Aditya Birla Capital Ltd. · NSE:ABCAPITAL

Aditya Birla Capital — Investor Presentation (January 2019)

50 slides from Aditya Birla Capital's investor presentation, Jan 11, 2019

  1. Slide 1: Corporate Presentation – Aditya Birla Capital Limited

    Corporate Presentation January 2019 A leading Financial Services Conglomerate Aditya Birla Capital Limited

  2. Slide 2: Table of contents

    Table of contents 1 | Overview Pg. 3 - 7 2 | Business-wise Performance Pg. 8 - 41 3 | Aggregate Financials Pg. 42 - 45 4 | Annexures Pg. 46 - 50 NOTE 1: The financials of Aditya Birla Capital are consolidated financials prepared as per Indian GAAP for periods up to FY18. NOTE 2: ABCL has adopted Ind

  3. Slide 3: Integrated financial services platform

    Integrated financial services platform Solutions across the customer lifecycle Comprehensive Money Solutions for PROTECTING INVESTING FINANCING ADVISING Individuals and Businesses Pan India presence 1 800+ 400+ 200,000+ 340+ Branches Cities Agents & channel partners Banks & national distributors Rs.

  4. Slide 4: Our approach

    Our approach Leveraging Market Opportunities Product Increasing Reach Innovation and Performance Balanced and Capturing Customer Life Leveraging Profitable Time Value Synergies Growth Strengthening Enablers - Risk, Retailisation Technology and Analytics 4

  5. Slide 5: Established track record

    Established track record Creating businesses with scale and market leadership Established businesses with market leadership Emerging businesses Asset Management NBFC Life Insurance Housing Finance Health Insurance Established in 1994 Established in 1991 Established in 2001 Established in 2014 Establ

  6. Slide 6: Delivering strong financial performance (1/2)

    Delivering strong financial performance (1/2) Figures in Rs. Crore PROTECTING INVESTING FINANCING 34% 11% 30% 2,862 271,556 57,945 2,130 244,609 44,675 H1 FY18 H1 FY19 H1 FY18 H1 FY19 H1 FY18 H1 FY19 Premium1 AAUM2 Lending Book3 1 | 60% Ind. APE growth in Life Insurance, 1 | Equity AAUM crosses Rs.

  7. Slide 7: Delivering strong financial performance (2/2)

    Delivering strong financial performance (2/2) Figures in Rs. Crore PBT for Established Businesses grew by Consolidated Revenue 𝟐 37% y-o-y 1 21% Emerging Businesses on a steady path to 13,428 32% 11,071 achieving scale and profitability 7,374  HFC delivering strong growth in profits 5,596  Health

  8. Slide 8: Aditya Birla Finance Limited

    Aditya Birla Finance Limited 8

  9. Slide 9: A well diversified portfolio with value accretive growth

    A well diversified portfolio with value accretive growth Figures in Rs. Crore Amongst Top 5 Private Diversified NBFCs CAGR 33% 24% 48,061 Mid + Large 43,242 + Others 38,898 34,703 Balanced loan book growth with focus Strong 25,755 on higher margin segments growth in 17,588 SME + Retail lending Lendi

  10. Slide 10: Multi-product portfolio catering to a range of customer needs

    Multi-product portfolio catering to a range of customer needs Retail (12% of Loan Book) 1 SME (27% of Loan Book) 1 6% 4% 3% 20% 16% 10% TL/ WCDL 11% 14% 12% LAP 19% 25% 44% 52% LAP 24% 25% Unsecured and Digital LRD 27% 24% 25% 61% Supply Chain Finance LAS 41% 38% 33% 35% Broker Funding 31% FY 1 7 FY

  11. Slide 11: Strong focus on quality of book

    Strong focus on quality of book Figures in Rs. Crore Delivered consistent loan book growth High quality corporate book with CAGR 33% 43,242 48,061 Diversified loan book with Average median internal rating of “A” 1 34,703 25,755 Ticket Size (ATS) of Rs. 40 Lakh 3 60%+ exposure to borrowers with credi

  12. Slide 12: Stable margins across interest rate cycles

    Stable margins across interest rate cycles Average Yield Demonstrating ability to successfully pass 13.1% 12.6% on borrowing cost increases Yield across 11.9% 11.4% 11.4% 11.7% interest rate NIM maintained at 4.6% – 5.0% over FY15-H1 FY19 cycles FY15 FY16 FY17 FY18 H1 FY18 H1 FY19 Competitive Cost o

  13. Slide 13: Well matched ALM with diversified borrowing mix

    Well matched ALM with diversified borrowing mix ALM optimised for liquidity and costs1 Diversification across instruments and investors1 Cummulative Outflows Cummulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% Bank 51% 82% 77% Term Loan 36% 40% 40% NCD 32% Mutual Fund 16% 15% 25% 20% 30% CP

  14. Slide 14: Robust risk management approach

    Robust risk management approach Sourcing and underwriting Continuous monitoring to ensure asset quality Dimension Approach Dimension Approach Committee based approach with focus on rigorous Lifecycle monitoring of Underwriting Automation of identified triggers for key exposure credit appraisal and c

  15. Slide 15: Key Financials – Aditya Birla Finance Limited

    Key Financials – Aditya Birla Finance Limited Figures in Rs. Crore ∆ LY% Full Year (IGAAP) Half Year (Ind AS) ∆ LY% FY 16-17 FY 17-18 Key Performance Parameters FY 17-18 FY 18-19 25% 34,703 43,242 Lending book 38,898 48,061 24% 11.9% 11.4% Average yield 11.45% 11.66% 7.4% 6.7% Interest cost / Avg. L

  16. Slide 16: Aditya Birla Housing Finance Limited

    Aditya Birla Housing Finance Limited 16

  17. Slide 17: Value accretive growth

    Value accretive growth Figures in Rs. Crore Fast growing housing finance company 5.0x 9,884 Lending Book grew ~5x over 2.5 years 1 8,137 Lending Book 4,136 1,973 Focus on building retail granularity Average HL Ticket Size reduced to Rs. 25 Lakh FY16 FY17 FY18 H1 FY19 Affordable Loan book nearly at R

  18. Slide 18: Diversification across products & geographies

    Diversification across products & geographies Segment Mix (%) Geographic Mix (%) 6% 5% 9% 12% 11% 8% 29% 33% 36% 38% 38% 32% 26% 25% 14% 18% 19% 18% 41% 61% 56% 58% 58% 31% 29% 29% 16% 15% 14% 14% FY16 FY17 FY18 H1 FY19 FY16 FY17 FY18 H1 FY19 Home Loans LAP Construction Finance Affordable Housing Ea

  19. Slide 19: Growth along with focus on building retail granularity

    Growth along with focus on building retail granularity Margin accretive customer mix in home loan portfolio Focus on increasing reach and building retail granularity 61 45 27 25 Avg. Ticket Size 1 (Rs. Lakh) 31% 12x 30,528 Salaried Home Loan Book: 19,074 # of Customers Rs. 6,464 Crore Non-Salaried 6

  20. Slide 20: Maintaining margins through interest rate cycles

    Maintaining margins through interest rate cycles Optimised borrowing cost in a hardening 9.1% 8.7% interest rate environment 8.0% 7.7% 7.8% Cost of Borrowing Maintained margins across interest rate cycles FY16 FY17 FY18 H1 FY18 H1 FY19 Demonstrated ability to successfully pass Yield NIM (incl. Fees)

  21. Slide 21: Prudent asset liability management

    Prudent asset liability management Optimised ALM for liquidity and cost1 Diversification in borrowing mix and investor profile1 Cummulative Outflows Cummulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% Term Loan 79% Bank 85% 83% 66% NCD 10% Mutual Fund 10% CP 6% Insurance 3% 23% 27% 27% 21%

  22. Slide 22: Key Financials – Aditya Birla Housing Finance Limited

    Key Financials – Aditya Birla Housing Finance Limited Figures in Rs. Crore ∆ LY% Full Year (IGAAP) Half Year (Ind AS) ∆ LY% FY 16-17 FY 17-18 Key Performance Parameters FY 17-18 FY 18-19 ~2x 4,136 8,137 Lending book 5,777 9,884 ~2x 10.7% 9.9% Average yield 10.10% 9.86% 7.6% 6.9% Interest cost / Avg.

  23. Slide 23: Aditya Birla Sun Life AMC Limited

    Aditya Birla Sun Life AMC Limited 23

  24. Slide 24: Profitable growth aided by improvement in asset mix

    Profitable growth aided by improvement in asset mix Figures in Rs. Crore Market leadership in India with strong CAGR 26% 267,739 271,556 AAUM CAGR of 26% 1 210,742 9,298 10,912 7,390 9,959 7,493 Maintained equity market share in 152,427 8,200 161,079 163,228 Growth in 10,570 challenging market condi

  25. Slide 25: Continued focus on retail expansion

    Continued focus on retail expansion Figures in Rs. Crore HNI Retail + HNI AUM1 at Rs. 125,000+ Crore Increasing 2x 115,504 127,385 Retail 84,212 Grew by 40.3% over FY16-1HFY19 Retail 54,613 71,670 77,656 Penetration 55,806 36,711 43,835 49,729 17,902 28,406 Investor folios up 2.3x in 2.5 years 2 (AU

  26. Slide 26: Balanced Distribution Network

    Balanced Distribution Network Overall AUM Sourcing Mix (%) Equity AUM Sourcing Mix (%) IFA Bank National Distributor Direct IFA Bank National Distributor Direct 17% 19% 19% 42% 43% 45% 24% 22% 22% 19% 19% 17% 15% 23% 17% 13% 13% 11% 40% 42% 44% 22% 25% 27% FY17 FY18 H1 FY19 FY17 FY18 H1 FY19 Balance

  27. Slide 27: Building blocks for retail expansion

    Building blocks for retail expansion Continue to strengthen distribution network Sweat Digital Assets 249 Target to reach 275+ locations by FY19 Digital Transactions as % of Total SIPNOW - Robo advisory Expand to emerging markets website Locations 63% State-of-the-art technology to 88 Increasing pre

  28. Slide 28: Key Financials – Aditya Birla Sun Life AMC Limited

    Key Financials – Aditya Birla Sun Life AMC Limited Figures in Rs. Crore ∆ LY% Full Year (IGAAP) Half Year (Ind AS) ∆ LY% FY 16-17 FY 17-18 Key Performance Parameters FY 17-18 FY 18-19 27% 195,049 247,529 Domestic AAUM1 224,650 254,207 13% 73% 49,914 86,450 Domestic Equity AAUM1 68,592 90,979 33% 8,2

  29. Slide 29: Aditya Birla Sun Life Insurance Limited

    Aditya Birla Sun Life Insurance Limited 29

  30. Slide 30: Fast growing franchise with significant value creation

    Fast growing franchise with significant value creation Figures in Rs. Crore Individual APE 1 grew by 60% y-o-y in H1 FY19 CAGR 25% 1,059 Significantly higher than industry growth 922 Industry: 10% | Private: 11% 2 | Top 4 Private: 6% 2 682 Individual 60% 577 Group FYP grew by 94% y-o-y in H1 FY19 AP

  31. Slide 31: Focus on value accretive product mix

    Focus on value accretive product mix Figures in Rs. Crore Increasing Share of Ind. Protection in Product Mix Improvement in VNB Margins 2 2% 5% 8% 28.2% 36.4% Gross VNB grew 2x y-o-y Protection Gross VNB 2x 218 38% 32% 30% Non-Par Factors contributing to sharp 105 24% 23% Par reduction in Net VNB: 2

  32. Slide 32: Balanced sourcing strategy with strong growth in partnerships

    Balanced sourcing strategy with strong growth in partnerships Figures in Rs. Crore Partnership Channel Proprietary Channel Consistent increase in contribution of 3.7x 265 1.1x 313 partnerships channel Channel-wise 290 Individual FYP 71 H1 FY18 H1 FY19 H1 FY18 H1 FY19 HDFC Bank partnership scaling up

  33. Slide 33: Focus on quality of business

    Focus on quality of business Fund Performance across categories 1 Persistency Ratios 2 Internal Benchmark Fund +6% +7% +5% 74% 7% 8% 16% 68% 70% 10% 62% 63% 5% 9% 12% 57% 56% 3% 8% 8% 50% 51% 3% 2% 1 Yr 5 Yr 1 Yr 5 Yr 1 Yr 5 Yr 13th month 25th month 37th month Assure Enhancer Maximiser H1 FY17 H1 FY

  34. Slide 34: Key Financials – Aditya Birla Sun Life Insurance Limited

    Key Financials – Aditya Birla Sun Life Insurance Limited Figures in Rs. Crore ∆ LY% Full Year (IGAAP) Half Year (Ind AS) ∆ LY% FY 16-17 FY 17-18 Key Performance Parameters FY 17-18 FY 18-19 20% 960 1,152 Individual First year Premium 372 601 61% 1,574 1,511 Group First year Premium 369 715 2% 3,190

  35. Slide 35: Aditya Birla Health Insurance Limited

    Aditya Birla Health Insurance Limited 35

  36. Slide 36: Strong growth led by retail

    Strong growth led by retail Figures in Rs. Crore 244 Strong growth led by retail since FY18 (first 177 161 full year of operations) Strong GWP 54 96 69 Group growth led Retail  1.2 Mn lives covered 1 51 83 82 108 by Retail 3 14  Retail Mix (H1 FY19): 61% (PY: 16%) FY17 FY18 H1 FY18 H1 FY19 Rapid d

  37. Slide 37: Significantly scaled up distribution and provider network

    Significantly scaled up distribution and provider network H1 FY18 FY18 H1 FY19 One of the largest third party distribution capacities Branches  8 Banca tie-ups within 18 months : 43 59 59  HDFC, DCB, RBL, Deutsche Bank, AU Bank, KVB and AB Payment Bank Agents  SVC signed up in Q2 FY19 8,500+ 15,5

  38. Slide 38: Driving value through diversification

    Driving value through diversification Increasing contribution of Retail GWP (Retail % of Total GWP) Geographical diversification (% contribution of Non-Metro) 34% 27% 61% 34% 8% 6% FY 17 FY 18 H1 FY19 FY 17 FY 18 H1 FY19 Improving margins by Increasing retail mix Retail Mix has grown 4x Y-o-Y 1 Pres

  39. Slide 39: Key Financials – Aditya Birla Health Insurance Limited

    Key Financials – Aditya Birla Health Insurance Limited Figures in Rs. Crore Full Year (IGAAP) Half Year (Ind AS) ∆ LY% FY 17-18 Key Performance Parameters FY 17-18 FY 18-19 83 Retail Premium 14 108 7x 161 Group Premium 82 69 244 Gross Written Premium 96 177 2x 245 Revenue 99 178 91% Opex to Premium

  40. Slide 40: Other Financial Services businesses

    Other Financial Services businesses

  41. Slide 41: Other Financial Services Businesses

    Other Financial Services Businesses Figures in Rs. Crore Full Year (IGAAP) Half Year (Ind AS) FY 16-17 FY 17-18 Key Performance Parameters FY 17-18 FY 18-19 For Other Financial Services Businesses 1 280 448 Aggregate Revenue 177 321 (9) 5 Aggregate Earnings before tax 11 3 General • Premium placemen

  42. Slide 42: Aggregate financials

    ADITYA BIRLA CAPITAL adityabirlacapital.com Aggregate financials

  43. Slide 43: Consolidated Profit & Loss

    Consolidated Profit & Loss Figures in Rs. Crore Full year (IGAAP) Half Year (Ind AS) ∆ LY% Like to Like FY 17-18 Consolidated Profit & Loss FY 17-18 FY 18-19 FY 16-17 1 11,071 13,428 Revenue 5,019 6,653 33% 3,527 4,689 EBITDA 1,998 2,483 2,288 2,986 Less: Interest Expenses for lending businesses 1,3

  44. Slide 44: Segmental Revenue

    Segmental Revenue Figures in Rs. Crore ∆ LY% Full Year (IGAAP) Half Year (Ind AS) ∆ LY% Like to Like 1 FY 17-18 Businesses FY 17-18 FY 18-19 FY 16-17 3,425 4,480 NBFC 2,123 2,618 968 1,249 Asset Management1 582 723 6,036 6,375 Life Insurance 2,365 3,079 16% 10,429 12,104 Established Businesses 5,070

  45. Slide 45: Segmental EBT

    Segmental EBT Figures in Rs. Crore Full Year (IGAAP) Half Year (Ind AS) ∆ LY% Like to Like 1 FY 17-18 Businesses FY 17-18 FY 18-19 FY 16-17 837 1,114 NBFC 505 652 337 493 Asset Management1 246 301 124 166 Life Insurance 94 46 37% 1,298 1,773 Established Businesses 845 1,000 18% (16) 24 Housing 11 34

  46. Slide 46: Annexure

    ADITYA BIRLA CAPITAL adityabirlacapital.com Annexure

  47. Slide 47: A financial services conglomerate meeting the lifetime needs of its customers

    A financial services conglomerate meeting the lifetime needs of its customers Aditya Birla Capital Ltd. Listed NBFC ADITYA BIRLA FINANCE LTD 100% 75% ADITYA BIRLA MONEY LTD Stock & Securities Housing Finance ADITYA BIRLA HOUSING FINANCE LTD 100% 50.01% ADITYA BIRLA INSURANCE BROKERS LTD 2 Insurance

  48. Slide 48: Management team

    Management team Average experience of Average experience of Chief Executive, ABCL 23+ years in Financial 10 years in ABG Services domain Ajay Srinivasan Business CEOs CEO & MD CEO CEO, Infra & CEO, Asset CEO, General Life Insurance CEO, Private Equity CEO, Health Insurance Aditya Birla Finance Struc

  49. Slide 49: Aditya Birla Capital Limited

    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 Website: www.adityabirlacapital.com

  50. Slide 50: Glossary

    Glossary  CY – Current Year  NII – Net Interest Income  FY – Financial Year (April-March)  NIM – Net Interest Margin  PY – Corresponding period in Previous Year  DPD – Days past due  PQ – Previous Quarter  CAB – Corporate Agents and Brokers  Q1– April-June  AAUM – Quarterly Average Assets

Aditya Birla Capital — Investor Presentation (January 2019) on 6ix