Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Investor Presentation (March 2015)
43 slides from Mahindra & Mahindra Financial Services's investor presentation, March 2015
Slide 1: Mahindra & Mahindra Financial Services Limited Analyst Meet March 2015
Mahindra & Mahindra Financial Services Limited Analyst Meet MARCH - 2015 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 Fax: +91 22 2287 5485 Tel: +91 22 66526
Slide 2: Company overview
Company overview Transforming rural lives across the country 2
Slide 3: Background
Background • Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 754 billion)*, one of India’s leading tractor and utility vehicle manufacturers • MMFSL (Mcap: Rs 158 billion)* is one of India’s leading non-banking finance companies foc
Slide 4: MMFSL Group structure
MMFSL Group structure (1) 85% Mahindra Insurance Brokers Limited (“MIBL”) Mahindra & Mahindra Limited 87.5%(2) Mahindra Rural Housing Finance Limited (“MRHFL”) 51.20% 49% Mahindra Finance USA LLC (Joint venture with Rabobank group Mahindra & Mahindra subsidiary) Financial Services Limited Mahindra A
Slide 5: Our Journey Thus Far
Our Journey Thus Far Long term debt rating upgraded to AAA by India Ratings and Brickwork. CARE Ratings assigned AAA rating to long term debt Reach extended to over 1100 offices FY 15 Crossed 3 million cumulative customer contracts FY 14 Stake sale in MIBL to Inclusion resources pvt. Ltd. QIP Issue
Slide 6: Shareholding pattern
Shareholding pattern (as on March 31, 2015) Top 10 Shareholders Aranda Investments (Mauritius) PTE Ltd Franklin Templeton Investment Funds Non ESOP Mutual Institutions Fidelity Funds Emerging Markets Fund Funds & Trust 5.9% DII 0.8% JP Morgan Sicav Investment Company (Mauritius) 4.0% Limited
Slide 7: Industry overview
Industry overview Transforming rural lives across the country 7
Slide 8: Automobile Finance Market to Grow by 16-18% over the next 5 years
Automobile Finance Market to Grow by 16-18% over the next 5 years Growth in New Vehicle Finance Disbursements CAGR FY14- (% growth over previous yr) FY12E FY13E FY14E FY15P FY16P FY19P Cars 8% 1% (7%) 4% 10-12% 17-19% Utility Vehicles 16% 39% (6%) 3% 15-17% 18-20% Commercial Vehicles 17% (12%) (25%)
Slide 9: Auto Industry Long term growth potential
Auto Industry Long term growth potential Strong prospects in the long-term. FY05-10 FY10-15 FY15P FY15-20P Growth to be driven by increase in CAGR CAGR CAGR income of households and higher (%) passenger vehicle penetration (%) (%) (%) Cars and Uvs 13 6 4 12-14 Small Cars to drive growth in the l
Slide 10: Overall Demand Drivers
Overall Demand Drivers Passenger Vehicles Growth CAGR 18% Increase in affordability 14% 13-15% 12-14% 12-14% 13% 13% 13% 10-12% 12% 11% Growth in Addressable Market 8% 6% 5% Entry of New Players and New Model 3% Launches -2% -1% Increase in dealerships and access to Small Cars Sedans Uvs+Van
Slide 11: Auto Industry Volume
Auto Industry Volume Domestic Sales FY15 FY14 Y-o-Y FY13 (Volume in ‘000) (Nos.) (Nos.) Growth (%) (Nos.) Passenger Vehicles (PVs) Passenger Cars / Vans 1,876 1,791 4.7% 1,874 UVs 725 717 1.1% 791 Commercial Vehicles (CVs) M&HCVs 233 200 16.5% 269 LCVs 382 432 (11.6%) 524 Three Wheelers 532 480 10.8
Slide 12: Housing Finance Growth
Housing Finance Growth Growth in Housing Finance Disbursements (Rs.bn) 9000 8000 7,861 Growth in disbursements to be 7000 supported by rising focus of 6000 developers on the affordable 5000 4000 housing segment 2,988 3000 2000 1,840 Tier II and III cities to drive 775 1000 growth 0 2005-06 E 201
Slide 13: Business Strategy
Business Strategy Transforming rural lives across the country 13
Slide 14: 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 15: Extensive branch network
Extensive branch network MMFSL has an extensive branch network with presence in 25 states and 5 union territories in India through 1108 offices as of March 31, 2015 Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of JK 5 HP 27 39 PB UC 19 22 HAR D
Slide 16: Diversified Product Portfolio
Diversified Product Portfolio Loans for auto and utility vehicles, tractors, cars, commercial Vehicle Financing vehicles and construction equipments Pre-Owned Loans for pre-owned cars, multi-utility vehicles, tractors and Vehicles commercial vehicles Loans for varied purposes like project fina
Slide 17: Break up of estimated value of Assets Financed
Break up of estimated value of Assets Financed Year ended Year ended Year ended Asset Class March – 15 March – 14 March – 13 Auto/ Utility vehicles 33% 32% 31% Tractors 18% 20% 19% Cars 22% 22% 24% Commercial vehicles and 9% 11% 14% Construction equipments Pre-owned vehicles and others 18% 15% 12% 1
Slide 18: Break up of AUM
Break up of AUM As on As on As on Asset Class March – 15 March – 14 March – 13 Auto/ Utility vehicles 31% 29% 28% Tractors 18% 19% 19% Cars 23% 24% 24% Commercial vehicles and 13% 15% 17% Construction equipments Pre-owned vehicles and others 15% 13% 12% 1. Approximate percentages 2. As on 31st March
Slide 19: 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 Long term and Subordinated debt AAA (ind) Stable CARE Ratings Outlook Long term and Subordinated debt AAA -- Brickwork Outlook Long term a
Slide 20: Broad based Liability Mix
Broad based Liability Mix Total consortium size of Rs.15.3 Bn comprising several banks Funding Mix by Investor profile (Mar’ 15) Funding Mix by type of Instrument (Mar’ 15) Insurance Banks for CP, ICD Assignment Co. & Assignment (Rs.34908 (Rs.17646 Institutions (Rs.17646 mn) mn) (Rs.40122 mn) 12%
Slide 21: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives Training programs for employees on regular All our offices are connected to the centralised basis data centre in Mumbai through Lease line/HHD 5 days induction program on product knowledge, T
Slide 22: Financial Information
Financial Information Transforming rural lives across the country 22
Slide 23: Key Financials
Key Financials Q4FY15 Vs Q4FY14 (Figures on standalone basis) Total Income Profit after Tax Value of Asset Financed Rs 15,373 mn Rs 3,334 mn Rs 63,027 mn 12% 7% 7% Rs 13,706 mn Rs 3,107 mn Rs 58,821 mn FY15 Vs FY14 (Figures on standalone basis) Total Income Profit after Tax Value of Asset Financed R
Slide 24: Growth Trajectory
Growth Trajectory Figures on standalone basis Loan Book (Rs. Bn) Revenues (Rs. Bn) 329.30 55.85 23% 296.17 26% 49.53 240.38 38.95 174.98 27.95 FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15 Profit after Tax (1) (Rs. Bn) Book Value Per Share (2) (Rs.) 10% 99.7 28% 8.83 8.87 89.6 8.32 6.20 56.7 47.9 FY12 FY1
Slide 25: Financial Performance
Financial Performance Figures on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 35.4% 3.9% 4.0% 3.2% 2.5% 33.0% 32.6% 32.6% FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15 Return on Net Worth (RONW) (3) (%) Asset Quality 22.8% 23.5% Gross NPA Net NPA 5.9% 18.6% 15.5% 4.4% 3.0%
Slide 26: Standalone Profit & Loss Statement
Standalone Profit & Loss Statement Particulars (Rs. in Million) Q4FY15 Q3FY15 Q-o-Q Q4FY14 Y-o-Y FY15 FY14 Revenue from operations 14,373 13,172 9.1% 13,208 8.8% 52,799 47,079 Securitisation Income (net) 834 694 20.2% 394 111.7% 2,562 2,137 Less: Finance cost 6,373 6,478 -1.6% 5,975 6.7% 24,967 21,8
Slide 27: Standalone Balance Sheet
Standalone Balance Sheet As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2015 2014 2013 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,128 1,127 1,126 b) Reserves and Surplus 55,566 49,815 43,420 Shareholders' funds 56,694 50,942 44,546 Non-current liabilities a) L
Slide 28: Standalone Balance Sheet (Cont'd)
Standalone Balance Sheet (Cont’d) As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2015 2014 2013 ASSETS Non-current assets a) Fixed Assets 1,100 1,195 1,068 b) Non-current investments 7,599 5,263 3,451 c) Deferred tax assets (Net) 4,153 3,151 2,382 d) Long-term loans and advances
Slide 29: Key Subsidiaries
Key Subsidiaries Transforming rural lives across the country 29
Slide 30: Mahindra Rural Housing Finance
Mahindra Rural Housing Finance Year ended Year ended Year ended Particulars (Rs. million) March – 15 March – 14 March – 13 Loans disbursed 9,896 6,306 4,329 No. of Customer Contracts (Nos) 81,960 56,868 61,332 Outstanding loan book 20,983 13,550 8,795 Total income 3,284 2,125 1,404 PBT 673 368 274 P
Slide 31: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Year ended Year ended Particulars (Rs. million) March – 15 March – 14 March – 13 Total income 1,262 1,112 863 Net premium 8,939 7,384 5,538 PBT 653 638 512 PAT 429 420 344 No. of Policies for the Period (nos.) 1,137,981 1,068,577 802,829 No. of employees
Slide 32: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Year ended Year ended Year ended Particulars (Rs. in Million) March - 15 March - 14 March – 13 Revenue from operations 60,211 52,753 40,950 Other income 398 253 179 Total Revenue 60,609 53,006 41,129 Expenses: Employee benefits expense 5,671 4,945 3,793 Finance c
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2015 2014 2013 EQUITY AND LIABILITIES Shareholders' funds a) Share Capital 1,128 1,127 1,126 b) Reserves and Surplus 58,299 51,810 44,670 Shareholders' funds 59,427 52,937 45,796 Minority Interest 493 365
Slide 34: Consolidated Balance Sheet (Cont'd)
Consolidated Balance Sheet (Cont’d) As on Mar 31 As on Mar 31 As on Mar 31 Particulars (Rs. in Million) 2015 2014 2013 ASSETS Non-current assets a) Fixed Assets 1,192 1,287 1,137 b) Non-current investments 5,597 3,790 2,417 c) Deferred tax assets (Net) 4,212 3,254 2,421 d) Long-term loans and advanc
Slide 35: Summary & Key Ratios
Summary & Key Ratios Figures on standalone basis Year ended Year ended Year ended Particulars March – 15 March – 14 March – 13 RONW (Avg. Net Worth) 15.5% 18.6% 23.5% Debt / Equity 4.63:1 4.70:1 4.24:1 Capital Adequacy 18.3% 18.0% 19.7% Tier I 15.5% 15.5% 17.0% Tier II 2.8% 2.5% 2.7% EPS (Basic) (Rs
Slide 36: Spread Analysis
Spread Analysis Figures on standalone basis Year ended Year ended Year ended March – 15 March – 14 March – 13 Total Income / Average Assets 17.1% 17.7% 18.0% Interest / Average Assets 7.7% 7.8% 7.4% Gross Spread 9.4% 9.9% 10.6% Overheads / Average Assets 3.1% 3.3% 3.5% Write offs & NPA provisions /
Slide 37: NPA Analysis
NPA Analysis Figures on standalone basis Particulars (Rs. million) March – 15 March – 14 March – 13 Gross Non - Performing Assets 20,997 14,057 7,630 Less: NPA Provisions 12,815 8,301 5,030 Net Non – Performing Assets 8,182 5,756 2,600 Total Assets (Incl. NPA Provision) 355,128 318,622 256,067 Gross
Slide 38: Awards & Accolades
Awards & Accolades Transforming rural lives across the country 38
Slide 39: Awards and Accolades
Awards and Accolades Mahindra Finance has been listed on Dow Jones Sustainability Index (DJSI) - Emerging Market Trends for two years consecutively – 2013 & 2014 Mahindra Finance is now a part of the Carbon Disclosure Leadership Index (CDLI) 2014 Mahindra Rural Housing Finance Limited (MRHFL)
Slide 40: Key Risk Management Practices
Key Risk Management Practices Transforming rural lives across the country 40
Slide 41: Conservative Risk Management Policies
Conservative Risk Management Policies Provisioning Norms Duration (months) RBI Norms Duration (months) MMFSL 6 and <= 18 10% > 5 and <= 11 10% > 18 and <= 30 20% > 11 and <= 24 50% > 30 and <= 54 30% > 24 months 100% > 54 months 50% Key Risks & Management Strategies Key Risks Management Strategies
Slide 42: 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 43: Thank You
Thank You Transforming rural lives across the country 43
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