Muthoot Microfin Ltd · NSE:MUTHOOTMF
Muthoot Microfin — Q2 FY2025 Earnings Presentation
53 slides from Muthoot Microfin's earnings presentation, Nov 5, 2024
Slide 1: Exchange filing cover letter
November 5, 2024 To, BSE Limited National Stock Exchange of India Limited Corporate Relationship Department, 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 400 051 Scri
Slide 2: Investor Presentation Q2 FY'25
Investor Presentation Q2 FY’25
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 1.Group/Company Overview 2.Business Updates 3.Financial Performance 4.Investment Rationale 3
Slide 5: 1. Group/Company Overview
Presentation Roadmap 1.Group/Company Overview 2.Business Updates 3.Financial Performance 4.Investment Rationale 4
Slide 6: MPG - Legacy of 138+ years of history
MPG - Legacy of 138+ years of history Muthoot Pappachan Group (MPG) is a Well Diversified Business Conglomerate Our Promoters Automotive Other bussiness Hospitality Thomas Muthoot Managing Director, MML Real Estate Information Technology Infrastructure Thomas John Muthoot Non-Executive Director, MML
Slide 7: Journey So Far
Journey So Far 2024 • Raised USD 128Mn via ECB. • Entered Telangana and Andhra Pradesh State 2023 • Launched the ‘Mahila Mitra’ app • AUM Crossed ₹50,000 Mn • Raised ₹ 1.9 B n from GPC through preferential allotment • The I PO of Muthoot Microfin was launched in Dec-23, witnessed 2021 a big interest
Slide 8: Client Base
Brand Recall and Synergies with the Muthoot Pappachan Group Client Base Target Customer segment of group 3.44Mn 5Mn 0.5Mn 35K MML is the first level of Customer can progressively graduate to gold loans, entry into formal financial vehicle finance and affordable housing institution for BoP clients Histor
Slide 9: Strong Corporate Governance and Support from Promoters & Investors
Strong Corporate Governance and Support from Promoters & Investors Shareholding as of 30th Sep’24 Board of Directors Thomas John Thomas George Promoter Directors Promoter Thomas Muthoot Muthoot Muthoot, 3.09% holding Managing Director Promoter, Non Executive Promoter, Non Executive Director Director
Slide 10: Key Managerial Personnel
Key Managerial Personnel Key Management Personnel and Senior Management Personnel Employee Mix Awards & Recognition Received Corporate Agency License’ Note: 1. Employee Data as on Sep 30, 2024 The employee composition displayed in the chart excludes 364 loan officers on the Team Lease payroll. Awarded
Slide 11: 2. Business Updates
Presentation Roadmap 1.Group/Company Overview 2.Business Updates 3.Financial Performance 4.Investment Rationale 10
Slide 12: Operational Highlights
Operational Highlights Active Clients AUM INR 1,25,185 Mn 3.44 Mn (+7.7% YoY) (+15.2% YoY) (+1.0% QoQ) (+2.5% QoQ) Branches GNPA 1,593 2.70% (+18.9% YoY) (+33 bps YoY) (+2.0% QoQ) (+60 bps QoQ) Disbursement CE2 INR 26,738 Mn 95.2% (-0.6% QoQ) (+21.3% QoQ) Employee CE Including Pre-Closure NNPA¹ 14,8
Slide 13: Financial Highlights – Q2 FY'25
Financial Highlights – Q2 FY’25 Income Cost to Income Ratio INR 6,672 Mn 44.54% (+18.0% YoY) (-100 bps YoY) (+4.5% QoQ) (-73 bps QoQ) PPOP Equity INR 2,364 Mn INR 30,005 Mn (+26.1% YoY) (+62.9% YoY) (+7.7% QoQ) (+2.61% QoQ) NIM COF INR 3,990 Mn 11.06% (+18.1% YoY) (-14 bps YoY) (+4.3% QoQ) (-1 bps Q
Slide 14: Financial Highlights – H1 FY'25
Financial Highlights – H1 FY’25 Income Cost to Income Ratio ROA INR 13,054 Mn 44.89% 2.84% (+25.0% YoY) (-196 bps YoY) (-127 bps YoY) (10,445 Mn) (46.85%) (4.11%) PPOP INR 4,560 Mn (+36.4% YoY) (3,344 Mn) NIM NIM % INR 7,816 Mn 12.94% ROE (+26.5% YoY) (+56 bps YoY) (6,180 Mn) (12.38%) 12.05% PAT * (
Slide 15: Key Operational & Financial Highlights
Key Operational & Financial Highlights Operation & Financial Performance Assets Under Management (in mns) Q2FY25 1,25,185.1 Q2FY24 1,08,670.7 YoY Growth 15.20% Q1FY25 1,22,102.5 QoQ Growth 2.52% Resilient business with adequate Controls Branches (Count) 1,593 1,340 18.88% 1,562 1.98% Total number of
Slide 16: Consistent Growth
Consistent Growth AUM (Mn) Disbursement (Mn) 1% YoY Clients (Mn) 15% YoY Client (Lks) Avg OS/Client ('000) 8% YoY 1,25,185 1,21,935 1,22,103 25,921 28,879 26,738 3.35 3.40 3.44 27,005 3.19 3.28 22,043 1,14,581 1,08,671 34 35 36 36 36 Q2 FY’24 Q3 FY’24 Q4 FY’24 Q1 FY’25 Q2 FY’25 Q2 FY’24 Q3 FY’24 Q4
Slide 17: Resilient Business Model – Proven over time
Resilient Business Model – Proven over time Rising Strong: Navigating Macro Disruptions, Ready for post-COVID recovery. TN Cyclone Kerala Floods Karnataka Crisis Covid Wave 1 Covid Wave 2 TN Floods & PB Karza Mukti Heat wave, Flood & Election 2018 2019 2019 2020 2021 2024 2024 1,22,103 1,25,185 1,21
Slide 18: Systemic Diversification with focused business in Target States
Systemic Diversification with focused business in Target States Portfolio Concentration (Region-wise Trend) Consistent Rural Penetration (AUM) Number of Branches Per State 12% 12% 12% 12% 12% 96.6% 96.7% 96.4% 97.2% West 96.3% East 13% 14% 15% 15% 14% Core states of Muthoot Target states for next gr
Slide 19: Top 5 States Performance
98.4% 6,915 TN TN 96.9% 5,710 CE% 96.4% 6,666 691 571 TN 99.8% 4,416 667 KL KL 97.8% 3,443 98.1% 442 4,246 KL 344 425 Q4 Top 5 States Performance 98.8% 3,440 Q4 FY FY 24 24 344 BH 97.1% 2,474 247 BHB H 94.3% 270 2,705 Q1 Q1 FY FY25 25 99.8% 255 2,546 DISBURSEMENT 210 KA K AK A 98.7% 2682,097 Q4 FY 2
Slide 20: Asset Quality 1/5
Asset Quality 1/5 Loan Assets Loan Assets Particulars Q2FY25 H1FY25 Slab ECL (Gross) ECL (%) (Gross) (%) Opening ECL (A) 1,774.68 1,878.55 Stage 1 94,582.02 516.35 94.19% 0.55% Stage 2 3,124.24 341.94 3.11% 10.94% Additions (B) Stage 3 2,714.40 1,758.99 2.70% 64.80% - Provisions as per ECL 846.42 1,
Slide 21: Asset Quality - Natural Calamity Claim & Insurance Settlement 2/5
Asset Quality - Natural Calamity Claim & Insurance Settlement 2/5 Q3 FY'24 Q4 FY'24 Q1 FY'25 Q2 FY'25 Q3 FY'25* NATCAT Insurance Settlement State Count Settle. % Count Settle. % Count Settle. % Count Settle. % Count Settle. % 2 99.8% TAMILNADU 20,107 99.80% 915 100.00% 2 100.00% - - - - 99.2% 2 RAJA
Slide 22: Asset Quality 3/5
Asset Quality 3/5 GNPA NNPA & Provision Coverage Stage 1 (0-30) GNPA Ratio NNPA Ratio (Net of total provision) NNPA Ratio (Net of Stage III provision) Provision Coverage (Net of total provision) 96.4% 96.6% 96.1% 94.2% Provision Coverage (Net of Stage III provision) 88.1% 88.0% 7.39% 8.00% 120.00% 6
Slide 23: Asset Quality 4/5
Asset Quality 4/5 Borrowers % - Sep-24 Borrower Vintage PAR 30+ - Sep-24 Borrower Vintage Lender Group 0-2 Y 2-4 Y 4-6 Y >6 Y Total % Lender Group 0-2 Y 2-4 Y 4-6 Y >6 Y Total % Unique 12.7% 5.6% 5.8% 8.8% 32.9% Unique to MML 3.6% 3.0% 1.5% 1.0% 2.9% MML+1 11.7% 5.0% 4.0% 5.1% 25.8% MML+1 3.7% 3.7%
Slide 24: Asset Quality 5/5
Asset Quality 5/5 Borrowers % Sep-24 Borrower Vintage Portfolio% Sep-24 Borrower Vintage Indebtedness 0-2 Y 2-4 Y 4-6 Y >6 Y Total % Indebtedness 0-2 Y 2-4 Y 4-6 Y >6 Y Total % Upto 50K 11.4% 2.6% 1.1% 1.3% 16.5% Upto 50K 14.1% 6.2% 7.3% 10.5% 38.1% 50k - 1Lk 15.4% 6.0% 3.2% 4.1% 28.6% 50k - 1Lk 19.
Slide 25: Credit Underwriters – Branch Vs Credit Staff
Credit Underwriters – Branch Vs Credit Staff Total Br Count Credit Staff Share% Region Q2 FY 24 Q3 FY 24 Q4 FY 24 Q1 FY 25 Q2 FY 25 Q2 FY 24 Q3 FY 24 Q4 FY 24 Q1 FY 25 Q2 FY 25 NORTH 318 340 365 385 391 86% 98% 108% 104% 108% WEST 197 218 229 237 242 80% 85% 91% 89% 91% EAST 192 207 229 245 255 94% 1
Slide 26: Score Card Impact (New Sourcing)
Score Card Impact (New Sourcing) Impact of Score Card No. of loans (Lks) % of amount Disbursed Unique credit score devloped along with Equifax Risk Category From Inception Q1-FY'25 Q2-FY'25 From Inception Q1-FY'25 Q2-FY'25 Very Low 14.07 1.07 1.06 70.18% 71.79% 68.99% Low 5.73 0.43 0.49 27.39% 27.28
Slide 27: Rejection Trend
Rejection Trend 42% • There has been a reduction in Rejection rates 40% 40% 39% 37% from 42% in Q3 FY 24 to currently around 34% in Q2 FY 25. 34% 33% • Obligations and DPD related rejections forms the 30% 30% 29% majority of CB Rejection; though the same has 28% 26% come down in recent times with mo
Slide 28: Digitization driving Collections
Digitization driving Collections Customer App Installation (Cum. Mn)1 Digital Collection (Mn) Digital Collection Share% 2 1.50 1.58 1.63 1.66 1.70 4,887 5,633 5,980 6,388 5,690 25% 26% 26% 27% 24% Q2 FY’24 Q3 FY’24 Q4 FY’24 Q1 FY’25 Q2 FY’25 Q2 FY’24 Q3 FY’24 Q4 FY’24 Q1 FY’25 Q2 FY’25 Q2 FY’24 Q3 F
Slide 29: Key Metrics
Key Metrics Branch Count RO Count AUM per Branch (Mn) 1,340 1,424 1,508 1,562 1,593 7,493 7,996 8,539 8,571 9,246 81.1 80.5 80.9 78.2 78.6 Q2 FY’24 Q3 FY’24 Q4 FY’24 Q1 FY’25 Q2 FY’25 Q2 FY’24 Q3 FY’24 Q4 FY’24 Q1 FY’25 Q2 FY’25 Q2 FY’24 Q3 FY’24 Q4 FY’24 Q1 FY’25 Q2 FY’25 AUM per RO (Mn) Client per
Slide 30: Diversified Products
Diversified Products Q2 FY'24 Q2 FY'25 Product Mix AUM Growth % INR (Mn) % of Total INR (Mn) % of Total LIVELIHOOD SOLUTIONS 1,05,929 97.5% 1,21,004 96.7% 14% LIFE BETTERMENT SOLUTIONS 1,247 1.1% 1,168 0.9% -6% HEALTH & HYGIENE LOANS 1,128 1.0% 1,306 1.0% 16% SECURED LOAN 367 0.3% 1,708 1.4% 366% Gr
Slide 31: Customer Retention
Customer Retention Client Addition Client Vintage Clients (’000) Q2 FY'25 67% 8% 24% 810 Q1 FY'25 68% 9% 23% 565 Q4 FY'24 67% 11% 22% 3,193 3,438 Q3 FY'24 66% 13% 21% Q2 FY'24 64% 15% 20% - - Q2FY'24 Addition Attrition Q2FY'25 <3 Years 3-5 Years >5 Years OS/Client Vintage-wise (MML Q2 FY'24 Q3 FY'24
Slide 32: Performance & Annual Guidance
Performance & Annual Guidance The muted business momentum is primarily due to various macro economic impacts such as General election, Natural Calamity events such 10% - 12% as severe heat waves impacting multiple regions, heavy rains and flooding in some regions of the country. There is overleverag
Slide 33: 3. Financial Performance
Presentation Roadmap 1.Group/Company Overview 2.Business Updates 3.Financial Performance 4.Investment Rationale 32
Slide 34: P&L Statement
P&L Statement (in Mns) Financial Comparison Q2 FY 25 Q2 FY 24 YoY (%) Q1 FY 25 QoQ (%) H1 FY 25 H1 FY 24 YoY (%) Income Revenue from operations 6,665.80 5,636.20 18.27% 6,378.80 4.50% 13,044.60 10,423.30 25.15% Other income 6.2 18.5 -66.57% 2.8 120.80% 9 21.5 -58.37% Total income 6,672.00 5,654.70 1
Slide 35: 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) 22,765 20.8% 20.5% 20.6% 19.0% 17.0% 14,463 13,054 10,445 8,429 FY 22 FY 23 FY 24 H1FY24 H1FY25 FY 22 FY 23 FY 24 H1FY24 H1FY25 PPOP (in Mns) PAT (in Mns) 4,496 7,544 4,362 4,560 2,053
Slide 36: 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 Net Interest Margin Opex Ratio Provisioning Cost 65.0% 12.7% 12.4% 12.9% 51.4% 11.9% 45.5% 46.9% 44.9% 10.3% 6.9% 6.2% 6.0% 5.9% 6.1% 3.8% 2.3% 3.0% 1.7% 1.3% FY 22 FY 23 FY 24 H1FY24 H1FY25 FY 22 FY 23
Slide 37: Robust Quarterly performance in terms of Income/Profitability (1/2)
Robust Quarterly performance in terms of Income/Profitability (1/2) Total Income (in Mns) NIM (in Mns) PPOP (in Mns) 6,672 4,000 3,990 6,534 2,441 6,382 2,364 3,826 2,195 1,876 1,823 5,848 5,655 3,431 3,379 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY
Slide 38: Robust Quarterly performance in terms of Income/Profitability (2/2)
Robust Quarterly performance in terms of Income/Profitability (2/2) Cost Ratio’s Cost to Income Net Interest Margin Opex Ratio Provisioning Cost 48.70% 13.5% 13.3% 13.4% 12.8% 12.6% 45.54% 45.27% 44.54% 6.0% 6.1% 6.0% 6.0% 6.2% 41.80% 5.1% 2.3% 2.5% 1.6% 1.9% Q2 FY'24 Q3 FY'24 Q4 FY'24 Q1 FY'25 Q2 F
Slide 39: Balance Sheet
Balance Sheet (Rs in Millions) Financial Assets H1 FY 25 FY 24 Financial Liabilities H1 FY 25 FY 24 Cash and cash equivalents 7,065.8 9,576.7 Total outstanding dues of creditors 278.6 259.4 Bank balances other than cash 5,689.2 6,210.6 Debt securities 7,664.3 9,986.2 Receivables 1,106.0 2,574.8 Borr
Slide 40: Balance Sheet Metric
Balance Sheet Metric Networth (Mns) CRAR 30,005 28.8% 29.0% 28.7% 28,044 21.9% 16,258 13,366 FY 22 FY 23 FY 24 H1FY25 FY 22 FY 23 FY 24 H1FY25 Debt/Equity Cost of Borrowing 3.99 11.2% 11.06% 2.99 2.98 10.9% Incremental Cost 2.80 of Borrowing: 10.4% 10.38% FY 22 FY 23 FY 24 H1FY25 FY 22 FY 23 FY 24 H
Slide 41: Funding profile
Funding profile Liquidity-Current Position (in Mns) Funding Profile – Mobilisation of Funds – Funding Mix (in Mns) 26,866 18,356 8,337 7,257 48% 8,793 3,774 7,066 22% 664 19% 10% 2% Term NCD ECB Liquid funds in hand DA/PTC Sanction Pending Term Funding Sanctions PTC DA Loans unutilised Funding mix f
Slide 42: Funding profile
Funding profile Funding Profile-Funding Mix on the Outstanding (in Mns) Lender wise Outstanding H1 FY 25* 55,277 54,843 22,377 14,246 18,069 Domestic DFI, 8.4% 13,297 Foreign DFI, 7.5% 9,657 8,363 7,601 4,960 Term NCD ECB PTC DA Loans FY 24 H1 FY 25 • The overall outstanding borrowing as on Sep 24 i
Slide 43: Liquidity – Static Liquidity Position
Liquidity – Static Liquidity Position Static ALM Maturity ALM 43,278.6 41,503.3 33,695.8 21,534.1 19,378.5 22,273.9 25,310.9 14,056.7 21,488.3 19,712.9 15,494.8 10,728.7 11,069.9 6,929.9 6,902.0 6,866.6 9,956.2 6,113.6 5,971.3 4,608.7 9,326.6 20,778.9 35,483.5 44,101.8 15,294.7 16,354.0 25,667.4 47,
Slide 44: 4. Investment Rationale
Presentation Roadmap 1.Group/Company Overview 2.Business Updates 3.Financial Performance 4.Investment Rationale 43
Slide 45: Strategic initiatives & Risk mitigants
Strategic initiatives & Risk mitigants Sourcing Collection Process Quality Collection TAT improvement Focus on Score card Team initiatives customer retention NATCAT Insurance Dynamic voice drop Socio-economic Process for on-time payment profiling being Optimisation implemented E-Clinic Analytics Dig
Slide 46: 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 1,735 by Area Credit Managers and Credit Managers supervised 426 Au
Slide 47: 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 48: Digital Eco-system
Digital Eco-system Suvidha Loan Client Web App Login Whatspp App CB Enquiry Credit UPI Score Run SMS Mandate Penny Drop Verification Tele Dynamic Verification BBPS QR Document E-Sign Bank AC Credit UPI BHIM Payements Voice Suvidha Disb: 126.84 Crs Suvidha Clients: 35,224 Note : Express loan processe
Slide 49: Technology Interventions
Technology Interventions Customer Group Group Loan Sanction Centre Onboarding Training Confirmation & Disbursement Meeting Score card-based Nominee KYC System supported Multiple payment E-signing exposure Verification group evaluation channels Real time C B System supported Master Centre Digital acc
Slide 50: 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 51: Past Five Years Performance Track Record
Past Five Years Performance Track Record AUM (Mn) Disbursements (Mn) Borrowers (Mn) CAGR 26% CAGR 27% CAGR 16% 121,935 106,616 3.35 81,045 2.77 92,083 2.05 1.88 1.86 62,550 46,470 48,386 49,867 40,829 26,367 FY-20 FY-21 FY-22 FY-23 FY-24 FY-20 FY-21 FY-22 FY-23 FY-24 FY-20 FY-21 FY-22 FY-23 FY-24 Br
Slide 52: Glossary
Glossary Particulars Definition Cost of borrowing represents annually weighted average interest cost on borrowings, weights being annual average borrowings. Borrowings include debt securities, Cost of Borrowing(%) subordinated liabilities, and borrowings (other than debt securities) Cost to Income r
Slide 53: Thank You
Thank You For further information please contact: Mr. Rajat Gupta AVP - Investor Relations see Email: Rajat.Gupta@Muthootmicrofin.com >< wee » Ph. No: +91-98218 49374