Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q3 FY2023 Earnings Presentation
61 slides from Edelweiss Financial Services's earnings presentation, Jan 31, 2023
Slide 1: Cover letter to stock exchanges
EW/Sec/2023/23 January 31, 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: Investor Presentation Please find attac
Slide 2: Earnings update – Quarter ended Dec 22
Edelweiss Financial Services Limited Earnings update – Quarter ended Dec 22
Slide 3: Contents
Contents 1 Overview & highlights of quarter ended Dec 22 3 2 Update on key priorities for FY23 23 3 Business performance 29 4 Governance & corporate responsibility 55 Business Update – Nuvama Wealth Management (formerly Edelweiss Wealth Management) 2
Slide 4: Overview & Highlights
Overview & Highlights Quarter ended Dec 22
Slide 5: Edelweiss at a glance – quarter ended Dec 22
Edelweiss at a glance – quarter ended Dec 22 Net Worth Ex-Insurance PAT BVPS INR 8,369 Cr INR 166 Cr INR 71 (FV ₹1) Liquidity Customer Assets INR 6,465 Cr INR 4,06,500 Cr 4
Slide 6: We are a diversified company across eight businesses
We are a diversified company across eight businesses Edelweiss Financial Services Ltd (EFSL) Credit Asset Management Insurance Asset Wealth Housing Alternative Reconstruction General Management NBFC Mutual Fund Life Insurance Finance Asset Mgt Insurance ECL Finance Edelweiss Edelweiss Edelweiss Edel
Slide 7: Performance overview – quarter ended Dec 22
Performance overview – quarter ended Dec 22 1 Ex-Insurance PAT grows by 31% YoY Slide 7 - 10 2 MF AUM grows to INR 100,000 Cr and Alts AUM increased 50% YoY to INR 45,000 Cr Slide 11 3 Customer reach grows 30% YoY to ~6 million Slide 12 4 Businesses are well capitalized with comfortable liquidity Sl
Slide 8: Profitability across businesses
1 Profitability across businesses Profit After Tax for the quarter in INR Cr EFSL Asset Asset ex-Insurance Credit Management Reconstruction 166 85 68 68 127 37 40 22 Dec 21 Dec 22 Dec 21 Dec 22 Dec 21 Dec 22 Dec 21 Dec 22 31% YoY 8% YoY 209% YoY 26% YoY 7
Slide 9: Earnings distribution across businesses
1 Earnings distribution across businesses INR Cr Business Dec 22 Dec 21 NBFC 36 34 Housing Finance 4 3 Mutual Fund 6 10 Alternatives Asset Management 62 12 Asset Reconstruction 85 68 Life Insurance (53) (53) General Insurance (25) (29) EFSL share in Wealth Management 37 23 BMU & Corporate (31) 8 (Le
Slide 10: Update on operating performance (1)
1 Update on operating performance (1) • GNPA steady at 2.97% with total provision cover of 312% NBFC • Wholesale inflows of INR 1,100 Cr in the quarter, INR 2,800 Cr YTD • New co-lending partnership with Bank of Baroda and State Bank of India Housing Finance • GNPA improved to 2.45% from 3.80% YoY.
Slide 11: Update on operating performance (2)
1 Update on operating performance (2) Asset • Quarterly recoveries of INR 2,539 Cr Reconstruction • Capital employed in retail assets increased by 21% YoY • Individual APE grew at a 5-year CAGR of 13%, industry growth at 10% Life Insurance • Gross premium growth of 11% YoY to INR 378 Cr; claim settl
Slide 12: Asset Mgt added AUM of INR 13,000 Cr in the quarter
2 Asset Mgt added AUM of INR 13,000 Cr in the quarter Mutual Fund AUM (INR Cr) Alternative Asset Mgt AUM (INR Cr) 1,00,000 45,000 81,900 29,900 30,200 49,000 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 Growth of 22% YoY Growth of 50% YoY 11
Slide 13: Customer franchise continues to grow
3 Customer franchise continues to grow Total Customer Customer AssetsReach (in Lakhs) (INR Cr) Customer Reach (# in lakhs) 4,06,500 61 3,47,400 47 2,64,800 29 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 Growth of 30% YoY Growth of 17% YoY 12
Slide 14: Businesses are well capitalized with comfortable liquidity
4 Businesses are well capitalized with comfortable liquidity Strong capitalization across businesses Conservative provisions for credit assets Comfortable liquidity of INR 6,465 Cr at ~26% of debt Debt reduction of ~INR 6,000 Cr over last 2 years 13
Slide 15: Strong capitalization across businesses
4 Strong capitalization across businesses Businesses Metric Value NBFC Capital Adequacy 34.5% Housing Finance Capital Adequacy 34.7% Asset Reconstruction Capital Adequacy 46.5% Life Insurance Solvency Ratio 219% General Insurance Solvency Ratio 173% 14
Slide 16: Conservative provisions for credit assets
4 Conservative provisions for credit assets Balance Sheet Provisions (INR Cr) IRAC Provisions IndAS Provisions 714 570 532 222 180 174 Dec 20 Dec 21 Dec 22 We have consistently provided for higher than IRAC norms 15
Slide 17: Cash flow plan
4 Cash flow plan INR Cr Jan 23 to Dec 23 Opening Available Liquidity (A) 6,500 Inflows Expected Inflows 8,600 Fresh Borrowings 6,200 Total Inflows (B) 14,800 Outflows Repayments 10,000 Disbursements 4,700 Total Outflows (C) 14,700 Closing Available Liquidity (A+B-C) 6,600 16
Slide 18: Assets in each tenor range adequately cover liabilities
4 Assets in each tenor range adequately cover liabilities INR Cr Assets Liabilities Excess / (Gap) Upto 1 year 13,100 11,600 1,500 1-3 years 11,700 6,800 4,900 3 years+ 10,900 9,600 1,300 17
Slide 19: Debt reduced by ~INR 6,000 Cr over last 2 years
4 Debt reduced by ~INR 6,000 Cr over last 2 years Debt (INR Cr) Debt distribution across businesses (INR Cr) Business Dec 22 30,590 NBFC 8,620 24,690 Housing Finance 1,990 Alternatives 180 Asset Reconstruction 2,930 Wealth Management 5,010 BMU & Corporate 5,960 Gross Debt 24,690 (Less) Available liq
Slide 20: Update on Key Priorities for FY23
Update on Key Priorities for FY23
Slide 21: On track on our key priorities for the year
5 On track on our key priorities for the year Demerger and Listing of Nuvama Wealth Management Scaling Asset Management and Insurance businesses Reducing Wholesale loan assets 20
Slide 22: Demerger and Listing of Nuvama Wealth Management
5 Demerger and Listing of Nuvama Wealth Management Phase I • PAG’s strategic investment in Edelweiss Wealth Management Phase II • NCLT order received and made effective for Phase 2 demerger scheme • Solicit share entitlement report and fairness opinion Completed • Demerger completion • Board Approva
Slide 23: Nuvama's readiness to operate independently
5 Nuvama’s readiness to operate independently • Independent board • Independent credit ratings • Tech transition and allied investments • Strengthened governance • New brand and location • Formal demerger and subsequent listing Ongoing Refer to Business Update on Nuvama Wealth Management for details
Slide 24: 2nd highest AUM growth in the industry in CY22
5 2nd highest AUM growth in the industry in CY22 Total Customer Mutual Reach Fund Total (in(#) Folios Lakhs) Mutual Fund AUM (INR Cr) 11,32,000 1,00,000 9,20,000 81,900 49,000 4,30,000 29,500 2,86,000 Dec 19 Dec 20 Dec 21 Dec 22 Dec 19 Dec 20 Dec 21 Dec 22 More than tripled over 3 years; CAGR of 50%
Slide 25: Alts AUM doubled over 3 years; growth of 50% YoY
5 Alts AUM doubled over 3 years; growth of 50% YoY Total Customer Reach (in Lakhs) Alternatives AUM (INR Cr) 45,000 • Closed fundraising for AnZen India Energy Yield Plus Trust • A diversified Energy InvIT focusing on providing growth with predictable yields, with an initial AuM of over INR 2,300 Cr
Slide 26: Premium growth of 11% YoY for LI and 27% YoY for GI
5 Premium growth of 11% YoY for LI and 27% YoY for GI LI – Gross Premium for the quarter (INR Cr) GI – Gross Premium for the quarter (INR Cr) 378 149 339 117 295 61 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 25
Slide 27: Wholesale inflows of INR 1,100 Cr in the quarter
5 Wholesale inflows of INR 1,100 Cr in the quarter ECLF wholesale loan assets (INR Cr) 11,600 10,600 7,800 3,800 2,300 Dec 20 Dec 21 Dec 22 Dec 23E Dec 24E Inflows of INR 2,800 Cr YTD 26
Slide 28: Business Performance: Credit
Business Performance Credit
Slide 29: Credit businesses at a glance
Credit Credit businesses at a glance Quarter ended Dec 22 Equity AUM Profit After Tax INR 4,619 Cr ~INR 14,600 Cr INR 40 Cr 28
Slide 30: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Maintained credit quality with stable asset quality ratios Equity (INR Cr) 3,827 o GNPA at 2.97% with total provision cover of 312% • Wholesale inflows of INR 1,100 Cr in the quarter, INR 2,800 AUM (INR Cr) 10,391
Slide 31: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 Credit Assets 9,869 13,486 Gross Loan book 5,643 8,129 Equity 3,827 3,885 Gross Revenue 527 529 Net Revenue 260 162 Opex 117 94 Credit Cost 96 27 Profit After Tax 36 34 GNPA 2.97% 3.09% NNPA 1.91% 2.31% Total Provis
Slide 32: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • New co-lending partnerships with Bank of Baroda and Equity (INR Cr) 791 State Bank of India • Disbursals ongoing with Standard Chartered Bank and State AUM (INR Cr) 4,159 Bank of India under
Slide 33: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 Credit Assets 3,273 3,685 Gross Loan book 3,063 3,422 Equity 791 769 Gross Revenue 111 138 Net Revenue 37 56 Opex 31 29 Credit Cost 3 23 Profit After Tax 4 3 GNPA 2.45% 3.80% NNPA 1.92% 2.98% T
Slide 34: Business Performance: Asset Management
Business Performance Asset Management
Slide 35: Asset Management businesses at a glance
Asset Management Asset Management businesses at a glance Quarter ended Dec 22 Equity AUM Profit After Tax INR 539 Cr INR 145,000 Cr INR 68 Cr Fee Income INR 113 Cr 34
Slide 36: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • Retail folios grew by 23% YoY to 11.3 lakhs as on Dec 22 Equity (INR Cr) 200 • Equity AUM grew by 15% YoY to INR 22,100 Cr; net equity inflows of INR 2,800 Cr in the quarter • Second highest in total
Slide 37: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 AUM 100,000 81,900 Net New Money 6,600 11,900 Equity 200 189 Net Revenue 42 42 Opex 36 32 Profit After Tax 6 10 36
Slide 38: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM (INR Cr) MF Debt Passive AUM (INR Cr) 68,200 22,100 19,200 49,500 30,200 8,000 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 SIP Book (INR Cr) Active Folios (# in Lakhs) 172 11.3 155 9.2 93 3.6 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22
Slide 39: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew 49% YoY and FPAUM grew 34% YoY Equity (INR Cr) 339 • Raised AUM of INR 4,300 Cr in the quarter; INR 11,800 Cr YTD AUM (INR Cr) 45,000 • Successfully launched first InvIT
Slide 40: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 AUM 45,000 30,200 Fee Paying AUM 24,100 16,250 Equity 339 200 Net Revenue 118 71 Opex 51 58 Profit After Tax 62 12 39
Slide 41: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Tenure wise 5% 10% 17% 16% 33% 40% 25% INR 45,000 Cr INR 24,100 Cr INR 45,000 Cr 15% 15% 83% 17% 24% Special Situations Special Situations Asset Over 3 year duration Structured Credit Structure
Slide 42: Business Performance: Asset Reconstruction
Business Performance Asset Reconstruction
Slide 43: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 2,701 • Recoveries of INR 2,539 Cr for the quarter; INR 5,867 Cr YTD, of which 12% was from retail portfolio AUM (INR Cr) 36,500 • Deployed INR 322 Cr in the quarter; INR 1,085 Cr YTD
Slide 44: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 AUM 36,500 41,800 Capital Employed 5,007 5,268 Wholesale assets 4,305 4,688 Retail assets 702 580 Equity 2,701 2,411 Gross Revenue 268 241 Opex 29 35 Profit After Tax 86 68 Edelweiss’ share in PAT 51
Slide 45: Business Performance: Insurance
Business Performance Insurance
Slide 46: Insurance businesses at a glance
Insurance Insurance businesses at a glance Quarter ended Dec 22 Gross Premium Policies Issued Customer Reach INR 517 Cr # 120,600 ~42 lakhs 45
Slide 47: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 704 • Gross premium growth of 11% YoY to INR 378 Cr • Traditional Par and Non-Par products constitute ~83% Individual APE (INR Cr) 100 of product mix #Policies Issued 8,900 • Laun
Slide 48: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 Net Premium Income 368 331 Investment Income & Other 161 66 Income Total Income 529 397 Policy benefits & insurance policy 414 281 liability Other expenses 168 169 Profit After Tax (53) (53) Edel
Slide 49: 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 55% YoY against industry growth of 16% in YTD Dec 22 Equity (INR Cr) 161 • Launched EDGE – an open API distribution platform to enhance produc
Slide 50: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 Net Premium Income 80 61 Investment Income & Other 24 17 Income Total Income 104 78 Policy benefits & insurance policy 55 65 liability Other expenses 64 52 Profit After Tax (25) (29) 49
Slide 51: Business Performance: Wealth
Business Performance Wealth
Slide 52: Wealth Management: Business performance snapshot
Wealth Mgt Wealth Management: Business performance snapshot Key Metrics for the quarter Business Update • Transitioned to Nuvama Wealth Management limited AUA (INR Cr) 2,25,000 • AUA grew 16% YoY with net new money of INR 1,690 Cr for the quarter LAS loan book 3,350 • Distribution income increased b
Slide 53: Wealth Management: Financial performance snapshot
Wealth Mgt Wealth Management: Financial performance snapshot INR Cr For the quarter ended Dec 22 Dec 21 AUA 225,000 1,93,500 Equity 2,163 1,786 Gross Revenue 582 480 Net Revenue 468 393 Opex 358 318 Profit After Tax 85 55 Edelweiss’ share in PAT 37 23 52
Slide 54: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 55: 8 Member Board with 4 Independent Directors
8 Member Board with 4 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 56: Significant institutional ownership
Significant institutional ownership Shareholding Pattern as on Dec 30, 2022 Key Shareholders above 1% Percent 1 Pabrai Investment Funds 8.2% Employee Trust 2 BIH SA 5.1% DIIs, Non 4.8% Promoter Group Institutions 3 Baron Asset Management 4.3% & Others 32.6% 4 TIAA CREF funds 4.3% 24.9% 5 LIC 2.6% 6
Slide 57: 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 710 Cr mobilized Partnered with over 158 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 58: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 88 Districts Sustainable Women across 11 States Quality Education Livelihoods Empowerment 20 lakh children impacted 90,000 Individuals trained 2 lakh women supported 31,000 schools reached 1,700 watershed stru
Slide 59: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 58
Slide 60: 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 61: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of INR 656 Cr and excludes EWM, Ex-Insurance PAT is post MI Slide 4,13,16,17,18: Available Liquidity is calculated as on balance sheet date and includes high quality liquid assets and LAS book. Numbers are based on management est
Edelweiss Financial Services — Q3 FY2023 Earnings Presentation on 6ix