Mahindra & Mahindra Financial Services Ltd. · NSE:M&MFIN
Mahindra & Mahindra Financial Services — Q2 FY2025 Earnings Presentation
60 slides from Mahindra & Mahindra Financial Services's earnings presentation, Oct 22, 2024
Slide 1: Exchange filing cover letter for earnings presentation
Mahindra & Mahindra Financial Services Ltd. Mahindra Towers, 3rd Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018 India Tel: +91 22 66526000 22nd October 2024 To, BSE Limited, (Scrip Code: 532720) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001 National Stock Exchange of India Lt
Slide 2: Result Update Quarter ended Sept'24 (Q2FY25)
Mahindra & Mahindra Financial Services Limited Result Update Quarter ended Sept’24 (Q2FY25) 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 54
Slide 3: Safe Harbor
Safe Harbor Certain statements in the Financial Results Update presentation describing the Company's objectives, and predictions may be ‘forward-looking statements’ within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contai
Slide 4: Executive Summary
Providing Financial Solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 5: Progress on Mission - 2025 Aspirations
Progress on Mission - 2025 Aspirations What we said (Apr’22) Where we are FY’25 H1’25 FY’25 Stable Asset GS3 < 6.0% GS3 < 4.0% GS3 < 4.0% Quality NIM - 7.5% NIM - 6.5% Credit Cost 1.3-1.5% NIM - 6.5 – 6.7% Growth 2X AUM 1.7X AUM 1.8 X - 2X AUM Upgrade Talent Talent Completed Strengthened Tec
Slide 6: GS3: Sequential increase witnessed mostly in tractor segment
GS3: Sequential increase witnessed mostly in tractor segment Rs. Cr GS3 – 4 yrs trendline GS3: Additions in Q2 F25 12.68% 6.70% 4.29% 3.83% 8,069 4,943 4,024 4,309 Sep-21 Sep-22 Sep-23 Sep-24 Credit cost: Higher provisions 296 End Losses 407 End Losses 322 Provisions 407 Provisions 126 5
Slide 7: GS-3 & Credit Cost: End losses decline structurally
GS-3 & Credit Cost: End losses decline structurally on standalone basis Particulars FY22 FY23 FY24 H1FY24 H1FY25 Particulars Q2FY24 Q2FY25 GS-3 7.7% 4.5% 3.4% 4.3% 3.8% Credit Cost 2.4% 2.3% Credit Cost 3.1% 1.2% 1.7% 2.3% 1.9% Provision 1.1% 1.3% Provision (0.2%) (1.4%) 0.1% 1.0% 0.9% End Losses 1.
Slide 8: Overall Disbursements - Flat
Overall Disbursements - Flat Asset Class Q2 F25 Q2 F24 Q1 F25 YoY QoQ H1 F25 H1 F24 YoY (Rs. in Crores) Passenger Vehicles 5,315 5,483 5,142 -3% 3% 10,457 10,498 0% CV & CE 2,633 2,937 2,670 -10% -1% 5,303 5,358 -1% Pre-Owned Vehicle 2,384 2,334 2,117 2% 13% 4,501 4,399 2% Tractor 1,237 1,222 1,418
Slide 9: Margins: Increased CoF neutralized margins
Margins : Increased CoF neutralized margins As % of Average Total Assets Q2 FY24 Q2 F25 Change YoY% Yield % 12.6% 12.9% 0.3% Loan Income 11.6% 11.8% 0.2% Fee, Investment & Other Income 1.0% 1.1% 0.1% Cost of funds 6.1% 6.3% 0.2% Net Interest Income 6.5% 6.5% - 8
Slide 10: Strengthened Operations
Strengthened Operations • Mahesh Rajaraman, Chief Risk Officer • Jaspreet Chada – Chief Business Officer – Mortgage Upgrade • Bijoy Thaplial – Chief Business Office – Leasing, Payments, FD and Partnerships Talent • Modnarayan Singh, Chief Compliance Officer • Devendra Sharanagat – Chief Analytics Of
Slide 11: Key Business Indicators Q2FY25 vs Q2FY24
Key Business Indicators Q2FY25 vs Q2FY24 Rs. Cr Growth % Disbursements Business AUM Total Income NIM -1% 20% 21% 19% 1,991 13,315 13,162 1,12,454 3,925 93,723 3,240 1,674 Q2FY24 Q2FY25 Q2FY24 Q2FY25 Q2FY24 Q2FY25 Q2FY24 Q2FY25 12.6% 12.9% 6.5% 6.5% Total Opex PPOP Credit Cost PAT 9% 27% 1,196 12% 57
Slide 12: Key Business Indicators H1FY25 vs H1FY24
Key Business Indicators H1FY25 vs H1FY24 Rs. Cr Growth % Disbursements Business AUM Total Income NIM 2% 20% 21% 17% 25,903 1,12,454 7,685 3,922 25,480 93,723 6,366 3,349 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 H1FY24 H1FY25 12.6% 12.8% 6.6% 6.5% Total Opex PPOP Credit Cost PAT 13% 20% 0% 50% 1,592
Slide 13: Financial Information - Standalone
Providing Financial Solutions to Emerging India Executive Summary Financial Information - Standalone Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 14: Key Financials
Key Financials on standalone basis Disbursement Total Income Profit after Tax Q2 FY25 Rs. 13,162 crores Rs. 3,925 crores Rs. 369 crores 1% 21% 57% Q2 FY24 Rs. 235 crores Rs. 13,315 crores Rs. 3,240 crores Rs. 25,903 crores Rs. 7,685 crores Rs. 882 crores H1 FY25 2% 21% 50% H1 FY24 Rs. 25,480 crores
Slide 15: Distribution of Disbursements
Distribution of Disbursements on standalone basis Asset Class (Rs. in Crores) Q2FY25 Q2FY24 Y-o-Y H1FY25 H1FY24 Y-o-Y FY24 Passenger vehicles 5,315 (40%) 5,483 (41%) -3% 10,457 (41%) 10,498 (41%) 0% 22,920 (41%) Commercial vehicles and 2,633 (20%) 2,937(22%) -10% 5,303 (21%) 5,358 (21%) -1% 12,512 (
Slide 16: Break down of Business Assets
Break down of Business Assets on Standalone Basis Asset Class H1FY25 H1FY24 FY24 Passenger vehicles 39% 37% 40% Commercial vehicles and construction 22% 22% 22% equipments Pre-owned vehicles 13% 12% 13% Tractors 11% 13% 12% SME 5% 5% 5% 3 Wheelers 4% 4% 4% Others* 7% 7% 4% Contribution of M&M assets
Slide 17: Distribution by Geography
Distribution by Geography on standalone basis Disbursement* Business Assets Circle HQ Q2FY25 Q2FY24 Q2FY25 Q2FY24 Delhi 12.8% 13.4% 13.5% 12.7% Jaipur 15.6% 14.7% 14.6% 13.5% Lucknow 17.3% 17.4% 17.9% 17.7% Thane 17.9% 16.7% 18.7% 19.2% Chennai 14.0% 13.6% 11.9% 12.0% Hyderabad 13.1% 12.9% 12.6% 13.
Slide 18: Spread Analysis → Steady Reduction in Write Offs
Spread Analysis →Steady Reduction in Write Offs on standalone basis Particulars Q2FY25 Q1FY25 Q2FY24 H1FY25 H1FY24 FY24 Total Loan Income / Average Business Assets 13.0% 13.1% 13.1% 13.0% 13.1% 13.3% Total Income / Average Assets 12.9% 12.9% 12.6% 12.8% 12.6% 12.8% Interest cost / Average Assets 6.3
Slide 19: Disbursements → Muted for Q2, Collection Efficiency → Trend Steady
Disbursements → Muted for Q2, Collection Efficiency → Trend Steady on standalone basis Historical Disbursements (Rs. in crores) Q1 Q2 Q3 Q4 FY 12,741 13,162 FY 2025 - - - (5% yoy) (-1% yoy) FY 2024 12,165 13,315 15,436 15,292 56,208 FY 2023 9,472 11,824 14,467 13,778 49,541 Collection Efficiency^ Q1
Slide 20: Asset Quality → Overall Range-Bound
Asset Quality → Overall Range-Bound on standalone basis 4.5% Gross Stage-3 Net Stage-3 6.4% 4.3% 6.0% 3.8% 5.7% 3.4% 5.0% 1.9% 1.7% 1.6% 1.3% FY23 FY24 FY24 Q2 FY25 Q2 FY23 FY24 FY24 Q2 FY25 Q2 Gross & Net Stage - 3 Gross Stage - 2 19
Slide 21: Balance Sheet → Adequately Capitalized & Healthy Coverage Ratios
Balance Sheet → Adequately Capitalized & Healthy Coverage Ratios Capital Adequacy Gross Stage-3 Stage 3 - Coverage Ratio 63.2% 18.9% 4.3% 61.2% 18.7% 59.8% 59.5% 18.5% 3.8% 3.6% 3.4% 16.7% (16.7%) (16.4%) (16.4%) (14.8%) Sep-23 Mar-24 Jun-24 Sep-24 Sep-23 Mar-24 Jun-24 Sep-24 Sep-23 Mar-24 Jun-24 Se
Slide 22: Growth Trajectory
Growth Trajectory on standalone basis Loan Book (1) (Rs. crores) Revenues (Rs. crores) 1,08,519 13,562 99,195 89,948 11,056 79,455 9,719 60,445 7,685 6,366 FY22 FY23 FY24 H1 FY24 H1 FY25 FY22 FY23 FY24 H1 FY24 H1 FY25 Pre-Provisioning Operating Profit (Rs. crores) Profit after Tax (2) (Rs. crores) 1
Slide 23: Financial Performance
Financial Performance on standalone basis Cost to income ratio (1) (%) Return on Assets (ROA) (2) (%) 42.1% 41.4% 42.0% 40.6% 2.3% 35.8% 1.7% 1.5% 1.3% 1.2% FY22 FY23 FY24 H1 FY24 H1 FY25 FY22 FY23 FY24 H1 FY24 H1 FY25 Return on Net Worth (RONW) (2) (%) Asset Quality (%) 7.7% Gross Stage-3 Net Stage
Slide 24: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) Q2FY25 Q1FY25 Q-o-Q Q2FY24 Y-o-Y FY24 Revenue from operations (A) 3,897 3,722 5% 3,212 21% 13,404 Less: Finance cost (B) 1,934 1,829 6% 1,566 23% 6,427 NII (C= A-B) 1,963 1,894 4% 1,646 19% 6,977 Other Income (D) 28 38 -27% 28 -3% 158 Tota
Slide 25: Standalone Profit & Loss Account
Standalone Profit & Loss Account Particulars (Rs. in crores) H1FY25 H1FY24 Y-o-Y FY24 Revenue from operations (A) 7,620 6,297 21% 13,404 Less: Finance cost (B) 3,763 3,017 25% 6,427 NII (C= A-B) 3,857 3,280 18% 6,977 Other Income (D) 66 69 -6% 158 Total Income (E=C+D) 3,922 3,349 17% 7,135 Employee
Slide 26: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. in crores) As on Sep 30, 2024 As on Sep 30, 2023 As on Mar 31, 2024 ASSETS Financial Asset a) Cash and cash equivalents 880 251 311 b) Bank balance other than (a) above 3,614 1,742 2,378 c) Derivative financial instruments - - - d) Trade Receivables 13 19 25
Slide 27: Standalone Balance Sheet (Contd.)
Standalone Balance Sheet (Contd.) Particulars (Rs. in crores) As on Sep 30, 2024 As on Sep 30, 2023 As on Mar 31, 2024 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 274 268 335 b) Payables i) Trade payables 940 919 1,459 ii) Other payables 38 38 65 c) Debt Securiti
Slide 28: Summary & Key Ratios
Summary & Key Ratios on standalone basis Particulars H1FY25 H1FY24 FY24 RONW (Avg. Net Worth) - annualised 9.7% 6.9% 10.0% Debt / Equity 5.65:1 5.01:1 5.08:1 Capital Adequacy 16.7% 18.7% 18.9% Tier I 14.8% 16.7% 16.4% Tier II 1.9% 2.0% 2.5% EPS (Basic) (Rs.)* 7.15 4.76 14.26 Book Value (Rs.) 148.0 1
Slide 29: Stage 3 - Analysis
Stage 3 - Analysis on standalone basis Particulars (Rs. in crores) except figures in % Sep 30, 2024 Jun 30, 2024 Sep 30, 2023 Mar 31, 2024 Mar 31, 2023 Business Assets (including Provisions) 1,12,454 1,06,339 93,723 1,02,597 82,770 Gross Stage 3 4,309 3,790 4,024 3,491 3,717 Less: Stage 3 ECL Provis
Slide 30: Credit Charge
Credit Charge on standalone basis Particulars (Rs. in crores) Q2FY25 Q1FY25 Q2FY24 H1FY25 H1FY24 FY24 FY23 Stage-1 Provisions 25 (25) 78 - 142 46 117 Stage-2 Provisions 86 89 10 175 88 67 (651) Stage-3 Provisions 297 62 188 358 259 (5) (680) Provisions – P&L Charge 407 126 276 534 489 108 (1,214) Wr
Slide 31: Stage Wise Provisioning
Stage Wise Provisioning on standalone basis Stage-Wise Assets and Provisioning As on 30th Sep 2024 As on 30th Jun 2024 As on 31st Mar 2024 Rs. in crores Business Assets Provisions & Business Assets Provisions & Business Assets Provisions & (Amount and %) Coverage (Amount and %) Coverage (Amount and
Slide 32: Broad Based Liability Mix
Broad Based Liability Mix on standalone basis Funding Mix by Investor Category Funding Mix by type of Instrument Sep’ 24 Jun’ 24 Sep’23 Sep’ 24 Jun’24 Sep’23 Investor Type Instrument Type Amount % Share % Share % Share Amount % Share % Share % Share Banks / Financial NCDs 25,004 24.1% 25.2% 25.2% 59
Slide 33: ALM Position and Liability Maturity
ALM Position and Liability Maturity All figures in Rs. crores 1,40,000 280% Cumulative Inflow Cumulative Outflow Cumulative Mismatch% 1,19,414 1,20,000 240% 1,02,593 1,03,483 1,00,000 88,680 200% 80,000 160% 60,000 51,779 120% 40,037 40,000 23,607 33,832 80% 15,491 23,729 18,949 20,000 10,250 8,793
Slide 34: Financial Information - Consolidated
Providing Financial Solutions to Emerging India Executive Summary Financial Information - Consolidated Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 35: Key Financials
Key Financials on consolidated basis Disbursement Total Income Profit after Tax Q2 FY 25 Rs. 13,873 crores Rs. 4,479 crores Rs. 390 crores (0%) 16% 36% Q2 FY 24 Rs. 287 crores Rs. 13,881 crores Rs. 3,863 crores Rs. 27,253 crores Rs. 8,834 crores Rs. 887 crores H1 FY 25 3% 18% 37% H1 FY 24 Rs. 26,380
Slide 36: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) Q2 FY25 Q1 FY25 Q-o-Q Q2 FY24 Y-o-Y FY24 Revenue from operations (A) 4,465 4,316 3% 3,833 16% 15,797 Less: Finance cost (B) 2,062 1,960 5% 1,703 21% 6,959 NII (C= A-B) 2,403 2,356 2% 2,130 13% 8,838 Other Income (D) 14 39 -64% 30 -53% 17
Slide 37: Consolidated Profit & Loss Account
Consolidated Profit & Loss Account Particulars (Rs. in crores) H1FY25 H1FY24 Y-o-Y FY24 Revenue from operations (A) 8,781 7,416 18% 15,797 Less: Finance cost (B) 4,023 3,300 22% 6,959 NII (C= A-B) 4,758 4,116 16% 8,838 Other Income (D) 54 84 -36% 173 Total Income (E=C+D) 4,811 4,200 15% 9,011 Employ
Slide 38: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. in crores) As on Sep 30, 2024 As on Sep 30, 2023 As on Mar 31, 2024 ASSETS Financial Asset a) Cash and cash equivalents 951 465 904 b) Bank balance other than (a) above 3,684 1,967 2,551 c) Derivative financial instruments - - d) Trade Receivables 180 168
Slide 39: Consolidated Balance Sheet (Contd.)
Consolidated Balance Sheet (Contd.) Particulars (Rs. in crores) As on Sep 30, 2024 As on Sep 30, 2023 As on Mar 31, 2024 LIABILITIES AND EQUITY Financial Liabilities a) Derivative financial instruments 274 268 335 b) Payables i) Trade payables 1,175 1,134 1,679 ii) Other payables 38 38 65 c) Debt Se
Slide 40: Subsidiary Financials
Providing Financial Solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 41: Mahindra Rural Housing Finance Limited
Mahindra Rural Housing Finance Limited Particulars (Rs. in crores) Year ended Q2FY25 Q2FY24 H1FY25 H1FY24 March -24 Loans disbursed 509 482 996 771 2,071 Loans & Advances (net) 7,010 6,625 7,010 6,625 6,933 Total income 302 331 604 673 1,294 PBT 9 15 (66) -15 5 PAT 7 12 (49) -11 4 Net-worth 1,441 1,
Slide 42: Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Limited Particulars (Rs. in crores) Year ended Q2FY25 Q2FY24 H1FY25 H1FY24 March -24 Gross Premium 974 1,025 1,983 2,047 4,556 Total income 261 289 547 453 1,095 PBT 19 38 49 62 168 PAT 13 29 34 46 124 No. of employees (nos.) 619 701 619 701 725 ▪ Business Area: Licensed b
Slide 43: Mahindra Ideal Finance Limited
Mahindra Ideal Finance Limited Particulars (in LKR Mn) Year ended Q2FY25 Q2FY24 H1FY25 H1FY24 March -24 Loans disbursed 7,253 3,225 12,718 4,963 13,941 Loans & Advances (net) 11,072 6,563 11,072 6,563 8,543 Total income 664 588 1,256 1,149 2,309 PBT* 117 90 157 168 334 PAT 45 30 44 55 103 Net-worth
Slide 44: Company Overview
Providing Financial Solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 45: Company Background
Company Background Parentage Mahindra & Mahindra Financial Services Limited (“MMFSL”) is a subsidiary of Mahindra and Mahindra Limited (M.Cap: Rs 3.72 trillion)* About MMFSL MMFSL (M.Cap: Rs 356 billion)*, one of India’s leading non-banking finance companies focused in the rural and semi-urban secto
Slide 46: 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 USA Mahindra Manulife Mahindra Manulife Mahindra Ideal Finance Brokers Limited Housing Finance LLC I
Slide 47: Our Journey
Our Journey Long term debt Partnered with rating upgraded to Manulife for Mutual Equity AAA by India Fund business participation of Ratings and 12.5%by NHB in Brickwork. Maiden Retail Invested in Ideal MRHFL QIP Issue of Rs. Received Corporate NCD Issue of Rs. Finance for providing 426 crores CARE R
Slide 48: Shareholding Pattern (as on September 30, 2024)
Shareholding Pattern (as on September 30, 2024) Shareholding Pattern Top 10 Public Shareholders 6.01% ▪ Life Insurance Corporation of India ▪ HDFC Mutual Fund ▪ SBI Mutual Fund 31.57% ▪ HDFC Life Insurance Company Limited 52.16% ▪ Kotak Mahindra Mutual Fund. ▪ Mirae Asset Mutual Fund ▪ Ashish Dhawan
Slide 49: Extensive Branch Network
Extensive Branch Network ▪ Extensive branch network with presence in 27 states and 7 union Coverage (Circle HQ) territories in India through 1,373 offices ▪ Branches have authority to approve loans within prescribed Delhi Jaipur Lucknow guidelines 21 2 Thane Kolkata 26 33 Chennai Hyderabad Branch Ne
Slide 50: 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 51: Credit Rating
Credit Rating India Ratings Outlook Long term Issuer Rating; Bank Facility; Non-Convertible IND AAA Stable Debenture (incl. MLD) and Subordinated debt; Fixed Deposit IND PP-MLD AAA Short term Bank Facility & Commercial Paper IND A1+ - CRISIL Outlook Long term Bank Facility; Non-Convertible Debenture
Slide 52: Business Strategy
Providing Financial Solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 53: Vision and Customer
Vision “Leading and Responsible Financial Solutions Partner of Choice for Emerging India” Our DNA Our Mantra 1,350+ Branches 6,000+ Dealers Bharat ke PAAS Bharat ke SAATH Scale 10+ OEMs 10M+ Customers Accessible Right Offering 100K Cr AUM – FY’24 Timely Trust Customer Customer Offerings Wheels
Slide 54: Goals to deliver: 2.5% + ROA
Goals to deliver : 2.5 % + ROA Stable Asset Quality Ace CVPs Market Share Returns Maintain <4.5% GS-3 across cycles Top 3 in customer value Maintain 12% market share in Improve RoA to 2.5% proposition wheels + Diversified Portfolio PPC NPS Growth Opex Fee Income 25-30% revenue from Non-wheels 3+ ~60
Slide 55: Building core capabilities to deliver commitments
Building core capabilities to deliver commitments Growth & Asset Quality Profitability Tech & Digital Human Capital Resilient Org. Diversification Risk Wheels Augment Yield Core Tech stack Future ready Org Structure Scorecards Product MS Used / Tractor / SME LOS & LMS Upskilling Branch FCU Dealer +
Slide 56: ESG & CSR
Providing Financial Solutions to Emerging India Executive Summary Financial Information Subsidiary Financials Company Overview Business Strategy ESG & CSR
Slide 57: ESG
ESG Approved SCIENCE-BASED TARGETS Science Based Green House Gas Emissions reduction targets Mahindra and Mahindra Financial Services Ltd. Has participated in validated by Science Based Targets Initiatives (SBTI) . global rating exercise. Details are mentioned below Year Score 2024 48 2023 47 Year S
Slide 58: ESG Awards
ESG Awards Mahindra Finance has won the Bronze Award for Mahindra and Mahindra Financial Services Ltd. secures 1st rank as India’s most Environmental Sustainability by ACEF Asian Business Sustainable Company 2024, in the Financial Services and Insurance sector. The Leaders Award 2024 company demonst
Slide 59: CSR Awards
CSR Awards Mahindra Finance's "Swabhimaan" initiative has been honoured with the CSR Project of the Year Award at the India CSR Summit & Awards 2023-24 Mahindra Finance has won the Gold Award for Mahindra Finance honoured with “Best CSR Initiative & Education & Skills Development and the Bronze Awar
Slide 60: Thank You
Providing Financial Solutions to Emerging India Thank You
Mahindra & Mahindra Financial Services — Q2 FY2025 Earnings Presentation on 6ix