Poonawalla Fincorp Limited · NSE:POONAWALLA
Poonawalla Fincorp — Magma Fincorp — Q3 FY19 Earnings Presentation
60 slides from Poonawalla Fincorp's earnings presentation, Jan 31, 2019
Slide 1: Investors/Analysts' Presentation cover letter
Magma Fincorp Limited Regd. Office Magma House 24 Park Street, Kolkata 700 016 Tel : 91 33 4401 7350 / 7200 Fax :91 33 4401 7313 CIN : L51504WB1978PLC031813 Web: www.magma.co.in MAGMA Investing in the smallest dream 31 January 2019 Corporate Relationship Department Company Code - 524000 BSE Limited
Slide 2: Towards a Robust, Sustainable and Profitable Growth
Towards a Robust, Sustainable and Profitable Growth Magma Fincorp Limited Investor Presentation – Q3 FY19 1
Slide 3: Agenda
1 Business Overview 2 Transformed Business Strategy to drive sustainable growth 3 Financial Performance – Q3 FY19 4 Leadership Team & Shareholding Structure 5 Annexures Note: We have used various abbreviations, nomenclature, financial & non-financial ratios in this presentation. These may differ fro
Slide 4: Quick Snapshot
Quick Snapshot Company into 31st year of retail Strong technology platform, financing business systems & processes Strong management team with Robust risk management extensive industry experience framework AUM1 – Rs. 16,507 Crore ~ 2.1 Million Customers serviced Evenly spread across India since ince
Slide 5: Provide Financing Solutions to Underbanked Customers in 'Rurban' India
Provide Financing Solutions to Underbanked Customers in ‘Rurban’ India Recognised and Trusted Brand in ‘Rurban’ India • Taxi / Truck driver / operators, • Self employed customer with Small Farmers informal income sources (Home / Car buyer) Customer Focus Underserved ‘Rurban’ India • Customers with i
Slide 6: Financing & General Insurance Solutions
Focus on Higher Cross-Selling of Products for Deep Customer Engagement Customer Segments Illustrative Asset Profile Average Self Employed Small & Limited Average Average First Time Loan to Non Medium banking / Ticket Size Tenure Buyers Value Professionals Entrepreneurs credit history (Rs lakh) (mont
Slide 7: A well diversified portfolio across segment and geography
A well diversified portfolio across segment and geography Total AUM1 : Rs. 16,507 Cr. Zone-wise Breakup Asset Backed Finance (ABF) AUM1 : Rs. 11,291Cr. North, 36% West, 21% East, 18% Diverse South, 25% Product Affordable Housing Finance Rural-Urban Breakup SME Finance (AHF) AUM1 : Rs. 2,244Cr. Offer
Slide 8: Extensive Pan India Network
Extensive Pan India Network 309 Branches as on 31st December 2018 Asset Light Branch Network Himachal Pradesh, 3 Delhi, 4 • Wide retail presence through hub and spoke model Uttarakhand, 3 Punjab, 9 Uttar Pradesh, 41 • Technology solutions enable FOS to conduct business Haryana, 20 Bihar, 18 from cha
Slide 9: Strong Corporate Governance
Strong Corporate Governance Integrity and Credibility Openness and Trust and Respect Transparency for People Magma’s Core Values Fairness and Demanding Impartiality Excellence 8
Slide 10: Transformed Business Strategy to drive sustainable growth
1 Business Overview 2 Transformed Business Strategy to drive sustainable growth 3 Financial Performance – Q3 FY19 4 Leadership Team & Shareholding Structure 5 Annexures Note: We have used various abbreviations, nomenclature, financial & non-financial ratios in this presentation. These may differ fro
Slide 11: Transformed Business Strategy to drive sustainable growth
Transformed Business Strategy to drive sustainable growth A B C Strong and Independent Business process Robust Collection Process Risk Framework re-engineered leading to leading to improvement Interwoven with the Sustainable Growth in Asset Quality Business Strategy D E F Implemented state of the ar
Slide 12: Transformed Business Strategy to drive sustainable growth
Transformed Business Strategy to drive sustainable growth A B C Strong and Independent Business process Robust Collection Process Risk Framework re-engineered leading to leading to improvement Interwoven with the Sustainable Growth in Asset Quality Business Strategy D E F Implemented state of the ar
Slide 13: A. Business process re-engineered leading to Sustainable Growth
A. Business process re-engineered leading to Sustainable Growth Asset Back Finance (ABF) Affordable Housing Finance (AHF) SME Finance • Product Mix: Realigned product mix to • Leadership deck revamped to foster and • Leveraging on the existing branch increase focus on New SCV, New LCV, CE transform
Slide 14: A. ABF Disbursal Strategy: Change is evident
A. ABF Disbursal Strategy: Change is evident Disbursement Disbursement Mix 16% 1,592 1,446 1,462 -18% 1,425 1,347 20% 555 1,210 477 415 339 38% -48% 255 226 212 160 116 116 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 UV/Cars CV CE Used Assets Agri Finance Q3 FY18 Q3 FY19 • Significant growth in
Slide 15: A. ABF Disbursal: Change is evident
A. ABF Disbursal: Change is evident Product-wise Disbursal Contribution YTD FY18 ABF Disbursement YTD FY19 ABF Disbursement 462 581 -21% 15% 11% 1149 32% 1185 27% -3% 36% 33% 1526 25% 17% 1223 12% 9% 714 8% 457 56% 307 384 Rs. 3,753 Cr. 25% Rs. 4,235 Cr. UV/Cars CV CE Used Assets Agri Finance 14
Slide 16: A. ABF AUM Strategy: Change is evident
A. ABF AUM Strategy: Change is evident Product-wise AUM Contribution Mar ‘17 Mar ‘18 Dec ‘18 2,046 3,149 2,630 4,191 -22% 3,783 18% 3,470 27% 24% 31% -3% 34% 36% 26% 18% 22% 11% 2,961 14% 9% 2,492 19% 2,009 10% 9% 11% 1,256 1,586 1,076 26% 1,088 1,019 1,228 20% Rs. 11,513 Cr. Rs. 11,180 Cr. Rs. 11,2
Slide 17: A. AHF Disbursal Strategy: Change is evident
A. Affordable Housing Finance (AHF) Disbursal Strategy: Change is evident Total AHF Disbursement (Units) National Presence 1310 12% 6% 5% 6% 35% 32% 31% 697 37% 607 583 532 558 486 23% 31% 34% 448 19% 408 224 33% 36% 32% 29% 343 30 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 D
Slide 18: A. AHF Disbursal Strategy: Change is evident
A. Affordable Housing Finance (AHF) Disbursal Strategy: Change is evident Home Loan Disbursement Total AHF Disbursement 179 289 242 134 177 153 160 81 134 60 65 42 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 • 201% Y-o-Y improvement in HL in Q3 FY1
Slide 19: A. AHF: Business Initiatives
A. Affordable Housing Finance (AHF): Business Initiatives Go Home Loan Go Direct HL Ratio (Units) Direct Ratio (Units) 68% 77% 80% 63% 68% 56% 59% 40% 43% 47% 33% 33% Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Key Takeaways • HL Ratio has improved
Slide 20: A. SME Finance: Business Performance
A. SME Finance: Business Performance Disbursement picking up momentum 497 464 419 340 333 297 248 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 • 23% Y-o-Y improvement in SME Disbursals in Q3 FY19 Values in Rs crore 19 Bringing Equality of Opportunity to the Economically Disenfranchised
Slide 21: A. Business process re-engineering – Magma HDI General Insurance
A. Business process re-engineering leading to Sustainable Growth – Magma HDI General Insurance Premium Growth Portfolio Technology People • Business growth – 115.0% growth • Motor Portfolio: Continue to • Tablets: Feet on Street • Stable leadership team in Q3 FY19 over Q3 FY18 resulting enjoy the be
Slide 22: A. Magma HDI General Insurance: Robust growth
A. Magma HDI General Insurance: Robust growth Gross Written Premium Combined Ratio Movement 267 124.8% 124.7% 195 193 207 122.0% 117.7% 117.3% 123 124 113.5% Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Retail Run Rate Portfolio Construct 4% 9m FY18
Slide 23: Transformed Business Strategy to drive sustainable growth
Transformed Business Strategy to drive sustainable growth A B C Strong and Independent Business process Robust Collection Process Risk Framework re-engineered leading to leading to improvement Interwoven with the Sustainable Growth in Asset Quality Business Strategy D E F Implemented state of the ar
Slide 24: B. Strong Risk Framework Interwoven with the Business Strategy
B. Strong Risk Framework Interwoven with the Business Strategy Comprehensive Risk Framework developed in association with a leading Credit Rating Agency Calibrated Product-Customer-Geography Mix Refined Credit Screens & Processes • OEM, End-Use and Resale demand driven product • Customized screens t
Slide 25: B. Early Indicators: ABF - EWI & CPMI Trend
B. Early Indicators: ABF - EWI & CPMI Trend EWI Trend for ABF CPMI Trend for ABF 10.5% 10.7% 10.1% 10.0% 9.5% 8.9% 8.0% 8.3% 7.4% 7.2% 5.8% 5.7% 4.7% 4.7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY18 FY19 FY18 FY19 EWI reduced by 11% Y-o-Y as on Q3 FY19 CPMI has reduced by 50% Y-o-Y as on Q3 FY19 EWI: Early Warning
Slide 26: B. Early Indicators: AHF & SME - ID & ED Trends
B. Early Indicators: AHF & SME - ID & ED Trends ID & ED Trend for Affordable Housing (AHF) ID & ED Trend for SME 4.2% 2.0% 3.3% 1.5% 1.6% 1.5% 1.3% 1.4% 3.0% 1.6% 1.8% 1.8% 0.8% 1.3% 0.6% 0.6% 0.7% 0.6% 2.5% 0.5% 1.1% 1.3% 1.4% 0.6% Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Sep-17 Dec-17 Mar-18 Jun-
Slide 27: Transformed Business Strategy to drive sustainable growth
Transformed Business Strategy to drive sustainable growth A B C Strong and Independent Business process Robust Collection Process Risk Framework re-engineered leading to leading to improvement Interwoven with the Sustainable Growth in Asset Quality Business Strategy D E F Implemented state of the ar
Slide 28: C. Robust Collection Process leading to visible improvement in Asset Quality
C. Robust Collection Process leading to visible improvement in Asset Quality Three stage effective recovery process • Large and highly trained employee network, whose substantial earning is linked to recovery in pre NPA and early NPA buckets • Strict implementation of triggers at early delinquency •
Slide 29: Transformed Business Strategy to drive sustainable growth
Transformed Business Strategy to drive sustainable growth A B C Strong and Independent Business process Robust Collection Process Risk Framework re-engineered leading to leading to improvement Interwoven with the Sustainable Growth in Asset Quality Business Strategy D E F Implemented state of the ar
Slide 30: D. Implemented state of the art CRM system to build strong cross sell/up sell
D. Implemented state of the art CRM system to build strong cross sell/up sell capabilities and customer delight Key endeavour: To meet and exceed customer expectations fast and proactively Initiatives Early gains visible • 13% increase in cross sell disbursement in • Strengthening Cross-sell • Activ
Slide 31: D. Service Initiatives leading to Customer Delight
D. Service Initiatives leading to Customer Delight To exceed customer expectations through exceptional service Key initiatives Key initiatives • Enhanced customer connect • Communication in customer’s • 360∘ customer view across LoBs language • Unique Customer ID across • Call centre with 10 languag
Slide 32: Transformed Business Strategy to drive sustainable growth
Transformed Business Strategy to drive sustainable growth A B C Strong and Independent Business process Robust Collection Process Risk Framework re-engineered leading to leading to improvement Interwoven with the Sustainable Growth in Asset Quality Business Strategy D E F Implemented state of the ar
Slide 33: E. Technology and Digital Initiatives to enhance customer connect
E. Technology and Digital Initiatives to enhance customer connect Strategic Business Imperatives Impactful Execution Levers Responsive & Customer Employee Passionate & Simple, Reliable & Adaptive Delivery Experience Engagement Talented Team Innovative Solutions Engine CRM is now live pan India, prov
Slide 34: Transformed Business Strategy to drive sustainable growth
Transformed Business Strategy to drive sustainable growth A B C Strong and Independent Business process Robust Collection Process Risk Framework re-engineered leading to leading to improvement Interwoven with the Sustainable Growth in Asset Quality Business Strategy D E F Implemented state of the ar
Slide 35: F. People Initiatives leading to Employee Delight
F. People Initiatives leading to Employee Delight Strengthened engagement & on Focus on learning & development boarding • Fully functional role based training framework • Structured onboarding focused on middle and aimed to enhance productivity and behavior senior management (General Manager+) • LMS
Slide 36: Financial Performance – Q3 FY19
1 Business Overview 2 Transformed Business Strategy to drive sustainable growth 3 Financial Performance – Q3 FY19 4 Leadership Team & Shareholding Structure 5 Annexures Note: We have used various abbreviations, nomenclature, financial & non-financial ratios in this presentation. These may differ fro
Slide 37: Disclaimer: Adoption of Indian Accounting Standards
Disclaimer Adoption of Indian Accounting Standards (“IND-AS”) • This is the first financial year of adoption of Indian Accounting Standards (“IND-AS”) for the purposes of the Company’s financial reporting. • The impact of the transition from previous GAAP (“I-GAAP”) has been made in the opening rese
Slide 38: Q3 FY19: Consolidated Result Highlights (as per Ind AS)
Q3 FY19: Consolidated Result Highlights (as per Ind AS) Disbursements AUM NIM Q3 FY19 – Rs 2,133 Cr Q3 FY19 – Rs 16,507 Cr Q3 FY19 – 8.4% Q3 FY18 – Rs 1,939 Cr Q3 FY18 – Rs 15,605 Cr Q3 FY18 – 7.8% Opex / AAUM NNPA PAT Q3 FY19 – 4.2% Q3 FY19 – 4.0% Q3 FY19 – Rs 74 Cr Q3 FY18 – 3.8% Q3 FY18 – 5.6% Q3
Slide 39: YTD FY19: Consolidated Result Highlights (as per Ind AS)
YTD FY19: Consolidated Result Highlights (as per Ind AS) Disbursements AUM NIM YTD FY19 – Rs 6,174 Cr YTD FY19 – Rs 16,507 Cr YTD FY19 – 8.7% YTD FY18 – Rs 5,054 Cr YTD FY18 – Rs 15,605 Cr YTD FY18 – 7.8% Opex / AAUM NNPA PAT YTD FY19 – 4.2% YTD FY19 – 4.0% YTD FY19 – Rs 219 Cr YTD FY18 – 3.6% YTD F
Slide 40: Disbursals
Disbursals QoQ growth in Disbursement YoY Change in Disbursement Mix 1,939 2,133 2,233 2,200 2,133 5% 5% 1,939 3% LAP - Retail 1,840 8% 1,641 17% HL 20% 12% SME Business 5% ABF-Agri 25% 26% Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 ABF-Used Assets 6% ABF-CE 8% • Continued focus on core product
Slide 41: Assets Under Management (AUM) – Ind AS
Assets Under Management (AUM) – Ind AS 15,894 16,623 15,605 16,507 15,605 16,507 1019, 1573, 17% 17% 18% 7% 18% 10% 12% 13% 12% 14% 17% 15% 17% 12% 14,586, 14,934, 16% 17% 15% 18% 93% 90% 6% 7% 6% 7% 8% 9% 7% 10% 24% 22% 25% 21% FY18 Q2 FY19 Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 ABF-UV/Cars ABF-CV ABF-CE
Slide 42: Assets Quality (Ind AS)
Assets Quality (Ind AS) Particulars FY18 Q2 FY19 Q3 FY18 Q3 FY19 Gross Stage 1 and Stage 2 Assets 13,384 13,866 13,023 13,988 ECL Provision – Stage 1 and 2 388 348 407 333 Stage 1 and Stage 2 Coverage Ratio (%) 2.9% 2.5% 3.1% 2.4% Gross Stage 3 Assets 1,373 1,452 1563 946 ECL Provision – Stage 3 748
Slide 43: Key Ratios – Ind AS
Key Ratios – Ind AS NIM Analysis (% of AUM) NCL (% of AUM) 9.0% 8.4% 7.8% 7.8% 2.3% 2.4% 2.1% 1.3% FY 18 Q2 FY19 Q3 FY18 Q3 FY19 FY 18 Q2 FY19 Q3 FY18 Q3 FY19 NIM: (Total Income (incl. Other Income) – Interest Expenses) / Average AUM NCL: Net Credit Loss / Average AUM Opex Ratio Cost / Net Income (%
Slide 44: Liability Profile
Liability Profile On Balance Sheet 12,187 12,165 12,043 12,017 Debt 11% 9% 10% 9% 19% 28% 22% 24% 70% 63% 68% 67% FY18 Q2 FY 19 Q3 FY18 Q3 FY 19 Banks Debt Capital Markets Others Instrument Rating • Diversified liability sources limit concentration risk, allows stable flow of funds, stable rating -
Slide 45: Capital and Profitability – Ind AS
Capital and Profitability – Ind AS Net Worth Capital Adequacy* 1,972 2,580 1,891 2,662 19.1% 22.1% 19.3% 22.6% 54 54 4.9% 4.9% 47 47 6.4% 7.1% 2,526 2,608 1925 1,843 17.2% 17.7% 12.7% 12.3% FY18 Q2 FY19 Q3 FY18 Q3 FY19 FY18 Q2 FY19 Q3 FY18 Q3 FY19 Reserves and Surplus Share Capital Tier 1 Tier 2 ROA
Slide 46: Consolidated Profit & Loss Statement – Ind AS
Consolidated Profit & Loss Statement – Ind AS Ind AS INR Crs Q3 FY19 Q2 FY19 Q3 FY18 YTD FY19 YTD FY18 FY18 Net Revenue 347 365 303 1,052 937 1,262 Expenses 175 171 150 513 439 605 Operating Profit 172 194 153 540 498 656 Net Credit Loss 53 87 94 224 334 367 Profit Before Tax 120 107 59 315 164 289
Slide 47: Leadership Team & Shareholding Structure
1 Business Overview 2 Transformed Business Strategy to drive sustainable growth 3 Financial Performance – Q3 FY19 4 Leadership Team & Shareholding Structure 5 Annexures Note: We have used various abbreviations, nomenclature, financial & non-financial ratios in this presentation. These may differ fro
Slide 48: Board of Directors
Board of Directors Promoter Directors Non Promoter Directors Serves on the Boards of Mayank • Supports policy He is on the Board of Narayan K various reputed Indian Poddar formulation and guidance companies including Satya Brata Seshadri companies including West Chairman to the Management/Board Clea
Slide 49: Key Management Team
Key Management Team Sanjay Chamria Business CEO Support Functions VC and MD Kaushik Banerjee Manish Jaiswal Rajive Kumaraswami Chirag Jain Rajneesh Mishra Deepak Patkar Kailash Baheti President & CEO - ABF MD & CEO - HFC, MD & CEO-MHDI Chief Operating Chief People Officer Chief Risk Officer Chief Fi
Slide 50: Holding Structure & Shareholding Pattern
Holding Structure & Shareholding Pattern Magma Fincorp Limited 100% 41% Magma Housing Finance Magma HDI General Limited Insurance Company Limited Share Price Performance Shareholding (31-Dec-2018) 200 Public, Promoters, 32.05% 24.42% 150 100 50 Overseas 0 Bodies, Domestic 12.24% Investors, Average s
Slide 51: Thank You
THANK YOU Investing in the smallest dream
Slide 52: Glossary
Glossary AUM Assets Under Management: On-Book & Off-Book Loan Assets Average AUM (AAUM) Average of opening and closing AUM FOS / Field Officer Feet on Street ABF Asset Backed Finance AHF Affordable Housing Finance HL Home Loan LAP Loan against property SME Small & Medium Enterprises NDSA Non-dealer
Slide 53: Annexures
1 Business Overview 2 Transformed Business Strategy to drive sustainable growth 3 Financial Performance – Q3 FY19 4 Leadership Team & Shareholding Structure 5 Annexures Note: We have used various abbreviations, nomenclature, financial & non-financial ratios in this presentation. These may differ fro
Slide 54: Magma Fincorp Ltd. (MFL) Standalone Profit & Loss Statement
Magma Fincorp Ltd. (MFL) Standalone Profit & Loss Statement Ind AS INR Crs Q3 FY19 Q2 FY19 Q3 FY18 YTD FY19 YTD FY18 FY18 Net Revenue 311 331 279 954 847 1,137 Expenses 155 152 137 457 400 552 Operating Profit 157 179 141 498 447 585 Net Credit Loss 51 85 94 220 326 347 Profit Before Tax 105 94 48 2
Slide 55: Magma Housing Finance Ltd. (MHFL) Profit & Loss Statement
Magma Housing Finance Ltd. (MHFL) Profit & Loss Statement Ind AS INR Crs Q3 FY19 Q2 FY19 Q3 FY18 YTD FY19 YTD FY18 FY18 Net Revenue 36 33 25 98 90 125 Expenses 20 19 13 56 38 53 Operating Profit 15 15 12 42 52 72 Net Credit Loss 1 2 0 4 8 20 Profit Before Tax 14 13 12 38 43 52 Tax 4 4 4 10 15 18 Pro
Slide 56: Magma HDI General Insurance Company (MHDI) Profit & Loss Statement
Magma HDI General Insurance Company (MHDI) Profit & Loss Statement Ind AS INR Crs Q3 FY19 Q2 FY19 Q3 FY18 YTD FY19 YTD FY18 FY18 Gross Written Premium 267 208 124 667 365 560 Net Written Premium 154 157 88 293 251 376 Net Earned Premium 134 115 84 197 249 335 Net Claims Incurred 112 89 71 106 204 27
Slide 57: Rewards & Recognition
Rewards & Recognition Corporate Social Responsibility Magma has received several awards in the last few years for its CSR activities. Among them below are our last 4 achievements • Asian Customer Engagement Forum & Awards - Best CSR Event, 2018 (M Care) • BT CSR Excellence Awards - Innovation in CSR
Slide 58: Community Obsession: Corporate Social Responsibility
Community Obsession: Corporate Social Responsibility Health & Wellbeing Promotion of Education • Free medical Consultation to approx.100,000 • M Scholar Total strength of truckers through health check up camps students enrolled under the • Renovation of Mid Day meal kitchen room in scheme would reac
Slide 59: Disclaimer
Disclaimer This presentation has been prepared by Magma Fincorp Limited (the “Company”), for general information purposes only, without regard to any specific objectives, suitability, financial situations and needs of any particular person and does not constitute any recommendation or form part of a
Slide 60: Disclaimer (Contd.)
Disclaimer (Contd.) The information contained in these materials has not been independently verified. None of the Company, its directors, promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person accepts any responsibility or liability what