Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q2 FY21 Earnings Presentation
42 slides from Manappuram Finance's earnings presentation, November 2020
Slide 1: Manappuram Finance Limited Investor Presentation
Manappuram Finance Limited Investor Presentation November 2020 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Q2 FY21 Results: Consolidated Result Highlights
Q2 FY21 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM *Net Profit Rs 4,054.4 Mn Rs 269,027 Mn Networth ROA 5.1% ( +10.2% QoQ) (+ 6.1% QoQ) Rs 64,508 Mn ROE 26.0% ( -6.4% YoY)/ +16.7% on (+18.6 % YoY) Adjusted Net Profit Capital Adequacy # Borrowing Cost # GNPA # BV / Share Rs 76.2 24.8% 9.13% 1.11% **
Slide 3: Q2 FY21 Results: Key Performance Highlights
Q2 FY21 RESULTS: KEY PERFORMANCE HIGHLIGHTS • Consolidated AUM growth with +18.6% YoY and +6.1 % QoQ Overall • Profitability of Rs 405 cr with 5.1% consolidated ROA, 26% consolidated ROE in Q2 FY21 Highlights • Prudent capital structure with leverage being only 3.8 times • Gold Loan AUM up 30.1% YoY
Slide 4: Agenda
Agenda Section 1 IMPACT OF COVID Section 2 QUARTERLY FINANCIAL UPDATE Section 3 COMPETITIVE STRENGTHS Section 4 COMPANY OVERVIEW ANNEXURE
Slide 5: Impact of Covid-19 on business
Impact of Covid-19 on business • All branches and office buildings are disinfected at regular basis; sanitizers provided to employees at key locations Operational • Social Distancing is being maintained in all Branches and Office Buildings update • 100% of branches are operational and business is ba
Slide 6: Collections have returned to pre-COVID levels across all business lines
Collections have returned to pre-COVID levels across all business lines MFI 69% 75% 90% 90% 55% 2% 17% (18.5% AUM) April May June July Aug Sep Oct 86% 89% 93% 106% Vehicle 75% 59% 43% Loans (3.9% AUM) April May June July Aug Sep Oct 85% 91% 95% 92% Affordable 76% 49% 60% Home Loans (2.3% AUM) April
Slide 7: Agenda
Agenda Section 1 IMPACT OF COVID Section 2 QUARTERLY FINANCIAL UPDATE Section 3 COMPETITIVE STRENGTHS Section 4 COMPANY OVERVIEW ANNEXURE
Slide 8: Trend in AUM Growth & Profitability
Q2 FY21 RESULTS: TREND IN AUM GROWTH & PROFITABILITY TOTAL AUM (Rs Bn) 269 252 253 241 227 194 202 172 178 166 158 147 134 137 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 NET PROFIT (Rs Mn) 3,978 3,982 4,054 3,475 3,680 2,556 2,668
Slide 9: Consolidated Profit & Loss Statement
Q2 FY21 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) H1 FY21 H1 FY20 YOY % Q2 FY21 Q2 FY20 YOY % Q1 FY21 QOQ % FY20 Closing AUM (Rs Bn) 269 227 18.6% 269 227 18.6% 253 6.1% 252 Income from Operations 30,781.1 25,337.2 21.5% 15,655.8 13,430.3 16.6% 15,125.3 3.5% 54,653.2 Finance
Slide 10: Consolidated Balance Sheet
Q2 FY21 RESULTS: CONSOLIDATED BALANCE SHEET Particulars (Rs Mn) Sep 2020 Sep 2019 YOY % June 2020 QOQ % Cash & Bank Balances 46,998.6 17,230.9 172.8% 54,208.2 -13.3% Investments 614.7 1,295.7 -52.6% 789.0 -22.1% Loans & Advances 2,60,618.8 2,13,845.2 21.9% 2,44,854.7 6.4% Fixed Assets 3,046.7 3,237.
Slide 11: Consolidated Result Highlights
Q2 FY21 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) CAGR: 16.6 % CAGR: 17.9 % 252 252 253 269 241 14,618 194 137 158 9,389 7,559 6,764 3,978 3,982 3,680 4,054 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY20 FY20 FY21 FY21 FY20 FY20 FY21 FY
Slide 12: Consolidated Result Highlights
Q2 FY21 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) CAGR: 14.3 % 64,508 57,451 54,132 57,461 60,368 CAGR: 14.3 % 45,247 76.2 38,132 68.0 68.0 71.4 33,633 64.1 53.7 39.9 45.3 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY20 FY20 FY21 FY21 FY2
Slide 13: Consolidated AUM Update
Q2 FY21 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY17 FY18 FY19 FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Gold Loans 111,245.3 117,349.8 129,615.2 169,671.8 162,429.5 169,671.8 177,367.9 1,97,360.2 Microfinance 17,959.4 24,372.0 38,407.8 55,026.4 50,221.4 55,026.4 50,383.
Slide 14: Manappuram Finance: Borrowing Profile
Q2 FY21 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON 30th Sep, 2020 = Rs 201,638 Mn CREDIT RATING Rs 155,746 Mn Rs 188,800 Mn Rs 201,638 Mn Manappuram Finance: 0% 0% 0% Domestic Rating : Long Term: AA (Stable) by CRISIL 9% 7% Long Term: AA- (Stable) by ICRA Long Term: AA+ (Stable)
Slide 15: Manappuram Finance: Standalone Result Analysis
Q2 FY21 RESULTS: MANAPPURAM FINANCE: STANDALONE RESULT ANALYSIS GOLD LOAN AUM (Rs Bn) OPEX TO AUM % CAGR: 11.1 % 8.9% 197 8.3% 177 7.2% 7.6% 170 162 170 7.0% 6.8% 130 5.4% 5.5% 111 117 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY20 FY20 FY21 FY21 FY20 FY20 FY21 FY21 NET PROFIT
Slide 16: Operating Cost Leverage Playing Out in the Business
OPERATING COST LEVERAGE PLAYING OUT IN THE BUSINESS OPEX GROWTH HAS TRAILED AUM GROWTH (Rs Cr) SIGNIFICANT RATIONALIZATION IN SECURITY COSTS (Rs Cr) YoY growth: 2.6% (vs. 26.6% standalone AUM growth) YoY decline: 85.1% 1,166 1,196 37 30 17 16 12 11 8 4 2 FY19 FY20 Q4 Q2 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY18 FY1
Slide 17: Manappuram Finance: Standalone Result Analysis
Q2 FY21 RESULTS: MANAPPURAM FINANCE: STANDALONE RESULT ANALYSIS NETWORTH (Rs Mn) NPA ANALYSIS % CAGR: 12.8 % 60,718 53,559 50,987 53,559 56,453 2.0% 43,922 1.3% 38,126 0.9% 0.9% 1.1% 33,112 0.7% 0.5% 0.5% 1.7% 0.5% 0.5% 0.7% 0.7% 0.3% 0.3% 0.2% FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY17 FY18 FY19 FY20 Q3
Slide 18: Manappuram Finance: Gold AUM Update
Q2 FY21 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE PAN INDIA PRESENCE GOLD AUM - REGIONWISE BREAKUP Jammu & Kashmir, 10 Himachal Pradesh, 13 Chandigarh, 4 Delhi, 59 12% Uttarakhand, 8 58% Punjab, 75 16% Uttar Pradesh, 140 14% Haryana, 64 Assam, 18 Bihar, 24 Rajasthan, 96 Tripura, 2 South North Wes
Slide 19: Manappuram Finance: Gold AUM Update
Q2 FY21 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE GOLD HOLDING (TONNES) GOLD AUM PER BRANCH (Rs Mn) 72.4 73.5 72.4 CAGR: 9.2 % 56.0 67.5 69.0 68.8 48.1 48.1 50.3 61.1 64.0 46.0 38.4 33.8 35.3 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY20 FY20 FY21 FY21 FY20 FY20 FY21 FY21 C
Slide 20: Online Gold Loan: Business Update
Q2 FY21 RESULTS: ONLINE GOLD LOAN: BUSINESS UPDATE ONLINE GOLD LOANS SUPERIOR FOR CUSTOMERS AVERAGE TICKET SIZE (Rs ‘000) • First NBFC to launch Online Gold Loan (OGL) in September 2015 56.48 50.20 50.20 51.24 • Facility enables customers to avail a gold loan anytime, from anywhere 45.51 44.61 47.44
Slide 21: Asirvad Microfinance: Key Highlights
Q2 FY21 RESULTS: ASIRVAD MICROFINANCE: KEY HIGHLIGHTS Particulars (Rs Mn) H1 FY21 H1 FY20 YOY % Q2 FY21 Q2 FY20 YOY % Q1 FY21 QOQ % FY20 Closing AUM 49,710.3 47,242.5 5.2% 49,710.3 47,242.5 5.2% 50,383.1 -1.3% 55,026.4 Income from Operations 5,183.9 4,950.7 4.7% 2,550.5 2,778.7 -8.2% 2,633.4 -3.1% 1
Slide 22: Asirvad Microfinance: Result Analysis
Q2 FY21 RESULTS: ASIRVAD MICROFINANCE: RESULT ANALYSIS AUM (Rs Mn) RETURN RATIOS % 55,026 55,026 CAGR: 32.3 % 50,221 50,383 49,710 26.8% 24.1% 38,408 25.5% 13.9% 25.0% 24,372 -3.5% 4.8% 4.6% 4.9% -1.0% 17,959 2.5% -0.2% 5.3% -0.4% -0.2% -0.9% FY17 FY18 FY19 FY20 Q3 Q4 Q1 Q2 FY17 FY18 FY19 FY20 Q3 Q4
Slide 23: Asirvad Microfinance: AUM Update
Q2 FY21 RESULTS: ASIRVAD MICROFINANCE: AUM UPDATE PAN INDIA PRESENCE MFI AUM - STATEWISE BREAKUP Uttarakhand, 8 Others, 11% Chandigarh, 1 Uttar Pradesh, 66 Maharashtra, 3% Tamil Nadu, 22% Bihar, 94 Odisha, 4% Punjab, 31 Sikkim, 1 Rajasthan, 5% Assam, 14 Jharkhand, 5% Haryana, 24 West Bengal, 12% Wes
Slide 24: Asirvad Microfinance: Liabilities Overview
Q2 FY21 RESULTS: ASIRVAD MICROFINANCE: LIABILITIES OVERVIEW BORROWING MIX COST OF FUNDS Rs 36,237 mn Rs 49,791 mn Rs 41,519 mn 9% 12.3% 12.3% 11% 11.8% 11.6% 11.6% 11.2% 1% 11.1% 11.0% 1% 2% 3% 26% 14% 19% 1% 3% 13% 15% 15% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY19 FY19 FY20 FY20 FY20 FY20 FY21 FY21 12% CREDIT R
Slide 25: MFI Deep-dive: Portfolio performance has improved across geographies
MFI Deep-dive: Portfolio performance has improved across geographies STEADY IMPROVEMENT IN COLLECTIONS EFFICIENCY (INR HEALTHY IMPROVEMENT IN TOP STATES CR) % AUM July Aug Sep Oct (Oct’20) 90% Tamil Nadu 22% 66% 80% 95% 98% 458 415 90% 429 437 427 426 West Bengal 12% 56% 61% 75% 75% 399 75% 69% Biha
Slide 26: Housing Finance: Business Update
Q2 FY21 RESULTS: HOUSING FINANCE: BUSINESS UPDATE AUM EVOLUTION (Rs Mn) AUM MIX (%) ATS (INRL) Yield CAGR: 19.3 % 6,296 6,012 6,296 6,273 6,206 25% 26% 26% 26% 6.3 18% 5,188 3,747 24% 30% 30% 31% 3,104 6.5 16% 51% 44% 44% 43% 10.8 14% FY17 FY18 FY19 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 FY 19 FY 20 Q
Slide 27: Vehicle and Equipment Finance: Business Update
Q2 FY21 RESULTS: VEHICLE AND EQUIPMENT FINANCE: BUSINESS UPDATE AUM EVOLUTION (Rs Mn) AUM MIX (%) ATS (INRL) Yield 13,443 13,974 13,443 12,703 CV TW PV CAGR: 44.8 % 11,146 10,623 8% 9% 10% 12% 6.4 18% 23% 24% 23% 21% 6,254 0.5 24% 3,058 69% 68% 67% 66% 7.4 18% FY17 FY18 FY19 FY20 Q3 FY20Q4 FY20Q1 FY
Slide 28: Agenda
Agenda Section 1 IMPACT OF COVID Section 2 QUARTERLY FINANCIAL UPDATE Section 3 COMPETITIVE STRENGTHS Section 4 COMPANY OVERVIEW ANNEXURE
Slide 29: Competitive strengths
Competitive strengths 1 Superior process and product innovation 2 Pan India MFI business with granular asset base and strong risk practices 3 Prudent liabilities strategy 4 Well governed with independent board and deep management bench 29
Slide 30: Superior process and product innovation
1 Superior process and product innovation Strong operational risk management sets Manappuram apart STRICT CUSTODIAL RISK COMPLEX APPRAISAL PROCESS HIGH BRANCH LEVEL SECURITY MANAGEMENT • Complex appraisal process accounting • Pioneer in installing cellular vaults • 100% insurance for gold held in fo
Slide 31: Innovated 3 month product resulting in lower credit losses
1 Superior process and product innovation Innovated 3 month product resulting in lower credit losses 12 month tenor 3 month tenor Actual loan tenor (days) Gold value 100 100 3 month LTV (%) 75 75 60 product de- 47 risks impact Gold loan 75 75 from Interest rate (%) 24 24 fluctuation in Interest cost
Slide 32: Pan India MFI business with granular asset base and strong risk practices
2 Pan India MFI business with granular asset base and strong risk practices Operational Risk Geographic concentration Branch and Division level Employee level ✓ Lower ATS vs. industry ➢ Portfolio outstanding ➢ Monthly internal audits at all branches ➢ Mandatory rotation for all employees at branch a
Slide 33: Prudent Liabilities strategy with CoF
3 Prudent Liabilities strategy with CoF Access to diversified sources of funding (Consolidated) Cost of borrowing (Consol) Rs 185,204 Mn Rs 242,601 Mn Rs 247,346 Mn 0% 0% 0% 7% 6% 21% 11% 11% 2% 11% 21% 28% 9.8% 9.8% 9.3% 24% 32% 29% 42% 29% 26% Q2 FY20 Q1 FY21 Q2 FY21 Q2 Q1 Q2 FY20 FY21 FY21 WCDL/C
Slide 34: Well governed with independent board and deep management bench
4 Well governed with independent board and deep management bench Key managerial personal Board of Directors • Postgraduate in Science • Fellow member of the • Former Chairman: HDFC • B.Com Kerala University, • Masters degree in • Managing committee Institute of Chartered Bank, Unit Trust of India &
Slide 35: Agenda
Agenda Section 1 IMPACT OF COVID Section 2 QUARTERLY FINANCIAL UPDATE Section 3 COMPETITIVE STRENGTHS Section 4 COMPANY OVERVIEW ANNEXURE
Slide 36: Company Overview
Company Overview Leading diversified NBFC in India Group structure • Incorporated in 1992, Manappuram is Non-Banking Financial Company (NBFC) Products under standalone entity Manappuram Finance offering a diversified product portfolio including gold loans, microfinance loans, vehicle and equipment f
Slide 37: Key milestones
Key milestones 1992-2000 2006-2010 2016-2019 • Incorporated at Thrissur • Fullerton India/Temasek sanctions credit limit of • Acquires 100% ownership of Manappuram Insurance • First public issue of shares for INR17.5m with listing on INR500m, enhances the limit to INR4.8bn within a year Brokers Bomb
Slide 38: Agenda
Agenda Section 1 IMPACT OF COVID Section 2 QUARTERLY FINANCIAL UPDATE Section 3 COMPETITIVE STRENGTHS Section 4 COMPANY OVERVIEW ANNEXURE
Slide 39: Understanding our Evolution Phase 1: FY08-FY12
UNDERSTANDING OUR EVOLUTION PHASE 1: FY08 - FY12 STRONG GROWTH WITNESSED…. 2908 3000 ▪ Higher Loan To Value (LTV) up to 85% 150 2064 116 ▪ Lower Cost of Funds due to Eligibility under Priority Sector 2250 100 Lending 75 1500 1005 ▪ Supported by Buoyant Economic Growth 50 645 436 750 ▪ Long Tenure Pr
Slide 40: Understanding our Evolution Phase 2: FY12-FY14
UNDERSTANDING OUR EVOLUTION PHASE 2: FY12 - FY14 REGULATORY OVERHANG IMPACT…. Regulatory Changes by RBI- 140 ▪ Mar - 2012 : Removal of Priority Sector Lending Status 120 116 100 – led to Higher Borrowing Cost. 100 75 82 80 60 ▪ Mar - 2012 : Cap on LTV to not exceed more than 60% 40 - 20 0 ▪ Weakened
Slide 41: Understanding our Evolution Phase 3: FY15 Onwards
UNDERSTANDING OUR EVOLUTION PHASE 3: FY15 ONWARDS ON A REVIVAL PATH….. Sept – 2013 : Regulatory Changes by RBI- 150 ▪ Increased the loan-to-value (LTV) ratio for gold loans to 130 116 111 117 75 per cent - 100 92 101 100 82 ▪ Resulting into Level Playing Field for NBFCs vis-a-vis the commercial bank
Slide 42: For Further Queries
FOR FURTHER QUERIES: DISCLAIMER : Mrs. Bindu A. L This presentation and the contents therein are for information purposes only and CFO does not and should not construed to be any investment or legal advice. Any action Contact No : +914873050000 taken or transaction pursued based on the basis of the