Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q4 FY2021 Earnings Presentation
49 slides from Manappuram Finance's earnings presentation, May 26, 2021
Slide 1: Cover letter to stock exchanges
Ref: Sec/SE/50/2021-22 26th May 2021 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers 5th Floor, Exchange Plaza Dalal Street Bandra (East) Mumbai- 400001 Mumbai – 400051 Scrip Code: 531213 Scrip Code: MANAPPURAM Dear Madam/Sir, Sub: Investor Presentation for the Quarter
Slide 2: Manappuram Finance Limited Investor Presentation Q4 FY2021
Gold Finance Micro Finance Housing MANAPPURAM FINANCE LIMITED Finance Investor Presentation Q4 FY2021 Vehicle Finance MSME
Slide 3: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position,
Slide 4: Table of Contents
TABLE OF CONTENTS 04 07 11 Vision and Strategy 5 Year Plan Financial Snapshot 21 37 46 Business Performance Creating a Difference Corporate Information 3
Slide 5: Vision: To become financial partner of choice for under-banked customers
VISION: TO BECOME FINANCIAL PARTNER OF CHOICE FOR UNDER-BANKED CUSTOMERS ACROSS THEIR LIFECYCLE MANAPPURAM TODAY COMPANY DNA • Operational rigor: Company has perfected the art of • #2 lender in gold loans in India (core product), with a managing appraisal, custodial and valuation risks that trusted
Slide 6: Product strategy: focus on serving under banked customers
PRODUCT STRATEGY: FOCUS ON SERVING UNDER BANKED CUSTOMERS WITH GOOD RISK ADJUSTED YIELDS Launch Avg. Indicative %Self- INR 272,242m Year Ticket Yield Band Employed Description and Rationale 70% ~INR • Only focused on granular, low ticket retail customers and not on jeweler loans 1992 18% -26% 66% 44
Slide 7: Product diversification journey
PRODUCT DIVERSIFICATION JOURNEY 1992 1995 2014 2014 2014 2015 2020 Incorporation IPO Launched Launched Launched Acquired Piloting of Company short tenor CV Loans Affordable Asirvad Secured Gold Loans Home Loans MFI SME Loans CV Loans Affordable Home Loans Asirvad MFI • Focus on used CV segment (LCVs
Slide 8: The Road Ahead
THE ROAD AHEAD
Slide 9: Stakeholder value creation
STAKEHOLDER VALUE CREATION Strong Corporate Vision-oriented Stock Governance leadership DIVDEND EPS (CAGR PAT (CAGR DIVDEND (In FY21) Last 5 years) Performance 1st Last 5 years) (In FY20) Apr’ 20– 31st Mar ‘21 Navigating A disciplined opportunities 105.7 balance sheet across new 22.8% 96.4% 24% geog
Slide 10: Year plan: consistent AUM growth of 15-20% with 25% cross cycle ROE
5 YEAR PLAN: CONSISTENT AUM GROWTH OF 15-20% WITH 25% CROSS CYCLE ROE o Grow AUM at c.10-15% while maintaining granularity Gold Loanso Focus on new channels incl. door-step, DSA and online o Continue to drive productivity and efficiency to improve RoA by 100-150 bps o Cross cycle AUM growth of c.20%
Slide 11: Sharp focus on ESG
SHARP FOCUS ON ESG Sustainability is integral to Environment: Social: Governance : Manappuram’s corporate strategy Energy Consumption, Talent Management, Ethical Practices, Strict Materials Diversity and Inclusion, Internal Control, and our vision of creating value for Consumption and Community Inve
Slide 12: Financial Highlights Q4 & FY2021
FINANCIAL HIGHLIGHTS Q4 & FY2021
Slide 13: Key performance highlights for Q4 & FY2021
KEY PERFORMANCE HIGHLIGHTS FOR Q4 & FY2021 • Spot price of gold declined by 12% QoQ and by 21% from peak levels witnessed in 2QFY21 • Given the 3M average contracted loan duration for Manappuram, a significant proportion of loans disbursed at the time of peak gold price Strong risk management at a i
Slide 14: Consolidated financial overview – Q4 & FY2021
CONSOLIDATED FINANCIAL OVERVIEW – Q4 & FY2021 Particulars (Rs. Mn) Q4FY21 Q4FY20 Y-o-Y % Q3FY21 Q-o-Q % FY21 FY20 Y-o-Y % CONSOLIDATED AUM (Rs. Bn) 272 252 7.9% 276 -1.5% 272 252 7.9% NET INTEREST INCOME 10,984 10,245 7.2% 10,866 1.1% 41,116 36,331 13.2% OPEX 3,777 3,807 -0.8% 3,553 6.3% 13,996 14,7
Slide 15: Consolidated operational overview – Q4 & FY2021
CONSOLIDATED OPERATIONAL OVERVIEW – Q4 & FY2021 Particulars Q4FY21 Q4FY20 Y-o-Y % Q3FY21 Q-o-Q % FY21 FY20 Y-o-Y % GOLD AUM (Rs Bn) 191 170 12.4% 202 -5.6% 191 170 12.4% GOLD TONNAGE 65.3 72.4 -9.7% 68.2 -4.3% 65.3 -9.7% 72.4 GOLD BRANCHES (Nos) 3,524 3,529 -0.1% 3,524 0.0% 3,524 -0.1% 3,529 GOLD CU
Slide 16: Consolidated AUM updates for Q4 & FY2021
CONSOLIDATED AUM UPDATES FOR Q4 & FY2021 Q4FY21 Q4FY20 Y-o-Y % Q3FY21 Q-o-Q % FY21 FY20 Y-o-Y % GOLD LOANS (Rs Mn) 1,90,770 1,69,672 12.4% 2,02,116 -5.6% 1,90,770 1,69,672 12.4% MICROFINANCE (Rs Mn) 59,846 55,026 8.8% 53,577 11.7% 59,846 55,026 8.8% HOUSING FINANCE (Rs Mn) 6,663 6,296 5.8% 6,334 5.2
Slide 17: Consolidated profit & loss statement for Q4 & FY2021
CONSOLIDATED PROFIT & LOSS STATEMENT FOR Q4 & FY2021 Particulars (Rs Mn) Q4FY21 Q4FY20 Y-o-Y % Q3FY21 Q-o-Q % FY21 FY20 Y-o-Y % Closing AUM (Rs Bn) 272 252 7.9% 276 -1.5% 272 252 7.9% Income from Operations 16,223 16,053 1.1% 16,438 -1.3% 63,306 54,653 15.8% Finance expenses 5,239 5,808 -9.8% 5,573
Slide 18: Consolidated balance sheet for year ended FY2021
CONSOLIDATED BALANCE SHEET FOR YEAR ENDED FY2021 Particulars (Rs Mn) Mar-21 Mar-20 YoY % Dec-20 QoQ % Cash & Bank Balances 29,124 36,668 -20.6% 27,236 6.9% Investments 3,380 905 273.6% 3,476 -2.7% Loans & Advances 2,65,076 2,42,971 9.1% 2,68,927 -1.4% Fixed Assets 2,942 3,308 -11.0% 3,021 -2.6% Othe
Slide 19: Standalone borrowing profile for Q4 & FY2021
STANDALONE BORROWING PROFILE FOR Q4 & FY2021 BORROWING AS ON 31st Mar, 2021 = Rs. 176,403 Mn DOMESTIC RATING Q4FY20 Q3FY21 Q4FY21 Borrowing Mix Amount % Amount % Amount % Long Term AA (Stable) WCDL/CC 69,025 39.1% 55,294 29.1% 42,164 23.9% Commercial Paper A1 Term Loan 30,062 17.0% 33,662 17.7% 31,3
Slide 20: Standalone result analysis Q4 & FY2021
STANDALONE RESULT ANALYSIS Q4 & FY2021 GOLD LOAN AUM (Rs. Bn) NET PROFIT (Rs. Mn) CAGR:24% CAGR:14% 16,979 197 202 191 191 170 177 12,303 130 111 117 7,260 7,905 6,895 4,056 4,653 4,580 3,691 FY17 FY18 FY19 FY20 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY17 FY18 FY19 FY20 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 NE
Slide 21: Standalone result analysis Q4 & FY2021
STANDALONE RESULT ANALYSIS Q4 & FY2021 NET YIELD (%) OPEX TO AUM % 25.4% 25.3% 25.2% 25.0% 24.9% 25.1% 9% 24.8% 24.7% 8% 24.2% 7% 7% 6% 5% 6% 6% 6% FY17 FY18 FY19 FY20 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY17 FY18 FY19 FY20 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 NPA ANALYSIS % CAPITAL ADEQUACY RATIO % 2.0% 1
Slide 22: Segmental Performance
SEGMENTAL PERFORMANCE
Slide 23: Gold AUM update for Q4 & FY2021
GOLD AUM UPDATE FOR Q4 & FY2021 AVG. LOAN TICKET SIZE (Rs ‘000) CUSTOMER BASE(Mn) GOLD AUM PER BRANCH (Rs Mn) 70 AVG. LOAN TICKET SIZE (Rs ‘000) Customer Base 3 60 CAGR:10% 2.6 2.6 2.5 2.6 2.6 2.6 2.5 2.4 56 57.4 50 2.3 54.1 54.1 2.1 2 48.1 50.3 40 44.6 46.5 46.3 44.6 42.6 38.5 38.4 1.5 30 33.6 33.8
Slide 24: Gold AUM update for Q4 & FY2021
GOLD AUM UPDATE FOR Q4 & FY2021 GOLD AUM (Rs. Bn) BRIDGE c GOLD PRICES (Rs / gm) Q3FY21 Q4FY21 -5.6% Gold prices declined by 12% 202 QoQ and by 21% from peak 21 191 -6% -12% -4 -5 levels (2QFY21) 4,674 4,405 4,670 -23 4,110 Quarter average Quarter closing a b c d d LTV MOVEMENT (%) Q3FY21 Auction Wi
Slide 25: Gold loan growth levers
GOLD LOAN GROWTH LEVERS Online Gold Loan Digital Marketing o Stable net yields despite newer entrants like fintechs (higher ticket size) and focus by banks Local Marketing o Low interest rate sensitivity given small ticket size, short tenor and Activities convenience of product Celebrity Endorsement
Slide 26: Gold AUM pan India presence (Q4 FY2021)
GOLD AUM PAN INDIA PRESENCE (Q4 FY2021) North 17% East 10% State Branch State Branch Jammu & Kashmir 10 Assam 18 Himachal Pradesh 13 Bihar 24 Chandigarh 4 Tripura 2 Delhi 59 Jharkhand 12 Punjab 75 West Bengal 105 Uttarakhand 8 Chhattisgarh 51 GOLD AUM Rural Urban Mix – Q4FY21 Haryana 64 Odisha 150 U
Slide 27: Online gold loan business
ONLINE GOLD LOAN BUSINESS Avg. ticket size (Rs 000) CAGR:4% ONLINE GOLD LOANS SUPERIOR FOR CUSTOMERS 56.5 55.5 54.2 50.2 53.0 51.2 45.5 44.6 43.9 1 First NBFC to launch Online Gold Loan (OGL) in September 2015 FY17 FY18 FY19 FY20 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Facility enables customers to avail a
Slide 28: Asirvad Microfinance results for Q4 & FY2021
ASIRVAD MICROFINANCE RESULTS FOR Q4 & FY2021 Particulars (Rs in Mn) Q4FY21 Q4FY20 Y-o-Y % Q3FY21 Q-o-Q % FY21 FY20 Y-o-Y % Closing AUM 59,846 55,026 8.8% 53,577 11.7% 59,846 55,026 8.8% Income from Operations 2,787 2,826 -1.4% 2,559 8.9% 10,530 10,551 -0.2% Finance expenses 1,060 1,081 -1.9% 1,096 -
Slide 29: Asirvad Microfinance result analysis for Q4 & FY2021
ASIRVAD MICROFINANCE RESULT ANALYSIS FOR Q4 & FY2021 ASIRVAD AUM (RS Mn) CAPITAL ADEQUACY RATIO % CAGR:35% 59,846 59,846 31.7% 55,026 53,577 50,383 26.9% 25.7% 49,710 25.4% 23.3% 24.0% 23.3% 38,408 20.6% 15.2% 24,372 17,959 FY17 FY18 FY19 FY20 FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY17 FY18 FY19 FY20 FY2
Slide 30: Asset quality metrics
ASSET QUALITY METRICS COLLECTION EFFICIENCY Without pre-payment 97% 97% 105% 99% 100% 101% 87% 91% 89% Collection efficiency Jan-20 Feb-20 Sep-20 Oct 20* Nov 20* Dec-20 Jan-21 Feb-21 Mar-21 returned to pre- With pre-payment COVID levels 100% 101% 96% 108% 103% 104% 105% 91% 92% Jan-20 Feb-20 Sep-20
Slide 31: Business and productivity metrics
BUSINESS AND PRODUCTIVITY METRICS GROWTH PRODUCTIVITY AUM (INR mn) Number of loan officers CAGR:+35% CAGR:+25% 55,026 59,846 38,408 4,490 3,584 24,372 2,276 2,674 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 Number of borrowers (mn) AUM / branch (INR mn) CAGR:+24% CAGR:+17% 52.8 56.4 2.4 2.4 40.8 1.5 1.8
Slide 32: Asirvad Microfinance pan India presence (Q4FY2021)
ASIRVAD MICROFINANCE PAN INDIA PRESENCE (Q4FY2021) East MFI AUM - STATEWISE BREAKUP North State Branch State Branch Tamil Nadu 21% Bihar 98 Chandigarh 1 Sikkim 1 West Bengal 11% Punjab 31 Assam 15 Bihar 11% Haryana 24 West Bengal 104 Karnataka 10% Rajasthan 60 Jharkhand 50 Uttar Pradesh 7% Uttarakha
Slide 33: Asirvad Microfinance liabilities overview for Q4FY2021
ASIRVAD MICROFINANCE LIABILITIES OVERVIEW FOR Q4FY2021 BORROWING MIX (Rs m) COST OF FUNDS Q4FY20 Q3FY21 Q4FY21 Borrowing Mix 12.3% 11.8% 11.6% 11.6% 11.2% 11.1% 11.0% 10.7% 10.5% Amount % Amount % Amount % Term Loan from 27,737 62% 18,334 49% 24,327 53% Banks and Fis Refinance 4,232 9% 4,265 11% 6,9
Slide 34: Housing finance business update for Q4 & FY2021
HOUSING FINANCE BUSINESS UPDATE FOR Q4 & FY2021 AUM EVOLUTION (Rs Mn) AUM MIX (%) Home Loan Home Construction LAP ATS (INRL) Yield CAGR:21% 25% 26% 27% 26% 26% 26% 27% 6.3 18% 6,663 6,663 6,296 6,273 6,206 6,334 5,188 24% 30% 30% 31% 36% 32% 36% 6.5 16% 3,747 3,104 51% 44% 44% 43% 10.4 14% 38% 42% 3
Slide 35: Housing finance business strategy
HOUSING FINANCE BUSINESS STRATEGY 4: Growth drivers for future expansion • Riding on the parent’s brand equity and pan India presence for scaling up the business. • Low-cost operation model based on co-location with parent branches • Investment in training and development of human resource through o
Slide 36: Vehicle and equipment finance business update for Q4 & FY2021
VEHICLE AND EQUIPMENT FINANCE BUSINESS UPDATE FOR Q4 & FY2021 AUM EVOLUTION (Rs Mn) AUM MIX (%) CV TW PV ATS (INRL) Yield CAGR:36% 8% 9% 10% 10% 12% 11% 10% 23% 24% 20% 23% 21% 19% 20% 4.0 18% 13,443 12,703 11,146 10,526 10,623 10,526 0.5 24% 9,880 69% 66% 70% 68% 67% 70% 70% 6,254 7.1 18% 3,058 FY1
Slide 37: Vehicle and equipment finance business strategy
VEHICLE AND EQUIPMENT FINANCE BUSINESS STRATEGY PROFIT OPTIMIZERS Increase penetration into Rural and Semi Urban locations Analytics Mobility Solution Deep Penetration Covering 3000+ Co-located Gold loan branches for Use of Analytics for On the go solution Deeper penetration in collection and market
Slide 38: Creating difference
CREATING DIFFERENCE Manappuram Snehabhavanam - Raincoats for Active fishermen's 20 new houses will be constructed at Total 20 Raincoats for 1200 televisions donated fishermen in coastal area 20 wards under for educational of Trissur District Valapad purposes (Fishermen Gramapanchayath Registered in
Slide 39: About Manappuram
ABOUT MANAPPURAM • Incorporated in 1992, Manappuram is Non-Banking Financial Company (NBFC) offering a diversified product portfolio including gold loans, microfinance loans, vehicle and equipment finance, home loan finance, on-lending and insurance brokerage business • Currently has 4,600 branches
Slide 40: Resilience across credit and economic cycles
RESILIENCE ACROSS CREDIT AND ECONOMIC CYCLES Total AUM (Rs Bn) Net Profit (Rs Mn) Net Profit (Rs Mn) ROE 2,50 0 20.3% 21. 0% 180 160 2,00 0 18.2% 19.1% 19.3% 20. 5% 20. 0% 140 158 166 19. 5% 120 137 147 1,50 0 19. 0% 100 After-effects of 80 1,00 0 18. 5% 18. 0% demonetization 60 40 500 17. 5% 20 1,6
Slide 41: Superior process and product innovation
SUPERIOR PROCESS AND PRODUCT INNOVATION WITH… A strong operational risk management that sets Manappuram apart.. 3 month product resulting in lower credit losses o Pioneer in installing cellular vaults across all branches o Robust branch security infrastructure including CCTV cameras, panic 3 month p
Slide 42: Building digital capability for our various client offerings
BUILDING DIGITAL CAPABILITY FOR OUR VARIOUS CLIENT OFFERINGS • The company has been dependent on its IT department (600+ engineers) on multiple fronts over the years. This is an opportunity to integrate our IT capabilities further into our business to amplify the revenue and verticals on various bus
Slide 43: Brand play - Together we win
BRAND PLAY - TOGETHER WE WIN Manappuram aspires Associate the brand with a Using a PAN India integrated To ensure steadfast trust, to represent humanity personality that reflects the marketing strategy to Manappuram has implemented a in an open and brand's vitality and persona, maximise an already h
Slide 44: Well capitalized, prudent liabilities strategy with reducing cost of funds
WELL CAPITALIZED, PRUDENT LIABILITIES STRATEGY WITH REDUCING COF Access to diversified sources of funding (Consolidated, Rs m) Cost of borrowing (Consolidated) Q4FY20 Q3FY21 Q4FY21 Borrowing Mix 9.8% Amount % Amount % Amount % 9.3% 9.2% 9.1% WCDL / CC 69,133 31% 55,385 24% 42,303 19% Term Loan 71,28
Slide 45: Independent board and deep management bench
INDEPENDENT BOARD AND DEEP MANAGEMENT BENCH Key Managerial Personnel Mr. V. P. Nandakumar Mr. Raja Vaidhyanathan Mr. Jeevandas Narayan Managing Director and CEO MD - MFI MD – Housing Finance o Postgraduate in Science o Erstwhile Promoter of Asirvad Microfinance o Erstwhile MD of State Bank of Travan
Slide 46: Pan India MFI business with granular asset base and strong risk practices
vention and early detection stringent vs. MFIN PAN INDIA MFI BUSINESS WITH GRANULAR ASSET BASE AND STRONG RISK PRACTICES Financial Risk Borrowings Treasury and Liquidity ➢ Borrowing committee working ➢ Active treasury management under the supervision of the - Selecting short term savings Board to ef
Slide 47: Company history and key milestones
COMPANY HISTORY AND KEY MILESTONES o Incorporated at Thrissur o Fullerton India/Temasek sanctions credit limit o Acquires 100% ownership of Manappuram o First public issue of shares for of INR500m, enhances the limit to INR4.8bn Insurance Brokers INR17.5m with listing on within a year o Reaches 4.5m
Slide 48: Shareholding and stock performance
SHAREHOLDING AND STOCK PERFORMANCE Shareholding Pattern (as on 31st March, 2021) Stock Data Top Shareholders holding more than 1% (other 17% than promoters) % Market Cap as on 21-May-21 ₹ 13,512.2 Crs QUINAG ACQUISITION (FPI) LTD 9.9 1% Stock Price as on 21-May-21 159.70 35% DSP INVESTMENT MANAGERS
Slide 49: Thank you
THANK YOU Mrs. Bindu A. L Mr. Susil Kumar Mishra Mr. Nikunj Seth / Mr. Vishal Mehta CFO Head – Investor Relations & Treasury Contact No : +91 9773397958/ +91 9326478472 Contact No : +914873050000 Contact No : +919967405163 E-mail – nikunj@s-ancial.com / vishal@s-ancial.com Email – bindhu@manappuram.