Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q2 FY2017 Earnings Presentation
41 slides from Muthoot Finance's earnings presentation, September 2016
Slide 1: Financial Results Q2 FY 2017
Financial Results Q2 FY 2017 September 2016 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: 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 4: MFIN - A Glimpse
MFIN - A GLIMPSE 29 150 tonnes States/Union territory presence Gold jewellery kept as security 4,300+ 400,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 23,000+ 130,000+ Team members Customers served every day ` 274,564 mn Retail Loan Assets Under Manag
Slide 5: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 75% stake 23.75 1.63 NSE Ticker MUTHOOTFIN (%) Shareholding as on September 30, 2016 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on September 30, 2016) ` 139,189 million 74.63 4
Slide 6: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Dividend (% )* 60 60 60 45 40 First Interim Dividend (%) 40 40 30 - - - Second Interim Dividend (%) 20 20 - - Final Dividend (%) - 20 10 45 40 Dividend Payout Ratio (%) 29.50 35.36 28.59 16.65 1
Slide 7: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4327 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 15 5 Himachal Pradesh 4 Chandigarh Punjab 8 172 Uttarakhand 63 15 East West Haryana 21 122 Delhi 226 North South Rajasthan Uttar Pradesh Assam 129 13 147 17 (As of
Slide 8: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth Sep-16 Jun-16 Mar-16 Sep-15 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Share Capital 3,991 3,991 3,990 3,980 0 0 Reserves & Surplus 57,901 54,924 52,202 48,591 19 5 Total 61,892 58,915 56,192 52,571 18 5
Slide 9: Assets
ASSETS Core focus continues to be gold loan Gross retail loan assets under management Sep-16 Jun-16 Mar-16 Sep-15 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross retail loan assets 274,564 258,606 243,789 248,734 10 6 under management Break-up of Gross
Slide 10: Liabilities
LIABILITIES Stable sources of funding Sep-16 Jun-16 Mar-16 Sep-15 Growth Growth (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures 32,692 36,355 40,909 50,629 (35) (10) (Muthoot Gold Bonds) Secured Non-Convertible 32,693 40,044 36,403 31,23
Slide 11: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY YoY QoQ H1 FY H1 FY Q2 FY Q2 FY Q1 FY Growth Growth Growth FY 2016 2017 2016 2017 2016 2017 (%) (%) (%) INCOME Interest Income 26,278 22,534 17 13,526 11,254 20 12,752 6 48,130 Other Income 592 291 103 336 145 132 256 31 620 Total 26,870 22
Slide 12: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in million) 300,000 273,980 260,004 248,250 250,000 244,173 258,226 243,355 216,179 233,499 200,000 157,281 150,000 100,000 73,417 50,000 21,790 6,431 7,569 14,201 33,001 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
Slide 13: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 160 144 146 150 142 137 134 131 140 118 120 112 100 80 66 60 39 40 30 23 15 16 20 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Sep-15 Mar-16 Jun-16 Sep-16 12
Slide 14: 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-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Sep-15 Mar-16 Jun-16 Sep-16 East 0 1 1 2 3 4 5 6 6 6 7 7 7 West 3 4 5 8 8 10 11 13 15 16 17 18 18 North 13 13 14 15 15 17 19 22
Slide 15: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 66.39 63.69 63.32 65 58.43 57.55 55.01 60.14 55 56.93 45 50.63 45.74 33.50 35 25.77 30.82 25 17.24 17.40 15 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-1
Slide 16: Return on Average Retail Loan Asset
RETURN ON AVERAGE RETAIL LOAN ASSET Attractive returns over the years Yearly (%) Quarterly (%) 4.50 4.40 4.45 4.21 4.50 4.38 4.25 4.30 4.05 4.25 3.94 4.24 4.00 4.00 3.75 3.46 3.75 3.50 3.32 3.50 3.49 3.22 3.25 3.25 3.00 3.00 2.95 3.03 2.83 2.75 2.75 2.50 2.50 Mar-07Mar-08Mar-09Mar-10Mar-11Mar-12Mar-
Slide 17: Non-Performing Assets & Bad Debts
NON-PERFORMING ASSETS & BAD DEBTS Non-Performing Assets (` in million) Sep-16 Jun-16 Mar-16 Sep-15 Gross Non-Performing Assets 6,016 5,618 7,025 6,341 Provision For Non-Performing 1,019 1,019 1,019 857 Assets Net Non-Performing Assets 4,997 4,599 6,006 5,484 % of Gross NPA on Gross Retail 2.19 2.17
Slide 18: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile (%) 3 Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 32,692 mn (15%) 14 15 Secured Non-Convertible Debentures – Listed – ` 32,693 mn (15%) 2 Borrowings from Banks/Fis - ` 89,504 mn (42%) 9 15 Subordinated Debt – ` 20,298 mn (9%) Su
Slide 19: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Degree of safety with regard to timely payment of CRISIL 40,000 CRISIL A1+ interest & principal on the instrument is very strong ICRA 2,000 ICRA A1+ Lowest credit
Slide 20: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly Quarterly 60,000 60,000 53,641 49,077 48,130 50,000 45,280 42,703 50,000 40,000 40,000 30,000 30,000 26,278 22,983 22,534 20,000 20,000 13,526 11,254 12,752 10,000 6,062 10,775 10,000 2,236 3,579 0 0 Mar-07Mar-08Mar-09Mar-10Mar-11Mar-12M
Slide 21: Operating Expenses to Average Retail Loans
OPERATING EXPENSES TO AVERAGE RETAIL LOANS Operational efficiency over the years Yearly (%) Quarterly (%) 7.00 7.00 6.50 6.50 6.00 6.00 5.38 5.45 5.50 4.59 5.10 5.50 4.72 5.01 5.00 4.80 4.92 4.85 4.46 5.00 4.28 4.75 4.72 4.50 4.02 4.08 4.50 4.00 4.00 3.50 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Ma
Slide 22: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (` in Millions) Quarterly (` in Million) Q2 FY Q2 FY Q1 FY H1 FY H1 FY Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2017 2016 2017 2017 2016 Personnel Expenses 6,418 6,304 5,917 5,453 4,145 2,209 1,169 677 1,896 1,623 1,849 3,745 3,230 Rent 1,713 1,65
Slide 23: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly PBT PAT Quarterly PBT PAT 16,000 15,114 16,000 13,168 14,000 14,000 13,312 11,936 12,000 12,000 10,042 10,000 10,000 10,279 8,861 8,096 8,920 8,000 8,000 7,612 7,801 6,000 6,000 5,670 5,519 6,705 4,624 3,456 4,942
Slide 24: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 70,000 61,892 60,000 52,571 58,915 50,835 56,192 50,000 42,646 40,000 29,257 37,356 30,000 20,000 13,344 10,000 1,598 2,234 3,712 5,845 0 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Sep-15 Mar-1
Slide 25: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly (%) Quarterly (%) 55 30 51.52 50 48.10 45 25 41.90 19.65 40 18.78 19.21 35.10 34.00 20 35 33.90 30.15 13.26 13.84 30 15 25 19.50 10 20 15.13 15 5 14.35 10 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15
Slide 26: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Sep-16 Jun-16 Mar-16 Sep-15 Capital Adequacy Ratio 23.67 24.27 24.48 22.97 Tier-I 20.95 21.03 20.92 19.25 Tier-II 2.72 3.24 3.56 3.72 25
Slide 27: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside Q2 FY 2017 Q1 FY 2017 Q2 FY 2016 H1 FY 2017 H1 FY 2016 FY 2016 Earnings per share (`) - Basic 7.44 6.77 4.39 14.21 8.99 20.34 - Diluted 7.38 6.71 4.34 14.09 8.90 20.10 Sep-16 Jun-16 Mar-16 Sep-15 Book Value per share (`)
Slide 28: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Sep-16 Jun-16 Mar-16 Sep-15 Outside Liabilities 243,582 226,641 214,295 238,084 Cash & Bank Balances 16,181 12,481 6,791 23,055 Tangible Networth 61,839 58,862 56,146 52,522 Capital Gearing 3.68 3.64 3.70 4.09 27
Slide 29: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28,000 25,012 25,351 23,961 22,882 22,781 24,881 23,000 22,929 23,165 18,000 16,688 13,000 9,745 8,000 5,979 3,999 3,102 3,000 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Se
Slide 30: Our Subsidiary
OUR SUBSIDIARY & Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company 29
Slide 31: 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, 2016, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio st
Slide 32: 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 31
Slide 33: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 32
Slide 34: Financials
FINANCIALS Key Financial Parameters (LKR in millions) Particulars Q2 FY 2017 Q1 FY 2017 H1 FY 2017 FY 2016 LKR / INR 0.44498 0.44908 0.45558 0.471235 Number of branches 15 15 15 15 Total Revenue 519 454 973 1,383 Total Expense 452 387 839 1,174 Profit Before Tax 67 67 134 209 Profit After Tax 57 56
Slide 35: Our Subsidiary
Muthoot Homefinf®
Slide 36: 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 is a subsidiary of Muthoot Finance Limited . As on September 30, 2016, Muthoot Finance holds 86% of equity capital of MHIL. MHIL focuses on extending afforda
Slide 37: Muthoot Insurance Brokers Private Limited
OUR SUBSIDIARY Muthoot Insurance Brokers Private Limited 36
Slide 38: Muthoot Insurance – An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in June 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 in
Slide 39: Belstar Investment and Finance Private Limited
OUR SUBSIDIARY Belstar Investment and Finance Private Limited (BIFPL) 38
Slide 40: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As Of September 2016 , Muthoot Finance holds 57.16% 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
Slide 41: 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