Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q1 FY22 Earnings Presentation
54 slides from Edelweiss Financial Services's earnings presentation, Aug 5, 2021
Slide 1: Cover letter to stock exchanges
EW/Sec/2021/142 August 5, 2021 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai- 400 001. Mumbai - 400 051. Scrip Code:- 532922 Symbol:- EDELWEISS Dear Sir/Madam, Sub: Investor Presentation Please find enclo
Slide 2: Edelweiss Financial Services Limited Q1FY22 Earnings Update
Edelweiss Financial Services Limited Q1FY22 Earnings Update
Slide 3: Contents
Contents 1 Q1FY22 Overview & Highlights 3 2 Update on Key Priorities 11 3 Balance Sheet Update 18 4 Business Update 25 5 Governance and Sustainability 47 2
Slide 4: Q1FY22 Overview & Highlights
Q1FY22 Overview & Highlights
Slide 5: Edelweiss at a Glance – Q1FY22
Edelweiss at a Glance – Q1FY22 Net Worth Ex-Insurance PAT INR 8,512 Cr INR 61 Cr Liquidity Customer Assets BVPS INR 5,500 Cr INR 3,02,300 Cr INR 74 (FV ₹1) 4
Slide 6: We Are A Diversified Company Across Nine Businesses
We Are A Diversified Company Across Nine Businesses Edelweiss Financial Services Ltd (EFSL) Housing Mutual Life General Insurance NBFC Alternatives ARC Wealth Mgt Finance Fund Insurance Insurance Broking • ECL • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edel
Slide 7: Earnings Across Businesses
Earnings Across Businesses Business wise PAT (INR Cr) Q1FY22 NBFC (8) Housing Finance (14) Mutual Fund 6 Alternatives Asset Management 8 Asset Reconstruction 50 Insurance Broking 3 Wealth Management 55 BMU & Corporate 18 Life Insurance (33) General Insurance (26) Total Business PAT 59 Less : Externa
Slide 8: Strong Customer Franchise Growth Despite Challenging Times
Strong Customer Franchise Growth Despite Challenging Times Total No of Customers (in lakhs) Customer Assets (INR Cr) 302,300 22 223,200 15 190,400 13 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 Expect to add another 10-15 lakh customers in FY22 7
Slide 9: Strategic Stake Sale in Insurance Broking Business
Strategic Stake Sale in Insurance Broking Business • Edelweiss set up the Insurance broking business in 2005 and over the years it has grown to be one of the leading composite insurance brokers in the country • In line with our stated strategy of creating and unlocking value for our stakeholders and
Slide 10: Q1FY22 Business Highlights (1)
Q1FY22 Business Highlights (1) • Signed co-lending agreement with Central Bank of India in MSME segment NBFC • Retail Collection efficiency increased to 91% in June’21 from market revival after Covid wave 2 • Forged co-lending partnership with a leading private sector bank Housing Finance • Focused
Slide 11: Q1FY22 Business Highlights (2)
Q1FY22 Business Highlights (2) • Robust recoveries of ~INR 740 Cr in Q1FY22 from 74 borrowers; ~22% of these were Asset from Retail ARC portfolio Reconstruction • Acquired assets worth ~INR 2,100 Cr with EARC’s deployment at INR 380 Cr • Gross premium grew at 31% YoY Life Insurance • Active client b
Slide 12: Update on Key Priorities
Update on Key Priorities oO Edelweiss Ideas create, values protect
Slide 13: Key Priorities For Next 18 Months
Key Priorities For Next 18 Months 1 Demerger and listing of Edelweiss Wealth Management 2 Reduce wholesale credit assets 3 Scale up our Asset Management and Insurance businesses 12
Slide 14: Demerger And Listing of Edelweiss Wealth Management
1 Demerger And Listing of Edelweiss Wealth Management Phase I • PAG’s strategic investment in EWM Phase II • Segregation of EWM business after regulatory approvals Oct-Dec’21 • Filing of regulatory applications for demerger and listing Phase III • Approval from NCLT Sep-Dec’22 • EWM listing 13
Slide 15: Reduce Wholesale Credit Assets
2 Reduce Wholesale Credit Assets ECLF Wholesale Loan Assets (INR Cr) 15,973 11,888 10,911 Q1FY20 Q1FY21 Q1FY22 Wholesale loan assets to reduce to ~INR 6,000 Cr by March’23 14
Slide 16: Successful Workouts of Over INR 2,000 Cr In Last 15 Months
2 Successful Workouts of Over INR 2,000 Cr In Last 15 Months Change of Developer Strengthening the Developer group through addition or replacement of Developers Projects Ensuring project progress by way of last mile financing and sales support for renewed Streamlining buyer interest Cash flow Improv
Slide 17: Scale Up Our Asset Management and Insurance Businesses
3 Scale Up Our Asset Management and Insurance Businesses Mutual Fund AUM (INR Cr) Alternatives AUM (INR Cr) 62,000 30,000 23,400 19,300 29,400 17,000 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 LI – Gross Premium (INR Cr) GI – Gross Premium (INR Cr) 214 63 164 163 40 21 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1F
Slide 18: Enabled By Digital Platform
3 Enabled By Digital Platform Asset Management Edelweissmf.com - New and transformed mutual fund website providing industry’s shortest account creation flow, rich product information and valued insights to investors Continued digital efforts have led to digital transactions in MF at 96% in Q1FY22 SW
Slide 19: Balance Sheet Update
Balance Sheet Update oO Edelweiss Ideas create, values protect
Slide 20: Strong Capitalization Across Businesses And Robust Liquidity
Strong Capitalization Across Businesses And Robust Liquidity % of Borrowings Available Liquidity (INR Cr) Businesses Metric Value 22% 21% NBFC Capital Adequacy 25.4% 15% Housing Finance Capital Adequacy 25.5% Asset Reconstruction Capital Adequacy 36.0% Life Insurance Solvency Ratio 184% Q1FY20 Q1FY2
Slide 21: Continue to Reduce Our Borrowings
Continue to Reduce Our Borrowings Borrowings (INR Cr) D/E (Excl Treasury Assets) 40,859 3.7 3.2 30,394 25,912 2.2 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 20
Slide 22: Borrowing Profile
Borrowing Profile Borrowing Profile by Instruments Borrowing Profile by Source 2% 20% 31% 9% 40% 67% 31% Loans & OD NCDs CPs Banks Retail MF PF, Insurance & FIs INR 25,912 Cr INR 25,912 Cr 21
Slide 23: Assets in each Tenor Range Adequately Cover Liabilities
Assets in each Tenor Range Adequately Cover Liabilities (INR Cr) Assets Liabilities Gap Upto 1 year 16,600 15,150 1,450 1-3 years 13,650 10,400 3,250 3 years+ 13,250 12,450 800 22
Slide 24: Credit Assets Remain Conservatively Provided
Credit Assets Remain Conservatively Provided Balance Sheet Provisions IRAC Provisions IndAS Provisions (INR Cr) 658 675 558 440 149 162 Q1FY20 Q1FY21 Q1FY22 We have consistently provided higher than IRAC norms 23
Slide 25: Cash Flow Plan
Cash Flow Plan Particulars (INR Cr) Jul’21-Dec’21 Jan’22-Jun’22 Opening Available Liquidity (A) 5,500 6,000 Inflows Expected Inflows 5,300 5,200 Fresh Borrowings 3,500 3,000 Total Inflows (B) 8,800 8,200 Outflows Repayments 6,300 6,300 Disbursements 2,000 2,500 Total Outflows (C) 8,300 8,800 Closing
Slide 26: Business Update
Business Update oO Edelweiss Ideas create, values protect
Slide 27: NBFC: Business Performance Snapshot
NBFC NBFC: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Signed co-lending agreement in MSME book with Equity (INR Cr) 3,829 Central Bank of India • Active discussions ongoing with 2 other banks for partnerships Credit Assets (INR Cr) 14,755 • Retail Collection efficiency at 91%
Slide 28: NBFC: Financial Performance Snapshot
NBFC NBFC: Financial Performance Snapshot INR Cr Q1FY22 AUM 9,608 Loan book 9,019 Equity 3,829 Gross Revenue 436 Net Revenue 26 Opex 88 Credit Costs (18) Profit After Tax (8) Gross Stage 3 Loans 368 Net Stage 3 Loans 305 Total Provision Cover 134.9% Capital Adequacy 25.4% 27
Slide 29: Housing Finance: Business Performance Snapshot
Housing Finance Housing Finance: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Forged co-lending partnership with a leading private bank Equity (INR Cr) 749 • Launched in house Digital Lending Platform for improved customer experience and efficiency Credit Assets (INR Cr) 4,256
Slide 30: Housing Finance: Financial Performance Snapshot
Housing Finance Housing Finance: Financial Performance Snapshot INR Cr Q1FY22 AUM 4,063 Loan Book 3,425 Equity 749 Gross Revenue 120 Net Revenue 31 Opex 27 Credit Costs 20 Profit After Tax (14) Gross Stage 3 Loans 125 Net Stage 3 Loans 112 Total Provision Cover 48.7% Capital Adequacy 25.5% 29
Slide 31: Mutual Fund: Business Performance Snapshot
Mutual Fund Mutual Fund: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Amongst fastest growing MF with ranking in the top 15 in Equity (INR Cr) 167 Q1FY22 • Net equity inflows of ~INR 1,800 Cr and net total MF AUM (INR Cr) ~62,000 inflows more than ~INR 5,000 Cr in Q1FY22 Net Ne
Slide 32: Mutual Fund: Financial Performance Snapshot
Mutual Fund Mutual Fund: Financial Performance Snapshot INR Cr Q1FY22 AUM 62,000 Equity 167 Net Revenues 37 Operating costs 31 Profit before tax 6 Profit after tax 6 31
Slide 33: Consistent Expansion of Investor and Partner Reach
Mutual Fund Consistent Expansion of Investor and Partner Reach Mutual Fund Equity Gross Sales (INR Cr) Mutual Fund SIP AUM (INR Cr) 132 2,629 59 62 699 588 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 Active Folios (in Lakhs) Active Quarterly MFDs (#) 7.0 4,529 3.6 2,387 2,338 2.4 Q1FY20 Q1FY21 Q1FY22
Slide 34: Alternatives: Business Performance Snapshot
Alternatives Alternatives: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Ranked no. 3 in Asia in terms of AUM raised in last 5 years by Preqin Equity (INR Cr) 161 • Strong deployment momentum with INR 800 Cr deployed in Q1FY22 AUM (INR Cr) ~30,000 • Adopting Sustainable Finance
Slide 35: Alternatives: Financial Performance Snapshot
Alternatives Alternatives: Financial Performance Snapshot INR Cr Q1FY22 AUM 30,000 Equity 161 Net Revenues 58 Operating costs 50 Profit before tax 8 Profit after tax 8 34
Slide 36: Robust Growth In Alternative Assets
Alternatives Robust Growth In Alternative Assets Alternatives AUM (INR Cr) Alternatives AUM – Strategy wise 30,000 11% 23,400 38% 19% 19,300 INR 30,000 Cr 32% Distressed Credit Fund Structured Debt Fund Real Estate Credit Fund Infrastructure Fund Q1FY20 Q1FY21 Q1FY22 35
Slide 37: Asset Reconstruction: Business Performance Snapshot
ARC Asset Reconstruction: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Robust recoveries of ~INR 740 Cr in Q1FY22 from 74 Equity (INR Cr) 2,272 borrowers; ~22% of these were from Retail ARC portfolio AUM (INR Cr) ~42,300 • Acquired assets worth ~INR 2,100 Cr with EARC’s deploym
Slide 38: Asset Reconstruction: Financial Performance Snapshot
ARC Asset Reconstruction: Financial Performance Snapshot INR Cr Q1FY22 AUM 42,300 Capital Employed 5,300 Equity 2,272 Gross Revenue 203 Net Revenue 91 Operating costs 18 Profit before tax 67 Profit after tax 50 Edelweiss’ share in PAT 30 37
Slide 39: Life Insurance: Business Performance Snapshot
Life Insurance Life Insurance: Business Performance Snapshot Q1FY22 Key Metrics Business Update Equity (INR Cr) 436 • Active client base has increased by ~10% YoY • Individual APE CAGR of 25% since FY17 against Individual APE (INR Cr) 58 industry growth at 8% #Policies Issued • Launched a new produc
Slide 40: Life Insurance: Financial Performance Snapshot
Life Insurance Life Insurance: Financial Performance Snapshot INR Cr Q1FY22 Net Premium Income 206 Investment Income & Other Income 148 Total Income 354 Total expenses 387 Profit After Tax (33) Edelweiss’ share in PAT (17) 39
Slide 41: Our Customer Base & Gross Premium Continue To Grow
Life Insurance Our Customer Base & Gross Premium Continue To Grow No of Active Unique Clients (#) Gross Premium (INR Cr) 333,914 214 304,187 164 163 249,137 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 40
Slide 42: General Insurance: Business Performance Snapshot
General Insurance General Insurance: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Registered GDPI YoY growth of 67% while industry grew at 14% in Q1FY22 Equity (INR Cr) 123 • Strong performance in motor line with YoY GDPI growth at 63% compared to industry at 8% GWP (INR Cr) 63
Slide 43: General Insurance: Financial Performance Snapshot
General Insurance General Insurance: Financial Performance Snapshot INR Cr Q1FY22 Net Premium Income 50 Other Income 13 Total Income 63 Total expenses 89 Profit After Tax (26) 42
Slide 44: Strong Growth Enabled By Digital Platform
General Strong Growth Enabled By Digital Platform Insurance No of Unique Clients (#) Gross Premium (INR Cr) 191,857 63 109,089 40 21 44,985 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 43
Slide 45: Wealth Management: Business Performance Snapshot
Wealth Mgt Wealth Management: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Robust business metrices for the quarter despite peak AUA (INR Cr) ~1,68,000 Covid second wave Net New Money • AuA grew ~8% QoQ with net new money for the ~2,400 quarter over INR 2,400 Cr (INR Cr) • Rais
Slide 46: Wealth Management: Financial Performance Snapshot
Wealth Mgt Wealth Management: Financial Performance Snapshot INR Cr Q1FY22 AUA 1,68,000 Equity 1,618 Gross Revenue 341 Net Revenue 293 Operating costs 212 Profit before tax 81 Profit after tax 55 Edelweiss’ share in PAT 21 45
Slide 47: Wealth Assets Continue To Maintain Robust Growth
Wealth Mgt Wealth Assets Continue To Maintain Robust Growth Wealth Management AUA (INR Cr) No of Clients (#) 168,000 730,900 127,300 612,400 106,600 503,800 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 46
Slide 48: Governance and Sustainability
Governance and Sustainability
Slide 49: 12 Member Board Comprises Majority of Independent Directors
12 Member Board Comprises Majority of Independent Directors Mr. P N Venkatachalam Dr. Ashima Goyal Independent Director Independent Director • Banking sector expert and former member of the • Professor at Indira Gandhi Institute of Development Research Interim Pension Fund Regulatory Authority of In
Slide 50: Significant Institutional Ownership
Significant Institutional Ownership Shareholding Pattern as on 30th June,2021 Key Shareholders above 1% Percent 1 Pabrai Investment Funds 6.2% Employee Trust 2 BIH SA 5.2% DIIs, Non 4.8% Promoter Group Institutions 3 TIAA CREF funds 5.0% & Others 32.9% 4 Baron Asset Management 3.4% 24.8% 5 LIC 2.6%
Slide 51: Our Sustainability Efforts
Our Sustainability Efforts EdelGive Foundation’s commitment to Achieving the SDGs (Cumulative till Q1FY22) 123 Districts Sustainable Women across 14 States Quality Education Livelihoods Empowerment INR 7.10 Cr* INR 9.27 Cr* INR 3.50 Cr* INR 46.95 Cr * 19.49 lakh Children 1,741 hectares of irrigated
Slide 52: EdelGive Funding Partners & Networks
EdelGive Funding Partners & Networks We have partnered with some of the largest Foundations, Corporates and HNIs through our innovative models focused on collaboration 51
Slide 53: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 54: Safe Harbour
Safe Harbour Slide 4: Net worth is including MI, investment in CCD by CDPQ of INR 866 Cr and exc luding EWM equity Slide 4: Ex -Insurance PAT is excluding MI Slide 4: BVPS has been computed by taking into account potential stake dilution from convertible instruments in NBFC Slide 4,19,24 : Available
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