 2022 Included in FTSE4Good Emerging Gold at CSR Times Awards 2022 Great Place to Work Markets Index for 4th consecutive time Impro
Slide 50: 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 51: Thank You
Providing financial solutions to Emerging India Thank You
Mahindra & Mahindra Financial Services — Q1 FY2024 Earnings Presentation on 6ix