Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q2 FY2019 Earnings Presentation
57 slides from Muthoot Finance's earnings presentation, September 2018
Slide 1: Financial Results Q2 FY 2019
Financial Results Q2 FY 2019 September 2018 MUTHOOT FINANCE LIMITED
Slide 2: 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 3: Disclaimer w.r.t adoption of IND-AS
DISCLAIMER w.r.t adoption of IND-AS This is the first time 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 reserves of FY 2018 Except the quarterly/
Slide 4: Consolidated Loan Assets
CONSOLIDATED LOAN ASSETS * Diversified Business of the Group * (` in million) Q2 FY 19 Q1 FY 19 Q2 FY 18 YoY Growth(%) FY 2018 Consolidated Loan Assets** of 359,559 343,157 296,455 21 321,591 the Group * Contribution of Subsidiaries in the Consolidated Gross Loan 10 10 7 - 10 Assets of the Group* (%
Slide 5: Muthoot Finance: Driving Inclusive Growth
MUTHOOT FINANCE: DRIVING INCLUSIVE GROWTH o India’s largest gold financing company (by loan portfolio) o Trusted pan-India brand in the gold loans sector; revolutionised India’s gold banking o Our intervention has empowered millions of people across the social pyramid Multiple service offerings CORE
Slide 6: MFIN - A Glimpse
MFIN - A GLIMPSE 29 168 tonnes States/Union territory presence Gold jewellery kept as security 4,300+ 135,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 23,000+ 200,000+ Team members Customers served every day ` 323,186 mn Loan Assets Under Management (
Slide 7: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 74% stake 23.06 NSE Ticker 3.20 MUTHOOTFIN (%) Shareholding as on September 30, 2018 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on September 30, 2018) ` 161,445 million 73.74 6
Slide 8: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2018 FY 2017 FY 2016 FY 2015 FY 2014 Dividend (% )* 60 60 60 100 60 First Interim Dividend (%) 100 60 40 40 30 - Second Interim Dividend (%) - - 20 20 Final Dividend (%) - - - 20 10 Dividend Payout Ratio (%) 23.23 20.30 29.50 35.36
Slide 9: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4370 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 6 14 Himachal Pradesh 62 East West Punjab 7 Chandigarh 8 183 15 Uttarakhand North South Haryana 21 Delhi 128 218 Assam 22 Rajasthan 17 (As of September 30, 2018) 13
Slide 10: Digital Initiatives
DIGITAL INITIATIVES Digital convenience for new gen & Millennium Customer acquisition Direct Credit Facility PoS Terminals • Loan proceeds credited to bank account • Enables swiping of Debit • NEFT/RTGS/IMPS mode of bank cards issued by banks transfer • Swiping charges for • Less cash handling at br
Slide 11: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 17% of our active Gold loan Customers are transacting Online Muthoot Online iMuthoot App Mobile App • Our online services has now been re-branded to • Launched in Nov’16 has about 6.25 lakhs Muthoot Online, from WebPay earlier. downloads. • Customers can
Slide 12: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth (` in million) Sep-18* Jun-18* Mar-18 Sep-17 Mar-17 Share Capital 4,002 4,001 4,000 3,996 3,995 Reserves & Surplus 83,903 79,070 73,604 69,248 61,169 Total 87,905 83,071 77,604 73,244 65,164 *Under IND- AS *Under IND- AS 11
Slide 13: Migration to IND-AS - Initial Adjustment to Reserves
Migration to IND-AS- Initial Adjustment to Reserves Impact of migration to IND-AS was made in the Opening Reserves of FY 2018 Particulars (` in million) Opening Reserve & Surplus as per Indian GAAP as at 1st April 2017 65,164 Adjustments: Impact on application of Expected Credit Loss method for loan
Slide 14: Assets
ASSETS Core focus continues to be gold loan Gross Loan Assets under management* Sep-18 Jun-18 Mar- 18 Sep-17 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross loan assets under 323,186 309,966 291,420 276,132 17 4 management Break-up of Gross Loan Assets
Slide 15: Liabilities
LIABILITIES Stable sources of funding* Sep-18 Jun-18 Mar-18 Sep-17 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures 7,034 7,645 8,769 16,288 (57) (8) (Muthoot Gold Bonds) Secured Non-Convertible 75,151 70,966 43,842 49,909 5
Slide 16: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY YoY H1 FY H1 FY Q2 FY Q2 FY Q1 FY Growth Growth FY 2018** 2019* 2018* 2019* 2018* 2019* (%) (%) INCOME Interest Income 32,424 30,030 8 16,316 16,431 (1) 16,108 60,593 Other Income 407 362 13 185 188 (1) 222 1,839 Total 32,831 30,392 8 16,50
Slide 17: Reconciliation of IND-AS Migration
Reconciliation of IND-AS Migration I-GAAP and IND-AS Reconciliation (` in million) H1 FY 2018 Q2 FY 2018 Q1 FY 2018 Net Profit after Tax reported under Previous GAAP 8,052 4,542 3,511 Adjustments increasing/(decreasing) net profit after tax as reported in the previous GAAP: Impact on application of
Slide 18: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in billion) 360 320 330 306 288 300 275 260 272 270 243 244 216 233 240 210 180 157 150 120 90 73 60 30 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Sep-17 Mar-18 Jun-18 Sep-18 17
Slide 19: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 180 161 168 155 160 152 149 137 142 140 134 131 118 120 112 100 80 66 60 40 20 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Sep-17 Mar-18 Jun-18 Sep-18 18
Slide 20: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Sep -17 Mar-18 Jun-18 Sep -18 East 2 3 4 5 6 6 7 7 8 8 8 8 West 8 8 10 11 13 15 17 18 19 19 19 19 North 15 15 17 19 22 22 22 23 23 23
Slide 21: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 85 73.31 75 70.35 66.39 66.70 63.20 64.23 65 63.69 57.55 55.01 56.93 55 50.63 45.74 45 35 25 15 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Sep-17 Mar-18 Jun-18 Sep-18
Slide 22: Yield on Loan Assets and NIM
YIELD ON LOAN ASSETS AND NIM Yearly* (%) Quarterly** (%) 26.00 26.00 24.00 24.00 23.75 22.34 21.70 21.77 22.00 21.66 22.00 21.35 19.94 19.72 20.69 21.04 19.31 21.43 20.00 20.00 19.72 20.27 18.00 18.00 14.68 16.64 14.31 16.00 14.48 14.75 16.00 13.93 14.00 14.00 12.74 11.17 10.81 11.69 11.38 10.84 12.
Slide 23: Interest Spread
INTEREST SPREAD Yearly* (%) Quarterly** (%) 26.00 26.00 24.00 23.75 22.34 24.00 21.66 21.43 21.70 22.00 21.35 21.77 20.27 22.00 21.04 19.94 19.72 19.72 20.69 20.00 19.31 20.00 18.00 18.00 15.43 16.00 16.00 14.00 12.42 12.90 11.88 14.00 13.19 12.20 11.96 12.69 12.32 11.53 10.93 10.80 12.00 10.85 10.9
Slide 24: Return on Average Loan Assets
RETURN ON AVERAGE LOAN ASSETS Attractive returns over the years Yearly* (%) Quarterly** (%) 7.00 7.00 6.50 6.16 6.54 6.50 6.43 6.33 6.00 6.11 6.00 5.73 5.50 5.50 5.00 5.00 4.24 4.40 4.47 4.50 4.21 4.05 4.50 4.00 4.00 3.32 3.50 3.22 3.50 3.03 3.00 3.00 2.50 2.50 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar
Slide 25: Stage III Loan Assets & ECL Provision
STAGE III LOAN ASSETS & ECL PROVISION IND AS (` in million) Sep-18 Jun-18 Mar-18 Sep-17 Mar-17 Stage III Loan Asset 6,169 8,835 12,872 19,353 7,612 % Stage III Asset on Gross Loan Asset 1.91 2.85 4.42 7.01 2.79 ECL Provision 5,795 5,892 6,089 6,673 5,278 ECL Provision as % of Gross Loan Assets 1.79
Slide 26: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile* (%) Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 7,034 mn (3%) 3 3 12 Secured Non-Convertible Debentures – Listed – ` 75,151 mn (31%) 1 2 Borrowings from Banks/Fis - ` 118,051 mn (49%) 31 Subordinated Debt – ` 2,999 mn (1%) Subo
Slide 27: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Very strong degree of safety with regard to timely CRISIL 50,000 CRISIL A1+ payment of financial obligation and carry lowest credit risk ICRA 50,000 ICRA A1+ Very
Slide 28: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly* Quarterly** 70,000 56,546 60,593 70,000 60,000 60,000 53,641 50,000 49,077 48,130 45,280 50,000 42,703 40,000 40,000 32,424 30,030 30,000 30,000 22,983 16,316 16,431 16,108 20,000 20,000 10,775 10,000 10,000 0 0 Q2 FY 2019 Q2 FY 2018 Q1
Slide 29: Operating Expenses to Average Loan Assets
OPERATING EXPENSES TO AVERAGE LOAN ASSETS Operational efficiency over the years Yearly* (%) Quarterly** (%) 8.50 8.50 8.00 8.00 7.50 7.50 7.00 7.00 6.50 6.50 6.04 6.00 6.00 5.63 5.39 5.50 5.50 5.30 5.01 5.1 4.72 5.00 4.90 5.00 4.55 4.72 4.28 4.46 4.50 4.50 4.02 4.08 4.00 4.00 3.50 3.50 Mar-10 Mar-11
Slide 30: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly* (` in million) Quarterly** (` in Million) Q2 FY Q2 FY Q1 FY H1 FY H1 FY Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 2019 2018 2019 2019 2018 Personnel Expenses 7,288 7,280 6,418 6,304 5,917 5,453 4,145 2,209 2,019 1,890 2,102 4,120 3,690 Rent 1,913
Slide 31: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly* (%) Quarterly** (%) Q2 FY Q2 FY Q1 FY H1 FY H1 FY Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 2019 2018 2019 2019 2018 Personnel Expenses 47 48 49 53 52 52 49 43 55 44 56 55 49 Rent 12 12 13 14 14 12 12 12 13 10 13 13 12 Advertisement 5 3 5 5 6 5 10
Slide 32: Profitability Ratios
PROFITABILITY RATIOS Yearly* (%) Quarterly** (%) (Based on Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Q2 FY Q2 FY Q1 FY H1 FY H1 FY Income) 2019 2018 2019 2019 2018 Interest expense to 31.07 39.92 46.31 48.71 53.08 52.34 52.10 44.83 32.44 29.68 30.72 31.58 33.08 Gross Income Selling, ge
Slide 33: Profitability Ratios
PROFITABILITY RATIOS Yearly* (%) Quarterly** (%) (Based on Average Mar-18 Mar-17 Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Q2 FY Q2 FY Q1 FY H1 FY H1 FY Loan Assets) 2019 2018 2019 2019 2018 Interest income to avg. 21.70 21.43 19.72 19.30 20.27 21.66 22.34 19.72 20.69 23.75 21.35 21.04 21.77 loan as
Slide 34: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly* PBT PAT Quarterly** PBT PAT 28,000 27,571 22,000 26,000 24,000 20,000 22,000 18,000 20,000 19,210 16,000 15,003 17,203 18,000 14,000 12821 16,000 13,312 7,612 13,168 12,000 14,000 11,936 10,000 9,754 12,000 10,27
Slide 35: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 1,00,000 87,905 90,000 83,071 80,000 77,604 73,244 70,000 65,164 60,000 56,192 50,835 50,000 42,646 37,356 40,000 29,257 30,000 20,000 13,344 10,000 5,845 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Mar-16 Mar-17
Slide 36: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly* (%) Quarterly** (%) 55 51.52 30 50 48.10 25.17 24.54 22.89 25 22.70 23.57 45 41.90 40 20 35 15 30 30.15 24.10 25 10 20 19.50 14.35 19.44 5 15 15.13 10 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18
Slide 37: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Sep-18* Jun-18* Mar-18 Sep-17 Capital Adequacy Ratio 25.92 26.44 26.59 26.49 Tier-I 25.32 24.78 24.75 23.64 Tier-II 0.60 1.66 1.84 2.85 *Under IND-AS 36
Slide 38: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside Q2 FY 2019* Q2 FY 2018* Q1 FY 2019* H1 FY 2019 H1 FY 2018 FY 2018 Earnings per share (`) - Basic 12.09 11.16 12.29 24.38 19.79 43.04 - Diluted 12.07 11.10 12.24 24.31 19.70 42.85 *Under IND-AS Sep-18 Jun-18 Mar-18 Mar-17
Slide 39: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Sep-18* Jun-18* Mar-18 Sep-17 Outside Liabilities 258,102 254,559 2,36,212 251,228 Cash & Bank Balances 4,520 8,009 4,870 19,649 Tangible Networth 87,836 82,996 77,522 73,243 Capital Gearing 2.89 2.97 2.98 3.16 *Under IND-AS 38
Slide 40: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28000 25351 24881 25012 24205 23888 23455 23623 22882 22781 22756 23000 18000 16688 13000 9745 8000 3000 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Sep-17 Mar-18 Jun-18 Sep-18 39
Slide 41: Our Subsidiary: Asia Asset Finance PLC
OUR SUBSIDIARY Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company
Slide 42: Asia Asset Finance PLC - An Overview
ASIA ASSET FINANCE PLC – AN OVERVIEW Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance on December 31, 2014 . As on September 30, 2018, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio st
Slide 43: Products
PRODUCTS o Fixed Deposits o Mortgage Loans o Leasing o Factoring o Business Loan o Short Term Loans o Personal Loan o Micro Finance o Group Personal Loan o Loan against Gold Jewellery o Corporate Loans 42
Slide 44: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 43
Slide 45: Key Financial Parameters
Key Financial Parameters (LKR in millions) Particulars H1 FY 2019 Q2 FY 2019 Q1 FY 2019 Q2 FY 2018 FY 2018 LKR / INR 0.42833 0.42833 0.43263 0.42758 0.41551 Number of branches 17 17 17 17 17 Number of Employees 493 493 493 481 489 Loan AUM (LKR) 11,237 11,237 10,680 9,494 9,950 Capital Adequacy Rati
Slide 46: Our Subsidiary: Muthoot Homefin
OUR SUBSIDIARY Muthoot Homefin G) Muthoot Finance 45
Slide 47: Muthoot Homefin - An Overview
MUTHOOT HOMEFIN – AN OVERVIEW Muthoot Homefin (India) Limited is a Housing Finance Company registered with The National Housing Bank (NHB). It became a wholly owned subsidiary of Muthoot Finance Ltd in Aug’17. MHIL focuses on extending affordable housing finance and targets customers in Economically
Slide 48: Business Performance
Business Performance (` in millions) Particulars H1 FY 2019 Q2 FY 2019 Q1 FY 2019 Q2 FY 2018 FY 2018 Number of branches 73 73 70 14 19 Number of Sales Offices 132 132 132 110 121 Number of Employees 288 288 243 167 221 Loan AUM (`) 17,753 17,753 16,210 8,296 14,648 Capital Adequacy Ratio (%) 45 45 2
Slide 49: Business Performance
Business Performance (` in millions) Particulars H1 FY 2019 Q2 FY 2019 Q1 FY 2019 Q2 FY 2018 FY 2018 Disbursement (`) 3,755 1,894 1,861 2,460 10,814 Borrowings (`) 13,994 13,994 14,394 6,346 13,477 Debt Equity Ratio (%) 3.62 3.62 6.34 3.23 6.24 Yield on Advances (%) 12.07 12.09 12.09 12.23 12.27 Int
Slide 50: Financial Highlights and Growth
• Disbursements in H1 FY 2019: Rs 3,755 mn. Loan Book as on September 30, 2018: Rs 17,754 mn • Average Ticket Size in H1 FY 2019: Rs.0.95 mn Financial • Business Presence: Maharashtra, Gujarat, Rajasthan, Madhya Pradesh , Kerala, Andhra Pradesh,Telangana,Karnataka, Uttar Pradesh, Haryana and Chandig
Slide 51: Our Subsidiary: Muthoot Insurance Brokers
OUR SUBSIDIARY G) Muthoot Insurance Brokers &) Muthoot Finance 50
Slide 52: Muthoot Insurance - An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in Sep 2016. MIBPL is an unlisted private limited company holding a licence to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various ins
Slide 53: Key Business and Financial Parameters
Key Business Parameters (` in millions) Particulars H1 FY 2019 Q2 FY 2019 Q1 FY 2019 Q2 FY 2018 FY 2018 Premium Collection (` ) 1,164 670 495 216 1006 Number of Policies 9,98,786 5,48,410 4,50,376 2,16,428 8,41,476 Key Financial Parameters (` in millions) Particulars H1 FY 2019 Q2 FY 2019 Q1 FY 2019
Slide 54: Our Subsidiary: Belstar Investment and Finance
® OUR SUBSIDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 53
Slide 55: Belstar Investment and Finance - An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As of Sep 2018 , Muthoot Finance holds 65.89% in BIFPL . BIFPL was incorporated on January 1988 at Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as “NBFC-MFI” by RBI eff
Slide 56: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars H1 FY 2019 Q2 FY 2019 Q1 FY 2019 Q2 FY 2018 FY 2018 Number of branches 305 305 257 198 235 Number of Employees 2,305 2,305 2,046 1,383 1,783 Gross Loan AUM (`) 13,806 13,806 12,361 7,968 11,371 Capital Adequacy Ratio (%) 24 24 15 17 18 Total Reven
Slide 57: Registered Office
REGISTERED OFFICE 2nd Floor, Muthoot Chambers Opposite Saritha Theatre Complex Banerji Road, Kochi Kerala – 682 018. India Tel: (91484) 2394712 Fax: (91484) 2396506 CIN: L65910KL1997PLC011300 RBI Reg No: N 16.00167 EMAIL (Individual & Corporate Investors) investors@muthootfinance.com (Institutional