Mas Financial Services Ltd. · NSE:MASFIN
Mas Financial Services — Q3 FY20 Earnings Presentation
54 slides from Mas Financial Services's earnings presentation, Feb 7, 2020
Slide 1: Stock exchange cover letter for Q3 FY20 investor presentation
'I1ie <Pawer of <Distri6utwn Jffi{J\� FINANCIAL SERVICES LIMITED February 07, 2020 MFSL/SEC/EQ/2020/09 To, To, The Manager, General Manager BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza Dalal Street Plot No. C/1, G Block Mumbai -400001 Bandra-Kurla Com
Slide 2: Investor Presentation Q3 FY20
<J'lie (power of (J)istri6ution INVESTOR Corporate – PRESENTATION Presentation Q3 FY20 REGISTERED OFFICE MAS Financial Services Limited 6, Ground Floor, Narayan Chambers, Ashram Road, Ahmedabad-380009
Slide 3: Disclaimer
�sr ,,, Disclaimer 'I1ie <Powerof<Distri6ution ENDEAVOURS This presentation has been prepared by and is the sole responsibility of MAS Financial Services Limited (together with its subsidiary MAS Rural Housing & Mortgage Finance Limited). By accessing this presentation, you are agreeing to be bound
Slide 4: Table of Content
�sr ,,, Table of Content 'I1ie <Powerof<Distri6ution ENDEAVOURS Journey of 99 Quarters: Consistent Performance 4 Milestones 6 Understanding MAS 7 Q3 FY19-20 Results 19 Overview 20 Product Offerings 21 Credit Assessment & Risk Management Framework 23 Retail Presence & Distribution Network 24 Unique a
Slide 5: Journey of 99 Quarters: Consistent Performance
�sr ,,, 'I1ie <Powerof<Distri6ution ENDEAVOURS Journey of 99 Quarters: Consistent Performance SLIDE: 4
Slide 6: Consistent Growth in AUM and PAT
�sr ,,, Consistent Growth in AUM and PAT 'I1ie <Powerof<Distri6ution ENDEAVOURS Asset Under Management (AUM) In INR Mn 59,604 53,384 41,570 31,561 25,650 20,052 13,910 10,123 3,884 5,118 6,909 1,510 2,312 2,597 2,682 20 4Q 44Q 48Q 52Q 56Q 60Q 64Q 68Q 72Q 76Q 80Q 84Q 88Q 92Q 96Q 99Q Profit After Tax
Slide 7: Major events and milestones in the history
Major events and milestones in the history '11ie rJ>owerof <Distri6ution -� ,!:. Of ENDEAVOURS "' H1 20 AUM crossed INR 60 Bn. on a consolidated basis. AUM crossed INR 50 Bn. 2019 Bank loan rating upgraded to “ACUITE AA -” with Stable outlook and Short term rating assigned as ACUITE A1+. 2018 Listin
Slide 8: Understanding MAS
�sr ,,, Understanding MAS 'I1ie <Powerof<Distri6ution ENDEAVOURS Vision, Mission and Belief Team MAS Fundamentals – Assets, Liability and Operational excellence Going Forward…… SLIDE: 7
Slide 9: Vision, Mission and Belief
' I ., �" <@> 'I1ie<Prnwrof(l)istri611.tion ENDEAVOURS ., I ' VISION MISSION VISION To be one of the most efficient distributors of financial services and create value on a very large scale. MISSION To constantly endeavour, to attain excellence and create a very wide Financial distribution network a
Slide 10: Team MAS
�sr ,,, 'I1ie <Powerof<Distri6ution ENDEAVOURS TEAM MAS SLIDE: 9
Slide 11: Team MAS: Experienced Promoters
"' Team MAS 'l1ie <Power of<Distn·6u.tion � ENDEAVOdRs EXPERIENCED PROMOTERS Mr. Kamlesh Chimanlal Gandhi, aged 54 years, is the Founder, Chairman and Managing Director of MAS since inception. He visualized the opportunities in the retail financial services very early and has been leading the st
Slide 12: Team MAS: Eminent Directors
"' Team MAS � ENDEAvoiiJ?s EMINENT DIRECTORS Darshana Saumil Pandya, aged 47 years, is an executive Director and Chief Executive Officer of MAS Financial. She has been associated with the Company since June 1, 1996, and as an executive Director since December 23, 2016 She holds a bachelor’s degr
Slide 13: Team MAS: Core Team and Execution Team
�5# "' Team MAS '11ie <Power of<Distd6u.tion ENDEAVOURS CORE TEAM Consisting of more than 35 employees being with MAS since inception and inclusion of lateral talents who have proven their capability, dedication and loyalty. EXECUTION TEAM Consisting of more than 1500 employees who works along with
Slide 14: Fundamentals
�sr ,,, 'I1ie <Powerof<Distri6ution ENDEAVOURS FUNDAMENTALS SLIDE: 13
Slide 15: Asset Creation
�c...-J.'' Asset Creation: '11ie <Powerof<Distri.6u.tion �-�t ENDEAVOURS DICTUM: CREDIT PRODUCT MIX WHERE IT IS DUE UNIQUE ADDING VALUE DISTRIBUTION MODEL SLIDE: 14
Slide 16: Liability Management
�c...-J.'' Liability Management: '11ie <Powerof<Distri.6u.tion �-�t ENDEAVOURS SELF PROPELLING BUSINESS MODEL – CAPITAL REQUIREMENT MET HEALTHY ALM PREDOMINANTLYFR OM INTERNAL ACCRUALS PLANNING AND RIGHT MIX OF MAINTAINING RESOURCES COST EFFICIENCY SLIDE: 15
Slide 17: Operational Excellence: Key Enablers
�5# "' Operational Excellence: Key Enablers '11ie <Power of<Distd6u.tion ENDEAVOURS Focusing on Being a extending credit HR Policy Learning where it is due Organization Understanding the fact that the operational excellence is key in lending business SLIDE: 16
Slide 18: Going Forward
�sr ,,, 'I1ie <Powerof<Distri6ution ENDEAVOURS GOING FORWARD SLIDE: 17
Slide 19: Going Forward
�5# "' Going Forward……….. '11ie <Power of<Distd6u.tion ENDEAVOURS Asset Creation • To anchor to our belief that, growth along with quality is the key to enhance the shareholders’ value. • Anticipated growth for the next five years to be in the range of 20% - 30% and maintain healthy ROA and ROCE, wh
Slide 20: Q3 FY19-20 Results
�sr ,,, 'I1ie <Powerof<Distri6ution ENDEAVOURS Q3 FY19-20 RESULTS SLIDE: 19
Slide 21: Overview
�c::-J.'' Overview '11i.e Qvwerof([)istri6ution �-�t ENDEAVOURS SPECAILISED IN IN RETAIL RETAIL LENDING LENDING SINCE 25 YEARS Diversified Product Portfolio Strong Retail Presence & Wide Distribution Network 6 states and Sourcing Intermediaries 'D' Bi,&. Micro-Enterprise loans(MEL) oO SME loans NCT
Slide 22: Diversified product offerings presenting significant growth opportunities
Diversified product offerings presenting significant 9�'· ��7' growth opportunities 'l1u cPowe,.of<Distri6ution ENDEAVOURS MAS focuses on serving the underserved credit needs of mid and low income group segments Micro-Enterprise Loans SME Loans Loans of up to INR 300,000 to Micro-Enterprises Loa
Slide 23: Recent Growth in Overall AUM
�5# "' Recent Growth in Overall AUM '11ie <Power of<Distd6u.tion ENDEAVOURS MAS’ has exhibited steady growth in AUM over the years AUM by Product Category (INR Mn) Segment growth YOY Dec -18 vs Dec -19 1,601 4,524 1,582 4,654 1,583 Commercial Vehicle loans 1.14% 4,986 16,782 1,468 13,505 2-Wheeler l
Slide 24: Robust and Comprehensive Credit Assessment and Risk Management Framework
Robust and Comprehensive Credit Assessment and �5# "' Risk Management Framework '11ie <Power of<Distd6u.tion ENDEAVOURS MAS aims to give credit where it is due with the dictum of adherence and adaptability Robust credit assessment Credit assessment process overview by Product Micro-Enterprise Loans
Slide 25: Retail Presence and Distribution
��" Retail Presence and Distribution '11ie a!ower of<Distn"6ution �-;; . : ENDEAVOURS 700,000+ active customers across 3,430 locations in Rural, semi urban and urban locations Presence in the high growth markets in West and South Delhi NCT MAS has expanded to 105 branches in 6 Rajasthan J states a
Slide 26: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through �5# "' NBFC Partners '11ie <Power of<Distd6u.tion ENDEAVOURS Efficient last mile delivery of credit Value chain approach has proven to across its product range namely MEL, be the most potent one to solve SME, 2 Wheeler and Commercial informality because
Slide 27: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through �5# "' NBFC Partners '11ie <Power of<Distd6u.tion ENDEAVOURS Operational Dynamics Key Criteria for starting relationship: Promoters Product Operational Financial Growth Strategy Capital Base Evaluation Alignment Excellence Performance Credit Assessment
Slide 28: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through �5# "' NBFC Partners '11ie <Power of<Distd6u.tion ENDEAVOURS MAS NBFCs • Widens its network while maintaining a • Value addition in improving their systems relatively lower risk profile and operations which helps in scalability and Sustainability of bus
Slide 29: Unique and Robust Distribution Network Through NBFC Partners
Unique and Robust Distribution Network Through �5# "' NBFC Partners '11ie <Power of<Distd6u.tion ENDEAVOURS TRACK RECORD • Started with 1 NBFC in 2008, currently • Have grown at a CAGR of around 35% having relationship with more than 100 in last five years across our product range such NBFCs having
Slide 30: Retail focused partner NBFCs – An Overview
�c..-J."' Retailed focused partner NBFCs – An Overview '11ie <Powerof<Distri.6ution �-�t ENDEAVOURS Retail focused small regional NBFCs inevitable for last mile delivery of credit. Adequately Capitalized Experienced Management Matching ALM with no liquidity issue for repayment. Demonstrated their ca
Slide 31: Liability Management
�c..-J."' Liability Management '11ie <Powerof<Distri.6ution �-�t ENDEAVOURS Borrowing Mix as on 31st Dec 2019 23% 1% DIRECT ASSIGNMENT 50% CASH CREDIT 26% TERM LOAN SUB DEBT • Efficient liability management ensures : • Adequate liquidity round the year. • No asset liability mismatch. • Tie up for th
Slide 32: Liability Management
�5# "' Liability Management '11ie <Power of<Distd6u.tion ENDEAVOURS Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Company withstood the litmus test very successfully during this which was one of the most challenging year – A testi
Slide 33: Consistent Growth in AUM and PAT
�5# "' Consistent Growth in AUM and PAT '11ie <Power of<Distd6u.tion ENDEAVOURS Asset Under Management (AUM) In INR Mn 53,384 41,570 31,561 25,650 20,052 13,910 10,123 3,884 5,118 6,909 1,510 2,312 2,597 2,682 20 Mar-1996 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 M
Slide 34: Key Achievements Highlights – 9M FY20 vs 9M FY19
��" Key Achievements Highlights – 9M FY 20 vs 9M FY 19 '11ie <Puwer of <Distri6u.tion �-�t ENDEAVOURS AUM PAT NII ROAUM OER 9M FY20 INR 59,604 Mn INR 1,425 Mn INR 3,046 Mn 3.36% 1.51% 20% 29% 14% 4% 0.13 0.21 bps bps 9M FY19 INR 49,560 Mn INR 1,105 Mn INR 2,673 Mn 3.23 % 1.72% ABBREVIATIONS AUM ASSE
Slide 35: Key Achievements Highlights – Q3 FY20 vs Q3 FY19
��" Key Achievements Highlights – Q3 FY 20 vs Q3 FY 19 '11ie <Puwer of <Distri6u.tion �-�t ENDEAVOURS AUM PAT NII COB OER Q3 FY20 INR 59,604 Mn INR 551 Mn INR 1,150 Mn 9.15% 1.52% 20% 21% 12% 4% 0.20 0.17 bps bps Q3 FY19 INR 49,560 Mn INR 455 Mn INR 1,028 Mn 9.35 % 1.69% ABBREVIATIONS AUM ASSET UNDE
Slide 36: Financial Performance Trends – Q3 FY20
�5# "' Financial Performance Trends – Q3 FY20 '11ie <Power of<Distd6u.tion ENDEAVOURS In INR Mn Robust Performance ASSETS UNDER MANAGEMENT (AUM) NET WORTH 59,604 10198 53,384 9098 8636 49,560 7739 41,570 31,561 3769 Mar-17 Mar-18 Mar-19 Dec-18 Dec-19 Mar-17 Mar-18 Mar-19 Dec-18 Dec-19 BORROWING ON &
Slide 37: Financial Performance Trends – Q3 FY20
�5# "' Financial Performance Trends – Q3 FY20 '11ie <Power of<Distd6u.tion ENDEAVOURS Consistent Rise in … In INR Mn REVENUE NET INTEREST INCOME (NII) 3,659 5,726 4,509 2,804 3,415 1,902 1,836 1,028 1,150 1,615 FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 PROFIT BEFORE TAX (PB
Slide 38: Financial Performance Trends – Q3 FY20
�5# "' Financial Performance Trends – Q3 FY20 '11ie <Power of<Distd6u.tion ENDEAVOURS Focus on Efficiency RETURN ON AVG. BALANCE SHEET ASSETS RETURN ON AVG. AUM (ROAUM)* (ROTA)* 3.78% 3.72% 5.37% 5.16% 4.75% 3.20% 4.38% 2.83% 3.51% 2.36% FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 FY-17 FY-18 FY-19 Q3 FY19 Q3
Slide 39: Financial Performance Trends – Q3 FY20
�5# "' Financial Performance Trends – Q3 FY20 '11ie <Power of<Distd6u.tion ENDEAVOURS OPERATING EXPENSE AS % OF NII* COST OF BORROWING (COB)* 31.75% 9.44% 9.33% 9.35% 9.15% 8.92% 25.86% 21.17% 19.75% 19.56% FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 Efficiently maintaining t
Slide 40: Financial Performance Trends – Q3 FY20
�5# "' Financial Performance Trends – Q3 FY20 '11ie <Power of<Distd6u.tion ENDEAVOURS Adequately Capitalized DEBT – EQUITY RATIO (DER) CAPITAL ADEQUACY RATIO (CAR) 31.89% 30.40% 29.13% 30.11% 4.01 22.94% 2.82 2.89 2.99 2.27 Mar-17 Mar-18 Mar-19 Q3 FY19 Q3 FY20 Mar-17 Mar-18 Mar-19 Q3 FY19 Q3 FY20 He
Slide 41: Quality of the portfolio: Consistently maintained
�5# "' Quality of the portfolio : Consistently maintained '11ie <Power of<Distd6u.tion ENDEAVOURS Catalyst in growth of Entrepreneurs, not creating just borrowers STAGE 3 ASSETS * 1.50% 1.39% 1.38% 1.30% 1.29% 1.09% 1.00% 1.19% 1.14% 1.13% 1.06% 0.95% 0.50% 0.00% Mar-17 Mar-18 Mar-19 Dec-18 Dec-19 G
Slide 42: Asset Under Management - Credit Quality
�5# "' Asset Under Management - Credit Quality '11ie <Power of<Distd6u.tion ENDEAVOURS ASSET UNDER MANAGEMENT- DPD 8.00% 6.00% 0.68% 0.55% 1.03% 0.71% 0.49% 0.93% 0.76% 0.26% 0.69% 0.45% 1.14% 0.58% 1.50% 1.00% 1.06% 4.00% 1.23% 1.58% 1.18% 1.00% 1.13% 2.00% 2.86% 2.75% 2.60% 2.53% 2.79% 0.00% Mar-1
Slide 43: Reputed Marquee FIIs and DIIs have invested in MAS
�c;;:-,J"' Reputed Marquee FIIs and DIIs have invested in MAS 'TM Q'owe,. of <Distri6ution �--; ;_ : ENDEAVOURS Shareholding as on 31st Dec 2019 Marquee Non Promoter Shareholders SCHRODER INTERNATIONAL SELECTION FUND INDIAN Foreign Portfolio OPPORTUNITIES Investor Mutual Fund 1.89% JPMORGAN INDIA SM
Slide 44: Financial Statement: FY18 – 9M FY20
�5# "' Financial Statement: FY18 – 9M FY20 ENDEAVOURS '11ie <Power of<Distd6u.tion PROFIT & LOSS STATEMENT INR Mn. FY 2018 FY 2019 9M FY19 9M FY20 Total Revenue 4509 5726 4170 5103 Expenses 2857 3387 2471 3237 Finance Costs 1705 2067 1497 2057 Operating Expense 725 775 588 640 Provisions and Loan Lo
Slide 45: Assignment Income Reconciliation
�c...-J.'' Assignment Income Reconciliation '11ie <Powerof<Distri.6u.tion �-�t ENDEAVOURS IN INR MN Sr. Q3 Q3 9M 9M Particulars FY19 No. FY20 FY19 FY20 FY19 Upfront spread booked on present value basis on 1 344.03 303.47 786.26 659.16 941.45 portfolio assigned during the year (based on IND-AS) Incom
Slide 46: Credit Quality
�c...-J.'' Credit Quality '11ie <Powerof<Distri.6u.tion �-�t ENDEAVOURS IN INR MN Dec-19 Dec-18 Particulars AUM Provision AUM Provision Stage 1 32582.30 125.47 28278.54 95.91 Stage 2 1230.31 121.17 974.97 100.44 Stage 3 651.85 139.35 618.33 126.57 TOTAL ON BOOK 34464.45 385.99 29871.84 322.92 Assign
Slide 47: MAS Rural Housing & Mortgage Finance Limited (MRHMFL) – Subsidiary
MAS Rural Housing & Mortgage Finance Limited (MRHMFL) – Subsidiary MAS is targeting affordable housing finance segment through its subsidiary • MAS Rural Housing & Mortgage Finance Limited (“MAS Housing” or MRHMFL) is a non-deposit taking , NHB registered, housing finance institution. It was incorpo
Slide 48: Financial Performance Trends – Q3 FY20 MRHMFL
Financial Performance Trends – Q3 FY20 MRHMFL In INR Mn ASSET UNDER MANAGENMENT (AUM) NET WORTH 2,840 2,702 526 2,519 466 2,033 1,764 329 300 307 Mar-17 Mar-18 Mar-19 Dec-18 Dec-19 Mar-17 Mar-18 Mar-19 Dec-18 Dec-19 BORROWING GROSS STAGE 3 ASSETS & NET STAGE 3 ASSETS 2,546 0.41% 2,346 2,331 0.36% 0.
Slide 49: Financial Performance Trends – Q3 FY20 MRHMFL
Financial Performance Trends – Q3 FY20 MRHMFL In INR Mn REVENUE NET INTEREST INCOME (NII) 324 129 263 103 106 233 105 42 86 33 FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 PROFIT BEFORE TAX PROFIT AFTER TAX 42 27 19 20 29 29 13 9 7 8 FY-17 FY-18 FY-19 Q3 FY19 Q3 FY20 FY-17 FY-
Slide 50: Liability Management
Liability Management Borrowing Mix as on 31st Dec 2019 5.08% 6.36% 4.17% NHB REFINANCE TERM LOAN CASH CREDIT 84.40% DIRECT ASSIGNMENT • Efficient liability management ensures : • Adequate liquidity round the year. • Minimum asset liability mismatch. • Tie up for the fund requirement of the whole fin
Slide 51: Liability Management
Liability Management Liability Planning: • The composition of our liability mix ensures healthy ALM and well diverse resource mix. • The Liability management was tested last quarter and the company could successfully demonstrate its capability of efficient liability management • Capital adequacy rat
Slide 52: Credit Quality
Credit Quality IN INR MN Dec-19 Dec-18 Particulars AUM Provision AUM Provision Stage 1 2,627.61 4.02 2,398.39 5.16 Stage 2 81.95 4.33 88.18 4.50 Stage 3 9.17 2.52 8.66 2.56 TOTAL ON BOOK 2,718.73 10.87 2,495.23 12.22 Assigned Portfolio 121.74 N/A 24.03 N/A TOTAL AUM 2,840.47 2,519.26 Particulars Dec
Slide 53: Glossary
�5# "' Glossary '11ie <Power of<Distd6u.tion ENDEAVOURS AUM Assets Under Management EIR Effective Interest Rate Bn Billion ECL Estimated Credit Loss CCPS Compulsorily Convertible Preference Shares OCPS Optionally Convertible Preference Share COB Cost of Borrowing CRAR Capital To Risk Assets Ratio DP
Slide 54: Best Wishes – Investor Contact
'Ihe (l'ower of Distribution BEST WISHES INVESTOR CONTACT Name: Ankit Jain Designation: Chief Financial Officer Contact No.: 079-41106682 Email ID: ankit_jain@mas.co.in
MAS Financial Services — Q3 FY20 Earnings Presentation on 6ix