Cholamandalam Investment And Finance Co. Ltd. · NSE:CHOLAFIN
Cholamandalam Investment And Finance — Investor Presentation (September 2016)
46 slides from Cholamandalam Investment And Finance's investor presentation, September 2016
Slide 1: Corporate Presentation – September 2016
Cholamandalam Investment and Finance Company Limited Corporate Presentation – September 2016
Slide 2: Table of Contents
Table of Contents Corporate Overview Business Overview Funding Profile Business Enablers Financial Performance Subsidiaries 2
Slide 3: Corporate Overview
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Slide 4: Company's Highlights
Company’s Highlights 1 Positioning 2 Exceptional Lineage Established in 1978, one of India’s A part of the ₹ 295 bn Murugappa leading NBFC’s, focused in the rural Group – founded in 1900, one of and semi-urban sector with a India's leading business conglomerates market capitalisation of ₹ 184bn1
Slide 5: Journey So Far
Journey So Far … Consistently profit making and dividend paying1 company since 1979 with a strong track FY - 2015 record of dividends to shareholders Infusion of CCPS of FY - 2013 ₹ 5,000 mn Total Assets under H1 FY17 Management India Ratings addition of have crossed Upgraded 103 branches ₹ 200 bn S
Slide 6: Major Companies – Murugappa Group
Major Companies – Murugappa Group Market Company Name Description Capitalisation Cholamandalam Investment and Finance Company Limited is a Non Banking ₹ 1,83,709 mn Finance Company and one of the leading financial provider for vehicle finance, (US$ 2,756 mn) business finance, home equity loans,
Slide 7: Strong Corporate Governance
Strong Corporate Governance “The fundamental principle of economic activity is that no man you transact with will lose, then you shall not." 7
Slide 8: Management – Board Level
Management – Board Level Mr. M.B.N. Rao – Chairman & Independent Director •Is a graduate in agriculture, an Associate of the Chartered Institute of Bankers, London, a Certified Associate of the Indian Institute of Bankers and a Fellow of the Indian Institute of Banking & Finance. Holds a Diploma in
Slide 9: Management – Board Level
Management – Board Level Mr. Nalin Mansukhlal Shah – Independent Director •Is a Chartered Accountant from the Institute of Chartered Accountants in England & Wales. •Has over 32 years of experience in banking and financial services industries. •Was a member of the Governing Board of Deloitte India f
Slide 10: Corporate Overview
Corporate Overview Shareholding Pattern Chola Finance - Share Price Growth Institutions, 95% 17% 75% 55% Public, 5% 35% 15% -5% FII, 25% Promoters, -25% 53% Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Chola Finance Sensex Promoters share holding of 53.13% includes Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Tube
Slide 11: Corporate Overview
Corporate Overview Business Segments Overview Portfolio Breakup AUM * (₹ mn) FY14 FY15 FY16 H1FY16 H1FY17 YoY Growth Vehicle Finance Vehicle Finance OLDER TRACTOR, 9% CE, 2% On Book 1,41,787 1,49,215 1,79,144 1,60,592 1,93,539 21% VEHICLES, 14% HCV, 16% Assigned 28,857 27,171 21,859 21,325 21,269 0%
Slide 12: Corporate Overview
Corporate Overview FY14 FY15 FY16 H1FY16 H1FY17 YoY Disbursements (₹ mn) Growth Vehicle Finance 1,01,281 93,627 1,23,830 53,782 65,733 22% Home Equity 28,097 30,434 34,764 16,003 18,927 18% Gold - 618 - - - - MSME 1,371 2,490 3,253 1,117 3,420 206% Home Loans 393 892 1,746 737 1,523 107% Agri – 15 2
Slide 13: Strong Geographical Presence
Strong Geographical Presence Jammu & Kashmir (1) Branch Network 637 529 534 534 167 Punjab (25) Himachal 94 Pradesh (5) 153 167 164 186 Harayana Uttarakhand (8) 153 180 (16) 144 163 Delhi (8) 123 102 68 83 87 53 32 32 49 34 Rajasthan (53) UP (32) Assam (12) FY14 * FY15 FY16 H1FY17 Bihar (22) A B C D
Slide 14: Chola - Financial Summary
Chola - Financial Summary Disbursements Assets Under Management (₹ mn) (₹ mn) *1,63,803 5,208 *3,18,916 *1,31,142 *2,96,504 *1,28,076 *2,54,525 *2,68,641 1,764 4,015 34,764 *2,32,534 44,547 41,643 28,097 30,434 *90,049 35,482 37,227 *71,793 5,389 40,874 2,008 18,927 16,003 53,782 65,733 1,01,281 93,
Slide 15: Chola - Financial Summary (Cont'd)
Chola - Financial Summary (Cont’d) Net Income Margin (A) Expense Ratio (B) (Operating Income - Finance Charges) 8.7% 8.5% 8.4% 3.4% 3.6% 3.5% 7.9% 3.4% 3.4% 7.7% FY14 FY15 FY16 H1FY16 H1FY17 FY14 FY15 FY16 H1FY16 H1FY17 Losses and Provisions (C) ROTA (PBT) (D) = (A) - (B) - (C) 1.9% 1.8% 1.7% 3.8% 3
Slide 16: Performance Highlights – Q2 & H1FY17
Performance Highlights – Q2 & H1FY17 Disbursements Profit after Tax ROTA (PBT) Book Value EPS* ROE* Q2-FY17 ₹ 44,441 mn ₹ 1,709 mn 3.7% ₹ 255.7 ₹ 43.4 17.7% 21% 42% 22% 17% 34% 23% Q2-FY16 ₹ 36,718 mn ₹ 1,205 mn 3.1% ₹ 218.1 ₹ 32.2 14.3% Disbursements Profit after Tax ROTA (PBT) Book Value EPS* ROE*
Slide 17: Portfolio Performance
Portfolio Performance 4.4% 3.5% 3.5% 3.1% 3.0% 2.0% 2.1% 2.0% 1.9% 1.4% 1.4% 1.5% 1.1% 1.1% 0.7% 2013-14 2014-15 2015-16 H1FY16 H1FY17 (6months+) (5 months+) (4 months+) (4 months+) (4 months+) GNPA Provision NNPA Note: GNPA is presented at 4 months overdue. Provision to meet 3 months overdue alread
Slide 18: Update: H1FY17
Update: H1FY17 Disbursements Disbursement for H1FY17 stood at Rs. 90,049 mn, a growth of 25% YoY. PAT PAT for H1FY17 stood at Rs. 3,367 mn, a growth of 46% YoY. RoE Return on equity at 17.6% in H1FY17, a growth of 25% YoY. Provisioning The one-time additional provision of Rs.54 crores created in FY1
Slide 19: Business Overview
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Slide 20: Vehicle Finance
Vehicle Finance 20
Slide 21: Vehicle Finance - Industry
Vehicle Finance - Industry Overall CV Mix (in Units) Trend in Domestic M & HCV Sales (in Units) 31% 24% 24% 40% 1,08,679 1,05,427 43% 46% 71,512 76,877 45% 42% 33% 30% 19% 24% Sep-13 Sep-14 Sep-15 Sep-16 HCV SCV/3W Pick ups LCV Sep-13 Sep-14 Sep-15 Sep-16 Trend in Domestic LCV Sales (in Units) Trend
Slide 22: Vehicle Finance – Business Model & Positioning
Vehicle Finance – Business Model & Positioning Low Losses 0.75 % CV Industry Low Chola Position ~65% of disbursements Rates Principal Operator are to micro & small New – 11 % to 12.5 % > 50 Vehicles enterprises and agri Used – 14.50% - 16 % based customer segment Large Operators 26- 50 vehicles HCV
Slide 23: Vehicle Finance - Key Differentiators
Vehicle Finance - Key Differentiators Quicker Turn Around Time – (TAT) Reputation as a long term and stable player in the market Strong dealer and manufacturer relationship Good penetration in Tier II and Tier III towns In house sales and collection team which is highly experienced and stable Low em
Slide 24: Vehicle Finance - Disbursement / Portfolio Mix – H1FY17
Vehicle Finance - Disbursement / Portfolio Mix – H1FY17 Well diversified across geography & product segments Disbursements - State wise Portfolio – State wise MP 6% AP 5% KARNATAKA 5% MP 6% AP 6% MAHARASHTRA KARNATAKA 5% 12% KERALA 4% MAHARASHTRA 12% Pondicherry 0% KERALA 4% TELANGANA 3% Pondicherry
Slide 25: Vehicle Finance - Financial Summary
Vehicle Finance - Financial Summary Maintaining a healthy growth in Disbursement and PBT while coping with a sustained slowdown in the M&HCV segment Disbursements Assets Under Management (₹ mn) (₹ mn) *2,14,808 1,23,830 *2,01,003 *1,76,386 *1,81,917 21,269 *1,70,645 21,859 1,01,281 21,325 93,627 28,
Slide 26: Vehicle Finance - Financial Summary (Cont'd)
Vehicle Finance - Financial Summary (Cont’d) Net Income Margin (A) Expense Ratio (B) (Operating Income - Finance Charges) 8.5% 8.1% 8.1% 7.5% 3.8% 3.8% 3.8% 7.1% 3.5% 3.6% FY14 FY15 FY16 H1FY16 H1FY17 FY14 FY15 FY16 H1FY16 H1FY17 Losses and Provisions (C) ROTA (PBT) (D) = (A) - (B) - (C) 3.0% 3.1% 2
Slide 27: Home Equity
Home Equity 27
Slide 28: Home Equity - Overview
Home Equity - Overview Asset Class Self Occupied Residential Property Long tenor loans serviced across 83 locations PAN India Major Players ICICI Bank HDFC Bank AXIS Bank Bajaj Finance PSU Banks Customer Segment Clear focus on the middle Socio Economic Class (SEC) of B & C Self Emp
Slide 29: Home Equity - Key Differentiators
Home Equity - Key Differentiators Process Differentiator One of the best turnaround times in the industry Personalised service to customers through direct interaction with each customer Pricing Pricing in line with Industry maintaining net interest margin Fee Income adequate to cover origina
Slide 30: Home Equity - Financial Summary
Home Equity - Financial Summary Disbursements Assets Under Management (₹ mn) (₹ mn) 34,764 *95,687 30,434 *88,518 28,097 *80,902 *72,799 23,278 *58,604 19,784 8,312 15,902 18,927 12,016 16,003 46,588 64,487 68,734 64,999 72,409 FY14 FY15 FY16 H1FY16 H1FY17 FY14 FY15 FY16 H1FY16 H1FY17 On Book Assign
Slide 31: Home Equity - Financial Summary (Cont'd)
Home Equity - Financial Summary (Cont’d) Net Income Margin (A) Expense Ratio (B) (Operating Income - Finance Charges) 5.6% 5.4% 5.1% 5.1% 4.5% 1.6% 1.3% 1.2% 1.2% 1.2% FY14 FY15 FY16 H1FY16 H1FY17 FY14 FY15 FY16 H1FY16 H1FY17 Losses and Provisions (C) ROTA (PBT) (D) = (A) - (B) - (C) 0.9% 3.8% 3.7%
Slide 32: Funding Profile
Funding Profile 32
Slide 33: CAR, Credit Rating and ALM Statement
CAR, Credit Rating and ALM Statement ALM Statement as on Sep 2016 ₹ mn Tier I Tier II Cum Capital Adequacy Ratio Time Buckets Outflows Inflows Mismatch Mismatch 21.24 1–14 Days 12,251 13,082 830 830 20.93 19.68 15–30/31 Days 5,362 8,913 3,551 4,381 18.69 17.23 Over 1–2 Months 10,903 11,223 320 4,702
Slide 34: Diversified Borrowings Profile
Diversified Borrowings Profile ₹ mn * 2,48,130 *2,25,762 *2,06,368 *1,94,752 *1,80,932 97,646 1,11,200 1,01,065 1,01,965 91,812 34,740 10,491 27,560 13,615 5,647 4,975 13,765 22,038 12,449 26,006 79,165 39,687 48,466 51,836 35,654 21,813 26,087 26,087 26,087 26,087 Mar-14 Mar-15 Mar-16 H1FY16 H1FY17
Slide 35: Business Enablers
--- TECHNOLOGY LEVERAGE
Slide 36: Technology
Technology Overview: Applications (Cont’d) Planning & Budgeting – Provides a world class planning tool The company deploys a hybrid resource model that using Hyperion for inclusive budgeting by utilising both top- optimises use of vendor platforms and resources and at the down and bottom-up approach
Slide 37: Risk Management
Risk Management Risk Management Committee (RMC): Risk Management (contd..) RMC comprises Chairman, three Independent Directors and ALCO meets every month to discuss treasury operations related the Managing Director besides the senior management as risk exposures within the financial risk managem
Slide 38: Financial Performance
Financial Performance Enter a better life 3g Murugappa
Slide 39: Profit and Loss Account
Profit and Loss Account ₹ mn Particulars FY14 FY15 FY16 H1FY16 H1FY17 Disbursements 1,31,142 1,28,076 1,63,803 71,793 90,049 Operating Income 32,628 36,912 41,937 20,035 22,712 Finance Charges 17,711 19,604 20,508 10,068 11,175 Net Income Margin 14,918 17,308 21,429 9,966 11,537 Expenses 6,582 7,489
Slide 40: Balance Sheet
Balance Sheet ₹ mn Particulars Mar-14 Mar-15 Mar-16 Sep-15 Sep-16 Equity and Liabilities Shareholders’ Funds 22,947 31,733 36,574 34,035 39,947 Current Liabilities 92,760 78,892 1,27,214 1,00,981 1,25,181 Non-current Liabilities 99,761 1,28,106 1,15,095 1,18,802 1,40,502 Total 2,15,468 2,38,732 2,78
Slide 41: Subsidiaries
Subsidiaries Enter a better life 41 Murugappa
Slide 42: Subsidiaries
Subsidiaries ₹ mn ₹ mn Cholamandalam Distribution Services Cholamandalam Securities Ltd Ltd 144 128 131 126 118 80 82 62 57 65 32 47 57 16 15 47 5 16 25 (4) FY14 FY15 FY16 H1FY16 H1FY17 FY14 FY15 FY16 H1FY16 H1FY17 Income PAT Income PAT Wealth management services for mass affluent and affluent B
Slide 43: NPA Provisioning Standards
NPA Provisioning Standards Vehicle Home RBI Norms Finance Equity 5 to 20.99 Months – 10% VF Prime, CE Home Equity & 21 to 32.99 Months – 20% 4 to 5.99 Months – 10% Home Loan 33 to 56.99 Months – 30% 6 to 23.99 Months – 25% 4 to 5.99 Months – 10% Above 57 Months – 50% Above 24 Months – 100% 6 to 23.9
Slide 44: Contact Us
Contact Us Our Registered Office: Cholamandalam Investment and Finance Company Limited (Chola), Dare House 1st Floor, No. 2, NSC Bose Road, Parrys, Chennai 600001. Toll free number : 1800-200-4565 (9 AM to 7 PM) Land Line: 044 – 3000 7172 http://www.cholamandalam.com Email-ID : Sujatha P-Sr. Vice Pr
Slide 45: Disclaimer
Disclaimer • Certain statements included in this presentation may be forward looking statements made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Cholamandalam Investment and Finance Company Ltd and its subsidiaries. There can
Slide 46: Thank You
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