Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q2 FY2024 Earnings Presentation
48 slides from Edelweiss Financial Services's earnings presentation, Nov 10, 2023
Slide 1: Cover letter to stock exchanges
EW/Sec/2023-24/205 November 10, 2023 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001. Mumbai – 400 051. Scrip Code: 532922 Symbol: EDELWEISS Dear Sir/Madam, Sub: Earnings Update Please find enclos
Slide 2: Earnings update – Quarter ended Sep 23
US $ version Edelweiss Financial Services Limited Earnings update – Quarter ended Sep 23
Slide 3: Contents
Contents 1 Overview for quarter ended Sep 23 3 2 Performance highlights 6 3 Key priorities for the next 18 months 20 4 Business performance 22 5 Governance & corporate responsibility 40 Please refer to the detailed business update filed for Mutual Fund business 2
Slide 4: Overview
Overview Quarter ended Sep 23
Slide 5: Edelweiss at a glance – Quarter ended Sep 23
Edelweiss at a glance – Quarter ended Sep 23 Net Worth Ex-Insurance PAT BVPS $724 Mn $18 Mn $0.5 (FV $0.1) Net Debt Liquidity as a % of Debt $1,832 Mn 18% 4
Slide 6: Diversified with seven high-quality businesses
Diversified with seven high-quality businesses Edelweiss Financial Services Ltd (EFSL) Alternative Asset Housing General Mutual Fund NBFC Life Insurance Asset Mgt Reconstruction Finance Insurance Edelweiss Edelweiss Edelweiss Asset ECL Finance Nido Home Zuno General Edelweiss Alternate Asset Reconst
Slide 7: Performance Highlights
Performance Highlights oO Edelweiss Ideas create, values protect
Slide 8: Performance highlights – quarter ended Sep 23
Performance highlights – quarter ended Sep 23 1 Healthy profitability across businesses: MF PAT 55% YoY and Alts PAT 42% YoY 2 Listing of Nuvama Wealth Management on Sep 26, 2023 3 Robust growth in asset management and insurance businesses Alternatives AUM at $6 Bn milestone; MF equity AUM grew 30%
Slide 9: Healthy profitability across businesses
1 Healthy profitability across businesses PAT for the quarter in $ Mn EFSL Alternative Asset Asset Mutual Fund ex-Insurance Management Reconstruction 18 5 2 10 16 9 4 1 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 15% YoY 42% YoY 55% YoY 8% YoY 8
Slide 10: Earnings distribution across businesses
1 Earnings distribution across businesses $ Mn Quarter Ended Business Sep 23 Sep 22 Alternative Asset Management 5 4 Mutual Fund 2 1 Asset Reconstruction 10 9 NBFC 4 4 Housing Finance 0 1 General Insurance (4) (4) Life Insurance (7) (6) Corporate 1 0 EFSL Consolidated PAT (Pre MI) 11 9 (Less) Minori
Slide 11: Listing of Nuvama Wealth Management
2 Listing of Nuvama Wealth Management Step 1 – Capital Raise Step 2 - Demerger Step 3 - Allotment Step 4 - Listing Phase I Phase II & III Allotment Listing Capital raise in NCLT order received and Allot 30% EFSL holdings Listing of Nuvama Nuvama made effective for Phase II to Shareholders of Wealth
Slide 12: A win-win-win for all stakeholders
2 A win-win-win for all stakeholders For Nuvama • Deal led to primary infusion of capital into the business • Equity increased to ~$ 300 Mn; poised the business for further growth • Paved the way for listing For Shareholders of Edelweiss • Opportunity for direct participation in Nuvama’s growth jour
Slide 13: Robust growth across businesses
3 Robust growth across businesses Alternative Asset Management AUM increased 25% YoY to Fee paying AUM grew 32% $6,020 Mn YoY to $3,251 Mn Mutual Fund AUM grew 25% YoY to Equity AUM up 30% YoY to $13,725 Mn $4,118 Mn Asset Reconstruction Acquired debt assets of $157 Share of retail assets in capital
Slide 14: Robust growth across businesses
3 Robust growth across businesses General Insurance Gross written premium grew Awarded Insurtech of the Year by by 18% YoY to $23 Mn The Crown Awards Life Insurance Gross premium increased by Awarded Golden Peacock 18% YoY to $54 Mn award for risk management NBFC Disbursal on-going under CLM Wholesa
Slide 15: Customer reach grows on the back of retail scale up
4 Customer reach grows on the back of retail scale up in Lakhs Customer Reach MF Folios GI Customers 63 12.4 43 49 31 10.8 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 27% YoY 14% YoY 40% YoY 14
Slide 16: Expansion in customer assets led by asset mgt businesses
4 Expansion in customer assets led by asset mgt businesses in $ Mn Customer Assets Alts AUM MF AUM 24,278 6,020 13,725 20,468 4,816 11,077 Sep 22 Sep 23 Sep 22 Sep 23 Sep 22 Sep 23 19% YoY 25% YoY 24% YoY 15
Slide 17: Strong balance sheet with well capitalised businesses
5 Strong balance sheet with well capitalised businesses Businesses Metric Value NBFC Capital Adequacy 39.9% Housing Finance Capital Adequacy 36.6% Asset Reconstruction Capital Adequacy 55.2% Life Insurance Solvency Ratio 195% General Insurance Solvency Ratio 192% 16
Slide 18: Reduced ~$330 Mn of Debt YoY
5 Reduced ~$330 Mn of Debt YoY Net Debt ($ Mn) $ Mn Business Sep 23 2,162 NBFC 731 1,832 Housing Finance 195 Alternatives 34 Asset Reconstruction 343 Corporate * 926 Gross Debt 2,230 (Less) Liquidity 397 Net Debt 1,832 Sep 22 Sep 23 17 * Corporate holds ~14% stake in Nuvama which is in addition to t
Slide 19: Cash flow plan
5 Cash flow plan $ Mn Oct 23 to Sep 24 Opening Available Liquidity (A) 397 Inflows Expected Inflows 710 Fresh borrowings 290 Total Inflows (B) 1,000 Outflows Repayments 746 Disbursements 338 Total Outflows (C) 1,084 Closing Available Liquidity (A+B-C) 313 18
Slide 20: Assets in each tenor range adequately cover liabilities
5 Assets in each tenor range adequately cover liabilities $ Mn Assets Liabilities Excess / (Gap) Up to 1 year 1,469 1,192 277 1-3 years 1,336 1,228 108 3 years+ 1,144 867 277 19
Slide 21: Key priorities for the next 18 months
Key priorities for the next 18 months
Slide 22: Key priorities for the next 18 months
Key priorities for the next 18 months 1 Scale profitability in Alternatives and Mutual Fund businesses 2 Grow retail credit book through co-lending model 3 Build path to profitability in Insurance businesses; breakeven expected by FY27 4 Continue focused reduction in net debt 21
Slide 23: Business Performance
Business Performance oO Edelweiss Ideas create, values protect
Slide 24: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew 25% YoY to $6,020 Mn Equity ($ Mn) 78 • Fee Paying AUM grew 32% YoY to $3,251 Mn • Launched during the quarter – AUM ($ Mn) 6,020 o Climate Fund - offers investors a long
Slide 25: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot $ Mn Sep 23 Sep 22 AUM 6,020 4,816 Fee Paying AUM 3,251 2,456 Equity 78 33 Net Revenue 16 11 Opex 9 7 Profit After Tax 5 4 24
Slide 26: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Investor type 25% 40% 45% $6,020 Mn $3,251 Mn $6,020 Mn 55% 60% 75% Credit Real Assets Credit Real Assets Institutional Non Institutional 25
Slide 27: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 27 • AUM grew by 25% YoY to $13,725 Mn o Market share of 2.41% as on Sep 23 • Equity AUM grew by 30% YoY to $4,118 Mn AUM ($ Mn) 13,725 • Net inflows of $265 Mn during the quarter with a
Slide 28: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot $ Mn Sep 23 Sep 22 AUM 13,725 11,077 Net New Money 265 364 Equity 27 23 Net Revenue 8 6 Opex 7 5 Profit After Tax 2 1 27
Slide 29: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM ($ Mn) MF Debt AUM ($ Mn) 4,118 9,391 3,203 7,561 2,745 5,165 Sep 21 Sep 22 Sep 23 Sep 21 Sep 22 Sep 23 SIP Book ($ Mn) Active Folios (# in Lakhs) 21 12.4 10.8 17 13 8.2 Sep 21 Sep 22 Sep 23 Sep 21 Sep 22 Sep 23 Growing SIP book ad
Slide 30: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 356 • Recoveries of $366 Mn for the quarter, of which 13.5% was from retail portfolio AUM ($ Mn) 4,533 • Acquired debt assets of $157 Mn during the quarter, of which ~40% were retail ass
Slide 31: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot $ Mn Sep 23 Sep 22 AUM 4,533 4,575 Capital Employed 552 625 Wholesale assets 467 545 Retail assets 86 79 Equity 356 315 Gross Revenue 27 30 Opex 4 4 Profit After Tax 10 9 Edelweiss’ share in PAT 6 5 30
Slide 32: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Improved traction in co-lending disbursal with Central Bank Equity ($ Mn) 451 of India, IDFC First Bank and Standard Chartered Bank o Nearly 80% of disbursal during the quarter under co- AUM ($ Mn) 808 lending mod
Slide 33: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot $ Mn Sep 23 Sep 22 AUM 808 1,346 Credit Assets 744 1,290 Gross Loan Book 367 703 Gross Revenue 41 48 Net Revenue 15 15 Opex 7 8 Credit Cost 2 1 Profit After Tax 4 4 GNPA 2.39% 2.72% NNPA 1.39% 1.90% 32
Slide 34: Wholesale reduction on track
NBFC Wholesale reduction on track ECLF wholesale loan assets ($ Mn) 1,288 524 144 Sep 21 Sep 23 Sep 25E Expect momentum to continue with planned reduction 33
Slide 35: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • Disbursed $36 Mn in the quarter, of which nearly 30% Equity ($ Mn) 97 under co-lending model • Partnership with Standard Chartered Bank and State Bank AUM ($ Mn) 462 of India continues to dee
Slide 36: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot $ Mn Sep 23 Sep 22 AUM 462 500 Credit Assets 371 391 Gross Loan Book 350 366 Gross Revenue 14 13 Net Revenue 5 5 Opex 4 4 Credit Cost (0) 0 Profit After Tax 0 1 GNPA 2.21% 2.52% NNPA 1.62% 1.99% 35
Slide 37: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Gross direct premium income (GDPI) growth of 18% YoY Equity ($ Mn) 25 for the quarter • Enabling business digitally - 99.6% of issuance and 93% of payments through digital mode GWP ($ Mn)
Slide 38: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot $ Mn Sep 23 Sep 22 Net Premium Income 11 9 Investment Income & Other 5 3 Income Total Income 16 12 Policy benefits & insurance policy 7 9 liability Other expenses 11 8 Profit After Tax (4) (4) 37
Slide 39: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 75 • Gross premium increased by 18% YoY to $54 Mn • AUM recorded a growth of 19% YoY Individual APE ($ Mn) 14 • Traditional Par and Non-Par products constitute ~80% of product mix #
Slide 40: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot $ Mn Sep 23 Sep 22 Net Premium Income 53 45 Investment Income & Other 24 30 Income Total Income 77 75 Policy benefits & insurance policy 61 61 liability Other expenses 23 20 Profit After Tax (7) (6) Edelweiss’ share in PAT (5) (4) 39
Slide 41: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 42: 7 Member Board with 3 Independent Directors
6 Member Board with 3 Independent Directors Mr. Ashok Kini Independent Director • Former Managing Director (National Banking Group) State Bank of India • Served as an advisor to the Thorat Committee on Financial Inclusion at RBI • 35 years of banking experience Dr. Ashima Goyal Independent Director
Slide 43: Significant institutional ownership
Significant institutional ownership Above 1% Shareholding Pattern as on Sep 30, 2023 Key Shareholders Percent 1 Pabrai Investment Funds 9.3% Employee Trust 2 TIAA CREF funds 4.2% DIIs, Non 4.8% Promoter Group Institutions 3 BIH SA 3.9% & Others 32.8% 4 LIC 2.6% 28.8% 5 Baron Asset Management 2.5% 6
Slide 44: Our contribution to building a more sustainable tomorrow
Our contribution to building a more sustainable tomorrow Under the leadership of EdelGive Foundation, we have… Over ~$105 Mn mobilized Partnered with over 169 Assisted over 60% of EdelGive’s Ensured long term through commitments high caliber NGOs NGO partners to grow at a CAGR association with avera
Slide 45: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 90 Districts Sustainable Women across 12 States Quality Education Livelihoods Empowerment 20 lakh children impacted 2.46 lakh Individuals trained 2.40 lakh women supported 31,000 schools reached 1,825 watershe
Slide 46: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 45
Slide 47: 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 48: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of $56 Mn, Ex-Insurance PAT is post MI Slide 4,17,18: Available Liquidity is calculated as on balance sheet date and includes high quality liquid assets Slide 4,17: Debt includes accrued interest, liabilities on market linked deb
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