Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — FY2022 Earnings Presentation
24 slides from Mahindra & Mahindra Financial Services's earnings presentation, May 2, 2022
Slide 1: Covering letter to stock exchanges for earnings presentation
Mahindra & Mahindra Financial Services Ltd. Mahindra Towers, 4th Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 Fax: +91 22 24984170 +91 22 24984171 2nd May 2022 To, BSE Limited, (Security Code: 532720) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001
Slide 2: Annual Analyst Meet
ANNUAL ANALYST MEET 02 May 2022
Slide 3: 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 4: At a Glance: FY22 Gone by
At a Glance: FY22 Gone by… 3 3
Slide 5: What we said post Q1F22 results
What we said post Q1F22 results 1 Reverse 80% of provisions made during Q1 2 Bring back growth to pre-covid levels 4 4
Slide 6: 106% of the provisions made during Q1FY22 reversed
106% of the provisions made during Q1FY22 reversed Rs. in crores 15.5% 2,517 -763 12.7% 11.3% -746 9.0% 7.8% 7.7% -1,152 6.4% 5.6% 4.0% 3.4% -144 FY22 - Q1 FY22 - Q2 FY22 - Q3 FY22 - Q4 FY22 FY21 FY22 - Q1 FY22 - Q2 FY22 - Q3 FY22 - Q4 Provisions Gross & Net Stage - 3 Gross Stage -3 reduced from ₹ 9
Slide 7: Business volumes are back to pre-covid levels
Business volumes are back to pre-covid levels Rs. in crores Rs. in crores 9,202 8,032 64,961 64,608 6,475 63,944 63,582 63,618 3,872 FY21 FY22 - Q1 FY22 - Q2 FY22 - Q3 FY22 - Q4 FY22 - Q1 FY22 - Q2 FY22 - Q3 FY22 - Q4 Disbursements Business Assets 6 6
Slide 8: Key Financials – FY 2022
Key Financials – FY 2022 on standalone basis Disbursement Total Income Profit after Tax Q4 FY 22 Rs. 9,202 crores Rs. 2,466 crores Rs. 601 crores 54% 6% 300% Q4 FY 21 Rs. 5,970 crores Rs. 2,638 crores Rs. 150 crores FY 22 Rs. 27,581 crores Rs. 9,719 crores Rs. 989 crores 45% 8% 195% FY 21 Rs. 19,001
Slide 9: Financial Performance - FY 2022
Financial Performance - FY 2022 Stable NIMs Opex Ratio Credit Costs RoA Capital Adequacy 7.6% 2.7% 3.1% 1.3% 27.8% 8
Slide 10: Way ahead
Way ahead… 9 9
Slide 11: Sustainable profitable growth: Vision 2025
Sustainable profitable growth: Vision 2025 Stable asset quality 2x AUM New business contribution: GS-3 < 6% 15% Maintain NIMs ~7.5% Operating leverage: Cost to RoA ~2.5% Assets ~2.5% 10
Slide 12: Transformation priorities
Transformation priorities 1 Stabilize Asset Quality GS-3 < 6% 2 Recharge Growth 2x AUM through Core + Diversification 3 Strengthen Tech & Digital Differentiate through ‘Phygital’ 4 Future Ready Human Capital Realigned organization 11 11
Slide 13: Stabilize asset quality; GS-3 <6%
1 Stabilize asset quality; GS-3 <6% Product Strategy & Technology Customer Segment Mix Product Diversification Digital & Tech ▪ Reassess highly vulnerable & ▪ Increase non-vehicle share: ▪ Digitalizing lending journeys - volatile cashflow segments SME, LAP, Leasing & Digi Finco mitigate risk (VKYC,
Slide 14: Recharge growth; 2x AUM through core + diversification
2 Recharge growth; 2x AUM through core + diversification Vehicle Lending Scale New Growth Cross-sell & Leverage Leadership Engines Premiumize Partnerships • Deep rural network • Diversified Play - • Increase focus on • OEMs & Dealers SME, LAP, Leasing, cross-selling across • Scale Pre-Owned Digi Fin
Slide 15: Strengthen tech and digital; differentiate through phygital
3 Strengthen tech and digital; differentiate through phygital Digitalizing core by building scalable & resilient Tech with Cloud 1st architecture Building next-gen API platform facilitated by micro services layer Leveraging AI/ML based models across customer lifecycle for better CX Partnering with a
Slide 16: Future ready human capital; Realigned organization
4 Future ready human capital; Realigned organization Optimizing capability mix across the organization through upskilling & hiring Instilling newer ways-of-working by adopting agile methodology Empowering employees with latest tech infrastructure to drive productivity Fostering a culture of digital
Slide 17: Sustainable profitable growth: Vision 2025
Sustainable profitable growth: Vision 2025 Stable asset quality 2x AUM New business contribution: GS-3 < 6% 15% Maintain NIMs ~7.5% Operating leverage: Cost to RoA ~2.5% Assets ~2.5% 16
Slide 18: Perspectives
20 2 Perspectives... | : Za
Slide 19: Transformation priorities
Transformation priorities 1 Stabilize Asset Quality Focus on bringing the volatility down 2 Recharge Growth Build high quality diversified business 3 Strengthen Tech & Digital Data informed thinking 4 Future Ready Human Capital High Performing Organisation 18 18
Slide 20: Mahindra Finance Strengths
Mahindra Finance Strengths Robust Business Model Rural Leadership Healthy Financial Returns Cross-sell Potential Strong Talent High conviction on Transformation Agenda 19
Slide 21: 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 22: Thank You
Thank You 21 21
Slide 23: MMFSL has built a strong business model
MMFSL has built a strong business model... Branches Customers AUM in lakhs INR ‘000 crores 2.3x 3.9x 3.5x 1384 65 79 607 20 19 FY12 FY22 FY12 FY22 FY12 FY22 ... profitability tested over long cycles 2.5% 2.6% 2.2% RoA* 1.8% 1.0% 1.3% 1.3% 0.4% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Demonetisation C
Slide 24: GS-3 recovery post macro stress events
GS-3 recovery post macro stress events Demonetization Covid - 19 GNPA/ GS-3 16% Stress period Recovery Stress period Recovery 12% 12.7% 12.3% 9.4% 8% 11.0% 11.3% 9.0% 8.5% Moratorium 9.0% Peak Stress 7.7% 4% 0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q3-20 Q4-20
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