Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q3 FY20 Earnings Presentation
48 slides from Manappuram Finance's earnings presentation, January 2020
Slide 1: Manappuram Finance Limited Investor Presentation
Manappuram Finance Limited Investor Presentation Jan 2020 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Quarterly Update
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 3: Consolidated Result Highlights
Q3 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM Net Profit Rs 240,999 Mn Rs 3,978.4 Mn Networth ROA 6.3% (+ 6.3% QoQ) (*16.3% % QoQ) Rs 54,132 Mn ROE 30.4% (+35.5 % YoY) (+63.0% YoY) Capital Adequacy # Borrowing Cost # GNPA # BV / Share Rs 64.06 23.4% 9.12% 0.50% **EPS Rs 18.83 Dividend / Share
Slide 4: Key Performance Highlights
Q3 FY20 RESULTS: KEY PERFORMANCE HIGHLIGHTS • Delivered strong performance with +35.5% YoY and +6.3 % QoQ consolidated AUM growth Overall • Robust profitability with 6.3% consolidated ROA, 30.4% consolidated ROE Highlights • Prudent capital structure with leverage being only 3.7 times Gold Loan • Go
Slide 5: Strong Uptrend in AUM Growth & Profitability
Q3 FY20 RESULTS: STRONG UPTREND IN AUM GROWTH & PROFITABILITY TOTAL AUM (Rs Bn) 241 227 194 202 172 178 166 158 147 137 134 137 Q4 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 NET PROFIT (Rs Mn) 3,978 3,421 2,556 2,689 2,441 2,214 2,006 1,822 1,988 1,5
Slide 6: Consolidated Profit & Loss Statement
Q3 FY20 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) 9M FY20 9M FY19 YoY % Q3 FY20 Q3 FY19 YOY % Q2 FY20 QOQ % FY19 Closing AUM (Rs Bn) 241 178 35.5% 241 178 35.5% 227 6.3% 194 Income from Operations 38,600.0 30,314.6 27.3% 13,990.2 10,812.0 29.4% 12,867.9 8.7% 41,163.2 Finance
Slide 7: Consolidated Balance Sheet
Q3 FY20 RESULTS: CONSOLIDATED BALANCE SHEET Particulars (Rs Mn) Dec 2019 Dec 2018 YOY % Sep 2019 QOQ % Cash & Bank Balances 21,959.9 8,430.2 160.5% 17,230.9 27.4% Investments 1,123.4 843.1 33.3% 1,295.7 -13.3% Loans & Advances 221,898.8 170,660.4 30.0% 210,320.4 5.5% Fixed Assets 3,609.7 3,548.7 1.7
Slide 8: Consolidated Result Highlights
Q3 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) CAGR: 14.2 % CAGR: 27.0 % 227 241 194 194 202 9,199 158 7,559 6,764 137 114 3,534 3,421 3,978 2,556 2,689 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY19 FY20 FY20 FY20 FY19 FY20 FY20 FY2
Slide 9: Consolidated Result Highlights
Q3 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) 50,618 54132 45,247 45,247 47,152 60.0 64.1 38,132 53.7 53.7 55.9 33,633 45.3 27,580 39.9 32.8 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY19 FY20 FY20 FY20 FY19 FY20 FY20 FY20 EARNINGS P
Slide 10: Consolidated AUM Update
Q3 FY20 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY16 FY17 FY18 FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Gold Loans 100,806.0 111,245.3 117,349.8 129,615.2 129,615.2 132,924.1 151,683.4 162,429.5 Microfinance 9,988.0 17,959.4 24,372.0 38,407.8 38,407.8 41,983.0 47,242.5
Slide 11: Manappuram Finance: Borrowing Profile
Q3 FY20 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON 31st Dec, 2019 = Rs 164,823 Mn CREDIT RATING ECB Manappuram Finance: Term Loan 2.0% Commercial from Banks Domestic Rating : Paper & FIs Long Term: AA (Stable) by CRISIL 23.6% 17.0% Long Term: AA- (Stable) by ICRA Long Term: AA+ (
Slide 12: Standalone Result Analysis
Q3 FY20 RESULTS: MANAPPURAM FINANCE: STANDALONE RESULT ANALYSIS GOLD LOAN AUM (Rs Bn) OPEX TO AUM % 152 162 8.9% CAGR: 6.5 % 8.1% 8.3% 8.4% 8.5% 8.0% 130 130 133 7.6% 117 7.0% 111 101 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY19 FY20 FY20 FY20 FY19 FY20 FY20 FY20 NET PROFIT (
Slide 13: Operating Cost Leverage Playing Out in the Business
OPERATING COST LEVERAGE PLAYING OUT IN THE BUSINESS OPEX GROWTH HAS TRAILED AUM GROWTH (Rs Cr) SIGNIFICANT RATIONALIZATION IN SECURITY COSTS (Rs Cr) YoY growth: 10% (vs. 16.6% standalone AUM growth) YoY decline: 51.6% 1,166 1,055 44 44 895 37 30 17 16 12 11 FY18 FY19 9M FY20 Q2 Q3 Q4 Q2 Q4 Q1 Q2 Q3
Slide 14: Standalone Result Analysis
Q3 FY20 RESULTS: MANAPPURAM FINANCE: STANDALONE RESULT ANALYSIS NETWORTH (Rs Mn) NPA ANALYSIS % 48,066 50,987 43,922 43,922 45,308 38,126 2.0% 33,112 27,368 1.0% 0.7% 0.5% 0.5% 0.7% 0.6% 0.5% 1.7% 0.7% 0.4% 0.3% 0.3% 0.3% 0.3% 0.2% FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY19
Slide 15: Manappuram Finance: Gold AUM Update
Q3 FY20 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE PAN INDIA PRESENCE GOLD AUM - REGIONWISE BREAKUP Jammu & Kashmir, 10 Himachal Pradesh, 13 11% Chandigarh, 4 Delhi, 59 Uttarakhand, 8 58% Punjab, 75 17% Uttar Pradesh, 140 14% Haryana, 64 Assam, 18 Bihar, 24 Rajasthan, 96 Tripura, 2 South North Wes
Slide 16: Manappuram Finance: Gold AUM Update
Q3 FY20 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE GOLD HOLDING (TONNES) GOLD AUM PER BRANCH (Rs Mn) 72.0 73.5 43.8 46.0 67.5 67.5 68.4 61.1 64.0 38.4 38.4 39.3 59.6 35.3 33.8 30.6 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY19 FY20 FY20 FY20 FY19 FY20 FY20 FY20 CUSTOMER BASE
Slide 17: Online Gold Loan: Business Update
Q3 FY20 RESULTS: ONLINE GOLD LOAN: BUSINESS UPDATE ONLINE GOLD LOAN – KEY FEATURES ONLINE GOLD LOAN METRICS AUM (Rs Mn) – Q3FY20 71,814.4 • Manappuram became the first player to launch its Online Gold Loan (OGL) in September 2015 Average Ticket Size (Rs ‘000) 47.4 • This facility enables customers w
Slide 18: Asirvad Microfinance: Key Highlights
Q3 FY20 RESULTS: ASIRVAD MICROFINANCE: KEY HIGHLIGHTS Particulars (Rs Mn) 9M FY20 9M FY19 YOY % Q3 FY20 Q3 FY19 YOY % Q2 FY20 QOQ % FY19 Closing AUM 50,221.4 31,951.6 57.2% 50,221.4 31,951.6 57.2% 47,242.5 6.3% 38,407.8 Income from Operations 6,553.5 4,494.6 45.8% 2,380.0 1,633.8 45.7% 2,170.9 9.6%
Slide 19: Asirvad Microfinance: Result Analysis
Q3 FY20 RESULTS: ASIRVAD MICROFINANCE: RESULT ANALYSIS AUM (Rs Mn) RETURN RATIOS % 47,242 50,221 CAGR: 65.8 % 41,983 26.8% 38,408 38,408 26.0% 25.0% 31.4% 25.0% 14.1% 13.9% 24,372 17,959 4.8% 5.0% 5.9% 5.3% 3.4% 2.5% -0.4% 9,988 4.7% -3.5% FY16 FY17 FY18 FY19 Q4 Q1 Q2 Q3 FY16 FY17 FY18 FY19 Q4 Q1 Q2
Slide 20: Asirvad Microfinance: AUM Update
Q3 FY20 RESULTS: ASIRVAD MICROFINANCE: AUM UPDATE PAN INDIA PRESENCE MFI AUM - REGIONWISE BREAKUP Uttarakhand, 8 24% 39% Chandigarh, 1 Uttar Pradesh, 66 Bihar, 88 Punjab, 31 16% Sikkim, 1 Assam, 14 21% Haryana, 25 West Bengal, 101 Rajasthan, 60 South North West East Jharkhand, 51 Gujarat, 27 Tripura
Slide 21: Housing Finance: Business Update
Q3 FY20 RESULTS: HOUSING FINANCE: BUSINESS UPDATE AFFORDABLE HOUSING HOUSING FINANCE METRICS AUM (Rs Mn) – Dec 2019 6,012.3 ▪ Started commercial operations in January 2015. Branch Network 46 ▪ Focus on Affordable Housing for Mid to Low income Group. Number of States 9 ▪ Focus on South and West of In
Slide 22: Vehicle and Equipment Finance: Business Update
Q3 FY20 RESULTS: VEHICLE AND EQUIPMENT FINANCE: BUSINESS UPDATE VEHICLE AND EQUIPMENT FINANCE VEHICLE AND EQUIPMENT FINANCE METRICS AUM (Rs Mn) – Dec 2019 13,973.9 ▪ Started commercial operations in January 2015. Branch Network 214 ▪ The operations are a part of Manappuram Finance Ltd and are Number
Slide 23: Company Overview
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 24: Company Overview: Brief Profile
COMPANY OVERVIEW: BRIEF PROFILE STRONG ▪ Incorporated in 1992, the company has been one of India’s leading gold loans NBFCs. PEDIGREE ▪ Promoted by Mr. V.P. Nandakumar (current MD & CEO) whose family has been involved in gold loans since 1949. ▪ Focus on utilising surplus capital to build or acquire
Slide 25: Company Overview: Strong Brand Recall
COMPANY OVERVIEW: STRONG BRAND RECALL ▪ Strong brand equity built over the years. ▪ Celebrity endorsements have led to enhanced visibility and growing business. ▪ Brand ‘Manappuram’ is endorsed by well recognized film industry icons across India . ▪ Our brand ambassadors - Venkatesh, Mohan Lal, Pune
Slide 26: Experienced Management Team
COMPANY OVERVIEW: EXPERIENCED MANAGEMENT TEAM Mr. V. P. Nandakumar Mr. B.N. Raveendra Babu Mrs. Bindu A L Managing Director & CEO Executive Director CFO ▪ Chief Promoter of ▪ Director since July 1992 ▪ Chartered Accountant with Manappuram Group ▪ Worked in a senior role with Over 20 years experience
Slide 27: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS Mr. Jagdish Capoor • Former Chairman of HDFC Bank, former Deputy Governor of Reserve Bank of India, former Chairman of UTI and BSE Ltd CHAIRMAN, INDEPENDENT & • Currently, he is on the Board of Indian Hotels Company Limited, Assets C
Slide 28: Corporate Governance – Strong Board of Directors
COMPANY OVERVIEW: CORPORATE GOVERNANCE – STRONG BOARD OF DIRECTORS • Advance leadership Fellow at Harvard University, Gold medallist in Economics from XLRI School of Management in India. Sutapa Banerjee • She is Managing Director of Shiva Cement Ltd, JSW Cements Ltd, JSW Holdings Ltd , North East Sm
Slide 29: Shareholding Structure
COMPANY OVERVIEW: SHAREHOLDING STRUCTURE MARKET DATA AS ON 23.01.2020 Share Price Performance 200.0 Market Capitalization (Rs Mn) 1,55,138 180.0 Price (Rs) 183.60 No. of Shares Outstanding (Mn) 844.9 160.0 Face Value (Rs) 2.0 140.0 Avg. Qtrly Trading Volume (Rs Mn) 445.2 120.0 Avg. Qtrly Trading Vol
Slide 30: Business Strategy
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 31: Business Strategy: Key Highlights
BUSINESS STRATEGY: KEY HIGHLIGHTS BUSINESS STRATEGY STRENGTHEN THE ADDITION OF SYNERGISTIC CORE GOLD LOAN BUSINESS NEW BUSINESS SEGMENTS • De-Linking the Gold Business • Leveraging the Strong Brand Equity & Existing from Gold Prices Retail Customer Base • Focus on Branch Activations through increase
Slide 32: De-Linking Gold Business from Gold Prices
BUSINESS STRATEGY: DE-LINKING GOLD BUSINESS FROM GOLD PRICES Earlier Scenario – Additional 2 month for 12 months – Single Product Offering 12 month Long Tenure Product Auction Gold value 100 LTV 75% If the Customer does not Gold Loan 75 pay or close the Loan, then there is likely loss of Interest Ra
Slide 33: Gold Loan Business – Reaching Out to the Customer
BUSINESS STRATEGY: GOLD LOAN BUSINESS – REACHING OUT TO THE CUSTOMER Increased Significantly Initiative to track marketing enhanced our Increased branch level initiatives across marketing spend incentives and performance branches and key with growing BTL branch activations scorecard markets and ATL
Slide 34: Introducing New Synergistic Product Segments
BUSINESS STRATEGY: INTRODUCING NEW SYNERGISTIC PRODUCT SEGMENTS STRONG BRAND EQUITY CAPITAL AVAILABILITY ADDITION ON NEW SYNERGISTIC ▪ Current Capital Adequacy at EXISTING RETAIL CUSTOMER PRODUCT SEGMENTS 23.36 % compared to the BASE minimum 15% as stipulated by the RBI. MICROFINANCE PAN INDIA DISTR
Slide 35: Asirvad Microfinance: Risk Management Practices
ASIRVAD MICROFINANCE: RISK MANAGEMENT PRACTICES • Geographic concentrations norms - District wise, State wise and along with Industry heat map analysis. • Disbursement Related Caps - Branches categorised based on performance for fresh disbursements for existing customer and acquisition of new custom
Slide 36: Asirvad Microfinance: Risk Management Practices
ASIRVAD MICROFINANCE: RISK MANAGEMENT PRACTICES • PAR management: State of the art Analytics/MIS - center-wise, customer wise, branch wise and bucket wise data analyzed on daily basis and reported across various senior levels for better monitoring and supervisory control. • Dashboard for Field level
Slide 37: Key Technology Initiatives
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 38: Exploring New Age Fintech Business Opportunities
KEY TECHNOLOGY INITIATIVES: EXPLORING NEW AGE FINTECH BUSINESS OPPORTUNITIES DIFFERENTIATE (TACTICAL) INNOVATE (STRATEGIC) Business differentiators like CRM, MDM Innovative projects to make UPI, AEPS, RPA Solutions & Adoption of us ready and relevant to face future challenges New technologies i.e. I
Slide 39: Innovative Business Propositions
KEY TECHNOLOGY INITIATIVES: INNOVATIVE BUSINESS PROPOSITIONS • Offline Apps: B2C & B2B Apps that can work without Offline internet connectivity Apps • Mobility Apps: Restructured Apps that can work without any device, browser, platform dependency VAS/BA • OGL Digital Cards & Wallets: This may open u
Slide 40: Implementation of New Technologies - Staying Ahead of the Curve
KEY TECHNOLOGY INITIATIVES: IMPLEMENTATION OF NEW TECHNOLOGIES - STAYING AHEAD OF THE CURVE Aadhaar Enabled Payment System (a) Solution for Customer 360 view (a)Suspicious/ Fraudulent Transaction AEPS CRM AFS (b) Lead Management (c) Monitoring Campaign Management (d) (b)Real time caseManagement Cust
Slide 41: Annexure
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 42: Understanding Our Evolution Phase 1: FY08 - FY12
UNDERSTANDING OUR EVOLUTION PHASE 1: FY08 - FY12 STRONG GROWTH WITNESSED…. 2908 3000 ▪ Higher Loan To Value (LTV) up to 85% 150 2064 116 ▪ Lower Cost of Funds due to Eligibility under Priority Sector 2250 100 Lending 75 1500 1005 ▪ Supported by Buoyant Economic Growth 50 645 436 750 ▪ Long Tenure Pr
Slide 43: Understanding Our Evolution Phase 2: FY12 - FY14
UNDERSTANDING OUR EVOLUTION PHASE 2: FY12 - FY14 REGULATORY OVERHANG IMPACT…. Regulatory Changes by RBI- 140 ▪ Mar - 2012 : Removal of Priority Sector Lending Status 120 116 100 – led to Higher Borrowing Cost. 100 75 82 80 60 ▪ Mar - 2012 : Cap on LTV to not exceed more than 60% 40 - 20 0 ▪ Weakened
Slide 44: Understanding Our Evolution Phase 3: FY15 Onwards
UNDERSTANDING OUR EVOLUTION PHASE 3: FY15 ONWARDS ON A REVIVAL PATH….. Sept – 2013 : Regulatory Changes by RBI- 150 ▪ Increased the loan-to-value (LTV) ratio for gold loans to 130 116 111 117 75 per cent - 100 92 101 100 82 ▪ Resulting into Level Playing Field for NBFCs vis-a-vis the commercial bank
Slide 45: Industry Overview: India Gold Market
INDUSTRY OVERVIEW: INDIA GOLD MARKET India possesses over ~20,000 tonnes of gold worth more than US$ 800 bn. Organized gold loan sector penetration is Just 3% ! ▪ India is the largest consumer of gold jewellery in the world - Together with China, it makes up over half the global consumer demand for
Slide 46: Industry Overview: Key Drivers for Gold Loan Market
INDUSTRY OVERVIEW: KEY DRIVERS FOR GOLD LOAN MARKET ADVANTAGE CONSUMER ADVANTAGE LENDER ▪ Idle gold can be monetized for productive purposes. ▪ Collateral / Security is with the lender – No requirement to reposes. ▪ Prompt Disbursement - Faster turnaround time. ▪ No Liquidity Issues – Gold is one of
Slide 47: Industry Overview: Competitive Advantage - Gold Loan NBFCs
INDUSTRY OVERVIEW: COMPETITIVE ADVANTAGE - GOLD LOAN NBFC’S Parameter Gold loan NBFC's Banks Moneylenders LTV Up to 75% Lower LTV than NBFC's Higher than 75% Processing charges are much Processing Fees No / Minimal Processing Fees No Processing Fees higher compared to NBFC's Usually in the range of
Slide 48: For Further Queries
FOR FURTHER QUERIES: DISCLAIMER : This presentation and the contents therein are for information purposes only and does not and should not construed to be any investment or legal advice. Any action taken or transaction pursued based on the basis of the information contained Mrs. Bindu A. L herein is