Cholamandalam Investment And Finance Co. Ltd. · NSE:CHOLAFIN
Cholamandalam Investment And Finance — Investor Presentation (June 2018)
46 slides from Cholamandalam Investment And Finance's investor presentation, June 2018
Slide 1: Corporate Presentation – June 2018
Cholamandalam Investment and Finance Company Limited Corporate Presentation – June 2018
Slide 2: Table of Contents
Table of Contents Corporate Overview Financial Performance Business Overview Funding Profile Business Enablers Subsidiaries ECL Methodology 2
Slide 3: Corporate Overview
& Chola Enter a better life CORPORATE OVERVIEW it murugappa
Slide 4: Company Highlights
Company Highlights 1 Positioning 2 Exceptional Lineage Established in 1978, one of India’s A part of the ₹ 329 bn Murugappa leading NBFC’s, focused in the rural Group – founded in 1900, one of and semi-urban sector with a India's leading business conglomerates market capitalisation of ₹ 237 bn1
Slide 5: Journey So Far
Journey So Far … Q1 FY 2019 • Total AUM FY 2017 crossed ₹ 451 bn Consistently profit making and dividend paying1 company since 1979 • Total AUM • CRISIL and ICRA with a strong track record of dividends to shareholders FY 2015 crossed ₹ 369 bn upgraded Long • Infused Capital of term rating to ₹ 5,000
Slide 6: Major Companies – Murugappa Group
Major Companies – Murugappa Group Market Company Name Description Capitalisation Cholamandalam Investment and Finance Company Limited is a Non Banking ₹ 2,36,509 mn Finance Company and one of the leading financial provider for vehicle finance, (US$ 3,449 mn) business finance, home equity loans,
Slide 7: Spirit of Chola
SPIRIT OF CHOLA “The fundamental principle of economic activity is that no man you transact with will lose, then you shall not." 7
Slide 8: Strong Geographical Presence
Strong Geographical Presence Jammu & Kashmir (3) Branch Network 873 883 703 137 217 Himachal Pradesh (12) 534 203 254 Punjab (21) 222 94 Harayana (27) Uttarakhand (14) 199 164 245 208 Delhi (5) 144 162 172 192 83 103 Rajasthan (69) UP (63) Assam (23) 49 36 54 55 FY16 FY17 FY18 Q1FY19 Bihar (34) Megh
Slide 9: Company Performance – Portfolio Breakup
Company Performance – Portfolio Breakup AUM * (₹ mn) FY16 FY17 FY18 Q1FY18 Q1FY19 Growth Vehicle Finance IGAAP IND AS TRACTOR, 7% CE, 4% OLDER Vehicle Finance VEHICLES, 13% HCV, 19% On Book 1,79,144 2,02,709 2,81,505 2,05,909 3,05,443 48% REFINANCE, Securitised 21,859 33,597 33,550 36,480 28,098 -23
Slide 10: Shareholding
Shareholding Shareholding Pattern Chola Finance - Share Price Growth Institutions 60% 20% 40% Public 20% 6% 0% Promoters FII 53% -20% 21% Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Chola Finance Sensex Promoters share holding of 53.07% includes Jun 17 Sep 17 Dec 17 Apr 18 Jun 18 TI Financial Holdings Li
Slide 11: Financial Performance
Financial Performance nier a better life 11 Murugappa
Slide 12: Performance Highlights – Q1FY19 & Q1FY18 (As per Ind AS)
Performance Highlights – Q1FY19 & Q1FY18 (As per Ind AS) Disbursements Profit after Tax ROTA (PBT) Book Value EPS* ROE* Q1-FY19 ₹ 70,143 mn ₹ 2,853 mn 4.0% ₹346.1 ₹73.2 21. 8% 45% 36% 5% 20% 36% 14% Q1-FY18 ₹ 48,530 mn ₹ 2,097 mn 3.8% ₹ 288.3 ₹ 53.8 19.1% * Annualised 12
Slide 13: Asset Quality
ASSET QUALITY 43.5% 8.00% 43.5% 45.0% 42.7% 7.00% 39.7% 40.0% 6.00% 36.8% 35.1% 33.1% 35.0% 5.00% 31.6% 4.00% 30.0% 3.00% 25.0% 2.00% 3.55% 2.14% 4.66% 3.19% 2.94% 1.66% 4.73% 3.17% 4.46% 2.89% 3.70% 2.34% 2.94% 1.66% 2.99% 1.71% 1.00% 20.0% 2015-16 2016-17 2017-18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1
Slide 14: Ind AS Transition – Impact in Financials
Ind AS Transition – Impact in Financials 14
Slide 15: Profit and Loss Statement
Profit and Loss Statement ₹ mn Growth % Particulars FY16 FY17 FY18 Q1FY18 Q1FY19 Y-o-Y IGAAP IND AS IND AS Disbursements 1,63,803 1,85,913 2,51,135 48,530 70,143 45% Closing Assets (Managed) 3,03,624 3,51,097 4,35,812 3,58,691 4,66,628 30% Closing Assets (Balance Sheet) 2,61,980 2,88,464 4,29,103 3,
Slide 16: Profit and Loss Statement – Vehicle Finance
Profit and Loss Statement – Vehicle Finance ₹ mn Growth % Particulars FY16 FY17 FY18 Q1FY18 Q1FY19 Y-o-Y IGAAP IND AS IND AS Disbursements 1,23,830 1,44,710 2,05,400 38,190 56,652 48% Closing Assets (Managed) 2,01,003 2,36,306 3,12,985 2,42,639 3,33,541 37% Operating Income 31,591 36,094 41,889 9,61
Slide 17: Profit and Loss Statement – Home Equity
Profit and Loss Statement – Home Equity ₹ mn Growth % Particulars FY16 FY17 FY18 Q1FY18 Q1FY19 Y-o-Y IGAAP IND AS IND AS Disbursements 34,764 30,559 31,740 7,397 9,385 27% Closing Assets (Managed) 88,518 95,927 99,781 95,268 1,02,771 8% Operating Income 11,242 12,166 12,054 3,097 3,006 -3% Finance C
Slide 18: Ind AS Reconciliation
Ind AS Reconciliation Rs in Mn. Particulars qi qi Full Year Fy19 Fy18 Fy18 Profit before tax as per IGAAP 4,024.73 | 3,181.32 | 14,833.09 Adjustments as per IND AS - (charge) / Benefit Adoption of Effective Interest Rate (EIR) for amortisation of income and expenses - financial assets at amortised c
Slide 19: Transition Reserve Impact
Transition Reserve Impact Rs in mn. Reported Reserve as on March 31st, 2017 41,284.00 Adjustments- Benefit/(Charge) Adoption of Effective Interest Rate (EIR) for amortisation of- Upfront Fee Income (3,354.40) Upfront Variable Sourcing Cost 1,739.80 Adoption of EIR for amortisation of expenses - fina
Slide 20: Balance Sheet
Balance Sheet Rs in Mn Particulars As at As at As at As at As at 31.03.2016 31.03.2017 31.03.2018 30.06.2017 30.06.2018 IGAAP IND AS EQUITY AND LIABILITIES Shareholders' funds 36,574 42,849 51,060 45,053 54,104 Current liabilities 1,27,214 1,04,229 1,27,834 1,14,928 1,73,095 Non-current liabilities
Slide 21: Business Overview
a - ae Chola peg z BUSINESS OVERVIEW murugappa 21
Slide 22: Vehicle Finance
Enter a better life 22
Slide 23: Vehicle Finance - Industry
Vehicle Finance - Industry Trend in Domestic M & HCV Sales (i n Units) Trend in Domestic Car & MUV (i n Units) Sales CAGR @10% CAGR @ 4% Chola @ 107% Chola @ 21% 12,76,698 79,054 67,576 53,727 8,72,002 46,296 6,83,110 7,25,898 6,44,984 35,030 Q1 FY-16 Q1 FY-17 Q1 FY-18 Q1 FY-19 Q1 FY-23 (E) Q1 FY-16
Slide 24: Vehicle Finance - Industry
Vehicle Finance - Industry Trend in Domestic LCV Sales (i n Units) Trend in Domestic SCV Sales (i n Units) CAGR @ 12% CAGR @14% 1,12,421 Chola @ 41% 1,53,349 Ch ola @ 45% 97,456 66,562 80,131 75,809 71,461 41,001 43,577 38,609 Q1 FY-16 Q1 FY-17 Q1 FY-18 Q1 FY-19 Q1 FY-23 (E) Q1 FY-16 Q1 FY-17 Q1 FY-
Slide 25: Vehicle Finance – Business Model & Positioning
Vehicle Finance – Business Model & Positioning Industry Industry Low Low Low Chola Low Chola CV Position PV Position Principal Operator > 50 Vehicles Salaried Large Operators 26- 50 R R R vehicles HCV E R E I T I T S Medium Operators 10 -25 – U S Self Employed U K HCV & LCV vehicles R K with Financi
Slide 26: Vehicle Finance – Business Model & Positioning
Vehicle Finance – Business Model & Positioning Industry Low Low Industry Low Low Chola Chola Tractor Position CE Position Large Farmer Super Strategic Strategic Captive Users / R Customer R R Prior Vehicles E R Captive Users / E I T I Prior Vehicles T S U S U K Medium Farmers Medium Retail Operator
Slide 27: Vehicle Finance - Key Differentiators
Vehicle Finance - Key Differentiators Quicker Turn Around Time – (TAT) Reputation as a long term and stable player in the market Strong dealer and manufacturer relationship Good penetration in Tier II and Tier III towns In house sales and collection team which is highly experienced and stable Low em
Slide 28: Vehicle Finance - Disbursement / Portfolio Mix – Q1FY19
Vehicle Finance - Disbursement / Portfolio Mix – Q1FY19 Well diversified across geography & product segments Disbursements - State wise Portfolio – State wise MP 5% AP 5% KARNATAKA 5% MP, 5% AP, 6% MAHARASHTRA 13% MAHARASHTRA, KARNATAKA, 5% KERALA 4% 10% Pondicherry 0% KERALA, 5% TELANGANA 4% Pondic
Slide 29: Home Equity
Home Equity 29
Slide 30: Home Equity - Industry outlook
Home Equity - Industry outlook NBFCs' Loan against property book likely to grow at 12-15% in FY19 Pricing related pressure is expected to be higher in the second half of FY 19 due to narrowing funding avenues and higher systemic rates As per ICRA, revival was witnessed as the impact of GST imp
Slide 31: Home Equity - Key Differentiators
Home Equity - Key Differentiators Process Differentiator One of the best turnaround times in the industry Personalised service to customers through direct interaction with each customer Pricing Fee Income adequate to cover origination & credit cost Leverage cross sell opportunities for addit
Slide 32: Funding Profile
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Slide 33: CAR, Credit Rating and ALM Statement
CAR, Credit Rating and ALM Statement ALM Statement as on Jun 2018 ₹ mn Tier I Tier II Time Buckets Outflows Inflows Mismatch Cum Mismatch Capital Adequacy Ratio (CAR) 1–14 Days 10,608 19,588 8,980 8,980 19.68 19.37 15–30/31 Days 7,187 7,296 109 9,089 18.64 18.36 18.15 Over 1–2 Months 21,695 21,733 3
Slide 34: Diversified Borrowings Profile (As per Ind AS)
Diversified Borrowings Profile (As per Ind AS) *4,05,201 ₹ mn *3,77,339 *2,95,932 *3,05,558 1,49,044 1,31,370 *2,53,401 77,072 79,920 23,010 46,519 26,058 13,813 26,652 1,11,200 6,631 4,198 16,560 26,500 1,16,092 1,04,325 1,05,702 1,02,992 12,449 48,466 28,337 34,737 30,837 36,267 26,087 58,316 59,6
Slide 35: Business Enablers
Business Enablers C --- TECHNOLOGY LEVERAGE Enter a better life 35
Slide 36: Technology Updates
Technology Updates Technology Infrastructure Systems of Record Delivering resilient & scalable environment Stable foundation for core products & services Network infrastructure upgraded to support higher Design and launch MIS for usage by business and functional bandwidth, improve resilience and
Slide 37: Risk Management
Risk Management Risk Management Committee (RMC): Risk Management (contd..) RMC comprises Chairman, three Independent Directors and Post sanction monitoring helps to identify portfolio trends and the Managing Director besides the senior management as implement necessary policy changes members. •
Slide 38: Subsidiaries
Subsidiaries & Chola 2G Enter a better life 3g Murugappa
Slide 39: Subsidiaries
Subsidiaries ₹ mn Cholamandalam Securities Ltd ₹ mn Cholamandalam Housing Finance Ltd 95 22 30 43 59 6 5 (10) Q1FY18 Q1FY19 Q1FY18 Q1FY19 Income PAT Income PAT Wealth management services for mass affluent and affluent Broking services to HNIs and Institutional Investors customer segments. Pres
Slide 40: ECL Methodology
ECL Methodology murugappa
Slide 41: Measurement Framework
Measurement Framework Asset ECL classification PD12 m Stage 1 LGD EAD Staging Lifetime ECL Retail Stage 2 Framework Basis Account Conduct it is classified into different stages PD : Probability of default PD(100%) LGD : Loss given default Stage 3 LGD EAD : Exposure at time of default EAD Dis
Slide 42: Measurement Framework
Measurement Framework Asset ECL Description classification PD12 m • Assets with low risk (0-30 DPD) on reporting date Stage 1 LGD • Loss estimate based on a 1 year forward estimate EAD Lifetime • Assets with Significant Increase in Credit Risk (SICR) since initial recognition Stage 2 • Assets wi
Slide 43: Retail Pooling
Retail Pooling Cholamandalam Investments and Finance Co. Ltd. Portfolios are segmented based on the below categories. PD term structure and LGDs are computed for each segment separately. Home Vehicle Finance Home Equity Others Loan LCV/CAR/MUV MLCV/2W/3W HCV New HE Delhi HE Tamil Nadu New New HE Pun
Slide 44: Disclaimer
Disclaimer • Certain statements included in this presentation may be forward looking statements made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Cholamandalam Investment and Finance Company Ltd and its subsidiaries. There can
Slide 45: Contact Us
Contact Us Our Registered Office: Cholamandalam Investment and Finance Company Limited (Chola), Dare House 1st Floor, No. 2, NSC Bose Road, Parrys, Chennai 600001. Toll free number : 1800-200-4565 (9 AM to 7 PM) Land Line: 044 – 3000 7172 http://www.cholamandalam.com Email-ID : Sujatha P-Sr. Vice Pr
Slide 46: Thank You
ey ae & Chola = Enter a better life Thank You it murugappa
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