Mas Financial Services Ltd. · NSE:MASFIN
Mas Financial Services — Q4 FY19 Earnings Presentation
48 slides from Mas Financial Services's earnings presentation, May 8, 2019
Slide 1: Cover letter to stock exchanges
cffellJ\J& FINANCIAL SERVICES LIMITED <I1u IPawer of<Distri.iution May 08, 2019 MFSL/SEC/EQ/2019/26 To, To, General Manager The Manager, National Stock Exchange of India Limited BSE Limited Exchange Plaza Phiroze Jeejeebhoy Towers Plot No. C/1, G Block Dalal Street Bandra-Kurla Complex Mumbai - 4000
Slide 2: Investor Presentation Q4 FY19
<J'lie (power of (J)istri6ution INVESTOR Corporate – PRESENTATION Presentation Q4 FY19 REGISTERED OFFICE MAS Financial Services Limited 6, Ground Floor, Narayan Chambers, Ashram Road, Ahmedabad-380009
Slide 3: Disclaimer
Disclaimer 'l1ie <l"ower of<Distri6uti.cm This presentation has been prepared by and is the sole responsibility of MAS Financial Services Limited (together with its subsidiary MAS Rural Housing & Mortgage Finance Limited). By accessing this presentation, you are agreeing to be bound by the trailing
Slide 4: Table of Content
Table of Content 'l1ie <l"ower of<Distri6uti.cm Company Overview 5 Mission, Vision and Belief 6 Milestones 7 Product Offerings 8 Credit Assessment & Risk Management Framework 10 Retail Presence & Distribution Network 11 Unique and Robust Distribution Network Through NBFC Partners 12 Liability Manage
Slide 5: Note on adoption of Indian Accounting Standards
Given the first year of adoption of Indian Accounting Standards, for better understanding of the performance of the comparative periods we hereby provide financials highlights as per previous I-GAAP and IND-As section has been mentioned separately. SLIDE: SLIDE: 4 4
Slide 6: Company Overview
Company Overview '11i.e a>ower of'1Jistn"6ut:ion SPECAILISED IN IN RETAIL RETAIL LENDING LENDING SINCE 20 YEARS Diversified Product Portfolio Strong Retail Presence & Wide Distribution Network 6 states and Sourcing Intermediaries 'D' Bi,&. Micro-Enterprise loans(MEL) oO SME loans NCT of Delhi 5,00,0
Slide 7: Vision, Mission & Belief
Vision, Mission & Belief 'l1ie <l"ower of<Distri6uti.cm VISION To be one of the most efficient distributors of financial services and create value on a very large scale. MISSION To constantly endeavour, to attain excellence and create a very wide Financial distribution network and to be catalyst; in
Slide 8: Major events and milestones in the history
Major events and milestones in the history '1ne <l"ower of<Distri6uti.cm AUM crossed INR 50 Bn. 2019 Bank loan rating upgraded to “ACUITE AA -” with Stable outlook and Short term rating assigned as ACUITE A1+. 2018 Listing of Equity Shares on Bombay Stock Exchange & National Stock Exchange 2017 AUM
Slide 9: Diversified product offerings presenting significant growth opportunities
Diversified product offerings presenting significant growth opportunities -me <Power' of <Distri6ution MAS focuses on serving the underserved credit needs of mid and low income group segments Micro-Enterprise Loans SME Loans Loans of up to INR 300,000 to Micro-Enterprises Loans of up to INR 50 m
Slide 10: Recent Growth in Overall AUM
Recent Growth in Overall AUM 'l1ie <l"ower of<Distri6uti.cm MAS’ has exhibited steady growth in AUM over the years AUM by Product Category (INR Mn) Segment growth YOY March-18 vs 1,543 March-19 4,619 Commercial Vehicle loans 5.50% 1,462 13,358 3,624 2-Wheeler loans 27.44% 1,221 10,295 2,854 SME loan
Slide 11: Robust and Comprehensive Credit Assessment and Risk Management Framework
Robust and Comprehensive Credit Assessment and Risk Management Framework 'l1ie <l"ower of<Distri6uti.cm MAS aims to give credit where it is due with the dictum of adherence and adaptability Robust credit assessment Credit assessment process overview by Product Micro-Enterprise Loans Analysis of bu
Slide 12: Retail Presence and Distribution
Retail Presence and Distribution '11ie <Power of <Distri6ution 500,000+ active customers across 3,377 locations in Rural, semi urban and urban locations Presence in the high growth markets in West and South Delhi NCT MAS has expanded to 78 branches in 6 Rajasthan J states and NCT Delhi • Branch –
Slide 13: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm Efficient last mile delivery of credit Value chain approach has proven to across its product range namely MEL, be the most potent one to solve SME, 2 Wheeler and Commercial informality because of proximity to
Slide 14: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm Operational Dynamics Key Criteria for starting relationship: Promoters Product Operational Financial Growth Strategy Capital Base Evaluation Alignment Excellence Performance Credit Assessment Pre-Engagement D
Slide 15: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm MAS NBFCs • Widens its network while maintaining a • Value addition in improving their systems relatively lower risk profile and operations which helps in scalability and Sustainability of business. • Establi
Slide 16: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through NBFC Partners 'l1ie <l"ower of<Distri6uti.cm TRACK RECORD • Started with 1 NBFC in 2008, currently • Have grown at a CAGR of around 35% having relationship with more than 100 in last five years across our product range such NBFCs having virtual presence
Slide 17: Retail focused partner NBFCs – An Overview
Retailed focused partner NBFCs – An Overview '1ne <l"ower of<Distri6uti.cm Retail focused small regional NBFCs inevitable for last mile delivery of credit. Adequately Capitalized Experienced Management Matching ALM with no liquidity issue for repayment. Demonstrated their capabilities during the rec
Slide 18: Liability Management
Liability Management '1ne <l"ower of<Distri6uti.cm Borrowing Mix March 2019 18% 1% DIRECT ASSIGNMENT 51% CASH CREDIT 29% TERM LOAN SUB DEBT • Efficient liability management ensures : • Adequate liquidity round the year. • No asset liability mismatch. • Tie up for the fund requirement of the whole fi
Slide 19: Liability Management
Liability Management 'l1ie <l"ower of<Distri6uti.cm Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Company withstood the litmus test very successfully also in this one of the most challenging year – A testimony to its very efficien
Slide 20: Consistent Growth in AUM and PAT
Consistent Growth in AUM and PAT '11ie <l"ower of<Distri6ution Asset Under Management (AUM) In INR Mn 52,928 41,145 31,561 25,650 20,052 13,910 10,123 3,884 5,118 6,909 1,510 2,312 2,597 2,682 20 Mar-1996 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-
Slide 21: Key Achievements Highlights – FY19 vs FY18
Key Achievements Highlights – FY19 vs FY18 'TM �rof<Distri6ution AUM PAT NII Net NPA OER FY19 INR 52,928 Mn INR 1,432 Mn INR 3,525 Mn 0.86 % 1.64% 29% 39% 28% 6% 17% FY18 INR 41,145 Mn INR 1,034 Mn INR 2,760 Mn 0.91 % 1.97% ABBREVIATIONS AUM ASSET UNDER MANAGEMENT PAT PROFIT AFTER TAX NII NET INTERE
Slide 22: Key Achievements Highlights – Q4 FY19 vs Q4 FY18
Key Achievements Highlights – Q4 FY19 vs Q4 FY18 'TM �rof<Distri6ution AUM PAT NII Net NPA OER Q4 FY19 INR 52,928 Mn INR 388 Mn INR 931 Mn 0.86 % 1.46% 29% 30% 23% 6% 21% Q4 FY18 INR 41,145 Mn INR 299 Mn INR 757 Mn 0.91 % 1.84% ABBREVIATIONS AUM ASSET UNDER MANAGEMENT PAT PROFIT AFTER TAX NII NET IN
Slide 23: Financial Performance Trends – Q4 FY19
Financial Performance Trends – Q4 FY19 'l1ie <l"ower of<Distri6uti.cm In INR Mn Robust Performance ASSETS UNDER MANAGEMENT (AUM) NET WORTH 52,928 8331 41,145 7139 31,561 3769 Mar-17 Mar-18 Mar-19 Mar-17 Mar-18 Mar-19 BORROWING ON & OFF BOOK AUM 26,034 17,848 38% 39% 39% 15,129 OFF BOOK ON BOOK 62% 6
Slide 24: Financial Performance Trends – Q4 FY19
Financial Performance Trends – Q4 FY19 'l1ie <l"ower of<Distri6uti.cm In INR Mn Consistent Rise in … REVENUE NET INTEREST INCOME (NII) 5,505 3,525 4,279 2,760 3,415 1,902 1,474 931 1,135 757 FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 PROFIT BEFORE TAX (PBT) PROFIT AFTER TAX
Slide 25: Financial Performance Trends – Q4 FY19
Financial Performance Trends – Q4 FY19 'l1ie <l"ower of<Distri6uti.cm Focus on Efficiency RETURN ON AVG. BALANCE SHEET ASSETS RETURN ON AVG. AUM (ROAUM)* (ROTA)* 4.52% 4.69% 4.41% 4.32% 3.04% 3.08% 3.04% 3.51% 2.84% 2.36% FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 RETURN ON
Slide 26: Financial Performance Trends – Q4 FY19
Financial Performance Trends – Q4 FY19 'l1ie <l"ower of<Distri6uti.cm OPERATING EXPENSE AS % OF NII* COST OF BORROWING (COB)* 31.75% 9.44% 8.67% 8.63% 8.40% 8.56% 25.92% 21.87% 22.88% 20.05% FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 Efficiently maintaining the quality of as
Slide 27: Financial Performance Trends – Q4 FY19
Financial Performance Trends – Q4 FY19 'l1ie <l"ower of<Distri6uti.cm Adequately Capitalized DEBT – EQUITY RATIO (DER) CAPITAL ADEQUACY RATIO (CAR) 31.29% 4.01 27.85% 3.13 22.94% 2.50 Mar-17 Mar-18 Mar-19 Mar-17 Mar-18 Mar-19 Healthy Coverage INTEREST COVERAGE RATIO (ICR) 2.29 2.04 2.11 2.10 1.68 FY
Slide 28: Quality of the portfolio: Consistently maintained
Quality of the portfolio : Consistently maintained 'l1ie <l"ower of<Distri6uti.cm Catalyst in growth of Entrepreneurs, not creating just borrowers NPA COMPARISON CHART* 1.50% 1.24% 1.09% 1.15% 1.00% 0.95% 0.91% 0.86% 0.50% 0.00% Mar-17 Mar-18 Mar-19 GROSS NPA NET NPA *NPA classification criteria For
Slide 29: Asset Under Management - Credit Quality
Asset Under Management - Credit Quality 'l1ie <l"ower of<Distri6uti.cm ASSET UNDER MANAGEMENT- DPD 8.00% 6.00% 0.68% 0.25% 0.31% 0.49% 0.48% 0.38% 1.14% 0.74% 1.18% 4.00% 1.23% 1.68% 1.30% 2.00% 2.86% 2.75% 2.65% 0.00% Mar-17 Mar-18 Mar-19 1 – 30 DPD 31 – 60 DPD 61 – 90 DPD 91 –120 DPD > 120 DPD All
Slide 30: Eminent Board of Directors
Eminent Board of Directors '1ne <l"ower of<Distri6uti.cm Extensive industry experience and deep domain knowledge of financial services sector Mr. Kamlesh Chimanlal Gandhi, aged 53 years, is the Founder, Chairman and Managing Director of MAS since inception. He visualized the opportunities in the
Slide 31: Eminent Board of Directors
Eminent Board of Directors 'T1ie 'l'owerofCDistn'6utWn Extensive industry experience and deep domain knowledge of financial services sector He has been associated with the Company as a Director since November 1995 and as an independent Director since April 2014 He is a management graduate with t
Slide 32: Reputed Marquee FIIs and DIIs have invested in MAS
Reputed Marquee FIIs and DIIs have invested in MAS '1ne <l"ower of<Distri6uti.cm Shareholding as on 31st March 2019 Marquee Non Promoter Shareholders TIMF HOLDINGS Foreign Portfolio SCHRODER INTERNATIONAL SELECTION FUND INDIAN Investor Mutual Fund OPPORTUNITIES Trust 2.79% Others ( 9.55% Including A
Slide 33: Going Forward
Going Forward……….. 'l1ie <l"ower of<Distri6uti.cm Asset Creation • To anchor to our belief that, growth with quality will enhance the shareholders value. • Anticipated growth for the next five years to be in the range of 20% - 30% and maintain healthy ROA and ROCE, which will be among the best in th
Slide 34: Financial Statement: FY17 – FY19
Financial Statement: FY17 – FY19 'l1ie <l"ower of<Distri6uti.cm PROFIT & LOSS STATEMENT INR Mn FY 2017 FY 2018 FY 2019 Total Revenue 3415 4279 5505 Expenses Finance Costs 1513 1518 1980 Operating Expense 604 715 771 Provisions and Loan Losses 267 464 552 Profit Before Tax 1031 1581 2202 Profit After
Slide 35: MAS Rural Housing & Mortgage Finance Limited – Subsidiary
MAS Rural Housing & Mortgage Finance Limited (MRHMFL) – Subsidiary MAS is targeting affordable housing finance segment through its subsidiary • MAS Rural Housing & Mortgage Finance Limited (“MAS Housing” or MRHMFL) is a non-deposit taking , NHB registered, housing finance institution. It was incorpo
Slide 36: Financial Performance Trends – Q4 FY19 MRHMFL
Financial Performance Trends – Q4 FY19 MRHMFL In INR Mn ASSETS UNDER MANAGEMENT (AUM) NET WORTH 2712 462 2040 1764 300 320 Mar-17 Mar-18 Mar-19 Mar-17 Mar-18 Mar-19 BORROWING GROSS NPA & NET NPA 2,546 0.41% 0.36% 0.36% 0.34% 1,678 0.27% 0.29% 1,469 Mar-17 Mar-18 Mar-19 Mar-17 Mar-18 Mar-19 All the a
Slide 37: Financial Performance Trends – Q4 FY19 MRHMFL
Financial Performance Trends – Q4 FY19 MRHMFL In INR Mn REVENUE NET INTEREST INCOME (NII) 333 141 273 118 233 103 95 36 72 33 FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 PROFIT BEFORE TAX PROFIT AFTER TAX 37 50 25 34 29 19 9 7 7 7 FY-17 FY-18 FY-19 Q4 FY18 Q4 FY19 FY-17 FY-18
Slide 38: Liability Management
Liability Management Borrowing Mix March 2019 0.91% 4.72% 0.01% NHB REFINANCE TERM LOAN CASH CREDIT 94.36% DIRECT ASSIGNMENT • Efficient liability management ensures : • Adequate liquidity round the year. • Minimum asset liability mismatch. • Tie up for the fund requirement of the whole financial ye
Slide 39: Liability Management
Liability Management Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Liability management was tested last quarter and the company could successfully demonstrate its capability of efficient liability management • Capital adequacy rat
Slide 40: IND-AS Impact – MAS Financial Services Limited
IND – AS IMPACT MAS FINANCIAL SERVICES LIMITED SLIDE: 39
Slide 41: Reconciliation of profit from I-GAAP to IND-AS
Reconciliation of profit from I-GAAP to IND - AS 'l1ie <l"ower of<Distri6uti.cm IN INR MN Particulars Q4 FY18 Q4FY19 FY 18 FY 19 Profit After Taxes (based on I-GAAP) 299.06 388.48 1,033.74 1,432.20 Impact of Adopting EIR on Financial Assets (20.85) (7.06) (9.21) (18.87) Impact of Adopting EIR on Fin
Slide 42: Assignment Income Reconciliation
Assignment Income Reconciliation 'l1ie <l"ower of<Distri6uti.cm IN INR MN Sr. No. Particulars FY2018 FY2019 Upfront spread booked on present value basis on portfolio assigned 1 800.57 941.45 during the year (based on INDAS) Income booked on asset created out of spread receivable (based on 2 36.81 49
Slide 43: Credit Quality
Credit Quality 'l1ie <l"ower of<Distri6uti.cm IN INR MN Mar-19 Mar-18 Particulars AUM Provision AUM Provision Stage 1 30,828.73 110.91 24,426.53 76.75 Stage 2 1,024.95 113.64 792.23 91.90 Stage 3# 662.25 135.44 485.21 46.46 TOTAL ON BOOK 32,515.93 359.99 25,703.97 215.11 Assigned Portfolio 20,867.82
Slide 44: IND-AS Impact – MAS Rural Housing and Mortgage Finance Limited
Credit quality Analysis – Provisioning Coverage as per IND - AS 'IM <l"ower of<Distri6uti.cm As on Dec 31, As on Dec 31, As on March 31, Particulars 2018 2017 2018 IND – AS IMPACT Total Assets Gross NPA (Stage 3) Less: ECL Provisions (Stage 3) MAS RURAL HOUSING AND Net NPA (Stage 3) Gross NPA% (Stag
Slide 45: Reconciliation of profit from I-GAAP to IND-AS
Reconciliation of profit from I-GAAP to IND - AS IN INR MN Particulars Q4 FY 18 Q4 FY 19 FY 18 FY 19 Profit After Taxes (based on I-GAAP) 6.93 6.93 24.99 36.61 Impact of Adopting EIR on Financial Assets (1.14) 0.26 (0.78) (2.61) Impact of Adopting EIR on Financial Liabilities (0.25) (0.80) (0.75) (2
Slide 46: Credit Quality
Credit Quality IN INR MN Mar-19 Mar-18 Particulars AUM Provision AUM Provision Stage 1 2,591.55 5.26 1,916.93 3.37 Stage 2 77.66 4.56 80.44 5.29 Stage 3 9.72 2.68 7.41 2.22 TOTAL ON BOOK 2,678.93 12.49 2,004.78 10.88 Assigned Portfolio 23.43 N/A 28.67 N/A TOTAL AUM 2,702.36 2,033.45 Particulars Mar-
Slide 47: Glossary
Glossary '11ie <l"ower of<Distri6ution AUM Assets Under Management EIR Effective Interest Rate Bn Billion ECL Estimated Credit Loss CCPS Compulsorily Convertible Preference Shares OCPS Optionally Convertible Preference Share COB Cost of Borrowing CRAR Capital To Risk Assets Ratio DPD Days Past Due F
Slide 48: Best Wishes – Investor Contact
'Ihe (l'ower of Distribution BEST WISHES INVESTOR CONTACT Name: Ankit Jain Designation: VP- Finance Contact No.: 079-41106682 Email ID: ankit_jain@mas.co.in
MAS Financial Services — Q4 FY19 Earnings Presentation on 6ix