Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q4 FY2021 Earnings Presentation
53 slides from Edelweiss Financial Services's earnings presentation, Jun 11, 2021
Slide 1: Cover letter to BSE: Investor Presentation
EW/Sec/2021/104 June 11, 2021 BSE Limited P J Towers, Dalal Street, Fort, Mumbai – 400 001. Dear Sirs, Ref.:- Scrip Code: 532922 Sub: Investor Presentation Please find enclosed the Investor Presentation on Earnings Updates for the financial year ended March 31, 2021. Kindly take the same on record.
Slide 2: Q4FY21 & FY21 Earnings Update
Edelweiss Financial Services Limited Q4FY21 & FY21 Earnings Update
Slide 3: Contents
Contents 1 Q4FY21 & FY21 Highlights 3 2 Update on Key Focus Areas and Outlook 12 3 Business Update 21 4 Balance Sheet Highlights 42 5 Governance and Sustainability 46 2
Slide 4: Q4FY21 & FY21 Highlights
Q4FY21 & FY21 Highlights oO Edelweiss Ideas create, values protect
Slide 5: Edelweiss at a Glance – FY21
Edelweiss at a Glance – FY21 Net Worth Liquidity INR 8,542 Cr INR 6,800 Cr Customer Assets Book Value INR 2,80,800 Cr INR 74 Face Value ₹1 4
Slide 6: We Are A Diversified Company Across Ten Key Entities
We Are A Diversified Company Across Ten Key Entities Edelweiss Financial Services Ltd (EFSL) Housing Mutual Life General Insurance NBFC Alternatives ARC Wealth Mgt Finance Fund Insurance Insurance Broking • ECL • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Ede
Slide 7: Well-Capitalised Businesses And Robust Customer Franchise
Well-Capitalised Businesses And Robust Customer Franchise Businesses Equity (INR Cr) Metric Value NBFC 3,837 Capital Adequacy 27.5% Housing Finance 763 Capital Adequacy 26.5% Mutual Fund 161 AUM ~INR 55,000 Cr Alternatives Asset Mgt 152 AUM ~INR 30,000 Cr Asset Reconstruction 2,222 Capital Adequacy
Slide 8: Distribution of Earnings Across Businesses
Distribution of Earnings Across Businesses Businesses (INR Cr) Edelweiss Holding Q4FY21 FY21 NBFC 100% 132 29 Housing Finance 100% (9) 4 Mutual Fund 100% 1 5 Alternatives Asset Management 100% 1 14 Asset Reconstruction 60% 45 186 Insurance Broking 70% 11 15 Wealth Management 38.5% 65 245 BMU & Corpo
Slide 9: Increasing Contribution of Fee Income
Increasing Contribution of Fee Income Fee Income (INR Cr) 543 464 477 411 385 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 8
Slide 10: FY21 Results Highlights (1)
FY21 Results Highlights (1) • Retail collection efficiency improved to 94% in Mar’21 NBFC • Workouts on-going in wholesale book for recoveries and resolution • Collection efficiency improved to 99% of pre-covid levels in Mar’21 Housing Finance • Asset Light model with securitization of ~INR 900 Cr i
Slide 11: FY21 Results Highlights (2)
FY21 Results Highlights (2) • Robust recoveries of ~INR 5,400 Cr in FY21 from 179 borrowers Asset Reconstruction • Reduced net debt by ~22% YoY as deleveraging continued • 25% YoY growth in Individual APE Life Insurance • ETLI is the only life insurer that grew every month in FY21 General • 49% YoY
Slide 12: Prioritised Employee and Community Well-being During Covid
Prioritised Employee and Community Well-being During Covid • Safety for all employees and families • Onsite - Vaccination Drives and reimbursements for all employees and their families • 24*7 Counselling support, outreach and wellness initiatives for mental well-being • Stood strong with affected em
Slide 13: Update on Key Focus Areas and Outlook
Update on Key Focus Areas and Outlook
Slide 14: Update On Our Key Focus Areas
Update On Our Key Focus Areas 1 Value unlocking in Edelweiss Wealth Management 2 Strengthened Balance Sheet 3 Reduced Wholesale Credit Exposure 4 Maintained Asset Quality 5 Reduced Fixed Costs 13
Slide 15: Value Unlocking in Edelweiss Wealth Management (EWM)
1 Value Unlocking in Edelweiss Wealth Management (EWM) Completed the stake sale to PAG in March 2021 at a valuation of INR 4,400 Cr Strong equity base for growth in EWM from Primary Equity infusion of INR 400 Cr EFSL will hold 38.5% stake in EWM with an option to increase it to ~44% Demerger progres
Slide 16: Strengthened Balance Sheet With Conservative Provisioning
2 Strengthened Balance Sheet With Conservative Provisioning Balance Sheet Provisions IRAC Provisions IndAS Provisions (INR Cr) 904 758 768 640 417 155 154 172 H1FY20 H2FY20 H1FY21 H2FY21 We have consistently provided higher than IRAC norms 15
Slide 17: Borrowings Declined By 41%, Debt Equity Ratio Declined Further
Borrowings Declined By 41%, Debt Equity Ratio Declined 2 Further Borrowings (INR Cr) D/E (Excl Treasury Assets) 43,201 4.4 33,754 3.5 25,695 2.5 FY19 FY20 FY21 FY19 FY20 FY21 16
Slide 18: Wholesale Credit Exposure Continues To Scale Down
3 Wholesale Credit Exposure Continues To Scale Down ECLF Wholesale Loan Assets (INR Cr) 17,678 12,973 11,413 FY19 FY20 FY21 17
Slide 19: Retail Collection Efficiency Is Strong
4 Retail Collection Efficiency Is Strong Total Retail Credit Collections (INR Cr) 1,120 1,078 858 452 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Increased digital customer engagement has improved total retail collection efficiency to 96% in Mar’21 18
Slide 20: Cost Rationalisation Measures Under Way
5 Cost Rationalisation Measures Under Way FY21 Fixed Cost comparison (INR Cr) • Achieved overall fixed cost reduction of ~23% in FY21 over FY20 cost base 2,200 • Key saving drivers in FY21 vs. FY20: 1,700 • Fixed People Cost : Decrease of ~18% driven by process efficiencies • Premises Cost : Lower b
Slide 21: FY22 Outlook
FY22 Outlook 1 Continue to focus on balance sheet and liquidity strengthening 2 Invest and scale up our Retail Credit, Asset Management and Insurance businesses 3 Progress & complete EWM demerger to prepare for listing by Sept-Dec 22 4 Expect subdued profitability for the year due to : • Likely impa
Slide 22: Business Update
4 ° 3 ' - ‘ : ; : : f : je : ; 4 ' : ' : t be Business Update oO Edelweiss Ideas create, values protect
Slide 23: NBFC : ECLF and ERFL
NBFC NBFC : ECLF and ERFL FY21 Key Metrics Business Update Retail Credit ECLF & ERFL • Robust collection infrastructure Equity (INR Cr) 3,837 • Total collections was at ~INR 650 Cr in Q4FY21 and ~INR 2,050 Cr in FY21 AUM (INR Cr) 10,526 • Maintained conservative stance on disbursements • Disbursed ~
Slide 24: Business Performance Snapshot : ECLF and ERFL
NBFC Business Performance Snapshot : ECLF and ERFL INR Cr Q4FY21 FY21 Credit Assets 15,238 15,238 Equity 3,837 3,837 Net Revenue 6 441 Opex 108 578 Credit Costs (121) (10) Profit After Tax 132 29 NIM 0.2% 2.6% Gross Stage 3 loans 780 780 Total Provision Cover 76% 76% Capital Adequacy 27.5% 27.5% Sig
Slide 25: Housing Finance : EHFL
Housing Finance Housing Finance : EHFL FY21 Key Metrics Business Update • Maintained collection efficiency of 99% in Mar’21 Equity (INR Cr) 763 • Collections of ~INR 450 Cr in Q4FY21 and ~INR 1,500 Cr in FY21 AUM (INR Cr) 4,385 • Adopted conservative stance on disbursements • Disbursed ~INR 250 Cr i
Slide 26: Business Performance Snapshot : EHFL
Housing Finance Business Performance Snapshot : EHFL INR Cr Q4FY21 FY21 Credit Assets 4,545 4,545 Equity 763 763 Net Revenue 35 162 Opex 33 119 Credit Costs 16 51 Profit After Tax (9) 4 NIM 3.7% 3.5% Gross Stage 3 loans 128 128 Total Provision Cover 39% 39% Capital Adequacy 26.5% 26.5% 25
Slide 27: Mutual Fund : EAML
Mutual Fund Mutual Fund : EAML FY21 Key Metrics Business Update • AUM has nearly doubled in FY21 Equity (INR Cr) 161 • Crossed INR 10,000 Cr of equity assets • Net equity Q4FY21 inflows of INR 2,000 Cr against industry outflows of INR 4,500 Cr AUM (INR Cr) ~55,000 • Launched India’s first passively
Slide 28: Business Performance Snapshot
Mutual Fund Business Performance Snapshot INR Cr Q4FY21 FY21 AUM 55,000 55,000 Equity 161 161 Net Revenues 39 120 Operating costs 38 115 Profit before tax 1 5 Profit after tax 1 5 27
Slide 29: Consistent Rise in Equity Sales and SIPs
Mutual Fund Consistent Rise in Equity Sales and SIPs Mutual Fund Equity Gross Sales (INR Cr) Mutual Fund SIP Flows (INR Cr) 125 2,719 121 109 93 84 85 88 77 1,522 67 60 57 57 62 858 705 588 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Mar'20 May'20 Jul'20 Sep'20 Nov'20 Jan'21 Mar'21 Net equity inflows of INR
Slide 30: Alternatives Asset Management : EAAA
Alternatives Alternatives Asset Management : EAAA FY21 Key Metrics Business Update • FY21 is the largest fund raise year for Alternatives Equity (INR Cr) 152 • Raised ~INR 6,600 Cr in ESOF III - largest fund raise in India in 2020 • Closed Infrastructure Yield fund at ~INR 3,300 Cr AUM (INR Cr) ~30,
Slide 31: Business Performance Snapshot : EAAA
Alternatives Business Performance Snapshot : EAAA INR Cr Q4FY21 FY21 AUM 30,000 30,000 Equity 152 152 Net Revenues 44 164 Operating costs 43 150 Profit before tax 1 14 Profit after tax 1 14 30
Slide 32: Robust Growth In Alternative Assets
Alternatives Robust Growth In Alternative Assets Alternatives AUM (INR Cr) Alternatives AUM – Strategy wise 30,000 11% 38% 19% INR 30,000 Cr 32% 3,400 Distressed Credit Fund Structured Debt Fund FY16 FY21 Real Estate Credit Fund Infrastructure Fund 31
Slide 33: Asset Reconstruction : EARC
ARC Asset Reconstruction : EARC FY21 Key Metrics Business Update Equity (INR Cr) 2,222 • Fee income remains robust • Gross recoveries of ~INR 5,400 Cr in FY21 from 179 borrowers AUM (INR Cr) 40,800 • Q4FY21 recoveries at INR 1,800 Cr • Comfortable liquidity position of ~INR 540 Cr as on Recoveries (
Slide 34: Business Performance Snapshot : EARC
ARC Business Performance Snapshot : EARC INR Cr Q4FY21 FY21 AUM 40,800 40,800 Capital Employed 5,100 5,100 Equity 2,222 2,222 Gross Revenues 211 867 Net Revenues 79 340 Operating costs 32 97 Profit before tax 53 245 Profit after tax 45 186 33
Slide 35: Life Insurance : ETLI
Life Insurance Life Insurance : ETLI FY21 Key Metrics Business Update Equity (INR Cr) 536 • Crossed INR 400 Cr APE milestone for the first time - registering a 25% YoY Growth Individual APE (INR Cr) 404 • Launched 2 new products in this quarter #Policies Issued ~80,200 in FY21 • Individual Claims se
Slide 36: Business Performance Snapshot : ETLI
Life Insurance Business Performance Snapshot : ETLI INR Cr Q4FY21 FY21 Net Premium Income 472 1,188 Investment Income & Other Income 98 678 Total Business 570 1,866 Profit After Tax (40) (207) Minority (19) (101) Edelweiss’ Share in PAT (20) (105) 35
Slide 37: Among The Fastest Growing In The Industry
Life Insurance Among The Fastest Growing In The Industry Individual APE CAGR Since FY16 vs Industry Individual APE - Outpaced Industry growth YoY in FY21 24% 25% 11% 10% 3% -3% Edelweiss Tokio Peer Set Industry Edelweiss Tokio Peer Set Industry Life Insurance Life Insurance 36
Slide 38: General Insurance : EGICL
General Insurance General Insurance : EGICL FY21 Key Metrics Business Update • Registered GDPI growth of 18% in Q4FY21 taking the Equity (INR Cr) 119 overall premium growth for FY21 to ~49% YoY • Consistent growth in our choice of segments : Health- Retail & Motor segments GWP (INR Cr) 226 • Adoptio
Slide 39: Fastest Growing Player In The Industry Enabled By Digital Model
Fastest Growing Player In The Industry Enabled By General Insurance Digital Model Robust YoY growth in GDPI in FY21 Strong YoY GDPI performance in Retail Lines compared to the Industry in FY21 184% 49% 46% 25% 5% -2% Edelweiss General Industry Motor Retail Health Insurance Edelweiss General Insuranc
Slide 40: Wealth Management : ESL
Wealth Mgt Wealth Management : ESL FY21 Key Metrics Business Update • Franchise continues to have dominant presence AUA (INR Cr) ~1,55,000 • AUA grew 36% and Clients grew 22% YoY • Enhanced client engagement driven by tech-first Net New Money ~8,500 approach (INR Cr) • Capital Market & Advisory: 12
Slide 41: Business Performance Snapshot : ESL
Wealth Mgt Business Performance Snapshot : ESL INR Cr Q4FY21 FY21 AUA 1,55,000 1,55,000 Equity 1,563 1,563 Gross Revenues 408 1,288 Net Revenues 320 1,043 Operating costs 244 735 C/I Ratio 76% 70% Profit before tax 75 303 Profit after tax 65 245 40
Slide 42: Wealth Assets Continue To Maintain Robust Growth
Wealth Mgt Wealth Assets Continue To Maintain Robust Growth Wealth Management AUA (INR Cr) No of Clients (#) 155,000 702,600 375,000 29,500 FY16 FY21 FY16 FY21 41
Slide 43: Balance Sheet Highlights
Balance Sheet Highlights oO Edelweiss Ideas create, values protect
Slide 44: Liquidity & Cash Flow Plan
Liquidity & Cash Flow Plan Particulars (INR Cr) Apr’21-Sep’21 Oct’21-Mar’22 Opening Available Liquidity (A) 6,800 6,100 Inflows Expected Inflows 4,500 5,000 Fresh Borrowings 3,000 3,000 Total Inflows (B) 7,500 8,000 Outflows Repayments 5,800 7,100 Disbursements 2,400 1,800 Total Outflows (C) 8,200 8
Slide 45: Borrowing Profile
Borrowing Profile Borrowing Profile by Instruments Borrowing Profile by Source 2% 20% 33% 11% 43% 65% 26% Loans & OD NCDs CPs Banks Retail MF PF, Insurance & FIs INR 25,695 Cr INR 25,695 Cr 44
Slide 46: Assets in each Tenor Range Adequately Cover Liabilities
Assets in each Tenor Range Adequately Cover Liabilities (INR Cr) Assets Liabilities Gap Upto 1 year 13,550 12,450 1,100 1-3 years 12,600 10,000 2,600 3 years+ 14,100 10,000 4,100 Total gap represents our equity base 45
Slide 47: Governance and Sustainability
Governance and Sustainability
Slide 48: 12 Member Board Comprises Majority of Independent Directors
12 Member Board Comprises Majority of Independent Directors Mr. P N Venkatachalam Dr. Ashima Goyal Independent Director Independent Director • Banking sector expert and former member of the • Professor at Indira Gandhi Institute of Development Research Interim Pension Fund Regulatory Authority of In
Slide 49: Significant Institutional Ownership
Significant Institutional Ownership Shareholding Pattern as on 31st Mar,2021 Key Shareholders above 1% Percent 1 Pabrai Investment Funds 7.2% Employee Trust 2 BIH SA 5.2% DIIs, Non 4.8% Promoter Group Institutions 3 TIAA CREF funds 5.0% & Others 22.6% 32.9% 4 Baron Asset Management 3.4% 5 LIC 2.6% 6
Slide 50: Our Sustainability Efforts
Our Sustainability Efforts EdelGive Foundation’s commitment to Achieving the SDGs (Cumulative till FY21) 123 Districts Sustainable Women across 14 States Quality Education Livelihoods Empowerment INR 12.52 Cr* INR 92.88 Cr* INR 1.36 Cr* INR 130.43 Cr * 19.48 lakh Children 1,553 hectares of irrigated
Slide 51: EdelGive Funding Partners & Networks
EdelGive Funding Partners & Networks We have partnered with some of the largest Foundations, Corporates and HNIs through our innovative models focused on collaboration 50
Slide 52: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 53: Safe Harbour
Safe Harbour Slide 4,16 : Net worth is including MI and includes investment in CCD by CDPQ of INR 866 Cr; It excludes EWM equity as it ceased to be our subsidiary as on 26th Mar’21 Slide 4,6,26,27,29,30,31,32,33,39,40,41 : Customer Assets, AUM, AUA, clients, folios, capital employed are rounded off
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