Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q2 FY2024 Earnings Presentation
48 slides from Edelweiss Financial Services's earnings presentation, Nov 10, 2023
Slide 1: Filing cover letter to stock exchanges
EW/Sec/2023-24/204 November 10, 2023 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001. Mumbai – 400 051. Scrip Code: 532922 Symbol: EDELWEISS Dear Sir/Madam, Sub: Earnings Update Please find enclos
Slide 2: Earnings update – Quarter ended Sep 23
Edelweiss Financial Services Limited Earnings update – Quarter ended Sep 23
Slide 3: Contents
Contents 1 Overview for quarter ended Sep 23 3 2 Performance highlights 6 3 Key priorities for the next 18 months 20 4 Business performance 22 5 Governance & corporate responsibility 40 Please refer to the detailed business update filed for Mutual Fund business 2
Slide 4: Overview
Overview Quarter ended Sep 23
Slide 5: Edelweiss at a glance – Quarter ended Sep 23
Edelweiss at a glance – Quarter ended Sep 23 Net Worth Ex-Insurance PAT BVPS INR 6,015 Cr INR 153 Cr INR 44 (FV ₹1) Net Debt Liquidity as a % of Debt INR 15,220 Cr 18% 4
Slide 6: Diversified with seven high-quality businesses
Diversified with seven high-quality businesses Edelweiss Financial Services Ltd (EFSL) Alternative Asset Housing General Mutual Fund NBFC Life Insurance Asset Mgt Reconstruction Finance Insurance Edelweiss Edelweiss Edelweiss Asset ECL Finance Nido Home Zuno General Edelweiss Alternate Asset Reconst
Slide 7: Performance Highlights
Performance Highlights oO Edelweiss Ideas create, values protect
Slide 8: Performance highlights – quarter ended Sep 23
Performance highlights – quarter ended Sep 23 1 Healthy profitability across businesses: MF PAT 55% YoY and Alts PAT 42% YoY 2 Listing of Nuvama Wealth Management on Sep 26, 2023 3 Robust growth in asset management and insurance businesses Alternatives AUM at INR 50,000 Cr milestone; MF equity AUM g
Slide 9: Healthy profitability across businesses
1 Healthy profitability across businesses PAT for the quarter in INR Cr EFSL Alternative Asset Asset Mutual Fund ex-Insurance Management Reconstruction 153 45 81 133 12 32 8 75 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 15% YoY 42% YoY 55% YoY 8% YoY 8
Slide 10: Earnings distribution across businesses
1 Earnings distribution across businesses INR Cr Quarter Ended Business Sep 23 Sep 22 Alternative Asset Management 45 32 Mutual Fund 12 8 Asset Reconstruction 81 75 NBFC 35 35 Housing Finance 3 6 General Insurance (31) (35) Life Insurance (60) (47) Corporate 10 3 EFSL Consolidated PAT (Pre MI) 95 77
Slide 11: Listing of Nuvama Wealth Management
2 Listing of Nuvama Wealth Management Step 1 – Capital Raise Step 2 - Demerger Step 3 - Allotment Step 4 - Listing Phase I Phase II & III Allotment Listing Capital raise in NCLT order received and Allot 30% EFSL holdings Listing of Nuvama Nuvama made effective for Phase II to Shareholders of Wealth
Slide 12: A win-win-win for all stakeholders
2 A win-win-win for all stakeholders For Nuvama • Deal led to primary infusion of capital into the business • Equity increased to ~INR 2,500 Cr; poised the business for further growth • Paved the way for listing For Shareholders of Edelweiss • Opportunity for direct participation in Nuvama’s growth
Slide 13: Robust growth across businesses
3 Robust growth across businesses Alternative Asset Management AUM increased 25% YoY to Fee paying AUM grew 32% INR 50,000 Cr YoY to INR 27,000 Cr Mutual Fund AUM grew 25% YoY to Equity AUM up 30% YoY to INR 1,14,000 Cr INR 34,200 Cr Asset Reconstruction Acquired debt assets of INR 1,300 Share of re
Slide 14: Robust growth across businesses
3 Robust growth across businesses General Insurance Gross written premium grew Awarded Insurtech of the Year by by 18% YoY to INR 191 Cr The Crown Awards Life Insurance Gross premium increased by Awarded Golden Peacock 18% YoY to INR 451 Cr award for risk management NBFC Disbursal on-going under CLM
Slide 15: Customer reach grows on the back of retail scale up
4 Customer reach grows on the back of retail scale up in Lakhs Customer Reach MF Folios GI Customers 63 12.4 43 49 31 10.8 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 27% YoY 14% YoY 40% YoY 14
Slide 16: Expansion in customer assets led by asset mgt businesses
4 Expansion in customer assets led by asset mgt businesses in INR Cr Customer Assets Alts AUM MF AUM 2,01,650 50,000 1,14,000 1,70,000 40,000 92,000 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 19% YoY 25% YoY 24% YoY 15
Slide 17: Strong balance sheet with well capitalised businesses
5 Strong balance sheet with well capitalised businesses Businesses Metric Value NBFC Capital Adequacy 39.9% Housing Finance Capital Adequacy 36.6% Asset Reconstruction Capital Adequacy 55.2% Life Insurance Solvency Ratio 195% General Insurance Solvency Ratio 192% 16
Slide 18: Reduced ~INR 2,700 Cr of Debt YoY
5 Reduced ~INR 2,700 Cr of Debt YoY Net Debt (INR Cr) INR Cr Business Sep 23 17,960 NBFC 6,070 15,220 Housing Finance 1,620 Alternatives 285 Asset Reconstruction 2,850 Corporate * 7,695 Gross Debt 18,520 (Less) Liquidity 3,300 Net Debt 15,220 Sep 22 Sep 23 17 * Corporate holds ~14% stake in Nuvama w
Slide 19: Cash flow plan
5 Cash flow plan INR Cr Oct 23 to Sep 24 Opening Available Liquidity (A) 3,300 Inflows Expected Inflows 5,900 Fresh borrowings 2,400 Total Inflows (B) 8,300 Outflows Repayments 6,200 Disbursements 2,800 Total Outflows (C) 9,000 Closing Available Liquidity (A+B-C) 2,600 18
Slide 20: Assets in each tenor range adequately cover liabilities
5 Assets in each tenor range adequately cover liabilities INR Cr Assets Liabilities Excess / (Gap) Up to 1 year 12,200 9,900 2,300 1-3 years 11,100 10,200 900 3 years+ 9,500 7,200 2,300 19
Slide 21: Key priorities for the next 18 months
Key priorities for the next 18 months
Slide 22: Key priorities for the next 18 months
Key priorities for the next 18 months 1 Scale profitability in Alternatives and Mutual Fund businesses 2 Grow retail credit book through co-lending model 3 Build path to profitability in Insurance businesses; breakeven expected by FY27 4 Continue focused reduction in net debt 21
Slide 23: Business Performance
Business Performance oO Edelweiss Ideas create, values protect
Slide 24: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew 25% YoY to INR 50,000 Cr Equity (INR Cr) 645 • Fee Paying AUM grew 32% YoY to INR 27,000 Cr • Launched during the quarter – AUM (INR Cr) 50,000 o Climate Fund - offers in
Slide 25: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot INR Cr Sep 23 Sep 22 AUM 50,000 40,000 Fee Paying AUM 27,000 20,400 Equity 645 272 Net Revenue 129 93 Opex 74 54 Profit After Tax 45 32 24
Slide 26: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Investor type 25% 40% 45% INR 50,000 Cr INR 27,000 Cr INR 50,000 Cr 55% 60% 75% Credit Real Assets Credit Real Assets Institutional Non Institutional 25
Slide 27: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 224 • AUM grew by 25% YoY to INR 1,14,000 Cr o Market share of 2.41% as on Sep 23 • Equity AUM grew by 30% YoY to INR 34,200 Cr AUM (INR Cr) 1,14,000 • Net inflows of INR 2,200 Cr durin
Slide 28: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot INR Cr Sep 23 Sep 22 AUM 1,14,000 92,000 Net New Money 2,200 3,020 Equity 224 194 Net Revenue 70 48 Opex 57 40 Profit After Tax 12 8 27
Slide 29: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM (INR Cr) MF Debt AUM (INR Cr) 34,200 78,000 26,600 62,800 22,800 42,900 Sep 21 Sep 22 Sep 23 Sep 21 Sep 22 Sep 23 SIP Book (INR Cr) Active Folios (# in Lakhs) 175 12.4 140 10.8 110 8.2 Sep 21 Sep 22 Sep 23 Sep 21 Sep 22 Sep 23 Grow
Slide 30: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 2,956 • Recoveries of INR 3,036 Cr for the quarter, of which 13.5% was from retail portfolio AUM (INR Cr) 37,650 • Acquired debt assets of INR 1,300 Cr during the quarter, of which ~40
Slide 31: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot INR Cr Sep 23 Sep 22 AUM 37,650 38,000 Capital Employed 4,587 5,190 Wholesale assets 3,876 4,530 Retail assets 711 660 Equity 2,956 2,616 Gross Revenue 223 247 Opex 32 35 Profit After Tax 81 75 Edelweiss’ share in PAT 49 45 30
Slide 32: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Improved traction in co-lending disbursal with Central Bank Equity (INR Cr) 3,750 of India, IDFC First Bank and Standard Chartered Bank o Nearly 80% of disbursal during the quarter under co- AUM (INR Cr) 6,714 len
Slide 33: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot INR Cr Sep 23 Sep 22 AUM 6,714 11,182 Credit Assets 6,176 10,713 Gross Loan Book 3,046 5,838 Gross Revenue 338 397 Net Revenue 128 121 Opex 58 68 Credit Cost 19 11 Profit After Tax 35 35 GNPA 2.39% 2.72% NNPA 1.39% 1.90% 32
Slide 34: Wholesale reduction on track
NBFC Wholesale reduction on track ECLF wholesale loan assets (INR Cr) 10,700 4,350 1,200 Sep 21 Sep 23 Sep 25E Expect momentum to continue with planned reduction 33
Slide 35: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • Disbursed INR 300 Cr in the quarter, of which nearly 30% Equity (INR Cr) 802 under co-lending model • Partnership with Standard Chartered Bank and State Bank AUM (INR Cr) 3,836 of India conti
Slide 36: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot INR Cr Sep 23 Sep 22 AUM 3,836 4,154 Credit Assets 3,079 3,251 Gross Loan Book 2,906 3,036 Gross Revenue 113 112 Net Revenue 38 41 Opex 34 32 Credit Cost (0) 1 Profit After Tax 3 6 GNPA 2.21% 2.52% NNPA 1.62% 1.99% 35
Slide 37: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Gross direct premium income (GDPI) growth of 18% YoY Equity (INR Cr) 211 for the quarter • Enabling business digitally - 99.6% of issuance and 93% of payments through digital mode GWP (IN
Slide 38: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot INR Cr Sep 23 Sep 22 Net Premium Income 93 74 Investment Income & Other 39 22 Income Total Income 131 96 Policy benefits & insurance policy 62 73 liability Other expenses 90 69 Profit After Tax (31) (35) 37
Slide 39: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 625 • Gross premium increased by 18% YoY to INR 451 Cr • AUM recorded a growth of 19% YoY Individual APE (INR Cr) 113 • Traditional Par and Non-Par products constitute ~80% of pro
Slide 40: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot INR Cr Sep 23 Sep 22 Net Premium Income 441 372 Investment Income & Other 196 250 Income Total Income 637 622 Policy benefits & insurance policy 505 507 liability Other expenses 193 162 Profit After Tax (60) (47) Edelweiss’ share in PAT (
Slide 41: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 42: 6 Member Board with 3 Independent Directors
6 Member Board with 3 Independent Directors Mr. Ashok Kini Independent Director • Former Managing Director (National Banking Group) State Bank of India • Served as an advisor to the Thorat Committee on Financial Inclusion at RBI • 35 years of banking experience Dr. Ashima Goyal Independent Director
Slide 43: Significant institutional ownership
Significant institutional ownership Above 1% Shareholding Pattern as on Sep 30, 2023 Key Shareholders Percent 1 Pabrai Investment Funds 9.3% Employee Trust 2 TIAA CREF funds 4.2% DIIs, Non 4.8% Promoter Group Institutions 3 BIH SA 3.9% & Others 32.8% 4 LIC 2.6% 28.8% 5 Baron Asset Management 2.5% 6
Slide 44: Our contribution to building a more sustainable tomorrow
Our contribution to building a more sustainable tomorrow Under the leadership of EdelGive Foundation, we have… Over ~INR 873 Cr mobilized Partnered with over 169 Assisted over 60% of EdelGive’s Ensured long term through commitments high caliber NGOs NGO partners to grow at a CAGR association with av
Slide 45: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 90 Districts Sustainable Women across 12 States Quality Education Livelihoods Empowerment 20 lakh children impacted 2.46 lakh Individuals trained 2.40 lakh women supported 31,000 schools reached 1,825 watershe
Slide 46: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 45
Slide 47: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 48: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of INR 468 Cr, Ex-Insurance PAT is post MI Slide 4,17,18: Available Liquidity is calculated as on balance sheet date and includes high quality liquid assets Slide 4,17: Debt includes accrued interest, liabilities on market linked
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