Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q3 FY12 Earnings Presentation
39 slides from Mahindra & Mahindra Financial Services's earnings presentation, January 2012
Slide 1: Mahindra & Mahindra Financial Services Limited Result Update December 2011
Mahindra & Mahindra Financial Services Limited Result Update DECEMBER - 2011
Slide 2: Company overview
Company overview 2
Slide 3: Background
Background Mahindra & Mahindra Financial Services Limited (M&MFSL) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 403 billion)*, one of India’s leading tractor and utility vehicle manufacturers M&MFSL (Mcap: Rs 69 billion)* is one of India’s leading non-banking finance companies focused
Slide 4: M&MFSL Group structure
M&MFSL Group structure Mahindra and Mahindra Limited 56% M&MFSL 87.5% , balance 100% 12.5% with National 49% 100% Housing Bank Mahindra Finance Mahindra Rural Mahindra Insurance USA LLC Mahindra Business & Housing Brokers Limited (Joint venture Consulting Services Finance Limited (“MIBL”) with Rabob
Slide 5: Shareholding pattern
Shareholding pattern (as on December 31, 2011) Public ESOP Trust 3.8% 1.4% DII (Mutual Funds) 5.7% FII Promoters 33.1% 56.0% Incorporated in 1991 and initially provided financing to dealers of Mahindra & Mahindra Limited The Company also issued shares to the ESOS trust in December 2005 The Company c
Slide 6: Competitive strengths
Competitive strengths 6
Slide 7: Competitive strengths
Competitive strengths Product Product portfolio portfolio and and knowledge knowledge catering catering to to rural rural and and semi-urban semi-urban #1 #1 markets markets #2 #2 Extensive Extensive network network of of branches branches #3 #3 Established Established track track record record #4 #
Slide 8: Product portfolio and knowledge catering to rural and semi-urban markets
Product portfolio and knowledge catering to rural and semi-urban markets Vehicle Vehicle Loans Loans for for auto auto and and utility utility vehicles, vehicles, tractors, tractors, cars cars ,, commercial commercial vehicles vehicles and and Financing Financing construction equipments construction
Slide 9: Break down of estimated value of Assets Financed
Break down of estimated value of Assets Financed Nine Months ended Nine Months ended Full year ended Segments December-11 December-10 March-11 Auto/ Utility vehicles (M&M) 27% 30% 29% Tractors (M&M) 20% 22% 22% Cars and other (including non M&M 32% 33% 33% vehicles) Commercial vehicles and 11% 6% 7%
Slide 10: Break down of AUM
Break down of AUM As on As on As on Segments December-11 December-10 March-11 Auto/ Utility vehicles (M&M) 30% 30% 31% Tractors (M&M) 20% 23% 23% Cars and other (including non M&M 31% 33% 31% vehicles) Commercial vehicles and 12% 8% 9% Construction equipments Pre-owned vehicles and others 7% 6% 6% 1
Slide 11: Extensive branch network
Extensive branch network M&MFSL has an extensive branch network with presence in 24 states and 4 union territories in India through 592 offices as of December 31, 2011 – Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of 4 16 10 7 17 7 40 1 58 592 19
Slide 12: Established track record
Established track record Figures on consolidated basis Loans & Advances and Borrowings (Rs. million) Total Assets (Rs. million) Loans & Advances CAGR (FY09-FY11): 32.1% CAGR(FY09-FY11): 33.2% Borrowings CAGR (FY09-FY11): 36.9% 1,78,497 1,85,735 1,39,703 1,39,396 1,26,692 89,024 97,846 78,590 96,154
Slide 13: Established track record
Established track record Figures on standalone basis ROA (Avg. Assets) (%) RONW (Avg. Net Worth) (%) 4.1% 4.1% 21.5% 22.0% 20.9% 3.7% 19.2% 3.0% 3.3% 15.4% FY09 FY10 FY11 9M FY11 9M FY12 FY09 FY10 FY11 9M FY11 9M FY12 Gross NPA and Net NPA to Total Assets (%) Leverage ratio 8.7% 4.4 4.7 6.4% 3.5 3.7
Slide 14: Key Risks & Management Strategies
Key Risks & Management Strategies Volatility in interest rates Matching of asset and liabilities Rising competition Increasing branch network Raising funds at competitive rates Maintaining credit rating & improving asset quality Dependence on M&M Increasing non-M&M Portfolio Occurrence of natural di
Slide 15: Financial Information
Financial Information 15
Slide 16: Standalone Profit & Loss Statement
Standalone Profit & Loss Statement Nine Months ended Nine Months ended Year ended Particulars (Rs. million) December – 11 December – 10 March – 11 Income from operations 19,296 13,823 19,739 Other income 460 280 387 Total income 19,756 14,103 20,126 Interest cost 7,899 4,646 6,602 Administrative cos
Slide 17: Standalone Balance Sheet
Standalone Balance Sheet As on As on As on LIABILITIES (Rs. million) December – 11 December – 10 March – 11 Shareholder’s funds 28,887 20,365 24,901 Secured loans 101,093 63,170 83,006 Unsecured loans 34,205 27,349 13,744 Current liabilities & provisions 15,923 15,747 15,890 TOTAL 180,108 126,631 13
Slide 18: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Nine Months ended Nine Months ended Year ended Particulars (Rs. million) December – 11 December – 10 March – 11 Income from operations 20,169 14,301 20,435 Other income 300 232 309 Total income 20,469 14,533 20,744 Interest cost 8,008 4,689 6,662 Administrative c
Slide 19: Consolidated Balance Sheet
Consolidated Balance Sheet As on As on As on LIABILITIES (Rs. million) December – 11 December – 10 March – 11 Shareholder’s funds 29,567 20,833 25,450 Minority Interest 75 46 47 Secured loans 105,691 64,175 84,349 Unsecured loans 34,012 27,103 13,497 Current liabilities & provisions 16,390 15,852 16
Slide 20: Funding
Funding M&MFSL believes that its credit rating and strong brand equity enable it to borrow funds at competitive rates Total consortium size of Rs. 10 billion comprising several banks CRISIL Rating Outlook Fixed Deposit programme FAAA Stable Short term debt A1+ Stable Long term and Subordinated debt
Slide 21: Source of Borrowing
Source of Borrowing (as on December 31, 2011) Figures on standalone basis Fund Mix on the basis of Investor profile Fund Mix on the basis of Instrument Banks for Assignment Assignment (Rs.17731 (Rs.17731 Insurance mn) mn) Co. & 12% CP, ICD 12% Institutions (Rs. 16094 (Rs.12234 mn) mn) 10% 8% Bank Te
Slide 22: Loan Receivables Assignment
Loan Receivables Assignment M&MFSL assigns parts of its loan receivables to third parties to improve its capital adequacy ratio and to increase the efficiency of its loan portfolio. M&MFSL has completed 48 securitisation / Assignment transactions as of December 31, 2011. Particulars (Rs. million) FY
Slide 23: Highlights for Q3-FY12 Vs Q3-FY11
Highlights for Q3- FY12 Vs Q3- FY11 Figures on standalone basis Rs.7,467 mn Rs.1,547 mn Rs.58,857 mn 41% 33% 39% Rs.5,300 mn Rs.1,159 mn Rs.42,390 mn Total Income Profit After Tax Value of Assets Financed 23
Slide 24: Highlights for 9M-FY12 Vs 9M-FY11
Highlights for 9M- FY12 Vs 9M- FY11 Figures on standalone basis Rs.19,756 mn Rs.3,924 mn Rs.141,721 mn 40% 28% 36% Rs.14,103 mn Rs.3,066 mn Rs.104,563 mn Total Income Profit After Tax Value of Assets Financed Assets under Management have increased from Rs.138,896 Mn to Rs.194,595 Mn year-on-year bas
Slide 25: Summary of Results
Summary of Results Figures on standalone basis Nine Months ended Nine Months ended Year ended Particulars (Rs. million) December – 11 December – 10 March – 11 Total Income 19,756 14,103 20,126 Profit before tax 5,831 4,585 7,024 Profit after tax 3,924 3,066 4,631 Dividend (%) -- -- 100 Net Worth 28,
Slide 26: Ratio Analysis
Ratio Analysis Figures on standalone basis Nine Months ended Nine Months ended Year ended December – 11 December – 10 March – 11 PBT/Total Income 29.5% 32.5% 34.9% PBT/Total Assets 4.4% 4.8% 5.2% RONW (Avg. Net Worth) 19.2% 20.9% 22.0% Overheads/Total Assets 3.3% 3.7% 3.6% Debt / Equity 4.69:1 4.44:
Slide 27: Spread Analysis
Spread Analysis Figures on standalone basis Nine Months ended Nine Months ended Year ended December – 11 December – 10 March – 11 Total Income / Average Assets 16.9% 17.4% 17.9% Interest / Average Assets 6.7% 5.7% 5.8% Gross Spread 10.2% 11.7% 12.1% Overheads / Average Assets 3.8% 4.3% 4.4% Write of
Slide 28: NPA
NPA Figures on standalone basis Particulars (Rs. million) December – 11 December – 10 March – 11 Gross Non - Performing Assets 7,382 7,104 5,488 Less: NPA Provisions 5,494 5,798 4,744 Net Non – Performing Assets 1,888 1,306 744 Total Assets (Incl. NPA Provision) 181,381 127,907 138,606 Gross NPA to
Slide 29: Provisioning Norms
Provisioning Norms Duration (months) RBI Norms Duration (months) M&MFSL > 5 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% At M&MFSL NPA provisioning norms are more stringent than RBI norms 29
Slide 30: Technology initiatives and Employee management
Technology initiatives and Employee management 30
Slide 31: Technology initiatives
Technology initiatives Approximately 91% of our 592 offices are connected to the centralised data centre in Mumbai Through hand held devices connected by GPRS to the central server, we transfer data which provides – Prompt intimation by SMS to customers – Complete information to handle customer quer
Slide 32: Employee engagement & training
Employee engagement & training Training programs for employees on continuous basis. 5 days induction program on product knowledge, business processes and aptitude training. Launch of Mahindra Finance Academy for training prospective and present employees. Assessment & Development Centre for critical
Slide 33: Information about key subsidiaries
Information about key subsidiaries 33
Slide 34: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Nine Months ended Nine Months ended Year ended Particulars (Rs. million) December – 11 December – 10 March – 11 Loans disbursed 1,810 1,362 2,036 No. of Customer Contracts (Nos) 19,762 12,835 21,981 Outstanding loan book 4,642 2,577 3,152 Total income 595 332 4
Slide 35: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Nine Months ended Nine Months ended Year ended Particulars (Rs. million) December – 11 December – 10 March – 11 Total income 259 375 517 Net premium 2,786 2,037 2,891 PBT 69 238 329 PAT 46 155 218 No. of Policies for the Period (nos.) 502,841 349,790 508,877 No. of
Slide 36: Business Strategies
Business Strategies 36
Slide 37: Business Strategies
Business Strategies Grow Grow market market share share in in rural rural and and semi semi urban urban & & vehicle vehicle and and automobile automobile financing financing market market Expand Expand nationwide nationwide network network of of branches branches Diversify Diversify product product
Slide 38: 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 39: Thank you
Thank Thank you you
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