Jm Financial Limited · NSE:JMFINANCIL
Jm Financial — Q2 FY23 Earnings Presentation
59 slides from Jm Financial's earnings presentation, Nov 14, 2022
Slide 1: Cover letter to stock exchanges: Investor Presentation
November 14, 2022 BSE Limited National Stock Exchange of India Limited Department of Corporate Services Exchange Plaza 1st Floor, New Trading Ring Plot No.C-1, G Block Rotunda Building, P J Towers Bandra-Kurla Complex Dalal Street, Fort, Bandra (East) Mumbai 400001 Mumbai – 400 051 Security Code: 52
Slide 2: JM Financial Limited – Q2FY23 Results Update
JM Financial Limited – Q2FY23 Results Update
Slide 3: Disclaimer/ Safe Harbor
Disclaimer/ Safe Harbor This presentation and the following discussion may contain certain words or phrases that are “forward looking statements” by JM Financial Limited (together with its subsidiaries and associates), referred to as (“JM Financial” or “JMFL” or “the Company”) that are not historica
Slide 4: Table of Contents
Table of Contents Section 1 Group Overview Section 2 Consolidated Financial Performance Tab A Investment Bank Tab B Mortgage Lending Tab C Platform AWS Tab D Alternative and Distressed Credit Section 3 Group Structure and Shareholding Details Section 4 Corporate Social Responsibility Annexure Financ
Slide 5: Section 1: Group Overview
Section : 1 Group Overview A JM FINANCIAL °
Slide 6: Evolution of the Franchise Over Five Decades; Unmatched Depth and Breadth
Evolution of the Franchise Over Five Decades; Unmatched Depth and Breadth Launched Bondskart. Received license Reported highest ever for Housing consolidated operating Set up a dedicated Finance from PAT real estate business National Housing with a Global Fund Bank (NHB) Terminated JV with led by Mr
Slide 7: Diversified Businesses with Multiple Growth Opportunities
Diversified Businesses with Multiple Growth Opportunities 1 Investment Bank : Cornerstone of our Franchise 3 Alternative and Distressed Credit : Expertise Built in a Niche Business • Distressed Credit relates to acquisition and • Caters to Institutional, Corporate, resolution of stressed assets Gove
Slide 8: Investment Bank: Deep Client Relationships; Delivering One Firm to Clients
1 Investment Bank: Deep Client Relationships; Delivering One Firm to Clients Depth and breadth of markets increasing significantly; digital companies expected to add Key Business Priorities Strategic M&A trends likely to continue Expand the depth and breadth of the client base IPO Listings Equ
Slide 9: Mortgage Lending: Wholesale and Retail Business
2 Mortgage Lending : Wholesale and Retail Business Benign competition in wholesale business Key Business Priorities Strong momentum in residential real estate market Grow wholesale loans upon Low Penetration Underserved Affordable Market (2) easing of travel conditions (Mortgage/GDP)(1) 66.3%
Slide 10: Alternative and Distressed Credit: Strong Expertise in a Niche Market
3 Alternative and Distressed Credit : Strong Expertise in a Niche Market Ferocity of the second and third wave of COVID-19 has dented economic activity Key Business Priorities Significant interest from strategic and financial investors in acquiring distressed assets Co-Investment model with st
Slide 11: Platform AWS: Integrated Platform for Individual Clients; Focus on Digital
4 Platform AWS : Integrated Platform for Individual Clients; Focus on Digital Financialization of savings to continue; digitization to make it simpler and faster Key Business Priorities Income levels expected to increase Future and digital readiness Rising Penetration of Non Institutional Brok
Slide 12: Section 2: Consolidated Financial Performance
Section : 2 Consolidated Financial Performance 10
Slide 13: Consolidated Performance
Consolidated Performance FY22 PAT includes Rs. 123 Cr (H1FY22 – Rs. 57 Cr)** from IPO Financing activity (H1FY23 – ^) Rs. Pre-Provision Revenues Operating Net Profit EPS End of period PBT ROA* ROE* Profit (PPOP) Loan book # 877 Cr 347 Cr 318 Cr 180 Cr 1.9 3.8% 9.2% 14,670 Cr Q2 FY23 -9.5% -19.5% 3.2
Slide 14: Consolidated Performance: Diversified Business Model for Earnings Resilience
Consolidated Performance : Diversified Business Model for Earnings Resilience Total Revenue (Rs Cr) Pre-Provision Operating Profit (Rs Cr) PBT (Rs Cr) AWS Alternative and Distressed Credit 431 424 Mortgage Lending Investment Bank 969 964 372 349 877 839 806 347 317 322 318 180 187 162 153 130 125 86
Slide 15: TAB A: Investment Bank
TAB :A Investment Bank A JM FINANCIAL 8
Slide 16: Investment Banking: Decades of Trust from Clients
Investment Banking : Decades of Trust from Clients Transaction details for Q2 FY23 : Select issuances in a weak market environment Fairness Opinion to the Board OF ABB India Limited on valuation of its wholly owned Private Placement (Debt) : IPO : Harsha Engineers International Limited subsidiary Tu
Slide 17: Institutional Research: Strong Knowledge Base
Institutional Research : Strong Knowledge Base Overview Research Coverage Across Sectors Specialty Chemicals Others • Research Coverage of 248 Companies Real Estate & REITs, Cement & Industrials Multiplexes Metals, Airlines, Textile, Exchanges • Strong breadth of sector coverage IT Services, Interne
Slide 18: Private Equity Funds
Private Equity Funds Fund III Investments (Initial Closing in Dec’21) (Targeted Corpus: Fund I All investments exited (Fund corpus: Rs. 952 cr) Rs 1,000 Cr with green shoe of Rs 500 Cr) • Sector: Health-tech • Sector: Health-tech • Sector: Consumer & Retail Aarman • Sector: Financial Services • Indi
Slide 19: Franchise Enhancing Financing
Franchise Enhancing Financing End of Period Loan Book(1) Loan Book Description Wholesale Mortgage Retail Mortgage Bespoke FI Financing* Capital Market Bespoke Finance : Loan Book available to clients of 4,908 Investment Bank segment 4,591 4,497 3,781 644 895 Capital Markets : Loan Book originate
Slide 20: Investment Bank: Financial Performance
Investment Bank : Financial Performance Total Revenue (Rs Cr) Profit Before Tax (Rs Cr) Interest Income Non Interest Income 361 134 134 131 312 308 299 122 284 58.9% 57.1% 50.3% 48.5% 93 55.6% 42.9% 41.1% 44.4% 49.7% 51.5% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Profit
Slide 21: TAB B: Mortgage Lending
TAB :B Mortgage Lending A JM FINANCIAL %
Slide 22: Mortgage Lending
Mortgage Lending Dedicated real estate subsidiary (JM Financial Credit Solutions) formed in 2014 and backed by Global Fund led by Mr. Vikram Pandit (Ex CEO of Citibank) JM Financial Limited holds 46.7% stake Wholesale # groups with relationship – 100+ Average ticket size per group – ~Rs. 127
Slide 23: Wholesale Mortgages: JM Financial Credit Solutions (JMFCSL)
Wholesale Mortgages : JM Financial Credit Solutions (JMFCSL) End of Period Loan Book* (Rs Cr) Spread Analysis (%) Yield % COF % NIM % 8,415 14.7% 13.9% 13.0% 13.4% 13.4% 7,362 6,741 6,865 6,595 9.4% 9.2% 9.3% 9.1% 9.0% 7.4% 8.3% 7.8% 7.2% 7.0% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22
Slide 24: Retail Mortgages: JM Financial Home Loans
Retail Mortgages : JM Financial Home Loans Branch Network Disbursement (Rs Cr) End of Period Loan Book (Rs Cr) Average Ticket Size of Rs. 12 Lakhs 75 223 1,035 64 175 919 153 819 55 145 51 50 636 105 507 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY2
Slide 25: Mortgage Lending: Financial Performance
Mortgage Lending : Financial Performance Net Total Income (Rs Cr) Pre-Provision Profit (Rs Cr) Profit Before Tax (Rs Cr) 191 162 119 177 175 178 112 166 96 97 147 148 145 79 139 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 PAT (Pre Non Cont
Slide 26: TAB C: Platform AWS
TAB: C Platform AWS A JM FINANCIAL a4
Slide 27: Broking: Advisory Led, Leveraging Technology and Expanding Market
Broking : Advisory Led, Leveraging Technology and Expanding Market Clients ~ 2.14+ Lakhs Growth of ADTO* & Volume Mix % ‘000 Rs Cr Affluent, HNI and strong vintage Cash Future Option ADTO 100% 27 28 24 Presence in 197 Cities 80% 21 18 20 20 60% 81% 16 88% 91% 93% 86% 12 40% 13 Strong advisory capabi
Slide 28: Broking: Online and Mobile Trading Gaining Momentum
Broking : Online and Mobile Trading Gaining Momentum Online v/s Offline Mobile Trading Online Offline ADTO (Cr) Users 13,661 12,763 12,623 11,737 31% 35% 11,012 42% 37% 38% 2,362 69% 1,755 1,899 58% 63% 65% 62% 1,601 1,292 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Gross,
Slide 29: Wealth Channels: Increasing Scale in Equity AUM, Client Engagement and Reach
Wealth Channels : Increasing Scale in Equity AUM, Client Engagement and Reach Private Wealth AUM (Rs Cr) Private Wealth AUM Transactional and Recurring (Rs Cr) Equity Debt Liquid Recurring Transactional 63,760 64,683 61,660 64,683 61,211 63,760 61,211 61,660 3,846 3,931 57,679 57,679 3,070 4,643 4,3
Slide 30: Platform AWS: Financial Performance
Platform AWS : Financial Performance Total Revenue (Rs Cr) Cost to Income (%) 180 187 95.2% 162 88.8% 153 130 70.5% 61.6% 56.0% Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23* Profit Before Tax and Profit After Tax (Rs Cr) Annualized Return Ratios (%) PBT PAT (post Non Control
Slide 31: TAB D: Alternative & Distressed Credit
TAB : D Alternative & Distressed Credit 29
Slide 32: Alternative & Distressed Credit: JM Financial Asset Reconstruction Company
Alternative & Distressed Credit : JM Financial Asset Reconstruction Company Overview AUM split as of September 30, 2022 – Rs. 11,349 Cr • Effective shareholding of 58.28% held by JM Financial Ltd as of September 30, Infrastructure Portfolio & Others Textiles 1.7% 18.5% 16.0% 2022 Plywood/ laminates
Slide 33: Alternative & Distressed Credit: Financial Performance
Alternative & Distressed Credit: Financial Performance Net Total Income (Rs Cr) PAT Post Non Controlling Interest (Rs Cr) 24 68 44 30 30 10 10 9 10 2 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Gross, Net NPA Leverage & SMA Analysis (Rs2*Cr) (%) Annualized Return Ratios (%)
Slide 34: Section 3: Group Structure and Shareholding Details
Section 3 Group Structure and Shareholding Details 32
Slide 35: Group Structure: September 30, 2022
Group Structure : September 30, 2022 JM Financial Limited (1) Investment Banking Management of Private Equity Fund Holding company of other operating subsidiaries 100% 59.54% 99.71% 46.68%(2) 53.62% 100% 100% 100% 100% JM Financial JM Financial Asset Overseas Holdings JM Financial Asset JM Financial
Slide 36: Shareholding Summary
Shareholding Summary Share Price Information Market Information (BSE) September 30, 2022 Price 100 7,165.49 Market Capitalization (Rs Cr) 90 Price (Rs) 75.05 80 70 No. of Shares Outstanding (Cr) 95.48 60 50 52 Week High-Low (Rs) 76.50/71.55 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Gross, Net NPA % Shareho
Slide 37: Section 4: Corporate Social Responsibility
Section 4 Corporate Social Responsibility 35
Slide 38: Corporate Social Responsibility
Corporate Social Responsibility EDUCATION HEALTH Project Bachpan – Bihar Shri Vardhman NidaanSeva Kendra – Bihar Initiated an Adult Literacy Program (ALP) to impart foundational JMFF committed to fight malnutrition and anemia in women and children literacy and numeracy to mothers of students enr
Slide 39: Corporate Social Responsibility (Cont’d)
Corporate Social Responsibility (Cont’d) AGRICULTURE AND ALLIED ACTIVITIES Integrated Village Development Project – Maharashtra Agri-inputs for Kharif Season: 2,265 kg of paddy seeds distributed to 265 farmers across 6 villages 200 kg of maize seeds distributed to 100 farmers across 6 villages
Slide 40: Annexure: Financial Performance and Other Details
Annexure Financial Performance and Other Details 38
Slide 41: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (Rs Cr) Q2 FY23 Q1 FY23 QoQ % Q2 FY22 YoY % Gross Revenue 877 806 8.9% 969 -9.5% Finance cost 270 261 3.5% 287 -6.1% Net loss on derecognition of financial instruments under # # N/M 3 N/M amortised cost category Employee cost 141 148 -4.7% 145 -3.1% D
Slide 42: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (Rs Cr) H1 FY23 H1 FY22 YoY % FY22 Gross Revenue 1,683 1,962 -14.2% 3,763 Finance cost 531 548 -3.3% 1,082 Net loss on derecognition of financial instruments under # 3 N/M - amortised cost category Employee cost 288 308 -6.2% 548 Depreciation 20 19 4.
Slide 43: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs Cr) As at Sept 30, 2022 As at March 31, 2022 Assets Loan book* - Steady state Financing 14,662 12,771 Loan book* – Episodic Financing 55 1,374 Distressed asset book (Investment in SRs / Loan) 4,060 3,825 Cash and cash equivalents (CCE)** 1,388 3,637 Other I
Slide 44: Capital Employed and Networth
Capital Employed and Networth Particulars (Rs Cr) Capital Employed Networth As at Sept 30, 2022 As at March 31, 2022 As at Sept 30, 2022 As at March 31, 2022 Investment Bank 2,542 2,499 2,536 2,492 JM Financial Products Limited 1,891 1,734 1,885 1,728 JM Financial Limited 376 495 376 495 JM Financia
Slide 45: Segment Performance
Segment Performance Segment revenue (Rs Cr) Q2 FY23 Q1 FY23 QoQ % Q2 FY22 YoY % H1 FY23 H1 FY22 YoY % FY22 Investment Bank 299 308 -3.0% 312 -4.0% 607 628 -3.2% 1,273 Mortgage Lending 307 300 2.4% 314 -2.2% 607 614 -1.2% 1,191 Alternative & Distressed Credit 102 65 57.5% 125 -18.4% 167 350 -52.4% 52
Slide 46: Segment Revenue and Profit after tax
Segment Revenue and Profit after tax Particulars (Rs Cr) Revenue PAT* Q2FY23 H1FY23 Q2FY23 H1FY23 Investment Bank: 299 607 98 203 JM Financial Limited 101 196 65 97 JM Financial Products Limited 229 424 84 160 JM Financial Institutional Securities Limited 22 49 # 2 Overseas Entities 6 3 1 (6) Add/(L
Slide 47: Segment Revenue and Profit after tax
Segment Revenue and Profit after tax Particulars (Rs Cr) Revenue PAT* Q2FY23 H1FY23 Q2FY23 H1FY23 Platform AWS: 162 292 8 15 JM Financial Services Limited 141 257 5 9 JM Financial Capital Limited 10 19 6 13 JM Financial Asset Management Limited 6 9 (6) (14) JM Financial Commtrade Limited + Astute In
Slide 48: Investment Bank
Investment Bank Particulars (Rs Cr) Q2 FY23 Q1 FY23 QoQ % Q2 FY22 YoY % H1FY23 H1FY22 YoY % FY22 Segment Net worth + NCI 2,542 2,438 4.3% 2,371 7.2% 2,542 2,371 7.2% 2,499 Gross Revenue 299 308 -3.0% 312 -4.0% 607 628 -3.2% 1,273 Finance cost 90 85 6.1% 80 12.0% 174 154 13.4% 319 Impairment on Finan
Slide 49: Mortgage Lending
Mortgage Lending Particulars (Rs Cr) Q2 FY23 Q1 FY23 QoQ % Q2 FY22 YoY % H1FY23 H1FY22 YoY % FY22 Segment Net worth + NCI 4,129 4,028 2.5% 3,732 10.6% 4,129 3,732 10.6% 3,970 Gross Revenue 307 300 2.4% 314 -2.2% 607 614 -1.2% 1,191 Finance cost 129 124 3.9% 123 5.1% 254 247 2.9% 483 Net loss on dere
Slide 50: Alternative and Distressed Credit
Alternative and Distressed Credit Particulars (Rs Cr) Q2 FY23 Q1 FY23 QoQ % Q2 FY22 YoY % H1FY23 H1FY22 YoY % FY22 Segment Net worth + NCI 1,855 1,858 -0.1% 1,776 4.4% 1,855 1,776 4.4% 1,855 Gross Revenue 102 65 57.5% 125 -18.4% 167 350 -52.4% 522 Finance Cost 58 55 5.5% 57 2.1% 113 118 -4.7% 229 Em
Slide 51: Platform AWS
Platform AWS Particulars (Rs Cr) Q2 FY23 Q1 FY23 QoQ % Q2 FY22 YoY % H1FY23 H1FY22 YoY % FY22 Segment Net worth + NCI 725 770 -5.9% 718 0.9% 725 718 0.9% 767 Gross Revenue 162 130 25.1% 180 -9.6% 292 323 -9.3% 662 Finance cost 23 17 38.4% 22 5.1% 40 37 9.1% 74 Impairment on Financial Instruments 1 (
Slide 52: Consolidated Lending Book Profile
Consolidated Lending Book Profile End of Period Gross Loan Book (Rs Cr)# NIM Analysis (%)# Wholesale Mortgage Retail Mortgage Bespoke FI Financing*** Capital Market Wtd. Avg Tenure Yield % COF % NIM % 14,670 (Months) 13,017 1,141 13.9% 13.3% 12,606 12.7% 12.9% 12.7% 995 11,072 11,240 834 440 1,208 4
Slide 53: Consolidated Balance Sheet
Consolidated Balance Sheet Networth and Leverage (Rs Cr) Cash and Cash equivalents (Rs Cr) Equity** Debt* D/E Net D/E 12,783 11,747 13,063 10,808 3,957 3,854 10,789 3,637 1.22 1.21 1.08 1.05 1.10 2,878 0.83 1.08 0.68 0.87 0.68 10,006 10,656 10,781 1,388 10,269 10,453 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY
Slide 54: Quarterly Performance of Select Subsidiaries
Quarterly Performance of Select Subsidiaries JM Financial Credit Solutions Ltd JM Financial Products Ltd Q2FY23 Q2FY22 Q2FY23 Q2FY22 Revenue 281 295 Revenue 229 180 Net Profit 91 75 Net Profit 84 28 Net worth 4,082 3,777 Net worth 2,107 1,875 End of period Loan book# 8,415 6,595 End of period Loan b
Slide 55: Half yearly Performance of Select Subsidiaries
Half yearly Performance of Select Subsidiaries JM Financial Credit Solutions Ltd JM Financial Products Ltd H1FY23 H1FY22 FY22 H1FY23 H1FY22 FY22 Revenue 554 578 1,136 Revenue 424 319 678 Net Profit 149 128 289 Net Profit 160 52 129 Net worth 4,082 3,777 3,942 Net worth 2,107 1,875 1,952 End of perio
Slide 56: Effective Risk Management Framework
Effective Risk Management Framework Robust risk management architecture encompassing independent identification, measurement and management of risk across various businesses of the 1 Group 2 Effective systems, processes and adequate review mechanism to actively monitor, manage and mitigate risks 3 Q
Slide 57: Board of Directors
Board of Directors Mr. Nimesh Kampani, Chairman Mr. Vishal Kampani, Vice Chairman B. Com, FCA M.com, M. S. (Finance) from London Business School • Founder and Chairman of JM Financial Group, one of India’s leading financial • Launched the Asset Reconstruction business in 2008 and the Real Estate ser
Slide 58: Board of Directors (Cont’d)
Board of Directors (Cont’d) Mr. P S Jayakumar, Independent Director Mr. Navroz Udwadia, Independent Director CA, Post graduate in business management from XLRI Jamshedpur. BA in English, MA in Law, MBA from Harvard Business School • 23 years of work experience with Citibank in their India and Singap
Slide 59: For Further Queries
For Further Queries Mr. Nishit Shah Mr. Manish Sheth Business Strategy, Investor Relations and Group CFO, MD & CEO, JM Financial Home CFO – JM Financial Products Limited Loans Limited Email: nishit.shah@jmfl.com Email: manish.sheth@jmfl.com Contact No: 022 66303522 Contact No: 022 66303461 Mr. Gagan