Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q4 FY2018 Earnings Presentation
57 slides from Muthoot Finance's earnings presentation, March 2018
Slide 1: Financial Results Q4 FY 2018
Financial Results Q4 FY 2018 March 2018 MUTHOOT FINANCE LIMITED
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position,
Slide 3: Consolidated Loan Assets
CONSOLIDATED LOAN ASSETS * Diversified Business of the Group * (` in million) YoY Growth FY 2018 FY 2017 (%) Consolidated Loan Assets of the Group * 321,537 286,605 12 Contribution of Subsidiaries in the Consolidated 10 5 - Gross Loan Assets of the Group* (%) FY 2018 FY 2017 YoY Growth (%) Consolida
Slide 4: Statement of Financial Results
STATEMENT OF FINANCIAL RESULTS (` in millions) STANDALONE CONSOLIDATED Particulars FY 2018 FY 2017 FY 2018 FY 2017 Total Revenue 62,432 57,467 67,049 59,384 Employee Benefit Expenses 7,715 7,638 8,335 7,604 Finance Cost 19,399 22,938 21,333 23,688 Depreciation and Amortisation 439 483 500 519 Provis
Slide 5: Statement of Assets and Liabilities
STATEMENT OF ASSETS AND LIABILITIES (` in millions) STANDALONE CONSOLIDATED Particulars FY 2018 FY 2017 FY 2018 FY 2017 Share Capital 4,000 3,995 4,000 3,995 Reserves and Surplus 73,604 61,170 74,423 61,386 Minority Interest 1,061 719 Borrowings 186,994 169,861 201,505 176,110 Other Liabilities and
Slide 6: Muthoot Finance: Driving Inclusive Growth
MUTHOOT FINANCE: DRIVING INCLUSIVE GROWTH o India’s largest gold financing company (by loan portfolio) o Trusted pan-India brand in the gold loans sector; revolutionised India’s gold banking o Our intervention has empowered millions of people across the social pyramid Multiple service offerings CORE
Slide 7: MFIN - A Glimpse
MFIN - A GLIMPSE 29 155 tonnes States/Union territory presence Gold jewellery kept as security 4,300+ 150,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 23,000+ 130,000+ Team members Customers served every day ` 291,384 mn Loan Assets Under Management (
Slide 8: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 74% stake 23.11 3.11 NSE Ticker MUTHOOTFIN (%) Shareholding as on March 31, 2018 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on March 31, 2018) ` 162,997 million 73.78 7
Slide 9: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 Dividend (% )* 60 60 60 100 60 First Interim Dividend (%) 100 60 40 40 30 - Second Interim Dividend (%) - - 20 20 Final Dividend (%) - - - 20 10 Dividend Payout Ratio (%) 23.23 20.30 29.50 35.36
Slide 10: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4325 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 6 13 Himachal Pradesh 62 East West Punjab 6 Chandigarh 8 176 15 Uttarakhand North South Haryana 21 Delhi 127 218 Assam 20 Rajasthan 17 (As of March 31, 2018) 134 Ut
Slide 11: Digital Initiatives
DIGITAL INITIATIVES Digital convenience for new gen & Millennium Customer acquisition Aadhaar based Electronic KYC Direct Credit Facility • Biometric KYC verification - Convenience • Loan proceeds credited to bank • No further KYC documents –Paperless account • Aadhar • NEFT/RTGS/IMPS mode of bank •
Slide 12: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 17% of our active Gold loan Customers are transacting Online Muthoot Online iMuthoot App Mobile App • Our online services has now been re-branded to • Launched in Nov’16 has about 4.65 lakhs Muthoot Online, from WebPay earlier. downloads. • Customers can
Slide 13: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Share Capital 4,000 3,999 3,996 3,995 3,995 0 0 Reserves & Surplus 73,604 73,898 69,248 64,688 61,169 20 0 Tota
Slide 14: Assets
ASSETS Core focus continues to be gold loan Gross Loan Assets under management Mar- 18 Dec-17 Sep-17 Jun-17 Mar-17 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross loan assets 291,384 282,648 276,080 278,517 272,785 7 3 under management B
Slide 15: Liabilities
LIABILITIES Stable sources of funding Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures (Muthoot Gold 8,769 11,419 16,288 21,058 25,190 (65) (23) Bonds) Secured Non-Convertibl
Slide 16: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY FY 2018 FY 2017 Growth Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 (%) INCOME Interest Income 60,593 56,546 7 15,223 15,227 16,385 13,758 Other Income 1,839 921 100 857 440 314 228 Total 62,432 57,467 9 16,080 15,667 16,699 13,986 EXPENDITU
Slide 17: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in billion) 300 288 278 275 281 272 260 270 243 244 233 240 216 210 180 157 150 120 90 73 60 30 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 16
Slide 18: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 180 153 155 160 149 152 152 137 142 140 134 131 118 120 112 100 80 66 60 40 20 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 17
Slide 19: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 East 2 3 4 5 6 6 7 7 7 8 8 8 West 8 8 10 11 13 15 17 18 19 19 19 19 North 15 15 17 19 22 22 22 23 23 23 23
Slide 20: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 66.39 64.82 64.23 65.29 66.70 63.69 63.2 65 57.55 55.01 56.93 55 50.63 45.74 45 35 25 15 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 19
Slide 21: Yield on Loan Assets and NIM
YIELD ON LOAN ASSETS AND NIM Yearly (%) Quarterly (%) 26.00 26.00 24.00 24.00 23.59 22.34 21.70 22.00 21.66 21.80 22.00 21.33 19.94 19.72 19.31 21.43 20.06 20.00 20.00 19.72 20.27 16.55 18.00 18.00 15.09 15.03 16.00 16.00 14.75 14.00 12.30 12.74 14.00 11.17 10.81 11.69 11.38 10.84 12.00 10.47 12.00
Slide 22: Interest Spread
INTEREST SPREAD Yearly (%) Quarterly (%) 26 26.00 24 22.34 24.00 23.59 21.66 21.43 21.70 22 21.8 20.27 22.00 21.33 19.94 19.72 19.72 20 19.31 20.06 20.00 18 18.00 14.88 16 16.00 13.08 13.2 14 12.42 12.90 12.20 11.88 14.00 10.73 11.53 10.93 10.80 12 10.85 10.90 12.00 9.33 10.14 8.71 8..60 9.24 8.25 1
Slide 23: Return on Average Loan Assets
RETURN ON AVERAGE LOAN ASSETS Attractive returns over the years Yearly (%) Quarterly (%) 7.00 7.00 6.50 6.64 6.16 6.54 6.50 6.32 6.00 6.00 5.50 5.50 5.00 5.12 5.00 4.24 4.40 4.47 4.50 4.21 4.05 4.50 4.00 4.00 3.32 3.50 3.22 3.50 3.03 3.00 3.00 2.50 2.50 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-
Slide 24: Non-Performing Assets
NON-PERFORMING ASSETS Non-Performing Assets (` in million) Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Gross Non-Performing Assets 20,329* 15,897 12,593 6,279 5,621 Provision For Non-Performing Assets 2,378 1,975 1,571 1,019 1,019 Net Non-Performing Assets 17,951 13,922 11,021 5,260 4,602 % of Gross NPA on G
Slide 25: Bad Debts & Standard Asset Provision
BAD DEBTS & STANDARD ASSET PROVISION Bad Debts (` in million) FY 2018 FY 2017 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Bad Debts Written Off 316 165 189 55 63 9 Standard Asset Provision Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Provision (` in million) 3,388 3,334 3,295 2,722 2,685 % of Provision to Sta
Slide 26: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile (%) Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 8,769 mn (4%) 4 4 13 Secured Non-Convertible Debentures – Listed – ` 43,842 mn (21%) 2 3 21 Borrowings from Banks/Fis - ` 111,836 mn (53%) Subordinated Debt – ` 7,388 mn (3%) Subor
Slide 27: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Very strong degree of safety with regard to timely CRISIL 40,000 CRISIL A1+ payment of financial obligation and carry lowest credit risk ICRA 40,000 ICRA A1+ Very
Slide 28: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly Quarterly 70,000 56,546 60,593 70,000 60,000 60,000 53,641 50,000 49,077 48,130 45,280 50,000 42,703 40,000 40,000 30,000 30,000 22,983 20,000 15,223 15,227 16,385 20,000 13,758 10,775 10,000 10,000 0 0 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q
Slide 29: Operating Expenses to Average Loan Assets
OPERATING EXPENSES TO AVERAGE LOAN ASSETS Operational efficiency over the years Yearly (%) Quarterly (%) 8.50 8.50 8.00 8.00 7.50 7.50 7.00 7.00 6.50 6.50 6.02 6.00 5.83 6.00 5.63 5.39 5.50 5.50 5.01 5.1 5.26 5.00 4.72 5.00 4.28 4.46 4.50 4.50 4.44 4.02 4.08 4.00 4.00 3.50 3.50 Mar-10 Mar-11 Mar-12
Slide 30: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (` in million) Quarterly (` in Million) Q4 FY Q3 FY Q2 FY Q1 FY Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 2018 2018 2018 2018 Personnel Expenses 7,288 7,280 6,418 6,304 5,917 5,453 4,145 2,209 1,169 1,841 1,790 1,884 1,773 Rent 1,913 1,808 1
Slide 31: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (%) Quarterly (%) Q4 FY Q3 FY Q2 FY Q1 FY Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 2018 2018 2018 2018 Personnel Expenses 47 48 49 53 52 52 49 43 43 43 47 44 56 Rent 12 12 13 14 14 12 12 12 11 12 13 10 16 Advertisement 5 3 5 5 6 5 10 13 12
Slide 32: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Q4 FY Q3 FY Q2 FY Q1 FY Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Income) 2018 2018 2018 2018 Interest expense to 31.07 39.92 46.31 48.71 53.08 52.34 52.10 44.83 43.49 27.95 29.93 29.28 38.08 Gross Income Selling, general a
Slide 33: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Average Q4 FY Q3 FY Q2 FY Q1 FY Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Loan Assets) 2018 2018 2018 2018 Interest income to avg. 21.70 21.43 19.72 19.30 20.27 21.66 22.34 19.72 19.94 21.33 21.80 23.59 20.06 loan assets In
Slide 34: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly PBT PAT Quarterly PBT PAT 28,000 27,571 22,000 26,000 24,000 20,000 22,000 18,000 20,000 19,210 16,000 17,203 18,000 14,000 16,000 13,312 7,612 13,168 12,000 14,000 11,936 12,000 10,279 10,000 10,000 11,798 8,000
Slide 35: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 77897 77604 80,000 73,244 70,000 68,683 65,164 60,000 56,192 50,835 50,000 42,646 37,356 40,000 29,257 30,000 20,000 13,344 10,000 5,845 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Mar-16 Mar-17 Jun-17 Sep-17 Dec-
Slide 36: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly (%) Quarterly (%) 55 51.52 30 25.60 50 48.10 24.54 25 23.22 45 41.90 20.98 40 20 35 15 30 30.15 24.10 25 10 20 19.50 14.35 19.44 5 15 15.13 10 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Q4 FY 201
Slide 37: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Capital Adequacy Ratio 26.59 27.65 26.49 25.61 24.88 Tier-I 24.75 25.52 23.64 22.65 21.78 Tier-II 1.84 2.13 2.85 2.96 3.10 36
Slide 38: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside FY 2018 FY 2017 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Earnings per share (`) - Basic 43.04 29.56 11.28 11.61 11.36 8.79 - Diluted 42.85 29.45 11.26 11.56 11.27 8.76 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Book Value per
Slide 39: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Outside Liabilities 2,36,212 236,707 251,228 249,141 241,966 Cash & Bank Balances 4,870 13,960 19,649 21,063 15,343 Tangible Networth 77,522 77,820 73,243 68,626 65,104 Capital Gearing 2.98 2.86 3
Slide 40: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28000 25351 24881 25012 24205 23391 22933 23455 22882 22781 22756 23000 18000 16688 13000 9745 8000 3000 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 39
Slide 41: Our Subsidiary: Asia Asset Finance PLC
OUR SUBSIDIARY Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company
Slide 42: Asia Asset Finance PLC – An Overview
ASIA ASSET FINANCE PLC – AN OVERVIEW Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance on December 31, 2014 . As on Mar 31, 2018, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio stands a
Slide 43: Products
PRODUCTS o Fixed Deposits o Mortgage Loans o Leasing o Factoring o Business Loan o Short Term Loans o Personal Loan o Micro Finance o Group Personal Loan o Loan against Gold Jewellery o Corporate Loans 42
Slide 44: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 43
Slide 45: Key Financial Parameters
Key Financial Parameters (LKR in millions) Q4 FY Particulars FY 2018 FY 2017 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 2018 LKR / INR 0.41551 0.42113 0.41551 0.41374 0.42313 0.41706 Number of branches 17 15 17 17 17 17 Number of Employees 489 448 489 490 481 449 Loan AUM (LKR) 9,950 8,662 9,950 9,746 9,494 9
Slide 46: Our Subsidiary: Muthoot Homefin
OUR SUBSIDIARY Muthoot Homefin @ Muthoot Finance 45
Slide 47: Muthoot Homefin – An Overview
MUTHOOT HOMEFIN – AN OVERVIEW Muthoot Homefin (India) Limited is a Housing Finance Company registered with The National Housing Bank (NHB). It became a wholly owned subsidiary of Muthoot Finance Ltd in Aug’17. MHIL focuses on extending affordable housing finance and targets customers in Economically
Slide 48: Business Performance
Business Performance (` in millions) Particulars FY 2018 FY 2017 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Number of branches 19 9 19 17 14 11 Number of Sales Offices 121 110 121 121 110 110 Number of Employees 221 111 221 194 167 135 Loan AUM (`) 14,648 4,408 14,648 10,999 8,296 5,957 Capital Ade
Slide 49: Business Performance
Business Performance Particulars FY 2018 FY 2017 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Disbursement (`) 10,814 4,158 3,878 2,890 2,461 1,584 Borrowings (`) 11,115 2,178 11,115 8,608 6,346 4,850 Debt Equity Ratio (%) 5.15 2.47 5.15 4.21 3.23 5.27 Yield on Advances (%) 12.27 12.74 12.16 12.19 12
Slide 50: Financial Highlights and Growth
• Disbursements in FY 2018: Rs 10,841 mn. Loan Book as on Mar 31, 2018: Rs 14,647 mn • Average Ticket Size in FY 2018: Rs.1.08 mn Financial • Business Presence: Maharashtra, Gujarat, Rajasthan, Madhya Pradesh , Kerala, Andhra Pradesh,Telangana,Karnataka, Uttar Pradesh, Haryana and Chandigarh, Presen
Slide 51: Our Subsidiary: Muthoot Insurance Brokers
Muthoot Insurance Brokers 50
Slide 52: Muthoot Insurance – An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in Sep 2016. MIBPL is an unlisted private limited company holding a licence to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various ins
Slide 53: Key Business Parameters
Key Business Parameters (` in millions) Particulars FY 2018 FY 2017 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Premium Collection (` ) 1,006 697 415 217 216 157 Number of Policies 8,41,476 566,282 205,070 203,677 216,428 216,301 Key Financial Parameters (` in millions) Q2 FY Q1 FY Q3 FY FY FY 2018
Slide 54: Our Subsidiary: Belstar Investment and Finance
® OUR SUBSIDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 53
Slide 55: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As of Mar 2018 , Muthoot Finance holds 66.61% in BIFPL . BIFPL was incorporated on January 1988 at Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as “NBFC-MFI” by RBI eff
Slide 56: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars FY 2018 FY 2017 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Number of branches 235 155 235 215 198 172 Number of Employees 1,783 1,093 1,783 1,576 1,383 1,240 Gross Loan AUM (`) 11,371 5,759 11,371 9,451 7,968 6,652 Capital Adequacy Ratio (%) 18 1
Slide 57: Registered Office
REGISTERED OFFICE 2nd Floor, Muthoot Chambers Opposite Saritha Theatre Complex Banerji Road, Kochi Kerala – 682 018. India Tel: (91484) 2394712 Fax: (91484) 2396506 CIN: L65910KL1997PLC011300 RBI Reg No: N 16.00167 EMAIL (Individual & Corporate Investors) investors@muthootfinance.com (Institutional