Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q2 FY22 Earnings Presentation
52 slides from Mahindra & Mahindra Financial Services's earnings presentation, Oct 28, 2021
Slide 1: Exchange filing cover letter
Mahindro F NANCE Mahindra & Mahindra Financial Services Ltd. Mahindra Towers, 4th Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 Fax: +91 22 24984170 +91 22 24984171 28th October, 2021 The General Manager-Department of The Manager-Listing Department, Corporate Servic
Slide 2: Quarter Result Update September 2021
Mahindra & Mahindra Financial Services Limited Quarter Result Update September - 2021 Corporate Office: Regd. Office: Mahindra Towers, 4th Floor, Gateway Building, Apollo Bunder, Dr. G. M. Bhosale Marg, Worli, Mumbai-400 001, India Mumbai-400 018, India Tel: +91 22 2289 5500 Tel: +91 22 6652 6000 Fa
Slide 3: Agenda
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 2
Slide 4: Executive summary
Executive summary • PAT for Q2FY22 at Rs. 1,023 crores, a growth of 237% on a Y-o-Y basis • Disbursements/ Loan Book: ➢ 67% QoQ growth in disbursements; ➢ Loan de-growth arrested and expect Loan book growth from hereon • Business Operations: ➢ Visible collection improvement on the back of high effor
Slide 5: GNPA and Provisions
GNPA and Provisions ‘000s NPA contract movement^ GNPA% 294 44 Stage 3 (# of contracts) 216 114 15.5% 12.7% Q2F22: 8* • 30% of the provision of Rs. 2,517 Cr made in Q1 FY22 reversed in Q2 (Rs. 763 cr.) • On track to reverse ~80% of the Jun-21 Resolved Forward flow Additions Sep-21 Jun-21 Sep-21 Q1 pr
Slide 6: Business strength
Business strength Overlay provisions (Rs. Crs) Capital Adequacy Stage 3 - Coverage Ratio 2,112 53.0% 1,484 26.1% 35.1% 25.1% H1 F21 H1 F22 H1 F21 H1 F22 H1 F21 H1 F22 Overlay provisions maintained Well capitalized Prudent 5
Slide 7: Business context of Q2 F22
Business context of Q2 F22 Branches Q2FY22: 98% operating in 6,475 crores, Sep 21: 100% normalized 61% ↑ YoY Aug 21: 97% manner Jul 21: 95% Operating Environment Disbursements Collection Efficiency Stage-3 1 Dose: 95%+ Q2FY22: 63% Q2FY22: 12.7% 2 Doses: ~ 50% FY21: 58% FY21: 6.4% Asset Quality Non-C
Slide 8: Financial Information - Standalone
Executive Summary Financial Information - Standalone Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 7
Slide 9: Break down of Disbursements
Break down of Disbursements on standalone basis Half Year ended Half Year ended Year ended Asset Class Sep – 21 Sep – 20 March – 21 Auto/ Utility vehicles 35% 34% 34% Tractors 19% 23% 18% Cars 21% 21% 21% Commercial vehicles and Construction equipments 5% 5% 5% Pre-owned vehicles 17% 6% 12% SME and
Slide 10: Break down of Business Assets
Break down of Business Assets on standalone basis Half Year ended Half Year ended Year ended Asset Class Sep – 21 Sep – 20 March – 21 Auto/ Utility vehicles 31% 28% 30% Tractors 17% 17% 17% Cars 22% 21% 22% Commercial vehicles and Construction equipments 14% 18% 16% Pre-owned vehicles 9% 9% 9% SME a
Slide 11: Break down by Geography
Break down by Geography on standalone basis September 2021 H1 FY 2022 September 2020 H1 FY 2021 10% 16% 11% 15% 14% 10% 11% 21% 23% 27% 26% 24% 19% 20% 20% Disbursement* 18% 29% 26% 29% 30% CENTRAL EAST NORTH SOUTH WEST NORTH: Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Ladakh,
Slide 12: Broad Based Liability Mix
Broad Based Liability Mix on standalone basis All figures in INR crores Funding Mix by Investor Category Funding Mix by type of Instrument Sep’21 Mar’21 Sep’21 Mar’21 Investor Type Instrument Type Amount % Share % Share Amount % Share % Share Banks/ Dev. Institutions 25,371 45.3% 50.5% NCDs 15,924 2
Slide 13: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR crores Cumulative Inflow Cumulative Outflow Cumulative Mismatch % 70,000 300% 61,038 60,000 250% 52,220 48,625 50,000 42,529 200% 40,000 28,386 150% 30,000 21,143 100% 20,000 16,578 11,101 9,592 50% 10,000 5,309 1,788 7,381 2,599 4,422 0 0% Upto
Slide 14: Key Financials
Key Financials on standalone basis Disbursement Total Income Profit after Tax Q2 FY 22 Rs. 6,475 crores Rs. 2,522 crores Rs. 1,023 crores 61% 5% 237% Q2 FY 21 Rs. 4,028 crores Rs. 2,650 crores Rs. 304 crores H1 FY 22 Rs. 10,347 crores Rs. 4,709 crores Rs. -506 crores 53% 11% NA H1 FY 21 Rs. 6,761 cr
Slide 15: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. crores) Revenues (Rs. crores) 64,993 64,389 10,245 10,517 61,250 59,947 57,196 8,810 5,304 4,709 FY19 FY20 FY21 H1FY21 H1FY22 FY19 FY20 FY21 H1FY21 H1FY22 Pre-Provisioning Operating Profit (Rs. crores) Profit after Tax (2) (Rs. crores) Overlay
Slide 16: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 2.6% 38.0% 37.3% 34.1% 28.2% 1.3% 26.3% 1.2% 0.4% NA FY19 FY20 FY21 H1FY21 H1FY22 FY19 FY20 FY21 H1FY21 H1FY22 Return on Net Worth (RONW) (2) (%) Asset Quality (%) Gross NPA Net NPA 15.2% 12.68% 8.4
Slide 17: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) Q2FY22 Q1FY22 Q-o-Q Q2FY21 Y-o-Y FY21 Revenue from operations (A) 2,508 2,176 15% 2,613 (4%) 10,395 Less: Finance cost (B) 1,015 1,018 0% 1,222 (17%) 4,733 NII (C= A+B) 1,493 1,158 29% 1,391 7% 5,662 Other Income (D) 14 11 31% 37 (60%) 122
Slide 18: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) H1FY22 H1FY21 Y-o-Y FY21 Revenue from operations (A) 4,684 5,253 (11%) 10,395 Less: Finance cost (B) 2,033 2,486 (18%) 4,733 NII (C= A+B) 2,651 2,767 (4%) 5,662 Other Income (D) 25 51 (50%) 122 Total Income (E=C+D) 2,676 2,818 (5%) 5,784 E
Slide 19: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in crores) As on Sep 30, 2021 As on Sep 30, 2020 As on Mar 31, 2021 ASSETS Financial Asset a) Cash and cash equivalents 716 1,067 571 b) Bank balance other than (a) above 3,452 2,342 2,699 c) Derivative financial instruments 56 21 26 d) Trade Receivables 16
Slide 20: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in crores) As on Sep 30, 2021 As on Sep 30, 2020 As on Mar 31, 2021 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 187 99 173 b) Payables i) Trade payables 529 526 596 ii) Other payables 24 22 47 c) Debt Securities
Slide 21: Summary & Key Ratios
Summary & Key Ratios on standalone basis Half Year ended Half Year ended Year ended Particulars Sep – 21 Sep – 20 March – 21 RONW (Avg. Net Worth) NA 7.5% 2.5% Debt / Equity 3.95:1 4.05:1 3.98:1 Capital Adequacy$ 26.1% 25.1% 26.0% Tier I 22.3% 20.8% 22.2% Tier II 3.8% 4.3% 3.8% EPS (Basic) (Rs.)* (4
Slide 22: Spread Analysis
Spread Analysis on standalone basis Half Year ended Half Year ended Year ended Particulars Sep – 21 Sep – 20 March – 21 Total Loan Income / Average Business Assets 13.5% 14.8% 14.8% Total Income / Average Assets 12.5% 13.9% 13.9% Interest cost / Average Assets 5.4% 6.5% 6.2% Gross Spread 7.1% 7.4% 7
Slide 23: Collection Efficiency and Restructuring
Collection Efficiency and Restructuring on standalone basis Collection Efficiency^ July Aug Sep Quarter 2 Quarter 1 FY 2022 95% 97% 100% 98% 80% FY 2021 94% 102% 75% 82% 67% ^ Computed as (Current month demand collected + Overdues collected)/(Current month demand due for the month) Without consideri
Slide 24: NPA Analysis
NPA Analysis on standalone basis Particulars (Rs. in crores) except figures in % As on Sep 30, 2021 As on Jun 30, 2021 As on Sep 30, 2020 As on Mar 31, 2021 Business Assets (including Provisions) 63,618 63,582 67,773 64,608 Gross NPA (Stage 3) 8,069 9,832 4,767 5,786 Less: ECL Provisions (Stage 3) 4
Slide 25: Movement of Provisions and Management Overlay
Movement of Provisions and Management Overlay on standalone basis Q2FY22 H1FY22 Rs. in crores ECL Provisions Overlay Total ECL Provisions Overlay Total Stage-1 Provisions 20 7 27 (14) 7 (7) Stage-2 Provisions 210^ 2 212 831^ 2 833 Stage-3 Provisions (396) (606)* (1,002) 1,140 (213) 927 Provisions –
Slide 26: Stage Wise Provisioning
Stage Wise Provisioning on standalone basis Stage-Wise Assets and Provisioning As on 30th Sep 2021 As on 30th Jun 2021 As on 31st Mar 2021 Rs. in crores Business Assets Provisions & Business Assets Provisions & Business Assets Provisions & (Amount and %) Coverage (Amount and %) Coverage (Amount and
Slide 27: Financial Information - Consolidated
Executive Summary Financial Information - Consolidated Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 26
Slide 28: Key Financials (Consolidated)
Key Financials (Consolidated) on consolidated basis Disbursement Total Income Profit after Tax Rs. 6,839 crores Rs. 2,951 crores Rs. 1,103 crores Q2 FY 22 65% 4% 213% Q2 FY 21 Rs. 4,134 crores Rs. 3,071 crores Rs. 353 crores Rs. 10,811 crores Rs. 5,517 crores Rs. - 470 crores H1 FY 22 57% 10% NA H1
Slide 29: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) Q2FY22 Q1FY22 Q-o-Q Q2FY21 Y-o-Y FY21 Revenue from operations (A) 2,929 2,550 15% 3,035 -4% 12,050 Less: Finance cost (B) 1,143 1,151 -1% 1,368 -17% 5,307 NII (C= A+B) 1,786 1,399 28% 1,667 7% 6,743 Other Income (D) 22 17 26% 35 -38% 120
Slide 30: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) H1FY22 H1FY21 Y-o-Y FY21 Revenue from operations (A) 5,478 6,092 -10% 12,050 Less: Finance cost (B) 2,293 2,770 -17% 5,307 NII (C= A+B) 3,185 3,322 -4% 6,743 Other Income (D) 39 47 -17% 120 Total Income (E=C+D) 3,224 3,369 -4% 6,863 Empl
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in crores) As on Sep 30, 2021 As on Sep 30, 2020 As on Mar 31, 2021 ASSETS Financial Asset a) Cash and cash equivalents 944 2,607 808 b) Bank balance other than (a) above 3,770 2,563 3,174 c) Derivative financial instruments 55 21 26 d) Trade Receivables 6
Slide 32: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in crores) As on Sep 30, 2021 As on Sep 30, 2020 As on Mar 31, 2021 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 187 99 173 b) Payables i) Trade payables 693 674 732 ii) Other payables 24 22 47 c) Debt Securitie
Slide 33: Key Subsidiaries
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 32
Slide 34: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Year ended Particulars (Rs. in crores) Q2FY22 Q2FY21 H1FY22 H1FY21 March – 21 Loans disbursed 364 106 463 106 797 No. of Customer Contracts (nos.) 18,546 3,064 21,606 3,064 34,559 Loans & Advances (net) 6,931 7,485 6,931 7,485 7,128 Total income 361 377 695 762
Slide 35: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Particulars (Rs. in crores) Q2FY22 Q2FY21 H1FY22 H1FY21 March – 21 No. of Policies for the Period (nos.) 430,654 321,032 746,288 522,220 1,439,023 Net Premium 494 394 942 687 1,794 Total income 77 60 137 101 269 PBT 13 5 18 8 44 PAT 10 4 13 6 32 No. of e
Slide 36: Company Overview
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 35
Slide 37: Company Background
Company Background Parentage: Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (Mcap: Rs 1.1 trillion)* About MMFSL: MMFSL (Mcap: Rs 237 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban sector
Slide 38: MMFSL Group structure
MMFSL Group structure (1) 80% Mahindra Insurance Brokers Limited (“MIBL”) Mahindra & Mahindra Limited 98.42%(2) Mahindra Rural Housing Finance Limited (“MRHFL”) 52.16% 49% Mahindra Finance USA LLC (Joint venture with Rabobank group subsidiary) 51%(3) Mahindra Manulife Investment Management Mahindra
Slide 39: Our Journey
Our Journey Commenced Housing Finance Maiden Retail NCD Issue of Rs. business through MRHFL QIP Issue of Rs. 426 crores 1000 crores Oversubscribed over 7x of base Raised Rs. 414 crores through JV with Rabobank subsidiary for tractor issue size of Rs. 250 crores Rights Issue of Rs. Private Equity fin
Slide 40: Shareholding Pattern (as on September 30, 2021)
Shareholding Pattern (as on September 30, 2021) Shareholding Pattern Top 10 Public Shareholders ▪ Life Insurance Corporation Of India 12.78% ▪ Wishbone Fund, Ltd. ▪ HDFC Life Insurance Company Limited 15.80% ▪ Valiant Mauritius Partners Offshore Limited 52.16% ▪ HDFC Trustee Company Ltd ▪ Ashish Dha
Slide 41: Business Strategy
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 40
Slide 42: Business Strategy
Business Strategy Grow in rural and semi urban markets by providing financing, investment and insurance solutions Expand Branch Network Leverage existing customers base through Direct Marketing Initiatives Diversify Product Portfolio: Nurture new businesses of Digital Finance and Leasing Broad base
Slide 43: Extensive Branch Network
Extensive Branch Network ◼ Extensive branch network with presence in 27 states and 7 union territories in India through 1,384 offices ◼ Branches have authority to approve loans within prescribed guidelines Coverage Branch Network as of Central East North 2 21 South West 27 1,388 1,384 35 1,284 1,321
Slide 44: Diversified Product Portfolio
Diversified Product Portfolio ▪ Loans for auto and utility vehicles, tractors, cars, commercial vehicles and construction Vehicle Financing equipments Pre-Owned Vehicles ▪ Loans for pre-owned cars, multi-utility vehicles, tractors and commercial vehicles ▪ Loans for varied purposes like project fina
Slide 45: Employee Management and Technology Initiatives
Employee Management and Technology Initiatives Employee engagement & training Technology initiatives ▪ Foster a Digital Learning ecosystem that drives a culture of ▪ All our offices are connected to the centralised data centre in anytime-anywhere learning. Mumbai through Lease line/tablets ▪ Structu
Slide 46: Credit Rating
Credit Rating MMFSL believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates Credit Rating India Ratings Outlook IND AAA Long term and Subordinated debt (incl. MLD); Bank Facilities Stable IND PP-MLD AAA emr Short term debt IND A1+ -- CARE Ratings Outlo
Slide 47: Awards & CSR Initiatives
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 46
Slide 48: Awards & Accolades, CSR Initiatives
Awards & Accolades CSR Initiatives ■ Ranked 54th among India Best Companies to Work 2021 by ■ Launched flagship program for the holistic development of our Great Place to Work ® Institute driver community and their family members. ■ India’s 30th Best workplaces in BFSI 2021 by Great Place to ■ This
Slide 49: Risk Management Policies
Executive Summary Financial Information Key Subsidiaries Company Overview Business Strategy Awards & CSR Initiatives Risk Management Policies Transforming rural lives across the country 48
Slide 50: Risk Management Policies
Risk Management Policies Provisioning Norms Stage Description Provision Mechanism Stage 1 0- 30 days past due PD * LGD * Stage 1 Asset Stage 2 > 30 to <= 90days past due PD * LGD * Stage 2 Asset Stage 3 > 90 days past due LGD * EAD of Stage 3 Asset* The Company may also make additional management ov
Slide 51: Disclaimer
Disclaimer This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Mahindra & Mahindra Financial Services Limited (the “Company”), nor shall it or any part of it or
Slide 52: Thank You
Thank You Transforming rural lives across the country 51
Mahindra & Mahindra Financial Services — Q2 FY22 Earnings Presentation on 6ix