Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — Q2 FY20 Earnings Presentation
50 slides from Aditya Birla Capital's earnings presentation, Nov 7, 2019
Slide 1: Exchange filing cover letter for investor presentation
ADITINAiB CAP lir PROTECTING INVESTING FINANCING ADVISING PROTECTING INVESTING ADVISING Ref: No. Ref: No. ABCL/SD/MUM/2019-20/NOV/04 ABCL/SD/MUM/2019-20/NOV/04 7th November, November,2019 2019 BSE Limited BSE Limited Limited The National The NationalStock StockExchange Exchange of India ofof LtdLtd
Slide 2: Investor Presentation – Financial Results Q2 FY20
Investor Presentation FINANCIAL RESULTS – Q2 FY20 PROTECTING INVESTING FINANCING ADVISING MUMBAI 7th November 2019 A Leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 3: Table of contents
ADITYA BIRLA Table of contents „CAPITAL adityabirlacapital.com 1 | Overview Pg. 3 - 10 2 | Business-wise Performance Pg. 11 - 44 3 | Consolidated Financials & Other Annexures Pg. 45 - 49 NOTE 1: The financials of Aditya Birla Capital Ltd are consolidated financials prepared based on Ind AS unless ot
Slide 4: Diversified portfolio delivering returns across economic cycles
ADITYA BIRLA Diversified portfolio delivering returns across economic cycles „CAPITAL adityabirlacapital.com Figures in Rs Crore ABCL Aggregate PBT (IGAAP) vs India GDP Growth % 8.0% 8.0% 7.9% 6.9% 7.2% 6.9% 6.6% 6.1% 5.2% 5.4% 4.3% 5 YR CAGR: 21% | 2 YR CAGR: 29% 1,913 1,554 1,150 995 849 761 727 6
Slide 5: A strong track record of delivery across businesses
ADITYA BIRLA A strong track record of delivery across businesses CAPITAL adityabirlacapital.com Figures in Rs Crore PROTECTING INVESTING FY14 H1 FY20 3 Year Aspiration FY14 H1 FY20 3 Year Aspiration i Total Gross Premium1 4,833 8,0082 ➢ LI Protection 10-12 % AMC: Domestic AAUM 82,767 2,53,897 LI: Gr
Slide 6: Disciplined approach in a challenging business environment
ADITYA BIRLA Disciplined approach in a challenging business environment „CAPITAL adityabirlacapital.com Securing Long-term Growth Capital Strategically Managing Risk Maintaining Sufficient Liquidity 1 | Raised Rs 2,100 Crore of equity capital 1 | Greater diligence in underwriting with 1 | Raised LT
Slide 7: Leveraging Technology for our Customers, Partners & Employees
ADITYA BIRLA Leveraging Technology for our Customers, Partners & Employees CAPITAL adityabirlacapital.com BETTER EXPERIENCE GREATER REVENUE IMPROVED OPERATING MODEL 1. One million customers with One ABC ID; One 1. Analytics driven persona-based suitable upsell 1. Video KYC, online validations and AI
Slide 8: Fostering innovation through BizLabs Fintech Program
Fostering innovation through BizLabs Fintech Program ADITYA BIRLA ➢ Aiming to fuel innovation culture through collaboration with startups ➢ Platform to leverage innovation ecosystem to address our key focus areas through advanced fintech capabilities BiztK6s ➢ 3 month fast-track program which saw 57
Slide 9: Key highlights
ADITYA BIRLA Key highlights CAPITAL adityabirlacapital.com H1 Ind. APE1 grew by 20% in Life Insurance, NBFC Q2 NIM3 expanded by 64 bps to 5.28%; ✓ higher than industry (ex-LIC) at 11% ✓ Q2 NII3 grew by 20% y-o-y Life Insurance Net VNB margin improved by NBFC H1 PAT4 grew by 24% y-o-y; YTD RoE4,5 ✓ 2
Slide 10: Q2 FY20: Key Financials
Q2 FY20: Key Financials C O N S O L I D AT E D Figures in Rs Crore Quarter 2 ∆ LY% 1 FY 18-19 FY 19-20 Businesses (Aggregated on 100% basis) (PY) (CY) 8% 37% NBFC 317 317 4,299 256 Asset Management 155 175 4 13% Life Insurance (2) 41 186 3,978 Housing 21 36 4 1.7x General Insurance Broking 8 11 4 35
Slide 11: H1 FY20: Key Financials
H1 FY20: Key Financials C O N S O L I D AT E D 1 Figures in Rs Crore FY 18-19 Half Year FY 19-20 ∆ LY% Businesses (Aggregated on 100% basis) (PY) (CY) 12% 32% NBFC 652 718 4 10% 8,260 526 Asset Management 301 351 4 17% Life Insurance 20 66 4 3.3x 7,402 399 Housing 34 74 * 2.2x General Insurance Brok
Slide 12: Aditya Birla Finance Limited
Aditya Birla Finance Limited PROTECTING INVESTING FINANCING ADVISING 11
Slide 13: A 5-year perspective: Resilience through changing times
A 5-year perspective: Resilience through changing times Figures in Rs Crore FY14 What the Industry witnessed? H1 FY20 3 Year Aspiration l' Loan Book 11,735 Factors impacting credit quality 48,368 ➢ Increase in defaults across multiple ➢ Continue to grow retail loan book NIM (incl. Fees) % 5.10% sect
Slide 14: Diversified portfolio with value accretive growth
ADITYA BIRLA Diversified portfolio with value accretive growth „CAPITAL adityabirlacapital.com Figures in Rs Crore SME + Retail + HNI ■ Large + Mid Corporate ■ Others SME + Retail Loan Book grew by 14% y-o-y 48,061 48,368 Continue to diversify loan book with focus on higher Loan book 2% 3% margin se
Slide 15: Multiple products catering to a range of customer needs
ADITYA BIRLA Multiple products catering to a range of customer needs „CAPITAL adityabirlacapital.com SME (Grew 5% y-o-y) Retail (Grew 32% y-o-y) HNI + Others % Mix 26% 27% 28% % Mix 12% 15% 16% % Mix 12% 11% 10% ■ Broker Funding 3% 2% 2% LAS 10% 7% 6% 13% 23% 26% 12% 11% 10% Treasury Supply Chain 25
Slide 16: Portfolio Update: Large and Mid Corporate Loan Book
ADITYA BIRLA Portfolio Update: Large and Mid Corporate Loan Book „CAPITAL adityabirlacapital.com Figures in Rs Crore Large & Mid Corporate (De-grew 6% y-o-y) Portfolio Update Large & Mid Corporate Concentration Ticket Size Range # of Customer % of Total Book ➢ ~Rs 1,700 Crore run down of structured
Slide 17: Strong focus on growth with quality of loan book
ADITYA BIRLA Strong focus on growth with quality of loan book „CAPITAL adityabirlacapital.com Figures in Rs Crore Maintaining asset quality Stage-wise assets and ECL Provisioning Gross Stage 3 (excl. IL&FS) at 1.39% Asset Quality Q1 FY20 Q2 FY20 Gross Stage 3 exposure for all segments (ex- Gross Sta
Slide 18: Consistent margin expansion across quarters
ADITYA BIRLA Consistent margin expansion across quarters „CAPITAL adityabirlacapital.com Optimised borrowing cost in a volatile interest rate environment 8.25% 8.24% 8.26% 8.24% 7.96% 8.04% Cost of 7.84% +40 bps Borrowing Factors contributing to margin expansion: ▪ Increasing product mix towards ret
Slide 19: Well matched ALM with diversified borrowing mix
ADITYA BIRLA Well matched ALM with diversified borrowing mix „CAPITAL adityabirlacapital.com ALM optimised for liquidity and costs Diversification across instruments and investors Cumulative Outflows ■ Cumulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% 76% 75% Term Loan 41% Bank 54% NCD 38%
Slide 20: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited ∆ LY% Quarter 2 Figures in Rs Crore Half Year ∆ LY% FY 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 48,061 48,368 Lending book 48,061 48,368 +118 bps I- 11.59% 6.94% 12.76% 7.48% Average yield (Incl. Fee Income) Interes
Slide 21: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited PROTECTING INVESTING FINANCING ADVISING 20
Slide 22: Delivery in line with stated targets
ADITYA BIRLA Delivery in line with stated targets „CAPITAL adityabirlacapital.com Figures in Rs Crore Lending book at ~Rs 12,079 Cr (Retail: 94%) 12,079 Overall growth 22% y-o-y Strong growth 9,884 Affordable book at ~ Rs. 1,900 Crore in Lending Book Improvement in Cost Income Ratio y-o-y Q2 FY19 Q2
Slide 23: Systematic approach to build a healthy portfolio mix
Systematic approach to build a healthy portfolio mix Segment Mix (%) ▪ ATS for Affordable Home Loans ~ Rs 12 Lacs Affordable Loans ▪ 27% of affordable HL portfolio backed by IMGC (PQ: 21%) and 48% eligible 8% 6% for PMAY subsidy (PQ: 39%) CF 25% 24% LAP (Retail) ▪ ATS: Rs 51 Lacs (PY: Rs 63 Lacs) 9%
Slide 24: Pan India distribution network
ADITYA BIRLA Pan India distribution network „CAPITAL adityabirlacapital.com Stable Geographic Mix (%) Focus on increasing reach and building retail granularity Home Loan Book Home Loan Book (Metros) (Non-Metros) 39% 41% 21% 36% 3,685 4,553 14% 12% 3,748 18% 19% 2,716 29% 28% Q2 FY19 Q2 FY20 Q2 FY19
Slide 25: Maintaining margins through interest rate cycles
Maintaining margins through interest rate cycles Optimised borrowing cost in a volatile 8.4% 8.5% 8.4% 8.3% interest rate environment 7.9% 8.0% Cost of Borrowing Maintained margins across interest rate cycles Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 ■Yield ■ NIM (incl. Fees) Demonstrating abi
Slide 26: Prudent asset liability management
ADITYA BIRLA Prudent asset liability management CAPITAL adityabirlacapital.com Optimised ALM for liquidity and cost1 Diversification in borrowing mix and investor profile1 Cumulative Outflows ■ Cumulative Inflows Borrowing Mix % Sourcing Mix % 100%100% 89% 65% Term Loan 76% Bank 82% 2% 10% 5% 12% 9%
Slide 27: 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 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) * 22% 9,884 12,079 Lending book 9,884 12,079 * 22% * 35 bps 10.01% 7.20% 10.36% 7.54% Average yield (Incl. Fee
Slide 28: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited PROTECTING INVESTING FINANCING ADVISING 27
Slide 29: Profitable growth aided by robust asset mix
ADITYA BIRLA Profitable growth aided by robust asset mix „CAPITAL adityabirlacapital.com Figures in Rs Crore Maintained domestic AAUM1 Market Share 2,71,556 2,69,393 Overall Domestic AAUM market share2 at 10.47% (PQ: 10.52%) 2,44,609 7,390 6,371 10,018 1,63,228 1,65,290 Fixed Income AAUM1 market sha
Slide 30: Continued focus on retail expansion
ADITYA BIRLA Continued focus on retail expansion CAPITAL adityabirlacapital.com Figures in Rs Crore Retail + HNI AUM1 at Rs ~1,20,000 Crore Increasing 14111111W111110, 1.15x 1,20,701 4 1,27,328 Retail 1,04,646 Penetration (AUM) Broad based penetration in B-30 cities with Sep'17 Sep'18 Sep'19 AUM1 at
Slide 31: Balanced Distribution Network
Balanced Distribution Network AAUM Sourcing Mix (%) Distribution Scale Digital Tech enablement i Overall Equity Customers 300 Locations ➢ Launched new investor portal with simplified UX 19% 20% Direct > 75% in B-30 cities 44% 47% ➢ Launched micro ticket size SIP product 22% 20% r ■National ➢ Up-sell
Slide 32: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited ∆ LY% Quarter 2 Figures in Rs Crore Half Year ∆ LY% FY 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 2,54,207 2,53,828 Domestic AAUM 2,51,739 2,53,897 90,979 88,539 Domestic Equity AAUM 90,005 90,506 9,959 9,193 Alt
Slide 33: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited PROTECTING INVESTING FINANCING ADVISING 32
Slide 34: Fast growing franchise with significant value creation
Fast growing franchise with significant value creation Figures in Rs Crore Individual FYP1 grew by 20% y-o-y 39% 11114.11111 111010, 693 Significantly higher than industry growth 11 577 Industry2: 11% | Private2: 16% | Top 4 Private2: 17% Individual 361 FYP1 Growth Market share2 increased to 3.8% H1
Slide 35: Focus on value accretive product mix
Focus on value accretive product mix Figures in Rs Crore Continued focus on balanced product mix Improvement in VNB Margins1 6% 8% 7% 36.4% 36.3% Gross VNB grew 19% y-o-y Protection IN Q2FY20 Gross VNB at 37.7% (PY: 35.9%) 23% 259 Gross VNB 30% 42% Non-Par 34% Par 218 23% 23% H1 Net VNB Margin at 0.
Slide 36: Balanced sourcing strategy
ADITYA BIRLA Balanced sourcing strategy „CAPITAL adityabirlacapital.com Figures in Rs Crore Driving growth through partnerships and Partnership Channel Proprietary Channel operating leverage in proprietary 361 313 6% 331 ▪ 8 Banca tie-ups incl. HDFC Bank, DCB and KVB ▪ Pan India presence across 2,75
Slide 37: Focus on quality of business
ADITYA BIRLA Focus on quality of business CAPITAL adityabirlacapital.com Continuous improvement in persistency across periods Persistency 41. 41. 41. 41. 41. +6% 74% 80% +2% +1% +3% Figures in Rs Crore +4% 63% 65% 13th Month persistency at 80% (PY: 74%) Ratios1 56% 56% 50% 53% HDFC Bank experience w
Slide 38: 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 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 12% 379 423 Individual First year Premium 627 745 19% 656 491 Group First year Premium 1,049 679 18% 771 911
Slide 39: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited PROTECTING INVESTING FINANCING ADVISING 38
Slide 40: Strong growth led by retail
Strong growth led by retail Figures in Rs Crore GWP grew 78% YoY with retail growth at 83% 3.3x 315 Retail GWP Mix: 67% (PY: 65%) Strong GWP 177 211 Retail growth led by 96 Retail 15 115 5+ million lives covered 104 Group 81 62 2.4 million lives through micro products H1 FY18 H1 FY19 H1 FY20 Grew ~
Slide 41: Driving Value through Scale and Diversification
Driving Value through Scale and Diversification One of the largest 3rd party distribution capacities H1 FY19 H1 FY20 ✓ 10 Bank tie-ups incl. HDFC Bank, Axis Bank (Q2 go-live) Cities 650+ 1,200+ ✓ 10,000+ bank branches through Banca channel ✓ Monthly utilization of available capacity still leaves it
Slide 42: Expanding market through customer value proposition
Expanding market through customer value proposition Comprehensive Product suite enabling traditional & non traditional customer acquisition Expanding the Market Comprehensive Product Suite Outcome Average age 5 years lower than industry Customer Value Proposition enabling Activ Health / Assure: Indu
Slide 43: Key Financials – Aditya Birla Health Insurance Limited
Key Financials – Aditya Birla Health Insurance Limited ∆ LY% Quarter 2 Figures in Rs Crore Half Year ∆ LY% FY 18-19 FY 19-20 Key Performance Parameters1 FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 1.8x 70 123 Retail Premium 115 211 4 1.7x 32 53 Group Premium 62 104 * 1.6x 102 176 Gross Written Premium 177
Slide 44: Other Financial Services businesses
ADITYA BIRLA „CAPITAL adityabirlacapital.com Other Financial Services businesses
Slide 45: Other Financial Services Businesses
ADITYA BIRLA Other Financial Services Businesses „CAPITAL adityabirlacapital.com Quarter 2 Figures in Rs Crore Half Year FY 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Other Financial Services Businesses1 (PY) (CY) 156 168 Aggregate Revenue 323 361 (4) 14 Aggregate Profit B
Slide 46: Annexure A Consolidated Financials
ADITYA BIRLA „CAPITAL adityabirlacapital.com Annexure A Consolidated Financials
Slide 47: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore ∆ LY% Quarter 2 Figures in Rs Crore Half Year ∆ LY% FY 18-19 FY 19-20 Consolidated Profit & Loss FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 11% 3,591 231 3,976 296 Revenue Profit Before Tax (before share of profit/(loss) of JVs 6,654 513 7,622 675 * 15% 53 7
Slide 48: A financial services conglomerate meeting the life time needs of its customers
ADITYA BIRLA CAPITAL adityabirlacapital.com A financial services conglomerate meeting the life time needs of its customers PR INVESTING FINANCING ADVISING Life Insurance 1 Mutual Funds Home Finance Online Personal Finance Health Insurance Wealth Management Personal Finance Management Motor Insurance
Slide 49: Disclaimer
ADITYA BIRLA Disclaimer „CAPITAL adityabirlacapital.com 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. Any reference herein to "the Compan
Slide 50: Glossary
ADITYA BIRLA Glossary „CAPITAL adityabirlacapital.com ▪ AAUM – Quarterly Average Assets under Management ▪ GWP – Gross Written Premium ▪ Q1– April-June ▪ ALM – Asset Liability Management ▪ HL – Home Loan ▪ Q2 – July-September ▪ ANW – Adjusted Net Worth ▪ JV – Joint Ventures ▪ Q3 – October – December