Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q4 FY20 Earnings Presentation
49 slides from Manappuram Finance's earnings presentation, May 2020
Slide 1: Manappuram Finance Limited Investor Presentation May 2020
Manappuram Finance Limited Investor Presentation May 2020 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Quarterly Update
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 3: Q4 FY20 Results: Consolidated Result Highlights
Q4 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM Net Profit Rs 252,252 Mn Rs 3,927.0 Mn Networth ROA 5.7% (+ 4.7% QoQ) ( -1.3% QoQ) Rs 57,450.8 Mn ROE 28.2% (+29.8 % YoY) (+43% YoY) Capital Adequacy # Borrowing Cost # GNPA # BV / Share Rs 68.0 23.4% 9.46% 0.88% **EPS Rs 18.59 Share of New Total B
Slide 4: Key Performance Highlights
Q4 FY20 RESULTS: KEY PERFORMANCE HIGHLIGHTS • Delivered strong performance with +29.8% YoY and +4.7 % QoQ consolidated AUM growth Overall • Robust profitability with 5.7% consolidated ROA, 28.2% consolidated ROE in Q4FY20 Highlights • Prudent capital structure with leverage being only 3.8 times Gold
Slide 5: Impact of Covid-19 on business
Impact of Covid-19 on business • All resources handling critical tasks have been working from home; Internal and business meetings have moved to VC Employee • All branches and office buildings are disinfected at regular basis; sanitizers provided to employees at key locations Safety • Social Distanc
Slide 6: Portfolio Characteristics and Key initiatives in Asirvad
Portfolio Characteristics and Key initiatives in Asirvad Asirvad Portfolio Characteristics - • Asirvad Rural / Urban portfolio remain 60%/40% • Covid -19 disruption at rural level is less • Urban locations are facing longer lockdowns • Asirvad clients borrowings leverage – moderate • 92% of the clie
Slide 7: Consolidated Profit & Loss Statement
Q4 FY20 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) FY20 FY19 YoY % Q4 FY20 Q4 FY19 YOY % Q3 FY20 QOQ % Closing AUM (Rs Bn) 252 194 29.8% 252 194 29.8% 241 4.7% Income from Operations 54,653.2 41,795.1 30.8% 16,053.2 11,480.5 39.8% 13,990.2 14.7% Finance expenses 18,322.3 13,44
Slide 8: Consolidated Balance Sheet
Q4 FY20 RESULTS: CONSOLIDATED BALANCE SHEET Particulars (Rs Mn) Mar 2020 Mar 2019 YOY % Dec 2019 QOQ % Cash & Bank Balances 36,459.4 11,642.0 213.2% 21,959.9 66.0% Investments 900.9 1,737.5 -48.2% 1,123.4 -19.8% Loans & Advances 231,891.9 178,100.1 30.2% 221,898.8 4.5% Fixed Assets 3,307.7 3,134.5 5
Slide 9: Consolidated Result Highlights
Q4 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) CAGR: 16.6 % CAGR: 17.9 % 252 241 252 227 14,618 194 202 158 137 9,389 7,559 6,764 2,689 3,421 3,978 3,927 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY
Slide 10: Consolidated Result Highlights: Networth, BVPS, EPS, DPS
Q4 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) CAGR: 14.3 % 57,451 57,451 CAGR: 14.3 % 54,132 68.0 68.0 50,618 64.1 45,247 47,152 60.0 53.7 55.9 38,132 45.3 33,633 39.9 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY20 FY20 FY20 FY20 FY2
Slide 11: Consolidated AUM Update
Q4 FY20 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY17 FY18 FY19 FY20 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Gold Loans 111,245.3 117,349.8 129,615.2 169,671.8 132,924.1 151,683.4 162,429.5 169,671.8 Microfinance 17,959.4 24,372.0 38,407.8 55,026.4 41,983.0 47,242.5 50,221.4
Slide 12: Manappuram Finance: Borrowing Profile
Q4 FY20 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON 31st Mar, 2020 = Rs 175,061 Mn CREDIT RATING ECB Manappuram Finance: Term Loan 14.9% from Banks Domestic Rating : & FIs Long Term: AA (Stable) by CRISIL Commercial 16.7% Paper Long Term: AA- (Stable) by ICRA 11.1% Long Term: AA+
Slide 13: Manappuram Finance: Standalone Result Analysis
Q4 FY20 RESULTS: MANAPPURAM FINANCE: STANDALONE RESULT ANALYSIS GOLD LOAN AUM (Rs Bn) OPEX TO AUM % CAGR: 11.1 % 170 152 162 170 8.9% 8.3% 8.5% 8.0% 130 133 7.2% 7.6% 117 7.0% 6.8% 111 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY20 NET PROFIT
Slide 14: Operating Cost Leverage Playing Out in the Business
OPERATING COST LEVERAGE PLAYING OUT IN THE BUSINESS OPEX GROWTH HAS TRAILED AUM GROWTH (Rs Cr) SIGNIFICANT RATIONALIZATION IN SECURITY COSTS (Rs Cr) YoY growth: 2.6% (vs. 26.6% standalone AUM growth) YoY decline: 53.9% 1,166 1,196 44 37 30 17 16 12 11 8 FY19 FY20 Q3 Q4 Q2 Q4 Q1 Q2 Q3 Q4 FY18 FY18 FY
Slide 15: Standalone Result Analysis: Networth, NPA, Returns
Q4 FY20 RESULTS: MANAPPURAM FINANCE: STANDALONE RESULT ANALYSIS NETWORTH (Rs Mn) NPA ANALYSIS % CAGR: 12.8 % 53,559 50,987 53,559 43,922 45,308 48,066 2.0% 38,126 33,112 0.9% 0.9% 0.7% 0.5% 0.7% 0.6% 0.5% 1.7% 0.3% 0.3% 0.5% 0.4% 0.3% 0.2% 0.5% FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY17 FY18 FY19 FY20 Q1
Slide 16: Gold AUM Update: Pan India Presence
Q4 FY20 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE PAN INDIA PRESENCE GOLD AUM - REGIONWISE BREAKUP Jammu & Kashmir, 10 Himachal Pradesh, 13 Chandigarh, 4 Delhi, 59 12% Uttarakhand, 8 58% Punjab, 75 16% Uttar Pradesh, 140 14% Haryana, 64 Assam, 18 Bihar, 24 Rajasthan, 96 Tripura, 2 South North Wes
Slide 17: Gold AUM Update
Q4 FY20 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE GOLD HOLDING (TONNES) GOLD AUM PER BRANCH (Rs Mn) 72.4 72.0 73.5 72.4 CAGR: 9.2 % 48.1 48.1 67.5 68.4 43.8 46.0 61.1 64.0 38.4 39.3 33.8 35.3 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY20 C
Slide 18: Online Gold Loan: Business Update
Q4 FY20 RESULTS: ONLINE GOLD LOAN: BUSINESS UPDATE ONLINE GOLD LOAN METRICS ONLINE GOLD LOAN – KEY FEATURES AUM (Rs Mn) – Q4FY20 81,785.2 • Manappuram became the first player to launch its Online Gold Loan Average Ticket Size (Rs ‘000) 50,235.0 (OGL) in September 2015 • This facility enables custome
Slide 19: Asirvad Microfinance: Key Highlights
Q4 FY20 RESULTS: ASIRVAD MICROFINANCE: KEY HIGHLIGHTS Particulars (Rs Mn) FY20 FY19 YOY % Q4 FY20 Q4 FY19 YOY % Q3 FY20 QOQ % Closing AUM 55,026.4 38,407.8 43.3% 55,026.4 38,407.8 43.3% 50,221.4 9.6% Income from Operations 10,550.6 6,869.0 53.6% 3,925.3 2,336.4 68.0% 2,402.0 63.4% Finance expenses 4
Slide 20: Asirvad Microfinance: Result Analysis
Q4 FY20 RESULTS: ASIRVAD MICROFINANCE: RESULT ANALYSIS AUM (Rs Mn) RETURN RATIOS % 55,026 55,026 CAGR: 32.3 % 47,242 50,221 31.4% 41,983 25.0% 24.1% 38,408 25.5% 26.8% 13.9% 24,372 25.0% 5.9% 5.3% 17,959 -3.5% 4.8% 4.6% 4.9% 2.5% -0.4% 5.0% FY17 FY18 FY19 FY20 Q1 Q2 Q3 Q4 FY17 FY18 FY19 FY20 Q1 Q2 Q
Slide 21: Asirvad Microfinance: AUM Update
Q4 FY20 RESULTS: ASIRVAD MICROFINANCE: AUM UPDATE PAN INDIA PRESENCE MFI AUM - REGIONWISE BREAKUP Uttarakhand, 8 23% 37% Chandigarh, 1 Uttar Pradesh, 66 Bihar, 88 Punjab, 31 18% Sikkim, 1 Assam, 14 21% Haryana, 25 West Bengal, 101 Rajasthan, 60 South North West East Jharkhand, 51 Gujarat, 27 Tripura
Slide 22: Housing Finance: Business Update
Q4 FY20 RESULTS: HOUSING FINANCE: BUSINESS UPDATE AFFORDABLE HOUSING HOUSING FINANCE METRICS AUM (Rs Mn) – Mar 2020 6,296.1 ▪ Started commercial operations in January 2015. Branch Network 47 ▪ Focus on Affordable Housing for Mid to Low income Group. Number of States 9 ▪ Focus on South and West of In
Slide 23: Vehicle and Equipment Finance: Business Update
Q4 FY20 RESULTS: VEHICLE AND EQUIPMENT FINANCE: BUSINESS UPDATE VEHICLE AND EQUIPMENT FINANCE VEHICLE AND EQUIPMENT FINANCE METRICS AUM (Rs Mn) – Mar 2020 13,443.5 ▪ Started commercial operations in January 2015. Branch Network 222 ▪ The operations are a part of Manappuram Finance Ltd and are Number
Slide 24: Company Overview
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 25: Company Overview: Brief Profile
COMPANY OVERVIEW: BRIEF PROFILE STRONG ▪ Incorporated in 1992, the company has been one of India’s leading gold loans NBFCs. PEDIGREE ▪ Promoted by Mr. V.P. Nandakumar (current MD & CEO) whose family has been involved in gold loans since 1949. ▪ Focus on utilising surplus capital to build or acquire
Slide 26: Company Overview: Strong Brand Recall
COMPANY OVERVIEW: STRONG BRAND RECALL ▪ Strong brand equity built over the years. ▪ Celebrity endorsements have led to enhanced visibility and growing business. ▪ Brand ‘Manappuram’ is endorsed by well recognized film industry icons across India . ▪ Our brand ambassadors - Venkatesh, Mohan Lal, Pune
Slide 27: Company Overview: Experienced Management Team
COMPANY OVERVIEW: EXPERIENCED MANAGEMENT TEAM Mr. V. P. Nandakumar Mr. B.N. Raveendra Babu Mrs. Bindu A L Managing Director & CEO Executive Director CFO ▪ Chief Promoter of ▪ Director since July 1992 ▪ Chartered Accountant with Manappuram Group ▪ Worked in a senior role with Over 20 years experience
Slide 28: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS Mr. Jagdish Capoor • Former Chairman of HDFC Bank, former Deputy Governor of Reserve Bank of India, former Chairman of UTI and BSE Ltd CHAIRMAN, INDEPENDENT & • Currently, he is on the Board of Indian Hotels Company Limited, Assets C
Slide 29: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS • Advance leadership Fellow at Harvard University, Gold medallist in Economics from XLRI School of Management in India. Sutapa Banerjee • She is Managing Director of Shiva Cement Ltd, JSW Cements Ltd, JSW Holdings Ltd , North East Sm
Slide 30: Company Overview: Shareholding Structure
COMPANY OVERVIEW: SHAREHOLDING STRUCTURE 250 MARKET DATA AS ON 13.05.2020 Share Price Performance Market Capitalization (Rs Mn) 1,02,604.40 200 Price (Rs) 121.40 150 844.99 No. of Shares Outstanding (Mn) 100 Face Value (Rs) 2.0 Avg. Qtrly Trading Volume (Rs Mn) 635.19 50 Avg. Qtrly Trading Volume (M
Slide 31: Business Strategy
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 32: Business Strategy: Key Highlights
BUSINESS STRATEGY: KEY HIGHLIGHTS BUSINESS STRATEGY STRENGTHEN THE ADDITION OF SYNERGISTIC CORE GOLD LOAN BUSINESS NEW BUSINESS SEGMENTS • De-Linking the Gold Business • Leveraging the Strong Brand Equity & Existing from Gold Prices Retail Customer Base • Focus on Branch Activations through increase
Slide 33: De-Linking Gold Business from Gold Prices
BUSINESS STRATEGY: DE-LINKING GOLD BUSINESS FROM GOLD PRICES Earlier Scenario – Additional 2 month for 12 months – Single Product Offering 12 month Long Tenure Product Auction Gold value 100 LTV 75% If the Customer does not Gold Loan 75 pay or close the Loan, then there is likely loss of Interest Ra
Slide 34: Gold Loan Business – Reaching Out to the Customer
BUSINESS STRATEGY: GOLD LOAN BUSINESS – REACHING OUT TO THE CUSTOMER Increased Significantly Initiative to track marketing enhanced our Increased branch level initiatives across marketing spend incentives and performance branches and key with growing BTL branch activations scorecard markets and ATL
Slide 35: Introducing New Synergistic Product Segments
BUSINESS STRATEGY: INTRODUCING NEW SYNERGISTIC PRODUCT SEGMENTS STRONG BRAND EQUITY CAPITAL AVAILABILITY ADDITION ON NEW SYNERGISTIC ▪ Current Capital Adequacy at EXISTING RETAIL CUSTOMER PRODUCT SEGMENTS 23.4% compared to the BASE minimum 15% as stipulated by the RBI. MICROFINANCE PAN INDIA DISTRIB
Slide 36: Asirvad Microfinance: Risk Management Practices
ASIRVAD MICROFINANCE: RISK MANAGEMENT PRACTICES • Geographic concentrations norms - District wise, State wise and along with Industry heat map analysis. • Disbursement Related Caps - Branches categorised based on performance for fresh disbursements for existing customer and acquisition of new custom
Slide 37: Asirvad Microfinance: Risk Management Practices
ASIRVAD MICROFINANCE: RISK MANAGEMENT PRACTICES • PAR management: State of the art Analytics/MIS - center-wise, customer wise, branch wise and bucket wise data analyzed on daily basis and reported across various senior levels for better monitoring and supervisory control. • Dashboard for Field level
Slide 38: Key Technology Initiatives
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 39: Exploring New Age Fintech Business Opportunities
KEY TECHNOLOGY INITIATIVES: EXPLORING NEW AGE FINTECH BUSINESS OPPORTUNITIES DIFFERENTIATE (TACTICAL) INNOVATE (STRATEGIC) Business differentiators like CRM, MDM Innovative projects to make UPI, RPA & Adoption of New us ready and relevant to face future challenges technologies i.e. IOT, Blockchain,
Slide 40: Innovative Business Propositions
KEY TECHNOLOGY INITIATIVES: INNOVATIVE BUSINESS PROPOSITIONS • Apps: B2C & B2B Apps that can work with or without internet connectivity Offline Apps • Mobility Apps: Restructured Apps that can work without any device, browser, platform dependency • OGL Digital Cards & Wallets: This may open up VAS/B
Slide 41: Implementation of New Technologies - Staying Ahead of the Curve
KEY TECHNOLOGY INITIATIVES: IMPLEMENTATION OF NEW TECHNOLOGIES - STAYING AHEAD OF THE CURVE (a) Support for Score card development (a) Solution for Customer 360 view Unified LOS & (a)Customisable and scalable LOS and AI/ML CRM (b) Helps Process Analytics (b) Lead Management (c) LMS LMS System (c) He
Slide 42: Annexure
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 43: Understanding Our Evolution Phase 1: FY08 - FY12
UNDERSTANDING OUR EVOLUTION PHASE 1: FY08 - FY12 STRONG GROWTH WITNESSED…. 2908 3000 ▪ Higher Loan To Value (LTV) up to 85% 150 2064 116 ▪ Lower Cost of Funds due to Eligibility under Priority Sector 2250 100 Lending 75 1500 1005 ▪ Supported by Buoyant Economic Growth 50 645 436 750 ▪ Long Tenure Pr
Slide 44: Understanding Our Evolution Phase 2: FY12 - FY14
UNDERSTANDING OUR EVOLUTION PHASE 2: FY12 - FY14 REGULATORY OVERHANG IMPACT…. Regulatory Changes by RBI- 140 ▪ Mar - 2012 : Removal of Priority Sector Lending Status 120 116 100 – led to Higher Borrowing Cost. 100 75 82 80 60 ▪ Mar - 2012 : Cap on LTV to not exceed more than 60% 40 - 20 0 ▪ Weakened
Slide 45: Understanding Our Evolution Phase 3: FY15 Onwards
UNDERSTANDING OUR EVOLUTION PHASE 3: FY15 ONWARDS ON A REVIVAL PATH….. Sept – 2013 : Regulatory Changes by RBI- 170 ▪ Increased the loan-to-value (LTV) ratio for gold loans to 75 per cent - 150 130 111 117 ▪ Resulting into Level Playing Field for NBFCs vis-a-vis 100 92 101 100 82 the commercial bank
Slide 46: Industry Overview: India Gold Market
INDUSTRY OVERVIEW: INDIA GOLD MARKET India possesses over ~20,000 tonnes of gold worth more than US$ 800 bn. Organized gold loan sector penetration is Just 3% ! ▪ India is the largest consumer of gold jewellery in the world - Together with China, it makes up over half the global consumer demand for
Slide 47: Industry Overview: Key Drivers for Gold Loan Market
INDUSTRY OVERVIEW: KEY DRIVERS FOR GOLD LOAN MARKET ADVANTAGE CONSUMER ADVANTAGE LENDER ▪ Idle gold can be monetized for productive purposes. ▪ Collateral / Security is with the lender – No requirement to reposes. ▪ Prompt Disbursement - Faster turnaround time. ▪ No Liquidity Issues – Gold is one of
Slide 48: Competitive Advantage - Gold Loan NBFCs
INDUSTRY OVERVIEW: COMPETITIVE ADVANTAGE - GOLD LOAN NBFC’S Parameter Gold loan NBFC's Banks Moneylenders LTV Up to 75% Lower LTV than NBFC's Higher than 75% Processing charges are much Processing Fees No / Minimal Processing Fees No Processing Fees higher compared to NBFC's Usually in the range of
Slide 49: For Further Queries
FOR FURTHER QUERIES: DISCLAIMER : This presentation and the contents therein are for information purposes only and does not and should not construed to be any investment or legal advice. Any action taken or transaction pursued based on the basis of the information contained Mrs. Bindu A. L herein is