Mas Financial Services Ltd. · NSE:MASFIN
Mas Financial Services — Q3 FY19 Earnings Presentation
47 slides from Mas Financial Services's earnings presentation, Jan 30, 2019
Slide 1: Cover letter to stock exchanges for investor presentation
'l1ie Power of <Distri6ution �J\� FINANCIAL SERVICES LIMITED MFSL/SEC/EQ/2019/07 January 30, 2019 To, To, The Manager, General Manager BSE Limited Mational Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza Dalal Street Plot No. C/1, G Block Mumbai - 400001 Bandra-Kurla Complex
Slide 2: Investor Presentation Q3 FY19
<Jlie (l'ower of(J)istri6ution INVESTOR Corporate – PRESENTATION Presentation Q3 FY19 REGISTERED OFFICE MAS Financial Services Limited 6, Ground Floor, Narayan Chambers, Ashram Road, Ahmedabad-380009
Slide 3: Disclaimer
Disclaimer 'l1ie <l"ower of<Distri6uti.cm This presentation has been prepared by and is the sole responsibility of MAS Financial Services Limited (together with its subsidiary MAS Rural Housing & Mortgage Finance Limited). By accessing this presentation, you are agreeing to be bound by the trailing
Slide 4: Table of Content
Table of Content 'l1ie <l"ower of<Distri6uti.cm Company Overview 5 Mission, Vision and Belief 6 Milestones 7 Product Offerings 8 Credit Assessment & Risk Management Framework 10 Retail Presence & Distribution Network 11 Unique and Robust Distribution Network Through NBFC Partners 12 Liability Manage
Slide 5: Note on adoption of Indian Accounting Standards
Given the first year of adoption of Indian Accounting Standards, for better understanding of the performance of the comparative periods we hereby provide financials highlights as per previous GAAP and IND- As section has been mentioned separately. SLIDE: SLIDE: 4 4
Slide 6: Company Overview
Company Overview '11i.e a>ower of'1Jistn"6ut:ion SPECAILISED IN IN RETAIL RETAIL LENDING LENDING SINCE 20 YEARS Diversified Product Portfolio Strong Retail Presence & Wide Distribution Network 'D' Bi,&. Micro-Enterprise loans(MEL) oO SME loans 6 states and NCT of Delhi 5,00,000+ Active loan accounts
Slide 7: Vision, Mission & Belief
Vision, Mission & Belief 'l1ie <l"ower of<Distri6uti.cm VISION To be one of the most efficient distributors of financial services and create value on a very large scale. MISSION To constantly endeavour, to attain excellence and create a very wide Financial distribution network and to be catalyst; in
Slide 8: Major events and milestones in the history
Major events and milestones in the history '1ne <l"ower of<Distri6uti.cm AUM crossed INR 40 Bn. 2019 Bank loan rating upgraded to “Care A+” with Stable outlook and Short term rating assigned as CARE A1+. 2018 Listing of Equity Shares on Bombay Stock Exchange & National Stock Exchange 2017 AUM crosse
Slide 9: Diversified product offerings presenting significant growth opportunities
Diversified product offerings presenting significant growth opportunities MAS focuses on serving the underserved credit needs of mid and low income group segments Micro-Enterprise Loans SME Loans Loans of up to INR 300,000 to Micro-Enterprises Loans of up to INR 50 mn to SMEs who primarily who p
Slide 10: Recent Growth in Overall AUM
Recent Growth in Overall AUM 'l1ie <l"ower of<Distri6uti.cm MAS’ has exhibited steady growth in AUM over the years AUM by Product Category (INR Mn) Segment growth YOY Dec-17 vs Dec-18 1,572 5,025 Commercial Vehicle loans 13.06% 1,462 3,624 1,390 11,921 3,554 2-Wheeler loans 41.39% 1,221 10,295 2,854
Slide 11: Robust and Comprehensive Credit Assessment and Risk Management Framework
Robust and Comprehensive Credit Assessment and Risk Management Framework 'l1ie <l"ower of<Distri6uti.cm MAS aims to give credit where it is due with the dictum of adherence and adaptability Robust credit assessment Credit assessment process overview by Product Micro-Enterprise Loans Analysis of bu
Slide 12: Retail Presence and Distribution
Retail Presence and Distribution 'lnea>owerof'1>istri.6ution ����������- 500,000+ active customers across 3,356 locations in Rural, semi urban and urban locations �����������������--- -�������������� . ����������- Presence in the high growth markets in West and South Delhi NCT Rajasthan I I MAS ha
Slide 13: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm Efficient last mile delivery of credit Value chain approach has proven to across its product range namely MEL, be the most potent one to solve SME, 2 Wheeler and Commercial informality because of proximity to
Slide 14: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm Operational Dynamics Key Criteria for starting relationship: Promoters Product Operational Financial Growth Strategy Capital Base Evaluation Alignment Excellence Performance Credit Assessment Pre-Engagement D
Slide 15: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm MAS NBFCs • Widens its network while maintaining a • Value addition in improving their systems relatively lower risk profile and operations which helps in scalability and Sustainability of business. • Establi
Slide 16: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm TRACK RECORD • Started with 1 NBFC in 2008, currently • Have grown at a CAGR of around 40% having relationship with more than 100 in last five years across our product range such NBFCs having virtual presence
Slide 17: Retail focused partner NBFCs – An Overview
Retailed focused partner NBFCs – An Overview '1ne <l"ower of<Distri6uti.cm Retail focused small regional NBFCs inevitable for last mile delivery of credit. Adequately Capitalized Experienced Management Matching ALM with no liquidity issue for repayment. Practically no exposure to capital market borr
Slide 18: Liability Management Borrowing Mix Dec 2018
Liability Management '1ne <l"ower of<Distri6uti.cm Borrowing Mix Dec 2018 12% 2% DIRECT ASSIGNMENT 50% 36% CASH CREDIT TERM LOAN SUB DEBT • Efficient liability management ensures : • Adequate liquidity round the year. • No asset liability mismatch. • Tie up for the fund requirement of the whole fina
Slide 19: Liability Management
Liability Management 'l1ie <l"ower of<Distri6uti.cm Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Company withstood the litmus test very successfully also in this one of the most challenging quarter – A testimony to its very effic
Slide 20: Consistent Growth in AUM and PAT
Consistent Growth in AUM and PAT '11ie <l"ower of<Distri6ution Asset Under Management (AUM) In INR Mn 41,145 31,561 25,650 20,052 13,910 10,123 5,118 6,909 2,682 3,884 1,510 2,312 2,597 20 Mar-1996 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Profit Afte
Slide 21: Key Achievements Highlights – 9M FY19 vs 9M FY18
Key Achievements Highlights – 9M FY19 vs 9M FY18 '1M <Power of<Distri6ution AUM PAT ROTA* ICR OER Net NPA 9M FY19 INR 49,145 Mn INR 1,044 Mn 4.50% 2.12 times 1.73% 0.88 % 34% 42% 3% 8% 22% 6% 9M FY18 INR 36,576 Mn INR 735 Mn 4.39% 1.96 times 2.20% 0.94% ABBREVIATIONS AUM ASSET UNDER MANAGEMENT PAT P
Slide 22: Key Achievements Highlights – Q3 FY19 vs Q3 FY18
Key Achievements Highlights – Q3 FY19 vs Q3 FY18 '1M <Power of<Distri6ution AUM PAT ROTA* ICR OER Net NPA Q3 FY19 INR 49,145 Mn INR 373 Mn 4.44% 2.01 times 1.70% 0.88 % 34% 47% 6% 1% 33% 6% Q3 FY18 INR 36,576 Mn INR 254 Mn 4.19% 1.98 times 2.52% 0.94 % ABBREVIATIONS AUM ASSET UNDER MANAGEMENT PAT PR
Slide 23: Financial Performance Trends – Q3 FY19
Financial Performance Trends – Q3 FY19 'l1ie <l"ower of<Distri6uti.cm In INR Mn Robust Performance ASSETS UNDER MANAGEMENT (AUM) NET WORTH 49,145 7942 41,145 7139 6874 36,576 31,561 25,650 3769 2279 Mar-16 Mar-17 Mar-18 Dec-17 Dec-18 Mar-16 Mar-17 Mar-18 Dec-17 Dec-18 BORROWING ON & OFF BOOK AUM 25,
Slide 24: Financial Performance Trends – Q3 FY19
Financial Performance Trends – Q3 FY19 'l1ie <l"ower of<Distri6uti.cm In INR Mn Consistent Rise in … REVENUE NET INTEREST INCOME (NII) 2,760 4,279 3,415 2,939 1,902 1,599 1,489 924 1,130 735 FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 PROFIT BEFORE TAX (PBT) PROFIT AFTER TAX
Slide 25: Financial Performance Trends – Q3 FY19
Financial Performance Trends – Q3 FY19 'l1ie <l"ower of<Distri6uti.cm Focus on Efficiency RETURN ON AVG. BALANCE SHEET ASSETS RETURN ON AVG. AUM (ROAUM)* (ROTA)* 4.41% 4.44% 4.19% 3.13% 3.51% 2.84% 2.84% 3.24% 2.34% 2.36% FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 RETURN ON
Slide 26: Financial Performance Trends – Q3 FY19
Financial Performance Trends – Q3 FY19 'l1ie <l"ower of<Distri6uti.cm OPERATING EXPENSE AS % OF NII* COST OF BORROWING (COB)* 9.22% 9.44% 9.01% 9.10% 34.38% 8.67% 31.75% 30.59% 25.92% 21.95% FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 Efficiently maintaining the quality of as
Slide 27: Financial Performance Trends – Q3 FY19
Financial Performance Trends – Q3 FY19 'l1ie <l"ower of<Distri6uti.cm Adequately Capitalized DEBT – EQUITY RATIO (DER) CAPITAL ADEQUACY RATIO (CAR) 6.52 33.10% 31.29% 29.43% 22.94% 4.01 18.36% 3.18 2.50 2.33 Mar-16 Mar-17 Mar-18 Dec -17 Dec -18 Mar-16 Mar-17 Mar-18 Dec-17 Dec-18 Healthy Coverage INT
Slide 28: Quality of the portfolio: Consistently maintained
Quality of the portfolio : Consistently maintained 'l1ie <l"ower of<Distri6uti.cm Catalyst in growth of Entrepreneurs, not creating just borrowers NPA COMPARISON CHART* 1.50% 1.28% 1.15% 1.17% 1.08% 1.09% 1.00% 0.93% 0.95% 0.91% 0.94% 0.88% 0.50% 0.00% Mar-16 Mar-17 Mar-18 Dec-17 Dec-18 GROSS NPA NE
Slide 29: Asset Under Management - Credit Quality
Asset Under Management - Credit Quality 'l1ie <l"ower of<Distri6uti.cm ASSET UNDER MANAGEMENT- DPD 8.00% 6.00% 0.68% 0.86% 0.25% 0.50% 0.49% 0.48% 0.54% 0.28% 0.58% 0.35% 1.14% 0.74% 0.94% 0.91% 1.13% 4.00% 1.23% 1.68% 1.47% 1.11% 1.27% 2.00% 2.79% 2.86% 2.75% 2.84% 2.57% 0.00% Mar-16 Mar-17 Mar-18
Slide 30: Eminent Board of Directors
Eminent Board of Directors '1ne <l"ower of<Distri6uti.cm Extensive industry experience and deep domain knowledge of financial services sector Mr. Kamlesh Chimanlal Gandhi, aged 52 years, is the Founder, Chairman and Managing Director of MAS since inception. He visualized the opportunities in the
Slide 31: Eminent Board of Directors
Eminent Board of Directors '1ne <l"ower of<Distri6uti.cm Extensive industry experience and deep domain knowledge of financial services sector He has been associated with the Company as a Director since November 1995 and as an independent Director since April 2014 He is a management graduate with
Slide 32: Reputed Marquee FIIs and DIIs have invested in MAS
Reputed Marquee FIIs and DIIs have invested in MAS '1ne <l"ower of<Distri6uti.cm Shareholding as on 31st Dec 2018 Marquee Non Promoter Shareholders TIMF HOLDINGS Foreign Portfolio SCHRODER INTERNATIONAL SELECTION FUND INDIAN Investor OPPORTUNITIES Mutual Fund 3.74% Others ( 8.76% Trust Including AIF
Slide 33: Going Forward
Going Forward……….. 'l1ie <l"ower of<Distri6uti.cm Asset Creation • To anchor to our belief that, growth with quality will enhance the shareholders value. • Anticipated growth for the next five years to be in the range of 20% - 30% and maintain healthy ROA and ROCE, which will be among the best in th
Slide 34: Financial Statement: FY16 – 9M FY19
Financial Statement: FY16 – 9M FY19 'l1ie <l"ower of<Distri6uti.cm PROFIT & LOSS STATEMENT INR Mn FY 2016 FY 2017 FY 2018 9M FY 2019 Total Revenue 2939.06 3415.17 4,278.73 4,031.03 Expenses Finance Costs 1339.86 1513.15 1518.48 1436.47 Operating Expense 549.87 603.94 715.45 584.43 Provisions and Loa
Slide 35: MAS Rural Housing & Mortgage Finance Limited (MRHMFL) – Subsidiary
MAS Rural Housing & Mortgage Finance Limited (MRHMFL) – Subsidiary MAS is targeting affordable housing finance segment through its subsidiary • MAS Rural Housing & Mortgage Finance Limited (“MAS Housing” or MRHMFL) is a non-deposit taking , NHB registered, housing finance institution. It was incorpo
Slide 36: Financial Performance Trends – Q3 FY19 MRHMFL
Financial Performance Trends – Q3 FY19 MRHMFL In INR Mn ASSETS UNDER MANAGEMENT (AUM) NET WORTH 2514 345 320 313 300 2040 1919 260 1764 1341 Mar-16 Mar-17 Mar-18 Dec-17 Dec-18 Mar-16 Mar-17 Mar-18 Dec-17 Dec-18 BORROWING GROSS NPA & NET NPA 2,316 0.41% 0.37% 1,678 0.34% 0.36% 0.32% 1,581 1,469 0.29%
Slide 37: Financial Performance Trends – Q3 FY19 MRHMFL
Financial Performance Trends – Q3 FY19 MRHMFL In INR Mn REVENUE NET INTEREST INCOME (NII) 273 118 233 103 157 74 88 37 69 29 FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 FY-16 FY-17 FY-18 Q2 FY18 Q2 FY19 PROFIT BEFORE TAX PROFIT AFTER TAX 34 25 29 19 22 15 13 10 8 6 FY-16 FY-17 FY-18 Q3 FY18 Q3 FY19 FY-16 FY-1
Slide 38: Liability Management Borrowing Mix Dec 2018
Liability Management Borrowing Mix Dec 2018 5.36% 1.03% NHB REFINANCE TERM LOAN 93.61% DIRECT ASSIGNMENT • Efficient liability management ensures : • Adequate liquidity round the year. • Minimum asset liability mismatch. • Tie up for the fund requirement of the whole financial year. SLIDE: 37
Slide 39: Liability Management
Liability Management Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Liability management was tested last quarter and the company could successfully demonstrate its capability of efficient liability management • Capital adequacy rat
Slide 40: IND-AS Impact MAS Financial Services Limited
IND – AS IMPACT MAS FINANCIAL SERVICES LIMITED SLIDE: 39
Slide 41: Reconciliation of profit from I-GAAP to IND-AS
Reconciliation of profit from I-GAAP to IND - AS 'l1ie <l"ower of<Distri6uti.cm IN INR MN Particulars Q3 FY 18 Q3 FY 19 FY 18 9M FY 18 9M FY 19 Profit After Taxes (based on I-GAAP) 253.39 372.87 1033.74 734.68 1043.72 Impact of Adopting EIR on Financial Assets 14.63 1.85 -9.21 11.64 -11.81 Impact of
Slide 42: Credit Quality
Credit Quality 'l1ie <l"ower of<Distri6uti.cm IN INR MN Dec-18 Dec-17 Particulars AUM Provision AUM Provision Stage 1 28,278.54 95.91 22,266.28 62.81 Stage 2 974.97 100.44 702.22 67.81 Stage 3# 618.33 126.57 449.25 41.43 TOTAL ON BOOK 29,871.84 322.92 23,417.75 172.05 Assigned Portfolio 19,688.15 13
Slide 43: IND-AS Impact MAS Rural Housing and Mortgage Finance Limited
Credit quality Analysis – Provisioning Coverage as per IND - AS 'IM <l"ower of<Distri6uti.cm As on Dec 31, As on Dec 31, As on March 31, Particulars 2018 2017 2018 IND – AS IMPACT Total Assets Gross NPA (Stage 3) Less: ECL Provisions (Stage 3) MAS RURAL HOUSING AND Net NPA (Stage 3) Gross NPA% (Stag
Slide 44: Reconciliation of profit from I-GAAP to IND-AS
Reconciliation of profit from I-GAAP to IND - AS IN INR MN Particulars Q3 FY 18 Q3 FY 19 FY 18 9M FY 18 9M FY 19 Profit After Taxes (based on I-GAAP) 5.51 9.84 24.99 18.06 29.67 Impact of Adopting EIR on Financial Assets 2.07 -0.74 -0.78 0.36 -2.88 Impact of Adopting EIR on Financial Liabilities -0.
Slide 45: Credit Quality
Credit Quality IN INR MN Dec-18 Dec-17 Particulars AUM Provision AUM Provision Stage 1 2,398.39 5.16 1,793.81 3.88 Stage 2 88.18 4.50 94.72 4.76 Stage 3 8.66 2.56 6.88 1.84 TOTAL ON BOOK 2,495.23 12.22 1,895.40 10.48 Assigned Portfolio 24.03 N/A 29.53 N/A TOTAL AUM 2,519.26 1,924.93 Particulars Dec-
Slide 46: Glossary
Glossary '11ie <l"ower of<Distri6ution AUM Assets Under Management EIR Effective Interest Rate Bn Billion ECL Estimated Credit Loss CCPS Compulsorily Convertible Preference Shares OCPS Optionally Convertible Preference Share COB Cost of Borrowing CRAR Capital To Risk Assets Ratio DPD Days Past Due F
Slide 47: Investor Contact
'Ihe (l'ower of Distribution BEST WISHES INVESTOR CONTACT Name: Ankit Jain Designation: VP- Finance Contact No.: 079-41106682 Email ID: ankit_jain@mas.co.in
MAS Financial Services — Q3 FY19 Earnings Presentation on 6ix