Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q3 FY2024 Earnings Presentation
55 slides from Mahindra & Mahindra Financial Services's earnings presentation, Jan 30, 2024
Slide 1: Cover letter to stock exchanges - earnings presentation
Mahindra & Mahindra Financial Services Ltd. Mahindra Towers, 4th Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 30th January 2024 To, BSE Limited (Scrip Code: 532720) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001 National Stock Exchange of India Ltd
Slide 2: Quarter Result Update December 2023
Mahindra & Mahindra Financial Services Limited Quarter Result Update December - 2023 Regd. Office: Corporate Office: Gateway Building, Apollo Bunder, Mahindra Towers, 4th Floor, Mumbai-400 001, India Dr. G. M. Bhosale Marg, Worli, Tel: +91 22 2289 5500 Mumbai-400 018, India Fax:+91 22 2287 5485 Tel:
Slide 3: Providing financial solutions to Emerging India
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 4: Highlights – Q3FY24
Highlights – Q3FY24 Q3FY24 Results ➢ Leadership position maintained in Tractors, Pre-owned vehicles, Passenger vehicles and Three-wheelers ➢ Asset growth momentum resilient with Loan Book* at Rs. 97,048 crores… YoY 25.5%, ➢ Improved NII margins… QoQ 6.8% v/s 6.5% ➢ Improving Asset quality trend…
Slide 5: Highlights – YTD Dec 2023
Highlights – YTD Dec 2023 Particulars YTD Dec 23 v/s YTD Dec 22 Disbursements Rs. 40,916 crores v/s Rs. 35,764 crores, YoY 14.4% Business Assets (including provisions) Rs. 97,048 crores v/s Rs. 77,344 crores, YoY 25.5% NIM% 6.7% v/s 7.6% Gross Stage 2 (as % of Business Assets) 6.0 % in Dec 23 v/s
Slide 6: Key Financials: Rising Disbursement and Income
Key Financials: Rising Disbursement and Income, modulated PAT amidst lower provision relief on Standalone Basis Disbursement Total Income Profit after Tax Q3 FY 24 Rs. 15,436 crores Rs. 3,490 crores Rs. 553 crores 7% 21% 12% Q3 FY 23 Rs. 14,467 crores Rs. 2,892 crores Rs. 629 crores 9M FY 24 Rs. 40,
Slide 7: Disbursement and Collection: Trending positively
Disbursement and Collection: Trending positively on Standalone Basis Historical Disbursements (INR crores) Q1 Q2 Q3 YTD 12,165 13,315 15,436 40,916 FY 2024 (28% yoy) (13% yoy) (7% yoy) (14% yoy) FY 2023 9,472 11,824 14,467 35,764 FY 2022 3,872 6,475 8,032 18,379 Collection Efficiency^ Q1 Q2 Oct Nov
Slide 8: Break down of Disbursements
Break down of Disbursements on Standalone Basis Nine month Nine month Year ended Asset Class (Rs. Crores) Q3 FY 24 Q3 FY 23 YoY ended ended YoY March – 23 Dec – 23 Dec – 22 Auto/ Utility vehicles 6,007 (39%) 4,973 (34%) 21% 15,390 (38%) 12,224 (34%) 26% 16,496 (33%) Tractors 1,677 (11%) 2,035 (14%)
Slide 9: Business Assets Mix
Business Assets Mix: SUVs & Used Vehicle increase, Tractor reduces on Standalone Basis Nine-month ended Nine-month ended Year ended Asset Class Dec – 23 Dec – 22 March – 23 Auto/ Utility vehicles 35% 33% 33% Tractors 13% 15% 14% Cars 19% 20% 20% Commercial vehicles and Construction equipments 11% 11
Slide 10: Spread Analysis
Spread Analysis: QoQ improvements in NII, Credit cost and ROA on standalone basis Nine-month Nine-month Quarter ended Quarter ended Quarter ended Year ended Particulars ended ended Dec -23 Sep -23 Dec -22 March – 23 Dec – 23 Dec – 22 Total Loan Income / Average Business Assets 13.4% 13.1% 13.7% 13.3
Slide 11: Asset quality trend: GS2%+GS3% ~10%
Asset quality trend: GS2%+GS3% ~10% on standalone basis Stage-Wise Assets and Provisioning As on 31st Dec 2023 As on 30th Sep 2023 As on 31st Mar 2023 Rs. in crores Business Assets Provisions & Business Assets Provisions & Business Assets Provisions & (Amount and %) Coverage (Amount and %) Coverage
Slide 12: Credit Charge: Reduction in Write offs
Credit Charge: Reduction in Write offs, provision higher vs YTD FY23 on standalone basis Particulars (Rs. in crores) Q3FY24 Q2FY24 Q3FY23 9MFY24 9MFY23 FY23 FY22 Stage-1 Provisions (119) 78 (75) 23 52 117 22 Stage-2 Provisions 45 10 (99) 133 (482) (651) 295 Stage-3 Provisions (46) 188 (169) 213 (183
Slide 13: Balance Sheet: Adequately capitalized & Healthy coverage ratios
Balance Sheet: Adequately capitalized & Healthy coverage ratios Capital Adequacy Gross Stage-3 Stage 3 - Coverage Ratio 23.4% 22.5% 5.9% 62.7% 4.5% 4.3% 61.2% 4.0% 59.0% 59.5% 18.7% 18.3% Dec-22 Mar-23 Sep-23 Dec-23 Dec-22 Mar-23 Sep-23 Dec-23 Dec-22 Mar-23 Sep-23 Dec-23 Well capitalized Asset Quali
Slide 14: Progress on Strategic Areas: Tracking Well
Progress on Strategic Areas: Tracking Well… Strategic Imperatives ▪ GS2% + GS3% ~ 10% 1. Improve asset quality ▪ Credit costs improvement: on track ▪ New book sourcing: healthy levels ▪ Increasing share of non-cash collections >70% 2. Digital transformation ▪ Project Udaan: steady development ▪ Used
Slide 15: Mission 2025: Progress (9M FY24)
Mission 2025: Progress (9M FY24) New Business Stable Asset Quality 2x AUM* Contribution GS-3 < 6% 15% 9M FY24: 4% 9M FY24: 1.5x* 9M FY24: 5% Operating Leverage Maintain Cost To RoA NIMs ~7.5% Assets ~2.5% ~2.5% 9M FY24: 6.7% 9M FY24: 2.8% 9M FY24: 1.5% * Refers to growth over Business Assets of FY22
Slide 16: Financial Information – Standalone
Providing financial solutions to Emerging India Executive Summary Financial Information – Standalone Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 17: Break down by Geography
Break down by Geography on Standalone Basis Dec 2023 9M FY 2024 17% 16% 10% Dec 2022 11% 9M FY 2023 18% 10% 20% 10% 21% 20% 19% 19% 20% 19% Business 23% Disbursement * Assets 20% 31% 30% 34% 32% CENTRAL EAST NORTH SOUTH WEST CENTRAL EAST NORTH SOUTH WEST NORTH: Chandigarh, Delhi, Haryana, Himachal P
Slide 18: Broad Based Liability Mix
Broad Based Liability Mix on Standalone Basis Funding Mix by Investor Category Funding Mix by type of Instrument Dec’ 23 Sep’ 23 Mar’23 Dec’ 23 Sep’23 Mar’23 Investor Type Instrument Type Amount % Share % Share % Share Amount % Share % Share % Share Banks / Financial NCDs 20,562 23.7% 25.2% 26.7% 51
Slide 19: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in INR crores 1,20,000 280% Cumulative Inflow Cumulative Outflow Cumulative Mismatch% 1,05,227 1,00,000 240% 89,839 86,055 200% 80,000 73,627 160% 60,000 47,046 120% 40,000 32,516 29,807 23,849 80% 17,580 18,944 20,000 13,031 12,192 40% 3,712 6,410 - 0
Slide 20: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. crores) Revenues (Rs. crores) 93,392 10,517 11,056 79,455 9,719 9,856 73,416 7,999 59,947 60,445 FY21 FY22 FY23 9M FY23 9M FY24 FY21 FY22 FY23 9M FY23 9M FY24 Pre-Provisioning Operating Profit (Rs. crores) Profit after Tax (2) (Rs. crores) 1,9
Slide 21: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 42.1% 41.0% 41.8% 2.3% 2.1% 35.8% 1.5% 28.2% 1.3% 0.4% FY21 FY22 FY23 9M FY23 9M FY24 FY21 FY22 FY23 9M FY23 9M FY24 Return on Net Worth (RONW) (2) (%) Asset Quality (%) Gross Stage 3 Net Stage 3 12
Slide 22: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) Q3FY24 Q2FY24 Q-o-Q Q3FY23 Y-o-Y FY23 Revenue from operations (A) 3,454 3,212 8% 2,863 21% 10,929 Less: Finance cost (B) 1,675 1,566 7% 1,242 35% 4,577 NII (C= A+B) 1,779 1,646 8% 1,621 10% 6,352 Other Income (D) 37 28 29% 29 27% 127 Total
Slide 23: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) 9MFY24 9MFY23 Y-o-Y FY23 Revenue from operations (A) 9,750 7,935 23% 10,929 Less: Finance cost (B) 4,692 3,243 45% 4,577 NII (C= A+B) 5,058 4,692 8% 6,352 Other Income (D) 106 65 64% 127 Total Income (E=C+D) 5,164 4,757 9% 6,479 Employee b
Slide 24: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in crores) As on Dec 31, 2023 As on Dec 31, 2022 As on Mar 31, 2023 ASSETS Financial Asset a) Cash and cash equivalents 355 251 250 b) Bank balance other than (a) above 1,164 3,463 2,582 c) Derivative financial instruments 3 - d) Trade Receivables 11 33 22 e
Slide 25: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in crores) As on Dec 31, 2023 As on Dec 31, 2022 As on Mar 31, 2023 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 233 117 181 b) Payables i) Trade payables 1,288 1,082 1,126 ii) Other payables 32 47 40 c) Debt Secu
Slide 26: Summary & Key Ratios
Summary & Key Ratios on standalone basis Nine-month ended Nine-month ended Year ended Particulars Dec – 23 Dec – 22 March – 23 RONW (Avg. Net Worth) - annualised 8.8% 10.9% 12.1% Debt / Equity 4.93:1 4.33:1 4:39:1 Capital Adequacy 18.3% 23.4% 22.5% Tier I 16.5% 20.5% 19.9% Tier II 1.8% 2.9% 2.6% EPS
Slide 27: Stage 3 - Analysis
Stage 3 - Analysis on standalone basis Particulars (Rs. in crores) except figures in % Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Mar 31, 2023 Mar 31, 2022 Business Assets (including Provisions) 97,048 93,723 77,344 82,770 64,961 Gross Stage 3 3,852 4,024 4,589 3,717 4,976 Less: Stage 3 ECL Provisions 2
Slide 28: Financial Information – Consolidated
Providing financial solutions to Emerging India Executive Summary Financial Information – Consolidated Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 29: Key Financials (Consolidated)
Key Financials on consolidated basis Disbursement Total Income Profit after Tax Q3 FY 24 Rs. 16,094 crores Rs. 4,137 crores Rs. 623 crores 6% 7% 23% Q3 FY 23 Rs. 14,980 crores Rs. 3,353 crores Rs. 664 crores 9M FY 24 Rs. 42,473 crores Rs. 11,637 crores Rs.1,272 crores 14% 25% 9% 9M FY 23 Rs. 37,211
Slide 30: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) Q3 FY 24 Q2 FY24 Q-o-Q Q3FY23 Y-o-Y FY23 Revenue from operations (A) 4,100 3,833 7% 3,324 23% 12,699 Less: Finance cost (B) 1,798 1,703 6% 1,373 31% 5,094 NII (C= A+B) 2,302 2,130 8% 1,951 18% 7,605 Other Income (D) 37 30 22% 29 27% 133
Slide 31: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) 9MFY24 9MFY23 Y-o-Y FY23 Revenue from operations (A) 11,517 9,236 25% 12,699 Less: Finance cost (B) 5,098 3,616 41% 5,094 NII (C= A+B) 6,418 5,620 14% 7,605 Other Income (D) 121 59 104% 133 Total Income (E=C+D) 6,539 5,679 15% 7,738 Empl
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in crores) As on Dec 31, 2023 As on Dec 31, 2022 As on Mar 31, 2023 ASSETS Financial Asset a) Cash and cash equivalents 734 599 587 b) Bank balance other than (a) above 1,362 4,133 3,480 c) Derivative financial instruments 3 - - d) Trade Receivables 128 10
Slide 33: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in crores) As on Dec 31, 2023 As on Dec 31, 2022 As on Mar 31, 2023 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 233 117 181 b) Payables i) Trade payables 1,492 1,198 1,246 ii) Other payables 32 47 40 c) Debt Se
Slide 34: Subsidiary Financials
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy Awards & CSR Initiatives
Slide 35: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Year ended Particulars (Rs. in crores) Q3FY24 Q3FY23 9MFY24 9MFY23 March -23 Loans disbursed 554 444 1325 1,264 2,004 Loans & Advances (net) 6,693 6,835 6,693 6,835 6,845 Total income 311 338 984 995 1,350 PBT 19 14 4 58 26 PAT 13 14 2 48 22 Net-worth 1,486 1,5
Slide 36: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Year ended Particulars (Rs. in crores) Q3FY24 Q3FY23 9M1FY24 9 MFY23 March -23 Gross Premium 1,190 1,014 3,169 2,645 4,037 Total income 331 123 784 306 427 PBT 59 18 121 29 46 PAT 43 13 89 22 34 No. of employees (nos.) 707 777 707 777 765 ▪ Business Area: Licensed
Slide 37: Mahindra Ideal Finance Limited
Mahindra Ideal Finance Limited Year ended Particulars (in LKR Mn) Q3FY24 Q3FY23 9MFY24 9MFY23 March -23 Loans disbursed 4,073 2,642 9,036 7,058 9,907 Loans & Advances (net) 7,225 6,846 7,225 6,846 7,124 Total income 569 491 1,719 1,348 1,924 PBT* 77 51 246 155 248 PAT 24 14 79 47 87 Net-worth 2,914
Slide 38: Company Overview
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 39: Company Background
Company Background Parentage Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (M.Cap: Rs 2.04 trillion)* About MMFSL MMFSL (M.Cap: Rs 344 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban secto
Slide 40: MMFSL Group structure
MMFSL Group structure Mahindra & Mahindra Limited 52.16% Mahindra & Mahindra Financial Services Limited 100%(1) 98.43%(2) 49% 51%(3) 51%(3) 58.2%(4) Mahindra Insurance Mahindra Rural Mahindra Finance Mahindra Manulife Mahindra Manulife Mahindra Ideal Brokers Limited Housing Finance USA LLC Investmen
Slide 41: Our Journey
Our Journey Long term debt rating upgraded to Long term debt Equity AAA by India rating upgraded to participation of Ratings and AAA by CRISIL 12.5%by NHB in Brickwork. Maiden issue of MRHFL QIP Issue of Rs. Maiden Retail ECB Crossed 9 million 426 crores CARE Ratings NCD Issue of undertaken. cumulat
Slide 42: Shareholding Pattern (as on Dec 31, 2023)
Shareholding Pattern (as on Dec 31 , 2023) Shareholding Pattern Top 10 Public Shareholders 8.06% ▪ Life Insurance Corporation of India ▪ HDFC Mutual Fund ▪ ICICI Prudential Mutual Fund 26.96% ▪ HDFC Life Insurance Company Limited 52.16% ▪ SBI Mutual Fund ▪ Kotak Funds – India Midcap Fund ▪ Kotak Mah
Slide 43: Business Strategy
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 44: Business Strategy
Business Strategy Deepen presence in emerging India – age, Diversify product portfolio: Nurture & Scale SME, income, aspiration, digital behaviour digital finance, leasing and foray into other lending / ₹ non-lending financial solutions Strengthen risk culture and governance within the Grow wallet s
Slide 45: Transformation priorities
Transformation priorities 01 02 Stabilize Asset Quality Recharge Growth Focus on bringing the volatility Build high quality diversified down business 03 04 Future Ready Human Capital Strengthen Tech & Digital High Performing Organisation Data informed thinking 44
Slide 46: Sustainable profitable growth: Mission 2025
Sustainable profitable growth: Mission 2025 New Business Stable Asset Quality 2x AUM Contribution GS-3 < 6% 15% Operating Leverage Maintain Cost To RoA NIMs ~7.5% Assets ~2.5% ~2.5% 45
Slide 47: Extensive Branch Network
Extensive Branch Network ▪ Extensive branch network with presence in 27 states and 7 union Coverage territories in India through 1,369 offices ▪ Branches have authority to approve loans within prescribed guidelines Central East North 2 21 South West 27 36 2 Branch Network as of 34 28 13 2 116 3 42 1
Slide 48: Diversified Product Portfolio
Diversified Product Portfolio Vehicle Financing Pre-Owned Vehicles SME Financing Loans for auto and utility vehicles, tractors, cars, Loans for pre-owned cars, multi-utility vehicles, Loans for varied purposes like project finance, commercial vehicles and construction tractors and commercial vehicle
Slide 49: 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 ▪ Next gen API commissioned for scaling partnerships, integrating anytime-anywhere learning. fintech ecosystem & create enterprise wide
Slide 50: Credit Rating
Credit Rating India Ratings Outlook Long term and Subordinated debt (incl. MLD); IND AAA Stable Bank Facilities; Fixed Deposit Programme IND PP-MLD AAA Short term debt IND A1+ - CRISIL Ratings Outlook Long term and Subordinated debt; Bank Facilities; CRISIL AAA Stable Fixed Deposit Programme Short t
Slide 51: ESG & CSR
Providing financial solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 52: ESG
ESG Approved SCIENCE-BASED TARGETS Science Based Green House Gas Emissions reduction targets validated by Science Based Targets Initiatives (SBTI) . Scope 1 and Scope 2 target ambitions in line with 1.5-degree Celsius trajectory. Reduction in absolute scope 1 and 2 GHG emissions 50.4% by FY 2032 fro
Slide 53: CSR
CSR Swabhimaan – A holistic driver development program Training New Drivers Mahindra Hariyali Scholarships for Drivers’ children Nanhi Kali: Educational support Road Safety training Women Empowerment E/Auto Rickshaw training for women Water conservation Skill Development for Disability affected Mone
Slide 54: Awards & Accolades
Awards & Accolades Best Financial Inclusion Initiative Happiest Workplace for Women India’s Best Companies to Work Recognised for ESG Amongst Best Places to Work in India 53
Slide 55: Thank You
Providing financial solutions to Emerging India Thank You
Mahindra & Mahindra Financial Services — Q3 FY2024 Earnings Presentation on 6ix