Mas Financial Services Ltd. · NSE:MASFIN
Mas Financial Services — Q4 FY20 Earnings Presentation
61 slides from Mas Financial Services's earnings presentation, Jun 4, 2020
Slide 1: Cover letter to stock exchanges
'I1ie <l'uwer of<Distri6uticn 4Jl!{J\� FINANCIAL SERVICES LIMITED MFSL/SEC/EQ/2020/29 June 04, 2020 To, To, The Manager, General Manager BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza Dalal Street Plot No. C/1, G Block Mumbai - 400001 Bandra-Kurla Compl
Slide 2: Investor Presentation Q4 FY20
<J'lie (power of (J)istri6ution INVESTOR Corporate – PRESENTATION Presentation Q4 FY20 REGISTERED OFFICE MAS Financial Services Limited 6, Ground Floor, Narayan Chambers, Ashram Road, Ahmedabad-380009
Slide 3: Disclaimer
"' Disclaimer � Q>ower of<Distri6ution. � ENDEAVOURS This presentation has been prepared by and is the sole responsibility of MAS Financial Services Limited (together with its subsidiary MAS Rural Housing & Mortgage Finance Limited). By accessing this presentation, you are agreeing to be bound by th
Slide 4: Table of Content
"' Table of Content � Q>ower of<Distri6ution. � ENDEAVOURS Journey of 100 Quarters: Consistent Performance 4 Assessment of Covid-19 impact 6 Milestones 13 Understanding MAS 14 Q4 FY19-20 Results 26 Overview 27 Product Offerings 28 Credit Assessment & Risk Management Framework 30 Retail Presence & Di
Slide 5: Journey of 100 Quarters
VERY TIME WER! A MILESTONG., WE BELIEVE. WEAVE JUST BEGUN... JOURNEY OF
Slide 6: Consistent Growth in AUM and PAT
"' Consistent Growth in AUM and PAT � Q>ower of<Distri6ution. � ENDEAVOURS Asset Under Management (AUM) In INR Mn 59,663 53,384 41,570 31,561 25,650 20,052 13,910 10,123 3,884 5,118 6,909 1,510 2,312 2,597 2,682 20 4Q 44Q 48Q 52Q 56Q 60Q 64Q 68Q 72Q 76Q 80Q 84Q 88Q 92Q 96Q 100Q Profit After Tax (PAT
Slide 7: Assessment of Covid-19 impact
"' Assessment of Covid-19 impact on the basis of : 'T1u <Power of rDistri6ution � ENDEAVOURS Strong Fundamentals Asset Management Liquidity Management Operational Management Employees Profitability Going Forward SLIDE: 6
Slide 8: Strong Fundamentals
"' Strong Fundamentals : � ENDEAVOURS 'T1u <Power of rDistri6ution Enablers for Navigating through current unprecedented challenges Successful and Proven Track Record of Navigating through Various challenges in the Past Higher provisioning buffer Adequate capital buffer with (Special contingent prov
Slide 9: Covid 19 Impact: Assets and Portfolio Quality
"' COVID 19 IMPACT 'T1u <Power of rDistri6ution � ENDEAVOURS Assets and Portfolio Quality: • The company’s AUM stood at INR 59,663 Mn. registering a growth of 11.76% over the previous year. The company missed the opportunity of approx. INR 3,250 Mn. Disbursement in March 2020 due to lockdown, potent
Slide 10: Covid 19 Impact: Liquidity Management
"' COVID 19 IMPACT 'T1u <Power of rDistri6ution � ENDEAVOURS Liquidity Management: • Company’s Capital adequacy remains strong at 30.96% with Tier I Capital of 28.87%. • As on 31st May 2020, the company had liquidity buffer of around INR 7,000 Mn. and unutilised Cash Credit facility of INR 7,000 Mn.
Slide 11: Covid 19 Impact: Operational Management
"' COVID 19 IMPACT 'T1u <Power of rDistri6ution � ENDEAVOURS Operational Management: • Currently , out of 105 branches 96 branches are operational with minimum staffing to be scaled up gradually depending upon the situation. • Company uses banking platform for 100% of its disbursement and collection
Slide 12: Covid 19 Impact: Profitability
�5# "' COVID 19 IMPACT '11ie <Power of<Distd6u.tion ENDEAVOURS Profitability : • Profit after Tax for the year ended 31 March 2020 is INR 1,782 Mn. as compared to INR 1521 Mn. respectively for the year ended 31 March 2019. A Growth 17.16% in PAT over the corresponding period of the previous year. (A
Slide 13: Covid 19 Impact: Going Forward
�5# "' COVID 19 IMPACT '11ie <Power of<Distd6u.tion ENDEAVOURS Going Forward : • The company will continue its dictum of extending credit where it is due. • As a prudent business strategy over the years the company firmly believes in taking medium to long term view of its business which ensures stab
Slide 14: Major events and milestones in the history
Major events and milestones in the history '11ie rJ>owerof <Distri6ution -� ,!:. Of ENDEAVOURS "' 2020 AUM crossed INR 60 Bn. on a consolidated basis. AUM crossed INR 50 Bn. 2019 Bank loan rating upgraded to “ACUITE AA -” with Stable outlook and Short term rating assigned as ACUITE A1+. 2018 Listing
Slide 15: Understanding MAS
�sr ,,, Understanding MAS 'I1ie <Powerof<Distri6ution ENDEAVOURS Vision, Mission and Belief Team MAS Fundamentals – Assets, Liability and Operational excellence Going Forward…… SLIDE: 14
Slide 16: Vision, Mission and Belief
' I ., �" <@> 'I1ie<Prnwrof(l)istri611.tion ENDEAVOURS ., I ' VISION MISSION VISION To be one of the most efficient distributors of financial services and create value on a very large scale. MISSION To constantly endeavour, to attain excellence and create a very wide Financial distribution network a
Slide 17: Team MAS
"' � � Q>ower of<Distri6ution. ENDEAVOURS TEAM MAS SLIDE: 16
Slide 18: Team MAS: Experienced Promoters
"' Team MAS 'l1ie <Power of<Distn·6u.tion � ENDEAVOdRs EXPERIENCED PROMOTERS Mr. Kamlesh Chimanlal Gandhi, aged 54 years, is the Founder, Chairman and Managing Director of MAS since inception. He visualized the opportunities in the retail financial services very early and has been leading the st
Slide 19: Team MAS: Eminent Directors
"' Team MAS 'Tfie <l'o'&wr' of<Distn'6ution � ENDEA vo:!ns EMINENT DIRECTORS Darshana Saumil Pandya, aged 47 years, is an executive Director and Chief Executive Officer of MAS Financial. She has been associated with the Company since June 1, 1996, and as an executive Director since December 23, 20
Slide 20: Team MAS: Core and Execution Team
"' Team MAS 'T1u <Power of rDistri6ution � ENDEAVOURS CORE TEAM Consisting of more than 35 employees being with MAS since inception and inclusion of lateral talents who have proven their capability, dedication and loyalty. EXECUTION TEAM Consisting of more than 1500 employees who works along with th
Slide 21: Fundamentals
"' � � Q>ower of<Distri6ution. ENDEAVOURS FUNDAMENTALS SLIDE: 20
Slide 22: Asset Creation
"' �� Asset Creation: '11ie rJ>owerof <Distri6ution �-�Z' ENDEAVOURS DICTUM: CREDIT PRODUCT MIX WHERE IT IS DUE UNIQUE ADDING VALUE DISTRIBUTION MODEL SLIDE: 21
Slide 23: Liability Management
"' �� Liability Management: '11ie rJ>owerof <Distri6ution �-�Z' ENDEAVOURS SELF PROPELLING BUSINESS MODEL – CAPITAL REQUIREMENT MET HEALTHY ALM PREDOMINANTLY FROM INTERNAL ACCRUALS PLANNING AND RIGHT MIX OF MAINTAINING RESOURCES COST EFFICIENCY SLIDE: 22
Slide 24: Operational Excellence: Key Enablers
"' Operational Excellence: Key Enablers 'T1u <Power of rDistri6ution � ENDEAVOURS Focusing on Being a extending credit HR Policy Learning where it is due Organization Understanding the fact that the operational excellence is key in lending business SLIDE: 23
Slide 25: Going Forward
"' � � Q>ower of<Distri6ution. ENDEAVOURS GOING FORWARD SLIDE: 24
Slide 26: Going Forward
"' Going Forward……….. 'T1u <Power of rDistri6ution � ENDEAVOURS Asset Creation • To anchor to our belief that, growth along with quality is the key to enhance the shareholders’ value. • Anticipated growth for the next five years to be in the range of 20% - 30% with an understanding of recalibrating
Slide 27: Q4 FY19-20 Results
"' � � Q>ower of<Distri6ution. ENDEAVOURS Q4 FY19-20 RESULTS SLIDE: 26
Slide 28: Overview
�c::-J.'' Overview '11i.e Qvwerof([)istri6ution �-�t ENDEAVOURS SPECAILISED IN IN RETAIL RETAIL LENDING LENDING SINCE 25 YEARS Diversified Product Portfolio Strong Retail Presence & Wide Distribution Network 6 states and Sourcing Intermediaries 'D' Bi,&. Micro-Enterprise loans(MEL) oO SME loans NCT
Slide 29: Diversified product offerings presenting significant growth opportunities
Diversified product offerings presenting significant 9�'· ��7' growth opportunities 'l1u cPowe,.of<Distri6ution ENDEAVOURS MAS focuses on serving the underserved credit needs of mid and low income group segments Micro-Enterprise Loans SME Loans Loans of up to INR 300,000 to Micro-Enterprises Loa
Slide 30: Recent Growth in Overall AUM
"' Recent Growth in Overall AUM 'T1u <Power of rDistri6ution � ENDEAVOURS MAS’ has exhibited steady growth in AUM over the years AUM by Product Category (INR Mn) Segment growth YOY March -19 vs March -20 1,547 4,003 1,582 4,654 Commercial Vehicle loans -2.23% 17,740 1,468 13,505 2-Wheeler loans 3,33
Slide 31: Robust Credit Assessment and Risk Management Framework
Robust and Comprehensive Credit Assessment and "' � Risk Management Framework 'T1u <Power of rDistri6ution ENDEAVOURS MAS aims to give credit where it is due with the dictum of adherence and adaptability Robust credit assessment Credit assessment process overview by Product Micro-Enterprise Loans
Slide 32: Retail Presence and Distribution Network
��" Retail Presence and Distribution '11ie a!ower of<Distn"6ution �-;; . : ENDEAVOURS 700,000+ active customers across 3,450 locations in Rural, semi urban and urban locations Presence in the high growth markets in West and South Delhi NCT MAS has expanded to 105 branches in 6 Rajasthan J states a
Slide 33: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through "' � NBFC Partners 'T1u <Power of rDistri6ution ENDEAVOURS Efficient last mile delivery of credit Value chain approach has proven to across its product range namely MEL, be the most potent one to solve SME, 2 Wheeler and Commercial informality because o
Slide 34: NBFC Partners: Operational Dynamics
Unique and Robust Distribution Network Through "' � NBFC Partners 'T1u <Power of rDistri6ution ENDEAVOURS Operational Dynamics Key Criteria for starting relationship: Promoters Product Operational Financial Growth Strategy Capital Base Evaluation Alignment Excellence Performance Credit Assessment Pr
Slide 35: NBFC Partners: Impact
Unique and Robust Distribution Network Through "' � NBFC Partners 'T1u <Power of rDistri6ution ENDEAVOURS MAS NBFCs • Widens its network while maintaining a • Value addition in improving their systems relatively lower risk profile and operations which helps in scalability and Sustainability of busin
Slide 36: NBFC Partners: Track Record and Going Forward
Unique and Robust Distribution Network Through "' � NBFC Partners 'T1u <Power of rDistri6ution ENDEAVOURS TRACK RECORD • Started with 1 NBFC in 2008, currently • Have grown at a CAGR of around 35% having relationship with more than 100 in last five years across our product range such NBFCs having vi
Slide 37: Retail focused partner NBFCs – An Overview
�c..-J."' Retailed focused partner NBFCs – An Overview '11ie <Powerof<Distri.6ution �-�t ENDEAVOURS Retail focused small regional NBFCs inevitable for last mile delivery of credit. Adequately Capitalized Experienced Management Matching ALM with no liquidity issue for repayment. Demonstrated their ca
Slide 38: Liability Management: Borrowing Mix
"' �� Liability Management '11ie rJ>owerof <Distri6ution �-�Z' ENDEAVOURS Borrowing Mix as on 31st March 2020 2% 24% DIRECT ASSIGNMENT 50% CASH CREDIT 24% TERM LOAN SUB DEBT • Efficient liability management ensures : • Adequate liquidity round the year. • No asset liability mismatch. • Tie up for th
Slide 39: Liability Management: Liability Planning
"' Liability Management 'T1u <Power of rDistri6ution � ENDEAVOURS Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Company withstood the litmus test very successfully during this which was one of the most challenging year – A testimo
Slide 40: Consistent Growth in AUM and PAT
"' Consistent Growth in AUM and PAT 'T1u <Power of rDistri6ution � ENDEAVOURS Asset Under Management (AUM) In INR Mn 59,663 53,384 41,570 31,561 25,650 20,052 13,910 10,123 3,884 5,118 6,909 1,510 2,312 2,597 2,682 20 Mar-1996 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar
Slide 41: Key Achievements Highlights – FY20 vs FY19
0�'· Key Achievements Highlights – FY 20 vs FY 19 "IM <Power of<Distri6ution �-�' ;__' ENDEAVOURS AUM PAT NII NET STAGE 3 FY20 INR 59,663 Mn INR 1,782 Mn INR 4,111 Mn 1.14% 12% 17% 12% FY19 INR 53,384 Mn INR 1,521 Mn INR 3,684 Mn 1.14% Note: PAT without effect of special COVID provisioning works out
Slide 42: Key Achievements Highlights – Q4 FY20 vs Q4 FY19
0�'· Key Achievements Highlights – Q4 FY 20 vs Q4 FY 19 "IM <Power of<Distri6ution �-�' ;__' ENDEAVOURS AUM REVENUE NII NET STAGE 3 Q4 FY20 INR 59,663 Mn INR 1,729 Mn INR 1039 Mn 1.14% 12% 11% 4% Q4 FY19 INR 53,384 Mn INR 1,556 Mn INR 999 Mn 1.14% Note: PAT without effect of special COVID provisioni
Slide 43: Financial Performance Trends – Q4 FY20
"' Financial Performance Trends – Q4 FY20 'T1u <Power of rDistri6ution � ENDEAVOURS In INR Mn Robust Performance ASSETS UNDER MANAGEMENT (AUM) NET WORTH 59,663 10387 53,384 9098 7739 41,570 Mar-18 Mar-19 Mar-20 Mar-18 Mar-19 Mar-20 BORROWING ON & OFF BOOK AUM 31,227 25,670 38% 39% 44% 17,571 OFF BOO
Slide 44: Financial Performance Trends – Revenue, NII, PBT, PAT
�5# "' Financial Performance Trends – Q4 FY20 '11ie <Power of<Distd6u.tion ENDEAVOURS Consistent Rise in … In INR Mn REVENUE NET INTEREST INCOME (NII) 6,831 4,111 5,726 3,684 4,509 2,804 1,556 1,729 999 1,039 FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20 FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20 PROFIT BEFORE TAX (PBT)
Slide 45: Financial Performance Trends – Efficiency
"' Financial Performance Trends – Q4 FY20 'T1u <Power of rDistri6ution � ENDEAVOURS Focus on Efficiency RETURN ON AVG. BALANCE SHEET ASSETS RETURN ON AVG. AUM (ROAUM)* (ROTA)* 4.75% 4.59% 4.38% 4.31% 3.20% 3.15% 3.23% 2.83% 3.21% 2.39% FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20 FY-18 FY-19 FY-20 Q4 FY19 Q4 F
Slide 46: Financial Performance Trends – Cost and Asset Quality
"' Financial Performance Trends – Q4 FY20 'T1u <Power of rDistri6ution � ENDEAVOURS OPERATING EXPENSE AS % OF NII* COST OF BORROWING (COB)* 9.33% 9.31% 9.11% 25.86% 8.86% 8.75% 21.71% 21.86% 22.35% 19.93% FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20 FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20 Efficiently maintaining the
Slide 47: Adequately Capitalized
"' Financial Performance Trends – Q4 FY20 'T1u <Power of rDistri6ution � ENDEAVOURS Adequately Capitalized DEBT – EQUITY RATIO (DER) CAPITAL ADEQUACY RATIO (CAR) 31.89% 30.96% 3.01 29.13% 2.82 2.27 Mar-18 Mar-19 Mar-20 Mar-18 Mar-19 Mar-20 Healthy Coverage INTEREST COVERAGE RATIO (ICR) 2.15 2.15 1.9
Slide 48: Quality of the portfolio: Stage 3 Assets
"' Quality of the portfolio : Consistently maintained 'T1u <Power of rDistri6ution � ENDEAVOURS Catalyst in growth of Entrepreneurs, not creating just borrowers STAGE 3 ASSETS * 1.39% 1.42% 1.50% 1.30% 1.00% 1.19% 1.14% 1.14% 0.50% 0.00% Mar-18 Mar-19 Mar-20 GROSS STAGE 3 ASSETS NET STAGE 3 ASSETS S
Slide 49: Asset Under Management - Credit Quality
�5# "' Asset Under Management - Credit Quality '11ie <Power of<Distd6u.tion ENDEAVOURS ASSET UNDER MANAGEMENT- DPD 8.00% 6.00% 0.55% 0.71% 0.76% 0.69% 0.58% 1.01% 1.00% 4.00% 0.41% 1.58% 1.18% 0.91% 2.00% 0.88% 2.75% 2.60% 1.75% 0.00% Mar-18 Mar-19 Mar-20 1 – 30 DPD 31 – 60 DPD 61 – 90 DPD 91 –120 D
Slide 50: Reputed Marquee FIIs and DIIs have invested in MAS
�c;;:-,J"' Reputed Marquee FIIs and DIIs have invested in MAS 'TM Q'owe,. of <Distri6ution �--; ;_ : ENDEAVOURS Shareholding as on 31st March 2020 Foreign Marquee Non Promoter Shareholders Portfolio Investor 1.77% MOTILAL PRIVATE EQUITY Mutual Fund 8.88% Trust Others ( AXIS MUTUAL FUND 7.33% Includi
Slide 51: Financial Statement: FY18 – FY20
�5# "' Financial Statement: FY18 – FY20 ENDEAVOURS '11ie <Power of<Distd6u.tion PROFIT & LOSS STATEMENT INR Mn. FY 2018 FY 2019 FY 2020 Total Revenue 4509 5726 6831 Expenses 2857 3387 4486 Finance Costs 1705 2041 2720 Operating Expense 725 800 899 Provisions and Loan Losses 428 545 868 Profit Before
Slide 52: Assignment Income Reconciliation
"' �� Assignment Income Reconciliation '11ie rJ>owerof <Distri6ution �-�Z' ENDEAVOURS IN INR Mn. Sr. Particulars Q4 FY20 Q4 FY19 FY20 FY19 No. Upfront spread booked on present value basis on 1 288.62 282.28 1074.88 941.45 portfolio assigned during the year (based on IND-AS) Income booked on asset cr
Slide 53: Credit Quality
�c...-J.'' Credit Quality '11ie <Powerof<Distri.6u.tion �-�t ENDEAVOURS IN INR Mn. March-20 March-19 Particulars AUM Provision AUM Provision Stage 1 31762.21 106.04 30828.73 110.91 Stage 2 863.52 111.56 1024.95 113.64 Stage 3 629.19 164.73 662.25 135.44 TOTAL ON BOOK 33254.91 382.33 32515.93 359.99
Slide 54: MAS Rural Housing & Mortgage Finance Limited – Subsidiary
MAS Rural Housing & Mortgage Finance Limited (MRHMFL) – Subsidiary MAS is targeting affordable housing finance segment through its subsidiary • MAS Rural Housing & Mortgage Finance Limited (“MAS Housing” or MRHMFL) is a non-deposit taking , NHB registered, housing finance institution. It was incorpo
Slide 55: Financial Performance Trends – Q4 FY20 (MRHMFL)
Financial Performance Trends – Q4 FY20 MRHMFL In INR Mn NET WORTH ASSET UNDER MANAGEMENT (AUM) 528 2,865 466 2,702 2,033 307 Mar-18 Mar-19 Mar-20 Mar-18 Mar-19 Mar-20 BORROWING GROSS STAGE 3 ASSETS & NET STAGE 3 ASSETS 0.36% 2,546 0.36% 0.34% 2,225 0.25% 0.26% 1,705 0.25% Mar-18 Mar-19 Mar-20 Mar-18
Slide 56: Financial Performance Trends – Q4 FY20 (MRHMFL)
Financial Performance Trends – Q4 FY20 MRHMFL In INR Mn REVENUE NET INTEREST INCOME (NII) 399 155 324 129 263 106 92 99 44 34 FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20 FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20 PROFIT BEFORE TAX PROFIT AFTER TAX 32 42 42 27 20 29 16.10* 8.28** 10 1 FY-18 FY-19 FY-20 Q4 FY19 Q4 FY20
Slide 57: Liability Management: Borrowing Mix (MRHMFL)
Liability Management Borrowing Mix as on 31st March 2020 10.96% 6.47% NHB REFINANCE TERM LOAN CASH CREDIT 82.57% DIRECT ASSIGNMENT • Efficient liability management ensures : • Adequate liquidity round the year. • Minimum asset liability mismatch. • Tie up for the fund requirement of the whole financ
Slide 58: Liability Management (MRHMFL)
Liability Management Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Liability management was tested last quarter and the company could successfully demonstrate its capability of efficient liability management • Capital adequacy rat
Slide 59: Credit Quality (MRHMFL)
Credit Quality IN INR Mn. March-20 March-19 Particulars AUM Provision AUM Provision Stage 1 2,487.95 3.48 2,591.55 5.26 Stage 2 101.37 5.44 77.66 4.56 Stage 3 9.27 2.56 9.72 2.68 TOTAL ON BOOK 2,598.59 11.48 2,678.93 12.49 Assigned Portfolio 266.85 N/A 23.43 N/A TOTAL AUM 2,865.45 2,702.36 Particula
Slide 60: Glossary
�5# "' Glossary '11ie <Power of<Distd6u.tion ENDEAVOURS AUM Assets Under Management EIR Effective Interest Rate Bn Billion ECL Estimated Credit Loss CCPS Compulsorily Convertible Preference Shares OCPS Optionally Convertible Preference Share COB Cost of Borrowing CRAR Capital To Risk Assets Ratio DP
Slide 61: Best Wishes – Investor Contact
'Ihe (l'ower of Distribution BEST WISHES INVESTOR CONTACT Name: Ankit Jain Designation: Chief Financial Officer Contact No.: 079-41106682 Email ID: ankit_jain@mas.co.in
MAS Financial Services — Q4 FY20 Earnings Presentation on 6ix