Mas Financial Services Ltd. · NSE:MASFIN
Mas Financial Services — Q2 FY21 Earnings Presentation
50 slides from Mas Financial Services's earnings presentation, Nov 11, 2020
Slide 1: Cover letter to stock exchanges
'1ne <Power of <Distrifution J1l!{J\� FINANCIAL SERVICES LIMITED 11th November, 2020 MFSL/SEC/E0/2020/63 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 C
Slide 2: Investor Presentation – Q2 FY21
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Slide 3: Disclaimer
Disclaimer �- ENDEAVO�S 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 by the trailing restrictions. This
Slide 4: Table of Content
Table of Content � ENDEAVO�S 04 MAS AT A GLANCE 05 JOURNEY OF 100 QUARTERS 06 STRONG FUNDAMENTALS 07 NAVIGATING COVID 19 PANDEMIC 10 MORATORIUM & COLLECTION TREND 11 PRODUCT OFFERINGS 13 LIABILITY MANAGEMENT 14 GOING FORWARD 15 STRENGTHENING THE FUNDAMENTALS… 16 RECONCILIATION OF FIGURES RESTATED (M
Slide 5: MAS at a Glance
MAS at a Glance �� ENDEAvo:Us 25 Years of Endeavours Strong Retail Presence & Distribution Network Delhi NCR 53,009 Mn. 6 99 Rajasthan • I 9 branches covering • 1 branch major towns AUM States and NCR Branches of Delhi Gujarat • 55 branches across the state Madhya Pradesh 3,465 7,00,000+ • 10 branch
Slide 6: Journey of 100 Quarters
Journey of 100 Quarters �� ENDEAvo:Us Asset Under Management (AUM) 59,663 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 100Q 1,666 Profit After Tax (PAT) 1,433 911 674 534 311 390 183 259 132 1
Slide 7: Strong Fundamentals
Strong Fundamentals �� ENDEAvo:Us Enablers for Navigating through current unprecedented challenges SUCCESSFUL TRACK STRONG PROVISION HIGHLY CAPITALISED ROBUST LIQUIDITY RECORD BUFFER & PORTFOLIO POSITION QUALITY • Successfully withstood • Adequetly capitalised for • Consistent track record of • Cash
Slide 8: Navigating COVID pandemic (1/3)
Navigating COVID 19 pandemic (1/3) �� ENDEAvo:Us ASSETS AND PORTFOLIO QUALITY • The AUM stood at INR 53,009 Mn. a contraction of 10.07% over the corresponding period. However, the two quarters are not comparable due to the pandemic impact. The Gross Stage 3 Assets is 1.56% and Net Stage 3 Assets is
Slide 9: Navigating COVID pandemic (2/3)
Navigating COVID 19 pandemic (2/3) �� ENDEAvo:Us CAPITAL AND LIQUIDITY MANAGEMENT • Company’s Capital adequacy remained strong at 35.58% with Tier I Capital of 32.72% and Tier II Capital of 2.86%. The Company has adequate capital and financial resources to fuel its future growth. • As on 30th Septem
Slide 10: Navigating COVID pandemic (3/3)
Navigating COVID 19 pandemic (3/3) �� ENDEAvo:Us OPERATIONAL MANAGEMENT • Currently , all our 99 branches are operational with adequate staffing to be scaled up gradually depending upon the situation. • Company uses banking platform for 100% of its disbursement and collections. The use of banking pl
Slide 11: Moratorium & Collection Trend
Moratorium & Collection Trend �� ENDEAvo:Us % CUSTOMERS BY VALUE 87% 88% 74% 55% 51% 49% 45% 26% 13% 12% April May June July August Moratorium Collection 10
Slide 12: Diversified product offerings presenting significant growth opportunities
Diversified product offerings presenting significant �� ENDEAvo:Us growth opportunities MAS focuses on serving the underserved credit needs of mid and low income group segments Micro-Enterprise Loans of up to INR 300,000 to Micro-Enterprises which primarily include INR 31,470 Mn. retailers, trader
Slide 13: AUM by Product Category
AUM by Product Category �� ENDEAvo:Us AUM by Product Category (INR Mn.) Segment Performance Micro-Enterprise loans(MEL) SME loans 2-Wheeler loans Commercial Vehicle loans Sept -20 vs Sept-19 59,663 58,944 53,009 53,384 1,547 1,391 4,003 4,630 12.92% 1,582 1,504 4,654 3,597 Micro-Enterprise loans (ME
Slide 14: Liability Management
Liability Management �� ENDEAvo:Us SOURCES OF FUND BORROWING as on 30th September 2020 COST OF BORROWING (COB)* DIRECT ASSIGNMENT 32,287 44% 31,227 29,804 9.33% 9.31% 9.64% 9.19% 25,632 8.86% SUB DEBT 17,571 1% NON-CONVERTIBLE CASH CREDIT DEBENTURES 26% 5% Mar-18 Mar-19 Mar-20 Sept-19 Sept-20 TERM L
Slide 15: Going Forward
Going Forward �- ENDEAVO�S 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% with an understanding of recalibrating it depending on the macro situation,
Slide 16: Strengthening the Fundamentals: amortising gain on assignment
Strengthening the Fundamentals… � ENDEAVO�S Amortising the gain on assignment of loans over the tenure of the assets in place of booking it upfront Till previous quarter, on derecognition of loans in its entirety upon assignment, as per Ind AS 109 'Financial Instruments', the Company has been recogn
Slide 17: Reconciliation of figures restated with previously reported figures
The following table summarises the reconciliation of � ENDEAVO�S figures restated with previously reported figures: Quarter ended Half year ended Year ended Particulars (In INR Mn.) 30.06.2020 30.09.2019 30.09.2019 31.03.2020 Revised gain on assignment of financial assets 157.17 242.45 485.55 1011.7
Slide 18: Reconciliation of figures restated with previously reported figures
The following table summarises the reconciliation of � ENDEAVO�S figures restated with previously reported figures: (In INR Mn.) As on As on Particulars 30.06.2020 31.03.2020 Revised other equity 9,947.44 9262.42 Impact due to change in accounting policy 568.55 578.10 Other equity as previously repo
Slide 19: Financial Review
... .. .............. � ENDEAVO�S FINANCIAL REVIEW 18
Slide 20: Key Highlights – Q2 FY21
Key Highlights – Q2 FY21 �� ENDEAvo:Us ASSET UNDER MANAGEMENT (AUM) PROFIT AFTER TAX (PAT) ACTUAL WITHOUT EFFECT OF SPECIAL COVID PROVISIONING INR 342 Mn. 14.91% RETURN ON AVG. NET WORTH* 10.07% INR 53,009 Mn. (Sept - 19: INR 58,944 Mn.) INR PAT without effect of special COVID provisioning 351 Mn. 1
Slide 21: Financial Performance – Q2 FY21
Financial Performance – Q2 FY21 �� ENDEAvo:Us ASSETS UNDER MANAGEMENT (AUM) NET WORTH 17.17% -10.07% CAGR 15.40% CAGR 19.80% 10862 59,663 58,944 9809 9271 53,384 53,009 8637 41,570 7365 Mar-18 Mar-19 Mar-20 Sept-19 Sept-20 Mar-18 Mar-19 Mar-20 Sep-19 Sep-20 ON & OFF BOOK AUM ON BOOK OFF BOOK 38% 39%
Slide 22: Financial Performance – Q2 FY21
Financial Performance – Q2 FY21 �� ENDEAvo:Us REVENUE NET INTEREST INCOME (NII) CAGR 25.17% CAGR 24.41% 6,768 4,048 5,587 3,546 5.43% 4,320 2,615 -12.96% -8.63% 957 833 1009 1,675 1,530 FY18 FY19 FY20 Q2 FY20 Q2 FY21 Q2 FY21 without effect of FY18 FY19 FY20 Q2 FY20 Q2 FY21 carrying cost OPERATING EX
Slide 23: Financial Performance – Q2 FY21
Financial Performance – Q2 FY21 �� ENDEAvo:Us RETURN ON AVG. BALANCE SHEET ASSETS RETURN ON AVG. AUM (ROAUM)* (ROTA)* 4.48% 3.86% 4.03% 3.84% 3.02% 2.95% 2.80% 3.02% 2.49% 2.50% 2.56% 2.94% FY18 FY19 FY20 Q2 FY20 Q2 FY21 Q2 FY21 FY18 FY19 FY20 Q2 FY20 Q2 FY21 Q2 FY21 without effect of without effect
Slide 24: Financial Performance – Q2 FY21
Financial Performance – Q2 FY21 �� ENDEAvo:Us Optimized cost structure OPERATING EXPENSE RATIO (OE RATIO)* OPERATING EXPENSE AS % OF NII 27.73% 1.98% 24.22% 1.68% 22.56% 22.20% 1.59% 1.62% 15.49% 0.94% FY18 FY19 FY20 Q2 FY20 Q2 FY21 FY18 FY19 FY20 Q2 FY20 Q2 FY21 Efficiently maintaining the quality
Slide 25: Financial Performance – Q2 FY21
Financial Performance – Q2 FY21 �� ENDEAvo:Us Strongly Capitalized DEBT – EQUITY RATIO (DER) CAPITAL ADEQUACY RATIO (CAR) 3.18 3.21 2.97 2.97 35.58% 2.39 29.74% 29.70% 26.86% 24.91% Mar-18 Mar-19 Mar-20 Sept-19 Sept-20 Mar-18 Mar-19 Mar-20 Sept-19 Sept-20 INTEREST COVERAGE RATIO (ICR) 2.08 1.86 1.84
Slide 26: Asset Under Management - Credit Quality
Asset Under Management - Credit Quality �� ENDEAvo:Us ASSET UNDER MANAGEMENT- DPD 8.00% 6.00% 0.55% 1.01% 0.71% 0.26% 0.76% 1.26% 0.69% 0.58% 1.53% 0.34% 1.01% 1.00% 4.00% 0.84% 0.41% 1.58% 1.18% 0.97% 0.91% 0.85% 0.88% 2.00% 2.75% 2.60% 2.83% 2.60% 1.75% 0.00% Mar-18 Mar-19 Mar-20 Sept-19 Sept-20 1
Slide 27: Credit Quality
Credit Quality � ENDEAVO�S (In INR Mn.) Q2 FY21 Q2 FY20 FY20 Particulars AUM Provision AUM Provision AUM Provision Stage 1 29422.89 120.94 35211.21 112.50 31762.21 106.04 Stage 2 778.61 86.48 1245.13 138.38 863.52 111.56 Stage 3 631.69 214.66 623.06 120.18 629.19 164.73 TOTAL ON BOOK 30833.19 422.08
Slide 28: Constantly maintaining quality portfolio
Constantly maintaining quality portfolio �� ENDEAvo:Us Catalyst in growth of Entrepreneurs, not creating just borrowers STAGE 3 ASSETS 2.00% 1.56% 1.39% 1.42% 1.50% 1.30% 1.27% 1.00% 1.19% 1.14% 1.14% 1.16% 1.06% 0.50% 0.00% Mar-18 Mar-19 Mar-20 Sept-19 Sept-20 GROSS STAGE 3 ASSETS NET STAGE 3 ASSET
Slide 29: Reputed Marquee FIIs and DIIs shareholders base
Reputed Marquee FIIs and DIIs shareholders base �� ENDEAvo:Us Shareholding as on 30th September 2020 Marquee Non Promoter Shareholders MOTILAL PRIVATE EQUITY Mutual Fund 8.71% AXIS MUTUAL FUND IDFC MUTUAL FUND Trust TATA AIA LIFE INSURANCE 7.40% MOTILAL OSWAL MUTUAL FUND Foreign Portfolio ASK INVEST
Slide 30: Financial Statement: FY18 – H1FY21
Financial Statement: FY18 – H1FY21 �� ENDEAvo:Us PROFIT & LOSS STATEMENT INR Mn. FY 2018 FY 2019 FY 2020 H1 FY20 H1 FY21 Total Revenue 4320 5587 6768 3310 3134 Expenses 2857 3387 4486 2140 2188 Finance Costs 1705 2041 2720 1358 1391 Operating Expense 725 800 899 428 251 Provisions and Loan Losses 42
Slide 31: MAS Rural Housing & Mortgage Finance Limited (MRHMFL) – Subsidiary
MAS Rural Housing & Mortgage Finance Limited (MRHMFL) Subsidiary 30
Slide 32: About MRHMFL
About MRHMFL 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 incorporated in 2008 and headquartered in Ahmedabad, Gujarat
Slide 33: Navigating COVID pandemic (1/2)
Navigating COVID 19 pandemic (1/2) ASSETS AND PORTFOLIO QUALITY • The AUM stood at INR 2,817 Mn. a contraction of 0.16% over the corresponding period. However, the two quarters are not comparable due to the pandemic impact. The Gross Stage 3 Assets is 0.24% and Net Stage 3 Assets is 0.18% of AUM as
Slide 34: Navigating COVID pandemic (2/2)
Navigating COVID 19 pandemic (2/2) CAPITAL AND LIQUIDITY MANAGEMENT • Company’s Capital adequacy remained strong at 40.32% with Tier I Capital of 32.41% and Tier II Capital of 7.91%. The Company has adequate capital and financial resources to run its business operations. • As on 30th September 2020
Slide 35: Reconciliation of figures restated with previously reported figures
The following table summarises the reconciliation of figures restated with previously reported figures: Quarter ended Half year ended Year ended Particulars (In INR Mn.) 30.06.2020 30.09.2019 30.09.2019 31.03.2020 Revised gain on assignment of financial assets 1.34 0.22 0.39 3.00 Impact due to chang
Slide 36: Reconciliation of figures restated with previously reported figures
The following table summarises the reconciliation of figures restated with previously reported figures: (In INR Mn.) As on As on Particulars 30.06.2020 31.03.2020 Revised other equity 306.71 297.91 Impact due to change in accounting policy 17.21 18.21 Other equity as previously reported before polic
Slide 37: Financial Performance – Q2 FY21
Financial Performance – Q2 FY21 ASSETS UNDER MANAGEMENT (AUM) NET WORTH 3.49% -0.16% CAGR 29.78% CAGR 18.71% 510 514 532 2,702 2,865 2,822 2,817 463 2,033 303 Mar-18 Mar-19 Mar-20 Sept-19 Sept-20 Mar-18 Mar-19 Mar-20 Sep-19 Sep-20 BORROWING GROSS STAGE 3 ASSETS & NET STAGE 3 ASSETS GROSS STAGE 3 ASS
Slide 38: Financial Performance – Q2 FY21
Financial Performance – Q2 FY21 REVENUE NET INTEREST INCOME (NII) CAGR 14.96% CAGR 20.68% 140 129 384 324 106 263 -4.30% 3.90% 97 36 38 93 FY18 FY19 FY20 Q2 FY20 Q2 FY21 FY18 FY19 FY20 Q2 FY20 Q2 FY21 PROFIT BEFORE TAX (PBT) PROFIT AFTER TAX (PAT) 43 27 5.57% 20 7.52% 29 17 22 11 12 14 15 FY18 FY19
Slide 39: Liability Management
Liability Management • The composition of our liability mix ensures healthy ALM and well diverse resource mix. Sources of Fund as on 30th September 2020 • The Liability management was tested last quarter and the company could successfully demonstrate its capability of efficient liability management
Slide 40: Credit Quality
Credit Quality (In INR Mn.) Q2 FY21 Q2 FY20 FY20 Particulars AUM Provision AUM Provision AUM Provision Stage 1 2,507.24 2.96 2,716.84 4.60 2,487.95 3.48 Stage 2 66.28 4.35 72.47 3.81 101.37 5.44 Stage 3 6.34 1.66 10.92 2.94 9.27 2.56 TOTAL ON BOOK 2,579.86 8.97 2,800.23 11.35 2,598.59 11.48 Assigned
Slide 41: Understanding MAS
... .. .............. � ENDEAVO�S UNDERSTANDING MAS 40
Slide 42: About MAS
About MAS �- ENDEAVO�S � � ........ VISION MISSION BELIEF To be one of the most efficient To constantly endeavor, to attain excellence and “We have miles to go & Promises to keep……” distributors of financial services and create a very wide Financial distribution network and “Together we can and we w
Slide 43: Unique and Robust Distribution Network Through NBFC Partners (1/3)
Unique and Robust Distribution Network �� ENDEAvo:Us Through NBFC Partners (1/3) AIM & OUR UNDERSTANDING Efficient last mile delivery of credit Value chain approach has proven to be Better quality of intermediation with Revenue sharing model ensures scalability across its product range namely MEL, t
Slide 44: Unique and Robust Distribution Network Through NBFC Partners (2/3)
Unique and Robust Distribution Network �� ENDEAvo:Us Through NBFC Partners (2/3) IMPACT MAS NBFCs Borrowers Eco-System • Widens its network while maintaining • Value addition in improving their • Creates an all-round enabling • Catalyst in Efficient last mile delivery a relatively lower risk profile
Slide 45: Sharpening the learning curve (3/3)
Sharpening the learning curve(3/3) �� ENDEAVO�S The learning curve is further strengthened: CREDIT ASSESSMENT Continuous strengthening of due diligence and audit process - both pre and post disbursement. Our proven track record of Further strengthening the field due more than INR 14,000 Crore dilige
Slide 46: Robust and Comprehensive Credit Assessment & Risk Management Framework
Robust and Comprehensive Credit Assessment & �� ENDEAvo:Us Risk Management Framework 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 SME Loans • Analysis of business po
Slide 47: Team MAS
Team MAS �- ENDEAVO�S 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 strategic initiatives and the execu
Slide 48: Team MAS – Eminent Directors
Team MAS �� ENDEAVO�S EMINENT DIRECTORS Mrs. Darshana Saumil Pandya Mr. Bala Bhaskaran Mr. Chetan Ramniklal Shah Mr. Umesh Rajanikant Shah Mrs. Daksha Niranjan Shah Executive Director & CEO Independent Director Independent Director Independent Director Independent Director Darshana Saumil Pandya,
Slide 49: Major events and milestones
Major events and milestones �� ENDEAvo:Us 2008 2018 1995 - Acquired second and third round of capital 2016 - Listing of Equity Shares on Bombay Stock Exchange & 2020 infusion worth INR 435 2012 2014 National Stock Exchange On incorporation, - Completed 25th Year of Mn. and INR 400 Mn. from - Bank lo
Slide 50: Registered office and investor contact
<Ifie (J'ower of(J)istri6ution REGISTERED OFFICE MAS Financial Services Limited 6, Ground Floor, Narayan Chambers, Ashram Road, Ahmedabad-380009 www.mas.co.in INVESTOR CONTACT Mr. Ankit Jain Mr. Nishant Vyas Chief Financial Officer Investor Relations Manager 079-41106682 079-41106551 ankit_jain@mas.
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