Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — Q2 FY19 Earnings Presentation
46 slides from Aditya Birla Capital's earnings presentation, Nov 6, 2018
Slide 1: Investor Presentation: Financial Results Q2 FY18-19
Investor Presentation FINANCIAL RESULTS Q2 FY18-19 MUMBAI 6th November 2018 A leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 2: Table of contents
Table of contents 1 | Overview Pg. 3 2 | Business-wise Performance Pg. 5 - 36 3 | Aggregate Financials Pg. 37 - 39 4 | Consolidated Financials & Other Annexures Pg. 40 - 45 NOTE 1: The financials of Aditya Birla Capital Ltd are consolidated financials prepared based on Ind AS unless otherwise specif
Slide 3: Delivering strong financial performance
Delivering strong financial performance Figures in Rs Crore PROTECTING INVESTING FINANCING 39% 11% 30% 1,657 2,71,556 57,945 1,193 2,44,609 44,675 Q2 FY18 Q2 FY19 Q2 FY18 Q2 FY19 Q2 FY18 Q2 FY19 Premium1 AAUM2 Lending Book3 1 | 77% Ind. APE4 growth in Life Insurance, 1 | Equity AAUM crosses Rs 1,00,
Slide 4: Aditya Birla Finance Limited
Aditya Birla Finance Limited 4
Slide 5: Diversified portfolio with value accretive growth
Diversified portfolio with value accretive growth Figures in Rs Crore Balanced loan book growth with focus on SME + Retail + UHNI Large + Mid Corporate Others 38,898 48,061 higher margin segments Loan book 5% 2% shift towards SME + Retail + HNI mix grew by 44% y-o-y value 53% 49% accretive Improveme
Slide 6: Multiple products catering to a range of customer needs
Multiple products catering to a range of customer needs Figures in Rs Crore Retail (12% of Loan Book) SME (27% of Loan Book) 6% 3% 19% 10% Broker Funding 12% 12% LAS 33% Supply Chain Finance 25% 25% 52% Unsecured and Digital LRD 25% 24% LAP 48% LAP 38% 35% TL/ WCDL 33% Q2 FY 1 8 Q2 FY 1 9 Q2 F Y 1 8
Slide 7: Strong focus on quality of book
Strong focus on quality of book Figures in Rs Crore Delivered consistent loan book growth High quality corporate book with CAGR 33% 48,061 43,242 Diversified loan book with Average median internal rating of “A”1 34,703 Ticket Size (ATS) of Rs 40 Lakhs 25,755 60%+ exposure to borrowers with credit 17
Slide 8: Stable margins across interest rate cycles
Stable margins across interest rate cycles Figures in Rs Crore Cost of Borrowing Optimised borrowing cost in a hardening interest rate environment 8.76% 8.43% 8.19% Cost of 7.85% 7.84% 7.78% 7.84% 7.96% 8.04% Borrowing across interest rate cycles Maintaining margins through interest rate cycles Q2 Q
Slide 9: Well matched ALM with diversified borrowing mix
Well matched ALM with diversified borrowing mix Figures in Rs Crore ALM optimised for liquidity and costs1 Diversification across instruments and investors1 Cumulative Outflows Cumulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% Bank 82% 77% Term Loan 36% 51% 40% 40% NCD 32% Mutual Fund 16%
Slide 10: Robust risk management approach
Robust risk management approach Sourcing and underwriting Continuous monitoring to ensure asset quality IL&FS Update Dimension Approach Dimension Approach Total exposure of Rs 388 Crore Committee based approach Lifecycle (0.81%) of lending book Automation of identified Underwriting with focus on rig
Slide 11: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited Figures in Rs Crore ∆ LY% Quarter 2 Half Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 38,898 48,061 Lending book 38,898 48,061 24% 11.35% 11.59% Average yield 11.45% 11.66% 6.78% 6.95% Interest cost / Avg.
Slide 12: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited 12
Slide 13: Value accretive growth
Value accretive growth Figures in Rs Crore Lending Book grew ~2x y-o-y 9,884 Affordable Loan book nearly at Rs 1,000 Crore in one year of operation (grew 1.4x y-o-y) Lending Book 5,777 Focus on building retail granularity Q2 FY18 Q2 FY19 Average HL Ticket Size reduced to Rs 25 Lakhs 79% Improvement
Slide 14: Diversification across products & geographies
Diversification across products & geographies Segment Mix (%) Geographic Mix (%) 9% 12% 8% 38% 38% 30% 25% 18% 18% 58% 58% 29% 29% 15% 14% Q2 FY18 Q2 FY19 Q2 FY18 Q2 FY19 Home Loans LAP Construction Finance Affordable Housing East North South West LAP Portfolio ~80% of Construction Balanced distribu
Slide 15: Growth along with focus on building retail granularity
Growth along with focus on building retail granularity Margin accretive customer mix in home loan portfolio Focus on increasing reach and building retail granularity 58 32 Avg. Ticket Size (Rs. Lacs) 30,528 31% Salaried Home Loan Book: Customers Rs 6,464 Crore Non-Salaried 69% 9,961 Q2 FY18 Q2 FY19
Slide 16: Maintaining margins through interest rate cycles
Maintaining margins through interest rate cycles Optimised borrowing cost in a hardening 8.0% 7.9% interest rate environment 7.7% Cost of Borrowing Maintained margins across interest rate cycles Q2 FY18 Q1 FY19 Q2 FY19 Demonstrating ability to successfully pass Yield NIM (incl. Fees) on borrowing co
Slide 17: Prudent asset liability management
Prudent asset liability management Optimised ALM for liquidity and cost1 Diversification in borrowing mix and investor profile1 Cumulative Outflows Cumulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% Term Loan 79% Bank 85% 83% 66% NCD 10% Mutual Fund 10% CP 6% Insurance 3% 23% 27% 27% 21% CC
Slide 18: Key Financials – Aditya Birla Housing Finance Limited
Key Financials – Aditya Birla Housing Finance Limited ∆ LY% Quarter 2 Figures in Rs Crore Half Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 5,777 9.884 Lending book 5,777 9,884 ~2x 9.96% 10.01% Average yield 10.10% 9.86% 6.93% 7.20% Interest cost / Av
Slide 19: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited 19
Slide 20: Profitable growth aided by improvement in asset mix
Profitable growth aided by improvement in asset mix 2 Year CAGR: Domestic: 23% | Domestic Equity: 49% Figures in Rs Crore Domestic Equity AUM grew by 33% y-o-y 2,71,556 Overall Equity AUM1 at ~Rs 1 Lakh Crore 2,44,609 7,390 10,018 1,83,033 7,151 1,63,228 Maintained equity market share in 1,56,058 Gr
Slide 21: Continued focus on retail expansion
Continued focus on retail expansion Figures in Rs Crore Retail + HNI AUM1 at Rs 1,25,000+ Crore HNI ~2x 1,27,385 Increasing Retail Grew by 22% y-o-y 1,04,646 Retail 70,698 77,656 67,123 Penetration 47,159 Investor folios up 2x in 2 years (AUM) 23,539 37,523 49,729 About 1 million addition in H1 FY19
Slide 22: Balanced Distribution Network
Balanced Distribution Network Overall AUM Sourcing Mix (%) Equity AUM Sourcing Mix (%) IFA Bank National Distributor Direct IFA Bank National Distributor Direct 19% 19% 43% 45% 21% 22% 19% 17% 18% 15% 13% 11% 42% 44% 25% 27% H1 FY18 H1 FY19 H1 FY18 H1 FY19 Balanced Sourcing Mix IFA has Greater Share
Slide 23: Building blocks for retail expansion
Building blocks for retail expansion Continue to strengthen distribution network Sweat Digital Assets 249 Target to reach 275+ locations by FY19 Digital Transactions as % of Total SIPNOW - Robo advisory Expand to emerging markets website Locations 63% State-of-the-art technology to 88 Increasing pre
Slide 24: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited ∆ LY% Quarter 2 Figures in Rs Crores Half Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 2,24,650 2,54,207 Domestic AAUM1 2,24,650 2,54,207 13% 68,592 90,979 Domestic Equity AAUM1 68,592 90,979 33% 9,94
Slide 25: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited 25
Slide 26: Fast growing franchise with significant value creation
Fast growing franchise with significant value creation Figures in Rs Crore Individual APE1 grew by 60% y-o-y Quarter growth: 77% y-o-y 577 Significantly higher than industry growth Industry: 10% | Private2: 11% | Top 4 Private2: 6% 361 Individual 290 Group FYP grew by 42% y-o-y APE Growth1 Group bus
Slide 27: Focus on value accretive product mix
Focus on value accretive product mix Figures in Rs Crore Increasing Share of Ind. Protection in Product Mix Improvement in VNB Margins1 5% 8% 28.2% 36.4% Gross VNB grew 2x y-o-y Protection Gross VNB 23% 218 30% Non-Par Factors contributing to sharp 105 improvement in Net VNB: 34% Par 23% ▪ +ve impac
Slide 28: Balanced sourcing strategy with strong growth in partnerships
Balanced sourcing strategy with strong growth in partnerships Figures in Rs Crore Partnership Channel Proprietary Channel Consistent increase in contribution of partnerships channel Channel-wise Individual FYP 313 265 290 71 H1 FY18 H1 FY19 H1 FY18 H1 FY19 HDFC Bank partnership scaling up with avg.
Slide 29: Focus on quality of business
Focus on quality of business Fund Performance across categories Persistency Ratios1 Internal Benchmark Fund +6% +7% +5% 74% 7% 8% 16% 68% 70% 10% 62% 63% 5% 9% 12% 57% 56% 3% 8% 8% 50% 51% 3% 2% 1 Yr 5 Yr 1 Yr 5 Yr 1 Yr 5 Yr 13th month 25th month 37th month Assure Enhancer Maximiser H1 FY17 H1 FY18
Slide 30: Key Financials – Aditya Birla Sun Life Insurance Limited
Key Financials – Aditya Birla Sun Life Insurance Limited ∆ LY% Quarter 2 Figures in Rs Crore Half Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 78% 204 364 Individual First year Premium 372 601 61% 71% 252 431 Group First year Premium 369 715 2x 8% 701
Slide 31: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited 31
Slide 32: Strong growth led by retail
Strong growth led by retail Figures in Rs Crore 177 GWP grew ~2x with 1.2 Mn lives covered 69 Group Strong GWP 96 Retail Mix: 61% (PY: 16%) growth led by Retail 82 108 Retail Rapid distribution capacity build up 14 • Multi channel mix with Banca at 54% H1 FY18 H1 FY19 • Capacity significantly higher
Slide 33: Significantly scaled up distribution and provider network
Significantly scaled up distribution and provider network Q2 FY18 Q1 FY19 Q2 FY19 One of the largest third party distribution capacities Branches 8 Banca tie-ups within 18 months : 43 59 59 ▪ HDFC, DCB, RBL, Deutsche Bank, AU Bank, KVB and AB Payment Bank Agents ▪ SVC signed up in Q2 FY19 8,500+ 17,
Slide 34: Driving value through diversification
Driving value through diversification Increasing contribution of Retail GWP Geographical diversification (% contribution of Non-Metro) 34% 27% 61% 34% Retail % of 8% 6% Total GWP FY 17 FY 18 H1 FY19 FY 17 FY 18 H1 FY19 Improving margins by Increasing retail mix Retail Mix has grown 4x YoY Presence a
Slide 35: Other Financial Services businesses
Other Financial Services businesses
Slide 36: Other Financial Services Businesses
Other Financial Services Businesses Figures in Rs Crore Quarter 2 Half Year FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) For Other Financial Services Businesses1 (PY) (CY) 86 156 Aggregate Revenue 177 321 2 (1) Aggregate Earnings before tax 11 3 General • Premium placemen
Slide 37: Aggregate financials
ADITYA BIRLA CAPITAL adityabirlacapital.com Aggregate financials
Slide 38: Delivering strong financial performance
Delivering strong financial performance Figures in Rs Crore Consolidated Revenue1 Consolidated PAT Reconciliation (IGAAP Vs. Ind AS) 32% Figures in Rs Crore Q2 FY19 3,961 3,008 PAT after MI (As per IGAAP) 227 EIR on assets and liabilities (15) Q2 FY18 Q2 FY19 ECL methodology adoption 1 Profit After
Slide 39: Strong core operating profit for the quarter
Strong core operating profit for the quarter Figures in Rs Crore Established Business PBT grew 23% y-o-y Consolidated PAT: Bridge from Q2 FY18 → Q2 FY19 ▪ Life Insurance profit ex fair value changes impacted mainly on account of investment in Book growth and HDFC Banca Includes mainly HDFC banca ram
Slide 40: Annexure: Consolidated Financials
Annexure Consolidated Financials
Slide 41: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Quarter 2 Half Year ∆ LY% FY 17-18 FY 18-19 Consolidated Profit & Loss FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 2,699 3,590 Revenue 5,019 6,653 33% 1,060 1,266 EBITDA 1,998 2,483 730 969 Less: Interest Expenses for lending businesses 1,390 1,854 9 24 Less:
Slide 42: Segmental Revenue
Segmental Revenue Figures in Rs Crore ∆ LY% Quarter 2 Half Year ∆ LY% FY 17-18 FY 18-19 Businesses FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 1,096 1,346 NBFC 2,123 2,618 312 371 Asset Management1 582 723 1,339 1,746 Life Insurance 2,365 3,079 26% 2,747 3,463 Established Businesses 5,070 6,419 27% 132 24
Slide 43: Segmental EBT
Segmental EBT Figures in Rs Crore Quarter 2 Half Year ∆ LY% FY 17-18 FY 18-19 Businesses FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 252 317 NBFC 505 652 127 155 Asset Management1 246 301 83 17 Life Insurance 94 46 462 489 Established Businesses 845 1,000 18% 3 21 Housing 11 34 (49) (73) Health Insurance2
Slide 44: Aditya Birla Capital Limited
Aditya Birla Capital Limited CIN: L67120GJ2007PLC058890 Regd. Office: Indian Rayon Compound, Veraval – 362 266, Gujarat Corporate Office: One Indiabulls Centre, Tower 1, Jupiter Mills Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai – 400 013 Website: www.adityabirlacapital.com 44
Slide 45: Glossary
Glossary ▪ CY – Current Year ▪ NII – Net Interest Income ▪ FY – Financial Year (April-March) ▪ NIM – Net Interest Margin ▪ PY – Corresponding period in Previous Year ▪ DPD – Days past due ▪ PQ – Previous Quarter ▪ CAB – Corporate Agents and Brokers ▪ Q1– April-June ▪ AAUM – Quarterly Average Assets
Slide 46: Disclaimer
Disclaimer The information contained in this presentation is provided by Aditya Birla Capital Limited (“ABCL or the Company”), formerly known as Aditya Birla Financial Services Limited, to you solely for your reference. This document is being given solely for your information and for your use and ma