Manappuram Finance Limited · NSE:MANAPPURAM
Manappuram Finance — Q1 FY20 Earnings Presentation
46 slides from Manappuram Finance's earnings presentation, August 2019
Slide 1: Manappuram Finance Limited Investor Presentation
Manappuram Finance Limited Investor Presentation Aug 2019 Gold Loans Microfinance Housing Finance Vehicle Finance
Slide 2: Quarterly Update
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 3: Q1 FY20 Results: Consolidated Result Highlights
Q1 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS AUM Net Profit Rs 201,859 Mn Rs 2,689.1 Mn Networth ROA 5.1% (+ 3.8% QoQ) (+5.2 % QoQ) Rs 47,151.6 Mn ROE 23.28% (+21.5 % YoY) (+35.3 % YoY) Capital Adequacy * Borrowing Cost * GNPA * BV / Share Rs 55.9 23.2% 9.34% 0.71% EPS Rs 12.76 Share of New Busin
Slide 4: Key Performance Highlights
Q1 FY20 RESULTS: KEY PERFORMANCE HIGHLIGHTS Overall • Delivered strong performance with +21.5% YoY and +3.8 % QoQ consolidated AUM growth Highlights • Robust profitability with 5.1% consolidated ROA, 23% consolidated ROE resulting in +35.3 % YoY and +5.2% QoQ consolidated PAT growth • Gold Loan AUM
Slide 5: Strong Uptrend in AUM Growth & Profitability
Q1 FY20 RESULTS: STRONG UPTREND IN AUM GROWTH & PROFITABILITY TOTAL AUM (Rs Bn) 202 194 178 172 166 158 146 147 137 134 137 Q3 FY17 Q4 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 NET PROFIT (Rs Mn) 2,689 2,556 2,441 2,214 2,025 2,006 1,988 1,733 1,822 1,552 1,604 Q3
Slide 6: Consolidated Profit & Loss Statement
Q1 FY20 RESULTS: CONSOLIDATED PROFIT & LOSS STATEMENT Particulars (Rs Mn) Q1 FY20 Q1 FY19 YOY % Q4 FY19 QOQ % FY19 Closing AUM (Rs Bn) 202 166 21.5% 194 3.8% 194 Income from Operations 11,741.9 9,358.2 25.5% 10,848.6 8.2% 41,163.2 Finance expenses 3,799.8 2,943.2 29.1% 3,537.9 7.4% 13,194.4 Net inte
Slide 7: Consolidated Balance Sheet
Q1 FY20 RESULTS: CONSOLIDATED BALANCE SHEET Particulars (Rs Mn) June 2019 June 2018 YOY % Mar 2019 QOQ % Cash & Bank Balances 12,541.6 7,282.1 72.2% 11,642.0 7.7% Investments 1,519.1 0.5 286522.8% 1,737.5 -12.6% Loans & Advances 188,618.1 166,098.0 13.6% 178,119.1 5.9% Fixed Assets 5,133.1 2,831.4 8
Slide 8: Consolidated Result Highlights
Q1 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS CONSOLIDATED AUM (Rs Bn) NET PROFIT (Rs Mn) CAGR: 14.2 % CAGR: 27.0 % 194 194 202 172 178 9,199 158 7,559 137 6,764 114 3,534 2,689 2,214 2,441 2,556 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY19 FY19 FY19 FY20 FY19 FY19 FY19 FY2
Slide 9: Consolidated Result Highlights
Q1 FY20 RESULTS: CONSOLIDATED RESULT HIGHLIGHTS NETWORTH (Rs Mn) BOOK VALUE PER SHARE (Rs) 45,247 45,247 47,152 41,435 43,415 53.7 53.7 55.9 38,132 49.2 51.5 33,633 45.3 39.9 27,580 32.8 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY19 FY19 FY19 FY20 FY19 FY19 FY19 FY20 EARNINGS
Slide 10: Consolidated AUM Update
Q1 FY20 RESULTS: CONSOLIDATED AUM UPDATE CONSOLIDATED AUM (Rs Mn) Particulars (Rs Mn) FY16 FY17 FY18 FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Gold Loans 100,806.0 111,245.3 117,349.8 129,615.2 125,927.6 125,249.1 129,615.2 132,924.1 Microfinance 9,988.0 17,959.4 24,372.0 38,407.8 27,289.4 31,951.6 38,407.8
Slide 11: Manappuram Finance: Borrowing Profile
Q1 FY20 RESULTS: MANAPPURAM FINANCE: BORROWING PROFILE BORROWING AS ON 30th June, 2019 = Rs 133,117 Mn CREDIT RATING ECB Manappuram Finance: Term Loan Commercial Long Term: AA- (Positive) by CRISIL 1.8% from Banks & Paper Long Term: AA- (Stable) by ICRA Fis 23.0% Long Term: AA+ (Stable) by Bricwork
Slide 12: Manappuram Finance: Result Analysis
Q1 FY20 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS GOLD LOAN AUM (Rs Bn) OPEX TO AUM % CAGR: 6.5 % 8.9% 8.3% 8.4% 8.4% 8.5% 8.1% 8.3% 130 126 125 130 133 117 7.0% 111 101 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY19 FY19 FY19 FY20 FY19 FY19 FY19 FY20 NET PROFIT (Rs Mn) 7,87
Slide 13: Operating Cost Leverage Playing Out in the Business
OPERATING COST LEVERAGE PLAYING OUT IN THE BUSINESS OPEX GROWTH HAS TRAILED AUM GROWTH SIGNIFICANT RATIONALIZATION IN SECURITY COSTS YoY growth: 10% (vs. 16.6% standalone AUM growth) YoY decline: 56.0% 1,166 1,055 44 44 781 835 37 35 30 22 17 16 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY18 FY18
Slide 14: Manappuram Finance: Result Analysis
Q1 FY20 RESULTS: MANAPPURAM FINANCE: RESULT ANALYSIS NETWORTH (Rs Mn) NPA ANALYSIS % 43,890 40,839 42,363 43,922 45,308 38,126 33,112 2.0% 27,368 1.0% 0.7% 0.5% 0.7% 0.6% 0.5% 0.7% 1.7% 0.7% 0.4% 0.3% 0.3% 0.2% 0.3% 0.3% FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY19 FY19 FY19
Slide 15: Manappuram Finance: Gold AUM Update
Q1 FY20 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE PAN INDIA PRESENCE GOLD AUM - REGIONWISE BREAKUP Jammu & Kashmir, 10 Himachal Pradesh, 7 11% Chandigarh, 4 Delhi, 59 18% 58% Uttarakhand, 7 Punjab, 75 Uttar Pradesh, 128 14% Haryana, 62 Assam, 18 Bihar, 23 Rajasthan, 81 Tripura, 2 South North West
Slide 16: Manappuram Finance: Gold AUM Update
Q1 FY20 RESULTS: MANAPPURAM FINANCE: GOLD AUM UPDATE GOLD HOLDING (TONNES) GOLD AUM PER BRANCH (Rs Mn) 67.5 67.4 66.3 67.5 68.4 61.1 64.0 38.4 37.8 37.4 38.4 39.3 59.6 35.3 33.8 30.6 FY16 FY17 FY18 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 FY16 FY17 FY18 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 CUSTOMER BASE
Slide 17: Online Gold Loan: Business Update
Q1 FY20 RESULTS: ONLINE GOLD LOAN: BUSINESS UPDATE ONLINE GOLD LOAN – KEY FEATURES ONLINE GOLD LOAN METRICS • Manappuram became the first player to launch its Online Gold Loan (OGL) AUM (Rs Mn) – Q1FY20 49,647.6 in September 2015 Average Ticket Size (Rs ‘000) 43.9 • This facility enables customers w
Slide 18: Asirvad Microfinance: Key Highlights
Q1 FY20 RESULTS: ASIRVAD MICROFINANCE: KEY HIGHLIGHTS Particulars (Rs Mn) Q1 FY20 Q1 FY19 YOY % Q4 FY19 QOQ % FY19 Closing AUM 41,983.0 24,379.4 72.2% 38,407.8 9.3% 38,407.8 Income from Operations 2,002.6 1,385.4 44.6% 1,687.0 18.7% 6,181.8 Finance expenses 691.1 600.7 15.1% 747.6 -7.6% 2,734.5 Net
Slide 19: Asirvad Microfinance: Result Analysis
Q1 FY20 RESULTS: ASIRVAD MICROFINANCE: RESULT ANALYSIS AUM (Rs Mn) RETURN RATIOS % 41,983 CAGR: 65.8 % 38,408 38,408 29.4% 27.8% 25.0% 31,952 26.0% 27,289 25.0% 24,372 14.1% 13.9% 17,959 4.8% 4.4% 4.7% 5.0% 3.4% 2.5% -0.4% 9,988 4.2% -3.5% FY16 FY17 FY18 FY19 Q2 Q3 Q4 Q1 FY16 FY17 FY18 FY19 Q2 Q3 Q4
Slide 20: Asirvad Microfinance: AUM Update
Q1 FY20 RESULTS: ASIRVAD MICROFINANCE: AUM UPDATE PAN INDIA PRESENCE MFI AUM - REGIONWISE BREAKUP Uttarakhand, 8 33% 40% Chandigarh, 1 Uttar Pradesh, 64 Bihar, 78 Punjab, 24 Sikkim, 1 Assam, 12 15% Haryana, 27 12% West Bengal, 97 Rajasthan, 50 South North West East Jharkhand, 45 Gujarat, 17 Tripura,
Slide 21: Housing Finance: Business Update
Q1 FY20 RESULTS: HOUSING FINANCE: BUSINESS UPDATE AFFORDABLE HOUSING HOUSING FINANCE METRICS AUM (Rs Mn) – Jun 2019 5,416.6 ▪ Started commercial operations in January 2015. Branch Network 35 ▪ Focus on Affordable Housing for Mid to Low income Group. Number of States 6 ▪ Focus on South and West of In
Slide 22: Vehicle and Equipment Finance: Business Update
Q1 FY20 RESULTS: VEHICLE AND EQUIPMENT FINANCE: BUSINESS UPDATE VEHICLE AND EQUIPMENT FINANCE VEHICLE AND EQUIPMENT FINANCE METRICS AUM (Rs Mn) – Jun 2019 12,270.8 ▪ Started commercial operations in January 2015. Branch Network 198 ▪ The operations are a part of Manappuram Finance Ltd and are carrie
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 & NON- • Currently, he is on the Board of Indian Hotels Company Limited, Ass
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 INDEPENDENT & • She is Managing Director of Shiva Cement Ltd, JSW Cements Ltd, JSW Holdings Ltd ,
Slide 29: Shareholding Structure
COMPANY OVERVIEW: SHAREHOLDING STRUCTURE Share Price Performance MARKET DATA AS ON 09.08.2019 150 Market Capitalization (Rs Mn) 1,05,028 130 Price (Rs) 124.6 No. of Shares Outstanding (Mn) 843.2 110 Face Value (Rs) 2.0 90 Avg. Qtrly Trading Volume (Rs Mn) 618.4 70 Avg. Qtrly Trading Volume (Mn share
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 Retail from Gold Prices 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 – 12 months – Single Product Offering Additional 2 month for Auction 12 month Long Tenure Product Gold value 100 LTV 75% If the Customer does not pay or Gold Loan 75 close the Loan, then there is Interest Rate 24% likely l
Slide 33: Gold Loan Business – Reaching Out to the Customer
BUSINESS STRATEGY: GOLD LOAN BUSINESS – REACHING OUT TO THE CUSTOMER Increased marketing Significantly Initiative to track initiatives across enhanced our Increased incentives branch level branches and key marketing spend with and branch performance markets growing BTL and ATL activations scorecard
Slide 34: Introducing New Synergistic Product Segments
BUSINESS STRATEGY: INTRODUCING NEW SYNERGISTIC PRODUCT SEGMENTS STRONG BRAND EQUITY CAPITAL AVAILABILITY ADDITION ON NEW SYNERGISTIC PRODUCT ▪ Current Capital Adequacy at 23.25 EXISTING RETAIL CUSTOMER BASE SEGMENTS % compared to the minimum 15% as stipulated by the RBI. MICROFINANCE ▪ Gearing level
Slide 35: Key Technology Initiatives
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 36: 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 New us ready and relevant to face future challenges technologies i.e. I
Slide 37: 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 38: Implementation of New Technologies
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 39: Annexure
Quarterly Update Company Overview Business Strategy Key Technology Initiatives Annexure
Slide 40: 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 2250 ▪ Lower Cost of Funds due to Eligibility under Priority Sector Lending 100 1005 75 1500 ▪ Supported by Buoyant Economic Growth 645 ▪ Long Tenure Products supp
Slide 41: Understanding Our Evolution Phase 2: FY12-FY14
UNDERSTANDING OUR EVOLUTION PHASE 2: FY12 - FY14 REGULATORY OVERHANG IMPACT…. Regulatory Changes by RBI- 140 120 116 ▪ Mar - 2012 : Removal of Priority Sector Lending Status – led to 100 100 82 Higher Borrowing Cost. 75 80 60 40 ▪ Mar - 2012 : Cap on LTV to not exceed more than 60% - 20 ▪ Weakened t
Slide 42: 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 75 per 130 116 111 117 cent - 100 92 101 100 82 ▪ Resulting into Level Playing Field for NBFCs vis-a-vis the commercial bank
Slide 43: 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 44: 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 45: 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 higher Processing Fees No / Minimal Processing Fees No Processing Fees compared to NBFC's Usually in the range of
Slide 46: 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 herein is at your Mrs. Bi