Muthoot Microfin Ltd · NSE:MUTHOOTMF
Muthoot Microfin — Q3 FY24 Earnings Presentation
38 slides from Muthoot Microfin's earnings presentation, Jan 29, 2024
Slide 1: Exchange filing cover letter for investor presentation
Date: January 29, 2024 To, BSE Limited National Stock Exchange of India Corporate Relationship Department, Limited Exchange Plaza, 5th Floor, 2nd Floor, New Trading Wing, Plot No. C/1, G Block, Rotunda Building, Bandra Kurla Complex, Bandra (E), P.J. Towers, Dalal Street, Mumbai 400001 Mumbai 400 05
Slide 2: Investor Presentation December 2023
Investor Presentation December 2023
Slide 3: Disclaimer
Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price-sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by Muthoot Microfin Ltd
Slide 4: Presentation Roadmap
Presentation Roadmap 01 Group/Company Overview 02 Business Updates 03 Financial Performance 04 Investment Rationale 3
Slide 5: Presentation Roadmap
Presentation Roadmap 01 Group/Company Overview 02 Business Updates 03 Financial Performance 04 Investment Rationale 4
Slide 6: MPG - History of over 137 years and 80 years of experience
MPG - History of over 137 years of history and 80 years of experience in Financial Services business Muthoot Pappachan Group (MPG) is a Well Diversified Business Conglomerate Our Promoters Other Automotive Businesses Hospitality Thomas Muthoot Managing Director, MML ` Real Estate Information Technol
Slide 7: Brand Recall and Synergies with the Muthoot Pappachan Group
Brand Recall and Synergies with the Muthoot Pappachan Group MPG’s Stronghold is the bottom of the pyramid underserved customers Target Customer segment of group Client base 3.28 Mn 5 Mn 0.5 Mn 35K MML is the first level of Customer can progressively graduate to gold loans, entry into formal financia
Slide 8: Strong Corporate Governance and Support from Promoters & Investors
Strong Corporate Governance and Support from Promoters & Investors Shareholding Post IPO Board of Directors Institutions Institutions Promoter Thomas John Promoter Directors Thomas George (Domestic), 3.18% (Foreign), 6.28% holding Thomas Muthoot Muthoot Muthoot, Managing Director Promoter, Non Execu
Slide 9: Experienced and Professional Management
Experienced and Professional Management Key Management Personnel & Senior Management Personnel Employee Mix1 Regional Office Field Monitors- other departments 265 Head Office 866 Field Monitors- Operation 303 team Sadaf Sayeed, Chief Executive Officer Exp: 22+ years, 12 years with MPG 313 Area Offic
Slide 10: Journey So Far
Journey So Far Reached scale of ₹1,14,581 Mn GLP; 1,424 branches, 13,067 employees, serving 3.28 Mn customers. The IPO of Muthoot Microfin was launched in Dec’23, witnessed A big interest from investors and was CRISIL upgraded the rating to subscribed by 11.52 times. A (Stable) for bank facilities a
Slide 11: Presentation Roadmap
Presentation Roadmap 01 Group/Company Overview 02 Business Updates 03 Financial Performance 04 Investment Rationale 10
Slide 12: Performance highlights – Q3
AUM Branches INR 114,581 Mn 1,424 (+38.6% YoY, 82,646 Mn) Disbursements (+30.9% YoY, Active Clients 1,088) INR 25,921 Mn 3.28 Mn (+19.4% YoY, (+26.7% YoY, 21,705 Mn) 2.59 Mn) GNPA 2.29% Employees (-1.20% YoY, 3.49%) 13,067 NNPA Collection (+34.5% YoY, 0.33% Loan Count 9,714) Efficiency (-0.64% YoY,
Slide 13: Performance highlights – Q3
Income PAT ROA INR 5,848 Mn INR 1,246 Mn PPOP 4.5% (+52.6% YoY, (+119.1% YoY, (+1.56% YoY, 3,832 Mn) INR 1,823 Mn 569 Mn) 2.9%) (+72.0% YoY, ROE* 1,060 Mn) 26.0% (+9.58% YoY, 16.4%) COF 11.21% (+0.43% YoY, Opex/GLP Ratio 10.78%) Equity 6.07% Inc. COF NIM INR 26,777 Mn (-0.24% YoY, 10.41% 12.6% 6.31%
Slide 14: Key Operational & Financial Highlights
Key Operational & Financial Highlights Strong growth in the Company with use of Technology Operation & Financial Performance Q3 FY24 YoY Growth QoQ Growth Assets Under Management (in mns) 1,14,581.37 38.6% 5.4% • The company showcase strong growth with acquisition of more customers, expansion of net
Slide 15: Consistent Growth
Consistent Growth AUM (Mn) Disbursement (Mn) Client Count (Mn) 27,004 25,921 24,475 24,812 Client (Mn) Avg OS/Client ('000) 1,14,581 21,705 35 92,083 1,00,376 1,08,671 32 33 33 34 82,646 3.2 3.3 2.8 3.0 2.6 Q3 FY'23 Q4 FY'23 Q1 FY'24 Q2 FY'24 Q3 FY'24 Q3 FY'23 Q4 FY'23 Q1 FY'24 Q2 FY'24 Q3 FY'24 Q3
Slide 16: Resilient Business Model – Proven over time
Resilient Business Model – Proven over time Rising Strong: Navigating Macro Disruptions, Ready for Post-COVID Recovery Impact of TN Flood on portfolio • Faster recovery pattern proven *Aff. POS *Aff. NATCAT NATCAT historically Districts (Mns) Loans Cover Cover % • Recent flood in TN impacted ~25K cu
Slide 17: Systemic Diversification with focused business in Target States
Systemic Diversification with focused business in Target States Number of Branches per State Q3 FY'24 Portfolio Diversification (Region-wise Trend) Exposure of Districts No. of % of Total Core states of Muthoot (% of GLP) Districts Districts WEST 11% 11% 11% 12% 12% ▲ Target states for next growth p
Slide 18: Digitization driving Collections
Digitization driving Collections Customer App Installation (Cumulative in Mns) Digital Collection ( Cumulative in Rs. Mns) Overall CE % 28,095 96.9% 98.2% 98.9% 98.9% 98.4% 1.58 22,462 1.50 1.38 17,575 1.13 1.18 12,947 8,037 Q3 FY'23 Q4 FY'23 Q1 FY'24 Q2 FY'24 Q3 FY'24 Q3 FY'23 Q4 FY'23 Q1 FY'24 Q2
Slide 19: Key Metrics
Key Metrics Branch Count RO Count AUM Per Branch (in Mns) 1,424 81.10 1,340 80.46 7,996 7,493 1,088 6,003 75.96 Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 AUM Per RO (in Mns) Client Per Branch Client Per RO 14.50 2,378 2,383 431 14.33 2,302 426 410 13.77 Q3 FY23 Q2 FY24
Slide 20: Asset Quality Update (1/2)
Asset Quality Update (1/2) Stage 1 (0-30) Stage 2 (30-60) 96.4% 96.8% 5.7% 88.1% 88.0% 4.5% 0.9% 0.6% FY 21 FY22 FY 23 9M FY 24 FY 21 FY22 FY 23 9M FY 24 Stage 3 (90+) GNPA NPA & Provision Coverage 7.4% GNPA Ratio NNPA Ratio Provision Coverage 6.3% 8.00% 7.39% 86% 86% 88% 7.00% 6.26% 86% 6.00% 82% 8
Slide 21: Presentation Roadmap
Presentation Roadmap 01 Group/Company Overview 02 Business Updates 03 Financial Performance 04 Investment Rationale 20
Slide 22: Robust fiscal year performance in terms of Income/Profitability (1/2)
Robust fiscal year performance in terms of Income/Profitability (1/2) Revenue from Operations Total income (in Mns) 16,321 20.9% 14,463 19.0% 17.0% 15.5% 8,429 6,963 FY 21 FY 22 FY 23 9M FY 24 FY 21 FY 22 FY 23 9M FY 24 PPOP (in Mns) PAT (in Mns) 3,298 5,197 4,362 1,639 1,759 1,413 474 71 FY 21 FY 2
Slide 23: Robust fiscal year performance in terms of Income/Profitability (2/2)
Robust fiscal year performance in terms of Income/Profitability (2/2) Cost Ratio’s Cost to Income 64.4% 65.0% Net Interest Margin Opex Ratio Provisioning Cost 12.7% 51.4% 11.9% 47.1% 10.3% 8.9% 6.9% 5.8% 6.2% 6.0% 3.0% 3.0% 2.3% 1.5% FY 21 FY 22 FY 23 9M FY 24 FY 21 FY 22 FY 23 9M FY 24 Profitabilit
Slide 24: Quarterly Performance
Quarterly Performance Total Income (in Mns) NIM (in Mns) PPOP (in Mns) 1,893 1,823 5,671 5,848 3,379 3,431 1,501 1,480 4,801 2,721 2,801 4,482 3,832 2,241 1,060 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 PAT (in Mns) PAT/RO
Slide 25: Q3 & 9M FY24: P&L Statement
Q3 & 9M FY24: P&L Statement (in Mns) Financial Comparison Q3 FY 24 Q3 FY 23 YoY (%) Q2 FY 24 QoQ (%) 9M FY 24 9M FY 23 YoY (%) Income Revenue from operations 5,810.47 3,801.82 52.83% 5,636.25 3.09% 16,233.72 9,849.24 64.82% Other income 37.82 30.32 24.71% 34.68 9.04% 86.93 132.50 -34.39% Total incom
Slide 26: Q3 & 9M FY24: Balance Sheet
Q3 & 9M FY24: Balance Sheet (in Mns) Financial Assets 9M FY 24 FY 23 Financial Liabilities 9M FY 24 FY 23 Cash and cash equivalents 11,791.9 7,594.6 Total outstanding dues of creditors 123.6 119.3 Bank balances other than cash 5,575.6 3,909.6 Debt securities 13,158.9 13,701.5 Other receivables 2,494
Slide 27: Balance Sheet Metric
Balance Sheet Metric Networth (Mns) CRAR 26,777 28.8% 29.6% 22.6% 21.9% 16,258 13,366 8,899 FY 21 FY 22 FY 23 9M FY 24 FY 21 FY 22 FY 23 9M FY 24 Debt/Equity Cost of Borrowing 3.99 11.2% 11.1% 2.94 2.99 3.00 10.9% Incremental COF: 10.41% 10.4% FY 21 FY 22 FY 23 9M FY 24 FY 21 FY 22 FY 23 9M FY 24 26
Slide 28: Performance & Annual Guidance
Performance & Annual Guidance Actual Guidance Particulars Comments FY 23 9M FY 24 FY 24 AUM-Growth 46.5% 38.6% 30%-33% Nine-month better performance on lower base NIM 11.9% 12.7% 12.7%-12.9% NIM will improve with Capital infusion and improvement COF. Incremental COF is at 10.41%. Operating Cost 6.2%
Slide 29: Presentation Roadmap
Presentation Roadmap 01 Group/Company Overview 02 Business Updates 03 Financial Performance 04 Investment Rationale 28
Slide 30: Robust Risk Management via use of Technology
Robust Risk Management via use of Technology Risk Management Framework Dedicated Credit Managers at all Efficient and Independent Internal Unique credit score developed along Collections branches Audit & Compliance team with Equifax 1,521 Area Credit Managers and Credit Managers supervised by 370 Au
Slide 31: Internal Controls
Internal Controls Field Monitoring Comprehensive Field Visit Policy. Loan Appraisal System driven field visit target setting & measurement Aadhar based E-Signing Liveliness Mobile app-based visit recording with Geo-tagging. In Application check list to certifying compliance. GRT’s St
Slide 32: Suvidha Loan Digital Eco-system
Digital Eco-system Client App Login CB UPI Enquiry Mandate SMS BBPS Credit Suvidha Loan Score Run WhatsApp Penny Drop BHIM Verification Voice Tele Verification Web App Dynamic QR Document E-Sign Bank A/C Credit Mobile UPI App Payments Express loan processed through Customer application without Bra
Slide 33: Technology Interventions
Technology Interventions Nominee ID Master Centre Geo Systematic FOIR Client Geo Verification tagging based exposure Tagging Realtime KYC Penny drop Digital access to Electronic Fund E-signing Verification verification documents Transfer Real time CB Automated Score card- Multiple payment Real time
Slide 34: Crafted and Curated for customer empowerment
Crafted and Curated for customer empowerment Diverse product portfolio tailored for customer needs Individual Loan Flexible repayment frequency and loan tenure Ticket Size – 60K – 300K | Tenure – 24 – 36 Months Ticket size based on credit performance Retail Muthoot Small & Growing Business (MS
Slide 35: Our Community Connect Activities
Our Community Connect Activities 34
Slide 36: Past Five Years Performance Track Record
Past Five Years Performance Track Record AUM (in Mns) Disbursements (in Mns) Borrowers (in Mns) CAGR 21% 92,083 CAGR 15% CAGR 15% 2.77 81,045 2.05 62,550 1.88 1.86 49,867 1.59 48,386 45,553 46,470 43,513 40,829 26,367 FY-19 FY-20 FY-21 FY-22 FY-23 FY-19 FY-20 FY-21 FY-22 FY-23 FY-19 FY-20 FY-21 FY-2
Slide 37: Glossary
Glossary Particulars Definition Cost of borrowing represents annually weighted average interest cost on borrowings, weights being annual average borrowings. Borrowings include debt securities, subordinated liabilities, and Cost of Borrowing(%) borrowings (other than debt securities) Cost to Income r
Slide 38: Thank you
Thank you 37